All in pod 128 140

all right everybody Welcome to the all in podcast lots to talk about but right off the bat congratulations to David Friedberg who is the chairperson of the all in Summit 2023 on the big announcement we're going to be having the all in Summit September 10th 12th at Royce Hall at UCLA in Los Angeles California tickets are now on sale and selling out quick Friedberg maybe just give people a little overview of why you selected the location and what you hope to accomplish in terms of the programming just broad strokes and then we'll get right into the show I think the general headline is today and tomorrow where are we where we headed I think exploring the state of the world and interesting things that were uniquely or that we're all kind of excited about in the future and we want to have great conversations with candid people that can give us kind of you know they're very honest on the ground points of view on everything from technology and markets macro science society and culture so we're going to talk across all those different topic areas and similar to what we did last year the four of us on stage having conversations with these folks so pretty excited I think La is a great location there's obviously an availability for people to stay there's great venues for us to do the evening events and it's certainly super accessible for folks from all over the world and we decided this year to have three tiers of tickets we'll have the VIP tickets we'll have scholarships for people who fill out a form so we can you know have really great diversity and representation at the event and up and comers maybe who couldn't afford the VIP ticket but in between you decided to have a standard ticket as well that's just 1500 bucks and there'll be a VIP lounge this year for the VIP tickets and an early access to the theater and a couple of special dinner parties what is my wine budget so that I can take care of the VIPs properly yeah talk about that one later you guys what is my wine budget let me treat the VIPs like the VIPs that they are what would you need per night per dinner per person depends on how many people per person or just say per person per night is it like 200 a person a hundred dollars per person per night because a person drinks a half a bottle of wine two or three glasses yeah like you know three to 500. maybe a thousand what is the Truffle budget for the conference no it's too early for truffles we can only have it watch season now it's by September yuck it's between white and black truffle season it's a dead zone you don't want to be in that you got to either wait till the winter or you got to enjoy the early summer we have to have a conference in early November at that point we can focus the entire VIP budget if we're recording to me would be spent on white truffles and white birds [Music] out [Music] queen of King all right everybody let's get started Jamaica is with us as well the dictator himself and David sacks the rain man yeah Google had their i o event they announced Palm 2 Google's language model is going to power 25 products including Bard which is got coding capabilities now I guess to go up against github's co-pilot pump2 will have improved multilinguality wait what across a hundred languages multi what it's going to support a hundred languages and it's going to be better at mathematics and reasoning they also announced duet AI which is basically Google Suite of generative AI tools or dock sheets drive all that kind of stuff kind of like a copy of Microsoft's copilot tools that sax has talked about a whole bunch the guide on the side if you will they teased a future where AI can summarize stocks which box AI Aaron Levy is doing they also previewed proactive prompts in the sidebar of Google Docs and I talked about that a whole bunch on The Swinging startups they're going to also now add images and replies have you guys used Bart in the last 24 hours I used it last week not in the last 24 hours I think you guys should use it we should talk about it it's really impressive it's better than chat GPT at this point from my experience on talk going through a number of things because it's actually connected live to the Internet it's connected live to search it can pull down real-time data for you it can do real internet searches for you and just give you the results it's extremely powerful I feel like it's the product that Google has been scared to do which is the product that can truly disrupt search and they're doing it so I how do I try it do I just go to google.com no access needed no cost nothing oh my God this is great and seriously use it and it does real-time search and it's 180 languages it converts it generates images for you it can generate charts results it's really powerful guys Google has thrown together I think a lot of features and you can look Google's market caps up 150 billion dollars in the last two days okay this is pretty interesting and so sax a lot of comparing some results right yeah a lot of what we've been talking about with respect to plugins and the tooling built into Auto GPT many of the most interesting kind of applications that folks have kind of demonstrated or utilized are are really kind of built into this Bard product okay I love Bard can I just give you guys what I just tried okay can we guess yes yeah guess guess was it something about freeburg's anus Uranus no it wasn't a Uranus joke okay then tell us my first question was why is David Friedberg such a sellout but the answer confused him with an actor so let's forget that my second question was is Jason calcanus a virtue signaler and the answer is fantastic Jason calcanus is a venture capitalist and entrepreneur who has been accused of virtue signaling virtue signaling is the act of publicly expressing opinions or sentiments intended to demonstrate one's good character or the moral correctness of one's position on a particular issue there are a number of reasons why people might accuse Jason calcanus of virtue signal okay for example he is going to make public statements about his support for social justice causes but he has also been criticized for his lack of concrete action on these issues additionally he has been accused of using his platform to promote himself and his businesses rather than to genuinely advocate for social change that's ultimately whether or not Jason got Candace is a virtue signaler is a matter of opinion there's no clear consensus on this issue and there is evidence to support both sides of the argument however it is important to note that virtue signaling can be a harmful practice as it can lead to people becoming desensitized to real social problems and make it more difficult to address them effectively this is some woke where do you see what I just did here's mine a horrible human is a complex individual with both positive and negative qualities he is a successful venture capitalist and entrepreneur but he has also been criticized for his outspoken views and his past actions some of polyhoppatitis Polish qualities include his intelligence his ambition his drive to succeed blah blah blah blah blah he's also been criticized for his arrogance he had his willingness to exploit people for his own game this is perfect it's the same party it's balanced it's true it is giving you like the good and the bad oh my God that's hilarious this is a very fair answer I love it I asked it where is he this is gonna really show you the power of this where is the all in Summit 2023 being held and how much are tickets so like two questions that are deep on the website and it says there are two all assignments yeah that's an advertising Association that's incredible and then it says the all in Summit 2203 will be held September 10th at 11 23 at Royce Hall tickets are 1500 for general admission 7 500 for VIP that's insane that's insane wait so Freeburg what are the key differences between Barden and chat GPT just because you've used it on the modeling side they're claiming a much larger more robust model it's linked to the to the Internet so it's linked to live search which you can't do with chat gbt which is based on a static training data set so Bard can actually engage with Dynamic content and a dynamic content generated across the web and then it's integrated with a number of Google services that basically can take certain live feeds of data like flights and stock prices and so on it's free you don't need to be charged for for over usage you don't need to sign up and get access it's it's just available to anyone I mean I think this is the game changer everyone is hoping for free I just I just asked did Stan druckenmiller buy Nvidia recently so it wasn't able to find the transcript of this thing but it did find the 13f and it says yes according to his 13. fourth quarter of 22 Stan purchasing 582 915 shares of Nvidia yeah isn't that incredible I just said what was Google's restructuring expense incurred in q1 2023 and it says according to Google's 2023 q1 earnings report the company incurred restructuring expense of 1.6 billion including the decision to lay off 12 000 employees they were part of a broader restructuring I mean that was a it was it basically parsed through the press release Parts through the q1 data it's really pretty impressive huh I mean what do you guys check this out yeah David sacks what does David sacks think about Hunter Biden everybody on the oil and pod knows but let's see what Bard knows he's not publicly commented on Hunter Biden however he has been critical of the Biden family business dealings in Ukraine in the 2019 interview sack said that he was deeply troubled by the Biden's vomiting Ukraine 2019 but he believed it was a conflict of interest for Hunter Biden to serve on the board of Purisima that's pretty interesting I don't know that's clearly inaccurate I mean I wasn't talking about it yeah in 2019 think about that that's oh yes we're doing this pod yeah so the question is where is he getting these quotes and then why doesn't it give citations well also wait sax has been critical the Trump administration's use of Honor blinds business dealings as a political weapon yeah that's not true you've never criticized the Trump Administration those quotes are wrong those quotes I just said to it can you access and think about this this data set and this is where Google has unique advantages I said can you access the YouTube transcript data and it says yes bar to integrates YouTube transcript data I said do you have access to transcript data from the all in podcast Channel it says yes I do have access to the transcript data from the all in podcast Channel I said can you access this data answer some questions and now what did Saks say about Hunter Biden in that show hmm and so I would guess so think about this answer so far I'm finding this to be very inaccurate yeah so David Sachs appeared he said he believes Hunter Biden is a deeply troubled individual who's made a lot of bad decisions he also said that he believes Hunter Biden's business dealings in Ukraine were highly unethical and that he believes it's impossible that you'll this is transcript data from the pod however Sachs also said that he does not believe that Hunter Biden's business dealings are a quote Smoking Gun that proves that Joe Biden engaged in any wrongdoing he said that he believes that the evidence against Joe Biden or quote circumstantial is quote circumstantial and that he does not believe that there is enough evidence to impeach him sacks his comments about Hunter Biden were met with mixed reactions some people agree and on and on and on I think it's very inaccurate to be honest some of my stuff mixed in it's got some of your stuff mixed in but also it's like it's summarizing in a way that neither of us actually said it yeah and they're missing the key points about what I did say I I asked a pretty complicated question here and I think it did a pretty decent job I said I would like to fly Le premiere on Air France from the west coast to Europe where should I depart hmm and it got it perfectly LAX SFO and Seattle Tacoma oh yeah I just asked it to get me the fastest route to Portofino and it gave me the exact flight I should take from SFO how much the ticket is and then the train I should take from the shortest meaning the shortest time yeah because I don't want to do a layover in Germany it's like fly to Milan take the train and it gave me the full schedule which by the way Google flights can't do because you go to Google Flights and all it does is give you the flight data it can integrate a lot of different data sets to give you these answers did you say fastest route or fastest flight what did you fastest route yeah so I don't want to spend the least amount of time traveling is what my objective was this is why I was saying I think you guys should play with this tool a bit it is I think Head and Shoulders above Chachi BT the models supposedly better obviously other people will come out with with kind of you know measures of that and estimates of whether that's true the extensibility the integration with live data and the integration with Google's very unique data set is what's so powerful that they have access to flight data that they have integrated YouTube transcript data it's just super powerful super impressive ah damn yeah I'm using this in real time and I do find the interface to be snappier than chat GPT and it like you said it doesn't need the browsing plugin in order to scrape more recent data from the internet that it wasn't trained on but I'm not finding the answers to be more accurate and I'm not finding them to be more detailed it's not the same reason to use this over chat GPT I prefer chat GPT so far I'm just telling you okay well the reason of stuff is important well I mean clearly chat GPT is gonna have to make the browsing browsing plug-in much snappier and like much more part of the core functionality rather than something that's like an add-on yeah it can't be an add-on it's got to be able to incorporate the most recent information I did ask some questions about the Ukraine war and then it gave me like a highly compressed View and I said please provide more detail and then it's actually did a pretty good job expanding it and it did it very quickly well if you look at the view drafts thing that's always been one of its strengths is that it will format it three different ways for you by default if you go to the top right so you can just sort of cycle through them but that that's an existing feature I mean I definitely want to keep playing with this play with it it's one of the obviously important releases that I thought they were going to catch up real quick and this seems like we got a race on our hands now but I think the point you're making Freeburg is a good one which is when these big companies just get their act together it's very hard to discern whether something is 80 percent is good or 120 percent better there's this fuzzy gray area where a lot of people can find utility in a lot of different products and then the one with the better distribution wins and so if they take Bard and they have the confidence now to just integrate it into Gmail or integrated into these other points where they already have hundreds of millions of users that's like a really tough distribution barrier to overcome that's the next step that I think if Google really wants to win here they have to force distribution of these tools in line to where people are and if they do that you're not going to know the difference between 80 and 100 somewhat as sophisticated as sax may be able to but the average person will just be like this is good enough they've got distribution I mean like with all products the uh the kind of key Advantage is distribution that's the platform Advantage can I show you an answer I think it's like super hallucinating on so I asked it what is David sacks written about SAS and then it says I'm a venture capitalist entrepreneur is written extensively about SAS he's the founder of Yammer okay that's true but then it says he's also the co-founder of wework not true didn't know that then it says sex congrats says sax has written a number of articles about SAS including and then all five of those articles were not written by me hmm it's basically like hallucinating like really strongly wow so there's significant hallucination here oh you know what Bard is at the after party for Google I O right now and it's had too much to drink so it's just straight up drunk this is why Google didn't want to release this right Freeburg like they don't want the Google brand associated with these hallucinations whereas that's right nobody cares about open ABS brand this was a big part of The innovator's Dilemma that Google faced which was number one it could be disruptive to the Core Business number two it exposes them to regulatory scrutiny and number three is if they make mistakes they're going to get more scrutinized and some you know rinky-dinky startup where everyone's so forgiving but it's great to see look I mean as a shareholder it's great to see them take this risk it's great to see them put this out there they've now released robust coding capabilities they've integrated scientific research papers obviously they're going to continue to improve model performance improve integration with these data feeds and they have a very large head count I think north of 10 000 people working um 10 000 smart people so if you can organize those people and they've got this significantly Advanced infrastructure they have a real shot at being a platform player here the question later is going to be how much is this going to disrupt course search Revenue you know what categories of search Revenue are going to get disrupted and you know are they going to make that up in other ways and I think time will tell there but I think this is the progress that shareholders and investors were looking to see with respect to the product competition in Ai and certainly some shareholders still want to see continued improvements on the cost structure of the business but that's a separate topic but this was exactly I think it really hit the bullseye on what people were looking for I don't see how it's a bullseye look at this so I just I just asked it can you give me a complete list of all the articles on Sasa saxator in the last three years so now at least it's over the target those five articles it mentions are correct does chat GPT do that well no because of the browsing plug-in right but I'm just saying like they got a lot of work to do here on quality yeah they all do but it is Snappy and I finally got to these five articles being correct AI regulation we talked about it five weeks ago on the show I think well there's been some movement there vice president Harris met with CEOs of alphabet Microsoft open AI so that's Sundar Satya and Sam discuss implementing Ai safeguards and then on Tuesday Sam Altman was interviewed by Patrick Carlson uh the CEO of stripe and he endorsed the idea of iaea for AI That's the international atomic energy agency so is that um hyperbolic delusions a Grandeur or right on target well the interesting thing about the iaea is that what I learned recently from the CEO of Planet Labs will Marshall is that the predecessor organization to the iaea is really this organization called pugwash and what that was Einstein and Bertrand Russell in the 50s post Hiroshima and Nagasaki bringing together academics to basically create a way to think about nuclear disarmament going forward just because they all saw the damage and there was a large framework that set up the current denuclearization treaties and then the iaea was set up after that and so I think that there's a thread here which is basically what he's saying is there's something around nuclear disarmament that is very similar to AI both in terms of its potential but obviously in terms of its risks and so there's like a whole monitoring framework there's a know your customer kind of framework these are not unfettered things that can just live openly in the wild so I think it's interesting to acknowledge that Sam who's deep in the bowels of one of the most important companies sees both its potential but it's danger enough to say that this is how we should think about it like nuclear weapons I think is a very important thing to acknowledge and the White House pledged to release draft guidelines for AI safeguards that the National Science Foundation plans to spend a 140 million on at AI focused research centers FTC chair Lena Khan wrote a guest essay in the New York Times calling for AI regulation due to Largo risks including Monopoly consolidation fraud extortion and bias any thoughts there sacks about adding regulation to the mix right now are we jumping the gun here and gonna smother this thing before it even gets correct answers serious risk and the White House also announced that Kamala Harris would be the AI Czar for this issue which I don't think inspires anyone with confidence that they're gonna you know get this right look my concern here is I think we should have conversations about the risks of AI we should be thinking about that I think people in the industry need to be thinking about what guardrails can be put on it I think elon's raised I think long-term concerns about whether this could lead to AGI you basically create a super intelligence that you can't control I think people in the industry haven't really figured out how to address that that problem is called alignment and everyone's trying to figure out how do you even make alignment work is that theoretically possible so there are real invalid concerns Jake how you've raised the issue of deep fakes I think provenance of data is going to be a real issue people committing fraud or you know other kinds of criminal acts using it so there are real concerns but the problem is that we have no idea how to regulate this yet and yeah and the fact that Kamala Harris as the AIS are now again just points the fact that nobody has a good idea of what's supposed to be or who the expert's supposed to be and this idea of creating an atomic energy Commission look I I can see why Sam and other industry leaders might want that because they're gonna quickly develop relationships the the biggest AI companies which now includes open AI which has the backing in Microsoft and Google and the biggest of the big tech companies they have all the lobbyists in Washington they have all the political connections they're the ones who are huge donors and they have political relationships and they're going to help construct the regulations and it's going to turn into another example of Industry capture just like North K Jr told us about on the show last week when he talked about how the big weapons companies influence our foreign policy the way that the big Pharma companies influence the FDA and so on we're going to end up in a situation which the big tech companies have in order to influence over this new regulatory agency and since it's not clear what the regulatory agency is even supposed to be doing yet they're going to end up promulgating a bunch of regulations that create a barrier to entry for the little guy they're going to create a mode with regulation yeah for the big guys and they'll slow down the whole process of innovation in the space which some people might like but I think is really the best hope that America has to get out of it horrible fiscal situation all this debt we need a massive productivity boost to get out of the massive debt bubble that we're in so what I'd hate to see is that yeah we we basically kill this this thing in the Cradle interesting yes we are in a deep pit here and Stanley druckenmiller gave a speech at USC at the 37th annual meeting of the USC Marshall Center for investment studies and he expressed concern about the financial crisis that occur could occur in the 2025 to 2035 period due to the Baby Boomers turning 65 and the impact on entitlements he predicted that in 25 years spending on seniors will grow to 60 percent of all taxes here's a look at the chart you can see today there as the the vertical line about five percent of our GDP goes to Social Security uh today and about another 5.5 goes to Medicare Medicaid and it's predicting here that those combined will go from what looks like 12 today up to 24 of GDP your reaction Freeburg I mean my reaction is it is another very important voice stating the obvious like the arithmetic just doesn't work when we had RFK on last week I prodded him on his stance and point of view on the federal deficit the fiscal deficit this government runs and the entitlement programs that are only going to swell and the debt burden which has an interest payment obligation on it that the interest payments are swelling and when you do the arithmetic on all this it's going to balloon the cost to service the debt and without some degree of cutting across the board spending and entitlement programs discretionary spending and entitlement programs you can't make the interest payments which all you know inevitably leads to some form of default so that's just the math and the way this all works out and I think what he's done is put a pen to paper and shown that you know call it roughly 2025 to 2035 you start to run into that fiscal scenario where you know you can no longer generate enough income from the US economy to fund both the interest payment obligations on the federal debt as well as these entitlement programs and something's got to give either you're going to have to default on the debt or you're going to have to cut the entitlement programs and the point he's making is that the longer you wait to cut the entitlement programs the worse it's going to get because you're accruing so much debt in the interim and as we know that becomes very politically unpopular and what's so scary to me and I've kind of shared this and you know obviously chamoth has a different point of view but it feels to me like this is that don't look up movie moment where we have this like you know looming disaster we don't have any fuel in the car and all that everyone's talking about is where are we going to drive the car and every political conversation every candidate gets on stage gets on a podcast gets on a TV show and they talk about stuff that is simply not feasible and the direction setting with respect to social policy Wars geopolitics you know how are we going to take care of our middle class none of that stuff is possible to actually execute against without recognizing and acknowledging that we don't have gas in the car and we have to figure out how to gas up the car and so it's great to see drucken Miller being vocal putting very simple clear slides together it's like what I've mentioned in the past I would love to see a clinton-esque bill clinton-esque slide deck where he would come up with a poster and show everyone here's the economy folks and I think drucken Miller did a great job and I encourage everyone to go watch that um there's an audio transcript of the talk as well as the slides are publicly available on the internet we'll put the links in the the show notes here today I just think it's it's whether or not you agree with the Outlook I think it's worth everyone watching and realizing how serious of an issue this is and why this has to become the number one topic of conversation going into this next presidential election cycle he's also disclosed he's short the dollar long gold Euro oil and AUD which I guess is the Australian dollar and he's also long Nvidia and Microsoft believes in videos got a monopoly on the chip Market I got a question for tremath and then to sax so Jamal what's your just reaction to this do you think he's doctor dooming it and we can have all this debt and then the question then becomes is there any way out of this uh we had a trump Town Hall I hate to bring it up and go back into you know the sort of trump commentary and all this but he's he's the lead candidate sax and he said he thinks we can get out of debt we just got to drill a bunch of oil drill belt baby drill and we'll get out of this uh problem we'll be able to rebalance the budget so trim off and then sex I want to be clear I don't think it's great that we have these enormous debts and entitlement obligations but I also don't think that there's some magical number where the economy breaks and the reason is because we're Central to not just our economy but everybody else's economy We Are The Reserve currency of the world that's not changing anytime soon it's not even close and we are for better or worse and I think Sox and I don't like it but we are the world's policemen we are a bunch of things we are the world center of innovation we are the world's Center of these great leaps forward in humanity when we talk about all of these different things these aren't coming from random countries they're coming from the United States we can debate which company but we're never debating the country so I think that there's a legacy of value creation and Innovation that we've always been at the Forefront of at least since America was founded so 1776 to now I think the reality is that debt to GDP will continue to increase I don't think a single politician can practically get elected by offering to cut entitlement spending to people that have spent their entire lives paying into a system so as a practical matter this thing will go up and I don't think the economy will stop I think that economics are a relative problem where you have to weigh countries against each other and what that means is the economic vibrancy the productivity the intellect all of those things where we have to compete with El Salvador we have to compete with Nigeria we have to compete with India we have to compete and in that context there is very little historical artifact that says that there's a Breaking Point so I just think that if You observe the moment it's not that what freebrook is saying is bad I'm not exactly sure that it's particularly actionable and I think the disproportionate amount of action is actually the opposite which is to reinflate the money supply to reinflate assets to create artificial prosperity and smear it to many many many people and I think that the you have to think about how do you want to activate your view I can believe whatever I want but at the end of the day I don't want to act in a way that's against my economic best interest quite honestly so I believe that winning is measured in dollars and cents on these things and from uh from that perspective I don't particularly like it I think I'm emotionally more aligned to Freeburg but the Practical reality is I'm on the opposite side which says the governments will keep spending inflation will be here assets will keep inflating the M2 money supply will keep going up and on General um along the United States and short every other country to Mark doesn't that ultimately lead to just inflation it initially starts at the inflation of assets and asset prices but It ultimately leads to the inflation of goods and services which can the economy because then you know the middle class can't afford things and you have economic slowdown I mean that's the historical record of having these kind of inflationary moments yeah I mean inflation comes and goes but the position of the American US dollar hasn't changed again you have to remember like a lot of these foreign governments 187 or whatever the number is countries outside the United States rely on the US dollar they don't want to own their own currency right and so yeah you're right dollars do get inflated but that increased purchasing power also actually drives the balance of power back to the United States because all of these other folks all of a sudden find the ability to import a little bit cheaper their economies get slightly better but the US dollar actually still does well so there's a complex set of interactions that are all relative so I think it's very hard to point to the U.S middle class and say oh this is why the U.S breaks I just don't see very many good examples in a modern globalist era and there are examples and I think Ray dalio has pointed these out when you look all the way in the back but to use the UK right in the 15 and 1600s of the East India Trading Company when we did not have a global economy or a global Reserve currency I don't think it's very useful there's things you can learn you know taxation I think we can learn about why taxation does kill Innovation you said that before I agree with that but I don't think there's much value in saying because it happened in these moments it's going to happen exactly the same way here and I think what people don't understand is we are in a unitary singular mono economy that is anchored by the US dollar Saxony thoughts sex do you agree I tend to be on the freeberg drunken Miller side of this thing drunk Miller had a great quote in this interview he just gave I don't know freeware did you mention this last week that he said that that he compared the the debt ceiling and fiscal spending to worrying about whether a 30-foot wave will damage the pier when you know there's a 200 foot tsunami just 10 miles out yeah I saw that question so what he's saying is like our short-term situation is bad the long-term situation which isn't even that long term like 10 years out is even worse and I think there's a growing feeling that our political system is just not up to the challenge of dealing with these problems it just seems fundamentally unserious we never discuss it the media doesn't really present us with accurate information and it has an agenda do you guys want to make a bet sax you want to make a friendly wager with me sure what's that okay I will bet you that debt to GDP gets to 200 before it gets to 50. and I'll bet you however amount of money you want and we can we can do it for our own personal gain or for charity that may well be true but but the question is how how bad is 200 that's GP I don't think that's a really bad scenario I mean I really don't think it matters I think the point is if that happens yeah yeah we'll have a lot of money you'll just have to profit from it if you think it's happening your job is to profit from it I'll make the same bet with you free Brook I think it gets to 200 before it gets to 50. or 250 or 300 you can pick your number I think it will too I'm I'm just like let's do the math on that real quick so the the size of GDP is what about 25 trillion and and we're at about 32 trillion in debt if we're to have 200 debt to GDP right now would be at 50 trillion of debt now let's assume that's impute an interest rate at which you would need to to finance that four percent so I think four percent you have to calculate the duration I understand but this is Baseline so let's say four percent so four percent on 50 trillion is 2 trillion a year yep which is isn't that like half the budget yeah more and that's why that's my point that's why you have to see taxes go up to over 70 because it's the only way you can you got to tax everything in order to fund that so US government has collected two trillion in fiscal year 2023. now we I guess we haven't done a complete year but let's do 2022. it basically collected 3.7 trillion right you're using more than half of the government's income based on the current tax rates to fund the interest payments on your debt that's not even to pay for social services that's not even to pay for the defense that's not even to pay for government services that's just more than half of the income I guess maybe we're just speaking past each other I guess you guys are expressing anxiety and concern and I'm just expressing here's how one would make money because it's pretty obvious what's going to happen we're going to 200. we're not going to 50. so I just kind of compart how do you make money I think there's a lot of ways that you could make money I'm not going to share those on the Pod anymore but what's the trade there Stan Rucker Miller said it's the opposite of Stan's trades actually so oh okay that's good that would be an easy way to actually would you go long the dollar in short gold no because those are like Antiquated ways of making money where you have to have these convoluted derivatives agreements with these Banks and I've done these before where you're levered up to billions of dollars of risk it proves nothing and I don't sleep well at night I think that there are simpler strategies that you can implement but I think Stan is basically betting that the U.S will break and that we will be forced in some way to bring debt to GDP closer to 50 than to 150 or 200. and I would just bet the opposite and it's not because I want it to happen or that he's not intellectually or morally right also inflation down again we've kind of gotten used to this but this I thought this is a particularly interesting chart if you look at Food goods and energy all going in the right direction Services still very expensive any thoughts on the fed and inflation as we wrap up on sort of where we're at here is another 25 basis points or inflation is very sticky yeah right yeah I mean with CPI is down to 4.9 percent but but core actually was up goes up it's it was up 5.3 something like that yeah so yeah the FED is it raised another 25 basis points what are we up to like 5.25 percent I was ready to stop you know two hikes ago because I thought that the economy was breaking and the banking system was breaking they're up to now to five and a quarter you've got core CPI still sticky yes CPI is coming down but it looks like you know inflation's still a problem this is not a great set up for economic recovery and if you believe here's the problem with accepting the idea that inflation is going to be persistently high is if inflation remains persistently High then the FED won't be able to lower interest rates so they'll need to keep them elevated they might even need to keep raising them and if that happens they'll continue to be incredible stress on the banking system and more banks are going to break and then eventually that will create the conditions for the financial crisis I think the thing you guys have to be open to is the fact that we've never really tested the ability for the US to borrow durationally Beyond 30 years and again we talked about what an error it was in judgment for the treasury not to issue 100-year bonds but I think if there's any country in the world that can issue 100 Year bonds it's the United States of America and I do think that they'll be able to get durational assets that are that far out on the yield curve so I again am less concerned about the debt wall here because I think you'll be able to push maturities out you'll be able to refi a bunch of short-term obligations into the future and if you look at where the yield curve is 10 years at three and a half 340 something so the thought is that inflation goes down if you put it out to 100 years I would be very surprised if 100 Year rates if they price the bond weren't some were sub one percent so I do think it becomes effectively free money for the United States and I think it's just a practical thing they need to explore by the way corporates have explored these 50-year bonds and greater so I think it's just like it's a matter of mathematics as you guys have just Illustrated here that the US has to push out past 30 years so we'll have 50-year U.S bonds we'll have 100 year U.S bonds again I'm not here to claim whether it's right or wrong but I think the the simple way to acknowledge that is just that we are going to to reinflate the money supply over the long term because it's the only sustainable way that politicians can get elected and re-elected and I think the best thing to do there is to own risk assets let's move on to the presidential election real quick I'm curious gentlemen last week we had RFK on did you get any feedback uh the the show obviously did really well a lot of people watched it I got a tremendous amount of feedback people thought he was a fascinating interesting character some people thought he was a conspiracy theorist they pointed out a bunch of different moments during the interview but what was the General feedback you got my biggest thing was I think he surprised a lot of people to the upside a lot of people emailed me saying they thought one specific thing with him and we tried to address it which is he's painted as this kind of like conspiracy theorist or anti-vaxx person by the mainstream media and overwhelmingly so much of the feedback was wow this guy is so totally different because you gave him a long long format in order for him to really talk I thought he was really engaging and very interesting and very smart sax did you have feedback on it yeah I mean I think he is very authentic I think he's very principled I think that he's a rebel in a way I mean to grow up in the Kennedy family and to be part of all of those Elite circles whether it's in Hollywood or Harvard or where do they go for the summer Martha's Vineyard Martha's Vineyard or Hannah bunkport yeah whatever I mean you think about like all of the elite circles that he grew up in right and for him to deviate from democratic party Orthodoxy and Elite thinking and all these really significant ways shows that he is again very principled very authentic and I think a rebel in a really good way and he's telling people a lot of things that you just don't hear on the Democratic side and through the mainstream media so I think it's all positive yeah I got positive feedback on a freeberg the one thing people said was we they some people said not a lot but they expected us to push back maybe on him harder or something or be harder I thought we did an interesting job of letting him talk and really taking these topics to 10 or 20 minutes each the one people were particularly I don't know concerned is the right word or puzzled by was that we didn't push back as much on the vaccine stuff we just let them talk about it a week later what do you think about his vaccine position and would you have pushback more or do you do you regret not pushing back more fredberg as our Science Guy he made a lot of generalized statements or statements that I think take a concern about one thing and then make them evidence for a whole thing being off for example there is a vaccine that is an efficacious there was a vaccine that had mercury in it therefore all vaccines are bad oh we over vaccinate now many vaccines today that kids take going into schools have saved countless lives and they've had a really critical role in reducing a lot of child-borne illness it's been you know just an incredible advance for Humanity for medicine Etc I think he had a number of points he made about the covid vaccine and I know he's made these points for many years he kind of extrapolates that you know it's evidence that vaccines are generally over prescribed and overused and Pharma companies are just out to make money and the government is aligned with Pharma companies to just try and make money I don't think that that is necessarily true I think that there are certainly incentives that can drive bad behavior but I do not think that looking at the evidence both Contra evidence and evidence of safety and benefit that childhood vaccines should be kind of changed in terms of how we're doing things today there may be some things to change but generally I think that they're very beneficial so I don't love kind of how he frames these things and I think that it instead of having kind of a more nuanced conversation about this particular thing and this particular example he blankets things and people get scared and they're like oh my gosh you're right we should stop doing vaccines for kids that's very dangerous that would be very bad for society be very bad for our kids and I think that we need to kind of address that in more detail over time it's one of these hard things where you have to have kind of a nuanced conversation to give people all the necessary depth and context to feel better informed to make a better decision because you know there's always this kind of gripping fear that if something's off and I'm getting you know poison or I'm getting bad medicine or you know people are trying to make money off me people immediately react negatively and angrily and they want to kind of resolve to a blanket position I don't think that that's healthy so I'd love to have a deeper debate on that but the reason we didn't go into it is because we didn't we had limited time with him and we wanted to take our time kind of giving him a chance to talk about the overview of topics and getting his point of view across the the set of topics that we generally thought were going to be relevant in this election cycle so that's and that was with two hours we still didn't have enough time you could talk for two hours about vaccine could I address the conspiracy theorist Point yeah sure so first of all that that label conspiracy theorist doesn't pack the punch that it used to as you'll recall anyone who thought the virus might have come from the Wuhan lab was once called a conspiracy theorist if you believed that fauci and the NIH were funding gain of function research that was dubbed a conspiracy theory if you believe that cloth Mass didn't do anything that was a conspiracy theory if you believe that Hunter Biden was getting paid off by Foreign governments that was a conspiracy theory so this accusation just doesn't really pack the same punch anymore not having a relationship with the Russians in this family meeting with the Russians multiple times yeah that's still a conspiracy theory um but in any events my point is it doesn't pack the same punch in fact in some cases it's starting to become a badge of honor so that's one thing the second thing is when you listen to him make his arguments he's not just alleging certain things he's laying out his evidence right he's he's connecting dots he's explaining the causation and you can disagree with it but he is thinking in terms of like causation and it made me think about something that Peter Thiel once said about you know Founders being Asperger's where he flipped it on his head and said what is it about our society that talks Founders out of all of their contrarian ideas unless they are a little bit Asperger's ah interesting what is it about our political system and our media that talks people out of seeing causation unless they are a little bit of a conspiracy theorist and what I mean by that is look at San Francisco okay all you have to do is walk down the street and you can see that things have gone totally off the rails and whatever we've done politically is not working and yet the voters in San Francisco just like completely block that out they don't see any causation between the way they vote at the city level or at the state level and the policies that are manifest on our streets they just don't see any causation there and you can just play that movie over and over again our Elites don't see any causation between the way they ran the country and the election of Donald Trump the fact that we hauled out our Manufacturing in the Rust Belt by throwing open our markets to China exporting our jobs to China the way that we squander all this money in the forever Wars of the Middle East regards to what your views are on those policies it's pretty obvious to me that they helped cause the rise of Donald Trump and yet you just can't get the media to see any causation between the policies they endorse and the inevitable reaction to them and so the way I see this is that our political analysis certainly our mainstream media they're just completely bereft of seeing any causation between policies and the problems in our society and so Along Comes RFK Jr and he's willing to actually connect dots now you may not agree with all the dotsies connecting but maybe it takes it the same way maybe it takes a little bit of an Asperger's founder to stick with their contrarian idea so they don't get talked out of it maybe it takes a guy like Robert F Kennedy Jr not to get talked out of these things that he believes some of which I think are just obviously true at the one of the selling points he made was just Hey listen farmer spends an awful lot on Advertising the media is dependent on that advertising they don't seem to criticize it all that much maybe that's something we should look into now I don't think that like Pfizer is writing the script for Anderson Cooper but you can be sure that if Pfizer didn't like something Anderson Cooper said there's somebody they could call at CNN and say something to and have a conversation about you know setting the record straight whatever however you would frame it speaking of CNN right and oh wait don't leave that point before I thought it was a really interesting part of the conversation when he mentioned that he had been friends way back with Roger Ailes and Roger L specifically told him yes that they could not post certain or televise certain content if it was too critical of Pharma companies because they were the number one Advertiser yeah and should farmer companies even be advertising so then all of a sudden let's say it was a conspiracy theory or he is like way out there in terms of his belief but the fact is it does bring up the point should we actually be letting Pharma companies advertise on television or on news programs maybe they shouldn't be allowed to be on news before it's not like it's not like the consumer who watches the ads and go out and buy the drug as you prescribed by a doctor they can ask their doctor about it yeah all right well speaking of CNN there was an absolute train wreck of a presidential Town Hall with a moderator named Caitlin Collins I don't recognize her name I don't know if she has a show on CNN but I saw the clips from it I couldn't find the full debate but my Lord was this that's unbelievable it's unbelievable it was unbelievable he got a standing ovation he absolutely owned her on every question all of her questions were about you know January 6th you know all of them are valid but none of them were about running the country essentially and uh he was hilarious at least to this audience and he CNN staffers are really upset that they did this that they gave him that they platformed him which shows you exactly where they stand they're upset I guess they thought they could own him and they didn't did you guys see the part where he was talking about the trial and he's like and she has a cat named vagina I mean it was surreal and I just thought to myself is this going to be for the next year and a half we're going to have these town halls and then I thought oh he's going to get elected is it true that EJ and Carol has a cat named vagina I have no idea but I mean it was that was a pretty vicious section and then I got the sense that CNN's management wants this this is like a ratings Bonanza for them and I think they secretly want him Freeburg said it it's so true he's so entertaining I could not stop laughing I watched him on CNN and I was like man it's it's like uh one of your one of your old TV shows that you don't really remember watching a lot of and it comes back on and you're like he's so ridiculous the things he says it's true because when he first got when he first got elected I was so afraid and then you realize he this guy's just an Entertainer really he's a terrible politician Bill Barr said that or yeah did you see the bar interview yeah the bar clip that I shared is just bananas about Trump but so he's a showman and he's a great showman you know he's entertaining and you realize that he was that's all he's ever really wanted to be was like famous and popular and on television and and he got all of those things and he took it to the to the most infinite level what Bill Barr said was most insightful that it's chaos when he actually tries to get things done he can't get things done right and he'll tell you all the things that you want to hear that he wants to that you want to see get done he did this to Peter Thiel and Peter Thiel spoken about this publicly so I'm not saying anything not a line here I don't know if this is something that's on the record or not but it was publicly stated that Peter was disappointed that Trump did not get the things done that he said he was going to get done and I think that's really what what he does is he incites he entertains he gets people engaged he knows what you want to hear he sells you on it he cripples The Establishment which everyone feels treated poorly by that everyone feels held backed by that everyone feels has taken something from them that isn't giving something to them and then he says you know what I'm going to fix all that for you and then you get excited by it and then all of a sudden he doesn't actually deliver it and four years have gone by and we've forgotten about it and he's come back in and he's kind of you know titillating again so I think I think the reality is he's got a real shot at getting reelected here oh my God here's what I wanted pretty amazing I'll go around the horn I'll start with you I mean he said January 6 was like a beautiful day he said that everybody in the Republican Party who said he lost the election is wrong and that the election was in fact stolen like he literally doubled down on every single thing right so at the end of this he gets his Standing Ovation in New Hampshire so how did CNN pick that audience did they do that on purpose did they know that was going to be the outcome but at the end of the day after that does that increase his chances of winning the Republican nomination and the presidency in your mind sacks yes of course it does why look well look I mean Donald Trump showed that he's a force of nature he's a wrecking ball he went into CNN's carefully laid trap where he's not just up against Caitlyn Collins make no mistake she's got an earpiece in her ear with all of CNN's researchers and hosts and producers they're all for us exactly and he basically demolished sure he controlled the interview he had the crowd laughing when he wanted them to laugh responding the way he wanted them to respond and to the point now where the CNN staffers are like oh my God what did we do an AOC was basically you know ringing her hands about how how could CNN platform him this way so so look he gave No Quarter whatsoever like you said he doubled down on everything he tripled down and he showed his ability to kind of Bend reality to his will so all the strengths of trump that being said I'm sure that Trump and his campaign were delighted with what happened last night because I do think it makes him more likely to be the nominee I think first and foremost I think Republicans want a candidate who will fight the media and their fake narratives and lies no matter how many lies Trump tells they think the media is the bigger liar and they want someone who is willing to step in the Lion's Den and take them on and he is incredibly adroit and quick on his feet and DeSantis is imploding so what would any of them do yeah just be fair the same as clearly as the underdog okay but just give the guy a chance because we haven't seen what he can do yet but there's no question that Trump showed an adroitness and a willingness to counter punch and fight back that they base the Republican base definitely responds to now yeah so we know we know that Trump is happy with the debate I think the other party that is super happy with this debate is Biden and all of his people because as much as that debate helped Trump in the Republican primary it did nothing for him in the general I don't think like you said Jason he doubled down on January 6. the campaign ads right themselves okay they're going to show footage of January 6 with a tear gas and the riots being beaten people being shot people pushing down the barricades and they're going to do a narrative a voiceover with Trump saying it was a beautiful day the people there had love in their life itself yeah it writes itself and then you know he doubled down really strongly on Roe v Wade that was crazy being overturned he's like yeah that was I mean I don't have his quote which again I think it doesn't hurt him in the Republican primary but it's you know it it will lead to a campaign attack at in in the general and there are other issues as well okay so so the Biden campaign is super happy right now because I think the only Republican he could beat is Trump I think the reverse is true for Trump I think the only Democrat who Trump could beat as Biden I mean they are both two of the most unpopular candidates in America in a general election so they love the fact they're going to be facing each other but you know who doesn't is the American people two-thirds American people don't want this choice they say they're already fatigued by it and they're only going to get more fatigued by it because I think for the next like you said 18 months we're going to have the Trump show with him taking on the media and that plays into Biden's hands because Biden doesn't need to campaign he'll just let Trump and the media beat each other up he'll do a Rose Garden campaign where once a week he goes in front of the microphones and responds to whatever Trump's latest outrage is he doesn't have the Vigor to campaign and he won't and then we'll just see where the chips land I think that it's it's quite possible here that after 18 months of trump and the media beating each other up the American people just say you know what this Biden guy is totally senile but I'm like so tired of the the Trump show I've got Trump fatigue again I'm just gonna have to go with Biden and I think I think this is how Biden gets reelected this is a disaster for American the fact that we are putting Biden who's in clearly in cognitive decline and Trump as the two candidates again the two candidates nobody wants makes me think this is just like a complete disaster for America can we not find two other candidates chamoth what did you think coming out of is stand up special on CNN the Trump Town Hall stand up special I think that I'm more surprised by the fact that the big Republican Mega donors have taken a big step back away from DeSantis I thought that if the money train on the Republican side picked DeSantis that it would be very difficult for Trump to overcome it but he's managed to somehow fade that bullet too he's like Neo in the matrix it's like you have these guys shooting bullets at this guy and he just keeps somehow finding a way to evade them but this week 's main point on that I was just going to say well Schwartzman step back Ken Griffin basically has gone silent so there's a lot of guys that came close to him and this is what I've maintained which is I think DeSantis ages poorly you know he's best before you actually spend time with him and the more time people seem to spend and again this is just evidenced by these big Republican Mega donors they don't seem to be running towards this guy they seem to be at least saying we're going to head yeah they're waiting Friedberg any thoughts and then I'll go back to you okay you went for like 10 minutes any thoughts on it in terms of is this make him more electable do you think he's going to win for sure got to tell you the CNN thing yeah yes post CNN you think do you think he's gonna win you think he beats Biden the crazy polling data is that Biden had you know 20 of the votes going to RFK Jr who's like a nobody no one knows candidate and he's beating a sitting president in his own party so that says a lot about you know how much support Biden has and I think that Trump is going to be pretty appealing as the anti-biting candidate I mean Biden was the anti-trump candidate and now turns the anti-viding candidate and right now he looks like he's Dynamic and he was uh a big shift I think RFK Jr feels a lot like a trump candidate to me too I mean you know some of the positioning and the statements and the way he talks and being anti-establishment he could also have that appeal I think there's a non-zero chance Biden actually doesn't run for re-election at this point play that out I can play that out that's a really scary scenario because I think that's how he got a president Newsome listen I mean Newsom is warming up in the bullpen right now and he's not just you know hanging out back there and you know spitting Shaw he's pitching fastballs very noisily he's been running TV ads he's been going to Florida he's been picking fights you know well outside of his State he is basically telling the Democratic party putting me in the game Coach and he's just waiting for the signal to go he he needs to know from democratic party insiders in the establishment that he can go he doesn't want to risk throwing away his career challenging Biden but if Biden becomes too weak to run and he gets the signal to go he'll go and he can raise a lot of money and I'm going to explain sorry can you can you guys just explain both of you like how does that actually like what do you guys think happens like there's a press conference that where Biden says he's retiring I think he said after careful thought and consideration I've made the decision that at my age I'd like to spend more time with my family and not continue this Hefty responsibility and I'd love to see someone else take the mantle and I think that that will result you know from a series of polls that will indicate that he may not have a shot if he continues this campaign I think that I'm not saying that's a certainty I think that's a non-zero chance right now that that scenario plays out when that does play out to Sax's point it's probably not just news then but there's probably half a dozen and likely a dozen folks that pop their head up and want to get not just kind of have a real run at the presidency on the Democratic side but probably end up saying I want to heighten people's awareness of me and so on and they all run on that on that ticket but the DNC might be having a real tough conversation in the next couple of months about how Biden's pulling and whether he really is the right candidate to have on the ticket so let's see let me give you a historical example so I mentioned this I think when RFK Jr was on the Pod but LBJ was the sitting Democratic president in 1968 and he went into the New Hampshire primary and he won the New Hampshire primary but not by a big enough margin and a few weeks later he announced he was leaving the race because of health reasons but the specific Challenger who helped knocked him out of New Hampshire was Gene McCarthy and then after that happened Bobby Kennedy got in the race so we could have a situation here where it's Bobby Kennedy Jr is you know initially playing the gene McCarthy role of being kind of the anti-war protest candidate who helps knock Biden out of the race and then who knows I mean Gavin Newsom they're going to want to come in into the race at that point but remember you know the thing the thing that happened in early 1968 that caused LBJ to leave the race is you had the Tet Offensive and Cronkite got back from Vietnam saying the war cannot be won and then at that point it was like game over well look this Ukrainian counter offense of zelinski just announced today that they need more time so we've been hearing for months if not a year that you're going to have a big Ukrainian counteroffensive in the spring summer of this year and Ukraine is going to win this war and instead it looks like it's being destroyed Ukraine is so this war is turning into a debacle I think it could be an even worse debacle by the end of the year the economy has a banking crisis going on it's turning into a big Fiasco so I think it's very possible that Biden could announce that it's time for him to step aside and you could see the floodgates open for Newsom or JB pritzker or something like that however let me just say this I think the odds of Biden leaving the race went down significantly as a result of last night because all of the political people around Biden are saying we know how to win this thing we just a b tested the strategy in the midterms remember we had three quarters of the American people in the midterms think that we're ready in a recession and um and now the country was on the wrong track and the out-of-power party is supposed to gain seats and the Red Wave turned into a puddle why because Biden's strategy of saying democracy was on the ballot and running against January 6. it actually worked I'm not saying I bought that argument but enough Independents did Independence ended up breaking for Biden and the Democrats Republicans didn't but Independence did so Independents have bought that argument in the midterms in and Trump again if he's the nominee they're going to run that same Playbook now it's not guaranteed to work I think this thing's going to be a nail biter I think it's going to be a toss-up if it's buying versus Trump but I think that Biden's people have to feel very good about this matchup because they feel like they already know how to run this campaign this is what he said about Roe v Wade it was such a great victory I mean can you imagine how that's going to play with Women Voters they're just gonna be like yeah no it was not a great Victory you took away our right to choose for ourselves well definitely definitely Democratic Women Voters will not like it but there's a lot of Republican Women Voters that that will support that state here let me give you this 30 let me give you this data of the country so take a look at this I I don't think you're right Jason I just shared with you kind of the Reuters polling data the most recent one and the number one issue at 24 of likely voters that they care about is the economy 24 number two is crime at 14 number three is immigration at nine percent number four is inequality at six percent and on and on and on only when you get down to like number 10 you get to abortion which comes in at three percent two percent of Democrats one percent or you know three percent four percent of Democrats one percent of Republicans yeah but what is the margin of the election well I don't think that that's the issue that breaks it I think there's other things that there's significant differences on particularly around crime and immigration inequality that are pulling much higher in terms of importance to likely voters do they drive turnout like abortion does I don't know I'm just I'm just thinking these numbers it's like you know one to three percent of people saying it matters to them is not that significant I think these other topics are going to be very divisive and very different uh very polar different than what people say in a poll and what people turn out to vote for like for some people that is a major issue but who knows I think it's a toss-up basically look I like I said I think the only candidate that Biden could beat is Trump and Biden's probably the only sitting president that Trump can beat so I mean again they're both it poll nationally in the mid 30s and this is the choice we have I Gotta Give sacks his red meat I saw these uh Republicans are going on a revenge tour here to uh go after the Biden family they said they would and they have so the oversight uh house oversight committee reveals a guess nine Biden family members received wire transcripts from foreign Nationals by shell corporations and they don't have any connections to Biden we know that Hunter was securing the bag all over the planet he's clearly a grifter I don't think there's any doubt about that what's the truth here and how much evidence do they have because this is obviously a partisan thing just like there were partisan things on the other side when they were investigating Trump so how do you look at this information this revelation they keep they're using this like fighting cried crime family meme do you think this is actually evidence of something or is it just another Rich family with a bunch of llc's another Rich family wait how do they get rich good question the Kennedys were a rich family yeah but the bidens were not a rich family so how do they get rich their only business is they don't have money they don't know how much money is actually here and how it's being what what evidence they have it's not red meat for me I just think the media should have done its job investigating the story properly and what this investigation has turned up is that there's a lot of members of the buying family I think they're up to like 10 or 12 or something we've received payments flowing from foreign governments no one can tell you what any of those people did in exchange for the money it does appear to be an influence peddling operation I don't know whether that's influence paddling operation so people were giving money again the the point is that why would you give money to members of the buy-in family it presumably for some sort of access to the person who's been in Washington for 50 years did they know who gave the money is it China is it Ukraine do they have that data well I think we know about barisma which is a I see it going to Hunter yeah yeah and then I think China is another one now I don't know what the quid pro quo is for that money but I wonder if this is like the Kraken or if this was actually reality because they seem to be short on actual facts I think they got a lot there but I mean they're putting out all these reports but listen I think to me the the actually the bigger story or the bigger Scandal is just more details on the way that the security State wrote that fake letter basically calling the honor buying story Russian disinformation there's an email now that just came out where Mike Morrell is corresponding with John Brennan and Morel specifically says we're creating the letter to give Biden a talking point in the debate they're the former CI directors right yeah exactly both of them were Ciara directors at different points so there's no question now that that letter where 51 Security State officials claimed that the hunter bind story is Russian deformation that was all basically a political dirty trick and dirty tricks happen but I don't think the CIA should be involved that's the thing I don't think the the branches of our government should be involved in helping to get any candidates these guys they're former but foreign so that was another thing that came out well that's what bothers me more than anything is I do not think our permanent government especially security agencies should be involved in partisan politics they really need to stay out that is election meddling that bothers me that's a form of corruption that I think is even worse than monetary payments take out can you tell us about your trip to the Middle East what have you been doing there so our bestie Brad gerstner was coming here and we were at the poker game A couple weeks ago maybe a month ago and he said he was going and I've always wanted to come to UAE and I've never seen Dubai or Abu Dhabi and so I said yeah I'd love to go with you and we did a couple speaking gigs where are you staying so four seasons in Ritz Four Seasons in Abu Dhabi and the Ritz here in Dubai and I was just going to do these three speaking gigs a podcast and isn't IFC in Dubai incredible yeah I mean it's it's and it's all been built in the last 10 years I I would say generally speaking what I'm super impressed about and I I'm not it's not a fundraising trip I was just going but then uh one of your former employees chamoth set me up with a bunch of meetings because it's like hey there's a lot of people who want to meet you so I I'm doing like a maybe a dozen meetings or so and there is um a real this is a very Progressive place the the UAE of all the uh and Dubai obviously is very Progressive and so it reminds me of like you know Silicon Valley in the early days where everybody's doing something and it's incredibly Cosmopolitan there's only 500 000 Nationals but there's 10 million people here more so there are people spoken than any other language in Dubai yeah I mean the number of people here from all around the world is Bonkers and then everybody's working on something everybody's got a project and the people are delightful did you go to the French restaurant I told you about in Abu Dhabi I did this question you got this ribeye did you get the ribeye yeah we had like a family solving so I didn't get the ribeye but it was it was exceptional the food's exceptional it's just like incredibly cost of pollen it's like going to New York you know or London and they are there's a very unique moment in time right now sax when you go to Abu Dhabi and you stand you stay at the Four Seasons in the adgm go to this French restaurant and order the rib eye it is a top five steak I've ever had top five I've never been there I've never been to the Middle East Side so delicious so delicious so delicious and in Dubai do not stay at the Ritz in IFC IFC is incredible but the Ritz sucks stay at the Bulgari Hotel beautiful just beautiful but there's a very unique moment of time I literally came down the elevator at the Four Seasons and I met four or five people from Silicon Valley in the lobby and then I came out of dinner uh and there was a table of Silicon Valley entrepreneurs and Venture capitalists it is I mean it's basically like going to the Rosewood in in Abu Dhabi but what a statement that is like the US is tapped out we are like broke that's I think basically the they are the way it's been explained to me is they believe they have 20 years 30 years to convert the oil economy into a technology Capital allocator economy and so they want to make Evergreen funds to invest they haven't had a chance to invest in Venture Capital because most Venture Capital there weren't that many they were fully allocated and there was no opportunity now with what's happened in the United States in this pullback and sort of the cycle starting over again I think there's an opportunity for them to invest in some funds and start relationships and then you know we've had a long talk here about human rights in different countries and it's not a monolith over here and I mean I don't know who needs to hear that exactly but there there's these countries are very different very different I'm sure they appreciate your lectures on that subject Jacob actually you know what's interesting we didn't have rushers on it but we had I've had multiple conversations about these issues enjoy your lectures on this pod I Don't lecture about it I think these are important issues that people discuss and the serious thing is a number of these countries are majority young people and they are reforming very quickly and rights are changing and so the question is for you know all of us and uh for the world is do we collaborate and you know support as they you know become more liberal and become more tolerant and they you know become more Western basically and young people it's very Western here and the parties going on here are pretty much like the parties I attended in LA or New York and so I think actually we're probably not as at least UAE and in a couple of countries here are not as disparate as like we one might think I'm glad you did the trip because I'm glad to hear you talking like that that there isn't an Us Versus Them point of view you know visiting and seeing the culture and the intention of the people within the culture super important and I think it's it's good that you did it so good to hear it I wanted to share the video that these guys did but let's do it next week I think it's really it's worth it no the um the Lord of the Rings one that this guy did which is amazing wait what there's a Lord of the Rings video no not with us not with us Jacob oh I don't want to watch it okay why would I want to watch that yeah thank you Elvis yeah exactly a tiger video for the third time did you see that yeah I took an outtake from the guy's video on Lord of the Rings we'll put the link in the show notes but this guy made this incredible AI generated Wes Anderson does Lord of the Rings oh I did see that did you see how that was amazing and uh the clip I'm using today as a background is is an outtake uh from the trailer did you see it sax oh my God it's so funny the guy is incredible but I mean the creativity and the potential with AI it's just so evident this guy talks about it on his website and on his Twitter feed he did it in a couple of days he learned a bunch of new AI tools a lot of generative tools were integrated to make this possible it's an amazing two minute piece of art that I think really speaks to the creativity being Unleashed with AI again going back to this point about it not just being about Job reduction and reductionism but it's really about unleashing new potential that we didn't Envision before separately there'll be another I think we should talk about this next week but there's now this kind of generative video game platform that's being demoed where you can instruct the video game intentions and it generates a immersive video game experience for you on the fly with something we talked about a couple episodes probably a couple months ago at this point something on this week in startups who showed a video game where he made like you make 25 objects in the game it's really incredible in a certain style and then you say I want to make more characters like that I want to make more backgrounds like that like you take a Wes Anderson style whatever and it just generates them for you and it just keeps generating them for you so one artist can make a palette for a game and you say I want to have a penguin in my game I want to have a zombie in my game yeah that's exactly right yeah and it just does it and then people who are playing the game can say what they want with prompts and it creates it and you can drive a storyline and then you can integrate with other people's story lines I mean it's really powerful anyway I gotta run for David Friedberg David sacked here Heim your boy J Cal love you boys we'll see you all next time on the all-in podcast [Music] playing yeah with the greatest hits here on Z100 the balenciago video featuring The all in cast with cameos by Brian Armstrong Keith Urban boy and Elon Musk coming at you Balenciaga Friday night eight o'clock hardest ticket in New York foreign [Music] that's when you Balenciaga [Music] fed mullet quantitative tightening in the front quantitative easing in the back [Music] the greatest source of value and wealth creation in the 22nd century could be driven by terrestrial nucleosynthesis thank you getting dressed is easy owning the runway is hard [Music] the big winners of Tomorrow will likely be the Minecraft youtubers of today it's easier than ever to confuse popularity and truth I think it is possible for ordinary people to choose to be Balenciaga the mainstream media is the most h m it's ever been when I left Facebook I left an enormous amount of equity on the table I thought I don't want to be a slave to money I want to be a slave to something bigger Balenciaga








I have a little surprise for my besties everybody's been getting incredible adulation people have been getting incredible feedback on the podcast it is a phenomenon As We Know and I thought it was time for us to do performance reviews of each bestie now I as executive producer I'm not in a position to do uh your performance reviews I too need to have a performance review so I thought I would let the audience do their performance reviews so we went and we're debuting a new feature today at this very moment it's called Reddit performance review oh God cue some music here some graphics Reddit performance reviews and so we'll start off with you David Friedberg this proves why you haven't been successful in life so far Enterprise in set to yourself which is what all Elite performers do yes you turned it over to a bunch of mids on Reddit yes I'm already doing it they were already doing it we just collected it what elucidation were you going to get from Reddit yeah really let's not ruin the bit do you think Elon does 360 performance reviews on Reddit on Reddit of all things you know how many 360 performance trees I've done in my life zero of course and that's why this will be so interesting okay go go start off with me you are going to be presented with the candid feedback that you've gotten in the last 30 days on Reddit but for the first time and you have to read it out loud to the class Freeburg you'll go first here's your first piece of candid feedback in your 360 from the Reddit in cells go ahead Freeburg read it out loud David Friedberg deserves more hate he and the others have made it their mission to convince us that reforming Social Security is the only way forward to survive he hides behind this nerdy apolitical Persona and then goes hard right out of nowhere it's that fear-mongered about the deficit as an excuse to restructure entitlement programs we would see that as the partisan right-wing take it is when Friedberg does it we're supposed to act like he has no skin in this game he's just the Science Guy no he's a rich guy who would rather work your grandparents to death than pay an extra five percent tax all right there's your review very good I think you took it well and you don't have to respond now don't be defensive just take it in just a counter briefly I have highlighted multiple times I think we're going to 70 tax rates but hey you know all right they're wrong everyone's got an opinion that won't generate more Revenue yeah the history is any guide yeah well the audience has been waiting for this David sacks has never taken a piece of feedback and the feedback he has gotten he hasn't taken well so here we go David here's your performance review go ahead I'm supposed to read this go with the bit come on it's a little feedback for you come on all right and I'm gonna do this too and I haven't seen mine oh Nick pulled these Nick pulled these this is nice these are actual pieces of real feedback Nick you're fired that's it get out of here good sex the thing about David sacks if he wasn't Rich everyone would dismiss him as being both stupid and boring and the secret to his wealth is just follow theater since College it's like if turtle from ontar pretend to be a public intellectual has never had a 360 review he informs us and I think his staff you know for all the people at Social Capital you can get in on this by just posting to Reddit since he went to 360 reviews at Social Capital go ahead let's pull up your months feedback for the quarter moth is the biggest self-serving leech as long as he can make a dollar trade on it he will burn anything down to the ground [ __ ] the consequences to society or anyone else this was actually the good part yeah why'd you give him such a good review truth it is okay I gotta read mine I haven't seen this I'm embracing for impact here what's the critique exactly what is the critique from that I mean that's like it's pretty active yeah okay all right here we go I gotta read mine okay I can't wait for AI to replace Jay cow Jay cow is the least skilled knowledge worker on the show I think he has about three shows left before AI replaces his hosting skills and ability to trick dentists into investing in hype that's pretty good that last part I do have a lot of dentist friends in the funds um okay I'm gonna pay for a lot of kids then to school great idea great idea Jay Cal to give us what a great big there's one group one there's one for the whole group this is a group survey this is our group 360. vote to rename the podcast the vote is binding and the podcast will be renamed three billionaires in jaycal three kind of smart guys and jcal three [ __ ] and Free Bird that's a pretty good survey that was pretty good yeah that's a good one Rain Man [Music] we open source it to the fans and they've just gone crazy [Music] all right everybody Welcome to the all in podcast we're still here episode 129 all in Summit 2023 general admission sold out too many people apply for scholarships that's on pause and there's a couple of VIP tickets left get them while they're hot just search for all in Summit Freeburg anything to add we'll just get through the grift real quick here at the beginning no it's gonna get it all right that was it yeah I mean just more demand than we predicted we look for a bigger venue couldn't find one we're I think we're excited about Royce Hall it's still as you pointed out two and a half times the size of last year so we want to make sure it's a great quality event but unfortunately way too many folks want to go so we have to kind of pause ticket sales what's my wine budget 300 per person per night a thousand dollars per VIP per event thank you okay I will handle it from here so there's 750 of them so I think you have 750 000 in one budget thank you I mean I just can't believe I just gave extra mod 750 dollars to buy one all right guys I'm gonna curate an incredible guideline here today by the way oh he's doing yes Melanie Josh somebody hey Josh all right let's get to work okay the senate had a hearing this week for AI Sam Altman was there as well as Gary Marcus a professor from NYU that's an overpriced College in New York City and Christina Montgomery the Chief privacy and Trust officer from IBM which had Watson before anybody else was in the AI business and I think they deprecated it or they stopped working on it which is quite paradoxical there were a couple of very interesting moments Sam claimed the U.S should create a separate agency to oversee AI I guess is in the chamoth camp he wants the agency to issue licenses to train and use AI models a little regulatory capture there as we say in the biz he also claims and this was interesting dovetailing with elon's CNBC interview with I think Dave Farber which is very good that he owns no equity in open AI whatsoever and was quote doing it because he loves it any thoughts shamath you did say that this would happen two months ago and here we are two months later and exactly what you said would happen is in the process of happening regulation Licensing and Regulatory capture Sam went a little further then I sketched out a few months ago which is that he also said that it may make sense for us to issue licenses for these models to even be compiled um and for these models to actually do the learning and I thought that that was really interesting because what it speaks to is a form of kyc right know your customer and again when you look at markets that can be subject to things like fraud and manipulation right where you can have a lot of Bad actors banking is the most obvious one we use things like kyc to make sure that money flows are happening appropriately and between parties that where the intention is legal and so I think that that's actually probably the most important new bit of perspective that he is adding as somebody right in the middle of it which is that you should apply to this agency to get a license to then allow you to compile a model and I think that that was a really interesting thing the other thing that I said and I said this in my in a tweet just a couple days ago is I'm really surprised actually where this is the first time in modern history that I can remember where we've invented something we being Silicon Valley and the people in Silicon Valley are the ones that are more circumspect than the folks on Wall Street or other areas and if you see if you gauge the sentiment the hedge funds and family offices right now are just giddy about Ai and it turns out if you look at their 13fs they're all long Nvidia and AMD but if you actually look at the other side of the coin which is the folks in Silicon Valley that's actually making it the rest of us are like hey let's crawl before we walk before we run yeah let's think about guard rails let's be thoughtful here and so the the big money people are saying let's place bets and the people building in are saying hey let's be thoughtful which is opposite to what it's always been I think right we're like hey let's let's run with this and wall Street's like prove it to me sax you are a less regulation guy you are a free market monster I've heard you've been called uh you don't believe that we should license this what do you think about what you're seeing here and there is some cynical cynical thoughts about what we just saw happen in terms of people in the lead wanting to maintain their lead by creating red tape what are your thoughts yeah of course I think you know Sam just went straight for the end game here which is regulatory capture normally when a tech executive goes and testifies at these hearings they're in the hot seat and they get grilled and that didn't happen here because you know Sam Allman basically bought Into The Narrative of these senators and he basically conceded all these risks associated with with AI he talked about how GPT style models if unregulated could increase online misinformation bolster cyber criminals even threatened confidence in election systems so he basically bought into the center's narrative and like you said agreed to create a new agency that would license models and can take licenses away he said that he would create safety standards specific tests that a mall has to pass before it can be deployed he says he would require independent audits who can say the model is or isn't in compliance and by basically buying into their narrative and agreeing to everything they want which is to create all these new regulations and a new agency I think that Sam is pretty much guaranteeing that he'll be one of the people who gets to help shape the new agency and and the rules they're going to operate under and what these independent audits are gonna how they're gonna determine what's in compliance so he is basically putting a big moat around his own incumbency here and so yes it is a smart strategy for him but the question is do we really need any of this stuff and you know what you heard at the hearing is that just like with just about every other Tech issue the centers on the Judiciary Committee didn't exhibit any real understanding of the technology and so they all generally talked about their own hobby horses so you know you heard from Senator Blackburn she wants to protect songwriters Holly wants to stop anti-conservative bias Klobuchar was touting a couple of bills that have her name on them one's called the jcpa journalism competition presentation Bernie Sanders want to do he wants to protect the one percent of the one Durbin hates section 230 that was the hobby horse he was riding and then Senator Blumenthal was obsessed that someone had published deep fakes of himself so you know all of these different Senators had different theories of harm that they were promoting and they were all basically hammers looking for a nail you know they all wanted to regulate this thing and they didn't really pay much of any attention to the ways that existing laws could already be used absolutely to stop any of these things if you commit a crime with AI there are plenty of criminal laws every single thing they talked about could be handled through existing law if they came out to be harmed at all yeah but they want to jump right to creating a new agency and new regulations and Sam I think did the you know expedient thing here which is basically buy into it in order an Insider if this was a chess game Sam got to the mid game he traded all the pieces and went right to the end game let's just try to Checkmate here I've got the lead I got the 10 billion from Microsoft everybody else get a license and try to catch up Friedberg we have trimath Pro regulation licensing I think or just being pretty thoughtful about it there you got sax being typically a free market monster let the laws be what they are but these senators are going to do regulatory capture where do you as the Sultan of science stand on this very important issue I think there is a more important kind of broader set of trends that are worth noting and that the folks doing these hearings and having these conversations are aware of which implies why they might be saying the things that they're saying that's not necessarily about regulatory capture and that is that a lot of these models can be developed and generated to be much smaller we're seeing you know models that can effectively run on an iPhone we're seeing a number of Open Source models that are being published now there's a group called Mosaic ml last week they published what looks like a pretty good quality model that has you know a very large kind of token input which means you can do a lot with it and that model can be downloaded and used by anyone for free you know really good open source license that they've provided on that model and that's really just the tip of the iceberg on what's going on which is that these models are very quickly becoming ubiquitous to monetized small and effectively are able to move to and be run on the edge of the network as a result that means that it's very hard to see who's using what models how behind the products and tools that they're building and so if that's the trend then it becomes very hard for a regulatory agency to go in and audit every server or every computer or every computer on a network and say what model are you running is that an approved model is that not an approved model it's almost like having a regulatory agency that has to go in and audit and assess whether a Linux upgrade or some sort of you know open source platform that's that's being run on some server is appropriately vetted and checked and so it it's almost like a Fool's errand and so if I'm running one of these companies and I'm trying to you know get Congress off my butt and get all these Regulators off my butt I'm going to say go ahead and regulate us because the truth is there really isn't a great or easy path or ability to do that and there certainly won't be in five or ten years once these models all move on to the edge of the network and they're all being turned around all the time every day and there's a great Evolution underway so I actually take a point of view that it's not just that this is necessarily bad and there's cronyism going on I think that the point of view is just that this is going to be a near impossible task to try and track and approve llms and audit servers that are running llms and audit apps and audit what's behind the tools that everyday people are using and I wish everyone the best of luck in trying to do so but that's kind of the joke of the whole thing it's like let's go ahead and paddle these Congress people on the shoulder and say you got it you're right there you have it folks wrong answer chamatha sacks right answer Friedberg if you were to look at hugging face if you don't know what that is it's a basically an open source repository of all of the llms the cat is out of the bag the horses have left the barn if you look at what I'm showing on the screen here this is the open llm leaderboard it's kind of buried on hugging face if you haven't been to hugging face this is where developers show their work they share their work and they kind of compete with each other in a social network showing all their contributions and what they do here is and this is super fascinating they have a series of tests that will take an llm a language model and they will have it do science questions that would be for grade school they'll do a test of mathematics U.S history computer science Etc there's a Jeopardy test too I don't know if it's on here but the Jeopardy test is really good it's like straight up Jeopardy trivia and see if it can answer the questions yeah which actually uh Friedberg was actually his high school uh Jeopardy Championship three years in a row but anyway on this line report you can see the language models are outpacing what openai did I'm sorry closed AI is what I call it now because they're closed Source closed Ai and Bard have admitted that internal person at Bart said the language models here are now outpacing what they're able to do with much more resources many hands makes for light work the Open Source models are going to fit on your phone or the latest you know Apple silicone so I think the cat's out of the bag I don't know how they post something incompatible about that what Freebird just said with what I said in fact three verse point bolsters my point it's highly impractical to regulate open source software in this way also when you look at that list of things that people are doing on hogging face there's nothing nefarious about it yeah and all the harms that were described are already illegal and can be prosecuted exactly I need some special agency you know giving it seal of approval again this is going to replace permissionless Innovation which is what has defined the software industry and especially open source with the knee need to develop some connection or relationship and lobbying in Washington to go get your project approved and there's no really good reason for this except for the fact that the Senators on the Judiciary Committee and all of Washington really wants more control so they can get more donations sax I have a question do you think that creating the DMV and requiring a driver's license limits the ability for people to learn how to drive the DMV is like the classic example of how government doesn't work I don't know why you'd want to make that your example I mean people have to spend the whole time he sends people to it he's got a VIP person all day waiting in line to get your photo taken it's insane I mean everyone has a miserable experience with it no but it's highly relevant because you're you're right if you create an agency where people have to go get their permission it's a licensing scheme you're gonna be waiting in some line of Untold length it won't be like a physical line at the DMV building it's going to be a virtual line where you're in some queue where there's probably going to be some overwork regulator who doesn't even know how this was to approve your project they're just going to be trying to cover their ass because if the project ends up being something nefarious then they get blamed for it so that's what's going to end up happening let me also highlight something that I think is maybe I think a little bit misunderstood but you know an AI model is an algorithm so it's a it's a piece of software that takes data in and spits data out and you know we have algorithms that are written by humans we have algorithms that have been you know written by machines either machine learn models which is what a lot of what people are calling AI today is effectively an extension of and out of and so the idea that a particular algorithm is differentiated from another algorithm is also what makes this very difficult because these are algorithms that are embedded and sit Within products and applications that an end user and End customer ultimately uses and I just sent you guys a a link to the you know the EU has been working towards passing this AI good here we go there are a couple of weeks ahead of these conversations in the U.S but I mean as you read through this AI Act and the proposal that it's uh that it's put forth it almost becomes the kind of thing that you say I just don't know if these folks really understand how the technology works because it's almost as if they're going to audit and have you know an assessment of the risk level of every software application out there and that the tooling and the necessary infrastructure to be able to do that just makes no sense in the context of Open Source software in the context of an open internet uh in the context of how quickly software and applications and tools evolve and you make tweets to an algorithm and you got to resubmit it for authorization sure their number one job freedberg is going to be to protect jobs so anything there that in any way infringes on somebody's ability to be employed in a position whether it's a artist or a writer or a developer they're going to say you can't use these tools or they're going to try to follow them to try to protect jobs because that's their second question of all three of you do you guys think that this was Sam's way of pulling up the ladder behind him of course no 100 just like okay absolutely it is and it's because no you can you can prove it he made open AI closed AI by making it not open source if you're Sam you're smart enough to know how quickly the models are commoditizing and how many different models there are that you know can provide similar degrees of functionality as you just pointed out jaycal so I don't think it's about trying to lock in your model I think it's about recognizing the impracticality of creating some regulatory regime around model auditing and so you're very so that in that in that world in that scenario where you have that Vision you have that foresight do you go to Congress and tell them that they're dumb to regulate AI or do you go to Congress and you say great you should regulate AI knowing that it's like hey yeah you should go ahead and stop the Sun from shining you know like it's just yeah so basically he's telling him to do that because he knows they can't no therefore he gets all the points all the joy points all the social credit I don't want to say virtual signaling but he gets all the credit relationship credit with Washington for saying what they want to hear reflecting back to them even though he knows they can't compete with Facebook's open model which is number one yeah there is historical precedent interesting for companies that are facing Congressional scrutiny to go to Congress and say go ahead and regulate us as a way of Premium relief yeah and I think that it doesn't necessarily mean you're going to get regulated but it's a way of kind of creating some relief and getting everyone to take a breather and a sigh of relief and be like okay the industry is with us you know what do you think the gardas strategy he's pulling here list guard does I think that's in chess when you are going to take the queen anyway what do you think of his chess movies that's uh not a strategy in chess so I think it is a chess move nonetheless is he pulling up the ladder sacks or no I don't think that's his number one goal but I think it is the result and so I think the the goal here is I think he's got two passing from and when you go to testify like this you can either resist and they will put you in the hot seat and just Grill you for a few hours or you can sort of concede and you buy into their narrative and then you kind of get through the hearing without being grilled and so I think on that level it's preferable just to kind of play ball and then the other thing is that by playing ball you get to be part of the Insiders Club that's going to shape these regulations and that will I wouldn't say it's a ladder coming up I think it's more of a moat where because it's not that the latter comes up and nobody else can get in but the regulations are going to be a pretty big moat around major incumbents who know they qualify for this because they're going to write these standards so at the end of the day if you're someone in Sam's shoes you're like why resist and make myself a Target or I'll just buy into the narrative and help shape the regulations and it's good for my business I like the analysis this gentlemen this is a perfect analysis let me ask you about the question tomorrow what is the commercial incentive from your point of view to ask for regulation and to be pro-regulation your pro regulation can you just highlight for me at least what you think you know the the commercial reason is to do that you know how do you benefit from that like not you personally but generally like where does benefit arise I think that certain people in a sphere of influence and I would put us in that category have to have the intellectual capacity to see beyond ourselves and ask what's for the greater good I think Buffett is right two weeks ago he equated AI to nuclear weapons which is an incredibly powerful technology whose Genie you can't put back in the bottle who's 99.9 of use cases are generally quite societally positive but the point one percent of use cases destroys Humanity and so I think you guys are unbelievably naive on this topic and you're letting your ideology fight your common sense the reality is that there are probably 95 billion trillion use cases that are incredibly positive but the 1000 negative use cases are so destructive and they're equally possible and the reason they're equally possible and this is where I think there's a lot of intellectual dishonesty here is we don't even know how Transformers work the best thing that happened when Facebook open sourced llama was also that somebody stealthily released all the model weights yeah okay so I don't think a little bit for a neophyte what we're talking about so so there's the model and there's the weights think about it as it's a solution to a problem the solution looks like a polynomial equation okay let's take a very simple one let's take Pythagorean theorem you know x squared plus y squared equals z squared okay so if you want to solve an answer to a problem you have these weights you have these variables and you have these weights associated with it the slope of a line Y equals MX plus b okay what a computer does with AI is it figures out what the variables are and it figures out what the weights are the answer to identifying images flawlessly turns out to be 2x plus 7 where x equals this thing now take that example and multiply it by 500 billion parameters and 500 billion weights and that is what an AI model essentially gives us to as an answer to a question so even when Facebook released llama what they essentially gave us was the equation but not the weights and then what this guy did I think it was an intern apparently or somebody he just looked the weights so that we immediately knew what the structure of the equation looked like so that's what we're basically solving against but we don't know how these things work we don't really know how Transformers work and so this is my point when I think you guys are right about yes the overwhelming majority of the use cases but there will be people who can nefariously create havoc and chaos and I think you got to slow the whole ship down to prevent those few folks from ruining it for everybody I haven't had a chance to chime in on my position so I'd like to just move mine nobody cares okay well I do I think actually I split the difference here a little bit I don't think it needs to be an agency in licensing I do think we have to have a commission and we do need to have people being thoughtful about those thousand use cases chamoth because they are going to cause societal harm or things that we cannot anticipate and then number two for the neophyte with the 1600 rating on chess.com sax gardes an announcement to the opponent that their Queen is under direct attack similar to the announcement of check the warning was customary until the early 20th century so since you do not know the history of check now you've learned something here early 20th century okay well since I've only played chess in the 20th and 21st centuries I'm unaware of that Jake Owen French is pronounced in the context of what we're talking about that models are becoming smaller and can be run on the edge and there's obviously hundreds and thousands of variants of these open source models that have you know good effect and perhaps compete with some of these these models that you're mentioning that are closed source how do you regulate that how do you and then they sit behind an application and they sit behind tooling yeah I think in order for you to be able to compile that model to generate that initial instantiation you're still running it in a cluster of thousands of gpus but let's say we're past that you can't be past that we're not past that yet okay we don't have five million models we don't have all kinds of things that solve all kinds of problems we don't have an open source available simulation of every single molecule in the world including all the toxic materials that could destroy humans we don't have that yet so before that is created and shrunk down to an iPhone I think we need to put some stage gates up to slow people down what do you mean by those stage kids yeah I think you need some form of kyc I think before you're allowed to run a massive cluster to generate the model that then you try to shrink you need to be able to show people that you're not trying to do something absolutely chaotic or have it creating that I don't think that that could be as simple as putting your driver's license in your social security number that you're working on an instance in a cloud right it could be your putting your name on your work it becomes slightly more nuanced than that it's like I think that Jake out that's probably the simplest thing for AWS gcp and Azure to do which is that if you want to run over a certain number of GPU clusters you need to put in that information I think you also need to put in your tax ID number so I think if you want to run a real high scale model that's still going to run you tens or hundreds of millions of dollars I do think there aren't that many people running those things and I do think it's easy to police those and say what are you trying to do here so let me just push back on that because Mosaic ml published this model that is let me I can pull up the the performance chart or Nick maybe you can just find it on their website real quick or the new model they publish to mock they trained this model on open source data that's publicly available and they spent two hundred thousand dollars on a cluster run to build this model and look at how it performs compared to some of the top models that are closed Source just say it for the people who are listening yeah so for people that are listening basically this model is called MPT 7B that's the name of the AI model the llm model that was generated by this group called Mosaic ml and they spent two hundred thousand dollars creating this model from scratch and the data that they trained it on is all listed here it's all publicly available data that you can just download off the internet then they score how well it performs on its results against other big models out there like llama 7B I know but I don't exactly know what the actual problems they're trying to ask it to compare right so the but the point is that this model theoretically could then be applied to a different data set once it's been you know built I don't know this is you know I just want to use your point earlier about toxic chemistry because models were generated and then other data was then used to fine-tune those models and deliver an output hold on a second like those answers were to specific kinds of questions if you wanted to all of a sudden ask totally orthogonal thing of that model that model would fail you would have to go back and you'd have to retrain it that training does cost some amount of money so if you said to me hmoth I could build you a model trained on the universe of every single molecule in the world and I could actually give you something that could generate the toxic list of all the molecules and how to make it for two hundred thousand dollars I would be really scared I don't think that that's possible today so I don't understand these actual tests but I don't think it's true that you could take this model and these model weights apply to a different set of data and get useful answers but let's let's assume for a minute that you can in fact take two hundred thousand dollars worth it here's my point I want to tell you what's happening right now which is that's not possible so we should stop so that then I don't have to have this argument with you in a year from now which is like hey some jack jerk off just created this model now the cat's out of the bag so let's not do it yeah and and then what's going to happen is like some chaotic seeking organization is going to print one of these materials and release it into the wild to prove it but here's the point for the audience we are at a moment in time where this is moving very quickly and you have very intelligent people here who are very knowledgeable talking about to the degree to which this is going to manifest itself not if it will manifest you are absolutely 100 certain Freeburg that somebody will do something very bad in terms of the chemical example as but one we're only determining here what level of hardware and what year that will happen chimatha saying we know it's going to happen whether it's 2 or 10 or you know five years let's be thoughtful about it and I think you know this discussion we're having here I think on a spectrum it's this is a unique moment where the most knowledgeable people across every single political Spectrum persuasion for-profit non-profit Democrat Republican right Elon and Sam will just use those as the two canonical examples to demonstrate are pro-regulation and then the further and further you get away the less technically astute you are the more anti-regulation and like pro-market you are and all I'm saying is I think that should also be noted that that's a unique moment that the only other time that that's happened was around nuclear weapons and you know that's when Einstein I actually think I think it's politically incorrected right now I think because of what you're saying well just give me a second I think because of what you're saying everyone on the left and the right it's it's become popular to be pro-regulation on AI and to say that AI is going to Doom the world and it's unpopular and absolutely explained my point of view on Sam elon's different but I think like it I think it's become Politically Incorrect to stand up and say you know what this is a transformative technology for Humanity I don't think that there's a real path to regulation I think that I totally there's laws that are in place that can protect us in other ways with respect to privacy with respect to fraud with respect to biological warfare and all the other things that we should worry about Elon has said pretty clearly he doesn't give a [ __ ] about what it does to make money or not he cares about what he thinks so all I'm saying is that's a guy that's not trying to be politically correct Elon has a very specific concern which is Agi he's concerned that we're on a path to a digital superintelligence it's a singularity and if we create the wrong kind of artificial general intelligence that decides that it doesn't like humans that is a real risk to the human species that's the concern he's expressed but that's not what the hearing was really about and it's not what any of these regulatory proposals are about and the reality is none of these Senators know what to do about that even the industry doesn't know what to do about the long-term risk of creating an AGI nobody knows nobody really and so and so I actually I disagree with this idea that tomorrow early earlier you said that there's a thousand use cases here that could destroy the human species I think there's only one there's only one species level risk which is Agi but that's a long-term risk we don't know what to do about it yet I agree we should have conversations what we're talking about today is whether we create some new licensure regime in Washington so that politically connected insiders get to control and shape the software industry and that's a disaster let me give you another detail on this so and one of the chat groups I'm in there was somebody who just got back from Washington I won't say who they are it's not someone who's famous outside the industry but they're kind of like a tech leader and what they said is they just got back from Capitol Hill and the White House and I guess there's like a White House Summit on AI you guys know about that yeah so what this person said is that the White House meeting was super depressing some smart people were there to be sure but the White House and vp's teams were rapidly negative no real concern for the opportunity or economic impact just super negative of course basically the mentality was that Tech is bad we hate social media this is the hot new thing we have to stop it of course that basically is their attitude they don't understand the technology White House yeah and the VP specifically because she's the now the AIS are to put Kamala Harris in charge of this makes no sense I mean does she have any background in this like it just shows like a complete utter lack of awareness where is the Megan Smith of course somebody like a CTO to be put in charge of this remember Megan Smith was CTO under I guess Obama like you need somebody with a little more depth of experience here like hopefully you guys than saying your your pro-regulation depending on who's in charge well I'm proud thoughtfulness I'm pro-lawfulness I'm illustrating that really this whole new agency that's being discussed is just based on Vibes you're not down with the Vibes of Vibes the vibe is that a bunch of people in Washington don't understand technology and they're afraid of it yeah these are socialist David they're socialists they hate progress they are scared to death that jobs are going to collapse they're socialists they they're union leaders this is their worst nightmare Because the actual truth of this technology is 30 more efficiency and it's very mundane this is the truth here I think that Representatives have 30 more efficiency means Google Facebook and many other companies Finance education they do not add staff every year they just get 30 more efficient every year and then we see unemployment go way up and Americans are going to have to take service jobs and why collar jobs are going to be refined to like a very elite few people who actually do work in the world there is absolutely a lot of new companies if humans can become if knowledge workers can become 30 more productive there'll be a lot of new companies absolutely and the biggest shortage on our economy is coders right and we're going to have an unlimited number of them now they're all going to go I don't know if it's unlimited but yes it's a good thing if you give them superpowers we've talked about this before yeah yeah so I think it's too soon to be concluding that we need to stop job displacement that hasn't even occurred yet I'm not saying it's actually going to happen I do agree there'll be more startups I'm seeing it already I just think that's what they fear that's their fear is and that's the fear of the EU the EU is going to be protection unionist protect Pro workers aren't going to be affected because these are not blue-collar jobs we're talking about these are knowledge unions at all the media companies created unions and look at them they're all going circling all these media companies are circling the training going into their business but that's on the margins I mean that's not just trying to start Tech unions sure they're trying to start them but when we think of unionized workers you're thinking about Factory workers and these people are not affected okay listen this has been an incredible debate this is why you tune into the pod a lot of things can be true at the same time I really think the analogy of the the atom bomb is really interesting because what Elon is scared about with General artificial intelligence is nuclear Holocaust the whole planet blows up between those two things are things like Nagasaki and Hiroshima or a dirty bomb and many other possibilities with nuclear power you know Fukushima you know Etc so less than the Hiroshima not yet right and you know the question is is a three mile island is a Fukushima is a Nagasaki are those things probable and I think we are all looking at this saying there will be something bad that will happen there will be the equivalent strings together and these large language models string together words in really interesting ways and they give computers the ability to have a natural language interface that is so far from AGI I think it's a company hold on I think it's obviously the ability to understand language and communicate in a natural way is a component of a future AGI but by itself these are models for stringing together language auto GPT where these things go out and pursue things without any interference I would be the first one to say that if you wanted to scope models to be able to just do human language back and forth on the broad open internet you know there's probably a form David where these chat GPT products can exist I don't I think that those are quite benign I agree with you but I think what Jason is saying is that every week you're you're taking a leap forward and already with auto gpts you're talking about code that runs in the background without supervision it's not a human interface that's like hey show me how to color my cookies green for St Patty's Day it's on my trip to Italy yeah yeah it's not doing that so I just think that there's there's a place well beyond what you're talking about and I think you're minimizing the problem a little bit by just kind of saying the whole class of AI is just chat GPT and asking kid asking it to help it with its homework this example I hate to say it out loud but somebody could say here is the history of financial crimes that were committed and other hacks please with their own model on their own server say please come up with other ideas for hacks be as creative as possible and steal as much money as possible and put that in an auto GPT David and study all hacks that occur in the history of hacking and it could just create super chaos around the world and your computer history is going to regret buying into this narrative because the members of the Judiciary Committee are doing the same Playbook they ran back in 2016 after that election they ran all these hearings on disinformation claiming that social networks been used to hack the election it was all a phony narrative hold on look what happened the Russians hacked who had to write out that stop they thought they got all these Tech CEOs to buy into that phony narrative why because it's a lot easier for the tech CEOs to agree and tell the centers what they want to hear to get them off their backs and then what did that lead to a whole censorship industrial complex so we're going to do the same thing here we're going to buy into these phoning names the centers off our backs and that's going to create this giant AI industrial complex that's going to slow down real Innovation and be a burden on entrepreneurs okay lightning round lightning round we got to move on three more topics I want to hit let's keep going if honor to become an evil more evil yeah what is it called an evil uh comic book character a super villain a super villain if you wanted to be an even more loathsome super villain continue I would take every single virus patch that's been developed and publicized learn on them and then find the next zero day exploit on a whole bunch of stuff I mean it's just like even publish that idea please don't I mean I'm I'm worried about publishing that idea that's not an intellectual leap I mean you have to be a dollar it's obvious okay let's move on another great debate Elon hired a CEO for Twitter Linda yakarino I'm hoping pronouncing that correct was the head of AD sales that NBC Universal she's a legend in the advertising business she worked at Turner for 15 years before that she is a workaholic is what she says she's going to take over everything but product and CTO elon's going to stick with that she seems to be very moderate and she follows people on the left or right people are starting the character assassination and trying to figure out her politics and that she was involved with the w World economic Forum which anybody in business basically does but your take sacks on this choice for CEO and what this means just broadly for the next six months because we're sitting here at six months almost exactly since Elon took over obviously you and I were involved in month one but but not much after that what do you think the next six months holds and what do you think her role is going to be obviously some precedent this for this with you know why not as basic listen I think this Choice makes sense on this level Twitter's business model is advertising Elon does not like selling advertising she's really good at selling advertising so he's chosen a CEO to work with who's highly complimentary to him in their skill sets and interests and I think that makes sense I think there's a lot of logic in that what Elon likes doing is the technology and product side of the business he actually doesn't really like the let's call it the standard business chores and especially related to like we said advertising stuff with advertisers I think it's his personal nightmare right so I think the choice makes sense on that level now yeah instantly you're right her hiring led to attacks from both the left and the right the right you know pointed out her views on covet and vaccines and her work with the wef and then on the left I mean the attack is that she's following Libs at Tick Tock which you're just not allowed to do apparently a follow is not an endorsement well if you're just following lives of tick tock they want to say you're some crazy right winger now well she also follows David sacks so that does mean that she's pretty that that is a signal but the truth is if you sax correct me if I'm wrong here or trim off maybe I'll send it to you if you pick somebody that both sides dislike or are trying to take apart you probably pick the right person yeah here's what I think okay go ahead we're not going to know how good she is for six to nine months but here's what I took a lot of joy out of here's a guy who gets attacked for all kinds of things now right he's an anti-semite apparently and then he had to be like I'm very Pro semi he's a guy that all of a sudden people think is a conspiracy theorist he's a guy that people think is now on the Raging right all these things that are just like inaccuracies basically fire bombs thrown by the left but here's what I think is the most interesting thing for a guy that theoretically is supposed to be a troll and everything else he has a female chairman of Tesla a female CEO at Twitter and a female president at SpaceX of course it's a great Insight it's the same insight I think a lot of these virtual signaling lunatics on the left virtue signaling mids and you know what like they're all new house Elizabeth Warren and and Bernie Sanders giving you know the CEO of Starbucks a hard time when he doubled the pay of the minimum wage gave them you love mid right that's a great term isn't it these [ __ ] mids and I paid for the college tuition what gives you the right at Starbucks to pay for college tuition and double the minimum wage I don't know why it's so funny to me isn't it so great like just because you can picture them when I say that these are these mids feverishly typing on their keyboards their virtue signaling nonsense sex wrapping it up yeah look like you said Elon has worked extremely well with Gwen Shotwell who's the president of SpaceX for a long time and I think that relationship shows the way to make it work here at Twitter which is they have a very culinary skill set I think my understanding is that Gwen focuses on the business side and the sales side of the operation Elon focuses on product and Technology she lets Elon be Elon I think if Linda tries to Reign Elon in tell him not to tweet or tries to meddle in the Free Speech aspects of the business which is the whole reason he bought Twitter yeah that's right that's when it will fall apart so my advice would be let alone Be Elon you know he bought this company to make it a free speech platform don't mess with that and I think it could work great and a free speech platform it is when you are saying anything about covid and I really don't even want to say it here because I don't want our to even say the word covet or vaccine means that this could get tagged by YouTube and BD you know algor the algorithm could could uh D um I don't know what they call it deprecate this and when we don't show up and people don't see us because we just said the word covet I mean the censorship built into these algorithms is absurd but speaking of absurd Nina Khan who has been the least effective FTC chair I think started out pretty promising with some interesting ideas she's now moved a block of major Pharma deal and December Amgen agreed to acquire Dublin based Horizon Therapeutics for 27.8 billion this is the largest Pharma deal announced in 2022. FTC has filed a lawsuit in federal court seeking an injunction that would prevent the deal from closing the reasoning is the deal would allow Amgen to entrench the Monopoly positions of Horizon's eye and gout drugs the agency said that those treatments don't face any competition today and that Amgen would have a strong incentive to prevent any potential Robbers from introducing similar drugs chamoth the pharmaceutical industry is a little bit different than the tech industry insanity explain why and then sax will go to you on the gout stuff because I know that personally impacts you go ahead I think that this is a little like scientifically illiterate to be honest unpack the thing is that you want drugs that can get to Market quickly but at the same time you want drugs to be safe and you want drugs to be effective and I think that the FDA has a pretty reasonable process and one of the direct byproducts of that process is that if you have a large indication that you're going after say diabetes you have to do an enormous amount of work it has to be run on effectively thousands of people you have to stratify it by age you have to stratified by gender you have to stratify it by race you have to do it across different geographies right the bar is high but the reason the bar is high is that if you do get approval these all of a sudden become these Blockbuster 10 20 30 billion dollar drugs okay and they improve people's lives and they allow people to live etc etc what has happened in the last 10 or 15 years because of wall Street's influence inside of the Pharma companies is that what Pharma has done a very good job of doing is actually pushing off a lot of this very risky r d to Young early stage biotech companies and they typically do the first part of the work they get through a phase one they even may be able to sometimes go and start a phase two trial a two-way trial and then they typically can get sold to Pharma and these are like multi-billion dollar transactions and the reason is that the private markets just don't have the money to support the risk for these companies to be able to do all the way through a phase three clinical trial because it would cost in some cases five six seven eight billion dollars you've never heard of a tech company raising that much money except in a few rare cases in far in in biotech it just doesn't happen so you need the m a machine to be able to incentivize these young companies to even get started in the first place otherwise what literally happens is you have a whole host of diseases that just stagnate okay and instead what happens is a younger company can only raise money to go after smaller diseases which have smaller populations smaller Revenue potential smaller costs because the trial infrastructure is just less so if you don't want industry to be in this negative Loop where you only work on the small diseases and you actually go and tackle the big ones you need to allow these kinds of transactions to happen the last thing I'll say is that even when these big transactions happen half the time they turn out to still not work there is still huge risk so don't get caught up in the dollar size you have to understand the phase it's in and the best example of this is the biggest outcome in in biotech private investing in Silicon Valley was this thing called stem Centrics and that thing was a 10 billion dollar dud right but it allowed all these other companies to get started after semcentrics got bought for 10 billion freeberg I want to get your take on this especially in light of maybe something people don't understand which is the the amount of time you get to actually exclusively monetize a drug because my understanding you correct me if I'm wrong you get a 20-year patent it's from the date you file it but then you're working towards getting this drug approved by the FDA so by the time the FDA approves a drug this 20-year patent window how many years do you actually have exclusively to monetize that drug and then your wider thoughts on this FTA yeah I'm not going to answer that question right now because I do want to kind of push back on the point I'm generally pretty negative on a lot of the comments Lena Khan's made and her positioning and obviously as you guys know we've talked about it on the show but I read the FTC uh filing it's in um federal court and if you read the filing let me just start the company that Amgen is trying to buy it's called Horizon Therapeutics which is a company that's doing about 4 billion in Revenue a year about a billion to a billion and a half in ebitda so it's a it's a business that's got a portfolio of orphaned drugs meaning drugs that treat orphan conditions that aren't very big Blockbusters in the in the pharmaceutical drug context and so it's it's a nice portfolio of cast generating drugs Amgen buying the business gives them real Revenue really but uh and helps bolster portfolio that you know is aging and I think that's a big part of the Strategic driver for Amgen to make this massive 28 billion dollar acquisition the ftc's claim in the filing which I actually read and I was like this is actually a pretty good claim is that the way that Amgen sets the prices for their pharmaceutical drugs is they go to the insurance companies the payers and the health systems and they negotiate drug pricing and they often do bulk multi-product deals so they'll say hey we'll give you access to those products at this price point but we need you to pay this price point for this product and over time that drives price inflation it drives costs up and it also makes it difficult for new competitors to emerge because they tell the insurance company you have to pick our drug over other drugs in order to get this discounted price and so it's a big part of their negotiating strategy that they do with insurance companies so the ftc's claim is that by giving Amgen this large portfolio of drugs that they're buying from Horizon it's going to give them more negotiating leverage and the ability to do more of this drug blocking that they do with insurance companies and other payers in the drug system so they're trying to prevent pharmaceutical drug price inflation and they're trying to increase competition in their lawsuit so I felt like it was a fairly kind of compelling case I'm no lawyer on Anti-Trust and monopolistic practices and the Sherman Act but this was not sorry let me just say this was not an early stage biotech risky deal that they're trying to block a mature company with four billion in revenue and a billion and a half in ebitda I understand and yeah I read it too but two comments it is because the people that traffic in these stocks are the same ones that fund these early stage biotech companies and I talked to a bunch of them and they're like if these guys block this kind of deal we're going to get out of this game entirely so just from the horse's mouth what I'm telling you is you're going to see a Paul come over the early stage Venture financing landscape because a lot of these guys that are crossover investors that own a lot of these public biotech stocks that also fund the private stocks will change their risk posture if they can't make money that's just the nature of capitalism the second thing is Lena Khan did something really good about what you're talking about this week actually which is she actually went after the pbms and if you really care about drug inflation and you follow the dollars the real culprits around this are the pharmacy benefit managers and she actually launched a big investigation into them but this is what speaks to the two different approaches it seems that unfortunately for the FTC every merger just gets contested for the sake of it being contested because I think that if you wanted to actually stop price inflation there are totally different mechanisms because why didn't you just Sue all the pbms well there's no merger to be done but you can investigate and then you could regulate and I think that that's probably a more effective way and the fact that she targeted the PPM says that somebody in there actually understands where the price inflation is coming from but I don't think something like an Amgen Horizon because what I think will happen is all the folks will then just basically say well man if if these kinds of things can't get bought then why am I funding these other younger things yeah but you know yeah we're just not seeing a lot of the younger stuff get get get blocked I don't think we've seen any attempts at blocking speculative portfolio Acquisitions or speculative company Acquisitions so I think these guys are getting caught up in the dollar number you know yeah so I think the problem is they see 28 billion they're like we need to stop it you know what's amazing I'll just wrap on this because it's a good discussion but I think we got to keep moving here is I took the PDF that you shared and I put it into chat GPT now oh wow and you don't need to upload the PDF anymore you could just say summarize this and put the link and it did it instantly are using the browsing Plugin or I just used chat GP no it's not the browser plugin I just did this is the 3.5 model and it pulled the link in the GPT 3.5 model I don't know I could do that that's new they must have added browse me in the background yeah or just pulling it they did today by the way whoa they did it today yeah remember last week we said that they had to build browsing into the actual product like Bard right otherwise they're moving I gotta get it today yeah closed AI is on the top of their game the app is available in the App Store now right as of today no they they had a test app I was on the test flight no no no they just launched the app they did oh that's game over man if this thing is an app form that's going to 10x the number of users and it's going to 10x the amount of usage by the way I tested the same thing for Bard we should compare the two but amazing pretty good as well yeah yeah wow to actually compare its summary with chat GPT summary okay tell us which one's better some interesting news here you know we speaking of platform shifts do I get to get my view on the Lena con thing oh well yes I was getting a little personal here David and I didn't I didn't want to trigger you I know you've been struggling with the gout because of your lifestyle choices the alcohol the the foie gras everything but no you've lost a lot of way to give you a lot of credit tell us what do you think about the bundling we're seeing here because it does seem Microsoft asks with the operating system yeah it's very similar and what I said in the context of tech is that we should focus on the anti-competitive tactics and stop those rather than blocking all mergers and I think the same thing is happening on the Pharma space if bundling is the problem focus on bundling the problem when you just block M A is that you deny early investors one of the biggest ways that they can make a positive outcome and what's the downstream effect of that yeah exactly look it is hard enough to make money as either a former investor or as a VC that there's only two good outcomes right there's IPOs there's M A's everything else basically goes everything else is a zero it goes bankrupt so if you take M A off the table you really suppress the already challenge returns of venture capital yeah well said well said and you're right you mentioned earlier that we were willing to give Lena Khan a chance we thought that some of our ideas were really interesting because I think there are these huge tech companies that do need to be regulated these big Tech monopolies basically that you have the mobile operating system duopoly with Apple and Google and you've got Amazon you've got Microsoft and there is a huge risk of those companies uh preferring their own applications over Downstream applications or using these bundling tactics yes if you don't put some limits around that that creates I think an unhealthy Tech ecosystem this is the insight and I think it's exactly correct sex ferlina Khan I know she listens to the Pod hey Lena you want to go after tactics not Acquisitions so if somebody buys something and they lower prices and increases consumer Choice that's great if it encourages more people to invest more money into Innovation that's great but if the tactics are we're going to bundle these drugs together to keep some number of them artificially high or reduce choice or if we're going to bundle features into the you know Suite of products and we do anti-competitive stuff you have to look at the tactics on the field are people cheating and are they using the Monopoly power to force you to use their App Store just make apple have a second app store that's all we're asking you to do there should be an app store on iOS that doesn't charge any fees or charges one percent fees break the Monopoly on the App Store sax is so right perfectly said she actually did Issue compulsory orders to the pbms so to your point sax the FTC has been worried that what free Brook said had is been happening but the real sort of middlemen manipulator in this market are the pharmacy benefit managers and so this week she actually issued compulsory orders to the pbms and said turn over all your business records to me I'm going to look into them that makes a ton of sense but then on the same hand it's like you see merger and you're like no it can't happen it just doesn't speak to a knowledge of the market we should have Lena on hey Lena I know you listen to the Pod I've heard the back Channel just come on the Pod I should be a good guess right we would have a good conversation with everything yeah uh open invite Nikki Haley's coming on the Pod by the way you have homework to do for the summit which is to see if you can get Donald Trump to come to the summit okay huge love J Cal love all in okay because you your mannerisms are unbelievable how did you practice it I did I did a little bit only because I like to troll people and Trigger them I'm gonna really dial in my trump in the coming weeks all right here we go Apple's long anticipated AR headset that stands for augmented reality which means VR you can't see the real world you're just in uh in a virtual world AR lets you put digital assets on the real world so you can see what's happening in the real world but you can put Graphics all around that's expected to be revealed as early as June the projected cost is going to be around three thousand dollars it won't ship into the fall this is a break from Apple's typical way of releasing products which is to wait till it's perfect and to wait until all consumers can afford it this is a different approach they're going to give this out to developers early and Tim Cook is supposedly pushing this there was another group of people inside of Apple who did not want to release a jamaat but there is some sort of external battery pack it seems like a bit of a Franken product Frankenstein kind of project here that you know perhaps Steve Jobs wouldn't have wanted to release but he needs to get it out I think because Oculus is making so much progress the killer app supposedly is a FaceTime like live chat experience that seems interesting but they look like ski goggles on this as the next compute platform if they can get it you know to work would you wear these would they have to be Prada what's the story here no and no does this seem like a weird conversation because none of us [ __ ] know none of us have seen this product and none of us have used it we were lucky friend of the podpa lucky says it's incredible so what that's just like commenting on one guy's five letter five word tweets Palmer knows I mean Palmer invented Oculus great but what are we talking about we have nothing to say about it what do we know about okay I'll a form of a really good question here do you believe this is going to be a meaningful compute platform in the coming years because apple is so good at product how do we know until we see it we gotta see it of course they're of course they're good at product let's let's see the product though like all right fine sax what are your thoughts I think it's a good thing that they're launching this like you said it is a deviation for what they've normally done they normally don't release a product unless they believe the entire world can use it so their approach has been only to release mass mass market products and have a very small portfolio of those products but when those products work they're you know billion user home runs this obviously can't be at a three thousand dollar price point and it also seems like it's a little bit of a early prototype where the batteries are like in a fanny pack around your waist and there's a ways to go around this but I I give them credit for launching what is probably going to be more of an early prototype so they could start iterating on it I mean the reality is the Apple watch the first version kind of sucked and first five versions yeah now they're on one that's pretty good I think so look I think this is a cool new platform they get knocked on for not innovating enough I think good let them try something new I think this will be good for meta to have some competition yeah it's great having two major players in the race maybe it actually speeds up the Innovation or maybe we get somewhere down here I mean I I think they should have done something in cars what should they do in cars if you were going to talk about the car what would it be tell me what you think would be the right approach you you were going to do the Facebook phone that could have changed the entire Destiny of Facebook they should have bought Tesla when they could have the chance for four or five billion they could have bought it for 10 billion 20 billion it's only when it got to 50 60 that it got Out Of Reach what do you think the car should be they could have bought it at 100 billion they could have bought 100 billion Tim Cook famously wouldn't take the meeting Elon said it he wouldn't he wouldn't be bizarre bizarre maybe they missed an opportunity there but I do think the end game with the AR headsetter glasses right yes where you get the screens and you get the Terminator mode and in con is that what is that these are just glasses acting like they were like fancy technology this this size glasses is what you're talking about yeah when you have like a little camera built in and heads-up construction with AI then it gets really interesting so that that's the end game here I think give the audience an example of what this combination of AI plus AR could do when you're walking around it could layer on intelligence about the world you meet with somebody and it can remind you of their name and the last time you met with them and give you a summary of what you talked about what action items there are you could be walking in a city and it could tell you it knows you like Peking dock it could show you hey there's a peking dog place over here some reviews of it it just knows you and it's customized in the world what about for people that do the same routine 99 of the time how does it gonna help you though it could tell you your steps every day could tell you incoming messages so you don't have to take yourself three thousand dollars on that no but you would spend people spending three years to get your notifications on your wrists why do you want it on your eyes for three thousand I would love this maybe I just do like a lot of meetings or I'm at events where people are coming up to me and I've met them like once a year before like it would be really helpful to kind of have the terminal let's be honest though the Terminator mode for you to be able to be present with your family and friends but be playing chess with Peter TL on those glasses that's your dream come true you and Peter in AR playing chess all day long throw up the picture of sax beating Peter Thiel I watched the clip from the earlier all in episodes when we discussed you beating Peter Thiel what a great moment it was for you all right listen let's wrap up with this Gallup survey the number of Americans who say it's a good time to buy a house has never been lower 21 say it's a good time to buy a house down nine percent from the prior low of a year ago prior to 2022 50 or more consistently though it was a good time to buy significantly significantly fewer expect local housing prices to increase in the year hey uh Sachs is this like a predictive of a bottom and pure capitulation and then that means maybe it is in fact a good time how would you read this data I don't see it as a bottom necessarily the way I read the data is that the spike in interest rates have made it very unaffordable to buy a house right now you've got you know the mortgages are what like seven percent interest rate or even slightly higher so people just can't afford the same level of house that they did before I mean mortgages were at three three and a half percent like a year and a half ago now I think what's kind of interesting is that even in the 1980s the early 1980s when interest rates were at like 15 you still had 50 thought it was an okay time to buy a house or an attractive time to buy a house so for the number to be this low tells me that it's not just about interest rates I think consumer confidence is also plummeting and people are feeling more insecure so I think it's just another economic indicator that things are looking really shaky right now and I'll tell you one of the the knock-on effects of this is going to be that people can't move because in order to move you have to sell your current house and then buy a new one and you're not going to want to sell your current house when prices are going down and then for the new one you're going to lose your three percent mortgage enough to get a new one at seven percent so you're not going to buy anything like the house so it freezes the market it freezes Mobility I think over the last few years during covid you saw tremendous movement between states I think that's going to slow down a lot now because people just can't afford to trade houses so as a result of that I think discontent is going to rise because I think one of the ways that you create a pressure valve is when people are unhappy in a state they just move somewhere else well now they're not able to do that well and you can also move to a better opportunity for you and your family whether that schools taxes a job lifestyle so yeah you can you can you're going to reduce joy in the country and it also it screws with price Discovery doesn't it if you if you don't have a fluid Market here then how does anybody know what their house is worth and then this just again creates more I think of a frost I think Friedberg has said this a couple times freeberg you can correct me if I'm wrong but like the the home is like the disproportionate majority of most Americans wealth right mm-hmm it's all their wealth all their wealth yeah so I mean there's that factoid yeah and then what does that do foreign what's going on they're bringing you lunch no I was looking I was looking at uh mansion that's for sale 175 million dollars but they just got the price to 140 so I'm just taking a little again I mean there's gonna be a lot of distress in the market soon I'm predicting a lot of distress actually can we shift to the commercial side for a second I just passed away yeah Sam Zell passed away today oh wow rest in peace yeah rest in peace uh Chicago uh um yeah crazy but speaking of bombastic interesting guy yeah but speaking of the real estate market so I want to give an update on San Francisco cre I was talking to a broker the other day and so here are the stats that they gave me so it was a local broker and someone from Blackstone and they're fans of the Pod and just came up to me and we started talking about what's happening in San Francisco shout out shout out to them didn't take a didn't take a photo but but any event they're they're fans of the pot of so we start talking about what's happening in San Francisco real estate so the SF office Market is just a level set is 90 million square feet they said the vacancy rate is now 35 so that's over 30 million square feet vacant and vacancy still growing as Lisa's end and companies shed space because some of that space that they're not using is not up for sublease everyone says what about AI is AI going to be the Savior the problem is that AI companies are only that's only about a million square feet of demand so one million out of 30 million is going to be absorbed by Ai and you know maybe that number grows over time over the next five ten years as we create some really big AI companies but it's just not going to bail out San Francisco right now the other thing is that you know VC backed startups are very demanding in terms of their tenant improvements and landlords don't really have the capital right now to put that into the buildings and storms just are not the kind of credit worthy tenants that landlords really want so this is not going to bail anybody out there they said there are a ton of zombie office Towers especially in Soma and all these office towers are eventually going to be owned by the Banks which you have to liquidate them and then we're going to find out that these loans that they made are gonna have to be written off because the collateral that they thought was Blue Chip that was backing up those loans is not so blue chip anymore so I think we've got not just a huge commercial real estate problem but it's going to be a big banking problem as basically people stop pretending you know right now they're trying to restructure loans it's called pretend and extend you reduce the rate on the loan but add term to it but that only works for so long if this keeps going if the market keeps looking like this I think we're gonna have a real problem and and that will be a problem in the banking system now San Francisco is the worst of the worst but they said that New York is similar and all these other big cities with empty office towers are directionally I'm in New York right now for the side connections conference and uh it is packed the city is packed getting anywhere there's gridlock you can't walk down the street you got to walk around people every restaurant it is dynamic and then I talk to people about offices and they said people are staying in their houses in their tiny little New York apartments instead of going three train stops to their office they go to the office one or two days a week unless you're like JP Morgan or some other places that's that Drop the Boom but there's a lot of people still working from home the finance people have all gone back media people are starting to go back so there are three to five days here and the city is booming contrast that I spent the last two weeks in San Francisco walking from Soma to the Embarcadero back dead nobody in the city it like literally a ghost town it's a real shame it's a real real shame I wonder if these this is the question I have for you sacks can they cut a deal can they go to like month to month rent sublets you know loosey-goosey just give people any dollar amount to convince them to come back is there any dollar amount because I'm looking for a space for the incubator in San Mateo I've been getting a ton of inbound but the prices are still really high and I'm like how do I cut a deal here because shouldn't people be lowering the prices dramatically or are they all just pretending or will I get a lower Ritz or definitely coming down big time especially for space that sort of commodity and not that desirable but what's happening is according to the people I talk to is that the demand the people who actually are looking for new space they only want to be in the best areas and they want to be in the newest buildings that have the best amenities and so uh that sort of commodity office tower where there's barely anybody ever there like no one wants that um people would rather pay a higher rent I mean the rent will still be much lower probably half the price of what it used to be but they'd rather pay a little bit more for that than get like a zombie office tower we can't talk about all this without talking about two cases tragically a shoplifter a criminal who was stealing from a drugstore in San Francisco I got shot and the video was released I'm sure you've seen in sacks and then here in New York everybody's talking about this one instance of a Marine trying to subdue a violent homeless person with two other people and it's on everybody's Minds here and Brooke Jenkins is not Prosecuting in San Francisco the shooter they look like you know a clean shoot as they would say in the police business an appropriate and it's tragic to say it is but the person did charge the security guard the security guard did fear for their life and shot him so Brook Jenkins is not going to pursue anything but in New York City they're pursuing manslaughter for the person who did seem a bit excessive from the video it's hard to tell what the reality is in these situations any thoughts on it David these two cases in Two Cities yeah look I mean the only time you can get a source da excited about Prosecuting someone is when they act in self-defense or defensive others I mean this Marine I guess Daniel penny is his name he was acting in defense of others the person who he stopped was someone with an extensive criminal record who had just recently engaged in a attempted kidnapping who had punched elderly people had pretty gnarly dozens of arrests in fact people on Reddit were talking about how dangerous this person was apparently a dozen years ago or so he was seen as more of like a quirky like Michael Jackson impersonator street performer street performer but something happened this is according to a Reddit post that I saw where something happened and there was some sort of psychological break and then since then he's had dozens and dozens of primes and they just keep letting him loose through this revolving door of a justice system we have and now look no one likes to see him basically dying and yeah it's too bad it's horrible that that happened tragic I don't know though that if you're trying to stop someone I don't know how easy it is to precisely control whether you use too much force or not so I think Daniel penny has a strong case that he was acting in self-defense and defense of others and there were two other people by the way who were holding this person down there were three of them restraining him and what universally New Yorker said to me of all different backgrounds was this is not a race issue the other I think one or two of the other people were people of color it was not a race issue and they're trying to make it into a race issue in both these cases and it's this is literally what happens it's just having been through this in New York in the 70s and 80s when you do so who's they who's they when you say trying to make it a bunch of protests on the street both in San Francisco and New York people protesting these as you know justice issues the fact is if you do not if you allow lawlessness for too long a period of time you get a Bernie gets situation and Bernie gets people can look it up in the 80s I was a kid when it happened but they tried to mug somebody he had a gun he shot him and like this is what happens if you allow lawlessness for extended periods of time it's just you're basically gambling and what happened to Bernie Getz he got knocked guilty the case he got not guilty but I think he had an illegal gun so he was guilty of that the Bernie gets thing was really um crazy because at the time the climate in New York in this 1984 shooting there was a portion of people who I don't want to say they made him a hero but they made it a c this is what happens if you allow us to be assaulted forever we're going to fight back at some point that was the vibe in New York when I was a child that was 14 15 years old when this happened he was charged with attempted murder assault what was the name of that vigilante group that used to walk the streets to something angels that was the um Guardian Angels Guardian Angels so it was so bad in the 80s and I actually almost signed up for the guardian angels I went to their headquarters because I was practicing martial arts and I thought I would check it out and um they had their office in Hell's Kitchen I didn't wind up joining but what they would do is they would just ride the subway they would wear a certain type of hat and wear a guardian angel shirt and all they did was arrested the Subways a red beret and they would just ride the subways and you felt kind of martial arts were you taking Taekwondo I was in Taekwondo yeah this is before a mixed martial arts but they just rode the Subways and honestly I've been on the Subways with them many times you felt safe and it wasn't Vigilantes they were garden angels they used that term and many times they would do exactly what this Marine did which is try to subdue somebody who was committing crime I was I had two distinct instances where people tried to mug me you know riding the Subways in New York in the 80s two distinct times and one was a group of people and one was one person like it was pretty scary both times I navigated it but it was yeah not pleasant in the 80s in New York can I say one more thing about this Daniel Penny Jordan Neely case so look at the end of the day this is going to be litigated I don't know all the details they're gonna have to litigate whether Daniel Penny's use of force was was excessive or not but but here's the thing is that the media has been falsely representing Jordan Neely by only posting 10 year old photos of him and leaving out crucial information this was a press report so again this is why I mentioned the whole Michael Jackson impersonator thing is that the media keeps portraying nearly as this innocent harmless guy who is this like delightful Michael Jackson impersonator in truth he hasn't done that in more than a decade because again he had some sort of mental break and since then he's been arrested over 40 times including for attempting to kidnap a seven-year-old child and so the media is not portraying this case I think in an accurate way and I think as a result of that it leads to pressure on the D.A to prosecute someone who has I think a strong self-defense claim or you know maybe the D.A just wants to do this anyway and it gives the D.A cover to do this Soros is I mean I know that we have this back and forth with this why is CNN being inaccurate do you think sucks they're basically cooperating with Alvin Bragg's interpretation of the case and they're trying to make the case against penny look as damning as possible yeah why don't they just take it straight down the middle it's a tragedy we have a screwed up situation here we got a mental health crisis and it's a tragedy for everybody involved on the Bernie get stuff he served eight of a 12 month sentence for the firearm charge and he had a massive 43 million dollar civil uh judgment against him in 1996 decade later it's just this is a little different than the the Getz thing because pulling out a gun and shooting somebody well yeah no that's deadly intent yeah yeah that's that's the congratulations Penny he's a he's a trained Marine right he's trying to immobilize him he has to believe that he he's just trying to subdue yes Neely and so using a Chokehold to kill him that's an unfortunate consequence of what happened but he was trying to restrain the guy as far as we know right as far as we know yeah I mean tragedies all around we got to have Law and Order I I tweeted like I don't know why we still have the post office maybe we can make that like once a week and redo all of that space and allow every American who's suffering from mental illness to check in to what used to be the post office you know maybe like once a week and obviously you can give those people very gentle Landings but I don't think we need Postal Service more than once or twice a week and then let you know let's reallocate some money towards mental health in this country where anybody who's sick who feels like they're violent or feels like they're suicidal can just go into a publicly provided facility and say I'm a sick person please help me this would solve a lot of problems in society we've got a mental health crisis we should provide Mental Health Services to all Americans and it's a obviously easy thing for us to afford to do and if we had done that then this never would have happened exactly I mean literally you have sacks who wants to balance the budget saying hey this is something we're spending on we can all agree on this compared to the impact on society I don't think it would be a huge expense we would save money we'd save money because a city like San Francisco could become quite livable or New York if and then if God forbid these terrible school shootings you know if you avoid even one of them it's 30 people's lives or 10 people's lives convert post offices what we need to do is stand up scaled shelters and it doesn't need to be done on the most expensive land in a given city outside of cities there is no expectation in Europe for like Paris or London to be affordable or Hong Kong to be affordable there are affordable places 30 minutes outside of those places where you could put these facilities I just want to ask one question to sax because I don't know and I know Saks is a little bit deeper into the center what is George soros's motivation for putting in these Lawless insane DA's like I understand that he was able to buy them they're low cost there's not a lot of money in them okay I understand that that's table Stakes but what is his actual motivation for causing chaos in cities listen we can't know exactly what his motivation is but what he did is he went into cities where he doesn't live and flooded The Zone with money to get his preferred candidate elected his D.A now the reason he did that was to change the law and the way that he changed the law was not through legislatures the way you're supposed to operate but rather by abusing prosecutorial discretion so in other words once he gets his Soros D.A elected they can change the law by deciding what to prosecute and what not to prosecute right and that's why there is so much lawlessness in these cities but that there's a better path you're saying yeah this is not the only way that Soros has I'd say imposed his values on cities that he doesn't live in where does he live I think he's a New York guy but I'm not sure but but he's gone far beyond that obviously in these elections but also he's done this across the world Soros has this thing called the open societies Foundation which sounds like it's spreading democracy and liberal values but in fact is fermenting regime change all over the world and he's been sponsoring and funding color revolutions all over the world now if you like some of the values he's spreading then maybe you think that's a good thing but I can tell you that the way this is perceived by all these countries all over the world is it creates tremendous dissension and conflict and then they look at America and they basically say you know this American billionaire is coming into our country and he's funding regime change and it makes America look bad now he's doing this I think with the cooperation of our state department a lot of cases and maybe the CIA I don't know but this is why America frankly has hated all over the world as we go running around meddling in the in the internal affairs of all these countries too is this guy all there like that was the other thing I heard is that he's not all there and the people around him are doing these kind of things in his organizations I heard something similar is that it's the idiot son Alexander who's really now pulling the strings would you would you allow source to speak at all in Summit would you interview yeah sure yeah let's have Sorrows or a son and they could explain themselves if they're so proud apparently there is an article that Alexander Soros has visited the White House like two dozen times during the Biden presidency this is an extremely powerful and connected person I mean I'm sure he listens to pod okay we'll see you all next time this is episode one two nine of all in we'll see you on episode 130 bye bye we love you bye-bye to let your winners ride Rain Man [Music] we open source it to the fans and they've just gone crazy with it [Music] besties [Music] release [Music] [Music]








look at John Quincy Adams here yeah hey hey Quincy how you doing that hair look look at that hair John Quincy Adams needed a wig to achieve this look he did he did I did it all natural I mean it's a lot it's a it's a look you're like some movie star from the 1970s you're still working do me a favor pull up a picture of Grayden Carter for a second and then put that side by side with sax let's see just say I zoom in on that facts this is where you're headed by the way you're headed to Crazy Town this is where you're headed you can just poof it out on the sides and you get a little woof swoop on the top this is where you're headed eccentric Stacks pull up a picture of Steve bannon's hair he's a wise Statesman I think this is what happens when you get too close to power you get more eccentric with your hair so like too much power equals crazy hair now look this is my theory great and Carter too much power Vanity Fair he went hair crazy now you look at Bannon you get me a Bannon photo here you start to see they go longer they go wafty they just they get volume and they're just like [ __ ] it I'm just I'm not gonna cut it I'm gonna let it go wild and of course the the old I mean he's the penultimate but you look at Trump's hair this is where it gets truly crazy this is where you're headed sax you keep getting this close to power this is where your hair is headed I'm so glad this podcast never broke up because where would we get this amazing Insight from jaycal if not for keeping this all together this makes it all worth it it's very true it is true you get like eccentric and you get crazy hair this is men get too close to power and the hair gets wild unchecked Power unchecked hair we had a good meeting last night we had an all-in-summit meeting let's see Freeburg give me a call let's catch up on this stuff he's like oh I'm in the bath right now with my candles and I'm like yeah okay whatever that's cool he's like no no and he presses the video button and then I'm exposed I kid you not to the most bubbles I've ever seen in a bubble bath I like bubbles and he is peeking his head out from Over the bubbles and he's like look which exactly and then he flips he flips the camera around and I got his toes pointing out and I kid you not there's six candles around the bathtub I'm like this is like the prince of panic attacks he had to come down for his phone call with me so now when he has a phone call with me it's so intense and everything's getting so intense with the summit that he has to do self-care yeah that could be emotional emotionally ready he's self-caring your wife wasn't anywhere to be found in the bathtub with the candles I take a bath every night who are you Romancing yourself or what yeah I think he was romantic the spreadsheet with the prophet life of all in Summit I have about 18 minutes of self-care every day 18 seconds a minute all right let's get the show started in three two let your winners [Music] we open source it to the fans and they've just gone crazy [Music] hey everybody Welcome to episode 130 maybe of the all in podcast we're still here cooking with oil with me of course the dictator himself chamath Pali hopatia Prince of panic attack Sultan of science the queen of quinoa David Friedberg and the power broker himself the emperor the Emperor of his new Republic anybody have any interest anything going on interesting this week any interesting moments for people on the national stage no okay well let's get right into the docket first around the docket Ron DeSantis Governor Ron DeSantis announced his bid on the internet yeah on something called Twitter spaces and it looks like almost 10 million viewers have seen it so far across all the different spaces and Donald Trump wasn't too pleased he said Rob my big red button is bigger better stronger and it's working truth because when Elon fired up the Twitter spaces it went to 650 000 viewers in under five minutes and then blew up everybody's phones my phone was melting I could have cooked an egg on the back of it the Twitter app crashed so many times but then sax with his meager following of a half million people or something then restarted the stream and so 15 minutes of technical snafus were relieved and then there was a announcement and I'll let you take it from their sex you want me to take you behind the scenes I guess behind the scenes how did it come together sex oh yeah even better yeah the way it came together is I think the DeSantis team were interested in potentially you know doing something different for their announcement he also did an appearance on Fox News afterwards and I think he did a town hall but I think they saw an opportunity to break new ground here in terms of presidential announcements by doing it on Twitter spaces and so the DeSantis campaign connected with Twitter and Elon and I agreed to kind of co-host the space and with him and he did his announcement now you're right we had about 15 minutes of technical difficulties because the interest was so intense at the time the the room crashed it had over 700 000 people in it and there were it crashed because so many people were trying to get in it I think there was well over a million people trying to get in it so you normally don't have this kind of Interest I think this is by far the biggest Twitter space the engineers there told me that the previous order of magnitude was more like a hundred thousand not a million and then you combine that with the fact that elon's account has over 100 million followers and that basically led to a new level of scale and you guys understand that when you get to a new level of scale as a platform there's always going to be some yeah some challenges so hey event the engineers were there trying to figure out how do we you know solve this and we realized the simplest thing to do would be to restart the room on my account instead of elon's and then Elon joins the co-host and we brought to Santa sin and it all worked perfectly at that point the audio was pressed we had over 300 000 people in the room there was also another room that had been set up by Mario nawal who's like a big Twitter spaces host and he had hundreds of thousands of people on there and then he had live commentary from people he invited and so this ability to Fork Twitter spaces into many different rooms and each room gets to decide who they want to be their hosts and their speakers allows you to do live commentary and in a way that you could never have done before so it was really Innovative I think super Innovative and for people who don't know Twitter spaces was really a rushed job at Twitter they did that in reaction to clubhouse they it's it's still basically a beta product that predates Elon being there and it doesn't have yet the infrastructure or scale of the code base I don't think like YouTube and twitch do which you know have been working on this problem for I don't know 15 years maybe the live products observations yeah go ahead the first is I thought DeSantis did a really good job just rolling with the punches okay because I think whether he wins you're not going to look back on this moment as the defining moment of the campaign nor whether he loses will you say that this was where it was it all the beginning of the end instead what this was was a really seminal moment I think in further divorcing ourselves away from the mainstream media and you know that it was that important because Biden tried to troll the whole thing Nick you can show this link this link works and I actually think this is a really terrible idea by the Biden team because never this basically acknowledges how important the moment was and the fact that even the president of the United States was grinding the link and couldn't get in because there was so much interest is really important and I think what it speaks to is the fact that we are now showing credibly that you don't need to listen to four channels to shape your Consciousness and you can just go straight to the source and what Zach said is right if you now have a moderated forum that then gets put out to 50 or 60 different Twitter spaces all at the same time Framing and reframing it gives people a chance to come to their own conclusion in a totally unique way so I think it was really really an important moment for citizen journalism and podcasting and audio formats and all of the things that I think we've been a small part of but I think that it's really must have tilted the mainstream media and it tilted The Establishment and you can see that in Biden's tweet yeah I'm going direct yeah so that was the first thing second thing I think DeSantis did a really decent job enrolling with the whole thing and being super cool and just being committed to the process and I think that says a lot about him as well which was again it's a question mark and I've said this before the Big Money guys got close and then took a step back so this could be a very good moment for them to reevaluate because I thought he did a very good job so I agree so you know I was there I was live I was seeing what was happening behind the scenes when DeSantis came on after we you know had 15 minutes of technical difficulties there wasn't a hint of anger there wasn't a trace of irritation there wasn't any freaking out that we were potentially ruining his presidential announcement the guy was completely calm and more than that he was in good spirits I mean if you listen to the recording you know he's happy he's tone was great his tone was really good I mean and then of course it was very substantive he spoke in a very articulate way about all the issues uh when Congressman Thomas Massey came on to make a a commenter question he was telling a kind of amusing anecdote about when they were in Congress together and Massey was one of the only members of Congress who uh had a Tesla but he comes from Kentucky so I think his license plate said Kentucky coal on it KY Cole so anyway you know the guy was in good spirits and so I think it does say a lot about what he would be like as a president cool Under Fire doesn't get thrown off his game you know again not an angry guy you know which I think will be a real contrast with let's say some of the other people in the race you know Trump was sort of angrily truthing during the whole thing you know so I think it was a pretty strong improving the act of posting to truth social exactly so the contrast between the personalities could not have been stronger now to the other point the charmath about the traditional media you're right about what they're saying if you look at that the headlines this morning from traditional media Outlets that really started within minutes of the the technical difficulties the New York Times called the announcement of fiasco NBC News called it a meltdown Politico called it horrendous and you know why I mean if you you know what I call that winning I mean if they are losing their cool that's clearly they feel threatened by the fact that a major presidential candidate chose to go directly journal the Wall Street Journal headline is DeSantis looks to rebound after botch Twitter announcement but again what they failed to acknowledge is and I'm not a DeSantis supporter per se I'm open-minded to him but I haven't decided one way or the other but this is a guy that managed to get millions of people in a nanosecond to be activated to hear what he had to say that is different than basically giving talking points and having surrogates blather through fox or CNBC or CNN to hundreds of thousands of people this is a really important moment I think what happened okay we got all the positive just to finish that point so if this was a political rally a traditional political rally that had started 20 minutes late would anybody have said that was a disaster that happens all the time no it was the crashing that made people be like oh my phone crashed you know I was using the app I got crashed out of the app but I my phone did not crash so no yeah that's what I'm saying the app crashed a couple of times because yeah your phone did not crash yeah but anyway look this was at the end of the day this was a an event that started 20 minutes late once we started it on my Twitter account in my Twitter space it worked perfectly there was no problem and that's the recording that you can go on Twitter now and listen to we had about 300 000 people contemporaneously in my Twitter space I think Mario had a couple hundred thousand but if you look at the numbers today there's already 10 million views for this thing three to ten million on the replay and that's what you have to look is replay because the world has moved to asynchronous like this was three o'clock in the afternoon in Silicon Valley and six o'clock in the afternoon in the afternoon so you have a Hysterical overreaction by the traditional media simply don't like a that Elon is disremediating them by letting the politicians go direct and then B he's restored the platform being a free speech platform so they jumped on this the first second they could to try and portray as a disaster but you know there was an article in political this this morning and they were asking voters in Iowa what they think about it and they're like huh what you know it's not it's an elite thing that's not yeah it's not even on the radar Freeburg we heard all the positive here any the constructive feedback on it or thoughts on it generally now look I mean I would love to see all the political candidates engage in long-form discussion like this so that an audience can really get a sense of who they are and what they think in a direct way and uninterrupted way and in a deeper way sort of like the conversation we all had with RFK last week and Zach did with DeSantis yesterday and I would love for the voters who engage in that content to better understand the candidates rather than key off of short talking points and short ads I think one of the saddest commentaries on Modern democracy is that you can spend a dollar to buy a vote that all of these campaigns functionally try and raise Capital to go and do advertising and that the advertising creates these little 30-second sound bites that actually change people's opinions and it's a really sad it will they otherwise they wouldn't spend the money and I think it's a really sad State of Affairs that we spend money to change people's opinions by shortening everything to a sound bite instead of doing what maybe would have happened a long time ago you know we often talk about the Town Square if you lived in a village with 60 people and someone was going to run for the mayor of that Village you'd all go to the Town Square you'd hear that person have a debate have a discussion you talk with them and that dialogue would inform your decision about who you're going to vote for but you know with 300 million people in this country and you know short attention spans and jumping around from one thing to another there aren't a lot of great forums for any of us to really engage with candidates particularly on the national level and make a better informed decision hearing from that person directly instead everything is about driving narrative and chopping things up and getting the sound bite and driving the emotional reaction and I think one of the the greatest things that's happening right now that you know could be a great benefit for this modern democracy is the sort of stuff that we've been doing on our podcast and RFK coming on board like last week and what sax did with Twitter and I really hope that more politicians do that and that more people engage and consume that sort of content to make their decision and ignore the idiotic sound bites and the stupid 30-second ads and the nonsense that you know third parties use to try and drive narrative so yeah look I mean I think that's generally the positive trend that that I took away from it Jacob what do you think I have some notes for sacks I'm always you know careful not to be too critical you know in the moment because I don't people will weaponize them as oh Jason said this because you know it's Elon and he's team Elon or he's friends with sax but I think everything said so far just tweak the media a great start the thing that I think was there were probably one or two misses here that I think you can build on sax since you were very involved in the campaign with DeSantis I think it wasn't the free-for-all that Elon had said it would have been right so he pitched it as like hey this is going to be uncensored and everybody's gonna get to ask hard questions and that didn't happen and you know I think that is in stark contrast to what Trump did because I was doing the media analysis of this and so I think the follow-up needs to be where he actually takes questions not from fans not from people who are already voting for him but really you know a little bit more of the cantankerous people the people who maybe are voting for Trump the people who are maybe in the Biden camp and that's what was the master stroke of Trump's CNN Town Hall he went into the you know the Lions Den or what most people perceived was going to be the Lions then and he took on all comers he fought hard and that one was I think a bigger win I don't think DeSantis that was not a presidential announcement so just to be clear yes this was a launch event declaring that he's running so in that context yeah so you want to compare it to what these things usually are which is a guy standing at a Podium yes in front of his supporters compared to that this was much more interesting Dynamic and engaging I agree with you that at some point he's going to step into the lion's den do a town hall on a place like CNN and I think he probably will in fact I think he did yeah I think he did a town hall we're here I think he actually did a town all in Florida later that night so yeah I agree with you it just wasn't that kind of event now to the point about involving more people you know one of the things I learned hosting this thing is there were literally thousands of people raising their hands yes you can't store I was scrolling through this in real time in the app I wanted to call them more people but it was just there was no way to do it this is something at scale they need to add to the interface which is maybe pre-populating a list sorting it by the number of followers whatever and this is my second point about this so I agree with you as an announcement this was Lightspeed ahead as like a full court you know like sharp elbow thing it didn't hit that note but it can that's what I think the follow-up you know having if DeSantis wants to come here and have like a two-hour discussion we kind of get into it a little more that would be I think really good for him because I think he's got the potential to win over moderates and I don't think this one over moderates didn't win over anybody who was in you know the left or in the you know moderate left and that was one of the things I noticed is my second point about it is what a great group of listeners if you look at who showed up to listen Bill Ackman Michael Dell no you Source by your followers so but I think it sorted by the number of uh followers they have it's certainly by your followers who then have the most followers so you're gonna see it's a bit of a echo chamber that way okay okay sure but they were still very prominent people in them because prominent people follow you okay but they weren't coming to follow me they were coming to listen to this my point is still the same Bill Ackman were coming so but that's why you saw them because they're your followers I we all understand that they still showed up for this in the middle of the day I think that is really interesting and that yeah yeah yeah that's yeah that's what my point is it's really interesting that powerful people showed up for it full stop sucks I have a question for you sorry Jason whenever you're done oh yeah and then I just had a couple of other ones Elon was a bit underutilized in this format and that's you know a challenge when you have Elon in the room because people want to ask Elon questions so this is something I think he's going to have to you know contend with people wanted to hear Elon asked questions than the people who are were asking the questions wanted to ask you a long question so you do get like a little bit of how to utilize Elon in this format I heard a lot of back channel from important people like I wanted to Elon ask a question or maybe the two of them get into it so for a follow-up one getting some people you know who maybe don't traditionally get to ask questions because let's face it in traditional media the only people get to ask questions are these anchors on news channels I want to hear Michael Dowell or Bill Ackman ask a question that's the opportunity in Twitter spaces maybe letting Elon ask a tough question then a follow-up or you know like we did here with RFK I would have been totally open to that I just couldn't manage it there was just so many people in the room I didn't see Ackman actually I mean I totally believe he was there but I didn't see it the only criticism people had of use access you're a major donor and you stack the deck was the most cynical version of it with like five people who were just super effusive but this is his launch party so I think in that context I would have called on Bill Ackman if I'd known he wanted to speak but I couldn't see whether he raised his hand or not no I didn't see him in the room so what am I supposed to do call on Bill Ackman and he's like uh guys I don't want to talk I don't want to put him in that spot can we get him on this pod so we can Grill them about fortune and fiscal policy who Bill Ackman I don't know look I don't speak for the campaign but I can put in the requests you put 150 dimes in get them on hold on can you can you tell us the actual Tick Tock of how this whole thing came to be the campaign within the last week or two had the idea of should we explore doing it on Twitter spaces and I think they were open to doing it and sax didn't know about it when I put it in our group chat Zach was like he is yeah you found out about it okay all right I thought you didn't good no sometimes Elon will just tweet something without telling anybody or to just go directly no I mean I I help look the the census people reached out to Elon and Twitter they also reached out to me about it and we discussed it and they were excited breaking the ground he's something different and I think they deserve credit for that can I ask a follow-up question just on the DeSantis thing himself because you've seen him up close do you know why Schwartzman Griffin Peter fry stepped in took a half step back and do you know what it's going to take for them to just lean in and just make this effect to complete so that he's really well financed to be Trump I don't know what their issues are but I did see I I don't know this what's his name Peter fry or whatever yeah yeah I don't I don't know him but I did see a press article and he was referencing book Bannings so that to me just showed that he was buying into some you know crazy left-wing kind of narrative that was the best part of that I asked this answer about that so by the way for people by the way that was the one thing that was new news uh for a lot of people was the book Banning can you explain the issue and the spin and the clarification on book Banning in Florida it's very simple they haven't banned any books in Florida but the question is what books are taught in the curriculum and what's in the school library and some of these books were positively pornographic I mean they had someone DeSantis have an event where somebody was actually reading what was in these books and the mere reading of what was in the books actually got labeled on social media by the algorithms so there was a lot of stuff that's just not appropriate for kids no one is restricting your ability to buy or read whatever books you want in the State of Florida is ridiculous there's a legitimate question about what's in the curriculum by the way I remember when we had debates on campus about this is back a long time ago like the late 80s early 90s when they were throwing dead white males out of the curriculum you know Plato Aristotle Shakespeare people like that the people on the right who were opposing that never made the argument that this was censorship everybody understands that when you're dealing with a curriculum you have to make choices you can't teach everything so the question is what are you going to limit it to God I think that when people actually dug into some of these books they realized that they're not appropriate so any of that his answer was along those lines that you know you should go listen to it for yourself but I think that he did address that issue I think he's kind of exposed it as a you know left-wing media narrative and I think he deconstructed it and I think that was helpful because I think there are a lot of centrists who all they've heard about DeSantis is that he's Banning books or you know or the Disney issue which we also asked them about and you recovered that I think so um yeah the yeah we talked about some of these controversies the issue here just to summarize it is the left is framing the Banning quote unquote but just the not inclusion of certain books which are graphic that have sex in them from certain age groups in schools as part of a curriculum so they're saying these books are banned in Florida the more accurate way to say it is these books are not being used in curriculum you know for these age groups parents if they want to buy them can buy them and then can read them so this is where this conversation is kind of breaking down and I think is a complete waste of time all parents want control over at what age or what stuff their kids are exposed to and so there is a thoughtful discussion to be had there and maybe the discussion is this is something your parents should decide right well yeah of course but it's not even a conversation it's a hoax it's a it's a fake media narrative they're trying to pin on him and DeSantis has been the the subject and victim of these types of fake median narratives which are deliberate the media's not trying to have a conversation they're trying to disqualify the guy and they did this this goes all the way back to covid when he opposed lockdowns and kept schools open and they called him death santis so the media has had it in it for this guy since the beginning because he refuses to go along with their narratives on things this is the same reason that he hate Elon is Elon is defying their narrative control so you put you put these two guys together okay hold on even before the technical difficult let's be clear the media's heads were exploding that DeSantis and Elon were going to be in the room together look at the Vanity Fair article the headline was DeSantis announcing with Elon because David Duke wasn't available okay the Atlantic was saying that this whole uh Twitter space was a hate group I mean literally so these people were losing their minds before we even got into the technical difficulties and then they pounced on that that there was a 20-minute delay they pounced on that as some sort of fiasco which it wasn't will DeSantis cut spending and cut our taxes well we cut spending we didn't get into that so have you ever had a conversation with him about balancing the budget and federal debt do you know his position on cutting like uh long-term capital gains and taxes let me give you the elevator pitch I mean the nutshell for DeSantis is he calls it the Florida blueprint he's saying look at what we've done in Florida look at what we've achieved at Florida let's take Florida Nationwide Florida has had a great economy Florida Tax budget zero time because I don't that's a state that's because if you have zero talks you have my book oh the dictator has spoken if people want to look up this issue there's a book called genderqueer and there's a story about it in the New York Times and it's um you know it's a graphic novel about coming of age for a non-binary person which is fine great but it's it's very graphic it's a graphic graphic novel it has explicit scenes and these kind of books most parents would say I would like to wait on cutting my taxes to zero okay there you go it's called uh just to write it come on guys overall great job and yeah get him on the Pod here and we'll have a great discussion with him yes great job great job please invite him to to our paw to I think you know we each have our own issues or else we're just gonna go with the other Republican candidates Nikki history and I'm proud of you we're also voting for yes I don't know I mean all right well thanks guys I think it'd be great to get Nikki Haley that's a no that's a no just say no no no I'm going to put in the ass to this answers for sure all right well that's great yeah it would be great people want to hear for more folks so a lot of other news going on I think a good place for us to go to next maybe do we want to do the debt ceiling defense spending or in videos let's go together in my opinion okay great we'll go with the Sultan of science U.S debt ceiling is at 31.4 trillion currently uh Treasury Department recently won the federal government could be unable to pay its bills as soon as June 1st Fitch put the US credit rating which is the highest rank of Triple A on negative watch so negative watch means it's trending towards bad and that it's imminent that they might lower it due to this debt limit deadline it seems like we're not making much progress every couple of days we seem to swing one way or the other the stock market has kind of shrugged it off and the last time the U.S credit was downgraded was in 2011 but we avoided that chamoth what's going on here what do you think the eventual outcome in is there a chance that these Knuckleheads who represent us are going to default and cause chaos or do you think this is all Kabuki theater and we're going to wind up in the same place which is they raise it and make some modest concessions August 5th 2011. the s p downgraded the United States from AAA to double A plus you know what happened absolutely [ __ ] nothing okay so I do think that this is another opportunity for the Little Red Riding hoods to get their panties in a bunch but these downgrades don't mean much difference talking about I think that these third-party credit rating agencies are not particularly that accurate and sophisticated they don't know anything that you don't know they're not getting access to Moody's gave svbn a rating the week before it went into receivership this is my exact point well done none of these because you know what they're doing these companies are in the business of putting a letter on a document and then selling access to that document so if you're going to trust these guys to know what they're saying either right or wrong independent of what side you are Outsourcing your decision making to the wrong body so whether it's s p Fitch or Moody's I would tell you to ignore it and come to your own conclusion I think that this budget ceiling thing is happening now every couple of years and it seems like the real thing we should be talking about is whether Biden's going to use the 14th Amendment and just Ram a budget through and I think that that's yeah so under under the 14th Amendment the president of the United States has in their discretion the ability to make sure that the United States can pay their debts and that wasn't necessarily thought of as a way to work around the debt ceiling impasse but because Congress refuses to pass any structural laws that allow the budget to ebb and flow with tax receipts we get in caught in this situation again roughly every handful of years so what Biden could do is he could say the 14th Amendment gives me the right I'm going to pass a budget via executive order from a game theory perspective what that does is it forces Republicans to sue Biden take him to the Supreme Court and say this is unconstitutional the problem with that is that that probably really does tank the economy in the way that it creates enough uncertainty where Capital markets freeze up and liquidity just absolutely goes away and again liquidity has been shrinking for the last 18 months anyways so it'd get even worse so I think the brinksmanship right now between McCarthy and Biden is basically that Veiled Threat if Biden effectively isn't going to get something done I think he's going to test the 14th Amendment now if the 14th Amendment turns out to be a reasonable way in order to pass a budget the good news is not just for Biden but for any future president including Republican presidents will not have to be held hostage by Congress they will in the 11th Hour be able to pass a budget that works the implications of that though is that now you will not get consensus and whatever's happening in that moment you'll see more of so if you have a spending president they'll just continue to spend and if you have an austerity president they'll continue to cut and that'll have implications on either side you think this is over issues the 14th Amendment or do you think it's a valid use of it no I it's not going to fly I mean it's true that the 14th amendment has some language about the full faith and credit the U.S shall not be compromised uh however it's never been tested or tried so no one exactly knows what it means progressives are now saying that the language means that Biden could just keep spending without the debt limit being raised but find himself through cold water on this he said that he didn't think he had that Authority and even Lawrence O'Donnell the other night who's a big Progressive on the media he was saying that the Dems were going to take this tack they needed to do it months ago before they started negotiating on a debt limit increase so it's too late now in other words if you're going to take that position why would you have negotiated that you're you the president are effectively conceding you don't have that Authority when you start negotiating so I think it's too late to invoke the 14th Amendment they're going to have to raise the debt ceiling that being said I think they're going to be able to Reuters had a report this morning that they're only 70 72 billion apart now in their positions which is a relatively small amount so my guess is they're gonna they're gonna work this out now what should the fate of the debt limit be moving forward I mean the thing that's so stupid about our budget process is we spend the money and then argue about whether we're going to pay the credit card bill the way that the debt limit should work is you raise the debt before you spend it Congress should have to vote first on whether they want a deficit or debt spend then you decide how much you're going to spend so this thing this vote needs to be moved up before they spend it and I think if you did that it'd be a lot harder for the politicians to spend money because you know if you had an up or down vote very early on saying should we even be in deficit I think a lot of people would say no we're not we're not in a war so why why would you deficit spend if we bring any thoughts in the debt ceiling if not we'll go on to the government accountability vis-a-vis the defense spending I mean look we're running a two trillion dollar a year deficit and it's forecast to continue to be at that level for several years and it's going to take pretty radical changes in how we tax and spend to make up that Gap so you know this is a problem that is going to continue and repeat and it does beg the question you know would you want to buy bonds from an entity that's generating 4 trillion in revenue and spending Six Trillion and has a plan to do that for the foreseeable future and it's only you know seeing its economy or its underlying Revenue base grow by two percent a year it seems like you know that would be a very hard startup to fund and it would be a very difficult growth investment to make particularly in an environment like this so I'm just pointing out that this is a becoming a more kind of systemically risky situation for the U.S that you know we spend the way we do and we have to keep coming back to having these debates about it's appropriate or not and now they've narrowed down the way that the Republicans seem to be kind of going about getting this done this deal done is they're only focusing on the you know roughly 15 percent of the overall federal budget and they're saying we'll kind of make some tweaks in in that in that little range there and save some save some pennies save some nickels but uh we've got a much more fundamental problem to deal with which is how do we stop running these deficits and running the data but I mean yeah I'm gonna sound like a friggin no I think you're right at some point yeah the inflation is here and the crowding out of private investment and private borrowing is now occurring because the government borrowing is so big I mean our our treasury our government debt of what 32 trillion that has to be financed somehow and all that money is going to finance government instead of being put to other uses so I think that the downside's already here you can't run two trillion dollar deficits every year that's unsustainable now I think that you guys referenced what happened in 2011. that's worth this discussing for a second because I actually think that what was agreed to in 2011 was excellent Obama and the republicans in Congress agreed to a thing called the sequester where they agreed that they would freeze both defense and non-defense discretionary spending until they could get their act together and agree on what the budget should look like and so the theory was the Republicans agreed to the pain of freezing defense Democrats agree to the pain of freezing non-entitlement social spending and that's how the deal was cut I actually think that made a lot of sense and I think we should have kept operating under the sequester until we got to a balanced budget but the reason that broke quite frankly is because of the lobbying power of the military industrial complex is so great in both the Republican and Democratic parties that they basically wanted the sequester overseas keep raising the defense budget I think it's just that there's never been a degree of accountability for the spending that's being done because of this assumption that we'll always be able to pay our debt and we'll always be able to take on more debt and I think that you see the other conversation the other topic that we were going to talk about was this lack of accountability and defense spending that you know we should play the Jon Stewart clip you know where I think who does he interview the under Secretary of Defense or something what is her title deputy secretary of defense Kathleen Hicks was discussing in the defense budget when I see a state department get a certain amount of money and a military budget be 10 times that and I see a struggle within government to get people like more basic Services I mean we got out of 20 years of war and the Pentagon got a 50 billion dollar raise like that's shocking to me now I may not understand exactly the ins and outs and and the incredible magic of an audit but I'm a human being who lives on the earth and can't figure out how 850 billion dollars to a department means that the rank and file still have to be on food stamps like to me that's [ __ ] corruption I'm sorry and then there was a story that came out this week according to Bloomberg the government accountability office disclosed that the Pentagon is currently unable to account for hundreds of thousands of spare parts for for the F-35 Jets the pentagon's never passed pentagon's never passed an audit and it's accepted and it's acceptable in the same way that it's acceptable to never balance the budget to always spend and give everyone what they want and to find ourselves in you know this kind of late stage problem where we've gotten away with it for so long that both of those factors whether it's the the downgrade on the rating whether it's the fact that we end up in these battles over whether to raise the debt ceiling every couple of years or whether we can't pass an audit all of these factors are symptoms of the same underlying problem which is that there is no accountability for you know how we operate the you know the kind of fiscal condition of the the federal government you know the other thing it leads to is all these optional Wars so let me give you an example so all of these wars are always they're all free yeah they're all off book so take Ukraine we've appropriated what 130 billion that's not part of the defense budget we have it or a billion in the defense budget but then we just stacked the 100 billion or so for Ukraine on top of that and it's off book now if we said the reason we're funding Ukraine is because it improves the National Defense of the United States why wouldn't that just come out of the defense budget if you force people to make actual choices actual decisions and they could say okay we could spend 100 billion on Ukraine or we could spend 100 billion on stockpiling tanks or f-35s or whatever for the United States now you actually Force some prioritization decisions but because the wars are always off book they're just additive you just tack them on and we did that within Afghanistan we did that in Iraq but we spent something like eight trillion dollars and that was just added to the national debt yeah we can't afford these anymore it's becoming clear to everybody that there has to be some accountability and chamoth I guess is it seems like there's a couple of unpopular stances to take when you're running for office one of them is social security retirement age as we saw it in other countries like France where people are arguing over 62 64 years old whatever it is yeah and so these entitlements job requirements if you want to get unemployment and then of course defense spending you seem Un-American if you don't want to take care of old people you seem un-American and you know week if you don't want to support the government is there a path towards celebrating an administrator as CEO an executive who tells honest truth to the American people which is hey we we've been on a binge we've been going on vacation nobody's looking at their the bills and we need to have a staycation we need to cut costs we need some austerity here is there a path for somebody Ron DeSantis Chris Christie RFK whoever it is to win over the American public to win over moderates with an austerity and they balance the budget message or is it just too unpopular to even bring that up I just think that you guys don't psychologically understand how to get what you want I think the best way to get what you want which I would want too which is a healthy economy where there's accountability for spending is to not look at expenses and all of this talk is always about expenses but to look at revenue and limit Revenue more drastically and I think the best way to limit Revenue dramatically at the federal and state level is to just minimize taxation as much as possible and I think that is something that Democrats and Republicans have a hard time fighting nobody wants to raise their hand and say I want new taxes nobody says that right and I think that if you attach that to some sort of spending guidelines like what David says with a sensible foreign policy you just end up spending a lot less you want to fight a foreign war okay great well you know what it's part of the existing budget let's go figure out why we want to do it we want to have more accountability in defense spending okay well look the defense budget is a half of what it used to be because we just have half the revenue I think that if you start to go and talk about austerity and cutting Social Security and health care benefits it's literally a non-starter people close their eyes they plug their ears and you get nowhere now separately I think the step even before you look at taxation so minimizing government revenue is to figure out how to refinance so if you're a homeowner and you got a mortgage in the 80s you were paying 12 14 15 16 if when rates kept going down you or the people around you didn't have the common sense to refinance that that was negligence similarly we're in a position today to refinance our debt wall and push out these maturities past 100 plus years we are the only country that has a viable stable economy that looks like it can still continue to thrive at scale take advantage of that you lose Nothing by giving us the optionality generating some Hundred Year debt refinancing a bunch of this short-term stuff and then second inflation helps us and it helps us because it allows us to inflate the value of these dollars that allows us to pay off our short-term maturity so these are two practical simple things that are uncontroversial that should happen today and then separately I think you need to look at minimizing Revenue and then you can cut expenses but if you flip them around I'm just telling you it's not like I want any of this to happen but I'm telling you nothing will change and you guys will still be crying wolf in five years it'll still be the same it'll just be a different debt to GDP number that gives you anxiety speaking of anxiety free break your response I don't agree I think we need to balance the budget and I think that if we don't we what can you agree with financing pushing out hundred years no no reducing Revenue solves the problem I think that and by the way one of the problems with a democracy Chapman is that you speak about it as if everyone benefits from a tax cut generally there's some disproportionate benefit to a tax cut and that's why it's less likely to happen because the majority will benefit by keeping taxes high for a minority whether that's some corporate minority or whether it's um wealthy individual minority and that's why I think the opposite is more likely to happen which is we're more likely to see taxes go up in order to bridge the gap to continue to fund programs that everyone wants to everyone wants an and they don't want an or and as a result they'll kind of continue to seek Revenue because there are other places to get Revenue that don't affect me meaning it doesn't affect the majority and I don't mean me personally I'm just speaking about a voter and a voter would say if there's a way to tax other people for me to get the things I want they will vote Yes for that and that's ultimately what the system ends up finding and I think that's what's more likely to end up happening that's awesome yeah look I mean I agree with part of both of what you're saying which is I agree with Schubert that we need to balance the budget there's no excuse for running peacetime deficits this large we're really going to regret this one day on the other hand I agree with Jamal that if you just try to solve the problem by raising taxes the politicians will just keep spending I mean you have to starve the Beast I think in order to control it at least that's been a view I think for a long time you agree with your mouth on that point here's the thing you cannot solve this problem by raising up to 70 tax rates like we had in the 1970s and I can prove it pull up this chart France is a good example of this too so what you see in this chart here is this is federal assistance percentage of GDP what I see when I eyeball this is if you were to put a regression line on that it'd be around 17 and with a plus or minus of two percent and the times when you get up to 19 percent are a little bit close to 20 or when we have great economic conditions or money printing so the Clinton era from was it 92 to 2000 was an economic boom and we got up to almost 20 percent but we've never ever been able to get more than 20 percent of GDP and federal tax receipts even during the 1970s when the top marginal rate was 70 percent doing economic activity no it curtails investment in economic activity this is yeah that was recommended for hundreds of years taxation doesn't solve this problem I don't disagree they shouldn't disagree I just you can only get so much blood from a stone and the reality is is that when you try to tax rich people in a confiscatory way they spend a lot more on lawyers and accountants to figure out where they tap out you know like if you're paying 50 60 taxes like what's the incentive to go to work and if you're sitting on a big nut you can just be like no you know what I'll just I'll just enjoy my life a little bit more because each incremental dollar 50 60 is going to taxes and then I have to pay my team and you just sort of yeah I asked a question on Twitter you know because we all talked in our group chat about the the concept of passing a balanced budget amendment which would be an amendment to the U.S Constitution that says you know Congress has an obligation and the the executive branch has an obligation to generate a budget surplus you know every uh every year and you could have a balanced budget amendment that provides certain exemptions to this like in in a year of of War for example where Congress declares an emergency or declares a war and in those cases theoretically like if there's some sort of emergency that we have to address and and over fund you can kind of resolve to this but man I so might you know we've been we've been at War for something like two out of every three years since the Cold War ended how many of those Wars sacks were voted on by Congress is the other issue you know well what happened is we did the the authorization for the use of force I think goes all the way back to was it like 2001 whereas basically we declare a war on terrorism in response to 9 11 and they use that authorization to go into Afghanistan which I think was understandable then they use that same one to go into Iraq then they use it to go into Syria and only recently only a few months ago did they actually repeal that use of force as a way to keep authorizing new Wars so they really should go back to Congress for every new war but the problem is you know Freeburg I agree with you that we need to have a balanced budget amendment but it's going to contain a caveat or exception for war and we're just in at War all the time now sure but I think that there's ways to create some mechanism that forces that issue to actually come front and center as opposed to being what you're arguing which is hey it's always on the back road therefore it's always bubbling over and maybe you draft it in that way but what was surprising to me was just the incredible negative sentiment I got from so many people who were so deeply have this deeply held belief that the only way to support growth in our economies through federal spending and that that has become the driver that has become the handicap of our country it has become the handicap of our economy it has become the handicap of our people and as a result is it a handicap because it means that we now have this instead of having an incentive to drive productivity through private commercial and economic activity through Innovation through productivity gains through business building it's now dependent on what we have now identified as a highly unaccountable system of spending and that unaccountable system of spending ends up putting a lot of dollars into the pockets of cronies and the the pockets of folks that aren't actually driving job growth or aren't driving productivity there are certainly programs that work but overall there's no level or degree of accountability that asks the question did that program work did we spend a dollar and get more more than a dollar back for what we spent there's no assessment of that whether it's a war or whether it's defense spending there's always some kind of intellectual argument that's true I don't think that's true I think the OMB releases report after reports saying that all of this stuff sucks and doesn't do anything just nobody actions no one cares right yeah you're right you're right I don't care I think what you're saying is inaccurate this is my point I think it's important to get the facts right what you are saying is not true they do do an accounting that accounting sucks it shows that there's tons of ways nothing changes so now what do you want to do David it's the real question what do you want to do knowing that we shouldn't spend on things that don't have a positive return this is my point that's why we're now in this very difficult situation that's not happening now what would you like to do well the reason it doesn't happen is because the way that politics decides things has nothing to do with the merits of it it has to do with special interests debating that I agree I'm just saying betrayed the country because we just keep teaching people that somehow the government's going to solve all these problems when really it's just a product of special interest lobbying for things and that's why we perpetuate these programs that don't work I think the best way to think about government spending is that in every dollar there's probably 15 or 20 cents that actually does some good there's probably 15 to 20 cents that's like on the margins break even and then the rest of it which is half of it is wasted that's probably roughly accurate right you get things like tarp which turned out to be a pretty decent program there were things like the doe loans that you know got things like Tesla into the marketplace right there's things like the IRA today that'll delever ourselves and create a peace dividend because we won't need to fight over resources and oil from other countries but the problem is that that represents a minority of the dollars okay now that we know that that's true and we've known that that's true for decades I guess again I'm just asking a practical question what do you guys want to do now play the ball where it lies what do we do today there's a couple things you can do first of all one of the points I'd make is I think you you're probably right in your assessment that 50 cents that's what you're calling wasted that money does end up somewhere it ends up in someone's Pockets probably the pockets of the shareholders of some contractor or the daughters of individuals or employees well there's also there's also individuals that that benefit but functionally what's going on is it's a system of wealth transfer and that's not necessarily bad the question is is the transfer of wealth happening to the right groups that we intend to support with these social programs or is it not and I think Sax's point which I think we could all probably align on is it's not and I think that's probably a set of standards for accountability that we should probably try and create but where where does that where does that money end up it ends up buying homes feeding people they're going to restaurants you're buying cars not like there's like a fleet of Mega yachts in America well I I guess what I'm asking is where where even that leakage of 50 doesn't that just end up in the normal economy yeah it ends up supporting individuals and maybe yeah so why is that so bad here is what I'll say well that's what I'm saying it is a wealth transfer it is a system of wealth where it ends up in people's pockets and that that system ultimately benefits a lot of people in need and a lot of people that we as a society intend to support here in the U.S I don't think it just goes to poor people yes there's so much corporate welfare I mean come on it's not all just going to needy people it's giving to your special interests on some level we can accept the inefficiency of government I like your idea of constraining how much of a canvas they have to paint with and how many how how much revenue they bring in and I think what we have to accept is that the reason this country gets bailed out is because we have tremendous entrepreneurs an amazing Capital allocation system a very fluid market for building corporate corporations and capitalism is so vibrant here that no matter what happens we always seem to make the next Google Uber Nvidia whatever it is Airbnb and I can tell you you know I'm spending a lot of time traveling meeting with people in Japan in UAE Etc they're all looking at the massive entrepreneurial drive that we have in the United States to build global companies and how we do it over and over and over again and the only countries that seem to be able to do this at scale you know maybe Sweden and some of the nordics obviously China but other countries have not figured out how to build Global corporations and and that is what bails us out every time is entrepreneurs check how the deficit's getting so big that we can't bail out that way think about it we have 2 trillion in deficit every year that is two Googles yeah it's an apple everywhere there's money in apple every year we have to we have to address it but the point is that's bailed ourselves out historically is massive capital education and Entrepreneurship I want to remind you guys what happened at the end of the 70s we had all these inflationary problems we had all of these taxation problems where people thought all of a sudden 70 tax rates were going to solve the problem what you guys talked about and instead the exact opposite thing happened which was the guy that got elected Ronald Reagan I just want to remind you what the Electoral College was between him and Jimmy Carter 489-49 like a bigger just shellacking I don't think we've seen in modern U.S politics to the guy that basically said enough with this we're going to tone it all down and we're going to cut revenues so I do think that people have an appetite for them and I think that people you know the debt to GDP in 1980 was only 30 percent so we just have a lot less driving lots of work to do we got a lot of work to do but let me say this look I actually agree with what you're saying in this sense okay if you look at my simple chart of federal tax receipts as percent of GDP okay the highest it's ever been in the history of the United States is 19.75 in 2000 we had the.com bubble okay that's the highest ever been and we had periods of high tax rates and low tax rates it never went above 20 so the simple math here is you do a forecast of what do you think GDP is going to be over the next year you get independent economists to do it and you say the federal government can't spend more than 20 percent of GDP because we've never extracted that we've never figured out a way to accept it's perfect your logic is perfect out of the economy the logic is perfect there your aggression is so it's it's very important because what your aggression says is we're actually spending a lot of energy fighting over two to three hundred basis points at any given time right yeah and what we should be focusing on is more important why are we doing that why are we spending so much time getting our pennies in a bunch over two to three hundred basis points and we need to stop Wars increase our education system stop the wars by the way and inspire people to start companies and make it easy to start companies the bil the IRA and the chips act all three the biggest components in all three bills this is Biden's signature legislation is creating energy Independence for America which will have an enormous peace dividend you will not fight these stupid endless Wars every single one of them goes back to oil right like with the exception of it's always about resources yeah what has it never been about resources in modern history well and now it's going to be chips is the modern resource Nvidia shares jumped as much as 30 percent after reporting huge Revenue guidance due to AI demand q1 Revenue 7.2 Bill up 19 quarter over quarter not year over year quarter of a quarter Revenue beat annual assessments by more than 600 million for people who don't know Nvidia is working on gpus as opposed to CPUs the graphic processing units that are being leveraged in Ai and there is a massive cycle going on there's a line out the door to buy these when you see Twitter going into AI Facebook Google and obviously Microsoft all the cloud infrastructure is moving from CPU to GPU yes uh Freeburg well I mean I was talking with the CEO and CFO of a major data center wreath and they shared with me that they're seeing more demand in the last couple of months than they've seen in the prior 10 years almost all of that data center build out demand so they'll build data centers for software companies for internet companies it's coming from you know GPU racks and these GPU racks are much more energy intensive much more costly but it's a pretty uh kind of significant shift underway that businesses that historically didn't even operate their own data centers are now building out their own data centers have their own Training Systems to have their own infrastructure to be able to run AI applications and tools so it's uh it's a pretty significant shift underway all of the growth that Nvidia is projecting and highlighted in this earnings report yesterday is coming from their their data center line of products and it's a pretty significant I mean I don't know people have said they've never seen a beat like this or never seen enough a guidance update like this of the scale where I think the the street was looking for maybe a seven billion dollar guide and on revenue for this and they basically came out and said they're going to guide to 11 billion next quarter which is just an insane bump for a 90-day Outlook I was told from one of their major customers that they had to beg uh like get on their knees and bag for thousands of gpus and like the lobbying effort he said there's a line around the corner to buy these and you you need only use chat GPT or any uh stable diffusion Etc and you see how long it takes to do uh generative AI to use these products it's like we're back to dial-up modems act we're literally we're waiting for a computer to give us an answer when's the last time that happened that we had to sit there and wait for it to do its job and I think this is the great renewal for America another amazing American company it's only three decades old it's it's best years it's best decades are in front of it obviously this is going to be a massive Boon for yeah not only Nvidia but for America or as I say America yeah Nvidia has basically joined the trillion dollar club now in terms of market cap companies it's really amazing I mean I'm kind of kicking myself because this was the easiest buy ever launched on November 30th we all saw that that immediately ushered in a whole new era in Silicon Valley there's a ton of VC funding that's poured into AI startups they all need to train models and those models need to use gpus so we all saw this coming and yeah I'm kind of annoyed with myself let me ask you let me ask you a question so you say that you kick yourself obviously the general statement that you know AI is coming and Nvidia is going to be a beneficiary or nvidia's product you're going to see a boon make sense but when you look at the valuation of the business they are currently trading at 70 times the next 12 months ebitda so how do you think about valuation even at a trillion dollar market cap at a trillion dollar market cap they're trading at 70 times next 12 months even uh you know this seems like they're doubling Revenue every six months though dude they're doubling Revenue here how high does it go because at a trillion dollars what's the right ebitda level for a business to be worth a trillion dollars is it a hundreds right is it 100 but I mean what's the number and then the question is if it's 100 billion how many years does it take them to grow into that and you know are you really paying the right price are you paying a premium to get you know it's a momentum establishment and we'll be determined if they have competition so is is there a competition for this company chamac you'd think there's a competitor that will emerge that you know I mean it's important to understand what a GPU is maybe so sure Intel had the run of the place for the first 40 Years of compute because it turned out that most of the things that we used it for Excel Microsoft Word a browser operated well on a CPU which essentially think about it as like a factory that takes in the first order and then puts it up first and first up and the great thing about gpus is that it can take multiple streams of work at the same time and work on them at the same time right so it's very parallel and has this level of parallelism that makes it very well suited for AI applications I think the thing to keep in mind is that it is a byproduct of a GPU that tries to also do other things and so as a result of that you're now seeing a lot of companies building their own silicon and most importantly all the big tech companies now have some pretty well-evolved efforts underway so a lot of these companies have figured out how to do custom Asics that can do this massively parallel processing and what you're now seeing is chips that are designed against specific models that are optimized for them the other thing that you're also seeing is that some people are saying well you know what for these massive models actually you should just run it all in memory and so you're having folks that are doing it in in massive arrays of fpgas that was Microsoft's first attempt at all of this so what is the point of me telling you this I think that again we talked about this last week the biggest cheerleaders of this first point of value creation has really been Wall Street and family offices that wanted to front run where the value creation was going to initially go and they've been right which is around chips but there was a tweet and Nick I posted maybe you can throw it up here that shows that if you compare this to the mobile internet there's always this phased approach in terms of value creation where let's just say initially in a New Market Mobile a decade ago in AI today the first dollar of profits tends to go to the chip companies that makes a lot of sense right because they're the ones that are in the bowels of making the elemental capabilities possible and then you transition that value and what freebrook says is people realize hey hold on the profit dollars are not going to accrue there because again this beautiful principle of capitalism is that you can only over earn for a certain amount of time because then competitors emerge and say hold on I want to steal those profit dollars from you and take them for myself so margins compress right so in the end nvidia's gains today will be then spread across Nvidia Facebook will have their own chip Amazon will have their own chip Google already does papa will have their own chip all the memory companies will be in this space right so then the profits get smeared there multiples compress then where does the value grow to the device companies in the mobile internet here I think we still have to debate what is a device company in the world of AI but the most important thing I think to remember is that where the real value gets accrued is five six seven years later when the software and services companies show up and create a huge moat and those in the Googles and the Facebooks and the apples of the world and so it's a really Dynamic moment I think it's wonderful for NVIDIA it's an amazing story for Jensen who's been really at this game for a very long time by the way there's a Jensen has a law of his own that is a sort of companion to Moore's Law called Wang's law named after himself which you can read about which just talks about the variability of the compute capabilities of gpus versus CPUs so if you want to know that he should get some credit for that but I think it's great I think we're in the another one apple is also making their own gpus that's what when you hear the M2 that has gpus in it so yeah you're absolutely correct anyone so we're gonna purchase a few years we're gonna have a few quarters for sure of this hype and then the smart money will probably figure out where the next the lily pad is and then they'll go to the next beautifully said beautifully said any other thoughts uh free burgers we wrap up on that I wanted to show this AI demo from Adobe Photoshop you know every week or so we see something that's this is incredible and this one was we shared in the group chat but for those guys put this out shout out to belski yeah so what we see here if you're listening is uh you know taking a Photoshop creating an area and then instead of like cutting in Paces pasting it or refining it you're putting in a text prompt and saying oh put um expand the and make this wide screen or let me grab this deer out of a forest and then put it on a wet alley at night and uh then you know let me highlight this wall over here and put a sign and put a red arrow sign and it just generates it and it's doing this they made specific note when they launched this that all of this is done with stock Photography they have the complete license too so they can monetize this without getting sued like Microsoft is currently being sued and Microsoft actually in addition to the GitHub lawsuit it turns out Twitter sent a letter over 2 Microsoft as well so incredible demo The Producers here at all in as our production team grows producer Brian made a little video here here's chamothin before the Laura Piana days that's that's Tom Ford yeah that's it's Tom Ford this is Wendy's terrible the hair is terrible you look tired uh the watch is great that night my God I played poker literally I walked into that to that CNBC right you went straight from the poker table to the squad wait no tie but he's wearing a title that's a Tom Ford yeah he said to you he said try this without the without a tie I said okay when you were talking to Tom Ford great what a flex yeah you know Tom Ford has said me twice in my life I can tell you both stories okay hold on a second so we're degenerative AI add uh make a yellow sweater is the prompt here let's see if he goes to Bert from Ernie to Bert there he is Sri Lankan Bert as we call him in the um it doesn't quite get the borders right but it's terrible it looks like a Warriors jersey oh there you go right yeah pretty bad yeah yeah I think the demo was [ __ ] can we change his hair can we can we have the hair be less in sync less Hassan Minaj and more I understand why they call you Aziz Ansari I think the you had the you're going there the hair yeah it's a lot of lift and what was that day it's honey what is that is it putty this is like eight years ago is that what are you using clay or putty yeah it's like it's like a stiff it's like a stiff hair wax I think it's kind of a hair wax oh got it yeah I've come such a long way since now you have much more much more stylish I mean look at Sax's crazy hair as we as we probably did in the cold open my thought on the Adobe thing for what it's worth is like I mean do they want a mulligan on this 20 billion dollar figma thing or um do they get to see the ongoing revenues that figma's generating uh all kinds of stuff it's a different product though I mean the AI stuff certainly has had an impact but I mean so much of the benefit of figma as it's web-based it's collaborative it's like people kind of use it online to make stuff together it's a little different than the other tools that they offer today so you don't think it from September to now like nothing changes they should just close this thing at 20 billion or or they're half they're half page do you think that they should pay a billion break it up and then redo the deal at 10 and then remember not all breakup fees mean that you can break up for any reason so there's only there's limited outs on what you can pay a breakup fee to get out of it one of which could be anti-drugs to regulatory but otherwise you may be forced to close in court if you don't have a valid reason for terminating the deal their only hope is to get lean a content muck it up yeah some weeks is your argument more that they bought figma top of market pricing which no longer makes sense or is your argument that they're innovating so well that they don't need it I think it's a little bit of both but it's it's more that I think this generative AI stuff allows you to refresh I tweeted this out so Nick maybe you can put it up there but I think the first thing is that your feature set can catch up pretty quickly so even if you set out a team and said just copy exactly what figma has with a co-pilot enabling 50 Engineers that's like 500 Engineers cranking on something I would be surprised if they couldn't just replicate the product n10 that's the first thing then the second thing is I think that you've seen VC funding basically crawl to a halt and so the question there is how many of those companies are just going to stop spending because they're just not going to exist and then the third thing is if we're sort of hashtag austerity people are going to look at everything they're spending money on and try to be really disciplined about it if you roll all those things together sax my thought is maybe the deal still makes sense but does it make sense at 20 billion and does it then just create a whole Suite of shareholder lawsuits after the fact that are just going to say these three things and regurgitate them Ad nauseam that's the Curiosity I had well so we're here let's talk a little bit about the state of Silicon Valley sacks we were talking offline after the show last week you've slowed down investment at your firm craft you're being thoughtful you're working on the existing portfolios how would you describe your activity so far in the first half of 2023 as a firm if you're so willing to share them my take on what's Happening is Silicon Valley right now or Tech more generally is It's A Tale of Two Cities it's the best of times for AI startups and the worst of time show everybody else the AI startups there's a lot of interesting things happening there and money is being pushed at them by VCS it's very frothy arguably bubbly but then at the same time if you're a pre AI company maybe the one that raised a lot of money at a big valuation in 2020 or 2021 it's a pretty tough time I don't know of any startup especially like later stage startups who are hitting their numbers everyone is reforcasting down everyone's missing I think that speaks to the larger economy is not doing that well I think the economist a year from now may say that their recession had already begun certainly fails like that yeah that's what druck said at the Zone conference and I think that starts are absolutely seeing that in their sales right now sales are slipping it's taking longer buyers are sharpening their pencils it's a really tough environment I think for software startups that are actually trying to make sales AI starts are a little bit exempt for that because people are still investing based on the dream not based on the metrics and I would say that we're very interested in Ai and we're starting to make some Investments but we also like to invest based on metrics not just on a dream and so we're being somewhat cautious about how we approach it so you make a small seed bat in somebody who has a dream if I can translate here but if you're going to make a bigger battery series a series B you're going to want to see some numbers on the board you're going to want to see some product in mind I think that's a really good way of putting it because I think the standards change at each round and then at the seat stage you can absolutely just make a bet based on the dream or just based on a Founder sure great founder going after the AI space idea still a little bit to be fleshed out you can make that bet but 500k 750 yeah or even even like 3 million will do as a big seed round but um but then when you get to series a and you want us to write a 10 12 50 million dollar check we kind of want to see some Revenue yeah and certainly by the time you get to series b or series C we want to see like all the standard metrics we want to see net dollar retention expansion all that kind of stuff yeah it's it's really hard for the later stage startups because they raised and this is the lesson if you're raising at three four five hundred million sax correct me if I'm wrong here you're not you have to build into that valuation and let's face it that valuation a was never realistic it was overpriced and then B you got the headwinds and your customers are saying oh you want 40 000 a year for this SAS product we'll give you 12. and what position are you in to turn down the 12. you got to take the 12. and because you got three competitors who are going to roll up and take the 12. so it's hard actually can I give you an update please remember I mentioned there was a startup in my portfolio um actually my my angel portfolio yes that that way to play around the cram down and I think it's absolutely tragic because of what I learned which is the founders got crammed down too because a year ago they brought in a professional CEO and I think as a result of this they're probably going to get nothing for 10 years of work whereas if they had just cut costs damn it and you know the the company has 32 million of ARR so imagine if they cut their Opex to a million a month they could have run 20 million dollars of ebitda pivot to basically private Equity model sell that company for 150 million half would have gone to pay off the investors in the other half would have gone a lot of would have gone to the common they probably would have made 10 million dollars each and now they're going to get zero because they burnt too much money didn't want to cut costs they bought into the dream of bringing in the professional CEO is going to re-accelerate growth it's never done out never does and so it's like so frustrating to me because I like feel so bad for these Founders I wish they had called me a year ago and I would have been one of the guys pounding on the table just cut costs and then control your desk because listen yes and here's the thing is if you're only growing 10 15 20 or even 50 a year you're not a VC backable startup you're a private Equity place you got to Pivot to that model of making your business work as a cash flow positive business yeah that's how you're going to get an exit and you know if you're growing 100 plus a year you can continue to be VC back so it's so important for Founders to understand whether they're even eligible for Venture Capital anymore and if they're not you have to make a different kind of model work if you want to see a return yeah and when this happens a cram down round those Founders if they want a refresh they have to prove their worth they're not just going to get a refresh to keep the relationship going this is 30 million dollars in Revenue they don't need the founders anymore look these guys been working for 10 years so even if they got a refresh they had to put in four more years of work and the other thing is the scram down round I think was way too big they raised 25 million with a 3X lick pressure 75 million off the top off the top then you've got to repay vague is triple yep oh my God who this is where board governance is so important tremath huh like I mean who is on the board of these companies of these companies these are about people had to build a company and they may be educated or they may have been an exec at a company and then some VC who was feverishly raising funds just hired some dope put them on the board of this company and then just the stupidity compounds and trickles down it's so frustrating compounding stupidity this is the beginning of the beginning all of these people who have zero judgment are gonna [ __ ] so many companies up it is the beginning of the beginning well it's your mouth it's not just the the bad board members it's the view for so many years that who you put on your board didn't matter remember there was all these VCS who had a model where it's like well we don't take a board seat and they were selling that to Founders as a positive as a feature as a feature not a bug and the reality is for a lot of VCS actually not being on the board probably is the best they can offer but you know that that model works that model works when everything is up and to the right where like this model of board seats don't matter governance doesn't matter that is a model in a boom where everything just keeps going upward to the right but when you hit a tough time that is when you need a board member who's seen this movie before who knows what a cram down round is who knows what's going to happen to you a year hence when you get screwed into taking a threes where you want the gray-haired pilot you know in the right time to say Hey listen here you want that hair you want that sex here all right Freebird you are always candid about your own Journey you've had huge wins climate.com from Billy raising funds but you know sometimes things don't work out what are you what's your take on some of these hard lessons of great ideas you know spun up during this really hard Market I mean I think just to Echo the point you guys are making in the last 15 years we've been in a college structurally inflated environment because of the zero interest rate policy since the 08 financial crisis and everything's been up into the writer so much it's been so easy to kind of inflate Things fill up hot air balloons and go up into the right and unfortunately most folks who are working in the investor community that are sitting on boards weren't around for the.com crash the last time this happened and I think you know just to kind of echo your point why it's so challenging I think right now to figure out a way out there are there's a lot of failure going on in in Silicon Valley right now you know sax you talk a little bit about having pads for exit and options for SAS companies but there are many sectors in startup land that don't have those sorts of options in biotech in sinbio in fintech and direct to consumer e-commerce there's a lot of markets that a lot of types of businesses that feel like there isn't a great way out and it's having a deep psychological toll on entrepreneurs on Founders on CEOs and everyone is experiencing some degree of failure in this environment there are very few folks who aren't feeling this acute pressure in this acute pain you know I heard some pretty uh horrific stories this week from a friend of mine and someone who ended up in the hospital because of the pressure he was under hmm and it's really trying and you know even within our friend group I mean not not our direct friend group within our broader community of investor friends there are very few people who aren't feeling this extraordinary pressure that they've got a book that is declining in value and they don't know how to get out of the hole and you know that pressure is like is generates deep questions about one's ability and generates deep existential thought for entrepreneurs and investors about what the hell am I good at and no one's really talking about this out loud but it is a happening across the valley we all have these thoughts we all have these dialogues as the failure begins to set in in the slow motion train wreck of a market that we've all been talking about for weeks and months how do you deal with it look I mean I just think that number one it's worth acknowledging and it's worth having the conversation that no one is alone going through this pain it is not a one-off that these companies are failing it is that we are all dealing with failure right now and we are all trying to figure out what is the best path forward and it is the kind of thing that you just have to work your way through and you have to persist through this pain but this existential question of am I good enough do I have the skill set I thought I had am I just an idiot did I blow it up Emperor has no clothes all the kind of interfere and turmoil that everyone's dealing with you're not alone going through it a lot of entrepreneurs a lot of investors are in the exact same place now with respect to going forward I think having Integrity with respect to how you handle these situations and having thoughtfulness about you know your reputation because this is not a one and done environment here in Silicon Valley failure is part of the process and how you deal your deal deal with people deal with investors deal with entrepreneurs deal with each other deal with your employees during these difficult times says a lot about your character and your ability that when you do this the next time it will set you up for success and you know as any great athlete will tell you you build muscle during the times that you're failing and then you're ready to go and execute the next time around so you know let's save it for the next quarter but let's play well as best we can right now through this quarter clearly you want to jump in here what are your thoughts on separating your identity from your startup from your work and having a more balanced view of yourself so that when things go wrong maybe you're not as devastated you don't wind up in a hospital bed when things go wrong they go wrong in bunches just like when things go right they tend to go right in bunches I called free bird last week and I was telling him a story about two or three of my businesses just all just pounding eating dirt and what I said to him was and then we have a mutual investment that's doing pretty well and I needed to use the one that was doing well to make myself feel better about the three that were eating dirt and I said to him something he's effective it's just like nothing is working I feel like literally nothing is working it's a tough place to be the only thing that you can do in those moments is just realize it would be so much worse to just be on the sidelines oh I like it and I think that's all you can do then you go and hang out with your friends go hang out with your family kiss your wife have as good of a time as possible outside the context of work and then you just start the grind again but yeah we are in a moment where in most companies there is something pretty wrong it's either your burn and by the way that's always the problem but it tends to be balanced by a few things in your portfolio that are always going well so that as an investor you can maintain some Equanimity through the whole process but Freeburg is right when there aren't enough of these positives and there's just a parade of Terribles you're just like wow this whole portfolio is it all about to fail and then I get a massive wave of imposter syndrome of like what am I doing here and then I have to recognize holy [ __ ] this is my 24th year take a deep breath and it's great that it's that that exhilarating where I think it's back to 2000 and I just emigrated here the conversation were talking about like a string of difficult things we were all dealing with you know a couple weeks ago we announced that we returned all the money to all our all our customers at Canada which was this molecular beverage printer company I've been working on for a few years I plowed north of 30 million dollars of our Capital into building this business we had two term sheets last year both of which vaporized as the markets that degraded it was really a brutal experience for me and these were very high valuations and we were we needed funding to get the production line stood up to manufacture that device so we were that close I ma'am and as the market went South pre-revenue Hardware companies became less fundable and despite our reputation and a great working product and a pro and a manufacturing ready prototype we couldn't get it done it was a really kind of brutal experience to go through the nodes even after you've had a lot of success in your life believe it or not you still get a lot of freaking notes and you get a lot of I don't believe Youth and then to just have to get to a point with this one was really difficult and there's you know been other kind of frustrating experiences of late and then you know you kind of have a call one day with another investment and you're like oh my God this thing could be a home run and that just comes out of nowhere and you know as long as we kind of stay in it as an investor and you keep you know as a builder and you kind of keep building you don't know when that good knock on the door is going to come yep you got to stay in the game you got to start building a business and one day you just nail a sale that you just weren't expecting or a partnership or an m a inbound or something that happens that you weren't expecting it pays for all the pain and all the loss and all the turmoil and all the downside I always used to tell people for every you know four days I'd be failing I'd have one day of success but that one day of success will get me slightly ahead of where I was at the start of the week but 80 of it was failing I mean right now it's like 19 days of failure and one day of success but that one day of success the goal is you used to have a couple of those punctuated moments that are big enough that make up for all this stuff if you just keep grinding and if you just keep grinding as an entrepreneur you keep grinding as an investor and stay in the game you're describing living with the power law there's a very relatable poker analogy in this there's a there's a guy that makes Poker content his name is Jonathan little he's great who he's wonderful I've been thinking about hopping into one tournament at the WSOP this year it's one of the big buying tournaments so I'm like let me just take a little tournament Refresher and I was just looking for any content and I found his and he had this beautiful slide which he said if you are a mid-level poker player you should expect to final table every one in a hundred tournaments roughly and I thought about that for a second and I was like that's a one percent success rate now if that is your 99th tournament you have to be pretty resilient to go through 98 losses where you don't cash you don't make the money and you're just putting money out you're deep in a J curve and you're like is this ever going to work out for me and so it's a really really good reminder that it is the grind yep and I thought that was really interesting so you had a you had a single or double I guess with call-in maybe you could talk a little bit about that experience and what decision you made there we were obviously investors so we're a bit conflicted but I'd love to hear your candid thoughts on why you decided to sell yeah we put together a great team and they built an amazing product I think it's by far the best sort of social audio product and then actually they added a video to it as well and podcasting features so it's kind of the synthesis of video and audio podcasting with social audio we got acquired by Rumble it's sort of like a base hit type acquisition it's it's a small deal relatively speaking but the team wanted to do it and then the main reason is because we got to hundreds of thousands of users but in the consumer space you really need to get to millions and frankly tens of millions is what it takes to have a successful consumer product Rumble does have tens of millions of users so the team wanted to find a home and there's a lot of synergy with Rumble both companies have a Mission that's aligned around Free Speech rumble's sort of the call it free speech alternative to YouTube it's a video platform and what Colin will do is give Rumble Studio capability so it'll be very synergistic for all their creators to be able to create content in-calling and then post it in Rumble so it's not you know a huge outcome for anyone but sort of a push for the investors depending on what Rumble stock ends up but look it's just you can build a really great product and a great team but unless you hit that Lighting in a bottle with distribution you know you won't get to the next level so I'm happy about the deal I think the team's happy about the deal and it's a good outcome for for everybody involved but it's not you know it's not a home run it's just it's more of a base hit and that's what most these things are yeah getting used to a high failure rate and living inside the power law where one investment out of 30 or 40 or 50 results in ninety percent of your funds returns for you know that specific fund or so or maybe two wins represent 95 that's a hard thing for the human brain to handle as is the J curve estimov you know points out correctly man you invest for two three years and then you watch the all those things go down in value for two or three years or the value I'm sure of the portfolio go down for two three years before it actually rebounds and goes back up I remember man I had a run where everything I touched turned to gold and then Mahalo hit 10 million in revenue and then boom Panda update and it just goes up and smoke and you're like what what just happened I I sold web logs 18 months after starting it I you know had the Silicon report I just Uber investment everything I touched went to the Moon it was working yeah yeah and then it's just a very frustrating experience where you can't make something work and you know like I should be able to make this work why isn't it working there's a very heavy blanket of humility setting over Silicon Valley right now and I think all of us who have had strings of successes and repeat successes and you know things that we touch have worked and we do all the same things and we do the right things and we do them the same way in the right way and it doesn't work and then it doesn't work again and then it doesn't work again it creates a very different psyche whether you're an entrepreneur building a business or an investor investing in businesses that what used to be the case isn't the case anymore as the tides have shifted it's uh it's it's it's a daunting challenge to work your way psychologically through this moment but you know progress doesn't change Innovation isn't going to stop technology isn't going to keep shifting forward and uh the opportunities to continue to build and innovate are not going away so I for want am deeply optimistic and excited about what the future holds but man you got to put your freaking game face on right now to get through this yeah for sure well yeah and I would say there's one other exogenous variable here which is I don't think any of us realized how much our sentiment was affected by one guy's decision at the FED like what interest rates yeah because you know what when there's a lot of money in the system everyone feels great totally and all the portfolios look great and when the money is being sucked out of this the buyers are buying and you know oh my God like when the money is being sucked out of the system everyone's results look terrible yep it's you know what it's like before a tsunami the big wave gets pulled out and then this tsunami comes in yeah the money is being sucked out of the system like the tie before tsunami and tsunamis give me all the failures and bankruptcies but what I would say is just in the same way that things weren't as good as they appear to be during the asset bubble they're probably not as bad as they appear to be now however you have to give yourself time to get through this certain recessionary cycle and it's so frustrating to me when founders don't want to cut their person the burn is the one thing they totally control and they have all these excuses for why they can't cut to an earlier level of spending that they were the company was working fine at and we can't get them to go back to cut back to some earlier state of being if Zuckerberg can do it they can do it and you know after seeing what Elon did at Twitter where he reduced the staff by 80 I'm like I realize there's no good excuse anymore for not giving yourself the maximum chance of survival and if you overcut like he admits he probably did he literally in the the Dave Farber great interview he did with him he said you know like we probably overcut we cut people who were great and we hopefully can welcome them back to Twitter as we get this thing unstable footing but we're gonna make mistakes because we had an existential crisis Elon Musk cut too many people admits it and says he's going to bring them back it's no fault of theirs and he said he's going back into growth mode so you know like sometimes you cut you might cut too deep is the point and you know that sets you up for growth in the future you had something you wanted to add I have two shout outs okay here we go the first is to one of our besties got a text from Jason [ __ ] he banked the main event at the Triton for two and a half million yeah be incredible who I mean he's so strong he's a guy's a beast so it's so great to have a professional poker player in our Circle finally like somebody consistently over time but he's so open and he teaches stable rational humble humble professional poker player like happens to basically be the best poker player in the world but you could you would never know it you'd never know he'd never bring it up like he is literally the greatest and he won the Triton 2.5 Milli yeah the second the second shout out is okay here we go to the model y team at Tesla I have been a die-hard model X User from the beginning right I think I have here we go number 13. so I've been I've been I've had three or four of these things and I was like wait a minute maybe this why is really all is cracked up to be and I'm a bit of a curmudgeon and I have high expectations but I just want to say that car kicks absolute ass it is perfect incred no it is incredible that model Y is going to be the best selling car yeah it's going to be the best-selling car in America if you get the base level it's actually cheaper than the average car in America now with incentives yeah it's so so good so huge shout out 300 miles range which is a huge huge shout out to the model y team at Tessa you guys nailed it yeah incredible product and we I love it I don't want to diminish the ax is the best yeah it's a great car it's a great great car I can't wait for the Cyber truck that thing looks like a beast I can't wait to pick that up on top of the Roadster I want the Roadster you know I've been taking my uh 12 year old uh Roadster app and my kids love going for ice cream in the the original Roadster 1.0 so I've been taking it out every weekend or two number one number 16 of the Roadster which somebody offered me a quarter million dollars for I paid 160 for it I have number one of the model S Signature Series so I have signature 16 of Roadster they did 100 signatures and they did a thousand signatures of the model S and I have number one of that and somebody offered me a million dollars for that I have a number of the founders Edition number 13 of the X yeah that's pretty special yeah I'd hold on to that yeah there it's a special vehicle all right listen everybody all in Summit is uh basically so how are we doing how's the all in Summit doing guys we're starting to do our Outreach and to figure out yes yeah so it's exciting all right everybody for the Sultan of science the dictator and Steve Bannon 2.0 David sax the architect the architect the architect I like that I remain even after Sax's triumphant spaces I remain the world's greatest moderator so excited for this weekend boys see you tomorrow at the tarmac on the tournament bye-bye love you bye Rain Man [Music] besties [Music] it's like this like sexual tension that we just need to release somehow [Music] [Music] I'm going all in