Raging Moderates with Scott Galloway and Jessica Tarlov - The Hidden Costs of Trump’s Hollowed-Out Foreign Policy

Episode Date: June 2, 2026

Scott Galloway and Jessica Tarlov break down the latest developments in the Iran negotiations, after reports emerged that Tehran may be opening “other fronts” in response to alleged ceasefire violations by the U.S. and Israel. President Trump is reportedly growing frustrated with Israeli Prime Minister Benjamin Netanyahu, and Secretary of State Marco Rubio faces Congress for the first time since the war began. Meanwhile, Trump has named businessman Bill Pulte as the acting Director of National Intelligence,following Tulsi Gabbard’s departure. This comes despite the 38-year-old former chair of federal mortgage lenders Fannie Mae and Freddie Mac having no national security experience. Scott and Jessica talk about this as a bellwether for the state of Trumpism and its grip on the country’s institutions. Plus: frustrations with Democratic Party leadership continue bubbling up in Iowa, as the state holds an important primary for its Senate and governor races today. Scott and Jessica also preview how the primaries in California, New Jersey, and Montana might go.  Finally, AI company Anthropic preps to go public, and, in the wake of two mass shootings at universities in the state this past April, Florida’s attorney general launches a lawsuit against OpenAI, following allegations that ChatGPT played a role in guiding the perpetrators. For ad-free episodes, exclusive livestreams, and to connect with Scott, Jessica, and the Raging Moderates community, join us at ProfG+ on Substack: https://ragingmoderates.profgmedia.com/ Get The Monday Rage newsletter: https://profgmedia.com/s/monday-rage/ We’re also officially now offering a student and educator discount (50% off) to the Prof G+ subscription on Substack for anyone with a .edu email address. https://www.profgmedia.com/students Learn more about your ad choices. Visit podcastchoices.com/adchoices

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slash audio. That's D-E-E-E-L.com slash audio. Welcome to Raging Moderates. I'm Scott Galloway. And I'm Jessica Tarlov. So tonight is the final stop of our Profji Markets Tour. We'll be live streaming it at 7.30 p.m. from New York where we have a sold-out theater of 1,300-plus people. Anthony Scaramucci will be joining Ed Elson and I. And also, just to tease this, one of my, you could probably guess who it is, but one of my heroes is joining us tonight. And we can't disclose who it is for security reasons. But I hope you tune in for what my live show that I'm super excited about. You can watch it live at 7.30 p.m. Eastern tonight by subscribing now atproptuM. And we're also officially now offering a student and educator discount 50% off to the PropG Plus

subscription on Substack for anyone with a .edu email address link to the offer page in the show notes. And also, if you're interested in what we do and you just, for whatever reason, don't have the money right now, just send an email to info at Propge Media that says, I'd love a subscription and can't afford it right now. And we're absolutely happy to offer you a scholarship or whatever the right term is. All right, let's get into it. Trump says indirect talks with Iran are continuing at a quote-unquote rapid pace while an Iranian news outlet says it is opening other fronts in the war after what they consider to be ceasefire violations by the U.S. and Israel. Trump has also reportedly frustrated with Benjamin Netanyahu.

Okay. Welcome to the work. Welcome to the rest of us. Secretary of State Marco Rubio is also making his first appearance before Congress since the start of the war in Iran. we are in talks, and I say talks with Iran are not like talks with Switzerland. They're very different. They require the use of intermediaries, unfortunately. But there is the prospect before us, which could happen today, it could happen tomorrow, it could happen next week, that for the first time, certainly in my memory, they have agreed to negotiate aspects of their nuclear program that just a month ago or just a year ago,

they were refusing to even mention, much less into discussions about. That is not a guarantee that ultimately will lead to a deal that's acceptable to the Senate or acceptable to the American people. But we'll be able to engage them in a process to truly test the proposition of how far they're willing to go. Such a short memory. He says this is the first time they've engaged in these kinds of talks. And you're like, what about the JCPOA where they were at 3% enriched uranium? Trump pulls us out in 2018. And then they're at 60%.

And we have to strike Fordo and allegedly have to get into the, war. I will say, though, Marco Rubio is the best of the worst, I guess. You know, he's the most competent. He is the most capable. I think when he was at the podium and did the White House press briefing a week, a week and a half ago,

that Donald Trump was happy and that others were sitting around saying, like, yeah, if we could get this guy to do it every day, we'd be in much better position. But this, it could be today. it could be tomorrow, could be next week. Like, they have no idea what's going on. I mean, the Iranian news outlets are reporting that Iran has fully walked away from the table at this point. And what's going on with Israel and now apparently they've paused those strikes in Beirut.

It seems like a pretty big impediment to a peace deal, which is exactly as Netanyahu wants it. Did you see the Axios reporting on this phone call that Trump had with Netanyahu where he says, you're fucking crazy? You'd be in prison if it weren't for me, and everybody hates you now. Yeah, the question I would have is, how does that get leaked unless it's purposefully leaked? Totally purposely leaked. By the Trump administration who's trying to find a fall guy for this. I mean, this is just so insane. I don't think Americans appreciate just how talented the ranks of our government are.

The U.S. government is the best performing organization in history. And all the shitposting of it, and now this incompetence, this decision to trade off competence for failty is coming to roost. Marco Rubio can't get a deal done. The JCPOA had hundreds of people on both sides ironing things out. And now we have to turn to fucking Pakistan to be an intermediary here. You think Pakistan has anything resembling the diplomatic corps that we used to value in the United States? And quite frankly, they, as in Iran, they have all the RIS, all the momentum. We don't give a shit about our people.

They are not in a position to overthrow the IRGC right now, at least as far as we know. We have an ability to resurface our missile batteries. We have all of a sudden found something more powerful than a nuclear weapon and that is their ability to assess. potentially sequester the world economy from the flow of energy by threatening or creating a choking, if you will, the carotid artery of the global economy, the Straits of Hormuz. We might find another artery now, another shipping lane that we can threaten, and the U.S. is pretending that they have anything other than a fucking shitty hand. And meanwhile, pretending they can get anything done after emasculating, neutering, blowing up,

their diplomatic corps hoping they get something 50% as good as the JCPOA was. So this is literally the definition of a quagmire. Going in with a military action while their air defenses were down to further neuter their Navy and their missiles launch capability, fine, I get it. A full-on war thinking that you're in charge here. And also, at some point, we're going to have to acknowledge the putting, putting Tulsi Gabbard in charge of our security apparatus or putting in a, you know, at best, a non-functioning or semi-functioning alcoholic in charge of the FDA.

At some point, people are going to realize the intelligence failure here only rivals Iraq, in that is to not anticipate that they might fire on the Gulf neighbors, that they might go after the strait of Hormuz, will go down as one of the greatest intelligence failure. And some, I think this is incompetence bubbling up. We thought, oh, let's turn a Fox News host into the Secretary of Defense, and it won't affect our ability to wage war or diplomacy in a thoughtful way. And Marco Rubio is essentially, you know, he's an intelligent, thoughtful guy who has twisted himself into a pretzel who stands for abs of fucking looting nothing and is sitting on top of a house of cards. There's no more. We fired our entire Iranian diplomatic corps.

So this is the definition of a quagmire. I think he has, he's constantly pretending that he has cards he doesn't have. You know, I am not hopeful here. The IRGC correctly is like, fuck this. We're just getting more and more power. And maybe we'll pretend to want to do a deal. Fine. But nope, folks, you handed it as something more powerful than a nuclear weapon.

That is a war that is not supported by your people, and we have figured out that we can literally start choking off the global economy, and there isn't anything you can do because your public wants you out. Anyways, I'll stop there. I agree with what you said, and I'm, as you're talking, I'm also playing back your commentary from the start of this war for the first month, you know, four to six weeks, where you thought that this was the right thing to do. And I think that there are a lot of people who are now looking at this saying, like, how did you bungle it so badly?

Right? That it is undoubtedly a better world in which Iran is not moving closer to getting a nuclear weapon or, God forbid, getting it in a few months' time, that, you know, there was military precision, certainly at the outset, taking out huge chunks of the Iranian Navy, depleting missile capabilities. And then it's like everything just stopped, right? that we became frozen in time, essentially. And I don't think it's for lack of interest on the part of reporters in covering what's going on here. But we see no more stories about their oil supply. Didn't we have, you know, 45 to 60 days before the oil would go bad? Right?

And the infrastructure would burst. What happened to that? Right. Are they getting it out in some way that we're not aware of? We also now nothing about the destruction. we wrought. I mean, I get at the stories old that we took out everyone at the Ayatollah's brunch club, but we don't hear anything about the status of the new Ayatollah. We don't hear anything about the makeup of the diplomatic team that is allegedly making progress, quote unquote, with the Pakistanis.

What we do hear about, though, is they're rearming and the real threats that we see from that. I mean, I've said it probably five or six times, so forgive me for being boring, but I think it's a pretty big deal that the vice president of the United States of America, his team is leaking to the Atlantic, that he's concerned about our munitions and how we are going to be able to recover from this. And if we will be in a position to defend ourselves or defend a Taiwan, if China decides to move forward with that. And now Jonathan Swan and Maggie Haberman, who have their book coming out in mid-June, you know, reporting on the fact that the Iranians have like about 60 percent of their missile capabilities still. Israel's doing what they can against Hezbollah, but their proxies

aren't hugely suffering as a result of this. And that was one of our top goals, right? That Iran is the number one sponsor of terrorism, the globe over, that they target the West and they especially target Americans. And we now have a president that says, I don't really care if we get a deal. Like, I get that he gets bored quickly. I know that that has been his attention span issue since the first administration, but it's crazy how little interest there is on such an important global plot line at this point. But again, Donald Trump is a terrible business person. He is a rich kid who, if he'd invested in his inheritance and S&P funds, would be much wealthier than he is now before he was able to monetize the White House and the U.S. government.

And he's just a, he has not taken a basic game theory or strategy course. Yeah, he does want He wants out. He realizes this is a quagmire for him, and it was a mistake to go in. And by the way, people such as myself who supported military action, we can sort of fall back on the notion, well, okay, take out some missile capabilities, strike while the air defenses are down. We have to own this. This is turning into a national disaster of like a rock-like proportions. It's easy to have 20-20 hindsight, but this is especially easy. This was just not worth the risk. And the fact that the intelligence community did not anticipate this, they didn't get congressional approval to have some semblance of U.S. support, that they did not coordinate with their Gulf allies, leaving them exposed. And the notion, when he says, I don't care, what he's trying to do is signal strength, hoping they will want to come to the table and do a deal.

I see almost no reason that the IRGC would want a deal right now. I think they feel like we can have total and complete victory. These guys are going to have to leave with their tail between their legs. There's a lot of money. I mean, there's the $25 billion in unfrozen assets. And then you saw that Jared Kushner and Steve Whitkoff are floating a $300 billion Iranian investment fund so that they can go and build more hotels or whatever they're going to be doing. And yes, you need to support a thriving civil society.

That is really important when you do this kind of state making or whatever we want to call it. But I think they're licking their lips thinking we got 1.7 from Obama and we had to stick at 3% or 3.7% in rich uranium. We could get $25 billion plus extra investment without giving up as much as we did for the JCPOA. Like, sign me up. I mean, this goes back to, again, I understand investments in trying to create, you know, when you trade with an, when you trade with a nation, even if they're not an ally, typically, typically you're less likely to. to go to war with each other. That proved not to always be true when the Germans decided to outsource

an entire energy supply to Russia. But the idea that we're going to invest in a nation that continues to, you know, execute 18-year-olds and blind women and rape women before they're executed such that they don't get into heaven. I'm just not down with investing in new Chipotle's there.

And I don't think the American people would be. As long as the RRGC is there, my view, we should be, there should be economic sanctions. Just to clarify, if it felt this way, I wasn't attacking you for your original position. I was pointing out how much good will they've squandered. I deserve to be attacked. One of the things I don't like about Republicans or some of our leadership is they never own their mistake.

Let me own my mistake. Looking back on what has happened here, it is hard to make a rational case for how in any way, shape or form, this was a good idea. You know, my belief, at least initially, and I'm sounding defensive, is that military strikes to further take their Navy and their missile defenses and their offensive missiles down was a good idea. The fact that the intelligence community didn't have any idea what would happen here. I mean, this is maybe a good segue to our next story, and that is Fannie Mae and Freddie Mac

Chairman Bill Pulte has been named Acting Director of National Intelligence following Tulsa Gabbard's departure. Pulte has no national security experience. The only reason we might know him is that he had an altercation with Treasury Secretary Scott Bassett last fall. Jess, is this the right man for the job? Obviously not, and Trump knows that. I think he's basically just saying the DNI doesn't exist. And it's also, I love that he says he's going to still, that Trump says Pulte is still going to run Fannie Mae and Freddie Max. So now D&I is a part-time job. No other. country is going to willingly share intel information with us with Bill Pulte there. I mean, at least, and I hate to be saying this, but like Tulsi Gabbard served the country

and has handled classified information before. I did not think that she was a good choice for that job anyway. I love that he's one of the people that Scott Bessent has wanted to fight. He said that he wanted to punch him in his fucking face. He's also the guy who said that they should go after Jerome Powell, which is arguably one of the stupider weaponizations of the government that they've done because now they're stuck with Jerome Powell sitting on the board of governors. Like Jerome Powell wanted to retire, follow the grateful debt around, RIP Bobby, and now he's going to hang around for it. I think it's a really bizarre choice. I think he was looking around though and thinking I can only put someone in this acting role who's already.

already been confirmed, and Marco Rubio already has 10 other jobs. So what am I supposed to do at this point? But I think it's quite dangerous that Senator Warner is out with a great statement about the risks of this. And I won't say I was like really surprised because they do a lot of crazy stuff, but I was pretty surprised to see that it was 38-year-old Bill Pulte with no experience in intelligence whatsoever. This again is more and just total, a total lack of appreciation for competence around what are the most sensitive, complex jobs in the world. I mean, at some point do we distinguish between internet influence and actual intelligence experience? But he's not even like good on the internet. Well, investing in companies, which he's done or building a personal brand is not

the same as overseeing the U.S. intelligence community, trying to coordinate amongst, I think it's 18 intelligence agencies, managing classified operations and advising the president on national security threats. Bill Pulte may be, he's a rich kid. He's a rich kid that builds single family homes in Florida. And let's be generous. He's successful in his own right in his own domain. the question is why someone with no obvious intelligence, diplomatic, military, or national security background would be considered for what is one of the most sensitive positions in not only the U.S. government, but in the world, the entire West is dependent upon to a certain extent this individual's ability to gather hundreds of points of information in light and then coordinate them around good decisions. This is not a job you learn on the fly. The margin for error here, is measured in lives, wars, and strategic surprises. And you would think that after getting his ass handed to him, that he might do something smart,

like asking Senator Warner to fill this role for a while and be deeply involved in the selection of the next person. Instead, they get a rich kid who builds fucking homes in Ocala, Florida? I mean, okay, you just unnecessarily put our servicemen and women at risk. You just unnecessarily incentivized the MI6, the Mossad, every security apparatus in the West to stop sharing information with us and coordinating. I mean, the fact that this guy has so little self-awareness to accept a position like this, this entire administration seems to be run by a cocktail of rich kids, but they're incompetent. And America has conflated awareness and TikTok with competence. And the chickens are coming home to Roos, so to speak.

You know, sometimes it's darkest before it's pitch black. Things can always get worse. Tulsi Gabbard at least understood components of the military and military operations. This guy, you know, he knows how to secure sub-zeroes for homes in, you know, Fort Myers. I mean, what the actual fuck this person is in charge of our intelligence apparatus? So it's going from bad to worse. Your thoughts? My thoughts are that even the slightest pushback, which was all that Trump was getting from

Tulsi Gabbard, right? She was someone who's generally non-interventionist and got to that place the hard way, right, from actually serving the country and seeing. the implications of the war in Iraq, Afghanistan, etc. And he didn't like that he had someone on his team with any power who wasn't full-throttled behind what's going on with Iran. I don't know if Bill Pulte has the same affection for Russia as Tulsi Gabbard or, you know, could be hoodwinked by a Bashar al-Assad in the same way as she was.

But this is basically announcing to the world that, you don't take our defense national security teams seriously, essentially. I mean, they are laughing across the world looking at what was just put on truth social this morning, saying, excuse me who, right? Because Fannie Mae and Freddie Mac doesn't mean anything to other world leaders. It's a very inside baseball job that's going on here, right? It's not like, and we make fun of it, that Rubio has to do all of these jobs. But when they say, oh, Marco Rubio is also going to be the National Security Advisor because we're demoting Mike Waltz because of Signalgate, people know who Marco Rubio is, right? And they know what kind of background he is and they think, okay,

well, that's someone that I understand why you would want them to be your national security advisor. I don't think there's anyone thinking Bill Pulte is up to that job. And what will be interesting to see, and they won't have a lot of room to do anything because this is going to be an acting role, so it doesn't have to go through a confirmation process. But what the old school military, you know, centric Republicans do about this? You know what Roger Wicker says? What Mike Rogers says, for instance,

what a Lindsey Graham says about this. So Lindsey Graham has only managed to muster a, you know, war at any cost. And I love being at Disney World by myself in the last few months at least. But I think that there will be Republicans that are going to speak out about this. It won't affect the decision. But I think those who have been willing to say, you know, we have to be briefed, right?

You can't just go about doing this without us. Those who have pushed back to the point that they were going to actually have to consult Congress about this. I think that there will be Republicans who voice concerns about this. And it'll have implications past Bill Pulte's reign as our DNI. You know, countries, they don't forgive and forget. quickly. They are reordering themselves and the global order without us, and this is another notch in the belt of the argument that we are not worth taking seriously. Well, I think you're right. I think the Republican Party is going to Susan Collins this, and they're going to pretend to

be concerned such that they can get a camera. I have concerns about Mr. Polte's background. Where are the cameras? Where are the cameras? And then they will all approve him. Again, I'm I never miss an opportunity to try and sound important. I've been on a bunch of public company boards. And one of the first things you test as a board member, the American public is the board of directors for the president. That's essentially the only person he answers to. He no longer answers to the Supreme Court.

He's packed it. They have supported what are just a series of partisan decisions. So the only check he has, the only oversight he has is the American public. And I hate it when people always say the American public is pure and not wrong. The American public isn't doing its job. They're not providing the sort of oversight and pushback to demand that the representatives speak up about this because it means that we're just going to have more head-up-your-ass decisions that unnecessarily put our treasure and our blood at enormous risk that is unnecessary. I'm being redundant here.

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For 50% less, your first year, go to homeserve.com slash moderates. That's homeserv.com slash moderates for 50% less. Savings compared to renewal price, void in Florida. Welcome back. It's a big primary day, and I want to get your thoughts here. Just one race in Iowa might be impacted by a certain New Yorker. The Democratic Senate primary features state senator Zach Walls,

battling against State Representative Josh Turrick. Wallace has run an anti-Chuk-Schumer rhetoric using the phrase, Iowans over insiders. Just what do you think of this and how are you feeling about minority leader Schumer? We haven't checked in on him for a while. I still don't feel good about Chuck Schumer and think that the window is closing. I mean, obviously, he's going to stay through the midterms. But there have been moments in which, you know,

you think if you really care about what's good for the party, you will take the hint, right? That there are enough people and there are enough, frankly, new candidates and rising stars that are running against leadership to know that it is part of the problem. And it helps also that you're old. So there's a perfectly good reason for you to be like, it's time to, you know, step aside, let the new generation take over. you know, we'll see if AOC decides to primary him or if he's going to run. I mean, it would be smart if you would just retire.

But, you know, Chuck Schumer has not been doing a great job. What's going on with Graham Platner in Maine? And he sells a 60% chance of winning that seat, according to Kalshi. But Janet Mills, not being able to fundraise at all was a big strike against Schumer because he recruited her. It was not anyone's top choice as the kind of establishment candidate necessarily. He still had those big wins, though, in Alaska with Mary Poltola and Roy Cooper in North Carolina and Sherrod Brown in Ohio. This Iowa race, though, is really interesting to me. I like both candidates a lot.

Zach Walls, most people know him from this mega viral speech that he gave in 2011 about equality and his two moms and how his family isn't any different from any other family. And then he got into public service. I think he gave the speech while he was still in college. Everyone was crying, listening to this kid talk about how special and also ordinary his family is and why it is that we would possibly discriminate against a family with two women at the head of a household or two men at the head of a household. Josh Turk, though, definitely has more of the juice at this point. I mean, people are more interested in him.

So he's in a wheelchair. He was born with Spina Bifida. his father served in Vietnam, and the spine of vivaida is a direct result of his father's exposure to Agent Orange. Yeah, so he's being heavily backed by veterans groups, specifically vote vets, and this has become a big point of contention. And the race, some people have been like, oh, well, you know, why he didn't serve? And it's like, dude, he's in a wheelchair because his father served honorably and had exposure to chemical agents because we sent him over there. Josh Turk also is getting a lot of very high profile endorsements. Pete Buttigieg, probably most important, former Iowa Senator Tom Harkin, who's a very big deal in the state.

And actually Harkin married, officiated Zach Walls' wedding and then endorsed Josh Turich. And Chuck Schumer, it's been accused that he's funneling money kind of backdoor to Turuk through other packs. But Turc seems to be the kind of golden candidate for a lot of people. Rubeiago's endorsed Rocana, Cortez Masto, Tammy Duckworth. And it'll be really interesting. Rob Sand, who's at the top of the ticket on the Democratic side for governor. I think he should win that race. I think he really could win that race. And will help, hopefully, a Senate candidate. Maybe people will just be in a democratic mood. Trump is not faring well in Iowa. Huge amount of farmers. They are going bankrupt. They don't like this war in Iran. They want their fertilizer. They don't like tariffs. So it could be a really good environment for Democrats. I'm curious, and I'm asking this question to learn, not to make a comment.

I'm torn between the notion that Democrats are always really good at not falling in line and presenting a disunified front, that, oh, you're holding the gun wrong. So we're going to execute you at dawn as fascists start to run over overwhelm us. So I think the argument around stop ship posting each other, present a unified front, the problem isn't Senator Schumer, it's the corruption of the Trump administration. At the same time, we also probably could benefit from a Trump-like figure in the Democratic Party that quite frankly goes after and disrupts the Democratic establishment and says, look, folks, you have fucked this up. We're at a lower approval rating right now, or we're down somewhere near Trump. I mean, it feels as if democratic leadership is set on snatching defeat from the jaws of victory. You know, I've said this for a while. I think minority leader, Senator Schumer, has served honorably and should leave the stage. I just don't think he's the right person for the moment. I think there should be term limits and age limits on our most important decisions.

And I think he brightens up a room by leaving it. I just think he is not the voice we need to push back on the trial. He's been totally ineffective in my viewpoint. So what are you, what are your thoughts on the 10? between having a disruptor in the Democratic Party, trying to disrupt the traditional incumbent democratic, you know, establishment versus presenting a unified front. Well, I think that having a disruptor is a must if we're ever going to win elections again. And I think it's incumbent upon leadership to accept that, you know, to do like Nancy Pelosi did, where she said, you know, if you want to vilify me and you want to make me a target of your campaign, go for it. If you want me to stand side by side with you and campaign with you and

help you fundraise, I'm happy to do that too. Because the only way you get anything done is if you have the numbers to do it. Right. And that, I think, is a lost art in this new version of leadership. You know, I think Jeffries has been able to get a lot done considering being in the minority. and I think that he will be the Speaker of the House after the midterms where I think that we should perform pretty well. But I think you're totally right about Chuck Schumer. And I think also that a way to get around a lot of the problems that rank and file Democrats and people running for office are having is to put forward a bold, progressive platform that everyone can feel excited about. And that does mean leaving behind some of the timid rhetoric and the timid policies of the past. I mean, you have talked about this for a while.

You can't be afraid of saying I'm for Medicare for all anymore. That isn't a line in the sand between, you know, a moderate or a progressive. Like Ruben Gallego wins in Arizona talking about how we need to have Medicare for all. It's baseline stuff at this point. And you won't be able to correct. a caucus of electives and a caucus of voters that are so rightfully so outraged at income inequality and the cost of living in this country and how ineffective our leaders are at delivering the stuff that makes up the social contract, right? Like you're supposed to be able to afford a decent

life and have a roof over your head and a good enough school and maybe you get to go to Disneyland once a year or whatever it is and have health care. that isn't going to bankrupt you. I mean, you know, raging moderates, right? It's in the title of this. Like, we agree on a lot more than we disagree on. And right now, the populace is united in their outrage at the facts that electeds do not deliver on the basic shit. Let's take one last quick break.

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setting the state for a $1 trillion valuation. However, not all the news in the AI world was good, as the Florida Attorney General filed a suit against OpenAI and CEO Sam Altman over the dangers of ChatGPT. The suit accuses the company of negligence and deceptive trade practices. What, a tech company? I'm shocked.

I'm shocked, Jess. You're blowing my mind. You know all right? The case stems in part from the alleged role that ChatGPT played in the planning of two mass shootings that took place in Florida or at Florida, universities this past April. So this, we're going to raise $150 billion in three IPOs, and to give you a sense of the scale of that, at a $4 trillion valuation, which is greater than the GDP of Germany,

but that $150 billion target to be raised in new capital from three companies, last year, the entire, every company in the UK raised a total of $2 billion in the IPO market. I mean, the scale of these three companies in terms of the capital they're looking to raise is staggering. Unfortunately, I think the IPO market has become a little bit like the last stop on the chump train, and that is when Google went public, I think it had an $80 billion market cap. It's up, you know, 50 fold since then. What's happened now is there's so much capital available in the private markets that when institutional investors think there's still juice left to squeeze, they keep it private. And it doesn't go public until they feel like, okay, this thing's gotten

so crazy in terms of valuation, who's stupid enough to buy it at this valuation. I know, let's let public. So, and it is a branding event, but I worry that the majority of retail investors no longer have access to the upside because companies are saying private much longer. And the valuations of these companies is just insane. SpaceX, I think Anthropic has a shot of being worth more in 12 months than it is now, but the other two, OpenAI, and SpaceX is really where I read the S-1, it's like a hostage note written by someone on mushrooms. It is just so crazy talking about interplanet planetary travel. The first 14 pages of pictures of rockets, they're doing everything to get people to look away from the valuation. When Google went public, it was growing 240% a year,

and it went out at 10 times revenues. SpaceX is growing 24% a year, one-tenth of growth, and is going out at 100 times revenues, 10 times evaluation. That's just insane. Now, I've had several people call me from all three of these companies saying, should I sell 10%, 20%, I'm like, sell 100%. I hope I'm wrong for you. These valuations, are insane. Anthropic is a super interesting story because you have never seen the number two become the number one this fast and this viciously. You've never seen Avis overtake Hertz this quickly or Pepsi become the number one over Coke this quickly. It has more momentum now than any company in the world. So these IPOs are going to be very interesting. I say look out below.

I think two of the three of these companies could be off 40, 60 or 80 percent within 12 months. but the U.S. IPO market is just a thing of marvel. 11,000 people are about to become millionaires, and the average age of them is 37. Rents in San Francisco last month were up 24% in one month. People are already starting to buy houses. Pending luxury sales is up 4% nationally. It's up 48% in the Bay Area.

So the economic growth and capital formation in the United States vis-a-I and our our capital formation, our deep pools of capital, are a marvel. As an investor, I would stay the fuck away from these things. I've been offered allocation in two of the three companies from the investment bank that manages my money. I'm like, I don't want anywhere near this shit, because this is really, really frothy. The AG case in Florida is directionally right, but it's tactically sloppy. Let's be clear. Open AI shipped a product that has massive societal and mental health ramifications of breakneck speed. We sort of define in our economy with our tech companies' ready-fire aim. And in some ways, that's good. We get out faster,

but it has a price. And that absolutely deserves scrutiny. If you're building something that can simulate intimacy and influence behavior and engage people for hours, you need to be more responsible than we're just a bulletin board or a tool here. So I get it. But tying the companies to individual acts of violence. To be fair, I do think is a bit of a stretch. That's like blaming AT&T for a bank robbery because someone made a call on their cell phone and AT&T was their carrier. So far, that's how the courts see it and they're likely to block it. I don't think the real risk actually is violence. That's more cinematic and gets a ton of attention. It's liability around manipulation and dependency. And that is if they find out these companies discovered as they

did with META, that their product could hook or mislead vulnerable users, specifically young people and prioritize growth over the mental well-being of our youth, that could be a big tobacco moment. And we had that big tobacco moment in New Mexico and Los Angeles earlier in the year with decisions where they found these companies liable for acts of violence and suicide. So I think the lawsuits theory will stick. I don't think this version of it probably will. And the other thing I wonder is, why are they targeting open AI? I'm not saying they shouldn't.

But why are they going after these guys and not the rest of big tech and social media? It's a lot of grandstanding. It's basically this AG. This isn't a case. This is his announcement that he's running for governor or higher office. I think the courts are likely going to swat this away, even though I appreciate that AG should be going after big tech. It just feels directionally right, tactically wrong. Any thoughts, Jess?

I feel like they went with this case because they did have the direct link for these two mass shootings. And I think most kids are using chat GPT versus Claude or, you know, Gemini or whatever LLM that you might be into. I think it's just the one that feels more readily available. And it was the free service that was available to everyone first, right? So I think that they're just starting there. I could see a world certainly in which Elon is back channeling or back dealing in some way. Like, I hear very few people being like, you know, I check this in grok besides people that are on Twitter all the time. So you see this as fundamentally different than like cases where parents are being prosecuted for the easy access to guns, right?

Like that we saw in Michigan, for instance. I think that's a correct question. I think it's a really puncturing question. I don't have a good answer for you. Because I mean, if it's going to get swatted down, which, I mean, it definitely could be. that's a tough link to make. And I'm sure that OpenAI has thought about this and the implications, right? Like when you watch Sam Alman in an interview, you can see sometimes the abject terror, right,

of what his product could end up doing once it gets to, you know, a mind of its own and also forms this enormously close interconnected relationship with the user, right? It's becoming best friends. It's becoming boyfriends, girlfriends, girlfriends, partners, confidants, mass shooting, planning partners, et cetera. And they can't stop the ball that's rolling at this point, which is why even the Trump administration is loosely interested in some kind of regulation or government regulation, I should say. But that'll be really interesting to hear how that's argued versus the difference of a parent that has a gun that a kid was able to get out of either a casing that it was in or that it was just, you know, not even put away properly. The analogy draws is powerful.

The issue at hand is that I think that we need laws that hold these companies liable when a small amount of – these guys can figure out if you're about to go to a Beyonce concert. I mean, there was a mass shooting. I like to bring attention to these things because I worry sometimes that it inspires copycats. But there was a mass shooting at a school, and the person, the perpetrator here, was downloading floor plans of the school on one of the LLMs. if these LLMs can figure out your emotional well-being and whether or not you're likely to need auto insurance in the next 30 days, they can figure out if someone is downloading, it appears to have mental health, going through a mental health episode on the platform, and then it's starting to download information on the local school. When I was involved with my kid's school in Florida, a kid was drawing kind of,

horror fantasies about violence. Within a couple days, the FBI was at the house of this kid investigating whether there were weapons in the house. And by the way, I think that is absolutely the right thing to do. So the notion that these guys with a small layer of technology couldn't figure out this person is having a mental health episode and they're starting, they're investigating for what appears to be no apparent reason the entry routes and security at a local elementary school,

within a fucking microsecond, the local authority should be alerted. And they could absolutely do that. But instead, they're going the route of Apple, which isn't innocent here. You know, Apple advertises confidentiality and security and privacy, and it's a powerful positioning,

but I think some of that is a two-for-withate to say, we abdicate all responsibility. You know, we don't, oh, you can't get, The FBI can't get into your phone. It's your private, but we don't want, we don't want to know. We don't want to ever be able to say we knew about this or could have figured it out. And if you're going to put out these types of technologies and you have the ability to potentially prevent these, I don't see why you wouldn't. And at some point, we need regulation that says if you're going to put these weapons in people's hands, similar to what you're saying, putting weapons of war in people's hands, then, okay, you have an obligation to coordinate with our enforcement agencies.

and figure out a way to, and you won't catch everything, but you could potentially catch a lot. And I'm now going back to this notion of these people claim that these technologies are more powerful than nuclear weapons. Well, would we let Sam Altman oversee our nuclear ICBM fleet? I mean, at some point, there just needs to be more government oversight and responsibility here. This is a difficult issue, but if anything, we have erred on the side of a last, macro regulation. We let people put products out into the market. It takes 10 years to get a drug through the FDA. Open AI can put out anything tomorrow. And there's no blue ribbon panel of economists, psychologists, defense experts to say, is this a good idea or what are the potential

backdoors into cybersecurity that could shut down the kidney dialysis machines at a hospital network? All right, Jess, let's leave it there. Have a good rest of the week. I'll see you tonight. Yep, see you tonight. Support for this show comes from Odu. Running a business is hard enough, so why make it harder with a dozen different apps that don't talk to each other? Introducing Odu, it's the only business software you'll ever need. It's an all-in-one fully integrated platform that makes your work easier,

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