¶ Introduction
Welcome back everyone. Today on the Joseph Carlson Show, Google's making everyone nervous. We're seeing this over and over again. We first saw it with NVIDIA. NVIDIA released this blog post saying, hey, Google's making great Tpus. Congrats on the success, but we're still the best. Remember us NVIDIA? Don't choose Google's Tpus, Meta. Choose us, NVIDIA.
That was a very defensive move. And then we also have Jensen going around on, on different interviews, answering the question over and over again about whether or not he's concerned about Google. And of course he's saying, I'm not concerned at all, even though they're doing a great job. I'm not worried at all. But then we have Open AI. Google was supposed to be the company disrupted by Open AI, but it seems like the tables
have turned now. Googles apparently making Open AI and Sam Altman send out a memo saying that there is a code red. The Wall Street Journal has written about this memo, revealing a lot of the details of what Sam Altman said in it, what he's revealed and the direction that Sam Altman's now taking open.
AI, which is a big change. We're going to be looking through this and seeing how investors can identify these type of companies, the Googles, where people are very nervous about them, and then it turns out, OK ahead of time. Now, of course, we have a lot of other news to get to. We have a opinion piece in the New York Times from a surgeon that says that Waymo is so incredibly safe that people don't really understand the medical and the human life consequences of a Waymo robotaxi.
We also have news that one of my largest positions, which is Netflix, is down over 5% today on the news that they're bidding on Warner Brothers Discovery. Very seriously. Apparently this isn't just a fake bid. Netflix wants to own Warner Brothers Discovery. We'll be discussing from a shareholder perspective here. And we have the fail of the week, which in this case, unfortunately, I have to highlight Waymo. So we're going to be talking about Waymo a couple times here.
In this case, a Waymo drives by an intense high stakes scene of a standoff between someone lying on the ground and a bunch of officers pointing their gun at them. So we'll be going over the fail of the week as well. So we have a ton of things to get to. This is a very full episode. And just a quick mention, if you haven't tried out qualtrim.com, the best stock analysis platform, you're missing out. We've had thousands of new people join just over the past week.
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¶ OpenAI Sam Altman Declares Code Red
If you haven't tried out Qualtrim, you're missing out. Try it out now at qualtrim.com. Now, we kick things off today with the news that Google's making everybody nervous, and this is the Cinderella story. It's the swing and sentiment that we've seen happen over the past seven months. And this comes back to one major point of investing. The biggest thing that investors struggle with, to have superior
returns. It's one of the biggest things that Warren Buffett and many other great investors talk about. Buffett has routinely stated that he believes the most important thing in investing is your temperament, your discipline. He said that he does not believe the person with a 160 IQ is a better investor than the person with a 130.
Out of those two people, whatever 1 is more emotionally disciplined, more stable, more level headed, whatever one can control their temperament better will be the better investor. In fact, he even says that knowing advanced math doesn't make you a better investor. Having complex spreadsheets doesn't make you a better investor. In fact, Charlie Munger was asked if he's ever seen Warren Buffett use a spreadsheet and he said never, not once.
Buffett makes judgments based off very simple calculations. But more importantly, Buffett has an extremely stable temperament. He's an extremely disciplined investor. He doesn't follow the prevailing sentiment of whatever the market's thinking, and that's where he's gained most of his alpha. You also look at the investors like Peter Lynch, one of the greatest of our times. He's over doubled the market
average for 11 years straight. He had an incredible performance at Magellan, and he's one of the ones that said that it's not the brain that makes money, it's the stomach. Being able to control your stomach, being able to just go through the volatility and control those swings is where the money's made. He made very simple judgments. Good companies will do well over time. Companies that grow their earnings will be worth more over time. And don't worry about the
volatility and the swings. But again, this is much easier said than done. Even though we have all these great investors, Warren Buffett, Peter Lynch, Dev Kantasaria, all emphasizing all the time that emotional discipline and temperament are the most important ingredients in investing, investors still get it wrong all the time. The market is made-up of humans. Humans are emotional. Humans follow the pack. It's a safety protocol.
We feel safety in numbers. So when other people are doing something, we don't feel safe if we're not doing the same thing. In fact, we feel like an outcast, an outsider for not following with the crowd. That feels wrong inherently. It's in our biology. The investors that are the best in the world are the ones that can control their temperament. They feel comfortable either way. They can be with the crowd, or they can be entirely alone and
feel equally comfortable. They don't have to fit in and they're not swayed by the popular sentiment. And the sentiment can be very persuasive when we look at what goes on with different stocks. You'll notice the trend in investing. Anytime a stock soars to all time highs, people are very bullish on it. Almost every time you look at a company like Duolingo as a recent example, when it was at it's all time highs, people are extremely bullish on it, extrapolating huge amounts of
growth. They're saying that it's going to go on forever and then when the stock price went down, people are saying it's a bad company, it's a bad bet. It's being disrupted by AI. Who would ever want to own that thing? They looked at Netflix as a premium company, one of the best in the world. When they lost subscribers for 1/4, sentiment entirely changed. The stock price went down 70%. Nobody wanted to own it. They said it was being disrupted.
Now that it's back up to all time highs, it's viewed as one of the best companies in the world. People want to own it. You can see the same thing with so many stocks going back just over the past five years. Sentiment usually follows price and people usually follow the common prevailing sentiment. Being able to be detached from that is incredibly important and that's exactly what we see with Google. Google is the one having the all
hands on deck meeting. They had a problem and it was Open AIA company that came out with this new way to consume data that Google felt very threatened by. So Sundar Pichai had meetings with their top executives. They came up with a game plan to address the situation. Sentiment at the time was incredibly low on Google. The stock price was less than half of what it is today. Now we Fast forward just seven months and the roles have
entirely reversed. We have an article here from the Wall Street Journal titled Open AI Declares Code Red as Google Threatens the AI Lead. This is the polar opposite of what we just saw not even a year ago. When we read into this report, it goes over what Sam Altman's
doing. Sam Altman told employees Monday that the company was declaring a Code Red, an effort to improve the quality of ChatGPT and delaying other products as a result, according to an internal memo reviewed by the Wall Street Journal. So the Wall Street Journal has they they got a copy of this memo and they're revealing some
of the details. They mentioned that this company wide memo is the most decisive indication yet that opening eyes feeling the pressure they're feeling it from other competitors, but especially Google. We saw some data showing that Gemini three had a big spike in download. It had a huge surge of popularity. It had overwhelmingly positive reception on X and social media. And we've seen it right there in the App Store. You know, there's usually ChatGPT, some random app, and then Gemini.
So Gemini is now right in the top five right there with open AI, with Chachi BT. So this comes right after the recent success of Gemini 3 and says a particular concern to Altman is Google. So this isn't something where they're just concerned about all general AI companies. They're concerned about Google. They released their new version of its Gemini AI model last month that surpassed open eyes model in industry benchmark tests and sent the search giant
stocks soaring. So that's part of the reason Google stock is up so much. Gemini's user base has been climbing since the August release of an image generator, Nano Banana. And Google said monthly active users grew from 450 million in July to 650 million in October. So they gained an incremental 200 million active users in a few months, growing very quickly.
One of the biggest things to contrast here is how these two companies may seem like they're very similar because you have Chachi, BT and Gemini, very similar applications, but they're in very different situations. Google does not need to make Gemini profitable. They don't need to do it anytime soon. In fact, they could have it run at a loss for five years. Google is one of the highest net income companies in the world right now. It's the highest, over $100
billion in net income. So Google has all the money in the world. They can run Gemini, just focused on user experience without profitability for as long as they really want. Now Chachi PT on the other hand, and Open AI are not profitable. They have enormous obligations. They've had investors invest enormous amounts of money and they need to pay back on that money. At some point, they need to generate some profit.
But if Open AI pushes in the profitability mode and it degrades the user experience, putting on ads and monetization efforts, it may make it so that more people divert from Chachi BT to Gemini. So Open AI stuck between a rock and a hard place. They need the user experience to be superb, better than Google's, and they need to monetize at some point in time. And that's the challenge that
Altman's facing here. Sam Altman said the Open AI would be pushing back work on other initiatives such as advertising AI agents for health and shopping and personal assistance called Pulse. He encouraged temporary team transfers and said the company would have a daily call for those responsible for improving Chachi BT.
On Monday evening, Opening Eyes head of Chachi BT, Nick Turley said on exit the company was now focused on growing its chatbot while also making it feel even more intuitive and personal. He was going to turn the wheels of monetization. Then Google released Gemini 3 and he thought, wow, that's really good. We can't do the monetization thing just yet. We have to make ours even better. So he's delaying monetization as a direct response because of Gemini.
They say that Altman has managed to dispel concerns about Open AI's financials, largely due to Chat GPT's massive growing user base of more than 800 million weekly users. In an internal memo, he said that a new reasoning model that Open AI is planning to release next week is ahead of Google's latest Gemini model, and that the company's still performing well in various other fronts. Don't you remember the last time that Sam Altman was asked directly about the financial
state of Open AI? He acted super defensively. Brad Gerstner basically asked him about this same question and he said if you want to sell your stock, Brad, then you can sell your stock. I don't think that really dispels concerns when you act that way when you're asked a very fair, straightforward question. But regardless, Chachibti is going to release some model next week that should beat out Geminis, and that's how Open Eye
plans to keep the lead. But as of right now, it seems like Google has this way of really turning the tables, going from a company that had a code red themselves just this year to now making other competitors have code Reds. You have open AI, the disruptor, now being potentially disrupted by Gemini. Google somehow was able to do
this. And if you looked at the financials and the fundamentals this entire year, if you looked at every single quarterly report, Google looked good the entire time the whole way through. There was no point of weakness throughout this entire year with Google stock, yet the sentiment would have told you otherwise during April, During May, Google looked like it was in serious
trouble. But investors that stayed the course and listened to Buffett's advice of having good temperament, being slow and methodical with your decisions. Investors that listened to Peter Lynch that said that money's made with the stomach, not the brain. Investors that listen to Dev Kantasaria that doesn't ever trade his holdings. He just holds on to them quarter after quarter. Regardless of the prevailing sentiment, those are the investors that made the most
money in this case. Now let's go to move on to some news. Now, one piece of news, and I
¶ Google Servers In Space
forgot to even mention this in the outline of the episode, but we get to this Fox News interview and we have Sundar Pichai here. And I just thought I'd I'd mention this because it's actually crazy that the state that we're in right now, Sundar Pichai is talking about having data centres in space. And that's not that's not something made-up. This isn't an AI video, this is just Google's real plan. I mean, over time at Google, we're always proud of taking moon shots.
You mentioned way more earlier. You know, that's been over a decade in the making. We're working on quantum computing. In that spirit, one of our moon shots is to how do we one day have data centers in space so that we can better harness the energy from the sun. You know, that is 100 trillion times more energy than what we produce in all of Earth today. So we want to put these data centers in space closer to the sun. And, and I think we are taking our first step in 27.
We'll send tiny, tiny racks of machines and, and have them in satellites, test them out and then start scaling from there. But there's no doubt to me that a decade or so away, we'll we'll, we'll be viewing it as a more normal way to build data centers. All right, So we're at the point now just to clarify, we're at the point now where Sundar is talking about data centers in space.
And this isn't some like, you know, far out there, Joe Rogan kind of the thought process that may or may not happen. They're literally planning on it like this is one of their moon shot bets, similar that they've done with Waymo, which is a reality similar that they do with a lot of things. Google's planning on doing this, making it so you can actually have a data center in space. It's super cool stuff. And it shows that this company still continues to make these
long shot investments. It's very cool to see that they use the money they make, all the profits they make from other businesses like advertising. They pull them together and then not only do they give some of it back to the shareholders, which I think is appropriate, but they also have a decent amount that they make for these type of long shot beds. And if Google wasn't so profitable on the other sides of their business, they'd never have the money to be able to do
this stuff. Waymo wouldn't have existed without Google's advertising business to fund it. So it's very cool to see how this company can make one section profitable, fund these type of things. And then in the future, they can be big businesses like we think Waymo will be today. Now, on the subject of Waymo, we
¶ Waymo Is Changing Health Care
also have this essay here. This is an opinion piece from a guest writing on The New York Times. In this write up, he's trying to give people more of a look of the reality of how incredible what Waymo's done, what they've already accomplished. And before we jump into this, I just want to I want to I just want to compare and contrast this with the popular sentiment on X about Waymo. This is 1 new post just a a day ago on on Waymo. This is from an account named Laci Presley.
She says Waymo, the Waymo problem complexity collapsing on complexity. Waymo's approach layers, lidar, radar, HD maps, and a massive sensor array all stitched together through heavy decision making logic. On paper it sounds robust. In practice, it means more points of failure, more disagreement between inputs, more brittle behavior and unusual scenarios. She goes on to say why Tesla's approach dominates the future. Tesla's full self driving philosophy is brutally simple
and brutally scalable. End to end neural networks trained in the real world, not idealized. Maps, vision only mirroring and human driving stack millions of edge cases clipped, absorbed directly into training data. A unified model not competing with sensors or silos. A global fleet generating continuous feedback. These are one of the many posts that gets a lot of attention. You have an interview there with Elon Musk.
It's been seen 250,000 times. If you were just to read that, you'd get the impression that Waymo's system's not really working. The Tesla has a better system. That Waymo really hasn't figured it out. And then we see write ups like this which show the entire opposite thing, the total opposite thing of what's being shared around online Now Doctor Slotkin, who has a neurosurgery writing this, he says, I recently got called to see a teenager ejected in a rollover car crash.
It's just awful. The things these these doctors have to see is just awful. Says that the trauma team rushed him, rushed him to surgery to stop major abdominal bleeding. But we all knew when that much energy enters a skull, no operation can turn it back. He was declared brain dead. His death was a reminder of the staggering amount of suffering and loss of human life we accept from car accidents every single day. It's become commonplace.
Now we just think of car accidents as an everyday thing. If a plane crashes, we hear about it anywhere in the world. Anytime a plane ever crashes, everybody hears about it instantly, but every single day there's car crashes killing people. It's just a a matter of reality, a very, a very sad one that we've all accepted.
The self driving car company Waymo recently released data covering nearly 100 million driverless miles in four American cities through June of 2025, the biggest trove of information released so far about safety. I spent weeks analyzing the data. The results were impressive when compared to human drivers on the same Rd. Waymo's self driving cars were involved in 91% fewer serious injuries or worse crashes and 80% fewer crashes causing any injury.
Now a 91% reduction in serious injury crashes is insane. You're reducing serious injuries by 91%, it showed. And, and this, these statistics get even crazier. It showed a 96% lower rate of injury causing crashes at intersections, which are some of the deadliest I encounter in the trauma Bay so far. Other Thomas vehicle companies don't report or they report incomplete data. Waymo, by contrast, publish everything.
And then it even goes into some of the bigger criticisms of Waymo's or perceived criticisms that aren't even real. For example, one of the criticisms of autonomous vehicles is that they may break erratically. So if you're falling behind one, you got to be careful because it might break and then you smash into the back of it and technically that's your fault, when really it was the Waymo causing the accident. But that's not true at all.
That's not even close to true. In fact, again, it's the exact opposite. This last instance may give some skeptical readers pause. There's a common misconception that these cars brake erratically and they can get rear-ended. But they are involved in far fewer rear end injury crashes than human drivers are. And Waymo has never rear-ended another vehicle at an injury level. 100 million miles driven. And a Waymo has never rear-ended another vehicle at an injury level.
Just astonishing statistics. They also drive so predictably they brake so evenly that they themselves get rear-ended. Far fewer than human driver vehicles. Autonomous vehicle companies have reported every contact resulting in injury or property damage over $1000, while studies show that humans don't report the majority of accidents, even with injuries. So these statistics showing how safe Waymo's are actually understate how safe they
actually are. Because many of the accidents by human drivers aren't being reported, Waymo is legally required to report every single one. Even with every single accident reported, they still have fewer accidents in humans. And he emphasizes the medical standpoint of this. So the statistics are impressive. But now he starts to put it in terms of like doctor talk of how medically significant this is. More than 39,000 Americans died in motor vehicle crashes last
year, more than homicide. Aside plane crashes and natural disasters, combined crashes are the number 2 cause of death for children and young adults. But death is only part of the story. These crashes are also the leading cause of spinal cord injury. We surge and see the aftermath of 10,000 crash victims that come to the emergency rooms every day. 10,000 a day. The combined economic and quality of life tool exceeds 1 trillion annually, more than the entire U.S. military or medical
budget. Cars hurt a lot of people. They're necessary. The trade off is far worth it, but they do hurt a lot of people. It's interesting that we have companies that are going for healthcare, right? We have Apple that always tries their healthcare initiatives, the Apple Watch and maintaining healthy habits. We have Amazon that's going into pharmacy. But I've never really looked at Waymo as a healthcare company because it's not, it's not doing
real healthcare. It's not like you go to the doctor and then you're you're seen by Waymo, but it is preventative. The more the society shifts towards Waymo, the the follow on effects, the knock on effects of that are dramatically less healthcare expense, dramatically less injured people, dramatically less spinal injuries and dramatically less deaths.
Waymo can be considered one of the biggest changes in our healthcare system, in our safety and prevention of injury, of anything that's happened over the past 50 years. The data that Waymo's putting out is extremely compelling. In medical terms, this can save 10s of thousands of injuries per year and 10s of thousands of deaths per year with widespread
adoption. Yet there's still some states that are arguing they're still pushing back on Waymo adoption, like they don't want this technology because maybe it will affect Uber drivers, maybe a few people will lose some jobs or have to switch what they're doing for a career. But are we going to sacrifice a far safer way for people to get around because we might, because we want to have protectionism policies for specific jobs? I don't think that's a trade off
worth making. And to the people that still deny Waymo and say that it's complex and it's not working, at this point it's like you're living on a different planet. Have you looked at any of the actual data? Waymo is working. It's working incredibly well. The numbers are indisputably good. Saying that it's complexity collapsing on complexity.
Saying that it's more points of failure is akin to saying that a commercial airliner with two jet engines, each of which are powerful enough to propel the jet, has now two points of failure and not just one. Well, it's good to have two points of failure. Having more points of failure before the thing ultimately fails is a good thing In this case. The multi model way that Waymos operate with a LIDAR, sensors and camera have been proven to
have incredibly good effects. Waymo continues to expand throughout the world. Investors need to get on board with this reality. So far, no one else has matched their technology in the United States. No one else has gotten the approvals. No one else has proven this. So while there's still some people in denial of what Waymo's accomplishing today, the data that they're revealing proves it. This is one of the most revolutionary technological
advancements of our time. It has the potential to transform our healthcare system to prevent 10s of thousands of deaths and injuries every single year and injuries every single day. This could be considered one of the greatest successes that we've had in American history. Yet there's still many investors that don't get it and that's why we look at the data. Now moving on, we get to news
¶ Netflix Buying Warner Media
that one of my top positions, the top five position, which is Netflix, is down over 5% today. So it's down $5.61, down close to $100 per share off of the news that Netflix is apparently bidding a mostly cash offer for Warner for Warner Brothers Discovery. Netflix wants to own it. Now, when I first saw this news, I have to admit I thought that Netflix may be doing the strategy of just trying to up
the bids for everyone else. So someone else owns Warner Brothers Discovery. They paid a lot of money for it. That's what I thought that they may be doing, but I think I was wrong. I think Netflix really just wants to own Warner Brothers Discovery. They've decided that having the sass, that would be advantageous, and that's unique because Netflix is not an
acquisitive company. Warner Brothers Discovery filled a second round of bids, including a mostly cash offer from Netflix in an auction that could wrap up in the coming days or weeks. According to people familiar, bankers for Paramount, Skydance Corp, Comcast Corp and Netflix worked over a long weekend improving their offers for all parts of the Warner Brothers deal. So there you have it. They all want Warner Brothers Discovery, including Netflix, which again, Netflix doesn't
typically do this. Right now, Wall Street is considering this a risky endeavour. That's where I see the stock today. If I had to guess why it's down 5%. I think investors are just a little uneasy about Netflix buying such a huge asset. It's just never happened before and it would be a little weird. Wouldn't it be just a little bit odd to have Netflix own Warner Brothers Discovery? They'd have all the seasons of Friends all the time.
They'd have like the Harry Potter's, they'd have movies like a Dune, you know, and then another thing that they said, they, they said that they'd even have Warner Brothers movies have full theatrical release. So they're also meeting in the middle. They're saying that they'd still keep the box office if they bought this asset. So I think investors are looking at this thinking that that might be a little odd. So investors are a bit nervous right now. I don't think investors have any
reason to be nervous. If Netflix buys Warner Brothers Discovery, it'll be a creative to the company. They'll make money at almost any price they pay. Netflix has so much in way of cash flow. They are a cash printing machine. They're going to be making over $9 billion in free cash flow here soon. They can pay down any amounts of debt. They can get the balance sheet in shipshape anytime they want. So this is a company that's not taking on additional risk by doing this.
It would grow the subscriber base immensely. It'd make them even more profitable on a per subscriber basis, and it would make it so that Netflix addresses one of the main concerns about the company, which is the quality of the content. Netflix has always been criticized for having lower quality content, their original struggle, but if they own one of the best studios in the world, nobody could accurately say that anymore. They'd have a lot of the best content in the world in their
library. So personally, I feel like this is a buying opportunity for the Netflix investor. If they do end up buying Warner Brothers Discovery, I think they'll become more profitable as a result.
¶ Fail Of The Week: Waymo
If not, it's back to business as usual. Now moving on, we get to the fail of the week, which this time is, it's unfortunately Waymo because I was just talking it up. I was talking up Waymo a lot, saying how good it is. And now here I am highlighting Waymo as the fail of the week. And we have a situation here. As you can see right in the background there, there's a lot of police lights. We have something going on in the intersection. It looks blurry.
Then you have a Waymo right there at the beginning of the intersection and just take a look at what happens. Let's go ahead and play this video. We'll take a look at what happens. Waymo. Oh my, Oh my, what the? Waymo doing. There's a dude laying face down on the ground and then in the background there's like 5 or 6 police officers guns drawn. So this is a high stake, potentially shootout position. This guy's trying to just live, right? He doesn't want to move
anything. He doesn't want to, you know, he doesn't want to reach for anything because he has cops with guns drawn on him. And the Waymo just slowly, it just slowly drives by during all of this without a care in the world. The Waymo's going all right, I'll take a left here, avoid all those police cars. I'll drive by that guy that happens to be laying on the
ground. I'll just slow down a little bit, make sure I don't run over him and off to our destination like there's not a care in the world. Obviously, this is an extreme edge case. It's very difficult to train for having five cop cars with guns drawn and a random guy laying on the ground. So I don't think that this was part of the training process. You know, it's not part of their their system that they're
feeding this data into. Now, again, you can criticize this and it is funny to look at what happened. Tesla investors are saying, look at what Waymo's doing, driving by this huge scene, right? It's not just stopping, waiting. But in Waymo's defense, I will defend a little bit here. It did drive slowly around the guy, made sure it wasn't going to hit him, didn't cause any damage directly, but it probably should have waited. The Waymo probably shouldn't have driven into the intersection.
It probably should have realized something's going on when there's that many police lights. So even though I think Waymo overall is doing a great job, this definitely warrants a fail of the week. That's going to be it for this time. Hope you enjoyed, see you in the next one.