Is Energy the Next Big Trade? + How to Actually Tax Billionaires

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2:22Scott Galloway:Welcome to Office Hours with Prov G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. Anyway, if you'd like to submit a question for next time, you can send a voice recording to officehoursofprovgmedia.com. Again, that's officehoursofprovgmedia.com. Or post your question on the Scott Galloway subreddit, and we just might feature it in our next episode. Our first question comes from Reddit user TheGreenLawn, who says, Scott, energy is arguably the defining capital story of the next decade. AI is turbocharging electricity demand, and critical mineral supply chains are reshaping geopolitics.

2:54Yet, as an industry insider, I feel that the overall topic rarely gets the same narrative treatment as tech or finance.

3:01Scott Galloway:Do you see energy as the next great investing story? Thanks, and I disagree. I think it's getting a ton of attention, whether it's sort of adjacent to data centers or nuclear powers rejuvenation. It's just there's a ton. I think the best performing stock of the last three or four years might be Bloom Energy. And so people are sort of going down the stack, if you will, of the supply chain, and everything sort of leads to energy. So I think it's getting a lot of attention. Why? Why? Because the scale of the AI buildup, AI's CapEx boom is the second largest as a share of US GDP in history. Bigger than the railroads, second only to the, I think, the Louisiana Purchase.

3:44Scott Galloway:As not as big as, I think the railroads at one time, there was two railroad moons. And I think at one point it was like 8 % of GDP or even greater. And then there's the buildout of the electrical grid, the highway system, the Apollo program, although that wasn't very big. and then the internet and sort of the telco infrastructure. What's interesting is typically kind of two or three years post any build-out or infrastructure build-out that takes more than two or 3 % of GDP, there's a crash because you can't justify the build-out economically. And so unlike past tech booms, Facebook, Instagram, DoorDash, it's fundamentally a supply-side story about making chips, building data centers, empowering them.

4:26Scott Galloway:It's money creating demand for energy, not the reverse. So what does that mean for electricity? The IEA reports the data center electricity demand grew 17 % in 2025 against just 3 % growth in overall global electricity demand and projects it will double by 2030 with AI-focused centers tripling. To put the investment scale in context, the five biggest tech companies spent more on CapEx in 2025 than the entire global oil and gas industry invested in production. So then why is your electricity bill going up, you might ask? prices are rising near data center hubs, but the real culprit isn't AI stealing electrons from consumers.

5:03Scott Galloway:It's the cost of transmission infrastructure, transformers, wires hit by tariffs, post-COVID labor costs, and decades of deferred investment. Isn't that interesting? It's maintenance, the supplies to build this shit, as opposed to the actual energy itself. I guess you could say it's the cost to build the infrastructure for the energy, not the electricity itself. Hmm. Tomato, tomato. There's also a geopolitical problem nobody's talking about. China controls roughly 80 % of battery-grade graphite and rare earth elements, and in 2025 began weaponizing that dominance through a series of escalating export controls on materials critical to chips, EVs, and defense systems.

5:43Scott Galloway:The Council on Foreign Relations called it a dangerous inflection point for the U.S. economy. U.S. policy has made all of this more difficult, the one big beautiful bill signed July 4th of last year terminated most IRA clean energy credits years ahead of schedule. Analysts now project it will reduce new clean energy additions to the grid by 50 to 70 percent by 2035. I think in the last year, China's added more solar capacity than we've added in the last 10 or 25. It's insane how they're going long on energy. And we're just assuming that the capex from the small players will catch up. However, economics, despite the collapse and the support of renewables by this administration, economics might win and renewables keep getting built because they're simply the cheapest and fastest way to add grid capacity.

6:29Scott Galloway:I remember being in South by Southwest and my PIVOT co-host's ex-wife, Megan, a really smart woman, came up to me and showed me there's this site in Texas showing where all the electricity is coming at that time. And in the middle of the day, literally they were getting 60 % of their energy from wind and 22 % or 17 % from solar. So the bottom line is the economics are beginning to pay off. And as China goes deeper and deeper into solar panel production and batteries, the scale, they get cheaper and cheaper. And in some, renewables become competitive. And I would imagine the biggest EpiPen jolt to the heart for renewables happened with the spike in oil prices.

7:12All of a sudden, renewables are going to be just have an increased focus and investment in the private sector. Now, does that mean we shouldn't be massively as a as a nation investing in renewables? Yeah, I think we should.

7:24Scott Galloway:I think we should also be investing in chips. I think the the war, if you will, is not going to be fought over energy as much as it's going to be fought over who controls rare earths, which is China's dominance and leverage and who controls chips, which is the U.S. and Taiwan's kind of leverage or advantage. The power argument, I think that possibly, possibly, that while it appears everyone is moving towards the kink in the hose, the foot on the carotid artery of AI is inability to keep up with power demands. I typically find when everyone's worried about something, that's not what you need to be worried about.

8:03And I also would hypothesize that possibly different technologies around quantum, different technologies around the advances in chips are not going to increase or not only will increase compute and inference, but will massively decrease the amount of power needed. So I wonder if the innovation is going to not be as much around improving the quality of the supply as it will be around decreasing the demand for power consumption, if you will. But the word is out. Power stocks, Constellation Energy, which I believe is the largest owner of nuclear power plants, I mean, these things, even utilities, have skyrocketed.

8:50So I think it's gotten a lot of attention. And I wonder if the trade is, if it's already too late for that trade. But I think it's getting a lot of attention. And the only insight I would offer is that because we're so worried about it, I wonder if people are fast at work at reducing the demand of all of the chips and LLMs and data centers or figuring out technologies that aren't as energy thirsty, if you will. I appreciate the question. Question number two is an email submitted by a listener.

9:18Scott Galloway:Scott, you recently pushed back against what you called AOC's demonization of billionaires. I've always believed policy should focus more on raising the social floor than attacking wealth itself. But today's extreme concentration of wealth and power increasingly distorts democratic representation, rights, and influence. At the same time, rhetoric rooted in anger and division seems to resonate more than appeals to hope. Doesn't AOC's more confrontational tone reflect a political reality that now aligns more closely with our society's dynamics? Cheers. So just for context, I put out a video that went semi-viral.

9:53I basically said that I was in favor of Mom Donnie's tax on pied-a-terres.

9:58Scott Galloway:If you're wealthy enough to own a second home in Manhattan that's worth more than$5 million, you're wealthy. And I think it's fair to say that in the last 30 years, there's been an enormous transfer of wealth from labor and consumers to shareholders. And put another way, the wealthy. And the top 1 % by any metric have just outperformed every other part of the lower 99. So nobody likes taxes, but if you're going to increase taxes, I think it makes sense to restore a progressive tax structure. And in sum, I'm now believing that as somebody who has been totally focused on money their whole lives, once you get to a certain point, you got no incremental happiness, which says to me the following.

10:39A progressive, a very progressive tax structure is the best place to increase taxes or the least taxing place to increase taxes. The great economic boom in the great society and productivity and an embrace of democracy and young people feeling good about their country having more, what they perceived as greater potential was when we had marginal tax rates of 60, 70, and even 90 % at one point on the super wealthy. I'm not suggesting we go back to 90%, but I'm suggesting that billionaires should never lower tax rate than, you know, middle-class Americans. And people will respond, well, the top 1 % pay 48 % of taxes in New York.

11:19I get it, but the super rich are figuring out ways to avoid real wealth because owners, essentially, their ownership, the asset they own compounds tax deferred, if you will, whereas earners lose 10, 20, 40 % of their money every year. The people who get most screwed in our tax system are actually what I call the super earners. And that is mom's a baller at a law firm, dad owns a chiropractic clinic, they make one and a half million dollars combined, but they don't own anything. They just make everything through current income. And that gets taxed in New York, New Jersey, or California at 52, 53 percentage points.

11:53So I believe that a pied -à-terre tax that goes after the asset is not going to reduce anyone's quality of life. I will lose a hundred grand a year. I own a home, I've done the calculation, but it's worth it. And quite frankly, I can afford it as I I believe most people who own Piedot Terrace in New York can. So there's that. What caused the pushback or what you're talking about is I went on to say that Momdani personalizing the attack and doxing Ken Griffin and going to his condominium building and demonizing him, I think is how we elect J.D. Vance as president. Why? In America, distinct of a very loud minority of voices, there are a lot, maybe even the majority of Americans, all aspire to be millionaires themselves.

12:35And so they don't, for the most part, shitpost millionaires.

12:40Scott Galloway:Now, are there billionaires that behave poorly? Is there an Epstein class that deserves to be called out or imprisoned? Absolutely. But the majority of Americans themselves aspire to be wealthy. And one of the great things about America is that we do, in fact, celebrate success and we want to create a lot of millionaires. Should we have someone worth$650 billion? I don't think so. And I'm increasingly believing that power corrupts, absolute power absolutely corrupts, and the only Kevlar we have throughout history against this type of absolute corruption that comes from sequestering of all power to a small number of people is progressive taxation.

13:171945, to call it 1995, was an anomaly in history where the world's greatest innovation, the American middle class, emerged. It was an accident. Middle classes typically don't happen. And typically, a small group of very talented, very lucky people aggregate a lot of power and wealth and use that power and wealth to aggregate even more at the cost of the bottom 99.9. And because we came together as a nation and said we weren't going to let that happen, we had what I think was the most productive society in the world. And we seem to be reverting to the laws of the jungle and going back to a small number of people controlling everything.

13:52Having said that, I'm all for progressive tax policy, but how do we get there? How do Democrats actually be effective versus just being right? How do we redistribute income instead of redistributing virtue? We do this by talking about sensible tax policy, an alternative minimum tax on anyone making over a million dollars of 40 percent, on an alternative minimum tax of any company making over 50 million in profits of, say, 45 percent. You don't need to show up to people's homes and start demonizing them. And by the way, that's just really fucking stupid. He's going to, you don't think he's going to take that six and a half billion dollar project that he's working on in New York and figure out a way to do it in Texas or Miami.

14:37You don't think the, I think it's a quarter of a billion dollars in donations he's given to New York based charities. He's going to start giving elsewhere. It's just stupid. And that's what we do as Democrats is we'd rather be virtuous and get cheap applause at a fucking gathering of far lefties than actually figure out a way to get control of government or have influence in government so they can do their fucking job. It drives me crazy when Senators Warren and Sanders talk about billionaires paying their fair share. Well, bitch, do your job. And when I say bitch, I use it androgynously as someone who I'm sick of complaining, both Sanders and Warren.

15:14Democrats have controlled all three branches of government for years at a time. They've been in the Senate for fucking ever. And yet, as they have been there, taxes on the wealthy have gone down. So are you either ineffective or lying about your sincerity to create a progressive tax structure? So if you, or if we as Democrats want to continue to demonize young men, look at every podcast, every liberal podcast. It's essentially an eye roll about how irredeemable, incompetent, or generally predatory all young men are. It talks about how essentially the majority of white people are subconsciously or unconsciously racist and that all billionaires are bad.

15:57AOC has said no billionaire has earned their money. So Beyonce and Oprah didn't earn it. Jeff Bezos, he earned it. He was born to a single mother who was 17. Now, should he pay 50, 60, 80 % tax rates? I believe he should. And this is how we're effective, not just right. We don't demonize people. We don't play identity politics. We make a sober, thoughtful, competent argument around why we need to restore a progressive tax structure. And you're never going to get there if you lose 60 percent of the voting population, which is white, if you lose billionaires, many of whom are Democrats and would like to see a more progressive tax structure and support these ideas, or we lose the election like we did the last one because we demonize and don't see the problems that young men face.

16:53So let's do this for a change as Democrats. Instead of wanting to virtue signal, let's do our fucking jobs and get elected and restore a progressive tax structure. Am I in favor of increased taxation across the wealthiest Americans, alternative minimum tax, lowering the tax exemption on estates from 30 million to 1 million, triggering a tax event when you borrow against stock, which is the common practice of the very wealthy? Yes. How do we get there? Not by playing identity politics and demonizing people who you see as born wrong. That was a rant. Thanks for the question.

17:33Scott Galloway:We'll be right back after a quick break.

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19:47Scott Galloway:Welcome back. Question number three. Hey, Prof G. You often talk about taking edibles at night. As a 44-year-old dad, I'm trying to navigate some new ways to take the edge off a little bit at night. I'm wondering about your routine. Do you do indica, sativa, how many milligrams? I'm new to this world of edibles, so I'm interested to hear what you have to say. What should I expect? What does it do for you? How should I start this process? Any recommendations, et cetera? Would love any advice. Thanks for everything you do. Thanks. So I'm somewhat remiss to encourage anyone to start using alcohol or cannabis or anything else.

20:28Scott Galloway:So I'll just tell you what I do, and I'm not endorsing this. I guess I'm sort of endorsing it because I'm telling you what I use. So, look, I smoked a decent amount of pot in college. I don't think more or less than most fraternity jarheads at UCLA. But I really enjoyed it. It was bonding. I had trouble keeping on weight. And then one of the things, I used to probably get high two or three times a week with my friends. And we would just eat a lot, which was good for me. And it was a lot of laughs, a lot of bonding laughs. And there's some evidence that for those of you young people out there that you need to be very careful with THC as your brain and prefrontal cortex are still evolving.

21:11Scott Galloway:And maybe that's why I'm so fucked up. But anyways, so I think it's a different ballgame for young people where there's evidence, especially if you have any history of schizophrenia or psychosis in your family. And also just generally if you have, and this is true of alcohol and anything else, if you have any history of addiction. So enough of the land acknowledgments. What do I do? I didn't smoke after college. I decided to get very serious about work for a good 20 odd years. I didn't actually drink that much or smoke. I just focused on work, which in some way is sort of an addiction. And then as I got older, I decided I wanted to get more into or be more social.

21:49Scott Galloway:I started drinking more. I started smoking more. I don't smoke and go out. And I don't usually do edibles when I go out. Because the thing about THC for me is occasionally it makes me anxious and paranoid. And that is not a good time when you're out. I like to be at home. So I would say once or twice a week, I take an edible. Now, everyone's different. I take a brand called Wild Thyme. And I get them at a dispensary in Aspen. and I use pear gummies. And I really like them. I use a hybrid. They're 10 milligrams. So I only take half a gummy. I only start with five milligrams. And it's one-to-one THC and CBG.