2023 年度预测

Jason Calacanis (00:00:00): Alright, everybody. Welcome to 2023. Everybody's well rested and ready to take on 2023. Yes, Jamath. How's your break? Chamath Palihapitiya (00:00:07): Amazing. Jason Calacanis (00:00:08): Okay. Saksie Poo, I know you don't go to temperatures that are under 57 degrees anymore. You have a nice break. Did you go somewhere warm? David Sacks (00:00:16): Yes. Jason Calacanis (00:00:17): Okay. That's a confirmation. Wow. Man, have so many words. And Friedberg. David Sacks (00:00:21): I'm over cold weather vacations. Jason Calacanis (00:00:23): Yeah. That does happen at a certain point. Actually, we David Sacks (00:00:26): went to Florida. went to the the free state of Florida. Jason Calacanis (00:00:29): Oh, really? Was what what what's going on in Florida at the turn of the new year, I wonder, that drew you down to The great state of Florida. David Sacks (00:00:37): We're just freeing it up in the free state of Florida. Jason Calacanis (00:00:42): The Leonard Winter Ride. David Friedberg (00:00:45): Rainman, David Sachs. Jason Calacanis (00:00:49): And I said -- We open source it to the fans, and they've discovered reason why we're -- Chamath Palihapitiya (00:00:53): Love you Jason Calacanis (00:00:57): We have our 2023 predictions now. Play some music and all that kind of stuff. Producer Nick at this point. Let's get to it. Last year, we By the way, do you guys do Chamath Palihapitiya (00:01:06): you guys notice that every time we talk about something somewhere between Sort of 2 months to a year later, The Wall Street Journal ends up writing a big think piece about it. Think piece about Jason Calacanis (00:01:16): it. Yes. Chamath Palihapitiya (00:01:16): So I tweeted into the group chat. Like, last year, we all talked about Sequoia and distributing public equities and Jason Calacanis (00:01:23): -- Yeah. -- Chamath Palihapitiya (00:01:23): how it's very fraught and difficult. And then today, they write this big article about how People have just burned enormous amounts of 1,000,000,000 of dollars that they could have returned to LPs, like these venture investors by not distributing. That makes sense. 3 weeks ago, when we did our end of the year wrap up, my big winner for 2022 were the pod shops, right, citadel? And today in Wall Street Journal, an article lens that these guys with 56,000,000,000 of AUM over the last two years have made almost Jason Calacanis (00:01:56): $45,000,000,000 Chamath Palihapitiya (00:01:58): of revenues. Isn't that incredible? Jason Calacanis (00:02:01): And this is what happens, Chamath, usually -- Chamath Palihapitiya (00:02:04): They are these guys are just crushing in. And then Citadel Securities did, like, almost, you know, Jason Calacanis (00:02:09): 7 Chamath Palihapitiya (00:02:09): and a half 1,000,000,000 of revenue. I mean, It's unbelievable these businesses how good they are. Jason Calacanis (00:02:15): Yes. So let's get into and this is typical. Chamath, if you think about journalists, They're trying to get into the conversations that are occurring at the bar after the event, the late night conversation, the group chat's willing. That's what this podcast is. It's the exposed, back channel. Right? And so if you listen to this pod, you got the back channel of Silicon Valley, politics, tech, science, etcetera. So let's do our predictions. In 2020, we said our biggest political winner would be Saxe and I both said DeSantis, Jamatze, Xi Jinping, and Friedberg said Putin. Who do we think is our biggest political winner going forward? Who do you pick? Sachs, biggest political winner for 2023. Who will be your biggest political winner for 2023? David Sacks (00:02:53): Well, I went a little bit outside the box here because I think we're gonna have gridlock in Washington. So not expecting a ton to be coming out of Washington over the next year. My pick for biggest political winner is Asian American College applicants. There are Jason Calacanis (00:03:07): 2 supreme court decisions that David Sacks (00:03:12): the court heard on Halloween last year. There was a lawsuit against Harvard and another lawsuit against UNC. by a group called students for fair admissions. And that they maintain that Harvard and UNC violate Title 6 of the civil rights act, because Asian American applicants are far less likely to be admitted than similarly qualified applicants from other groups. And the the federal courts in Boston and North Carolina rejected this argument, but the Stream Court took up the cases they kinda went out of their way to hear this. And I think that they are going to Jason Calacanis (00:03:48): -- Chamath Palihapitiya (00:03:49): They're gonna repeal affirmative action. David Sacks (00:03:50): I think the majority will rule to strike down these policies that really discriminated against Asian Americans. And I think they're the last group in America where it seems to be okay to discriminate against And Jason Calacanis (00:04:04): -- Chamath Palihapitiya (00:04:04): Brilliant. Jason Calacanis (00:04:04): -- David Sacks (00:04:04): I think the Stream Court is gonna is gonna find that unconstitutional. Jason Calacanis (00:04:09): Jamal, any guts there? You have brought this up multiple times on the podcast over the last 2 years. Chamath Palihapitiya (00:04:14): I have said that this was unfortunately affirmative action when it started, I think had very, very good intentions. I still think that there's a place for it. The problem is that these very liberal institutions decided to play judge jury and executioner on which minorities counted in affirmative action. And that's not what the intention was. The intention was to look at the establishment and their ability to get their progeny into these incredible schools even when they didn't deserve to be there. And so I think this was always an issue of classism that was disguised as racism. And people who are in the upper classes of society have always had an edge. You had the legacy admissions into Harvard. You had people, the Kushner's very famously, right, like the $5,000,000 check from the father that got the son into the school, all this stuff. It's it's been well written about. And whether or not those things are right isn't the point. I think the point is that there are folks in emerging lower middle classes who have the potential to crush, and those kids should have a chance, and you can't just decide who those kids are based on the color of their skin. And in this case, what happened was some blacks were still allowed in, some Hispanics were allowed in, but Asian Americans broadly were discriminated. and that was a really stupid outcome. You cannot punish kids for willing to work their ass off. and I think that that was the unfortunate outcome of what affirmative action has become by 2022. So it is gonna get repealed the reason it's gonna get repealed is that, you know, we have Case law that very clearly states that that any institution that accepts federal funds cannot have any form of discrimination, and this is how these folks who have tried to repeal affirmative action have taken up this lawsuit and hopefully the outcome is a more meritocratic system that also tries to create a plurality of different people from different backgrounds. Jason Calacanis (00:06:25): Friedberg any thoughts? If not, your biggest political winner for 2020 My biggest political David Friedberg (00:06:31): winner for 2023 is MBS, Mohammed Bin Salman. I think that Saudi Arabia will have the most important year in kind of the modern era in terms of their role. I don't know if you guys saw this Reuters report from a few weeks ago, but there's kind of a deepening discussion about the oil Yuan trade in that Saudi would sell oil to China, and they would get paid in yuan. Saudi Arabia sits at the Intersection of the United States, Russia, and China. They have relationships with all three nations. And in the kind of conflict and power struggle that is underway, I think that ultimately the direction of where global currency kind of reserves will be taken and the importance of these great nations and who sits atop whom can actually be dictated and significantly influenced by MBS this year by some of the deals and trades he might put in place and the and that the the kind of partnerships he might forge. I think as a result, you will see him kind of rise in terms of influence, not in terms of you know, hey, the world has accolades for this for this guy. But I think in terms of global influence, he will rock a chip to kind of the top because of this this kind of jockeying he can now do between these 3 great nation states and defining, you know, what's gonna happen with the US and what's gonna happen with China gonna happen Jason Calacanis (00:08:02): -- Great selection. -- David Friedberg (00:08:03): currency reserves. Chamath Palihapitiya (00:08:03): Great selection. David Friedberg (00:08:04): I mean -- -- privacy. Jason Calacanis (00:08:05): -- per selection, a commission. Chamath Palihapitiya (00:08:06): The shitty thing, by the way, about your selection is that Biden our explicit stance is unfortunately quite confrontational with MBS. And -- Yeah. Jason Calacanis (00:08:18): -- Chamath Palihapitiya (00:08:18): you saw that play out in q Four, we asked them to ease up on OPEC Plus to introduce supply cuts, and they did some nominal 100,000 barrel per day cut. didn't do much of anything. There was an article to your point, Friedberg, just recently about Saudi really doubling down on getting the oil out of the ground and monetizing their petrochemicals. So there's just gonna be a glut of supply in the market and we have the least amount of influence with Saudi Arabia than we've ever had. And it seems like we could change that if we decided to, but I think Biden has taken this very confrontational approach, which doesn't seem to make David Friedberg (00:09:05): And remember, a lot of sense their stated intent is to diversify away from oil and into technology and other kind of emerging growth economies. That's why they funded the Vision Fund why MBS made that big kind of visit to Silicon Valley a few years ago. And there is technology that they wanna import into Saudi Arabia, and they wanna have ownership in around the world. And if the US is creating a barrier for them to import US tech into Saudi or for Saudi to kind of invest in the US, but China and Russia have open arms. And all they want is for Saudi to start doing trades in yuan, it's gonna happen. And I think that's where this guy has kind of a real opportunity to shift the global economic dynamic. Chamath Palihapitiya (00:09:42): Say what you're Jason Calacanis (00:09:42): all about. Trump, he had open dialogue with North Korea, China, Russia, MBS. Chamath Palihapitiya (00:09:50): Your enemy is close. Sure. Jason Calacanis (00:09:52): -- want to be able to talk to anybody, and he was able to talk to anybody. Now you also wanna be able to say, hey. Listen. You can't dismember a journalist like Khushogi, and you need to be able to have both of those ideas in your head. You can't be rigid in foreign policy. You have to be fluid and keep people at the table talking. Chamath is your? Big political who do you predict? We'll be the big political winner of 2023 Chamath prediction, everybody. Go ahead. Chamath Palihapitiya (00:10:14): I really like spread trades, right, where you go along something in short another. So I'd like to pair my biggest political winner with my biggest political loser for 2023. Okay. And I am going to focus on the Republican nomination, and I am going to go long. Nikki Haley, and I am going to go short Ron DeSantis. Now let me explain. Jason Calacanis (00:10:37): Sacks. Again, if you if you're if you're not watching Sacks right now, he is Ready to interject. Go Chamath. Chamath Palihapitiya (00:10:44): So I think that all of this nonsense, for example, in the house speaker race all of the midterm results, what it really speaks to are as people are getting exhausted with the lunatic fringes of both parties. That's point number 1. And point so that favors moderates as an emergent class. And point number 2 is that if you look back through many, many cycles of Republican and Democratic nominations, it is a very negative thing to be in the lead so early going into the Iowa caucuses in January. And so if you put those two things together, the risk is that DeSantis decays, things emerge, people attack him because he's the clear front runner. And the opportunity just like it was for Trump in 16 or for Clinton or for George Bush not Herbert Walker, but you know w is to emerge from the back. And so if I think about a moderate person who can emerge from the back, who can consolidate the ranks. They should probably be from the south. They will have a lot of these purple compromises that Saks mentioned. in their policy program. And they will have a history of winning and a history of normalcy. And so I think that of all of the places where you could ever elect the women as president of the United States, I think it will come from the Republicans before it comes from the Democrats. I mean, the Democrats are unfortunately increasingly judgmental. and I think it's very difficult for a woman to emerge there, but I do think that Nicky Haley has a shot. So I'm gonna go long Nicky Haley and I'm gonna short Ron DeSantis. Jason Calacanis (00:12:27): Okay. I like it. A spread trade for his prediction well done before Zach to interject. Let me just do mine, and then because then you'll have 2 to interject too. I was looking at Biden and Trump and thinking, which one of these is gonna have the big win in 2023. So they're 2 biggest, I think, players I have a prediction for Trump. I think he's gonna lose £50 on the Ozempic. Everybody loves a weight loss story. I think he is going to be indicted Chamath Palihapitiya (00:12:54): by Garth Is he on wait a minute. Sorry. He's on Ozempic? Jason Calacanis (00:12:58): No. I'm predicting an Ozempic run, and he's gonna drop 40, £50. Then we're gonna have a Schveldt Trump get indicted by Garland and the debates and the and the and the and the rigmarole with DeSantis. think he's gonna go after DeSantis based on weight and height, and then he's gonna win the nomination in 24. and we're gonna have Trump versus Biden, but this is a crazy prediction here. I think we're gonna have a settlement. I think he's gonna agree to not run and get the pardon. This is a crazy prediction I know, but I think he loses the weight. He wins the nom. He gets indicted, and then he gets the Richard Nixon Pardon. Global Pardon for all of the shit he's done. Sachs, you can reply now to these 2 crazy predictions. This spreadsheet on my -- David Sacks (00:13:50): I mean, this is, like, proof positive that everything you have say about Trump as an act of projection. Jason Calacanis (00:13:55): Go ahead. David Sacks (00:13:55): I mean, like, Ozempic. I mean, like I mean, are you talking about yourself or Trump? Jason Calacanis (00:14:02): I strike. Boom. Boom. Yeah. Don't say I I I did Chamath Palihapitiya (00:14:06): for a night when in Jason Calacanis (00:14:06): law's journey has been Ozempic and Supergood. Yes. Both of those things are fasting. Have you sex done any Ozempic? David Sacks (00:14:12): Yeah. I've Friedberg it. Jason Calacanis (00:14:13): Yeah. I think everybody should be looking into this if you're have weight issues. It's a it's a it's a great Chamath Palihapitiya (00:14:18): new -- I I say it even more broadly. I've been reading a lot about these GLP ones, and I gotta tell you. The statins are a clear wonder drug. Jason Calacanis (00:14:25): Yes. Chamath Palihapitiya (00:14:25): Okay. I think that the 50 year longitude of data on its value is pretty unimpeachable. Metformin even taken prophylactically has shown incredible benefits for cell regeneration, longevity, and glucose management. And the reality is, let's just take a step back. The American diet, we're all prediabetic. Okay? So let's just let's just not beat around the bush. The way that Americans eat and our food supply, and also probably in Western Europe, is prediabetic by definition. It's shit it's trash. So metformin makes a lot of sense. And again, it's longitude data is incredible, but I gotta tell you the early data on these GLP ones are unbelievable. It's extraordinary. Jason Calacanis (00:15:11): And I can say from first hand experience, I would lose half a pound a week when I would diet. No. Chamath Palihapitiya (00:15:16): But what I'm saying is Jason Calacanis (00:15:17): just it's Chamath Palihapitiya (00:15:18): beyond that what I'm talking about is insulin response. It's cardiac health. And so if this data tracks like this, man, you're just gonna wanna put everybody on these GOP. Well, I Jason Calacanis (00:15:26): just wanna also put a disclaimer out here. Do your own research work with your whether it's for Matt Foreman or Ozempic, but I had great results on it. I recommend if you're struggling with weight loss like I did for many years, you talk to your about it. That's it. It's not a commercial for Wagovere Ozempic, but I do think these things are gonna change overall. -- Jira. Well and they're getting better, and it seems like die people with diabetes are on them for life. if your question is, like, if I could do this for a year to lose weight, you know, I think diabetics are on it for life. So when I made my decision again, work with your doctors, not random podcast or venture capitalists for your health advice. I was like, well, if all of these people who have diabetes are gonna on it for years, Chamath Palihapitiya (00:16:02): unless it's nontoxic, go get a pre nouveau scan. Just make sure you -- Absolutely. You got no idea. Right. Jason Calacanis (00:16:07): So there you have it. Those are our predictions. Sorry. Did you wanna respond to any Chamath Palihapitiya (00:16:11): of this? I wanna I want the Saks to react to my spread trading. David Sacks (00:16:14): Yeah. So so so look. I think, you know, if you're going on a betting site, I think that you could place that bet that Chamath made pretty cheaply, and probably it's like, has some good upside to it. So I don't criticize it as a bet. Do I think it's actually gonna happen? No. And I I think the reason is is this that if you look at what's happening right now with the speakers' race, there's 2 very clear wings in the Republican Party. There's establishment wing, and then there's kind of this populous MAGA wing. And the candidate, whoever it is in 24 needs to unite those 2 wings. And I think this is really the best argument for DeSantis as he's widely accepted by both. I think Nikki Haley's problem is that she's very well regarded within the establishment wing. other Republican party, but she has no meaningful support within the populist wing. And so I don't think she's capable of bringing the party together, at least at this point in time. She would have to prove, let's call it populist bonafide that she just doesn't have right now. So this is why I think, you know, DeSantis, he he does have front runner arrest. You're right. That people are gonna keep taking shots of them as long as he's the front runner. But Jason Calacanis (00:17:18): Alright. David Sacks (00:17:18): Let's -- He's capable he's capable of uniting the party in a way that it desperately needs right now as we're seeing with the Kevin McCarthy thing playing out. Jason Calacanis (00:17:25): Yeah. Okay. Let's go for our biggest losers. We'll rip through this. Last year, I said Biden and Trump and the extremes, Chamad said the progressive left. Again, the extreme, Saxx said Pelosi, who just wrapped up her tenure and Friedberg said US influence globally was the biggest political loser. Let's get our predictions for the biggest political loser of 2023 Friedberg. Who do you think would be the biggest political loser of 2023. The World wants to know Freberg? David Friedberg (00:17:55): I would continue my US influence, but I I am gonna shift Here's what I think is gonna happen this year. My my big prediction is based on I think the world has too much debt I think that the economic slowdown coupled with rising interest rates globally and a and a dearth of kind of asset capital inflows means that there's gonna be a lot of issues with a number of debt markets around the world, particularly kind of emerging sovereign debt. Just to give you guys' sense, global debt is about $235,000,000,000,000 in public and private. You know, that's somewhere between $515,000,000,000,000 of interest payments a year. depending on what the net rate is on $96,000,000,000,000 global GDP. And there's another trillion and a half of unfunded liabilities in the US and pensions and Social Security and all that sort of stuff. I think this is the year where a lot of the debt markets start to unravel. The -- So Frederic is just a entity that steps in -- We're Chamath Palihapitiya (00:18:48): a political David Friedberg (00:18:49): I'm gonna tell it one second. This is the political. Yeah. So the political ramifications so the political ramifications for me, I think that the the entity that steps in to try and support these unwinding moments is the IMF. And I think that no matter what the IMF does, they're gonna look bad. I think that the, you know, it's sort of like like Jerome Powell this this past year. Right? Like, you you raised rates too late. You raised rates too quickly. No matter what you do, it has some adverse effect and impact It's either inflationary or it impacts growth. And so I think the IMF is gonna get a lot of heat for either acting not too soon or, sorry, not fast enough or or acting too aggressively and causing inflation as a bunch of these markets face credit risk this year. So my big bet is the IMF is gonna play a major role, and we're gonna be talking a lot about the IMF later this year. I I think as a result, the IMF will get a lot of heat, and you'll end up seeing a lot of pressure and political. You know, just like we blame NATO, just like we blame Jerome Powell and the Fed, we'll end up blaming the IMF for a bunch of problems that'll arise. But the natural physics of what's going on is the world have too much debt and not enough growth to cover the debt, the cost of debt. That's it. Jason Calacanis (00:19:57): Okay. David Friedberg (00:19:57): And the IMF will be the political kind of, you know, hit that'll that'll result. Oh, you did have a point of view, but I think yeah. Jason Calacanis (00:20:05): And who do you have as your biggest political loser prediction for 2023, Mister David Sachs? David Sacks (00:20:11): Well, I mean, Kevin McCarthy may not survive the week. So let me go in a different direction. I think California is my big political loser. And I would say, in particular, the city of San Francisco, both are gonna have gigantic budget shortfalls. You may remember that this is back in 2021 when we had that asset bubble, California had a surplus of 76,000,000,000. And then insane. And then 2022 happened, and now the state is looking at a $24,000,000,000 deficit. Well, if we had taken, say, a third of that surplus from 21 and put it in a rainy day fund, we wouldn't have to worry about this deficit, but that was never done. Newsom started handing that money out like candy to the electorate to goose his elect his reelect numbers and to get him past the that recall. Remember. David Friedberg (00:21:03): Okay. David Sacks (00:21:03): So the the saint never got a goal outlook in order. And now I think it's gonna be even worse in 2023. And San Francisco, the city, very similar kind of problem where it's tax base is heavily dependent on commercial real estate, which is really suffering. So, you know, the city of San Francisco and the state of California, they've moved their tax base to to highly volatile capital gains. And with a really lousy stock market, I don't know how these guys are gonna meet their budgets. a lot of pain coming. Chamath Palihapitiya (00:21:32): There could Jason Calacanis (00:21:32): be a lot of austerity and pain coming. That's for sure. And these people do not know how to manage a budget. They're incompetent. So you say California, Friedberg says IMF, Chamath, who do you think the biggest political loser for 2023 will be? Chamath Palihapitiya (00:21:45): Heard gave us your percentage. Right. Remember. Jason Calacanis (00:21:47): It's part of the secret. I'm in alignment with you. I think DeSantis peaked a little too early, and the and the chaos is gonna be a little too much for him to handle. Okay. Now we get into what everybody wants. Business. Business. Biggest business winner for 20 23. Who do you have, Chamath, for your biggest biggest business winner of 2023? Chamath Palihapitiya (00:22:07): I'm gonna pick something out of my portfolio. Jason Calacanis (00:22:10): Mhmm. Chamath Palihapitiya (00:22:10): I think I'm the only nontrivially large investor in both SpaceX and Relativity space. Relativity space has a huge SpaceX is clearly just crushing on all cylinders. And they're really the only game in town with respect to launch capability. And if you just Google it, you'll see that the Europeans, you know, have a hit or miss capability and launch. The Russians are completely unable to do launch now because of all of these sanctions. The private companies in New Zealand or the United States have also had fits and starts really incapable Relativity which is really which is now the 2nd most highly valued space business is about to do a launch in 3rd week of January. And the big difference between it and SpaceX which is sort of why we did it. This is a early y c company. I did the series a and kinda went along the whole way. They have 3 d printed everything. And the reason why 3 d printing is interesting is you take a So if you if you think a rocket costs $5,000,000,000 that built by NASA, Elon was able to take that to a 100 to 500,000,000. And if you 3 d print everything, you can take that cost to like Jason Calacanis (00:23:31): 5 Chamath Palihapitiya (00:23:32): to 50000000. And so it allows you to just have this repeatability and manufacturability. Now Spacex also has a lot of 3 d printed parts, but relativity is entirely 3 d printed. It has a launch in 3 weeks at Cape Canaveral I think. And we have a, like, a $10,000,000,000 order book that gets unlocked. So I don't know how to see beyond a lot of these market forecasts right now. So I'd rather pick a company. I'll pick something in my portfolio. If the rocket does not blow up, there's a $10,000,000,000 order book, and this company is now on a trajectory to be as valued as SpaceX. Alright. Jason Calacanis (00:24:10): And it doesn't his book times too. Chamath Palihapitiya (00:24:12): And if it doesn't it it goes to 0. Friedberg Jason Calacanis (00:24:15): Go ahead and talk your book times 2 or 3. Let's see if you can one up Chamath. Which one of your investments will be the biggest business winner of 2023. Free Burke? David Friedberg (00:24:25): I'm not an investor. My big bet is OpenAI. It's just way too obvious to be anything else this year. As you guys know, there are dozens of startups that are being started right now. based on an OpenAI demonstration of DALLIE and Chat GPT. I think we're seeing this in the enterprise and consumer markets. I think OpenAI will become, to some degree, maybe They could be as many pads they could take, the AWS, providing tooling and infrastructure to all these startups that are building applications for consumers and and business users. or they will end up doing a massive deal with Microsoft. I think it's inevitable they're gonna get a $1,000,000,000 plus investment this year. They could power, you know, AI driven Bing search and Voice Driven Search. They could build their own products and their own tools, and they're becoming great investors. They invested in Descript. which is a product company we use here for our podcast, which is an incredible product. And I think that Sam Altman is a very smart and and shrewd investor as well. So for a lot of reasons, I think OpenAI could end up having an amazing year this year and a lot of different paths they could walk, and we're gonna come out of this year and say they're one of the top tech companies in the Valley. Jason Calacanis (00:25:25): Okay. Saks OpenAI has, of course, increased your ability to talk to other humans? So you're seeing a lot of big wins there, I know, is how do I talk to a child about their college hopes and aspirations. Chamath Palihapitiya (00:25:44): No. No. No. How do I talk to a child about their day? Hello. It literally is hard. Hello, Progyny of mine. How are you faring today in this complicated? write me a script Jason Calacanis (00:25:58): of talking to a twelve year old about their hopes and dreams. Say it Chamath Palihapitiya (00:26:02): in the course. David Sacks (00:26:03): Using GPT for talking points on different topics. We should try that for the pod. You know? Jason Calacanis (00:26:07): Oh, okay. Here David Sacks (00:26:08): we go. We should have done the GPT predictions. The GPT answer or answer these categories. Jason Calacanis (00:26:14): Sachs, as a person on the spectrum, yeah, how delightful is this Chamath PT and, you know, your treatment of your condition? David Sacks (00:26:23): That's great. Let me let me get to my answer here. So my my answer for the big business winner of the year is America's Natural Gas Industry. And I have to admit this is an aspect of the Ukraine war that I didn't fully appreciate until I read this New York Times article the other day about how natural gas prices in Europe have now fallen to the level they're at before the war. And everyone thought that there'd be this huge shortage and they wouldn't be able to heat their homes. Well, what happened? The the answer is that Europe completely cut off their dependence on Russian gas. And in fact, the Nord Stream pipelines were blown up. So physically, they separated. But then on top of it, they basically started importing liquefied natural gas from the US. And here's the key paragraph in this article from The New York Times is that Europe rapidly built terminals to receive liquefied gas, sweeping away many of the usual bureaucratic obstacles and environmental objections. So in other words, what would normally would have taken decades to get approvals, now was all put on fast track, and Europe is now completely dependent on American natural gas. And I think this is again, the thing maybe I underestimated, the cold, hard American interest in this war is to basically turn Europe into a vassal of America's natural gas industry. Previously, they were about to be dependent on Russia, and Nord Stream was gonna make that situation permanent We've you know, somebody blew up Nord Stream. Now they're dependent on American LNG. They're gonna pay higher prices for that, but it's it's been a pretty impressive win for the American Natural Gas industry. And I think Biden has really pulled a 180 here because you remember when he first came into office, He canceled Keystone. He canceled drilling. He was very tough on the oil and gas industry. I think after he then delivered the hundreds of billions for the climate, special interest in the inflation reduction act. David Sacks (00:28:26): Now he is taking care of the oil and gas industry. Jason Calacanis (00:28:29): I love it. David Sacks (00:28:30): Here we go back. -- by Biden. Jason Calacanis (00:28:32): Yeah. And that and so what you're saying is Biden dynamically changed course based on inputs like a great leader would. Okay. Well done. David Sacks (00:28:39): Well, I don't I don't listen. I don't know David Friedberg (00:28:41): if there's -- -- talking with Chamath Palihapitiya (00:28:42): you guys. David Sacks (00:28:42): Well, no. Listen. I think Biden has done something politically smart here. There's no question about it. I am giving him credit. Does it mean that this war was worth it? No. I don't I don't think we should be engaging in oil wars like we did in the Middle East. David Friedberg (00:28:55): We are great. David Sacks (00:28:56): So I'm not justifying this war, but I am saying that there is a cold, hard American interest undergirding our position, which is It's about LNG. It's not it's not just about moral platitudes. Chamath Palihapitiya (00:29:08): Yeah. I mean, the strong start to 2023, vassal and undergirding. Jason Calacanis (00:29:13): My biggest predictions, I I'm working backwards from 2 here. I think the DoorDash's, Airbnb's, Ubers, Etsy's of the world who need entrepreneurs need workers. They need supply. They've always been supply constrained as unemployment becomes let's call it what it is. Sticky. You're gonna see a lot more people participating in gig platforms or entrepreneurial platforms that enable them to make money. So I think they will be huge beneficiaries, if they continue to lay off employees like DoorDash And Airbnb did to right size their businesses. But my first one My number one is laid off tech workers. I think laid off tech workers who get together in groups of 2, 3, or 4 developers, product managers, people who actually build stuff, and start companies together are going to become extremely successful and they're gonna make incredible lemonade from these lemons out of these big tech layoffs. So I think the start up space is gonna and these laid off tech workers who choose to take control of the destiny and starts companies are gonna be the true big winners. If you do it, do it with 2 or 3 friends because you're gonna need developers. You're gonna need those those talented people in the startups that have 3 founders, get funded faster than the ones with 1. So those are my 2 winners. Alright. Oh, yeah. And last year, our biggest business winners were Chemut said SMBs, Saxx had Rise of the rest. Friedberg said Stripe, and I said Disney Millennials and Gen Z. Let's go on to biggest business loser for 2023 Friedberg. Who do you think will be the biggest business loser in 23 this year? In fact. David Friedberg (00:30:43): Okay. So my biggest loser is the general category of capital intensive series b through d growth businesses in the startup landscape, private companies. As you guys know, there's been a big shift in capital allocation A lot of the folks who were writing big checks into growth rounds are retreating back to writing smaller checks in seed and a rounds. They don't wanna write the $20,000,000 series p. They wanna write the $5,000,000 seed and a round. No one wants to kind of follow the valuation. No one wants to set the valuation for these growth businesses. particularly if after this round, you know you need another big round of capital and no one's sure if someone's gonna be waiting on the other end. As a result, we're seeing tons of these businesses run into capillary infusion walls. They can't pivot. I think we'll see what we saw in the dot com bubble. We're 90 and a half percent of these companies actually die. The half percent that win are gonna emerge as the next $100,000,000,000 enterprises that Googles and the Amazons of the world So there will be light at the end of the tunnel for the winners. But, generally, there are hundreds of companies in hardware, in Syn Bio, in biotech, in high growth, enterprise software that require significant sales investment expense. A lot of these businesses were the capital intensive nature of the business. just doesn't have the market for it right now, and they're and and investors are are all retreating, and they're gonna be selective. So that that's where I think there's gonna be more pain -- Capital Jason Calacanis (00:32:04): intensive service. David Friedberg (00:32:05): the way, seat seat and a investing, hot as a button. Beep pulse. That's that's yeah. That's it. Jason Calacanis (00:32:12): Okay. Sat. biggest business loser for 2023? Well, I David Sacks (00:32:15): just by the way, a 100% agree with what Free Works said. But my my biggest loser for business in 23 is the consumer. I just don't understand how the consumer isn't gonna finally tap out in this economy. I mean, they they have a mountain of personal debt. credit card debts at all time highs. I think the average credit card rate hit 19.6% last week and is expected to rise even further. the mortgage rates are above 7% now, so forget about trying to buy a new home or sell your home. And your stock portfolio is down too and now layoffs are starting to pile up. So I just don't understand how we're gonna avoid a recession. And you saw, you know, Cash Khari saying that the Fed's gonna keep raising 5.4% is his prediction. You know, I don't understand how if if rates are at 5 a half percent, that doesn't finally break the back of this economy. and we go into a recession. Jason Calacanis (00:33:07): So -- -- Saks that the economy is actually broken right now? We just don't have the data because the data lags 60 days. in most people's minds? because it does feel like the consumer is just and real estate has just broken at this very moment. David Sacks (00:33:19): It seems like. I mean, the pain is very unequal. Right? But in the tech industry, history, we've been in a recession for a year. I mean, like, the growth stocks are down 80%. What Friedberg said is true, no one's gonna fund these, you know, high burning companies. There's an enormous amount of retooling that has to happen. Mhmm. Look. I think the recession is here. It's just very unequally. Distributed. distribute it exactly. Jason Calacanis (00:33:39): Yeah. Well, I mean, if you look at it, buy now, pay later, that's a category starting to break credit card debt as you're saying, hitting, you know, big bad records in terms of how much we love spending. Also, people's Say things are going down. So the consumer's back has been broken. I think we're just gonna feel it in the in the first and second quarter. Chamath, Who's your biggest business loser prediction for 2023? The world wants to know. Chamath Palihapitiya (00:34:05): Let me just build on what Friedberg and Sachs said for a second before I give you my pick. Sure. And I this is the conversation you and I had when we just got on. Guys, what I was telling Jay Cal is at the end of q 4, I did 5 deals. and 4 were pro rata as one was a new deal, and they were all clean markups so the 4 deals that other people put money into. And I was looking at them and I was trying to figure out, okay. What differentiates these things? And Friedberg, to your point, these were super clean startups with very clean cap tables that had clear progress. And then conversely, I had 7 converts showed to me. for companies whose valuations were anywhere between 3 and I would say Jason Calacanis (00:34:49): 12,000,000,000. Chamath Palihapitiya (00:34:50): And I did none of them. and not only did I do none of them, nobody else did any of them. And the problem was the real market clearing price was 80 to 90% down. And so I was like, what is going on here? So, Friedberg, to your point, I don't even think it's just cash intensive startups. I think it's like all growth companies are in a really bad place. I thought that this growth stuff would get sorted out in 2 to 3 months, and now I'm worried it's 2 to 3 years. I think it's -- Yeah. David Friedberg (00:35:17): Here's the music. toxic. Here's the definition, Jamath. What what I think has happened and where I think the cutoff is is when the valuate the applied market valuation of the company based on where public comps are trading is less than the total capital preference in the company, but the total preferred stock. I know so many companies now that raised Jason Calacanis (00:35:36): 400,000,000 David Friedberg (00:35:36): of 2,000,000,000 valuation, but the company is actually worth 300,000,000 now based on public market comps. So they're worth less than their preference stack. So how do you sort of do that self sustaining capital? Chamath Palihapitiya (00:35:47): No. That this is why I think all these converts are getting done. David Friedberg (00:35:51): That's where the rubber meets the road on all these deals. Yeah. That's right. Chamath Palihapitiya (00:35:53): Who does the convert benefit? The convert benefits the VCs who wanna maintain the illusory valuation that they had before, they do that to Jason Calacanis (00:36:05): -- -- David Friedberg (00:36:06): on the hook. Yep. Chamath Palihapitiya (00:36:06): They do that to assuage the limited partner who gave the money that the marks aren't as bad as they thought, but the people that really get screwed, as Jason said, are the common shareholder because eventually those converts deals that do get done, those people will end up owning the company. The cap table gets completely flushed and reset. and the employees get wiped up. Jason Calacanis (00:36:28): Yeah. And then you gotta basically take all the employees who were there previously who now hate the founder And you gotta start over and give everybody all yeah. They're wiped. The people to do Chamath Palihapitiya (00:36:37): all the work get fucked and the people to do none of the work and who just wanna maintain this shell game gets to basically live another day. Jason Calacanis (00:36:44): Basically, people are investing as you gave in the example earlier, like, hey. If it's a $3,000,000,000 company, but it's actually worth 750, People instead of taking the valuation from 3,000,000,000 to 7.50 will say, okay. Buy one share at the $3,000,000,000 price, and we'll give you 3 or 4 shares for free or for a penny warrants they're called. typically or, you know, just different ways to structure this. And then all of a sudden, nobody knows the actual denominator. They may own them 10,000 shares, but they don't know how many shares are actually issued because the warrants are not on the cap table. They're in some side document in a folder in a lawyer or CFO's office. Chamath Palihapitiya (00:37:15): So let me let me tell you my biggest business loser. David Friedberg (00:37:17): Yes, please. Chamath Palihapitiya (00:37:19): I think that the biggest potential business loser this year is Google Search as measured by your profitability and engagement. I think it's easier for me to see where the the usage comes from as opposed to picking OpenAI or ChatGPT in terms of where the usage goes to. And the reason is because I think a lot of people don't still fully understand how machine learning and AI work, but just 30 second primer. There's 2 big buckets of work. There is what's called learning, which is how you learn how to make predictions. And then there's what's called inference which is when you actually type something into the search box you get the answer. The thing with learning And what chatgpt is showing is that they have learned by crawling the entirety of the web. There are 5 or 6 other organizations that are capable of crawling the entire web, in terms of cost, in terms of compute, in terms of the quality of the transformers, and the quality of the AI. And so I find it easier to predict. The decay in the quality of Google search as that much better than everybody else than I find it is to predict who will win because I think that with enough time and money, Oracle, Microsoft, Google, the Chinese Internet companies can all compete Facebook. And so I think that you'll converge on the same training which will lead to the same inference. And so I think consumers end up getting confused and will end up being able to get high quality search results from many places versus today you know, you wouldn't only think that Google is the only game in town, quite honestly, for most people. Jason Calacanis (00:39:05): Well -- So Chamath Palihapitiya (00:39:06): I think Jason Calacanis (00:39:06): that -- -- statistics show that. Chamath Palihapitiya (00:39:07): Yeah. -- Google could lose 10 or 15 percent of usage to all these other sites. And that may not make any of those sites that relevant, but it'll have a material measurable impact to Google and Google files. Jason Calacanis (00:39:18): Fantastic. prediction. And I think, you know, Chachi Pito and those other ones are gonna have a very interesting marketing attack that they can do on Google is why search when you can get an answer. Right? Hey. We'll just give you the answer. You don't have to search. I had so many losers that I went through here. I'm just gonna run to them. Number 5, I thought founders who refuse to downsize in 2022 could be big losers in 2023. How do you guys Chamath Palihapitiya (00:39:40): have 5 in the rest of us or just be all Jason Calacanis (00:39:42): -- I just got to tell you my thought process. This was the one I had a long time. Chamath Palihapitiya (00:39:45): Your thought process. Jason Calacanis (00:39:47): I thought VC funds found it in 2020. Then I thought crypto because Gary Gensner says it's all stock, then I went with you, Tremont. Number 4, Google. My god. They got so many headwinds against them with the shot JPT, but I wound up on. Why color workers? with no hard skills. Twitter going down to I think, you know, Elon said a couple of hundred people's all you need to run Twitter, and I think he said he has 2000 employees or something like that. He has shown everybody, you know, hey. Listen. These the more can be done with less or these things are overstaffed in a massive way. I think white collar workers now, the idea that you're gonna have 4 offers and you're gonna be able to play them off each other is over when we take David Sacks (00:40:24): the show. -- elites. You're saying surplus elites. Jason Calacanis (00:40:27): Sure. White collar workers aka surplus elites. People who actually, you know, are mid managers who don't who don't actually code or don't actually build a product or sell a product, don't actually do real work. As as I think many people would frame it in the managerial class or the CEO class, Man, they're gonna have a hard time. And this week, Andy, Amazon Andy, cut 18,000 White workers, not the blue collar. The white collar workers in Amazon. That was a big turning point. And Benioff, you know, he's Ojana. He is Mahalo. He is Aloha. He does not like to lay people off. He considers Salesforce or family. He laid off 8000. David Sacks (00:41:03): I predicted that. Jason Calacanis (00:41:05): Yeah. And I I mean, that is David Sacks (00:41:07): to me. about that. I mean, the reason's pretty simple. Right? Their gross slowed down by 2 thirds in the most recent quarter, but they're still spending the same amount on sales and marketing. So when that happens, your CAC payback explodes. Right? You go from 3 years pay back to, like, 10 years. So they have to cut costs in order to rationalize their unique economics. So and now it it cascades. Right? Because all of Salesforce's vendors are gonna be getting less money from Salesforce. because they're tightening their belts. So then those companies are gonna have to cut, and the cycle just keeps going and going. Jason Calacanis (00:41:39): Right. And everybody tightens their belts at the same time. phrases the economy aka recession and and and possibly worse. So that mine was just so obsolete. So that's a nice little quartet In 2022, just so you know, I picked Crypto, Friedberg, also picked Crypto, which must have Visa, Mastercard, and Sachs said, asset classes that benefit from government dumps and and pumps. -- quantity. Yeah. Alright. Let's go to biggest business deal of 2023. It's a prediction. Chamath Palihapitiya (00:42:06): What do we think could be the biggest business deal? easy. This one Jason Calacanis (00:42:09): -- Okay, Jamov. Go. Let's go ahead. -- right here. Go ahead, Shamov. Quickly. Chamath Palihapitiya (00:42:12): Starlink will go public. Oh. SpaceX will cut and paste the cap table. And we will take that. It'll be yummy and delicious, and my prediction is that the STARLINK valuation will be at least half of SpaceX's current private marks. Jason Calacanis (00:42:27): 70 5,000,000,000. 70 5,000,000,000. Chamath Palihapitiya (00:42:30): It will be phenomenal. And I think the reason why is that I think in order for Elon to have complete financial flexibility and do what he needs to do and, you know, he talked about this on our pod about the difficulties and the dangers of margin loans and all of that stuff -- Yes. -- he's gonna create breathing room for himself. Ah. This is the simplest and most obvious way for him to do it. it'll give him a ton of more dry powder. Sure. So I think that this is an obvious outcome in 2020. They Jason Calacanis (00:42:59): already have a million subscribers in there better than nothing beta as they call it. I have 2 of them. I think this is a great, great -- Chamath Palihapitiya (00:43:07): I was the first one to get it for a the Global 7500. So -- Okay. Jason Calacanis (00:43:12): Well, I I got it for, yeah, Tahoe. So, yeah, similar. So -- There's David Friedberg (00:43:18): Mike Clayton Chamath Palihapitiya (00:43:18): in your house at the same size. David Friedberg (00:43:20): Yes. Exactly. Jason Calacanis (00:43:20): So there you go. I there is a point too. People are underestimating the TAM, I think, of this product. the TAM is not existing broadband connections. It's second connections. It's connections where connections didn't exist. Chamath Palihapitiya (00:43:32): It's on RVs. Jason Calacanis (00:43:33): Just so Chamath Palihapitiya (00:43:33): you know -- Buses. The best in class the best in class broadband connection for a plane is called Ka band. Mhmm. And it costs $500 a year. That's ridiculous. And you can replace it for, you know, a tenth of the cost and Starlink on a plane is dramatically better, bidirectionally, So I think Starlink is gonna go public, and I think it's gonna be it's gonna be the best chance that we have of opening up the capital markets in Jason Calacanis (00:44:00): 2020 another way of saying people who own private jets, if they are flying 250 hours a year, which would probably be a reasonable number, 2, 300 hours a year. They're paying $2000 an hour for their Internet service. That is bonkers. Okay. Sacks, who is your big deal? biggest business deal, prediction for 2020. -- David Sacks (00:44:19): deals, 23 prediction is there will be a deal between Putin and G. And they met by satellite late last week to discuss ways to further help each other in 2023. Putin characterized as a no limits partnership. You may remember that the 2 of them inked a $175,000,000,000 gas deal in early February last year. That was 3 weeks before Putin invaded Ukraine. I think now Russia is even more dependent on China. We've really driven Russia into China's arms. And I think there will be a big deal, not just on energy, but on agricultural products, mineral products, and rare earth minerals that, you know, Chamath likes to talk about. I think there could be a Jason Calacanis (00:45:07): $1,000,000,000,000 David Sacks (00:45:08): deal between Russia and China this year and folks may go out and live and make prediction. Jason Calacanis (00:45:13): Okay. So there is your 2023 prediction. of the biggest deal, the legion of dictators is forming. I do think it's it is like, you know, that that the axis of evil. This is more a legion of dictators. Like, hey. Let's do business together. Friedberg? You got a prediction for the biggest business deal of 2023. This is really going out of limb here. David Friedberg (00:45:31): I'll do 2 real quick. The first was the similar to what Zach said, but it's kind of echoing what I said earlier, which is the petrol yuan trade. I think that's the Saudi China trade. If this happens and oil is sold in Yuan, it marks the beginning of, I think, the end of the assumption that the US dollar is the global reserve and the risk free currency in reserve for the world. So I think the petro yuan trade, if you guys here's the Reuters article covering Xi's visit to Saudi Arabia last month for a second week of December once this gets inked and signed. It's a real shift globally. I think the other one that I'm that I'm gonna point out that I think is a bit of a out of left field 1 maybe, and maybe I'm just gonna look like a total idiot at the end of Jason Calacanis (00:46:26): the year. Oh, do a wildcard. I like it. David Friedberg (00:46:28): This is my wildcard. So my wildcard is I think Apple ends up buying something completely out of the ordinary. And here's why. I think Apple's core business, they're facing significant pressure with respect to their relationship and ties to China. As you guys may have seen last week, Foxconn announced that they're actually going further downstream in terms of their production model and they're trying to diversify away from being kind of this sole service provider to Apple. Apple, as you know, is under such pressure to get out of China politically that they've started to try and invigorate activity in Vietnam and elsewhere. So a lot of pressure on their relationship with their low cost producer and low cost production partner. They're also under a lot of political pressure because of the store revenues. You guys know this 30 percent app store they that they take. A lot of people are calling it monopolistic, and antitrust is getting involved, so they're feeling that pressure. There's also the pressure with respect to the, you know, waning consumer demand for high end electronics Samsung last yesterday or last week or yesterday, I think, announced significant declines in consumer demand for electronics or their forecast as such. That has to impact Apple as well. when you put all of this together, right, they're they're they're being pressured to get out of their low cost manufacturing center. They're being pressured to stop making money on the App Store. They're being pressured because the demand may be waning, they have to do something big to kind of diversify the business. So I think they might end up doing something like buying a real content company Maybe they do something like buy a Disney. Maybe they do something like buy an automotive company like Fiat Chrysler, I think there are a number of these kind of, like, what may seem today outrageous deals that Apple might end up kind of being pressured into doing so that they can get ahead of their forecast of the impact that all these pressures are gonna have on their core business. And so I think this is something interesting to kind of think may happen this year. I I certainly have no insight or intel on on anything, or I could be completely wrong on this one, but it feels like they've gotta do something this year. I mean, listen -- -- to keep that business for -- I think Jason Calacanis (00:48:24): this is I think I love you. your wildcard? Because the MBS, China trade, and that relationship? Sure. Legion of dictators. But this one is really good. It's hard to buy Disney. monopolistic issues, but buying a car company pretty easy because that's a fragmented market. I love this prediction. I mean, now with Tesla with this depressed stock price, Apple can make a run at Tesla. They could almost buy it with cash. Let alone, BMW Volvo, one of those brands they could buy easily. What a great prediction for me? The prediction is Amazon's 3 legged stool grows into a sturdy chair chair with a 4th pillar. for those folks who are not familiar with how Amazon has built their businesses. There are 3 pillars in their stool, e commerce, obviously, when you buy stuff, Prime memberships, which is kind of considered a separate revenue stream. And, of course, AWS Cloud Computing, I think the 4th is gonna be this continuation of following the health stream, not advertising because that's not a consumer based product. That's just a way they make money. Health is gonna be a big one for them. They obviously acquired One Medical, which was a small purchase. I think they're gonna buy Roman Hims. They're gonna buy Peloton. They could buy a whoop. and they're gonna go all in on health. And, you know, that three legged stool becomes a very sturdy chair. And my runner-up is TikTok is gonna divest under duress. I think that it's going to have to go public, and the Chinese are gonna divest their interest in it and just take their chips. because they're gonna be faced with the existential threat during the political debates over the next 2 years, there will be unanimous support from Democrats and Republicans to TikTok out of the US. Therefore, they divest. David Friedberg (00:50:04): Can I just test that with -- Sure. Jason Calacanis (00:50:05): -- David Friedberg (00:50:05): with you guys? because we've talked about this a lot that, hey. We're gonna ban TikTok. How many of your friends' kids or your kids do you guys know to spend hours a week on TikTok? Jason Calacanis (00:50:16): A 100%. It's a lot. Yeah. 90%. David Friedberg (00:50:18): how do you get over the political mountain of trying to ban TikTok. If you try and ban TikTok, whoever raises their hand and says we should ban and actually gets it done, they're out of office. There is gonna be so much pressure and backlash because people are hooked and love that app and use it all the time. To take that away from people -- We'll Chamath Palihapitiya (00:50:36): feel like David Friedberg (00:50:37): this kind of young kids Chamath Palihapitiya (00:50:39): that don't have phones actually get everything that TikTok has on YouTube shorts. So I don't think TikTok is that important because it it is not actually there is no sticky network effect inside that app. So there isn't usage that's dependent on people you know a graph that you build. It's a lot of passively consumed content. And so, you know, you're you're getting pushed a lot of algorithmically defined content. You can do that on YouTube. And so actually don't think it's that meaningfully important if TikTok goes away. I think the content creators stay. It's harder for them to build a business on YouTube shorts But if you look at the and measure the density of content inside TikTok, it exists almost 1 to 1 on YouTube. Jason Calacanis (00:51:22): Mhmm. That's interesting. It's an Chamath Palihapitiya (00:51:23): interesting question. David Friedberg (00:51:23): You think you think you think it'll you think it'll be okay if we if we cancel TikTok in the US, and we say that's it. You can't have TikTok. Everybody Jason Calacanis (00:51:29): wants to you, Jim, it's great. -- Chamath Palihapitiya (00:51:30): disruptive, but people will just go to YouTube and Instagram. It's not that big of a deal. Jason Calacanis (00:51:34): In fact, a lot of Chamath Palihapitiya (00:51:36): the my favorites, if there was a network effect inside there, then I think people would have a reason to complain to somebody, whether it's your representative or whether it's somebody else to say, hey, don't do this. This would have a deleterious impact on my quality of life or my quality of experience. And you could make that clear claim on Instagram, Facebook, you know, Google, YouTube, But TikTok is is much more brittle that way, and that's why they need to get public sooner and monetize this bloody thing because I think that It's very easy actually to deconstruct TikTok's value into these other places. Jason Calacanis (00:52:14): I can tell you my favorite TikTok is Chef's reactions, and I consume him now on Instagram because he posts we just copies one to the other. Chamath Palihapitiya (00:52:21): And So Chefs' reactions is a great example where he actually got banned by talk and then diversified on his own. And now what he does is he publishes across multiple streams. And if you look at all the big creators, They all do that because it makes no sense to actually give the power to any one of these things. Jason Calacanis (00:52:37): Why have a dependency? Chamath Palihapitiya (00:52:38): Why have a dependency. Jason Calacanis (00:52:39): Alright. Let's keep the trains moving. most contrarian belief, this is the Peter T. L. Award, your chess partner, Saks. Who's winning in 2022 in chess? How many games do you have going with Peter Till right now? And who's higher rated? You demolished me with your queen's gambit. I played one game. I got killed in seven moves. I'm I'm I'm ranked at 800, 900 right now. Saks is at 1800. He just walloped me. Who's higher rated David Sacks (00:53:03): right now? You are Peter too. Except queen's gambit. Jason Calacanis (00:53:05): Well, you know, I just I I didn't even know what it was. I was like, what opening is this? You're like, Queen's gambit. You're dead. Boom. David Sacks (00:53:12): Queen's separate shot. You don't wanna accept the Queen's Gambit. Jason Calacanis (00:53:16): It's a David Sacks (00:53:17): very pleasant game for white. I'm gonna go on the limiter, you know, and and risk being wrong. my my predict or most contrarian belief is that the bromance between Biden and Zelensky comes to an end at some point in 2023. And let me state the the part that I think is conventional wisdom and everyone agrees with, which is there's gonna be a massive Ukrainian counteroffensive in the spring. And I think that could go one of 2 ways. Either it could make limited gains, basically, the Russians fight them to a stalemate or it could be successful. And they could basically push the Russians back to the February 23rd lines and then make it play for Crimea. I predict that in either one of those circumstances Zelensky's interests and Biden's interests will start to diverge. So in the case of a stalemate, which I think is probably 5050 here. Biden's gotta start going into election mode for 2024. And I think we're saying that we're gonna be in a recession. So I think that if there's a stalemate, I think Biden's gonna tell Zelensky wrap this thing up as time to negotiate. We need to get this over with. By the same token, if the counteroffensive is successful, I think that the administration, hopefully, cooler heads will prevail and not let them take Crimea. That's basically what they're gunning for. is they not only wanna get back to the February 23rd lines, they wanna go all the way back to the 2014 lines of retaking Crimea. I think that's extremely dangerous. I think that could precipitate a nuclear war. And I think that the cooler heads of the administration will tell Zalyns get a stand down and that's the right time to make a deal. So I think in either one of these scenarios, I think you will start to see a divergence between the Ukrainian and the American interests, and that could create a rift And I think no one's really predicting that. Jason Calacanis (00:55:01): I I think this is great. This is kind of what I thought the plan all along was, which was to deplete Putin of resources distract him and then get the west off of his oil and and and try to do regime change, but do it by bleeding him. this would be proof positive of that strategy, which is bleed them to the end, and then sell Zelensky out. I think that's actually I know that I know it's cynical. But I think that's what we're doing. I think Ukraine is a tool to deplete Putin and then maybe get to regime change. I'm cynical as it gets with this. Shamoff, what's your most contrarian belief of 2023? Chamath Palihapitiya (00:55:35): I will go and pick that inflation, which people expect to fall off a cliff, doesn't fall off a cliff as fast or as meaningfully as people want. And so I will explain inflation as Jason Calacanis (00:55:53): 3 Chamath Palihapitiya (00:55:53): different chapters and we've seen the first 2 chapters play out. So 2021 chapter 1 was all about energy inflation. And, you know, we all talked about having almost $10 gas at the pump and what does it mean for everybody and it caused that initial spike in inflation. And then we had it come off and Sachs called us. He said, you know, we're gonna have this sort of double hump. And 2022 was really the story of goods inflation. Right? All these prices and all of these things went up because the input costs went up, and we all had to bear the implications of that. But then that started to ebb. Now if you looked at the tail end of 2022 what I found super interesting was the number of articles I saw about wage inflation. Whether that was Biden using an 1800 error law to prevent a railroad strike, the number of states that increased minimum wage, the trend around unionization. So in general, my thought is that the pendulum is swinging very markedly away from capital and towards labor. And as the labor participation rate stays low and continues to go down, And also it's compounded by an unemployment rate that may go up. Right? People are it's gonna be harder and harder to get people to do the work you need at the company you have unless you pay them more. And if that gets exaggerated, then inflation will stay where it is. It won't be as muted, and it won't fall off a cliff as people want. It'll be persistent. That's my big contrarian -- Got it. Jason Calacanis (00:57:36): -- Chamath Palihapitiya (00:57:36): wager for this year is that we -- That is quite contrarian. We see wage inflation that keeps inflation not going down as much as people want? Jason Calacanis (00:57:44): This is contrarian because everybody's saying, hey. It's over. The consumer's back has been broken. The credit card debt is high. And everybody's being laid off, yadayadayada. Therefore, goods and services, there'll be more supply than demand, and the prices will lower. very contrarian, free break, do you have a contrarian belief for 2023? David Friedberg (00:58:03): I think my it follows my earlier points about the Saudi China Russian Russian Russia trade. This year, exiting Jason Calacanis (00:58:14): 2023, David Friedberg (00:58:17): It may be the case that, you know, there's historically been this belief and this continuing belief that the US dollar will always be the de facto global reserve currency And the current mantra is that it's better than the rest. Everyone else is worse off than the US. Western Europe is in trouble. Japan is in trouble. China is in trouble. Everyone's in trouble. But if there is a coalition, an economic coalition, a scaled economic coalition, that starts to shift the balance of power a little bit, and the US, meanwhile, is taking on extraordinary dead load spending $1,700,000,000,000 in an omnibus bill, you know, has this massive unfunded social security problem coming down the pipe and are trying to manage multiple funded conflicts around the world, it could be that the US dollar coming out of 2023 starts to trade more like a risk asset. and less like a risk free asset. And so I think that that's my big contrarian bet is that maybe this year marks the beginning of the end of the US dollar as the kind of global de facto reserve currency based on some of these big trades that I talked about happening. Unbelievable. So that that would be my my big kind of contrarian. Jason Calacanis (00:59:27): Perfectly, Seth. That's your contrarian bet. The accent the legion of dictators, the MBSs, etcetera, they become they form a new global currency. Yeah. My term not yours. David Friedberg (00:59:37): I'm not calling it a yeah. I wouldn't say a legion of dictators, and I wouldn't say form a new global currency, but I I do think that the fact that that large economic trading models start to be done in non dollar denominated form Got it. You know, weakens the the kind of reserve status of the dollar to some degree, not fully. Right? It doesn't happen in a binary way. And then the dollar starts to trade more like a risk asset like other currencies due to some degree, not fully. So maybe maybe this Jason Calacanis (01:00:04): is the year David Friedberg (01:00:05): we start to see that shift. Jason Calacanis (01:00:06): Once again, I take the exact opposite of your contrarian belief I believe American Exceptionalism continues to soar as Russia China, Saudi Arabia to a lesser extent, continue to self sabotage themselves with insane wars like Putin has done or cutting off the heads of entrepreneurs in China figuratively, I'm staying saying here, I think you cannot have exceptionalism without entrepreneurs, without people having Friedberg. And I think that means American Exceptionalism based on freedom is going to continue and the legion of dictators, I believe, are gonna stab each other in the back before they change the world or move the currency. Can't trust them. They'll they'll snip at each other. And or they're self sabotage. Exactly. Where do you fall out on these Exactly. Where do you fall on our opposite, Jared? David Sacks (01:00:53): I think that America is really feeling its wheaties right now. I think that American power is immense. I think that the superiority of our weapons in Ukraine has been one of the big surprises of the war. Jason Calacanis (01:01:04): Let's go, Palma Lucky. David Sacks (01:01:05): I don't see the world in the simplistic good guys versus bad guys frame that JAKout does. However, America is on turbo right now And, yes, it is true that the bricks would love to get off of the dollar because we are now using the dollar and the financial system as swift as a as a geopolitical tool and a weapon, and they would very much like to be off of our dependence on our currency. but I don't think they're anywhere close to be able to do that yet. And like I said, America is on turbo right now. Now one thing one thing I wanna mention, this just came out White House correspondent named Jennifer Jacobs just reported that the US has agreed to send Bradley armored vehicles, basically, our best tanks to Ukraine Previously US officials had balked at sending armored vehicles saying heavier weapons would be too difficult for Ukraine to operate and maintain bad allies or moving to provide such weapons. So we keep providing the Ukrainians with more and more sophisticated weapons, more and more support. Like I this is leading up to a huge Ukrainian counteroffensive in the spring. And I really don't know what's gonna happen at that point. I do think that the Russians will escalate. I don't think they can afford to lose this war. They view it as existential. And I like I said, I hope cooler heads will prevail. And if the Ukrainians are successful, breaking through, I hope that the Biden administration will shut this down before they try to retake Crimea. Because, you know, we've discussed this before. I think the Russians confronted with a choice between a total defeat that includes losing Crimea and their naval bases of a stopal, and sees the Ukrainian flag flying over their base at Sevastopal. If if that's a choice between that or potentially using a tactical nuke, maybe at the mouth of the Crimean Peninsula as a firewall, I think they could choose the nuke option. So it's a very dangerous situation and, you know, very very dynamic. There's a lot of possibilities. Jason Calacanis (01:03:03): Alright. Let's go on to best performing asset 2023, I'm going with Sea Stage investing again. I don't think people wanna get into these toxic cap tables at the late stage, as Timov pointed out. So I go with seed stage and, you know, end up to series a. The people brave enough to place bets. The founders brave enough to start companies. I believe it's the best performing asset class of 2020 3. Chomothro do you got? Chamath Palihapitiya (01:03:23): I think that there's still a lot of uncertainty in the world and in the markets. And so I'm generally concerned that there's a lot of chop. And so I pick something that's pretty conservative, but I would have a combination of cash and the front end of the yield curve. So t bills all the way up to 2 year bonds. So you can generate four and a half probably by the end of this year or 5%. pretty safely. Owning this stuff while you wait for things to become more certain. And the way that I think about it is that I would rather miss the first 10 or 15% of a rally Once we're really done with this stuff, then try to overcorrect and try to pick a bottom just because I think that you could lose a lot of money. So I think the goal for this year is to stay resilient and in the game. And so Owning having a bunch of cash on the sidelines ready to pound it in. Meanwhile, a portion of it collecting 5% is not such a bad thing while you wait for the bottom. Fantastic. Yeah. David Sacks (01:04:31): My my answer was actually very, very similar, which is if Cashari is right, that rates are gone at 5.4% in q 1. why wouldn't you just put all your money in short term T bills? You earn 5, 5 and a half percent risk free. Yeah. Like, set it and forget it. Yeah. And that's why capital flows are moving hugely right now from equities into bonds, especially if we're going to a recession, which is inherently deflationary. Jason Calacanis (01:04:56): What do you got, Friedberg, forming asset class of 2023? David Friedberg (01:05:00): One of the things so I think It's inevitable that we continue to have significant infrastructure spending from both the stimulus and security point of view. So, you know, we can't wanna continue to stimulate the economy and and support growth. We wanna continue to create jobs and support this transition in the risk. If if this if the recession predictions play out true in the job market does loosen. It's very tight right now. There's gonna be even more of an impetus to continue to do infrastructure investment But I think there's also these big economic transitions happening underway right now with pharmaceuticals, with semiconductors, with energy, there's a lot that we've talked about where there's a security problem and a redundancy problem. And so, you know, there there are a couple of ways to kind of play this infrastructure spending thesis in each of those areas. I've kind of highlighted 4 of them. Jason Calacanis (01:05:52): 1 David Friedberg (01:05:52): is in semiconductor capital equipment. So k like Encore, Applied Materials, that that that range of businesses that provide and sell the equipment into the the fabs and the and the organizations that build semiconductor manufacturing facilities. The second is kind of an oil and gas services. So similar to what Saks said earlier, Schlumberger, Baker Hughes, that class of businesses, I think, benefit in this in this environment. And this is independent of kind of economic conditions, certainly, because these are big multi year spending projects. The third is in the the equipment to support them, so deer and Caterpillar. And then the 4th, I think, is an important one. I'll talk about this in a minute with respect to my biggest kind of anticipated thing for next year, which is in a pharmaceutical infrastructure. So Thermo Fisher. And there's some company and others like them. because there's a lot of build out happening to support these big transitions happening in the modalities that are being used in pharmaceutical drugs and diagnostics. And then I think that there's also a couple of these businesses that are diversified like Danaher, Honeywell, Thermo Fisher is a good example that play across multiple of these these opportunities. So those are those are all great businesses to own, and you don't need to worry about you know, they're they're they're growing cash flow positive, dividend paying companies. And you don't need to worry about, you know, are am I getting 5% or 5 a half percent based on the equity price this year? These are long range businesses that are building real value. growing their top line and compounding value from within. And then they're acquiring a lot of smaller businesses very cheap. I'll say what? That's an important trend. I've seen across these companies, Danaher, Honeywell, Thermo Fisher. David Friedberg (01:07:24): They buy small companies. They pay very little, and they immediately get massive return on invested capital. Like, they're in the the high teens. So why get 5% on key builds when you can get high teens ROIC? on the management teams running these incredible platforms. So that's where I I'm most excited for this year. Jason Calacanis (01:07:42): Okay. Now let's move on. David Friedberg (01:07:44): That was like a that was like a mad that was like my my mad my mad money segment. I've never Jason Calacanis (01:07:47): lived in David Friedberg (01:07:48): the mad money segment before, but there there you guys go. Jason Calacanis (01:07:50): Worst performing asset? I I went with energy because not that I think it's not important, but it just feels like everybody rushed into it in 2022. So it feels like it's overheated. And if we are in a recession, people might lower consumption in terms of energy and be looking for cheaper alternatives, so it could be overheated. So I went with energy. Chamath, worst performing asset? You got 1? Chamath Palihapitiya (01:08:11): I think that if we've learned anything from the last 3 years, you have to separate the valuation of a company and how it performs in the stock market with its value in society. So for example, if you look at zoom, Zoom's valuation has cratered, but its value in society has probably continued to go up. It's still a massively relied upon tool. The point is that markets do not give you credit for the value in society. They will give you credit when you are about to over earn but then they'll pull it all back when they think that you're going to under earn. So in that lens, I think that tech will have a tough year I think energy will have a really shit year, and probably the biggest asset class that is going to get pressured is going to be junk debt. And the reason is a bunch of these variable rate loans when rates are at 5 and 6% that all of a sudden are Jason Calacanis (01:09:07): 11, 12, 13, 14 Chamath Palihapitiya (01:09:09): percent, coupons, a bunch of companies will have trouble meeting their debt obligations and We'll have to restructure the debt, or we'll have to file. So -- Tax -- -- energy -- -- force performing assets. -- for Jason Calacanis (01:09:21): 2023. David Sacks (01:09:22): Oh, some category of what you want. said, I think office towers in San Francisco are that is some serious toxic debt, 27% vacancy rates, and growing. as Lisa's role. I think that a lot of these buildings, maybe virtually all of the San Francisco Downtown is gonna be owned by the bank soon. because no one could either Jason Calacanis (01:09:42): -- -- real estate in San Francisco -- Well, David Sacks (01:09:43): it's specifically the office towers. Specifically, the office towers because no one wants to be in those those skyscraper buildings South the market, you know, mired in homelessness. So Chamath Palihapitiya (01:09:53): yeah. David Sacks (01:09:53): I mean, I think that a lot of those buildings can be owned by the banks. There's gonna be some major fire sales. Remember, this was the hottest commercial real estate market in the country a few years ago, and now it's the worst. Chamath Palihapitiya (01:10:04): Well, look. What happened to look what happened to b what do you think about that crazy thing that happened with the Blackstone REIT? I mean, that's nuts. You know, is this what happened? Yeah. Blackstone has a product called BREIT. It's like a $70,000,000,000 Exchange traded fund effectively. And what it is is the ability for individual investors to don't access to Blackstone's, you know, commercial real estate portfolio. and they had such a massive amount of redemptions that they had to close redemptions at the end of q 4, and they were worried that the redemptions were gonna continue to these are individual investors who basically sees the writing on the wall as David said and wants their money out. And so they went to the University of California Pension System, And they essentially got a huge infusion of capital. I think it was about $4,000,000,000 where they guaranteed 11 a half percent interest to these guys for the Jason Calacanis (01:10:55): $4,000,000,000. Chamath Palihapitiya (01:10:56): And they also posted a $1,000,000,000 of their own equity in in the actual REIT to backstop it. So what does it show you? I think what Saks is saying is really right. It's it may not just be in San Francisco, but you know, with all of these people either getting laid off, with all of these people now working remotely, we may finally start to see the beginning of the reckoning in commercial real estate, which has been an unbelievably performing asset class up until right about now. And and on top of that, You have to factor in these much higher rates. And so these building owners, if they financed it, which they invariably have always financed, they have huge variable rate payments that are due on these buildings, the rent rolls are lower. Even people like Twitter is just refusing to pay the rent, So you have to take them to court. So it it elongates when they have to pay. And so you could miss a bunch of rent payments and all of a sudden the banks could just go crazy and take ownership Jason Calacanis (01:11:50): 6. Okay. Do you have a worst performing asset class for 2023 prediction? Sultan of Science, Queen of Kinois, Dave Freiber. David Friedberg (01:12:00): It's it's really simple. I've mentioned it before. It's consumer credit. We assume that raising rising rates and inflation would taper down consumer demand, meaning consumers buying goods and stuff, and that certainly hasn't happened. I I'm in Vegas right now. I was in the car yesterday and the driver grew up in Vegas. He's like in all the I've lived my whole life in Vegas. He's like, I've never seen a December like we just had it was packed the entire month. He's like, normally in Vegas, it's dead up until Christmas. And in the years, people come into town, but it's normally dead. He's like, I've never seen such a busy month. And I think we see this in the numbers. Consumers are still spending like it's 2021. They're still spending like interest rates are 0. As we talked about, Consumer credit is skyrocketing. Wall rates are skyrocketing. And so I think we're gonna run into a real wall with respect to consumer credit in sometime this year, and you're gonna see as as you guys notice, such a complicated interwoven market of assets, that the way that this this can be traded, there's a lot of different ways to trade it. But I think it's gonna be in general, consumers are not gonna be able to meet their debt obligations, and it's gonna be forensic. Jason Calacanis (01:13:09): Could be mortgages, could be credit card debt, defaults are coming. David Friedberg (01:13:13): Yeah. And I think the market the market has priced in a bunch of this stuff. Obviously, companies like Affirm and, you know, the the what do they call buy now pay later companies, but credit card companies, mortgages. There's a lot of assets that you can start to kinda pick apart Where do you think this unravels first? How does it what gets hit hardest? What's under priced and overpriced? Probably a lot of good pair trading to do as Chamath kinda loves to talk about. with respect to which of these are more likely or less likely to be sensitive to this dynamic, but there's I think it's it's gonna be a pretty ugly scene. Consumers just have way too much debt relative to their earnings right now. and it's pretty nasty. Jason Calacanis (01:13:47): And they have some confidence that they'll always have a job or some way to pay their 4 easy payments for mortgages. David Friedberg (01:13:54): It's it's hard it's Muscle memory is serious. You know, you come out of 2021 when you had it's not just stimulus checks. It was the low interest rate and and easy credit availability everywhere. And it's just easy to jump into getting new stuff and cool stuff. And then when you get used to getting new stuff every week or every month, you kinda stick with it and you're like, I don't wanna give it up just yet. I just not just yet, not just yet. you know, and so it's it's hard to kinda step back from spending when you have a new type of lifestyle. And I think that's what's going on. Jason Calacanis (01:14:20): I think this is an incredible observation in David Friedberg (01:14:22): There's a great TikTok of this guy that runs car dealerships, and he sent them out. Unlike how much incredible money like, what a significant percentage of people's income they are spending on their monthly car payments, and people buy these cars that are well beyond what should be kind of a reasonable budget if you were to go to Susie Orman for advice Jason Calacanis (01:14:39): -- They scratch. -- David Friedberg (01:14:40): not buy that freaking car. A stretch. And this the stretching is gonna is gonna snap this year. Yeah. Jason Calacanis (01:14:45): Absolutely. Which brings us to the most anticipated Trae and love it. Great one. most anticipated trend of 2023 related to yours, I went with austerity. I have a friend who sometimes flies private often. and I was talking to him about his Christmas vacation. This friend of mine, Chamath, instead of flying private to his vacation, he had to pick up his kids, he had to go back and forth, he was driving his car. That was -- -- 3 hour that was you. Oh, okay. I didn't wanna I didn't wanna declutter you now. so great. -- who would normally buy private till Lake Tahoe? And he's like, no. I can't go out with your skiing on Friday. I gotta pick up my kids And then I'm driving. I said, wait a second. How are you doing that? He's like, I'm driving a car. I said, what? Who's driving the car? He said, I'm driving the car, and that's why I say, Austerity is my anticipated trend of 2033. Chamath Palihapitiya (01:15:35): I agree with you. I actually think this is a really good opportunity to pull back on so much waste I haven't really looked at my household budget in probably 2 or 3 years. Didn't even bother. Why? And then and then when I looked at it, I was like, wow. This is really inflated. to a level that I didn't expect. Yes. But it makes a lot of sense to live in a more heads down austere way I don't know. Yeah. I well, Jason Calacanis (01:16:01): I mean, look at tonight's menu. You went with Duck. I I guess the Olive Fed, Wagyu, everything's off the menu, man. No black Raffles. We're having duck. We're we're down to poultry. David Friedberg (01:16:08): That's just true. Jason Calacanis (01:16:09): Next week, we're gonna have pasta. It's okay, Chamuffa. Austerity measures for everybody's sex. David Sacks (01:16:14): They call it foul for a reason. Right? Jason Calacanis (01:16:16): Oh my god. Saks, Mara, do you buy into austerity where Shamat and I are austerity belt tightening as our trends? Where were you? What's your trend for? Chamath Palihapitiya (01:16:23): I think David Sacks (01:16:23): that's a pretty good trend. The trend that I am gonna suggest will be to your great disappointment, Jay Kal, which is Trump's influence in the GOP continues to wane. You're seeing it in real time right now. The headline is Trump's endorsement proves worthless. to Kevin McCarthy in the speaker bid. Even the MAGA faithful like Matt Gaetz, like Lauren Bobber, they are ignoring Trump's pleas to get behind my Kevin. And in fact, they're kind of not just defying him, but making fun of him. Maggates that had a repost Trump saying sad exclamation point. And Beaubert was saying that Trump needed to get behind her movement. So we have now a level of of open defiance to Trump and the GOP. His endorsements just not are not what they once were. And even if somehow Kevin McCarthy pulls us off, I think all that means is that Trump gets blamed for every swampy rhino compromise that McCarthy has to make to keep the government running over the next 2 years. So it's a lose lose. David Friedberg (01:17:28): Does that mean that populism is on the way, do you think? Like, because the it's the electorate him elected in the first place. He was not very popular with politicians. The he was kind of an outcast what he got elected the first time, and that may be the case now, but he still got elected because population loved him. People loved him. Is that gonna happen? Do you think that means that the populism is kind of waning or the interest of the the voters is waning on him, or is it just the political parties why the Chamath Palihapitiya (01:17:52): Bobert only Bobert only won by a few thousand votes. He didn't exactly crush it in Colorado. David Sacks (01:17:57): I think a lot of this has to do with Trump's personal standing after the midterms. The candidate said he personally picked that were all in tough races. They all basically lost. It was about the distraction he caused by making the 2020 election such a big deal constantly looking backwards. So I think the Republican party doesn't like the anti It's not about the policies, I don't think. I think it's a 100% about the about Trump's selectability and about his ability to get things done, and it's not really about the positions per se. So I think, Friedberg, to answer your question, I think that the future that GOP will incorporate this populism, but it's gonna find a better integration with the established ruling of the Republican Party And future candidates will have to basically satisfy both of those wings of the party. Jason Calacanis (01:18:44): Saks, was it was the straw that or maybe the two straws that broke the camel's for Republicans and Trump in that relationship. Was it January 6th and the election denial? Like, for Republicans, is it just like, come on. Those are the 2 things. David Sacks (01:18:57): This constant focusing on the 2020 election. First, it cost them the cost Republicans that Georgia run off seat with Purdue against WarNOC, Purdue won on election night, didn't clear 50%, had to go to the runoff. This was happened the day before January 6th. This happened on January 5th of 2021. That was the 1st race where Trump's antics cost them. Then you had this midterm election where, you know, all the candidates who had to appease Trump by talking about, again, the last election instead of looking to the future, they got punished by the the voters. I think Republicans wanna win. I mean, they're tired of losing. Jason Calacanis (01:19:34): Is that simple? David Sacks (01:19:34): It's that simple. Jason Calacanis (01:19:35): Yeah. The job of a politician is to win. Friedberg, you got an anticipated trend of 2023. David Friedberg (01:19:42): I am excited about and wanna share the point of view that I think cell and gene therapies are becoming more mainstream. So these are pharmaceutical modalities where we use gene editing systems where you can actually go in and change or add a genetic material to cells in your body. to resolve things like genetic diseases or change protein deficiencies or introduce new proteins. And then cell therapies where we engineer cells put them in the body, and those cells go and do things like attack and destroy cancer cells, for example. There are currently 27 FDA approved cell and gene therapies on the market. There are over a 1000 in clinical trials, many of which are already showing extraordinary efficacy and benefit. Today, these therapies cost upwards of a $1,000,000. So I think there's a massive and talked about the infrastructure investment conversation earlier because of the number of diseases and the number of conditions and the number of people that these therapies can treat, I think there's massive infrastructure investment opportunity coming forward this year. but also seeing these come to market come out of the clinical trials, get FDA approved. We have to ramp up and build up the infrastructure needed because It's not traditional. We make a drug in a factory and send it to people, and they get it injected. These are much more complex. They require much more complicated delivery mechanism. You have to have systems to engineer cells and edit them and put them back in your body. Those systems today take days or weeks and cost, you know, as a result, a $1,000,000 plus per treatment So I think that the cell and gene therapy opportunity, you know, the JPMorgan Healthcare Conference starts this week. It's the biggest biotech and Healthcare Conference in the starts in San Francisco on Monday. This is one of the biggest areas of interest and and one that everyone's investing against But as these come to market, there's you know, we talked about this last week, genetic diseases, types of cancer that are gonna be addressed. And I I'm really excited about seeing more of these products come to market And seeing the whole kind of infrastructure and delivery system change. Jason Calacanis (01:21:33): Alright. Sorry to interrupt trying to keep the trains moving gene editing. Very good choice. Alright. Before we end with this, it's a little bit fun. Most anticipated media for 2023, these are things. We like to talk about the media here sometimes. We talked about Why LOTUS season 2, amazing season. And maybe what you're looking forward to next year I am really looking forward to in film Oppenheimer, Christopher Nolan's movie about the Manhattan Project. That should be extraordinary. I loved was Dunkirk his as well? I'd love Dunkirk. Kinda like everything he does. And when he this is him becoming like a history uncle. I I'm here for it. I'm here for Nolan becoming our history on go instead of Batman. Chamath Palihapitiya (01:22:13): What was the one after inception though that was really confusing? The one with Denzel Washington's son, with John Washington. Yes. Jason Calacanis (01:22:20): It was I couldn't finish it. I tried twice. I I got it. Chamath Palihapitiya (01:22:24): I gotta David Friedberg (01:22:24): go with the third Jason Calacanis (01:22:24): shot on that one. It was -- David Friedberg (01:22:26): Oh, yeah. It was it was his worst film. What's the name of it? I can't remember. It was called Tennant. Tenant. Jason Calacanis (01:22:32): Tenant. Yes. About, like, time and reverse David Friedberg (01:22:34): and this. Jason Calacanis (01:22:35): It was so yeah. David Friedberg (01:22:35): Like, I -- It's impossible to follow. Did you guys see his original film, which is incredible Memento Jason Calacanis (01:22:39): -- David Friedberg (01:22:40): Of course. Jason Calacanis (01:22:40): -- David Friedberg (01:22:40): film with Memento was fantastic. Chamath Palihapitiya (01:22:42): Yeah. Memento was great. And such is incredible. David Friedberg (01:22:44): It was enough mind mind yeah. It was mind bending enough. that you're like, oh my god. Incredible. And then I think they took a too far tenet. I tried to watch it three times. I'm generally pretty good with these sorts of films and love them, but oh my god. It was impossible to follow. He he took it too far. Okay. So, hopefully, he goes back to his roots. Jason Calacanis (01:23:01): In terms of TV series, I'm looking forward to secession coming back Ashoka, who is Anakin Skywalker, AKDarth Raiders, Patawans. Ted Lasso season 3 coming up. Those are for me incredible. And then on the book front, man, the Michael Lewis book about SPF is gonna be next level. I cannot wait for that. Sachs, you're a media junkie. What he got? on your list of things you're looking forward to, or I should say, what is Tucker's writers? What did they put down for you? David Sacks (01:23:26): Well, Jacob, I thought you were Jason Calacanis (01:23:27): gonna pick David Sacks (01:23:28): I thought the for movie, you're gonna pick cocaine bear. Jason Calacanis (01:23:32): I can't wait for cocaine. Chamath Palihapitiya (01:23:34): Okay. Bear does look really amazing. David Friedberg (01:23:35): That's a Chamath Palihapitiya (01:23:36): great fucking bear game in our possession. Jason Calacanis (01:23:38): In extraordinary. A bear is in the woods, and a I guess people who are trafficking in cocaine drop their or crashes, and the bear eats the cocaine and then goes on a rampage. It's kinda like a a genre film like in the Crocodile way. By the way, I'm I'm listening to Quentin Tarantino's book, by the way, of criticism. Get the audio book. You'll like it, Saxx. He talks about old films in the seventies. Very good. Shout out to Quentin. What do you got? What do you got on your short list? History uncle? David Sacks (01:24:07): Me? Jason Calacanis (01:24:08): Yeah. What do you got? Chamath Palihapitiya (01:24:08): Well, I David Sacks (01:24:09): I just gave you, Juan. Jason Calacanis (01:24:10): But Okay. Cocaine bear on top of your We'll watch it together. David Sacks (01:24:13): Oppenheimer was on my list, and I think -- Of course. Jason Calacanis (01:24:16): -- David Sacks (01:24:16): Marvel is doing a good job developing a new villain to rival Thanos with this with King. I don't know what phase they're on now, but slow season 2 and then the new Antman movie and You know, I thought after Thanos, they wouldn't really be able to top that. But -- Yeah. Jason Calacanis (01:24:31): -- David Sacks (01:24:31): they've come up with a really good concept, I think, for the next, you know, 20 Marvel movies. Jason Calacanis (01:24:36): Well and then it will eventually become Glactus. Yeah. Chamath Palihapitiya (01:24:38): You guys have completely fucked up. You have missed the most obvious slam. Here we Jason Calacanis (01:24:43): go. Sharday's new album. Go. Dune part 2. Oh, I haven't watched number 1 yet. I gotta do wait. What? You know, I what happened David Sacks (01:24:53): was -- -- boring. Wasn't it? Jason Calacanis (01:24:55): My wife wants to watch it. Chamath Palihapitiya (01:24:56): It is so stylistically beautiful. It is a little boring. There's not a lot going on. Slow. But it's so well shot. It's a it's visually just stunning. I mean, if you need to watch it on a big screen with big speakers and but part 2 comes out in November this year. Jason Calacanis (01:25:12): Absolutely. That's okay. Friedberg, tell us what documentary on veganism you recommend and you're anticipating for 2023. What vegan documentary or animal abuse documentary. David Friedberg (01:25:23): I am excited about the generative AI based media that I think is gonna start to kinda rocket this year, we could see, for example, the first, you know, AI written symphony, the first kind of AI written published novel, how interesting. Would that be like a full novel published by AI? And and more, you know, these short films based on an AI driven script, And maybe even what what I'm really excited about is these AI based interactive video games or kind of experiences where you, the user, kind of get to create and live your own world through some sort of video game type modality. So I think AI driven media Alright. Jason Calacanis (01:26:02): There you have it, folks. There are -- David Sacks (01:26:04): Speaking of pop culture chaos, I guess Prince Harry has a book coming out that's called spare. Jason Calacanis (01:26:11): The spare? Spare. Like, pick up a spare when you're playing bowling? No. David Sacks (01:26:17): But you know, like, in in the English monarchy, they there's the air and the spare So he's calling himself but to me, that's like a weird self description. Yeah. Like, that's that's how you see yourself is just Jason Calacanis (01:26:29): -- -- self deprecating. He didn't take that. They they paid him so much money. I'd heard they have to sell 1,700,000 books David Friedberg (01:26:35): to break even. But you know what it reminds me of Jason Calacanis (01:26:35): is when Leonard Nymoy wrote a David Sacks (01:26:40): book I think he wrote a book called I am Spok, and then he wrote a book called I am not Spok. Jason Calacanis (01:26:45): Nice. David Sacks (01:26:46): He could never get comfortable with the fact that he was to Spok. Yeah. Yeah. And there's something weird about calling yourself spare. Like, you know, you're clearly not comfortable with Jason Calacanis (01:26:56): It's like everything yeah. Everything they taught you, everything I learned at Harvard Business School, and everything they don't teach at Harvard Business School, you can you can do both books. Alright. Listen. This has been great. Breaking news, as we're talking here, chant, GPT, OpenAI, doing a tender offer. at 29,000,000,000. With no revenue losing 3,000,000,000 a day. Oh my god. Who is buying a 29,000,000,000? Well, that's David Sacks (01:27:21): it's founders fund or, reportedly, according to the journal, it's founders fund Thrive Capital. So founders fund does not generally do super overpriced deals. David Friedberg (01:27:29): Yeah. I I yeah. I would buy that. That's a silly bet. Jason Calacanis (01:27:32): I mean, come on. David Friedberg (01:27:33): That the I mean, dude, are you kidding me? That's that can be a $300,000,000,000 company. That's a 10 x. Right. David Sacks (01:27:36): But that yeah. Chamath Palihapitiya (01:27:37): I think Jason Calacanis (01:27:37): it's a 10 x from here? I would I would not -- David Friedberg (01:27:41): Totally could be. By the way, do you guys remember that the -- Lung Jason Calacanis (01:27:45): -- -- David Friedberg (01:27:45): of OpenAI. I don't know what the current situation is. but it was a nonprofit -- Yep. Jason Calacanis (01:27:49): -- David Friedberg (01:27:50): where they said investors put money in, but the investor's maximum return was a 100 x on the dollar invested. So I don't think -- -- a nonprofit, but it's a profit up to a Jason Calacanis (01:27:54): 100 Chamath Palihapitiya (01:27:58): No. No. That happened afterwards. It's when they converted. David Friedberg (01:27:59): What was the original model? Chamath Palihapitiya (01:28:01): Yeah. No. The no. The original model was pure nonprofit where there was no cap because there was no concept of equity. Yeah. When they flipped, they capped everybody to a 100 x on the return. the original money Jason Calacanis (01:28:15): -- David Friedberg (01:28:15): But not anymore or still. But, no, Chamath Palihapitiya (01:28:17): the original money, which was, like, Elon's money Who else put in money? David Friedberg (01:28:23): Reed Hoffman. Chamath Palihapitiya (01:28:24): Yeah. All that money came in as a as pure nonprofit. So I don't know how it converted, but when they Jason Calacanis (01:28:29): -- Or did it convert? Did those people who funded or originally get any shares in this for profit? Chamath Palihapitiya (01:28:33): We could we could find out. Probably they did. I mean, it would make sense that they David Friedberg (01:28:36): find out. We'll cap it. Chamath Palihapitiya (01:28:37): We'll let Jason Calacanis (01:28:37): you map it. I mean, wait. If this is a tender offer from 1% -- -- 27,000,000,000? David Friedberg (01:28:41): You wouldn't buy shares at Jason Calacanis (01:28:42): 27,000,000,000. Chamath Palihapitiya (01:28:42): So, again, like, the the thing that I wanna impress upon you is, like, There is an enormous amount of work that they do that what their biggest gap to monetizing this will be finding unique content that they learn on that nobody else has access to. And this is why I I really think it's important to understand. If you have enough compute, these all of these unsupervised learning models, if you run them on the same training set, will converge to the same answer. So you're just getting there first. So in order to be really defensible, Jason Calacanis (01:29:16): you have to get there in a Chamath Palihapitiya (01:29:16): unique way. And so either you're gonna hand tune or you're gonna have inputs that are different. So I don't know I don't know the answer. That's why I Jason Calacanis (01:29:26): -- Chamath Palihapitiya (01:29:27): They they have to answer that question in their fundraising, and I'm that they did because these are smart investors. But that's the big idea that you have to overcome. And, again, you have to think, like, you think Google is sitting on their hands? No. Or Google David Sacks (01:29:39): is saying, like, why why Jason Calacanis (01:29:40): 29,000,000,000? David Sacks (01:29:41): Like, what fundamentals is that based on? Like, why not 5,000,000,000? Why not 3,000,000,000? I mean, like, Why not 10,000,000,000? Like, what makes Jason Calacanis (01:29:47): -- They double the last valuation. That's what it is. It's all this is all momentum. It said nothing to do with reality. Right? I mean, This would imply at a 30 the the public comps are the Google trades at, what, 25 or 30 times EBITDA. So this would imply a $1,000,000,000 in EBITDA. A $1,000,000,000 in EBITDA, $3,000,000 a day. They're losing 3,000,000 a day on compute of reportedly $3,000,000 a day in profit on what product? I don't know. To have a David Friedberg (01:30:16): I that's not the issue. I think, look. I mean, my point was if open up a set of tools that support all these applications and services to emerge on top of what they've built. and they're getting red share or getting payments out of that, it's gonna very quickly turn into a real Jason Calacanis (01:30:30): -- Here's the problem, Freightberg. This is why that can't happen. they don't have the rights to the data they built the training set on. And the second they commercialize it, the second anybody pays them, whoever they base this on -- It's a good conversation. -- into oblivion. I predict sued into oblivion. David Friedberg (01:30:46): Let's talk at let's let's actually let's talk about that in the next show because I think that's a like, the the way that AI works and we should probably bring someone like Sam on to talk about it. But the way that AI works on training data And now people are making claims that the training data is copyright. Therefore, model output is protect protects that copyright is, I think, worthy of a good conversation. Chamath Palihapitiya (01:31:06): What's interesting is, you know, the early -- -- say we'll type -- The early version of the of the Internet was very simple. It's like you had this file called robots.txt. and you would basically be open to a crawl or not. And that's what would allow Google to basically go and spider your pages. Jason Calacanis (01:31:19): Right. Chamath Palihapitiya (01:31:19): And so we have to replace this concept of that with this Jason Calacanis (01:31:23): ai.txt. Well, you could make a claim that Chamath Palihapitiya (01:31:27): this is no different than, you know, a spider crawling a webpage. except that in in the search case it was much cleaner which is we're just going to index your page and redirect people to you Here, it's we're actually gonna create a derivative work because of you in part. And I do think that that's gonna be a very interesting legal threshold that has to get figured Jason Calacanis (01:31:47): Well, here it is, Shamoff. You're you're you're nailing it exactly. It's a derivative work, and they did not have permission to use it. And it impedes upon the original authors, whether it's a photo, it's a song, it's a piece of code. It impedes upon their ability to do commerce in the world. You are interfering with their ability to monetize their content, and the percentage you're using is a 100%. So when you get to fair use, noncommercial use is very protected. Parities protected, education is protected, But when you dip into using the entirety of the work, which they're doing, and you impede upon the person's ability to do commerce and you confuse the public, Well, this is why -- -- test that they will fail, fail, fail. Chamath Palihapitiya (01:32:27): This is why I think that most people don't understand what AI is. They don't even understand the difference between training and inference. So, hopefully, there is some more understanding of this. But if you use the same dataset, you will eventually converge to the same outputs absent of hand tuning weights which has its own issues and absent any asymmetrically different data that you have that nobody else has? Absolutely. Jason Calacanis (01:32:53): Yes. So if you are Apple and you have the watch data or you're Google and you have the search data or you're a weather company, you have the weather data and your proprietary, of course. There's a very easy solution to this, Jamav. Number 1, citations. When the algorithm gives you an answer, it should say, what were the top percentage sources of this information? How did the AI -- No. Chamath Palihapitiya (01:33:13): But just use other people's -- Look. If you look inside of a transformer, the problem is, okay, that you're gonna have 1,000,000,000 of ranks, 1,000,000,000 of weights. Trillions. Jason Calacanis (01:33:22): Yes. Chamath Palihapitiya (01:33:22): And so how are you gonna decide how to basically draw a line under a threshold This was actually a useful input, and this was not. So, again, I I just think that it's hard. A very few small class of people I understand this. Like, the great person to actually bring in to talk about this would be Andre Carpe, if he not. And I think because Andre was there Jason Calacanis (01:33:41): -- Sure. -- Chamath Palihapitiya (01:33:42): and at Tesla, And he but he can say it in a very dispassionate way to explain this to people. I think we'd be -- Let's do it. We should ask him to come on. Yeah. Jason Calacanis (01:33:48): For sure. I mean -- I can ask him. I mean, this is brand this this the law, Saks you're an attorney, you understand fair use, copyright, all this stuff. The law correct me if I'm wrong here, Saks, does not anticipate this. David Sacks (01:34:01): Like, this highly specialized area. I don't wanna pretend like I understand the law in this area. You know, I'd wanna talk to a specialist. Jason Calacanis (01:34:08): Yeah. Okay. David Friedberg (01:34:08): And so anybody -- Let's have this conversation because I think yeah. Jason Calacanis (01:34:11): This is a great -- That's just -- David Friedberg (01:34:13): I think there's gonna work for us to talk about because -- Alright. Chamath Palihapitiya (01:34:15): This is probably why, by the way, they started as open source because it was like a slam dunk thing to make this a nonprofit and open source everything may be in part because of these issues, but if you just let the code run free, you probably don't have to even deal with these issues. Jason Calacanis (01:34:33): Right? Well, they they closed it. Remember, their claim, the claim was this is too dangerous. Their original claim was it's too dangerous for people to not see the code. Then Sam flipped on that, and he said it's too dangerous for people to see the code. And it started out as a nonprofit where the idea was the way to keep this safe is for everybody to see the code, but they didn't make any money. Chamath Palihapitiya (01:34:54): Whatever is. Jason Calacanis (01:34:54): -- private, and they flipped the decision. So keep that in mind as well. Chamath Palihapitiya (01:34:57): He's a he's a very, very, very clever business person. Jason Calacanis (01:35:00): He's savvy. Chamath Palihapitiya (01:35:02): And -- You know, Paul Graham when Paul Graham picked Sam to run YC, Paul Graham said, that this is the most impressive person I've met since Steve Jobs. Jason Calacanis (01:35:11): Yeah. Remember that? I'm on the pot. I I do remember that. Yeah. Chamath Palihapitiya (01:35:14): And he Jason Calacanis (01:35:14): said something similar about Gary Tan is now running YC starting this week. Sam Weltman, friend of the pod, come on all in anytime. Chamath Palihapitiya (01:35:20): And has played in our poker game several times. David Friedberg (01:35:22): Makes sense. Jason Calacanis (01:35:22): Yes. We we we had a tough situation there where you interfered in a hand, if you remember. Alright. Listen. This is Danny. What happened? There was a Sam and I were in a hand of poker. He raised. I had 2 pair, and I'm trying to figure out does he have a set, or is he bluffing me? I think he's got top pair. And you were like, oh, look at this, and you started commenting on the hand, Chamath Palihapitiya (01:35:42): Oh my god. I remember -- -- the call or not yet. And I'm like -- -- god. David Friedberg (01:35:45): I remember -- Yeah. Yeah. Yeah. Jason Calacanis (01:35:47): -- Formula Busch. Let's let's stop talking here because I'm trying to unplay him. I'm like, okay. Sam would get and I basically came to the conclusion. Sam would get delight great delight bluffing him offhand. He's a risk taker. He knows I'm conservative. He knows he's a risk taker. I'm gonna call here with my I had bottom 2. I'm like, does he have a set and there was also a straight on the board? I'm like, fuck it. I I I at best, I'm you know, even money here. And there was a lot in the pot. So I was just doing the pot odds. While I'm doing the pot odds, you were like, which is usually me. I'm usually the one being reprimanded for talking Chamath Palihapitiya (01:36:20): to her dad, David Sacks (01:36:21): but it was notable. Jason Calacanis (01:36:22): Alright. Listen. Love you, Basties. Chamath Palihapitiya (01:36:23): Why don't you tell people that there's no comments? Jason Calacanis (01:36:26): And just as a programming note, we turned off comments for a couple of weeks on the YouTube just to see how it psychologically affects me, and it's for Shamalff to just f with all you brig a dooners. We love you, besties. This has been in a great episode. -- 2 great and his Twitter is at Shamoff, and he doesn't read it. David Friedberg (01:36:45): everyone listening knows. Saks Saks and I voted against turning off comments just just as I -- I Jason Calacanis (01:36:50): voted in favor whenever I got Chamat's vote for the all in summit 23. So That's how I learned. This is -- Right. -- divorce trading now, but the podcast has never been better. -- frustrating. Besty spending time together on the slope, is the cure to all evils. We'll see you next time. Love you, bestie. Bye bye. Chamath Palihapitiya (01:37:05): Love you, guys. Bye bye. Jason Calacanis (01:37:08): your winter's ride. David Friedberg (01:37:11): Rainman, David. I'm going home. Jason Calacanis (01:37:15): And it says, open sources to the fans, and they've just gone crazy with it. what air winter's right. Chamath Palihapitiya (01:37:28): Besty's are bad. I don't understand. David Friedberg (01:37:30): That is my dog thinking, and I was driveway. We Chamath Palihapitiya (01:37:38): should all just get a room and have one big huge order because they're Jason Calacanis (01:37:41): all these useless. It's like Chamath Palihapitiya (01:37:42): this, like, sexual tension that they just need to release somehow. Jason Calacanis (01:37:46): What? You're the bee bee. What? Pure feet. Be your feet. Sweety what? We need to get mercies are back.