Ed (2:33)

Who was it?

Scott Galloway (2:34)

No, I'm not going there. I'm not going there.

Ed (2:47)

How you doing, Scott?

Scott Galloway (2:48)

I'm so excited. I'm here in New York. I'm ready for Halloween. I'm super excited. I love being here.

Ed (2:53)

And you went with. You're going with Deadpool, right?

Scott Galloway (2:55)

100 I just did round three. Three, round four, a second round two. Only swing down, you can wear an outfit twice. I used to go, starship Commander Jean Luc Picard, huge crowd pleaser. Huge. Live long and prosper. Literally every dork would come up to me. Every girl that it was, every. Every guy that was still a virgin of Manhattan would come up to me and like, give that weird hand symbol.

Ed (3:14)

Go.

Scott Galloway (3:14)

Live long and prosper. I'm like, yeah, okay, okay.

Ed (3:18)

Not the audience I wanted.

Scott Galloway (3:19)

Okay, there's a you porn super user. And here I have a Halloween story. I moved back to New York, and even though you don't need a car, I was raised in California where it was all about the car. And so I bought a 7 Series, thinking that would make me seem more interesting to other guys, more attractive to women. And I bought it from BMW of Southampton. And they gave me one key and I'm like, it's supposed to have two keys. And they said, yeah, we can't find the other one. And I'm like, well, when you find it, please send it to me. Anyway, so I'm out partying. Halloween, come home totally fucked up. I was at Lotus. I remember this. Came home in my Starship Commander outfit. And I was in the back of my loft that faces the street and I hear my car start up. I'm like, what? And I look down and my car's lights are on. Someone's in my car. So I go running down, my car's being stolen. So I chase the car to the 6th Avenue and 15th Street. I'm running after it with my phaser drawn. True story. And I catch up to the guy, he hits a red light and I catch up to him and I look in the car and he looks at me like, what the fuck is this Star Trek person chasing me for? And my. I was still young and dumb. I was not your age, but a little bit older. And I still had a. I still had decent levels of testosterone. And so I looked and I saw in the corner, you know, your idiot male masculinity. Weirdness. Violence hits in. I'm like, oh, no. Steal my car, must die. And so I pick up, I start to pick up, you know those big wired steel trash containers on the corners of New York.

Ed (4:54)

Yep.

Scott Galloway (4:54)

I literally thought, I'm like, okay, I'm gonna put this through the window and try and pull em out. And the light hasn't turned green yet. And so. And then I was at that age in my life where I was just starting to get smart. Just starting. And my Light turned green, and I put the trash can down, and he just drove away into the night. And so there's a couple lessons.

Ed (5:15)

You didn't do it. Why didn't you do it?

Scott Galloway (5:17)

Because I didn't want to get shot, Ed.

Ed (5:19)

Okay, so you ca. You came to your senses.

Scott Galloway (5:21)

Yeah, I didn't. I mean, any guy. Any guy who's willing to steal your car may have a gun on him. So, anyways, couple lessons here. BMW of Southampton. You're clearly engaging in organized crime. And then they found the car, like, six months later, and they called me and said, did you lose your. And I got in a big argument with BMW. I'm like, you guys clearly are engaging in organized crime. I'm not going to continue to pay the payments. And anyways, it was a big clusterfuck.

Ed (5:50)

So you got it back?

Scott Galloway (5:51)

Yeah, but it had the GPS pulled out of it. I guess the first thing they do is pull the GPS so you can't track it. This is like 20 years ago. But anyways, the moral of the story was it happened Halloween night, and I was chasing after a car. A starship commander, Jean Luc Picard.

Ed (6:05)

That is a good moral to this story. You're like Aesop. That's a Scott Galloway fable.

Scott Galloway (6:13)

There you go.

Ed (6:14)

Many lessons to be learned.

Scott Galloway (6:16)

There you go. What's going on with you?

Ed (6:18)

Let's see. I'm not going out tonight. I got a birthday dinner for my friend, so we'll just have dinner and I won't be out partying. I assume you're gonna be out late into the night.

Scott Galloway (6:28)

I am, except I'm going on. It's such a bummer. I'm going on Freed Zakaria tomorrow morning, so I can't get fucked up.

Ed (6:33)

You like being hungover for the media appearances?

Scott Galloway (6:36)

I never like being hungover. I like my voice. I didn't drink last night, so my. My voice sounds like yours. It sounds kind of weak and feeble and.

Ed (6:44)

Right.

Scott Galloway (6:44)

But when I drink a lot the next day, I sound like, you know, Luke, I am your father. Scan your emotions. You know this to be true. That's my one invitation. You want to see my. You want to hear my other great impersonation or imitation? Please. This is Dr. Evil. How about. No.

Ed (7:12)

That'S good.

Scott Galloway (7:13)

That's good. And by the way, I am so sick of people saying they like you more than me. I am definitely funnier than Ed. I am definitely funnier. Anyways, get to the fucking headline.

Ed (7:26)

Okay?

Scott Galloway (7:27)

Stop dicking around here.

Ed (7:28)

Yeah, it's my bad. That's really? My bad. Okay, New York, I got a lock in. Huh?

Scott Galloway (7:39)

Now is the time to buy. I hope you have plenty of the wherewithal.

Ed (7:46)

Most of the Magnificent Seven reported earnings last week. Overall it was a strong quarter with Microsoft, Alphabet, Amazon and Apple all beating expectations on the top and bottom line. So big week, Scott. Let's just go through these companies one by one. We'll start with Alphabet. Let's see here. Beat on top and bottom lines. Revenue up 16% to $102 billion. Crushed it on YouTube revenue, crashed it on search revenue which actually accelerated. Cloud revenue up 34%. The stock rose 8%. It's up 48% year to date. Best performing big tech stock of the year so far. Just as predicted. Your reactions?

Scott Galloway (8:25)

The Google Cloud is emerging as the preferred platform for AI workloads. So essentially the Google cloud is becoming known as sort of the AI cloud. And over 70% of existing cloud customers now use Google AI products and the company. I mean their Google cloud backlog hit 155 billion. That's up 46% not year on year, quarter on quarter it was up 82% year on year. Just nothing short of extraordinary here. These are companies well positioned, who's made forward leaning investments, who have outstanding management. The interesting thing that the team pulled together is they saying that these firms are flipping from asset light to asset heavy. Essentially they're becoming utilities of the information age. I used to say there were toll booths. I guess the makinder way to say it's their utilities Meta. Microsoft and Alphabet are each allocating a larger share of revenue to CapEx and the average global utility. And historically these kind of Capex super cycles have signaled lower returns on capital. We'll see. But the capex growth at Microsoft year on year is up 74%, Google 83% meta 128%. Because the market is rewarding these forward leaning investments believing that similar to the cloud, the more you invest early the better the leverage and the revenues later on. Look, there's just nothing. It's like you can't even the naysayers and the people that are glass half empty like me are having trouble finding anything that isn't outstanding about these earnings.

Ed (9:56)

I just want to keep going down through the list here. We also saw Amazon which also beat on the top and bottom lines. Revenue rose 13%, AWS grew 20%, beat expectations. They added almost 4 gigawatts of new power capacity. Ad revenue grew 24%, shares rose more than 10%. So Amazon was another big winner in these tech Earnings. I know that you are bullish on Amazon at the moment. I am too. Trading at 31 times earnings right now. The five year average for Amazon is 59 times earnings. So trading at a historically low multiple considering its history. Quick reactions to Amazon.

Scott Galloway (10:38)

The little thing in here that stood out to me was the Trainium 2. That's Amazon's in house AI chip. I didn't even know they had a fucking in house AI chip has become a multi, multibillion dollar business growing 150% quarter on quarter. It's just. And they too have also raised their capex dramatically as the market responds to these forward leaning investments. Essentially these companies are sort of replacing or supplanting government's big bets that typically were sequestered only to government and now that the government's spending all of its money on interest, interest rate payments and you know, making sure our seniors are taken care of, they don't have the capital to make these forward leaning investments. And these companies do, which in some ways is really great. It's good for the economy. The question is, are they the type of technologies that leak out into the general public? Right. When the government makes investments in vaccines and communications technology like DARPA or GPS for weapons, it melts into the private sector into a variety of companies, medium and small business. Whereas these investments will. The return on these investments will be sequestered again to a small number of companies. But I just, even Apple, I have the new iPhone. I'm not that enthralled with it. Their iPhone sales are up 6% which isn't great, but they guided to double digit iPhone growth next quarter, meaning the numbers look really good. And their gross margin expanded to 47.2%. And I just like to remind people that Apple, which until recently was the most valuable company in the world, has pulled off the impossible. And that is you either have a niche product with high margins or a mass produced product, you know, kind of mass market product with lower margins. Essentially what Apple has done is they have the production volumes of Toyota with the margins of Ferrari. I mean it's just extraordinary. The iPhone is the most profitable product in the history of mankind. That's an actual physical thing.

Ed (12:26)

Yeah, Apple, it was a good quarter beat on top and bottom. Gross margin expanded, shares initially fell, but then they actually popped back up. Only thing I would highlight, you know, iPhone sales growth, which as we covered in one of the daily episodes everyone was super exc because of this third party research about how well the iPhone 17 was doing. IPhone sales actually underperformed in terms of their growth, it was up 6%. That was below expectations. The thing that people that investors were really excited about was the guidance that Tim Cook offered. He said that we were going to see 12% overall growth, sales growth next quarter. So that's why the stock rose. But still the worst performing big tech stock so far this year, up 8% year to date, trading at 36 times earnings, which is significant, significantly higher than say Meta. It's also still higher than Google. So again I'm not super bullish on the stock right now, but let's just keep going through here. Microsoft also an incredible beat. Azure revenue, that's their cloud business, up 39%. The stock dropped, which was interesting I think mostly because they were spending a lot of money on this Capex. They said that the most recent quarter would be $30 billion. In capex it was $35 billion. So investors were surprised by that. But what we are seeing across the board here is massive AI spending. And then the most interesting was probably Meta beat on revenue, did miss on earnings but it was kind of a one time tax thing as we often see. But revenue crushed 26% year over year growth. People are spending 30% more time on Instagram year over year. Everything about that business is killing. But again the trouble is that investors are worried about Capex. Capex is now 38% of revenue, up from 20% just a year ago. There are concerns that they're getting too into the whole AI infrastructure thing. And so the stock fell around 10% and now they're down 29 times earnings. So they are trading the lowest multiple of, of any big tech company right now. If I had to, I mean there are two clearly undervalued stocks right now, Amazon as you've discussed and also I think Meta and the big, the big stat for me is again the time spent on Instagram. You look at Instagram reels now making $50 billion a year. By comparison, the entire US TV ad industry makes 65 billion. So give it a couple years. Instagram reels is going to be bigger than the entire ad industry in the US for television.

Scott Galloway (15:01)

Crazy.

Ed (15:02)

So very interesting. But certainly all these companies are crushing. The question is how does Wall street feel about them? And I think the theme here is if you're spending more than Wall street would like on your AI infrastructure, then that makes investors nervous.

Scott Galloway (15:17)

The only, I mean the company looks overvalued here is Apple which is growing 8% which is good growth for its S and P company. It's not great growth for big tech. And yet they trade. They have the highest multiple with the exception of Microsoft at 36, Microsoft's at 37. I also love the data that you guys have been pulling. Look at their five year average PE versus the PE multiple today and every company is trading at a higher multiple than their average over the last five years because of the historic run up of the markets. Except for Amazon that traditionally the five year average PE has been 59 and today it's trading at 31. So you know when people say, when you talk to young people they will say I like this company and they list the reasons why they like it. I get it. You always have to set that against the valuation, right? At some point any stock is overvalued and at some point every stock, unless it's going to zero, is undervalued. So the thing that retail investors don't spend enough time talking about is okay, all of what you said, good or bad, fine. But now you have to spend as much time doing the work and thinking about the relative valuation. And as Amazon poised most strategically, you know, is the strongest positioning relative to these other firms. Maybe, maybe not. But it looks right now to be less expensive than the others when you look at its growth and when you look at historical trading multiples. So anyways, we're bullish on Amazon. As you mentioned, last year of all these firms we picked Alphabet. And Alphabet as of today is up 62% year on year.

Ed (16:52)

We'll be right back after the break and if you're enjoying the show, send it to a friend and please follow us if you haven't already.

Scott Galloway (17:07)

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Ed (20:26)

We're back with Prof. G Markets for the past year, the leading narrative around AI has been, don't worry, it's not coming for your job. And maybe that will be true in the long run. But right now, it appears companies are telling a different story. UPS has cut 48,000 jobs this year, a shift that it says is driven by automation. Chegg is cutting 45% of its workforce with its CEO citing, quote, the new realities of AI. YouTube is offering employees voluntary exit packages as part of a larger AI reorganization. And Amazon plans to cut up to 30,000 jobs, as Andy Jassy admitted that greater use of AI tools will mean fewer corporate roles. Overall, the company plans to replace more than half a million jobs with robots and eventually automate up to 75% of its operations. So, Scott, there has been this big debate as AI has come onto the scene, which is, is AI going to take your job? And we've heard many opinions, we've discussed this a little bit before, but the tech community seems to have developed kind of unanimity on this idea that it's not going to take your job, or at least maybe it'll shave off some jobs here and there, but the value creation is going to be so great that ultimately it doesn't matter. And it seems that there is this ethos, at least among discussions about AI, that AI is not going to take jobs. And I'm just going to play you quick clip of different leaders making this point. I think, as in the past, what.

Scott Galloway (22:06)

Generally tends to happen is new jobs are created that are actually better, that utilize these tools or new technologies. What happened with the Internet, what happened with mobile?

Ed (22:14)

I think it'll be assistive to people in doing their jobs. You're not going to lose your job to AI. You're going to lose your job to somebody who uses AI. So these are all, you know, fair arguments, but I think it's probably a little difficult to appreciate those arguments if at the same time we're seeing thousands of jobs being cut across the board. And all of these CEOs and all of these leaders are saying, yeah, it's because of AI, we don't need these jobs anymore. So this is a pretty large debate, but I'll stop there and get your reactions.

Scott Galloway (22:46)

So, honest question. Did I steal that quote from Jensen Huang or did he steal it from me? That's exactly what I said. I'm trying to think, did he take that from me or did I take it from him?

Ed (22:56)

Well, he told you he listens to you, right? So maybe Jensen is. Jensen's taking from you.

Scott Galloway (23:00)

Look, I'VE been saying that for a while that AI won't take a job. Someone who understands AI will take your job. And my. And Greg Shoaff, who runs my company section or company I founded, that's trying to help companies in what he refers to as the adoption layer, how to actually implement AI. He called me the next day and he's like, you're full of shit. It is taking jobs. He's like, be clear. He's like, this is going to take jobs. And there's the narrative. If you're the CEO of a company, you can't get up there and say, oh yeah, we're going to absolutely recognize a ton of efficiencies. It just doesn't make for an inspiring all hand hands to say, I got good news. Our revenue growth was 20% and I've got great news next quarter, I think I can lay off a quarter of you. They also don't want to raise the antenna. I have legislators and regulators and Elizabeth Warren and Bernie Sanders who will come in and say the oligarchs have to.

Ed (23:50)

Pay the fair share.

Scott Galloway (23:54)

They just don't need that shit right now.

Ed (23:56)

Stick to Dr. Evil. I think.

Scott Galloway (23:57)

How about no? Anyway, I have said for a long time and I think it's playing out that this is AI, is corporate Ozempic and that is if you're on a board. The CEO presents the plan in Q3 for the, for the next year and he or she comes in and says, here's the plan. We're going to grow our revenues 12% and these are the resources I need to grow the, to grow the company 12%. Do we need to raise capital? Do we not? What's our capex? And we expect to hire 6 to 8% more employees, which should take our earnings up, hopefully 8 to 15%. It was just a given that if you were reducing revenues or increasing revenues, you were going to reduce employment or increase employment. And just the same way that we have been taught that if you want to live and if you have the opportunity because there's a scarcity of salty, sugary and fatty foods, if the food is available, you just eat until you're, you know, you can't eat anymore. And then GLP1 turns off the switch that I don't necessarily need to eat. And what's happened here is AI has for the first time broken the cycle and the kind of the conventional wisdom that if I'm growing, I need more employees. It said, no, you may not need more employees. And the stat you read the other day on profit Mar. That, that just blew my mind was that I think in the retail unit of Amazon, they're projecting that they can double the revenues by 2032 with the same number of people. I mean that, that just spells an explosion in earnings.

Ed (25:34)

Right?

Scott Galloway (25:34)

It has some, it has some, you know, societal implications we've got to deal with, but that's just striking to think about. I think everybody's trying to be Meta right now when they announced that they had grown their revenues 23% with 20% fewer employees. Now the interesting question is, who's next? There's been a lot of companies that have announced layoffs and I asked Mia to do some analysis and say who are some information age companies who have hired dramatically through the pandemic seem to have probably kind of eaten a lot, if you will have consumed a lot of young capital or managers. I remember at one point Amazon was, and Google and Meta were hiring 40% of my MBA class. They were just literally hoovering up people. And I also. And try to find companies that have avoided, haven't had a big layoff yet. So these are the companies that Mia came up with that seem vulnerable right now. And our prediction is that they'll probably announce some pretty significant layoffs in the next three or six months. Etsy, Pinterest, Airbnb, PayPal and HubSpot. But those are the companies that Mia came up with. What are your thoughts, Ed?

Ed (26:46)

It's tough because this whole argument about whether AI is going to take your job has been front and center. And in many cases, the arguments that we heard from those tech leaders are actually correct. It's going to create a lot of value. It's going to probably create new jobs in interesting places that didn't exist before. And that's always been true of any big new technology. What seems to be lacking from the conversation is a recognition of the short term. We all, I think, agree. I agree. I think you agree that over the medium and long term, you're going to see value creation and therefore job creation. We seem to all be unwilling to acknowledge the elephant in the room, which is the short term job destruction, which is what we are now seeing this week and what we have been seeing for several weeks. The fact that Amazon is cutting 30,000 corporate jobs, 10% of the white collar workforce, the fact that intel is cutting 24,000 jobs, Microsoft cutting 7,000 jobs, and all of them, when you get down to it, are doing it because of AI. And it's not just white collar, it's also blue collar because as we just learned from the New York Times this report, looking at Amazon's internal documents, they're planning to automate 75% of their operations, which is going to wipe out more than half a million jobs. They're the second largest employer in America. And if Amazon does it, look at Walmart as an example. They employ 2 million people. Do we really think Walmart's not going to follow suit? So I think what is missing from the conversation is a recognition that actually some people should be very worried about their jobs and some people are going to get laid off. And we can look through history and see this happen time and time again. When you had the computing revolution of the 80s and the 90s, there were entire swaths of occupations that were just deleted. Typists, file clerks, bookkeepers, et cetera. Those aren't interesting or important to us now, but back then it was quite painful. And there are studies that show that some people were able to retool, but the older people actually weren't. Many of them actually just had to retire early. So we saw significantly higher retirement rates and then also dramatically lower earnings among those people. And so we can look at this stuff long term and we can say, yes, we're going to see lots of jobs 30 or 40 years from now. And at a societal level, great. But on a personal level, that's a really long time. So I think what is important and what we will get into in this conversation is, okay, a recognition. Actually, some of you, some of us should be worried and we can talk in sort of broad generalizations about the future and how society's going to prosper. But yes, there will be individuals who get burned because of the AI revolution. And it is worth addressing those concerns and thinking about who's going to get burned. Exactly. And also what they can do about it.

Scott Galloway (30:03)

I don't think it's a bad idea to always be a little bit worried that you're going to lose your job. You don't want it to be create anxiety. You don't want, you know, to be debilitating. But it's never a bad idea to just think, okay, how can I be indispensable? How do I increase my currency in the workplace? And also just to do an assessment, if you figured out a way to kind of have a great remote gig where you don't maybe work four or six hours a day, not the full eight, you add enough value, but you're not really driving value. Just know you may fool your corporation for a year, two years, three years, eventually they figure it out. And AI is creating all sorts of tools now where they can absorb all sorts of data from the frequency of your emails, the content of your emails, you know, your logins, your time on the computer, the type of activity on your computer which they all track. It's scary, but yeah, we are living in sort of a information age Dazz, Germany. And then AI will say, these 300 people don't appear to really be working very much. And so I don't think it's a bad idea to assume there's total transparency into what you're doing. And okay, so what does that mean, quite frankly, if you're not adding that much value, you're not working that hard, eventually they're going to figure it out. Maybe you don't care, maybe willing to lose the job, it's worth the risk. But one, assume they can see everything. And then if you're doing a lot of good work also at that point, assume maybe they don't see everything. And make sure that people around you and your manager and your reviews kind of know the work, the good work you're doing. I just think when people are drawing up these lists, I hate to say it, it's somewhat rigorous, but it's somewhat not. And that is you're going to see a disproportionate, I believe, amount of layoffs in remote workers because they have weaker emotional bonds with the people making these decisions because relationships are function of proximity. But also if you are able to go into your boss or present on how AI is going to impact your group and show 3, 4, 5 dozen actionable steps for more productivity and how you think it can really improve your group's performance, that impression is probably a good impression for them to have or any other technology a good impression of your brand before they drop that list. Yeah, so play offense, not defense. I think trying to hide during layoffs thinking they're not going to notice you is the worst thing possible. Terrible idea. It's the invisible people that get laid off first. It's because they don't know you, they don't care about you, they don't know what you do. The other thing is just emotionally two things. One, recognize a lot of your success and a lot of your failure is not your fault. And you shouldn't take a lot of your success and a lot of your failure personally. And that is these layoffs are pretty indiscriminate and they're going to sure the superstars, someone evangelizing for them will try and save their job and probably will or they'll find something else for them within the company. But a lot of people get laid off. There are very few people. The wealthiest man in New York, Michael Bloomberg, I think he's a wealthiest man. He got laid off from Solomon Brothers. There's just. There's this very. I think I've been fired from every job I ever had. There's just. It just happens. And you should recognize that it's not an indictment on you. It doesn't mean you're not going to be really successful. It's just a natural part of the corporate life cycle. Don't be afraid to ask people for help. Yeah, I just got laid off. I'm looking for a new gig also. This is such a cliche, but maybe think of it as an opportunity to really, really reevaluate where your human capital would be best served. So I think it's an interesting time to sit down, clear your head, go speak to a couple people or a few people, say, this is what I'm good at, this is what I like. These are kind of my financial needs, what's important to me, and brainstorm potentially about an entirely new career. Starting a business, maybe it's sticking in the same industry and just going, doing the exact same thing for a competitor. Maybe it's going back to graduate school. And the other one thing I would say is maybe take a couple days to mourn, but immediately get on to the next thing, whatever that is. Immediately start interviewing, immediately start networking. Be really social, Go out a lot, meet friends. You know, I think if you want to help your career, the best thing you can do over the long term is to be more social. But also, just to be honest, there is going to be a lot of layoffs here. And you know, my fear is that young people. I remember I've had several young people break down and cry when I've laid them off. And I just wanted to figure out a way to say, you got to trust me on this. This isn't that big a deal. You're going to look back on this and you're going to be more upset at how upset you were than what happened here. And also, if it's not working for you here, you don't want to be here. This isn't good for you. If, for whatever reason, fairly or unfairly, the people here in the organization doesn't value your work, you don't want to be here, you want to go somewhere else.

Ed (35:05)

I first just want to clarify who should actually be worried. There is no question AI is taking Jobs, but it might not be taking your job or it might be taking your job. So I think the question you have to ask is like, okay, who is actually at risk here? Who should be worried? So Microsoft had this AI report where they basically did this giant study and looked at all of the jobs that are most at risk of being replaced or having the tasks done by AI. And I just want to go through a few of these jobs because it's important. If you have one of these jobs, the point being you should probably be worried and you should probably be listening and thinking about ways that you can protect yourself. So just going to go through the list here. Sales representatives, customer service representatives, ticket agents and travel clerks, telemarketers, public relations specialists, management analysts. Here are my favorites. News analysts and also market research analysts. So in a lot of ways, me, there are many other jobs that they have in this report, but they are kind of smaller jobs, jobs that don't really have high employment. But the jobs that I just outlined there, these are very, very common jobs in our society today. There are more than 1 million sales representative jobs in America today. There are more than 2 million customer service representative jobs in America today. So these are big, big occupations. They employ a lot of people. And according to Microsoft and I agree with the report, they are most at risk of being replaced. So those are the people who I think you should, if that describes you, I think you have real reason to be worried. We'll come back to what you do about it. Now I just want to go over the jobs that are actually not at risk and which I think are going to be rewarded in the future. So some of the jobs that are described in the report, water treatment plant and system operators, roofers, industrial truck operators, tractor operators. So a lot of jobs that are, that are vocational and that honestly require use of your hands, things where you have to be getting in there physically and have some technical and physical expertise. And then the other side is there's a lot of human care work that is not at risk of AI. So nursing assistants, housekeepers, phlebotomists, massage therapists, those are the kinds of jobs that are least at risk of AI. So when we think about this, you want to think about who are the AI winners. And it's construction, it's physical maintenance, it's healthcare, it's surgery, you know, human care work, vocational, physical, technical work. And then the AI loses. It's all of the sort of, I mean, just think it through logically. It's, it's, it's the, it's the jobs that AI can do. Sales, administrative support, data analytics, computer science, mathematics. Those are all the jobs that are that are most at risk. So I think the question then is, what do you do about it? And if you are an AI loser, I will just go through some of my recommendations that I think are very similar to yours. So the first thing that I would recommend, if you're about to see layoffs, you want to be the person who is close to the guy who decides the layoffs. So what you got to do is you have to identify the decision maker at the company and you have to establish a personal relationship. I mean, Scott, you said it. Don't hide. If you're invisible, then it's very easy to cut you off. Second thing I have on my list here, try to become the AI person. That might mean you adopt some fluency with AI tools. You start using them, it makes your work more productive and more efficient. But also, quite importantly, you want to brand yourself as the AI person. You want to communicate to your peers. I'm the guy who knows about this stuff. And that might mean you start writing blog posts or you talk about it on LinkedIn or you send podcasts to people about AI you want to show to the decision maker, I understand this stuff. So if you're cutting people, you don't want to cut me, because I'm the one who's going to help turbocharge your business with AI. I have two more. Have an opinion. AI is very good at analytics, but it's very bad at having an opinion. So if you can figure out a way to develop a position on issues, if you can weigh both sides of the argument and then ultimately take a side, because AI is bad at doing that. All it says is, here are all the different things that are going on. But if you can be the person that says, yeah, I know all the different paths that we can take as a company, but I believe that this is the one that we should take, because this is my opinion on the issue. That's alpha. That's something that AI can't do. And the final thing here, and it goes back to what you said, and I think it fits with also your career. I think you need to be willing to reinvent yourself. And I don't think you should be ashamed of reinvention. That's what a lot of people are going to have to do here. If you're being laid off at many of these tech companies, you're kind of being faced with this decision of like, do I go out into the market as the same thing that I was that got fired or do I rebrand and do I reinvent? And I think there's a lot of shame in reinventing, but I just want to highlight that many of the most successful people in history completely reinvented themselves. Just some great examples here. Vera Wang, who is the legendary designer, she was a figure skater before she got into design. Martha Stewart was a stockbroker before she became the media mogul. Reed Hastings was a math teacher and then he founded Netflix. Ray Kroc was a door to door equipment salesman before he built McDonald's. My favorite reinventer is Arnold Schwarzenegger, who was a bodybuilder who then decided he wanted to be an actor and then he decided he wanted to be the governor of California and he was able to do all of it. I think that, my point being, there are many people who were incredibly successful who reinvented themselves and who leaned into it, who were not afraid or ashamed to say, I used to be this and now I'm this. And as I say it, I think you're a good example of that too. I mean, you were an analyst and then you said, okay, I'm gonna go to business school and I'm gonna try something completely different. You started companies and then after you started your company, you said, now I'm going to be a professor. And then after you're a professor, you said, now I'm going to be a podcaster. So I think a lot of this is also about reinvention. AI might take your job and let's just acknowledge that. But as you say, take stock of your talents and your abilities and don't be afraid to reshape them, to rebrand them, and to reinvent yourself.

Scott Galloway (42:17)

I think that's right. I think the cautionary tale is that my friends, I have a lot of friends in the hedge fund business or the finance business, and in the aughts, it was sort of the golden age, I'd say, I think like 95 to 2010. I think people look back and say, maybe with the exception of this era in technology or AI, never have so few people made so much fucking money with so little talent than hedge fund managers from 95 to 2010. And that's not to say that they weren't talented, but if you were a really talented lawyer, accountant, you know, actor, whatever, a journalist, you made X. If you were a reasonably talented hedge fund manager from 95 to 2010, I'm not exaggerating, you made 50x. And there are a Lot of people, especially white men, who, if they get the right certification for the first 10, 5, 10, 20 years of their career post college, it's just up into the right. And I'm not exaggerating, when it goes flat or they get laid off or they can't raise their fund or whatever it is, they literally fucking freak out. And I don't mean freak out in a extroverted way. I mean they become paralyzed. And what I would suggest is you have to, if you have to take a pay cut, switch industries, whatever it is, your emotional resilience and not feeling sorry for yourself and not, you know, acknowledging everybody anchors off. They look at the year they made the most money and they think, that's my fair market value. And the next year's fair market value should be 12% more. And right now you could argue every person in AI is wildly overpaid. None of them think they're overpaid. Nobody. I've never had anyone, after a job review and a bonus go, thanks very much. Let's be honest, I'm overpaid. I've never heard anyone say that. It's either like, well, okay, I'm fucking amazing. Thank you for paying me this ridiculous amount of money at a ridiculously young age, but I'm the fucking bomb.

Ed (44:18)

Is there a subtweet or what?

Scott Galloway (44:24)

This is an outrage. It's never like, wow, look, the company's doing great. The economy's strong, we're making a ton of money, and I'm probably making more. You know, my comp's probably above. I've never heard anything resembling that. People anchor off the top and that's okay, fine. But emotionally, recognize in your career you're going to have ups and downs. And the winners are the ones that, quite frankly, endure the downs. They use it as motivation. They get out there, they use it as an opportunity to rethink what they want to do next. And they're resilient. And that's what I worry most about your generation, ed. If you're 35, you've never known anything but a bull economy. The other thing about these people being laid off, these are some of the most remarkably credentialed people in the world. I mean, you gotta keep in mind that the 30,000 people are about to go to whatever it is, the 14,000 or the 30,000 people from corporate and Amazon. 99.9% of the world's population would kill to be the person who just got laid off from Amazon. Why? It means you likely went to an elite university you're obviously very good or you never wouldn't have got a job at Amazon. You have Amazon on your resume. You're now like pissed off because you're not going to make 300 grand a year. You might have to take a job at 220.99.9% of the world would kill to be one of those people that just got laid off from Amazon.

Ed (45:52)

I mean, I see what you're saying, but I slightly take issue with it because I mean, 30,000 of those jobs that are being cut, I don't think the majority of them are making $300,000 a year. Plus, it's not just limited to white collar work and high end white collar work. We are seeing it kind of across the board. We're seeing it with entry level jobs and we're also seeing it. We're going to see it down the road with blue collar work too, which is why this report from the New York Times is so important. The fact that 600,000 jobs are going to be lost and these are blue collar jobs, the fact that they're going to basically replace humans with robots. So I think the question for people, that individual you described, someone who was just laid off, who was sold this story about how AI isn't going to take their job and then they wake up one day and actually AI did take my job and now I'm resentful, I'm angry and I feel that I was lied to. There are going to be not hundreds or thousands of people, but hundreds of thousands of people who are in that position over the next few years. And I think the question is, what do you want to do about that? Do you want to be the person who does flatline? And many of them will. Do you want to be the person who is grieving about the lie of AI and is never unstuck from that position.

Scott Galloway (47:23)

The danger is this flatline and the flatline can come from different places. I've never. What's interesting is what sidelined me and I never would have thought about it. When I lost my mom, it like sidelined. And I wouldn't have thought that that would do it. I would have thought I was so focused on money, I would have thought, okay, a business or going out of business or the market's going down. You know, the dot com implosion hurt, but it didn't take me off track. And the great financial recession scared the shit out of me because I just had a kid. The thing where I should have reached out for help sooner because it almost took me Down. And I didn't expect it was losing my mom. And the reality is all of us are going to face tragedy. It's the only thing I know for certain is that everyone will have joy in their life and everyone will have tragedy. And how you respond to the tragedy is really probably the biggest indicator of your success. Because some people just never recover. They just never. They never manage to get back on their feet. They lose their sense of. Winston Churchill summarized it perfectly. Success is the ability to move through failure without losing your sense of enthusiasm. This was a guy that made the military decision to sacrifice thousands of young Australian men with a total fucking military disaster called Gallipoli. He was responsible for terrible decisions that killed a ton of teenage and early 20s young men. And yet he managed to. He, he. I mean, that would must have been devastating. Maybe it's even a little bit psycho, you know, sociopathic. Not psychopathic, but he managed to believe. I can add value. And I think there's a practice around meditation, maybe seeking therapy if you feel like you're stuck. And also just repeating over to yourself. I remember thinking to myself, I know I'm a great entrepreneur. This company went out of business, but I'm hard working. I'm willing to take risks. I know I got hurt very much a couple times when I was younger because I had women break up with me that I was madly, at least, in love with. And of course, as an insecure young man, the moment they broke up with me, I decided that that was the one, that I would never recover. And being able to look in the mirror and go, I know I can add value to someone's life. I know I'll be a wonderful boyfriend. And also to say, you know, you can add value to a company, you know, you. I think it's really important to just tell yourself that over and over and start manifesting it until you start believing it. And also every day, to just one foot in front of the other. Also, I'm always. This is sounding very, you know, like a bad version of Mel Robbins with a Gen Z and an old man who drinks too much, but use it as an excuse to get really fit. Try and take an hour or two hours a day. Try and limit your alcohol and your THC consumption and use it as a means to get really fit. Because I find just being strong is really good for you emotionally. Try and catch up on some stuff, maybe spend some time. I think try and look at it as, all right, I'm not going to wait around. I'm going to get right on it. But also you will have at least a couple hours free a day. Try and channel that into important activities as opposed to just sleeping in or feeling sorry for yourself or becoming, you know, really getting really into that new porn site.

Ed (50:37)

I can imagine. And just sort of hear the retorts from people say, from someone who just got laid off who would say, oh, so the solution is chin up, be resilient, you know, work out and look.

Scott Galloway (50:50)

In the mirror and tell me I like me to.

Ed (50:52)

Which I say, actually, yes, that is the solution. These soft things that people often kind of poo poo as like, oh, you're just offering some wishy washy advice as to how when it's like this is a structural problem, it's like, well, give me an alternative. If you really want to improve your life, what are you going to do about it? And I agree. I think my generation, I don't know, maybe. I think perhaps we underestimate this generation. So I think we'll see. We'll see what happens and how we react when AI inevitably wipes out a ton of entry level jobs as we are seeing today. My hope is that we will be very creative and resilient and I think I'm actually somewhat optimistic that we will be. But that is the question for young people. AI is going to take your job, potentially depending on what job you have. How are you going to respond to that? We'll be right back. And for even more markets content, be sure to sign up for our newsletter.

Scott Galloway (52:00)

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Of customers engage with AI agents like me. We resolve queries fast, we work 247 and we're helpful, knowledgeable and empathetic. We're built to be the voice of the brands we serve. Sierra is the platform for building better, more human customer experiences with AI. No hold music, no generic answers, no frustration. Visit Sierra AI to learn more. We're back with Profg Markets. Last week, President Trump and Xi Jinping met face to face in South Korea. It was their first in person meeting since Trump's second term began. The result was a trade truce. China agreed to pause its export controls on rare earth elements for a year and in return, Trump cut tariffs on China related fentanyl products to 10%, bringing the overall tariff rate on Chinese goods down to about 47%. But there's still a lot that we don't know, like whether this Truce will affect Nvidia's chip exports or TikTok's future in the U.S. so Scott, Trump and Xi, they met the overall takeaways. The fence or tariff has been reduced from 20% to 10%. So the overall tariff on China is now down from 57 to 47%. America is also going to suspend these port fees that we saw. China is going to end its boycott of the soybeans, which Trump and the farmers were very upset about. China is also suspending these new export controls on rare earth minerals. They said they're going to step up their control on, on the chemicals that are used to make fentanyl. We'll see. But that's the long and short of it. Your reactions to this meeting.

Scott Galloway (55:04)

My reaction is this is a lesson in really poor strategic thinking. And that is the key to one of the keys to strategy when you're negotiating is to really have an accurate assessment of your leverage and their leverage. And I feel this is one of Trump's many Achilles heels and that is he plays, he thinks he's playing with a stronger hand than he is. He thinks he's the biggest customer of China and just can just muscle him around. And we're actually the third largest trade trading partner with China. The biggest is Asiana, the Association of Southeast Asian Nations. Number two is the eu. The EU is more important to China than the US and he acts as if he's their only customer. He's the only member of a club, if you will. So he's never really appreciated that he's playing with cards that he doesn't have. And two, I don't think anyone really game theoried out what is their bazooka. And unfortunately they've learned what it is or they figured it out and they're willing to Use it. And that is rare earth materials. I mean, these things, you know, a single submarine can require 8,000 pounds of rare earths. The F35 jet requires 900 pounds. It's literally a security issue for us if they. And they threaten to not only reduce exports to us, but to put controls on any product that it has, rare earth such that it can't get to a Western nation, which. It didn't take people very long to say this could end the war in Ukraine in a way, we don't want to end it. If all of a sudden the US has an inability to produce many weapons as they thought, because we did not stockpile these rare earth materials on the marginal side, we would cut arms shipments to Ukraine. So they pulled out this weapon. And if you'll notice what they've agreed to. Again, I hate this word framework, meaning we want to pretend this was a productive meeting, but we don't actually know what's going to happen. And the thing that really struck out to me is that it's a one year. They've suspended rare export curbs for one year. That's nothing. That means that, okay, China got some stuff back, they lowered the tariffs. They seem to have come to some sort of. It feels like they're just kicking the can down the road. Meanwhile, their bazooka, I mean, it's not. They put the safety switch back on, but they're still pointing that gun at us. In six or nine months, it's gonna be okay. What if we do, if we don't find. What if they decide to cut this off? They basically said, when you say, I'm only suspending this critical technology or this critical mineral used in your weapons, your cars, and if you don't do it, you know, if we can't figure out a way to get along, we're gonna use it. But this is nothing. But this feels like a very tenuous ceasefire to me. My sense is there hasn't been. And quite frankly, until Trump's out of office, I don't think we're going to have a sustainable, enduring relationship with China. And I'd like to say, well, what about Xi? Xi's probably there for the next 10 or 20 years. He's consolidated power. So I don't, I don't know if this is. This feels like we've avoided an all out economic war at a time where we didn't want to right now. But I don't feel we came away from a lot of this here. Their bazooka is still aimed at us. We Put it off. They've agreed not to fire it for 12 months, which just means in six months we gotta start freaking out about.

Ed (58:29)

It again or we'll start freaking out about it in a month because they'll just abandon it, as we have seen over and over again. I mean, I think that's the problem with these framework agreements and these handshake deals and this press release economy or press release politics is what we have found is that it's very easy to just break these agreements. We keep on seeing this because they don't really put it in writing. Signatures are not put to pens are not put down to paper. We don't see signatures. We don't see contracts signed and people going over the language and understanding what the language actually means. All we see are press releases, which means that the cost of abandoning or doing a 180 on your quote unquote agreement is not that high. Which is why we keep seeing it over and over again. The tariffs go up, the tariffs come down, they're on, they're off. We have a truce. We don't have a truce. They say, oh, we're going to have these. We're going to loosen the export restrictions, but then they're going to tighten them again. Now they say they're going to loosen them again. I think the point being saying the words we're going to suspend these export restrictions for a year is not a powerful or binding statement. And so I think what we could probably expect is that it will not last. And so this is definitely still a problem. The rare earth issue. And I think all that this has done is highlighted China's leverage on the U.S. i mean, none of us really knew what rare earth minerals were like a year or two ago. I certainly didn't. Or at least I knew conceptually what they were, but I didn't know their significance. And I certainly didn't know that China was a major player in that industry. And now we all know China has big time leverage over us. I mean, we didn't even realize how important these things were. But we need these minerals for missiles and for cars and to create chips. I mean, because of those export restrictions, we saw a ton of stoppages, a ton of closures because there was this shortage in rare earth magnets. I mean, Ford had to close down an entire factory in Chicago because they didn't have enough magnets to build the cars because China shut them down. And we all learned Now China controls 60% of the rare earth mining, 80% of the rare earth processing in the world. None of us knew that before, and now we do because they flex their muscles and it has shown, okay, China does have a one up on America.

Scott Galloway (61:08)

So I like what Josh Brown says, and that is you have to always ask what could go right. And just as China figured out workarounds for when they, when we embargoed our highest quality AI chips and they came up with their own LLMs and chips that required less energy, I think there's actually what could go right here is that we figure out different supply sources for rare earths. A good friend of mine who has been in private equity his whole career just took a job with the Defense Department, and his job is to find and invest in companies who reduce our reliance on Chinese rare earth and other critical components that weaken our defense posture. So to the administration's credit, they've been.

Ed (61:50)

Thinking about this retroactively after they realized, oh, oh, oh, fuck, we're screwed.

Scott Galloway (61:56)

You could argue they probably should have figured this out sooner, that we were so dependent upon these things for critical.

Ed (62:00)

Before you launch a trade war, maybe make sure that you have the leverage.

Scott Galloway (62:03)

You're sounding more and more like me, so. But, but you know, the, under the auspices of, again, asking yourself what could go right. Potentially, potentially, we find different, different supply chain here, different sources here. I don't know enough about them. But the investment opportunity, which it was right to come down to, I would love to go further downstream and say, okay, what company, if you're some shitty little company that's in Latin America, I don't know, wherever that's been, that does have the ability to produce these things and these, I guess, these magnets. You got to think that company's getting a lot of attention right now. And it's going to have a lot, a lot of suppliers would love to do business with them because they'll think of them as being a more not being tainted by geopolitical concerns. But this is, Look, I've said that I thought that at the end of the day, by the time Trump leaves office, we're going to end up with largely trade agreements that largely reflect where they were before he came into office, with some higher tariffs. But we will have wrecked alliances, created unnecessary tension, unnecessary risk, and this is all just a massive, it feels like a massive distraction that kind of gets us, I don't want to say it gets us nowhere. I think it gets us backwards and just don't get the strategy here, what they're hoping to get out of this. I do think his instincts around China were Right. I do think we had an asymmetric trade relationship there where they were taking advantage of our open markets and theirs weren't open.

Ed (63:29)

But.

Scott Galloway (63:31)

I had never heard the term rare earth materials till about a year ago. And all of a sudden you find out that we can't produce fighter jets or submarines without them. And our biggest, arguably our biggest adversary or our most powerful adversary controls all of the market.

Ed (63:45)

Right. And by the way, the big question is, did Trump even know what that was before he launched this attack on China? Was he aware of rare earth minerals and critical minerals, and was he aware that we need them for our defense industry and to manufacture missiles and tanks? Did he know any of that or is he only just realizing this now?

Scott Galloway (64:06)

The team of the best players wins and, and there's a couple things we're not focused on. And so is the boring shit underneath the surface that really fucks you. Two thirds of researchers are now saying they're open to moving abroad. So we're about to lose our intellectual capital, which people don't appreciate, and these guys don't appreciate because the effects pop up. You don't even miss the fact that you didn't come up with a new way of pricing derivatives that makes a US bank much more competitive than international. You don't miss. You don't miss. Okay, we're no longer producing the best CT scanners in the world. Right. It just someone else does it. It's now coming out of Siemens because the world's top researchers and mammography or whatever it is, end up at the University of Cologne because they're like, I'm sick of this shit. So when you look at the, generally speaking, if you look at how incompetent some of the higher profile hires have been in the Trump administration, you gotta think it infects at every level. And I just wouldn't be surprised if no one even brought up rare earths until, until it, until they showed up and said, oh, we're embargoing your rare earths.

Ed (65:12)

Certainly what it looks like.

Scott Galloway (65:13)

Well, if you want to see how good a baseball team is or how good an organization is, you look at how clean the dressing room is, you look at the quality of, you know, you look at how, how well run the cafeteria is because it's a general approach and a culture to hiring outstanding people and making sure they feel appreciated and putting in place the right compensation, the right incentives. And if his senior level hires, ranging from a guy who's a vaccine denier to a former TV Fox host, fat shaming People is any indication, or a former head of a wrestling federation is now in charge of the Department of Education and didn't know what AI was. Did you believe that when she was grilled about AI, she called it A1, she didn't know what AI was.

Ed (65:56)

I forgot about that.

Scott Galloway (65:57)

So what do you think the number 2, 3 and 4,000 at the Department of Education who've been hired by Trump are alike? And they just hired this. I mean, anyways, I'm ranting here, but would it surprise me if no one, when they showed up and said, well, we're going to block shipments and exports of rare earth, and someone said, what's rare earth?

Ed (66:16)

And it shows in the way they have negotiated. They launched the attack. They say, we're going to flex our muscles. China flexes their muscles right back. And then suddenly Trump's off in Asia, meeting with Xi Jinping, saying, hey, man, please, please stop. Stop doing what you're doing. Like, you're putting forward a thesis that a lot of people would say, like, oh, you're just being Trump Derangement Syndrome. It's like, just look at the way events unfolded. That is simply what appears to have happened. They didn't realize that China could do what they did, and so then they suddenly started panicking.

Scott Galloway (66:53)

It just reflects poorly on us and our competence. And I think Americans have taken for granted for a long time just the quality and depth of talent we have working for us in our government. And there's a general like, oh, you know, it'll be fun to see what it's like to not have air traffic controllers or all these people, all these employees. You don't realize there's a lot of talented people trying to figure out a way to get your grandfather's prescriptions mailed to him in a rural area. You forget how hard it is to do physical rehabilitation for our veterans. You forget how important it is to have tax laws enforced such we actually have a treasury. You figure out how hard it is to actually, you guide a plane when there's 11,000 planes in the sky concurrently. You know, these people are good at what they do. And a lot of people who have a lot of opportunities to grow into other industries decide they want to work for the government and because they find purpose in it. And we've just taken for granted these folks, their competence, their commitment, the fact that most of them, a lot of them are working below market, some are probably working above market, but many of them are working for below market fees. And I think we're finding out painfully what it means to have a kakistocracy, which means a society run by fucking idiots. And anyways, I'm not back to China. I think we've just kicked the can down the road here. I think Xi knows he's playing with a stronger hand, and Trump has made a rookie mistake in strategy, and that is believing he has assets he doesn't have.

Ed (68:20)

All right, let's take a look at the week ahead. We'll see earnings from Palantir, amd, Uber, Pfizer, Novo, Nordisk, Spotify and Airbnb. We'll also see the results of the New York City mayoral election. And the Supreme Court is set to begin hearing oral arguments on the tariff case on Wednesday. Scott, any predictions?

Scott Galloway (68:39)

Mondami is going to win. And my prediction, though, is that you're not going to see an exodus from the city. I think there's actually one of the most unfortunate things about the city. I think right now is it's become so expensive. There's been so much inflation that the scrappers, really talented, hardworking people in a variety of industries who want to come here and just kind of make it on raw talent and dancing between the raindrops. I think we've lost those people, which will hurt the economy over the medium and long term. That has nothing to do with Mondame. He's going to win. But all these people threatening to leave and corporations threatening to leave, I just don't think that's going to happen. One, I don't think that the structural. He has actually, I don't think he has the authority to make many of the changes that these corporate leaders are worried about. And I just, I've always found that, quote, unquote, whenever people are threatening to leave, that's not when they leave. You know, everyone was going to leave California. And as someone who's in New York a lot, the reason why there's the highest taxes in the world here is because it's worth it. And if you have the money, which these corporations do and these rich people do, I'm not. And I don't think these. It's sort of a mood, a false argument, because I don't think he's going to be able to raise taxes. I don't know if he's going to be able to do it. I think if you look at his actual power, I'm not sure he has the power to do these things. That's one small prediction. But the other prediction just goes back to what we were talking about before, and that is, I think we're going to see significant layoffs and Mia did this work at a variety of other information age companies and our picks were etsy, Pinterest, Airbnb, PayPal, and HubSpot.

Ed (70:22)

This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our Associate producer is Alison Weiss. Mia Silverio is our Research Lead. Our research associates are Isabella Kinsel, Dan Shalon and Kristin o' Donnell Donahue. Drew Burroughs is our Technical Director and Catherine Dillon is our Executive Producer. Thank you for listening to Property Markets from Property Media. Tune in tomorrow for a fresh take on the markets.

Scott Galloway (70:58)

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Ed (71:51)

Thanks to Smartsheet for their support.

Scott Galloway (71:53)

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