Prof G Markets - Wall Street Veteran: The Bond Sell-Off Is A Buying Opportunity

Episode Date: September 29, 2026

Ed Elson is joined by Michael Green to discuss what the bond market is telling us as yields march ever higher. Then, Gil Luria returns to break down what Nvidia’s record stock buyback means for investors and what he makes of the company’s valuation. Finally, Ed gives his take on the next phase of the AI safety debate. Michael Green is the CEO and CIO of Tier1 Alpha Asset Management. Gil Luria is the Head of Technology Research at D.A. Davidson.  You can find more information about Ramp’s data here  Subscribe to the Prof G Markets Youtube Channel  Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [e-mail] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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The show goes up. Welcome to Profi Markets. I'm Ed Elson. It is September 29th. Let's check in on yesterday's market vitals. The major indices declined as the U.S. and Iran appeared deadlocked in negotiations. Brent Crude climbed as high as $108 per barrel before settling around 105. The yield on 10-year treasuries hit another 52-week high. More on that later. and finally, the odds of a rate hike in October, climbed to 70% on Kalshi. Okay, what else is happening? The bond sell-off is deepening.

After President Trump rejected Iran's proposal to reopen the Strait of Hormuz over the weekend, Brent Crude soared to $108 per barrel. U.S. bonds sold off and the 10-year yield climbed towards a 24-year high. Meanwhile, the 30-year yields are now near their highest levels since 2004. European bonds also sold off with French borrowing costs at their highest levels since 2008. Stocks fell across the world as investors grapple with what persistently high yields would mean for the equity markets. Joining us to discuss this, we are speaking with Michael Green, CEO and CIO of Tier 1 Alpha Asset Management. Michael, good to see you again. Welcome back to Profi Markets.

Let's start with yields here, the 10-year coming up close to 5.5. 5.3, it's above 5.2%, 30-year yield above 5.5%. I mean, this keeps on happening. This sell-off doesn't seem to end. What do you make of what the markets are telling us, what the bond markets are telling us, and what does it mean for stocks? Well, unfortunately, I think what it is telling us, is the mechanical properties, as you've heard me, emphasize in prior discussions around passive investing, are now playing out in the bond markets. And this is particularly problematic, because the bond indices that passive vehicles reference was never designed as an investable product. It was not designed to represent a specific risk, which would be appropriate for investment.

Instead, it was designed to represent pure representation. What is the total quantity of bonds outstanding? That means, unfortunately, that there's very little thought that's actually going into this bond sell-off. There's lots of narratives that exist around it, that the United States is running unsustainable, deficits or that France is running unsustainable deficits or that debt to GDP is higher than it has been and that somehow or another explains the sell-off that we're seeing. Unfortunately, that isn't borne out by the facts. If we look at a country like Australia, which has a low debt to GDP, it's experiencing the

same sell-off. You look at countries like Switzerland, which are also running deficits, they're experiencing very different behavior in their bonds, as is China, which is not. part of Western bond index markets. What we are really seeing, unfortunately, is the mechanical byproduct of an investment strategy that says a bond that is trading below par is significantly less attractive in terms of incremental capital allocation as a bond trading above par, even if they're from the exact same issuer.

And so there's no difference in credit risk or anything else. It's simply a function of how we've decided to build the indices. that is creating most of the behavior that we are seeing at this point. It's analogous to the nonsense that occurred or on the dot-com cycle when a similarly improperly constructed equity index brought to light the distortive impacts of passive investing at much lower levels of passive penetration than we are seeing now in the equity markets where my work is well known.

In the bond markets, this is not thought, this is not investment opportunity, This is a mechanical feature of how we've structured the markets, and ultimately we will have to address it. Do you disagree then that the bond markets are telling us something that is relevant about America's fiscal standing? I do disagree with that. I think it is absolutely false that that's what it is telling us.

If it were telling us that we would expect to see credit spread widening in the form of CDS on U.S. credit, that is not widening, that is actually tightening. Likewise, if it was a signal about inflation, we would expect to see that priced into inflation swaps. Once again, they are going the opposite directions, suggesting that inflation is less of an issue. The only thing that we are seeing is the price behavior of the bonds themselves, and it's happening on a global basis. It is not U.S. specific. It is not inflation-centered. It is a mechanical product.

And increasingly, the administration is beginning to recognize this. This is what Scott Bessent is indicating when he says these do not reflect the fundamentals. I guess the question then would be, why is it happening now? Because it does seem to be coinciding something that you might expect, where you might expect that bonds would be reflecting and pricing in more risk associated with higher inflation, which we are seeing associated with what seems to be a less fiscally responsible government that is okay with printing. trillions more dollars, and it's happening now, I guess my question, if we don't think that it is that, then why is this occurring right now? Why are we seeing this sort of mechanical mistake

in the bond market, in your view, currently? Unfortunately, it's directly tied to the Federal Reserve, not understanding what it is actually doing in a market that is dominated by these passive flows. Fed Chairman Warsh has very specifically said, he is looking to the market for pricing signals and for information. Unfortunately, that leaves them completely exposed to the market not pricing fundamental information and instead reflecting the manner in which we choose to invest, which is being done against an improperly constructed index. If it were any of the phenomenon that you were highlighting, if it was indeed fiscal profligacy, we would expect to see the dollar weakening, not strengthening. We would expect to see credit default swaps on the United States

It's widening, not tightening. They are tightening and not widening. This is doing the opposite. The dollar is strengthening, not weakening. We are seeing the opposite of what that hypothesis would suggest. And unfortunately, people want to bury their narrative and maintain their morality where they're saying, this is deserved.

That's not correct. This is mathematical. Do you believe then if yields are mistakenly too high, do you believe then that this is perhaps a buying opportunity in the bond market? I do think it's a buying opportunity, but I think it's important to recognize that a buying opportunity in the process of a mechanical sell-off, you can't know where this is going to stop. You have to ultimately identify the behaviors that will change around it. And again, this is the core problem with a passive investment strategy and a systematic rebalancing.

it has no mechanism for those types of overrides. And so this can go quite a bit further if we continue to maintain our investment strategies in this manner. And if the central bankers don't wake up and recognize that hiking interest rates in no way will address fears of inflation around a war in the Middle East, in fact, it makes it harder for the investments that would ameliorate the conditions of that energy shortage and tightness. This is terrible policy. We are pursuing it without thought, and we're reacting because we want people to like us. That is really what Kevin Warsh is doing. He's saying, I'm going to show that I'm tough and I'm credible, and I want my colleagues to respect me, even as he does exactly the wrong thing.

Is your view that the reason that it is pointless to be raising rates is because it wouldn't address the inflation problem, which is largely a function of what is happening in the Middle East right now, and therefore it's useless? I actually think it's not just the useless. I think it's actually counterproductive. By increasing interest rates, you're actually increasing the fiscal transfers in the United States. More money is going to flow to those who are already resourced and have significant money market fund assets or bond asset, their bill assets, shorter dated securities. They're benefiting from the increase in interest transfer from the U.S. government. If you stop and recognize that the bond market is not a friend or partner of the U.S. government,

but instead an opponent, much like you're an opponent when you walk into a grocery store of the actual grocery store itself. Its objective is to sell you milk at the highest possible price. Your objective is to buy milk at the lowest possible price. If the grocery store were to turn to you and say, you know what, we're done setting prices, we're going to rely on you as the customer to set the price for us, what would happen to the price of milk? It would fall. Likewise, if you walked into the grocery store and said, you know what I'm done negotiating prices?

I'll take whatever price you want for milk. What is going to happen? The price of milk is going to go up. That is what Kevin Warsh has told the bond market. Wherever you tell me prices should be, that's what I'll do. It's a terrible negotiating strategy. It's exactly what I would expect from somebody of Kevin Warsh's caliber. But unfortunately, it's being embraced because it largely plays to the morality that somehow or another, we must be punished for the fiscal profligacy that's occurred before. Would you admit, though, that inflation is still a problem and that it is rising and that if there's anything that we could do in our toolbox to address it, then something like this might help? I want to be very clear. I don't think that inflation at three and a half percent in the middle of a war in the Middle East that's driven oil prices to extraordinarily high levels should be particularly surprising or problematic to anyone. In fact, it would be among the lowest inflationary experiences under those conditions we've ever seen in history. What I think is a real problem is the price level.

And that's what we've talked about in terms of the $140,000 poverty line in the experience that many of your peers are having in which life appears unaffordable. It's not the rate of change of those prices. It's the level of those prices relative to your incomes. And the policy that is being pursued by the Federal Reserve, all else equal will lower the quantity of jobs and job opportunities is available to your generation, while increasing. the income that is flowing to the older generation that already has the assets and will no longer need to sell them because they are receiving an increase in income that you are not benefiting from. So this is unfortunately going to exacerbate and worsen conditions for the younger generation at the expense of the older generation, the exact opposite of what needs to be done.

What do you think it will happen with rates going forward? We had Howard Marks on the show who believes that yields will likely continue to rise, and therefore rates will continue to rise. We've seen this in the mortgage rates, which climbed to 7% for the first time in over a year. Do you think that yields will come down if they're priced incorrectly in your view, or will they keep going up?

I mean, what is your expectation for yields and rates going forward? Well, at the end of the day, rates themselves have to be a non-arbitrash condition around the expectations of future Federal Reserve policy. The Federal Reserve controls the front of the curve. If it takes interest rates to 100%, we are absolutely going to see long-term interest rates much higher than they are currently.

Likewise, if the Federal Reserve were to cut interest rates to 0% again, we would expect to see lower interest rates because the forward path would almost certainly reflect a lower interest rate environment. They are not predicting prices in the classic sense, nor are they establishing them. That's part of the point that I'm making that this is increasingly mechanical in its implementation.

The vast majority of people who will tell you that the US government has issued far too much debt will simultaneously defend the hedge fund basis trade, which is functionally a synthetic increase in the quantity of debt that is outstanding in order to arbitrage some of the pricing differentials that are being created by the inefficiencies that now exist in the bond market.

So unfortunately, most people will tell you a narrative that reflects their morality and their sense that the U.S. government and other governments have behaved in a profligate manner. That has almost nothing to do with the phenomenon that we're observing. These same individuals would have made the exact same forecasts 20 years ago and 10 years ago, and in fact did make those forecasts. Almost nobody predicted the much lower interest rates that occurred over that time period. And by and large, assigned it to quote unquote manipulation, even as most of the manipulation, was actually designed to slightly increase interest rates over that time period through things like quantitative easing, et cetera. That's trying to drive an increase in economic activity. It's not trying to, quote, unquote, suppress interest rates in the way that most people think about it.

What do you think investors should do? If an investor agrees with you that this is what's happening, that it is a mechanical phenomenon that we're seeing in the market due to passive investing and how entrenched passive investing has become to markets, what is one to do about that? Is there a trade? Is there an investing strategy that you think make sense based on that thesis? Well, I think the most important thing to understand is that what we're identifying is that there is a neglected asset, low price, long duration bonds, trading below 50 cents, are something that is by and large ignored by the passive bid. That means that's an asset that ultimately is almost certainly underpriced. It's just a point.

question of how quickly that will be realized. If the Federal Reserve continues to pursue the policies of chasing inflation or chasing a two-year where they've asked the bond market, hey, what interest rate would you like us to pay you, much like that shopping, that supermarket example I gave you, the bond market's response will always be, yeah, we'd like more interest. And so this cycle can continue. Eventually, the Federal Reserve will figure this out. The Treasury has already figured this out, and is trying to take steps in the right direction. This is part of the reason why you see Scott Bessent increasingly trying to make Warsh aware of this phenomenon.

But candidly, I just don't think Warsh is prepared to do that yet, and certainly the other policy, the other members of the Federal Reserve Board, many of whom are political appointees, are very enthusiastic about the idea that they are going to show, somehow another show how tough they are by fighting inflation with a tool that is totally inappropriate for it. All right, Michael Green is CEO and CIO of Tier 1 Alpha Asset Management. Michael, we really appreciate your time and always appreciate your, I think this is, I would say it's a hot take, but it's a very interesting one and one that we will look into. Would you agree with that, that it's a hot take? I think it's an accurate take. I think, unfortunately, that feels like a hot take in a world in which the vast majority of people are operating under a moralistic framework. Okay, Michael Green, we really appreciate your time. Thank you. Thank you.

After the break, the largest share buyback ever. And for even more market's insights, you can subscribe to my weekly newsletter simply put at edwardelson.substack.com. Support for the show comes from AlphaSpace by Yahoo Finance. Instead of bouncing between countless tools and tabs to manage your portfolio, AlphaSpace by Yahoo Finance brings your entire investment workflow into one easy-to-use platform. AlphaSpace by Yahoo! Scout-powered assistant to build a personalized view around exactly what you want to analyze, then syncs it with your portfolio for real-time tracking. You can compare multiple tickers, explore everything from candlestick and line charts to fundamental data, and layer in indicators

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So like any good millennial, I have a love-hate relationship with Gen Z. It's the phenomenon rattling millennials. They just look at you. They want something bigger themselves. lifestyle is a priority. Motivation is being inspired. But regardless of how you feel about Gen Z, it's undeniable that they're changing national politics.

Generation Z is increasingly showing less loyalty to traditional political parties. Many now more likely to identify as independent. So what is going on with the kids? I think the biggest misconception about Gen Z's politics right now is that all of a sudden they're all socialist. That is just not the case. Yeah, yeah, yeah. They are embracing candidates who are offering new, bold ideas.

in the absence of those ideas from establishment Democrats. This week on America, actually, Gen Z researcher, Rachel Jamfaza, joins us to separate Gen Z fact versus fiction. It's not rocket science. And this is, you know, I keep saying, like, young voters aren't that complicated after all. It's pretty simple. Catch us every Saturday on YouTube or wherever you get your podcast.

I'm Phoebe Judge. And for more than a decade, I've hosted the podcast criminal, telling stories about people who've done wrong, been wronged, or gotten lost. cod somewhere in the middle. But while I was starting one of the very first true crime podcasts out there, I was also taking phone calls from my sister, from prison. This fall, I'm going on tour, and I'm telling a story I've never told before, my own. Get tickets at this iscriminal.com slash live. We're back with Profi Markets. Invidia just announced the biggest buyback increase ever. Yesterday, Invidia's board a

another $150 billion in stock buybacks, bringing the total it can spend repurchasing shares to $235 billion. Nvidia expects to deploy all of it in the next 16 months. This marks the largest buyback increase in history, beating Apple's previous $110 billion record set in 2024. Nvidia stock closed up 1.5% on the news. It's up about 21% for 2026. still, it has trailed the rest of the chip sector so far this year.

The Philadelphia Semiconductor Index has increased more than 75% year-to-date. Invidia shares are also trading at less than 17 times forward earnings, which is actually its lowest multiple in more than a decade. So, what does this buyback signal about Nvidia? Here to break it down, we're speaking with Gil Luria, head of technology research at D.A. Davidson. Gil, great to see you again. Let's just start with this buyback, $150 billion.

Is that bullish? Is that bearish? What do you make about it? It tells you the company has a lot of confidence. The waterfall for them is, how much do we need to invest in our business? Designing chips, selling chips, that's not a lot. Then they have a lot of capital that Jensen Wang is deploying across the industry, investing in model companies, neoclouds, optical companies. hugging face for open source,

and safety measures, which they announced today as well. And you still have $200 billion left over. So Colette Press sits there with her spreadsheet and says, well, it's 17 times earnings. If I buy back stock right now, what's the return to my investors? And it's very good. So she's going to deploy most of that capital because they have so much cash left over,

even after pursuing all the different projects they could possibly pursue. So looking at the stock, now trading, as we mentioned, at around 17 times forward earnings compared to precedent over the past several years for Nvidia, that is very cheap. And we were discussing this on our episode yesterday. What do you make of the Nvidia valuation? Because on the one hand, it does seem cheap relative to previous years. But at the same time, this is sort of the ultimate AI stock and the AI market. is in a lot of ways quite frothy, and there are questions about overbuilding and too much supply.

So what do you make of that valuation at this point? The market is telling us something. The market is telling us that for companies like Nvidia, like Broadcom, like Micron, the cycle is almost over. The market does not believe that these companies can continue to grow from here at any significant rate over time. What's interesting is that it's valuing some other stocks in those same realms very differently.

AMD is trading it 40 times, Intel at 60 times, optical companies at 30, 40 times, some other smaller semi-companies as well. So the market is of two faces right now, two minds right now. One is these big companies that are going to capture most of the profits are very big.

We have a hard time believing they can sustain growth, but all these smaller companies or other companies that have different angles and are bottlenecks right now, that for them the cycle can continue. That's internally inconsistent, but that's where the market is right now, and that's okay. That's what creates opportunities. For Nvidia, as you've documented many times on your show,

and there is the challenge of they invest in their own customers. They get that back. They have a lot of influence that they're exerting. And so it's easy to understand why investors would be skeptical that the growth can continue. Having said that, I'll leave you with the thought that, if you believe that the AI compute cycle is going to continue, we're going to build more data centers because the AI products are going to be better and we're going to use them more,

there's very hard to imagine a world where Nvidia doesn't have the biggest profit pool of any of these companies. Something I'm trying to understand about the stock right now is what is actually being priced in. Because on the one hand, maybe it's the fact that this is the company that is the biggest and it has the largest market share and it's competing against all these other companies that have a lot more to gain than Invidia, and Invidia, you could argue, mostly has market share to lose.

So that might be one piece of it. But then, as you say, then there's the other piece, which is that maybe this is more of a bubble concern, maybe investors are pricing in concerns about circular financing and the sustainability of these earnings over the long term.

I guess from your seat, what do you think investors are pricing into that stock right now? What are they most worried about when it comes to Invidia. Yeah, I think it is those two things. There's concerns on the cycle is almost over and there's concern that Nvidia's going to lose share.

Having said that, again, if you step back and look at overall growth rates, Nvidia is going to grow just as fast if not faster than most of those other companies that are trading in far higher multiples. And if you think about what multiples mean, right, 17 times means something, right? If the market is trading right now at 20 or 21 times, traditionally companies grow revenue 5% earnings 8% over a cycle, then that means that the market is expecting Nvidia to grow less than that

over the next three to five years, which again is a fairly easy hurdle for them to overcome and every quarter that we go, and they're still growing 70% plus, it's going to be harder for the market to imagine than the world is going to be such where Nvidia grows less than 5% revenue over a cycle. Yeah, it does seem in that sense

that this might actually be a decent entry point. If you never got on the Nvidia train, and I'm sure there are plenty of people who have been kicking themselves about this over the past five, six, seven years, maybe now's the time. And I guess that would be a good signal, the fact that Nvidia is recognizing that and saying, yeah, now's the time to reinvest in our own stock. Let's get on board the train right now. In that sense, do you think that this is a good move by Nvidia? Jackson Wong's never flinched. There's not been a moment really since 2017 where Jensen Wong has not had very high confidence

that accelerated computing is going to continue to grow for decades. Not three years ago, not two years ago, and certainly not now. In fact, last quarter was the first time Nvidia gave guidance a year out, specific guidance a year out, which tells you that he is actually more confident than ever in his business and his visibility into how his business is going to transpire,

which is what makes it easier for him to say, Colette, buy as much stock as you want, we're going to be 70% plus bigger next year when the market realizes that we will have bought the stock at a low. Where do you see the vulnerabilities in the AI trade right now?

Something that my position has been that there is probably an AI bubble, but it isn't ubiquitous and it isn't affecting everything. Invidia probably would be the example, at least right now. who knows, this thing could whipsore the other direction in a second. But where do you see the vulnerabilities in the AI market right now?

What are some pockets of the market that you believe to be overvalued or perhaps too exuberant? Yeah, I think that's exactly right. I think overall we can all agree that we're using AI a lot more. Companies and consumers are willing to pay a lot more. That is all headed in the right direction, which doesn't mean that there's no excesses. We're seeing excesses. You mentioned circular financing. The amount of leverage used to build data centers is growing to an alarming rate,

and the more we use leverage, the more risky this all is. So some of the points where maybe we're seeing excesses are actually the frontier models. We're not sure that Anthropic and Open AI will be able to capture all the value that they need to justify these valuations. It may be captured by other entities either down the value chain or open source models, open weight models. A lot more of the value can be captured elsewhere. So that's one particular place where there may be some excess.

Another one is the Neo-Cloud model, right? Companies that, you know, Cori is my favorite one to pick on, they borrow at 9% to generate 1% return. That's bad any way you cut it and you don't scale out of that. And maybe they'll get the 5% return at some point, but borrowing a 9% to get 5% return, still not a good idea. The market is distracted by how quickly they're growing, but if they're growing a bad business,

that's a point where I do see some excess and some, unjustified exuberance. So there are more examples like that, but again, overall, we're all using AI a lot more now than we were three weeks ago because of Muse. Because just a little bit of better user interface has compelled a lot of people to use AI models for things that they didn't previously think about. The models are still getting better and the user interface is getting better. So in that front, I think we're still headed in the right direction.

On the subject of the Frontier Labs, NVIDIA also just announced a new AI safety software platform. This is to help developers that are using these or testing these AI agents to help make sure that they don't go rogue. Ramp data shows that companies are buying a lot more AI security software. There is a lot of conversation about AI security, AI safety, and these agents, the Hugging Face incident, and all of these frontier AI lab agents doing not what they're supposed to do, not following their orders. What do you make of this issue and how does it affect your understanding of valuations in the AI market right now?

What does it do to the AI trade? Yeah, so I think we have to talk about what we know and what people are speculating about. What we know is the data models are incredibly powerful and they're very good at hacking systems. It's finding exploits and software, combining them, hacking into system and getting information out of there, or carrying out tasks that we wouldn't want to do. That's what they're very good at. I think the extrapolation from that to total annihilation of humanity is a step too far. And that's what Jensen Wong is saying.

Jensen Wong is saying, no. What we really need to be focused on is get everybody to the table to start using these very powerful models for defensive measures. Let's go through our own code base, find those exploits and shut them down, so a bad actor can't use them. And by the way, it's open AI and anthropic engineers that unleashed swarms of agents. And they unleashed them with not enough governance, not enough guidelines, and very poorly constructed sandboxes. So the responsibility for the harm, to be clear, is on open-an anthropic.

And the fact that they're trying to shun that and pass that along to the government should raise a lot of alarms. because they're the ones that did the damage. What Jensen Long is saying is, okay, let's bring those guys to the table with their powerful models. Let's bring the big banks, the utilities, the big commercial companies, and let them use those most advanced models in order to prevent those hacks from happening in the future. That's the correct way we should be proceeding. Instead of scaring people about the risks of AI having its own mind and taking actions upon itself, AI is not doing that.

It was set up on a mission by some engineers of OpenAanthropic that was open-ended. They were told, do anything you need to accomplish your goals, and they did. Meta is launching its enterprise AI platform. They've just announced this. They also just poached the CEO of MongoDB. MongoDB stock fell more than 20% on the news. Meta seems to be kind of getting its act together when it comes to AI. What do you make of all of the recent developments with Meta?

Their enterprise AI platform, MetaMew, all of that. Yeah, lived by the Zuckerberg, died by the Zuckerberg, right? Just a few weeks ago when they reported earnings and Mr. Zuckerberg was asked, well, how are we going to monetize AI? He gave a very open-ended answer about, well, there's going to be some consumer assistance and maybe there's going to be an enterprise strategy. And investors didn't really have anything to go with at the same time he was increasing

as CapEx. If you remember, the stock went down a lot on those earnings, right? Now we know he only was talking about. Muse is a very compelling consumer product. That is the assistant he was talking about. It does look to be successful. And then on the enterprise side, they made a splash by hiring a public company CEO and saying, hey, look, we can build an enterprise business

to compete with Google Cloud and Azure and AWS because we have the compute. We have the technology wherewithal. And now we have the leadership to take that business forward. So he filled in the gaps that he left open-ended during earnings. And that's why investors have reacted very much. positive. It's like, oh, now it makes sense. You have a consumer strategy and you have an enterprise strategy. All right, Gil Lurie is Head of Technology Research at DA Davidson. Gil,

always appreciate your time. Thank you. Thank you. It's official. The AI safety debate has gone mainstream. Over the weekend, Saturday night live performed a sketch making fun of AI leaders, specifically Dario Amadei of Anthropic. And to be honest, they nailed it. You know, thanks for having me, Michael. I may have been alarming in my recent interviews, but I want to assure you that if we can pressure lawmakers to create guardrails, we will be able to stop me. SNL is pointing out something very important, and that is, for some reason, the AI labs

refuse to take accountability for their own products. They say their technology will end the world, but instead of fixing them or simply shutting them down, they post think pieces online about how other people need to deal with them. In other words, it's not my fault that my own creation is hacking competitors and attempting to scrape government websites. It's your fault, or at the very least, it's your fault for not trying to put a stop to me. Yes, we need regulation, but we also need accountability. If Open AI or Anthropic do anything illegal, which it looks like they might have done, then it's on them to pay the price. That might mean paying significant fines that damage the sustainability of the company, or it might mean jail time.

Depends on the offense, and it depends on the severity. But so far, they seem to think that those laws don't exist. They think it's all kumbaya, and that any harms they might have been responsible for were beyond their control. Well, we all know that that is a load of BS. And that is also why I was heartened to see the following two headlines. Number one, Invidia is launching a software platform that helps developers safety test their agents and stop them from going quote-unquote rogue. That is what accountability looks like. Instead of catastrophizing online, Nvidia built a product to actually solve the problem. And number two, as of this week, OpenAI has paused training of its most advanced models. They will not continue model training

until they have developed sufficient measures that make their products safe. This again is what accountability looks like. The AI safety conversation is a lot easier than we're making it out to be. Companies are still liable for their own products. CEOs are still accountable to their own mistakes. The news from OpenAI is a positive signal that we're moving in the right direction towards responsibility and common sense. Now the question is, what will Anthropic do? Dario Amadeh, balls in your court. Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer.

Our video editor is Brad Williams. Our research team is Dan Chalon, Kristen O'Donohue, and Mia Silverio, and our social producer is Jake McPherson. Thank you for listening to Profty Markets from Profit Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.