all right everybody welcome back number one podcast in the world it's july all in episode 280 freeberg is on a little vacay we'll leave it at that and uh yeah bestie brad is here how you doing brad i'm doing great i'm doing a vacay in uh maybe idaho or somewhere jay cal you know who knows who knows who knows it could be anywhere it could be anywhere i mean there's lots of things he could be in plenty of places and uh looks like you are yeah somewhere in the northeast i'll leave it at that you having a little uh vacay for yourself this week very page i'm in my flag room very patriotic room here very nice you know where i work on the east coast in the summertime yes uh spent some time in dc this week and uh it's been a great week been a great week celebrating america 250. great and you're going to be out of there for the by the by the second week of august yeah so i have it august 10th through the 30th i'm good exactly exactly exactly jason b and b oh absolutely you don't know the half of it man i am on a summer bender i'm like oh where's your where's your vacation by the way where are you where are you right i am in paris i did uh about eight interviews for uh at the raise conference they'll be coming out uh in the all-in feed and of course cackling from the factory look at him you're working in the factory chamath palihapitiya it's gonna be a hot software summer for chamath how's your hot software summer going it's good selling enterprise software is hard but it's good i was like man i was such a dick to all my ceos hey the sas period and now you know i went to geneva shout out to mark i went to geneva he works out of europe sees all his european customers and he had a dinner in geneva which i joined and then me jensen brad smith anthony tan from grab and a bunch of other folks were put on this un commission for ai that mark is the co-chairman of when you see mark benioff in action man this guy is a master holy he is the impresario of impresarios yeah you see how he's built such a ginormous business it's impressive it's impressive what is a commission by the united nations for ai what is their what is their uh calling open source oh no but no i mean it's like the united nations actually do anything actually it's so funny yeah i mean anthropic was there too some one of the co-founders tom brown i think this is yeah yeah that's good was the anthropic guy running around saying it's the end of the world it's the end of the world no no no he was very tom's awesome tom's awesome in fairness to him he wears it on his sleeve which is like hey we really believe we're doing the right thing right and just trust us and i think the future is open source for all these countries well we're going to get into that that's on the docket for sure but let's start with the ipo update you know there's a trillion dollar ipo rush to the exits and you know this was a big topic of discussion brad at the liquidity summit last month and we'd never seen trillion dollar ipo we had one this year already spacex trading right about where it went public so it was priced i guess to perfection and theoretically i'm going to see two more uh brad has the inside information so i'll try to get it out of open ai and anthropic are slated to go out let's uh just go quickly over what happened with spacex it ran up to 200 a share uh it's been down a bit it's at 150 share as i said that's right at the ipo price so it's trading at that two trillion market cap currently seventh largest company in the world and anthropic confidentially filed on june 1st i don't know why they call this confidential filing when it immediately comes out uh but i guess the information is confidential polymarket says 65 chance anthropics ipo will happen this year on light volume 360k and uh two weeks ago gavin baker another bestie said he thinks they're going to end 2026 with over a hundred billion dollars in revenue and very profitable he said a couple of us guessed on the program that he thinks it would trade at three trillion right now if it went public chamath you made a great call on the pod you said hey good idea for elon to get out first what are the chances here chamath that these other two get out this year or maybe in like you know say nine months in the in the first quarter of next year we'll start there well i think that these are all great businesses i think the question is what is the market clearing price and i think that's more of a function of how much appetite the markets have to absorb new issues and at what scale that's number one and i think that's mostly determined by price so i think anthropic and open ai are probably in two different places the last time we heard from open ai their cash burn was still quite high just because of the diffuse nature of their business and more reliance on consumer than enterprise i think brad mentioned it in one of the pods that anthropic may actually be accidentally profitable i think he said something like that yeah let me tell you something really interesting i sat down with my cto today and i said how are we doing on token spend and he said the most incredible thing he said right now our token costs are doubling every 45 days okay and i was like ugh and he said yeah and i said well what is the downstream productivity and he said maybe five percent max okay and i said okay so my costs are doubling every 45 days my upside is essentially flat and he said basically and i said well explain why that is and he said honestly what we're finding out is that you need to use a lot more tokens to get to this next iteration of improvement because we've effectively already asymptoted and i said so what should we do and he said honestly we have to figure this out and so we're going to take a step back and try to figure out what to do i don't know how many other companies will actually go through this reckoning now but the point is everybody in the next three or four years will for sure go through it so i suspect that if you can get out now you should get out now before all of that starts to seep into the water table because i think that's probably what allows you to get out at a huge price and raise a huge amount of money all right brad you are uh well invested and well known for being invested in these two uh next ipos so you probably have some good insights since you've talked to them on a regular basis chances they get out in the next six to nine months both of them you'd say 100 chance unless there's some outside event you know blockade of taiwan some black swan event that we're not anticipating what do you think the chances are they're public when we're sitting here and i'm skiing in hokkaido yeah i think i think it's very high but let me let me first say you know the spacex ipo where we were also investors and we also bought in the ipo i mean it was textbook it was a hugely successful ipo they raised 75 billion dollars at 1.75 trillion okay so it went out below where we are today it's up 25 percent you know and let's call it on 35 billion of forward revenue so if you think about that revenue multiples trading at 2 trillion on roughly 35 billion of forward revenue it's an incredible achievement i think it was textbook i think anthropic and open ai were watching very closely because frankly we had not had an ipo of that size and to elon's credit and to the team's credit brett and gwen they really pioneered some really smart and interesting things as part of that ipo so you know you heard from gavin anthropics rumored to be you know trending over 100 billion in revenue compared to the 35 right if they exit the year at 100 that means their gap revenue next year could be well over 100 so based on the spacex success i think it would be a blockbuster ipo and i think spacex has shown them the way on things like the total raise pricing liquidity inclusion into the indexes how to do the lockup like i think they've gone to school it was a staged release in terms of getting out of the lockup it has to hit certain milestones and some of those are time early inclusion in the index raised 75 billion dollars like you know early inclusion in the index let me have you unpack that for a second because people said hey maybe this feels unfair that they should be forced to buy it what's your take on that is that just like haters gonna hate or is there something to that i think there was legitimate concern right this is what is the legitimate concern yeah the legitimate concern is that a company that had not been through the process of being vetted post ipo there's a lot of volatility you've seen that chart jason sure that the the peak to trough drawdown in the six months post ipo is 50 we've seen a pretty big drawdown here from the peak to trough as well so you don't want to jam it into an index at the peak and then have a 30 drawdown on top of people which often happens in ipos because people get excited it runs ahead of itself but they didn't do that here there was fear that that was going to happen so both the the exchanges and the indexes they looked at this and they made some modifications because the the other side of the argument is it's so damn big and important that it needs to be part of the index right right and so the reason the rules had previously existed is because most companies coming public were younger earlier less tested less revenues less profitable all the things weren't as important in the overall scheme of things so i think that they pioneered some really smart things it's worked well it's traded well and so i think that that provides a bit of a blueprint for anthropic but just in in terms of the enthusiasm it is an altimeter as a fidelity as a t-row an enthusiastic buyer of anthropic based upon the things we know today around profitability and model improvement and revenue growth etc yes everybody would be pig piling in everybody would be trying to get into the top of the book and you know the the last i heard you know again rumored that they would like to get out this year on open ai everybody knows that anthropic kind of passed open ai on a revenue trajectory but i will tell you open ai's kind of got its swagger and mojo back it's coming out you know just today with a whole new set of models we know gpt6 you know there's a lot of talk of that coming out within the next 30 days a whole new generation of models i think their revenue has really ticked back up the most recent kind of rumors i see on twitter is around 70 billion dollars tax a year so just as a reminder 70 billion may not be over a hundred billion that's rumored and anthropic but it's still twice uh you know where where the revenue of spacex is at so can they get out at over a trillion on that type of revenue growth being one of the two frontier premier labs i think the answer to that is yes um i'm not sure there's a huge race between the two of them to get out first i think they'll both go out when it's when it's time i think open ai has a little bit more complexity just associated with the corporate restructuring that they have to go through etc so i would be surprised if they go out before anthropic but the fact of the matter is i don't know but today as i sit here today altimeter would be a buyer at scale and at size in both of those ipos at three trillion are you a buyer or are you uh hey you know it's obviously going to trade up and down and i there's no rush because you i think were the one who said on the pod or might have been at liquidity live and when i asked you point blank hey should retail get involved in spacex what's your thoughts right and you're like hey listen it's a four percent flow five percent float it's going to trade up and down but you know a year from now it might be trading at the same basic price it's going to be priced not to perfection which it seems to have been but you i think your position was it's going to be priced reasonably there'll be plenty of time to get in you don't have to like you know panic about getting your shares yeah i once a company's valued at over a trillion dollars like the get rich quick schemes are over yeah right like that you and i share a deep passion jason we got to get retail investors we got to get the citizens of the united states in on these value creating opportunities earlier right the accredited investor laws are insane that we have in this country and keeps people from participating in these things but it is what it is right so they're coming public at over a trillion dollars i still think there's a lot of meat on the bone on spacex on anthropic on open ai but you're not going to have things that are i don't expect that they're going to be priced in a way where you're going to get a 50 to 100 durable bounce out of the ipos if so that would mean they were probably mispriced right into the ipo but i do think that these things can be compounders they're going to compound at the rate they compound revenue and i think all of these companies are going to compound revenue at well over 30 for the next many years and 30 a year for just so people understand that this is high growth in public markets on very large revenue numbers already you know growing 30 when you have 100 million revenues one thing growing 30 you know when you got a 10 billion or 100 billion you know this is this becomes a different uh task so let's talk a little bit about these two companies chamath and what the public's going to perceive them as chat gpt seem to be the public brand the consumer brand for you know large language models it's the ai for you know people who are doing their homework or mom and dad are trying to fix the dishwasher whatever and then claude took the lane of hey we're going to be the one for corporate and it did seem like open ai got very distracted with sora and you know disney relationship we're going to make a puck with johnny i've everything consumer then they realized oh wow the revenue seems to be an enterprise first is that going to wind up being the the big mistake when we look at it they kind of gave the google position the high growth position to claude and anthropic and they took the yahoo position or do you think they'll catch up on the enterprise or maybe they should just go back to trying to be the consumer version how how are these going to be positioned a year from now how's the public going to look at them the problem with enterprise revenue is at some point the person that's spending it has to see an roi i asked fable five high anthropics new model yeah anthropics new model i first asked it what is the lift of the s p 500 earnings per share growth since 2024 from ai and they answered oh it's 50 so then i looked through it and i said well no you're including the money that nvidia makes from selling chips so i said okay i asked a different question which is then what was the eps growth of the s p 493 and the answer was nine percent and i said okay well that's different and i said unpack that and the overwhelming majority of that was from pricing power or sitting on top of inflation and then the other three percent was from buybacks and so the answer as far as all publicly available data was that the actual roi was somewhere between zero and two percent so i don't know i mean i think that enterprise looks really good the problem is that very smart investors like brad and gavin and others at some point will start asking companies what's your roi what's the actual eps lift and if the answer is well i don't really know or i'm not sure and you know you don't necessarily have the pricing power to continue to raise prices enterprise is probably a little bit more brittle because there are fewer buyers and they're more demanding consumer on the other hand then all of a sudden becomes an incredible safe harbor because you have tens of millions of buyers and having those two orders of magnitude more buyers at a much smaller price point inoculates you from the vicissitudes of an roi discussion so it all really depends on what the actual roi is of this money being spent i think that we're in the phase of just being astonished as brad said about the scale of the revenue growth yeah but at some point you'd have to be an idiot not to ask well who is paying you this and can they sustain paying it to you i just don't know what the answer to that question is and at some point it may not be now at some point people will have to answer that question and interestingly a million dollars a year on tokens and that million dollars a year is doubling and tripling and quadrupling at some point you're going to have to show an roi that's above the risk-free rate of return otherwise you're going to have some angry investors on your hands and our discussion here for the last couple of weeks weeks on the pod has centered around that and the industry has responded on the place where all the cto ceos and capital allocators hang out which is x.com formerly known as twitter here's praveen the cto of uber and so when you ask like how are they getting how are they getting the roi out of this people are now bringing that conversation front and center and they're explaining it on x and he talked remember uber was also the one that ran through all their tokens in the first quarter so then on the other side of the business which is legal operations marketing customer support hr and procurement which he lists here he says in this know today 99 of our engineers use ai tools okay great right it's everybody's you know doing vibe coding and has coding assistance uh more than 70 percent of pull requests are attributed to local or cloud agents our engineers have built 2500 agentic skills so how are we bringing agentic ai beyond engineering and what they've decided to do is essentially he talks about these agentic pods and this to me seems directionally how this should be done which is you find engineers and you uh as we as we uh talked about forward deployed engineers fancy way of saying put an engineer put them into departments and have them work with the department heads who understand systems thinking how their process is done and um he uh he says he's making basically long and short of it is they're making massive massive progress on the operational side of the business so brad you're pretty pretty familiar with uber and have been a long supporter of that this is a company that knows how to deploy technology pretty well and they're an operations machine run by an operations machine dara they should report the eps gains attributable to ai yeah well i mean and this first step seems like they're really being thoughtful about this first hey this token span got out of control with the developers we're going to need to pause this and look at it and then second here's how it's going to lower costs and create more efficiency so brad let's talk about that side of it not just token maxing with the developers hitting the slot machine of like okay let's see if this pull request and let's see if if this produces the right code or not to these departments in a more strategic way it's not just the person who works in hr you know using cloud code or perplexity or whatever and trying to vibe code something this is hey we're sending engineering in to work with your top systems architect and we're going to you know try to find that roi yeah yes i you know first i would say chamath is right the only question is on what time frame there's no doubt that there there's a lot of money being spent today that is in the experimental bucket right where i i think there probably isn't direct roi chamath to your point but i think we're so early nobody cares i think we're so early in terms of enterprise adoption remember the total addressable market here is every single small medium large company on the planet and so we've never seen revenue growth like this because we've never seen a tam like this and if you look at the distribution of revenues across these businesses it's not like it's concentrated with four or five customers there are millions of customers independently economically making the decision that is rational for them every day that it makes sense like praveen at uber and of course they're trying to find things on both right now mostly the cost side cost takeouts to justify the investments that they're making and you know in tokens but i think we're on the verge of breakthroughs in intelligence that's going to dramatically change the revenue side of the equation for a lot of these businesses breakthroughs in life sciences breakthroughs in in product innovation etc where they could not divorce themselves from this even if they wanted to for example jensen huang has talked many times that all of his design work all of his design work now at nvidia is using ai to design the next generation chip the machine is building the machine so you can't get rid of that even if you wanted to and tiny intelligence advantages at the frontier where he sits are required like there's no way i don't think that jensen is going to use anything but the best models that he can to build out those capabilities so i just think that we're not going to see that in the next few years you're going to see it under the hood of course but that occurred at snowflake there was tons of optimization that occurred at snowflake but the revenue continued unabated the revenue growth continued under beta because they further penetrate penetrated use cases for further penetrated the enterprise so let me be provocative here if these guys end the year over 100 billion i think that they're on a revenue trajectory that they could three to five x again next year we've never seen anything like this no you're saying 100 to 300 100 and jason like you and i have talked about this our minds were blown if a company could go from 100 million yeah to 300 million we're talking from a hundred billion to 300 billion 200 billion of incremental revenue is incomprehensible in the history of silicon valley okay and just the fact that we're even in the history of the world yeah in the history of the world so the fact that we're even talking anywhere close to this tells us something different is going on here i think the thing that's different is that intelligence is the largest tam we've ever seen in the history of the world these guys are penetrating it so yes the super sophisticated companies the 80 90 and chamath are helping optimize their token spend that are early adopters 100 that's occurring but it's not really changing the trajectory that the frontier labs are on yeah and one of the interesting things about this technology that's really unique we talk about intelligence on demand when you would make a piece of software or you had some technological innovation it would typically accrue to i don't know one group of people in an organization you know maybe two groups of people right excel comes out okay yeah the accounting department's having a field day with it but it's not really affecting human resources or marketing okay yeah maybe it trickles down eventually every single person in every single organization is playing with these tools so if everybody's playing with it everybody's trying to apply it all at the same time it's kind of like you know you got a thousand person organization people are spending 200 a month okay yeah chamath they double it every you know x number of months okay yeah now they're spending 400 a month per person okay they're spending five thousand dollars well if the average salary is 100 150k at this organization it's only an incremental three four five percent on top of their salary so the way i look at it is did it make that person three four five times more effective at their job and i think the answer is yes so that's why there's so much token maxing going on and it's also a bottom up type product you can just get into this product for 20 bucks a month and you know no cio or cto is like oh no you can't spend 20 bucks a month on your corporate card for this technology so it when a bottom up technology hits everybody at the same time that's what would explain this revenue ramp that we're all having a hard time adjusting to it applies to every single person like who is it impacted by the technology is my question to you chamath like in what organization you're working with with 80 90 is there a department that says yeah the intelligence on demand not for us we don't need it well it's less it's less about being dismissive that way it's more that regulators and other people won't necessarily allow to use it the way you want okay so finance hipaa yeah there's hr data you're not allowed to to put that to work just yet what i'm finding is once you start using this and getting some gains it's very addictive and we were sitting here brad i don't know maybe in january and i got that open claw bug and then you know i started playing with this hermes uh hermes agent which is not a french company by the way they just use you know french uh names it's nouveau research or whatever it is i started playing with that it's a very peculiar piece of software but it's a very open piece of software so i went to open router i got my own keys i've been playing with glm then i talked a little bit about bit sensor on the program known as tau dollar sign tao it's a it's a crypto project somebody who is creating a subnet that is putting glm 5.2 and other models available at really cheap prices so i all of a sudden experienced because they gave me an api key having my token costs go down 95 percent and when you have unlimited tokens as an exercise which is going to come to everybody eventually everybody's going to learn how to drop the price by 95 and it's going to happen as well because people like grok with inference this is all inference right this is what people are using they're they're they're using inference to do this well inference is being impacted like three or four different ways the software is getting better open source at the same time you're going to have distributed networks like tau and uh you're going to have better you know chipsets from grok and cerebris etc all that's happening at the same time once i got down to 95 cheaper i started setting my agents instead of doing daily runs to doing hourly runs then i took my agents from doing one task and i broke them up into three agents and have them doing three different things on the hour and when you start doing hourly tasks and then you wake up in the morning and like 14 jobs have been done you're like wait a second this is completely different as one example i have it has all the all-in episodes all the this week in startups episodes and we set these cron jobs to go find what the new trends are in technology i have a trend spotting agent running every hour informing me of the top three or four trends and i just give it words really does change your thinking when costs go down what do you think the tokens are going to cost brad and you know next year yeah we've seen we we've seen 90 reductions in the prices tokens for each of the last two and a half years we've talked a lot about jevin's paradox which i think you you're you're referencing here which is you're going to use a hell of a lot more when it happens i think the central debate right now in ai is the one that chamath keeps pointing us back in the direction of which is for 18 months since the deep seek moment right when the deep seek moment happened the markets fell 40 percent and there was a reason for that many started arguing that the frontier models were screwed that open source was going to kill them that they were closing the intelligence gap that model routing was going to make it easier and easier to root these tasks to cheap tokens but despite all of those arguments and now we're 18 months into this and i had this back and forth with girly a lot i love open source i want all the competition in the world let's be very clear but despite all of those arguments the facts on the field are just the opposite the share of economic value right there's this quote there's this tweet this week from jesse zhang that we ought to pull up here you know the economic value the share of wallet is actually increasing to the frontier labs while the share of tokens these commodity tokens is obviously going up you know to the other guys and i had a little back and forth this week with nikesh on this kind of trying to suss out why is that the case right because what people would have thought is oh cheaper pretty damn good 90 is good enough to do all these tasks that you're talking about jason so nobody's going to use the anthropics and the open ais of the world but despite that it looks like their share of wallet has gone up i think it's not that i think it's more that when the iphone was a novelty everybody would keep upgrading because you expected that the new price was worth it and then at some point there's a moment you can debate when it happened where people said you know what i'm just going to keep the old phone because it's good enough and i just don't see the difference and i think that there's going to be a moment like that like when i use fable 5 the problem is that it's nerfed on a bunch of things that i would normally research you know i was with somebody this weekend and he was telling me about some health thing and i put it into fable and it's like it won't answer you i'm like okay so i think that everybody will get to a point they'll get to it at different times where they just say you know what like it shouldn't really matter what model i'm using if i get an answer that i think is reasonable and i can kind of go about my day separately i think when the corporate cfo gets involved that'll be an entirely different conversation altogether i think that what i can tell you after this u.n commission that i joined with benioff and jensen and brad smith there is not a single country in the world that is not trying to figure out its own sovereign ai strategy and i don't think they believe using a close source american model is the answer and so you know we i think we have to keep in mind there's trends one is just geographic penetration of humans and there are still many many many more people that don't use it than do which is an upside and an opportunity for everybody and then the second is there is going to be the experimentation as you said that needs to transition to ongoing repeatable usage and then the third is that all of that then needs to plug into the existing regulatory infrastructure that we use as societies to run the world and i think when you put all of these things together it's not clear to me who wins except that you're going to have a lot of diversity of choice certain countries i can tell you after this week have no desire to subjugate themselves to any technical risk and so they're willing to spend the money to have their own now we can argue and debate whether that country has any chance but they would rather take an open source model like nvidia's actually and stand up their own stack soup to nuts for their own people and their own companies inside of their own country and if the models are 99 as good or 95 as good there's going to be a claim that some countries make which is it's just good enough that's the question that's the question and then separately there are companies who will not have the earnings growth to justify this without going on some long protracted carve out of cost and most companies you know this they just don't do it they don't have the nerve to do it they're not capable of it you know you wrote that famous essay to zuck he was pressured into finally doing it absent a very few companies most people just allow the problems to compound so i just don't see a world where when you get clobbered over the head you don't look at other ways of just displacing costs and if it's like coke pepsi kind of a thing and pepsi is one one thousandth the cost of coke i don't know i just think it's uh it's a risk that i think has to be managed in the perception of the market participants and the underwriters to add to that uh brad just open source is very hard to implement when compared to just firing up claude and having claude already approved in your organization the number of steps it took me in order to and i i'm pretty familiar with technology it took me hours to configure my new setup to get onto this bit tensor network to get open router going and to your point jamal it does dynamically route now so i'm dynamically routing and i'm you know glm 5.2 and then if i fall back to claude but which quad am i going to fall back to and here's another piece of evidence to your point chamath there are some organizations that just aren't capable of this they don't have the the team that you know does this naturally we just talked about the cto of uber now let's talk about another cto andy fang is the cto of doordash shout out to stanley and so he as you can see here in this uh tweet a lot of people listening to all in over the last couple weeks are coming out and as i said explaining what they're doing to address this exact issue he says hey with our internal coding benchmarks we're able to confidently injure introduce open weight models into our ai code review without degrading code quality have the frontier model fable from anthropic to do the hardest work delegate lower level work to kimmy 2.6 and they are now releasing their benchmark so another group releasing their benchmarks and saying hey we know this is an issue the cto has been charged to your point chamath again cfo says hey make sure this is profitable we get the roi they put that on the cto here's another cto from another leading tech organization that knows how to implement this yeah the really interesting thing we have to forecast right now is what happens in an earnings miss and i think what happens in a in a moment where for whatever reason maybe there's just an externality that there are a series of earnings misses where are people going to look and i just think that people find it very difficult to lay off other people i think it's much much easier to cut other costs and i think that the more successful these companies get in a very quick amount of time without really proving the roi i just think the bigger the risk is it's complicated the game on the field when you're working with these enterprises and just trying to explain it to them is i think that they're they're getting smarter quickly is what i would say i would just say i i i think that chamath sex absolutely right about the sovereign uh stacks that are going to get built around the world this is not either or we are going to have open source and we are going to have frontier intelligence um the preponderance of the tokens today are already shifting toward cheaper lower uh lagging models out of open ai or lagging models out of anthropic or or the other frontier labs that are out there obviously we you know we talk about those two spacex has released an incredible model you know in the last two days meta's out with you know a a terrific model today so gemini is still in the hunt so there are lots of choice the meta thing was really intense because i thought okay you know we talked about the game theory which was mark should scorch the earth with open source i think they flubbed that play but then i think he is now said he's going to create a price war and so if you look at the tweet or the quote there was a post jason i don't know nick if you can find it i got it announcing it he was basically like hey guys i'm going to give you the same quality at like one one hundredth of the cost now again there's a lot between here and there there's a lot of enterprise distribution that's required and you know this there's been a couple of misfires before but i thought it was interesting that the vector of challenge was on cost yeah here's the mark zuckerberg a tweet just so i queued up for you there brad and he's at think d that was his old handle back when he was in college f-i-n-k-d and he's done more tweets today over this muse spark announcement than he's done in his history so he's getting into the x.com conversation quote today we're releasing new spark 1.1 a strong agentic encoding model at a very low price it's available through our new meta model api and in meta ai so he's coming out saying hey we got the strongest agentic tool here please come use it he also wants to have his own essentially you know he wants to jump into not the hosting space but he wants to provide tokens as well so again i think we're going to have a tremendous amount of selection the competition is great for america but i think if you look at the things people are doing let me give you an example the premium workload jason you talked about summarizing a document may take 20 000 cheap tokens to do of course shoot that to a lagging model or an open source model but if you're talking about replacing a software engineer for two hours that may take two million expensive tokens and the consequence of using something that's 95 is good is really high right because you have a long-running task and if the task breaks early or it breaks in the middle or breaks at the end there's a huge cost to that so you still burn the tokens right you and back to this analogy and the time machine and you lose and the time and the compute so if an ai agent is replacing a 200 an hour consultant right take that as an example so three consulting firms they're competing they need the smartest consultant they're charging 200 bucks an hour the difference between spending three bucks on a cheap model or 15 bucks on an expensive model to replace a 200 an hour consultant it's just irrelevance that inference cost difference is irrelevance if you're getting something that's bulletproof for 15 bucks and so i think that's what we're seeing play out the best evidence for all of this is just revenue growth right we can sit here and speculate all day long as to revenue not from anthropic and opening eye but from their customers i know i'm talking about what is anthropics revenue growth compared to open ai compared to the open source models millions of independent actors are choosing every single day the open source companies are growing right but they're growing selling something that is really really cheap and there's a there there's room in every single market for premium products for mid-tier products and for commodity products and i think we see a lot of this token growth people are speculating that the the intelligence gap between that commodity stuff and the frontier stuff is going to collapse to the point that people won't pay for the frontier stuff there is no evidence of that on the field today it may develop over the course of the next couple years but it's not on the field today yeah and just to give people an idea we keep mentioning what sovereigns are doing to give you the specifics on that the uae very famously has their own uh abu dhabi technology innovation institute shipping falcon you probably have heard about that the saudis have humane and they're doing their own models that are arabic llms and then this week japan is investing six billion dollars in a consortium it's called the neo terra the neo terra n-e-o-t-r-a consortium and they're doing that and skipping ahead to physical ai ie robotics okay joining the conversation here the one the only saxy poo sax bringing you into the discussion talking a little bit here about the debate that we started here on the podcast getting roi from tokens where are the tokens going to accrue to open source versus the frontier models a bunch of ctos chiming in on x this week in the last couple days in fact talking about how they're managing intelligent routing first to open source models then falling back to fable and the frontier models how do you think this is playing out and if you're an investor in the space how do you think about the frontier models and their growth when you have uh you know cfos coming in and saying hey justify this cost and do you have a cheaper solution and what is that cheaper solution well look i think that enterprise ctos would like to shift their token consumption to cheaper models for the obvious reason that that would be more efficient and they are seeing their compute costs or their token cost is skyrocketing right now so everyone's trying to figure out how do we put the brakes on this or at least control it you know make sure we're getting roi you also have the ai sovereignty issue that we discussed last week that alex carp talked about where they're worried about giving up the secret sauce or the alpha in their business to a frontier lab that may one day be competing with them so there's no question that enterprises would like to diversify they would like to get off of these frontier models when they can the problem is i think in most cases they don't have the technical ability to do it i mean coinbase figured out how to do it door dash figured out how to do it which is to say they built a token routing system a layer of middleware that allows them to sort of send frontier tasks to frontier models and non-frontier tasks to more mundane models but i don't think your average enterprise has the technical capability to do that so i think this is a case of the spirit is willing but the flesh is weak i mean they are willing they would like to diversify off of these closed models but they are unable to do it and so this is why the share of wallet of closed models it actually increased i think that open source went from 19 last year to 11 this year so open source as a share of enterprise spending is actually decreasing now i don't think that means that usage is decreasing i think usage is skyrocketing in both these categories it also may be the case that because the whole point of using an open model is you just pay for the compute costs you don't have to pay a lab so it may be the case that it's hard to measure that usage in terms of spend but nonetheless i mean anyone who's saying that these closed models are gonna lose or are somehow losing you're just not seeing it in the data like brad's saying the revenue is skyrocketing and i think the most you can say is that enterprises that are technically capable would like to gravitate towards hybrid architectures but at the same time it takes technical expertise and it is just phenomenally convenient whether you're a developer or an enterprise just to go with the frontier labs and that's why their revenue is skyrocketing it is the easiest choice it's the most refined yeah and there's one other thing here as well and this was discussed in a really interesting blog post by the founder of decagon which is enabling ai-powered customer support for enterprises and what the founder said is look open models are great when you know exactly what you're trying to do why but they're smaller cheaper models but you have to do post training you have to have the data set and you have to know exactly what you're going to use them for totally but if you don't know exactly what you're going to use them for you want the most powerful general intelligence that you can get right so what he said is that for mature use cases yeah you want to go open but for immature use cases which are all the new things people are discovering right now you're just going to want to use the most capable general model that you can and then once you figure out what the workflow is and what the workload is going to be and exactly what you're trying to accomplish then you can use a small highly trained model and i think you'll optimize in the post to get the game for customer support your model doesn't need to know physics for example and so you don't need that capability but enterprises are still trying to figure out exactly what all these workflows are going to do so i think that's another factor which is to say that you know it depends on the use case and how mature that use case is and you really want the most powerful frontier models that you can at the discovery of all the potential for the technology yeah and then let me just wrap up then there's one other interesting post that i saw was by nakesh aurora who also said that what he's seeing is yeah enterprises would like to diversify they would like what he called model fungibility they would love to commoditize these models right and just hot swap them yeah headless is the term being used right yeah that'd be ideal for enterprises is you sort of swap out the model for the cheapest one that gets your task done but then what do you do about memory what do you do about context what do you do about history and what he said is no one's really figured out a way to abstract that stuff away from the model yet and again this goes to the technical challenge of creating this middleware layer that would do the most efficient token routing it's it's well you know it doesn't work unless you can make all of that context and memory and history fully portable to the cheaper model that you want to basically hot swap to which means you have to have some technical ability sacks and the people with technical ability the tip of the spear the one percent of people deploying this technology are starting to figure that out here's another proof point and some more evidence this is ali the founder of databricks i think a company you're very familiar with brad and what he realized when you start taking apart the harness and you start looking at the skills you look at the memory and all this accoutrement that you put around your tasks he said we find that the same model using the same model not using open source versus open ai or claude we found that for the same model the choice of harness can significantly save costs by about 2x so they found with glm 5.2 that this forms extremely well and that their tasks literally are getting cut in half using the same model but with a different harness and that rings true to me i once you've built one of these agents and i was talking about one earlier i'm running every hour on the hour to find trends i asked it to please start optimizing it and when i optimized it it was like 80 less token use and now in these apps you can go to your analytics sacks and you can actually see your token use by hour by job and across which models you're using this is really sophisticated and hard for for a consumer to do of the technology but it's definitely a trend so with the harness that he was using is that something they built in house yes i think it's um yeah okay got it so they basically create their own application omni gent yeah in front of these and that it can multiplex different harnesses and models for different tasks so he's not only routing to the right llm he's routing to the right harness and people don't even know what skills are people don't even know what the memory is at this point they're that's all abstracted into the claw product or the complexity product etc yeah there'll be a massive business there already is all these inference clouds you know the base tens of the world the fireworks of the world every single hyperscaler in the world is going to do this they're all going to provide you know tools that allow you to achieve some level of model fungibility the big question is at the end of the day we're going to have it's going to be very heterogeneous but what is the mix between these two i again think the tam is so damn big here that you're going to have huge open source use cases sovereign use cases etc you're going to have plenty of room for the frontier labs i let me throw something out i'd like to get your opinion on you know to a certain extent there's this implied assumption in the world that uh there's going to be this convergence of intelligence right and if you look at the benchmarks today seems like everybody you know on the benchmarks they are converging but yet if you look at the revenue distribution it's not converging at all one of the questions i have will the model router itself be smart enough to overcome david the inherent intelligence advantages of the generalized of the frontier labs the non-consensus argument might be that intelligence is not converging at all that super intelligence becomes fully self uh uh you know recursive and as it becomes recursive you actually extend the lead because the smarter your model gets the more revenue you get the more compute you can buy the more you compute you can buy the better the model is that you can build so i think there's a chance that over the course of the next two to three years as we take on much more complex agentic tasks that the distance between the frontier and everybody else doesn't converge it actually extends we shall see but you know i think there's this implicit assumption in all the arguments today that everything's converging i'm not i'm not sure that we've really run that to ground another piece of evidence to put in uh to this mix i interviewed anton the ceo of lovable lovable is an app that or as a service that allows you to vibe code you know different pieces of software they've got a really interesting take on that they went from 100 to 600 million in revenue over the last two years they went from zero to 350 in the first two years of the company products been out i think roughly for like 30 months then i also spoke to uh the ceo of 11 labs matty and i asked both of them point blank are you guys uh you know your major customers of you know the the frontier models yes they're spending tens of millions of dollars with those frontier models i asked them hey are you concerned about data leakage and them compete you know releasing competing products 11 labs is doing voice and obviously cloud code you know it's an obvious competitor lovable are you going to make your own models both of them said that they're working essentially on their own models those are major customers of the frontier labs who they want to get off of the frontier models and they want to have their own proprietary model the the ability to create verticalized models is getting easier and easier every six months or so so that's going to be another trend to look for is these verticalized models for voice verticalized models for building code and uh we're going to see people stop using the frontier labs and these are major major eight and nine figure customers i think they're going to just run for the hells and only use the frontier models the counterpoint there is 11 labs i love maddie yeah do you really think he's going to use an inferior model he's got to be have the best voice voice agent in the world and if the best voice agent in the world is given to him by using the frontier labs can he afford in a competitive marketplace to say i'm going to use the cheaper version the thing that i built for myself even though it's not as good as the other thing if he builds something better i totally agree with you which is what he believes he's doing he believes he's making a better version yeah so that's the question that i just you know put on the table whether or not you're going to see this convergence whether it in fact is that easy i don't think it's that easy but we shall see okay it may come down to how discreet and sort of predictive the use is so like decagon the customer support ai company they said that 90 of their usage now is being sent to open models but those are open models they've had the opportunity to post train on and do a huge amount of customization based on all their learnings and all of the data that they've gotten so again it comes back to maturity of the use case if you know exactly what you're trying to do it's probably easier but you know i don't think that's most enterprises though and maybe there's going to be a pattern where you know all the immature use cases which is to say all the things you're figuring out you're just going to want to use the most powerful model possible and then once it gets really well defined maybe you start moving some of those workloads to post-trained open models purpose-built models yeah yeah purpose-built yeah it could be something like that that's kind of what's happening with the people who are the tip of the spear they're working on the routing of the jobs they're working on the harness and they want to be independent and have that ai sovereignty we talked about last week speaking but just to take on brad's point for a second i actually agree with what i think you're saying brad which is the market today seems to be pushing towards duopoly or it has become a duopoly certainly measured in terms of revenue if you're to look at market share based on token revenue there's only two companies making meaningful revenue anthropics at what 60 something billion arr open ai at 40 something billion arr i don't know if anybody else even registers and it may be the case that the more tokens that anthropic and open ai produce i mean we've got to remember every token that they're serving up is on behalf of a use case right so they themselves are learning from that and they're getting better at them providing whatever offering that is and so who knows like the gap may be growing a year ago it seemed like we had five major labs you know now it seems like there's a top two and then everybody else so i mean look i could see ai easily becoming another tech market that becomes a duopoly which by the way is the trend the historical trend is like monopoly or duopoly in most tech categories for better or worse yeah in this case though however we're using revenue as the metric to determine the winner keep in mind when you're doing open source those are dark tokens those don't come up as revenue so we don't know the utilization that's occurring at doordash when they're using an open source model we do know their fable and their anthropic spend right and because we see that in the anthropic revenue ramp the more they deploy these things on their own hardware using commoditized hardware using the neo clouds you don't see that it doesn't come up as revenue it comes up as free the only thing you're paying for there is the hosting cost you know and that's that will come up on nvidia's balance sheet so the gains you'll see there will be cerebris neo clouds caruso cloud etc so just keep that in mind when we're having this discussion let's talk a little bit back to sovereignty here the ccp said that they might or there's a report out according to reuters reuters generally does a good job of this they dropped a couple of anonymously source reports about ai in china and these were published about 15 minutes apart the big scoop that ccp officials chinese communist party are reportedly considering restricting overseas access to china's top models so two chinese regulators met with alibaba bite dance and z.ai they're the ones who are doing glm 5.2 that we keep referencing they're discussing limiting access to the top open and closed models outside of china why are they doing this well they're they're making uh any theft or leaks of ai research a national security offense and they want to control who can fund chinese ai labs and we saw this with manis which was a chinese company tried to go to singapore the ccp pulled those employees from singapore back to china and so here is their main concern the quote is that they're concerned about mythos chinese authorities are deeply worried about the potential for mythos to exploit software vulnerabilities and that washington might deploy a model against chinese interest sacks last week i proposed the reverse to you in your previous position as czar of ai do you think the united states should be banning those models now we have the opposite china saying potentially according to these reports allegedly that they might restrict them so explain the game on the field here if you're going to look into what china's thinking why would they want us to not have those open source models and how is this chessboard developing well last week i explained why it would be harmful to the u.s to ban open models so if you're china and you want to harm the u.s maybe you would want to i mean it does kind of make sense because our our companies are benefiting a lot from all this r d that they're doing now at the end of the day i think this story is probably a little bit overstated i think there are a few chinese models that were open source that have gone closed source but i don't think they're all i'd be surprised let's put it that way if they all went close so for example the number one model in china as i understand it is bite dances model which is already closed that's kind of like their chat gpt equivalent and it's always been closed then you've got alibaba's quen which was open and now i think is going closed and zipu which has glm 5.2 which we've talked about a couple weeks ago because it seemed to be catching up to what was then commercially available as the american frontier at certain tasks they i think are going closed too after having been open and so this is i think the tactic is you stay open until you catch the frontier you get close to it and then there's a really compelling incentive to go close because you want to capture all the value for yourself which by the way is exactly what sam altman did famously at open ai not only did they go from a non-profit to a for-profit they went from open models to closed models so it's exactly paralleling what sam realized three years ago yeah i mean in a way that was what i think meta's original strategy was was that llama was going to be open but then they actually they sort of backed away from open a little bit but it's just kind of an obvious strategy right is is that if you want to catch up you go open because by the way you're not gonna make any meaningful revenue on on closed anyway because you're not close enough to the frontier so why would anyone buy your product but if you go open you get the developer community on your side and you get utilization more people use it which in ai gives you reinforcement learning yeah sex well having having spent some time in dc this week i and and talking with with the white house and treasury etc on this topic what i can tell you is while there may be some you know debates about regulation of us models the one thing there's absolute agreement on is doing everything to stay ahead of china and you know and and the president all the way up to the president very interested how far are we ahead of china what are the things we need to do to stay out of china is a unifying force in washington and the idea that we were going to kind of take our frontier labs off the field off the playing field while letting chinese open source models run free you know and on top of that distilling our models i will tell you gl glm 5.2 has watermarks from mythos all over it right so we know they were distilling etc and i think the u.s government is going to take steps against distillation which they should do so i think that you know china doing this in some ways i don't think it hurts the united states the united states can spin up open source models we've got reflection spinning one up obviously we've got the good work going on at nvidia with their open source models the labs i've talked to a couple of the frontier labs about open source models i said why aren't you guys making open source models they're like there's not a lot of demand for it if there was a lot of demand for it we would make it and so i think the us is in a good position i think this is probably more chess playing by china than actual threats because it would hurt them a lot more than it would uh hurt us yeah and then to just back up your point sax about when you're behind go open and then once you catch up it's kind of tighten things up that's exactly what they did with android right google released android at a certain point they were like in order to use android in the license you have to include google search you got to use google drive you got to use chrome and they started tightening it up so it's not really an open source project at this point just by the way i think the absolute best thing that could happen for america in terms of winning the ai race against china is if china somehow sprouted their own doomer community yes we need uh like a chinese dario yud over there we got to get their p doom up we got to get there yeah exactly we need a lot more people over there freaking out about you know job loss or rsi or whatever yeah that'd be the best thing that could ever happen to us is if they start cracking down on their labs in the same way that the doomers want to do over here yeah brad let me just say just one comment i mean look i i agree with you that from the president on down everyone wants to win the ai race and in fact that was you know in the big ai policy speech the president gave about one year ago that was the whole thrust of the speech was declaring that we were in an ai race and america had to win it i think the big risk is more that and this would not be at like the top level you know i think if the president could make every single decision it'd be perfect the issue is at a lower level in the bureaucracy do people somehow do things that are counterproductive maybe they think it's going to help us in the race against china but they end up doing something that's ham-fisted they just like ban something or without you know really truly understand all the implications of it so i think there's no question that the administration wants to win the ai race the president definitely does and at the top levels they will all make smart decisions the question is whether at lower levels of the bureaucracy you can get mistakes being made and then you have the influence of congress whatever they want to do those guys they're more responsive i think in a way to like the doomer community that's creating a lot of political pressure right now well and the throttle you know paradoxically to all of this might not be the software might not be the chips it might be energy yeah chamath i mean when you look at your data center projects and the other ones that are going out there if we need more tokens if people need more inference we have a gating factor in the united states which is which is energy there's a an analysis that my team put together which i think is quite staggering if you just look at the load growth that's expected between now and 2050 we are about three entire california's worth of energy short and that's just assuming regular consumption of devices and cars fridges televisions and computers so we uh we have a we have an enormous problem in the united states with respect to electrons yeah and if you put taiwan into the mix here where the chips are coming out of i had a really big wake-up call and there was a wall street journal article about this the amount of lng which is what taiwan runs on is like they have two or three weeks of it china decides to blockade taiwan they're going to run out of energy immediately so this is energy both in china and taiwan and in the united states it's all dependent on that we have to get nuclear running more solar running more batteries more of everything and uh that is obviously a regulatory challenge here in the united states all right let's talk about your time in dc brad gerstner went to dc everybody and uh huge huge congrats brad you've been harping on about this um you know uh accounts now called trump accounts the invest america accounts and um tell us what happened in dc this week because i think you finally have the number one app in the world trump accounts is the number one app in the world congratulations and a bunch of announcements so what what what's the contours of the announcement and uh maybe you could take us behind the scenes there it is trump accounts the official app number one in top downloads your kids can invest in the future this has been you know a four-year mission in the making thanks to you guys you were early supporters backers we talked about it on here and you know founders are crazy and you guys probably looked at what i was working on and and and thought you're nuts you're wasting your time on this and so you know when it got signed into law last year that's a huge moment in the founder journey that it's like getting your first round of funding maybe like okay we actually this thing is going to happen but on july 4th of this year the app went live right so that means millions of accounts got created the accounts got funded and to celebrate that and to really kind of take the next step forward you know we designed a joint bell ringing first in history between the nyse and nasdaq from the oval office that was incredible we had 100 ceos there kids there families that were impacted and the president really you know kind of laid out that this is much bigger than just a program to give a few people some accounts this is really about making every child a capitalist in fact the president suggested that we're going to auto create uh accounts for all 50 million kids or upwards of 70 million kids under the age of 18 so he called on us to get the accounts open faster for more people to have more impact to make sure no child is left behind right just slow down because a lot of people don't even know what a trump account is just explain the what it is and then you should contrast it to like a 529 account and some of these other things great so as you guys know the idea was very simple a thousand dollars for every child at birth that could compound for their life in a privately owned investment account so you're born you get a social security number and you get an investment account and if you do that you start with a thousand dollars and somebody matches that and you save 10 bucks a week that's fifty thousand dollars at age 18 and the idea and that's invested in the s p 500 s p 500 so when these accounts are created all that money goes into the s p 500 there's no cost it's a free account for the lifetime of the recipient and that was packaged into the invest america act which was passed into law a year ago as part of the reconciliation bill so that's what actually occurred on july 4th of this year all those accounts were created for all of these kids that's the reason the trump account app is number one in the app store because parents started hearing about this and said whoa i need to go download and get this set up for my child we had over a million and a half counts created in the first 24 hours after the launch of this we had over a billion dollars of deposits so i was contributing money into the accounts of my nieces my nephews my kids friends kids every account app has a qr code jason so somebody can just send you the qr code for your kid you double you apple pay on your phone double click and you set them 25 or 50 bucks so that is kind of the the most essential part of it but we also had a bunch of announcements around philanthropists just to be clear you can get access to that when you're 18 19 20 years old and start putting it towards school or you can roll it into your ira roth ira i guess your your your retirement account obviously michael and susan dell were the were the anchors here it's over six billion dollars 250 for each of 25 million children primarily lower and middle income kids spacex is president gwen shotwell she joined the party put 350 million in her spacex shares and for children of lower income communities so with this there's a device or some way to do it so you can target specific communities by geo uh or by i guess their net worth um it's just zip code and age zip code zip code and age okay and then micron put in 250 million up to a thousand per employee so that seems to be a really interesting way to do this like you can do an employee i'm sorry an employer contribution and brad brad did it for all kids in indiana i think right correct okay this is a big number here this is a big announcement brad the guy who complains when we make him buy in for 10k after 10 p.m at the poker game and who like rage quits the game when he loses six thousand dollars somehow brad dropped a hundred million dollars i mean oh my god let's get a round of applause and a golf clap brad this is i mean i i've never heard of you doing any philanthropy like sometimes you show up with a bottle of wine to the game but this is a big number this is a big decision for you huh well i think this will become the largest direct philanthropic platform in the history of the country we told the president we think we can raise a hundred billion dollars in the first 12 months and so the scale of the philanthropy the nature of the philanthropy directly to america's kids without a charitable middle band that's directing who gets what and and how it's distributed so you think about the people who now are you know we're 10 billion or 100 billion how do they give that money away at scale effectively now we have a platform they can do that with it goes directly into the accounts the money can't be taken out until the kids are 18 it can pass for there was a bunch of noise about how some people won't do it because it's called trump accounts and that some people said you know this is going to create this weird class divide by people who who had tds and refused to give their kids because i think your website or something said something like 13 million bucks by the time they're 50 and you know i tweeted something to be effective that is an irresponsible amount of money to not give a kid because you don't like the fact that it's called a trump account it's it's it's patently insane if you go on blue sky which is like the open source uh lib tds um social network people are like just but one you know y'all trust those trump accounts i sure as hell don't and so there's a bunch of people yeah that yeah speak to that for one second mike so i would say this you know it was the enabling legislation is the invest america act um a lot of people a lot of democrats call them invest america accounts they're officially trump accounts and the facts on the ground are that parents aren't listening to that noise the parents who are signing up for this are across the income spectrum across the economic spectrum they're across the political spectrum they know and understand that their first responsibility is making sure their kids have a connection to the american dream have savings for their life but yes they are called trump accounts and i i've read some of that blowback but the president himself let me just make this case very strongly there's nobody who i've talked to about this over the last two years who cares more about every child getting an account than the president himself in fact that occupied a lot of a lot of our conversation over lunch he said how do we get more people auto enrolled in this faster i want every kid to have the shot to have this i don't want anybody being left out and left behind because their parents are too busy working two jobs or because their parents may have an issue with it being called a trump account so the president is pushing us very hard and the treasury secretary and he told you you need to brass he gave you instructions he gave you an order that he wants you to auto create the accounts this is a brilliant move he know we know the social security numbers of people who are under 18 he told you get to work and automatically create the accounts are you going to do what the president trump has commanded you to do brad are you going to auto create them brad are you going to disobey the president we we our intention is to get all 50 to 70 million accounts created over the course of the next 90 days using all of this data but you know listen we got to work through treasury the white house social security etc they're definitely you also got to get elizabeth warren and bernie sanders and ro connor who are going to try to stop you are they going to try to stop you from doing this are they giving you blowback because they don't want to give trump the win which is totally retarded but no listen i i'll give credit where credit is due you know cory booker's come out and supported these and gavin newsom governor wes moore you know john fetterman senator from pennsylvania so there are plenty of democrats who are able to get over that hurdle but you bring up a good point and i said this on cnbc yesterday on the one hand you have bernie and mandami they want to take and tax all these corporations they want to control all that money in washington and decide who gets it right it's a very dependent on washington model on the other side you have the president in this administration and frankly a lot of democrats who are more in the orthodoxy closer to the center who say no let's set up a private account for every kid in america let's fund them let's not make them dependent let's make them independent of the government to build wealth on their own financial literacy on their own more likely to graduate from high school start a business buy a home those are two very different world views for america and i think the antidote to more socialism is more capitalism and as i told the president this is more capitalism sachs if this succeeds and uh brad does as he's been instructed by the president we're going to go from 50 percent of people owning equities in the country to as much as 70 maybe even 75 of the country having access and for the first time being part of equity nation what's your thoughts on this sax look i think that's a great thing and i think that this is a tremendous new philanthropic platform and that's really important especially in this time of growing anger and backlash and populism against billionaires and people questioning whether the system is rigged and whether they can be successful in america whether they will be able to be part of it this is a really important antidote to that but i almost think that the philanthropic aspect maybe has gotten almost too too much attention because people are naturally attracted to the freebies and the part that i think hasn't gotten enough attention or all the the comments i saw on cpa twitter you know where all these accounts were talking about what an unbelievable i guess you could say estate planning strategy this is or basically tax advantaged like a wealth management technique whatever you want to call like planning for the future and there's never been anything like this before they were basically saying this is like in the top three you know there's certain things that you just have to do like if your employer offers a matching 401k you have to do it because otherwise it's just you're losing out on free money and if you don't do a health savings account or you don't max out your roth ira there's just certain things you have to do because they're so tax advantaged or you're getting free money right and in this case you're getting both there is the opportunity for frankly the free money for your kids right but also the tax advantage is huge so let's just go through this and brad correct me if i get any of this wrong so you can donate up to five thousand dollars a year to your kid as long as they're under 18 and it's not just you it's any friends and family or others can contribute as well which is new and then they get tax-free compounding until they're 18 and your employer can contribute up to twenty five hundred dollars tax-free so at a minimum you should go to your employer and say sign up for this and if you have to take twenty five hundred dollars out of my salary and make it a donation to my kid's trump account because then that's a huge tax savings right neither side has to pay tax on it so you know like brad said this is basically like an ira you get tax free compounding then when the kid turns 18 they can get access to it and they can do a a rollover into an ira or into a roth ira which is even better because when the roth ira matures you don't pay tax on the money that gets distributed out of it worth whereas with a traditional ira all the taxes get deferred until the end the difference is that when you do a ira to a roth ira conversion you're supposed to pay taxes at that point and i saw one really clever cpa say that well the best way to do this is wait till your kid is actually not a dependent anymore like so maybe they're in college or they just graduated from college and they're in like the zero percent tax bracket because they're not making any money and then do the conversion and so you'll be able to convert the trump account very cheaply into a roth ira and now they're going to have two to three hundred thousand dollars potentially in that account that they can then do tax-free investing for the rest of their life or they could potentially start a company with that other things you can do with an ira is you can use part of the money on a down payment for the first home purchase or if you get into a health emergency you can use money for that so there's all these things you're allowed to distribute money out of an ira without incurring a penalty but generally speaking the point of an ira is to save for retirement and this is where i think it gets really amazing is because if you start with two to three hundred thousand dollars at age 18 you'll be at 10 million dollars plus by age 60 if you just let it compound i mean there's ranges because babies we're creating here we're gonna have a lot of rich kids with trust funds yeah so this is like this is all you have to do to make sure that your kid is protected for retirement is if you and your family and your friends and your employer can just contribute to their trump accounts yeah like that that's like that's way better than social security brad i have an idea i have to go and sell some enterprise software so i have to leave but i'm really proud of you i think this is incredible you should convince open ai and anthropic to give the equity of those companies if this is going to be as big as you say 100 billion 300 billion zillion trillion put it into the uh accounts of every kid can you just explain how that works against the five thousand dollar i gotta go love you guys see you later all right good luck on the sales call yeah so always be closing always be chamath closing apc you know again david and chamath as we build out the platform at scale so imagine now you have 50 million accounts that are opened we do we i've said on cnbc you know i've obviously talked with dario and sam and elon and others about making those donations i i don't like this idea of shaking down our companies taking their shares and then putting them in some government slush fund that perhaps bernie or aoc or somebody's going to control in the future i've said it's got to be voluntary and number two it should go into citizen accounts right privately held in citizen accounts that compound for their life and so you asked the question david how does it happen given the limits that you have you know the five thousand dollars per child that's why you have to have so you know 50 million accounts open right because then you can take dollars in at scale but we can also set up a pooled account david where it can be distributed over time so you distribute it to all the kids subject to the limits that you have today and then any remainder you can distribute to the three and a half million kids that are going to be born next year or the three and a half million kids born the year after that or the three and a half million kids born after that we are on a trajectory now that we're going to have over a hundred million of these counts set up over the next decade okay so we could have 70 million today and then you're going to add 3.7 million a year so you're going to be at a hundred million private individual accounts that are compounding for people's lives that anybody can donate money into that the people themselves i think one of the things that gets lost is moms and dads or somebody working their summer job put in 10 bucks put in a hundred bucks put it you know into these accounts they get to see it on their phone you know this is when we started this my sons and i designed this app and it's basically what we ended up with it's a you know joe shout out to vlad at robinhood helped you with it yeah vlad and and joe have implemented a more elegant version of this but every kid owns a little bit of nvidia a little bit of microsoft a little bit of apple imagining opening up that account david in middle school or high school to the money page and now you're getting excited that you're seeing oh man i'm in the game i have ownership and while you reference what it could be for families who can contribute five thousand dollars obviously michael dell and i and gwen and everybody else were focused on the 50 percent of americans who feel left out and left behind who would otherwise have zero if you do the math on this over the course of the next 15 years you could have somewhere between two and four trillion dollars added to the accounts of families and kids who would have otherwise had zero and talk a lot go ahead we talk we we talk a lot about philanthropy piece is it basically the way the the philanthropic aspect works is that other people philanthropists can contribute towards that five thousand dollars per kid right is that so you know when gwen shotwell contributes two million shares of spacex to two million kids each kid's getting a share of stock 150 bucks 150 bucks so now that's counting against their 5 000 limit but so that's what makes it compelling is okay look every every family that can afford to do the 5 000 should because it's just like so compelling from a tax and saving standpoint but then even for families who can't right they're going to be beneficiaries of philanthropists who just want to give this type of direct giving and it seems to me this is so much more efficient and so much better than the whole ngo industrial complex where absolutely where they take 40 for their offices and their salaries yeah they're just drifting yeah one of the numbers i saw was kind of amazing is again this goes back to the power of compounding is that if a trump account had been maxed out and you have the standard market rate of return that we've had for say the past 30 years then by age 28 that kid will be a millionaire incredible that's right that's right all the numbers you hear me quote the fifty thousand dollars and the two hundred thousand dollars it doesn't assume maxing you know that just assumes people are adding fifty dollars a month because i've been focused as michael and others have really on the families who who don't have the capacity to save today we're getting all of them into the game and the president directed us he said listen we have 529 accounts that already helped the top 10 percent that's not who we're focused on this is about the main street agenda this is about all the families that he ran for to feel left out and left behind and we're reconnecting them to the american dream through uh universal ownership they all have their own account they all have a private account on their phone um it's a game changer for the country it's the largest change to our social contract since 1935 and social security and importantly i think it couldn't come at a better time you know we have this we have this fight also just every employer should be signed up to be you know an employer that can contribute because again you could take that twenty five hundred dollars and hopefully look it's additive and it's not just a substitute but even if it's just a substitute and jcal your employer takes 2500 bucks out of your salary and puts it in your kids trump account then it's reducing your taxable income so it's a no-brainer if you're a profitable company your employees are going to love you yeah yeah but i think every employee is going to want to and every employer should do it because it's a tax savings for both right so let me know the tax savings here is huge yeah so just off of the mechanics of it i just want to maybe level up here for a second yeah i have been often critical i call balls and strikes and i can tell you in detail the things that i have a problem with this administration and their actions they've done and i have done it here on the pot i want to address the people who are nagging this and specifically nagging it because it has the name trump accounts on which i told you at the poker game called the trump accounts i don't know if that was like an obvious thing or i was the person who told you to do it i'm not taking any credit here but i remember that conversation was like just call them trump accounts like if whatever criticism you have of trump however valid you may feel it is this has nothing to do with donald trump and how you feel about him put your tds on the side put your valid criticisms on the side in this country we have a k-shaped recovery going on we have immense tension between the haves and the have-nots we to the point at which people actually believe that socialism and communism is a better operating system than the best operating system humanity has ever created which is called democracy plus capitalism right and kids love love capitalism they love building businesses but we are in an existential moment right now if these kids believe young kids and there's a couple of generations of them right now who do not believe in america anymore while we're sitting here on the 250 50th anniversary of this amazing experiment known as america this is the most american thing you can do so put aside your tds put aside your valid criticisms and embrace this and give the flowers to brad to the people donating like michael and susan dell and gwen this is beautiful this is the most beautiful gift i've ever seen to a country and this could be something that's a unifying principle that brings us back together as a country that everybody gets to participate in capitalism and this is the number one way to do it which is to let kids on their smartphone instead of saying you know what mondami's right i should get a free bus ride i should get a free i should get free pizza and we should take ken griffin's and and seize his you know penthouse it's a pad of tear all that you know and we have we have ceos getting shot and and their homes fire bombed well you know what if you're one of those ceos you've done incredibly well there was something called the giving pledge where they pushed you know affluent people at the ted conference for decades bill gates and everybody warren buffett everybody was pushing for this this is like the perfect version of the giving pledge because you're not just saying i'm giving away my wealth by the time i die you're very strategically saying every single person in america gets to be part of the best part of america which is entrepreneurship and everybody will be part of the equity nation and my final point is one of the happiest countries in the world is australia if you've ever gone to australia everybody feels safe and we have a large number of people in this country who do not feel safe and the reason they don't feel safe is because they don't think their kids are safe to the point at which people do not want to have kids in this country because they feel the system is just too hard this could change that if people feel hey kids have a shot and i don't have to worry about my kids i i worry about my kids and i'm affluent i can't imagine being a single parent and what anxiety you must have as a single mother or father and you're and you're making minimum wage and you're behind you know the eight ball for your entire life and now your kids are set that's all people want that's the only thing a parent wants is to make sure their kids have a better future that was the promise of this country and somehow it went off the rails for the last two generations this puts it back on the rails this is superannuation funds in australia in australia people are extremely happy the reason they're happy is they're forced to put 14k a year or whatever it is 12 or 14 i think of their income into essentially a 401k that they get to direct to a certain extent it's forced savings this does the same thing yes at a very basic level this could replace social security this replaces the giving pledge and i just want to say brad you know a lot of my friends got involved in politics some of them on this very program a lot of people it's very divisive you threaded the needle here it was a master class in balancing these two crazy parties and and the divisiveness in this country i just want to give you as your friend your flowers this is just absolutely outstanding what you did and you have been incredibly humble in your approach this this would not have happened without you brad this is this is your legacy of everything you've done in your life lots of success and i've seen it up close and personal this is a million times x everything you've done in your whole life you'll be remembered for this this is architecturally as big as social security i mean it's a new platform it's an entirely new platform it's not because it's philanthropy but it's also retirement savings i mean right and everything in between and this is not static we this is dynamic we can add to this there could be other features i'm seeing a lot of people in the comments say why stop at age 18 why can't you i mean you have the trump account rollover into a ira or roth ira after age 18 but why can't you keep it going and then people can keep that 5 000 contribution going and you know it doesn't mean we take away exactly retirement benefits that are owed to current social security recipients but sunsetted but at a certain point you could just say that hey the next generation is going to be on this platform rather than the old one and it would be a lot better a lot more efficient than government not running it right saxon yeah we don't want the government running this let me ask you a question about this brad because i do see one thing that people say which is what if your kid turns 18 and then they just want to blow the money you know yeah how do you trust how do you trust that they're going to put it to good use you know as opposed to i don't know you know yolo yolo and whatever as you know these things are always political trade-offs and balances and i wanted them to have to compound until they were 30 right because i figured by 30 you were a little bit more you had a mature uh mentally uh developed on on financial issues but you know the argument ultimately came you're old enough to vote you're old enough to fight a war if if by 18 we don't allow you to have control of your own money so that's where a political you know uh consensus was built david but the other thing remember is they can only take up to 25 out to buy a home start a business go to college the rest rolls into an ira and there are built-in penalties for early withdrawal in an ira so they're disincentives for people to pull out but let's be clear we have to do a much better job in our education our public education system leveraging this as the platform you know if a kid doesn't have any money it's hard to get excited about learning about money but if a kid's in the game and has 12 000 bucks in the seventh grade now you got my attention i own a little bit of nike i own a little bit of apple i own a little bit of nvidia let's talk about that how did it get there how did it compound if i added 50 bucks a month what does it turn into all of these things will now be present on every child's phone in america 37 states require financial literacy every state should build this into the curriculum we're working with a lot of states on that you know we haven't talked about that we have about 25 states who are going to add money into the accounts of the kids in their states so the states are going to do it states state action oklahoma west virginia you know indiana etc so that's also sweeping the country where the states are looking at programs they already have where they're spending money for kids that are ineffective and they're saying instead of continuing to spend money on these things that aren't working why not just block grant the money directly to the kids because we got the middleman yeah if you give the kids the money more likely to graduate more likely to you know to buy a home start a business etc so i think that we're as i said in in the oval this is day one and i am fully committed to the next decade as is my partner in crime on this michael and susan dell i appreciate your guys's comments on on on the legacy of this it has been the most profound work and kind of honor of my life and standing in the oval office with my two sons who are really my two co-founders on this we draft you know we made the sketch of this at our kitchen table in the in the fall of 2020 that's where the conversation started lincoln's been with me in every single meeting with every congressman senator president former president etc the president shouted him out uh you know again when we were there that journey as a father with my kids amazing has been like the payback has been really extraordinary the other thing that's notable here and again like you got to call balls and strikes and give credit where credit is due joe jebbia joined this administration a lot of people in the tech industry are like oh you know oh you joined the trump administration whatever yes okay there's some criticism he's an incredible world-class designer i was talking to producer nick our producer here also happens to show the same last name as me he signed up for this right he's doing well but you know his wife signed up for it the software is fantastic let's pause for a second um the american government has made exceptional software and this all got done in trump's first 18 months immense credit for this this is like of all the you know challenges this presidency has had and ran war and other issues we made great software the american government because of joe jebbia makes kick ass software like just also major shout out to him and you know he could be doing whatever he wants he's you know he's done incredibly well as the co-founder of airbnb and he's doing this like that that's a real patriotic thing to do i i'm just over the moon with this i think it's fantastic the dream team you had like michael dell myself vlad tennis joe gabia the treasury secretary luke pettit at the treasury talking basically every day for the last year and our objective was not we want to build the best thing that that the government's ever launched we wanted to build one of the best consumer products period that's ever been launched mission account there's any silicon valley consumer company would be thrilled with the numbers that we're seeing the ratings that we're seeing the engagement that we're seeing so you know it's been fun doing it with that incredible team and you know everybody's in this for the right mission as well and so i agree with you jason it's rare that government recruits or embraces uh you know that that that mission and i think the tent's getting a heck of a lot bigger it is bipartisan it's bipartisan in support you know this is important what governor uh uh more from maryland said yesterday he said republicans and democrats have been trying to do something that looks like this feels like this for 40 years this guy got it done give him credit this is great for america great for our kids and especially on the 250th anniversary you know you're standing in the oval office looking at the original declaration of independence and you realize what people laid down for this experiment and then i i read this chatter in my feeds about mandami and others literally wanting to set this great experiment on fire yeah right wanting to burn the place down because they they think they have a better formula no the answer is evolving and doubling down on the formula that has worked for 250 years and rather than making all these kids socialists we get them all into the game of capitalism they become owners owners and shareholders in america so that's what we got accomplished and uh appreciate the chance to talk about it listen incredible brad and um you know just amazing to watch you do it and if you if you if you if you really think about it the tech industry it needs to win and capitalists and creators and the makers the people who build stuff this is our chance to say here's an example of something that helps the people at the bottom right and i talked a bunch about um the minimum wage here we got seven dollar minimum wage like we need to address that as well these are the things that if we address what people are scared about what people who are who don't have what we all have here uh if we have empathy for those people and we actually care about them when we give them a path to believe in the american dream they will take that path 100 we have to give them a better path than these socialist lunatics and this is so much of a better path let's do it again let's do another one of these things let's keep growing this spirit of getting everybody in the country to have equity uh in these great companies that's that's why the entire world is trying to replicate what we do here every single country i go to wants to recreate silicon valley well we're not we're not stopping here and um david to your point where you know whether it's the ai companies uh or frankly whether it's the intel shares or whether it's the tick tock fee i now have a place where all of those wins achieved by this administration can go they ought to go directly to all the citizens you know the country into their accounts and compound for a lifetime and then as far as people over the age of 18 there's certainly a lot of talk about that as well um not again as social security is a sacred promise by both parties nobody's going to change that but there's a huge opportunity to have a supplement here why shouldn't people you know between 20 and 30 or 20 and 40 also have a trump account that they can begin on a supplemental basis adding dollars that they own and control remember the big difference between this and social security social security takes 12.4 percent of my w-2 income and puts it into something akin to the black hole of government i don't own it i don't control it if i ask a room of 3 000 people how much they've contributed they have no idea if i die i don't have title it doesn't pass to my heirs etc so it's really not mine but if we created a supplemental ira it doesn't even require new legislation i don't think it's just expanding the age these these are iras after the age of 18 right then people could start building supplemental wealth and participate in these gains and so there's a lot of conversations going on about that as well and and so we're not done but uh it was a hell of a milestone on the 250th birthday of america to ring the bell in the oval and to watch all these kids get their accounts lit up it was pretty special what i think is really cool about the trump accounts i'm i think it's an amazing philanthropic platform but in addition to that it's an amazing platform for middle class family planning that's the point i'm trying to make is all the cpas that i'm seeing talking about this are saying this is like one of the greatest things ever and if i could only tell my clients to do one thing this would be the one thing finally something for the middle class right this is what people have been asking for hey let's get something for the middle class let's get something for the you know yeah and i think the market gap correct me if i'm wrong but basically the the market gap that was created here is that you can't get an ira which is basically a tax advantage savings account until you have your first job right and get earnings which would be for most people at age 22 plus so for that first 22 years you're not in the game kids can't have an ira right correct and you're effectively giving every child at birth correct ira you know it's a trump account has certain rules it's actually better than ira better than an ira it's better than an ira because with a with an ira your employer can't contribute 2500 bucks tax-free can they i mean i don't think so and philanthropists can't contribute to it and moms and dads and but the most important thing you know like i i i say this you know buffett's like the secret is to find a really small snowball on a really long hill okay but the size of the hill in this country we've cut off the first third of the hill forever nobody saves anything until they're 25. okay the easiest compounding in the world the the easiest compounding in the world is between zero and 25. all right listen this has been amazing yeah because they're dependents frankly they're still on exactly so you you pick up the first third of life credible right in compounding and so it's a it's really remarkable let's go uh i mean amazing job all right we'll see you all next time bye