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Prof G Markets is your daily briefing on the news moving markets — from earnings and geopolitics, to Big Tech and AI. Hosted by Scott Galloway and Ed Elson, we cut through the noise with no-BS analysis. Tune in to understand what's happening, why it matters, and how to stay ahead. Fast takes. Clear insights. No jargon — just signal. Have a question or comment for us? Reach out to markets@profgmedia.com. Part of the Vox Media Podcast Network.
Katie Martin explains that the bond market is starting to "revolt" against governments borrowing excessively, leading to demands for higher returns from investors. The US national debt has surpassed $40 trillion, with some countries now spending more on debt servicing than defense.
Treasury Secretary Scott Besson's attempt to lower long-term borrowing costs through Treasury bond buybacks was unsuccessful, drawing criticism from Wall Street investors. The 30-year Treasury yield recently hit its highest point since before the financial crisis.
Government bond yields in Japan, the UK, Germany, and France have reached multi-decade highs, indicating a global trend of investor dissatisfaction. The US 10-year yield topped 4.8%, and the 30-year yield is back above 5.25%.
A disconnect exists between the US public's desire for continued spending and the Federal Reserve's need to raise rates. This divergence is highlighted as a key factor influencing market sentiment.
The divergent behavior between equity and bond markets is attributed to differing investor mindsets. Bond investors focus on minimizing risk and potential losses, while stock investors are more focused on upside potential.
The discussion highlights a global trend of "profligate spending" and "debt-fueled spending orgy" across major economies, which is a primary driver of inflation. This strategy is seen as a way to maintain public satisfaction with "cheap calories and Netflix" while transferring wealth upwards.
OpenAI has released its latest model, GPT-6, codenamed 'Astra', trained on over 100,000 Nvidia GPUs. Nvidia CEO Jensen Huang stated that Artificial General Intelligence (AGI) has now arrived, while OpenAI's president, Greg Brockman, called Astra a 'generational leap' and announced the beginning of the 'AGI era'.
AI scientist Gary Marcus expressed skepticism regarding claims that OpenAI's new model, Astra, represents Artificial General Intelligence (AGI). He described the situation as an 'AGI bait and switch,' arguing that the definition of AGI has been consistently lowered and that current models do not live up to historical predictions.
The definition of Artificial General Intelligence (AGI) has evolved, according to discussions on the podcast. Historically, AGI was understood as the ability to perform any cognitive task a human can. More recently, economic implications are being emphasized, with some suggesting AGI could be defined by performing 80% of economically valuable human work.
Gary Marcus pointed out that current AI models, while excelling on benchmarks, often falter in real-world applications. He noted that the hype surrounding new models frequently leads to disappointment when users find they don't perform as expected in practical scenarios.
Past predictions about the impact of AGI included drastic economic shifts, such as human wages plummeting to zero. Prominent figures like Sam Altman and Stuart Russell have previously stated that AGI could 'break capitalism' or lead to a complete devaluation of human labor.
Jim Van Der Hey, co-founder and CEO of Axios, discusses the significant impact of technological shifts, like the rise of the internet and AI, on the media industry. He reflects on the founding of Politico in 2007 and how it capitalized on these changes, becoming a rapid success.
Jim Van Der Hey notes that AI is currently forcing a significant transformation within the news industry, impacting how people discover and consume information. News organizations are actively working to integrate AI without compromising journalistic trust.
Jim Van Der Hey recounts that Politico's launch in early 2007 coincided with major technological advancements such as the release of the iPhone and the rise of platforms like Facebook and Twitter. He credits these shifts for contributing to Politico's rapid growth.
Jim Van Der Hey states that Axios learned how to run a business and proved the viability of the digital model for media. He notes that many successful publications in the last decade have adopted a similar model, with many of their staff having previously worked for him.
Global bond markets are experiencing their worst performance in years, with yields hitting multi-year highs across Japan, Germany, France, the UK, and the US. This sell-off is attributed to a confluence of factors including rising energy prices, inflation, unsustainable government debt, hawkish central bank sentiment, and significant debt issuance for AI infrastructure.
Dell Technologies experienced a significant boost in its stock price, soaring 16% after reporting record revenue. This impressive financial performance was primarily driven by strong demand for AI servers.
John Meury, Chief Investment Officer at NFJ Investment Group, suggests that inflation is becoming a part of the 'new normal' due to a fundamental regime shift in investor priorities, moving from seeking the cheapest options to prioritizing safety. This shift is impacting supply chains and overall economic conditions.
The conflict in Iran is identified as a key contributor to elevated inflation, particularly through its impact on energy prices. However, an investment expert also highlights the reordering of global supply chains, away from relying on China for cheap exports, as another significant factor driving up inflation.
An investment expert suggests that Federal Reserve rate hikes may not effectively address current inflation, as the problem is rooted in supply-side issues like geopolitical conflicts and supply chain disruptions. He argues that raising rates is unlikely to fix these underlying causes.
An investment professional asserts that the previous era of negative interest rates for bonds was an anomaly, describing it as akin to paying 200 times cash flow for a 10-year bond. He believes current yields are normalizing to historical levels after inflation 'woke up' the market.
The effectiveness of Treasury buyback strategies to lower borrowing costs in America is questioned, with one expert noting that such actions could involve exchanging lower-interest debt for higher-interest debt. This is seen as a form of active management by the Treasury.
Inflation serves as a key mechanism for countries to manage their debt, according to an investment expert. By inflating the currency, nations can repay their debts with less valuable dollars, effectively acting as a tax on the global population and a form of deleveraging.
Scott Galloway shared his perspective on his viral statement about money and happiness, stating that he hasn't been on Twitter in four years and advises others to avoid it for their mental health. He believes that not discussing money perpetuates inequality.
Scott Galloway disclosed his substantial monthly expenses, stating he spends between $300,000 and $400,000 per month. He believes this level of spending necessitates a personal net worth of $125 million for economic security.
The hosts announced a shift towards a more personal episode, focusing on listeners' relationships with money and the question of "will it ever be enough?" This approach is described as a 'money therapy episode.'
The episode shared a statistic that 47% of sports fans would find a way to attend a championship event for their favorite team, no matter the cost. This statistic was presented as 'today's number.'
Economist Gabriel Zucman states that wealth inequality in the US is now three times worse than during the Gilded Age, with billionaires holding wealth equivalent to 30% of US GDP, and even higher in California at 50% of GDP. He attributes this surge in extreme wealth to changes in taxation since the 1980s, including the reduction of top marginal income tax rates.
Gabriel Zucman highlighted the significant shift in US tax policy starting in the 1980s, pointing to the reduction of the top marginal income tax rate from 70% in 1981 to 28% in 1986 under President Reagan. He argues this dramatic decrease was a major driver behind the rise in income and wealth concentration, particularly in the US.
Gabriel Zucman argues that beyond tax rate changes, the explosion of tax avoidance and the rise of tax havens are significant factors driving inequality. He clarifies that tax avoidance, while legal, often goes against the spirit of the law, and that tax havens facilitate this by offering incentives to multinationals and wealthy families.
Economist Gabriel Zucman describes the global competition among countries to attract profits and wealthy individuals as a 'negative sum' game. He explains that this race to the bottom on tax rates and incentives, while seeming like a way to attract business, primarily benefits multinational corporations and rich individuals at the expense of overall economic fairness and growth.
Gabriel Zucman emphasizes that tax avoidance and evasion are not inevitable but rather a result of policy choices. He contrasts periods where governments promoted tax compliance, like under FDR, with more recent times where policymakers have implicitly or explicitly encouraged tax avoidance. This shift has fueled a large tax planning industry and the proliferation of tax havens.
Elon Musk informed SpaceX employees that the company's AI revenue is projected to exceed all other revenue streams by next month. This statement was made during a company all-hands meeting, a recording of which was shared on X.
The CME Group will introduce futures contracts for AI computing power starting in October, treating compute as a standardized, tradable commodity. Each contract will represent one month's rental of an Nvidia chip.
There is ongoing debate about classifying AI compute as a commodity, similar to oil or gold, with a key issue being its fungibility. Rohan Goswami from Semaphore notes that the market for compute is heavily influenced by Nvidia's pricing decisions.
Core Weave experienced a significant 19% rally in its share price following the announcement of doubled second-quarter revenue. This strong financial performance drove the stock's substantial increase.
Nvidia has unveiled a significant financing effort to support the AI build-out, aiming to secure $500 billion through memorandums of understanding with six major asset managers. This capital will be lent to Nvidia's customers to fund data center expansion and chip purchases. Nvidia CEO Jensen Huang described AI chips as an investable asset class, while BlackRock CEO Larry Fink hailed the project as a new era of financial engineering.
Jay Goldberg, an analyst at Seaport Global Securities, expressed uncertainty about the specifics of Nvidia's $500 billion financing arrangement, noting that the agreements are not yet finalized and past MOUs have shifted significantly. He raised concerns about potential circular financing, where Nvidia provides funds to customers to buy its own products, which makes some investors uncomfortable.
In response to concerns about circular financing, Nvidia CEO Jensen Huang stated that their initiative is designed to address this by bringing independent institutional capital into the AI infrastructure market. Analyst Jay Goldberg, however, remains skeptical, suggesting Nvidia might be creating demand that wouldn't otherwise exist if AI is viewed as a bubble, and that the company is likely backstopping some portion of the $500 billion to provide lender comfort.
Nvidia CEO Jensen Huang declared that AI chips have become an investable asset class, a significant conceptual shift for the industry. He explained that these systems are revenue-generating, productive, long-lived, fungible, and flexible, differentiating them from traditional PCs or phones.
The analyst explains Nvidia's historical involvement in financing its customers, starting with working capital terms for early-stage cloud providers like CoreWeave. As the demand and scale grew, Nvidia began providing backstops and guarantees for compute service agreements, which currently total $30 billion.
Jay Goldberg explains that lenders are hesitant to accept GPUs as sufficient collateral for financing AI compute infrastructure, often requiring collateral backed by customer agreements like those from Microsoft. Nvidia's role has evolved to provide additional guarantees, essentially trying to convince investors that GPUs are a viable collateral asset.
The podcast discusses the evolving landscape of AI, particularly generative text and AI in art. One speaker believes AI will primarily serve as a tool for artists, similar to how photography impacted painting, pushing creativity rather than replacing artists entirely due to the lack of human intention and lived experience in AI.
A new podcast is being launched with the primary goal of demystifying AI and making it more accessible to a general audience. The podcast will explore the intersection of AI and creativity, as well as delve into the ethical considerations and societal impact of artificial intelligence.
One of the podcast participants is actively working on a project that utilizes AI for music generation. The process involves teaching the AI to understand complex concepts like musical theory and composition.
The rapid advancement of AI is seen as an exciting and innovative 'Wild West' period with immense potential. However, there's a strong emphasis on the need for education regarding AI's capabilities, limitations, and ethical considerations to ensure responsible development and use.
Investor Michael Burry believes the market may be approaching a major top, potentially seeing a "1987 type fall." He continues to hold short positions against companies like Nvidia, Micron, Tesla, and Palantir, as well as the semiconductor index.
Steve Eisman discusses the capital-intensive nature of the AI business, noting that companies like Microsoft, Google, and Amazon are experiencing negative cash flow due to massive investments. He points to the lack of clear moats in LLM AI and the emergence of cheaper Chinese models as potential risks.
Steve Eisman states that the US economy is currently very strong, with benign credit statistics reported by banks in July. He highlights robust payment volumes from companies like Visa and Mastercard, indicating overall economic health.
Google experienced a nearly 4% drop in its share price following news of changes in its AI division. The chief scientist of DeepMind is leaving, and its CEO, Demis Hassabis, is stepping aside.
Apple is suing OpenAI, alleging trade secret theft for AI hardware development. Apple requested a preliminary injunction and to fast-track the case, citing an "imminent threat." OpenAI responded by calling the lawsuit "careless, aggressive, and oddly personal," and accused Apple's lawyers of a mistaken email involving an employee with a similar surname.
The legal battle between Apple and OpenAI has intensified, with Apple seeking to halt OpenAI's operations and derail its upcoming hardware launch. OpenAI's response, including a jab at Apple's legal team for a mistaken email, suggests a highly personal and contentious dispute, according to analyst Alex Heath. Heath notes that OpenAI's defense lacks a strong rebuttal on the merits of the case, focusing instead on the personal nature of the lawsuit.
Despite the ongoing legal battle with Apple, OpenAI is reportedly on track to unveil its first hardware device later this year. The device is described as an AI speaker, similar to Amazon's Alexa or Apple's HomePod, designed to be a personal AI assistant. OpenAI is also planning a family of related devices, potentially including earbuds and wearable technology, though not a phone.
Apple's lawsuit against OpenAI may be aimed at disrupting the latter's entry into the hardware market, according to Scott Galloway. Galloway suggests that Apple might view the legal fees as a worthwhile cost to introduce "chaos" into a competitive moment for OpenAI's new product launches.
A 24-year-old named Leo's AI-focused fund, "Situational Awareness," experienced a dramatic collapse, losing approximately $35 billion in assets and plunging from $45 billion to $10 billion. This event is being viewed as a cautionary tale for the highly leveraged AI boom.
Michael Green, chief strategist at Simplify Asset Management, discusses the catastrophic losses that can occur from excessive leverage in AI investments, likening it to a "wounded shark" attracting predators. He highlights how a small price decline can trigger a cascade of forced selling due to high leverage.
Michael Green explains how leveraged ETFs, similar to Leo's fund, contribute to volatility in sectors like semiconductors due to daily rebalancing and the "volatility drag" phenomenon. He notes that retail investors are often drawn to these products seeking quick gains, leading to potential catastrophic losses.
The Korean stock market (KOSPI) saw a 44% crash from its June highs, with over a million people facing margin calls and hundreds of thousands having their accounts liquidated. This has led to widespread protests and calls to abolish leveraged ETFs, highlighting the dangers of these investment vehicles.
Michael Green criticizes US regulators for allowing risky financial products, comparing the situation to not labeling addictive drugs or food ingredients, which was a lesson learned from a "buyer beware" era. He argues that "market fundamentalism" and a lack of education contribute to retail investors being drawn to speculative vehicles.
Michael Green suggests that regulators have abandoned their roles, leading to "half-baked spaghetti" financial products that attract investors. He dismisses conspiracy theories, stating that incompetence is often the reason for market failures, creating a gambling environment rather than thoughtful investment vehicles.
The South Korean stock market experienced significant volatility, with the Kospi index falling 22% and then rising 15% in a single week. This instability is largely attributed to the recent introduction of single-stock leveraged ETFs, which multiply the daily returns of chipmakers like Samsung and SK Hynix.
The recent surge in AI stocks appears to be unwinding, causing significant losses across the semiconductor sector. Companies like Micron, AMD, and TSMC have collectively lost approximately $1 trillion in market value in the past week, not due to poor earnings, but a general cooling of AI-related market euphoria.
A recent statistic reveals that 21.4 million Americans used marijuana daily in 2025, surpassing alcohol usage at 17.2 million daily users. The data suggests a significant shift in substance consumption patterns among Americans.
One of the podcast hosts shared personal reflections on their own substance use, noting a decrease in drinking due to age and the desire to reduce hangovers. They also mentioned using edibles occasionally for sleep, specifically a pear-flavored 'Wild Times' brand from Aspen.
The discussion touched upon the importance of enjoying one's twenties, referencing an interview with Jack Raines. The sentiment expressed is that young people should balance responsibility with fun during that decade of life.
Brian Shiff, co-founder and CEO of Anduril, discusses how his company is challenging legacy defense contractors with a software-first approach. He explains that Anduril aims to bring the best of Silicon Valley technology to the Pentagon, emphasizing a focus on rapid iteration and problem-solving in the defense industry. Shiff also touches on the company's origins and its mission to provide advanced capabilities to soldiers.
Anduril CEO Brian Shiff notes a correlation between global instability and the company's financial performance, with revenues nearly doubling year-over-year. He states the company generated $2.2 billion in revenue last year and is targeting $4.3 billion this year. Shiff attributes this growth to technological shifts and the proliferation of advanced military capabilities worldwide.
Brian Shiff addresses concerns about Silicon Valley's 'move-fast-and-break-things' mentality being applied to defense, emphasizing that Anduril prioritizes quality of thought and rigorous engineering for hardware and safety-critical systems. He highlights that rapid engineering is achievable with foresight and a robust testing process, aiming for delivery on time and on budget.
Brian Shiff details Anduril's expansion into autonomous platforms, including a codevelopment program for an autonomous submarine with the Royal Australian Navy and winning a contract for a loyal wingman fighter jet against major defense contractors. The company has also developed counter-drone technologies, including jamming systems and surface-to-air missiles, to address threats from quadcopters and Iranian drones.
Brian Shiff explains Anduril's lattice software, designed to network thousands of battlefield systems, including sensors, drones, and soldiers, leveraging AI and machine learning at the edge. This integration aims to create a more distributed and complex battlefield awareness. Shiff emphasizes the importance of execution and delivery in the defense sector, noting Anduril's track record.
Brian Shiff highlights Anduril's significant deployment in border security, covering two-thirds of the southern border. He explains that their technology, utilizing computer vision and sensor fusion, provides border patrol officers with enhanced awareness of their surroundings by distinguishing between people, animals, and vehicles.
Short seller Jim Chanos compares the current market to the dot-com bubble, stating that the market is very expensive and comparable to 1999-2000 levels. He expresses concern over the unprecedented capital expenditure boom, particularly in AI, likening it to past build-outs that ended poorly.
Jim Chanos highlighted concerns regarding the current capital expenditure boom, especially in relation to AI, drawing parallels to the dot-com and railroad build-outs which resulted in significant investor losses. He noted that the spending is now more concentrated among hyperscalers and AI companies, increasing risk.
Jim Chanos explained that the current surge in S&P profits is partly due to an accounting identity problem related to AI capital expenditures. He pointed out that while companies spending on AI capitalize and depreciate these costs over years, the companies receiving the revenue book it immediately, creating a profits mismatch.
Jim Chanos drew parallels between current AI capital spending and the dot-com era, noting that in the late 90s, spending was by profitable telecom companies. He contrasted this with the current AI spending, which is more concentrated among hyperscalers and AI companies, leading to greater risk.
Jim Chanos questioned the ultimate productivity gains and profitability enhancements AI will bring, suggesting that much of the current investment might be front-loaded. He referenced the internet's impact, noting that aggregate economic statistics showed little change in GDP growth or S&P profits in the decade before and after Netscape.
Jim Chanos expressed skepticism about the AI market, pointing to circular financing, an explosion in AI debt, and debt being moved off hyperscaler balance sheets into SPVs as significant concerns. He believes the current euphoria around AI might be an overestimation.
Showing the latest 15 of 29 covered episodes.