Worldwide spending on AI is forecast to total $2.6 trillion in 2026, a 47% increase year over year.
Why AI Stocks Are Overvalued + Are Networking Events Actually Worth It?
Scott Galloway warns that 90% of executives report zero AI productivity gains despite $2.6 trillion in spending — and says AI stocks are priced for a world that doesn't exist yet.
The Prof G Pod with Scott Galloway
Why AI Stocks Are Overvalued + Are Networking Events Actually Worth It?
Scott Galloway warns that 90% of executives report zero AI productivity gains despite $2.6 trillion in spending — and says AI stocks are priced for a world that doesn't exist yet.
TL;DR
Scott Galloway tackles three listener questions in this Office Hours episode. Worldwide AI spending is forecast to hit $2.6 trillion in 2026 [1] — Scott Galloway "AI spending forecast 2026: Worldwide AI spending is forecast to total $2.6 trillion in 2026, a 47% increase year over year." 03:00 , yet 90% of senior executives report no productivity impact — prompting Galloway to declare we're entering an "ROI era" that will trigger a significant drawdown in AI stock valuations [2] — Scott Galloway "We're leaving the AI experimentation era and entering the ROI era — and that transition is going to hurt AI stock valuations hard. Galloway…" 05:40 . He then advises a 25-year-old London entrepreneur to skip Cannes Lions and keep his head down building the business. The most memorable segment: how rowing crew at UCLA taught Galloway that when you think you've hit your limit, you're only about 40% there [3] — Scott Galloway "The ability to know just the delta between what you think are your limits and your actual limits is a blessing." 23:28 .
Scott Galloway answers listener questions on AI spending vs. ROI, whether Cannes Lions is worth it for young entrepreneurs, and how rowing crew at UCLA shaped his resilience and career.
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Before a single question is aired, three sponsor reads set the commercial tone. Google Chrome leads with a pitch for its new Gemini AI integration — framed around practical web tasks like decoding a long article or following a motorcycle restoration blog — signalling the AI theme that will dominate the episode. Indeed follows with an offer of a $75 sponsored job credit for listeners at indeed.com/podcast, leaning into the 'hiring hero' framing. Shopify rounds out the trio with a broad brand promise around sales, checkout conversion, and real-time reporting. All three are pre-content placements designed to be cleared before the Office Hours format kicks in.
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A producer voice-over welcomes listeners to Office Hours with Prof G and lays out the show's premise: listener questions on business, big tech, entrepreneurship, and whatever else is on your mind. Three submission channels are outlined — a voice recording to [email protected], a post on the Scott Galloway subreddit, or a call or text to the new hotline at 201-472-3656. The segment is short and functional, but it frames the episode as genuinely interactive and signals that ordinary people's real professional anxieties are the raw material here.
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Pablo's question cuts to the heart of the most pressing tension in tech: companies are spending furiously on AI, but the productivity payoff is stubbornly elusive. Galloway opens with the macro: worldwide AI spending is forecast to hit $2.6 trillion in 2026, up 47% from 2025. But then the counterweight arrives — a 2024 MIT study found humans are cheaper than AI for 77% of vision-based tasks, and a survey of 6,000 senior executives found 90% of firms reporting zero productivity impact over three years [1] — Scott Galloway "No AI productivity impact: A survey of 6,000 senior business executives found that 90% of firms report AI having no impact on productivity …" 04:25 . Even the executives who use AI average just 1.5 hours a week. The picture that emerges is of a technology that works beautifully in demos and lab conditions but struggles to move the needle at organizational scale. Galloway draws a distinction between AI technology, which he's bullish on, and AI stocks, which he believes are priced for a world that doesn't yet exist. He predicts CFOs will soon take the wheel from CEOs who've been using AI talk to wallpaper over poor management decisions, and that the era of experimentation will give way to a hard ROI reckoning [2] — Scott Galloway "We're leaving the AI experimentation era and entering the ROI era — and that transition is going to hurt AI stock valuations hard. Galloway…" 05:40 . The one silver lining: consultants who help companies decide where to spend on AI are about to have a very good few years.
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The second question comes from Reddit: a young entrepreneur who has just launched a sports marketing business with one client wants to know whether Cannes Lions — specifically the new Lions Sport program at €2,500 — is worth attending for networking and credibility-building. Galloway's answer is frank and affectionate. He contrasts his own current relationship with Cannes (speaking gigs, rosé at the Hôtel du Cap, arriving by Zodiac) with the calculus for someone at the start of their career. The €2,500 ticket fee is, he warns, just the beginning: accommodation, food, and the general expense of the South of France make the real cost far higher. More importantly, the opportunity cost — time away from building the actual business — isn't worth it at this stage. His advice is to keep heads down, pursue cheaper local networking in London, and investigate the Young Lions scholarship program as a possible subsidized path. The overarching message: stage-appropriate focus beats aspirational networking every time.
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The mid-episode break opens with Bilt, which has expanded in 2026 from a renter-rewards app to one that earns points on mortgage payments too, redeemable with travel partners including United, Hyatt, and Lyft. NetSuite follows with a pitch for its unified business management platform, now branded 'NetSuite Next' with AI baked in — trusted by over 43,000 customers and offering a free trial at netsuite.ai/proptg for businesses with seven-figure revenues. Leesa closes the break with a mattress pitch anchored in the New York Times Wirecutter 'Best Hybrid' and 'Best Memory Foam' awards, with a 30% discount plus $50 off for listeners using promo code PROFG at leesa.com. The break is notably long relative to the episode's 24-minute runtime.
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The final question unlocks the most revealing passage of the episode. Galloway traces his path to crew through a growth spurt that left him tall and skinny — cut from his high school baseball team, arriving at UCLA looking for a way to be a D1 athlete. He found crew: a sport that didn't require the skills he lacked, only the height he had. He was terrible at it. He ranked 30th out of 31, vomited in Ballona Creek at 5:30 AM in front of the entire boat, and hated almost every session — but he stuck with it. The payoff was double. Practically, it got him an automatic job offer at Morgan Stanley, where the head of fixed income told him oarsmen and oarswomen get an automatic hire because they're willing to kill themselves [1] — Scott Galloway "Galloway ranked 30th out of 31 on UCLA's crew team and vomited on every row. But at Morgan Stanley, the head of fixed income told him to go…" 17:40 . But the deeper gift was epistemological: crew taught Galloway that humans have almost no accurate sense of their own limits. At 800 meters into a race, legs numb and lungs on fire, you find a way to get to 2,000 meters every single time [2] — Scott Galloway "At 800 meters into a crew race, your legs go numb, air feels like fire in your throat, and you're deploying mental tricks just to stay cons…" 19:15 . His rule of thumb: when you think you cannot take any more, you're about 40% of your way to your actual limit. He applied that directly to his first year at Morgan Stanley — working 33-hour shifts every Tuesday-Wednesday as a deliberate differentiation strategy. The segment closes with a comparison to the Marines: glad you did it, past tense.
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Scott Galloway signs off with the usual reminder to email voice recordings to [email protected] or post on the Scott Galloway subreddit, and credits the production team: Jennifer Sanchez and Laura Jenner as producers, Cami Rieke as social producer, Brad Williams as editor, and Drew Burrows as technical director. The post-roll features Athletic Brewing Company — pitching its award-winning non-alcoholic beers (185+ flavor awards) as the ideal summer social companion — followed by Ryan Reynolds voicing a characteristically dry Mint Mobile ad that frames your big wireless bill as a beach thriller with a shocking twist, resolved by switching to Mint's $15/month unlimited plan at mintmobile.com/switch. Fine-print disclaimers close out the episode.
- ROI era
- Galloway's phrase for the phase of AI adoption where companies shift from experimenting with AI tools to demanding measurable returns on investment; follows the 'experimentation era.'
- Erg
- In crew rowing, an ergometer (erg) is a rowing machine used to measure athletes' fitness and performance, a key metric in competitive crew programs.
- Oarsman / oarswoman
- A competitive rower; used in the context of collegiate crew at UCLA and as the reason Morgan Stanley offered Galloway an automatic job interview.
- Bowman
- In crew rowing, the bowman sits at the front of the boat closest to the finish line, meaning their output and any mishaps are visible to the entire crew.
- Token pricing
- The per-unit cost of processing inputs and outputs through a large language model (LLM) API; Galloway suggests AI economics will improve as token costs fall.
- LLM
- Large Language Model — an AI system trained on vast text data to generate and understand language; examples include GPT-4 and Claude.
- Sora
- OpenAI's video-generation model, cited by Galloway as an example of creative AI that has underperformed expectations in design and visual contexts.
- Claude
- Anthropic's large language model; mentioned in the context of Microsoft canceling Claude code licenses six months after granting access.
- Adoption layer
- Galloway's term for the market segment focused on helping businesses integrate and operationalize AI tools, which he believes will expand as the ROI era begins.
- Cannes Lions
- Annual international festival of creativity and advertising held in Cannes, France; a major networking and content event for marketing and media professionals.
- Lions Sport
- A specific program within the Cannes Lions festival focused on sports marketing, costing €2,500 to attend.
- Young Lions
- A subsidized or scholarship program within Cannes Lions aimed at younger professionals, mentioned by Galloway as a potentially affordable alternative for the questioner.
- D1 athlete
- Division I athlete — the highest level of collegiate athletics in the United States, governed by the NCAA.
- Esophagus
- The muscular tube connecting the throat to the stomach; Galloway uses it vividly to describe the burning sensation of inhaling during a crew race.
- Perfunctory
- Carried out with minimal effort or care; used implicitly in the episode's critique of AI tool adoption as a checkbox exercise rather than meaningful transformation.
- Shitpost
- Internet slang for posting low-effort or deliberately provocative content online; Galloway uses it to suggest Microsoft's Claude cancellation may be a political move against Anthropic.
- Fixed income department
- A division of an investment bank that deals in debt securities such as bonds; the department head at Morgan Stanley is the one who offered Galloway an automatic hire.
- Drawdown
- In investing, a drawdown refers to the peak-to-trough decline in asset value; Galloway predicts a 'substantial drawdown' in AI stock valuations.
Chapter 3 · 02:07
Q1: Is AI Fatigue Real and Are AI Stocks Overvalued?
Pablo's question cuts to the heart of the most pressing tension in tech: companies are spending furiously on AI, but the productivity payoff is stubbornly elusive. Galloway opens with the macro: worldwide AI spending is forecast to hit $2.6 trillion in 2026, up 47% from 2025. But then the counterweight arrives — a 2024 MIT study found humans are cheaper than AI for 77% of vision-based tasks, and a survey of 6,000 senior executives found 90% of firms reporting zero productivity impact over three years [1] — Scott Galloway "No AI productivity impact: A survey of 6,000 senior business executives found that 90% of firms report AI having no impact on productivity …" 04:25 . Even the executives who use AI average just 1.5 hours a week. The picture that emerges is of a technology that works beautifully in demos and lab conditions but struggles to move the needle at organizational scale. Galloway draws a distinction between AI technology, which he's bullish on, and AI stocks, which he believes are priced for a world that doesn't yet exist. He predicts CFOs will soon take the wheel from CEOs who've been using AI talk to wallpaper over poor management decisions, and that the era of experimentation will give way to a hard ROI reckoning [2] — Scott Galloway "We're leaving the AI experimentation era and entering the ROI era — and that transition is going to hurt AI stock valuations hard. Galloway…" 05:40 . The one silver lining: consultants who help companies decide where to spend on AI are about to have a very good few years.
Claims made here
An NVIDIA VP of Applied Deep Learning claims that for his team, AI costs more than the employees themselves.
A 2024 MIT study found that for 77% of vision-based tasks, it is cheaper to employ humans than AI.
Microsoft canceled most of its direct Claude code licenses just 6 months after opening access.
A survey of 6,000 senior business executives found that 90% of firms report AI having no impact on productivity over the last 3 years.
69% of firms actively use AI, with higher usage rates at younger, more productive firms.
Two-thirds of executives regularly use AI, but their average usage is just 1.5 hours a week.
According to Apollo Chief Economist Torsten Slok, there are no signs of AI boosting profit margins for companies outside of the tech sector.
According to Morgan Stanley Research, AI adopters are seeing their cash flow margin expansion outpacing the global average by 2x.
AI tools increased coder productivity on individual files by 290%, but only uplifted a company's overall code product by 30%.
The number of designers at IBM and tech companies as a percentage of total employees has actually gone up despite AI adoption.
Worldwide AI spending is forecast to total $2.6 trillion in 2026, a 47% increase year over year.
Total AI spending in 2025 was $1.76 trillion, the baseline from which 2026 forecasts a 47% jump.
A 2024 MIT study found that for 77% of vision-based tasks, it is cheaper to employ humans than AI. NVIDIA's own VP of Applied Deep Learning admits that for his team, AI currently costs more than the employees it's supposed to replace. The economics just aren't there yet.
A 2024 MIT study found that for 77% of vision-based tasks, it is cheaper to employ humans than AI.
A survey of 6,000 senior executives found 90% of firms report zero AI productivity impact over three years. Meanwhile AI tools boost individual coder output by 290% on single files but only 30% at the company level — showing that lab results and real-world ROI are two very different things.
A survey of 6,000 senior business executives found that 90% of firms report AI having no impact on productivity over the last 3 years.
69% of firms actively use AI, with higher usage rates at younger, more productive firms, but adoption remains concentrated among small groups.
Two-thirds of executives regularly use AI, but their average usage is just 1.5 hours a week — a sign of shallow adoption.
According to Morgan Stanley Research, AI adopters are seeing cash flow margin expansion outpacing the global average by 2x.
AI tools increased coder productivity on individual files by 290%, but only uplifted overall company code product by 30%.
We're leaving the AI experimentation era and entering the ROI era — and that transition is going to hurt AI stock valuations hard. Galloway is bullish on AI technology but bearish on AI stocks, predicting a substantial drawdown as growth and earnings fail to meet the expectations baked into current prices.
The 'AI will destroy labor markets' narrative isn't forecasting — it's fundraising. Galloway says these predictions are investor relations material designed to command outrageous valuations, not genuine analysis. He doesn't expect the labor apocalypse; he expects an era of disappointment.
Galloway points to IBM and big tech as proof that AI hasn't cracked visual design: the number of designers as a percentage of total employees has actually gone up, not down. Human-centered, differentiated design is more in demand than ever, and Sora's struggles bear that out.
Creative AI like Sora gets the headlines; operational AI wins the ROI race. Galloway points to Flexport's supply chain work — teams manually tracking shipments and negotiating agreements — as exactly the kind of 'boring' problem where AI communication between systems can create massive, measurable value.
The era of the CEO talking up AI to boost the stock price is ending. Galloway says CFOs are about to implement serious guardrails and demand real justification for every dollar of AI spending. That shift will compress valuations across every layer of the AI stack — but expand the market for consultants who help companies spend wisely.
Chapter 4 · 11:00
Q2: Should a Young Entrepreneur Attend Cannes Lions?
The second question comes from Reddit: a young entrepreneur who has just launched a sports marketing business with one client wants to know whether Cannes Lions — specifically the new Lions Sport program at €2,500 — is worth attending for networking and credibility-building. Galloway's answer is frank and affectionate. He contrasts his own current relationship with Cannes (speaking gigs, rosé at the Hôtel du Cap, arriving by Zodiac) with the calculus for someone at the start of their career. The €2,500 ticket fee is, he warns, just the beginning: accommodation, food, and the general expense of the South of France make the real cost far higher. More importantly, the opportunity cost — time away from building the actual business — isn't worth it at this stage. His advice is to keep heads down, pursue cheaper local networking in London, and investigate the Young Lions scholarship program as a possible subsidized path. The overarching message: stage-appropriate focus beats aspirational networking every time.
If you can't afford Cannes Lions, the market has already made the decision for you. Galloway says the real cost isn't the €2,500 ticket — it's the time away from building. At 25 with one client, heads-down execution beats expensive networking every time.
Chapter 5 · 11:43
Mid-Episode Sponsor Break: Bilt, NetSuite & Leesa
The mid-episode break opens with Bilt, which has expanded in 2026 from a renter-rewards app to one that earns points on mortgage payments too, redeemable with travel partners including United, Hyatt, and Lyft. NetSuite follows with a pitch for its unified business management platform, now branded 'NetSuite Next' with AI baked in — trusted by over 43,000 customers and offering a free trial at netsuite.ai/proptg for businesses with seven-figure revenues. Leesa closes the break with a mattress pitch anchored in the New York Times Wirecutter 'Best Hybrid' and 'Best Memory Foam' awards, with a 30% discount plus $50 off for listeners using promo code PROFG at leesa.com. The break is notably long relative to the episode's 24-minute runtime.
Claims made here
Leesa mattresses have been awarded Best Hybrid and Best Memory Foam Mattress by New York Times Wirecutter.
The Lions Sport program at Cannes Lions costs €2,500, which Galloway says is just the starting point of total expenses.
NetSuite is trusted by over 43,000 customers worldwide.
Chapter 6 · 15:17
Q3: How Rowing Crew at UCLA Shaped Scott Galloway
The final question unlocks the most revealing passage of the episode. Galloway traces his path to crew through a growth spurt that left him tall and skinny — cut from his high school baseball team, arriving at UCLA looking for a way to be a D1 athlete. He found crew: a sport that didn't require the skills he lacked, only the height he had. He was terrible at it. He ranked 30th out of 31, vomited in Ballona Creek at 5:30 AM in front of the entire boat, and hated almost every session — but he stuck with it. The payoff was double. Practically, it got him an automatic job offer at Morgan Stanley, where the head of fixed income told him oarsmen and oarswomen get an automatic hire because they're willing to kill themselves [1] — Scott Galloway "Galloway ranked 30th out of 31 on UCLA's crew team and vomited on every row. But at Morgan Stanley, the head of fixed income told him to go…" 17:40 . But the deeper gift was epistemological: crew taught Galloway that humans have almost no accurate sense of their own limits. At 800 meters into a race, legs numb and lungs on fire, you find a way to get to 2,000 meters every single time [2] — Scott Galloway "At 800 meters into a crew race, your legs go numb, air feels like fire in your throat, and you're deploying mental tricks just to stay cons…" 19:15 . His rule of thumb: when you think you cannot take any more, you're about 40% of your way to your actual limit. He applied that directly to his first year at Morgan Stanley — working 33-hour shifts every Tuesday-Wednesday as a deliberate differentiation strategy. The segment closes with a comparison to the Marines: glad you did it, past tense.
Claims made here
UCLA's crew was a varsity sport at the time Galloway attended but is now a club sport.
Galloway arrived at UCLA as a six-foot-plus beanpole with bad skin, cut from his high school baseball team. He tried out for crew because he was tall and thought he was in shape. He spent four years ranked 30th out of 31, vomiting in Ballona Creek at 5:30 AM, hating every minute of it — and never once regretting it.
Galloway was the second-least talented person on a 31-person UCLA crew team, yet still parlayed the experience into a job at Morgan Stanley.
Galloway ranked 30th out of 31 on UCLA's crew team and vomited on every row. But at Morgan Stanley, the head of fixed income told him to go home — oarsmen get automatic hires because they're willing to kill themselves. Being bad at a brutal sport turned out to be a career superpower.
At 800 meters into a crew race, your legs go numb, air feels like fire in your throat, and you're deploying mental tricks just to stay conscious. Every time, you find a way to finish the 2,000 meters. Galloway turned that experience into a life rule: when you think you've hit your limit, you're only 40% of the way there.
Galloway says that when you think you've hit your limit, you're actually only about 40% of the way to your true physical or emotional limit — a lesson from rowing crew.
Galloway arrived at Morgan Stanley as a first-year analyst who'd spent UCLA getting high and learning Led Zeppelin lyrics. His competitive edge: every Tuesday he'd go in at 9 AM and work 33 hours straight through to 6 PM Wednesday. Crew had taught him that 3 AM exhaustion was only 800 meters into a 2,000-meter race.
No indexed bits in this chapter.
Show stoppers
Snapshots ()
Key Quotes ()
This episode
Cast
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International festival of creativity and advertising discussed as a networking opportunity for a young entrepreneur, with Galloway advising against attending if funds are tight.
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Apollo Chief Economist and 'friend of the pod' cited as finding no evidence of AI boosting profit margins outside the tech sector.
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Track
Both a source of AI research data (cash flow margin finding) and the firm where Galloway's first job was secured because of his crew experience at UCLA.
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Where Galloway attended university, rowed crew, and by his own account learned very little academically while gaining vital life lessons through sport.
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Maker of the Claude LLM; mentioned in context of Microsoft canceling Claude licenses, with Galloway speculating there may be political motivations.
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Track
Chief Economist Torsten Slok cited as finding no signs of AI boosting profit margins for companies outside the tech sector.
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Cited as an example of a company whose supply chain operations — tracking shipments, negotiating agreements — are prime candidates for AI automation.
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Track
Mentioned as an example where the number of designers as a share of total employees has grown despite AI, showing AI has not replaced human creative roles.
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Track
Cited for canceling most direct Claude code licenses just six months after opening access, used as evidence of AI ROI disappointment.
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Cited as source of a 2024 study finding that human labor is cheaper than AI for 77% of vision-based tasks.
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Track
Cited via an NVIDIA VP of Applied Deep Learning who claims AI costs more than employees for his team, illustrating the poor current economics of AI.
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Mentioned as a potential beneficiary of Microsoft's political preference for its own or OpenAI's LLMs over Anthropic's Claude.
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OpenAI's video generation model cited by Galloway as an example of creative AI that has underperformed in visual and design contexts.
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Galloway's stated favorite hotel in the world, where he stays when attending Cannes Lions and begins drinking rosé by early afternoon.
Stats
This episode
Claims & Sources
Factual claims made this episode, and whether a source was named.
Worldwide spending on AI is forecast to total $2.6 trillion in 2026, a 47% increase year over year.
An NVIDIA VP of Applied Deep Learning claims that for his team, AI costs more than the employees themselves.
A 2024 MIT study found that for 77% of vision-based tasks, it is cheaper to employ humans than AI.
Microsoft canceled most of its direct Claude code licenses just 6 months after opening access.
A survey of 6,000 senior business executives found that 90% of firms report AI having no impact on productivity over the last 3 years.
69% of firms actively use AI, with higher usage rates at younger, more productive firms.
Two-thirds of executives regularly use AI, but their average usage is just 1.5 hours a week.
According to Apollo Chief Economist Torsten Slok, there are no signs of AI boosting profit margins for companies outside of the tech sector.
According to Morgan Stanley Research, AI adopters are seeing their cash flow margin expansion outpacing the global average by 2x.
AI tools increased coder productivity on individual files by 290%, but only uplifted a company's overall code product by 30%.
The number of designers at IBM and tech companies as a percentage of total employees has actually gone up despite AI adoption.
UCLA's crew was a varsity sport at the time Galloway attended but is now a club sport.
Leesa mattresses have been awarded Best Hybrid and Best Memory Foam Mattress by New York Times Wirecutter.
Athletic Brewing Company's non-alcoholic beers have won over 185 flavor awards.
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