Europe Braces for Trump’s Greenland Tariffs

Ed Elson speaks with Robert Armstrong, U. S. financial commentator for the Financial Times and author of the Unhedged newsletter, about President Trump’s new tariffs on the EU and how markets responded. Then, Alex Kantrowitz, founder of the Big Technology newsletter and podcast, joins the show to break down why OpenAI is rolling out ads on ChatGPT, and what it signals about the evolving AI landscape. Finally, Ed wraps the show with his updated thoughts on ASML stock. Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:01Speaker 00

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• 1:15Ed Elson?

  Today's number, 3,000. That's how many international leaders are set to attend the World Economic Forum's annual meeting in Davos this week. Today's other number is 300. That's how many sex workers will also be joining.

• 1:36Speaker 05

  If money is evil, then that building is hell.

• 1:44Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. That last joke is actually true. Look it up. It is January 20th. Let's check in on yesterday's market vitals. U.S. markets were closed for MLK Day. Still, S and P and Nasdaq futures sank 1% as tensions flared over Greenland. More on that in a moment. Meanwhile, the dollar slid, Bitcoin declined and gold hit a record high.

• 2:11Ed Elson?

  Okay, what else is happening? President Trump has upped the stakes for a Greenland acquisition, presenting Europe with a new tariff ultimatum. Over the weekend, he announced 10% tariffs on eight European countries, starting February 1st. According to Trump's Truth Social post, the rate will rise to 25% in June unless there is a deal reached for what he called, quote, "the complete and total purchase of Greenland." The targeted countries are putting up a united front, warning this could spark, quote, "a dangerous downward spiral." French President Emmanuel Macron is urging the EU to use its trade bazooka, more formally known as the anti-coercion instrument, which could lock the US out of European markets.

• 2:56Ed Elson?

  Meanwhile, Danish officials are skipping the World Economic Forum in Davos in protest, and Denmark deployed additional troops to Greenland on Monday. European stocks had their worst day in two months yesterday, and gold and silver hit fresh all-time highs, another signal that investors are searching for safety. So, here to discuss what is at stake with potentially another trade war between America and Europe, we are joined by pod favorite Robert Armstrong, US financial commentator for the Financial Times and author of the Unhedged newsletter. Rob, welcome back once again to Profitey Markets.

• 3:36Robert Armstrong?

  Good to see you on the, at the end of a very strange weekend.

• 3:41Ed Elson?

  A very strange weekend, indeed. We want to jump right into it. So, we've got 10% going up to 25% tariffs on eight European countries that have expressed solidarity with Greenland. We have Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland. Let's just start with your initial reactions, Rob.

• 4:05Robert Armstrong?

  First reaction, is it going to actually happen? As far as I know, the, the threatened tariffs on any country that trades with Iran have not happened.

• 4:18Ed Elson?

  Right.

• 4:19Robert Armstrong?

  We had a tweet from the president that was happening. It then just drifted to wherever presidential tweets go when they're not with us. So...

• 4:32Robert Armstrong?

  So, you know, the rhetoric is pretty strong. There was the bizarre text to the leader of Norway. It seems pretty serious and markets are reacting. But the hard first question you always have to ask is, is this a case of real strategic boldness, Allah Venezuela? Or is this a bunch of talk?

• 4:59Ed Elson?

  Right.

• 5:00Robert Armstrong?

  Uh, like so many other adventures or near adventures have been in Trump's world of trade.

• 5:08Ed Elson?

  Right.

• 5:08Robert Armstrong?

  And it's very hard to tell at the outset.

• 5:11Ed Elson?

  Yes, exactly. And it's exactly what we saw last year with Europe where he threatened 30%. And then he went down and then he made all of these exemptions. It seems to me, I mean, again, I always like to remind people, taco was a term that was created by Robert Armstrong, who is with us right now. I'm someone who generally lands in the taco camp. And this is another case of that for me. For me, I see this, it's a, it's a social media post. He just puts it out there. My instinct is taco. What is interesting is we're in this dynamic where we're seeing that, that markets in Europe are selling off.

• 5:53Robert Armstrong?

  Yes.

• 5:54Ed Elson?

  But also it's MLK day. So the US markets are closed. So we don't know what the markets are going to react like tomorrow.

• 6:03Robert Armstrong?

  Okay, let me, let me frame this in a, let me steal a way of framing this from someone else. Ian Bremmer, who's one of these people who sort of talks about geopolitical risk for a living. I think his company is called Eurasia Group.

• 6:19Ed Elson?

  That's right.

• 6:19Robert Armstrong?

  Anyway, he had this short video that I think sums this up really well. He, he, he talked about the contrast between taco and FFO. Taco being Trump always chickens out and FFO being fuck around and find out. And some countries get the taco treatment and some countries get the FFO treatment. And. His point was that the weak get FFO and the strong get taco. In other words, countries that put up a little bit of resistance, Brazil, China, Russia to a degree, actually taco is the most common outcome. If countries show weakness or are too weak to protect themselves, like Venezuela, they

• 7:03Robert Armstrong?

  see bold Trump, they see FFO Trump. So we might ask at this point, is Europe gonna be strong in response? In which case, we might expect taco and the situation to stabilize and cool off? Or do they get into a characteristically European mode of tripping over their own feet and their own internal political squabbles? Come with a weak and divided response, in which case they get FFO, right? The hard side of Trump. So I'm not sure that's true, but I think it's a kind of intriguing way to think about it. Right? And I bet that you are right, that this is a situation where Trump will be prepared

• 7:46Robert Armstrong?

  to back off, but only if Europe shows willingness to up the ante.

• 7:54Ed Elson?

  Yes. And by the way, it seems that they do, or at least.

• 7:59Robert Armstrong?

  Yes.

• 8:00Ed Elson?

  I mean, that's what we're hearing with this talk of a trade bazooka, which I've never heard of.

• 8:05Robert Armstrong?

  Right.

• 8:06Ed Elson?

  This is what Emmanuel Macron has been suggesting, that they use the anti-coercion instrument. They call it the trade bazooka. I love that.

• 8:14Robert Armstrong?

  Yeah, I love the anti-coercion instrument. It's like a special axe they keep in a box in Paris or something, you know?

• 8:25Ed Elson?

  From my understanding, it's basically just some export controls. I'm not sure exactly what makes it a bazooka versus any other trade weapon.

• 8:36Robert Armstrong?

  It just means Europe is committed to a lot of global principles of kind of fair and reciprocal trading with its trade partners. And I think basically what the anti-coercion instrument does is release them from those commitments.

• 8:55Ed Elson?

  Right.

• 8:56Robert Armstrong?

  So they are, it basically says, if it's a situation where you've been nasty to us, and we can be nasty right back.

• 9:02Ed Elson?

  Even if it is a taco, I think it probably is.

• 9:08Ed Elson?

  It does seem that there is a vibe change that has occurred and that is the post and the statement itself is just offensive to Europe.

• 9:18Robert Armstrong?

  Yes.

• 9:18Ed Elson?

  So, you know, that's why Macron is reacting the way he has. And you've seen people like Keir Starmer speaking out and basically any EU leader is coming out and saying, hey, this is unacceptable. You cannot, you cannot do this. You cannot threaten to just take over the land of one of our allies.

• 9:37Robert Armstrong?

  Yes.

• 9:38Ed Elson?

  Given how offended everyone is, do you think that that offense could lead to something more substantial like a trade war? Or do you think this goes the way it historically has done, which is they kind of fight a little bit and then ultimately they kind of kiss and make up?

• 9:55Robert Armstrong?

  God, you're asking to me to make a political prediction here. You know, you, you, you haven't lost a lot of money historically betting against Europe's ability to put up a unified front. There's, you know, they have a very consensus driven system where a small number of defectors can prevent unified action. So it makes it hard, they really, they really have to be pushed up to the edge. But I think that this, this does feel different. And I think it not only feels different in the way you talked about it being offensive, the president of the United States feels more and more erratic.

• 10:40Robert Armstrong?

  Right? And not, you know, the, the, the constant provocations.

• 10:46Robert Armstrong?

  The tone out of the White House has changed. The tone of the spokespeople have changed.

• 10:51Ed Elson?

  Yeah.

• 10:53Robert Armstrong?

  So, you know, I don't know what pushes Europe far enough to get them to unification, but we're moving in that direction. We're getting closer.

• 11:04Ed Elson?

  Yeah.

• 11:04Robert Armstrong?

  But I don't know where the magic moment is, I'm afraid.

• 11:07Ed Elson?

  All right. Robert Armstrong, US financial commentator for Financial Times, author of the Unhedged newsletter, also with the Unhedged podcast, which you should check out. Rob, appreciate your time. Thank you for joining us.

• 11:20Robert Armstrong?

  Glad you should be here.

• 11:23Ed Elson?

  After the break, OpenAI gets into advertising. And for even more markets content, you can subscribe to my new weekly newsletter. It's called Simply Put. You can find it at edwardelson.substack.com.

• 11:44Speaker 00

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• 13:02Ed Elson?

  We're back with Prof G Markets. Ads are finally coming to ChatGPT. OpenAI announced it will start testing ads on US adult users with free accounts in the coming weeks. The company insists it will not sell data to advertisers and that users can turn off ad personalization. It is a stunning reversal from Altman's stance just two years ago, when he called ads a, quote, "last resort." Well, it looks like that last resort is here. OpenAI is seeking New revenue streams to help fund its massive AI build out, including a reported $1.4 trillion commitment to infrastructure over the coming years.

• 13:42Ed Elson?

  Here to discuss why OpenAI is finally embracing ads and what that says about the AI business, we are speaking with Alex Kantrowitz, founder of the Big Technology Newsletter and podcast. Alex, you are joining us from Davos. How is it?

• 13:58Speaker 08

  Yeah, Davos is very weird this year because for a number of reasons. First of all, we're in Europe at a moment where President Trump is threatening to take over Greenland. So obviously some awkwardness there as he's about to hit the WEF summit. But also, we're in this moment where companies for a long time used this conference as a place to talk about their altruism. And over the past couple of years, we've definitely seen much more of a shift towards the naked interest and the bottom line. So they've tried to worm their way back into that social good messaging, mostly by talking about how AI will get us there. There are 48 sessions at the WEF about artificial intelligence, where people are going to talk about it being able to cure cancer and empower the disempowered. We'll see if the message gets across.

• 14:45Ed Elson?

  You seem skeptical. Is that right?

• 14:48Speaker 08

  I will, I will wait and see. I'll wait and see.

• 14:51Ed Elson?

  Wait and see. I think that's fair enough. Well, we want to get into this move from OpenAI. They are now putting ads on ChatGPT. I think last time we spoke, Alex, you and I were kind of having a debate over whether they should be doing this. I was on the, and correct me if I'm wrong about this. I remember being on the pro advertising side. I felt they need to monetize and get this over with. I remember, I think you were on the other end of that. What do you make of this, this move? They are now. Selling ads.

• 15:25Speaker 08

  That sounds right. Look, I think that when you think about the most skeptical perspective of this, which I've seen come across the social feeds in reaction to it. Some have said, hey, listen, you're using AI, you're about to, you know, if you really believe that you're close to artificial general intelligence and disrupting, you know, the way that we work and these big breakthroughs, then why are you resorting to the sort of crude as possible form of business on the internet, which is advertising? Is that an indication that you don't really believe in what you've been telling us this this time? Clearly, I think there's a couple of things that are that are happening here. First of all, it's the imperative for growth. The ad tier is going to give people more access to OpenAI's models.

• 16:10Speaker 08

  So you'll be able to chat a little bit more. And I think there's a hope that that will bring more people in. It seems to me there was an interest in getting towards a billion weekly active users. By the end of the year, I've heard some rumblings of that. They fell short. They're at 800 million now. And especially as we gear up towards an IPO potentially, I think that will happen next year. They're going to really want to continue to show that growth. So for me, it is a, you know, I think I'm coming around. It's a necessary evil for this company. It'll be a good business. But the drawback is one thing goes wrong and all of a sudden you have a very big scandal. And I think that's something worth paying attention to.

• 16:49Ed Elson?

  What are the kinds of things that could go wrong here? What could lead to that that blow up or a scandal?

• 16:56Speaker 08

  Well, there's no product that knows you better than a chatbot, especially if you spend time with a chatbot. And one of the things that OpenAI in particular has been working on has been making these bots remember us better. Memory is going to be a big initiative for OpenAI in 2026. So the bot will be able to recall conversations that you've had years previously. And there's a tremendous amount of trust that goes into interacting with a product that remembers you that way and becomes, in many people's cases, a companion. That doesn't necessarily mean romantic, but people have developed friendship feelings towards it or even. Some sort of bond with the bot that you you believe it has your best interests at heart.

• 17:38Speaker 08

  The second this thing starts pitching things that get a little too close to home based off of the data that it has about you. It could get bad. And remember, it only takes one really bad or a few really bad stories. For people to get the ick about a company that does advertising. Most of Facebook's advertising is like app install ads for games.

• 17:58Ed Elson?

  Right.

• 17:59Speaker 08

  But a couple of ads that get a little too close to home, everybody says Facebook's listening to us. And that's the worry for OpenAI.

• 18:06Ed Elson?

  Yeah, Altman previously said that ads combined with AI are quote uniquely unsettling. He also described that combination as a quote. Last resort. So it does appear that OpenAI is reaching its last resort. It seems like that might be what this is. Something I I like to theorize about is what would happen if OpenAI were a public company? We don't know because it's a private company. We can't look at the stock price, but what what direction would the stock be moving in? I'd love to just get your views on this. If if OpenAI were a publicly traded stock, do you think it would be up or down following this?

• 18:49Speaker 08

  Oh, it would shoot up. And I know I'm talking both sides of this because I really am wrestling with it. It's complicated. But the market would react very positively to OpenAI introducing ads. Ads are an extremely high margin business.

• 19:01Ed Elson?

  Yeah.

• 19:02Speaker 08

  Famously on the internet, you only need a couple of salespeople or you can even automate the sales process. And then those ads can extend across large audiences and you can make a lot of money. Google has done a great job with this. Facebook has done a great job with this. Even Amazon, I think it's one of the least heralded stories of, you know, at least with the big tech business. Amazon has done amazingly with with advertising. And it's become one of the biggest, highest margin businesses within that company. So I think if the market saw, oh, you you have your subscription business. And now you're introducing this high margin ad business. We've seen it before in places like Netflix, which has made a very similar move. And it's working out well, very well for them. So I think that stock would go right up.

• 19:45Ed Elson?

  Yeah. Something else you said there, which I think is fascinating and also very true is this idea of getting the ick with OpenAI, which I think is an underrated element in the AI race. If if people decide that they have the ick on any given chatbot, that will decide the trajectory of this economy. And it does seem in the past few months or so that people are beginning to get the ick on OpenAI. They're kind of getting icked out by Sam Altman and his and his media appearances. And I wonder if ads add to that dynamic. I think back to

• 20:25Ed Elson?

  that great scene in The Social Network where Justin Timberlake is talking with Jesse Eisenberg, Mark Zuckerberg, and they're talking about ads. And he's like, you can't run ads because ads aren't cool. And I think about this with this too. I mean, to me, I think they kind of need to do it because they need to monetize, they need to show that to investors. But at the same time, ads aren't cool. And if you're getting ads in your chatbot, is that something that immediately gives you the ick and causes you to resort to other products? What do you think of that possibility?

• 20:59Speaker 08

  Yeah, well, I would say, first of all, the user numbers do suggest that people still really like OpenAI. They like the the products, they like chatting with OpenAI, they've enjoyed, well, Sora, for one, is a company that they trusted with their own faces, pretty much to make AI videos of themselves. So there's still a lot of trust in OpenAI. And I think that's a very, very valuable thing that the company has. It has been the company that's pioneered this. People have given it a lot of trust, a lot of information, their data, and they've seen results from it. And so that that, to me, again, is is the risk here, is when you do advertising. If you don't do it tastefully, basically 100% of the time, you do risk having people feel, oh, I don't know if it feels so good to use this product anymore. Maybe I'll try the others.

• 21:45Speaker 08

  And as these bots, as the context windows get bigger in these bots, sometimes you can just ask, I mean, imagine if you want to switch bots, you ask OpenAI, hey, print me out a summary. Of our interactions. Tell me what you know about me. Copy and paste it. Put it into Gemini. Now, all of a sudden Gemini has picked up all those preferences. It won't be that difficult to switch. And so they have to be very careful when they roll this out that, you know, they do it in the right way. I, what I've seen so far, I like. But again, it only takes a couple of bad attempts and then you're, you're really in a bad place.

• 22:16Ed Elson?

  When we look at some of the other chatbots, so um, Plaud, which is Anthropic's chat product, which has gotten a lot of press recently because of Plaud cowork, which they recently announced, which went viral and everyone was talking about it. It seems really impressive. Gemini has also been getting increasingly popular, increasingly making headlines. We're seeing a lot more usage. Just going into 2026, who do you think is going to win the AI race this year? I've said, I think maybe Anthropic's going to pull ahead, but you know, as you say, everyone's still using ChatGPT. It's still the most popular.

• 22:54Ed Elson?

  If you had to place a bet on any one of these AI companies and AI products, who do you think is winning in 26?

• 23:02Speaker 08

  Well, I would say that there's multiple different races going on at the same time. So you have OpenAI running the consumer race. You have Anthropic running the enterprise race. They could both win and be very big companies in their own respect in two different categories. Uh, and then you have Google, which maybe is a blend. Uh, maybe they can use AI for enterprise. They can use AI in their existing products and uh, and continue to build off of that. But I'm not going to run away from the question. I think it's a fair question. My money's still on OpenAI. I still, I still think OpenAI is going to win this thing, uh, when all is said and done.

• 23:35Ed Elson?

  All right. Alex Canturis, founder of the Big Technology Newsletter and Podcast, joining us from Davos and it's late there. So we really appreciate your time. Thank you for joining us and enjoy the rest of the conference.

• 23:50Speaker 08

  Thank you so much, Ed.

• 23:54Ed Elson?

  One last tech story before we close. Last week, an AI company called ASML became the third European company in history to reach a market cap of half a trillion dollars. For context, ASML is technically a lithography company, but we call it an AI company because they make the lithography machines that are used to make AI chips. So it's basically an AI company. Now, why did the stock surge? Well, it was actually because of the earnings of another AI company, and that company was TSMC. As you may know, TSMC is the Taiwanese chipmaker. Last week, they announced they will be spending $56 billion on chip manufacturing.

• 24:36Ed Elson?

  And the reason that is important for ASML is because TSMC is ASML's largest customer. So that means a big chunk of that $56 billion will be landing on ASML's income statement. That's why ASML shares rose 7%. That's why the stock hit a record high. Now, why are we highlighting this? Well, because as you might remember, ASML was one of our stock picks last year. Back in July, we said on this program that ASML was a buy. And the reason we were so bullish was because, one, the company was just perfectly positioned for the AI boom, and, two, it was receiving a multiple it didn't deserve, largely because

• 25:16Ed Elson?

  of its own concerns about geopolitical conditions and tariffs, concerns that, by the way, were not reflected across the rest of the market. It was a slightly complicated thesis. I won't go into the full details, but if you want them, go check out our episode from July 17th. The central idea, however, was the following. ASML had this habit of under-promising and over-delivering, and it seemed to us that investors hadn't quite figured that out. Now here comes the brag. We recommended this stock at $750 per share. As of today, it is trading at $1,359 per share.

• 25:57Ed Elson?

  In other words, the stock has risen more than 80%. That means that ASML has generated five times more returns than the S and P over the past six months. And I have to say, aside from Google, this might be one of our best calls last year. Now, at this point, the company is fairly valued. It isn't really the buying opportunity it was, at least in our view. We consider this a hold, not a buy. Therefore, I don't really have investment advice here. The reason we bring it up is entirely selfish, and that is we wanted to take a victory lap. So there you have it. Historic run for ASML. Congrats to those of you who did buy back in July. And if you did, let us know in the comments. We'd love to hear from you.

• 26:47Ed Elson?

  Okay. That's it for today. This episode was produced by Claire Miller and Alison Weiss, edited by Joel Patterson and engineered by Benjamin Spencer. Our research team is Dan Jalon, Isabella Kinsel, Chris Nodden, Hugh and Mia Silverio. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.

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