2026 Predictions | No Mercy / No Malice | Goose Pod

Authors: Scott Galloway

Publisher:

profgalloway.com

Published: 12/19/2025

Language:English

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Taylor

Good morning dark, I am Taylor, and this is Goose Pod, your personalized deep dive. Today is Wednesday, December 24th, and we are unpacking the heavy hitters for the near future. I am joined by the one and only Morgan to discuss 2026 Predictions.

Morgan

It is a pleasure to be here, Taylor. We are looking at the No Mercy No Malice report, which is less of a crystal ball and more of a cold splash of reality. I have often found that the future reveals itself in the present.

Taylor

Exactly. And the biggest splash is the AI bubble. We have been riding this high, but the report suggests the catalyst for the burst is China. They are basically engaging in AI-dumping, flooding the market with cheap, high-performing models to crush the margins of our tech giants.

Morgan

It is a strategic move we have seen before with steel. China is registering performance that rivals American leaders but at a fraction of the cost. Meanwhile, our own giants are promising infrastructure, like OpenAI promising Oracle three hundred billion dollars, for things that simply have not been built.

Taylor

It is wild because the energy requirements are just physics. OpenAI needs twenty percent of current U.S. electric capacity, which is like two hundred and fifty nuclear power plants. We are talking ten trillion dollars. It is the greatest AI hallucination yet, assuming we can just flip a switch.

Morgan

The grid simply cannot handle it. There is a five to eight year wait just to connect a new data center. China, however, has twice our energy capacity at half the cost. This creates a massive imbalance that could easily send the global economy into a significant recession.

Taylor

And look at the Nvidia and OpenAI duopoly. Nvidia is priced as if it will add eight hundred billion in revenue, which is like adding Apple, Meta, and Tesla combined. But the empire, specifically Alphabet, is striking back. OpenAI might just be the Netscape of this era.

Morgan

Netscape was the disruptor that had its moment before the incumbents woke up. Alphabet has the talent and the data. If China continues to dump open-source models that eighty percent of startups are already using, the pricing power of the Magnificent Seven starts to evaporate very quickly.

Taylor

I love how the report calls out Amazon as the dark horse here. They are using AI and robotics to move atoms, not just bits. They have reduced click-to-ship time by seventy-eight percent. It is like Ford’s assembly line all over again, but for the digital age of commerce.

Morgan

Amazon is leveraging the AI built by others to expand their own retail margins. The market has not fully priced this in yet. While others chase the hype of the model, Amazon is busy perfecting the physical delivery of the world, which is much harder to replicate.

Taylor

To really understand this tension with China, we have to look back at the trade war that started in 2018. It began with those Section 301 investigations into intellectual property theft. It was a narrative of protectionism that has only escalated over the last eight years.

Morgan

Indeed, the roots are deep. In July 2018, the U.S. imposed twenty-five percent tariffs on semiconductors from China. This was intended to safeguard our domestic industry, but it also destabilized global ties. I have often found that tariffs are a blunt instrument for a very delicate operation.

Taylor

And then the Biden administration took it further in 2024, restricting access to AI chips and chipmaking tools. They cited national security concerns, basically trying to keep Beijing from using our own tech to advance their military. But China responded by threatening to ban exports of key semiconductor components.

Morgan

It is a high-stakes game of chicken. The Trump administration had already started blocking state-controlled Chinese companies from buying American tech firms. They even targeted ZTE and Huawei to limit their market access. This created a two-year dispute that increased production costs for almost every American firm.

Taylor

The report calls our current policy toward China sclerotic and compares the demeanor to a raccoon on meth, which is such a Taylor-style description. Since 2019, China’s share of exports to the U.S. dropped from seventeen percent to ten percent, but their global exports are actually up forty percent.

Morgan

The world is simply routing around the U.S. now. While we focus on internal tariffs, the rest of the globe is integrating with Chinese supply chains. This background is crucial because it explains why China is so motivated to use AI-dumping as a tool for economic dominance in 2026.

Taylor

And we cannot ignore the space race background either. The cost to get a kilogram of payload into orbit is down eighty-nine percent over fifteen years. SpaceX has gone from eighteen percent of launches to eighty-four percent. They are positioning themselves to own everything in the universe, literally.

Morgan

Space is becoming the next big thing because the capital is getting cheaper. It follows the dot-com boom pattern where technology costs fall and innovation spurs more investment. If Google owns information and Meta owns social connection, SpaceX is looking to own the physical infrastructure of the heavens.

Taylor

It is a pattern of consolidation. We see it in tech, we see it in space, and we even see it in the way we educate ourselves. But the cost of that education has risen fifty-three percent at public schools since 2000. The industry is drunk on its own exclusivity.

Morgan

The university system has essentially become a luxury brand rather than an educational service. They artificially sequester supply to keep tuition rising faster than inflation. Yet, the data shows that the median income for a college graduate is still more than double those without a degree. It is a paradox.

Taylor

It really is. We are told college is dead, but enrollment is rebounding because the non-financial outcomes are so much better. Graduates live six years longer on average and have lower rates of divorce and suicide. The narrative of the dropout billionaire like Zuckerberg is an extreme outlier.

Morgan

The report shifts to a more cynical conflict regarding TikTok. It suggests the forced sale is not about national security, but about political cronyism. The valuation math for the U.S. business does not add up unless you consider the insider deals being made with the president's inner circle.

Taylor

It is framed as a coup to control what we watch and believe. TikTok’s ad revenue was twelve billion in 2024, giving it a theoretical value of one hundred and twenty billion. But the deals being discussed value it at twenty-eight billion. That is a massive gap that smells like corruption.

Morgan

This conflict erodes faith in the market. When economic policy is seen as corrupt but stupid, the cost of capital rises for everyone. It is a distraction from the real issue, which is that TikTok is effectively our new best friend and a potential foreign intelligence tool.

Taylor

And then there is Hollywood. The report says Hollywood is the new Detroit, just with better weather. Young people are moving to short-form video. The Kids Diana Show on YouTube has more subscribers than Disney Plus. That is a terrifying shift for the traditional creative community in California.

Morgan

The return on human capital is now inversely correlated to the size of the screen. AI will do to Hollywood what podcasting did to TV. A late-night show costs a hundred million to make and loses money, while a podcast costs five million and clears a massive profit.

Taylor

The means of production are being arbitraged. Creatives are outraged, but the consumers simply do not care about the prestige of the old system. They want the content that fits their shrinking attention spans. It is a brutal transition for an industry that thought it was untouchable.

Morgan

We also have the conflict of prediction markets. People think they are being intellectual by betting on elections, but it is just gambling. It is an addiction machine that is already causing a spike in personal bankruptcies and inviting corruption into every aspect of our civic life.

Taylor

It is basically Vegas on everyone’s phone. Sports betting is already a crisis for Gen Z, and now we are wagering on what the president will tweet next. It creates a mother of all insider trading opportunities. It is a vice that the report identifies as a major societal threat.

Morgan

The most somber impact discussed is the rise of synthetic relationships. For the elderly, AI companions are a godsend, reducing loneliness for the twenty-five percent of seniors who are socially isolated. It can actually stave off dementia and stroke, which is a beautiful use of technology.

Taylor

But for the young, it is the next opioid crisis. Seventy-nine percent of Character AI users are under thirty-five. They are spending ninety-three minutes a day talking to bots instead of learning how to navigate the messy, rewarding world of real human relationships. It is heart-wrenching, honestly.

Morgan

I have often found that we replace the difficult with the convenient at our own peril. Search volume for how to make friends has increased fivefold. We are losing the fundamental skills of connection. Meanwhile, Congress is described as a mix of The Walking Dead and The Golden Girls.

Taylor

They just do not see the danger. They are focused on the wrong things while a million people on ChatGPT are showing signs of mania or self-harm. The societal impact of replacing humans with synthetic versions is something we are not prepared for, especially as the technology gets more convincing.

Morgan

On the economic front, the impact of AI is shifting from hype to a rotation trade. Investors are moving out of trendy AI stocks and into cyclical sectors like financials and industrials. This suggests a belief in economic resilience, but it also means the AI-only gold rush is cooling.

Taylor

The expectation is a soft landing in 2026 with two percent growth, but that depends on whether the AI infrastructure bubble holds. If the data center promises fail, that rotation could turn into a retreat. We are at a very delicate balancing point for the global markets right now.

Morgan

Looking toward the horizon, Waymo is the clear winner in autonomous driving. They have logged a hundred million miles compared to Tesla’s one million. It is a potential cure for the forty thousand automobile deaths we see annually. This is a future that is already arriving in cities.

Taylor

And while Elon Musk talks about humanoid robots as an infinite money glitch, the real future is in industrial robots that augment humans, not ones that look like us. We will see ten thousand humanoids in workplaces by 2026, scaling to fifty thousand by the end of 2027.

Morgan

The cost is plummeting, too. From thirty-five thousand dollars down to maybe thirteen thousand in a decade. We are moving toward a world of agentic AI where machines can recover from failure and plan complex tasks. It is a transformative moment for labor and industry alike.

Taylor

That's the end of today's discussion. The future is coming fast, dark, but remember that the best way to predict it is to make it. Thank you for listening to Goose Pod. See you tomorrow.

Morgan

Life is indeed rich. I hope 2026 brings you the presence of mind to enjoy it fully. Thank you for spending this time with us on Goose Pod. Be well.

The "No Mercy / No Malice" podcast dives into 2026 predictions, highlighting an AI bubble potentially burst by China's AI-dumping. Discussed are energy grid limitations, Amazon's physical logistics advantage, escalating US-China trade tensions, a consolidating space race, and the evolving, albeit costly, education landscape.

2026 Predictions | No Mercy / No Malice

Read original at News Source →

Every year, we make predictions. Our missives on 2025, made in October ’24, registered the most direct hits since we first pulled out our Ouija board a decade ago. Our objective isn’t to be right — though that helps — but to inspire a conversation that crafts better solutions. OK, enough of that. We begin with our 2025 report card, followed by our 2026 predictions.

2026 PredictionsAI Stocks CorrectThe question isn’t when the AI bubble will burst, but what the catalyst will be. A: China. Trump has changed U.S. tariffs on China 17 times this year. They’re tired of having a major trading partner with sclerotic decision-making and the demeanor of a raccoon on meth.

Since 2019, China has decreased its share of exports to the U.S. from 17% to 10%. Meanwhile, China’s global exports are up 40%, while imports are flat. Trump’s tariff policy is the definition of stupid: hurt others while hurting yourself. It has not inspired an increase in domestic manufacturing, but a decrease in exports, as reciprocal tariffs take effect, and a rerouting of the global supply chain around the U.

S. “Higher prices, lower growth” makes for a lousy bumper sticker.If I were advising Xi, I’d counsel him to go for the jugular by engaging in AI-dumping, a repeat of their aughts steel-dumping playbook. It’s already underway — and working. Eighty percent of a16z startups use open-source Chinese models.

Same story at Airbnb. China is registering similar or better performance as the American LLM leaders, but with a fraction of the capex. Flooding the market with competitive, less-expensive AI models will put pressure on the margins and pricing power of the Mag 7, taking down a frighteningly concentrated S&P and likely sending the U.

S., possibly the globe, into recession.The Data Center Bubble BurstsOpenAI is promising Oracle $300 billion — money it doesn’t have — for infrastructure Oracle hasn’t built. We can’t see the actual contract, but this is BS. The greatest AI hallucination yet is the assumption that in the next few years we’re going to build anywhere near the required grid and power capacity.

OpenAI needs 20% of current U.S. electric capacity — equivalent to 250 nuclear power plants — at a cost of $10 trillion. There’s a five- to eight-year wait to connect a new data center to the grid. Meanwhile, China has more than twice America’s energy capacity at half the cost. Second greatest AI hallucination?

Job creation. The average number of full-time employees at a data center is equivalent to the number of people working at two Applebee’s.Nvidia & OpenAI Duopoly Comes Under SiegeBased on its valuation, Nvidia is telling the market it will add an additional $800 billion in revenue over the next five years — equivalent to the combined revenue of Apple, IBM, Meta, and Tesla.

OpenAI, which has $20 billion in annual revenue, is projecting it’ll add $180 billion in revenue over the same period — equivalent to the combined revenue of Disney, Fox, the New York Times, Paramount, and WBD. Also, OpenAI’s $1.4 trillion in spending commitments exceeds Argentina’s national debt.Meanwhile, the competition is heating up.

China is putting out comparable models at a fraction of the price (see above), Anthropic has captured the lead for enterprise users, and, as I predicted last year, the empire (Alphabet) is striking back. Gemini summaries are improving, and arguably the greatest concentration of AI talent resides at Alphabet.

OpenAI could be our era’s Netscape, i.e., the disruptor that enjoys a moment in the spotlight before being eclipsed by an incumbent.Big Tech Pick: AmazonI’m bullish on Amazon, even though it underperformed the Mag 7 this year. The collision of AI and robotics is the Champagne and cocaine cocktail fueling Amazon’s retail margin expansion, catalyzing a 2x increase in the gross merchandise value of its largest business (retail) by 2033, without adding any human workers.

Just as Ford’s assembly line slashed automotive production time by 88%, Amazon’s robotics investments have reduced the time from click to ship by 78%. The rest of the Mag 7 capitalizes on the elevation of information (bits) over objects (atoms), while Amazon is leveraging bits to move atoms faster and cheaper.

Notably, the market hasn’t priced this in yet; in 2025 Amazon stock traded at a P/E ratio of 33, compared to its historic average of 58. The greatest accretion in shareholder value from AI will be at companies that leverage others’ AI. Specifically, Amazon. Space: The Next Big ‘Thing’When technology gets cheaper, startups form, the ecosystem attracts cheaper and cheaper capital, which spurs innovation, and so on and so on.

The cost of the personal computer decreased 58% during the 15-year dot-com boom, and U.S. IT spending increased 200%. The same pattern is happening now with AI: The cost of GPU operations has fallen by 74%, while global AI funding has risen by 280%. The key metric for space? Over the past 15 years, the cost to get a kilogram of payload into orbit is down 89%, while private U.

S. space investment jumped 6x.SpaceX is dominant, registering 84% of U.S. space launches in 2024, up from 18% in 2008. If I were running investor relations, I’d position SpaceX as follows: Google owns 93% of information with search, Meta controls two-thirds of social connection, Amazon has half of e-commerce.

SpaceX controls 90% of everything else in the universe. Everything is a subset of the addressable market that is space. Best Investment (You Don’t Have Access to): TikTok U.S.TikTok’s success underscores the biggest mistake marketers make, believing choice is a good thing. It isn’t. Consumers spend five days per year deciding what to watch on Netflix.

TikTok has only one channel, and it’s the best one you’re ever going to watch. Forty-three percent of Americans 18 to 29 get their news from TikTok. We also spend more time, on average, with TikTok (54 minutes per day) than with friends (35 minutes). When I say TikTok is our new best friend, I mean CCP spy.

But I digress.The math on TikTok’s forced sale doesn’t math, though, unless you’re one of the president’s cronies. TikTok’s U.S. ad revenue was $12 billion in 2024. Applying a 10x P/S ratio, its U.S. business has an implied value of $120 billion. Accounting for a revenue share with China, Trump’s deal values U.

S. TikTok at $28 billion. But I’m a Democrat, so I’m not allowed to invest. These insider deals reduce people’s faith in the market, raising the cost of capital for everyone. U.S. economic policy could best be described as corrupt, but stupid. Short-Form Video and AI Meteors Strike HollywoodHollywood is the new Detroit, but with better weather.

For creatives, the return on human capital is inversely correlated to the size of the screen. Seventy-eight percent of Americans age 10 to 24 watch TV and movies on YouTube and TikTok. The Kids Diana Show on YouTube averages between 2 and 10 minutes per episode — perfectly calibrated for young people’s shrinking attention spans.

The show registers 137 million subscribers; Disney+ has 128 million subscribers. The other meteor headed for Hollywood is AI. What AI will do to Hollywood is what podcasting is doing to TV. The Late Show with Stephen Colbert employs 200 people, costs $100 million, and makes $60 million. When Colbert shifts to podcasting, he’ll take eight people with him and make just $20 million, but it’ll only cost $5 million to produce.

The means of production are being arbitraged. There will be outrage from the creative community, who believe they’re too precious to face disruption. But consumers, much less the Ellisons, don’t give a shit.Waymo DominatesAutomobile deaths kill 40,000 Americans annually — equivalent to prostate cancer, Parkinson’s disease, and breast cancer combined.

Autonomous driving may be the equivalent of a cure for (some types of) cancer. A study evaluating tens of millions of miles driven by Waymo found that its autonomous cars were involved in 96% fewer vehicle-to-vehicle crashes, resulting in 90% fewer bodily-injury claims, and 92% fewer pedestrian injuries compared to cars driven by humans.

Waymo went from 38,000 paid rides per month in 2023 to 1 million just two years later. The company is lapping the competition, logging 100 million fully autonomous miles, compared to Tesla’s 1.25 million miles with human safety monitors. The second horse to watch is Uber. It’s technology-agnostic, choosing to pour capital into the consumer experience.

As former CEO Travis Kalanick said, the most expensive part of the business is the person in the driver’s seat. Humanoid Robots = Self-Driving Cars of 2015Similar to self-driving cars circa 2015, humanoid robots are another Musk weapon of mass distraction designed to draw attention away from the fact that Tesla is a car company.

Tesla’s market cap per car sold is 77x what it is for GM and Ford, 28x Toyota, and 24x BYD. According to Musk, Tesla’s Optimus robot will be an “infinite money glitch” that ends poverty and performs surgery. It’s as if he’s on ketamine. According to MIT robotics professor emeritus Rodney Brooks, “We will have plenty of humanoid robots 15 years from now, but they will look like neither today’s humanoid robots nor humans.

” The current / future opportunities aren’t robots that mimic humans, but robots that augment / replace humans at industrial scale. Vice of the Year: Prediction MarketsPrediction markets leverage the wisdom of crowds. In turn, crowds supercharged by integrations with news brands create a virtual self-propulsion marketing machine.

Participants may be deluded into believing they’re engaging in an intellectual pursuit when they bet on an election’s outcome, but it’s gambling, just more fun and interesting. What GLP-1s did to fast food, prediction markets are doing to the gaming business. Aristocrat Leisure, Caesars Entertainment, DraftKings, Evolution Gaming, Flutter Entertainment, and MGM Resorts are down 22% YTD, on average.

Las Vegas tourism is down 8%. Nobody will be in Vegas once Vegas is on everyone’s phone.The externalities are huge. Half the men in the U.S. between 18 and 49 have a sports betting account. Among sports bettors, 23% say they’re addicted; the share jumps to 37% for Gen-Z. One in five people with a gambling addiction attempt suicide.

Personal bankruptcy filings increased by 28% in states that legalized sports betting after a 2018 Supreme Court ruling. There are also civic externalities, as prediction markets represent the mother of all insider trading opportunities. Wagering on what Musk will Tweet next, Trump’s Fed pick, the speed of a pitch, or when a candidate will drop out of a race invites corruption into every aspect of American life.

Synthetic Relationships Take Center StageThere’s a use case for AI companions, but it’s uncomfortable — a sad story about lonely old people. One-quarter of Americans 65 and up are socially isolated, increasing their risk of stroke and dementia by 30% and 50%, respectively. The share of the population aged 65 and older is projected to reach 21% by the end of the decade.

In one year-long analysis of older Americans living alone, 95% of participants said bots reduced loneliness. If synthetic relationships can make older people less lonely and stave off dementia, that’s great.The problem? Young people aren’t developing the skills to navigate life’s hardest / most rewarding thing: relationships.

Google search volume for “how to make friends” has increased 5x since 2004, while the share of Americans who say they have no close friends increased 4x from 1990 to 2021. I believe synthetic companions are the next opioid crisis for young people. On Character.ai, 79% of the users are under 35; the average session is 93 minutes.

In any given week on ChatGPT, 560,000 people show signs of mania or psychosis, while 1.2 million people engage in conversations that indicate they have a plan to self-harm. Unfortunately, Congress is The Walking Dead meets The Golden Girls. They see the danger from synthetic relationships about as clearly as the propaganda threat posed by TikTok.

The ‘College Is Dead’ Narrative CollapsesSome of the most successful people of our age are college dropouts — Mark Zuckerberg, Larry Ellison, Oprah. You should assume your son is not Oprah. Despite the noise about employers removing degree requirements, the share of workers without a degree increased only 3.

5% between 2019 and 2024, while 45% of all firms made no changes to their hiring practices. In pure economic terms, the median household income for a college graduate is more than 2x what is for someone without a degree. College graduates see better nonfinancial outcomes, too, in the form of lower rates of obesity, divorce, and suicide.

On average, they also live six years longer. After declining during the pandemic, enrollment has rebounded. The issue isn’t value add, but value (i.e., cost). Adjusted for inflation, tuition rose 53% and 32% at public and private schools, respectively, between 2000 and 2025. Why? A: My industry is corrupt.

We artificially sequester supply so we can raise tuition faster than inflation. Faculty, administrators, and alumni are drunk on exclusivity. We’ve lost the script and begun believing we’re luxury goods, not educators. Finally, Team Scotland will reach the semifinals of the World Cup on the back of a Pele-like performance from Scott McTominay.

Hey … I can dream.The best way to predict the future is to make it. I hope the New Year brings you the perspective and presence of mind to realize that, if you live in America, are healthy, and have people who let you love them completely, 2026 will be the best year of your life. Life is so rich,P.

S. Start the year off with a New York Times bestseller. (Flex.) Notes on Being a Man is available in all the usual places.