Episode summary
Did AI Just Kill Software? | Prof G Markets
Prof G Markets
· · Hosts: Scott Galloway, Ed Elson
Summary
Software stocks sold off sharply after a wave of new AI products raised fears that companies will build more of their own tools in-house. Scott Galloway argued the market has overreacted: enterprise software still has high switching costs, long implementation cycles, and deep customer relationships, so AI is more likely to compress margins than erase demand. He pointed to previous “AI kills X” panics in Google search and Meta’s response to TikTok as examples of stocks recovering once companies adapted.
He said the market is creating dislocated opportunities and named Adobe, Salesforce, and ServiceNow as buys, while also mentioning Microsoft as a strong but crowded exposure. Ed Elson agreed that the sector is being treated as if “software is dead,” but said the better trade is to pick winners rather than buy the whole group indiscriminately. Both argued that companies with entrenched workflows and enterprise relationships should be able to integrate AI and defend their franchises.
The episode also covered Disney’s appointment of Josh D’Amaro as CEO and the Warner Bros. Discovery–Netflix hearing on Capitol Hill. Galloway said Disney’s linear TV assets remain an overhang that should be sold or separated, and he dismissed the Senate hearing as political theater that confused antitrust with culture-war messaging. The final segment focused on Anthropic’s Super Bowl ad, which the hosts said was a major marketing win and a potential turning point for the company versus OpenAI.
Key takeaways
- Galloway says software margins may come under pressure, but enterprise software is not being killed because switching costs and trust remain high.
- He said Adobe, Salesforce, and ServiceNow look like dislocated high-quality names, with Adobe and Salesforce trading far below their historical valuation levels.
- Elson argued the selloff is closer to panic selling than fundamental deterioration, with the market pricing in “software is dead” all at once.
- Galloway said Disney is still worth owning, but only after it separates or sells its linear TV assets, which he views as a major valuation overhang.
- He called the Netflix–Warner Bros. Discovery hearing a distraction from the real antitrust issue: concentration of power and market structure.
- The hosts said Anthropic’s Super Bowl ad was a rare broadcast marketing win and could help Anthropic’s brand over OpenAI’s.
Notable quotes
“I think margin pressure is exactly right. I think that is the danger here”
“The market's reaction is telling us software is dead. AI has killed software”
“If you're going to cancel an enterprise contract with a software company, say Salesforce, that's not like a small deal”
“This is the moment that Anthropic begins an ascent in valuation past open AI”
“The market hates it and the market finds the shittiest business and assigns that multiple the entire business”
How the episode opens
Today's number 1 million. That's the total number of domain names registered as of last month. Uh Ed, true story.
As I'm trying to unsubscribe because of resist and unsubscribe, I unsubscribe from Amazon one, their healthcare offering. And I don't know if they're listening to me and using it across their other domains, but whenever I go to Amazon Prime now, it suggests erectile dysfunction socks. Okay.
You don't like that one? Fine. Uh, instead of getting a doctor for a same day appointment, it gives me a picker from a warehouse named Kyle.
I told it I had Crohn's and it suggested just turn your body off and on real fast. See what happens.
How are you, Ed? — I'm doing very well. How are you doing, Scott? — I feel very exposed. This resist and unsubscribe thing. A lot of people are saying it's inspiring and a lot of people are saying that I should have been more organized and reached out to them. What do they mean? They should have reached out to them. These people, these politicians who already had a plan or
Yeah. Or there's activist groups, there's, you know, media personalities who are like, well, this isn't, if you'd reached out to me or these groups that help organize these things. And I'm like, the last thing I want to do is get on the phone with a bunch of media personalities and Brooklynites and get their view on whether Netflix should be on the list or not.
That sounds like the seventh circle of hell for me. I think that's exactly right. And there you have your answer.
It was the right choice. You don't want to do that. That's a pain in the ass.
So, you did it your way.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai and software
- software sell-off
- entertainment stocks
- super bowl ai ad
- potential software buys
Companies and tickers mentioned
- DIS
- NFLX
- Disney
- Warner Bros. Discovery
- Netflix
- Anthropic
Watch the episode
Watch “Did AI Just Kill Software? | Prof G Markets” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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