Henry Blodget on the Software Selloff Hysteria and the Problem for OpenAI

Summary

Odd Lots Podcast – Episode Summary

Episode Title: Henry Blodget on the Software Selloff Hysteria and the Problem for OpenAI
Hosts: Joe Weisenthal and Tracy Alloway
Guest: Henry Blodgett (CEO, Regenerator; former Business Insider CEO)
Date: March 7, 2026
Location: Live at On Air Fest 2026

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Main Theme

This live Odd Lots episode dives into the market's evolving AI narrative, the ongoing tech/software selloff, the precarious business model of OpenAI and other leading AI labs, and the existential questions AI poses for media and employment. Henry Blodgett, with a career straddling both Wall Street and digital media, offers historical context, market analysis, and media industry insight amid the AI "hysteria."

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Key Discussion Points and Insights

1. The Flipping AI Market Narrative

Early Euphoria to Present-Day Panic

• The AI market’s sentiment has rapidly shifted from exuberant over high-flying AI company valuations to deep worries about AI’s potential to disrupt or destroy the software industry.

• Henry Blodgett: “This looks a lot like the Internet in the 1990s. … One day, it's catastrophe. None of us are ever going to have a job again. … Other days, hey, it's just a fancy word processor.” (05:25)

• The OpenAI valuation, once seen as excessive at $300 billion, is now $800 billion; parallels are drawn with 1990s dot-com optimism and hype cycles.

Memorable Quote:

“One of the first sentences of [the Citrini] report says 10% unemployment, which means 90% employment… not Armageddon.”
—Henry Blodgett [07:14]

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2. The Citrini Substack Contagion

Newsletter Doomerism Moves the Market

• A scenario piece by James Van Gielen ("Citrini") about a dystopian, AI-dominated 2028 triggered a steep selloff in software stocks.
• Blodgett and the hosts question the market’s twitchiness—how a single Substack newsletter could jolt stocks.
• Tracy Alloway: “It speaks to what you just said… when we're in this really uncertain time, you can go from sort of euphoria to doomerism very quickly.” (07:14)
• Henry Blodgett: “Everybody is twitchy. Valuations were high... it's people saying, okay, there may be some change here.” (08:48)

Notable Moment

• Joe Weisenthal notes market's recycling fears, asking if AI agents mean "we don't need to buy regular business software anymore."
  [08:11–10:31]

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3. Will AI Destroy Human Employment?

Historical Perspective: Tech Disruption and Jobs

• AI stirs fears of mass unemployment, but Blodgett recalls similar anxieties during past tech leaps—agriculture to industry, steam engines, telephone operators:

• “All through that the number of jobs grew. … The economy overall so far in history has gone on to create a lot more jobs.” (10:47)

• Tracy Alloway challenges this with: “With AI, it's hard to see what those new jobs… are going to be. What are we better at than a supercomputer?” (11:58)

• Blodgett responds that so far, fears haven’t materialized: “These job doom predictions started 20 minutes after ChatGPT came out. Where are we?” (12:20)

• Media example: “You guys continue to grow… You didn't just queue up LLMs.” (13:03)

Key Point

• The “stickiness” or lack thereof in AI platforms is discussed, with Blodgett highlighting that switching between leading models (ChatGPT, Claude, Gemini) is simple—unlike previous tech products (ex: Google search dominance).
  (13:45–14:54)

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4. OpenAI’s Business Model: Is It Sustainable?

Funding, Cost Structure, and Strategic Risks

• Tracy Alloway: “OpenAI… is still losing money on every customer that's like a power user. So how does that actually translate into a working business model?” (19:47)
• Blodgett: “Bulls would say the cost… is going to plummet. … If they own the whole market, suddenly… they start to become incredibly profitable. We are not there yet.” (20:22)
• Highlights:
  • Unlike tech’s last cycle, today’s capital expenditure budgets are “eye watering”; OpenAI must constantly raise money, whereas Google/Facebook/MSFT fund with operating cash.
  • True-believer founders believe they’re racing to build AGI (“build the digital God”), justifying infinite R&D spending… until capital dries up.

Notable Quote:

“At some point you run out of money. … OpenAI has to raise it in the open market.”
—Henry Blodgett [22:05]

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5. Bubbles, Fads, and Private Markets

• Cautionary tales about random companies pivoting to “AI,” echoing crypto and dot-com eras.
  • Example: the karaoke machine company’s “AI pivot” and the Japanese toilet company (23:17–23:38).
• “We are in a euphoric bubble period.” –Blodgett (23:53)
• Private secondary markets now allow more liquidity for late-stage private companies, but ordinary investors face high fees and scant transparency (no financials).
  • “Big, big warning signs going on over there. … It is the market trying to solve the problem that it's much harder to make money in OpenAI at 800 billion… than it is in the seed round.” (25:30)

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6. AI and the Future of Media

Newsroom Angst, Fragmentation, and Brands

• Tracy Alloway: “You did your own AI newsroom experiment... did you expect a backlash?" (29:29)
• Blodgett details experimenting with AI “staff”: “They all had different personalities, they had headshots, et cetera. I wrote this up… Not spectacular, but pretty good.” (30:12)
• He recounts how media executives and young journalists are anxious about jobs and AI experiments. (32:27)

Historical Media Context

• Media got vastly more competitive as distribution changed (rise and fall of social, return to direct subscriber relationships)—“the problem... is there's way too much media.” (32:27–35:38)
• In the AI/LLM era, possible binary future:
  • “Big chat platforms become the front page,” or
  • “Distribution and quality become even more important for trusted brands.” (35:38)
• Blodgett takes the optimistic view: trusted brands (Bloomberg, NYT, niche experts) will survive and even thrive.
  • “For the brands that make it, it is terrific. I trust Bloomberg. … Occasionally there's a mistake, but it is an honest mistake that will be fixed quickly.” (36:28–37:16)

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7. How Newsrooms Should (and Shouldn’t) Use AI

• AI is “enhancement” for research, drafting, summarizing—freeing up journalists for judgment, interviewing, and storytelling.
• “We have conflated reporting and writing as journalism… There are opportunities now where the writing lift may be lightened by [AI].” (38:30)
• But investigative skills, judgment, and differentiation remain critical.
  • “It's very hard to protect news… But the organizations that produce it all the time are going to have a huge advantage.” (41:10)
• Niche and expert brands will survive, as will those with devoted audiences.

Quote:

“What is going to stay the same in media is that… we're always going to want to know what's happening and what it means and we're always going to want to be entertained.”
—Henry Blodgett [42:35]

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8. The CEO/Business Environment in a Trump Era

• CEOs, Blodgett argues, are pragmatic—not “free speech crusaders”—sticking to company interests, avoiding controversy. (44:27)

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9. Reflections on Modern Media, Direct Relationships, and the Value of Experimentation

• If selling Business Insider today, the pitch would be: Be relentlessly adaptive, serve passionate subscribers, and don't reflexively fear AI (46:09).
• Blodgett describes his experiments in subscriber-based media, and even writing fiction, confessing both the joy and futility given AI’s ability to mass-generate content (48:02–49:30).
  • “For me as an analyst and writer… the joy is the process. … I learned so much. … What are humans going to do? … Chess is bigger than it has ever been in person [even though computers beat us].” (49:58)
  • The future is a partnership: “We have AI research and write stuff we don’t really want to do, and we save our writing and orating… for what we’re passionate about.” (50:27)

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Timeline of Important Segments

• Market Hysteria and AI Valuations — [05:25]
• Citrini Substack Doomer Report & Market Impact — [06:23–07:14]
• Will AI Destroy Jobs? | Historical Perspective — [10:47–12:20]
• AI Software Replacing Enterprises? — [08:11–10:31]
• AI Platform Switchability vs. 1990s Network Effects — [13:45–14:54]
• OpenAI’s Business Model Debated, Capital Needs — [19:47–22:56]
• Bubble Psychology, AI Fads & Private Markets — [23:53–27:19]
• AI in Newsrooms, Media Competition, and Brand Survival — [29:29–37:54]
• AI as Media Enhancement vs. Replacement — [38:30–42:35]
• Reflections on Subscriber Strategy, Direct Relationships, and Making Mistakes — [46:09–47:42]
• Process of Writing (Humans vs. AI), Chess Analogy — [48:02–50:32]

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Notable Quotes & Moments

• “[AI hysteria] is predictions. ... One day it’s catastrophe. ... Other days, hey, it’s just a fancy word processor.” –Henry Blodgett [05:25]
• “So far from Armageddon, it’s people saying, OK, there may be some change here.” –Henry Blodgett [08:48]
• “There really will be no jobs for humans anymore… I think the bigger risk with AI is somebody invents an agentic system that gets out in the world and does a lot of damage.” –Henry Blodgett [10:47]
• “For the brands that make it, it is terrific. I trust Bloomberg. ... occasionally there's a mistake, but it is an honest mistake that will be fixed quickly.” –Henry Blodgett [36:28]
• “We have conflated reporting and writing as journalism… The writing lift may be lightened by [AI].” –Henry Blodgett [38:30]
• “Chess is bigger than it has ever been in person. … My hope is we have AI research and write stuff we don’t want to do, and we save our writing for what we are passionate about.” –Henry Blodgett [49:58–50:32]

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Takeaway

This episode frames current AI mania as the latest in a string of historic tech cycles. Despite markets oscillating between euphoria and doom, most incumbents won't be wiped out overnight; big brands and niche experts in media are likely to thrive if they continuously adapt and deepen their relationships with passionate audiences. Meanwhile, AI will change workflows and business models, but as in chess, human drive for meaning and narrative may endure in new, surprising forms.

Transcript

[Joe Weisenthal]

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[IBM Representative]

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[Henry Blodgett]

Studios podcasts Radio News hello hello Hello.

[Tracy Alloway]

Welcome to on Air Fest 2026. Thank you so much. I'm Kristen Meinzer. I'm your emcee for the day. And in case you don't know who I am, I'm a podcaster. I'm a royal watcher. I'm a culture critic. I've been very busy over the last week with some royal news you may have heard of. So you may know me from those things. But today is not about me. It is about the fantastic talent that is going to be on this stage and at this festival. Let's get to our first live taping of the day, Bloomberg's Odd Lots podcast. The host of Odd Lots are Joe Wiesenthal and and Tracy Alloway. Please welcome them to the stage along with their very special guest, Henry Blodgett. Thank you so much. Welcome to the stage.

[Joe Weisenthal]

Thank you so much. And hello, and welcome to a live episode of the Odd Lots podcast. I'm Joe Weisenthal.

[Tracy Alloway]

And I'm Tracy Alloway.

[Joe Weisenthal]

Tracy, we're definitely not going to do this, but it definitely feels like almost every episode could be about AI these days. Right? Like, it's just touching. So all the things we talk about are slowly getting subsumed into this topic that we're not going to do it, but we probably could.

[Tracy Alloway]

It's not just that every episode could be on A.I. it's that every episode could probably be made by A.I. at this point. Right. And in fact, we've had a few people last year, I remember there were a few people who made AI generated episodes of the podcast, and they weren't that bad. And I have to think if they did it to today, they would be even better.

[Joe Weisenthal]

They would definitely be better anyway. Not better than us, but they would be better than they were a year ago. I'm not so sure they'd be better than they were a year ago. Anyway, so we have to talk about AI and what it's doing to the market, finance, economics, et cetera. And of course, we have to talk about what it means for us in the media industry. And I'm very excited to say we do have the perfect guest. We're going to be speaking here with Henry Blodgett, the CEO of Regenerator. He used to be my boss when I was at a Business Insider, Someone who has a background in. In both media and, of course, Wall street and finance. So the perfect person to talk about all the different dimensions.

[Tracy Alloway]

Truly the perfect guest.

[Joe Weisenthal]

All right, Henry, thank you so much for coming back on Odd Lots.

[Henry Blodgett]

Thank you for Having me.

[Joe Weisenthal]

So the last time we talked to you was in May of last year. And the theme then was everyone was talking about, here are these huge valuations for AI companies. How could they possibly be justified? And that was an interesting conversation. And it feels like the narrative is now flipped 180 degrees where it's like, these companies are so powerful, they're going to destroy every other company in their wake. And every software company and payments provider, et cetera, has been plunging really since the start of the year. How have you updated your views? Where are you now versus where you were in, say, May?

[Henry Blodgett]

We are early in the development of the industry. This looks a lot like the Internet in the 1990s for those of you who remember. Basically, when you have a huge opportunity like this early on, you can have a huge range of reasonable predictions about what is going to happen. And here we one day, it's catastrophe. None of us are ever going to have a job again. Everything's going to crater. Other days, hey, it's just a fancy word processor. No worries. OpenAI is way overvalued. I will say that since we talked last, I believe that we were aghast at the OpenAI $300 billion valuation. I believe the latest one is 800 billion. So we are climbing. But there are other companies out there that are worth many times that. So if one does think that AI is going to take over the world, and OpenAI is the Google of the AI era, which is the thesis, which I think is very misguided, that we can get into, then one can imagine that a company might be worth many multiples of some of the companies that are out there.

[Tracy Alloway]

So one of the crazy things that happened this week, speaking of AI and media, is there's a guy, we've had him on the show, James Van Gielen, AKA Citrini. He runs a hedge fund one also publishes an investment newsletter. He basically wrote a doom case scenario of the year 2028 where everything had become AI. And because everything was AI, no one had any jobs, no one was actually buying anything in the economy. And we basically had an economic and financial crisis. When I read that piece and then saw the market reaction to it, so stocks fell pretty dramatically and people were attributing it to basically a newsletter. That was a bot piece, I thought that was kind of insane. And it speaks to what you just said, which is when we're in this really uncertain time, you can go from sort of euphoria to doomerism very, very quickly.

[Henry Blodgett]

Exactly. Because it's all predictions. We're all looking into the hazy future saying, how big is it going to be? These small changes in your assumptions make a huge difference in the current value. I will say, because that research report was both heralded and paid. Hillary, this is exactly what you want analysts to do. You want them to look out and take a strong position and say, here's what it can look like. And I thought it was a fascinating report. I will point out that even though, as you just characterized it, that this is economic Armageddon, one of the first sentences of the report says 10% unemployment, which means 90% employment. Most of us still have a job. And yes, there are changes in industries, but most of us are still working. So I was surprised after hearing about this predicts catastrophe that I picked it up. It's like, well, no, it predicts a big technology change that sometimes takes the economy a while to digest, but not Armageddon.

[Tracy Alloway]

What do you think, though?

[Joe Weisenthal]

It says about the market right now? And it's kind of an interaction of a market story and a media story. Because here's a substack piece that really did seem to move the market quite a bit on Monday, right? Yeah. What does it say about the market environment that people. Because it's all year, right, the software stocks have been getting clobbered all year, and our AI agents. And maybe we'll get into that, gonna somehow make it so we don't need to buy regular business software anymore. I don't totally understand that. But this has been the fear all year. What does it sort of say about the market media environment that a substack piece like this could just go absolutely mega viral like that and move the market?

[Henry Blodgett]

Everybody is twitchy. Valuations were high to begin with. We're all reevaluating our views every day, saying, am I crazy thinking it could be this? Maybe I'm crazy. I have to panic a little bit. So we've seen stocks roll over. The multiples are compressing a little bit again. So far from Armageddon, it's people saying, okay, there may be some change here. And to your point, the big bear case now is that, oh my goodness, Claude code is so good, no one will ever buy software anymore. You'll just say, hey, make me the software.

[Joe Weisenthal]

I've done that.

[Henry Blodgett]

Yeah, you have. You're a big experimenter. But I would say you were probably not spending billions of dollars on enterprise software before.

[Joe Weisenthal]

I don't have thousands of people on my payroll who are like, they need to get it at Friday.

[Henry Blodgett]

Exactly. Who depend on this. And one of the nice things about having a company standing behind a product is you actually can hold them accountable for it. And maybe Claude code doesn't make your enterprise software the way you want. Somebody doesn't get paid. So as I hear that, to me that is hysteria. I don't understand it. Software companies are not going away. Companies that are not in the software business are not gonna suddenly say, oh, let's have a junior person who understands AI build all our software for us. It is not gonna happen. But overall, big changes coming, lots of disruption. Do we know for sure what that's gonna do to profits of these companies and changing the economy? We do not. And that is called the discount rate getting higher. It feels riskier. And on that day Monday, everybody was feeling suddenly risk averse. Today, I'll point out, as we tape everyone saying, no problem, off to the races again.

[Tracy Alloway]

You've obviously lived and been very active and influential in a previous technological, I guess, cycle of disruption. What do you think people are getting wrong here, especially on Wall street when it comes to their approach on this particular one, AI versus dot com.

[Henry Blodgett]

I think this goes way beyond Wall Street. I think there really is a big camp still and the case gets made and then it gets tamped down and then it comes back even more strongly that there really will be no jobs for humans anymore. And what I would say to that is I think the bigger risk with AI is actually that somebody invents an agentic system that actually gets out in the world and does a lot of damage. I think that is a bigger risk. If you look at technology, job transitions over time, like the big one, which is agriculture to industrial, 200 years ago, 93% of us worked on farms, now it's 2%. That's a big transition. And yet all through that the number of jobs grew. And same thing with things like telephone operators with steam engines. You look at any piece of it, there is disruption and pain. And I'm not minimizing that for the people whose jobs are changed or disrupted by it. But the economy overall so far in history has gone on to create a lot more jobs. And so when you see the lay waste to jobs predictions, you don't also often get the other side, which is how many new jobs are going to be created.

[Tracy Alloway]

Well, this is exactly what I wanted to ask you because we hear that all the time during technological advance cycles, new jobs are created. But I think the difficulty with AI is that it's hard to see what those new jobs, what are we better at? Are going to be. Yeah, like what are we better at than a supercomputer that can code a program or write an article in less

[Joe Weisenthal]

than a minute or mimic a voice and do a podcast?

[Henry Blodgett]

Okay, so how were we three years in at this point? These job doom predictions started 20 minutes after ChatGPT came out. Where are we? Maybe a little bit at the margin. We're seeing something maybe, but maybe it's still that companies way over hired after the COVID boom and are now sort of right sizing themselves as you say. I can go into LLM, I can go to Google. I think it is drop in a topic and say make this into a great odd lots podcast.

[Joe Weisenthal]

Some people have said that Google, multiple people think that Google's Notebook lm, which does that, creates a podcast out of a document. Multiple people have said they trained this on Joe and Tracy. Like this sounds like an odd lot.

[Henry Blodgett]

Other people are claiming that too. But yes, they could have. I'm just saying you guys continue to grow. All I hear more and more about is oh, you gotta listen to odd lots. Growing, growing, growing, growing, growing. And I don't think we were talking earlier that you've radically changed. You made the way you make the show. We're still recording it here. You didn't just queue up LLMs. Who is going to rush to do the big interview with Google? They're not. They're going to come do it with you guys because they love you and your audience loves you. So I'm just saying, even in something that seemingly looks so ripe to be destroyed, you guys cost money. Why is Bloomberg spending it? Why you're throwing it away, Right?

[Tracy Alloway]

Are we going to have to defend our salaries on stage?

[Henry Blodgett]

I'm just saying be more optimistic.

[Joe Weisenthal]

So I mean I hear both ways and thank you for saying that. On the other hand, people might not have the same affinity for someone who does claims adjusted at insurance. They don't really care if they have the human touch for that or tech support. I want to ask a related question. It also relates to the piece that came out on Monday and it relates to this question of whether OpenAI could be the Google of the next generation. One of the arguments that the piece stipulates, and I think it sort of fits with what I have observed, is that AI doesn't seem to have network effects in the same way. So it's like you could switch from ChatGPT to Claude with almost no issues and it's just not an issue. Whereas after the first time I used Google in 2000, I never used Yahoo again. That was the last time I'd ever used another search engine. This is one of the arguments in the piece that there isn't going to be the same stickiness and network effects in the AI era in the way that defined the last 25 years of the Internet. And so when you think about like OpenAI versus Google, this era versus the dot com era, does that resonate too?

[Henry Blodgett]

I think that what folks who would say that OpenAI is the Google of the era would say that more and more you're going to build more of your life into it. It's going to know everything about you. It's going to custom. So it's going to be. The switching costs are going to grow. But to this point, they have not. And I'll tell you the thing that really made me think they were in trouble, and I still think that given the valuation and given the general consensus that they've already won, was when Google Gemini came out and people said, oh, it's better they passed them. And everyone, all the bulls said, oh, just wait till the next version of OpenAI comes out. I will say, if you go back into the 1990s, Amazon was very controversial. A lot of people thought it would go bankrupt. It's just a bookstore. Barnes and Noble is going to put them out of business as soon as they have a website or Walmart or whatever. Walmart and Barnes and Noble never got anywhere near Amazon. Amazon was so far out ahead, always, and still almost went bankrupt, by the way. But nobody was ever close. And in this case, less than two years after the product comes out, the incumbent has caught up to me. That's when I said, like, whoa, okay, maybe this actually is going to be like the Internet, which is the first five years. All of us, including me, were saying, like, oh, just buy the leaders, no problem. Like, they're the ones that are going to survive. You know how many survived? Of that first 500 companies that went public in the 1990s, one went on to actually make investors a lot of money after the crash. That was Amazon. Two others that I know of, Cisco, after 25 years, finally got back to its stock price. EBay did okay for a while and then kind of sputtered out a little bit. That's out of hundreds and hundreds of companies. So I think it's very possible that, yes, AI is huge. It's a great idea, we all want it, and somebody is going to come along soon and do to OpenAI what Google did to Yahoo, which by the way, Yahoo was the big search engine winner and then Google destroyed it. So I just think it's way too early to say that OpenAI is the Google.

[Joe Weisenthal]

Running a business means dealing with a lot of overly complicated Software, and most CRMs tend to follow the same pattern. They're packed with endless features. You'll never use, interfaces that feel clunky, and teams end up spending way too much time just trying to find basic information. Today's sponsor, pipedrive is a simple CRM tool designed for small and medium businesses. Pipedrive brings you entire sales processes into one dashboard, giving you a crystal clear, complete view of sales processes and customer information. Designed to help teams stay in control and close more deals faster. It all centers around the visual sales pipeline where you can see every deal, what stage it's in, and what needs to happen next. Since everything is in one platform, pipedrive is designed to unite your team, keep track of sales tasks and stay on top of your leads. Switch to a CRM built by salespeople for salespeople and join the over 100,000 companies already using Pipedrive right now. You'll get a 30 day free trial, no credit card or payment needed. Just head to pipedrive.comsimpleCRM to get started. That's pipedrive.comsimpleCRm support for the show comes

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[Henry Blodgett]

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[IBM Representative]

lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get Smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.

[Tracy Alloway]

IBM, we started by mentioning the OpenAI valuation, which everyone was aghast at last year. Now, maybe not so much. But even if you assume a future where OpenAI or whoever comes in and disrupts every single industry and there are thousands of employees and companies that are paying $200 a month or whatever to access the new LLM, whatever the new model is, OpenAI, at least for right now, is still losing money on every customer. That's like a power user. So how does that actually translate into a working business model?

[Henry Blodgett]

Good question. I think what the bulls would say is the cost of what they do is going to plummet. And so the lines are going to cross here. Pretty soon, if they own the whole market, suddenly they start to become incredibly profitable. We are not there yet. And I think when we talked last time at a $300 billion valuation, which everybody was horrified by at that point, but if you looked at the projections, the projections were, three years from now they'll do 100 billion of revenue. And if you, at that point we're looking at it saying, okay, if I believe that, then it's three times revenue, the economics will probably change. Starts to look a little more reasonable. Now we're at 800 billion. So it's a much bigger multiple and you've got to actually have a much bigger revenue stream and profits. But that's the argument. I don't see it yet. I gotta say, the economics are incredibly difficult for them right now.

[Joe Weisenthal]

They seem brutal. And there's another element too. So obviously, unlike during the Web 2.0 era, where there was cheap plentiful compute, obviously the capital expenditure budgets of these companies are just eye watering. They're spending like crazy. There's also this other element that I think is interesting, which is at least at a few of these labs, the people who founded them are true believers. They think they're, they think they're on a mission to build. AGI is going to change everything.

[Tracy Alloway]

Build God.

[Joe Weisenthal]

Build God, right. Build the digital God. And it's like they're not going to stop at anything. They're not going to be like, you know what, it's pretty good. Let's tap the brakes. We're pretty happy with how this model works, you know, or at least I don't get that.

[Tracy Alloway]

Also, they've couched it as this, like, existential race. Like there's only going to be one company that dominates in the end. So the Upper limit on spending to become that company is infinity.

[Henry Blodgett]

Yes. However, there is a limit to money. And when you look at when people are raising money, you watch where they're going for it. Sure, the VCs, that's one pool of money. And then the big strategics, and then the VCs who missed the first time and are feeling so embarrassed about it, they'll pay up to get in. Then it is the international folks that are watching all this stuff. Yeah, exactly. So at some point you run out of money. And we are talking about a company that is raising hundreds of billions of dollars just to keep the engine running and just to keep pace. This is the other problem. Google, Facebook, Microsoft are generating tens of billions of dollars of free cash flow every year that they can use to buy chips. OpenAI has to raise it in the open market. So if those economics don't start to change soon, they're going to going to run out of money.

[Tracy Alloway]

Joe and I were talking about this before we came on stage, but another thing that happened recently was there was a karaoke machine making company that announced it was now an AI company, which when I see headlines like that, remind me a lot of the crypto boom, but also remind me a lot of the dot com boom. And we are starting to see more and more of those. Wasn't there a toilet company recently with

[Joe Weisenthal]

the toilet one is legit. So like, apparently, I don't know, for real, apparently. So it was not like, oh, we're an AI company. Apparently it's this Japanese toilet company and they have some like porcelain or something like that. It's very important for like semiconductors or something. So everyone's like, oh, get out of the toilet business. You have this access to this material. But the, so that one was kind of legit, the karaoke one.

[Tracy Alloway]

Okay, okay, so the toilet one, maybe the karaoke one. When you see headlines like that, what do you think? Do you think like this is a rational pivot into a booming market and everyone should be experimenting with AI at the moment? Or do you think like, no, this is getting crazy.

[Henry Blodgett]

I think we are in a euphoric bubble period where we've just discovered this amazing new thing. Nobody knows what the future is. Nobody knows what's going to work. And we are effectively creating this enormous R and D lab which is, hey, you can do something. Here's some money, go out and experiment. I hope you'll be one of the winners. 50 to 100 years ago, all of that stuff happened in labs like Edison's lab or Bell Labs inside these big corporations. You never saw it. Now everything is a startup. You see it, it's happening in front of you. But there's no question that most of the companies are going to fail. Happens again and again and again. And I think what investors are saying when they see that is okay, you know, that is a quick flip. It's hey, I'll get it. Other people, a lot of people love AI. They'll buy it after I do and it'll go up and then I'll sell it.

[Joe Weisenthal]

I want to ask you a question about capital markets and how they're different to the late 90s or the dot com bubble. Because one really big thing that's happening these days is yes, these companies are private, but there is a lot of stock floating around and There are these SPVs that will buy, acquire a chunk of sayanthropic and sell them on a secondary market. And people are trying to get, they're much more liquid than a private company would have been in the late 90s. I get someone messaged me, they're like, do you want to buy a little? I'm like no, I don't do that. But they're like, would you like to buy a little bit of anthropic at a $350 billion valuation? But you must get a bunch of those sort of messages from people. And I'm curious about your perspective on this world because the other thing is like there's no financials. You have no idea like what their P and L is for these private companies. What's your take on some of this quasi liquid private market stock?

[Henry Blodgett]

And let us just say that when our phones are ringing.

[Joe Weisenthal]

Yeah, I know that's the thing.

[Henry Blodgett]

We are right at this end.

[Joe Weisenthal]

Money out there, it's like if someone is reaching out to me, it can't be that much money.

[Henry Blodgett]

Big, big warning signs going on over there. So I think one of the things that's changed versus the dot com boom in the 1990s and before that is companies used to go public very early before and you could invest in Amazon for example at a $400 million valuation. Sounds like a lot. It's worth trillions of dollars now. There's been incredible appreciation. Individuals can't do that anymore. And there's good reason for it. People lost a lot of money after the dot com crash. We didn't like that. We want to protect everybody. So now companies go public a lot later. The threat of lawsuits and all of the different regulate regulation that you've got to do. So it's later. But the bummer about it is a lot of investors who actually do have the risk tolerance can't access them. And so yes, you've had a new business that has been built around okay, let's get that private stock somehow. And the problem is again, if you choose right, great company, it works. But it's more fees packed around it. It's much more, you know, that that intermediary that called you has to get paid. So that's somebody else. It's more difficult to trade. So I think it is the market trying to solve the problem that it's much harder to make money in OpenAI at 800 billion or anthropic at 350 billion than it is in the seed round when it was a few hundred million. And so you've got a lot of people clamoring to get in. But it's the same problem. You don't even in fact less when companies go public, they do or they are releasing a lot of information, whereas these guys are not.

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[Tracy Alloway]

should we do some media stuff?

[Joe Weisenthal]

Yeah.

[Tracy Alloway]

All right. Let the media navel gazing begin. Okay, so we started out by saying that, you know, we were talking about the Citrini piece that got. It went viral, but it also got a backlash. You did your own AI newsroom Experiment newsletter on Substack that also got a bit of a backlash. Were you surprised at that one?

[Henry Blodgett]

Yes, I was surprised. Basically what I did. I left Business Insider. I started this new thing, Regenerator, and a podcast, too. Trying your business.

[Tracy Alloway]

It's very different.

[Joe Weisenthal]

How are you finding it?

[Henry Blodgett]

Fun. It's good.

[Joe Weisenthal]

Talk about it.

[Tracy Alloway]

This is the most important aspect of podcasting. Plug the podcast.

[Henry Blodgett]

Exactly. Yes. Podcast called Solutions with.

[Joe Weisenthal]

Check it out.

[Henry Blodgett]

Yes, please. So I left, and it was just me. So I said, okay, great, let's see what it can do. Because if you try that as a CEO of a company, people freak out justifiably. Oh, my goodness, they're going to discover something. My job's threatened. We are all worried about our jobs being threatened. Including, by the way, do we need articles? Any more articles? I mean, boy, there are a lot of great articles written every day. In fact, this is the problem in media. There's way too much of it. Let's just get that out there. Anyway, so, yes, I experimented with everything. And the first thing that I did was, oh, if I were actually starting a publication and hiring a team, who would I hire? Well, I'd hire five people. I have a managing editor, and I'd have a few reporters and so forth. So I asked chatgpt, can you help me? Chatgpt said, sure, let's make them. So in two hours, we made them. They all had different personalities, they had headshots, et cetera. I wrote this up. We had, like, slack going where we're all talking about stories, and it was pretty good. Not spectacular, but pretty good. And so that was cool. So I wrote about it. Yes, I also made the mistake of complimenting one of the headshots and was immediately lambasted for that, which actually helped me hone my own AI morality.

[Tracy Alloway]

Wait, I have a question on this. If you had had a human editor for that piece, do you think you would have complimented your AI generated managing editor on her appearance?

[Henry Blodgett]

The piece needed to be editing, edited. This is the problem. You were out on Your own. You don't have great editors protecting you anymore. You let your enthusiasm bubble over a little bit too much. You know who I have edit my stuff now sometimes if I feel like I'm maybe a little bit too enthusiastic, chat GPT or Claude and very good spots it. Anyway, yes.

[Joe Weisenthal]

Talk to us about that newsroom dynamic, particularly. You know, every editor at a newsroom. Every. Every newsroom right now is like, trying to figure out something, right? And you can't, like, alienate the entire newsroom and say, like, oh, you all have to be doing what to be vibe coders. Yeah, like, that doesn't work. The newsroom obviously hates it. And I would say probably for good reason. But on the other hand, everyone has to be, like, figuring stuff out. What should newsroom executives, whether it's editors in Chief or whatever, how should they be thinking about solving this problem?

[Henry Blodgett]

So, I mean, so going back, the other thing, the other thing that I learned from publishing, that was just how much anxiety there is, especially in the younger generation about jobs that have been there for a long time that are just disappearing. And that was extremely clear to me, and I would have been even more. Yeah, I understand it. I mean, it is scary. And so what does a newsroom do? I think, let's look at what's going on. Media. The problem, again, is there's way too much media. There are so many amazing articles, for example, produced every day. When I open the New York Times or the Wall Street Journal or Bloomberg, I want to read dozens of articles. I might get to one or two. And distribution has changed radically. Five years ago, Facebook, Google were driving enormous distribution to lots of different publishers. That is all now changing. We are going back to something that looks like the 1990s, where actually you have to have a direct relationship with your subscriber. The industry is under a ton of pressure, both from advertising, but also we have maximized the amount of time as humans that we can spend consuming media. This is very different from 20 years ago when we started Business Insider. You remember this. Like, in the 1990s, media was very mature. It was.

[Joe Weisenthal]

Don't say it's 20 years ago, by the way. That's like 30 years. Oh, yeah, I don't like to think about that fact.

[Henry Blodgett]

Okay, but let's go back to the 1990s even further. Media was very mature. Magazines, totally mature, very hard. To start one, you needed $50 million, and you need to hire all these great people. And then maybe five years down the road, you might, if you're lucky, become profitable. Very hard Very hard to get into newspapers, television, even worse. You're slave for a long, long time, getting coffee, so forth. Very, very tough. Then desktops came along and got connected. So that was suddenly 12 hours a day that people are sitting in the office. They need to know what's going on. It's a new opportunity. Then phones came. And that's the thing that really drove Business Insider in the early years. We're standing around, we want to know what's happening. Nobody else is serving that. So big, big opportunity. But over time, all the folks in the industry caught up. New York Times is terrific. So is Wall Street Journal, so is Business Insider, so is Bloomberg. These companies are really, really good at this now. And if you just look at, for example, political coverage, we don't need 100 White House reporters. We just don't. And yet that's the thing that everybody's interested in. So of course you're going to have a reporter focus on that. And yet there's just too much capacity. And then the other thing that happened, and I'll finish up very quickly, is the Internet blew up the protective moat around all of the 1990s era media. Print and TV used to be completely separate. Now they're the same. You used to not have a television company be able to own a newspaper. Now we've done away with that. Everybody can own everything, everybody can do everything, and it's all a click away. So it has become even more intensely competitive. And so it's never been an easy industry, but we are back to it being an incredibly intensely competitive industry. And I do think there's just in general, too much of it.

[Tracy Alloway]

So when we think about the impact of AI on media, it feels to me like people are talking about two paths here. And one is where, you know, the big chat platforms are basically they become the front page of the Internet, right? And you type in whatever query you have today, how did the State of the Union address go last night? Or something like that, and it spits out a bunch of information that's based on a bunch of articles that you yourself are not paying for. And then the other thing that I hear is, well, actually, in the age of Internet slop, AI slop, that distribution and quality is going to become even more important. So people are going to want to go to the New York Times or hopefully to Bloomberg or wherever, and get that take on last night's events. Where do you stand on that sort of, you know, it's a very binary outcome to me. Which way do you think we're Going,

[Henry Blodgett]

I think this is great for the brands that make it. And again, nobody has a right to exist. It's going to be a fight. But for the brands that make it, it is terrific. I trust Bloomberg. I read a Bloomberg article. I know the reporter knows what they're doing and they know the subject. I know there is editing there. Occasionally there's a mistake, but it is an honest mistake that will be fixed quickly. Compare that to what I see on social media, especially now, where AI can create photos and videos and everything else. I don't know. I know the New York Times will immediately dive in if something is bubbling up, some video that's apparently scandalous that we've all got to look at. I know they'll do work on it. Maybe we'll sometime get to the point where they can be fooled.

[Tracy Alloway]

Not yet.

[Henry Blodgett]

And so I trust them. And you actually need a brand and a great organization to do that. And people say, oh, yes, but everybody out there, you know, who knows what's true and it's over. That has always been the case at its peak in the inner, in the print era, a million people read the New York Times. That's it. Everybody else heard what was said from their friends or they heard something else. They never even thought about it. And so the idea that, yeah, there's stuff out there that some people believe. There has always been stuff out there that some people believe. So I think it's great for brands, but I do think it's going to be a fight. It's never going to be an easy industry talk.

[Joe Weisenthal]

Just more about this question, though, of like, okay, New York Times, like anyone else, they have to figure this out, Right? They have to figure out, can they leverage it. I'm doing scare quotes because I hate that word, but that's like the word that everyone use. Could it be leveraged in some way in the context of the traditional newsroom AI? Yeah.

[Henry Blodgett]

And so going back to your question, which I realized I didn't get to before, so what, what should news and

[Joe Weisenthal]

how do they handle that? Like, because everyone here. Oh, you have to like run your, run your text through this chat bot or train your. Train the AI that's going to replace whatever or they fear, you know, very reasonable fear. How do you, how can anyone overcome that?

[Henry Blodgett]

So I think there, there is the opportunity for there to be a lot of productivity enhancements in what we have today. We were talking earlier, you both use ChatGPT for your research. Me too. It's great. That is a very different. That is one use of media is me looking for information going out. It used to be that I would search for articles. Now I do it with Claude or ChatGPT. That is a smaller piece than what most media has lived on forever, which is, I don't know what I'm interested in. Whoa, that's an interesting story. And that's the serendipitous consumption of media. That's why newspaper headlines have been like this forever. It's why magazine covers matter. We don't know what we want until we see it and then we get it. And it's why in our business there are many different talents. You need to be extraordinarily talented in the business. One is sure, reporting, accuracy, expertise, so forth. You also have to know what people think, care about and what a good story is and why it matters. And I don't think that changes. And so where do we look? Around the industry? Yeah. Research, drafting stories, why not? And when people are aghast at that, let me just say back in the print era for newspapers, especially a daily newspaper, what would happen is the reporters would be out in the field, they would get information, they would call it into the rewrite desk. Verbally, they didn't have anything to write it with. They just say, here are the facts, the rewriters would write it. And in the last 20 years or 30 years, we who have been trained in writing and we value it and we go to Columbia Journalism School, we have complete conflated reporting and writing as journalism. And I do think there are opportunities now where, okay, the writing lift may, may be lightened by this. And I'm not saying say here's the article and just publish it. I'm just saying, you know what, perplexity is pretty good at writing a well informed, well sourced story in six seconds. And maybe that actually accelerates what you're doing and then maybe you can add your piece to the top or what have you. So I do think there are uses for it too.

[Tracy Alloway]

So I actually, I agree with that argument. I think like social skills and investigative skills are going to become more important in the age of AI. However, what you always hear is, well, you're going to need, you're going to need to produce scoops, right? You're going to have to find the stuff that the models don't already know know about and that's going to be the valuable aspect of journalism. But the problem seems to be that those scoops get commodified so freaking quickly that I'm not sure that actually generates much value for the News organization.

[Henry Blodgett]

It is very hard to protect news. You can't. But the organizations that produce it all the time are going to have a huge advantage because it is going to be worth subscribing to them. And that's where the New York Times, the Wall Street Journal and Bloomberg, that's where it's coming from. And Bloomberg's an interesting one because you really serve a somewhat small but highly committed base where Bloomberg reporters are breaking stuff all the time that allow people to make or lose money. They're going to care and they're going to have that terminal and ChatGPT is not doing that. So part of what I hear you say is wait a minute, it has to be differentiated. Yeah, it does actually there's a lot less value than there used to be in somebody said something interesting. Let's write it in an intelligent way, do a little more work and get it to somebody else that is not as useful anymore for the reason that you describe. But those companies, if they want to compete with each other and they do ChatGPT and Claude right now, they are going to have to pay for that information. And that's where a Bloomberg is in great position. And say another thing, it's not just the big generalists, it is the niche providers who are experts like you guys and do an amazing job in a particular area that people really care about. Those are going to, those are going to survive. And I'll say one more thing which is Jeff Bezos was an investor and business siders, incredibly helpful to talk to him, very smart. I realize now he's become kind of not applauded in the journalism industry but one of the things that he liked to say is everybody wants to know what's changing and what it means. It's actually more useful to step back and say what is going to stay the same. What is going to stay the same in media is that we are always want to, we're always going to want to know what's happening and what it means and we're always going to want to be entertained. And that's what media does. It's tough. But until actually there are no more humans, we are going to want media to deliver that.

[Joe Weisenthal]

I agree with that. You know there's some really good stories by the way about the like the New York Post and Daily News like report like the crime reporters out in the fields and then they would call the rewrite desk and then they would like translate it into like tabloid speak. That's a cool, that'd be a cool.

[Tracy Alloway]

I remember Sending notes on a BlackBerry in, like, the early 2000s, and then someone in the newsroom would translate it into readable words.

[Joe Weisenthal]

With our few minutes left, I want to talk about. You mentioned Jeff Bezos. I want to talk about the business environment right now. When President Trump won, there was a lot of headlines about these CEOs. They'd be like, well, now free speech, and now we can speak our minds. And none of this woke stuff where we have to be careful about what we speak. And I get the impression that it's literally the exact opposite, that CEOs have never been more scared, they're never been more timid, and they, like, are obsequious to him, and they do these big pilgrimages and stuff. And meanwhile, we know they hate the tariffs. We know they hate all the stuff going on. What do you make of that? Because he's not even that popular anymore. He's actually arguably one of the least popular presidents ever. And yet I don't get the impression that there's been much of a change in this sort of world of CEOs and rich guys and billionaires about speaking their mind.

[Henry Blodgett]

Yes. The whole free speech thing was always, I want more speech than I believe in, so I can say whatever I want. You can't say what you want. So it was kind of ludicrous. I think that in general, the big companies and CEOs, especially because President Trump won the last election, clearly said, okay, I believe in democracy. I'm going to be pragmatic and take care of my team and my company. And also for most public company CEOs, they are easily removed, and they know that. And your job is to actually take care of your company and shareholders. It is not to be a free speech crusader and stand up for your personal thing that you believe in. And so I think there was a lot of pragmatism. I think that may start to change here. I feel like things have happened in the last few months. We may be starting to see a change, but I think it was mainly pragmatism. And you can look at that from the outside and say, that's outrageous. But I think they were looking out for their companies and their teams and their shareholders.

[Tracy Alloway]

I want to go back to media navel gazing because I've got more questions, and I actually hesitate to ask this one because I fear that your response is going to get back to asking Joe and I to justify our own salaries.

[Henry Blodgett]

I'm not. I'm telling you why you're not going to be replaced by NotebookLM.

[Joe Weisenthal]

Okay.

[Tracy Alloway]

I'm going to ask you to justify a particular paycheck kind of. Okay, when you sold Business Insider to Axel Springer, what year was that?

[Henry Blodgett]

2015.

[Tracy Alloway]

2015.

[Joe Weisenthal]

Okay.

[Tracy Alloway]

If you were selling Business Insider to Axel Springer now, how different would your pitch to them be in 2026 versus 2015?

[Henry Blodgett]

I would say that I think one of businesses Eider's advantages, and Joe was a big part of this, was we were not trying to defend the old way that journalism was done in print and television. We were trying to bring rigorous journalism to a new medium where people wanted different things, where distribution was very different. So we were experimenters and innovators. And for every idea that worked, we had 25 ideas that were dumb and didn't work. I take responsibility for all of them. That was the only way to figure out what worked. And one of the things we noticed relatively early is, hey, we can figure out what people like and we want to serve them. And we did a good job at that. And I think that was the. That was the thing that made Business Insider successful. I think now for all companies, stuffing your head in the sand and wishing AI would go away is not a great strategy. So what would be? What can we do? And again, one of the things that's changed as Google and Facebook and social has totally dried up as sources of distribution is we are back in this direct subscriber world, just like magazines and newspapers way back in the world. So that is serving your subscribers. This is what you guys do. You have this incredibly passionate audience. They know you, they want to hear from you every week. And so that's what media companies need to do. So that's what I would say is we are as focused as we have ever been on serving our readers, viewers, people who love us.

[Joe Weisenthal]

So you are now in very subscriber oriented media. You have a newsletter, you have a podcast, et cetera. Other than realizing, actually editors are good and so forth, what else have you learned or what's been notable about your own personal journey into subscriber based media? What has surprised you?

[Henry Blodgett]

Well, so I'll give you a little thing. So a lot of what I've been doing the last year or two is writing novels. This is something I wanted to do forever. It's like, okay, now's the time. And I talked to another friend of mine who used to be a screenwriter, and I confessed that to him. He's like, dude, that is crazy. Just go to Claude, tell Claude what you want, and Claude will spit out 325 pages and it'll Be pretty good. And I don't. I believe it. And it'll take 20 minutes. And so I feel like the world's biggest idiot from a business perspective. On the other hand, I did want to do it. I'm glad I did it. It's really fun.

[Joe Weisenthal]

What's the story? What's going to tell us about what's

[Henry Blodgett]

coming out next month? It's called the Upgrade. It's about a tech billionaire who wants to use AI to take over the world.

[Tracy Alloway]

That doesn't sound like fiction.

[Henry Blodgett]

It's nonfiction. But it'll be out. It's going to be out in beta. It's a new form of books. It's a screen test. Yes. It's been in alpha for a while. A lot of people have read it.

[Joe Weisenthal]

It's a different kind of book.

[Henry Blodgett]

No, it's a book book. But there's going to be a period where I invite you to read it. Thank you. If you would send me what you think. And then when I publish it for real, it may will have benefited from your reading anyway. So I feel like a complete idiot for doing it. But what I will say is for me as an analyst and writer and speaker, part of the joy is the process. And I learned so much. And this is what I don't understand about how research is going to be conducted. One of the things that I remember AI was hey, write me a research report about X. Six months later it comes back. It was better than a research report that I would have written as a young analyst. When I didn't know anything and it took six minutes, I said, okay, I'm not going to write any research reports anymore. But when it took me a month to do that as a 25 year old, I learned a lot through that process. And so now I don't know how you learn other. You've been reading the report. That's the thing I'm really struggling with. But I will say so for me, the process has been interesting. I hope you like the book. If you like it, maybe I'll do another one. That would be great. But what I would say is on this whole thing for what are humans going to do? You're a chess player. It has been 40 years since our phones could clobber us in chess. Chess is bigger than it has ever been in person. So my hope is we have AI research and write stuff that we don't really want to do and we save our writing and orating and everything else for the stuff that we are really passionate about.

[Joe Weisenthal]

Henry Blodgett thank you so much and thanks for joining us here. Thank you all on AirFest. There's a lot of fun.

[Tracy Alloway]

Thank you so much. Henry. This has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Allaway.

[Joe Weisenthal]

And I'm Joe Weisenthal. You can follow me at the Stalwart. Follow our producers Carmen Rodriguez at CarmenArmen, Dashiell Bennett at Dashbot and KalebrookSalebrooks and for more Oddlaws content go to bloomberg.com oddlauds we have a daily newsletter and all of our episodes and you can

chat about all of these things 24.

7 in our Discord, Discord GG oddlots.

[Tracy Alloway]

And if you enjoy odd lots then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg Channel on Apple Podcasts and follow the instructions there. Thanks for listening.

[Joe Weisenthal]

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