Will Trump Fire Powell? ASML Sinks on Tariff Fears & An Interview with Windsurf CEO Jeff Wang

Ed and Scott break down how markets responded to the latest tensions between Trump and Jerome Powell. Then, Ed explains why ASML’s stock tumbled following its second-quarter earnings. Finally, Windsurf CEO Jeff Wang joins the show to unpack the drama surrounding his company. Check out our latest Prof G Markets newsletter Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Prof G Markets on Instagram Follow Ed on Instagram and X Follow Scott on Instagram 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.

• 0:00Speaker 00

  Flowing ad budget on metrics that look great till the CFO sees them. That's bull spend and marketers are calling it out in dashboard confessions.

• 0:09Speaker 01

  I remember telling my boss, it'll be good for the brand when leads were slow. Yeah, it it wasn't.

• 0:17Speaker 00

  Cut the bull spend. LinkedIn lets you target by company, job title and more. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com slash campaign. Terms and conditions apply.

• 0:30Speaker 02

  This episode is brought to you by Subaru. You know that place your mind always wanders to? The lake, the mountains, the homes of the people you love most? The completely redesigned 2026 Subaru Outback is built to help you get there. With legendary capabilities, standard symmetrical all wheel drive and the confidence to go further. The 2026 Subaru Outback. Love never looked so good. Visit Subaru.com slash Outback to learn more.

• 0:56Speaker 03

  Payday bars have a bone to pick with the other candy bars. Enough with the toppings and layers and stuff, kay? Payday bars are just salty crunchy peanuts and sweet caramel. Delicious. Payday Peanut Caramel Bar.

• 1:11Ed Elson?

  Today's number, 211. That's how many Republicans voted not to release the Epstein files. According to Representative Virginia Fox, most people believe the president will release the files when it's quote, "time to release them." We weren't so sure of that claim. However, we retract our doubts as the statement was later fact checked and verified by the Center for Little St. James.

• 1:38Speaker 05

  Money markets mad. If money is evil, then that building is hell.

• 1:47Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. It is July 17th. Let's check in on yesterday's market vitals. The major indices whip soared as Trump's beef with Powell roiled the markets. We'll talk more about that in a second. Still, the Nasdaq managed to hit its third straight record close. Meanwhile, the dollar failed to recover from the drama, ending the day lower and giving up its four day winning streak. Johnson and Johnson stock rose 6% after the company posted better than expected second quarter earnings and tempered its outlook for tariff impacts. And finally, Bitcoin climbed on renewed optimism for the crypto legislation we've been following, even as the bill stalled again in the House. Okay, what else is happening? Trump to fire Jerome Powell?

• 2:32Ed Elson?

  Or will he? That is the question that seesawed the markets yesterday. Late Wednesday morning, news broke that Trump had drafted a letter to fire Jerome Powell and had shown it off to lawmakers. Meanwhile, a White House official said Jerome Powell was likely to get fired. Markets fell very sharply on that news until right after that, Trump held a press conference where he told reporters, no, he wouldn't fire Jerome Powell. The president said, quote, "We're not planning on doing anything. I don't rule out anything, but I think it's highly unlikely." Markets immediately rebounded after Trump denied those firing rumors. So more drama between Jerome Powell and the president.

• 3:17Ed Elson?

  More drama that unfortunately, we have to cover because of the implications it has on the markets. This is lowbrow, tabloid, Daily Mail gossip type news. However, it is happening inside of the White House and it involves the Chair of the Federal Reserve and the President of the United States. So yeah, we have to talk about it, even if it is, in essence, not really any different from beef between Drake and Kendrick or name your celebrity gossip drama. This is just the world we live in. So we're going to bring in Scott because we want to see what he makes of this news.

• 4:02Ed Elson?

  Scott, where are you?

• 4:03Scott Galloway?

  I am in Colorado, which is my self-conscious way of saying Aspen. I'm in Colorado. My boys-

• 4:12Ed Elson?

  You're out west.

• 4:13Scott Galloway?

  I'm out west. My boys, of course, are walking ahead of me because they want nothing to do with me because I, according to them, am the lamest person in the world. And substantially erode their riz in the town of Aspen. They're expecting to be kind of little players here. Not sure it's working. Anyways, they're walking about 20 feet ahead of me.

• 4:30Ed Elson?

  I want to get your take on this beef between Jerome Powell and Donald Trump. What are your initial reactions?

• 4:36Scott Galloway?

  Okay, so first off, we need to stop referring to Jerome Powell's Chairman Powell. He's Jerome Epstein, he's Chairman Epstein. Because this is nothing but a sophomoric, yet effective attempt to get people to look away from the Epstein drama. Of Trump and MAGA zone making. This is ridiculous. He does not have the authority to remove Chairman Powell. He does not have the legal standing to take away someone's citizenship because he doesn't like them. But what you're going to see is every day he's going to come up with something more and more ridiculous that grabs headlines, whether it's declaring economic war on Canada. But every day, just wait for it tomorrow.

• 5:21Scott Galloway?

  It'll be something else because he wants something that the media, which they will do, will take the bait and not talk about. See above the Epstein files. I was watching CNBC while I was working out this morning. And of course, it was the taco trade again with Powell. The markets dipped. Then they realized he couldn't fire Jerome Powell. He got a two for the next day. He backtracked, which made more news. But again, every time he makes news, they have something to shove aside the real news here. And that is he has spent the last seven years convincing his cult to worship the sun, which is that the deep state was involved in some sort of pedophile ring on an island that would implicate a bunch of Democrats.

• 6:05Scott Galloway?

  He's encouraged these acolytes to worship the sun. And then all of a sudden I said, put on sunglasses and never look at the sun again. And they're not having it. But this is nothing but pure distraction, Ed.

• 6:17Ed Elson?

  So does this bring more meaning to taco then? I mean, it sounds like there is even more incentive now to create stupid headline worthy executive orders or threaten to make those executive orders, cause a lot of frenzied, get the news hopped up. And it's all basically just to distract us from the real issue, which is his involvement with pedophile.

• 6:45Ed Elson?

  I mean, is this, is this, is this going to be, is this mean more taco?

• 6:48Scott Galloway?

  Well, a hundred percent. And what's interesting is the market continues to fall for it, but with less volatility. So again, yesterday, the markets dipped.

• 6:56Ed Elson?

  Yeah.

• 6:56Scott Galloway?

  When the prospect of the president tried to remove Chairman Powell, who has been a steady hand. And then what do you know? He backtracked because he got another chance to distract us the next day. This is. This is the equivalent of a magician sawing a woman in half and then yelling out Benghazi, trying to focus on the fact that he's not actually sawing her in half. Or if we were at the Nuremberg Trials and somebody whipped out and started playing a kazoo. This is so ridiculous. Rosie, I mean, I'm going to revoke the citizenship of someone I hate. Oh, good. CNBC and CNN and Fox all fall for it and go there.

• 7:34Ed Elson?

  Yeah.

• 7:34Scott Galloway?

  This is a tactic from the magicians and the GRU. Flood the zone with bullshit. Get them talking about anything else other than the following. If the president had gone down to an island of a wealthy man who loved to have parties and surrounded himself with famous people and threw great parties and Trump partied and he said, it was an error in judgment, I shouldn't have gone down. But he did not engage in the rape of children. America and his acolytes would accept that. He has done a lot worse. People have forgiven him for, for, you know, things that are much worse than that.

• 8:11Ed Elson?

  For rape of adults. Yeah.

• 8:14Scott Galloway?

  That's right. Fair point. They forgave him for the rape of an adult, convicted for the rape of an adult.

• 8:19Ed Elson?

  The line is children.

• 8:20Scott Galloway?

  So chances are, if he was just down there partying and an error in judgment, like a lot of very famous people have owned up to, the market and the media and his, his cult would have moved on. But the fact that he has clearly instructed his AG to not let this list out, it reeks of something much more, much more nefarious, much more mendacious, much more serious. So he has handled this really poorly.

• 8:47Ed Elson?

  Yeah.

• 8:47Scott Galloway?

  He is creating so much smoke around this fire. He's, it's just staggering. And my favorite is when he, going back to Jerome Powell, when he threatened to replace Jerome Powell with Mike Lindell, it's like trying to defuse a bomb by duct taping it to your ex-wife. I mean, it's just.

• 9:08Scott Galloway?

  That's good, Ed. You like that one. You'll get it. You'll get it. It'll have more meaning if you if you finally put a ring on it and then it doesn't work out seven or 10 years later. You'll get that joke. This is again, America, keep your eyes on the prize here. This is Rosie Epstein. This is Chairman Jerome Epstein. You are being played. And my prediction here, you can bet in the next 24 hours, there's going to be another stupid, insane headline grabbing. He has a comms group right now and the instruction is simple. Come up with a headline every day that crowds out the word Epstein. Full stop. That is entirely what this administration is focused

• 9:49Scott Galloway?

  on right now. Announce a 200% tariff against Myanmar. Say that you are going to ban David Hasselhoff from all future TV shows, whatever it is, it can be ridiculous, it can be stupid. Just make sure it doesn't have the word Epstein and all of media just follows it like the fucking idiots they are.

• 10:11Ed Elson?

  Too much, Ed? Too much? No, I think at some point, we're gonna have to change this name, the name of this podcast to the Epstein Podcast. We need to really keep our eyes on the prize. We need to get focused.

• 10:23Scott Galloway?

  The Epstein Files with Ed Elson.

• 10:26Ed Elson?

  I love it. Okay, Scott, enjoy your walk. Thanks for calling in.

• 10:30Scott Galloway?

  Cheers, brother.

• 10:36Ed Elson?

  ASML shares plunged yesterday after the chip infrastructure company reported second quarter earnings. The quarter showed a strong beat on both the top and the bottom lines. The dark spot, however, was the company's growth forecast for 2026, which, according to the CEO, could not be confirmed because of, quote, "increasing uncertainty driven by macroeconomic and geopolitical developments," end quote. As the call went on, it became clear that those macro concerns were indeed the tariffs, and that is why they couldn't give a growth forecast. Shares in ASML fell nearly 10%.

• 11:15Ed Elson?

  Okay, so ASML, one of the biggest AI companies in the world, has shed a tenth of its value in one day, one of the biggest drops of the week. And not because of the earnings, the earnings were actually pretty great, but because of the CEO's concerns about the future, or more specifically, the macro environment, the geopolitics, the tariffs. Now, as a reminder, ASML is a Dutch company. They make the machines that make the chips that make AI. So they are, in a way, ground zero for the AI ecosystem, a great place to be right now. But as a Dutch company, it also leaves them quite exposed to the tariffs.

• 11:56Ed Elson?

  And as you know, Trump just threatened a 30% tariff on Europe this week, which would have major implications for ASML. America makes up a significant share of their revenue, almost 20%. So if you slap a 30% tariff on Europe, you're going to see a huge drop off in demand for those ASML machines that are indeed built in Europe. And so that is why yesterday on the earnings call, the CEO issued this warning. He is very worried about the tariffs and what those tariffs might do to the business. And that is also why we saw this huge sell off, because Wall Street saw his concern and that made them concerned too. And, you know, fair enough, 30% tariffs would be terrible for this company. But there's also something missing here.

• 12:41Ed Elson?

  And you might see where I'm headed with this. There is an elephant in the room that Wall Street seems to be ignoring on this news. And that is the taco trade. The belief that these tariffs are just threats and that ultimately they're not actually going to happen. In fact, that is exactly what the market told us when Trump first made those tariff threats on Europe. We barely saw a reaction from the market, both in America and in Europe. Investors said, no, we've seen this movie before, we don't believe you. So why is it that when Trump talked about tariffs, the markets shrugged? But when the CEO of this Dutch lithography company talks about tariffs, suddenly the markets buy it? How could that be?

• 13:25Ed Elson?

  Well, to be honest, we don't have an answer here. The market appears to be contradicting itself. On the one hand, it's saying Taco. And then on the other hand, it's saying, actually, no, we believe it. The tariffs are real, but only for ASML. And so our conclusion here is that we might have some dislocation on our hands. And as a result, we think this is probably a buying opportunity. Because if you believe that those EU tariffs will not hold as the markets have expressed, then there is no reason you should reverse that belief just because some executive in the Netherlands got freaked out. That's just not enough evidence to change your thesis. And in fact, if you look at ASML's earnings history, this is actually a company with

• 14:08Ed Elson?

  a long track record of underpromising and over-delivering. They are frequently quite concerned about the future. They are often expressing doubts about the macro environment. And at the same time, their earnings continue to impress every quarter. And that's exactly what we saw this quarter, too. A major beat across every relevant metric, from sales to margins to income. It was an excellent quarter for ASML. The only problem was that the CEO got spooked out by Trump's threats. So not investment advice, blah, blah, blah. But if you are a believer in Taco, then our thesis is that ASML just got put up for sale.

• 14:51Ed Elson?

  As of market close on Wednesday, July 16th, yes, today, it is 8% off on ASML. And for no other reason other than the CEO is buying into the tariff drama while the rest of America isn't. And that, to us, spells buying opportunity. After the break, what's really going on behind the scenes at the AI company, Wind Surf. Stay with us.

• 15:21Speaker 00

  Flowing ad budget on metrics that look great till the CFO sees them. That's bull spend and marketers are calling it out in dashboard confessions.

• 15:31Speaker 01

  I remember telling my boss, it'll be good for the brand when leads were slow. Yeah, it wasn't.

• 15:39Speaker 00

  Cut the bull spend. LinkedIn lets you target by company, job title and more. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com/campaign. Terms and conditions apply.

• 15:52Speaker 02

  This episode is brought to you by Subaru. You know that place your mind always wanders to? The lake, the mountains, the homes of the people you love most? The completely redesigned 2026 Subaru Outback is built to help you get there. With legendary capabilities, standard symmetrical all wheel drive and the confidence to go further. The 2026 Subaru Outback. Love never looked so good. Visit Subaru.com/Outback to learn more.

• 16:18Speaker 03

  Payday bars have a bone to pick with the other candy bars. Enough with the toppings and layers and stuff, kay? Payday bars are just salty crunchy peanuts and sweet caramel. Delicious. Payday Peanut Caramel Bar.

• 16:36Ed Elson?

  We're back with Prof G Markets. On Tuesday, we discussed the latest acqui hire in Silicon Valley. Google's two and a half billion dollar deal to license the technology of an AI company called Windsurf and also take many of their top researchers as well as their CEO. It was a highly dramatic event in the world of technology. For one, the company had just been acquired by OpenAI, though apparently that fell through. But also it mirrored this theme that we keep seeing in AI. And that is the ever growing overreach of big tech. From inflection to scale and now to windsurf. Big tech is paying billions to capture talent from the AI startup world to reorganize their structures.

• 17:20Ed Elson?

  And in many cases, shut them down, all under the guise of investment. Now, there was another piece to this story that we didn't fully unpack on Tuesday. And that is, right after the Google deal was announced, Windsurf was suddenly scooped up and acquired by a separate company called Cognition. And although the price was not disclosed, Cognition bought everything that was left of Windsurf, the product, the IP, the remaining employees, and the brand as a whole. A crazy twist in this already crazy story. And so we wanted to find out what happened here. Why was this AI company passed around from OpenAI to Google and now to Cognition? And what does all of this say about the future of AI?

• 18:05Ed Elson?

  Well, joining us now to answer those questions is Jeff Wang, the CEO of Windsurf.

• 18:17Ed Elson?

  Jeff Wang, thank you so much for joining me on Prof G Markets.

• 18:21Speaker 07

  Thanks for having me back.

• 18:22Ed Elson?

  Yeah, it's great to have you on. It's been an insane week for you, I'm sure. And I'm sure that there is a lot that you can't say, which I also want to be, I want to acknowledge, but to the best of your ability, Jeff, just give us the rundown. What happened this week?

• 18:41Speaker 07

  Yeah, I would say I walked into the office Tuesday last week, so about a week ago from filming. I was told, hey, you're running the company now and there's a lot of people that are also gonna leave the company and good luck. And on Friday, we have to tell everybody, right? So I had to kind of find the right people that were remaining to like continue running the company. And then Friday comes, we have to tell like 250 people the situation with the acquisition from Google. And, you know, it was really tough. I mean, there was a lot of people that probably thought it was just all over.

• 19:25Speaker 07

  And I had to give like a very achievable kind of goal, right? And a lot of people honestly didn't believe it. I had a lot of phone calls. In fact, I was on the phone like 24 hours after the all hands, just trying to find options. And then afterwards, we talked to Scott Wu from Cognition as one of the options and he It seemed like a perfect fit and we can get into that in a bit. But after that was a lot of just getting this done before Monday because like time was our enemy here. Customers were already confused, a lot of reps were panicking, recruiters were reaching out to everybody in the company. So we can go into a little more detail, but on Monday we announced that cognition had acquired Windsurf.

• 20:09Speaker 07

  And we literally signed the paper 30 minutes before the all hands. Like we were just to the last minute and got the definitive agreement. And I'm pleased to say that today it is officially all done.

• 20:20Ed Elson?

  Yeah, let me just tell you like the way that we see it, this whole, all the events that unfolded. We kind of see it as there is this power struggle among big tech. Basically to capture the best AI startups and do that without triggering antitrust enforcement. And our view is that you guys Windsurf were, you were the object of that power struggle this week. From OpenAI trying to acquire you and then OpenAI disagreeing with Microsoft about the rights to your IP. And then Google coming in, paying two and a half billion dollars to essentially take a bunch of your people.

• 21:03Ed Elson?

  And it was all this sort of Shakespearean drama between the big tech giants to capture AI, not be scrutinized by the FTC. And then it ended with this kind of rabbit out of the hat master stroke agreement that you appear to have brokered, which has allowed Windsurf to find a real home and a real backer in cognition. That's sort of the way we've seen this. So is there anything in there that you would disagree with, that you would maybe amend? Or anything in there that you would want to comment on?

• 21:35Speaker 07

  I think one way to look at it is if you look at a startup, how valuable kind of the components are, right? And if you over index on the founders, maybe the founders are the most valuable piece of the startup. And if you look at VCs, that's certainly what they index on. Then you can imagine a lot of big tech is going to go after the founders. But I think. People forget that the other components are also very valuable, too. And if you have a team that is this good at what they do and the product is actually still there. We own everything still. We own the trademark, the IP and everything, the customer base. It's still there. It's still very valuable. And then now you've kind of taken away all the investors and the founders off the cap table.

• 22:17Ed Elson?

  Yeah.

• 22:18Speaker 07

  Actually, it's a very interesting case study of like, this is now an employee owned company. And you could even think about like, okay, if the investors or big tech over indexes on the founders, even the remainder of the company, everybody can be very happy, right? Even if there's a smaller valuation than when the founders left. So I think there's like two ways of looking at it. One is like, yeah, big tech is getting some really good talent, but they're not getting everything there because everything that's still there is very valuable.

• 22:47Ed Elson?

  Yes, but it is, it sounds like it is a war for talent that they have perhaps not executed to perfection because as you say, there's still a ton of talent that remains that they didn't get their hands on. They got their hands on a few people and perhaps that was an attempt to, attempt to, in my view, it looks like they're trying to kind of get rid of the competition.

• 23:11Ed Elson?

  But perhaps it didn't work out on this one. But I just want to pose another question to you. We've seen so many deals in AI that have told a very similar story to what's happened here. We had Meta acquiring, not acquiring, but investing in scale and then taking the CEO. We had Microsoft doing the same thing with Inflection. And then the CEO of Inflection becomes the CEO of Microsoft AI. Google licensing Character AI's business. You know, this, this business of investing or licensing and then hiring a bunch of staff is becoming so common. I'm wondering if you think that that is sort of the future of deal making in Silicon Valley?

• 23:53Ed Elson?

  Is this something that can, that we can learn from in terms of what acquisitions look like in tech moving forward?

• 24:00Speaker 07

  I think it's possible. I mean, As CEO, my duty was to maximize the value of the shareholders. And it just so happens that everybody at the company, you know, all the employees were the shareholders. Right. So I think in some of the other cases, I don't know what their new CEO was thinking and their plan. Like, maybe it is to just run a just normal business. You don't have to grow 10x because there's no VCs forcing you to.

• 24:23Ed Elson?

  Yeah.

• 24:24Speaker 07

  But for me, like, my job is to find as many options as possible. Talk to a lot of other companies that were actually interested. Talk to some companies that wanted to just liquidate everything. But I think the whole, like, talking to Scott Wu and joining with cognition and using Devon as part of the product. I think was just so obvious after speaking with them. And I think that's not going to be so obvious for a lot of other companies that this happens to. Right. So I think it does depend on, I guess, what is left after the founders leave. Right. If this secondary outcome can be achieved.

• 24:57Ed Elson?

  Yeah. It almost feels like the AI startup world needs to join forces like you've done to take on big tech. That big tech is running around in a lot of ways, pillaging a lot of the value and a lot of the talent that lies in so many of these AI startups. And that kind of the only way to fight back is for the AI startups to rally together and then compete with big tech. Is that an accurate depiction of what's happening here?

• 25:26Speaker 07

  It might be, but like the one barrier there is there are VCs involved in a lot of these startups and their founders. Right. And then if you join forces, the question is like, who owns what? Who's making the decisions? And I think in this case, it was just a very clear cut merger here, an acquisition. But it might not always be the case if there's kind of two very famous AI startups that have very kind of like very well-known founders joining together. I think that's that is an interesting kind of thing, though.

• 25:54Ed Elson?

  Yeah, well, you've you've certainly almost pulled it off. Final question for me. Any big learnings from this insane experience you've gone through? What are you taking with you moving forward?

• 26:06Speaker 07

  I think just being relentless on finding the best solution is the main learning. And sometimes that means you don't sleep for 72 hours. And that that means like you you work together with the, you know, me and the cognition team. And my team, of course, worked together in the offices all weekend, nonstop with each other and with the lawyers and just having that drive to get to a to a solution and having a date. And when Scott Wu puts a date on something, that is going to happen. I will tell you that as him as a founder. I think the learning there is just you have to be relentless at finding the best solution. And you do everything in your power for what's right and for what's good for the employees. And I do think that this is this has been like a moment in history where maybe this

• 26:51Speaker 07

  may be the model going forward. I certainly hope not. But I do understand like the situation like before and after, and I understand like the incentives. And then the question is like, will it always work out the the way it did with how it did with us? Right? And it might not be the same for other companies in the future.

• 27:07Ed Elson?

  Yeah. Well, we appreciate that. And I will let you know, Jeff, you look well rested today.

• 27:12Speaker 07

  Thank you.

• 27:13Ed Elson?

  I'm glad you've gotten your sleep. We really appreciate your time. Thanks for joining us on the show.

• 27:19Speaker 07

  Thanks for having me.

• 27:25Ed Elson?

  That was Jeff Wang, CEO of Winter. Before we go, we'd like to play a clip from my other show, First Time Founders, where I interviewed both Jeff and his co-founder Varun Mohan almost a year ago. And I asked them in that interview how their company, then known as Codium, could compete against big tech.

• 27:45Speaker 07

  You know, I try to think about what Harvard Business School would say 10 years from now for us as a company. And I tell people this, it's like, you know, we fail.

• 27:53Speaker 08

  And what they write is, in a world in which technology was changing, Microsoft had all the distribution in the world. They had this property called GitHub. It was inevitable that they would win. And because of that, they won. They won the entire space. And all of these startups, it was a fool's errand. Why did they even try? And then the world in which we win, they were going to write, in a world in which the technology was getting disrupted so materially, there were a set of companies, and one of which was Codium, that had such a technological advantage that there was no way a slow-moving gorilla like Microsoft could even compete. So what I think is very hard. Yeah, exactly. They will write whatever the future looks like, and the history will be written by the victor. And no one will know exactly what the pages of the book look like.

• 28:39Speaker 08

  Right? And I think the hardest part about a startup is you do need to be irrationally optimistic to believe that you can win. Because by default, if you don't, you will definitely lose.

• 28:49Ed Elson?

  Well, late last week, it seemed like one of those versions of history was right. Not with Microsoft, but with Google. Google was the victor. Google was writing the history. But perhaps not. Perhaps there is another version of history. Perhaps the startups actually can win. Fingers crossed. Okay, that's it for today. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. I'm Ed Elson. Join us tomorrow for our conversation with Monica DeBol.