The Prof G Pod with Scott Galloway - Anthropic's Insane Valuation + The Future of Marketing

Episode Date: June 17, 2026

Scott Galloway breaks down why Anthropic is worth more than Walmart, whether we're in an AI bubble, and why traditional advertising careers are in freefall. Want to be featured in a future episode? Send a voice recording to [e-mail], or drop your question in the r/ScottGalloway subreddit. Plus, you can now call or text Scott a question at our new Office Hours hotline: ‪[phone]‬. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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support for the show comes from AVEN. Avin built the first home equity line of credit on a visa card. Same swipe as a regular credit card, a fraction of the rate, saving you hundreds a month. Americans carry over a trillion dollars in credit card debt at rates north of 23% while homeowners sit on the largest pool of untapped equity in U.S. history. Avin fixes at asymmetry. 4.9 stars on trust pilot from over 8,000 customers. Go to Avan.com. Stop overpaying for capital.

AVEN Financial Inc. NMLS. Number 204-2345, cards issued pursuant to a license from Beezu, USA, Inc. by Coastal Community Bank, NMLS, number 462-289 member FDICL housing lender. Subject to approval, terms apply. Visit Aven.com for details. Support for the show comes from Section. The recent joint ventures from OpenA. and Anthropic point to the same thing. Enterprises are not going to get value from AI by just rolling out licenses. If you're deploying A.A.A. AI and you want real ROI, you need to invest in changing how people work. If you want to do this fast with a team who actually knows what they're doing, you should talk to our company, Section. This is actually a paid ad, but it's a little bit weird. Full disclosure, I'm an investor in Section, as I feel that the part of AI that is most underinvested is what I'd call the adoption layer, and that is helping companies upskill their employee base to better leverage AI.

Anyways, Section has helped Nike, Autodesk, NASCAR, AV-M-B-M-B-M-B-B-N-B-N-P-P-B-P-Ev and Publacy, and 100 other firms get value from AI. They can do it for you. Get in touch at sectiona-I-I-D-com. That's S-C-C-T-I-O-N-C-M-C-M-M-T-M-M-C to learn. Welcome to Office Hours with PropG-G-M-M-G. This is a part of the show where we answer your questions about business, big-tech entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to OfficeHours at PropfchMedia.com. Again, that's office hours ofprochiamedia.com, or post your question on the Scott Galloway subreddit,

and we just might feature it in our next episode. Plus, you can now call or text us a question at 201 472-3656. That's 201-472-3656. All right, let's get into it. Our first question comes from Steve, who emailed us. He asks, I'm a simpleton in investing who listens to Prop.Gue regularly. I know both are different sectors, but can someone explain how Walmart, with revenues of approximately 713 billion and operating profit of around 30 billion can have a lower valuation than Anthropic,

which has revenue of approximately 70 billion and forecast a profit of around 2.2 billion. Is it forecasting revenue of 70 million? Is that evidence of a bubble or our investor is simply pricing in much higher future growth and profitability for Anthropic? So typically a stock price is meant to be the asset value, so just the land underneath,

the retail or the intellectual property and owns plus the present value of growth opportunity or cash flow. So all of these assets should be able to create an asset or a series of assets that create revenue that is greater than the inputs to produce that revenue. That's profits. And then your growth or the multiple you get on those earnings, the P.E. ratio is a function usually of how fast that is growing or how stable and durable those cash flows are. And the reason why SpaceX and Anthropic and Open AI are going out in anywhere from 30 or 40 times revenues to 100 times revenues is that if people look at the adjustable market and think, wow, if this company continues to grow, in fairly short order, it could be the most valuable company in the world. And right now, if you are buying in any of these three companies, there is your betting on a non-zero probability that this could in fact be the most valuable company in the world. because these companies are going out in anywhere between $1 and $2 trillion, the most valuable company in the world, I think it's around five or five and a half.

I can't remember if it's Nvidia or Apple. So you do end up with companies that are low growth, not exciting, not in software, don't have the margins of technology. You know, the adjustable market for Walmart is pretty big. I think it has a 9 or 11% share of retail. It's probably never going to get above 20 because consumers like at some point differentiation and want to shop at different places or regional friction, whatever it might be, But let's talk about Tam.

I think Anthropic is 5 or 10xing every year. So people look at that and think, wow, that could be an enormous company at some point. And because it is in fact software at some point, when it hits break-even, a lot of those additional revenues are going to flow to the bottom line. So what's the takeaway here? Let's look at the numbers. Fiscal 2025 net sales of 675 million at Walmart, adjusted operating income of $30 million, operating margin of 4.4%. And the market cap, as of late, was $1 trillion. So that's roughly one and a half times revenue or 34 times operating income, which is actually pretty rich for a retailer.

Walmart's operating margin has climbed from 3.3 percent and fiscal 2023 to 4.3 percent. Walmart is just a different business. Walmart operates on the notion that their scale and their operational excellence, they can pass the savings onto a consumer. So there are only three things that matter, or lines that matter, around shareholder value. It's the top line which is perceived value. The next line, the middle line is the price you charge, and then the line below that is the cost to deliver that service. And all shareholder value is the function of the ratio between or relative distance between those lines.

So Walmart is in the business of constantly pushing down the cost line. And then once you do that, some wonderful things happen. If you can either pass along the savings and pull down the price line that you're charging consumers, which is what Walmart does, and then the gap between the price you, charge consumers and perceived value broadens, and the value proposition goes up, and you should expand share. And that's been Walmart's strategy the whole time, is they don't, if they cut costs on operations such that they can ship a pallet of ginger ale to Arkansas more efficiently than someone else, they immediately pass those savings on to the consumer, and the value proposition

of Walmart goes up. There's an old saying that starting to shop at Walmart is like getting a promotion in terms of the change in the quality of your life, because you can now afford to buy imported beer versus domestic beer, if that's what you want to do. other companies such as a Tiffany or Hermes, they're in the job of pushing the perceived value lineup as much as possible through innovation and scarcity and branding. And then that's wonderful because then the gap between the perceived value and the price they charge goes up, which should expand share.

But typically what they do is as they push the perceived value lineup, they raise the price. Effectively what you're doing in these companies is they're trying to they're trying to push the perceived value up dramatically. They're also raising so much capital that they can offer these products and an incredible value. So supposedly Claude Pro or Cloud Max, it costs $200 a month. But supposedly right now, it costs them $5,000 a month for the compute

and the chips to offer you that service. So they're trying to just capture a ton of share. These companies are growing incredibly fast in their total adjustable market, seems almost infinite, which results in just kind of what I'd feel would be insane valuations. Let's talk about Anthropic. So get this. The annual revenue trajectory was $87 million in January 2024, and it's $1 billion by 2024 and $9 billion by the end of 2025, and $30 billion by April 2026. So as you can see, this company, I mean, Anthropic really is a miracle of American innovation. It was started five years ago, and if it was in Europe, it'd be one of the five most

valuable companies. The current run rate is about $40 billion, AR, according to people with knowledge of the company's financials and the valuation was $380 billion post-money in February, announced in tax raise money at a $900 billion pre-money. Internal documents project a $14 billion loss of 2026, no positive free cash flow until 2028 at the earliest. By the way, I think that's a couple years earlier than the projected positive free cash flow date for OpenAI. So at a $900 billion evaluation in $45 million in AR, that's roughly 20 times forward revenues compared to Walmart's one and a half. They're just different businesses with different expectations. I would, what's the answer here? You know, which is a better value? The answer is yes.

And that is, I think you want to invest in everything. I don't think you want to try and talk yourself into the illusion that you can find the needle in the haystack, buy the whole haystack, dollar cost in, low-cost index funds so you don't pay fees or a lot of fees. So I do think there is a real serious bubble question. The bear case, Anthropics, taken in roughly $72 billion in funding. and does not have free cash flow projected until 2028. And AI, you know, at some point, AI is going to stop growing at the same pace. I think also I think there's some existential threat from open weight,

LLMs out of China, regulatory concerns. I think the next big populist movement is an immigration or affordability. It's AI regulation, which has fans on both sides of the aisle. So, you know, are we in a bubble? Probably. but it's really hard to tell when the bubble's going to pop. It was obviously we were in a dot-com bubble in 1997, and yet the NASDAQ, I think, tripled.

So it's very hard to time the market, and I think what you want to do is just always be in the market, always continue to save money and invest in the market and be diversified in low-cost index funds such that you don't have to try and figure out if Walmart or Anthropic is the better value. The honest answer is, I don't know. That's the bad news.

The goodness is nor does anybody else. Yeah, is it a bubble? or are these companies going to go up because of the incredible Tam? I think the answer is yes. Question number two. Hi, Scott. This is Mark from Dallas. My daughter is heading to college this fall as an advertising major.

She's looking at a career in brand or events management, but I listen to the pod and I hear your warnings. You've made it clear that Don Draper's version of advertising is dead, that the brand era is over and that AI is coming for the creative class. My question is, is an advertising degree still a viable path to a high-earning career, or is it a waste of tuition in 2026? If this were your daughter, would you tell her to pivot now, or is there a way to AI-proof a career in this field?

Thanks for everything you do. Thanks for the question. I get this question a lot. So I think a lot of it is words. I think that they should change the name of the degree to marketing or customer acquisition or, I don't know, something that feels a little bit more to age. Because advertising, when people hear advertising, they think of a 60 second spot telling you have opioid-induced constipation ads in the middle of CBS news. The broadcast advertising business is just in structural decline. It just is. And probably the, I would argue, the kind of pivot moment that illuminates. it was that Steve Jobs decided to take $6 billion out of broadcast advertising and go further down the stack and open 550 temples to the brand, and that was Apple Stores. So he invested in distribution as opposed to pre-purchase branding. Effectively, the way you built brands from kind of 1945 to 1995 was Americans were sitting in front of a TV five hours a day

and watching one or three channels. So you could literally reach the entire public with two or three nights of advertising. That has obviously fragmented. There are now hundreds of channels and hundreds of other options. were vying for your intention. In addition, the cost to advertise on the Academy Awards has gone up fivefold, despite the fact the audience has declined by two-thirds.

So one of two things has happened. Either broadcast advertising is a terrible value now or back when I was growing up, it was an unbelievable value. And the reality is it's mostly the latter, and that is you could have a shitty shoe, a shitty car, a shitty snack, a shitty beverage.

And if you created these associations of European elegance or American masculinity or paternal love or maternal love, choosing moms, choose jiff. You could put out a mediocre market, capture all of the emotions of the majority of the nation on a fairly limited, you know,

advertising budget, and then sell 30 or 20 cents of peanut butter paste for two bucks. So that was the kind of the algorithm for creating shareholder value. And then with Google and weapons of mass diligence that came out from TripAdvisor to AI, you've seen a vast migration

of capital out of advertising into distribution, see above Apple, or post-purchase branding, which is either influencer, social media, warranties, customer service, CRM, all that good stuff. So I don't like the term advertising, but marketing or whatever you would call on customer engagement, customer ROI, we need better terms. I do think it's a decent education,

learning how to communicate with people, and actually communication is a better word, and try to create a motion, that results in margin. And that is, brand is kind of Latin for margin or emotion. And what you want is irrational margins from consumers. So I want to drive something with a stallion logo on the hood of my car, a Ferrari, I don't know a car actually, because it says something about me. It says I'm masculine, successful, European grace, have the money to buy Ferrari, please have sex with me. And I think the majority of really high margin brands are doing one of two things, making you feel

closer to God are giving you the sense that you'd be more attractive to a broader selection set of mates. But I think that the skills you get in communications is the strong on how to figure out a market, how to figure out what moves people, figure out distribution, figure out technology, different channels to reach them. So I think that you have, I think this is what I call, it's not the default career path it used to be, but it is, it does teach, I think, really strong skills. So the ad model, when I was coming out of business school, the Titans of Industry were Maurice Levy, Martin Sorrell, John Wren, so IPG, Omnicom, WPP, and these companies are kind of meaningless now. When I go to Cannes, they used to be the Masters of the Universe. Now it's Google,

meta, Pinterest, Spotify, and these guys are basically like running Irish bars and hosting 10 or 12 people. You know, it's just not, if you're under the age of 40, I would say just not going or getting out of the ad-supported ecosystem. I just think that system is getting harder and harder every year, and the auctioning continues to get sucked out by Google and meta. If you're already doing well in one of those businesses that still, you know, agencies aren't in the advertising business anymore, and they're in the kind of client management business, helping them navigate a very complex world and helping them do good media buys. What your daughter is talking about where I think there's huge growth is events, and that is activations.

And so I speak at a lot of these events. And I just spoke at RBC in Vancouver, Canada. They easily spent two or three million dollars on a 36-hour event for their most important clients. So I'll speak at Dreamforce. You know, they probably spent 10 million. I just got off a live tour for Profiting Markets. There were six people managing the venues, the events, the lighting, the guests. You know, I think activations and people wanting to get out and touch grass, if you will, in events,

Netflix will do a pop-up at Can Lions featuring their latest shows, and they'll spend a ton of time and money and energy, so we'll snap, we'll have something really cool, they'll take over a big chalet. So I think that if you're organized, creative, a good manager, I think event marketing is going to boom, if you will. But traditional advertising, wow, watch out below. And by the way, what I would tell my daughter is don't follow your talent.

I wouldn't be like, oh, just do what makes you happy. I would say, find something you're really good at. That's your job. And going to college, just find subject material you think you're great at. Take a bunch of classes you otherwise wouldn't take to see if something surprises you. Try and throw on some STEM. I would very much try and figure out a way to take classes that force you to write, English or communication, because I think that's the basis of all storytelling,

which I still think is the enduring skill. The boss, let's be honest, we can tell our daughters whatever we want. They're going to do what they want. But if your daughter, these are good problems. If your daughter's headed to college, you're obviously an engaged father. You know, I think that's kind of 90% of success right there. Thanks for the question. We'll be right back after a quick break.

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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, CRM, accounting, inventory, e-commerce, and more. And the best part, O-Doo replaces multiple expensive platforms for a fraction of the cost.

That's why over thousands of businesses have made the switch. So why not you? Try O-D-for-free at O-D-O-O-D-O-O-com. That's O-D-O-O-O-com. Welcome back, question number three. Hey, Scott, my name's Seth. I just turned 40. I have a one-year-old daughter, a baby boy on the way,

and maybe one more kid after that. I love being a dad, and I'm more family-oriented than work-centric. But careers still really important to me, and I want to move from middle management to executive leadership this decade. As I enter my prime earning years with my kids in diapers, I wonder if I'm at a career disadvantage compared to fathers who had started their families at 30 versus 40. Life pushed things back. Career setbacks, finding the right partner, years of IVF, but here I am. I feel I need to be more present with my kids now, not.

less, but this may limit my professional growth. Having had your first son at 42 and raising young men while you're in your 60s, do you wish you had kids earlier? How did becoming a father in your 40s shape your ambitions and relationship with work? Thanks, Scott, and thank you for helping shape a healthier public discourse on being a man and father. So thanks for the question and congrats. If I could go back, it would be to when I had little kids and, you know, those were the solid days for me. I think I'll look back and I have this time in my life and I'll be it when our kids used to bomb into our room on a Sunday morning and jump into bed with us. Look, there's no right way. There's your way.

And that is, there's no such thing as balance. There's just tradeoffs. And I can't stand it when thought leaders or people giving advice or whatever say, you know, always prioritize family. You won't regret it. Yeah, maybe. We live in a capitalist society, and money is not only freedom and optionality, it's health. People in the upper decile of income earning homes live seven to ten years longer than people in the lowest desa. So I think you just have to get alignment with your partner and recognize there is no balance.

There's a tradeoff. So you might decide that you want to move to a lower cost part of the world, manage your finances tightly, and you and your wife decide that you're going to prioritize family and you're going to work 40 hours. a week and coach little league and go to church and be a good American and have a really nice life. And a lot of people do that and are happy and move to a place where they can buy a house for $300,000. So that is, you know, there's a lot of people who are very happy living that life. I didn't want to live that life.

I wanted more money. I wanted to live in New York. I wanted to be more, I don't know what the terms, I don't say call it more relevant, but I wanted more curb success, if you will. And I always been very insecure about money. So I made the decision for that tradeoff, and that is I got alignment with my partner, and I said there's going to be times when I'm on the road for two or three weeks. I remember I was running a company called L2, which helped luxury brands benchmark their digital confidence.

And luxury brands happen to be located a lot in Paris or Milan or, you know, I would travel to Seoul to meet with Samsung, and then to Ingleschott, Germany to meet with Audi. And I remember coming home a few times after being on the road for two or three weeks and I'd look and peer my head into my kids' room when they were your age, and I'd notice they physically had grown since I left. I'm going to get all bummed out.

But me and my partner decided that we wanted the optionality later in life that money affords you. I have a tremendous amount of balance right now. You know, I'm going to, I can fly home whenever I want them in New York, and then I'm going to go spend some time with my kids. One of my kids is in the Dolomites. hiking with his mom and then we're all, you know, we're going to World Cup and we just get to do these amazing, have these amazing experiences and we, I mean, I'm boasting now, but it came

at a cost. I don't, I have so much optionality now and fun things in my life because boss, I was working like 14 hours a day when they were babies and even kids. I missed a lot. I don't want to, I missed a lot. Now, for me, it was worth it. And there's always a risk you work that hard and you don't get there. And then you're like, that's really a bummer. But I decided the one thing I could control was how hard I worked. And I made that sacrifice. And most importantly, I had alignment with my partner that that's what we were going to do. And she was very supportive of that. But it comes at a cost. I think you just got to sit down with your partner, establish what is really important to you, recognizing the realities of capitalist society where there's a lot of things that are just going to be

easier for you and your kids if you have a certain amount of economic security. That comes at a that in order to achieve that, it requires real sacrifice and real tradeoffs. And I just think you have to have sober conversation. And what I find a little bit disheartening sometimes when I talk to young people is I ask them how much money they expect to be making a 30 or 35. And some of this is proximity bias because the kids I'm around, very ambitious at a business school. But I'd say 80% of them expect to be in the top 10% if not the top 1%.

And then they use the word balance. I think, bitch, unless you're smart enough to be born, smart enough to have to have rich parents, get over that. I don't know anyone who gets to the top 10%, much less the top 1% without making a huge sacrifice in their relationships, their health, their quality of life, their mental well-bank. Shit is hard.

You know, work is really, there's a lot of, there's, what is it, the average income per capita globally at $16,000 or $18,000. So if you want more than that, you're going to have to be more innovative, but work harder or be born in a better place than those people. So, you know, I just think it requires, a sober conversation about the tradeoffs and then to get alignment, decide where you want to be on

that spectrum of tradeoff, and then to have an honest conversation and get alignment with your partner. But boss, I can't tell you which way to go. I think it's a very personal decision. I went the way of trying to maximize economic security. And, you know, some of that is probably also ego. I get my identity from work, which is sort of pathetic, but it's true. And it worked out for me, so I have a tendency to tell people to sacrifice when they're young. But if you think about what it means to be mature, it's prioritizing the future. And that is sacrifice now. Think about the education system. The education system is basically everywhere trying to do one thing, and that is trying to help kids connect sacrifice now with reward later. Don't play video games now, study for your

chemistry exam, because you'll get better grades, get into a better school, have better opportunities, find a higher character mate and die in a nice home as opposed to having frustration and anxiety your whole life. Everything is about trying to prioritize the future, if you will. So, you know, what does that lend to? Probably sacrifice now versus later. But again, you know, a lot of people look back and regret not spending more time with their kids.

Do I regret it? No, I miss it. I would have liked to have had more, but I have a lot of time with my kids now. Word salad. life is tradeoffs. There is no balance. Decide where you want to be on the spectrum. Get alignment with your partner. That's all for this episode. If you'd like to submit a question, please email a voice recording to office hours ofproptuemmedia.com. Again, that's office hours to proptermmedia.com. Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit, and we might feature it in an upcoming episode. This episode was produced by Jennifer Sanchez and Laura Gineer. Cameric is our social producer.

Brad Williams is our editor, and Drew Burroughs is our technical director. Thank you for listening to the PropgeyPod from ProPg Media. 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, CRM, accounting, inventory, e-commerce, and more. And the best part? O-DU replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch. So why not you?

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So why make it harder with a dozen days? different apps that don't talk to each other. Introducing O-DU. It's the only business software you'll ever need. It's an all-in-one fully integrated platform that makes your work easier, CRM, accounting, inventory, e-commerce, and more. And the best part, O-DU replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch.

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