What the AI Scare Gets Wrong

Prof G Markets·March 3, 2026

INVESTMENT OPPORTUNITIES

  • Apollo: Trading at 14x earnings, maintaining double-digit earnings and AUM growth. Trading below market multiple of S&P despite higher growth.
  • TPG: Trading about a third below fair value estimates relative to peers. Has incredible fundraising and expanding fee earnings.
  • Blue Owl: Has a 7-8% dividend yield.
  • Reasoning for these picks: Professor G believes the market is "over-inflating the fears around private credit" and that these companies are undervalued relative to the broader market due to a "growth versus valuation mismatch." They are growing AUM and recurring fee revenue while sector multiples are compressed due to private credit or liquidity fears.
  • General market insight: The professor argues that drawdowns in certain stocks (Visa, Mastercard, American Express, DoorDash, big software names) mentioned in a fictional AI blog post were driven by narrative, not fundamentals, suggesting these might be buying opportunities. He also suggests that for investors, it is important to ask "what could go right" rather than solely focusing on risks.
  • General market insight: A basket of Blackstone, Blue Owl, TPG, and Apollo is predicted to outperform the market due to compressed multiples, durable fee growth, and strong fundraising.

OVERVIEW

This episode of Prof G Markets discusses a recent fictional blog post about AI causing a global intelligence crisis and its real-world impact on stock valuations. It delves into the potential economic disruptions and opportunities presented by AI, contrasting pessimistic narratives with the US's historical capacity for innovation and risk-taking. The discussion also touches on broader economic trends, government policy, and investment strategies in the current climate.

KEY TOPICS

  • Analysis of a fictional AI blog post and its market impact.
  • Investment opportunities in private credit and SaaS companies.
  • The role of AI in job displacement and value creation.
  • The importance of emotional intelligence (EQ) and risk-taking in careers and entrepreneurship.
  • The underperformance of the US stock market relative to international markets.
  • Critique of US government's industrial policy and fiscal irresponsibility.
  • The power of narrative versus fundamentals in market movements.
  • The need for government regulation of AI and social safety nets.
  • The future of media and journalism in a changing landscape.

MAIN TAKEAWAYS

  • Despite doomsday AI predictions, the US economy's historical resilience, entrepreneurial spirit, and investment in education suggest a potential for growth and adaptation, not just destruction.
  • Current market pessimism around private credit and specific tech stocks, influenced by narratives, may present undervalued investment opportunities for those focusing on long-term fundamentals.
  • The US market's underperformance, relative to global peers, is linked to a perceived lack of stable and consistent government policy, leading to decreased foreign investment and deeper capital pools becoming shallower.
  • For investors, the key is to identify "what could go right" and embrace risk, while for governments, the responsibility is to anticipate "what could go wrong" and implement protective policies for societal well-being.
  • The media landscape is undergoing significant transformation, with traditional institutions facing challenges from new media models, driven by talent and efficiency rather than legacy structures or excessive compensation.
  • The drawdowns experienced by several major companies after being named in a fictional AI blog post highlight the powerful, and at times irrational, influence of narrative over actual business fundamentals in the market.

NOTABLE QUOTES

"When all the mistakes are in your favor, they're not mistakes, they're lies."
"I think it's important to ask what could go right."
"All roads lead to the following: Sag-Aftra and WGA, grab your f** ankles. You are about to see so many people in your unions get so rode so hard and put away wet."

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