If you're a billionaire, one, you probably became a billionaire because you believe that money is the only thing that really matters. So therefore, you're going to overindex on it. However, with that said, his money is not going to change the fact that the House is going to flip. The other thing is that for him, there's value in the perception, right? So for as long as politicians think that fundraising is really, really important, if he is seen as the biggest spender, that creates a certain amount of fear and deterrence that's useful for him anyway. And for normal people, that kind of money obviously is unimaginable. But if you're literally worth a trillion dollars and it's a rounding error of a rounding error, it might be worth it purely for perception's sake.
Welcome to Prof G Markets. I'm Ed Elson. It is October 14th. Let's check in on yesterday's market vitals. The S&P 500 was flat after New York's Fed President eased fears of an aggressive rate hiking cycle. Meanwhile, the Dow and the Nasdaq declined. The yield on 10-year Treasuries slipped from last week's highs. Brent crude held above $106 per barrel. And finally, earnings season kicked off with the banks. JPMorgan Chase stock fell after posting a rare profit miss due to reduced dealmaking and bond trading. Meanwhile, Goldman Sachs stock rose as a strong quarter of equities trading led them to an earnings beat. And by the way, we have been nominated for three Signal Awards. So, if you like our show, please head to vote.signalaward.com. Cast your ballots for us in each of these three categories: best video podcast, best daily podcast, and best money and finance podcast. We'll also leave a link in the description to make it easier for you. Thank you so much. Okay, what else is happening?
The world's richest man is quietly reshaping America's political map again. Elon Musk has now spent $276 million on his super PAC and other Republican groups over the past three months alone. That brings his total spending for the 2025-2026 election cycle to roughly $366 million, which is well beyond the $290 million he spent in 2024 to help return Trump and the Republicans to power. But Musk isn't alone. According to the New York Times, 20 big donors have spent a combined $1.2 billion on this year's elections. All but two backed Republicans. Meanwhile, an AI and crypto group spent $127 million across 100 primaries this year and they have won roughly 90% of them. So, joining us to discuss the money that is shaping the midterms, we're speaking with Bradley Tusk, venture capitalist, political strategist, and writer. Bradley, welcome back to the show. I would like to start with that $366 million number. Your reaction?
It's obviously a big number, right? You can't say that it's not. And I'm not going to sit here and say that it won't have an impact because it will. With that said, let me give a somewhat hot take on all of this, which is I think that the role, the perception of the import of money in campaigns is overrated. I think that most money in a political campaign goes to broadcast television commercials. So, the reason why broadcast TV is so expensive is by definition there's a limited amount of spectrum. So, there's a little amount of time in the day. So, therefore, there's a market value for a 30-second ad, a 60-second ad, whatever it might be. And that can be really high. So, in a place like New York City, it could easily be a million dollars for a couple of days' worth of 60-second ads. However, not that many people watch broadcast TV anymore, right? I see it when I watch sports. Some people who watch news, but by and large, people are watching their TV on streaming. And there are some ads on streaming, but most of the time, people don't see it or they're able to filter it out. Tremendous amounts of money get spent on direct mail. So that's like when you open your mailbox and these annoying kind of big oversized postcards that are saying that someone's a pedophile or whatever it might be. Those go in the garbage and I think they go in the garbage without people even glancing at them most of the time. And if you look at a lot of the more recent political phenomenons, whether it's Donald Trump on the right or Zohran Mamdani on the left, they didn't win because they had the most money. They won because they had the most energy and because they fit the zeitgeist of the moment. So Mamdani won because affordability was an issue that for the people who do vote in a primary in New York City elections, that mattered the most. And he was a charismatic candidate who played incredibly well on social media and through social media and grassroots he was able to win. And in the general election he ran against Andrew Cuomo. Cuomo spent 70 million. Mamdani spent 17. Mamdani destroyed him. And the reason why is Cuomo's ads were just the most conventional, you know, 6 p.m. on NBC News, and I don't think they were reaching anybody. And Trump was outspent by both Harris and Hillary Clinton. And he beat both of them. And so I think that while money is certainly a problem in politics, it's less of one than people think.
He said in May, May 25, this is Elon Musk, he said, quote, "In terms of political spending, I'm going to do a lot less in the future." And then suddenly he's come out and he's spent more money on this election than ever before, which tells me that he probably feels desperate in some way. I guess number one, what is the ROI? How does he believe that the ROI is going to come to fruition for him by investing so much in these midterms? And two, is it going to be for waste? Because it looks as though the Republicans are not polling so well.
I think it largely will be for waste. But I think the ROI for him comes in two things. One is the reality which is that for the people that he helps elect, they owe him. And whether his needs are for SpaceX or for Tesla or the Boring Company or something else, he can call upon them for help. He is probably also trying to stop the House from flipping because when the House Oversight Committee starts grilling people left and right, private citizens especially don't have the same ability to fight subpoenas that government officials do. And so Musk, Jared Kushner, they're going to be very frequent attendees in Congress in the coming year or two. However, with that said, his money is not going to change the fact that the House is going to flip. The other thing is that for him, there's value in the perception, right? So for as long as politicians think that fundraising is really, really important, if he is seen as the biggest spender, that creates a certain amount of fear and deterrence that's useful for him anyway. And for normal people, that kind of money obviously is unimaginable. But if you're literally worth a trillion dollars and it's a rounding error of a rounding error, it might be worth it purely for perception's sake.
Yeah. Just looking at the amount of billionaire spending now, 300 billionaires accounted for a fifth of all federal campaign contributions in the 2024 election. These numbers continue to rise with every election cycle. You're saying that they probably have less of an impact than we think. But is there a point at which they do start to influence our democracy?
It's the other way actually. I think that it has an impact until a certain point and then the returns become diminishing very fast. There's only so many ads you can see before you tune them out completely. And when everyone is saying the same thing all the time and just lobbing insults back and forth, you just stop paying attention. And so I think that the first money in might actually be impactful, but then it becomes less impactful. But keep in mind, if you're a billionaire, one, you probably became a billionaire because you believe that money is the only thing that really matters. So therefore, you're going to overindex on it. And two, that's the thing you have, right? Elon Musk's endorsement would hurt most candidates, right? So you can't really impact things in other ways because simply this is your only real resource. And I think there's still a question of how you use money. So for example, my consulting firm runs a super PAC called Investment Tomorrow, which is a clean energy super PAC, and they've taken out some of the Freedom Caucus members who have been really anti-clean energy. But the way they've done that is to just try to be really clever. So, for example, Chip Roy, who's a congressman from Dallas, ran for Texas Attorney General. He was way ahead when we got in the race. And we started running ads, not on broadcast news and not even about clean energy. Our first ad was called "Not MAGA Enough." And the whole point was Chip Roy is not nice enough to Donald Trump and isn't conservative enough. And we only ran the ads on Rumble and Truth Social. And so, we were reaching people who were super high propensity voters in a Republican primary. And Roy ended up losing that race by 11 points. And we've done that multiple times with other people. So money can be helpful, but that whole effort so far has spent $6 million. I mean, we're not talking about a lot of money. And three incumbent members of Congress have already gone down. Several other primaries have already been won. So it's not that money can't be helpful, but it has diminishing returns quickly. And the very nature of technology has changed the way that you reach voters, which makes things that are free or very cheap like social media really impactful and makes things that are highly expensive and outdated like broadcast television much less impactful.
Do you have any thoughts on how these midterms will play out? You said the House will flip. Any thoughts on the Senate?
Look, I mean, you know, you can look on Polymarket or anything like that and you would get the sense that Democrats will end up with about 52 seats. But the question then becomes, to what end? I mean, ultimately I dislike Trump so much that I'm for anything that rebukes him, even though I'm an independent. But you know, whether Democrats have the House and the Senate or just the House, no legislation is moving. So yeah, confirmation of judges, there's some things at the margins, but in the Senate, you still need 60 votes to invoke cloture to stop a filibuster. Democrats are not going to have anywhere near 60. And I would argue that there's actually not going to be much impact on tech in the midterms simply because Trump is so anti-regulation. He's going to veto things. They're not going to override him. And in states, there will be lots of legislation that does move. But on a bipartisan basis, you're going to have Republican governors go after AI and Democratic governors go after AI. They're going to go after data centers. So fundamentally, I actually think that despite all the attention and all of the money, at least when it comes to my industry of tech, you're going to see relatively uniform results that would have been exactly the same regardless of who wins or loses in a few weeks.
Is there a world in which receiving money from these billionaires who are becoming increasingly unpopular in popular culture, is there a world in which it actually hurts you, that if it comes out that you know you receive money from Elon Musk, that's a bad thing?
Well, Sam Altman's a good example of that. So, there was a primary for Congress in New York City. It was the main Manhattan seat. So, probably in some ways the most high-profile congressional district in the country. And Alex Bores was one of the two leading candidates. But OpenAI came out very aggressively against him because he passed frontier model regulation in Albany, and that propelled his campaign because when voters heard that Sam Altman hated Alex Bores, that made them like Alex Bores. Now, Bores lost, but Sam Altman inadvertently, in trying to kill Bores, ended up helping him. So yes, I do think these companies have to be very careful because at least in certain things like social media, data centers, forms of AI like frontier models and hyperscalers, the antipathy is so great that it could actually have a collateral damage effect.
Just before you go, what do you think the future of money in politics will look like?
The amount might continue to increase. I think the efficacy will continue to decrease. And I think that it's going to be a while till this is fully understood and realized because there is a massive industrial complex of people who make money through the money of politics. So, they're going to do nothing to disillusion billionaires of their belief. And billionaires fundamentally believe that the only thing in life that matters is money, especially their money. And so, they're not going to be too fast to say, "Oh, no, no, I don't think there's actually an ROI here." And so while I don't think that money most of the time is going to be all that well spent, I think it will continue to be spent.
All right, Bradley Tusk is a venture capitalist, political strategist, and writer. Bradley, always love having you. Thank you.
Thanks for having me, man. I appreciate it. All right, guys. Thank you.
And a reminder to please vote for us at the Signal Awards. Go to vote.signalaward.com. We really appreciate it. We'll be right back. And if you're enjoying the show, be sure to subscribe to the Prof G Markets YouTube channel at the link below.
Support for the show comes from Upwork. Business owners know that you kind of need to become a jack of all trades to grow, but as you do, situations arrive where you end up wishing you could simply hire a jack or a Jill of a very particular trade. In those cases, you'll be glad to have Upwork. Upwork gives your business fast access to highly skilled specialists with deep expertise. With their help, you can fill critical skill gaps, launch projects faster, and scale support up or down without committing to full-time headcount. Find experts in everything from software development and AI implementation to marketing, design, and business operations. Browse profiles, review past work, and get help scoping the role. There's also Business Plus, which lets you access the top 1% of talent on Upwork. And when it comes to the operational stuff, such as contracts and payments, Upwork takes care of it all. With over 170,000 freelancers holding five-star ratings, you can hire with confidence, knowing you're getting someone with a verified track record of applied expertise. Visit upwork.com right now and post your job for free. That's upwork.com to connect with top talent ready to help your business grow. That's upwork.com.
Support for the show comes from Granola. Most meetings end with a bunch of action items floating around, but they're not documented anywhere concrete. Someone thinks they're handling something, but it's not actually written down. A week later, nothing has happened and nobody knows who owns the task. That's the problem Granola was designed to fix. Granola is an AI-powered notepad that makes meeting notes useful. It captures what happens in your meetings and turns it into clean, structured notes with decisions and action items pulled out and made easy to find. And the best part, Granola integrates seamlessly with how you already work. No setup, no configuration, no friction. It transforms messy meeting calls into something you can actually reference weeks later. Your notes become searchable, organized, and actionable. You get better notes in a central place, all while staying present in your meetings with no extra work. Once you try it on a first meeting, it's hard to go without it. You can try it totally free. Just head to granola.ai/markets. That's granola.ai/markets to get your time back. Go to granola.ai/markets and try it on your next call.
We're back with Prof G Markets. AI bubble fears are spooking investors yet again, and the chip makers are tumbling. The worst of it hit South Korea yesterday, where semiconductor stocks make up most of their market. Korea's KOSPI fell 5.5%, SK Hynix dropped more than 3%, and Samsung fell more than 7%. The worries also hit the US chip makers as well. The Philadelphia semiconductor index fell for a fifth straight day and Micron dropped roughly 5%. Meanwhile, the AI bubble warnings from banks around the world keep on rolling in. The IMF warned yesterday that a sharp drop in AI investment could cut global GDP by 1.1% by 2028. Last week, Bank of America's analysts said that a bubble is building in tech stocks, and analysts at Jefferies wrote that the AI boom will likely end in, quote, "massive capital destruction." So, is Wall Street changing its mind about AI? Here to break it down, we're speaking with Gil Luria, head of technology research at D.A. Davidson. Gil, great to see you. Thank you for joining us. So, chip stocks are having a rough week. The KOSPI is down, which of course is largely comprised of these chip companies and these memory companies. What is triggering this sell-off right now? What are investors so worried about?
Well, there's plenty of headlines to worry about between misunderstandings about OpenAI's gross and net revenue, Chinese competition, pushback on data centers, the politicization of AI. There's plenty of those kinds of headlines that keep coming and the market's very jittery. But you know, we're financial analysts and we deal in earnings reports and cash flows and income statements. And all we've heard over the last several weeks, I want to just be clear about that, from all the companies throughout the AI value chain is not only are they reporting very good results, they're saying the results and the market is better than it was three months ago. They're saying that their outlook is better and raising guidance, and they're saying that their visibility is better than it's ever been. That's everybody from the companies that make chip equipment to the companies that make chips to the hyperscalers and the model companies. So I think where investors get jittery is they just don't believe it can last. And that's very understandable. And on one hand, time will tell. On the other hand, the companies have to do a better job of explaining why it is that they say they have such good visibility.
