SPEAKER_00: all right everybody welcome back to the number one podcast in the world i am your host jason calacanis and with me again a couple of my besties david friedberg you know him as our sultan of

SPEAKER_02: science lots to get into today sultan huh how you doing i'm keeping busy thank you keeping busy jimoth and i on valentine's day we had a little trio we were on mk ultra's podcast and it hit number four all in podcast of course number one uh chamath reflections on our meg and kelly our triumphant meg and kelly valentine's spectacular it was fine it was good okay wow

SPEAKER_05: thanks you're such a great performer giving me so much to work with chamath as always but it was a

SPEAKER_02: great great pod shout out to our friend and friend of the pod meg and kelly and awesome we've got an incredible duo for the first time we've invited a duo to join us in the red throne david sax's seat he's busy saving the country but we're really excited colson brothers are with us thank you for

SPEAKER_08: having us you guys want to hear a great lost porn story john has one for you the last time we met

SPEAKER_12: chamath was 18 years ago when we were working on our prior startup automatic with parj and and cool taggar you were how old they were 17 18 19. it was one of these san francisco setups where it was like a two-bedroom apartment it was a few of us living there i think maybe six people working out of there and a normal number exactly normal numbers to load up a two-bed apartment

SPEAKER_16: with and then chamath you came and visited this is what's so brutal about this okay i could have invested

SPEAKER_18: a dollar one single dollar and i would have made a billion dollars i remember meeting these guys

SPEAKER_22: and i was with alan morgan who was my boss at the time i was a junior principal at mayfield shout out and i think we tried to guys i don't know if you remember patrick and john i think we tried to invest in in the business or it didn't happen or then you ended up

SPEAKER_24: shutting it down but right away you spun back up and started stripe and i just watched from the sidelines the whole way it is such a first of all amazing it's an well no it's an amazing place for silicon valley where you can like see these people just keep pushing the boundaries up and up and up number one number two the thing that is such a learning

SPEAKER_27: for me is like why didn't i just pick up the phone and call them at any point in the last 17 years

SPEAKER_41: what am i thinking it's so brutal oh my god it's so brutal two things one um first you probably don't remember this but i remember that meeting that you know we offered you and you want something to drink we did not have a broad selection i think we had water or milk in the fridge and and you asked for a glass of water um and so i went over to the sink and i realized that we hadn't really been on top of the uh the washing up so i had to sort of gingerly wash a glass for you to get your glass of water which um camera if you touched it over the course of that meeting but then secondly like when we started out with stripe like the fintech sector basically didn't exist i mean the the word hardly existed and didn't exist yeah yeah people just didn't think that i mean you know teenagers weren't actually teenagers at the time but you know people in their early 20s college kids taking on you know paypal or the incumbents or regulated financial services or whatever you know people just didn't think it was a good idea so i don't know uh you you you certainly were like the vast majority of investors we spoke with in the first year or two of stripe turned us down so uh you were you were not

SPEAKER_44: anomalous john tell us what that meeting was like and to just take you back to the moment here's a picture stop stop there's a picture no striking here's a picture of free free

SPEAKER_02: nine-figure tremont oh my god and this is when he shopped at macy's does that maybe that jogs some memories john when that guy walked in with his khakis and that light pink brooks brothers shirt

SPEAKER_12: what did you think i don't know i think you can uh you can go back and find historical photos of anyone and use them too like if that's the worst historical photo you have that's pretty

SPEAKER_56: that's pretty lightweight stuff exactly jason do you want to tell everyone in the audience what stripe

SPEAKER_58: is and i mean do we have to okay stripe processes payments

SPEAKER_02: this is a 10 plus year old startup that basically if you're a startup company and you want to do

SPEAKER_00: transactions you use stripe for example the all-in startup uses stripe to pay for the tickets and then we give these guys for some reason a half million dollars every year no discount they don't

SPEAKER_02: sponsor the event and uh they're making a fortune they got 10 000 employees and uh the company changed

SPEAKER_53: the world well we've never been uh we've never been offered to sponsor the event i didn't know this

SPEAKER_62: was the this was an option but you hit us up for a half milli last year i mean maybe this year you

SPEAKER_15: can negotiate it live that's broadly accurate i would just fact check that it's nowadays not just startups even though they run on strike but also the world's largest enterprises hertz amazon ford all these kind of companies and so when we started out with stripe we thought it

SPEAKER_12: would only be for startups like we thought those were the people who needed a problem solved and we thought payments was broken for them and as time went on we just found out it was kind of broken

SPEAKER_72: for everyone and so and is it public how much volume you guys do a year do you guys talk about

SPEAKER_74: that it's more than a trillion dollars a year a trillion dollars a year is processed through your

SPEAKER_76: network and which works out to you know global gdp is around a hundred trillion a year so it works

SPEAKER_78: out to around one percent of global gdp incredible and you could say well you know gdp is is final goods and and you know stripes processes more than only final goods so it's not exactly

SPEAKER_41: the right only you say that okay well look it's not exactly the right or a fair comparison or something but but stripe mostly is used to sell final goods so i think it's i think it's reasonable and just the other thing i'd say is uh you know people i think reasonably think of stripe as a payments company because you know that is certainly what we started out doing and uh and it's uh certainly the largest line of our business but the thing we kind of realized a couple years in is that you know what business like the the structural secular thing that's happening is that every kind of money movement is going from being manually orchestrated to being orchestrated by software and there's you know some programs somewhere making the thing happen and so because of that like just because of what we hear from customers and the the pull there we're now you know

SPEAKER_45: helping with lending we're helping with card issuance we're helping with treasury and money storage we're helping with cross-border money movement stable coins we got to talk about stable

SPEAKER_66: coins yeah why'd you do a stable coin stable coins are finally happening and they're

SPEAKER_15: really useful like we followed crypto for a long time the bitcoin white paper dropped in 2008 the year before we started working on stripe and so it's been funny where stripe and crypto have grown up together and you know we tried to make bitcoin happen as a payment method on stripe just wasn't that good as a payment method i mean it's good as a store of value as kind of a gold substitute but transactions are slow transactions are expensive you never know exactly how much you're going to get because it's not denominated in dollars the stable coins are now really good if you look at you know something on an ethereum l2 or solana or something like that and so we bought a company called bridge late last year who is building the stripe of stable coins and so if you're i mean i think you guys have talked about them a little bit but you know people like spacex using them for treasury management people using them to offer us dollar services to people all around the world just stable coins are i think the first really big payments use case and i think it's finally coming because the tech is good enough

SPEAKER_24: is there a moment guys where is it a regulatory event where you'll say the visa mastercard duopoly can get challenged is there a set of boundary conditions that you have written down where

SPEAKER_90: when you can check a few of these boxes you know that it's time for those companies to get dismantled

SPEAKER_92: the behavior we're seeing right now is that stable coins are most interesting and seeing most

SPEAKER_15: adoption where there is some cross-border component and so you need to manage corporate treasury around the world you want to send remittances to people in other countries often it's people in other countries want to hold dollar balances or things like that what we've always seen is that i don't know in the us things work pretty well in europe things work pretty well and so we even see this pre-crypto where the way people pay for stuff has been radically changing your upi in india picks in brazil you have all these designed by central banks actually really good kind of government-run venmo solutions those have all happened in emerging markets broadly and not in the us and europe we certainly keep our eyes peeled for that changing at some point but i think right now i don't know patrick would you characterize it that way that like a lot of the interesting stuff we see is

SPEAKER_41: happening internationally yes so you know with respect to visa and mastercard i think an important thing to keep in mind is that most of the interchange fees that are charged to merchants and

SPEAKER_78: you know you mentioned uh what we charge the all in podcast you know the vast majority of that flows right back to the uh to the issuing banks uh in the form of interchange and almost all of that flows

SPEAKER_41: right back to the consumers in the form of you know the lending that the the the cards themselves represent but then also in card rewards like card programs are not actually big profit pools uh for most of the major banks and so i think any you know any substitute for for visa and mastercard in that sense you know the sort of a question of well are the consumer rewards going to go down or the consumer protection is going to go down would be extending less consumer credit and maybe other points in that space are viable but you know it is a set of trade-offs and it's not as simple as this this enormous rent extraction happening john's totally right i think the interesting use of stable coins is cross-border is outside the us i mean the big use case that's taking off right now is consumers in other countries seeking to hold dollars you know we in the us here today you know we obviously benefit from having able to do that the vast majority of people in the world have kind of a are subject to a worse currency worse in the sense that it's less stable uh it's more inflationary you know storing savings is is much less favorable uh you know if you look at the naira for example there are a lot of people in nigeria and the the currency there has devalued by a factor of you know three or four over the last couple years and so that use case of consumers being able to store dollars is really exploding and we think about this really as kind of an analogy to the to the euro dollar system where you know the euro dollar system in the 70s and 80s this was a way for companies to store dollars and to you know have something more stable and and reliable and so forth but it was only except i mean i think the minimum transaction size was like a million dollars so there's kind of a very high barrier to entry whereas with stable coins now you can be a consumer in ecuador and you can have like a 10 us dollar balance and that was just not a product that was accessible to you before and so i think it's i think it's a really big deal you know certainly for people in those countries and in some sense also for the us because the dollar status as the world's reserve currency i think is is you know i mean in the process of becoming much more deeply established

SPEAKER_02: yeah that is the huge win for allowing stable coins and you know making them legal giving them rails putting aside tether and all the bands and fugazi stuff they've been doing or have done and all the lawsuits that they've lost and the bands in different countries having usdc having yours and

SPEAKER_00: other ones in the united states means we can regulate them and they have to buy treasuries and so okay dollar supremacy continues and that's fantastic but right now all in just using the example could

SPEAKER_05: accept payment in stablecoin correct with stripe we just check a button we get stable coins yes okay

SPEAKER_98: so then the next piece i have is we will follow up with you afterwards uh to make sure we get that going you can try that i'm actually really excited that you guys are going to be sponsoring the

SPEAKER_99: all in summit this year that's actually exciting so it's super exciting no freeberg is great at securing

SPEAKER_00: the back yeah the thing that's interesting though is if let's say we had a milli sitting in our stripe

SPEAKER_02: account and then we had to pay a venue or pay other vendors and we're sitting there in uh your coins

SPEAKER_77: called bridge is that what's going to be called or it's called bridge is the is the company that's the platform and you know that that's like the right okay so they're not a stable orchestrated

SPEAKER_104: correct correct but you'll have a stripe stable coin at some point yeah like one bridge actually

SPEAKER_78: has one already yeah bridge has a small stable coin great but we don't need to get into details but but

SPEAKER_41: bridge is primarily set of software apis got it but you'll obviously have a stripe stable coin the point is if you turn on stable coin acceptance with um you know for for all in today that'll use usdc

SPEAKER_00: perfect now could we then go pay people from our stripe account and then you could lower our fees if

SPEAKER_02: they were also doing stable coins does that exist today or is that something coming next year look

SPEAKER_15: you could pay people in stable coins but again to the point of where you'll see adoption first paying people via bank transfer in the us like yeah it's not great it's kind of slow everything like that but it's fine it's not the biggest problem it's really cheap today yeah yeah exactly whereas the people who are using bridge it's like scale ai is you know they have to pay the contractors all around the world and when you want to get money to people in the philippines that starts to get really annoying and expensive and so just from our point of view the like real hair on fire problem is the international stuff and domestic i don't know i assume you're paying domestic suppliers it'll come

SPEAKER_41: later i think you're i think i think you're answering narrowly to you know stable coins i think everything you just said is is right but i will say i think jason your intuition that man it's really inefficient and annoying to you know engage in b2b transactions and to get these invoices paid and just like the whole system and if you look at most companies they're losing one two three percent of revenue to ap and ar now some of that might be because of the transaction rails themselves a lot of just because of you know baroque inefficient processes uh where you have humans sending invoices humans reconciling them you're trying to line up transfers in your bank account statement and figure out you know what corresponds to what and so on and that's super inefficient and so we're separately i mean simple comes to be part of the solution here but but but there's more to it separately we're trying to solve that with a product called stripe billing which we actually just announced uh last week has passed you know half a billion in uh in arr and so uh we we can send an invoice to somebody

SPEAKER_114: which right exactly exactly so that's like fresh books or whatever those other products in the market

SPEAKER_22: are all amazing all the back office is there a version of a network effect inside of stripe for their customers where if i just allowed you guys to just be integrated into my gl somehow and you gave me

SPEAKER_90: some kind of phantom bank account why isn't it just a ledger entry if i'm just making a payment

SPEAKER_11: from me to somebody else that's also on stripe the thing we really want to solve is all the calculation

SPEAKER_78: the id verification the risk like those are the things that are actually expensive and uh if you uh if you look at this flow uh it's where companies lose their money today having said that you're right

SPEAKER_41: you know we're the the fraction of money movement on stripe where you know the two counterparties are both part of the stripe network is obviously growing and so i think that'll be another way we can reduce fees over time although again i actually think the biggest part of that is it's going to be because we reduce fraud like both counterparts are known and like right now i talked to a company a payroll company recently and they were describing you know how big a deal it is for them that you know both sign up you know fraudulent companies whatever and you know they can lose millions of dollars in a single attack and so having some kind of trusted node rather than just a great idea

SPEAKER_24: routing an account number that would be a really big deal for them look you have a very good pulse and what i would say is that as a subset of the economy you probably reflect a large part of the global economy have you ever been approached or have you ever considered on a regular basis publishing some sort of economic sentiment one of the big things that we've talked about is how many backward revisions there are to everything from non-farm payrolls to gdp that they've become so unreliable and so it's very difficult for people that are transacting in market to know what to do have you guys ever thought about that because i'm sure that you have a much

Chamath Palihapitiya: more accurate sense of where the economy is than many other people we have and i feel a bit rueful

SPEAKER_41: you know with you asking that question because i feel like on some level we should have done it and the thing that makes it kind of tricky is because two things one stripe is not like a full cross-section of the economy you know we're more biased towards online we're more biased towards innovative companies you know whatever that that you know it's kind of net that out somehow and you know there can be these stories where i mean during covet like the online economy was doing great uh the offline economy is of a different story so the interpretation can be a bit tricky but then just the second thing is the stripe business is growing so quickly and changing so fast that again you know it's not necessarily representative of of of the economy and even if stripe is way up year over year you know you have to be a bit hesitant and drawing conclusions from that having said that i think in principle you could draw you know some conclusions and you know one thing we we did look at uh was just inflationary data uh over the last couple years and i think you can construct and the team did construct a pretty reliable kind of leading

SPEAKER_124: indicator for inflation and so we would like to share that openly because you know i think it's i think it's a public good for there to be better and more reliable economic data all right freeberg

SPEAKER_130: before we get into the dock you got any question for the boys here if you were to kind of build the financial system from scratch today we've got swift we've got banks that store assets we have credit cards and these credit card networks then we've got transaction service providers that sit on top of this what's the right solution if we were to build a financial system for the world from scratch today and can you guys see a world where we bridge away from the credit card networks where we move out of some of these legacy systems or are they so deeply ingrained and everything that it's it's going to continue to be the same where we've got to build these complicated solutions into and around the legacy of financial infrastructure i'll give my view and then i'm curious what um

SPEAKER_15: patrick has i would say firstly there is just general tech scalability you know there's the um you know the finance industry has its version of the mine shafts for sure where uh everything should be uh you know highly scalable in real time and i think in a way stable coins are solving something that you would you don't technically need full decentralization to do but the ability to make kind of real-time payments any hour of the day or night is a useful property and again some private systems have also built that i think a big one for us is trust and the fact that the fraud problem hasn't really been solved in online payments a big reason people come to stripe is basically we are a reputation network across the internet economy and so when someone comes and buys something from a stripe user 93 of the time we have seen that card before and so the merchant can know something and know that they can trust this end user and it's gotten to the stage now where if someone comes along and buys with a credit card if they're you know signing up with an email address or a phone or something that we haven't seen before that is just ipso facto suspicious because you know they are coming along and maybe trying to it's a stolen credit card or or something like that and so a big part of what stripe ends up doing is acting as a reputation network to keep fraud out of the system that maybe

SPEAKER_134: you would have wanted to design in from from day one well in fairness jimov told me i could use that

SPEAKER_02: credit card anytime i wanted i don't think he remembered but i think you need to turn my account back on and freeberg i just got news from our ceo john mastercard just cancelled their sponsorship

SPEAKER_137: of all-in summits so this is costing us a fortune this podcast so far two things one to your point

SPEAKER_124: about just all these different networks and so forth i think stable coins are going to be a big part of uh a big part of the solution i actually don't think that's going to supplant all the consumer

SPEAKER_76: facing networks i think we're going to see consumer facing networks built upon and you know

SPEAKER_41: substantially leverage these things but i think stable coins will probably be the common rail and then just secondly i think part of what you're hearing is most businesses lose more money to fraud than they do to the kind of pure transaction costs themselves and you know you're hearing us talk a lot about fraud here and that's because one it's just it's a huge economic cost for these businesses today and there's even indirect costs where you make the consumer experience more hostile because you have to protect against uh you know possible fraud like you know why why do you have to type in all my bank account yeah all this stuff exactly but then secondly i think these we can just see it in the data these problems are actually getting worse and harder because you know ml ai

SPEAKER_78: globalization everything yeah exactly and so like you know various fraud metrics across the industry

SPEAKER_41: and the ecosystem are way up over the last couple of years now and strife actually down by 80 but it's

SPEAKER_00: it's really becoming an acute issue all right and we'll get into uh staying private longer and when you guys are going to pull the ipo trigger later in the show but we got to get through this docket we got so many great topics to talk about let's get to our first story here it's a kind of a fun one jamie

SPEAKER_02: diamond went on a rant about remote work and zoom uh in a town hall and uh here's a snippet a lot of

SPEAKER_148: you were on the zoom and you were doing the following okay you know looking at your mail sending texts to each other when the other person is okay not paying attention not reading your stuff you know and if you don't think that slows down efficiency creativity creates rudeness and so it does okay and when i found out that people are doing that you don't do that my goddamn meetings you go to me with me you got my attention you got my focus i don't bring my goddamn phone i'm not sending texts to people okay it simply doesn't work the young generation is being damaged by this that mean they may or may not be in your particular staff but they are being left behind they're being left behind socially ideas meeting people in fact my guess is most you live in communities a hell of a lot less diverse than this room that's not how you run a great company we didn't build this great company by doing that by doing the same semi-disease that everybody else does call some brothers tell us

SPEAKER_00: about how you run stripe are you remote does this resonate with you four years after uh we've come

SPEAKER_63: out of the pandemic i love listening to jamie diamond rants like i feel like that's business asmr um

SPEAKER_156: business asmr that itself to be a great podcast i was about to say i'm subscribing that's an instant

SPEAKER_66: ten dollar a month subscription but what do you think john yeah i don't know people just said a lot of during the pandemic like you remember it's like oh handshakes are going to be over business travel is going to be over every company is going to be fully remote i would say stripe broadly is in a pretty

SPEAKER_15: similar spot to where it was beforehand which is most people go into an office like most people are you know uh part of our san francisco office or new york or dublin or singapore or wherever and then we have a bunch of people also who work remotely i think kind of obviously you know jamie is right on some points i think also working remotely has had a bunch of benefits where there's a way larger talent pool available to companies like stripe and there's a lot of people you know you see uh kind of the two body problem where it allows a lot of couples where you know maybe one partner is assigned to some hospital in idaho and like they don't get to choose what hospital necessarily they got assigned to and the other person gets to work a high-paying tech job and so i don't know i think when like well like

SPEAKER_78: one of the theories for uh declining dynamism in the us and declining tfp is there's allocative efficiency

SPEAKER_41: uh of you know people declined as women enter the workforce because now you have you know what john describes this two body problem where you know both people have to make coordinated switches

SPEAKER_00: and uh remote work solidly actually yeah freeberg you're running a company now you're the ceo

SPEAKER_02: of ohalo tell us uh does this resonate with you what do you think especially about younger people his point and like being rude or being focused being in the meeting and then like maybe there's too many meetings where people are partially paying attention maybe there should be half as many meetings and people should be paying attention what do you think well there's always room for optimization

SPEAKER_130: there we we deal with this too too many meetings too many people i think what was most striking for me about the jamie diamond rant and the resonance it seems to be having particularly in silicon valley and particularly with folks that are in leadership positions or on boards is that this is another example of what i think is kind of a different tenor for leaders in business right now relative to where we were a few years ago leaders are starting to step up and speak their mind and speak more directly and lead from the front rather than lead from the back i think the last couple of years and i would say that the whole kind of transition away from wokeism and coddled employee workforces which is something that a lot of folks talk about i'm i'm not trying to just characterize it i'm just saying that's the characterization that's been placed on it is that the employees made the decisions and then the leaders kind of said okay i'm subjugated to the employees whims and needs and look at what's gone on with zuck he said you're with me you're against me here's a buyout option elon obviously was an exemplar of this at twitter uh we've now coinbase become yeah coinbase brian and his letter and we've now seen this become i think a bit more of a standard in the kind of emergence in the post-covid era that leaders can lead from the front speak directly and say this is the way things are going to be my job is not to coddle my employees my job is to lead my employees so that our organization our team wins and we achieve our mission that's the objective it's not to create a family workplace for everyone to be happy all the time it's to help the organization succeed and so i think i have heard from people individually i've seen this tenor shift underway right now um and i think that jamie diamond

SPEAKER_168: is another kind of exemplar of this that that seems to have some resonance all right chamath i want

SPEAKER_169: you to respond specifically to this next clip let's play the second clip about organizational bloat

SPEAKER_170: every area should be looking to be 10 percent more efficient if i was ready to part of 100 people i

SPEAKER_148: guarantee you if i wanted to i can run it with 90 and be more efficient i guarantee you i could do it i could do it in my sleep and the notion these bureaucracies i need more people i can't get it done no because you're you're filling out requests that don't need to be done your people are going to meetings they don't need to go to someone told me to approve some of his wealth management that they had to go to 14 committees i am dying to get the name of the 14 committees and i feel like firing 14 chairman of committees i can't stand it anymore all right the bloated bureaucracy at big companies

SPEAKER_22: your thoughts well you know there's that adage that says something akin to 50 of advertising is useless we just don't know which 50 yeah i think it's probably true for most corporate structures in general which is that a lot of the organizational bloat has evolved because of the way that people have responded to how you use technology so meaning if you went look back 50 years ago if you look at that famous picture of the microsoft early team they didn't rely on software necessarily there wasn't salesforce there wasn't workday there wasn't all of this infrastructure and so instead they probably organized by what they were good at and they just tried to do things efficiently and i suspect that many companies in the absence of technology found a way to just be very efficient that started to

SPEAKER_24: change when you had these rigid demarcations of where one job ended and another job started and part of why that happened is because you had all this software that went in and convinced people

SPEAKER_22: this will create efficiency but in return the chief marketing officer's job is x y and z this is how the roles are defined this is how people do it and so i think that the reason why things have become so

SPEAKER_24: bureaucratic and bloated is that there is just this propensity to run towards software because you think

SPEAKER_22: it's a solution at best it's a symptomatic aid it doesn't address the root cause and in fact it promotes bureaucracy and it promotes the bloat that jamie's talking about and if you look at jamie's pnl he spends 16 billion dollars a year on it and i suspect that if you streamline that you'd actually have half as many people because they'd be doing the job in a wholly different way and by the way the counterfactual to it is if you look at companies like facebook or google or tesla or spacex who designs and i'm sure stripe is the same who designs a lot of stuff internally that's custom built for their org i think the way that you see this in the revenue per employee and a bunch of these other metrics in terms of the efficiency of those companies so i think what he is talking about is that he is a victim of this push to productivity because he would look like a luddite if he didn't drop technology but by adopting the off the shelf stuff he introduces organizational bloat because these

SPEAKER_48: things are demarked very very rigidly you got the marketing team as you mentioned using hubspot and then you got like the sales team using i don't know sales force and organizational bloat the other

SPEAKER_22: thing i just want to say on the first topic is i've mentioned this before other than engineers who are who are naive but can be extremely productive from day one there are very few other job types

SPEAKER_24: where naivety is an asset most people early in their career are in a j-curve where they are negatively contributing and the whole yeah slowing everybody down yeah and the whole goal is that you invest in these people so that they come out of the j-curve there are probably other jobs that are

SPEAKER_22: like engineering but many many are not and so i think it's important to get the kind of mentoring you get by being in an office and in the absence of that i think these young people like jamie said are totally lost that's that's on them but then for the company they're completely unproductive and

David Friedberg: useless which is on us hey john uh toby i don't know if you know toby from shopify but he did this

SPEAKER_02: like zero based budgeting kind of concept for meetings he just purged all meetings at the beginning of the year he just like deleted everybody's meetings from the top down i'm

SPEAKER_186: curious how you think about bloat and just all of these meetings and committees do you worry about that

SPEAKER_187: at stripe we know toby very well and i don't know i always feel like yeah we should i'm tempted to

SPEAKER_12: take some of uh the ideas like we haven't done the meeting deletion one and you just say oh the meetings get recreated but they measured it and they didn't it sounds like uh and i do always enjoy

SPEAKER_15: toby's perspective which i think that you know many organizational problems are in fact software problems and you know you just need to write a script to literally like i think he wrote the script to use all the meetings uh you know from the google calendar instance but uh there's kind of this purity that uh uh you're you're over intellectualizing your problems and i do agree with your mouth on the remote thing where like it's it's very dangerous one thing that can be dangerous with as ceos think about this stuff is i think there is these unfair anecdotes that feel unfair that get people really riled up the quiet quitters the anti-work subreddit you know all these talk of people working two jobs and that generates a lot of energy with corporate leaders but you don't want to design your policies around like the bottom five percent of the company that would be a

SPEAKER_66: horrible mistake yeah you want to design your policies against the top town to leave some like

SPEAKER_15: outrageously productive remote people and they're off and again the cabin in idaho somewhere just you know coating up a storm the thing that we have seen and interestingly we measured this before covet because we were doing a lot of remote hiring and we want to see we wanted to see how much we should lean into it is that it is not good for early career people we can actually measure it in our productivity data before the whole discussion about remote work happened during covet and it's bad from a

SPEAKER_66: work point of view it's also just bad from a personal point of view where they go mad because they're 23 years old and they're not and they're in solitary confinement exactly it's literally solitary

SPEAKER_02: confinement it's ridiculous and by the way breaking news here jamie diamond now uh knows which 2000 or i'm sorry 1739 employees to lay off first there is a coworker.org petition to get jamie to retract his statement so the opt-in has been created if i know jamie i know he'll be uh retracting that statement right away absolutely he will bend to the pressure of those 1700 mids patrick how do you deal with mids at stripe how do you deal with the mids the people who i'm not saying you have any but maybe you've run

SPEAKER_194: into because you've got over 10 000 employees when somebody's average that must make you crazy how do you

SPEAKER_75: deal with it no the median employee at stripe is awesome the media employees try employee at stripe

SPEAKER_41: okay is is not the median person in the population at large although i think the median person in the countries we um you know we've put a lot of work in this team well no i was using the term mids

SPEAKER_199: mids are people who are just average people not the above average stripe people who opt into that but

SPEAKER_195: how do you deal with low performance is kind of what i'm getting it well look you need to have an

SPEAKER_41: aggressive performance management culture and to stay on top of that and look it's not it's not good for anyone to keep those people around because nobody likes feeling that they aren't succeeding and so if those people are you know their careers aren't advancing they're not getting you know positive feedback from their manager from their peers they aren't shipping things like whatever this is just like not a good equilibrium for anyone so we really try to you know stay on top of that we track it closely the thing just on this discussion broadly to say is i think people very readily fall into a kind of normative moralizing perspective on this stuff and people should be in the office they shouldn't be in the office but like there's a lot of should here i think it's helpful to just one kind of john reference with you know some of the analysis just you know be quite empirical and objective and just like look at what the data says and then second just recognize there's a lot of heterogeneity as in people have different preferences people have different abilities to work effectively you know when they're by themselves and you know some don't organizations are doing different kinds of work nvidia you know last i checked is doing pretty damn well and you know jensen is on the record of saying he you know doesn't give a about where you work coinbase shopify you know they're all these you know remote first companies and then you know i just recently showed the folks at jane street and they really believe that you know being co-located and to be able to share ideas on the trading floor and so forth is really important but i don't think these pictures are necessary these worldviews are necessarily contradictory they probably hire different kinds of people or in different kinds of businesses and so on and so i don't know i guess

SPEAKER_202: i'm just skeptical of flat shoulds in this space as many times yeah many paths to heaven uh all right

SPEAKER_41: so let's move on to our next story uh just keep in mind and labor productivity in the us is up like 20 percent in the last 10 years and so just like again you just just look at the data just the median

SPEAKER_124: person in the economy or the average person is uh is producing 20 percent on an inflation adjusted basis

SPEAKER_116: more than they were 10 years ago yeah that's going to keep wrapping up with ai and all these amazing

SPEAKER_02: tools that are coming out we'll leave that on the side for now because that would be an hour-long rabbit hole we could jump down but we got to get back into doge the number well i've heard a couple of criticisms of doge one of them is it's one-sided we're only hearing about you know people on the left doing grifts and usaid the other one is hey you're you're pointing at little tiny things like usaid

SPEAKER_00: when are you going to get to defense spending and social security well here we are washington post is reporting that in between doing sets of 47 push-ups defense secretary pete hegseth asked senior leadership at the pentagon to develop a plan to cut eight percent from the defense budget each of the next five years that's compounding eight percent here's a chart we're talking about close to 300 billion in savings over five years if uh they hit which isn't a crazy target eight percent a year it's just crazy in our country where we haven't even been able to have our defense department pass a basic audit if

SPEAKER_02: you've seen those type of reports let's pause there and just talk about military spending chama i think

SPEAKER_22: that military spending needs to sit downstream from technology because if you if it doesn't you're sort of misappropriating the money and what i mean is that we're inventing incredible capabilities in ai and autonomy i think that you need to take those things first and figure out how to projectize them because i think that builds the kind of modern war machine we need otherwise what happens i tweeted about this nick maybe you can find it but like the cbo red flagged a project where the navy was about to appropriate 1.2 trillion dollars to build frigates now there's a body i think of of military planning that says this is a projection of power and so you need to spend this kind of money because people want to see the big boats and the big iron in the water okay and maybe there's something about that but the reality is you can't be spending three or four billion dollars a boat and taking you know eight nine ten years to build these things it's so this is not sustainable and part of why they do that is it's not coupled to what's actually happening with respect to innovation where there are core pockets of companies saronic just announced a 600 million dollar raise today sail drone announced hundreds of millions of dollars of contracts with the navy and rule is doing that with the army so i think that military spending needs to happen downstream from what's actually happening in technology broadly speaking we don't have that what you have instead are system integrators with extremely deep connectivity that are able to contract well not necessarily to invent well

SPEAKER_00: freeberg any thoughts there on cutting defense spending obviously we have uh to chamat's point

SPEAKER_02: amazing founders like my guy palmerlucky cutting the cost of very important uh he's not your best he

SPEAKER_209: hates that's my guy he's my bestie oh no we it's all a joke everybody calm down you just have a

SPEAKER_210: little bit you know literally listen i know all the board members i got a personal relationship

SPEAKER_212: with everybody he's going to do everything he can to your ranch he loves jacob he loves it he everybody

SPEAKER_130: needs a foil uh it's all sorts of problems for the rest of us when you go out and talk about people

SPEAKER_214: for no reason it's great what are you talking about i never talk about stripe guys we don't have

SPEAKER_215: any beef with your employees mids for no reason for no reason you're just like oh what about your

SPEAKER_172: that was a hypothetical yeah okay i did say that you you guys pocketed 500 large look we we can

SPEAKER_216: come to the summit and you know palmer style just like yes oh my god yeah long list of things i've

SPEAKER_219: said about cheese please yes absolutely shout out to my guy palmer lucky but what do you think

SPEAKER_130: freeberg for sure let's get back on track here okay so here's what i here's what i think if you take the fence down to first principles there was an excellent tweet that we were all texting about yesterday it may be observation that trump's negotiations with russia and china where there's all of this hemming and hawing about those negotiations being complying with the wants and needs of dictators may actually be a shift in strategy on the global relationship the united states has with other global powers in particular a shift from the objective being about u.s primacy and the u.s being kind of the sole great power on earth to recognizing that that's no longer the case and that in a multipolar world we no longer need to invest in wars need to invest in conflicts need to invest in defense with supposed allies to try and build up our strength across the globe and i'm not saying that this is necessarily the right strategy but it was an observation that maybe the strategic imperative is now to have kind of a multipolar stance in the world rather than a stance of primacy and in that framing you then ask the question okay add make that the case now if we do agree that we are all going to settle into a new world where china russia the united states are not necessarily equal powers but shared powers across the globe in that context do we need to have as much of an investment in global defense do we need to continue to pour dollars into building up arsenals and military bases and troops and stations and positions all around the world perhaps not perhaps the world gets divided peacefully and we open up global trade relationships and everyone benefits economically from the advances in technology and improvements in productivity and the world order is peaceful but multipolar maybe that's the new era that we're entering and in that context you don't need as much of a defense and separately to chamov's point there's different technology that's now in play we've seen it in the ukraine russia context that a ten thousand dollar drone can destroy a ten million dollar piece of equipment and china now has drone factories that can output millions of drones each month so if china develops this new type of arsenal with millions of autonomous flying systems that can go and attack troops and attack expensive pieces of equipment do we really need aircraft carriers do we really need tanks and i think that's the whole hegseth led um trump led conversation that's underway in defense right now number one multi-polar number two therefore we don't need as much defense spending number three maybe the defense spending that we do do should account for the new technology on in play in the battlefield and that really changes the character of how the defense department is structured and how funding is structured so that's really i think the way to look at it versus hey let's just cut defense spending for cutting sake um and that might be what's going on right now

SPEAKER_02: a holistic view of it patrick any thoughts on uh what we're seeing in defense tech and uh saving money

SPEAKER_41: through doge well obviously what um what you know andurl and others are doing is uh is pretty amazing um but you know we're we're obviously not defense experts uh but sort of just bring the credit card merchant uh perspective uh to bear here uh you know we naturally just go and look at the the time series um and the sort of the data around us and i guess i'm struck by and again maybe i'm getting some the details wrong here um this is outside of our zone but as far as i can tell the cuts proposed over the next couple years for the defense department are of approximately the same magnitude as the reduction in the defense budget that occurred between 2010 and today and so it's not like this is some unprecedented transformation in dod budget we we've done this and then secondly you know as far as i can tell one of the most ecumenical uniformly shared bipartisan issues in washington is the

SPEAKER_78: inefficiency and the profligacy of defense procurement you james fallow is writing a book

SPEAKER_41: about this in the late 80s you had you know augustine's laws another whole book about this just everyone seems to you know uh fervently believe um that defense procurement is monstrously inefficient now you

SPEAKER_78: you know it's possible to make budgetary changes without fixing that but obviously the prospect of

SPEAKER_225: meaningful improvement there uh seems uh seems like would be you know really beneficial and if i

SPEAKER_63: can just give a quick book recommendation you know this book boyd by robert quorum by john boyd the air

SPEAKER_12: force colonel who you know was part of the reformist uh movement i feel like everyone in silicon valley has that book on their shelf and no one's actually read it but it is a exactly uh it is kind of

SPEAKER_161: referencing sprinkling some ooda loops into your remarks uh always helps exactly yeah yeah and

SPEAKER_15: sound smart but uh that is a great book and it's a book about air force procurement essentially where he had his you know basically the story was that the air force generals of the time wanted planes that were bad and he had a theory about better fighter jets and he had his fingerprints all over the f-16 and the a-10 and the f-15 and uh various aircraft and it was a real battle to get the air force to produce better aircraft and they really you know the generals really wanted these bad aircraft that

SPEAKER_12: they had planned and so that's a fun read at this moment in time when it feels like we have this similar transition from man tell us the name of the book again i know there's many books about it's called boyd by robert quorum okay and it's a it's a really engaging read it's also just very well written it's this kind of narrative non-fiction style yeah yeah this there it is okay everybody another book

SPEAKER_02: selection from the all-in book club brought to you by stripe uh use the code all in to get a year free of the stripe press books absolutely oh you do actually have a series of cool books yeah we'll uh we'll plug those towards the end uh all right tramatha you uh added a crypto update a crypto corner is back we had an exciting week of innovation in the crypto space last week argentine president mille who is a hero to a lot of people in uh on the right or for government efficiency promoted a meme coin it was called libra dollar sign libra and uh he originally tweeted this private project will be dedicated to encouraging the growth of the argentine economy with a link to libra for his citizens to

SPEAKER_00: go buy it and buy it they did but he deleted that tweet when this whole thing came apart and said i was

SPEAKER_02: not aware of the details of the project and after having become aware of it i decided to not continue spreading it the market cap ripped 4 billion it crashed 95 as these meme coins always do 74 000

SPEAKER_00: traders lost almost 300 million 24 wallets had losses over a million and malay has been sued 100 plus times already and this just happened last week he's being investigated by his own government now and uh there is an impeachment uh attempt underway by the opposition malay's team told cnn that his endorsement of the coin was a mistake really oh wow going out on a limb there according to insiders malay never actually owned any libra and was not associated with the coin i think family members maybe

SPEAKER_229: put him up to it the details of why he brought it remain a little bit unclear there's a lot of

Chamath Palihapitiya: speculation to math your thoughts it's kind of crazy i mean he was on such a positive upswing of momentum

SPEAKER_90: it doesn't make much sense why he got embroiled in all of this the the problem with this though is i think that the cover-up is always worse than the crime itself so the first message was you know very clinton-esque like i did not have sexual relations with that woman he was like i did not endorse it i just

SPEAKER_18: shared it was his justification for how he how he um could rationalize what he did the kid that's

SPEAKER_62: behind this thing hayden davis i think is his name he was on coffee zilla was an incredible one hour did

SPEAKER_24: you see that the coffee zilla well i saw i saw some of the clips on x and it was pretty brazen because

SPEAKER_22: he he essentially said that he had javier malay in his pocket and then there were text messages that used some pretty colorful language to basically say the same thing then on top of that there were some text messages that seemed to implicate malays sister as having got some of the money from all of this i don't know the whole thing just makes absolutely no sense that he was

Chamath Palihapitiya: doing so much good and now he's going to go through this whole cycle of trying to wash his hands of this whole thing it's a complete waste of time and effort i don't know why he did this and there

SPEAKER_00: was another like interesting little tidbit uh friedberg uh friend of the pod david portnoy

SPEAKER_02: supposedly he's been getting in on this and he's a gambler and he loves gambling and he looks at his gambling obviously he had put reportedly millions of dollars into this and this guy we're talking about gave him his money back this guy also has something like a hundred million dollars sitting in a bank

SPEAKER_243: account anywhere what's your take on all these meme coins rebirth i don't like them i don't think

SPEAKER_130: that they're like good i don't think they're productive all right i think that a bunch of people are going to put money in and lose money and a few people are going to make a lot of money and you know but at the end of the day it's no different than the people that sell trading cards or the people that create and sell collectibles and get paid for them and this is just effectively a digital collectibles business unfortunately i think it's like amplified by like a thousand x because collectibles businesses have friction and they're manual and you got to ship them and this creates a bit more of a digital frenzy where you see the social feedback loop happen really quickly in real time and that drives these things to a high value which means people have the ability to lose a lot more than they otherwise would but look i mean these are not helping the financial system get rebuilt as we talked about earlier they're not creating productive value they're entertainment mechanisms just like any other kind of gambling system might be and you know people can choose to do that if they want but personally i'm not into it i just think it's stupid but whatever

SPEAKER_02: patrick do you think these are like collectibles or do you think they are perceived by the people buying them more like securities and more like bitcoin they do uh to steelman the other side of the argument uh they do trade with a ticker symbol they are traded uh on major platforms like coinbase and robinhood and people share charts about them and so where do you stand on it you're in the finance

SPEAKER_129: business meme coins good mean coins bad i'm facing with dave i mean i well they seem to me to be

SPEAKER_41: maybe analogous to to gambling um which you know i don't know that we want to ban gambling uh like if you're able to do it responsibly and you understand what you're getting into and so forth like i guess that's fine but as you say judging by the tweets that i see there are also a lot of ticker symbols and charts and prognostications about future price trajectories and so forth that lead me to think that people are placing somewhat more weight on the asset and security value of these uh as compared

SPEAKER_77: to the i don't know some numinous intrinsic uh aesthetic value so yeah john john maybe two things

SPEAKER_00: could be true here people are gambling and they are being presented as financial instruments and they're trying to trick the suckers at the table the suckers in this case being the people who voted for malay to

SPEAKER_02: chamat's point this is the unbelievable cell phone of the of the decade yeah look i don't like meme

SPEAKER_12: coins i think they're bad and i think they're part of like patrick said a broader suede of things that we need to figure out societally where the legalization of sports betting and combined with highly targeted advertising i don't know if you guys have seen the stats on you know whales in sports betting losing very large amounts of money and it's just these heartbreaking tales and there's a very large number of them of people kind of losing much more than they expected and i don't know we have to to reckon

SPEAKER_15: with these societal questions i don't think there's super easy answers they come along from time to time i only learned recently that um state lotteries are relatively recent phenomenon like i think it was

SPEAKER_12: one state started doing it in the 1970s and then a bunch of the other states followed suit but it's kind of odd when you step back that like i've passed a billboard on 101 for power you know the

SPEAKER_15: state of california trying to you know get me to buy a lottery negative ev bet yeah just like but that's

SPEAKER_262: become very normalized and so i think it's a bucket of hard questions here around you know beam coins

SPEAKER_12: sports gambling whatever i don't know what you do but there's a lot of meme coins are not the only

SPEAKER_266: place you find these very heartbreaking stories this is the this is the first time where they've

SPEAKER_22: actually talked about or at least where i saw the details of how this stuff happens because he laid it out and there's these people called snipers that go and like pump up the bids right as soon as the coin gets launched and then they're able to feed so there's like this entire mechanism it's also shady

SPEAKER_78: i was going to say some there where i feel like the specific thing within beam coins it's probably most pernicious is like the rugging dynamic and if you could have meme coins to a girl but without the without the pump and rug if it was like i don't know just some mimetic tracker of some sentiment or something like maybe that'd be okay but the the like the particular way in which they seem to be

SPEAKER_271: you know employed is like yeah some some sort of discontinuous run up and then well the rug what do you

SPEAKER_274: think jacob i agree with you chema malay had the greatest pr run of all time i think i mean he

SPEAKER_00: became an inspiration to all of us here in america who were concerned about the deficit and out of

SPEAKER_02: control spending and ridiculous departments we heard jamie diamond talking about ridiculous committees and all this nonsense i don't know if you guys remember but remember he was like minister of culture afuera and minister of gender afuera this was the precursor to of course doge where now we're like usa deleted department of education deleted you know defense department minus eight percent and you know what i really find terrible about this is that what it means for leadership what malay did was he rug pulled the people who put him in office the people who voted for malay are the ones who got hurt here and when you think about leadership at its core it really is about putting the needs of your constituents ahead of your own interest the needs of your investors in the case of you know if you were running stripe right you got to think about all these shareholders leadership you know at its core is

SPEAKER_00: i think setting the example right you set the stare the standard the moral the ethical the vibes the culture you set that standard he had set such a great standard that we all loved and you know the appearance of impropriety is impropriety in my mind that's the leadership standard that should be here so even being near this your sister launching it your brother launching whatever it is he then went on to taunt this is where i've really you know like people make mistakes but and this is a stupid one to make but the taunting of his own followers you know i'm out on malay right now this is what he said the reality is if you go to the casino and lose money i mean what is the claim if you knew that it had these characteristics this is another failure of leadership leaders own their mistakes they don't attack the victims you take ownership of it and the way you should judge people i think

SPEAKER_02: is what they do when they're given a lot of power and what they do when they make mistakes

SPEAKER_137: mille is a failure on all of those fronts it's absolutely abhorrent that's it thanks for coming

SPEAKER_276: to my ted talk no i'm just i'm on fire about it i just think it's like really terrible do you need help getting off your moral grandstand now i do actually i'm sorry i actually care about morals

SPEAKER_194: ethics and leadership i think that there's a standard set by those people that's what i that's

SPEAKER_173: what i think about when i think about you yes of course thank you uh all right with friends like

SPEAKER_60: these call some brothers can you imagine imagine please say okay i'm sorry can you please say

SPEAKER_283: the name right now i'm pronouncing the irish okay we we speed things up a little bit we put them together it's a little bit different you wouldn't know this from being from sri lanka a great country

SPEAKER_285: you guys wouldn't know why anyone watches this show would you oh yeah i don't know somebody just jumped into this right now everybody says you had no context for this

SPEAKER_23: it's why do you make every show a train wreck and we have to get it out of the the banter is why

SPEAKER_15: why people come people listen you know so many tv shows are about it's nice to have friends i mean you look at friends or how i met your mother my wife and i are re-watching the west wing right now and it's basically a show about you know yeah but it's just like say more john buddies and loyal to each other and everything and i think the underlying idea behind lots of tv shows is it's nice to have friends and i think that's the the success the all-in one swing by the way is an incredible

SPEAKER_291: is an incredible which season are you on it's an incredible show we're up to season four now god i

SPEAKER_113: gotta get five or seven it's i've never got any on the west but of course sorkin left after season four season so many people said the whole thing about the great debate that america needs to

SPEAKER_130: have i think it's still like the missing aspect of modern politics is explain the great debate yeah well the great debate is like let's talk about the topic that's at hand and talk about it on the merits of what's right for their country as opposed to everything being about attacking because the other side brought the idea forward and now we have to attack the other side and frame the idea as being beneficial to them and hurtful to us nothing actually gets resolved because we don't end up having objectivity around these conversations around some of the major issues that the country faces many of which by the way both sides have valid points of view and if we can kind of have the great debate if we can have these conversations like doge right like abortion like you know the rights of states like spending like there are all these things that we should be talking about rather than use that moment as a way to attack the other side politically so i can make sure i've got points and kudos leading into the next election cycle it's just awful anyway i missed that about the west wing it feels like a purist like just a beautiful like way of thinking i wonder i wonder what it would be like

SPEAKER_22: to watch the west wing and then house of cards back to back that's something i should no but it's like really a juxtaposition those two different shows but they've isn't the west wing kind of the

SPEAKER_306: opposite of what you just said you want the all-in to represent because i see i see the west wing as

SPEAKER_78: being sort of fully immersed in and representing you know one sort of particular worldview there was uh

SPEAKER_41: you know there was in some sense we look back on the 90s of the clinton years or something as you know this period of great harmony in the country and you know that harmony might have been great and the economy was doing well and you know all the things um but it wasn't exactly a period i mean whatever i wasn't here in the 90s but you know from afar it did not feel to me when i was eight or whatever as a period of tremendous ideological uh debate and fervor and schisms

SPEAKER_308: and all the rest during the 90s during the clinton era you're saying yeah yeah and i think i mean maybe

SPEAKER_271: i'm wrong but i think of the west wing as you know a kind of recapitulation of the clinton

SPEAKER_130: maybe they were i mean maybe they were the compromising party because i mean tell me another modern democrat president that's had any point of view on balancing the budget and creating a surplus which he was essentially was aligned with the reagan point of view at the time and he kind of you know again as jacal said he was a centrist and he brought brought the parties closer together rather

SPEAKER_22: than farther apart with how they i agree i agree with patrick i see the the thing that makes the west wing a great show is that it's about the insider nature of the white house and the west wing and

SPEAKER_18: where you see these characters like toby who would never be a star in any other show under any other circumstance on any network ever and instead he's one of these central

SPEAKER_24: quasi good quasi nefarious bully kind of you know he was like a the precursor to the rahm emanuel archetype in the obama white house i think i also find it funny where you know the way

SPEAKER_12: uh dominic cummings has talked about just his experience of life in government was that it's so

SPEAKER_15: distracting trying to get anything done because you know you have some plan you get up in the morning and you're going to go do something that matters for the country and then you're just instantly by 8am you know sideswiped by some kind of silly controversy of the day that's basically many of the episodes of the west wing where they like have some actual important thing that they want to get done and then they just get waylaid by a silly controversy yeah seems to me like you're also the

SPEAKER_00: product of the technological innovation that occurred during your presidency and during your term

SPEAKER_02: and if you think about clinton he got to ride the internet and this massive economic boom and you look at you know reagan the pc boom i mean sometimes the timing really matters i think

SPEAKER_41: though i think you know and again i'm not any grand expert on the on the clinton years but i think you know it is interesting where you know one of the first acts of the clinton presidency was the was the deficit reduction act um uh you know dave to your point you know when's the last time that uh you know a democratic president who really really cared about the deficit session i think federal

SPEAKER_78: spending fell by five points of gdp over the course of the of the clinton presidency which is really

SPEAKER_41: not a small amount you know so obviously there were some kind of structural tailwinds from you know technology and the internet and all the way so yeah a bunch of that was defense but but like

SPEAKER_145: nonetheless so okay he did it and the last two administrations and you look at california there

SPEAKER_00: were massive windows of surplus and there were massive windows of a surging stock market over the

SPEAKER_02: last eight years and we plundered and we wasted them by adding 16 trillion to the debt during a good time like what's gonna happen during a bad time just absolutely brutal let's move on where do we want to go here we got grok 3 we got the china private sector we got a victory lap for freeburg

SPEAKER_327: because i want to ask you guys questions about arc institute and the evo model we should do that

SPEAKER_62: all right let's do the arc institute friedberg why don't you ask the question runs the arc institute

SPEAKER_329: right okay yes and we're the co-founders and then there are two scientists and you guys are funders

SPEAKER_333: of it or yeah maybe you guys give us the answer they put a lot of money into this yeah yeah so uh

SPEAKER_41: the institute is a non-profit it does basic biology research it's in palo alto next to stanford it's about 230 people today and uh yeah john and i are among the funders of us but there's uh there's a bunch of other very generous donors can you explain the curiosity driven research that's on the website yeah there's got two things behind it so the first is scientists the vast majority of biology scientists today receive nih grants during basic research and the nih grants are one just hard to get and annoying to get you know scientists spend 40 of the time working on grant overhead and so forth but worse like even more perniciously the grants are very restrictive in terms of the kind of science they can do and so we ran a survey of scientists back a couple years ago of top scientists and four out of five like 79 of them told us that if they could just spend money however they wanted if they weren't kind of limited by you know what they're prescribed by these nih grants four out of five told us they would change the research agenda a lot and and so i think the analogy here is imagine if there was only one vc firm and it was run by the government how would that change the firm had strong opinions on what kind of companies people should build exactly you know literally the the the grant panels at the nih are and they're consensus-based like explicitly they've kind of consensus-based scoring mechanisms and they you know penalize you if you're doing work outside of your field and so forth so hey we we kind of we do go to all this work to train these amazing scientists and then we sort of don't let them pursue their best ideas that's kind of problem one and arc the arc investigators you know they're fun to do whatever they want curiosity driven research and then the second thing behind arc is uh is this idea that you can kind of divide diseases into three categories you know the infectious diseases and we you know broadly speaking know how to you know generate cures for and treatments for infectious diseases we've monogenic diseases like one genetic mutation or something and we don't know how to cure those in most cases but we can at least screen for them and so on and then we've you know what the biologists call complex diseases where there's some kind of gene environment interaction that's most cancers most autoimmune diseases most neurodegenerative diseases and so forth alzheimer's things like that exactly and we've never cured a complex disease and you know many of these diseases are very tragic precisely because you know we not only have we not cured them we don't even have treatments as you know as john says uh in the case of alzheimer's for example and so you know the question is can we do something about this and you know what would a research agenda and program that you know can that can help you know shine some light on these complex diseases look like and our hypothesis now we'll see we'll see uh how much it's borne out of our hypothesis is that we've gotten a couple of new technologies over the last couple of years single cell sequencing we can sequence the the dna or the rna just like in one cell uh we've you know fancy new functional genomics and crispr technologies uh so you can make these you know fine edits and perturbations again even just in a single cell and then obviously you have transformers and ai and ml and all this stuff and this is kind of a new read think write loop in biology that just didn't exist a decade ago and again the question is uh is this powerful enough now to you know solve some of these previously intractable diseases and so yesterday arc released this new uh foundation model for biology it's the largest biology ml model ever it's it's uh it's actually i think the largest open source ai model ever this is evo 2 you're

SPEAKER_78: talking about evo the number two yeah and so it's not just open weights like uh like you know the

SPEAKER_41: deep seek model or llama or something it's actually it's open source since the training code is uh is public and you know you can people can read the blog post of the paper whatever the thing i find amazing at evo and that just really surprised me is so it's trained on nine trillion base pair

SPEAKER_78: gene tokens so you know uh chat gbt llms are normally trained on on you know the on human language this is a language model but it's trained on on dna the language of life

SPEAKER_41: and there's only one human genome in the training set it's mostly other species and even though it's only

SPEAKER_78: seen one human genome it's state of the art at predicting the pathogenicity of human genome mutations and so you know a famous mutation is the brachia mutation for breast cancer like it's state of the art at predicting the the pathogenicity the harmfulness of uh of brachia mutations again it only despite never having seen one in humans it's it's only seen one human genome and that human you know did not have uh these pathogenic mutations and so it's kind of learning something deep across the tree of life and i know i find that pretty cool and sorry is there a phenotypic

SPEAKER_72: data set that's used in training so i think like you know no when you're typically right and so when

SPEAKER_130: you're building models in typical like genotype by phenotype models you're trying to look at the phenotype the physical characteristics of yes the organism what can it do what does it look like what are the features and then you look at the genome and so that tells you hey these are the specific genes or alterations or mutations that drove this particular phenotype is kind of what the model tries to learn over time with the objective being hey can i ask it to define a genotype or a genome based on a phenotype based on a physical set of characteristics i'm looking for vice versa maybe you can just help us understand what what is it trained on and how you know how did that kind of you know prediction in bracha you know how is that possible great question so it's

SPEAKER_78: totally unsupervised that is to say you know you're just showing us lots of genomes and any kind of

SPEAKER_41: latent structure that it learns is just based on trying to figure out how to kind of organize that knowledge but we're not showing it any labeled data or phenotypic you know kind of outcome data or you know what have you and so then you're able to you can give it a genetic sequence and ask relative to its understanding of the genetic universe how likely is this particular sequence and so then you can do things like uh like you know predict anomalousness or pathogenicity or whatever right you can also then kind of using the embeddings of the upper layers now we don't need to get too technical here but like you can train another model on top of the model um and uh and even if you showed maybe only a couple of examples it learns very quickly okay kind of here's you know here's how the weights of evo2 correspond to this particular task and those uh those sort of models trained on top

SPEAKER_182: uh turned out to be you know really accurate you guys open source the base model or you open source

SPEAKER_78: the fine-tuned or both we open source the base model but there's no kind of proprietary reason that we didn't open source the fine-tunes like it's really easy to produce them and yeah if anyone

SPEAKER_276: wanted one of them we'd happily share it where does it stand in the spectrum of different tools that

SPEAKER_90: folks would use to solve these life sciences problems there's cell models that are being developed by some then there's these protein models where does this fit this kind of landscape of of um of

SPEAKER_78: foundation models in biology it's obviously very new so it's uh um it's a bit of an open question

SPEAKER_41: sort of how exactly people are going to find you know ways to to use it and applications for it part of i think is cool is that proteins and rna and i mean phenotypic expression and everything you know all these things sit on top of the dna like in some sense the dna encodes everything because you know the the whole organism comes from the dna and so i guess the question would be and you know we don't

SPEAKER_78: really know yet is dna all you need and with evo one we saw some you know encouraging uh suggestions

SPEAKER_41: that for example you can build really good protein structure prediction models out of a dna foundation model even if you don't train on a lot of you know protein structure uh data so but i i'd say just it's a really exciting time and it's kind of an open question and i don't know if you analogize evo 2 to i don't know whether it's gb2 or 3 or something but you know i think we're going to see a similar cambrian explosion of of applications over the next couple of years the thing we're really excited about at arc is is is training yeah cell state models and trying to better understand you know how cells you know what causes them to change states and so we're thinking a lot about that but but you know the reason that the weights are on hugging face and hopefully we'll be surprised and and patrick do

SPEAKER_22: you just expect that over time as stripe continues to grow you can just take the ex some of your own excess capital and other people will do the same and keep funding arc and then if there's something that arc creates or innovates on if it can generate some amount of money it would just kind of flow back is it meant to be self-sustaining or is it always just going to be via patronage from

SPEAKER_41: successful folks that just want to keep it going john and i are you know we are ourselves very committed to us and um and we're kind of underwriting us in that regard but well one we're just lucky where there's a growing donor pool of other people supporting us i think it's just better for an institution if it's not kind of beholden to the whims of you know one donor one group of donors or something so i think that's just a much healthier uh structure for us i think there's also a large group of people for just becoming interested in science and realizing i mean you know jason was on his uh his moral pulpit my pulpit is that you know all is not well in basic research uh in the us today and again the way to see this it's just talk to the scientists themselves and they tell you and how kind of inhibited they are and you know the the the kind of problems caused by the strictures and structures uh around them and we don't see arc as you know the answer hopefully it can be sort of one point in the space but then you know there's other people doing cool stuff you know brian armstrong of course started a company in the longevity space and yuri milliner and others started altos and you know this is the people this uh the chan zuckerberg uh institute and so you know people are trying uh different things but no our arc is um you know we're happy to support it and then if you know it's possible that our over the long term becomes self-sustaining but you know that's well that

SPEAKER_118: was my next question is yeah it takes a while to get things into the clinic so you know we're not

SPEAKER_00: holding out for that tomorrow well i you know when they uh they have this technology transfer department at every major university where when scientists get grants and they work on some innovation

SPEAKER_02: it gets monetized and so what happens here who owns the innovations how do you license them because it would be amazing if it just wasn't based on i believe you guys have put over a billion

SPEAKER_214: dollars into this that was my understanding is that true is it's like you guys are over a billion dollars into this effort not quite the numbers yeah not quite the numbers are public so arc spends

SPEAKER_41: around uh 100 million a year oh okay and it started about uh three years ago okay so so hundreds of

SPEAKER_223: millions of dollars this is a really significant thing yeah and again i want to emphasize there are

SPEAKER_41: other donors um so it's not just us but i mean it's a non-profit there there have been spin outs and there will continue to be and so if one of those you know really if one of those becomes moderna or you know the next ozempic or something then you know that could be really good for arc and arc might have an endowment and be able to kind of self-sustain and so forth uh we're we're there's no prospect for us to make money on it in the sense that you know it's a non-profit yeah well actually john yeah just

SPEAKER_02: one thing there i was talking to a friend of mine you could if this thing actually hits you could flip

SPEAKER_71: this non-profit oh stop and i got a guy you could talk to oh anyway john go ahead oh strays on the whole like modeling world we talk a lot about the idea that you can kind of use a computer state the

SPEAKER_130: phenotype or the physical characteristics you want in a biological organism and have the software resolve the whole genome all the dna needed to make that physical organism real and it can do it from its prediction ability on what genes what combinations but we're a couple orders away from that right i mean i think like ultimately we always talk about hey we want to be able to define or have the software define the plant that can grow on the surface of mars it knows the soil type of mars it knows the air you know it knows that it's carbon dioxide based it's 10 of the earth's atmosphere it this is what the days the daylight structure looks like it needs to be wind tolerant and then the software predicts an organism that might be able to do that you know and obviously there's a lot of this predictive work going on in proteins then the higher order is cells so single cell organisms microbial organisms and then ultimately multicellular organisms so plants and then finally animals where you could basically create organisms from scratch using software because we have all the other tools to biologically put these pieces together today but this is a great kind of i view it as a pyramid there's a ton of phenotypic data that still needs to be fed in ultimately to kind of have us

SPEAKER_133: all understand protein protein models and and a lot more to it but it's a great i think that i think that's

SPEAKER_78: right uh like you can uh there's there's a certain amount you probably derive sort of uh you know from

SPEAKER_41: first principles just by looking at genomes but i think the really powerful models are going to need to do exactly what you say and to feed in a lot of ancillary phenotypic and and just kind of other data how they fare in different environments and the sequencing data got ahead of the phenotyping

SPEAKER_130: data because there's so much sequencing data that's come in so you can do a beautiful job predicting like

SPEAKER_41: correctness in a genome but and this and the sequencing data is really nicely digital whereas you know the phenotypic stuff it's like well what exactly is the data yeah totally david sorry

SPEAKER_161: while we're in the science corner i have a question for you dave which are strawberries you might know the answer to this a bunch of tree species around the world are under attack so in ireland we have this problem of the ash dieback ash is kind of ireland's national tree they use it to make hurlies which is you know the for the national sport and uh since mid-2010s you know especially as the live

SPEAKER_383: plant trade has ramped up we need to have a a hurl for uh for for jason for jason obviously right here

SPEAKER_66: on the shelf american chestnut here yeah no exactly i was going to reference the american chestnut as well in the u.s but it feels like we have this real problem and it's so sad where so many beautiful

SPEAKER_119: trees are under attack from the bark the bark beetle in in california and you know the the various

SPEAKER_389: conifers that we're losing so we got us on the black pod disease the black pod fungus and cacao and coffee is being destroyed tr4 is destroying banana right now doom let's go no no but like it's a

SPEAKER_391: real like it is a real this is a real issue yeah down into the science corner here so this is um yeah

SPEAKER_130: i mean this is exactly what we aim to address at ohalo so in some cases you can actually silence a gene that's a suppressor of immune function of the organism which can actually improve disease

SPEAKER_75: resistance but how do you do delivery of that like this airborne sprays or what's the how do you

SPEAKER_130: how do you treat the tree yep so ultimately if you're going to use a genomic method you would transform the genome so you would edit the genome and you would regenerate a plant or regenerate a

SPEAKER_394: tree and then propagate that tree okay but then like we have to replant all the trees to replant

SPEAKER_395: the trees we have to replant the trees and ultimately custom projects can we do a little thing on ash in ireland absolutely that is some of the work we do so we announced a few weeks ago

SPEAKER_130: a partnership with the university florida to use our methods to basically introduce disease resistance for major fungal pathogen that's destroying the florida strawberry crop and so that's what we call a trait program at ohalo where we can identify a specific genomic trait that we can go and introduce into that plant but then you're right you do have to grow all the plants back and then put them back

SPEAKER_12: in the ground that's the second best to pure extinction but um i have in in ireland i ended up owning this kind of country house and uh virgin woodlands where you know woodlands that ireland was

SPEAKER_15: used to be fully forested and then was denuded with the arrival of agriculture and there's uh some kind of ancient woodlands on us that are from the original when ireland was fully kind of covered in

SPEAKER_16: trees and i found the die-off of species very sad and so we got to get yeah but no i'm not like i'm

SPEAKER_130: i'm very optimistic like we know how to address these solutions we know how to regenerate the trees we can we can do this quickly we can resolve these problems but you are right i think you should

SPEAKER_306: be selling a skew askew to the people in tahoe like you know the tahoe basin has been so

SPEAKER_41: worse than decimation as in decimation is only one in ten which is like you know half the uh half the trees in tahoe have been hit by a bark beetle so those are very interesting ones because uh

SPEAKER_130: insects you can actually build very specific defense mechanisms against uh insects but we generally have to improve genetic diversity and in doing so you know there's a natural resistance because the evolutionary like like the reason we have a tr4 problem in banana all the world's banana that we grow commercially comes from one original banana clone called dwarf cavendish and they took that one plant they cut clippings of it put it in the ground for another plant cut clippings of that and they kept multiplying it so all the bananas we eat and all the bananas that are planted across tens of millions of acres worldwide come from one original clone and because of that this fungus has been exceptionally capable of evolving itself to better eat that banana plant and so 60 cents of every dollar we spend on bananas today goes towards fungicide we're spraying these banana trees once or multiple times a week to kill this fungus we're consuming that it's super expensive and if we had genetic diversity if we had better genetics in the banana programs around the world we'd be able to radically improve what

SPEAKER_250: the administration says you think we need more diversity are you in favor of dei friedberg they

SPEAKER_02: cornered you friedberg i got you got to make one promise to me here it comes you're not going to start working on raptors i don't want to see any of these raptors running around uh san francisco okay shamatha your thoughts here on the science corner here it's been a really enthralling one the raptors

SPEAKER_22: are coming for you i find it incredibly inspiring that there's just so much movement in these foundational models it's incredible like every day just seems like there's something new the biggest problem that i think that the commercial community is going to deal with is how to actually take advantage of it because your kind of head spins because you don't exactly know where to start the biological models are are different in that i think it's a much smaller population of people that

Chamath Palihapitiya: will use it and i think they do have to figure out how to take these models and and complement the existing pipeline they have the pipeline they have right now i think is pretty brittle i think we all

SPEAKER_22: know that in life sciences my wife struggles with this a lot is how to complement a very traditional

Chamath Palihapitiya: pipeline with this kind of stuff so i see it firsthand and how she tries to allocate capital towards these problems on the other side i just think these foundational models are really incredible and i

SPEAKER_22: think that i was completely wrong on a couple of my earlier thoughts one of thought that i had for a

Chamath Palihapitiya: long time was it just seemed like all these base models were asymptoting and so i was not convinced

SPEAKER_22: where all this capex would go in a productive way like why are you buying all these nvidia gpus and then

SPEAKER_260: i think if you looked at colossus the elon's colossus x ai built the largest data center over a hundred thousand gpus going to two hundred thousand in a hundred and twenty two days i mean basically what he

SPEAKER_22: proved was that there are still valuable gains in pre-training and so the larger the cluster the more value that there is now he also benefits i guess from the x feed but that was really interesting so now i'm like a little bullish on nvidia i'm like oh my god if this is true then all this capex may be justified you could be buying a lot of stuff then look i actually also just to maybe riff on this grog three thing for one second i had three takeaways my first takeaway was i was sneakily surprised on the pre-training upside on having a larger cluster so i think that that's very pro nvidia actually and and it's actually also just really good in general for foundational model makers so i think like that's like a really positive thing the second thing is i don't know if you watched the live stream but did you guys hear some of the stuff that these guys had to pull to pull this thing off one of the most incredible so the way that elon narrated it was we first had a physical problem so we just had to search all around the country for one single location where we could actually put a hundred thousand gpus and they found it which was an old electrolux factory in memphis okay that's kind of interesting he only had like 15 megawatts and he had to get a quarter gigawatt and so he had to basically buy every useful generator that was available but then they had to liquid cool it and so they bought one-third of all the portable liquid cooling capacity in america and located it on prem but then they figured out that there was a power problem so then they took all these tesla power packs and then had to do power smoothing which had them had to rewrite all of the power pack firmware in all of this you know how we talked about deep seek being this moment where we had lost lost sight in america of capital being the source of innovation he proves actually a more generalized

Chamath Palihapitiya: rule that i took away from this which is you always have to have a constraint so meaning let's say there is like infinite capital in his case and infinite talent because he can basically recruit anybody he wants what did he do instead he created this artificial constraint of time and so he was just able to

SPEAKER_22: say you're going to get this done in a moment and nick i saw the third graph that the guys at artificial analysis sent to me i just want to put it up here because it shows you guys the quality of grok 3 relative to the amount of time that they've spent on this problem is to me what's staggering so if you just sort of project the rate of change of this and this is without judging open ai or anthropic or anything else those guys have been doing it for years these guys have been doing it for a year and they did all of this macgyver engineering and were able to pull this off so that's my second takeaway is that innovation needs a constraint sometimes it's capital sometimes it's talent and sometimes it's time and so if you can basically be just completely rigid on one of those dimensions you can get a great team to create something so that was an interesting takeaway and then the third is i think what this also speaks to is the notion of like a curetsu right which is like the japanese word for like companies that work together while

SPEAKER_29: still remaining independent conglomerates yeah it's more interlinked it's interlinked you know koreans

SPEAKER_22: have tables right japanese japanese have curetsus but this is the manifestation of an american curetsu which is elon is able to get engineers from tesla he's not just buying the power packs he had them re-engineer the actual firmware in real time on site and so there's this this positive ability to just like organize effort and human capital like look could we all stand up a data center and go and buy 500 million dollars of power packs from panasonic absolutely it would take a few months 18 and then when it looked like we need to rewrite the firmware would take another 18 months to your point jason so it's really incredible what what these guys are able to do together

SPEAKER_15: those were right it was really really inspiring chamath a book i think you might find really fun is uh it's called henry kaiser builder in the american west but kaiser is kind of underappreciated these days he was the elon of his time he started as a road builder of all things he won the contract to build the hoover dam he built the hoover dam he started a shipyard during world war ii uh yeah exactly this one cars he he decided to make cars he decided to make airplanes stations the famous four-day liberty ship uh remember the propaganda win during world war ii of you know they were able to lay down that was at the kaiser shipyards kaiser permanente spun out of them as

SPEAKER_78: part of their um i was literally just trying to saying that pulling up my notes from the book um and uh just he was just a complete phenom and he just kept finding new industries it's like oh

SPEAKER_15: building cars how hard can it be oh building airplanes how hard can it be yeah i mean that is

SPEAKER_02: the nature of entrepreneurship the nature of entrepreneurship is doing something delusional

SPEAKER_436: and then just letting you know but most entrepreneurs just do one delusional thing

SPEAKER_66: once again like again elon and henry kaiser back in the day it's in the world of atoms very hard

SPEAKER_306: things short timelines and san francisco now kind of at least in the physical domain stands for a kind

SPEAKER_78: of stasis you know it takes you 10 years to you know build anything um but when he had the toilet

SPEAKER_161: the shipbuilding yards here he went from zero to a hundred thousand people in richmond in one year he basically built the city of richmond california how do you how do you but guys okay let's just

SPEAKER_23: double how how do you think these guys pull this off personal sacrifice massive personal sacrifice

SPEAKER_24: i understand that jason but i'm talking about like tactically pull this off where you have to be on site at some point organizing this team directing this team being able to help isolate these problems fix them it just seems impossible to do it once let alone six i don't understand how they actually

SPEAKER_02: have some insight to this just from knowing elon this a lot of these things compound a lot of what he learned in material science doing spacex and about making uh the engines and then working with metal

SPEAKER_00: you see in his production at tesla and specifically in the cyber truck he has learned so much about factories i don't think there's a person on the planet who knows more about factories now having built a battery factory a space factory an engine factory and a car factory and now building optimus on top of that so these things compound and then a lot of the engineers will float between the companies so there are folks who have worked at spacex who then go do a tour over at tesla etc and a number of

SPEAKER_223: those wound up coming into um i'm just going to read you i'm going to read you a few quotes in this

SPEAKER_78: book i'm just going to see if they remind you of of anyone kaiser's managers challenged convention from

SPEAKER_41: the start as builders they were experts at coordinating workers and materials kaiser was almost contemptuous of traditional methods his partners had long since despaired of getting him to follow customary procedures in preparing his bids for each new job kaiser would try to conceive every possible technique that might justify making a bid low enough to win the job once the construction was underway he was forever trying to come up with ideas that would expedite the work perhaps more than

SPEAKER_407: any other builder he believed that the faster a job gets done the lower the costs can be that's

SPEAKER_223: incredible incredible well and what happened with colossus is they had told elon that it would when

SPEAKER_02: he wanted to use other network operation centers to host colossus you know and he looked there were not available and when he did find quotes from them they told him 18 to 24 months he just determined hey if this there's no reason to even do this if i can't get this done in a you know 100 days or something

SPEAKER_00: why even join the race i'm going to be so far behind and if you look just to wrap this segment up and get on to our final two segments if you look at these two charts about grok it's now uh and you know listen these benchmarks and these arenas and testing there's a lot of controversy around them and people keep leapfrogging each other but they they do give us i think our best shot at looking at progress this is the benchmark here for grok on a bunch of different tests math science and coding and as you can see grok 3 has now eclipsed gemini which is uh google's llm and deep seek from china quad and chat gpt4o and

SPEAKER_447: so to your point it's pretty impressive yeah top of the lmsys uh leaderboard the thing here i think

SPEAKER_00: freeberg i'd like to get your um comment on is if hardware is the constraint does that mean that the person who understands hardware and build outs as chamath was pointing to does that mean that they by default win no but jason hold on this is what's counterintuitive it wasn't

SPEAKER_24: clear because no it was not yes i would guess that the last couple of iterations it seemed like

SPEAKER_22: open ai has moved to what comes after the base model meaning in the allocation of resources in terms of what they were creating and so this is what's so counterintuitive he was like no and so i i don't understand what he knew that everybody else didn't know but that the size of that cluster made no sense and it could only be a result like this where he basically proved that there was still value in pre-training where size actually led to better outcomes that's that's not that i think that

SPEAKER_00: was counterintuitive it's super consequential is my is i mean complete agreement with the chamath and just freeberg to wrap the segment up and put a bow on it we see these llms they've made incredible progress as we just heard from ev2 or evo2 i'm sorry uh grok and we're making these giant gains in space uh you know in work and it's specifically in space dave do you think this will get us any closer

SPEAKER_454: to uranus so sad so sad it didn't even land okay let's do our final don't even don't even acknowledge

SPEAKER_214: don't even acknowledge it do not acknowledge it because we'll just do more of it i tried to get

SPEAKER_02: your mouth to do one he wouldn't do it okay last two segments we're going to talk about staying private longer and when you guys are going to go public and then there's an asteroid coming what do we want to do first boys do you want to talk about this asteroid coming dave is it the end of

SPEAKER_130: the world if it hits us what's going on nasa dropped the probability of it hitting earth to one and a half percent so every day when the sky gets dark they can do a better job seeing this asteroid that everyone's freaking out about so we finally got a good night sky two nights ago the telescopes were able to get a better trajectory reading on it and that allows the models to make estimates on the probability of this asteroid hitting earth in 2032 when it's projected uh to cross our orbit and so right now the probability is estimated at 1.5 percent that it will hit the earth and based on the size of this asteroid there's this range it goes up to 320 feet in diameter as small as 80 feet in diameter which actually can have a pretty big effect on how big of an energy release there would be if it actually uh you know hit the earth so even on the high end if it was call it 300 feet it would be the equivalent of call it a 20 megaton bomb which is not insignificant if it were that big it would hit the earth if it was smaller than that it would probably just detonate me air and create a massive shock wave and and firestorm but the region that it would decimate would be limited uh to probably a couple dozen miles up to a thousand miles of effect and if you look at the total surface area of the earth you know we're talking about 10 to 15 percent of the earth having people that habitat you know enough people to habitat probably gonna land in an ocean right i mean right yeah so it's one and a half percent chance of hitting the earth and then call it a 15 chance

SPEAKER_461: if it hits the earth they're causing loss of life 10 basis points it hits a city yeah and then right

SPEAKER_130: and then it's a function of how big it is if it's actually as small as 80 feet then it's not going to be that significant even if it does get close to inhabited areas so yeah i'm not losing sleep over

SPEAKER_15: over did you come across in your research i feel like this is a real boys are monitoring the situation moment did you come across the tunguska event yeah research on this so that was incredible yeah so uh

SPEAKER_161: i don't you want to talk about it go ahead yeah just um no one knows this in 1908 an asteroid hit the

SPEAKER_15: earth it hit a relatively uninhabited part of russia it was a first off the asteroid did not hit the earth because it got so hot on re-entry there was an air burst and it was a thousand hirashimas in size the explosion yeah they have here the 60 meter asteroid and they have the megatonage somewhere wow it's the yeah largest impact event in recorded history obviously there was you know stuff before recorded history it flattened 80 million trees weirdly basically no one was killed because it was so uninhabited but this is quite comparable to the one that nasa is talking about that's right it's about the same size yep exactly and i think you can take a little bit of reassurance maybe that we have had a similar size asteroids hit before and there is some existence proof that despite the giant explosion you know it doesn't show up in the climactic yeah the tunguska asteroid was it like

SPEAKER_130: 160 200 feet so if if this asteroid is in that range and it hits the earth you have this kind of explosion in the air if it gets above i think 250 roughly is where they think that it doesn't burn up

SPEAKER_344: fully in the air and it actually will strike the earth but yeah that's um there you go this is roughly what we saw happen what we think the size will be if it hits is there a counter measure i don't mean

SPEAKER_154: to get all sci-fi here great question yeah no but is there a counter measure possible and like

SPEAKER_02: if this thing was coming let's say in five years and it was twice the size yeah yeah but relative to

SPEAKER_130: the earth this is like tens of thousands of kilometers an hour right it's it's a it's a very fast moving object it's pretty small right 160 feet so you've now got to figure out the exact trajectory get it perfectly right get a launch off of the earth and intercept this thing at the exact moment that you need to to push it off course or detonate something nearby it to to redirect it so technically very complicated very hard to pull off but this is exactly why we have this planetary defense funding at nasa which is to track these objects and this is another example by the way where i would say ai can play an important role and i'd love patrick and john to a pint on this but i have a thesis that like ai more than anything unlocks deeply complicated projects for humans that would otherwise be kind of infeasible in the pre-ai era i think in the post-ai era we're going to be like oh here's all these projects that we do that are like oh you know we we on a daily basis we mine to the center of the earth and we get cool like rare earth minerals from like 500 miles down and we go to space and colonize the moon and all these crazy things because ai unlocks these large-scale projects that would require millions of people to do things in a coordinated way and ai can be very smart in this way but i think ai could play a role also in these planetary defense initiative concepts jcal in the future where you can actually build a complete project model in software on how you would actually address this problem and then you know go execute it with automation and but yeah there's a planetary defense function at nasa they track these objects and they're funded to do it so we hope that nasa continues to get funding to do this work very important and guys it just came through that nasa just dropped the probability of the impact event to about a one-third of one percent so it's gotten even

SPEAKER_133: smaller which is we can all go to sleep comfortably all right all right now good morning everybody's

SPEAKER_00: been waiting for patrick john you founded the company in 2010 it's uh 15 years later the entire lp industrial complex and venture capitalists everywhere i'm sure some employees are wondering when

SPEAKER_02: will stripe go public and under what circumstances and what's the hold up here why aren't you public

SPEAKER_15: already yeah look um i think people sometimes hold us out to be dogmatic or something on this topic whereas we feel like so many other people out there in the world are dogmatic and we just try to be pragmatic on us you know keith was on the show and he was saying you know he believes companies should go public as quickly as possible i don't know maybe that's the right thing for some companies but uh in at least stripes case that that hasn't been the case i also think the environment has changed quite a bit where it used to be the case that to do any return of capital to shareholders you know or if you needed any kind of large sums of money you needed the public markets that's obviously not true today where uh the you know stable private markets exist but we look and we say is stripe better off at the moment as a private or a public company and you know up to this point we have determined private that could change at some point but it's kind of no dogma from our point the last thing i'll just say is you know i think keith made the argument people generally make the argument that it is critical for discipline to be public and public companies run in a more disciplined fashion and i think that's hogwash like if you need a 25 year old fidelity analyst asking you to double click

SPEAKER_12: on your capex blah blah blah to run the company with discipline something is horribly wrong at the company and you need new management and so that argument has never really resonated with me basically

SPEAKER_18: what you guys are saying is for your intellectual perspective you get a lot more return on the time

SPEAKER_22: you spend talking with the private investors you have and your team and then and customers and customers and it would just be dilutive and you would have your outcomes quite honestly if you had to talk to these other folks who are talking to you and 50 other companies don't really know much of anything maybe very surface level and then may actually distract you and force you to make decisions

SPEAKER_78: you don't want to make we're not even that negative we're not even that negative okay i was

SPEAKER_41: going to say but but it's um there's no spiritual status associated with being public like why be public it is a cheaper source of deeper and more liquid capital and so if you want cheaper and and

SPEAKER_78: more liquid capital then you know by all means go with it but you know it's it's not it's not more

SPEAKER_41: moral and and i think you know again it's it's just helpful to sort of get away from uh from that kind of framing i also think it's noteworthy if you look at financial services in particular and we're kind of a company at the intersection of financial services and technology being private for a long time is is the norm so you know bloomberg is a private company fidelity is a private company

SPEAKER_78: vanguard's private company jane street's private company um citadel securities citadel yeah goldman waited 130 years to go public jp morgan wasted 70 years go public visa wasted visa waited 50 years to go public and you know okay and those are all kind of different times in history so i'm not saying you can draw it right and if you look at them but but well i think it's

SPEAKER_41: a thing of financial services where there's always a tendency uniquely here to be kind of pro-cyclical and i think you need to be kind of particularly careful as a public financial services company to avoid some of those temptations and some of those tendencies and so you know i think that that's a unique dynamic that applies uh in our space and uh and then you know financial services and if you

SPEAKER_18: look if you look at companies like spacex they're able to provide this yearly liquidity which actually

SPEAKER_90: is probably better because it smooths out a lot of the vol and then people can get back to work and

SPEAKER_162: just kind of are you guys are you guys by the way we are profitable yeah yeah and profitable on like a fully loaded gap net income basis not like a community adjusted ebitda stuff shout out adam newman

SPEAKER_15: come on the prod anytime you gotta wear shoes yeah i i do think we think as it comes you know pertains to people joining the business and being compensated you know everyone loves the idea of an ipo pop but if you look at a bunch of the other fintech companies you know square really great company 70 off its 2021 peak paypal 80 off their 2021 peak if you're an employee and you join those companies in 2021 it's not a great feeling and so again i think the um the the lack of vol you know the the good and

SPEAKER_16: the bad is you are not priced every single day by the market but it's not only a bad thing all right

SPEAKER_78: the framework you know if i'm trying to predict our actions like the framework we use is kind of

SPEAKER_41: two things one i think you know what matters is less kind of the returns in a given year and more duration and so the question is you know what enables the best compounding on sort of a 10-year time horizon and you know what's best for shareholders uh as you really take kind of the the longer-term perspective and then just what's best for customers and you know what you know helps you build the best products and you know chamath you kind of said it where you know at least at this juncture with the business growing at this rate we want to spend the marginal hour with uh with some

SPEAKER_15: customer yeah and i think you guys have gotten this sense like this is our life's work you know we're not going anywhere we'll be very happily running stripe in 10 years time in 20 years time and there's so much going on in the space where we spend a bunch of time talking about stable coins talking about ai everything like that and it's hard enough to stay ahead in the world of business you know without all these distractions like you said and so it's just a question of how do you set yourself up to win and do right by anyone in a world the world's pretty competitive i think if you

SPEAKER_24: had to steel man the bill gurley point of view there are very few founders that are probably as

SPEAKER_22: steely-eyed as you guys and so what i think a lot of board members in most other situations that are not stripe deal with is what is a good forcing function to keep these folks on track focused and focused and thinking in a multi-decade kind of way and they found that the public markets

Chamath Palihapitiya: i think do that more than anything else that's probably the most compelling for the folks that would otherwise maybe get distracted but then for guys like you that can frankly just do it it's it's

SPEAKER_122: great all right it's impressive it's really impressive congratulations appreciate you guys

SPEAKER_02: coming on the program come back anytime you were awesome today and listen let's recap what have we learned people got to put some pants on and get back to work constraint makes for great art stripes

SPEAKER_48: going public in 2050 chamath lost five billion not investing uh the culsons read a lot of books but i'm

SPEAKER_506: still kicking live and kicking bro he's still in the arena got a lot of chips still to fire so yes

SPEAKER_154: i was gonna fire fire fire south american president shouldn't have their own meme coins

SPEAKER_02: and life finds a way we are and and you pronounce a call this son obviously as a corderson because you know we're down the road and carry and we go and get some eggs and bakey sometimes okay coming to south by southwest brought to you by the call call us and brothers and stripe a all in is headed to the

SPEAKER_00: south by southwest they're not sponsoring it i'm joking all in is headed to south by southwest on march 13th me and freeberg are going to sit down and do our interviews two besties on the future of many media and building businesses in this new media ecosystem we're going to have a casual party food

SPEAKER_48: drinks the whole thing event is going to be uh pretty intimate couple hundred seats when are you guys

SPEAKER_00: doing this march 13 you opted out me and freeberg want to do it oh it's thursday no can do yes and uh it's by application only with a small 30 registration fee of which stripe will take 19 go to allin.com events to apply i'm not bitter about it and programming note the besties are on a

SPEAKER_02: tear we were on megan kelly last week and next week our bestie friedberg is representing us on

SPEAKER_48: celebrity jeopardy we can't say what happened get the clips ready get the clips get the clips ready

SPEAKER_406: we are going to do a recap of every single question when when do you when do you when is

SPEAKER_514: it air on monday next week i think i don't know wednesday at 9 p.m wednesday at 9 p.m oh perfect before the taping yum yum perfect perfect there he is between anna navarro she's from the view right

SPEAKER_130: well she's pretty angry i've seen clips of her she's i should have gotten some counsel ahead of signing up for celebrity jeopardy on the lack of upside in doing this and you will see why we'll

SPEAKER_72: talk next week oh no oh no that's not good you lost you didn't lose to the view did you look guys

SPEAKER_406: i'm just telling you guys got 160 iq the view put together doesn't have 160 iq let me just tell you

SPEAKER_521: well we'll talk about it afterwards i just don't tell me they got you on pop culture you're pretty

SPEAKER_528: good on pop culture oh no no comment okay love you guys i gotta go love you bye bye we'll see you next

David Sacks: time bye boys we'll let your winners rain man david sacks open source it to the fans

SPEAKER_541: we need to get