Is Gen Z Completely Cooked? With Ed Elson

The Compound and Friends

Downtown Josh Brown and Michael Batnick interview Ed Elson to dissect the current AI spending boom, regulatory theater, and the widening generational wealth divide. The conversation

Key takeaways

• Ed Elson characterizes the White House AI meeting as performative theater, noting that CEOs like Sundar Pichai and Dario Amodei delivered 'hostage statements' to appease President Trump rather than express genuine views on safety.
• Jensen Huang's controversial claim that students no longer need to know long division sparked a debate on whether AI acts as an educational crutch or a democratizing tutor, with Elson citing OECD data showing lower test scores among heavy AI users.

Main topics

• AI regulation & safety theater
• Private vs public market valuations

Notable quotes

"That was a hostage statement."

Conclusion

The episode provides a grounded critique of tech optimism and generational economic

Transcript preview

Speaker 2 (0:00) It is difficult talking into a microphone. And I've noticed this increasingly about myself that my brain breaks all of the time. And I think when you're talking to somebody in like normal life and you sort of stumble, like they just fill in whatever word you're looking for. But Speaker 1 (0:12) when you're on the microphone, you're like. That's why you got to do it like a bazillion times. So Scott is incredible. Like his brain, Speaker 2 (0:20) his brain does not break on Mike. Josh's brain, your brain doesn't. No, Josh's Speaker 3 (0:23) brain never breaks. So Speaker 2 (0:23) I always like lose the sentence or lose the word that I'm looking for all the time. I Speaker 3 (0:27) don't Speaker 2 (0:27) think you always do. Speaker 3 (0:28) I mean, it Speaker 2 (0:28) feels, I feel like I do it a lot. You never do. Scott never does. Speaker 3 (0:32) I told you, I listened to your conversation with the guy from Hamilton Lane that you did it this week. Speaker 3 (0:39) I thought it was like one of the best things I've ever heard you do. And maybe it's because you know the topic so well. It was like a flawless, no um, no uh. Like as soon as he finished a sentence, you had the next question ready. Well, thank you. And you reacted to his statements immediately. I rarely Speaker 2 (0:57) feel like I finished something. I'm like, yeah, that was pretty good. Speaker 3 (1:00) But I did do a good job. But also, Speaker 2 (1:01) I know the content and he was very good. So he made it easier. Speaker 3 (1:05) He was very good too. When Speaker 2 (1:07) you do a bad show, how long do you think about it for? Speaker 1 (1:10) I used to think about it for weeks. Now I think about it for hours. Weeks? Yeah. I'm hours. But the thing I've learned is that Speaker 2 (1:17) the more you do, the less each one matters. And there's also less time to work because you have another part the next day. You've got another thing to figure out. And nobody cares. Speaker 3 (1:26) Are you in a lot of two-way conversations with your audience? Do you get a lot of feedback and do you respond to any of it? Do you use that to try to improve the show? Speaker 1 (1:38) Yeah, I do. But I think you got to take everything with a grain of salt because people online are generally insane. I don't mean comments. Speaker 3 (1:44) I mean, like, literally somebody comes into you and says. says something constructive but critical. Not in an open forum. If they're Speaker 1 (1:54) right. Okay. Sometimes they're wrong and I'm like, you're wrong. So I Speaker 2 (1:57) feel strongly about this. I very much not try to. I do avoid the comment section. Speaker 1 (2:04) Yes. Speaker 2 (2:04) Because Bill Simmons said this and it crystallized with me. Because obviously, like everybody else, it's weird to see strangers talking shit about you in a personal way. It's just a bizarre feeling. Speaker 1 (2:13) Yeah. Speaker 2 (2:13) I understand and I'm... I'm thrilled that people even care to listen to us. So I'm not mad that people talk shit. That's part of the game. I accept it. I totally get it. But I don't want to subject myself to it, number one. Like, it's not healthy. But number two, and more importantly for the audience's point of view, I don't—I want to say what I want to say. Exactly. Without a random anonymous person commenting in the back of my brain, it's not fair to the audience because the audience isn't reading the comment section for the most part. So why would you like steer the conversation away that's going to like make, like try to avoid landmines? Speaker 1 (2:42) Just to please them. That don't exist. You're Speaker 2 (2:44) just Speaker 1 (2:44) going to say the things that they want. Then you're not going to say your opinion anymore. Speaker 2 (2:47) And I think the most lame thing that a podcaster can do is talk to the negative comment section. That's not what the audience is there for. They don't give a shit that somebody. Speaker 3 (2:56) Oh, fight with the comments? Through a tomato. Yeah. Like Speaker 2 (2:58) they don't care. Speaker 1 (2:59) You got to move on. I think some people say don't read them at all. Zero. I think that it's worth. just checking them out and getting a sense of just where people land. But at a certain point, you don't have to anymore. Yeah, I think read them and don't take them too seriously. Every now and then. Speaker 3 (3:21) Here's a happy medium. Skip the comments entirely. Speaker 3 (3:26) But pay attention to the analytics. Speaker 1 (3:29) Of course. Because Speaker 3 (3:30) that's people putting their money where their mouth is. And by money, I mean their actual time and attention. Yeah. So if you do a show, which we had Ed Zitron on. Yeah. Speaker 3 (3:43) He's f***ing crazy, but he's a great guest. And we really enjoyed the conversation. And by Speaker 1 (3:48) the way, he does his homework. Oh, yeah. Listen, I don't have to read his conclusions, but he's… He's Speaker 3 (3:54) actually Speaker 1 (3:54) doing his homework? Speaker 2 (3:55) That's right. He Speaker 3 (3:55) has Speaker 2 (3:55) 75 quotes and numbers ready. Boom. Yeah, he was very prepared. Correct. Speaker 3 (3:58) He's a great guest for any show that wants to have an opinionated, spirited discussion about AI, which is the most important topic of our time. That's what you want. You Speaker 1 (4:09) don't have to agree with him, but… You know, his view is valid, I think, because he's doing his homework. He's looking at the numbers and he's coming up with a view. You don't have to agree with it. So we Speaker 3 (4:19) did a great show. And then I looked at the analytics. First of all, the show did huge numbers. So, yes, we had people in the comments like, oh, that guy's the worst or Charlin in. He doesn't work in finance. He's not he's saying, like, don't even invest on what my opinions. I'm just spouting off like. Every criticism you could think of. But you know what? Forget about the views. People stayed for the whole thing. Yes. The thing that I love. Like if I have a guest where people drop off two-thirds of the way through in big numbers, I'm paying attention to that. That's signal. Yeah. It's not one guy spouting off in the comments. I don't want my – I never want my fans and my audience to be like, this is not a good use of my time. Exactly. Then I'm failing. Speaker 1 (5:04) And you don't have to agree with them. And that's the point of having guests on is to have a different point of view. You guys have your point of view, have the guest on, then bring in on another guest who has a different point of view. This is the whole point of all of this. To be clear, Speaker 2 (5:15) I am, if anybody heard me say f***, audience. That's obviously not what I'm saying. Speaker 1 (5:19) I just say, I think he knows the cameras are rolling. Now he's got a hedge. No, Speaker 2 (5:24) no. I think you're doing your audience a disservice. If you focus on the negative comments, bring it into the show. That's my point. Speaker 1 (5:30) I agree. And Speaker 2 (5:30) you can feel the anxiety on the host. Like, Speaker 1 (5:33) well, this is what I said. I'm trying to justify that. Just it's okay. You have an opinion. Well, that's it. Out of Speaker 3 (5:39) respect for the audience. Michael is not going to slavishly focus on what the like the one percent of the audience thinks just because they're the loudest exactly Speaker 1 (5:49) then you wouldn't be here you wouldn't be telling your own opinions that come from your own experience from your own view your own data you wouldn't be here telling your opinions if all you cared about is what other people think so did you Speaker 2 (6:00) did you did you Speaker 1 (6:01) go to school for finance like what is what is your my i went to princeton uh and i studied classics and i was you know deep into Just like us. I was going to say, are we looking at a mirror? Speaker 3 (6:14) That's Speaker 2 (6:15) crazy. Speaker 1 (6:16) Wait, Speaker 2 (6:17) what dorm? Speaker 3 (6:20) What dining club do you belong to? All right, so Speaker 2 (6:22) Princeton Classics. Go on. All right. I would Speaker 3 (6:25) have said Princeton because you told me the story, but I don't remember. But you had a great story of how you met Scott. Let's hear it. Because I know it, but Michael doesn't know it. Well, I Speaker 1 (6:37) was a huge fan of Scott for a long time. I was listening to his podcasts. And then I found out that an old roommate of mine, I was listening to one of his episodes, and I found out that an old roommate of mine, his mom was a guest on the show. I'm like, oh my God, this is my hero. So I try to get connected. I have a kind of awkward phone call with Scott, but I try to make my pitch. I end up being his intern. He hires me out of college. I work with him doing everything, helping him with his books and his research and his decks. And then one day he says, okay, I want to start a podcast. I need someone to read the news. Speaker 3 (7:10) And I said, okay. I was on one of those first episodes with you guys. Right. And I would Speaker 1 (7:14) literally read the news. Yep. I would just, boom. I had a script. I'd write up what happened the previous day. Robin Quivers. Exactly. And eventually I start realizing, okay, I have a viewpoint. I want to start expressing it. So I do. Podcast grows, and now we have a relationship where it is a co-hosting dynamic. I host now four out of five episodes a week, and Scott joins me on one of them. We review the previous week in markets and finance and tech and anything that is relevant to us. And yeah, and here we are. So Speaker 3 (7:49) brag a little bit. The show is on fire. You guys. It's a great dynamic when the two of you are on because you're not the same generation. You don't agree on everything. Speaker 3 (8:01) He actually is a very good listener on the show with you. And I think like him and Kara is obviously chocolate and peanut butter. It's a great combo and they have great banter. I think with you, you probably say more than she says. I think you, like he really gives you room to express an opinion. He's a great listener. Yeah, he is. Better than I am at that. As you'll- Not a good Speaker 2 (8:25) listener? As you'll come to find out shortly. Speaker 3 (8:28) No, I think that's cool. Like I watch, cause I watch you guys on YouTube or whatever, or on Spotify and I'm looking at the screen and there are long stretches where he's just sitting quietly listening and nobody would expect that because it's Scott Galloway. Of course he's doing the talking. So I think that's a really cool dynamic that you guys have. And then you have a lot of the episodes on your shoulders. Speaker 3 (8:53) I think it just works. My wife listens. She started out as a Pivot fan and Speaker 1 (8:58) then Speaker 3 (8:59) discovered Prof G Markets because I was on the show. And you're in her rotation. She loves you guys. Speaker 1 (9:04) Well, I totally agree. And I think it's credit to Scott for deciding to take a bet on someone who is young, on someone who a lot of people would say, why does he get to have an opinion? Why is he talking? I understand it. And if you don't want to listen to what I want to talk about, Speaker 2 (9:20) then Speaker 1 (9:20) don't listen to the show. And that's okay. But I think what he has been really good at is identifying that actually young people, if you give them a shot, they can be pretty good. And I think that that show is sort of the evidence of that. And so I'm super grateful that he was willing to take a bet with me. And he didn't have to do it, but he did. Speaker 3 (9:41) Shout out to Professor Scott Galloway, for sure. Barry and I know Scott for a really long time. He's been at some of our events. We think... We think he's one of the most interesting people we know. He has a Speaker 1 (9:54) fascinating character. Speaker 3 (9:56) Yeah, 100%. And very Speaker 1 (9:58) polarizing. Speaker 3 (9:59) Yeah, well, so that's another interesting thing that I'd love to just hear from you on. So he's not afraid to go there. Like, he talks about sex and tons of politics, especially lately. And I'd imagine that'll get louder as we go into the midterms. He has people on both sides of every debate. He's not afraid to listen to what people have to say. How much blowback do you get depending on who his guest is? And is that something that you can just let run off your back? Or what's that like? Speaker 1 (10:36) Yeah, I sometimes get blowback. if people are upset with Scott and they say, oh, screw you, Ed, for working with Scott. How can you sit there silently Speaker 3 (10:44) while he lets so-and-so say blank? Speaker 1 (10:47) Exactly. So I personally don't worry about that because I know that it has nothing to do with me, but it's a very small minority of listeners. I think most listeners listen to the show and they know that we're different people. We have different views. We have different priorities, different values. And you hear that on the show every episode. because we're arguing with each other. I'm bringing a different perspective. I'm bringing the young person's perspective. He's bringing his perspective. So we push back and forth. And so I think, generally speaking, it's not a problem for me, because I think people recognize that I'm a different entity, different mind, different view. And I think most people can understand that. Speaker 3 (11:22) Yeah, I think your audience is very, you probably have a very highly educated audience, just given the nature of the content and Scott's persona. I think you're talking to people that are accustomed to being confronted with other points of view. Yeah, Speaker 1 (11:39) I think so. Like Speaker 3 (11:39) that's what we aim for. Speaker 1 (11:41) Yeah, I try to make sure that the show isn't too like esoteric or like annoyingly intellectual. It's important to me that we're very clear about everything. Everything's simple to understand. Anyone can understand what we're talking about and understand the point of view. But I think one thing that is probably true about the show is that people who listen to it. are ambitious and they give a shit about what's happening in the world, what happens in markets, what matters, why money matters. I mean, all of these things I think is probably true of most of our audience, which I love because that's how I feel about the world too. Speaker 3 (12:15) Very cool. Well, get ready for some esoterica on today's edition of The Combat. How are we doing, guys? All right, we got John Grayson and Daniel Parra in the house in the control room right now. They will be piloting the show. Thank you guys, as always. Hey, John, what episode is it? Speaker 3 (12:36) Oh my God. Speaker 2 (12:39) This episode is sponsored by Rocky and RockQ from J.P. Morgan Asset Management, two new option-based ETFs for investors looking to complement an income approach led by Hamilton Reiner and an experienced team, ROCY and ROCQ, seek to provide monthly Speaker 3 (12:57) distributions. These distributions may come from stock dividends and selling options, and they may also include return of capital. Both also seek equity upside potential. Speaker 2 (13:07) with less volatility. Speaker 2 (13:50) Today's show is also brought to you by Janus Henderson. At Janus Henderson Investors, we believe working together is the way to work better. Like combining your portfolio plans and our in-depth strategy, your valued assets and our valuable insights, your mission and our vision. Always working in perfect harmony to find the right investment opportunities. Janice Henderson Investors, investing in a brighter future together. Visit JaniceHenderson.com. Speaker 3 (14:28) Ladies and gentlemen, you are now rocking with the greatest investing podcast of all time. Speaker 3 (14:34) I listen to all of them. You can take my word for it. Not the only good show, of course. The control board. Just the gold standard. Speaker 2 (14:42) All right. Guys, my name Speaker 3 (14:44) is Downtown Josh Brown. First-time listeners, welcome to the show. With me, as always, my co-host, Mr. Michael Batnick is with me today as well. Michael, say hi. Hello, hello. All right. And we have podcasting royalty today. My buddy, Ed Elson. Ed is a business writer, analyst. and co-host of the Prof G Markets podcast with Professor Scott Galloway. In 2025, he received the Webby Award for Best Business Podcast. Did we ever win that? Twice. Amazing. And before that, the Honoree Award for Best Co-host. I like that. That's cool. In 2025, he was included. Speaker 3 (15:25) In the Forbes 30 under 30 list. So are you stealing money yet? He's like, I'm going to Speaker 1 (15:30) jail next year. Speaker 3 (15:31) When do you get indicted? His work has been featured in multiple New York Times bestsellers, including The Algebra of Wealth, Adrift, and Siege. Ed Elson. I can't believe we haven't done this yet. So happy to have you. So happy to be here. We're so excited. Big Speaker 1 (15:46) fan of the show. All right. Greatest intro music in all of podcast finance. I definitely agree with Speaker 3 (15:52) that. I definitely agree with that. All right. Question one. AI. It's good? Speaker 1 (16:00) Is that the Speaker 3 (16:01) question? Is that how we're starting? Speaking of giving you room, we're going to tackle this from a markets perspective, but we're also going to get into this from a societal perspective. And I know you're very passionate on that end of the debate. I am too. I just don't spend a ton of time on it just because. the focus of the show, but I do want to do that with you. We have this setup where tech is the everything cycle. Are we starting there? Speaker 2 (16:28) Yeah. So just to frame the conversation, A16Z put out their state of the markets. And one of the first charts is, as Josh mentioned, this is how we got here. Daniel, try it on, please. They have a chart showing that tech is now 55 % of all US capital spending. Speaker 1 (16:45) And Speaker 2 (16:45) they zoom out from the 1960s to today. And this really... does a great job visualizing the story of why all of the most famous and most powerful CEOs in our country were at the White House yesterday talking about technology and the next wave and AI and super intelligence. And this is it. Yeah, that's exactly right. And Speaker 3 (17:07) it really, I mean, I know there is an end in sight, but it's not in sight today. It really, I mean, it looks like it's hockey sticking even from these levels from, I mean, could tech. become 80 % of US capital spending? Yes. As inconceivable as that sounds, again, in 1960, it was 15, and today it's 55. It just, it seems like we're in an, like, these are the times that people look back 20 years later and say, holy cow, that was, that was it. That was the revolution. Speaker 1 (17:39) 100%. Speaker 3 (17:39) All right, so let's start here. From a markets perspective, it's a pretty exciting time for you to be covering the markets. Speaker 1 (17:46) Every day. Every day is an incredible new story. I mean, the White House meeting of all of the AI leaders, I thought was incredible entertainment. I thought the clips were amazing. Trump jabbing at Dario Amadei, trying to get him to say something. Him feeling awkward. Say something Speaker 3 (18:03) positive. Say something Speaker 1 (18:04) positive. Him calling Sundar Pichai a monster, but then saying that as if it's a good thing. And then Sundar Pichai saying, I don't know if that's the right label. I mean, incredible Speaker 3 (18:12) entertainment. He pointed at Sundar Pichai. This guy's Speaker 1 (18:16) a Speaker 3 (18:16) monster who no one knows. He couldn't remember his name at first. Eventually he goes, Sundar. It sounded like he was searching for it. Exactly. So he was like, look at this monster. Speaker 1 (18:29) Sundar Pichai, of course, doesn't know what to do with that because he's never confronted an individual like Trump. So incredible entertainment. And that's it. That's all that was, that meeting. I think that there was nothing. that actually came out of it that actually mattered. We thought that maybe they were going to come up with some level of regulation that was actually important coming out of this AI hysteria, which I know you and I have talked about and we could talk about again. But in terms of what actually got done in this meeting, nothing really got done other than they said Speaker 2 (19:00) - Speaker 1 (19:00) Wait, Speaker 2 (19:00) what Speaker 1 (19:00) do Speaker 2 (19:00) you Speaker 1 (19:00) mean? Speaker 2 (19:01) Superintelligence. We got Speaker 1 (19:02) a Speaker 2 (19:02) new name. What are you talking Speaker 3 (19:03) about? It's not artificial because artificial is fake. Superintelligence. Exactly. Speaker 2 (19:07) Did you watch any of this? This is zero. Okay. Speaker 3 (19:10) You got to find some clips of this. I was watching it. I was watching it yesterday. Melissa Lee and Michael Santoli were, I think their show is the one right after the closing bell, like right after four o'clock. I think it's, I guess it's the close. I don't know. It doesn't matter. They were like stunned because it's $25 trillion of market cap in an impromptu press scrum. in front of the White House. Nobody has ever seen anything like this. This would be the equivalent 100 years ago if you saw like, I don't even know, Warren Harding standing in front of the White House with John D. Rockefeller, Cornelius Vanderbilt. JP Morgan. Like this is... It's totally unprecedented. And he's demanding and pointing fingers. Okay, Speaker 1 (20:01) now you speak. Speaker 3 (20:02) And Speaker 1 (20:03) they go in there and they bumble their way through trying to talk about how AI is actually a good thing. Dario Amadei Speaker 2 (20:08) is Speaker 1 (20:08) saying this. Meanwhile, the anthropic S1 is literally saying that it might extinct humanity. So, I mean, the extent of the hypocrisy here, the way that these guys are folding themselves into bits is astounding. But they have to do it in front of... The big man. And that's why I think this whole thing was, it was total performance art. Donald Trump said, I want you to get in there and I want you to say that AI is going to be nice and AI is going to Speaker 3 (20:33) be Speaker 1 (20:33) safe. You think they needed the coaching? You don't think they know? You watch those clips? Those guys do not know what they're talking Speaker 3 (20:40) about. No, no, no. But you think they needed him to say, all right, I want you to be positive? No, that they know. Like, this is my role here. I Speaker 1 (20:49) think, Dario, yeah, I think they eventually showed up and they realized, okay, the memo here is President Trump wants me to come in and disavow all of the things that I've said in the past about how AI might extinct us. And I'll just forget about the fact that my current employee of the company said that there is a 10 % chance that my own technology is going to wipe out. all of humanity. I'm just going to try to put that aside because I know that the president doesn't like that. I know that, generally speaking, the business world isn't a huge fan of that. I'll show up and say what I'm supposed to say. And you listen to the way that they deliver those messages. Those were not honest expressions of their views of AI. That was a hostage statement. That was President Trump putting them on the spot, doing it well, I will give him that, of saying, okay. Now tell us how actually AI is fine. And who knows what they believe at