Why Trump’s War Week Didn’t Break Markets

Scott Galloway and Ed Elson unpack President Trump’s investigation into Jerome Powell, with Scott explaining why he believes the goal is to sideline Powell entirely, not just remove him as Fed chair. Ed shares which part of the public’s support for Powell surprised him most. They then dig into the surge in metals in light of Trump’s moves on Venezuela, Greenland, and Iran. And finally, they break down the week’s biggest AI headlines and how they’re reshaping the power dynamics in the AI race. 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.

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• 1:29Scott Galloway?

  Today's number 93. Polymarket accurately called 93% of the Golden Globes winners last week. The Golden Globes really isn't an award ceremony.

• 1:42Scott Galloway?

  Is that a joke? No, that's me pausing because I forgot what I was gonna say. I came up with something good. Today's number 93. Polymarket accurately called 93% of the Golden Globes winners last week. The Alzheimer's is kicking in.

• 2:04Scott Galloway?

  It's time to call my nurse, reheat my soup. Today's number 93. Polymarket accurately called 93% of the Golden Globe winners last week. That's incredible. The Golden Globes isn't as much as an award show as it is a gathering of people who would fuck their sister for a limited series on Hulu.

• 2:34Scott Galloway?

  Ed, how are you?

• 2:35Ed Elson?

  I'm doing well, but I'm a little upset that we were not nominated for a Golden Globe for Best Podcast. There were a lot of nominations. It was the first year that the podcast category was created and we were not on the list. And so I'm a little bit upset about it. Other than that, I'm doing very well. How are you?

• 2:52Scott Galloway?

  I was watching the award speeches on TikTok of all places and I thought, that is the exact same vibe and tone I used to thank my dealer. It's like, it's got that same, oh, thanks, man. It's got that same sort of, same sort of vibe. Or when I roll up to a bar and I remember I didn't put on deodorant, but at that point I remember where the deodorant bar is. I don't know. I know I was going with that. I thought the nominees for Best Podcast were really solid. Mel Robbins is great.

• 3:23Ed Elson?

  It was just all the, all the most famous people.

• 3:25Scott Galloway?

  They didn't have Rogan. They didn't have Ben Shapiro.

• 3:27Ed Elson?

  Sure. It was the most famous people that were not politically divisive.

• 3:33Scott Galloway?

  Who else was in there? Obviously Amy Poehler. There's some, there's a little bit of backlash in the podcast community. Let me spill the tea here, Ed.

• 3:42Ed Elson?

  Please.

• 3:42Scott Galloway?

  I think she's a remarkable talent. Although she has not invited me on her podcast, I've been on every one of the podcasts except for the woman who won, Amy. Everyone in the podcast community is a little bit like.

• 3:55Ed Elson?

  Oh, Amy won. I didn't, I didn't even see who won. It was Amy.

• 3:57Scott Galloway?

  Yeah, Amy Poehler won. And, and by the way, I, I think she just, she deserved to win. It's, it's a good choice. She's, her podcast is fantastic. She's fantastic. But the podcast community is a little bit upset because a lot of us have been doing this for a while.

• 4:12Ed Elson?

  Yeah.

• 4:12Scott Galloway?

  Amy showed up about 12, 18 months ago and then won the first award. So there's a little bit of chatter in the podcast community.

• 4:20Ed Elson?

  Understandably, understandably.

• 4:22Scott Galloway?

  Did you enjoy the Golden Globes?

• 4:23Ed Elson?

  I did not watch it. I didn't even see who won. I was gonna ask you if you watched it. It sounds like you watched it from your phone.

• 4:30Scott Galloway?

  I do what everyone does. I watch the clips.

• 4:31Ed Elson?

  Yeah, I watched the clips. Yeah, I didn't even see any of the clips. Maybe I'm bitter again about this lack of nomination.

• 4:37Scott Galloway?

  What media does Ed Elson consume? I always assume it's me that I'm just aging out, that I'm watching CBS and CNN and, you know, asking for a new oxygen tank and...

• 4:47Ed Elson?

  Yeah, I'm not watching, I'm not watching cable. I appear on cable, but I don't watch it.

• 4:52Scott Galloway?

  Oh, my God, you're Kara Swisher. You have officially become Kara Swisher. There's no escaping you. And I pull you up and what do I know? You're on MS now.

• 5:02Ed Elson?

  There we go.

• 5:03Scott Galloway?

  And who do I see? Oh, I see Ed Elson and his side piece, Katie Tour. What were you talking about? I couldn't even get through it. What were you talking about?

• 5:13Ed Elson?

  Every week it's a new thing. I don't know, probably something about young people, how we're getting fucked. It's probably something along those lines. Next up, I'm trying out News Nation.

• 5:21Scott Galloway?

  You're going on News Nation? Are you going on with Cuomo? Or is that the same? That's News Nation.

• 5:25Ed Elson?

  Katie Pavlich, former Fox News host, new show coming out.

• 5:28Scott Galloway?

  I think it's important. You're gonna reach dozens and dozens of viewers on that show. That is very exciting for you.

• 5:33Ed Elson?

  It's great. It's very exciting.

• 5:35Scott Galloway?

  It's good practice, though. I started at Bloomberg. Well, how did you get started, Scott?

• 5:40Ed Elson?

  Well.

• 5:41Scott Galloway?

  Bloomberg used to have me on every week to talk about tech. And then they asked me to be exclusive and they wanted to pay me. And I said, nope. And then they wanted to do a TV show with me and I went on without my shirt and said that my favorite, that I liked one night stands. I called it the nut and bolt. I went on as a construction worker. And they called me and they said, we need you to apologize. There's some women in the newsroom, true story, women in the newsroom who are really pissed off about this. And I was, I had already, because I knew every CMO in America at that point, after working at L2, I'd already pre-sold $3 million in advertising. By the way, every other show they were launching had sold a grand total of like, zero. And so they called and said, we want to work this out, but we need you to one, say, we didn't know about it and two, apologize. And I said, one, a hundred percent because it's

• 6:26Scott Galloway?

  true. Two, no, I'm not sorry. And saying you're sorry doesn't help. And I, you know, we're all adults. We're all adults. And they sent me a thing saying, here's a list of all the things you have to agree never to mention. And it started off, all right, penis jokes. I get it. Erectile dysfunction. Okay, fine. I can't talk about my hobbies. And then it went on. It was like 50 things, including my favorite was Sheryl Sandberg. I'm not allowed to talk about Sheryl Sandberg. I'm like, have you met me? And so do you remember this meeting? I did a meeting with all of you guys. Were you still here? Or were you in junior high school?

• 7:02Ed Elson?

  Well, this is the important point is this was my very first week on the job. It was my first week working for you. It was also my first week having a job, having a full-time job out of college. And so it was a very interesting meeting for me because I had told my parents that I'm going to go work for this guy, Scott Galloway. They're like, who's that? It's like, don't worry about it. But we've got a show for Bloomberg. So that's going to be pretty cool. This Bloomberg TV thing. And Claire will remember this too. Then I had to call my parents and say, hey, by the way, this whole Bloomberg thing, it's canceled. It's not going to happen. Sorry about that.

• 7:37Scott Galloway?

  Well, it wasn't canceled. You're not giving me enough credit. What did we decide in the team meeting? I said, I said to the team, what should we do? Should we agree to sign up for this, this, these guardrails? What should we do?

• 7:48Ed Elson?

  I had no problem with pulling it. I was bullish on you, not Bloomberg. I don't remember it being a question. Maybe it was a rhetorical question, or maybe I remember it correctly.

• 7:57Scott Galloway?

  We did a team meeting and said, this would be a lot of revenue. It's a TV show. It's Bloomberg. It's the right brand. And by the way, I love Mayor Bloomberg and I love the Bloomberg organization. I had a really good experience there. Anyways, collectively, we decided, fuck it. And I called them and they were so shocked. I said, we're out. We're folding our tent. We don't want to, we understand your concerns. We understand why you would want to have some guardrails around me, but that's just not what I'm about. And the wonderful thing about having a little bit of economic security and a team that is young and stupid is we make decisions like this. And they were blown away that we decided to walk. And since then, by the way, I understand my understanding is Bloomberg is mad at me.

• 8:40Ed Elson?

  Is or is not?

• 8:41Scott Galloway?

  No, it is. I've essentially now been banned from two networks.

• 8:44Ed Elson?

  You've been banned from a lot. Haven't you? You're not on CNBC anymore, right? Isn't that another one? There's Fox Business, there's Bloomberg. I think CNBC. I think it's three, no?

• 8:53Scott Galloway?

  That's why I had to start my own media company. I have no outlets.

• 8:56Ed Elson?

  It makes you uncancellable.

• 8:58Scott Galloway?

  Fearless, irreverent, and if dick jokes are wrong, we don't want to be right, Ed. We don't want to be right.

• 9:08Ed Elson?

  There we go. 2026, aren't you?

• 9:10Scott Galloway?

  There we go.

• 9:13Speaker 07

  Now is the time to fly. I hope you have plenty of the well at home.

• 9:20Ed Elson?

  Last weekend, President Trump launched a criminal investigation into Federal Reserve Chair Jerome Powell. The inquiry, led by the Justice Department, centers on whether Powell misled Congress during his testimony about renovations to the Fed's headquarters. Powell has pushed back strongly. In a rare video statement, he called the investigation, quote, unprecedented. He said it's motivated by his refusal to cut interest rates at the president's command. Investigation triggered swift backlash across the finance world. JP Morgan CEO Jamie Dimon said that anything that harms Fed independence is, quote, "probably not a good idea." Leaders from the European Central Bank and the Bank of England issued a joint statement supporting Powell.

• 10:02Ed Elson?

  Even meme stock traders have rushed to Powell's defense. The one Reddit user describing Powell as, quote, "an American hero." I think the reaction that we've seen is probably alone worth an hour-long conversation. But before we get into that, Scott, we discussed this on The Daily Show last week, but we haven't gotten your reaction yet. So what is your reaction to what we've seen between? Donald Trump, or maybe the DOJ and Jerome Powell.

• 10:34Scott Galloway?

  Well, I'll repeat what everyone has already kind of repeated several hundred times with bears repeating a 700 and first time, and that is the strongest economies in the world, hands down, the most robust economies, the ones that have less severe recessions, they don't turn into depressions, are the ones that have some form of an independent central bank or federal reserve. They all have that in common because the temptation, when you lower interest rates, you're putting money in people's pockets. The temptation of any politician, Democrat or Republican, would be to lower interest rates through their tenure. There's just no getting around it. And I don't think anyone, Democrat or Republican, if they thought they could take interest rates down, would choose not to and juice the economy. The problem

• 11:18Scott Galloway?

  is, you create a scenario where there might be more money than goods, which creates inflation, and inflation can get to a point where you have panic buying, and then you've lost control of your economy. And right now, the dollar is the reserve currency, somewhere between two thirds and 80%, which gives us unbelievable clarity and teeth into world flows of power and gives teeth to our sanctions. Arguably, the biggest aircraft carrier strife force in history is the US dollar. So, an independent Fed just makes all the sense in the world. And Jerome Powell, I've never been as confident that an individual will at some point have a Presidential Medal of Freedom wrapped around his neck than Chairman Powell. He had the

• 11:59Scott Galloway?

  most aggressive increase in interest rates in history. Everyone on the far left, from Bernie to Senator Warren, was saying that you're hurting Americans, people on the far right, where you don't know what you're doing. Anyways, and then, and then effectively, he just, just fucking ignored everybody. He just said, no, I know more about this than you. You know, you just hold my beer. And he took interest rates up, I think, five times in like 15 months, and inflation has come down from 9% in COVID to 2.8. Still not as low as we'd like. We're still spending way too much money. He has only a certain amount of control.

• 12:38Ed Elson?

  Well, he got it down to 2.3, and then we put these tariffs in place, and now we're back up. So, to be fair, I prefer to say he went from 9 to 2.3, without triggering a recession, by the way, which everyone said was going to happen. And now that we've got the tariffs in place, now we're seeing it go back up.

• 12:53Scott Galloway?

  Who has been able to raise interest rates? I don't know, 400 basis points and not cause a recession. I mean, to, to do what he pulled off is like threading a needle in space with, you know, no opposable thumbs. I mean, his ability to do that is just a feat of economics. If, um, I don't know if you know this about me, but I was a graduate fellow in macro, microeconomics and business school, but, um, just, just for, yeah, just so you want to know that. But if someone had described that kind of interest rate hike and the ability to stave off or avoid a recession, you'd say that's probably impossible.

• 13:36Scott Galloway?

  So anyways, this guy's not only been outstanding, you need an independent Fed, no news is there. What I do think is what a lot of people miss is the following. This isn't about him stepping down early from his chairmanship. That happens in May. That's going to happen. You know, we're what 14 weeks away from that. This is about trying to get his ass off the board of governors. Because what Trump realizes and what most people don't realize is this is actually how boards work. While Chairman Powell is the spokesperson and the one that goes to Congress and the one that has the big title, the entire board decides and sets interest rates. And the way board governance and decisions happen aboard is the following.

• 14:21Scott Galloway?

  A bunch of FIPS, formerly important people, show up for lunch once every three months and a, and extended meeting. The CEO presents his or her plan. If it's a good board, there's a lot of really robust questions and pushback. On a lot of boards, everyone just nods their head because they, hey, I'll see you on the golf course, Bob, this weekend. And they, the, the most important position is the chair of the audit committee to make sure that whatever we're reporting in the earnings call is actually true. And then there's a bunch of other committees that do different things. But basically, everyone kind of watches themselves talk, has interesting questions. And then if shit's getting real, and there's really only two times a board matters, that's when the company is thinking about selling or being acquired and whether or not we need to fire the CEO.

• 15:06Scott Galloway?

  And what happens is a second board meeting. And the second board meeting is of the three or four board members that matter, and they almost always meet in the parking lot. And they're like, I'm worried about Lisa, I'm worried, I'm thinking maybe we need to make a change. Because typically, CEOs manage boards as opposed to listen to them. And then what you have in terms of dynamics around decision making is the following. Everybody says their piece and yeah, that's a good point. And then when one or two people speak, everybody fucking listens and nods their head. And those two people are usually one or the following. One, the largest shareholder, especially in private companies, the largest shareholder speaks for, as they should, the ownership of the company or the largest proxy for ownership.

• 15:48Scott Galloway?

  And also they're the ones that can cause the most trouble if they don't like the decisions being made and then go activist. Two, if it's a private company, they're the ones that are going to be called first if the company needs more capital. So you can be a fucking idiot, but if you're the largest shareholder, people kiss your ass on a board. And then the second key board member is the following, someone who's just really fucking smart. There's always one guy or gal who, over the course of one, two, three or years, just makes it clear to everybody. I just know more about this shit and I have better judgment than the rest of you. And this person, I've worked with some exceptional board members. And when they speak, everybody listens and they usually don't speak a lot. That's the other thing about them. And when they're discussing how, what they should do with interest rates.

• 16:33Scott Galloway?

  And the majority of governors say, we should lower interest rates a quarter point in the chair organizing and leading the meeting. And then this governor named Jerome Powell. And then when Governor Powell goes, you know, I've looked at the data and I think we should keep rates steady. What do you think the decision is in that meeting? I think I agree with him. There might be 12 governors. There's going to be one voice in that room who's like, okay, this is the guy that pulled off the impossible and has demonstrated extraordinary leadership capability. So while he may not have the title chairman, he's still going to have the most influence over the decisions around Americans' interest rates for the next four years. And Trump realizes that. I think you're definitely right. I think this is probably about.

• 17:19Ed Elson?

  The fact that he doesn't want Jerome Powell to be in the room, I think you're exactly right that if Kevin Hassett or Kevin Walsh gets in there and tries to, you know, beat their chest and try to say, I'm, I'm, I'm the boss, everyone's going to be sort of realizing actually Jerome Powell's the real boss in here. He's the one who really commands our respect. But here's the data point. There is a prediction market on this question. The question specifically whether Powell will be out off of the board of Fed governors before August. After this went down, after he came out with that video statement about the investigation, the odds that he would be out of the committee crashed by 30%. So

• 18:03Ed Elson?

  what the markets are basically telling us, and by the way, I think this is true of what we saw in, in the markets at large, where you initially had this sell off in the S and P and the Nasdaq and futures, but then by the end of the day, they actually reversed those losses. And then the next day they hit record highs and everyone's going like, how could this be? The Fed's independence is under threat. This is a terrible signal for US markets. But I think what people are realizing is actually, and Justin Wolf has said this last week, Jerome Powell wins. He stuck it to Trump. And beyond that, beyond winning the exchange, what is probably more striking is the fact that everyone agrees

• 18:44Ed Elson?

  with him, both on the left and the right. There is basically no one, unless you're a complete toady, unless you're a complete sycophant, there's no one who thinks that Jerome Powell is in the wrong and that this was acceptable, that this was warranted. And we saw this from, you know, every former Fed chair who, who signed a letter about it. We saw it from all the major central banks, those you'd expect. We also saw it from the, from the, the big bank CEOs, Jamie Dimon was condemning it, Brian Moynihan, the CEO of Bank of America. Most importantly, probably the Republicans who came out against it. You had several Republican senators saying this is a terrible thing. Tom Tillis probably had the, the most authoritative statement.

• 19:29Ed Elson?

  Said I have his quote here in front of me. He said, quote, if there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question. So Republicans coming out against it. But then, as we said in the intro, I think the most interesting group to be against Trump in this and to be in support of Jerome Powell is the Reddit army, the meme stock traders on Wall Street Bets. This is where all the traders live. And the decision was unanimous. If you go and look at Wall Street Bets and their reaction to how this all unfolded, their view is that Trump is the villain, Jerome Powell is the hero. The most popular post on

• 20:14Ed Elson?

  Wall Street Bets on Monday, it said, quote, Jerome Powell is an American hero. We don't deserve him. And there are thousands of memes and social media posts and Jerome Powell clips and edits praising him, saying Jerome Powell has aura. Like, if you had told me that in 2026, you would have the Reddit army praising the Chair of the Federal Reserve as their hero, I just wouldn't believe you because these are the guys who are supposed to hate the institutions and the economists and the experts. You know, you would never see a dynamic like this, but it appears that something has flipped here. They love Jerome Powell right now. Jerome Powell is sticking it to the man, the guy who people used to think was the man.

• 21:00Ed Elson?

  And I've been really thinking about like, what is it about this interaction and about that video that has caused this flip that is causing America to rally behind the institution? It used to be that we were all anti-institutions, or at least that's been the trend for the last several years. Now it's flipped. We're backing the old stuffy guy who's the head of the Federal Reserve, who's, you know, the most institutional man in the world. And we're all saying, go for it. We're rooting for you. And that to me is, is almost something, something deeper, perhaps about the cultural conversation in America right now. I'd want to get your thoughts. Like what, what might be different about this exchange versus previous fights that Trump has gotten into?

• 21:44Scott Galloway?

  I don't think this is different. I think it'll end with the same, the same way. I think he's gonna have to back down. I think he keeps thinking, wait, I'm a strong man. I'm an autocrat. And then.

• 21:54Scott Galloway?

  I think America would rather have their neighbors and friends terrorized by mass police than inflation. I think they're comfortable, or I should say uncomfortable, but so far tolerant. And I want to praise and commend the people who have gone out to protest in Minneapolis and have voiced concerns over a secret mass police terrorizing Americans. But I think Americans will tolerate that, but they won't tolerate inflation. And just to give you a sense of what happens when a strong man enters office and immediately installs a loyalist. In 2023, Erdogan from Turkey installed a loyalist to the central

• 22:38Scott Galloway?

  bank, a central bank governor. Within a year, inflation or the Consumer Price Index went from about 18 or 17% to 86%. When that happens, you have panic. Because, and also, low, middle and upper middle income homes don't really own assets. They have, what they have is cash and their earnings. And basically overnight, they can't buy meat, they can only buy chicken, and those that could only afford chicken can only afford rice. And all of a sudden, they can't make tuition payments, car payments, they can't buy food. And anything they had in the bank account becomes worthless. And wages never

• 23:20Scott Galloway?

  keep pace with inflation. So overnight, they go from being, having a lifestyle of X to having a lifestyle of point four X. And it becomes untenable, especially in, you know, inflation typically leads to, countries don't go out of business because they get invaded. They go out of business because they go broke. And one way to go broke fast theoretically is inflation. And it's also, it creates wild income inequality because the people who survive inflation are the people who own assets. So the people who own land in Argentina are still very wealthy because they own land. But everybody else who has to live off of current income and cash, a cash-based society.

• 24:01Scott Galloway?

  Gets crushed. So I think your statistics and the Reddit army is right. And by the way, he, my sense is he's kind of dialed down the rhetoric because he realizes he can't legally remove the guy and it's a bit of a losing game.

• 24:15Ed Elson?

  I totally agree. It's like inflation is the most important thing. And you look at the polling, that's what matters most to Americans. Usually in general, that's what matters most to Americans, but especially right now, given what we saw with inflation coming out of COVID, which was, which was a real problem. What will be interesting is how is it going to be messaged? Because Trump is out there saying, I'm the guy bringing down inflation. And he's also saying that Jerome Powell is the guy who is increasing inflation. And this often happens with these populist strong men who basically just lie to the public about the relationship between interest rates and inflation. And they make it sound like lowering interest

• 25:00Ed Elson?

  rates would reduce inflation and which obviously isn't true. Meanwhile, I mean, we have the issue that we discussed during the week with Mark Zandi, which is we got the slightly moderated inflation print last week of 2.7%. But the data is flawed because of the government shutdown, which caused these issues in the way that we survey and find prices on goods. And he's done his own analysis and he's got the real number. And I'm going with his number because he's adjusted for what we didn't see in October and it's 3%. So it's, it's still really, really bad. We went from 2.3% again before liberation day, then we have the tariffs and now we're

• 25:42Ed Elson?

  up to 3%. So I think it'll be interesting. Like, I agree, Americans care a lot about inflation. But do they understand?

• 25:52Ed Elson?

  The relationship between monetary policy and interest rate policy and prices. And will they be psy-opped by this administration into believing that the way to bring down prices is to just blindly follow and believe in whatever dear leader commands? That's what he's trying to go for right now. And I guess that's why I was almost so heartened to see the collective support for Jerome Powell, because I just feel like people like Jerome Powell usually lose in the cultural conversation. Like, usually if you're kind of measured, in 2020, in the 2020 specifically, I'd say, if you're measured, quiet, and you predict the data, you stick to the numbers.

• 26:35Ed Elson?

  Oftentimes, I find you lose to Trump trolling you, shouting at you, blaming you, calling you names. Like, what we've seen is that Trump generally wins. So I think it'll be interesting to see, like, what will the American public go with? Who will they believe? And that is something that I think Trump is definitely very aware of and probably pretty worried about, following the reaction that we saw in this argument.

• 27:03Scott Galloway?

  What's different here, though, is that 50% of America is lined up to hate the person almost always because they're seen as politically partisan. Powell was appointed by, or reappointed by, Trump.

• 27:15Ed Elson?

  Yeah, it doesn't help.

• 27:16Scott Galloway?

  He doesn't, he doesn't feel Democratic or Republican, so, and he's not a popular public. It's not like, if he goes after a Democrat, well, you know, 47% of America is ready to, like, go along and hate that person and start calling their congressman. And I don't think that's the same with Chairman Powell. I also think there's probably a pretty significant number of Republicans who are calling Suzy Wiles and go, "Yeah, no, we want to leave, don't, this doesn't make any sense."

• 27:44Ed Elson?

  He's a totally different beast, like, and it's really remarkable. He's almost impenetrable because, I mean, you saw that interaction where Trump asked someone during an interview who appointed him, and they're like, "You did." So it makes him sort of the perfect vessel to expose the lie.

• 28:05Ed Elson?

  Of this presidency and then when he's attacked by this presidency and moreover, attacked by Jeanine Pirro, the, the, the former Fox News host who jumped high to the position this year, like it kind of perfectly illustrates the corruption and the grift that's happening. And he is such a great avatar to be the one to get to come under fire because you really, you, you can't call him corrupt. You cannot call him a liar. Like it's completely ridiculous.

• 28:40Ed 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.

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• 30:28Ed Elson?

  We're back with Profitec Markets. 2026 is off to a strong start for metals with gold, silver and copper all reaching new record highs. Copper is up 36% from a year ago. Gold has gained 72%. Silver has risen 187%. A big driver of the rally is geopolitical instability. Protests in Iran have continued with reports of significant casualties. Just a few weeks ago, Trump ordered the capture of Venezuela's president Nicolas Maduro. At the same time, tensions remain high with Denmark over Trump's push to acquire Greenland. So Scott, let's just quickly run through these insane rallies we've seen on all these different metals. I mentioned copper, I mentioned gold.

• 31:13Ed Elson?

  Tin is also up 80% on the year. Lithium is up 112% on the year. Platinum is up 147% on the year. I mean, the obvious question is why? I think we should just note that there are some, there are various reasons. One of them would be supply shortages, which we're seeing in all these mining companies. Another would be just industrial demand because a lot of these metals are used for things like data centers and power grids and electric vehicles and all that. But it does seem that the main driver right now is instability at the geopolitical stage.

• 31:53Ed Elson?

  Because every time a conflict breaks out, the price of these metals goes up. Iran, Venezuela, Greenland, Iran again. Every time it happens, they go up. So metals seem to win when things get dangerous, which I think poses an interesting question for us. If 2026 is going to be the year of geopolitical instability, hostility, military conflict, it seems like it will be. Well, then how do you invest? And do you just invest in metals? And what else do you invest in?

• 32:29Scott Galloway?

  Yeah, it's the peanut butter and chocolate where you said geopolitical instability. These are now kind of risk off assets. It used to be treasuries, but now people, I think, worry that the, the full faith and credit of those supposedly secure assets is now creating a lot of the risk. So people turn to metals. And then the chaser effect is that they have industrial use cases in categories that are growing. Silver is Essentially used for anything with an on off switch, circuit boards, EVs, batteries, you know, a lot more of those. It's also used in solar panels. Silver coating is used in medical devices, more and more old people. Copper is used in EVs, power grids, wind

• 33:10Scott Galloway?

  turbines. It's also super important for AI production. It's used in data centers, cooling systems. So you not only have an asset that's seen as a hedge, you have an asset that has enormous wins in its sales because of the fastest growing categories in business require the industrial use case, you know, require these metals. So Ray Dalio was right. Ray's been saying for a long time, and I thought, you know, guy who started the largest hedge fund in the world is talking about gold. And I thought that seems kind of boring. But he's been talking about this for a few years now, that gold was a really good hedge. Also, this is a moment. I don't want to do what a lot of people on podcasts do, and they talk about their wins. I wanted some diversification or risk off asset, or risk on, I don't know

• 33:54Scott Galloway?

  how to describe it. So I made my first Bitcoin investment about four or five months ago. I invested in one of these Bitcoin treasury companies. It's called Sequencer something SQNS. A friend of mine was involved in it. And I bought shares at 14 bucks in the IPO. I sold it at the end of December to take the tax loss at $4.50. So Ed, it is not easy to lose 75% of your money in about 90 days, but I figured it out. And of course, the day I sold, it popped back. It's now up about 550. I literally, I have, I have arguably one of the greatest traders and minds in the world, if the objective was to lose a lot of money in a short amount of time. But I think it's important that you highlight

• 34:38Scott Galloway?

  your losses. So let's be clear, folks.

• 34:41Ed Elson?

  I am so disappointed in you for buying, for buying shares in a Bitcoin treasury company.

• 34:45Scott Galloway?

  I need some exposure to Bitcoin.

• 34:47Ed Elson?

  We've talked about these treasury companies, they're total, total bullshit.

• 34:51Scott Galloway?

  Yeah, but you also told me to stop drinking grain alcohol. And I

• 34:59Ed Elson?

  It is fascinating, though, what has happened with Bitcoin over the past, basically, year, because, you know, as you say, like, this was the year of risk assets. You're seeing all of these wars and political conflicts breaking out all over the world. Jamie Dimon's saying that we're like at the most unstable time since World War II. All of the metals are rallying, and yet Bitcoin is down on the year. It's down about 1% compared to this time last year, which is just fascinating. I feel like this keeps on happening to Bitcoin, where the doomsday case is being tested, and that is Bitcoin is supposed to be a hedge against just apocalypse, like, in any form. It's the same, supposed to be the digital

• 35:44Ed Elson?

  gold, that's kind of what gold is. Bitcoin's supposed to be the same thing. And then every time when it's Bitcoin's time to perform and prove that it is indeed the digital gold, I feel like it continues to flop. It happened when Russia first invaded Ukraine. Everyone was waiting for Bitcoin to rally. Didn't happen. And the same has happened here. While all of the precious metals that people go into when they're very scared about what's going to happen in the world, when all of those metals rise, Bitcoin's just been kind of eh, which is certainly a concern for, I would say, Bitcoin maximalists. Maybe it was riding on some momentum because of what we saw with Trump, when he promised

• 36:26Ed Elson?

  to save the Bitcoin industry. What do you know, it's down 1%. But it is striking what has happened with Bitcoin. You would have thought that it would have performed.

• 36:34Scott Galloway?

  Yeah, there's the notion that Bitcoin is a hedge and serves the same purpose as gold. It just hasn't panned out. It tends to, you know, it tends to follow its own, I don't know, its own supply and demand. I don't really have any insight here. I clearly, if I ever start talking about which way Bitcoin is going to go, take out a gun and shoot me in the face, because I clearly, I clearly don't understand the dynamics of the crypto market.

• 37:03Ed Elson?

  Well, next time you want to invest in a Bitcoin treasury company, just call me. Call me.

• 37:07Scott Galloway?

  Call that, Elson.

• 37:07Ed Elson?

  I'll tell you not to do it. So one thing to think about here as well, we've got all of these. Crazy military events happening around the world, which probably want to get your views on too. But you know, this is a market show, this is an investing show. So when we think about how to invest, how to think about it. Generally, what happens when conflicts break out is stocks go down and gold goes up. Or some equivalent to gold like platinum, for example. And we can see this in the numbers on average, when conflicts have emerged over the past 20 years. The four week return on stocks has been negative 2%.

• 37:51Ed Elson?

  The four week return on gold has been positive 3%. Gold has gone up 3%. In some cases, it's even been worse. We looked at the start of World War One, for example, where stocks fell 30%. And the markets closed for four months. So generally, what happens in an environment such as the one we're in right now, when things get kind of ugly. When people start shooting at each other, stocks go down, gold goes up. And that appears to be the consensus among everyone. And it appears to be what we are seeing. At least in the past like week or so. The more important question is, okay, that's looking at the four week return, that's looking at the short term. What happens over the longer term?

• 38:35Ed Elson?

  And the longer term is actually a very different story, and that is stocks actually perform quite well during conflicts and after conflicts. You look at World War One, for example, again, when the markets reopened after that four month closure. The Dow actually rose more than 88%. And this was a JP Morgan analysis. They looked at all of these geopolitical conflicts throughout history. They found that over the course of 12 months, the S and P's returns are on average the same as they are during peacetime. So I think what we're about to see this year is this obsession with the metals. We're obsessing over it right now because these numbers are very striking. I think we have a tendency during conflict, during wartime to think, okay, sell your stocks, buy the gold.

• 39:19Ed Elson?

  I think one thing that we we should highlight is like, long term, you probably don't want to give into that tendency. Long term, stocks still perform great regardless of what's happening and who's fighting with whom. And I think that's going to be something for investors to kind of wrestle with because, you know. I don't know what's going to happen next. I mean, Trump said Iran, you know, they've stopped killing people, so we're not going to invade, but. I mean, who the fuck knows? And as soon as people get the guns out, it seems like all bets are off. I could see gold ripping even higher. And then the question is like, do you have the balls to hold on to your stocks? Or are you gonna sell and buy the gold and put it under your mattress?

• 40:04Scott Galloway?

  What was I found more interesting is we essentially go through, I don't say invade, but inspire a regime change in Venezuela and oil barely moved. I'm actually very bullish on what the Trump administration did in Venezuela. I think having a satellite and Navy bases for China and Russia in our hemisphere is a really bad idea. Russia is distracted. China is geographically too far to do anything about it. So similar to a Bond film where the opening, they always nail the openings in Bond films. It's just sometimes it goes on to be a great film. Sometimes it goes on to be a shitty film. And so far, this has been executed with such incredible strategy and strength.

• 40:46Scott Galloway?

  The army, the Rangers, the Air Force, intelligence assets on the ground, the Navy, pulled off in 35 minutes, what Putin has been unable to pull off in 35 months. Every adversary in the world is remembering what Secretary Albright, one of my heroes, said 20 odd years ago. Our memory is long and our reach is far. Our reach is not only far, it can fucking strangle you. I mean, that from a brand standpoint, I think that was one of the biggest flexes in recent geopolitical history. The problem is I worry this Bond film is about to be Quantum of Solace. And that was a really shitty film.

• 41:27Scott Galloway?

  Because rather than capitalizing on this incredible military victory from the best performing organization in history, see above the US military. The playbook here is very simple. The greatest innovation in geopolitical history was the Marshall Plan. The Imperial Navy of Japan was murdering our sailors stranded in the sea. The Tongue Death March, you know, I just, just torture us. We had a lot of reason to be angry at these people. And what did we do, Ed? What did we do? What did American taxpayers decide to do with Japan and Germany post World War II?

• 41:59Ed Elson?

  We rebuilt their fucking nations.

• 42:02Scott Galloway?

  And we leveraged our great institutions and we let them immigrate. And we said, I know as punishment, we're going to rebuild incredible societies and democracies. Why? Because you are an incredible society. And it's clear that no matter what we do, you're going to be a force in the world because you've built such incredible societies. So here's an idea. Let's, when you're at your weakest, really help you. And who are our strongest allies in the world? Well, I would say Canada and Britain, maybe Australia. But a close third, fourth and fifth, a third and fourth would be Germany and Japan. They shouldn't be thinking about stealing their oil. They should be thinking, how do we motivate American investors to put a Four Seasons, an Urban Outfitters and Chipotle down there?

• 42:45Ed Elson?

  You don't think that's exactly what they're doing? I feel like that is actually what they're, I mean, they're taking the oil. But he's also saying, okay, let's get all the oil execs around a table. And let's figure out how to drill baby drill and just make it a corporate American paradise in Venezuela.

• 42:59Scott Galloway?

  Oh, young, young Jedi trainee. You think, therefore you're wrong. Look, you don't want to control oil. You want to control the flow of oil. To invade a nation for oil is so 19th century because the oil coming out of the ground in Venezuela is heavy crude. It costs somewhere between 65 and 70 bucks to pull a barrel of oil out of the ground in Venezuela where they can sell it on the open market for $62. Why do they continue to do it? Because they still have to pay fixed costs, so it makes sense to keep pumping. It makes absolutely no sense to want to own that oil. What's more powerful now, the world isn't being shaped by the ownership of oil. It's being shaped by the control of the flow of oil.

• 43:43Scott Galloway?

  And that is whoever controls the flow of this asset. It's like the rationale for invading Venezuela for oil would like me saying, I'm going to invade, I'm going to invade Costa Rica for sand. No, you know, it doesn't make any sense. What you want to do is potentially control the flow and there are shadow fleets of tankers going to Russia, Iran, and China. Ninety percent of Venezuela's oil exports were going to China. And if you can control the flow of oil into China, you get balance, counterbalance against their dominance in rare earths. Because without oil, without energy, if you could cut off China's supply of energy, which is possible militarily, for six weeks, they're out of business. Whereas in the US, we're energy independent. We can keep producing tanks in planes.

• 44:27Scott Galloway?

  So controlling the flow of oil and where it goes to is fine, but taking a nation that is so economically indentured that over the last 20 years, there's been eight million refugees fleeing out of that country, putting huge pressure on their neighbors, and then further economically indenturing them is just fucking stupid. That's going to lead nowhere good. It's also going to create resentment within the general public. We have an opportunity. Venezuela, people say, oh, you're talking about nation building, Scott, like in Iraq or Afghanistan. There's a big difference here. Those nations were a series of tribes encapsulated in a geography with lines driven by the, you know, drawn erroneously by the British 100 years ago. Venezuela is a great culture,

• 45:08Scott Galloway?

  a nation of mostly homogeneous people and values, and it's been a democracy for much of the last 100 years. For us to go in and say, we want to help you, we're going to invest, the oil is yours. Now, if you decide to figure out a way to ship it expeditiously to the US for our incredible refining capacity, we'd really appreciate that, right? But we need to build a great nation and have it be an example, a bright, shiny beacon of democracy and capitalism in Latin America, not us showing and basically putting a gun to their head and say, give us your fucking oil. So this is a Bond film. It started really well, and it's already coming off the tracks.

• 45:51Ed Elson?

  I think the administration would argue that what they're doing is exactly what you just described. They're not, I mean, who knows what the true intentions are, but from what I'm seeing, they're more interested in the flow of oil versus the oil itself. And they've talked about the fact that it's going to cost, you know, tens to hundreds of billions of dollars to build the infrastructure to make the oil actually usable. So I feel like the

• 46:16Ed Elson?

  The danger of all of this, if there's something, I guess, from my view that they're getting wrong, it's sort of the long-term consequences, not of going after oil, but of deciding to pursue the Don Ro doctrine of we own the entire Western Hemisphere, and at the same time, in the same week, threatening military intervention into Greenland, which is owned by an ally in Denmark. So to me, it's sort of like that he's communicating to the world. He figured out, we were talking about this the other day, we were comparing the use of military force to tariffs. Someone showed Trump, there's this thing called tariffs

• 46:57Ed Elson?

  that you can do, and you can slap a tariff on, and you can do it, it's executive power, and it's a way to kind of screw anyone else. So if anyone fucks with you, put a tariff on them. He figured out this shiny new weapon, and he just decided to spam it as much as possible because he had so much fun using it. It almost seems as though with Venezuela, he's learned in the past week or two weeks that the next, that the next best, shiniest weapon you can use is actual weapons. It's guns, it's grenades, it's missiles, it's attack helicopters. And he's decided, oh my God, this one's even more fun. I can actually just drop a flashbang into Venezuela, get SEAL Team Six in, kidnap Maduro, and I'll

• 47:41Ed Elson?

  be the man, which he kind of has appeared to be in the past week. And then it seems like he wants to do it again with Greenland. And I think that the concern is that he's going to keep on doing this because he loves how powerful he feels when he does this. And the trouble is going to come in the long term when we overplay our hand, thinking that we can just solve anything, solve any conflict by just pointing a gun at someone. And then eventually, these relationships that we have with Our allies with Europe, with Denmark, etc., become extremely afraid, become nonexistent, at which point everyone hates America, and then that's sort of the downfall of America.

• 48:25Ed Elson?

  I feel like he's very, we were talking about this as well, Chris O'Donoghue made the point, like, he's extremely short-termist, he has almost no conception of the long-term consequences, whether it's invading Greenland or even, you know, forcing the Fed to lower interest rates, there's no real understanding of what's going to happen after the next election cycle, it seems to be not even on his radar.

• 48:48Scott Galloway?

  Look, they're all very different here for different reasons. So, the analogy, I'll stick with the movie business, the analogy of Venezuela being a Bond film, if we look at the other two, let's talk about Iran, and let's talk about Denmark, potential military action against Iran and Denmark's, I'm not gonna call it-

• 49:04Ed Elson?

  Territory or something.

• 49:05Scott Galloway?

  Protectorate, territory, Greenland. One is the sequel to Star Wars, and that is, I think, the ROI to Greenland, The Empire Strikes Back, from 20th Century Fox in 1978, was like, we're really confident this movie will do really well. By the way, probably the best sequel in history, maybe with the exception of Aliens, the sequel to Aliens starring Sigourney Weaver, but Aliens was outstanding, first James Cameron of the franchise. But, we know, one is an amazing idea, one is Heaven's Gate, or just the bit, well, I don't know what the biggest cinematic flop in history is, but I'll start with the flop, and that is invading or forcing Denmark to sell Greenland is like me showing up to Chipotle

• 49:48Scott Galloway?

  today with an AR-15 and demanding they give me a burrito bowl with pork, extra guacamole, and charge me $14.85.

• 49:58Ed Elson?

  Yeah.

• 49:59Scott Galloway?

  And someone might point out, "Well, boss, we'll do all of that for you without the gun." And rare earth minerals, there are huge strategic reasons to have an alliance with Greenland and Denmark. They have rare earths. They have supposedly somewhere between 12 and 17%. That's huge. They are in geographically, one of the most strategic positions in the world regarding our ability to attract Russian naval vessels and submarines. It's hugely strategic, has huge economic potential. Everything we want to leverage those things, Denmark has already provided. Come on in, get your burrito bowl. We like you guys.

• 50:43Scott Galloway?

  But for some reason, we've decided we don't want an alliance. We want compliance through force. It's like something I learned early. When you're trying to get something from someone, you know, people talk about a carrot and a stick. If you're ever going to use a stick, make sure it's, it's almost veiled and they just figure it out on their own. I find the moment you threaten people, especially successful people, because successful people tend to have big egos. All business goes out the window. They're like, fuck you, I'm taking the other side because I don't back down to threats. And we're actually contemplating threatening and going to war with other members of an alliance we're in, which has

• 51:26Scott Galloway?

  been the strongest alliance in the world, which has created more prosperity in the last 80 years than we've had in the last 800. This is arguably the lowest IQ moment of the Trump administration. We get everything we want without owning it, without paying for it. So this makes no sense. Now, the highest ROI military action, the sequel, The Empire Strikes Back, by the way, that snow battle, I think that's one of the greatest battle scenes in the history, cinematic history. Have you seen the snow battle?

• 51:55Ed Elson?

  I'm always underwhelmed by the old Star Wars movies. You're going to hate me for saying that. I always find the special effects. I mean, I understand they were awesome in that day, but I'm just sort of like, I actually think that the, you know, one, two, and three, better, better fights. You're going to hate me for saying all this.

• 52:12Scott Galloway?

  Well, in new news, the new co-host of Property Markets is Kyla Scanlon.

• 52:17Scott Galloway?

  That is, that is literally sacrilege. That is, you are now an apostate from the religion of the dog.

• 52:25Ed Elson?

  I'm a contrarian.

• 52:28Scott Galloway?

  Oh, my God. Okay, take your, you're 1976, you're in seventh grade, you get your first date with Paula Brubaker, and you, I'm sorry, Paula, not Paula Brubaker, Paula Kumnock was her name of all things. And you take her to that film and you watch Star Wars for the first time? Can you imagine what that was like?

• 52:46Ed Elson?

  Fair enough.

• 52:46Scott Galloway?

  At the time. THX has just come out, it was like the audience is in a galaxy, far, far away, a long, oh, God, that shit is genius.

• 52:55Ed Elson?

  Absolutely.

• 52:56Scott Galloway?

  Anyways, and then they, and then George Lucas, that incredible filmmaker followed up with Howard the Duck. Anyways.

• 53:04Scott Galloway?

  But the, the best ROI

• 53:09Scott Galloway?

  for our military right now would be to do, use intelligence and, and also our air force over the skies which we now own to suppress civilians or to bomb and strike civilian suppression centers in Tehran and Iran. The unlock of 95 million people and the unlock and the victory for women's rights and women who have been enormously oppressed in this regime. The ability to bring stability to the Middle East and turn Iran into a great ally is the highest ROI used to the government and the military right now. Because everyone unfortunately is under the cold comfort that it's over. No, we've been here before. There was a green revolution or whatever it was, I think in 2019.

• 53:53Scott Galloway?

  The government comes in and is brutal and it goes back and it starts to, that goes from a boil to a simmer and we're back with the Islamic Republic, which has been the largest sponsor and coordinator and catalyst of terror across the Middle East for the last 50 years. This is such an enormous opportunity for women's rights, for geopolitical stability. I think this is a fantastic use of military power. So let's review. We have our Bond film, started great, don't know how it's gonna go. We have the biggest flop in history. And at some point, someone has to get some sanity and say, let's shut down production and even discussion of this idea, and that is invading a NATO member.

• 54:34Scott Galloway?

  And then there is the Empire Strikes Back, or the greatest ROI in history, or Raiders of the Lost Ark, or Indiana Jones, whatever the most successful sequel was in history. It's probably something fucking awful like Smurfs 2 or anything, something. This would be, in my opinion, one of the greatest ROI's for the US military would be to stand behind and finish the job for the incredible, incredible brave Iranian people. Also, Ed, don't call yourself a feminist unless you agree with me and think we should absolutely be supporting Iran. Ooh, that was hard.

• 55:06Ed Elson?

  I'm just amazed that we compared the Iranian regime to Smurfs, too.

• 55:10Scott Galloway?

  There you go.

• 55:11Ed Elson?

  That's my take.

• 55:15Ed Elson?

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

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• 57:05Ed Elson?

  We're back with Profty Markets. Two major developments drove the AI conversation last week. First, Apple announced it will use Google's Gemini model to power an upgraded version of Siri. The partnership sent Google shares higher and pushed the company to a $4 trillion market cap. That makes it just the fourth company in history to reach that milestone. Meanwhile, we saw Anthropic with another big move. The company rolled out Claude Co-Work, a new consumer-focused version of its coding agent. The launch generated massive buzz, including 17 articles and an intro video that drew 46 million views on X. So,

• 57:46Ed Elson?

  Google and Anthropic dominating the headlines in AI this week. But there is obviously one major player that has not been in the headlines, and that is OpenAI. We have not seen much major news coming out of OpenAI. So Scott, I think the first thing I'd want to start with is probably this Google and Apple partnership. I mean, what Apple has told us is that they're going to use the Gemini model for Apple Intelligence. We don't actually know what that means or how it will actually work. We should also acknowledge that Apple does already have a partnership with OpenAI. So it's kind of unclear how that changes the

• 58:26Ed Elson?

  agreement. But the market told us that Google's a winner here. The stock rose 3%. And by the way, Google's up 70% in the past 12 months. I still believe that was kind of our greatest call that we've ever done on this show. There are some rumors that we don't really know about. We don't know if it's true. One is that Apple is going to pay Google $1 billion per year to use Gemini, which seems significant. Another is that Apple is paying OpenAI nothing to use ChatGPT. So I think that's our first clue here. I mean, what do we know? Apple's now using both Google's Gemini and ChatGPT, but it appears that Google's the only one

• 59:10Ed Elson?

  who's actually getting paid for it, which tells you something about OpenAI's ability to make deals. And as I've said before, I mean, the guy who they've got running these deals, they're not even getting legal counsel on their deals. They've got their head of product figuring out the paperwork on these things. And then what do you know? Apparently, again, unconfirmed, but apparently, they're not even getting paid. To be the model for Apple. Then you've got Claude cowork, which was a big deal, basically because it looks incredibly useful. It does everything you want AI to do. It it organizes your calendar, it tracks your meetings, it creates transcripts, it automates them, then it creates action items from the meetings. It communicates between your email and your calendar.

• 59:54Ed Elson?

  The reason this product launch went viral is because everyone's like, holy shit, this thing looks like it's going to be incredibly useful, which again is a problem because ChatGPT hasn't released anything like this yet. And so it is striking. One of the things that we said at the beginning of the year is that Anthropic, if you had to bet on an AI winner, it's probably not going to be OpenAI, it's probably going to be Anthropic. If you had to bet on on one of the two, it appears that.

• 1:00:23Scott Galloway?

  Wait, hold on, it's not going to be, you mean it's going to be Gemini, not OpenAI?

• 1:00:26Ed Elson?

  Well, I'm looking at the startups. I I would actually say that I think Google, I mean, I, what I would say is we called Google, I think Gemini is going to continue to grow. But if I'm looking at the startup race, the AI startup race, I I feel like it's it's Anthropic versus OpenAI, those are the two private companies that are really making the headlines. OpenAI was the whale for years, and we talked about that. I do think that Anthropic is going to dethrone OpenAI in 2026, and it appears we're beginning to see that.

• 1:00:57Scott Galloway?

  There's a third and a fourth, and that is, and it makes sense. No company can hold eighty percent market share in a market this lucrative. But and then Anthropic and Claude, which we use, or Claude, excuse me, we have someone who works for us, and Claude, Claude is their LM. I actually like a little bit more. I use both all the time. Actually, I like them both. I can't figure out, I go back and forth. Anyway, and they're just incredible technologies, incredible companies. The.

• 1:01:27Scott Galloway?

  The third and the fourth are Gemini. When you have a fire hose of a billion people who use your search every day, and I don't know if you've seen, but the AI summaries at the top are getting better and better. And they can integrate it into their products and they have just so much IQ over there. You just do not want to count Gemini out. And then the fourth, that will be the most disruptive, will be name your Chinese Open Way to LLM. And we've said that we believe that China's going to engage in AI dumping. And you already have companies ranging from A16 Ventures portfolio of companies to Airbnb using Chinese LLMs because they're a fraction of the cost. And also, if you look at these things, they're reaching technical parity. Now, what I got wrong was last year, I thought Apple deciding not to enter the search wars,

• 1:02:13Scott Galloway?

  capital wars, and just saying, look, if you want access to the billion most important people in the world, iOS users, you got to pay us $5, $10, $20 billion a year, and we'll put Google in front of everybody. I thought they were going to be able to negotiate the same thing. I thought Tim Cook staying out of the AI wars was actually a good move and that he would just leverage access to his billion. You know, the billion consumers that have iOS are probably responsible for 50% of the world's GDP. Because I think 80% of e-commerce in the US is from Apple, which doesn't have anywhere near that market share, right? And when you're using an Android phone, you're kind of saying to the world, you know, things just really haven't worked out for me the way I'd hoped. If you have real money or real influence, you have an iPhone.

• 1:02:57Scott Galloway?

  They command incredible licensing fees for that, access to that. What's interesting, as far as I understand about the Gemini deal, is that Apple, it's either flat or Apple may be paying them $1 billion for this. So it's kind of flat. That's nothing for them. And there might even be, I'd love to see the details of the agreement. There might be a royalty agreement. I thought Apple was going to be able to get billions and billions to shove. You know, name your LLM in front of the most valuable consumers in the world. That does not look like it's happening, which really strikes me. I need to rethink the power dynamics in this.

• 1:03:27Ed Elson?

  But they did, again, rumors. It appears that they were able to do that with OpenAI and ChatGPT. They're not, they're not paying a dollar to, to use ChatGPT. So again, says something about the, the power dynamics there and the fact that they, they have ChatGPT for free. And yet they've decided in the past week, actually, we would prefer to pay Google a billion dollars to use their AI model.

• 1:03:50Scott Galloway?

  So I think whoever runs strategy at Apple is probably very smart and is doing game theory and has thought at some point we are going to be able to charge for access. So what, how do we get that number to be as big as possible? The way we get that number to be as big as possible is to ensure that this is a robust market with more than one player, more than two, ideally three or four, who all show up and bid and make irrational bids for access to be the exclusive or the preferred provider of AI to our billion consumers. So I think what they've decided is we'd be better off continuing to put wind in the sails of Gemini, which has, I don't know, eight percent, 12% share, than further create dominance across OpenAI.

• 1:04:31Scott Galloway?

  Now, I also think, and this is just pure, pure speculation, but what we forget is that these people are human and they have egos. And these people are men, all of them are men, and they all have really big fucking egos. And by the way, some of that's good. A dude with a big ego will sacrifice his health, his relationships, sometimes his reputation to just drive a company and create a ton of value and shareholder value and tax revenue. There's something, there's very, I, I say ego in both, you know, positive and negative ways. I think Tim Cook is pissed off that Johnny Ive and Sam Altman are talking about their plan to, you know, produce products.

• 1:05:15Scott Galloway?

  And that his old head of AI that was kind of in the Steve Jobs era is putting out these broly films about the future of AI and how they're clearly, they are clearly planning to put out some sort of product. They want to put out the equivalent of the AI phone, right? That's why Johnny Ive is there. That was the most ridiculous acquisition in history. That's what we're coming up on a year now. I think Johnny Ive is a genius. They paid, I think, $6 billion for his cute little company. I think they overpaid by about 5.999 billion. That's going to be a write-off. At some point, someone on an accounting committee on the board is going to go, you know, I need to write this thing down. But so I think it's one ego and two, they want a really robust ecosystem of AI players such that they can command the greatest licensing fee, which at one point I think they'll be able to extract.

• 1:06:00Ed Elson?

  Just looking at where we are in the AI race right now, ChatGPT is still winning. So we can look at the monthly visits on all the different AI platforms. So for Claude, 183 million per month, Perplexity, 196 million, Gemini, 1.4 billion. It is amazing how Gemini has grown. ChatGPT is the winner by far though at 5.8 billion monthly visits. I think something we should also recognize is the brand recognition of ChatGPT, which is still far and away the winner. If we look at the amount of mentions it got on TV last year, it had 4,000 mentions. Gemini got less than half of that. Claude got a fraction of that. 80% of adults have

• 1:06:43Ed Elson?

  heard of ChatGPT. And this is something that Claire brought up, which you've brought up in the past too, is ChatGPT is the only one that is a verb at this point. I mean, you talk about this in relation to Google, just Google it or Uber, you should just Uber there. You chat GPT things. You don't Gemini things. You don't Claude things. And I think that is probably pretty relevant in terms of the brand recognition of ChatGPT. We shouldn't underestimate it. On the flip side, it does appear that the tides are beginning to turn. If you look at traffic last month, in the month of December, traffic to ChatGPT went down. Traffic to Gemini went up. And then the other thing that I find really interesting

• 1:07:23Ed Elson?

  is if you look at who is using ChatGPT, a lot of kids are using ChatGPT more so than the other platforms. And what's also incredibly fascinating, during the summer, search interest for ChatGPT got cut in half. And people are suggesting that maybe the reason this is happening is because kids are using it to do their homework. And so suddenly the summer comes and they're not using it to do their homework or to cheat on their homework anymore, or to write their essays. And I'm, I'm sort of, I can't tell if that's a bullish or a bearish signal. I mean, it's not great if your use case is just kids cheating to use to, to do their homework. At the same time, it's kind of good to get some stickiness and some usage from the next generation of consumers.

• 1:08:08Ed Elson?

  What is very clear to me, and I think this has been a huge mistake. I thought that they were going to get on this about two years ago. I predicted, I think it was beginning of 2024, that ChatGPT would pivot into enterprise. They'd focus less on the consumer. That's not what they've done at all. And I think it's been a real problem because Anthropic has completely leapfrogged them in terms of enterprise usage. Eighty percent of Anthropic's revenue comes from enterprise customers. For ChatGPT, it's 30%. And, you know, you think, okay, well, what's the big deal? That's fine. I think the more telling statistic is that OpenAI has 32 times more users than Anthropic. They've got a huge consumer base, but they generate only two times more revenue.

• 1:08:53Ed Elson?

  The reality is enterprises, businesses just pay more money. It's just a better business and it's got stronger modes. So that's another reason why I'm just generally more bullish on Anthropic. They seem to have leaned heavy into the enterprise play. Meanwhile, yes, everyone's using ChatGPT, but only 5% of the users pay for it. And then, I mean, what's going to happen when they, when they really ramp up the monetization? What is, what is the price that consumers are actually going to be willing to pay? I'm not so sure.

• 1:09:23Scott Galloway?

  Yeah, to your point, so Greg Shove, who's the CEO of Section AI, which upskills corporations for adoption of AI. He has said, he's, I was on the phone with him a couple of weeks ago, and he said something that really struck me or resonated with me. And he said that he effectively echoed your comments. And that is, he said, like, there might be one to two billion potential users of ChatGPT. And he quoted, he's like, maybe 40 million will pay for it. He's like, that's optimistic. That in no way gets them anywhere near the valuation they already have. He said, there's two forks in the road here. There's, there's two doors, door one and door two. Door one is that OpenAI inspires really quickly massive enterprise adoption,

• 1:10:08Scott Galloway?

  or door two is bankruptcy. He's like, if they don't figure out a way to get enterprise adoption like humming on 12,000 cylinders, they're going out of business because there is no consumer model, consumer adoption model that gets anywhere near the valuation they have in the markets right now. And I thought that was really interesting. And to your point, Anthropic has gone B to B. And it's not to say that having the best B to C company isn't worth a lot of money. It's just not going to be worth one and a half trillion dollars. So it's, yeah, I, I love the way he framed it. Massive enterprise adoption or bankruptcy?

• 1:10:47Ed Elson?

  I think there's a very, very tiny and unlikely door three, which would be the ad model. But again, they haven't proven that. And yes, they're beginning to start to build out the ad business. But I mean, I, I'm with Greg. If the, if the goal is we're just going to have a B to C business and we're going to charge people a monthly fee, that's not going to work. You're not going to become a trillion dollar, one and a half trillion dollar company. We have seen tech, consumer tech companies that have reached those valuations by just

• 1:11:19Ed Elson?

  completely doubling down, tripling down on advertising. Meta would be the best example of that. I think that's their only lifeline. Unless, as you say, I think enterprise would be the option, the other option too. I think the other, just before we end here, the other thing that we should just think about is the, the labor market impacts. I know we've talked about this a lot, but you know, if you look at that Claude cowork product release, one thing that becomes very clear when you watch this video is like, this is doing the entire job of any entry level worker at any information services company. Like all of the tasks that it's doing, figuring out the emails, creating the, the PowerPoint decks,

• 1:12:02Ed Elson?

  figuring out what was said in the meetings, writing it up in a document, simplifying things. Like this is all stuff that I was doing for you in my first year out of college. That's going to be done by AI now, or at least it appears that that will be done by AI. And this just is, it's going to be an ongoing. Conversation this year, like, what does this mean for entry level workers? Where we're already seeing like the numbers are not, they're not great. I mean, young, young employment or young employment among young people is, is lower than it's been in years. There was this other data we just saw 76% of employers reported hiring the same or fewer entry level employees last year compared to 2024. Like, it seems that AI layoffs are already happening.

• 1:12:48Ed Elson?

  This, to me, makes it seem like it's only going to accelerate.

• 1:12:50Scott Galloway?

  We're talking to David Solomon from Goldman Sachs, the CEO there next week. And that's one of the questions I want to pose to him because to your point, Goldman, a place like Goldman has such growth opportunities that they can find new things for people to do. But I gotta think small services firms or just the traditional on ramping of information economy talent. I gotta think that's just, what's strange is supposedly the blue chip law firms have not decreased their freshman classes, which I just find shocking because I am already uploading.

• 1:13:22Scott Galloway?

  We got a payment from Vox yesterday for Pivot and I'm like, what is this for? When did it get here? And I immediately, and I thought, what are the payment terms? And I immediately just uploaded the agreement and said, what are the payment terms? What is this? And within a second, now, what would I usually do? I started typing an email to who?

• 1:13:40Ed Elson?

  Your lawyer, your tax person, yeah.

• 1:13:42Scott Galloway?

  My lawyer, my lawyer to say, can you look at the agreement on the pivot relationship? And when we are supposed to get payments? And I would ask a series of questions and right away, this one, this really talented, talented kid would do it. And my guess is charge me an hour, two hours, 400 bucks, now 800 bucks, you know, not a big deal. But I did it in about 60 seconds. I uploaded the doc to both, I do it to both Claude and ChatGPT because I want to cross reference because they occasionally hallucinate and say, buy fucking a Bitcoin treasury company, Scott. That's a good idea.

• 1:14:21Scott Galloway?

  But yeah, I just don't see any way around how it's not gonna, it's not gonna hurt a lot of traditional entry level onramps for the information employee. If you look at the history of technology, though, over the medium and long term, it should create more opportunities, more margin, more profit and new business ideas that not only replace or supplant or compensate for that labor destruction, but actually exceed it. And I'm still sticking to that. I don't like the catastrophizing that we're all going to be sitting on a couch getting checks from the Bezos Altman Foundation such that we don't engage in revolution. I think employment over the medium and the long term is still going to be strong. For different reasons. You're ready to rise up. You're going communist.

• 1:15:05Scott Galloway?

  It's because you're going to MSN now all the time. Oh, my God.

• 1:15:10Ed Elson?

  All right, let's take a look at the week ahead. We'll see delayed inflation data from the personal consumption expenditures index for November. We'll also see consumer confidence for January, meanwhile, Netflix, Johnson and Johnson, P and G, Charles Schwab, Capital One and Intel are all reporting. Scott, first week back, any predictions?

• 1:15:31Scott Galloway?

  Disney's going to be put into play. There are so many players, bankers, Gulf financiers, lawyers, executives, who have figured out, wow, we probably could buy companies for $100 billion. They're going to start thinking, well, why couldn't we take a majority stake or potentially put a company in play that's worth 200 billion? And the prettiest dude or the most handsome dude at the wedding who doesn't have a dance partner right now is 100% Disney, whose stock is flat over the last 10 years versus the S and P, which has quadrupled. And also typically what you find when, and it might be an activist, not an acquisition offer,

• 1:16:15Scott Galloway?

  but typically what you find is activists like to come in in the midst of leadership transition because it creates an ability for them to have more impact.

• 1:16:24Scott Galloway?

  And they've been talking about succession for a long time at Disney. And Bob Iger isn't a villain. He's even worse. He's someone who can ruin something politely in a cashmere sweater, which I find especially mendacious. But that creates an opening. You know, Pelz has already been in there, the ability to come in. And also. What you have at Disney is really unusual for a media company. And that is the great movie Wall Street with Michael Douglas and Charlie Sheen. Charlie Sheen saying, why are you bothering? Why are you going after and trying to acquire this company? Why are you trying to break this company? And he goes, because it's breakable. Disney is breakable. Disney does not have dual class shareholders. It doesn't have staggered boards.

• 1:17:08Scott Galloway?

  There's a board meeting or a board election, director election every year. One class of stock, no poison pills. It is highly breakable. And then if you want to talk about intrinsic value, my God. Talk about the IP Marvel, Star Wars, Pixar, ESPN, their parks business? Someone might have a vision for coming in, breaking it up and spinning out the parks business. It's much less Hulu and all this different stuff. And going back though, I think a lot of people have spent a lot of time figuring out how to take over a $100 billion company and they're not going to win here. And then I'm like, I know, let's see if we can raise 200 billion and go after Disney.

• 1:17:51Scott Galloway?

  I am shocked Disney's stock has not gone up in sympathy with Warner Brothers because Disney's actually a much better company with even more singular assets. And there's just, we're running out of steam here. I mean, we're running out of, we're running out of dance partners here. Anyways, my prediction sometime in 2026, sooner probably than later, Disney's going to be put in play.

• 1:18:15Ed Elson?

  This episode was produced by Clay Miller and Austin Weiss. Mia Silverio is our research lead. Our research associates are Isabel Kinsel, Dan Shulon and Christian O'Donoghue. Benjamin Spencer is our engineer. Drew Burrows is our technical director and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. Tune in tomorrow for a fresh take on the markets.

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