The Manosphere Report

0:00all right everybody welcome back to the number one podcast in the world we've got

0:05the core four here and dare i say the king of atoms the king of

0:11atoms yes captain travis kalanick is here how you doing brother i'm pretty good pretty

0:17good i'm uh sitting here doing the podcast just next door to david ah yes

0:23there you go don't reveal our locations please don't dox i didn't put my address

0:27out there dude no that's true don't worry mondami did he's outside your houses right

0:32now asking them to foreclose like 3 .9 or something yeah he's he he decided

0:37there's more rich people left in new york so he's looking for other is it

0:41is it 3 .9 a year is it per year or is it i don't

0:46know if the percentage has been released yet but the speculation i've seen is 3

0:49.9 but i don't think that's final but yeah it's a piada tax so if

0:53you have a second home yeah every year wow and by the way it's for

0:58any home over 5 million there's no homes under 5 million in manhattan this is

1:03not a rich person tax this is within 15 miles of midtown manhattan you're paying

1:10an extra tax uh but only but jcal only if it's a piada terrace so

1:14what it means is that the most homes well yeah but the most elastic part

1:18of the market is what they're targeting for this tax so in other words people

1:22who don't live in new york who just have it as a second or third

1:25home who could buy that property anywhere yeah are now being taxed the most so

1:31what do you think that's going to do it's going to have a massive impact

1:34on demand for second homes in new york which will crash the whole market yes

1:39congratulations mom dummy but in a weird way that'll be good for housing affordability in

1:44new york well that that's sort of the the claim but i don't think it'll

1:47be good for it because there'll be no incentive to build more yeah all units

1:52matter every time you add units people upgrade and it's not like these are going

1:56to be low income housing like penthouse on 57 street or you know in gramercy

2:02that's not low income housing you'd have to break it into seven units makes no

2:07sense but by the way i don't know if you guys saw the video not

2:09to get too serious but he's doxing a certain billionaire who owns a certain place

2:14and he's literally pointing at his home no i said that to you jason he's

2:17not doxing because everybody's known for years that ken griffin bought that place everybody knows

2:22that address everybody knows that unit we all knew it it was marketed widely i

2:26don't think that's really doxing he doesn't live there and everybody knew he owned it

2:30it would be very different if it was a place where somebody was keeping their

2:34primary residence and you didn't know and they stood in front of the house that

2:37i would agree with you i think this one is a little bit more tenuous

2:40okay fair enough but what i will tell you is it's a dog whistle crazy

2:44people and this thing's been seen by 30 40 50 million people now it's a

2:49dog whistle that's true that's that's the next united healthcare ceo and in the week

2:53that a fire a molotov cocktail and a bullet gets shot into sam altman's house

2:58it's deadly serious and if you reversed it i always reverse it what if a

3:02republican sat outside of bernie sanders second or third home and said we should this

3:07is his this is his summer home we should add you know taxes to it

3:13and i'm sure you could look up bernie sanders home pretty easily so just before

3:17you point at people's homes and say this is the villain be careful folks because

3:22then if something does happen to that person like you know what happened to sam

3:26altman this week you can feel however you want about him but nobody deserves to

3:29have their house fire bombed or shot at period full stop i just think that

3:35it's gonna kill the demand for you know maybe people already have a home in

3:41new york like ken griffin they probably are just gonna suck it up and pay

3:45the tax and keep whatever they have but if you were a person who is

3:49thinking about buying a piada tear in new york there's no way you would do

3:53it now yeah because you don't know what the tax rate is going to be

3:56and it's going to keep going up after a decade with interest and inflation you've

4:01effectively almost doubled the price of your unit so if you're going to buy 10

4:03million dollar unit you're probably then looking at a 20 million dollar purchase price just

4:10to break even after about 10 or 11 years that's crazy the math doesn't work

4:14and what is the downstream effect of these individuals not coming to new york going

4:18to a knicks game nothing going to a restaurant no they spend money they spend

4:22money in new york they have their birthday party they do all kinds of things

4:26i'm not a big fan of the piada tear culture i i own one house

4:29i like this whole multiple houses you flitter flattering everywhere it ruined london because when

4:35when you look at london where do you vacation shamath where do you vacation i

4:39go to a hotel okay so my point is this that i think the way

4:44that it works is it's not just pied -a -terre if you if you own

4:49a home that you fully rent out but that is not the primary residence of

4:53the person who is renting it it's also a problem so this is any even

5:00like a like a you know you had a two -week rental or one -week

5:03rental or a 30 -day rental or even a five -year rental and it was

5:08somebody else's second home the owner still gets gets hit so the rental the sort

5:14of rentals of like folks who want to come to that city or who don't

5:18want to own in that city uh but it's a second place the second place

5:23thing goes away so maybe this is just good for hotels i think it's good

5:27for hotels but if you look at london it's probably the best example where there

5:31was a lot of people who used london as a place to store assets real

5:35estate became the primary way in which they would do that it hollowed out parts

5:40of london where it's not as if it was unlivable it's just that it was

5:44unlived nobody was there you drive around chelsea you drive around certain parts of london

5:51and it was like a ghost town on like a thursday night or a friday

5:54night that is an issue is the land banking it's like your bitcoin is hollowing

5:59out a neighborhood and there is something there but you know what the whole uh

6:03housing thing is complete cap and utter bullshit because if you move to a place

6:09like austin where you are in nevada or florida you see what happens when you

6:13allow people to build units in austin three years in a row rents and housing

6:19prices have gone down while net migration has gone up but that's been good right

6:24for austin you guys would say that's incredible yeah amazing austin has like roughly doubles

6:29the city over the past decade and yet the rent for you know whatever one

6:33or two bedroom apartments gone down that's incredible so in other words if you let

6:38people build to satisfy the demand you won't have this problem and then who's stopping

6:43the building it's democratic cities it's nimby people and then in a republican town they're

6:50actually building units for and affordability so you have one group saying they care about

6:56affordability and they're doing nothing about it and they're stopping it and in another place

7:00they're like we're just gonna let you build because it's your right to build because

7:03it's your land that's the approach in texas it's your land you have the right

7:07to develop it go by the way the high end of the market in london

7:11has basically turned over and collapsed sacks to your point like they introduced the stamp

7:14tax which i think is that's a quick to this tax that the New York

7:18City mayor is proposing. And if you look at London as a guide, the real

7:22estate market just bid it at the high end.

7:25And I don't think that's going to be good for that city or even the

7:28UK as a whole. There's a handful of cities where people do what you say,

7:32which is kind of park money there.

7:33The reason why they do that is because they believe that that city, A, has

7:38the rule of law and B, is a unique world -class city that's going to

7:41keep appreciating. And if you have new management that doesn't really believe in the rule

7:46of law, that basically keeps imposing all these arbitrary taxes, that money is going to

7:50flee and find other kinds of investments.

7:52People aren't going to park their money there.

7:53That has to be a bad thing for the city.

7:55It's like, who cares if the top floor of that building where Ken Griffin lives

8:00is owned by one guy who isn't there that much.

8:02It's not going to affect the city that much.

8:03But having all these billionaires from all over the world decide to park money in

8:08that American city has to be good for the US, just like it's good for

8:12the UK. And if you give that up, then again, the money will just go

8:18somewhere else. Well, to your point - The other thing is they're already paying taxes

8:22on the property. And because they're not there very often, they're not using city services.

8:28So they're paying taxes on the property.

8:31They're not using city services.

8:33They're profitable to the city.

8:34Yeah. Think about a developer who's underwriting some new project.

8:39The fact that a whale like Ken Griffin is willing to overpay in the sense

8:45of price per foot for that top floor might make that whole project pencil.

8:50And this is what contributes to the vitality of New York is there's constantly development

8:53going on. There's constantly cranes.

8:56And so you take out that part of the market that in effect was price

9:02insensitive and was subsidizing all these projects.

9:05And I think development's going to dry up to a large degree.

9:08He's paying, he must be paying three or 4 million in taxes every year and

9:12getting no services. To your point, Travis, good point.

9:14Like all profit for the city.

9:15London also did something else, which is that they essentially crippled what's called non -dom

9:19status, which is the big tax arb if you moving or parking assets in London.

9:24And to your point, Sachs, what did all the rich people do?

9:26They just redirected themselves to Zurich, to Lugano, to Milan.

9:31And they took advantage of more hospitable tax policy in other places.

9:37Now, what the people in Britain would tell you, I actually met with the UK

9:39government yesterday. They don't see a meaningfully enough measurable impact yet where they think it's

9:46a five -alarm fire. So the real question is, is it more of a slow

9:49bleed and a slow melt?

9:51And at some point, it's just hollowed out and it's very hard to reverse because

9:54there's not going to be a cataclysmic acute moment where people say, oh my God,

9:58we need to reverse these policies.

10:00It doesn't seem like that's in the offing.

10:02You know, LA did something a little different, but similar as they introduced that 5

10:06% mansion tax. It's on like all the areas except for like Beverly Hills and

10:11San Francisco has that too.

10:13Yeah, San Francisco got that too.

10:14I think it's actually like 6 % in San Francisco.

10:16San Francisco, it's 6 % over 25 million and it starts at 5 million.

10:21So there's a transfer tax, an excess transfer tax above $5 million properties that scales

10:27up above 25 million to an extra 6 % on top of your brokerage commission.

10:31So when you sell a house in San Francisco, you're paying 13 % now.

10:36Which is why you look at the transaction volume in the LA real estate market

10:41and it's just completely dried up.

10:43You know, people aren't doing the house flipping anymore, like that kind of stuff because

10:46the transaction costs are too high.

10:48But it just shows, I mean, again, this tax was imposed retroactively.

10:52For example, I had my house at SF and then they just take.

10:55you know, a couple of rooms of it.

10:58And we talked about this on the show when it happened.

11:01But my point is just your property is not safe in blue states.

11:05And wealthy people who have a choice of where to park their money are going

11:09to increasingly realize that and they're not going to buy.

11:12I think real estate in blue states is dangerous because the political class thinks that

11:17they can take a chunk of it.

11:19And, you know, wealthy people are going to react to that and they're going to

11:21move their money elsewhere. All right, let's go to topic number one.

11:25Open AI is apparently suffering from a bit of an identity crisis on Sunday.

11:31Open AI's chief revenue officer, Denise Dresser, sent a four -page memo to employees.

11:36Obviously, it leaked immediately, probably the point of it.

11:39And she called out in profit.

11:41She said their $30 billion run rate is cap inflated by $8 billion due to

11:46a revenue share and some accounting with AI model providers.

11:50Chamath, you pointed that out in the last couple of weeks.

11:52Also, she said anthropic stories built on quote, fear restriction and the idea that a

11:58small group of elites should control AI.

12:01Obviously, she's a fan of the pod.

12:02She also laid out open AI's pivoting.

12:05And she said they are going hard after business customers and they want to win

12:10the agent platform layer. If you remember, they hired the architect of the open source

12:16project OpenClaw. They didn't acquire OpenClaw.

12:18So Peter Steinberger is working at OpenAI.

12:23Cynical people said, hey, maybe they want his next set of innovations to go inside

12:26of OpenAI's products as opposed to the open source one.

12:29I kind of agree with that directionally.

12:31There's obviously Perplexity Computer is doing really well.

12:34They quadrupled their revenue. And I was over at XAI earlier this week with Elon.

12:39I can tell you he's got some very cool stuff coming.

12:42And this new model SPUD is coming from OpenAI.

12:47Here's your polymarket 75 % chance SPUD is released next week.

12:54Additionally, and we'll go to the panel in just a second.

12:57On Tuesday, two days after this memo came out, obviously, people write these memos to

13:02go directly to the press.

13:03So they're obviously trying to undercut anthropics valuation.

13:06And they feel that's a threat.

13:07That's my take. The FT cited anonymous OpenAI investors who are frustrated with the company's

13:13lack of focus. Here's the anonymous quote.

13:16Quote, you have, ChatGPT, a 1 billion user business growing 50 % to 100 %

13:21a year. What are you doing talking about enterprise and code?

13:24It's a deeply unfocused company.

13:27And we talked about this.

13:29ChatGPT's market share is going down as the number of users is going up because

13:33Gemini and Claude gaining significantly.

13:37And Meta just last week released their first proprietary model.

13:40And Apple doesn't have a product in market yet, but they do have a lot

13:44of users. So here's your Gen AI website traffic.

13:49Let's start, Chamath, with you, your thoughts on OpenAI.

13:55Should they be pivoting straight into business developers and getting focused on that?

13:59Or should they stay focused on the consumer where they are the verb?

14:03As it relates to complex long horizon coding tasks, what I can tell you from

14:08my team at 8090 is codex is better generally than anthropic.

14:15And so what happens is from the more day to day work, I think it's

14:19more reliable to use the Claude ensemble of models.

14:25But when you're dealing with something that's very tricky and very complicated and a little

14:28bit more long horizon, codex is really functional.

14:33And really good. So I think if you're looking at it through the lens of

14:38open AI, what they're probably saying is, hey, hold on a second.

14:41If we allocate our resources and just double down and crush consumer, that's probably three

14:48or four trillion of enterprise value.

14:51And then if we slowly refocus the company with the rest of the resources and

14:55double down on codex and do something meaningful in enterprise, we can probably capture two

15:00or three trillion there. And now all of a sudden, you can paint a picture

15:03for a seven, eight, nine trillion dollar market cap in the fullness of time, not

15:07tomorrow, obviously. But codex is really good.

15:10And there's a business to be had in both.

15:12You have to separate the two businesses.

15:14You can't have a lot of overlap because there's too much context switching.

15:17You got to let the consumer team run.

15:20And then you got to isolate the enterprise team and let them do what they

15:22think is right. Travis, there's a big debate going on amongst the investors.

15:26The FTPs also questioned the $850 billion valuation of open AI.

15:31Secondary markets have now priced Anthropic higher than open AI for the first time.

15:37This is the flippening that people predicted.

15:39One investor said open AI would need to IPO at a valuation of 1 .2

15:43trillion for the last round to make any sense.

15:46But there's no buyers currently at the $850 billion valuation that open AI just closed,

15:53according to Bloomberg. Travis, how do you handicap this race between these two leading frontier

16:00models? Growth is king right now in this world, in this segment.

16:06Growth is the whole damn thing.

16:07And if Anthropic is growing faster than open AI by a significant clip, the investors

16:15right now are going to play it forward.

16:17And you start to get network effects around compute, network effects around the number of

16:24tokens you're pushing out for various customers, enterprise or consumer.

16:28And ultimately, you know, it's not great today, but how that plays into reinforcement learning

16:34and the things getting smarter over time.

16:36There's so many, there's so much upside to volume and scale that if they are

16:42growing faster at the same size, even if opening AI is still growing, but if

16:49they are half the growth rate, a third, the growth rate, a fifth, the growth

16:53rate, I would be, I'd be worried.

16:57And you saw this at Uber specifically when you accelerated away from the competitors like

17:03Lyft and DoorDash. Yeah. Yeah.

17:05You had to get network effects was the whole thing at the end of the

17:08day and network effects is based on scale.

17:10So yes, I'm sort of like coming from my very specific experience, but if you

17:15believe there's network effects with the scale of data that you have and the scale

17:20of customers and the revenue that's this cash that's coming in, that you redeploy into

17:25compute. And so say there's network effects of large compute.

17:30I'd be very worried if I'm open AI and seeing somebody growing faster at the

17:36same size. So Freeberg, when you look at this race between these two giants, maybe

17:41your thoughts on the flywheel as it relates, as Travis is pointing out, to advantages

17:47in compute reinforcement learning, and then also the ability to fundraise.

17:51One of the great things that Travis and the team did was as they were

17:55pulling away, they just sucked all the oxygen out of the room by using capital

18:00as a weapon. So your thoughts, Dave, on this high stakes game, because there's also

18:05a point at which, and I'll just end on this, there's a point at which

18:08you could run off the cliff.

18:10You raise so much money So literally...

18:11Yeah, I don't know. You got all the news somewhere, you got all the things—

18:12boy, it's so fast and the revenue doesn't catch up to it.

18:14And then you go public and the markets don't believe the story.

18:16So your thoughts, Freeberg? I don't know the financials of the two companies well enough.

18:20Obviously, Sam has no problem raising money.

18:22The guy, didn't he just close like $150 billion round or something?

18:26$122 billion. $122 billion. Largest round ever raised in any market, I think, private or

18:32public. Yeah, probably. Yeah, I mean, that's crazy.

18:34That doesn't seem to be an issue.

18:36What I've noticed is just the pace of innovation at Anthropic is, from my experience,

18:43unprecedented. I mean, their release cadence is extraordinary.

18:47They've basically supplanted OpenClaw already with this release they did a few days ago.

18:52And then today, the new Opus model got dropped.

18:54So there's something about the momentum, not in necessarily just in user growth, but in

19:00how they're operating this business that just seems to be head and shoulders above everyone

19:05else in the cadence of upgrades.

19:08If I look back six months ago, I think we were pretty heavy on Cursor

19:11and Gemini. And now I think we're probably 90 % Anthropic in just the last

19:17six months at my organization.

19:19There's something very powerful about the flywheel they have going on.

19:22Yeah, but here's where I'd go.

19:24Just real quick, Dave, is mad respect on a $120 or $130 billion raise.

19:32I mean, this is obviously next level.

19:34But you can use capital and investment to acquire scale and network effects associated with

19:42it. But if somebody is getting that scale with revenue and let's call it contribution

19:49margin, contribution profit, efficiency will outstrip subsidy.

19:54And you can't just keep raising $100 billion things forever.

19:59That's where the train will stop.

20:01And if Anthropic is funding theirs through revenue, and other folks are funding it through

20:07investment, that's a short -term solve.

20:12But the long run is whoever is scaling their actual usage and system and ultimately

20:19with contribution profit that then soaks up the need for investment.

20:25That's a very scary machine if you're competing against it.

20:29Which is exactly, Sachs, what the legacy Mag 7 are doing.

20:35You have massive profits from Meta's core business, Google's core business that are being redeployed

20:42into infrastructure, and even Tesla, which has a lot of profits, and SpaceX, which has

20:48a lot of cash on hand.

20:49And they're building out Colossus and other assets, including Elon is working on building a

20:55fab, as folks have been talking about.

20:57So, Sachs, is there a chance for the legacy companies, the Mag 7s, to compete

21:02in this? Or are we looking at OpenAI and Anthropic are one and two, and

21:07then everybody else can fight for third place and the bronze, as it were?

21:13Well, I think Google's clearly in the mix.

21:16I mean, DeepMind has an outstanding team.

21:17And I think Elon's still in the mix with XAI.

21:21And then you've got Meta, also has the resources.

21:23And they seem to be further behind, but they're going to compete.

21:28Look, let me just go back to the central premise here.

21:30I agree that there's some valid criticism that OpenAI has been unfocused and should be,

21:39you know, moving forward, more focused in what they do.

21:43I have no idea, for example, what they're doing buying a podcast.

21:47That's not us. So, I don't know what that was.

21:51if you were going to buy a tech podcast for a few hundred million dollars

21:55i mean um we're here we're here we're here for dario reach out all potatoes

22:01for you guys though small potatoes they can't afford you they can't afford you guys

22:06yeah they thought we were too expensive little did they know we would have sold

22:09out but um punch the ticket dario but look this other part of the criticism

22:16of open ai that they shouldn't do enterprise is totally misguided one of the reasons

22:22why they should have been more focused is to do more enterprise and get enterprise

22:27more correct now why do i say that to travis's point about growth rates it's

22:33true that open ai and anthropic as of the beginning of q2 so let's say

22:38two weeks ago they were both around 30 billion of revenue and that memo from

22:43that open ai employee was right that if you compare them on apples to apples

22:47basis that anthropic is about 20 percent less because they are including revenue made by

22:53their channel partners but that doesn't matter what matters is the growth rate you know

22:57again to travis's point and let me just put some numbers around this the open

23:02ai growth rate has been around three to four x a year the anthropic growth

23:06rate has been around 10x a year so they went from let's call it one

23:11to 10 billion of arr last year and by the end of q1 this year

23:16they were already at 30 billion of again that's called their revenue and they're on

23:21their way you know like brad gersten was saying on our podcast i think in

23:25the last couple weeks they're going to end this year at 80 to 100 billion

23:28at least on the current trajectory and so you can plot their revenue on a

23:33logarithmic graph i mean again no one's ever seen anything like before where every unit

23:38on the y -axis is another x is 10x and it's a straight line now

23:43it's crazy right so if it's taking anthropic let's say one year to 10x and

23:48it's taking open ai two years to achieve a 10x then it's obvious which one's

23:54gonna win now what is the reason for this is because anthropic was very focused

23:59on enterprise specifically coding and what you're seeing is that businesses are willing to pay

24:06for coding code tokens on a metered basis let's call it like electricity the more

24:10they use the more they're willing to pay and their usage just continues to scale

24:16and scale consumer is completely different i mean consumer is a thing that open ai

24:20prioritized consumers have a lower willingness to pay maybe only three or four percent of

24:24them are willing to convert to premium in the first place and what they want

24:28is a 20 a month all you can eat subscription so the revenue simply doesn't

24:32scale the same way that enterprise does and so if you want to tap into

24:36the scalable revenue source in the market right now you have to go after enterprise

24:40so you know again where i would agree with the criticism of open ai is

24:46maybe they should have been more focused but they need to be more focused specifically

24:49to pursue coding and enterprise and if they don't catch up soon to travis's point

24:55then you could see anthropic taking a lead here that let's say over the next

25:00one or two years could be insurmountable just by the way let me just say

25:03say one thing is even though anthropic's revenue has followed this graph this exponential graph

25:09very predictably it can't do that forever right like let's say it does get to

25:14you do 100 billion this year can it really get to a trillion dollars in

25:19revenue the year after that seems hard to believe right yeah and and the reason

25:23is because as you hit new levels of scale you encounter new problems i mean

25:27you're simply going to run out of of compute or electricity, data centers, you know,

25:32infrastructure, there are physical limits or there's limits in the physical world that you're going

25:36to hit. And there's already some evidence that Anthropic is hitting some of those limits.

25:41Users were complaining, for example, that Claude was thinking less.

25:45Did you guys see this?

25:46That, you know, a typical Claude prompt, they seem to have cut down on the

25:50thinking time by about two thirds.

25:53Now, I saw someone tweeting today that they just released Opus 4 .7, replacing Opus

25:574 .6, and the thinking is back.

25:59But, you know, maybe they're charging more for that, hard to say.

26:02But they're going to hit some sort of physical limits.

26:05And I do wonder if over the next year, Anthropic will reconsider whether its support

26:11for all this, like, Doomer, NIMBYism was the right call.

26:15Because it kind of made sense for them from a business standpoint when their competitors

26:20were building data centers and they were just going to compute from the hyperscalers.

26:24But now that they're, I think, going to have to move into the game of

26:27building their own data centers, they might regret salting the earth for data centers all

26:32over the country. And I wonder if that'll be the natural limit of their growth

26:38is they'll be wasted on their own petard of Doomer NIMBYism.

26:42And they're also using the coding platform to build Anthropic itself better.

26:47So that in and of itself is a reason to now coding, you get the

26:51double whammy, you can make a better product, and you can get paid for it.

26:55Yes and no. Hold on.

26:55Because if you look on Twitter, people are panning cloud desktop.

26:59And what they said is this is all a bunch of vibe coded slop.

27:01I think we have to remember, if you keep these agents on task, and they're

27:05guard railed properly, this stuff is a force multiplier.

27:09The problem is, nobody knows how to do this really well yet.

27:13Nobody has built real products of scale, largely using agents yet.

27:17Nobody knows how to give an example of how an org structure should be redefined.

27:22Nobody knows how to budget properly.

27:24We have the CTO of Uber say, I give up, I've hit my token budget,

27:28the problems I see it are twofold.

27:31The first is, just to build on Sachs's point, all of these frontier labs have

27:37a very serious issue, which is both OpenAI and Anthropic are growing so fast, that

27:42they're at a point now where they need their own infrastructure.

27:45It's kind of like when you first start building any kind of company, you're just

27:48much easier renting capacity from the hyperscalers.

27:53And it's a dependency. Yeah.

27:55But then it becomes a dependency.

27:56Exactly. And now when you're so big, it's actually strategically a huge mistake to not

28:01have your own compute supply.

28:03Why? Because if you look at who's leading, the frontier labs are leading.

28:08And Sachs, to your point, you mentioned this on X, you're like, there was all

28:11this doomerism, but maybe it was tied to compute capacity, because when Bedrock opened up

28:16more capacity for Anthropic, all the doomerism went away.

28:19You're left wondering, like, is it really tied to just the fact that they were

28:22just trying to throttle usage?

28:23So if you're a frontier lab, you don't want to have to go through Amazon

28:27and GCP and Azure and Tin Cup for access and capacity.

28:31What you'd much rather have is go straight to your customer.

28:33On the other side, if you're Gemini or Microsoft or Meta, and you have all

28:41this compute, because I saw a stat this week, the hyperscalers control 60 % of

28:46all the compute. So the game theory there is if you kneecap the frontier labs,

28:50it'll give you some chance to catch up.

28:52And it gives you time to catch up because no matter what the demand is

28:54on the upside, you remember you guys remember like in social networking when Friendster was

28:59the cat's meow? Yeah. Yeah.

29:01That's meow. Remember what the biggest problem that Friendster was?

29:05Friendster was slow as a dog.

29:07yes yes and what happened then myspace came in and took all the share then

29:12we came in facebook and we took all their share so there is a way

29:15where you can handicap and kneecap these companies by throttling compute access to them so

29:21a they are forced to now go and get in the game which is weird

29:25because look open ai has tried to displace some of the stargate spend i don't

29:31see any path except they're gonna have to do it themselves and anthropic will have

29:34to do it themselves but then separately the other problem is when you change the

29:38subscription model in enterprise and you say hey we're not going to subsidize any more

29:43tokens what's going to happen is all these token budgets are going to go crazy

29:47and what freebrook said is going to happen where he's like hey guys why are

29:49you spending all this money what are you making and you inspect the code and

29:53you're like what is this slop and you're not going to add 30 40 50

29:57opx to produce nothing so i think that that's an open question and that question

30:03will become more amplified over the next year as they push the cost off of

30:09them so as travis said no more subsidy from the capital you have to grow

30:13into it but you're not going to support negative gross margins so you're going to

30:16pass through the token costs so i think it's a very dynamic moment right now

30:20for these and if you look at the ranking of these clusters and who has

30:25the most right now uh people have forgotten about colossus which uh elon's been building

30:30he's expanding to 555 000 gpus across three buildings 18 billion in investment he if

30:38and then if you look at prometheus met as planned 2026 that's 150 000 gpus

30:43so this is uh well elon just announced a deal he announced a deal this

30:48morning with cursor so elon's elon's renting a bunch of capacity so he's now getting

30:52effectively into the data center business he's going to be a hyperscale so he's he's

30:57going to use as much as he can for xai and whatever's left over he'll

30:59give to well in this case he's giving to cursor to train their model he

31:03could give you're saying is you might as well overbuild capacity because that way your

31:07own models would be in a privileged position and you can sell the rest to

31:10to your competitors 100 to your point about the thing i was saying on x

31:15i actually i think i was retweeting mark andreessen who pointed out that one of

31:20the reasons why anthropic might have wanted to hold back mythos is they simply didn't

31:24have the compute to serve it the model was huge and very expensive to serve

31:29something like maybe even 10 or 20 times the token cost of of say opus

31:33they knew opus 4 .7 was coming out right so they hold it back knowing

31:39that they don't have the compute to serve it anyway and they save their compute

31:43for the next iteration of opus and then by holding it back they create this

31:47impression of scarcity and altruism and it turns into this gigantic marketing event for their

31:53product because everyone in the government's like oh wow they're holding it back it's so

31:57amazing now look i think it may have been genuinely altruistic as well in the

32:02sense that mythos does reveal coding vulnerabilities that people didn't know about before and you

32:09know it does make sense to give time to companies with large code bases to

32:13patch these dormant bugs and vulnerabilities but it's looking more and more like anthropic could

32:20not have offered that model commercially anyway because it was just too big and expensive

32:25and they need to create space for opus 4 .7 so it's an interesting theory

32:30on what actually happened there all right guys before we go to our next story

32:34some breaking news here uh here's your polymarket gentlemen i don't this is i don't

32:39know if you're placing some insider bets here uh friedberg but looks like the all

32:43-in podcast uh anthropic now 30 57 % chance of buying the all -in podcast.

32:48This is live. By what time?

32:49From Polymarket. Yeah, this is by the end of the year.

32:52By end of the year.

32:53Okay, go ahead. By end of the year.

32:54This isn't real, is it?

32:56Yeah, absolutely. People have been trading on this.

32:58This is heavily traded. It can't be.

33:00This is $92 million of volume.

33:03Yeah, this is the number three largest Polymarket.

33:06There's no way this is real, dude.

33:08There's no way this is real.

33:08It's breaking news, guys. I don't control the news flow.

33:11This is J. Cal Slop.

33:13This is no way this is real.

33:15Anybody can create a prediction market, I guess.

33:17Hey, what's the volume of that thing?

33:20$92 million. It's not real.

33:22Is there $92 behind it?

33:23There's no way that's real, guys.

33:25Come on. Guys, it's all good.

33:27$92 million. Guys, time to upgrade the planes.

33:30Hey, guys, I don't need the PC -24.

33:33I'll take somebody's G650. Whoever's got a G650, go up to the 800.

33:37It's going to be trickle -down to J.

33:38Cal. Let's do it. I'm giving up my United Platinum status.

33:42Trickle -down economics. Trickle -down avionics.

33:45All right, listen. Story number two.

33:47Triple -down. Down in you.

33:49This is good. This is good.

33:51This is pretty good. Okay, number two.

33:53All birds. Speaking of data centers, all birds just pivoted from ugly sneakers, disgraziad, to

34:01AI, and the stock has ripped.

34:03Talking about peak bubble behavior.

34:06Podcasts getting bought by Frontier Models and sneaker companies pivoting to data centers.

34:13All birds, as you know, is the ugliest sneakers on the planet.

34:17And this became a massive delusion in our industry that this company was worth billions

34:23of dollars. They went public in 2021.

34:26This might be one of the peak Zerk moments.

34:28Raised $350 million in their IPO.

34:32Sachs, were you an investor in this thing?

34:34All birds? All birds? No, no, no.

34:37You're thinking about the scooter company.

34:39Oh, that was a bird.

34:40That's right. That was bird.

34:41Don't remind me of the investments that didn't work.

34:44But no. Bird was crazy.

34:47This reminds me of the late 90s where all you had to do was change

34:52your name to whatever .com.

34:54Yeah. Yes. And you get a huge pop in your valuation.

34:57And you could spit it out.

34:58BarnesandNobles .com became and then Barnes and Nobles.

35:02And so the stock crashed and never looked back.

35:05There's your stock chart. They sold off all their brand assets for $39 million, about

35:1010 % of what they raised in the IPO.

35:12Congratulations to whoever owns those ugly -ass sneakers.

35:15Why were they worth $4 billion?

35:17They sold sneakers? Collective delusion.

35:19Collective delusion. People in Silicon Valley liked them and they just thought it was the

35:22next Nike. Tulips. It was tulips.

35:25Well, I think that was an era in Silicon Valley where people rewarded rapid growth

35:31without really looking at gross margins or cost of goods sold.

35:35People didn't really make the distinction between software and everything else, right?

35:38Right. Software, you never really had to worry about COGS or gross margin because the

35:44incremental cost of serving a customer with software is like almost zero.

35:49Yeah. So, people in Silicon Valley weren't really trained to look at gross margin and

35:52there was this rash of physical world companies that all of a sudden started getting

35:57crazy valuations. Travis, quite frankly, you might have, the success of Uber might have ushered

36:02in this era of these physical world companies that started getting valued like software companies

36:08even though obviously they didn't deserve it.

36:09David, thank you so much for that shout out.

36:12I really appreciate it. You and Airbnb.

36:15Anyway, let's get back to - No, no, no, no, no.

36:17Hold on, hold on. The era of 21 is super interesting though, guys.

36:20I don't believe it was a physical versus digital thing.

36:23I believe - it was a moment in time in the COVID, ZERP, massive money

36:30going in. We hadn't seen inflation yet.

36:32It was all of that happening.

36:34And the investor class was basically deciding we're going to look two and three years

36:40forward on your current growth.

36:42And it wasn't one year forward, it was like two or three years forward.

36:46And that's where these crazy valuations got weird.

36:49So if you went from $100 to $300 million in the last year, they'll play

36:56that two, three years forward and go, oh, yeah, you're totally 20 times bigger.

37:00We'll pay you for that now.

37:02That's where it got weird.

37:04It got weird. Hey, Bird Scooters was valued at $2 or $3 billion.

37:07They were doing micromobility. You're just trolling them, Jay.

37:11We're giving everybody their flowers for incredible investments.

37:15And even the Mighty Sachs could trip up.

37:18Did you sell those shares pre -IPO?

37:20Yeah. No, no, we don't do that.

37:22It was a Series A we did.

37:24I mean, look, we got it right in the sense that it was a total

37:26phenomenon. But then the cities just cracked down on it and killed it.

37:30Look, if the cities had leaned into it.

37:32Yeah, look, if the cities had reacted differently, if they had leaned into it, if

37:35they had created, let's say, a scooter or like a small EV lane, it could

37:41have transformed cities. I mean, it would have been a lot easier to get around.

37:44But instead, they banned it.

37:45They limited it. They didn't create designated areas for it.

37:49And then the coup de grace was basically when they would take a city where

37:53Bird already had like 80 % dominant market share.

37:56And then they would say that, well, we're going to choose four operators and give

38:00them each 25 % of, say, a thousand scooter allocation.

38:04That just killed the economics for everybody.

38:06Yeah. There's no market anymore.

38:07There's no market. Yeah. Yeah.

38:09There was no marketplace network effect, right?

38:11When they're basically just picking the winners and deciding the market share.

38:14Yeah. You can't compete. And splitting it even.

38:17So then - Yeah. There's no competition.

38:19You can't drive value. Regulatory capture at its worst.

38:22Guys, we should watch for this in the autonomous car space too.

38:27Cities may get cute and start doing things like that.

38:29And what they did on scooters, they could do on cars.

38:33Ooh. That's a really good point.

38:34Yeah, you're right. Instead of just letting the market play out, they say, well, we're

38:38only going to have X number, a thousand autonomous cars.

38:42New York is literally doing this right now.

38:44They're doing it in New York and Boston.

38:46And then the prices go up.

38:48The innovation doesn't get realized.

38:50Consumers don't benefit. No one benefits.

38:53Basically, you've deleted the market.

38:55Yes. And anyway, just to wrap up this story on the shoe company, they're now

39:01Newbird AI. They bought eight H100s, I think, with $50 million in a convertible note.

39:07And the stock has gone up.

39:10Not eight. Stop. Eight? No, it's not eight.

39:12I don't know. It's a joke.

39:13Obviously. The stock's now at $14 a share.

39:16It's up 450 % in the last week.

39:18Shout out to Wall Street Bets for staying retarded more than the shorts can stay

39:23solvent. Can I say something serious?

39:27Yes, please. There are a handful of transactions that have happened in the last few

39:30days that if you look far away are head scratchers.

39:35So this is one. I don't know if you guys saw recently, but Jane Street

39:40did a billion dollar investment in essentially a new Neoscaler and then also did a

39:47$6 billion compute deal with them.

39:49That was like a little interesting.

39:52So what would I like to say about this?

39:54I think the thing that the capital markets are getting right is that we are

39:58massively compute constrained. Massively. And those are two problems.

40:04One is the power. So if you look at companies like Bloom Energy, it has

40:08gone absolutely straight up vertical nuclear.

40:11And the reason is because Bloom has a solution that allows you to use nat

40:17gas, that allows you to do something on site, and critically allows you to get

40:22your clean air permits very quickly because it has very, very little emissions.

40:27And it's been proven as such.

40:28And so instead of waiting for years to get on the grid, if you wanted

40:32to build a data center, you can now use their services.

40:36The other part that's going absolutely nuclear is the actual land and the shell, because

40:41it's turning out it's impossible to get these approvals.

40:44Now, why is that? And I sent Nick an image.

40:47The reason is because underneath at the core of it all is there's a tide

40:51that is shifting on AI.

40:54The American population is incrementally getting more and more negative on the whole subject matter

41:01writ large. And it's not clear exactly why they're doing that.

41:07Maybe it's the doomerism, which we talked about last week.

41:09Maybe it's the fear of the job laws that Jason has been talking about.

41:13Maybe it's just this idea of yet another wave of innovation that's only going to

41:17benefit a few in an extreme way, minting trillionaires all over the place while everybody

41:23else stands still. I don't exactly know what's causing it, but the sentiment is shifting.

41:28And as the sentiment shifts, the most scaled action that they can take, they're taking,

41:33which is then they are going and voting down data centers.

41:36Here's an example, which was insane.

41:37A town approves a $6 billion data center build, and then half the board gets

41:44ousted, just voted out overnight so that they can put in new people to undo

41:50the decision. So if you look at this all around the country, the answer is

41:56not, oh, we're only going to build in Texas.

41:58That doesn't work. There's not enough power.

42:00There's not enough grid capacity.

42:02There's not enough nat gas that allows that to happen.

42:05Maine just passed a bill that bans all data center buildings.

42:10So I think the reason why all birds went crazy is a very, very small

42:15canary in a very important coal mine, which is we are absolutely compute constrained.

42:21I think if you play this out, the real problem, again, goes back to Anthropic

42:25and OpenAI. If I were them, it is a five alarm fire for them.

42:29They, more than anybody else, needs to get their hands on compute.

42:33They need to have land power shell.

42:35But otherwise, that revenue could either slow down or hit a wall, and it will

42:40not be because of product quality and adoption.

42:43It will entirely be because of the Friendster effect.

42:45You just couldn't keep the site up.

42:47And I think that that would be a huge, huge problem for everybody.

42:51Sachs, final thoughts on data centers and the build out.

42:54Well, I think Chamath is right that the data centers become very unpopular.

42:58Probably in 30 states, they're just going to ban them outright.

43:01And then it's very hard to get projects approved.

43:03Look, I think there's a few reasons for this.

43:05One is that there are a lot of, let's call them real estate developers who

43:09are kind of wildcatters who are out there trying to get entitlements.

43:13And they did bring a lot of projects up for local permits where they didn't

43:17have a power solution. And there's no question that local communities do not want the

43:22data centers drawing off the grid, thereby increasing residential prices, if that data center is

43:29not bringing its own power generation.

43:31And the administration agrees with this.

43:34This is why the president did the ratepayer protection pledge, where we got all the

43:37major users of the data centers, you know, all the hyperscalers.

43:41It's just. a link to it on the channel to be secure until it comes

43:41to it. agree that they would not build new data centers without bringing their own

43:46power. So again, it was designed to be power neutral to the grid, or in

43:50fact, it would increase the amount of energy available to the grid because these data

43:55centers would give back when they're not at peak usage.

43:57So that's sort of like category number one is there's this fear of electrical rates

44:03going up, but there's a couple other categories, I think, of groups.

44:06So the second one was future of life and a lot of these like Doomer

44:09groups saw that data centers were a way to stop AI progress.

44:14And there are interviews with some of these Doomer folks who say things like we

44:19have to meet people where they are, meaning that they've been unable to convince people

44:23that AI is going to lead to the Terminator, but they can convince them that

44:27AI data centers are going to use up their water, for example, which isn't true.

44:31And so a lot of the NIMBYism has been kind of astroturfed by a lot

44:36of the Doomer groups, which have a lot of money, thanks to contributions from a

44:40few tech billionaires like we've talked about in the past.

44:43So that's category number two.

44:45Category number three, ironically, again, is Anthropic itself.

44:49It has allied itself politically with a lot of the Doomer groups, a lot of

44:54the NIMBY groups. It didn't seem to matter in the first couple of years because

44:58Anthropic had made the strategic decision not to build its own data centers.

45:02So they probably thought that they were just throwing sand in the gears of OpenAI

45:07or XAI, their competitors, and they would just rely on hyperscalers to get their compute.

45:14And I think that that strategy has now backfired in the sense that they apparently

45:19have reached the limits of the compute that's available to them by buying it from

45:23a third party, and they need to build their own data centers.

45:25It's going to be very interesting to see how they adapt to that and how

45:29the message around data centers changes over the next year as, let's call it, the

45:34effective altruists decide that all of a sudden data centers or certain kinds of data

45:39centers might be a good thing because they serve their mission.

45:41So I think that's going to be a very interesting thing to watch.

45:44I'll tell you the one thing I think you're missing, which is that most people

45:48in America really are starting to really hate rich people.

45:53And there's no physical space that better represents the wealth in America, the wealth creation

45:58that's happened that a lot of people feel left behind from than the data center.

46:02What other physical space is there to go to?

46:05It is the temple of the wealthy.

46:06It is the mechanism, the tool, the machinery of the wealthy.

46:11It is the way that the rich, elite, tech, kind of political, connected billionaires that

46:19we're obviously all attached to are taking from the poor, getting themselves ahead, shooting themselves

46:27to space, leaving everyone else behind.

46:30And the data center, I think, is the representation of their progress.

46:34And it is a representation of the progress that others don't feel.

46:38So that's why I think it is physically like the manifestation that people want to

46:42attack and destroy. There's very little rationale about, oh, let's stop AI robots from killing

46:48us. I think people just don't see the value in AI.

46:50The average person doesn't see the value in AI today yet.

46:53Like we just talked about, so much of the value of AI is showing up

46:56in the enterprise and in the rebuilding of enterprises.

46:58But for a consumer's life to actually be altered in a meaningfully positive way, most

47:03people don't feel that yet.

47:04The best thing they see is some medical advice they're getting on chat GPT or

47:07something. And that's kind of the end of it for them.

47:10So I think there's a lot of this populism that's swollen and that's taken over

47:14not just the US, but probably a good chunk of the West.

47:17And the data center is the target.

47:19It is the pied -à -terre of this space, in a way.

47:23This is their attack vector.

47:24To David's point, they'll probably ban data centers in 30 states.

47:28Data centers can output and input at the speed of light, so they can be

47:31anywhere. I mean, you know, the reason you put data centers in different states is

47:34cheap power, low latency. So maybe you get a couple of milliseconds of latency.

47:39So the data centers can go anywhere.

47:40So as soon as all the states start banning the data centers, the data centers

47:44will just go to space, to Iceland, to Texas, to wherever.

47:48And then everyone will be forced to move on, Travis.

47:53They'll basically find the next target for populism, which will be something else.

47:57The pied -à -terre, the data center, what's next?

48:00You know, this is part of what's going on right now.

48:02Private jams. Where we've got this kind of level of debt.

48:06I always bring it back to this because I do think this is the root

48:08cause of populism, is the fact that the government promised so much.

48:12It's so inefficient, and as a result, it's destroyed the value of the dollar, not

48:15giving anyone anything that they thought they were getting.

48:17And we do have the ratepayer pledge, Sachs, to address the energy issue.

48:22That was a big win, I think.

48:23And you worked on that, I believe.

48:25Yeah. But hold on. Can I just say something?

48:27I think that ratepayer pledge is important.

48:29It doesn't change the business model of the utility, meaning what the utility is allowed

48:36to do is every year build a budget.

48:39And the way that they decide how to charge you is that they are allowed

48:44to make investments, right? And then they're allowed to earn 10%, roughly, on the amount

48:51of investment that they make.

48:53What do you think their incentive is?

48:55Their incentive is to find ways to keep investing and upgrading the infrastructure.

48:59So I suspect what you'll see is, independent of what the data centers do on

49:05site, which I think is smart and good, and I'm glad you guys did that,

49:09it doesn't slow down the actual fundamental business model of the utility.

49:13Because those are local monopoly licenses that are granted at the state and county level.

49:19And so when you go inside and you look at those utilities, what they're allowed

49:22to do is say, well, I'm going to bury the lines underground because there's a

49:26wildfire threat that's going to cost $10 billion.

49:28And they present that, the PUC has to say yes, and they're allowed to make

49:3210 % on $10 billion.

49:34So the business model of the utility has to be looked at because it is

49:37independent of all of these other things.

49:39And they have an incentive, like insurance companies, to just walk prices up over time.

49:44It's true. That's why I think behind the meter is so important there, for sure.

49:48But look, I mean, this idea that data centers don't create jobs is wrong.

49:51I mean, it's been a huge boon for blue -collar jobs and the construction industry.

49:56While they're building the data center.

49:58Yeah, but that construction could be a wave that goes on for a decade or

50:01two decades. I mean, the CapEx is not going down.

50:04It's increasing. Listen to, for example, what Jensen says about his projections.

50:08I mean, it's not like the CapEx is a one -year thing.

50:10We're seeing tens of thousands of new construction jobs being created and 25 % to

50:1530 % higher wages for electricians, carpenters, the guys who hang drywall or pour concrete,

50:21create roads, install equipment. I mean, these are blue -collar jobs.

50:25And it's creating, again, not just new jobs, but also wage increases.

50:30It's a good thing. It's not a bad thing.

50:32I think the issues... It's not a bad thing, but it's not the same as

50:35a fab where the jobs are permanent and they're there.

50:38We can debate it all we want.

50:40I don't... There's about 100 data centers right now that are being contested.

50:44The data is for every 100 that are contested, about 40 get canceled.

50:49That number is increasing for this year.

50:51It's more than doubled already from what the number was last year.

50:53And the total economic value of those 100 data centers right now is about 160.

50:57160. 160. $62 billion. Jason, the thing is, is that there are permanent jobs, because

51:03what where's the energy that's powering that?

51:06Where's the semiconductors? It's powering that, you know, there's a lot.

51:11We actually had Chase from Crusoe and Michael from Corweave on the all in interview

51:17show, and they said they're bringing energy with them.

51:19That's their big thing. Bring B -Y -O -E, bring your own energy to the

51:23space. They're bringing in NAC gas, they're bringing in diesel fuel, they're bringing in solar.

51:29B -Y -O -E is the model.

51:30Well, can I also say, listen, if you were of the opinion that you didn't

51:35want more data centers in America, because it was using up, say, scarce energy resources

51:39or something like that, but you weren't just anti -progress altogether, then what you would

51:45want to do is at least see more data center construction among US allies, right?

51:50Energy rich US allies. Well, a year ago, that's one of the things I worked

51:54on was allowing the Gulf states to build data centers with American technology for American

52:00companies. And remember the controversy that caused?

52:03Everyone accused us that somehow this was like serving China.

52:06Well, those data centers are getting bombed, and I don't think they'd be getting bombed

52:09right now by Iran if they were serving China.

52:12These were - They're very strategic, yeah.

52:14The IRGC has put these data centers on a list of assets that they've threatened

52:19to destroy because they're American assets or they're assets of our Gulf state partners in

52:26partnership with America and American companies.

52:29This whole idea that somehow this was a threat to American national security was a

52:33total hoax, just like the data center uses too much water.

52:37And what I'm saying is that a lot of the same forces were behind this

52:41hoax as are behind these data center hoax.

52:43Now, Freeberg is right about the resentments, but those resentments get whipped up and marshaled

52:49by people who have an agenda.

52:51And that agenda is well -funded and strategic.

52:54And I can tell you that in the case of the GCC data centers, Anthropic

52:59was adamantly opposed to that, and they were lobbying against it, and they were, again,

53:03salting the earth against those projects.

53:06And I think the whole issue is kind of moot now anyway, because I think

53:08the data centers have been blown up, but or they've been threatened to.

53:12But it just shows how ridiculous and what a psyop some of the opposition to

53:17these ideas are. And it's a cell phone in many ways.

53:21If you think about who are the top two spokespersons for our industry, and what

53:26they're communicating to Americans versus, say, how the Chinese view AI, which is incredibly positive.

53:33We've got Dario, who says, it's the end of days, everything's going to be hacked,

53:38all your files are going to be hacked, all your accounts are going to be

53:41hacked. And then on the other, and everybody's losing their job.

53:44That's our top spokesperson in Dario at Anthropic.

53:47The other top spokesperson just had a 70 ,000 -word piece written about him, where

53:51Ronan Farrow said, I had a dozen people tell me, unprompted, Sam Waltman's a sociopath.

53:58Those are the top two spokespeople.

54:00Those people cannot be the spokespeople for this industry.

54:03And this industry has got to get focused on fixing the big three.

54:06Healthcare is going to be dramatically improved by AI.

54:09Housing could be dramatically improved.

54:11I'm not sure who's working on that.

54:13And obviously, education, the cost of education.

54:16We need somebody out there, a Michael Dell, Jensen, Elon, just explaining how world positive

54:23this could be. Because right now, AI is as popular as less popular than ICE,

54:29the Democrats, and the government of Iran.

54:32Joe Limond at Alpha School.

54:34On the education side, I think you just have to look at Alpha School.

54:36it's working. All right. So that's your story, Chamath.

54:40That's the story of All Birds, the most overvalued startup.

54:45But we're going to play a little Cuban music here.

54:47We're going to play a little game show for everybody.

54:50This is The Price, David Sachs, is wrong.

54:53Yes, this is The Price is Wrong.

54:55The Price of the Startup, Travis, is wrong.

55:00And this is the game show where we guess, which overvalued disaster are we talking

55:05about? First up, helling from Austin, Texas, an enforcer in the PayPal mafia.

55:10It's Mr. David Sachs. Welcome to the program, David Sachs.

55:12Are you ready to play The Price is Wrong?

55:14I'm ready to play. Let's do it.

55:15You're ready to play. All right.

55:17Here we go. The Price is Wrong.

55:19This startup was once valued at over $13 billion.

55:22Their main business model, selling JPEGs for fake internet money.

55:26People lost their minds and started spending millions of dollars on monkey images.

55:30Play the thinking music, please.

55:33David Sachs, can you name that startup?

55:38$13 billion. $13 billion for, is that like the Bored Apes thing?

55:43Okay, you're closing in. Remember, form it in the name of the question.

55:47I know, I know, I know.

55:48It's selling JPEGs for fake internet money.

55:50Me, me, me. Pick me, pick me, pick me.

55:52People, you'll get your chance, Shamif.

55:55Oh, I think I know what you're talking about.

55:57Okay. All right. Let Chamath do it.

55:58I can't remember. They're spending millions of dollars.

56:01Okay. Can I say it?

56:01Can I say it? It's your turn to steal.

56:04Open scene. Open scene. Correct.

56:07100 points for Chamath Polihapitiya.

56:10Okay. An amazing steal. An amazing steal.

56:12And next up, that puts.

56:13I had the Bored Apes, but.

56:14Okay. Here we go. He puts the Dick and Dictator hailing from Palo Alto, California.

56:19It's your favorite doordasher. Okay.

56:21Let's go. Chamath Polihapitiya. How long you been doordashing there, Chamath?

56:24Nine years. Nine years. You like that?

56:27What do you like about that?

56:28Is it the interaction with the people?

56:29Is it the tips? Is it stealing a couple of French fries?

56:31What do you like about being a doordasher there?

56:33I typically take four fries.

56:34I lick the burrito. Okay.

56:36Licking burritos. Did he just say licking burritos?

56:39This is why we need robot delivery, robot delivery drivers.

56:42I mean, it's just. Coming.

56:44It's coming. Okay. We don't want our French fries being licked.

56:47Let's get the music going here.

56:49This startup, once valued at $4 billion, allowed you to talk to other people on

56:55your mobile device during COVID, and you could listen to mid -VC.

56:59Yes, yes, yes. I got it.

57:00I got it. It's called generic startup advice.

57:01Can you name that overvalued startup?

57:03Oh, my God. It's called Clubhouse.

57:05Oh, my God. He's on a heater.

57:06That's 200 points for Chamath Polihapitiya.

57:09Hey, that's a lot of doordashes.

57:11He's going to do very well here in the final round.

57:13That's an amazing memory. How soon we forget?

57:16I couldn't replace any of these names.

57:18Okay. Finally, streaming in from a potato field at an undisclosed location in Idaho.

57:24It's Dr. David Friedberg. You're in the potato sciences, correct?

57:29Mr. Friedberg. That's right. Potatoes.

57:30That's right. You like the potatoes.

57:32You have a favorite potato dish.

57:34Is it the scallops? What do you like to do with your potatoes?

57:36What is your name, Mr.?

57:37What is the host's name?

57:38What is your host? It is me, Jocular J -Cal.

57:41Let's go. Here we go.

57:43Jocular J -Cal here at the helm.

57:45You like a certain type of potatoes there?

57:47Javicular. Javicular. Javicular. Javicular. Javicular.

57:49It's Javicular Calacanis. And what do you like there on the potatoes?

57:51What's your favorite there? You like a creamy mash?

57:54I like a little and gratin.

57:54A little cheesy. You like the cheese.

57:58Okay. Very good. Okay, David.

57:59This startup was once valued at $270 million.

58:03This is your favorite. I understand you're a vegan.

58:05They sold juice. These juice packages went into a juice machine.

58:09I know. I know. I know.

58:10I know. I know. I know.

58:11I know. I know. I know.

58:11I know. Branded as the next iPhone.

58:13The iPhone of juice. Can you name?

58:15Oh, I know it. I know it, I know it.

58:16This overvalued star, David Friedberg.

58:18I know it, I know it.

58:18Pick me. You'll have a chance if you'll hold it.

58:20Juicero, Juicero. All right, that's 100 points.

58:22He's on the board. Wait, are you searching?

58:24It looks like he's searching.

58:25Did he search? Oh my God, are you on your device?

58:28He looks like he's on his device.

58:29Internet free, internet free here.

58:31He's on his device. All right, folks, there you have a clear winner, Chamath Palihapitiya.

58:36Tell him what he's won.

58:37He's won a trip to Temptations 2 in Cabo.

58:42You're going directly to Temptations 2, an adult resort.

58:45That's for you and two of your friends, okay?

58:47Enjoy Temptations 2, Chamath Palihapitiya.

58:50Two of your friends. What a fun game this is.

58:53You can bring your thrumple.

58:54I think this is going to need to become a regular feature of the pod.

58:58Great game. Okay, Landon, we finally had a bit land.

59:00Everyone forgets the unicorns that don't work.

59:02They just disappear into the ether.

59:05All right, all right, there you go.

59:07You won a pied -a -terre on a fishing trawler.

59:12You won a tax bill in New York.

59:13You got a pied -a -terre available to you as your first place winner, Chamath

59:18Palihapitiya, door dasher from Palo Alto.

59:21Pied -a -terre. All right, listen, there's been a lot of shenanigans going down in

59:25D .C., the most boring city in the world, where apparently everybody's getting a little

59:30frisky. After hours, TMZ launched a news bureau.

59:35Eric Slawel is out of the governor's race.

59:38There's a lot of dark stuff that's been released.

59:42He is innocent until proven guilty, but it's not looking good.

59:46He also resigned from Congress, J .C .L.

59:48And he resigned from Congress as well.

59:51And Friedberg, our investigative journalist, now working as a stringer for TMZ.

59:59Friedberg, what have you learned?

1:00:00What's in Friedberg's DMZ? I haven't learned anything.

1:00:04Okay, you have an analysis then, maybe.

1:00:06My anecdote on this is, back in December, when it was first rumored that Swalwell

1:00:15was going to run for governor, I started making some calls to various folks to

1:00:22be like, hey, you know, what do we think of this guy?

1:00:26Is he going to be a good candidate?

1:00:27You know, obviously, I and a lot of other people before they evacuate the state

1:00:32care a lot about the future of California.

1:00:35So I started checking around.

1:00:36I spoke to several people who independently told me that there's knowledge about this guy

1:00:43sending, you know, pics to employees and that this guy has a bunch of stuff

1:00:49that's going to come out about him.

1:00:51So I heard all of this, not from one person, but from several different sources.

1:00:55This was back in December.

1:00:57Going into January. And I largely kind of dismissed it because I was like, if

1:01:01this is true, this would have all come out already.

1:01:04I'm like, there's no way this is true.

1:01:05If it was true, like people would have talked about it.

1:01:07They would have made a thing about it.

1:01:08If multiple people are telling me about this, then I've got to assume that it's

1:01:14a rumor that's being used to block him from running for governor versus it being

1:01:18a real thing, because multiple people had this knowledge and this information.

1:01:22So this was December, January, where I had these conversations.

1:01:25And at that point, nothing had come out.

1:01:27So I was like, okay, it doesn't seem like this is real.

1:01:29And then everything that I had been told started to come out in the last

1:01:33week. So the striking aspect of all of this for me was how much knowledge

1:01:38there was about these various incidents with the guy.

1:01:41How so many people had this knowledge and how no one had actually brought the

1:01:46knowledge to bear, which begs the question.

1:01:52Why did they not? do what was right by the victims?

1:01:56Or why did the victims sit on the sidelines waiting for the right moment to

1:02:01all come out together? Because this was broad knowledge within a community of people, and

1:02:06they made the choice not to bring it forward with that knowledge.

1:02:10And that's what was so striking to me about this whole thing.

1:02:12I had honestly dismissed the whole thing as just being rumor mongering to try and

1:02:16besmirch the guy. And it turned out that these were all being held back purposefully

1:02:21and deliberately for a very particular moment in time when they were all brought forward

1:02:25to be used. And let me just be clear.

1:02:27These are all allegations. Nothing's been proven in court.

1:02:30He doesn't get his day in court.

1:02:31We just want to make sure there's a bunch of allegeds here.

1:02:36Yeah. And all that I'm saying is that people had told me about these supposed

1:02:42claims five months ago, four months ago, multiple people and had chosen not to bring

1:02:47it forward and that the victims had not come forward publicly with these claims.

1:02:51And then there was this coordinated effort to bring everything forward at the same moment.

1:02:55And that's what was so striking to me is just how coordinated all of this

1:02:58was. Who's controlling it? Who do you think like, is there like a meeting?

1:03:01Is there like a council?

1:03:04A queen? Nancy Pelosi. Jesus Christ.

1:03:07It's so... I don't know if that's true.

1:03:08Well, not just her. I'll tell you my sense of it.

1:03:11My sense of it is that there are certain insiders and he's not an insider.

1:03:15And those insiders are like the Katie Porters of the world.

1:03:18Katie Porter, I think, is who the Democratic establishment wants to be governor.

1:03:23She's an insider to national Democrats.

1:03:27She's an insider to California Democrats.

1:03:30And I think that she's the preferred candidate.

1:03:32Tom Steyer... She's a spousal abuser.

1:03:35I don't know that Katie Porter is like this ultimate insider, but I think there

1:03:38are... Look, there are clearly insiders.

1:03:40The Democratic Party is a machine that exists to siphon off as much money as

1:03:45possible from the public till to the interests that support the party.

1:03:49And it's their gravy train.

1:03:51And they're not going to let anyone stop that gravy.

1:03:53I don't know if it's just the Dems, Sachs.

1:03:54I don't know if it's just the Dem party.

1:03:55Hold on a second. They're not going to let that gravy train stop for one

1:03:57second. Now, the Democratic Party had a huge problem in this California governor's race, which

1:04:02is that the Democratic field was very fragmented.

1:04:04And so the two Republican candidates actually were polling the highest.

1:04:09And so just so the viewers have context, California has this weird jungle primary system

1:04:14where the top two go to a runoff.

1:04:16They don't have a Democrat lane and a Republican lane.

1:04:19They just take the top two jungle primary, and then they go to the runoff.

1:04:22Even today, still, Hilton and was it Bianca or whatever, they are polling at both

1:04:28around like 14 or 15%.

1:04:29And if the election were held today, you'd have two Republicans in the runoff.

1:04:32So the Democrats needed to winnow the field down and have fewer candidates.

1:04:38In addition to that, they must have been concerned that all of this oppo on

1:04:43Swalwell would come out once it was him versus, say, Steve Hilton.

1:04:48And they didn't want it to come out later when they could lose the election.

1:04:52So the powers that be made the decision to lance the boil.

1:04:56Probably there was a conversation with him to tell him to get out of the

1:04:59race. He didn't listen. And by the way, remember, this feels a lot like what

1:05:03happened with Joe Biden when he had to drop out of the presidential race.

1:05:06It does sound surprisingly like that.

1:05:09The whole Democratic establishment and all the mainstream media were saying that Biden was sharp

1:05:13as a tack. Okay. And then he had that disaster debate performance with Trump and

1:05:19it became clear. Hot swap!

1:05:21Yeah. And you could just see the text messages were flying during the debate between

1:05:25the Democratic Party insiders. And by the time that debate was over, they had congealed

1:05:30on a new position, which is that Biden was...

1:05:31had to step aside. And then Nancy Pelosi was reported as having gone to the

1:05:36president and said, we can do things the hard way or the easy way.

1:05:40Imagine that, like telling the president of the United States, we can do things the

1:05:44hard way or the easy way.

1:05:46And then Biden disappeared for a week and magically he stepped aside by tweet.

1:05:52Remember that? He published a statement that appeared to be done by an auto pen.

1:05:57People were speculating whether he was even behind this or whether the staff pushed him

1:06:00to do it. The whole thing was extremely weird, but he, you know, was clearly

1:06:05muscled out of it just a few days before he had said, I'm not leaving

1:06:09the race, no matter what.

1:06:10I mean, it was like straight out of that Wolf of Wall Street meme.

1:06:13They're not getting me out of here.

1:06:15And then a few days later, he's resigning by tweet.

1:06:19And again, Nancy Pelosi appears to be the figure at the center of both these

1:06:22things. She was, hold on a second.

1:06:26Pelosi is reported as having been Swalwell's mentor.

1:06:30I guess she found him roughly 20 years ago to run for Congress in the

1:06:34first place. When the Republicans wanted to kick Swalwell off of the intelligence committee, the

1:06:40House Intelligence Committee, for allegedly being involved with that Chinese spy, Feng Feng, it was

1:06:46Pelosi who protected him. So she's sort of been a central figure in his career.

1:06:52I'm not saying she approved of anything he did, but there's no, there's no way

1:06:57that that button gets pushed without going to Pelosi for the sign off.

1:07:03Right. I mean, she's like the boss of this operation.

1:07:06And I think that the same thing happened to Swalwell that happened to Biden is

1:07:10they went to him and said, we can do things the hard way, the easy

1:07:12way. He was too dumb to listen.

1:07:14And they did things the hard way.

1:07:16Yeah. Shout out, Nancy Pelosi.

1:07:18Incredible day trader. And shout out to a friend of the pod, Rowe, who's now

1:07:24beaten Nancy Pelosi. I think his trades this year, he's actually even beaten Nancy Pelosi.

1:07:30That was the tweet. Rokana has traded $600 million of stock.

1:07:35He trades more frequently than Citadel Securities.

1:07:37What? I mean, it's incredible.

1:07:39Yeah. Where's his pee out of terror?

1:07:41I want to get in on it.

1:07:42The congressman you've been supporting for your tax is a great stock trader.

1:07:47Apparently we should have been talking to him not about taxes.

1:07:50We should have been talking to him about trades.

1:07:51There were things I liked about Rokana.

1:07:53I mean, he did support freedom of speech with a whole Twitter thing.

1:07:57You know what it was is that the Overton window shifted so much.

1:08:01You supported him. Yeah. When I supported Rokana, freedom of speech was a big issue.

1:08:06And he was one of the only Democrats to support that.

1:08:08He was also, I think, the only member of the progressive caucus to support a

1:08:11diplomatic track for Ukraine, which I supported.

1:08:14And I gave him credit for that.

1:08:15And yeah, I knew that he was in favor of a wealth tax, but I

1:08:18thought that was just a very unserious proposal that, you know, it wasn't in play

1:08:22in any way. Well, the Overton window shifted so much that now the wealth tax

1:08:27really is a possibility. So, you know, things have changed.

1:08:30Here it is. Shout out to our boy Rokana.

1:08:33Look at this. Right about now, Shamat's thinking about making a managing director offer here.

1:08:38I mean, Roe, if you get booted out of office, you could become a managing

1:08:42director at Alt Capital or something.

1:08:45That's like statistically, like even if you had insider information, making that much money is

1:08:48like very hard. Holy cow.

1:08:51Nancy Pelosi is going to shiv Rokana next for not giving her the inside track

1:08:58on whatever he's betting on.

1:08:59What did he bet on?

1:09:00Well, look, as we all know, any investor can have a good quarter or a

1:09:04year, but to put up the kind of returns that Nancy Pelosi has done over

1:09:07decades is nothing short of miraculous.

1:09:10it's generational it's a generational run give her her flowers she's substantially better than warren

1:09:15buffett i mean it's warren buffett stan drucken miller and nancy pelosi are three of

1:09:24the most accomplished investors of all time whatever you did to the poor buffett fans

1:09:30they are incredibly angry at you for desecrating his legacy i didn't desecrate his legacy

1:09:38i pointed out one unavoidable fact which is his returns are bimotally distributed pre and

1:09:44post reg fd when you have to follow the rules of disclosure everybody's returns got

1:09:50kneecapped when there was no disclosure rules his returns were off the charts that's just

1:09:56the mathematical truism now what's interesting to note is the reason why nancy pelosi's returns

1:10:01are so consistently good is reg fd does not apply to people in congress that

1:10:07it should be the takeaway they can learn we gotta stop them they can learn

1:10:11things in their committee meetings in fact there are situations where things are disclosed and

1:10:16then they are trading in real time shout out to the skiff yeah get out

1:10:20of the skiff quick and get that trade in so i have enormous respect for

1:10:23warren buffett and what he's done it's it's he's he's the goat of goats but

1:10:27the returns post reg fd are they are just materially worse than they were pre

1:10:31reg fd and that's what's he gonna do with that cash position jamal speaking of

1:10:34buffett they the market what the market is hundred billion sitting there the market is

1:10:39in a very complicated moment right now if you look at historical indicators of value

1:10:44so if you look at chiller has an indication of value it's peaking if you

1:10:50look at the buffett index it's peaking so there are things that when you look

1:10:56at it look like all -time highs and the problem with that is you would

1:11:01say oh man but there's this weird dispersion happening in the market dispersion means literally

1:11:08a few companies are hitting all -time highs i think it's like eight or nine

1:11:11and everybody else is not so it's a really complicated moment it's hard to understand

1:11:17what's going on but he's got a lot of cash if he's sticking to his

1:11:20knitting he's looking at the chiller index and he's looking at his own indicator which

1:11:24shows all -time highs and he's waiting for a correction he's not really in charge

1:11:28anymore like birkshire hathaway is not warren buffett anymore even though he's a big owner

1:11:32he's not really doing it but i mean the fact that they're sitting on that

1:11:36massive pile of cash says something that they're not putting it to work in the

1:11:39market says they don't see an opportunity yet sacks travis i'm curious your takes uh

1:11:45either one of you can go whichever order you want on how is the market

1:11:49crushing it while we're in week seven of a war and we put a hundred

1:11:54billion dollars or something into this military activity in iran and the market is pricing

1:12:02it in shrugging it off and we're hitting all -time high sacks i don't know

1:12:05if you're actually first yeah yeah i mean look i think it's pretty straightforward which

1:12:10is that in the wake of the meeting in islamabad that the market is feeling

1:12:15confident and pricing in that the war is going to get resolved the president also

1:12:23recently said that it's very close to being wrapped up the military objectives are close

1:12:28to being achieved and he's made it sound like it's going to be resolved yes

1:12:34a deal was not signed in islamabad i always thought that was an unrealistic expectation

1:12:38that these two countries which are at war with each other and in fact have

1:12:42had hostile relations for almost 50 years are going to resolve all their differences in

1:12:4624 hours it's not realistic but The impression that the market, I think, has and

1:12:51clearly is trading on this is that that war is going to be what Donald

1:12:55Trump said, which is an excursion and something that is on its way to being

1:13:00resolved, that they've made progress.

1:13:03And, J. Cal, you're right.

1:13:04The whole week has just been incredibly strong.

1:13:06I think by Tuesday, the market had recovered all of its losses since the start

1:13:12of the war. I think it made a new high yesterday on Wednesday, and it's

1:13:16making new highs, fresh highs today on Thursday.

1:13:19So you just have to say that at the present time, the market thinks, and

1:13:24I would consider the stock market to be the ultimate prediction market, that this war

1:13:28is on its way to being resolved.

1:13:30Just to qualify, I'm not speaking as a member of the administration.

1:13:34Of course not. I'm not saying that I know something.

1:13:37I don't know anything. I'm just interpreting what the market is.

1:13:40No clipping. I'm not representing anyone, and I don't know anything different than what any

1:13:47of you know. I'm just saying that I think this is what the market is

1:13:51clearly pricing in, and I'm paying attention to what the statements are of the president

1:13:57and vice president. And this, Travis, you and I were talking the other day while

1:14:00you were slaughtering me in backgammon when we won our eight -point match.

1:14:06You're almost caught up about the taco trade, not Trump always chickens out.

1:14:11You have a theory about Trump always cares about optics.

1:14:15Unpack it for us, Travis.

1:14:16Yeah, so while I was beating you in backgammon, I sort of had a, you

1:14:23know, there's like the, because J.

1:14:24Cal asked me, and the insight is, is like, and I think this maybe is

1:14:28just the more simple view of things, which is Trump's weather vane is a stock

1:14:34market. Like, we see vol is up, we see the VIX is really high, but

1:14:38you know what? The S &P is trading in this band that's actually fairly tight

1:14:43given the crazy shit that's going down.

1:14:45And everybody's nervous, but actually he, he moves in the policy space.

1:14:52He's, he, he does not let the S &P go down too low.

1:14:56People also get the sort of the panicking thing now, which is like, he gets

1:15:00people nervous, he makes moves, and then he comes back to sort of reality and

1:15:05gets things done as practical and, and probably the better parts of what he, he

1:15:11might be, you know, what he does well.

1:15:12And people are pricing that in.

1:15:14So there's, there's all the things Sacks is saying about the nuances and the details,

1:15:18but the sort of super high level, like I'm in low earth orbit view is

1:15:24like the stock market is Trump's weather vane.

1:15:28And he's like, we'll go to the place that makes the stock market come up.

1:15:33And if he's going, and, and if it's up and it's too high, he almost

1:15:36feels like it's too easy.

1:15:37So he makes it hard on himself again, and then he brings it back up

1:15:41and the traders are getting used to it.

1:15:43I think. Yeah. It's like playing with Alan Keating.

1:15:46It's just like, how is this guy solvent?

1:15:48He's literally playing every hand of poker.

1:15:51He's losing tons of money.

1:15:53And then all of a sudden, by the end of the night, he gets two

1:15:55big pots and he's got the nuts both times.

1:15:57And he pulls out of the stall.

1:15:58What's your take on the market today?

1:16:00Yeah. Yeah, I mean, I'll just do it again, but I think the, the Schiller

1:16:06PE, Nick, I sent it to you, shows near all time highs.

1:16:10Then the second is the Buffett index, which is the sum of all US equities

1:16:13divided by GDP is also at all time highs.

1:16:18So this would generally mean that you need to be increasingly a little bit more

1:16:23risk off. But then the opposite side of that, and I sent you a third

1:16:26one, and this is why.

1:16:27it's so confounding, is you have signals showing everything, which typically doesn't happen.

1:16:32And this is this dispersion point where when you see this performance and it's up

1:16:385 % in the first half of April, typically the market is up almost 32

1:16:43% on average for the rest of the year.

1:16:45And we were already up, as Zach said, 7 .5 % already.

1:16:49I'm trying to read this graph.

1:16:51This is crazy. I don't even know what's going on here.

1:16:53This is just the dispersion.

1:16:55But the idea of all of this is, I think we're in a moment where

1:17:00you can find a piece of data to underwrite your bias.

1:17:05And I think that's where there's a lot of danger.

1:17:07I don't know. For me personally, I'm generally more risk off right now.

1:17:12And more importantly, I'm waiting for these IPOs so that I can, to be very

1:17:16honest with you, delever and get some chips off the table.

1:17:19I think that it is crucial that this SpaceX IPO get done ASAP.

1:17:25And then I think it's even more crucial that one of Anthropic and OpenAI front

1:17:31run the other one and get out first.

1:17:34And the first two charts are the reasons why.

1:17:37It's fairly obvious to me what's going on here.

1:17:40You have these multiple trends going on at the same time.

1:17:43The reason people are traders are valuing this, and I think there is some smart

1:17:47money in the market right now, is what you're seeing in terms of the earnings

1:17:51potential of these companies as they deploy AI, as they have unlimited intelligence, and the

1:17:57top employees at the top companies become 10 or 20 or 30 times more productive.

1:18:02That's never been seen before.

1:18:04Microsoft Office may have made you 30 % more efficient.

1:18:07The internet may have made you 50 % more efficient.

1:18:09But none of these things made you 10 times.

1:18:11And you had a really interesting point that you slipped in earlier, Chamath, which was

1:18:15nobody knows how to harness these things yet, and it's producing slop.

1:18:19The truth is 10 % of people do know how to harness it, 20 %

1:18:22maybe. And I watch this in my own organizations, and I watch it in 600

1:18:25portfolio companies. The ones that do deploy it correctly, they are running the table on

1:18:31the ones that are not.

1:18:32So the efficiency boom that we're going to see at these companies, whether it's Meta

1:18:36or Uber or Airbnb or whoever executes it properly is going to be phenomenal.

1:18:42The earnings will be insane.

1:18:43Maybe I'm an idiot, but it has not translated into a tsunami of more revenue

1:18:49and more profit for me yet.

1:18:50Maybe I'm the only one.

1:18:52And maybe it's everybody else but me.

1:18:54But I haven't seen it.

1:18:57I see it in a lot of companies.

1:18:58So I think in private companies, we have two companies as just two examples, Micro

1:19:02One, which is doing data, you know, dark pools of data for these language models.

1:19:07And they have built technology that allows them to build data and allows them to

1:19:11collect data to help the large language models companies grow.

1:19:14And they are on a tear by using this to identify and find great people

1:19:18who can then contribute to these corpuses.

1:19:21And then we have one tax GPT that is making the accountants, I think they

1:19:24have six or 7 % of all accountants using their platform now.

1:19:27But Jason, you agree with me?

1:19:27They're just ripping the productivity of accountants.

1:19:30I hope you can agree with me.

1:19:30Okay. I hope you can agree with me with the following statement.

1:19:33Small companies nibbling at the edges is not where these guys will build a multi

1:19:39-trillion dollar market cap. I think we're both in alignment.

1:19:42Big companies, dumb companies, slow to implement the technology, startups.

1:19:46No, they are dumb when it comes to implementing new technology.

1:19:49No, they're not. They're always the laggards when it comes to implementing new technology.

1:19:52The reason that they are slow is not because they are dumb.

1:19:54The reason that they're slow is their business is much more sophisticated and much more

1:19:57complicated than many other businesses.

1:19:59And what I'm saying is, if you can't prove that this works in the big

1:20:04time you can't prove that this works in the big time, you can't prove that

1:20:05this works in the prime time, big league use cases.

1:20:09It's a toy. All right, Sachs, where do you stand?

1:20:13Are you in the J -Cal position?

1:20:14The startups are showing the way they're being massively efficient.

1:20:16They're growing revenues like we've never seen in the startup community before with less people.

1:20:21Or are you in the Chamath camp?

1:20:23Hey, big companies are not having a drop to the bottom line and they're smart.

1:20:26Or both things are true.

1:20:27Where do you stand, Sachs?

1:20:28Be the adjudicator of this case.

1:20:30I mean, honestly, I'm probably closer to you, J -Cal.

1:20:32I hate to say that.

1:20:32Um, yeah, listen, because look, I think people are still figuring out how to drive

1:20:39business value out of AI and change management is hard.

1:20:43And the bigger the company, the harder it is.

1:20:46So what's happening right now is there are a lot of transformation projects at large

1:20:50enterprises that are failing. There's like a big McKinsey study on that.

1:20:53But if you look at activity from the bottom up, I think it's very interesting.

1:20:59It's becoming more interesting. And over the last several months, obviously with coding reaching a

1:21:04new level, we're starting to see very interesting things happening there.

1:21:08And obviously the revenue that's now being generated from these coding models is, you know,

1:21:12again, it's exponential like we've never seen before.

1:21:14So the ROI is finally there at the model layer.

1:21:20Meaning before, you know, people were saying that it's a bubble because you had all

1:21:25this massive capex at the data center level, and there was no ROI coming at

1:21:30the model layer. Now we have the ROI at the model layer.

1:21:33And I guess we're sort of questioning whether the ROI will be there at the

1:21:38application level. But in any event, I think things are progressing.

1:21:41I mean, look, I fundamentally, I'm bullish on this whole thing.

1:21:43Okay, no, no, no. Sorry, sorry.

1:21:44Let me be clear. Hold on, hold on.

1:21:45Okay, go ahead, Shema. Obviously, I'm bullish.

1:21:47I'm in this, I'm in this space.

1:21:48I'm doing it. You're in the arena.

1:21:51We have seen in every single wave, in the mobile wave, we needed consumers to

1:21:56show up at scale. So we needed consumer experiences.

1:21:59And it was very obvious that there were these consumer businesses that were going to

1:22:03be, if not already, incredibly, incredibly profitable.

1:22:06Google and Facebook were profitable within the first few years, they never look back.

1:22:12And all I'm trying to point out to you guys is there is not one

1:22:16great example yet. If we believe enterprise is where all the money is.

1:22:20And if we believe that's what's going to underpin these trillion dollar valuations, just please

1:22:25somebody show me a couple of good examples of scaled profits.

1:22:29Okay, fair enough. Travis, final word here on...

1:22:33But by the way, can I say one other thing?

1:22:34I think Shema has a good point about being risked off right now.

1:22:37Because if you just look at valuation metrics, they do seem to be quite high.

1:22:41And I've seen other versions of those metrics as well.

1:22:44So look, it's very, very hard to time the market.

1:22:47I don't try. But I think you could make an argument just based purely on

1:22:52valuation levels, not events, that you want to adopt a more conservative posture right now.

1:22:57I think the bet you're making then, Travis, is are these valuations so high right

1:23:05now on the standards that the efficiency that AI could bring to these companies is

1:23:13not real enough to continue the growth from here.

1:23:17It's not a catalytic enough technology.

1:23:20And, you know, when you look at...

1:23:22No, it's the opposite. All these traditional companies have horrible valuations.

1:23:25They've been crushed. So my point is, if AI is real, the upside is also

1:23:29real. All I'm saying is, the details, guys, matter.

1:23:33It's very hard to take a very complicated business and all of a sudden, quote

1:23:38unquote, transform it. It's not as easy as it sounds.

1:23:42That word is easy to say.

1:23:43Okay. For sure. Travis, go ahead.

1:23:45Final word. Final word from Travis, please.

1:23:46A couple things. First is when it comes to big companies, I think the big

1:23:49thing about, let's call it the autonomous enterprise, is change management, is the big boy.

1:23:57And change management actually is about all the people that already work there, the middle

1:24:01managers, the technocrats, the bureaucrats, the whatever, the crats.

1:24:06The crats. And getting the change management going, the change management going there, it's a

1:24:12human thing. And it's very tricky with very complex processes, many of which are not

1:24:17even documented. And in theory, it's just all going to happen real fast.

1:24:21But in practice, that's hard.

1:24:23So that's part one. Part two, what I'm seeing with true tech companies, real companies,

1:24:29public, I would say public, like hardcore public companies.

1:24:35I mean, like founder -led folks that are really cranking public companies and tech companies

1:24:42that are sort of up and comers, I talked to CEOs across the board and

1:24:47they're like, they are fired up about the development, the sort of the productivity and

1:24:54deployment schedule and like the new features that you're able to roll out much, much,

1:25:00much faster because they've pivoted their culture, sort of very pro AI development.

1:25:05Um, and I'm getting like almost at this point, a consistent feedback from real founder

1:25:11CEOs that like this stuff's real.

1:25:15And it's, it's, it's not just hype.

1:25:18Now there are folks pushing, you know, selling their book that are like, Oh, we're

1:25:22at AGI and all this.

1:25:23Anybody who's worked with these agents and done the AI dev stuff, there's a lot

1:25:31of good stuff, but they're not, they're not that smart yet.

1:25:35They're just not that smart.

1:25:37Anybody who's done, like I've got a side quest where I'm just investing.

1:25:40I have agents investing and betting on Calci and Polly and, you know, these other

1:25:46places. And it's silly how dumb the agents are, even their best agents, to be

1:25:52honest. Yeah. The agents are what you, you have to be human in the loop

1:25:57with the agent. The agent has no taste.

1:26:00The agent can do repetitive tasks.

1:26:01The agent is not going to do something novel and they quickly can get lost

1:26:05in the forest. We had to spend a lot of time.

1:26:07We had to spend a lot of time with our investing agents, getting them on

1:26:12board with the idea that if you want to make money investing, you can't be

1:26:16on both sides of the same bet.

1:26:20Yeah. You know what I mean?

1:26:22There it is. It's just like that way.

1:26:24That's where we're at. It's the AGI is not here.

1:26:26And it's kind of silly for folks, I think to sort of suggest it is.

1:26:30Absolutely. Hey guys, we got to wrap.

1:26:33Travis, you didn't get to play, uh, the price is wrong.

1:26:36I have two more. You guys want to do a bonus round of the price

1:26:39is wrong. Yeah. Do it, do it, do it.

1:26:41See if Travis gets it.

1:26:42Okay. You guys can steal.

1:26:44You guys can steal here.

1:26:45Let me get my background.

1:26:46I got it. Give me the music, Travis.

1:26:48You're going to get to do the bonus round here.

1:26:50Let's go everybody. We got Travis Kalanick.

1:26:53He's here. He is a professional water sports player from Tallahassee, Florida.

1:26:59How is it down there in Tallahassee, Florida?

1:27:01I understand you do a little handiwork, uh, to pay the bills, but you spend

1:27:04most of your time out there on the lakes and the oceans doing water sports.

1:27:08Yeah. You like the water sports.

1:27:09I love the water sports.

1:27:11I doing water ski lessons on the weekends.

1:27:14Anybody's interested. All right. I'll be out there.

1:27:17Uh, Tallahassee, Florida. Okay. Now here we go.

1:27:20It's your job to figure out.

1:27:22the price is wrong the price is wrong here we go it's so funny the

1:27:28price is wrong here here we go this is your bonus round yeah all right

1:27:34this startup raised 900 million at a nine billion dollar valuation this is a big

1:27:40one this is a big one before dissolving in 2018 and their famously deep voiced

1:27:47founder ceo is currently serving an 11 year sentence in a federal prison yes can

1:27:54you name that mispriced startup can you name the mispriced startup it rhymes with shmaranos

1:28:01shmaranos okay you're you're closing in here be careful you have to formulate a question

1:28:06you could lose to a steal final answer theranos theranos okay very good 100 points

1:28:11you're on the board and here is your next one this is your next one

1:28:15okay this is the overtime all three players get to play this one whoever zooms

1:28:21in first and says it this is your final that's the mispriced startup here the

1:28:27price is wrong on this startup here come on you can do this come on

1:28:30you got this now here we go you can do this this short form mobile

1:28:35first streaming platform raised 1 .7 billion from top investors jeffrey katsenberg's company jeffrey katsenberg

1:28:56yes yes there's your champion everybody let's tell him what he won he uh apparently

1:29:06he's won a pied to tear uh in downtown uh east austin a pied to

1:29:12tear in east austin by the airport god knows what shenanigans are going down there

1:29:16i think if you need methamphetamine or a date you're gonna have an easy time

1:29:20there chamath okay oh hey chamath um i'm getting hammered with people who want to

1:29:24come to the sold out liquidity 500 was the cap you put on it you've

1:29:27been dicking around as dictator can we add 50 seats i think we can add

1:29:3250 or 100 i don't know lisa can we add 100 get a simulcast room

1:29:35going all right we'll see you all oh and uh the all -in summit tickets

1:29:39are on sale go to all -in .com uh and yeah don't get shut out

1:29:43of the summit folks because this happens every time you guys email me two months

1:29:47out the tickets have been sold out for four months so get your tickets now

1:29:50uh at all -in .com another amazing episode and we'll see you next time bye

1:29:55-bye bye -bye we'll let your winners ride rain man david sacks and it said

1:30:06we open source it to the fans and they've just gone crazy with it love

1:30:10you guys i'm queen of kinwad besties are gone that's my uh dog ticket i

1:30:22noticed your driveway sacks oh man we should all just get a room and just

1:30:30have one big huge orgy because they're all just useless it's like this like sexual

1:30:34tension but they just need to release them out wet your feet wet your feet

1:30:42we need to get merges we need to get a room and we need to

1:30:56get a room and we need to get a room and we need to

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