OpenAI Is Spinning Out Of Sam Altman's Control

Scott Galloway and Ed Elson unpack OpenAI's turbulent week and assess the biggest threats facing the company. They discuss why China's latest AI models could pose a serious challenge and why Scott thinks there might be a leadership shake-up at OpenAI. Then, they examine the growing narrative that the market is becoming more diversified, arguing that AI's influence extends far beyond Big Tech, and identify the sectors they believe are least exposed to the AI trade. Subscribe to the Prof G Markets Youtube Channel 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. 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

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• 0:01Speaker 00

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• 1:29Scott Galloway?

  Today's number 60. That's the percentage of Gen Z people who say they would find someone extremely attractive if they never used AI to make personal decisions. I'll tell you, Ed, I am just sick of Gen Z's arrogance. They walk around and act as if they rent everything.

• 1:56Scott Galloway?

  Have you heard from Michael Semblis?

• 1:59Ed Elson?

  I may or may not have heard from him, but I love the direction that we're heading in and I don't want to change a thing.

• 2:04Scott Galloway?

  It's because you're some Princeton prude with like, wants a Pim's cup, doesn't know how to drink beer, tell a good joke.

• 2:12Ed Elson?

  You've had better dad jokes. I'll say this one was, this one was okay. Maybe six out of 10. You've had some bangers. Last week, I forget what it was, but it really, it really hit the spot. So we're, we're trending in the right direction. So I'm not going to tell you what my correspondence with Michael Semblis has or hasn't been. All I know is that he's been a blessing to the show.

• 2:32Scott Galloway?

  I'm not going to say anything.

• 2:35Scott Galloway?

  How are you, Ed? It's not coming home.

• 2:40Ed Elson?

  Yeah.

• 2:41Scott Galloway?

  I agree.

• 2:41Ed Elson?

  I'm not going to lie.

• 2:43Scott Galloway?

  I hear you.

• 2:45Ed Elson?

  I, I'm struggling to find any silver linings or any positives out of that World Cup.

• 2:50Scott Galloway?

  Well, it's not like you flew to the U.S. with your entire family, thinking you were going, going to go see England in the World Cup final. Now I'm going to see Yamal and Messi, which granted is great soccer, but do you think it's bad for, I'm going to wear my team England jersey. Do you think that's bad form to wear that to the final or do I show my loyalty?

• 3:09Ed Elson?

  We'll take any support we can get. I mean, you might get heckled and people might call you a wanker, but that's okay.

• 3:14Scott Galloway?

  Well, that's called social media. That's called me. That's called, that's called a weekday for me, Ed. Have you read my comments?

• 3:22Ed Elson?

  You're used to it. Yeah, it is. It, I gotta, I mean, it's hard to describe that feeling of just pure disappointment, but something I've been thinking about.

• 3:32Scott Galloway?

  It's because you're young. Trust me, you'll get used to it.

• 3:36Scott Galloway?

  Yeah. Have I told you about my divorce, my companies, my general, my general, like every time I look in the mirror now, just the horror and disappointment.

• 3:45Ed Elson?

  Just to give you my sort of takeaways on just being an England fan and also just being a football fan in general. Something I've been thinking about is it's so annoying how much worse it feels to lose.

• 4:01Scott Galloway?

  Enjoy it as to win?

• 4:02Ed Elson?

  Yes. Losing the, the intensity of the feeling of losing is so much greater than, than the feeling of winning. I mean, you know, we went to the, to the England game and saw Norway. We had a great experience. I had an amazing time. Don't get me wrong, but we got the win and then I'm kind of like, okay, like onto the next one. Great. That semifinal loss, I couldn't dig myself out of the hole. And you never feel that way when you win. And what is that about human psychology?

• 4:29Scott Galloway?

  That's alcohol. So, no, I'm serious. When I was, you know, when I was your age and I drank, it'd be like six hours of euphoria with a 10 minute hangover, a couple of Advil, a Diet Coke and boom, I was ready to drink again. And as I've gotten older, the euphoria shrunk and the hangover is, is increased. So just so you know, you're going to have more of that diminishment of upside with a dramatic expansion. There's, I, I get excited about very little anymore, but I'm worried about fucking everything. Who are you rooting for? I don't even know who to root for. Well, I know who I'm rooting for in the final, but it feels like, it literally feels like getting a handjob from my cousin at Thanksgiving. It's just not nearly what I was hoping for.

• 5:11Ed Elson?

  Yeah, well.

• 5:12Scott Galloway?

  I don't know where that came from. I don't know where that came from.

• 5:19Ed Elson?

  I like how I just kind of didn't really acknowledge, just move on because it's kind of normal at this point.

• 5:24Scott Galloway?

  Who are you rooting for in the final?

• 5:25Ed Elson?

  Look, to be honest, I, I don't like either of these teams. I, I don't, I, I think.

• 5:30Scott Galloway?

  You don't like Yamal?

• 5:31Ed Elson?

  I used to like Yamal, but something I've been thinking about is my problem with Argentina is my problem with Spain now is both of these teams are filled with very, very arrogant people. And the celebrations, I don't know if you saw the celebrations of the Argentina players after the England game, but they put up this sign saying the Falkland Islands are ours. And the way that they celebrated after the game, like there's just a sense of arrogance. I think Messi is an exception, but the rest of the team and the rest of the players, the way they carry themselves, they're just not very humble. The same is true of the Spanish team. I used to love Lamine Yamal because he was this kind of cute kid with braces who sort of, no one knew why he was so good, but he just happened to be this incredible phenomenon.

• 6:13Ed Elson?

  Now he's kind of bought into his own hype and you can sort of see him getting that sense of arrogance. I can feel someone saying the same thing about me, but regardless, I wanted quiet, English, humble people to go all the way and to do it, do it for us. I wanted the Dan Burns and the Anthony Gordons to win. And instead it's the superstars. It's, it's the same old, same old. And I wanted to see, I wanted to see someone else. I wanted to see someone else rewarded for being humble. And that's not what we're going to see. So I, I'm not going to support either of these teams. Messi's the greatest player in history. He's the GOAT. If he wins this, then it'll be kind of nice that we'll have like just a, and a conclusion

• 6:57Ed Elson?

  to that debate, the undisputed GOAT. But I really, I really can't get excited about either of them.

• 7:03Scott Galloway?

  I didn't like the way the game ended either. I, I didn't, the world, the, the vibes at the end of that game were distinctly different from the vibes at the end of other games. I was kind of disappointed.

• 7:12Ed Elson?

  It's, I mean, at this stage, there's so much wrapped into it. Emotion, politics, patriotism. I mean, it's very, it's very intense. Plus that's such a historic game with the hand of God and Maradona in 1986. I mean, there was a lot in that.

• 7:28Scott Galloway?

  How much joy did we get from team England though? I'm actually at that stage where I'm, I really am appreciative of the players, the coaches and the fans, because I got so much joy.

• 7:38Ed Elson?

  Hundred percent.

• 7:38Scott Galloway?

  The game I went to with you, the games I watched with my boys. I just thought, I thought that team was just, and in typical British fashion, they're just going to be second guessing everybody and shitposting the coach. They had an amazing, I think they had an amazing tournament.

• 7:52Ed Elson?

  I agree. And everyone's saying that he made the wrong decision by putting on the defenders. It's the same decision he made against Mexico.

• 7:58Scott Galloway?

  Take it to your fantasy football league.

• 8:01Ed Elson?

  Let's give the guy a break is my view. We'll get shit posted in the comments. That's okay. We'll get over it. We have a lot to get into here, so I'm going to launch us into our first story.

• 8:13Speaker 06

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

• 8:20Ed Elson?

  It was another brutal week for OpenAI. We've discussed the company's hell weeks before. This one might have been one of the worst yet. The headlines kept piling up. Apple first sued OpenAI alleging that it stole intellectual property. The startup announced it is shutting down its Atlas browser less than a year after its launch. Its president of applications, Fiji Simo, said she is stepping down. Its first AI device leaked and a movable speaker wasn't exactly the reveal that many people were hoping for. The company was also reportedly caught selling advanced AI models to Chinese firms blacklisted by the Pentagon. And then there were the financial and the competitive pressures. According to eMarketer, OpenAI's ad business is on track to miss its own forecast by 90%.

• 9:05Ed Elson?

  S and P also recently downgraded Oracle's debt to triple B minus, just one notch above junk status, citing OpenAI as a key credit risk, end quote. At the same time, Anthropic is reportedly gearing up for investor meetings ahead of a potential IPO as soon as October. So it appears Anthropic will win the IPO race. Plus, DeepSeek, the Chinese competitor, is preparing for its own IPO and it could file as early as this year. A successful public debut could make it even harder for OpenAI to attract capital. So Scott, so much went wrong for OpenAI at this point last week.

• 9:47Ed Elson?

  And you can feel the schadenfreude on all sides of the spectrum here, because in a lot of ways, they've alienated the left from a political perspective because of cozying up with Trump after there was the falling out with Anthropic. At the same time, they're also kind of alienating the right. We've seen that Elon Musk has been shitposting, Sam Altman, they're alienating, alienating everyone. Then we get this Apple lawsuit where Apple accuses OpenAI of being, quote, rotten to its core. They said that their behavior of stealing hardware secrets was, quote, normalized and exemplified by leadership and was, quote, the tip of the iceberg. So that wasn't very good. We have the Atlas browser shutting down. We have Fiji Simo stepping down. We have the Oracle downgrade.

• 10:31Ed Elson?

  We have OpenAI selling its models to these blacklisted Chinese companies, which doesn't put it in good books for the government. And that was of course kind of one of the only edges that it had over Anthropic. A lot to get into, a lot went wrong. Your reactions?

• 10:46Scott Galloway?

  More than just the headlines, what I'm thinking about is the pattern here and that every bubble seems to kind of pop in the same order. First, the applications disappoint, then the infrastructure gets overbuilt, and finally capital markets catch up and close. At the turn of the millennium, you know, pets.com failed before WorldCom and today the cracks are showing at OpenAI and the next is the infrastructure. OpenAI is reportedly worth over a half a trillion dollars, yet almost every major narrative has flipped just in the last 60 days. Consumer products are struggling. Management turnover is accelerating. Monetization is proving harder than people expected and competitors aren't dying. They're lining up to go public.

• 11:31Scott Galloway?

  So it's becoming sort of, we used to think they were spending as if this market's going to be huge and it's going to be winner take all with justifying this drunken intoxicated spending. But it's become capital intensive, brutally competitive and increasingly commoditized. And the real risk isn't that OpenAI loses, it's that nobody wins enough to justify these valuations. And we see an unfurling of the collapse from B to C to B to B to infrastructure similar to 99. And, you know, again, history doesn't repeat itself, but venture capital sure as hell does. And that is, it is massively overspent here and these valuations are going to come down dramatically.

• 12:16Scott Galloway?

  But I've, you know, I've always said, oh, it feels like 90, you know, you want to say it's 99, it's probably more like 97. This does feel like Q4 99 and then March of 2000 is now in, you know, in plain sight.

• 12:31Ed Elson?

  You were saying when we were talking about this offline, that you think that we're going to have to see a management shake up here, just based on everything that Sam Altman's gotten wrong. And I think, I mean, there is the AI bubble question, which is like, does the AI business model actually make sense if you're in the front end AI business? And that's something that has been kind of an open debate. I mean, if we look at the financials of OpenAI and Anthropic, these companies that are losing a lot of money, you would think it doesn't really work right now. Maybe it'll be kind of the Uber or the Amazon where they spend all of this money and then eventually they figure out how to make more money than they spend.

• 13:13Ed Elson?

  And eventually it turns into a viable business, but that's kind of an open debate. And I don't blame Sam Altman or his execution on that reality. I mean, the reality is that compute is very expensive, building the data center is very expensive. And so far, it's been very hard to market a viable product, which is commensurate with the costs. But there are some executional mistakes that we've seen from Sam Altman. One would be he's trying to launch this hardware business and apparently he's been stealing from a company that he had previously formed a partnership with. Like, that's something you kind of have to remember about OpenAI is they used to be

• 13:56Ed Elson?

  partners with Apple. The plan was that OpenAI was going to power Siri. And then Apple turns around and announces, actually, no, we have a new partner. It's Google. And now we learn why that is. It's because Apple thinks that OpenAI is quote rotten to its core and that they have been stealing trade secrets and poaching their employees. So just from like a relationship management perspective, like clearly that is a huge mistake. There was the issue with, we're launching all of these side projects and now we're saying that none of these side projects are actually panning out, like the Atlas browser and like Sora, the image generator, which they shut down as well.

• 14:34Ed Elson?

  I mean, just in a remarkable way, Sam Altman is getting the entire world to hate him. And it's almost like nothing he says or does can go right. And I've never really seen that from a CEO, a CEO who has become so unlikable, not to one faction of the country or one faction of the market, but literally to everyone. I can't find really anyone who is supportive of this company, who doesn't have a financial interest in this company. And that's wild from a CEO perspective.

• 15:13Scott Galloway?

  I mean, there's just so many things here. AI has been the most poorly managed brand over the last 12 months. And I feel like the coup de grace of head up your ass brand management was deciding that Kevin O'Leary should be the spokesperson for data centers.

• 15:24Ed Elson?

  I think he made himself the spokesperson, but I agree, they should have shut him down quick.

• 15:30Scott Galloway?

  He should have said, boss, if you want this thing built, just shut the fuck up. But like the, I think the thing that really hurts here in terms of credibility and provides legitimacy to what is often perceived as just competitive wrangling is the lawsuit from Apple. And they're claiming that OpenAI stole trade secrets by poaching over 400 Apple employees and OpenAI had recruits bring Apple prototypes, which by the way, isn't illegal on its own, recruiting employees. There's been laws passing, you can't have Steve Jobs and I forget who it was, Bill Gates had a kind of a gentleman's agreement that later surfaced in emails that they wouldn't poach each other employees. And that's non-competitive. All that is, is a transfer of power from employees who want multiple vetters on their labor and that that's illegal.

• 16:15Scott Galloway?

  You're allowed to recruit other employees unless that employee is an executive and assigned a garden, you know, garden leave or non-compete, which you have to compensate them for. But anyways, the strange thing or the irony of the suit is that Apple has a reputation in the industry for stealing other companies' ideas. And they're one of the most frequently sued tech companies for patent infringement. And the reality, this goes to a larger, and I'm not saying they are, they aren't guilty. But the reality is the majority of companies that have outside shareholder gains, and this is true of an economy that's growing faster than 5% a year, they're essentially thieves or probably more accurately a strip miner. And that is, in the 19th century, the US stole manufacturing technology for textiles and

• 17:00Scott Galloway?

  littered the eastern seaboard with, with, with manufacturing technology and capabilities and even actually kidnapped artisans from Europe. China has been, has built an entire economic model on IP theft. And so most of these guys are suing each other, but when Apple comes for you in this case, their communications are very good. It's not an individual, they're not getting into a pissing match with this ego versus this ego. They're just saying, look, they're laying out an illegal kind of a droid adult format. This company is guilty of, you know, kind of mass theft, if you will. But it is really incredible how the momentum has flipped on OpenAI.

• 17:36Ed Elson?

  And now we know that Anthropic is scheduling its IPO talk. Supposedly that listing is going to come in October, which is very soon. That's only three months away. And, you know, there was a debate of like, who's going to win that race between Anthropic and OpenAI? Who's going to sort of capture all of the energy and the capital in the room? It's clear that Anthropic is going to win that race. In fact, if we look on Calci, the odds that they will announce an IPO before 2027 are up to 74%. So this Anthropic IPO is happening. OpenAI is tabling theirs. But then the fact that in the same week, we also learned that DeepSeek is planning its IPO.

• 18:21Ed Elson?

  To be clear, we don't really know anything about it. It's very confidential. We don't really know anything about their financials, but they're out there and they're planning this. And it seems like the debate used to be, you know, who's going to get out first? Is it going to be Anthropic or OpenAI? That's not a question. Now the question is, will DeepSeek get out before OpenAI? And that poses a whole other slew of questions and risks for the company. I mean, what do you make of, what do you make of that?

• 18:53Scott Galloway?

  Well, I think the biggest story that has, that it's got almost no, no coverage is that is what I think is, I would refer to affectionately as, is AI dumping from China. And that is three Chinese models went from less than a third of all traffic in late 2025 to about two thirds recently. And it's much less expensive. I mean, essentially what's happening in the AI market has condensed what's happened to industrial economies in Europe. But instead of it taking two decades, it's taken two months. And that is they steal the IP on a cell phone tower from Siemens and then they manufacture it with cheaper labor and they sell it back to telcos for 40 cents on the dollar.

• 19:35Scott Galloway?

  And there are a lot of regional LLMs in China and they have access to cheaper power, cheaper chips, less power consumptive, and they're also subsidized by their own local governments. And I believe, and I said this before, that she has a vested interest that the ultimate Ohio class submarine to be flipped against us is to engage in AI dumping. And I think it's happening. And you hear stories of VCs encouraging the portfolio companies to use these open way Chinese models. But you're seeing, the best business model in history is IP theft. A close second in terms of a pricing mechanism is 80% of the market leader for half the price. And DeepSeek and these Chinese open way models claim they're 90% of the market leader

• 20:19Scott Galloway?

  for a third of the price. I think this is going to be the next geopolitical pawn, once Trump actually, if Trump actually figures out what's going on here quickly enough. But the entire economy right now is a giant bet on AI. And China has come in with a, with a, a product that is near, near frontier for a lot less money. And that is going to start to, and Mia, our head of research, put together this graph that just blew my mind, one of those mountain graphs. And you see the frontier models of like 80, 90% share in China, you know, five or 10% of these Chinese models. And the mountain of Chinese, of consumption of Chinese open way tokens has exploded. And yet it's not getting that much coverage.

• 21:04Scott Galloway?

  It's as if, I mean, the, the US auto industry was hollowed out over, call it 20, 30 years. And it started with the Honda Civic and then they had an Accord and then, oh wait, but that's just one company. No, it's Toyota, which became the largest auto company in the world in terms of production volume. What the Chinese automobile industry did to Detroit in about three decades, it feels like Beijing is doing to USA AI frontier models in about three months.

• 21:30Ed Elson?

  We'll be right back after the break. And by the way, we will be going live on Substack with Noah Smith tomorrow at 1:30 Eastern. Don't miss it. Subscribe now.

• 21:50Speaker 00

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• 22:19Speaker 01

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• 22:29Speaker 02

  My boss asked for results, so I opened my dashboard for the only positive sounding metric I had. Impressions.

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• 23:23Ed Elson?

  We're back with Prof G Markets. I mean, let me just sort of map out like, what are the threats to OpenAI right now? I think you've got, you've got this sort of lack of goodwill in the marketplace. And we saw there was this viral clip of Alex Karp on CNBC basically saying that he's done with OpenAI and Anthropic because their tokens are so expensive and the value's not there. And it so feels sort of like corporate America is turning on this company, which I think could be a problem in terms of these B2B contracts, which are pretty important, both for OpenAI and Anthropic. You've got this Apple lawsuit and all of the other lawsuits, by the way, that OpenAI is going to have to fend off, but the Apple being probably the most well capitalized,

• 24:08Ed Elson?

  which could legitimately shut down their hardware business. You've got just competition in general. As you pointed out, the market share statistics, a year ago, ChatGPT was at 76%. Today it's at 50 and that's because there are two major insurgents. One is Claude, which has gone from 1.6% market share to 10%. Gemini has gone from nine to 28. So Gemini is exploding as well. And then I think the most significant and the most important is the price war that appears to be breaking out right now. And that is the pricing of these AI models is clearly becoming front of mind for enterprises.

• 24:49Ed Elson?

  And it is very quickly becoming a race to the bottom because you have Meta that is coming out with their model, which is dramatically cheaper. And they have literally stated that it is their mission to initiate a price war because they know that they can play that game. They have the cash. OpenAI and Anthropic can only play that game for so long because where are they getting their money from? They're not getting it from profits. They're getting it from venture capital. And so at some point, if the investor spigot turns off, they can no longer play that game. Gemini is also pricing their models lower, but the elephant in the room, and I'm 100% in agreement with you on this, is clearly the Chinese models.

• 25:30Ed Elson?

  It is clearly DeepSeek, Kimi, all of these Chinese models, which are so dramatically cheaper than the US models that it's hard to actually fathom. Just to go through the data here, the price per million output tokens for OpenAI's model, GPT 5.6, is $45. For Claude Fable 5, it's $50. The equivalent price for DeepSeek's model is 87 cents. So it is 99% lower than the American alternatives. And obviously now we're seeing that China is stealing market share. I don't, I don't know.

• 26:12Ed Elson?

  I mean, we see all these benchmarks and like, which model is the best? And there's all these debates, like, you know, people kind of generally assume that OpenAI and Anthropic have the best, best in class, world-class models. I'm not going to chime in on that. But what I do know is that people are using the Chinese models because the Chinese models can get the job done fast enough, well enough, and they are so much cheaper that it would be ridiculous not to turn to them, which is why you're seeing the increase in market share. It's also why you're seeing a lot of these blue chip American companies that are making that switch. I mean, we've gone through some of them before Coinbase, Shopify, Airbnb, Uber, they're all starting to switch over to use these Chinese models.

• 26:56Ed Elson?

  And it seems to me that this is clearly the elephant in the room for not just OpenAI, but for all of American AI at this point. And how could Xi Jinping, how could the CCP, how could China not be trying to target this? Because if we are as dependent on AI as we are, it is clear that this is the fastest way to bring the industry to its knees. Initiate the price war, get everyone back on the side of China, take up that market share. And then the question for us becomes, what happens if this keeps happening? What happens if they continue to eat into that market share? And I wonder if, I mean, this is a question I'll pose you.

• 27:38Ed Elson?

  I wonder if that is going to be the tipping point for an OpenAI or an Anthropic? The fact that they cannot compete with China? What do you think?

• 27:48Scott Galloway?

  I think they can compete. I do think that there, so there's a market for Emirates and, and Delta. There's a market for the LVMH and the high end. The frontier models with better IP will be great businesses. The problem here, Ed, is that when I raised money for Red Envelope, about 120 million, thinking that I was a genius getting that kind of valuation, the problem was it was really difficult and stressful to try and raise money for the next two years after the market collapsed, because the people who came in at 120 were pissed off and didn't want to raise money at a lower valuation. And you end up with all sorts of expectations and repricing options.

• 28:30Scott Galloway?

  And to a certain extent, the, one of the, one of the real anchors around the necks of OpenAI and Anthropic right now is eight or 900. And that is eight or $900 billion, which is what all their last round investors are anchoring off of. Because I believe OpenAI and Anthropic will still be amazing companies. If they decline by 80% in value, that means they're worth as much as Starbucks. They're worth as much as Disney. They're amazing companies. But the expectations and evaluations have just gotten so far out over their skis that the narrative will naturally be really negative. But I do think there's a market for the premium frontier model. People want US companies. In addition, and this was, I thought, the most puncturing statement from Alex Karp,

• 29:13Scott Galloway?

  and it was brilliant, and he's talking his own book, but it doesn't mean it's true. He said, people turn to Palantir because what they want is a thick layer of innovation and protection on top of LLMs. Because if you're, and he didn't say this, but I'll project, if you're Apple, you don't want to upload your board decks and project plans and product roadmaps into any LLM and have them incorporate it, again, strip mine it and incorporate it into future answers for Samsung and Microsoft, who are posing the same queries.

• 29:45Ed Elson?

  Especially after you've literally found evidence of them stealing your hardware products. I mean, if you're already anxious and then you see the lawsuit, I mean, no way you're starting that enterprise contract.

• 29:57Scott Galloway?

  I mean, this is the narrative that's emerging that is really powerful. These are companies that have ingested all intellectual property without consent or compensation. They strip mine it and then sell it back to the people who are losing their jobs because they've stripped mined their initial IP. Like, that's not a good, that's a business model that should get people angry. And so there needs to be, I mean, this lawsuit's going to be interesting. I still go back to an original or an idea I've had for a long time, and that was do what the record recording artists do and have, have an organization that's on top of them, like the Record Association, I forget what it's called, player.

• 30:38Scott Galloway?

  And basically they have means of assessing every time Private Idaho is played by the B52's awesome song on every radio station across America. And then they say, okay, radio stations, approximately 20 basis points of, or half, a half a percent of total playtime was B52 songs. We license, we do a blanket license for X dollars. It, we charge you, you know, we charge KROQ 106.7 Rock of the 80s in Los Angeles, the greatest radio station ever. We charge you two or two and a half million dollars a year for a site license, an omnibus license to have access to all of our music to play. And then you run ads against it.

• 31:21Scott Galloway?

  And then we take 2% of that and we send it to Warner Brothers or whoever represents the B52s. None of that goes on. Again, bringing this back to me, if I type in, in the voice of Scott Galloway, I will see literal sentences from chapter seven of one of my books, but I'm not getting any compensation. So the strip mining, I think an adult will come in and say, Adobe did this and it didn't seem to pay off, but Adobe's visual LLM, Firefly, whatever it was called, they actually only had licensed imagery because they wanted to say, look, we've, we are holding up to our standards of IP.

• 32:03Scott Galloway?

  But that is yet and privacy, IP theft, actual theft of intellectual property, not only IP theft from individual consumers, but IP theft from other organizations. This is all going to lead, and I'm teasing my prediction here. We're going to have a new CEO at OpenAI within the next six months.

• 32:26Ed Elson?

  Could you expand on that prediction while we're here?

• 32:28Scott Galloway?

  I'll do what Rachel Maddow does. I used to love watching Rachel Maddow and I got so sick of her saying, what if I told you that I knew the name and the identity of the person who killed JFK? Stick around and then you have to watch four minutes of commercials convincing you you had opioid induced constipation and restless legs. And then you come back and she's like, there is a man. He has a name. Another man is showing up and has a solid thesis on why it was this man. Stay with us. And then we'd cut to another commercial break. I'm like, I have had it. Rachel Maddow is the biggest, biggest, I won't use a word, tease of some kind.

• 33:06Scott Galloway?

  And I gave up. I'm like, I am not willing to endure more commercials showing me how much it sucks to get old to find out who who killed JFK. Anyways, should I do it now? Or should I wait for predictions?

• 33:18Ed Elson?

  I would like to hear it now because I myself am impatient. So I'm going to assume that the listener is too.

• 33:24Scott Galloway?

  We're about to see OpenAI acquire a company called Sierra. And that is the best companies don't stop at the platform. They develop their own applications. Microsoft didn't stop at Windows. It built or bought and built Office. Apple didn't start with iOS. It built the App Store. OpenAI is worth about half a trillion dollars, 500 billion. Sierra, which is essentially, Sierra has one of the best enterprise AI products. And they're going to, I believe they would check so many boxes acquiring Sierra and installing Brett Taylor as the CEO, because OpenAI has one of the best frontier models and Sierra has one of the best enterprise AI products. And Brett Taylor may be the best enterprise

• 34:08Scott Galloway?

  software operator of his generation. So as foundation models get cheaper, the intelligence will be commoditized and it'll be, the scarce asset won't be IQ, it'll be customer relationships, workflow integration and enterprise trust. That's Sierra. And at $5 billion, which is what it's worth in the market, say you pay 10, that's a 2% dilution. And you not only get real progress in your application layer, you get something that'll increase the value of OpenAI by $100 billion by calming the waters with someone who is seen as not only someone who understands the technology, but has a very elegant, smooth hand around retention

• 34:48Scott Galloway?

  of employees and smoothing over. Keep in mind, this is the guy that shoplifted $44 billion from Elon Musk and forced him to close and didn't get into a pissing match with Elon Musk. Elon Musk does not shitpost Brett Taylor. Think about it. He had to pay $44 billion for a company that's now worth $3 billion. And he's not out calling Brett Taylor a crook. So this, this solves the Altman problem, the insecurity in the market problem. Brett Taylor will get cloud cover to make massive reductions in CapEx. They can pay Brett five or 10 billion of that incremental 100 in increase in valuation to get, they get the day they announce this acquisition. This is just, makes so much industrial logic. Anyways,

• 35:31Scott Galloway?

  OpenAI acquires Sierra and installs Brett Taylor as their CEO and kicks Altman up to chairman.

• 35:37Ed Elson?

  Wow. Okay. Sam Altman out. What was the timeframe?

• 35:40Scott Galloway?

  I would say it's six months. You know, it might be, it might be 12, but Sam Altman is on the green mile. He's an innovator, not an operator. They need an operator. They need an adult in the room right now. He just clearly doesn't know how to handle employees who want to leave. He's made a fool of himself with certain statements that are just immature, quite frankly. He has not made the right moves in terms of relationships with other organizations. So they need an adult and Brett Taylor kind of just reeks of competence. The entire, every investor at OpenAI would have about a seven day exhale if they announced that Brett Taylor was the new CEO.

• 36:18Ed Elson?

  That's a very bold prediction, but the more you think about it, the more it actually isn't that unreasonable, given how much of a shit show it seems to be at OpenAI right now. I think it's just helpful to play out how these kind of situations might unfold for OpenAI's business. Like, you know, when we think about this Apple lawsuit, I mean, what could go wrong here? What could go wrong is that the hardware business just shuts down. And that seems to be very much on the table for OpenAI right now. The other thing that we saw were those eMarketer estimates of chatbot ad revenue. So, I mean, it's worth thinking, like, what, what would ChatGPT and OpenAI's advertising revenue actually

• 37:01Ed Elson?

  look like if they were as low as eMarketer is predicting for the chatbot ad revenue market at large? The other thing to think about is these price wars. Like, what would happen if OpenAI had to reduce their model pricing? And, you know, pick a number, we picked a number, we said, what would happen if they had to reduce their prices by 80%? Kind of like worst case scenario. If you put all those things together, if you eliminate the hardware business, if you dramatically reduce the ad business, if you dramatically reduce the pricing power that OpenAI currently has and seems to be seeding with every passing day. And then you project all of this out. They have said that they're going to be profitable

• 37:42Ed Elson?

  by 2030. But when we put all these estimates together, what we find is that actually, no, they won't be cash flow positive. They will be losing about $165 billion a year. That's when you put this all together. And so, in other words, if these things go wrong, this business just flat out won't work at all. At which point, you have to start asking questions as to what actually happens to OpenAI. Some would say it just goes bankrupt. It just implodes. I don't really think that's going to happen. I think the more likely scenario is that there will have to be some sort of massive restructuring, some sort of M and A event.

• 38:21Ed Elson?

  Probably it gets sold to a larger AI company. The point being, all of these very, very speculative investments and very speculative bets, they kind of all have to go right for OpenAI to make it, to make it out of this alive. Unless something massive happens, unless you shake things up in a, in a massive way. But it is really getting to that point. And I think the question for investors is, which thing do you decide to worry about? I think if there's anything that I would be worried about, if I were an investor in OpenAI, it would be the China problem. It would just be the pricing, just, just flat out. Because at this point, they're losing control of the narrative. The enterprises are turning

• 39:06Ed Elson?

  against them with every passing day. They're telling them, these tokens are too expensive. There is a lot of incentive to switch over to a Chinese model. Maybe the government bails them out. Maybe they see some regulation that makes none of that even, regulation wise even possible. But that does seem to be where things are trending at this point.

• 39:27Ed Elson?

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

• 39:44Speaker 00

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• 41:16Ed Elson?

  We're back with Prof G Markets. People keep saying that the market is diversifying, but the deeper you look, the harder that argument is to make. It seems like every part of the market is becoming increasingly dependent on AI. Take small caps. Some of the best performing stocks in the Russell 2000 this year are AI beneficiaries. Maxlinea, a semiconductor company, is up 424% year to date, while cloud computing company Rack Space Technology has gained 567%. In total, roughly 24% of the Russell 2000 now has some exposure to the AI trade. The same pattern shows up in emerging markets. The MSCI Emerging Markets X China ETF is up 34% year to date, but much of that performance is driven by its heavy

• 42:01Ed Elson?

  exposure to Taiwan and South Korea, two markets whose largest companies are deeply tied to the semiconductor supply chain. So Scott, I just want to simplify this.

• 42:14Ed Elson?

  One of our biggest concerns about this market has been over concentration. The fact that the top 10 stocks make up 40% of the whole S and P. It's up from 20% just 30 years ago.

• 42:29Ed Elson?

  There's this over reliance on AI that we've been worried about. But this year, I'm just, we're hearing a lot from investors that that is changing, that big tech has been underperforming and that we've seen this diversification or this broadening of the markets. And let's just play a clip of what some investors have been saying.

• 42:49Speaker 08

  Broadening of the market. We're seeing more participants to the upside. Look, I think the broadening of the market, we've argued for some time that it would be extraordinarily healthy if the market broadened. And that's really been going on since the end of October. It's been an incredibly broad, broadening out.

• 43:07Speaker 09

  I think that broadening out theme, which was one of our themes as we entered the year. I think that broadening out theme is going to be quite relevant again.

• 43:12Ed Elson?

  The trouble is that when you actually look at all of these quote unquote broaden segments, the stocks that are doing all of the broadening are AI stocks. And you look at the S and P, big tech isn't carrying this market. True, but AI still is the best performing stocks have been Intel, Seagate, Western Digital, Micron, Dell, SanDisk, all of the sexy AI names that we keep on hearing about. And the same is true of every other sector. And we can go through them in a moment. Before I do that, I'll just start with your reactions.

• 43:46Scott Galloway?

  The CNBC pundits who will always find a reason, like real estate agents will always find a reason why you need to buy now if you're a buyer and why you need to sell now if you're a seller. These folks own stocks and so they're always going to come up with a reason why you should buy more.

• 44:03Scott Galloway?

  The market is not broadening. It's just finding new ways to buy Nvidia. People put your analysis, these pundits are pointing to small caps, emerging markets, industrials, utilities, even real estate. And if you scratch the surface, the same story emerges. Semiconductors, power demand, like even cooling systems or fiber, data centers, AI software, that's not diversification. It's second order concentration. In 1999, everything eventually became an internet stock. Today, everything's becoming an AI stock. And that's not necessarily bearish. It just means investors are kidding themselves when they use words like broadening as some sort of code for diversifying away from AI. That's just not happening.

• 44:46Scott Galloway?

  If the AI trade sneezes, we're not catching a cold. We're getting, we're getting pneumonia. And buying quote unquote AI adjacent stocks and calling it broadening is like ordering a Diet Coke with your double double from In-N-Out. Be clear, folks, you still bought a fucking cheeseburger. That's what you've done here. You've bought a cheeseburger.

• 45:08Ed Elson?

  Just looking at some of these sectors, like you mentioned utilities, which a lot of people, you would think of that as diversification away from technology, away from tech, away from big tech. But if you look at what the, I mean, it's up, that sector is up 7% year to date. If you look at the companies that have been driving that, it has been the companies that are quote unquote AI compute providers or AI power providers. It's companies like Dominion and Bloom Energy, which is up 143% this year. The same is true, you mentioned real estate. Who are the winners in real estate right now? It's not REITs that are building houses. It's REITs that are building data centers. It's Digital Reality Trust, Iron Mountain.

• 45:50Ed Elson?

  It's these companies that are basically going out and being AI landlords, similar to what we saw in our conversation with Mike Novogratz. Same is true of industrials. Caterpillar is now an AI stock. Vertiv is an AI stock. They are carrying that sector. And now, you know, we can talk about the size of companies, large caps versus small caps. A lot of people would say, oh, we're broadening because the Russell 2000, which are the small cap companies that they are outperforming this year. Well, actually, if you look at the returns, more than half of them have come from AI related stocks. The same is true by region. A lot of people say, oh, we're broadening, we're getting into international markets. Emerging markets are outperforming.

• 46:34Ed Elson?

  Well, no, because South Korea and Taiwan have accounted for 75% of those returns because most of those gains are coming from three companies, TSMC, Samsung and SK Hynix. So we're starting to see this, this, this problem in the way that we talk about markets where there's this idea that we are diversifying, that we're kind of getting away from AI. But we should be very clear, like AI is literally touching everything in this market. It's even touching fixed income. And this is something that Torsten Slok over at Apollo has talked about. AI now accounts for nearly half of all investment grade bond issuance. So you could think like, oh, the equity markets are being kind of over levered to AI.

• 47:17Ed Elson?

  But the same is now true of the bond markets. And I want to play you this clip. This was again, this was Torsten Slok, who was one of the, one of the heads over at Apollo. And he's talking about like the 6040 portfolio, which is sort of the, the classic balancing of your portfolio where you're 60% equities, 40% bonds. He reframes it in a very interesting way. This is what he said.

• 47:44Speaker 10

  This AI thing better work out.

• 47:45Ed Elson?

  It better work out.

• 47:46Speaker 10

  Because if that doesn't work out, then your portfolio will be in trouble. That's why ironically, the best investment recommendation today is the new 6040 is really to do 60 maybe AI and 40 non-AI. So in other words, the best recommendation for investors is to invest in non-AI, things that are not correlated with this one factor. Because if there's one thing we have learned in finance since the financial crisis is factor investing, you don't want to be exposed just to one factor. And at the moment, there's one factor staring all of us right in our eyes. And that is AI is literally everywhere.

• 48:14Ed Elson?

  I think he kind of sums up exactly what's happening here.

• 48:18Scott Galloway?

  Well, of the big tech companies we talk about, who's the least concentrated or dependent upon AI?

• 48:23Ed Elson?

  Apple.

• 48:24Scott Galloway?

  That's exactly right. And what's Apple, what's Apple, Apple stock, one year performance? It's up 60% year to date. It's up 23%. All the other guys, my, my pick, Amazon, still related AI, but mostly diversified. It's up 13% this year. And then look at the guys who are ground zero for it, you know, Microsoft, right?

• 48:51Scott Galloway?

  You know, Microsoft's down. So look out below. I, if, as a general theme, if I could go long a basket of stocks, it would be GLP-1. And if I could go short a basket, it's, it's AI. But be clear, folks, I mean, the reality is I don't, I'm not suggesting you invest in gold bars or assets or cash. I think you're always in the market. I'm always in the market because you don't know when these, you know, you don't know how fast and how irrational the markets are going to run. I'm always in the market, but you absolutely need to be diversified. And you need to really understand what the term diversification is because if you're in the S and P or even in what you think are small cap stocks,

• 49:32Scott Galloway?

  I think at this point, you really want to think about how do I try to mostly diversify away from AI? And that is not easy right now because everything seems to be somewhat correlated to AI. But I will say that I think if the market goes into a pretty serious recession, I still think people are going to find the budget for their wogovy.

• 49:55Scott Galloway?

  I still think they're going to pay their rent. I think the builders and the, and the REITs are going to do okay here. Consumer products, defensive stocks, but this feels, wow, it feels frothy right now. And it feels like there are cracks, you know, the, the size of the Grand Canyon beginning to emerge.

• 50:14Ed Elson?

  We talk a lot about diversification and it's, what we're learning more about this market is it is increasingly difficult to diversify because of how much AI has kind of penetrated everything, whether it's emerging markets, whether it's small caps, whether it's bonds versus equities, like AI literally touches everything. What do you think the right move is for investors at this point? Like, how do you handle that problem?

• 50:43Scott Galloway?

  Brief history of diversification. In the eighties, people, people, some finance professors uncovered research or published research saying you get risk-free return when you diversify. And Ray Dalio says that the entire objective of the most successful hedge fund ever, Bridgewater arguably, was to find 15 uncorrelated distinct cash flows. That if you could get to that point, you'd always beat the market with lower or higher sharp ratios, or whatever it is. And investors listened in the eighties, and these enormous hedge funds started buying Australian stocks and Japanese bonds. But because people listened and diversified, everything became more correlated, which

• 51:25Scott Galloway?

  meant that the biggest hedge funds, when US stocks went down, began selling their Japanese bonds when they needed money. So now, almost, it's almost impossible to be, to be uncorrelated with AI and the S and P and American tech. You just don't want to be at ground zero. And just a personal learning here, and I've said this a lot, I've been rich three times. Why? Because I've lost it all twice, lost it all and more twice, in 2000 and 2008, because I never understood the power and the importance of diversification once you have an asset base. What am I doing? I'm selling down my big tech.

• 52:06Scott Galloway?

  And some of this also might be FOMO of having missed out, because I have not made a lot, I have not made, I guess, in an adjacent way, I've made money from AI, but I was offered Anthropic at, I think, 20 billion, and I'm, got to be honest, I'm angry I didn't do it. And I haven't, I haven't been big in AI. So some of this might be just sour grapes. But what I'm doing is, my big themes are the following. GLP-1, now not first and foremost, but unfortunately, I think the biggest trend in society right now that is going to run unabated is income inequality because of court decisions that let people throw as much money as they want at an election. So we're going to continue to see leakage of capital and power and rents from workers

• 52:50Scott Galloway?

  and consumers to shareholders, which will disproportionately affect the top 1% who own a disproportionate amount of shares. So what am I doing? I have a disproportionate amount of my net worth in high-end real estate because I think that, I mean, this is where my biggest investment is. I think anyone worth over $50 million is going to have at least one home in one of five places, Dubai, London, Palm Beach, New York, or Aspen. And I have invested about half my net worth in buying really high-end homes in four of those five. And the secondary benefit, or the psychic income, because I'm at a point in my life where I'm not all just about financial return, I'm about psychic return, is AI, I enjoy these houses, and I'm hoping it'll force my sons to, to visit me more.

• 53:35Scott Galloway?

  Which, based on my orientation weekend, that strategy isn't working. Did I tell you that he literally didn't text me for two days? I'm in fucking Charlottesville with nothing to do, wearing orange sunglasses, and he didn't text me once, Ed. He didn't text me once, literally.

• 53:49Ed Elson?

  You told me that he physically blockaded the door with his body. I didn't hear about the texting problem.

• 53:55Scott Galloway?

  I walked in, as soon as I put his bag down, I said, okay, thanks, Dad, I love you, and literally Heismaned me out of the room. I mean, it was like, God, am I that bad? Anyway, but I don't know where I was going with that. That took me off, I'm getting emotional. But, look, what I'm doing, and this is, I'm, to a certain extent, violating my own thing about diversification, but I think you're going to see inflation, and I think you're going to see massive increases, unfortunately, in income inequality. And the thing I love about real estate, for my own mental health, talking about psychic returns, I want a lower percentage of my assets in publicly traded stocks, because I'm checking this fucking thing 10 times a day. And the thing I love about private markets and real estate is I don't get a scorecard

• 54:39Scott Galloway?

  every day. And so, psych, it taps into this really unfortunate, overwhelming trend of regulatory capture and income inequality, which is going to continue to run unfettered for a while. And believing that we're going to swing to the left and bring in a democratic socialist, or whatever they're calling, whatever, however they're trying to wallpaper over, head-up-your-ass economic policy and antisemitism masquerading as some sort of youthful energy, fine, have at it. But it's not going to get in the way of the regulatory capture of the wealthiest. Those people are going to use Representative Chevalier as an example of how fucked up this whole democratic socialist movement is, and the middle of America is going to continue to put up with a regressive tax structure that results in a ridiculous amount

• 55:24Scott Galloway?

  of accretion of wealth to people in the top 0.1% who pay less and less taxes, and hopefully they'll all buy my home.

• 55:31Ed Elson?

  I don't know how we get here. I don't know how you, I'm also not even sure what about the democratic socialist is getting you so riled up.

• 55:40Scott Galloway?

  Because we're about to snatch defeat from the jaws of victory. Socialism doesn't work. Capitalism works, as long as you rest on a bed of empathy and you keep reinvesting in the middle class with redistribution of income.

• 55:49Ed Elson?

  I agree, but I look, I look at what Mamdani's done so far, and it hasn't been socialism. Everything he's done so far has been, like, surprisingly very reasonable. The rent control is the only thing I disagree with, and also what he's done with, with the Waymo stuff.

• 56:02Scott Galloway?

  I want to be clear, I'm not talking about Mamdani. I've said, I mean, I didn't mean to get political, well, I always get political. I think you have to rally around people when they're elected and give them the benefit of the doubt. I think he is done, there are some things that upset me about him, specifically the new litmus test for the people he seems to elect, seemed to be, in my opinion.

• 56:23Ed Elson?

  There was that one woman who's, she was a little crazy, but...

• 56:27Scott Galloway?

  A little crazy?

• 56:28Ed Elson?

  So...

• 56:29Scott Galloway?

  Ban the police, no borders, murderers should not be in prison, showed up to an anti-Israel rally on October the 8th, yeah. She is about to become the poster child for the Republican Party to convince middle America that, okay, we keep making rich people too rich, but they're fucking crazy. Anyways, I worry we're about to snatch defeat from the jaws of victory by swinging way too far, way too far to the left.

• 56:56Ed Elson?

  I think you're letting this one woman taint your, your views of everything.

• 57:00Scott Galloway?

  That is entirely true and accurate, and let me also acknowledge the other side, that boomers like myself don't get to pick their flavor of disruption. And what I will say about Mamdani and these new candidates is they're bringing...

• 57:12Ed Elson?

  He's been surprisingly, he himself has been surprisingly measured.

• 57:17Scott Galloway?

  He's good.

• 57:17Ed Elson?

  Thoughtful.

• 57:18Scott Galloway?

  Great politician.

• 57:19Ed Elson?

  Yeah.

• 57:19Scott Galloway?

  He's great. More power to him, I want to be supportive of him, I want to be supportive of youth. And people my age don't get to pick their flavor of disruption. I've been calling for disruption, democracy needs a turnover and a shedding of skin.

• 57:34Ed Elson?

  Yeah, I don't disagree with, with directionally what you're saying, which is this is only going to get worse. I mean, but what's going to happen?

• 57:41Scott Galloway?

  Believing that electing people who think we shouldn't have prisons, or we should, or demonize billionaires, one of the attributes that middle America loves, the people who decide elections, is that where Europe fucks up is the following, they would rather be worse off as a whole if they're more equal. America says, we don't mind being unequal, as long as a whole, we're all doing better. Billionaires are fine, as long as the average wage growth goes up and prosperity goes up. It has gotten so out of control that it's now coming at the cost of the middle class and the average person who can't afford to send their kid to school or buy groceries.

• 58:23Scott Galloway?

  But America, generally speaking, one of our core attributes is we don't demonize success, we celebrate it, and we're okay with inequality to a certain point, as long as it doesn't, as long as as a whole, we're doing better. We've had huge inequality since 1945. That's a key component of capitalism for incentives. It has gone way too far, and rather than swing back to something reasonable, like a progressive tax structure, alternative minimum tax, reduction in, reduction in transfers of wealth from young to old, we're going to, the Democrats are going to elect, I worry, a group of people that have economic policies that feel like North Korea-like or, or East Germany-like, and the middle of America is going to go no fucking way, and we're going to end up with J.D.

• 59:06Scott Galloway?

  Vance and continue to demonize transgender people, continue to have corruption, continue to have stupid crypto scams, continue to overturn and roll back the rights of women. Where am I going, Ed? Get me out of this. Save me here. Bring me back.

• 59:25Ed Elson?

  We were talking about diversification. This is all part of your real estate thesis.

• 59:30Scott Galloway?

  Diversify.

• 59:31Ed Elson?

  I think this is part of the problem is that traditionally the index fund, the whole point of it was diversification. Like that was what they have been for. The S and P, the idea like you just put it in, you cover your eyes. You're all good. You're set. You're diversified. It's all of corporate America. No worries. But increasingly what we're seeing is that you can't really depend on that as much as you could in the past. The same would be true of like the NASDAQ 100, which to be clear, like, I don't think that's actually like has ever been a true diversification device. But if they're now just figuring out ways to figure out these loopholes such that SpaceX can get stuffed into the index. Like you're increasingly realizing that these index funds, these passive investment vehicles,

• 1:00:16Ed Elson?

  they're not what they used to be marketed as, which is just pure safety in the market. Everything's diversified. That is a problem because one of my views is like, I'm a big fan of index funds. Like I'm a big fan of passive investing, putting it in the market, being broadened and diversified and letting the market do the work. But I think we're now starting to have to ask questions as to what true diversification is. By putting your money in the S and P, you're not really doing the job of diversification, which means that you now have to start doing some homework if you're super interested in getting yourself diversified.

• 1:00:58Ed Elson?

  It means that you do need to go and explore different sectors and different markets that have less exposure to AI. That's homework that you'd ideally not have to do if you're just investing in your 401k, in your Roth IRA, in your retirement account. But now we're realizing maybe you do have to do that. And so I think the question for us and for listeners and for all investors now is, can you go out and find sectors and investments that are not levered to the hilt on AI? Some people would say, oh, maybe like financials, maybe the banks. Not really. If we look at the bank earnings that we just saw this week, they're getting all of the returns juiced from AI because of the debt issuance to build the data centers,

• 1:01:43Ed Elson?

  because of the equity trading, which is because of the AI stock explosion. Those aren't really covered. I think you have to work really hard, dig really deep and find companies and investments that are not exposed. One, I'll give you one sector that I think isn't exposed, hasn't been getting love. It was one of my picks at the beginning of the year. I'm going to stick to it. It's the healthcare sector. I think that is a, that is a sector that has not infused AI at all yet. And perhaps maybe they will, at which point you will start to see some, some real returns. But I do think that's the question and it's a very hard one for investors to tackle.

• 1:02:21Scott Galloway?

  Like when the dot com collapse happened, I took a bullet to the chest. And then again, in 08, another bullet to the chest and financially killed. Since then, as I've gotten fortunate enough with the benefit of a bull market wind in my sails to aggregate some wealth, Kevlar, diversification is your Kevlar. And I like to think, and I might be wrong, I don't think there's any hiding. When this collapse, which is coming, it's probably not a collapse, a drawdown of AI happens. There's nowhere to hide, but you can at least be in a place with some food and water. I'm trying to set myself up for a 20 to 30% decline, not 120% decline,

• 1:03:03Scott Galloway?

  which is what I experienced in the dot com. No leverage, diversifying into other assets. And making sure I try to have no more than five or 10% in any one asset. And you say, well, Scott, you just said 50% is in real estate. But I do think there are submarkets in real estate where they're somewhat uncorrelated to each other. But I would just, what I, I ask my friends now that I know have some money. I'm like, what are you invested in? They're like, oh, I believe in index funds. Index funds is a construct are great, but start looking at like Australian index funds. You know, like diversify, because, because as, as Jon Snow said, winter is coming.

• 1:03:46Ed Elson?

  All right, let's take a look at the week ahead. There are no major economic data releases in store, but we will see earnings from Google, Tesla, IBM, Intel, Comcast and American Express. Scott, any predictions?

• 1:03:59Scott Galloway?

  Well, I made it. OpenAI is going to acquire Sierra and install Brett Taylor, CEO.

• 1:04:04Ed Elson?

  Last prediction. It's very bold. I admittedly don't have one today because I didn't do my homework, but I'm just going to sort of re-up on a previous prediction that I made. I predicted that SpaceX would get a 25% pop on the first day of trading. That happened. And then I said it would get cut in half. We're down to 40% down from its highs. So I'm just going to hold to the prediction. It's going to get cut in half. And I could easily seeing it trading below a hundred dollars a share. We haven't seen any of the lockups expire. We're about to see a ton of supply come online. More pain for SpaceX.

• 1:04:43Ed Elson?

  This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Carty. Our research team is Dan Jalon, Kristen Donahue and Mia Silvario. Jake McPherson is our social producer. Drew Barrows is our technical director and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and tune in tomorrow for a fresh take on the markets.

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