The Prof G Pod with Scott Galloway
Prof G Markets: Project Stargate & The Rise of Oracle + Scott’s Stake in La Equidad Football Club
Mon, 27 Jan 2025
Follow Prof G Markets: Apple Podcasts Spotify Scott and Ed open the show by discussing Netflix’s fourth quarter earnings, Johnson and Johnson’s latest earnings call, and potential TikTok bidders. Then Scott breaks down the new Stargate initiative, explaining how it served as a strategic branding victory for the Trump administration and will likely enhance Oracle’s influence within the tech industry. Ed offers his thoughts on what the project reveals about the evolving AI industry. Finally, Scott discusses his stake in a Colombian soccer team, explaining how the deal came about and how it aligns with his broader investment strategy. Order "The Algebra of Wealth," out now Subscribe to No Mercy / No Malice Follow the podcast across socials @profgpod: Instagram Threads X Reddit Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What are the latest Netflix earnings and their implications?
I think the most interesting thing are the price hikes you mentioned. You said prices have doubled in the last 10 years. That's actually just the premium subscription that has doubled. So a premium subscription now costs $25 a month. double where it was around 10 years ago. It's risen faster than, of course, faster than inflation and faster than any of the other pricing plans Netflix offers.
But to me, where it gets really interesting is when we look at the difference between the price of a premium subscription with Netflix and a standard subscription, because that difference has ballooned recently. So 10 years ago, The difference between the most expensive and the cheapest option on Netflix was only $5. Today, it's a difference of $17. So the Delta has more than 3x.
And to me, this is a prime example of what you have pointed to in the past, which is... I think what I would call inequality pricing, where you have this growing disparity between the rich and the poor in America, and it's now being reflected in the pricing strategies of even our most basic products like Netflix.
I mean, we used to see this a lot in air travel or in events, but we're now seeing it in very standard consumer categories like streaming. So it feels like this tiered pricing strategy is... basically becoming ubiquitous. It's like we increasingly have products for poor people and products for rich people. And that applies to streaming.
It applies to dating apps, which we've talked about, even clothes and even food. There are very few instances today, it feels like, where a rich person and a poor person are buying the same thing.
Yeah, but Netflix is trying to have it both ways in the sense that there's usually Android and iOS. iOS is a phone that costs three times the monthly salary of a Hungarian citizen, and Android is essentially free with a phone contract. And the world has kind of gone iOS and Android across most categories. It's Tiffany or Walmart, right? It's Emirates Airlines or Southwest.
In the case of Netflix, they said, I mean, that appetite, their appetite is so voracious. Oh, they'll never do original programming. They just do CDs or DVDs of other movies. No, they go into original programming with House of Cards. Oh, they'll never do live events. Some of the biggest live events ever streamed, right? They're absolutely going to go into news. They will never go into advertising.
Well, now they have an ad-supported tier, and I believe 55% of their new signups are from the ad tier, which I was very skeptical on, and I was wrong. So they're basically segmenting the market. Well, who could afford $25 a month? I mean, that's only for the top, top, top. That's right. But still a lot of people are going to pay that.
So they've basically said, we're, I mean, we're going after, they're going after all of media. I wouldn't be surprised if at some point they have a music offering. They're looking at everything, but broadcast television used to be, we'll always have sports, right? Because we're the only ones that can aggregate this large an audience for advertisers so we can pay the NFL or the MLB more.
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Chapter 2: How is Johnson & Johnson navigating healthcare costs?
And then, of course, there are the suggestions we heard from Donald Trump last week. He said he'd be open to Elon Musk buying TikTok. I don't think Elon Musk has said anything himself about that interest, but there are rumors. And he's also said he'd be open to Larry Ellison, the founder of Oracle, buying TikTok. A lot of people on this list, a lot of rumors kind of swirling around.
Do you have any predictions, Scott, on who is going to end up owning this thing?
I think there's so many moving parts here, it's difficult to predict. But the three criteria are the following. Capital, that takes Mr. Beast and Mr. Wonderful. They just don't have the capital. And they're just saying, look at me right now. It's a way to get your name in the headlines. I would say that's like 0.1% chance they're going to be involved in a deal. You need massive capital.
You also need massive compute because it's not like you can spin up that type of compute to handle that type of app overnight. And more than anything is the third C or the third and the fourth. You need the CCP. I just think the Chinese Communist Party is going to decide who gets this or who doesn't. And so who kind of fits those criteria? One, it might be nobody at all.
It might be, all right, the U.S. claim passed a law with 80 senators, 79 senators signed into law, and then they blinked when the deadline came. They had six months. Now I just don't see why they would feel any sense of urgency to do anything. It's 20% of the revenue. They might just say to the good folks at ByteDance, sorry, we're not putting up with this.
You're going to have to make, you know, grow the stakeholder value in other nations. We're not acquiescing to this bullshit. We don't want to set this precedent. If they do a deal, it's going to be sold to someone who they think they have leverage over.
Capital compute and CCP leverage, that kind of adds up to sort of what I call an Ellison, Musk, Microsoft kind of triopoly because people will say, oh, he's just Elon being Elon. He's got Asperger's. He says things he shouldn't, but that's part of his genius. You can't have a genius like that who doesn't make these errant mistakes. That's the beauty of him. He's so raw. Guess what?
When's the last time you heard him say anything offensive about China? He doesn't. He seems to have remarkable maturity and self-control around China. When Brazil stuck up the middle finger to him and said, no, we're passing this law and we're kicking your ass out unless you do the following things, all of a sudden he's gone quiet on Brazil. He is very capable of acquiescing.
He's a big free speech advocate until he's doing Twitter in Turkey and Erdogan says, no, that won't hunt here. And he says, no problem, no problem. We'll censor like fucking crazy here. So I and given that he has factories and a lot of business in China, I think that CCP probably looks at him and says, that's our boy. We have leverage over this guy.
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Chapter 3: What is Project Stargate and its significance?
I think I was their diversity hire. Basically, so this group had no problem raising the money and they wanted people that would either add value. They didn't need that much capital. I think they wanted people who had a would raise awareness for the club, who seemed to be good stakeholders or good fiduciaries.
And because I had met the people organizing the group and because I had met Rob, I think they thought, what the hell, let that crazy professor in. And they... You know, I know a decent amount about branding. I'd like to think I'm a good fiduciary. I've served on a lot of boards. And I'm, you know, the world knows I love taking my sons to see the beautiful games.
So maybe that'll bring some attention to the team. And they know I'm, you know, they know I'll vote with my feet. I'm going to go to, chances are in the next 12 months, you're going to be sitting at Metropolitana Techo, I think is the name of the stadium, right? with me at a La Equidad game. So I'm into this. I'm into this stuff.
And they were nice enough to, were good enough to let me into the investor group. So I'm super excited. It's just weird that all the moons line up like this. If it had been a great team in Thailand, I just couldn't have done it because I wouldn't have been able to go to games. If it had been a great team in the Premier League, I wouldn't have done it because I don't have the money to
And if it had been a great team, you know, at a reasonable cost with a group of people I didn't know, I wouldn't have done it either. So this was just like— And the Colombians are just insane about their football.
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Chapter 4: How does Trump's branding impact Oracle's influence?
Chapter 5: What are the potential bidders for TikTok?
But it's relationships. It's people calling each other and saying, I have an idea.
Yeah, the relationships that are forming are so interesting. You know, I've talked before about how I believe that big tech is sort of collaborating to create this monopoly in AI because all of these companies, they're investing in each other's AI companies, and it's all sort of turning into this one mega company. With this project, though, I am starting to see it a little differently.
More, as you say, it feels like there's a consortium developing, and that's one team. And I think we could probably call it the OpenAI team. And then there's the other guys. And I think it would be fair to call that
the Anthropic team, because what you have now, you've got companies like Microsoft, Nvidia, and Oracle, who have either invested directly in OpenAI or have formed some sort of partnership. And then you have this other insurgent AI company, Anthropic, And Anthropix investors are Google, Amazon, and Salesforce. And they have only invested in Anthropic. They haven't been investing in OpenAI.
The other side to this, which is interesting, is where does this leave Elon Musk? You know, he's not really on any team. And I think that would explain his comments on Twitter, which... talking about the fact that they're trying to raise $100 billion. He tweeted, quote, they don't actually have the money. SoftBank has well under $10 billion secured. I have that on good authority.
So he's basically shitposting this Stargate project and saying they're not going to pull it off. Sam Altman then came back at him. It's like a full-on catfight. And he said, quote, Wrong, as you surely know. I realize what is great for the country isn't always what's optimal for your companies, but in your new role, I hope you'll mostly put America first. This is just fun. I just love this.
What's your reaction to Elon and his upset about this whole Stargate situation?
I've known a lot of billionaires, and there's a bit of a cartoon that billionaires are Monty Burns who own the nuclear power plant and crawl over people and are nice people and, you know, sell organs in their spare time.
I have generally found that really wealthy people, especially self-made, really wealthy people are generally really nice people, really generous, really philanthropic, really polite, really good manners, really patriotic. Because in order to get to that level of success, you have to build allies along the way. I've never known anyone who's due for a bigger fall than Elon Musk.
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