AI vs. Gen Z: The Hiring War Has Begun

TL;DR

1. More than 1 in 3 U.S. managers say they’d rather hire AI than Gen Z.

2. Tesla who? Waymo’s robotaxis head to D.C.

3. GameStop buys bitcoin; stock drops 25%.

4. Uber left Lyft in the dust. Now, activists are stepping in.

AI Is Quietly Shutting Gen Z Out of the Labor Market

The youth labor market is quietly unraveling — and AI is accelerating the decline. The unemployment rate for 20- to 24-year-olds hit 8.3% in February, more than double the jobless rate for workers between the ages of 25 and 54.

• Globally, 20% of Gen Z are out of both school and work, with youth (15-24 year olds) unemployment topping 20% in Spain, Sweden, Portugal, and Greece, and nearly 15% in the U.K.

Entry-level jobs that once served as stepping stones are vanishing. In fields like law, finance, and tech, tasks traditionally assigned to junior staff are either being fully automated or completed more quickly by fewer workers using AI. 

One study found that developers using AI saw a 26% boost in productivity, and, in the months after ChatGPT’s release, freelance job postings for software and web development roles fell 21%.

• Over one-third of U.S. managers say they’d prefer AI to Gen Z hires. 45% would rather hire a freelancer or a former employee. Why? Gen Zers lack “real-world experience,” don’t work well on teams, and cost too much to train.   

With fewer white-collar roles available, 52% of college grads now work in jobs that don’t require a degree, up from 44% in 2016. 

Human-facing industries have been the most resilient. A degree in nursing, for example, offers one of the best returns in education — the certification pays for itself in just nine years.

It’s not just AI. The “low firing, low hiring” job market is partly to blame. The hiring rate for private companies is 3.7%, a 10-year low. 

On the surface, the U.S. unemployment rate of 4.1% is strong — well below the EU (5.8%) and Canada (6.6%). However, the aggregate rate masks underlying challenges — particularly for young professionals.

I keep thinking about a question I get asked a lot — especially as I am about to take my son on college tours: What should students actually be learning right now?

There’s no single formula, but I’d break it into two camps. For the minority of students who are genuinely passionate — or just exceptional — at something like computer science or biology, the advice is simple: Go all in. 

But for the majority who just want to become economically competitive, the most resilient and versatile foundation is a mix of finance, economics, and the sciences. Understanding biology or chemistry gives you a working model for how the world operates — business often mimics biology. I also wish I’d taken more English. If you can write clearly, you can think clearly — and that carries across every medium. 

But more than anything, I tell students to be social. The easiest way to improve your odds of getting a job is having a lot of friends. When Google posts a job, it probably gets 200 resumes in minutes. Most of the time, the person who lands the job is someone who has a friend at the firm. The way you change the trajectory of your professional career is relationships. So while you’re in college, focus on establishing deep, meaningful relationships.

Waymo Heads to Washington. DC

Waymo is heading to the capital. The Alphabet-owned autonomous driving company plans to launch in Washington, D.C., by 2026, expanding a footprint that already includes Phoenix, San Francisco, Los Angeles, and Austin. Employee-only rides have quietly kicked off in Atlanta. 

It’s gaining real traction. In San Francisco, Waymo grabbed 22% of the ride-hailing market (excluding freeways and the airport) in just 15 months — despite being slower and pricier than Uber or Lyft. 

• Across its current markets, Waymo now serves over 200,000 paid rides per week. That’s roughly the output of 1,500 human Uber or Lyft drivers. 

However, operational momentum hasn’t translated into financial results … yet. According to Bank of America, Waymo made just $50-$75 million in revenue last year while racking up $1.5 billion in losses.

Still, investors are buying the long-term vision: The company raised $5.6 billion in 2024 at more than a $45 billion valuation, backed by Silver Lake, Tiger Global, and Andreessen Horowitz.

This is a case study on brand perception. Ask most Americans to name a self-driving-car company, and they’ll say Tesla. But the reality? Waymo is miles ahead. If it can maintain this momentum, Waymo could be a huge 2027 IPO.

Waymo completed over 4 million paid rides last year — that’s more than 11,000 autonomous trips every single day. How many did Tesla manage? Zero. Amazon’s Zoox? Zero. GM’s Cruise? Also zero and shut down. Waymo is the only autonomous vehicle company in America that’s actually delivering.

It’s wildly underrated in the tech community — and it’s one of the reasons I’m so bullish on Google.

GameStop Buys Bitcoin; Wall Street Sells GameStop

GameStop’s board unanimously approved plans this week to buy bitcoin using a mix of corporate cash and proceeds from future debt or equity issuances. To help fund the move, it’s raising $1.3 billion through a convertible bond offering. The stock briefly popped on the news before reality asserted itself. Shares dropped as much as 25% the day after the announcement. 

• The sell-off reflects deeper concerns, namely, the core business is shrinking: Q4 revenue fell 28.5% YoY, and management announced it would close a “significant number” of new stores this year.

GameStop is taking a page from Michael Saylor’s playbook: raise money through convertible bonds, buy bitcoin, and hope that it keeps going up. GameStop’s bonds carry a 35–40% conversion premium, lower than Strategy’s 55% last fall. That suggests investors are demanding better terms, signaling a more cautionary stance.

Michael Saylor is running a sophisticated Ponzi scheme, and now GameStop is following his lead. Strategy is buying up bitcoin, using the bitcoin as collateral to sell bonds, and then using the proceeds from the bonds to buy even more bitcoin, which they again use to sell even more bonds. This is not a business model; its financial success depends entirely on continued price appreciation.

It would be different if the bonds were secured by a productive asset that generates cash. But in the case of Bitcoin, there is no cash -- just speculation. Strategy's entire model is dependent on more investors entering the ecosystem. And now struggling companies like GameStop are following suit.

I think Ed’s off the mark calling this a Ponzi scheme: This isn’t fraud, it’s a massively levered bet. No one’s fabricating returns or recycling investor money. It’s a high-conviction, high-volatility trade on bitcoin. If the price drops 50%, Strategy’s stock probably falls even harder. You could argue it's reckless, but it’s not illegal. It’s not so different from levering up on gold or raw land: no yield, no cash flow, just belief in long-term value.

A convertible bond is a type of debt that can convert into a predetermined number of shares — typically once the company’s share price hits a certain level. Investors get interest like a normal bond but also a potential upside if the stock takes off. It’s basically a hybrid of a loan and a stock option.

The conversion price is the price at which the convertible bond can be turned into shares. The conversion premium is the percentage difference between the current share price and that conversion price. If the stock is trading at $10 and the bond converts at $14, that’s a 40% premium — meaning the stock has to rise 40% before conversion makes sense. Read more and see an example here.

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Engine Capital pushes Lyft to find a way out of the slow lane

Activist investor Engine Capital has taken a 1% stake in Lyft and is calling for board changes and an end to the firm’s dual-class share structure. 

• Since its IPO, Lyft has shed more than 85% of its market value. Uber, meanwhile, is up 75% over the same period. 

What went wrong at Lyft? Uber understood that network effects and economies of scale would boost profitability. It expanded into 15,000 cities across more than 70 countries, added delivery (33% of its revenue) and freight (14%), and now generates $44 billion in annual sales — nearly 8 times Lyft’s entire business. 

• Uber Eats alone brings in more than double Lyft’s total revenue.

Lyft, by contrast, stayed in the U.S. and Canada and remained dependent on ride-hailing.

Even at home, it’s losing ground: Uber now controls 76% of the U.S. market, up from 62% in 2020. Lyft has dropped to 24%, down from 38%. 

• Uber has added more monthly active users in the past two years than Lyft has in total.

Lyft didn’t scale. It stalled.

This is an unserious activist play. They’re asking to reorganize the shareholder structure and get rid of the dual-class shares, when … dual-class shares exist so that this doesn't happen. They exist so that founders can protect themselves from activist investors.

Lyft is an example of a second-place player that has not been able to establish scale or differentiation. 

One clear option is to pursue a sale. But if there’s one thing I’ve learned about activism, it's that once you get into the boardroom, you find you’re not as smart as you thought, and they’re not as dumb as you’d hoped.

When you show up and say “you need to sell,” what you generally find is that they've hired a banker two years ago.

However, my guess is that buyers are waiting. Why not wait another six months when it goes down another 15%? So Lyft has to find some kind of growth, even if it’s a smaller acquisition of $100 million to $1 billion, to say we have something that differentiates us or gives us a pulse.

Scott answers listener questions on generational wealth, business exclusivity, and where he draws the line with his dirtiest jokes. Listen here.

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Mia’s Bonus Reads

1. Which countries influence global music streaming the most? Which have the most unique taste in music?

2. In 2024, advertisers spent 90 times more on women’s March Madness campaigns than on the men’s. Dive into the data here. 

3. Northeastern students are going south for college.

4. The $20 burrito you order from DoorDash could now cost you $70..

Correction

In last week’s story about the booming EU defense industry, we should’ve specified that Rolls-Royce Power Systems, the defense manufacturer, is not the same company that makes Rolls-Royce cars.