SPEAKER_00: nick these guys are low energy today you notice that you know what we need to do we need to gamble let's do it nick let's play a hand to blackjack let's get these guys amped gentlemen what an

SPEAKER_02: absolute pleasure to walk amongst some goddamn greats uh let me see if i can put a bit of pip in your step with a one-time blackjack hand to kick start one of the greatest podcasts on earth it is

SPEAKER_05: i can't confirm this is not ai you did this we're gonna rock and roll proper today let's go all right is this guy are you on right now lfg yeah mate you are going to you i'm actually breaking my own rules for you guys uh i filmed today's hand day 14 but i'm gonna film tomorrow's hand for you

SPEAKER_15: guys right now um it'll roll out hold on hold on wait a minute tim you are a kiwi living in calgary

SPEAKER_17: is that right yeah correct yep kiwi living in calgary been here since september 2022 the missus

SPEAKER_18: tonight oh my god welcome welcome to my country i don't know how i stumbled across you somewhere

SPEAKER_20: and i started watching all your videos on instagram they were off the hook man congrats they're awesome thank you that's so much fun where where in new zealand are you from uh from taranaki so west coast

SPEAKER_02: north island certainly not somewhere uh it's not a holiday destination for certain if you're going

SPEAKER_27: it's like dairy farming country it's it's it's beautiful but it's off the beaten path so yeah

SPEAKER_15: and how did you how did you choose calgary of all places in canada do you know what the missus we

SPEAKER_27: holidayed here uh my fiance and i may 2022 and we thought it was just going to be a holiday then back to the farm um but i guess we had that uh covered cabin fever like the rest of the world and loved our time here so much that we just decided before we even finished the uh the holiday

SPEAKER_30: that we cracked on to getting our visas and got back sold up my livestock and leased the farm back to my parents and and made the move and uh we haven't looked back i don't think they'll be seeing me uh

SPEAKER_02: pulling tits on the dairy farm anytime soon i'll that's colloquial for by the way um yeah so lads

SPEAKER_31: uh what do we want to do here we want to put 10k and then give it to uh one of uh tim's mates who's

SPEAKER_33: who's stuck or something how do we do this we mr beast this we give 10k to the next time you get coffee if we win and give it to the barista or something what should we do yeah let's do it let's do it

SPEAKER_34: let's do a 10k free roll for tim and his fans okay okay so now do you want me to add that to my

SPEAKER_36: bit for this one yes absolutely we want to be in a 10k sweat with you one and done is absolutely the uh

SPEAKER_27: the way to go about this there we go first part we've got to do here is pick out these real dealers

SPEAKER_02: these definitely are real dealers they're certainly eastern european as far as i know i don't know what their quality of life is like i imagine their warehouse somewhere uh and put on the tools now i had a i went with a with a young lassie today and she roll bold and asked for me so i'm going

SPEAKER_39: back to the books because they've been good to me yeah pick a book pick a book somebody who feels blue

SPEAKER_42: collar who wants to work for us we need somebody who's a worker and you have over a million followers

SPEAKER_27: now watching this yeah craziness 15 000 to 1.3 million in this entire journey so uh yeah a little

SPEAKER_45: bit nonsensical but okay this this looks like a good he looks like a worker he's going to work for

SPEAKER_05: us are you going to you're going to cop the insult live as i do it uh all righty it is j15 uh going

SPEAKER_12: to blackjack committee once in three or i've got we have a 14 000 bet going on the lawn for me personally but i actually have some absolute legends with me today i'm betting for the besties from the all in podcast as well they're going to bring the luck having been rolled bold and asked by a young lessee yesterday so 34 000 goes on the line i don't know you guys want 10 000 right not 20. jeez i better not uh not take it put it down for 10. put it down 24 000 is going on the line our dealer looks like the kind of bloke who stops at red lights playing gta we won't hold that again

SPEAKER_55: do it for us i can't believe we've just pulled that off oh my god oh did that did that gentlemen

SPEAKER_58: that has really just happened you've just turned 10 into 25. holy holy cow

SPEAKER_62: oh my god look at sax it's like we can do this for the whole taping that's amazing

SPEAKER_63: i'm just ready for another round we turned 20 10 to 25. all right so are we gonna have a separate

SPEAKER_64: all in balance we just keep rolling it every week yeah can you come back next week and can we

SPEAKER_67: just keep rolling we just keep rolling every week we might have to that is i cannot believe we've just

SPEAKER_72: blackjacked that is unbelievable well tim have a good day all right tim you are a legend everybody

SPEAKER_73: follow tim on instagram let's get him to 10 million let's get i mean you have a future in broadcasting you are going to make millions you you went from the farmhouse oh yeah literally and here we go now you're going to be running a casino i think you should have tim's blackjack you should have your own brand we could build a whole brand on this on insta i tell you what i would have to run anything

SPEAKER_78: if i could just play one hand of blackjack with you guys and i'd land jack ace every week that is

SPEAKER_41: unbelievable and like we said that 15k we won yep that's yours for you and the missus go on vacation

SPEAKER_73: no no no no we said it we said it we want you to do something go with it we're already cashed up you take that 15k you take the missus out you get some first class tickets you meet in italy and

SPEAKER_82: then let's go that's it how about i go first class to the all in summit now that now we could play

SPEAKER_84: some oh we could have a whole session we may or may not have a have a fun casino night there so

SPEAKER_87: this will be fun yeah you gotta come in summit for sure all right yeah get the missus take the 15k

SPEAKER_42: two first class tickets get yourself set up in a nice hotel and we will see you there all right everybody let's get to the docket well thank you tim thank you tim see you later i appreciate it guys

SPEAKER_91: that was awesome i can't believe they have live dealers standing in a warehouse in front of a webcam i don't that that is such a like imagine walking into that facility you're surprised that

SPEAKER_94: facility only has what dealers that's like there's a lot of webcams there i think you can choose at the

SPEAKER_97: what you want to do dale blackjack or yeah or whatever else you want whatever else you want to

SPEAKER_101: be on a webcam we should be doing probably making a porno in the next room above the table and below

SPEAKER_105: there's two different tapings oh my god oh that's rough it's rough so awesome so what happened you dm'd

SPEAKER_41: him that was so yeah we were he you know what no what happened was somebody emailed me and they're like hey that's my mate you talked about he's a big fan of the show it turns out yeah you know

SPEAKER_110: this is the thing about influencers now this is the thing about this micro celebrity stuff we all

SPEAKER_33: we all know each other by default right so he was just slid into the dms there's definitely camaraderie

SPEAKER_116: yeah that was awesome that's awesome i'm so glad he won and uh you know he he basically got smashed in his dms like a thousand people dm'd him oh you're on all in they're bugging out to you on all in and uh so yeah i just said hey would you do a hand would you do your live hand with us and then i didn't i didn't i wanted to clear with you guys before i put our money on it or whatever but i couldn't do that because i wanted to surprise you yeah that's great here we are i did not think that

SPEAKER_119: was real when he popped up i thought it was like a recorded thing yeah all i could think of was do i

SPEAKER_121: look like an ass by saying more so that i just stay quiet more than i was like we start with 50k

SPEAKER_122: let's just see what happens i know you ever feel like when you like tiptoe into the bet with like

SPEAKER_126: a small amount but you're you want to do more and then you win and and you feel like you actually

SPEAKER_127: lost money because if you made a bigger bet you would have made more like i lost 60k

SPEAKER_129: i should have put i would have i would have put 50 i would have won 75 instead we put 10 we won 15.

SPEAKER_134: i lost 60. we made a jake now size back yeah yeah it's a field event

SPEAKER_42: i don't know what's going on anything going on in your life anybody uh been busy having some adventure sacks seems like you were busy last week any anything to report from your side of the world

SPEAKER_123: well should we take you take you guys behind the scenes of of a presidential fundraiser i admit i've never done one before so it was uh it was a new experience for me when you host a president it's just a whole different level of preparation the secret service was out like a week before the president has an amazing advanced team they work out every detail they make a map of your house they really have to think through everything the police shut down the street it's really a very involved

SPEAKER_91: process by the way i went to dinner in the city that night and you know i was right by your house so i drove up the street and they had everything blocked off on like three blocks on both streets like on both sides of your house but there were all these protesters like all throughout san francisco like pro trump people had driven in from all over norcal must have been because these were not san francisco

SPEAKER_20: natives supporters yeah and they came in with these like cars and the streets were blocked it was a

SPEAKER_91: total zoo in the city for hours before and after your i actually stayed in the city that night and i

SPEAKER_156: heard the people going nuts for hours afterwards but it definitely like took over it took over the

SPEAKER_126: city yeah so what's really interesting is that all week the san francisco publications had been trying to gin up protesters by writing about that you know the president's coming to town and protesters are going to show up and in fact there was almost no anti-trump protesters and then a huge number of pro trump demonstrators came out and they were waving flags and cheering along his motorcade as he was coming to the house so the whole protest thing backfired why do you think anti-trump protesters did not show up

SPEAKER_123: what happened i think there's just a big enthusiasm gap i mean i think that the pro-trump people are very enthusiastic and the let's call pro-biden or anti-trump people are just not very motivated right

SPEAKER_163: now so it's exhausting to be against trump for eight years like this has been exhausting people

SPEAKER_123: i think they've exhausted folks uh-huh so anyways who's the founder of intercom he was there and i i think this was actually a good summary because he said that he spoke with a bunch of

SPEAKER_126: people and none of them identify as republican all voted or didn't donate a democrat in the past that's true for me too now they're backing this guy for his policies on war immigration crypto and more this election's referendum on those issues so owen you know came out appreciate his support but it's true the campaign told us that they had more first-time donors at this event than they've seen before

SPEAKER_123: and that's because a lot of these people hadn't supported republicans or hadn't supported trump and they came out so we have a few photos and videos here to take you behind the scenes here we go i think that might be for people so the first thing to say is that president trump is extremely charming he connects with people in like five seconds i mean he meets you and finds something

SPEAKER_126: interesting and or funny to say and he's hilarious i mean when he spoke in the the living room and he talked extemporaneously for an hour he's speaking off the cuff every speech

SPEAKER_123: he gives is different this is him coming into the living room he had made just a few notes about

SPEAKER_126: topics he wanted to talk about on a piece of paper but that was it it was all completely extemporaneous no teleprompter obviously and he's hilarious i mean people don't realize how entertaining he is

SPEAKER_171: what were some of the greatest hints what did he hit on did he hit on low pressure from showers did he because i know he's got like some things he hits on that are relatable was it all like

SPEAKER_73: specific crypto topics tech topics or did he go well he did you know he did talk crypto and it was really

SPEAKER_123: interesting at one point in his speech he called on the winklevoss brothers who were there and i'm only mentioning this because it was already reported that they were there so i don't want to speak out of

SPEAKER_126: school but he said to them he says i know you guys created facebook you know he was giving them credit for creating facebook and then he said we actually created it yeah but he says but but it's okay i mean you guys look like models you were dealt a lot of cards you know a lot of cards i mean

SPEAKER_177: they're very good looking huge iq and i mean look at him yeah and so i thought okay wow like he must

SPEAKER_126: know the winklevoss brothers he must have met them previously and i found out this is the first time that he had ever met them so think about the awareness that he has to know that they're in the audience to see them point them out and then have this kind of hilarious routine with them so he's someone who's very sharp very on the ball very funny and then his energy level is incredible so he had started his day at mar-a-lago at 3 30 a.m pacific time 6 30 a.m his time then he flew to arizona did a trump rally in arizona then he flew to san francisco for our event he spent four hours at our event he could have left an hour earlier if he wanted to then he flew to la for more events the next day there so think about his day and his energy level was just amazing the whole time chamath your

SPEAKER_180: thoughts before this goes on for an hour yeah i'll give you two observations the first is that

SPEAKER_182: i think that there is a huge gap

SPEAKER_183: that gap between how the media tries to portray donald trump and what he's like when you meet him in person and that gap is really wide and so i would say specifically to democrats and independents you really do need to sit in the room and feel what it's like he david david is right he is charismatic he's intellectually sharp and he's funny and when you put that together he can engage an audience for a long time and be totally extemporaneous the other thing i would say that is that he is very polite and he's kind in a way that was disarming and was not what i expected and so i felt that i had misjudged him many years in the past and so i was very glad that i had an opportunity to sit beside him and to actually interact with him one-on-one it was really really engaging and so that's that's more about the style and then about the substance what i would say is it was not just a pro america agenda but it was it's very clear that he was pro innovation so he was really supportive of ai in the details that he talked about he was very supportive of crypto in those details and he's very much low regulation low taxation and so when you put that together it does stand very much in contrast with what the alternative is um and so i think that um both of those things are a reason why even if you aren't willing to vote for him i would encourage everybody to experience what it's like to hear him

SPEAKER_186: freeberg your thoughts on uh all this i didn't go to this i didn't go to that i don't know no i know

SPEAKER_188: just big picture hosting this i want to know why why tamat didn't wear a tie

SPEAKER_190: everyone else is wearing a tie you don't want the tie tomorrow doesn't need a tie he's a baller

SPEAKER_122: all right do you want to say what what trump said to you when he met natalie so it's us talking and

SPEAKER_183: he says you guys are a really beautiful couple uh oh and and i said well thank you and then he turns

SPEAKER_199: to me and he goes well you must be really rich and i started laughing out loud nat thought he was

SPEAKER_160: hilarious so because of the disparity and the looks between you and nat is sort of implying you guys sat next to him at dinner yeah and was that like an hour just private conversation between the

SPEAKER_19: three of you this is the other thing that he does he actually sits there and he says you know folks

SPEAKER_183: i'm happy to continue to talk about whatever you want me to you feel free to ask me questions or feel free to just go around the room and just tell me what you think and what would happen is people would say different things and then he would start asking questions of other people and the thing

SPEAKER_118: becomes almost like this roundtable discussion of topics from we talked about iran we talked about foreign policy we talked about deficits now that's a lot of crypto regulation everything

SPEAKER_207: what did he say about what did he say about deficit and debt well he's very much he's very much on your

SPEAKER_19: side of we have to really figure out how to get spending in order and get the deficit under control

SPEAKER_213: well congrats on it sounds like a successful event for you guys it sounds like you guys are in the halls

SPEAKER_214: of power now and trump has flipped his positions on evs abortion and taking away a woman's right to choose he's flipped his position on tick tock and flipped his position on crypto i give him a ton of credit four flips in a month and he just sweeps all those votes it's pretty smart um and for the democrats who are listening he's also pro losers and you're not listening to people so you're going to lose the election and he's biden's going to get demolished nobody wants to vote for somebody who they think

SPEAKER_219: you're right now jaco you think biden's getting demolished right that's your thought i mean did

SPEAKER_33: you see the video that came out this week where he was at some event and yeah looks it looked like

SPEAKER_223: a mitch mcconnell moment right where he was kind of frozen he was like so i don't want to make it

SPEAKER_118: like elder abuse and i know like people have elder abuse to to sit to say to to be honest about what you're observing especially when it comes to the most powerful role in america yeah he's got a he's got a

SPEAKER_91: he's got to bow out 538 just put out their election forecast showing 51 chance of biden winning 48 chance of trump winning as of two minutes ago yeah who knows i think it's all going

SPEAKER_123: to be determined by the debates sacks you were going to say well i just think what other job in america could biden even be qualified for like what what would you hire him to do is there any is there any mental job you would hire him to do is there any physical job you would hire him to do would you hire him to be your babysitter i mean i don't think there's any job in america that

SPEAKER_236: anybody would hire him to do except for maybe president it's kind of kind of crazy and this

SPEAKER_116: is where like the democratic party is in shambles we should have the highest standards for the mental

SPEAKER_126: acuity sharpness and energy level of our president it's the most demanding job we need a cognitive test

SPEAKER_116: but the democrats need to just look deeply in the mirror and say hey you're fielding a candidate

SPEAKER_42: that nobody's going to vote for that's the problem here and there's not enough anti-trump sentiment and trump's a genius at flipping his position to to get huge swats of voters and so you're going to get

SPEAKER_214: demolished if you don't hot swap them i guarantee you hot swap is coming i predicted the trump flip and i

SPEAKER_183: predict it now i think i think you're right about maybe some of the issues where folks will get much more precise on these issues but i actually think what's happening is that this is really going to be about trump versus kamala harris i don't think biden is going to step down at all but i do think there's a chance a non-trivial chance that biden wins and if he does i don't think he's going to make it four years and so then the real question is do folks want kamala and have they had a chance to

SPEAKER_118: really figure out whether they want to vote for her or not i think that's really where it's going to come down to it's it's really trump versus kamala harris and if you if you frame it as that chamoff then

SPEAKER_42: it's even a bigger trouncing right like if you put biden if you put kamala against trump then what would the it would be a even bigger shellacking yeah in your mind i just think that without saying anything

SPEAKER_183: bad about kamala because i don't know much about her is really what i would say is i don't know much about her and so you can't have somebody who gets into that role accidentally i think there we have to give both president trump and president biden a lot of credit which is they stood in the eye of the hurricane and withstood all the pressure and won and he who wins that way deserves to be the president of the united states she hasn't withstood that and so i think that it's pretty unfair for a lot of voters if there is a bait and switch and so i think that you have to look at both of these two candidates and assign a reasonable probability that both of them make it to the finish line and from at at least what i saw up close i think it's a much higher probability that donald trump does than

SPEAKER_251: president biden does and listen biden hasn't made it to the finish line of his first term it's obvious

SPEAKER_42: to everybody he's in cognitive decline you put up a candidate who's in cognitive decline you're going to lose even against you know trump who people really don't like these are the two most unpopular

SPEAKER_123: candidates of our lifetime i'm not sure about that i don't think it's true that people don't like trump

SPEAKER_223: i think that oh he's got a core but yeah no people the republicans including the republicans including yourself were looking for a different candidate just months ago you said trump was not your preferred candidate and you were all in on desantis so let's not pretend like he was your preferred candidate he's the remaining can so you're yeah i think it's wrong to say that there's not

SPEAKER_257: enthusiasm and love for trump we saw it on the streets we saw it in that room there's some do you

SPEAKER_123: see logan paul meeting with trump four years ago he was for biden now he's for trump have you ever seen trump walk into a ufc event they go nuts for him i'm just saying there's a lot of there's a lot of

SPEAKER_126: enthusiasm and a lot of love out there for trump a lot of excitement i don't see any of that for biden there are people who don't like trump and that drives some support for biden but if you look

David Sacks: at enthusiasm and excitement it's all on the trump side in this we are in total agreement yes there is

SPEAKER_261: no enthusiasm to put somebody in cognitive decline in the white house all right listen we got to get to

SPEAKER_214: the docket we could talk for hours about biden biden biden trump trump trump trump and we will it's

SPEAKER_42: going to be a continuing topic but let's get to a very full docket here breaking news last night tesla shareholders have backed their guy yes there was uh two important votes measures that tesla just had taken with their shareholders the first was approving elon's pay package the 56 billion dollar pay package that was voided by a delaware judge we talked about that on episode 164 back in february and then moving tesla's incorporation from delaware to texas this is also major remember we talked last week about the texas stock exchange here's the two charts massive overwhelming support there were some

SPEAKER_223: notable people who dissented i think norway's sovereign wealth fund and kalpers were two of the ones who were voting against it tesla share price popped six percent on the news you don't want to lose elon at tesla that would be really bad so your thoughts chamath on this vote and maybe the move and

SPEAKER_183: what that represents it's kind of odd that we're in this crazy place similar when that original package was unveiled there was a lot of people including me who thought there's no way he's going to hit this it's just way too aggressive and it requires so many things to go right and so i think in part that's why three quarters of the tesla shareholders approved it then 73 is not squeaking over the line it's not 50 percent plus a vote it's it's a super majority and that excluded kimball and elon shares exactly so and then i think you have this very dangerous form of judicial activism which essentially ignored the will of the shareholders and tried to create some administrative ruling that threw up this big question mark so then in in typical elon style he's like great we're just going to get them to voted again and then yet again it passes and it looks like it's going to pass by around 73 but the problem now is that it's still not clear what happens i think that there's still some question marks where this may not nullify the judge's decision it may actually create more question marks so hopefully this gets sorted out he should get this stock he never should have or these options he never should have had them taken away and so i just hope this thing yeah it becomes a nothing burger sacks you have

SPEAKER_42: thoughts on this outcome is it surprising to you not surprising and then i i think the jurisdiction thing is bigger than maybe people are thinking because delaware has been the standard for incorporating

SPEAKER_270: companies but elon is putting his companies in nevada and texas we saw the stock exchange uh last week

SPEAKER_214: getting back to move to texas this does seem like there's something about jurisdiction in the water

SPEAKER_123: what are your thoughts sacks well i think it's ironic that the winning margin 73 is the same margin by which shareholders approved his comp package back in 2018 so again they got 73 voted for this 2018 now they voted to reapprove it by the same margin and the reason why they had to do it is because this activist judge in delaware avoided it on the grounds that somehow the original shareholder vote wasn't

SPEAKER_126: valid and i think this is interesting that the margin didn't change because it shows that shareholders aren't ingrates elon delivered what he promised and now shareholders are upholding their end of the bargain and certainly they didn't have to take that position there were different groups like calsters who basically took the position what have you done for me lately you know yeah you delivered but we don't have to pay you because the judge so we're not going to pay you and i think shareholders wisely approved the package because i think there was some chance that if they reneged that elon could leave the company and i still think he's absolutely vital to all the innovation that's going to come in the future from tesla and you see this the stock is ripping on the news is up about three percent today in a down market so clearly the market thinks that securing elon's future at the company was the right decision and shareholders did the right thing yeah in terms of the downstream effect on this like you said it raises the specter of delaware being an activist state that's not why anyone incorporates in delaware the reason why you incorporate in delaware is because you think it makes you subject to an extremely predictable body of corporate law that's been tested and become bulletproof over many many decades and now all of a sudden you have to worry that maybe a judge will set aside a shareholder vote for reasons that seem incredibly specious especially in light of the fact that the shareholders just reapproved it so obviously the shareholders

SPEAKER_273: didn't think they needed your protection and they voted to reverse you and moreover tesla could still be subject to paying the legal fees of these trial lawyers who've asked for literally billions of dollars in legal fees that the judge still has to rule on so imagine this imagine that the shareholder vote gets set aside by the judge it then gets reapproved by shareholders but the trial lawyers who brought this nuisance suit can now get billions of dollars if that happens i mean delaware can kind of kiss its status

SPEAKER_270: as the premier corporate law state away friedberg is this a john galt moment is this where capitalism socialism and the state collide and people now start thinking hmm maybe we need to create a new jurisdiction

SPEAKER_278: a new framework that's a good question i think it's a good example for capitalism and i think it should

SPEAKER_91: shine the light on how other ceos are getting compensated at public companies where there's typically a multi-million dollar or multi-deca million dollar pay package that has no dependency on the performance of the business you can make tens of millions of dollars a year and not drive shareholder value and i think that the way that this deal was structured where elon effectively got 10 percent of the company for 10xing the stock should be an example that other boards should actively consider when considering both candidates and their appetite for this sort of a package and their compensation packages themselves the way executive comp typically works at the board level at public companies is you hire these comp consultants and the comp consultants come in and they use comparables which basically means let's do what everyone else does and so you have this self-reinforcing system of compensation and benefits for ceos that bumps up a little bit every year that ultimately has not has some degree of ownership in the stock but fundamentally has very little downside and elon had no guarantees in his pay package when he got this comp package originally in 2018 and he got 10 of the company if he 10x the stock which is what he did i really think that it is worth having this become the kind of beacon for all boards to consider and it seems like shareholders in aggregate are applauding the concept and look elon is a special guy and he gets special treatment but i think that it moves the needle and should move the needle a little bit for other ceos and other boards to stand up and say we should think about something that looks a lot more like this than what we typically do and i think you would find a very different cast of people showing up to become ceos and to drive performance out of these businesses and a lot more risky and aggressive

SPEAKER_282: behavior than what i think you typically see in big companies that are in maintenance mode what do you guys

SPEAKER_183: think of the organizations that initially voted yes and now voted no they basically are saying look i

SPEAKER_91: mean if you think about it you're a big public company i don't know what iss recommended this is institutional shareholder services they recommended no both times right and so iss basically what a lot of big public fund managers will follow when they make their votes and so if i'm a shareholder that's not what i'm that's not what i'm saying but like let's say let's say that i'm black rock or i'm a shareholder i'm not going to put black rock as some big shareholder tesla stock why would i vote

SPEAKER_219: to give away 10 of the company when i don't have to yeah very simple because he would leave uh morals and

SPEAKER_42: ethics matter and you want to do the right thing and you want to incentivize capitalism to operate properly and want to incentivize the people who take on the burden of running these companies and the people who voted against it i think people should just make a list of those individuals

SPEAKER_240: and they should not do business with them because if somebody is going to double cross you they've shown you who they are these are people who double cross them they got the benefit and then they stabbed them in the back make that's exactly what they did that's exactly what they did it's worse if

SPEAKER_64: they voted yes the first time and then they voted no no i'm saying then maybe you're just against

SPEAKER_126: the deal but if you're yes no then that's a reneg then you're a true scumbag you're a scumbag

SPEAKER_183: is that public anywhere who did that yeah there are a bunch of folks that said that they you know i think it was calper that voted yes and then when they were on trying to explain they were like tap that dancing in like corporal jargon but really what they are scumbags jason you're right they are

Chamath Palihapitiya: morally and ethically void and they're reneging and this is the one rule in business you're not allowed

SPEAKER_42: to do and the people that do that are these penny pinching scumbags i'm not saying a blacklist but i would say making a list of people who maybe you want to consider not doing business with is how i

SPEAKER_123: would frame it these are people they're probably they're public market investors they're not private investors they buy the stock on the open market so they don't have to worry i mean i think the question

SPEAKER_91: is what are the chances that elon leaves the company if he doesn't didn't get the pay package the

SPEAKER_296: chances i think that was a risk and i think that was a non-zero possibility think about it

SPEAKER_298: yeah non-zero possibility you made an agreement with somebody and you shook their hand

Chamath Palihapitiya: yeah why does he care whether he would have left or not left this is i have to do the right thing yeah you have to do the right thing you promised the guy x amount of money for doing y amount of things he did the y things and then you had a judge come over the top because of somebody who owned 10 shares and all i'm saying is if you don't have the intellectual intelligence to look past that and say wait a minute we just paid the guy to do this work and now we're going to renege they're gaming the system i just think that like how can anyone who is capable of doing a job sign up for a pay package how could anyone and the people that will sign up are these like middling corpo people who will accomplish nothing and will run these companies in ways that then speaks to organizations that have just proven themselves to be totally unreliable the irony of the thing is that

SPEAKER_91: these folks thought that they were getting a 10 free roll when they voted no and the reality is that by him getting the pay package the certainty of him sticking around at the company caused the stock to go up by 10 so they actually had the calculus wrong that if they had gotten their way the stock would have declined by more than the 10 free roll they thought they were getting this is i think that the main point and 10 being the ownership of the company that he gets yeah

SPEAKER_42: the pay package was laughed at on cnbc by all the experts there is no way for him to hit this stuff

SPEAKER_73: if he does hit it he's getting a fraction of the value of it and this is why stock is such a valuable device if employees get stock and the ceo gets stock and everybody in between and retail investors get it and endowments get it and your retirement account gets it everybody rose in the right direction is it perfect no people can buy back their stock they can do a little gaming on the margins but it is the most pure system we have everybody has a share of the company so if you're a socialist you know like you should actually kind of appreciate how stock works that everybody has a chance to buy it everybody has a chance to participate this is the model we should be using for all ceos they should all

SPEAKER_42: get a massive package if the stock goes up into the right it's so obvious and this was so unfair let's

SPEAKER_307: see this flipper i want to see their explanation the compensation is commensurate with the performance of the company did you vote for it in 2018 i believe we did vote for it in 2018 but this is about long-term

SPEAKER_310: value but hold on hold on but do you believe you were duped in 2018 no i believe we used the information we had available and made the best choice okay so here's what i find so interesting about this particular choice 73 i believe of shareholders voted in favor of in 2018 a judge has said that shareholders were not informed properly right if you talk to most shareholders by the way especially big shareholders they say we were not do we understood completely what we're doing and we were on board with this now that this opportunity almost opportunity has arrived on your doorstep uh to say to actually rethink this if you will there's a view that oh maybe maybe we're not getting the value uh we thought we should you thought you should get it but he's worked by the way under the assumption that he was hitting the numbers right and and dealing with the contract if i told you that you were being paid a certain amount of money in 2018 and then i called you and said actually you know what we're not going to give you that money anymore what would you do that's a

SPEAKER_322: great question i i would um i would go to my board you know i would talk with my board this woman is

David Friedberg: so smug what is her name karen frost i don't think she's smug sorry marshy frost oh sorry that was karen

SPEAKER_183: frost i think like this is emblematic of the kind of person who is incapable of actually doing the right thing and there's a lot of these people that run a lot of these organizations that i mean what what kind of an answer is that i mean it was a non answer that's why i said it was smug let me just ask each of you you've all started companies some of you are still running companies would you take

SPEAKER_244: money from her and calpers after that statement hard no for me but remember she's not investing in

SPEAKER_159: private companies she's buying stock on the open market so calpers announced that's venture

SPEAKER_199: firms yeah calpers announced that they're an lp and they're starting to do directs oh okay i didn't

David Friedberg: know that yeah they're trying to catch up they've been behind on venture let's call this whole thing

SPEAKER_126: what it is it was a heist you had these trial lawyers they find a name plaintiff who's got nine shares and on a contingency fee basis they go after elon's pay package what are they looking for

SPEAKER_328: 5.6 billion dollars how does a lawyer make five billion dollars that's what motivated this whole

SPEAKER_126: thing they don't care about tesla they don't care about the company they don't care about shareholders they're looking for a giant multi-billion dollar contingency fee payment and they took their shot and they found a delaware judge to basically agree with them even though shareholders approved it

SPEAKER_273: and then shareholders reapproved it so my question is how much these trial lawyers gonna get is a judge gonna award them billions of dollars for what was clearly now a mistake to avoid a pay package that shareholders wanted to stick with if they award these lawyers billions of dollars which is what they're seeking no one's going to want to do business in delaware anymore because it subjects you to these stick-up heists by trial lawyers so i think that's going to be the next big shooter drop is what do these trial lawyers get awarded well what are they gonna get because they also wanted to get

SPEAKER_64: paid and tell us the shares no i'm serious here's an idea buy the shares yourself yeah they said we don't like your management of the company but uh we will take care of your shares yeah yeah by the

SPEAKER_335: way they got their shares and then they voted to give you on the next pay package so it's just a

SPEAKER_336: full-on grip they secure the bag but delaware is supposed to protect corporations against this grift

SPEAKER_110: that's why people incorporate there when people ask why does delaware have this special place

SPEAKER_33: that everybody decided delaware would be where we incorporate it was because it was predictable lawyers felt this was the most predictable jurisdiction that would be the most shareholder

SPEAKER_223: friendly most shareholder thoughtful whatever word you want to use they would defend the the shareholders

SPEAKER_183: and here we are the last company i started 80 90 we incorporated in nevada and i just redomiciled

SPEAKER_339: a couple of other companies that i own into nevada as well it's becoming a trend we're having

SPEAKER_341: very big discussions about this in the startup community of where to domicile your company and

SPEAKER_42: more to come on this one okay let's keep moving apple had a huge announcement this week apple has entered the chat they announced apple intelligence get it ai and they have included a chat gpt integration from open ai this was really i think impressive in many ways because people thought apple was far behind it was a banger of a demo a lot of un apple like future looking demos so none of these demos that we're going to show are coming to your phone this week they were really i think playing catch up with microsoft and it worked stock is up 10 percent they added about 300 billion in market cap now the top three market cap companies are all driven specifically by the perception that ai is going to be the next technological wave microsoft apple and nvidia all cruising around about 3.2 trillion dollars and this top three keeps uh flipping back and forth apple had passed microsoft in market cap here's the features i'll just give you a quick overview of what we're seeing it's added uh grammarly like features great product randomly i'm not an investor but they added the ability to proof get grammar help ai will transcribe and summarize phone calls with permission obviously double opt-in it will prioritize notifications and i message and email that are super important you can do smart replies uh a company where an investor in superhuman already does this kind of stuff and they're bringing ai to siri and this is going to be the big win in my mind you're going to be able to say things like you want to order

SPEAKER_223: something in doordash or uber eats or instacart and if the ai siri will be able to dip down into apps they're building a whole app ai interface much like the rabbit device ceo talked about doing and i

SPEAKER_42: think this means that apple is going to win the ai consumer there is a deal with chat gpt that i'll get your feedback on gentlemen in a moment according to sources apple is not paying open ai it's a non-exclusive deal chat gpt can be swapped out apple is also talking to google about a similar deal obviously it doesn't take a genius to predict that apple is going to auction off the llm integration i think to the highest bidder they did that with the search deal google pays apple 20 billion to be the default search engine that's about five percent of apple's annual revenue if you didn't know and it's all profit right so this is a huge profit moment i'm going to pause there for a second before i get into

SPEAKER_270: more of this uh and just get your general reaction chamath i think you nailed it right at the beginning

SPEAKER_244: the thing that i was struck by the most in this is we went from a phase where in the steve jobs era

SPEAKER_183: these events were because you were about to unveil a product that was done and shipping as of that day and then at some point we transitioned to they are talking about products that they intend to release within a year now we've shifted to the part where they're talking about software integrations from a third party that will happen in a year so if you just look at it sequentially it's a little disappointing in that sense because for a company this big it's really not much of anything you can't

SPEAKER_244: really touch it and feel it and it's going to take a year before we really know what the totality of all of this is meanwhile the economics of the chat gpt deal were leaked and there's no money on either side

SPEAKER_183: so i don't know it's a little bit of like it's really not much of anything to be honest because there's nothing we can actually play with and experience freeberg your thoughts on the vision

SPEAKER_171: here at least and to chamat's point apple used to release dope stuff fully baked ready to go and

SPEAKER_42: now we are increasingly see them talking about what's coming next year or at some point do you think

SPEAKER_270: apple's going to win the consumer do you think apple's falling behind should they have built their

SPEAKER_91: own llm by this point i'm not sure i think what they have shown is more of a glimpse into the future of hardware where for the last two decades or so hardware has mostly been a portal to access the internet and use the internet through apps or through the browser and hardware has done a good job of enabling that but i think we're now going to see a much more tighter coupling where the hardware becomes more valuable and it's less of this kind of funnel for apps to flow through and data to flow through but the hardware actually becomes the value greater and you see a much more tighter integration in the hardware os and the ai or the software that enables you to do lots of things you're no longer just gonna use the hardware to access an app to do something so a lot of the companies that are app developers are likely going to end up becoming services developers that enable that hardware ai to do something for you and this coupling between hardware and software because of the way ai works is i think becoming more apparent not just in consumer devices but we see it in the data center and in the enterprise stack as well you know we've seen that obviously there's this tight integration between the chip and the software stack that grok built there's a tight integration between google's tpu stack and then the ml instances and the tools that you can use in google cloud that are optimized for use on that tpu hardware nvidia has got a big effort obviously in continuing to build out their software stack that sits on top of their hardware and works in a more coupled way and then google has this ability to kind of realize i think a similar outcome with pixel phones which is a pretty sizable opportunity for them and then all of the hardware manufacturers can probably grab more value now as they build their own ai into their os and you start to see more of this value realized by the hardware companies so i think that there's this really interesting shift where we've all thought about hardware as being this like commodity where there's some degree of like improvement or innovation made over time but now it seems like a lot of value might actually get captured by hardware companies in all points in the value stack so it's an interesting moment and i think that this just shines a light on that trend that i think is going to play out over the next couple of years

SPEAKER_42: it's clear sacks that right now to enable these features you're going to have to have a pretty solid device they announced here at the keynote at wwdc that you need to have an m1 chip or better iphone 15 or better so and having all this local data is a huge advantage for apple they've got your messages your phone your calendar your photos your app behavior the data inside of your wallet all of this gives them a huge huge advantage so i guess the question is do you think this renews the apple franchise and people start upgrading their phones again to get all these new features david sacks

David Sacks: well the market definitely thinks so because apple was up big on this news and even if it was

SPEAKER_123: largely vaporware at this point the market definitely liked where they were going and

SPEAKER_126: frankly apple did exactly what i said they should do last week which was to reinvent siri as an llm with the ability with the capability to reach into apps as an agent and take actions on the

SPEAKER_273: user's behalf that's what they effectively announced however apple took a shortcut to get here they

SPEAKER_126: partnered with open ai and this is something that i don't think they've ever really done before at the operating system level apple is famous for being vertically integrated for being a walled garden for being end-to-end they control everything from the chips to the hardware to the operating system and

SPEAKER_273: they don't let anybody else in until you're at the app store layer this is allowing somebody in beneath the level of the app store this is allowing someone open ai to get access to your data and to control your apps at the operating system level and i think you know elon pointed out wait a second what are the privacy implications here and i think there are major privacy implications there's simply no way that you're going to allow an ai on your phone to take all these actions on your behalf without giving that model substantial amounts of user data and that is a huge change for apple remember apple in the past has been the advocate for consumer privacy there's a whole issue of the san bernardino terrorist where the fbi went to apple and said we want you to give us backdoor access to their phone and apple refused to do it it went to court to defend user privacy and furthermore one of apple's defenses to the arguments the antitrust arguments for allowing sideloading and allowing you know other apps to get access to parts of the operating system as they've always said we can't do this because it would jeopardize user privacy and user security well here they are opening themselves up to open ai in a very deep and fundamental way in order to accelerate the development of these features in other words they took the shortcut they could have developed the lm themselves they could have developed the ai themselves but they chose not to do that and i think this is going to open pandora's box for apple because again they've proven that they can open up the operating system to a third party now

SPEAKER_361: and who knows what the privacy implications of this are going to be it turns out apple has addressed this

SPEAKER_42: head-on they hear the concerns and much like when you share a photo or you share your location it's going to ask you over and over again do you want to let this app do this so they're aware that this is an issue they brought up privacy every single time but people don't trust open ai and they do trust apple so this is strange bedfellows to be short chamath your thoughts i think that apple really cares about

SPEAKER_363: privacy when they're trying to hurt a company they don't like i.e meta and they're willing to figure out a way to work around it when they're behind that they clearly support open ai yeah well you're

SPEAKER_171: behind you know you behave differently than when you're ahead and you have your monopoly freeberg

SPEAKER_223: you wanted to add anything here before we move on to the next story okay in related news open ai

SPEAKER_214: has hit a run rate and this is kind of stunning of 3.4 billion dollars that means they've roughly

SPEAKER_223: doubled their monthly revenue in the past six months or so these are not official numbers open ai is

SPEAKER_42: denying them but here's a chart that somebody put together based on all the different leaks and approximations of what open ai is making the reason this makes no sense to chart and it shows a year and then it shows a month a month a month a month is because there's been different leaks at different points in time but just to normalize this in 2022 for all of 2022 before they really had a lot

SPEAKER_223: of customers 28 million and now on a 3.4 billion dollar run rate again it's a pretty stunning number

SPEAKER_93: well you can true you can do apples to apples here because like 2023 jan is 200 million that means

SPEAKER_118: that june is 300 million if they're on a 3.6 billion dollar run rate so yeah and so if we were to even

SPEAKER_42: look at you know the number of people who work there 770 if you put that at 500 000 a person some engineers getting a couple of million some people may be getting less they're probably only got a half billion dollars in salaries a year who knows what they're spending on the infrastructure for this if you were to do a valuation on this everybody knows they sold a bunch of shares in secondary at around 80 billion which means they're trading at if these numbers are true 25 times for revenue

SPEAKER_270: which is close to what nvidia is trading at right now obviously they're two very different businesses so

SPEAKER_231: your thoughts on this as a sas company obviously the majority of this revenue is consumption based

SPEAKER_171: some portion of it is sas base reoccurring like subscriptions we pay for at launch my venture fund we pay for 6 000 a year to have all 20 25 people on chat gpt as a corporate account maybe it's

SPEAKER_214: 250 300 a year per person so what do you think of this business sax and how fast it's growing

SPEAKER_171: obviously some of its api consumption based not reoccurring some of it is reoccurring first of all let me

SPEAKER_123: say that you know we've talked about ai general hospital and all the soap opera issues around open ai and you know judge tax had opinions on that yes but putting that aside i mean everyone acknowledges

SPEAKER_126: that their products are awesome i mean open ai makes really great products with the chat gpt 4o being at the top of the list and i talked about how when we moved from chat gpt 4 turbo to 4o at glue the speed and quality went up you know at least 2x and it felt like 10x so they have the best language model as of this point in time and they also have other products that are really great like the whisper api which does transcription i mean there's a whole bunch of tools they have that are great for developers so nobody's taking anything away from them on the product side and i think you're seeing that in this revenue number now if i was to try and take apart this business as an investor i would separate the b2c business from the b2b business the b2c is a consumer subscription plan people paying 20 a month i'm one of them i pay the 20 bucks a month it's probably the only llm that i would pay 20 bucks a month for how often you use it daily weekly monthly i'd say a handful of times it's it's not to be honest it's not like a daily use for me but i i probably use it every week i would say at least once yeah so i still use it i have to say though that the other llms are catching up and if gemini ever gets good

SPEAKER_273: enough or you know when grok gets to the next level am i going to stick with that 20 a month plan i'm not sure it depends whether open ai can really maintain the the leadership it has or the perception of

SPEAKER_126: leadership okay so that's half the business and then the other part of the business is the b2b which is the the api products that effectively they're selling to developers and that's where i would

SPEAKER_273: place the future value of this company i mean as somebody who invests in sas when we see a business that has b2c subscriptions and b2b we place all the value on b2b and the reason is because historically

SPEAKER_126: the churn rates in b2c are too high yep five to ten percent churn rates are common 50 per month per month 50 churn a year very common open ai may not be experiencing that yet but it's very hard to avoid the downdraft of consumer churn and and you know on the other hand on the b2b side a good b2b business has expansion 120 150 expansion year over year from same customers in other words they're ordering more

SPEAKER_171: so you would compare this business to amazon web services google cloud azure that's really the

SPEAKER_273: business here yeah the first thing i'd want to know is how much of the 3.4 billion is consumer and

SPEAKER_270: how much of it is is developers we'll find out eventually chamath your thoughts on open ai's

SPEAKER_183: surging revenue i'm kind of in david's camp which is i think to the extent that the business has a large terminal value it's going to be because of the enterprise cash flows the thing to keep in mind is that i still haven't seen enterprises building production level products using ai it's all experimentational right it's all experiments now that's nothing against open ai it's just a commentary on the fact that we are at a very very early part of the cycle where when you use this term blast radius right what are you referring to you're referring to this idea that

SPEAKER_244: you're stringing together elements of a model or multiple models that each have some non-trivial error rate and by multiplying all these error rates together you get your final product but the

SPEAKER_183: unfortunate reality in most ai workloads is that you end up with something that's not very good and that's not the fault of open ai nor is it the fault of llama it's just the nature of how these bottles work and the fact that you know you've gone from something very you know deterministic to something that's very probabilistic and we have not found a way to create extremely high quality experiences we as an industry that make this cost justifiable so right now as you said jason most of that is toy apps and a lot of experimentation will we get there i absolutely think so but we're not

SPEAKER_244: there yet so i suspect that most of the revenue then is on the consumer side right now actually and so i just looked at google trends and i first looked at the united states and i just wanted to understand

SPEAKER_183: how is the traction and what's interesting is is that the traffic in the united states is down about 25 26 percent since the end of the school year which i think reinforces this belief that chat gpt has definitely over indexed in that young people's cohort where they rely on it to write essays or what have you but then i looked outside the united states and worldwide and what's interesting about that is that's actually still growing up into the right so i think you have then an arpu problem which is the same thing that we had to deal with at facebook which is we have these extremely

SPEAKER_244: valuable users in america they asymptote at some point and then we have to grow in other markets but those markets aren't nearly as lucrative right they just don't generate my user arpu

SPEAKER_199: per year is single digits maybe it hits double digits as opposed to the united states where it could be triple digits right so then i don't know i would just wrap up by saying that i think that

SPEAKER_183: it's just if this number is right it's just an incredible testament to what they've been able to uncover and create in a short amount of time that is legendary stuff yep but what i can tell you in working with enterprises around these ai experiences through 80 90 we have not yet seen production quality models being deployed in the wild that are dealing with very very important business processes

SPEAKER_244: which means that most of the revenue right now is probably consumer oriented okay freeberg you i

SPEAKER_341: don't know if you got to see sunny's talk at liquidity last week but he talked about how

SPEAKER_42: many of the cios ceos are looking for open source solutions here 80 of them want to go open source they don't want a proprietary model uh to invest in but the best model right now is a proprietary model so what do you think about open ai's revenue surge is it sustainable or are there 20 better open source projects that are going to be death by 20 open source project cuts and chemats general feeling here that

SPEAKER_214: hey it's not ready for prime time yet it will be but we're in the ai dial-up era i to use an analogy here hey you can see the promise but it kind of sucks in terms of reliability maybe open ai is aol

SPEAKER_91: right like i think that there's going to be a google that'll show up that'll maybe it's google grab a large part of the value here or you know ultimately the cost comes down so much with the open source tools i do believe that these open source tools are incredible i mean the the open source llama instances are like they get you 85 to 90 of what you're looking for so if you're an enterprise user why would you pay thousands of dollars for the open ai platform when you can use llama and you can tune it and you can build your own front end to it your own integration with your own data etc etc it's just early days for enterprises figuring out how to do that but i do really believe that the future is enterprises companies building their own llm driven tools for both internal and external products that leverage smaller open source models and that we're current kind of in this you know dearth of people's understanding and ability on how to actually execute against that which makes the default to be go to the chat gpt interface i will also provide a counter i just did a big project at work this week we had a like a big off site with 20 people involved and everyone used chat gpt to get ready for it so there was a ton of analysis a ton of data gathering a ton of reporting needed for the off site and rather than hire a third party or have people go out and source data themselves a lot of us including myself i prepared like maybe a quarter of the material just use chat gpt and pulled the sources to make sure it was all kind of did you did pull sources

SPEAKER_297: and check facts right you do have yeah so we pulled the sword and there was a lot of wrong stuff just

SPEAKER_388: to be clear but for our purposes you're at a ballpark percent i would say 25 of it was like wrong and

SPEAKER_91: then you had to clarify but the truth is for this particular application it didn't matter we were making some approximations on markets and sizes and and various facts that we were kind of using to

SPEAKER_297: do some strategy stuff but and some product development stuff so i would say like it wasn't

SPEAKER_398: useful you found a hundred percent and i would say it saved us hundreds of hours hundreds of

SPEAKER_244: hours and were you paying them an enterprise license or a consumer license 20 bucks a month

SPEAKER_171: what is that it's the same thing for the enterprise jamath you can just sign up and for 20 bucks a

SPEAKER_244: month you can have your whole organization on it yeah no fever like you're just paying it yourself or you pay for everybody at the hollow i think everyone has the right to pay for i think other

SPEAKER_91: people at the company pay for it too i pay like i i have my i don't have like a corporate

SPEAKER_171: thing set up so everyone basically took the time to set up the corporate it's really easy and then anybody with your domain can sign up and let you track it but it doesn't consolidate that's what i'm looking for chmop is the ability to consolidate all the searches in one place and everybody can

SPEAKER_402: share their searches but like i said the application is what i was doing right in some way sacks

SPEAKER_91: collaborative ai it's an application today meaning like we go to the app we ask questions we get answers and we use that and i actually had it pull tables down and i dropped those tables in like all sorts of great stuff it could do you know do some analysis pull out the stuff what the analysis showed understanding unit economics on various businesses all this sort of stuff that it consolidated for us definitely makes everybody bionic i agree but what it's what it doesn't do yet is take all of our internal data and all of our internal tooling and kind of reconfigure how we use that so we're still paying for a whole bunch of enterprise software and sas licenses for things that we know we don't want to be paying for in the future and we're now starting to figure out how can we build our own ai based software to replace a lot of the dependency we have on third-party software that uses our internal data for our internal consumption so there's a lot of that's still ahead of us and that's why i know and we're pretty progressive so that's why i know it's early innings because i see the way we're going to use it and i know that we're probably well ahead of a big enterprise companies that are more traditional and so i can see like a couple years from now all these big enterprises are going to figure the same thing out and then you're not necessarily going to need to pay for this chat gpt stuff if

SPEAKER_171: there's an internal tool and an internal lm that young people are really getting dependent on this and they use it constantly we're on our investment team meeting we're evaluating a company for real estate brokers we're evaluating a company for therapists and like tools and sas products for

SPEAKER_42: those type of people and when i ask them well how many what's the total addressable market boom three or four researchers and analysts on my team are doing that search finding sources and saying there are this many therapists this many social workers this many real estate brokers this many bias and then i'm saying well did you source them like yeah of course i asked and like one of them was like well i asked claude i asked gemini i asked chat gpt i asked them all for sources i cross-referenced them so they're like you have three of these things open and so just everybody's knowledge level goes up but you do have to check it because one out of four facts is probably wrong or cited wrong and so it's going to be

SPEAKER_409: i think one out of four is about the right number yeah it's about one and so that's interesting so

David Sacks: you use multiple lms to find the hallucinations yeah basically you cross-reference that's actually

SPEAKER_160: pretty interesting i jump on gemini too so i use gemini.google and i use chat gpt and i just make sure that stuff lines up just sanity check things because i'm but you're not going to process a lot of

SPEAKER_63: data these right how many would you be willing to pay for i could pay for five you'd pay for five

SPEAKER_231: different llms well think about it if somebody's salary is a hundred thousand and these cost a thousand dollars to have five of them of course i'd pay for five okay so as a work tool you know

SPEAKER_126: i guess there's three categories to their business now that you're raising this there's sort of the consumer subscriptions yeah then there's the business subscriptions which are basically the consumer product but a company's paying for it correct and then there's the developers

SPEAKER_223: paying for metered api usage yeah yeah this that that enterprise is really powerful yeah it's kind

SPEAKER_126: of like microsoft office or google docs where consumers use them for for free or want to use them for free and then companies will pay for it and that's where the real money is anyway this is going

SPEAKER_341: to make people bionic i think all organizations will have the same number of people for the next

SPEAKER_42: couple of years and then just individuals will get better and better at their jobs and so efficiency is going to go way up speaking of efficiency the market is ripping we're going to get a little macro here in three acts inflation has uh been broken i think it's safe to say we're down at 3.x 3.3 lower than expected and hiring wages are surging and stocks are surging so let's go through it here and get the besties take on the vibe session i actually disagree with that framing jason yeah i agree i disagree disagree with it let me go through the numbers and then you can all disagree that's how that's how this works folks inflation print came out 3.3 percent lower than expected here's your 10-year chart super easy to explain what's happening here rates were low for a long time inflation cruising at about two percent and then lunatic spending during covid and we added a trillion to the national debt and then biden added a bunch everybody getting those stimmy checks and ppp loans and so if you look at inflation here we were just cruising along at two percent massive spike up to nine percent year over year inflation and now coming back down to three point x and the

SPEAKER_223: question is can we get to a two handle and the rates went up faster than in ever in history here's the fred chart you can see there in and this goes from the 80s so you see that massive spike when they tried to break the back of inflation previously so this is the fastest ever gone up and here we go the common sentiment here is that savings has been burned off and people are starting to have debt and so now we are in uh act two the lowest unemployment uh rate of our lifetime continues if you believe those numbers some people do some people don't labor department reported 272 000 new jobs in may smashing crushing the 190 000 estimate uh and then act three average hourly wages up a massive four percent from last year at 35 an hour that also topped estimates so if inflation is at three point x and hourly earnings are at four point x maybe consumers will start feeling better about the economy eventually they obviously uh have been pretty shocked by that nine percent inflation and only four percent growth here's your chart from fred of the hourly earnings of all employees and you can feel

SPEAKER_42: pretty good about that where everybody's wages keep going up the question is do they go up faster than in inflation okay so there's my framing of the situation freeberg tell me what i got right tell me

SPEAKER_424: what i got wrong i think there are three numbers that matter okay inflation rate the growth in gdp

SPEAKER_91: and the cost to borrow the growth in gdp in the first quarter of 2024 was a lousy 1.3 percent on an annualized basis and even if the rate of inflation came down we are still inflating the cost of everything by north of three percent so the economy is only growing by 1.3 percent and it costs more than three percent more each year to buy stuff so that means everyone's spending power is reducing and our ability and our government's ability to tax is declining because the economy is only growing by 1.3 percent and the most important fact is that the interest rates are still between four and five percent four and four point seven percent that means that to borrow money cost 4.7 percent but the businesses the economy on average is only growing 1.3 percent so just think about that for a second we have a tremendous amount of leverage on businesses on the economy on on the federal government that leverage the cost to pay for that debt is more than four to five four to five percent but you're only growing your revenue by 1.3 percent so at some point you cannot make your payments and the rate and the goal and that was that is true for consumers that is true for enterprises and it is true for the federal

SPEAKER_219: government just to point out here what you're saying the goal was to in fact increase

SPEAKER_171: the interest rate to cool the economy right which they got too late but that was the goal that was

SPEAKER_284: the explicit goal was to cool the economy yeah the whole purpose of raising rates is to slow the flow

SPEAKER_91: of money through the economy and by slowing the flow of money through the economy there is less spending which means that there is you're reducing the demand relative to the supply so the cost of things should come down you should reduce the rate of the increase in the cost of things now if you click on this link nick that i just sent you in response to the condition in the economy today elizabeth warren sent this note to jerome powell three days ago saying dear mr powell or dear chair powell we write today to urge the federal reserve to cut the federal funds rate from its current two decade high of 5.5 percent the sustained period of high interest rates is already slowing the economy and is failing to address the remaining key drivers of inflation she goes on to point out the fact that consumers are suffering businesses are suffering and the strain of these three numbers is really starting to show on individuals on businesses and obviously on the power of the dollar but the dollar is a different story so yeah the condition of the economy in the rest of the world and we're in a very unique position but i think that things are not as rosy now there's a certainly a shift in the market because what this tells us is that the timeline at which the fed will cut rates is coming in a little bit relatively speaking and so the market is saying okay let's adjust to lower rates the 10-year treasury yield has come down a bit but we are still in a difficult situation for people and for the uh for businesses and you have elizabeth warren who i think is the voice of small businesses and consumers she's

SPEAKER_84: kind she's she's trying to be the voice of those groups yeah that's obsessed and saying this is very hard

SPEAKER_42: on people chamath what's your take on this we have a slowing uh gdp growth we have inflation going from nine down to three we have wages going up four percent how do you make sense of all this

David Friedberg: so you feel like sorry freebrook are you saying we're gonna have stagflation or we have stagflation

SPEAKER_91: right now definitely but i uh what i'm saying is that it's not a rosy picture just because labor rates are going up if the labor rates aren't going up and you can see this ultimately the best number for this is the sum of gdp growth so in aggregate if the revenue of everything combined which is gdp isn't going up faster than the increase in the cost of everything people businesses and the government can't afford their stuff and that's fundamentally what's going on right now what we need to see is a normalization where gdp growth is greater than inflation rate and as soon as that happens then we have a more normalized and stable economy so right now things are not stable there's a lot of difficulty and strain in the system i will put myself on the other side of that trade if if

SPEAKER_183: there was one if i had to simplify the united states economy remember gdp is 70 percent spending by individual people and so people can spend two things savings that they have or credit that they have

SPEAKER_244: and what's interesting is that we have finally burned through this is what this picture shows all of the money that folks had in their bank accounts and so what does that force people to do it actually forces people to re-enter the workforce so that they can start to make money but the problem is that

SPEAKER_183: companies have been shrinking and have been on a defensive posture and so as a result which you started to see this past unemployment report unemployment is now ticking up because when these people re-enter the workforce there are no jobs for them to have people are filing incremental unemployment insurance claims states like california in fact the state of california was the worst off this past month so i think what we're starting to see is that for the large portion of the economy we've run out of cash to spend and as a result i do think that we are going to see an economic slowing and i think that that will create not just enormous empirical justification for jerome powell it'll be exacerbated by what friedberg just showed which is the political pressure that he's going to be under to cut will it cause him to cut more aggressively than he would have otherwise on the margins i actually think yes but my perspective is that i think that we've run out of money individual people so i think unemployment is going back up i think gdp is going to shrink yep and so i kind of tend to be in this

SPEAKER_171: camp that we're going to see more than one rate cut so here is total job openings to your point

SPEAKER_42: shamath they're getting burned off we peaked at 12 million again if you believe the numbers are not there they obviously have some value and we've burned off a ton of those so sacks what's your non-political non-partisan take first principles of what's going on with the economy well look we

SPEAKER_157: just had this inflation report cpi was 3.3 percent the market was expecting 3.4 percent so that's a

SPEAKER_126: teeny bit better than expected but it's still persistently sticky inflation is and furthermore powell's comments were very hawkish he basically said he could not commit to when rate cuts might begin and we're already remember at the beginning of the year we entered the year with expectations for seven

SPEAKER_273: rate cuts this year now we're down to an expectation of one rate cut and we can't say for sure when that's going to happen so honestly i think your introduction overstated how positive this news was and that's why i think if you look at the markets right now it's very mixed most tech stocks that i'm seeing are actually in the red and a few of them like tesla and apple and nvidia are up but the vast majority are in the red so i think the market is taking this in stride i think the big picture here is just we don't know when rate cuts are going to begin and i think that vinnie lingham had a really interesting take on this actually where he he said look could powell cut by a quarter point would that matter that much no it wouldn't matter that much but the point is powell doesn't want to say that the rate height cycle is over right if he were to cut by a quarter point that by itself wouldn't do much but it would be a huge statement that we're out of the woods on inflation there's not going to be any more hikes coming and we're beginning a new rate cut cycle and powell is clearly unwilling to say that we're still in this like limbo where he is saying that we don't know when rate cuts are going to begin betting

SPEAKER_42: markets had two a 70 chance of two rate cuts before powell spoke afterwards now it's one rate cut dow record high again this past week and nasdaq record highs each of the last like month for the last four months so the market putting aside individual stocks has broken records

SPEAKER_126: almost every month for the last three free bird on the back of like two stocks i mean nvidia is holding up the whole market there's a lot of funny memes about this nvidia

SPEAKER_160: microsoft and ai stocks have are holding up the whole market correct yes record stock market what does jerome powell have to gain or lose by bowing to political pressure so a lot of folks

SPEAKER_91: mention and reference is kind of there's political pressure for him to do something but why would he bow what does he care what what do you think the motivation is for powell individually and what is the

SPEAKER_156: political process that will ensue future job he doesn't bow to political pressure i think it's

SPEAKER_244: the legacy and the perception that he leaves behind i think had he not over promised and under delivered

SPEAKER_183: at the end of last year remember he was promising as sac said six or seven rate cuts and he's delivered bubkis and the markets were none too pleased and so now i think he's just swung the pendulum to the other side which is he's going to massively under promise and then over deliver if he can

SPEAKER_244: and so as a result i think he's being much more measured and guarded i don't think he wants to be wrong here so i think he's thinking about what most folks think about when they're at the tail end of

SPEAKER_183: their of a job like this he's not going to get reappointed he's going to go off into the sunset it's roughly about how history will write how he handled the transition from that to the next phase whatever that is so i think he's probably very interested in making sure he doesn't break the economy and also that he doesn't seem like he's constantly waffling and unpredictable but isn't he just an autonomous agent

SPEAKER_91: that is meant to respond to the data i guess i'm not quite understanding the degree of judgment and discretion that everyone seems to have a mandate they have a mandate but if you're asking what his

SPEAKER_126: incentives are i agree i think his main incentive at this point is concern for his historical legacy and specifically he wants to be thought of like volker not like martha burns in the 70s volker basically crushed inflation even at the cost of a recession and he is worshipped today as the best fed chair ever whereas burns let inflation slip the leash in the 1970s and he's not thought of very highly so i think that powell's main concern here is with his historical legacy at this point i don't think he's expecting to be reappointed he's wrapping up uh his second term already now i think if you go back to 2021 the incentives were a little bit different powell wanted to be reappointed

SPEAKER_273: by biden and remember that in the summer of 2021 that's when the inflation began we had that surprise 5.1 inflation print powell was up for renomination and confirmation in november of 2021 and i think what happened back in in that year is the administration downplayed the inflation report they called it transitory yellen did biden did and so powell had to get on board with that message if he wanted to get confirmed by the democrats and he did get on board that message he repeated the whole transitory point and for that reason they didn't begin the rate hike cycle until march of the following year and from that may inflation print to november they kept doing qe even though we had inflation back in the system so i think i think that powell was actually intensely political in 2021 he knew who was going to reappoint him and who was going to have to confirm him and he got on board with that message and that's why they were so slow to react to the inflation and i think it was disastrous and that's one of the reasons why the rate tightening cycle was so steep is because he had to catch up with all this inflation that he had allowed for nine months longer than he should have but if you ask me what's his incentive now i think it's purely about legacy and he does not want to let inflation come back after cutting rates a little too soon so his incentive i think at this point is to to make sure that he's not wrong again about inflation and to

SPEAKER_276: remind everybody maximum employment stable prices moderate long-term interest rates is the mandate

SPEAKER_270: for the federal reserve they're supposed to be independent famously reagan push volker to get rate cuts and there is a lot of politics involved in this and so legacy does seem like the organizing principle here i would agree with chamath and sax that it's legacy but there's always

SPEAKER_42: political pressure here as you can see elizabeth warren is trying to push him to make cuts for obvious

SPEAKER_178: reasons well no there's politics when they're up for appointment or for reappointment for confirmation

SPEAKER_126: basically because they want to get that vote yes but there's also subtle pressure and then there's

SPEAKER_42: letter writing like elizabeth warren's doing here right so the pressure can be there the question

SPEAKER_445: is do they bow to it right sex yeah they don't have to i mean the fed is independent what do they stand

SPEAKER_91: to gain or lose by the pressure is my question and i'm not sure i really like this concept exactly and i think that's really where there is a important point to note here that you can identify the guy's motivation how he's going to operate this year because there aren't there is no political

SPEAKER_126: pressure there was in 2021 and i think that's why he was slow to react yeah right listen if powell can

SPEAKER_273: stick the landing here then his legacy comes out intact but if he screws this up and then he was slow to react to the inflation back in 2021 and 2022 his legacy is going to be mud so i think he's

SPEAKER_126: going to be more concerned about erring on the side of tamping down inflation than erring on the side of the economy not doing as well yeah i think those are the incentives my position is i think he

SPEAKER_214: he might have already stuck the landing i think like the fact that we've burned off all that savings to your point chamath that people are going back to work and that these businesses are doing fantastic

SPEAKER_452: and efficient because of ai and other gains it feels like well people are trying i think he's

SPEAKER_454: a handful of tech stocks that are no no they're they're trying to go back to work but the jobs don't

SPEAKER_223: exist i think they're going to take jobs they just might get the job they want and that's what i think people have to recognize is they have to take a job and they may not be the one that they want working

SPEAKER_290: from home we could have a negative recessionary print going into the election cycle i think that's

SPEAKER_126: very possible yeah exactly i don't know jason look i i'm hearing a lot of happy talk right now and i

David Sacks: agree with you had you had 1.3 gdp growth rate with a six percent of gdp deficit by the government

SPEAKER_273: if the government wasn't printing so much money wasn't overspending that's right if you were to have

SPEAKER_463: a balanced budget it would be a recession yeah think about that just to try to be negative it would

SPEAKER_91: be negative gdp growth if not for the government's program stimulating the economy and a lot of the

SPEAKER_126: jobs you're talking about are government jobs the government is creating jobs like crazy not in the

SPEAKER_273: private sector but in the public sector because it is an election year so there's a lot of political forces propping things up and i wonder what happens after the election we'll find out all right

SPEAKER_324: everybody this has been another amazing episode of the all in podcast just one last thing guys

SPEAKER_123: this is really important so friend of the pod peter fenton who's a famous vc in silicon valley

SPEAKER_126: tweeted that his sister has been diagnosed with the rare sarcoma and they are searching for lookalike cases to do a study at dana farber and if this works it will change the future of cancer but they are seeking this researcher william gibson who he's retweeting is seeking patients with myoxoid myosarcoma featuring a pla g1 fusion so if you are somebody out there who has a case like this then please reach out and let us know or let peter fenton know this could save a life or many lives his sister is also the the wife of a good friend of ours p brigger so our thoughts are definitely with you and if there's anybody out there who has this type of sarcoma please let us know and we can refer you to dana

SPEAKER_467: farber and this is a very important study that may save some lives pete and peter are great guys and

SPEAKER_214: our thoughts with devin and hope you guys find a cure okay best wishes to peter and his sister help out if his sister help out if he can and he's in our thoughts and our prayers