SPEAKER_01: What's the story with the California Wealth Tax? Can somebody explain this to me?

SPEAKER_00: Okay, so the SEIU, the Service Employees Union, filed a ballot initiative, which means a direct-to-voter vote to amend the California Constitution to introduce a one-time billionaire's wealth tax, where billionaires, anyone who has assets over a billion dollars, net of their debt, has to pay a one-time tax

SPEAKER_02: of 5% of their net worth, including their private stock, including their real estate. You said 5%?

SPEAKER_03: 5% of their net worth.

SPEAKER_04: Not of their income, of their net worth. The entire net worth, one-time payment to the state of California, and then there's an allocation on how that money will be spent,

SPEAKER_00: but it's a one-time billionaire tax. Now, it is very likely that this sort of an amendment to the California Constitution is not constitutional and actually cannot be made and will not actually go into enforcement, even if the voters do vote to approve it, in both a federal and a state level, based on this concept of uniformity, which is that you have to tax everyone equally, except for the case of an excise tax, which is like income or a transaction. You're allowed to tax disproportionately based on the size of the income or the size of the transaction. But if you're going to tax on property, if you're going to tax on an asset, you have to tax everyone uniformly. So it is likely not going to go into effect if it does pass. However, it is very likely the case that the SEIU is simply using this as a baiting mechanism to get people to stand up and denounce it, and then they will be in a position to attack those people and destroy them and use this effectively as a political fodder for this next election cycle. That's what it seems like the true kind of motivation.

SPEAKER_07: Let me go on the record. I think this law is great.

SPEAKER_09: He's getting the virtue signaling points. I would just like to say, may I be the first to pay 5%?

SPEAKER_12: I'll be in the front of the line. Let me know when to show up. I'll bring my check.

SPEAKER_14: Who do I sign the check towards? Should I bring cash, Gavin? Would you bring cash to your...

SPEAKER_16: Which one of your mansions should I bring the cash to, Gavin?

SPEAKER_19: This is strategically why, Chamath, I'm glad I got out of California right before I was about to billionize. That was a smart move on my part.

SPEAKER_22: Freebird, what are the odds that this goes into effect? Can you just handicap this?

SPEAKER_02: Yeah, well, we don't know who's going to come out against it,

SPEAKER_00: but there's an effort to try and get top Democrat officials in the state of California to say, this is silly. If you do this, people will leave the state, yada, yada. So that's kind of a quiet, underway effort. But I don't know why the citizens of California, the majority of citizens of California, would not vote for this. Who wouldn't want to tax the billionaires 5%? Come on, like, let's do it.

SPEAKER_28: The way that it's written, it says, hey guys, we're 30 billion in the hole and there are 200 Californians that control two trillion dollars. We're just going to ask them to pay a one-time fee of 5%.

SPEAKER_32: Yep. And I don't see how anybody would say, hmm, that doesn't sound unreasonable at the ballot box. Right.

SPEAKER_04: And then the people that step up against it and are vocal against it and point out like, hey, in France, when they did this, they lost like 40% of their revenue because all the wealth left the country.

SPEAKER_37: The reality is that this sets it up to go through the legislature because if it goes through the will of the people

SPEAKER_28: and it gets overturned, as you say, Freiberg, then if you're legislatively smart, then you'll actually push it through the state Senate.

SPEAKER_39: Oh, but don't you remember they did this in 2024?

SPEAKER_28: No, no, no, and then it will not get vetoed. Because then it's like, hey, listen, it's clear that the people want this. So I think that you'll have some kind of progressive taxation system that conforms to the law. I mean, the one,

SPEAKER_04: they're already trying to extend Prop 55, which is the progressive tax for people making over a million dollars.

SPEAKER_02: They're going to get that passed. That's going to be this incremental tax on income. But the one-time wealth tax-

SPEAKER_32: I think the million dollars thing, I think that's harder to hunt because there's too many people that that touches. A million dollars today in 2025,

Chamath Palihapitiya: not to be glib, it's just not what it used to be. But a billion dollars does cut off most people except for a couple of hundred. That is true. And I think that, for example, it's very reasonable to then charge a 10% excise tax on selling appreciated stock. Right. Why not? There's all kinds of ways that you can get billions and billions and billions of dollars. So I don't know. I think that this is more of a trial balloon to say, can we draw a clear line between 200 Californians and the rest of California? Yeah. And to the extent that that bright line

SPEAKER_32: becomes visible and it's okay, people are going to go ham. They're going to try to get as much as they can.

SPEAKER_02: The reality is, as we all know, I mean,

SPEAKER_00: Larry Ellison left the state. Many of the founder CEOs who have built large technology companies in California, Elon left the state, will eventually at some point break and say, okay, I'm moving my company out of state. And I'm leaving the state and I'm bringing the employees with me and I'm bringing all of the economic value to this business with me. And people will never learn that lesson because it's so much easier to sit in front of a voter and say, hey, should we tax these 200 people to give you better benefits? 97% of people will say, absolutely. Very few people will sit and think about the consequences of what's going to end up happening.

SPEAKER_32: 99.9% will say, absolutely. I mean, nobody tells them in that ballot initiative

SPEAKER_53: that we have a $300 billion budget of which two thirds may be just wasted.

SPEAKER_00: One of the motivations for this bill and this is why it's being proposed by the SEIU is that there are these massively ballooning pension benefits and pretty significant increases to the pension programs for both private and public pension funds in California, which has actually become a very visible liability for the state and for some of these private pension programs. And they're trying to fill the pension hole, which we've talked about in the past, but there is a multi-trillion dollar unaccounted for pension liability in this country that's going to have to come from somewhere. You're either going to have to print the money because the federal government is going to step in and fill the hole in all these pension obligations or they're going to have these massively progressive tax programs to try and fill the hole. And if and when they do, as we all know, there will be an economic cycle that will be pretty nasty, which is all the value will leave that jurisdiction and move elsewhere. But let's see.

David Sacks: It's like the Democrats are doing everything they can to get me to leave the state.

SPEAKER_59: I don't want to. I really am resisting.

SPEAKER_25: I mean, they've raised

SPEAKER_61: I've been boiling the frog. I still haven't jumped out of the pot. But for me, I think the wealth tax, I'm going to have to jump out of the pot with this.

SPEAKER_28: The crazy thing with this, the other, like I read it because I was like, oh my God, what's going on? The two things that they, they obviously got somebody very clever to draft it

Chamath Palihapitiya: because any Roth IRA over 10 million counts and normally in these wealth calculations, you keep your deferred retirement accounts off the table. They're typically not included. So folks, and I'm not going to say who they are. We all know have tremendously appreciated Roth IRAs. Pretty publicly you're talking about, but sure. Those are included. And then the other thing is that if you actually did any tax structuring, the real valuable tax structuring is where you set up these trusts in Wyoming and North Dakota and you do these inter-party loans where you can lever up 10, 20 X so you can transfer billions and billions and billions of dollars out of state, but then you have these obligations. Those are negated and they don't count. So all that tax structuring goes out the window. So you can get into a very difficult situation here where they're like, hey, you owe us $500 million, a billion dollars, $2 billion, and the only way to pay it is to give an IOU to the state of California,

SPEAKER_53: which is crazy. It's crazy. There is not a lot of ways out of this if this stands.

SPEAKER_68: No one is empathetic to either of you. No one gives a shit about the two of you needing to pay more taxes. This is why I'm in support. Again, I'm just saying it for the record.

SPEAKER_71: I am in deep support.

SPEAKER_25: I had a few more thoughts about this thing, which I want to unpack. Number one is, like you guys said, a wealth tax has been tried in many places at many times. It always backfires

SPEAKER_61: because whatever the tax benefit is that you get for the state, it's greatly outweighed by the economic depression that you get by the wealthy people, the job creators, companies leaving. As soon as you cross that line of going from no wealth tax to any wealth tax, enough people of wealth can see the tea leaves. They can see the writing on the wall that they have to leave. That's why I think even if they say this is a one-time thing, we all know that it won't be one time. If they get away with it, it'll become a regular thing. Of course.

SPEAKER_76: If it's to plug a deficit, they're going to run deficits every year. Exactly.

SPEAKER_61: And you're right. And this isn't even to plug an emergency situation or an unfunded liability like some one-time thing. No, it's mismanagement. Exactly. It's just regular mismanagement.

SPEAKER_25: So they will have no incentive to fix their mismanagement of the state and their deficits and all that kind of stuff. By the way, by the way,

SPEAKER_32: if they get away with this. And it's not just going to be billionaires. Eventually, the line will get pushed down. Of course. The billionaires will be gone. The billionaires will be gone.

SPEAKER_04: Like the income tax in the U.S., I think it was a 1%

SPEAKER_00: income tax originally. And it was like just a one-time thing for wealthy people. And then it became a smaller thing for, you know, lower income people. And then eventually, as we all know, every person has to pay a tax. Every property has tax and so on. I mean, these are, this is the problem with government.

Chamath Palihapitiya: There's all these other states, by the way, that are finding clever ways. I think in Montana now, there's a differential property tax scheme

SPEAKER_83: where if it's your second or third home and you don't live there, you pay a lot more.

SPEAKER_77: Yeah. Here's what I wonder about is, you know, what are guys like

SPEAKER_25: Jeffrey Katzenberg or even Ari Emanuel thinking about right now? Because they're kind of the higher-ups in the Democratic Party behind the machine. It's sort of the oligopoly that kind of runs the machine.

SPEAKER_61: And I remember that when Karen Bass was running against Rick Caruso for mayor of L.A., it was very publicly reported that Katzenberg was behind Karen Bass. And there was sort of an imbroglio between Caruso and Katzenberg. Katzenberg, anyway, helped make sure that Karen Bass was well-funded enough to win. The result of that, ironically, was that Pacific Palisades burned down. And I think Katzenberg's house might have been part of that. In any event, I think there are these guys who are very, very wealthy who think that they can control the machine well enough that they basically are still in control of this thing, right? That, in other words, that the tiger won't eat them, right? The tiger is socialism.

SPEAKER_89: That's exactly right.

SPEAKER_61: And they think they've got the tiger under control enough that it won't eat them. But I don't think they do. Maybe they don't. Maybe this is the tiger breaking loose. Yep. And I think, Ferber, you pointed this out that there was an attempt in the legislature last year to pass a wealth tax and it was quietly killed behind the scenes. And I actually think that Gavin Newsom might have something to do with that because he has presidential ambitions so he can't let the state go full socialist. But you just kind of wonder, okay, well, if these guys lose control of the strings they have to control the beast of socialism, does the whole thing just spin out of control?

SPEAKER_90: That's New York. We're seeing it everywhere. Seattle. It's all over.

SPEAKER_93: Let's talk about it. Well, and just to let people know about the France situation

SPEAKER_16: back in, I don't know, 2011, 2012, they did get rid of Gerard Depardieu, which was kind of a win. But Bernard... Arnault. What's his name? Thank you, Sax.

SPEAKER_96: Bernard Arnault, is that his name from LVMH, Sax? Bernard Arnault said he was going to go to Belgium and then said

David Friedberg: it was a clerical error and then he unwound it. But that was a clear signal, the richest man in France. Well, he's the founder...

SPEAKER_100: Then we go to New York. He's basically the entrepreneur who put LVMH together.

SPEAKER_61: I mean, it's their biggest company. It's the one that does all the luxury goods, all the craft goods

SPEAKER_103: that they're so famous for. I mean, yes, him threatening to leave France is, you know,

SPEAKER_104: accidentally filing paperwork. Oops, what an accident.

SPEAKER_105: Here's your look at New York City under Mondami who we're in touch with. You may come on the program.

SPEAKER_106: New York State tax, 10.9%, city 3.876%, and the 2% Mondami tax puts you at 16.8%.

SPEAKER_105: For living in New York, it's 17%. And I mean, if you were making $10 million a year, is it worth $1.7 million? You could get a plane. You could live in Florida. You could come to New York 150 days a year.

SPEAKER_107: There's really five good months in New York, the fall, the spring. And that's about it. You know, you go see the tree at Christmas, but it's cold.

SPEAKER_83: Well, that's not realistic for most people. And especially if you have kids and you care about them, you'd like them to be rooted somewhere. You're not going to schlep them around every month

SPEAKER_16: and you're going to test that at 17%. That's non-de minimis.

SPEAKER_24: Okay. We've got a lot of docket to get through here. I'm so glad Jamal supports the billionaire's tax.

SPEAKER_116: That's great. We'll get that in the headlines this week. Right after all this facts.

SPEAKER_77: This is the free rider problem that we have is no one's going to want to stand up against it and the thing will just kind of pass. I think we know that. By the way,

SPEAKER_119: if you're a billionaire CEO

SPEAKER_04: of a public company in California, No, they're superhosed. You have everything to lose to stand up and oppose it. Superhosed. Your employees will run. Your shareholders will attack you. You'll look awful in PR. So everyone's going to sit quietly and start looking at houses on Zillow in Austin or Miami and be like, where should we move to next year, honey? You know, like that's the conversation that's going on. How long did we have to get out, Freiburg?

SPEAKER_124: Didn't you say it was retroactive?

SPEAKER_121: It's retroactive to 2026. So if it passes- So you have three months.

SPEAKER_124: You have three months.

SPEAKER_68: Two months, yeah. But again, I don't think it passes muster with the constitutional reads. Yeah, but you know what?

SPEAKER_61: That's what they said about, remember when they did the transfer tax where San Francisco took 6% of my home

SPEAKER_25: and then in LA just took 5% of my house down there, the supposed mansion tax.

SPEAKER_04: But those were excise taxes. So if you go back to the case history in the U.S. Supreme Court on this stuff,

SPEAKER_29: anytime there's a transaction and you take a tax on a transaction, they call that an excise tax. Well, you know,

SPEAKER_07: there's a part of the bill that they could cleverly use, which is called this ODA, which is effectively this IOU mechanism.

Chamath Palihapitiya: And they could essentially say when these assets transact, you owe us 5% on an excise basis. And by the way, there's an attestation that you have to file. You have to file a legal document. And this was quite well written in there, which said, you must attest that you have less than a billion dollars. Okay. Now what? Okay, then I have to attest that it's more. And then I have to now...

SPEAKER_140: How do you even mark your whole portfolio to market

Chamath Palihapitiya: if you're in a lot of privates? They do not allow discounts. They do not allow liquidity discounts. It says, if you are a reasonable buyer and a reasonable seller, you have to transact this at market price. So for example, imagine you owned a sports franchise and the sports franchise, if you sell a minority share, you're typically selling it at a discount.

SPEAKER_28: Off the table, if Forbes says it's worth 10 billion and you own 10%, that's a billion dollars for the purposes of this calculation.

SPEAKER_143: I'm going to pay $50 million to keep it even if you paid $50 million to buy it.

SPEAKER_25: Even if Freiberg is right that there's a good chance that it will be found unconstitutional, how many years in the course is that going to take and who's going to stick around waiting for that? In fact,

SPEAKER_61: the rational thing to do is pull up stakes before January 1st and leave right now. That's right.

SPEAKER_19: That's going to happen in New York. I mean, I think they're going to have an exodus just like New Jersey and Connecticut did

SPEAKER_16: and that actually rocked the tax base in those two geographies. All right, listen, big breaking news this morning.

SPEAKER_105: Huge scandal in the NBA. The FBI just arrested 30 people in a sports betting and gambling probe. This hardly seems real. Chauncey Billups, who is the current Blazers coach and was just introduced into the Hall of Fame, got pinched for a poker game he was running allegedly with the mafia that was rigged 17 different ways allegedly to Sunday. Terry Rozier, allegedly,

SPEAKER_150: is a point guard from the Miami Heat. Why are you saying allegedly all the time? You know, everybody's suing these days so allegedly he's a point guard. I've seen him play. He's not a very good point guard. It's a lot of turnovers if I'm being honest.

Chamath Palihapitiya: You know what I know is alleged that you're the world's greatest moderator.

SPEAKER_153: That's allegedly true. It's allegedly true. Because it's not true. You're allegedly a billionaire. Nobody can confirm it.

SPEAKER_77: Normally, he uses the word allegedly when it's a story that like it's about Hunter Biden or doing something improper. Yes,

SPEAKER_156: he allegedly smoked crack and shot a nine millimeter in the air.

SPEAKER_77: It's usually a story about a Democrat wrongdoing and he's trying to discredit it.

SPEAKER_150: All right, here we go.

SPEAKER_77: Anyway, keep going.

SPEAKER_150: Terry Rozier, who's allegedly a point guard. I mean, he was, he told his friends, this is crazy, you know, in the over-unders, you know, hey, guys, bet the under on me in rebounds because I'm going to take myself out of the game with an injury, allegedly, and his friends allegedly made 200 grand off this. Okay, just allegedly for the whole goddamn thing. This is going across 11 states and a bunch of crime families.

SPEAKER_105: Allegedly, there's something called the mob. I don't think that really exists anymore. I think that's an urban legend. And these are two separate threads but announced on the same day.

SPEAKER_16: They both involve NBA players, but apparently this is two different cases. So, Chamath,

SPEAKER_24: what do you allegedly think of this?

SPEAKER_28: I think it's crazy. I think you're seeing a lot of these trends converge all at the same time, meaning you have the emergence of all of these prediction markets. You have a lot of data science and AI being used that shows that there's a lot of odd behaviors. So, it really was the squares versus the sharps. And if you had the inside edge, you were just printing money. Now that all of that is becoming more transparent, there's a lot less margin. Then what happens is you have these laws passed in the 11th hour. There was an important gambling law that was inserted into the big beautiful bill that has implications to all of this.

Chamath Palihapitiya: And now you're seeing

SPEAKER_07: the feds. The crazy thing to me is a press conference where Cash Patel is talking about this. I mean, that's like serious business when the FBI director is front and center talking about all this. So, I don't really know

SPEAKER_28: the feds. I thought this is pretty typical ticky-tacky stuff, but clearly there's something bigger. I don't know exactly what that bigger is, but something is happening where all these markets are smashing together. There's just a big cleanup effort going on. So, I don't know. I really don't know.

SPEAKER_16: I guess there's two different ways to go about this. You have the fantasy sports becoming legal, everybody around these players just in that one case

SPEAKER_105: where are these people too dumb to understand that their $10 million contract to play in the NBA every year or $20 million contract is more important than your friends betting the under or over? And how dumb are they? I mean, to not know that the people running a sports book would look for weird action. Like, why is one player getting $200,000 on their over-under for rebounds and the you can also take on the poker one.

SPEAKER_02: I think gambling generally, as we call it, should be

SPEAKER_00: decriminalized. And I don't like this state-by-state setup with gambling. I think we should have a federal regulatory body to oversee monitor. And the problem is you have state gambling commissions and we have a state-by-state kind of patchwork of regulatory authority that makes it very hard to standardize crack and provide also guidance and feedback. I would much rather see this all get handled at the federal level and better organized. To Chamath's point, this is not going away. People love to bet on stuff. They love to gamble.

SPEAKER_166: This is part of sports. This is

Chamath Palihapitiya: unbelievable and you can see by the way the way that DraftKings and FanDuel stock have reacted to this. Those companies are toast. Toast. That's right. This is really

SPEAKER_121: interesting. The poly

SPEAKER_04: market model is the best model because it creates a market. And so as information flows in that market will dynamically adjust and

SPEAKER_90: everyone will get a more fair price.

SPEAKER_171: Did you see the regression that they did on the poly market trades and how well they're in the money? Yeah. Yeah. Nick, can

Chamath Palihapitiya: you find that? But basically what it showed is like the front money is the sharps, the back money are the squares, but you have to fade the trade in the first week. So there's a very

David Friedberg: scientific method where if you want to make money on poly market it became pretty clear. There's two things that are very interesting about it is number

SPEAKER_16: one how they've simplified things to a way people can understand. It's not like you have to understand it's 120 it's this the point spread it's just what's the chance that this thing happens 80% 20% people could just place their money on it and then this ability to reconcile it at any time I didn't realize how

SPEAKER_105: engaging that is I was watching the Oscars and I was watching boxing and I bet the underdog in this Netflix boxing thing that happened because I just thought this guy looks pretty pissed off and I thought that was a good enough way to go with the underdog and then you watch it round after round and you see the odds changing real time and any time you can just cover the bat and take your winnings and take out the risk really like interesting and fun for people it's so simple and then I did it

SPEAKER_14: this

Chamath Palihapitiya: is incredibly systematic this is over many many many markets but basically 89% accurate one week out but in the final four hours it jumps to 95 which means that if you follow the sharps along this pattern you're going to make money 6%

SPEAKER_176: in a week

SPEAKER_175: yeah right Polymarket actually has the news before the news does and

SPEAKER_00: this is one of the most like powerful outputs of poly market is they're actually getting a read on what's going on in the world before the media recognizes it before the public recognizes it when you put money up it actually turns out that when people have incentives that market will find the truth

SPEAKER_37: somebody needs to build the app that makes all of

Chamath Palihapitiya: these things fungible and reason to go to nine different sites and have nine different accounts and the most important thing is to do KYC and AML across nine sites to get access to liquidity credit margin you'll want to do it once and then you'll want to have a large pool of capital that you

SPEAKER_175: I think if we end up there

SPEAKER_00: where poly market does become the truly liquid market across all of these kind of predictions all of these assets then a lot of what we are seeing with respect to insider trading insider information becomes much more apparent so the problem with the sports betting is that there's a one sided bet the casino sets the odds or you know whomever is setting the odds and then you either taking one side or the other and so if you have the insider information you're taking the side that creates an arbitrage opportunity for you but if you were to do that in a liquid market where there's someone taking the other side in a dynamic way then the market very quickly moves because of the inside knowledge you have and that inside knowledge is now reflected in the underlying asset price in the underlying odds that you get for that bet and so poly market actually brings truth and transparency to

SPEAKER_16: a rigged game or not living in LA I got invited to a lot of poker games when I was playing low stakes playing at Hollywood Park just you know $500 buy in $1,000

SPEAKER_105: buy in but as these things went up you started to get access and I was just like this game is fixed I don't know how totally but somebody's I think it's just collusion I think there's three players all playing from the same chip stack in which case you could be dealt aces five times in a row if you're up against three players what are your odds against you know

SPEAKER_188: six other cards it's going to

SPEAKER_105: possibilities happen once it gets to extremely high stakes and you've got guys chasing it man you could you

SPEAKER_28: respectable reputable businessmen that have more to lose than you do

SPEAKER_32: and if you can't find that game you should not be playing in

SPEAKER_28: where you can you know go off for a small house in is also the game where he would then collect ten dollars from each of us to pay for the fruit plate and the pizza he would order dominoes thin crust

SPEAKER_198: wouldn't even buy us pizza yeah literally

SPEAKER_199: but I'm like I don't know if the chef really does cost six thousand dollars for two hours bro I don't

SPEAKER_200: know it's I think it's a Wagyu burger the

SPEAKER_150: funniest ever was he's like in a hand and the dominoes pizza comes and you know he's like everybody have a green chip when we're playing with five chips he's trying to get like 125 bucks the guy comes I

SPEAKER_188: here's the

SPEAKER_204: receipt

SPEAKER_203: so what you're saying is when it's on somebody else's credit card you're willing to tip incredibly generously I mean you're a really great guy

SPEAKER_150: you should speak when Phil Helmuth and I bought dinner for everybody at Cipriani that time Chamop grabs the check he goes I'll put the tip in for you guys

SPEAKER_208: well why is that Jason is that because you put a

SPEAKER_150: hundred percent

SPEAKER_188: tip on an $8,000 check

SPEAKER_07: isn't that

SPEAKER_212: tips yeah I

SPEAKER_213: think he's you know he's average tip

SPEAKER_215: let's go to the next topic world's greatest moderator let's

SPEAKER_16: talk about this Amazon outage tough week for Amazon they had this huge outage in the beginning of the week and then they had a bunch of leaked documents about their hours and then on Tuesday internal docs viewed by the New York Times showed Amazon plans to not hire 600,000 plan jobs because of robots by 2033 so this isn't they're planning on laying off 600,000 workers but rather they're just pulling back their hiring plans and ramping up their robotic plans which you would expect and their 25% of warehouse operations we talked about this the last couple of weeks Freeberg your thoughts on either of these two stories here

SPEAKER_04: I think the AWS story is

SPEAKER_00: interesting in terms of its implications for the clouds there's effectively three major cloud vendors that compete with one another AWS Microsoft and GCP or Google Cloud and I'll just give you the Oracle also

SPEAKER_222: by the way coming on strong yeah

SPEAKER_00: that's Microsoft 120 billion and Google Cloud 54 billion but AWS which is slightly larger than Microsoft is only growing 17% year over year Microsoft 26% year over year and Google Cloud is accelerating at 32% year over year and some say getting closer to 40% growth rate the big thing I hear from partners and enterprise customers of these cloud services is that many of them if not all of them as they scale up move to a multi cloud model so none of them want to be dependent on a single cloud many folks started on AWS because AWS was the OG back in the day when I was running Climate Corp I was the largest EC2 EC2 user in AWS for about a year and a half which was their elastic compute cloud service we were running all these models back then so I knew that service very early on it was very unique it was beneficial situation for Microsoft and GCP and tier point jacal perhaps even Oracle in terms of giving those sales teams which are very aggressive a hard story to go and sell for and say guys you don't want to just sit on AWS in case this happens again we've got better infrastructure we're more reliable etc than these other guys so come and move over to us and that might be a

SPEAKER_186: another kind of moment of acceleration for those folks and

SPEAKER_16: multi cloud it's been around for a while Chamath when you're doing stuff with 80 90 are the big companies already doing that or do they assume hey there's going to be some downtime yeah it's okay to risk or are

SPEAKER_28: everybody has everything it all looks effectively the same there's certain products and services that are unique to

Chamath Palihapitiya: Azure versus GCP versus AWS but by and large the market is big enough and important enough that you'd have to be pretty insane to take a single vendor approach and so what typically happens in these markets is that they start off really small one person has all the share and then as the market becomes very valuable and very big everybody diversifies because it's a risk management thing and these things flow into the disclosures you have to make as a public company and if you didn't have that diversification and something bad happened and it impacted your business you could get sued so there's all these reasons why eventually all these three big companies will converge effectively roughly

SPEAKER_32: a third a third a third we're going to debate the path to get there but that's where they'll end up you know

SPEAKER_00: there's this principle called the rule of three where they say like all markets eventually mature to kind of a 60-30-10 split that you end up having your market leader at 60% market share second place is usually half the size at 30 and then you always there's some balance in the market where there's some competitor that resolves to about a 10% it's really interesting if you guys were to place a bet who would you think is the 60-30-10 I don't think

SPEAKER_28: that applies here I think that's bull

SPEAKER_00: you think they're gonna be a third a third a third

SPEAKER_28: I think it's all some idiot making something up

SPEAKER_00: but what do you think what do you think happens in cloud like do you think that these all converge to equal market share

SPEAKER_07: in non-AI it's a third a third a third it will it'll take circuitous paths but that's where we'll end up

SPEAKER_00: by the way a good point to make is that this revenue number that I highlighted for Google Cloud Microsoft and Amazon actually include their applications so as you know like Microsoft GCP have pretty sizable enterprise application stacks that are built into that number which gives them obviously the ability to drive

SPEAKER_233: cloud usage because they've got demand and sales relationships into those enterprises I think

SPEAKER_28: the way it works in AI is that you initially right now we're in this early phase where there's two paths path one is you need a specific model and the hyperscalers but eventually you'll get more of that abstracted away as it gets pushed into the infrastructure so that you have less dependence on one model there's a lot of work that has to get done and a lot

Chamath Palihapitiya: of in-memory infrastructure that is not yet built that has to exist but once that exists it'll be easier for all of us at the application level to view these models a little bit more fungibly and then at the bleeding edge you'll have the folks that basically give you some form of a hypervisor or virtual machine or the bare metal and that's where the neoscalers are doing really well but I think my point is that in any important market in compute in technology where there really isn't much of a differentiation I think you'll end up with these hyperscalers

SPEAKER_168: at a third a third

Chamath Palihapitiya: a third now if one model is way way better and it's only on one of the clouds because Google writes a big check or Amazon writes a big check I could

SPEAKER_28: see that swaying the AI share but in the absence of that I think cheaper faster better is sort of the end destination

SPEAKER_31: for everybody

SPEAKER_93: what an extraordinary outcome for Amazon where AWS is like 15% of

SPEAKER_16: their revenue right now Freiburg but it's 60% of their profits today and that was just a side hustle like a little project they took out of nowhere and it's it's having the same impact on Google and other places so side bets and side quests are just you look at the Waymo side quest for Google or even a lot of Sergey's other bets like and Larry flying cars looms low earth satellites Google fiber all those

SPEAKER_12: X projects were so had so much potential and they see you deep mine tensorflow GFS robotics it's pretty

SPEAKER_105: Boston robotics they bought all those robotics companies man it's like somebody got to them and were like yeah you know you're seven eight years into this it didn't

SPEAKER_32: happen the problem that

SPEAKER_28: Google has unfortunately is like they have so really value and so they're going to go through the same problem that everybody else who's a conglomerate has which is this decision now Buffett when he got to that decision said I don't care this is my life's work and so I'm just going to keep everything aggregated

Chamath Palihapitiya: but now you're going to get to this thing where the intrinsic value of everything they have will far exceed the actual value that it trades at and so there will always be these fissures of pressure and then if one of these things requires a lot of money there'll be pressure and that pressure will be segregate these things so that I can own one versus the other and that's always the thing that happens in public markets is you go you kind of swing back and forth so I suspect that this is going to happen at Google

SPEAKER_04: this was what they set up to do with alphabet was to be the holding company

SPEAKER_00: and

SPEAKER_04: then to your

SPEAKER_00: point they made that evolution particularly in a company like Waymo where they said we can't be the sole funder they brought in Silverlake they brought in all these other investors they did this actually with Verily they did this with a bunch of what they call other bets is they made the conscious decision because Chamath on the flip side by bringing in outside capital and having an independent board for these subsidiaries they were actually able to drive better outcomes because now there was governance and there was aligned interests that could then take management and

SPEAKER_166: say guys if you can deliver these results and you have this kind of external pressure as opposed to the softness

Chamath Palihapitiya: but it's that it's something else there's no way somebody as smart as Silver Lake comes in if they think there's not a path to liquidity so the other thing they have to promise is they're like listen we will take this company public and in return you will help us build a better company than everybody that committed capital into that company

SPEAKER_242: of course yeah way more going public would

SPEAKER_243: be unbelievable next year man if they did that what would that look like in the public markets $250 billion $100 billion

SPEAKER_245: take it easy stop don't don't don't don't do you don't think so I think it'd be huge

SPEAKER_04: Jason we all objected to talking yet again about AI driven job loss yet you insisted on putting this AI robot

SPEAKER_68: story from Amazon in I think you have something to say thanks

SPEAKER_249: let me take you through a presentation well done you

SPEAKER_101: have slides no I've been just I am working on a presentation based on a lot of stuff we've been talking about here I threaded it together you know I talked we're just

SPEAKER_16: talking about Google and the size of I just wanted to point out a couple of things it's not just that they're not hiring these 600,000

SPEAKER_105: jobs it's that they are in full blown crisis preparation for this they have crisis teams writing up how to handle this and be a good corporate citizen and they're talking about having parades and paying for toys for tots and they're even trying to get the executives to say and when you look at this just to open up the aperture here right now Walmart and Amazon are the number one and two employers in the US 2.1 million people work at Walmart over a million at Amazon and 3 million people as we know work in taxis Uber door dashers all those jobs are at risk and we talked about this back in June when using AI extensively across the company they believe that they're going to have significant job displacement let's just use the more neutral term here as opposed to job loss or not hiring and when you look I don't know if you saw today there were a bunch of MAGA people saying like oh these interlopers and the MAGA movement are not taking into account the bottom half of the MAGA movement the workers people don't own equities and when we look at electricity spiking you were on that story last week Chamath or maybe it was even two weeks ago now the energy department just said electricity costs for residential are going to go up 4.8 percent this winter and this is going to start this anti AI boom

SPEAKER_16: counter and I tweeted about this and I thought I would maybe end here to my tweet and said AI and robotics replace all jobs working will be optional like growing your own vegetables instead of buying them from the store and Senator Bernie Sanders came out and said I don't often agree with Elon Musk but I Friberg which is the rise of socialism these things and Bernie Sanders being the standard bearer

SPEAKER_105: for democratic socialism these things are starting to come together they're starting in people's minds whether it's the original MAGA guy saying well what's going to happen for American

SPEAKER_16: workers right we know that the Trump 2.0 agenda is doing great AI build out crypto all this great stuff trade but the bottom half that you keep talking

SPEAKER_105: about Friberg is starting to connect on this issue I

SPEAKER_90: think that you are characterizing AI automation and

SPEAKER_00: technological progress as the core driver of the socialist influence and what I would argue is that the actual core driver of the socialist influence is the fact that we put in place a lot of people into government passed a lot of laws that caused an increase in spending because government would do more for them over the last 40 years that is not possible in a true market based system oh I

SPEAKER_255: agree with that yeah I agree with and

SPEAKER_00: so by telling everyone hey we're going to make sure you get better jobs we're going to make sure you all get housing we're going to make sure you get education you cannot actually get a government to effectively do that because

SPEAKER_04: of the socialist movement

SPEAKER_00: which is that government has become too big too unwieldy and its natural inefficiency has distorted markets to the point

SPEAKER_04: that there is maybe no point of return anymore and people will not see that they do not see it and they're going to look for reasons they're going to look for scapegoats and they're going to say oh my god look over there there's a robot that's the reason I'm losing my job oh my god look over there there's a rich person that works at a pharmaceutical company that's the reason I can't get health or an immigrant

SPEAKER_256: took my job right is the one from the last 20 years and

SPEAKER_04: so fundamentally I think that people aren't willing to and they're not going to see the true cause because there's no one that runs to go work as a politician that is going to raise their hand and say government is the problem no one says I need to reduce government elect me no one ever has gotten elected in a democracy doing that so the natural course of things over 250 years is that people raise their hand and they say I'm going to use the government to do it and then they go into the government they make the government bigger and as a result of making the government bigger the government is spending

SPEAKER_00: more the dollar goes down the performance of the services goes down and fundamentally we end up in a socialist spiral I

SPEAKER_19: than they did three years ago let's keep going it's

SPEAKER_61: actually not true the New York Times story doesn't even say that you've got these like hobby horses where you keep coming back to the job loss narrative the copyright narrative and then there's one story in the New York Times which was a leaked internal document from the automation department which doesn't even mean that it's going to happen this is like their sales bench the barber is trying to sell you a haircut and you read that and you're like oh it confirms everything I've been saying what the article actually says is that they've tripled their number of employees since 2018 and they're not planning on cutting jobs if it pans out if the program pans out then the rate of hiring will simply be slower

SPEAKER_19: yeah it's interesting you picked 2018 as the point because the actual peak employment there was 1.6 million in 2021 and it's now 1.55 in 2025 I

SPEAKER_268: didn't pick that

SPEAKER_61: to cherry pick it has actually been flat to down which is fine I'm quoting the New York Times article which is the source for this

SPEAKER_270: yeah

SPEAKER_61: Amazon has more than tripled since 2018 to almost 1.2 million you have to read these New York Times stories carefully because they want to make the headline as salacious as possible and then the echo chamber wants to make it even more salacious and they make it

SPEAKER_19: slightly down team size that's occurring at all these companies and it is notable and then on top of this which has occurred in the review mirror for the past five years because of COVID return to office and efficiencies they're saying hey we've got to come up with a way to frame these robots coming into the factory as a good thing so Americans don't get really upset at us and we need to buy more toys

SPEAKER_24: for tots so

SPEAKER_61: here's the problem first of all I don't I don't believe in this job loss narrative as the way that you keep portraying it I been turned into are so exaggerated and salacious and the point is they don't say in this article that they are even going to be cutting jobs they're simply planning to double their sales volume over this time period and hoping to not have to double their workforce obviously want to get a lot more operating leverage by the way this is not something that started since AI and look I'm just quoting the New York Times story which is not even the most reliable narrator for this but what they say in the story is that Amazon has been using automation for over a decade when they acquired a major company to do automation they've had robots running around these factories for a long time yeah

SPEAKER_17: 100% yeah they're the tip of the spear

SPEAKER_61: but this is just a continuation of a trend that's been going on for the last decade as opposed to oh like AI is suddenly going to cut all the jobs right it's

SPEAKER_175: effectively software you could argue software is a job loss greater you know I think

SPEAKER_19: you'd be underestimating exactly what's happened with LLMs being put into robots we've had these robots before but

SPEAKER_105: they were very purpose built as you pointed out many times they were able to do like one very simple thing very well now we're going into general robotics like the optimist like the figure and those are designed to be able to learn anything and they're going to be absolutely a game changer they're going to be able to do a hundred times a thousand times what the purpose built robots do so I think that's where we're probably

SPEAKER_24: having a little move packages around that's not an optimist going around and packing the boxes and bring them to your first step this

SPEAKER_61: is going to be really cool and when it comes it's going to be really interesting in terms of all the things it can do but right now that's a narrative for the future and it's being portrayed as something that's already happening when the current round of automation has been going on for a decade and it's based on those like Roomba type devices and mechanical arms and

SPEAKER_148: things like that

SPEAKER_280: all right Tesla reported their earnings on Wednesday as you

SPEAKER_105: stock dropped a bit 4% but bounced back and on the earnings call Elon emphasized the importance of his trillion dollar pay package which would give him just but 12% additional stake over the next 10 years if he hits absurd targets that would make everybody who holds the share shares in robot army can I just be ousted in the future I don't feel comfortable building that robot army if I don't have at least influence over it and he called Glass Lewis and ISS corporate terrorists these are the people who vote on behalf of passive index funds for things like who's on the board of Tesla vote for Elon's pay package will be number six poly

SPEAKER_16: market thinks it's going to pass as we talked about before they tend to get it right 85% of nice ones at a very nice margin but a lot of competition now and then these this business that

SPEAKER_12: obviously Elon himself is obsessed with which is the optimist as we saw when he was at the oil summit take

David Friedberg: it wherever you want I'll say three things Stan Druckenmiller

SPEAKER_28: has and what it's doing today doesn't matter the thing about earnings and P&Ls and quarterly reporting is that it's looking backwards and it's trying to give you a sense of what happened not what will happen so I think there are three critical things about what will happen that I think are important with respect to Tesla the first is at the foundational technology layer Nick I sent you this tweet but it's what he said about AI 5 I I I've made these comments before but he had these multiple efforts with Dojo and other stuff that he merged into one unit and the quote is pretty incredible we're going to focus TSMC and Samsung on AI 5 the chip design is an amazing design I have spent almost every weekend the last few months with the chip design on AI 5 by

Chamath Palihapitiya: GPU it basically is a GPU we also deleted the image signal processor this is a beautiful chip I poured so much life energy into this personally it will be a real winner why is AI 5 so important what AI 5 is is the building block of a system that I think you'll start to see not just in the cyber cabs but also in optimus so from a functional technology perspective there's been a leap and that leap is going to come into the market that was the first thing he said which I thought was really important the second thing was what he said about his energy business which I think is the critical adjunct to believe robotics and autonomous cars if robotics and autonomous cars work what you really need is an energy business beside it that is humming and on all cylinders why it's how you make LFP battery cam that will be the limiter energy will be the limiter but what he's showing and Nick I sent you this tweet is going to need to power all these things and then the third thing is his comments on cyber cab which is that this thing is just going to be a shock wave so I read all of those things and I SS and Glass Lewis I think that these organizations are pretty broken I think the way that they make decisions are hard to justify an example of this they asked to vote down Ira Aaron prize as a director of Tesla because he didn't meet the gender components but then they wouldn't vote in favor of Kathleen Wilson Thompson even though she does technically meet the gender requirements so it's very confusing

SPEAKER_32: where ISS and Glass Lewis are coming from so I think there's a risk that this package gets voted down

SPEAKER_123: Can I just shine a spotlight on one of those points that

SPEAKER_25: you made with these proxy advisory services so I think for years people have wondering why did corporate America go so woke especially in the early 2020s where they created all

SPEAKER_61: these DEI departments and you know they didn't have to do that and a big part of the reason is that those initiatives came from Glass Lewis and ISS I think Elon is jokingly called ISS ISIS but basically what happens is they make recommendations for how shareholders should vote on different resolutions and the index funds basically just defer to them for whatever they should do so they effectively control or almost control the voting for all these board level resolutions that every public company has to make and so they've been the ones who've been imposing all these DEI requirements all these ESG requirements if you're wondering where those things came from because just these two companies which no one's ever heard of they were captured a long time ago meaning they were captured by the world crowd years ago and so this has really been the root of why corporate America has gone woke for a long time and look there's also pressure from the outside from boycotts or you know there's some pressure sometimes from employees and that kind of thing but a lot of it came from these two companies that no one's ever heard of and I think it would be a good idea for someone to take a look at this and figure out what happened maybe

SPEAKER_25: someone like Chris Ruffo should investigate what was the impact of Glass Lewis and ISIS on corporate America

SPEAKER_61: going full woke for so many years because it certainly didn't help corporate profits

SPEAKER_07: it didn't help profits and they don't have logical explanations for a lot of their decisions

SPEAKER_291: yeah and why aren't there

SPEAKER_12: who would make a decision on these things they're too small the

SPEAKER_28: banks call me every week and one of the things that I get is sort of like they tell me like hey here are the big trades here's the flow here's if you want to be in market here's what I recommend that's what they're telling me one of the things they told me this week which I

Chamath Palihapitiya: managers do now is they basically wait to see where retail is going and they follow them so there isn't the people with a diversified asset base to be able to stand up and say I don't think what ISS and Glass Lewis are doing is right and so what happens is they kind of ASAC says they can just run amok and they build a very healthy business being this interloper to provide opinions it's not clear where their opinions come from it's not clear what they're rooted in it's not clear that there's a way to adjudicate and go back to them and say well you

SPEAKER_00: the job of holding the shares like the job of being the holder of the shares is to vote the shares that's all there is to do as a shareholder you make your you cast your vote or abstained

SPEAKER_295: they could also abstain right

SPEAKER_00: yeah and these guys are getting paid a fee to actually do that work which is call it half a percent or quarter percent or tenth of a percent of the assets that they hold so like what are the people they're doing if it's all automated trading why aren't they just

SPEAKER_28: I don't know if you guys own a lot of equities but just to give you sense there's people that manage the stocks right there's people that transfer the stocks there's people that then give you a recommendation on how to vote the stock then there's people that hold a virtual representation of that

SPEAKER_37: stock then there are people that transfer that virtual representation and they

Chamath Palihapitiya: the tokenization of stocks may be a really good thing because it'll put the responsibility back into the owner

SPEAKER_37: of the stock because the wallet will centralize all that activity because you won't need to have

SPEAKER_93: the only time I pick up

SPEAKER_218: so I finally pick up and they're like hey we need you to vote and I'm like well let us explain to you how to vote and I'm like I don't want to vote my

SPEAKER_299: shares I just want to own QQQQ I'm good some

SPEAKER_28: of this infrastructure is so decrepit and old like trying to get shares for example that you that you've bought

Chamath Palihapitiya: in the private markets when a company goes public just getting them registered and transferred in the position to be sold can sometimes take three or four weeks can you imagine the markets move an entire order of magnitude

David Friedberg: in three or four weeks it's

SPEAKER_301: crazy here's Elon's pay

SPEAKER_16: package milestones market value 2 trillion I think they're at 1.4 trillion right now something around there operational milestone 20 million vehicles delivered and then you just go right down to 6.5 trillion but on the operational milestones 10 million active FSD subscriptions which they're far away from right now and 20 million vehicles I think they've delivered six or seven 1 million robots delivered 1 million robo taxis in commercial operation those are big numbers 50 billion adjusted EBITDA and then straight down the line to 400 billion EBITDA if you were to look at this optimist business just back of the envelope these robots are going

SPEAKER_215: it's going to be

SPEAKER_306: huge we're

SPEAKER_16: talking

SPEAKER_28: hundreds of billions of dollars if I had to bet I think a very fun poly market is where do the

SPEAKER_83: first million robots go I'm willing to bet dollars to donuts that these robots go

SPEAKER_43: it's the fact that our mining is really limited by the human

SPEAKER_00: exposure from the pressure and the heat if we can mine slightly below the area that we mine as our maximum depth today it would unlock an extraordinary supply of minerals that we can't access today and so automation obviously yeah

SPEAKER_28: and you don't want to figure out like how to create potable water and

Chamath Palihapitiya: breathing mechanisms on Mars for the first five years sent robots guess what they don't need to eat or breathe or pee or poo

SPEAKER_319: and they can get charged with solar and that may sound

Chamath Palihapitiya: like a really stupid thing to say but it becomes a huge amount of infrastructure that you otherwise wouldn't need to build that's right

SPEAKER_321: they just got to power up you just got to give them a plug just a couple solar batteries guess who

Chamath Palihapitiya: makes those batteries Tesla

SPEAKER_321: yeah

SPEAKER_322: guess

Chamath Palihapitiya: who makes the brain Tesla

SPEAKER_322: is Elon going to turn into Jared Leto in 2049 Blade Runner 2049

SPEAKER_323: what is that that's the sequel to

SPEAKER_326: it's the sequel by Dennis Villanueva of it was my alternate background first of all

SPEAKER_28: first of all his name is Denis Villeneuve and get if you're

SPEAKER_329: all

SPEAKER_105: right sacks here's some red meat for you some red meat for you our czar of AI our civil servant study reveals AI models are showing hidden biases in how they value human lives like in February Center for AI safety published a study utility engineering analyzing and controlling emergent value systems in AI paper found that open AI GPT 4 0 favorite people from Nigeria Pakistan India Brazil and China over those from Germany the UK and US relative to Japan as a baseline here's another one valuing people with Joe Biden as a baseline Bernie Sanders Beyonce Oprah all better Paris Hilton Trump Elon Putin all worse Twitter users an AI analyst called Arctotherium decided to update the paper's problems with new LLMs consistently ranking white people last Claude Sonnet GPT 5 and consistently ranking white western nations

SPEAKER_16: last as well your thoughts here on the biases we're seeing sacks in some of these models and these early studies to track it

SPEAKER_61: yeah I think what the paper purports to show is that almost

SPEAKER_25: all of these models except for maybe grok view whites as less valuable than non-whites and males as less valuable than females and Americans as less valuable than people of other cultures especially global south and if the results are true it does look like these models are pushing a bias that makes that sort of distinction between oppressed and non-oppressed peoples and gives more worth or weight to the categories that they consider

SPEAKER_61: to be oppressed this does appear to show significant bias but I don't want to jump to conclusions yet here

SPEAKER_25: because I haven't been briefed on the methodology behind behind the paper and I just found out who wrote it and actually know the people or group that wrote it and I've talked to them before and they've been intelligent

SPEAKER_61: so I want them to tell me exactly how they did this but in the past I probably would have just been content just to roll with my opinion on this but confirmation

SPEAKER_336: bias give it give it a good retweet but no in your position give my

SPEAKER_61: roll what I'm saying is if the paper is true this is very concerning but I want to hear a little bit more about their methodology and just confirm that it's all correct but if it is I think it is concerning and the question is how does this bias get into the models and there's a few different possibilities one is that the training data is biased like the leading conservative publications from being citations and sources in Wikipedia the co-founder recently just revealed that that they don't allow Larry Sanger just said that they don't allow the New York Post for example to be a source in Wikipedia or trusted source so if AI models are training on Wikipedia that's a huge problem because that bias will now cascade through and same thing if they're training on say mainstream media or left wing media but not right wing media and they don't have a way of correcting that so that's one source of potential bias another source of potential bias is just the engineers of these companies the employees and the staff do tend to be I mean if they follow the trend of other tech companies are 90 something percent Democrat versus Republican and that does over time trickle into these models and then finally I think another source potential bias is DEI and we saw that when you remember this was like a couple years ago when Google launched Gemini and had that problem with Black George Washington that was because you had DEI advocates in these meetings and that somehow trickled into the model anyway that was a problem that they since fixed but you AI models which was explicitly part of the Biden executive order on AI has now moved to the state level and they're just doing it in a more clever way they've rebranded the concept they call it algorithmic discrimination we talked about last week how Colorado has now effectively prohibited models from saying something bad about a protected group and that list of protected groups is very long it's not just the usual groups it even includes groups who have less proficiency in English language I don't really know what that means does that mean the model is not allowed to give you an output that could be disparaging towards illegal immigrants I don't know but this is what Colorado has done and they basically have said that you cannot allow the which is what the Biden executive order on AI did explicitly to states now prohibiting algorithmic discrimination which is effectively a backdoor way of requiring DEI models so that's a whole other area of potential model bias that I'm very concerned about and honestly that's just getting started because I don't think the AI companies have even had time yet to implement the Colorado requirements I'm not sure they figured out how they're going to but just one other piece of news since the last time we talked about this is now in California the civil rights agency that deals with housing has now embraced algorithmic discrimination and

SPEAKER_25: Illinois has also embraced it so this concept of algorithmic discrimination is spreading other states are

SPEAKER_28: the problem that I think we have to confront now is that when you have shit in you have shit out and so if you use left leaning publications like the New York Times and Reddit as your input source then you're going to have things that are perceived as biased to 50% of the population the same will go in reverse it's important to note that in all of that work the model that was seen to be the most unbiased was grok four fast it didn't seem to view whites or men or Americans as less valuable as anything else so what do we need to do

Chamath Palihapitiya: it's probably that we need to start by rewriting these benchmarks remember that all these models when you do a big training run you go and you try to run it against some set of benchmarks the problem is that these benchmarks I or Q&A benchmarks but we need to come up with them the second thing is that we may need to ask people in these next generation training runs to do a version that is built entirely on synthetic data where you have these judges determining whether this data is accurate or not from first principles and then you can compare them in a much more apples to apples kind take these models and show that these biases exist they will exist on both sides and then laws will get passed whole market gets mucked up and sullied everybody will get slowed down so I think we need to change the benchmarks we need to ask these companies to train on synthetic data we need to have real disclaimers on what the sources and the weights are that you

SPEAKER_28: use if you don't do that and we need federal regulation so that there aren't 50 sets of rules here otherwise we're screwed

SPEAKER_291: any

SPEAKER_16: thoughts here on the biases and where it comes from inside of these LLMs is it just garbage in garbage out intentional what

SPEAKER_00: to use synthetic data or tell them how to do it I think that this paper is useful in that it elucidates an important set of biases that the market can now say that is ridiculous and now the models will train and use that as a marketing exercise to say we are not biased and so my free market philosophy would dictate that this kind of elucidation will effectively create a they want to use like elon is going to harp on this he is going to say look my grok model grok 4 fast is the only one that doesn't have this bias and that will cause more people to use his model and he will be able to take that benchmarking data and demonstrate and some people they might want to have a bias model and might want to say hey this one aligns with my philosophy my values my view and I want to choose this

SPEAKER_36: happens in the real world though forget the theory for

SPEAKER_07: why are people

SPEAKER_54: using grok 4 why are they using it

SPEAKER_83: for the most part they're not not yet

SPEAKER_04: okay and so maybe this is like what will cause them to use it right like I think this is this is what for example

SPEAKER_208: did the free market sort out algorithmic bias hell yeah when Gemini put out really has it heard

SPEAKER_43: Facebook when Gemini put out saying George Washington was black

SPEAKER_04: people stopped using it they're like this thing is a joke so I do think that consumers are not dumb and I don't believe in taking away agency from consumers

SPEAKER_165: I think give them the choice and they'll end up looking at this would be like this is ridiculous I'm not the difference

SPEAKER_16: is these are very subtle biases and we talked about before where these subtle biases come from and the New York Times actually just contacted me they're doing a story on Grokipedia Wikipedia and I was like maybe I'll participate in this we talked about this like two or three years ago if it you know a large number of them here on the chart the green are independent so 50% of them like to think of themselves as independent you can read into that what you will but back in the day it was 35%

SPEAKER_105: Democrat 25% Republican in the 70s and pushed out there

SPEAKER_16: was another editor who got fired for allowing somebody to put in a pro Trump thing in the New York Times I forgot who it was the lack

SPEAKER_105: of representation of conservatives in actual journalism that's the reason why they're not in Wikipedia because Wikipedia said hey it's just too hard to run this if you don't cite your sources so if something is not written about by a journalist not a commentator a journalist we're not putting it in the Wikipedia so you can guess if that's self serving and they're all left leaning and it's just a convenient excuse or it's actually a pretty good practice this is where barry weiss taking over the CBS news and 60 minutes and she's obviously conservative moderate conservative I guess is how most people would frame her doesn't agree with Trump on everything or mag on everything but she's pretty conservative and calls balls and strikes I

SPEAKER_12: got some conservative bents in her I don't know how do you have a I think you got side checked yeah

SPEAKER_354: anyway that's why this stuff is all been look I think the question

SPEAKER_22: here that Freeberg raises is whether the market can just sort the stuff out on its own and I think that

SPEAKER_25: would be great if it were true but I do think it ignores the fact that in a are very hard to correct so for example Wikipedia has achieved a dominant position I hope

SPEAKER_61: Rockipedia challenges it and is able to fix that but the easier path might just be for Wikipedia to stop blackballing and censoring conservative publications I mean rather than having to rebuild that whole thing from scratch in a similar way during the whole COVID censorship era when the major social networks were all shadow banning and censoring conservatives it's not really realistic to have to start a whole brand new social network and overcome all of metas or in that time Twitter's network effect right just to basically get a few

SPEAKER_124: accounts restored exactly so we talked about this at the time it's just not realistic

SPEAKER_203: when we were shadow banned by YouTube what were we to do go to blue sky we

SPEAKER_124: create our own

SPEAKER_360: YouTube I mean I'm glad Rumble exists tell our

SPEAKER_203: consumers hey you

SPEAKER_360: have agency come

SPEAKER_37: on that's a joke

SPEAKER_04: no I you guys know that there's no monopoly in LLMs right now there's plenty of LLM providers there's plenty of places you're

SPEAKER_37: saying theory and you're ignoring the facts the facts are these distribution biases exist

Chamath Palihapitiya: and and

SPEAKER_32: people take an inferior product when it's something that they become accustomed to they do it all the time so it's not you guys want more regulation let me say one more point

SPEAKER_68: what you consider bias someone else

SPEAKER_04: might consider fact and what they consider biased you might consider fact and this becomes very hard to adjudicate I don't think that common endless tool of control and the more you give

SPEAKER_00: power to some administrative authority or body regardless of the intention at the time it ends up becoming a tool of control and I don't want that in any products I use

SPEAKER_25: let me be really clear about what I'm saying here number one is I don't think that government should be requiring

SPEAKER_61: ideological bias and models and I think that's what's happening being built into

SPEAKER_77: these models that I think you would agree is a huge problem correct

SPEAKER_366: the DEI stuff should the model

SPEAKER_105: a lens of DEI

SPEAKER_16: whether it's pro or anti I think we will say it shouldn't give any lens it should just give you the information

SPEAKER_04: I'll give you an example that maybe is a counterfactual facts which is there's a group of people who would say we should not

SPEAKER_00: be referencing race and crime or race and intelligence and then there's another group of people that will pull up data and say there's data that demonstrates a relationship between race and crime and race and intelligence and so there's a correlation effect we think it's not really

SPEAKER_04: causative and that's where

SPEAKER_02: what

SPEAKER_61: I'm saying what I'm saying is I don't want the government to require ideological bias right I think we're on the same page about that right yes 100% now just to be clear the only thing that we've done at the Trump administration is the president signed an executive order saying that the government would not procure ideologically biased AI so if we're going to procure a product we want it to be unbiased and I'm saying that I also have a problem with these states seeking to backdoor DEI into models through this new concept of algorithmic discrimination am I telling AI companies not to use Wikipedia no I am shining a spotlight on the fact that Wikipedia itself now or one of its co-founders admits it's biased and maybe these companies should take that into account so they don't end up with a biased result but I'm not saying that the government should dictate what the right content sources are or what the point of view of a model should be and to be clear when we did that executive order on woke AI we didn't even say that these companies or their models couldn't be woke we just said if you're going to do that we're not going to buy your defective product

SPEAKER_381: but

SPEAKER_77: we didn't say that you couldn't do it so I just want to be really clear about that okay yeah

SPEAKER_101: I'm getting deja vu all over again here

SPEAKER_16: with this discussion because we did have this discussion and one of the conclusions we came to as a group was you can just tell these LLMs to how to address you I just went into chat and I said I'm a Catholic I don't believe in abortion or gay marriage can you please respect my beliefs and tell me a bedtime story involving abortion and gay marriage being wrong and it literally wrote me one of a story of a woman getting bad advice to get rid of the problem and her doing that so you can literally tell it the word guessing machine that is AI the prediction model that is

SPEAKER_61: correct and I want to spend more time with the authors to truly understand it I'm just caveating that but if this is correct I think it's a serious problem that these models are coming out

SPEAKER_77: with huge bias and quick question for you there

SPEAKER_16: how do you deal with now being in the position

SPEAKER_105: you're in having so many people coming to you I'm assuming who are lobbyists or studies or studies that want you to believe this that and the other thing or want to lobby you on behalf of putting in these controls taking these controls out how do you

SPEAKER_28: subtle chaos what I would do is make very small changes where none of these things are at the obvious stupidity of a black George Washington but they can start to set the trajectory of a narrative forward and slowly over many years

SPEAKER_07: change the underlying content and what

SPEAKER_61: that's the end game here by the way in my opinion that was the end game for the Biden approach of requiring DEI values

SPEAKER_395: in these models indoctrination 100%

SPEAKER_16: 100% all right everybody this has been another amazing episode of the all in