Pod Insights Prof G Markets Google’s Quantum Breakthrough & The World Cup Goes to Saudi Arabia About this episode Scott and Ed open the show by discussing why a federal judge blocked Kroger’s acquisition of Albertsons, Warner Bros. Discovery’s decision to restructure its business, and Eli Lilly's plans to test its GLP-1 drug as a treatment for addiction. Then Ed breaks down Google’s innovation in quantum computing, outlining its potential business use cases. Scott explains why the market is responding positively—even as the broader implications remain unclear. Finally, they discuss Saudi Arabia’s successful bid to host the 2034 World Cup and debate whether it’s a smart long-term investment for the country.
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Transcript 10,048 words · 5 speakers
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1:00 Speaker 02 This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior light beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.
1:29 Scott Galloway? Today's number, $400 billion. That's Elon Musk's record high net worth as of last week. Power corrupts and absolute power absolutely corrupts. This is terrible for society and will cause real damage to economies, justice, and democracy around the world.
1:57 Scott Galloway? Welcome to Prop G Markets. Today, we're discussing Google's quantum breakthrough and Saudi Arabia's World Cup. But first, here with, oh, wait, banter.
2:06 Ed Elson? You can introduce me and then we can do, and then we can do banter. You don't have to.
2:10 Scott Galloway? Like anyone doesn't know you? Literally, I'm so sick of it. Everyone comes up to me, he's like, hey, tell Ed we said hello. If it's anyone young, they're like, I love that Ed Elson. Yeah, I know. Yeah, he's great.
2:21 Ed Elson? Love to hear that.
2:22 Scott Galloway? He's great. What are you doing, Ed? Where are you? What's going on?
2:25 Ed Elson? I'm in New York and I'm just sort of reeling from that. $400 billion net worth stat. I don't know if you realize this, but since Trump was elected, since November 5th, Elon's net worth has increased by 66% and he's added $4 billion to his net worth every day.
2:44 Scott Galloway? Yeah, and I was excited about getting ZipRecruiter as a sponsor last week.
2:50 Scott Galloway? Oh God, and here I am selling like chewable erectile dysfunction drugs. Seriously, like, oh wait, they're gonna spend $1,100 on first time founders? Sure, I'll meet with them. Oh God. Oh God, I'm headed to, oh wait, I'm headed to Riyadh. Let's talk about that. Let's bring this back to me. I'm headed to Riyadh on, when am I going? On Tuesday. Have you ever been to Riyadh? You haven't been to Riyadh, right?
3:15 Ed Elson? No, no. You're welcome to take me with you.
3:18 Scott Galloway? Yeah, if you were much more interesting and I liked you more, we'd absolutely be rolling together. That's not fair. I think you're both interesting and likable, but I've been to Dubai a bunch of times. I've only been to Riyadh once and I was only there for a conference. So I'm kind of curious. I'm taking, taking a little bit extra time and I'm gonna check it out. I'm sort of, I'm kind of fascinated by the kingdom right now.
3:39 Ed Elson? Well, we'll be discussing that more because we got Saudi Arabia on our docket here. But let's, let's start off with our weekly review of market vitals.
3:53 Ed Elson? The S and P 500 declined, the dollar gained, Bitcoin hit another record, and the yield on 10-year treasuries increased. Shifting to the headlines. A federal judge has blocked grocery store Kroger's acquisition of Albertsons. The judge sided with the FTC, agreeing that the $25 billion deal would hurt consumers and limit competition. Following the judge's ruling, Albertsons terminated the deal and filed a lawsuit against Kroger alleging the company didn't do enough to secure regulatory approval. Warner Brothers Discovery is splitting into two units, one for its streaming and studio business and another for its linear TV networks. The move paves the way for a potential spinoff or sale of its TV business,
4:34 Ed Elson? and the stock popped more than 14% on the news. And finally, Eli Lilly will begin testing its GLP-1 drug Zetbound next year as a treatment for drug and alcohol addiction. Eli Lilly's CEO, Dave Ricks, described GLP-1 drugs as "antihedonics," saying they can help reduce the desire cycle. Scott, your thoughts, starting with Kroger's acquisition of Albertsons, which was set to be one of the biggest M and A deals in history, called off.
5:05 Scott Galloway? So my gut was that this was populist bullshit and I love antitrust. I love blocking mergers. I'm an even bigger fan of breakups. But my fear was when you look at Albertsons or Kroger, it's, it's not like these guys are, you know, lighting up the business world. This is specifically their existential threat is Amazon. You know, I feel like this is not a great business. It's low margin. It's difficult. I think there's still quite a bit of competition here. This is populist bullshit because just as diapers weigh, diapers and gas prices kind of weigh on people's sort of view of the world, like if gas prices go up, they get angry at the administration. And if diapers are more expensive, they think, oh, this store is a ripoff.
5:48 Scott Galloway? Grocery prices have become a very strong indicator for how the majority of the public feels about inflation and the administration. And so I thought it was sort of a, an easy target to say, no, grocery prices need to stay low. But South Dakota State University found that supermarket mergers can actually decrease prices for customers due to economies of scale. Albertsons decreased 4% on the news. Kroger increased 5% after announcing would abandon the merger and restart stock buybacks. That's because typically the person on top who makes the acquisition overpays. Only one in three acquisitions work. But I think, I don't know, I think that the real threat is Amazon and having more formidable competitors
6:31 Scott Galloway? to Amazon would create a healthier ecosystem.
6:34 Ed Elson? Yeah, I'm a little torn on this. I think the really interesting, interesting thing here is you mentioned that they're kind of the, the smaller players in the market and you've got Amazon and you've got, you know, Walmart who are crushing them. And this was Kroger and Albertson's argument. Their argument was that this was basically the only way to compete with all the online retailers, especially Amazon. And I think they probably thought that would work with the FTC because they know that the FTC has been going after Amazon anyway. But the FTC's response was, okay, well, you say you want to compete with the online retailers, but you're actually not an online retailer. You are a supermarket and those are two very different things.
7:19 Ed Elson? And what's interesting is that this is ultimately what the decision came down to. It was an argument over what the definition of a supermarket actually is. And the judge made her opinion very clear. I mean, the first line of the conclusion was, quote, "Supermarkets are distinct from other grocery retailers." So in other words, she's saying, you know, unlike your framing, where you guys are these little fish in this big, big pond of retail, we believe that you are in fact the big fish in the little pond of supermarkets. And supermarkets and big retail are two different things. And therefore, to team up like this would be unfair.
8:01 Ed Elson? And I've been kind of back and forth on this because it's really about framing. It's like, are they, you know, dominating the supermarket business? Or are they struggling in the retail business? And that's really what this came down to. So I'm not, I'm not sure I have a, an opinion yet, but I do find it interesting that all of this comes down to a dispute over definitions.
8:23 Scott Galloway? So I think that that argument holds water if the framing is that they're not really competing against Amazon, they're competing against other grocery supermarkets. But even if you say, okay, take Amazon out of the competitive set, the biggest grocery supermarket in my mind is Walmart.
8:42 Ed Elson? Right. And by the way, just the way they, their name for Walmart, it's very interesting. They called Walmart a large format store.
8:49 Scott Galloway? Whatever we call it, Walmart's biggest category is groceries. There are still a large number of Walmart customers that primarily go there just for groceries. So call it what you want, it's the largest grocery provider retailer in the nation. They have a 25% share of the grocery market. And combined, this company, had the merger gone through or been approved, would have had 11%. So, okay, fine, we're not competing against Amazon, but you're going to tell us we're not competing against Walmart? And Walmart with that scale, based on their most recent earnings call, is kicking the shit out of Target, much less Kroger's and Albertsons. And so their case is that Kroger, people, people don't think of Walmart for groceries. They only go to this separate,
9:33 Scott Galloway? this separate category of which your dominant players, I just don't buy that. I think a lot of people, if Kroger's-
9:39 Ed Elson? Plus, Amazon owns Whole Foods.
9:41 Scott Galloway? There you go.
9:41 Ed Elson? It's the other side of this too.
9:43 Scott Galloway? I, I think if people think, oh, Walmart has the lowest prices because of their scale and their technology, I'm going to buy my groceries from Walmart and not from Kroger's or Albertson's. So I, based on the fact, I think they had eight and 3% market share and Walmart, distinctive Amazon, has 25% and it feels like a pretty robust sector. I, I would argue, let me put it this way. I think Doug McMillan is really happy, the CEO of Walmart. He's like, oh, God, we're going to roll over these guys. They don't have the capital to make the types of investments we can in technology. They don't have the scale to, to turn the screws on all of our suppliers like we do. So I, I think they got it wrong here. I, I wonder if actually this one should have gone through.
10:28 Ed Elson? Yeah, I could imagine a world like 10 years from now where Walmart and Amazon absolutely dominate the, the supermarket and grocery business. Prices are high and we'll look back at this moment and be like, damn, we really fucked up there. We could have, we could have prevented this. I think that's very possible. One final note though, Wall Street never thought this was going to go through from the very beginning. So this was, this deal was pricing Albertsons at $34 a share. The stock's been hovering at around $18 a share, basically throughout the, from when they announced the deal to today, it's, it's been trading at a discount. So it is interesting that Wall Street from the get-go was like, this is not going to go through. Let's move on to Warner Brothers
11:11 Ed Elson? Discovery. This is sort of downstream of your prediction about how we're going to see a lot of spins in the media business, specifically cable assets will be spun off to capture- More value. This is a little different, though, because unlike Comcast, who did exactly what you said in your prediction last month, where they spun out their cable assets into a new company, this is just a restructuring. So the cable assets are going to have their own operating division. The streaming assets are going to have their own operating division. But there's no spin here, at least there's no spin yet. It's still one company. So my question for you is, what does this actually mean for shareholders?
11:56 Ed Elson? Should we be expecting a spin? And if not, does this sort of relabeling into different categories actually do much to the company?
12:05 Scott Galloway? This is a preview. This is making it, he's setting the table for a spin. And that is, he's creating distinct operating units such that the spin will be more elegant and easy. And the fact that the stock is up 15% now today is basically the market saying, oh, you're flirting with a spin? Well, come on over here. This means the spin, in my opinion, is going to happen. I don't know if the spin will take some, most, or all the debt, but they will probably, I mean, what you have with the cable business is highly profitable businesses that can probably support a lot of debt because they're cash flow generative. And this will free up a pure play around Warner and HBO, which will trade at a much
12:45 Scott Galloway? higher stock price. And my two stock picks, or my three stock picks for 2024 were Alphabet, because I thought they had more IP, and then it would be Revenge, or the Empire Strikes Back around AI, and that Warner Brothers, Discovery, and Disney had been oversold. Part of the thing getting in the way of the spin, I believe, was their capital structure is a bit of a straitjacket. What do I mean by that? They have really good debt. They have a ton of debt, but it's that it's it's long maturity. It doesn't come due for a while, and it's an exceptionally low interest rate. And I wonder if they spin, if it accelerates. All of the bondholders here want out of this debt. They're making no money. They're getting,
13:27 Scott Galloway? you know, two or three or 4%. Warner Brothers loves this debt, because even though they have a lot, it's on really friendly terms. And I wonder if the thing that gets in the way of the spin is that it might accelerate the bond payments, or that they might not be able to just transfer debt. I think that's the key question here. But from a shareholder perspective, based on what the market said today, this is Zasloff. Pritting up the company for a spin and saying they will be distinct, it will be easy, the operations will break out the revenues and all this and we'll have our cool kid, hot girl, growth streaming and Warner Brothers division and we'll have
14:08 Scott Galloway? the ugly stepchild that still brings home money, but is, you know, not very popular. That will be these cable assets. This is a good move. Comcast led the way. What'll be interesting is I wonder if he's sending a signal to Comcast, speak now or forever, hold your peace, because once they spin, it becomes harder for Comcast, NewCo, or whatever they're calling it, to acquire it. So I wouldn't be surprised if at some point Brian Roberts calls David Zasloff and says, we should talk, should our, should our cable assets join together into one? Because, you know, MSNBC and CNN having the same backend, same newsroom or similar newsroom, that just makes all sorts of sense to me.
14:53 Ed Elson? Yeah. And I'll also just point out the fact that this happened now, as you mentioned, one of your stock picks was Warner Brothers Discovery. You were saved by the bell because WBD was in the red throughout most of the year. And I know people were saying that, oh, Scott, we got it wrong. It's now in the green. It's up 7% year to date. Not huge, but in the green. So I'm going to call it away.
15:16 Scott Galloway? Yeah, but I've underperformed the market. I've underperformed the market, though, right?
15:19 Ed Elson? We've still got two weeks.
15:20 Scott Galloway? Where's those blue chewables?
15:23 Ed Elson? And finally, our third headline here, Eli Lilly testing GLP-1 drugs for alcohol addiction and drug addiction and tobacco addiction. I love this new term here from the CEO, antihedonics. This is exactly what you've been talking about for a long time.
15:45 Scott Galloway? I even saw some data saying that people on Ozempic reduced their drinking by 60%. Diageo, the alcohol guys, oh my God, these stocks, in my opinion, are going to get absolutely hammered. We could see alcohol really taking on the chin.
16:01 Ed Elson? Your thoughts on this news?
16:03 Scott Galloway? These things are scaffolding on our instincts. They just update our instincts to the institutional production that our instincts haven't caught up to. You know, what is an addiction? Addiction is when you continue to do something despite it having a negative impact on your life or your health. And this basically tells your brain somehow calibrates it to say, no, this is, you can stop eating now. Or no, you don't need to, you don't need to stay on TikTok for another 11 hours. This is enough. All of a sudden, I'm looking at these stocks, they're going to say, okay, if they're up 30 or 40%, is it still an opportunity to get in? Because if they're not only treating obesity, but they're treating alcoholism, they're treating social media addiction, they're treating porn addictions. I mean, I think you're just going to see gambling addiction.
16:47 Scott Galloway? Anyway, I'm very excited about this.
16:49 Ed Elson? Yeah, our thoughts on what this would do to addiction were based mostly on surveys, but there is a study out now from Loyola University, and it found that people with opioid or alcohol use disorder who take GLP-1s have a 40% lower rate of opioid overdose and a 50% lower rate of alcohol intoxication. So the peer reviewed research is now coming. What's happened to the alcohol industry, though, is just fascinating. Here are some stats. In the past year, Boston Beer has fallen 9%. AB and Bev, which owns Corona and Michelob Ultra, it's fallen 15%. Brown Foreman, which owns Jack Daniel, has fallen 20%. So the entire alcohol industry is, I mean, I'm not going to say it's in free fall,
17:34 Ed Elson? but it, it feels like it's approaching free fall. And I think what we should keep tabs on is what is going to happen to all of these alcohol stocks when that anti-he dinox study from Eli Lilly is released? And when we start to see just a flood of more peer reviewed research that says very conclusively, this is reducing people's use of alcohol.
17:55 Scott Galloway? There's this crazy stat, something like 1% of alcohol drinkers are responsible for 30 or 40% of all alcohol consumption. There is a decent percentage of. I mean, it's just, it's staggering. There's a small number of people that drink like 27 beers a day. And the alcohol industry is really kind of driven, not by social drinkers, but by alcoholics. And that's not a great stat to talk about. But if you think about who's going to get GLP-1 first, it's the person whose doctor said, if you keep drinking, you're going to die. And when you take out those rabid alcoholics, the drinks industrial complex, if it loses the 1% of the alcoholics,
18:41 Scott Galloway? its business is going to be off 20 or 30%, which, which spells restructuring, massive layoffs. I mean, that's, that's going to be a meltdown. And I don't think that's happened yet, because my sense of GLP-1 drugs is that right now GLP-1 is for ladies of lunch and wealthy people who want to lose that last 10 or 15 pounds. Over time, you'd like to think, and I think this will happen, it'll, it'll absorb into the communities that really need it. Some of the lower income communities that suffer from really damaging obesity. And that's when the food industrial complex and the drinks market really start to feel, you know, the, the, the boot on their neck.
19:22 Scott Galloway? And I think that's going to happen over the next 12 or 24 months. But you could see, when you see some stores like a Walmart that cater to a middle and lower income consumer, report that alcohol sales are off 6% year-on-year, or 8% or 11%, you're going to see those companies decline. Those companies are about to become the next cable assets. And that is, they're still going to be great businesses. They're high margin, they'll cut costs, but you're going to see consolidation. This is the new cable.
19:54 Ed Elson? Yeah, what you say about alcoholics there, I think is so true of food, too. Like, the food, the food industry relies on foodaholics. And there was this earnings call last week that I found.
20:07 Ed Elson? Pretty amazing from the JM Smucker Company. And this is the company that makes Twinkies and Ding Dongs and Uncrustables. It makes like all of the most heinous snacks in America. And the analysts were asking the CEO, this guy Mark Smucker, about this stuff. They were asking him about the threat of GLP-1 drugs. They were also asking about the political threat of RFK Junior and his crusade on processed foods. And the response from the CEO was just amazing. He said, quote, "As it relates to anything in the political domain, we believe very strongly that snacking continues. Consumers are going to continue to look for a way to reward themselves at different times throughout the day." So he's just like, you know, do whatever you want.
20:52 Ed Elson? Come up with whatever drugs you want. You can talk shit about about Twinkies and Ding Dongs all day, but we are a country of fat people and we are going to continue to capitalize on that, which I just thought was kind of incredibly honest from him.
21:08 Scott Galloway? Each year, maybe it's every other year, I speak to the folks at ABM Bet. They're super smart. It's a great company. They do a great job. They they've made good acquisitions. They have a portfolio of amazing brands. And my message this year is kind of be like, you're fucked and then you're fucked even worse. Because not only do you have GLP-1.
21:26 Ed Elson? But I can't believe these companies keep paying you to just walk into their boardrooms and tell them they're fucked.
21:30 Scott Galloway? Oh dude, they love it. They're like S and M fetish. They have an S and M fetish. I show up and go, you're fucked. And they're like, hit me again.
21:37 Ed Elson? That guy really tells it how it is.
21:39 Scott Galloway? You kidding? Well, but think about, think about it. They're surrounded by sycophants. It's like, oh, you're a genius. This is amazing. And, you know, and then someone comes in and goes, I think you're fucked. And this is why. And they're like, they're shocked. And they think, okay, maybe we should have that guy back. Because none of these, none of these ass kissers are keeping it real. But. The reason they're doubly fucked is one of my big consumer observations hanging out with the young people, the youngins, is whenever I go to these summits or these conferences or Coachella or everywhere, I'm like, no one's drinking. What's going on here? They're all high, but they're not drinking. And I even look at my alcohol consumption.
22:23 Scott Galloway? I love alcohol. I'm really, I'm a better version of me, a little bit fucked up. I absolutely, one of the reasons I work out is so I can drink. But as I've gotten older, I realize, okay, I need to reduce my alcohol content. So I do this thing where I take five milligrams. If I'm going out for a big night, Emily just started doing this. Daddy's gonna wanna, you know, have a little rhythm, be charming, be the charming Scott, not like get angry and upset and go home early. I take a five milligram edible and I'll have one or two drinks as opposed to six to eight drinks. And I gotta think there's a lot of people thinking the same way. And then I go to these conferences with young people and they got their mix of MDMA and 2C and they've got eyedroppers and they're doing all this weird
23:04 Scott Galloway? shit and drinking, you know, mushroom infused muffins and shit. And I just couldn't get over it. And I think I told you the story when I went on Summit at Sea and they take over an entire Virgin cruise ship. I went into the bar and I said, can I have a Maker's and Ginger? And he said, finally, someone drinking. And young people, I mean, not only the future, but they're, they're kind of the aspirational target. Other people look to young people for cues. So I think the drinks industry is the next cable network meltdown.
23:36 Ed Elson? We'll be right back after the break with a look at Google's breakthrough in quantum. If you're enjoying the show so far, be sure to give Prof G Market a follow wherever you get your podcasts.
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24:25 Speaker 01 Energía baja, falta de concentración, nebla mental? You might be dehydrated. Gatorade Zero Powders han sido diseñados científicamente para ayudarte a mejorar el balance de hidratación en el cuerpo. Hechos con la mezcla número uno de electrolitos, sin colores ni sabores artificiales. Shop now online or at retailers nationwide. Gatorade hydrates better than water. Is it in you? Signos de dehidratación leve y moderada. Consulta a tu médico si los síntomas persisten.
24:55 Speaker 02 This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior light beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer St. Louis, Missouri.
25:29 Ed Elson? We're back with Prof G Markets. Google has unveiled a new quantum chip called Willow, which outperforms the world's most advanced supercomputers. In just five minutes, Willow can solve a problem that would take a supercomputer 10 septillion years to solve. That's longer than the estimated age of the universe. While some scientists have hailed this as one of the decade's biggest breakthroughs, the chip currently has no practical application. So Scott, we're going to get your thoughts, but I kind of just want to start here with a breakdown on like, what is? Quantum computing. Please. And it's a little confusing, but just bear with me.
26:07 Ed Elson? So the key difference between quantum computing and regular computing is in how they process information. So a regular computer processes information using binary code. So it's a zero or a one, and these ones and zeros are known as bits. I think people know that. A quantum computer, on the other hand, processes information not with bits, but with qubits. And the funny thing about qubits is that they can be a zero and a one at the same time. This is obviously very confusing and strange, but I think the best analogy to think of this is to think of it like a coin flip. So imagine you flip a coin.
26:49 Ed Elson? A classical computer can only tell you whether it's heads or tails once the coin has landed. But with a quantum computer, it will analyze the coin as it's being flipped. And while it's flipping, it will calculate the probability of it being heads or tails, or in the case of computing, a one or a zero. So it's fundamentally a different way of analyzing information. And that's the key technical difference you need to know about what quantum computing actually is. Okay, enough with the nerd talk. Let's just talk about the practical implications of quantum computing. So there are three important traits, in my view. The first is that these quantum computers are exponentially more powerful than classical computers.
27:33 Ed Elson? And that is not hyperbole. As you increase the number of qubits, the compute power of a quantum computer increases at an exponential rate. That is not true of classical computers. So they're extremely powerful. Two, and this is really important, is that they make a ton of errors. And this has been the biggest problem in the field. Because it turns out that as that quantum computer tries to figure out if the coin's going to land heads or tails, it very often gets it wrong, which screws up the entire computation. And that's a huge problem, which leads me to the third important trait, which is it's highly impractical. Not only in the sense that it gets things wrong, but it's also just designed for these
28:16 Ed Elson? drastically complex questions, as you could probably tell at this point, that just don't really have a place in our world right now. Now, the reason this Google announcement is a big deal is because they've supposedly solved for the second trait that I mentioned, which is it makes a lot of errors with the Willow chip, this new chip they've come out with, the more qubits you add to the computation, the more accurate the computation gets. In other words, in addition to being crazy, crazy powerful, this computer, unlike other quantum computers, also gets things right. And that's the most important difference. That's why this is actually a really big deal, the fact that they have come out with this. So we will get to what this might mean
29:00 Ed Elson? for Google's business, but I'll just stop there in my review of what is quantum computing. Maybe you have some reactions.
29:09 Scott Galloway? What's interesting is the market seems to love it. I think because they thought this would help supercharge their internal efforts and also that it sort of signals that Alphabet still has, I've always said Alphabet's the greatest concentration of IQ in history since maybe NASA in the 60s or 70s. And this is sort of saying, them saying, you know, we still got it. And the market seems to like it, even though they're not entirely sure what the applications are. One of the interesting notes here, someone says, this is more shot across IBM's bow than it is across Nvidia's bow. But this seems to be a signal, I would argue this is more of a branding event for Alphabet. No one's
29:53 Scott Galloway? been able to say which business will this impact. This is just Alphabet has amazing IP and this should help across the entire, their entire ecosystem. But I still don't understand what are the consumer applications they'll launch with this? And how is that going to result in additional, additional earnings?
30:11 Ed Elson? There are some business use cases that Google hasn't really talked about, but the analysts and the people who are interested in this stuff are talking about. And I can just go through a few of them that I think could be really important. So one is healthcare. So unlike a classical computer, these quantum computers can simulate molecular development at mass scale. So in theory, they could revolutionize the pharmaceutical industry. At least that is what is being said about quantum computers. It's something that classical computers are not good at. The second one, this is the one I find most interesting is encryption.
30:52 Ed Elson? So this could massively affect Bitcoin. Because cryptography is predicated on binary code. That's how the Bitcoin mining system works. And that's what makes it so impenetrable. But with a quantum computer, you could essentially break any encryption system in the world, including Bitcoin. Now, to be fair, to mine all the Bitcoin in the world today, you'd need a quantum computer with a capacity of 13 million qubits. The Willow chip has a qubit capacity of only 105. So we're not there yet, but theoretically, we could get there.
31:33 Ed Elson? And that is also why we saw a dip in the price of Bitcoin the day this was announced. Because I think a lot of people in Bitcoin world went, holy shit, what if this thing could crack into the Bitcoin network in a day? It can't yet, but at some point, it could.
31:51 Scott Galloway? I hate to say it, I would enjoy that. I know that's an awful thing to say.
31:55 Ed Elson? I would enjoy it too.
31:56 Scott Galloway? If all Bitcoin became hackable. Why does that make me happy? Why does that make me happy? Oh, gosh.
32:03 Ed Elson? I think those are my two most interesting use cases. My takeaway here, this could be a really big deal, but major emphasis on could, because it's not totally clear to anyone what the timeline on this is. And we hear about a lot of powerful technologies out there that could revolutionize industries. We don't know when it'll happen or what it'll look like. So my prediction downstream of that is that I think quantum is going to become the new corporate buzzword. I think it's going to become the new vehicle to make these very, very big promises that could pan out, but similar to crypto and similar to AI, you're not accountable to delivering actual results because it's so far off in the future. So this, to me, is like a CFO's dream.
32:48 Ed Elson? Like, if you can just build a little quantum research lab in your company, you don't even need to generate revenue from it. You will likely drastically increase your multiple overnight, and it does not need to be reflected in your financial results. So my takeaway from this, I think this is real, I think this is cool, but I predict a huge hurricane of corporate bullshit.
33:10 Ed Elson? That is going to come rolling in hard, and I think the name of that hurricane will be Quantum.
33:14 Scott Galloway? I don't know if you knew this, but here at Prop G, we raised $7 billion two years ago, and we've been experimenting with quantum computing, and it's really starting to pay off. Actually, you're not a real person. Actually, it'll be AI. Look, I did what I always do. I turned to AI and I said, give me the difference between AI and quantum computing. And they said, okay, AI is a simulation of human intelligence and machines that can learn, reason, and make decisions. Example applications: image recognition, natural language processing, autonomous vehicles, and recommendation systems. Quantum computing leverages the principles of quantum mechanics, including superposition and entanglement, to perform calculations much faster than classical computers for certain problems.
33:57 Scott Galloway? Example applications: cryptography, optimization problems, material science simulations, and drug discovery.
34:05 Scott Galloway? So, yeah, there you go. And they use this word, qubits, all over again. So, more importantly, how do people invest around this? I heard we had in the notes, Rujeti Computing. They make chips for quantum computing, much like Nvidia builds chips for AI, started by an IBM quantum scientist. That stock is up sevenfold this year. Another quantum computing bet is IonQ is pursuing a different type of quantum computing than Google, one that could potentially be better for precise measurements in fields including aerospace and defense. IonQ is already monetizing quantum, secured a $55 million contract with the United States Air Force Research Lab this year, and offers quantum computing through Google Cloud, AWS, and Azure.
34:51 Scott Galloway? Revenues have increased 90% this year. The stock is up 150% year-to-date. So, this feels pretty cutting-edge, but I love what you said, that there's going to be now quantum washing.
35:08 Scott Galloway? But also, I wonder if this is, I wonder if these guys, as much as their stock has been up, I wonder if this quantum computing sector is going to register anything resembling the kind of AI Lollapalooza in terms of value here.
35:24 Ed Elson? We'll be right back with a look at the World Cup in Saudi Arabia. If you're enjoying the show so far, hit follow and leave us a review on Prop G Markets.
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37:15 Ed Elson? We're back with Prof G Markets. Saudi Arabia will host the 2034 World Cup, marking a key step in the country's plan to establish itself as a global leader in sports. Through its sovereign wealth fund, the country has invested billions in a range of sports, including golf, boxing, esports and Formula One. And the fund is also close to finalizing a one and a half billion dollar deal for a 6% stake in the PGA Tour.
37:41 Ed Elson? So finally, we can stop talking about quantum computing, Scott, and get back to what we're really good at, which is football. We've talked a lot about Saudi Arabia on this podcast. It's expanding influence in the sports world. Your reactions to Saudi Arabia? I'm not sure anyone thought this wouldn't happen, but Saudi Arabia is officially the host of the 2034 World Cup.
38:04 Scott Galloway? Well, first off, there are few organizations that have this veneer of credibility that are more corrupt than these international sports organizations because they operate in this sort of nether nether land, the International Olympic Committee. And FIFA really takes the crown. So if you were going to have countries bid, you would want to avoid some sort of conflict? Well, no. FIFA announced a four-year, $100 million sponsorship deal with Saudi Aramco, Saudi Arabia's national oil company, the most profitable firm in the world earlier this year. So my guess is, my guess is that was a kind of a down payment. And the rest of the world said, okay, we can't.
38:48 Scott Galloway? I mean, when you show up and you're bidding on a piece of art and Bill Gates shows up and says, oh, it's my dream to own this piece of art. You know, you've like, you might as well go home, right? And this is what's happened here. I think this may be the first time that there was only one nation bidding. And they're basically kind of, I think every other nation that was thinking about bidding thought, we're not going to pull 1,100 people together and former governors and get everyone jonesed up to put together the ultimate bid and then host you first class, the FIFA, the FIFA corrupt committee that comes over and they get all these great dinners. And they've said, no, we're just not, we're just not going to bid. And also, realistically, it's worth more to the kingdom than any other country in the world because these are coming out events.
39:33 Scott Galloway? This is a way of highlighting, we're for real. You should come here. I remember the Olympics when it was the opening ceremonies in Barcelona. And I had never heard anything about Spain or Barcelona. And then they had this brand new, beautiful stadium and they had this runner, the lighting of the Olympic torch. And it was this ridiculously hot guy wearing no shirt. And he's running and he stops outside of the stadium and you see this amazing stadium and the guy picks up a fucking bow and arrow. And then he pulls it back and you see his unbelievably ripped torso. And then he looks at the camera and then he nods and he detenses the bow and arrow and he puts the arrow down and he inflames it.
40:18 Scott Galloway? And then he pulls it back and he pulls the thing back for dramatic effect, like it's like about to snap and he fires the thing. And this fucking flaming arrow flies from outside of the stadium, over the top of the stadium into like this six foot semicircle of incendiary, lights it and then it runs up to the Olympic flame, torches it. And I'm like, I'm going to fucking Barcelona. I mean, it was just so amazing. And then most recently, the Paris Olympics have brought kind of new riz to Paris. I remember watching some of the sports and at the Olympics and thinking, it's time for me to get back to Paris.
41:03 Scott Galloway? Those people, they just understand style and grace and romance. These are coming out parties. I don't think, I would bet 97% of the world's population hadn't heard of Qatar until the World Cup. So Saudi Arabia has all of these immense projects coming online. They want to transition to a knowledge-based economy, educational institutions, tourism, services. And this will be their way of bringing the wealthiest people in the world and the eyeballs of the rest of the world to the kingdom. And that's worth a lot of money to them. And it wasn't, everybody knows about the United States. Most people know about Germany.
41:45 Scott Galloway? So while they might be willing to spend 10, 20, 30 billion, I mean, I gotta think, if Qatar spent a quarter of a trillion dollars or 250 billion, I wouldn't be surprised if the kingdom spends half a trillion dollars on these games. All I know is, We are going it and it's going to be amazing. It's going to be amazing and and I'm betting on I think Team England is finally going to have their do here.
42:06 Ed Elson? It's definitely going to happen.
42:07 Scott Galloway? Definitely. It's coming home.
42:09 Ed Elson? It's going to come home.
42:10 Scott Galloway? It's coming home.
42:11 Ed Elson? What you're describing there is is, I mean, you said being on the world stage like that is worth a lot of money to them. I think this is the interesting question here. It's like, what is this worth? Is it worth it to do this? And if you look at the actual ROI, the return on investment of these global sports tournaments, there's this study from the University of Lausanne, which looked at every Olympic Games and every World Cup between the years 1964 and 2018 to answer that question. And what they found is that 95% of the time you lose money. And the average ROI for the Olympics and for the World Cup was negative 38%. There were only three competitions in history that turned out to be profitable,
42:55 Ed Elson? and those were the 1984 LA Olympics, the 2010 Vancouver Winter Olympics, and the 2018 Russia World Cup, and every other tournament lost money. Now, to be fair, this is only focusing on the revenues that can be directly attributed to the tournament. So it's the ticket sales and the broadcasting rights and the sponsorships, et cetera. What it doesn't measure is what you're talking about, which is the soft power, the idea that you're seeing these countries and then maybe you want to go there and you want to spend some money there. I don't know what it is. So my question to you is on soft power because I'm naturally a little skeptical of soft power because of the fact that it is so hard to measure.
43:39 Ed Elson? And I get the feeling that we get a little carried away with the glitz and the glamour and the fame of it all. And so I guess my question to you is like, How does being on the world stage actually translate into legitimate economic activity and like long-term GDP growth? Because I get the sense that you believe this is actually a very good idea economically for Saudi Arabia.
44:03 Scott Galloway? Oh, it's enormous. The last time I was in Riyadh, what I noticed was they put on a lunch and invited me and they had all these entrepreneurs and I thought I'm going to meet all these Saudis. And I did meet some domestic entrepreneurs, a bunch of kids who had gone to US schools and then come back to Saudi. But what I was shocked by, I met hundreds of entrepreneurs who were like, yeah, I started a specialized glass company, you know, glass that goes on components and iPhones in Seoul. And I moved here because I thought the quality of life would be better. And basically, the kingdom guaranteed me that they would buy everything I could produce. I met all these
44:42 Scott Galloway? entrepreneurs from Germany. The bottom line is money and growth are a flame and human capital, especially young human capital is a moth. What you said about soft power is that companies that demand specific attribution oftentimes just shouldn't be in the business of brand building. Because the thing about brand building is that Philip Morris was never really able to directly, they knew that convincing people that if they smoked Marlboro Reds, that they could relate to and were more like a man with a deeply chiseled jaw riding an Appalusa. But they could never,
45:22 Scott Galloway? they could never reverse engineer a specific billboard to 95-point gross margins on a pack of cigarettes that people are paying four bucks for that costs 20 cents to produce. And brand building, quite frankly, is a little bit about taking a leap of faith, believing that if the intangible associations surrounding a product, a service, or even a nation will create more awareness, more trial. Because you can bet MBS looks at Dubai and what they've built there and says, fuck, how did we let that happen? We're a bigger economy. We have more money.
46:00 Scott Galloway? I'm pretty sure that what the mandate he's given to his ministers of infrastructure or development is like, I want Dubai to seem like a fucking cow town after we're done. I wanted, I want everyone coming here. They need, the, the, the good news about The Kingdom of Saudi Arabia is they have what feels like infinite capital right now. The bad news is it's running out in 30 or 40 or 50 years and they're smart. They know it. So they're like, we need to transition from a fossil fuels based economy to a services tourism based economy. And that's the bad news. We need to do it. The good news is you have a blank check to get it done. But oh, branding is all about taking a leap of faith on these intangible emotions.
46:42 Scott Galloway? And I'll bet the year after the world cup, you're going to see tens of thousands of small and big businesses and the key to all this, the secret sauce, human capital go, you know, honey, would you be willing to move to Riyadh? And people go for the first time, yeah. You know, the bottom line, when you're, when you're worth billions of dollars, spending money on whatever it is, you know, a finely tailored suit, it doesn't mean anything. Even if that finely tailored suit is 10,000 bucks and no one would pay for that, it doesn't matter. They have the money. What they need is to transition their economy. So I actually think it's like, this is probably going to be a good investment, distinct of how much it costs.
47:26 Ed Elson? Well, I think, I think the distinction there is like, I agree with you. When you have a lot of money, it does not make, it's not a big deal to buy a $10,000 suit, but it would be a little crazy to buy a million dollar suit. And we have no idea how much they're going to spend on this thing. If you look at how much Qatar spent, they spent $220 billion. I would bet that Saudi Arabia is going to spend way more than that. So I think the way you frame it there is, is, is totally accurate. It's like, they know that the immediate, this is immediately going to be in the red from an expenses perspective, but they're looking at the long-term payoff and the long-term benefits.
48:09 Ed Elson? And the way I would, let's say they spend like a quarter of a trillion dollars on this. I think they'll spend more, but let's say they spend that much. That is a quarter of a trillion dollar billboard, essentially. You're basically, it's an, it's a giant ad. And I think the question is, is that ad worth it? And I feel pretty somewhat convinced that it might pay off, that it might be worth it based on your analysis there. But I think the key takeaway for me is like, this is no more than an ad.
48:39 Scott Galloway? No more than an ad? That's everything. That's, that's awareness, unearned margin. And let me just go back to brand building. I don't know what Russia spent on the World Cup, dramatically less than 220 billion, but I went to games in Moscow and St. Petersburg. And I remember thinking St. Petersburg was arguably one of the most beautiful cities I'd ever been to, walked around, there'd be squares where old people were dancing. And I just had such a positive impression of Russia and specifically St. Petersburg. Now, them incarcerating Americans on trumped up charges, that's sort of like, okay, I'm not going back to Russia for a while.
49:20 Ed Elson? That sort of ruins the ad, exactly.
49:22 Scott Galloway? These actions on a political stage can wipe out a quarter of a trillion dollars in branding.
49:29 Ed Elson? Yeah. Well, let's just take a moment to talk about the controversies around this, because that's important to the brand here, too. I mean, if people think that this was rigged, as many people do, or they think that Saudi Arabia is an unethical country, that's important to this conversation, too. But I'm just going to start with this bid evaluation report from FIFA that they released, which I just found so funny. It's this report where they assess all of the viability, the viability of all the possible host nations. So first off, they gave Saudi Arabia the highest viability score ever, which is hilarious. They said that from a commercial
50:08 Ed Elson? standpoint, the bid is, quote, "very good." But my favorite was their evaluation of the human rights risk, which they determined was, quote, "medium," which is also hilarious.
50:23 Scott Galloway? Human rights risk of the games or human rights risk of KSA?
50:27 Ed Elson? Of the World Cup, of them hosting the World Cup.
50:29 Scott Galloway? Medium?
50:29 Ed Elson? Human rights risk, medium. That was their analysis. But they ultimately landed on the greatest score ever given in the FIFA bid evaluation report.
50:40 Scott Galloway? Yeah, it's called money, the greatest score.
50:42 Ed Elson? Exactly.
50:43 Scott Galloway? I'll go. 100% I'll go. I can't, I can't wait. I literally can't wait. And also, I actually quite like the Kingdom and think they're doing good things, but.
50:53 Ed Elson? Like, people.
50:56 Ed Elson? People hear your views on Saudi Arabia and they get upset when you defend them. And the reason they, I mean, the things that people focus on, there's one, the killing of Jamal Khashoggi, we've talked about that, there's migrant worker conditions, I would argue that that's in basically any, any country.
51:15 Scott Galloway? You're leaving out treatment of women.
51:16 Ed Elson? Yeah, there's discrimination of women, which they are improving on.
51:19 Scott Galloway? Yep.
51:20 Ed Elson? But, you know, still not great. But then there's also the discrimination against gays, which they are definitely not improving on. So the penalty for homosexuality in Saudi Arabia today is still, in some cases, death. And, you know, in combination with the fact that a lot of people think this election, this voting system was rigged, which it probably was, they were the only bidder. I think a lot of people are saying there's foul play here. What I would say, I think we all agree there is foul play here in some sense. The question is, how bad is it? Like, how bad are the human rights abuses and how bad is the corruption?
52:03 Ed Elson? And is it bad enough that we will start to see mass boycotting of this World Cup? Because on this podcast, like, we're not going to evaluate the ethics of things, we're going to evaluate the economics of things. And so what I'm interested in, and I'd like to get your view, is do you think the human rights stuff and the corruption stuff is bad to the point that people are actually not going to go to this thing and they're not going to watch it? Or is this another one of those situations where we talk about it a lot online, maybe we see some protests, but at the end of the day, everyone shows up and everyone makes money?
52:39 Scott Galloway? Oh, entirely the latter. And also, I just, this stuff's important and, and public pressure and international pressure is important. And.
52:53 Scott Galloway? I just, I worry, one of the things I don't like about the most recent election, I have trouble waving my finger in anyone's face around women's rights right now. We're the only nation that's taken away a woman's right. Typically, every other nation in the world, when they grant women rights, they get to hold on to them. And the Kingdom right now, in my opinion, is reforming faster than any nation in the world. And every six months, MBS rolls out new reforms. Women in the Kingdom used to need the permission of their husbands to travel. They've done away with that. They couldn't drive. They can now drive. That may not sound like a big deal, but I'm looking at the slope of things. In addition, I want to be clear. I think they murdered Khashoggi.
53:38 Scott Galloway? The question is, all right, they did it. I think they paid a huge price for it. Does that mean we're never going to do business with them again? And let me go even further. I think there's less antisemitism in the Kingdom right now than there are pockets in the United States. I think the Kingdom is probably going to normalize relations with Israel. This is a complicated issue. I don't want to pretend to have moral clarity around this. The question is, do I think people are going to go and corporations are going to headquarter there? Absolutely. This will be the most successful World Cup in history. Because at the end of the day, Ed, and this isn't the way the world should be, it's the way the world is, money wins. And they'll put on an amazing show and they will clean up their act, or they will try to.
54:23 Scott Galloway? And also, it begs a bigger point. Are human rights going to be better or worse if the World Cup is in the Kingdom? I would argue they're going to be better. I would argue when they are on a global stage, that they have more motivation and incentive to improve, to continue to improve and head in the right direction. I'm more around engagement than sitting and waving your finger as, you know, a 15-year-old in Mississippi who's raped, doesn't have access to terminate a pregnancy. We have gotten so far afield here, Ed. Let's go back to talking about Qubits. Qubits.
55:03 Ed Elson? Yeah, I think just to summarize what you're saying there, it's like...
55:08 Ed Elson? They are trending in the right direction. You cannot argue that. They definitely are on the right trajectory when it comes to human rights. Are they doing that for ethical reasons? Probably not, but I think they've looked at the rest of the world and they've seen that generally speaking, a nation that has strong human rights laws and that treats its people fairly, generally speaking, those countries get rich. I think that's pretty much the play here.
55:33 Scott Galloway? Hundred percent.
55:33 Ed Elson? Okay, we want to participate in this economy, so we're gonna go lean into human rights, not because we necessarily want to for our people. I genuinely think that, I think we're gonna do it because it's gonna make us some good money and that's worth it. I think that's what's gonna happen here. Let's take a look at the weekend. We'll hear the Fed's interest rate decision for December and we'll also see earnings from Nike and FedEx. Scott, do you have any predictions?
56:00 Scott Galloway? Well, my prediction is that Meta's next earnings call, which isn't until February, is gonna be just blow away again, expectations because, you know, that notion that when a, if you put a frog in a boiling water, it jumps out. If you put a frog in water and then turn the heat up, it doesn't know it's being boiled to death. I don't think we realize just how bad the rage has become in the United States. And, and as someone, I only spend probably two weeks every two months there. So I, it's like when you come home, Ed, and you haven't seen your kids for a while, and this was like one of the most rattling things that happened to me when I used to go on business trips for two or three weeks. I could notice, I would always poke my head in when they're sleeping and a couple of
56:45 Scott Galloway? times I'm like, oh my God, he's grown. And that would rattle me that I was spending too much time on the road, whereas when I'm with them every day, I don't perceive them growing because it's incremental. The interrupted cadence of living in London and only being in the US once every couple of months, I have noticed a dramatic increase in what I'll call community rage or public rage. Everyone is pissed off, everyone is dissatisfied with each other, with policies, with government, with the world. And I think that is the primary signal for profitability at Meta. Because Meta has figured out that it's not sex that sells in the world of marketing, it's rage.
57:29 Scott Galloway? The amount of rage. That has been fomented and monetized by Meta has hit a new high, I believe, around the election. And so the proxy or the litmus test or a decent blood pressure test for rage in the US is the profitability of Meta. And it is fucking off the charts right now in their largest market in the US, which I believe means they are going to report a just staggering quarter in their next earnings call in February. So my prediction, another massive beat from Meta, based on the fact they have figured out a way to not only incent, but monetize rage, discord and polarization in the United States, which is at record levels.
58:15 Ed Elson? This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research lead. Jessica Lang is our research associate. Drew Burrows is our technical director. And Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Thursday for our conversation with Morgan Housel, only on Prof G Markets.
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