AutoGPT 的巨大潜力与风险、AI 监管、Bob Lee 案与旧金山现状

Jason Calacanis (00:00:00): Everybody. Welcome to episode 125 of the all in podcast. On an historic day, we're taping 04:20. Really excited that SpaceX was able to launch Starship and it made it off the launchpad and incredibly successful today day today. We have, of course, with us, the Rayman, David Sachs, the Sultan of Science David Freeberg, and of course the dictator of Chmouth Polyapatilla, but 2 special guests are here. Special guests. Gavin Baker from a tradies. How do you pronounce it? Gavin Baker (00:00:32): A tradies. Chamath Palihapitiya (00:00:33): A tradies. How's a tradies? Jason Calacanis (00:00:34): How's the tradies, if you're no dune? And then Spacex board member, Antonio Gracias, 1 of first investors in SpaceX, Antonio, a big day for you. Maybe you could just tell the audience what happened today why that is so important in the history of this company? Antonio Gracias (00:00:53): Well, first, I wanna thank you guys for letting me come on and have a little chat with you about this. Today was extraordinarily important for for SpaceX, I think, for America and for Humanity. And the starship is the realization of of the vision head Elon had 20 years ago, 25 years ago. Even as a child really to to go to Mars. And the engineers here at at SpaceX and all the entire team working extremely hard or really just to get this this vehicle off the pad as as Yana said. Right? The the this is a brand new vehicle. Everything about it is new. So the engines, the material science, the structure, the design, all of it new. And the most important thing here was to get off the pad so we collect data. And this technology platform is the platform that allow us to go to Mars. So from a non engineer standpoint, why this is important, is that while we've proven with this flight, we got past a point called Bax q, which is the point at which the vehicle takes maximum stress. That's how I think about it. Sure engineers would tell you a lot more description to it. Or David Freper give you a better script to it, but it's the most honest rest in the vehicle, which means this vehicle will get to orbit. And this is the vehicle that's gonna take us to Mars. So today is the day that all of the hard working people at SpaceX accomplished a goal of making the human race space fairing. When we look back in history, I believe this will be the day. We marked the the technological development that we broke through and built a vehicle that could actually go to Mars. Jason Calacanis (00:02:24): Now when we look at it, obviously, it didn't make it to orbit. Maybe you can give some context into what is the typical life cycle of a new rocketship coming out of the Falcon, the original 1, has done, I think, 02:24 missions, 02:22 of them successful. I think 160 or so actually landed themselves. Yes. And so you had 2 or 3 mulligans, I think, in the development of that. Maybe 2 actually. So what can we expect here? When are they gonna stack? And rack and launch the next 1. Antonio, let's see. What's the timeline here to getting to orbit? What would we expect versus some of the other projects that we've seen like the Russian rockets? Antonio Gracias (00:03:03): So look, this is a brand new vehicle and whenever we develop a brand new vehicle, it takes a long time development. You know, my understanding, all this is as again a layman and sort of as a board member non executive here is that it'll take at least 2 or 3 months to really get the pad rebuilt and get another vehicle back on for testing maybe longer. But it's really important to note here that We've gotten sort of used to the idea that spacex launches rockets and all these rockets come back and all those vehicles are stable because the Falcon 9 and 9 heavy are so stable. And they're so well engineered and they're amazing vehicles, but the most reliable vehicles on earth in human history. This is a brand new vehicle. This was a huge win. I mean, it was an enormous room for the company, enormous room for the country, just getting it off the pad and collecting the data. And now we know it works. We just have to get it stable now and get up to orbit. So it's it's really it's it's a hard problem, but it's a solved problem from here. And the the we learned here is that this vehicle does work. David Friedberg (00:04:02): Amazing. Can you guys talk about, like, the impact of this vehicle cost to launch, payload like the big metrics that are that kind of help realize that outcome. Gavin, I think I saw you did a bunch of really good tweets on this. You shared some of the metrics that that I thought were really succinct and really helpful. Gavin Baker (00:04:20): Yeah. Sure. So, when this is, I think it's a long road to full reusability. You know, the first step will be Makazila catching the booster. It doesn't it doesn't have legs like the falcon 9. And then, the second step will be landing the starship, which is really hard. But once you do that, they should be able to send over a hundred metric tons to orbit at a variable cost of under 2000000 dollars per public data. These are public statements. Antonio Gracias (00:04:52): I would never confirm or deny those statements to get this just gabbed math. I'll be back in the envelope. David Friedberg (00:04:57): 2000000 dollars is the cost to get a hundred tons into orbit. That's that's the the metro. Antonio Gracias (00:05:02): Variable cost. David Friedberg (00:05:03): Variable cost. So but Antonio Gracias (00:05:04): I I think the point Gav is making if if I might just put that is that it is a step function change. It's not at like a small change. It's an enormous change Jason Calacanis (00:05:12): Right. David Friedberg (00:05:12): Can you compare that to the numbers before for folks to understand? Gavin Baker (00:05:15): The Falcon 9 mass to useful orbit is 17 metric tons, and the variable costs that, you know, I I have seen Elon tweet about. Is somewhere around 15000000 dollars. So you are lifting more than 5 times the mass to orbit. And based on other statements at hundred metric tons, is a very conservative estimate. And you are doing it at call it, 10 to 15 percent of the cost. So this is a you know, we can all do the math, but We can envelope it, you know, roughly a 50 x -- Huge. Jason Calacanis (00:05:59): -- Gavin Baker (00:05:59): change. And this, you know, massively changes unit economics for StarLink. For sending anything into orbit, and as Antonio said, it's it's great for SpaceX. It's great for America, and it's Great for for everyone I've got for humanity in. Great for humanity. David Friedberg (00:06:14): Can you explain how that then translates into going to Mars? So now we can get a hundred tons into orbit for 2000000 dollars what happens next in terms of like how that payload capacity and low cost enables, you know, full transport to Mars and you know, I know that the timelines are tough but it would be super helpful to just translate the orbit concept into the let's go to Mars concept. Antonio Gracias (00:06:35): It's important to know that like size of this thing, get to give a sense of scale, is the interior space of it is the size of the international space station. So it's a huge amount of of tonnage. Just think about all that's gonna take to get to Mars. Right? You've gotta you'd have to lift a payload into orbit. You'd have to, you know, create a base there on the moon or in that's orbiting the earth to actually refill ships and send them out into space. And this same design will scale up to become the Mars Colonial Transport or very similar That's why it's important. And look, the timeline on that, I don't know. I'm hoping that it will be while I'm still able to go, that would be great, physically able to go. But that's really why it's important. Think of this as a small version of the same vehicle. We will actually use to go to Mars and then all the stuff you have to transport to orbit becomes more more economic because as Gavin just said, you know, 50 x kind of reduction in cost. David Friedberg (00:07:27): Can I ask you another question? Sorry. I don't mean to monopolize the questions, but These are things that I think are like super important questions, but that a lot of people often ask or I hear them asking. But what happens with the space industry in the nearer term. So there's this great long term goal get tomorrow. That's a that's a big project. But it'll certainly be funding. I'm sure to run that project. But what other economies now emerge as this this cost down of 50 x happens and what else do you think happens besides communications and StarLink, obviously there's that's already a pretty scale business. What other markets can develop here in the near term? What other economies do you see happening? As a result of this cost impact. Antonio Gracias (00:08:06): Yeah. I mean, look, Gavin could jump in here too, but the the reality is once you could take that much mass to orbit, you can move anything around the planet very quickly. You can kinda go up, but the burst can below even come down. So transportation generally changes. You know, if you wanna fly to to Tokyo from New York City, it goes from being you know, a day trip to a matter of hours. It's extraordinary. David Friedberg (00:08:25): Or a container ship in a couple hours. Kinda Yeah. Antonio Gracias (00:08:27): Everything that's rapid transport around the earth. Even package around there, everything gets faster. Kevin? Gavin Baker (00:08:32): Yep. There will be no more transpacific or transatlantic cargo flights. I think in 567, 08:10 years, you're gonna be needing a big starship fleet to accomplish that. But I think the transatlantic and transpacific aerospace cargo routes go away. Antonio Gracias (00:08:51): So, transportation logistics, I think is a fundamental change, human transport, fundamental change. And then there's all the knock on effects of building this kind of technology look. The space program, the American space program that took us to the moon, created the cell phones we use. Right? I mean, there's so much the chip designs, all the technology that came off of that, the same kind of effects we believe will happen here. So it's hard to predict, but it will be a lot of great stuff. Jason Calacanis (00:09:14): And that's kind of the point. When you can get payload up there, now entrepreneurs can think of a million different crazy ideas and affordably put something up there. Whether they want to mine an asteroid or they have a science project, Now a thousand flowers, a million flowers can bloom, and entrepreneurs can start thinking about it. That's already happened to a certain extent with Falcon. That people are able to come up with great ideas. Well, I have to say Antonio Gracias (00:09:38): And the inspiration provides. Jason Calacanis (00:09:40): It it does. Yeah. Antonio Gracias (00:09:41): Amazing to be here. And feel the inspiration and Jason Calacanis (00:09:44): just the joy. I think that's what I was gonna ask you about if, you know, as we wrap here with you too, If you could if you could take people inside mission control, which were privileged enough to be in. The sense of history and the feeling in that room. If you could describe it for the audience, what those engineers were feeling, and what you in fact felt at that moment. Antonio, I think of it. Antonio Gracias (00:10:10): So I I would start by juxtaposing with Monday. So we were here Monday. Jason Calacanis (00:10:14): We were here Monday, Monday. Antonio Gracias (00:10:15): And Monday, I think there was a real sense of concern. You know, the the the countdown sat around 10 minutes, the vehicle, we had a bowel failure, and without that stuck open, basically. And we had stopped and and kinda regroup. And by the way, from my perspective, that's like a solid success because the vehicle did not get destroyed in the pad -- Yeah. Jason Calacanis (00:10:35): -- Antonio Gracias (00:10:35): which is like the number 1 thing to have happen here. It's not a success. The second so that was kinda Monday. And I think Monday was, yeah, caution and intensity. Jason Calacanis (00:10:44): It was it was a very intense, very intense, like, Can this will this ever happen? Yeah. When will it happen? Antonio Gracias (00:10:50): Yeah. Today, what I felt in that room was a sense of There was a high sense of intensity, a high sense of focus, and also a sense of People were excited. There was excitement about it. It felt different today. It felt more electric today. They were super focused, but you could feel the excitement in the room. They believed it was gonna happen. They thought it was highly probable, and that it was gonna work. And when it did work, I would say, it was a sense of elation and joy. And just, you know, this is this is 20 plus years of work. And, you know, Elon was here in the room with the engineers, and it just seeing him light up, seeing the joy that he felt, seeing the joy the engineers felt together for me. And having been a board member here an investor for a long time and sort of been a bit along this company and seen develop, it it brought a real sense of of hope. Yeah. For what's gonna happen to this country and what's happening to humanity and and it's such a joy to my heart. Jason Calacanis (00:11:50): Yeah. Gavin, do you have any emotional feelings there when you watch it, you wanna add? Gavin Baker (00:11:54): Yeah. Well, I think it's also just what I would what always strikes me when I'm here is this is a sandy spit of land. There was no power, no electricity, no potable water, you know, no sewage, no utilities, nothing. And out of this, you know, sandy spit of desert, you know, on the Gulf of Mexico, a extremely talented group of engineers, the last 5 years, have lived in, you know, these these air streams. You know, a long way from a major city, and it is it is just an amazing place to visit. And, you know, the sense of commitment. And when you talk to anyone at SpaceX, anyone here at Starbase. You know, what are you trying to accomplish? Make humanity multiplanetary species. Now, get to Mars. Yeah. So just the experience of visiting Starbucks is amazing. Second, I would just say launches are very visceral. It's shocking if you have not experienced 1. Jason Calacanis (00:12:56): The ground shaking. Antonio Gracias (00:12:57): Yeah. Yeah. Feeling in your chest. You feel Jason Calacanis (00:12:59): it in Antonio Gracias (00:12:59): your chest. Jason Calacanis (00:12:59): Feel the Yeah, you feel your body shaking like an earthquake. But it doesn't stop. Gavin Baker (00:13:05): And it's incredibly dramatic. The rocket, it's going so slow at first and then it accelerates. And then you hear this enormous crackling noise that's, you know, louder than any concert, louder than any -- Yeah. Jason Calacanis (00:13:17): -- Gavin Baker (00:13:17): you know, sports stadium. You then blast a pot of air hits you, you feel it. And I would I would say a lot of people at launch cry. It's a very emotional experience, often for people who are who are not emotional. David Friedberg (00:13:31): Yeah. It's hard Jason Calacanis (00:13:31): not to get emotional. Yeah. Gavin Baker (00:13:32): I think just that human beings can accomplish something like this. Is amazing. And then what I would just say is, you know, there was the rocket flew for 4 minutes. And went through max q. It went to 39 kilometers. The Soviet in 1, which was comparable rocket only reached 12 kilometers. Like the team was ecstatic. Jason Calacanis (00:13:56): Yeah. The joy on their faces. Gavin Baker (00:13:58): Jappy. Cheers. Jason Calacanis (00:14:00): You've never seen anything like Yeah. Gavin Baker (00:14:02): It was awesome. It was very inspirational, and I felt very very grateful to be there. Jason Calacanis (00:14:07): Yep. Incredible. Gavin Baker (00:14:08): Yeah. Can I Antonio Gracias (00:14:09): give you 1 thought of what I'm thinking right now -- Yeah? Jason Calacanis (00:14:11): -- Antonio Gracias (00:14:11): the after effect. Jason Calacanis (00:14:12): The after effect. After glow. Antonio Gracias (00:14:13): It's just it destroys its gratitude. I mean, there has been so much sacrifice here, and we wouldn't sit over 20 years from Elon, of course, and the amount of just you know, unbelievable worth it on from him and the entire team here at Spacex's engineers, everyone who works here Jason Calacanis (00:14:29): -- Yeah. -- Antonio Gracias (00:14:29): it's been extraordinary. And it just really I'm just deeply grateful Incredibleredible. And grateful to you all for having us on. Thank you. Jason Calacanis (00:14:35): Incredible. It's David Sacks (00:14:36): great to hear that perspective because you would not have gotten it from off the Twitter feed you know, from the mainstream media. Antonio Gracias (00:14:44): David, if you'd come here with us, you could've gotten Jason Calacanis (00:14:46): Yeah, David. You were invited. Antonio Gracias (00:14:49): You were invited. You almost we almost shamed David Sacks (00:14:51): our people by me. Antonio Gracias (00:14:52): There's a new term called Starship as opposed to Shanghai. We're gonna Shanghai. We can't starship you. We're gonna starship you next time. Yeah. David Sacks (00:14:58): I'm bummed and I couldn't be there, but I'm excited to to see how excited you guys are. And just the point I was making is that when I was reading the mainstream media coverage of this, It was almost like ghoulish. It was like a type of glee. It was almost something that the that the rocket blew up, but they didn't they didn't really mention any things you're mentioning. I mean, from the point of view, the people who are there, it was a triumph, and it was exciting because of the data that was collected and the fact that this rocket even got off the earth and achieved this this trip flew up for 4 minutes, but the media never really conveyed that. So thank you for giving us a perspective that you just would not have gotten today from the New York Times or other mainstream media. Gavin Baker (00:15:38): And just to add to that just a little bit of context, you know, this is an iterative design process with rapid improvement. This Starship had 31 engines that were made over the course of 1 year, had different tolerances, behaved unpredictably. You know, this was far from the best starship. The 1 that's gonna launch in 3 months or 2 months or 4 months or 5 months or whatever it is, they've already made over a thousand discrete improvements to it. And that was before they got all the data for today. And then there's a starship after that and after that. Jason Calacanis (00:16:13): So I think It it it it really is AAA the what the mainstream media just failed to understand is the process under which a new rock a platform is deployed and how revolutionary this is. They are iterating at a speed here. That I don't think people can comprehend. Antonio Gracias (00:16:31): I mean, on this note, it's important. Jason Calacanis (00:16:33): They don't care. Chamath Palihapitiya (00:16:34): They don't care. And there was a way to paint somebody who they dislike and they are threatened by the negative light. The front page of the Wall Street Journal says SpaceX's Starship explodes shortly after launching uncrewed test flight. If you take Antonio Gracias's explanation which was articulate and transparent and fair. And this headline, you could not be more further apart on the spectrum of truth. Antonio just said that This is a day. This is for the audience of which there are millions of people now. Antonio said, this is the day that you look back on when we are multiplanetary as this Cambrian moment, if you will, this incredible point of innovation and human ingenuity and teamwork and sacrifice, you know, Gavin said it as well, just giving up 5 years of your life to move in the middle of nowhere, live in an air stream trailer. And then the wall street journal was basically perspective. It's Jason Calacanis (00:17:29): The rock Antonio Gracias (00:17:29): goes boom. David Friedberg (00:17:32): I mean David Sacks (00:17:32): What was his fireworks It was just a fireworks display. Right? Antonio Gracias (00:17:36): I sent a note to my own team. Sure. I just said I David Friedberg (00:17:39): said, look, Antonio Gracias (00:17:39): ignore please ignore the news media. Jason Calacanis (00:17:41): Yeah. Antonio Gracias (00:17:42): It's total b s. This is a huge success. Chamath Palihapitiya (00:17:44): Fake news. Antonio Gracias (00:17:45): It's a huge success and, you know, we should just step back for a second and enjoy success because part of the problem with the news media is this is a moment that should galvanize our country. I mean, space it's Jason Calacanis (00:17:55): This is about America. Antonio Gracias (00:17:56): Space this is an American company. Jason Calacanis (00:17:58): This is about American. David Friedberg (00:17:59): Well, these things are brand Chamath Palihapitiya (00:18:00): I think they can't see that it galvanizes, potentially galvanizes support for a human being that they feel deeply threatened by. And that's what it all comes down to ultimately. And That's what you see in the headlines. That's why What's so interesting about this is that the behavior of the mainstream media to now paint this as something unsuccessful or a joke or rock it goes boom or fireworks. When you look back on something as meaningful as this, it'll just make them even less credible. That's what that's unfortunately what they're doing to themselves is shooting themselves in the foot. Jason Calacanis (00:18:29): It's pretty sad. Yeah. And this But there's just wall street journal. This is CNN New York comes to everybody just painted it as a failure. And it's like, oh, here's a collection. Chamath Palihapitiya (00:18:39): Adpline's well done producer Nick. Jason Calacanis (00:18:41): I mean, literally, you would think if you read the mainstream media that SpaceX vowed. And really, when I was talking to Elon, months ago about this, you know, he said, listen, 50 50, we get off the launch pad. Antonio Gracias (00:18:54): Yeah. Jason Calacanis (00:18:54): If we can get off the launch pad and we don't blow up the launch pad, that's a huge success. The fact that this thing got as far as it is in 4 minutes, and they got all that data. And they've got when you see the scale of this And I hope you all get to come down here. And all Americans get to see this. Because for me, you know, and being friends with Elon for as long as I have, and to watch him go from the idea of this. And he showed me I went with Elon to see the the Horthon factory when he was considering renting it. And from that moment to now, to to see the suffering that he went through personally to do this. And the team, the amount of suffering to get to this point has been so tremendous. But when you go to the gig of Factory in Texas, when you see what's happening here at Starbase, it should let you know that this is still the greatest country in the world with the greatest entrepreneurs, and and he is truly the greatest entrepreneur of our lifetime. And I'm not just saying that because he's he's my bestie. I'm I'm saying it because it's objectively true. And when you see headlines in the press, look at what has been accomplished. Look at the Tesla's on the road. Look at what happened with this rocketship. And and judge the man by what has been produced to date and understand he's gonna keep going. And the team he has inspired is relentless. I spoke I sat there on the deck an hour or 2 after all this went down and I just ate some chips and salsa with a half dozen of the people who are in Mission Control. They love the podcast. They listen to every episode of all in. I I kid you're not. And they said, Will you talk about this on all in? I said, well, we talk about on all in. Thank you for what you've done for humanity. This is the most inspiring thing I've experienced in my life. Chamath Palihapitiya (00:20:39): We love you guys. Jason Calacanis (00:20:40): We'd love you guys, SpaceX. Charge ahead, be relentless as you've been and know that despite these absolutely insignificant headlines. What you're doing is so meaningful to every American and every human on this planet. Don't stop. Go faster. Go harder. Be more relentless. We're all cheering and we're in awe of you. David Friedberg (00:21:03): This is 1 topic we can all agree on. Jason Calacanis (00:21:05): This is something that can galvanize America. Antonio Gracias (00:21:08): This should be the moment. Jason Calacanis (00:21:09): We are leading the world again. Antonio Gracias (00:21:12): Yes. Jason Calacanis (00:21:12): We're leading the world in the space race again. We're gonna be on the moon, we're gonna be on Mars. David Sacks (00:21:17): What about Uranus? Jason Calacanis (00:21:20): Well, you know, free bird keeps asking. And give me a hug. I love you brother. Thanks for coming on, Scott. Give me a hug over here. Love you brother. Thanks for coming on. David Friedberg (00:21:30): Bye, guys. Jason Calacanis (00:21:31): Thanks for coming on. Bye, guys. David Friedberg (00:21:33): See you, Gavin. Bye Antonio. That was great. David Sacks (00:21:35): I'm surprised I beat Shamak to the punch there. Jason Calacanis (00:21:38): Yeah. Oh, no. We were all queued up. David Friedberg (00:21:40): Chamak was having a moment. He was awake daydream about the future and not thinking about the line. Chamath Palihapitiya (00:21:45): I was taking the number of shares of SpaceX, I know, and multiplying it by a billion trillion Billy and julia dollars for sure. Jason Calacanis (00:21:54): Wow. Yeah. The rest of us are thinking about humanity, America, inspiring people, and Shabbat's got his like little calculator out. Chamath Palihapitiya (00:22:01): I would have like a babushka of planes, a plane. Jason Calacanis (00:22:06): Right to ruin the moment. Making about you. Oh my god. What your winter ride. Brain, David Sirens. And it said, we open I did have a business question David Sacks (00:22:27): about how this Starship impacts Starling. Jason Calacanis (00:22:32): Very simple. There's a graphic online you can find on the SpaceX YouTube channel. And they show the starship. And it literally looks like a goddamn pez dispenser shooting out the next version of StarLink. And these are, you know, without I don't want to speak about any specifics, but you can watch it spit them out. You can put out more and they're obviously gonna be more powerful. And if you have seen the size of the satellite, I have StarLink at both houses, the ski house, and my main house as a backup. It's getting scary how good it is. And if you look at the size of them and again, I don't want to speak about any future products. It's not my place. But if you see the size getting smaller, there's 1 or 2 things that we all know about technology. Cheaper, faster, better, smaller. I would just say if you're if you're a fan of StarLink, just keep those words in mind. David Sacks (00:23:28): Yeah. Jason Calacanis (00:23:29): It's gonna be pretty amazing what StarLink's gonna be able to do. David Sacks (00:23:32): Yeah. I thought that maybe I read this somewhere that starship can carry 600 plus satellites. Whereas the previous top of the line rocket, the Falcon 9, could only carry was it like 50 or something? Or Yeah. Jason Calacanis (00:23:46): I think it'd be a little less. Yeah. That's, like, 30 40. So So David Sacks (00:23:49): you're talking about 20 times the number of satellites can go up. Jason Calacanis (00:23:52): And at a lower expense? David Sacks (00:23:54): Yeah. And I guess SpaceX has gotten permission from the FCC to put up about 12000 startling satellites. So you could do that, you know, with, I guess, it's just 20, you know, 20 missions. Chamath Palihapitiya (00:24:10): The big disruption is gonna happen by the end of 20 26 because This next generation set of licenses, spectrum licenses that the FCC sold came with the condition that you had to launch satellite capacity by the end of 20 26, I think. Otherwise, you lose it. Jason Calacanis (00:24:28): Or you Chamath Palihapitiya (00:24:28): have to do your first launch, I think, by the end of 20 22. Any of the point is that the only company that actually has the capability to build and to launch is SpaceX. So they have a complete monopoly and because they're advantaging their own solution, It puts everybody else behind the 8 ball. So, not only will they probably offer the best global internet connectivity at every single natural point in the world that you could be which is going to be a really big leap. They're going to do it, Jason, as you said, at a throughput that's going to surprise people. And it's also going to render every other existing provider in a really difficult situation who's like what is their alternative? You can't launch with ULA because they're inconsistent. You can't launch with blue origin because they're inconsistent. You can't lock with the Europeans in general because they're inconsistent. SpaceX is the only solution, but then SpaceX is just going to advantage themselves. And there's nothing illegal about that. So you're gonna be left with a bunch of these existing telecommunications companies in a really difficult spot. In the next couple years. So it's gonna be really dynamic space, I think. Very much worth paying attention Jason Calacanis (00:25:33): to. Elon sentences regards to the all in community Staying a nap. Man has not slept in the last couple of days. I guess it's taking a while to start a nap right now, so hopefully. We'll have them on in a in a future episode very quickly. David Sacks (00:25:48): Where are you chipping from, Jake? Just curious. Where are you chipping from there? Jason Calacanis (00:25:51): I'm at Starbase. And there are little tiny combs and Elon lent us 1 to to stay in here. And, yeah, it's good It's just inspiring to be here. It's been it's been a great experience. And I've been this is I've been here a couple of times, and the scale of the factory, the ships, and just over the last like they said, the last I've been here a couple of times maybe 3 or 4 years ago. It it really is growing exponentially. And and the other really positive thing is people are driving Again, back to the enthusiasm in the public. And what you don't see mirrored in the press, which I think was really astute point, Saks. I I met a guy who gave me a ride in the golf cart. I I was I was late to a meeting. The guy says, hey. Are you going somewhere? And I said, because I was literally running down the street trying to catch a flight. And the guy drives me in his golf court. And I and I say, hey. He says, hey. You're here for the lunch? I said, yeah. David Friedberg (00:26:47): I'm here for the lunch. Jason Calacanis (00:26:48): He says, so am I? I said, can I ask you oh, do you work for SpaceX? He says, no. I'm just a fan of Elon. I'm a fan of SpaceX. And I said, can I ask who you drove from? So I drove 19 hours to somewhere in Houston or something. He drove 19 hours to come here to spend the week to see the launch. And the crowds here have gotten bigger and bigger And there's hundreds of people. It's I think they're called San padre Island over here. They're a little beach community. Kinda like like a Las Vegas on the beach or arena or New Orleans, and and they're just lined up there with cameras. These are Americans. Just Americans in RVs, in cars, setting up cameras to see history happen. And it's it's it really is truly inspiring. These are just soft of the earth, normal folk. This isn't the the media. This isn't, like, affluent people or necessarily. They're just Americans who who who are inspired. And and then that's, I think, what all entrepreneurs who hear these stories about what's going on down here, you'll overestimate what you can do in a year. You're gonna underestimate what you can do in 10. And I think that's you know, we all know you loan pretty well here and have watched this journey. They're they're cooking with oil. They're moving fast. And the iteration process is extraordinary. And they're making everything here. And it's Americans making everything. The tiles, I remember being here 3 years ago, and Elon and I 2 in the morning. We're walking through the factory while where they were working 24 hours a day trying to figure out the tiles on Starship to get it back in. And they were making the titles themselves and and just trying to figure out that for me. That that's the level of detail that's occurring here. And as Gavin said, there's a thousand different things changing on each iteration of this. So more great stuff to come. I I believe. Yeah. Chamath Palihapitiya (00:28:34): Has been another episode of Phil Hamuth mentions his relationship with Elon. Thanks everybody for tuning in. David Friedberg (00:28:39): Yeah. Exactly. This is something Jason Calacanis (00:28:42): No. I mean, what am I supposed to do? You know? Like I I'm sorry that my friend, you know, started a rocketship company. I don't apologize for it. You guys doing great stuff in the world as well. So do we wanna talk about AI? Do we wanna go to this tiger marking down their Where would you like to go, gentlemen? We can talk about the Fox settlement with Dominion. That was something you and I talked about last I'd love to get your opinion on that. They paid 7 87000000 dollars in this settlement for defamation. It didn't go to trial. You are hoping it would go to trial. How do you feel I mean and and this is an extraordinarily large settlement. So David Sacks (00:29:19): Yeah. Jason Calacanis (00:29:19): But what are your what are your thoughts on this? You wanted to see this go to the man go to the Supreme Court and maybe see the laws in the United States change eventually. Catch us up on your reaction to this ginormous find. David Sacks (00:29:29): Yeah. Yeah. It was Jason Calacanis (00:29:30): a big speeding ticket. Yeah? David Sacks (00:29:32): Yeah. Well, it's funny you you call it a speeding ticket because when I saw this, it reminded me of seen at the beginning of apocalypse now, where Martin Sheen says that charging a man with murder in this place is like handing out speeding tickets at the Indianapolis 500. I mean, the analogy here is that the media is so dishonest whether at CNN or MissionBC or the New York times. I mean, Jason Calacanis (00:29:54): if they're David Sacks (00:29:55): constantly inaccurate or or whatever and Jason Calacanis (00:29:58): you know, so Still defected Fox. David Sacks (00:30:00): So for this 1 network to get a fine of like 800000000 like, pretty pretty incredible. I mean, they should be handing out a lot more of these in my in my view, not just to Fox. But, yeah, look, I would like to see to that end. I would like to see the standard in your time source is seldom revised by the supreme court. The standard is actual malice. So you have to prove not just that the press told a lie, but that there was malice behind it. And that's what this trial would have been about and Fox So What Jason Calacanis (00:30:29): should have changed too? Yeah. I think that change 2. What would be a better standard in your mind? David Sacks (00:30:37): I think that if the media makes a mistake, they should have to correct it. And I would say the correction needs to be at the same level that they publicized the original story. So if they make a mistake, if it's untruthful and it damages someone's reputation and they refuse to post a correction, then I think they should be liable. That seems fair to me. Jason Calacanis (00:30:59): If you were to put something on page a 1, if you were to give it 5 minutes at the start of a show on whether it's Rachel Maddo or Tucker, whoever makes the mistake, it could be anybody. If they made the mistake in the first 5 minutes top of the show, they don't get to bury down the website. They don't get to bury down page 7. Gotta say it upfront. Hey, listen. We made a mistake. David Sacks (00:31:17): Correct. Jason Calacanis (00:31:18): Here's the mistake. Correct. Yeah. I think it's reasonable. David Sacks (00:31:20): Corrections should get same mobile. Let's see as the original story. And by the way, if they correct it, that would be like a safe harbor. But if they refuse and they publish a lie and it damages somebody, then they should be liable for that. Jason Calacanis (00:31:32): I think there should also be some That's David Sacks (00:31:34): what I think. But Jason Calacanis (00:31:35): Yeah. I'm an agreement with that because they there is the trick in journalism to bury the correction. And and there's another trick that I think needs to be looked at. It's a little more nuanced, which is somebody makes a mistake. Or an accusation in a in a in a publication. And then the next publication says, oh, the New York Times, Fox News, CNN said this. But they don't check it themselves. So they're using another publication as like a proxy to kinda give them some level of protection. I think they should to on a firsthand basis. David Sacks (00:32:07): Right. No. That's the game they play. You're right. So they start with a super shady source. Yeah. That, you know, it just attributes it to some sort of anonymous source. Then the second most shady publication quotes that 1 and then the third most shady quotes that and then it kinda goes to the whole food chain. Yeah. So you're right. Reposting something in the echo chamber because other publications are doing it. You're right. That should not be protected. They just have to do their own sourcing, basically. Jason Calacanis (00:32:34): Yeah. Or just some base level of fact checking if you and now if if you called it Fox opinion, It's slightly different than calling at Fox News. So maybe the part of this is branding a Jamath or Freeberg, Germany thoughts on this. Chamath Palihapitiya (00:32:46): Just in general, Fox, I think has only 4000000000 of cash, so they just spent 20 some odd percent of it paying this off. And if I were a shareholder, the question I would ask we actually make enough money to justify having to pay almost 800000000 dollars of our cash balance? The answer is probably no. And this is the first of a bunch of lawsuits that they have The next 1, which is, I think, is like SmartOMatic, which is another voting machine company. That's an even bigger lawsuit actually. That's a 2 and a half billion dollar lawsuit. And so it's could it be the same outcome and another settlement? And so now all of a sudden you would deplete half their cash, all for a lie to do what? At some point, some smart business governance needs to kick in over at Fox and to realize that this stuff just doesn't make economic sense. Maybe they thought it made political and ratings sense, but You can't justify that when it costs 2000000000 dollars. Jason Calacanis (00:33:43): There is a concept here, I think, Saxx, that is particularly interesting in Finland. When you get a speeding ticket, speaking of speeding tickets, your speeding ticket is proportional to your net worth. And so these NHL players who like to speed and a a Nokia executive. It was given the equivalent and this is a bit excessive of a hundred and 3000 dollar fine for going 45 into 30 zone. On its motorcycle. And an NHL player got a 39000 dollar fine 2 years earlier. I I think that this is part of the problem is sometimes fines don't match the crime and or they're not proportional enough for the person to feel them. And so then we kind of can joke. That's their speeding tickets. 1 very rich person said to me, you know, when they would they I'd watch them park it, you know, incredibly illegally in a small town. And I said, you're gonna get a pretty serious ticket. That's in it's a pretty gnarly spot to be parking. And they said, oh, you mean the VIP parking? Charge. And I was like, yeah. That kinda sucks, but okay. So there there might be some concept here of a proportional fine. And I I think the EU is starting to work on that as well because you know, big tech was ignoring. David Friedberg (00:34:54): This Chamath Palihapitiya (00:34:54): is gonna embolden a lot of people to take matters into their own hands and sue some of these media companies if the lie is egregious enough and it negatively impacts them enough. I think it would embolden a lot of folks. So Saks is right that up until now, most folks haven't done anything about this, but If you feel like the media has really wronged you in a meaningful way, there's probably also now a lot of Private equity organizations that would do the lawsuit finance or hedge funds that would do the lawsuit finance. Oh, yeah. Like like Jason Calacanis (00:35:27): Joe did. Yeah. Chamath Palihapitiya (00:35:28): Like you're free rolling it. Right? So you get 1 of these folks to pay it. They get 50 percent of the gains. You get 25 percent. The lawyers get 25 percent and you go and you litigate. I'm sure that you'll see more not less because this fine is really big. And again, we don't know the end of all of these 20 20 election hoax shenanigans because this is the first not the last of these. David Sacks (00:35:49): I do think it's a really big number. I mean I did want the case to go to all these courts so they could revise New York Times versus Sullivan. But III do wonder about the size of this settlement here. It's just it seems extraordinary. Jason Calacanis (00:36:03): They paid it David Sacks (00:36:04): There was a interest Jason Calacanis (00:36:05): It's a settlement. David Sacks (00:36:06): Yeah. They they voluntarily agreed to do it. Yeah. Absolutely. So so in any event, look, I I hope Tremoth is right that this actually incentivizes more actions against media companies because I think their feet need to be held to the fire, and they need to do a better job publishing the truth. There was an interesting thread by a Twitter poster called Cannecoa. Do I don't know if you guys saw this, where he posted an hour of footage by Democrats and Democratic groups and more democrat leading political science experts questioning whether voting machines could be hacked. Basically, this This idea that voting machines could be act is not is not an allegation that is unique to Fox. So apparently, there's evidence that Fox knew it was bogus, so they definitely should not have run with it. But I do wonder hey, why why shouldn't other people be liable for this too? Jason Calacanis (00:37:05): Well, I mean, the question is I think those internal text messages between the hosts who knowingly knew it was false and then we're doing it. I think that's why they they took that settlement because 800000000 or whatever or so is a lot less than 1.4 or 1.5. And so speculation that maybe David Sacks (00:37:21): Clearly, they got some bad discovery. They got some discovery problems. Yeah. But I'm just saying that. Jason Calacanis (00:37:25): Problems. Yeah. David Sacks (00:37:26): These allegations about electronic voting machines being hackable or rigged. This seems like an allegation that's been made. Jason Calacanis (00:37:33): Well, that's actually interesting. David Sacks (00:37:35): Not just in 20 20, but it's been made multiple times by whichever side loses. Jason Calacanis (00:37:40): Yes. David Sacks (00:37:40): And so I would wonder why more parties aren't liable for this. By the Jason Calacanis (00:37:44): way, I never David Sacks (00:37:45): I never bought into I never bought into those allegations. I said so at the time. I thought they were bogus. I thought the whole Sydney Powell thing, you know, the release like cracking or whatever was ridiculous. So I don't feel too bad for Fox or anything like that, but it seems to me, like I'm saying, they're they're not the only ones speeding here. There's a lot of people who need to be get speeding tickets. Jason Calacanis (00:38:05): Yeah. There is a road map for the press to learn from this and to get better. Right? Like to maybe take to heart that maybe the public now is looking at them and assuming the trust in media is at an all time low. David Friedberg (00:38:18): Alex Jones got fined a billion dollars. Right? Jason Calacanis (00:38:21): It's a judgment. Judgment. Yeah. A judgment, the Fox thing's a settlement. Right? He got a judgment of over a billion from multiple courts. David Friedberg (00:38:28): Yeah. So he said a bunch of stuff that, you know, was in court provable to be false and then he kind of restated it and he got, you know, this massive fine. I think there's an interesting question here on how far this goes with respect to, you know, maybe it invites the lawsuits like you guys say, where there's things that are more on the on the line, and then we really start to have kind of a a tough set of conversations that it maybe there are things that are factually debatable, arguable, opinionated where they were true at a certain point, and then you didn't really have evidence to disprove it. What are you allowed to say? Are you only allowed to say things that you've proven or things that haven't been disproven? And that becomes a pretty tough set of conversations. And what I think might be interesting from here If so much of media over time gets replaced by chat and AI aggregating lots of different information synthesizing that and making representations back to us, and that becomes our primary source of call it news or quote media in the future. What happens when those models or the synthesis of data or the source of the data leads to a statement that has a similar sort of descent around whether or not it's true or not. And that you really end up kind of ending up in a pretty cloudy environment, you know, by starting this process. Jason Calacanis (00:39:46): I think as a very insightful moment, we'll get to you in a minute. I just coming as a coming from a journalism background myself and then becoming a commentator, there really needs to be 3 or 4 very simple things that the media needs to do. Number 1, more fact checking. And number 2, less anonymous sources. They were like too much anonymous sources. And then there needs to be very clear delineation between what is a fact and what is an opinion. And the public is trying to sort this out. Is it Fox News as an opinion? And what you're saying is this an opinion or is this a fact? Did you do journalism or did you just have an opinion? Is Rachel Mato an opinion? Or did she actually have a journalist check these facts? And I think this is where self policing and maybe rebuilding their rebuilding trust is on the media. It is now the news and the media's job to rebuild trust And if not, they're gonna get more fines. But let's get into, I think, some of the stuff we're seeing with AI. We had talked on this show before Many times about the corpus of data under which these models are being built, a Reddit announced plans to start charging companies that use its data to train AI models. The co founder, Steve Hoffman, who came back after Condenas, Nast, had bought Reddit and then sold her back to the founders. And paradoxically, I believe Sam Ballman has a major investment in Reddit. He said, more than any other place on the Internet, Reddit is home for authentic conversations. There's a lot of stuff on the site that you'd only ever say in therapy a a or never at all. A lot of people use pseudonyms, obviously. And the Reddit corpus of data is incredibly valuable, but we don't need to give all that value to some of the largest companies in the world for free, crawling Reddit, generating revenue and not returning any of the value to our users or something, we have a problem with. It's a good time for us to tighten things up. Your thoughts, Shamath, on what we talked about, 2 different episodes. Maybe we'll play a drop a clip in here, Nick, if you want to, and post. Jason Calacanis (00:41:39): It's gonna be the large data sets Corea, Yelp, the App Store reviews, Amazon's reviews. So there are large corpuses of data that you would need, like Craig's list has famously never allowed anybody to scrape Craigslist. The amount of data inside Craig's list as but 1 example of a dataset would be extraordinary to build chat GPT on. Chat TPT is not allowed to because you as you brought up robots dot TST last week, there's gonna need to be an a I dot TXT. Are you allowed to use my data set in a I and under and how will I be compensated for it? Will the rights to the data? Will will Google just say to Kora, hey, we'll give you a billion dollars a year for this data set if you don't ship it to anybody else. Chamath Palihapitiya (00:42:19): They should. Jason Calacanis (00:42:20): Chumov, those were our previous discussions that we just played. What do you think? Chamath Palihapitiya (00:42:24): It's so incredible. We are witnessing such an important moment for Silicon Valley but frankly how the world works and It's just everything is changing. That's what I'm just in awe about that we talked about this and we were basically spitballing something 2 or 3 months ago. And not but 60 or 90 days later, these things come to pass, right? We talk about something in 1 week and then 14 days later, it's completely upended like how impressed Saks was about plugins and then plugins were rendered useless and somewhat impotent 2 weeks later by auto GPTs. It's just so profound, I think what's going on. So Google today announced that they're going to merge 2 organizations that I thought were so orthogonal to each other. Disperate? Brain and deep mind, the cultures just seem so totally different. But now they're merging those 2 things together. Something that I thought would never happen, they did it. So all these competitive pressures are so real. I was in LA for the breakthrough prize. I was flying home with somebody on Saturday I won't say who it is, but they are right at the bleeding edge of a lot of this AI stuff. And they let go a third of their company, replace it with an agent. Within 6 weeks of training it. So how is this not going to affect everybody else? I guess is maybe the bigger question. And then I go back to what I said last week which is that We've talked about a lot of the positive things and I think it's important to make sure that people understand that there are a bunch of non trivial negative things and I think I shared 1 on Twitter, which was around this company that used an AI model to build a library of 40000 toxic compounds that could kill all kinds of numbers of humans. So there's all kinds of really, really tough things going on right now that I think. To me means it's the moment where I have the least sense of how to do my job. And so I've tried to kind of like put a pin in everything and just go back to learning mode. It's a bit humbling is what you're saying. Like, incredibly humbly. Jason Calacanis (00:44:37): The entire rule book, even for us as capital allocators, company formation, it's has you it has you chum off wondering. Chamath Palihapitiya (00:44:44): Even as it has Jason Calacanis (00:44:45): to do this. Chamath Palihapitiya (00:44:45): As a CEO, I'm like, should I be using models to do parts of the workflow inside of my business? Inside the portfolio companies that we're invested in, am I supposed to go into the board meeting now on Monday and say, hey, XYZ person just did. 1, 2, and 3 and cut OpEx by a third. Do I demand the CEO do that? Do I force change if they don't do it? Do I say So, I don't I don't exactly know what to do. Jason Calacanis (00:45:16): The carousel is spinning increasingly faster, and we're all on it. David Friedberg (00:45:20): I'll just say a general point. Which I kinda made at this event today. It feels like the pace of change is so high that you're kind of in a dust storm, you don't really know where you're going to end up. So, it's very hard to sit as an investor right now and say, I'm going to pick these things because 2 weeks later you just don't know whether that path even exists anymore because the dust storm washes it away, you know, blows it away. And I think that there will as a result, there will be a lot of money lost by investors, Jason Calacanis (00:45:51): by companies building in this David Friedberg (00:45:55): space. Net net, the index for investing in like dot com companies the majority, a large amount of money was lost during that era. But from that era also emerged a handful of winners. And those winners ended up creating extraordinary value. I think we're at a point in time right now where we could see 10 times the value generated. In this phase of technology advancement than we saw during the Internet and the advancement of the Internet. And if that is true, I think you'll end up seeing certainly the same thing happen, which is the index will lose money. But the few winners will accrue such extraordinary gains. The problem is, you can't deterministically pick those winners today Jason Calacanis (00:46:40): -- Chamath Palihapitiya (00:46:41): Totally. Jason Calacanis (00:46:41): -- David Friedberg (00:46:41): because of the dust storm problem. You just don't know the path. Totally. So if you were to meet Jeff Bezos versus some CEO of some dot com selling pet stuff back in 19 95 to 97. 94 to 97. When you have recognized Jeff Bezos was gonna stand out, would you have recognized Larry and Sergey were gonna stand out? Would you have recognized Bill Gates was gonna stand out or Zuck? At the end of the day, this is harder than it has ever been in terms of predicting a technology cycle. But what we still know to be true is that the capital will be allocated within a company. The operations will be run, managed, and driven and led by an individual or set of individuals. And that's effectively what I think a lot of investing in the cycle is gonna come down to. We're all gonna sit here and pontificate and intellectually masturbate ourselves to some you know, genius, you know, path that we think is gonna evolve. And at the end of the day, most of it won't turn out to be true and that path won't be real because this is such a dynamical system right now. There are so many feedback loops. 1 thing makes 1 step change and it changes every other step. But what we still know is that great leaders can lead, you know, and especially coming out of this this Elon discussion and seeing the extraordinary achievements he he's delivered particularly today. I think that's maybe what a lot of early stage venture is gonna shift to in AI. It's really you know, finding great people and and and I'll tell you 1 thing for sure and I was kinda commenting on this earlier today was I really think a lot of series c and later companies, and I know we're gonna talk about this implosion discussion later. So many of those companies have a valuation that's less than their preference stack. And as a result, those founders that work there and those employees that are there are getting their equity wiped out. David Friedberg (00:48:23): They'll have to get Jason Calacanis (00:48:24): a refresher. Do you give me a favor Freeberg? Can you just explain what that means technically to the audience? David Friedberg (00:48:28): So when you raise money into a startup, the investors that give you that money, that invest that money, it's effectively a loan. You owe them that money back first before your shares get paid out in the future. So if the company ends up being worth less than the money that they've invested, they get the money first. And ultimately, if the company goes public or gets sold, they can convert their what are called preferred shares into common shares and participate. So even though you only quote sold 20 percent of your company for, let's say, 200000000 dollars, that 200000000 dollars actually has to get paid first. So now you've raised this 200000000 dollars, the investors the company is now repriced because the market has come down by 80 percent. And investors are saying, hey, your company is now worth a hundred and 75000000. Your company is now worth less than what you owe the prior the preferred investors. And if it's worth less than what you owe, which I think is the case for over 70 or 80 percent of series c and layer companies. You know, we can kinda yeah. And and this but this number comes from what I shared a few months ago, which is that 70 percent of publicly traded companies that went public in 3 years are trading below the cash that they've raised. So if you translate that on a 1 to 1 basis to the private market, you know, and these, by the way, were the best companies, actually got public. So in the private market, you've got to assume that something in that late stage market is on the order of 70 80 percent. Crit is worth less than their preference stack. So a lot of those employees are gonna run. Those founders don't wanna go work for the VCs when they get recapped and get offered a 4 percent Jason Calacanis (00:50:02): Where are they gonna go? Because Amit it looks like David Friedberg (00:50:04): they're gonna start AI companies. I think that's -- Fantastic. Yeah. -- and I think that's what's really shifting it right now. That's kind of a big dynamic, is a lot of these, I'm calling them zombie corns. Are gonna see this kind of mass exodus of talent and a lot of the investors that don't know how to price stuff and don't want to deal with recaps in the late stage are diverting their attention to seed and a and early stuff. And so there's both a a rush of talent and a rush of capital to this kind of very early stage. And so, we'll create this massively bubbleific, you know, index of AI stuff, but some number of these things with some great leaders will emerge and will accrue extraordinary value across many industries. Chamath Palihapitiya (00:50:43): I really agree with a lot of what you're saying. The thing to keep in mind is that the problem with The use of auto GPTs as an example is that the order of magnitude of capital that you need has now just gone down. Yeah. Yeah. Instead of a 10000000 dollars Series A. So, we used to, you know, people in the height were doing 30000000 dollars and 40000000 dollars Series A's into crazy, very bubbly ideas and NFTs and all this other stuff. That's idiotic today. Because a 2 or 3 person company can now do the work of 20 to 30 people. And the amount of capital that they need is really Their salaries plus the cost of renting some GPUs on your favorite pick your cloud. And so all of a sudden, you can get huge amounts of progress in weeks and months with hundreds of thousands or low millions of dollars. So if you've raised all of a sudden a 5000000000 dollar fund because you were trying to do late stage deals, And now all of a sudden, said, well, wait, we'll just pivot to early stage. But what are you gonna do? Find the next 30 person company that's not gonna work because you have to know how to write 500000 to million dollar checks with 2 or 3 people and really help them and really understand their technical ability to execute. Right? Yeah. But then it also quickly becomes a thing where maybe you're better off just doing 500 of these 2 and 3 person teams. We tried this experiment 7 years ago. This thing called capital as a service where we were doing automated investing. I don't know if you guys remember this, but it was like some machine learning that we did on all of our portfolio companies, and all somebody had to do was fill out a form and send us some metrics and we would have a machined decision, right? So humans would not be allowed to make the investment decision. The problem that we ran into was there was a lot of great companies around the world. But the administrative burden of supporting 500 companies was unbelievably large. And complicated. Oh, you have a company in Indonesia. Well, there's another company in South Korea, and here's a company in, you know Oh, they're racing Jason Calacanis (00:52:52): a new round. They have to go. Approval. They've got to do this. It's signatures. I mean, it's hard to scale. Chamath Palihapitiya (00:52:57): Yeah. So the VC, which is a software like people have a artisanal business, all of a sudden becomes misfactored. Right? So you actually need to be highly automated and use software yourself in order to put 503 person teams on the field. So this is what I mean by it's really I think Friedberg's use of the term dust storm is a really good 1. It extremely, extremely confusing what to do. And if you have large amounts of money, that may actually now what used to be a real differentiator. And a key to success may actually become an impediment because Jason Calacanis (00:53:37): you are forced Chamath Palihapitiya (00:53:39): to do business in a classical way That has changed frankly in the last 90 days. Jason Calacanis (00:53:45): What do you think, snacks? David Sacks (00:53:46): What's the question? Because we're touching a lot of different things here. Jason Calacanis (00:53:49): Do you feel like this is a dust storm and it's murky and it's just hard to place bets as a capital allocator Because something comes out the next day or 48 hours later or the next week that takes the previous idea and wipes it out and then and how do you scale and be capital efficient. David Sacks (00:54:07): Well, we're at the early stages of a huge new wave, and I think that creates a lot of opportunity. So yeah, you've gotta basically separate what's really interesting from the fool's gold. There's definitely gonna be a lot of that. But at least there's a reason now to believe that, say, dozens of unicorns could be created in the next couple of years So before, we were getting kinda long in the tooth on some of these text cycles. I mean, cloud, social mobile. I mean, there was a reason to believe that those earlier waves had sort of played out that the big winners had already been determined and maybe there wouldn't be too many more big winners in those spaces. But now we have a whole new catalyst for founders to do all sorts of new things. And so I tend to think that's super exciting, you know, we're in the early stages. And I do think there will be dozens of new unicorns minted in various aspects of AI. It could be in AI infrastructure. You know, whether you're seeing now, there's a lot of funding that's gone into vector databases or platforms for creating agents, or it could be in a I co pilots, basically, that tackle various professional categories and create a co pilot for coders or co pilot for doctors or lawyers or architects. I think there's gonna be potentially multiple unicorns created in in those categories. I think there's gonna be SaaS software products that were just good before, but now will actually be great because the incorporation of APIs from you know, AI foundation models where we'll just turbocharge the capabilities. And so there's a whole bunch of SaaS products that I think become newly interesting and and better. They go from being vitamins to painkillers. So you know, we're looking in all those categories, and I think we'll end up making some bets. But there's also gonna be a lot of companies that are flashes in the pan or undermined. You know, there'll be SaaS companies that actually become less attractive because of disruption from AI. But look, I think all of this this Maelstrom is great for an investor. I mean, if you're gonna spray and pray, it's not good. David Sacks (00:56:18): You gotta be selective about where you take your shots. But I think this is the most exciting environment we've been in in a number of years. Right. I mean, it makes me wanna go to work every day and see Jason Calacanis (00:56:30): It's so funny to say that, Saxx, because I literally am looking for an office space in San Mateo to start like doing the incubator in person again. And on Monday, I'm having 60 companies come to San Francisco and will be at my attorney's office and we're having, like, a a founder university with just all these new startups that we invested in to just hang out for a day. The enthusiasm right now is amazing and what's really unique is the developers who had 3 out of 7 companies they interviewed with offer them a hundred 50 or 250 k packages, RSUs, whatever. Now there's no offer from Facebook. There's no Apple. There's no Twitter. There's no Google or Microsoft offer coming in. To be the backstop against starting a company. So what are they doing? They're saying, you know what? I got 2 friends who got laid off. I got 1 friend who's halfway out the door. Let's just start something. Let's just start something. Who can give me a hundred k? Who can give me 500 k? And it's it's it's so invigorating to see the talented people, not people who've learned how to, you know, hack a pitch deck together and tell a story, but people were actually coding and making MVPs. It's it's truly exhilarating right now the amount of 2 and 3 person startups I'm seeing. Yeah. And so while you'll have this and it's and it's an incredible I've never seen this amount of destruction and creation occurring simultaneously. I love this zombie once. Concept. You have 1 half of your portfolio coming apart at the seams. Layoffs, reducing their targets. While people are coming in the door, With products that are absolutely awe inspiring, just give 1 example, I had a company come out of our founder of University, give them 25000 dollars to incorporate. A developer and his brother who's a screenplay writer. They're taking screenplay writing software, Sachs. So you'll appreciate this having produced 2 amazing movies. Thank you for smoking, and the Dolly film is called David Sacks (00:58:24): Dolly land. David Friedberg (00:58:25): Dolly land? David Sacks (00:58:27): Yeah. Coming out in 2 months. Jason Calacanis (00:58:29): Coming out 2 months. Congratulations to Me award winning Oscar winning producer. I said win an Oscar this time. He's you know you know the screenplay writing tools that have existed. You're like, what word processors with formatting. What they're doing is they're saying, hey, write some dialogue. And then you can have dialogue and say, hey, make it a little snappier, make it a little tarantino ish, make it a little more, you know, sorkin ish, and then make a storyboard with, you know, stable diffusion. And I was like, well, this is the genius idea. I mean, it's unbelievable. Of course, I'll give you 25000 dollars for your incorporation. And then they're coming to the accelerating and give another hundred k. And in every single piece of software Chamath Palihapitiya (00:59:09): Will that company in success ever raised 25 or 30000000 dollars, do you No. Jason Calacanis (00:59:13): I think there'll be 12 people. I think there'll be 12 people. I'll I'll I'll give them But 20 5KA hundred Chamath Palihapitiya (00:59:19): k, and then a million. Our industry raises a hundred billion dollars a year on the premise that each company before they become a unicorn will absorb between 500 and a billion dollars. Yeah. Jason Calacanis (00:59:30): No. I'm gonna own 20 percent 10 to 20 percent of the company for low millions, and we'll see. Chamath Palihapitiya (00:59:35): Mid Journey is 12 people and no, it's totally bootstrapped. Like, I guess what I'm saying is, because in the world of AI, so much work is done for you for free This is why I'm asking maybe we will have to change how we do business. David Sacks (00:59:50): On the Hollywood example, there's about to be a writers guild strike And they may wanna think twice about that because this is not the time where you want to be encouraging the industry to find alternatives to writers. Jason Calacanis (01:00:02): Yeah. You wanna get back in the office and you wanna say, hey, can I is there any other work I can do this weekend, boss? Did you see the news about BuzzFeed today? They had won a pulitzer. They just shut down BuzzFeed News, the entire news division gone. Another 15 percent gone. The layoffs, and then there was a report this week that Zuckerberg's doing his third round of layoffs, another 4000 people. That puts him at 24000 -- David Sacks (01:00:26): Yeah. Jason Calacanis (01:00:26): -- with a hiring freeze. David Sacks (01:00:27): So the way I describe the current funding environment is it's a tale of 2 cities. It's the best of times. It's the worst of times. If you're a hot AI startup that's able to tap into the zeitgeist, that's doing something that's perceived as cutting edge or relevant, there's a strong why now and you're early, you know, you're early stage. You're able to raise money for that. The spigot has turned back on. There's a lot of funding. For those types of early stage startups. But if you're a series c stage startup, you're a late stage startup with a it's called a pre AI model. This spigot is just turned off completely. I mean, let's look at that chart from French base where the amount of series c funding has gone from something like 10000000000 a quarter last year to like 0. I mean Chamath Palihapitiya (01:01:16): This chart David Sacks (01:01:16): was partly Jason Calacanis (01:01:17): I thought this was an error in the chart. Look at this chart. Everybody's seriously funding to US companies by quarter. David Sacks (01:01:24): There is just no gross stage funding. It's completely dried up. I mean, look at that. Jason Calacanis (01:01:30): I mean, it got cut in half and then it got cut in half again and then it just flatlined. And so when you see this, is your thesis? Let me answer this next. Is your thesis here that people aren't trying to raise money and they're just busy cutting their companies down to a smaller team size and they'll come back out in the second half of the year or that anybody with that amount of dry powder is out of the game now. David Sacks (01:01:52): Yeah. I think that we're in this awkward stage where the the companies who raise money and call it 20 20 and 20 21, all those valuations are obsolete. And you've had a lot of late stage players leave the game or they're in the penalty box or in time out. I mean, look Tiger, for example. The single most active funder at late stage is trying to figure out how much to mark down his portfolio. So I just think that a lot of the funding has dried up. There this idea that there's tons of dry powder sitting out there, I think, is a myth. Or maybe it's there, but there's no willingness employ it. The valuations are all out of whack, and VCs generally would rather lead around in a new start up with a fresh cap table, then in a cap table, they got a restructure because no 1 Jason Calacanis (01:02:38): really wants to do structure. This is what we about a year ago to a month. I asked you to point blank. Would you if they cut the valuation and, you know, they redid everything and said, listen, we understand this is reality. Would you get involved in cut a check? And you're like, I don't want to deal with that kind of Too hard. Too hard bucket for you. David Sacks (01:02:57): Yeah. Jason Calacanis (01:02:57): And so now once again a year 6 months or a year after we talk about this, it has now manifested. This is metastasized into Chamath Palihapitiya (01:03:05): It hasn't even started. I think we are -- I Jason Calacanis (01:03:07): know they get started. Chamath Palihapitiya (01:03:08): Okay. I think we're still being really precious like the Tiger thing was very important because they are in many ways at the front of the line in terms of the number of companies they've touched the amount of capital they've written. And because they're in the middle of a very large fund raise, their need to mark to market quite accurately so that their existing LPs know what they're signing up for in this next fund. So they're the ones that have the most incentive to move the marks, but it still leaves an entire industry of folks that don't necessarily need to do that because they have whether it's dry powder or that dry powder is real or not, the point is that there's a lot of money that hasn't been deployed And so again, I've asked this question before. What is their incentive to really mark their book down 50 percent? They don't have an incentive. Why would they do that? They would rather let it decay down naturally. I'll give you an example of this. David Friedberg (01:04:01): Or do converts that keep it alive, that basically allow them to delay. Chamath Palihapitiya (01:04:05): Yeah. Any but even the Convert market freebird, that was hot for about 6 months and then it just Sure. Nobody's doing that stuff either. But I'll give you 1 example. There's a very good company. That we are investors in along with every kind of big blue chip Tier 1, Mucketymuck organization, we did the A and they stacked on afterwards. And when we thought about what our valuation should be, we did something we got to a number which was a third of what the mark was. And we're like, well, if we think the price is 2 thirds off, we should probably just sell it now. And we actually went and got some term sheets from some private equity firms to validate it. And what they, it was incredible, they both independently got to that same number. And so while the deal was closing, we went through the end of quarter, we moved the mark down and we pointed to that valuation. And we said, look, this is what these 2 other very well known firms have said, this is what we've said, so this is what our new valuation is and we're trying to sell it and we ended up selling it. But every other organization didn't touch their valuation, that valuation. Jason Calacanis (01:05:10): The private equity folks, maybe you could explain to the audience why the private equity folks are such a good backstop in terms of valuation versus say venture capitalists? Chamath Palihapitiya (01:05:19): Well, I think that venture capitalists we tend to be glass half full And we are conditioned, especially if you do your job well, to be smart buyers of deep out of the money options. What does that mean? It's like when you meet an entrepreneur and you give them 3 or 4000000 bucks or 500000 dollars or whatever, at some nominal valuation. You're not trying to get your money back. You're trying to figure out whether he is a Zuck or an Elon or Larry Page and all of a sudden you get 1000x on your money back. Right? So, we are buying these deep out of the money options. Most of them don't hit But when they do they can just have these crazy statistical outlier outcomes. So we're trying to buy the future and we tend to be believers of what can go right. Private equity has refined a very powerful toolkit of putting 2 or 3 orders of magnitude of the money we put into companies to work. On the premise that the glass is actually half empty, And what can go wrong and how do we mitigate that risk? And so, they tend to be much more sober I think in my experience dealing with them And what is the true valuation of a business? What are the upsides of a business? What are the warts on a business? They really kind of see the truth, the ground truth much better than VCs do in general? Jason Calacanis (01:06:40): Because they're closer to public markets and they're they flip these things every 24 years. Their margins are much thinner. Chamath Palihapitiya (01:06:46): They're trying to make 1.51 0.6 x their money. 2 x is a huge outcome for them. Jason Calacanis (01:06:51): Yes. So they have a much more sober version of reality. A bunch of this Tiger stuff -- David Sacks (01:06:58): Yeah. Jason Calacanis (01:06:58): -- got released and but, I mean, their their funds underwater. Just like Masayoshi Son's fund is underwater. And it's gonna be years of pain and suffering to get out from under this. And so again, I think Saks now that with tale of 2 cities. Anybody else wanna chime on this before we talk a little bit about -- Well, for us. -- our friend of the pod, Brian Armstrong. Yeah. Chamath Palihapitiya (01:07:18): I've been I've been investing off balance sheet since 20 18 and 6 months ago we started to explore whether we should raise a fund. And I think it was like 2 weeks ago, we brought the senior partners and me and the 5 other guys that that run our business and we said we're not going to raise a fund. And the biggest reason is this dynamic, which is that, you know, we have dollars of private assets. I don't actually know what they're really worth, but I have a responsibility to try to get as much of that capital out And so I thought the best thing to do is just to take our time and try to figure it out because I have way more questions and answers right now. And that's really the first time since I've moved to Silicon Valley where I've had that sensation. Is a sensation humility? I think it's like Jason Calacanis (01:08:08): I mean, I'm joking, but it is it is for somebody like you who has done so well placing bets. Deeply homes. Chamath Palihapitiya (01:08:14): Deeply home. Jason Calacanis (01:08:14): I mean, I'm I I say this a joke, but I mean it as, like, a point of self awareness for you because listen, you've placed some amazing bets whether it's the Warriors or Facebook. Or Bitcoin or whatever or Slack or whatever. Chamath Palihapitiya (01:08:26): I don't know whether I should be writing 200000000 dollar checks or 200000 dollar checks and I don't know whether I should be doing that sort of as an incubator actually Jason Calacanis (01:08:35): -- Chamath Palihapitiya (01:08:36): Yeah. -- as an accelerator? That's Jason Calacanis (01:08:37): what I'm doing. Chamath Palihapitiya (01:08:38): Or actually just as a series a detached investor. So I don't know, I'm trying to take the time to figure it out. And my thought was, if I raise a fund right now, I could barely stand the idea of me putting money to work right now of my own capital without any answers, but then the idea of, like, having a bunch of sovereign wealth funds and folks that were ready to work with us I don't know. I just I Jason Calacanis (01:09:00): just to Not Chamath Palihapitiya (01:09:01): the right time. Jason Calacanis (01:09:01): Just to tell you my fundraising story. I I'm I'm publicly raising watch fund 4. I get over 50000000 dollars in just you know, high net worth individuals, you know, and and family offices who are interested, immediately close, I don't know, 26, 27, 28 of it. And then I'm gonna go out on the road to meet with LPS. And Silicon Valley Bank blows up. Nobody can take a meeting that month. Right? And so now, thank the Lord, I said I'm going to have a 1 year window to raise the fund. And I talked to some old school VCs, Fred Wilson Bill Ghrli. These people would take a year to raise a fund. It used to be or I'm sorry, in the height of this bubble, you tell me, Saks the quickest you close 1 of the the Craft Funds's But I was hearing people saying they're they're closing funds within 2 or 3 months. I think we're back to it. It's a year on the road to close a fund. What what's your ex grant sex sentence and you're an all star. So I'm curious, my shortest to the reality. Yeah. David Sacks (01:09:54): I think it's just depends on your situation, to be honest. But But I I think the important thing for founders to know is just that the way that late stage financing is dried up is very real. I'll give you, like, 2 data points just this week. So I got my first notification from a portfolio company. This is a company I invested in before craft. It's not a craft investment. For my personal investments, and they're doing a pay to play around. You know what that is? Jason Calacanis (01:10:21): Explain of that is. That means pain. David Sacks (01:10:23): Yeah. Yeah. So basically, the way it works is they say they're gonna raise 20000000 dollars. Well, by the way, they said they went out to raise growth funding. Weren't able to get a term sheet from anybody. And so -- No takers. Jason Calacanis (01:10:36): -- David Sacks (01:10:36): no takers. And this is a good product. I mean, a lot of startups use this product I think they're ARRs in the 20 something million, maybe 30 something million. Mhmm. It's not like doubling year over year, it's growing like let's call it 50 percent year over year. This is a company that should've been able to raise money. I don't understand why they weren't. Maybe because they're burning too much money. So instead of cutting costs the way they should, they're doing like 20000000 dollar pay to play around. And what that means is that everybody is an investor in the company, you either have to do your prorated of the 20000000 or you get diluted 10 to 1. Jason Calacanis (01:11:10): If you had 10 percent of the company, you have to put in 2000000 dollars or your 10 percent of the company is now 1 percent. David Sacks (01:11:16): No. It'd be it'd be more because you would look at, let's say, 50 percent of the companies owned by the investors and the other 50 percent is common just to take round numbers. Jason Calacanis (01:11:26): Sure. Okay. If David Sacks (01:11:27): you own 10 percent of the company, that would actually be 20 percent. Jason Calacanis (01:11:29): Of the preferred Yes. Yeah. The employees are not buying shares in this. David Sacks (01:11:32): 20 percent of the of the of the 24000000. Jason Calacanis (01:11:35): Is 8000000. David Sacks (01:11:36): Yeah. Exactly. So basically, you have to Jason Calacanis (01:11:39): 1 percent. David Sacks (01:11:41): Right. Right. So, basically, it's almost like a capital call. Where you just have to pony up more money in order to preserve your ownership in the company. David Friedberg (01:11:49): Pinion. That's the way. If it makes you feel better It's David Sacks (01:11:51): punitive, but -- Yeah. -- super punitive. Chamath Palihapitiya (01:11:53): I had 1 of those just happened to me as well. And I was just like, we'll put in the bare minimum because like the thing that it puts you in, it paints you in a corner where you're like, well, I've been with this thing 8 or 9 years, is this the moment to basically lose all of that compounding or value or work that you put in or seen their team do and it's just a really tough position. Jason Calacanis (01:12:16): Right? Yeah. David Sacks (01:12:17): So look, I'm not on the board. So I don't know what reasoning went into this. But What they should be sending out to all the shareholders is, look, here are all of our metrics. Here's our burn. You know, here's the steps we took to reduce our burn. I don't really like the idea of having to do essentially a capital call from your existing investors when you haven't reduced your own burden. I mean, why can't the company operate at break even if you're at 30 something million of ARR, you should be able to operate you may not wanna operate at break even, but you -- But Chamath Palihapitiya (01:12:45): there should Jason Calacanis (01:12:45): -- -- David Sacks (01:12:45): should be able to. Chamath Palihapitiya (01:12:46): Saks, this is what I mean. I'll tell you after we stop taping who it was that told me this about their company, but they were basically able to let go a third of their workforce. By moving a bunch of work to models. Jason Calacanis (01:12:58): And let me guess. The founders get to keep their shares or they get re upped in this whole meshugna? Chamath Palihapitiya (01:13:04): No. No. No. But wait, hold on. Can we Can I just finish this question? So the point is, like, if you can cut OpEx by a third by using all of these new AI models and GPTs and auto GPTs, what are you as a board member or shareholder supposed to do? And also as a founder, don't you have to go there first before you start to ask people for more money? And why aren't people doing that first? Much more aggressively. And so -- Right. Jason Calacanis (01:13:31): -- Chamath Palihapitiya (01:13:31): this is what doesn't make any sense to me. David Sacks (01:13:32): That's exactly my point is what steps were taken to cut costs before you just went to the investors to pony up more money That's what I wanna know. If they actually did that work and this is like the last money they need. Okay. Then, you know, I'll pony up my share of it. Chamath Palihapitiya (01:13:46): And by the way, we need investors David Friedberg (01:13:48): that need Chamath Palihapitiya (01:13:48): No, we don't. And we need investors to be much more aggressive in holding folks accountable because these examples need to be better discussed Well, if XYZ company was able to do it, why aren't you able to do it? And if it's because we're not technically capable, Matt, that's maybe a plausible answer, but even that reason will go away in few months, I suspect. But if it's that we just have such institutional rot, we're incapable of doing it. Well then you might as well just not write the check because that company is going to get undercut by some new white sheet version of that business that doesn't have any of these impediments that Jason Calacanis (01:14:22): just use Man management has told you a bunch of Eichamab. In a way Chamab and Sachs management has told you they're incapable of running this business, this concern in a in in a thoughtful way I had this happen to us as well. And the the the question I have use access, in these situations where this pay to play happens, you basically, everybody gets wiped out except those who who play. But the founders and the management team always seem to get re upped in their hole because the new investor doesn't want the management team not incentivize. So in these kind of situations, it's kind of like the management team gets to reboot the cap table and they don't get penalized. I don't David Sacks (01:14:57): know. I I should I don't I don't have those details yet. No. Remember, I didn't lead around. I was just an angel investor in the company. So I checked with 1 of the VC firms that led around and I'm like, are you gonna do this? And they said probably not. Jason Calacanis (01:15:11): You David Sacks (01:15:11): know? And so like the round might fail. I mean, they can make it as punitive as they want. But if the shareholders don't believe that the company has fixed its problems, they're not gonna pony up the money. Jason Calacanis (01:15:23): Let's get free of breaking. Yeah. David Friedberg (01:15:25): Yeah. I think 1 of the problems that a lot of folks are facing is it becomes less about the fundamental value of a business in a lot of these conversations, as you guys know, and it's becoming a lot more about who will fund the next round if the company is still burning money. And so you're making a social market bet not a bet on the team or the business or the value. It's that there's someone else that's gonna lead the next round. And this is fundamentally why He's called the greater fool. Chamath Palihapitiya (01:15:56): That's called David Friedberg (01:15:57): the greater full theory. Look, I mean, historically, we wouldn't call him a fool if it's just about progress. Towards profitability. But right now, there's so much trepidation. It's almost like a self fulfilling prophecy that there's so much trepidation in doing late stage rounds. That no 1 wants to be the last guy in. Because you're not sure if the next guy's gonna be there to fund the last round to get to profitability. And that's why half of biotechs that are public are trading below cash. Because historically, the way biotech companies which is a really good point and example of this, they make progress to hit milestones And then the next round of capital comes in. They make progress with milestones. Next round of capital comes in. And then eventually, you get, you know, phase 3 approvals and you go sell the company or or whatever be profitable, and they almost always get acquired. And in the case of other technology companies, if the business has to do 3 or 4 things, it's got 3 or 4 milestones that have to hit. In your case, Saks, it might be that they gotta get to 50000000 ARR. And they gotta get, you know, the certain cost function down in the business. And if they can do those 2 things and the business profitable. But it's gonna take us around a 20 We'll get the first chunk down, and then another round of 30 to get the last chunk done. And no 1 knows if the next 30 is gonna be there. And that's really where a lot of these market dynamics are falling apart. That there's historically been a model in the market of hit milestones, next round shows up, hit milestones, next round shows up. And now, no 1 knows if the next round will show up. So no 1 wants to fund this round, particularly where there's high burden and it requires a lot of capital to make that bet. So the social, you know, the self fulfilling problem, the social market bet right now is, you know, it it self fulfills and and we're, you know, we're sitting here kind of spinning our thumbs, wondering if the next guy's gonna find it. Chamath Palihapitiya (01:17:36): Do you think that only 10 or 15 percent of companies have now properly reset value? Like you said 70 percent of these unicorns are actually zombie corns? David Friedberg (01:17:47): Yeah, that's why I think the number from I don't know I don't know Tiger's book at all. But when I hear numbers like 20 percent, for a for a fully invested mature book that invested during the the peak of the cycle, it doesn't sound right that it's 20 percent It sounds like it should be a lot lower like Chamath Palihapitiya (01:18:04): the I think that 20 percent, Jason Calacanis (01:18:05): by the way, you know, comes after, like, 2 other smaller write downs. So they might be Yeah. So I wanna I wanna talk David Friedberg (01:18:11): about Tiger. I don't wanna talk about Tiger. I think, like, sure. The statistic of 70 percent of these public companies trading below their cash, the the cash that they've burnt, that they've raised. In their lifetime. And again, just for anyone that's an analyst at home, trying to figure out how we get to that number, you look at retained earnings on the balance sheet. And so the cumulative retained earnings tells you, if it's negative, it tells you how much money they've burnt over their lifetime. And that tells you effectively how much money has been invested. So when you look at the enterprise value, which is the market cap minus the cash they have today, you get their enterprise value. If their enterprise value is less than their cumulative retained earnings, it means that they're currently worth less than the money they've spent. And that's a statistic that is a fact right now in public markets in technology gone public in the last 3 years. And then you compare that to private markets I don't think we've seen a 70 percent write down yet or, you know, 70 percent of these things being worth less than the cash. So it's, you know, it's yeah, I think you're right. Jamatkin is probably another hammer to drop. David Sacks (01:19:10): Multiple hammers. Multiple hammers. Multiple hammers. Before we move on to just for topics, so I think 1 of the interesting differences in opinion in in Silicon Valley is the way that founders and VC see the nature of the relationship. And I've been on both sides of this. I've been on the side of being a founder, and I've been on the side of being a VC. And What you'll see is that VCs always talk about it as a partnership, but a lot of founders will talk about it as if the money is just a commodity. And frankly, when everything's up and to the right and everything's going great and you're in a bull market and you can just keep raising money indefinitely because there's always someone willing to lead the next round. Then the money is a commodity. But when you're in a in a down market and all of a sudden, there is no market. Like, you can't raise your next round, All of a sudden, it is a partnership because you've got to go to your investors and ask them to do something that they may not otherwise wanna do. This was purely a transactional decision as opposed to a relationship, they might not wanna fund your next round. And you're asking them to say, no. Actually, believe in our long term relationship. And I think that, you know, this is a type of environment when you find out it is more of a partnership. It should have Jason Calacanis (01:20:21): always been. It should have always been. David Sacks (01:20:22): It should have been, but it but it wasn't. And look, I don't know what happened with that other company. And all of a sudden, I get a notification out of the blue. Well, I wanna understand thinking that went into that before, you know, I'm just gonna basically Jason Calacanis (01:20:35): Well, this is where trust comes this is where trust comes in. Right? And, like, I think in a 0 interest rate environment, you know, there there's no need for trust. Just this cash flashing around. Just grab whoever the latest person in town is who wants to drop a couple of bags you just take 1 of their David Sacks (01:20:49): bags a little bit. The most important thing to me, like what make it a partnership is for me to know that the founders have done everything in their power, to reduce costs and put the company on the right trajectory before going out and basically issuing capital calls to the investors. I wanna know they've done that work. Jason Calacanis (01:21:03): Alright. Listen Freberg, I know you had to go. Take care of sultan of Science. I'll just wrap up with the other boys here with 1 piece of breaking news. Stack Overflow says they will join the parade of data providers like Reddit and Twitter that will require permission and payment to use their datasets, and Stack Overflow has a lot of answers to a lot of developer's questions in there. I was just curious to get your thoughts. SEC obviously sent to Wells known as we talked about this before to Brian Armstrong of Coinbase. He said he's thinking about or considering relocating out of the US if the regulatory clarity does not improve. Crypto's dead in America. It is dead in America. Chamath Palihapitiya (01:21:42): Crypto is dead in America. I mean, now you had Gensler even blaming the banking crisis on crypto. So the United States authorities have firmly pointed their guns at crypto. Jason Calacanis (01:21:56): Is it scape goat, or was it a fuck around find out 1 for crypto in your mind or a little bit of both? Chamath Palihapitiya (01:22:04): I I don't know. I just think that they were probably the ones that were the most threatening to the establishment. Jason Calacanis (01:22:11): Okay. Chamath Palihapitiya (01:22:11): And they were the ones that in fairness to the regulators did push the boundaries more than any other sector of the startup economy. And yeah. So now they're paying the price for them. The bill has come due for them. Jason Calacanis (01:22:24): Saks, is it a fuck around find out moment? Is it protecting the American dollar somewhere in between or incompetence on regulators' part. David Sacks (01:22:33): The more I think about it, the more I think it's probably not a coincidence. That you're seeing all these concerns about de dollarization at the same time they're cracking down on crypto. So look, there were a bunch of crypto companies that might have done shady things, but I think we all agree that Coinbase was not 1 of them. Coinbase was the gold standard in terms of doing everything right and they've just Chamath Palihapitiya (01:22:52): Agreed David Sacks (01:22:52): Asked over and over again for a regulatory framework. They're just, like, tell us how to operate and we'll do it. So I think Jamath is right that they're effectively banning in the United States are gonna drive all these companies overseas, which is terrible for American innovation. I don't know exactly where blockchain and crypto are gonna go from here, but I think that we should find that out in America. You know, we don't want that innovation going offshore. Chamath Palihapitiya (01:23:17): You bring up a really good point too. It's just like coin based played by the rules, stood in line, tried to do the right things it seems at every step along the way, right? Everything from board composition to executive composition to how they tried to interact with the regulators yet they were probably the furthest away from getting a license, the 1 that came the closest was the 1 that was the most fraudulent, which is FTS. Jason Calacanis (01:23:42): Yeah. It was fascinating. Chamath Palihapitiya (01:23:44): How is that even possible? That I mean in David Sacks (01:23:47): Because he he had skills in gaming the system. Jason Calacanis (01:23:50): Yeah. He's splashy, cashy. Splashy cashy. David Sacks (01:23:52): Well, he he pro need up large amounts of money because it wasn't his money. So it was easy for him to make huge donations. But he knew how to play the game. To quote SBF, he said this is the dumb game we woke Western's play. We say the right shible s or everyone likes us. That's the game he was playing, which is my my whole concern about if we jump the gun on regulating AI too quickly, it'll turn into another, you know, woke game that everyone's gonna play. So Jason Calacanis (01:24:19): Here's here's how the world works. Regulate yourself, behave yourself, act in the interest of consumers, or get regulated or smashed. And I think we've we've gone over this. We talked about it in fact last week. Whether in the movie industry, crypto, AI, regulate yourself, behave properly. Don't push the boundaries too far. You can bend the rules, but you don't wanna break them. Chamath Palihapitiya (01:24:41): I think to regulate yourself. You use the MPAA I don't think that's the right example. I think if you're gonna regulate yourself, look at the tobacco industry. They tried to regulate themselves, but what they did was just lie to maximize profit in an area that was much less benign than movies and content. Maybe you could have some lascivious content in a movie or a video game or an album, but that was a lot less harmful than smoking, which not just impacted the smoke error, but it turned out the secondhand smoker as well or the secondhand smoke. So it touched everybody. Right? You could be in a restaurant, not smoke and yet have years of your life taken. So, I think that the self regulation for areas that impact everybody independent of whether you participate in the system or not. Is where you have to look for good examples, Jason. And I'm not sure there are many good examples of software handling those kinds of systems. Jason Calacanis (01:25:33): I mean, I like your workshopping it here. I mean, some restaurants would have a smoking section and a non smoking section before there was regulation. Right? And I think if crypto had just thought had been more thoughtful about, hey, which tokens, NFT projects, we're gonna support which ones we're not going to. Maybe they would have avoided a little bit of this. I'm not sure. You know, it's it's it's hindsight's 20 20 here, but a little more regulation. David Sacks (01:25:57): I don't think those smoking, nonsmoking sections work too well. The smoke went all over the place. Jason Calacanis (01:26:01): It does. You remember coming out of a bar and you woke up the next day and your clothes smell like smoke? No. No. You'd have Chamath Palihapitiya (01:26:07): to you'd have to take a shower when you went to a bar or a restaurant or a park. You would have to come home, take a shower because you're a hair -- Don't feel. Jason Calacanis (01:26:16): -- Chamath Palihapitiya (01:26:16): the smell of smoke. You couldn't sleep Jason Calacanis (01:26:18): at a bed. Then your bed had to get to change your sheets David Sacks (01:26:20): discussed Remember when you went on a you went on a commercial flight, then a smoking section, a non smoking Chamath Palihapitiya (01:26:25): section. It's Jason Calacanis (01:26:26): a tomb. David Sacks (01:26:27): It's a tomb. The smoke gets all Chamath Palihapitiya (01:26:28): over the Jason Calacanis (01:26:29): place. No. You know you're on the wrong airline when they have the welded shut ashtrays. They used to have an ashtray in every seat in the armrest was his social security. By the Chamath Palihapitiya (01:26:41): way, a friend a friend of mine, this is like such a throwback, but a friend of mine, well known guy that, you know, I'll say the name you can bleep it out. David Friedberg (01:26:49): Nick, please, can we fill David Sacks (01:26:51): up that Jason Calacanis (01:26:51): out, please? Very important. We don't wanna Chamath Palihapitiya (01:26:53): Is a notorious smoker and so I flown with him David Sacks (01:26:56): that's the worst. Chamath Palihapitiya (01:26:58): And we get in there on his plane and then he shuts the door and I'm like, smells a little odd in here, smells a little clovey and almost like, 7 hours. I'm gonna have to Jason Calacanis (01:27:10): be in this To me, what are the positive sides get out? Do the pilots get Azure, hey, I mean, how do you compensate there? I mean, this is not a turbo prop he's on. He can't crack the window. Chamath Palihapitiya (01:27:20): No. It's global. It's a huge global. It was Yeah. Jason Calacanis (01:27:24): At least it has 3 cabins. Chamath Palihapitiya (01:27:25): You could go to the back cabin. I haven't felt so sick. Jason Calacanis (01:27:28): I mean It's the worst. Chamath Palihapitiya (01:27:30): Is this the app smoking Antonio Gracias (01:27:31): is the worst. Chamath Palihapitiya (01:27:32): Worst smoking is the worst. Jason Calacanis (01:27:33): Alright. Well, we didn't so long to the sultan of silence as as a science rather there. Pulling update here sucks. I don't mean to poke the bear. I know it's a rough week with the Fox News news. Bring it up. Bring it David Sacks (01:27:47): up. No. Go for it. Jason Calacanis (01:27:49): Quick polling update between putting Ron I'm sorry. DeSantis and Trump? It's not Chamath Palihapitiya (01:27:54): gonna happen. DeSantis is not happening. Jason Calacanis (01:27:56): In late March news of Trump's indictment boosted him over DeSantis by 26 percentage points. Among Republicans and Republican leading independents. But earlier this week, the same polls show that Trump's lead shrunk by 10 points in the last 2 weeks to just a 16 point advantage, which is still significant. But there's more a University of New Hampshire Survey Center poll. I don't know if any of these polls are reasonable or not. It seems like call people on the phone. I don't know who's got a landline. Release Wednesday showed a 20 point DeSantis's deficit What's going on here, Saks? Did your boy peeked too early? David Sacks (01:28:35): No. I don't think so. If you if you look at the Republican primary field, Justantis is the only person who's got a shot other than Trump. You look at Nikki Haley, she's pulling in the 345 percent range. All the others are at 1 or 2 percent, there's not a candidate other than DeSantis that has over 5 percent. So in my view, this is Trump to San us race. Now what you saw is that when Alvin Brag pressed charges and indicted Trump, it created a lot of sympathy for Trump among Republicans. Effectively, what happened is Republicans registered their displeasure with Alvin Braack tag by indicating support for Trump. Jason Calacanis (01:29:13): Let's go. David Sacks (01:29:13): And that's that's what you'd expect to happen and a lot of people speculated that might be the purpose of Brax's prosecution is to make Trump the candidate. So we knew that was happening. But I think this this new poll that you just mentioned is really interesting because it shows that that sugar high of Trump's whole ratings was a temporary bounce and it's coming down somewhat. And so, you know, what you saw actually is that this huge pole bounce that Trump got is somewhat normalizing. Now there's no question that DeSantis is running behind Trump and he's got his work cut out for him if he's gonna upset Trump is the nominee, but this thing is just getting started. I mean, DeSantis isn't even formally announced yet. And remember, we're still very, very early in this race. Primary battle that this most reminds me of would be Obama versus Hillary in 2007. And at this time, in 2007, Hillary had a huge advantage over Obama. She was considered the favorite. She was considered the the 1 who couldn't lose. And it was Obama that pulled off a huge upset. And he did it by out fundraising her, out hustling her, especially in building organization and some of those early primary states. And then he eventually created a narrative that it was time to turn the page. But he didn't do that until much later in the year, much closer to the the primary. The first republican primary here is not till February. So there's plenty of time here. And I you know, we'll see what happens. Jason Calacanis (01:30:44): So, Ratin, it does. Chamath Palihapitiya (01:30:45): I think Nikki Haley is gonna win the Republican nomination. Jason Calacanis (01:30:48): Right. More people Chamath Palihapitiya (01:30:49): The more people Here here's the thing. Jason Calacanis (01:30:51): The number Chamath Palihapitiya (01:30:53): of people that I've told being, the most impressive moment with DeSantis was before they met him. The second most impressive moment was their first meeting. And then it just falls off a cliff where he becomes more and more unimpressive, the more and more time you Jason Calacanis (01:31:08): spend with this guy. Hey, Nikki Haley. Come on the pond. Chamath Palihapitiya (01:31:11): Nick Haley's the opposite. David Sacks (01:31:13): Nikki Haley announced that in all of q 1, in all of q 1, she raised 5000000 dollars. Extremely unimpressive. You're probably 20 percent of that, Jamoth. Jason Calacanis (01:31:21): Hey, Nikki helly. Come on the pod. We'll double it. David Sacks (01:31:24): How much am I making at least 5000000 was was you? Jason Calacanis (01:31:28): Listen. 0. I can Chamath Palihapitiya (01:31:31): say definitively, you said Q10. Jason Calacanis (01:31:34): Here we go. 0. Well, let me ask a question here because I'm not informed on it, but you you are a master strategist here. 1600 rated chess player or sax? David Sacks (01:31:46): That's not that good. Jason Calacanis (01:31:48): Wow. I mean, it's double 800. We're out of you. You're killing me in 27 moves on average. The Santos is fighting with Disney over and over again. He's getting a little involved in the LG GPT, Hue, everything. He just seems to be getting involved in the culture wars. Is that like a primary strategy? And then he moves to the center? When he comes to the general? And do you agree with this general fighting with Disney and the culture war stuff? Strige are we talking strategically not your personal opinion on these issues? I know that you're a very tolerant person. David Sacks (01:32:22): Yeah. So I think this is an issue that we're for him, certainly in the republican primary, but I also think it's gonna work for him in the general. And you have to remember that this bill that they're fighting over was a parental rights bill. That basically, it gave parents the right to know what their kids were being taught in schools, and it basically prohibited the teaching of this sort of gender ideology in in schools. And I think most parents are on board with that. Now Jason Calacanis (01:32:48): -- David Sacks (01:32:48): Yeah. -- let me go look. He didn't go yeah, he didn't go look in a pickup fight with Disney. Disney then got involved and took the side, calling this, don't say gay bill, which I think disfaction is not true. The bill doesn't mention, you know, gay or homosexuality or anything like that. It was really about this trans issue. And Disney got involved, and this was Bob Chapek, and Bob Chapek lost his job, and Eiger came in. And Eiger has said that he he had basically lectured that Disney employees saying that we need to stay out of politics and we need to respect our audience's views. So by think that it was Disney who kind of interfered. I think this is overall plate to to Sansa's benefit. And and look, the problem for Disney they may win the battle over this or that tax benefit that they're fighting over, but they've lost the war over this issue because parents used to be able to trust that they could just pop their kid down in front of a Disney movie or a Disney show. Like Disney was like the babysitter, and they just want a hundred percent absolutely trusted all Disney content. And if you look at polling now, Disney's brand, it used to have like a NPS of like in the fifties. Is now in the single digits because let's call it half the country's parents, the more Republican ones, don't fully trust Disney's content and programming anymore. Jason Calacanis (01:34:05): Really? That Chamath Palihapitiya (01:34:06): is a huge Yeah. Jason Calacanis (01:34:07): I trust Disney implicitly. Whoa. David Sacks (01:34:09): What could Jason Calacanis (01:34:10): they ever do that subjection? I've never seen anything objectionable. David Sacks (01:34:13): A lot of parents are questioning what content Disney might be putting in their their recent programming. Obviously, we're not talking about the stuff that we grew up on. So look, whether you believe that is a problem or not, what I'm saying is this has been a brand disaster for Disney getting involved with DeSantis this way. They should really I think just trying to patch this thing up. I don't understand the benefit. It's a Jason Calacanis (01:34:36): bad look for both it's a bad look for both people. David Sacks (01:34:39): Yeah. Well, III understand the benefit for DeSantis. I don't understand the benefit for Disney. If I were them, I'd be trying to patch this up. Jason Calacanis (01:34:46): I I think there is a really valid discussion to be had about representation in movies and all that stuff, and I'm I'm very pro that. The the thing I think all parents agree is we should just at least know what's being taught to our kids and we can have a thoughtful discussion about it. There seems to be some small group of people that thinks we should hide from parents what they're actually getting what's being taught. And I I find that's very strange. I think just a little bit of like parentcy and what's being taught in schools is and obviously that nobody should be disagreeing on it. To Saksis point, Chamath Palihapitiya (01:35:21): I think it was Pew that put out a study recently. It is the most polarizing issue amongst Americans where Democrats and Republicans are literally on opposite sides of the spectrum. Jason Calacanis (01:35:32): It's gonna be a big issue. Chamath Palihapitiya (01:35:33): On the whole trans issue. Now despite the polarization, in terms of the quantity of the number of people, it's actually an important issue for a small percentage of both sides. So it's a highly complicated political dynamic in America. Jason Calacanis (01:35:48): Yeah. Very Chamath Palihapitiya (01:35:48): So this is where DeSantis clearly has taken the approach that not only is this important to the base to win the nomination but it's gonna scale into the general. And it could very well be, but it's a it's a very divisive issue. Jason Calacanis (01:36:00): Yeah. I wish people were given a little bit more consideration, and maybe they could have I I feel like maybe we're covering this issue too much. You know, I've heard some other folks in the community saying like maybe people could be given a little bit of their privacy and, like, to handle these things. David Sacks (01:36:18): I think you're right, out in the sense. I think this issue has become a lightning rod. And and whenever you have a lightning rod issue, the amount of attention paid to it, it seems disproportionate to the attention on that issue. However, I would say that this is a lightning rod for a larger issue, which is the quality of education in this country -- -- which I think is shockingly bad and it's bad because of the decline of standards. They're getting rid of advanced math. They're getting rid of Jason Calacanis (01:36:47): grades, test David Sacks (01:36:48): taking, competition. And and and the schools are run by these unions who are managing a own benefit, not for the benefit of the students. And look, there is a significant ideological component that's crept into these schools as well. So look, I think that overall I think that when you get into the general, you have to up level the issue and talk about it in broader terms that every kid in our country deserves a high quality non ideological education. I think if you can do that, you will get 70, 80 percent of the public on your side on this issue. Jason Calacanis (01:37:19): Yeah. I feel like David Friedberg (01:37:20): yeah. It's I think that's right. Yeah. Jason Calacanis (01:37:22): I I think we can all agree on that Democrats Republicans everybody in between. If you're a parent, you you're not looking for an ideological battle at school. You're looking for math, science, technology, history, creativity, you know. There's a there's a whole bunch of other things that we should be really focused on. Alright. Listen to spend another amazing episode of the all in podcast. Do people going to the episode 01:25 meetups? You can type in all in meetups. Our team over there, we have super fans are doing it in over 50 cities. The day this comes out, so you may miss it, but you sign up for the next 1. I'll be phoning in and and zooming into them. So for the fans, are you crazy lunatics getting together? Have a great time. Have a great time and tweet it and at mention us on Twitter. For the sultan of science, the rain man, the dictator. I am the world's greatest moderator. We'll see you next time. Bye bye. Bye bye. We'll let your winners ride. Rainman David salads. We open source it to the fans, and they've just gone crazy with it. Mom US, I sweet Chamath Palihapitiya (01:38:43): we should all just get a room have 1 big huge order because they're all just useless. It's like it's like sexual tension that they just need to release them out. Jason Calacanis (01:38:51): What? You're the big b. Where David Sacks (01:38:54): are your feet? Jason Calacanis (01:38:56): What? Where did you get murky's artifacts?