Please welcome Ed Nelson and Scott

Galloway.

[music]

[cheering]

How are you doing?

[cheering]

[applause]

>> That's pretty good. That's pretty good.

We're finally here. It's good to be

here, Scott. It's great to see you in a

Patagonia vest. So am I. Dress, dress

the pulp.

>> Yeah, I look like the chairman of a VC

firm that's been asked to retire for the

last 40 years. Look at me. [laughter]

Can we get rid of this [ __ ] By the way,

first and last time I'm wearing a

Patagonia vest.

Ed, Ed, Ed, where did you go to school?

I forget.

>> I went to Princeton.

>> That's right.

>> Yay, douchebags. Okay.

So, Ed, I don't know if you know this,

but uh I have a little bit of history

here in San Francisco. That's right.

That's right.

Lived in Petrero Hill, then in Noi

Valley, bought the house next to where

Mark Zuckerberg lives now. And in

addition to the fact that I sold it for

$900,000 and it's probably worth about

$14 million now, I would have given up

the money just for the opportunity to

live next to him and be just out on my

porch every day showing a little

middrift like

>> when he comes home.

>> It had to happen when he drives.

>> Had to happen.

>> Hey [ __ ] still depressing teens.

[laughter]

>> Yeah. Yeah. Clap for that. That was

impressive.

>> [laughter]

>> All right. And I don't know if you know

this, but the real seinal like

experience for me in the Bay Area is

while you went to Princeton, um I didn't

go to Princeton because I didn't have a

lot of money and my SAT scores were

really really high. Uh

uh first part of that is true. Uh

anyways, I don't know if you know this,

but I went to this school that has in

addition to uh well, you may know this.

What school has the most startups of any

school in the world?

>> Most startups of any school.

>> Any school in the world.

>> Uh Stanford maybe.

>> Uh that is not correct. Uh

>> wrong.

>> It's the same school that not only has

won 248 medals of the Olympics, but has

also graduated more people into the

Peace Corp than any school in the world

is Peace Corp in the world. It's also

the school that will graduate more

uh low-income kids than the entire Ivy

League combined. In addition, In

addition, I'll give you one more hint.

>> Okay.

>> There we go.

There we go.

[applause]

That

>> That is so emotionally manipulative.

Meant to get you to like [laughter] me

more, isn't it?

They're not nearly as cute now. They've

developed these awful things called

opinions. They're literally awful now.

Anyways,

>> but based on the image, I'm going to

guess that the school is Cal Berkeley.

>> You still don't get it. I'm going to

give you one more hint. One more hint.

[snorts] Hit it.

[cheering]

Heat. Heat.

[music]

Heat. Heat.

[music]

[cheering]

[music]

>> [cheering]

[applause]

>> Hello to our first Prop Markets live

tour here in fantastic San Francisco.

[cheering]

>> [applause]

[cheering]

[cheering]

>> You look great.

[applause]

>> Today's number 49. [music]

That's the percentage of billboards in

the Bay Area that are advertising AI.

Ed, true story.

Uh, I went into my doctor's office with

a shoulder problem. And he [music] said,

"Well, I need you to pee in a cup and

then we have our AI look at it." The AI

looked at it and said, "Your labroom's

damaged. You need to take this medicine,

and then when you come back, you're

going to pee in another cup, and the AI

is going to tell you how you're doing."

So, he came back and he said, "You're

not taking your meds. The AI is pissed

off of you. Take your meds." I started

to get pissed off. So, I went home and I

had uh my [music] wife pee in a cup. And

also, and I'm not proud of this, I

jerked off into the cup and I came back

and they gave it to the AI and the

doctor came back and said, "Your wife is

pregnant and uh the father is your

friend Brett and if you don't stop

masturbating, your arm's never going to

get better.

>> Welcome to G Markets Live.

[applause]

It never ever gets old. It is so good to

be here

>> in the global capital of technology,

the capital of venture capital as well.

Um, and I'm really excited to get into

this show. But before we start the show

here, Scott, I just want to read you a

couple of quotes that I've collected

over the years that you have said about

the venture capital community because I

know that there are probably a lot of

venture capitalists in the room right

now.

So, I just want to make sure that we're

all on the same page and I just want to

like hear what you have to say about

this. So, I I found this from a podcast

we did uh a couple years ago. You said,

quote, "I've worked with a ton of

venture capitalists. They're not the

sort of loving, caring people that are

depicted on the website.

Okay. You later said that there are

quote very few cohorts less pleasant,

more self-absorbed, and more convinced

they're changing the world than venture

capitalists.

[snorts] And then a few months later,

you said that venture capitalists are

quote generally speaking awful people.

And then you later clarified in the same

episode that actually they are quote the

absolute worst [ __ ] people in the

world.

So

I Scott

just before we start I just want to ask

you what do you mean by these

statements? What do you mean venture

capitalists are the worst people in the

world?

Yeah, but you left the brightest people

you've ever met that know abso [ __ ]

lutely nothing about your company

[laughter] would sleep with their sister

for a nickel.

Um,

if you meet a guy in a blazer and he

brightens up a room by leaving it,

chances are he's a venture capitalist.

Uh,

>> they're already leaving out the doors. I

see them now.

>> Yeah,

>> this is 70% VCs. So just another thing

about the Bay Area and I love so many

things but there's a few things I don't

love about the Bay Area. One venture

capitalist but two I'm and this isn't in

the script. I am so done with this

optimization [ __ ] of men my age

trying to optimize for their health.

This is how you optimize [ __ ]

[applause and cheering] What?

And I'm being very serious here. So the

fastest zero to a billion dollar

companies in history. I think everything

in life reverse engineers to essentially

biology and astrology which is

manifested in business. So I think

there's a lot of life lessons in

business. Fastest 0 to billion dollar

retailer in history was Old Navy. And

it's got a very powerful axum. It's 80%

of the gap but for 50% of the price. The

fastest 0 to billion dollar revenue

airlines Southwest 80% of the market

leaders for 50% of the price. And I

think, and I'm being serious now, that

these guys who were trying, it's mostly

guys trying to optimize to 97% with all

these cold plunges and red light

[ __ ] and measuring their sleep,

which would just stress me out so I

couldn't sleep. This is, trust me,

>> I'm looking for all the people who do

that in this audience.

>> I think it's most of them.

>> This is the axiom. Optimize to 80%. And

I'm serious. And that is all right. We

all know you're supposed to be healthy.

You're supposed to eat well. Manage your

sleep, be fit, but manage to 80. In the

other 20%, [ __ ] enjoy your life. Have

dessert.

Drink a little bit. Approach strangers

and make an ass of yourself.

Hang up the condom you never used. Just

like have [laughter]

the the right go to 80. Anything above

that, trust me on this. It's not about

lifespan. It's not about health span,

it's about fun span. 80% old nav your

life. I'm sorry. Back to the original

program.

>> Fun span.

>> Great way to start the show. I totally

agree. Without further ado,

>> yep.

>> Let's start with our first story. So, it

has been a sleepy few years for the IPO

market, but it is about to come roaring

back. SpaceX, OpenAI, and Anthropic are

all set to go public this year at a

combined valuation of roughly $4

trillion.

Just for context, that is more than

every dot IPO put together, inflation

adjusted, and also equal to half of the

combined value of every IPO in the 50

years before it.

So, the last time that we saw an IPO

frenzy this dramatic was in 1999, which

made a lot of Silicon Valley investors a

lot richer, right before it made them

actually a lot poorer. IPO mania was in

many ways the beginning of the end. The

NASDAQ began its collapse in March of

2000 and it eventually lost 78% of its

value in two years. So, we sit here

tonight in San Francisco on the eve of

the next IPO mania and the question that

I will pose to you, Scott, is will it

look like 1999?

So, there's a lot of analogy. There's

there's some similarities, but there's

also some pretty stark differences,

right? So, there was uh a confusion

around how this is all going to manifest

or play out. So, there's a digression to

investing in the technology and

infrastructure layer. We did it with

Global Crossing and Cisco which lost 90%

of its value. There was momentum

euphoria.

Uh a certain technonarcissism. Back then

it was the internet's going to change

everything. Now it's AI is going to

replace everyone. But there was a

certain belief that that this region and

these companies were going to be the

operating system for the world moving

forward. There's some pretty stark

differences though and that is

while you had about 60% of GDP growth

was from uh infrastructure spending back

then or growth or investment in internet

companies, it's now about 90% of GDP

growth is from the infrastructure

buildout. So it's even scarier. And

typically whenever you get over 3% of

GDP is being invested in any

infrastructure, railroads, electricity,

electrification, the highways, again,

telco in the '90s, within 24 months

there's a crash. Uh but where it's

different is I don't think there'll be a

crash this time. I think there'll be a

pretty vicious uh recorrection or price

recalibration. But where things are

different is the following. The

companies now are cash juggernauts.

they're incredibly profitable. Whereas

in 99 it was just I don't know if any of

you remember this, the Globe that went

up eightfold on its IPO. Um, Pets.com,

um, I mean, Los, there was just all of

these ridiculous companies and

>> Red Envelope. [snorts]

[laughter]

>> I had to.

Dude, you were an intern here like 24

months ago. Um,

anyways,

>> you find me today. You got the clips.

>> But these are really profit. These are

incredibly profitable companies. They're

financed with their own cash flows, not

with the debt. But if you look back and

walk down memory lane, Google was still

sort of this PhD project that was run by

two guys that look like Chetch and Molly

dealers. Amazon. [laughter]

Amazon was a book company that was

losing a lot of money and a ton of smart

internet analysts were convinced it was

going to go bankrupt because it had too

much debt. eBay was considered a really

powerful company. It was making money

selling [ __ ] to people in Ohio. And

probably the most important tech media

company, maybe even the most important

media company in the world at that time

was a company called Yahoo, which bought

a company called Broadcast.com from Mark

Cuban for $5.4 billion. So, I love Mark.

I think he's very smart. He's also one

of the luckiest people ever. Um, and

then you had just a ton of companies

that got swept off swept off the planet.

So, it feels as if this time it's

similar but different. But what is the

same is a group of young men who are

socially awkward, who are self-absorbed

and think they're going to change the

world and have a totally inflated sense

of self. So I think that there's a

certain kind of narcissism that infects

um this this type of movement. Whereas

back then it was going to change

everything. Now the kind of narrative is

that AI is so impressive and powerful

that it's going to replace all of us.

And in 99 to their credit they got it

right around the internet. They just got

the arc or the time span wrong. And I

think the same thing is true here. I

think AI will in fact replace a lot of

costs and increase productivity. But

again, I think we got the time or the

arc. I don't think it's going to happen

as quickly as as everybody thinks. But

more importantly, back to me, um, in 99,

this guy named Frank Frank Quatron from

Credit Swiss First Boston was going to

take the company I'd started public, uh,

Red Envelope. And I remember a bunch of

internet CEOs, we were flown to an

airfield to look at Bombardier jets

because they said they would take stock

in a private company exchange for a jet.

And it was a bunch of 30some year old

speaking of self-absorbed people who

weren't, you know, couldn't get dates to

the prom. We were all out looking at

these jets and picking out our jets. And

even then, I had enough mindfulness to

know

this is not right. This this doesn't

feel right. And within three or four

months, we were no longer looking at

jets. And [laughter]

and I remember

uh I remember uh I was in a board

meeting of my company, Red Envelope, and

I accused the chairman of our company,

and it's been a long time, so I don't

hold any grudges, Mike Morris. And

and I said to Mike, you're using you're

using red envelope as a dumping brown

ground for the failed products of your

portfolio company companies. And on the

way to the airport, they called me and

said, "We're kicking you off the board."

And so I got kicked out of the band I'd

started. And I remember being at SFO and

I had this flashback tonight. And

getting out of the car, we used to rent

cars back then. Um, and I remember just

being frozen. Like I had never in my

life, I was 34 at the time. I'd never in

my life like had that kind of

professional punch in the face. And I

remember getting out of the car and like

just being paralyzed for a good five or

seven minutes. Like I literally I just

didn't know what to do. I just didn't do

I call a lawyer like what do I do? I

remember just sitting outside of my car

and finally the lady who gives you

checks in the cars came out and said,

"Sir, are you all right?"

And then just to be uh serious for a

second, um for those of you who I don't

know how many of you are here living in

the '9s, but it wasn't it wasn't the

internet that was the most dramatic

thing. I at least for me it wasn't in

terms of what I think of as being the

thing I remember most about San

Francisco in the '9s that really has

like stuck with me. Does anyone want to

guess what it is? It's it's not This is

not light at all.

AIDS.

It was if you're under the age of 45,

you probably think of CO as being

hopefully what will be the the most

dramatic health scare.

You are literally walking around this

neighborhood

and there were these beautiful young men

everywhere dying.

Um

I mean it was it was just like it was

catastrophic.

Um so and you know fortunately uh the

warm warm

the warm the warm hand of science like

pulled us out of that. But if you lived

here in the 90s, I mean, it literally

was a plague.

And it it was like the best and the

worst of American science in terms of

how we responded to it.

But that's how I think of San. That's

like what what I what I remember most.

Get me out of this, Ed.

>> [applause]

[applause]

>> Yeah, I have all my all of these numbers

and all of these notes and now it's now

I'm not sure what to talk about.

>> You still ain't Mike Morris. [laughter]

>> Well, I am going to talk about numbers.

>> Yeah, [laughter] go ahead. Go for it.

>> Because that's what we're here to talk

about. Um, so when we think about what's

what are some of the differences to

today, I think that you make a lot of

good points. One thing that we should

point out though is that we have these

three companies that are literally

combined they're going to be worth $4

trillion. I mentioned some of those

stats. It's going to be 6% of the global

public equity markets is these three

companies.

>> Yeah. And you talk about profitability,

which for the longest time I wasn't so

worried about myself either because I

looked at these companies like Google,

like Meta, like Amazon, which are these

cash juggernauts. They're spending

unbelievable amounts of money building

these data centers, setting up AI, and

everyone was saying the AI bubble is

going to happen because they're spending

so much money. We haven't seen the ROI,

and we'll get to that in a moment. But I

think something that you and I were

saying was, well, they have the cash to

do it and they've been saving up this

cash for years and now is their moment

and here they are, they're doing it.

However,

let's look at these three companies that

are going public. Let's look at SpaceX.

>> Yeah.

>> Which is going to go public at

supposedly at a $2 trillion valuation,

which is going to be a more than 100

times price to sales multiple. The most

expensive stock in the S&P today is

Palunteer, which is way out over its

skis, and it's trading at 64 times

sales. This is trading at 107 time sales

if it goes public at $2 trillion. Its

losses grew 700% last quarter. It's on

track to lose 20 billion this year.

So, I look at that, I say, "Okay, well,

that's not really a great business." By

the way, its revenue grew 15% last

quarter. And some say, "Okay, that's

fine." Actually, if you're an AI

company, which they claim they are,

that's not fine. That's six times lower

than Nvidia's growth rate. And also,

it's half the growth rate of this

podcast. So, we're growing faster than

SpaceX.

Just putting it out there. [applause]

So the idea that you're going to have

this company and then you're going to

have OpenAI

which is expected to burn $25 billion

this year. These are all again we don't

know these financials because they say

this to reporters and then we hear

people who are familiar with the matter

who tell us this is what the financials

look like. All I can tell you is

whatever's going on at OpenAI, it

probably ain't that good. And we also

know that because we saw this article

from Ronan Faroh who came on the podcast

and told us that Sam Alman is quote

unconstrained by the truth. That was

according to a board member. So I'm a

little worried about that too. And then

you got Anthropic which supposedly is

about to hit operating profits this

quarter. So maybe that's a little bit

safer but still it's losing a lot of

money and supposedly paying billions of

dollars to SpaceX. Okay, those companies

are now going to be a part of the

market. And not only that, the NASDAQ is

changing its rules. It used to be that

you had to wait 12 months after you go

public to join the NASDAQ to one of the

most popular passive index funds in the

world. They've changed the rules. They

said you only have to be public for 15

days if you are a mega cap company. If

you are, I SpaceX, OpenAI or Anthropic.

They have literally changed what it

means to be part of the market for these

three companies, none of which are

profitable. That part makes me a little

bit more worried and I wonder if that

feels more similar to 99 when you saw a

lot of these companies that were losing

billions of dollars. These ones are

going to be worth 6% of the global stock

market. [snorts]

>> Yeah. Well, often times the technology

survives evaluations and I would say I

mean if you look at for example SpaceX

three companies a rocket company a

satellite company and an AI company

that's playing catchup if you price each

of those three companies similar at a

similar ratio at the high end of the

market leaders in those respective

categories you get to about a 7 to800

billion market valuation there's an Elon

effect absolutely so even double it to

1.6 six trillion. Um

>> why not, right?

>> Well, it's true. [laughter] He he does

he does bring a certain vision that

shareholders absolutely love. Um but the

way I would describe right now SpaceX is

Snow White and the Seven Dwarbs and that

is Snow White is ridiculously hot. The

SpaceX is an incredible company. It's

got incredible moes. It's growing, you

know, about 30% a year, 16 billion in

revenues, 8 billion in operating

profits. An incredibly robust company.

probably the biggest moes I think of any

business in the world. 90% launch

capacity, two-thirds below Earth

satellites. But what he's done is he

said, "Okay, if you want to marry uh

Snow White, uh you've got to take these

seven dwarves that are just

dysfunctional and awful people and

expensive and add no value because he's

trying he's basically attached. He said,

"If you if you want to hang out with

Snow White at SpaceX, you have to also

invest in this this money furnace called

XAI." And if you look at and what's

really interesting is he clearly doesn't

believe as much. He's made it and

granted he's a visionary. There's no

getting around it, but he looks at AI as

the future and that he needs to catch up

fast. So, he's going to take his hot

property and use it as a means of trying

to raise incredibly cheap capital to try

and play catchup. The other two I

believe are incredible companies. But my

prediction is that similar to you know

if you look at these cycles um typically

what you have when you have this type of

spend you have a dramatic repricing at

some point because the public and the

capital markets are impatient. And I

think the way this is going to play out

in the next 24 months is that we're

already seeing, and this is our next

story, that a lot of companies are

starting to question

uh the kind of return they're getting on

these increasingly exorbitant uh bills

they're getting from their different

site licenses around AI. And then I

think geopolitics is going to come into

this in the next 24 months. And that is

if I was she, I would engage in AI

dumping and I would start flooding the

US market and going to CFOs of companies

sick of spending five 710 million on AI

and tokens and they're not really

understanding why and dumping the market

with incredibly cheap LLMs

uh out of China. And I think you're

going to see a dramatic repricing of the

AI trade. As a matter of fact, I would

uh or my prediction is in the next 24

months, AI is going to be dramatically

repriced down because I haven't seen nor

does anyone see a lot of like AI

moisturizer or you could argue

autonomous is maybe a use of AI, but

there's not a lot of new products that

you would say are creating incremental

revenue other than the LLM themselves

from AI. There is does appear to be a

lot of smart people saying we're going

to get dramatic efficiencies and we've

all probably seen hints of that, right?

We're not sending stuff to our lawyer as

often, customer service, etc. But if you

think in America, there's 155 million

people who actually work. Assume half of

them are AI vulnerable. That's 75

million. Say $100,000 per employee

uh uh 5 trillion. That means you would

need somewhere around 5 to 7 million

layoffs across the 85 million that are

in fact um AI vulnerable. So you would

have in certain in those industries

about a 10% labor destruction in the

next two to three years. That would be

chaos in labor markets. So one of two

things is going to happen. Either the

valuations of AI are going to come down

by 50 or 70% or we're going to have

labor chaos in these industries. And I

think it's going to be the former. I

think that you're not going to see

nearly the the uh job apocalypse. You

know, I this way I would describe as

apocalypse. No. And that is just as you

were trying to raise money back in the

90s on changing the world, now they're

basically catastrophizing and

[clears throat] fear is the product and

capital is the outcome. And

unfortunately for them, I don't think

the job apocalypse is going to come as

quickly as they're predicting. And so if

it's either going to be labor chaos or

valuations coming down by 50, 60, 70%. I

absolutely think it's it's the latter.

In addition, if you just look at the

biggest companies now that we're all so

intoxicated with, whether it's Meta or

Alphabet, in the last just in the last

five or seven years, all of them have

gone peak to trough, down 40, 50.

Meta was down 72% in 2022. So, it just

wouldn't be unusual for these companies

to to to have that kind of draw down. In

addition, I think this is effectively

the end of the IPO markets as we know

it. Because the way I look at it is the

IPO market is now the last stop on the

chump train. And that is what they're

saying is there's no reason to go public

because if the VCs still thought there

was juice to squeeze. You used to have

to go public to raise the 10 or 15

billion you needed. Now these private

VCs if they still see upside they can

find the capital. So effectively this

when these go companies go public, it's

effectively the smartest people in the

room who know the company the best are

saying we've squeezed as much juice out

of this as we can. We got to find people

stupider than us to invest at this

valuation. I think retail investors are

going to figure this out in a painful

way over the next two years.

Tokenization of private companies. I

think this effectively might be the end

of the traditional IPO market as we

know. This is going to be the question

is are these companies or are these

investors are the employees of these

companies are they all just going to

sell and what we have seen is that

SpaceX is looking at shifting the lockup

periods so that they can sell earlier

and I think you have to ask yourself if

you were an investor in anthropic if

you're an investor in OpenI if you're an

investor in SpaceX these companies go

out at a trillion dollars $1.5 trillion

$2 trillion the 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 for investors in this round two just

before we move on to the second story

here would you sell

in any of these companies

>> yes

>> yeah [laughter]

>> oh my god sell it if any of you hold

shares in any of these companies just

trust me on

as a guy who was looking at jets when he

was 34.

Sell everything. [laughter]

And there's always going to be pressure

from the VCs and your managers. Aren't

you in it to win it? Yeah, [ __ ] you. I

need a house, [ __ ] Sell everything.

So, 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

what what there's going to be some

really interesting second order effects.

11,000 people of 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 US

were up 4% la uh the last quarter.

They're up 48% in the Bay Area. It's not

all bad. You're also going to see

philanthropy absolutely surge in the

next 3 to 6 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, "Okay,

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. But I can't I mean again

and I've been I've been wrong in this

stuff before but when you look at just

as a as a general metric when you look

at for example a company like SpaceX

when Google went public in I think it

was 97 it was growing 240% a year and it

it went out at 10 times revenue. SpaceX

is going out at 100 times revenue and is

growing 24%.

So you literally have an a ratio that's

like a th00and to1 uh in terms of the

valuation metrics here. So this is this

feels they're much better companies

granted

uh but the valuations here feel

absolutely absolutely insane.

>> Well there's there's your instructions

your homework. Go sell all of your stock

in these companies.

Support for the show comes from ODO.

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[music]

Let's move on to our second story, which

is about a really interesting topic that

not enough people are talking about.

We're going to talk about a topic called

AI.

So

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 4 months.

According to the CEO COO, it is now

getting harder to justify AI costs

within the company. Microsoft is

cancelling its clawed 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. Service Now is another company which

just blew through their entire anthropic

budget. Technical 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 incre in 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 some 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 uh in your

from your AI API uh and 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?

So I will I will pose that question to

you. Um

at what point is is it is it too much?

>> I think we're already seeing hints of it

and I I don't think I think 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 in 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 uh MIT

that he found that about 5% of the

projects uh 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 is like adding dot um

back in the '9s. But I 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. Nvidia's

first miss probably takes I would think

the entire market down five 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 um our expenses here. I don't

I 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 um ROI we'd

anticipated.

>> Yeah. I mean once we heard a quote this

week from I mean not a huge company the

CEO of Match Group um but he said that

that AI is costing the company5 to10

million a year and he said quote I think

we're benefiting from it but it's hard

to feel it was what he said.

So that's not great um if we're supposed

to be riding on this you know

multi-trillion dollar uh technology

that's going to transform our economy. I

think there are a few possibilities that

are 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 this rel 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. Uh

you have you have uh models like um Deep

Seek which obviously went very got very

popular. Uh Kimmy, K2, Jiu, 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. It's this very sophisticated

kind of technological term for theft.

They're basically stealing people's

stuff.

>> And that's 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 Chat GBT. We're going to use this

cheap Chinese thing that can kind of

deliver us very similar a very similar

result. 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 if China overtakes the US

in AI essentially because they were

distilling our models, i.e. stealing

them. How do you think that might play

out? Well, right now, I mean,

essentially the US is concentrated.

The only thing that's sort of propping

up and giving any license to the 34%

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 we don't

>> That's right. [laughter]

Um, 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.

and that is they're going to decide that

just as they've decided that Chinese EVs

can't come into the US market, I think

they're going to ban um 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. Uh

because right now

AI is the only thing quite that 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. And

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. 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 Seammens and

then sell them back a cell tower into

Germany for 40 cents on the dollar but

they will invite Volkswagen and Dameler

and Seammens into China prop them up

have their R&D facilities there the

production facilities there and make it

incredibly profitable for them to do the

production and their R&D in China such

that when Germany tries to implement

some sort of national economic policy

that that stops China from dumping the

IP theft and then dumping products back

into China, the largest companies in

Germany say uh no, don't do that because

we are now dependent on the economic

arbitrage between China and Germany. And

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 you know uh 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 he'll ban Chinese LLMs. And

to be clear, I think there'll be some

legitimacy around that. I think the

Chinese [music]

are going to try to do to the AI market

what they tried to do to the steel

market here in the 80s and 90s. [music]

>> [music]

>> Support for the show comes from ODU.

[music] There's an endless supply of

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That's odo.com.

How are we feeling? [laughter]

I asked that because

I'm looking at the clock and we need to

make sure that we have time for

questions. Um, so I'm just going to

How's that? You You good with Q&A now?

>> Yeah, I say we go to Q&A. [laughter]

>> Let's do the Q&A. So, we're going to

have an iPad brought out to us uh in a

second. Um, and so the team has been

collecting your questions backstage.

Thank you. Um, and I'm going to

read them out here. So, the first

question is from George Gilbert in seat

F105.

Where's George?

>> George,

>> I I wanted to know if maybe besides the

three stocks that have excess valuation,

besides them, there are a lot of large

technology stocks that are whose

fundamentals are doing very well.

>> Yeah.

much better than the rest of the market.

>> And if we see that continue,

>> you know, that drives a 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 uh comment, I

was working for Frank Quatron in 99 when

you were I was a equity research analyst

on software, but I I didn't remember Red

Velvet. I was telling folks to sell to

sell the ERP cont uh red velvet or red

red envelope.

>> Red envelope. [laughter]

>> Once you hear it a thousand times, you

remember it.

[laughter]

>> Yeah, thanks for that.

Red Velvet, that's a cake, boss.

[laughter]

Not the premier internet-based gift

company.

Um

yeah, look, I I think that so every year

I do a big tech stock pick and um and in

25 my pick was Alphabet because of the

existential threat that supposedly Open

AI 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 Dupon or a PNG or a

Caterpillar with Whimo. 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. The first is just simply put

in medical research. Uh if I were to go

long a sector, it would be

pharmaceuticals and anything related to

GLP1. I think the advances we're finally

going to see the great age of discovery

in pharma that we've been waiting for

for 30 40 years. Autonomous I think is

just incredible. I think it's going to

change everything. I I I hate myself cuz

the people I most root to in the service

industry are drivers. Like why the [ __ ]

are you going this way? Just follow I

mean just follow the look at the phone.

It's not that hard. [laughter] Um

it drives me crazy.

And then but and also and my big tech

getting my big tech stock pick for 26 is

Amazon. There's um

600,000

uh industrialized excuse me 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.

So 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. Um, so I I I

think that if you see a ton of capital

go into these IPOs that they're so

thirsty for and you see a draw down in

the S&P and some of these companies, I

think they'll be really good uh 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 uh because their businesses

are much more diversified. So in some

and sounds like you're in this business.

Um I would personally I would stay the

hell away from AI right now because I

think it's really vulnerable but I think

the traditional guys have built such

incredibly robust diversified companies

that you're just on a riskadjusted basis

going to do really well to them. And I'm

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 I I

personally when I think you look at

valuation I think actually like one of

the best internet analysts in the world

is here Mark Mahaney if if he's around

he might 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 [laughter] those I think some of

those companies will be good buys.

>> The concentration is

incredible though when you 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 of S&P earnings growth this

year. That's the expectation. So it 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 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% draw down in just

those stocks I'm not saying that's going

to happen but it's happened before and

it could happen that'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 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 loss happened in 99. But what

I do know is that it took the S&P 7

years to recover from when you saw that

crash. And 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

all

>> but you also asked just about uh geop or

political ramifications

um I think it's going to be enormous

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 83.

It's at 085 now in America. And income

inequality always gets solved, but it

gets solved through either war, famine,

or revolution. I 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 Alman, anything uh

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 protest around data centers,

everyone's looking for a vessel to

express their 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 as crazy as we went

to the far right. I'm personally

concerned we go as crazy to the far

left. And 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, uh, generally speaking, when the

far left and the far right agree on

something, whether it's anti-semitism or

antivaccines, you know it's [ __ ]

crazy. And I worry that

I worry that because of uh the economic

incentive of pushing people to the

polls, extremism,

uh uh distillation or reductive thinking

to go to A or B, and the inability for

America to have the nuance to 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

uh to the left uh politically.

>> We have a question from Robert Tang in C

L113. I'm being told to read the

question

from here.

Where's Robert?

>> Good to see you, man. Go Nicks.

>> That that doesn't do well here. You

should come to the New York show.

Robert asked, "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, you know, we have this pass

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.

You know, I would argue that the only

competence that's really important is

storytelling and relationships and that

is your ability to articulate your

ideas. Uh, and also your uh 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.

And 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 LLM's

try to guess the seventh word by taking

the average of all the six words in a

similar string. And so it's it's

actually a little bit AI is moderating.

It's pushing everyone or thoughts to the

medium uh 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. That is literally the worst insult I

can give in the company. And so your

ability to form relationships, your

ability to create uh to be creative,

your ability to understand people, your

ability to be super social, because if

if it's just AI recruiters

and and people punching out job

applications and emails via AI, then the

only thing that's going to 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 want to get them uh super into

storytelling. I'm trying to teach I'm

trying to ensure they know how to write

well. Uh stand up in front of people,

communicate well. And 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 uh 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 in

the top 10 people and 70% of the time

the person that ultimately gets hired

had an advocate within the company, had

a friend. So, 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 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.

[applause]

>> Our next question is from Jeff Surface.

>> Oh, and by the way, when I tell my I

tell 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, incarcerated, establish

dominance early. [laughter]

>> Where's Jeff surface?

>> How's it going, guys?

>> Uh, so we I my question was I Scott, you

talk about your your troubles with the

affirmation of others uh frequently on

various podcasts. So, I wanted to get

kind of Ed, 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. [laughter]

>> Exactly.

It's all worth it. Um, 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. I I 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 I feel

really supported. Um, 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 Sario, Dan Shalon, Isabella

Kinsel, Chris O'Donn, like I kind of

want to just shout them out right now.

Um, and there are plenty of other names,

but you know, we're a bunch of kids who

Scott hired and Scott said to us one

day, I want to make a podcast about

markets. And we said, okay. 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, um, look, it's been it's

it's been it's been wild, but ultimately

this is so much fun doing this and

meeting all of you guys, um, 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. Um, I

feel good. I'm handling it. Okay.

[laughter]

Okay. He's seriously the son we all

dream of, right? [laughter]

I don't think I've ever seen you

stressed. I don't I've never registered

you. Or maybe I just don't I just don't

really care. [laughter]

>> You got to hide it. You got to hide it

really well. Never show your boss.

>> I've never seen you stress. [laughter]

>> Uh Avery Saka, I hope I'm pronouncing

that right. Where is Avery?

Hi Avery.

>> I can't I can't exactly hear where

you're coming from.

>> Oh, upstairs. Do we have mics up there?

I I can also read this out because I

actually have it here.

I'm going to assume there are not mics

up there. Avery has a question. He says,

"What's your best advice for a

17-year-old in today's day and age?"

Avery 17, I assume. [laughter]

Well, there's there's a lot there. 17.

Are you 17?

>> Yes, sir.

>> Uh,

>> that's awesome.

>> Yay. 17.

Uh,

be good to your parents, your allies.

You're you're at a point in your life

where you are under the impression you

have this natural hormone coming over

you that makes it easier for you to lo

leave the pack. so you become an [ __ ]

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 Tik Toks 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. Um start quick text 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. Uh also uh the

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 nos 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. If id had lifelike synthetic

porn on my computer 24 by7, I'm not sure

I would have ever taken the risk to

approach strange women on the campus of

UCLA.

You know, I I don't think I would have

if I thought I could trade crypto or 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'm not,

you know, I I want to meet with

somebody." So, if you're not getting a

lot of nos 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

interest or 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 um economically

or romantically. So, be good to your

parents.

um 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

faximile 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. And 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

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, um, when you're older, you're

not going to regret not getting into

that great school. You're not going to

regret, you know, having your heart

broken. You're not going to regret not

getting the job you wanted. What 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 that

people are young people are just so hard

on themselves. Um anyways, but more than

anything get out and just get to as many

nos as possible. That means you're

you're about to get to good good yeses.

[applause]

>> By the way, where are where are you? So

I don't know where 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.

[laughter]

[applause]

I think he's upstairs. [applause]

>> [cheering]

>> That's not Avery. That's Eric. But he's

taking it to Avery.

>> I hope.

>> I'd love to do questions all day. Um,

but we are out of time here. Yes.

>> One more.

>> Oh,

>> and we have one more.

>> We have one more.

>> Yeah.

>> Hey, Scott.

>> Yes.

>> It's Mark Mahaney. Mark here. [laughter]

>> So Mark, I'm gonna I'm gonna ask I want

to ask you a question. Where did I get a

right and wrong on valuations?

>> Not on valuations, but um uh thank you

for coming out, both of you. Thank you

for coming out to San Francisco. I've

read all of your books. I I've given

copies of your books to all of my sons.

Uh the notes on being a man was

phenomenal. So thank you. I think you're

a true gift in what you do.

>> Thank you. Thank you for saying that.

Thank you.

>> [applause]

>> Just so everyone knows, Mark Mahane is

one of the best analysts on Wall Street,

the tech analyst ever call. Like, it's

awesome he's here right now. Sorry.

>> So, [laughter] I I I'm sure you're right

about your comments about these IPOs.

But I think you're wrong and and

[laughter] so and so not on the

valuations. And look at all the the

hugely hyped IPOs that you've 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

Enthropic, you've never seen companies

scale revenue. This is not a this is not

a recommendation of these these things,

but you've never seen companies scale

revenue as quickly as they have, faster

than anybody.

>> And you've seen with Anthropic with

what's been reported recently is that

they're just about to turn operating

profit uh profitable on an operating

income basis. Not funny EBA, 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 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 we

these are unprecedented fundamentals.

That's what I'm most struck by. So agree

with Thank you, Mark.

>> Yeah.

>> Um appreciate that from Marane. It's

awesome. He's here.

[applause] I'd add I think we all agree

that there's a there there but I think

we should also separate out which

companies we're talking about. Anthropic

operating profit this quarter that's

something. SpaceX is a totally different

story here. SpaceX is a company whose AI

business just lost $2.5 billion uh in a

single quarter and their revenue is not

growing actually that fast. So I I'm

totally with you Mark. I would just say

that we should figure out which

companies we're actually talking about.

Anthropic seems to be extremely

impressive right now, but some of these

other companies I I do worry about

OpenAI and we'll see what its financials

actually are once it actually reports

those financials. That's all the time we

have, but before we go, Scott has an

announcement he wants to make.

>> Speaking of character, I want you to

indulge me for a moment. I have a couple

of pictures here.

This is Rich Lions, Chancellor Lions.

So uh I talk a lot about masculinity and

I wrote this book and I tried to distill

it down to three the three stool uh the

three legs of the stool. Masculinary,

protector, procreator and provider. When

you write a book you feel good about it

for about five minutes and then you

start thinking about all the things you

missed. And one of the things I miss

around I think masculinity is just a

basic word and that is service. And a

question I think about a lot as a litmus

test for when I think a lot of people

are born male and never become men. And

one of those tests is do you add surplus

value? Do you create more tax revenue

than you absorb? Do you love more people

than love you? Do you absorb more

complaints than you complain? Do you

occasionally take blows? That's okay. Uh

as opposed to always approaching

everything in a capitalist way that I

want to get more out of this

relationship than I'm giving. But the

other thing I really miss is the word of

service. And I have known Rich for 30

years. He worked at Goldman Sachs, took

an 80% cut in pay to go be in an

administrative position at Berkeley and

is now basically uh see above Berkeley

will graduate more low-income students

than the rest of the Ivy League

combined. And I think we need to your

point

I think we [applause]

uh I think we I think we need to bring

service back into the notion of what it

means to be a high character person.

that it's not just the idolatry of

dollar and I think we just need to make

if you will service cooler again uh

because there's definitely a notion that

service is something you do uh through

money later in life as opposed to

incorporating it into your everyday

life. Um I have one more picture and

this will be the last slide you see.

This is David Oer. He's here tonight. Uh

we talk a lot about [applause]

uh we I talk a lot about if you were to

reverse engineer to when a boy comes off

the tracks and fails as a man there's

actually a single point of failure and

it's when he loses a male role model

through uh death, divorce or

abandonment. Uh when a boy um loses a

male role model at that moment he

becomes more likely to be incarcerated

than graduate from college. What's

interesting is that girls in single

parent households have the same similar

outcomes. Same rates of college

attendance, same rates of self harm. It

ends up that while boys are physically

stronger, they're mentally and

emotionally much weaker than girls. And

I was really blessed with a lot of

wonderful role models. Not as a young

man. My dad wasn't around a lot, but

starting my career, I was 25. I took

David's class. He taught brand strategy

at Berkeley. Uh that's a course I teach

now at NYU. And he then joined a firm I

started profit three years later. And I

mean look at this guy. He's uh

uh a he's very handsome. He's a great

athlete. Married for 65 years. Three

daughters that adore him. Best in the

world at what he does. And I just want

to point him out. The dude's 88. He

looks like an abberient Fitch model.

Where are you, David? [cheering]

>> [applause]

>> stand up.

[applause]

Thanks, David.

Anyways, so this is a long- winded way

of saying uh there is and this will be

my shout out and this will be I promise

the last word I'll wrap up. There's a

waiting list of 30,000

people and it's not for the new Ferrari,

which I think is going to be worse than

the Cyber Truck. It's it's there's

30,000 boys uh who are waiting for Big

Brothers. And Big Brothers of America,

what's interesting is that women sign up

to be big sisters at three times the

velocity as men. Uh men for some reason

just don't conote again service with

masculinity.

And it's it's literally the easiest way

to have a big impact right now. And so

there's a a BB B tripleB SBA Big

Brothers of Big Sisters of San Francisco

is desperate uh for mentors. And if

you're a young man, I know there's so

many impressive men at a place like

this. uh you take care of yourself, you

take care of your family, you take care

of your community, but I do think the

ultimate expression of masculinity is to

get involved in the life of a child that

isn't yours. So, this is just a shout

out if you have some time. You know, we

we're in the we're in the Bay Area. They

figured out a way to build an app to

figure out the emotional state of your

dog using a picture, but we can't find

young men to throw a football around

with a 12y old. So, I'm just just a

quick shout out. If we everyone agrees

we need better men. If we want better

men, we have to be better men. Get

involved in the life of a young man.

Thank you, San Francisco.

This episode was produced by Prop Media.

Thank you for joining us live in San

Francisco. [applause]

If you like what you heard, make sure

you're following us on YouTube, Spotify.

You know the drill. Good night everyone.

[music]