Prof G Markets Markets are Ignoring Catastrophic Risks — ft. Aswath Damodaran
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Feb 20, 2026 
Aswath Damodaran, NYU Stern finance professor known for valuation expertise, walks through looming catastrophic risks to the post‑WWII economic order. He discusses geopolitics reshaping markets, how AI is pressuring software margins, which software firms may survive, and why crowd signals and prediction markets matter for gauging systemic danger.
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AI Will Compress Software Margins
- The first hit from AI disruption will show up in margins, not immediately in revenues.
- Software's long run of high margins likely gives way to a lower-margin steady state with AI.
Build A Survival-Based Software Basket
- Don't buy broad software baskets; filter for companies that cut operating expenses quickly.
- Create a basket of software firms showing recent operating-cost reductions as a better signal.
Private LLMs Create A Gray Market
- Damodaran compares private LLM pricing to past private mega-rounds like Uber to show opacity risks.
- He warns private valuations lag real-time market information and hide where value transfers to AI winners.