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CEOs are not getting the productivity boosts that AI promised. Is this the peak of AI development? Next, Toyota RAV4 sales are down 29% this year because people want it too much. And which musical instrument is the most viral right now? This is a saxophone. Because the saxophone is for sale. This is Nick.
This is Jack. Today is Thursday, a new Friday, October 22, and today's podcast is the best. This is T-Boy. Three major business news stories you need to know today. Uh , and? Oh my god, is n't today your quarter anniversary? This is my three-quarter anniversary. This is a cute sweet birthday. You almost forgot, didn't you?
You make this "uh- uh" sound like you're expecting something on your quarterly birthdays, which I always forget. Three quarters of the cake. What are we getting here, Jack? Don't tell me it's by mail. Yes, I am so ashamed. You are three-quarters ashamed. Jack, let's get to our three stories. Our first story: When it comes to AI, SpaceX is the biggest landlord, Tropic is the biggest tenant, and Amazon is homeless.
And Wall Street's biggest shark says AI is almost certainly a " bubble." Oh yeah, we have a real estate analogy that Zillow would be thrilled with. Friends, on Tuesday, Elon Musk confirmed that Tesla and SpaceX are considering a merger. So the shares of both companies jumped. Elon also reported on SpaceX's third-quarter earnings.
AI revenue has grown to $7.6 billion . That's an 830% jump. Although Elon now calls it “ superintelligence,” following Trump’s preferred rebranding of AI. But interestingly, 84% of SpaceX's revenue from AI is actually rent. That's right. Airbnb for data centers. This is the rental. Because SpaceX owns 1.7 gigawatts of data centers.
Colossus 1 and 2 are huge data centers built 8 miles apart in Tennessee. When Jack says " huge," we're talking about Guinness World Record sizes. Officially the largest data centers in the world. Together, these two Colossus data centers are the size of two Yankee Stadiums. But here's what we find fascinating.
Only a tiny fraction of this computing power is dedicated to Elon's AI companies. He rents out the rest. In its financial reports, it calls these cloud services deals, and that makes SpaceX the largest lessor in the AI space. And , as Elon said during the earnings call, we could lease out our capacity several times more if we said "yes" to everyone who needed it.
So, headline number one: SpaceX is now profitable because it is a landlord in the AI space. This is the AI landlord. The second headline this week, what is it, Jack? The AI tenant is Anthropic. Because a draft of Anthropic's IPO S-1 documents was leaked to the Wall Street Journal. And when it comes to renting or owning, Anthropic firmly belongs in the renter camp.
And why is that, Jack? They have zero of their own data centers. None. So every month, Anthropic writes a check for $1.25 billion in Elon Musk's SpaceX leases . We are talking about $15 billion a year in AI rent for Elon. Just imagine: as much as 26% of SpaceX's total revenue is rental payments from Anthropic for the use of computing power.
Okay, buddy, so we have an AI landlord and an AI tenant. Jack, what's the third AI headline we noticed? He's from Business Insider. Amazon has billions of dollars worth of data centers available for rent, but it can't turn them on. Because yes, Amazon Web Services are data centers. And because of the AI boom, Amazon has hyperscaled the construction of new data centers.
But Amazon's warehouses are packed with top-of-the-line Nvidia chips, and there are no data centers to put them in yet . Partly because protests have stopped construction, and partly because there is simply a lack of electricity. So, SpaceX is an AI landlord, Anthropic is an AI tenant, and Amazon is kind of like a homeless person in the AI world.
To sum it up, friends: this is our Zillow-style analogy for all the big players in AI right now. I hope you find this interesting, but this is all a look into the past. Ken Griffin told us something about the future yesterday. So, Jack, what's the takeaway for our friends in AI? According to Ken Griffin, we are almost certainly in an "AI bubble." Ken Griffin made headlines last month by making the largest donation in the history of higher education.
He gave $3 billion to Carnegie Mellon University. Ken Griffin owns Citadel, which is both a high-frequency trading firm and a hedge fund. He is the most typical representative of Wall Street. Although he did leave the financial centers and moved to Florida. And that's why it's notable that on Tuesday he said: we are almost certainly in an AI bubble.
Ken Griffin has access to American CEOs, and he says some of them are becoming skeptical about AI. That's exactly what he said. Corporate America is very unevenly able to derive value from its AI models. Translation, Jack? He said CEOs are looking at the bills from OpenAI and Anthropic and asking, "What's the return on all this spending?" Essentially, he says it's a performance issue.
Ken Griffin suggests that the productivity gains from AI have been rather disappointing. It essentially looks at how much more work the average American does by communicating with ChatGPT, compared to the cost of subscribing to ChatGPT. Add it all up, friends, and right now CEOs are paying Anthropic.
Anthropic is paying SpaceX, and Ken Griffin says that first connection is now faltering. Elon Musk says there is a huge demand for AI. This is a "bullish" signal. Ken Griffin says that could change soon. This is a big "bearish " signal. Our second story is about the RAV4 nation . The most popular SUV in America for 8 years has just dropped to third place.
And that's Toyota's own fault , but we can't blame them for that. Okay, okay, okay. Quiz on Thursday evening. Here's what we have. What is the best-selling car in America? Who is this, Jack? Hint: Number one and number two have remained unchanged for most of the last 40 years. Okay, hands aside, hands aside.
Answer : Number one is the Ford F-series pickup truck, and number two is the Chevy Silverado pickup truck. America runs on trucks. But the usual contender for third place, the Toyota RAV4 , dropped to sixth this year. Toyota RAV4. Before explaining the reason for this sudden drop, here's why the RAV4 has historically been so popular.
The golden mean. The golden mean. Toyota started the crossover class with this model. Essentially, a car big enough for two child seats, a dog, and a trip... shopping. But small enough to park in even the smallest parallel parking space. Still works on Madison Avenue, Manhattan. Created in 1994, it is the best- selling SUV in America and non-pickup vehicle to this day.
RAV4 sales have fallen 29% this year . The Dodge Ram, Honda CR-V, and Tesla Model Y outsell it in sales. Now here's what we find exciting, Yaris. The decline of the RAV4 is not due to a lack of demand. In fact, demand is at an all-time high , Jack. Waiting list. You see, Jack's aunt, Jack's ex-girlfriend, Jack's childhood best friend —they all have RAV4s, right, Jack?
This is a new Subaru. Let's say this. There's now a group chat called " RAV4 Group" with all your exes, grandmas, and cousins. Almost everyone except my current significant other . But every five to seven years we get a brand new RAV4, a little bigger, a little sportier, and a little more brutal looking.
But last year something unusual happened. In the final year of the fifth generation RAV4, everyone wanted it. Usually, when people know that a brand new version is coming out next year , they wait to buy the new product next year. Like you do with iPhones. But Americans want the RAV4 so badly that they bought 480,000 cars from that last batch of the fifth generation.
The demand is so crazy that Toyota decided, " Let's keep making these old RAV4s instead of stopping production to retool for the new generation." And this re-equipment of the factories finally took place this year. And for the first time, the RAV4 will be offered only as a hybrid. So those two months of retooling, when RAV4s weren't being produced, caused huge pent-up demand.
Therefore, any RAV4 at your local dealership is almost certainly already reserved. Waiting line. RAV4—like the iPhone, you have to order in advance. Again, the queue. This production delay, by the way, is a rare logistical hurdle for Toyota, the most profitable car company in the world. But this is a delay caused by the car being so valuable.
So, Jack, what's the conclusion? For all our friends who drive RAV4. Always a good time for a bargain purchase. Yeti, there's an old saying in business: no one was ever fired for buying IBM. Many of IBM's sales were once driven by executives who simply chose the safe option that would n't get them fired.
And the situation is similar with the Toyota RAV4. Yes, the brand's reputation for value and reliability makes it a choice your husband or wife won't "fire" you for. We are surprised that 2025 was the best year in RAV4 sales history. And this was before the war in Iran. The RAV4 gets 41-43 miles per gallon, which is 65% better than a typical new car.
So, just like Walmart, Costco, or TJ Maxx, Toyota does well in both good and bad economic times. RAV4 sales have exceeded 400,000 units per year every year since 2017. Sales were high both in good years and during COVID and inflation. The rich buy it because of its reliability, the rest because it is affordable.
And so it is with all budget products. Yes, this is a "profitable menu" among cars, always a good time for a profitable choice. And now a short word from our sponsor. Our third and final story is about one musical instrument currently at the peak of popularity: the saxophone. The saxophone's surge in popularity is thanks to rap and technology, and one Japanese company is benefiting from it .
Yeti, do you know who the biggest venture capitalist in America is ? This is the army. The Pentagon is responsible for GPS, the internet, and the jeep. Oh, we have one more item to add to the list. Saxophone. Yes, Nick and I dropped by T-Boy's town. The saxophone was invented in the 1840s by a Belgian named Adolphe, with the not-so- lucky last name, Sax.
Yes, the main customer of the first saxophones, imagine , was the French military. Mr. Sax essentially took a clarinet, bent it from the bottom, and made it out of brass. I wanted something much louder so that the soldiers could hear it on the battlefield where they were playing. And the saxophone became the favorite instrument of the " roaring twenties" .
The saxophone migrated from European marching bands to American jazz bands. John Coltrane was a firecracker on the saxophone in the 50s and 60s . Then there was Clarence Clemons and the E Street Band in the 70s and 80s. And later the saxophone moved from jazz to become the leading instrument of rock and roll.
But let 's slow down the podcast , because, Nick, my favorite saxophone solo—come on, Jack. "City on Down" by the band OAR. This is truly a legendary thing. Write "OAR" in the comments if you know what I'm talking about. Write "I have no idea" if not. But, friends, Jack and I can pinpoint the year when the “ saxophone bubble ” burst.
Oh, and to be clear, I'm of course talking about the live version of "City on Down." 1992. It was the peak of the saxophone's popularity when Bill Clinton played it on the Arsenio Hall Show. Governor Bill Clinton, future President Bill Clinton, thanks to that saxophone. That year, Whitney Houston's song "I Will Always Love You, " featuring a beautiful saxophone solo, topped the charts.
That's right . And then Kenny G made the saxophone something awkward. The saxophone has gained a reputation as an overly emotional instrument. So because of this reputation, by 2000, saxophone solos had all but disappeared from the charts. In fact, 2000 was the first year without any songs featuring saxophone in the top 100.
But over the last 10 years, and especially this year, we've seen a resurgence of the saxophone. And, oddly enough , it's caused by rap, technology, and —spoiler alert— anti-technology. In 2015, Kendrick Lamar brought back the saxophone with the album "To Pimp a Butterfly ". Saxophones are heard throughout the album.
This inspired Beyoncé and Jay-Z to add saxophonists to their tracks. Spotify's algorithm took the hint and started suggesting saxophone in your feed more often. And this year, the saxophone solo became a real trend on TikTok. Have you seen the meme where the saxophones get louder and louder? Yes, you saw him.
Well, we heard. This is a saxophone solo from the 1991 film Street Boys, played in the most tragic scene. But today, influencers are carving out that saxophone solo for comically tragic TikTok videos. It's like you're out of cereal for breakfast, and you've already poured the milk. Exactly. No, you've already poured the cereal, but the milk is gone.
Well, you film it, you turn on that saxophone song from Street Boys, and you write on the video that the saxophone is getting louder. Thanks to this virality, the largest YouTube channel about saxophones, Better Sax, has grown by 65% in subscribers this year. Oh, and Kirk Weilham, the saxophonist from that Whitney Houston song and the " Street Boys" soundtrack, is selling out concerts again.
And Nick and I found a winner in the stock market thanks to this saxophone boom. Yamaha Corp. That's right, saxophones bring profit to this Japanese music company. Their shares have risen 21% over the past 12 months. Because Yamaha manufactures 27% of all instruments in the world, including 33% of wind instruments.
Which includes the saxophone, because thanks to the reed it is a woodwind instrument. Yes, even though it's brass , as Nick, our saxophone expert, says. Sum it all up, Eddie. And Yamaha is also an electronics company. But ironically, the main driver of their saxophone rise is anti-technology. So, Jack, what's the takeaway for all our saxophone-loving friends?
What is your unique advantage? Listen, Eddie, Jack's business school teacher had a Spanish accent, and it was the first time Jack had heard this word—"unique," which is actually very difficult to pronounce. Unique. Every business should ask itself: what can we do that others can't replicate? Unique.
It's so hard to pronounce . Well, Bloomberg asked the composer what the advantage of the saxophone was at this unexpected moment. That's what he said. The saxophone is the instrument whose sound most closely resembles the human voice. And the sound of the saxophone is the most difficult to reproduce electronically.
So it's interesting to watch the saxophone boom. This is likely due to the explosion of technology, digitalization, and everything related to AI. First, there is a need for real human emotions, not robotic ones. And secondly, people are attracted to sounds that computers cannot imitate. So, friends, what is your unique advantage?
Unique. Jack, can you prepare a recap for us for another Friday? The saxophone is the sound of the year thanks to Kendrick, a TikTok trend, and computers. What is your unique advantage? Second, Anthropic is a tenant, SpaceX is a landlord, and Amazon chips are homeless in data centers. Meanwhile, Ken Griffin says AI is almost certainly a “ bubble.” And finally, the Toyota RAV4 dropped three places in the American car ranking to sixth place.
Not because of low demand, but on the contrary—because of too high demand. Waiting line. But friends, this is not the end of the podcast. Here's what else you should know today. First of all, this is what a spoiled holiday looks like. Meta announced earnings yesterday, and then a judge announced a record fine.
Meta's revenue grew 26% in the third quarter, and profits reached $10 billion. But remember Cambridge Analytica, that privacy scandal in the 2016 presidential election? A judge in New Mexico just ordered Meta to pay $25 billion. This is a huge fine. However, Zuckerberg just shrugged, Wall Street was not fazed, and after the close of trading, the shares rose by 7%.
Second, Elon Musk held his second earnings report in a row. SpaceX on Tuesday, Tesla on Wednesday . Tesla's revenue and profits have declined. Tesla's peak as an automotive company was actually a few years ago . But Tesla is an automotive and robotics company, Nick. What's wrong with you? Who cares about cars?
Exactly, and that's why Tesla shares rose after the close of trading while investors peppered Elon with questions about " Elon Inc."—the seemingly inevitable merger of SpaceX and Tesla. Special. And finally, has anyone seen our super valuable Pokémon cards? Because they just got robbed of $963 million .
A FedEx truck in California with 200 packs of trading cards was parked outside a store where they were supposed to be authenticated , but the door was left open, and inside were $963,000 worth of cards. Why did you rob a Pokémon truck, Willie Sutton? Because that's where the money is. And Pokémon cards are now money.
And now it's time for the best fact. It was sent to us by Quinton Brown via email this week. Earlier this week, we talked about Kendall Jenner, aka Kylie Jenner, wearing a $50 million diamond bra at the Victoria's Secret show. But we didn't mention that this bra was the most expensive in human history.
It was made by the famous jeweler Jacob and Co. And it beats the $ 15 million Victoria's Secret Fantasy Bra worn by Gisele Bundchen in 2000. Because this piece had 4,410 natural diamonds, including a 75-carat yellow diamond, which alone is worth $22 million . It took 15 people and a thousand man-hours to create it.
But interestingly, the company they collaborated with to create the bra, Jacob and Co. , has a simply crazy story. Jacob Arabo was born in Uzbekistan and moved to Queens as a teenager. And it was he who became the main hip-hop jeweler of the 2000s, selling diamonds to Nas, Kanye, 50 Cent and Jay-Z. And now Kendall, that is, Kylie.
Yettis, you look great today. And Jack, you're so radiant, and I think I know why. Well, I started training. And do you know why I started training? I didn't know why, but I was wrong when I said I knew why. Free bear hugs. You know, a ticket to the Seattle show entitles you to one free bear hug from me.
This is true. And at our show in Boston, Jack was giving out free hugs, and there was... wait. So, buy your tickets now to see us at our last live show of the year in Seattle. Where can I buy tickets, Jack? Bull markets, bear hugs. Get your tickets. Link in the episode description. November 4. Or go to tboypod.com.
Jack and I will see you in Seattle in 2 weeks. This is Jack. I own Amazon stock. Nick owns shares in Zillow and Airbnb. And we both own shares of SpaceX. I am one, Nick is many. And my tenor saxophone was a Selmer.
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