LK-99 风波，僵化的建制派，惠誉下调美国评级，特朗普再被起诉

Jason Calacanis (00:00:00): Woah. Woah. Woah. Sacks found the gel. Oh my god. But this guy, he's running for office. If he shows up with a red tie next week, we're fucked. That's the end of the show. He shows up with a red tie and a blue shirt. Are you coming out of your law retirement? Are you gonna be an active lawyer defending Trump? Chamath Palihapitiya (00:00:16): Sachs, you look really good. I gotta say with the with the jump. That looks that's a really good look. Yeah. David Sacks (00:00:20): That's got a shower used to comb. Jason Calacanis (00:00:22): Oh, the weekly shower, didn't I? David Sacks (00:00:24): Good luck. Right? Speaker 4 (00:00:25): Yeah. Jason Calacanis (00:00:25): It's not a bad look. Did you use soap? David Friedberg (00:00:27): Did you, do Speaker 4 (00:00:28): you know? Oh, no. David Sacks (00:00:31): I didn't have time. Jason Calacanis (00:00:32): Didn't have 90 seconds? Yeah. David Sacks (00:00:33): I didn't wanna keep you guys waiting another 2 minutes. Speaker 6 (00:00:38): Your winter's ride. Jason Calacanis (00:00:41): Rainman, David Sachs. Speaker 6 (00:00:45): And I said we open so sent to the fans and they've just got a reason Speaker 4 (00:00:49): for it. Chamath Palihapitiya (00:00:49): Love you. Hi, Jason Calacanis (00:00:53): everybody. Welcome to another episode of the All in podcast. It is August, and we just might have had the most consequential week in terms of politics and science. In a long time, it could be it could be the week of the year. Friedberg been going nuts inside the group chat because Everyone is trying to replicate this LK99 room temperature, semiconductor experiment. Superconductor. Superconductor. Yes. So god. I I mean, this has been I I what has it been, like, 10 days? And now everybody is on Twitter trying to recreate this, maybe I should just let you queue this up, Friedberg, since this is the first time, perhaps the last that we're gonna start the show at science So science corner take over a week. Tell us, is this legit? Cause you flip from this as a fraud to this as changing the world Like, every day, you you seem to have a new piece of evidence. Where where are you today with this? Is this the real case? David Friedberg (00:01:53): It's probably it's probably somewhere in the middle, but it leads to a path that could get us to the Holy Grail, which is room temperature, superconducting material, which we've talked about twice on the show for, and I encourage folks to go look at the episode we did a couple ago after the original claim was made a few months ago that turned out to not be true. But the description in the paper that came out on how to make this material was chased by hundreds of labs around the world over the last few days. Folks have been live streaming it on these Chinese websites, Billy, Billy, and Twitter, and Twitch. Everyone from Russian scientists to Chinese, to Korean, to American, to European, I will say one thing that I think is really profound, which it is this is the first time in a very long time that I've seen so many people share a unified voice about optimism, about an abundant future, optimism about a big breakthrough rather than get on social media to share a voice about fear and anger at someone or something and to hear everyone around the world get together and be excited about the potential of this discovery and its applications. It's really profound to see, and it's really amazing and wonderful to see, Now where we are, a bunch of labs took the described chemical structure of this material, LK99, which has lead and phosphorus oxygen and some copper in it and put it into these modeling systems, these computer modeling systems to try and understand where do the electrons flow? Where do the electrons sit in this material if this material is made the way it's described? And, 5 different labs have now published papers that show that the way that this material is supposedly produced it should create these pathways or these energy states with the electrons that theoretically could enable super conductivity at a very high temperature. And so that's an, a very confirmatory signal that computer modeling of the electron clouds, because remember electrons, even though they move around the nucleus of an atom, we only kind of have a probability statement of where they are. So if you look at all the probability statements of all the, atoms stuck together and you try and figure out what's the aggregate probability of where electrons are, it indicates that there are these pathways that theoretically could allow for electrons to move freely through the material and be completely void of any sort of resistance, which is super conductivity. David Friedberg (00:04:26): And and and so that's what's really profound about the modeling outputs from 5 very separate independent labs. Jason Calacanis (00:04:32): Just so we're clear, when electricity normally moves down an electric wire or in computers and CPUs, GPUs, whatever, there's resistance. That resistance results in loss. It results in heat. And the only way we've been able to reduce that loss is by making it freezing cold, like significantly cold. David Friedberg (00:04:51): Totally right. Yeah. So now Jason Calacanis (00:04:53): if we were to do this when we didn't have to make a cold, that means that these superconducting experiments move from the laboratory where it's forced to be called to the real world. Our desktop, you use an analogy and chat. Chamath Palihapitiya (00:05:05): I don't Jason Calacanis (00:05:06): know what was really interesting of, like, a superconducting road where and and then you don't lose energy. Right now, much energy do we lose transporting into our houses? David Friedberg (00:05:14): Right. So, you know, I would say on the order of 70% of energy we produce is lost to heat and friction. Think about moving a car down the road. When you move a car down the road, you're having to put energy into overcome the friction of the car hitting the road. So if the car could hover above the road, the friction goes away and the energy needed to move the car goes way way down. When you build a data center, the electrons that are moving through the copper and the semiconductors bump into other atoms, when they bump into the atoms in the material, they shake those atoms. When atoms shake, that is heat. So that's why copper wire heats up when you put electricity through it. You're moving electrons through it. Some of those electrons bump into the copper atoms, shakes the copper atoms, they get hot, and then some of the electrons make their way through. The rate at which electrons are bumping into other atoms is the resistance of the material. So and so so all this energy is going into cooling down data centers and all this energy is lost in computing to heat and, same in in electric motors could be reinvented. Semiconductors, integrated circuits would be reinvented. And like I said, If you had enough of this material, you could put it in roads. And because superconductors also reflect magnetic fields, you could put magnets on the bottom of cars and float them above the the ground. And cruise around without any friction. And if any of this is Jason Calacanis (00:06:28): true, the 70% loss of and then all this energy put into cooling data centers, we could be looking at doubling or tripling the amount of energy available because we built a certain amount energy infrastructure. So this would be all gains if we could figure out how to leverage this technology. Massive gains and massive abundance that would lower the cost of electricity by 10%, a 100%. David Friedberg (00:06:53): I mean, look, assuming huge infrastructure investments, which would take probably decades to do. Sure. You would you would get there. But in the near term, there are these incredible applications, quantum computers are built using little superconductors as the qubit. And so the superconductor holds the qubit state. So this idea that we could now have room temperature quantum computing is also Speaker 4 (00:07:13): a very David Friedberg (00:07:13): profound one game changer. Low cost. And and the first thing that would be changed is likely electronic components. So we would take electronic components and redesign them using superconducting material that would allow you to reduce heat loss and energy loss. And that would have a big transformative effect on, for example, the big effort right now to make more AI chips, GPU chips to do matrix transformation. Jason Calacanis (00:07:33): There is some precedent for this. People are now creating optical bridges between GPUs and CPUs in order to reduce the heat. So they're using optics basically light to transfer data. David Friedberg (00:07:45): Interconnects. Yeah. Yeah. Jason Calacanis (00:07:47): That's been the big lift right now from what I understand in GPU and data centers is Chamath Palihapitiya (00:07:52): just have to convert. Yeah. David Friedberg (00:07:53): Yeah. It's it I mean, we could go on for hours on that, but, like, yes. I mean, this would just be a game changer electronic component. Right. Jason Calacanis (00:07:59): Photonic chips. Right. Yeah. David Friedberg (00:08:01): Photonic chips. But, look, this this is obviously a little bit separate, but here's where we are. So LK99, there's all these simulation models that show this thing could work. But there's 2 two things I will say came out of this from some of the simulations. The first is remember this is a crystal with mostly lead atoms and these lead atoms, some of them get replaced by copper. And when when they get replaced by copper, it causes the crystal structure to change by point 46 degrees. What the Koreans say. The angle changes by point 4 60 degrees. And when that happens, that bending causes the electrons and all the atoms in the crystal to overlap slightly, And that overlapping effect causes this free flowing electron tunnel, that then theoretical that is the theory for why the superconductor Now, what the simulation showed is that you have to replace only one of the lead atoms, not any of the other ones in order for this to work. And that could explain why everyone's having different results in the lab trying to reproduce this. Ah. Because when you bake this stuff in an oven, if the copper gets into the wrong atom space in the crystal, it doesn't work. And so that's why some of these things might end up looking good and some of them don't look good and some of them There was a lab yesterday in China that published no resistance, but they had to cool it down to a 100 degrees below freezing. And so it wasn't at room temperature, but it did superconducted. It did have no resistance. Chamath Palihapitiya (00:09:21): 170 Kelvin. I Jason Calacanis (00:09:22): think it's where they come. David Friedberg (00:09:23): Yeah. So a 100 self a 100 below 0. So in other words, there is Jason Calacanis (00:09:26): key, there's a key here in the molecular structure that you have to just thread perfectly Speaker 4 (00:09:31): at the David Friedberg (00:09:31): right you have to replace the right led Adam with the in order for this to work. And so that's a technically very and and what happened, by Jason Calacanis (00:09:38): the way. A fidelity issue. That's a tool issue. Like, you have to have the right tool to do it, or is it luck or right now. David Friedberg (00:09:44): So so here's the crazy story, and I'll tell you as this. I don't know how real this is, but the guys claim so remember, these two scientists, Lee and Kim, supposedly saw this material in a lab in 1999. That's why it's called LK, Liam Kim, 99. And so in 99, they came across this, and they could not replicate it. And they had no idea how to make it again, and it disappeared, and they didn't have the sample again. They then spent the next 20 years of their life. 1 was a college professor, and the other one worked for LG for as a battery engineer, and they just had these random normal everyday lives. It reminds me of Dennis Quade in the movie, The Rookie, where he had, like, this amazing arm, and he was gonna go to the MLB. And then something happened, and he spent the rest of his life as a high school PE teacher. And then 20 years later, he gets his arm back and he goes, city hall b, and he plays a in a major league baseball game. Because all of a sudden, and during COVID, these guys got some funding. They set up a company. They went into a lab. And they rediscovered this material. And, apparently, this is the rumor. I don't know if this is real. The rumor is they had it in they were baking it in an oven in a vacuum sealed cube. And when the guy took it out of the oven, he accidentally bumped into a table and the tube cracked. And when the tube cracked, it did something to the material then they measured it and, oh my god, it's room temperature superconductor. That's the the current theory of what the rumor of what happened as a video. David Sacks (00:10:58): That's like Peter Parker being bitten by a radioactive spider. I mean, it doesn't make any sense. David Friedberg (00:11:05): Yeah. So here's the drama. This guy, Kwan, got inserted to oversee them as, like, their CTO, the guy that gave the money to Q Center said he's gotta oversee you. Quan apparently got fired from his job in March, and he was kicked out of this company was no longer affiliated. And the rumor is that Kwan took all the lab data. And these guys, in 2020, during COVID, they discovered this. They started filing patents and working on the manufacturing process to figure out how to replicate it and do it again. Say it all this data, but they weren't gonna publish it. They didn't want the world to know about it yet. And then all of a sudden, Kwan gathers all this data probably disgruntled after getting fired. Puts it into a paper and puts it on the internet. So that's the first paper that came out. Yeah. Jason Calacanis (00:11:42): There's a website called r a r x IV. Is there a pronunciation for this website? So this is where you David Friedberg (00:11:48): can open source file scientific papers. Right? Jason Calacanis (00:11:51): Okay. So this is a place for dropping papers outside of the the traditional journal. David Friedberg (00:11:59): Yeah. The the traditional journal process requires peer review, there's editors at the journal that decide whether or not to publish your paper. So sometimes Gatekeepers. Yeah. Gatekeepers. And so if you don't wanna do that, you just wanna get a story out to the world right away. During COVID, everyone was publishing on the site while their updates on research they were doing to help the world figure out what's going on with COVID. So it's a great place to just hit the world with your data, hit the world with your findings. Jason Calacanis (00:12:21): This is like acoustic raw papers, and it's called archive arxiv.org, if you wanna go see it. David Friedberg (00:12:29): So anyone anyone could publish a PDF. No one knows if it's real or not. It hasn't been peer reviewed, etcetera. So this guy calls 1. Yeah. So Quan drops the paper with his name, Lee Kim and Quan on the paper. Only three people can win a Nobel Prize. So the theory is he did this to get his name out there to make sure he could lock in his name for the Nobel Prize. Wow. And then within a day, Lee and Kim and four people they've been working with, but some including some folks in the US, published another paper with better data, but it was also rushed out. And so both papers are pretty ugly. I gotta be honest. They're, like, pretty messy. They don't have a great deal of clarity. There's errors in them. There's mistakes. There's redundancy. There's little basic chart editing errors. Stupid stuff. Clearly, this was a rushed job, but these guys rushed out and said, you know what? If this is gonna be public, we now have to correct the the the story and say what happened. Jason Calacanis (00:13:15): They wanted to get their claim in to get their noble peace prize, which would indicate that would lean towards a piece of evidence as would people funding them 25 years later. That would indicate maybe there's something there. David Friedberg (00:13:27): Two things worth noting on the simulation stuff. Number 1, obviously, you gotta get the copper in the right place. And the production way to do that how do we actually engineer that to happen? It's not really clear. Making it in an oven clearly is creating what's called heterogeneous results, meaning everyone's getting different results. Around the world that have been doing this for the last couple days. And everyone's really confused. Is this real? Is it fake? I don't know. But that simulation explains why there's maybe lots of different results. Another comment, it turns out that one of the simulation teams said, hey. If you put gold instead of copper in the spot, it's a better superconductor. It could actually be a better material. So it's opening up all these paths for exploration that we had never considered before that there's this whole new approach to creating superconducting materials that was not on anyone's radar before. This is opening up a whole new realm, and I think this is gonna unfold over the next couple of years with more material discovery, more invention coming off of this initial discovery and simulation model, that then op offers all these other opportunities for creating potentially new materials that maybe are easier to manufacture and better to produce. And the final thing I'll say is that there are some teams that are commenting that are saying that this thing may be superconducting. But only on one dimension, which means along a line of atoms or line of molecules in the material. So normal superconductor about them as like a 3 d matrix. And the electrons can flow through freely through any direction through the matrix, through the crystal. And in this case, they're saying the electrons can only flow freely across a line in this material. And so now there's another question of, wait, you manufacture lots of lines to run-in parallel to make this thing truly superconducting at scale. So that's all the hard technical stuff that's emerging right now. Whether or not this actually does turn into a room temperature superconducting material that can be industrialized and used in all these applications everyone's really excited about, I think it's probably months to years away from knowing. But at this point, there's a great set of indications that, oh my god, we might be onto something new. David Friedberg (00:15:24): There's a whole new path of discovery a whole new path of engineering and invention. And it's amazing to just see everyone gather around this and get so excited about it because it really will, change so much about the world and create extraordinary abundance and prosperity for humanity if this proves to be real and industrializable and and scalable. David Sacks (00:15:41): Shamak, can I can I ask a simple question here? Well, when you say if this seems to be real. If nobody has reproduced the result, why is there any belief that this is real? Chamath Palihapitiya (00:15:50): There are properties of this that, you know, I think we have to take a step back. We have found superconductive materials in the past. There are many ceramics that are superconductive, merge period is superconductive. There's all kinds of elements and materials and compounds in the physical world that we've already figured out have these properties. So this is not like a new thing that's never been found before. It's just this idea of trying to find it at a certain temperature where it could exist naturally in the normal world without all this expensive. Cooling. Okay. But there is a separate thing, which is that we also have found a whole bunch of materials that look and behave like superconductors, but are really not they're what's called just diamagnetic. And I think right now what what people are trying to sort out is is this a clever diamagnet? Is this diamagnetism, or is it super conductive? And these are huge differences that swing this from, yeah, it's kind of a cool thing. And yeah, whatever. There's a bunch of other materials we found that are like this too. Wow. This is transformational. And right we don't know any of that. And I think that all of the mystery around this is mostly because people can be on one side of the debate or the other literally by the second based on what new simulation or what new piece of research people are putting out there. But you have to remember, like, Dibagnetism is like a property of matter. Superconductivity is a state of matter. It is totally different. All superconductors are diamagnetic, but all diamagnets are not superconductive. So we could just be extremely excited about not much of anything, or this could really be a breakthrough. David Friedberg (00:17:39): If what the Chinese guy said is that they were able to cool this thing down and get it to be super conductive, then that does Chamath Palihapitiya (00:17:45): At 170 k, it doesn't mean much, Jason Calacanis (00:17:47): in my opinion. David Friedberg (00:17:48): Right. It's not room temperature, but it does indicate that this material can be superconductive. Chamath Palihapitiya (00:17:53): Look, there are there are many materials like this. There's like a lot of forms of red matter that we've already found that at that temperature gradient at that range of temperatures can be superconductive. It's not practically useful at that point. David Friedberg (00:18:05): Yeah. That that's right. Chamath Palihapitiya (00:18:06): I don't think you're going to see like some massive revolution. So on the betting then, I make bets. I think I talked about when there was this guy, Rhonda Diaz, that had to try this stuff and he was sort of refuted in what he was working on. But 18 months before that happened, I was trying to get a deal done with the University of Rochester to buy all that IP. So I've been grinding in and around this space for a couple of years. My intuition on this is that this is diamagnetic. And Yeah. Awesome. I think we're gonna find that, you know, it was it's like yet another material added to the list of materials, and it's okay. But hopefully what it really does is it is it sparks an interest in, in a lot of other people putting more money behind this. Jason Calacanis (00:18:48): Nick, if you could pull up this Manifold markets, there's a prediction market called manifold markets that people have been sharing a link from betting markets where people bet either side of this will, LK, 99 room temp ambient pressure, serving conductivity, Preprint replicate before 2025. And you can see it's about 30% chance. You you what do you think of the prediction markets assessing this? Friedberg? David Friedberg (00:19:13): Yeah. I think it's probably that's probably a good handicap for where we are. I'll say when you look at a diamagnetic material. And so what that means, a dimagnet will expel magnetic fields of both polarities. A paramagnet will reflect the north or the south pole. Its north pole will reflect the north pole of another magnetic material, right? Diamagnets, you can put north or south pole and they reflect both. And there's plenty of videos you can watch of putting a frog in, like, a 10 Tesla machine and the frog floats. Technically, a frog is diamagnetic. But what happens typically with, dimagnetic materials is they orient themselves while they're while they're freely floating into a particular direction. So there's gonna be 3 things people are gonna be looking for in terms of confirmatory proof on LK99. The first is does this material float like a superconductor over a magnetic field? Because remember, superconductors perfectly spell magnetic fields. They are diamagnets to the absolute degree. They perfectly reflect all magnetic fields. If you put a superconducting material above a magnetic field, it should kind of float freely and spin around and stuff. If it orients back to one position, it probably means that there's something going on where it's maybe not a perfect superconductor. Now all these video the second thing you're gonna look for is 0 resistance. So can you actually pass an electric charge through it and have no resistance in the material. So you're seeing data coming out now that's indicating we're seeing that, but we're seeing it at a low temperature. No one's yet replicated this at room temperature. And the third thing is a transition, which means that there's a point where it shifts because that's a classic characteristic of superconducting materials that there's a transition temperature or transition phase where the material becomes superconducting or it's not superconducting. So those kind of generally those 3 experimental proof points are what everyone's looking for. Thus far, the videos we've seen look like UFO or Bigfoot videos, They're freaking grainy. They're like, you know, you guys have seen some of these videos that have come out. David Friedberg (00:21:07): They're like, at a distance. It's like, wait, why didn't you do the whole angle? Why did you only take a picture? Why didn't you do the video? There's this woman in Russia who's Jason Calacanis (00:21:15): a scientist. We're now in UFO territory. People are jumping in. David Friedberg (00:21:18): I mean, it's super, like, there's a raw there's a little flake of here's a video of a little flake of a material that someone supposedly made in the lab, or it could be just missing. Right? And they put it over the super the over a a very strong magnet, and this is the video they got. It's super blurry. There's a woman in Russia, and she totally reinvented the manufacturing process. She's actually well known scientist, so she's not BS. And she said, I made this thing in my house using a furnace, and I used a whole new process. So she does this whole new process. She live streams the whole thing. And then she puts out a video of the thing floating in a straw. It's, sorry, a video photo, and it's a blurry photo. And people are like, show us the video, show us that it's real, and she's refusing to. So this whole thing is feeling a little like there's UFO, bigfoot type people out there, that we're not really seeing clarity on is this real? And then, obviously, the resistance data, there's very credible academic universities coming out. And I will also say there are a number of labs. There's one in China And the one in China that measured the the the 0 resistance at negative a 100 degrees, they created 8000 samples. So they found one that worked. There's another lab that did 8 different pathways of manufacturing it in China, and they said we can't find any of that work yet. So, you know, there's a lot of negative indications as well, which is why the prediction markets are probably right. But I do think that the theoretical explanation that you have to get the copper Adam to replace the correct lead atom in the crystal structure explains a lot of the heterogeneity and results and the reason why people may not be able to replicate this And if someone could crack the code on how do we actually engineer this thing and produce it correctly, based on the theory, maybe we'll see different better results. David Friedberg (00:22:54): But Again, that's also theoretical because no one seems to have nailed the manufacturing process here. So lots of data coming in every day. By next week, we could be clapping and, you know, cheering. Or, you know, we could sort sort of be on this very long grind, sort of like Russia, Ukraine, just a long grind. And it's a it'll last years, and maybe someone will win, maybe someone won't, or maybe it just opens up a whole new set of explorations for new superconducting materials at room temperature that could change the world. Jason Calacanis (00:23:21): I gotta say the thing I love most about this is, like, we have this Oppenheimer film comes out. And at the same time, this happens. We got the UFO testimonials, you know, in congressional hearings, all of this energy at the same time, of people who are just really stoked to do material science, to do basic science to figure out big problems. And, I agree with you. The optimism around all this is is I mean, how how does David Friedberg (00:23:48): something else tell me something else in our lifetime, in our, in the last decade or 2, where we've seen the whole world say in a positive way, something great could happen. Instead of something bad could happen and someone's to blame for something. I mean, it really is, in my mind, the first time I've really seen this happen in a very long time, Maybe the internet was a was a yeah. Speaker 4 (00:24:08): I would David Friedberg (00:24:08): say the kinda great moment came to me. Jason Calacanis (00:24:10): Yeah. Everybody being connected, everybody being able to share information, for all David Friedberg (00:24:14): of the world information on Twitter and Billy Billy and YouTube and, like, all sharing this stuff and saying, my gosh, we could have this breakthrough together as a as a civil, as a species, not like a country, not a individual, not a who messed up, who did something wrong, who's to blame, who's on the other side. It's like dude, if we all do if this happens, we're all gonna be, like, chilling on the beach. This is gonna be amazing. Like, this is awesome. Jason Calacanis (00:24:37): All of us. We're gonna have a a rash of VCs running into this next and start funding this stuff. Material science. Yeah. David Sacks (00:24:46): Yeah. I mean, my attitude is kinda like wake me up when you know it's real. Jason Calacanis (00:24:50): Mhmm. David Sacks (00:24:52): Because it's nice that if this is real, then It's great that there's all this positive energy around it, but that's like a big caveat. Until we know that there's something real here, I think it's premature for everybody to say that this is like some wonderful thing. Now if we find out that the science is real and then this is the debate over commercialization of it, then, yeah, I agree. That would be like a really positive moment. Speaker 4 (00:25:17): I Jason Calacanis (00:25:17): just love the fact that when something positive in the world happens or when something negative happens, we have this amazing platform for everybody, social media, x, dotcom formally Twitter where everybody can get together around this campfire and just start discussing it and speculating. Now some people don't like speculation. Obviously, they're school shooting or a tragedy, a building burns down, the fog of war as we've seen in the constant Ukraine, coverage, you know, you can have it's very easy to make mistakes when you're cashing this stuff in real time, but I love the real time nature. Of the world and the pace we're moving at. It's it's kinda delightful Speaker 4 (00:25:51): to me. David Sacks (00:25:52): Problem with the speculation, and there is a fun element to it. But when you start talking about investing in it, Like I said, wake me up when you know it's real, there's a really funny meme that VC Braggs posted. Nicky Braggs, Jason Calacanis (00:26:06): shout out VC Braggs. This is good. It's this is a famous meme of a kid's rounding. David Friedberg (00:26:12): That's so good. Wow. Jason Calacanis (00:26:13): The mom is playing with another kid. And not paying attention to the drowning kid. It's sort of like the guy who's holding hands with his girlfriend, but looking over his shoulder and whistling at The other woman by and superconductors is the happy little kid. VCs is the mom and generative AI Speaker 4 (00:26:30): is drowning, but then Jason Calacanis (00:26:30): they show him the underwater. Yeah. Somebody who's tied to a chair with chains of skeletal. David Sacks (00:26:37): The last hype cycle. Speaker 4 (00:26:38): Yeah. Jason Calacanis (00:26:38): The last hype cycle, creator academy crypto, M3. Yeah. It's pretty funny. It's pretty David Friedberg (00:26:42): I will say, Zach. I, and I told Chamath this when we were in Italy last week, but, when I was thirteen years old, Jake Hall can make fun of me now. I did a science fair project on superconductor. Jason Calacanis (00:26:52): Actually, I was doing I was thirteen. David Friedberg (00:26:54): And I bought this superconductor from the back of popular science magazine, you know, this old Atrium, copper oxide. That was the one that won the Nobel Prize. You could buy it for nothing. And I got liquid nitrogen at UCLA, and I did a demo at the science fair. And I did a poster board and a I had HyperCard on a Macintosh LC, and I showed everyone, this is the future. We're about to have room temperature superconductors. It's about to happen. And we're gonna have flying cars, and we're gonna have limitless energy and limitless battery storage for energy, by the way, which is one of the big applications. And it's it's just on the break, and this was when I was thirteen years old 1993. You know, here we are. 30 30 years old, 30 years later, and everyone feels like this moment might be upon us, but it has been this thing that's always been elusive that everyone's always thought it's around the corner. David Sacks (00:27:39): It sounds like cold fusion. You know, we've always been 10 years away for some breakthrough in cold fusion. Jason Calacanis (00:27:45): Self driving cars. Artificial general intelligence too. David Sacks (00:27:48): Well, I think there's a difference between this physical world, material sciences type innovation and then software innovation. And one of Peter Teal critiques is that we've had tremendous innovation and software, but in every other aspect of the economy, there's been little snow innovation. Plains, for example, are getting slower, not faster. Jason Calacanis (00:28:08): Would you believe that position from from him? I I I don't buy that position? Well, I David Sacks (00:28:13): mean, with the exception of, like, what Elon has been doing with No. David Friedberg (00:28:17): The genomic genomic revolution. He he misses life sciences entirely in that point. David Sacks (00:28:21): I don't know. I mean, Genomics is largely software based at this point. Speaker 4 (00:28:25): If you Jason Calacanis (00:28:25): look at the nonrevolution driven by David Friedberg (00:28:27): gene editing, oncology, the breakthroughs. I mean, look, it's all slowing down. I do agree with him. If you look at the number of, approved drugs every year and the cost per drug, cost per drug is going the wrong direction, and the number of drugs per year is going in the wrong direction. So there is an argument to be made there, but there there are arguably some quantum leaps in the types of medicine that we're applying. We didn't have biologics, you know, 40 years ago. We didn't have gene therapy 10 years ago. These are new modalities for for therapies that didn't exist as we've engineered the mike the molecular world to do amazing things in the biochemical application space. So I think, there's elements of this that I disagree with, but I think the general trend lines as he points out is totally true. Jason Calacanis (00:29:09): Yeah. But with planes, think we made a conscious decision. He always states the plane issue. Hey. We don't have the concourse. We're going backwards in terms of speed. I think that was a deliberate Cost cutting measure because people aren't willing to pay to go faster and burn more fuel. Speaker 4 (00:29:24): So they're Yeah. Jason Calacanis (00:29:24): But take out a lot David Sacks (00:29:25): of innovation. The price gets cheaper. David Friedberg (00:29:27): That's right. That's right. Same with electricity, same with energy. Electricity is getting more expensive, not cheaper. Jason Calacanis (00:29:33): But if you look at the NASA, if we wouldn't have the massive gains in artificial intelligence and machine learning if it hadn't been for the revolution in GPU storage and data centers and microprocessors and the ISO. David Sacks (00:29:47): But that's kind of the point is that we are promised flying cars and instead we got 280 characters. Not that Twitter slash X is bad, but that's just where all the innovation has been as an IT. Jason Calacanis (00:29:57): That I agree with. Yes. David Sacks (00:29:58): So they figured out they fig keep figuring out how to put more circuits on a transistor or whatever and, you know, keep Moore's law going. Or I David Friedberg (00:30:04): don't know. I could show you Or over the David Sacks (00:30:06): years, but David Friedberg (00:30:06): I could make a different argument by showing you human lifespan and agricultural yields. I mean, agricultural yields continue to climb because of our ability to engineer in a in a smarter and better way every generation there. There's a there's a Jason Calacanis (00:30:18): lot of David Friedberg (00:30:19): counter arguments to that point. Jason Calacanis (00:30:21): Yeah. Right. Valid about it is we go ahead, Shamont. Chamath Palihapitiya (00:30:23): I was gonna say the reason you we don't see these kinds of innovations is because the ruling class has clogged up and sclerotically dominated all the places where you'd have this massive forms of innovation, like David Friedberg (00:30:36): Regular. Regular. Yeah. Chamath Palihapitiya (00:30:38): No. No. Not. No. No. No. That's like a That's like a that's like a boogeyman. So get the boogeyman out. That can regular drug capture there forever. Like, why was this paper published on arson because every other form of publishing mechanism is sclerotic. It's establishment. It's hierarchical. It's about people basically dominating their own little forms of piola, right? And so nature, Chamath, all of this stuff works this way. And so what happens? You don't get fundamental innovations that happen in labs. You have things that feed research proposals that feed people who need to basically establish their supremacy. You saw the Stanford professor get booted up because of stuff that, you know, he The David Sacks (00:31:19): president of Stanford. Chamath Palihapitiya (00:31:21): The president said, so why is all this happening? Well, Peter is right. The reason why this stuff is happening is that instead of places where true fundamental innovation can happen, If you look at the Nobel Prize winners and you do distribution by age, what do you find? People win no bells in their sixties for work that they did in their twenties and thirties. Right? And so you have a system now that rewards people staying in their positions. I wrote this in one of my annual letters. If you look at the average age of like leading people in schools, they're like seventy years old. If you look inside of Congress, So there there's this all of this stuff that just kind of sporadically prevents young naive people from basically going out and really pushing the boundaries. And specifically, this of science, a fundamental science. And so for every innovation, I think the question to ask is what other innovations are we missing? And if innovations are on a fundamentally well established pathway that defends a bunch of work of senior people before it, it'll get supported. And I would say that genetics is a perfect example of that. Speaker 4 (00:32:23): The other David Friedberg (00:32:23): 2 if you Chamath Palihapitiya (00:32:24): look at the number of rare diseases that have still that are still, like, unsolved or the lack of understanding of immuno disease. It's just crazy. Like, it's I just think that that's really what's happening. I think Peter's more right than he's wrong. Jason Calacanis (00:32:36): The other issue here, Sachs, is and I'd like to get your feedback on this is if you look at how venture capital works, you got a 10 year window. You wanna get returns for your LPs. You look at how this fundamental research, we just said this started in 1999. That's why it's called dash 99. This thing took 25 years to to get to this point. Is is part of this issue that you have this big opportunity zone between, say, venture's window 10 years and then academia, which use put at, like, 4 decades there, trim off twenty, you know, year olds, getting their rewards in their sixties. How much of this has to do with we don't have a platform in between venture and academia. David Sacks (00:33:15): That's not the problem. I mean, so it's true that VC funding, typically, you want to go to the commercialization of an idea and that the underlying platform shift already exists And usually, that comes from some sort of breakthrough that happened in academia. I mean, that's basically what happened with the internet. So, yeah, you do not want VC funding typically going to basic r and d, you know, fundamental science r and d. It's just really expensive. Takes too long and too unknown. So you want that stuff kinda done more at the academic level. The question I have is how much of what's happening edema is basically either irrelevant or fraudulent. So Timothy brought the Stanford president. I think the the story there is he had 5 papers about Alzheimer's research and, you know, related topics like that, where they found out that the papers are basically bogus. And quasifraudulent. So how much of the the work that's being done in academia? How many of these papers are basically bogus. Chamath Palihapitiya (00:34:19): Well, the thing with peer review is like it's presented like it's a great, incredible solution to the world's problems. But I think what it has inherently wrong with it. So the positive part of it is theoretically you have error correction. Right? But here, what you don't find is that that error correction actually even happened. And so it takes like some young twenty year old kid at Stanford, who's a journalist, whose family were journalists to basically figure that up. So instead, what were those what were those papers doing? They were supporting a rising up and coming person because they thought that, you know, he would support them at some point. David Sacks (00:34:51): This is, like, the whole corrupt Fauci system at the end of the 8th. Jason Calacanis (00:34:54): Friedberg, they're Chamath and Sacks are presenting Academia as corrupt Do you agree with that? David Friedberg (00:35:00): I don't know if corrupt is the right term because I think that in implies mal intent. I think that the incentives are wrong. So in order to get funded, You have to show results. No one gets a grant to disprove someone else's work. No one gets a grant to do confirmatory work on someone else's work. Speaker 4 (00:35:18): You get David Friedberg (00:35:18): a grant. You get it. Yeah. I mean, that's that's the argument that that some folks make. You get a grant to do breakthrough research and have breakthroughs. And if you have breakthroughs, you get more money. Speaker 4 (00:35:27): That's the way the system is David Friedberg (00:35:27): set up. But this is why this guy This is why well, let me just say. Speaker 4 (00:35:33): I think David Sacks (00:35:33): it's corrupt. I think Speaker 4 (00:35:34): it's corrupt. There's no funny breakthroughs. Come on. Okay. Whatever you wanna define David Sacks (00:35:34): it as, the guy, the David Friedberg (00:35:39): guy Stanford, if you read some of the testimony from people in his labs, they said that he encouraged people to have big findings. And if you get big findings, You get to progress in the organization. You get more funding, etcetera. So the the incentive structure that he set up for people was not necessarily to go in and disprove stuff or try something and show that it didn't work. If you try something and show that it didn't work and publish a paper on that, it's gonna be very hard for you to turn around and get a trophy. Or gets the money or gets the grant. What he Chamath Palihapitiya (00:36:09): did, that there was like a bunch of error in the data that they went back and were like, hey. This is this is incorrect. And he's like, oh, yeah. It was sloppy. I just didn't do a good job of reviewing it. David Friedberg (00:36:18): So, yeah, so what happened was if you read some of the testimony, the people that worked in his labs, the students, and the the graduate students, and so on, they said that he basically Speaker 4 (00:36:26): encouraged people to get good results. And in that process and in that way, there was some fuzziness in the data or some David Friedberg (00:36:26): tweaking of the data that he didn't double check for sure, but he was encouraging this Speaker 4 (00:36:37): sort of system of performance. And the David Friedberg (00:36:37): system of performances you've gotta show results. You can't show non results. And if you show non Speaker 4 (00:36:45): results, there's no money. And they're, yeah, the reason they're David Friedberg (00:36:45): doing that is marketing. They want to market Jason Calacanis (00:36:50): and get more attention so they get more donations? David Friedberg (00:36:53): Yeah. Exactly. The problem with with a pure research is that you have to get funding to do your research. Where do you get your funding from? You get your funding from federal agencies, from nonprofits, from your, you know, your donors. And so in order to get that money, have to say, here's what I'm gonna do. Here's not what a here's you don't say I'm gonna go not prove something. You say I'm gonna go prove something. No. No problem. You're you're hiding the Chamath Palihapitiya (00:37:15): cheese. Piping the cheese. That's not what these people are saying. These people aren't saying, I'm not gonna not prove this. Do you think most of these people are ver working on very thin incremental extensions of work that's already been done because it allows them a more defined path to get tenure ship, to be a well respected professor, to work through the hierarchy of a university. That's what's happening today. And the reason why that gets funded is that those are the same people that are in charge of the funding infrastructure at NIH and all these other places. What we don't have is something that says go and write the most ambitious proposals, and I'm gonna go David Friedberg (00:37:52): fund it. Yeah. I think both things are true. I'm sorry. That's just David Sacks (00:37:54): a market mechanism. David Friedberg (00:37:55): I'll just say both things are true because what you're saying, Timok, is a point of failure. If you say I'm gonna go try something crazy, like do a search for a room temperature superconductor using lead crystals, you're not gonna get funding for that. It's 2 out there. I mean, you guys today are talking about how low probability stuff isn't that interesting. I'm not gonna fund it until it's real. And so when things are real, you have some molecule that has some effect on cancer cells Then you get funding to make that molecule go to the next phase or go to the next stage. That is more crazy thing where the probability of it going to 0 is 99%. Jason Calacanis (00:38:30): You could throw Elizabeth Holmes into that. Right? I mean, she came up with this third idea that you could do 200 tests on one drop of blood, and they would have David Friedberg (00:38:38): to do research. That that was just a statement about engineering wasn't ready and wasn't possible. David Sacks (00:38:42): Another company just got funded to do the same thing that Theranos promises gonna do. Yeah. Do you see this? Jason Calacanis (00:38:47): But I I did not see that. David Sacks (00:38:49): Yeah. I mean, some pretty good VCs invested in it, actually. And they especially said, we know this is the same idea as Theranos, but for that reason, we think it's very unlikely to be fraud because it's being held to such a high standard of scrutiny. David Friedberg (00:39:01): I want you guys to think about this. I want you guys to think about this as VCs. A an entrepreneur comes to you. And the entrepreneur, she says, I've done this thing. I did this thing. I did this thing. I did this thing. I did this thing. 5 different things. None of them worked. I wanna have money to do this next thing. You're less likely to fund that person than the entrepreneur that shows up and says, the first thing I did work, the second thing I did work, the 3rd startup I did work, they weren't home runs, Jason Calacanis (00:39:25): but they were have the opposite. David Friedberg (00:39:26): And I had good results. That's basically what happens in in, you know, the scientific research is you've gotta get something that's fundable. And often that means not doing something that's likely to go to 0, and that's where the incrementalism comes in, come up. Is that orientation, I think? Jason Calacanis (00:39:40): I hate to, give my playbook, but one of the great successes I've had is finding people who got their asses kicked on the last two companies. Talking to them about why they got their asses kicked and then how they're gonna avoid getting their asses handed to them with this third company. Then if you look at Travis with Uber, He did scour, got got, you know, sued for a quarter $1,000,000,000,000. He did red swoosh. He got, like, a $30,000,000,000 exit, and then he did Uber. Right? He he first two companies were very hard. Steve Jurbinson and future ventures, he took his venture fund and he told the LPs it's a 15 year term, not 10. So he specifically is trying to do a little bit of a longer window. I think that is actually a possible solution here. Chamath Palihapitiya (00:40:20): I think smart independent thinkers find ways to make money. I've been looking at this superconductor space for the last 2 years. And so it's not like people are are shy and have money and aren't willing to write the checks. I just don't think that's what it is. The body of work that's coming out of academic institutions today for the amount of money that's put in is modest. And I think that's the best way to describe it. It's the Ferriswick. And the reason is modest is not because of the intellectual capacity of the people. It's because of the incentives and the hierarchy and the establishment elitist politics that infuses how these organizations are run. And I think the only way to break that apart is to basically disrupt who is in charge of these institutions. Nick just throw up this chart. These are people that for decades decades decades decades are in a grind and who are now in control. And so what is the incentive of these folks to Explain the change. David Friedberg (00:41:19): Yeah. What is this? Chamath Palihapitiya (00:41:20): This is a chart that I put together, which is just the generational distribution of academic leadership across all the leading research institutions in America. Okay? David Sacks (00:41:28): Well, isn't isn't Fauci a prime example of this? David Friedberg (00:41:31): The birth year? David Sacks (00:41:32): No. Listen. You had the the most important person hold on a second. The most important person probably in the federal distribution of grants. In the medical field was Fauci. Right? He literally was running the NIH since the 19 eighties. He's been there for 40 something years. And the mass was peeled away during COVID, and we saw how much power he wielded, really, I think in a corrupt way. Jason used the word corrupt. You had that letter to the Lancet that he got a whole bunch of scientists to sign that claim that COVID was not made in a lab. That was a conspiracy theory that the only place it could have come from was the sort of the zoonotic leap naturally occurring from animals. We know that he used his power over grants to basically pressure those people into signing the letter, or they thought it would be in their interest to do so. Even though Fauci had already been updated by a bunch of scientists that it likely had come from the lab. They could just look under a microscope Speaker 4 (00:42:31): So David Sacks (00:42:31): and see them here in Cleveland sites, which are the telltale sign. So they knew that this thing likely came from a lab. There was no basis for calling it a conspiracy theory, certainly. And yet, the the whole Speaker 4 (00:42:43): the whole David Sacks (00:42:43): deal is not behind that. Jason Calacanis (00:42:44): But actually, did you see the did you see the slack messages where they were trying to manipulate the New York Times science writer? I mean, they basically But David Sacks (00:42:51): the question you have is why were all these scientists wanting to go along with this and sign that letter to the landscape? Chamath Palihapitiya (00:42:56): Because these guys have been grinding for 40 or 50 years in a hierarchy. And so to all of a sudden, put a pin in it and just say, You know what? I'm gonna dispense with all of it. And now I'm going to basically like be completely open minded. How likely was that the odds of that were very low? Look Look at the number of people who have basically grown Speaker 4 (00:43:14): up in one segment of society that are sporadically in charge of Chamath Palihapitiya (00:43:19): every single leading research university in the United States, that is why we don't have flying cars. This is why Because after 40 years of working in a specific hierarchy being rewarded in a very specific way with a very specific set of incentives, When some young brash twenty two year old naive person writes an extremely ambitious research proposal, you're like, no. You will not be a part of my lab to do that, but you can do this incremental thing that that further reinforces my leadership in society. That is what this charge shows. Jason Calacanis (00:43:50): Yeah. It's also perverse inside of government. We didn't talk about it. I don't think last week, but Mitch McConnell, I don't know how to say it, but I guess it froze while he was speaking. And, you know, we we gotta have a proper 8. David Sacks (00:44:00): Oh, it's in the Diane Feinstein thing. Remember when Chamath Palihapitiya (00:44:02): she said Oh, the Diane David Friedberg (00:44:03): Feinstein. The speech. David Sacks (00:44:05): And their staffer whispering saying, just say, I, you know, and she starts going on Speaker 4 (00:44:09): this slide. David Sacks (00:44:10): I mean filibuster. The agency. Right? We have a sporadic political system run by auction's generians because the boomers are not relinquishing political power. Fucking retirement. Relinquishing bureaucratic power. Can we just pull up this lancet letter for a second? They say, here's the zoom in on this. The rapid, open, and transparent sharing of data on this outbreak is now being threatened by rumors and misinformation around its origins. We stand together to strongly condemn conspiracy theory suggesting that COVID 19 does not have a natural origin. How could they say that at that point in time? All the evidence suggested it was made in the lab. Now, certainly, I think you could take the other side of that, but to condemn the lably theory as a spursy theory that was corrupt. Chamath Palihapitiya (00:44:54): I'm not sure that that's corrupt. You know what's corrupt is not retracting that and apologizing. The that's where the real corruption is. Jason Calacanis (00:45:00): We have not gotten our post David Sacks (00:45:01): order list. Was organized. It was organized. This is just like the 51 spies who lied claiming that the 100 Biden laptop was disinformation. This is the establishment, willing Speaker 4 (00:45:13): to use its credentials and respectability and expertise to sign a letter David Sacks (00:45:13): they know is false. To perpetrate a fraud on the American people in order to protect the people in charge. That's the motivation here because Fauci had funded gain of function research the Wuhan lab. Chamath Palihapitiya (00:45:31): I think the same route that is in some of these leading research institutions and leading academic institutions and politics, they all share the same commonality, which is we are spluronic. We are in desperate need of a generational shift to power. And right now, there is no incentive because at the same time, you know, the people that are 70 and 80 are thinking to themselves, well, I'm probably gonna live to a 100. What should I do for the next 20 years? Being in power is pretty good. Right? So we're we're in this weird clash. David Friedberg (00:46:03): I was thinking a lot about the fiscal spending problem in the US and we should talk about the Fitch rating downgrade that happened this week. I've got some, data I'd like to share. One thing I was thinking about was how tied the age of congresses to our fiscal spending problem? If you think about someone who's young, they're gonna want to invest for their future and think about the future. If you're someone who's old, you live for the day, and you don't think about the future. And I worry so much that the aging of the establishment that makes the decisions about how money is spent creates a a psychological barrier. Yeah. Positioning that's all about giving away all the money today. Instead of making the right decision to make sure that we have a prosperous tomorrow. And that's why I think so many of these things kind of slipped through, if you put a twenty year old in charge that was well informed in charge of some of the fiscal policy environmental policy, energy policy decisions, defense policy, it would be a very different set of decision making than someone who's in their eighties. Jason Calacanis (00:47:09): Conherent stacks. Yeah. Yeah. I mean So, David Friedberg (00:47:13): anyway, we should talk like, you wanna talk about the Fitch downgrade? Cause I think it's a really important story this week. Jason Calacanis (00:47:17): Fitch, the rating agency, downgrade of the US's long term debt by 1 notch from AAA to AA plus when we Countries have AAA ratings from the top 3 rating agencies, S And P Global, Fitch, and Moody's. Those are Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Cenberg, Singapore, and Australia. What you can take from that is you gotta have a good balance sheet, and you have to have high functioning governments. The highest functioning governments in the world are the Nordics. That's why you see Denmark, Netherlands, Sweden, Sweden, Norway there. According to NPR, the negative reaction hasn't been as strong as, 2011. That was the first time the US was downgraded from AAA to AA plus by the S and P. That also had to do with the debt ceiling. The market's kinda shrugged off. Largest shrugged off the Fitch downgrade. Main reasons for the downgrade is obviously higher interest rates, aging population, the debt to GDP ratio, which we've talked about here, but government kept coming up. Over and over again and how dysfunctional our government is. The debt ceiling is one of the key manifestations of that. Your thoughts on this for the first half of the show, Friedberg, you're an optimist, but are you now going to switch to declinest? I wouldn't say declinest. Are you gonna switch to declinest mode now, or are you still in optimist mode? David Sacks (00:48:39): I mean, in JakeAL's view, unless you're a cheerleader for every student government policy. David Friedberg (00:48:44): You're a definist. I know. It's it's a Jacob, listen, it I wanna be honest. I I don't think so. I think he, like, And I I concur. I think you can highlight that there are concerns with US fiscal policy that are putting us in decline in our spending spiral with the US currency reserves, which there are now diversification efforts underway, and I'll talk about this in one second. And that doesn't mean that the US isn't the most exceptional place. To do engineering and entrepreneurism and have freedom of speech and thought and so on. But there are elements of the US that put things at risk. So let me just point out these 2 charts. If you guys pull the first one up, this is a a pretty striking chart, and I think I showed this before. This is federal government interest payments that are being made. We're we're now up to you know, a a $1,000,000,000,000. The chart, as you can see, a year, has spiked. And by the way, that number is spiking further, and we'll talk about this in one second, as a result of rising interest rates and increased fiscal spending. So this is now becoming a pretty sizable part of our budget. And as of now, paying the interest on our debt is a larger capital outlay for the federal government than defense spending. The second chart shows what happened in the last week. Which is that 30 year treasuries have been sold off. And as that's happened, treasury yields have climbed. So there's been about a 10% decline in pricing and a, you know, a concurrent nearly 10% increase. And Bill Ackman, you know, basically said today that he's shorting 30 year treasuries. He thinks we're gonna go to 5 a half percent long term rates. Currently the 30 year treasury sitting at 4.3. And remember, I told you guys this after this thing I went to a few weeks ago that There were 2 prominent economists who shared that they think were going to be facing long term rates in the 5 to 7% range. David Friedberg (00:50:25): Very long term rates for a very long period of time, that it is a new fiscal regime. And then if you pull up the last link I sent Nick, this is a report made by the treasury borrowing advisory committee of the treasury department. And I just wanna read a couple of quotes from this report. This just came out, today. It was published that it was sent over to the secretary of the Treasury yesterday. And it said since the, advisory committee convened in May, 2 year treasury yields are about a 100 basis points higher, while 10 year treasuries have increased by about 40 basis points. The bank holdings of non mortgage backed government securities, mainly treasuries, have actually declined by a 146,000,000,000 so far this year. So that means banks are selling off their treasuries. The committee goes on to say at the same time, Treasury investors have noted the treasury supply will need to increase to address the rise in public deficits as tax revenues have come in weaker and government spending has increased. Issuent's needs will be additionally impacted by the timing of a recession and so on. Then they said, based on the marketable borrowing estimates published on July 31st. Treasury, this is crazy. Treasury currently expects, privately held net borrowing of $1,007,000,000,000 in this quarter with an assumed end of September cash balance of 650, and then they said we expect another $852,000,000,000 of borrowing next quarter. That means treasury is gonna try and issue and sell $2,000,000,000,000 worth of treasury bonds in the next two quarters. That's $2,000,000,000,000 of new borrowing by the federal government to pay our bills. At the start of the year, they were estimating 1,600,000,000,000 for the year. Which was an insane number. Now we're talking about 2,000,000,000,000 in just two quarters. So rates are climbing. As a result, we need to borrow more And this is a perfect manifestation of the death spiral problem that we've talked about multiple times. David Friedberg (00:52:16): Our fiscal spending outlay and the rising interest rates combine to create an insurmountable debt spiral that is now manifesting in the fact that we need to sell $2,000,000,000,000 of, treasuries. And here's the crazy statistic that they said in reviewing recent demand for US treasuries in auctions, the committee noted that an increasing percentage of supplies being absorbed by investment funds while foreign participation has remained range bound. That means as we're trying to sell more treasuries, government Feder foreign governments are buying fewer of them, which means that the US currency as a reserve is no longer the place that everyone wants to plow their money as much as it used to be. It is in decline. Now the other thing I wanna share, which I think is is absolutely critical, is how do we address this gap? Well, the one way is these entitlement programs. And so several Republican presidential candidates, Nikki Haley, Ron DeSantis and Mike Pence have all publicly stated on the the campaign trail that they're promoting programs to cut social security benefits for people that are thirty and forty years old. And here's the response to that. So so they've gone out and they've started saying that. A poll was done. And on that poll, 82 percent of voters opposed the push to cut social security for Americans under 50, 82%. So where is this gonna take us? This is what is so scary to me, Jakeow, I'm not an American declinest. I believe in the American system. It benefited me and my family, but I do worry that we find ourselves in a whirlpool it's very hard to get out of because the populace says we don't wanna make the cuts that are necessary in order for us to save ourselves. That's what's so scary to me. And I've said it before, I think it's worth saying it again. That's it. I'm done. David Sacks (00:53:59): It's not a problem with populism. I mean, the elites are saying it too. There's no appetite in the DNC to cut overform Social Security. Are you kidding? Jason Calacanis (00:54:07): It's very unpopular. How do you get how do you get elected? I don't David Sacks (00:54:09): know why those republicans How do Jason Calacanis (00:54:10): you get elected saying? David Sacks (00:54:11): I I hadn't seen that article would advise all those campaigns not to touch that rail. They're gonna electrocute themselves. I think Trump has the right political instincts on this point, which is you cannot touch social security as a single party effort. It has to be bipartisan, and there is no bipartisan will to do anything. So I think you're You're right about the larger point. Jason Calacanis (00:54:31): Chamath, your thoughts on Friedberg, manifesto that 80% of the public does not wanna cut spending. They're in favor of Social Security for people under fifty years old. And we have a $1,000,000,000,000 in debt payments, and we're in a death spiral because we don't have David Friedberg (00:54:46): a deal. In a 180 days, we're borrowing an extra 2,000,000,000,000. Speaker 4 (00:54:50): That's the real point. Jason Calacanis (00:54:51): The the end of the end of the fiscal end of days Speaker 4 (00:54:54): for it. Jason Calacanis (00:54:54): At the David Friedberg (00:54:54): start at the start of the year, the the expectation was there, we're only gonna borrow one point trillion for the year. Now we're borrowing 2,000,000,000,000 in just these two quarters. Chamath Palihapitiya (00:55:02): Let me just state what I think about the downgrade. It's irrelevant. The S and P did it 13 years ago. Fitch is a marginal credit rating agency. They're at a minimum 13 David Friedberg (00:55:13): years away. Chamath Palihapitiya (00:55:14): At a maximum, they're just anxiety within like other people are who are receiving that the sky is true. So that's my first point. Whoop. The second point and the more important one is that I I none of you who are always freaking out about this understand this conversation about relativism. All of these conversations are relatively new deal with them in absolutes. On a relative basis, Japan's debt to GDP is 270% and growing. On a relative basis, our debt to GDP is half of that. We are the most important economic force in the world. It is going to continue to be the most economic force in the world. And all I see actually on every single monetary basis is every other country struggling more than we are. So My question to all of the chicken littles is what do you do if you're a central government where you have to have Jason Calacanis (00:56:08): foreign reserves? Chamath Palihapitiya (00:56:10): Do you all of a sudden double down on the euro? Do you double down in the yuan, which is basically a proxy for being for doubling down in the US dollar? What are you supposed to do? And I never get a good answer because on a relative basis, the US will still continue to do well. I think that debt to GDP is a rent hearing for a lot of people, and I think that the way that people run their personal lives, which should take income to debt into consideration. I don't think applies as much to governments. And I think these things are gonna march forward as a group There's not gonna be a single g 8 country that all of a sudden moves away and starts printing surpluses. It happened almost as an accident, and it during the Clinton Administration. It'll never happen again. And I think that Jason Calacanis (00:56:55): we shouldn't worry so much Chamath Palihapitiya (00:56:57): because I just don't see an alternative. So give me Instead of telling me how bad this is because you think about your own life and how it would be bad if you had debt to GDP of a I get it. As a country, give me the alternative country. But just start with that. Can you answer that question? What is the alternative country? Jason Calacanis (00:57:15): Yeah. Where would you put your your wealth if not the dollar? David Sacks (00:57:19): Well, let me paint a scenario that's not as dire as a collapse of the US dollars world's reserve currency. Okay. So on this fetch range David Friedberg (00:57:28): That's not that's not what I think happens. Right? I I think this is just purchasing power goes down. That's it. But go ahead, Saks. Chamath Palihapitiya (00:57:34): Relative to who? Please prohibit anyone. But what does that what does that mean relative to anyone? David Sacks (00:57:39): Let me paint like a non catastrophic scenario or non apocalyptic scenario, which is what you saw in this Fitch ratings downgrade is that the bond market did move at the margins. There was a sell off in the 10 year. And as a result, the tenure bond yield moved up to 4.2%. So it wasn't a case of everybody shedding all of their US treasuries, It's just that there were market actors at the margins who adjusted their portfolios. Okay? Now Friedberg is saying that the treasury is gonna have to do another $2,000,000,000,000 bond offering. And we have $1,000,000,000,000 plus deficits as far as the eye can see. And we've got entitlement liabilities on the horizon, and then at political unwillingness to do anything about it. So the deficit's only gonna get bigger and bigger. Now what does that do? It's supply and demand. When the US Treasury needs to keep issuing more and more bonds, at some point, the demand for those things gets incrementally saturated and they have to offer a higher yield. So what happens? Well, the bond rates go up, and so the tenure goes up like Friedberg was saying from 4.2 to somewhere in the 5 to 7% range. And that doesn't mean that US dollar is not the world's reserve currency. It just means that it gets incrementally harder and more expensive to keep financing our debt. Now what is the result of that? Well, if I, as an investor, could theoretically get 7% from the US Treasury as the risk free rate. Why would I wanna take equity risk and put it in the stock market which historically has yielded somewhere in the 5 to 7% range. So if I can get my 5 to 7% from a risk for US government bond, of course, I'm gonna do that. So the discount rate on equities will go up. That means that the stock market relatively on a relative basis will go down. David Friedberg (00:59:23): Risk capital will go down. There'll be less David Sacks (00:59:25): risk capital. And there'll be way less risk capital available for things like venture capital and private equity. Does risk taking of all kinds? And so the economy will just grow slower. It's not like there'll be a collapse. It'll just be this Yeah. Huge albatross Yeah. Around the neck of the private sector. And this is called crowding out. Jason Calacanis (00:59:43): Here's the I'll give them may I give a counter here? I think if you look at the amount of sovereign wealth funds and the investment coming from around the world into US Venture Capital, That will keep the venture machine cranking here in America, but three charts to just look at here. Nick, pull up the first one, the 30 year fed, sort of counter this argument. Really, the aberration has been 2010 to 2020 when we had you know, low single digit mortgages, 3%, 4%. The majority of our lifetime, it was between 5 10. And if it's 6 up in the 5 to 10 basis, that that's what we experienced for most of our life. And then the second chart, this is the lowest unemployment we've had in our lifetimes. If you look at the unemployment rate in the United States, 3.6 is unbelievable. And then combined with it, something we've talked about here for 2 years that we can't understand is when do all these jobs burn off? We peaked you know, during the post COVID era at about 11,000,000 job openings. And then, you know, we're still over 9. So for there's 2 or 3 job openings for every American who wants to work. And we've shut down the borders largely, even though we have some illegal immigration coming in. It is basically shut down the United States to immigration. It's about a third of what it was before Trump and Biden decided David Sacks (01:00:56): to shut things down. I don't think we're looking at the same video that that I'm seeing. Jason Calacanis (01:01:00): Yeah. If you're looking at videos, those are very distracting. I would encourage you to look at the numbers of the actual migration into the country. It's a third of what it was. David Sacks (01:01:07): To see what's happening in New York City. They got lines around the block. Jason Calacanis (01:01:10): You're caught up in clips, on from the border. I would just look at the raw numbers. Sachs and the raw numbers. Yeah. Because we count them and we we count the Well, David Sacks (01:01:20): there's a we have to estimate them because they're illegal, but they got 7,000,000 in the Jason Calacanis (01:01:23): last 2 hours. Numbers and the actual statistics than anecdotal videos because both sides will manipulate the heck out of them. For their own purposes. But the fact is America's just crushing it in terms of employment, and that's why we didn't have this crash landing and the and I think the soft landing is because of employment, and I'll just end there. And if we can keep ourselves employed and everybody from the Middle East to Japan, to high net worth individuals in Europe are pouring their money into the US venture ecosystem. I think the setup here is we gotta control spending. As you've said, correctly, free brew. We get a little bit of control on spending, hopefully. And then we are gonna have to deliberately burn off some of this you know, debt. We can't hear the little kind of debt payments. David Friedberg (01:02:06): Here's a little data for you, Timotte, this is from congressional research service off of Fed Data. So foreign holdings of US treasuries have declined from 40% to 30% of total treasuries. 70 percent of treasuries today are held by domestic investors. This is the data that was being described in the Treasury Advisory Committee, the borrowing Advisory Committee, letter that I said is that they're seeing less demand from foreign buyers of treasuries. Now I I can argue we can argue theoretically about what else are they gonna buy and what else are they doing with their money? I don't know. But the the data is showing a decline in purchasing intention by foreign buyers of US treasuries, and we're having to pick up the slack through investment funds held by the US, mostly pension, mostly retirement funds, I would guess that are buying these treasures. Chamath Palihapitiya (01:02:52): That is not what this chart shows. The chart shows the effect of quantitative easing. That's what this chart shows because when you're buying treasuries from the market and retiring them, of course, the percent of foreign domestic holdings of publicly held debt is gonna go down. So this last period, explain this ex of QE explain it. Sorry. David Friedberg (01:03:09): I don't understand what you're saying. Chamath Palihapitiya (01:03:11): This is a measurement of the amount of people that own treasuries. Is that right? Domestic versus foreign? Yeah. So who who owns David Friedberg (01:03:19): So as of December 22, there was, 20 Chamath Palihapitiya (01:03:23): I'm I'm gonna assume because this chart is fucking worthless if this if it doesn't assume that the domestic holding, the gray bar that adds up to a 100 doesn't include the Fed, which it must. And that is because the Fed has been buying David Friedberg (01:03:35): treasuries Chamath Palihapitiya (01:03:36): from the market. David Friedberg (01:03:37): Okay. So just look, let me just give you the numbers for a second, and then we can take out No. No. Chamath Palihapitiya (01:03:41): I'm just looking at the chart. The chart is a great part that says domestic holdings, David Friedberg (01:03:45): and then there's Chamath Palihapitiya (01:03:46): an orange bar that says Ford Holdings, you've had 10 years of the the Fed buying treasuries. David Friedberg (01:03:53): I'm gonna give you the numbers. There are $24,000,000,000,000 of treasuries publicly held treasuries outstanding. 7.4000000000000 held in foreign hands. The foreign holding of publicly held debt between December of 18 December 22 increased from 6.3000000000000to7.4000000000000, while other investors increased from 16,000,000,000,000 to probably 23,000,000,000,000. So, you know, it's we're having to pick up the slack. Investment funds, private investors are having to pick up the slack because of foreign demand for treasuries lagging at this point. That that's the point of the chart. Speaker 4 (01:04:28): I I don't know Chamath Palihapitiya (01:04:28): what I don't know what to tell you. I think what this chart tells me is that the balance sheet of domestic holdings grows grows because the Fed has been buying treasuries. And in a in a world of QT. I suspect that this bar chart will change in the next 10 years. David Friedberg (01:04:41): If you look at Chamath Palihapitiya (01:04:42): the histogram 10 years from now, if you assume that QT sticks around, So I don't know. You can interpret whatever you want to feed your anxiety. It doesn't change that there's a relative problem at hand, which is you cannot sell one thing without buying another. That's just the way it works in financial markets. David Friedberg (01:04:57): Here's here's the numbers. The Federal Reserve during that same time period increased their treasury holdings. Here's the exact numbers. From 9 3,700,000,000,000 to 9,700,000,000. So they bought 6,000,000,000 of that debt. David Sacks (01:05:08): I think the fact that we're gonna go from quantitative easing the quantitative tightening over the next decade. It's another overhang. But Because not hold on a second. Because not only does the US government need to sell another 2,000,000,000,000 of bonds every year to finance its deficit, which is basically the addition to the debt, you've got the Fed now shedding what, like, 8,000,000,000,000 30 bucks. It already bought. Chamath Palihapitiya (01:05:31): They're just they're letting them Speaker 4 (01:05:32): roll off. Chamath Palihapitiya (01:05:32): They're letting them roll off, and they're not reissuing them, but you actually said the right thing earlier. Which is that the risk premium has been shrunk so massively between equities and bonds. David Friedberg (01:05:40): These 2,000,000,000,000 of bonds that these Chamath Palihapitiya (01:05:40): guys will issue that between The strip will trade from 5% all the way down to it'll be a line out the door. I guarantee you. And the reason why is exactly what you said before, David, which is like, why not own 5% paper from the US government versus having to like all of unspeculate on the S and P 500 or something else. It's a no brainer, and I totally agree with you. But that this last 2,000,000,000,000,000,000. That'll be the easiest 2,000,000,000,000 to someone. There will be a line out the door. Guarantee? David Sacks (01:06:11): Well, there's a line out the door at some price. So my point is that the yield will have to go up to attract those incremental buyers. And as the supply of t bills becomes a glut, obviously, they're gonna have to make the yield more attractive in order to keep attracting that marginal buyer. It's just that simple. So yeah, at some price, they'll be able to find a buyer. But that yield will have to get higher and higher over time, and then that crowd's our private investment. Because why in the world would you invest in a risky when you get 7% risk free? Chamath Palihapitiya (01:06:44): What's your alternative? Because again, like what do you think the spread to JGB's is gonna be if that's true. If if US treasuries Okay. If 30 of your treasuries are all of a sudden at 5 a half with Bill Ackman's, right, which you could very well be. The other part of what he's not saying is what did JGB look like? What are European bonds look like? You know what they're gonna be? They're gonna be trading at 300 to 500 basis points above that. It is cataclysmic for the entire world economy, and so we all move in unison When we suffer, we will suffer less than other countries. And when we win, we will generally win more than other countries. That has typically been true. I suspect it will typically be true And I don't see anything changing that. Well, hold Speaker 4 (01:07:21): on. David Sacks (01:07:21): Let's assume that you're right. And what happens is that the let's call it the western world and all these governments should are basically mired in debts with a few exceptions. I guess Australia is good. Switzerland's good, but the rest have massive debts at GDP as well. So their bonds have to move up with ours. And so their risk premium has to go up as well. So you're right. In lockstep with the US, but now why wouldn't global growth just slow down across this call it this whole western dollar complex. David Friedberg (01:07:48): Coupled with inflation, coupled with inflation. Right. Which is inevitable. David Sacks (01:07:52): That's basically what's happened in Japan, right, is that they have like a 200% debt to GDP, and they've been very active in yield curve control. And so they've controlled the interest rates, but the price that's been total David Friedberg (01:08:04): economic inflation Jason Calacanis (01:08:05): Which is the population. David Sacks (01:08:06): Decades They have demographic problems as well. Speaker 4 (01:08:08): But Jason Calacanis (01:08:08): That's the main issue there. I see young people there. There's just not a lot of young people there. I mean, they're the housing is crazy. If you just look at it. And I think the United States has a lot of innovation. So we will innovate our way out of it is is my belief, which is of what we David Friedberg (01:08:23): You know what's so exciting, guys? We can have this conversation with Larry Summers himself at the Olin summit, September. David Sacks (01:08:29): Wait. Do we have Ray David Friedberg (01:08:30): Dahlio too? We have Ray Dahlio. Yeah. David Sacks (01:08:32): Are they gonna be on a panel together, or are we really interested to discuss this topic with the 2 of them? David Friedberg (01:08:36): Maybe, overall, I'll look at the schedule. Everyone, unfortunately, all our speakers are in tight schedules on when they're in and out, which is why I need Jake out to respond to my I am to him about finalizing some of our other speakers, but Chamath Palihapitiya (01:08:49): Hey, Jimmy texted me because I could probably he's in, like, London, or yesterday He Speaker 4 (01:08:52): did London. David Friedberg (01:08:52): We gotta figure out how to get him back. Yeah. Yeah. He said he'd fly out, but we gotta figure how to do that. But, yeah, we can have this conversation. In LA, September 10th through 12th. Speaker 4 (01:09:00): Oh, Jason Calacanis (01:09:01): well, it's sold out. So way to frustrate everybody. I'm getting, like, all kinds of, like, LPs and giant folks who are like, can I buy a VIP ticket? And I'm like, listen. It's sold out. You had 2 months to do that. So in other news, The GOP's lead candidate for the 2024 race. Donald Trump has been indicted. For trying to overturn the 2020 election and stop the peaceful transfer of power. The indictment has 4 counts and is the 3rd criminal case for those of you playing along at home. 4 counts include Speaker 4 (01:09:35): conspiracy to defraud the US. Jason Calacanis (01:09:35): Conspiracy to obstruct an official proceeding obstruction of an attempt to obstruct and official proceeding, conspiracy against rights, Trump campaign, not shockingly called it fake news, The indictment feels like it's got them dead to rights. Speaker 4 (01:09:52): And this Jason Calacanis (01:09:52): is on top of the Speaker 4 (01:09:53): oathkeepers, founders, Sewett Rhodes getting 18 years. Jason Calacanis (01:09:59): And a bunch of other cases. In addition to that, the DOJ prosecutors also accused Trump of ordering employees to delete security videos. And the classified documents case to cover up, of course, being worse than the crime. It looks like they got them dead to rights on that one as well. All of this against the backdrop of DeSantis spending tens of 1,000,000 of dollars and falling in his percentage Sachs explained to the audience why this is Hunter Biden's fault and, that's a deep space conspiracy. I kid. What are your thoughts on this? David Sacks (01:10:33): When you say they have them debt to rights, like, what what do you mean by that? What's your basis for saying that? Chamath Palihapitiya (01:10:38): Exactly. What do you Debt David Sacks (01:10:40): debt to rights on what charge? Jason Calacanis (01:10:42): Yeah. So in this, indictment, the 45 pages, if you read it, you will see that they put up fake electroverts, and they knew that it wasn't going to work. Speaker 4 (01:10:53): And they did Jason Calacanis (01:10:53): it anyway after losing 60 cases. So that's the belief of why this is such a serious case. And then also the cover up obstructing justice, and it looks like some of these maintenance workers are potentially flipping. And Mark Meadows, they claim has flipped Speaker 4 (01:11:11): as well. So but, you know, Jason Calacanis (01:11:11): he listened to everybody. In the northwest David Sacks (01:11:14): cases, is sort of separate. I mean, I think we should just stick to this. The big news here Jason Calacanis (01:11:19): is What do you think of the fact that he tried this allegation that he to delete the videos. Do you think it's real, or do you think it's made up on David Sacks (01:11:25): the statement? That that's a that's a detail about a piece of evidence in that case. I do think the document's case is on a sounder legal footing than the generics. Jason Calacanis (01:11:36): You're saying. More dangerous too. David Sacks (01:11:38): It doesn't involve as many novel legal theories. Now is it really dangerous? I think the American people think that at the end of the day, that document's case is sort of a paperwork case And there are many other people who violated the classified requirements rules, like Sandy Berger, like David Petreas, like Hillary Clinton, never prosecuted. So I think if they have him dead to rights on any of the cases is the documents case, but I also think that in the minds of American people, that in the minds of the American people feels like DC inside baseball. Now I think on this 26 case Jason Calacanis (01:12:11): about the documents case. What do you personally David Sacks (01:12:13): think if you're gonna prosecute from for that, you can prosecute all these other people who've violated classified documents rules. Jason Calacanis (01:12:18): What do you think about him? David Sacks (01:12:20): Sandy Berger, who worked for Clinton, who was a national security advisor stuffed his pants Speaker 4 (01:12:26): Yeah. David Sacks (01:12:26): With classified documents from one of those clean rooms. And got away with the slap on the wrist. Speaker 4 (01:12:32): What do you Jason Calacanis (01:12:32): think about Trump trying to overturn the election? David Sacks (01:12:35): Well, look. Chamath Palihapitiya (01:12:35): Do you think he tried Jason Calacanis (01:12:36): to overturn the election? I mean, just a basic fact. David Sacks (01:12:39): Let me state right away that I think that what Trump did in the wake of that 2020 election was indefensible. I said so at the time, I said that Did Jason Calacanis (01:12:48): did I give a question? Speaker 4 (01:12:48): I did David Sacks (01:12:49): say it. What I said is that once the Supreme Court once the court's in general throughout his case, and once the Supreme Court denied certiori, it was time frame to stop. Jason Calacanis (01:12:57): And he kept going. Yeah. David Sacks (01:12:59): It was time frame to stop, and he didn't. And so I think that his actions were indefensible. However, when you're talking about criminal prosecutions, they can't just be an expression of condemnation. You actually have to prove that somebody engaged your criminal behavior. And the issue here with this January 6th case is that it relies on novel legal theories. There's actually a a really good article in the New York Times of all places explaining this. Jason Calacanis (01:13:24): Do you think there was a possibility that he if he could have, he would have turned over the election if Pence had gone along with it. No. David Sacks (01:13:32): No. You're you're you're getting into a bunch of hypotheticals here. The question is whether these charges will actually stand up to scrutiny. Let me read you what David Leonhart from the New York Times reported because I actually think when you have the New York Times saying that the case is weak, I think it's really indicative. So what the New York Times says or Leon Hart says is talking as it was, Trump's behavior on January 6th did not violate any laws in obvious ways. He never directly told those that January 6th rallied to attack Congress. During his speech that day, he even said he knew that protesters would behave peacefully and patriotically. It was part of a longstanding trump pattern in a witch as my colleague Maggie Hamerman puts it, quote, he is often both all over the place and yet somewhat careful not to cross certain lines. And quote, as for Trump's broader effort to overturn the election, result. No federal law specifically bars politicians from attempting to do so. Without such a law, Smith has relied on a novel approach. She has charged Trump with committing criminal fraud and violating conspiracy laws that were not written to prevent the overturning of election result. And then he says that you keep part of these laws. They revolve around a person's intent. Intendous court to the notion of fraud. Only if someone is knowingly trying to deceive others, can he be committing a fraud? And he says that's why the case seems like they revolve around Trump's state of mind. So the problem with this is they have to not only prove that what Trump did in the wake of the election was indefensible and outrageous and all the things that you believe, they have to prove that Trump knew that he lost the election and knowingly stage of fraud. And I don't think you'll be able to ever prove that beyond a reasonable doubt, but even though, yes, there are statements that they point to. Jason Calacanis (01:15:09): Yeah. Make all those statements and then Bill Barr Mark Meadows, everybody's flips on him. Pence has flipped on him. They're all flipped on Speaker 4 (01:15:16): him now. David Sacks (01:15:16): Same as me. Those people. Yes. But Trump also had this whack back of lawyers. So you had Giuliani and you had Sydney Powell and John East Smith and Mike Lindell, the pillow guy. They were all in the White House telling Trump, that, listen, you won the election. You've been robbed, and there are valuable legal grounds for you to contest this. And Trump for years has been maintaining the stolen election narrative. Even when his advisors have told him, this is not good for you. The the guy has stolen election on the brain. Okay? Every interview He's brought this up even when it's manifestly harmful to himself and their Republican party. So this idea that you can prove that he doesn't really believe the election was stolen. The one thing I believe about Trump is that he really does believe the election was stolen. And I think you will never be able to prove beyond a reasonable doubt that He is knowingly lying about that. And as a result of this, you can never prove this case. Now it also relies on this novel theory. They are turning the civil rights line to a pretzel to try and figure out a way to indite trump or prosecute him under this novel, leal theory of committing, quote, fraud against the American people. Okay. This ain't novel legal theory that's never been tried before. And by the way, if you're gonna create those as a precedent, I hope we're gonna go after those those signers of the Lancet letter we talked about because they committed a fraud against American people, I hope that we will prosecute the 51 spies who lied because they perpetrate or fought against American people. I hope, Hassan, and I hope we will go after the authors of that steel dossier, because they perpetrate it or fought with the American people. There's a lot of people in Washington who perpetrate or fought in the American people. Hope we're gonna go after all of them, but my point is this. It's not the job of a prosecutor to be creative with the law ever. David Sacks (01:17:01): I mean, they are supposed to apply the law strictly as written. They're supposed to bring cases that are open and shut. And what Jack Smith is doing here is going for this bank shot where he wants to charge trump with incitement, but he knows he can't win that case. So he's going for this backdoor or civil rights law to sidestep the first amendment problem. And it might be this is an abuse of prosecutorial power. And once you let prosecutors get creative like this, you're on a slippery slope to show me the man. I'll show you the crime as installments Russia. So, listen, I believe that, again, Trump's actions were illegitimate and outrageous. But, again, the purpose of criminal law is not to express disapproval. You have to be able to prove these cases in an open and shut way without novel legal theories. Chamath Palihapitiya (01:17:46): I just wanna say I need to give I need to give SAS a 10 out of 10 for this last piece. That was Excellent. Jason Calacanis (01:17:52): Absolutely. David Sacks (01:17:52): Excellent. Jason, here's the question I Speaker 4 (01:17:54): asked you. Jason Calacanis (01:17:54): Go ahead. David Sacks (01:17:54): Do you believe that Trump was guilty of inciting an insurrection? Jason Calacanis (01:17:58): Absolutely. Yeah. When he told those people to, yeah, when he told those people to go down, why hasn't Jack Smith? Yeah. It's hard to prove. David Sacks (01:18:04): Why hasn't Jack Smith indied at Trump. They've indicted Trump on all these different charges with over 500 years of jail time, and they have not indicted in for a site. Then why not? Jason Calacanis (01:18:13): They they they could always add to the charges. And so I suspect when they start flipping people, they will. But, you know, it's David Sacks (01:18:18): kind of meaningless to have this discussion. Jason Calacanis (01:18:20): We should move David Sacks (01:18:22): No. Hold on. Hold on. Hold on. Jason Calacanis (01:18:22): Let me finish this question. Here's the thing. You know what? 30% of people in the Republican party, about 30% of this country have Trump Stockholm Syndrome. They cannot let go of Trump. And so there's no reason to debate it with the GOP. They have TSS. And it it you're going to defend him to the dying day, you're going to do what about isms. The Republican Party will never accept the fact that this person's a criminal. He's corrupt. And he's a horrible human being, and he he is not fit to serve. And you're gonna serve him up as your candidate. It's disgraceful. The GOP is a disaster for for actually supporting him. Guy has no morality, and he would have overturned the government if he had the chance. And he will do it again. Speaker 4 (01:19:01): Can David Sacks (01:19:02): I respond to this? I only have a couple of different points here. Jason Calacanis (01:19:04): Alright. So let me make as many points as you David Friedberg (01:19:06): there are people that are David Sacks (01:19:07): absolutely fixated on January 6th. And it's the people who've been trying to whip this up and make it into a crime and invent all these novel charges and haven't stopped talking about for the last two and a half years. I'm so sick at talking about this all January 6th thing. I don't want this to be our politics. Okay? The people who've made it our politics include the the mainstream media. It's all the people on CNN and MSNBC won't stop talking about And part of the reason why, I think Trump for likely will be the nominee is because they are creating a backlash in the GOP where people basically think that he's being unfairly prosecuted and persecuted. Now to my question, why aren't they charging him with incitement? That is the crime that the media says he has committed for the last two and a half years. So why aren't they charging him? Speaker 6 (01:19:52): Because the DOJ looked at that that the beginning David Sacks (01:19:56): of 2021. Merrick Garland DOJ looked at that, and they did a report and found that they could not win that case. And when that came out, the media and even Biden himself said that Merrick Garland was basically being a wimp and should be tougher And so that's when they appointed Jack Smith to be the special counsel to go find some out of the way of prosecuting him. And so that's why they've invented this novel legal theory. Now I think the reason why we should care about this that has nothing to do with wanting to defend Trump or make him the nominee is that I don't think our political systems should be weaponized this way. Because when they can start inventing novel legal theories to get somebody, that's what they've done here, Jason. It's show me the man, and I'll show you the Now tried to Jason Calacanis (01:20:41): overthrow and reverse the election, and he tried to do that by putting up a fake slate and he tried to convince Pence to go along with it. Pence is an honorable person who wouldn't go along with it. And everybody in his cabinet said this is a bridge too far. His To his supporters from Barr to Pence, to Meadows. All told him, please stop. What you're doing is illegal. You cannot overturn the government the the the election results. David Sacks (01:21:07): But are you saying this Jason Calacanis (01:21:08): are you saying this David Sacks (01:21:09): as an expression of condemnation against Trump? Or you saying that that Judge Smith actually has. Jason Calacanis (01:21:15): I think it'll be proven that he broke a lot. I think it'll be proven in the documents case that he also tried to cover it up, but that's just my opinion. I believe that he's a criminal. Believe he will be held accountable. I think he should be held accountable for trying to overthrow the election. He o tried to overturn the election. That is the most treasonous thing you can do. You can come up with all of your customers. David Sacks (01:21:34): Charging with incitement. They have not done that. They've invented not only a thing that has ever existed before. Jason Calacanis (01:21:39): He's a very smart guy when it comes to avoiding accountability. And I think that it's his the clock is running out for him. David Friedberg (01:21:46): You know what, Jake? How do you not think that it's a little surprising that all of these charges are hitting years after this event took place in the months leading up to the Republican primary. Jason Calacanis (01:22:00): No. I think it's David Friedberg (01:22:02): That's the weirdest thing to me is, like, why would it take so many years to prosecute someone? All those guys that went into capital the capital building, they all got charged with crimes years ago, you know, 2 years ago. Wow. Why is all this stuff falling on Trump today? They it's like they because Speaker 4 (01:22:15): Trump and David Friedberg (01:22:16): Jerry, I Jason Calacanis (01:22:16): mean, in this case, Yeah. David Friedberg (01:22:17): And they take Jason Calacanis (01:22:18): time to build these. David Friedberg (01:22:19): Because it it I will say it does feel like it is interrupting a political process that if there were criminal charges to be filed, I would have liked to have seen them filed 2 years ago so this could all get adjudicated ahead of a political cycle. Now that it's in the middle of a political cycle, it makes me as a US citizen, nervous about the fact that there are agencies interfering in the political cycle. Chamath Palihapitiya (01:22:39): They're so right. Jason Calacanis (01:22:40): He could have given the documents back when they asked for them, and he could have said, don't delete the case. I'm talking about both. Yeah. And it takes it it takes David Sacks (01:22:48): a subject to the case. Jason Calacanis (01:22:49): No. I'm talking about both cases. I'm talking about both cases concurrently, which about it. In that case, David Sacks (01:22:53): he will say the document is more solid, but less important. Okay. Actually, leonard says this, in the New York Times, Jason Calacanis (01:23:00): But you asked me a question. I I think it takes time to build a case properly, and it took them a long time to get through the four hundred people who attacked the capital and brought tens of thousands of rounds of ammunition to the Capitol and put it in 3 hotels, which is why the oathkeepers got 18 years. 400 people have gotten sentenced in that for good reason. They beat cops. They beat. They broke down their way into the capital. And they brought dozens of AR fifties, and they bought tens of thousands of rounds of ammunition and placed them in hotels around the Capitol. These are dangerous domestic terms. They would have David Sacks (01:23:36): shot him for that. That's not what he's being indicted for. No. Jason Calacanis (01:23:39): They I'm talking about who they they already got those oathkeepers on 18 years. David Sacks (01:23:43): I just wanna read this one sentence from from Leon Hart just to wrap this up. Because this is the New York Times. This is the New York Times. He says, you can think of the new charges as being both more important and less solid than Trump's previous federal indictment. Jason Calacanis (01:23:57): I'm listening. Everybody's gonna have different opinions on this. I I I get that. I just hope he has his day in court, and I think he's guilty, and I think it'll be proven that he's guilty, and that it's time to start moving this towards a pardon and figuring out how to get him out of political life and give him a pardon for all these crimes he's committed and let him off the hook. But get them out. And so that your party can failed a good candidate. That's what I hope happens. David Sacks (01:24:21): I think one of the really tragic side effects of these prosecutions where they're inventing novel legal theories clearly to get this man for what he did, even though it was outrageous, but I don't think criminal in the way you want it to be, Jason. But the really tragic Jason Calacanis (01:24:35): thing about this one I would rather he didn't do this criminal activity. Yeah. David Sacks (01:24:38): I get it. I get it. I literally I don't want it to be. I'm ready to state. I'm not defending his actions. I'm defending the integrity of our legal system. So, really, the tragic thing about this, the tragic thing about this is that I want the 2024 election to be about issues. It's not. It's gonna be a referendum on what happened in 2020 And there is no way to convince either side of the American people that they're wrong about that. The MSNBC, CNN crowd are gonna believe that Trump is guilty of a crime no matter where this case comes out. And by the way, I think Trump's actually gonna win this case. Maybe not in the DC jury pool, but I think he'll win it on appeal because I just the Jason Calacanis (01:25:16): Supreme Court. Yep. Speaker 4 (01:25:16): I think if he David Sacks (01:25:17): has to take the Supreme Court, he's gonna win it because it'll just say a novel legal 3. By the way, Jack Smith took a case against the Virginia governor to the Stream Court got overturned on appeal of 90 because of an outrageous legal theory there. So that same thing could happen here. I think it probably will. But but those people who believe in this, will never be convinced. And by the same token, Trump supporters, the other half of the country will never be convinced that this was not a political execution. Jason Calacanis (01:25:41): It's TDS versus this. David Sacks (01:25:43): This will tear the country apart. And to Friedberg point, it's two and a half years later, we could have just moved on there's plenty of other things. They already have the documents case. So this is a political prosecution by Biden's own. Jason Calacanis (01:25:57): Do you have any way to get it? What's your what's your solution to get out of this? We should David Sacks (01:26:00): have just moved on. Jason Calacanis (01:26:02): Oh, not charge him. David Sacks (01:26:03): Yeah. Listen, the the proper forum to deal with this was the impeachment hearing. The second impeachment was expressly on the correct charge, which was whether Trump incite an insurrection. They already had this trial. The proper form was that impeachment trial. He made it through, and it's up to voters to Jason Calacanis (01:26:23): take this talk out. Actually said the proper one was to go criminal, so it was interesting. Yeah. He said the impeachment was the wrong way to do it. They should just do the criminal. So here we are doing the criminal then. David Sacks (01:26:31): The country should move forward. And instead, we're David Friedberg (01:26:33): gonna turn it apart. David Sacks (01:26:34): And this is what 2024 is not gonna be about. Jason Calacanis (01:26:37): What do you think, Friedberg? What what do you think is a good path? Forward. David Friedberg (01:26:40): I kind of align with the fact that this is a little bit too late. It's in the middle of an election cycle and the damage that it will cause in terms of how our country views the intersection between the justice system and the electoral process can be more damaging than the benefit we would gain from bringing an individual to justice for breaking the law in this case. Unfortunately, the timing is just off, and I think it's really scary. David Sacks (01:27:06): Alright. Jason, you have to ask, what what is actually gonna strengthen our democracy? And what is the wisdom of bringing these charges? I think this case shows a lack of wisdom. Don't think it's gonna strengthen our democracy if it's gonna undermine it. It's gonna make this country more polarized and hyperpartisan, and it's not gonna help us move past this era of our politics. I believe that. Speaker 4 (01:27:24): Was that David Sacks (01:27:24): a question towards me? I think Trump is responsible for part of that polarization, but I think Biden now is playing into it from the other side. I don't think we've had a president seek to indict his leading political opponent who's likely to be a opposition. Jason Calacanis (01:27:39): Involved in this. This is just the justice department. He's not he's not driving it. David Sacks (01:27:43): Wait a second. That is not true. Jason Calacanis (01:27:45): K. Yeah. He's he's not involved in him. David Sacks (01:27:48): No. There was an article in which Biden said that when Merrick Garland refused the incitement charges, that he thought that it was weak in that Biden thought that Trump deserved he prosecuted. And that was a public articles in the New York Times, and I'll provide the note. Okay. I'll provide the statement. Jason Calacanis (01:28:04): Question for me? Do you have a question? You said you wanted to ask me a question? David Sacks (01:28:07): Well, no. I didn't say a question. I just said you can respond. Jason Calacanis (01:28:10): Oh. David Sacks (01:28:10): But my my point is I now think that Biden has passed a line here. And just remember, this is not an independent prosecutor. Jack Smith works for Merrick Garland, who works for Joe Biden. This is Banana Republic type stuff. This is one president's DOJ, seeking to prosecute his main political opponent. Jason Calacanis (01:28:28): Who put Mary Garland in? David Sacks (01:28:30): Biden appointed him. Jason Calacanis (01:28:33): Yeah. So, this has been the all in podcast. Chamath had to bounce. Friedberg Burke, congratulations on okay 99. I hope it happens. Sach, sorry about David Friedberg (01:28:42): Congratulations to you too. Congratulations to you too, Saks. If it's proven to be real, we will all benefit. So it's great. Yeah. Right? Jason Calacanis (01:28:51): And we'll see you all. Speaker 4 (01:28:52): Good for us. Jason Calacanis (01:28:53): Next time. Speaker 6 (01:28:58): Your winter's ride. Jason Calacanis (01:29:00): Rainman, David Sachs. We Speaker 6 (01:29:05): open source it to the fans and they've just gone crazy lately. David Sacks (01:29:14): What airliners ride. Speaker 4 (01:29:21): You. Speaker 6 (01:29:29): Have one big huge order because they're all just useless. It's like this, like, sexual tension, but they just need Jason Calacanis (01:29:34): to release them out. Let's go.