AI transcript
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0:01:27 does it ever feel like you’re a marketing professional just speaking into the void
0:01:33 but with linkedin ads you can know you’re reaching the right decision makers a network of 130 million of
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0:01:57 terms and conditions apply today’s number 60 that’s the percentage of america’s cats and dogs that have
0:02:02 obesity true story i met the president last week and i said jesus you’re obese and he said well it
0:02:07 runs in my family and i said nobody runs in your family a fat fuck
0:02:22 how are you doing scott i’m good i’ve had a busy day i just did my predictions deck to
0:02:27 whatever 22 000 people i’m in london 22 000 yeah what is that madison square garden
0:02:32 plus madison square garden um that’s pretty good 22 is that your is that your largest audience
0:02:38 just for anyone who didn’t know you you always always does his predictions uh deck at the end of
0:02:44 the year and it’s like a live stream i love that you’re live streaming by the way um and
0:02:49 yeah and so you do this every year 22 000 is that the record last year was close i don’t know
0:02:55 maybe i’m tiring um oh fuck that let’s talk about me you did you see i was on oprah have we already
0:03:03 talked about this i was on oprah i was on oprah ed i i know you’re on oprah have you been on oprah oh
0:03:11 no i don’t think so i don’t think so you’re on katie tour every like twice a day but i was on oprah
0:03:15 that’s the only person who wants to speak with me it’s katie tour and that’s it ed i just love
0:03:19 let me just summarize every show you’ve been on msnbc they bring out a bunch of boomers and then katie
0:03:25 goes for the gen z view we bring in ed elson and you go fucking income inequality i can’t trust any
0:03:29 of you and everyone else on the panel looks like they’ve just been caught masturbating they don’t
0:03:35 know how to respond to you it’s like a mic drop every time you’re literally like and everyone who’s
0:03:42 watching msnbc is like he looks like he’s four years old look at that young do you think we could set
0:03:48 them up with our granddaughter where’s my oxygen tank that’s what they’re saying when they’re
0:03:53 watching you because you know they’re old i would push back but i think you’re actually i think you’re
0:03:58 actually completely right on this one that’s exactly what happens every time it’s funny because they’re
0:04:08 old super old what have you been up to ed oh you know just podcasting we have a team drinks tonight
0:04:12 which will be fun where you guys gone we’re going to san vicente which will be good oh who’s a member
0:04:17 of san vicente bungalows who am i paying too much to that’s me you’re a member of san vicente oh
0:04:26 mr treinta mr treinta detras treinta mr 30 under 30 is a member of san vicente how many members
0:04:30 clubs clubs are you a member enough we’ve talked too many about we talk all the time about these
0:04:37 stupid clubs it never gets old it does i’m telling you it does i’m just jealous because i haven’t been
0:04:45 i’m in fucking in 50 degrees and gray weather and less hot people london i’m going to roof gardens which
0:04:51 is a fucking sausage factory all these dudes your work’s so inspiring get away from me where are the hot
0:05:01 checks so head’s head is in his hands head is in his hands just terrible because it is how your brain
0:05:10 actually actually works but yeah we are going tonight by the way i also saw you on on on the this morning
0:05:13 show which was funny because that’s kind of one of those shows that i would grow up watching when i
0:05:18 would when i’d be homesick from school oh the british thing yesterday yeah the british thing i found that
0:05:23 cooler than you being on oprah because that was the show that i was seeing as a kid when i grew up and i
0:05:28 know you i could tell by your demeanor you weren’t you weren’t that excited to be there but i was pretty
0:05:34 excited to see you let me literally break it down i’m about to whatever it is i do in the morning eat
0:05:38 my protein shake and take a walk with the dogs and mary jean starts blowing up my phone saying the
0:05:43 car’s there i’m like the car where am i going you have a live hit on itv and i’m like what the fuck is
0:05:49 itv it’s like it’s a big news it’s a big station in the uk and i’m like no one lives in the uk and
0:05:53 the economy is not growing i don’t want to go on live tv and she’s like you got to go now we committed
0:06:00 to this and i go there and it’s a big operation and it’s exactly the same as the u.s it’s a very
0:06:09 attractive woman and a hot guy and sitting on a couch asking you softball questions and and then
0:06:15 cutting to an ad for restless leg syndrome or opioid-induced constipation ads no because they
0:06:19 don’t have those and they don’t have those in the uk the segment was before me was guessing who was
0:06:23 going to be voted off of love island the british version and i’m like that sounds right and i’m
0:06:29 literally like how far have i fallen like this is what it means to be a thought leader this is cool
0:06:35 you’re on the this morning show with the love island stars i think that’s very cool you should be proud
0:06:39 of that it’s hilarious that you didn’t even know that you were you’re going to be on that show
0:06:44 but that’s exciting you got to be honest with me and we should we should fill up the comments with
0:06:51 this with another one of our innocuous questions is the dog overexposed am i like lassie right now if
0:06:59 last it was kim kardashian and just fucking everywhere i am i have in the last 24 hours i’ve received
0:07:07 three messages from friends that have all said the same thing make it stop make it stop because i’m in
0:07:12 their phone or whatever and meta knows for friends they’re like all i’m getting is fucking videos of
0:07:17 you and i can’t stand it no you’re everywhere it’s crazy i can’t stand it either i think i’m overexposed
0:07:21 well no it’s a good thing you’re trying to get yourself out there but there is a limit well what is
0:07:26 that limit when people get bored i don’t know i just i’m getting attacked online i think that i think
0:07:31 that’s part of it that’s good i mean just saying something i do think i’m overexposed i told the
0:07:36 publicist to dial it back a notch what would be your and then we’ll move on to our actual job which
0:07:42 is covering the news but what would be your dream show to be on you’ve been on oprah you’ve been on
0:07:49 bill maher what what’s next or are you at the top of the mountain my dream show is bill maher i was
0:07:54 one of my dad what my dad used to watch yeah but now now i don’t really have i don’t have anything
0:07:59 left i’d like to go on at some point i’d like to go on rogan and tell him that he’s been spreading
0:08:04 vaccine misinformation and is incredibly reckless and irresponsible but i’m he hasn’t called me for
0:08:10 that um no there’s nothing like i’m dying oh i’m going on colbert i’d like to be on one of those
0:08:15 evening shows that’s cool that’s exciting yeah the late night how about you you’re on your way up and
0:08:24 your your your ascent is like 10 times the velocity of mine uh in terms of where you are you’re oh god
0:08:30 are you kidding at 26 i was trying to like i was following my girlfriend to graduate school and
0:08:35 living with my mother i i had no i i literally didn’t know what to do and i was a waiter at islands
0:08:40 a burger joint you’re on katie tour yeah if this is how we measure success is how many shows you can get
0:08:44 what show would you like to be on my favorite show that you have been on which i would love to be on
0:08:51 is theo vaughn’s show i was so excited when you made it on that show yeah i also think i also think joe
0:08:56 rogan would be amazing i think i’m surprised he hasn’t reached out to you yet he must know that you
0:09:02 were upset with him that must be the reason you’re like oh hold on hold on hold on i pulled all of our
0:09:09 podcasts off of spotify during covid and publicly said it was because joe rogan was distributing
0:09:14 misinformation about vaccines that was going to result in unnecessary death disease and disability
0:09:18 so yeah joe knows who i am and i’m not going on anytime soon
0:09:25 that’s probably it that’s right snl would be cool i would be you want to host snl no no i want to be
0:09:30 mocked i want to be mocked on snl i want to have someone with a big nose and glasses who’s like
0:09:36 telling bad dick jokes and pretending to have insight i want to be mocked or the simpsons i
0:09:39 remember when i was working with michael wolf and that happened to him fred armison went up there and
0:09:45 did a croaky voice and pretended to be on uh morning joe it was pretty good that is pretty good you’re
0:09:51 almost there almost there you’ll be my prediction you will be you’re clearly like that the producers
0:09:59 at msnbc hear your name and start touching themselves pretty soon pretty soon his head’s in his
0:10:05 hands again pretty soon you’re trust me on this one you’re gonna be on morning joe they’re gonna
0:10:10 have something about young people and they’re like for they’re gonna be like for the gen z perspective
0:10:17 this is they’re gonna be like up next someone born in this millennium they are they’re actually out
0:10:24 there a live young person in the flesh what’s this talk tick thing you keep doing the kids are doing
0:10:33 right now no no morning joe you’re up morning joe’s up to you i can’t wait i cannot wait that’s gonna be
0:10:36 great get to the headline stop delay okay let’s do it
0:10:51 it’s official netflix has won the bidding war for warner brothers discovery the 72 billion dollar
0:10:58 deal plus debt includes wbd studio and streaming service meanwhile discovery will proceed with
0:11:04 spinning out discovery global which includes its portfolio of linear tv networks including cnn
0:11:10 netflix stock fell as much as four percent in pre-market trading one of the discovery shares rose nearly
0:11:18 four percent on the news scott we were wrong the first thing we should say we thought that netflix would
0:11:25 not make a bid we thought or i thought that david zasloff was running a little bit of a fake auction that it would go to
0:11:32 david ellison and paramount we were wrong netflix won 72 billion dollars plus debt your reactions
0:11:39 i don’t think the deal is going to close it i think it’ll be blocked um so first off your and by the way
0:11:43 we were still wrong we thought the ellisons would just walk away with this with a bid no one would match
0:11:50 and uh netflix has stepped up and i guess they look at their 400 billion dollar market cap and say okay
0:11:59 if i’m going to pay whatever it is 70 billion plus the debt for assets that are singular it just it’s
0:12:04 just crazy what how human nature plays such a big role in everything this stock was at 10 bucks not
0:12:11 long ago and nobody wanted near it and then when i was in junior high school and i asked lynn sugamora to
0:12:15 the prom and everyone found out that lynn sugamora didn’t have a date and was willing to go with me
0:12:21 everyone decided they wanted to take lynn sugamora to the junior prom and that all of a sudden when
0:12:26 faced with the idea of losing these assets and never having access to them again everyone has all of a
0:12:36 sudden decided this company is worth a lot more you know 120 more than you know just a just a few months
0:12:41 years ago but as i think about it and by the way let me just highlight that if adam newman and marissa
0:12:46 mayer the two most overcompensated executives had a baby it would look something like david zasloff who’s
0:12:52 going to walk off who’s going to walk off with 600 million dollars for basically 600 million just being
0:12:59 and that’s after the 250 he got from playing banker cramming shark week and game of thrones together
0:13:08 which made no fucking sense uh anyways you know have at it um but essentially if you look at this
0:13:15 if you look at the combined companies so let’s back up trump and mom donnie wanna because they’re
0:13:20 focused on the right thing and that is affordability all citizens globally want prosperity which is a
0:13:24 function of affordability and the amount of and their earnings the ratio between affordability and
0:13:31 the earnings affordability has become less so in america and americans think that oh if someone
0:13:35 just puts money in my pocket or screams socialism they’re going to make things more affordable not
0:13:41 recognizing that doesn’t work as a matter of fact it makes things less affordable affordability is a
0:13:49 function of structural long-term policies that result in one word competition you need
0:13:58 structural regulatory uh systemic not reform but policies that create competition and unfortunately
0:14:06 this is a great move for netflix this is they can afford it it would be great for them i i really
0:14:11 like ted sarandos i think he’s one of the better leaders in all of tech or media but i don’t think
0:14:17 this is a good idea um they would control an enormous share of premium tv and streaming they would
0:14:22 have the largest subscriber base one of the largest libraries of premium scripted content
0:14:29 some of the most valuable franchises in entertainment hbo max dc harry potter cnn discovery
0:14:35 not cnn and discovery but yes to max and that would be spun out they don’t want anything anywhere near
0:14:40 anything that’s old and stodgy they’re not touching but all of the good stuff all of the ip
0:14:46 the streaming service hbo max as you say i think the ip is really important harry potter game of thrones
0:14:54 lord of the rings dc universe succession sopranos euphoria we could go on and on and on that’s all
0:14:59 going to netflix now but put together they’d control a huge percentage of must-have shows and movies
0:15:06 and uh which quite frankly leads to fewer choices higher prices and worse terms for consumers and if you
0:15:10 look the consolidation in the streaming media market that’s already underway has resulted in
0:15:16 an acceleration of prices across these platforms and you want to put netflix which i don’t want to call
0:15:21 it walmart i’m trying to think of another big retailer that’s a little bit more aspirational but basically
0:15:28 this would be walmart and lvmh hbo was the artisanal network with two billion dollars versus netflix’s tonnage
0:15:34 of 18 billion in content they managed to create these water cooler moments and the culture there when i was
0:15:40 pitching our original scripted series on big tech and we had several offers we all were hoping that
0:15:45 hbo would come in with the best offer because talent what i learned quickly all wants to work at hbo
0:15:54 so if you had lvmh on top of on top of walmart i just think they become unassailable i think it creates
0:16:03 greater ultimately more leverage with against consumers advertisers different content providers
0:16:08 uh i think it ends up lowering the salaries of creatives because there’s fewer bidders for their
0:16:14 talent and then just looking at the politics of this in the prediction here is that i don’t think this deal
0:16:20 closes you have very powerful and connected people who are going to be against this deal because if
0:16:24 paramount doesn’t win here they’re subscale they’re kind of fucked if this deal goes through they’re a
0:16:32 distant five probably in this world which is not a good place to be and is in addition to trump and
0:16:37 his cronies not wanting this deal to go through the economists i believe of the doj and the ftc are going
0:16:42 to go you know this isn’t good for consumers i think that’s exactly right i think antitrust is the giant
0:16:47 question mark right now and it is so interesting because when we thought that paramount was going
0:16:53 to be the buyer we still thought that that was a concern from an antitrust perspective and paramount
0:16:59 i mean they own some some iconic properties but compared to netflix paramount is a is a pimple
0:17:06 compared to netflix i mean it’s tiny and so now here we are if if antitrust was a concern if pat when
0:17:11 paramount was going to buy warner brothers it’s going to be a huge concern now that netflix is
0:17:17 is buying warner brothers this is the biggest company in media and entertainment basically
0:17:22 buying the second base maybe the third biggest but we should call it but what is interesting is they
0:17:27 seem to be pretty confident because the breakup fee that they offered was larger than what paramount
0:17:33 offered 5.8 billion dollars basically like if this doesn’t go through here’s six billion dollars
0:17:40 which i i think it is a vote of confidence but perhaps i don’t know maybe we shouldn’t be comparing
0:17:44 it to paramount because netflix has so much cash on the balance sheet already that maybe it doesn’t
0:17:50 matter that much to them but yeah i mean antitrust is going to play a huge role here that is the giant
0:17:57 question and then there are further questions of does a trump doj and ftc really care about actually
0:18:03 regulating these companies consumers are going to be up in arms about it because we know this is going
0:18:08 to lead to higher prices as it always does and even if it isn’t even if the price increases aren’t a
0:18:14 direct consequence of the increasing monopolization whatever netflix does now people are going to point
0:18:21 their fingers and say you monopolize the industry this is all your fault anything they do wrong so consumers
0:18:28 are going to hate this and so i think it’ll be very interesting to see how does the doj and the ftc
0:18:34 how do they respond to this do they want to uh buck their usual trend of going very soft and seemingly
0:18:43 not caring about monopolization or are they going to step in and say no this is not acceptable the consumer
0:18:48 outrage will will not be that great i don’t think i think consumers are lazy i don’t think they’re
0:18:52 going to want to do the math around okay this probably means netflix will go to
0:18:57 30 a month in four years there’s this like they just want to take an edible and watch wednesday and
0:19:03 yeah whatever they i don’t i don’t think they’re like following the semantics of the competitive
0:19:07 landscape and streaming perhaps not yet if they’re if their prices rise a year from now and then they
0:19:13 suddenly realize too late then can’t unwind it who’s going to get apeshit here is the precious
0:19:19 creative community because already real leaders in the community including james cameron have said this
0:19:25 is going to be bad for the the theater going that he’s basically said film is over well okay film’s
0:19:31 already over boss but he’ll weaponize the the fourth rider on spongebob squarepants to to
0:19:38 to they’re they’re about to create they’re about to turn netflix and this deal into darth vader and that will
0:19:44 catch fire i don’t know how much impact it’ll have but you this is legitimately
0:19:51 has real doj and antitrust and ftc concerns that the president will not and pretend to give
0:19:57 a shit about doj ftc because he’ll have ellison saying boss i’m fucked if this deal goes through
0:20:02 maybe i won’t have enough money to spend for your illegitimate third term or whoever you anoint
0:20:08 president but also just to look at some of the past deals and what happened the at&t time warner
0:20:14 merger was an especially long battle and that made no sense to get in the way of that this was two
0:20:19 companies this is two anchors grabbing onto each other to try and fight digital made no sense to begin
0:20:25 with and several years later at&t spun it off realizing they’d screwed up comcast merging
0:20:31 with fox that was blocked paramount and skydance somewhat scrutinized penguin house penguin random
0:20:38 house and simon and schuster both my publishers that was blocked for monopoly and buying authors rights
0:20:44 so regulators have actually been pretty aggressive here and i think the populism will be on their side
0:20:50 politics will be on their side i think what ultimately ends up happening as i think about it
0:20:55 the you know the folks at netflix are so smart they didn’t put up a six billion dollar
0:21:01 breakup fee without doing their homework and i think what they probably figured out is even if it gets
0:21:09 blocked it won’t be full blockage it’ll be you have to spin off these assets and they think that as long
0:21:14 as we get x y and z we don’t need the following things or we’ll come to some sort
0:21:22 of accommodation but i find all of this shocking i think that the the argument will be you know you’re
0:21:27 monopolizing the sector and then the question will be well how do you define the sector and this is what
0:21:35 we keep on seeing with uh specifically with with monopolization in digital media and technology
0:21:43 because netflix is going to say um hey if we’re talking about media what about youtube what about even
0:21:49 tiktok what about instagram we’re not monopolizing things we are trying to fight off all of these other
0:21:53 screens that are trying to compete for people’s eyeballs and and so that would be their argument
0:21:58 and then the other argument will say no we’re talking specifically about streaming and then the question
0:22:03 would be how do we define streaming and i think that’ll be really interesting to see i think it was
0:22:08 easier with the penguin random house because it was like clearly we’re just talking about publishing
0:22:12 and we’re talking about books and you guys are the powerhouses and this is not going to be fair but
0:22:17 that’s going to be the argument that plays out you also mentioned how bad this is for paramount i
0:22:25 think that is worth highlighting because i mean david ellison has really he’s hung his hat on this whole
0:22:34 thing this has been the plan for months and we saw last week as things were developing he sent a letter
0:22:41 to uh the board of warner brothers complaining that they were unfairly giving preferential treatment
0:22:46 to netflix and saying that this wasn’t fair and they were not upholding their fiduciary duty i mean he
0:22:53 made it very clear to the market to everyone how much how important it was to get his hands on the warner
0:22:57 brothers assets and then you look at the stock reactions as soon as the news came out the netflix
0:23:03 is buying warner brothers there was not that much reaction from from comcast from when you look at
0:23:08 disney stock when you look at netflix stock even there’s one stock that got burned and was paramount
0:23:14 which fell six percent on the day down 12 percent on the week so they are certainly in a in a tough
0:23:20 position right now well you’d mentioned also theaters uh movie theaters which are already in structural
0:23:26 decline need a certain number of new releases to be profitable and historically when mergers actually
0:23:32 decrease the number of theatrical releases so when disney bought fox in 2019 the number of films
0:23:38 released annually declined by 44 so this would potentially make the movie theater business even
0:23:44 worse and let’s be clear david ellison isn’t hanging his hat he’s hanging his gold-plated big wheel i
0:23:50 fucking hate rich kids ad i just fucking hate them well like he lost i thought he was gonna win he
0:23:55 didn’t he he couldn’t pull it together it’s like he went to princeton and he’s like 30 under 30 or
0:24:05 something me and david ellison yeah you and you and big d all right my brother good analysis good crisp
0:24:11 analysis well before we before we end here i i just want to um point out one thing which is i think we should
0:24:19 just recognize how crazy it is that netflix this fledgling little company that showed up
0:24:27 20 years ago has now taken over the entire industry and i just want to read you a quote from 2010
0:24:35 this was a quote by jeff bukas who was at the time the ceo of time warner is this the albanian army
0:24:43 quote it is let me read it to you so they were asking him about netflix and whether netflix is
0:24:49 gonna just kind of destroy hollywood or take over hollywood he said it’s a little bit like is the albanian
0:24:59 army going to take over the world i don’t think so here we are 15 years later netflix is the largest
0:25:06 streaming entertainment company in the world and it has literally bought warner brothers discovery
0:25:13 for 72 billion dollars i just want to get your reactions to how phenomenal the rise of netflix
0:25:17 really has been first off i’m a little bit defensive because jeff is a mentor of mine and i’d like to
0:25:21 remind people that he’s probably been the best ceo in the history of media as it relates to shareholder
0:25:26 value he sold the magazine business and the cable but he knows exactly when to sell which is where ceos
0:25:31 really fall down they’re good at acquiring they’re not good at selling anyways anyways anyways yeah
0:25:36 he made that comment it was it was it was a bad comment it didn’t age well in terms of netflix
0:25:44 i bought netflix for what is now about three dollars a share that’s the good news in 2010 the bad news is
0:25:48 i bought in november it went down to two dollars and seventy cents a share so i sold it for the tax
0:25:55 loss and i never bought back in and today it’s at 101 so the acquisition the purchase of netflix
0:25:59 was the best decision i ever made selling it for a tax loss and not buying back in i want
0:26:04 to find a time machine get in the time machine go back find me kill me and then come back and kill
0:26:14 myself so i i i hear the term netflix and i i start to feel a little bit nauseous but yeah the netflix is
0:26:22 and if you think about it they were delivering dvds by mail and then they made this huge pivot they saw the
0:26:27 broadband was finally living up to its promise and they made what is arguably one of the most
0:26:35 bold pivots in history uh into streaming and they also adopted the amazon model of quite frankly
0:26:39 overspending to try and run away with it with cheap capital recognizing that other media camp
0:26:44 companies had made the mistake of get letting their shareholders lips get around the cracked pipe of
0:26:50 profits and they said no we’re not profitable we’re going for growth and share and investors loved it so
0:26:56 they could just show up with quite frankly more artillery but netflix is arguably one of the great
0:27:02 success stories probably the success story the biggest success story in media um would you say
0:27:07 more maybe it’s meta anyways i’m going with netflix but yeah what they’ve done is just extraordinary
0:27:14 we’ll be right back after the break and if you’re enjoying the show send it to a friend and please
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0:30:55 we’re back with prof g markets anthropic is gearing up for an ipo which reportedly could arrive
0:31:02 in early 2026 open ai appears to have a similar timeline setting up a race to the public markets
0:31:08 this moment marks a new chapter in the ai story one that has evolved at a rapid pace over the past year
0:31:15 we’ve seen model launches we’ve seen massive capital expenditures numerous circular deals growing bubble
0:31:23 fears and now it appears that the ipo race is on so scott um we’ll get your reactions to
0:31:29 anthropic potentially going public those are the reports but i also do think this is kind of a good
0:31:34 moment to just kind of review where we are in the ai story which has been through
0:31:39 many twists and turns throughout 2025 and we’re coming to the end of the year here
0:31:44 um but i’ll just start off with just the way we want to frame this and that is
0:31:48 clearly we are entering a new chapter but i just want to go over the chapters that we’ve seen
0:31:54 in the ai story so far um you know we started at the beginning of the year with what we would
0:32:01 describe as a sense of optimism about ai um there was deep seek of course which made people anxious
0:32:07 but then we very quickly got over it nvidia led the gains the s&p hit a record high then we went into the
0:32:13 the second chapter which was what seemed to be the euphoria chapter and that is where the majority of
0:32:19 the gains happened this year we saw all of these crazy ai deals that were announced massive capex
0:32:27 uh spending increase announcements and it seemed that ai could do no wrong now we’re entering into this
0:32:32 kind of we don’t know what to call it phase uh where people seem to be a little bit more anxious about
0:32:38 what is happening um and this leaves anthropic and open ai and kind of an interesting position going into
0:32:46 2026 so i guess just to start start this off where would you say we are at in the ai cycle right now what
0:32:53 how would you describe the market sentiment towards ai and then we’ll get into anthropic it feels as if
0:33:00 around the narrative going from ai boom to ai bubble that the market is climbing a wall of worry and that
0:33:06 is the valuations aren’t coming down i mean they come down a little bit but not a lot the numbers seem
0:33:13 to be supporting or continue to kind of roll on um if i had to peg where we are relative to the dot-com
0:33:19 bubble we’d be in 97 or 98 and generally what you find in bubbles is when valuations go crazy they
0:33:25 then go insane i feel like we’re right now in crazy town but so i actually believe valuations are probably
0:33:33 going to continue up and i really like this i think they were smart to kind of step on open ai and announce
0:33:40 an ipo i think the ceo there is managing his brand really well i think he’s sort of a he comes across
0:33:46 a bit more as a grown-up and a bit more civic minded than than sam altman who all of a sudden
0:33:52 decides that porn is okay and also i like the b i mean i have a bias because i’ve always about b2b
0:33:59 companies not b2c uh or my most successful companies have been b2b not b2c and this feels more b2b
0:34:09 anthropic than than the b2b open ai so uh i i like this i will probably try and get in on the ipo if
0:34:14 it actually happens because i think the first big guys that get out i think the retail market is just
0:34:19 going to go crazy regardless and what they’ll do is they’ll price it if you can get into the ipo they’ll
0:34:25 price it below what they think it’s going to go out at because it’s a it’ll be a branding event for these
0:34:29 guys and they’ll want the stock to pop what are your thoughts i think there are two differences
0:34:35 between anthropic and and open ai like if we’re just going to simplify things down very very simply the
0:34:40 the first difference is what you mentioned which is open ai is a consumer company anthropic is an
0:34:47 enterprise company anthropic’s generating 80 of its revenue to uh from enterprises selling their api to
0:34:56 businesses and for open ai it’s flipped 75 of their revenue comes from consumer so that’s the first big
0:35:02 difference if you’re if you’re thinking okay one one is a consumer player and one is an enterprise play
0:35:11 and then the other difference and this is why i it sounds like you are bullish on anthropic i am yeah i am
0:35:19 two and the reason that i am bullish largely is because kind of as you say anthropic is the responsible
0:35:25 ai company and we’ve talked about the difference between how a company how ai companies are innovating
0:35:29 technologically and then the work that they’re doing economically in terms of balance sheet management
0:35:36 and financial management anthropic is the startup that is spending a lot but not spending like totally
0:35:42 crazy they are on track to break even by 2028 meanwhile you look at open ai they are projecting
0:35:49 to spend or or lose 75 billion dollars in operating losses in the same year they’re going to burn 14 times
0:35:59 more cash than anthropic through 2030 so open ai is the the the company that is basically drunk on spending
0:36:06 and anthropic isn’t and i think that that is a really big deal and i think it is
0:36:11 important in terms of the ai narrative which i can get into in a moment but this is very relevant
0:36:19 because our our buddy andrew ross sorkin spoke with the ceo yesterday at the deal book summit
0:36:28 um the ceo of anthropic is dario amade and he basically said what we are saying and what we have
0:36:33 been saying in in no uncertain terms let’s just listen to what he said i think there’s a real dilemma
0:36:40 deriving from uncertainty and how quickly the economic value is going to grow and the lag times
0:36:44 on building the data centers that that drives it so i think there’s genuine uncertainty there’s
0:36:50 genuine dilemma which we as a company try to manage as responsibly as we can and then i think there are
0:36:56 some players who you know who who are yoloing who who pull the wrist dial too far and i’m very
0:37:01 concerned who is yoloing so i that’s a question i’m not going to answer the answer is open ai
0:37:08 your reaction scott well yeah he’s coming across as the adult in the room when it feels like sam is
0:37:13 saying we just purchased 300 billion dollars assigned a framework for a 300 billion dollar
0:37:18 agreement i mean haven’t they committed to something like 1.2 trillion dollars yeah one and a half yeah
0:37:26 it’s just sort of it feels very musky to me that oh it’s a lot of jazz hands and he brought up and
0:37:30 this is probably virtue signaling i don’t know if house and serious but he said that look this is going
0:37:36 to have a huge impact on employment and labor and society and maybe we should be thinking about some
0:37:42 sort of tax for the massive increases in value uh fostered or inspired by ai companies he probably
0:37:48 realizes that would never go through but he just comes across is a little bit more measured a little
0:37:54 bit more thoughtful and again i like their positioning the kind of safer more responsible enterprise
0:38:03 ai and its affiliation with amazon i prefer anthropic to or or clod to chat gpt i find it’s
0:38:10 a little bit more rigorous and hallucinates a little bit less i use them both cautiously pessimistic is the
0:38:15 right way to describe this market because you know there are some red flags here insider selling
0:38:20 reached a 25 year high to november and the last time that happened was in 2019 before the last
0:38:25 kind of hiccup um and there were also spikes in insider selling before the great financial
0:38:34 recession and the dot-com crash in other words i would bet a ton of people at open ai and at anthropic
0:38:38 especially with the decision around the ipo which supposedly is going to potentially fetch
0:38:45 a 300 billion dollar valuation i bet insiders are selling like crazy right now in these secondary
0:38:53 markets so you know if if the market stays just level it doesn’t even need to keep going up these ipos
0:39:01 will be huge because there really aren’t that many pure play ways to play the ai market right now you can
0:39:06 invest in microsoft you can invest in i guess nvidia is the pure play but nvidia at five trillion
0:39:15 so it these things will be monstrous there’ll be ipo events as long as the markets they don’t even need
0:39:20 to go up stay where they are i think they’ll get out i’ll be very curious to see if see if open ai
0:39:25 decides if they want to kind of announce it but this is a very strategic from a branding standpoint
0:39:30 basically anthropic kind of stepped on open ai and dump it’s going to dominate the news cycle over the
0:39:36 next few days about and there’s generally a connotation that the company goes that goes public
0:39:42 first is further ahead than the others which may or may not be true but if i were going to invest in
0:39:47 either company right now at their current valuations i would probably purchase uh anthropic
0:39:54 yeah i think the the narrative that we’re trying to sort of map out right now is is really important
0:39:59 and it’s very confusing because as we’ve said you know this ai story has been going up and down and
0:40:06 and the forces of fear and greed have been really in conflict with each other and it’s been very unclear
0:40:12 i mean as i said over the summer it was very clear that everyone was very bullish on ai and now the
0:40:17 question is like how do people really feel about ai and i think what you said they’re cautiously
0:40:25 pessimistic is a good way to put it and you know there’s this uh this the fed has this economic news
0:40:31 sentiment index where they basically just map out what what news outlets are saying about the economy
0:40:37 and how bullish they are and you know you can go find this chart but basically what they map out is that
0:40:44 you had this giant trough when the tariffs hit so everyone was very very scared then over the summer
0:40:50 you had this giant rebound and suddenly everyone was very bullish and then as we went into the fall and
0:40:54 as we started to hit november it came back down again and i think there’s probably a mixture of
0:40:58 the circular deals that we’re seeing and everything that people were saying they were concerned about
0:41:03 when they saw open ai announcing these ridiculous deals and oracle saying they’re going to spend all of
0:41:11 this money and i think that a good indicator of of how the market feels about things specifically ai has
0:41:17 been the market’s reactions to these capital expenditures and these announcements of capex
0:41:24 in these earnings because during the summer if you announced a big capex increase if you said we’re
0:41:30 going to spend a ton on on ai your stock went up and we saw this with microsoft this happened in july
0:41:35 they released this record capex forecast stock goes up seven percent google did the same thing stock
0:41:41 goes up as well method did the same thing their stock went up eleven percent now the opposite is starting
0:41:46 to happen where if you increase your capex so you say we’re going to increase our spending suddenly the
0:41:51 market gets scared and that’s exactly what we saw microsoft they report earnings they announce an
0:41:57 increase in capex similar to what they did back in the summer but the stock drops three percent meta does
0:42:03 the same thing they get more aggressive with their capex the stock drops more than ten percent so it’s so
0:42:10 interesting because when the same thing is happening when the same material thing is happening increasing
0:42:17 your spending you’re seeing these wildly different reactions from the market which is carrying with it
0:42:24 trillions and trillions of dollars worth of market value and i think what that tells us is the the
0:42:31 narrative the sentiment the vibes whatever we want to call it is actually incredibly important right
0:42:36 now when it comes to ai it’s actually not the fundamentals that are doing much work here in terms
0:42:42 of valuations it’s the story that people are telling themselves about ai and it’s the vibes it’s how
0:42:48 people feel about ai right now so having a good understanding of what the vibes are what is the
0:42:56 sentiment what is the narrative is actually crucial to understanding how the market is going to to
0:43:02 move over the next several months the next year or whatever you want to call it and if i had to make
0:43:08 any predictions about where the narrative is going what the sentiment is going to be i think what we
0:43:15 are about to see is that the age of exuberance and these big grand visions of artificial general
0:43:21 intelligence which used to be very sexy as recently as the summer i think that that’s going out of
0:43:27 fashion i think the investors are now getting scared of that they’re scared when sam altman goes on
0:43:31 on these podcasts and says these you know wishy-washy vague statements about the future of
0:43:37 the universe which used to be very a very bullish signal to the market i think that is flipping i think
0:43:44 markets are now more excited about the people who as you say come out as the adult in the room who say
0:43:50 here is our responsible plan for how we’re going to manage the balance sheet and spend the cash that we
0:43:56 have on data centers and ai over the next few years and i think that is going to be the bullish signal
0:44:03 which is why i believe that in 2026 the ai company of the year is going to be anthropic
0:44:09 because they are signaling all of these things to the market and i i would not be surprised if by
0:44:15 the end of the year i mean whether or not they’re making as much money as open ai or more or less i think
0:44:22 their valuation will be higher than open ais your big prediction in 2024 was oracle and you got that
0:44:29 right the thing that worries me is that you know ai they say ai will someday surpass human morality
0:44:35 and which cracks me up because it it’s been crawling the internet so it means it’s
0:44:39 you know if it’s trying to learn morality it’s like learning hygiene from a
0:44:45 raccoon behind a 7-eleven it’s just one of the things that really bumps me out about ai
0:44:51 that was good i’m a little punchy i took i couldn’t sleep last night so i took something called the hulk
0:45:00 xanax hulk xanax wow did i sleep well oh my god like the nanny had to shake me to wake me up
0:45:11 um it’s like mr scott mr scott by the way she’s german she’s german she’s not she’s not latin she’s
0:45:18 german okay she had different plans for me 80 years ago um all right do you want to continue to talk
0:45:27 about ai or would you rather talk about hulk’s annexes yes my 2026 ai company is going to be
0:45:33 and my big tech stock pick i just did this prediction stack the ai company of 2026 is going
0:45:42 to be amazon and i think the best application of ai is the second best application i actually think
0:45:48 the llms are a bit out over their skis the ipo branding event where anthropic will price the ipo
0:45:53 below its market demand such that they can have that once in a lifetime branding opportunity of
0:45:59 saying the stock pop 40 or 60 that’ll happen but the greatest increases or shareholder value increases
0:46:06 will happen to uh in my opinion and maybe it’s already baked in alphabet because i think waymo i
0:46:11 think autonomous is an incredible application of ai that actually results in real money being made and two
0:46:16 or the number one beneficiary of ai is going to be amazon because i think that the chocolate and peanut
0:46:22 better of ai is ai and robotics and i think amazon is about to become if it’s not already the ford of
0:46:29 the 21st century and that is ford over the course of 15 years reduced the time to build a car by 90 percent
0:46:35 and amazon is on the same pace to scale the time from a click to the time and orders fulfilled and they
0:46:40 think by 2032 they could double their retail revenue which is the largest part of their business
0:46:46 by gross dollar volume without adding any additional employees and the investments here’s a stat that’ll
0:46:53 just blow your mind or a blue mine the number of robots in operation auto automated robots you know
0:47:03 industrial robots in the u.s it’s 400 000 uh excluding amazon amazon is a million the only entity that has more
0:47:12 that is deploying or utilizing more uh operational robots is china and the number two is amazon the
0:47:19 corporation and i think ai training these things is finally in their purchase early and off in akiva
0:47:23 their revenue per employee is actually way down relative to the others because they’ve been making
0:47:31 an extraordinary investment in capex around robotics and now ai ai on its own as a consumer application
0:47:36 in my view right now is overpriced to the exception of the the private to public branding event of
0:47:41 anthropic but the real shareholder value increase is going to be from amazon that’s only up six percent in
0:47:46 the last two years versus the others which are dramatically more because they’ve been spending so much
0:47:51 money on this shit but i think about that investment is about to pay off so where ai really adds stakeholder
0:47:57 value i believe will be through autonomous leader in autonomous is way waymo but the real champagne and
0:48:03 cocaine is going to be ai and robotics at the hands of the largest retailer in the world amazon
0:48:08 yeah i i totally agree i think the robotics have not gotten nearly enough attention and
0:48:13 the the china point is such an important one it’s like robotics is one of those things where we are
0:48:19 just so far behind china it’s not even it’s not even close but yes amazon seems to be the only
0:48:24 sophisticated company that is that is properly investing in this technology so i would agree with that
0:48:32 we’ll be right back and for even more markets content sign up for our newsletter at profg markets dot com
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0:50:41 we’re back with prof g markets the trump accounts program has officially launched this initiative gives
0:50:48 every child born between 2025 and 2028 a 1000 contribution to a tax-deferred account invested
0:50:54 in low-cost index funds the funds can only be accessed once the child turns 18 that money will
0:50:59 help these kids once they become adults but it does raise a bigger question what about the years
0:51:03 before that and how are we investing in children while they are growing up right now
0:51:09 the picture isn’t great adjusted for inflation federal investment in kids has fallen 40 percent
0:51:16 since 2021 and their outcomes reflect that decline math and reading scores are dropping sharply literacy
0:51:22 rates are at their lowest levels in decades so scott let’s start with these trump accounts we had
0:51:30 brad gerstner on on the daily show uh last week to tell us about how this all came about he was the
0:51:36 guy who really pushed this through congress he met with trump he had some funny stories about meeting
0:51:43 with trump um but he’s kind of the guy behind the behind this um he was very excited about it i just
0:51:49 want to get your reactions to the trump accounts we give kids a thousand dollars when they’re born it
0:51:53 goes straight into the markets locked up since until you’re 18 years old well on the whole i like it
0:52:00 so i like the concept of thinking very long term and australia has their super fund i forget what
0:52:06 it’s called but yeah superannuation superannuation and it’s it’s it really has i i think paid dividends
0:52:14 for them but i think okay so let me back up i really what really bothers me and i think it’s really
0:52:19 upsetting is just how much shit and criticism the dells are coming under i just want to clarify
0:52:25 with people because we didn’t say this out loud but for those who don’t know the dells have donated
0:52:34 6.25 billion dollars uh to this these trump account programs and they’re basically giving 250 dollars
0:52:40 to millions of kids around the country and then they’ve gotten some pushback from people who say oh
0:52:46 these are billionaires just giving giving this money to get in good with trump or or whatever the criticism
0:52:51 may be and there’s some veracity to that dell is no accident one of the people that is getting a big
0:52:57 slice of the tiktok pie that democrats don’t have access to but i just i think it’s bullshit to
0:53:03 criticize the dells for giving six billion dollars to kids should rich people be dictating public policy
0:53:08 should we just not tax billionaires at a greater more progressive rate and then let our elected
0:53:15 representatives representing uh broader populace decide our our priorities yes having said that at some
0:53:19 point folks if you want to keep criticizing people billionaires who are giving money away they will
0:53:24 listen and they will stop giving money away so i that part of this what’s played out here is
0:53:30 kind of bothered me or i don’t think it’s fair i like the idea i don’t like the execution and that is i
0:53:34 think this for this to be a three or four year program while donald trump is president
0:53:39 and it to me it’s like okay what we need is co-equal branches of government to create things
0:53:49 that are systemic and last beyond the 36 months he has left and my i like the idea of money letting
0:53:55 compound interest and a little bit of government money uh compound such that a long way in the future
0:54:03 we have more financial stability for people so what do we we want to take advantage of compound interest
0:54:10 we want to also recognize that a lot of people are not do not understand compound interest and that one
0:54:16 of the key advantages china has over the u.s is they think in 50 year terms we think in 24 month terms
0:54:23 because of citizen united and the fact that people are basically will do whatever will say and do whatever
0:54:27 they can to get re-elected in 24 months or every six years or every four years in senate and the
0:54:33 presidency respectively the idea i like i actually thought bill ackman’s idea was a really good one
0:54:37 seven thousand dollars to every baby born 40 billion a year and then in in they can’t touch it until
0:54:43 they’re 65 and if the market continues to do what it’s done eight or nine percent since the beginning
0:54:48 of the markets the kid ends up with a million dollars at 65 and you think well okay there’s long-term
0:54:54 thinking and then there’s 65 years but i do not think that 12 to one young people to old people
0:54:59 now gone to three to one makes social security sustainable when you have a democracy where old
0:55:04 people can voting themselves more money and we can’t seem to figure out a way to get a 40 billion
0:55:08 dollar tax credit for kids through but 120 billion dollar cost of living adjustment for social security
0:55:13 flies through the transfer of wealth from young to old in this country who are the wealthiest generation
0:55:18 in the history of the planet seniors of 1.2 trillion a year makes no fucking sense and is not sustainable
0:55:25 so what do you do i like this idea i would broaden it i would have congress pass it so it lasted more
0:55:31 than 36 months and we pretended we had co-equal branches of government i’d go 40 billion a year
0:55:37 seven thousand dollars per kid born they can’t touch it till they’re 65 and finalize them low cost ets make
0:55:42 some sort of contribution tax efficient or whatever from the employer or from grandma and grandpa such that
0:55:49 the kid builds his own retirement fund and then when they’re 65 in 30 years basically you could
0:55:52 say in 30 years we’re not going to need social security because everyone’s going to have between
0:55:57 one and three million dollars and then interest rates would come down enough because of the reduction
0:56:01 in the deficit spending and the excitement around not having a social security transfer every year
0:56:06 that the lower interest rates would begin to pay for the program itself so i want long more
0:56:11 long-term thinking i want to lock this money up till 65 and say no one in america will need social
0:56:16 security for 40 billion a year we’re going to get rid of social security and we’re going to start to pay
0:56:21 for it through lower interest rates in 20 or 30 years when people see the light at the end of the
0:56:25 tunnel so i like the idea of compound interest i like the idea of accounts i do not like the idea
0:56:35 zero to 18 favoritism donors leaning on the generosity of rich people and a lack of co-equal
0:56:40 branches of government such that the next people that come along are going to do away with this
0:56:46 bullshit it’s so interesting because it sounds like most people agree that this is actually a
0:56:52 good idea i feel like that is so rare with government policies where everyone just kind of like looks at
0:56:58 it no matter what side side of political spectrum you’re on and they just say oh yeah this makes
0:57:03 sense and it’s like what is interesting and i agree with all of your comments is the the only things that
0:57:09 we are that we can find fault in this is that it it’s not going to last long enough or it’s not going
0:57:16 to be implemented as strongly and vastly as perhaps we would like because it is such a good idea and i
0:57:22 think that is very true it’s like this is one of those great ideas that we want to last for a really long
0:57:27 time and we want it to have bipartisan support and we want no one to be poking holes in it and saying
0:57:33 no that this this or not poking holes but we don’t want people just flagging it down because they don’t
0:57:42 like it for you know biased or political reasons and so if i were to make one amendment to these accounts
0:57:49 my one amendment and i agree with yours but my bigger than that my amendment would be do not call
0:57:58 them trump accounts 100 he’s politicized it exactly it’s like that’s the one way to make sure that this
0:58:04 will not last beyond the duration of his presidency because i’m sorry if you’re going to be as ridiculously
0:58:12 divisive as he is attaching your name to anything this is the price you pay being donald trump if you
0:58:17 want to shit on people and be rude to people then yeah you are going to alienate half of the country
0:58:23 which you have done and if you attach your name to anything any piece of legislation half of the
0:58:29 population will find a way to not like it and that’s what frustrates me so much is i think brad’s
0:58:36 goal with this was only coming from a good place and same with michael dale i mean maybe he’s going
0:58:42 to get some benefits but look he gave six billion dollars away and now that they’re called
0:58:49 trump accounts it’s like all everyone who is even remotely left-leaning is looking for a way to say
0:58:56 this is wrong or this is corrupt and it really isn’t it’s actually good policy do you think that
0:59:01 the brand the branding is interesting i was thinking did they make the same thing with obamacare but it
0:59:06 was really called affordable care act right did it did it take on the moniker of obamacare i think that
0:59:12 that was what they dubbed it and and by the way you know uh brad made this point as well about you know
0:59:17 rough iras it’s like the guy who who’s in charge of getting it passed in this case it was trump
0:59:24 usually the policy is named after that person but i just you know trump let let’s not pretend trump is
0:59:32 like any leader in history let’s not pretend that he is remotely as you know amenable or neutral
0:59:40 to people than any previous president he’s the most divisive aggressive polarizing president and
0:59:46 political figure we’ve ever seen and it’s by design he wants to be that person so yeah like i don’t
0:59:50 want his name on it well you know he was asked about it today and did you see what he said no
0:59:59 i love that he’s falling asleep i’m so here for it and when rubio goes on this thing about war and
1:00:04 geopolitics and how this is the only president that could solve this problem and bring peace to ukraine
1:00:13 and he’s sleeping uh i love the idea of compound interest i love the idea of uh getting rid of
1:00:20 some of our get i just want to get rid of social security and enforcing you start them off with six
1:00:26 or seven thousand you create all sorts of tax incentives you totally go you infantilize people
1:00:31 they can’t use it till they’re 65 or until they die or they their kids get it or whatever and there’s
1:00:36 no senior poverty there’s no social security you just don’t need it and because these people have
1:00:41 these investment accounts and they can start to build wealth and there’s some interesting similar
1:00:48 programs around the world i think i mean sorry singapore gives people homes you know how do you
1:00:56 how do you start getting people to invest 58 of us households hold stocks but the top 1 owns nearly 50
1:01:03 while the bottom 50 is just 1 um income inequality has obviously gotten worse the share of national income
1:01:10 going to the top 1 doubled between 1980 and 2022 and uh congratulations to brad i think this is a
1:01:17 real feather in his cap um and then major donors are you know and i think they should be applauded for
1:01:21 this for scaling the program beyond government funding you know you can see it being like
1:01:28 little rachel’s bat mitzvah you just put money into this account right it becomes a place where gifts go
1:01:33 instead of like getting your kid you know playstation or something you put another 50 100 200 bucks
1:01:40 whatever it is and it’s tax advantage maybe grandparents can use it to you know start giving money away tax
1:01:47 efficiently but i like this i like the concept one of our flaws in our species that you want to take
1:01:54 advantage of is that our species has a difficult time literally registering for 99 of our time
1:01:59 so far on this planet the average life expectancy has been 35 or less like you’re already a senior
1:02:05 citizen in most of history because a bad cut a broken bone mean or war or childbirth usually meant at some
1:02:13 point in your 30s you died and now that’s it the thing about that i find so amusing is that
1:02:19 in 10 years you’re going to look at yourself you’re going to be 36 and you’ll be like oh i’m 36 i’m 36
1:02:23 old at elson i’m just 10 years older but you’ll be fine with the way you look when you hit 46 you’re going
1:02:31 like oh my god what happened and it’s because when you look in the mirror as 45 your brain can’t process it
1:02:36 because you’re not supposed to be around and that way you’re like jesus christ i’m fucking ugly
1:02:42 i mean it’s really ed i’m telling you i just like trying to avoid mirrors right now um anyways
1:02:48 the species has a terrible time calibrating time specifically we have a difficult time really
1:02:54 imagining we’re going to be around when we’re 85 and if you could give people a magic box that says all
1:02:59 right trust me on this ed elson you’re going to wake up and you’re going to be my age and you’re
1:03:04 going to get over how fast it went and you understand finance you know putting a thousand bucks away now
1:03:10 is 10 or 20 or 30 grand then but most people just even if they intellectually get it they don’t
1:03:16 emotionally believe it so let’s take advantage of flaw in the species and let’s start investing uh
1:03:22 in kids from a very young age such that and maybe you give it to them who knows maybe give it to them
1:03:29 when they’re 40 and the other stat i love about compound interest is uh my kids are my youngest
1:03:35 we’re moving back to new york my youngest is applying to schools there and i was thinking about it you know
1:03:40 i put my kids in private school because i probably i went through all public schools and then i was one
1:03:42 of those people the kids are never going to go to private school and then boom all of a sudden
1:03:49 they’re in private school but if you’re really honest if you took the sixty eight thousand dollars
1:03:56 that whatever it is brooklyn poly prep or you know these or or or avenues charges in manhattan
1:04:01 and instead you sent them to the local public school and you put that sixty eight thousand dollars
1:04:07 in a low-cost etf from the age of four until they were 18 and then you left it in there assume you’re
1:04:12 wrong assume that in fact public schools aren’t as good as private schools and the kid didn’t
1:04:17 get into as good a college and he didn’t find the right job at google or kkr and at 35 he isn’t doing
1:04:25 as well as the parents who put their kids in avenues or grace church or wherever well at 35 with that with
1:04:29 that money you’d be able to give your kid three and a half million dollars which makes up for a lot of
1:04:37 lost time so people really don’t have a sense for how much decent amounts of capital early on
1:04:43 can result and can compound and it’s it’s a flaw in the species that everybody wants to take advantage
1:04:49 of figure out a forced savings plan from a very young age and start uh start putting it away i think those
1:04:53 are all such important points because it’s like what we need to be doing is figuring out a way
1:05:02 to invest in children full stop and the question is like how do we how do we implement that and there
1:05:07 are many different ways to do that and all that we’ve done is just like present a way that apparently
1:05:12 billionaires are down with i mean yes you could just raise taxes and you could invest more in children
1:05:18 but at the very least this is like a we’re seeing this work i mean the proof’s in the pudding here michael
1:05:23 dale came out and and gave six billion dollars that is being invested directly in children
1:05:29 but then it brings up this question of okay how do we keep going because at the current clip of our
1:05:36 investment in children as you’ve talked about many times before it’s not nearly enough we currently spend
1:05:42 nine thousand dollars on each child every year that’s the u.s government’s expenditures on children
1:05:49 and for comparison it costs us seventeen thousand dollars to deport a single person so we’re spending
1:05:54 all of our time on these deportations as katherine and edwards told us we spend more on deportation
1:06:03 that we spend on child care and school lunch we’re not spending nearly enough on children and we’re
1:06:07 seeing the results for themselves i mean obviously there’s the there’s the effects of technology in the
1:06:14 but we’re literally seeing that math rates and literacy rates among children are plummeting right
1:06:19 now reading scores have reached their lowest levels in decades only a third of eighth grade
1:06:27 is actually less than a third have what we call a proficient reading score so these are huge issues
1:06:34 um that that we we clearly need to start thinking more critically about and then i think what i like
1:06:39 about your point about how you would invest your money depending on where where where uh your kid
1:06:46 goes i think it’s important to think about our investment in children from a financial and roi
1:06:51 perspective like we should consider the fact that if you invest in the education of children now
1:06:56 if you invest in the livelihood of children it will pay off later because they’ll be more productive
1:07:02 citizens and they will contribute to economic growth and in fact a stanford report just studied
1:07:09 this flat out and they found i find this fascinating if we raised student achievement to levels that we
1:07:15 saw in 2013 not that long ago but combination of many things including coven means that achievement
1:07:20 among students has just fallen off a cliff if we did that the lifetime earnings of the average student
1:07:27 would rise by eight percent and also gdp growth would be on average six percent higher and that’s just if
1:07:32 we got our act together in terms of educating children i think the larger point being this is
1:07:41 a start but there’s a ton of work to do when it comes to simply investing in children today and we are
1:07:47 massively falling behind it seems like what do we do what do we do besides invest america
1:07:51 oh okay property taxes no longer are the funding vehicle for schools because
1:07:58 um schools being dependent upon property taxes means low-income neighborhoods have less money for schools
1:08:04 we need to reform education and have hold unions and teachers more accountable we keep throwing money
1:08:10 even when we throw money at the problem it doesn’t fucking work we need to uh start kids boys at six
1:08:15 versus girls at five we need to recruit more men into these schools so boys feel like they’re seen
1:08:21 more we need to have more freshman seats at universities such that if you’re not growing
1:08:26 your freshman class faster than population growth you lose your tax free status because you’re no longer
1:08:32 a public servant you’re a hedge fund with classes we need more vocational programming we need tax credits
1:08:39 we should offer every university has to uh have 20 of its certificates be one and two year vocational
1:08:45 programs whether it’s nursing or specialty construction or cyber security uh we need to have child tax
1:08:52 tax credits um i mean uh i would be up for letting single mothers with kids have two or three votes
1:08:57 because the d in democracy is working too well old people keep voting themselves more money and as you
1:09:02 said you know your budget reflects your values and when you’re spending more money on separating
1:09:06 undocumented workers from their families and deporting them than you’re spending on kids
1:09:13 it says that you’ve decided that our priority is deportation and not children which just makes absolutely
1:09:21 absolutely no sense so and unfortunately we are creating this out of control caste system when we
1:09:28 spent 150 000 on a poor kid’s education and we spent a million dollars on my kids education well what do you
1:09:33 know kids from rich households are 77 times more likely to get into an elite university and less likely to be
1:09:39 obese depressed more likely to get married more likely to run uh you know more likely to run for congress
1:09:46 just the numbers are absolutely striking here you have we have to at the end of the day we have to
1:09:52 figure out a way in america where your america is not about how rich your parents are that the signal for your
1:10:00 success if if a kid from a poor household takes the sat on average he does 150 points worse than the
1:10:06 kid from middle income home okay 150 points and then where income inequality really goes crazy is the
1:10:12 upper income kid scores 250 points higher than the middle income kid so if you were going to have true
1:10:18 flattening or true equality when a kid shows up from a low-income household to take the sat
1:10:23 he or she has spotted 380 points meaning if they get a 1220 that’s a perfect score
1:10:31 and so we’re perpetuating we’re perpetuating a cycle of income inequality and rage and young people
1:10:37 who won’t have the opportunities to mate so i think from a very very early age we have all sorts of
1:10:41 affirmative action in government programs it is not based on identity that creates more problems than
1:10:46 it solves it has nothing to do with your sexual orientation your race your gender it’s based on how
1:10:53 much money mom and dad have full stop exactly and we’re going to infantilize the household we’re not
1:10:58 maybe don’t give you straight up cash i would do it in form of universal child care uh tax credits for
1:11:06 the kid i mean i’m i’m talking my own book here because i got assisted lunch in elementary school and
1:11:12 when i think about how decent government and california taxpayers are we used to have these coupons to get
1:11:16 lunch and they would send the coupons to my house and made sure that the coupons look like the
1:11:22 that were purchased by everybody else so i wouldn’t feel any sense of shame and pell grants i got so
1:11:27 i’m just talking my own book here but people look at me and think okay he’s not the recipient of
1:11:33 affirmative action yeah i was and at the same time i don’t think trevor noah or tyler perry’s kids
1:11:39 deserve any sort of leg up here anyway i i think a lot of this just comes back to money i think the less
1:11:43 government programs in the middle of the better because unfortunately government programs become like
1:11:48 parasites or barnacles you can’t scrape them off i do think there’s something about reforming the
1:11:52 department of education i hate to say it don’t disband it by a woman who doesn’t know the difference
1:11:57 between a fucking steak sauce and calls ai a1 okay that’s probably not going to be thoughtful reform
1:12:05 but the department of education has consistently gotten increases in funding since since w or since
1:12:10 george herbert walker bush and the outcomes keep going down so this means it needs radical reform what’s
1:12:15 happened in mississippi is very interesting all this wokeness around phonics and everything or
1:12:19 images and then they realized kids aren’t reading it was like when the blue man group started in
1:12:23 elementary school and was all about shapes and feelings and emotion and then they woke up and said
1:12:29 my 15 year old can’t fucking read or write so i do think there needs to be radical reform but at the
1:12:34 end of the day your household we are the wealthiest nation in the world every household needs a basic
1:12:39 level of income i don’t like ubi i want to encourage people to work 25 an hour minimum wage
1:12:44 and anyways i i could go on and on and i will my next book by the way is going to be called project
1:12:50 2028 uh ed i know you’re very excited about this but there are a series of things we need to do to lift
1:12:56 up young people and a lot of it a lot of it is making their parents less anxious such that that economic
1:13:02 anxiety doesn’t waterfall down to the kid kids in low-income households have much higher sitting or
1:13:06 arresting distalic blood pressure than kids in middle-income homes you want to talk about a kid
1:13:11 that is from the beginning who’s obese who’s anxious who has poor relationships with women
1:13:18 poor relationships opportunities for mating show me a kid in a low-income household so i’m for more
1:13:22 programs that put money in their pockets but the hand of government isn’t doing it because it’s super
1:13:28 inefficient yeah which i do think this almost exactly does but again we need more of it the final thing
1:13:33 that i would point you to is just you know there’s the the issue that the children themselves aren’t
1:13:40 being invested in enough and then there’s the other issue that is young people at large don’t want to
1:13:47 have children at record levels and the share of people younger than 50 uh say they are unlikely to
1:13:54 ever have kids is at record highs right now it’s half of them and that’s sorry that is among those who do
1:13:58 not have children already so people do not want to have kids right now if you’re young and i feel
1:14:05 like there’s this very kind of uh one-dimensional view of things where it’s like oh it’s because
1:14:13 they’re worried about climate change or oh it’s because um you know that they they don’t want to they
1:14:17 don’t want to put in the work or whatever it is it’s like it’s because it’s just too expensive
1:14:27 right now yeah and the cost of raising a child has risen 25 in two years it’s it’s three hundred
1:14:31 thousand dollars now and that’s not including college so it’s like the reason people don’t
1:14:35 want to have kids right now isn’t because they don’t want to have kids because they can’t afford to have
1:14:46 kids and so what are we doing if if if that’s the the outcome of our policies right now and i guess
1:14:51 all i would say is like i think this is good policy i think it’s i think it’s great i hate that they
1:14:56 are called trump accounts but now it’s like okay how do we take this a step further how do we continue
1:15:02 the momentum how do we make sure that maybe people start matching the dells i mean where is zuckerberg
1:15:08 whereas bezos why aren’t they investing in children as well i think we just need to keep this keep this
1:15:14 train running all right let’s take a look at the week ahead we’ll see earnings from gamestop adobe
1:15:20 broadcom and oracle we’ll get the delayed job openings report for october and we’ll also hear
1:15:27 the last interest rate decision of the year from the federal reserve scott any predictions yeah i said it
1:15:35 earlier my big tech stock pick for 2026 will outperform the rest of big tech is amazon um i think that
1:15:42 they’re huge investments in robotics they have a million automated robots and the rest of the us is
1:15:48 400 000 i think it’s about to pay massive dividends and that the real juice and ai is
1:15:54 around autonomous and uh robotics as it relates to manufacturing and throughput and again they have
1:16:00 managed decreased click to fulfillment by 90 and are estimating they can double their retail revenue
1:16:06 within the next seven years with a zero increase in employment and i think that you’re going to see
1:16:11 margin expansion across their biggest revenue line which is their retail group traditionally it’s been cloud
1:16:18 that has expanded their margins and advertising amazon media group but i think some of these big
1:16:22 investments which has been reflected in their underperformance because they have lower revenue
1:16:31 per employee but i think amazon is about to is about to uh show up with ai enabled robots that uh they
1:16:39 finally start to really um register incredible benefits and yield and margin expansion so anyways big tech stock
1:16:48 pick for 2026 amazon this episode is produced by claire miller and engineered by benjamin spencer
1:16:52 our associate producer is alison weiss me as our research leader our research associates are isabella
1:16:58 kinsel dan chelan and chris no donahue drew burrows is our technical director and katherine dylan is our
1:17:05 executive producer thank you for listening to prof g markets from prof g media tune in tomorrow for a fresh take on
1:17:18 the markets
1:17:40 In love, love, love, love.
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0:01:27 does it ever feel like you’re a marketing professional just speaking into the void
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0:01:57 terms and conditions apply today’s number 60 that’s the percentage of america’s cats and dogs that have
0:02:02 obesity true story i met the president last week and i said jesus you’re obese and he said well it
0:02:07 runs in my family and i said nobody runs in your family a fat fuck
0:02:22 how are you doing scott i’m good i’ve had a busy day i just did my predictions deck to
0:02:27 whatever 22 000 people i’m in london 22 000 yeah what is that madison square garden
0:02:32 plus madison square garden um that’s pretty good 22 is that your is that your largest audience
0:02:38 just for anyone who didn’t know you you always always does his predictions uh deck at the end of
0:02:44 the year and it’s like a live stream i love that you’re live streaming by the way um and
0:02:49 yeah and so you do this every year 22 000 is that the record last year was close i don’t know
0:02:55 maybe i’m tiring um oh fuck that let’s talk about me you did you see i was on oprah have we already
0:03:03 talked about this i was on oprah i was on oprah ed i i know you’re on oprah have you been on oprah oh
0:03:11 no i don’t think so i don’t think so you’re on katie tour every like twice a day but i was on oprah
0:03:15 that’s the only person who wants to speak with me it’s katie tour and that’s it ed i just love
0:03:19 let me just summarize every show you’ve been on msnbc they bring out a bunch of boomers and then katie
0:03:25 goes for the gen z view we bring in ed elson and you go fucking income inequality i can’t trust any
0:03:29 of you and everyone else on the panel looks like they’ve just been caught masturbating they don’t
0:03:35 know how to respond to you it’s like a mic drop every time you’re literally like and everyone who’s
0:03:42 watching msnbc is like he looks like he’s four years old look at that young do you think we could set
0:03:48 them up with our granddaughter where’s my oxygen tank that’s what they’re saying when they’re
0:03:53 watching you because you know they’re old i would push back but i think you’re actually i think you’re
0:03:58 actually completely right on this one that’s exactly what happens every time it’s funny because they’re
0:04:08 old super old what have you been up to ed oh you know just podcasting we have a team drinks tonight
0:04:12 which will be fun where you guys gone we’re going to san vicente which will be good oh who’s a member
0:04:17 of san vicente bungalows who am i paying too much to that’s me you’re a member of san vicente oh
0:04:26 mr treinta mr treinta detras treinta mr 30 under 30 is a member of san vicente how many members
0:04:30 clubs clubs are you a member enough we’ve talked too many about we talk all the time about these
0:04:37 stupid clubs it never gets old it does i’m telling you it does i’m just jealous because i haven’t been
0:04:45 i’m in fucking in 50 degrees and gray weather and less hot people london i’m going to roof gardens which
0:04:51 is a fucking sausage factory all these dudes your work’s so inspiring get away from me where are the hot
0:05:01 checks so head’s head is in his hands head is in his hands just terrible because it is how your brain
0:05:10 actually actually works but yeah we are going tonight by the way i also saw you on on on the this morning
0:05:13 show which was funny because that’s kind of one of those shows that i would grow up watching when i
0:05:18 would when i’d be homesick from school oh the british thing yesterday yeah the british thing i found that
0:05:23 cooler than you being on oprah because that was the show that i was seeing as a kid when i grew up and i
0:05:28 know you i could tell by your demeanor you weren’t you weren’t that excited to be there but i was pretty
0:05:34 excited to see you let me literally break it down i’m about to whatever it is i do in the morning eat
0:05:38 my protein shake and take a walk with the dogs and mary jean starts blowing up my phone saying the
0:05:43 car’s there i’m like the car where am i going you have a live hit on itv and i’m like what the fuck is
0:05:49 itv it’s like it’s a big news it’s a big station in the uk and i’m like no one lives in the uk and
0:05:53 the economy is not growing i don’t want to go on live tv and she’s like you got to go now we committed
0:06:00 to this and i go there and it’s a big operation and it’s exactly the same as the u.s it’s a very
0:06:09 attractive woman and a hot guy and sitting on a couch asking you softball questions and and then
0:06:15 cutting to an ad for restless leg syndrome or opioid-induced constipation ads no because they
0:06:19 don’t have those and they don’t have those in the uk the segment was before me was guessing who was
0:06:23 going to be voted off of love island the british version and i’m like that sounds right and i’m
0:06:29 literally like how far have i fallen like this is what it means to be a thought leader this is cool
0:06:35 you’re on the this morning show with the love island stars i think that’s very cool you should be proud
0:06:39 of that it’s hilarious that you didn’t even know that you were you’re going to be on that show
0:06:44 but that’s exciting you got to be honest with me and we should we should fill up the comments with
0:06:51 this with another one of our innocuous questions is the dog overexposed am i like lassie right now if
0:06:59 last it was kim kardashian and just fucking everywhere i am i have in the last 24 hours i’ve received
0:07:07 three messages from friends that have all said the same thing make it stop make it stop because i’m in
0:07:12 their phone or whatever and meta knows for friends they’re like all i’m getting is fucking videos of
0:07:17 you and i can’t stand it no you’re everywhere it’s crazy i can’t stand it either i think i’m overexposed
0:07:21 well no it’s a good thing you’re trying to get yourself out there but there is a limit well what is
0:07:26 that limit when people get bored i don’t know i just i’m getting attacked online i think that i think
0:07:31 that’s part of it that’s good i mean just saying something i do think i’m overexposed i told the
0:07:36 publicist to dial it back a notch what would be your and then we’ll move on to our actual job which
0:07:42 is covering the news but what would be your dream show to be on you’ve been on oprah you’ve been on
0:07:49 bill maher what what’s next or are you at the top of the mountain my dream show is bill maher i was
0:07:54 one of my dad what my dad used to watch yeah but now now i don’t really have i don’t have anything
0:07:59 left i’d like to go on at some point i’d like to go on rogan and tell him that he’s been spreading
0:08:04 vaccine misinformation and is incredibly reckless and irresponsible but i’m he hasn’t called me for
0:08:10 that um no there’s nothing like i’m dying oh i’m going on colbert i’d like to be on one of those
0:08:15 evening shows that’s cool that’s exciting yeah the late night how about you you’re on your way up and
0:08:24 your your your ascent is like 10 times the velocity of mine uh in terms of where you are you’re oh god
0:08:30 are you kidding at 26 i was trying to like i was following my girlfriend to graduate school and
0:08:35 living with my mother i i had no i i literally didn’t know what to do and i was a waiter at islands
0:08:40 a burger joint you’re on katie tour yeah if this is how we measure success is how many shows you can get
0:08:44 what show would you like to be on my favorite show that you have been on which i would love to be on
0:08:51 is theo vaughn’s show i was so excited when you made it on that show yeah i also think i also think joe
0:08:56 rogan would be amazing i think i’m surprised he hasn’t reached out to you yet he must know that you
0:09:02 were upset with him that must be the reason you’re like oh hold on hold on hold on i pulled all of our
0:09:09 podcasts off of spotify during covid and publicly said it was because joe rogan was distributing
0:09:14 misinformation about vaccines that was going to result in unnecessary death disease and disability
0:09:18 so yeah joe knows who i am and i’m not going on anytime soon
0:09:25 that’s probably it that’s right snl would be cool i would be you want to host snl no no i want to be
0:09:30 mocked i want to be mocked on snl i want to have someone with a big nose and glasses who’s like
0:09:36 telling bad dick jokes and pretending to have insight i want to be mocked or the simpsons i
0:09:39 remember when i was working with michael wolf and that happened to him fred armison went up there and
0:09:45 did a croaky voice and pretended to be on uh morning joe it was pretty good that is pretty good you’re
0:09:51 almost there almost there you’ll be my prediction you will be you’re clearly like that the producers
0:09:59 at msnbc hear your name and start touching themselves pretty soon pretty soon his head’s in his
0:10:05 hands again pretty soon you’re trust me on this one you’re gonna be on morning joe they’re gonna
0:10:10 have something about young people and they’re like for they’re gonna be like for the gen z perspective
0:10:17 this is they’re gonna be like up next someone born in this millennium they are they’re actually out
0:10:24 there a live young person in the flesh what’s this talk tick thing you keep doing the kids are doing
0:10:33 right now no no morning joe you’re up morning joe’s up to you i can’t wait i cannot wait that’s gonna be
0:10:36 great get to the headline stop delay okay let’s do it
0:10:51 it’s official netflix has won the bidding war for warner brothers discovery the 72 billion dollar
0:10:58 deal plus debt includes wbd studio and streaming service meanwhile discovery will proceed with
0:11:04 spinning out discovery global which includes its portfolio of linear tv networks including cnn
0:11:10 netflix stock fell as much as four percent in pre-market trading one of the discovery shares rose nearly
0:11:18 four percent on the news scott we were wrong the first thing we should say we thought that netflix would
0:11:25 not make a bid we thought or i thought that david zasloff was running a little bit of a fake auction that it would go to
0:11:32 david ellison and paramount we were wrong netflix won 72 billion dollars plus debt your reactions
0:11:39 i don’t think the deal is going to close it i think it’ll be blocked um so first off your and by the way
0:11:43 we were still wrong we thought the ellisons would just walk away with this with a bid no one would match
0:11:50 and uh netflix has stepped up and i guess they look at their 400 billion dollar market cap and say okay
0:11:59 if i’m going to pay whatever it is 70 billion plus the debt for assets that are singular it just it’s
0:12:04 just crazy what how human nature plays such a big role in everything this stock was at 10 bucks not
0:12:11 long ago and nobody wanted near it and then when i was in junior high school and i asked lynn sugamora to
0:12:15 the prom and everyone found out that lynn sugamora didn’t have a date and was willing to go with me
0:12:21 everyone decided they wanted to take lynn sugamora to the junior prom and that all of a sudden when
0:12:26 faced with the idea of losing these assets and never having access to them again everyone has all of a
0:12:36 sudden decided this company is worth a lot more you know 120 more than you know just a just a few months
0:12:41 years ago but as i think about it and by the way let me just highlight that if adam newman and marissa
0:12:46 mayer the two most overcompensated executives had a baby it would look something like david zasloff who’s
0:12:52 going to walk off who’s going to walk off with 600 million dollars for basically 600 million just being
0:12:59 and that’s after the 250 he got from playing banker cramming shark week and game of thrones together
0:13:08 which made no fucking sense uh anyways you know have at it um but essentially if you look at this
0:13:15 if you look at the combined companies so let’s back up trump and mom donnie wanna because they’re
0:13:20 focused on the right thing and that is affordability all citizens globally want prosperity which is a
0:13:24 function of affordability and the amount of and their earnings the ratio between affordability and
0:13:31 the earnings affordability has become less so in america and americans think that oh if someone
0:13:35 just puts money in my pocket or screams socialism they’re going to make things more affordable not
0:13:41 recognizing that doesn’t work as a matter of fact it makes things less affordable affordability is a
0:13:49 function of structural long-term policies that result in one word competition you need
0:13:58 structural regulatory uh systemic not reform but policies that create competition and unfortunately
0:14:06 this is a great move for netflix this is they can afford it it would be great for them i i really
0:14:11 like ted sarandos i think he’s one of the better leaders in all of tech or media but i don’t think
0:14:17 this is a good idea um they would control an enormous share of premium tv and streaming they would
0:14:22 have the largest subscriber base one of the largest libraries of premium scripted content
0:14:29 some of the most valuable franchises in entertainment hbo max dc harry potter cnn discovery
0:14:35 not cnn and discovery but yes to max and that would be spun out they don’t want anything anywhere near
0:14:40 anything that’s old and stodgy they’re not touching but all of the good stuff all of the ip
0:14:46 the streaming service hbo max as you say i think the ip is really important harry potter game of thrones
0:14:54 lord of the rings dc universe succession sopranos euphoria we could go on and on and on that’s all
0:14:59 going to netflix now but put together they’d control a huge percentage of must-have shows and movies
0:15:06 and uh which quite frankly leads to fewer choices higher prices and worse terms for consumers and if you
0:15:10 look the consolidation in the streaming media market that’s already underway has resulted in
0:15:16 an acceleration of prices across these platforms and you want to put netflix which i don’t want to call
0:15:21 it walmart i’m trying to think of another big retailer that’s a little bit more aspirational but basically
0:15:28 this would be walmart and lvmh hbo was the artisanal network with two billion dollars versus netflix’s tonnage
0:15:34 of 18 billion in content they managed to create these water cooler moments and the culture there when i was
0:15:40 pitching our original scripted series on big tech and we had several offers we all were hoping that
0:15:45 hbo would come in with the best offer because talent what i learned quickly all wants to work at hbo
0:15:54 so if you had lvmh on top of on top of walmart i just think they become unassailable i think it creates
0:16:03 greater ultimately more leverage with against consumers advertisers different content providers
0:16:08 uh i think it ends up lowering the salaries of creatives because there’s fewer bidders for their
0:16:14 talent and then just looking at the politics of this in the prediction here is that i don’t think this deal
0:16:20 closes you have very powerful and connected people who are going to be against this deal because if
0:16:24 paramount doesn’t win here they’re subscale they’re kind of fucked if this deal goes through they’re a
0:16:32 distant five probably in this world which is not a good place to be and is in addition to trump and
0:16:37 his cronies not wanting this deal to go through the economists i believe of the doj and the ftc are going
0:16:42 to go you know this isn’t good for consumers i think that’s exactly right i think antitrust is the giant
0:16:47 question mark right now and it is so interesting because when we thought that paramount was going
0:16:53 to be the buyer we still thought that that was a concern from an antitrust perspective and paramount
0:16:59 i mean they own some some iconic properties but compared to netflix paramount is a is a pimple
0:17:06 compared to netflix i mean it’s tiny and so now here we are if if antitrust was a concern if pat when
0:17:11 paramount was going to buy warner brothers it’s going to be a huge concern now that netflix is
0:17:17 is buying warner brothers this is the biggest company in media and entertainment basically
0:17:22 buying the second base maybe the third biggest but we should call it but what is interesting is they
0:17:27 seem to be pretty confident because the breakup fee that they offered was larger than what paramount
0:17:33 offered 5.8 billion dollars basically like if this doesn’t go through here’s six billion dollars
0:17:40 which i i think it is a vote of confidence but perhaps i don’t know maybe we shouldn’t be comparing
0:17:44 it to paramount because netflix has so much cash on the balance sheet already that maybe it doesn’t
0:17:50 matter that much to them but yeah i mean antitrust is going to play a huge role here that is the giant
0:17:57 question and then there are further questions of does a trump doj and ftc really care about actually
0:18:03 regulating these companies consumers are going to be up in arms about it because we know this is going
0:18:08 to lead to higher prices as it always does and even if it isn’t even if the price increases aren’t a
0:18:14 direct consequence of the increasing monopolization whatever netflix does now people are going to point
0:18:21 their fingers and say you monopolize the industry this is all your fault anything they do wrong so consumers
0:18:28 are going to hate this and so i think it’ll be very interesting to see how does the doj and the ftc
0:18:34 how do they respond to this do they want to uh buck their usual trend of going very soft and seemingly
0:18:43 not caring about monopolization or are they going to step in and say no this is not acceptable the consumer
0:18:48 outrage will will not be that great i don’t think i think consumers are lazy i don’t think they’re
0:18:52 going to want to do the math around okay this probably means netflix will go to
0:18:57 30 a month in four years there’s this like they just want to take an edible and watch wednesday and
0:19:03 yeah whatever they i don’t i don’t think they’re like following the semantics of the competitive
0:19:07 landscape and streaming perhaps not yet if they’re if their prices rise a year from now and then they
0:19:13 suddenly realize too late then can’t unwind it who’s going to get apeshit here is the precious
0:19:19 creative community because already real leaders in the community including james cameron have said this
0:19:25 is going to be bad for the the theater going that he’s basically said film is over well okay film’s
0:19:31 already over boss but he’ll weaponize the the fourth rider on spongebob squarepants to to
0:19:38 to they’re they’re about to create they’re about to turn netflix and this deal into darth vader and that will
0:19:44 catch fire i don’t know how much impact it’ll have but you this is legitimately
0:19:51 has real doj and antitrust and ftc concerns that the president will not and pretend to give
0:19:57 a shit about doj ftc because he’ll have ellison saying boss i’m fucked if this deal goes through
0:20:02 maybe i won’t have enough money to spend for your illegitimate third term or whoever you anoint
0:20:08 president but also just to look at some of the past deals and what happened the at&t time warner
0:20:14 merger was an especially long battle and that made no sense to get in the way of that this was two
0:20:19 companies this is two anchors grabbing onto each other to try and fight digital made no sense to begin
0:20:25 with and several years later at&t spun it off realizing they’d screwed up comcast merging
0:20:31 with fox that was blocked paramount and skydance somewhat scrutinized penguin house penguin random
0:20:38 house and simon and schuster both my publishers that was blocked for monopoly and buying authors rights
0:20:44 so regulators have actually been pretty aggressive here and i think the populism will be on their side
0:20:50 politics will be on their side i think what ultimately ends up happening as i think about it
0:20:55 the you know the folks at netflix are so smart they didn’t put up a six billion dollar
0:21:01 breakup fee without doing their homework and i think what they probably figured out is even if it gets
0:21:09 blocked it won’t be full blockage it’ll be you have to spin off these assets and they think that as long
0:21:14 as we get x y and z we don’t need the following things or we’ll come to some sort
0:21:22 of accommodation but i find all of this shocking i think that the the argument will be you know you’re
0:21:27 monopolizing the sector and then the question will be well how do you define the sector and this is what
0:21:35 we keep on seeing with uh specifically with with monopolization in digital media and technology
0:21:43 because netflix is going to say um hey if we’re talking about media what about youtube what about even
0:21:49 tiktok what about instagram we’re not monopolizing things we are trying to fight off all of these other
0:21:53 screens that are trying to compete for people’s eyeballs and and so that would be their argument
0:21:58 and then the other argument will say no we’re talking specifically about streaming and then the question
0:22:03 would be how do we define streaming and i think that’ll be really interesting to see i think it was
0:22:08 easier with the penguin random house because it was like clearly we’re just talking about publishing
0:22:12 and we’re talking about books and you guys are the powerhouses and this is not going to be fair but
0:22:17 that’s going to be the argument that plays out you also mentioned how bad this is for paramount i
0:22:25 think that is worth highlighting because i mean david ellison has really he’s hung his hat on this whole
0:22:34 thing this has been the plan for months and we saw last week as things were developing he sent a letter
0:22:41 to uh the board of warner brothers complaining that they were unfairly giving preferential treatment
0:22:46 to netflix and saying that this wasn’t fair and they were not upholding their fiduciary duty i mean he
0:22:53 made it very clear to the market to everyone how much how important it was to get his hands on the warner
0:22:57 brothers assets and then you look at the stock reactions as soon as the news came out the netflix
0:23:03 is buying warner brothers there was not that much reaction from from comcast from when you look at
0:23:08 disney stock when you look at netflix stock even there’s one stock that got burned and was paramount
0:23:14 which fell six percent on the day down 12 percent on the week so they are certainly in a in a tough
0:23:20 position right now well you’d mentioned also theaters uh movie theaters which are already in structural
0:23:26 decline need a certain number of new releases to be profitable and historically when mergers actually
0:23:32 decrease the number of theatrical releases so when disney bought fox in 2019 the number of films
0:23:38 released annually declined by 44 so this would potentially make the movie theater business even
0:23:44 worse and let’s be clear david ellison isn’t hanging his hat he’s hanging his gold-plated big wheel i
0:23:50 fucking hate rich kids ad i just fucking hate them well like he lost i thought he was gonna win he
0:23:55 didn’t he he couldn’t pull it together it’s like he went to princeton and he’s like 30 under 30 or
0:24:05 something me and david ellison yeah you and you and big d all right my brother good analysis good crisp
0:24:11 analysis well before we before we end here i i just want to um point out one thing which is i think we should
0:24:19 just recognize how crazy it is that netflix this fledgling little company that showed up
0:24:27 20 years ago has now taken over the entire industry and i just want to read you a quote from 2010
0:24:35 this was a quote by jeff bukas who was at the time the ceo of time warner is this the albanian army
0:24:43 quote it is let me read it to you so they were asking him about netflix and whether netflix is
0:24:49 gonna just kind of destroy hollywood or take over hollywood he said it’s a little bit like is the albanian
0:24:59 army going to take over the world i don’t think so here we are 15 years later netflix is the largest
0:25:06 streaming entertainment company in the world and it has literally bought warner brothers discovery
0:25:13 for 72 billion dollars i just want to get your reactions to how phenomenal the rise of netflix
0:25:17 really has been first off i’m a little bit defensive because jeff is a mentor of mine and i’d like to
0:25:21 remind people that he’s probably been the best ceo in the history of media as it relates to shareholder
0:25:26 value he sold the magazine business and the cable but he knows exactly when to sell which is where ceos
0:25:31 really fall down they’re good at acquiring they’re not good at selling anyways anyways anyways yeah
0:25:36 he made that comment it was it was it was a bad comment it didn’t age well in terms of netflix
0:25:44 i bought netflix for what is now about three dollars a share that’s the good news in 2010 the bad news is
0:25:48 i bought in november it went down to two dollars and seventy cents a share so i sold it for the tax
0:25:55 loss and i never bought back in and today it’s at 101 so the acquisition the purchase of netflix
0:25:59 was the best decision i ever made selling it for a tax loss and not buying back in i want
0:26:04 to find a time machine get in the time machine go back find me kill me and then come back and kill
0:26:14 myself so i i i hear the term netflix and i i start to feel a little bit nauseous but yeah the netflix is
0:26:22 and if you think about it they were delivering dvds by mail and then they made this huge pivot they saw the
0:26:27 broadband was finally living up to its promise and they made what is arguably one of the most
0:26:35 bold pivots in history uh into streaming and they also adopted the amazon model of quite frankly
0:26:39 overspending to try and run away with it with cheap capital recognizing that other media camp
0:26:44 companies had made the mistake of get letting their shareholders lips get around the cracked pipe of
0:26:50 profits and they said no we’re not profitable we’re going for growth and share and investors loved it so
0:26:56 they could just show up with quite frankly more artillery but netflix is arguably one of the great
0:27:02 success stories probably the success story the biggest success story in media um would you say
0:27:07 more maybe it’s meta anyways i’m going with netflix but yeah what they’ve done is just extraordinary
0:27:14 we’ll be right back after the break and if you’re enjoying the show send it to a friend and please
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0:30:55 we’re back with prof g markets anthropic is gearing up for an ipo which reportedly could arrive
0:31:02 in early 2026 open ai appears to have a similar timeline setting up a race to the public markets
0:31:08 this moment marks a new chapter in the ai story one that has evolved at a rapid pace over the past year
0:31:15 we’ve seen model launches we’ve seen massive capital expenditures numerous circular deals growing bubble
0:31:23 fears and now it appears that the ipo race is on so scott um we’ll get your reactions to
0:31:29 anthropic potentially going public those are the reports but i also do think this is kind of a good
0:31:34 moment to just kind of review where we are in the ai story which has been through
0:31:39 many twists and turns throughout 2025 and we’re coming to the end of the year here
0:31:44 um but i’ll just start off with just the way we want to frame this and that is
0:31:48 clearly we are entering a new chapter but i just want to go over the chapters that we’ve seen
0:31:54 in the ai story so far um you know we started at the beginning of the year with what we would
0:32:01 describe as a sense of optimism about ai um there was deep seek of course which made people anxious
0:32:07 but then we very quickly got over it nvidia led the gains the s&p hit a record high then we went into the
0:32:13 the second chapter which was what seemed to be the euphoria chapter and that is where the majority of
0:32:19 the gains happened this year we saw all of these crazy ai deals that were announced massive capex
0:32:27 uh spending increase announcements and it seemed that ai could do no wrong now we’re entering into this
0:32:32 kind of we don’t know what to call it phase uh where people seem to be a little bit more anxious about
0:32:38 what is happening um and this leaves anthropic and open ai and kind of an interesting position going into
0:32:46 2026 so i guess just to start start this off where would you say we are at in the ai cycle right now what
0:32:53 how would you describe the market sentiment towards ai and then we’ll get into anthropic it feels as if
0:33:00 around the narrative going from ai boom to ai bubble that the market is climbing a wall of worry and that
0:33:06 is the valuations aren’t coming down i mean they come down a little bit but not a lot the numbers seem
0:33:13 to be supporting or continue to kind of roll on um if i had to peg where we are relative to the dot-com
0:33:19 bubble we’d be in 97 or 98 and generally what you find in bubbles is when valuations go crazy they
0:33:25 then go insane i feel like we’re right now in crazy town but so i actually believe valuations are probably
0:33:33 going to continue up and i really like this i think they were smart to kind of step on open ai and announce
0:33:40 an ipo i think the ceo there is managing his brand really well i think he’s sort of a he comes across
0:33:46 a bit more as a grown-up and a bit more civic minded than than sam altman who all of a sudden
0:33:52 decides that porn is okay and also i like the b i mean i have a bias because i’ve always about b2b
0:33:59 companies not b2c uh or my most successful companies have been b2b not b2c and this feels more b2b
0:34:09 anthropic than than the b2b open ai so uh i i like this i will probably try and get in on the ipo if
0:34:14 it actually happens because i think the first big guys that get out i think the retail market is just
0:34:19 going to go crazy regardless and what they’ll do is they’ll price it if you can get into the ipo they’ll
0:34:25 price it below what they think it’s going to go out at because it’s a it’ll be a branding event for these
0:34:29 guys and they’ll want the stock to pop what are your thoughts i think there are two differences
0:34:35 between anthropic and and open ai like if we’re just going to simplify things down very very simply the
0:34:40 the first difference is what you mentioned which is open ai is a consumer company anthropic is an
0:34:47 enterprise company anthropic’s generating 80 of its revenue to uh from enterprises selling their api to
0:34:56 businesses and for open ai it’s flipped 75 of their revenue comes from consumer so that’s the first big
0:35:02 difference if you’re if you’re thinking okay one one is a consumer player and one is an enterprise play
0:35:11 and then the other difference and this is why i it sounds like you are bullish on anthropic i am yeah i am
0:35:19 two and the reason that i am bullish largely is because kind of as you say anthropic is the responsible
0:35:25 ai company and we’ve talked about the difference between how a company how ai companies are innovating
0:35:29 technologically and then the work that they’re doing economically in terms of balance sheet management
0:35:36 and financial management anthropic is the startup that is spending a lot but not spending like totally
0:35:42 crazy they are on track to break even by 2028 meanwhile you look at open ai they are projecting
0:35:49 to spend or or lose 75 billion dollars in operating losses in the same year they’re going to burn 14 times
0:35:59 more cash than anthropic through 2030 so open ai is the the the company that is basically drunk on spending
0:36:06 and anthropic isn’t and i think that that is a really big deal and i think it is
0:36:11 important in terms of the ai narrative which i can get into in a moment but this is very relevant
0:36:19 because our our buddy andrew ross sorkin spoke with the ceo yesterday at the deal book summit
0:36:28 um the ceo of anthropic is dario amade and he basically said what we are saying and what we have
0:36:33 been saying in in no uncertain terms let’s just listen to what he said i think there’s a real dilemma
0:36:40 deriving from uncertainty and how quickly the economic value is going to grow and the lag times
0:36:44 on building the data centers that that drives it so i think there’s genuine uncertainty there’s
0:36:50 genuine dilemma which we as a company try to manage as responsibly as we can and then i think there are
0:36:56 some players who you know who who are yoloing who who pull the wrist dial too far and i’m very
0:37:01 concerned who is yoloing so i that’s a question i’m not going to answer the answer is open ai
0:37:08 your reaction scott well yeah he’s coming across as the adult in the room when it feels like sam is
0:37:13 saying we just purchased 300 billion dollars assigned a framework for a 300 billion dollar
0:37:18 agreement i mean haven’t they committed to something like 1.2 trillion dollars yeah one and a half yeah
0:37:26 it’s just sort of it feels very musky to me that oh it’s a lot of jazz hands and he brought up and
0:37:30 this is probably virtue signaling i don’t know if house and serious but he said that look this is going
0:37:36 to have a huge impact on employment and labor and society and maybe we should be thinking about some
0:37:42 sort of tax for the massive increases in value uh fostered or inspired by ai companies he probably
0:37:48 realizes that would never go through but he just comes across is a little bit more measured a little
0:37:54 bit more thoughtful and again i like their positioning the kind of safer more responsible enterprise
0:38:03 ai and its affiliation with amazon i prefer anthropic to or or clod to chat gpt i find it’s
0:38:10 a little bit more rigorous and hallucinates a little bit less i use them both cautiously pessimistic is the
0:38:15 right way to describe this market because you know there are some red flags here insider selling
0:38:20 reached a 25 year high to november and the last time that happened was in 2019 before the last
0:38:25 kind of hiccup um and there were also spikes in insider selling before the great financial
0:38:34 recession and the dot-com crash in other words i would bet a ton of people at open ai and at anthropic
0:38:38 especially with the decision around the ipo which supposedly is going to potentially fetch
0:38:45 a 300 billion dollar valuation i bet insiders are selling like crazy right now in these secondary
0:38:53 markets so you know if if the market stays just level it doesn’t even need to keep going up these ipos
0:39:01 will be huge because there really aren’t that many pure play ways to play the ai market right now you can
0:39:06 invest in microsoft you can invest in i guess nvidia is the pure play but nvidia at five trillion
0:39:15 so it these things will be monstrous there’ll be ipo events as long as the markets they don’t even need
0:39:20 to go up stay where they are i think they’ll get out i’ll be very curious to see if see if open ai
0:39:25 decides if they want to kind of announce it but this is a very strategic from a branding standpoint
0:39:30 basically anthropic kind of stepped on open ai and dump it’s going to dominate the news cycle over the
0:39:36 next few days about and there’s generally a connotation that the company goes that goes public
0:39:42 first is further ahead than the others which may or may not be true but if i were going to invest in
0:39:47 either company right now at their current valuations i would probably purchase uh anthropic
0:39:54 yeah i think the the narrative that we’re trying to sort of map out right now is is really important
0:39:59 and it’s very confusing because as we’ve said you know this ai story has been going up and down and
0:40:06 and the forces of fear and greed have been really in conflict with each other and it’s been very unclear
0:40:12 i mean as i said over the summer it was very clear that everyone was very bullish on ai and now the
0:40:17 question is like how do people really feel about ai and i think what you said they’re cautiously
0:40:25 pessimistic is a good way to put it and you know there’s this uh this the fed has this economic news
0:40:31 sentiment index where they basically just map out what what news outlets are saying about the economy
0:40:37 and how bullish they are and you know you can go find this chart but basically what they map out is that
0:40:44 you had this giant trough when the tariffs hit so everyone was very very scared then over the summer
0:40:50 you had this giant rebound and suddenly everyone was very bullish and then as we went into the fall and
0:40:54 as we started to hit november it came back down again and i think there’s probably a mixture of
0:40:58 the circular deals that we’re seeing and everything that people were saying they were concerned about
0:41:03 when they saw open ai announcing these ridiculous deals and oracle saying they’re going to spend all of
0:41:11 this money and i think that a good indicator of of how the market feels about things specifically ai has
0:41:17 been the market’s reactions to these capital expenditures and these announcements of capex
0:41:24 in these earnings because during the summer if you announced a big capex increase if you said we’re
0:41:30 going to spend a ton on on ai your stock went up and we saw this with microsoft this happened in july
0:41:35 they released this record capex forecast stock goes up seven percent google did the same thing stock
0:41:41 goes up as well method did the same thing their stock went up eleven percent now the opposite is starting
0:41:46 to happen where if you increase your capex so you say we’re going to increase our spending suddenly the
0:41:51 market gets scared and that’s exactly what we saw microsoft they report earnings they announce an
0:41:57 increase in capex similar to what they did back in the summer but the stock drops three percent meta does
0:42:03 the same thing they get more aggressive with their capex the stock drops more than ten percent so it’s so
0:42:10 interesting because when the same thing is happening when the same material thing is happening increasing
0:42:17 your spending you’re seeing these wildly different reactions from the market which is carrying with it
0:42:24 trillions and trillions of dollars worth of market value and i think what that tells us is the the
0:42:31 narrative the sentiment the vibes whatever we want to call it is actually incredibly important right
0:42:36 now when it comes to ai it’s actually not the fundamentals that are doing much work here in terms
0:42:42 of valuations it’s the story that people are telling themselves about ai and it’s the vibes it’s how
0:42:48 people feel about ai right now so having a good understanding of what the vibes are what is the
0:42:56 sentiment what is the narrative is actually crucial to understanding how the market is going to to
0:43:02 move over the next several months the next year or whatever you want to call it and if i had to make
0:43:08 any predictions about where the narrative is going what the sentiment is going to be i think what we
0:43:15 are about to see is that the age of exuberance and these big grand visions of artificial general
0:43:21 intelligence which used to be very sexy as recently as the summer i think that that’s going out of
0:43:27 fashion i think the investors are now getting scared of that they’re scared when sam altman goes on
0:43:31 on these podcasts and says these you know wishy-washy vague statements about the future of
0:43:37 the universe which used to be very a very bullish signal to the market i think that is flipping i think
0:43:44 markets are now more excited about the people who as you say come out as the adult in the room who say
0:43:50 here is our responsible plan for how we’re going to manage the balance sheet and spend the cash that we
0:43:56 have on data centers and ai over the next few years and i think that is going to be the bullish signal
0:44:03 which is why i believe that in 2026 the ai company of the year is going to be anthropic
0:44:09 because they are signaling all of these things to the market and i i would not be surprised if by
0:44:15 the end of the year i mean whether or not they’re making as much money as open ai or more or less i think
0:44:22 their valuation will be higher than open ais your big prediction in 2024 was oracle and you got that
0:44:29 right the thing that worries me is that you know ai they say ai will someday surpass human morality
0:44:35 and which cracks me up because it it’s been crawling the internet so it means it’s
0:44:39 you know if it’s trying to learn morality it’s like learning hygiene from a
0:44:45 raccoon behind a 7-eleven it’s just one of the things that really bumps me out about ai
0:44:51 that was good i’m a little punchy i took i couldn’t sleep last night so i took something called the hulk
0:45:00 xanax hulk xanax wow did i sleep well oh my god like the nanny had to shake me to wake me up
0:45:11 um it’s like mr scott mr scott by the way she’s german she’s german she’s not she’s not latin she’s
0:45:18 german okay she had different plans for me 80 years ago um all right do you want to continue to talk
0:45:27 about ai or would you rather talk about hulk’s annexes yes my 2026 ai company is going to be
0:45:33 and my big tech stock pick i just did this prediction stack the ai company of 2026 is going
0:45:42 to be amazon and i think the best application of ai is the second best application i actually think
0:45:48 the llms are a bit out over their skis the ipo branding event where anthropic will price the ipo
0:45:53 below its market demand such that they can have that once in a lifetime branding opportunity of
0:45:59 saying the stock pop 40 or 60 that’ll happen but the greatest increases or shareholder value increases
0:46:06 will happen to uh in my opinion and maybe it’s already baked in alphabet because i think waymo i
0:46:11 think autonomous is an incredible application of ai that actually results in real money being made and two
0:46:16 or the number one beneficiary of ai is going to be amazon because i think that the chocolate and peanut
0:46:22 better of ai is ai and robotics and i think amazon is about to become if it’s not already the ford of
0:46:29 the 21st century and that is ford over the course of 15 years reduced the time to build a car by 90 percent
0:46:35 and amazon is on the same pace to scale the time from a click to the time and orders fulfilled and they
0:46:40 think by 2032 they could double their retail revenue which is the largest part of their business
0:46:46 by gross dollar volume without adding any additional employees and the investments here’s a stat that’ll
0:46:53 just blow your mind or a blue mine the number of robots in operation auto automated robots you know
0:47:03 industrial robots in the u.s it’s 400 000 uh excluding amazon amazon is a million the only entity that has more
0:47:12 that is deploying or utilizing more uh operational robots is china and the number two is amazon the
0:47:19 corporation and i think ai training these things is finally in their purchase early and off in akiva
0:47:23 their revenue per employee is actually way down relative to the others because they’ve been making
0:47:31 an extraordinary investment in capex around robotics and now ai ai on its own as a consumer application
0:47:36 in my view right now is overpriced to the exception of the the private to public branding event of
0:47:41 anthropic but the real shareholder value increase is going to be from amazon that’s only up six percent in
0:47:46 the last two years versus the others which are dramatically more because they’ve been spending so much
0:47:51 money on this shit but i think about that investment is about to pay off so where ai really adds stakeholder
0:47:57 value i believe will be through autonomous leader in autonomous is way waymo but the real champagne and
0:48:03 cocaine is going to be ai and robotics at the hands of the largest retailer in the world amazon
0:48:08 yeah i i totally agree i think the robotics have not gotten nearly enough attention and
0:48:13 the the china point is such an important one it’s like robotics is one of those things where we are
0:48:19 just so far behind china it’s not even it’s not even close but yes amazon seems to be the only
0:48:24 sophisticated company that is that is properly investing in this technology so i would agree with that
0:48:32 we’ll be right back and for even more markets content sign up for our newsletter at profg markets dot com
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0:50:41 we’re back with prof g markets the trump accounts program has officially launched this initiative gives
0:50:48 every child born between 2025 and 2028 a 1000 contribution to a tax-deferred account invested
0:50:54 in low-cost index funds the funds can only be accessed once the child turns 18 that money will
0:50:59 help these kids once they become adults but it does raise a bigger question what about the years
0:51:03 before that and how are we investing in children while they are growing up right now
0:51:09 the picture isn’t great adjusted for inflation federal investment in kids has fallen 40 percent
0:51:16 since 2021 and their outcomes reflect that decline math and reading scores are dropping sharply literacy
0:51:22 rates are at their lowest levels in decades so scott let’s start with these trump accounts we had
0:51:30 brad gerstner on on the daily show uh last week to tell us about how this all came about he was the
0:51:36 guy who really pushed this through congress he met with trump he had some funny stories about meeting
0:51:43 with trump um but he’s kind of the guy behind the behind this um he was very excited about it i just
0:51:49 want to get your reactions to the trump accounts we give kids a thousand dollars when they’re born it
0:51:53 goes straight into the markets locked up since until you’re 18 years old well on the whole i like it
0:52:00 so i like the concept of thinking very long term and australia has their super fund i forget what
0:52:06 it’s called but yeah superannuation superannuation and it’s it’s it really has i i think paid dividends
0:52:14 for them but i think okay so let me back up i really what really bothers me and i think it’s really
0:52:19 upsetting is just how much shit and criticism the dells are coming under i just want to clarify
0:52:25 with people because we didn’t say this out loud but for those who don’t know the dells have donated
0:52:34 6.25 billion dollars uh to this these trump account programs and they’re basically giving 250 dollars
0:52:40 to millions of kids around the country and then they’ve gotten some pushback from people who say oh
0:52:46 these are billionaires just giving giving this money to get in good with trump or or whatever the criticism
0:52:51 may be and there’s some veracity to that dell is no accident one of the people that is getting a big
0:52:57 slice of the tiktok pie that democrats don’t have access to but i just i think it’s bullshit to
0:53:03 criticize the dells for giving six billion dollars to kids should rich people be dictating public policy
0:53:08 should we just not tax billionaires at a greater more progressive rate and then let our elected
0:53:15 representatives representing uh broader populace decide our our priorities yes having said that at some
0:53:19 point folks if you want to keep criticizing people billionaires who are giving money away they will
0:53:24 listen and they will stop giving money away so i that part of this what’s played out here is
0:53:30 kind of bothered me or i don’t think it’s fair i like the idea i don’t like the execution and that is i
0:53:34 think this for this to be a three or four year program while donald trump is president
0:53:39 and it to me it’s like okay what we need is co-equal branches of government to create things
0:53:49 that are systemic and last beyond the 36 months he has left and my i like the idea of money letting
0:53:55 compound interest and a little bit of government money uh compound such that a long way in the future
0:54:03 we have more financial stability for people so what do we we want to take advantage of compound interest
0:54:10 we want to also recognize that a lot of people are not do not understand compound interest and that one
0:54:16 of the key advantages china has over the u.s is they think in 50 year terms we think in 24 month terms
0:54:23 because of citizen united and the fact that people are basically will do whatever will say and do whatever
0:54:27 they can to get re-elected in 24 months or every six years or every four years in senate and the
0:54:33 presidency respectively the idea i like i actually thought bill ackman’s idea was a really good one
0:54:37 seven thousand dollars to every baby born 40 billion a year and then in in they can’t touch it until
0:54:43 they’re 65 and if the market continues to do what it’s done eight or nine percent since the beginning
0:54:48 of the markets the kid ends up with a million dollars at 65 and you think well okay there’s long-term
0:54:54 thinking and then there’s 65 years but i do not think that 12 to one young people to old people
0:54:59 now gone to three to one makes social security sustainable when you have a democracy where old
0:55:04 people can voting themselves more money and we can’t seem to figure out a way to get a 40 billion
0:55:08 dollar tax credit for kids through but 120 billion dollar cost of living adjustment for social security
0:55:13 flies through the transfer of wealth from young to old in this country who are the wealthiest generation
0:55:18 in the history of the planet seniors of 1.2 trillion a year makes no fucking sense and is not sustainable
0:55:25 so what do you do i like this idea i would broaden it i would have congress pass it so it lasted more
0:55:31 than 36 months and we pretended we had co-equal branches of government i’d go 40 billion a year
0:55:37 seven thousand dollars per kid born they can’t touch it till they’re 65 and finalize them low cost ets make
0:55:42 some sort of contribution tax efficient or whatever from the employer or from grandma and grandpa such that
0:55:49 the kid builds his own retirement fund and then when they’re 65 in 30 years basically you could
0:55:52 say in 30 years we’re not going to need social security because everyone’s going to have between
0:55:57 one and three million dollars and then interest rates would come down enough because of the reduction
0:56:01 in the deficit spending and the excitement around not having a social security transfer every year
0:56:06 that the lower interest rates would begin to pay for the program itself so i want long more
0:56:11 long-term thinking i want to lock this money up till 65 and say no one in america will need social
0:56:16 security for 40 billion a year we’re going to get rid of social security and we’re going to start to pay
0:56:21 for it through lower interest rates in 20 or 30 years when people see the light at the end of the
0:56:25 tunnel so i like the idea of compound interest i like the idea of accounts i do not like the idea
0:56:35 zero to 18 favoritism donors leaning on the generosity of rich people and a lack of co-equal
0:56:40 branches of government such that the next people that come along are going to do away with this
0:56:46 bullshit it’s so interesting because it sounds like most people agree that this is actually a
0:56:52 good idea i feel like that is so rare with government policies where everyone just kind of like looks at
0:56:58 it no matter what side side of political spectrum you’re on and they just say oh yeah this makes
0:57:03 sense and it’s like what is interesting and i agree with all of your comments is the the only things that
0:57:09 we are that we can find fault in this is that it it’s not going to last long enough or it’s not going
0:57:16 to be implemented as strongly and vastly as perhaps we would like because it is such a good idea and i
0:57:22 think that is very true it’s like this is one of those great ideas that we want to last for a really long
0:57:27 time and we want it to have bipartisan support and we want no one to be poking holes in it and saying
0:57:33 no that this this or not poking holes but we don’t want people just flagging it down because they don’t
0:57:42 like it for you know biased or political reasons and so if i were to make one amendment to these accounts
0:57:49 my one amendment and i agree with yours but my bigger than that my amendment would be do not call
0:57:58 them trump accounts 100 he’s politicized it exactly it’s like that’s the one way to make sure that this
0:58:04 will not last beyond the duration of his presidency because i’m sorry if you’re going to be as ridiculously
0:58:12 divisive as he is attaching your name to anything this is the price you pay being donald trump if you
0:58:17 want to shit on people and be rude to people then yeah you are going to alienate half of the country
0:58:23 which you have done and if you attach your name to anything any piece of legislation half of the
0:58:29 population will find a way to not like it and that’s what frustrates me so much is i think brad’s
0:58:36 goal with this was only coming from a good place and same with michael dale i mean maybe he’s going
0:58:42 to get some benefits but look he gave six billion dollars away and now that they’re called
0:58:49 trump accounts it’s like all everyone who is even remotely left-leaning is looking for a way to say
0:58:56 this is wrong or this is corrupt and it really isn’t it’s actually good policy do you think that
0:59:01 the brand the branding is interesting i was thinking did they make the same thing with obamacare but it
0:59:06 was really called affordable care act right did it did it take on the moniker of obamacare i think that
0:59:12 that was what they dubbed it and and by the way you know uh brad made this point as well about you know
0:59:17 rough iras it’s like the guy who who’s in charge of getting it passed in this case it was trump
0:59:24 usually the policy is named after that person but i just you know trump let let’s not pretend trump is
0:59:32 like any leader in history let’s not pretend that he is remotely as you know amenable or neutral
0:59:40 to people than any previous president he’s the most divisive aggressive polarizing president and
0:59:46 political figure we’ve ever seen and it’s by design he wants to be that person so yeah like i don’t
0:59:50 want his name on it well you know he was asked about it today and did you see what he said no
0:59:59 i love that he’s falling asleep i’m so here for it and when rubio goes on this thing about war and
1:00:04 geopolitics and how this is the only president that could solve this problem and bring peace to ukraine
1:00:13 and he’s sleeping uh i love the idea of compound interest i love the idea of uh getting rid of
1:00:20 some of our get i just want to get rid of social security and enforcing you start them off with six
1:00:26 or seven thousand you create all sorts of tax incentives you totally go you infantilize people
1:00:31 they can’t use it till they’re 65 or until they die or they their kids get it or whatever and there’s
1:00:36 no senior poverty there’s no social security you just don’t need it and because these people have
1:00:41 these investment accounts and they can start to build wealth and there’s some interesting similar
1:00:48 programs around the world i think i mean sorry singapore gives people homes you know how do you
1:00:56 how do you start getting people to invest 58 of us households hold stocks but the top 1 owns nearly 50
1:01:03 while the bottom 50 is just 1 um income inequality has obviously gotten worse the share of national income
1:01:10 going to the top 1 doubled between 1980 and 2022 and uh congratulations to brad i think this is a
1:01:17 real feather in his cap um and then major donors are you know and i think they should be applauded for
1:01:21 this for scaling the program beyond government funding you know you can see it being like
1:01:28 little rachel’s bat mitzvah you just put money into this account right it becomes a place where gifts go
1:01:33 instead of like getting your kid you know playstation or something you put another 50 100 200 bucks
1:01:40 whatever it is and it’s tax advantage maybe grandparents can use it to you know start giving money away tax
1:01:47 efficiently but i like this i like the concept one of our flaws in our species that you want to take
1:01:54 advantage of is that our species has a difficult time literally registering for 99 of our time
1:01:59 so far on this planet the average life expectancy has been 35 or less like you’re already a senior
1:02:05 citizen in most of history because a bad cut a broken bone mean or war or childbirth usually meant at some
1:02:13 point in your 30s you died and now that’s it the thing about that i find so amusing is that
1:02:19 in 10 years you’re going to look at yourself you’re going to be 36 and you’ll be like oh i’m 36 i’m 36
1:02:23 old at elson i’m just 10 years older but you’ll be fine with the way you look when you hit 46 you’re going
1:02:31 like oh my god what happened and it’s because when you look in the mirror as 45 your brain can’t process it
1:02:36 because you’re not supposed to be around and that way you’re like jesus christ i’m fucking ugly
1:02:42 i mean it’s really ed i’m telling you i just like trying to avoid mirrors right now um anyways
1:02:48 the species has a terrible time calibrating time specifically we have a difficult time really
1:02:54 imagining we’re going to be around when we’re 85 and if you could give people a magic box that says all
1:02:59 right trust me on this ed elson you’re going to wake up and you’re going to be my age and you’re
1:03:04 going to get over how fast it went and you understand finance you know putting a thousand bucks away now
1:03:10 is 10 or 20 or 30 grand then but most people just even if they intellectually get it they don’t
1:03:16 emotionally believe it so let’s take advantage of flaw in the species and let’s start investing uh
1:03:22 in kids from a very young age such that and maybe you give it to them who knows maybe give it to them
1:03:29 when they’re 40 and the other stat i love about compound interest is uh my kids are my youngest
1:03:35 we’re moving back to new york my youngest is applying to schools there and i was thinking about it you know
1:03:40 i put my kids in private school because i probably i went through all public schools and then i was one
1:03:42 of those people the kids are never going to go to private school and then boom all of a sudden
1:03:49 they’re in private school but if you’re really honest if you took the sixty eight thousand dollars
1:03:56 that whatever it is brooklyn poly prep or you know these or or or avenues charges in manhattan
1:04:01 and instead you sent them to the local public school and you put that sixty eight thousand dollars
1:04:07 in a low-cost etf from the age of four until they were 18 and then you left it in there assume you’re
1:04:12 wrong assume that in fact public schools aren’t as good as private schools and the kid didn’t
1:04:17 get into as good a college and he didn’t find the right job at google or kkr and at 35 he isn’t doing
1:04:25 as well as the parents who put their kids in avenues or grace church or wherever well at 35 with that with
1:04:29 that money you’d be able to give your kid three and a half million dollars which makes up for a lot of
1:04:37 lost time so people really don’t have a sense for how much decent amounts of capital early on
1:04:43 can result and can compound and it’s it’s a flaw in the species that everybody wants to take advantage
1:04:49 of figure out a forced savings plan from a very young age and start uh start putting it away i think those
1:04:53 are all such important points because it’s like what we need to be doing is figuring out a way
1:05:02 to invest in children full stop and the question is like how do we how do we implement that and there
1:05:07 are many different ways to do that and all that we’ve done is just like present a way that apparently
1:05:12 billionaires are down with i mean yes you could just raise taxes and you could invest more in children
1:05:18 but at the very least this is like a we’re seeing this work i mean the proof’s in the pudding here michael
1:05:23 dale came out and and gave six billion dollars that is being invested directly in children
1:05:29 but then it brings up this question of okay how do we keep going because at the current clip of our
1:05:36 investment in children as you’ve talked about many times before it’s not nearly enough we currently spend
1:05:42 nine thousand dollars on each child every year that’s the u.s government’s expenditures on children
1:05:49 and for comparison it costs us seventeen thousand dollars to deport a single person so we’re spending
1:05:54 all of our time on these deportations as katherine and edwards told us we spend more on deportation
1:06:03 that we spend on child care and school lunch we’re not spending nearly enough on children and we’re
1:06:07 seeing the results for themselves i mean obviously there’s the there’s the effects of technology in the
1:06:14 but we’re literally seeing that math rates and literacy rates among children are plummeting right
1:06:19 now reading scores have reached their lowest levels in decades only a third of eighth grade
1:06:27 is actually less than a third have what we call a proficient reading score so these are huge issues
1:06:34 um that that we we clearly need to start thinking more critically about and then i think what i like
1:06:39 about your point about how you would invest your money depending on where where where uh your kid
1:06:46 goes i think it’s important to think about our investment in children from a financial and roi
1:06:51 perspective like we should consider the fact that if you invest in the education of children now
1:06:56 if you invest in the livelihood of children it will pay off later because they’ll be more productive
1:07:02 citizens and they will contribute to economic growth and in fact a stanford report just studied
1:07:09 this flat out and they found i find this fascinating if we raised student achievement to levels that we
1:07:15 saw in 2013 not that long ago but combination of many things including coven means that achievement
1:07:20 among students has just fallen off a cliff if we did that the lifetime earnings of the average student
1:07:27 would rise by eight percent and also gdp growth would be on average six percent higher and that’s just if
1:07:32 we got our act together in terms of educating children i think the larger point being this is
1:07:41 a start but there’s a ton of work to do when it comes to simply investing in children today and we are
1:07:47 massively falling behind it seems like what do we do what do we do besides invest america
1:07:51 oh okay property taxes no longer are the funding vehicle for schools because
1:07:58 um schools being dependent upon property taxes means low-income neighborhoods have less money for schools
1:08:04 we need to reform education and have hold unions and teachers more accountable we keep throwing money
1:08:10 even when we throw money at the problem it doesn’t fucking work we need to uh start kids boys at six
1:08:15 versus girls at five we need to recruit more men into these schools so boys feel like they’re seen
1:08:21 more we need to have more freshman seats at universities such that if you’re not growing
1:08:26 your freshman class faster than population growth you lose your tax free status because you’re no longer
1:08:32 a public servant you’re a hedge fund with classes we need more vocational programming we need tax credits
1:08:39 we should offer every university has to uh have 20 of its certificates be one and two year vocational
1:08:45 programs whether it’s nursing or specialty construction or cyber security uh we need to have child tax
1:08:52 tax credits um i mean uh i would be up for letting single mothers with kids have two or three votes
1:08:57 because the d in democracy is working too well old people keep voting themselves more money and as you
1:09:02 said you know your budget reflects your values and when you’re spending more money on separating
1:09:06 undocumented workers from their families and deporting them than you’re spending on kids
1:09:13 it says that you’ve decided that our priority is deportation and not children which just makes absolutely
1:09:21 absolutely no sense so and unfortunately we are creating this out of control caste system when we
1:09:28 spent 150 000 on a poor kid’s education and we spent a million dollars on my kids education well what do you
1:09:33 know kids from rich households are 77 times more likely to get into an elite university and less likely to be
1:09:39 obese depressed more likely to get married more likely to run uh you know more likely to run for congress
1:09:46 just the numbers are absolutely striking here you have we have to at the end of the day we have to
1:09:52 figure out a way in america where your america is not about how rich your parents are that the signal for your
1:10:00 success if if a kid from a poor household takes the sat on average he does 150 points worse than the
1:10:06 kid from middle income home okay 150 points and then where income inequality really goes crazy is the
1:10:12 upper income kid scores 250 points higher than the middle income kid so if you were going to have true
1:10:18 flattening or true equality when a kid shows up from a low-income household to take the sat
1:10:23 he or she has spotted 380 points meaning if they get a 1220 that’s a perfect score
1:10:31 and so we’re perpetuating we’re perpetuating a cycle of income inequality and rage and young people
1:10:37 who won’t have the opportunities to mate so i think from a very very early age we have all sorts of
1:10:41 affirmative action in government programs it is not based on identity that creates more problems than
1:10:46 it solves it has nothing to do with your sexual orientation your race your gender it’s based on how
1:10:53 much money mom and dad have full stop exactly and we’re going to infantilize the household we’re not
1:10:58 maybe don’t give you straight up cash i would do it in form of universal child care uh tax credits for
1:11:06 the kid i mean i’m i’m talking my own book here because i got assisted lunch in elementary school and
1:11:12 when i think about how decent government and california taxpayers are we used to have these coupons to get
1:11:16 lunch and they would send the coupons to my house and made sure that the coupons look like the
1:11:22 that were purchased by everybody else so i wouldn’t feel any sense of shame and pell grants i got so
1:11:27 i’m just talking my own book here but people look at me and think okay he’s not the recipient of
1:11:33 affirmative action yeah i was and at the same time i don’t think trevor noah or tyler perry’s kids
1:11:39 deserve any sort of leg up here anyway i i think a lot of this just comes back to money i think the less
1:11:43 government programs in the middle of the better because unfortunately government programs become like
1:11:48 parasites or barnacles you can’t scrape them off i do think there’s something about reforming the
1:11:52 department of education i hate to say it don’t disband it by a woman who doesn’t know the difference
1:11:57 between a fucking steak sauce and calls ai a1 okay that’s probably not going to be thoughtful reform
1:12:05 but the department of education has consistently gotten increases in funding since since w or since
1:12:10 george herbert walker bush and the outcomes keep going down so this means it needs radical reform what’s
1:12:15 happened in mississippi is very interesting all this wokeness around phonics and everything or
1:12:19 images and then they realized kids aren’t reading it was like when the blue man group started in
1:12:23 elementary school and was all about shapes and feelings and emotion and then they woke up and said
1:12:29 my 15 year old can’t fucking read or write so i do think there needs to be radical reform but at the
1:12:34 end of the day your household we are the wealthiest nation in the world every household needs a basic
1:12:39 level of income i don’t like ubi i want to encourage people to work 25 an hour minimum wage
1:12:44 and anyways i i could go on and on and i will my next book by the way is going to be called project
1:12:50 2028 uh ed i know you’re very excited about this but there are a series of things we need to do to lift
1:12:56 up young people and a lot of it a lot of it is making their parents less anxious such that that economic
1:13:02 anxiety doesn’t waterfall down to the kid kids in low-income households have much higher sitting or
1:13:06 arresting distalic blood pressure than kids in middle-income homes you want to talk about a kid
1:13:11 that is from the beginning who’s obese who’s anxious who has poor relationships with women
1:13:18 poor relationships opportunities for mating show me a kid in a low-income household so i’m for more
1:13:22 programs that put money in their pockets but the hand of government isn’t doing it because it’s super
1:13:28 inefficient yeah which i do think this almost exactly does but again we need more of it the final thing
1:13:33 that i would point you to is just you know there’s the the issue that the children themselves aren’t
1:13:40 being invested in enough and then there’s the other issue that is young people at large don’t want to
1:13:47 have children at record levels and the share of people younger than 50 uh say they are unlikely to
1:13:54 ever have kids is at record highs right now it’s half of them and that’s sorry that is among those who do
1:13:58 not have children already so people do not want to have kids right now if you’re young and i feel
1:14:05 like there’s this very kind of uh one-dimensional view of things where it’s like oh it’s because
1:14:13 they’re worried about climate change or oh it’s because um you know that they they don’t want to they
1:14:17 don’t want to put in the work or whatever it is it’s like it’s because it’s just too expensive
1:14:27 right now yeah and the cost of raising a child has risen 25 in two years it’s it’s three hundred
1:14:31 thousand dollars now and that’s not including college so it’s like the reason people don’t
1:14:35 want to have kids right now isn’t because they don’t want to have kids because they can’t afford to have
1:14:46 kids and so what are we doing if if if that’s the the outcome of our policies right now and i guess
1:14:51 all i would say is like i think this is good policy i think it’s i think it’s great i hate that they
1:14:56 are called trump accounts but now it’s like okay how do we take this a step further how do we continue
1:15:02 the momentum how do we make sure that maybe people start matching the dells i mean where is zuckerberg
1:15:08 whereas bezos why aren’t they investing in children as well i think we just need to keep this keep this
1:15:14 train running all right let’s take a look at the week ahead we’ll see earnings from gamestop adobe
1:15:20 broadcom and oracle we’ll get the delayed job openings report for october and we’ll also hear
1:15:27 the last interest rate decision of the year from the federal reserve scott any predictions yeah i said it
1:15:35 earlier my big tech stock pick for 2026 will outperform the rest of big tech is amazon um i think that
1:15:42 they’re huge investments in robotics they have a million automated robots and the rest of the us is
1:15:48 400 000 i think it’s about to pay massive dividends and that the real juice and ai is
1:15:54 around autonomous and uh robotics as it relates to manufacturing and throughput and again they have
1:16:00 managed decreased click to fulfillment by 90 and are estimating they can double their retail revenue
1:16:06 within the next seven years with a zero increase in employment and i think that you’re going to see
1:16:11 margin expansion across their biggest revenue line which is their retail group traditionally it’s been cloud
1:16:18 that has expanded their margins and advertising amazon media group but i think some of these big
1:16:22 investments which has been reflected in their underperformance because they have lower revenue
1:16:31 per employee but i think amazon is about to is about to uh show up with ai enabled robots that uh they
1:16:39 finally start to really um register incredible benefits and yield and margin expansion so anyways big tech stock
1:16:48 pick for 2026 amazon this episode is produced by claire miller and engineered by benjamin spencer
1:16:52 our associate producer is alison weiss me as our research leader our research associates are isabella
1:16:58 kinsel dan chelan and chris no donahue drew burrows is our technical director and katherine dylan is our
1:17:05 executive producer thank you for listening to prof g markets from prof g media tune in tomorrow for a fresh take on
1:17:18 the markets
1:17:40 In love, love, love, love.
Scott Galloway and Ed Elson break down Netflix’s acquisition of Warner Bros. Discovery and what it means for the future of streaming. They then turn to the potential Anthropic IPO, examining how the AI narrative has evolved over the past year. Finally, they discuss the Trump Account Program and what America should be doing to better support kids before they turn 18.
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