The Iran War Risk Markets Are Ignoring

16:07Scott Galloway:Whether or not you think that bombing Iran and trying to diminish their capacity to continue to sponsor and wreak havoc in the Middle East, it is clear that the American public feel that at a minimum, the president should have gone to Congress, should have informed Congress, would have been much better off had he figured out a way to use diplomacy to enlist one or more European and Gulf allies. And also it's reflecting a level of incompetence. And I call right now Iran as war is improv. It literally feels as if they're making it up as they go. Right. So the messaging will be there for five days.

16:47Scott Galloway:We could be there a long time. This is a special combat mission, according to Republican senators. No, according to the president, it's war. We want regime change. We're not necessarily interested in regime change. Both those statements came from the president. Not being able to get American citizens out of the Gulf. No one actually thought through, well, what happens when everyone wants to come home? What's our plan for getting our own citizens out? Bombing Tehran, where we have probably more pro-West sympathy or empathy than many of the rural regions that are much more theocratic and loyal. It just feels as if it's not.

17:26Scott Galloway:Tactically, they are absolutely diminishing their Navy, their missile launch capability. I do believe that they're going to totally neuter their capacity to build nuclear weapons. So tactically, you could say it's a I would argue it's a win so far. They're achieving objectives. But when you have no real thoughtful delineation of what the objectives are and the story keeps changing and you're going about it alone and you basically have held up the middle finger to democracy and aren't even briefing the Senate Intelligence Committee. I mean, I've never seen Senator Warner so apoplectic that and it does it shows just such extraordinary incompetence because wouldn't you want to at least brief Senator Warner, who has had several presidents in front of him and oversees the intelligence community or informs the intelligence community to kind of get his thoughts?

18:11Scott Galloway:Wouldn't you want to brief Senator Kelly, who has flown dozens of combat missions to get the benefit of their thinking? Wouldn't you want to have Representative Seth Moulton, who was in the Marines, I think, in Iraq and or Afghanistan, to get their feeling about what might be going on the ground? Because the reality is we haven't had diplomats there since 1979. So other than relying on the Mossad, which is obviously going to have their own agenda and their own objectives, we have no color or real context here. And it looks as if America, this is another data point, and the larger impact on the market is not the war itself, but another data point that America is no longer the operating system through which the world operates.

18:53Scott Galloway:We used to have, we controlled the supplies or the routes of energy, right? It was generally speaking, ships in maritime passageways were kind of off limits. We just sunk a ship with a torpedo for the first time since World War II in international waters. We were the one, everything was settled in dollars. Loosely speaking, our trade and our IP agreements were the ones that people lived by. It was our 700 military bases overseas ensured the safe flow of global trade and international norms. And now what they see is, okay, here's a rogue nation. We used to be the one ensuring no nations went rogue.

19:32Scott Galloway:Now we are that rogue nation. And something happened that I actually think, you know, it's the stuff you don't see that's, or that doesn't get reported, that has a bigger impact. India and Canada just struck a trade deal. And they said, we're going to do, it's a$50 billion deal. And the really interesting thing within that deal was they've decided they're going to settle all of that trade in non-dollar denominated currencies. So they're not only rerouting their supply chain and trade agreements around the US, they're purposely trying to figure out a way to de-dollarize and no longer have what I would argue, is the most formidable carrier strike force in the world, and that is the U.S.

20:12Scott Galloway:dollar. Everything settles in dollars. So we have access to everything in terms of flows of capital and power. And we also have the ability to sanction people really severely because everyone wants to settle in dollars. So what this is, I think the markets have said, okay, this conflict will probably be ring-fenced. It'll probably end sooner rather than later. But I do what you're going to think what you're going to see over the next year. I think the market, the U.S. market is going to underperform and we're going to see a weakening of the dollar because this is yet another example where nations think, Jesus Christ, the operating system we've been operating on is no longer, we can no longer depend upon it because these guys, quite frankly, are out of fucking control.

20:56Scott Galloway:They no longer see themselves as part of the West. They no longer feel the need to... You know, if we'd gone in with British, French, and German intelligence and resources, fewer of those missiles would have landed or hit targets in the Gulf. Now, granted, those missile launches have largely diminished. It looks as if Iran may have run out of munitions to fire at their neighbors. If we had figured out a way to try and get one or two Gulf states to join us, it would have just had so much more legitimacy. It would have been another example of how the West brings people together and has some checks and balances.

21:34Scott Galloway:Instead, I think the biggest danger to the markets is not the actual action in Iran. It's another data point that we are now that rogue nation.

21:42Ed Elson:But I don't understand why, because all of the points you bring up here should not instill or inspire much faith in Trump's decision-making on this issue. At least that is my view of it. Agreed. And so what I don't understand is why there seems to be this kind of blind faith and trust in his ability to handle this competently. And what I've seen, all of the points you made, no congressional approval, no willingness or effort to inspire or reach some level of legitimacy and consensus on this issue, either in America or with our allies. also the fact that he was the anti-war candidate for many many years i mean this whole thing his whole political career really began with i think iraq was a bad idea i think afghanistan was a bad idea personally i i don't see that much evidence that this situation is that much different from what we saw before i don't think that he's proven that to us there seems also as you say the messaging you know what are we actually trying to achieve here are we at war are we not at war And to me, that's not a function of bad messaging.

22:55Ed Elson:That's a function of actually bad strategy. I don't think it's that they don't know what to say. I think it's that they actually do not know what the plan is. They don't have a strategy. And so all of that makes me think, we are getting into very, very dangerous territory here. We are potentially witnessing what might be the next trigger of some very, very difficult, long war, something similar to what we saw with Iraq, which, by the way, they also told us was only going to last a few days, a few weeks. They said it wouldn't. I mean, Donald Rumpsell literally said, I doubt this will last six months.

23:32Ed Elson:That's what he told us. It ended up lasting eight years. It ended up costing$3 trillion. Nearly 40 ,000 Americans were injured. Four and a half thousand Americans died. So all of this, to me, says we don't really know what we're getting into here. And there are so many other downstream effects that could be really dangerous. For example, you know, if one very likely scenario would be that this isn't contained, that Israel hits Iran's oil facilities, Iran starts hitting other nations' oil facilities to just cause some chaos because they're frustrated, they're on the back foot. Oil starts, the price of oil starts to go up, could easily breach$100 a barrel, at which point what does that do to inflation at home what does that do to uh the interest rate policy of the federal reserve that's its own thing this what this could do to the affordability crisis and to gas prices in america and also in europe could also massively destabilize europe and we're already seeing this in liquid natural gas prices which are skyrocketing in europe not the case for america we're insulated from the issue a little bit more because we have our own supplies, so that's good.

24:39Ed Elson:But then even things like cyber attacks. I mean, we've already seen a huge increase in cyber attacks on Israel literally days after they struck Iran. What if that happens to America too? What if there is a refugee crisis? I mean, this is a country with a population of 90 million people. What happens if they all decide, okay, we're out of here, this is a hot zone, which it is, and they decided to start fleeing to Europe? What does that mean for the political complexion of Europe. What does that mean for the rise of right-wing populism, which is already gaining some steam in Europe? What would that do to European markets?

25:17Ed Elson:How would that affect American markets? My mind is whirring with all of the what-ifs. And I get that I'm more of a pessimist than most. But I feel like that's kind of what the markets are supposed to be contending with right now. And purely based on my conversations with investors, I feel like no one is honestly contending with those potentially bad outcomes.

25:45Ed Elson:We'll be right back after the break. And if you're enjoying the show so far, send it to a friend. And please follow us if you haven't already.

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29:25Scott Galloway:we're back with profity markets anytime you start a war there's an enormous x factor including you know the worst case scenario a downward spiral that results in somebody detonating a nuclear bomb i mean that there's just because the reality is the enemy gets a voice in this and you you can't predict what they're going to do all norms kind of go out the door what is that war is negotiation when all diplomatic efforts have failed. But also, you could make these arguments and never decide to go into Kosovo and liberate people, to not create a multilateral force and go into Kuwait and push out Hussein, to not fight their war again after we got nothing from World War I but a bunch of injured and maimed Americans and just struck a deal with Hitler.

30:22Scott Galloway:And, you know, there was a very large movement. The biggest hero, the Elon Musk, the biggest hero in 30s America was Charles Lindbergh, who was absolutely against it. There was a huge anti-war. Basically, a lot of people accused FDR of lying to the American public to try and send armaments to Europe. So there is always a thoughtful and reasoned argument around how any war or any conflict could result in Armageddon. I get it. I would argue that, and this is my prediction, oil in a year from now will be less expensive than it was at the beginning of this conflict or war. Let's call it a war. And that the biggest opportunities from an investment standpoint, if things go right, if we can figure out a way to ensure that if the war in Ukraine comes to an end and we can figure out a way to ensure that they have some reasonable sense of security.

31:16Scott Galloway:I think the amount of investment that's going to pour into Ukraine because of the spillover of technology and drones and surveillance technology, I think the Ukrainian economy is absolutely going to boom. But the key will be to make sure that we help them at least win the war, have enough negotiating power such that we're preventing the next war, just not scheduling it. If we, in fact, can figure out a way, if the Iranian military is diminished to the point in their launch capabilities, their ability to lay mines in the Straits of Hormuz, their ability to enrich uranium, if all of that is absolutely neutered, I think the Middle East is safer.

31:52Scott Galloway:If we can, and this is the optimist viewpoint, and let's go to what Josh Brown says, what could go right. If we got, not even get a pro-West government or ruling party, but a neutral one that embraces technology, maybe normalizes relationship, relations with Israel, which has a lot of technology, normalizes or has enough, a neutral enough relationship with Europe and the U.S. to get better oil infrastructure and technology, I think you're going to see an economic boom in Iran. I think the private equity guys will all of a sudden be flying in. There'll be a four seasons in Tehran where they're there trying to figure out a way to invest.

32:28Scott Galloway:So a lot of times, look at World War II. What have been the two most productive economies the last half of that century.

32:35Ed Elson:Germany and Japan, but those are the exceptions to the rule kind of here. If we're talking regime change and if we're talking U.S. involvement, like those were success stories.

32:50Scott Galloway:Do you think the Venezuelan economy is going to be better two years from now or two years back?

32:55Ed Elson:I think it's a very open question. I think right now, I think right now there is some support for the U.S. And I think that there is, as you mentioned, in Tehran and Iran, there is support for the American cause because they have been so oppressed. But I mean, my mind just goes, I feel like we've seen this movie before. We saw this in Iraq where there was also some support for the U.S. And then there was so much instability over the next few years that suddenly everyone decided to go, actually, we wish these guys didn't come in here. Whether they're right or wrong, I'll leave that up to them, but the reality is, you know, a year after the invasion happened, the Iraqis were pretty split.

33:37Ed Elson:And then three years later, all of them decided that America was the enemy.

33:41Scott Galloway:So far, that was the worst geopolitical mistake of this century. Was George Bush lying to us and getting, propping up as CIA director and General Powell to say there are weapons of mass destruction? There wasn't. he wasn't, he himself didn't have plans. The organizing principle of an Iraq, unlike Iran, wasn't death to Israel and death to America. But this is how I would summarize it. The why and what they're doing, I think that Trump would have had potentially, had he gone to Congress, he would have gone for an authorization of the use of military force. They never get a declaration of war. And I think he may have gotten it or may not, but he needed to do that because what it forced him to do was to say, oh, this is a defensive posture.

34:30Scott Galloway:Well, why is it defensive? Because they were about to be attacked. And if they were attacked, they would attack us back. Okay. So you're saying that Israel is now running the military and U.S. policy. The what and the why here and why now, I think have real rational justification. The problem is no one trusts the guy that's driving the bus to execute it correctly and that it could backfire because if our messaging is wrong, if we don't execute well, if we, I mean, right now, quite frankly, I believe everyone just wants this war to be over. I think the worst thing we could do right now is make a bunch of hollow excuses for pulling up stakes and leaving.

35:12Scott Galloway:Because what's the next time we want to take military action? The nation just points its missiles at its neighbors and says, wait four or five days and hire a bunch of troll farms to piss on the president on social media. Russia, to their, I don't want to say to their credit, but Russia has lost a million people and has spent four years and has not moved an inch. Meanwhile, Spain won't put a single fucking boot on the ground. And I hate to say this, but it kind of goes back to what the one smart thing that I forget the guy Mashi Ossou-san said, who would you rather be less rather be in a fight with someone who's really smart or someone who's fucking crazy?

35:47Scott Galloway:And the reality is the West, if the West leaves right now, and I understand that there was no legitimacy going into Iran, that they lacked, he lacked the legitimacy when you declare war and this is war. You are supposed to get congressional approval and let the U.S. public have a vote in this vis-a-vis their representatives. And you have more legitimacy going in if you go in with a multinational force. He did not do that. People on the left and right are pissed off. By the way, he's got about, I think it's 72 or 77 support of Republicans, 17 percent of Democrats. This has everything is a dramatic political divide.

36:22Scott Galloway:The more probably better litmus test is independence. And it's only got about 30, 32 percent support. But again, I go to this is another data point that the leader of the free world does not know how to allocate resources in a responsible, safe way. I think he could have made a very solid argument for why this was a good idea if he'd outlined objectives that were very straightforward, measurable, had a multilateral force, including European nations and Gulf nations, gone to Congress, briefed the right people. And if Congress, if he didn't get the votes, then he shouldn't do it because this is war.

36:56Scott Galloway:This isn't a defensive act where he's understandably given the rights to move quickly. So this isn't, in my opinion, this is moved from whether or not this was the right thing to do. The bottom line is this is another data point where we think we have an autocrat who does not think things through, who acts based on the last person he spoke to, whether it was Secretary Rubio or Bibi Netanyahu, and is allocating our resources in a very irresponsible, dangerous way and has the whole world going, Jesus Christ. the knock at the door now that we're supposed to be scared of was supposed to be the good guys.

37:35Scott Galloway:Now they're the knock at the door.

37:37Ed Elson:The one thing I don't, I'm not sure I'm aligned with you on is when you say that their messaging, I mean, as the example, they come out and they say, in so many words, this was Netanyahu's decision. He brought us into this. That's what Rubio basically says.

37:57Scott Galloway:That is the stupidest thing they have. And this is not, this is a high bar. That is absolutely the stupidest, most damaging thing they could have said.

38:06Ed Elson:But what if it's true? Like, I mean, if it's a messaging problem, I mean, if it's, they flubbed their explanation, that's one thing.

38:15Scott Galloway:So you think that Netanyahu and AIPAC are effectively controlling the president and deciding if and where we declare war?

38:25Ed Elson:I think that what Rubio said I could see as being true, which is that Netanyahu said, we're going in, join us or not. And then America decided to join us.

38:37Scott Galloway:I don't think America scares that easily. I don't even Trump. I don't think that I think of more likely when something like this and we won't know until, you know, those tapes are eventually the truth is like oxygen trapped underwater. At some point, there's a bit of an earthquake and the oxygen reaches the truth, reaches the service. I think what will more likely happen, I think he respects Netanyahu, and Netanyahu was one of probably several voices saying, this could be your legacy. You could unlock vis-a-vis this incredible resource in the best performing organization in the world, the U.S.

39:10Scott Galloway:military. You could unlock unprecedented peace, prosperity, and stability in the Middle East with this bold leadership action. And, oh, the free gift with purchase, wink, wink, you're going to push Epstein out of the news for a few weeks. But I don't I just do not buy and I'm uncomfortable with the notion that I feel kind of plays into this trope that two percent of the population in the U.S. that is Jewish is somehow controlling, you know, the U.S. government. I don't doubt that Trump listens to Netanyahu and respects him. But this was Trump's decision. And if they said, we're going in with or without you, they could have.

39:52Scott Galloway:Fine, they're not afraid to do that. What's become clear since October the 7th is that Israel is the superpower in the Middle East. That they are. I mean, if you look at. We talked about geopolitical disasters. Iraq, disaster. Total fucking disaster. And set off a hallucination that has damaged your generation that can be distilled down to the following. Oh, hey, everybody. Hey, old people. We can cut your taxes and go to war. Because guess what? We have so much built up trust because of previous generations' responsibility and leadership that we have massive borrowing capacity. George Washington to George Bush,$7 trillion in deficits.

40:33Scott Galloway:George Bush to Donald Trump, another$30 trillion in deficits. Right? So that was a huge mistake. The second biggest geopolitical mistake it may have surpassed was October the 7th. If someone had told Senwar and Khomeini, you're both going to be dead and Assad is going to be playing video games in Moscow, and Hezbollah, the supposedly great fighting force, is going to be neutered, The Houthis in Yemen are basically going to be just bothersome but not a real force. And Iran is not even going to have control over its own skies. And Syria is now run by some—I mean, this was the biggest mistake. We made the second biggest mistake or biggest mistake so far of the century.

41:15Scott Galloway:I think Sinwar and Iran—and let's be honest, it was Iran—made the biggest mistake. Again, let me just wrap all this up. How are the markets responding? They believe this is short-term and going to be ring-fenced. There is always an X factor because the enemy has a say in it. I do believe that the biggest mistake here, I think that Trump could have made a very strong argument for why to do this, why now, why it's an opportunity right now if he'd set very clear objectives and, quite frankly, had a secretary of war that didn't have his head up his ass and was a little bit more competent. We are veered so far from the markets.

41:52Scott Galloway:Reel us back in, Ed. Reel us back in.

41:54Ed Elson:We have veered far, but I do think that it all relates. That's the problem. We're trying to price massive levels of uncertainty here. That is what the market's job is to do at this point. And so that is the question. They believe we're okay. And then I guess the question is, if you're an investor, do you agree with that? I think there's a decent argument for that. And I also think there are some decent arguments on the other side as well.

42:18Scott Galloway:Well, let's make a bet here and let's timestamp it. I keep saying let's timestamp it and our producers don't listen to me. In a year, do you think oil is going to be higher or lower than it is now?

42:27Ed Elson:I think it will probably be lower. I think I agree with you. But my certainty rating on that is very low. That's not a bet that I'm willing to put a lot of money on because I don't feel much conviction in it. But if I had to gun to my head, I would agree with you. Oil goes lower. We'll be right back. And for even more markets content, sign up for our newsletter at profgmarkets.com slash subscribe.

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46:35Ed Elson:We're back with Proftry Markets. Last month, we thought Anthropik's Super Bowl ad was going to be its big moment. The ad went viral, racking up nearly 5 million views on X in under 24 hours. But the buzz then faded. And now the real big moment may have actually arrived. At the end of February, Anthropic rejected a$200 million Pentagon contract. The company refused to allow its technology to be used for surveillance of US citizens or autonomous military strikes. Trump swiftly blacklisted them, and hours later, OpenAI picked up the contract. But taking that stand appears to have paid off for Anthropic.

47:15Ed Elson:Claude climbed to number one in the App Store, and Anthropic's enterprise market share rose to 32%, overtaking OpenAI. Meanwhile, ChatGPT's uninstall rate in the US reportedly jumped nearly 300 % after news of its Pentagon deal broke. Now, the question will be, how hard of a line is Anthropic actually willing to draw? It looks like the company is now back in negotiations with the Pentagon, seeking a compromise that would enable the government to keep using its technology. It would also prevent Anthropic from being excluded from the military supply chain. So, Scott, I think this is very interesting because this goes back to something that you were saying a long time ago when tariffs were unfolding, where you said, actually, if you're the leader of a large public company, a lot of them were very scared to say anything bad about Trump or to stand up to him or to disagree with him in any way.

48:08Ed Elson:And you made the point, actually, this could be good for you.

48:13Scott Galloway:At business school, we have ethics, we have leadership, and we have sustainability courses. And they each cost, every course costs$7 ,000. Let me save you$21 ,000. Ethics. Think about right and wrong. Okay, that's the ethics course. leadership. Do the right thing, even when it's hard. Boom, you're done with leadership. And the sustainability, thinking about doing the right thing, doing the right thing when it's really hard, you might make money out of it. Boom, you're done. I just saved you$21 ,000. When you don't speak out on behalf of our wonderful allies and other companies, and speak out on behalf of your own company.

48:55Scott Galloway:Just wait, folks. In the long run, it's just really bad for you not speaking out.

49:00Ed Elson:Someone's now tried it in Dario Amadei, who stood up to the president. And what happens? In store rates of Anthropik and of Claude skyrocket. And actually, their revenue, their ARR, went from$14 billion to$19 billion in two weeks, which is a 36 % increase. It's just unbelievable. So it seems that they have actually proven your point here. But let's get your reactions to what's happening between Anthropic and Trump and the Pentagon and OpenAI.

49:31Scott Galloway:He's the first CEO who said no. And he's absolutely right. Anderell builds weapons so the government can kill people. The Silicon Valley wokester ethos was, no, we're going to walk out during lunch because we don't like Google working with the Defense Department. Well, good for you. That'll show them, you little woke bitch. Meanwhile, they go back to the cafeteria and get your sushi and cry into your Atlantic. Anyways, they get to do that. Palantir, if they want to provide data to Israel, as long as they get security clearance, they're allowed to do that. because as long as you comply with the law, you get to operate within, you're entitled to and subject to the laws.

50:19Scott Galloway:When the Pentagon starts saying, no, you got to do this. And he said, he stuck up the middle finger. And guess what? We're here for it. America's here for it. And as I mentioned before, on Sunday, we're going to Minneapolis. We've had this resistant unsubscribe movement highlighting a bunch of companies to unsubscribe from. The next evolution of it is the following. We're going to try and put out a bunch of data and a bunch of messaging and a bunch of media encouraging people to not use and unsubscribe from OpenAI, but to subscribe and patronize Anthropic. If you believe that companies have the right to operate under the laws and should not be subject to intimidation from the president or the Pentagon to do exactly what they want when they're not comfortable with it, then sign up for Anthropic.

51:11He's the hero we were waiting for.

51:14Scott Galloway:And we have been saying this for six or nine months. There's an enormous commercial opportunity for the first person who gets off their knees and says, fuck you. I'm an American. This is an American company. We get to operate by the law. We get to decide who we work with. We can't do it based on sexual orientation. We can't not serve people because of their sexual orientation or their race. Actually, that's not true. Now, I think the Supreme Court has decided you don't have to make a cake for someone, a gay wedding cake. But anyways, my point is he's the guy, finally, someone took advantage of the biggest commercial opportunity of the last six months.

52:01Scott Galloway:And that is to stand up and say, you know what? And last I checked, being an American and being incorporated in America means we absolutely have to operate by rule of law, but also we are protected by rule of law, meaning we get to make these decisions. And he's been articulate. He's been forceful. And this goes to another prediction we made, I think, about three, four months ago, that within a year, Anthropic would be worth more than OpenAI, mostly because I think OpenAI is going to decline in value.

52:34Ed Elson:It's been proven now. I mean, I just returned to this unbelievable number that their ARR, their annualized recurring revenue, two weeks ago was$14 billion. And today it is$19 billion. dollars. Like, we literally have the data in front of us that getting off of your knees, as you say, standing up to the president, literally translated into a$5 billion revenue opportunity. And who knows how much it'll increase in the future. Meanwhile, look at the damage that it is levying on his greatest competitor, which is OpenAI and Sam Altman. They step in, they say, okay, we're going to take the contract with the Pentagon.

53:12Ed Elson:And suddenly the uninstall rate absolutely skyrockets. One and a half million users leave chat GPT. And then there's this movement online that starts to trend, hashtag cancel GPT. So we're watching the evidence play out in real time. And I think the other thing that is so interesting is how badly Sam Altman is fumbling the bag every time from a PR and communications perspective, something that is quite striking. A year ago, 9 % of Americans said they disliked Sam Altman. That's already a pretty big number. Today, that number is 20%. So it has more than doubled in the past year. And you think about all the things that he's gotten wrong, obviously his response to that Super Bowl ad, his very awkward Senate hearings, his very awkward interview on Jimmy Fallon, where he tried to present as this fun, likable, relatable guy ended up being quite awkward and seeming quite, honestly, a little evil in a lot of ways.

54:12Ed Elson:But then I think the worst moment we've seen from him happened a couple of weeks ago. And I just want to play this clip for you, get your reaction, because I think this is probably the worst thing Sam Altman has ever said in a public forum.

54:29Scott Galloway:People talk about how much energy it takes to train an AI model relative to how much it costs a human to do one inference query. But it also takes a lot of energy to train a human. It takes like 20 years of life and all of the food you eat during that time before you get smart. And not only that, it took like the very widespread evolution of the 100 billion people that have ever lived and learned not to get eaten by predators and learned how to figure out science and whatever to produce you. And then you took whatever you took. you took. So the fair comparison is if you ask Chachipiti a question, how much energy does it take once its model is trained to answer that question versus a human?

55:07And probably AI has

55:10Scott Galloway:already caught up on an energy efficiency basis measured that way.

55:14Ed Elson:Let's get your reactions.

55:16Scott Galloway:There are certain looking glasses into people's character and souls. And I've always thought two easy ones are how people treat service staff. Do they look them in the eye? Are they patient with them? Do they tip well? And then also how they treat their pets. I have a close friend who I like to drink with and no matter what at exactly 11, and I might lose him as a drinking buddy. He's like, I got to get home and get my dog out. It just, how you treat your pets and how you treat staff, looking glass into people's soul. And there's a lot of different things, right? This was a rare moment when we had a bit of a looking glass into Sam Altman's soul.

55:55Scott Galloway:and he's a fucking nihilist. He is basically saying there is a rational reason to invest more in non-sentient beings because sentient beings require too many resources. And it's like, well, all right, boss, that means you're the guy who's looking for the fuck doll and rather than having a human to have a relationship with that you don't, you really don't understand what the shooting match. The reason we're here is to create friction and resources and investment and relationships and resources to create sentient beings we can have relationships with. And that he even thinks that way, that it's unfair when you think about the amount of energy we have to put into raising a child to get to the point where it's intelligent that, wait, I can replicate that with less energy.

56:54Just that he's thinking that way feels, quite frankly, it just feels frightening.

57:01Scott Galloway:Someone who sees power and ROI as besting emotion, relationships, and sentience. And no, power and ROI and the markets and AI are all meant to unlock greater prosperity and an absence of anxiety such that you can focus on those little energy consumptive nightmares called children. That's the whole fucking point is that we do all this other stuff such that we can make the investments in these children that are worth it. And I thought this is such a statement from someone who has not had enough love in his life or hasn't experienced what it's like to raise children and genuinely sees maybe a legitimacy of the rise of the robots.

57:54Scott Galloway:It's kind of this Peter Thiel nihilism weirdness that they just look at stuff as ROI being the endgame. No, the reason why we pursue ROI is such that we can waste time and money and be very inefficient with the investments we make. I still haven't got my money back on my children. I'm not sure I'm ever going to. In almost every calculation of ROI, I say this to my kids all the time. I'm like, I talked to them about becoming a man and the idea of surplus value. And I'm like, you're surplus negative right now. I'm like, the school is spending way more than you're giving back. We give you so much more love than you give us.

58:33Scott Galloway:I can't, I'm like, do you know how much I'm spending on you? Like my son's been selling Pokemon cards and I'm like, okay, give that to me back. I forced my kid who just got into college to go through and tell me how much I will have to make pre-tax such that he can join a fraternity and sorority and, you know, and and make out with girls from Richmond, Virginia. Negative, negative value. But this is the whole point. The whole point of humanity or being a parent is that you make these investments because that's where you give in to purpose. That's where you give in to the most loyal Americans and some of the most satisfied Americans are veterans.

59:12Scott Galloway:They will never get an actual return on their service and being away from their families, but it gives them purpose that they're able to invest in something, that you're able to give up your resources and your emotions and invest in something, realizing on a tangible anodyne level, you'll never see a return. What you get back is knowing that you added value.

59:33Ed Elson:I think that's well said. I think that it is a very significant concern and question for us. I mean, what do we do about the fact that the leaders and the builders of the technology of tomorrow appear to have a genuine fundamental misunderstanding of the point of life, of the point of why we're all here, what existence and humanity is actually all about. I mean, what does that mean for us? I totally agree with you. I think Sam Upwied saw into his soul there. He does not have an understanding of these things. He doesn't have an understanding of purpose. And I think that quote said it all. Now, the question's going to be, Dari Amadei, he now appears to be in talks again with the Pentagon.

1:00:18Ed Elson:Is he going to fold on his previous position? I mean, I hope not. We'll see how these talks unfold. But I think he has something good here, which is standing up for his actual beliefs and his values. If he caves, then maybe it was fake. Maybe he didn't have values, at which point we'll have to turn again. But it is very interesting to see how this is all unfolding. I'm going to wrap us up here because I know that you need to go. Let's take a look at the week ahead. We will see inflation data from the Personal Consumption Expenditures Index for January and the Consumer Price Index for February.

1:00:51Ed Elson:We will also see earnings from Oracle and Adobe. Any predictions, Scott?

1:00:56Scott Galloway:My prediction is no. And that is Dario Amadei has taken his company from$14 billion a year in AR to$19 billion a year in AR with one simple strategy. No. And by the way, the average S &P company, I think, does$18 billion a year. And I think that is going to give CEOs the confidence to say no. I think you're going to see a half a dozen to a dozen CEOs over the next 30 days find their testicles and say no.

1:01:27Ed Elson:This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Carty. Our research team is Dan Chalon, Isabella Kinsel, Chris O'Donoghue, and Mia Silverio. Jake McPherson is our social producer. Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and join us for a fresh take on markets tomorrow.

1:02:01You held me in kind reunion As the world turns And the dark flies In love, love, love, love

1:02:31Thank you.