Prof G Markets - Google Dodges a Breakup, China’s Growing Trade With Africa & Anthropic’s $183B Valuation

Episode Date: September 4, 2025

Ed is joined by Jonathan Kanter, Former Assistant Attorney General for the Antitrust Division of the DOJ, to break down the remedies for the Google monopoly case. Then Ed and Scott unpack how Africa became one China’s top trade destinations. And finally, Ed dives into Anthropic’s latest funding round that values the company at $183 billion.  Check out our latest Prof G Markets newsletter Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Prof G Markets on Instagram Follow Ed on Instagram and X Follow Scott on Instagram Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Welcome to Proctuary Markets. I'm Ed Elson. It is September 4th. Let's check in on yesterday's market vitals. The S&P and the NASDAQ climbed amid a tech rally following the Google antitrust ruling. More on that in a second. The Dow was flat. Meanwhile, Treasury yields fell.

on weaker than expected job openings data. Openings fell to their lowest level in 10 months. Strengthening bets that the Federal Reserve will cut rates this month. At the time of this recording, the probability of a cut in September has risen to 96%. And finally, gold hit yet another record high on ongoing tariff uncertainty.

Okay, what else is happening? Google stock soared 9% yesterday on news that the company has dodged the breakup bullet and will get to keep Google Chrome. US District Judge Amit met his order follows his ruling last year that Google illegally monopolized the search market for more than a decade

as a remedy for that monopolization. The judge has now ruled that while Google must end its exclusive deals with Apple, Mozilla, Samsung and others, it can still pay partners for default placement on their products. We don't really know what that means. Google will also have to share

certain search index and user interaction data with competitors. But that is about it. The ruling rejected recommendations from the DOJ, which was great news for Google, also great news for Apple. The DOJ had requested that Google be broken up, that it stopped paying Apple the $20 billion a year it spends to remain the default search engine on Apple devices. Judge Meta rejected those arguments. He wrote, quote, there are strong reasons not to jolt the system and to allow market forces to do the work. In sum, we thought that we were going to have some antitrust enforcement here. That was at least what we were all expecting. That was what the market was expecting. But it appears, no, we're not

going to have much enforcement. The judge has said, essentially, go on and continue as normal. So to help us make sense of all of this, to help us make sense of the remedy, what kind of precedent setting, we're going to bring in former assistant attorney general for the antitrust division of the DOJ, Jonathan Cantor. I will also remind you that Jonathan was the one who originally brought this lawsuit to Google in the first place. Jonathan Cantor, thank you very much for joining us again on Profshy Markets. Good to see you. Good to see you, and it's great to be back. So Google is up almost 10%, or it rose almost 10% yesterday because of this ruling. Just remind us, we've discussed this case before,

We've had you on the podcast, and we've talked about antitrust at large. But remind us what the case was and then what the ruling from Judge Mata is now saying. So there are two separate antitrust cases against Google that we brought at the Department of Justice, and we won both of them. So this particular ruling regarding Judge Meta relates to the search case, and then the second case, which we're waiting on remedies, relates to ad tech. And so happy to talk about that separately. In connection with the search case, the government, along with a whole bunch of state attorneys general, alleged that Google monopolized search doing things like paying Apple billions of dollars to make sure Apple wouldn't work with any of Google's rivals, to make Google the search default on Safari and iPhones and all sorts of other devices, doing the same thing with Android, making it so that a device manufacturer, a phone manufacturer like Samsung, wanted to have Android in the Android Play Store, they would need to also make Google the search default or use the whole suite of Google products.

Google did the same thing with respect to Chrome and with respect to third-party browsers and the like. And so the allegation was that Google did this for roughly 10 years, paid a ton of money each year to lock out competitors and lock itself in. and in the process secured this massive moat around its business, which allowed it to create a monopoly. And it used that money that it got from all that search advertising to pay back to its partners like Apple, billions of dollars in sharing monopoly profits in order to continue locking in its position. And so we brought that case.

We did this massive trial. It took about five years from start to finish. So the Trump administration, the first Trump administration, started the search case. When I was overseeing the Department of Justice, we litigated the search case and we won. And then we handed the reins over to the Trump administration who litigated the remedies, which is the phase we're at right now. Okay. So just as an observer of this, the way I think of you is you kind of revived antitrust. At least that was what it appeared to be happening when you were in charge of the DOJ. And I think people on both sides would agree with that.

And so you bring this case against Google. It's this landmark decision where the judge rules in agreement with you and says, yes, Google is a monopoly, which to us observers was a very big deal. And it was also a big deal to the market. And then suddenly we're discussing the remedies. And I know that the Department of Justice recommended that perhaps Google be broken. broken up. Perhaps Chrome should be spun out or sold. It should be broken away from the company. You know, this is what we're all expecting. And then we get the ruling, and the ruling is basically nothing. I mean, tell me what the ruling is, but my understanding is this ruling basically

doesn't really do anything to Google. Even that exclusive contract with Apple, they can still keep paying Apple to be the default browser? I mean, what has this changed? Right. So the, this is an incredibly important moment in time, right? And so we brought a whole host of antitrust cases. We brought two cases against Google, and we won them both with definitive court rulings, including the search case. We brought a case against Apple, and a judge has already agreed with us that it passes the initial legal test as a sound case. The FTC is litigating in cases against Facebook, and Amazon. And then we have additional antitrust cases against the likes of Ticketmaster and others. Now, this is coming at a time, especially in tech, where we've seen no regulation,

no legislation. Nothing has passed. There's virtually no rules, no guardrails in this country for big tech, whether it's privacy or antitrust or anything else. They are operating and effectively at a lawless society. And so this was the first direct shot on goal. that a court had to impose some rules, not extraordinary rules, not rules that are being applied willy-nilly, impose rules after finding that Google, in the court's words, is an illegal monopolist and behaved like one for a period of up to close to 10 years. And so they had this opportunity. The DOJ gave it a bold but sensible proposal, which would require their divestiture of Chrome and prohibit.

it, for example, Google from paying companies like Apple billions of dollars a year to be the search default. The court, notwithstanding its bold statement that Google broke the law, decided to take a much more nuanced and cautious and, frankly, weak approach to imposing remedies on Google. So now there are some remedies. Google, for example, can't pay Apple or others to be the exclusive search default, although it can pay to be a search default, which is very confusing, and it's not clear how that's going to work mechanically. Google has to share some information with would-be-searched competitors, and the restrictions on exclusivity apply not just to Google search, but to Gemini. It's AI chatbot. So overall, when I think of this,

is, yes, there are a number of aspects of the remedy that are deficient, and I think the court got wrong, and I'm happy to talk through those. But where I really come down is this was a an opportunity, a legitimate opportunity based on a finding of law to hold a company accountable and put guardrails in an industry that desperately needs it. And the court, in the interest of nuance and caution, decided not to do that. And I think that is a disappointment to many. I think what is so surprising, to me at least, is I thought that we had already taken the opportunity. I mean, that is the way I think the market fell, and I think that's the way a lot of people felt, is that the opportunity had been seized,

and that was when the judge said, yes, this is an illegal monopoly. And so it is so surprising to be in this situation. By the way, I remember a lot of people said that I was being too lenient when I was saying, you know, maybe the most appropriate remedy here would be to get rid of that contract with Apple.

But now we've got Apple up 4%. The market's basically telling us, Apple's still going to be getting paid billions of dollars by Google. So not even that happened. And so I guess my question to you is, what happened between the time where the judge said, yes, this is an illegal monopoly and now? Because it seems that those are totally different places to come down. And is it, I don't know what happened.

Did he change his mind? Was it something to do with the way the Trump's DOJ litigated this? Like, what happened in that time period? Yeah, so if you read the decision, what it says is that it appears Google persuaded the judge that the surge of AI competition from the likes of open AI and perplexity and anthropic and massive amounts of money coming in made it such that the court felt it didn't need to restrict Google from paying companies. like Apple, because if it did open AI with backing from Microsoft, Anthropic, with backing from guess what, Google, and Amazon and others would have the money to pay in turn. Now, the court did something interesting, which I, you know, found puzzling, which it said that there are a lot of good reasons why Google should not be able to pay for default placement.

But the court was concerned that if it prohibited payment, it would have a chilling effect on innovation. And companies like Apple might not use that money to innovate. We can put a pin in that because Apple spends more money on stock buybacks every year than it does on R&D. But setting that aside, that little nugget, the court was concerned that the lack of payments would have a chilling effect. But it said that it can revisit the remedy. And so if the remedy that is in place isn't working and competition isn't improving, it can revisit the remedy and perhaps require a ban on payments in the future. I personally think the right thing to do would not to be give Google the monopolist who was found to have violated the law, the benefit of the doubt.

And if anything, you start more aggressive, especially given the longstanding pattern of in a competitive behavior and illegal conduct, and then you modulate back. Right. So, again, that's disappointing. That was the court's rationale, and it is where it is. Now, the DOJ can appeal that. I actually expect Google is going to appeal both the remedy and the underlying decision, notwithstanding the perception that it worked out well for them.

So we may yet go another few rounds here. And then the other interesting piece of this is the court has ordered Google in the Department of Justice to go back and propose a new remedy. that is consistent with the court's decision. But reading the decision, it's confusing. So, for example, how can you prohibit exclusives but then allow Google to pay? So let's say Google picks the amount of money

that's designed to induce exclusivity. In fact, even if not in terms, is that illegal or not? I think there are going to be some challenging questions that the court is invited about what behavior is legal and not. So it's going to get messy and we're far from done.

How do you address the multiple years in which, as the judge clarified and said, Google was operating an illegal monopoly? I mean, in other words, the judge is saying times have changed because we're in the age of AI. But what about all of those years previous where the judge said, yes, this was an illegal monopoly? Is there a remedy for that? Well, that's the issue here, right? So the remedy is supposed to deny Google the fruits of its. violation. And it's supposed to address the monopoly that it has gained and essentially

caused the monopoly to cease. The court declined to do that. Instead, it felt that the onslaught of competition from AI vendors, like the Open AI and perplexity and others, and anthropic, plus the relief that it did put in place would be sufficient in the current age to erode Google's monopoly power. But the thing that concerns me as a former and and somebody who cares about this space deeply is that we need accountability. Companies who break the law need to understand that it doesn't pay, that if the consequences of breaking the law are less than the consequences of violating the law, then they're going to make the decision to violate the law and they're going to view it as a cost of doing business. And so here you had

after generations of lax antitrust enforcement, you have antitrust enforcers who put their lives on the line, their professional lives, that is, and personal lives to litigate this case forcefully. And when, now what message does it send? Companies are looking at this, and they might say, well, if I violate the law,

then if it's only a slap on the wrist, then yeah, it'll be pain. and it'll be expensive in terms of hiring lawyers, but it's worth doing if I get billions of dollars or tens of billions of dollars and upside from having a monopoly. And so I do worry that in the court's effort to avoid chilling innovation,

it will have the opposite effect, which is promoting future violations because the consequences are not significant enough to create a disincentive to engage in the conduct in the first place. It almost feels as if this undoes most of the work that you and Lena Kahn did in years previous. I mean, at least from a technology perspective, if the precedent now is, yes, we will say that you're a monopoly, but then companies think to themselves, well, I doubt we're even going to get punished for this, the same thing that happened with Google could happen to us. doesn't that kind of undo the work you've done

or is that, am I going too far? How do you feel about this on a personal level? I'm of mixed minds, so yes, I am deeply concerned about that and that's, in fact, the upshot of what we were just talking about. On the other hand, I'm not ready to wave the white flag and declare the whole endeavor futile. We want a major case against Google. There's a significant precedent,

and the public had the opportunity to see in a published decision what it did to violate the law and there are a lot of private lawsuits now that are going to ensue. We have a second case against Google in Virginia that we won as well relating to ad tech

and a remedies trial is about to kick off this month in that proceeding. And then you have proceedings in Europe and you have private cases and so this is going to be a longer battle than just one case

And I've, you know, when I started doing this work, it was, you know, about 15, 20 years ago when the idea of big tech violating the antitrust laws was seen as something that was impossible to prove. Right. And when I took the job, I was told there's no way we will ever be able to win in court. And we made it, you know, significant strides on the law. I'm disappointed because I felt like we needed more time to litigate these cases to their compliance. completion, including on remedies, including on appeals. And so now it's up to the current administration to take the torch, and hopefully they'll continue apace. But they're going to be ups and downs. And I, you know, but I think the cause is just too important. Again, I'm pro tech. I love tech. I love innovation. I want to see more investment. I want to see us, you know, in the United States, be the cradle of innovation. And little startup. become the next great big U.S. company. But in order for that to happen, we need to make sure

that the incumbents can't suck up all the oxygen. Yes. And we need to make sure that the technology is safe. We need to make sure that kids can use it. We need to make sure that they're not using their power of manipulation in ways that are harmful to society. And in the absence of comprehensive legislation being passed by Congress, which the big tech companies are depth at blocking, we need to take the shots we have and make them work. And so in that sense, it's disappointing, but it's also not the only shot on goal we're going to have. So much more that we could discuss on this. We're going to have to have you on for a longer segment soon. But we really appreciate the time, Jonathan. Thank you for joining us. Thanks for having me.

That was Jonathan Cantor, former assistant attorney general of the antitrust of of the Department of Justice, also one of the great leaders in American antitrust. It is always an honor to have him on the show. I'm going to switch gears for a moment, and I'm going to point you to Google stock, which rose 9% on the day, added $234 billion in value. I will clarify, the real story here isn't the stock. The real story here is the erosion of antitrust, the consistent deference to big tech that we keep on seeing in the US justice system over and over. However, having said that,

you may remember Google has been our top stock pick this year. I've said this on the podcast many times that Google is way undervalued when you look at every business from search to Gemini to YouTube, the number one streaming platform, to Waymo, the number one autonomous driving platform. This stock had zero business trading at under 20 times earnings as it had been earlier in the year. And as I said, it was really only a matter of time. I think Google is way undervalued right now. If you're thinking about buying Google, I would argue the time to buy is right now. It's gotten crushed year-to-date down almost 20%.

It's trading at its cheapest levels in a decade, 17 times earnings, compared to the S&P, which is trading in like 25, 26. You know, Google, it's a juggernaut tech company, and yet it's being valued today like it was like a dying industrials company. Well, here we are. Since the time of our time to buy Google episode, the stock is up 45%.

We are now at $230 per share, $2.8 trillion market cap, all-time high for the company. So, yes, this is a loss for antitrust. It is a loss for, in my view, the rule of law. But let's be clear, it's a huge win for Google. And so if you bought this year, well, then huge win for the investor as well. After the break, a look at what is happening in China.

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And ask your family eye care professional for SLR Stellist lenses at your child's next visit. We're back with Brofti Markets. Nigeria, South Africa, and Egypt have emerged as China's top trade destinations, with exports jumping by 25% year over year. Chinese exports to Africa have totaled $122 billion so far in 2025. They are on pace to top $200 billion for the first time ever. That is more than double what China sold to Africa just five years ago, and it's now more than what they are selling to the US. Meanwhile, Washington is moving in the

opposite direction. We've reimposed tariffs on 30 African countries, compare that to China, which has cut tariffs on 19 African countries. By the way, in the first half of the year, Africa signed $30 billion in construction contracts with China. That is five times more than last year. So China and Africa are reforming their alliance. But this isn't just a China. Africa story, a bigger shift is happening, and that is many alliances all over the world are being formed, especially with China, but especially not with the US. As we said earlier this year, we are driving the world into each other's arms, and we are seeing this everywhere. The EU just signed its largest ever trade deal with Mercosur. That's the South American trade

block that includes Brazil, Argentina, Paraguay and Uruguay. They've also finalized a deal with Mexico. They are re-upping their bilateral trade agreement with Switzerland. India just signed a trade deal with the Eurasian Economic Union. That includes Belarus, Kazakhstan, Armenia, Kyrgyzstan, and yes, of course, Russia. They've also signed deals with South Africa and Australia. They have new accords with Qatar and Saudi Arabia. Put another way, deals are happening, as we've said, they're just not happening with us. And this is all coming at a very very very important. precarious time. As you probably know, Putin is off in China right now and he's partaking in the Chinese military parade. So there's a lot to unpack here. Let's bring in Scott Galloway. Let's hear

what he thinks of all of this. Scott, good to see you. Good to see you, Ed. I want to get your reactions to this China news, Chinese exports to Africa on pace to top $200 billion for the first time ever, We're seeing huge trade partnerships between China and Africa. We're also seeing what's happening with this Chinese military parade, Putin walking along with Xi Jinping, next to all of those armaments. Your reactions to what's happening with China right now, Scott? Well, in reverse order, she is about to communicate to Trump and the world that my dick is much bigger than yours, boss.

that my Bob Mitzvah is going to have you know Lady Gaga and Dustin Timberlake or whoever the hottest people are and you have fucking Kid Rock I mean he's about to have a party that doesn't feel sad and depressed because

the bottom lies in China they can tell people to show up or they'll kill them that's probably a bit of an exaggeration but my guess is that military parade is going to get more coverage more positive coverage it'll be a show of strength worse it versus Trump's military parade was a show of weakness.

The trade with Africa is very simple. It's us doing exactly what the Secretary of State and our foreign policy are not supposed to do. Africa will probably see a lot of people think over the next 20 or 30 years. I mean, everyone keeps waiting for Africa to happen and it doesn't, but at some point it will. It's very mineral-rich, typically as broadband increases in penetration of these technologies, whether it's AI or cell phone, should give a lot of economies there the opportunity to kind of leapfrog other developing economies. It's, and what you have is essentially the more trade they do, the more likely they are to align politically, strategically, and militarily with China. What you're going to see is China start to open military bases in Africa. and essentially, you summed it up perfectly yet.

There are, ever since this tariff nonsense or this war broke out as a means of trying to inspire more dealmaking, it has worked. Unfortunately, the deals are happening without the U.S. You summarized it perfectly. That is exactly what is going on here. Yeah, seeing it with India too. I want to get your reactions to a truth social post from Trump yesterday. I'm just going to read you the full thing. Quote, the big question to be answered is whether or not President Xi of China

will mention the massive amount of support and blood that the USA gave to China in order to help it to secure its freedom from a very unfriendly foreign invader. Many Americans died in China's quest for victory and glory. I hope that they are rightfully honored and remembered for their bravery and sacrifice. May President Xi and the wonderful people of China have a great and lasting day of celebration. Please give my warmest regards to Vladimir Putin and Kim Jong-un as you conspire against the United States of America, President Donald J. Trump. Well, the first half of that was almost, almost sounded presidential.

It sort of, look, in World War II, so the history of Asia is basically Japan, which is this soft, democratic or elegant country now, but Japan's one of the most warlike cultures in history, and every 50 or so years they get whipped up into a frenzy and going to China and, too. kill millions, if not tens of millions of people. And World War II was, I mean, China wasn't, I don't know if he called him an ally, but he could make that bridge and say, this is a collective victory as you want a World War II, our mutual sacrifice. It almost sounded presidential, and then it feels like Elon.

It was a joke. Well, and then it feels like Elon showed up in a hot topic outfit and said, hey, brother, let's do some K, and then let him finish, and then let him finish the tweet that, what the, I mean, This shit isn't even taken seriously. Oh, and give my regards. It's like you're at home watching porn and you're fucking angry because you're vaping and angry

because you didn't get invited to the cool party and then you start shit posting people in the comments on their Instagram photos because you're not at the cool party. It's just we're in a cacistocracy. Most people don't know what that means, but what it means is a society that puts its village idiots,

it's morons in charge. and I was like to move to solutions we should be quietly not via tweets on the ground transporting and delivering and training F-15 and their pilots and working with our incredible ground aircraft

and radar technology to take the Ukrainian flamingo long-range missile and basically rally our security forces in coordination with NATO and Europe so you take out more and more of Russia's energy infrastructure.

That should be our sole focus right now. If you want to bring Putin to the table and solve this war and go collect your Nobel Peace Prize, it's very easy. Ukraine in the last month has damaged, not taken out, but damaged 17% of Russia's energy infrastructure. Russia is a gas station with no gas if we take out their energy infrastructure.

Their economy literally collapses. It doesn't matter how much she likes Putin if their energy infrastructure is taken out. That should be the sole focus. America needs to stop, you know, barking and crying and whining and just show up with a big fucking stick. I remember when he said he'd solved these issues

within three days of stepping into office. Where are we? Seven months in now? It's unbelievable. I'm going to let you go, but I'm excited to see you tonight. We're going to have dinner. We are.

It's our big team review. We like to get together at least once every three or four years. to express my appreciation for the good work you've been doing and to highlight how Clarice is substance here and you're just the fucking Kim Kardashian riding bobsled on this Joey Bag of Donuts podcast. But you're pretty. We like having you here.

You bring up the street crowd. You're going to help me get into Shamargo later because I'll bring a young good-looking guy. But anyways, you serve your purpose. Okay. All right, brother. Say that to the whole company. Thank you, Scott.

See you know. care, guys. AI startup Anthropic has closed a massive funding round at a $183 billion valuation. That is nearly triple. It's $61.5 billion valuation from earlier this year. The company raised $13 billion in this round, which was well above expectations. They initially set out to raise $5 billion, but they reportedly generated as much as $25 billion. in investor interest.

Okay. Anthropic, we all know it, $183 billion valuation, now the fourth most valuable private company in the world. If you were to include it among public companies too, it would now be the 87th most valuable company in the world. More valuable than Verizon, more valuable than BlackRock, more valuable than Unilever and Adobe. It would be nearly double the value of, Starbucks, it would be more than double the value of Airbnb. So, an absolute behemoth at this

point. And yet, and you probably know where I'm going with this, and yet, you still can't invest. Why? Because it still isn't public. It remains in the hands of private investors. And this goes back to the same theme we keep talking about. We talked about it with Open AI. We talked about it with SpaceX, the best companies in the world are not going public because they don't need to. They don't need the public markets money anymore. There is more than enough money in the private markets to go around. The private markets are so flush with cash to the point where when Anthropic goes out and they try to raise $5 billion, seems like a lot of money. What happens, they end up raising nearly three times more than that, $13 billion. That's how much they raise. By the way,

If this had been an IPO, it would have been the biggest IPO in America of the year. It would have been nine times larger than the next biggest. The biggest IPO this year in terms of the amount of money that was raised was CoreWeave, and that IPO raised $1.5 billion. This private round raised $13 billion. So this is yet another example of the private markets, essentially leapfrogging the public markets in terms of capital and investment opportunity and even maybe significance. I mean, the fact that a private venture round, not even the biggest one of the year,

by the way, the fact that that is nine times larger than the biggest IPO of the year, that's all you really need to know here. Now, let's quickly check in on the investor list, iconic co-led the round alongside light speed and fidelity, many other instruments. institutional investors joining the cap table here, Blackstone, KOTU, Insights, TPG, many, many others. But the most interesting one on the list in our view is the Qatar Investment Authority. Why is that interesting? Well, you might remember a few weeks ago we were talking about how once upon a time Anthropic had been a very anti-Gulf state.

They said they would never raise money from Saudi Arabia. They said it was dangerous for AI companies to, quote, get in bed with the Middle East. And as we discussed on that episode, we said that there was a decent chance that they would abandon that principle. Indeed, they have. They are now in bed with Qatar. The Qatari sovereign wealth fund is now one of Anthropics top investors. Now, to be clear, we don't have an issue with raising money from the Gulf. Many companies are doing this.

There is simply too much money there. money than these startups even know what to do with. But the about face from Anthropic is striking. And it is a good reminder once again that no matter what these companies say, no matter what their mission statements are, whatever their principles are, whatever they will have you believe, the fact remains, money always wins. So a lot of Prof G themes coming together in this story, the explosion of private capital, the explosion of golf state, capital, the decline of the IPO. But most importantly, what this story tells us is, yeah, AI continues to rip, as we all expected. But still, in too many cases, retail cannot invest.

Okay, that's it for today. This episode was produced by Claire Miller, edited by Joel Patterson, and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Our research team is Dan Shalan, Isabella Kinsel, Kristen O'Donoghue, and Mia Silverio. Our technical director is Drew Burroughs. Thanks for listening to Prof G Markets. I'm Ed Elson. If you liked what you heard, give us a follow and join us tomorrow for our conversation with the one and only, Ray Dalio.