AI May Not Be Worth The Cost — Here’s Why

26:23The question is, would you sell? If I'm an investor in SpaceX, for me, the answer is an immediate sell right now, today. Easy, no questions whatsoever. And I think that will be the question for investors in this round too. Just before we move on to the second story here, would you sell? In any of these companies? Yes. Yeah. Yeah. Oh my God. Sell it. If any of you hold shares in any of these companies, just trust me on this. As a guy who was looking at jets when he was 34, sell everything. And there's always going to be pressure from the VCs and your managers. Aren't you in it to win it? Yeah, fuck you.

27:08I need a house, bitch. Sell everything. Sell. And I hope I'm wrong. Come back to me and tell me you only made$11 million on your shares as a junior product manager, and now they're worth 15. But there's going to be some really interesting second order effects. 11 ,000 people, if these three companies go public at their valuations, it's going to mint 11 ,000 new millionaires just in the Bay Area, 60 % of whom are under the age of 40. Last month, you saw rents on a one-bedroom in San Francisco increase 24%. Pending sales of luxury homes in the U.S. were at 4 % last quarter. They're up 48 % in the Bay Area.

27:55It's not all bad. You're also going to see philanthropy absolutely surge in the next three to six months with these people, especially the bigger shareholders who will start their own foundations and things like that, you're also going to see, I think, a baby boomlet in the Bay Area. Because what people generally do is they move houses and they think, OK, let's start having kids. But there's going to be, I mean, the second order effects of this type of wealth are going to be dramatic. We'll be right back.

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30:45We're back with Prof G Markets. Nearly 50 ,000 workers have been laid off this year supposedly because of AI. And that's almost as many as in all of 2025. For companies adopting AI, the thesis is simple. AI is going to do, is supposed to do much of the work that humans do. In recent weeks, however, that thesis has hit a roadblock. More and more companies are reporting that despite the enormous power of AI, the technology is actually more expensive than the humans that it is supposed to replace. Uber, for example, just blew through its entire 2026 AI budget in just four months. According to the COO, it is now getting harder to justify AI costs within the company.

31:29Microsoft is canceling its code code licenses across multiple divisions because it's simply gotten too expensive. And over at NVIDIA, one executive said that the cost of compute is now, quote, far beyond the cost of employees, which all raises a crucial question for the AI industry, which we just hinted at earlier. And that is, at what point does AI actually stop being worth it. So this has blown up basically in the last 48 hours, where many companies are now coming out and saying, we're actually not as confident about this whole AI thing as we used to be. ServiceNow is another company which just blew through their entire anthropic budget.

32:07Technical staff at Stripe are reportedly spending nearly$100 ,000 on AI tokens every day. And Salesforce is on track to spend$300 million on Anthropic tokens this year. Shopify said that their earnings were, quote, partially offset by increased LLM costs. We heard similar things from Meta and Spotify and Pinterest. One Anthropic employee said that his Claude Code bill came out to$150 ,000 in a single month. In sum, it's getting very, very expensive. And we have seen in the past that there has been an incentive, especially among tech companies, to use AI as much as possible. And there was this idea that employees will engage in what we call token maxing, where you use as many tokens as possible to use from your AI API.

32:58And they'll create even leaderboards at these companies like Meta, like Amazon, where they will track how many AI tokens you're using. And the people who are using the most tokens are the ones who are the most AI deployed, the most AI forward, those are the ones who are going to get recognized. Maybe they'll get a promotion. And this has resulted in unbelievable and extraordinary costs on the AI front. And now we're starting to see, Scott, the next phase of this, which is companies and their executives are starting to realize this is a little expensive. And now the question becomes, at what point will AI actually pay off?

33:32So I will pose that question to you. at what point is it too much? It comes down to incentives. You were talking about how you're trying to incentivize people. Kind of an interesting part of the ecosystem right now and the different layers is the adoption layer, trying to get people to use it. And companies have put in place the incentives to try and get people to use AI more. But there was a recent survey by a professor at MIT that he found that about 5 % of the projects that people are using tokens for they can actually connect. The CFOs can connect to some sort of return. So while I think that they're really intoxicated, it was like using AI as much as you can and talking about in your earnings call, it's like adding.com back in the 90s.

34:20But I think you're already starting to see some fatigue. And I think the AI companies are trying to get public as quickly as possible to raise that cheap capital before things start to, I don't want to say unwind. But you can see how the string that gets pulled here is a large company and a kind of a CEO who has a lot of credibility in the industry just comes out and says, we're dramatically scaling back our AI investment. Let's be honest, folks, we're just not seeing the return we'd initially hoped. And NVIDIA just reports its first company, you know, for the first time, NVIDIA's first miss, I think NVIDIA has beat its estimates 15 quarters in a row.

35:00So NVIDIA's first miss probably takes, I would think, the entire market down 5 % or 10%. But the first, the string that gets pulled is a CEO comes out and says, yeah, this is great. We're still going to do it. You know, we've found some efficiencies, some productivity. You are seeing some productivity gains in the economy from this. And quite frankly, they look as dramatic, if not more dramatic than the internet. But look what happened in 2000. This definitely does feel like 99, and I'm waiting for the first CEO to come out and say, we have to get procurement involved and we have to dramatically scale back our expenses here.

35:40I don't think it's that romantic. I think it's just going to be a traditional Fortune 500 company that starts the narrative of, okay, this has been fun, but we have to dramatically decrease our AI investment because we're not seeing the type of ROI we'd anticipated. anticipated. Yeah, well, I mean, once we heard a quote this week from, I mean, not a huge company, the CEO of Match Group. But he said that AI is costing the company five to$10 million a year. And he said, quote, I think we're benefiting from it, but it's hard to feel it, is what he said. So that's not great. If we're supposed to be riding on this, you know, multi-trillion dollar technology that's going to transform our economy.

36:26I think there are a few possibilities that could play out here. One is that companies will decide, you know what, we are just going to pull back our AI usage because this is, you know, we wanted to experiment it and it's good that we did, but ultimately we can't afford this and we're starting to see signs of that. Two, it's possible they just say we're going to not use AI and actually we've decided that humans are cheaper and they're more versatile and so we're going to use humans i i really doubt that that's going to happen personally but third i think most likely is that these companies are going to resort to the cheapest models possible and this goes back to what you said in the previous segment uh which is this relates to china and that is chinese models today are around 10 and in some cases 20, in some cases 30 times cheaper than American models.

37:18You have models like DeepSeek, which obviously got very popular, Kimi K2, Zhipu, GLM, all of these new Chinese models that you've never really heard of, but every developer in the world has heard of because 80 % of American AI startups are now using Chinese models. And the reason that they're doing this is because they are dramatically cheaper. Why are they cheaper? One, because they're getting unbelievable subsidies from the Chinese government. So the CCP is paying for it. And two, because they're engaging in this thing called distillation, which is essentially where a Chinese AI company will go and industrially harvest the outputs from the American frontier models and then use it for their own models.

38:04It's this very sophisticated kind of technological term for theft. They're basically stealing people's stuff. And that turns out to be a great business model because it means you don't have to pay for things. And China's been very good at this for a long time. They've been doing it with intellectual property for many years. But I think that this is ultimately where it's all headed, where we don't have the money to pay for it. We're not going to use Claude. We're not going to use ChatGPT. We're going to use this cheap Chinese thing that can kind of deliver us very similar results. And you made an interesting point about geopolitics, because that there is going to be a problem for Trump, for the United States, for the administration.

38:46If China overtakes the U.S. in AI, essentially because they were distilling our models, i.e. stealing them, how do you think that might play out? The only thing that's sort of propping up and giving any license to the 34 percent approval rating right now of Trump is the S &P and the Nasdaq, which I would argue the most damaging metrics ever invented because they give this illusion of prosperity. And the reality is they're just wealth indices for the top 1%. And spoiler alert, the top 1 % are doing incredibly well. But I do think, so if you have 93 % of GDP growth is from this giant bet on AI, and you start to see a threat from abroad from AI, which would really, really damage the Trump administration, I think you're going to see, essentially, they're going to BYD the whole thing.

39:39And that is, they're going to decide that just as they've decided that Chinese EVs can't come into the U.S. market, I think they're going to ban Chinese LLMs. Because I think it's only a short, I think in the next 90 days, supposedly already 80 % of startups, smaller companies are starting to use Chinese LLMs for the same reason you were talking about, because of cost savings. I think you're going to see the Trump administration ban these models, because right now, AI is the only thing quite, it feels like it's propping up the economy right now, the incredible capex, the shareholder gains. So I think the Trump administration just has too much to lose if that magnificent 10, which is about to go to the magnificent 13, collapses.

40:20And when we start to see evidence that those, there is in fact AI dumping. And to be fair, I think there's some legitimacy to that. But Germany used to be the powerhouse of Europe. And China is very strategic and creates economic capture. And what they've done is, I mean, not only do they, they'll steal the IP of Siemens and then sell them back a cell tower into Germany for 40 cents on the dollar. But they will invite Volkswagen and Daimler and Siemens into China, prop them up, have their R &D facilities there, their production facilities there, and make it incredibly profitable for them to do their production and their R &D in China, such that when Germany tries to implement some sort of national economic policy that stops China from dumping the IP theft and then dumping products back into China, the largest companies in Germany say, no, don't do that, because we are now dependent on the economic arbitrage between China and Germany.

41:22And so what China has done to Europe economically, we're failing to do militarily in the Gulf. And that is, they've said, rather than try and enforce our will or impose our will on the world militarily, we're just going to create economic capture where other nations become so dependent upon us that we can have huge political influence internally and stop them from creating some sort of prohibition of our products. I think it's going to happen here. I think Trump's going to decide once he sees evidence that the AI trade is under real threat because of these Chinese LLMs, he'll ban Chinese LLMs.

42:02And to be clear, I think there'll be some legitimacy around that. I think the Chinese are going to try to do to the AI market what they try to do to the steel market here in the 80s and 90s.

42:14Stay with us.

42:26Where is Daredevil? A minor. Don't miss the return of Marvel Television's Daredevil Born Again. So what's next? We're gonna take this city back. In an all-new season, now streaming only on Disney+. They're hunting us. It's time we started hunting them. I can work with them. This should be tons of fun. Marvel Television's Daredevil, Born Again, now streaming only on Disney+. Hi, I'm Maria Sharapova, host of the Pretty Tough podcast. Each episode, I sit down with high-achieving women to discuss the pursuit of excellence without apology. This week on the show, clinical psychologist and founder Dr.

43:08Becky Kennedy and I unpack what it really means to raise kids today. I think parenting is the most important job in the world and the one that has the most impact on your world and the world. It is nonstop. Check out Pretty Tough. New episodes on Wednesdays. You can watch it on YouTube or listen in your favorite podcast app.

43:33In the span of a decade, Ben Shapiro built The Daily Wire into a conservative media empire. He produced hit podcasts that bit at liberal excesses and documentaries and lectures about the founders, the genders, the gospels. He peddled polos, hats, candles, provided a home for deplatformed conservative stars like Matt Walsh and minted stars like Candace Owens. Let's put a pin in that. The Daily Wire even has kids programming a judgmental puppet named Zoodles. Zoodles. Zoodles. Who shares Shapiro's load-bearing eyebrows. This year, though, the Empire showed signs of collapse. The Daily Wire's YouTube videos are down from millions of views to the lo-fi figures.

44:10Web traffic is plummeting. And recently, Shapiro laid off 13 percent of his employees. Asked by The Washington Post what had happened, Shapiro accused other conservatives of click whoring by embracing radical Islam, theorizing about the evils of Winston Churchill and mocking the widow of Charlie Kirk. The kids still got it on Today Explained, the fall of Ben Shapiro. Today Explained drops every weekday afternoon.

44:39We're back with Prof G Markets. How are we feeling?

44:46I asked that because I'm looking at the clock and we need to make sure that we have time for questions. The first question is from George Gilbert in seat F105. I wanted to know if maybe besides the three stocks that have excess valuation, besides them, there are a lot of large technology stocks whose fundamentals are doing very well, much better than the rest of the market. And if we see that continue, you know, that drives up, it seems to drive a concentration of wealth. And I'm wondering what you see the political implications of that might be ultimately. And one last comment. I was working for Frank Quattrone in 99 when you were, I was an equity research analyst on software, but I didn't remember red velvet.

45:39I was telling folks to sell the ERP country, red velvet or red envelope. Red envelope.

45:50Once you hear it a thousand times, you remember it.

45:56Yeah, thanks for that. Red Velvet, that's a cake, boss. Not the premier internet-based gift company. Yeah, look, I think that, so every year I do a big tech stock pick, and in 25, my pick was Alphabet. Because of the existential threat that supposedly OpenAI presented to Search, it was trading at 17 times earnings. The S &P trades at 23. Alphabet was just a much better company than a DuPont or a P &G or a Caterpillar with Waymo. And by the way, Search, I think, is up 17 % this year. My big tech stock pick for 26 is Amazon. Because I think one place, I think there's two places where AI is actually going to show three places the incremental shareholder value live up to the hype.

46:48The first is just simply put in medical research. If I were to go long a sector, it would be pharmaceuticals and anything related to GLP-1. I think the advances, we're finally going to see the great age of discovery and pharma that we've been waiting for for 30, 40 years. Autonomous. I think it's just incredible. I think it's going to change everything. I hate myself because the people I'm most rude to in the service industry are drivers. Like, why the fuck are you going this way? Just follow. I mean, just follow. Look at the phone. It's not that hard. It drives me crazy. and then but and also in my big tech getting my big tech stock pick for 26 is amazon there's a million industrialized robots at amazon facilities right now the rest of the nation has i believe 400 000 so i i i think you're going to see a suppression i think the stock prices might come down a little bit because i think so much institutional capital is going to be sucked out of the market into these new IPOs.

47:49So I do think the markets might come down for, or the prices might come down for some of these other companies. But if you look at these companies and the valuations, I would argue that they're pretty good buys right now. So I think that if you see a ton of capital go into these IPOs that they're so thirsty for, and you see a drawdown in the S &P and some of these companies, I think they'll be really good valuations. I don't, you know, if you look at, and I just think they're more resilient and in some ways less vulnerable because their businesses are much more diversified. So in some, and it sounds like you're in this business, I would personally, I would stay the hell away from AI right now because I think it's really vulnerable.

48:33But I think the traditional guys have built such incredibly robust, diversified companies that you're just on a risk adjusted basis going to do really well than them. And I'm talking my own book here. I own Apple and Amazon. Those are companies I'll just own probably for the rest of my life. But I think they'll be, I personally, I think if you look at valuation, I think actually, like one of the best internet analysts in the world is here, Mark Mahaney. If he's around, he might tell me where he agrees or disagrees. It's a long-winded way of saying I agree with you. I think some of those companies will be good buys.

49:07Thank you for the question. The concentration is incredible, though. when you look at what's happening. The fact that the top 10 stocks now make up 40 % of the entire market. 30 years ago, they made up 20%. The fact that AI is expected to drive 40 % of S &P earnings growth this year, that's the expectation. So it is just unbelievable. We all just have to kind of hope and pray, like, let's just hope that this keeps going. Let's just hope that this all works out. Because the level of dependency that we are seeing in this very small handful of companies, it is unprecedented. And if you were to see, call it like a 20 % drawdown in just those stocks, I'm not saying that's going to happen, but it's happened before and it could happen.

49:52That's an immediate impact on the entire S &P of 8%. And the question becomes, what kind of fear would that inspire as you go down the chain? What would that do to the CapEx guidance going forward? What would that do to earnings expectations? What would that do to multiples? The more you do this, the more you play it out. If those companies so much as falter or stumble, the amount of destruction that you would see is going to be quite staggering. I wasn't very much conscious, I would say, when this last happened in 99. But what I do know is that it took the S &P seven years to recover from when you saw that crash.

50:32And so that's what we all just kind of have to pray it just doesn't happen, is that none of these companies, even so much as slightly miss on their earnings because if they do then it's armageddon but you also asked just about geopolitical ramifications um i think it's going to be enormous uh when if you look at the genie coefficient zero is everybody has the same thing that's communism right or the dream of communism one is one person owns everything when the french started separating people from their heads, it was at 0.83. It's at 0.85 now in America. And income inequality always gets solved, but it gets solved through either war, famine, or revolution.

51:13I think we are in the midst of the second or third inning of revolution, but I think it's a series of tiny revolutions. Jeff Bezos or Sam Altman, anything a rich white guy says right now, he's wrong before he opens his mouth because people are just fed up. And if you look at the protests around data centers, everyone's looking for a vessel to express their dissatisfaction. So they show up at a data center and they just go crazy because it represents sort of income inequality. My fear is that politically we go as crazy as we went to the far right. I'm personally concerned we go as crazy to the far left.

51:50And I believe that fascism can come from the far left as easily as it can come from the far right. And I find that the stupidest, most dangerous ideas, generally speaking, when the far left and the far right agree on something, whether it's anti-Semitism or anti-vaccines, you know it's fucking crazy. And I worry that because of the economic incentive of pushing people to the polls, extremism, distillation or reductive thinking to go to A or B, and the inability for America to have the nuance to really think about something in the middle that we risk going way too far. And this is a weird thing to say in San Francisco, I worry we're going to swing way too far to the left politically.

52:40We have a question from Robert Tang in CL113. I'm being told to read the question from here. Robert asks, how should ambitious professionals navigate the tension between using AI tools and the fear of being replaced over the next five years. And he did add, go New York Knicks. I love it. What do you think, Scott? Well, we have this passe statement that AI is not going to take your job. Someone who understands AI is going to take your job. I'm now even beginning to think that's a bit overblown. I would argue that the only competence that's really important is storytelling and relationships. And that is your ability to articulate your ideas and also your, I mean, I would argue the best thing you can do for your career if you're under the age of 40 is to be as social as possible.

53:36And because so much of it now is based on relationships where if you think about, and there's some really good things about AI, where social media took us to the polls and made the world more divisive. One of the potentially positive things about AI is the LLMs try to guess the seventh word by taking the average of all the six words in a similar string. And so it's actually a little bit, AI is moderating. It's pushing everyone or thoughts to the median, which is good in the sense that it's not creating more extremists. It's bad in the sense that AI is all chip, no salsa. And the worst thing I can say to Ed or any of my analysts who come back with something is I say, this sounds like it was written by AI.

54:23That is literally the worst insult I can give in a company. And so your ability to form relationships, your ability to be creative, your ability to understand people, your ability to be super social, because if it's just AI recruiters and people punching out job applications and emails via AI, then the only thing that's gonna differentiate us in terms of our own ability to get promoted or even get in the door is going to be relationships. And so I'm thinking about that with my kids. I wanna get them super into storytelling. I'm trying to teach, I'm trying to ensure they know how to write well, stand up in front of people, communicate well.

55:09And more than anything, I tell them they need to be out of the house. I'm like, you have my credit card when you're out of the house. And I'm like, I seriously tell them, I'm like, go steal, go shoplift, whatever it is you need. But I need you to join a gang. And what I mean by gang is, and this is the brilliant Jimmy Carr, gangs get a bad rap because occasionally they sell drugs and kill people. But for the most part, men hold each other accountable. And your ability to figure out the pecking order and establish strong relationships, if everyone's driven to the median in terms of their jobs and their capabilities, it's going to be like that study done at Google where when they put out a job opening they get 200 resumes within 60 minutes they shut it down and then 70 % of the time and then they bring the top 10 people and 70 % of the time the person that ultimately gets hired had an advocate within the company had a friend.

56:04So if you're thinking about how to advance your career especially if you're under the age of 40 you just want to get out and meet as many people as possible and if you're a manager really try and invest in young people's relationships such that when one of them gets promoted, they think of you as being a good person. But I think relationships, creativity, kind of that salsa is going to be the point of differentiation because the other stuff I think is going to be driven to the median.

56:37Our next question is from Jeff Surface. Oh, and by the way, when I tell my kids, I love this. I tell my kids whenever they go out at night I'm like, don't add to the population. Don't subtract from it. And if you get arrested and incarcerated, establish dominance early.

56:59Where's Jeff's office? So my question was, Scott, you talk about your troubles with the affirmation of others frequently on various podcasts. So I wanted to get kind of add your take and how you're early on in your career and you have the spotlight now of how you deal with the noise and the stress that comes with this. That's what the money's for. Exactly. It's all worth it. That's a very kind question. I mean, you know, I'm obviously new to this, but doing this with this whole group here and getting to see everyone in person, I mean, I saw everyone at South by Southwest when we did the live show.

57:43I feel very supported and very excited to be in this kind of community of kind of slightly nerdy, slightly obsessive people who want to be doing something with their careers, who feel ambitious. I feel like we're all kind of a similar type of person. So in a lot of ways, I feel really supported. Honestly, a big piece of it is the team. I mean, we have just incredible support. And I just would shout them out right now. Claire Miller, Mia Silverio, Dan Chalon, Isabella Kinsel, Chris O'Donoghue. I kind of want to just shout them out right now. And there are plenty of other names. But, you know, we're a bunch of kids who Scott hired.

58:28And Scott said to us one day, I want to make a podcast about markets. And we said, OK. And we didn't really know what we were doing. But then we eventually did know what we were doing. And now here we are at the Castro. So, look, it's been wild, but ultimately, this is so much fun doing this and meeting all of you guys and doing this with Scott. And Scott's been such a support for me the whole way through. So, that's a really nice question. I feel good. I'm handling it okay. Okay.

59:07Okay. He's seriously the son we all dream of, right? I don't think I've ever seen you stressed. I've never registered you. Or maybe I just don't really care.

59:20You got to hide it. You got to hide it really well. Never show your boss. I've never seen you stressed. Avery Sarkar. I hope I'm pronouncing that right. Avery has a question. He says, what's your best advice for a 17-year-old in today's day and age?

59:38Avery's 17, I assume. Well, there's a lot there. Are you 17? Yes, sir. That's awesome. Yay, 17.

59:59be good to your parents or your allies you're at a point in your life where you're under the impression you have this natural hormone coming over you that makes it easier for you to leave the pack so you become an asshole to your parents try and skip that stage and go right on to realizing your parents are your allies um start investing in relationships you're going to hear a lot of TikToks about how if you save 10 bucks a day and pass up a latte that by the time you're 50, it's a million bucks. Approach relationships that way. Try and have the confidence I didn't have as a young man to express affection, express, express, tell other people you're impressed by them.

1:00:40Start quick texts. You were great today, or I'm so impressed by you. So many young men, as they're developing sort of their sense of masculinity, they feel like it's a zero-sum game. And if they acknowledge that someone else is impressive, that somehow takes from how impressive they are. Also, really the key attribute you need to develop at the age of 17 is no. And what do I mean by that? You need to put yourself in as many uncomfortable positions as possible and get as many no's as possible. And what I worry about with young men and the temptation. If I'd had the ability to be entertained on TikTok all day, I'm not sure I would have ever gone into Westwood and seen movies.

1:01:26If I'd had lifelike synthetic porn on my computer 24 by 7, I'm not sure I would have ever taken the risk to approach strange women on the campus or UCLA. You know, I don't think I would have, if I thought I could trade crypto or stocks on Robin Hood or Coinbase. I'm not sure I would have ever, and I did this, show up in the office of Morgan Stanley in the lobby with donuts, which was a cheesy thing, and say, I want to meet with somebody. So if you're not getting a lot of no's in your life, if you're not applying to jobs you don't deserve to get, if you're not applying to schools you shouldn't get into, if you're not approaching and expressing romantic interests on making someone feel safe with people that most people would perceive as higher character and hotter than you, if you're not getting to know a lot, you're not going to ever punch above your weight class economically or romantically.

1:02:18So be good to your parents. Start investing in relationships and try to get to know as quickly as possible and develop the sense of resilience around rejection. And my fear of kids your age, especially men, is they believe they can have a reasonable facsimile of life with a screen and an algorithm and they don't develop the resilience and don't ever get to engage in the really hard things that's the most rewarding thing, and that is relationships. And if they're not careful by the time they're 25, one in three men under the age of 25 is living at home, and they never developed a skill set around rejection.

1:02:54And if anyone in your life that you really admire, the only thing I can guarantee is they've had a lot of no in their life. So get really good at no, and also just recognize, and I wish I'd learned this earlier, nothing's ever as good as bad as it seems. So if you're applying, you're 17, you might be applying to college. If you don't get into the college of your dreams, if you get your heart broken, if you don't get the job you want, when you're older, you're not going to regret not getting into that great school. You're not going to regret having your heart broken. You're not going to regret not getting the job you wanted.

1:03:30What you're going to regret is how upset you are and how much you beat yourself up. So just learn, try and just remember that and forgive yourself and recognize that young people are just so hard on themselves. Anyways, but more than anything, get out and just get to as many no's as possible. That means you're about to get to good yeses.

1:03:57By the way, where are you? So, I don't know. What's his name again? What's the kid's name? Avery. Avery. So, Avery, do you know what love language is? Love language is like either, everyone has a love language. So it's like, it's either acts of service, affection, gifts. My love language is money. So here, brother, here's a thousand bucks. Take your mom out to dinner.

1:04:29I think he's upstairs.

1:04:38That's not Avery. That's Eric, but he's taking it to Avery. I hope. Hey, Scott. Yes. It's Mark Mahaney. Mark. So, Mark, I'm going to ask you a question. Where did I get it right and wrong on valuations? Not on valuations, but thank you for coming out, both of you. Thank you for coming out to San Francisco. I've read all of your books I've given copies of your books to all of my sons the notes on being a man was phenomenal so thank you, I think you're a true gift in what you do thank you for saying that just so everyone knows Mark Mahaney is one of the best analysts on Wall Street, the tech analyst ever called, it's awesome he's here right now I'm sure you're right about your comments about these IPOs, but I think you're wrong.

1:05:38And so not on the valuations. And look at all the hugely hyped IPOs that you've watched over the years. Google, Meta, Amazon, Netflix, Uber, Spotify. I mean, you didn't usually make a lot of money if you bought them right at the IPO price. But they did become great assets over time, so you had to be really careful. But I just push you to think about the fundamentals, and I'll just throw one or two things by you. When you think about open AI and Anthropic, you've never seen companies scale revenue. This is not a recommendation of these things, but you've never seen companies scale revenue as quickly as they have, faster than anybody.

1:06:17And you've seen with Anthropic, what's been reported recently is that they're just about to turn operating profit, profitable on an operating income basis. Not funny EBITDA, but like real profits. So there's a there there. And the fact that Google and Amazon and Microsoft and Meta are spending so much money going after this, you've got some of the sharpest minds in the world spending that much money. There's a there there. Now, whether it gets valued right or not, I just push you just to think about what's the just, you know, follow the fundamentals first and then figure out your price later. But these are unprecedented fundamentals.

1:06:53Appreciate that from Mark Rahaney. It's awesome he's here.

1:06:59That's all the time we have. Thank you, San Francisco. This episode was produced by Prof G Media. Thank you for joining us live in San Francisco. If you like what you heard, make sure you're following us on YouTube, Spotify. You know the drill. Good night, everyone. Lifetime.

1:07:26You help me in kind reunion As the world turns And the dark flies In love

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