The Prof G Pod with Scott Galloway - Prof G Markets: Nvidia Earnings are the Super Bowl of Business + Trump’s $5 Million Gold Card

Episode Date: March 3, 2025

Follow Prof G Markets: Apple Podcasts Spotify  Scott and Ed open the show by discussing Tesla’s shrinking market cap, Berkshire Hathaway’s record-breaking tax bill, and BP’s pivot back to fossil fuels. Then they break down Nvidia’s earnings, explaining why investors weren’t impressed even though the company surpassed expectations. Ed shares why he still sees it as a win, despite Nvidia’s stock dipping slightly. They also discuss Trump’s new gold card visa program and explain why demand is more limited than the president thinks. Scott warns that the program could attract shady characters trying to buy their way into America. Subscribe to the Prof G Markets newsletter  Join us for a live recording at SXSW Order "The Algebra of Wealth," out now Follow the podcast across socials @profgpod: Instagram Threads X Reddit Follow Scott on Instagram Follow Ed on Instagram and X Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this show comes from Indeed. Indeed-sponsored jobs can help you stand out and hire fast. Your post even jumps to the top of the page for relevant candidates to make sure you're getting seen. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $100 sponsored job credit. To get your jobs more visibility, at indeed.com slash vox ca.

Just go to indeed.com slash Vox CA right now and support the show by saying you heard about Indeed on this podcast. Indeed.com slash Vox CA. Terms and conditions apply. Hiring Indeed is all you need. Thumbtack presents the ins and outs of caring for your home.

Out, procrastination, putting it off, kicking the can down the road. In. Plans and guides that make it easy to get home projects done. Out. Carpet in the bathroom. Like, why? In. Knowing what to do, when to do it, and who to hire. Start caring for your home with confidence.

Download Thumbtack today. of Networks and Chill where I cover all things taxes and show you that yes, it can be confusing, but I promise we can get through it together. Listen wherever you get your podcasts or watch on the Your Rich BFF YouTube channel. Today's number, $49 million. That's how much New York City's congestion pricing tolls brought in during the program's first month. This is an actual true story. And when I first moved to New York,

my first date was with a woman named Martha who took me to, no joke, a sex club. And one of us had sex and it wasn't me, Ed. That's a true story. That's not a true story. No, it's a true story. The club was called Trapeze. You're going to have to elaborate.

It's the final part that I'm really intrigued in. Met this woman, really interesting woman, nice. It was very attractive to her. And I had this big deck. I lived at one Greenwich and I had basically this like 700 foot apartment with a 3000 square foot deck, see above single and desperate. And I used to have parties and people,

and I met this woman, super hot, seemed super cool. Yeah. And asked her out, kept asking her out, and finally like, I'm getting nothing back here. And she's like, I have something I think you're gonna like. And she showed up and said, I'm gonna handle everything. And we went to this place, and I think it was a Westfield or so, going underground.

It's like 300 bucks for the dude and nothing for the woman. I'm like, well, this is gonna be interesting. And they give you a towel and she changed into a towel. And anyway, she ended up making out and fooling around with a woman. It's crazy. That was my big New York story. NYU professor, would you let your kid take class with me?

Yeah, you didn't do anything wrong. I mean, you shouldn't have pursued this woman specifically, clearly. Oh, I was so excited. I would, I think I still probably text her. Saying, saying she'll give me another shot at trapeze. What happened in the basement, water under the bridge. Let's start over. Actually, also my other New York joke.

You know, New York is just a full of rats. I made actually friends with this rat and this ridiculously hot woman walked by and I'm like, just see the ass on that woman. He's like, so actually I'm a tit rat myself. I prefer the real stories. Ah, that's why you come here. This isn't CNBC. Agreed. Let's start with our weekly review of market vitals. The S&P 500 declined, the dollar rose, Bitcoin fell, and the yield on 10-year treasuries

hit its lowest level since December. Shifting to the headlines. Tesla's market cap has fallen below $1 trillion, erasing nearly all of the stock's post-election gains. Shares are down more than 25% so far this year, as investor concerns mount overgrown competition and Elon Musk controversies. Warren Buffett announced that Berkshire Hathaway

paid nearly $27 billion in taxes in 2024. That is the largest tax bill ever paid by a US company, accounting for roughly 5% of all corporate income taxes collected in the country that year. And finally, BP announced it is shifting back to fossil fuels and scaling down investments in green energy. The company plans to spend around $10 billion a year on oil and gas to win back investors after its fourth quarter profit hit a four-year low. Despite that move, BP shares closed down about 1.5%. Scott, we'll start with Tesla, and I'm bracing myself for your victory lap here. You predicted on February 13th. I can't help it.

I'm a broken clock here. Tesla's imploding. I think the stock is below 200 in the next six months. It was trading at $356 a share then. We're not below 200, but we're now at $286. So it's down 20% since your prediction. Take it away. I hate this motherfucker. I really, I don't know if you've sensed that. Take it away. I hate this motherfucker.

I really, I don't know if you've sensed that. Really? Yeah. I have no emotional distance here. I'm changing my prediction. I think this thing goes below 150. Oh, keep it. Keep the original.

I can't help it. It's at a P of 180 and its sales are off 75% in Germany. And across Europe, they're off dramatically. I think the car line is really stale. To be fair, the stock is still up 50% over the last 12 months, right? It had a huge run up. And the market, you could say, you could also make this,

you could also steel man and be a weak steel man and be more like an iron man or a hay man. It's clear his activities have really hurt him in Europe and in California, but probably the market was looking for an excuse to take this stock down. I think what will be the real interesting test here in terms of the association or affiliation

of an individual's brand and their company is if Starlink starts to have contracts canceled. What do you make of this Ed? Yeah, I mean, I think the question that we've been trying to ask is like, what started this slide with Tesla stock? I mean, it's pretty dramatic what happened. It's down around 20% in five straight days falling below a trillion dollars.

It's now down 34% since its peak in December. I think the thing that really triggered this is this data that came out from Europe. Tesla's vehicle sales are down almost 50% across Europe. Meanwhile, overall EV sales across Europe are up almost 40%. So clearly, people just hate Tesla's and it's not very surprising why. You just look at the UK for example, where Elon is talking about how he wants to put the British Prime Minister Keir Starmer in jail. It's not very surprising that the British public is now saying, hey, we're down with electric vehicles, but we're not going to buy Teslas anymore.

And so it's finally being reflected in Tesla's financials. I think the thing that I've been thinking about a lot when it comes to Elon and when it comes to Tesla, I've been waiting for what I would call his Wellington moment. And I'll explain what I mean by that. As I've said to you before, I think the similarities between Elon Musk and Napoleon Bonaparte, and you're going to call me a history nerd, but I don't care. Just a nerd. I think the similarities between Elon Musk and Napoleon Bonaparte, and you're going to call me a history nerd, but I don't care. Just a nerd. I think the similarities are very striking in that you have Napoleon, who was this like

miraculously successful guy who took over all of Europe and tried to take over the world, and at the same time was also pretty universally disliked. But people never really did anything about it because they thought, you know, this guy is so talented, he's so powerful, he conquered the Russians, and the Prussians, and the Spanish, he installed himself into office, he crowned himself emperor. Like, how could we ever bet against Napoleon? You never bet against Napoleon.

And that's basically why people went along with this guy, who was acting, honestly, very irrationally and kind of insane. But it was only when he suffered this crushing defeat at Waterloo against the Duke of Wellington that people realized, actually, maybe this guy isn't untouchable. Actually, maybe he isn't a god. And the whole world turned on him at the exact same time, including the French by the way, and he was banished to this remote island where he died sad and alone. And I believe that that moment is coming for Elon. I believe it's gonna take some big loss and

suddenly all of this mystique and this intrigue and all of our glorification of his leadership abilities and his character and his genius. It's all just going to disintegrate in a second. And at that moment, I think the citizens start to turn on him. We've seen that happening already. But more importantly, I think the markets will turn on him too. I think that moment happened 48 hours ago. I think it was Bill Burr. He's probably my favorite comedian. I think the guy's just a genius and he's fearless. And he's been known for being just incredibly politically incorrect.

And he's a favorite of what I'll call sort of the intelligent manosphere. And that is he just mocks the shit out of Democrats and political correctness. And basically every viewer of MSNBC was grabbing the pearls every time they watch a Bill Burr clip. And he was just totally unafraid

to be totally politically incorrect. And he went on a rant and we should play that, we'll find the clip now. I'll tell you what's funny, I made fun of the fucking Twitter guy for fucking seek hiling not once but twice. And I never look at my emails, I was scrolling through my emails

and it said my Twitter account had been flagged for interpro I don't even tweet anymore it had been flagged for what a fucking baby just like Hitler a fucking baby because that's another thing all of these people that are into fucking Hitler you know what I mean and like like like look at this guy like he was some sort of fucking hero the guy's one of the biggest fucking cowards ever all the pain and all the suffering that that guy's caused and the war crimes The the Allies had to commit fire bombing fucking cities to get that motherfucker when it came time For him to pay the price for all the suffering. He caused millions and millions and millions of people the suffering he caused millions and millions and millions of people.

Did he face the music? Nope. He gave himself a nice, quick, painless fucking death. That's your fucking hero. I think the worm has turned against this guy. I think that moment you're describing happened 48 hours ago. I still think people think he's invincible. There's no such thing. Agreed, but this is what people believe and this is what the markets believe.

And so this is what I mean. I think you need a moment. You need to see that the God fall from grace. You realize he's mortal. You realize that actually he's not all he was chalked up to be. And suddenly that's when the world collapses in on itself. But we've been talking about Elon

for way longer than we should have. So let's just move on to our second headline here, which is Berkshire Hathaway paying $27 billion in taxes last year. I think the thing that's interesting is what Warren Buffett said about this tax bill. Specifically, he was talking in his shareholder letter, in his annual letter to Berkshire Hathaway shareholders, he was explaining how proud he was of paying this tax bill and contributing this revenue to the US government. And I'll just quote one part of this, because I'm supportive of what he said, but I also take some issue with it. So in the letter, he's describing the beginnings of Berkshire Hathaway and how they were struggling

at the beginning. And then he says, quote, fast forward 60 years and imagine the surprise at the treasury when that same company still operating under the name of Berkshire Hathaway paid far more in corporate income tax than the US government had ever received from any company, even the American tech titans that commanded market values in the trillions. So he's basically saying, look how far we've come. Look what we're contributing to the government.

But at the same time, he's kind of taking a shot at big tech and accusing them of not paying taxes. Which is true and fair. And I agree with it, but I do find it a little bit rich coming from Warren Buffett, who has done a very good job of avoiding taxes himself. I mean, if you look at the history of Berkshire Hathaway, they have a long list of tax avoidance strategies and they've had no problem taking full advantage of them. We could go through some of those examples, but what I would summarize this as,

I respect the point, but I don't love this holier than thou attitude from Warren Buffett, who's presenting himself as the Jesus of taxes, which isn't necessarily true. But let's hear what you think of this. I assume you're a supporter of this. Yeah, but you got it right. Like, they paid a lot of taxes.

If she wants to take a victory lap for it and make a point, good for him. And he has said for a long time, there's no reason I should pay a lower tax rate than my assistant. But his obligation to his shareholders, no one's going to disarm unilaterally. I believe tax rates should go up, but I engage in tax avoidance. I'm constantly thinking about strategies to minimize my tax bill. There's a ton of ways you can do it legally when you're rich. What we've seen is the tax code go from something like 400 pages to 7,000. Those incremental 6,600 pages are there basically to fuck people of your generation

and transfer more wealth to my generation and to corporations. Cruise lines have weaponized various loopholes. They pay less than 2% for all the tax rates. General Motors in 2023 paid a tax rate of 5%. T-Mobile, which I would think was a very profitable company, pays an effective tax rate of 0.4%. Every company is gonna do the best they can to pay as little as they can.

That's their job. We're not doing our job, and that is, there have been so many loopholes stuffed into the tax code. And what the misdirect is, people think it's about tax rates, it's not. It's about the tax code. And I believe that as a percentage of GDP, taxes or corporations are paying the lowest taxes

since like 1938. And at some point, got to fund the government. And there's two things to do. There's either deficits, right? Or you got to charge more in different types of consumption taxes. And I've said this for a long time, there's some mythology in the tax code. The bottom half pays almost no federal income tax. They pay a lot of consumption and sales tax, but almost no federal income tax.

The people who get most screwed in our tax system are actually most of the people who work at Prop G Media. And that is, you guys make very good livings, but it's all current income and you live in a high tax domain, New York City. So even as young as you are, you make exceptionally good livings for people your age, even though you may not feel that way. You're probably paying 30 to 40% tax rates at this point. That's a lot of money for a young person. But once you make the jump to light speed and get really rich, you can leverage all these different loopholes, whether it's 1031 exchanges where you can take real estate and roll it into a new real estate investment without incurring a capital gain, triggering a capital gain, even thinking of yourself as a stock,

you produce, I have stocks that produce say a hundred grand a year in dividends or growth that gets to grow on the dividends, but the growth grows tax deferred. Whereas if you're an individual making a hundred thousand dollars, you lose 20% of it every year at least. So the tax code has basically said, all right, the bottom 99, we're gonna basically fund the government with the kind of 50 to 99th percentile. And then once you get above the 99th,

your tax rates plummet. And the reason why America puts up with it is that we're so optimistic that people believe at some point they're gonna be in the 0.1%. But corporations, I mean, we just have two choices here. We either need to cut spending and raise taxes or have massive deficits, which are, and it's important that we communicate this to people, nothing but taxes on you and Claire and the rest of the young people of this organization, just kind of laying in wait. So I find the whole, I think taxes are a really important conversation. I would like to see the best solution would be an AMT, an alternative minimum

tax on corporations and the rich. And that is if you make over say $10 million, we want you to pay a 50% AMT. We put whatever loopholes you can come up with. Great. But you're paying at least 50%. You know, that's a lot, Scott. Whatever loopholes you can come up with, great, but you're paying at least 50%. You think, well, that's a lot, Scott.

It's not because every psychiatrist and psychologist and Daniel Kahneman specifically has shown that above a certain amount of money, you lose no happiness. Any more money doesn't make you any happier, so having a higher tax rate doesn't make you any less happy. And also these tax rates are lower than they were in the 50s, 60s, 70s, and even in the 80s at those income levels.

So I think tax rates could actually come down if you forced everyone to pay those tax rates, and that is you could lower the top tax rates on people if everyone paid them. You could lower corporate tax rates if everyone paid that rate. I also think that there is something to be learned from Warren Buffett, just being happy to pay his taxes. Like that's just on a personal, emotional level. I think if we can, you know, we clearly need to raise more tax revenue.

If there is any way for Americans, people anywhere really, to feel a little bit less resentful when they make their tax payments and to feel that feeling of actually having pride and it being a bragging point how much you contributed to the US government, which it seems like that's, you know, everyone who pays their taxes is like, fuck this, I don't want to pay my taxes. But I do like that Warren Buffett is kind of changing the sentiment there. And I will also shout out Andrew Yang, who one of his great policy proposals when he

was running for president was that we should basically have the government send out videos, including local governments, to taxpayers telling them, here's everything we did with your money this week or this month or this year. And I think if you could sort of just change the mentality when it comes to paying taxes, it's a little bit of a soft point, but I do appreciate that Warren Buffett is leading that movement of, okay, paying a lot in taxes is not necessarily a bad thing. You're doing a service to your country. I guess you have to start off believing in your country

and liking your country to begin with, which is becoming rarer and rarer in America. Let's talk about BP. They're deciding to shift away from renewables, investing more in oil and gas. I guess the first question I had reading this headline is, how much did Elliott Management, the activist investment firm,

how much did Elliott have to do with this because? Two weeks ago they it was leaked that they had this stake in BP roughly 5% You know they wanted to clearly address BP's underperformance. It's down 8% in the past year Meanwhile Shell is up 7% and all the other energy companies are doing a lot better and then suddenly two weeks later We see this turnaround in strategy. So I guess my first question for you, Scott, to what extent do you think this was Elliot's doing? Oh, Elliot, they're smart people.

And Jesse Kohn, who runs our activist group, is a really smart guy. And marketing is important, but be clear, this is all marketing. I'm not sure, I think BP was actually, so I ran a brand strategy firm called Profit, and I think BP was a client, and the running joke around the office was beyond petroleum, and they'd like, you know, the ad team would hire an Asian dude, put him in a jacket and

run a commercial talking about how algae is going to fuel the future automobile. Can a hundred thousand people in a hundred countries come together to build a new brand of progress for the world. We think so. And now BP, Amoco, Arco and Castrol have come together to try beyond petroleum. They never spent a lot of money. I think right now, what is the research you guys did that basically BP is allocating somewhere between three and five percent of their total cap extra renewables. That's just not a lot.

They were never not in oil and gas. And this is basically saying, okay, get rid of all of it. Stop pretending, stop running the ads beyond petroleum. Just say, petroleum, it's here. Sorry, you basically think that they believe that the world wanted them to be a renewable company. So they said, oh, we're a renewable company. And now the world wants them to be an oil and gas company.

So they're saying we're an oil and gas company. Yeah, there's no substance here. This is, this is them pretending for two decades deciding that the big sunflower beyond petroleum would make them see warm and cuddly as they were belching more carbon into the air than anyone, but maybe Exxon and Chevron, because there is nothing, there is nothing like the arbitrage you get from fossil fuels in terms of the ability to do work, move earth, create different substances, based on this incredibly cheap supply where you get a barrel,

an absolute barrel of this shit that can be made into almost anything or provide energy to make almost anything and the barrel costs 70 bucks. I mean, it's just so cheap. And these guys, these, these companies are just cash juggernauts. And basically Elliot said, stop the bullshit, stop the virtue signaling, stop the posturing, You're a petroleum company. You always have been.

They are putting $10 billion a year additionally into oil and gas. So I think, I mean, I think I'm sort of half with you in that this is probably what they thought the market wanted because the way the pendulum is sort of swinging back away from ESG, But I would also put forward the possibility that a lot of this has to do with AI and just the fact that they couldn't really predict what was gonna happen in terms of how AI was gonna explode over the next few years.

And you've got billions of dollars being plowed into these data centers, which are already one of the biggest strains on power in our economy. And it's expected to double in just a couple of years, quintuple in, in maybe the next 10. So I do think at the same time, I'm sure there's probably a marketing element to it. I think at the same time, these energy companies are realizing like, shit,

we've been investing in these renewables, which are, you know, probably pretty exciting over the longterm, but the short-term demands of AI are way higher than we thought. And the reality is these renewables that we've been investing in, they won't cut it. And if we wanna meet demand, we do need more oil and we do need more gas,

especially gas. Liquid natural gas is like ideal for data centers. So I think I'm like sort of half with you there, but I do think there is some substance here in the fact that power demand is just going up and we're not gonna power these data centers with windmills and solar panels. We're gonna do it with oil and gas.

And so if you're not investing in that, or at least maybe to your point, showing Wall Street that you're trying to invest in that and that you're being realistic about the demands of AI in the next few years, then you're going to get punished. And that's why we've seen BP down or at least kind of flat over the past year or so it's up 37% in the past five years. Chevron's up 109%.

Exxon is up 183%. So they have been getting crushed. And I, I don't like to be the, the big energy guy, but I do support this move. We saw a lot of those energy stocks crash with DeepSeek when all of a sudden people thought, oh, we might not need as much energy. And what you're saying is that was a bit of a headache, Peg, we're still going to need a massive amount of energy. And I met with a guy who's an energy guy and he said, you got nuclear wrong. He said, and Mia kind of confirmed this in her notes that the lag to bring energy capacity nuclear online

is five, 10 years out at a minimum. And that the real play is liquid natural gas, LNG, and that you want to be looking at that space. And it'll be very interesting to see, there's the side note that really fascinated me, I don't know if you saw it, but the number one producer of wind power now is Texas. And we should do a deeper dive at some point

on the economics of wind power, because it's politically, quote unquote, incorrect or politically sober, whatever the term you want to use this, Texas is. The economics of wind have made it such that it is now, incorrect or politically sober, whatever the term you want to use as Texas is, the economics of wind have made it such that it is now in many ways a better bet than these dirty fossil fuels. We'll be right back after the break with a look at Nvidia.

If you're enjoying the show so far and you haven't subscribed, be sure to give ProfitU get your podcasts. Support for ProffG Markets comes from Vanta. Trust isn't just earned, it's demanded. Whether you're a startup founder navigating your first audit, or a seasoned security professional scaling your GRC program, proving your commitment to security has never been more critical or more complex. That's where Vanta comes in. Businesses use Vanta to establish trust by automating compliance needs across over 35

frameworks like SOC 2 and ISO 27001, essentialize security workflows, complete questionnaires up to five times faster, and proactively manage vendor risk. Vanta not only saves you time, it can also save you money. A new IDC white paper found that Vanta customers achieved $535,000 per year in benefits, and the platform pays for itself in just three months. You can join over 9,000 global companies like Atlassian, Quora, and Factory,

who use Vanta to manage risk and prove security in real time. For a limited time, our audience gets $1,000 off Vanta at vanta.com slash markets. That's vanta.com slash markets for $1,000 off. Support for the show comes from public.com. All right. And if you're serious about investing, you need to know about public.com. That's where you can invest in everything stocks, options, bonds, and more. They even offer some of the highest yields in the industry, including the bond account 6 percent or higher yield that remains locked in even if the Fed cuts raise.

With Public, you can get the tools you need to make informed investment decisions. They're built in AI tools called Alpha. Doesn't just tell you if an asset is moving. It tells you why the asset is moving so you can actually understand what's driving your portfolio performance. Public is a FINRA-registered, SIPC-insured, US-based company with a customer support team that actually cares. Bottom line?

Your investments deserve a platform that takes them as seriously as you do. Fund your account in 5 minutes or less at public.com slash ProfG and get up to $10,000 when you transfer your old portfolio. That's public.com slash Prov G. Paid for by Public Investing, all investing involves the risk of loss, including loss of principal, brokered services for US listed registered securities,

options and bonds, and a self-directed account are offered by Public Investing Inc., member FINRA and SIPC. Complete disclosures available at public.com slash disclosures. I should also disclose I am an investor in public Support for the show comes from the fundraise flagship fund real estate investing is boring Now prediction markets on the other hand or even the stock market which can swing wildly on a headline Those will keep you on the edge of your seat

But with real estate investing there's no drama or adrenaline or excuses to refresh your portfolio every few minutes. Just bland and boring stuff including diversification and dividends. So you won't be surprised to learn the Fundrise Flagship Real Estate Fund is a complete snoozefest. The fund holds $1.1 billion worth of institutional caliber real estate managed by a team of pros focused on steadily growing your net worth for decades to come. See? Moring. And that's the point.

You can start investing in minutes and with as little as $10 by visiting fundrise.com slash propg. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. Find this information and more in the fund's prospectus at fundrise.com slash flagship. This is a paid ad. We're back with ProfG Markets. Nvidia reported fourth quarter earnings that beat expectations with revenue up 78% from a year earlier. The company also forecasted higher than expected first quarter revenue, with the CFO confident in a quote significant ramp in sales of Blackwell, which is its next generation

AI chip. However, Nvidia also warned that profit margins would be tighter than expected as it accelerates the rollout of the Blackwell chip. After fluctuating between gains and losses, the stock actually fell slightly in extended trading. Scott, just your headline initial reactions to Nvidia's fourth quarter earnings and perhaps the market's reaction to those earnings. You had it, you summarized it perfectly, Ed, and that is the market is so used to these companies blowing away expectations that when they don't beat expectations, they don't meet expectations.

And Nvidia beat expectations on the top and bottom line and I think the stock's off today. I mean, it's not off hugely, but you summarized it perfect. Expectations have become such that you're expected to massively blow away expectations. But I don't, I didn't take a ton away from this. Do you have any thoughts? I think what the market wants from Nvidia now is they need a home run to be fine.

They need to consistently hit a home run. And only if they knock the ball literally out of the park, will, will they get a bump in the stock? But we can just look at the numbers here. So sales up 80% to 39.3 billion, net income up 80% to 22.1 billion, beat on revenue by 3%, beat on guidance by 5%. I think the most important stat here

is their data center revenue beat. They beat data center revenue expectations by 6.3%. And that's, as we know, the most important thing for Wall Street right now. I think they did $115 billion in data center revenue in 2024. It's just unbelievable. So it was a great quarter, but as you say, great isn't good enough. And so they, they kind of flatlined, but you know, in my book, that's kind of a win for Nvidia. You know, I think a lot of people are expecting at this point that Nvidia,

you know, they're looking for anything to bring the stock down. And so the fact that they were able to maintain themselves is kind of impressive. We should probably talk about DeepSeek and what Jensen Huang said about DeepSeek. He mentioned it pretty much first thing on the call. He said, I'll just quote what he said. He said, quote, models like OpenAI, Grok 3, and DeepSeq R1 are reasoning models that apply inference time scaling, and reasoning models can consume 100 times more compute. So he kind of sounded bullish on DeepSeq in a way.

He then went on to say that DeepSeek is quote, an excellent innovation, but even more importantly, it has open sourced a world-class reasoning model. Nearly every AI developer is applying R1 or techniques like R1 to scale their model's performance. So if I were to translate what he's saying about DeepSeek, it's that DeepSeek can only be good for Nvidia. He says it can consume more computing power, and I'm not totally sure about that, and I

don't really believe him, given what we saw in the research paper where DeepSeek said, no, we consume less compute. But he also said that it's democratizing AI, which will ultimately lead to even more demand for computing power. And on that point, I do agree with him. I think that, you know, if DeepSeat can make this stuff more accessible, then we're going to see more people accessing it and more people using this stuff, which is only going to lead to more demand for compute, which can only benefit Nvidia. This is... We've talked about this before. I think this is Jevin's paradox. going to lead to more demand for compute which can only benefit Nvidia.

We've talked about this before. I think this is Jevons paradox. A lot of tech bros talk about this. This paradox that the cheaper and more efficient a product gets, the more it is consumed in the real economy. And so Jensen's comments at the start of the call were, this is what's going to happen. It's more accessible. It can only benefit us.

I'm sort of with him. I think the 100 times more compute power comment was probably a little bit misleading, but you know, I look at this and I think, okay, Nvidia is crushing it. Keep going. It's great IR. It's great investor relations to turn a bug into a feature, right? That, that a confronting it head on, let's talk about DeepSeek and this

is why DeepSeek is good for us. It's a very well-run company. He's an outstanding CEO. I think Josh Brown said that it's up a hundred X and Josh, I guess Josh has owned it for 10 years. Yeah, I couldn't believe when he said that. By the way, we were wondering, how much do you think he put in?

I have no idea, but I know I met Josh through his partner, Barry Ritholz, who's also a very smart guy. And they're trying to be sort of a hybrid between a hedge fund and their business model and Vanguard. And that is every time their AUM goes up, they charge less money, but they're very, they're not stock pickers. Well, I guess they're stock pickers to a certain extent, but they're very much. They're sober about it. Yeah. They're one of the few funds I've ever thought investing in and even paying fees because they're just very sober kind of level-headed guys.

And they give it kind of give it to straight cause and now, yeah, those guys are like fun to go out and eat beef and drink bourbon with. They're such like Long Island guys. Like I don't even like basketball. Which is the most important thing in the wealth management business. You need to be. 100%. Yeah. If I was going to go to a Knicks game with anybody and then go have a big Which is the most important thing in the wealth management business. You need to be 100%.

If I was going to go to a Knicks game with anybody and then go have a big stake, it'd be those guys. 100%. Look, it's an incredible company. I'm pissed off. I never owned it. I have a difficult time seeing where it goes from here based on, based on how just expensive it has become, but it was interesting. I mean, I was watching CNBC the night before the earnings and CNBC had probably every single

analyst on their roster come on to talk about this topic and specifically to make a big bold prediction about it. And it was really interesting seeing all of these analysts getting so fired up. Investors are awaiting the most anticipated report of the whole earnings season, just a couple hours from now. The bottom line is they can beat $38 billion in sales for the quarter. It's going to be a great quarter. What they're going to report this quarter is going to be fantastic.

You know, this does remind me of the bubble, but it's on steroids. I mean, there is a data point, a podcast, a rumor every five minutes. By the way, they had Aswath DamMotorin on and his prediction was Nvidia is going to beat, but the stock's going to come down a little bit. Aswath absolutely nailed it as he often does. But I guess the big takeaway for me from watching that and from seeing all of the memes online on Twitter, on Instagram, on threads, this is basically like the Superbowl for nerds now,

for business nerds. That's a new sport, 100%. And there was this great data from the team. Google search volume for Nvidia beat out at 4 p.m. the day of the earnings. It beat out searches for the New York Times, for Wikipedia, for Instagram, and for Chat GPT. So this really is like, yeah, it's the business Superbowl.

It's one of those moments where the entire business community is coming together and they're making predictions and it's a ton of fun. It's a ton of fun for CNBC too. And as someone who's trying to make business news more interesting, I kind of love it. You know what would be a total gangster move? Is Avaliad convinced Nvidia to become a petroleum company. Yeah.

Ah, that'd be a test. I think you should become an activist and maybe you can pitch that next time. There you go. We'll be right back after the break with a look at the new American gold card. If you're enjoying the show so far, hit follow and leave us a review on Proficy Markets.

Support for this show comes from Indeed. You just realized your business needed to hire somebody yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. With Indeed sponsored jobs, your post jumps to the top of the page for relevant candidates and you're able to reach the people you want faster. And it makes a huge difference. According to Indeed data worldwide, sponsored jobs posted directly on Indeed have 45% more applications than non-sponsored jobs. Plus with Indeed Sponsored Jobs, there are no monthly subscriptions, no long-term

contracts and you only pay for results. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners to this show will get a $100 sponsor job credit to get your jobs more visibility at indeed.com slash vox ca. Just go to indeed.com slash vox ca right now and support this show by saying you heard about indeed on this podcast indeed.com slash Vox CA terms and conditions apply hiring indeed is all you need We're taking Vox Media Podcasts on the road and heading back to Austin for the South by Southwest Festival March 8 through the 10th What a thrill chicken fajitaseso, strawberry margarita, extra shot of tequila. There you'll be able to see special live episodes of hit shows,

including our show, Pivot, Where Should We Begin with Esther Perel, A Touch More with Sue Bird and Megan Rapinoe, Not Just Football with Cam Hayward, and more presented by Smartsheet. The Vox Media Podcast stage at South by Southwest is open to all South by Southwest badge holders. We hope to see you at the Austin Convention Center soon. I'm not joking, I love South by Southwest. The people are a ton of fun. It's a great time.

If you do come, come up and say hi. Visit voxmedia.com slash sxsw to learn more. That's voxmedia.com slash S-X-S-W to learn more. That's voxmedia.com slash S-X-S-W. We're taking Vox Media podcasts on the road and heading back to Austin for the South by Southwest Festival, March 8th to the 10th. What a thrill! We'll be doing special live episodes of hit shows including Pivot. That's right.

The dogs going to the great state of Texas. Where should we begin? With Esther Perel, a touch more with Sue Bird and Megan Rapinoe, Not Just Football with Cam Hayward, and more presented by Smartsheet. The Vox Media Podcast stage at South by Southwest is open to all South by Southwest badge holders. We hope to see you at the Austin Convention Center soon.

Visit voxmedia.com slash S-X-S-W to learn more. That's voxmedia.com slash S-X-S-W. We're back with ProfGMarkets. Trump is launching a new Gold Card program, offering residency and a path to citizenship for wealthy investors, but it comes with a steep price. Participants will need to pay $5 million directly to the US government, with the funds going toward paying down the federal deficit. The program, set to launch in just two weeks,

will replace the existing EB-5 visa program, which grants visas to foreign investors who finance US projects. However, immigration experts argue that Congress must approve this change first. Scott, I'd like to just quickly start off by clearing something up on this EB-5 thing. The Trump administration is saying that this is no different

from the EB5 program, which was set up in around 1990, I believe. And this is a program where you pay a million dollars to get a green card. And they're saying, well, this is the same. It's just 5 million. Not quite. The EB5 visa is actually quite different

because it's a conditional visa that is dependent on your ability to prove after two years that you have created and invested in a legitimate American business and you have to prove that you have created at least 10 full-time jobs for Americans. So it's different in the fact that it requires actual real investment, not just your money, but your time and your effort and real commitment. And I think to me that is the crucial difference here.

This gold card is very simply pay to play. You hand over the cash, you get the visa, one and done. And I think when it comes to citizenship, that is an important thing to recognize is you're actually investing your time and your effort and your commitment versus just your money. Well, this isn't anything new.

Europe has a bunch of these programs. I think they garner or different countries in Europe garner about three billion in euros each year from selling different visas. I'm on a tech talent visa here in the UK where I convinced them that I would bring unique skills and they gave me a five-year visa. But there was a similar program, I think, in the first Trump administration, where if you purchased a certain amount of real estate,

maybe it was for people out of China, and Canada has these programs. I mean, this isn't anything new. What's different about this is the price point. And at $5 million, that's just exceptional. And someone did some analysis and said that if you, if you're going to pay $5 million for a visa, it means you're worth at least $25 million. They're just not that many people that could afford this thing. So this bullshit that we might raise $5 to $50 trillion. I don't have a problem with it.

The only thing is, at this price point, if you can't figure out a way to get into America or another Western country for a lot less than this, it means you're on the run from the tax authorities or you're pretty shady. I mean, there's some analogies here. So, when people ask me, by the way, I spoke at the Royal Academy of Arts last night.

Ed, I don't know if you heard if you read about it in the press. I did hear, a friend of mine said he met you, this guy. Oh, the former Goldman guy came up to me and he was like, I know Ed Elson. I'm like, well, I'm good for you. He's a nice man. Very cool, the Royal Academy is very cool.

Yeah, it was like a London highlight for me. Anyways, but people always ask in Q&A, how would you distinguish the US from America? And I say, look, my sense is, unfortunately in the UK, most of the people I know, including the people in this room was room of very successful people. They're servicing wealth built or made somewhere else. And effectively, some form of this was a hugely successful program for Britain and that is,

I think it was in the 90s, Tony Blair or the odds put in place really strict private property laws. And that is he said, I don't care if you're an African warlord or a Russian oligarch, if you bring a hundred million dollars in the UK and you buy a 30 million dollar house in Mayfair, they can't come for it. I mean, they meaning any other government can't come and take your shit away. Once you have private property here in the UK or you have money in our banks, no one can come for it. And people would argue it attracted some unsavory characters. At the same time, the majority of the capital and the majority of people attracted were just very successful people. And over the last 30 or 40 years, and I know this firsthand, having

come to the UK once or twice a year for the last 40 years, London just got a dramatic facelift because it attracted so much capital. The U S attracts people who want to make money. The UK and a lot of these places attract people who want to spend their money or shelter it. And I wonder what kind of person are we gonna attract if they have to spend $5 million to get into the US? One, it's gonna be someone very rich

who quite frankly is a little bit in a hurry. And why are they in, okay, they're rich and they're in a hurry and willing to give $5 million to get into the US. That says to me like, okay, the local tax authorities or the local law enforcement is circling, right? And they're closing in on me and I need to get out and get to America.

And so it'll be, what'll be really interesting. First off, this just isn't going to raise that much money because I just don't think there's that many people. The market, the total addressable market here is not that big. The most interesting thing about this will be some great investigative journalist will get a source on the inside and he or she will get the names of the 100 people that do this, the first 100, and it's gonna be really interesting to profile those people.

And in one way or another, what this is is people on the run would be my guess. People who want to get out of the reach of tax authorities or law enforcement in their host nation because there are cheaper ways to get to America than a $5 million. This is sort of like giving the Trump administration or in the Clinton, and Clinton did this too,

a huge donation hoping for a pardon. To me, this is like effectively a $5 million. You're buying a pardon, if you will, from another nation because I wonder if, especially with the Trump administration, if part of the wink wink around this is you can't be extradited by another country. I just want to emphasize the numbers here. I mean, you mentioned how the total addressable market is not that big. I just want to get concrete here.

So Trump said he had this press conference and with the cabinet, he said, if a million people buy the golden visa, that's $5 trillion to pay down our debts. Then he said, if 10 million people buy, quote, which is possible, that's $50 trillion. Let's just be very clear here. Credit Suisse did this analysis of ultra high net worth individuals across the world. So that's people worth 50 million dollars or more. There are only 264,000 ultra wealthy people in the world. And by the way, 150,000 of those people are American. So that only leaves you with

114,000 people left over and only those people would even consider getting this golden visa. I think at most this generates maybe a couple hundred billion dollars. More likely, I think, would be just a few billion dollars. So I just want to be clear about the numbers here. As you said, your instinct was, it doesn't make sense. I'm looking at the numbers. It does not make sense. Now the price we pay for that tiny little bit of additional revenue to me is very high. And I hate this.

I'm surprised you don't hate it as much as I do because what this is basically saying is that citizenship in America is now for sale. Well, it has been for a while. Just to be clear, if you have money, you've been able to get into the US for a while. Not with this level of swiftness. I mean, I don't like this. And I look at you, I think London is the great comparison. I look at what's happened to London. When you go to Knightsbridge, yeah, it's wealthy, but it's also a ghost town

because you've got hundreds of these ultra luxury apartments with no one in them because it's just a vehicle for these Russian billionaires who want to park their money somewhere safe. Usually that money was made in very ugly ways and so they buy these giant apartments at One Hyde Park. And so America's decided, oh yeah, we like that. Let's do that. But I need to get your official, your official, where you land on this gold visa thing. What I'm hearing from you is this is stupid, but it's not that problematic

because America has always been for sale. Every Western nation at one point or another has been selling visas, has been basically, we live in a capitalist economy. If you have money, you can figure out a way to become a citizen of almost any nation, uh, with enough money. And a lot of people would argue the Trump administration is doing what the government's always done

and Democrats have always done. They're just more transparent and more brazen about it. I've engaged in this arbitrage and that is Claude De Jocus, arguably one of the two or three most talented people I've ever worked with, a Canadian, went to Yale, a gymnast, just so impressive, great presence, hardworking, working at L2, brings me access to kind of speak to you, brings me to the conference room and says,

I'm really sorry, but I just got a message or a letter from the INS saying I have to return to Canada. And I'm like, fuck that. I'm like, don't worry about it. I'm like, I can figure this out. I've got money. And, you know, stay put, don't worry about it. And we can figure this out. I've got money. And, you know, stay put, don't worry about it. And we'll figure this out.

I lawyered up with immigration attorneys and Claude has never left the US. Oh, really? Cause I have all my, I have a lot of talented friends who are having issues with this. I have a Canadian friend. It's gotten much worse the last couple of years, the last two or three years, basically since the first Trump administration. And this is just shooting ourselves in the foot

that we're heavy handed with the wrong people. We need to have borders. We need to be, I'm all for deporting criminals. I'm all for the whole immigration debate. And we're going way past here, but going to the low end. If you wanted to solve this illegal immigration problem, all you would do is find employers, but no one wants to do that.

But at the high end, this is just, it's again another distraction. It's not gonna raise that much money. The most interesting thing is that cast of characters it's gonna draw who actually are willing to pay 5 million bucks so they can camp out. It almost feels like the most expensive witness protection program in history.

That's good. Let's take a look at the week ahead. We'll see the unemployment rate for February, as well as earnings from Costco, Broadcom, and CrowdStrike. Scott, do you have any predictions for us? I was reading that essentially, if you look at the history of different sectors or categories of stocks

and 100 being the most expensive they've ever been and zero being or one being the least expensive they've ever been, US growth stocks are at 98 right now, meaning that only 2% of the time in history have they been trading at higher multiples on earnings. At the same time, European value stocks are trading at 2%, meaning 98% of the time, they have traded at higher multiples throughout economic history or modern economic history. And so this isn't a prediction, but this is what I'm doing.

I am starting to sell down some of my US tech stocks, Apple, Amazon, and some others, and rotating into these very boring European value ETFs. Good luck. But that's what I love about this strategy, because about the time everybody throws in the towel, I remember probably the best investment, I would say in terms of a lack of volatility, is in 2010, I started buying homes,

actually my partner, I can't take credit, buying homes out of foreclosure in Florida. And nobody wanted Florida real estate. And it didn't seem like it was ever gonna get fixed. That's when you invest. And I feel like just your reaction, that means it's time to invest in European value companies. And there's still some great companies, Nestle, L'Oreal, British Petroleum, Shell, Mercedes.

Anyway, so I think this rotation is about to happen, or it might be three months, it might be three years. I think if you have a 10 10 year time horizon, I think you trim out of US growth and you trim into Florida real estate, which right now is European value. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Allison Weiss, Mia Silverio is our research lead, Isabella Kinsel is our research associate, Drew Burrows is our technical director, and Catherine Dillon is our executive producer.

Thank you for listening to Proffgy Markets from the Vox Media Podcast Network. Join us on Thursday for our conversation with Jonathan Cantor, only on Proffgy Markets. Five times You held me in kind reunion As the world turns The cold turns And the dark lies In love, love, love, love