SPEAKER_00: all right everybody welcome back to the number one podcast in the world we've got the core four here SPEAKER_01: and dare i say the king of atoms the king of atoms yes captain travis kalanick is here how you doing SPEAKER_03: brother i'm pretty good pretty good i'm uh sitting here doing the podcast just next door to david SPEAKER_05: ah yes there you go don't reveal our locations please don't dox i didn't put my address out SPEAKER_09: there dude no that's true don't worry mandami did he's outside your houses right now asking them SPEAKER_12: to try to collect 3.9 or something yeah he's he he decided there's rich people left in new york so SPEAKER_14: he's looking for us is it is it 3.9 a year is it per year or is it i don't know if the percentage SPEAKER_11: has been released yet but the speculation i've seen is 3.9 but i don't think that's final SPEAKER_19: but yeah it's a piada tear attack so if you have a second home yeah every year wow and by the way SPEAKER_00: it's for any home over 5 million there's no homes under 5 million in manhattan this is not a rich SPEAKER_26: person tax this is within 15 miles of midtown manhattan you're paying an extra tax uh but only David Sacks: but jcal only if it's a piada tear so what it means is that the most homes well yeah but the most elastic part of the market is what they're targeting for this tax so in other words people who don't live in new york who just have it as a second or third home who could buy that property anywhere yeah are now being taxed the most so what do you think that's gonna do it's gonna have a massive impact on demand SPEAKER_19: for second homes in new york which will crash the whole market yes congratulations mom dummy but in SPEAKER_35: a weird way that'll be good for housing affordability in new york well that that's sort of the the claim but SPEAKER_19: i don't think it'll be good for it because there'll be no incentive to build more SPEAKER_00: yeah all units matter every time you add units people upgrade and it's not like these are going to be low income housing like penthouse on 57 street or you know in gramercy that's not low income housing you'd have to break it into seven units makes no sense but by the way i don't know if you guys saw the video not to get too serious but he's doxing a certain billionaire who owns a certain place and he's literally pointing at his home no i said that to you jason he's not doxing because SPEAKER_43: everybody's known for years that ken griffin bought that place everybody knows that address everybody Chamath Palihapitiya: knows that unit we all knew it it was marketed widely i don't think that's really doxing he doesn't live there and everybody knew he owned it it would be very different if it was a place where somebody was keeping their primary residence and you didn't know and they stood in front of the house that i would agree with you i think this one is a little bit more tenuous okay fair enough SPEAKER_48: but what i will tell you is it's a dog whistle crazy people and this thing's been seen by 30 40 50 SPEAKER_00: million people now it's a dog whistle that's true that's that's the next united healthcare ceo and in the week that a fire a molotov cocktail and a bullet gets shot into sam altman's house it's deadly SPEAKER_26: serious and if you reversed it i always reverse it what if a republican sat outside of bernie sanders second or third home and said we should this is his piano tear this is his summer home we should add you know taxes to it and i'm sure you could look up bernie sanders home pretty easily so SPEAKER_47: just before you point at people's homes and say this is the villain be careful folks because then if something does happen to that person like you know what happened to sam walman this week and you feel however you want about him but nobody deserves to have their house fire bombed or shot at period full SPEAKER_51: stop i just think that it's gonna kill the demand for you know it maybe people already have SPEAKER_19: a home in new york like ken griffin they probably are just gonna suck it up and pay the tax and keep whatever they have but if you were a person who was thinking about buying a piano tear in new york SPEAKER_28: there's no way you would do it now yeah because you don't know what the tax rate is going to be SPEAKER_43: and it's going to keep going up after a decade with interest and inflation you've effectively Chamath Palihapitiya: almost doubled the price of your unit so if you're going to buy a 10 million dollar unit you're probably then looking at a 20 million dollar purchase price just to break even after SPEAKER_00: about 10 or 11 years that's crazy the math doesn't work and what is the downstream effect of these individuals not coming to new york going to a nicks game nothing going to a restaurant no they spend money they spend money in new york they have their birthday party they do all kinds of things i'm not SPEAKER_43: a big fan of the pied et terra culture i i own one house i don't like this whole multiple houses you flitter flattering everywhere it ruined london because when when you look at where do you vacation SPEAKER_63: chamath where do you vacation i go to a hotel okay so my point is this that i think the way that it works is it's not just pied et terre if you if you own a home that you fully rent out but that is not the primary residence of the person who is renting it it's also a problem so this is any even like a like a you know you had a two-week rental or a one-week rental or a 30-day rental or even a five-year rental and it was somebody else's second home the owner still gets gets hit so the rental the sort of rentals of like folks who want to come to that city or who don't want to own in that city uh but it's a second place the second place thing goes away so maybe this is just SPEAKER_43: good for hotels i think it's good for hotels but if you look at london it's probably the best example where there was a lot of people who used london as a place to store assets real estate became the Chamath Palihapitiya: primary way in which they would do that it hollowed out parts of london where it's not as if it was SPEAKER_43: unlivable it's just that it was unlived nobody was there you drive around chelsea you drive around certain parts of london and it was like a ghost town on like a thursday night or a friday night SPEAKER_69: that is an issue it's the land banking it's like your bitcoin is hollowing out a neighborhood and SPEAKER_48: there's something there but you know what the whole uh housing thing is complete cap and utter because if you move to a place like austin where you are in nevada or florida you see what happens SPEAKER_00: when you allow people to build units in austin three years in a row rents and housing prices have gone down while net migration has gone up but that's been good right for austin you guys would SPEAKER_19: say that's incredible yeah amazing austin has like roughly doubles the city over the past decade and yet the rent for you know whatever one or two bedroom apartments gone down that's incredible so in other words if you let people build to satisfy the demand you won't have this problem and then who's stopping SPEAKER_48: the building it's democratic cities it's nimby people and then in a republican town they're actually SPEAKER_26: building units for and affordability so you have one group saying they care about affordability and they're doing nothing about it and they're stopping it and in another place they're like we're just SPEAKER_00: gonna let you build because it's your right to build because it's your land that's the approach in texas it's your land you have the right to develop it go by the way the high end of the market in london SPEAKER_43: has basically turned over and collapsed sacks to your point like they introduced the stamp tax which i think is equivalent to this tax that the new york city mayor is proposing and if you look SPEAKER_80: at london as a guide the real estate market just bid it at the high end and i don't think that's SPEAKER_19: going to be good for that city or even the uk as a whole there's a handful of cities where people do David Sacks: what you say which is kind of park money there the reason why they do that is because they believe that that city a has the rule of law and b is a unique world-class city that's going to keep appreciating and if you have new management that doesn't really believe in the rule of law that basically keeps imposing all these arbitrary taxes that money is going to flee and find other kinds of investments people aren't going to park their money there that has to be a bad thing for the city it's like you know who cares if the top floor of that building where ken griffin lives is owned by one guy who isn't there that much it's not going to affect the city that much but having all these billionaires from all over the world decide to park money in that american city has to be good for the us just like it's good for the uk and if you give that up then again the money SPEAKER_63: will just go somewhere else well the other thing is they're already paying taxes on the property and because they're not there very often they're not using city services so they're paying taxes on the property they're not using city services they're profitable to the city yeah think about David Sacks: a developer who's underwriting some new project you know the fact that a whale like ken griffin is willing to overpay in the sense of price per foot for that top floor might make that whole project pencil and this is what contributes to the vitality of new york is there's constantly development going on there's constantly cranes and so you take out that part of the market that in effect was price insensitive and was subsidizing all these projects and i think development's going to dry up to a large SPEAKER_48: degree he's paying he must be paying three or four million in taxes every year and getting no services to your point travis good point like all profit for this london also did something else which is that they SPEAKER_80: essentially crippled what's called non-dom status which is the big tax arb if you moving or parking assets in london and to your point sax what did all the rich people do they just redirected themselves SPEAKER_43: to zurich to lugano to milan and they they took advantage of more hospitable tax policy in other places now what the people in britain would tell you i actually met with the uk government yesterday they don't see a meaningfully enough measurable impact yet where they think it's a five alarm fire so the real question is is it more of a slow bleed and a slow melt and at some point it's just hollow it out and it's very hard to reverse because there's not going to be a cataclysmic acute moment where people say oh my god we need to reverse these policies it doesn't seem like that's in the offing SPEAKER_19: you know la did something a little different but similar as they introduced that five percent SPEAKER_28: mansion tax it's on like all the areas except for like beverly hills and san francisco has that too yeah san francisco got that too i think it's actually like six percent in san francisco it's six SPEAKER_97: six percent over 25 million and it starts at five million so there's a transfer tax an excess transfer tax above five million dollar properties that scales up above 25 million to an extra six percent on top of your brokerage commission so when you sell a house in san francisco you're paying 13 percent now which SPEAKER_19: is why you look at the transaction volume in the la real estate market and it's just completely dried up you know people aren't doing the house flipping anymore like that kind of stuff because the transaction David Sacks: costs are too high but it just shows i mean again this tax was imposed retroactively for example i had my house at sf and then they just take you know a couple of rooms of it and we talked about this on the show when it happened but my point is just your property is not safe in blue states and wealthy people who have a choice of where to park their money are going to increasingly realize that and they're not going to buy i think real estate in blue states is dangerous because the political class thinks that they can take a chunk of it and you know wealthy people are going to react to that and they're going to move their money elsewhere all right let's go to topic number SPEAKER_00: one open ai is apparently suffering from a bit of an identity crisis on sunday open ai's chief revenue SPEAKER_48: officer denise dresser sent a four-page memo to employees obviously it leaked immediately probably the point of the point of it and she called out in profit she said their 30 billion dollar run rate SPEAKER_69: is cap inflated by 8 billion due to a revenue share and some accounting with ai model providers SPEAKER_48: pointed that out in the last couple weeks also she said anthropic stories built on quote fear restriction and the idea that a small group of elites should control ai obviously she's a fan of the pod she also laid out open ai's pivoting and she said they are going hard after business customers and they want to win the agent platform layer if you remember they hired the architect of the open source project SPEAKER_47: open claw they didn't acquire open claw so peter uh steinberger is working at open ai cynical people said hey maybe they want his next set of innovations to go inside of opening eyes products as opposed to the open source one i kind of agree with that directionally there's obviously perplexity computer is doing really well they quadrupled their revenue and uh i was over at xai earlier this week with elon i can tell you he's got some very cool stuff coming and this new model spud is coming uh from open ai here's your polymarket 75 chance spud is released next week additionally and we'll go to the panel in SPEAKER_48: just a second on tuesday two days after this memo came out obviously people write these memos to go SPEAKER_105: directly to the press so they're obviously trying to undercut anthropics valuation and they feel that's SPEAKER_69: the threat that's my take the ft cited anonymous open ai investors who are frustrated with the SPEAKER_48: company's lack of focus here's the anonymous quote quote you have chat gpt a 1 billion user business growing 50 to 100 a year what are you doing talking about enterprise and code it's a deeply unfocused company and we talked about this chat gpt's market share is going down as the number of users is going SPEAKER_69: up because gemini and claude gaining significantly and meta just last week released their first proprietary model and apple doesn't have a product in market yet but they do have a lot of users so here's your gen ai website traffic let's start uh chamath with you your thoughts on open ai should they be pivoting SPEAKER_48: straight into business developers and getting focused on that or should they stay focused on the consumer Chamath Palihapitiya: where they are the verb as it relates to complex long horizon coding tasks what i can tell you from my team at 80 90 is codex is better generally than anthropic and so what happens is from the more SPEAKER_77: day-to-day work i think it's more reliable to use the clod ensemble of models but when you're dealing with something that's very tricky and very complicated and a little bit more long horizon Chamath Palihapitiya: codex is really functional and really good so i think if you're looking at it through the lens of open ai what they're probably saying is hey hold on a second if we allocate our resources and just double down and crush consumer that's probably three or four trillion of enterprise value and then if we slowly refocus the company with the rest of the resources and double down on codex and do something meaningful in enterprise we can probably capture two or three trillion there and now all of a sudden you can paint a picture for a seven eight nine trillion dollar market cap in the fullness of time not tomorrow obviously but codex is really good and there's a business to be had in both you have to separate the two businesses you can't have a lot of overlap because there's too much context switching you got to let the consumer team run and then you got to isolate the enterprise team and let SPEAKER_69: them do what they think is right travis uh there's a big debate going on amongst the investors the ft piece also questioned the 850 billion valuation of open ai secondary markets have now priced anthropic higher than opening i for the first time this is the flippening that people predicted one investor said opening i would need to ipo at a valuation of 1.2 trillion the last round to make any sense but there's no buyers currently at the 850 billion valuation that opening i just closed according SPEAKER_47: to bloomberg travis how do you uh handicap this race between these two leading frontier models SPEAKER_03: growth is king right now in this in this world uh in this segment growth is the whole damn thing SPEAKER_63: and if anthropic is growing faster than open ai by a significant clip the investors right now are going to play it forward and they're it you know you start to get network effects around compute network effects around the number of tokens you're pushing out for various customers enterprise or consumer and ultimately you know it's not great today but how that plays into reinforcement learning and the things getting smarter over time there's so many there's so much upside to volume and scale that if they are growing faster at the same size even if open ai still SPEAKER_03: growing but if they are half the growth rate a third the growth rate a fifth the growth rate SPEAKER_69: i would be i'd be worried and you saw this at uber specifically when you accelerated away from the SPEAKER_63: competitors like lyft and doordash yeah yeah you had to yeah network effects was the whole thing at the end of the day and network effects was based on scale so yes i'm sort of like coming from my very specific experience but if you believe there's network effects with the scale of data that you have and the scale of customers and the revenue that's this cash that's coming in that you redeploy into compute and so say there's network effects of large compute i'd be very worried if i'm open ai and seeing somebody growing faster at the same size so freeberg when you look at this SPEAKER_124: race between these two giants maybe your thoughts on the flywheel as it relates as travis is pointing SPEAKER_69: out to advantages in compute reinforcement learning and then also the ability to fundraise one of the great things that travis and the team did was as they were pulling away they just sucked all the oxygen SPEAKER_48: out of the room by using capital as a weapon uh so your thoughts dave on this high stakes game because there's also a point at which and i'll just end on this there's a point at which you could run off the cliff you raise so much money and you deploy it so fast and the revenue doesn't catch up to it and SPEAKER_47: then you go public and the markets don't believe the story so your thoughts freeberg i don't know the SPEAKER_125: financials of the two companies well enough obviously sam has no problem raising money the guy didn't he just close like 150 billion dollar round or something 20 122 billion 122 billion largest round SPEAKER_55: ever raised in any market i think private or yeah probably yeah i mean that's great so that doesn't SPEAKER_97: seem to be an issue what i've noticed is just the the pace of uh innovation at anthropic is from my experience unprecedented i mean their release cadence is extraordinary they've basically supplanted open claw already with this release they did a few days ago and then today the new opus model got dropped so there's something about the momentum not in necessarily just in user growth but in how they're operating this business that just seems to be head and shoulders above everyone else in the cadence of upgrades if i look back six months ago i think we were pretty heavy on cursor and gemini and now i think we're probably 90 percent anthropic in just the last six months at my my organization there's something very powerful about the flywheel they have going on yeah but here's where i go just SPEAKER_63: real quick dave is mad respect on a 120 or 130 billion dollar raise i mean yeah this is obviously next level but you can use capital and investment to acquire scale and network effects associated with it but if somebody is getting that scale with revenue and let's call it contribution margin contribution profit efficiency will outstrip subsidy and you can't just keep raising 100 billion dollar things forever that's where the train will stop and if anthropic is funding theirs through revenue and other folks are funding it through investment there's like a short term that's a short-term solve but it the long run is whoever is scaling their actual usage and system and ultimately with contribution profit that SPEAKER_135: then soaks up the need for investment that's a that's a that's a very scary machine if you're competing SPEAKER_26: against it which is exactly sax what the um legacy mag 7 are doing you have massive profits from uh meta's core business google's core business that are being redeployed into infrastructure and even tesla which has a lot of profits in spacex which has a lot of cash on hand and they're building out colossus and SPEAKER_47: other assets including uh elon is working on building a fab as folks have been talking about so sex is there a chance for the legacy companies the mag sevens to compete in this or are we looking at open ai and anthropic are one and two and then everybody else can uh fight for third place and and the and SPEAKER_39: the bronze as it were well i think google's clearly in the mix i mean deep mind has an outstanding team SPEAKER_19: and i think elon's still in the mix with xai and then you've got meta also has the resources and there David Sacks: seem to be further behind but they're going to compete look let me just go back to the central premise here i agree that there's some valid criticism that open ai has been unfocused and should be you know moving forward more focused in what they do i have no idea for example what they're doing buying a podcast that's not us so i don't know what what that was about um if you were going SPEAKER_11: to buy a tech podcast for a few hundred million dollars i mean um we were here we're here we're SPEAKER_141: here for dario reach out all potatoes for you guys those small potatoes they can afford you they can't SPEAKER_11: afford you guys yeah they thought we were too expensive little did they know we would have sold out but um David Sacks: um punch the ticket daria but look this other part of the criticism of open ai that they shouldn't do enterprise is totally misguided one of the reasons why they should have been more focused is to do more enterprise and get enterprise more correct now why do i say that to travis's point about growth rates it's true that open ai and anthropic as of the beginning of q2 so let's say two weeks ago they were both around 30 billion of revenue and that memo from that open ai employee was right that if you compare them on apples to apples basis that anthropic is about 20 percent less because they are including revenue made by their channel partners but that doesn't matter what matters is the growth rate you know again to travis's point and let me just put some numbers around this the open ai growth rate's been around three to four x a year the anthropic growth rate has been around 10x a year so they went from let's call it one to ten billion of ar last year and by the end of q1 this year they were already at 30 billion of again that's called their revenue and they're on their way you know like brad gerson was saying on our podcast i think in the last couple weeks they're going to end this year at 80 to 100 billion at least on the current trajectory and so you can plot their revenue on a logarithmic graph i mean again no one's ever seen anything like before where every unit on the y-axis is another exp is 10x and it's a straight line now it's crazy it's crazy right so if it's taking anthropic let's say one year to 10x and it's taking open ai two years to achieve a 10x then it's obvious which one's gonna win now what is the reason for this is because anthropic was very focused on enterprise specifically coding and what you're seeing is that businesses are willing to pay for coding code tokens on a metered basis let's call it like electricity the more they use the more they're willing to pay and their usage just continues to scale and scale consumer is completely different i mean consumer is a thing that open ai prioritize consumers have a lower willingness to pay maybe only three or four percent of them are willing to convert to premium in the first place and what they want is a 20 a month all you can eat subscription so the revenue simply doesn't scale the same way that enterprise does and so if you want to tap into the scalable revenue source in the market right now you have to go after enterprise so you know again where i would agree with the criticism of open ai is maybe they should have been more focused but they need to be more focused specifically to pursue coding and enterprise and if they don't catch up soon to travis's point then you could see anthropic taking a lead here that let's say over the next one or two years could be insurmountable just by the way let me just say say one thing is even though anthropic's revenue has followed this graph this exponential graph very predictably it can't do that forever right like let's say it does get to maybe 100 billion this year can it really get to a trillion dollars in revenue the year after that seems hard to believe right yeah and and the reason is because as you hit new levels of scale you encounter new problems i mean you're simply going to run out of compute or electricity data centers you know infrastructure there are physical limits or there's limits in the physical world that you're going to hit and there's already some evidence that anthropic is hitting SPEAKER_147: some of those limits users were complaining for example that claude was thinking less did you guys see this that that you know a typical claude prompt they they seem to have cut down on the thinking time by about two-thirds now i saw someone tweeting today that they just released opus 4.7 replacing David Sacks: opus 4.6 and the thinking is back but you know maybe they're charging more for that hard to say but they're going to hit some sort of physical limits and i do wonder if over the next year anthropic will reconsider whether it's support for all this like doomer nimby ism was the right call because it kind of made sense for them from a business standpoint when their competitors were building data centers and they were just getting compute from the hyperscalers but now that they're i think going to have to move into the game of building their own data centers they might regret salting the earth for data centers all over the country and i wonder if that'll be the natural limit SPEAKER_147: of their growth is they'll be wasted on their own petard of doomer nimby ism and they're also using the SPEAKER_48: coding platform to build anthropic itself better so that in and of itself is a reason to now coding you get the double whammy you can make a better product and you can get paid for it yes and no hold SPEAKER_77: on because if you look on twitter people are panning cloud desktop and what they said is this is all a bunch of vibe coded slop i think we have to remember if you keep these agents on task and they're guard Chamath Palihapitiya: reeled properly this stuff is a force multiplier the problem is nobody knows how to do this really well yet nobody has built real products of scale largely using agents yet nobody knows how to give an example of how an org structure should be redefined nobody knows how to budget properly we had the cto of uber say i give up i've hit my token budget the problems i see it are twofold the first is just to build on sax's point all of these frontier labs have a very serious issue which is both open ai and anthropic are growing so fast that they're at a point now where they need their own infrastructure it's kind of like when you first start building any kind of company you're just much easier renting capacity from the hyperscalers and it's a dependency yeah but then it becomes a dependency exactly and now when you're so big it's actually strategically a huge mistake to not have your own compute supply why because if you look at who's leading the frontier labs are leading and sax to your point you mentioned this on x you're like there was all this doomerism but maybe it was tied to compute capacity because when bedrock opened up more capacity for anthropic all the doomerism went away you're left wondering like is it really tied to just the fact that they were just trying to throttle usage so if you're a frontier lab you don't want to have to go through amazon and gcp and azure and tin cup for access and capacity what you'd much rather have is go straight to your customer on the other side if you're gemini or microsoft or meta and you have all this compute because i saw a stat this week the hyperscalers control 60 of all the compute so the game theory there is if you kneecap the frontier labs it'll give you some chance to catch up and it gives you time to catch up because no matter what the demand is on the upside you remember you guys remember like in social networking when friendster was the cat's meow yeah cat's meow remember what the biggest problem that friendster was friendster was slow as a dog yes yes and what happened then myspace came in and took all the share then we came in facebook and we took all their share so there is a way where you can handicap and kneecap these companies by throttling compute access to them so a they are forced to now go and get in the game which is weird because look open ai has tried to displace some of the stargate spend i don't see any path except they're gonna have to do it themselves and anthropic will have to do it themselves but then separately the other problem is when you change the subscription model in enterprise and you say hey we're not going to subsidize any more tokens what's going to happen is all these token budgets are going to go crazy and what freebrook said is going to happen where he's like hey guys why are you spending all this money what are you making and you inspect the code and you're like what is this slop and you're not going to add 30 40 50 op x to produce nothing so i think that that's an open question and that question will become more amplified over the next year as they push the cost off of them so as travis said no more subsidy from the capital you have to grow into it but you're not going to support negative gross margins so you're going to SPEAKER_77: pass through the token costs so i think it's a very dynamic moment right now for these and if you SPEAKER_119: look at the ranking of these clusters and who has the most right now uh people have forgotten about SPEAKER_48: colossus which uh elon's been building he's expanding to 555 000 gpus across three buildings 18 billion in investment he if and then if you look at prometheus met as planned 2026 that's 150 000 gpus so SPEAKER_105: this is uh well elon just announced a deal he announced a deal this morning with cursor Chamath Palihapitiya: so elon's elon's renting a bunch of capacity so he's now getting effectively into the data center SPEAKER_77: business he's going to be a hyperscale so he's he's going to use as much as he can for xai and whatever's left over he'll give to well in this case he's giving to cursor to train their model SPEAKER_19: he could you're saying is you might as well overbuild capacity because that way your own models would be in a privileged position and you can sell the rest to your competitors 100 to your point about the thing David Sacks: i was saying on x i actually i think i was retweeting mark andreessen who pointed out that one of the reasons why anthropic might have wanted to hold back mythos is they simply didn't have the compute to serve it the model was huge and very expensive to serve something like maybe even 10 or 20 times the token cost of of say opus they knew opus 4.7 was coming out right so they hold it back knowing that they don't have the compute to serve it anyway and they save their compute for the next iteration of opus and then by holding it back they create this impression of scarcity and altruism and it turns into this gigantic marketing event for their product because everyone in the government's like oh wow they're holding it back because it's so amazing now look i think it may have been genuinely altruistic as well in the sense that mythos does reveal coding vulnerabilities that people didn't know about before and you know it does make sense to give time to companies with large code bases to patch these dormant bugs and vulnerabilities but it's looking more and more like anthropic could not have offered that model commercially anyway because it was just too big and expensive and they need to SPEAKER_19: create space for opus 4.7 so it's an interesting theory on what actually happened there all right SPEAKER_69: guys uh before we go to our next story some breaking news here uh here's your polymarket SPEAKER_48: gentlemen i don't this is i don't know if you're placing some insider bets here uh friedberg but looks SPEAKER_69: like the all-in podcast uh anthropic now 37 chance of buying the all-in podcast this is live what time from polymarket yeah this is by the end of the year by end of the year okay by end of the year so it's SPEAKER_72: this isn't real is it yeah absolutely they've been people have been trading on this this is heavily traded it can't be it says not 92 million dollars of volume this is the number three largest calling SPEAKER_175: market there's no way this is real dude there's no way it's breaking news guys i don't i don't control SPEAKER_28: the news flow this is jacal slop this is no way this is real that's anybody create a prediction market i guess hey what's the what's the uh volume of that thing 92 million it's not real there's no way that's SPEAKER_181: real guys come on guys it's all good guys time to upgrade the planes i just hey guys just i don't David Friedberg: need the pc24 i'll take somebody's g650 whoever's got a g650 go up to the 800 it's going to be trickled down to jacal let's do it i'm giving up my platinum status trickle down economics trickle down avionics all right listen story number two this is pretty good okay number two all birds speaking of data centers all birds just pivoted from ugly sneakers disgrace to ai and the stock has ripped talking SPEAKER_26: about peak bubble behavior podcast getting bought by frontier models and sneaker companies uh pivoting SPEAKER_48: to data centers all birds as you know is the ugliest sneakers on the planet and uh this became a massive delusion in our industry that this company was worth billions of dollars they went public in 2021 SPEAKER_198: this might be one of the peak zerk moments raised 350 million dollars in their ipo SPEAKER_201: sacks were you an investor in this thing all birds all birds back in no no no you're thinking about SPEAKER_56: the scooter company so that was a cover that's right don't remind me of the investors that didn't SPEAKER_11: work but now bird was crazy this reminds me of the late 90s where all you have to do is change your SPEAKER_206: name to whatever.com yeah yes and you get a huge pop in your valuation and you could spin it out SPEAKER_26: barnesandnobles.com and then barnes and nobles and so the stock crashed and never looked back there's SPEAKER_69: your stock chart um they sold off all their brand assets for 39 million about 10 percent of what they SPEAKER_48: raised in the ipo congratulations to whoever owns those ugly ass sneakers why were they worth 4 billion they sold collective delusion collective delusion people in silicon valley liked them and they just thought it was the next nike tulips it was tulips well i think i think that was an era in silicon David Sacks: valley where people rewarded rapid growth without really looking at gross margins or cost of goods sold people didn't really make the distinction between software and everything else right right software you never really had to worry about cogs or gross margin because the incremental cost of serving a customer with software is like almost zero so people in silicon valley weren't really trained to look at gross margin and there was this rash of physical world companies that all of a sudden started getting crazy valuations travis quite frankly you might have the success of uber yeah this is you might have ushered in this era of you know these physical world companies that started getting valued like SPEAKER_89: software companies even though obviously they didn't deserve it david thank you so much for that shout SPEAKER_218: i really appreciate it anyway let's get back to you no no no hold on hold on the era of 21 is super interesting though guys i don't believe it was a physical versus digital thing i believe it was a SPEAKER_63: moment in time in the covid zerk massive money going in we hadn't seen inflation yet it was all of that happening and the investor class was basically deciding we're going to look two and three years forward on your current growth and it wasn't one year forward it was like two or three years forward and that's where these crazy valuations got weird so if you went from zero to a hundred you know if you went from a hundred to three hundred million dollars in the last year they'll play that two three years forward and go oh yeah you're totally 20 times bigger we'll pay you for that now yeah that's where SPEAKER_47: it got weird it got weird hey bird scooters was valued at two or three billion they were doing SPEAKER_00: micro mobility and you're just trolling them jay i'm no we're giving everybody their flowers for incredible investments and savings even the mighty sax could trip up did you sell those shares yeah SPEAKER_28: yeah no no we don't do that uh it was a series a we did i mean look we we got it right in the sense David Sacks: that it was a total phenomenon yeah but then the cities just cracked down on it and killed it look if the cities had leaned into it yeah look if the cities had reacted differently if they had leaned into it if they had created let's say a scooter or like a small ev lane it could have transformed cities i mean it would have been a lot easier to get around but instead they banned it they limited it they didn't create designated areas for it and then the the coup de grace was basically when they would take a city where bird already had like 80 percent dominant market share and then they would say that well we're going to choose four operators and give them each 25 percent of say a thousand scooter allocation that just SPEAKER_234: killed the economics for everybody yeah there's no market anymore there's no market yeah yeah there David Sacks: is no marketplace network effect right when they're basically just picking the winners and deciding the SPEAKER_236: market yeah you can't come you can't compete and splitting it even so then yeah there's no SPEAKER_98: there's no competition you can't drive value regulatory capture at its worst guys like we should watch SPEAKER_218: for this in the in the autonomous car space too cities make it cute and start doing things like that and SPEAKER_65: and what they did on scooters they could do on cars oh that's a really good point yeah you're right David Sacks: instead of just letting the market play out they say well we're only going to have x number a thousand SPEAKER_89: autonomous cars new york is literally doing this right now they're doing the medallion new york and SPEAKER_200: boston and then the prices prices go up the innovation doesn't get realized consumers don't benefit no one SPEAKER_26: benefits basically you've deleted the market yes and anyway just to wrap up this story on the the shoe company they're now new bird ai they bought eight h100s i think with 50 million dollars in a convertible SPEAKER_248: note and the stock has gone up eight stop eight really no it's not a joke obviously the stock's now at David Friedberg: fourteen dollars a share it's up 450 in the last week shout out to wall street bets for staying can SPEAKER_119: i say something more than the shorts can stay solvent can i say something serious yes please there are a SPEAKER_77: handful of transactions that have happened in the last few days that if you look far away are head scratchers so this is one i don't know if you guys saw recently but jane street did a a billion dollar investment in uh essentially a news neoscaler and then also did a six billion dollar compute deal with them that was like a little interesting so what would i like to say about this i think the Chamath Palihapitiya: thing that the capital markets are getting right is that we are massively compute constrained massively and those are two problems one is the power so if you look at companies like bloom energy it has gone absolutely straight up vertical nuclear and the reason is because bloom has a solution that allows you to use nat gas that allows you to do something on site and critically allows you to get your clean air permits very quickly because it has very very little emissions and it's been proven as such and so instead of waiting for years to get on the grid if you wanted to build a data center you can now use their services the other part that's going absolutely nuclear is the actual land and the shell because it's turning out it's impossible to get these approvals now why is that and i sent nick an image the reason is because underneath at the core of it all is there's a tide that is shifting on ai the american population is incrementally getting more and more negative on the whole subject matter writ large and it's not clear exactly why they're doing that maybe it's the doomerism which we talked about last week maybe it's the fear of the job laws that jason has been talking about maybe it's just this idea of yet another wave of innovation that's only going to benefit a few in an extreme way minting trillionaires all over the place while everybody else stands still i don't exactly know what's causing it but the sentiment is shifting and as the sentiment shifts the most SPEAKER_43: scaled action that they can take they're taking which is then they are going and voting down data Chamath Palihapitiya: centers here's an example which was insane a town approves a six billion dollar data center build and then half the the board gets ousted just voted out overnight so that they could put in new people to undo the decision so if you look at this all around the country the answer is not oh we're only going to build in texas that doesn't work there's not enough power there's not enough grid capacity there's not enough nat gas that allows that to happen maine just passed the bill that bans all data center SPEAKER_43: buildings so i think the reason why all birds went crazy is a very very small canary in a very important coal mine which is we are absolutely compute constrained i think if you play this out the Chamath Palihapitiya: real problem again goes back to anthropic and open ai if i were them it is a five alarm fire for them they more than anybody else needs to get their hands on compute they need to have land power shell but otherwise that revenue could either slow down or hit a wall and it will not be because of product quality and adoption it will entirely be because of the friendster effect you just couldn't keep the site up and i think that that that would be a huge huge problem for everybody sacks final thoughts on SPEAKER_19: data centers and the belt well i think i think jamaath is right that the the data centers become very unpopular probably in 30 states they're just going to ban them outright and then it's very hard to get David Sacks: projects approved look i think there's a few reasons for this one is that there are a lot of let's call them real estate developers who are kind of wildcatters who are out there trying to get entitlements and they did bring a lot of projects up for local permits where they didn't have a power solution and there's no question that local communities do not want the data centers drawing off the grid thereby increasing residential prices if that data is not bringing its own power generation and the administration agrees with this this is why the president did the ratepayer protection pledge where we got all the major users of the data centers you know all the hyperscalers to agree that they would not build new data centers without bringing their own power so again it was designed to be power neutral to the grid or in fact it would increase the amount of energy available to the grid because these data centers would give back when they're not at peak usage so that's sort of like category number one is there's this fear of electrical rates going up but there's a couple other categories i think of groups so the second one was future of life and a lot of these like doomer groups saw that data centers were a way to stop ai progress and there are interviews with some of these doomer folks who say things like we have to meet people where they are meaning that they've been unable to convince people that ai is going to lead to the terminator but they can convince them that ai data centers are going to use up their water for example which isn't true and so a lot of the nimbyism has been kind of astroturfed by a lot of the doomer groups which have a lot of money thanks to contributions from a few tech billionaires like we've talked about in the past so that's category number two category number three ironically again is anthropic itself it has allied itself politically with a lot of the doomer groups a lot of the nimby groups it didn't seem to matter in the first couple of years because anthropic had made the strategic decision not to build its own data centers so they probably thought that they were just throwing sand in the gears of open ai or xai their competitors and they would just rely on hyperscalers to get their compute and i think that that strategy has now backfired in the sense that they apparently have reached the limits of the compute that's available to them by buying it from a third party and they need to build their own data centers it's gonna be very interesting to see how they adapt to that and how the message around data centers changes over the next year as let's call it the effective altruists decide that all of a sudden data centers or certain kinds of data centers might be a good thing because they serve their mission so i think that's gonna be a very SPEAKER_97: interesting thing to watch i'll tell you the one thing i think you're missing which is that most people in america really are starting to really hate rich people and there's no physical space that better represents the wealth in america the wealth creation that's happened that a lot of people feel left behind from than the data center what other physical space is there to go to it is the temple of the wealthy it is the mechanism the tool the machinery of the wealthy it is the way that the rich elite tech kind of political connected billionaires that we're obviously all attached to are taking from the poor getting themselves ahead shooting themselves to space leaving everyone else behind and the data center i think is the representation of their progress and it is a representation of the progress that others don't feel so that's why i think it is physically like the manifestation that people want to attack and destroy uh there's very little rationale about oh let's stop ai robots from killing us i think people just don't see the value in ai the average person doesn't see the value in ai today yet like we just talked about so much of the value of ai is showing up in the enterprise and in the rebuilding of enterprises but for a consumer's life to actually be altered in a meaningfully positive way most people don't feel that yet the best thing they see is some medical advice they're getting on chat gpt or something and that's kind of the end of it for them so i think there's a lot of this populism that's swollen and that's taken over not just the us but probably a good chunk of the west SPEAKER_136: and and the data center is the target it is the pied de terre of this space in a way this is their SPEAKER_97: attack vector to david's point they'll probably ban data centers in 30 states data centers can output and input at the speed of light so they can be anywhere i mean you know the reason you put data centers in different states is cheap power low latency so maybe you get a couple of milliseconds of latency so the data centers can go anywhere so as soon as all the states start banning the data centers the data centers will just go to space to iceland to texas nevada texas and florida and then and then the data set and then everyone will be forced to move on travis they'll basically find the next target for populism which will be something else the peer-to-terre the data center what's next you know this is this is part of what's going on right now private jets where we've got this kind of level of debt from the i always bring it back to this because i do think this is at the root cause of populism is the fact that the government promised so much is so inefficient and as a result it's destroyed the value of the dollar not giving anyone anything that they thought they were getting SPEAKER_76: and we do have the ratepayer pledge sax to address the energy issue that was a big win i think and you SPEAKER_43: worked on that i believe yeah but hold on can i just say something i think that ratepayer pledge is important it doesn't change the business model of the utility meaning what the utility is allowed to do Chamath Palihapitiya: is every year build the budget and the way that they decide how to charge you is that they are allowed to make investments right and then they're allowed to earn 10 percent roughly on the amount of investment that they make what do you think their incentive is their incentive is to find ways to keep investing and upgrading the infrastructure so i suspect what you'll see is independent of what the data centers do on site which i think is smart and good and i'm glad you guys did that it doesn't slow down the actual fundamental business model of the utility because those are local monopoly licenses that are granted at the state and county level and so when you go inside and you look at those utilities what they're allowed to do is say well i'm going to bury the lines underground because there's a wildfire threat that's going to cost 10 billion and they present that the puc has to say yes and they're allowed to make 10 on 10 billion so the business model of the utility has to be looked at because it is independent of all of these other things and they have an incentive like insurance companies to just walk prices up over time it's true that's why i think behind the meter so so David Sacks: important there for sure but look i mean this idea that that data centers don't create jobs is wrong i mean it's been a huge boon for blue collar jobs and the construction industry while they're building the data center yeah but that that construction could be a wave that goes on for a decade or two decades i mean the capex is not going down it's increasing listen to for example what jensen says about his projections i mean it's not like the capex is a one-year thing we're seeing tens of thousands of new construction jobs being created and 25 to 30 percent higher wages for electricians carpenters the guys who hang drywall or poor concrete create roads install equipment i mean these are blue collar jobs and it's creating again not just new jobs but also wage increases it's a good thing it's not a bad thing SPEAKER_273: i think the issues it's not a bad thing but it's not the same as a fab where the jobs are permanent and they're there uh we can debate it all we want i don't know you can there's about a hundred data SPEAKER_43: centers right now that are being contested the data is for every hundred that are contested about 40 get SPEAKER_77: canceled that number is increasing for this year it's more than doubled already from what the number was last year and the total economic value of those 100 data centers right now is about 162 billion dollars SPEAKER_218: jason the thing is is that there are permanent jobs because what where's the energy that's powering that SPEAKER_65: where's the semiconductors that's powering that you know there's a lot of we actually had um chase SPEAKER_26: from crusoe and michael from core weave on the all in interview show and they said they're bringing energy with them that's their big thing bring byoe bring your own energy to the space they're bringing in nac gas they're bringing in diesel fuel they're bringing in solar byoe is the model well can i also David Sacks: say listen if if you were of the opinion that you didn't want more data centers in america because it was using up say scarce energy resources or something like that but you weren't just anti-progress all together then what you would want to do is at least see more data center construction among us allies right energy rich us allies well a year ago that's one of the things i worked on was allowing the gulf states to build data centers with american technology for american companies and remember SPEAKER_147: the controversy that caused everyone accused us that somehow this was like serving china well those data centers are getting bombed and i don't think they'd be getting bombed right now by iran if they were serving china these were they're very strategic the irgc has put these data centers on a list of assets that they've threatened to destroy because they're american assets or they're assets of our gulf state partners in partnership with america and american companies this whole idea that somehow this was a threat to american national security was a total hoax just like the data center uses too much water and what i'm saying is that a lot of the same forces were behind this hoax as are behind these data center hoax now freeberg is right about the resentments but those resentments get whipped up and marshaled by people who have an agenda and that agenda is well-funded and strategic and i can tell you that in the case of the gcc data centers anthropic was adamantly opposed to that and they were lobbying against it and they were again salting the earth against those projects and i think the whole issues kind of moot now anyway because i think the data centers have been blown up but uh or they've David Sacks: been threatened to but it just shows how ridiculous and and what a psyop some of the opposition to these SPEAKER_48: ideas are and it's a cell phone in many ways if you think about who are the top two spokespersons for our industry and what they're communicating to americans versus say how the chinese view ai which is incredibly positive we've got dario who says it's the end of days everything's going to be hacked SPEAKER_26: all your files are going to be hacked all your accounts are going to be hacked and then on the others and everybody's losing their job that's our top spokesperson in dario at anthropic the other top spokesperson just had a 70 000 word piece written about him where ronan farrow said i had a dozen people tell me unprompted sam walman's a sociopath those are the top two spokespeople those people cannot be the spokespeople for this industry and this industry has got to get focused on fixing the big three healthcare is going to be dramatically improved by ai housing could be dramatically improved i'm not sure SPEAKER_00: who's working on that and obviously education the cost of education we need somebody out there a michael dell you know jensen elon just explaining how world positive this could be because right now ai is as popular as is less popular than ice the democrats and the government of iran joe limon at alpha school SPEAKER_80: on the education side i think you just have to look at alpha school it's it's working all right so SPEAKER_00: that's your story uh chamath that's the story of all birds the most overvalued startup but uh we're SPEAKER_290: going to play a little uh cue the music here we're going to play a little game show for everybody this is the price uh david sacks is wrong yes this is the price is wrong the price of the startup travis is wrong and this is the game show where we guess which overvalued disaster are we talking about first up helling from austin texas an enforcer in the paypal mafia it's mr david sacks welcome to the program david sacks are you ready to play the price is right let's do it you're ready to play okay all right here we go the price is wrong this startup was once valued at over 13 billion dollars their main business model selling jpegs for fake internet money people lost their minds and started spending SPEAKER_295: millions of dollars on monkey images play the thinking music please david sacks can you name that SPEAKER_298: start at once billion 13 billion for is that like the bored apes thing okay you're closing in remember SPEAKER_299: form it in the name of the question i know i know i know it's selling jpegs for fake internet money me SPEAKER_301: me me pick me pick me pick me people you'll get your chance chamath oh i think i know what you're SPEAKER_303: talking about okay all right let them off do it i can't remember they're spending millions of dollars SPEAKER_306: okay can i say can i say it's your turn to steal open scene open scene correct 100 points for chamath SPEAKER_308: polyhapitiya okay an amazing steal an amazing steal and next okay here we go he puts the dick and dictator hailing from palo alto california it's your favorite door dasher chamath polyhapitiya how long you been door dashing there chamath nine years nine years you like that what do you like about that is it the interaction with the people is it the tips is it stealing a couple of french fries what do you SPEAKER_156: like about being a door dancer there i typically take four fries i lick the burrito okay did he SPEAKER_318: just say licking burrito this is why we need robot delivery delivery drivers i mean it's just coming SPEAKER_295: it's coming okay we don't want our french fries being licked let's get the music going here this startup once valued at four billion allowed you to talk to other people on your mobile device during covid and you could listen to mid vc yes yes i got it i got it it's called generic start advice can SPEAKER_326: you name that overvalued startup oh my god it's called clubhouse oh my god he's on a heater that's SPEAKER_308: 200 points for chamath polyhapitiya hey that's a lot of door dashes he is going to do very well here in SPEAKER_329: the final that's an amazing memory how soon we forget i can't i couldn't replace any of these names SPEAKER_299: okay finally streaming in from a potato field at an undisclosed location in idaho it's it's dr david SPEAKER_331: friedberg uh you're you're in the potato sciences correct mr friedberg that's right potatoes okay you like the potatoes you have a favorite potato dish is it the scallops you what do you like to do with SPEAKER_333: your potatoes what is your name mr what is the host's name what is your name it is me a jocular jacal SPEAKER_334: let's go here we go jocular jacal here at the helm you like a certain type of potatoes there what do you like javicular javicular calacanis and what do you like there on the potatoes what's your favorite there SPEAKER_338: you like a creamy little little little little cheesy you're liking you like the cheese okay SPEAKER_334: very good okay david this startup was once valued at 270 million dollars this is your favorite i understand SPEAKER_295: you're a vegan they sold juice these juice packages went into a juice machine i know i know i know i SPEAKER_292: know i know i know i know they were branded as the next iphone the iphone of juice can you name oh SPEAKER_328: i know it i know it i know it i know it david friedberg i know it i know it pick me you'll have SPEAKER_343: a chance if you know juicero juicero all right there's 100 points are you wait are you searching SPEAKER_344: it looks like he's searching did you start oh my god are you on your device he looks like he's on his SPEAKER_343: device internet free internet free here he's yeah all right folks there you have a clear winner chamoff SPEAKER_334: palihapitiya tell him what he's won he's won a trip to temptations 2 in cabo you're going directly to temptations 2 an adult resort uh that's for you and two of your friends okay enjoy temptations 2 chamoff SPEAKER_344: palihapitiya two of your friends what a fun game this is you can bring your thrumple i think this is David Sacks: going to need to become a regular feature of the pod okay randy everyone forgets everyone forgets the unicorns that don't work they just like every disappearance of the ether all right all right SPEAKER_334: there you go you want a pierre tear on day uh on a new york you got a pierre tear available to you as uh your first place winner chamoff palihapitiya door dasher hello help to pierre dot tear all right listen uh there's been a lot of shenanigans going down in dc the most boring city in the world where David Friedberg: apparently everybody's uh getting a little frisky after hours tmz launched a news bureau eric slowel is out of the governor's race there's a lot of dark stuff that's been released he is innocent until SPEAKER_209: proven guilty but it's not looking good he also resigned from congress jaco and he resigned from SPEAKER_48: congress as well and friedberg our investigative journalist now working as a stringer for tmz freeberg what have you learned what's in freeberg's i haven't learned anything i my um okay you have SPEAKER_97: an analysis then maybe my anecdote on this is back in december when it was first rumored that swalwell was going to run for governor i started making some calls to various folks to be like hey you know what do we think of this guy is he going to be a good candidate you know obviously i and a lot of other people before they evacuate the state care a lot about the future of california so i started checking around i spoke to several people who independently told me that there's knowledge about this guy sending you know picks to employees and that this guy has a bunch of stuff that's going to come out about him so i heard all of this not from one person but from several different sources this was back in december going into january and i largely kind of dismissed it because i was like if this is true this would have all come out already i'm like there's no way this is true if it was true like people would have talked about it they would have made a thing about it if multiple people are telling me about this then i've got to assume that it's a rumor that's being used to block him from running for governor versus it being a real thing because multiple people had this knowledge and this information so this was december january where i had these conversations and at that point nothing had come out so i was like okay it doesn't seem like this is real and then everything that i had been told started to come out in the last week so the striking aspect of all of this for me was how much knowledge there was about these various incidents with the guy how so many people had this knowledge and how no one had actually brought the knowledge to bear which begs the question SPEAKER_365: why did they not do what was right by the victims or why did the victims sit on the sidelines SPEAKER_97: waiting for the right moment to all come out together because this was broad knowledge within a community of people and they made the choice not to bring it forward with that knowledge and that's what was so striking to me about this whole thing i had honestly dismissed the whole thing as just being rumor mongering to try and besmirch the guy and it turned out that these were all being held back purposefully and deliberately for a very particular moment in time when they were all brought SPEAKER_69: forward to be used and let me just be clear these are all allegations nothing's been proven in court he doesn't get his day in court absolutely we just want to make sure there's a bunch of SPEAKER_365: alleged here yeah no matter how bad yeah and all that i'm saying is that people had told me about these supposed claims five months ago four months ago multiple people and had chosen not to bring it forward and that the victims had not come forward publicly with these claims and then there was this coordinated effort to bring everything forward at the same moment and that's what was so striking to me just how coordinated all of this was who's controlling it who do you think like is there SPEAKER_89: like a meeting is there like a account queen nancy pelosi jesus christ it's so i don't know if that's SPEAKER_97: true well i don't not just her i'll tell you my sense of it my sense of it is that there are certain SPEAKER_365: insiders and he's not an insider and those insiders are like the katie porters of the world katie porter i think is who the democratic establishment wants to be governor she is an insider to SPEAKER_97: national democrat she's an insider to california democrats and i think that she's the preferred SPEAKER_17: candidate tom steyer she's a spousal abuser i don't know that katie porter is like this ultimate David Sacks: insider but i think there are look there are clearly insiders the democratic party is a machine that exists to siphon off as much money as possible from the public till to the interests that support the party and it's their gravy train and they're not going to let anyone stop that again sacks i don't know if it's just the demo second they're not going to let that gravy train stop for one second now the democratic party had a huge problem in this california governor's race which is SPEAKER_147: that the democratic field was very fragmented and so the two republican candidates actually were pulling the highest and so that just so the viewers have context california has this weird jungle primary system where the top two go to a runoff they don't have a democrat lane and a republican lane they just take the top two jungle primary and then they go to the runoff even today still hilton and was it bianca or whatever they are polling at both around like 14 or 15 if the election were held today you'd have two republicans in the runoff so the democrats needed to winnow the field down and have fewer candidates in addition to that they must have been concerned that all this oppo on swallow will come out once it was him versus say steve hilton and they didn't want it to come out later when they could lose the election so the powers that be made the decision to lance the boil probably there was a conversation with him to tell him to get out of the race he didn't listen and by the way remember this feels a lot like what happened with joe biden SPEAKER_375: when he had to drop out of the presidential race it does sound surprisingly like that the whole SPEAKER_147: democratic establishment and all the mainstream media were saying that biden was sharp as attack okay and then he had that disaster debate performance with trump and it became clear yeah and you could just see the text messages were flying during the debate between the democratic party insiders and by the time that debate was over they had congealed on a new position which is that biden had to step aside and then nancy pelosi was reported as having gone to the president said we can do things the hard way or the easy way imagine that like telling the president of the united states we can do things the hard way or the easy way and then biden disappeared for a week and magically he stepped aside by tweet remember that he published a statement that appeared to be done by an auto pen people were speculating whether he was even behind this or the staff pushed him to do it the whole thing was extremely weird but he you know was clearly muscled out of it just a few days before he had said i'm not leaving the race no matter what i mean it was like straight out of that wolf of wall street meme they're not getting me out of here and then a few days later he's resigning by tweet and again nancy pelosi appears to be the figure at the center of both these things she was hold on hold on a second pelosi is reported as having been swalwell's mentor i guess she found him roughly 20 years ago to run for congress in the first place when the republicans wanted to kick swalwell off of the intelligence committee the house intelligence committee for allegedly being involved with that chinese spy feng feng it was pelosi who protected him so she's sort of been a central figure in his career i'm not saying she approved of anything he did but listen politics is that there's no there's no way that that button gets pushed without going to pelosi for the sign off right i mean she's like the boss of this operation and i think that the same thing happened to swallow that happened to biden is they went to him and said we can do things the hard way the easy way he was too dumb to SPEAKER_279: listen and they did things the hard way yeah shout out nancy pelosi incredible day trader and uh shout SPEAKER_48: out to a friend of the pod row uh bro who's now beaten nancy pelosi i think his trades this year SPEAKER_382: he's uh he's actually even beaten nancy pelosi that was the uh rocanna has traded 600 million SPEAKER_384: dollars of stock he trades more frequently than citadel securities i mean it's incredible yeah where's SPEAKER_373: his p out of terror i want to get in on it the congressman you've been supporting for years tax SPEAKER_273: is a great stock trader he's uh apparently we should have been talking to him not about taxes we should SPEAKER_147: have been talking to him about trades there were things i liked about rocana i mean he he did support freedom of speech with the whole twitter thing no you know what it was is that the overton window shifted so much supported him yeah when i supported rocana freedom of speech was a big issue and he was David Sacks: one of the only democrats to support that he was also i think the only member of the progressive caucus to support a diplomatic track for ukraine which i supported and i gave him credit for that SPEAKER_147: and yeah i knew that he was in favor of wealth tax but i thought that was just a very unserious proposal that you know it wasn't in play in any way well the overton windows shifted so much that now the wealth tax really is a possibility so you know things have changed here it is shout out to SPEAKER_237: our boy ro connor look at this right about now chamat's thinking about making a managing director SPEAKER_69: offer here's i mean ro if it doesn't if you get booted out of office you could become a uh managing SPEAKER_97: director at alt capital statistically like even if you had insider information making that much money is SPEAKER_48: like very hard holy cow nancy pelosi is gonna shiver o'cana next for not giving her the uh giving her the uh inside track on whatever he's betting on what did he bet well look any any as we all know any SPEAKER_19: investor can have a good quarter a year but to put up the kind of returns that nancy pelosi has done over David Sacks: decades is nothing short of miraculous it's generational it's a generational run give her her flowers she's substantially better than warren buffett i mean stan druckenmiller and nancy pelosi are three of SPEAKER_399: the most accomplished investors of all time whatever you did to the poor buffett fans chamath they are SPEAKER_400: incredibly angry at you for desecrating his legacy i didn't desecrate his legacy i pointed out one SPEAKER_43: unavoidable fact which is his returns are bimotally distributed pre and post reg fd when you have to follow the rules of disclosure everybody's returns got kneecapped when there was no disclosure rules SPEAKER_77: his returns were off the charts that's just the mathematical truism now what's interesting to note is Chamath Palihapitiya: the reason why nancy pelosi's returns are so consistently good is reg fd does not apply to people in congress that should be the takeaway they can learn we gotta stop them they can learn things in their committee meetings in fact there are situations where things are disclosed and then they are trading in real time shout out to the skiff yeah get out of the skiff quick and get that trade in so i have enormous respect for warren buffett and what he's done it's it's he's he's the goat of goats but the returns post reg fd are they are just materially worse than they were pre reg fd and that's what's he gonna do with SPEAKER_407: that cash position jamal speaking of buffett they the market why the market 300 billion sitting there SPEAKER_43: the market is in a very complicated moment right now if you look at historical indicators of value Chamath Palihapitiya: so if you look at chiller as an indication of value it's peaking if you look at the buffett index it's peaking so there are things that when you look at it look like all-time highs and the problem with that is you would say oh man but there's this weird dispersion happening in the market dispersion means literally a few companies are hitting all-time highs i think it's like eight or nine and everybody else is not so it's a really complicated moment it's hard to understand what's going on but he's got a lot of cash if he's sticking to his knitting he's looking at the chiller index and SPEAKER_43: he's looking at his own indicator which shows all-time highs and he's waiting for a correction he's not SPEAKER_63: really in charge anymore like birkshire hathaway is not warren buffett anymore even though he's a big SPEAKER_198: other he's not really doing it but i mean the fact that they're sitting on that massive polygash says something that they're not putting it to work in the market says they don't see an opportunity yet SPEAKER_47: sacks travis i'm curious your takes uh either one of you can go whichever order you want on how is the market crushing it while we're in week seven of a war and we put a hundred billion dollars or something into this military activity in iran and the market is pricing it in shrugging it off and we're hitting all-time high sacks i don't know if you're actually first yeah yeah i mean look i think it's pretty SPEAKER_19: straightforward which is that in the wake of the meeting in islamabad that the market is feeling confident and pricing in that the war is going to get resolved the president also recently said that it's very close to being wrapped up the military objectives are close to being achieved and he's made it sound like it's going to be resolved yes a deal was not signed in islamabad i always thought David Sacks: that was an unrealistic expectation that these two countries which are at war with each other and in fact have had hostile relations for almost 50 years are going to resolve all their differences in 24 hours it's not realistic but the impression that the market i think has and clearly is trading on this is that that war is going to be what donald trump said which is an excursion and something that is on its way to being resolved that they've made progress and jacal you're right all week has just been incredibly strong i think by tuesday the market had recovered all of its losses since the start of the war i think it made a new high yesterday on wednesday and it's making new highs fresh highs today on thursday so you just have to say that at the present time the market thinks and i would consider the stock market to be the ultimate prediction market that this war is on its way to being resolved just to SPEAKER_147: qualify i'm not speaking as a member of the administration of course i'm not saying that i know something okay i don't know i'm just interpreting what the market is no clipping i'm not representing anyone and i don't know anything different than what any of you know David Sacks: i'm just saying that i think this is what the market is clearly pricing in and i'm paying attention to SPEAKER_19: what the statements are of the president and vice president and this travis you and i were talking SPEAKER_69: the other day while you were yeah slaughtering me in backgammon when we won our eight point match SPEAKER_48: you're almost caught up about the taco trade not trump always chickens out you have a theory SPEAKER_00: about trump always cares about optics unpack it for us travis yeah so while i was beating you in SPEAKER_63: backgammon i sort of had it you know there's like the in because jay cal asked me and the inside is is like and i think this maybe is just the more simple view of things which is trump's weather vane is the stock market like we see vol is up we see the vix is really high but you know what the s p is trading in this band that's actually fairly tight given the crazy that's going down and everybody's nervous but actually he he moves in the policy space he's he does not let the s p go down too low people also get the sort of the panicking thing now which is like he gets people nervous he makes moves and then he comes back to sort of reality and gets things done is practical and and probably the the better parts of what he he might be you know what he does well and people are pricing that in so there's there's all the things sax is saying about the nuances and the details but the sort of super high level like i'm in low earth orbit view is like the stock market is trump's weather vein and he's like we'll go to the place that makes the stock market come up and if he's go and and if it's up and it's too high he almost feels like it's too easy so he makes it hard on himself again and then he brings it back up and the traders are getting used to it i think yeah it's like that's my SPEAKER_124: catch a moth with alan keating it's just like how is this guy solvent he's literally playing every hand SPEAKER_48: of poker he's losing tons of money and then all of a sudden by the end of the night he gets two big pots and he's got the nuts both times and he pulls out of the stall what's your take on the market today SPEAKER_80: chamath yeah i mean i'll just do it again but i think the the schiller pe nick i sent it to you SPEAKER_77: shows near all-time highs then the second is the buffet index which is the sum of all uh u.s equities divided by gdp is also at all-time highs so this would generally mean that you need to be increasingly a little bit more risk off but then the opposite side of that and i sent you a third one and this is why it's so confounding is you have signals showing everything which is which typically doesn't happen and this is this dispersion point where when you see this performance and it's up SPEAKER_80: five percent in the first you know half of april typically the market is up almost 32 percent on average for the rest of the year and we were already up as sac said you know seven and a half SPEAKER_433: percent already i'm trying to read this graph this is crazy i don't even know what's going on here SPEAKER_77: this is just this is just the dispersion but the the the idea of all of this is i think we're in a moment where you can find a piece of data to underwrite your bias and i think that's where there is a lot of danger i don't know for me personally i'm generally more risk off right now and more importantly i'm waiting for these ipos so that i can to be very honest with you de-lever and get some Chamath Palihapitiya: chips off the table i think that it is crucial that this spacex ipo get done asap and then i think it's even more crucial that one of anthropic and open ai front run the other one and get out first SPEAKER_48: and the first two charts are the reasons why i it's fairly obvious to me what's going on here you have these multiple trends going on at the same time the reason people are traders are valuing SPEAKER_69: this and i think there is some smart money in the market right now is what you're seeing in terms SPEAKER_26: of the earnings potential of these companies as they deploy ai as they have unlimited intelligence and the top employees at the top companies become 10 or 20 or 30 times more productive that's never been seen before microsoft office may have made you 30 more efficient the internet may have made you 50 more efficient but none of these things made you 10 times and you had a really interesting point that you slipped in earlier tomorrow which was nobody knows how to harness these things yet right and it's producing slop the truth is 10 of people do know how to harness it 20 maybe and i watch this in my own organizations and i watch it in 600 portfolio companies the ones that do deploy it correctly they are running the table on the ones that are not so the efficiency boom that we're going to see at these companies whether it's meta or uber or airbnb maybe i'm just whoever executes it properly SPEAKER_438: is going to be phenomenal the earnings will be insane maybe i'm an idiot but it has not translated SPEAKER_88: into a tsunami of more revenue and more profit for me yet maybe i'm the only one and maybe it's SPEAKER_48: everybody else but me but i haven't seen it i see it in a lot of companies so i think in private companies we have two companies as just two examples micro one which is doing data you know dark pools of SPEAKER_26: data for these language models and they have built technology that allows them to build data and allows them to collect data to help the large language models companies grow and they are on a tear by using this to identify and find great people who can then contribute to these corpuses and then SPEAKER_69: we have one tax gpt that is making the accountants i think they have six or seven percent of all SPEAKER_440: accountants using their platform you agree they're just ripping i hope you can agree with me of Chamath Palihapitiya: accountants i hope you can agree with me with the following statement small companies nibbling SPEAKER_77: at the edges is not where these guys will build a multi-trillion dollar market cap i think we're SPEAKER_48: we're both in alignment big companies dumb companies slow to implement the technology startups no they SPEAKER_57: are dumb when it comes to implementing new technology they're always the laggards when it comes to SPEAKER_72: implementing new technology the reason that they are slow is not because they are dumb the reason Chamath Palihapitiya: that they're slow is their business is much more sophisticated and much more complicated than many other businesses and what i'm saying is if you can't prove that this works in the big time prime time big league use cases it's a toy all right sax where where do you stand are you in the jcal SPEAKER_48: position the startups are showing the way they're being massively efficient they're growing revenues like we've never seen in the startup community before with less people or you're in the chamath camp hey big companies are not having a drop to the bottom line and they're smart or both things are true SPEAKER_137: where do you stand sex be the uh adjudicator of this case i mean honestly i'm probably closer to SPEAKER_28: you jake hell i hate to say that um and listen because look i think people are still figuring out David Sacks: how to drive business value out of ai and change management is hard and the bigger the company the harder it is so what's happening right now is there are a lot of transformation projects at large enterprises that are failing there's like a big mckenzie study on that but if you look at activity from the bottom up i think it's very interesting it's becoming more interesting and over the last several months obviously with coding reaching a new level we're starting to see very interesting things happening there and obviously the revenue that's now being generated from these coding models is you know again it's exponential like we've never seen before so the roi is finally there at the model layer meaning before you know people were saying that it's a bubble because you had all this massive capex at the data center level and there was no roi coming at the model layer now we have the roi at the model layer and i guess we're sort of questioning whether the roi will be there at the application level but in any event i think things are progressing i mean Chamath Palihapitiya: look i fundamentally i'm bullish on this whole thing okay no no no sorry let me be clear hold on hold on okay obviously i'm bullish i'm in this i'm in the space i'm doing it you're in the arena we have seen in every single wave in the mobile wave we needed consumers to show up at scale so we needed consumer experiences and it was very obvious that there were these consumer businesses that were going to be if not already incredibly incredibly profitable google and facebook were profitable within the first few years they never looked back and all i'm trying to point out to you guys is there is not one great example yet if we believe enterprise is where all the money is and if we believe that's what's going to underpin these trillion dollar valuations just please somebody show me a couple of good examples SPEAKER_72: of scaled profits okay fair enough travis uh final word here on but by the way can i say one other thing SPEAKER_19: i think i think jimath has a good point about being risked off right now because if you just look at David Sacks: valuation metrics they do seem to be quite high and i've seen other uh versions of those metrics as well so look it's very very hard to time the market i don't try but i think you could make an argument SPEAKER_19: just based purely on valuation levels not events that you want to adopt a more conservative posture right SPEAKER_455: now i think the bet you're making then travis is are these valuations so high right now on the SPEAKER_69: standards that the efficiency that ai could bring to these companies is uh not real enough to continue the growth from here it's not a catalytic enough technology and you know when you look at all these Chamath Palihapitiya: traditional companies have horrible valuations they've been crushed so my point is if ai is real the upside is also real all i'm saying is the details guys matter it's very hard to take a very complicated business and all of a sudden quote unquote transform it it's not as easy SPEAKER_279: as it sounds that is easy to say for sure travis go ahead final word final word from travis first is SPEAKER_63: when it comes to big companies i think the big thing about let's call it the autonomous enterprise SPEAKER_218: is change management is the big boy and and change management actually is about all the people that already work there the middle managers the technocrats the bureaucrats the whatever the crats SPEAKER_03: the crats and getting the change management going the change management going there is it's a human thing and it's very tricky with very complex processes many of which are not even documented SPEAKER_63: and in theory it's just all going to happen real fast but in practice like that's hard so that that's part one part two what i'm seeing with true tech companies real companies public i would say public like hardcore public companies i mean like you know founder led you know folks that are really cranking public companies and tech companies that are sort of up and comers i talked to ceos across the board and they're like they're fired up about the development the sort of the the productivity and deployment schedule and like the new features they were able to roll out much much much faster because they've pivoted their cultures sort of very pro ai development um and i'm getting like almost at this point a consistent feedback from real founder ceos that like this stuff's real and it's it's it's not just hype now there are folks pushing you know selling their book that are like oh we're at agi and all this anybody who's worked with these agents and done the ai dev stuff there's a lot of good stuff but they're not they're not that smart yet they're just not that smart anybody who's done like i've SPEAKER_218: got a side quest where i'm just investing i have agents investing and betting on calci and paulie and you know these other places and it's silly how dumb the agents are even their best agents SPEAKER_102: to be honest yeah the agents are what you you have to be human in the loop with the agent the SPEAKER_48: agent has no taste the agent can do repetitive tasks the agent is not going to do something novel and they quickly can get lost in the forest we had to spend a lot of time we had to spend a lot of time SPEAKER_63: with our investing agents getting them on board with the idea that if you want to make money investing SPEAKER_65: you can't be on both sides of the same bet yeah yeah i mean there it's just like that way that's SPEAKER_218: where we're at it's the agi is not here and it's kind of silly for folks i think to sort of suggest it David Friedberg: is absolutely hey guys we got a wrap travis you didn't get to play uh the price is wrong i have two more you guys want to do a bonus round if the price is wrong yeah do it do it see if travis gets it SPEAKER_331: okay you guys can steal you guys can steal here let me get my background i gotta give me the music travis you're gonna get to do the bonus round here let's go everybody we got travis kalanick he's here he is a professional water sports player from tallahassee florida how is it down there in tallahasse florida i understand you do a little handy work uh to pay the bills but you spend most of your time out there on the lakes and the oceans doing water sports yeah you like the water sports i love SPEAKER_218: the water sports i i'm doing water ski lessons uh on the weekends anybody's interested all right i'll SPEAKER_331: be out there uh at tallahassee florida okay now here we go it's your job to figure out the price is SPEAKER_475: wrong the price is wrong here we go it's so funny the price is wrong here here we go this is your bonus SPEAKER_295: round yeah all right this startup raised 900 million at a nine billion dollar valuation this is a big one this is a big one before dissolving in 2018 and their famously deep voiced founder ceo SPEAKER_331: is currently serving an 11 year sentence in a federal prison yes can you name that mispriced startup can you name the mispriced startup it rhymes with shmaranos shmaranos okay you're you're closing in here be careful you have to formulate a question you put lose to a steal final answer theranos theranos okay very good 100 points you're on the board and here is your next one this is your next one okay this is the overtime all three players get to play this one whoever zooms in first and says it this is your SPEAKER_295: final that's the mispriced startup here the price is wrong on this startup here come on you can do this come on you got this now here we go you can do this this short form mobile first streaming platform raised 1.7 billion from top investors jeffrey cassie first stop the the uh what is it SPEAKER_493: you gotta yell it out you gotta yell it out top investors across holiday valley and shut down in SPEAKER_495: just six months quickie quickie quickie wrong david sacks wrong no no i know this was the uh SPEAKER_308: yes there's your champion everybody let's tell him what he won he uh apparently he's won a pierre de tear uh in downtown uh east austin a pierre in east austin by the airport god knows what shenanigans are going down there i think if you need methamphetamine or a date you're gonna have an easy time there chamath okay oh hey chamath um i'm getting hammered with people who want to come to the sold SPEAKER_72: out liquidity 500 was the cap you put on it you've been dicking around as dictator can we add 50 seats i think we can add 50 or 100 i don't know lisa can we add 100 get a simulcast room going SPEAKER_00: all right we'll see you all oh and uh the uh all in summit tickets are on sale go to allin.com SPEAKER_48: uh and yeah don't get shut out of the summit folks because this happens every time you guys email me two months out the tickets have been sold out for four months so get your tickets now SPEAKER_523: uh at allin.com another amazing episode and we'll see you next time bye bye bye