SPEAKER_00: i'm now recording jesus you look terrible what's going on did you sleep last night do i look tired i do look a little tired unshaven yeah what happened last night i had a holiday party at

SPEAKER_02: my house last night from my office and you look destroyed yeah what's going on i mean did you

SPEAKER_06: drink i did drink yeah what does vodka and oat milk taste like he had a white russian a white russian

SPEAKER_08: with oatmeal he's like i want a white russian with oat milk oh my god actually my white russian is made with only and please compliment that with a huge punch in the face give me five minutes i'm

SPEAKER_10: gonna go i'm gonna go shave and it's called the hair of the dog yeah you know a little bloody mary

SPEAKER_12: should i go get a beer i'm gonna get a beer just to beat this hangover go do it yeah go get a beer

SPEAKER_28: all right listen uh we have to start with scam bank run fraud i mean sam been freed i get that

SPEAKER_30: wrong sometimes uh he was interviewed by uh andrew war sorkin the suit uh at deal book who gave him

SPEAKER_31: softball after softball then the next day he was on good morning you're being really passive aggressive

SPEAKER_36: right now a little bit you're throwing a little shade in our friend he's sticking the knife in he's sticking the knife in but jacal's got a point he's got a point a little bit a little bit a little bit

SPEAKER_28: anyway the new york times continues to embarrass themselves uh by handling sam bankman fraud with

SPEAKER_41: kid gloves wow george stephanopoulos my greek brother stephanopoulos the spartan came in and absolutely fricasaid and filleted sam bankman freed on good morning america very important to note that good morning america uh the segment was between holiday cocktails and the cast of the white lotus and andrew r sorkin was at the deal book finance conference but you know that that that

SPEAKER_43: stephanopoulos interview was two hours but they reduced it down to 10 minutes so there were probably

SPEAKER_44: a lot of sort of cordial conversation banter and then softball questions and then he does stick the

SPEAKER_47: knife in and and does the fricassee but he cuts out all the other stuff so he just gets it down to the

SPEAKER_49: 10 minutes what stephanopoulos did to him was extraordinary in that he said over and over again

SPEAKER_41: in the ftx terms of service you cannot touch the user accounts but you at alameda were taking them and you were loaning them out i don't know who is advising uh sam bankman freed at this point but why he is talking so much he was also on a two hour twitter spaces after all this at this point sacks

SPEAKER_51: what do you think is going on here in the mind of sam bankman freed and also the media which seems to

SPEAKER_52: have a very variable way of dealing with this obvious fraud and crime right okay well you know i

SPEAKER_44: can speculate about sbf i think if there is a strategy here it is this he is basically copping to criminal negligence in order to avoid the more serious charges of fraud and i think again if there's a strategy here it is he saw himself being defined as bernie made off 2.0 in the press and if that image which may well be true uh cemented around him then prosecutors would never stop they would never accept a plea that basically gave him anything less than a made off like sentence which would be you know decades in prison maybe a life sentence so he is out there doing what lawyers would tell you never to do which is basically incriminate yourself create more of a record but he's doing it

SPEAKER_56: to change the public perception maybe muddy up the public perception get people thinking that okay he you know this that he's admitting he did something wrong but it wasn't deliberate it wasn't fraudulent it was just basically carelessness or sloppiness and if he succeeds in muddying the waters enough then maybe the prosecutors will give him a plea deal that allows him to have his life back at some point i think that would be the crazy like a fox explanation of what's happening now there is you know an alternative explanation as well which is i just think that these types of guys you could call it you know a narcissistic fraudster they think they can talk

SPEAKER_58: the way out of anything you know because they have they have um yes you know they've talked their way

SPEAKER_60: into getting hundreds of millions of dollars of investment billions billions uh in some cases and so

SPEAKER_28: they just feel and they've been trained by employees partners investors the press that

SPEAKER_44: they can talk their way out of any of this stuff i think yeah the average person is not really used to dealing with one of these personality types who um is i mean they clearly are smart and

SPEAKER_56: they're articulate articulate and they know what to say and they're crafting their words what they've learned through their life is that if they use the precise magic words with a person they can pretty much you know convince them of anything get them to do anything and in particular i would say investors tend to fall for this not because investors are dumb but because investors are so clear about what they're looking for and what they're predictable they're predictable yeah like we're you know vcs especially we're looking for the 100x outcome or whatever so it's easy for this type of personality to construct a story to essentially stroke the erogenous zones of a vc whoa yeah and and and sort of trick them and so there is probably a positive reinforcement loop that gets created in the minds of one of these people who and they start to think that they can basically talk their way out of any situation so i think that would be part of what's going on here and you know if you look at sort of the tactics that he's using to do this you know all of a sudden he's trying to portray himself you know before this he's

SPEAKER_68: frustrating himself as a smart guy in the room now all of a sudden there's this babe in the woods impression where i didn't know it was my subordinates i wasn't really in control that was somebody

SPEAKER_69: better right each individual decision he says looked sensible to him it's just it all added

SPEAKER_68: up to something he didn't anticipate like really you know loaning yourself a billion dollars of of basically the company's money which was basically customer money that seemed reasonable to you i don't know how you defend that individual decision and there's many like that but but this is sort of the narrative that he's trying to construct and um let me stop there but i think there's a lot more that can be said to dismantle the narrative he's trying to create but i want to let what's your take on

SPEAKER_73: this and then freeberg can i make a comparison to sbf and trump through the lens of the media so if you go back to 2016 you know donald trump violated every single establishment bias that these left progressive journalist elites had and so they basically just attacked attacked attacked attacked but then you went into the election and there was a very clear data point that said whatever you thought was that was at best limited and you missed the tone of the country because 50 plus percent of the country held a very different view about this person and instead of taking a step back and then the left media the mainstream media re-underwriting and learning and then saying you know what mea culpa i got this wrong they just double down and they said no it still doesn't meet our priors and so we're just going to ring fence this problem and we're going to just try to destroy this issue because you know we want to control the narrative and and and by result we want to control power now you look at sbf it's the exact opposite he went to the perfect elite private high school then he went to one of the most prestigious elite private universities mit his parents teach governance of all things at one of the most elite liberal institutions in america stanford they are in the establishment of the progressive left and what happened was he took customer funds and all of this money he made tens of millions of dollars of political donations he wrapped himself in this blanket of a progressive left-leaning cause called effective altruism and all of the mainstream media fell for it and embraced him as well as

Chamath Palihapitiya: some politicians because it met everything that they themselves also bought into yes

SPEAKER_73: and now you have this cataclysmic event a multi-deca billion dollar fraud or bankruptcy millions of customer accounts who are frozen you know tens of millions to hundreds of millions to billions of dollars lost and stolen from them and they refuse to re-underwrite this kid and the reason is because in order to do so it's like eating your own tail and that's why they don't want to do it and so this is why you have the media basically allowing him to do an apology tour

SPEAKER_77: now this is his second time at manipulating them the first time he was able to manipulate them

SPEAKER_73: by basically being one of them and now he's allowing them and their desire to basically protect themselves so that he can create some kind of a defense for himself and i just think the whole thing is gross because it misses the entire mood of the nation this is

SPEAKER_77: an enormous financial fraud that was perpetrated on tens of millions of people and there's no accountability because in order to do so the media would effectively have to admit that they missed it and they got it wrong and they refuse to do it and i think that that is the really big problem that nobody is really speaking out about is like well if these folks are meant to be the last stop to make

SPEAKER_73: sure that there's truth and honesty and transparency in society and you can't count on them and in fact they're just going to reflect their own narrative what is one supposed to do to learn the truth

SPEAKER_30: in a way what you're saying and then we'll go to your freeberg is this fraud was encased in all the

SPEAKER_79: gilded facade that america hates right now reflects the institutional rot of america it reflects every

SPEAKER_73: single aspect of institutional rot that every non-elite talks about all the time but elites

SPEAKER_44: when they have those labels will refuse to give up and just to add to that the the thing that's missing the i'd say one of the big issues with the institutional rot in our country is the lack of accountability when somebody gets it wrong we saw this with covid right the health establishment is saying that they want amnesty yeah and atlantic magazine was willing to give it to them so the point is that this this class of people think that when they get it wrong that they're the experts but when they get it wrong there should be no accountability and so jamath to your point the media and these institutions are not willing to re-underwrite sbf when he's so clearly as a fraudster

SPEAKER_83: freeberg what do you think the of this theory you had a large amount of donations to politicians uh obviously you have coming from stanford mit etc and then uh you have these investments gifts slash

SPEAKER_41: advertising slash donations to pro publica vox uh this new publication semaphore the intercept that have all been uncovered now did he do this paying off of all the elites you know splashy cashy giving money to everybody because he knew he was doing a fraud and that this is evidence of this is a premeditated fraud or do you think this is a deranged individual who just was seeking status i

SPEAKER_86: don't know the the motivate there's a video you can watch of this guy for some reason ftx has left up all of their videos on youtube from three years ago called quantitative trading seven and a half

SPEAKER_88: thousand cell wall of bitcoin on binance it's a 17 and a half minute youtube video of sbf trading arbitrage across markets i think it provides probably the best like natural non-scripted insight into this guy's behavior that you could see you know because it's not like him being interviewed it's just him living in his world and he's just you know a mouse trying to get a piece

SPEAKER_92: of cheese like he's you know he's like out there he's you know scrambling around in the markets he's finding edges he's finding advantages and he's and he's clearly just taking advantage of them all day every day that's who he is now you put a person like that in an unregulated environment and there was this clustering demand for an unregulated environment because of a lot of what you guys are saying which is people have this disdain for the elitism and the and the institutional rot and all these things so bitcoin emerged as a solution out of 2008 to the you know the the what felt like institutional rot that that governments have a key role in but when you have no regulation and you have no trusted central authority involved mice that are trying to find cheese will rule the day and i think that's what happened here if it wasn't this guy it was someone else it was going to be someone else and then all of a sudden everyone's clamoring and saying hey we needed the government to protect us no one protected us someone's got to save us we're the regulators we're people that are supposed to keep an eye on this stuff when the whole premise of so much of what was being sold was non-regulatory regimes was openness was peer-to-peer trust protocols and it turns out that in that sort of an environment the mouse that is hungriest for the cheese will get the cheese and that's exactly what happened i don't i don't know how much of it was i don't agree with this him saying i'm creating intentional fraud which certainly seems to be the case versus him saying i'm gonna pay these guys i don't know how much it was even that intelligent but the guy was clearly like trying

SPEAKER_41: to get a piece of cheese okay so this cheese eater this rat is a league of legends uh you know expert playing on eight different monitors at a time the cryptocurrency game while hopped up on speed yeah i'm not saying that to be cruel i'm saying that because they admitted it they talked about it in their staff meetings instructing their traders and team members of how to take speed he admitted to it in

SPEAKER_92: an interview this week he said that it was all legal prescription drugs but they were taking them yes

SPEAKER_41: yes and literally in the same video as you're referencing people see speed patches or i don't even

SPEAKER_51: understand this but there are patches you can put on your body to deliver speed to you at some you know dose or whatever sacks you buy this theory no care that this isn't about the elite side of

SPEAKER_41: it it's about the non-elite the anarchy side of it no and this cheese eating rat was just wanted to

SPEAKER_44: eat more cheese i don't buy this narrative because i see too much design intentionality behind what happened so in other words it wasn't just a series of individual decisions that didn't add up many of those individual decisions by themselves were totally unjustifiable and moreover there were too many there's too much evidence of sophisticated behavior here again he overnight went from portraying himself as a smart guy in the room to the to the babe in the woods and so for example when you look at the construction of all these entities and the corporate org chart you know of all the related entities it's a very sophisticated attempt to obscure and construct certain you know protections when you look at the way that alameda was exempted from the normal margin requirements in ftx there was the

SPEAKER_56: so-called back doors there was intentionality there there was intentionality in terms of who

SPEAKER_41: was hired to staff these organizations again they wasn't hired no board no cfo yeah the guy who's in

SPEAKER_69: charge of compliance what like chamath talked about in a previous episode was the guy who was involved

SPEAKER_56: in the ultimate bet uh poker cheating scandal you know not the super mode yeah exactly right or look

SPEAKER_105: at this goofy goofball caroline ellison who was put in charge of alameda right his girlfriend it's it's

SPEAKER_68: being done for a reason right he's setting it up in a certain way and you know the one time i interacted with him at this um tech conference he was sitting there holding court and he had all of his minions around him who were following his orders this was a guy who was controlling his business he was making

SPEAKER_44: the decisions at i think a task level and um he knew exactly what was going on here so look i just don't buy i do not buy this idea that um that he was like a blind mouse who's just stimulus response you know

SPEAKER_92: in the moment by the way that wasn't that wasn't my point sax my point was whether it was him or it was going to be someone else it was bound to happen no that the idea another criminal would have emerged the idea that we want to have completely free unregulated bahamian based trading you know environments that we can supposedly trust because someone puts on a good face when there is no real regulatory body and regulatory authority overseeing it at some point it was going to happen well no hold on

SPEAKER_58: it is look coinbase is a fully regulated they're not set up in the bahamas and they're not unregulated

SPEAKER_92: he set up and he had no oversight he had no board there was no regulatory regime there was nothing how

SPEAKER_56: was he able but okay so first of all look i don't think this had to happen i think that again i think that excuse is too much because it implies that if it wasn't spf it'd be somebody else i actually think that this was a highly concerted effort listen he courted regulators he donated to politicians

SPEAKER_69: he courted the media and donated to them yeah he was really good at it he was really good at it he

SPEAKER_92: was unusually good at it no and i totally agree on that yeah super smart super connected really thoughtful design on how he committed this i don't know i only think an insider could have pulled

David Friedberg: off something at the scale i think i agree see this is where chamath you're exactly right i think you

SPEAKER_123: needed to level of cynicism here is he knew the playbook and he admitted it you pointed this out with the chats that were released where he said he he he he yeah look i mean just a he he chat look

SPEAKER_73: how like convoluted and intertwined all these people are like gensler's intertwined with the parents yeah parents apparently bundled a bunch of money to elizabeth warren you know he was dating the ceo of the business that he owned 90 in there are all these other random shell companies that he owned 100 of where they were lending back and forth hundreds of millions to billions of dollars yeah to david's point that is a sophisticated con that you have to architect and the way that he was

SPEAKER_77: able to get away with it is that not a single reporter or regulator thought to dig in and the

SPEAKER_73: reason i think is because he said all of the right things that wanted them to embrace him and the reason

SPEAKER_69: is he admitted this is a dumb game that we woke westerners have to say the right chivalesque

SPEAKER_128: and then everyone thinks we're a good person exactly imagine pull that quote up on what he said because it's actually a good it was what i just said is that exactly what he said yes he said it's

SPEAKER_69: it's it's the game that we woke westerners have to play and we say the right chivalesque everyone

SPEAKER_73: likes us he actually said the most uncomfortable thing out loud which is look by having gone to crystal springs high school by having professors my parents that went to stanford by having gone to mit i can pull this off that's that's what he said because he can go with those things because i'm a i'm a champion of effective altruism that i can justify any of these decisions how amoral or immoral that they be because i'm trying to help you know my brother stand up a multi-million dollar pandemic response business i'm trying to do this i'm trying to do that and all of these regulators and all of these reporters said okay you get the hall pass now imagine if you replaced him with some random kid in some developing country or even from the united states who did went to public high school who went to some random state school do you think that they could have pulled any of this stuff off no

SPEAKER_133: you need the patina of the privilege class the new york that's what he had the patina of the

SPEAKER_69: privilege class even after this fraud the new york times wrote more of a puff piece on him than the hit piece they wrote on brian armstrong last year when brian armstrong wouldn't toe the line on allowing politics at work remember that yeah unbelievable yeah so the big and i think what

SPEAKER_56: chamath is kind of saying here is that the big enabler here is not crypto per se it's all these institutional biases and elite biases that he was able to play into partly because he was a big insider

SPEAKER_143: i mean in a way he monetized his parents life work the problem that i think this allows us to put a fine

SPEAKER_73: point on is the following you know in society we've confused a lot of people to think that the opposite of liberal is conservative or republican and i think that's the cycle that drives the mind

SPEAKER_77: virus inside the mainstream media the problem is the opposite of liberal is illiberal okay and what illiberal means is to be narrow-minded and unenlightened it means to be puritanical it means to be

SPEAKER_73: fundamentalist and this is really what it allows us to see now we have now had six years of data

Chamath Palihapitiya: case after case after case where if you are woke if you are a social justice warrior if you have the

SPEAKER_73: right credentials that justify your upbringing if you have institutional bona fides that come from your parents you get to create the narrative and you get a hall pass and everybody else basically is at the

SPEAKER_77: subject and the mercy of the mainstream media and so if you don't kiss the ring and bow down to them they will try to destroy you or run you out of town but if you are one of them they will give you a hall pass and when it's time for them to change their mind in order to tell the truth they won't do it and so these types of grifts will continue as friedbrook said because there is no check and balance without a healthy independent media there is no way for all of us to actually know what's

SPEAKER_73: really going on guys some person in the media could have asked the question and dug in deeper

SPEAKER_77: around the connections between alameda and ftx for the last 24 months i know diligence at a venture firm at no point could any person have asked these questions and found x employees and said you know are there any unseemly connections here between ftx and alameda there was no disgruntled employee i mean every company has disgruntled employee whistleblowers but here where

SPEAKER_73: there was billions of dollars being made by tens of people not a single person who felt on the outs said anything well he was also giving millions of dollars to press outlets hold on in donations the questions weren't asked and then this kid paid hush money to the mainstream media let me ask a

SPEAKER_153: question of you guys do you think that it's the media's responsibility in this context or do you

SPEAKER_92: think that there should have been a regulatory authority that had oversight of this business like there is for every bank and every training operation in the united states and every one of those businesses has a compliance officer chicken and has regulators up the wazoo making sure that customers are kept safe and protected or do we think that that should should offshore vehicles be allowed

SPEAKER_06: like this that allow people to operate it's a reasonable question but there was a chicken and

SPEAKER_73: egg question we were all standing around holding our hands while the cftc and the sec were fighting that's not something that consumers can be expected to adjudicate so yes we should have legislation that clearly defines all of this but there were enough parameters that created regulatory frameworks where a bunch of good actors did operate in them and are continuing to do so like coinbase so i don't think this is a regulatory issue i think that if you believe there are people who are supposed to forensically examine things and get to the bottom of things and ask hard questions those people did none of that here and and what's what's even more worrisome is what they're showing is now with an massive amount of data that shows that you could ask hard questions they don't care to because it

Chamath Palihapitiya: makes them look bad i disagree with this tomorrow i think regulators failed here because they have been

SPEAKER_83: reactive to crypto they have not been proactive and they have not been clear with the crypto community that what they were doing was illegal and they should have put the regulations in quicker and

SPEAKER_51: they're playing catch up but all three groups failed the media failed the regulators failed and

SPEAKER_41: vcs failed capital allocators failed i apparently to do diligence here and install proper governance you cannot put a company like this you know in business with billions of dollars and have no board of

SPEAKER_73: directors no no i agree with you or he lied to them my point is that while regulators are are basically

SPEAKER_143: fighting a territorial turf war okay the media could have still done their job they chose not to

SPEAKER_68: guys it was worse than that because not only it's not just a case where the sec failed to exercise any

SPEAKER_56: oversight of him or dig into any of these questions he was in the room with them crafting the next set of regulations he was working on the regulations that you're talking about that are supposedly needed breaking them they let the fox in the hen house yeah he was going to craft a a new type of regulatory license for these types of exchanges with the result that he was going to get one and some of his

SPEAKER_69: competitors weren't this is one of the things that triggered cz to basically you know do what he did which is basically that svf was trying to get uh binance and competitors like that banned while svf would be one of the sole people to get the license by the way here's an example he was working

SPEAKER_167: with the regulators yeah jason you just said something derogatory towards cz he rug pulled them did he

Chamath Palihapitiya: do that or did he actually expose the fraud that's what i mean by rug pulling yeah he was partners with

SPEAKER_30: that's not what rug pull means jason okay well he was partners with him and then he realized he was weak and that he was doing some stuff that was shady and he decided he would eliminate a partner who was

SPEAKER_41: creating regulation as sac said whatever you want to say he knifed all he did was indicate a desire to

SPEAKER_43: liquidate his position in a token that was supposedly perfectly liquid and that's basically that caused

SPEAKER_176: the everything to unravel yeah but these were partners right i mean these were deep business partners but they were partners they were collaborating on these tokens together so they were

SPEAKER_77: competitors they weren't jason like part of the big loan that that initiated all of this stuff like

SPEAKER_73: a year and a half ago was to buy ftx off the cap table so you know this all i'm saying is like you used words and your framing of a guy you know who's built a business is like he is this nefarious bad actor binance was first investor hold on hold on a second but but but david's right all the guy did as far as we can tell right now his tweet i'm selling this token because i don't believe in the capital structure of this entity and he got those tokens by being bought out of the cap table i know

SPEAKER_79: he was partners with them so if you if you don't like rug pulled how about backstab these were business

SPEAKER_183: partners they're not partners you still don't understand jason of course i understand they he was the first investor so to do this to a company you were out no no no no he can't come out

SPEAKER_56: and part of the consideration hold on part of the consideration were these tokens these ftd tokens

Chamath Palihapitiya: yes jason when you when uber went public yes and you got distributed stock yeah did you distribute and sell uber at any point previous to that i had i sold something to master no no no no i'm asking you a question when uber went public and you got distributed from uber i didn't know your stock so you've never sold a single share of uber not since it's public no i sold it before in private markets

SPEAKER_186: okay but i'm sorry but that doesn't make jason a partner of uber you're just a stockholder

SPEAKER_159: yeah this is slightly different i think but okay fine you guys if you guys want to consider they were no he was the first investor in the company that might have been a historical situation

SPEAKER_186: but their status at the time that cz tweeted was that they were competitors okay fine i mean

SPEAKER_56: they became competitors i agree and by the way to tamas point about this rug pulling language i think we're getting kind of down a rabbit hole here but we're getting out of weeds here but what cz did

SPEAKER_64: perform a service in this sense okay sbf claims that four billion more was about to come in i

SPEAKER_56: personally don't believe that sounds like to me but if it is true that would have been a bad thing

SPEAKER_69: the more money that came in yeah to that operation sbf proved that he was a very poor custodian of customer funds for sure they're being siphoned off for his own use yeah but the longer this

SPEAKER_77: i'm just highlighting the language that you use is sort of like again part of that establishment

SPEAKER_73: elite narrative and i'm just questioning you should maybe steel man take a second to just steel man yeah a more dispassionate view which is here's a counterparty okay yeah who when he left the cap

Chamath Palihapitiya: table was given half cash half tokens okay and he decided to sell his tokens yeah and tweet it

SPEAKER_203: publicly and cause a run on the bank so it was not a run on the bank there was no bank where's the bank this one on the bank language okay is something this was in the semaphore coverage okay he did it

SPEAKER_51: publicly that's my point so i'll still manage these tokens are worthless i need to liquidate them as fast as possible but why would you do that publicly why why would you do it privately you're about to

SPEAKER_208: move the market he wanted to move the market to zero yes he wanted to move the market he's letting

SPEAKER_87: people know why but he wanted to kill his competitor as chamath was just saying he wanted to kill his

SPEAKER_210: competitor he told the market i didn't say he was trying to do that we got to back up here because

SPEAKER_56: i think we've done a lot of like 30 000 foot like lessons and like takeaways from this whole thing but we haven't really established what it is that sbf did wrong so i think we need to sort of take a second to unmuddy the waters okay and part of that i think we should start with this idea of a run on the bank because the favor the press who've been writing puff pieces about sbf i'd say mainly semaphore which he was a big donor to yeah they've been trying to frame it as a run on the bank and then that implies that it's not really his fault it could happen to anybody lots of banks have had this problem okay first of all they're not a bank banks actually have the legal right under certain conditions to take customer deposits and loan them out okay yes they did not their terms of use did not allow that as stephanopoulos pointed out sbf's answer to that was well we had this like margin account program there were other provisions other terms of use but most of the customers who lost money the vast majority did not opt into that program they never agreed to that so that's that's point number one point number two is i think we need to to look at this language of margin account

SPEAKER_68: okay sbf's explanation of how customer money was siphoned off for his own personal use i.e to alameda is that alameda had a margin account so i think we could perform a service here by explaining why it wasn't a margin account and you know jama and you guys understand this really well the way that a margin account works is the following okay because i think some of us have them set up with investment banks you go to an investment bank say morgan stanley and you over you post collateral you actually over collateralize so for example you might take a hundred million dollars of stock posted at the investment bank and then they will let you loan a certain percentage nowhere near a hundred percent

SPEAKER_148: maybe fifty percent so if you have a very very liquid security you may get fifty percent coverage

SPEAKER_216: which means if you posted a hundred million dollars you could get a fifty million dollar loan

SPEAKER_193: okay so you have a hundred million in amazon stock you're some amazon vp you can get fifty million loaned

SPEAKER_73: and it's and if it's a private asset it's anywhere as high as thirty percent thirty five percent but typically it's about twenty five percent my expectation is in a liquid token like this would have basically gotten five or ten percent coverage ratio at the best of it and then what happens is you have these maintenance values so if all of a sudden the value of these entities multiplied by that percentage that you're allowed to loan falls below you have to post money that's how a margin account works it's just there is no free lunch in that yes exactly there's let me just

SPEAKER_92: say say quite simply very simply what i it appears this guy did he took customer deposits in us dollars he then converted those dollars into some other asset and he had a mark on that asset let's call

SPEAKER_207: it a dollar a token and then those dollars were moved to somewhere else no this is because someone

SPEAKER_68: transferred in some other token listen but we need to finish the explainer around the margin account okay because what sbf did is this he took customer deposits gave them to himself just be clear and

SPEAKER_207: no he gave he took customer deposits in us dollars they were wired in correct he took those dollars out and he put a fake token in and he called that that's right he said therefore he said the balance sheet is good but the value of that token it turns out isn't a dollar it's 10 cents that's right it was his

SPEAKER_56: it was his sort of it was sort of his made-up token that that he tightly controlled the trading of and and artificially prompted the price by the way but yeah yeah but but here's the thing it wasn't just the fact that his collateral was no good it was also the fact that and this is from the bankruptcy filing by the the new the enron trustee guy he specifically said that alameda unlike every other margin account on the platform had the auto liquidation provisions turned off so wait we have to finish the thought around how margin works so like tomas said you over post collateral and if the value of that collateral goes down or the the the the position your trading account the value of that goes down you either have to post more collateral or they will actually liquidate your collateral to pay off the loan so morgan stanley will never lose money on a margin account never like the whole point is because they don't make money on it they loan you the money at like

SPEAKER_237: you know a few percent it's like very cheap loan libor plus so yeah exactly that that is not a risk

SPEAKER_41: account to them and so in the in the example let's use an example in the case of the vp at amazon who's got a hundred million in amazon they have a 50 million dollar loan if amazon loses half its value then that triggers the automatic selling of amazon shares to get it back down to 50 coverage so now

SPEAKER_83: you have to sell 25 million of amazon shares if the full 50 million was pulled down to get back down

SPEAKER_44: to 25 to 50 leverage yes and they don't wait until like amazon stock is at the exact level where now the collateral equals 100 of the loan they will keep that 50 loan to value yes and they

SPEAKER_56: will liquidate you you know and by the way you can lose your entire amount right so yes you know this is why trading a margin is so risky is that you can get wiped out you get wiped out very very

SPEAKER_41: quickly with a small move down because they are the custodians of that amazon stock they are holding it for you now and they have the right to sell it to cover your margin you're saying that governor that basic tenant that basic safety control was turned off by alameda and it's even more sinister alameda controlled like 90 or 95 percent of these ftt tokens and was owned by sam bankman fraud so he

SPEAKER_51: owned that company then he claims he had no operating the co listen what should have happened is with

SPEAKER_69: that collateral is that as the value of their position was going down and or as the value the collateral was going down it should have been liquidated to pay off the margin loan and that

SPEAKER_56: did not happen and the reason it didn't happen is that alameda got a special exception on the platform to turn off auto liquidation therefore it was never a margin account if even if it was a margin account okay and and ftx somehow misadministered the margin account it should never have taken other customers deposits and use them to pay back that money what should have happened is if ftx was going to lose money on a margin account that would hit the ftx corporate treasury okay and when the ftx corporate treasury ran out the company files for bankruptcy then and then all the other customers hold on their account is still there their money is there in segregated accounts and in bankruptcy they get their money back the idea that a map margin account could ever cause another customer to lose money that like whatever that is

SPEAKER_73: that's not a margin there was a there's a great article there's a great article uh this one was a journalist that did his job properly his name is david z morris he wrote an article in coindesk that summed up for anybody that's interested all of the actual fraud and all of the crimes that were committed in excruciating detail and what's so sad about all these interviews in this press tour is if anybody would just read this article you can construct the right questions to ask this guy just based on this one article but the the point i wanted to make is that one of the most interesting insights was these guys had lost an enormous amount of money already in calendar year 21 and so this is what's so crazy jason about you know you using language like rug pulling and like you know nobody backstabbing actually trying to like be clear like you guys are giving this guy a hall pass i'm not

SPEAKER_77: any industrious reporter could have found an employee who said wait a minute we just blew a three billion dollar hole in our balance sheet in calendar year 21 20 and now we're sitting here

SPEAKER_41: at the end of 22. hold on i need to respond i am not giving him a pass and for you to blame journalists who are reflecting the crime and not putting any light on vcs and the capital allocators who made this investment and who did no diligence and not put governance in it is the height of arrogance shema this is not the press they're not doing that either this is the vc's website is the

SPEAKER_250: capital allocators fault you're blaming the people who are telling the story after the crime

SPEAKER_252: they're covering the story you can't handle the truth jason they're carving the story can i get in here

SPEAKER_44: can i get in here all right listen jason i will defend you against tamas saying that somehow you're uh you know that you're letting sbf off the hook i know you don't want to let sb off however you are

SPEAKER_56: letting the press off the hook and the reason why hold on a second the reason why you're using this inaccurate language like rug pulling and run on the bank when there was no run and there was no bank is because you've been infected by this language that the media has inserted into the discourse the media listen and hold on a second investors may have got it wrong last year investors may have got it wrong when they did that last round but i think investors now understand what's happening

SPEAKER_69: but the media is still covering for svf by miss explaining what happened okay give me a percentage

SPEAKER_41: sacks of who's to blame here vcs who invested and didn't set up any governance regulators who did not set uh rules around crypto and then three the media what percentage out of a hundred percent is the

SPEAKER_256: investors the regulators and the press go three numbers i would say that before the fraud got

SPEAKER_69: exposed one-third one-third one-third one-third each before the fraud got exposed but they were all

SPEAKER_56: certainly and severally liable but after the fraud's been exposed no investor is still defending sbf but i think that the investors who were swindled by him they feel bad about it so 30 30 30 is absurd

SPEAKER_183: the press had no way to know the fraud was going on just like the vcs did it okay jason are you

SPEAKER_77: stupid like you're stupid journalists that exposed the fraud at theranos he's the guy that went and did all the work john carrieu should be celebrated hold on a second john carrieu went and found this thing when no when everybody else was like this is perfect it meets all of our priors let me finish

Chamath Palihapitiya: please it meets all of our priors this is great hold on and so john carrie was like this doesn't pass the smell test to me let me go do some work and he pulled one little string and over the course of 18 months he exposed the whole bloody thing so hold on a second so what is incredible to me is that it was possible to expose this thing before nobody did i agree with david it's about equal responsibility before but afterwards the bulk of the responsibilities now sits with regulators to clean

SPEAKER_31: it up and journalists to tell the truth okay and now may i respond to that since you call me stupid

SPEAKER_41: you are delusional number one every one of those investors in theranos could have taken a blood test at two different places like jean-louis gassier did and write a blog post and prove that theranos didn't work and they withheld disbelief investors putting in a hundred million dollars including rupert murdoch didn't even take a blood test or tell one of their diligence teams to do it the same thing happened here with the investors in ftx they did zero diligence they set up zero governance this was a failure of the investors and the governance for 99 of the problem and then regulators should have caught it and the regulators in fact did catch theranos so you're completely wrong chamath again the journalists come in after the fraud is happening the investors and governance is responsible for stopping these things ftx was a failure of governance and investors and so was theranos the

SPEAKER_57: end you're completely wrong the question is post post exposure why are you guys obsessed with post how

SPEAKER_162: about avoiding these things you guys are blaming the story is ongoing because the story is ongoing

SPEAKER_51: journalists for something that is capital allocators responsibility it is our responsibility to due due diligence it is our responsibility to create a board of directors that checks on elizabeth holmes

SPEAKER_265: and sam bank i didn't disagree i did nobody's disagree with that just call me stupid you just call

SPEAKER_162: me stupid for pointing out something that you refuse to accept what are you talking about the fact

SPEAKER_51: that capital allocators created this brother you guys are giving a pass to the investors you're doing your impression again i'm not doing fredo i'm not doing fredo you guys are being absurd

SPEAKER_273: this is why people say that we're delusional on this podcast don't call him dumb the reason

SPEAKER_277: people say we're delusional is that we won't take acceptance of this is called wanda like the guy you can't call dumb totally he loses it he goes berserk yes i'm not going berserk you guys have

SPEAKER_280: a blind spot responsible he's like don't you don't call me i'm not going to defend it i'm not going to

SPEAKER_286: defend any single one of those investors i mean i think that they did a horrible job too it's a great

SPEAKER_167: episode but the reality is just went up but the reality is i think that if you think that you can if you basically it's your decision just to defend the mainstream media i think that that's fine

SPEAKER_159: i'm not defending them no you are you said they have no responsibility no i'm blaming the vcs it's

SPEAKER_83: different the culpability is with the investor class that has not had proper governance and

SPEAKER_216: you know what jason how many articles have been written excoriating them

SPEAKER_291: uh yeah some we're a lot like fools yeah i mean show me show me show me the washington capital no

SPEAKER_148: show me the washington post new york times that's like digging in to that malfeasance or that lack of

SPEAKER_167: oversight and holding them accountable in a way that you feel exposes this problem to create change

SPEAKER_31: well if we look at theranos uh those people uh who invested including um draper and um show me the

SPEAKER_297: examples rupert murdoch they they really went after them for sure yeah what about here uh wall

SPEAKER_28: street journal one day ago sequoia capital apologizes to its fund investors for ftx loss

SPEAKER_299: venture capital firm tells fund investors that's hard hitting it will improve due diligence on future investments after they really got us they really got let me let me let me read you that's a cover

SPEAKER_64: story in the wall street journal i'm gonna i'm gonna read you i'm gonna read you a sentence from

SPEAKER_68: the new york times coverage of sbf and sam oh i'm not just a second sam banquet freed is neither a visionary nor a criminal mastermind he is a human who made the same poor choice that generations of money managers have made before him are you effing kidding me no that was the new york times coverage

SPEAKER_131: yes you are they also said i am not reading them yes you are i just called andrew lord and then semaphore who was on the take who received millions of money said it was a run on the bank okay how much did they now where is their apology hold on a second where is their apology sequoia has

SPEAKER_193: apologized where is their apology oh it has to come i'm not defending the press yes i'm just saying yes

SPEAKER_315: you are you are you are i am not i am literally telling you that the new york times has been asleep the new york times apology the press is always demanding an apology from everybody else hold

SPEAKER_148: on a second the press is always demanding the twitter spaces yesterday did a better job of trying to ask

SPEAKER_177: questions and getting to the truth than a single journalist has done or the collective body of all

SPEAKER_193: of journalists absolutely totally randos on twitter spaces did a better job than sorkin let me tell you

SPEAKER_69: why that why no one trusts the press jason first of all they have an agenda when they make a mistake they never admit it when's the last time they did an apology or retraction when's the last time they

SPEAKER_183: did what sequoia did i don't know and they need to apologize about new york times i am in agreement with you on that but i think we have to first say and this is where you guys have a blind spot is

SPEAKER_41: what is the responsibility of capital allocators and governance and regulators i think it's one two three our industry is responsible for setting up proper governance the regulators are responsible for

SPEAKER_64: making sure that scientific and then press is a distant third you know who i think is responsible sbf yes two and three and then we can talk about four five and six okay four five and six capital

SPEAKER_30: allocators regulators the press a distant sixth i agree let's go on to china god it's so spicy today

SPEAKER_73: in here god it's so hot i mean i do think i do think when we attack the mainstream media jason feels a little twin tinge of like uh insecurity and illegitimacy because he were a journalist i my personal perception is i think that's bullshit no i have i think that you have a an incredibly romantic view of the craft as you practiced it back then which i think was full of integrity yes i think i think that's true i think i think that you you don't adequately realize how massively the industry

SPEAKER_79: has changed in the last 20 years since you've become i realize it more than you do i fully realize

SPEAKER_250: that the media has absolutely become biased are they have lost uh in some cases yes i mean if you're

SPEAKER_193: taking money are they blinded from sbf and then giving him they are corrupt if they're taking money from

SPEAKER_41: sbf and then giving him kid glove coverage absolutely that is the definition of corruption in my mind

SPEAKER_143: what is what is it called when you don't take money necessarily like the new york times and still treat

SPEAKER_31: them with kid gloves what is that it is extreme bias and the new york times became why do you think the bias why do you think that bias exists they were always left-leaning but i can tell you why

SPEAKER_83: they when trump came in a generation of new journalists became activist journalists they

SPEAKER_51: didn't want to tell stories and take it straight down the middle and let the facts tell the story and let the audience make their own decision they felt an existential risk when trump came into office they got trump derangement syndrome they picked a side like msnbc and fox did and the business model became for the new york times pick a side and get the subscribers it was a deliberate cynical choice on the new york times part to go full msnbc for full fox the two extremes in mainstream media in order to get the subs and they literally rallied the troops there to do anti-tech anti-trump uh coverage and they became activists and when journalists become activists they are no longer journalists they're activists or commentators and that's the problem it's being presented as journalism when in

SPEAKER_44: fact it's activism so you're right so just shout out to matt taiby who just did a monk debate um that's well said yeah on this very topic and he has a great great sub stack basically saying what you're saying jason and the the the best quote is the story is no longer the boss instead we sell narrative he's a lifelong journalist whose father was a lifelong journalist and he understands the way the business has changed and it's like what you're saying and and this is why independent media

SPEAKER_83: whether it's substacks whether it's call-in shows whether it's all in podcasts or other podcasts joe rogan sam harris whoever it is independent voices are now what consumers are seeking out because they can sense the bias they know rachel maddow and tucker have an axe to grind and they're left and right they didn't expect the new york times washington post and wall street journal

David Friedberg: to you know they knew they were leaning they didn't expect them to pick a side do you think we

SPEAKER_73: should cancel if folks do you think folks are better off keeping their new york times subscription or replacing that new york times subscription with a basket of substacks and yeah you answered your

SPEAKER_83: own question it's the latter i think you're on your own as a consumer now you're gonna have to and i think this podcast and the nuance we have shout out to freeberg for nuance what we've done on

SPEAKER_343: this podcast is what's that funny sex explain to people freeberg's not the only one with nuance jake

SPEAKER_344: house nobody would describe david sacks with the word he's a nuanced department on this podcast what

SPEAKER_312: am i a hundred percent he is but you would know that because you leave when science i'm the truth

SPEAKER_186: department okay sometimes new ones all right i'm the truth department the point is consumers need

SPEAKER_83: consumers need to become extremely literate and they have to do their own search for truth in today's age they don't they shouldn't trust new york times they shouldn't trust us they should trust themselves they shouldn't trust necessarily the cdc or you know the world health organization they should trust themselves and come up with their own process for figuring out the truth in the middle of this mess

SPEAKER_92: by the way this is a good reflection on what's happened with the rest of media with respect to the

SPEAKER_88: creator class where right it used to be the movie studios and you know a handful of kind of aggregated creators that made all of the content of the record labels and now you know independent artists independent producers independent creators and now independent journalists are going to become the bulk of volume that's going to be consumed it's just a different consumption model but we've already seen it happen we saw it happen with movies and we've seen this disruption happen across all these other media classes journalism and what we call the press is very likely going to be kind of that next

SPEAKER_83: layer of disruption i would trust having a conversation with you about science topics over reading a science article 100 you know in the new york times or wall street journal if i'm being honest i would much prefer to talk to you about it and if it was markets i'd rather talk to chamath and if it was sas i would talk to sax or operating a company speaking of operating a company or politics

SPEAKER_351: we'll see we'll see uh but i think i think it's about having unique inside insight right like

SPEAKER_92: that wasn't the case and what's interesting is that the people who are the professionals that have the knowledge and the touch points are also becoming journalists in the sense that they're also becoming speakers of their truth right and i think twitter is a good enabling platform for this we see it on youtube where like scientists are putting out their own videos or market actors like people that are traders in the market go out and they put out their own videos and they put out their own podcast and i think we're probably a good reflection of that yeah uh in the sense that like we are the actors in the market and we're not just the independent observer that has kind of a surface level view we have the depth to be able to talk about the things that we choose to talk about and i think that's where consumers find value and will continue to find value in terms of who the

SPEAKER_88: journalist or speaker is that they're going to start to trust for their information i had yeah i saw i

SPEAKER_367: saw that interview you did with um newcomer oh yeah yeah yeah yeah i saw that coverage i mean yeah

SPEAKER_44: he speaks a lot about the uh this phenomenon of going direct and of course he's against it now he interprets going to direct as an attempt by um newsmakers to avoid answering tough questions or take tough questions i think that's ridiculous because for example i go on cnbc all the time i go on emily ching and um bloomberg all the time i submit to like really tough questions i actually like those

SPEAKER_371: sort of sparring sessions yeah i did hard talk this week have you ever done that exactly so that's not

SPEAKER_68: what's going on here i think what's going on is we have expertise we want to communicate them and we do

SPEAKER_56: feel like the media has become a very unreliable narrator there is too much bias and sloppiness not all of it is agenda some of it's just pure sloppiness and there's no reason why we shouldn't go direct and people want to hear from us the audience wants to hear from us same for look look at draymond look

SPEAKER_92: at draymond and the success he's had with his pod no basketball player has ever gone direct

SPEAKER_207: and created content like draymond's created and has totally changed the game and he was so clear

SPEAKER_143: he's like we are i am the media now jj reddick you know old man and the three amazing amazing podcast i was going to tell you guys a story so i was in the middle east last week or this week sorry

SPEAKER_73: and i had this crazy experience where i was trying to understand what was going on in china and so i started on cnn and the whole thing was the propaganda machine around a democratic revolt you know pushing for democracy and trying to depose xi then i moved to al arabia so one channel up i went from channel 10 to channel 11 and instead what they were actually doing was interviewing people on the ground and what they were talking about was literally how these pcr tests had become far too burdensome and they just wanted it to end and more reasonable restrictions to get in and out of quarantine then i went from there to uh bbc and in bbc they had a china scholar who was talking about how for decades actually the communist party supports local level protests and demonstrations because they've realized that it is a part of their political system to make sure that people feel like they have a say and i was like taking a step back and i'm like if you listen to the us narrative and even jason like

SPEAKER_77: in our group chat people fomenting for like revolution and this is tiananmen 2.0 and i'm like well i'm

SPEAKER_73: reading two other channels that tell us a completely different set of things and i just thought man people

SPEAKER_30: just really fit the data such a good point to fit their bias yeah we are projecting we want to see a revolution in china the people in china want to have their lives back well i would love to see more democracy in the world yes guilty as charged i would like to see people be more free in the world

SPEAKER_92: dictator i think most people just want to improve their condition and i don't think people are as tied up on the philosophy of the government as they are about improving their condition and as long as their

SPEAKER_06: condition is improving they're willing to put up with any form of government and history shows that by the way the conditions in china have improved better than everybody's in the last better than

SPEAKER_382: anyone anyone 500 million people out of abject poverty uh and that's the great success of engagement

SPEAKER_385: isolationism is would not have created that amazing outcome 500 million people going out of

SPEAKER_386: africa you're referring to us you're saying building factories is what i'm referring to oh

SPEAKER_64: okay if they if they want to build something over there i guess that's better than us throwing out

SPEAKER_44: open our markets and giving china mfn status to destroy american manufacturing and build up their

SPEAKER_340: economy so they can become a peer competitor to the united states yeah i mean this is the balance of

SPEAKER_211: engagement if you engage too much you give everything up sex which of the current republican agenda do you

SPEAKER_392: disagree with most strongly just as an aside well most republicans are in favor of our ukraine policy

SPEAKER_44: this sort of unlimited appropriation of weapons and aid to them don't you disagree with immigration policy of republicans and democrats well i have a more nuanced position on immigration which is i think we need to have a border and it can't be just like an open border which is the de facto policy we have now but at the same time i do think that we should have h1b visas and we want to like jama said we want to be an all-star team for the world we want to have the best people want to come here so there's a

SPEAKER_56: balance it's a balance and then you know look i think that i was happy to see the marriage equality bill finally passed the senate yes they did get about a dozen 12 republicans voted for it so that's awesome yeah but that's not the majority unfortunately you know look on on what i would categorize as the old

SPEAKER_44: social issues uh you know like gay marriage like cannabis legalization i was on the liberal side yeah i don't think you know banning abortion entirely a total abolition is going to work for this country i think republicans will lose elections if they insist on that and i think they're getting

SPEAKER_226: that message so um so yeah i mean look i i think that um i've always considered myself to be pretty

SPEAKER_92: centrist and so you're not a globalist you don't believe in open global markets with the us in

SPEAKER_44: general i understand the benefits of free trade and i don't think we should be isolationist with respect

SPEAKER_56: to trade i don't think that we can be a successful country if we are we isolate our economy so i do want to trade however with china in particular i think we made a mistake in throwing open our markets to their products giving them mfn status while most favored nation yes enriching them to the point where they became a peer competitor the united states now look i understand why we made that mistake 20 years ago because everybody thought the theory was that if we helped china become rich that china would inevitably become more democratic and they'd be filled with gratitude towards the united states and they'd actually become more uh more hospitable towards us more westernized and i think that

SPEAKER_64: theory has just proven to be wrong i mean they have not or it's going very slowly one or the other

SPEAKER_404: uh let's own our clips here uh here is shamat's prediction from episode 61 and we'll see you on the

SPEAKER_326: other side of this quick clip my worldwide uh biggest political winner for 2022 2022 is xi jinping i think this guy is uh he's firing on all cylinders and he is basically ascendant so 2022 marks the first year where he's essentially really ruler for life and so i don't think we really know what he's capable of and what he's going to do and so that's just going to play out you think he's the biggest political winner really oh my god i think i think it's going to be a he's going to run rough shot not just domestically but also internationally because you have to remember he controls so much of the critical supply chain that the western world needs to be i think you're completely wrong i think he's

SPEAKER_49: losing his power he's scared that's why he took out all these ceos he's consolidating power because he fears that they're gonna win too big and then displace him and he has massive real estate problems over there that could blow up at any moment in time he could face a civil war there i think he's

SPEAKER_414: totally isolated himself civil war and they don't even have a major country is removing their factories

SPEAKER_416: and removing this dependency there what are you talking about what are they what are they gonna

SPEAKER_417: riot with uh did you not see tiananmen square did you not see the riots in hong kong are you not paying attention to moth there's been many riots in china they just happened to kill those were crushed and i'm not saying they will be crushed but he still will have massive amounts of uh i believe

SPEAKER_424: protests and yeah he'll have to kill people i think i think the the bigger risk is is that china gets better for xi jinping but worse for everybody else in china it's already worse for all the billionaires uh over there it's worse for the tech industry you've now got ever grand that whole uh you know gigantic debt implosion i think there could be contagion from china next year i don't think she's gonna lose his grip in any way but i'm not sure china's gonna have a good year next year

David Friedberg: wow nailed it i think all three of us kind of got this right what are you talking about you got none of it right well i said there were going to be there were going to be riots and they were they're going to have uh a recession i mean you said that they would be squashed look that's exactly what

SPEAKER_73: happened both things happened i actually think i have a pretty decent ability to steal man pretty concretely the details i think that at best when it comes to things like democracy and your belief in u.s exceptionalism in a specific political world view at best you straw man and i think that you get very biased without seeing the forest from the trees the reason i said that is not because i'm like you know some huge g supporter i'm just trying to steal man what happens when one individual person gets anointed leader for life of 1.3 billion people that then controls 20 of the world's gdp there is no other single human being as powerful as him as of this month can i just say that this

SPEAKER_44: show this show is going to become insufferable if every time you sort of said something in the past that was sort of correct you were going to have to replay it i was actually playing that one for you

SPEAKER_434: sax i think you nailed it i was giving that was a softball to you actually i nailed it every week jacal

SPEAKER_435: all right this show is going to slow down if we play every clip that i got right you guys are

SPEAKER_159: asking to pull clips all the time i just pulled one clip about china where you nailed it no no no

SPEAKER_73: look i i think like and also look what he did the king of pull a clip the the ever grand thing look what he did this week they said okay you know what the real estate industry can now issue secondary stock sales raise equity and equitize themselves so they're going to find a soft landing for the equity part of for the real estate industry in china and now they're reopening so i don't know i mean like i'm not sure what we're supposed to comment what i what i will stand by is what i said which is i don't think we have a very clear view about what's going on what the substance of these protests are and what people actually want if you're only consuming us media and so if you find a way to get a diet from a bunch of different sources all around the world you may get a better sense

SPEAKER_216: i had an accidental window into that by being in a completely different part of the world this past

SPEAKER_178: week freeberg any final thoughts on china and what's going on there before we move on to chat gpt

SPEAKER_02: your favorite story i think one of the things we often miss is that china the ccp does have their

SPEAKER_88: hand on the throttle like they throttle up and down we always think that it's a linear line and that it's super dogmatic and fixed but there's certainly responsiveness and the release of the lockdowns in guangzhou and beijing this week seems to have been a pretty good indication that when things do get when when things when the tides do do change leadership there seems to respond not always but enough to kind of keep things going so should they reopen i think it's 60 of the population or so

SPEAKER_385: is vaccinated with obviously vaccines that maybe aren't as um don't have the same efficacy as the ones uh here in the united states do you think they should open up and just let it rip uh or do you think they should still try to maintain this zero covet policy because that is the debate right now from what's

SPEAKER_92: what's the objective because i'm asking you yeah well from the objective of economic growth they need

SPEAKER_88: to open up and they need to keep their economy working and they need to keep their labor force engaged or else they're going to continue to suffer so if economic growth growth is the objective they need to open up right if the long-term health cost of the nation balance again against that is the calculus that they're kind of weighing there's probably some more nuance to that and certainly um my understanding is there may be a precedent setting

SPEAKER_92: which is hey we've said that it's a zero covet policy therefore we have to hold strict to it

SPEAKER_88: hold toe the line um else it looks like we're weak and so there's also this you know maintaining the authority of the ccp objective uh so there's a lot of maybe competing objectives right now uh certainly don't have a sense of how they're they're weighing them all but but i think that once once all those videos came out this week yeah you guys saw them but people were screaming there was an apartment on fire where the doors were locked with steel beams on the on the base of the building at least that's what the the video said i don't know how much truth there is to that but that's what was said and clearly people are extremely distraught and unhappy with the conditions of the lockdown at some point enough peace people with enough loud voices you know something's going to change

SPEAKER_92: i mean let's just remember like the bargain that struck in that country and with all countries is that you know the citizenry to some extent are willing to tolerate their government so long as their conditions continue to improve and there's a bargain there's some bargain that struck and as soon as that bargain starts to go south for for the citizenry then that that that governing entity is at risk and i think that that's what we sort of started to see this week was the conditions are getting far far worse and far less livable for so many people in

SPEAKER_30: that country that the government had to shift do you think chamoff this uh covet strategy and then we'll move on was basically xi jinping wanting to get to that congress his coronation and now that

SPEAKER_171: that's over maybe he can change gears and then like i said i my belief is that i have a very poor access

SPEAKER_143: to enough data to have a to steal man um what is actually going on there but one explanation

SPEAKER_73: could actually be that in the absence of enough hospital infrastructure and ventilators and a bunch of these other things they had to take a pretty severe approach to this disease i don't know what they know or didn't know maybe they understood you know the virulence of it maybe that they have uh slightly different aging characteristics of their population maybe they genetically responded to the sars cov2 virus i don't know any of these things enough to tell you jason yeah but the reality is what freebrook says is right which is that you cannot grow an economy if people are inside locked in their apartments and it looks like they have decided that that's coming to an end and they're going to you know deconstruct all of these things so you know the the chinese growth engine is coming back and i think that that's going to be an important factor economically that we're going to have to figure out because it's going to have a huge implication to american growth and american inflation

SPEAKER_30: sacks if uh in fact the china if the lab league theory is correct china might have some insights into this uh disease that uh maybe the west didn't maybe that plays into their policy a bit

SPEAKER_44: i'm just surprised to hear that you have a problem with their lockdown uh policy over there because

SPEAKER_64: aren't they just implementing democratic party orthodoxy i mean isn't this the policy that tony fauci and barbara ferrer you know that i was in favor i was not in favor of lockdowns what are you

SPEAKER_51: talking about you're the one who had all your mask and had ventilators day one isn't this uh the

SPEAKER_460: why are you painting this why am i getting us because you'll defend the party i'm just asking

SPEAKER_461: a question as the moderator isn't this basically why am i getting astray isn't this what don't

SPEAKER_463: deflect you i'll answer the question yes hold on i'm not in favor of lockdowns i was in favor of if

SPEAKER_51: people wanted to stay home stay home and then if people wanted to go out and take the risk take the

SPEAKER_68: risk i was always in personal choice isn't this what gretchen whitmer in michigan and gavin

SPEAKER_56: newsom in california subscribed to the idea that the way to fight covet was through lockdowns now yes newsom had 10 pages of exceptions for his political donors and he didn't use the police to lock people in apartment buildings he may have wanted to but they didn't actually do that but can you really tell me that this lockdown policy has been disavowed by people like fauci or by the the health authorities like the barbara ferrer's of this world they still subscribe to this view do they really is anybody doing a lot show me well they're not able to do it because no one agrees anymore yeah but tell me tell me where anybody tell me where any of the health experts who said that lockdowns were the correct response have repented and disavowed that view yeah i don't know i haven't

SPEAKER_382: been i haven't been tracking their uh mea copas but you you yourself were in favor of lockdowns for a period of time yes you were no you absolutely were i'll pull the tape i was in favor of a mass mandate

SPEAKER_44: no that's not true i was in favor of a mass mandate and i said the mass mandate was the

SPEAKER_58: alternative to lockdowns okay i was saying that by may of 2020. all right listen let's move on to

SPEAKER_477: the next thing i don't represent i'm an independent i don't represent the democratic party i don't

SPEAKER_479: represent fauci no you represent mainstream media i do not represent mainstream media you just said

SPEAKER_123: i was an old school journalist who's mortified with where it is today i'm giving you a hard time i

SPEAKER_482: thought your i thought your explanation was fabulous oh thank you thank you obviously jake

SPEAKER_484: i'm giving you a hard time too i know that you were not a big lockdown proponent but you understand

SPEAKER_473: the point i was making i do understand your point there were a lot of components let's stop

SPEAKER_417: let's stop making me the democratic spokesperson you guys know i'm feeling a lot better after my beer

SPEAKER_351: let's talk about open ai come on let's go all right so listen let's talk about open ai all right

SPEAKER_385: open ai is a uh a company that um builds artificial intelligent software and platforms they have one

SPEAKER_41: platform called gpt it is on its third version as part of gpt3 they created chat gpt which is a chat interface where you can ask questions to ai the results are nothing short of stunning when they hit uh some of them are a little bit mixed but uh freeberg has spent the last 48 hours uh drinking white russians with oatly milk and playing with chat gpt including his question to the chat gpt which was write a script of chamath sax and jcal uh talking about the future of ai in the style of a quentin tarantino movie and i have to say it was pretty great the result go ahead uh

SPEAKER_491: freeberg tell us what you discovered i think you guys should read this real quick we can cut it out if it's stupid but okay you want us to actually read the script yeah i don't think you got the quen

SPEAKER_473: tarantino part right i mean i think it was like impressive but it there's no f-bombs there's no like tarantino s dialogue and by the way they excluded all of that from open ai they took they

SPEAKER_87: took out all cursing and violent cussing and violence from open ai that explains it because if this was a tarantino script there would be some choice language totally but it's interesting it's like the pg

SPEAKER_225: tarantino script with no cussing no violence no sex you do the references yeah you do the narrative

SPEAKER_86: go ahead the scene opens on chamath palihapitiya david sax and jason calicana sitting at a dimly lit table in a smoky bar a bottle of whiskey sits in the center of the table half empty chamath leaning forward his eyes intense so what do you guys think about this chat gpt thing david sax takes a sip of

SPEAKER_338: his drink it's impressive no doubt about it a large language model trained by open ai that can generate human-like text in a variety of styles and formats it's a game changer jason nods definitely

SPEAKER_159: it's one of the most advanced ai systems we've seen to date it's gonna have a huge impact on the way we

Chamath Palihapitiya: use and interact with ai chamath frowns that's what i'm worried about with a technology like this the

SPEAKER_06: possibilities are endless but so are the potential dangers sax leans back in his chair oh come on

SPEAKER_504: chamath you're not still stuck on that whole ai is gonna kill us all thing are you chamath leans

SPEAKER_86: forward again his voice low and serious look i'm not saying that chat gpt is going to turn into

SPEAKER_508: skynet overnight but we need to be careful about the way we develop and deploy ai we need to make sure that we're using it for good and not just for our own game jacal nods i agree we need to make

SPEAKER_123: sure that we're responsible in a way we use ai and that includes making sure it's accessible and

SPEAKER_344: affordable to everyone not just a select few chamath with a dirty smirk ha ha ha and let's not forget

SPEAKER_513: about the importance of regulation ha ha we need to make sure that we have the right laws ha ha in place okay okay this is to prevent this use of it the director's calling cut cut cut that's it scene

SPEAKER_515: exit scene we're we're not gonna finish it it's not that far off i mean it's 60 on the way there

SPEAKER_87: actually there all you have to do is put in a biden for sacks if you blame biden it would have been perfect let me tell you guys something stunning about this um this platform so this is gpt 3.5 which is

SPEAKER_92: an interim model to the what people are saying is the long-awaited gpt 4.0 model um which i think they announced in 2020 and has been in development for some time so the model this gpt 3.5 model was trained in three steps they do a great job explaining it on the open ai blog site where they collect some some data and then there's a supervised model meaning that there are humans that are involved in tagging and then the model kind of you know learns from from that system then you ask the model questions you get output and then humans rank the output and so the model learns through that ranking system and then there's kind of this third optimization thing and then it's fine-tuned so the the model itself um has several steps of kind of human involvement and you know kind of it sources its own data and and builds it you know what's incredible about this model the total size of the software package that runs the models about 100 gigabytes isn't that amazing like you could fit this model on probably what 20 20 of the storage space on your iphone and you could run this thing and you could probably just talk to it for the rest of your life um and it's really kind of an incredible milestone but i think what was so stunning to me about this i i know you guys are probably expecting something to be said like this but you could see so many human knowledge worker roles and and and functions being replaced by this extraordinary interface so kids can do homework that's easy uh software engineers can get their code optimized and can get their code written for them there's great examples of how software code has been written by this interface you could see real estate insurance sales people being replaced by some sort of software like copywriters copywriters you know make me a hundred versions of a commercial or an ad customer that i can then use customer support completely replaced right if you guys remember there were these automated customer support companies that started uh you know two decades ago now there was this great flurry all bpo businesses were all about lower cost human labor now the cost of human labor goes to zero my prediction which is so everyone's got the obvious prediction which is there's going to be a hundred thousand startups that are going to emerge i mean this is kind of like this moment where the internet came along and everyone's like this changes everything i do think everyone thinks and feels that so the obvious next step is a bubble will form so can i ask a technical question though freeberg um and then uh you're probably thinking the same thing let me just finish my market prediction but i think because everyone's so hyped about this and and we all know this it'll be all the pc attention all the investor attention is shifting to this capability and how do you apply this sort of capability across all of these different industries and all these different applications and as a result my guess is the next hype cycle the next bubble cycle in silicon valley will absolutely be this generative ai business okay

SPEAKER_520: this is a little technical but how would it know the difference between like why oh you are and you are

SPEAKER_30: when it is processing natural language if you were to do like your anus or your anus

SPEAKER_442: how would that freeberg how would it know the difference between your anus and your space anus

SPEAKER_522: it'll it'll learn that you know it's a joke it didn't land yeah it was a joke about your

SPEAKER_525: yeah i probably would have made a better joke than that it would have made a better job for sure so

SPEAKER_526: somebody's getting in our group chat and said can i use like jcal and they were terrible so

SPEAKER_529: at least i have a job for another year i see ai to pretend you're the all in pod besties telling uranus

SPEAKER_491: jokes sorry let me just say one more thing about this open ai thing i i do think that the biggest

SPEAKER_92: and most interesting um thing to think about is how this will um disrupt the search box the search you know the way search works at google you know and the internet search is there are these kind of servers these web crawlers that go out and gather data some are structured data feeds and some of them and some of them are just crawlers and then that data is indexed or in in the structured way it's kind of made available for for serving directly on the search page and so much of that is is indexing

SPEAKER_207: so i search for a bunch of keywords those keywords and perhaps with some natural language context are

SPEAKER_92: matched to a result page and i click on that and it's linked out years ago google started a product called the one box where they could take structured data like what is the weather in san francisco today and that the top of the search result page just presented that data because it knows with high certainty the question you're asking and it knows with high certainty the answer it can give you yeah click it from somebody's website right so if that starts to become everything then that one box interface and it's not just google's ability to access all this data and index it and serve it and store it there could be a lot of competitors to the one box and a lot of competitors ultimately to search and ultimately you know google's core product their their search engine could be radically disrupted by an alternative set system or set of systems that have more of a natural language chat interface which

SPEAKER_30: um and i literally which is literally why google bought deep mind and there were a collection of human

SPEAKER_41: powered search engines mahalo included cha-cha answers.com who are trying to do the human-based version of this it just didn't scale we we don't want to get ahead of ourselves because one of the

SPEAKER_92: things we don't know is how much is going on in deep mind they're they're not very open like open ai is they talk about some of the advanced frontier stuff like um alpha fold and so on and they've been public about that but a lot of that is really to generate interest and hype and what's next but my understanding is deep mind's been applied to everything from ads ad ad optimization but also the ranking on youtube videos to get people more engagement on youtube etc etc so there's all these ways that deep mind's been applied within google services that we don't certain and certainly within

SPEAKER_207: search yeah but the question is is there an entirely new interface for search yes that risks

SPEAKER_92: google's core search business and i think that there certainly will be a lot of money thrown at

SPEAKER_351: this and if anyone has any interesting ideas send me an email sacks and then chamath yeah i think

SPEAKER_68: that's a really interesting point i saw a thread on this where somebody was asking gpt you know a

SPEAKER_44: bunch of questions like they were like generally like coding questions and they were actually comparing the result in google versus gpt and google would just give you a reference to like a link to some page whereas gpt3 would actually construct the answer like a multi-paragraph answer that was far more

SPEAKER_56: detailed and in a way user friendly yeah whereas like the google page would kick you over to a reference where it was like this one two three sort of maybe someone had created a checklist but it just wasn't that detailed it really is pretty interesting i thought andreessen tweeted a really interesting

SPEAKER_44: example as well where he asked gpt to create a scene from a play starring a new york times journalist

SPEAKER_56: and a silicon valley tech entrepreneur they were arguing about free speech and each passing asserts the view associated with his profession and social circle we don't need to read the whole thing

SPEAKER_44: but i thought this was like spot on where i was actually like both sides are making their best arguments and it's like to each other in a conversation that seems intelligible like they're making their points at the right time in the conversation it's like they're playing off each other in other words it actually reads like a conversation i actually thought this one was more impressive than the one with the bestie impersonation because i agree i actually thought that the one about all in didn't really capture our personalities per se but this one actually does a pretty good job capturing the arguments in this debate so pretty impressive any thoughts here

SPEAKER_143: yeah lots i mean i've been spending a lot of time learning about this area six years ago a team that i partnered with who was at google that built tpu we've been building silicon for this space so we've been kind of going from the ground up for the last six years a couple things that i'll say the first is that i think we're going to replace sas with what i call mass which is models as a service and so you know a lot of what software will be particularly in the enterprise will get replaced with a single use model that allows you to solve a function so these chat examples are one and you can name a bunch of

SPEAKER_73: sas companies that were purveyors of sas that'll get replaced by essentially gpt3 or some other language model and then there'll be a whole bunch of other things like that if it's a you know expense

SPEAKER_143: management company they'll have a model that'll allow them to actually do expense management or blah blah blah blah forecasting better so i think sas will get replaced over time with these models

SPEAKER_73: incrementally that's phase one but the problem with all of these models in my opinion is that they're still largely brittle they are good at one thing they are a single mode way of interfacing with data the next big leap and i think it will come from one of the big tech companies or from open ai is and we talked about this i talked about this a few episodes ago a multimodal model which then allows you to actually bring together and join video voice data in a unique way to answer real substantive problems so if i had to steel man the opposite side reaction so i think there's a lot of people gushing over the novelty of gpt3 if i had to or chat gpt if i had to if i had to steel man the opposite what i would say is it's going to get somewhere between 95 to 99 of all of these very simple questions right because they're kind of cute and simple there there is no consequence of saying write a play because there is no wrong answer right you either kind of it it tickles your fancy or it doesn't it kind of entertains you or it doesn't when this stuff becomes very valuable is that when you really need a precise answer and you can guarantee that to be overwhelmingly right that's the last one to two percent that is exceptionally hard and i don't think that we're at a place yet where these models can do that but when we get there all of these models as a service will be very much commoditized and i think the real value is finding non-obvious sources of data that feed it so it's all about training so meaning you can break down machine learning and ai into two simple things there's training which is what you do asynchronously and then there's inference which is what you're doing in real time so when you're typing something into chat api or chat gpt that's an inference that's running and then you're generating an output but the real key is where do you find proprietary sources of data that you can learn on top of that's the real arms race so one example would be let's say you build a model to detect tumors right there's a lot of people doing that well the company that will win may be the company that actually then vertically integrates buys a hospital system and get access to patient data that is completely proprietary to them and covers the most number of women of all age groups and of all ethnic you know ethnic categories those are the kinds of moves in business that we will see in the next five to ten years that i find much more exciting and trying to figure out how to play in that space but i do think that chat gpt is a wonderful example to point us in that direction but i'm sort of more of that case which is it's a cute toy but we haven't yet cracked the one to two percent of use cases that makes it super useful but i think the first step but just sorry but the first step will be the transformation of sass to mass and then from there we think we can

SPEAKER_175: try to figure this out it reminds me of in a way when you when you give that description of like hey

SPEAKER_30: this is really interesting but it's not complete is remember when gps came out and like people are like doing turn-by-turn navigation they drive off the road because they were trusting it too much and then you know over 20 years of gps we're kind of like yeah it's pretty bulletproof but keep your

SPEAKER_83: eyes on the road same thing that's happening uh and and these changes tend to be slow these last

SPEAKER_79: these last 100 or 200 basis points literally takes decades exactly so the last 15 of self-driving

SPEAKER_78: is like the decade-long you know slog that may take a century 15 may take a century but the last

SPEAKER_30: two percent will take a few it's like the change happens very slowly and then all at once for people who don't know what a tpu is that's a tensor processing unit this is google's um application

SPEAKER_72: specific circuits right and custom silicon that they invented for tensorflow at the time yeah so

SPEAKER_143: if you want to try it although now the modality of ai we've changed that as well so now we're totally in the world of transformers so we're not even using you know you're not letting the tensors

SPEAKER_52: flow the way they used to all right there's been a slowdown in sas sax uh what is happening in the

SPEAKER_338: software as a service world there was a good update by uh jam and ball who works for altimeter

SPEAKER_44: our friend brad gerstner he does these really great updates on what's happening in the sas world the big thing this week is that salesforce had its quarter and i would consider salesforce to be the bellwether for the whole sas category i think they're the largest pure sas company they were the first multi-tenant sas like company at scale and what they've shown is a huge slowdown basically their net new arr that they just added in the previous quarter dropped two-thirds compared to the previous quarter but because their sales and marketing spend was the same as the previous quarter it exploded their cac payback which means the amount of time it takes to pay back your customer acquisition costs for a given customer so you see there are 155 months it would take now to pay back the customer acquisition costs that's over 10 years that doesn't work i mean i think before this quarter it was more like two and a half years that's something that you can afford a company can't you know if you're spending 10 years of you know gross profit on a customer to acquire them the business doesn't make sense so now i'm not saying any of this to pick on salesforce it's an exceptionally run company you know one of the absolute best uh mark banioff fantastic ceo founder great human being but i think the point here is that what you're seeing is the whole sas industry is really slowing down here in the first half of the

SPEAKER_68: year you saw sas valuations correct now we're actually seeing sas top line correct and you know there's an interesting question here if your cac payback goes from two and a half years to 10 years you have to bring your cac down how do you do that you can either reduce marketing or you can reduce sales so in other words you can reduce you cut the sales team you can either cut people and headcount from your own team or you can cut spending you do on advertising or events or money that you spend on other companies either way there's going to be a big contraction in jobs basically around this industry and i think that what that could do is cause a vicious cycle where death we start seeing i wouldn't say death spiral i think this vicious cycle for the next year or so where seat contraction becomes the norm instead of seat expansion so if you go back over the last 10 years a major tailwind at the backs

SPEAKER_214: of sas startups has been that every year year you start with 120 130 150 of last year's revenue just from your existing customers why because they were hiring more and more people and they needed to buy more and more seats but now headcount growth is frozen and in fact companies are doing major layoffs so the baseline for next year could be seat contraction so instead of starting with 120 of last year's revenue you might start with 80 or 90 because there's gonna be so much churn so i think that you know sas companies need to take this into account this idea that like growth is on autopilot that could start to go in reverse i don't think permanently but i think for the next year or so this is why i also i tweeted you know 2x is the new 3x if you can grow 2x year over year in this environment that is as good as or better than growing 3x last year oh it's better clearly it's clearly better like a lot of companies that weren't that great could grow 3x last year because it was so times were so frothy everyone was buying everything but now it is going to be really hard to even double year over year companies need to take that into account into their financial planning uh you need to restrain your burn because a lot of the revenue that you predict is going to be there may

SPEAKER_30: not be there all right uh thanks so much to the secretary of sas i think you got a board meeting i do i gotta run one of the interesting things i saw in terms of use cases is somebody used the chat gpt to

SPEAKER_385: describe rooms then they took the descriptions of those rooms and then they put them into like dolly or

SPEAKER_30: stable diffusion one of those and it created the visual i'm curious if you think you know the self-driving apis uh and machine learning that's going on then you got images then you got chat maybe

SPEAKER_41: you have proteins going on with the alpha fold stuff when these things start talking to each other is that going to be the emergent behavior that we see of general ai and that's how we'll interpret it in our world is these hundred different vertical ais uh hitting some level of reasonableness to chamat's point on data sets and then all of a sudden the self-driving ai is talking to the one that's looking at cancer and tumor diagnosis in the chat and the image ones it may be stable diffusion the protein ai and the one that's looking at cancer cells start talking to each other yeah i'm not sure

SPEAKER_92: that's as likely as the there's a lot of solutions that will emerge within verticals and i think you can distinguish them so i kind of gave this example a few months ago if you remember kai's power tools was a plug-in for adobe photoshop came out in 1993 i believe of course and kai's power tools completely transformed the potential of adobe photoshop because photoshop had all the basic brushing and editing capabilities within it kai's power tools was statistical models that basically took the matrix of the pixels and you know created some evolution of them into some visual output like a blur and so you could blur motion blur something and you could change the parameters and now your photo looked like it was going through a motion blur ultimately photoshop bought and implemented those tools but those were similar they were statistical models that made some representation of the input which was the image and then created an output which was an adjusted image i would argue that that is very similar although the models behind it are very different in terms of the contextual application of statistical models in software and you could see stuff like for example a chatbot that replaces help me figure out whether my credit card charges are correct or not instead of having a customer service agent an offshore customer service agent helping you resolve that or help me return my item or there are very specific kind of verticalized applications that can plug in that ultimately replace what was manual and human driven before because humans used to manually make the motion blur in photoshop and then it was automated with these software packages and i think you can kind of think about it in that same way that these these are no knowns they don't require necessarily a human physical labor or some you know human responsiveness that if 95 percent of the work can be handled it will get handled by some verticalized solution so i think the physical labor versus the non-physical labor is one way to think about the distinction meaning is there some change in the physical world driving is absolutely a change in the physical world you have to move physically through space so that one is a very distinct class all the stuff that's like communication imagery static imagery audio and then visual video there's some stacking that happens there and some of those will be kind of siloed and then some of them will merge and you'll have these kind of unique kind of combo models and so look as they start to work together i think we'll see them you know

SPEAKER_88: completely rewrite some of these verticals like movie production or music production right or advertising or we're seeing it now with with video and creative arts uh with um you know some of the the visual stuff

SPEAKER_382: on open and to be honest a lot of journalism a lot of creative arts have become the wisdom of the crowds

SPEAKER_30: over the last two decades where you know artists were looking at the collective works of the internet interpreting it and then coming up with content which is kind of what these ais are doing and then who legally owns the collective content is going to be a big question chamath you talked about data sets and microsoft is being sued right now and github because they uh used open source to create tools in ai to help augment programmers like while they're programming writing code it gives them suggestions

SPEAKER_385: and now the open source community is suing them for using their data set so what do you think about the legality of data sets chamath and should they get some kind of protection if you make a gpt3

SPEAKER_579: based on quora or based on wikipedia should you have to get approval to use that data what's

SPEAKER_143: yeah it's it's the exact opposite they say that this is actually your work um and i think that that's the right legal framework but the the answer to your other question is this is why i think the hunt for proprietary data actually becomes the hunt that matters all of this other stuff i think is a lot

SPEAKER_383: less important because i think you have to assume that all of these models will eventually just get

SPEAKER_73: commoditized so there'll be there'll be a you know like you see like jasper ai and you see a bunch of

SPEAKER_143: these generative ai companies it's really interesting but the problem is when you sit it on top of the same substrate you'll have a convergence right everybody's chat model will eventually look and sound and feel like the same thing unless you're giving it a few special ingredients that other people are not and so it's the hunt for those ingredients that will make this next generation of of models really

SPEAKER_583: valuable so to give it an example you would have wikipedia which is creative commons anybody can use but quora as a data set not everybody can use that's owned by a company so it would have an

Chamath Palihapitiya: advantage take an extreme example if quora didn't allow themselves to be crawled right

SPEAKER_143: okay which they don't yeah but then and then they developed their own language model which used the best of the internet so call it you know gpt and quora maybe they are slightly better in certain domains than others the the other extreme example is the one that i used in healthcare which is you know if you have access to patient data that you will not license to anybody else you know it stands to reason that that model actually then has much better chances of uh highly effective clinical

SPEAKER_30: outcomes versus any other model apple watch comes to mind right apple has all that watch data if they could pair that with epics it's another data sample that's another like what could they do together so this is going to be like this is the the new oil is going to be data and by the way like to to to

SPEAKER_143: talk about apple for a second the smart thing is they've gotten so methodically they've never touted the ai you know they introduce one or two distinguishing features every year right so like the the the ecg which was introduced many many years ago is has only gotten slightly more usable like five or six years later but in the meantime there's you know tens of millions of watches collecting this kind of data so to your point it's it's using these devices as trojan horses to collect

SPEAKER_456: training data that is the oil uber and tesla have all this data of the data being collected by you

SPEAKER_587: know the well hold on so phones or the cameras in the cars the other difference though is that you

SPEAKER_143: have to be in a realm where you don't need regulators to go the last mile so the problem with adas i think or level five autonomy is that eventually you get to a point where even if the model becomes quote unquote perfect you still need regulatory approval and what i'm saying is i

SPEAKER_73: think you have to focus on areas of the economy that are not subject to that or where the regulatory pathway is already defined so for example if you use a healthcare example let's say that you had the largest corpus of breast cancer image data and you could actually build an ai that was a much better

SPEAKER_143: classifier for tumors versus other things the fda actually has a pathway to get that approved very quickly the problem with you know level five autonomy is that there is no clear pathway it's not again we go back to almost a crypto example we don't really know who will govern that decision and we don't know how that will be governed so i think the the thing that investors have to do and entrepreneurs entrepreneurs have to pick their end market very carefully and investors have to realize that this dynamic exists as well if you're going to do this right imagine the robin

SPEAKER_456: hood trading you know uh trader data set watching people sell and shares and then predicting markets with it with ai i mean it could be crazy you have that or payment for order flow that's used

SPEAKER_216: by citadel and the other big but not ai right so then who knows maybe they are using it on their

SPEAKER_143: side they are i i can tell you as somebody who sells we sell a lot of machine learning hardware into this market the biggest buyers are the u.s government and these ultra high frequency trading

SPEAKER_30: organizations freeberg any final thoughts here i'll give you the final word uh how could this affect astronomy how could this affect you know our search of the galaxies you know going out past pluto saturn breaching uranus any any of those things how could it impact any i'm trying to get a uranus joke to

SPEAKER_142: land help me out there tremont you got it's not the i think you need to have more uh space related um

Chamath Palihapitiya: yeah workshop this one with me or gut or gut biome related and you know i got biome yeah so how would

SPEAKER_73: this affect super god use the promo code twist you have to trick friedberg into thinking we're asking a serious question get him down the science path and then rug pull him now that's a good proper rug pull

SPEAKER_30: exactly okay let's do it here we go let's workshop that's the rug so uh tell us you know when you're doing like super got used promo code twist to get 25 off when you're doing super guy you're analyzing people's guts how would you then have uh machine learning in this you know api uh this chat api and gpt3 how could that help with processing all of that especially when it passes through uranus

SPEAKER_92: freeberg you okay out there freeberg you are hung over i'm hung over but i also had like a 7 a.m board meeting so i'm also just a little beat up were you grumpy on the board meeting did

SPEAKER_30: you get a little cantankerous with your no it's fine you were fine you kept a couple kept the rage

SPEAKER_608: in control i think i had my caffeine fuel and then i kind of cranked down afterwards all right

SPEAKER_569: everybody we will see you next time for the secretary of sass the dictator and the sultan of hungover we

SPEAKER_621: will see you next time bye bye love you guys bye