The Manosphere Report

0:00all right everybody welcome back to the number one podcast in the world freeberg's out

0:03saving the world creating new potatoes or i don't know quinoa maybe some brussels sprouts

0:08i'm not sure what he's working on at this point in his place his personal

0:12favorite bestie well he says that when i'm not here i want brad gerstner in

0:16the seat welcome back we haven't seen you on the pod since your shout out

0:22the state of the union take us behind the scenes for a brief moment here

0:25brad of what it's like to get a shout out from potus at the state

0:30did you know it was coming did you choreograph to this thing did you did

0:33you choreograph that or was that i honestly had no idea it was coming and

0:39in fact i i found out after the fact that it wasn't in the speech

0:42and the president added it to the speech so i don't even think it was

0:45that's so awesome few days before going to happen but we got an invite to

0:50the state of the union and you know listen it's an institution this has happened

0:54every year for 250 years in the country i've never been i thought i did

0:59know he was going to talk about trump accounts so i figured if i'm ever

1:02going to go that's the time to go and i have to say you know

1:05i'm just a sucker for democratic institutions and democratic traditions it was an extraordinary night

1:10set aside you know the headlines about what democrats did or republicans did just the

1:15whether it's a democrat president or republican president that this happens every year you have

1:19to go report on the state of the union so it was it was a

1:22special night did dinner ahead of time we're in the chamber the chamber as you

1:25all know is very small and so you know just to your right was the

1:30first family and and jared and ivanka and so you know we were there as

1:36to observe like everybody else and wow it was it was quite a moment and

1:42i want to just say you did a great job because when you sent your

1:45heart out to all of america i took it i took it i took it

1:49i was like you sent it out but you kept it at the right angle

1:53right right you had just got up a little bit extra and out you'd be

1:57a nazi that would have been no bueno those would be some super racist trump

2:03accounts keep your protractor and your ruler out when you send your heart out okay

2:08one final thing on it jason you know we're signing up over a hundred thousand

2:12kids a day to these trump accounts fantastic we have millions of kids who've already

2:16claimed their account we have nearly 30 million kids in america who are eligible for

2:21at least 250 dollars if they just go claim their account these things are going

2:24to go live on july 4th and what it really showed i think the country

2:27it accelerated after the state of the union because the president you know really believes

2:33this is a way to get everybody main street america into the game of capitalism

2:37and get them all directly owning you know the great companies in america so it

2:40meant a lot to me in that regard that it highlights the importance of the

2:44program so i was deeply grateful to the president for not only making sure this

2:48happens but the shout out is pretty cool good for you bro i have um

2:51an interesting idea for you i'm sure it's come up already but with this whole

2:56discussion of ubi somebody said to me oh you know i really like these trump

2:59accounts your friends did the the invest america because it's like the start of ubi

3:03and i was like well that's not exactly the intention but i get it and

3:08with wealth disparity going on in the country that has a lot of people concerned

3:11what if there was a giving pledge around equities and people could opt into it

3:17they don't have to but if somebody like i don't know larry and sergey or

3:21zuckerberg said i want to pledge five percent of my shares to go into kids

3:26accounts over the next 20 years what an amazing beautiful thing that could be and

3:31it would be incredibly material to get whatever it is a tenth of a share

3:35a hundredth of a share a thousandth of a share of whatever of a share

3:38of a share of a share of a share of a share of a share

3:38of a share of a share of a We're coming.

3:38Has that come up yet as an idea?

3:39I'm sure it's obvious, right?

3:41It's come up. Stay tuned.

3:43But yes, we're going to have some banger announcements as we head toward July 4th.

3:49All right, let's talk about the war in Iran.

3:51Obviously, there are much more important issues than financial ones, life, death, the freedom of

3:56the people of Iran. But we're uniquely qualified, I think, to talk about the economic

4:01fallout, second order effects, first order effects.

4:03And there has been massive volatility over the last five trading days.

4:08Just talking about Brent crude oil, and we'll key the discussion off of that type

4:14of oil. It spiked to $84 on Friday.

4:17That was day seven of the war, $119 on Monday, day 10.

4:21Dropped back down to $84, jumped back up to $100 after three commercial ships were

4:25hit in the strait on Wednesday.

4:28Those ships, by the way, were not oil tankers.

4:30They were carrying cargo. They were flagged as Thai, Japanese, and Marshall Islands.

4:34Brent crude, currently at $99 when we're taping this.

4:37It'll be at something different by the time you listen to the pod, I'm sure.

4:41But it's quite a spike.

4:43And here's a second chart.

4:44This shows you the spikes over time.

4:46I was old enough to remember the oil shock of 1978.

4:49We had to get in line at the gas station based on your license plate

4:53number, and you had to wait an hour or two to get gas.

4:55Gulf War, obviously, it hit $100 in $26.

5:002008, we hit kind of a peak moment, $216 in today's dollars.

5:05That was the peak oil discussion.

5:07Demand from China went off the charts.

5:09When Russia invaded Ukraine, we hit $115, which would be $133 in today's dollars.

5:14So this is not new, but it is significant.

5:19And breaking news today, Iran's new supreme leader, Moshtaba, says he's keeping the strait closed

5:26as a tool to pressure the enemy.

5:28Wall Street Journal on Thursday quoted a senior fellow at the Middle East Institute saying

5:33that reopening the strait will require ground troops polymarket.

5:3827 % chance that US forces enter Iran by the end of March and 57

5:43% by the end of the year.

5:45So the sharps over a polymarket believe we will have boots on the ground.

5:48Let me stop there. Brad, your thoughts on what happens when oil hits this kind

5:53of number, and we have this uncertainty of, hey, this could last, you know, two

5:58more weeks, or it could last six months, it could last a year.

6:02Nobody seems to know and how it resolves.

6:06We just had a really interesting talk with Graham Allison.

6:10How it resolves is also a major unknown.

6:13Your thoughts? So first is, obviously, there are huge direct costs as oil prices go

6:19up, right? Oil is a component of a lot of consumer, you know, and enterprise

6:23products. And it also hurts consumer confidence, enterprise confidence.

6:27Goldman Sachs is out today with some analysis where they updated kind of the economic

6:31knock -on effects, right? So they raised their PCE inflation forecast from 2 .1 to

6:362 .9, right, for the year.

6:38So that's a huge jump, right, in terms of their expected, you know, PCE inflation.

6:44Core PCE, which excludes oil, okay, is they forecasted up from 2 .2 to 2

6:50.4. So they're saying even if you excluded the direct price of oil, the knock

6:54-on effects is going to cause a little more inflation.

6:57They lower their GDP forecast by 30 basis points for the year.

7:01And they also expect higher unemployment as a result of this for the year.

7:05All of that is weighing on the sentiment in the market.

7:07Remember, just a few months ago, the S &P peaked at 24 times.

7:10Now we're at 21 times.

7:12But I think the market may be getting it a little bit wrong, right?

7:15The Trump doctrine, you know, I tweeted about this last week.

7:18I think the Trump doctrine is far more pragmatic than the neocon doctrine.

7:23I think Trump has a very limited set of goals.

7:26He wants to destroy and degrade threats to America's national security interests.

7:30He doesn't want to spread democracy.

7:31So my suspicion is that these impacts are shorter duration.

7:35But right now, the market's having a little bit of post -traumatic stress, flashbacks to

7:39Afghanistan and Iraq, and wondering if we might be wandering into a quagmire.

7:45All right. And just, he may not, in terms of the doctrine, he has said

7:50he wants to see the people rise up there.

7:52So it might be splitting hairs, but I think he might actually be for regime

7:57change. He says he wants the regime to change.

7:59All else being equal, I don't think he minds if the people bring it to

8:02themselves. The question is whether the U .S.

8:03is going to put boots on the ground and try to spread Madisonian democracy like

8:08the Cheney doctrine was. And I think this is very different.

8:11Chamath, your take on the economic impact and, you know, any other things you'd like

8:17to add about the war in Iran?

8:20I think the most important thing that I saw this week was, I think President

8:26Trump was asked about the war, and he said the war would be over very

8:30soon. What did the market do?

8:33The market literally took oil from 120 a barrel to 90 a barrel, almost in,

8:40you know, a nanosecond. I think that that sort of tells you what everybody thinks.

8:47To the extent that the market really didn't believe it, oil would not have budged.

8:53And if anything, it would have faded those comments.

8:56And you probably would have seen oil stay at around 120 or even go slightly

9:01higher. So the fact that there was this reflexive move, I think is a belief

9:05by a lot of the sharps that there is no path to a sustained conflict.

9:11There's going to be a lot of chest bumping from the Iranians, obviously, because they

9:14need to save face and they will want to set up whoever comes next to

9:18have the most successful chance of governing.

9:20So my perspective is that was a trial balloon.

9:24I think it validated what everybody thought, which is that this is going to be

9:27a short run thing. I agree with that.

9:31The downstream impact is, I think, correct what Brad said, which is it could show

9:35up in some short term price spikes.

9:39But then on March 11, you saw what Chris Wright did, which is the president

9:44activated a whole bunch of member countries in the IEA.

9:47And I think Chris released 172 million barrels.

9:51I think there's a coordinated release of about 400 million barrels of petroleum.

9:55That's going to dampen the effect of any price spike.

9:58On top of that, I think the estimate is there's probably another billion or so

10:02more barrels that one could release out of strategic stockpiles.

10:08So I think that both of these two things together kind of paint a picture

10:12that probably the worst is behind us.

10:14And I think now it's about finding the off ramp.

10:19Sachs, your thoughts? Well, I agree that we should try to find the off ramp.

10:24I mean, I agree with what Brad and Jamal said about that.

10:27Look, we've degraded Iranian capabilities massively.

10:31Their army, navy, air force have been destroyed.

10:35This is a good time to declare victory and get out.

10:37And that is clearly what the markets would like to see.

10:40You are seeing, however, a faction of people, I'd say largely, but not exclusively in

10:46the Republican Party, who want to escalate the war.

10:49And we're calling for things like ground troops or regime change or...

10:55Or they simply want the pounding of Iran to just keep going on and on.

10:59I saw an op -ed in the Wall Street Journal to that effect that we

11:02shouldn't try and find an off -brand.

11:03We should just keep going with this.

11:05And I just want to lay out, I think, some of the risks of what

11:09an escalatory approach could entail.

11:12So first of all, we're all seeing that the straightforward moves are closed right now.

11:17We don't want that to persist longer than it has to.

11:21But there are actually worse outcomes than that.

11:24So if the Iranians get hit, if their oil and gas infrastructure gets hit, they've

11:31already said they're going to engage in tit -for -tat retaliation against the Gulf states.

11:35And we saw there was recently the Iranians blew up this giant oil depot in

11:40Oman. You saw some of those images.

11:42They could continue to target the oil and gas infrastructure across the Gulf states.

11:48And if that happens, it won't really matter if the straits get reopened because you

11:52won't be able to restart oil and gas production in the Middle East.

11:55So that would be, I think, a much worse outcome that could result from escalation.

12:01Furthermore, there's an even worse, I think, scenario from there, which is the region is

12:06very dependent on desalination plants.

12:08I think something like 70 % of Riyadh gets their water from desalination.

12:13I think it's something like 100 million people on the Arabian Peninsula that get their

12:17water from desal. I mean, it's basically a desert, right?

12:21And those desal plants are soft targets.

12:23You already saw there was, I think there was one desal plant in Iran that

12:26got hit. And then it caused Iran, again, tit -for -tat to hit a desal

12:30plant. I think it was in Kuwait.

12:32I could be off about that.

12:34But in any event, if you see that type of destruction continue, you could literally

12:38render the Gulf almost uninhabitable.

12:42I mean, you're just not going to have enough water for 100 million people.

12:44And human beings just cannot survive very long without water.

12:48So that would be a truly catastrophic scenario.

12:52And we're talking about destroying the Gulf states economically, and then also from a humanitarian

12:57perspective. So I think we have to take things like this into account when you

13:01hear people preaching for or advocating for escalation.

13:04You also have to, I think, consider the impacts on Israel.

13:08I mean, it's hard to know exactly how much damage Israel is taking right now.

13:12There's a social media blackout.

13:14But what you're starting to hear trickle out is that Israel is getting hit harder

13:18than they've ever been hit before in their history.

13:20And we're only two weeks into this.

13:22If this war continues for weeks or months, then Israel could just be destroyed.

13:29There are very large parts of it.

13:30Now, I think Israel is a harder target than the Gulf states.

13:34Their infrastructure is more hardened.

13:35Also, they're further away. The Gulf states are vulnerable to drones and short -range missiles,

13:40whereas Israel is mainly vulnerable to long -range missiles.

13:44Nonetheless, at some point, their air defenses could become exhausted if it hasn't happened already,

13:50and Israel could get seriously destroyed.

13:52And then you have to worry about Israel escalating the war by contemplating using a

13:57nuclear weapon, which would truly be catastrophic.

14:01So there's a lot of scenarios here, a lot of really frightening scenarios about where

14:07escalation could lead. And even though the United States is a much more powerful country

14:12than Iran, they essentially have a dead man's switch over the economic fate of the

14:18Gulf states and even potentially beyond that, you know, the habitability of some of these

14:23countries. So I do tend to think that this is a good time to declare

14:28victory. I think, Brad, you're right that the president has never said that democracy promotion...

14:33is one of his objectives.

14:35Yes, J -Cal, obviously, everyone would welcome if the people rose up and chose a

14:40new regime, but that's not something that we've said we have to accomplish.

14:44And this would be a really good time to take stock of where we are

14:47and try, I think, to seek an off -ramp.

14:51And look, if escalation doesn't lead anywhere good, then you have to think about, well,

14:55how do you de -escalate?

14:56And de -escalation, I think, involves reaching some sort of ceasefire agreement or some sort

15:02of negotiated settlement with Iran.

15:05And we can get into more of what that looks like.

15:07But I think that's the big picture, is that if escalation could lead in all

15:11these horrifying directions, then I think that's not the right approach.

15:14You have to look at de -escalation.

15:15J -Cal, where are you on this?

15:18Complicated. I have my personal feelings on regime change.

15:20And since we don't have the information the Mossad and the CIA and Trump has,

15:27I do think Trump would only do this if he had a very high probability

15:31of success and an off -ramp.

15:33However, it's not looking good with the off -ramp right now, and it could be

15:37quite chaotic. I think if the neocons get their way and the people on poly

15:42market are correct, the sharps who say 57 % chance we'll have boots on the

15:46ground, I think this is kind of the end of Trump's second term.

15:51And if you were to put together the series of mistakes that he's made and

15:57the administrations made, they're really at the heart of why people voted for him.

16:03You take starting a war like this, specifically with Iran, that's what we were told

16:08was the reason to vote for President Trump.

16:10He was not going to take us down this path.

16:13He was not going to risk World War III.

16:17He was not going to risk a nuclear possibility, as Sachs correctly points out.

16:22And now you have all the MAGA supporters from, you know, Tucker to MTG to

16:28Rogan, Matt Walsh, Megyn Kelly, they are all up in arms about this is the

16:32end of MAGA. And this is, you know, a massive betrayal.

16:36There's the 1B betrayal, where Trump wouldn't release the Epstein files.

16:40We'll put that aside, because I don't think that's as important as starting World War

16:43III. And then obviously, the insane, unnecessary cruelty we talked about many times on this

16:49podcast of ICE agents, which he has corrected by getting rid of Christy Noem.

16:54So you start putting these things together.

16:56If this continues for another six months, it's basically going to result in the Democrats

17:04doing a clean sweep in the midterms.

17:08Here's the chart that I think, you know, the Republicans really need to look at,

17:12at how misguided, you know, this all is.

17:17This is the chart that should be absolutely terrifying.

17:20Nobody wanted this war, or very few people wanted it besides the neocons, and the

17:25people of Iran, probably, and the Israelis.

17:28But the chances of the Democrats sweeping now is up to 45%.

17:31This just happened. The Democrats are going to sweep.

17:36Then they're going to win in 2028, and the entire agenda of MAGA and Trump's

17:412 .0 will be gone.

17:43And then you look at just absolutely ignoring the working man.

17:47Inflation going up above 3%, as you pointed out, is a likelihood.

17:52Brad, unemployment ticking up. Still very low, but it's ticked up 10%, worth keeping an

17:56eye on. These foreign affairs things are the least important to the American people.

18:01It's very, very low on the list of priorities.

18:05And people are looking at Trump and what they believe is the enriching of his

18:09family and all these business deals.

18:12And you're really kitchen -sinking it.

18:13It's literally what I was thinking.

18:15You're bringing everything. At one, two, three, four.

18:18Number one, doing the war that everybody said he should not do.

18:22And that was why we should vote for him.

18:24Number two, the Epstein files.

18:25Number three, the ice cruelty.

18:26And number four, not working for the American working man who doesn't own equities.

18:32Those are four. One, two, three, four.

18:34It's not a kitchen sink.

18:34This is not my personal feelings on this.

18:37This is my assessment of the situation.

18:38If he doesn't find an off -ramp quickly, they're going to lose both houses in

18:43the midterms. That's, I think, the thing Trump needs to really consider.

18:48And I think he will consider it.

18:49I think he's going to find an off -ramp.

18:50Right. That is the topic.

18:51The topic was, are we going to find an off -ramp or not find an

18:54off -ramp in Iran? And I think Sachs made the argument that there's danger that

18:59neocons and others are arguing that we expand, put boots on the ground.

19:03You're saying if he doesn't, it'll be a disaster.

19:06Chamath and I both say he will, right?

19:08And so, he will find an off -ramp in the nearer term because the Trump

19:15doctrine is not the neocon doctrine.

19:18As much as people want to talk about Iran, Iran, Iran, I think as I

19:22explained last week, I think this is about China, China, China.

19:26And you have to remember, at the end of this month, he has a pivotal

19:29three days with Xi Jinping in China.

19:33This is going to be an absolutely historic convening of the two superpowers that run

19:42the world. One, which is us.

19:45We are the established. And one, which is China, who wants to be reascended.

19:50And I would bet dollars to donuts that there is going to be an enormous

19:55incentive for Xi to negotiate a grand bargain in those three days and do something

20:03historic for himself. And I think that the president will use that if he thinks

20:09that it creates leverage. I think it's a great insight.

20:11How does the Strait of Hormuz open?

20:13If this war is dragging on and Israel, which seems to be the driving force

20:19in this, if Israel keeps it up with Iran, how do we ever get the

20:24Strait open again? I think the off -ramp is that the United States declares victory,

20:29does what SAC says, and says, listen, we degraded and we destroyed.

20:33That's what we came here to do.

20:34We did not come here for some experiment in democracy.

20:37We wish the best to the Iranian people to do the things they need to

20:41do. And if Iran does not back down, if after that declaration, Iran continues to

20:46destroy cargo containers moving through the narrow straits, I think you're going to see Iran's

20:52neighbors and Israel and others get very involved as it pertains to Iran because it's

20:58in their interest. Listen, the United States produces 20 million barrels of oil a day

21:02and we consume 20 million barrels a day.

21:04This is a modest problem for the United States.

21:07This is a massive problem for China.

21:09This is a massive problem for Asia.

21:11This is a massive problem for all of our friends in the Gulf who are

21:14trying to dodge Iranian missiles right now.

21:16So there are a lot of people in the world who will take up arms

21:19to deal with the Iranians if the United States isn't there because we can take

21:23care of ourselves. Your position, Brad, just to confirm it, is we are going to

21:28leave the war in the next 30 days.

21:29And then if the straits are not open, then China, India and all the Gulf

21:35countries that are impacted by it, they will protect it.

21:38They will fight Iran. I think they'll put a lot of pressure on Iran not

21:42to continue firing missiles at their ships, right?

21:45At the end of the day, this is not just an American problem, right?

21:48And let's be clear, we're...

21:50always involved in this part of the world.

21:52The only question is, are we going to have an active armada that's engaged in

21:57active military activities against Iran?

21:59And what I'm suggesting again, and listen, anytime you try to clean up a mess

22:03like this, there is risk.

22:05This is not a risk -free initiative by the United States, nor was Venezuela.

22:11But let me steel man the alternative.

22:14Doing nothing and allowing Iran to procure the ingredients for a nuclear missile when they

22:19are set on the destruction of the United States and U .S.

22:22interests, doing nothing in Venezuela while the Monroe Doctrine is totally wrecked and we let

22:27our adversaries take up positions in South America, those also have risks, right?

22:33Those carry a lot of risks.

22:35And so we're weighing these two risks.

22:37Again, for me, I don't like the fact that we're engaged in military activities here,

22:42but I will tell you, I am very much on the side that if we're

22:45going to go protect American national security interests, you go in, you do the degrading

22:50of their capability, and you get out.

22:53And I think, you know, that's what I hear out of the president.

22:56Chamath, you had a follow -up?

22:58All roads lead to China.

22:59I think that you're going to see Xi offer up a grand bargain.

23:03And I think it's up to the president to decide whether he wants to take

23:06it and see what he wants to add to it to get something done.

23:08But I just don't see them meeting and coming out with nothing.

23:12I think I see them going in and coming out with something that's historic.

23:16And I think that all of this, Venezuela and Iran together, is all about China.

23:22Let me just say one thing as to that, Chamath, because I think the point

23:25is absolutely spot on, right?

23:28Probably the single greatest takeaway for us from an investment perspective at the start of

23:32this war was that the Chinese, right, didn't take up arms on behalf of Iran,

23:38aren't defending Iran, and they didn't cancel the summit with the president, right?

23:45The very fact that the summit - Because they need him.

23:48They need the oil. 20 % of their entire domestic consumption is oil from Venezuela

23:55and Iran. 20%. But it's not 20 % because it's literally 100 % of anything

24:01that's feedstock, anything that's transport, cars, buses, planes.

24:06They are in an enormous world of hurt.

24:08Now, they have a strategic petroleum reserve as well, and it's quite robust, but it's

24:13not robust enough to sustain five or six months of this.

24:17It's not that robust. So at the end of the day, who is going to

24:21be hurting the most? It is China.

24:23And so if you play this game theory out, the reason he kept it because

24:27now he needs a summit even more.

24:29Could you imagine if the president canceled?

24:32That would be a disaster for the Chinese.

24:35So the fact that it's still on the books, if I was Xi, I'd be

24:39like, how do I negotiate and help find the off -ramp?

24:42How do I end up fixing this faster?

24:46All right. Remember, you have 25 % unemployment of young men inside of China.

24:5125 % today. What do you think it goes to in five months with no

24:55oil? That's the unemployment rate you should be focused on, Jason.

25:01Oh, the China issue is a separate one.

25:04It's not separate. No, no.

25:06That was separate from my point is my point.

25:08I was bringing up a different point.

25:10Yeah, your kitchen sink didn't include the Chinese.

25:12I get that. I'm just adding to your kitchen sink.

25:14I didn't have a kitchen sink.

25:15I have four very salient points.

25:17All right, Saks, I'll give you the final word here.

25:19Well, look, that was a bit of a broadside, J -Cal, where you kind of

25:23did kitchen sink it. But look, here's the part I'll agree with you about, which

25:27is it doesn't take a point.

25:29political genius to understand that long wars are unpopular.

25:33It will hurt the Republicans in the midterms or 28 if this does turn into

25:38a long war. Fortunately, I think the president understands that.

25:41His political instincts are impeccable, and he's always favored short, decisive, swift actions, military actions,

25:49whether it was Midnight Hammer, whether it was the Maduro raid.

25:52I think that is his inclination and preference.

25:55I think we are pretty much at or close to a point where the president's

26:00going to have to decide on next steps.

26:02I think he's indicated that we have completed our objectives, and I think it's just

26:07important that we don't let this neocon wing of the party try to expand the

26:14objectives or aims of the war because, frankly, they've always been wrong about everything.

26:18I mean, these are people who never wanted to get out of Iraq and Afghanistan,

26:22would still be there after 20 years if they had their choice.

26:26So I think it's just important to not listen to those people.

26:29And look, it's not just one op -ed in the Wall Street Journal.

26:32The Wall Street Journal is kind of the tip of the spear representing that whole

26:36neocon establishment. And I think it's just important that this is the time to, frankly,

26:41ignore those voices and let the president do what I think his political instincts are

26:45telling him to do, which is to wrap this thing up.

26:48I'm in strong agreement, and it is my hope, too, that he wraps it up

26:51quickly. And that we don't have any more loss of life.

26:55All right, we'll keep discussing this ongoing breaking news story in the coming weeks.

27:00But back to our zone of excellence, AI and tech.

27:05Open AI and Anthropic are scaling revenue and costs faster than we've ever seen in

27:10the history of, well, business, the world.

27:13Revenue at these two companies growing, gosh, like unprecedented levels.

27:18Here are the reports, and I believe you're investors in both these companies, Brad.

27:22Anthropic hit a $14 billion run rate last month, February.

27:27That means they have grown revenue from $1 billion to $14 billion in 14 months.

27:33They have 12x year over year.

27:35They're valued at a meager $380 billion last month.

27:40This feels like a bargain given the growth.

27:42Open AI ended 2025 at $20 billion annualized run rate.

27:46And they've grown revenue from $2 billion to $20 billion in 24 months.

27:50They're valued at $840 billion last month.

27:53And man, it looks like Sam Altman has Dario in the review mirror.

28:00He could get lapped any moment.

28:02Lots of debate. Where did you find this?

28:04What the hell is this?

28:05That one? I made that.

28:06This is Dario closing in.

28:09What is that, a velociraptor?

28:11What is it? A T -Rex?

28:12It's the famous scene from Jurassic Park.

28:14Oh, my God. But I mean, I don't think anybody expected Dario to be coming

28:17around the bend this fast, but he's right behind, apparently.

28:21And they're winning, obviously, the business -to -business side of the business.

28:25The J -curve on these companies is insane.

28:28$250 billion, $500 billion. Who knows what gets invested before these companies reach profitability, Brad?

28:34But you're invested in these two companies.

28:37Yeah. Unless you sold when Sam Altman told you he would buy his shares back

28:41on the famous BG2 episode.

28:43I don't think you sold it.

28:44I bought a lot more since then, Jason.

28:46I bought a lot more since then.

28:47Okay, fantastic. That's important information for us to have.

28:49Quick question for you. Number one, what's a better buy here?

28:53Yeah. Anthropica at $380, OpenAI at $840.

28:56And then, I think people want to know if these companies are going to go

28:59public. If you think they should go public, what is the chance of that happening?

29:04Take those questions however you like.

29:06Well, I mean, listen. love your children equally.

29:09They're both incredible companies. Anthropic unquestionably has a lot of financial momentum, and OpenAI is

29:16seeing a lot of momentum themselves.

29:17But the single most important question this year was, would AI revenue show up?

29:23And just 60 days ago, 90 days ago, there was tremendous skepticism.

29:27No way all of these infrastructure investments were going to pay off.

29:31There's no incremental revenue coming out of AI, including many of our friends.

29:37But in January and February, we really had a nuclear moment, the splitting of the

29:42atom moment. We had a $6 billion month out of Anthropic in February, widely reported.

29:51Let that set in for a second.

29:53$6 billion in a month.

29:55It was only a 28 -day month.

29:58That's more revenue than the annual revenue of Databricks and Snowflake that are two of

30:03the greatest software companies of all time after 12 years.

30:07They could do, in the first four or five months of this year, the total

30:10revenue of SpaceX this year.

30:12What is driving that? Just explain to the audience what's driving it.

30:15Is it token use? Is it Claude subscriptions?

30:17We crossed a threshold with Opus 4 .6, and we saw it again with ChatGPT

30:245 .4, where the models and the agents on top of them, whether it's Claude

30:29Code, Codex, ChatGPT, they're no longer competing with IT budgets.

30:33They're now augmenting labor. They're competing with labor budgets.

30:37You could not possibly have a $6 billion month.

30:40It is impossible to do that by displacing IT budgets.

30:44Millions of other companies across America say, oh my God, let's spin up these agents

30:48and have them do things for us.

30:49And we're willing to pay for it because the product of that effort is worth

30:54the money to us. And the revenue and the usage momentum, I will tell you,

30:58in the month of March continues, and it only accelerates from here.

31:02As Kevin Weil has said, the models and the agents are the dumbest today they

31:06will ever be, right? We're in the early innings of compute and algorithmic capability.

31:13And so, you know, like that to me is the observation of this moment.

31:16Should they go public? I've said, yes, they should go public for several reasons.

31:20There's tons of institutional demand.

31:22They need cheap access to money to continue to build out the compute they need

31:26to support. There is more compute constraint in these businesses this very day than they've

31:31had any time in the last three years.

31:33So they need access to the capital.

31:35And then finally, I think you have to have the retail investor in the game.

31:38These are two of the most important companies in the history of capitalism, in the

31:42history of America. It's destabilizing not to have them public.

31:46You know, Jensen said last week that he expected the $40 billion he recently invested

31:51in these two companies would be his last money in because they were both going

31:54to go public. He said they would both go public this year.

31:58I think that, you know, they're preparing and heading down that path, you know, and

32:03listen, I want to get some of these shares in the accounts of all these

32:06kids that we're opening up because they're really, really important companies to the future of

32:10the American economy. Shamop, you had some insight into the quality, durability of this revenue.

32:18There's not a single good example that we can find of sustained positive margin expansion

32:26and impact of AI inside of a true corporate enterprise that is not right now

32:33a small test. There's not.

32:35So where does 6 billion come from?

32:37Because everybody has to show up to their board and have an AI checkbox.

32:43And everybody is thousands and thousands of companies.

32:45And when you have tens of thousands of companies as customers paying $200 plus a

32:51month, it's not that hard to show up with that kind of revenue.

32:54The real question is the following.

32:57If you take, you use the Databricks and Snowflake example.

33:00If you look at the companies that use that software, those companies generate enormous revenues

33:10and enormous margins, and these products are in critical production workflows that underlie those revenues

33:18and profits. That is just not true with AI today.

33:22We have all kinds of claims, but we are still experimenting.

33:27Why are we experimenting? Because we know it's important, but we don't yet really know

33:32what to do. You can't just slot this in to a critical workflow in healthcare

33:37and all of a sudden show up where if you make a misdiagnosis or if

33:41you make a mischaracterization of a procedure, you can get fined and go to jail.

33:46The companies that are in healthcare don't do that.

33:48If you're in financial services and you make a misallocation and you point to a

33:56model, you will get sued and you will be in trouble.

33:59None of these things have transitioned from it's interesting, it's experimental, to it's the core

34:06critical operational workflow. There will be a transition in revenue quality when that happens.

34:13A great example of this is Amazon.

34:15Why does Amazon issue an edict that says you cannot use this stuff inside of

34:22AWS unless a human now reviews and approves it?

34:24Because what happened? They had three or four SEV1 faults from a bunch of code

34:30that was written by agents that brought down AWS.

34:32Now, look, I've told you, I love AWS for one reason, because it's hyper -reliable.

34:38I hate AWS for the same reason, that hyper -reliability comes at enormous cost.

34:42I pay it, but I pay it to never have a SEV1.

34:46The reason they have 12 nines of accuracy is because it's humans and deterministic code

34:51that never fails. It doesn't mean that two companies can't get to 20, 30, 40

34:55billion of revenue. What it means is we have to be honest.

34:58This is an industry that's early.

35:00We are all figuring it out.

35:03There's a lot of test budgets that are going at it.

35:05It will slowly and methodically emerge into production, but let's not oversell what this moment

35:12is. Okay, Brad, I want to give you a well -constructed question here to respond,

35:16and then Sachs will go to you if you have some input.

35:18Of the 20 billion, how much of it do you think is experimental?

35:23What percentage is experimental versus production?

35:26Well, you have to strip out the consumer spending for, because that's half of it,

35:33right? Okay, so I'll put aside the consumer.

35:35Sure, great idea. We'll put the consumer subscriptions aside.

35:37They're obviously getting value, or they wouldn't be subscribing, but it's like Netflix.

35:41And by the way, for that, where it can be extremely faulty, and there's no

35:45SLA that you're giving, these are phenomenal products.

35:50Yes, for 20 bucks a month, well worth it.

35:52Consumers have decided it's worth it.

35:53So I think we're in agreement there.

35:55And also, for the individual engineer, of which I suspect there's a few million, who

36:00get to pay $200 a month and have their company subsidize it, the company knows

36:05that these costs are being incurred.

36:07But there is no tick and tying at the end of it, where then you

36:10review the code in a different way, because you're worried that there's hallucinations, as Amazon

36:14just demonstrated. Yeah, there's a story in the FT about Amazon having some blast radius

36:20from some computer -generated AI, and they're putting controls in place.

36:24We'll put... that in the show notes.

36:25Brad, let's get to the specific question I asked.

36:28Of the tens of billions of dollars in revenue between the two companies that's not

36:31consumer, what percentage do you think is production quality versus experimental to Chamath's point?

36:38Yeah, I mean, listen, and I've been, you know, I coined the phrase experimental run

36:42rate revenue, right, versus annual recurring revenue, right?

36:46Like, I think it's, I think Chamath's point is a really important one as an

36:49investor. I have to discern what's repeating, right?

36:52What's recurring and what's not.

36:54What I would suggest is, of course, there's a lot of experimentation because these things

36:58haven't been around that long.

36:59But I suspect, right, that Palantir, the U .S.

37:04government, the U .S. military, NVIDIA, and a lot of other major enterprises would argue

37:12they've gone full production. In fact, it's existential to the wartime effort going on in

37:17Iran right now. That doesn't sound to me like experimental as much as it sounds

37:21like production capability. And I will tell you what will prove this one way or

37:25the other is in the month of March, do revenues continue and go up, right?

37:31No, that's not true. The experimentation can go on forever.

37:34That's not true. That's not true.

37:35Okay, well, if the experimentation goes on forever, that sounds like recurring to me.

37:39We've scratched the surface of the number of companies that even know how to adopt

37:43AI. So, these numbers will go to the stratosphere.

37:45I'm not debating that. Look, I'm on the same side of the bed as you

37:49are. I want these numbers to keep going to the moon.

37:51I'm just being much more circumspect and honest with myself to say, I see it

37:55on the ground. I sit on top of these models.

37:57I am paying these models millions of dollars a year.

38:00I am. And what I'm telling you is my revenues don't go up faster than

38:04their revenues. I'm consuming more tokens every single day.

38:08Do I get more economic output?

38:10I am not. And I would say that my team is at the leading edge.

38:14And so, I suspect a Fortune 1000 company is steps behind my team.

38:19And if I am spending triple every three months and not seeing my revenues tripling,

38:24I suspect these other companies are in a similar situation.

38:28I'd finalize it. But ask it on Friday when you're with Michael Dell.

38:31Because I've had this conversation recently with Michael Dell.

38:34And Michael said a year ago, companies weren't seeing ROI.

38:37Today, they're seeing very big ROI in their AI investments.

38:39But I think that's the question on the table.

38:41What companies? Which companies? Of course, I'm probably seeing an ROI.

38:48Sachs were agreeing that this is experimental in large part.

38:53And this is a new tool.

38:55So, by definition, you have to experiment before you put it in production.

38:58What's your take on this grand debate?

39:01How much of this revenue is experimental versus real?

39:04Well, look, when you're talking about enterprise revenue, what you're really talking about is coding

39:09assistance. That's been the breakout use case.

39:12It's really the first big breakout use case on the enterprise side.

39:16The consumer side has been more of like, you know, research and writing, that kind

39:19of stuff, the chatbots. But enterprise has all been about coding assistance.

39:24My sense is that the demand for code is very scalable.

39:27Software engineers has always been an area of the economy where companies have never been

39:31able to hire enough, even in Silicon Valley, which is the most attractive place for

39:35software engineers to work. We've never been able to recruit and attract enough of them.

39:41The rate limiting factor on the progress of every startup I've ever invested in is

39:46not having enough engineers to code up the product roadmap.

39:49And then you look at the rest of the economy, the Fortune 500 and so

39:52forth and so on. They have hardly been able to recruit software engineers at all

39:55because they've all gone to Silicon Valley.

39:58So, I think you're dealing with a part of the economy where there's always been

40:01a massive... That's really too much of what people do for some of the areas

40:02in the Middleắc sweeping guy.

40:02You're actually like, I don't know.

40:02Kind of a fog not bad.

40:02supply shortage. And I don't know what the natural limit on that is, but my

40:07sense is that there's a tremendous latent demand for the ability to generate code in

40:15large quantities, create new products.

40:17As the cost of code goes down, as the coding assistants get better, you can

40:22code up new types of products.

40:23And then, of course, it's going to lead to agents, which is another way of

40:27basically using the code that gets generated.

40:30So my sense is that this could be very scalable.

40:32I don't know where it taps out exactly.

40:35Where I think Chamath is right is that I think there is a change management

40:40aspect to this in Fortune 500 companies, for example, and they haven't really wrapped their

40:45heads around how exactly they're going to use this.

40:48There's a McKinsey study that showed that a lot of these pilot projects in Fortune

40:52500 companies were experimental. A lot of them were proving not to be successful.

40:56So I do think as you go beyond coding into company transformation, things like that,

41:03it becomes a little bit more speculative.

41:05That's not to say it won't happen.

41:07I think it will happen.

41:08I'm actually bullish. But I do think that we're still waiting to see what the

41:13breakout use cases beyond coding will be.

41:15Probably agents will be the next big one.

41:17But I think Brad's right that that's big enough to see this scale for a

41:22while. Because the thing about code is you're paying for code on a metered basis

41:27right now. You're paying per token, which is kind of an amazing deal for companies,

41:32right? Because before, they had to go through this recruiting process to find engineers, source

41:37them, vet them, keep them happy, give them all the perks, the kind bars.

41:44And so to be able to buy code on a metered basis as the cost

41:48per token keeps going down, it's kind of an amazing deal.

41:51It's metered before. It was just metered on people.

41:53Now, to your point, it's metered in a different way, but it's still metered.

41:58Yeah. And let me just use this term labor displacement, right?

42:02That's like the one part where I might disagree with you is because there was

42:06such a shortage of software engineers.

42:10I think when people hear the word labor or term labor displacement, they might start

42:14to think that $6 billion of incremental revenue means $6 billion of layoffs.

42:19No. And I don't think it does.

42:21And the way to thread that needle is the fact that we were artificially constrained

42:25in the number of software engineers and how they could be used and how rapidly

42:31they could be acquired and all that kind of stuff.

42:33So to be able to now turn that on like electricity, I mean, that's kind

42:36of what we're talking about.

42:37Exactly. Is just such a huge game changer and unlock for the whole economy.

42:43Yes. And that's what I think is really exciting about it.

42:45It's augmenting human labor, right?

42:48We're not at a place yet where it's displacing.

42:50And this is the definition of productivity gains.

42:53I'm going to make just two quick points here.

42:55The place to look for this actually moving from experimental into production is not at

43:02big companies. Big companies are actively resisting this.

43:04Management in big companies will resist it because it means lowering headcount.

43:07And it means the person who implements it might actually implement themselves out of a

43:11job. So that is the natural resistance you'll see in big companies.

43:14That's not where to look for adoption of new tech.

43:16That's not why it's happening.

43:18That's not why it's based right now.

43:19And then you can counter it.

43:21Startups are the place to look at this.

43:24And that's where I am on the ground.

43:26And what I'm seeing there is that startups are using this in production for their

43:31legal work, for their marketing, for SDRs, for their accounting, reviewing legal documents.

43:38This is all work that would normally work.

43:41they would hire consultants for, outsource, or make hires for.

43:46What I'm seeing on the ground is it's production -ready in startups who are using

43:50it in those categories, HR as well, accounting, marketing, all of that.

43:55All that blocking and tackling, all those chores are being done currently with these LLMs,

44:00and they're doing it in production, and they're doing it at scale.

44:02Just a quick second point here.

44:04Here's the J -curve, and this is the question I think we'll get to in

44:07our next segment. When does this become a profitable business?

44:11And you asked this, Sam, in that famous clip on the BG2 podcast, RIP BG2.

44:17Here you go, the LLM industry J -curve.

44:19I just asked Claude to make this for me.

44:22If you have $500 billion, I think you would agree it's probably going to be

44:25around that number, Brad, invested in all of this.

44:28More, a lot more. Okay, so $5 billion is an underestimate here.

44:32And then when do we actually see these large language model companies hit profitability in

44:38a calendar year? It took Tesla, Uber, Amazon, decade plus in each of those cases

44:44to win back their investment.

44:46If you put it at $10 billion.

44:47This is a really good chart.

44:48Here's the precise math on this.

44:50So I am building a one gigawatt data center in Arizona.

44:54When I greenlit that project, I thought it was going to be a $4 or

44:57$5 billion investment. I was like, okay, whatever.

44:59Then it went to $10.

45:00Then it went to $15.

45:01Then it went to $20.

45:02And now it's upwards of $50 billion for the powered shell, for all the land,

45:08for all the permits, then for all the infrastructure, all the people, all of it.

45:12Okay. Sarah Fryer said, I think it was about a year ago, maybe less than

45:17a year ago, that for them, every gigawatt is about $10 billion of annual revenue.

45:21So if you think about that J -curve, Jason, really the way to think about

45:24it is, look, energy equals intelligence.

45:27For every gigawatt that they're trying to spend, they have a five -year payback is

45:30roughly what it means just to get to break even.

45:32And then year six, seven, and eight will be where the profit is.

45:35Now, how do you shrink the J -curve?

45:37You have better silicon. We're going to see something from Jensen in a week or

45:41two that uses a bunch of the stuff that we partnered with him at Grok

45:45on. There'll be other people.

45:47There'll be open source. So all those things can shrink the depth and the surface

45:51area of that J -curve so that you can get out of it faster.

45:55But right now, that thing is roughly accurate, which is it's about $50 billion per

45:59gigawatt. And it's about a five - to six -year payback just to get into

46:04the money. And then it's about $10 billion a year.

46:06And the technology industry has to do something to make this better.

46:10Could I, though, take a step back and give you just a different framing of

46:15all of this? Please. I think the big thing that we're debating is actually something

46:22we've seen in every other technology trend when it started to get some really meaningful

46:28traction. So in the first generation of the internet when you started to see e

46:32-commerce and all these other business models, then in the second big wave of the

46:36internet around the move to mobile and the move to social, and then now we're

46:39seeing this big wave around AI.

46:42And I think what happens is in step one, entrepreneurs are A -B testing what

46:51it takes to raise money.

46:53Okay, that's step one. And I think what has happened is that at least some

47:00parts of the AI ecosystem have decided that this crazy, scary doomerism is the best

47:08way to raise money. Where every now and then, they come out and they say,

47:12all the jobs will be destroyed.

47:14Anthropic, you know, Dario says that.

47:16This thing is sentient. And investors are like, okay.

47:19okay, here's 10 billion, here's 50 billion, here's 100 billion.

47:23But then the second step happens, they get the money, they start to do the

47:27training, they start selling. And then the investors are like, hey, where's the revenue?

47:31And so then they start selling everywhere.

47:34And then if you see in the Department of War example, all of a sudden,

47:39you flip flop, you become sort of an unserious dilettante, like partner to the American

47:43government, they're like, we're going to boot you out, that's billions of revenue gone.

47:46And what happened? So same investors that gave billions of dollars, like, hey, hold on

47:49a second. That's absolutely not allowed, you need to conform and get back on track.

47:53And so what does Dario do?

47:54He flip flops. And he's like, oh, I'm really sorry, I didn't mean to, let's

47:58sort of make good. All of that, to me is an industry that's still in

48:02its very early phases and still figuring out what its place in society is.

48:07So what is the problem?

48:09The problem is the following two clips, and I'll just have Nick play these and

48:13I'd love your guys's reaction.

48:14The one thing, though, that I think even now is underestimated by all actors in

48:21industry and including in Silicon Valley is how disruptive these technologies are.

48:26If you are going to disrupt the economic and therefore political power significantly of one

48:33party space, highly educated, often female voters who vote mostly Democrat, and military and working

48:41class people who do not feel supported, and you feel like that's, you believe that

48:46that's going to work out politically, you're in an insane asylum.

48:49Like, that you cannot have it.

48:51This technology disrupts humanities trained, largely Democratic voters, and makes their economic power less, and

49:00increases the power, economic power of vocationally trained, working class, often male voters.

49:07And so these disruptions are going to disrupt every aspect of our society.

49:13And to make this work, we have to come to an agreement of what it

49:19is we're going to do with the technology, how are we going to explain to

49:23people who are likely going to have less good and less interesting jobs from their

49:28perspective, and how is it that we are going...

49:31And by the way, on the military thing, these technologies are dangerous societally.

49:36The only justification you could possibly have would be that if we don't do it,

49:41our adversaries will do it, and we will be subject to their rule of law.

49:46So if you decouple this from the support of the military, you're going to have

49:50an enormous problem explaining to the American people why is it that we're absorbing the

49:56risk of disrupting the very fabric of our society, including the most powerful parts of

50:02our society, if it's not because it's about maintaining our ability to be American in

50:08the near term and long term.

50:10Now watch Sam's reaction. Fundamentally, our business, and I think the business of every other

50:15model provider, is going to look like selling tokens.

50:19But we see a future where intelligence is a utility, like electricity or water, and

50:29people buy it from us on a meter, and use it for whatever they want

50:34to use it for. So if you take those three messaging veins on a spectrum,

50:39one is we have a sentient super god, we're the only ones that can protect

50:43you from it, but you know, your days are numbered, that's Dario.

50:46Alex, which is, hey, hold on a second, you can't have it both ways.

50:50You can't both say it on the one hand, and then try to run the

50:52fabric of society and flip it, you need to be much more circumspect.

50:56And then Sam's, which is we want to sell tokens.

50:58as a service. I think the point is that this industry right now, that revenue

51:03traction, if anything else, has distracted people from actually getting on the same page and

51:08being much more methodical and much more reliable and trustworthy in explaining all of this

51:15and managing the expansion of this.

51:17And so what I would say is all of this fundraising gobbledygook has actually created

51:21this breathlessness that is not useful and isn't helping.

51:26And I would say there needs to be a lot more seriousness by these folks

51:30to actually run this business thoughtfully.

51:32You can't be a dilettante.

51:34You can't flip -flop. You can't pressure test, A -B test this kind of messaging

51:38in public. But I understand why you're doing it because the stakes are so high.

51:43You're playing this enormous poker game.

51:45But I think we need to do a better job of explaining all this to

51:47people because right now, my end of this is look at this chart.

51:51This is now the result of those three messages.

51:54Here is where AI is.

51:55It is slightly above the Democratic Party and an autocratic state.

52:00That's where AI is. ICE is more popular than AI.

52:05So it's not very popular.

52:07So to me, this is really the crux of this, where we are not really

52:13being honest. It would be much better if we said soberly, there's a lot of

52:17experimenting. This revenue is great, but we don't really know what's real.

52:21We're going to try to figure it out.

52:22We're going to work methodically.

52:23There's a lot of regulated industries.

52:25We're going to work within those.

52:26We're not going to flip the law and the rules.

52:28Licensure will still mean something.

52:30That's a way better, thoughtful, mature message.

52:36And Brad, what do you think?

52:37And rant. And rant. Great rant.

52:40Brad, does the industry have a PR problem?

52:43Obviously, these recent surveys, and especially comparing them to China, where people see AI as

52:50abundance and like this incredible new technology they want to embrace here, people are scared.

52:54People are scared they're going to lose their job.

52:56People are scared about wealth disparity.

52:59The rich get richer, the poor get poorer.

53:01There's a lot of fear here in the United States.

53:03What can our industry do to turn this around in terms of communication from the

53:09big companies? They don't seem to be communicating in any coordinated fashion.

53:14And they obviously are scaring the shit out of the public.

53:19Yeah, no, listen, I think it's a fair rant and a fair point.

53:22At the start of the Industrial Revolution, at the start, you know, in the late

53:261800s, we had similar social responses to innovations that were occurring.

53:32We, in fact, had some violent clashes.

53:34We had demonstrations in the street.

53:37We had the entire robber baron movement.

53:39You know, so class warfare and worse is, you know, has come with other, you

53:44know, kind of industrial changes of this magnitude.

53:47So it doesn't surprise me that we have a lot of anxiety by people that

53:51they may lose their job.

53:52And I think there are people out there who are kind of forecasting into the

53:56future in ways that are scary to, you know, the average person who's listening to

54:02this. And I don't think that's particularly helpful.

54:04So could we do a better job messaging?

54:06No doubt about it. But if I just rewind to kind of where we started,

54:11I actually think the industry is, you know, this is going to be a pivotal

54:15year for the industry to demonstrate, right, how this is really beneficial for humanity.

54:21I think we're going to be able to demonstrate that it's very beneficial from a

54:25healthcare perspective, from a drug discovery perspective, from an education perspective, etc.

54:30But we need to have a coordinated effort because Shema's right, it's deeply unpopular in

54:35the country. I happen to...

54:36to be on the optimistic side of this, 70 % of the jobs that exist

54:40in the United States today did not exist 40 years ago.

54:44We've gone through the digital disruption that put a lot of people out of work,

54:49but the abundance and the recreation of new jobs expanded the pie for largely everyone.

54:57I think that will be the case here.

54:59If you listen to Dario, he says the concern is that the disruption occurs at

55:02a faster and bigger rate, and so that we can't keep up with that replacement.

55:08I think that's another fine point.

55:09But if we just go back to where we started the conversation, which was, are

55:13these good investments? That's not the conversation.

55:17No. Of course, they're good investments.

55:19Of course, you're going to make money.

55:21That's not what it's about.

55:22That's not it. He asked the question.

55:24You made the argument. Jason asked the question.

55:27Are these companies simply selling tokens at a loss?

55:31We moved into the - No, no, no.

55:33They're selling at a profit.

55:35I'm buying them and losing money.

55:38In the 1849 gold rush, Anthropic and OpenAI and all of these model makers are

55:43selling the pick and shovel in the gold rush.

55:45I am buying it, and I'm trying to pan for gold.

55:48But as with the gold rush, most of these companies will go out of business.

55:53All I'm saying is, if we are really circumspect and honest, there is still way

55:59more to figure out than has been figured out.

56:01This is not a solved problem, and I think it would behoove everybody to just

56:05tell the truth about this.

56:06It would be way better to be honest.

56:08This is not figured out.

56:09I would say, I think the data, the cards that are being turned on the

56:12table move me in the exact opposite direction.

56:15Okay. Let me get Sachs involved, and then I'll give my take.

56:17Sachs, do you have any thoughts here?

56:19Well, I have some thoughts on the question you asked about, is the industry doing

56:24a good job with PR?

56:25I think the answer is clearly no.

56:27I think they are scaring the bejesus out of the public, and that's why the

56:30popularity is right down there with, I don't know, what was it?

56:33Iran? It's pretty - I think we're a little more popular than Iran, but -

56:39Well, Iran's had 100 years to f*** it up, so we've only had two.

56:43Or 47, anyway. Yeah, Iran's had 47 years to f*** it up.

56:47We've only had two. But it is very much a US -specific problem.

56:50If you look at data, sentiment data across countries, what you'll see is that other

56:56countries are much more optimistic about AI than the US.

57:00I think that Stanford did a study on AI optimism.

57:03They simply asked the question, do you think AI is going to be more beneficial

57:06than harmful? Something like 80 % of people in China said yes.

57:10In the US, it was in the 30s, and it might be even lower now.

57:13And it's not just China in the US.

57:15You see across Asian countries, they tend to be pretty optimistic.

57:18And then the US and Western Europe tend to be pretty pessimistic about it.

57:22I think that's less about the reality of AI and more about our media environment

57:26and who influences it. Obviously, you have the influence of Hollywood has created a lot

57:31of dystopian films about AI.

57:34You've got the fact that, like we talked about, these CEOs are doing a horrible

57:38job and they keep talking about putting everyone out of business.

57:40I mean, this has, I think, been not accidental.

57:43I would say some of these CEOs are speaking this way because they're not very

57:48good at comms. I think others are actually doing it because they see a strategy

57:53there. They're going for a regulatory capture agenda.

57:56This is such a good point, Sachs.

57:57It's delusions of grandeur, plus they're positioning their companies.

58:00Yeah. It could be for financing reasons, like you've mentioned, Shamath.

58:04They want to tout this stuff for fundraising.

58:06But also, I think that some of it is to create a regulatory backlash that

58:13they can then control, you know, create a license.

58:15scheme or permissioning scheme. And that's a big part of it too.

58:19And then I think you just have the fact that in our media environment, the

58:24scare stories are the ones that get a lot more attention than the heartwarming stories.

58:29If it bleeds, it leads type thing.

58:32So you can just see how unpopular it is for all of these reasons.

58:35You know, New York is about to outlaw medical and legal advice from AI chatbots,

58:40which by the way, that's probably the most obviously valuable and highest ROI thing for

58:46a consumer. And it hurts poorest people the worst.

58:49It hurts poorest people the worst.

58:51But you understand like if you're say a professional association that sees it as your

58:56job to protect your industry from disruption, you might actually want to spread FUD about

59:02AI in order to then seek those protections through your state legislature.

59:07Well, if you have companies that are fanning those flames and those companies are the

59:11ones in the industry, it's making your job even easier.

59:14But just think about the poorest person, they can't afford a lawyer, and they want

59:18to do their own research.

59:19And they research the legal stuff to in order to fight an eviction, or there

59:24are poor people who don't have a primary care doctor, they're not insured, and they

59:27find a way to deal with, you know, some medical issue they're having, this is

59:31the greatest thing. It levels the playing field for poor people or people without resources.

59:39So this is the craziest, stupidest legislation ever.

59:41But New York City is a disgrace.

59:42I give them this crazy out of the week.

59:44No, the problem is very specifically that these people that rely on these models to

59:50make a healthcare diagnosis or get a legal opinion to help improve their lives, the

59:55makers of those tools are telling everybody that they're about to bring death and destruction

1:00:00upon the economy and the world.

1:00:02So then the lawyers and the doctors are like, well, then maybe we should slow

1:00:06this down. And they tell their lobbyists, who then go to New York, and then

1:00:10tell the New York legislators, hey, these guys are like trying to wreak havoc.

1:00:15And then they're like, oh, yeah, well, then maybe we should shut it down.

1:00:17That is the loop that's happened.

1:00:20That was the Bernie Sanders moment this week, where he said, we ought to have

1:00:23a moratorium on all data centers being built in the United States, because AI is

1:00:28dangerous. That was his message.

1:00:30And that is what he's pushing.

1:00:31And actually, that brings me to another point, which is, if you look closely at

1:00:35Bernie Sanders messaging, one of the talking points he used was literally verbatim from Future

1:00:39of Life Institute. I think it was something about how AI is less regulated than

1:00:43a sandwich shop, which is just not true.

1:00:45But Future of Life is one of these EA funded Doomer think tanks.

1:00:50And they've got something like a billion dollars.

1:00:52Vitalik Buterin donated $600 million of dog coins to the...

1:00:56Anyway, you guys, I mean, this is one really weird sort of quirk about our

1:01:01media environment is we have these EA funded think tanks with literally billions of dollars.

1:01:07You know, it's guys like Dustin Moskovitz and...

1:01:10They're the D -cells. They're the democratic socialist kind of arm.

1:01:13It's so weird that like New York is now taking the crown of most retarded

1:01:16state from California. I don't know how this happened, but they just seem to be

1:01:20making every mistake possible. Yeah, but hold on.

1:01:22Let me just finish my point.

1:01:23Because you've got these, let's call them Doomer think tanks funded by these EA billionaires.

1:01:26They have literally billions of dollars.

1:01:28You can influence a lot of public discourse with that, a lot.

1:01:32And they are behind a lot of the NIMBY stuff around data centers.

1:01:36They've been spreading a lot of the FUD around data centers, increasing your electricity prices,

1:01:40which again, I think is a solved problem now because the users, the AI companies

1:01:46have agreed to pay for the incremental costs and stand up their own power generation.

1:01:49They've been spreading a lot of stories about water usage, which is just totally...

1:01:53totally... totally... Totally... I mean, the modern data centers recirculate water, so they don't use

1:01:58up water. But again, you've kind of got these doomer groups who are just trying

1:02:01to stop AI however they can.

1:02:03And they're extremely well funded, and they're having a big impact.

1:02:06And I think actually, this is one of the reasons why you're seeing in the

1:02:09US, again, that AI, I think is, it's basically the least popular thing they can

1:02:14poll for, except for the Democratic Party in Iran.

1:02:16And by the way, FLI, the Future Life Institute, they also fund journalism fellowships and

1:02:22endowments of publications. Who probably writes negatively about AI.

1:02:26Yeah, exactly. Here, Sachs, look at this chart.

1:02:28It goes back now a little bit earlier than 23, but I had the data

1:02:32accurately from 23, so we're going into the fourth year.

1:02:35About 40 % of all protested data centers in America get canceled.

1:02:41And so in 2023, this was a non -issue.

1:02:44There were a few data centers that were protested, and a few of those, 40

1:02:48% of them, I think it was literally like one or two, got canceled.

1:02:52But then starting in 24, when you have this divergence of messaging or this chaotic

1:02:57slipshod messaging, and it was just a fever pitch to raise money, what you started

1:03:02to see was this fomenting of negative perspective by individual people on the ground.

1:03:08And so in 2024, about 40 % of all protested data centers were canceled.

1:03:13Still a small number, you could ignore it.

1:03:15But last year was when the bottom fell out.

1:03:18We had about 25 data centers canceled, about 5 gigawatts that got canceled.

1:03:24If you use Sarah Fryer's number, that's $50 billion a year of revenue, which is

1:03:31off the table because of what happened in 25.

1:03:34Now, that has implications to everybody.

1:03:37Look at the amount of taxes that that would actually raise for federal and local

1:03:40and state governments. All gone, vanished.

1:03:42In 26, just at the end of February, there are about 100 data centers being

1:03:49protested, which if you flow that through, will mean about 40, will get canceled.

1:03:56And that number right now is about 7 gigawatts, so another $70 billion a year

1:04:01of revenue. So just last year and this year, we've taken off the table $120

1:04:06billion of QUM revenue per year.

1:04:10This is a wake -up call that this messaging is wrong.

1:04:12These people are not doing what is right on behalf of a very nascent and

1:04:17critical industry for America. There's only so much that Sachs can do, the White House

1:04:21can do. All these other people are kind of at the periphery.

1:04:25But if the people that are on the ground don't get their shit together, this

1:04:29is a national disaster. Just to give people a sense of where this is happening,

1:04:34almost all of these cancellations are Virginia and Indiana, according to some just recursory research

1:04:39here. And there have been zero cancellations due to local opposition here in the great

1:04:44state of Texas, where we have over 150 gigawatts of data capacity requests.

1:04:49So if you want to do this, come to Texas, talk to Abbott, talk to

1:04:53Ted Cruz. You just CC them on your tweet, and they'll have you to the

1:04:56poker game, and they will greenlight it.

1:04:58Brad, before we move on, I want to get your opinion on open source and

1:05:02how powerful it is and how powerful Apple Silicon is getting.

1:05:07I'm not sure how you factor this in at altimeter into your thinking, but this

1:05:12seems to me to be a massive headwind against the two big bets you have.

1:05:17So all of these open source models, we started running them, picking up about 85

1:05:22% of our tokens right now.

1:05:23And every startup I know, is saying we are standing up our local models, and

1:05:28we only use the top models, the paid ones.

1:05:32uh when we have jobs we can't do so i'm just curious your thoughts on

1:05:35that and you can add to that the auto research project from karpathy that came

1:05:40out this weekend for people who don't know we now have a group of tinkerers

1:05:45who are setting up their open clause and now setting up a large line of

1:05:47models and now trying to train them with his auto research tool this seems like

1:05:51a parallel track that could be material i'm just curious if you're monitoring it at

1:05:56all i mean very enthusiastic for open source okay we see it widespread use everywhere

1:06:04but here's the interesting thing you know for the advanced companies they're doing some like

1:06:09planning you know with the frontier labs and then they're kind of doing the execution

1:06:13if you will with the open source models so they're running an ensemble of model

1:06:17strategy but here's what i think is more impressive we have incredible open source models

1:06:24nearly on the frontier and notwithstanding that we're seeing companies like anthropic at five or

1:06:31six billion dollars of revenue in a single month which is extraordinary we've never seen

1:06:37anything like it in technology and that's in the face jason of all this open

1:06:41source usage so what does it tell me it tells me that the tam is

1:06:46dramatically bigger than any of us think that it is and that you know when

1:06:51we when we look back on this period you know that will be the big

1:06:55takeaway it's a takeaway with uber the takeaway with google the takeaway with amazon the

1:06:59tam was way bigger we've crossed an important threshold open source will be a part

1:07:03of it but clearly the frontier frontier labs can do well even in the face

1:07:08of it all right a little housekeeping the all -in summit is coming and liquidity

1:07:13is uh i think it's sold out we're about to sell out we might have

1:07:16a couple tickets left you can find both events at allin .com slash events and

1:07:21all in summit tickets if you want to get there quickly before they sell out

1:07:25september 13th 14th and 15th in los angeles again and uh for all the all

1:07:30-in listeners we're launching a survey today this is super important to take the all

1:07:35-in survey if you made it to this point in the podcast if you are

1:07:38an early true believer in the pod if you're one of the uh all -in

1:07:43stands we need you to fill out this survey all -in .com slash survey all

1:07:46-in .com slash survey all right let's uh wrap up with this final story that

1:07:51went viral the millionaire tax has hit washington state howard schultz ceo uh long -time

1:07:57ceo of starbucks has bailed and he's gone to miami surfside he's in surfside he

1:08:05bought it he bought a condo in surfside he uh he pulled a jcal he

1:08:08pulled a jcal i think you mean a saxophone yeah i was never i was

1:08:13never a starbucks liberal before i left the state of california listen i i don't

1:08:17know how many times i have to make this correction i am a moderate i

1:08:20literally voted four elections in a row for republicans people have asked me for the

1:08:24receipts pataki giuliani um and bloomberg i literally for almost a decade okay voted exclusively

1:08:32republican washington's millionaire tax passed this week here's what the tax is people making more

1:08:38than one million dollars a year will pay an extra 9 .9 percent in tax

1:08:42starting in 2029 the budget center estimates the tax will impact 30 000 households bring

1:08:48in another four billy uh for the state's general fund um the funds are supposed

1:08:54to go towards public schools higher education health care in a huge coincidence on the

1:08:58same day the new tax was passed power schultz the billionaire starbucks founder um huge

1:09:04goals did you say yeah just unrelated unrelated unrelated unrelated Unrelated story.

1:09:11Yeah. Unrelated news. He will be leaving Seattle after a 44 -year run because he

1:09:16found out about these incredible Cuban sandwiches in Miami.

1:09:19There was an opportunity to buy a $44 million condo in Surfside.

1:09:23He couldn't pass it up.

1:09:24It just happened to be on the same day that they passed a millionaire tax.

1:09:27He had the Cuban sandwich at Le Sanguiche, and he fell in love.

1:09:34Schultz has been getting crushed after saying when he ran for president that he would

1:09:38be willing to pay more taxes, Bezos obviously left back in November of 2023, and

1:09:44people speculated maybe the 7 % capital gains tax would have influenced that.

1:09:50Who knows? So I guess, Chamath, what is the endgame here?

1:09:56Because for these local politicians, they must have learned the lesson that people of means

1:10:05can move. They have the ability to buy new homes, put their old homes on

1:10:11the market. They're very mobile, and they could even leave the United States and go

1:10:16to Singapore or Dubai or other locations in the world.

1:10:20Why are they still enacting these, and will they continue to still enact these until

1:10:24we get to 60%, 70 % tax rates, and we just lose all of the

1:10:28creators, and this becomes Anne Randian?

1:10:30I think that state politicians on the West Coast are very ineffective and not very

1:10:36smart. Nick, there's a tweet that was published, I think maybe it was an infographic,

1:10:42that showed net migration rates of every single state for 2025.

1:10:48Washington is a few months behind California in trying to enact these stupid taxes, and

1:10:57the reason they're stupid is these kinds of things don't work at the state level.

1:11:01And we know what it's already done in California because the Hoover Institution just published

1:11:05something this morning, and it's a complete indictment of what the billionaire tax was trying

1:11:12to do. And by the way, this billionaire tax is only polling right now at

1:11:1625 % of the votes it needs, so maybe it'll find a way to get

1:11:19on the ballot. And then even then, it'll have an uphill climb to get voted

1:11:23in. But look at the destruction that it has done in California by just announcing

1:11:28it. The Hoover Institution basically ran this Monte Carlo simulation.

1:11:32They ran 100 ,000 runs, and in 71 % of those runs, it comes out

1:11:37with a negative NPV. And if you expected value it out, it's about a $25

1:11:43billion hole. They also found that they overcounted the number of billionaires in California, so

1:11:50that number was wrong. They undercounted the amount of revenue that they pay, so that

1:11:54was wrong. And they overcounted the estimate of how much money that they would make.

1:11:58So that was wrong. So they're not good at math.

1:12:00They're not good at math.

1:12:01So when you add it all up, they thought they were going to make 100.

1:12:03They're actually going to make 40.

1:12:05The people that left pay $3 billion to $5 billion a year of taxes.

1:12:12It's going to create a $25 billion hole.

1:12:14You're going to have the middle class that's now going to have to foot this,

1:12:17because this is net revenue that's not going to come into the budget.

1:12:20That's about $2 ,500 per middle class household.

1:12:24There's about $10 million in California.

1:12:26So that's what's happened just by making the threat.

1:12:30But Washington had a 23 -hour debate and passed the law.

1:12:35So I suspect when you look back on this in 18 or 24 months, it'll

1:12:39be as bad or worse than California.

1:12:42These things don't make sense.

1:12:44The reason they don't make sense is that you are putting good money after bad.

1:12:48we all know that money that goes to the state governments are wasted we just

1:12:53don't know how much and so when you keep asking more eventually the smart people

1:12:58say enough's enough i'm out of here we might find out how much i think

1:13:01uh barry weiss is on the case i don't know if you saw her do

1:13:04her cbs report this way she's she's going hard for fraud and until you get

1:13:09fraud out of the system i don't think you have the moral high ground to

1:13:12raise taxes i think that should be the message that all americans that's very send

1:13:17to politicians that should be your campaign promise when you run okay whatever whatever i'm

1:13:21jason calaganes and i will get rid of fraud and lower your taxes look you

1:13:25may have seen an even more severe tax was proposed at the federal level where

1:13:29bernie sanders and and i think roe connor came out with their version of a

1:13:34national wealth tax where it wasn't just five percent once like in california it was

1:13:38five percent per year year so in other words in roughly 20 years the federal

1:13:43government's just going to take all of your money i mean that's it look this

1:13:46is socialism this is another way to get to the same end point which is

1:13:49the government owns everything they seize well i mean the seizure part of it i

1:13:53think is the nuanced point we have to get across which is if you earned

1:13:58it and paid your taxes already it's your mistake and just decide you know what

1:14:02we didn't take enough 10 years ago we need to go seize that hey when

1:14:05you sold yammer we didn't take enough we need to take it now raise your

1:14:10hand if you believe the things you own are better off being owned by bernie

1:14:14sanders and roe connor raise your hand if that's what you believe i mean you'd

1:14:18have to be an idiot to believe that well i'll tell you the last time

1:14:22we saw these proposals of asset siegers was during the gilded age you know 1870

1:14:27to 1920 you know then it was carnegie and rockefeller you know what's interesting i

1:14:33went back and looked at it there were actually like it was actual warfare we

1:14:37had hundreds of people killed in clashes um you know during the great railroad strike

1:14:42the pullman strike etc um and it was all over this and so i think

1:14:46shame on the politicians that are fanning the flames of class warfare um we all

1:14:51need to bring the temperature down there are fair debates on whether states have enough

1:14:57resources to fulfill their obligations to the citizens there are fair debates about fraud all

1:15:02has to be taken on but i think it's interesting in the state of california

1:15:05right i think the teachers union is against the the billionaires tax because they know

1:15:10it's going to lead to less dollars for education for the state of california matt

1:15:13mayhan who's running for governor is against the tax the current sitting governor democrat against

1:15:18the tax right they all need to step up and explain not just that they're

1:15:23against the tax but we you're either on the side of business and entrepreneurs and

1:15:28creativity and moving the state forward and growing the economy or you're against it and

1:15:33that's what's at stake here and fortunately the outcome of the battle uh you know

1:15:38during the gilded age was that america didn't abandon entrepreneurialism we didn't abandon capitalism like

1:15:44europe did and now leaned into it now we played it out one point on

1:15:49that so you mentioned that some of the unions in california are opposed to this

1:15:53this asset seizure tax that's only because they weren't cut in on it right so

1:15:58there's already rumors that the california teachers association is working on their own version of

1:16:04a billionaire asset seizure for not this selection cycle but for the next one yeah

1:16:09and next time they're going to have their ducks in a row and they're going

1:16:12to have all the pigs at the trough and all the unions are going to

1:16:14get together because the seiu uhw they did this on their own so again they

1:16:21didn't allow all the other groups to wet their beak so i think that unfortunately

1:16:26i think that's me correct If this one doesn't pass, they'll correct it for 28,

1:16:30and it's more likely to pass because they're all going to do it.

1:16:33And the other thing is that I think that by 28, this national wealth tax

1:16:39will just be a standard part of the Democratic platform.

1:16:42It's going to be table stakes.

1:16:43Yeah, it's table stakes. I think that the Bernie Sanders Ro Khanna position will be

1:16:47the position of the Democratic Party.

1:16:48And you even see Gavin Newsom creating wiggle room for himself to embrace this position.

1:16:53If you look closely at his statements formally opposing the BTA in California, what he

1:17:01says is that a state can't do this by themselves because they got 49 other

1:17:04states to compete with. So what he's saying is that, you know, look, California is

1:17:09operating in a comparative environment.

1:17:11One state can't do it.

1:17:13And then he's leaving the other part elliptical, which is, well, the federal government needs

1:17:18to do this. And I think that you can expect him to embrace that position

1:17:21by 2028. There is a way out here from the socialist movement.

1:17:27It's a, it's very simple.

1:17:28If you think from first principles, what does an American want?

1:17:31What does an American family want?

1:17:32What are mothers and fathers in this country want?

1:17:34They want to educate their kids.

1:17:36They want to be able to own a nice home.

1:17:38They want to have decent healthcare.

1:17:39They want to have healthy food.

1:17:41It's a very small subset of issues.

1:17:43And AI is uniquely positioned to solve a lot of these problems.

1:17:48And entrepreneurs can come in and take these highly regulated industries, if we're allowed to

1:17:53participate in them, education, we have to break this accreditation, you know, cartel, and then

1:18:00housing, we have to break these regulations like the great state of Texas, Nevada, and

1:18:05Florida have. And then, you know, when it comes to healthcare, this is where AI

1:18:09could have a tremendous impact and entrepreneurs can have a tremendous impact in lowering the

1:18:13cost of healthcare and letting people solve for that with their own, you know, healthcare

1:18:18led, you know, self led healthcare.

1:18:20These are the problems. If you solve for these problems, people's homes, people's health, people's

1:18:25education of their kids, we're going to solve these problems.

1:18:28And we don't need to go to socialism and seize people's assets.

1:18:32That's what entrepreneurs should be doing.

1:18:33That's what entrepreneurs should be working on.

1:18:35And that's what we were the government.

1:18:36That's where Trump's uniquely qualified.

1:18:38He is the regulatory breaker.

1:18:41He got nuclear back on the agenda.

1:18:43No other president had gotten nuclear back on the agenda for America.

1:18:47He can get housing back on the agenda.

1:18:49We have to break those things and not start foreign wars, my earlier point, and

1:18:52start creating houses for Americans.

1:18:54Another amazing episode of the All In Podcast.

1:18:57Gentlemen, appreciate your time. It's amazing how you always give yourself the last word, J.

1:19:01Cal. Well, I go last.

1:19:02If you'd like, you can moderate and I'll go first.

1:19:05But I always go last.

1:19:06But you can, you can give me a round of applause or you can throw

1:19:10a tomato. Go ahead, Sax.

1:19:11It doesn't matter. It's all good.

1:19:12It's all good. Go for it.

1:19:13All right, everybody. Another amazing episode of the All In Podcast.

1:19:18Thank you, Bestie Brad, for joining this.

1:19:20Thank you, Bestie Brad. Love you, boys.

1:19:21Bye -bye. Bye -bye. We'll let your winners ride.

1:19:26Rain man, David Sack. I'm going all in.

1:19:31And it said, we open source it to the fans and they've just gone crazy

1:19:34with it. Love you, Besties.

1:19:36I'm going all in. Let your winners ride.

1:19:42I'm going all in. Besties are gone.

1:19:46That's my dog taking a notice in your driveway.

1:19:54We should all just get a room and just have one big, huge orgy because

1:19:57they're all just useless. It's like this like sexual tension, but they just need to

1:20:00release somehow. Wet your beer.

1:20:04Wet your beer. We need to get merch, these are back I'm going all in

1:20:16I'm going all in

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