Why Big Tech Is Losing to Boring Stocks

Scott Galloway and Ed Elson unpack why boring stocks are winning this year and debate whether they’re truly as recession-proof as investors believe. They also debate the latest wave of proposed wealth taxes and whether they can actually address inequality. Finally, they examine why AI is quickly becoming one of the defining political issues of the decade. Subscribe to the Prof G Markets newsletter Order "Notes on Being a Man," out now Note: We may earn revenue from some of the links we provide. Subscribe to No Mercy / No Malice Follow the podcast across socials @profgmarkets Follow Scott on Instagram Follow Ed on Instagram, X and Substack Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:04Speaker 00

  What's driving the markets this week? What's on investors' minds as they look ahead? Find out on the Markets Podcast from Goldman Sachs. A breakdown of market moves and macro signals in 10 minutes or less. The Markets Podcast from Goldman Sachs. Listen now.

• 0:30Speaker 01

  Your heart can tell you a lot about your health. Apple Watch Series 12 measures your heart rate every five seconds with the most accurate heart rate sensing in wearable. So your vitals app, now with heart rate variability, can tell you when something is off. And your readiness score can let you know when to rest and when to push. Hear the story in every heartbeat with Apple Watch Series 12. The features described are for wellness purposes only and not for medical use. iPhone 11 or later required. Based on Apple conducted study of heart rate accuracy, August 2026. Visit apple.com slash apple watch series 12.

• 1:01Speaker 02

  Are you a pet owner? Every six seconds, a pet owner in the U.S. gets hit with a vet bill over $1,000. Always an unwelcome surprise. That's where Fetch comes in. Fetch is the most complete pet insurance for dogs and cats. According to consumer advocate.org, you get paid back up to 90% of vet bills at any vet in the U.S. and Canada with claims paid back in as little as two days. Go to fetchpet.com/save right now for your free quote. That's fetchpet.com/save.

• 1:39Scott Galloway?

  Today's number, $2,026. That's the average amount American pet owners spent on their pets in a year. True story. My pet parrot died. Last thing you said?

• 1:51Ed Elson?

  Shit, I think my parrot's about to die.

• 1:54Scott Galloway?

  You have to think about it. That's what I like about that joke.

• 1:57Ed Elson?

  No, you don't. It's not a head scratcher. It's just a bad one.

• 2:02Scott Galloway?

  It's not that deep. It's just bad.

• 2:16Scott Galloway?

  Talk about the Pokemon card. You didn't read this?

• 2:19Ed Elson?

  Excuse me?

• 2:19Scott Galloway?

  This show's going really well so far. I just gotta say, it's clicking. It is clicking. Sixteen and a half million dollars. That's how much Logan Paul sold a Pikachu Pokemon card for on Sunday, which is incredible. But the more interesting thing was the buyer is Anthony Scaramucci's son.

• 2:35Ed Elson?

  I did see that. I thought it was pretty ridiculous, but I love Scaramucci. Um, so, you know, I, I held my tongue on that one, but I'm not sure that was the best use of funds.

• 2:46Scott Galloway?

  I immediately texted him because we're friends and I said, can you adopt me?

• 2:52Scott Galloway?

  Where does his son get seventeen million bucks?

• 2:54Ed Elson?

  It's a great question. I mean, I knew Anthony was doing well. I didn't know he was doing that well. Unless maybe his son is doing really well. What, how did Anthony respond to that?

• 3:02Scott Galloway?

  I haven't heard back from him.

• 3:06Scott Galloway?

  My guess is he's got a lot of texts about that Pokemon card thing.

• 3:11Ed Elson?

  Didn't appreciate the comment.

• 3:13Scott Galloway?

  What's going on, Ed?

• 3:13Ed Elson?

  I'm doing very well. I'm doing very well.

• 3:15Scott Galloway?

  I heard you headed to London. Is that right?

• 3:17Ed Elson?

  I am headed to London on a secret mission with an advertiser. Uh, I'm not sure I'm supposed to be talking about it, but I am heading to London.

• 3:26Scott Galloway?

  Does it involve Prince Andrew?

• 3:29Ed Elson?

  I don't think so. I think he's, I think he just got locked up.

• 3:32Scott Galloway?

  Yeah, arrested. Can you believe that?

• 3:33Ed Elson?

  I can. Um, it's pretty crazy that it's, uh, surprising, but yeah, it's, it's a long time coming, right? But yeah, I'll be in London. I'm going to the Chelsea game. I'll see Cole Palmer. What about you?

• 3:48Scott Galloway?

  And Ed is going for, at the request of an advertiser, so I'm finally, it's fine. It's good to see you finally pulling your weight.

• 3:57Ed Elson?

  Yeah, that's right.

• 3:58Scott Galloway?

  Well, as well as this banter is going, I say we head to the headlines.

• 4:01Ed Elson?

  I asked you a question.

• 4:03Scott Galloway?

  What did you ask me?

• 4:04Ed Elson?

  How's it going?

• 4:05Scott Galloway?

  That's your witty banter?

• 4:08Scott Galloway?

  It's fine. I'm in, I'm in Zermatt. I don't enjoy skiing, but it's a beautiful town and I get to hang out with my family. And I've mostly been doing podcasting every day. Did you see AOC was asked a question in Europe about my resistant unsubscribe movement?

• 4:25Ed Elson?

  What did she say?

• 4:26Scott Galloway?

  She said, wasn't exactly like a full throated endorsement. She said, you know, all of these things are great. And even if they don't work. Oh, well, thanks to that vote of confidence, AOC.

• 4:40Ed Elson?

  True politician. She's kind of crushing it right now. She's popularity, especially among young people is absolutely exploding.

• 4:48Scott Galloway?

  She's powerful. She's a powerful young woman. Intelligent, quick on her feet.

• 4:53Ed Elson?

  So you haven't gone skiing once? Or did I hear that wrong?

• 4:56Scott Galloway?

  No, no, no, once.

• 4:57Ed Elson?

  So what are you, what, what, what's the fun in being in Zermatt then? If it's just, it sounds like it's just the same routine, but with a different view.

• 5:05Scott Galloway?

  Yeah, that's pretty much accurate. But here's the thing, Ed, I'm not in charge.

• 5:12Scott Galloway?

  You'll see. Just wait. Just wait. You're in a relationship now where you like, you have like 50 50 decision making. Just wait. You just gotta smile and get through it.

• 5:23Ed Elson?

  Get through it. Get through the family ski trip in Zermatt. Well, should we get into our docket here? We've got a lot to discuss.

• 5:30Scott Galloway?

  Yeah, let's do it.

• 5:31Ed Elson?

  Today we're discussing why boring stocks are winning in 2026. We've got an update on the wealth tax debate, and then we will be discussing why AI is having a popularity problem. And just a note before we move on for coverage on the Supreme Court's tariff ruling, please check out our emergency episode from Friday.

• 5:51Scott Galloway?

  Now is the time to cry. I hope you have plenty of the well at all.

• 5:58Ed Elson?

  Last year, the market was obsessed with AI and tech stocks surged on the hype. In fact, the Mag Seven rose 23% in 2025 alone. But this year, the vibe has shifted. Investors are piling into so-called boring sectors, including consumer staples, energy and materials. All Mag Seven names are down on the year, wiping out nearly one and a half trillion dollars in market value. Meanwhile, consumer staples are up nearly 14%. Materials are up 18% and energy is up 22%. So the rotation is real and it is happening fast. We will get into all of this, but first,

• 6:37Ed Elson?

  Scott, I want to take a quick little victory lap here. Last year, when we did our investment strategy episode, when we talked about what we're investing in in 2026, I was talking about how I thought that tech was a little bit overbought and that we would need to see some sort of rotation outwards. You need to diversify. I gave you three picks for 2026. They were the equal weight S and P, healthcare and consumer staples. And just, I mean, we're not done with the year. We're only a couple of months in, but the performance so far, S and P is flat, healthcare is up 1%, which is not that great, but it's still outperforming. Equal weight is up more than 5% as some of these less loved names start to get a little bit more juice.

• 7:22Ed Elson?

  And then more importantly, as I mentioned, consumer staples is up nearly 14%, one of the best performing sectors of the year. So some of the names in here that are really winning right now, Walmart up 12% year to date, Costco up 17%, Coca-Cola 15%, Johnson and Johnson 18%. A lot of these names that people didn't really care about, at least in the past few years, are suddenly very, very hot stocks right now. So let's start with your reactions to this rotation that we're seeing. What do you think, Scott?

• 7:58Scott Galloway?

  The bigger story is just the amount of market cap that tech or AI-related stocks has had and then kind of the SaaS apocalypse. What's interesting is that it appears that people are still pretty bullish on the market and are going after or going into staples, that it's been a rotation. It hasn't been a rotation out of the market. It's just been a rotation into. Other stocks. So in these companies, you know, they typically trade at, you know, reasonable multiples, I guess, look cheap relative to everything else. And I almost think of it as sort of schmuck insurance where people said, all right, the AI and the tech trade has been the gift that keeps on giving. And we need to just be a little bit more diversified

• 8:40Scott Galloway?

  in case there is sort of a real. I mean, if you look at every single stock that's a tech stock over, call it two or 300 billion in a market cap, they have years in just the last five or seven years where they've been down between 40 and 70%. So if that happens, you're caught in that downdraft. And especially when these things, these just things look, look like they got way out over their skis. You'd want to be, if you still want to be in the market, which it feels like traders still, or investors still want to be, just go into more defensive names and just diversification.

• 9:15Ed Elson?

  I think that's exactly what we're seeing. The one thing that I would add, I mean, so to your point, the boring safe picks are the ones whose valuations have last year at least been cheap compared to say tech. But it is striking how that seems to be changing now, because the multiples on these so-called boring stocks are absolutely exploding now.

• 9:39Scott Galloway?

  Yeah.

• 9:40Ed Elson?

  So consumer staples, those stocks are now trading at 25 times earnings. That's their highest multiple in decades. Same thing is happening with materials, same thing happening with utilities, industrials, energy, they're all trading at historically high valuations. So it's this very interesting dynamic where, you know, a month, two months, three months ago, yes, what you said is true, those companies and these stocks are generally cheap compared to tech. But there's been a flippanting that has transpired in basically a matter of weeks, where suddenly it seems that actually now those boring stocks might be way overbought. There might be too much energy, too much momentum, to the point where those valuations

• 10:24Ed Elson?

  now look really expensive. Last week, we compared the difference between Amazon. And Walmart and Costco, Walmart and Costco are trading at a multiple twice as high as Amazon right now. So it's a really interesting dynamic where last year multiples were being or premiums were being placed on companies that were that were had high growth, that had an AI narrative that were building and that were investing in CapEx and data centers, et cetera. Now those companies are getting punished and it's the companies that are very boring that have been doing the same thing they've been doing for decades that are so called safe stocks. Those are the ones that are getting the real premiums

• 11:03Ed Elson?

  right now. So the whole narrative has completely flipped on its head in literally like a month. And I think that is a very interesting predicament for investors, especially if you were buying into these safer stocks at the beginning of the year, like we were talking about, suddenly you're you're holding these stocks that a month ago looked pretty cheap. Now they look kind of expensive. So what are you supposed to do about that? Are you going to hold? Are you going to diversify back into tech? I think these are the the questions that investors are now having to reckon with.

• 11:34Scott Galloway?

  I think there's real opportunities in these fallen angels in the SaaS market because who would have thought that these companies would look like a bargain as a multiple of their free cash flow and their price earnings ratios relative to, you know, Tide and Costco, I mean, and Walmart. So I think that I think the surprise, if you had a basket of these companies, I can imagine them doubling. I can't imagine Procter and Gamble and Coca-Cola doubling in the next 12 months. So I think that this is, even though these companies are quote unquote, you know, good companies in their own right, what's driving their premium

• 12:14Scott Galloway?

  is essentially fears from AI that A, you need to rotate out of AI, which is overvalued, and B, fear of or finding companies that are quote unquote AI immune. And Goldman has this AI immune index that they put together and it's done really well. But I would argue that that probably means these these these stocks are a little bit rich right now.

• 12:36Ed Elson?

  It's really fascinating how quickly this happened. Because, I mean, literally what we're describing is basically the opposite of what we were talking about. As recently as like last quarter. And it's sort of the perfect example of you want to zig when others are zagging. And that is, yeah, software is getting absolutely demolished right now. I mean, one of the things that I was looking at, I'm not one for a technical analysis, but there is a technical indicator called the relative strength index. And it's basically this formula that captures how much buying pressure and selling pressure there is in a given stock or in a given sector.

• 13:18Ed Elson?

  When the the software apocalypse, the SaaS apocalypse was happening just a few weeks ago, I was looking at that relative strength index, a score below thirty, an RSI of thirty or below. Generally, that means that the stock or the sector is very oversold. There's huge amounts of selling pressure happening. And back then, when I was looking at it, the RSI for the software stocks was eighteen. It was below twenty. So just a cascade of selling in what was the hottest sector. Now you look at the relative strength index for consumer staples as just kind of a stock counterpoint. The RSI on those stocks right now is north of seventy right now.

• 14:00Ed Elson?

  So huge amounts of buying pressure going into some of the most boring stocks that you've ever known. And yes, those looked attractive a month ago. But I think to your point, these narratives are cycling through so quickly and so aggressively that you now have to be balancing and really understanding what is the sentiment in the room? How has it changed? And what has it done to pricing? Because the price and the multiples on these stocks is just going haywire right now. To the software point, I mean, we've gone through some of the reasons why we don't think AI is going to be the SaaS killer that the market seems to think it is. You know, we've talked about how the switching costs are extremely high and AI hasn't really

• 14:45Ed Elson?

  done anything to change that. I mean, it's offering another product, so maybe there's an incentive to switch, but still the lock-in and the switching costs for these enterprise SaaS companies still really high. We've talked about How these companies can still just integrate AI into their own products. That's what Google did after ChatGPT. There's nothing stopping Salesforce or Adobe or even Figma, which is now partnering up with Anthropic to integrate AI into their own products. Nothing's stopping them doing that. And then we also talked about the fact that like trust and security are these really big priorities for companies that are licensing SaaS services for their for their enterprises. And that's again, something that AI hasn't really done anything to change.

• 15:26Ed Elson?

  In fact, if everyone's out there vibe coding their own AI SaaS tools, that probably means that the the trust and security, the value of trust and security is actually higher. Maybe that actually incents more interest in these storied names that have a real record of success. So those are some points that we've discussed about why, you know, AI isn't going to necessarily kill software like a lot of people seem to think think it will. I think two other points that I would like to just point out.

• 15:57Ed Elson?

  Microsoft and Amazon have gotten absolutely killed.

• 16:02Ed Elson?

  Microsoft is down, let's see, I think Microsoft is down fifteen, almost fifteen percent over the year year to date. Similar with Amazon. And again, the reason that this is happening is because there's this feeling that AI is going to kill them. It's going to, you know, massively disrupt their business model. And this all happened after Anthropic came out with the AI tools and OpenAI came out with AI tools too. But there are two facts that I feel like no one is really considering, which is that, one, Microsoft owns twenty seven percent of OpenAI. So anything that OpenAI does that is impressive, that may disrupt the business model of legacy software companies, like Microsoft is taking a third of that.

• 16:47Ed Elson?

  So that's the first point. And two, Amazon owns more than sixteen percent of Anthropic. They're one of their largest and earliest investors. So again, if Claude comes out with something interesting, the idea of just going and selling your Amazon because Claude's going to be a disruptor, it's like, Amazon owns Claude. Amazon's one of the biggest investors. So this idea that these older tech companies are on the other side of the AI trade, to me, it just doesn't really make sense. Like, they are literally shareholders in the businesses, the largest shareholders in the businesses that are supposedly going to disrupt their own industry.

• 17:25Scott Galloway?

  Yeah, but I think that their exposure to those companies, or the belief that their exposure to those companies would be their growth vehicles, and maybe the growth, it won't be as growthy as one had hoped, has maybe had a negative impact on sort of their parent companies, being Microsoft or Amazon. But at the same time, there's a recognition that AI is a fundamental game changer, and as you pointed out, has destroyed, you know, a trillion dollars in value in SaaS companies, despite the fact there's absolutely no evidence that their cash flows or their top line have been affected here. The other thing I would point out about, quote unquote, recession-proof stocks, or that they're safe, I find that conventional wisdom, or when wisdom becomes conventional, it's no longer wise. Now, what

• 18:10Scott Galloway?

  do I mean by that? There's a basic bull case, or kind of this trope, that with these types of staple companies, that people will always need toothpaste and shampoo, and that it's recession-proof. I think that is total bullshit. You know what I think is more recession-proof? Enterprise software that runs mission-critical operations in a company. And what I would offer up just from a consumer level is that when a recession hits, you know, consumers stop buying lattes, companies stop buying new office chairs, but companies don't stop using Salesforce to manage their customer pipeline. So this notion that this group of companies is somehow shielded from a recession, A, they're not, and B, I would argue they

• 18:55Scott Galloway?

  may be less shielded.

• 18:58Scott Galloway?

  From enterprise software, the moderates said it might hit their margins. But when you talk about CRM, ERP, cloud infrastructure, cybersecurity, these aren't discretionary spends. They're the nervous system of these companies and the switching costs are enormous, the churn rates are low, Salesforce's churn is sub 10%. You know what has higher churn? Cable TV subscriptions.

• 19:25Ed Elson?

  People were saying that Netflix is a recession-proof trade. I mean, that was, that was the idea at the beginning of last year. Everyone uses Netflix. Who cancels? It's like a lot more people are canceling their Netflix and they're canceling their Salesforce, right?

• 19:38Scott Galloway?

  Discretionary consumer, the operative term is discretionary. And, and they say, okay, they're staples. Well, okay, you might buy detergent, but you might go to a private label and you might decide to have, you know, bigger loads or fewer loads or whatever the term is. But if you have Salesforce in your company or ServiceNow or Workflow or S and P or whatever it is, that shit is hard to rip out. And you may not, you know, procurement may get off its heels and onto its toes and ask for some price concessions. But I don't see any reason why these SaaS companies aren't as recession-proof is what we have come to believe are recession-proof consumer staple stocks.

• 20:18Ed Elson?

  I think that's 100% right. It is so fascinating how many different narratives are fighting against each other in this market right now. Like there's the, there's the idea that AI is, AI is going to be the killer. It's going to destroy these business models. There's the idea that there is just general uncertainty which is going to lead to a recession. So you need to move to a flight to safety. So maybe that means you move into some of the more boring sectors that we talked about. Then there's the question of like, who will be the AI winners and who will be the losers? A year ago, if you were a tech company, if you were a software company, that generally meant that AI was going to be a good thing for your business and your multiples went up.

• 21:00Ed Elson?

  Now that there is, there's a different question where it's like, oh, actually, no, we think that AI is going to be a killer for your business. Then there's the question of is AI like a bubble? Like, is the whole thing overvalued? What's happening there? Then there's a question of like, If you're moving into safety, why are you going into toothpaste? Why aren't you going into fixed income? Why aren't you going into bonds? Maybe that means you're going into gold. I thought gold was the biggest safety play. So all of these stories are floating around right now. And it seems like over the past two or three years, the story seems to be pretty anchored in consensus. People seem to agree on what the major market narratives were, where the trends were moving over time.

• 21:45Ed Elson?

  But it seems like there's so much disagreement right now over who's winning and who's losing. I look at Amazon as another example. Warren Buffett just dumped his, practically his entire Amazon stake. Meanwhile, Bill Ackman is going out and buying up Amazon more than ever before. That's a huge disconnect on the narrative, on who's going to actually win this. So all to say, very interesting time to be in the markets, to be an investor. The level of disagreement that I'm seeing, both by looking at the prices and also just looking at the conversation online, on CNBC, among Wall Street analysts. I mean, no one seems to agree on anything right now.

• 22:30Scott Galloway?

  The net net here, and I think we feel fairly confident around this, which is dangerous. The closer you get to certainty, the more likely you are to be wrong. But in sum, the market is paying a 50% plus premium multiple for low growth, low margin commoditized physical goods over high growth, high margin, sticky digital products. So I would argue it's not a flight to safety. It's simply put, it's mispricing.

• 23:00Ed Elson?

  And I don't think that it would be a overconfidence statement to simply say that software, the risk adjusted return on software stocks on the IGV basket right now is very, very high relative to anything else. You know, that's, it's not saying that it's going to massively outperform, but based on the numbers, yeah, the risk adjusted return is pretty awesome right now. Those stocks have been beaten down to death. It's unlikely that they will, they will fall that much further, but the possibility of them going up is very high, just on a multiple basis.

• 23:38Scott Galloway?

  You know what else has been beaten to death?

• 23:40Ed Elson?

  Yes.

• 23:41Scott Galloway?

  This story. What's the next story, Ed? It's like our listeners like, all right, enough already. We get it. We get it. Ed loves Salesforce. We get it.

• 23:52Ed Elson?

  They want to get rich. We're going to get rich here.

• 23:55Scott Galloway?

  There you go.

• 23:58Ed Elson?

  We'll be right back after the break. And if you're enjoying the show so far, send it to a friend and please follow us if you haven't already.

• 24:11Speaker 05

  This is advertiser content from Comcast Business. As cyber threats become more and more machine-based and driven by AI agents, those of us in the cyber defense space, we're having to invest at the same pace. Hi, I'm Chris McFarlane, Chief Development Officer at Comcast Business. So when we think about the threat of cybersecurity attacks to businesses, they're just a lot more automated. They have the ability to think. They can scale literally anywhere from 100 to thousands of times faster than a human can. The reality is that today, you need to protect every device, every endpoint, every workload that's running on a server, whether it's your own server or in the cloud.

• 24:51Speaker 05

  This is an area that Comcast Business excels at. We're enabling intelligence-driven defense with integrated visibility, AI-powered threat detection, and automated response capabilities that prioritize, correlate, and contain risks before they escalate. And so it doesn't matter whether you're a small business or a medium-sized business or a really large enterprise. We've got this incredible portfolio of cybersecurity solutions and services to really enhance your cybersecurity posture. To learn more about how Comcast Business can help protect your business today, visit ComcastBusiness.com/cybersecurity.

• 25:34Speaker 06

  If you're looking to hire, you need Indeed. With Indeed Sponsored Jobs, you can spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results. And listeners of this show will get a $75 sponsored job credit to help your job get the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed Sponsored Jobs.

• 26:18Speaker 07

  Is your house in absolute flames right now? Then you need the Fire Advisory Squad. At Fire Advisory Squad, our trained firefighters assess your fire and provide hundreds of real-time suggestions on how you can extinguish it. Just add water. No fire is too big or too small for the Fire Advisory Squad, because we're just sliding up and down the fire pole for fun over here. You're the one hosing things down. Careful, fire is hot. Booyah!

• 26:48Speaker 08

  Fortunately, Fire Advisory Squad isn't real. That would be ridiculous. Kind of like AI that suggests what your employees should do but can't help them do it. That's like a firefighter that only tells you how to put out your own fire. ServiceNow doesn't stop its suggestions. It puts AI to work, connecting your AI, workflows, data, systems, and governance to take action and get the job done. That's why the world works with ServiceNow.

• 27:22Ed Elson?

  We're back with Profty Markets. Wealth taxes are suddenly back in the spotlight and the proposals are piling up. Back in September, a French economist proposed a 2% tax on French residents with over 100 million euros in assets. In the Netherlands, lawmakers just approved a plan to tax unrealized gains on assets such as stocks. And crypto and in California, a proposed 2026 ballot measure would impose a 5% annual tax on individuals worth more than $1 billion. That proposal in particular has sparked a lot of debates. Here are some of the headlines we're seeing from the San Francisco Standard, quote, "The billionaire tax backlash is spreading far beyond billionaires." From CNBC,

• 28:06Ed Elson?

  "California's Ro Khanna Faces Silicon Valley Backlash After Embracing Wealth Tax." And from Politico, "Billionaire Tax Sparks Infra-Party War in California." All of this backlash underscores the bigger question, does a wealth tax actually make sense? Scott, we talk a lot about inequality on the show, income inequality and wealth inequality. This is a proposed solution to the problem. What do you think of the wealth tax?

• 28:33Scott Galloway?

  So first off, let me just put a land acknowledgement or an asterisk on this, and that is, I don't think the top 1% are paying their fair share, especially the super owners. The super earners at the 1% that are, you know, mom's a baller, partner in a law firm, makes a million, million odd bucks, dad's a successful chiropractor, makes 400,000, combined income 2 million, they're paying a ridiculous amount of taxes because it's current income. The person who makes their living buying and selling assets, has a lot of assets and then occasionally sells them, pays a much lower tax rate. And what people don't recognize is what they do is they borrow against those assets, thereby deferring the tax liabilities such that their

• 29:14Scott Galloway?

  bigger pre-tax asset grows exponentially bigger faster because they they kind of never pay taxes on it or they defer the taxes. So I do think we should have alternative minimum tax. I think we should tax assets if you borrow against them, but a wealth tax in sum does not work because. Income is easier to tax. It's a flow of money from company A to person B. And basically, the government can fairly easily intercept that transfer and figure out what percentage they're taking. And it's also pretty easy to estimate what someone's flow is. The problem is with a wealth tax is you get into an enormous war that'll create

• 29:57Scott Galloway?

  a pretty sizable industry trying to figure out the value of these things. So if your net worth is $10 billion because you own 15% of a company, or 67 billion, the reality is you don't have 10 billion sitting in a checking account. So you would have to sell stuff. So it would create unnatural acts. In addition, how do you assess someone's art collection, the value of their homes? So it's sort of like you're trying to tax someone's house based on what Zillow says it's worth, and then demanding that they pay cash for it. And what if they don't have the cash on hand? Do they have to sell the house? But if everyone's forced to sell their houses or assets to pay wealth taxes,

• 30:38Scott Galloway?

  what happens to asset values? They probably go down. I wouldn't think they collapse, but they go down. And valuation is an absolute nightmare. How do you value a Picasso? Is it worth 3 million or 30 million? How would we value, say they wanted to take, say it was a 10% wealth tax, how would they value what my stake in Property Media is worth? And then where do I come up with that money? So I spend three or six months fighting with auditors and consultants and trying to get letters saying that Property Media is worth 2 million, not 20 or 100, right? So it's just fraught with risk. In addition, they

• 31:21Scott Galloway?

  don't work. 16 countries that have had wealth taxes, all but three have repealed them. The uber wealthy are the most mobile people in the world. Also, just philosophically, I think there's something to the notion that it violates private property laws. And that is, once you get through the current tax regime, whatever it is, fair, unfair, and you have that asset, that cash, post-tax, or that house, and you've already paid taxes on it, whatever, and it's gone up in value, bought the house.

• 31:52Scott Galloway?

  It's yours and no one has the right to come in and force you to sell it or to take a portion of your assets you already have. So AI, I don't think it, I don't think it works. Billionaires will immediately hire the best tax attorneys and accounts to argue their assets are worth 40% of what the government says it is. The IRS does not have the resources to fight this. And you'd need, you would literally need 10 times the budget of your auditors and your IRS to administer a wealth tax. And most of the money would go to paying lawyers to argue about your yacht valuations. They just don't work. So I think, quite frankly, just as AI in our previous story was having sort of the

• 32:33Scott Galloway?

  shadow effect on consumer stocks, I think Epstein is having a shadow effect here. I think that the general public is just so fed up with the entitlement and what is arguably the depravity of the uber wealthy here. They're like, okay, we've just sort of had it. So I, you know, I can understand the sentiment, the social pressure, the basic philosophy. We need to increase taxes on corporations and the uber wealthy. This is not how you do it.

• 33:07Ed Elson?

  I agree with some of what you said, and I disagree with other parts of what you said. I will start with where I disagree. So, I mean, you talk about how taxing illiquid assets is too complicated. Like, how do you value it? If it's not current income, like, what do you do about that? I mean, my response to that is like, that's exactly what property taxes are. Like, property taxes, you have a home, we're gonna, we're gonna come up with a valuation, we're gonna figure out an appraisal, and then you're gonna pay a certain amount of cash as a percentage of the value of that home.

• 33:52Ed Elson?

  So I don't see any reason why the exact same thing shouldn't apply to everything. I mean, we do tax illiquid assets, specifically real estate, through the form of property taxes. So, you know, like, how do you value property media? You have an auditor come in and look at the cash flow statement and figure out a valuation and then determine a tax rate based on that valuation. In the same way that we do that with houses. So I think that, I mean, I agree, it's a lot of work and it is like more complicated than just taxing current income, but I don't think it's crazy and I don't think it's out of the question.

• 34:36Ed Elson?

  And I think, given, as you say, the pushback against the Epstein class and the billionaire class, though I, to your point, I like Epstein class, I think that's better. An argument against it, I think, needs to be stronger than it's too difficult because, you know, I think the people at this point say, screw you, we can figure something out. We'll figure out a way to tax it. And I don't think it actually is too difficult. So that's one piece of it. On the other side, I do think there is a valid point that it doesn't really work. And that is, you bring up all of those countries that have tried it and then repealed it because it didn't work.

• 35:18Ed Elson?

  And it seems like the common thread among those repeals is that actually people tend to leave, billionaires tend to leave at least. And I don't like that answer. I mean, I don't like the idea that we're having to cater to this very small subset of people because they're so wealthy and we need their money so badly that we've got to tailor all of our laws just to have them stay. To me, I find that ridiculous and annoying. And to be fair, it isn't always the case that billionaires leave. I mean, we saw what happened after Mam Dhaney was elected. Everyone said, I'm gonna leave, it's gonna happen. And then the luxury market, the housing market started to rip and inventory went

• 36:02Ed Elson?

  Down because there was so much demand like they were kind of faking it. But there are cases where actually that does happen. It happened in Norway. It appears to be beginning to happen in California. Mark Zuckerberg just bought a house in Miami. He apparently is going to move to Miami in April. So I think that that is a legitimate reason why it actually might not work. And then another reason that I would add on to why it probably won't work is that, I mean, these billionaires are just not going to let it happen. Like even if it goes through in California, I guess there'll be some movement out of California. But in addition, it will be hundreds of millions of dollars funding lawsuits to make this not happen.

• 36:48Ed Elson?

  And if there's anything we've seen over the past few years after Citizens United, it's that rich people kind of control politics. So if you come up with a plan that rich people, that very, very rich people really, really, really hate, and they hate this, my view is they're just not going to let it happen.

• 37:07Scott Galloway?

  So this is total populist bullshit that defines the term, the difference between being right and being effective. The super rich are not paying their fair share. They've registered unparalleled prosperity and haven't paid their fair share. And we need to do something about our deficit. And just for the good of the Commonwealth, when the Gini coefficient is where it was during the French Revolution. All right, we've got to do something. Hundred percent right. And then let's go to the part of the program where we try to be effective and not do a non-DOM tax where we're going to collect less money in the UK than we did before the non-DOM, thinking we were going after billionaires, right?

• 37:49Scott Galloway?

  So how do we actually, if, if the net net is to help address income inequality, raise the funds, we need to have a social safety net and a military. That's the goal. The goal is to get more money, not less, and then feel good about ourselves. So you brought up the notion of basically property taxes are kind of a wealth tax. I think theoretically, I understand. I own one of 14 units in my building. There are transactions every year and they can say, all right, your unit is worth approximately X. Ed, what is the value of Prop G Media? Serious question. What's the value? What's the value at No Better? What's the value range?

• 38:30Ed Elson?

  Shall I answer it seriously? Yeah.

• 38:33Scott Galloway?

  Yeah. What's, what do you think the range of value is for Prop G Media? I would argue, one of the reasons people like this show is we give them behind the music. We try to be more transparent than any fucking show. Joe Karenin isn't going to tell you how overpaid he is. You own a large equity stake in Prop G Media because you believe it's going to be worth something. And owning equity in a company is how you build wealth. It grows tax deferred. And I, the reason I give you ownership in Prop G Media is I want you acting like an owner. And I don't want you to go be Joe Karenin's successor. So what do you think Prop G? Give me a range. What is Prop G Media?

• 39:12Scott Galloway?

  I can give you within five to eight percent certain, with five to eight percent variance, what I think my condo is worth. What do you think the range of value is for Prop G Media?

• 39:22Ed Elson?

  I'm going to go with 75 to 100 million dollars. But if David Ellison were the buyer, I'd double it.

• 39:33Scott Galloway?

  Okay. The range is zero.

• 39:38Scott Galloway?

  The bottom range is zero. What is this company worth if I show up in the Epstein files tomorrow and I'm arrested? Serious question. What's this company worth?

• 39:49Ed Elson?

  It's worth, we'll go 5 million dollars.

• 39:54Scott Galloway?

  Do you think someone would pay 5 million dollars for this company without me?

• 39:59Ed Elson?

  I'll figure it out. I'll make it happen, Scott.

• 40:02Scott Galloway?

  All right. So let's say 5 million. I buy your high end. If we continue growing, it's the, you know, podcasts are doing well. We have crazy EBITDA margins. We're going 20 to 30% a year. We have done some diversification away from the angry professor. People want to get into the space. It's hot. I get it. I believe the range of this company is somewhere between zero and 100 million right now. So say they pick the mid-range, 50 million, right? Let's say someone owns 10% of the company. All right? That means they have a $5 million liability. They're saying your asset's worth 5 million. They want 3% of it. Could you come up with $150,000 right now?

• 40:45Ed Elson?

  No.

• 40:47Scott Galloway?

  Now, to be fair, they're saying for people who make over 50 million, but let's, let's walk through practically Senator Warren's proposal. Who, by the way, keeps getting richer and richer as a congressperson, as a senator, who continues to oversee a senate where taxes go down while she constantly complains about income inequality. Well, do your fucking job. And, you know, you're the referee on the field complaining about the officiating. Anyways, her proposal is a 2% annual tax on wealth over 50 million, 2% annually, 3% on wealth over a billion. So let's take it through. So she estimates it would raise $3 trillion over 10 years. That's assuming

• 41:30Scott Galloway?

  people don't start piecing out to Madrid or Dubai or turn in the passports and go to Singapore as one of the founders of Meta did, right? So she's, let's say, let's give it to her, 300 billion a year. The 2026 federal budget is 7 trillion. So this radical, administratively complex, constitutionally questionable tax raise is 4% of the budget. And that's before accounting for evasion, avoidance, capital flight, depressed asset values from forced selling, the cost of enforcement. The annual revenue would likely be 30 to 50% lower. You're likely getting 150 to 250 billion a year, less than we currently spend on interest on the debt. And compare that. I'm not one of these don't

• 42:13Scott Galloway?

  tax the rich, but here's an idea. Get rid of the carrying interest loophole on investment firms and get rid of the lower capital gains tax. Everyone pays 37%, not 21%. By the way, do those two things. You raise the amount every year that she claims this highly speculative, dangerous, weird wealth tax would. There's no reason I should be paying 21% when I sell my stocks and you're paying 37% when you make money. There's no reason that the-

• 42:49Scott Galloway?

  Private equity billionaires should be paying long-term capital gains on their carried interest, which is essentially a commission. Whereas if you sell a copier as a salesperson, you pay current income. But when I get a commission on buying and selling assets, I pay long-term capital gains, even though I haven't put in any capital risk. There are much more pragmatic, enforceable, acceptable means of raising taxes on wealthy people.

• 43:14Ed Elson?

  Totally agree with that. I think the thing that I, the tax solution I think is best is the borrowing tax. As you pointed out, like, why don't billionaires pay taxes? It's because they just never sell their assets. And then it's like, well, how do they come up with the money? It's because they borrow against their assets. And if you do that-

• 43:32Scott Galloway?

  Triggers a taxable event.

• 43:34Ed Elson?

  Exactly. So that if you make that a taxable event, then you're solving the problem right there. But I think just to play devil's advocate on this wealth tax thing, I think the way a lot of people probably see it is, you know, you're presenting an alternative. You're like, this doesn't work, but how about we do this?

• 43:53Scott Galloway?

  No, but the billionaires are just like, this is a bad idea.

• 43:56Ed Elson?

  This is a bad idea. It doesn't work. It's too complicated. How are you even going to figure it out? I own this company like, and when they do that more and more times, at a certain point, it starts to sound like, okay, you guys are just making up a bunch of fucking excuses because you don't want to pay taxes. If you do this, we're all going to leave. So you can't do it. It's like, okay, well, propose another solution. Because the inequality in this country, everyone agrees at this point, has gotten out of control.

• 44:21Scott Galloway?

  Let me give you another one that I think is a better way to taxation. Zuckerberg is threatening to leave. Right? I think he will leave.

• 44:30Ed Elson?

  Yeah, he bought the house.

• 44:33Scott Galloway?

  I don't know. I think he's got between 80 and 120 billion. Let's call it $100 billion in meta-stock. He probably realizes it's been an amazing run. It's pretty high. Maybe it's time to start liquidating and he's going to come up with a bull- I've had it. I'm out of here. I don't like the homeless encampments. I can't stand- He'll come up with a bunch of Keith Raboy bullshit reasons for why he just wants to pay lower taxes. Here's the bottom line. Mark Zuckerberg has enormously benefited from the University of California, the great Cal State system, our highways, the fact that we have massive investments in social programs that make it a really nice place to live. For all the

• 45:15Scott Galloway?

  shitposting, the wealthiest people in the world, which is Latin for the people with the most options, all decide to stay in California. And it's because there's enormous investments in the infrastructure paid for by California citizens. So if Mark Zuckerberg aggregates $100 billion in wealth while in California, he can piece out to Florida, but when he sells his stock, he is subject to state taxes on the amount of money accreted while he was living in and leveraging and enjoying the California infrastructure. So when Bezos moved from Washington State to Florida, and this is my favorite, to spend

• 45:56Scott Galloway?

  more time with his father, what a guy. What a guy. When he starts selling down his stock, which he did immediately after getting to... I guess his dad talked him into selling his stock, because the moment he moved to spend more time with his dad, he started selling stock. Okay, when you leave, they go, "Zuck, here's a mark, 100 billion in wealth. Until you have paid 14% on that 100 billion, maybe adjust it if the stock goes down in value, but if it goes to 200 billion, fine, pay the 0% in Florida on that 100 billion, but on that first 100 billion you're selling that you accreted in California as a function

• 46:37Scott Galloway?

  of the amazing culture and infrastructure of California, and amazing human capital that is drawn to California such that they can go have, eat sushi at Nobu in Malibu, and go sailing in the bay, and go see... You know, the Rams play, I'm trying to come up with cultural references for just how fucking awesome, or go to the Greek theater, or go to stay at the pool at the Beverly Hills Hotel, all the amazing things that are singular about California, you are paying for what you accrued here. There are a lot of common sense taxes that are indefensible, it's indefensible to argue against them, indefensible. If you made all this fucking money in California

• 47:19Scott Galloway?

  and then want to peace out and not pay back California, no, no, you are paying California taxes on the money you made and the wealth you accrued in California. Get rid of the carried interest loophole, do away with the tax, the reduced taxes on capital gains, and your state taxes follow you on the capital and wealth you have accreted while enjoying the privilege and investments of that state. Boom.

• 47:47Ed Elson?

  And make borrowing a taxable event.

• 47:49Scott Galloway?

  There you go.

• 47:50Ed Elson?

  Yeah, that's right.

• 47:51Scott Galloway?

  Triggers a taxable event.

• 47:53Ed Elson?

  Exactly. Just a final point, and then we'll move on. It is just so frustrating when you've got this rampant inequality where 19 households control 2% of all the household wealth in America. We all know the stats, the top 1% commands a third of the nation's wealth, never been higher, inequality going out of control. None of these rich people who appear to care about, or say that they care about this, the state and the health of the nation, no one says a word. And then the wealth tax is proposed, and suddenly they're all triggered, and they're all up in arms about how this doesn't make sense. And suddenly they have this great analytical minds about, you know, what is best for America,

• 48:35Ed Elson?

  what makes sense in terms of the tax code, et cetera, et cetera. And it's like, it is so obvious how self-interested you are with your motives here. I think what they need to get through their heads is that this train isn't stopping. I mean billionaires have never been as unpopular in America as they are today. I mean, the statistics are just striking seven and 10 think Americans think billionaires need to be taxed more, more than half think billionaires are threatening democracy. People do not like billionaires and you can say that that's unreasonable or they're being jealous or whatever it is, but that is the reality of the situation and it's a function of how out of control inequality has gotten.

• 49:18Ed Elson?

  So this argument of that doesn't make sense, we're gonna leave, it just, it doesn't really work. Like, I think you'd have to take a poll of the, of the people of California who would probably say, okay, leave, we don't care. From our view, you're not really paying taxes anyway. We don't really like you. Get out of here, fine with us. And, you know, maybe that will be a mistake later down the line, but that's the reality on the ground right now.

• 49:42Scott Galloway?

  It is a reality and it is a mistake. That, that was the sentiment here in the UK was people like, fuck you, leave, and they did. And now they're gonna collect less money.

• 49:51Ed Elson?

  And maybe it will be a mistake. And, and to be fair, like, I, I'm not a huge fan of this wealth tax compared to others. But I think the billionaires should be, if they want to take this seriously, propose alternatives. Don't just sit there and say, no, it doesn't make sense and then peace out. I mean, give a real solution.

• 50:08Scott Galloway?

  They will, the billionaires themselves will never do that. The billionaires will never come up with, with that. I mean, I, I heard, I saw a clip of, uh, basically what is the right wing version of this podcast. And it has a couple billionaires and they said, you can't get the taxes we need unless you go after the middle class. That's where all the revenue is. I'm like, okay, let me get this.

• 50:29Ed Elson?

  They said that?

• 50:30Scott Galloway?

  You guys are suggesting the pragmatic solution is to raise taxes on middle-class households?

• 50:34Ed Elson?

  They're gonna lose, I mean, they're so out of touch.

• 50:36Scott Galloway?

  The Epstein overlay, look at it. The president, the wealthiest man in the world, and the guy who's considered the kind of prototypical. Icon of billionaire wealth and technology, Bill Gates, they're all in the Epstein files, dozens, if not hundreds of times. That is not helping their case. Let me get this. Income inequality is out of control. And now, I believe unfairly, every billionaire. I think there are no, I think there's a decent size of the population right now, a decent segment of the population right now, that feels as if the majority of billionaires are pedophiles.

• 51:13Ed Elson?

  Yeah.

• 51:14Scott Galloway?

  I mean, so, oh, tax them? Yeah, I'm down with that. Whatever it is, I don't care how pragmatic it is. I don't care. Just, yeah, hit them hard. Hit them hard. We've had it with these guys.

• 51:26Ed Elson?

  We'll be right back. And for even more markets content, sign up for our newsletter at profitemarkets.com/subscribe.

• 51:41Speaker 05

  This is advertiser content from Comcast Business. As cyber threats become more and more machine-based and driven by AI agents, those of us in the cyber defense space, we're having to invest at the same pace. Hi, I'm Chris McFarlane, Chief Development Officer at Comcast Business. So when we think about the threat of cybersecurity attacks to businesses, they're just a lot more automated. They have the ability to think, they can scale literally anywhere from 100 to thousands of times faster than a human can. The reality is that today, you need to protect every device, every endpoint, every workload that's running on a server, whether it's your own server or in the cloud. This is an area that Comcast Business excels at.

• 52:24Speaker 05

  We're enabling intelligence-driven defense with integrated visibility, AI-powered threat detection, and automated response capabilities that prioritize, correlate, and contain risks before they escalate. And so it doesn't matter whether you're a small business, or a medium-sized business, or a really large enterprise. We've got this incredible portfolio of cybersecurity solutions and services to really enhance your cybersecurity posture. To learn more about how Comcast Business can help protect your business today, visit ComcastBusiness.com/cybersecurity.

• 53:04Speaker 02

  Are you a pet owner? Every six seconds, a pet owner in the US gets hit with a vet bill over $1,000. Always an unwelcome surprise. That's where Fetch comes in. Fetch is the most complete pet insurance for dogs and cats. According to consumeradvocate.org, you get paid back up to 90% of vet bills at any vet in the US and Canada with claims paid back in as little as two days. Go to fetchpet.com/save right now for your free quote. That's fetchpet.com/save.

• 53:43Speaker 09

  Support for this show comes from Harvey AI. The future of law is agentic, not just tools that assist, but AI agents that navigate complex matters. That's why Harvey created agents that can do the work from end to end. They build a plan, pull from secure data sources, run subagents in parallel, and draft the work product ready for your review. So you delegate the work and on the judgment. Trusted by more than 60% of the Am Law 100 and leading Fortune 500 legal teams, Harvey is the AI operating system designed specifically for legal work. Harvey, AI tailored for law. Learn more at harvey.ai.

• 54:27Ed Elson?

  We're back with Prof G Markets. AI is quickly becoming one of the defining political issues of the decade. What once looked like a breakthrough technology with broad upside is now drawing scrutiny over its real world costs, from energy demand and infrastructure strain to concerns about jobs and economic disruption. That concern isn't coming from just one side of the aisle. Politicians across the spectrum, from Ron DeSantis to Bernie Sanders, have started sounding alarms about the industry's impact. So Scott, I think this is the defining issue for the next 10 years. I think this will make or break careers. I think it's already breaking careers.

• 55:09Ed Elson?

  Um, the question of AI, do we want it? How do we want to handle it? How do we want to regulate it? It seemed like it was sort of a technological nerd bro conversation. It is now very quickly becoming a mainstream conversation. It is spurring all of these grassroots organizations across the country. People who are protesting against data center constructions.

• 55:34Ed Elson?

  It's becoming a really big deal in Washington and basically across America. So a lot to say there. I guess I'll just start with what are you? What are your initial reactions to the notion that AI is now the new political football?

• 55:49Scott Galloway?

  It's easy to, you know, to highlight the problems or the causes and not necessarily the solution. But the way I see it is all you have is a bunch of quote unquote, very smart people. There's two things going on here. The chocolate and peanut butter of the just general taste of AI from the American public is a function of two things. One, I'm really sick of hearing all these quote unquote founders of AI. The moment they vest their hundred or 200 or 300 million dollars in shares and sell them on a secondary market, all of a sudden get very concerned about AI. You know, bitch, that's not helpful now. You, you built this fucking code.

• 56:30Ed Elson?

  What have I done?

• 56:32Scott Galloway?

  While you were accreting your wealth, you, you, you didn't say anything. And now that you've decided, okay, I got my 3% of anthropic. That's worth $10 billion. I'm going to go write fucking poetry. Well, fuck you. And all they talk about is the massive peril. Well, what do you mean exactly? And use all that you, you, you coded this peril. Any thoughts on how we uncode it, bitch? And by the way, are you so worried about the peril that you're going to give your money back? Or realize that you have created such an existential threat? You're not entitled to the options? Or are you just going to catastrophize and scare the shit out of us?

• 57:17Scott Galloway?

  While you're writing poetry from the Cote d'Azur with your fucking Belarusian horse? Yeah. Yeah, that's really helpful. You're a great citizen. Thanks so much. And then the second thing is on a pragmatic level. You have millions of households who've seen their electricity rates go up 67%. Because there's some fucking empty building that supposedly has, you know, computers and chips, this data center down the road that's not employing anybody. That's sucking all the energy off the grid. And all I see is my bill, my, my electric bill's gone from 80 bucks a month to 140. So there needs to be legisla-- I mean, one legislation is pretty simple. We need to start taxing the shit out of data centers. Yes.

• 58:02Scott Galloway?

  I mean, at least to, at least tax them to the incremental cost of the incremental energy and incremental price increases. Middle-class households shouldn't be subsidizing AI companies right now. So, but I am, I am really fed up with the post I've made my money catastrophizing. And I don't, I don't buy it. I don't see any reason why AI can't be used as much for defensive as offensive measures. And maybe I, I might be missing it here. There's people much smarter than me claiming it's really dangerous. Fine. But what do we do? Fine, you built it. Fine, what do we do? Come up with some solutions. I don't want to hear the word peril. I want to hear the word solution.

• 58:46Scott Galloway?

  And two, let's figure out a way that all this wealth creation, not only at a minimum, if it's not going to make the economic lives of the middle class easier, at a minimum, they can't raise their prices.

• 58:58Ed Elson?

  I also think that Wall Street is kind of underestimating the impact on future revenues here, specifically the political backlash against AI. Like, you know, you got big tech spending $660 billion on AI, 3,000 data project, data center projects underway across America. Everyone's so excited about what AI is going to do and that they're figuring out, okay, how are we going to set up the chips? And how are we going to set up the energy? And how is it all going to work out? And who are going to be the winners, who are going to be the losers, et cetera. But I do think that Wall Street is neglecting a very large question. And I wrote about this last week, which is like, how many people actually want this stuff?

• 59:39Ed Elson?

  Is it possible that the American people have decided, in similar to our previous conversation on a wealth tax, in the same way that Americans decided we really hate billionaires, what is that going to do to the structure of our economy if most Americans hate them? What happens if most Americans hate AI? What happens if most Americans decide, actually, you know what? We don't like these data centers that employ the third of the number of people that work at an average Walmart and also send our electric bills through the roof, which is something we have already seen. It's been well documented. And also, most analysts and most economists agree, this is only going to continue with more AI, more energy usage.

• 1:00:21Ed Elson?

  Also, it happens with your utility bills as well, because these data centers consume like millions of gallons of water per day. So if all of this happens and all of this builds up, and I get that it's kind of more of a popular politics conversation, and one might argue that's separate from markets, but I would argue actually, no. These two things are very, very linked, because we're already seeing all these activist groups shutting down data centers, saying, you're not allowed to build this on our property. We've got, there's a town in Wisconsin, they want to recall their mayor because he allowed an OpenAI data center to get built. So if that happens on a mass scale,

• 1:01:01Ed Elson?

  what does that do to the future cash flows of a Google or an OpenAI or an Anthropic or any of these other companies that are building data centers? Does that hurt your top line? I would argue definitely. And I think the question is, how big an issue is this going to become in the political realm? And what I'm seeing, and we've talked about, we talked about this months ago, we said, this is probably going to become an issue. What I've seen over the past, basically, two weeks is that this is rapidly accelerating into like the biggest issue in America right now. Every politician is figuring it out, talking about it, and now it's on every politician, every elected official,

• 1:01:42Ed Elson?

  to decide what is my stance on AI? Do I like it? Do I support it? Or do I not? And I think increasingly, as it gets less popular, you're going to see a lot more politicians saying, I don't like AI, I'm going to be against it. I don't know if that's the right position, it might be the wrong position, but I do think that is going to be the position that becomes more popular.

• 1:02:02Scott Galloway?

  Again, I think it all stems back from, to a certain extent, Epstein and the war on, you know, I won't call it the billionaire class, but the Epstein class, because essentially AI has become inextricably linked, whether it's Musk or Trump's support of it, or Sam Altman and, you know, prostrating himself to Trump. AI has become kind of the business of billionaires and tech and everything that's bad about it. And also with the internet, you got to at least reserve your plane ticket or something. I think those of us who are what I call AI literate are getting a lot of value from it. But I would argue that GLP-1 is actually having a more positive impact emotionally on more Americans than AI right now.

• 1:02:45Scott Galloway?

  I think people are experimenting with AI, but I don't think people think, wake up, or a lot of people now go, God, I just love, I just love ChatGPT, it's so much fun. Or I'm getting so much utility. I think people are blown away by it, and there's a lot of people in business going, this is hugely important. But the catastrophizing far outweighs the perceived utility at this point. Whereas with the internet, no one was, you know, catastrophizing about it. The narrative here has gotten away from them, and that is, the everyday consumer sees nothing but higher electric prices and some supposedly very brainiac person saying it's the end of the world. It's like, well, okay, I'm done with this bullshit.

• 1:03:27Scott Galloway?

  And if, if this doesn't pan out for Sam Altman's $850 billion raise, you know, that, I'm okay with that. And a lot of these folks don't see how this is going to affect them economically. There's a small number, you've pointed this out. There's a small number of companies where you have exposure to AI. And so I don't think, you know, I don't think consumers, the bottom line is right now, consumers aren't rooting for it.

• 1:03:51Ed Elson?

  Exactly. And that's such a big deal. And the comparison to the internet is the right one. Just some polling data in front of me here. Back in 99, two thirds of Americans said they liked the technology of the internet. Among users, that number was nearly 80%. Today, less than half of Americans say they like AI, that they have a favorable view of AI. Less than a third of Americans say they trust AI. And I think your Epstein point, some would call it a bridge too far. I think it's exactly right. I think the two things are related. I think there is a lot more public, popular interest in the way companies are built, in the way, in the way wealth is built. There's more interest in business

• 1:04:34Ed Elson?

  and markets and power, and who runs the world, and who runs these tech companies. You combine that with the explosion that we've seen over the Epstein files, the fact that we are seeing a lot of these leaders showing up to the island and potentially assaulting children. And to your point, yeah, there's probably, people are painting, painting this with a broad brush and saying all billionaires are pedophiles, which obviously isn't true. But let's be real, a lot of them, or a lot more than we had expected, did go to the island and potentially might be, or potentially might be abusing young girls. So I think these two things are related. And the popular pushback against the Epstein class, against

• 1:05:19Ed Elson?

  the wealthy individuals who are part of that ecosystem, who are controlling the technology of tomorrow, which is AI, I think that that is a big deal. And I think, you know, it's a big deal in the political realm, but again, we're a market show. This is one of those situations where I do think there will be spillover effects into the markets. I think this actually will damage a lot of these companies. And it's interesting how politics and markets are just, they're totally blending together at this point. I mean, the two, you cannot divorce the two in 2026.

• 1:05:55Scott Galloway?

  I mean, sort of investment thing that's coming out is go short, kind of direct AI related companies, the, you know, Nvidia's, Microsoft's of the world, and go long, the companies that have supposedly are under threat of massive disruption from them in the tax sector, the SaaS guys.

• 1:06:12Ed Elson?

  Okay, let's take a look at the week ahead. We'll see inflation data from the producer price index for January. We'll also get a read on consumer confidence for February and earnings will roll in from Home Depot, Lowe's, Alibaba, Constellation Energy, Paramount, Skydance, Warner Brothers Discovery, Salesforce, that'll be interesting, and Nvidia, that will also be interesting. Scott, any predictions?

• 1:06:34Scott Galloway?

  I hate the cold. I'm beginning to get so old, Ed. You asked me if I was skiing earlier. Like, I don't like the cold. I want to be in Palm Beach drinking an Arnold Palmer and playing shuffleboard and playing gin rummy. I'm getting so old. And one of the things I notice is that I'm obsessed with war. And I follow all these amazing people on TikTok, including this guy, Dijio Husar. And I follow all these content creators that are fascinated with weapons and troop movements. We are so fucking bombing Iran.

• 1:07:07Ed Elson?

  From what little I know, I would agree, yeah.

• 1:07:10Scott Galloway?

  We have two carrier configurations and massive air assets deployed to the region. We have 13 warships in the Middle East with a second aircraft carrier also on the route. And by the way, that doesn't even include the support. You know, it's not like one aircraft carrier. An aircraft carrier comes with dozens of support ships. We got the Gerald Ford, the world's largest aircraft carrier, is currently in the Atlantic Ocean en route to the region. And the SS Abraham Lincoln is already operating there. The USS Gerald Ford has an estimated arrival window of less than a week. And if you take all of these,

• 1:07:46Scott Galloway?

  and you include these, I think it's called an Arleigh Burke-class guided missile destroyer carrying Tomahawk land attack cruise missiles, you have more than 600 Tomahawk missiles. We have the ability, we're soon going to have the ability to do like 800 sorties a day. Just the cost to organize all this and move it there is staggering. A two-carrier battle group is not a show of force. It's literally a strike force. And so we have the military option fully ready. Talks are ongoing but described as very far apart. The

• 1:08:27Scott Galloway?

  window for diplomatic resolution is measured in days, not weeks. And if talks collapse, which I think they, I would argue they already have, the infrastructure for strikes is already in place. Now, those are rational reasons why we'll bomb. Again, the reason we're going to bomb, Epstein.

• 1:08:44Scott Galloway?

  Trump is mentioned in the Epstein files more times than Jesus is mentioned in the Bible, or the term meth is mentioned in all seasons of Breaking Bad combined. He loved the flex and the macho light of the Venezuelan raid, which was incredible. And he's like, let's fire up the macho meter again. And by the way, I'm in favor of this. I think the Islamic Republic has been one of the most brutally oppressive misogynistic regimes in recent history. I think that this would, there's always a non-zero probability in risk when you, whenever you take military action against a country, I think the risks to the upside here are wonderful in terms of peace and stability in the Middle East. But anyways,

• 1:09:28Scott Galloway?

  if you follow some of these creators that follow troop deployments, and we basically have the world's largest gas station in the sky now with these refueling tankers that are in the Middle East, ready to fuel sorties. This is, here come the Marines.

• 1:09:45Ed Elson?

  So the America first president, and I agree with all of the reasons why this is going to happen, is going to drag us into another war because he wants to distract us away from the fact that he is likely a pedophile, or at the very least.

• 1:09:59Scott Galloway?

  I mean, keep in mind, the UK in the last 24 hours has demonstrated more institutional credibility than the US has demonstrated in the last five years. They arrested somebody. And they arrested somebody very powerful.

• 1:10:11Ed Elson?

  They arrested their prince.

• 1:10:12Scott Galloway?

  Yeah, very powerful and very prestigious. Meanwhile, you know, what are we doing? We're, anyway, I'm not going to go there. We're bombing Iran. We're bombing Iran.

• 1:10:24Ed Elson?

  This episode was produced by Claire Miller and Alison Weiss. Mia Silverio is our research lead. Our research associates are Isabella Kinsel, Dan Shilon, and Chris Donoghue. Benjamin Spencer is our engineer. Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Profty Markets from Profty Media. Tune in tomorrow for a fresh take on the markets.

• 1:11:21Speaker 10

  For over 40 years, Whole Foods Market has partnered with growers and producers to source the highest-quality organic ingredients and products. From trusted essentials to carefully crafted artisan selections, Whole Foods Market's diverse and unique assortment of products empower you to make the best of every day. And Whole Foods Market prohibits over 300 preservatives, flavors, colors, sweeteners, and other questionable ingredients from every product on its shelves, so you can feel confident about what you put in your cart and on your table. Shop Whole Foods Market in-store or online.

• 1:12:01Speaker 11

  Trying to locate news sources that reliably separate fact from fiction can seem like looking for a needle in a haystack. That's why The Guardian is launching Stateside with Kai Wright and Carter Sherman, a conversation with experts who slow down the news and wrestle with the questions we all have about what's actually happening in the world. Three times a week, hosts Kai and Carter utilize all the reporting resources The Guardian has to discuss the news, international affairs, climate, culture, sports, lifestyle, fashion, and wellness. And The Guardian is not billionaire-owned, meaning they're free to report the whole picture without interference. Go to theguardian.com/stateside to learn more. And listen wherever you get your podcasts or watch on YouTube.

• 1:12:46Speaker 11

  That's theguardian.com/stateside.

• 1:12:53Speaker 12

  Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow, none of them talk to each other. That's where Odoo comes in, an all-in-one business management software that brings every part of your business together. From sales and accounting to inventory and marketing, all in one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no spreadsheets. Stop managing software and start managing your business with one unified system. Try for free today at Odoo.com/vox. That's O-D-O-O dot com slash vox.