The DOJ’s Landlord Lawsuit + Can Trump Buy Greenland?
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Today's number, $900,000. That's the value of the watch Mark Zuckerberg wore as he announced the end of fact-checking at Meta. True story. A boy said to Mark Zuckerberg, my daddy said you're stealing our information, to which Mark responded, is not your dad.

Okay, I have another one. You ready? Okay. Everyone needs to turn on the camera, though. We have all these interns. What's the difference between Mark Zuckerberg and my neighbor Steve? What? Steve is not a cunt. All right.

Wow, everyone's laughing. By the way, because I'm now residing in London, I can say that word. That's really the primary advantage of living in London is I can use that word and it doesn't have the same kind of misogynistic, you know, joie de vivre to it. You need to do it with an English accent there. It sort of softens the blow. Oh, I appreciate that. I'd hear try. I'd like to end your career early and reduce your negotiating leverage for bonus season. Say, well, we're overlooking some of the faux pas you've made. Yeah.

Yeah, maybe later. It says comedy gold. Did you see that watch he was wearing, Scott? That Zuckerberg was wearing? I didn't. I should look at it here. I'll pull it up. Is it nice? I'd like to get your thoughts. I think it's a terrible watch. I think it looks very ugly. What do young aspirational guys want? What is the watch you want? I think we talked about this. You want a Rolex, right? I'll take a Rolex. I think if I could have any watch, I think it would be...

a Patek Aquanaut would be my number one. Patek Aquanaut. Wow. You really know what you're talking about. I don't even know. I don't know anything about watches except back to me, my mom gave me a really nice watch or what felt like a nice watch for me. It was a, believe it or not, it was like a high-end Casio, which in my household was pretty nice. I think it cost 200 bucks. And I was rowing crew. She gave it to me in college, said, after I got through my first year, she said, I'm really proud of you. You know, a nice moment for us. She gave me this nice watch and

And literally second morning in crew practice, I heard like the buckle came undone and I saw the watch. I mean, we're in the middle of a race.

And the watch somehow leapt onto the oar like a spider and then slowly just drifted down the oar until it went into the water. Sucks. Oh, God. It was horrible. I think it traumatized me. I don't think I've had a nice watch for— So what'd you do? You just kept going? Oh, there was nothing you could do. You're in a race, and everyone's dying and about to faint. You don't stop. It's like, my watch! Yeah.

You could. I wouldn't put it past you. That is not the vibe in the middle of a 2,000-meter race and, you know, varsity crew at UCLA. But anyways, and then as I got some money, I started buying Panerais, and that's the only watch I have, except it looks ridiculous on me because I have total women's wrists. It's like, how about some Scott with your watch? It looks kind of ridiculous. You love that watch, though. All right, what are we talking about today, Ed? Well, let's start with our weekly review of Market Vitals.

The S&P 500 declined, the dollar rose, Bitcoin fell, and the yield on 10-year treasuries increased. Shifting to the headlines. Anthropic is reportedly in talks to raise $2 billion in a round that would value the company at $60 billion. That's more than triple its valuation from just a year ago.

It would also make Anthropic the fifth most valuable startup in the US. Quantum computing stocks plummeted as much as 40% after Nvidia CEO Jensen Huang expressed skepticism about the technology's near-term potential.

Speaking at the CES trade show, Jensen Huang said that useful quantum computers are still 20 years away. And finally, Getty Images is acquiring its stock image rival Shutterstock in a deal that will create a company worth $3.7 billion. Shares of both companies surged on the news, with Shutterstock climbing 19% and Getty Images rising 25%.

Scott, your thoughts, starting with this new potential round for Anthropic that would value it at $60 billion. So it feels about right. Anthropic, based on its revenues, would be valued at 69 times. OpenAI trades at 42. I think there's enough drama now at OpenAI. Usually the market leader, essentially the stock market loves the market leader and gives it a premium. So if you have...

Say Lyft is doing a quarter of the revenue of Uber, it will trade at an eighth of the valuation. The market loves big. And I think especially recently, you get extra premium for being the number one because of a lack of antitrust and DOJ action. So this is a little unusual in the sense that

Anthropic is trading at a richer multiple on revenues than OpenAI. And I think that's because Anthropic's association with Amazon and some of the drama most recently at OpenAI. I think people look at Bezos' involvement, Anthropic. It just feels like Anthropic has fewer moving parts right now.

And one of the things I recommend to people is start playing with AI. But also what I do is whenever I prompt open AI, I also prompt Anthropic just to compare and contrast the answers. I like Anthropic. I use it. I find that ChatGPT has more data a little bit. It's like a more robust AI. But for what

I use AI a lot for, and that is brainstorming and help me edit this paragraph. I found Anthropica sort of, if you will, the writer's LLM. It's better at tone in a way. Yeah, absolutely. But this is, Anthropic is my best investment of 2023.

And that is when FTX filed for bankruptcy, I got the bankruptcy filing and I saw that they'd invested 500 million in Anthropic. And I tried to estimate what Anthropic was worth. And I estimated at that time, and I overestimated it was worth 30 billion and that they'd invested a valuation of 5 billion. So I thought, okay, they own 10% of a company worth 30 billion. That's a $3 billion stake on claims against an FTX of the creditors of 9 billion, meaning that

Every claim was worth 33 cents on the dollar of Anthropic stock, and you could pick up FTX claims at 22 cents on the dollar. So the entire justification for my moving in and buying what for me was a fairly large amount of claims against a bankrupt FTX was I thought there was, I discovered this kind of golden egg inside of the bankruptcy filing. And it ended up, I believe, that they'd already sold

their stake in it. But because of the rip-up, or maybe it's not true, I forget, but because of the rip-up in the crypto market since then, obviously that trade has worked out and FTX is about to distribute. But anyways, I feel as if my

People say, well, how do you make money in AI? I figured out a way, if not accidentally, to make money in AI. Cloud only has 2% market share of all the visits to AI chatbots. OpenAI dominates with 89%, followed by Gemini with 7% and Perplexity with 2.3%. What are your thoughts on Anthropic's most recent round?

I think you made the right point, which is that it's interesting that it's got a higher multiple. And I think it's for a lot of reasons. I think the Amazon investment helps a lot. But I think the growth rate is also a huge part of this because, you know, a year ago, they had a run rate of $100 million. And you look at it today, and it's almost $900 million. So they have 9x'd.

in roughly 12 months. Now, if you look at the pure ARR, it still pales in comparison to OpenAI, which is at around $4 billion. But when you just think about the gap between these two companies, a year ago, Anthropic's business was around 15 times smaller than OpenAI's. And today it's four times smaller.

You know, I used to say that these two companies, they're not in the same league. OpenAI is the only guy in AI. But I don't think you can say that anymore. I think Anthropic is catching up. And just culturally speaking...

I think a year ago, people didn't really know what Anthropic was. I don't think people really knew what Claude was either, but that's not true anymore. This is a very popular product. People know what Anthropic is. People use Claude. So, you know, it is an extremely rich valuation. It is a premium compared to OpenAI, but I do think it's warranted because this company has definitely solidified itself as the most credible competitor to OpenAI. So kudos to Claude.

Let's move on to quantum computing. All of those stocks, Regetti and IonQ and all of these quantum stocks that we talked about a few weeks ago, they absolutely crashed when Jensen went out and said that he thinks that this technology will only be useful in about 15, 20 years. Your reaction to the market's reaction to Jensen Huang? It's just incredible that one man can move markets like this. And it's

He has such an incredible reputation as someone who has real insight into technology and knows where the puck is going, having transitioned out of GPUs that made richer graphics for Fortnite into becoming the leader in the hottest tech trend in history and building what kind of pings back and forth between the most valuable and the second most valuable company in the world that is worth more than every stock market with the exception of the Japanese stock market. So this guy can

can absolutely move markets. And also, and I wish I'd bet against this, it just feels like quantum got out in front of its skis, and it's easy to say now, but Josh Wolfe at Lux Capital, who's sort of this big brain in terms of predicting kind of, he has a VC fund that invests in kind of scary, forward-looking shit, like, you know. Deep tech. Yeah, deep tech. I remember him saying, I would always say, what's the most overhyped technology? And he would consistently say quantum computing. Yeah.

So I don't think it's a surprise. It's just weird when you see a high-flying stock get cut in half in one day. It's going to be highly, highly volatile and a little bit drafting off the excitement of

AI, but I don't, this is one of those technologies, this company, if you looked at its multiples, and again, easy to play money money quarterback. It just, it didn't make sense at that. And I would argue even now, if you didn't know it had been cut in half, it still looks dramatically overvalued. Yeah. My big takeaway from this is that the dumb money is on quantum computing, because if you, if you sold this stock, just because Jensen Huang got on the stage and said that quantum is 20 years away, it's

God help you. Because, you know, one, why are you reacting so...

fervently to what Jensen Huang is saying, but two, this wasn't new information for anyone who just reads the news or who even does like a modicum of research. I mean, we said this on this podcast three weeks ago, quantum has potential, but it's a long, long way away. And I'm just astounded that this is news to shareholders in Regetti and shareholders in IonQ and all these other quantum stocks. It's very, very basic fact.

And it reminded me of something that one of my old finance professors told me, and that is the following statistic, which is that the average investor, when they go stock picking, they will actually spend less time deciding which stock to buy than they will on deciding which clothes to buy when they go online shopping.

And I think that's a really important thing to remember when we are investing ourselves, because there's always this tendency to assume that the market is smarter than you, to assume that when Rigetti goes way up or it goes way down, you have this question like, oh my God, what does the market know that I don't? And this is a reminder that actually, a lot of the time, the market is just as clueless as you are. And that's exactly what happened here. Investors

saw this headline from Google about quantum chips. They went out and they found the top quantum stocks on Reddit. And then suddenly Jensen Huang gets on stage and says, hey, this isn't that big of a deal. And then suddenly they start selling like crazy, which tells me these guys actually had no idea what they were buying in the first place. I think that one thing

And I mean, this is a compliment. It's clear looking at you that that is absolutely not true, that you spend much more time on your investments than your clothes purchases. That's no one is ever going to accuse you of that. But what you're talking about, though, is a not a wisdom of crowds, but an ignorance of crowds. And that is past performance is no guarantee of future performance.

This is an endorsement of investing in indexes. And just moving on to Getty Images here, your reaction to a merger between these two stock image companies that we basically never think about, they've been rivals for as long as I've lived, and suddenly they want to merge. You know, just as AI has kind of gone from Amoeba to Tyrannosaurus Rex in what feels like two or three years,

They're smart to bulk up. And the analogy I would use is what AI has done to the image marketplace is pretty similar to what Netflix is doing to everyone else in streaming. And that is everyone else in streaming is like, we just can't compete here and they're moving faster than us. We need to bulk up. We need size. We need to merge and then lay off 50% of people at HQ and cut our costs and just have a more robust offering. And I think that's what's happening here. I think these folks, I think the folks at Getty and Shutterstock said,

We can't beat Germany. We're Russia and we're England, and we may hate each other, but we need to bind together to try and take on Germany because they invaded Poland and they're heading for us right now. Love the World War II analogies. Makes me feel 85. This is a smart move.

And it's entirely inspired by AI. And I'd hate to be in a non-revenue generating role at either of these companies. I think you're going to see pretty significant layoffs here. Yeah. And we keep on seeing this dynamic in lots of different industries. You mentioned the entertainment companies consolidating in the face of Netflix.

Another one would be Albertsons and Kroger, the grocery companies trying to consolidate in the face of Amazon, which didn't go through. And now we're seeing it in stock images of all places.

But I think an interesting question here, because the natural response from regulators is going to be to block this. These are the two largest companies in the stock image market, and it'll create a monopoly in that market. But I would bet that Getty and Shutterstock will make the same argument that Albertsons and Kroger made, which is, well, actually, it all depends on your definition of market.

Because yes, we control 85% of the stock image market. But if you're looking at just images in general or just licensed visual content, we're probably less than 1%. Because as you mentioned, those guys over at Sora and Midjourney and all these generative AI image shops, they're all killing us.

And I feel like that's going to be the big question for the FTC over the next few years is like, how do we define market? Is it the grocery market or is it the overall retail market? Is it the cable market or is it the content market? And that's a pretty tough question to answer. I think that's exactly the right analysis. And I think the FTC, and I'm a huge fan of Lena Khan, Cher Khan, my favorite Star Trek hero, is

But Cher Khan, in my opinion, got this one wrong, and that is she categorized Walmart and Amazon as a different category and said that Albertsons and Kroger are in the same category and they'd be too powerful, not acknowledging that these companies are competing against Walmart and Amazon. I think these guys are doing this out of desperation, not to develop monopoly pricing power.

Because I can tell you when I'm on Sora, I literally go back to those days thinking, I don't think I'm ever going to spend $1,200 for a really beautiful black and white image of Aretha Franklin again, which is the kind of thing I used to do. I'm not joking. I remember the exact image. I forget. I think I was doing a thing on makeup and she had these extraordinary eyelashes.

And I think these guys are going to come under enormous pressure. And I think of that Coca-Cola commercial that was just produced where they used AI to produce the entire thing. I didn't see that. It's okay. It's not as good as the analog stuff and the creatives, but my guess is it cost about, you know, a 40th or 2% or 10% of what a

you know, to bring animators and CGI and all that good stuff. So this is—these guys are under real existential threat. I hope they're allowed—this merger's allowed to go through, because I just would not want to be one of these guys waiting for the knock at the door when Sora comes out with version 3.0 in 18 months, and it's just much better. I did—you know, I was experimenting with it, and it's still a little—

You know, meh, it feels like a computer generating images. But I just wouldn't be surprised if you can say similar to, and maybe you can do this now, in the voice of Bob Dylan, write me a paragraph on this that you'll be able to say in the imagery or in the style of Annie Leibovitz, give me an image depicting the following with these types of emotions now.

What I would argue is this is the appetizer before the main course. And the main course here is that I believe this acquisition will be allowed to go through. And then I think Anthropic or ChatGPT or OpenAI is going to buy this company because they'll use this repository of unbelievable imagery to supplement as unique data that they can crawl and will somewhat give them a bit of a heat shield advantage.

from liability because what you're going to see here, you're going to see a lot of photographers file class action suits or suits against. So for example, Pottery Barn was famous for going to the Italian furniture fair and finding these amazing artisans out of Milan and Florence that were putting together beautiful homewares and furniture and then taking pictures of it, buying one, and then ripping it off.

and basically producing a gorgeous chair for $1,200 instead of $8,000. And the artisanal community was just furious, furious at Pottery Barn, furious at Restoration Hardware. And they all learned when they were called into court to give depositions to say it was inspired by. We didn't copy it, but you're allowed to be inspired by Frank Gehry. You're just not allowed to perfectly copy him.

Anyways, you can see that I think it would make sense for them to have this offering where because they have license from all these amazing photographers, these imagery, and they get some sort of licensing fee, I would imagine, from Getty or maybe Getty's already purchased licenses. So if you type in Scott Galloway, you'll get some images of me and some of them, I can't use many of them because they're from Getty.

And Getty would show up at these events and take a really cool picture. And I'd think, oh, I'd love that. And they're like, oh, yeah, just go to our site. And then I'd have to buy, I'd have to spend, you know, I'm not very famous. So mine was like 50 or 100 bucks to use my image. More expensive now, baby. You know it the most. You know it the most. Thanks for saying that. By the way, I don't know if you noticed, but I had a Pico laser yesterday. So I'm looking especially young and robust. What is that? It's one of the things I do in addition to NAD treatment, testosterone, I

I did PRP shots yesterday on my shoulders. And by the way, I cannot move my left arm right now. So do not ask me to do anything with my left arm. But it's one of those things where I've decided I'm going to live forever and try and look. What does it do? What does it do to your face? Well, dude, look at me. I'm gorgeous. Of course you're gorgeous. But you looked gorgeous last week too. Now it's, I don't know, it's one of these things I pay $1,800 for with a really thoughtful dermatologist who has a signed picture of Jennifer Aniston in his lobby. So I assume he's doing her work. Yeah.

And so he runs his laser of my face and it's really fucking painful. It feels like I'm being pelted with hot sand on my face. And the next day, my skin feels a little bit tight. Like there's some, you know, Swiss gnome behind me with very small hands, pulling the skin back on my face.

The same person who sews my mattress, I think. Anyways, and I feel younger. There's so much ridiculous shit I am doing that I thought I would never, ever do. It's amazing. Every week, you've got something new. That guy, whoever your guy is, must be printing money right now. I think he is printing money. He's a lovely guy, and he does good work. Although, I got some Botox on my forehead, and actually, I'm laughing hysterically right now. You just can't tell. Yeah.

I'm, I, yeah, now I have poison injected into my forehead. Anyways, where were we? Bring us back. What were we talking about? I think we're wrapping up the headlines now, so we'll be right back after the break. I can't feel anything.

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The DOJ has filed a lawsuit against some of America's largest real estate firms, including Cushman & Wakefield, Blackstone, and Graystar. This legal action expands on an earlier lawsuit against software company RealPage, which alleges that the company's rent-setting algorithm enabled illegal price fixing.

That was one of the largest government actions ever taken against a private rental housing company. And now the DOJ claims these landlords use RealPage's algorithm to artificially inflate rents across the country. Scott, we've talked a lot before about how Americans are frustrated with the high cost of housing.

The DOJ looks like it is addressing it. What are your thoughts on this, Piv? My first observation is Cushman, Blackstone, and Greystar. They sound like warring tribes in Dune 3. These are such badass names that should be in a sci-fi movie. But anyways...

I'm a little mixed on this. And I think that as a progressive, kind of the knee-jerk reaction is to a company bad, you know, and rents. Look, we have a housing crisis. I think it's a supply-side crisis. I think that the government should weigh in with subsidies to inspire the market, similar to what they did with chips.

or what have you to just get people building again, and also some sort of legislation that makes it harder for local governments where we put permits in the hands of homeowners instead of civic officials to free up development. We just need more supply. Because I think what it is, is essentially you run this algorithm and you put in the addresses of all your rental units and it says,

Here is kind of the optimal, i.e., the highest rent you could charge based on, you know, it's almost like AI that if you own, and I have some experience with this, I own some rental units in Florida, in Southern Florida. And I thought, oh, I should get this to just run it against our rents. And basically what it does is like, okay, if you're charging market or above market, it says your money good. But if you're not, it encourages you to raise those rents. The problem here is it's information that is asymmetric. And that is the landlord has access to better information.

And as a result, maximizes the rent to their advantage. And so that's why your boss tells you not to talk about your salary. Because the people in charge who have information on everyone's salary, they have advantage. Because if someone's working in the company being underpaid and they don't know they're being underpaid, they don't know that Bob down the aisle is making 40% more for no apparent reason other than maybe he was there longer or came in earlier.

more recently when the market, whatever it might be. So you might argue that is unfair. By the way, we purposely price our units 10 to 20% below what we think is market because I find if you have great tenants, you just hold on to them and it just reduces the amount of maintenance and headache. Anyways, enough virtue signaling. So institutional investors are

are about 25% of the residential market. And these landlords named in this DOJ case manage approximately 12%. Now, if they had real concentration in a market and they were all using the same software, then you could argue this is technically leading to price fixing. This, to me, doesn't feel necessarily right.

There's enough concentration or power to engage in price fixing, and that they're basically just using analytics to optimize their pricing. And this is a bit of a populist movement, but I don't know if legally this holds true.

I think the government plays a role here, but it's increasing the supply. To me, I don't understand how the economics here add up to price fixing. What are your thoughts, Ed? Yeah, I'm going to take the other side of this. As a renter. Exactly. As a renter. As the landlord. I'm the landlord. You're the renter. Guess what we think about this issue. I love that. Exactly.

So those six firms in that lawsuit, they own 1.3 million rental units across America, which I believe is a lot. And I think the thing to focus on is the trend that is happening. Because in 2002, investors made up around 12% of all residential real estate transactions. And today, they make up 25%.

And it is projected that by 2030, investment firms will own 40% of the single-family rental units in America. So that is a huge trend. And what I've always felt with housing, where rents and prices are going up astronomically, is that, yes, of course, there must be a supply issue. There must be an issue with we don't have enough houses. But I've always felt there's got to be something else.

And that's why I really like this lawsuit, because this basically gives us the hard evidence of, yes, there is something else going on here. And it is the fact that you have these six gigantic firms that are buying up as much property as they can, and they have all of these things on their side. As you mentioned, they have this real page algorithm, which leverages their exclusive access to all of this data that we regular people don't have. And they use that to algorithmically extract

as much rent as possible. In addition, they also have some evidence that these companies have been directly collaborating with each other to raise rents. And to your point on the legality of this issue, I think that that probably holds more water than saying, hey, you can't all be using this extremely powerful tool that the regular people don't have access to. But having said all of that, we're talking about it from a legal perspective. You know, what is the true legality of this situation?

But I would say that this might just go beyond legality because I feel like today, if we're living in a world where people can't afford to buy homes or even rent homes...

then these questions of legality start to go out the window. Just some stats here. In the past four years, the cost to rent a single-family home has risen 30%. So rent is rising faster than inflation. It's rising faster than wages. And this is in combination with the fact that the prices of homes, they're rising higher than ever. And the medium home price is nearly half a million dollars today. So it's difficult to rent, and it's nearly impossible to buy, which just tells me that

that who cares about the legality of this? Someone needs to be doing something about this because this is becoming the most sensitive topic in America. And I think the last thing you want, if you're Blackstone or if you're Cushman and Wakefield or if you're Greystar, is to basically be unanimously labeled as this enemy of the people. And they're increasingly beginning to look like that, at least from my view, as a lowly renter. I think there's some really good points in there. So first off, let's just acknowledge there's a housing crisis and

And that is, if you're a young couple trying to get your life started and you just have absolutely, you know, rent is just eating up your entire paycheck. And it is just so hard for you to move out of your parents' house. And almost the American dream has become a fantasy.

So we know at least a minimum, a big part of it is just a supply problem. We just need more homes built. Now, the argument you might make, so there was a proposed legislation or a movement last year to get institutional investors out of home ownership full stop. Right, Roe Connors, right? That if you own more than 100 units, you have three years to divest, thinking that more competition would give them less market power. Now, what people forget is that

One, we have very strong private property laws. And when you limit the amount of capital going into something, keep in mind, there was someone selling that unit to someone else. And that person made money and made more money by virtue of the fact that institutional capital had come in. Also, what people oftentimes rate is a lot of institutional capital has come in and purchased homes, as they did in 2000 to 2007, and then got their asses handed to them

and had to sell all of them and puke all of them into the market, and a lot of people got to buy home. I mean, these institutional investors aren't always the smartest buyers. Colony Capital identified Florida, I believe it's Florida, as a great place and went in and started buying up tons of rental units and then found that maintenance and management was a huge headache and ended up, I believe, selling them at not nearly the gain and maybe even a loss. So there is institutional capital coming into almost every consumer market.

The question is, what could we do to bring down housing prices? And I think legally, if you have 50%, if two companies own 50% of the rental units in, say, Southern Florida, or let's pick another market in Buckhead, Atlanta, and COX is calling COY and saying, wink, wink, we're going to raise prices 8% this year or rents, that's illegal. That's price fixing.

But I get nervous around the unintended consequences of sequestering capital from a market and that it ends up backfiring. For example, rent control in Santa Monica, meant to help renters, right? You can't raise rents. And the problem is no one's building in Santa Monica because there's no economic incentive. So as a result, what's happened is anytime something comes up for rent, usually when someone dies,

It gets 100 applications, and they end up picking that nice white family that makes $400,000 a year for the $800 a month rent-controlled apartment. And it's ended up essentially creating housing discrimination. It's ended up backfiring. There's no new construction happening because there's no economic incentive. So

I think they should look at this and say, are there certain regions where these guys are price fixing and coordinating with each other, which is illegal? But the notion that all institutional capital coming into a market results in higher prices isn't always the case. We need more housing. If you make this asset class really unattractive to institutional capital, you're going to have a lower supply of new housing stock.

Should they be coordinating around pricing? Absolutely not. Now, I agree with you on all of your statements, and I agree that it is more nuanced, but I will just say that there are certain issues where I just don't care about nuance that much. And sometimes I think that can be tactically a good thing. You know, if we're going to call Blackstone and Cushman and Wakefield, if we're going to label them as the big bad wolf, maybe it's not entirely fair. Maybe it doesn't

you know, take into account all of the minor details and all the nuances. But I just feel that there are some issues where you have to be aggressive, you have to be bold, and you actually have to be a little bit emotional. And if it means sort of generalizing these large real estate investment firms in broad strokes, to be honest, I think I'm okay with that.

Because I think the housing issue is so much more important than antagonizing a firm of a couple hundred people. Well, just as an experiment, a thought experiment, the next time you have a dispute or an argument with your girlfriend, I'd like you to say, I'm not interested in nuance. I feel strongly about this. And I'm just comfortable acting out of emotion here. Right.

And just see how that works. Let's report back. I will. I will. If it's a hill I want to die on, I will use that strategy. But just to be clear, though—

You know, you said that the problem would be if these companies are wink-winking at each other and collaborating. That is the accusation. So we'll see if it's actually true or not when this goes to court. They're supposed to compete. They're not supposed to coordinate on pricing. And that is the accusation from the DOJ. I don't know, you know, I don't know if it's right. I don't know if it's true. That will be for the courts to decide. I'm not interested in nuance.

We'll be right back after the break with a look at Trump's Greenland pursuit. If you're enjoying the show so far, hit follow and leave us a review on Proficy Markets. Support for the show comes from the Fundrise Innovation Fund. Think of the five biggest names in AI today. How many of those companies do you own shares of? Probably not many. Maybe...

One, maybe two. Why is that? Because the open AIs and anthropics of the world are still private. That means unless you're an employee or a VC, you're out of luck. So it isn't hard to see why venture capital has been one of the most prized asset classes in the world. But unless you're worth eight or nine figures, you likely don't have access to these funds. The Fundrise Innovation Fund is different. It's already raised more than $150 million. It holds a portfolio of pre-IPO tech companies that are valued at tens or even hundreds of billions of dollars. And most importantly, it's a

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Donald Trump has announced plans to acquire both the Panama Canal and Greenland, citing economic security and strategic benefits as his key motivations. His focus on the canal is partly driven by concerns over the, quote, exorbitant prices that Panama charges U.S. vessels. Meanwhile, Greenland's wealth of resources like oil and natural gas add to its appeal.

Whether any of this is even possible is unclear. The Panama Canal is owned and operated by Panama, and Greenland is a self-governing territory under Denmark. Trump, however, has not ruled out the possibility of using military or economic pressure to gain control of these assets. Scott, we're talking about Trump again. What do you make of this new expansionist strategy from the president-elect? There's so many levels here. I'm just...

I'm pissed off that a president-elect and an unelected official, First Lady Alania, are dominating the news cycle. And I hold Democrats responsible for thinking that it's just so fucking ridiculous they thought President Biden was anywhere near capable of winning another election.

And what's happening now is other than wrapping a Medal of Freedom around Bono for a nice scripted moment, he is incapable of actually responding and being in the news cycle in any meaningful way. He's still the president. And if you didn't know that, you would think Donald Trump is president. And if Barack Obama had been president or Bill Clinton or George Bush had

And Donald Trump was spewing this just fucking nonsense

they would love the opportunity to, from the West Lawn, just bitch slap this idiot and just point out how just fucking ridiculous this is. Just like, welcome to the White House, you moron. I hope you get your act together and understand the importance of the seat you're in. It's just insane. Anyway, this is just stupid. It's not going to happen. The Panama Canal is a small business that's

I don't want to say well-run, but it's benign. It's about a $5 billion business. It just doesn't matter. It's not a threat to anybody. It's not like there's some big security concern there. I don't know where he got this. It's this Gulf of America bullshit. This is just so dumb. Greenland has more...

kind of strategic importance. In almost every Tom Clancy novel that talks about the outbreak of World War III, Greenland ends up being a strategic asset in terms of refueling planes or docking submarines or whatever. It does play an important role, rare earth minerals, but the notion that we're going to show up and start trying to bully. So let me get this, we're threatening action against another member of NATO, Denmark. And what long-term, the meta-analysis here of why this is just so stupid, whether it's World War II or

whether it's trying to expel Hussein from Kuwait, whether it's trying to repel Russians out of Ukraine, whether it's trying to create an economic response to ensure we don't go into a global meltdown economically to COVID. The most powerful thing we have is cooperation. And as strong as America is, it's only about a third of the global economy. We can't do this shit alone. We need allies. And the most powerful alliance in history, the North Atlantic Treaty Organization, is

has kept the peace because there's a general understanding if you attack Finland now, you're attacking all of us and all of us are really strong. All of us have really impressive militaries and together we are an insurmountable force in terms of our information technology, our kinetic power, our leadership, our commitment to democracy and our commitment to working together. We're like siblings that don't get along, but anybody hits you, your brothers are showing up and so are your sisters and we're going to kick the ass of that person. You hit one of us, you hit all of us.

And now what we're saying is, oh, the big brother, Joey, is shitposting and hurting his siblings. So this is not only a waste of energy, not only diminishing our standing in the world, it's just stupid. At some point, our allies are going to decide whether they can even share sensitive information with us.

So I don't, I just find this so childish. It'd be childish if it wasn't so harmful. This is a kid playing and being an idiot, fine. But now he's playing with matches next to a bottle of kerosene. This is just stupid. Your thoughts? Yeah.

Well, I think it's worth just going over the background on this Greenland situation. So Trump actually first proposed this back in 2019, and it was the same proposal. He wanted to buy Greenland from Denmark, who have controlled that island for more than 200 years. And Denmark said no. They said, quote, that is absurd. And then Trump got very angry about it, and then he canceled his visit to Denmark, and then nothing happened.

And so here we are six years later, we're in the same situation. Denmark still controls the island. They're still saying, no, nothing has changed. So my prediction sounds like it's similar to yours is nothing is going to come of this. The only way this would work out for Trump is

is for the people of Greenland to decide to secede entirely from Denmark and then to decide to sell themselves to America, which already sounds crazy and it's even crazier when you realize that the prime minister of Greenland has explicitly said, "We are not for sale." So, the whole conversation to begin with is absurd. Having said that, the notion of Greenland becoming part of America is, to be fair to Trump, I think, actually quite compelling.

because Greenland is highly valuable from a defense perspective because of its location in the Arctic Circle. It's very close to America and Europe, and most importantly, Russia. And also there's this added effect where as climate change is happening, the ice is melting in Greenland, which means that you can now navigate around the Arctic Circle by boat, or at least more so than you could before. But it's also quite valuable from an economic perspective,

And, you know, while the GDP is tiny, they have huge amounts of natural resources. They have 3% of the world's known oil reserves. They have 43 of the 50 minerals that the U.S. government has declared critical.

And so if this did work out in some way, I think it could actually be a good thing for our economy and for Americans. The trouble is just how he's going about it, to your point, which is through threatening and bullying an ally. And I think what we'll learn this year in 2025 is that unlike 200 years ago, where bullying and

conquest was actually quite an effective tactic. I don't think it is anymore. I think it makes people dislike you. I think it makes them not want to do business with you. And the funniest thing about this is we saw it fail six years ago when he tried to do the exact same thing. He tried to bully them. They just said no. And then the whole thing fell through. So my takeaway from this is that this is perhaps a good idea, but as we often see,

God-awful execution. But that's tantamount to saying its geography and its unbelievable oil reserves mean it would be a good idea for us to acquire the kingdom of Saudi Arabia. Okay, I agree with you. It'd be awesome for us to make Saudi Arabia the 51st state, but the Saudis might have a viewpoint around this. And I don't—I have no—

evidence that the Danes are really excited about assault rifles and more Chick-fil-A. I just have, this isn't, you know, we had the Louisiana Purchase, we bought Alaska, but that was kind of a work for everybody. Well, that's the question. Could we ever make it work for everybody in this situation? Could we make it work for the people of Greenland? I think there's probably a world in which you could. I mean, the people of Greenland have said they want independence, but

but they don't have the money to do that right now. So that's why they still rely on Denmark. I think you could, if you really cared about this issue, go in there and figure out a way to say, we want to start a strategic partnership with you. You know, we'll trade goods and we'll invest in your community and

But you don't do it by going in there and saying, hey, we would like to buy you. And then sending your son over in a jacket that says, like, he's acting like... With Charlie Cook. It's like me showing up in a Roman Gabriel jersey when I was nine and pretending I was a quarterback. By the way, Roman Gabriel was an amazing quarterback. I think the most successful Hawaiian NFL player to that point. I used to have Roman Gabriel pajamas. Number 18, Roman Gabriel. Before my dad left. Before my dad left. Sorry.

Don't you love me? Now I fill it with a $900,000 watch. Fill that hole. Look, this oddly kind of reminds me of what's going on with my podcast, my other podcast co-host.

Kara Swisher, who is making noise about assembling a group to buy the Washington Post. This is a great analogy. Sorry, keep going. And I've said to her, I've said, okay, has anyone reached out to the owner, Bezos, to see if he's interested in selling? 100%. I'm like, you're not going to shame Jeff Bezos into selling a newspaper that he spent $250 million on and he's worth $80 billion or I don't know what he's worth now.

And so this all feels like peacocking and posturing. I agree. And I've been a part of as a principal or a board member in a number of acquisitions, divestitures, and sales. And unless you have a publicly traded stock and a massive amount of capital to do a hostile takeover, which usually don't, you know, a lot of times don't work, this isn't how you go about it. It's they reach out and say,

Hey, we love the company. We think there's tremendous, I think together we're much stronger, a ton of respect for what you've built. If you're ever interested, give us a buzz or should we talk? And, but Denmark isn't going to be shamed into selling Greenland. They don't, they don't need to. I mean, this is just not how you get deals done.

And the way you put pressure on someone is, as far as I can tell, is when they're desperate, they need to sell something, they're a forced seller, or they have a publicly traded stock, and you can make a tender offer for the shares. And Greenland does not trade on the NASDAQ. The idea of, you know, the art of the deal, I feel like the response from...

Trump supporters would be like, oh, well, you don't you guys don't know anything about dealmaking. This guy is sort of the king of deals. I think something that would be interesting to do starting January 20th is we should just keep a count of the amount of deals Trump is trying to make.

Because what's going to happen here, I think, is that the deal is going to fall through, nothing's going to happen, but he'll have done something crazy at another time, and then we'll be so distracted about the next thing that we'll have forgotten about this failed deal. So what might be a good idea for us is to just keep count how many deals...

Is Trump actually going to get done? He's had a lot of missteps. Several companies gone bankrupt. He personally has never gone bankrupt. That's a that's a that's misinformation. But he is not by any stretch of the imagination. He was never accepted in the business community in New York. They didn't see him as a serious business person. And at some point, I think a lot of financial institutions didn't want to work with him because he wasn't he was seen as not a reliable partner.

where he's made a shit ton of money is from being, and I think he will make the money, is from being president. - Yes. - True social, I think a stake in true social is worth several billion dollars.

So he's a rich kid who is an outstanding TV star. And an outstanding politician. I mean, I'm not fully with you on downplaying his overwhelming success in... Great political instincts. Yeah. No doubt about it. And he's really leaned into the most profitable way to make money, and that is to be a kleptocrat. Yes. So, yeah. And he was, let's stop talking about this guy. Let's move on.

Should we touch on the Panama Canal at all? Have you ever been to the Panama Canal? I haven't. Yeah. Yeah, either have I. There you go. Next.

Next. Panama City. We should go to Panama City. That's supposed to be a good time. It's supposed to be like kind of a low rent, kind of gritty Miami, which actually appeals to me. Oh, did I tell you I bought a soccer team in Bogota? Bogota? Are you serious? Yeah, I'm an investor. You bought or you invested? Investing. But I like to say bought and owner. That's it. You're out of the owner's box, bitch.

- Bought or invested? Yeah, I'm part of a-- - That's a very important distinction. - I'm part of a investor group buying this team in Colombia. - What happened to buying the Rangers in Scotland? - It's too expensive and it's also, I'm just sick of the weather. I'm gonna buy, let's be honest, this is a vanity purchase. This makes no sense at all.

And I don't have the money to buy a Premier League team or an MLS team, which I think is a total bubble. So I'm going where it's warm and where it's cheap. All right. I can't wait to be there. It's going to be fun. We're going to do a team trip down there, and you'll be very excited to see who my...

Some of my co-owners are. I can't wait. Yeah, exactly. We should do a Prof G Markets special episode pitch side and just maybe commentate on the game. Oh, we definitely have a Netflix series coming. Definitely. With me and Cartagena. Hola! Yo soy Opero. ¿Dónde está la biblioteca? That's going to be great. Let's take a look at the week ahead.

We'll see the consumer price and producer price indices for December, and fourth quarter earnings season kicks off with JP Morgan, Bank of America, U.S. Bank, Morgan Stanley, and BlackRock all reporting. Do you have any predictions? Mia put together some really interesting thoughts on who would be the most successful AI company of 2025. And the prediction is the following. The most successful AI company of 2025 is going to be

relative to where it is now in AI, it's going to be meta. And if you look at the amount of kind of information posted or sort of the fodder, the grist, or the fuel for LLMs, which is data, there's more human data posted to meta than on Alphabet, Reddit, and Twitter combined.

And she also forwarded information saying that they are second in terms of buying NVIDIA's latest GPU, in terms of bulk purchases, only second to Microsoft. And the unbelievable investment they've made in their, is it called their meta glasses or their smart glasses? Yeah.

is starting to pay off. And that is, it's a super hot item. I think you talked about this. It's trending. It's sold out on a bunch of European stores and their investment in micro cameras and VR. It feels like they finally might have a vehicle or a tech product, but it feels like all the moons are lining up for Meta to make pretty big progress in

in AI this year. So anyways, my prediction is that the AI company no one's talking about right now that we're going to start talking a lot about in the context of AI is in 2025 is Meta. I'm with you on that. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Mia Silverio is our research lead. Jessica Lang is our research associate. Drew Burrows is our technical director. And Catherine Dillon is our executive producer.

Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Thursday for our conversation with Andrew Ross Sorkin, only on Prof G Markets.

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