Today on The Joseph Carlson Show, President Trump and Open AI have unveiled a new ambitious project. It's called Stargate. The goal of Stargate is pretty simple. It's to put the United States at the forefront of AI. And the amount being invested here, at least the amount cited, is massive, $500 billion. That's half a trillion invested over the next four years to build AI infrastructure. Sam Altman says that we're deploying $100 billion immediately, but how does this
work? Where are they getting the $500 billion and what is the return on this? What does the ROI look like? With this big post on their blog as well as on Twitter, this has launched a flurry of headlines. We have the Wall Street Journal nonstop reporting on this. More compute leads to better models. Open AI hails their $500 billion Stargate plan. It has a list of critics, Elon Musk being one of them. He feels a little left out of the party.
Elon Musk has poured cold water on the project, saying that the money doesn't exist. The announcement of this project also changed the dynamics of some important relationships. Opening the Eye has been moving away from Microsoft, and we have details on why this is happening and the drama behind it. And right now, as we have this flurry of questions going on with this project, we are getting some of the details. In this episode. We're going to try to piece all
this together. What is this Stargate project? How will it impact all of the big tech companies involved in it? And what are the biggest problems facing this ambitious goal? Now, we also have some other news to get to. For example, Netflix just reported their earnings report. This is one of the first ones of the earnings season. We're going to get more into earnings season next week, but
Netflix had a great report. Now as a key holding, I want to go over a few details of what we look for in reports like this. And we also have news of more union strikes. You're seeing this type of news pop up left and right with different companies. In this case, a union was fighting Amazon, and this is one of the biggest self-inflicted wounds I've ever seen a union cause They truly shot themselves
in the foot. Here we'll be going over the sad case of a union causing the job loss of 1700 Jobs. And then finally, Apple stock is under more pressure. The company continues to trade down in price. Over the past month, I've sold out of the majority of my position in Apple. Now I only have a $10,000 position, which is a very small weighting in My Portfolio. We're going to take a look at the future of Apple and the challenges this company's facing.
So we have a lot to get into in this episode. Let's go ahead and jump in with the breaking news Project Stargate. As President Trump has taken office, this Project Stargate is one of the single biggest investments that the US has announced in the past decade. Announcing the formation of Stargate. So put that name down in your books because I think you're going to hear a lot about it in the future.
A new American company that will invest $500 billion at least in AI infrastructure in the United States and very, very quickly moving very rapidly, creating over 100,000 American jobs almost immediately. These numbers are astronomical. And why is there such focus from the presidency, from the United States on this AI project? Well, before we jump into even the details of this project, we have to rewind a little bit to
see how we got here. It was only about a year ago that Open AI was at the forefront of artificial intelligence, releasing models like GPT 4, revolutionary breakthrough models that beat out anything that anyone had released, even companies like Google, seemed years away. Hey, catching PT Hi Mark, how are you? Oh, Mark, I'm doing great. Thanks for asking. How about you? Hey, so I'm on stage right now, I'm doing a live demo and frankly I'm feeling a little bit
nervous. Can you help me calm my nerves a little bit? Oh, you're doing a live demo right now? That's awesome. GBT four and four O were not only impressive, but they showed the importance of having this technology. Artificial intelligence is incredibly powerful.
Whoever wields the power of this technology, whoever develops it and owns it has a major advantage culturally, financially, and geographically, an imperative advantage for the United States. While it seems like the United States has been unbeatable and artificial intelligence with no European models coming close to what that the United States has created, there's another threat to America's dominance of artificial intelligence, and it comes from China.
So here is the name that our audience may want to write down deep seek. This is a new free open source AI model that beats the latest open AI and meta models on key benchmarks. And it was made for a fraction of a fraction of the cost. Now it was trained by a Chinese research lab that used NVIDIA H8 hundreds.
That's a lower performance version of the H100 chips that are cheaper, more available, and tailored for restricted markets like China. Now I've been testing it out this morning and on the surface that looks and acts just like Open AI's ChatGPT, and in fact it actually thinks that is ChatGPT. When I asked what model are you, it answered I'm an AI language model created by Open AI specifically based on the GBT 4 architecture, suggesting that it
was trained on ChatGPT outputs. Which, leaving aside terms of service violations, it means that entirely new state-of-the-art models can be built on what is already out there. The monumental lead the Open AI and other US dominant LLMS had over foreign countries evaporated overnight with the release of Deepseek, China's model that not only mimicked Open AI, but it acted identically to Open AI. Like she notes here, it says that it was trained on Open AI's ChatGPT model.
Not only has China copied Open AI's model and their technology, stealing much of the technology from the US, but they've architected it and made it into a new LLM that is dramatically cheaper. But saying it's cheaper may leave you the impression that it's 20% cheaper or 30% cheaper. That's not the case. Deep seek is up to 90% plus cheaper than ChatGPT. It is literally a fraction of the cost, making China on a value proposition basis the leader in AI. In other words, open a eyes Moat
may be shrinking. If a model like Deepseek can emerge with competitive performance, minimal cost, and reliance on existing outputs, it signals a rapidly shrinking barrier to entry in AI development, challenging the current dominance of industry leaders like Open AI. Based on technical tests designed to measure its coding performance, Deepseek outperformed other models, including Metas, LAMA 3.1 and Open A is GPT 4 O. And by the way, those are the latest state-of-the-art models.
The models from China were so good that they literally outperformed our latest and greatest models from our leading tech companies, and they did it for a much cheaper price. How did the Chinese accomplish this? Well, there's a couple things we know about China. First of all, they have a population of 1.4 billion people. With that type of population, there's going to be a few smart people. In fact, there's going to be many smart people.
China has a major focus on teaching their people STEM, mathematics, computation, things that help you excel at modeling LLMS. China's government also works in concerted effort to focus on key projects like generative AI. These are state funded projects where they put huge emphasis and capital into being the leaders in these categories.
So with a talent pool to work with and a concerted effort from the government, you have major innovation and progress in these fields, even surpassing the US. Now again, there are 1,000,000 headlines on Stargate with all the different political opinions that you could imagine on it and the motivations behind this project. Is it just to get a flashy headline? Is it just for Trump to have one more thing to talk about? All those seem like they could
be contributing factors. Maybe it is just for a flashy headline or a fun thing for Trump to talk about. But if I had a guess, I think there's one other motivating factor, and that is the concern from U.S. officials of the Chinese being the dominant leaders in artificial intelligence. I believe U.S. intelligence agencies view Chinas progress in artificial intelligence as a real threat to the dominance of the US.
If China has LLM models that are already transcending and eclipsing US models, they're already cheaper and more robust, they may start to take serious market share in this important market. A Chinese controlled AI victory would mean greater censorship, greater influence and greater control of data from China, which is something that the US does not want. Enter the Stargate project. This massive project is because the US wants the dominant lead
in artificial intelligence. You can think of it as a modern day space race. This project will not only support the reindustrialization of the United States, but it will also provide a strategic capability to protect the national security of America and its allies. We're going back to the space race. We're going back to reindustrialization. We're going back to large scale infrastructure projects with concerted efforts from the central government.
Now we know that the US doesn't have money to afford a Stargate project. the US is heavily indebted and focused on paying down debts and lowering its interest year by year. With that being known, Trump has tapped many business leaders that are extremely wealthy, some of the biggest big tech companies in the world, and leaders of investment funds. The initial equity founders in Stargate are SoftBank. This is a massive investment fund, Open AI, Oracle and MGX.
SoftBank and Open Eye are the lead partners for Stargate, with SoftBank having financial responsibility and Open Eye having the operational responsibility. There's other investors and technology partners as well that have been listed, ARM, Microsoft, NVIDIA, Oracle, Open AI. All of these companies are contributing their technology to build out this massive project. Now, anytime a project like this is announced, it's met with a degree skepticism and criticism, and that was no different this
time. And the most vocal critic by far, immediately pouring cold water on this project and it's ambitious goals was Elon Musk. The same day that this project was announced by Sam Altman and Open AI, Elon Musk replied saying that SoftBank doesn't have the money, they don't even have $10 billion. And this was a bit shocking.
Having someone so close to the president, someone that campaigned for him, someone that has been next to him and by his side the entire way is now actively undermining the prospects of his biggest capital project as President Trump is calling this tremendous and monumental. Elon Musk is saying they don't actually have the money and this
is where a lot of drama ensued. When Elon Musk commented that they don't have the money, Sam Altman decided to take the High Road. He said I genuinely respect your accomplishments and think you are the most inspiring entrepreneur of our time. With Elon Musk not provoking the response he wanted, he replied again saying that SoftBank has well under $10 billion secured. I have that on good authority. And this is where Sam Altman changed his tone saying wrong,
as you surely know. Want to come and visit the site already underway? This is great for the country. I realize what is great for the country isn't always optimal for your companies, but in your new role, I hope you mostly put America first. This is a comment that hits back hard because he's directly pointing out that Elon Musk is undermining one of the key goals of the president that he helped elect. After this reply, Elon Musk didn't engage in that threat anymore.
Instead, he took to Twitter to post attacks on Sam Altman nonstop for the next three hours. Posting what seems like every 5 minutes with different areas of attack for Sam Altman, digging up old tweets, pointing out how he changes support overtime once opposing Trump. Now why is all of this important?
Because because large companies like Open AI are working with the Trump administration, they have these projects like Stargate, while President Trump is also a partner with Elon Musk. And these relationship dynamics seem to be causing some troubles, at least with Elon Musk. So I'm told by a source that Open AI CEO Sam Altman had a, quote, lengthy phone call with President Trump on Friday and did focus on AI's potential.
They walked through what this technology is really capable of and certain parts of the infrastructure plan that was laid out yesterday. The source here asked not to be named because these discussions were confidential, but they did say it was productive. They described it as amicable. And Trump publicly yesterday really calling Altman at the White House the leading expert on AI. Trump called Sam Altman the leading expert in AI and that
had to sting a little. One thing we know about Elon is there's no shared victories. He doesn't share the limelight and he likes total control over what he's doing. It's how he's ran everyone of his companies. There's no Co CEO. Elon Musk likes having that limelight on himself and anytime that limelight shines on someone else, especially given Sam Altman and their history, well, that causes some issues. Now, while this drama is unfolding, there's other things happening as well in the
background. And one of the most important, especially if you're a Microsoft investor, is the separation from Open AI and Microsoft. This isn't a complete separation, but it's the end of their exclusive agreement. One of the main things that's been revealed with the announcement of Stargate is that Microsoft is ending their exclusive agreement with Open AI. Now, they're not completely detaching from the company.
They're still going to be partners with Open AI, but the exclusivity was an important part for this relationship and having it end open. Some questions. Satya Nadella, the CEO of Microsoft, was asked specifically about the ending of this relationship. Yeah. First of all, anytime a company that you've sponsored and were essentially a seed investor in raises money from others, it's a good day, a good day for Open AI and a good day for Microsoft and our investors.
Look, our partnership continues. We'll be a tech partner to Stargate, but more importantly partnership with Open AI. You talked about exclusivity. Open AIAPIS are exclusive to Azure going forward. Even so nothing changes there. IP access to Microsoft continues. And in fact because of this, there will be more IP. And so therefore we will benefit and we are grab share arrangements that are great and also Open AI committed into a significant, very significant way to Azure consumption.
And so we are very thrilled about that as well. So all up, as far as I'm concerned, this accelerates Open AI's model work, which accelerates Microsoft's ability to go to market with those models and really grow our business. Now, like a good CEO, he paints this as a positive thing. Overall, he highlights the benefits of them moving on and having different partners, but behind the scenes, Microsoft has been less than enthused about the ending of their exclusive agreement.
In the months leading up to the announcement, the two sides have been haggling over what to do about Open AI seemingly insatiable appetite for computing power and it's contention that Microsoft couldn't fulfill it. Even though their agreement didn't allow for Open AI to easily switch to others, Open AI is almost entirely reliant on Microsoft to provide it with data centers it needs to build
and operate. It's sophisticated AI software that has been part of their agreement since Microsoft first invested in 2019. Open a is need for computing power has surged since 2019. Its executives have said that ending the exclusive cloud contract could be crucial to compete with rival AI developers that don't have the same constraints. The talks have intensified in
recent months. Like other tech giants, Microsoft has rapidly increased its investment in AI infrastructure and recently said it would spend $80 billion on AI data centers in its current fiscal year here. But Microsoft also notes that they have other customers and partners besides Open AI. Microsoft ending their exclusive agreement with Open AI is a calculated decision that I think investors shouldn't take too lightly.
Microsoft is saying that we're only going to spend $80 billion and we're not going to push the envelope beyond that amount. I. Don't know if you saw Elon Musk took to Twitter and said they don't have the money. The money doesn't exist as if this is not really going to happen. What do you think of that? Look, all I know is I'm good for my 80 billion. I'm going to spend $80 billion building out Azure.
Customers can count on Microsoft with open AI models being there everywhere in the world, serving open eye models and other models. That's, I think, what I know. I don't know about others, but put me down for 80 billion. That's a line that I can confidently say has never been said up until this time period in human civilization. No one has ever once said, you know, I don't know about you guys, but put me down for $80 billion.
Now, the unique thing about this situation is not only does he say it, but he actually means it. And Microsoft is good for $80 billion easily. There's not many companies on planet Earth that generate this consistent levels of free cash flow. In the trailing 12 months, they generated $73 billion of free cash flow. And this free cash flow is generated after accounting for the massive CapEx they're already spending on artificial intelligence.
Microsoft could spend upwards of 100 billion or 150 billion in CapEx for artificial intelligence, but he's only spending billion. And while that line that Satya Nadella used is one of the most insane lines that a CEO has ever said, it's also telling to some degree. Some companies are showing continuous restraint on how much money they're willing to spend on artificial intelligence, and
Microsoft is one of them. Satya Nadella is concerned about spending too much on artificial intelligence, and I think with good reason. And this is where I believe we get into the area where the Stargate project has very real challenges unique to the technology of this time. We know that President Trump has been big on implementing large industrial projects, ones like the ones we saw in the 1850s.
In many ways, Project Stargate is being compared to comparable projects throughout history that changed and revolutionized the United States. Ones like the rail transportation industry. Class 1 railroads work as the veins of the United States. They go across the entire country and make it so that different goods can be delivered from one place to another. There aren't enough trucks to accomplish this. It has to be done by rail, and
rail is by far the most cost effective way to do it. the United States is so reliant on the railroad industry that it becomes illegal to strike in many cases because shutting it down even for a few days could cause critical problems to different states. Class 1 railroads are integral to the success of the United States. All the basic luxuries we have today are reliant on this system running, and this was a system created over 100 years ago now.
The government in and of itself didn't pay for the railroads, just like they're not paying for Harrogate. It was mostly funded by private companies, but it also had huge government incentives from state and local governments. It was subsidized heavily. So you can see a lot of similarities between what's happening now with government subsidized and government concerted efforts into artificial intelligence infrastructure and what happened over 100 years ago with railroad development.
But even though there's many similarities you can make, there's also some key differences that makes this project of developing artificial intelligence more costly and difficult than laying the foundation of railroads. And the biggest problem with Stargate is the cost. Not just the upfront cost, but the ongoing cost and the returns that are implied from the money invested with every company that we look at, it doesn't matter which one we look at. For example, we can look at Costco.
If we look at Costco's return on capital employed, which is a measurement of profitability for every dollar invested, we can see that last year it was 27%, meaning that if Costco invests a dollar back into its business, it gets $1.27 back. That's really good. That's far above the cost of capital, where their cost of capital is somewhere probably
close to 8 to 11%. So they earn back about double what their cost of capital is. Every dollar that Costco puts into their business, they're making a solid profit in the next year, and they've done this for decades. This is why Costco has been such a reliably good investment with the cost of capital around here. They've always made more money than the cost of borrowing money.
We can look at any other company, for example, we have Booking Holdings and if we go down to that same metric, the return on capital employed, assuming they have a cost of capital around 10 into 11%, you can see that even in the bad years of 2020 and 2021 when business went down because of the pandemic, they still were just meeting their cost of capital. They didn't generate much wealth in these two years, but every other year they're generating wealth far above the cost of the money.
This means it's a profitable business. Booking Holdings is making a dollar thirty $1.50 for every dollar invested back in their business. This is a widely profitable company and we can see the same thing with railroads. Railroads being the veins of the US for the past 100 plus years, transporting that oxygen to different states have been critical. But more importantly with railroads, they run a very successful and profitable business at the same time.
Union Pacific's return on capital employed is not as high as Booking Holdings or Costco, but it's still pretty good up into the range of 13 to 16%, assuming that their cost of capitals anywhere from 8 to 11%. This is a profitable business year after year and that's why these Class 1 railroads have done well for investors for decade after decade. It's why it attracted Warren Buffett to these stocks.
But the unique difference between railroads and AI infrastructure is the valuable lifetime of every rail laid, the valuable lifetime of the CapEx investment. For example, if we look at the capital expenditures of the company, which means the physical goods that you're building out to the things like warehouses or in this case, rail for the railroads, you can see that it's been relatively flat year after year for the past two decades. It's average around $3 billion per year.
This is simply maintenance for the rail that's already been laid. It's different repairs and buying different carts, but the benefit of railroads is that when they lay rail, it lasts for a very long time. If Union Pacific invests into building out 100 miles of new rail, they can expect that rail to stay operational for 50 plus years without any major significant CapEx investment over the lifetime of those 50 years.
So they put up the money once and then they only have small maintenance costs for decade after decade. And this calculation of having one time significant upfront cost to build out the rail but then minimal maintenance afterwards is where you get these consistently high returns on capital. If they had to rebuild the entire rail infrastructure every five years, this not only would it be profitable, but this would be one of the worst businesses
in existence. Union Pacific and every company like it would go out of business. There's no way that they could afford to put money back into laying rail every single five years, redoing the work they previously did. The useful lifetime of AI, servers, and GPU's is significantly less than any other infrastructure project we've done. It's less than telecom, it's less than rail, and it's not
even close. The useful lifetime of a GPU is around 4 to five years before it becomes completely obsolete. There are numerous reports from people familiar with these industries pointing out that data center and AIGPUS may have extremely short life spans. This is from engineers at Google, most of them pointing out that they last around three
years. While this seems good for companies like NVIDIA in the short term as they have a reoccurring demand and continually building out new GPUs, this also brings into big questions of the returns these type of companies will get with their significant AI investments. The number being continually quoted here by the Project Stargate is the $500 billion number. And that number in and of itself
seems like this fixed amount. But the problem with this major project is that investment is not a one time thing. The useful life of most of the expensive part of this project is not building out the warehouses or laying in the cement. It's paying for the GPUs that are constantly in use, training the data. And those GPUs will need to be fixed and updated every three to
five years. So this $500 billion AI project is not a one time expense, it's an ongoing reoccurring expense and no company will continue to invest this amount without seeing significant returns. Unlike companies like Union Pacific, which can lay rail once and then wait a decade to get a return on that investment, companies like Microsoft and Oracle need to see much faster ROI's with their investment.
They need to see the returns quickly because the assets they purchased are amortized and depreciate quickly. So the calculation here is entirely different. And one CEO seems to understand this, that is Satya Nadella. Satya Nadella has noted that he's good for the $80 billion. But if we look at how much money they spend on a trailing basis on CapEx and artificial intelligence already, it's around that amount. They're already spending $50 billion. So this isn't some dramatic
change. This is following along their incremental increase in AI spending, which has doubled and tripled over the past couple of years. And This is why you see Microsoft being excluded from many of the comments in the Stargate deal. Microsoft needs to see a return on these investments. With compute being so expensive and the cost of various LLMS from China being so cheap. This could end U being a race to the bottom. But ultimately, we'll have to
wait and see. Now, let's go ahead and move on to some news. Now, obviously, we have the news that Netflix reported earnings and their numbers blew out expectations. Now, before even jumping into this, I get comments from time to time from some viewers that are sick of hearing about Netflix. I realize that Netflix is not the most popular stock on the
interweb. I realize it's not the most popular on YouTube. There's more popular companies like Tesla. There's more popular companies like Google that I could talk about and make more videos about. But the reason that I talk about Netflix, and I've been beating this drum for a long period of time, talking glowingly about Netflix for years, is that I believed it's a good investment. And part of the purpose of this channel is highlighting my conclusions on what I think are
good investments. Netflix stock price was up 65% in 2023. That's a pretty good year. That beats out the major indices. It double S and triples the return of the S&P 500. That was 2023. Then in 2024 Netflix stock price was up 85%. Now in 2025, the stock is up, currently 9.8%. So the reason that I highlight this company and I talk about it probably more than a lot of people like, or at least interested, is because I think
it's a good investment. That's really what it comes down to. And over the past couple of years, the people that have taken a closer look at Netflix stock, in part because of my videos, are very happy that they've done so. I've had no upset viewers for investing in Netflix, so that's part of the reason that I highlight the company continually is because I think it's a good investment. And at this point, I still
believe it's a good investment. Netflix is showing exactly the story that I've been saying will play out for a long period of time. It's flexing its muscles and showing complete market dominance over one of the fastest growing and most important industries to be invested in. A lot of investors get pigeonholed into viewing only one industry that's talked about artificial intelligence. Artificial intelligence, but the media and entertainment industry is massive.
It has global appeal, and there's one company that's showing incredible dominance. The streaming giant added a record 18.9 million new subscribers during the fourth quarter. Now, to put this in perspective, they were expected to add 8 million. So that's what Wall Street had. I thought it was going to be good, so I was leaning more towards 13 million, but I didn't really imagine them adding 19,000,000. That was a surprise even for me. After hearing the news, though,
I wasn't really shocked. The content slate last quarter was incredibly strong, so it's important to know that Netflix now has 302,000,000 subscribers, every one of these being paid. Their ad care is growing incredibly fast. It doubled in revenue in 2024 and Netflix is now forecasting another doubling of their ad revenue in 2025.
This is the type of company that the more I research into it, the more I dig into the earnings report, the more I listen to the earnings call, the more excited I am about the company. Typically when I'm doing analysis on a company, the more I dive into it, the more concerned I become. Their revenue on a quarterly basis hit a record high of 10.25 billion. That is 16% growth year over year, but on a currency consistent basis, that's 19%
growth. The total subscriber jump was monumental from 282 million up to 301 million. This is what the subscriber chart looks like over time. It grew nearly 16% last year. To look at the total subscribers gain this quarter, it was the highest of any quarter in their history, showing that Netflix's total addressable market
continues to be rather large. And one interesting thing about this total subscriber metric is management believes that their total addressable market, what they can eventually grow into is now 750 million plus subscribers. And this is based off of the broadband Internet connected households outside of Russia and China. There's 750 million. Another way of putting this is that currently 300 million, they're not even halfway there.
Netflix's content budget is starting to trend back upwards to a healthy level of around $17 billion. This is where they like it to be. The reason the content budget is going back up is because the writer strikes have ended. Even though they've spent far more on content over the past year, their free cash flow on a trailing basis is still nearly $7 billion. So organic free cash flow growth continues to grow on an earnings per share basis. They grew 65% on a trailing
basis year over year. So even though this company trades at an elevated PE ratio, the earnings per share growth over the past five years has more than made-up for it. This is operating leverage at play and share count continues to decline as they're funneling a lot of money back into buybacks. I currently hold Netflix in my story fund. The gains on it are around $56,000 and it's now moved up to my largest position. I continue to hold every share as I still think the future is
bright. A company going through more difficult challenges right now is Apple. And this has been one of my key holdings for a long period of time. And it's a company that I've significantly reduced my exposure to because I believe the upside and downside, the risk reward for this company has flipped. The latest report is that Apple is struggling to sell in China. It's market share of the iPhone
sales has taken a big hit there. So one of the big issues with investing in Apple is you do have a lot of exposure to China, which I believe we have less control over. It's one thing that I look at with every company I invested in. Is there amount of exposure to China? There are analysts like Dan Ives that believe that the problems in China will be overshadowed by the growth across the rest of the world.
Fears that have driven the stock lower are overdone and a turn around is just around the corner. So some people remain very bullish on Apple, but I'm a bit more hesitant. The current issue I see with Apple is the same issue I've been highlighting over the past year. This company's moved into a different category based on the slowing of its revenue growth. If we look at Apple's revenue growth over the past couple of years, it's been stagnant. It's been completely flat.
In my opinion, Apple has moved from a fast grower into a slow grower. This is one of the six categories of stocks that Peter Lynch outlines. Now, there's nothing inherently bad about slow growers. They're not companies that will lose you dramatic amounts of money. It's not something you should be scared of. In many cases, these are exceptional companies. They're really great.
Examples of slow growers include companies like Walmart, Coca-Cola, or Colgate. This is why you see many people that have these type of companies also owning Apple. The problems with these companies is that they are low risk in predictability and they are low reward. The upside is just not as substantial as fast growing companies. Even though My Portfolio value has risen dramatically, I still consider myself a long ways from retirement. I want to double this portfolio
value and double it again. I want to have constant speed of growth with strong compounding from every individual stock. The slower growth is what gives me pause. So I'm putting my money into companies that I think will grow that top line revenue at around double or triple the speed. Now, finally, we get to another union story. These are always exciting. In this case, it's Amazon against a union in Canada, Quebec. And this was a spectacular backfire by the union organizers
here. The union organizers wanted a pay increase of $6 per hour. Now Amazon said that's too much, we're not going to pay that. And just like an employee has the ability to quit a company's job, a company also has the ability to just shut down those locations to no longer offer the job in and of itself. And Amazon exercised their right to shut down all seven locations in Canada, completely eliminating these fulfillment centers.
Amazon said that it made more economic sense for their business to shift to 3rd party companies in these areas, third party companies to deliver the same packages, reverting to the business model in that area in 2020. They say the decision wasn't made lightly and they're offering the impacted employees a package that includes up to 14 weeks pay after the facilities close, which is a great
severance package. Now obviously the union responsible for this is not happy that all of their jobs are being transferred to 3rd party companies. They say that it's a move that runs counter to the provisions of the Labor Code and one that will be taking a firm stand against. So now they're going to try to take legal action against Amazon to force them to offer those
jobs once again. So to summarize this disastrous fail of a negotiation, this union representing 1700 jobs demanded much higher pay than they are currently getting. Amazon decided to go with third party companies to deliver in that same area and closed every one of these jobs. So now instead of getting their $6.00 an hour pay raise, every single one of these employees are losing their jobs and the unions trying to sue Amazon to reinstate the jobs.
I've tried pointing this out many times that you can have a stance where you're both pro worker, pro workers making more money, pro workers having job protections and against the actions of specific unions. And this is a key example of one. This union harmed these members jobs and put them in a much more difficult situation than they
had prior. And while looking at different news stories of unions actions over the past couple of years, I've received dozens of messages of different, different members of unions, even people that are involved in them that wish they weren't. But this new story is unfortunately a striking example of how things can go wrong. That's going to be it for this episode. See you in the next.