Today's number, 3,000.

That's how many international leaders

are set to attend the World Economic

Forum's annual meeting in Daros this

week. Today's other number is 300.

That's how many sex workers will also be

joining.

Welcome to Frosty Markets. I'm Edson.

That last joke is actually true. Look it

up. It is January 20th. Let's check in

on yesterday's market vitals. US markets

were closed for MLK day. Still, S&P and

NASDAQ futures sank 1% as tensions

flared over Greenland. More on that in a

moment. Meanwhile, the dollar slid,

Bitcoin declined, and gold hit a record

high.

Okay, what else is happening?

President Trump has upped the stakes for

a Greenland acquisition, presenting

Europe with a new tariff ultimatum. Over

the weekend, he announced 10% tariffs on

eight European countries starting

February 1st. According to Trump's Truth

Social Post, the rate will rise to 25%

in June unless there is a deal reached

for what he called quote the complete

and total purchase of Greenland. The

targeted countries are putting up a

united front, warning this could spark

quote a dangerous downward spiral.

French President Emanuel Mcronone is

urging the EU to use its trade bazooka,

more formerly known as the anti-coercion

instrument, which could lock the US out

of European markets. Meanwhile, Danish

officials are skipping the World

Economic Forum in Daros in protest, and

Denmark deployed additional troops to

Greenland on Monday. European stocks had

their worst day in two months yesterday,

and gold and silver hit fresh all-time

highs. another signal that investors are

searching for safety. So, here to

discuss what is at stake with

potentially another trade war between

America and Europe, we are joined by pod

favorite Robert Armstrong, US financial

commentator for the Financial Times and

author of the Unhedged Newsletter. Rob,

welcome back to Profy Markets. Good to

see you.

>> At the end of a very strange weekend,

>> a very strange weekend indeed. We want

to jump right into it.

>> So, we've got 10% going up to 25%

tariffs on eight European countries that

have expressed solidarity with

Greenland.

>> So, we got Denmark, Norway, Sweden,

France, Germany, the UK, the

Netherlands, and Finland. Um, let's just

start with your initial reactions, Rob.

>> Uh, first reaction, is it going to

actually happen? As far as I know, the

the threatened tariffs on any country

that trades with uh Iran have not

happened. We had a tweet from the

president that was happening. It then

just drifted to wherever presidential

tweets go when they're not with us. So,

uh

so you know, I mean I

>> the rhetoric is pretty strong. There was

the bizarre text to the leader of

Norway. It seems pretty serious and

markets are reacting.

But the hard first question you always

have to ask is, is this a case of real

strategic boldness, Allah, Venezuela, or

is this a bunch of talk uh like so many

other uh adventures or near adventures

have been in Trump's world of trade?

It's very hard to tell at the outset.

>> Yes, exactly. And it's exactly what we

saw last year with Europe where he

threatened 30% and then he went down and

then he made all of these exemptions. It

seems to me I mean again I always like

to remind people

taco was a term that was created by

>> Robert Armstrong who is with us right

now. I'm someone who generally lands in

the taco camp and this is another case

of that for me. For me, I see this. It's

a it's a social media post. He just puts

it out there. My instinct is taco. What

is interesting is we're in this dynamic

where we're seeing that that markets in

Europe are selling off.

>> Yes.

>> But also, it's MLK day. So, the US

markets are closed. So, we don't know

what the markets are going to react like

tomorrow.

>> Okay. Let me let me frame this in a let

me steal a way of framing this from

someone else. Uh Ian Bremer, who's one

of these people who sort of talks about

geopolitical risk for a living. I think

his company's called Eurasia Group.

Anyway, he had this short video that I

think sums this up really well. He he he

talked about the contrast between taco

and fafo. Taco being Trump always

chickens out and fafo being [ __ ] around

and find out. and some countries get the

taco treatment and some countries get

the fafo treatment. And his point was

that the weak get fafo and the strong

get taco. In other words, countries that

put up a little bit of resistance,

Brazil, uh, China, Russia to a degree,

actually taco is the most common

outcome. If countries show weakness or

are too weak to protect themselves like

Venezuela,

they see bold Trump, they see fafo

Trump. So we might ask at this point,

is Europe going to be strong in

response, in which case we might expect

Taco and the situation to stabilize and

cool off, or do they get into a

characteristically European mode of

tripping over their own feet and their

own internal political squables come

with a weak and divided response, in

which case they get Bafo, right? The

hard side of Trump. So, I'm not sure

that's true, but I think it's a kind of

intriguing way to think about it, right?

And I would bet that you are right that

this is a situation where Trump will be

prepared to back off, but only if

Europe shows willingness to up the ante.

>> Yes. And by the way, it seems that they

do.

>> Yes. or at least

>> I mean that's what we're hearing with

this talk of a trade bazooka which I've

never heard of.

>> Um this is what Emanuel Mcronone has

been suggesting that they use the

anti-coercion instrument. They call it

the trade bazooka. I love that.

>> Yeah, I love that anti-coion instrument.

It's like an a special axe they keep in

a box in Paris or something.

>> From my understanding, it's basically

just some export controls.

>> Yeah. Um I'm not sure exactly

what makes it a bazooka versus any other

uh trade weapon.

>> Well, it I mean it just means uh Europe

is committed to a lot of global

principles

of kind of fair and reciprocal trading

with its trade partners. And I think

basically what the anti-co does is

release them from those commitments. So

they are it basically says if it's a

situation where you've been nasty to us

and we can be nasty right back.

>> Yeah. Even if it is a taco I I I think

it probably is.

It does seem that there is a vibe change

that has occurred and that is the post

and the statement itself is just

offensive.

>> Yes.

>> To Europe. So, you know, that's why

Mcronone is reacting the way he has and

you've seen people like Karma speaking

out and basically any EU leader is

coming out and saying, "Hey, this is

unacceptable. You cannot you cannot do

this. You cannot threaten to just take

over the land of one of our allies."

>> Given how offended everyone is,

>> do you think that that offense could

lead to something more substantial like

a trade war? Or do you think this goes

the way it historically has done which

is they kind of fight a little bit and

then ultimately they kind of kiss and

make up?

>> God, you're asking to me to make a

political prediction here. Uh you

haven't lost a lot of money historically

betting against Europe's ability to put

up a unified front.

>> Uh there's, you know, they have a very

consensus driven system where a small

number of defectors can prevent unified

action. It makes it that really they

really have to be pushed up to the edge.

But I think that this this does feel

different.

And I think it not only feels different

in the way you talked about it being

offensive, the president of the United

States feels more and more erratic,

right? Not, you know, the the the

constant uh provocations, the tone out

of the White House has changed, the tone

of the spokespeople have changed. Uh, so

you know, I don't know what pushes

Europe far enough to get them to

unification, but we're moving in that

direction. We're getting closer, but I

don't know where the magic moment is,

I'm afraid. All right, Robert Armstrong,

US financial commentator and Financial

Times, author of the Unhedged

newsletter, also the Unhedged podcast,

which you should check out. Rob,

appreciate your time.

>> Glad to be here. We'll be right back.

And if you're enjoying the show so far,

be sure to like and subscribe to the

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Ads are finally coming to Chat GPT.

OpenAI announced it will start testing

ads on US adult users with free accounts

in the coming weeks. The company insists

it will not sell data to advertisers and

that users can turn off ad

personalization. It is a stunning

reversal from Alman's stance just 2

years ago when he called ads a quote

last resort. Well, it looks like that

last resort is here. OpenAI is seeking

new revenue streams to help fund its

massive AI buildout, including a

reported $1.4 trillion commitment to

infrastructure over the coming years. To

discuss why OpenAI is finally embracing

ads and what this says about the AI

business, we are speaking with Alex

Canowitz, founder of the Big Technology

Newsletter and podcast. Alex, you are

joining us from Davos. How is it? Yeah,

Davos is very weird this year because uh

for a number of reasons. First of all,

we're in Europe at a moment where

President Trump is threatening to take

over Greenland. So obviously some

awkwardness there as he's about to hit

the WF summit. U but also we're in this

moment where companies for a long time

used this conference as a place to talk

about their altruism and over the past

couple years we've definitely seen much

more of a shift towards the naked

interest in the bottom line. So they've

tried to worm their way back into that

social good messaging mostly by talking

about how AI will get us there. There

are 48 sessions at the WEF about

artificial intelligence where people are

going to talk about it being able to

cure cancer and empower the

disempowered. We'll see if the message

gets across.

>> You seem skeptical.

Is that right?

>> I will I will wait and see. I'll wait

and see.

>> Wait and see. I think that's fair

enough. Well, we want to get into this

move from OpenAI. They are now putting

ads on ChatGpt.

I think last time we spoke, Alex, you

and I were kind of having a debate over

whether they should be doing this. I was

on the, and correct me if I'm wrong

about this, I remember being on the pro-

advertising side. I felt they need to

monetize and get this over with. I

remember I think you were on the other

end of that. What do you make of this

this move? they are now selling ads.

>> Uh that sounds right. Look, I think that

when you think about the most skeptical

perspective of this, which I've seen

come across the social feeds in reaction

to it, uh some have said, "Hey, listen,

you're using AI, you're about to, you

know, if you really believe that you're

close to artificial general intelligence

and disrupting, you know, the way that

we work and these big breakthroughs, uh

then why are you resorting to the sort

of crudest possible uh form of business

on the internet, which is advertising?

Is that an indication that you don't

really believe in uh what you've been

telling us uh this this time? Clearly, I

think there's a couple things that are

that are happening here. First of all,

it's the imperative for growth. The ad

tier is going to give people more access

to OpenAI's uh model. So, you'll be able

to chat a little bit more. And I think

there's a hope that that will bring more

people in. Uh it seems to me there was

an interest in getting towards a billion

weekly active users uh by the end of the

year. I've heard some rumblings of that.

They fell short. They're at 800 million

now. And especially as we gear up

towards an IPO potentially. I think that

will happen next year. They're going to

really want to continue to show that

growth. So, uh, for me, it is a, you

know, I I think I'm coming around. It's

a necessary evil for this company. It'll

be a good business. Uh, but the the

drawback is one thing goes wrong and all

of a sudden you have a very big scandal.

And I think that's something worth

paying attention to. What are the kinds

of things that could go wrong here? What

could lead to that that blow up or a

scandal?

>> Well, there's no product that knows you

better than a chatbot, especially if you

spend time with a chatbot. And one of

the things that OpenAI in particular has

been working on has been making these

bots remember us better. Memory is going

to be a big initiative for OpenAI in

2026. So, the bot will be able to recall

conversations that you've had years

previously. And there's a tremendous

amount of trust that goes into

interacting with a product that

remembers you that way and becomes in

many people's cases a companion. Uh that

doesn't necessarily mean romantic uh but

people have developed friendship

feelings towards it or even uh some sort

of bond with the bot that you you

believe it has your best interests at

heart. The second this thing starts

pitching things that get a little too

close to home based off of the data that

it has about you, uh it could get bad.

And remember, it only takes one really

bad or a few really bad stories for

people to get the ick about a company

that does advertising. Most of

Facebook's advertising is like app

install ads for games. But a couple of

ads that get a little too close to home,

everybody says Facebook's listening to

us. And that's the worry for OpenAI.

>> Yeah. Alman previously said that ads

combined with AI are quote uniquely

unsettling. He also described that

combination as a quote last resort. So

it does appear that OpenAI is reaching

its last resort. It seems like that

might be what this is. Something I'd

like to theorize about is what would

happen if OpenAI were a public company.

We don't know because it's private

company. We can't look at the stock

price. But what what direction would the

stock be moving in? I'd love to just get

your views on this. If if OpenI were a

publicly traded stock, do you think it

would be up or down following this?

>> Oh, it would shoot up. And I know I'm

talking both sides of this because I

really am wrestling with it. It's

complicated. Uh but the market would

react very positively to OpenAI

introducing ads. Ads are an extremely

high margin business. uh famously on the

internet you only need a couple of sales

people or you can even automate the

sales process and then those ads can

extend across large audiences and you

can make a lot of money. Google has done

a great job with this. Facebook has done

a great job with this. Even Amazon uh I

think it's one of the least heralded

stories of you know at least with the

big tech business. Uh Amazon has done

amazingly with with advertising. Uh and

it's become one of the biggest uh

highest margin businesses within that

company. So I think if the market saw,

oh, you you have your subscription

business and now you're introducing this

high margin ad business. We've seen it

before in places like Netflix, which has

made a a very similar move and it's

working out well, very well for them. Uh

so I think that stock would go right up.

>> Something else you said there which I

think is fascinating and also very true

is this idea of getting the ick with

open AI. Um which I think is an

underrated element in the AI race. If if

people decide that they have the ick on

any given chatbot, that will decide the

trajectory of this economy. And it does

seem in the past few months or so that

people are beginning to get the ick on

Open AI. They're kind of getting icked

out by Sam Alman and his and his media

appearances. And I wonder if ads add to

that dynamic. I I think back to, you

know, that great scene in the social

network where Justin Timberlake is

talking with Jesse Eisenberg, Mark

Zuckerberg, and they're talking about

ads, and he's like, you can't run ads

because ads aren't cool. And I think

about this with this, too. I mean, to

me, I think they kind of need to do it

because they need to monetize. They need

to show that to investors, but at the

same time, ads aren't cool. And if

you're getting ads in your chatbot, is

that something that immediately gives

you the ick and causes you to resort to

other products? What do you think of

that possibility?

>> Yeah. Well, I would say first of all,

the user numbers do suggest that people

still really like OpenAI. They like the

um the products. They like chatting with

OpenAI. They've enjoyed while Sora uh

for one is a company that they trusted

with their own faces pretty much to make

AI videos of themselves. Uh so there's

still a lot of trust in OpenAI and I

think that's a very very valuable thing

that the company has. It has been the

company that's pioneered this. People

have given it a lot of trust, a lot of

information, their data and they've seen

results from it. And so that that to me

again is is the risk here is when you do

advertising if you don't do it

tastefully basically 100% of the time

you do risk having people feel, oh, I

don't know if it feels so good to use

this product anymore. Maybe I'll try the

others. And as these bots, as the

context windows get bigger in these

bots, sometimes you can just ask, I

mean, imagine if you want to switch

bots, you ask OpenAI, hey, print me out

a summary of our interactions. Tell me

what you know about me. Copy and paste

it, put it into Gemini. Now all of a

sudden, Gemini has picked up all those

preferences. It won't be that difficult

to switch. And so they have to be very

careful when they roll this out that,

you know, they do it in the right way. I

the what I've seen so far, I like, but

again, it only takes a couple of bad

attempts. and then you're you're really

in in a bad place

>> when we look at some of the other chat

bots. So, um Claude, which is Anthropics

chat product, which has gotten a lot of

press recently because of Claude

Co-work, which they recently announced,

which went viral and everyone was

talking about it and it seems really

impressive. Gemini has also been getting

increasingly popular, increasingly

making headlines. We're seeing a lot

more usage just going into 2026.

Who do you think is gonna win the AI

race this year? I've said I think maybe

Anthropic's going to pull ahead, but you

know, as you say, everyone's still using

Chat GBT. It's still the most popular.

Um, if you had to place a bet on any one

of these AI companies and AI products,

who do you think is winning in 26?

>> Well, I would say that there's multiple

different races going on at the same

time. So, you have OpenAI running the

consumer race. You have Anthropic

running the enterprise race. they could

both win and be very big companies in

their own respect in two different

categories. Uh and then you have Google

which maybe is a blend. Uh maybe they

can use AI for enterprise. Uh they can

use AI in their existing products and uh

and continue to build off of that. Uh

but I'm not going to run away from the

question. I think it's a it's a fair

question. My money's still on OpenAI. I

I still think Open AAI is going to win

this thing uh when all is said and done.

>> All right. Alex Caneris, founder of the

Big Technology Newsletter and podcast,

joining us from Daros. And it's late

there, so we really appreciate your

time. Thank you for joining us and enjoy

the rest of the conference.

>> Thank you so much, Ed.

>> We'll be right back. And if you're

enjoying the show so far, be sure to

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channel at the link below.

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One last tech story before we close.

Last week, an AI company called ASML

became the third European company in

history to reach a market cap of half a

trillion dollar. For context, ASML is

technically a lithography company, but

we call it an AI company because they

make the lithography machines that are

used to make AI chips. So, it's

basically an AI company. Now, why did

the stock surge? Well, it was actually

because of the earnings of another AI

company, and that company was TSMC. As

you may know, TSMC is the Taiwanese chip

maker. Last week, they announced they

will be spending $56 billion on chip

manufacturing. And the reason that is

important for ASML is because TSMC is

ASML's largest customer. So, that means

a big chunk of that $56 billion will be

landing on ASML's income statement.

That's why ASML shares rose 7%. That's

why the stock hit a record high. Now,

why are we highlighting this? Well,

because, as you might remember, ASML was

one of our stock picks last year. Back

in July, we said on this program that

ASML was a buy. And the reason we were

so bullish was because one, the company

was just perfectly positioned for the AI

boom. And two, it was receiving a

multiple it didn't deserve, largely

because of its own concerns about

geopolitical conditions and tariffs.

concerns that, by the way, were not

reflected across the rest of the market.

It was a slightly complicated thesis. I

won't go into the full details, but if

you want them, go check out our episode

from July 17th. The central idea,

however, was the following. ASML had

this habit of underpromising and overd

delivering, and it seemed to us that

investors hadn't quite figured that out.

Now, here comes the brag. We recommended

this stock at $750 per share. As of

today, it is trading at $1,359

per share. In other words, the stock has

risen more than 80%. That means that

ASML has generated five times more

returns than the S&P over the past 6

months. And I have to say, aside from

Google, this might be one of our best

calls last year. Now, at this point, the

company is fairly valued. It isn't

really the buying opportunity. It was at

least in our view. We consider this a

hold, not a buy. Therefore, I don't

really have investment advice here. The

reason we bring it up is entirely

selfish and that is we wanted to take a

victory lap. So, there you have it.

Historic run for ASML. Congrats to those

of you who did buy back in July. And if

you did, let us know in the comments.

We'd love to hear from you. Thanks for

listening to Property Markets from

Property Media. If you liked what you

heard, subscribe to our YouTube channel

and tune in tomorrow for more.