Welcome to the week from Prop G Media, where we break down what mattered and what it all means. I'm George Hahn, and it's Friday, June 5th. Today, we get into the growing cost of the AI boom, why one pharmaceutical CEO believes medicine may be more transformative than AI, and why Scott is now rethinking his support for military action in Iran. Let's get into it.
This week, Scott and Ed took Prof G Markets on the road. On Friday, they were in San Francisco, the global capital of AI optimism. And Scott had a reality check ready.
Nearly 50,000 workers have been laid off this year supposedly because of AI, and that's almost as many as in all of 2025. For companies adopting AI, the thesis is simple: AI is going to do, is supposed to do much of the work that humans do. In recent weeks, however, that thesis has hit a roadblock. More and more companies are reporting that despite the enormous power of AI, the technology is actually more expensive than the humans that it is supposed to replace.
Uber, for example, just blew through its entire 2026 AI budget in just four months. According to the CEO COO, it is now getting harder to justify AI costs within the company. Microsoft is cancelling its Claude code licenses across multiple divisions because it's simply gotten too expensive. And over at Nvidia, one executive said that the cost of compute is now, quote, far beyond the cost of employees, which all raises a crucial question for the AI industry, which we just hinted at earlier. And that is: at what point does AI actually stop being worth it? So this has blown up basically in the last 48 hours where many companies are now coming out and saying we're actually not as confident about this whole AI thing as we used to be. And now the question becomes: at what point will AI actually pay off? So I will pose that question to you. At what point is it too much?
I think we're already seeing hints of it, and I think it comes down to incentives. You were talking about how you're trying to incentivize people.
Kind of an interesting part of the ecosystem right now in the different layers is the adoption layer, trying to get people to use it. And companies have put in place the incentives to try and get people to use AI more. But there was a recent survey by a professor at MIT that he found that about 5% of the projects that people are using tokens for, they can actually connect, the CFOs can connect to some sort of return. So while I think that they're really intoxicated, it was like using AI as much as you can and talking about it in your earnings call. It's like adding .com back in the '90s. But look what happened in 2000. This definitely does feel like '99, and I'm waiting for the first CEO to come out and say we have to get procurement involved and we have to dramatically scale back our expenses here. I don't think it's that romantic. I think it's just going to be a traditional Fortune 500 company that starts the narrative of, okay, this has been fun, but we have to dramatically decrease our AI investment because we're not seeing the type of ROI we'd anticipated.
And yet, the IPOs are still coming. SpaceX, OpenAI, and Anthropic are all set to go public this year at a combined valuation of roughly $4 trillion. Scott's advice to anyone holding shares in any of those companies was loud and clear.
Oh my god, sell it. If any of you hold shares in any of these companies, just trust me on this, as a guy who was looking at jets when he was 34. Sell everything. And there's always going to be pressure from the VCs and your managers. Aren't you in it to win it? Yeah, [__] you. I need a house, [__] sell everything.
By Monday night, the conversation had shifted from Silicon Valley to Hollywood and from the companies building AI to the people AI is supposedly replacing. According to McKinsey, AI could redistribute roughly $60 billion of annual revenue across film and television within five years of mass adoption. So Scott and Ed put the question directly to Netflix co-CEO Ted Sarandos: are the industry's fears justified?
I think it's overestimated. I think, like every other technology advance in entertainment and storytelling, it's made the business better and bigger by presenting more opportunity. And I think creators today are going to use it. I've seen this evolution from the beginning of friends who are writers who said, we're going to do everything we can to stop AI, it's going to destroy our careers, to the point where they're using Claude as a writing partner today. And they basically use it, train it to say, this is how I write, this is how I think about character, this is how I move story. Here's everything I've ever written. Now, you're not allowed to write anything for me, but you can bounce ideas off of me all the time, all day long. And it makes them a better writer. They believe it makes them a better writer. It doesn't replace a writer's room, because a writer's room will come up with a couple of good ideas, a couple of interesting ideas, a couple of original ideas. AI is not built to do that ever. I mean, the tool itself is built to give you the most predictable outcome possible, the antithesis of what we're trying to do when we make a TV show or a film.
So will AI help things? I look at things right now of how we're using it in production today. Things like previs. So even just think about technically working out a very complicated stunt shot before you do it, which increases the safety on set. I mean, people forget that people die on these productions all the time. And so these kind of things are making the business a lot more efficient. And again, I don't think it's meant to replace any creativity. I don't think it's designed for that, and on its best day it won't do that. And if somebody says, well, what about if you need a script? You don't need a script that's surprising. You've seen these Hallmark movies and these kind of things that they want them to be predictable. Well, the cost of the script for those movies is about 1% of the budget. So it's not a gigantic savings for anyone to do that or pursue that. So I'm actually much more excited about the upside and the potential of the technology than I'm worried about it displacing creatives.
For Sarandos, AI is another tool for investors. It's still a bet. And that's becoming a theme of this moment: technologies with enormous promise that still have to prove they can deliver. Which brings us to healthcare. Scott has been saying for a while that GLP-1 drugs may be more transformative than AI. This week he sat down with the man at the center of that bet, David Ricks, chair and CEO of Eli Lilly.
