Uncovering and explaining how our digital world is changing — and changing us.

If, by some chance, you find yourself in Mark Cuban’s bathroom, make sure to check out the reading materials.

“If you go in my bathroom, there’s a book, Machine Learning for Idiots,” Cuban said on the latest episode of Recode Media. “Whenever I get a break, I’m reading it.”

That’s because Cuban — the Broadcast.com co-founder who went on to become an internet investor, Shark Tank star, and owner of the Dallas Mavericks — believes AI and machine learning are so important to the future that they will “dwarf” the internet. That means everyone, including and especially business owners, are at risk if they don’t educate themselves now.

“There’ll be a time when people take AI and its impact for granted, but if you don’t know how to use it and you don’t understand it and you can’t at least at have a basic understanding of the different approaches and how the algorithms work, you can be blindsided in ways you couldn’t even possibly imagine,” Cuban said.

“Algorithms are a function, literally, of the people who write them. Whoever they are, whatever they are, that’s what you’re going to get,” he added. “If you don’t know any better, it’s like if you just had somebody who wrote software and didn’t know anything about your business. There’s going to be all kinds of risks involved. You have to understand it.”

You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast.

Below, we’ve shared a lightly edited full transcript of Peter’s conversation with Mark, recorded live at Vox Media’s The Deep End at South By Southwest 2019.

Peter Kafka: Hi guys. Can everyone hear me? I do a lot of these interviews now, either on a stage like this or at our own conferences or podcasts, and the thing I’ve learned over years is the best guest you can ever have is a billionaire who owns his or her own company because they can say whatever they want. So that’s what we set up for you today. Please welcome Mark Cuban.

Mark Cuban: What’s up, Peter?

How are you, sir?

Good.

Thanks for joining us.

My pleasure. Thanks for having me.

You’re amazingly accessible, still, in 2019.

Why not?

You answer your own emails. It’s great.

You know, I’m talented like that.

Thank you for doing that. I’m not going to ask you if you are running for president.

Good.

Because that’s a boring ... I’m gonna get a boring answer. If you did run for president, like everyone else at South By Southwest, what would you campaign on?

You put me on the spot. Let’s just start by what I think is important, right, and I’m not a candidate so I don’t give a shit if you like it or don’t like it. First is common sense, right? There’s just no common sense anymore. Second is trying to bring people together. Donald Trump, our president, has got the Deplorables who he goes after every time and everybody else is an Ignorable. Then you go to the left and the Democrats, and they’re so intent about trying to get voters in primaries that nobody’s talking to anybody.

And so I think the first step has to be recognizing ... You know, we’re in Texas. Why did people, why did so many people vote for Donald Trump? It’s not because they’re all idiots. If you think about it, I mean, politicians have the worst rating of any professional. Governors, congressmen or senators, House of Representatives, whatever. And yet that’s what we vote for all the time. I think we’ve got to already start talking about, why did people vote for Donald Trump and how are you going to get them to come to the center and vote for whoever that candidate is?

That sounds like a Howard Schultz campaign.

No, Howard doesn’t ... I like Howard. I get along with him, but he doesn’t have the personality and he’s talking about being a centrist, right? It’s not about being a centrist. It’s about just using common sense. I’ll tell you, you know, I supported Donald Trump for about 30 days and then I got to know him better. I’ve known him for a long time, but I got to know him better. We talked actually a fair amount. I told a couple of my friends in Dallas, “Here’s what I think, duh, duh, duh.” And they’re like, “I don’t care. I’m still gonna vote for him.” I’m like, “Why?”

What tipped it for you, after getting to know him?

He didn’t want to learn anything. I asked my friend, “Why are you going to vote for him?” And he goes, “Look, Mark, I’ve been voting for politicians my entire adult life. You know what they’ve done for me? Nothing. You know the definition of insanity? Doing the same thing over and over expecting different results.”

And if you’re going to be a candidate now, rather than just trying to reach out and just get the far left or the far right, I think you’ve got to start recognizing you’ve got to respect people who voted for Trump because they had the right idea, they just had the wrong candidate.

Centrist, charismatic, someone who’s been on TV a lot.

What’s your point?

I don’t know. I have no point. This has bugged me for two and half years. Right after the election, we’re all shell-shocked but I remember very clearly there’s a photo of you talking to Steve Bannon in a restaurant in Midtown New York. It blew my mind. What were Steve and Mark talking about?

I like to talk to people who I think are a little bit crazy and are different than me. Seriously. I just saw the Theranos documentary. I spent a lot of time with Elizabeth Holmes. It was like, it was crazy, right? I would have a conversation. When A-Rod was going through his problem with steroids and he’d been suspended, I spent a lot of time with A-Rod trying to help him and get a sense for why he did what he did and what was going on in his head. Bannon was the same way. I’m like, who else is going to give me a better indication of what’s going on in the Trump administration than Steve Bannon?

And did you feel like you figured that out, at least from that ...?

Figured it out? No. But I found out that Steve Bannon is further left than Bernie Sanders. It was crazy.

Which is what he was telling the public, like, “Well, I want a New Deal basically. I want to get the shipyards going.”

You just learn things by talking to people, but we live in a society right now where it’s, especially on social media, where people look for reasons to condemn people and to show contempt.

And what did he want from you, other than talking to a famous person?

Nothing, just to talk, yeah, just to talk.

Just having a convo.

Yeah. I’d actually met him during the streaming days. He worked for a company called the Firm, right, in the entertainment business, and so I just hit him up and said, “Hey, let’s get a drink.” And we did.

All right. I talk about media. Let’s ... I write about media.

I know you do.

Let’s talk about media. You’re involved in a bunch of different ways. You became a billionaire through streaming media. You became really famous by being on TV. How come we don’t have more famous internet billionaires? There’s really like Elon Musk and you and then maybe Mark Zuckerberg. I think a lot of people would have a hard time picking him out in the street. Why aren’t more of these Silicon Valley people also famous?

I don’t know. It’s not like I set out to be famous. I just like to do shit I like to do. Elon likes to do what he likes to do and he does it. I don’t really know Mark Zuckerberg at all but I don’t know. I don’t know.

You know what I’m hearing, it’s your Bluetooth.

Oh, is that what ...

It’s your Bluetooth sunglasses. Why don’t you model those for a second?

The Bose new sunglasses that allow you to have speakers in there. That’s what they are.

Not an investment?

What’s that?

You’re not invested in that?

No, I just think they’re really cool.

You just wear them.

And I like them, yeah.

Good. I think everyone in this room knows you as the Dallas Mavericks owner but they also know you as the guy on Shark Tank. You’ve been on there for how many years now?

This will be our 11th season, my 10th year.

You spend what, probably five weeks a year working on it?

Yeah, just five weeks. Yeah, we shoot two-and-a-half weeks in June and two weeks in September.

And are you making money doing that?

Yeah.

Either from fees or from the investments?

Yeah, from the investments. Yeah, I just had a company we sold for $40 million.

Which was?

Cycloramic. It was a thing where they had panoramic software that worked on an iPhone 4 that had, you put flat on the surface and it would use the sensors to turn. When they changed the format of the iPhone, we pivoted to computer vision and then we just sold it to Carvana for $40 million.

So five weeks a year is not a difficult labor, right?

No, that, shooting is easy. We get there. We start shooting at 8:30, 9:00 in the morning, go till 7:00, do it for two-and-a-half or two weeks and then that’s it. It’s managing and dealing with all the companies afterwards that takes the time.

Yeah. And what is the advantage of being a broadcast TV, network TV star that you get that you don’t get from being just an ordinary billionaire? What’s the upside?

I get to do this.

Yeah.

Tables, I get in anywhere I want to get in. Kids come up to me and I get to talk to 10-year-olds, 20-year-olds, 50-year-olds. Are these still on?

They’re still going, yeah. They’re loud.

No, it’s just access. I get to meet so many people. I get to talk to Steve Bannon, Donald Trump, Howard Schultz. I like to talk to people who are different than me that I disagree with, that maybe I pick up one granular notion of something that helps me. I like to talk to tech people. It’s fun.

So you’ve been doing this for about a decade. How has the TV business changed over that time?

Not at all. No, it’s imploded. Effectively, it’s different. Back in the early days of streaming, we used to always say, “Bits are bits,” and television was one way to deliver. It was kind of a contained environment. Now those days are over and when 5G comes along and people cut the broadband cord and you don’t, you’re not buying your broadband from the traditional cable company, it’s going to change even more.

In terms of you making a TV show, it’s probably the same thing, right?

Yeah, in terms of the making and everything, yeah, it’s all the same.

In terms of production and unit economics, that part sort of remains the same.

Yeah, the hard part is just trying to ...

Everything around is changing.

The hard part is, because just the general audience sizes have declined, trying to get ABC and Sony who owns the show to move to multiple platforms and to either simulcast or to do it in different ways and that’s been the most difficult.

What do you want them to do that they’re not doing right now?

Simulcast.

Meaning?

Where you want Shark Tank, how you want Shark Tank, when you want Shark Tank. Even if it’s just, we’re on Sunday nights at 10:00 or 9:00, depending on where you live, just being able to stream then so you could watch it on your phone while you’re sitting at home, whatever.

You used to say the future of TV is not the internet, the future of TV is TV, and this was ... I think the last time I talked to you was probably four or five years ago on a stage like this. Basically you were saying, “Look, YouTube and whatever else out there, that’s not really TV and it’s still different from regular TV.”

Right.

It seems like, you know what I’m saying, it’s ...

Well, that was about scale, right? The difference is scale. You’re going to have a really hard time streaming 20 different TV shows that are each getting two million or more viewers, simultaneous viewers over YouTube or ... Look, at even Twitch, right? Twitch numbers you might get 300, 400 thousand simultaneous viewers for five different feeds. That’s nothing.

So you’re talking about the physical capacity of the internet to reach millions of people at a time.

You just can’t. When you try to do big events, when Amazon does football they get like 750,000 simultaneous ...

I mean, less than that, yeah.

Yeah, and so the internet really hasn’t been stressed. I think television distributors, the MVPDs, the AT&Ts, Charters, etc., are all screwed up because they really ... You’ve got a medium that has value because it has the best quality picture, the best delivery, there’s no buffering, etc., but they don’t market that at all and they don’t take advantage of it.

So you’re stressing about live TV and the capacity to stream things that lots of people want to watch at the same time.

Yeah, because that’s the limitation.

But there’s only a little bit of that on TV, right? It’s sports, it’s news.

No, but it’s still, in aggregate, right, when you go down the entire programming grid, in aggregate there’s ... If Shark Tank is pulling a four rating, there’s 80 million homes watching TV at that time. That’s a lot. You’re not going to just be able to stream that.

Right, but isn’t the future going to be people like my kids watching YouTube Fortnite videos because they ...

Oh no, in terms of what they choose, yeah, that’s totally different.

And it doesn’t matter whether it’s live or not.

Right, television will scale older, right, and continue to skew older. The question becomes as kids, millennials go from being 40 is the oldest millennial to being 60 is the oldest millennial, do their habits change from watching streams to something more traditional?

And we’ve been waiting for this for years. It’s finally happening now, right? You see the big tech players finally saying, “We’re gonna get into TV,” whether it’s Google actually selling linear TV live. Apple’s gonna announce in a couple of weeks they’re doing TV. Amazon’s been doing it for a while. How do you think the tech guys are going to fare as they get into TV for real?

Well, just look at YouTube. They have what, a million subscribers for their ...

A million and a half?

Yeah, 2 million. And Hulu’s got right about the same.

Yeah.

That’s nothing. So it’s going to be difficult for them. If you look ...

That’s taking existing TV and just restreaming it. What about the idea of them buying shows? Do you think Apple’s going to be successful at making their own TV shows?

Yeah, there’ll be some that are successful but it’s still going to be tough to draw an audience. That’s why live sports has so much demand. The beauty of Netflix and Hulu on demand, etc., is that you can watch them anytime, anywhere. They might draw a big aggregate audience but at any one point in time it’s hard to draw an audience, and that’s why sports continues to go up in value, sports rights.

The Apple guys or the Sony guys, they’ve brought the guys from Sony to bring it on. They were the guys who make Shark Tank. Is there any reason to think they won’t be successful at making shows like a Shark Tank or whatever else they’re doing?

No, look, there’s going to be great shows. There’s no platform that doesn’t have one or two great shows. The hard part is spending the money to make a lot of great shows. If you look at Netflix, and they’re spending what, $9 billion or $18 billion a year, they’ve essentially become the whole cable company. They’re DirecTV or they’re cable because there’s so many choices globally. I don’t think you’re going to see companies like Apple or a company like Apple spend $18 billion on programming. If they’re not, you might have one hit. You might have another, but ...

Why wouldn’t they all chase ... Look, if Netflix has said ... Look, 10 years ago they didn’t stream anything. They knew nothing about Hollywood. Now they’re a streaming company and now they’re making their own shows. They seem to be good at it. Ted Sarandos and Reed Hastings, they’d never done that before. It seems like they’ve laid out a model. You spend a lot of money. You buy a lot of stuff. And one thing about Apple and Google and Amazon is they have a ton of money. They could do that if they wanted to.

Look at Google. Google’s a perfect example. They have YouTube and they can’t create a hit to save their life.

But they’re not throwing that kind of resource at it.

Well, they have all the data. It shouldn’t be that difficult. Apple’s got data. It’s not hard to find a hit out of, hitting 1 percent or 2 percent or 5 percent if you spend enough. It’s hard to create good quality content in volume and it’s hard to get a public company to spend $10 billion, $15 billion, $18 billion a year on content.

It seems like the major difference, right, is that’s all Netflix does. That’s their one business. And if you’re Apple you’re still ...

That’s what I’m saying. It’s going to be very hard for them do. It’s like AT&T buying Time Warner. They’ll expand HBO and they’ll produce more content, but how much are they going to spend?

We were talking about this backstage. You know the AT&T guys really well. You’re in Dallas. They’re in Dallas. How do you think they’re gonna do at wrangling the HBO culture, the Turner culture?

I think they’ll be fine. I think they’ll be fine because they lost some key people but they’ll balance it out by throwing more money at it because they have to be successful. They can’t lose.

One of the questions with them is can they really actually keep up with Apple, Amazon, Google, because they actually have an existing business.

Well, they’re HBO. There’s only a couple companies that are great at creating really good content. The HBOs of the world, the Netflixs of the world, Disney does it well. There aren’t a lot of them, and so it’s not easy for Apple just to come in and say, “Let me just hire a few people and do this.”

So, by buying HBO, even if they don’t have Richard Plepler running it, you’re saying AT&T has bought themselves an incredibly valuable asset ...

Yeah, without a doubt.

... on the tech guys.

So yeah. So, then if you try to envision forward, then you’ve got 5G coming, so they can use 5G to just deliver. With 5G I think we’re going to cut the broadband core. Just like wired phone lines are pretty much dead. We’re going to see the same thing with broadband, where people aren’t going to order cable, call up the cable company, order broadband. They’re just going to get it from a wireless carrier that has ...

They’re going to call up AT&T and say, “I want to get broadband from you.” It’ll be competitively priced.

”I want 5G.” Won’t even say broadband. “I want 5G and that’s going to give me all these different services.” And including that is probably, hopefully, potentially going to be a lot of quality content that’s visually improved over what you could stream before.

So what does that mean for your main business now? Is this the Mavs?

One of many, yeah.

Fair assessment.

Yeah, it’s big, yeah.

So what does that 5G world mean for you?

Oh, it’s great.

As a sports owner?

Oh, as a sports owner. Look ... we want people to have the best possible experience. And so being able to stream at 4K or 8K or even more, having a gigabit, potentially, of allocated bandwidth to do things we haven’t even invented yet. Whether it’s AR, VR, whatever the case may be, being able to do interactive, with gambling, it’s going to be enormous.

And so there’s so many things that we can platform. Up until now, we’ve pretty much only used streaming for movies, Gilligan’s Island reruns, watching Friends 900 times, or The Office.

Oscar-winning movies via Netflix.

But you’re not taking advantage of the technology, is the point.

Yeah.

Right? We haven’t said, there hasn’t been enough bandwidth to be able to say, “Wow, what new types of applications ...?” So here in a tech conference, in South By Southwest, one of the things I’d be thinking of is, “If I have 100 megabits, or 500 megabits, what kind of applications can I create? How can I make entertainment different? What new ideas can I come up with?” Because that’s hitting them where they’re not.

That’s what we haven’t seen yet. And I think that could have a huge implication. There’s something somewhere, some kid somewhere is creating content and thinking in terms of 500 megs as opposed to 20 megs.

So the NBA really likes to play around with new tech. So, they’ll do a thing with Oculus or Magic Leap or Twitch. And they’re doing some cool stuff where I can buy now a game, individual game. I could buy a fourth quarter of a game ...

Right.

... through Turner. But their still core business is selling really expensive rights packages to ... right, today it’s Disney and now AT&T. I’ve talked to people who own teams like you and they say, a couple of them said, “I wish we stopped doing those deals. I wish we just kept these rights for ourselves. Went directly to the consumer. We can make a lot more money.” What do you think about that idea?

Not quite yet, but soon, for the very reasons that I just mentioned. When we can come up with something that’s innovative, then you grab them back and you go with it. Right? There shouldn’t be just one feed of a game on TNT, or one feed of a game of the Mavs playing on Fox Sports Southwest. There should be 20 different ones. There should be a Twitch version, right? Where you get something that’s geared towards people who like the Ninja-style and the streamers there. There should be a gambling, there should be an AI version. There should be a VR version, if you want to watch on a headset. Because there’s fungible bandwidth, and we’re just not using it in the most effective way.

But you’re talking about tech and the way you display it. I’m asking you, do you think the league and the owners are willing to forego those really big upfront checks?

They go hand in hand. If you have something really compelling and different, then people will pay for it. If I just said, “You know what, I’m just going to move the same stream that we have from Fox Sports Southwest to Fox Sports Go, and now you’ve got to pay more for it.” That’s going to be a tough sell.

But you don’t sell it to Fox Sports in this theory, right? The theoretical thing I’m sketching out is, it doesn’t go to Fox Sports, it goes to mark.com, or mavs.com.

Oh no, no, no I get that. I get exactly what you’re saying. Right. So again, if I just take over the stream and you said, “Mark, all the people who are rights buyers are gone, right? And you’ve got to create an environment where you’re going to generate revenue and give customers exactly what they want.” Then I would look just for the exact same thing I just said. I would gear towards 5G and try to find new ways to create broadcasts that leveraged high-bitrate opportunities. The interactivity, all those things I just mentioned. That’s where the upside is going to be, but you don’t want to start taking that step until there is a transitory significant ... someplace where you can jump off from.

So, there’s two theories of sports rights when people are predicting the future. One, I assume you endorse the first one, which is they’re going to keep going up, keep going up because we’re going to add in the new tech buyers, we’re going to add in China, got a lot of international rights.

The other one says, “The TV guys have been overpaying for sports rights for a long time because of this bundle. That bundle is breaking up, the TV guys are going to say, ‘No more. We’ve hit our limit and or maybe we’re even going to go without it. Or it’s going to be a la carte. We’ve actually overvalued sports.’” I’m assuming you’re saying No. 1 is correct, but No. 2 seems like a good argument.

Well, first of all, look what subscriptions would be to traditional media if they didn’t have sports.

Cheaper.

Cheaper, but gone, because you get the cheaper alternatives already. There just wouldn’t be many reasons to subscribe at all. So that’s one.

And two, drawing an audience at a given point in time is hard. You know, billions of hours or minutes of content on YouTube. You pick any video that has hundreds of millions of views, and you don’t know if any two people are watching it at the same time and can be social around it. So, there’s so many other types of opportunities for real-time broadcast, when people can be social. I mean, we tweet more, we communicate more, we watch together, there’s the social gathering. And so I think that becomes more valuable in a universe where there’s unlimited choices, not less.

Different version of that question. Do you think the NBA, the NFL, related key leagues, right... Are they at a point where they’re going to say, “We’re going to take some of our most valuable programming that right now is going on linear TV or cable TV, and we are willing to sell it to the highest internet bidder — Amazon, Facebook — as long as they can plausibly show us that they can stream this, and they’re gonna have to pay us a lot to do it. But we’re going to take some of my most valuable stuff off of TV and put it on the internet.”

Yeah, I can see somebody like Disney doing that, because nobody dominates local streaming yet. If you want, “Okay, I just got to Austin, what can I just stream around Austin? What’s going on where I could just be on my phone and check out everything?”

But if you’re Disney and you say, “Okay, I can build a local Austin feed, Dallas feed, one for every DMA [Designated Market Area], and sports can be the bedrock of that next to news.”

So, that’s still, Disney who’s still in that market trying to protect that.

Just because ... and I say Disney because they own local TV stations. And so, anybody who as you saw, Sinclair broadcasting owns a ton of local TV stations, get in on the YES network, and they’re going to do more streaming.

They got into the YES network and so did Amazon.

In know it’s ...

Why is Amazon buying a piece of a local sports network?

For the same reasons they licensed the NFL: It drives usage.

But that’s a global, international thing.

But that’s the whole point. Again, that’s my point. There’s no local drivers. And so if ... they know the numbers. If you’re buying more on Amazon, if there’s a local connection and you’re streaming something, they’re gonna monetize it. There’s just no local connectivity. There’s no local programming that people naturally go to.

And so, we have a lot of different tools that, I go to Google Maps and I’ll say, “nearby restaurants” or whatever, maybe go to Yelp, depending on what I do. But there’s no real entertainment source that’s connected in a big way. And this is part of that opportunity. So, if you’re in New York and you know people are going to watch the Knicks or the Yankees or whatever it may be, that could be the gravity that pulls you there.

You mentioned gambling a couple of different times.

Yep.

The euphemism is “gaming,” right? And it’s been illegal, and now it’s legal. You can bet on sports, state by state by state. Talk to some of the guys who do this, “It is never going to happen in Texas. Texas will be the last one.”

Unfortunately I hear that too.

Do you think that’s true?

We’ll see. As of now that looks to be true.

And that’s a moral, philosophical opposition.

Morals in Texas are crazy sometimes.

How do you feel about it? Do you want gambling in the NBA? Pro legalize gambling?

Yes. Because it’s not like the gambling is not happening. It’s already happening. It’s not like we’re introducing some new drug that never existed before and now we’re going to have people that are falling under its spell. It’s already there and this legalizes it, and you can tax it and all those types of things ...

[You aren’t] worried at all about someone who wasn’t exposed to gambling or wasn’t sports gambling. And all of a sudden now it’s popping up on their iPhone, which is already this addictive advice?

Of course, of course.

Who’s going to put in the the guard rails for that? Especially since it’s state by state by state.

Well, the states, obviously we’ll be involved in and we’ll try to do it as well. I mean, we’re not, I don’t think you’re going to see us taking million dollar prop bets. Does Luca Doncic just make his next half court shot? He probably will, but you know.

Yeah, he probably will.

I mean, so without question, anything like that has risks associated with it, but the risks are there anyways. And now, you know, by taxing it, you can put together programs to help.

What are you doing to protect the players? Or help them stay out of the really obvious pitfalls that are going to get involved when there’s legalized gambling?

Oh, we do all kinds of training.

Someone’s going to call Luca and say, “Miss that shot.”

Miss that shot. Yeah, we do all kinds of training on that.

Are you ramping that up?

Yeah, absolutely. We actually have had multiple training sessions on gambling, and we also use data. You’re going to see if the line moves. And so if people try to influence the line, and that’s really where you get your ability to protect yourself.

And since we’re talking about the way you’re running the team and running that organization, you guys had a big sexual harassment issue. Basically the net result was everyone’s included, there was a really bad culture there.

Yeah.

How surprised were you by that?

I was shocked.

And how did you end up being surprised that your organization had a terrible culture?

I mean, not to make excuses, but I spent all my time on the basketball side, and if I was in the business office once every two years, that was a lot. And I had people who ran it. I mean, look, my email is mcuban@gmail.

It’s true.

Yeah, I get email, hundreds of emails every day. And literally, I was shocked, because all one person had to do was email me.

Now, I made mistakes as part of that. And we did a full investigation and I learned a lot. And fortunately, I was able to connect with Cynt Marshall, who is incredible, and she’s our new CEO, and she’s completely revitalized our culture.

Why do you think we haven’t heard more of those stories about sports in the year-plus of #MeToo, investigations, and scandals that we’ve seen. I mean, there’s obviously the stuff with gymnastics. But there’s, you guys, there’s gymnastics. Sports is in many cases almost literally a boys club. You think this would be rife with this. Is it that it’s happening and for some reason it hasn’t been exposed?

I don’t know. I mean, I didn’t pay attention enough to my house. So, I obviously haven’t paid attention to other people’s.

Every year I talked to you, I say you famously said, “YouTube’s not a good business. It’s never going to amount to anything.” You always doubled down on that. Are you still in the anti-YouTube camp? Or can we get you to turn around?

I’m not anti-YouTube anymore. Obviously they’re crushing it. But you know, if YouTube had done it right, there’d be no Hulu, there’d be no Netflix. There wouldn’t be all these other streaming services. There wouldn’t be Amazon Prime.

Because they didn’t want to be a content company.

But they do want to be a content company, because they use algorithms to promote different things and they have all kinds programming that they support.

But they’re fundamentally uncomfortable with that. And they always spend, and they say, “Actually, we’re done spending.” And, “Okay, we’ll try spending again. We don’t really want to do it.”

Well, yeah. And that’s exactly the point. Yeah. Now look, you know, YouTube is a very profitable business now, because bandwidth costs are negligible, and that was always the biggest hurdle for them.

I have more questions for you, but I want to open up to the audience. I think there’s a mic, is there a mic stand or just a mic floating around? All right. There’s a mic floating round, so please just wait till you get the mic to ask the question, because we’re recording it. Who wants to ask Mark Cuban a question? Over here?

Audience member: Hey Mark.

Mark Cuban: Hey.

Audience member: Love Shark Tank, by the way.

Mark Cuban: Thank you.

Audience member: So, I was curious with all the investing that you do, what are three areas that you’re really excited about investing in, besides gambling ... currently?

Mark Cuban: So, if I we’re going to start a business today, I’d build it around Alexa and Google Home. If I was 15 or 20 or 25, and you know, back in the day when I was working as a bartender and started a company, I would learn ... because Alexa skills and scripting Alexa skills is really, really easy. But everybody thinks it’s really, really hard. And so that disconnect is a great opportunity. And so I told my kids, other kids, learn how to script, and just go get your neighbors and set up all of these Alexa tools and you’ll make $25, $30, $40 an hour.

Isn’t the challenge there that Amazon and Google control that portal? And so figuring out how to get discovered ...

No, they’re dying for help. It’s like the early days.

They want it.

They’re dying for anybody who’ll help them. So that’s one.

And No. 2 and 3 are AI. As big as PCs were an impact, as big as the internet was, AI is just going to dwarf it. And if you don’t understand it, you’re going to fall behind. Particularly if you run a business. I mean, I get it on Amazon and Microsoft and Google, and I run their tutorials. If you go in my bathroom, there’s a book Machine Learning for Idiots. Whenever I get a break, I’m reading it.

Seriously, you have to know it. Now, the internet, it’s just there. Mobile, desktop, whatever it is. There was a time when people didn’t take it for granted. You have to learn what the internet is.

There’ll be a time when people take AI and its impact for granted, but if you don’t know how to use it and you don’t understand it and you can’t at least at have a basic understanding of the different approaches and how the algorithms work, you can be blindsided in ways you couldn’t even possibly imagine.

Algorithms are a function, literally, of the people who write them. Whoever they are, whatever they are, that’s what you’re going to get. If you don’t know any better, it’s like if you just had somebody who wrote software and didn’t know anything about your business. There’s going to be all kinds of risks involved. You have to understand it.

The last time we had this conversation, you said, “I’m long Netflix.” That was probably four years ago.

Yeah, still am.

Made a lot of money there. Still am.

Still am. Same.

Question back here.

Mike: I’m Mike, I listened to your interview on Real Vision and I heard you talk about the danger of machine learning and AI. I know a lot of those technologies can potentially solve problems that we could not solve before, but they can also create more problems that we haven’t even seen before. Can you talk more about that?

Mark Cuban: Yeah, that happens with every technology. Just look at the internet. “What a great way for everybody to communicate. The world is gonna be a better place because of the internet. Facebook, oh my goodness, right? We’re gonna get social, our friends will be able to connect.” There’s always a downside.

The challenge with AI — and put aside Terminators and generalization where everything thinks or AI thinks. Just now, anything that becomes black box, that people don’t understand, it’s gonna be difficult for people to know whether it’s doing its job or not. It’s just like, “Trust me, I got this,” type thing. That’s the big problem from a small- to medium-size business.

The second problem is, big businesses have more data. That gives them an inherent advantage over smaller- to medium-size businesses, particularly since those smaller companies don’t know how to use it. Next is us vs. China. China has no privacy issues. They have data, data, data, data. If you connect data with ever-improving processors, with ever-increasing speeds of 5G and other communication mechanisms, then there’s unlimited things that can go wrong. We’ll just have to be more vigilant.

Do you think the US is right to try to basically ban Huawei?

Yeah.

As a national security issue, not as a competition issue.

Yeah, right, as a national security issue and, I would say, for our infrastructure bill. If you look back in the history of infrastructure bills, if and when it happens, it was to build highways between cities that improved commerce, right?

Now we need to create more ... AI’s going to take some jobs and, depending on where you are in the cycle, maybe a lot of jobs. But it can also create jobs. If you look at all the factories, things that are made in China, Vietnam, and East Asia, those are things that can be brought back to the United States via robotics.

The United States does really well with robotics software, but we don’t make robots. That’s Japan and Germany. I would be investing in robotics here as an infrastructure play, supported by the government, and using that to bring back a lot of the manufacturing that moved overseas.

Now, it’s not gonna be manufacturing where someone’s sewing. As robots get more manual dexterity, that will be replaced. But someone’s got to maintain them, manage them, monitor them. That’ll create jobs and bring more commerce back over here.

You know who’s freaked about robots and AI is Elon Musk. I forgot I wanted to ask you. Elon’s having trouble with the SEC because they don’t like his tweeting. You had a long-running issue with the SEC over something more significant. Do you have any advice for Elon Musk about how to work the SEC?

Yeah, I talk to him.

You do?

Oh, yeah.

Does he listen to you?

He did. He took my advice.

When was this?

When he settled. I’ll tell you exactly what I told him. I said, “Elon, name the last five people that you know that settled with the SEC.” He couldn’t name one. Because no one pays attention. I’m like, “Just get this shit over with, settle, and it will be forgotten.”

But then he’s gone right back and he’s tweeting again.

That’s Elon. You get those competitive juices going. The SEC just has a bunch of idiots that do dumb shit.

But you can say that because you settled.

He can say it. He just can’t talk about Tesla. He can call them idiots all day long.

It seems like a bad idea to have a settlement with them and then go on Sixty Minutes and go, “I don’t respect them at all. They’re a bunch of idiots.”

I say that all the time.

But you settled.

No, I mean, so did he. The only thing he can’t do is talk about Tesla and that was his mistake and that’s why they went back after him.

Did you reach out to him or did he ask you for that advice?

We have a mutual friend that put us together.

I like hearing these stories. Someone else?

Sandra: Hi, Mark.

Mark Cuban: Hi.

Sandra: I’m Sandra. I work for VSI. We work with Alexa and also Google Home. We’re one of the first voice skills agencies to put advertising on these platforms.

Mark Cuban: Good.

Sandra: How do you think that we can take some of that control away from Amazon? How do you think we can educate the public to not be afraid of AI or collecting that data from then? Because I think one of the biggest factors that we see right now is that people are afraid of that data collection, even though they don’t realize that their smartphones ...

Mark Cuban: Do the same thing, right.

Sandra: Do the same things. But they’re like, “Oh, I feel like Alexa’s listening to me.”

Mark Cuban: You know what, I’m going to disagree with you on the second half, because, in this room, in a tech-literate room, people are concerned about privacy.

Sandra: Correct.

Mark Cuban: Outside of that, people don’t care. They just want their lives easier. When you’re waking up, worried about health care, jobs, your kids, their school. You’re not thinking about, “Is Alexa listening to me?”

But what about this idea that Facebook is reading your messages to your bank, which turns out to not be true, but it was this devastating New York Times story that really resonated with people. That somehow did sink in with them.

Yeah, I mean, look. There are, I don’t want to call them threats, but there’s a trade-off between simplicity and making your life easier and the collection of data.

I want to go back. You were talking about your business, right? One thing I would do, and I would recommend to everybody, just like you captured URLs and you wanted the name relative to your business. You want to do the same thing with keywords on Alexa and Google Home, because if someone says, “Tell me about soap, what’s the best soap? Alexa, what’s the best soap?”, you want to be coming up.

If you look at the new devices that are coming up from Facebook and from Google and Amazon, they all have video. I live off of Alexa, I love it.

But if you ask Amazon, “I wanna know about the best soap,” the first thing they’re gonna give you is either an Amazon-branded soap or whatever they want you to buy.

Not necessarily, no. It’s just like the early days of URLs. They haven’t captured everything.

But on the web, that’s what’s happening.

But it’s different, that’s the whole point.

But don’t you think that’s going to happen with Alexa?

No, voice SEO is completely different, totally different. Now, in taking that further out, again, these are things we’re looking at, they’re using video now. You can watch things on an Amazon [Echo] Show. You can see commercials. I’m talking to Amazon saying, “Okay, how do I do Alexa video SEO?”

I’m watching Scott Galloway fume back here, I think. I think he may have a different perspective.

Sandra: We created the very first video flash briefing, so that people are able to advertise, if you’re interested.

Mark Cuban: Absolutely. But it’s an opportunity. The point is, it’s an opportunity. There aren’t many companies ...

Sandra: Voice SEO is a wild wild west.

Mark Cuban: That’s exactly right. That’s where the biggest opportunities are. You don’t want to be the ten-thousandth and first person doing something. You want to go where people don’t know to look.

It just seems like that’s going to be a closed loop. But I’m not going to argue with you about it. You know more than I do. Let’s let someone else ask a question. Or pitch a company.

Audience member: Hey, Mark. Early investor in Broadcast.com. Thank you.

Mark Cuban: You’re welcome.

Audience member: Fun, interesting kind of question. You’ve got the resources, you’re a good, fit guy. What are you doing to prolong your life?

Mark Cuban: To prolong my life? Oh, oh. I got young kids’ blood I transfuse every other day.

He’s got blood boys backstage.

I’m serious! No. I try to work out. I try to watch what I eat. I do get my blood tested every three to six months, so I have baselines and that’s helped me learn a lot about my body. I just try to be smart.

No, that’s your phone.

Sorry about that. You’d think I’d know how to turn this off by now.

No, that’s all right. Eat well, get new blood. Anything else?

It’s interesting. As you get older, your body is more receptive to vitamins and food and all these different things, allergies I never had until I hit 35 and 40. It’s really interesting to try to figure some of these things out. I don’t think there’s any cure for aging and I don’t know if it’s gonna happen in my lifetime.

But I will say this. My son is 9 and by the time he’s 40, let’s say, the idea of going to a drugstore and buying over-the-counter medicine that says, “You might be the one unlucky schmuck that dies from this,” is gonna seem barbaric. We’ll have personalized medicine. What medications you take will be geared toward you, because our body is just one big math equation. These are all the different variables and so we’ll figure out how to solve problems in a lot of different ways than we do now.

A couple more super-quick questions.

Audience member: Hi, Mark.

Mark Cuban: Hi.

Audience member: Hi, nice to meet you.

Mark Cuban: You too.

Audience member: You’re awesome.

Mark Cuban: Thanks.

Audience member: I’m building a fintech platform focused on women and my question to you is, I see you on Shark Tank. I don’t see a bias on Shark Tank when it comes to women pitching versus men pitching.

Mark Cuban: No.

Audience member: Yet, in the VC world, we’re still seeing 2 percent of capital going towards women who own businesses. What’s going on? How do we change this?

Mark Cuban: Markcuban.com is where I list all my companies, mostly Shark Tank companies, and I list woman-owned businesses, military-owned businesses. I think, before we sold a couple, I don’t know what the exact number is now, but 48 percent of the businesses I’d invested in were woman-owned or -operated businesses. People who are investing have just got to make a conscious effort to help.

Audience member: But how do we police ...

Mark Cuban: It’s the same thing with people of color. It’s the same thing with disadvantaged communities. You just gotta go out there. For the reasons I just said, it’s almost like an arbitrage. You look where people aren’t for the greatest opportunities. It’s made me a lot of money. That’s what I’ve tried to do.

So out of self-interest, you can do that?

Yeah, I mean, I want to do the right thing, but you can do it and still make money. It’s not charity, it’s really an opportunity. I don’t typically invest in funds, but I’ve tried to partner with women in PE and VCs and the like as well.

With the Mavs, I’ll tell you a hard, hard lesson I learned. I used to think that you just treated everybody equally. Equal is equal. But then I learned the hard way that treating people equally doesn’t mean treating everybody the same. Everybody has a different perspective. That unique perspective that each person — each category of person, each demographic, whatever it may be — has, can create opportunity.

We were dumb enough to have 40-year-old white guys trying to sell to the Latin community, the Hispanic community. Trying to sell to moms. Put together a package to sell Mavs tickets to moms and you look and they all look like me. It was dumb. Now that I recognize that every demographic ... there’s always a unique perspective that we can use to try to learn and to try to better sell, to better communicate, to better serve and support our customers.

People who are starting to understand that now ... there’s more and more of us. I think it’s a great opportunity. The hard part, though, is thinking there’s only two percent of VC money available to me. You’ve just gotta go find the right people. That’s the hard part.

I promised one last question. Can we squeeze one last in? Is there a mic? Just yell?

Audience member: Hey, Mark.

Mark Cuban: Hey.

Audience member: I’m a DFW native, lifelong Mavs fan.

Mark Cuban: Appreciate it.

Audience member: I’m also a business student at the University of Texas here in Austin. I’ll be graduating this May. I’m curious to know, if you could go back in time and tell 22-year-old Mark Cuban anything, what would it be?

Mark Cuban: Don’t fuck it up.

Do we leave it there?

Seriously. I mean, it turned out okay.

We’re gonna leave it there. Mark, you’re great, thank you.

Appreciate it, thanks.

Thanks, guys.

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