Odd Lots Podcast Summary: Henry Blodget on AI, Dot-Coms, and What's Changed In 25 Years Bloomberg's Odd Lots with Hosts Joe Weisenthal and Tracy Alloway
Release Date: May 5, 2025

Introduction

In this compelling episode of Odd Lots, hosts Joe Weisenthal and Tracy Alloway welcome Henry Blodget, a renowned figure in the financial world, to discuss the parallels between the AI boom and the late 1990s dot-com bubble. Blodget, now the editor of the innovative publication Regenerator, shares his insights on market dynamics, investment strategies, and the evolving landscape of technology and media.

AI vs. The Dot-Com Era

Parallels and Differences Blodget draws direct comparisons between the current AI frenzy and the late 90s internet boom. He highlights the surge of investment capital attracted to AI, reminiscent of the mid-90s internet enthusiasm.

[06:34] Henry Blodgett: "That is very reminiscent of what happened in the late 90s, where in the mid-90s the Internet came along... The same thing is happening within the AI sector."

Valuation Concerns Blodget emphasizes that while top tech stocks like Nvidia are trading at high earnings multiples (30-35x), the real surge is happening privately. He cautions against the astronomical valuations of AI startups, many of which lack transparency.

[07:40] Henry Blodgett: "Just to check, they are doing something like $12 billion of revenue this year... if you believe that OpenAI is going to win this next wave... then it's probably the justification."

Investment Strategies and Market Dynamics

Preferred vs. Common Stock Blodget explains the distinction between preferred and common stock in the context of AI investments, noting that professional investors often have downside protections that retail investors lack.

[07:40] Henry Blodgett: "Most professional investors are investing in preferred stock... it's very hard to really know what's going on."

Historical Lessons from Dot-Coms Reflecting on the dot-com crash, Blodget advises diversification and long-term holding strategies, using his own investments in Amazon as a testament to weathering market storms.

[19:05] Henry Blodgett: "If you are going to, I think, think that's sound, and I would even tighten the screen tighter... but with that big preamble, what was the moment?"

Storytelling in Tech: The Elon Musk Phenomenon

Blodget delves into the unique ability of Elon Musk to inspire and sustain investor confidence through compelling storytelling, comparing him to Steve Jobs.

[14:47] Henry Blodgett: "Elon's ability to tell an amazing story... he's created eight of them. The rocket company, the satellite Internet company, Tesla... it's amazing."

Impact of Leadership on Company Valuations He attributes Tesla's enduring market position and its association with Musk's vision as key factors in its high valuation, despite operational challenges.

[14:40] Henry Blodgett: "Tesla has always traded at a multiple that has almost nothing to do with its current operations and everything to do with Elon Musk."

Trade Tensions: US and China

Economic Interdependence Blodget expresses skepticism about the prevailing narrative of the US versus China, advocating for economic interdependence over adversarial relations.

[36:50] Henry Blodgett: "I actually do not believe it's a gladiatorial fight... We live in a globalized, integrated economy."

Impact on Supply Chains and Startups He discusses the challenges faced by companies like Apple in maintaining global supply chains amid trade wars, emphasizing the unpredictability and risks involved.

[33:13] Henry Blodgett: "It's impossible for companies to plan... Apple is moving production to India, not back to the US."

Evolution of the Media Business

Shift from Web to Apps Blodget highlights the transformation of media distribution from web-based platforms to app-centric models, making it harder for new media ventures like Business Insider to replicate past successes.

[48:12] Henry Blodgett: "The original model for Business Insider would not have worked... the web has been completely deprecated."

Challenges for New Media Startups He points out the difficulties modern media startups face in gaining distribution and audience in an app-dominated landscape.

[49:58] Henry Blodgett: "The original model for Business Insider would not have worked... very hard to come through this period and survive."

Work Culture and Personal Reflections

Hustle Culture The conversation shifts to the intense work culture in startups, with Blodget recounting the dedication required to build successful ventures and its personal toll.

[50:50] Henry Blodgett: "Joe was extraordinarily dedicated... remarkable ability to inspire other people to get excited about the way he sees the world."

Mental Health and Work-Life Balance Blodget and the hosts touch upon the backlash against oppressive work environments, with Blodget sharing his own experiences of stress and the necessity of finding balance.

[54:10] Joe Weisenthal: "I couldn't have had children in those years..."

Final Insights and Takeaways

Investment Caution in AI Blodget advises investors to be cautious with AI investments, emphasizing the need for thorough understanding and diversification to mitigate risks akin to the dot-com crash.

Advocacy for Economic Cooperation He urges a shift from competitive narratives to cooperative economic strategies, emphasizing the benefits of integrated global markets.

Media Evolution and Future Prospects Blodget remains optimistic about innovative media models but acknowledges the significant hurdles they face in today's distribution-centric environment.

Notable Quotes with Timestamps

• Henry Blodgett on AI Valuations:

  “OpenAI just did a huge round where they raised $40 billion at a $300 billion valuation.”
  [07:40]

• Blodget on Elon Musk’s Storytelling:

  “Elon has a remarkable ability to inspire... he can go on an earnings call on a disastrous quarter like Tesla just had... and he's going to go from spending less than a tiny percentage of his time at Tesla to a little bit more.”
  [14:47]

• Blodget on Trade Wars:

  “China, I mean, look at it as a human being... the richer countries get, the less likely they are to defend themselves with missiles and so forth.”
  [37:23]

• Blodget on Media Distribution Shift:

  “Everything has moved to apps... you have to sign into every site on every platform. It's infuriating.”
  [49:58]

• Blodget on Work Culture:

  “Joe was extraordinarily dedicated... remarkable ability to inspire other people to get excited about the way he sees the world and to work with him.”
  [52:21]

Conclusion

This episode of Odd Lots offers a deep dive into the cyclical nature of market exuberance, drawing lessons from past tech booms to analyze the current AI landscape. Henry Blodget's reflections provide invaluable perspectives for investors, technologists, and media professionals navigating these turbulent times. The discussion underscores the importance of strategic investment, effective storytelling in leadership, and the need for cooperative international economic policies.

For those interested in the intricate dance between technology, finance, and media, this episode is a must-listen.