SEC 剑指加密巨头，红杉一分为三，LIV 与 PGA 合并，梅西签下划时代合约

David Friedberg (00:00:00): Hey, everybody. Welcome to the all in podcast. I'm your moderator for the week, Dave Friedberg. Not the world's greatest moderator. This show is gonna be a bit of a shortened version. At the back end of the pod today, we actually are gonna show some Q and A from Jason's Launch Summit, which he held in Napa Valley this week. Great event. Thanks for having us up there. Jay Cal. Thanks for coming. great speakers, great content, and we did a live q and a for the all in pod with the audience there, which will transition to about halfway through through the show today. Jake, Al, thanks for your hospitality. Oh, yeah. Thanks for throwing up the the fun birthday party. the poker night. We had a great time. David Sacks (00:00:41): I still don't know what I was doing there. Jason Calacanis (00:00:43): You were meeting some of your LPs where you'd never met before. David Sacks (00:00:46): It was like a dog and pony show. Jakeel was using us as some sort of dog money should've raised money. David Friedberg (00:00:51): Zach, did you really have LPs there that you had never met? David Sacks (00:00:54): No. Yes. Hold on a second. I had one LP there who I have definitely met many times for. Jason Calacanis (00:01:00): K. She told us she'd never met you. She wanted an introduction. So maybe she's getting into the spirit of all in and joking with you. But you had a 3 hour meeting with one of your own pizzas I heard. David Sacks (00:01:08): She's talking about the next day. Jason Calacanis (00:01:09): She actually said she had, like, 2 or 3 hours. David Friedberg (00:01:11): Shamal, are you with us today? What's going on? Jason Calacanis (00:01:12): You there, buddy? Shamalff is very drunk, by the way. He brought up his own He started Margaritas 2 o'clock. Well, David Friedberg (00:01:17): he was drunk by the time we got there. Why? He showed up late drinking tomorrow. He was day drinking margaritas in the sun. Jason Calacanis (00:01:23): Oh, David Friedberg (00:01:23): And then we showed up, and he was, like, falling asleep by the time we were done with the stage, I said. I love you guys. Yeah. Jason Calacanis (00:01:28): Black to the show. David Friedberg (00:01:30): I'm here. Jason Calacanis (00:01:33): What Waters Wide. Rainman, David Sachs. And I said, David Sacks (00:01:40): open source it to the fans and make discoveries. Chamath Palihapitiya (00:01:48): By the way, politics is one of these incredible things where you see the meanest people come out of the woodwork when you even feign support for somebody that they don't support. Now that it's out there that Saxx and I are doing this fundraiser for RFK, Oh, yeah? If you look at Twitter, some of, like, the the Democratic surrogates are out just smacking me and sacks around. And David Friedberg (00:02:17): -- Chamath Palihapitiya (00:02:17): Ah. -- it's incredibly the Jason Calacanis (00:02:18): biggest -- These people David Sacks (00:02:18): are, like, the biggest impostor Chamath Palihapitiya (00:02:19): loser Jason Calacanis (00:02:22): bounds. Chamath Palihapitiya (00:02:24): They've never literally done anything in their whole life. And then they show up and then they just like how dare you work and help build a company? How dare you help build another company? How dare you help now fund other companies? I am a talking mouthpiece who's never done anything except work and want administration as a speech And now I think you guys suck balls. It's like give me a break. David Friedberg (00:02:47): So you are you a little kind of emotional about that? Today? Jason Calacanis (00:02:50): I I Chamath Palihapitiya (00:02:50): actually I love critiques, actually, because I think, like, you can learn a lot from critiques, but then when mids just spew I just get annoyed. I think mid should not be allowed to talk. Yeah. Well That's just my thought. Jason Calacanis (00:03:04): There goes half the Internet. Sex, are your Republican David Friedberg (00:03:08): cohort friends upset about you hosting a fundraiser for RFK? David Sacks (00:03:12): I've got none of that. Chamath Palihapitiya (00:03:14): None of that. Jason Calacanis (00:03:15): That's interesting. What's your take on that? David Friedberg (00:03:17): yeah, do Republicans generally think that it's a good thing if Arcade junior gets the Democratic nomination because he will be easily beatable? I don't David Sacks (00:03:24): think they were thinking that way. I think that there's a respect for RFK Junior among many Republicans because he's speaking out on issues that they care about, like I've talked about. He's denouncing censorship. He's in favor of free speech. He's in favor of civil liberties. And, you know, not the this massive surveillance state. He's speaking out in favor of peace instead of war. He's speaking out on the border. He had this amazing video David Friedberg (00:03:49): -- Jason Calacanis (00:03:49): That was great. David Friedberg (00:03:50): -- David Sacks (00:03:50): a couple of days ago where he went Jason Calacanis (00:03:51): to the David Sacks (00:03:51): border in Yuma, Arizona. at 2 AM in the morning in David Friedberg (00:03:55): the morning. Yeah. David Sacks (00:03:56): And he shows he shows where the border wall ends. And where the border wall ends, the line begins. and people from all over the world are just entering through this hole in the wall in a never ending stream of people And then they get loaded onto buses provided by the government, and then they get handed a a ticket to supposedly appear in court to resolve their case. in 3 or 4 years, and they're never heard from again, and they're dispersed all over the country. What I don't understand is if the federal government can get us act together enough, to provide buses, why can't they get their act together enough to plug the hole in the wall? It's absurd. This is like an act of sabotage against the United States. And so he's there just pointing this out. I've never seen anything like this before. David Friedberg (00:04:42): It was interesting as a as a Democrat to do this because that's typically kind of a Republican point. Right? And some of the commentary made about RFK Junior, I think it was in the New York Times this week or someone that covered his candidacy. 1 of the big media companies highlighted how Jason Calacanis (00:05:00): much of his agenda seems to be a Republican David Friedberg (00:05:00): talking point agenda. Does that Sound accurate to Jason Calacanis (00:05:07): you or is this just kind of David Sacks (00:05:08): a -- Even most people in the country who identify as Democrats would be against having an open border. that's what we're talking about. When there's a hole in the wall and people can just start forming a line. And then once they get through the line, they're literally desperate. Hold on. They're basically distributed throughout the country on buses. I don't think most people in the country, even Democrats would support that. But what he's violating here is the press blackout on what's really going on at the border. So you're right. Like, the only Jason Calacanis (00:05:36): He went there. Yeah. David Friedberg (00:05:37): But other Republican talking points, so the points around the vaccine, The printer David Sacks (00:05:44): now -- -- republican. Well, he's expressed, obviously, concerns about vaccines preceding the COVID vaccine. I don't know whether he's right about that or not. not willing to say whether he's right or wrong about that because I just don't know enough. I think he's definitely right about the inefficacy of the COVID vaccine. We've talked about this before. Even Bill Gates admits now, that the vaccine doesn't work. It's too short acting, and it doesn't hold up against variants. Chamath Palihapitiya (00:06:05): It's not a vaccine. Let's just let's call it what it was. David Friedberg (00:06:08): -- David Sacks (00:06:08): prevent you from getting the Chamath Palihapitiya (00:06:09): It's a death reduction shot. It was a revenue grab Jason Calacanis (00:06:12): by big pharma plastered Chamath Palihapitiya (00:06:12): with non scientific thinking from a bunch of people who should have known better. David Friedberg (00:06:21): Wow. Okay. I think you just got our -- Jason Calacanis (00:06:23): No. -- so much music channels there. No. Chamath Palihapitiya (00:06:25): You're true. David Sacks (00:06:26): But this is just the truth. Hold on. What Mazda said is just like the factual reality, and and you can't get that from the mainstream media. Like, there's no reevaluation. There's no appraisal. They control what we see in here, it's like Provda level in terms of the propaganda. And that's why I think RFK Junior is so interesting is because he is blowing up what the mainstream media wants to control. Jason Calacanis (00:06:50): The really interesting thing about him going to the border, I agree with Saxes. hey. Let's just have a discussion about this and look at the actual facts on the ground that we can agree on. And what he actually did was he pierced the veil of, like, This is an issue about a certain group of people. He was there and there are people from Afghanistan, China all over the world coming in. He made the point that this isn't just about one country and that these people are suffering. And that I thought was, like, another really important highlight. These people are being trafficked. They're, you know, being abused at the border, and that It's gonna cost us 10,000,000 on the deal to secure the border. It's a it's a humanitarian crisis. David Friedberg (00:07:23): -- David Sacks (00:07:23): about it. And he's he's done this with Ukraine as well where he emphasizes the humanitarian aspect of it. David Friedberg (00:07:29): Yes. David Sacks (00:07:30): And it's like a way of talking about it, and I think Republicans should adopt some of that. Irritoric. Jason Calacanis (00:07:36): And to Chemat's point, I think it's it is I think it's a money grab Chembath. I do think it lowered death rates, but, you know, I I do think piercing the Vowel on this. And David Friedberg (00:07:44): -- David Sacks (00:07:44): None of us are still getting boosted because we know they don't work. David Friedberg (00:07:47): Guys, stop. Let's keep moving on. I'm not debating vaccines and politics. We're moving on. We're gonna talk about crypto. So this week, the SCC -- Here Jason Calacanis (00:07:54): we go. David Friedberg (00:07:54): -- serious action against Chamath Palihapitiya (00:07:55): Binance and Coinbase, you know, pretty significant, pretty David Friedberg (00:08:01): loud SEC filed 13 charges against finance entities and the founder's CC. Charges include operating unregistered securities exchanges, broker dealers, and clearing agencies, misrepresenting their trading controls and their oversight on the Binance US platform and the unregistered offer and sale of securities The next day, they saw it a temporary restraining order to freeze Binance's US assets. And then on Tuesday, the SCC sued Coinbase. over their exchange and their staking programs, stock dropped 12%. The SEC said that The company was operating an unregistered exchange and broker, and that 13 of their assets listed on their platform were considered crypto asset securities Brian Armstrong obviously has been on the pod several times, said he's not shutting down his staking service and said regarding the SEC complaint against us today, we're proud to represent the industry in court to finally get some clarity around crypto rules. He's generally made the statement. that he has tried multiple times to register with with the SEC. They have not had a mechanism for him to register. They have tried to do everything by the book. And that the SEC approved their IPO filing knowing full well the details of their business and their operating model and still allowed them to go public on a US Securities Exchange despite full knowledge about their business. Chamath, does anything change this week based on the SEC's action, or is this just a continuation of you know, crypto has been rolled back and will continue to roll back here in the US. Or is this something new and a new action and opens up a new front on the the government versus crypto? Chamath Palihapitiya (00:09:43): It's a good question. I think there's two ways to look at this. One is the conspiracy theorist way, which you see a lot of on Twitter, which is this idea that crypto is making all of these inroads. as a replacement mechanism for fiat currency. And so governments are really now invested in trying to shut it down. I think that's largely untrue. And then there's the more simple basic reality, which is that there was one part of the SEC that frankly didn't do the job that they were supposed to by either allowing a few of these crypto companies or crypto businesses to go public either as standalone businesses or as part of other businesses, so Coinbase, Robinhood, etcetera. And then there's this part of the enforcement action after this FTX fiasco which is a lot of CYA. Covering your ass by the SEC, especially because it looked like they had some cozy relationships with them. And so they're coming down hard and they're going to go and systematically dismantle the largest actors and they're going to go through the value chain. So I think the obvious place that they're looking now are the exchanges, they'll look at the custodial services, they will not approve any ETFs. And then, eventually, I do think it trickles into all of the staking services. And eventually, I think it'll touch the venture community. And all of those firms and funds that had a huge robust business in staking these crypto projects in order to get coins like founding coins and then being able to sell them. Jake out? Jason Calacanis (00:11:31): I mean, I've been talking about this since the beginning because I I bought Bitcoin and wrote about Bitcoin when it maybe 25¢ and then again when it was a 100. So I've been following this for a long time, and I think thinking first principle is just stepping back for a moment. You know, what we do in technology is fundamentally disruptive. If it's at its best, if it's truly gonna be important in the world, And when you hear that word disruption, you kind of file it as a buzzword, but what it really means at its core is like competition. And it's not just competition disruption. When you say disruption, you're talking about existential competition. Two people go in the ring. One person comes out. Like, somebody's gonna get really fucked up. And if you people keep bringing up, oh, you're an investor at Uber. They broke the rules. They bent the rules. Uber was going against caps. Airbnb was going against like hotels. WeWork was going against like long term real estate leases. When you look at all those disruptive technologies in what they did at their core. They disrupted on behalf of consumers and lowered prices, increased choice, etcetera. When you crypto the crypto crowd literally said we are going to replace fiat currency. Fiat currency is the government. And so my thesis from the beginning was if the government has a way to stop this, they do not wanna be disrupted. What what is a government at its core? It's a military. It's a bunch of rules, laws, and its money. That's the kind of pillars of of any government's power. We knew the government wasn't gonna give this up. And, you know, they they fed around and found out, but the truth is the and and this where I have some sympathy for the crypto people, not the people who are just committing crime with the whole way and just dumping these bags on retail, etcetera. But we do wanna have this innovation here. there are some innovative aspects to it. But Gary Jenssef said, listen, you already have electronic money. It's called money in the United States. Jason Calacanis (00:13:25): We already have these services. You don't need this. Consumers don't need it. And you have to understand the SEC's function in the world to understand why they're taking this action. Their function is to protect investors. investors lost a bunch of money. Therefore, they are going to retroactively inflict pain and hold people accountable for their mandate, which is to protect investors. You could have easily resolved this, the SEC, and the Companies could have resolved this. The companies could have followed these things as securities and only allowed accredited investors. Top 5% of the country people will make over 200 k a year. They didn't do that. They said anybody can buy these. Well, that's just not how it works in America, and it should change I think everybody should be able to buy any security they want in America just like anybody can go play blackjack. And the easiest solution for this just past Congress this week, and we'll go to the senate and and be a lawsuit, I think, allowing every American the other 94% to take a test and become accredited. If that happens, take a task just like you take a driver's license test. I know what diversification is. I know how risky these are. Once you take that 50 question test, you become accredited, and then you can buy these coins if you want And that's really the easiest path to resolution here. So we don't have Brian Armstrong move his company to the Middle East or, you know, an island in the Caribbean, which is what he's gonna do, I predict. So David Friedberg (00:14:42): Okay. Well, look, we've seen this bill make its way, I think, through is it going to the senate next or is it Chamath Palihapitiya (00:14:49): Going to the senate. Yeah. David Friedberg (00:14:50): Going to the senate next. So let's see if it gets done. I think it's a it's a good point. One thing I'll point out when individual investors were making money because all of these asset values were inflating, all of the coins were growing and were or climbing in value, everyone felt good. There was an emergent cry that we all wanna have access to these new instruments. We all have a right to make these investments and to own these assets. And then as the asset values declined, an individual investors began losing money, the emergent cry is where was the government to help save and protect us? And so the SEC, I would argue, was probably a little bit hindered when the market was inflating in being able to step in and take action because that would have been counter to the cause of the retail market But as the retail market took their their hits, the SEC has to step in, and Congress steps in, and everyone starts to say, it's time to act. We should have acted sooner. And this was, you know, fairly predictable. David Sacks (00:15:53): I think what's happening is more nefarious than that. So the SEC is doing 2 different things. They're they're alleging 2 different kinds of crimes. One set has to do with protecting investors from having their funds stolen on these exchanges or at least commingled. FTX did that, right, where they basically took customer deposits and stole them. What Binance is accused of is taking customer deposits, maybe not stealing them, but commingling them with company funds. That should be looked at and and I think crypto customer should be protected against that. However, the case against Coinbase, they're alleging a completely different set of facts, which is effectively What Gensler and the SEC are saying is that it is not legal to operate a crypto exchange in the United States. That is what the SEC is saying. because Coinbase has basically done everything right. And I believe that Gensler is far exceeding his authority and stating something like that. It is not up to the chairman of the SEC to say that Americans should not be holding crypto. Why as a free people? Should we not be able to buy crypto if we want to. You know? Why shouldn't we be able to buy Bitcoin? Now maybe you apply rules around accredited investor status, there should be protections against unsophisticated investors buying stuff or getting defrauded, that's fine. That's the framework that Brian Armstrong is asking for. But we everyone should understand what the SEC is doing right now is basically usurping congressional authorities. It should be congress that makes the law. If Congress wants to ban crypto exchanges in the United States and prevent the SIS in the United States from owning crypto, let congress do it. It should not be up to Gensler to do that. And the question is why is Gensler going this far? When previously, he had relationships in the industry, apparently, he was a consultant to Binance, and even worse, he was talking to FTX about giving them some special status. And I think the reason is the the scuttlebutt is that He has an alliance with Elizabeth Warren. David Sacks (00:17:55): And the rumor is that, you know, she will make him treasury secretary if he basically destroy crypto in the US. David Friedberg (00:18:00): Sorry. Where is the evidence for that? That's just someone's rumor and speculation. This David Sacks (00:18:04): is the scuttlebutt in the industry. David Friedberg (00:18:05): What okay. So it's it's somewhat Jason Calacanis (00:18:07): The back David Friedberg (00:18:08): 2. Jason Calacanis (00:18:08): This is in fact the back channel. David Friedberg (00:18:10): But so just to be clear, rumor and innuendo is what you're saying. David Sacks (00:18:13): No. Look. What I would say is clear is that Gensler and Elizabeth Warren have an alliance to destroy crypto in the US. This was speculated about before with Operation chokepoint, but now it's clear. They're trying to shut down -- -- chokepoint. We've talked about on the show before. It was a series of actions taken. Chamath Palihapitiya (00:18:28): What you do when you're in a hotel at night? Oh, David Sacks (00:18:32): no. Operation Showpoint was a series of actions by the US government to basically destroy all the onramps to crypto. So you couldn't get money into the system. Now they're going further, and they're basically saying it is illegal to operate a crypto exchange in the United States. So Gensner has not played his cards. Jason Calacanis (00:18:48): Yes. And David Sacks (00:18:48): that's Gensner has played Chamath Palihapitiya (00:18:50): his cards. I can explain why Jason Calacanis (00:18:50): I can explain why you're wrong. What they're saying is it's not just the exchange. It's that the exchange contains unregistered securities. So it's a more nuanced point. I think Like, I agree. David Sacks (00:19:01): What security could you trade? Jason Calacanis (00:19:03): Well, if it passes the Howie test or it is registered. And there are people who have actually David Friedberg (00:19:08): They're saying that David Sacks (00:19:09): no crypto passes the Howie Test. Nope. They're going back on that. Jason Calacanis (00:19:12): You could pass it if you limited it to accredited investors. And the fact is Brian Armstrong, Binance, and a lot of crypto projects refused to exclude non accredited investors. And I watched this happen up close and personal, David. David Sacks (00:19:28): I had many You're you're right about the unregistered securities thing. They're trying to say that all crypto is unregistered securities. Jason Calacanis (00:19:34): No. No. They seem to be -- -- 16. No. No. They literally, they named them Saxx in the in the lawsuit. They named the 16 or 13. What was it? FreeBird? So they they know how to it was 13. They know how to craft this. They're saying for these specific 13. Now the industry does feel you're correct. and the back channel is everybody's against us. But if they had just registered these, they would not have a problem. I don't think they're gonna So I David Friedberg (00:19:55): think wasn't wasn't is not included in this. Each of them is not included. He doesn't have a way of registering them. Jason Calacanis (00:20:02): They do. They don't want to. So they claim they don't have a way of registering. They could register just like we all do when we have private securities. David Sacks (00:20:09): A lot of people tweeting about this that the SEC has put out statements saying, our door is open. Come talk to us There is no open door. There is no one to talk to. They have no idea how to get registered. David Friedberg (00:20:19): How Shamab, how do you think this is gonna get resolved? Armstrong's talk publicly about going to Congress. to try and get some clarifying law passed. Are you familiar with any of the any of the drafting that might be going on to support his cause here? or do you think it's gonna get settled in the courts? Chamath Palihapitiya (00:20:35): First of all, I think I think Brian Armstrong is is a really, really, really good entrepreneur. And I'm a really big fan of his. That said, I just don't think that there's a lot of political support to visit this issue right now. And so unfortunately, I'm pretty skeptical that you're gonna see any form of legislation pass. I unfortunately think that The SEC has by and large put the entire sector into mate. And so I think that what Jason said is largely right, which is that it's gonna force these companies to preserve enterprise value to to leave the United States. and to jurisdictionally operate from a different place and to basically IP block and IP gate US residents from using their products and services. I also think that they're gonna have to pay large fines. And so the only thing that'll be left is to adjudicate all of the staking stuff that that happened and whether that was right or wrong. David Sacks (00:21:48): Right. David Friedberg (00:21:48): So the court it'll get settled it'll get decided in court. -- David Sacks (00:21:51): agree with that. And I think I think that when you start talking about minutiae, like, well, these 16 cryptos are okay or not okay. No. Look, you're kinda missing the point. The government led by Gensler is in a full assault on crypto. And the goal is basically to either destroy it in the US or drive it offshore. Chamath is right about that. And the question is why. And I think, Jay Kal, you made the point that progressives like Elizabeth Warren see crypto as competition to fiat currency, and they do not want there to be a competitor. Now what is the reason for that? I think it's because of their radical spending schemes. Remember, in the 1st years of the Biden administration, The Progressive has wanted a 4 and a half $1,000,000,000,000 build back better bill. Remember, Larry Summers, told them that you're gonna cause inflation. And even the $750,000,000,000 scope down version that they ultimately pass caused a lot of inflation and it caused the problems that we have now that we're seeing in the economy. But they wanted 4 and a half trillion. And when people were opposed to it and said we couldn't fund this, they were in favor of minting $1,000,000,000,000 coins. Yeah. Well, look, how how many -- -- people who don't want any check on their ability to spend down the full faith and credit of the United States They would basically spend all the money that we have. They would basically eat the seacorn. David Friedberg (00:23:07): Or don't have? David Sacks (00:23:08): That we don't have that I think you guys agree we should not be spending. And that is why they're the faction in our political system who are most against crypto. Jason Calacanis (00:23:17): The truth 2 days can be true. Friedberg. Hold on. I gotta I gotta respond to it. David Friedberg (00:23:20): 2 Jason Calacanis (00:23:20): days can be true. 1, the government doesn't want to give up control of fiat. I agree with that. The second thing that's also true is that this group of people did not wanna play by the rules They knew the rules. They explicitly broke them for profit. That's why they have them dead to rights. You can name this operation choke point You can brand it. You can put out any conspiracy theory you want. They did have the option David Friedberg (00:23:41): -- David Sacks (00:23:41): Why is it a conspiracy theory? You agree they're trying to run these guys out Jason Calacanis (00:23:44): of business. I said two things to be true at the same time, David. This this is a tolerance for ambiguity being able to hold 2 dogs at the same time. They're broken and they don't wanna give up control for you. That's what's happening. That's the rule. You have to file as a steward. You have to only allow credit investors. David Sacks (00:23:59): You said that Coinbase was a good actor. Jason Calacanis (00:24:01): I believe they have good intentions. Yes. But I don't the other people do. I do believe -- So now David Sacks (00:24:05): I believe that Coinbase is in violation of the law. Jason Calacanis (00:24:08): I believe the securities they're trading are in violation of law, and that's obvious. if you but I believe that loss should change. Let me give you a securities -- -- are securities. David Friedberg (00:24:17): JCal, let me give you a third point in sex. Elizabeth Warren, she may be motivated by the intention to preserve the authority of the Fiat. But is it not also possible that a large number of people lost a lot of money that they worked hard for and they used to buy crypto assets? then the value of those assets went down, and those people lost a lot of value. I had there was a a group of guys that are house painters that painted my house 2 summers ago. And they painted the whole house. They were here every day for hours every day. So I got to speak to these guys. And these these guys were were house painters. You know? They They work for hourly wage. They do fairly well. But every lunch break, every break they got, all that they would talk about with one another, was what cryptocurrency they're buying and trading in and out of with the whole intention of making money. They all believed that they had a good point of view because they read something on the Internet or got some tweet or got some text or saw something on TikTok about this one crypto asset or this crypto asset, and they were trading in and out, and all of the money that these guys worked hard for was being invested in crypto assets. You're David Sacks (00:25:28): right. That set of facts is not great. However, I don't think that's the motivation. think the motivation is to basically end crypto as a potential competitor to fiat money in the United States. That's the motivation. and they're gonna use those fact patterns to basically build how much support that. Because look. David Friedberg (00:25:44): Fair enough. David Sacks (00:25:45): Because we could handle that. Okay? We could do the accredited investor There should be a framework or set of guidelines under which it is legal for people to buy and hold or trade crypto in the United States. And with this all that Brian has been asking for is give us a framework. And Genser is not giving a framework. He's just trying to basically put them out of business. David Friedberg (00:26:04): Okay. Look, I think we've gone around this topic. This has been a great conversation. I'm gonna move forward to the next topic, which I think is really interesting. In the vein of both, deglobalization, but also, you know, the scale at at which venture firms have gotten to. Sequoia decided this week and announced publicly that they're splitting off their China and India slash Southeast Asia funds. As you guys obviously know, Sequoia Capital is a venture capital firm. And within that firm, they manage multiple funds Some of the funds that they've raised and managed have been specifically targeted in China, where they have $56,000,000,000 I don't know if this number is accurate, but that's an incredible number. $56,000,000,000 of assets under management focused, GIF, and Sequoia, China. And then they have a Sequoia India Fund, which has about $4,000,000,000 of capital raised in just the last three years. And now they are separating the management company and the oversight of those funds into separate management companies. So Sequoia capital will no longer oversee those China funds. A new firm has been formed called Sequoia, China that is now owned and run by a separate management team based in China. and Sequoia India is now called peak 15 partners, which is owned and operated by a separate team of managers out of India. Rolloff Bota will manage the US and European Sequoia Capital. Neil Chen will oversee Sequoia China and Shailendra Singh. Neil Shen. Shen. I'm sorry. Neil Shen. And Shailendra Singh will oversee Sequoia, India. I guess this is a question of did Sukoya get too big, or are they caving to pressure of the political issues arising with having deep relationships and ties with China. Or as they have said, a lot of competition between these different portfolios and companies within these portfolios amongst each other Chamath, what's your read on the action? Is there anything to read into this and anything to extrapolate from it? Chamath Palihapitiya (00:28:03): Well, it's been a parade of missteps for Sequoia in the last couple of years. and I'll let Sequoia figure out who to blame for this. But the reality is they, I think, felt a lot of FOMO post SoftBank they raised this large mega fund that kind of straddled all of the sub funds and straddled all of the regions. And so They dangled the carrot of trying to get into the early stage US fund by investing in this big mega fund that also had China and India exposure and growth exposure. then they tried this, like, very convoluted evergreen structure right before the market fell apart. where you could basically become a permanent capital vehicle. And as far as I can tell from the outside looking in, It just seems like a tax a tax play for the GPs to not have to sell and realize capital gains. But that only works when the stock market keeps going up, which it didn't, and then it's similarly crushed tech stocks 80 or 90%, so that was a misstep And then when you put all these things together, now that China is contracting and we said this before, I think China is largely uninvestable. for the next 30 or 40 years. It just makes sense to jettison it. Now I will say though that Neil Shen is elite if you consider in investing. I would say, I have a simple rubric. Anybody who's made more than a $1,000,000,000 for themselves as an investor, I consider elite. Neil Shen is elite. And so he'll do just fine running that Sequoia China business. I was surprised about why they would allow India to leave, there's nobody that elite at Sequoia India by that rubric. But India is a country growing at 6% a year. It literally looks like China in 2008 and 9. And so I'm not sure why you would let them leave. I think that you would want to attach them to yourself because It makes the US business look better. He probably gets differentiated and smoothed out returns. But I think this is a little bit of of David Friedberg (00:30:15): of competition, Chamath, that there was competition between the the different portfolio companies and it was leading to conflict. Chamath Palihapitiya (00:30:24): I mean, that's dumb. That happens in the United States. Sequoia has always been known to fund everybody that they think will make money no matter how much they compete, David Friedberg (00:30:32): no matter where they are. So -- -- when they back when they back YouTube and Moritz was sitting on the board at Google. And -- Chamath Palihapitiya (00:30:38): Sure. Look, Sequoia as an organization is elite. They're there to make money for their LPs, period end of story. And so all of the other words that can go in any press release Basically, I think, try to hide the fact that this is an organization that's had some missteps. They're not on solid ground. They've lost a lot of money. and they're trying to figure out what to do next, I, however, if I was running that organization, would have probably done nothing and just let the dust settle. And I think that all of these actions are too close together and it's a little bit to me of flailing in the water. And so I don't think it was a good idea to let India leave. I think it made a ton of sense to cut China But I think all of this stuff happened started happening a few years ago starting with that 8 or $9,000,000,000 mega fund that they raised to try to compete with SoftBank. David Friedberg (00:31:33): Sachs, can you read on this? David Sacks (00:31:35): Yeah. I mean, I think it's a example a prominent example of decoupling and equal globalization going on. So I I agree we have to treat India and China separately. With respect to China, I just think it's become harder and harder for Americans to do business in China both because we don't really have the visibility Jason Calacanis (00:31:54): into that system, and there's too David Sacks (00:31:55): much political uncertainty. So kind of touch Moss's point about it being increasingly uninvestable. But I also think that geopolitical concerns, it's just very hard to straddle those concerns now because the geopolitical competition is heating up so much. I think it's investable for people like Neil Shen who are insiders in that system. So I think, you know, elite Chinese investors can, I'm sure, make money in China over the next few decades. But I think it's just too hard for Americans to figure that out. So I think them parting ways makes a lot of sense. I think it's gonna simplify Sequoia's life a lot. India, I agree with Chamath that that's sort of a different question because India is gonna be a huge growth economy over the next few decades, and they are a US ally. So it doesn't pose the same geopolitical risk. But my guess is that it was just kind of unwieldy that it's too unwieldy to kinda merge funding sources and firm management across 2 firms that are really pretty different. Right? The US acquired firm and then this Indian firm. So my my guess is they just decoupled because it was just going too hard to manage. And then if you're an LP, don't you just want the ability to say, okay. I'm gonna allocate this much money to India. I'm gonna allocate this much money. to the US, I think LPs probably like it too. Chamath Palihapitiya (00:33:17): Sequoia, China is frankly over the last David Friedberg (00:33:20): 15 Chamath Palihapitiya (00:33:21): or 20 years, as good and probably is numerically better than Sequoia US. So that was an elite organization just by itself. Sequoia India I don't think has much to talk about. And so maybe what Rolloff decided is this team is just not very good, so we might as well just cut it and we can revisit it later. they probably have some number of years of a noncompete, and then they could come back into the market 5 years with a totally new team. And that may be easier So it may be easier just to just Maybe David Sacks (00:33:49): the team, they actually They wanna achieve separate. Look. It's hard to cross returns from 2 totally different funds. Right? Because one side one side's gonna be unhappy with the trade. Right? Jason Calacanis (00:34:00): Yeah. I can I I can give you the David Friedberg (00:34:02): Jake Cal's got actual information to share. Jason Calacanis (00:34:04): Well, no. No. I mean, I I have the closest I think I have the closest David Friedberg (00:34:07): But you were an investor in your company. Right, Jacob? Jason Calacanis (00:34:09): Well, I'm an LP in their funds and they're printing money for me. they backed my second startup, roll offs on the board of that company and stuff with me. And I was their first scout when they started the scouts program, which is the highest percentage performing fund, I think they ever had. It's quite a David Friedberg (00:34:24): -- And you're our you're our resident captain America. So as a patriot, How do you feel about these? Jason Calacanis (00:34:28): They are put that aside. Sequoia is 20% in NASDAQ. This is the greatest venture firm of all time, hands down. And the Sequoia fund which Chomov referred to. David Friedberg (00:34:37): You mean companies they've invested in -- Jason Calacanis (00:34:39): Companies in the World Cup are 20 percent of the NASDAQ. Yes. And so the reason the Sequoia fund came out this evergreen fund was because a lot of their LPs wanted Sequoia to manage the public equities going forward because they didn't wanna sell them. because they realized, bullshit, that the massive gains the the gains from Google, Apple, etcetera, of these Investments that they did when they were private company, Cisco, the gains from Public Forward were greater than the gains in private. And I've been in on these presentations. I've sat through them with the Sequoia team. And so when you manage those public ones, We've all talked about the denominator problem here. The denominator problem is, hey. Are they venture returns, or are they part of the public equity? So in a a giant endowment, they wanna put them into the equities bucket, get them out of bucket. It's Sequoia store an opportunity there to manage this evergreen fund. I'm sure there are tax advantages to it, of course. But with relation to what they did in China and India, these these were incredibly prescient and innovative things they did in 2000 and 2005 when they started India, and then China was 2005, I believe. They found domestic teams. You need domestic teams to do this properly, especially in places with different governance and different regulations. and it gives them autonomy. They were they were incredible investments. But what's happening right now is all venture investments because of AI and chips and the decoupling with China are now under massive scrutiny. So they can say there's brand confusion. You can talk about, you know, the collisions and who's gonna this Chinese entrepreneur, an Indian entrepreneur who also is operating in the US. Right? These businesses operate in the US. And so what really is happening is the government is gonna stop all US venture investing in China. That's what's gonna happen in in the coming months. And so just getting ahead of that. Jason Calacanis (00:36:36): And now they will compete. It really has to do with chips and AI. Okay. You may have seen some of these stories, and nobody's gonna invest. You're if American invests in AI in China, that's gonna be banked and the same with chips. David Sacks (00:36:49): Yeah. You're right. There are a bunch of stories about whether US investors should be investing in AI in China. And people were saying this was un American because it was basically gonna give China an advantage against us in this key industry. And I think that is a good example of what I'm talking about with the geopolitical concerns. It's just getting too complicated David Friedberg (00:37:07): -- David Sacks (00:37:08): Yes. -- for Americans to invest in China. It raises too many geopolitical concerns. And I think Sequoia is massively simplifying its life by just splitting these things up and being out. Jason Calacanis (00:37:17): Did you see Keith for voice tweets on Chamath Palihapitiya (00:37:19): this? Yeah. David Sacks (00:37:19): That's what we're referring to. Jason Calacanis (00:37:21): Yeah. Keith For Boy tweeted based on, like, it's unamerican to invest in China at this point. David Sacks (00:37:26): And we've talked about before. Jason Calacanis (00:37:27): I mean, David Sacks (00:37:27): look, the the Chinese relationship primarily used to be seen as an economic relationship, and people are looking for a win win basically trade scenarios. And it was not seen as a moral to invest in China. Now the relationship is primarily seen through a geopolitical lens, which is to say the balance of power, which is a 0 sum game. It's about, you know, how much better is the US doing? How much more powerful is it than China? And anybody who's perceived as helping China in that rubric now is looked on skeptically within the United States. Jason Calacanis (00:37:57): About that? Well, like David Sacks (00:37:59): I said, I I don't think that's gonna change. So I think Sequoia is doing the right thing to kinda, like I said, simplify Jason Calacanis (00:38:04): its life. But what's your personal opinion? I'm curious. David Sacks (00:38:07): I think that it should be possible to do business with China without it being seen as either unpatriotic or immoral. However, there are strategic technologies that are just gonna be, I think it's too hard and too risky to to be supporting China in. Chamath Palihapitiya (00:38:25): Chip and AI? David Sacks (00:38:26): Yeah. I mean, look. If somebody is using Chinese manufacturing to make toys or clothes, I don't think that's primarily strategic in a geopolitical way. But if you're helping them make the next generation of chips, that's gonna raise a lot of questions. Jason Calacanis (00:38:44): So so a VC firm, Friedberg, can't take out chips and AI from their investments. Chamath Palihapitiya (00:38:49): Hold on. Hold on. I wanna say something because -- Sure. This reminds me of when benchmark actually had benchmark Europe, and then they cut it. Do you guys remember that? Right. David Friedberg (00:38:56): Yeah. I do. Yeah. Chamath Palihapitiya (00:38:57): And kind of retrench they weren't retrenching from a position of strength. They were retrenching to reestablish themselves after a bunch of missteps. So I think, typically, these retrenchments happened when there's a little bit of internal chaos and mismanagement and underperformance. Jason Calacanis (00:39:12): That's not the case here I can assure you. David Sacks (00:39:14): Yeah. But I actually think retrenching is good because it simplifies things. You wanna you wanna simplify yours. Yeah. Chamath Palihapitiya (00:39:19): I I I totally agree with you. My point is when I saw that overlay fund, I was like, this is questionable. But then when I saw that weird evergreen fund, that to me just seemed like a tax arb. And I thought, to myself, as a person who's looked at this exact stuff for my own stuff, what I did was I just converted it to a family office. And from a tax perspective, it was much simpler, but that exact same structure I looked at for myself. And the reason that that structure exists. And, Jason, I know you wanna think it's because these endowments want them to manage public equities. I still work with a few endowments in pension systems. They don't. And the reason they don't is they're not allowed to. They're not allowed for concentration purposes. They pay other people to manage it. They have these outside consultants. And for fiduciary perspective, you have to do all of these things with respect to managing risk. And one of the most obvious things that these foundations do is They get distributions and they sell. They don't hold. And so the reason why you'd wanna look at the long term gains of a stock that you distributed is because the GP sold too early, not the LP. And I just don't I'd think that you should not just be obliged surrogate on this topic and actually really think about it. Jason Calacanis (00:40:30): Wow. I mean, I don't think you need to well, I I'm not I'm not. And, you know, Square, if you look at something like that, you know, rule off Stalin the border swear, I believe. So they Sequoia has realized over time, you know, as it's been explained to me as NLP, that, you know, these companies grow the outliers, continue to grow massively when they become public, and Sukuea is now staying on the board of those companies. And so they actually have the most insight into it because they backed it when it was two people, and then they're still on the board. Chamath Palihapitiya (00:40:58): That's not public. Money is not infinite. And if you're a foundation and you're legally obligated to distribute some percentage every year. You need the money back. Jason Calacanis (00:41:05): And the foundations do get to choose. Some foundations wanna go along. Harvard or whoever I'm picking, you know, one of the large ones. If somebody's got 30, $40,000,000,000, they may not need to liquidate that, and they might very much wanna hold the Chamath Palihapitiya (00:41:17): whole term. I'm I'm telling you the only person that is in a position to holds for the long term because it's so tax advantageous is the GP. That is why that fund was created, and I will bet you. If you ask him under oath, why they did it, I'll tell you it was for themselves. Like, when people have the choice, Jason Calacanis (00:41:35): I bet Chamath Palihapitiya (00:41:35): you a $1,000,000 for charity. Whatever you wanna do, I bet you. If you put him under oath, then you subpoena him and you ask him why he did it. He'll say he did it for himself. And that's fine. All I'm saying is that's the kind of complexity that Saks is talking about that does not add to success. It is over complexifying something that doesn't need to be complicated. Jason Calacanis (00:41:53): Yeah. I disagree with you, but we can just move on. David Friedberg (00:41:55): Well, we agree to disagree sometimes here on the all in podcast. We're gonna move on for our last topics today with the Jason Calacanis (00:42:02): Can we Chamath Palihapitiya (00:42:02): talk Messi? Jason Calacanis (00:42:03): Can we talk Messi? Chamath Palihapitiya (00:42:04): No. No. No. We're not David Friedberg (00:42:04): we're gonna because we're gonna do one last topic, which I think is -- Well, Jason Calacanis (00:42:07): PGA and Messi go together. David Friedberg (00:42:08): Yeah. So let's just do Jason Calacanis (00:42:09): messaging and Chamath Palihapitiya (00:42:10): the PGA. David Friedberg (00:42:10): No. We don't have time. Guys, I appreciate the messy interest, but we're gonna talk about something less messy. So we're even more messy. Okay. Well, I actually think it's pretty interesting for a couple of reasons. So As you guys know, the PGA Tour has been around since 1930. I think the PGA Tour makes $1,600,000,000 a year if reports are correct. Chamath Palihapitiya (00:42:29): I make 1,600,000,000 a year. Boring. BaaS. David Friedberg (00:42:32): I mean, depends on the year. All of the players on the PGA Tour are independent contractors. So Saudi Arabia's public investment fund, and this is what I think is one of the more interesting aspects of this story and maybe speaks to a broader kind of set of geopolitical transitions that are underway The Saudi Arabian Public Investment Fund started LIV Golf as an alternative to the PGA Tour, Live Golf. live golf. They invested $2,000,000,000 of of capital and offered guarantees to golfers to come and get on their tour banded up offering, at one point, Tiger Woods reportedly got a $800,000,000 guarantee to join their tour which he turned down, Phil Mickelson got a reported $200,000,000 guarantee, which he took to join the tour. Chamath Palihapitiya (00:43:25): hideki Matsiyama got 750k, 750,000,000 with David Friedberg (00:43:29): 250,000,000. So 7 of the 10 top paid golfers in the world actually signed up. And it caused obviously significant disruption to what has effectively been a monopoly, which is the PGA Tour in golf in professional golf. And here we are, 2 years later, and it was announced this week that Live and PGA are merging. And the current PGA Tourk Commissioner, Jay Moynihan, will serve as CEO of the new entity. Just by way of reference, Jay Moynihan, Nakes a reported 14 to $15,000,000 a year in salary as CEO of the PGA Tour. He will now be CEO of this combined organization One big question mark is, how much is he getting paid? And did that help secure and solidify this deal getting done? But I think another big question is, do we think this will actually close? Will this face regulatory and antitrust scrutiny? Will this face CFIUS because it is the Saudi Arabian Investment Fund that is effectively taking a large stake in the PGA Tour. Let's go to our resident professional sports team owner or former minority owner, Timoth. Any takes on on this announced merger? What if say about the PGA's ability to hold action. Chamath Palihapitiya (00:44:41): This is what's so crazy about your topic selection. Messi was offered 1.6 $1,000,000,000 personally by the Saudis. And you don't wanna talk about that because you wanna talk about a whole organization playing an antiquated sport that itself generates David Friedberg (00:44:55): $1,600,000,000. Jason Calacanis (00:44:58): Welcome to being the moderator. tackle moderator. I'll show you what topic. David Friedberg (00:45:02): What's your point? Jason Calacanis (00:45:03): Welcome to Robert. I don't Chamath Palihapitiya (00:45:04): care about golf. I don't care. Jason Calacanis (00:45:05): The reason this is so controversial is that they're calling it sports washing, trying to make the reputation of Saturday more palatable in the west by using sports, things people love. The the reason this has become controversial is because of the hypocrisy of it. The PGA fought against Liv, and this guy Jay Monahan, who is the CEO of this, he basically evoked the David Friedberg (00:45:31): 911 Jason Calacanis (00:45:32): families and went on a whole thing about how Eva Live was only to then secure the bag. And then there's some back channel here about Well, there was a lawsuit between the live golfers, you know, who are now banned from playing the PGA when they signed up. Yep. And antitrust stuff And so the hypocrisy of the group is what's being pulled into question here. David Friedberg (00:45:56): Shamad, this is why it's important because David Sacks (00:45:58): a lot the the players who took the money were ostracized. David Friedberg (00:46:02): And supporting an evil regime. Jason Calacanis (00:46:03): And they David Sacks (00:46:04): said, oh, let me look at these guys out. Yeah. And now it's clear that they were smart. and Tiger should've taken the money. And, actually, the guy who said as much at the time was was Trump. You know, he you know, these Yeah. He nailed it. It's like one of these Jason Calacanis (00:46:18): Once again, once again, he's No. He said David Sacks (00:46:22): he's basically said that take the money from live because eventually living PGA are gonna emerge, and then the guys who stuck with PGA are gonna get nothing, and they're gonna feel like idiots. You're totally right. Jason Calacanis (00:46:32): He split the arm again. David Friedberg (00:46:33): Come on. Come off. You don't think that that's insane? I mean, come on. It's pretty amazing. Chamath Palihapitiya (00:46:37): Tell me when you get to Messi. And the fact David Friedberg (00:46:39): that these guys were proclaiming that if you're gonna go join this tour, you're joining you know, you're lining up Chamath Palihapitiya (00:46:45): I don't understand whether I don't understand whether you're naive or dumb. This is like about money. It's always about money. Professional sports has always been about money. What what are we what are we talking about? Money, money, money, money, money, there's your answer. Money drove the answer. Money drove the split. Money drove the deals. Now money drove the merger. I don't understand. Can we talk about Messi, please? It's so much more interesting. David Friedberg (00:47:06): Okay. Go talk about Messi. Come up. Chamath Palihapitiya (00:47:08): I mean, the Messi thing is so incredible. Because Cristiano Ronaldo went to a team in Saudi to play in the August of his career the last 2 or 3 years. And this has been a thing that started with Pele in the seventies. Pele came to the New York cosmos and played. Beckham famously did it as well, came to the LA Galaxy. But Beckham did this one interesting thing, which is he said, okay, I'm gonna come to play in the MLS. On one condition, really, which is I'll take a huge pay cut and all of this stuff, but I want an option to buy an expansion team for 25,000,000 bucks. Fast forward, he ended up buying Inter Miami. That team is now worth David Friedberg (00:47:47): $585,000,000. Chamath Palihapitiya (00:47:50): So Messi is thirty six years old. He's about to enter the August of his career. He's won everything. He's done everything possible. He is so incredible. I mean, I love him. I love him. He gets offered $400,000,000 a year for 4 years to go play in Saudi Arabia, a $1,600,000,000 deal And, you know, there's no income tax here. So that's like David Friedberg (00:48:11): $1,600,000,000 Chamath Palihapitiya (00:48:13): right in his pocket. Except the deal that he did which was for a lot less upfront is really interesting. He basically said, I'll come to the United States and play an inter Miami. for for the Miami Football Club. But I am you know, basically, I'm not sure he said this, so I'm using my own I'm the greatest player in the world. Every time I do something magical on the field, I'm creating content that will sell tickets and create brand awareness and move the interest level of soccer in the United States. I'm a content creator. So I want a piece of this content. And so Apple who signed a 2 and a half $1,000,000,000 10 year license for the MLS said you're right. you're probably gonna sell more subscriptions for me. I'll give you a piece of the rev share. And then Adidas said, you know what? You're right. you're probably gonna sell more shoes for me. I'll give you a piece of those shoes. So in one fell swoop, I think what's amazing is Messi is not an athlete in this deal. I think going back to a theme that we've talked about a lot is he is this ultimate penultimate, whatever. He's an elite content creator. David Friedberg (00:49:26): He's the equity. Chamath Palihapitiya (00:49:27): Who is now creating incredible who will come to the United States to create this incredible content that will move viewership, move merchandise, and he's gonna monetize that So it's effectively like becoming the Jordan brand, getting a piece of Netflix all in 1. He David Friedberg (00:49:44): has the equity in those businesses basically. Yeah. Jason Calacanis (00:49:46): This is a subtle point Shamont's making. In the deal, you have the person who's responsible for distribution. So this would be the same as like the NBA on ABC ESPN or TNT. And TNT or ESPN saying, you know what? You're so important LeBron James to play in this or Steph Curry. We're gonna give you a piece of the subscriptions to ESPN. So Apple is giving him rev share on their Apple TV league pass for MLS. That's nuts. like and this is I think it goes back to the live deal with PGA, which is people are looking at these sports leagues and saying, let's get creative. Chamath Palihapitiya (00:50:22): It goes back to a different one. The the NBA just signed a new collective bargaining agreement that they're gonna ratify. Mhmm. I always thought that the real thing that the NBA Players Association should be asking for David Friedberg (00:50:33): -- Chamath Palihapitiya (00:50:33): Equity. -- was equity. Yeah. And that equity could be phantom equity in the teams because it's clear that in absence of the players, there's no viewership and there's no appreciation in the value of those franchises. And so the idea that LeBron you know, Steph, Dre, KD, don't own a huge piece of the underlying equity gains that they're creating in the period in which their players is pretty crazy. Now the ownership, their perspective is while we translate that in terms of rev share, but it's really not true. Because if you look at the CAGR, the IRR of the franchise values versus the cagering of the salaries, they're not equivalent. Yeah. So I just think it has huge implications to all the professional sports leagues because these big stars should be asking their agents and their managers, how do I do a deal like message? I am the ultimate content creator in my league. David Friedberg (00:51:28): The dynamics are changing. It it will it will no longer be an employee capital labor situation, but capital is merging with labor. And labor labor is based basically becoming the equity in the equation, and they are getting the pieces Jason Calacanis (00:51:42): of the business. Just like -- And that's David Friedberg (00:51:43): -- -- the Silicon Valley. And we're and by the way, the reason we see it happening so much is because of the social media age, and it's really incredible. It's Jason Calacanis (00:51:50): but what's it, David Friedberg (00:51:50): guys? Jake Allen, I know you have more to say. We all have more to say. I just wanna highlight. I need to go. have to go to a kindergarten graduation. Congratulations. I'll close to Shafi. I love you guys. I'll see you later, Adios. Chamath Palihapitiya (00:52:02): Congratulations. Congrats to your kid. David Friedberg (00:52:03): Thank god. Bye. Jason Calacanis (00:52:04): But what's really interesting Chamath, to your point about the CBA, is they're gonna make these huge salaries. They're not gonna give them the equity as part of their 5 year deal. They make the money. They then have the ability to invest in a team. So you could be LeBron, and you could be investing in the Knicks maybe if somebody wanted to sell a percentage of it, you can invest in any NBA team, any sports betting team, any sports betting. Chamath Palihapitiya (00:52:30): I actually think there's a simpler way to do this, which is it's it I think it's fair to say that when you join a team, it's like joining a company David Friedberg (00:52:36): -- Chamath Palihapitiya (00:52:36): Yeah. -- and you can create shadow equity. And that shadow equity says you came in at this point. Right? You left at this point. Here was the delta of the value. And -- Yep. -- I think a good agent should be negotiating on behalf of a player. Most players will not get that much, a few basis points of that value. Yeah. But the idea that LeBron James can go to a Miami and double the franchise value, double. Yeah. Right? From, you know, 1 to David Friedberg (00:53:01): -- Chamath Palihapitiya (00:53:01): Or stuff. -- call it or stuff. Steph. Esteb's a better okay. Great. Steph comes in at 480,000,000 and is now 5,300,000,000. So that's a 10 xing plus of value. You know, is step responsible for 10 or David Friedberg (00:53:13): 15%? Chamath Palihapitiya (00:53:14): Should a $1,000,000,000 of that go to Steph Dray and Clay? I think you can make a great claim that it could. Jason Calacanis (00:53:20): Yeah. Absolutely. Put them on the map. So yeah. It would be and it would be pretty easy to do, and what this might do is keep people on the same team longer, which is what fans want. Exactly. Why are people moving around? Chamath Palihapitiya (00:53:31): That's a great point. And private companies like Cargill or Coke Industries, they have these shadow equity programs that they've had for years for decades that they've run on behalf of their employees. So we know how to run Phantom Equity programs in private businesses. And I just think the leadership of the NBA Players Association, the NFL Players Association, is right now still lacking the sophistication to understand this well enough to then propose when the next time it is to to negotiate this kind of a deal. But when you see things like this messy deal, I think it's a game changer. Jason Calacanis (00:54:10): It is a game changer, and I think for sports I don't know if you saw Adam Silver gave, you know, a little press conference with the finals and everything. He was talking about the Jay Moran situation with the guns. It's just a lot of, like, topics coming up. But one of the topics that was probably underappreciated was he was talking about the bundle, the cable bundles going away and that people can't watch, like, the TNT NBA on TNT, whatever that is with, you know, Charles Barkley, etcetera. And he wants that to be available for free. he's gonna challenge people in a new TV deal. If you wanna have the NBA, you have to have it available to everybody because the number of people who can see NBA accounts has been going down I Chamath Palihapitiya (00:54:49): have a question for you. Could you think more people do you think more people would pay for a subscription to watch the Knicks games? wherever they happen to be all over the world or a subscription to watch Steph Curry no matter what team he plays on. Jason Calacanis (00:55:01): The old generations are loyal to the teams, the new generation is well to play. it's a Chamath Palihapitiya (00:55:05): just numerical numerical question. Which one's great? Jason Calacanis (00:55:07): It's probably a jump ball right now, but it will eventually be they'll follow the players. Because this new generation follows players. Like, our kids like to call Lebron from David Friedberg (00:55:17): -- Jason Calacanis (00:55:17): I think Chamath Palihapitiya (00:55:18): I think you could probably sell a few 100,000 subscriptions to the Knicks, and I think you'd sell mid millions for step. Jason Calacanis (00:55:25): What's gonna happen now is I think they're going to they just want this to be ad based and to directly subscribe. So I directly subscribe to the NBA. I get every game for David Friedberg (00:55:33): $200 Jason Calacanis (00:55:34): a year with no ads. I would David Sacks (00:55:35): love -- You Chamath Palihapitiya (00:55:35): know what we should do? actually have a I have a great idea. What we should do is -- Here we go. David Friedberg (00:55:39): -- Chamath Palihapitiya (00:55:39): we should what Live did to the PGA, we should do to the NBA. Let's get together David Friedberg (00:55:43): $20,000,000,000 Chamath Palihapitiya (00:55:45): Let's start a competitive NBA league where we give the players all the players a structured Phantom equity plan. pay these guys a 100,000,000 bucks a year. Get all the big guys to come. Everybody else will come and just blow the whole thing wide open. By the way, that's the blueprint now if you wanna really compete with the with the NFL or the NBA or the NHL, this is what you should do. Put together 20 or 30,000,000,000, which is not that much money. And go for it. You only need Jason Calacanis (00:56:10): to get a couple of stars to to blow it up. Chamath Palihapitiya (00:56:12): And if you give stars the equity in the league, they'll convince all the other players to come. Jason Calacanis (00:56:16): I'll give let's give Saxx some red meat here. You Saxx will give you a little red meat. You want Tucker on Twitter. Here's your red meat choices as we wrap. You want Tucker on Twitter. You want a Russian controlled dam being destroyed for a major flood or Do you want Chris Christie joining the race? Which red meat would you like? Which red meat we put in front of crazy hair? David Sacks (00:56:39): Well, I mean, what's happening in Ukraine is really the big news this week. Jason Calacanis (00:56:42): I mean, the Ukrainian counter David Sacks (00:56:43): offensive has well, the Ukrainian counter offensive has started in earnest. And, yes, in conjunction with that, you had the destruction of that major dam, which it's not clear who did it. I mean, both sides are pointing the finger at each other. So and there are reasonable arguments for why either side may have done it. In terms of who benefits, it seems to benefit the Ukrainians more because the destruction of the dam washed out a bunch of Russian defensive fortifications and villages of Russian speakers. On the other hand, the Russians were in control of the dam, so it would have been easier for them to period out if they had wanted to. We just don't know. But I think, you know, events have now moved beyond that, and we are now probably in 3rd or 4th day of of the Ukrainian counteroffensive. Of course, it has not been officially declared, but there is major major fighting happening now where Ukrainian armored divisions are seeking to, you know, penetrate Russian defensive lines around Zaporizia. And so the long awaited Ukrainian counteroffensive has certainly begun. How does the Jason Calacanis (00:57:50): the dam relate to the Nord Stream pipeline because these are both situations where people are like, who actually did it? What's their motivation? And let's face it. These are chaotic actors at times and figuring out who has the motivation to do these things seems like a leveling up kind of game because you can't put it past either party in some cases. But in the case of Nord Stream, people saying, hey. It was the Ukraine, but then there's this argument that the Ukraine is not capable of doing it or maybe it was sanctioned by the US or the west and then executed by Ukraine. Where do you wind up with all these? David Sacks (00:58:27): So on on Nord Stream, we're now on our 3rd cover story. The CIA sourcing their stenographers at the Washington Post have now claimed that it was 6 Ukrainian dudes in a yacht who blew up Nord Stream. No. Seriously. And if you look at this boat, I'll I'll put photo of the boat on the screen, it's it's pretty silly. Jason Calacanis (00:58:45): To ten grand? David Sacks (00:58:46): Yeah. The Italians do not have a navy, and they certainly don't have navy seals I don't believe they have the capability to by the way, the this destruction in Nord Stream. Nord Stream was this huge underwater steel and concrete structure. It's not that Jason Calacanis (00:59:02): deep, though, because it's only a David Friedberg (00:59:03): 150 Jason Calacanis (00:59:04): or 200 feet deep at the lower points. David Sacks (00:59:06): It's deep enough, and it took a lot of explososos, so they had to know what they were doing. So I David Friedberg (00:59:10): -- Jason Calacanis (00:59:10): I've I dove a 120 feet once, so it's David Friedberg (00:59:12): -- David Sacks (00:59:12): But my point is that when when Nordstrom was first destroyed, the media rushed out to say, well, the Russians did it. Even though the Russians had no motive to do it, it was their own it's their pipeline. They could just turn it off if they wanted to. But this is what we hear is that every time something destructive happens, it's the Russians did it. Why would they attack themselves? Because they're so crazy. We heard this with Nord Stream. When Belgarad, which is a Russian district just across the border from Ukraine, was attacked, it was claimed that the Russians did it. These were Russian insurgents. Now that's pretty silly. it was Ukrainian dressed in Russian uniforms. And just recently when they were drone attacks on Moscow, we were also told that, oh, it wasn't Ukrainian who did it. It was Russian dissidents or something, which again makes no sense. So this is not to say that the Russian didn't blow up that dam. It's just to say that whenever the story is rushed out that the Russians said something highly destructive, you have to we we need to see some evidence here, and we just don't know. Jason Calacanis (01:00:09): It's just hard to know. The fog of war is thick. Alright. What did you think of Tucker's first show? It's incredible. Getting sued. But he got The tweet got at least, like, 90,000,000 views, which means the video probably got 10% of that or something. David Sacks (01:00:25): So probably 10 minutes. Yeah. was at 17,000,000 views or something like that. So I'm sure it's more today. So, no, he's getting huge distribution through Twitter. Arguably, it's more distribution. It's almost certainly more distribution. then he got through Fox. Jason Calacanis (01:00:38): Fox was 3,000,000. Right? Yeah. That's how many viewers he gets on Fox. David Sacks (01:00:41): Yeah. Well, Fox is half of that now because they've they've traded so much viewership after Tucker left. But look. The only thing that I think Tucker got through Fox was access to frankly, a viewership base that's not very online. There are a lot of old people who watch Fox who just aren't on social media. That's it, though. Everybody else can see it on Twitter, and he's getting more distribution on Twitter. Jason Calacanis (01:01:04): Super distribution is the way to go. He's gonna get David Friedberg (01:01:08): 25,000,000 Jason Calacanis (01:01:09): people, and, of course, monetizing it is the hard part because Fox's subscription revenue. and everything else is advertised. David Sacks (01:01:16): Currently, he's he's creating a list. You know, he advertised the website tuckergirlson.com at the end of his video, and you can go there and sign up for David Friedberg (01:01:24): -- Jason Calacanis (01:01:25): You can subscribe direct and get it on his website. David Sacks (01:01:27): I don't think he's monetizing it yet, but you can sign up for alerts and so forth. So he's clearly creating a list of some kind. Jason Calacanis (01:01:33): Oh, that's probably because he yeah. With his contract, he's still getting paid. And so he's like, yeah. Deli Wire is the model. I mean, they they have got well over a 100,000,000 in revenue. I understand, and they have a massive subscription business. So there's a clear path. Alright. Hey. Listen. For the world's greatest moderator living in the Bay Area, David Friedberg. and the the dictator himself, Jean Palihapitiya, and the architect hosting any number of fundraisers for any number of politicians. David Sachs, the rain man. I am the world's greatest moderator taking the week off. We'll see you next week. Oh, and enjoy some q and a here from the Live Angel Summit. hundred people in Napa. Thanks for coming, besties. I appreciate you -- Love your voice. David Friedberg (01:02:16): -- Jason Calacanis (01:02:17): pouring the event. Love your besties. See you next time. Bye bye. Bye bye. David Friedberg (01:02:19): Alright. Welcome to a baptism. Jason Calacanis (01:02:25): John the Baptist. Are you ready to accept Christ, Friedberg, into your soul? David Sacks (01:02:32): I honestly have no idea what I'm doing here. I've I have no idea who these people are or what this is. or why you're all wearing white. I mean, seriously, I'm sure you're very nice people, but I have no idea what this is. Jason Calacanis (01:02:48): Have you seen the wicker man? David Sacks (01:02:49): Jake Hall is like, we're taping an episode in Napa. And I'm like, what? What a, you know, off day. What What David Friedberg (01:02:55): is this? Monday is Monday. It's Monday. Jason Calacanis (01:02:57): Are you okay, buddy? David Sacks (01:02:58): Yeah. Jason Calacanis (01:02:59): You low blood sugar? David Sacks (01:03:00): Yeah. Actually, I do bring us like a cheese plate or something. Jason Calacanis (01:03:02): Can we get a cheese side slice? David Friedberg (01:03:05): guacamole and chips, please? But David Sacks (01:03:08): honestly, like, I didn't sign up for this. So I thought we I thought we disagreed to do a podcast, and somehow we've been roped into doing some dog and pony show for Jay Hall's LPs. Jason Calacanis (01:03:21): By the way David Friedberg (01:03:21): -- David Sacks (01:03:22): Is that true or what? David Friedberg (01:03:22): -- Jason Calacanis (01:03:23): these are a bunch of your LPs as well. You just have never met them. Literally, Okay. I'll drink it. Yes. Yes, sir. Literally, somebody's like, Jake, howe, I'm with this incredible endowment. We're incredibly successful. I'm like, oh, that's great. Yes. You heard I'm raising a fund. They're No. No. No. No. No. We heard Saks is gonna be here. I'm like, yeah. You wanna meet him and invest in his fund? Oh, no. We've invested in all these funds. We just never met him. And I said, wow. That's one way to do it. That's how successful Saxons. David Friedberg (01:03:51): Pretty funny. Two things Chamath Palihapitiya (01:03:53): they've never seen. Saab and a distribution. Jason Calacanis (01:03:57): But we're up to a hot start. Chamath Palihapitiya (01:04:00): Very fucking decision, whoever you are. You're a real fucking genius back there. David Sacks (01:04:04): Oh my god. Except for the fun we already paid back. Jason Calacanis (01:04:08): Oh, god. I lost control of it in the first ninety seconds. Why should tonight be any different? David Sacks (01:04:17): Except for the five year old fund that's already fully returned. Jason Calacanis (01:04:20): Okay. Of course. Alright. Woah. Easy. So welcome to the Angel Summit. These are my besties. We do a podcast called All In. We thought we'd do it live. This is the 4th time, we've ever appeared on stage together. The first two times were at Friedberg LP conference in the Presidio. Yeah. David Sacks (01:04:39): I resented that one too. Chamath Palihapitiya (01:04:41): Can we we Jason Calacanis (01:04:42): know you are David Friedberg (01:04:43): Sacking's first time coming out to see humans since COVID. I came out in his mask. He took his gloves off. It was very uncomfortable for him, but he eased into a seat. Jason Calacanis (01:04:52): And then, of course, we did the Olin summit last year in Miami. And this is the 4th time. So it's great to be out here. We have a couple of news items on the docket we could start with, or we can go right to q and a With these many audience members who have a lot of questions, what what would you gentlemen like to do? David Friedberg (01:05:09): Samad has a few words he'd like to say. Go ahead. Jason Calacanis (01:05:11): I don't Chamath Palihapitiya (01:05:11): know whatever you guys wanna do. Jason Calacanis (01:05:13): Jamath is drunk by the way. He texted us. You can see that grin on his face. that's the Chamath Gren he gives when he decided life hacks capital -- Excuse me. David Friedberg (01:05:24): -- Jason Calacanis (01:05:24): that he would not have LPs, and he would just invest his own money. He does not care. So it's the gloves are off. Let's do q and a. Jay Levy is his sex. What's the path for DeSantis to win the nomination? and get the base of Trump. Oh, red meat. Oh, good timing out with red meat. David Friedberg (01:05:41): Here we go. David Sacks (01:05:42): I think the path basically is he has to win Iowa and or New Hampshire. It's just that simple. But keep in mind that Trump did not win Iowa last or in 2016, Ted Cruz did. Iowa tends to be more religious. I think Santos is trying to outflank Trump on the right, actually, on certain issues. And so he's on the ground there campaigning. From what I understand, he's generating a lot of interest and enthusiasm. and he's gonna keep plugging away at it. I think he's gonna out hustle Trump. I'm not saying he's gonna win, but I think he's he's gonna work harder. And the path would be that over the next what is it, like, 9 months that Trump's style and message, which is admittedly much more entertaining than DeSantis. But kind of fatiguing, whether that kinda gets old. And DeSantis more, like, disciplined messaging. People just kinda wake up and say, you know what? Like, I don't really wanna go back to the chaos of of the whole Trump show. This seems like better to me. So that's basically what I think has to happen is Trump Fatigue has to set in and people realize that there's a different way. Jason Calacanis (01:06:53): Was that CNN town hall assigned that Some group of people find him incredibly entertaining, and the media themselves want him back because it's great for ratings. I'll menken on session. Or is it a sign that, like, my god. That's so fucking exhausting like you're saying, Saxx. What do you think? David Sacks (01:07:11): I think that the the base like the town hall because it was Trump walking into the lion's den standing up to the mainstream media, which is what they like. I don't think it did anything to help him in the general because I think that viewers who don't like Trump who aren't entertained by Trump, I mean, there's nothing there to really grab onto, I don't think. So but but look, I think your point about who does the media want to get the Republican nomination? Definitely Trump. because he's good for ratings. Jason Calacanis (01:07:41): And it really is that simple. David Sacks (01:07:43): And they think they can beat him. So right now, the Biden people, the Trump people, and the media all want Trump over DeSantis. And that is why, like, DeSantis is getting dispatched by everybody right now is because you know, everyone's kind of aligned on this. But the minute that Trump gets the nomination, it's all gonna turn. The media, all of a sudden, is gonna turn on Trump. And then we're gonna see what the real campaign's gonna Jason Calacanis (01:08:07): be about. DeSantis is in show business as they said on secession. Was that the quote? He's show business. He's box office. Box he's not yeah. DeSantis isn't box office. He's a he's somebody who actually can execute running. David Sacks (01:08:18): Right. But also that's that's why he be a good move for Republicans, I think, is because he doesn't give the Democrats as much to work with. Jason Calacanis (01:08:25): Yeah. Part of the state. David Friedberg (01:08:26): -- David Sacks (01:08:26): entertaining, but he gives his enemies so much to work with. Jason Calacanis (01:08:29): Alright. Another question from the back. Go ahead. Stand up. Tell us your name. Speaker 5 (01:08:33): Yeah. Sal Dahher from Boston. And The question is much less exciting. Regarding sort of, you know, problem of of bank bank runs and bank insurance, by the Fed and bailing out, you know, average people bailing out wealthy people. I've heard a lot of solutions about this. I've been selling careers in banking for a while. The idea of having senior management and the board have direct liability if the Feds have to step in to rescue the bank. Do you think that that could be a step in the right direction? in preventing banks from taking risks they really shouldn't have taken. I mean, the 2008 disaster, the subprime crisis could have been addressed with this. I think this crisis with SVP could have been addressed with management just having a lot more to lose. David Sacks (01:09:27): Okay. So let me just first take issue with the terminology of bailout. I know that's what everyone calls it. A bailout in my mind is when the shareholders or the bondholders of the bank get bailed out by taxpayers. That happened in David Friedberg (01:09:39): 2008. David Sacks (01:09:40): It did not happen here. Here are the question was whether depositors get made whole or not? I personally don't consider that a bailout. I understand that there are people who do. but it is a slightly different issue. As to the bank management, you know, you're talking about like a strict liability standard here that Basically, you're talking about piercing the corporate veil and making the bank executives and their directors liable for mismanagement of the bank. And that is Jason Calacanis (01:10:10): That's a pretty high bar. David Sacks (01:10:11): That's a really high bar. And the problem with it is that I I would never serve on the board of a bank. I mean, I probably wouldn't anyway, but if you told me that I could be liable -- Yeah. Jason Calacanis (01:10:21): Piercing the bell. David Sacks (01:10:22): Yeah. For for that, you know, those right. We have a thing called the business judgment rule, you know, in Delaware where if directors and officers of the company perform their job in a good faith way, making the best decisions they can, and it goes wrong, they're not typically liable for that. Maybe the corporation's liable. They're not personally liable. David Friedberg (01:10:44): I'd look if you did that, the managers wouldn't invest the cash in anything because they wouldn't wanna take any risk of loss. And in order to operate the business, which has a bunch of people working there and a bunch of banks that they gotta operate, they're gonna charge you a fee to hold your money for you. And so what happens is interest rates turn negative. and you basically have to pay someone to hold your money for you. And that's what's a little bit messed up about the way the banking system works today is you're effectively giving a money manager the right to invest your money for you They take your money. They pay you a low interest rate. They go invest it in high interest rate stuff by taking on risk with your capital, and, ultimately, they can take losses on that. And if you wanted to make them liable for those losses, they're not gonna take that risk. And the bank is gonna have to change its business model from being an arbitrage business to being a service fee business, and they're gonna have to figure out other ways to charge you service fees, including charging you to hold your money in order to make money. that's what a lot of the banks are now doing. First Republic and others have now proclaimed that they're gonna start charging a lot more service fees to hold your money, and they're gonna start taking a lot less risk. So we're already headed in that direction, but that's fundamentally what I think would -- Jason Calacanis (01:11:46): Well, let's take another question from the audience. Speaker 6 (01:11:49): Good evening. I'm Lisa Sutton, Las Vegas, Nevada, GP and the veteran fund. As investors, you all invest in entrepreneurs, theoretically support American Entrepreneurship. What role, if any, do you think VCs should have in shaping, advocating, supporting, conservative economic policy in the country? David Friedberg (01:12:11): 0. Chamath Palihapitiya (01:12:14): I think that we have to know the role that you're doing if you're a venture investor, which is you're buying a deep out of the money option. And I think that you wanna motivate the people that you are partnering with to take really thoughtful but outsized risk. And so I don't think there's a lot of room for conservativism. I do think that there's room for misallocation of capital And I think that there's people that can help guide that. But the reality is that when you start a company, it's David Friedberg (01:12:48): 95% Chamath Palihapitiya (01:12:49): likely to fail. And the venture investor is signing up for a 70 or 80 percent probability that they lose capital maybe a David Friedberg (01:12:59): 10 Chamath Palihapitiya (01:12:59): or 15 or 20% chance that they get their money back, and then the small 5% chance that it becomes reasonable. So in that lens, I don't think that's where conservative economic policies really should play a role. I think you just kinda gotta go for it. And if it's gonna win, it's gonna win big. And if it doesn't, you lose one extra money. I think like where you want conservative economic and rational thinking is when you go to the extreme other end, which is just like the large scale decisions that affect the economic vibrancy of the country in which you live. And there, on the margins, you probably wanna be more rational than irrational. But as a venture investor, I think you wanna be irrational. But I also think you have to be very judgmental. And the reality is that most companies aren't gonna work and most people this may seem controversial. Most people actually, when push comes to shove, are a little afraid of the decisions they need to make to be truly successful. They're not willing to fire the people that they need to fire. They're not willing to be extreme in the product they wanna build. They're not willing to price it. They're not willing to go to market in an extreme way. And it tends to be that these companies fail because of that. Jason Calacanis (01:14:17): A lack of courage, a lack of conviction. Chamath Palihapitiya (01:14:19): It's a lack of courage or conviction because that that's a very heightened word. I just think that when push comes to shove, most people implode with the pressure of making a very, very hard decision. Jason Calacanis (01:14:29): Interesting. Chamath Palihapitiya (01:14:30): Alright. In my experience, it could be yours could be No. Jason Calacanis (01:14:32): I mean, I I I agree with you largely when a start up does fail. If the experience people around it are watching and can't get through to the founder or the founding team, it it's typically they are blocking their own success They're unwilling to fire their cofounder, their CTO, as the example you're alluding to perhaps or raise the price of the software and lose some customers or to drive people to work harder because you've got a competitor in the space. And that's why you see extreme people win in our pursuit. And I think there's been just a great fallacy that's gone on that you can have live work balance or life work balance, and you could have this Nirvana where you have it all. The fact is the great companies are made by people who make great sacrifices, period, full stop. And if you're not willing to make the great sacrifice, you're not gonna have great outcomes. Speaker 7 (01:15:18): Hi, David Samuel. Earlier today, Jason, you had kind of a doomsday or AI panelist. And my question is, you guys have been thrust into the public spotlight. and we look at deep fakes in the next year or 2. As you talk about, you know, tweeting on Friday versus Wednesday, how do you think about somebody having each of you saying things that you did not say. And, like, how might we know whether Chamath said that or it was a deep fake saying it? David Sacks (01:15:46): I already have that problem. David Friedberg (01:15:48): Yeah. It was already David Sacks (01:15:49): so good. David Friedberg (01:15:50): -- David Sacks (01:15:50): insider last week where somebody was saying, I had a phone call I never had. Speaker 7 (01:15:54): So how do we solve this, especially for you as public as public David Friedberg (01:15:57): -- Jason Calacanis (01:15:57): Two things. Two things. One, I don't think people can say more outlandish and damaging things. in AI than we say ourselves on this podcast at times. But number David Friedberg (01:16:08): 2, Jason Calacanis (01:16:09): you know, as we've discussed many times on this podcast, we have rebooted our trust in institutions, what we read, what we see. And I think people are now assuming they're being manipulated, assuming something might be fake news or doctored. And I think it's like people are building up a much higher resiliency to bullshit lies, manipulation. And if I were to ask a hundred people, what is the bias of CNN, New York Times, Fox, MSNBC, NPR, David Friedberg (01:16:41): 90 Jason Calacanis (01:16:41): out of a 100 Americans could describe it almost exactly. People are not dumb. This is another fallacy I think we have in those countries that people are dumb and they're gonna get suckered. People are kind of figuring it out. And and we've seen deep fakes for, what, 5 years, 10 years now. And they're like, yeah. You know, Luke Skywalker didn't look really good in the Mandalorian. But there's a kid who redid it, and now Dolly Two is doing it. I think we're kind of inoculating herself to. What do you think, Friedberg? deep fakes and truth. David Friedberg (01:17:09): When the Friedberg press was invented, a bunch of fake shit was printed and people believed it. I don't think the current iteration with deep deep fakes is very different from any form of mass media being used to help people on truth. Chamath Palihapitiya (01:17:27): Let's call the crusades. David Friedberg (01:17:28): What's that? Chamath Palihapitiya (01:17:29): All the crusades. David Friedberg (01:17:30): Yeah. No. I mean but look. I mean, let Chamath Palihapitiya (01:17:33): you're right. You're a 100% right. David Friedberg (01:17:34): But I don't wanna speak about religion negatively in that way. It is one of many institutions of power that leverage mass media historically to get people to believe things, to do things and to ultimately be able to tax people and get them to provide capital and labor in the interests of those who are in power. And the the system of deep saking is one of a a long string of using the current toolkit to take mass media and and follow that same track. So it will be dealt with in the same way that things have been dealt with that have been fake news in the past, which is that there will be an opposing voice, and there will be counter arguments, and there will be debates and it will be rancorous, and it will be noisy, and it will be hard to discern. And alternatives will emerge, and tools that identify deep stakes will emerge And it will be the same ongoing battle and seeking of the truth that humanity has tried to do since the dawn of mass media. You know? Jason Calacanis (01:18:34): Yesterday's conspiracy theories are, like, tomorrow's Pulitzer prizes, I always say. Like, if you look at Shanine O'Connor ripping up the Pope's picture on Saturday Night Live -- Right. David Friedberg (01:18:42): -- Jason Calacanis (01:18:42): in protest and saying, like, they this is the true enemy. They're molesting children, and than the Boston Globe and the movie spotlight is about them. A decade later, winning a Pulitzer for uncovering what anybody who's in the room who's Catholic in the seventies eighties knew or had heard was going on. And so, you know, maybe the time frame is shortening. between when we're being lied to and when we figure it out. David Friedberg (01:19:06): I actually think it's interesting and good because it forces us to find ways to find the truth more effectively. And, you know, it kind of without the antagonism, I think it's, you know, it's it's absent. What is the truth? You you don't don't force that debate. You don't force that question. And this will start to reveal ways that we can kind of find things that are actual evidentiary things versus things that someone told me with either historically anecdote or innuendo or I'm a person in power or I'm an authority or I'm an expert, And nowadays, it's like, I'm a piece of media. You should believe me. Or here, I'm an image of a person, and that's not gonna be the case anymore. Hi. I'm Jeff. a full time corporate VC and part time Angel. My question's about AI and higher education. And it's actually some covert parenting advice so you can decide whose that's relevant for. My son just finished his freshman year of college, and I'm questioning what the future is for him in higher education given all the change that AI is going to gonna have on on every career and every profession And I'm wondering what advice you'd give to to your child or someone who's in college right now. For what what's an area of study that won't maybe won't be disrupted by by AI or or an area that AI, you'll get leverage from your education through AI. Chamath Palihapitiya (01:20:27): think the reality is that most of the existing jobs that we have in the United States are going to go to lower cost locations that have that tool chain to accelerate their capability. So we're gonna have to reinvent the workforce and the things that we do over the next 30 or 40 years to stay relevant. That's probably like I I think that should just be the operating principle. If you think about it, we used to run great call centers. Okay. Those call centers were outsourced to the Philippines in India. But in the next, you know, 5 or 10 years, you'll have this flawless unaccented English or even more Eerily, perfectly accent in English for the ZIP code of the person that's calling in so that it sounds like they're talking to somebody that's literally their neighbor. That's, like, just makes so much sense. Right? So it's like all this stuff is gonna happen where, like, all these classes of jobs are gonna go away. I saw this article where a lawyer, 2 lawyers, use ChatGPT to submit a legal brief. The problem was that it cited cases that didn't exist, and now they're gonna be disbarred. So this is like serious business. Right? Like, you can't do that. Like, that's, like, real legal Malthasons. David Friedberg (01:21:48): So what are your kids studying? Chamath Palihapitiya (01:21:51): In college. You know, if I had to choose something for my kids, I would probably I would probably tell them to do something mathematical or biological. The reason I would point them to math is that I think that it's irrefutable. There's this great clip between Ricky Gervais and Steven Colbert. You guys should go and Google this. But it's a clip where he's on the Colbert show, and Colbert is a deeply devout Catholic, and he's offended by the fact that Ricky Jerves doesn't believe in God. and he asked them why don't you believe in god and Ricky Jervay says, look, if we wiped out all the books in the world, in a 1000 years, everything that's scientific and mathematical would be reestablished. But everything that is religious or theoretically not, you know, mythical, if you wanna say, would look very, very different. That's why I don't believe in God. I'm not trying to question that. But It's a way of answering this question, which is I would try to point my children to the body of knowledge that's largely irrefutable. which is biological and mathematical versus belief oriented because I think these tools will change one's beliefs. Jason Calacanis (01:23:01): I've been thinking about this a lot too. I I think teaching them to be entrepreneurial resilient, worldly, ability to communicate, ability to lead other people in teams, That stuff's not gonna go away, communication skill, etcetera. And I'm encouraging everybody who I work with to just use chatgbt4 and barred every day for every single thing that they do. My base thesis right now is that the job freezes, the hiring freezes at all these companies is indefinite. I'm assuming it's indefinite because the amount of work it takes to write a job requisition is more work in some cases than actually automating with AI already the job function. And so I think 20 person companies might, you know, double in size in the next 2 or 3 years, but still have twenty people. This can be a big challenge for the for society. And if it if that does come to pass, there's just gonna be large swaths of people who are not gonna be able to get job interviews for anything other than service jobs. You know? We need a lot more plumbers, electricians, waiters, etcetera, those probably jobs won't go away, especially if we don't let people immigrate. So I I I am super enthusiastic about that efficiency, but I think it also means you have to be entrepreneurial because if you can't get a job and you can't get mentored, you better create your own opportunity. You better create your own company, and that's what I'm seeing the game on the field right now. 2 or 3 people who don't have job offers from Uber and Airbnb and Google and Facebook just saying, fuck it. Let's start a company. because there's nothing else for us to do. And those are highly skilled people right now doing that. David Sacks (01:24:39): I'll say two quick things about this topic. So One is I think there's a lot of AI fear porn out there right now, and I just think that, like, all these tumor scenarios are they're not gonna play out overnight. I mean, this is gonna take a while. 2nd, if you think about, like, job elimination it's gonna be some super specialized jobs. So for example, I wouldn't want to be a radiologist right now, but doctors will be fine. So I think if you're thinking about like going into a job category that's super specialized and clearly in the way of AI, then that probably is not a good idea. But most general skills like you're talking about, and most job categories are gonna be fine. There's just gonna be some specialties within them that make it dislocated. Like, I wouldn't wanna be a truck driver either, you know, because of self driving. But transportation companies are still gonna exist. So I think you just wanna be careful about super specialization, I think. But building general skills is always really good. That really should be the point of college Jason Calacanis (01:25:48): Where would you put lawyers and accountants on that? I'm curious. David Sacks (01:25:51): They're they're sufficiently general that I don't think they're gonna be eliminated. Jason Calacanis (01:25:55): But will they be able to do five times the amount of work? Therefore, we won't need as many? David Sacks (01:25:59): They they may be able to get more done. Yeah. I would expect them to be able to get more done. Yeah. But I I don't think necessarily think that means we'll need less of them. I mean, the old story about lawyers is that there was one lawyer in a town had no business. 2nd lawyer came to town, and they were both more busy than they knew what to do with. So, you know -- Yeah. Lawyers get 30% more productive. They file 30% more lawsuits and, you know David Friedberg (01:26:23): -- David Sacks (01:26:24): We're good. Yeah. Jason Calacanis (01:26:25): Alright. Let's take another question. These are great questions so far. David Sacks (01:26:27): Hey, guys. Speaker 8 (01:26:27): It's Rick Spencer. I hope Chamath gets to choose the wine this evening for dinner. Chamath Palihapitiya (01:26:31): I did not get to choose your wine, so I apologize in advance. Jason Calacanis (01:26:34): What what color out of its record here? This is the this is Chamath Palihapitiya (01:26:36): the 2018 Chateau Cone Lefong. Russo. Jason Calacanis (01:26:40): I'll it's I love the bestie. Okay. Question. Speaker 8 (01:26:43): So you've talked recently in in in episodes about the speed of AI, the adoption, and how the winners are still unknown. that was reinforced in the sessions today. A room full of investors. How are you thinking differently about your investment, you know, your strategic investment decisions and your strategy? are there opportunities to look at venture investing differently like venture Studios, you know, in the future of AI? David Friedberg (01:27:04): I had this conversation earlier today. I think started a company in 2006 where we took large datasets, and we built predictive models from those datasets. And we use those predictive models to make analytical tools available to a specific vertical in our case, agriculture farmers. And the models were both deterministic, meaning there was kind of definitions, algorithmic definitions of physical parameters, and there was, like, all the statistical inference that you get from large data sets. and it made recommendations for farmers. What a lot of people are calling AI today is fundamentally a predictive model on text, on language. I am making a language predictor that gives you a sentence. And it seems so profound because it is how we all interact with computers and interact with one another. And as a result, it is kind of viewed as this sea change across all of these industries instantaneously. It's this whole new era. But the fact is that, generally speaking, the digitization of things and the amount of data that's being generated on Earth is going up by some order of magnitude every number of months, and our ability to make predictions and build predictive models that are useful to specific vertical segments is improving every sequential cycle that this is happening across every vertical. and it has continued, and it hasn't changed, and it's not any different. So there's a in this area of genomics and bioinformatics, There is an absolute sea change happening in human health in synthetic biology, and our ability to understand and predict the biological world and make changes and create new drugs, create new systems for producing molecules, for producing things that humans consume. And it is all buoyed by machine learning applied to large data sets in Genomic and other metadata associated with human health and biology. And we're seeing the same thing in other areas, whether it's chemistry, material science, industrial application, consumer markets, and so on. David Friedberg (01:29:05): The era of what people are now calling AI is an interface layer of language that's really creating transformational opportunities on how these tools, how these systems, how these models can be utilized and provided to all these different verticals, and allows us to rethink business models to rethink interaction models and to really change the economics of different businesses and and the utility and the productivity of humans because it is about speech. It is about communication. It is about what we fundamentally do as a species. So I would argue that the general trajectory of machine learning, the general trajectory of data generation and our ability to make predictions, generate value across all these different markets, is continuing in the way that it has been continuing for the last 20 years, and it is profound in its own right. And I wouldn't say that there's a massive sea change in that evolution because of large language models. Large language models create another set of opportunities. So would kind of create a distinction and make sure that the categorization of the investment opportunities in large language models be assessed on its own. And everyone's all over the place, as you guys probably heard today, foundational models are getting disrupted every other week. They're being decreased in size, parameters are being reduced. They're being commoditized. You can run these things on M2 chips. everything is up in the air right now, and it's freaking nuts. You're gonna invest in a company at a $500,000,000 valuation. And 6 weeks later, it's gonna be worth 0. because someone open source the exact same thing that you can now do for a 100k. So that's very difficult and very different than but there are still like these incredible points of inflection happening across all these other industries with respect to machine learning. And that's where I spend my time. Jason Calacanis (01:30:40): Chamath, you wanna add what you're looking at? think this is gonna be the big question. Yeah. David Friedberg (01:30:44): 6 Chamath Palihapitiya (01:30:44): or 7 years ago, there was this Google earnings release where they talked about building their own silicon. I've told this story before, but I pinged those guys, and I was basically like, I just wanna meet the team that built the TPU. Long story short, a year later, I put them in business. And, you know, we've been building silicon for this moment for years. It's been really, really hard. And the reason it's been really, really hard is that NVIDIA is just really, really good. CUDA is very, very complete. And it's just very difficult to justify why one would build Once you have something that you think is profound, through, you know, implement multiple SDKs to, like, multiple points of silicon just doesn't make any sense. That being said, I still think you need to be at the absolute bottom of the stack and the absolute top of the stack. I think I'm a little too biased for saying the former. which is I'm hoping that there's vendor diversity and Silicon diversity because I think it's gonna be really important. I don't think we wanna have a world where NVIDIA runs away with I think there's investment opportunity there just because I think everybody should want that to happen. And then at the absolute top, Preberg's right that all these foundational models, I think, are changing so rapidly that the thing that you wanna figure out is, like, What are you seeding it with to drive learning that's unique? And that's a data problem. So there's an example that I've given. This was an example given to me by Nikesh Aurora. So it's not I'm not gonna take credit for it. He's the CEO of Palo Alto Networks. But he was telling me, you know, when you look at travel, the travel space, all the public travel companies are, like, David Friedberg (01:32:31): $300,000,000,000 Chamath Palihapitiya (01:32:31): of public market cap. Expedia, Travelocity, all these companies, but they're pure middlemen. And they sit on top of a data feed that comes from a handful of companies. One of them is Sabre. And so I went in and I looked at Sabre. Sabre is like a $1,300,000,000 company. small little company. But they are the ones that go into all the airlines, extract all this gobbledygook data, normalize it, and allow Expedia Travelocitybooking.com to exist in a world of machine learning where an AI where, theoretically, you can conversational languages in inside of WhatsApp or Messenger or Instagram. You see this beautiful picture. You're like, book me a ticket to that place. Well, Sabor is actually the key value creator there. And all these Expedia examples that are plugins at GBT make no sense. They make no economic sense. Those companies should go to 0. So I've used that as a way of forcing function for me to try to prove that there's really these 2 barbells. It's a barbell. Book ends. One is a silicon and 1 of these sort of, like, data providers. That's probably an investable thing that's defensible. Everything in the middle, I think what what Fibroek said is true, which is, today, it looks like it's worth a couple David Friedberg (01:33:52): $1,000,000,000 Chamath Palihapitiya (01:33:53): to Mars words on. Nothing. And so I think you have to be very careful. David Friedberg (01:33:56): if you listen to there's an interview that Stephen Wolfram did with Lex Friedman, if you guys listened to it a few weeks ago. Jason Calacanis (01:34:02): I had him on my pod. A couple of weeks ago, I haven't heard the Freak. Wolfram? Yeah. incredible. Yeah. David Friedberg (01:34:06): He's incredible. If you listen to that interview, I think Wolfram does a great job of describing the difference between inferential models or statistical models and computational models. Statistical models are where you take large data sets and you build statistical models that infer and predict things in the future or predict things that you ask it to predict from the dataset that it's trained on. And then it creates a statistical representation that has a probability of being right or wrong, and prediction it makes, and it creates a distribution of outputs from the model. And you can train a model from nothing today using a bunch of tools that are open source and generally available and a bunch of great silicon and all this amazing stuff that's that's that's now out in the world. But there's a bunch of things that you can't generate data and you can't necessarily train models on, and that requires computational models. models where you actually have means that it doesn't have a distribution of things that could happen. It has one thing, and it calculates it. Like, 2+4 is 6. there isn't a probability distribution on it being 6. 2+4 is computable. It is calculable. It is 6. The great unlock that I think is ahead of us still, generally speaking, with respect to large language models is the connection back to computational models? Is the connection back to structured data where you can make requests and integrate structured data into the output? combined with inferential output and computational models where you can take the inference, you can take the request and figure out what computational models can I now run in addition to making a prediction about an output. And that where so much of the value is gonna lie. And it's gonna require incredible software engineering talent, applied math, statistics, All the stuff that's made data science generally speaking so successful over the last 2 decades is gonna continue, and it's gonna be this integration between computation and inference, and it's gonna be applied in lots of different markets, and it's gonna be really powerful. And we're all gonna have our minds blend. Jason Calacanis (01:36:13): Just in terms of, like, the seed stage or super early pre seed stage. David Friedberg (01:36:17): 2 Jason Calacanis (01:36:17): or 3 people who are obsessed with this technology, who are playing with it every day, who are keeping up to speed on it, and who understands some customer base, whether it's delighting themselves or delighting some other customer base, I'm willing to take that small bet on, that 100 k to 250 k bet. Because in the previous paradigm shifts or platform shifts, cloud computing, apps, and before that desktop computing and the web, You saw people start tinkering with stuff and whatever their first two ideas were are long forgotten because they figured something else out. And I kinda feel like that's the stage win. There were a lot of people who are playing with Iphones in the App Store, and, you know, they made a calculator or a flashlight that got built into the operating system as I think Friedberg is is specifically pointing out. Like, it you could just be part of the model and your whole business is wiped out. We have one company that's trying to make itineraries for travel. And I looked at what they're building, and then, you know, they're figuring out prompts. They're figuring out the interface. They're figuring out what people want. And I did the same searches on Chamath GPU before, and I was like, it's not that much better what you're doing, but it's better and your ideas are better. And so I think that the win the race and they only have to please, you know, whatever number of users. And this company could wind up being, like I said before, a David Friedberg (01:37:34): 20 Jason Calacanis (01:37:34): person company that does 50,000,000 in revenue. And I think that's gonna be a very interesting future. And it reminds me of the app economy. There were a small number of acts, things like Distro Kid or Instagram, where small teams built things that printed money and had incredibly high margins. So I think that's part of the opportunity here. I do agree with Jamal's point. Data is the new oil. whatever dataset you have that you have that's unique is incredibly powerful in terms of defensibility and could help you to outpace 1 of the generic models. David Friedberg (01:38:07): This two's been waiting. Jason Calacanis (01:38:08): Okay, dude. He's been waiting. Speaker 9 (01:38:09): Alright. Thanks. Jason Calacanis (01:38:10): Lightning round. Speaker 9 (01:38:11): Thanks, David, for the mic. My name is Rod Masui with Transform DC in Francisco. My question is for you, Chamath. In the last David Friedberg (01:38:18): -- Chamath Palihapitiya (01:38:18): Finally, Jesus Christ of myself. What the fuck these guys in your neighborhood? Speaker 9 (01:38:25): So on on the last one or 2 episodes, I can't recall. You you brought up this whole idea as how do we get non US born American patriots run for president. So as the growth hacking, drunken master, What do you recommend? How do we propel this idea? How do we have it pick up steam and not have to wait 25 years or whatever, you know, Jason Calacanis (01:38:48): not to wait. Chamath Palihapitiya (01:38:49): It can't happen in the next few years. I think I do think there's a small probability. It could happen in 25 to 30 years, but, like, the problem is that the people that David Friedberg (01:39:02): Only Jay Cal can be president on the stage, by Chamath Palihapitiya (01:39:04): the way. The 3 of us are poor. Jason Calacanis (01:39:06): this is. But I'll put you guys in my cabinet. You've all got positions. Chamath Palihapitiya (01:39:10): I think the how is that you have enough bottoms up citizen journalism and opinion formation that people can independently decide that on the margin, this is a good idea. Like, look, I am not interested in running for government. But if David were in charge of something very important, treasure your state, I would have immense confidence. If Friedberg were in charge of something, I would have immense confidence. So the idea that guys like this The idea that guys like this and and Oh, Jason Calacanis (01:39:46): because I'm born here, so you don't have to say David Sacks (01:39:48): that. Yeah. David Friedberg (01:39:48): Yeah. No worry. You'll you'll get the department of sanitation. We're definitely gonna win. No. Chamath Palihapitiya (01:39:52): So for sure I David Friedberg (01:39:53): can win everything. I do -- -- David Sacks (01:39:54): master general. Jason Calacanis (01:39:56): I I Chamath Palihapitiya (01:39:57): do think it's a little it's a little crazy that the guys like these 2 get disqualified just because they immigrated when they were like 4 and 6. That's insane. So I I think that if we're in the business of actually deciding that you want the best people for this country on the court so that we keep winning championships, You don't tell Jonas, oh, you know, you're born in Greece, so chow chow. You don't get to play. That's crazy. It's crazy. Put them on the court and let them win. So I do think it takes 25 or 30 years, though, of us saying this because it has to be a groundswell of people that say, I just wanna win because I'm seeing all these other countries starting to win more, and I don't think I want that for my children. I did I did I do think it takes a generation. I don't think it happens today. Jason Calacanis (01:40:45): Alright, guys. In a couple of hours, it will be the Sultan of Science's birthday. Chamath Palihapitiya (01:40:52): Anne Allen Kittings. Anne Allen Kittings. And David Friedberg (01:40:54): -- Chamath Palihapitiya (01:40:54): Yeah. That's right. Allen Kingsley. Jason Calacanis (01:40:57): So I thought it would only be fitting if a 100 all in super fans took a moment -- I'm Chamath Palihapitiya (01:41:05): gonna sing in Italian. David Friedberg (01:41:06): -- Jason Calacanis (01:41:06): and sang happy birthday to Dave Friedberg. David Friedberg (01:41:11): 3, 21. Jason Calacanis (01:41:14): Happy birthday David Friedberg (01:41:16): to you. Happy birthday to your free bird. Happy birthday to you and many more. Jason Calacanis (01:41:35): Alright, Sultan of Science. I know your wish was to be a top 10 podcaster. It's come true finally. David Friedberg (01:41:42): I'm like, I gotta go into podcasting. Yes. Jason Calacanis (01:41:46): Thank you, Ashley. The way here when it's dried. Rainman, David Sachs. David Sacks (01:41:59): And it says, open source it to the fans and they've just gone crazy. Jason Calacanis (01:42:08): like, white hair when they're dry. Besty's are bad. Oh, no. That is my dog Chamath Palihapitiya (01:42:22): We should all just get a have one big huge order because they're all just useless. It's like it's like sexual tension that we just need to release somehow. David Friedberg (01:42:31): What? You're the b p. Jason Calacanis (01:42:36): We need to get mercies are back.