AI 搜索之战：谷歌对微软

Chamath Palihapitiya (00:00:00): I had this thing with my oldest son where I don't know if it's all kids but he's thirteen. He doesn't know how to answer the phone. Not to save his life. Hello? He picks up the phone. Hello? And so and so I said, listen, from now on, when you call me, I expect a certain way that you pick up the phone, and that's gonna be practice for you how you interact with anybody else. And vice versa as well. I call you, you have to pick up the phone. And if you don't, I'm hanging up right away. So yesterday, he calls me and and I'm like, Jamat speaking. You know, it's like hello, Chamath speaking. Right. Done. Hi. Hang on. He calls back. Hello. It's Mark speaking. Dad. Hug up again. We did this three more fucking times. And then finally, I said, when will you get it through your head? Can you please just answer, like, if I say hello, Jamal speaking. Hey, dad. it's your son. Or, hey, dad. It's -- And it's unbelievable, and he's like, well, none of my friends pick up the phone like this. And I'm like, oh, God. Like, don't they think they need to have verbal communication skills? It's it's unbelievable. And then when I call in, he pick up the phone. What? Not even hello. What is that? It's like a grunt. David Sacks (00:01:21): It's minimal effort. It's like the minimal -- Oh, god. Chamath Palihapitiya (00:01:23): -- David Sacks (00:01:23): minimum number of syllables. Chamath Palihapitiya (00:01:24): It's it's embarrassing. Are your kids like this, or is it just my kid? David Sacks (00:01:28): Actually, I don't think I've heard him pick up at the phone. I need to test that. Speaker 3 (00:01:34): The Leggett winner's Friedberg. Speaker 4 (00:01:37): Rainman David Sachs. We know him. And I said, we David Sacks (00:01:42): open source it Speaker 3 (00:01:43): to the fans and they just got a reasonable David Friedberg (00:01:45): Love you. David Sacks (00:01:50): Jay Cal was on Twitter calling me out for not denouncing the Chinese balloon is strong enough language. Although, I don't think he understood the language I was using. Did you understand what the word errant means? What did you think it meant? Jason Calacanis (00:02:01): I you know, I do understand the word errant. Speaker 4 (00:02:03): It's Jason Calacanis (00:02:04): temp yeah. It generally means shring, of course. Yeah. Traveling in search of adventure, at least according to Marian Webster. So I just thought maybe your being a little but I know you're a dove. So but I I was a little dovish thinking they were just off course. I think you think they were off course or they were doing it deliberately? You buy that it Chamath Palihapitiya (00:02:25): was off course? Genuflect. Go genuflect. Jake. How go go go go. David Sacks (00:02:29): So I knew Jake How would have to join in this nationwide panic over this balloon. Jason Calacanis (00:02:35): I have no panic over. David Friedberg (00:02:37): That's the word airlines means that Chamath Palihapitiya (00:02:39): it had a minolta camera done. to it. David Sacks (00:02:43): Jake, I got some really bad news for you. There were these things called spy satellites. Jason Calacanis (00:02:47): No. We never got tough. Chamath Palihapitiya (00:02:48): -- David Sacks (00:02:48): see everything. David Friedberg (00:02:50): wanna know. Jason Calacanis (00:02:50): The it's obvious people they've been sending these balloons over here for a while. I just thought you're framing as it was errant. As in it, like -- Well, we David Sacks (00:02:57): don't know. Jason Calacanis (00:02:58): Do you think it was at I'm sincerely asking, do you think it was Erin or was it -- Here's David Sacks (00:03:01): the thing. I it it's such a hair brained scheme to send a balloon flying over American territory that the Occam's razor explanation here is that they somehow lost control over it. and these things are not steerable. So like my guess is that it probably wasn't deliberate just because of how stupid a plan it would be. and how, like, obvious it would be. But it could be. I don't really know. What I do know is that the whole nation got in a lather and a tizzy and sort of hyperventilating about this balloon. And it just shows how reflexively hawkish the media is. You know, it's like, hey, can we just wrap up this war in Ukraine before we start another war with an even more formidable Chamath Palihapitiya (00:03:45): -- Jason Calacanis (00:03:45): The media -- -- superpower. Chamath Palihapitiya (00:03:46): The balloon the balloon got more in session than us blowing up Nord Stream. Jason Calacanis (00:03:50): Exactly. Okay. Well, hold on. David Friedberg (00:03:52): We're gonna jump into it. Jason Calacanis (00:03:53): No. What I would say about that is the media insight is the valid one. I was just responding to the errand, and I was curious if you actually thought it was and I don't think it's an accent. I don't think there David Sacks (00:04:01): are accents. I think it clearly was off course and problematic. So, you know, I don't know about the intentionality of it. I k. I think I think it very well could have been intentional, but I tend to think because it's such a stupid hair brain scheme. Like, I almost give them the benefit of the doubt. Not because they're not capable of spying. I'm sure Jason Calacanis (00:04:19): they're spying David Sacks (00:04:19): on us. Sure. Obviously, they're spying on us. Just like we're spying on them is what -- Yeah. Chamath Palihapitiya (00:04:23): -- David Sacks (00:04:23): we both do. But I seems like such a stupid way because you're gonna David Friedberg (00:04:27): get caught. Chamath Palihapitiya (00:04:28): -- Jason Calacanis (00:04:28): made for TV moment. You have to understand the nature of live television and why the media overreacted to it. it's ongoing. So because it it's not final, it's like a live event occurring, like when kids are trapped in a mine, those are the best stories for CNN because you can keep updating people and people keep turning the TV on to check on the status. So this one was just made for CNN because, obviously, we're gonna shoot the thing down. And, obviously, you can interpret into it it's an accident or not, and it just gives them something to talk about on a slow news week. But it is interesting. I think your point that is interesting is Is the Nord Stream story correct or not? Why is that not being covered? It's not being covered because there it's not an ongoing story. So that just shows you David Friedberg (00:05:17): No. David Sacks (00:05:17): I don't think that's right. I think it's not being covered because the mainstream media already took a side on this. Jason Calacanis (00:05:24): Oh, so you remember cynical. Yeah. David Sacks (00:05:25): Okay. Well, it's not it's not just cynical. So when when Nordstrom got blown up, the administration came racing out with the line that the Russians did it, that they this was self sabotage. And by the way, the media repeated this endlessly. this was the media line. And it never really made sense to anyone who's paying attention because first of all, this was an economically vital asset. to Russia. 2nd, it was their main source of leverage over Europe. Was there control over the gas supply? So the idea that they would shoot themselves in the foot that way just to somehow, what, show how crazy they are, it never really made sense anyone was paying attention. And the fact that the administration, the media so quickly raced to that conclusion suggested that it was maybe a cover story because If we had nothing to do with it, you would just be more neutral and say, yeah. We don't know what happened. But they had to, like, promote this line That one of the Russians did it, which just never made any sense. And now Cy Hersh has come out with this story. So it it laying out in great detail how we did it. It's not just saying we did it. it's laying out who did it and how and the steps and all that kind of stuff. And just so you guys understand who this guy is, he's this legendary Pula surprise winning journalists. He's, like, eighty six years old or something like that now. But he broke during Vietnam. He broke the story of the Milai massacre which the military denied until he proved it. He broke the story during the Iraq War of the Abu Grey prison abuses, which again the media the military denied until it was undeniable. Jason Calacanis (00:06:58): His bullets are winning is all you really need David Friedberg (00:07:00): to know. David Sacks (00:07:00): Here he is. So bullets are winning journalists. Basically, another covert military action. And look, we don't know for sure whether it's true or not, but it looks it looks pretty bad. Chamath Palihapitiya (00:07:10): Do you think that Europe knew? Do you think that the Europeans were told that the Americans were gonna go and blow this thing up? Jason Calacanis (00:07:16): If that's true. By the way, the the administration has said clearly this is a false story. David Friedberg (00:07:21): So just so we're clear. Chamath Palihapitiya (00:07:21): I think the -- Yeah. -- Jason Calacanis (00:07:22): the specific Chamath Palihapitiya (00:07:23): code was this is pure fiction. Jason Calacanis (00:07:25): The Ukraine would be the most like me. a person to David Sacks (00:07:28): do this. You you gotta look for means motive an opportunity. Jason Calacanis (00:07:30): They don't have the opportunity to go down David Sacks (00:07:32): there and David Friedberg (00:07:33): I don't David Sacks (00:07:34): think I don't think the Ukrainians have the capability to do an undersea mission like that. Jason Calacanis (00:07:39): Interesting. David Sacks (00:07:39): The Norwegians do, and the story maintained that we did it with them. The British do Story didn't say whether they were involved or not. So no. My guess is that if this was a covert US activity, it was kept to a very small group. which is why it'll be hard to prove more definitively than this. Jason Calacanis (00:07:58): The other side of the argument is this is such a provocation and the administration saying it's fiction. So what is your response to that? It acts like, would the US do something so provocative or would they have somebody else do it? And would Norway do something so provocative? It seems an extremely seems like an extremely offensive technique as opposed to just backing the Ukraine to defend itself against Russia's invasion. David Sacks (00:08:24): Here's the thing. Before the invasion, Biden and a press conference said that if the Russians invade Nord Stream would be no more. And they asked him, well, how can you make sure of that? That's a deal between Germany and Russia. We're not involved. They said we have ways. We have ways. Just trust me. It'll happen. Separately, Victoria Newland is our deputy secretary of state. said something very similar about how we would stop Nord Stream if the Russians invaded. And then after Nord Stream got blown up, Blincoln at a press conference said that this was a wonderful opportunity. I was extolling all the benefits of this. And then Victoria Newland had a congressional hearing, said that, I'm sure we're all very glad that it's a hunkymetal at the bottom of the sea, again, extolling all the benefits. And we've discussed the benefits on this program. If now, we've shifted the European dependence on Russian gas to a dependence on American gas. So the fact of the matter is the administration kinda telegraphed what they were gonna do. They had the capability to do it. and they had the motive to do it. So it's certainly a plausible story. You're right that we can't know for sure. It's a single source story. Jason Calacanis (00:09:28): You don't believe the initial source story. David Friedberg (00:09:31): It David Sacks (00:09:31): depends on the credibility of Sahersh. But as it stands right now, whose story do I think makes more sense? Probably Sy Hirsch's. Jason Calacanis (00:09:40): You believe Sy Hirsch over the spokesperson with the CIA who wrote. The claim is completely and utterly false. Just to be clear. David Sacks (00:09:46): Well, these these same people denied of gray -- Okay. Jason Calacanis (00:09:48): But to David Sacks (00:09:49): be -- -- tried and me lie. Jason Calacanis (00:09:50): They -- You believe that. Chamath Palihapitiya (00:09:51): -- David Sacks (00:09:51): they deny everything. Okay. Yeah. They deny that NATO expansion or anything to do with the, you know, breakout of this war. Jason Calacanis (00:09:58): Yeah. I mean, this is one of the situations where we can't possibly know. Yeah. David Sacks (00:10:02): You make a good point, Jay Kal, which is this, if true and look. I'm not saying I I don't know if it's Chamath Palihapitiya (00:10:08): -- Jason Calacanis (00:10:08): You're leaning towards believing it. David Sacks (00:10:10): I lean towards thinking it's more plausible than not. Jason Calacanis (00:10:12): Okay. David Sacks (00:10:13): because also, like, who else could have done it and who had who again who had the motive means and opportunity. But you make a great point, which is if we did it, it's an incredibly provocative act. It's basically perpetrating an act of war against a country that has thousands of nuclear weapons. Biden promises at the beginning of this war that he would keep us out of being directly involved. So this would directly contradict what he said at the beginning of this war. So I think it's a very scary situation here. Jason Calacanis (00:10:43): Yeah. I know. David Sacks (00:10:44): And if if US if US David Friedberg (00:10:46): didn't do it -- Yeah. David Sacks (00:10:47): if the US didn't do it, like, why don't we find the real killer? Because -- I Jason Calacanis (00:10:51): have the theory. Here's my theory. The CIA knew how to do it. Biden wants to do it. The Republicans wanna do it. David Friedberg (00:10:58): Obviously, the the people who Jason Calacanis (00:11:00): are the most pro stopping Nordstrom have been the Republicans. They've led this charge even more than the Democrats. So it's it's a bipartisan issue. Stop Nord Stream. Bipartisan issue hands down. I think the CIA probably knew how to do it. And just like we equipped the Ukraine to do it, we might have facilitated the Ukraine and a collaborator, UK, Norway, some freelancers. You know, we have those freelance former Navy SEALs that operate. Perhaps the CIA just said to the Ukraine, here's a, you know, block ops group. If you wanted to engage them, you could feel free to do so, which would then split the difference between what Sia is saying, what the CIA is saying, which is typically where the truth lies. is probably between what this investigative journalist of note has said and what the CIA is denying. The CIA probably has plausible deniability That's my prediction. David Friedberg (00:11:52): Well, if David Sacks (00:11:52): you could find a source for that story, Jay Kal, that lays out in the same level of detail that Hersh has laid out in terms of the meetings that occurred, what was approved, when, how they did it, the the, you know, when they did it, the explosives they use, the divers they used, it goes into a fair amount of detail. Jason Calacanis (00:12:11): Incredible detail. Yeah. I mean, down to what explosives. Right? David Sacks (00:12:17): But you're you're trying to put what you just said, which is basically you inventing a story on the same level as Busha's story? David Friedberg (00:12:23): Yeah. I think. David Sacks (00:12:23): I understand, but he actually has a lot of detail in his story. Chamath Palihapitiya (00:12:27): Yeah. He had he had umpteen sources. there is a lot of people that were willing to tell this story. Jason Calacanis (00:12:32): No. No. I don't think that's actually the case. I don't think he has umpteen sources. And they there's no on the record. David Sacks (00:12:38): There's one main source. One main source. Yeah. But who provided a ton of detail. I don't know exactly how much he was able to properate with other sources. I don't know about that. Jason Calacanis (00:12:46): The other thing I wonder, Saks, is he with this one source story, he he has a collaboration with the New Yorker. And anybody would if this was a really well sourced and you could back it up kinda story, they would love to have the ratings for this story. There's a blockbuster story. David Friedberg (00:13:04): Or Chamath Palihapitiya (00:13:04): as it happens a long time, which we learned was it through the Valerie Plan affair, which is that these major news publications will sometimes have a back channel back to the national security apparatus when they have something like this. And the message was you can't hit print on this. Jason Calacanis (00:13:19): Yeah. In which case -- -- possibility too? Chamath Palihapitiya (00:13:21): -- he goes and just himself publishes himself, which wasn't really even an option a few years ago. Jason Calacanis (00:13:26): No. Yeah. So, I mean, this is this is the Roshock test of Roshock test. You have the media. You got the CIA. Chamath Palihapitiya (00:13:32): It's fodder for a great movie. Speaker 7 (00:13:34): When I David Sacks (00:13:34): go back to Jay Kalids, I think you can lay some theories about, let's say, you know, the Poles did it or maybe Ukrainians with the British or some yes. You could lay out those theories, but The media wasn't willing to entertain any of those theories when this news broke. What did they do? They blamed the Russians. And that story made no sense, but they said it so definitively. Jason Calacanis (00:13:56): I'm looking for the source on that. I'm looking for Nick, if you could pull up the source of the administration blaming the Russians. I just wanna make sure we're accurate Speaker 4 (00:14:02): at that. Chamath Palihapitiya (00:14:03): -- David Sacks (00:14:03): at a press conference. Jason Calacanis (00:14:04): just wanna David Sacks (00:14:05): be curious to have Chamath Palihapitiya (00:14:05): -- -- David Sacks (00:14:05): sabotaged by the Russians. Now they didn't push it that hard. What was interesting is the Biden administration set up, but they didn't keep coming back to it. But the media really ran with it. And when people on both the left and the right like people like Jeffrey Saxx on the left and Tucker Cross on the right, basically started a question whether the US could have done it. They were accused of being conspiracy theorists and, you know, Putin stooges and all the rest of it. And now all of a sudden, here comes Seymour Hirsch with that pretty detailed story lending credence to that point of view. Yeah. It just may indicate we don't know everything that's going on with this war. And I think the longer this goes on, the more dangerous it is. Jason Calacanis (00:14:46): Friedberg, do you have any thoughts on geopolitical issues and who might have blown up Nord Stream? What are your sources saying, Freeburg? David Friedberg (00:14:54): What are your sources and science quarters saying? Speculation is best left of the future. I don't know about the whole speculating on what could have been done in the past by someone. Those are conspiracy theories and little things like that. They're not David Sacks (00:15:07): they're not actually conspiracy theories. David Friedberg (00:15:09): Dude, I'm not saying anything. David Sacks (00:15:10): Nord Stream was blown up. You understand that. Right? Like, there's one doubt that Chamath Palihapitiya (00:15:14): -- David Friedberg (00:15:14): I'm saying Jay Cal's Jay Cal's theory. David Sacks (00:15:16): Oh, yeah. Jay Cal's theory is just a story. Chamath Palihapitiya (00:15:18): -- David Friedberg (00:15:18): gotta bring data to the table. Jason Calacanis (00:15:20): Yeah. To their pure theory. Pure speculation. David Friedberg (00:15:22): You gotta bring data to the table to make it a Chamath Palihapitiya (00:15:24): -- David Sacks (00:15:24): By the way, speaking of which, Radix Sikorsky, who is a a Polish diplomat. I think he was, like, their foreign minister. When Nord Stream blew up, he tweeted a photo of it saying, thank you USA. Jason Calacanis (00:15:37): Oh. David Sacks (00:15:38): which was one of the reasons why people thought that, okay. Like, yeah, of course, the US did it. You know? Who has the capability to do it? who has the motive to do it, who said they were gonna do it? And who benefits? Jason Calacanis (00:15:50): Ukraine. David Sacks (00:15:50): We both know. Who benefits? Chamath Palihapitiya (00:15:52): Who was conducting NATO exercises in that region? Right. 3 months before the team blew up. David Sacks (00:15:58): Yeah. Exactly. And Jeffriesack pointed that out on I think it was a CNBC interview before they basically stopped him because he's not allowed to talk about this on, you know, network TV apparently. But He basically pointed out they were like US radar signatures in the area. Jason Calacanis (00:16:12): President Joe Biden declared that this is from Bloomberg, that a massive leak from the extreme gas pipeline system in the Baltic Sea was an intentional act and that the Russian statements about the incident shouldn't be trusted. It was a deliberate act of sabotage, and now the Russians are pumping out disinformation lies Biden told reporters out at the White House. So he didn't exactly say the Russians did it. He just said it's an act of Chamath Palihapitiya (00:16:30): -- David Sacks (00:16:30): The media the Russian. Jason Calacanis (00:16:31): Yeah. What's that? David Sacks (00:16:32): The media did. You could do one of these montages where it was, like, Russia sabotage. In fact, go to Matt -- But David Friedberg (00:16:39): he just speak with Jason Calacanis (00:16:39): Biden didn't say it was sabotage. He said it was an act of sabotage. Chamath Palihapitiya (00:16:42): If you actually look at what Biden said, everything he said is absolutely true if the US also didn't. Correct. David Sacks (00:16:50): Yeah. Every single sentence Chamath Palihapitiya (00:16:52): -- That's -- -- single sentence that Joe Biden said, is 100% true whether we did it or whether Russia did it? Jason Calacanis (00:16:58): It was a deliberate act of sabotage in parentheses. David Sacks (00:17:02): Think about it. If we did it, we know they didn't do it. And then we have to be, like, careful about suggesting they did it. Jason Calacanis (00:17:10): What do the Germans think? because this is the Germans pipeline. This so if we blew it up, that's also on a explain to me your thinking, on the chessboard of our relationship with Germany if we blew it up. Would they not also see that as a hostile act? David Friedberg (00:17:23): This is Chamath Palihapitiya (00:17:24): why I asked if Europe knew because I think you have to tell Germany that it's going to happen. And I think the quid pro quo with Germany is some amount of guaranteed supply that the US directs into Europe so that they know that their long term LNG supply is intact so that they become ambivalent. Right? There's a point of indifference where the Germans say, okay. We don't know when this thing is gonna get turned back on, and we don't know what the implications of it are. Here's what our demands are. meaning our energy supply, our energy needs are. And so as long as the United States can say, look worst case we have stuff in the you know, SPR that we can give you, there's probably a point of a difference where the Germans say, okay. We're just gonna turn around and not say anything. And I'm curious, did the Germans Jason Calacanis (00:18:09): say anything when this happened? David Sacks (00:18:10): No. Not that I love. Jason Calacanis (00:18:12): I'm looking for the I was literally just typed to Nick. What was the gentleman's position on this? Because -- That's interesting too. Chamath Palihapitiya (00:18:17): That's a tell. Jason Calacanis (00:18:17): Well, yeah, if you're breaking this down like a poker hand, who we're trying to figure out Chamath Palihapitiya (00:18:21): if you construct this hand, right, pre flop, it's like you know where both of these folks are. Right? David Sacks (00:18:27): Okay. There was a really interesting video that a guy named Matt Orfalia who puts together these really funny videos. He put put together these montages of media reactions to things. And what he shows is that, you know, you can have like 20 different media outlets. They all use the exact same words. And when he clips it together, you can see the reading from somebody's talking points, and it's not really clear who. And and, basically, if you look at his video here, on Who blew up Nord Stream Pipeline, you see that there was, like, a party line from the mainstream media on this stuff. Jason Calacanis (00:19:00): A Nord Stream too. Yeah. We we will bring it into it. Would take How would you how will you do that? I promise you we'll be able to do it. David Friedberg (00:19:11): So they're all up. Russia's North Street pipeline. I mean, we have to conclude. It was a sad deal. Jason Calacanis (00:19:16): What they said is most likely. Russia. Russian sabotage. on its own infrastructure. David Sacks (00:19:21): It's a common sense matter. I think it's Putin's way of sending a message. Chamath Palihapitiya (00:19:24): What Putin is saying to us by blowing up his pipeline is, look, I can blow up Jason Calacanis (00:19:28): a line. Everyone knows that Putin did this himself -- Who are these tucking heads? Chamath Palihapitiya (00:19:32): -- David Sacks (00:19:32): smoking guns without the correct proof. Yeah. I think logic and common sense will tell you that without the evidence. David Friedberg (00:19:38): Russia was behind the incident. We can say it for sure. Chamath Palihapitiya (00:19:41): Who sabotaged the Nord Stream 2 pipeline? David Friedberg (00:19:44): Right. I Jason Calacanis (00:19:44): had enough. this nonsense. David Sacks (00:19:46): Come on. That's hysterical. Jason Calacanis (00:19:47): You know, it's these talking heads who have no firsthand experience, and they're more than willing to comment on David Sacks (00:19:51): this stuff. Chamath Palihapitiya (00:19:52): It's fantastic. It's fantastic. It's a pleasure. David Sacks (00:19:54): All these videos are like where, like, he has one on the 100 buying laptop as well where again he's got like 20 different talking heads and and media outlets all portraying it in exactly the same language. And it it just makes me realize that there's a narrative around Jason Calacanis (00:20:10): things. The Sunday morning shows you hear the same narrative from each side. How does that actually get coordinated? Each side builds those bullet points, emails there, what do they call them, surrogates, they email all the surrogates and say, just keep saying these things over and over again to codify. Chamath Palihapitiya (00:20:26): Yeah. It's a WhatsApp group. Jason Calacanis (00:20:28): It's a WhatsApp group when they're just, like, Say this over and over again. How does it work, Saxx? David Sacks (00:20:32): I think it's partly talking points, memos that go out to chat groups. I think it's also just people looking on Twitter. And then there's, like, certain key nodes that they follow. And they know, okay. This is the party line because such and such key person is saying it. and they take their cues. Jason Calacanis (00:20:47): Is that Momenic Momenic effect that you guys always talk about? People -- Momenic. Momenic. Yeah. The Momenic -- Yeah. David Sacks (00:20:54): The the thing to understand that all of the prestige outlets repeat the same party line and have the same perspective. Jason Calacanis (00:21:00): Yeah. You gotta you gotta do your own search for information. David Friedberg (00:21:03): This is David Sacks (00:21:03): the beauty of sub stack This is why substack is so important is it actually gives you Jason Calacanis (00:21:07): this alternative. Yeah. David Sacks (00:21:08): It's more disruptive. -- alternative. Because, like, you've got 10 different Mainstream media networks or newspapers or magazines, but they all have exactly the same talking points except, you know, maybe Fox News is kind of the one exception. Although even Fox, on the whole Nord Stream thing, you saw that the Fox can be pretty militaristic and they had the same generals basically blaming the Russians for this on Fox. Jason Calacanis (00:21:29): Yeah. Germany's position is just, hey, everybody, this is sabotage. So that's it. But not who's in this sabotage? I think David Sacks (00:21:37): you you asked a really a question there about the German interest in this. Right now, the German economic interest and the German foreign policy interests are not aligned. What's clearly best for the German economy is to have cheap natural gas powering its industries even if it comes from Russian pipelines. and they no longer have that anymore. In fact, they may never have that again. So they're gonna pay a very high price economically, maybe forever, Remember, there there are whole economies based on industry. They're very industrial power. So if this war drags on for a long time, I think Schultz might be in some political trouble. precisely because he's gone along with the Americans on this. David Friedberg (00:22:18): And David Sacks (00:22:18): there is there is a growing political opposition to this war inside of Germany. Jason Calacanis (00:22:22): War fatigue is a real thing, and this thing's gotta wrap up at some point. Any final thoughts, Friedberg? I don't you didn't get too involved in that conversation. But what is any any game theory from you? No. Okay. There you have it, folks. Sultan of Science checking in. Chamath Palihapitiya (00:22:41): What's the David Sacks (00:22:41): problem? You don't wanna criticize the establishment. David Friedberg (00:22:44): What do you mean, Saks? David Sacks (00:22:45): It's a, like, a very personal attack You predicted Chamath Palihapitiya (00:22:49): -- Speaker 8 (00:22:49): Why don't you have my position on this? David Friedberg (00:22:51): Is it because Chamath Palihapitiya (00:22:52): -- Jason Calacanis (00:22:52): I'm trying David Sacks (00:22:52): to understand because -- I David Friedberg (00:22:53): don't think I don't think anyone has I I'm not I'm not pro establishment. I think you know I think I'm I'm just analytical around the fact that I think there's a strong orientation towards conflict, and I think there still is. I don't think that there's much of an incentive or a motivation to back down because this conflict creates a significant amount of debt owed back to the US. It creates a potential future asset stream. creates a and a realignment of power. Everyone's looking externally as internal, you know, economic Conflict and wealth disparity issues arise, and economic growth is challenged. Inflation is soaring. It's a great place to you know, address one's energy. So I think all of this stuff is detailed analytical shenanigans around who's saying what or who's doing what. I think the underlying thesis and the underlying river that's flowing is one that's, like, looking for external conflict. I think the same is true with the US and China. Jason Calacanis (00:23:48): And I You're talking about the military industrial complex. It's gonna benefit massive limits. The longer this drags out, the more the conflict in Taiwan heats up, the more we're gonna invest in our military. David Friedberg (00:24:00): You know, we often talk about these things as if they're, like, top down, like, master plan driven. And as we all know, like, they're more Ouija board driven. It's a bunch of guys. They got their hand on the Ouija board. and they're all just had a little too much caffeine. You know? And in this case, I think it's just more about, like, everyone's a little anxious. The anxiety is leading to a desire for more conflict. We're not happy at home. If you're a happy at home, you're not looking externally for conflict. That's true in nearly every developed nation on earth today. That's it. I don't know. Pretty similar. Jason Calacanis (00:24:33): I like your position. I think David Sacks (00:24:34): it's a great take. I think it's a great Jason Calacanis (00:24:36): take, actually. David Sacks (00:24:37): Yeah. I think there are a lot of interest who benefit from war, and I think the foreign policy establishment is funded by those interests. And that's kinda wired for war, at least in terms of the reflex. Right? Even something as relatively harmless as a balloon. Chamath Palihapitiya (00:24:52): I I saw David Sacks (00:24:53): That becomes like a casu spell eye. It's like people are ready to go to war against China over that. David Friedberg (00:24:58): I saw a couple military leaders give a talk a few months ago. It's in a private thing. So it wasn't on public record with the establishment? No. Yeah. I was at the establishment gathering. What are the establishment Oh, this Jason Calacanis (00:25:10): is the other minority? Did you jam you twice going in because that's the situation. You do one gen you reflect on each knee that may give you the bag of capitals David Friedberg (00:25:17): with the Illuminati like genocide front. Yeah. What was striking to me in this particular thing where these guys were being interviewed on stage at, like, a dinner thing. And they were so oriented around their next steps in escalation, and I think it speaks to the point, Zach. Like, none of them were thinking about, like, where are we at today? How do we deescalate? What is this gonna get? There was no conversation at all from anyone. about resolution or de escalation. With every single one of them, it was all about, like, my orientation for getting bigger going deeper, going harder, going stronger, making this thing bigger. And I think that was really scary to me because I didn't I didn't hear anyone having a conversation around, like, how do we Should we even consider whether or not we shouldn't get bigger? Everyone was thinking, assumptively, it was gonna get bigger. Jason Calacanis (00:26:08): I like the Ouija board, Chamath Palihapitiya (00:26:10): you have to follow the financial incentives. When the last time we looked at this, right, Leon Peneta and all these other guys who are screaming for war, They were getting paid by the military industrial complex. I remember when Lloyd Austin was nominated as defense secretary, he had some conflict issues because he was just on the board of Northrop Grumman or one of these big military industrial companies. And so, of course, these generals have to push for war because as long as they're garding for war, they're guaranteed to have, for them, David Friedberg (00:26:39): a very lucrative Chamath Palihapitiya (00:26:41): job once they leave the military. Jason Calacanis (00:26:42): The Ouija board, though, Saxon will throw to you, maybe you can keep this metaphor going. The media's got their hands on it. They want ratings. You have the energy industrial complex in this German conflict who seeks to benefit massively if people invest in renewables, or you find other, you know, oil, you know, off Norway. Norway's oil is one of the largest reserves that's untapped. So you have this Ouija board, media, energy, and the military complex, all moving it at once. Maybe you can speak to that analogy. David Friedberg (00:27:10): Everyone wants to move it to the side of the Ouija board that says escalate. There are very few people that are that have the energy to move it to the other side that says, deescalate. it's not an affordable task. Chamath Palihapitiya (00:27:19): -- Jason Calacanis (00:27:19): escalation means less energy, more or less investment. So, yeah, were you gonna go escalate? David Sacks (00:27:24): You know who warned us about the military industrial complex? Jason Calacanis (00:27:26): Yes. David Sacks (00:27:27): Dwighty is an hour. So for your mile by committing during world war 2, wins the war, Patriot war hero, top general, becomes president or Republican president, and is his departing address warns us that, yes, we needed a defense industry, but they become a vested interest in favor of foreign interventions of war. And there's the Chamath Palihapitiya (00:27:47): -- -- 61. David Friedberg (00:27:49): He did this. David Sacks (00:27:49): Where's the where's the interest on the other side of it? I can tell you this. the American people don't wanna be in a war with Russia. I don't even think most of the American people wanted to send a 100,000,000,000 over there. They wanna send a 100,000,000,000 to their cities to fix crime and all the other problems. Jason Calacanis (00:28:05): Yeah. Homelessness, everything. Yeah. If you've never seen that farewell address from 1961, it is well worth watching. You can find it on YouTube just search for military industrial complex, Eisenhower. He and this is a person who was part of the military industrial complex. saying watch out for this. It was a very prescient David Sacks (00:28:22): warning. -- spoke. Jason Calacanis (00:28:23): Yes. He was in the machine. Chamath Palihapitiya (00:28:24): He helped build the machine. Jason Calacanis (00:28:26): Welcome to the all in podcast with us again, David the Dev Sacks. Chamath Palihapitiya, and the Sultan of Science, who is on his podcast, or my god, so many podcasts are doing. The Sultan of Science is in Hot demand. What are all these podcasts you're doing, Friedberg? Well, he signs podcast pulling you in. David Friedberg (00:28:42): I did a podcast with Brian Keating last week who was really kind enough to reach out. He's had some awesome guests. He's a cosmologist at UCSD professor down there. And we were supposed to record that day and then we canceled, I think, last minute. Right? Jason Calacanis (00:28:57): Yeah. Yeah. David Friedberg (00:28:58): So I was only supposed to be on with him for an hour, and I'm like, oh, well, my next thing just got freed up. So ended up doing, like, 3 hours. That was I was so I was, like, exhausted that day, so I look really hungover on the video. I and probably Chamath Palihapitiya (00:29:09): -- -- Jason Calacanis (00:29:09): par for the course. David Friedberg (00:29:10): Some a lot. Yeah. Jason Calacanis (00:29:11): But no Lex Friedman for you. So Chomont and I have done Friedberg, Lex Friedman, but you have not. Has he invited you yet? Lex? Has Lex invited you? No. David Friedberg (00:29:19): No. He's not. Where's David Sacks (00:29:19): our invitation? Speaker 4 (00:29:21): I don't know what's going Jason Calacanis (00:29:22): on here. Collecto 4 Lex. What are you doing? Alright. No David Sacks (00:29:25): no Davos and no Lex Streammoon. Jason Calacanis (00:29:27): Well, what's going on? You remember David Sacks (00:29:29): anti establishment. What's going on? David Friedberg (00:29:31): No. I'm too anti establishment sucks. That's, you know, you must try to surprise me. Speaker 8 (00:29:35): Nobody nobody's inviting this quartet David Sacks (00:29:38): to anything. Speaker 8 (00:29:40): from full stop. We're not doing it all Jason Calacanis (00:29:42): in lie from Davos. It's not happening, folks. Sorry. David Friedberg (00:29:45): It is not that Chamath Palihapitiya (00:29:45): he I agree. David Friedberg (00:29:47): I'm with Doctor Marks. David Sacks (00:29:48): I don't wanna be part of any club that would help you as a member. Absolutely. And they also David Friedberg (00:29:52): don't watch it there anyway. So -- Yeah. Speaker 8 (00:29:53): I'm over. -- works out for everybody. David Sacks (00:29:55): It it does fill me with, like, a rage where I actually might agree to doing the all in summit again. David Friedberg (00:30:02): Hey. Hi. By the way, proposal coming your way this weekend. Chamath Palihapitiya (00:30:05): If you wanna really, really, really from your nose of the establishment -- Yes. Let's do it. -- set it during the exact same dates and times. as an establishment conference. Jason Calacanis (00:30:15): Oh, the Altadopoulos -- And Chamath Palihapitiya (00:30:16): then invite all the best guests so that they are they come to ours. Just a suggestion to Jason Calacanis (00:30:20): choose AltED typical of it now, I guess. -- of their David Friedberg (00:30:23): new establishment conference, you could call it the anti establishment Chamath Palihapitiya (00:30:27): -- Jason Calacanis (00:30:27): Oh, that's a tagline. Let's come up with a tagline that just tweaks everybody We should create a David Sacks (00:30:32): list. We should create the anti list. You know, they have their, like, establishment list. We should have the anti list. David Friedberg (00:30:37): That's a good point. I like Jason Calacanis (00:30:39): the anti establishment. Start with them. Chamath Palihapitiya (00:30:41): I have a great Vanity Fair establishment thing story. Oh, good. I snuck on that list. They put me on that list a decade ago. David Friedberg (00:30:50): Let's pull it. Let me find Chamath Palihapitiya (00:30:51): a link. Go on. And the most incredible thing about it is that when you go to the event, which is kind of a cool event, we all had photos taken by Annie Levovitz. Oh. And I have -- Nice. -- a montage of some of the people that took photos that day. That's pretty cool. Me, Aaron Levy, Priscilla Chan, Bezos, a bunch of people. But -- I look like I told Jason Calacanis (00:31:14): you about the music. Just before you had when just when you had the dad bod and knows fashion sense? Yeah. It was like, Yeah. David Friedberg (00:31:20): Oh, look. You look great. Here it is. I just think about it. It's what he thinks. Yeah. Jason Calacanis (00:31:24): Basically, I David Friedberg (00:31:25): had no stylist. Was it really dark. God, I was Speaker 8 (00:31:27): very shitty. David Friedberg (00:31:28): It was like Chamath Palihapitiya (00:31:28): -- David Friedberg (00:31:28): Portland glasses. like a year Chamath Palihapitiya (00:31:30): or 2 post Facebook. It was not a good look for me. Jason Calacanis (00:31:32): Not Yeah. Chamath Palihapitiya (00:31:33): But that's not yeah. Yeah. Yeah. But that's Jason Calacanis (00:31:34): not that I'll show you the picture. Chamath Palihapitiya (00:31:35): -- David Friedberg (00:31:36): Tom Ford. those are your 2, 4 face. It's a well, he's doing a jeans Jason Calacanis (00:31:40): blazer thing, which is like a really tired look for a David Friedberg (00:31:43): Silicon Valley square. -- pretty skinny jeans, though. It's like a little Chamath Palihapitiya (00:31:45): -- -- David Sacks (00:31:46): pretty short looking. David Friedberg (00:31:47): That was it. That Chamath Palihapitiya (00:31:48): was in 2000 and 2000 bed. Not bad. That's not so bad. Jason Calacanis (00:31:52): Just don't pull up the Chamath pictures when he's wearing, like Chamath Palihapitiya (00:31:55): -- Oh my god. -- Jason Calacanis (00:31:55): you know, his Macy's shirt. If you do the Google search, you put the images before Chamath Palihapitiya (00:32:00): 2011. Jason Calacanis (00:32:01): You will find Chamath photos. David Friedberg (00:32:03): Dude, at Facebook, we were at a Chamath Palihapitiya (00:32:04): -- I wore the same thing every day for 4 years, 5 years is brutal. Jason Calacanis (00:32:11): Oh my god. What is Chamath Palihapitiya (00:32:12): -- David Friedberg (00:32:13): That's awesome, Tom. We're gonna Chamath Palihapitiya (00:32:14): break this down. Yeah. Jason Calacanis (00:32:16): See, this is when the sweater game was not tight. This is, like, sweater 1.0 game. And this Chamath Palihapitiya (00:32:20): is I didn't know what I was doing back then. Stop putting these pictures off, please. Jason Calacanis (00:32:23): Look. Oh, and he's also got the watch subtly peeking out. This is back when he was like, oh, I got a Rolex. Chamath Palihapitiya (00:32:28): Oh, that's a potential. But, anyways, yeah, Kevin. What This Speaker 8 (00:32:32): is about the watches were only 5 figures. David Sacks (00:32:34): Out of 0. I don't Jason Calacanis (00:32:35): know if that watch got to 64242, but, yeah, David Friedberg (00:32:38): same story. Same same, Jake. Chamath Palihapitiya (00:32:40): Out. Same same. Jason Calacanis (00:32:40): Same same same. Alright. Well, listen. Alright. So I got an Apple watch, and I'm gonna oh, jeez. David Friedberg (00:32:46): the dad bod. Chamath Palihapitiya (00:32:47): There's the dad bod. David Friedberg (00:32:47): Yeah. Oh, Speaker 8 (00:32:48): he's gonna there's the dad vibes. Chamath Palihapitiya (00:32:50): Wow. That must have been from -- Mayfield? 13, 14 years ago. Jason Calacanis (00:32:56): Wow. God, you had no style. Chamath Palihapitiya (00:32:58): I really didn't. It was rough. I really didn't. Rough. Jason Calacanis (00:33:01): I mean, don't pull up pictures of me. I was Chamath Palihapitiya (00:33:03): Yeah. Yeah. Jason Calacanis (00:33:04): Yeah. Pictures of me eating egg sandwiches all over the Internet. Oh. Yeah. Chubby Jay Cow. Oh, man. Look at that face. Chamath Palihapitiya (00:33:09): There he Jason Calacanis (00:33:10): is. Boy, that's plus £20. Boy. Let's keep this gone. Search worse. Microsoft versus Google. Okay. It's been a rough couple of days for Google. We've all seen it. Google and Microsoft both did live demos of their new generative AI yadayadayada. You guys all know about Chamath Preeti. But now Bing is integrating it into their search engine, getting there before Google, And Microsoft CEO, Satya Nadella. He is going ham. He looks great. He's fit. He's wearing a tight t shirt. and he is saying, he's gonna make Google dance. Dance, Google dance. He is getting up in their business. And listen. He is in a distant second place, so it makes sense. On the other hand, Google's AI demo was frankly a bit of a disaster, poorly received stock. They dropped 12% since this event. And their presentation did not include the chatbot barred because in search, because it wasn't working. It seems like there was an error in it when they said, what new discoveries from the James Webb Space Telescope? Can I tell my nine year old and Bart answered that It took the first pictures of a planet outside Earth solar system, which is false, which, of course, we all know about Chat GBD. It's only right half the time, and it's a little woke on the margins. So, anyway, there was a screenshot circulating today, which is probably false. But It says the following. Me and a bunch of coworkers were just laid off from Google for our AI demo going wrong. It was a team of a hundred 68 people who prepared the slides for the demo. All of us are out of jobs. can't imagine that's real. But if it was, that would be a hardcore moment for Google to fire a bunch of people for screwing it up. Listen, you worked in the belly of the beast for your bird. What are your thoughts on being poking the tiger and telling Google dance you know, Sundar Dance. David Friedberg (00:35:00): You know, what's interesting is Google's had, like, an incredible AI competency, particularly since they bought DeepMind, and it's been predominantly oriented towards kind of, you know, internal problems. You know, they're they demonstrated last year that their AI improved data center energy efficiency by 40%. They've used it for add optimization, add copy optimization, the YouTube follow a video algorithm. So what video is suggested to you is your next video to watch, which massively increased YouTube hours watched per user, which massively increased YouTube revenue. You know, what's the right time and place to insert videos in YouTube or insert ads in YouTube videos. So, you know, auto fill in Gmail and docs. So so much of this competency has been oriented specifically to avoid this primary disruption in search. Obviously, now things have come to a bit of a point because you know, this alternative for search has been revealed in Chat GPT. And you guys can kinda think about search and, you know, we've used this term in the past, Larry and Sergey, the textbook that they read, you know, one of the original textbooks that's used in Internet search engine technology is called Information or Crevo. information retrieval. So information retrieval is this idea that you you know, how do you pull data from a static dataset and it involves scanning that dataset or crawling it, and then creating an index against it, and then a ranking model for how do you pull stuff out of the index to present the results from the data that's available based on what it is you're querying for, you know, and doing that all in a tenth of a second. So, you know, if you think about the information retrieval problem, you type in the data or some rough estimation of the data you wanna pull up, and then a list is presented to you. And over time, Google realized, hey. We could show that data in smarter, quicker ways. Like, if we can identify that you're looking for a very specific answer, we can reveal that answer in the one box, which is the thing that sits above the search results, like if you said, what time is it, you know, when does this movie show at this theater so they can pull out the structured data and give you a very specific answer rather than a list from the the the database. David Friedberg (00:37:11): And then over time, there were other kind of modalities for displaying data that it turns out were even better than the list, like maps, or shopping where you can kind of see a matrix of results or YouTube where you can see a, you know, longer form version of content. And so these different kind of, you know, information retrieval, you know, media were presented to you, and it really kind of changed the game and created much better user satisfaction in terms of getting what they were looking for. The the the challenge with with this new modality is it's not really fully encompassing So if you can kinda think about the human computer interaction problem, you wanna see flight times and airlines and the price of flights in a matrix. You don't necessarily want a a a text stream written to you to give you the, you know, the the answer that you're looking for, or you wanna see a visual display of shopping results. But or you do wanna see a bunch of different people's commentary because you're looking for different points of view on a topic, rather than just get an answer. But there are certainly a bunch of answer solutions for which Chamath DPT type, you know, natural language responsiveness becomes a fantastic and better mode to present answers to you than the matrix or the list or the ranking and so on. Now the one thing that I think is worth noting, I did a back of the envelope analysis on the cost of doing this compared to chat GPT. So So Google makes about 3 bucks per click. You can back into what their revenue per search is in bunch of different ways. One way is three bucks per click, about a Chamath Palihapitiya (00:38:46): 3% David Friedberg (00:38:46): click through rate on ads, Some people estimate this is about right, about 5¢ to 10¢ revenue per search done on Google or anywhere from 1¢ to 10¢, what's that? Jason Calacanis (00:38:55): Even if they don't, Chamath Palihapitiya (00:38:56): click the ads because 1 out Jason Calacanis (00:38:57): of a hundred people click an ad, and that's where the money comes from. David Friedberg (00:38:59): So let's let's just call it 5¢. Right? And you can assume a roughly 50% margin. on that search, which means a 50 percent COGS or cost of goods or a cost to run that search and present those ads. So, you know, right now Google search costs them about, you know, call it 2 and a half cents per search to present the results. A recent estimate on running the GPT 3 model for chat GPT is that each result takes about 30¢ of compute. So it's about an order of magnitude higher cost to run that search result than it is to to do it through a traditional search query. Today. Today. Today. That's right. And so so that's the point. Like, it has to come down by about an order of magnitude Now this is a this then becomes a very deep technical discussion that I'm certainly not the expert, but there are a lot of great experts that and there's great blogs and sub stacks on this. on what's it gonna take to get there to get a 10 x reduction in cost on on running these models. And there's a a lot related to kind of optimization on how you run them on a compute platform the the type of compute hardware that's being used all the way down to the chips that are being used. So there's still quite a lot of work to go before this becomes truly economically competitive with Google. And that really matters. Because if you get it to the scale of Google, you're talking about spending 8 to Chamath Palihapitiya (00:40:23): $20,000,000,000 David Friedberg (00:40:24): a quarter just to run search results and display them. And so for Chamath, GPT type solutions on Bing or elsewhere to scale and to use that as the modality, you're talking about something that today would cost $80,000,000,000 a quarter to run from a compute perspective. If you were to do this across all search queries, So it's certainly gonna be a total game changer for a subset of search queries, but to make it economically work, for for these businesses, whether it's Bing or Google or others, there's a lot of work still to be done. Jason Calacanis (00:40:54): The great part about this Chamath is that Bing gave Ten Billy to our friend Sam and Chad Chippet to invest in Azure, which now has the infrastructure and we'll be providing the Chat GPT infrastructure to startups or corporations, big companies, and small alike. So that $10,000,000,000 should do enough to grind it down between software optimization, data optimization, chip optimization, and cloud optimization. Yes. You would think so or no? Chamath Palihapitiya (00:41:23): The ability to run this at scale is gonna happen because we're getting better and better at creating silicon that specializes in doing things in a massively parallelized way. And the cost of energy at the same time is getting cheaper and cheaper along with it. When you multiply these two things together, the effect of it is that you'll be able to run these models The same output today will cost 1 110th as long as you ride the energy and compute curve for the next few years. So that's just gonna naturally happen. I have 2 interesting takeaways And one is maybe a little bit of a sidebar. So the the sidebar is if you guys were sitting on top of something that you thought was as foundational as Google search back in 1999, would you have sold 49 percent of it for $10,000,000,000? Hardo. I think the answer is no. I think the answer is no. Jason Calacanis (00:42:15): Not in an environment where you have unlimited ability to raise capital. Chamath Palihapitiya (00:42:19): This is something that we've said before, which is that Chamath GPT is an incredibly important innovation But it's an element of a platform who will get quickly commoditized because everybody will compete over time. And so I think what Microsoft is doing is the natural thing for somebody on the outside looking in at an entity that has 93% share of a very valuable category, which is how can I scorch the earth? And so Microsoft effectively for 10,000,000,000, but almost 50% of a tool And now we'll make that tool as pervasive as possible so that consumer expectations are such that Google is forced To decay the quality of their business model in order to compete so that as Friedberg said, you have to invest in all kinds of compute resources that today are still somewhat expensive And that will flow into the P and L. And what you will see is that the business quality degrades. And this is why when Google did the demo of Bard, the first thing that happened was a stock went off 500 basis points. We they lopped off a $100,000,000,000 of the market cap. mostly in reaction to, oh my god. This is not good for the long term business. Jason Calacanis (00:43:27): Explain why it's not good for the long term business on a mechanical basis. When you get an answer, you don't have to click the links? Chamath Palihapitiya (00:43:32): No. right now, if you look at Google's business, they have the best business model ever invented on earth ever for profit company. It just rains money. This is a business that this year will do almost a $100,000,000,000 of free cash flow. It's a business that has to find ways and we kind of joke, but they have to find ways to spend money. Otherwise, they'd be showing probably 50 or 60 percent EBITDA margins and people would wonder, hey, wait a minute. You can't let something like this go unattended. So they try to do a lot more things to make that core treasure look not as incredible as it is. They have a 120,000,000,000 of cash. This is a business that's just an absolute juggernaut and Jason Calacanis (00:44:18): They have ten times as many employees as they need to run the core business. That that says enough. Chamath Palihapitiya (00:44:22): I don't know what that is, but my point is that it's an incredible business. So that business will get worse if Microsoft takes a few hundred basis points of share If Meta takes a few hundred basis points of share, if Tencent does, if a few startups do, Quora by the way launched something called which I was experimenting and playing around with last weekend. If you add it all up, what Satya said is true, which is even if all we do collectively as an industry, is take 500 or 600 basis points of share away from Google, it doesn't create that much incremental cost for us but it does create enormous headwinds and pressure for Google with respect to how they are valued and how they will have to get revalued. And that's what happens. So the last thing I'll say is the question that I've been thinking about is what does Sundar do? Right? So what's the countermeasure? Yes. Jason Calacanis (00:45:12): This is what I was gonna get David Friedberg (00:45:14): to him. Chamath Palihapitiya (00:45:14): I think the countermeasure here if I was him is to go to the board and say, guys, we're gonna double pack. Right. So TAC is the traffic acquisition cost that Google pays their publishers. It is effectively their way of guaranteeing an exclusivity on search traffic. So for example, if you guys have an iPhone, it's Google search. That's the default search in the iPhone. Google pays Apple This year this renegotiation for that deal could mean that Apple gets paid $25,000,000,000 for giving away that right to Google. So if these Google does all these kinds of deals. Last year, they spent, I think, 45,000,000,000 or so, so about 21%. When Jason Calacanis (00:45:53): you think about that, Chamath, Google basically paid Apple, which was working on sec search technology. They were working on a search solution. They paid them to stay out David Friedberg (00:46:01): there, and they're paying everybody. Chamath Palihapitiya (00:46:02): So I think the question for Google is the following. If you think you're going to lose share and let's say you go to 75% share, Would you rather go there and actually still maintain your core strangle hold on search? Or do you actually want 75% share where now all of these other competitors have been seeded. Well, you can decay business model quality and still remain exclusive if you just double the tack. And what you do is you put all these other guys on their heels because as we talked about if you're paying publishers two times more than what anybody else is paying them, you'll be able to get published and say, hey. You know what? Don't let those AI agents crawl your website because I'm paying you all this money. Remember Right? So do not crawl in robots.txtequivalent for these AI agents. And I think that that'll put Microsoft and all these other folks on their heels And then as as you have to figure out all this derivative work stuff, all these lawsuits, Google will look pristine because they can say, I'm paying these guys because I acknowledge that this is a core part of the service. So that's the game theory I think that has to get figured out. But if I was Sundar -- David Friedberg (00:47:09): I love the second part. Jason Calacanis (00:47:11): I love the second part. Because hold on. Let me get Saximo. Yeah. I love the second part, Jamath, because in this clip I'm about to show Milay Patel from The Verge did an awesome interview with Satia, and he basically would not answer this question, at least to my satisfaction, which is Hey. What do the publishers get out of this? You've ingested our information. How do we get paid? Watch this clip. It's very telling. Speaker 7 (00:47:36): The answer or even in the session. Speaker 9 (00:47:38): But if I ask the new Bing, what are the 10 best gaming TVs? And it just makes me a list. Why should I, the user, then, and click on the the link to the verge which has another list of the 10 best gaming TVs? Speaker 7 (00:47:50): Well, I mean, that's a great question. But even there, you will sort of say, hey. Where did these things come on. Mhmm. And would you wanna go dig in? Like, that way even search today has that. Like, we have answers. There may not be as high quality answers. they just start getting better. So I don't think of this as a complete departure from what is expected of a search engine today, which is supposed to really respond to your query while giving them the links that they can then click on, like ads, and search works that way. Jason Calacanis (00:48:18): in my mind is a terrible answer. He needs to address how they get paid. He punted the answer and just said, hey. Listen. Search works his way. Sacks, will the rights to the data will will Google just state a cora? Hey. We'll give you a $1,000,000,000 a year for this dataset if you don't give it to anybody else. They should. Maybe. Saks the strategist. Let me hear your strategy here. You're now CEO of Google. What do you do? David Sacks (00:48:39): I think there's maybe even a bigger problem before that, which is I think the whole monetization model might change. So the reason why Google monetizes so well is it's perceived as having the best search. And then it gives you a list of links, and a bunch of those links are paid, and then people click on them. Now I think when you search AI, you're looking for a very different kind of answer. You're not looking for a list of 10 or 20 links. You're just looking for the answer. And so where is the opportunity to advertise against that? I mean, maybe you can charge, like, an affiliate commission if the answer contains a link in it or something like that. But then you have to ask that question, well, does that distort, like, best answer? Like, are am I really getting the best answer? I'm, again, the answer that someone's willing to pay for it. Jason Calacanis (00:49:27): This is your key insight. The fact is if Google gives you an answer, you don't click on ads. Google has had a very finely tuned balance between, hey, these first 2 with prepaid ads, these might the paid links might give you a better answer than the content below them. But in this case, if the Chamath GPT tells you, hey, this is the top 3 televisions, these are the top 3 hotels. these are the top 3 ways to, you know, write a better essay. You don't need to click. You have not been given an answer, and the model is gone. David Friedberg (00:49:59): The paid link is still a subset in that case. So at at Google, we used to have a key metric was the bounce back rate. So when a user clicks on a result on the search results page, we could see whether or not they came back and searched again. And so that tells you the quality of the result that they were given because if they don't come back, it means they ended up getting what they were looking for. And so ads that performed better than organic search results, which means someone created the ad paid for it, and the user clicked on it and didn't come back and came back with less frequency than if they clicked on an organic result, That meant that the ad quality was higher than organic quality. And so the ad got promoted to kinda sit at the top, and it became a really kind of important part of the equation for Google's business model, which is how do we source? How do we monetize more search results where we can get advertisers to pay for a better result than what organic search might otherwise kinda show. And so it's actually better for the user in this case than, say, just getting an answer. For example, I'm looking for a PlayStation Chamath Palihapitiya (00:51:09): 5. David Friedberg (00:51:09): I don't wanna just be told, hey. Go to Best Buy and buy PlayStation Chamath Palihapitiya (00:51:12): 5. David Friedberg (00:51:12): I wanna be taken to the checkout page to buy a PlayStation Chamath Palihapitiya (00:51:16): 5, David Friedberg (00:51:16): and I am more likely to be happy if I click on a result, and it immediately takes me to the checkout page. And Best Buy is really happy to pay for you to get there. because they don't want you looking around the Internet looking for other places. And a lot and and we we can't convolute all search queries. Not all search queries are hey. You know, what's the best dog to get to not pee on the floor or whatever kind of arbitrary question you might have that you're doing research on? Many search queries are commerce intention related. I wanna buy a flight to go somewhere. I wanna book a hotel to go somewhere. I wanna buy a video game system. etcetera. That series of queries may have a very different kind of modality in terms of what's the right interface versus the chat GPT interface where, yeah, there's a lot of kind of organic results that people sift on the Internet for today. And and and and the question earlier can be resolved by Google doing a simple analytical exercise, which is, you know, what's it gonna cost us and what's gonna give the user the best result. And that's ultimately what will kind of resolve to the better model. It's really measurable. I think on Shamoff's point, you know, today, Google pays Apple $15,000,000,000 a year to be the the the default search engine on iPhones on the Safari browser, that's only about a quarter of Google's overall TAC. The majority of Google's traffic acquisition cost is actually not being paid for search. A good chunk of that is being paid to publishers to do AdSense display ads. on their sites, and Google's rev share back to them for putting ads on their sites. So, you know, the TAC number I think maybe you kind of wanna move the needle, but the majority of Google search is don't come through the default search engine that they pay. David Friedberg (00:52:50): It might it might move the needle a bit, but I don't think it really changes the the equation for them. Chamath Palihapitiya (00:52:54): My comment is more Tac has to become a weapon on the forward foot, number 1. So if you're gonna spend 21% of your revenue on tac, You should be willing to spend 30 to 40 percent to maintain the 93% market share. I don't think what you wanna see is your profit dollars decay because you lose share. it's rather better for you to spend the money and decayed your business model than have someone decayed for you David Friedberg (00:53:18): in general. At this point, Apple is really the only tack Why not No. Chamath Palihapitiya (00:53:22): No. No. I I understand. I'm not talking I understand. I'm not talking about today. I'm saying take that idea. You have an entire sales team whose job it is right now to sell AdSense. Right? You have an entire group of people who know how to account for tact and how to think about it as a cost. But if you're basically willing to say, out of the $100,000,000,000 of free cash flow, I'm willing to go to 80 or 70,000,000,000 of free cash flow. combined with the 100,000,000,000 of short and long term investments I have and I'm going to use it as a weapon. And I'm going to go and make sure that all of these publishers have a new kind of agreement that they signed up for, which is I'll do my best to help you monetize. You do your best by being exclusive to our AI agents. Right? So you deprive other models of your content on your pages. because that will get litigated, and there is no way just like again, if you say do not crawl, you're not allowed to crawl if your Google or Microsoft researches. David Friedberg (00:54:19): So -- I mean, so this is the point Chamath Palihapitiya (00:54:20): to happen for these agents. unrealistic to expect that it won't. So my point is Google should do this and define how it's done before it's defined for them because right now people are in this nascent phase where everybody thinks everybody's gonna be open and get along. And I just think that that's unrealistic. David Friedberg (00:54:36): It's a really important kind of philosophical question. First off, like, Google today, just so people know, on AdSense, is typically paying out 70¢ on every dollar to the publisher. There's you know, it's a it's a it's a pretty know, generous. And it's it's the way they've kind of kept the competitive moat, you know, wide and kept folks out of beating them on 3rd party ad network. bids because they they bid on everything, and they always win because they always share the most revenue back. So they they they own that market. With respect to acquiring content, You know, the the Internet is open. It's an open protocol. Anyone can go to any website by typing in the IP address and viewing the content that a publisher chooses to make available on that server to display to the Internet. And there's a fair use policy. David Sacks (00:55:14): That's not true. David Friedberg (00:55:15): And there's you you can you can type that IP address. Chamath Palihapitiya (00:55:18): I think 15 or 20 or 30 percent of the pages on the Internet right now are apps that are closed. David Friedberg (00:55:22): Facebook's closed Instagram photos. I'm talking about the open Internet. Right? So, like, the content on the open Internet Chamath Palihapitiya (00:55:27): -- -- saying the open Internet matters less and less. David Friedberg (00:55:30): Yeah. I I don't know. I mean, look. You're right. Maybe there's there's the enhancement of the models. But my point being that if the Internet is open and you and I spent a a billion lifetimes reading the whole Internet. and getting smart. And then we were the chatbot. And someone came and asked us a question, and we could kind of answer their question because we've now read the whole Internet. do I owe licensing royalty revenues to the knowledge that I gained? And then the synthesis that I did, which ultimately meant excluding some things, including some things, combining certain things. And the problem with these LLMs, these these large language models, is that you end up with a 100,000,000, a1000000000 plus parameters that are in these models that are really impossible to deconvolute. You don't know. We don't really understand deeply how the neural network is the the the model is defined and run based on the data that it is constantly kind of aggregating and learning from. And so to go in and say, hey. It learned a little more from this website and a little less from that website. I'm not saying that. Chamath Palihapitiya (00:56:26): -- David Friedberg (00:56:26): a practical impossibility. I'm saying when when Chamath Palihapitiya (00:56:29): you look at transform our architecture today, Every LOM that you write on the same corpus of underlying data for training will get to the same answer. So my point is today, if you're a company, The most important thing that you can do especially you have a $1,000,000,000,000 plus market cap that could get competed away is to figure out how to defend it. And so all I'm saying is from the perspective of a shareholder of Google and also from the perspective of whether the board of director or senior executive or the CEO, this should be the number one thing that I'm thinking about. And my my framing of how to answer that question is build a competitive mode around 2 things. One is at the end which is how much David Friedberg (00:57:12): money and what kind of relationship Chamath Palihapitiya (00:57:12): do I have with my customers including the publishers? And can I give them more so that number 2 is I can affect who they decide to contribute their content to. So you're right. Let's assume that there are 5 of these infinite libraries in the world. David Friedberg (00:57:34): You mean non public content. Chamath Palihapitiya (00:57:35): How important And also public, how important is it if Quora says, you know what, guys? I've done a deal where my billions of paid views in all of that really rich content, Core has incredible content. Google's paying me 2,000,000,000 a year, and so I've decided to only let Google's AI agents crawl in. And so maybe when there are questions that Quora is already doing an phenomenal job of answering. I think it does make a difference that Google now has access to Quora's content and others don't. David Friedberg (00:58:06): Right. For hot minute, did have access to the Twitter fire hose, and that was the premise was we could get this corpus of data that we can have in a very limited, restricted way. They paid Twitter a lot of money. I don't think that those deals exist anymore, Twitter. I mean, you guys might know better than I do, but I don't think they exist anymore. Jason Calacanis (00:58:21): Here's where Tremont, I think. You're right. And maybe David, I think you're being too forgiven. These models know where they got the data, and they can easily cite the sources and they can easily pay for it. David Friedberg (00:58:35): And if you want to see an example of Jason Calacanis (00:58:36): this, hold go ahead. You're you're absolutely right. Chamath Palihapitiya (00:58:39): The video in The Wall Street Journal where Satia was interviewed, showed a demo. And you're exactly right. They actually showed, Jason, in the search results. Jason Calacanis (00:58:47): Yes. Chamath Palihapitiya (00:58:47): The 5 are sources. But it made no sense because it's do you know that those are the 5 most cited places that resulted in vice versa? -- Jason Calacanis (00:58:54): page rank technology or the authority of the website or the author. But let's pause for a second here. There is a company called neva.com. I'm not an investor. None of us are. It's a former Googler. They have 78 employees, I think, according to LinkedIn. I just typed in one of the best flat panel TVs. Here's the result. And as you see, sentence by sentence, as it rewrites another person's content, it links with a citation just like the Wikipedia does. when you scroll to the bottom of it, it tells you, hey. This is from Rolling Stone. This is from Best Buy. This is from Ratings. And if that answer is good for you and you trust those sources, those people should get a commission. every time there's a 1000 searches and you come up, you should get a dollar every time your Chamath Palihapitiya (00:59:35): data was used. And if not, these Jason Calacanis (00:59:37): sites should sue the daylights out of Google. And for Google to say they can't do it is hog water being contributed. David Sacks (00:59:44): Why isn't it? David Friedberg (00:59:45): It's not Jason Calacanis (00:59:45): fair use because In fair use, you have the ability to create derivative works on future platforms, and you are taking this person, the original content owner's ability to exploit that, and you are co opting it. And you're doing it at scale, and that is against fair use. You're not allowed to interfere with my ability to make few products, David. You know this as an attorney. Chamath Palihapitiya (01:00:05): The problem with that -- -- David Sacks (01:00:07): about an IP lawyer. Sorry. Jason Calacanis (01:00:08): Alright. Well, I play 1 on TV and miss podcast. Chamath Palihapitiya (01:00:11): the problem with that idea just from a product perspective for a second is that if you limit how they can tokenize to being all entire sentences, the product will not be that good. Like, the whole idea of these LLMs is that you're running you know, so many iterations to literally figure out what is the next most best word that comes after this other word. And if you're all of a sudden stuck with blocks of sentences as inputs that can't be violated because of copyright, the product will not be as good. I don't just don't think it'll be as useful. David Friedberg (01:00:42): Correct. These are also not deterministic models, and they're not deterministic outputs, meaning that it's not a discrete and specific answer that's gonna be repeated every time the model is run. These are statistical models. So they infer what the right answer could or should be based on a corpus of data and a synthesis of that data. to generate a response to a query, that ref that inference is gonna be, you know, assigned some probability score. And so the model will resolve to something that it thinks is high probability, but it could also kinda say, hey. There's a chance that this is the better answer, this is the better answer, and so on. And so when you have, like, you have in the Internet, competing data, competing points of view, competing opinions, the model is synthesizing all these different opinions, and doing what Google search engine historically has done well, which is trying to rank them and figure out which ones are better than others, and that's a very dynamic process. And so if as part of that ingest process, one is using some open openly readable dataset, that doesn't necessarily mean that that dataset is improving the quality of the output or is necessarily the answer from the output? Jason Calacanis (01:01:45): Correct. Let me just give everybody a quick four factor education on fair use. And here it is from Google's actual website because they deal with this all the time. And when you look at it, the nature and purpose and character of the work in including whether such use is not profit or educational purposes. So that first test of fair use is, hey, if you're using it educationally and you wanna make a video that is criticism of Star Wars, prequels, or how to shoot a shot like this Quentin Tarantino? If it's educational, It's fine. In courts typically focus, I'm reading here from Google on whether the use is transformative. That is whether it adds new expression or meaning to the original or whether it merely copies the original. it's very obvious that this is not transformative. They're just rewriting it. The nature of the copyrighted David Sacks (01:02:30): people -- -- transformative to me. Jason Calacanis (01:02:32): I don't think so. David Sacks (01:02:33): I've talked about their coming out with entirely new content. Jason Calacanis (01:02:36): They're just rewriting it. They're not actually adding anything to it. Transcription would David Sacks (01:02:40): be -- -- fine. Jason Calacanis (01:02:41): If a human does it, it's not Chamath Palihapitiya (01:02:45): It's pretty cool. David Sacks (01:02:47): Listen, Jacob. I think Jason Calacanis (01:02:48): I think I think David Sacks (01:02:49): I think the right issue I think the right issue is just like the cost issue. which is a problem today, maybe, but it's gonna get sorted out. Jason Calacanis (01:02:56): But but here, let me finish. David Sacks (01:02:57): New technology waves that are this powerful don't get stymied by either chip costs or legal rights issues. Jason Calacanis (01:03:04): They do, by legal. They already got you're 100% wrong. YouTube got stopped dead in their and the only way YouTube and Napster got stopped in the tracks. I predict this is gonna get stopped dead in its tracks with YouTube level -- Napster David Sacks (01:03:16): was pure piracy. this is different. Jason Calacanis (01:03:18): And Google was enabled piracy, and then they had to build tools David Friedberg (01:03:22): to finally disagree with Jay Cal. I deeply disagree with you. David Sacks (01:03:24): I guess you're both of you guys. You guys both think that all that cost on spending the way. Philly's gonna stay in the way of the AI. Jason Calacanis (01:03:31): No. It's gonna stay standing in David Sacks (01:03:32): the way. AI David Friedberg (01:03:33): wants to happen. David Sacks (01:03:34): companies using AI Jason Calacanis (01:03:35): to to in big David Sacks (01:03:37): AI is already happening. Jason Calacanis (01:03:38): AI is happening. Like that. Chamath Palihapitiya (01:03:39): -- David Sacks (01:03:39): move to the conversation for it. I actually David Friedberg (01:03:41): I wanna tell you my AI experience. Jason Calacanis (01:03:43): I would like to make my point. David Sacks (01:03:44): We don't need your immature lawyer opinions. Jason Calacanis (01:03:46): I am gonna get in my point how David Friedberg (01:03:47): to give a shit if Jason Calacanis (01:03:48): you want it or not. The effect of Are David Sacks (01:03:50): you gonna lose Chamath Palihapitiya (01:03:50): 500 David Sacks (01:03:51): bucks an hour for pretending to be David Friedberg (01:03:53): a lawyer on TV and out. You're on us. Let's look at her call forward. David Sacks (01:03:57): This one a few points. -- from you. Jason Calacanis (01:03:59): Here it is. Okay. Take it easy, Mister Sub Better Call Jay Cal. The David Sacks (01:04:03): Yeah. Listen to this. Jason Calacanis (01:04:05): The effect listen to this. The effect of the use upon the potential market for value of the copyright work uses that harm copyright listen to this. Very important. David Sacks (01:04:15): When AI takes over the world like SkyNet, Jake House is gonna be like, I thought we'd stop this with rights. Chamath Palihapitiya (01:04:21): Listen to this. Jason Calacanis (01:04:22): AI is not gonna be stopped, but companies using AI to steal content will be -- With rights. Chamath Palihapitiya (01:04:26): -- Jason Calacanis (01:04:26): effective use uses that form the original copyright owner's ability to profit for his or her original work by serving as a replacement -- Check David Sacks (01:04:34): out their Jason Calacanis (01:04:34): computer now. for that word, more or David Friedberg (01:04:36): less likely to be very choosistia. This is the Chamath Palihapitiya (01:04:39): 1. David Sacks (01:04:40): Okay. Great. Okay. You made the point. You made your and you may be right. Sorry. Jason Calacanis (01:04:44): Do we need to get to Marjorie Talligree for you to have a show? Sure. Let's queue a Marjorie Talligree. David Friedberg (01:04:50): No. David Sacks (01:04:50): No. Hold on. Hold on. Jason Calacanis (01:04:51): much did you David Sacks (01:04:52): raise to harm? I I have somebody I have another aspect of the AI thing I wanna talk about besides just this, like, internal rights issue that you're going on and on. David Friedberg (01:05:00): Alright. Fair cool, Jay Parker. David Sacks (01:05:02): So I I had an interesting, you know, AI experience this week, and I I think we're all gonna start having these stories. David Friedberg (01:05:08): you use the AI to make Speaker 8 (01:05:09): a script of how to talk to your David Sacks (01:05:10): kids now? Every week, there'll be some new, like, use case that you see that you're kinda blown away by. The the use case I saw this past week in a in a product demo was they were showing me, like, an Excel spreadsheet, like a very complicated it could sell spreadsheet modeling and financial asset. And they had a plugin to a chatgpt type AI And so they just asked it. They typed in what does this spreadsheet do? And it spit out like a one paragraph explanation of what the spreadsheet did and it was really good. I mean, because me just eyeballing the spreadsheet, I cannot have figured out, like, instantly what that thing did. It would have taken me, like, a while to figure it out. They told me, here are the key inputs, here are the key outputs. So that was number 1. Then they they did something, I think, even more interesting, which is they said give me the formula that tells me when the yield is David Friedberg (01:06:03): above 2% and this and David Sacks (01:06:04): that and that. And the Chamath GPT spat out a formula that was, like, perfect Excel logic that was something that, you know, you or I could never figure out. Right? You need, like, a super pro user of Excel to basically know how to do this stuff. So it split it out. And, like, boom. It worked instantly. They copy and paste into the spreadsheet, and this you could basically like, the spreadsheet was much more advanced now. So what it got me thinking about is that we're gonna have these little assistants everywhere. You combine that power with, say, speech to text. Right? Because we couldn't just talk to it. It would the speech to text would transcribe the instruction. spit it back out, and you're gonna have these, like, little personal digital assistants in applications. I think, you know, it's pretty obvious to see how AI could replace call centers with, you know, having the frontline call center operator be instead of being a human, it can be like an AI. But this actually even before that. Like, you could actually I think in every single application that we use, there's gonna be an AI interface and, like, it is probably gonna be VoiceBase, where you can just say to it, hey, I'm trying to accomplish this. Like, how do I do it? Can you just make it happen? Chamath Palihapitiya (01:07:17): Totally. David Sacks (01:07:17): And it's gonna be really powerful, actually. Chamath Palihapitiya (01:07:19): I have an idea. I was hanging out with Andre Carpathy, and I gave him this following challenge. David Friedberg (01:07:24): So there I was. Chamath Palihapitiya (01:07:26): So there are -- I said, if you had to build Stripe, I said, how many engineers do you think it would take you and how long would it take you to build a competitor? was just just a thought exercise. You know it would take 100 of 1,000,000 of dollars and years. Now imagine you could You are feeling threatened by Stripe. Imagine you're a large company. Visa Mastercard just as an example. You can now actually get 1 or 2 really smart people like him to lead an effort where you would say, Here's a couple $100,000,000 to compete with Stripe. But here are the boundary conditions. Number 1 is you can only hire 5 or 10 engineers. And so what you would do is you would actually use tools like this to write the code for you. And the ability to write code is going to be the first thing that these guys that these things do incredibly well with absolute precision. You can already do unit testing incredibly well, but it's gonna go from unit testing to basically end to end testing. And you'll be able to build a version of Stripe extremely quickly and in a very lean way. So then the question is, well, what would you do with the 2 or 300,000,000 you raised? And my thought is you use it again as tag. You go David Friedberg (01:08:40): to Acquire customers. Chamath Palihapitiya (01:08:41): You go to customers and you're like, well, listen. If Braintree is gonna charge you one basis point over Visa Mastercard and or Sorry. A 100 basis points in Stripe of 50. You know what? Jason Calacanis (01:08:52): I'll charge 10. Margin destruction. Margin destruction. Totally. And this is gonna make everything. David Friedberg (01:08:57): That's what's Chamath Palihapitiya (01:08:57): so interesting. You can take any business that's a middle man business. I think this is the point. Any middle man business right now that doesn't have its own competitive mode can be competed against because now you can take all of those input costs that go into human capital, you can defer that, have a much smaller human capital pool and push all of that extra money into traffic acquisition and substitution movement Jason Calacanis (01:09:20): in Silicon Valley of being more efficient. David Friedberg (01:09:22): This is gonna Jason Calacanis (01:09:22): lead to that efficiency. -- benefit of all of David Friedberg (01:09:24): this is economic productivity because the end customer that's using that tool that you just mentioned, they now have a lower cost to run their business, and their total net profits go up. And this is what happens with every technology cycle. it always yields greater economic productivity, and that's why the economy grows, and that's why I just wanna see if it's so important. That's why technology is so important to drive economic growth, not debt. We've historically used financial engineering to drive economic growth. But technology -- -- media immigration Chamath Palihapitiya (01:09:51): -- -- David Friedberg (01:09:52): and innovation drive this -- What about China? What are David Sacks (01:09:54): you talking about? What we're describing here is is AI making it harder and harder to make humans productive So you wanna, like, bring in David Friedberg (01:10:05): millions of -- It's more per it's more productivity per human per human of labor. Yeah. Human one one humans one human can can do the coding that 20 humans would do before. David Sacks (01:10:13): Assuming they're skilled enough to use the AI. Chamath Palihapitiya (01:10:15): Guys, go back to David Friedberg (01:10:16): go back to, like, traditional capitalism. Chamath Palihapitiya (01:10:18): -- Jason Calacanis (01:10:18): easier than programming. Go back Chamath Palihapitiya (01:10:20): to traditional capitalism for a second. So please go back because the the striped example is another good one. So if you have this business model, right, How does the ecosystem get efficient? Right? How do we create more opportunity to use Freeburg's language? Well, The only way that it really happens, how does costs go down is that certain entities become big enough that they can drive the prices down. Right? an Uber, a DoorDash or whomever says, yes. I need payments capability. So brain treat. Give me your best bid. Checkout.com. Give me your best bid. Adiyan, give me your best bid. Strike, give me your best bid. You compete it down. Right? Amazon comes in. Walmart comes in. They do it in physical CPG goods. They do it online. They do it all kinds of technologies. But you've never had an internal form that can create hyper efficiency and basically create customer value like this thing can because this thing can allow let me show you an example. Gillian 10 person companies to get created that can do the work of 10,000 people. David Friedberg (01:11:16): That's, like, so cool. Jason Calacanis (01:11:17): on. Let me show you two things. These are two aha moments I had this week. This first one is called Galileo AI. It was just a tweet. You describe the design of an app. You're gonna say an onboarding screen of a dog walking app. Chamath Palihapitiya (01:11:28): Incredible. Jason Calacanis (01:11:29): And you type that in, and it gives you a welcome screen. That's like a 7 out of 10. Then it says, oh, a way for people to change their name, phone number, and password. You know, that classic screen on any app. I need to change my thing. Boom. It gives you that. Well, then at the same time, that people are making text to UX, user interface, beautiful here. This stuff will get dumped into Figma, But then there's a github copilot, which if you haven't seen we all know it here. This is allowing you GitHub and GitHub Copilot. GitHub is bought by Microsoft another one of Satya Nadella's incredible acquisitions. This guy's like the new Zuckerberg. I mean, what a what an incredible person to come after a bomber who's just so effective about what he's doing. as you're writing your code, it fills in your code. It knows what you're writing just like in an email, and it's a smaller subset of information than email. Email, you could write anything. You could be you know, talking to a lover or a business person, whatever. Here, when you're doing programming, it's a much finer dataset. These two things are gonna come together where you're gonna be able to build your MVP for your startup by typing in text and then publish it. You're not gonna need a developer for your start That is transformative in the world. David Friedberg (01:12:41): Let me ask you guys a question. Do you think that this leverage and I I argue this is all about, like, leverage? It's one person can generate x units of output more. Yep. Do you guys think that this commoditizes and puts at risk Saks in particular? Like, all of enterprise SaaS because it becomes such a commodity to basically build a business that does something now, or does it create much higher for investors because you invest so much less capital to get to a point of productivity with that business or revenue of that business than was needed before. David Sacks (01:13:13): I'm not sure. I tend to think that if it gets easier, then everything becomes more competitive. So -- Right. I don't know. David Friedberg (01:13:22): But Chamath Palihapitiya (01:13:22): -- David Friedberg (01:13:22): So value gets competed away with that. David Sacks (01:13:24): I would slightly disagree with the characterization. David Friedberg (01:13:26): Does this scare you as an investor and Chamath Palihapitiya (01:13:28): -- David Sacks (01:13:28): I I don't know. I mean, like -- Yeah. Chamath Palihapitiya (01:13:29): -- David Sacks (01:13:30): for example, on that demo we just saw. What does the AI do? It exports the new design assets to Figma format because Jason Calacanis (01:13:37): that's the standard. -- faster. David Sacks (01:13:39): So if you can create a SaaS product that becomes a standard, everyone's still gonna wanna use it. I mean, there's, like, really good reasons for that. So I don't know. I don't think I don't think business software is going away. I also don't think that, like, you're not gonna need to hire engineers because Copilot is gonna do it for you. I think what Copilot will do is make your typical engineer more productive. Chamath Palihapitiya (01:13:58): Yes. David Sacks (01:13:59): They had some graphs around how, like, Copilot reduce coding time by Chamath Palihapitiya (01:14:04): 50%. David Friedberg (01:14:05): Right. So I David Sacks (01:14:05): think you'll be able to get a lot more out of your developers. I think that's sort of the key is a lot of the drudgery work gets taken care of. Jason Calacanis (01:14:13): The answer, Freeport, to your question is I think more startups, more niche startups will make better products and then you'll just have many more folks, like, making Sags for Genesys, making Sags Chamath Palihapitiya (01:14:24): -- David Friedberg (01:14:25): Are those vegetables? They they don't get big enough. Right? I mean, in that case, Chamath Palihapitiya (01:14:28): it to entry price matters. It'll be poor returns. Jason Calacanis (01:14:31): Well, entry price matters too. If you're investing at 5,000,000 like I do in companies when they're just on napkins and, you know, back of envelope, there's plenty of room. If you have a $200,000,000 exit, that's a 40 x. But there David Sacks (01:14:42): could be a lot of new categories too, like a lot of new categories. There could be a David Friedberg (01:14:45): lot of there David Sacks (01:14:46): could be a lot David Friedberg (01:14:46): of lot of You're totally I I totally -- -- industries David Sacks (01:14:49): that get disrupted. Like, we're thinking about just software displacing software. It could be software displacing like, industries that that aren't even software yet. David Friedberg (01:14:57): I think the entire video game industry is gonna get completely rewritten with AI because you're not gonna have a publisher anymore that makes one game that everyone consumes. You're gonna have tools that everyone creates and consumes their own game. You guys wanna watch this cool clip. It's 58 seconds long. Go Jason Calacanis (01:15:11): ahead. David Friedberg (01:15:12): This is a music. Jason Calacanis (01:15:13): Clip day here on all in. David Friedberg (01:15:14): But I thought it was really cool. Jason Calacanis (01:15:16): Is this AI turning you Chamath Palihapitiya (01:15:17): into M and M? Jason Calacanis (01:15:18): This is what the world's waiting for. I hope it's you doing an M and M. David Friedberg (01:15:21): I'm I'm naturally M and M like, but this is a Jason Calacanis (01:15:24): only in your anger. This is the future of Raves Sam. I'm getting lost in an underground This is the future rave sound. I'm getting lost in an underground. David Sacks (01:15:33): Is that Eminem? David Friedberg (01:15:34): It's David M and M. At David Queuetta, playing M and M, a crack with M and M voice. Right? M and M and M. became hugely viral. Speaker 10 (01:15:42): Something that I made as a joke, and it worked so good. I could not believe it. I discovered those websites that are about AI. Basically, you can write lyrics in the style of any artist you like. So I typed right averse in the style of in them about Future Rave. And I went to another AI website that can recreate the the voice. I put the text in that. And I plead the record, and people went nuts. Jason Calacanis (01:16:15): Alright. It's that is nuts. It's nuts. And the crowd went wild for us. So -- So here it is, folks. Whoever makes the best Friedberg M and M hybrid wrap with David Sacks as the hype man's getting a free VIP ticket to all in sum at Chamath Palihapitiya (01:16:29): 2023. David Friedberg (01:16:30): I think we did a virtual Chamath Palihapitiya (01:16:31): -- -- David Friedberg (01:16:31): performance set all in sum at Chamath Palihapitiya (01:16:33): 2023. 1000 Jason Calacanis (01:16:34): per sent. You and I are so in sync these days for you, Bernard. David Friedberg (01:16:37): There are David Sacks (01:16:37): gonna be a lot of interesting mashups that get created. Like, for example, you'd be able to create the movie where, let's say, you wanna make a western and you want John Wayne to start it. I mean, you obviously get get it the rights from the -- But David Friedberg (01:16:48): let's say David Sacks (01:16:48): you wanna take it. But no actor ever goes away. You could I think there's gonna be a data all of them. Jason Calacanis (01:16:53): But if you wanted to make it -- -- it's gonna be better. You're gonna be writing the script. As you write the script, the AI is gonna be showing you that scene in real time, and David Friedberg (01:17:00): you don't have to publish it. Right? Jason Calacanis (01:17:02): Like, that that's the point. -- rainy day. It'll just change in real time. Think about what I do for Star Wars. David Friedberg (01:17:07): Yeah. Just like Instagram just like Instagram Yeah. Just like Instagram and TikTok basically democratized, like, everyone's ability to create and publish content. This takes it to a whole another level where the monopoly that big production houses have, because they have the big budget so they can afford to make a big movie. If that cost of making a Chamath Palihapitiya (01:17:25): $10,000,000 David Friedberg (01:17:26): movie goes to $10,000 or a $1000 of compute time, anyone sitting in their studio in a basement can start to make a movie. And it really changes the landscape for all media, not just movies, music, video games, and, ultimately, the consumers themselves can create stuff for their own enjoyment. and me the best of those products win now. But but having featured individual Here's what's gonna happen for you, David Sacks (01:17:48): but -- -- just become a lot more like the music industry. I mean, remember, anyone can really create a song now. And they do. And and people do go viral on TikTok. Chamath Palihapitiya (01:17:56): -- Jason Calacanis (01:17:56): on Distru kid, and it it's on Spotify. Did you guys see Chamath Palihapitiya (01:17:59): this article in The New York Times that was kinda throwing some shade at the CEO of Goldman Sachs, David Solomon? David Friedberg (01:18:06): Yes. Does it I did see Jason Calacanis (01:18:07): the headline. You look great in the picture, but I didn't read it because I figured it's Chamath Palihapitiya (01:18:10): they were talking about his his side gig as being a DJ, but specifically they called out a potential conflict of interest And it's related to this because what I guess he had gotten a license to a Whitney Houston song, and he remixed it and released it on Spotify. and her biopic is about to come out and they thought that there could be this perceived conflict because Goldman works on behalf of the publishing company and My thought was along the lines of what you guys said. Like, why is this a story? Meaning, David Solomon should be able to go to any website License the song, make it and then submit it back to them for them to approve because the quote in here that matters is the company that licensed it said, we are in the business of making sure this body of music stays relevant. So obviously, you want Whitney Houston songs. Michael Jack and songs. You want John Wayne. You want these people to live on in culture because it's part of our culture. Jason Calacanis (01:19:06): Look at this subhead. David Solomon brushes off DJANG, Chamath Palihapitiya (01:19:10): the better way to maximize it will be like this. Go and use it. Create a derivative work. Let us see it if we like it. So like Gueta, should be able to just give that back to M and M. If M and M's cool with it, he should be able to ship it and just be done. What a non story. Jason Calacanis (01:19:22): Like, the New York Times is just so anti billionaire. So David Solomon brushes off DJ ing as a minor hobby that has little to do with his work at the bank, but his activities may pose potential conflicts of interest. It's like, what are they writing about? Is there not something more important than this? Chamath Palihapitiya (01:19:39): Do we think that David Sollin or any CEO of any major bank on Wall Street? would put their job at risk running 1 of the 20 or 30 most important institutions in the financial architecture of the world to license a Whitney Houston song that they can play at Coachella? I mean, does that come out? -- pass Jason Calacanis (01:19:55): the smell test? No. No. And and just for the record, Iconoclastic, David Solomon. You're going to be doing the opening night DJ set for all in summit 2023. The GIF the GIF is on. Let's get a he's booked. the New York Times hates them, you got anybody the New York Times hates on, you got a slot. You got a slot. That's it. That'll be our lens here. Chamath Palihapitiya (01:20:16): Dave Shippet. David Friedberg (01:20:17): Dave Schappell. Jason Calacanis (01:20:17): Dave Schappell, for sure, Chamath Palihapitiya (01:20:18): 1000%. Jason Calacanis (01:20:19): I mean, he looks good. It looks like he's living his best life. So finance -- Yeah. David Sacks (01:20:23): It's just like offends them somehow. It just like offends them that are corporate CEO could Chamath Palihapitiya (01:20:27): -- Jason Calacanis (01:20:28): Well, that anybody's happy. David Friedberg (01:20:29): Well, I I I think it's kinda cool this guy -- Honk. Chamath Palihapitiya (01:20:34): -- David Friedberg (01:20:34): DJs. Yeah. Yeah. fuck you out. Let me do his thing. I've always wanted to be Chamath Palihapitiya (01:20:38): a d jit. David Friedberg (01:20:38): Yeah? Oh, d jit. Jason Calacanis (01:20:40): I'll hop it down. Chamath Palihapitiya (01:20:41): Spin the 1 and twos. You can't David Friedberg (01:20:42): win the whole -- We all in 2023 after party, and we'll use AI to help you out ASAP. VIP, when Chamath Palihapitiya (01:20:49): I should have been learning out of DJ, I was playing the violin. Jason Calacanis (01:20:51): I'm the saw. you should get up there and wrinkle your violin under Chamath Palihapitiya (01:20:55): a DJ set. That was David Friedberg (01:20:56): my fault. -- for 10 years. We can play the duet together. I play Chamath Palihapitiya (01:20:59): the 14 years student market. I play in an orchestra. David Friedberg (01:21:02): Oh my god. I never knew this. Chamath Palihapitiya (01:21:04): Never again. Jason Calacanis (01:21:05): This is all kind of revelations happening here. By the way, here is my most. Pull up that first Chat JPT I gave you. This was an moment. Me and Saks were doing our weekly mastermind group. Saks and I get together. We kinda, like, co mentor each other. Here was someone who throw us away during your mastermind deal. This was a Chat GPT. I did this one because I was trying to figure this out. How do I make my spouse and kids feel hurt? Speaker 8 (01:21:28): And in chat, GPT, give us a great one. Give them your full attention. Number 2 empathize. Number 3, validate their feelings. They haven't sex. Just put that into your sub Hey, Jackie. David Friedberg (01:21:37): Let me use this as an example. what public so that so that's obviously the aggregation and synthesis of lots of different self help websites. How do you describe attribution of that answer to a particular content publisher? honestly, serious question. David Sacks (01:21:49): Fair use, derivative work. Jason Calacanis (01:21:52): I think in this case, David Friedberg (01:21:53): this would be chaos in Jason Calacanis (01:21:54): it that you can use Chamath Palihapitiya (01:21:55): -- -- David Sacks (01:21:55): monetization opportunity there. There's no monetization. Jason Calacanis (01:21:58): Yeah. You say that because you hate content providers. But here, I'll tell you this is compassionate publishing. I think the GPT, the Chat's invitation -- -- on David Friedberg (01:22:05): this one, Jake. Chamath Palihapitiya (01:22:06): -- Jason Calacanis (01:22:06): this is No. I they know who they got it from. They know what they got it from. Chamath Palihapitiya (01:22:10): -- David Friedberg (01:22:10): lots of websites. It's a very smart synthesis. You can be able to run the slouch is there. It's not pulling a result from someone's website. It's, like, read hundreds of websites, and it's, like, average them. Bulldog. How do you pay for the average? Jason Calacanis (01:22:21): It's that's complete bullshit. they could say, as we ingest this stuff, tag it, then Chamath Palihapitiya (01:22:25): we put -- This is how it's being done. Jason Calacanis (01:22:27): And then you could publish it. When you publish it, you say, hey. Where do we start David Friedberg (01:22:30): this 1? -- with JL? Is that what you're saying? Chamath Palihapitiya (01:22:32): No. I'm saying it's not bullshit. That is what you said is exactly how it's being Right. David Sacks (01:22:35): Yeah. And and and Jake, I'll if let's say that the AI is using a 100 different websites since synthesizing 100 websites. What's the incentive for the marginal 100th website to say, well, opt me out unless you pay me. David Friedberg (01:22:47): Totally. Right. So that's David Sacks (01:22:48): the shake down. That's a shake down. Or Open AI will just be like, okay. Fine. We'll just we'll just work with the other Chamath Palihapitiya (01:22:54): 99. Jason Calacanis (01:22:54): This is why content providers, this is my best piece of advice. You asked a question. I'll give you the answer. Content providers, as a group, need to get together, and fight for their rights in unison. New York Times, Medicare Chamath Palihapitiya (01:23:04): -- -- David Sacks (01:23:04): the right to party? Jason Calacanis (01:23:05): No. Fight for their right to get paid and to survive. David Friedberg (01:23:08): They need Jason Calacanis (01:23:08): to go to chat TVT and say, as a group, either give us these terms or don't index us. David Friedberg (01:23:13): You're David Sacks (01:23:13): trying to unionize all the content creators. Jason Calacanis (01:23:16): Absolutely union unionize all of them. They should be a united front like the music industry. Why do you think the music industry gets paid by Peloton and anybody else? Because it was easy for this -- -- of them yet together. Chamath Palihapitiya (01:23:26): and you could organize, but there's millions and millions of publishers. I think the point here is that technology is fundamentally deflationary. Here's The next great example -- Correct. -- where the minute you make something incredible, costs go down, but also, frankly, revenue and profit dollars go down in the aggregate. doesn't mean that one company can't husband a lot of it and do incredibly well like Google has done, but it's just gonna fundamentally put pressure on all these business models. -- why I think it's important -- Take care. David Friedberg (01:23:52): Look for one more point. Go ahead, Jason Calacanis (01:23:54): Jake. Go ahead, Freeport. David Friedberg (01:23:55): Google should Chamath Palihapitiya (01:23:55): go and they should cannibalize their own business. before it is cannibalized for them. Friedberg final word. David Friedberg (01:24:02): Here's another way to think about it. I think that if this goes as we all predict and everyone's saying it's gonna go, It is more likely than not that many of these, quote, content publishers that aren't adding very much marginal value are going to go away, that you could see the number of content sites offering self help advice and how to do this and how to do that, 95% of them go away. Because all of that work gets aggregated and synthesized and presented in a really simple, easy user interface that makes them completely oblivious. And I'm not discrediting the value that many content publishers provide, but the, you know, the requisite at that point to be valued as a, quote, novel content producer is gonna go way up. David Sacks (01:24:40): Like the offset to that, though, is it so much easier to create content because of the AI. David Friedberg (01:24:45): For totally true. Yeah. David Sacks (01:24:45): We have this company, Copy AI, where even before this chatty PT stuff, you would just go there and say, I wanna write a blog about x, y, and z. You just give it a title and it spits out a post and then they'll actually give you 10 different blog posts and then you just select the one that is the direction you wanna go and you keep doing, you know, human selection David Friedberg (01:25:05): on it. But how how do how Jason Calacanis (01:25:06): do new intelligence get put back into the system? That's based on the existing corporate system. No. David Sacks (01:25:11): You have, like, a corporate blog, so you publish it to your Jason Calacanis (01:25:13): corporate blog. So -- -- is if there is now some new information in the world, who is going to add that to the corpus if everybody is just stealing content and rewriting it? Chamath Palihapitiya (01:25:22): No. I'm not stealing people. David Sacks (01:25:23): It is really -- -- have always had a desire to create. Most people create for free. There's ahead of the long tail that actually gets compensated. The rest of the long tails traditionally gotten nothing, and they do it because they want it 3 days. It's kinda like shaving. creation The Christian Stokes. It's so easy. David Friedberg (01:25:38): Beethoven listened to Heiden. And then Beethoven wrote novel symphonies, and his symphonies were incredible, and he built on the experience of listening to Heiden. The same is true of how content is gonna evolve, and it's gonna evolve in a faster way because of AI. And this content is not just being retrieved and reproduced, it's being, you know, synthesized and aggregated and represented in a novel way. By the way, I like I say Chamath Palihapitiya (01:25:59): -- Jason Calacanis (01:25:59): Hold on. I'm gonna answer that. I wanna answer that, please. chat if Chat TPT takes a Yelp review and a, you know, a a a conde nast traveler review, and they represent it based on the best content that I was out that's out there that they've already ranked because they have that algorithm with page rank or Bing's ranking engine. And then they republish it and then that jeopardizes those businesses that is profoundly unfair and not what we want for society, and they are interfering with their ability to leverage their own content is profoundly unfair, and those magazines will -- -- news by predictions take out. What's that? David Sacks (01:26:31): You're an existing role. Jason Calacanis (01:26:32): It's possible. YouTube is a great example. YouTube was gonna get shut down. Sequoia and the YouTube founder sold it to Google because they were so scared of the Viacom lawsuit and how well it was working against them. They thought this is this business will never fly if we don't have a big partner like YouTube like Google to support the lawsuit. They they won the lawsuit or they settled it because they were able to do content ID and allow content creators. The only reason YouTube exists is hold on. Let me finish. It's because they let content creators, watermark, and find their stolen content, and then claim it. And when they claim the stolen content, they were able to monetize it. that's what's gonna happen here. There'll be a settlement where they are going to David Sacks (01:27:15): be able to claim their Chamath Palihapitiya (01:27:16): -- David Friedberg (01:27:16): I will bet anything. I will bet any amount against your Chamath Palihapitiya (01:27:18): -- David Friedberg (01:27:18): Let's get back going. -- your your your premonition here, Jay Kal, this is like -- Okay. Jason Calacanis (01:27:22): Let's make a bet. Propose a bet. David Sacks (01:27:25): You've seen these AIs that generate images. Right? stable diffusion and like -- Yeah. Chamath Palihapitiya (01:27:29): -- David Sacks (01:27:29): Volley or whatever. You literally just tell it, I want this image in this style and boom, it's done and it would take an artist weeks to produce that. and you can do it in 5 seconds. And you could tell the AI, give me 20 of those, and then you just keep iterating. And in 5 minutes, you've got something mind blowing. So the fact that it's so much easier to create content, you can do the same thing with the written word. The people who need to be compensated, Jake Al, if they don't get what they want, they may just go away, but they'll be ten times or a hundred times more people. Jason Calacanis (01:27:56): Here's how long you are. Thank you for bringing up this example so that I can prove how warm you are. Getty images is suing stable diffusion at the moment. Here is what the dipshits at stable diffusion did. They train their AI on getty images with the watermarks on them and they've been busted. And they are dead to rights now, and they are gonna pay a Chamath Palihapitiya (01:28:15): $100,000,000 Jason Calacanis (01:28:16): or more to get images for stealing their content and allowing it to be republished in a commercial setting. David Sacks (01:28:23): Those images are a little too good to me. David Friedberg (01:28:26): Over crazy, we'll get rid of all checkout. Jason Calacanis (01:28:29): stable diffusion copied the getty image watermark David Sacks (01:28:33): and put it on a Jason Calacanis (01:28:34): reproduced work. Okay. Okay. David Friedberg (01:28:34): I think I think Jason Calacanis (01:28:34): stable diffusion's bigger David Sacks (01:28:37): problem. is they can't do noses and ears and eyelids. That looks like a bullet on me. Speaker 8 (01:28:44): Anyway, shout out to able diffusion for stealing getting image content so David Friedberg (01:28:48): funny. She is wholesale. Jason Calacanis (01:28:49): By the David Friedberg (01:28:49): way, moat moats are influenced by Hyatt and not paid over. Sorry. David Sacks (01:28:53): By the way, there's a real -- Nobody cares anymore. Chamath Palihapitiya (01:28:54): -- David Sacks (01:28:55): interesting topic about AI that we don't have time to get to this week, but I think we should put it on the docket for next week, which is should AIs be trained to lie? David Friedberg (01:29:03): Super important. David Sacks (01:29:03): because that's happening right now. David Friedberg (01:29:05): Yeah. And the last thing Chamath Palihapitiya (01:29:07): -- Or have opinions. The last thing I'll say on this from my perspective, maybe we can jump on after this is this is the best thing that could happen for all of the monopolists in technology because Microsoft taking 500 or 600 basis points of share is the best way to ensure that the FTC has zero credibility in going after the course or anybody else in tech. Right. Those those all of those things, I think, are DOA. So in some ways, actually, Google leaking 5 or 6% of the market share is a really good thing because the FTC is rendered toothless in making any claim. David Sacks (01:29:38): I certainly understand that. That's such a good point. I mean, it's it's kind of a good news, bad news scenario with this whole thing. The good news is the Google monopoly's finally been cracked. The bad news is that it's Microsoft and even bigger monopoly. That's the one that's done it. But it just shows, like, how vulnerable all these big tech companies are TBA. TBD. And they may all end up competing with each other. David Friedberg (01:29:58): I mean, David Sacks (01:29:58): they almost say really well. David Friedberg (01:29:59): Everyone everyone's got a tactical nuclear weapon now, and we don't know where it's gonna get pointed and who's gonna shit set it off and where. Like, the the weaponry has completely changed. Yeah. The weaponry totally changed. Jason Calacanis (01:30:09): And -- Anyway -- To prove how wrong you guys are, here is the verge. Chamath Palihapitiya (01:30:12): Here we go. These times will be highly wrong. Jason Calacanis (01:30:14): Here's the other lawsuit, open source writers. David Friedberg (01:30:18): Are you feeding him this nonsense? Is that what's going on? Jason Calacanis (01:30:21): I I've been tracking this. You people haven't. You guys need to watch what's happening right now. Copilot, GitHub, ChatGPT, and Microsoft are being sued by developers because Copilot was built off of stolen content. These lawsuits are just beginning, and -- So David Sacks (01:30:37): let me get off the gridlock. They'll make all of us. Chamath Palihapitiya (01:30:39): -- Jason Calacanis (01:30:39): licensing, licensing fees. David Friedberg (01:30:40): This will be a transitory effect, and it won't it won't change the dynamics of where this is going over the long term. Jason Calacanis (01:30:45): Change the dynamics of YouTube in the long term. So let's keep going. David Friedberg (01:30:47): I don't know. They're doing pretty good. David Sacks (01:30:49): have a portfolio company called Force Graph which is building an Why don't you put your Jason Calacanis (01:30:53): logo page up if you're gonna go to the whole platform? David Sacks (01:30:55): No. They're I mean, they're building something similar. But it's it's opt in. You just opt in to the you know, you just get all your customers dropped into it. Jason Calacanis (01:31:02): Okay. Which one David Friedberg (01:31:03): is just being able to apply? Let's let's move on to state it. Jason Calacanis (01:31:05): What do you want to move on? You wanna do the framework demo? wanna do I David Friedberg (01:31:08): think Zach's point about AIS -- State Jason Calacanis (01:31:10): of the union. -- will be David Friedberg (01:31:11): a great chat. Let's talk about it next week, though. I think -- Yeah. David Sacks (01:31:13): I think there's more time. David Friedberg (01:31:14): The state of the union, I don't know about you guys, but I found it one of the more profoundly disappointing saddening states of the union I've ever seen here. Jason Calacanis (01:31:22): Unpack that. Unpack that. Why? David Friedberg (01:31:23): I think it was you know, we often kinda focus on the 1 year cycle of what the state of the union says, but I think what's more important is how much the data that's coming through in the state of the union supports the more scary long term cycle. I've talked about this a lot on how scared I am about kind of where where we're headed. with respect to the the US's ability to fund its financial obligations. And the the scary moment at the state of the union besides Biden's inability to kind of articulate much very well, which was honestly a really discouraging site to see was you know, when he talked about what you know, the Republicans are trying to cut Social Security and Medicare. The US treasury put out a projection, which I tweeted last week, originally shared on Twitter by Lyn Alden. This is the US treasury's forecast of debt held by the United States over time. And the assumptions in this forecast are we've got a certain amount of debt today. and we're running Social Security and Medicare forward without cuts. And so what happens as we make these Social Security Medicare payments and we accrue and pay interest on the debt that we hold today, and we don't change the tax rates in this country, and this is what happens. So it's a runaway kind of debt scenario in the US by definition, has to default at some point because you can't cannot tax every dollar of the economy at a 100% at some point. And so, you know, there there are two ways this can go. The first way is you have to cut back on these major kind of you know, expense commitments that naturally balloon over time, and that is Social Security and Medicare. And the other one is that you just tax a lot more. And when you tax a lot more, economic growth gets affected, and it makes it really hard to eventually pay off that debt, and the debt continues to spiral. So I think what we saw was number 1, the announcement by Biden, hey, Republicans are the ones who wanna cut Social Security Medicare, and they screamed, and they said no way, no way. David Friedberg (01:33:21): We'll never do that. And a lot of them did interviews afterwards and said it's total b s that Biden would say that, which I think supports what the polls have shown, which is on both sides of the aisle. People do not wanna see Social Security and Medicare cut in any way right now. That means you can't and you guys saw what happened in France where they pushed back their retirement age by 2 years, and there was effectively riots across the country. know if you guys saw this a few weeks ago. We didn't talk about it, but it was pretty brutal, pretty ugly. And so this is a real cost that's coming bare. It's coming there in the United States, not just with the publicly funded Social Security And Medicare programs, but also with a lot of the private tensions that are gonna need to get bailed with the same federal money because they're not gonna let those things go bankrupt. And that's another trillion plus of liabilities. So, you know, that that cost is gonna balloon And the only solution at that point is to introduce massive tax hikes. And so they proposed this billionaire tax, this tax on on recognized capital gains. It is literally if you keep Social Security Medicare where they are and you don't pay down the debt and you don't grow the economy fast enough, you have to introduce significant tax hikes across corporate and the individual taxpayer base. And so, you know, it it really again, if you zoom out, It really indicates this steepening curve that the US has to climb its way out of. And as you tax more, there's less to invest in the economic growth, The government is a far worse investor in economic growth than the free market, and that means that we can't grow our way out and grow GDP enough to ultimately cover our debt obligations. And this is what Dahlio Dahlio's book that I mentioned in 2021 was so kind of importantly sharing. David Friedberg (01:34:52): This is a multi 100 year cycle, and the last couple decades get really nasty. And this chart, which is a forecast from the actual US Treasury, highlights the problem, And the comments made at the congress this in front of the congress this week by the president of the United States indicates how serious of a problem this is going to be because no one wants to cut these major cost obligations. that we have coming due. And so -- What are you talking Jason Calacanis (01:35:14): about? Sex, aren't you and the Republicans? You wanna cut Medicare and get rid of it. Is that what Biden said? Do you guys wanna get Speaker 3 (01:35:20): rid of David Sacks (01:35:21): No. Okay. Jason Calacanis (01:35:21): What was that kerfuffle about with your who's the person on your squad who is yelling and screaming out at the president of the United States? David Sacks (01:35:28): No. That doesn't matter. That was to sort of Jason Calacanis (01:35:29): But who who are we seeing, madam? David Sacks (01:35:31): Who's that person? Let me tell you what happens to the union is that Biden was basically trying to take a page out of Bill Clinton's playbook. When Bill Clinton lost the midterms in 94, he basically triangulated to the center, and he did two things. He started going for kind of small ball. I started playing small ball politics. It was like school uniforms and things like that that were relatively unobjectionable. and that regular middle class people could get behind. And then he basically posed as the defender of entitlement programs. Back then, he in Chamath Palihapitiya (01:36:03): 96, David Sacks (01:36:04): he ran against Dole by portraying Dole. He went all the way back to Dole's vote against Medicare. This is what the Biden team is teeing up for the reelect in 24 is they're talking about things like curbing ticketmaster fees and fixing right turn red lights. I mean, seriously, like total small ball. Okay? They're gonna try and pretend like he wasn't the most radical tax and spend progressive. over the last two years that we've really ever had in American history, they're gonna try and make everyone forget that and just talk about the small injectable stuff And then he's also gonna, again, pose as the stalwart defender of entitlement programs that are very popular. And it's and and partly they're doing this. They're already, I think, getting ready for DeSantis on this because if you read some of the political analysis on this and Josh Bartle had a good column, and Andrew Sullivan had a good column. Talking about this, that way back when DeSantis was in Congress and he was like a back venture he voted for, you know, some Republican budgets, a Paul Ryan budget that had some of this entitlement reform in it. So they're gonna try and portray him as against the time of reform. Now I don't think it's gonna work because all you had to say is, like, listen. That was a long time ago. I wasn't voting for cutting entitlements. I just voted for my party's budget. that's irrelevant. I can tell you I will knock gun entitlements. So any smart Republican is gonna take entitlement reform off the table because it is a total 3rd rail and they will lose. And I think Trump had the right instincts on this, and I'm sure that any major Republican will have the right instincts on this. And you can see you see the way they're throwing Scott under the bus. Rick Scott had this proposal about having entitlements go from being sort of permanently entitled to being something that gets voted on every year. And the rest of the Republican caucus is like, oh, no. We're not touching that. and they can't run away fast enough from Rick Scott. So Friedberg is right. David Sacks (01:38:02): There is no appetite for entitlement reform, and I would tell any Republican, if you wanna do entitlement reform, it's gotta be bipartisan. You gotta Jason Calacanis (01:38:09): do it. -- thoughts on this. David Sacks (01:38:10): You gotta do you gotta do what Ron Reagan did, which is joint hands with tip O'Neil and moynihan, and you jump off the cliff together. You do not stick your neck out on this. Jason Calacanis (01:38:20): Shamaffei, thoughts on the state of the union, writ large. No. Marjorie Talllegreen yelling liar at the present? No. Okay. Well, that's the most boring state. Well, no. You need to take out. David Sacks (01:38:33): I mean, like, both sides engaged in a lot of, like, weirdness. I mean, Biden was, like, bellowing. at various points in his speech. It was quite bizarre. And you're right. There were some Republicans in the audience who were braying like Jackass and it's unfortunate because I think And Chamath Palihapitiya (01:38:49): who utterly utterly disappointed? I think David Sacks (01:38:51): if the Republicans had just calmed down, I think Biden's sort of weird mannerisms where he was, like, practically yelling. It was like, Abe Simpson, you know, old man yelling at the cloud. And -- Yeah. Chamath Palihapitiya (01:39:02): They they do a good job of, like, right at the moment of self immolation, they let them off the hook. Yolly. It's really incredible. Republicans just they have no impulse control. Right when they could just be quiet, sit there, calm, quiet, and let Biden do the damage to himself. They just cannot Jason Calacanis (01:39:20): I like McCarthy telling Margie Telegree and Mick Robbie telling that other glider guy to get the hell out of here. David Sacks (01:39:28): Listen, it's always been hard to control backbenchers. This is the reality. That does not speak for the entire party. David Friedberg (01:39:34): How do you how do you guys feel about being taxed on your change in net worth from year to year. Jason Calacanis (01:39:41): You mean a wealth tax? David Friedberg (01:39:42): Wealth tax. Yeah. Jason Calacanis (01:39:43): The If it's it's for billionaires, it's totally cool. If it's for Santa millionaires or decimillionaires, absolutely off the table. David Friedberg (01:39:50): To your cut off. Jason Calacanis (01:39:50): We want those people to grow their wealth and invest. The billionaires yeah. David Friedberg (01:39:53): Sure. Jason Calacanis (01:39:54): Is David Sacks (01:39:54): that what you think is going Friedberg? Jason Calacanis (01:39:56): Yeah. So hard to execute on. What are you supposed to do? David Friedberg (01:39:59): Like -- I would love to see a website where you have a piece of yarn You know those those site and then you have, like, a little pin and you kinda push the pin out and the other one has to go in. You can't have it all. You can't have low taxes. and have these entitlement programs and have this level of spending. It's impossible. You have to tax. That's the only way, or you have to cut the entitlement programs, or you have to cut the spending. David Sacks (01:40:22): Well, you're you're you're right about that, Trevor. But let me tell you why the American people think it would be ridiculous to cut their entitlements. They've watched as Washington spent $8,000,000,000,000 -- Correct. Chamath Palihapitiya (01:40:33): -- David Sacks (01:40:33): on forever wars in the Middle East. They just watched as Biden spent trillions enriching the pharma companies on a Figazi that didn't work. They've just watched as hundreds of billions went to climate special interests to the democratic party. David Friedberg (01:40:47): Did you Jason Calacanis (01:40:48): say action successful games. David Sacks (01:40:50): We talked about that when you think about guns. David Friedberg (01:40:52): But the point is, bro, David Sacks (01:40:53): they've watched they've watched it as a freelance Hold on. They've watched as 1,000,000,000,000 of dollars have gone to the donor class, and they are gonna rise up and say the hell with you. If you cut off our Social Security, that we paid into for decades while enriching all these special interests. Yeah. David Friedberg (01:41:10): And I'm David Sacks (01:41:10): paying them one bit. David Friedberg (01:41:11): I don't advocate for any of these points. Jason Calacanis (01:41:13): And the Bellouts of corporations in the great financial crisis. You're right. The -- I David Friedberg (01:41:16): think it I think it's just an analytical I think I think it's just an analytical certainty that you know, you gotta zoom out and stop thinking about the yearly cycle and the election cycle on this stuff and just look at where we're headed over a multi decade cycle. Okay. And there's just no resolution to this problem. Jason Calacanis (01:41:31): What happens if there is David Friedberg (01:41:32): a well taxed? We're all oriented right now. Jason Calacanis (01:41:34): If there is a well taxed, like to say David Friedberg (01:41:36): on billionaires. I'm sorry. Let me just make let me just say one thing. Sorry, Jacob. But let me just say what do Jason Calacanis (01:41:40): they do when they leave the country? Go to Puerto Rico. David Friedberg (01:41:42): That that did happen in France. the way. I think Chamath Palihapitiya (01:41:44): 40% David Friedberg (01:41:45): of the people that were taxed left, and then they came back. Chamath Palihapitiya (01:41:48): So violate our constitution. David Friedberg (01:41:51): That's that'll be it'll be litigated for sure. Yeah. If you can get the cost of energy in this country to drop by 50 to 75%, and you can increase energy capacity by Chamath Palihapitiya (01:42:04): 10 David Friedberg (01:42:05): to 20 fold. then you have a fighting chance because you can actually grow the economy out of the problem. And that's really where I am optimistic and excited about opportunities like Fusion and you guys can make fun of me all you want. But if we can get to a point where we can increment energy capacity by an order of magnitude, there is economic growth that will arise from that from all these new industries and you these production systems. And that's how we can grow our way out of the debt entitlement tax problem where one of those three things has to give in the absence of that. Do you Chamath Palihapitiya (01:42:33): know what the cheapest source of energy David Friedberg (01:42:34): is today? Fusion. It's Chamath Palihapitiya (01:42:40): 3¢ David Friedberg (01:42:40): a kilowatt hour. Vision, you mean? Chamath Palihapitiya (01:42:42): No. It's Fusion. It's the sun using solar panels. Jason Calacanis (01:42:48): There it is. David Friedberg (01:42:49): Yeah. The problem, Shamal, honestly, let me just say this one thing. The problem is can you scale energy capacity by 10 x? Yes. And can you do it fast enough? And that's the Jason Calacanis (01:42:57): real technical while creating jobs. That's the David Friedberg (01:43:00): real techno economic question. Right? Chamath Palihapitiya (01:43:01): Like, I posted a link in my reading list today. This week, you guys can go look at it. The most prolific distribution of fusion technology is China actually deploying solar on every single rooftop in China? United States could do it too and you will 10 x the power available. David Friedberg (01:43:18): Well yeah. I mean, they are Chamath Palihapitiya (01:43:19): -- David Friedberg (01:43:19): And it's a Chamath Palihapitiya (01:43:19): 0. David Friedberg (01:43:20): They're increasing their I mean, they're they're adding they're adding David Sacks (01:43:23): half an hour David Friedberg (01:43:23): a while. -- years. Chamath Palihapitiya (01:43:24): It's just sometimes we wanna create intellectual complexity. I I love these different forms of fusion. I just think it's a 50 year tranche to get it because even if you fix it -- David Friedberg (01:43:33): I'm not betting I'm not betting on it. I'm just saying there there is a -- No. No. Chamath Palihapitiya (01:43:36): I'm just agreeing with you. I'm just building on your point to say it's actually happening. Fusion is what is actually creating abundant 0 cost energy today. David Friedberg (01:43:44): Yeah. There I and so look. If we can increase energy capacity in this country by 10 x, energy production capacity by 10 x, and we can do it in the next 20 to 30 years. Chamath Palihapitiya (01:43:53): You could do it in 10 by putting something on every rooftop. David Friedberg (01:43:56): If we can, we have a path out of the entitlement tax debt problem. Otherwise, one of those three things is gonna give, and it's gonna be ugly. Chamath Palihapitiya (01:44:04): The thing that we are lacking right now is not actually the generation capability. which is incredibly cheap, but it's really scalable storage. And once we figured that out, which is actually the real technical bottleneck to abundant 0 cost energy, will have your boundary condition met and will have it well before different forms of fusion are commercializable. Jason Calacanis (01:44:25): France, had an exodus of an estimated Chamath Palihapitiya (01:44:28): 42,000 Jason Calacanis (01:44:30): millionaires between Chamath Palihapitiya (01:44:31): 2012 Jason Calacanis (01:44:33): And, really, the and before -- Yeah. Chamath Palihapitiya (01:44:35): -- David Friedberg (01:44:35): Macron killed it. -- attacks for 12 years, and then it they were reverse it. Jason Calacanis (01:44:39): They were just losing the tax base so violently. They had no choice. This David Sacks (01:44:42): is gonna in California if they Jason Calacanis (01:44:44): move forward with -- It's happening in California ready without the rail tax. Right. It's happening already. David Sacks (01:44:49): And now you look at it -- They're stupidly telling people that this wealth tax is gonna have a 10 year look forward. So everybody I know is at least talking about, hey, could this happen in the next 10 years? Because if it might happen 5 years from now, we gotta leave now Because if I wait Chamath Palihapitiya (01:45:04): -- Jason Calacanis (01:45:04): They're gonna chase you. Chamath Palihapitiya (01:45:05): -- David Sacks (01:45:05): they're gonna chase me. Jason Calacanis (01:45:06): Yeah. Specifically, you. They hate you. David Sacks (01:45:10): No. I mean, it's it's it's a problem. Jason Calacanis (01:45:12): It is a serious -- But David Sacks (01:45:13): let me tell you, I mean, to Friedberg point, it's not just Ray Dahlio. The great political satirist, Peter O'Rourke, who died last year. He wrote that American politics is defined by the formula, x minus y equals a big stink, where x is what people want from government and y equals what they're willing to pay for government. And that difference is basically the big stink. And the job of politicians is to manage that stink. And the problem is the politicians have not been doing a good job managing it, and they increasingly do a worse job managing it. So, yeah, at some point, it's gonna blow up. David Friedberg (01:45:48): Yeah. You guys wanna hear a crazy statistic? I was pulling this out. You know what the budget per capita is of the city of San Francisco? how much the city spends per year divided by the number of people that live in the city? Jason Calacanis (01:46:00): Well, we know it's a couple of $1,000,000,000 budget. We know only a couple of David Friedberg (01:46:02): a 100,000,000,000 budget. Jason Calacanis (01:46:04): Yeah. And it's 800,000 residents? David Friedberg (01:46:06): It's it's Chamath Palihapitiya (01:46:06): $18,000 David Friedberg (01:46:08): per citizen per year. That's how much the city of San Francisco spends. A third of that money, by the way, 30% of it goes to or 25% goes to public health care. Now when you look at that $18,000 budget per capita, It is more than every single state of the union on a per capita basis except Oregon and North Dakota, which have very weird a budget. So San Francisco spends more than every other state per capita. It spends more in aggregate than 16 US states. And the federal budget per capita is $15,000. The federal government's budget per capita is $15,000. So San Francisco spends more than 15 states and spends more per capita than every other state except to and spends more than the federal government per capita. And I think that really highlights and and you need to tax the base to do that. And now we are seeing San Francisco is the largest population of exodus and population of excess of any city and business exits of any city in the United States. That is your predictor. That is your predictor of where this goes. David Sacks (01:47:08): Right. In Miami, Florida, my contrast has no state income tax. They just rely on property tax and sales tax, which California has as well. There is a a income tax and cap gains tax of 0 in Florida, and they seem to make it work. Chamath Palihapitiya (01:47:25): 880,000 Jason Calacanis (01:47:26): people was the peak in San Francisco Chamath Palihapitiya (01:47:28): 2018, 2019, 2020. Jason Calacanis (01:47:31): And then in Chamath Palihapitiya (01:47:32): 2021, 815. David Friedberg (01:47:34): So 10% that shows it's gotten a little bit further in Chamath Palihapitiya (01:47:37): 2020. -- David Friedberg (01:47:38): think it's it's down to 6:15 now. Jason Calacanis (01:47:40): I think it is David Friedberg (01:47:40): because -- Hard to attract. But yeah. Jason Calacanis (01:47:42): Well, you have a lot of people who owned homes there and maybe own second homes because let's face it. It was a well healed group of individuals living there. and a lot of them just still have their places, but they've left. And then they're they're in the process of selling their places. The point the David Friedberg (01:47:54): point is increasing the tax rate is a great short term solution. But over the long term, if that budget per citizen isn't brought in line, there is no way to tax the base enough without causing the tax base to leave. Forget about what my anyone's personal opinions are. That's just the economic reality of what happened in France. It's what's happening in San Francisco. There's a lot of great predictors in history of where this has happened. And so something has to give. Or you have to have a miracle, like an energy miracle, but, you know, we'll all keep investing for Jason Calacanis (01:48:23): Alright, everybody. This has been an amazing amazing episode of the all in podcast, a 115 episodes for the dictator, Sultan of Science, and for the pacifist, David the Dove sacked, I am the world's greatest model creator, Jay Cal, and we'll see you next time. Bye bye. Love you. Best of luck. Speaker 3 (01:48:46): I like winners ride. Jason Calacanis (01:48:48): Rainman, David Sachs. Speaker 4 (01:48:49): And it said -- We open store David Sacks (01:48:54): sit to Speaker 3 (01:48:54): the fans, and they've just gone crazy lately. We what airliners ride. Speaker 4 (01:49:06): Besty's are golf. Home Thirty. David Friedberg (01:49:08): That is my dog driveway. We Chamath Palihapitiya (01:49:16): should all just get a room and just have a think you, George, because they're all business. It's like this, like, sexual tension that we just need to release somehow. David Friedberg (01:49:24): When you're the VP What? Fire of the earthy. What? Where Jason Calacanis (01:49:29): did you get Murphy's r back? Speaker 4 (01:49:31): going all day.