AI Hype vs. Reality, Plastic Surgery as Self-Investment, and the Future of Local Journalism

0:00Support for the show comes from LinkedIn. It's a shame when the best B2B marketing gets wasted on the wrong audience. When you want to reach the right professionals, you can use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals and 130 million decision makers, according to their data. That's why LinkedIn ads boasts one of the highest B2B return on ad spend of all online ad networks. Spend$250 on your first campaign on LinkedIn ads and get a free$250 credit for the next one. Just go to linkedin.com slash prof. That's linkedin.com slash prof. Terms and conditions apply.

0:38Rinse takes your laundry and hand delivers it to your door, expertly cleaned and folded, so you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you, like tea time you. Mmm. Or this tea time you. Or even this tea time you. So did you hear about Dave? Or even tea time, tea time, tea time you. Mmm. So update on Dave. It's up to you. We'll take the laundry. Rinse. It's time to be great. Avoiding your unfinished home projects because you're not sure where to start? Thumbtack knows homes, so you don't have to. Don't know the difference between matte paint finish and satin, or what that clunking sound from your dryer is?

1:21With Thumbtack, you don't have to be a home pro. You just have to hire one. You can hire top-rated pros, see price estimates, and read reviews all on the app. Download today. Welcome to Office Hours with Prop G. This is the part of the show where we answer questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to officehours at propgmedia.com. Again, that's officehours at propgmedia.com. Or post your question on the Scott Galloway subreddit, and we just might feature it in our next episode.

1:56You're welcome. First question, I have not seen or read these questions. Our first question comes from the user interestingad6601 on Reddit. They say, My question is about AI. I'm a big believer in AI. I've directed my career to learning everything I can about AI because I want to be part of that future. I'm concerned about the short term. So much money is being spent on infrastructure. The current investment pattern reminds me of the year 1999. Billions were spent on the backbone of the public internet because everyone knew the internet would ultimately transform the economy. Markets got way ahead of themselves.

2:28In 2000, we paid a big price. How is the AI boom different from the internet build-out boom and crash of 2000? I get different forms of this question a lot. So it sounds similar, but it's a different genre. It's a different song. And that is the earnings growth. If you look at oftentimes NVIDIA, which is kind of the infrastructure company or the safe bet, if you will, if you believe in AI, but you don't have the skills to pick out which LLM or which company or which application, the safe thing feels like you just go into nvidia which seems to be powering and is i think 90 of the processing or 90 of the queries in ai and people oftentimes equate it to cisco and people remember this from 1999 to 2001 cisco and amazon lost 90 of their value cisco and really never recovered recovered somewhat but nothing like the rip back of amazon and we have what is a pretty staggering investment.

3:22In 2024, about$400 billion went into AI infrastructure, data centers, chips, cloud. Meanwhile, generative AI revenue in 2024 was about$45 billion. That's so basically a 10 to 1 investment multiple. I mean, that's staggering, right? Usually, you know, we're spending about$10 for every$1 revenue, which means you are anticipating an explosion in revenue, right? Revenue is projected to hit$1 trillion by 2028, but near-term monetization remains thin. U.S. CapEx now equals 6 % of GDP. That's greater than the internet CapEx at the 2000 peak. And NVIDIA alone posted$27 billion in revenue last quarter, up 120 % this year.

4:01That one firm dwarfs all of 1999.com leaders. And that's the difference. In 2000, the valuation or the P-E ratio in the NASDAQ was around 80. And the top names in the NASDAQ today trade around 32. So that's still elevated, but it's much more grounded. Is this a bubble? It may be, but the pop here will be a boom, not a sonic boom, because these companies' earnings are pretty dramatic. Having said that, having said that, if I were to guess how an economic global recession, if someone were to say in 18 months, we are in not only a U.S. recession, we're in a global recession, and said, try to guess what was the string that people pulled on that started kind of the run for the exits.

4:46If you look at current valuations of all the AI companies, built into that assumption is the following, into their valuations, that they're either going to create a trillion dollars in incremental revenue over the next three to four years, or they're going to help companies cut a trillion dollars in costs that will flow to the bottom line. So far, I haven't seen companies creating a great deal of additional revenue. I haven't heard a lot. I haven't heard L 'Oreal or General Motors say, because of AI, we've increased our revenues. What they're saying is because of AI, we're confident we can reduce our costs.

5:18And they're saying this very quietly. So I think the majority, if not all of that trillion dollars, if it happens, is going to come from cost savings. Now, what does that mean? If you think about America, 150 million people work. Let's say half of industry is somewhat immune from the impact of AI on employment. Like, you know, chiropractors, massage therapists, pipe fitters, construction, they are somewhat immune. If you go into a restaurant, whatever it might be, they're somewhat immune from AI. So let's assume half of industry probably isn't going to incur a devastating loss in labor or employment due to AI cost efficiencies.

5:58That leaves half the employment base or around 75 million jobs. Let's generously say$80 ,000 or$100 ,000, including load, cost per job. To save a trillion dollars, that means you need a destruction, if you will, of about 10 million lawyers, consultants, bankers, etc., all the people who are vulnerable to AI. Okay, what does that mean? If that comes from an employment base of 75 million, you're talking about a 14 % or 15 % destruction in employment. And while that may not sound devastating, a 14 % to 15 % destruction in employment over three years in any industry is basically Armageddon. That means no one is getting hired.

6:37No. One in seven people are getting fired. That would be really serious for the labor markets. Or those valuations got to come down by half at least. And that is the total valuations of AI got to come down by half. But we're going to see one of two things happen, in my view, either a fairly serious destruction in human capital, employment across certain industries, or these companies come down and that will put pressure on not only the NASDAQ and the S &P, but the U.S. economy and the global economy. But that again, that could be wrong. Thanks for the question. Question number two also comes from Reddit.

7:11Loose ad 3529 asks, Hey Scott, I'm a 20-year-old male. Beginning my professional career, I'm considering spending a large portion of my savings and investments on plastic surgery to correct a very noticeable facial feature. I believe it can significantly boost my confidence and improve my appeal personally, professionally, and romantically, but the realest part of me worries I'm being superficial or insecure for doing this. Is spending money to change your appearance foolish, or is it just modern form of self-care and personal investment? this is a tough one because i think instagram has led to a level of body dysmorphia that is really unhealthy and that is i meet people and they'll say i'm thinking about getting my nose done and i'm like your nose is perfect or i'm thinking about i'm getting you know a chin implant or and i look at them i'm like and and what's interesting is this really impacts mostly the most beautiful people and that as they become obsessed with perfection and start doing procedures that are a little, in my opinion, the bar is too low for when people get procedures, especially young people getting Botox.

8:18I'm like, trust me, folks, that stuff is coming. Wait as long as you can. I get a Pico laser. I get Botox when I'm in New York. So I'm not immune from this vanity. I make the argument that, I don't know, I'm on TV a lot, so I can't look like the fucking bride of Frankenstein. It's not easy being a four on a scale of one to 10. You know, it's not easy just looking mediocre. Anyways, I have a lot of stuff done, so I'm not one to talk, but a couple things. One, without seeing it, I just can't tell. If you have a fairly awkward, weird nose or something that could be corrected and substantially improve your physical presence and your confidence, I say do it.

9:00I think people should do whatever makes them feel good about themselves while having some third parties validate that in fact it is something that other people notice or whether they're just channeling their insecurities through some sort of weird body dysmorphia and overdoing it too. I would not spend money on elective surgery that is going to be debt. I think you have to save this money. I think you have to be willing to pay for it. I would do some shopping around. It's like any other market. And I'm not saying you go to Walmart to get your nose done or whatever, but I think you want to be a thoughtful consumer around this stuff and not necessarily assume that the most expensive is the best.

9:36But also, I would talk to some people. I would talk to some people you trust and say, all right, you know, be honest with them. Are you going to spend your savings for the last 10 years to get corrective surgery on your ears that, quite frankly, other people don't really notice? This is a very personal decision. And what I have found with decisions like this is it's very difficult when it comes to your looks to read the label from inside of the bottle. So this is what we're going to do. We're going to find some people we trust and can be honest with us and say, I'm thinking about having this done.

10:07This is my financial situation. Do you think it's worth the money? Because there are probably certain things here. If you, you know, if you have severe scarring and a surgeon can really help that, then I would say, yeah, that's, if that's going to make you feel much better about yourself. But if it's going from being, you know, on a scale of one to 10, from a six to a six and a quarter and it's a lot of money, I would say, okay, work out and just figure out, you know, figure out other ways to make yourself feel confident. I don't think there's anything wrong with surgery. I think people should do things to make them feel better about themselves.

10:40But I think this is the kind of thing where you need several third-party opinions here. And oftentimes when I don't like the way I look, I'm looking for a quick fix that will make my life better, not recognizing it's not the fact that my nose goes off to the right. I got kicked playing, kicked in the face like soccer when I was in high school. And you can probably tell my nose goes to the right. And then it happened to me again, boxing. And I've thought about fixing that. And I found that whenever I really get serious about fixing my nose, it's quite frankly, because I don't like my life. And I'm thinking that fixing my nose is going to make my life better.

11:17No, it'll make my nose maybe a little bit better. But at the end of the day, I've decided it's just not worth the money. And more than that, it's not worth the cost in terms of downtime. And at this point, I'm just going to start leaning into the ugly. That's kind of a good feeling. I'm just going to lean into the ugly. Let's summarize. This is a very personal decision and you need third parties to really be honest with yourself about whether it's worth the cost. Do not use debt to get surgery. 40 % of households have medical or dental debt. And I just think that's got to be incredibly, I don't know, weighing on them, stressful on them.

11:50And, you know, figure out if it's really worth, if you've got a shit ton of money and it bothers you, yeah, why not? But you probably don't have a shit ton of money. So you need to do the cost, you know, the cost benefit trade-off here. I apologize I can't be more help, but I'm just loathed to tell someone to get surgery or not to get surgery without knowing some more nuance around this question. You need a kitchen cabinet here that'll be honest with you and some doctors to give you a sense of whether it's worth it given your current financial situation. Appreciate the question. We'll be right back after a quick break.

12:30Support for the show comes from Indeed. So you just realized your business needed to hire someone yesterday, probably because you've been so overworked you didn't even have time to take a step back and realize how underwater you are. But how do you get out of it? Why not try Indeed? With millions of job seekers and powerful tools that help you post-screen and interview all in one place, Indeed makes hiring faster, easier, and smarter. Indeed's sponsored jobs help you stand out and find top talent fast. How fast is Indeed? In the minute we've been speaking to you, 23 hires were made on Indeed according to Indeed data worldwide.

12:59And with Indeed's sponsored jobs, there are no monthly subscriptions, no long-term contracts, and you only pay for results. Join the 3.5 million employers worldwide that use Indeed to hire great talent fast. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a$75 sponsored job credit to get your jobs more visibility at Indeed.com slash Prof G. Just go to Indeed.com slash Prof G right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash Prof G. Terms and conditions apply. Hiring, Indeed is all you need.

13:37support for the show comes from linkedin it's a shame when the best b2b marketing gets wasted on the wrong audience like imagine running an ad for cataract surgery on saturday morning cartoons or running a promo for this show on a video about roblox or something no offense to our gen alpha listeners but that would be a waste of anyone's ad budget so when you want to reach the right professionals, you can use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals and 130 million decision makers, according to their data. That's where it stands apart from other ad buys. You can target your buyers by job title, industry, company role, seniority skills, company revenue, all so you can stop wasting budget on the wrong audience.

14:19That's why LinkedIn ads boasts one of the highest B2B return on ad spend of all online ad networks. Seriously, all of them. Spend$250 on your first campaign on LinkedIn ads and get a free$250 credit for the next one. Just go to linkedin.com slash prof. That's linkedin.com slash prof. Terms and conditions apply.

14:43Support for the show comes from Basecamp. Basecamp is a project management platform that strikes the perfect balance between straightforward simplicity and powerful capacity. That means you and your team get the processes you need and nothing you don't. Basecamp keeps everything in one place from communications to share to-do lists to deadlines to client assets. It's all there. Easy to access from one page, one single source of truth. The goal is to keep everything in Basecamp. But if you still need to integrate with other platforms, including Google, Figma, Dropbox, Airtable, and more, Basecamp can do that too.

15:14If you're tired of having information scattered across multiple apps, if your subscription fees are adding up just to get the basics done, If your projects are easy to start but hard to finish, it might be time for Basecamp. Still not convinced? You can join free live access classes to get your questions answered or reach out to Basecamp's support team 24-7. Wherever you are, Basecamp is ready for you. Sign up for a free account at basecamp.com slash prop g. That's basecamp.com slash prop g to sign up for free. Get somewhere with Basecamp.

15:51Welcome back under our final question.

16:21assuming the FCC allows it. And so as somebody who is trying to survive in this changing landscape, I'm wondering what advice you have. One idea I have is to start a podcast. I cover health stories. So I'd like to expand my stories in a podcast, you know, have deeper conversations. But I want to know like exactly what I should be doing to make it. I love my job as a journalist. I want to continue. I just want to also make a living. So any advice you have is really great. So I think you're being smart to think about this because the market is bigger than any individual performance. What do I mean by that?

17:03You could be the greatest TV journalist or local TV journalist in, you know, Lubbock or Austin or Sacramento. And still, it is really it's going to be a really difficult way to make a living the next 10 or 20 years because local news now is basically where old people get their weather. And the thing that was keeping local news alive was the Local News Employment Act was politics. And because of Citizens United, where they decided that money was speech, so much money has gone into campaigns. And they thought, okay, who votes? Old people. Old people still watch local news. So the Hearst family and some other people went around buying up local news stations in swing states, knowing that every 24 months, there'd be this tidal wave, this tsunami of advertising to local news where they would reach voters.

17:50And then came Trump. And this is where, quite frankly, local news stations and people such as yourself are, quite frankly, are fucked. And that is Trump didn't go newsy. He didn't go on local news stations, much less Fox, MSNBC or CNN. He went on podcasts. And I think you're about to see an enormous transition or reallocation of spending out of broadcast news, cable news, into podcasts and direct response vehicles, you know, the traditional guys, Meta and Alphabet, and we're already seeing it. So what do you do? Quite frankly, I just think you're thinking the right way. And that is, as long as you're there and you're making a good living, use it as a platform and try and create a flywheel.

18:33What do I mean by that? If you're a good journalist, which probably means you know how to write, you know how to cover issues, can you write books? Can you write newsletters? Can you host conferences? Can you get a speaking gig going? Can you produce a podcast? If you want to produce a podcast, start right away because there's a natural moat. What is that natural moat? This could be the worst podcast in the world today. And 160 ,000 people are going to listen to it because the dirty secret of podcasting is the RSS feed. The PropG RSS feed means that anything we put into RSS feed gets downloaded to a quarter of a million iPhones that moment.

19:09And the dirty secret number two is that advertisers consider that a listen. So Joe Rogan, who's been doing this for 14 years, has this huge built-in moat because millions, probably 20 million people every time he puts out anything, get it downloaded onto their phone and advertisers go, that's 20 million listens. So I think this is one of those things where you go, ready, fire, aim. It is a very difficult business. Now, if you in fact break in to the top two, three, 500, it's an amazing business because the means of production is really inexpensive. What do I mean by that? Your local news station, as little as they're paying you, costs a lot of money because it's probably union.

19:47They have cameras. They have office space. They have a van with a satellite link up. They have some older dude they have to pay a lot of money to, although that's going to change. They have producers behind the camera. I mean, it's just that shit. The means of production is expensive. The ultimate example, Stephen Colbert going from 200 people to probably eight when he goes to a podcast going from 60 million revenue to 20 million. He'll still make 10 million a year. but the 192 people that don't make it out of the podcast arc from his show are going to be getting their real estate license. So this is what you want to be thinking about.

20:17If you're really committed to journalism, you got to build a flywheel. Is it newsletters? Is it speaking gigs? Is it a book? Is it a podcast? In sum, I'm not here with a message of hope, but you're thinking the right way. And I'd be thinking, should I be writing a book? Should I be writing a news column? Should I be trying to figure out a really interesting rap on a certain angle and get gigs hosting and speaking at conferences? Should I be thinking about a podcast? But you're smart to be thinking this is one part of the flywheel, but it's not going to sustain a growth career. It is you would much rather be good in an industry that's growing, which is podcasting.

20:55Books are actually holding their own. Events are growing. Then great in an industry that is melting, which is the industry you're in right now. I apologize I'm not more optimistic. What I will say is that you're thinking the right way. Appreciate the question and best of luck to you. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehours at PropGmedia.com. That's officehours at PropGmedia.com. Or if you prefer to ask on Reddit, just post your question on the Scott Gallery subreddit and we just might feature it in an upcoming episode.

21:33This episode was produced by Jennifer Sanchez. Our assistant producer is Laura Janair. Drew Burrows is our technical director. Thank you for listening to the PropG pod from PropG Media.

21:50Support for this show comes from Airbus. It took 100 years for electric vehicles to catch on. Modern solar panels? Half a century. Lithium batteries? Decades to go from their debut to daily use. It's a pattern. Energy tech breaks through, stalls, and then something tips the scales. But for every success, there are even more almosts. So what if there was a breakthrough sitting at this crossroads right now? SAF, or sustainable aviation fuel, could forever change the future of flight. Learn more about how Airbus is contributing to accelerate this journey at fly.airbus.com slash theflightpath.

22:37Blockchain is reshaping every aspect of society, starting with finance. It's happening across industries, across sectors, and across the world. And it's happening with Ripple. With more than a decade of blockchain experience, over 60 licenses, and strong institutional trust, Ripple provides financial institutions with blockchain and crypto-powered solutions across payment and digital custody applications. This means secure, 24-7 transactions, moving value across the world faster. Find out more at Ripple.com.

23:15As marketing channels have multiplied, the demand for content has skyrocketed. But everyone can make content that's on brand and stands out with Adobe Express. You don't have to be a designer to generate images, rewrite text, and create effects. That's the beauty of generative AI that's commercially safe. Teams all across your business will be psyched to collaborate and create amazing presentations, videos, social posts, flyers, and more. Meet Adobe Express, the quick and easy app to create on-brand content. Learn more at adobe.com slash express slash business.