OpenAI Wants A Government Bailout

Scott Galloway and Ed Elson unpack reports that Meta is launching a cloud business and explain why they see it as a bearish signal. They also discuss why they don’t think there’s any justification for a government bailout of OpenAI. Then, they break down why the new Trump accounts are a step in the right direction, but argue that reducing inequality shouldn't depend on the generosity of billionaires. Finally, Scott explains the investment thesis behind his bullish call on the Bending Spoons IPO and why he decided to invest in the company. 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

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

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• 1:29Scott Galloway?

  Today's number, $26.2 million. That's how much the citizens of Atlanta spent on OnlyFans last year, the most of any US city. Ed, why did the scarecrow win an award?

• 1:41Ed Elson?

  Why?

• 1:42Scott Galloway?

  Because he was outstanding in his field.

• 1:55Scott Galloway?

  So in case you are, we need to be caught up. I'm going to tell dad jokes until Michael Simbelis, the chief investment officer from JP Morgan accepts our apology for offending him for telling a dirty joke on the episode he appeared.

• 2:08Ed Elson?

  I actually find the dad jokes funnier than the sex jokes.

• 2:11Scott Galloway?

  I'm sorry, we need to fix that. Why can't you hear a pterodactyl in the bathroom?

• 2:15Ed Elson?

  Why is that?

• 2:15Scott Galloway?

  Because the pee is silent. Michael, accept our apology.

• 2:21Ed Elson?

  Or don't.

• 2:22Scott Galloway?

  Release the dick jokes.

• 2:23Ed Elson?

  Actually, that's, that's my new position. I don't want him to accept it. I like this new direction.

• 2:28Scott Galloway?

  How are you?

• 2:29Ed Elson?

  Doing very well.

• 2:29Scott Galloway?

  It's coming home.

• 2:30Ed Elson?

  I don't know about that because that was a pretty shocking performance. This will come out on Monday and we're recording before Sunday night. So we'll see if England's still in the World Cup. But yeah, the Congo performance was not great.

• 2:42Scott Galloway?

  Do they have to play in Mexico? They have to play, is the next game Mexico at Azteca?

• 2:47Ed Elson?

  Yeah, Mexico, Sunday.

• 2:48Scott Galloway?

  Yeah, it's going to be a tough one. Did you see Team USA?

• 2:50Ed Elson?

  Team USA looks good.

• 2:52Scott Galloway?

  The scary part is the, the star of the US team, Falan, I think it's Balligan, received a controversial red card.

• 3:00Ed Elson?

  Yeah, I saw.

• 3:01Scott Galloway?

  Do you see that? That was about, I think that's very anti-American. I don't. And by the way, do you?

• 3:08Ed Elson?

  Discrimination against, against the Yanks.

• 3:11Scott Galloway?

  Do you know what Falan Balligan and Scott Galloway have in common? Other than exceptional athletic skill.

• 3:16Ed Elson?

  What's that?

• 3:17Scott Galloway?

  We're both anchor babies. His mother was seven months pregnant and the airline wouldn't let her fly. And so he was born in the US. That's why he's on Team USA. And Sylvia Levine and Tom Galloway, who met in Toronto at a dance. My mom was seven and a half months pregnant, pretty sure they went wed. I think, I think they've been lying to me about that.

• 3:38Scott Galloway?

  And to wait to check now, and they decided they couldn't endure another winter. This is a true story. And then my mom read in the Toronto Globe and Mail that the city with the best weather in North America was this city called San Diego. So they loaded up my mom's Austin Mini Metro, which is essentially a lawnmower with doors. I don't know if you've ever seen Mr. Bean. It's the go-kart. And seven and a half months pregnant, my mom and my dad traversed across the US with no air conditioning in their car and landed in San Diego and five weeks later I was born. So had these, this ridiculous attempt to turn back the 14th amendment been in place now? Yours truly would not be an American citizen.

• 4:21Scott Galloway?

  So what I am asking is that the IRS recognize that I'm not a citizen as I want to move to Dubai and I want the $100 million in taxes me and my company have paid over the last decade. I want it back. According to you fucking Stephen Miller and Donald Trump, I am not a citizen, meaning I'm not obligated to pay taxes in the United States. So anchor baby here, anchor baby, revoke my citizenship and tax status, please.

• 4:49Ed Elson?

  Love it. I'm kind of a reverse anchor baby. Or I guess maybe I'm an anchor baby in Britain. American parents go to the UK, born in the UK, come back here.

• 4:58Scott Galloway?

  Oh my God, we're housing an undocumented worker.

• 5:03Scott Galloway?

  Someone call ICE.

• 5:04Ed Elson?

  Call them. Take me away.

• 5:06Scott Galloway?

  Oh my, it's almost bonus time. I'm going to be like that bitch that called ICE on the roofers when they were done roofing her house and they, she didn't want to pay them, so she called ICE. Literally December 30th, Merry Christmas, please meet Mr. Sanchez from ICE.

• 5:21Scott Galloway?

  I'm sorry, Ed.

• 5:24Ed Elson?

  I love it.

• 5:24Scott Galloway?

  We were going to pay you a bonus, but it just wouldn't be right. It just wouldn't be right. Get him out of here. Why does that make me happy? Why does that make me happy? I'm calling ICE on Ed Elson. Oh, that's hilarious.

• 5:38Ed Elson?

  That's good.

• 5:39Scott Galloway?

  That's hilarious.

• 5:40Ed Elson?

  You can try it.

• 5:41Scott Galloway?

  Are you a citizen?

• 5:42Ed Elson?

  Yeah, I'm a citizen, so I've got the dual passport, so it's not really going to work out. But you could try it.

• 5:47Scott Galloway?

  Wait, so you weren't, you weren't born here, so your parents applied for your citizenship?

• 5:51Ed Elson?

  I don't really know what they did, but they're American, so.

• 5:53Scott Galloway?

  Sure you don't, you little illegal immigrant.

• 5:57Scott Galloway?

  Right? Everyone knows what's going on here. Everyone knows what's going on here. Okay.

• 6:03Ed Elson?

  All right. Well, now that we've figured out our citizenship status, you will have it revoked and I apparently am illegal currently. Shall we get into our three big stories? We've got a lot to talk about today.

• 6:15Scott Galloway?

  Let's get to the news. Stop bantering.

• 6:17Ed Elson?

  Let's do it.

• 6:27Ed Elson?

  There were two strange updates in the AI world last week. First, OpenAI proposed giving the Trump administration a 5% stake in the company. That stake would be worth roughly $43 billion. Sam Altman has reportedly argued that a government stake in the company would be the best way to share in the upside of AI with the public. And there's a vision for other AI companies to potentially join in, essentially creating a sovereign wealth fund. And then in the second piece of news, Meta is reportedly becoming a cloud provider. The company is preparing to sell its excess AI computing capacity. That is a notable shift after spending billions to build out infrastructure that it previously said would be necessary for its own AI ambitions.

• 7:12Ed Elson?

  Investors did welcome the news though, sending Meta shares up nearly 9%, but the reaction wasn't nearly as positive elsewhere. Shares of neo-cloud companies like CoreWeave and Nebius fell roughly 12% on the news. So Scott, lots to get into in the AI department here. First, I'm just going to take my own little personal victory lap because if you follow me on Twitter, you know that I actually bought Meta last week at $564. Here we are. The reason I bought is because I thought the stock was way undervalued, trading at 20 times earnings, S and P trading at 25 times. So that's pretty cheap relative to the rest of the market. And this is a player that obviously is positioned for AI if we do see an AI boom.

• 7:57Ed Elson?

  Plus, the last time it traded that low was in 2022. And since then, revenues have grown more than 70%. Gross margins have increased 200 basis points. So the whole thing just looked very attractive. The market was very worried that Zuckerberg was investing all of this money into these data centers, but hadn't laid out a plan for how he was going to monetize those data centers. Well, now he's given us the answer and he's basically just going to do what AWS did and what the cloud providers do. We just rent out the chips and sell it to enterprises. Now, there is a lot of debate over whether this is actually bullish or bearish because what we also know is that the plan was to use all of that compute to build their own AI products.

• 8:41Ed Elson?

  And now they're saying, no, we're not going to do that anymore. We're going to sell it to someone else and someone else is going to build the AI products, which begs the question, who's going to build the AI products? And why isn't Meta down to do it? If they're one of the most capitalized companies in the world and they are supposedly supposed to be a leader in AI? That's the bearish question. Lots to get into your reactions.

• 9:06Scott Galloway?

  This sent chills down my spine or I had real deja vu of 99 again because.

• 9:13Scott Galloway?

  What do we have here? Essentially, and I don't listen to markets unless I nor enjoy it unless I'm on it. But I was, I did find that guy you had on, Ed Zitron, Citron? He's very good. And I, I was fascinated by what he said. He's basically saying this whole thing's crumbling. If that's how, that's my takeaway. And I was fascinated by, I mean, his basic thesis, and tell me if, if I have this right, is that all of the demand that trickles down to the trillions of dollars of capex and infrastructure and unbelievable valuations from construction firms to the CHIPS guys

• 9:54Scott Galloway?

  is now basically down to demands being created by two players. And that is Anthropic and OpenAI are still growing, but Meta and XAI, who are planning to create demand themselves with their own customer bases needs for AI products, have basically said, oh, we overestimated the front end demand we could create. So we're going to lease out our infrastructure. So all of a sudden, it looks like we've gone from another unbelievable pivot from a crisis of supply to a crisis of front end demand. And probably the strongest evidence of that, of the kind of demand shock, if you will,

• 10:37Scott Galloway?

  is OpenAI delaying their IPO. In this market, you would think even if they'd lost some momentum, they would be jonesing to get out. And I mean, it looks as if, so what did we have? We had, Grok has 5% market share, Claude has 14, ChatGPT 49, Gemini 20, and Llama had 2.1. And I, I don't think it was the market saying, okay, this is, this is, we like the revenue that these guys are going to pick up. It's actually a drop in the bucket for these guys. I think what the market was saying is, this is a capex race that is going to be a loser.

• 11:19Scott Galloway?

  And we like that Meta is beginning to look more like Apple. And they're not, they're basically getting out early of these capex wars. And this all feels very 99 to me. And that is, you had, so we knew the internet was going to be huge. People were confident of that. But the front end guys, the application layer, the pets.com, the amazon.com, the eToys, it was clear that they weren't going to be able to create the kind of revenue in the short term that justified their valuations. So everyone thought, wait, let's go to B2B. So we went from OpenAI to B2B Anthropic, which was big in the enterprise, right? And then we found out there was companies, you know, remember this, like Internet Capital

• 12:03Scott Galloway?

  Group, which was supposed to be a marketplace so Pepsi could buy sugar. And then what everyone realized is it was just total bullshit that it was much easier to pick up the phone or just send a fax. And the B2B guys collapsed. And then I thought, well, hold on, okay, B2C and B2B, maybe we can't pick the winners. But the internet's huge, we need infrastructure investments. So people threw in the hat on trying to pick which front end or which B2B application of the layer was going to be huge. And they invested in infrastructure and they invested in Cisco, right? They invested in fiber. And then Cisco, from 99 to 2001, lost 92% of its market capitalization. And that sort of feels like what's happening here is the front end is stressed, is not creating the demand originally anticipated.

• 12:47Scott Galloway?

  So we went from OpenAI to wait. Anthropic is B2B, that's where it's at. Now we're starting to see, what is it, token nausea? People are saying you're spending too much in the enterprise on this shit, you need to scale it back. And I think the next shoe to drop is going to be in the infrastructure layer. And what people don't, and that's not to say the technology's not amazing. That's not to say these companies won't be great companies, it'll be around in 20 or 30 years. Amazon lost 90% of its value in a 24 month period. It's obviously recovered then and some. The internet has lived up to the hype. But they went through incredible volatility because the initial, I mean, it's gone from not what can AI do to will AI pay?

• 13:30Scott Galloway?

  And right now, it seems to me, we're starting to see real cracks in the wall or in the narrative.

• 13:35Ed Elson?

  Just to go to what Meta and Mark Zuckerberg had previously said about these hundreds of billions of dollars that they were investing and spending on building all of these data centers, which again, the market didn't like because they didn't have a clear answer to the question of how are you going to monetize them? But basically, here are some quotes that executives at Meta said that told us roughly what they were thinking. So Zuckerberg said in 2024, quote, "Our goal with Meta AI is to build the world's leading AI service, both in quality and usage." So the idea was, we're going to build our own AI stuff. In 2025, the CFO said, when she was asked about the ROI question, she said, quote, "Even with the capacity that we're bringing online in 2025, we are having a hard time

• 14:19Ed Elson?

  meeting the demand that teams have for compute resources across the company. I.e. we are building all of these AI products and we can barely keep up with the demand for our own teams within the company." Then, this is the most important quote, when asked if he would ever just start a cloud business, which he's now doing as of last week, Zuckerberg said this year, quote, "We haven't done that yet because we think that we have a use for the compute. Obviously, if we get to a point where we feel that we have overbuilt, then that is an option that we have, and that is partially what gives us confidence in investing in building this out." Well, they've now done the thing that they said that they would only do if they felt that they had, quote, "overbuilt."

• 15:04Ed Elson?

  So the question is, have they overbuilt? And I think that it would be a very, very reasonable answer to say, yes, they have, because look at what they're now doing. So I think that you're right in pointing out the difference between the front end of AI, i.e. using ChatGPT, using Claude, et cetera, and the backend, which is building the infrastructure, building the data centers. Meta clearly tried to build a front end AI business. They tried to do Llama, as you said, 2% market share. Clearly, it didn't work. So now they're shifting to the backend. They say, we're not going to build those products, we're going to sell stuff to other companies, we're going to build the products. XAI, similar position.

• 15:48Ed Elson?

  They tried to build a front end business, mostly hasn't worked. Grok has like 5% market share. They're shifting to the backend, they're shifting more focus on building the data centers, which they are now renting out to other companies that they should really be competing with. And so now, most companies are basically deciding, building the front end is a bad business, better to build the backend, build the infrastructure and sell it to the front end AI businesses. So then the question becomes, okay, who are these front end AI businesses that they're selling to? That supposedly is a good business, they've invested hundreds of billions of dollars into. And the answer is, there are two companies. It's Anthropic and it's OpenAI, and that's basically it.

• 16:32Ed Elson?

  And when we look at our estimates, those two companies alone account for between 60 to 80% of the AI revenues for Amazon, for Google, and for Microsoft. And according to the information, those two companies alone make up half of the entire revenue backlog of the hyperscalers, i.e. the big tech companies. Meaning that the backend infrastructure business only works if OpenAI and Anthropic continue to pay all this money and keep this whole thing afloat, which then begs the question, do you think they'll keep actually paying? And this is where the financials are so important, which were leaked by Ed Zitron, who we had on. And we learned that OpenAI made $13 billion in revenue last year.

• 17:17Ed Elson?

  Okay, great, but they spent $34 billion. So their operating loss was $21 billion. Anthropic, we don't know the financials, but we at Prof G have done some estimates that we know that they made $4.5 billion in revenue last year. Based on our estimates, they probably spent around $15.5 billion. That's an $11 billion operating loss, meaning the front end AI business only works if the VCs continue to subsidize it to the tune of hundreds of billions of dollars. And by the way, if the hyperscalers continue to subsidize it. But if they stop doing that, then suddenly this business of building front end AI doesn't work anymore, which means the business of selling the backend doesn't work anymore,

• 17:59Ed Elson?

  which basically means the whole thing falls apart, which brings us to OpenAI and their recent news, which is that they have decided that the best bet is to go to the government for what seems to be something like a bailout. And that is, according to the Financial Times, they've discussed giving a 5% stake to the US government. And so it seems as though instead of Silicon Valley subsidizing those losses, maybe now just the taxpayers will. And maybe that's the plan. And maybe that's a good idea, because that's what the banks did in 2008. And it didn't work for some of them, but it worked out for most of them. And so you have to think, maybe they see this collapsing. And that's why they go to the government.

• 18:43Ed Elson?

  But either way, both of these new pieces of news in the same week, that's very, very bearish, in my view, and, and seems to indicate that this is a growing bubble that is nearing a point of maybe not collapse, but certainly massive course correction.

• 19:04Scott Galloway?

  OpenAI, I predicted this six months ago, that the biggest bailout in corporate history was about to happen, and it was going to be the bailout of Nadella, Altman, Dario Amadei, and it would be dressed up as investment or growth. It's not, it's a bailout. If the government were to take a 5% stake in, in OpenAI, great, they're going to favor OpenAI. They're going to overregulate their competitors and underregulate OpenAI. They're going to provide them with protection money and direct access to the White House. It's, it's a, it's not even socialism, it's cronyism. It's like, you know, when things are really good, we want to capture all the gains ourselves. But when things are bad, we want to socialize the losses.

• 19:47Scott Galloway?

  That's not capitalism on the way up and socialism on the way down is cronyism. And that's what's being offered here. It's also evidence that things are, there's something wrong. In Mudville. And then just as the great flippening was the reversal of fortunes in from the massive leakage of momentum from OpenAI to Anthropic, we've seen another incredible flippening, but this is one is geographic. And that is, uh, free Chinese models went from 30% of AI traffic to 60% in six months. The dominant AI models are now imports. I

• 20:26Scott Galloway?

  mean, this is the thing that rocked the automobile industry was a product called the Honda Civic. That was sort of a slow moving train wreck over 10 years. This has been 10 weeks. GPU rates are collapsing. The hyperscalers built $300 billion of infrastructure for customers who are switching to DeepSeek for free. The way to describe this historically is this is the fiber overbuild of 1999.

• 20:54Ed Elson?

  The Chinese model problem is like another problem on top of all of their other problems because, I mean, as you pointed out, a lot of these large companies are now switching. I can go through a list of some of them who have switched to Chinese models. Coinbase is now using Kimi, Cursor is using Kimi, Shopify is using Quan, Airbnb is using Quan, Siemens is using DeepSeek, Microsoft is now apparently testing DeepSeek. And the reason they're all doing this is because the Chinese models are way cheaper. And we talked about why is that the case? Some say it's because Chinese have cheaper energy and that might be part of it. But also it seems that they're kind of just stealing the models from the US companies through this process of distillation.

• 21:38Scott Galloway?

  I don't think the Chinese would do that, Ed.

• 21:41Ed Elson?

  They hate stealing IP. It's not their game. Yeah, that's probably what's happening. And unless you can do something to stop that, then this train's going to keep running here and the Chinese models are going to continue to take up market share. And the real problem is the fact that it has now sparked OpenAI to supposedly consider reducing their own prices. And if you're a company that's making $13 billion and spending $34 billion, and you're going to decide that actually we're going to reduce the revenue number because we're being priced out by other companies that are offering not just comparable products, but literally equal products. I mean, studies have been done.

• 22:23Ed Elson?

  These models are perfectly good on a variety of different metrics. That basically means that OpenAI's business is in big, big trouble. And again, they can say that they're giving the stake to the US government because they want the American people to all share in the upside. But what they're really saying is, we want the American people to all share in the downside. Because right now, the business is currently all downside. You haven't figured out a way to make this product profitable. You haven't figured out a way to sell this product without spending literally like billions and billions of dollars on sales and marketing, almost $6 billion. They could have bought Super Bowl ads for a decade, every single

• 23:08Ed Elson?

  Super Bowl ad, for literally a decade. Like, this is a business that clearly hasn't proven itself. And they're already going to government and saying, you guys support us. What I can't tell, though, is whether that, I mean, clearly I'm bearish after, after hearing about the meta news. But now I'm wondering, okay, if the government just bails them out, then maybe it will work out. Like, I don't know if I should be, if we should necessarily be betting against companies that are literally going to be subsidized by the full force in the balance sheet of the US government. I don't know if that's actually what's going

• 23:50Ed Elson?

  to happen here. And I don't think it's fair. And I think it's honestly reprehensible. And I can't believe that we can't learn from our mistakes in the past and continue to do the same thing over and over and over again. And I know it's going to create hatred of these companies among the American people, i.e. the taxpayers who are going to pay for all of this. But part of me thinks, maybe that works, just getting bailed out. And maybe that means that they can figure out a way to reach profitability if they can just continue to have their losses subsidized by someone who's way richer than them. It started off with Silicon Valley, then it went to big tech, like companies like Microsoft, and now it's going to literally the US government. I mean, maybe that's a winning strategy. I don't know.

• 24:33Scott Galloway?

  This is a common theme in America, and that is, my generation, or the incumbents, if you will, it's not old versus young, it's not rich versus poor, it's incumbents versus entrants. But the incumbents who are sitting on top of a company recently valued at 875 billion, it's okay. If they go to $100 billion, they're still going to be worth twice what Ford is worth. They're still going to be one of the 100 most valuable companies in the world. Companies trading at $875 billion shouldn't get bailouts. Now, you could argue that if Ford goes from 10 billion to zero and has to lay off a couple million people and middle class jobs are lost in the Midwest, okay, maybe that's at least a feasible argument

• 25:14Scott Galloway?

  for government intervention, having societal implications or a positive or justification. OpenAI and Anthropic? Burn, baby, burn. If all of a sudden Nvidia goes from being worth more than the entire German and Spanish stock market to just being worth what the French stock market is worth, okay. There's, there's absolutely no justification for me to whip out your credit card and, and run up our deficit such that the current owners, the private owners of Anthropic and OpenAI shares can maintain their gains. This isn't about an existential crisis where you think we would lose millions of jobs in the very

• 25:57Scott Galloway?

  existence of this category and losing this game. This is about keeping the incumbents rich. And that is basically a curse or a virus that infects America. I have, I have two college degrees in a bunch of homes, going to make it harder for everybody else to get one, such that the value of my current assets go up. No, that's not the way America's supposed to work. And the idea that we're even talking about this for companies that are, if Anthropic were in Europe, it was founded five years ago, it would be one of the four most valuable companies in Europe right now. What, what company that's one of the 20 most valuable companies in Europe has any discussion of a bailout? The plane

• 26:41Scott Galloway?

  is running at Mach 3 and doing just fine. Why do the pilots need to bail out? Why, why do we need to pay for these things? These things, say, say they lose 80% of their value. Amazon lost 92% of its value. We didn't bail them out. That's fine. That's a part of, that's, that's part of capitalism. So the fact that this is even being discussed, in my opinion, is Sam Altman saying, I have no fidelity to capitalism. I did this weird fucking deal with TPG and other, other private equity firms that guaranteed them a 16 or 17% pick. All that does is start to crush the previous rounds of investors because those numbers will start to add up pretty fast. But my God, if it's, if they lose 80% of their value,

• 27:24Scott Galloway?

  so you're saying it's only worth as much as the entire US auto industry sans Tesla?

• 27:29Ed Elson?

  But it's almost like they, they want to be systemic. They want to be, it's, it's like they, OpenAI has, is essentially like a zombie child that was formed by all of the big tech companies that have become systemic to the stock market. And it's like, Sam Altman is trying to make the company as systemic as possible, such that eventually when things go wrong, we have no choice.

• 27:54Scott Galloway?

  Too big to fail.

• 27:55Ed Elson?

  To bail them out. It seems like, like, this is almost all part of the design, that he wants to be too big to fail. He wants for the US government to own a 5% stake in it so that if anything ever goes wrong, why wouldn't the US government figure out a way to bail them out? And it's almost like all of these, none of this growth is organic. Like, give ChatGPT its credit on a user basis, that was organic growth, people loved the product and they started using it. But they haven't figured out how to monetize it in a realistic or sustainable way. And so all of the growth that we've seen from the valuations, from the circular deals, now going to the government, all of that is basically a setup

• 28:38Ed Elson?

  where they are artificially growing this thing and they're trying to make it so big and so core and such a part of our lives, such that by the time the business truly does flounder, we'll have no choice but to say, hey, we need this thing, we're all in this together, let's bail them out. It feels like that is the direction that they are taking, that they want to become as systemic as humanly possible. And it's like, it's honestly gross. I just can't, I, that, seeing that headline. And I bet Trump is down because he basically will do anything for anyone who shows up to the White House and kisses his ass. This is what we've seen time and time again.

• 29:19Scott Galloway?

  It's more than just showing up to the White House. What is it, 93% of GDP growth, 75% of earnings growth, come down to these firms' continued spend. So just as we have convinced ourselves it makes sense to spend $7 trillion on, on government spending with $5 trillion receipts just to keep the good times and the sugar high coming, Trump, Trump does not want the economy to slow down, especially going into the midterms. So he will potentially be open to the notion of doing whatever's required, including pulling out your credit card to keep the music playing. But this is no different. Corporations, you know, Mitt Romney tried to tell us corporations are people. I don't think that's true. I

• 30:00Scott Galloway?

  think that corporations, you let your thoroughbreds run, the idea is they pay their taxes, and then you try and fund the Navy and parks and, and SNAP payments and unemployment insurance for actual people. But this really is no different than, say,

• 30:17Scott Galloway?

  Say someone is worth a hundred million dollars and they really like being worth a hundred million dollars and they're really good friends with Trump and they're really good for their community and they spend a lot of money everywhere. And like, oh no, my business is shit. And I need the government to invest in my business and give me government contracts and also maybe put some of my competitors out of business, maybe give me government-backed loans such that I'm not worth just 25 million. Is that a good use of the government's money? So if if OpenAI or Anthropic lost 75% of their market cap, they'd only be worth as much as Uber or Adobe or Charles Schwatt or Amgen. But because this run-up, this sugar high, has been fueled by these, you know, this new technology and

• 31:00Scott Galloway?

  the unbelievable expectations there, this could, this would be the absolute worst thing for our economy that we could do, is to decide that these thoroughbreds that are amazing companies and worth a ton of money need to be propped up. It would be absolutely no different than picking the wealthiest 100 Americans and saying, we're going to use the credit card and the debt capacity of future generations to make sure you maintain that you're, continue to be the top 100 wealthiest people in the world. And to a certain extent, that's what we've been doing by weaponizing housing, by weaponizing or sequestering degrees to college. Again, yet another transfer to the already super fucking wealthy.

• 31:47Ed Elson?

  We'll be right back after the break. And if you're enjoying the show so far, send it to a friend and please follow us on YouTube and Spotify or wherever you get your podcasts.

• 32:03Speaker 09

  Here's your report.

• 32:04Speaker 10

  Oh, thanks, Jane. I wish I could hire someone just like you.

• 32:07Speaker 09

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• 32:23Speaker 10

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• 32:27Speaker 09

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• 32:33Speaker 02

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• 33:03Speaker 03

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• 33:04Speaker 04

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• 33:28Speaker 04

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• 33:29Speaker 03

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• 33:37Ed Elson?

  We're back with Prof you Markets. The Trump Accounts are officially live. As a reminder, this is a program that creates government-backed investment accounts for children. Babies born between 2025 and 2028 will receive a one-time $1,000 contribution funded by the government to help kickstart long-term savings. Michael and Susan Dell started a separate initiative for children born between 2016 and 2024. The kids who don't qualify for the federal contribution, they are providing a $250 deposit for families living in zip codes with median incomes of $150,000 or less. So Scott, these accounts

• 34:18Ed Elson?

  have officially launched. How do they work? As I said, if you're born between 2025 and 2028, you get $1,000 immediate into your investment account. It will be funded by the Treasury Department. This is a pilot program. If they decide it works, then maybe they'll continue it. Every account can then receive a contribution of up to $5,000 per year, tax-deferred. The money can only be invested in a qualified index fund that uses no leverage and that charges no annual fee of no more than 0.1%. And then when you turn 18, it converts into a traditional IRA and it basically functions just like a retirement account. This, I think I've said it before, is the best thing the administration has

• 35:03Ed Elson?

  done by a mile, in my opinion. I actually support this 100%. I hate that they're calling it Trump accounts and that Trump had to put his fingers on this thing because now I feel like it's been politicized and people don't want this to succeed. But it really started with Brad Gussner coming up with this thing, pushing it through to the White House, going to the White House, getting Trump to agree to it, probably had to say that it had to be called a Trump account for the thing to even happen in the first place. Then Michael Dell comes and gets involved. There are some caveats that we can get into, but big picture, huge fan of this thing. I think this is exactly what we should be doing and what we should be using government money on.

• 35:43Scott Galloway?

  Yeah, I agree with you. I really like this in concept. A friend of mine in Los Angeles, Alex von Furstenberg, was a big fan of this. And there's been a lot of different iterations. I personally would have gone bigger. I would have gone $7,000, which would be, I think, 40 billion a year. And I would infantilize and I would hold it, I would, I would force people to be in these low-cost index funds until they're 65. And essentially position it like the Chinese do, go kind of 50-year plan. I think in 30 years, what you could say is, if you gave every baby $7,000, by the time they're 65, based on historically market returns, they end up with a million bucks. And then in 30 years, I would announce that we're 30 years away from not needing social security. And I think interest rates would go down and this would start to pay for itself. I think we need

• 36:28Scott Galloway?

  another way to leverage the marketplace and compounding to replace the out-of-control social spending, entitlement spending that is dragging our economy down and putting too much tax on young people. Having said that, I would have gone bigger and bolder with this. Having said that, I think this is a good idea. I think the Dells should be applauded, not mocked, for them doing this. Ray Dalio is doing something similar.

• 36:52Scott Galloway?

  What I don't like is the notion that we have to count on the kindness of strangers, including the Dells, who are good people but also happen to be awarded a piece of TikTok. I think that probably Elon Musk may have said, hey, I have an idea. Lean on the Nasdaq 100 and the SEC to include me in the Nasdaq 100 prematurely, unlike any other company in history. And I think I might give, you know, $10 billion, $100 billion in baby bonds. I just, I don't like depending, to me, this feels like a government program that the government should finance, that's about long-term thinking and reducing entitlements over time, as opposed to just sort of this giveaway. And we're depending upon the generosity

• 37:35Scott Galloway?

  of billionaires like the Dells and the Dalios of the world. So, but again, I move to my glass half-empty pessimism. On the whole, I think this is a really good idea. I like the fact there's a income cap on it. I like the fact that it's leveraging, you know, the greatest, as Einstein was credited with saying, but actually didn't say, the greatest force in the universe, and that's compound interest. So I agree with you. I think generally speaking, it's a, it's a, it's a really good idea.

• 38:03Ed Elson?

  Yeah, just to go through what that money will become, that first $1,000, if we assume 10% annual growth, which is the S and P's average over the past several decades, by age 18, that will be worth $5,500. But if you contribute $1,000 a year, then it will be worth $50,000 by the time you're 18. And if you contribute to the maximum $5,000 a year, it'll be worth a quarter of a million dollars by the time you're 18. So, I mean, it's just hard to argue with the numbers there. That would be amazing. The problem, and I find myself violently agreeing with you again, is that a lot of people seem to see this and see the Dells contribution, which is spectacular, take nothing away from

• 38:47Ed Elson?

  them. They seem to see this as the catch-all solution to the problem of inequality in America, that instead of taxing people and instead of going in some direction close to a billionaire tax, we can get into what actually is the right solution. But instead of taxation, we rely on voluntary philanthropy. We tell rich people, we're not going to take your money, but please, please, pretty please, will you invest billions of dollars into these, these child investment accounts? And to be fair, some people have. The Dells

• 39:31Ed Elson?

  have done it. Ray Dalio did it. He committed $75 million to kids in Connecticut. Brad Gussner's done it. He's committed $250 to every child under five in Indiana. That's great. However, we were also told that this was going to create a landslide of donations. Brad came on the show and he said, you watch, everyone's going to do this. I said, is Zuckerberg going to do it? He said, yep, Zuckerberg's going to do it. So far, only six individual donors are on record having committed to the Trump accounts. It's Dell, it's Dalio, it's Gussner, it's Harold Hamm, it's Nicki Minaj, and then it's an anonymous donor in San Francisco. Elon has not given anything. Zuckerberg hasn't given anything. Bezos

• 40:12Ed Elson?

  hasn't given anything. I mean, if you were, if you were to put Elon, Sergey Brin, Larry Page, Jeff Bezos together, and they gave away 5% of their wealth, they could fund this program for nearly two decades. And they haven't done it. And so I'm completely with you. If we're thinking that this is the solution, that this is how we're going to redistribute the wealth, this is how we're going to get the money back into the hands of the American people so that we don't see this crisis of faith in the American system, so that young people no longer believe not only in America, but in capitalism itself, this is probably not going to do it. Unless we see some waterfall and everyone starts

• 40:53Ed Elson?

  investing in these Trump accounts, then yeah, let's not wait on Elon Musk to suddenly like find the charitable bone in his body and give it all back to the children. What we've seen so far is he doesn't really want to give much away at all.

• 41:06Scott Galloway?

  Depending on the kindness of strangers to fund the well-being of our kids when they get older, is a little bit like thinking, oh, Sheryl Sandberg wrote a book on gender equality. She couldn't come up with a business model, the results in teen girls cutting themselves.

• 41:20Scott Galloway?

  This is the government. We elect people. And by the way, this just wouldn't be that hard to fund. Here's an idea. The top tax rate is 37%. You make over a million dollars a year. There's no capital gains deduction that goes to 20% or 22.8. It's 37%. Oh, and by the way, that 37% tax rate is alternative minimum tax. We had that brilliant woman, Ray Madoff, on our podcast. She blew my mind with the following stat and the framing. Everybody thinks the biggest expenditure is entitlements at $1.5 trillion social security. I think Medicaid is 1.2. The military is now 1.5. Our interest on our debt is $1 trillion. And she said, no, the biggest expenditure is a $2.3 trillion expenditure. And it's the following.

• 42:05Scott Galloway?

  It's the money we give back to corporations and wealthy people in the form of tax loopholes. And it just blew my mind what a genius framing that is. And that is, we don't need to raise tax rates. We just need to enforce them. And the government should be giving every kid $7,000 and then infantilize them and say, nope, can't touch it till you're 65. And by the way, within 20 or 30 years, the debt and the bond markets are going to go, wow. In a few decades, which will go fast, they will no longer need social security. And you're going to see interest rates go down on everyone's credit card bill, auto loan. Everyone's mortgage will go down and this thing will pay for itself. But we need to, but you know what this feels like, Ed?

• 42:48Scott Galloway?

  It feels like the mayor of Bogota donates the land, but we need Pablo Escobar to pay for the grass and the nets. No, if it's a civic stadium and it's good for the people, it's the government's responsibility to tax everyone equally. And then not for podcasters to say, good billionaire, bad billionaire. I'm sick of waiting on their better angels. I don't think, I don't care if they're good or bad people. I just want them to pay their fucking taxes. And then we elect people who decide what to do with the money.

• 43:21Ed Elson?

  Plus, the new argument from a lot of these guys is that philanthropy in general is bullshit. And that the truest form of philanthropy is starting a company that's super valuable. Like, just to quote Musk, he said, quote, SpaceX, Tesla, Neuralink, and the boring company are philanthropy. If you say philanthropy is love of humanity, they are philanthropy. There was a Twitter account that made this ridiculous post. They said that Mackenzie Scott's donations were, quote, making the world a worse place.

• 43:51Scott Galloway?

  He said that.

• 43:51Ed Elson?

  Well, he responded, yes. So he co-signed that statement because they've got it in their heads that Mackenzie Scott is woke, liberal, the rest of it. And they've said that the billions of dollars that she has given away is making the world a worse place. So, I mean, if they really want us to count on them to, as you say, find their better angels, redistribute the immense wealth that they have accumulated over the years and give it back. They're not doing a very good job of selling us that they are actually going to do that. Because so far, all we've seen is that it's not just that if you give your money to the government, it's waste, fraud, and abuse.

• 44:33Ed Elson?

  They're saying that if you give money to a nonprofit or a foundation or a charity, it's waste, fraud, and abuse because the charities are now woke and the charities are libtards. So this is the problem. It's like, at a certain point, I'm sorry, but I have to assume that if you're worth a trillion dollars and you can barely find it within yourself to give back a fraction of a percentage of your net worth. I don't believe that you have any interest in the Commonwealth or the well-being of anyone. And now you're arguing that the companies that you built are the philanthropy, that you've now done your part. So you can no longer make the argument, and I keep on hearing people make it,

• 45:17Ed Elson?

  people who support, really who are just against wealth taxes and against billionaire taxes in all forms. They say this is the way to do it, voluntary philanthropy. Stop making that argument because no one believes it. No one thinks that these people are actually going to go through with it. Apart from a handful of great guys like Dell and Dalio and Gersner, they are in the minority, at least so far.

• 45:42Scott Galloway?

  You're being a little bit unfair. It's not like, it's not like they're cutting off aid to HIV-positive mothers, such as hundreds of children. Oh, wait, never mind. Never mind.

• 45:50Ed Elson?

  I hate that I'm laughing at it.

• 45:52Scott Galloway?

  Let me be very harsh right now and invite a lawsuit that'll be dismissed in court. The thing that will mark this era is that the world's wealthiest man is killing the world's poorest children. So, folks, if you're waiting on the better angels of these people to show up and that's what our government is dependent upon, don't hold your fucking breath. Tax them and then elect good people who come up with systemic ways to address these issues.

• 46:22Ed Elson?

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

• 46:37Speaker 11

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• 47:07Speaker 02

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• 47:37Speaker 03

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• 47:43Speaker 05

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• 47:47Speaker 03

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• 48:02Speaker 03

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• 48:11Ed Elson?

  We're back with Prof G Markets. Bending Spoons went public on the Nasdaq last week.

• 48:16Scott Galloway?

  Oh, did it? Did it now?

• 48:19Ed Elson?

  And it is off to a strong start. It raised $1.68 billion in its US debut and shares jumped 40% on their first day of trading, closing at $40.50. The Italian company has built its business by acquiring underperforming software companies, cutting staff and improving profitability. Its portfolio includes well-known brands such as Vimeo and AOL. Not really sure how well-known those companies are anymore. Either way, many have compared its strategy to private equity companies. But most importantly, Scott, you called this one last week. You said you were expecting a very strong first-day pop, the strongest we've seen, stronger than SpaceX, which indeed it was. Let's play the clip.

• 49:03Scott Galloway?

  The best-performing one-day IPO, the biggest pop of a tech company of an IPO in June, is not SpaceX at 22%. There's a company being taken out by JP Morgan and Goldman Sachs. I think it's pricing next week sometime. Bending Spoons, my prediction, the biggest first-day pop of a tech company is going to be this little-known company out of Italy that has found all these orphaned brands that are great businesses.

• 49:32Scott Galloway?

  Ladies, watch the shoulders. Hello, ladies. Hello. Surrender to the dog. This deserves a little celebration.

• 49:43Scott Galloway?

  That's right. That's right.

• 49:45Ed Elson?

  So on audio, I think you know what he's doing. He's again taking the shirt off and rubbing the belly. For some reason, that's the celebration.

• 49:53Scott Galloway?

  Oh, my God, Ed, my nipples are hard. My nipples are hard, Ed.

• 49:56Ed Elson?

  Reflections. How did you come up with this prophetic prediction?

• 50:02Scott Galloway?

  I don't think the greatest engineer in the world is, or the greatest designers in the world is Johnny Ivory and Elon Musk. I think the greatest engineers in the world are JP Morgan and Goldman Sachs. I think you just know when they're taking a company out, it's going to get at least a 20% pop because A, they make more money, they get their green shoe, they get their fees. They're, every institution in the world wants in on this IPO. As a result, they do business with these companies, they get free like gift with purchase. Another way of saying this is the IPO game has become totally rigged, but it's legal.

• 50:35Ed Elson?

  Yeah.

• 50:36Scott Galloway?

  And also then they get to manage the money and so they use AI and incredible marketing team of people, some of the brightest people at JP Morgan and Goldman working in high net worth. They call these people, they build an unbelievable book, they go back to the CEO and say, look, this is a once in a lifetime branding event. And even though you risk some additional dilution that you wouldn't have had to have taken it if you priced it to perfection, to be able to say your stock's up 20% or is up 40% as Ben X moon was yesterday is worth the additional dilution. So there's all this, there's all these stars and moons that line up around engineering a first day pop of this sort. I thought this one was going to beat SpaceX because I thought the story was good.

• 51:19Scott Galloway?

  If you look at the PE, it's actually trading at a relatively, you know, a relatively modest PE. If you look at the revenue per employee, it was actually greater than Meta. I personally wanted to pimp this stock a little bit because I'm just so sick of talking about American AI companies and I like their model and they, they have a great narrative. They say that they get something like 400,000 applications for jobs and they hire, you know, eight people or, you know, a small point of, they say they're the most selective company in the world. Some of that is spin because basically what they do at these companies is they replace a 40 year old making $300,000 a year with a 25 year old who I'm sure is very bright making $140,000 a year.

• 52:02Scott Galloway?

  And they essentially like a private equity shop, clean up the backend. A lot of these companies probably overspent, but it's essentially, it kind of reminds me the old WPP model pioneered by Martin Sorrell and that is their ability to maintain this valuation and increase it will be their ability to find good companies trading at X, X multiple of EBITDA and then present it to the market and get 1.3X in the marketplace. And that's what Martin Sorrell did by taking out key man risk. A little bit of synergy on the backend, not as much here, but he would basically buy these key man risk ad agencies for eight times EBITDA and then turn around to the market and he would get 12 times. It was essentially a market arbitrage or consolidation arbitrage.

• 52:47Scott Galloway?

  So it's a little bit of WPP, a little bit of private equity. I thought the small float, the excitement coming out of the SpaceX IPO and just what felt like a, an insanely cheap valuation was going to handily beat the 20%. And it was up, I think 40%. It's checked back a little bit today, but I thought this was a really interesting company, neat business model, kind of beloved brands, but forgotten a little bit. Sort of the Berkshire halfway of beloved but forgotten brands, if you will. I just liked it.

• 53:19Ed Elson?

  You kind of sound like you own it. Do you own it?

• 53:21Scott Galloway?

  Yes, I do. I do. I didn't get as much as I wanted though, to be honest.

• 53:29Ed Elson?

  So that, that's the investor disclosure. Just to be clear, I haven't really taken a look at the stock and I'm, I'm not recommending it and I'm not buying it, but Scott owns it. So take that information as you will.

• 53:42Scott Galloway?

  I'm not buying more at this price. I think it's a great, moving forward, their challenge will be to show that this model is scalable that, and, and to their credit, I do think that, I think there are a ton, I think the list of companies that are, didn't become Airbnb or didn't become Meta, but are good companies is really long and 80%, 88% of their, of their revenue is recurring. Anyway, I was really excited. I felt like this one was getting no attention and was a good company and I kind of stumbled onto it just before can.

• 54:19Ed Elson?

  What I don't want this segment to be is a stock pumping segment where we're encouraging people to go buy it. That's not why I'm interested in this company and I know, and I don't think that's why you're interested. I just want to be clear to anyone listening, like that's not the interesting thing and I'm not, no one's recommending this. But I think what is interesting about this company is the model and they've said that the idea is quote, "to be a hybrid between a private equity firm and Google." And I think it, it's kind of, I, I kind of like it because they're, they're taking this sort of creative novel strategy where they're, they're basically, they have their own software

• 55:00Ed Elson?

  engineers and they're going up and they're buying these companies as a private equity firm would. And then they're putting those software engineers into those companies. And so that's sort of the Google meets KKR or Blackstone thing. And it's interesting because they're kind of, it's the same thing that the private equity firms would do back in the day where they say, you know, what we're going to do is we're going to find these unloved companies and we're going to find synergies in between them. And what that was basically Latin for is we're going to go in and we're going to fire as many people as is physically possible. And that is basically what they're doing, but they're doing it with like an AI thing. It's sort of like, oh, we're going to use AI and we're going to streamline everything.

• 55:41Ed Elson?

  And that's a great story, but in reality, what they're mostly doing is firing people and crucially leveraging cheap labor in Europe. And that is they pay their software engineers around $75,000 a year. The average software engineer at Google makes around $150,000 to $200,000 a year. At Meta, it's a little bit higher. They can do that because they're an Italian company. They can go in Italy and hire these smart people and not pay them that much. And, you know, do what you will with that information. You could say that, you know, like that, and I'd understand. A lot of people don't like private equity firms and the fact that they just kind of go in, find these companies, gut the companies, you know, lay off all the employees and then

• 56:24Ed Elson?

  figure out a way to fatten the bottom line, but it's a great thing for shareholders and that's kind of what they're doing. And so I think it's a good bet for those reasons, but I'm sure that they're going to get a lot of heat as well when people start to kind of realize like what, what it is exactly that they're doing. And that is the same thing that private equity does, the same thing that consulting firms do. They go in, they make a pitch and then ultimately it comes down to fire as many people as possible. It's basically what they're doing.

• 56:51Scott Galloway?

  They will call it efficiency, but they're operating at the same revenue per employee a little bit better than Meta. Look, I don't, I think that's capitalism. I'm not.

• 57:01Ed Elson?

  Agreed.

• 57:02Scott Galloway?

  I'm not, I, I think, I think your ability to lay off people and create revenue and margin creates more profitability and opportunity to start new companies that creates higher paying jobs. So I'm all about whatever you want to call it, creative destruction or what have you. But this company felt like at seven to eight times revenues, it felt like a buy. Now it's a 10 to 12 because of the run-up yesterday, it checked back a little bit. I don't want to say it feels fully valued right now, but they are going to have to show their thesis or demonstrate their thesis that with a public currency and a list of a ton of companies like this, they can go out and kind of wash, rinse and repeat. But in sum, I thought this was, I thought this company's business model execution and opportunity set or TAM for lack of a better term was not reflected and that there was

• 57:45Scott Galloway?

  so much attention given to SpaceX that people kind of overlooked this company. And also just to be blunt, when JP Morgan and Goldman takes something out now, they engineer a 20% plus pop. That they do. And by the way, it's not illegal. Is it rigged? Is it unfair? Is it a transfer of wealth from retail investors who don't get much access to institutions? Yeah, it is. I'll leave it there.

• 58:16Ed Elson?

  This is not a great place to leave it, but that is, that is certainly what is happening. And I think that we have done a good job of making that clear, just how rigged that IPO game really is. A lot of people try to sort of paper over what's really happening, but that is what's happening. They don't usually let these IPOs fail and they price it such that it will get that pop. I think when we think about like, I mean, now that I know you own it, I'm going to just do a little bit of jobbing at the company.

• 58:45Scott Galloway?

  You mean like you do at my emotions?

• 58:51Ed Elson?

  I think what their advantage is, I don't think of this as an AI company. I think of this as basically a private equity company. And their advantage is they're in Europe, they know how to operate, they know how to fire people, and they know how to get really top talent at really low prices. And that last piece is crucial because what they're doing is they're buying these people businesses that are run, basically the product is dependent on how good your engineers are. I mean, these are mostly software businesses that have gotten crushed after the SaaS apocalypse, which if you thought that the pain that we're seeing in the public markets is bad, just go wait till you see what the pain in the private markets looks like, which spells opportunity. They're taking advantage of that.

• 59:34Ed Elson?

  And then they're also leveraging these engineers. But we went on the Bending Spoons Reddit thread where the engineers get together and they talk about their problems. And to be fair, Reddit is a very negative place in general. But here was something that we saw. Quote, "A friend of mine worked four years at Google. Then she got a job at Bending Spoons when she moved to Amsterdam and was fired after eight months because she was not working, quote, 'hard enough. You have to be autistic and probably have no life in order to resist working for them, not even Anthropic, who pays top of the market. Is this crazy?'" And then someone followed up and got like 300 upvotes. Quote, "They don't even pay that well." So that's kind of their advantage.

• 1:00:14Scott Galloway?

  You know who likes that, that environment, that culture? Shareholders.

• 1:00:18Ed Elson?

  Yes.

• 1:00:19Scott Galloway?

  And here's the thing, you brought up something, a couple of important things. One, one of the reasons I like this and I tried to find shares was that the word I didn't learn as a younger man, and the reason I've been rich three times, which means I've gone broke twice. The reason I've gone broke twice is that I didn't understand the power of diversification. And it's easy to become concentrated without even knowing it. You know, Prof G Media is essentially an American company talking about American tech. We get a lot of advertisers from AI. I am over invested in technology stocks. I am so concentrated and non-divested accidentally. Think, well, I'll buy some S and P funds. Well, okay, 40% of the S and P is in 10 companies now, all related to AI.

• 1:01:04Scott Galloway?

  So one of the reasons I like this company is a personal investment is I want to invest more in Europe. People have basically given up on Europe. Investors have basically given up on Europe. And that's when you buy. And two, I want diversification out of anything American and tech related because winter is coming, as Daenerys and every other person from Game of Thrones said. And then also the labor arbitrage. What do you think a talented senior product manager costs in San Francisco versus Milan?

• 1:01:36Ed Elson?

  Especially after AI. Exactly.

• 1:01:38Scott Galloway?

  It's not like it's, it's child labor. I would imagine that in Milan, if you're making 120,000 euros, actually Milan's gone a lot, a lot in price, but I would imagine for 120,000 euros in, in Milan, you can probably have a reasonable lifestyle in San Francisco. You're still living with your parents. So there, the market is just a gorgeous thing. It is, Europe's been left for dead, and that's the reason why I think it's an economic opportunity. And I'm spending a lot of time looking at European stocks right now.

• 1:02:11Ed Elson?

  Let's take a look at the week ahead. We will see the minutes from the Federal Reserve's June meeting, and we'll also see earnings from Pepsi and from Delta. Scott, any predictions?

• 1:02:23Scott Galloway?

  No, I'm just going to stand on my Bending Spoons one. I can't do much better than that. I'm going to bask in the glory of that. Oh no, I do have a prediction. I think that Team England is going to beat Mexico in penalty kicks.

• 1:02:35Ed Elson?

  Once again, this is coming out after, because we're not at Sunday night yet. So we'll, we'll find out. So just make sure you're down to do that. You might be humiliated on the day it comes out.

• 1:02:46Scott Galloway?

  Oh, like I don't get humiliated every day? Didn't you just say Reddit? Have you seen my subreddit? Oh my God. You are so mean. My, I don't even go on my subreddit anymore. It's like, God, he's so old. God, he's fucking lame. Jesus, oh, what's wrong with his face? I mean, it's just like, so rough.

• 1:03:09Ed Elson?

  You can't read the Reddit. The Reddit people are.

• 1:03:11Scott Galloway?

  They're rough.

• 1:03:12Ed Elson?

  We love you, but you're also a little bit unwell. That's a little bit of the problem.

• 1:03:16Scott Galloway?

  Oh my God. It's, it is rough.

• 1:03:18Ed Elson?

  So, okay, make the prediction then. England wins?

• 1:03:21Scott Galloway?

  I'm not scared of humiliation. You know, you want to know what my safe word during sex is, speaking of humiliation?

• 1:03:27Ed Elson?

  Not particularly, but tell me.

• 1:03:30Scott Galloway?

  My safe word is maybe. This has been a good show. Anyways, penalty, Team England wins in penalties at the Azteca Stadium, which by the way, Mexico, I don't think has ever lost that. They've never had a goal scored against them? Is that what you told me?

• 1:03:49Ed Elson?

  That's what I heard the commentators say, but now I'm kind of like.

• 1:03:51Scott Galloway?

  I think they've lost twice, but only twice in their history. It's going to be an amazing game. It's going to be an amazing game, but I'm, I'm predicting Team England wins in a penalty shootout. Or maybe I should just predict that Team England wins. How's that?

• 1:04:07Ed Elson?

  I mean, it depends how bold you want to be. It's just the pole, eh?

• 1:04:09Scott Galloway?

  I'm going to say Team England.

• 1:04:10Ed Elson?

  Less upside in that. It's not a very bold one.

• 1:04:13Scott Galloway?

  Where do they go? Should we go to the game? Where do they go? Actually, I can't afford that.

• 1:04:17Ed Elson?

  We should go to the game. Yeah, you can. Come on.

• 1:04:20Scott Galloway?

  Where do they, where do they go? Where do they go?

• 1:04:22Ed Elson?

  I'm not sure. If, if they end up in New York, New Jersey.

• 1:04:25Scott Galloway?

  Oh, they go to Miami. Oh, how much fun would that be?

• 1:04:30Ed Elson?

  It would be good.

• 1:04:31Scott Galloway?

  Everyone loves to roll with a dog in Miami.

• 1:04:33Ed Elson?

  It would be good. I would like that.

• 1:04:35Scott Galloway?

  Yeah.

• 1:04:36Ed Elson?

  My prediction, well, I had previously made a prediction that if the AI bubble pops, it will be because OpenAI implodes. That was about a year ago, I think.

• 1:04:47Scott Galloway?

  Oh, it'll pop before that. It'll pop well before that.

• 1:04:50Ed Elson?

  Well, no, I hold, I hold to that. I hold to the OpenAI imploding. My new thinking on OpenAI, two paths for OpenAI. Either it implodes or it gets a bailout. Those are the two paths. So that's my prediction.

• 1:05:05Scott Galloway?

  There you go.

• 1:05:09Ed 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 Shalon, Kristin O'Donoghue, and Mia Silverio. Jake McPherson is our social producer. Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and tune in tomorrow for a fresh take on the markets. [Music]

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