科技七巨头遭抛售、Wiz 拒绝谷歌收购、全民基本收入、哈里斯接棒、中国核能扩张、萨克斯回应 PG

Jason Calacanis (00:00:00): Oh, no. Gosh. I'm having some technical difficulties, Friedberg. There's something happening. Chamath Palihapitiya (00:00:04): Oh, you got a bit? Oh, Jason Calacanis (00:00:06): there's something breaking in. Chamath Palihapitiya (00:00:07): Oh, that's happening. Speaker 3 (00:00:08): Oh, no. My camera is not working, but I sense something is happening, guys. Jason Calacanis (00:00:13): It's like a transformation I'm going through. Speaker 3 (00:00:15): You're not gonna believe it. Yes. It's just I. No, Shrikalia. Same here. I'm here. Gosh. Riccanis has arrived. I have predicted the hot swap, Sacks. Can I get my powers now from you, Sacks? You need to bring it. David Sacks (00:00:30): I give you I absolutely give you credit for that. You also predicted a speedrun primary, which is the opposite of what happened. Speaker 3 (00:00:36): Okay. So David Sacks (00:00:37): one out of two is not bad though. Speaker 3 (00:00:39): No, Riccanis did not account for the Democratic Party being run by the deep state. I'm having a vision. Producer Nick. There's a vision for you coming into view. Yes. Your uncle has been bought out of the All-In Podcast. It's going full MAGA. And he got the $25,000,000,000 buyout deal, and he gave you 20 percent. We're leaving. We're going to start a new podcast. And Jared Kushner is the new moderator here. Oh, no. Wait. It's J. D. Vance. No. It's Alex Jones. Starting next week. Alex Jones, the new boss. Oh, wait. I'm going away. What's the account? It's the same. Jason Calacanis (00:01:28): It's the way. The weather is wide. Rainman, David Speaker 3 (00:01:35): Sackerinson. Open source it Jason Calacanis (00:01:36): to the fans in a discoloration. Love you guys. Ice ice cream. I'm going all in. Alright. Let's get started here. We've got a full docket. We've got civil wars. Everything is going down in All-In land. It is episode 189. You're not done with us yet, folks. The world's number one podcast is still publishing. The world is still spinning. Chamath Palihapitiya (00:02:00): Hey. Did you announce that you moved to Texas? Jason Calacanis (00:02:03): I did. I did. I did. I did a little tweet. We moved to Austin a little earlier this year. We have a horse ranch. And, you know, we've always wanted to move to Austin. We looked during the pandemic. Thanks for asking, Chamath. And we wanted to have a ranch and horses and live a more homesteading lifestyle and obviously, a lot of our friends are in Austin. So I'll still be spending a lot of time in the Valley and New York like I always do in Miami. But the home base and the girls are going to school in Austin. Chamath Palihapitiya (00:02:34): How is it going so far? It's super hot. You know, isn't it? The summers Jason Calacanis (00:02:37): are hot, but most people decamp. So we'll decamp for Tahoe or Park City or something during the summer months and the winter months, to go skiing in, get a little lake time or whatever. And, yeah, we're really, really excited. We found an incredible horse farm, and we're gonna raise animals and horses and just enjoy these last years with the girls. While, you know, some big announcements are coming in terms of my accelerator and my investing in startups in Austin. So I'll save those announcements for maybe the fourth quarter, some big announcements will happen. And, yeah, I'm just super excited. Obviously, I'm gonna miss, you know, the weekly poker game, but I will be back on the regular, and we'll just do a double session, play Friday, Saturdays. We'll do. You gotta get this for 2 days in a row. We'll just do a full Friday session. Everybody take my Fridays. Chamath Palihapitiya (00:03:27): I'm sad to see you go. Jason Calacanis (00:03:28): The one thing I'm sad about is, like, missing the Thursday game. But I'll be back regular. David Friedberg (00:03:33): Don't forget Science Corner today. We got a great Science Corner lined up. Absolutely. Absolutely. Absolutely. Looking forward to it. Sacks and Speaker 3 (00:03:39): just texted me David Friedberg (00:03:40): all week about it. He's like, I can't wait for Science Corner. Thrilled. He was shaking nervously. He's ready. Jason Calacanis (00:03:47): Sacks does not look amused. Alright. Let's get started. Wiz has declined Google's $23,000,000,000 offer, and it intends to IPO. Some big news there. Last week, we talked about Google offering to acquire this cloud security startup for $23,000,000,000. CNBC reported Wiz declined Google's offer. Wow. That's big time because Wiz was valued at $12,000,000,000 in its most recent funding round. They've got about $500,000,000 in ARR. So this $23,000,000,000 is a massive, massive fifty times current revenue, twenty-three or so times forward-looking revenue. They think they'll hit $1,000,000,000 in ARR. This is a company founded in 2020. And just so if you don't know what they do, they help people secure their data in clouds, like AWS, Azure, Google Cloud, all that good stuff. But high-growth SaaS businesses are trading at a 10x forward revenue multiple. There's the chart. This is obviously an absurd premium and two potential reasons that I can think of. And I'm curious, your positions, gentlemen, of why they would do this. I guess Chamath, there's two reasons. One, they think they can grow this company at a high percentage, maybe fill in that premium Google was willing to pay, or maybe they're scared that they can't get this deal through, you know, regulators. What's your take here? And then we'll go talk about the wider cloud and Google Cloud and AWS in a moment. But what's your initial take here of why they would do this? Chamath Palihapitiya (00:05:16): I actually wonder whether this deal would have had more probability of happening had the whole AT&T Snowflake leak not happened because I think that when you have moments like this, there's a nontrivial possibility that it supercharges sales even more. I think the reality is that if you're a hyperscaler, so if you're Amazon or Google or Microsoft, your business is pretty fragile and brittle. If the services you provide or the services that third parties like Snowflake provide through you are not reliable. And so I've never heard of a business that has generated so much ARR so quickly. I mean, from zero to half a billion dollars in four or five years. I mean, how do you even build the product surface area quickly enough to capture that much revenue? I think it just goes to show you how bad security is in the cloud and how needed it is. So it doesn't surprise me that Google wouldn't buy something like this. I think Amazon and Microsoft would probably want something like it as well. I suspect that if you had to guess why they said no is because they thought that they could grow revenue much faster because of recent events as well as their own just natural momentum. And I think that if this thing had not happened, I wonder whether they wouldn't have just sold. Jason Calacanis (00:06:46): Alright, Sacks. I wanna get your take on this after showing you a couple of charts here. Google's cloud revenue growth has been absolutely stunning. Here is a chart. They're gonna hit. Gosh. In the first half, they did almost $20 billion. So they're on a run rate of $40 billion this year. Last year, they did $33 billion. Back in 2017, they only did $4 billion. And if you compare this to Amazon's AWS, again, these are cloud services. People can buy compute in the cloud. AWS, if you look at those first seven years, the All-In research team put these side by side. Google is tracking almost identical in revenue to AWS's. Interestingly, Meta and Apple do not have a competitor here. You said, on this podcast, Chamath, I think, last year. That would be a pretty bold move by Apple to have a cloud computing platform since they have all the app developers. Sacks, what do you think of this? Just tremendous run by Google Cloud. We're also known as GCP in the industry. David Sacks (00:07:49): Well, all the cloud service providers are doing extremely well. I mean, cloud is still the future of software, and the cloud service providers are still growing really strongly. On Wiz, I think the most likely explanation is that they just wanna keep building this as a standalone company. I think they're probably also worried that they can't get the deal through. The multiples that we have right now are not that insane. I mean, I think the long-term median software multiple is around a 7. So, you know, you see here the mid-growth median 7.7. We're about tracking at the historical pre Speaker 3 (00:08:20): COVID mean. And we had David Sacks (00:08:20): that really frothy bubbly period in 2020 and 2021. And that's clearly over. Now in terms of how our friends at Altimeter break this down, I think that high growth means a 30% or greater growth rate. And then I think the mid-tier is more like, was it like 10 or 15% to 30%? And then the low growth is like, you know David Friedberg (00:08:48): Yeah. So David Sacks (00:08:51): my point is if Wiz is growing at Jason Calacanis (00:08:54): 100%. David Sacks (00:08:56): A 100%. I mean, I don't know if it's still growing at 100%. But, I mean, I guess they're projecting it. Jason Calacanis (00:09:01): Yeah. It would be. David Sacks (00:09:02): Yeah. They're projecting $1 billion in ARR next year up from, what is it, roughly, $500 million? Like, that offer may not be that crazy. Again, you know, you're getting 10 times at a 30% average growth rate. So, you know, let's say they get to $1 billion in ARR next year, and then they're forecasting, you know, whatever it is the year after, you know, the 23 may be reasonable. So I can see why these guys would just wanna go for it if they think they're building a big standalone company. Jason Calacanis (00:09:33): Friedberg, let's talk a little since you were at Google at some point, this GCP product, maybe you could tell us a little bit about, and I know you know some of the people running it. How meaningful this is becoming to Google or how much of a priority it is. YouTube, obviously, Android, priorities there at the company, then you have, like, the next tier down, Nest, Waymo, you know, some of those other projects. But how important is GCP right now to Google? David Friedberg (00:09:59): Well, GCP in the last quarter did $10.3 billion in revenue. Which is up from $8 billion in revenue the year before in the same quarter. And importantly, in this past quarter, they're running at a $1.2 billion operating profit out of GCP. So, you know, if you kinda think about what cloud margins should be over time in the, kinda, call it, 20 to 30% margin, this cloud business could be generating $20 to $30 billion a year of free cash flow. Now in the last year, if you kind of look at or even if you look at the last quarter annualized, Google is generating currently about $60 billion a year in free cash flow as an overall organization Alphabet is. And they have over $100,000,000,000 in cash. So, you know, what can I do to accelerate this cloud outcome given the risks, the challenges, the slowdown with respect to the core consumer business? Cloud and AI-based tools really are where it's at. And so Google's asking this Speaker 3 (00:11:00): important strategic question, I would imagine. What can we do to accelerate outcomes in the cloud? And what can we do that is gonna be big David Friedberg (00:11:01): enough to matter? Speaker 3 (00:11:11): And what can we do that is gonna pass antitrust muster? So we can actually get it through antitrust authorities. So cloud security kind of comes top David Friedberg (00:11:11): of mind. It's a fast-growing segment as evidenced by the results with Speaker 3 (00:11:14): Wiz. David Friedberg (00:11:24): And it's an opportunity for Google to cross-sell and to secure more enterprise customers and theoretically cross-sell more enterprise revenue by getting folks on a platform that Google could now Speaker 3 (00:11:30): offer. David Friedberg (00:11:38): I would imagine that what Sacks is saying is probably right. I have absolutely no sense of what these individuals and board members at Wiz are thinking, but I think what Sacks is saying is right. This is an incredibly fast-growing business. Peter Thiel made the comment once, which I think is totally right. Either the buyer pays way too much or the seller Speaker 3 (00:11:54): sells way too early. When you have a fast-growing business like this, it's really an important question to kind of acknowledge that if Wiz continues to grow at this rate, David Friedberg (00:12:05): it's conceivable. They could be in the range of Palo Alto Networks, $100 billion market cap in a couple of years, you know, given, given this momentum and if you, if you progress it forward. So if I was them, I would ask that question, could we reach $100 billion if we feel reasonably confident? This may be a risk worth taking. What's the downside? Right? The downside is they go public next year anyway, and maybe they're only valued at $15 billion or $20 billion. There's not a lot of downside from this offer and certainly seems to be quite a bit of upside. But I think for cloud, the thing to watch is what they're gonna do next. Google wants to accelerate beyond AWS. They wanna become the leader, and they're gonna look for other sizable transactions that will pass antitrust muster. And so I think you could see them perhaps looking at some public M&A in the same space. And I wouldn't be surprised to see them start to get active in that sense. Jason Calacanis (00:12:53): YouTube and GCP are the two money printing machines inside the organization that have actually paid off. Android's paid off in terms of dumping more search. You know, from the default search buttons or boxes. But I guess to steelman the other side, if you're on the board and you want your cash, you know, you get 100% of it. You take no risk. And what if Google decides they're gonna make this product free and bundle it as we saw Microsoft do in a number of cases, and they just Microsoft Teams this or Internet Explorer. I guess that would be the risk is if Google feels some vendetta here and puts this product out for free. As you alluded to, Chamath, it was a big week for cybersecurity. CrowdStrike had a really rough week last week when they knocked out 8.5 million Windows machines. Just to briefly explain what happened here, obviously, Wiz is cybersecurity. And so is CrowdStrike. CrowdStrike instead of working on datasets in the cloud, they work on securing your laptop, your desktop, your servers, all that kind of stuff for threats, and they did an update. And when they did their update, a sensor configuration update as they called it to Windows machines. They basically bricked them, and this wasn't a cyber attack. They're a cybersecurity company. They weren't attacked. They updated it, and it crashed all these machines. And these machines all needed to have a hard reset by IT. It wasn't something that could just be field swapped. Apparently, people have to go back to their offices. In some cases, Delta was hit hardest. They canceled over 6,000 flights. And there's a Department of Transportation investigation going on now. Shares are down 25% since Friday. So that represents $24 billion in market cap for CrowdStrike's CEO. It's been clowned for his apology and explanation. And, the good news though is they sent everybody an Uber Eats gift card. So I'm super happy about that. Chamath, Sacks, looking at this and dovetailing with the last story. This is gonna be an ongoing story and one of the big trends in our industry, yeah, major outages like this. Chamath Palihapitiya (00:14:58): I think the reality is that that code is still really brittle and there's gaping holes everywhere. And I suspect that the reason why foreign adversaries don't hack us is because we could hack them back. And so I think it's almost like a mutually assured destruction is the only reason why these things stay up every day. So at some point, we're gonna write better code. Maybe these AI agents will do it, and there won't be, like, memory leaks and all this other random stuff. But in the meantime, I think you just have to assume that everybody will get access to all of your information and that eventually everything is hacked and everything is leaked. Jason Calacanis (00:15:37): Yeah. And act accordingly. Yeah. Assume the worst conversation you ever had on social media or on DMs is gonna come out. Alright. I think we've kinda finished this. Well, anybody have any thoughts on the Scratch bike thing? Seems like it's over now. I don't David Sacks (00:15:52): have a lot to say about them except actually this is that that company has some murky connections to the deep state. And, yeah, well, apparently, they're straight. Yeah. Their fingerprints were all over, you know, Hillary's bleach server. Then there's been other reports, which I don't know exactly what to make of. I can say this. That in the wake of this, Elon announced that he was removing CrowdStrike from any of his company's servers. Similarly, I had my IT department check and make sure that we didn't have it running anywhere. We don't. I'm just gonna be frank. I don't trust this Jason Calacanis (00:16:24): company. Alright. Do you have it? Deep state, tinfoil hat? Deep state. Deep state. Accusations or tinfoil David Friedberg (00:16:34): hat today. I forgot. David Sacks (00:16:35): You believe what you want. That's fine. I don't Jason Calacanis (00:16:37): there's a first time hearing about it. I don't have my tinfoil hat here. But, who knows? I guess, David Sacks (00:16:43): Use their products if you want to. We use their products. Jason Calacanis (00:16:45): They have the folks. And Sacks is as, puts his endorsement baton Palantir, definitely not deep state Palantir. David Sacks (00:16:54): So Palantir, look, there's no question that Palantir sells into the deep state, but I don't know that that makes it deep state. Jason Calacanis (00:17:01): They're on your team as opposed to the end. Speaker 3 (00:17:03): So David Sacks (00:17:03): No. Not not not on any team and perspective. I don't understand what you're saying there. Chamath Palihapitiya (00:17:10): I'm just goofy. David Sacks (00:17:10): I have shares in the company. I think it's a good investment. Jason Calacanis (00:17:14): Oh, okay. There you have it. Speaker 3 (00:17:15): Alright. Let's go to the stock market. Jason Calacanis (00:17:17): It just had it the first day. Because I gotta get a tune of oil. I'll have for a bit here. David Sacks (00:17:20): One thing I wanna say. None of us are at any risk of running Palantir in our servers. Okay? Absolutely. CrowdStrike is running in the background of many, many companies who may not even be fully aware of it, and they were certainly surprised when all those airlines' computers went down. Right? So my only point is maybe you should make sure about whether you're running their products or not and then make a conscious decision whether you think that's a good idea. That's all. Jason Calacanis (00:17:44): That's all. Just a little tip from "The More You Know," from Davidson. Take on. Take on. Move on. I'm trying. I'm trying the best. Right. The stock market just had its worst day since 2020 on Wednesday. Clearly, this is because of the January 6 interaction, the Nasdaq, which is the most day. I'm joking. The Nasdaq, which is the most tech-heavy, fell 3.6%, S&P down 2.3%. A bunch of the Magnificent 7 companies were in the red, but you gotta put this in context. Nasdaq and S&P are still up around 15% for the first half of the year, record-setting territory, obviously, if that holds up or increases. There's a lot of theories about this that people are rotating under the Magnificent 7 tech stocks, which were a place that maybe got a little overheated with the AI bubble. Here's the top gainers that are not in the Magnificent 7. As you can see, financials, energy, materials. Over the last six months, S&P financials, up 11%, S&P energy 9%, S&P materials 9% as well, broader index, up 11%. As we said, Tesla dropped 12% after missing on earnings, but they had a massive run-up earlier this year. Google dropped 5%. I guess YouTube was what most people pointed to. Their revenue came in lower than expected. So maybe some softness in the advertising market, which would then correlate with consumers and video down 7%, Meta down 6%. Chamath, any thoughts here on what we're seeing? You talked a lot about the consumer weakening on an episode about six weeks ago, I believe. So is this just the manifestation of that prediction you made? Chamath Palihapitiya (00:19:20): Not this specific thing. I think that when you see a broad base set of revenue misses, that that will kind of mean that the consumer is really under pressure. I think I still think that that's more in the fall. But we're headed in that direction. I think what happened here is that the market is just priced to perfection, and all of a sudden, we had all kinds of volatility. You had the former president almost assassinated. You have the current sitting president resign. You have a somewhat convoluted process to David Friedberg (00:19:51): pick who replaced him that Speaker 3 (00:19:51): at a minimum was a fake, and all of these things create doubt and anxiety Chamath Palihapitiya (00:20:02): in the people that own financial assets. And so if you saw the volatility index, the VIX, that has spiked. And so whenever you see that stuff happen, people go risk off. Right? And when you go risk off, what do you sell? You sell the things that are deepest in the money where you think that they probably don't have that much more room to run, and that was the Mag 7. And so what you actually saw was a huge rotation out of those companies into everything but those 7 names. And I think that that's a pretty reasonable thing to do. So I think we're in the part of the cycle where people are getting a little bit more sober and risk managing. We're also in the middle of the summer where a lot more vacation is taken, which how it manifests is that people tend to be frankly more risk off and be more liquid because a lot of people are running out of the office. And I think the real setup is for what happens in September. Maybe there's a cut, which will help. Maybe there isn't, which won't help. And then the whole consumer cycle, the consumer credit cycle, that doesn't look good, to be honest. And so I think the fall is going to be complicated. Jason Calacanis (00:21:09): Yeah. Absolutely. What an eventful week on a political front. We'll get towards that. In a moment, but, Friedberg, your thoughts here, is it just people trimming their perfect positions and maybe a dispersion going out? People wanting to own some other assets that maybe have been undervalued Speaker 3 (00:21:27): in this market cycle? No. I think it's definitely this mini AI bubble Jason Calacanis (00:21:27): deflating a bit. And transactions are David Friedberg (00:21:37): Let me get out of some of these high-multiple tech stocks that are expected to grow rapidly because of AI and shift more into stable market recovery. Interest rates are gonna get cut type trades that will benefit there. So I think it's just a rebalancing. And as a result of the high concentration of the Magnificent Seven in the S&P and in the Qs, the indices look like they're coming down, but, yeah, there's obviously a lot of complexity in what's going on in the economy right now. But I do think that that's been a big trade for PMs, for portfolio managers over the last couple of weeks. Jason Calacanis (00:22:09): Makes sense. Yes. Sacks, if you owned a bunch of NVIDIA and it ran up, Meta, Google, Apple, other companies that ran way up, you might wanna trim your position here and deploy capital and balance things out. Yeah? David Sacks (00:22:22): Sure. I just don't wanna overreact or overread into one day in the market. I mean, today's up. Yesterday was down. These are blips in the grand scheme of things. Even a 2 to 3 percent move is just not that unusual. Jason Calacanis (00:22:33): Yeah. Especially given the context, but definitely something worth keeping David Sacks (00:22:37): an eye on Jason Calacanis (00:22:38): is what the earnings reports will say for Q3 and Q4, and those will come out towards the end of the year. Okay. Some interesting news: Sam Altman did a UBI experiment a couple of years ago. He put $14 million of the $60 million into this experiment that was done by a firm called Open Research. It's a nonprofit group that was founded in 2015 out of an accelerator called Y Combinator, first time hearing of that one. Well, here's the experiment they did. This took place between November of 2020 and October of 2023. Three thousand low-income adults in Texas and Illinois, making just under $30,000 a year on average, were selected. One thousand participants received $1,000 a month for three years. So on top of the $30,000, they got $12,000 a year tax-free. So that's nearly a 50% pay increase for doing no more work. Two thousand control participants received $50 per month over the same period. Speaker 3 (00:23:39): And the research collected and studied a bunch of data. They did Jason Calacanis (00:23:39): blood draws to do a health impact. They had a custom app to track time usage, work, play, etcetera, and they checked everybody's credit reports Speaker 3 (00:23:51): and bank balances. So broadly speaking, the research found almost no lasting Jason Calacanis (00:23:52): impact on everything they tested from overall health to education. And here are the quotes directly from the paper, and I'll get the gentleman's take on this. UBI is super fascinating, obviously. The cash transfer resulted in large but short-lived improvements in stress and food security. We find no effect of the transfer across several measures of physical health. We also find that the transfer did not improve mental health after the first year. And by year two, we can again reject very small improvements. Final quote, we also find precise null effects on self-reported access to health care, physical activity, and so fascinating and reinforces Chamath Palihapitiya (00:24:38): a bunch of intuition that I think we would probably all have. Have you guys seen these studies where when somebody has an amputation or they get paralyzed? They study their free levels of happiness, their interim level of happiness, and then they just kind of mean revert to their natural state of happiness independent of what physical calamity they may have gone through. And I, I'm, when you were talking about it, Jake, I was reacting in the same way, which is in the absence of, I think, purpose and community, I think children in many cases, it just doesn't meaningfully shift any of these curves that really matter. I think your happiness levels mean revert. I think your health levels mean revert. So it's great to kind of confirm at least my intuition, Speaker 3 (00:25:27): which is that UBI is a wonderful idea that I think doesn't really understand how humans are both motivated and Chamath Palihapitiya (00:25:31): wired. Jason Calacanis (00:25:43): Friedberg, thoughts? David Friedberg (00:25:45): Yeah. So I definitely agree. I think I've talked about this. We talked a little bit about it with Jonathan Haidt. There's some great studies that have shown in the past that the change in income is a better predictor of happiness than absolute income. Eventually, everything normalizes. So I think UBI makes no sense for three reasons. The first is this normalization of spending levels. So once you've kind of had this increase, you have a moment of happiness, and then you actually start spending differently or spending more. And effectively every human has one innate trait: desire. And desire is what drives humanity. It's what drives progress. It's what pushes us forward because no matter what our absolute condition, it's our relative condition that matters, relative to others, or relative to ourselves in the past or prospectively in the future. And so we always want to improve our condition. So a UBI-based system basically gives a flat income. So the only way for it to really work is if you increase the income automatically by, say, 10% a year. So in a UBI world, no amount of money will actually make someone satisfied or meet their minimum thresholds because those minimum thresholds will simply shift. And, you know, the second issue is just the net economic effect. If we gave 350 million Americans a thousand bucks a month, that's $350 billion a month. That's $4 trillion a year. Our prospective budget for next year is $7.3 trillion at the federal level. So, you know, that's already more than 50% of the total projected federal budget next year. Finding the mechanism for funding this at scale is not what this study actually looked at because if you look at it, the net effect would be inflationary. And that's the third major reason is that, ultimately, this would have an inflationary effect. Anytime we've stimulated the economy with outside money, with government-driven money, we see many bubbles emerge, and we see an inflationary effect. So look at COVID, there were all these little bubbles that popped up in the financial markets. David Friedberg (00:27:40): We had NFTs. We had crypto. We had all these sort of new places that money found its way to. And then we had an aggregate inflationary effect. Food prices are still up 30, 40% since COVID. And so net-net, I think that the study provides an interesting insight into the micro effects, the psychological effects, the social effects, but the macro effects are what is so, like, simply arithmetically obvious, which is inflation and an inability to actually fund this at scale. And fundamentally, people want to work. So they'll take that money and then they'll go find ways to work and generate more money, and you have this inflationary effect. So I think net-net UBI does not make sense. Jason Calacanis (00:28:16): Sacks, participants were 5% more likely to start a business by the third year. Maybe that was the most encouraging part of this. People worked slightly less, 2% decrease in labor participation, but that seems negligible. People in their twenties had a 2% increase in enrolling in post-secondary education, again, very tiny impact. There were major benefits to stress and mental health in year one, but by year two, as we talked about, it reverted to the baseline. How do you think about UBI in a world where, let's say, I don't know, we lost a large number of jobs in a short period of time because of AI? So in that hypothetical situation, and we hit 20 or 25 percent unemployment from the historic low right now, how might you think about UBI? David Sacks (00:29:00): Well, that's positing a future that I don't think is gonna happen. At least when Jason Calacanis (00:29:04): I try to, Speaker 3 (00:29:05): yeah, that's Jason Calacanis (00:29:05): why I'm trying to give you a hypothetical. David Sacks (00:29:07): Yeah. No. I just I don't I don't really buy that. And so I think this whole idea of UBI is premature. And very expensive, and it doesn't work. I mean, I think what we saw from the study, just to echo what Friedberg said, is that cash transfers don't work. We saw this in the Great Society, just handing people money doesn't solve poverty. It actually traps people in conditions of dependence. We also saw during COVID that all those stimulus checks might have had a macro effect on the economy of kind of boosting the economy during what could have been a COVID depression. However, at an individual level, what did we see? We saw people quitting or quiet quitting their jobs. They spent Speaker 3 (00:29:45): more on leisure, alcohol, and meme stocks. In other words, it wasn't tremendously productive. So I think that what we've seen in the past is David Sacks (00:29:55): handing people money doesn't create the types of outcomes that people want. And it Jason Calacanis (00:30:03): All this virtue signaling, Sacks? Is it virtue signaling, you think? David Sacks (00:30:06): Kinda. Kinda. Jason Calacanis (00:30:07): I'm kinda getting that vibe from you. Speaker 3 (00:30:09): Yeah. Yeah. David Sacks (00:30:09): I think it's a combination of virtue signaling combined with, let's assume that you wanna become the first AI trillionaire, and people are concerned about job loss. You're gonna virtue signal in the direction of, well, let's just give everyone money. And a lot of people in Speaker 3 (00:30:28): power will love that because it creates a lot of dependence. Yeah. David Sacks (00:30:28): So it serves the interests of tech moguls and people in the government, but I don't think it serves society. And I think one of the most interesting data points in the study, please confirm if I get this right. But what it said is that the people who got the $1,000 a month UBI saw their incomes rise to $45,000 on average while the control group who only got $50 a month increased their average income to $50,000. Actually, just shy of $51,000. So the people who didn't get the larger stimuli actually genuinely bettered themselves over the course of the study while the ones who got the $12,000 a year stayed in place. And that's kinda what you'd expect, right, which is if you just hand people money without having to work, it doesn't motivate them to work harder. It actually motivates them to be less. Jason Calacanis (00:31:21): Yes. David Sacks (00:31:22): And let's say that you're in a point in your career where you need to learn, you need to get mentorship, you need to advance yourself. By giving people UBI, you could be kicking out those bottom rungs of the ladder where, you know, the work isn't necessarily that fun, but you're picking up very important skills that are gonna help you rise up in the ladder. Speaker 3 (00:31:38): And you're not gonna Jason Calacanis (00:31:39): Like, sending your kids to be a cashier at a restaurant or a busboy or a waiter. Like, that teaches them a work ethic. I was a dishwasher. I did hard work as a child. David Friedberg (00:31:48): Like I David Sacks (00:31:48): was a bartender. I mean, look, these are all jobs that have dignity. I mean, I think work has dignity, and Speaker 3 (00:31:55): you need people to start somewhere. And if you just give them the stimmy or the UBI, it demotivates them from starting their careers. And you trap people at this David Sacks (00:31:55): lower level. I just don't think you're doing anyone any favors by doing this. Speaker 3 (00:32:11): And I Jason Calacanis (00:32:11): just wanna say, you know, my production company is in full swing, and we are actually working on a remake of Cheers with David Sacks. Yeah. As the bartender, as the lead character. It's a really great job. Looking at the back of the envelope math here, I'd had the crack research team take a look at this welfare, $1,100,000,000,000 budget in 2023, 8 different federal agencies, you know, Medicare. I'm sorry. Medicaid is in there as well. Unemployment, $33,000,000 paid across 1,800,000 participants last year. Food stamp safety, $113,000,000,000. We put all those numbers together. And we've got about 100,000,000 people participating in these programs in some way for $1,200,000,000,000 per year. This is all back of the envelope. It's imperfect, but that turns out to be about 12k each, Chamath Palihapitiya (00:32:59): which is exactly what the study Yeah. So not perfect math, but that's totally reasonable. I grew up on welfare. And we needed it to make ends meet, and we would have completely fallen through the cracks without it. And so I'm glad that I was able to be raised in a country that has welfare. Jason Calacanis (00:33:20): I guess my question to you, Chamath, is do you think all these agencies put together, you know, with all this administration and all this complexity? Would it be better if if we take somebody from this UBI or maybe consolidating down? No. Chamath Palihapitiya (00:33:33): No. Okay. No. Because I think, like, you need to be motivated as Sacks said. And so even though we got support from I grew up in Canada. So the Canadian government, there was still an expectation where certain things were not covered and you still had to work. And so you had to find motivation to pick yourself up and go out and get a job. And it just so happened that in our situation, even welfare and what my mom made as a housekeeper, and then as a nurse, wasn't enough, and my dad didn't have a job. So I went and I started working at Burger King and to Sacks's point, it's pretty eye opening when you're fourteen years old and, you know, you're working the night shift and people come in after going to the bars. They're drunk. They're puking all over the place. Sometimes you see people that go to your own high school. And it's a little bit embarrassing because you're working while they're going out. But at the end of the day, it was very motivating. And I think Sacks is right. If you take that away from people, I think that you end up with a worse society. I don't think that you have a motivated group of people that want to go and better themselves. I think they just become really lazy. Jason Calacanis (00:34:40): I think it's well stated, and I think the pressure cooker that immigrants are under or, you know, people who have tough situations, like it can create the diamonds. And, man, I do think a lot of the folks here on this podcast went through that pressure cooker and it does create a chip on your shoulder. And when people criticize these entry-level jobs, and they're, oh, they're not sustainable. Well, we do have a safety net in both countries. Speaker 3 (00:35:05): Kind of Chamath Palihapitiya (00:35:06): the U.S. David Friedberg (00:35:07): I think that that's not Chamath Palihapitiya (00:35:07): I think the problem is not the entry-level job. I think it's the expectation of people. And Friedberg just mentioned this, but what you have is that there is this desire doom loop Speaker 3 (00:35:18): that we've fallen ourselves into where what social media does is amplify, in many cases, a fake perception of what your neighbor has that you don't have. Yeah. Chamath Palihapitiya (00:35:30): And so you're in this constant desire doom loop. So if you go to a job and you're expected to work for four years, I'm just gonna make up a number, before you get promoted. And the perception is that your neighbor is getting promoted after eight months, you're gonna be mad and you're gonna be angry and you're gonna feel like life isn't working out for you. And we have to figure out a way of resetting that back to normal so that you know that that is a lie that is being told to get clicks and likes. And the real truth is Speaker 3 (00:35:59): you're Chamath Palihapitiya (00:35:59): gonna have to just put your nose down and grind at something to get what you want. And life is not perfect, and it's complicated, and it's messy. And we need to do a better job of that. Jason Calacanis (00:36:08): Let me ask you a question, Friedberg. If you were gonna do a 2.0 of the study, I was thinking about it. You know, where do you go from here? I just had this idea, like, well, what if you put, like, half of the money into, like, a perfect portfolio, wealth fund, one of those services, and allow people to take out maybe 5% of it every year, some sustainable amount so they see, you know, and get some education around that, or maybe put the money into a business formation fund. People can apply to get grants to, you know, maybe form a business and you kinda reframe how this UBI is distributed with milestones and maybe some education baked into it. That was my thought on where to go next. But then do you have any thoughts of where you would do a 2.0 test of this, or would you just David Friedberg (00:36:53): Well, that's not UBI. Right? And what you're describing, I think, exists and there are incentives and programs and opportunities out there. People can sign up with Roth IRAs. They can contribute some percentage of their paycheck to a 401(k) if they have a job that has a 401(k) set up for them. There's a lot of systems and mechanisms out there, and you get tax breaks for doing that. So there are mechanisms and incentives out there to do that sort of thing. The concept with UBI is can you pay people a flat amount of money so that they don't have to work and then they end up being able to explore and do other things with their life as the robot and AI does everything for them. And I've just always been of the belief that I don't think that there's this natural border that we hit beyond which humans don't work. I think that AI-based tools and automation tools are the same as they've always been. When we developed a tractor, people didn't stop farming. They could get much more leverage using the tractor, and far more and new jobs and new industries emerged. And I expect that the same thing will happen with this next evolution of technology and human progress. Humans will find ways to create new things, to push themselves forward, to drive things forward, and for the natural market-based incentives that fundamentally are rooted in this internal system of desire will create new opportunities that we're not really thinking about. So I don't believe in this idea of UBI and some utopian world where everyone's happy not working and letting machines do everything for them. I think that the fundamental sense of a human is to find purpose and to realize that purpose to drive themselves forward and progress themselves. And I think that that's always gonna be the case. Chamath Palihapitiya (00:38:25): The closest thing to leisure and leisurely pursuits that we have today in modern society is the nepo baby. And if you look at the, you know, but and if you look at the nepo baby, they're the most miserable group of people I've ever met. They're so unhappy with themselves. And so and part of it is because they've only ever lived a life of leisure. Jason Calacanis (00:38:45): to Alex Soros. Chamath Palihapitiya (00:38:48): No. I'm not name-checking anyone. I'm just saying, like, when I observe it, I think that you can see it right in front of you, which is that there's just so much inherent unhappiness because you're not motivated to do anything. And then that's amplified typically by guilty parents because they've been working so hard. So I don't think you need to run a second study. A different version of an idea that friend of the pod Brad Gerstner is working on, which I think deserves a shout-out, is this idea of giving every kid when they're born a retirement account. I think that's an interesting idea where you give them some amount of money, and it just matures inside of an index fund that gets unlocked for you when that kid is sixty-five or seventy years old. That's great because it helps you have a soft landing in retirement. I think that's very humane and the right thing to do, but it doesn't rob you of that motivation to work in your twenties, thirties, forties, and fifties. And that's a much better idea than UBI. Speaker 3 (00:39:49): And I David Friedberg (00:39:50): think, by the way, it's really important to state that UBI can be more of a trap than a benefit. It takes away the opportunity for individuals to progress because you no longer have a system that says you progress, you get richly rewarded. It ultimately drives to an outcome where you spend all the money and distribute it equally, so everyone ends up having some sort of stasis. And I don't think that's really human nature. I do think that systems and government programs that support people's ability to succeed, to work hard, to work smart, to progress while providing these necessary safety nets is a better solution. There's no right or wrong way. It's just a very complicated system that's needed. Yeah. Speaker 3 (00:40:31): This is I David Friedberg (00:40:31): Don't think that there's, like, this UBI concept. It's fairly naive. And I think that you'll see it play out at both a micro and a macro scale as being, I think, net negative. So yeah. Jason Calacanis (00:40:41): I, you know, just wrapping up here so we can get on to the rest of the very juicy docket we have today. It does seem demotivating to just have money dropping on your head. That's why I like my experiment. I was referring to Friedberg of just forcing people, not like having these programs that you have to go find out about and have the social capital and fabric around you, that you know about small business loans, etcetera. But, hey, these three things are happening to you right now. This money's been put into your account automatically, and you can decide what to do with it and just raising the education level and empowering people is a much better idea. David Friedberg (00:41:14): I feel like whatever the education system is, schools or whatever, like, actually teaching the vocational skills or the skills on how to succeed in the workplace. Like, here's how you go get a job. Here's how you build a business. Here's how you start something. Those are the sorts of skills that are not taught in the educational system that I think are generally lacking, and then people kind of learn a bunch of history or some algebra or whatever they learn in school, and they pop out the other end. And it's like, okay. Go figure out how to survive. Go figure out how to get a job. Go figure out how to build a business. Jason Calacanis (00:41:43): To just build on your idea, if we need more health care workers, if you paid somebody $1,000 a month, and you paid for their school for one year to become a nurse doctor or nurse practitioner or whatever, that would actually have a dramatic impact that solves a problem for our society while not giving a handout. Speaker 3 (00:41:58): I Jason Calacanis (00:41:58): think we all agree on this one. Let's keep moving through this amazingly juicy docket. Alright. There is a battle right now for Speaker 3 (00:42:05): Rupert Murdoch's media empire. The Times reported on a behind-the-scenes fight for control of Fox News, Jason Calacanis (00:42:05): Wall Street Journal, New York Post, and just tons of TV networks in Australia and the UK. I think we all know the new score of holding set, Speaker 3 (00:42:20): bit like the TV show Jason Calacanis (00:42:20): Succession, which makes sense because they based it on the Murdoch family. It turns out this article in The Times is based on a sealed court document that was obtained by them. Murdoch, to remind you, is ninety-three years old now, and his trust would have given control to his four eldest children. However, he changed the trust to ensure that Lachlan Murdoch, who is more conservative, would take over these assets as opposed to James, Elisabeth, and Prudence who are more Speaker 3 (00:42:49): moderate Jason Calacanis (00:42:57): than Lachlan, and they are engaged in a massive court case now. That's gonna start Speaker 3 (00:43:02): in September. The trust is irrevocable, but it contains a provision allowing for changes as long as they're made, Jason Calacanis (00:43:02): quote, in good faith and with the purpose of benefiting all members, so Rupert argued that the change is in the best interest of James, Elisabeth, and Prudence as it keeps them formally separate from Fox News without having to worry about its political point of view. Fox News obviously has massive influence and has been a Speaker 3 (00:43:27): bit of a disaster over the last couple of years. They did the largest settlement ever in a, Jason Calacanis (00:43:27): defamation case with Dominion, paid $787 million. You remember Tucker, Hannity, Laura Ingraham, Speaker 3 (00:43:43): all of them privately trashed the people who lied about the Dominion case on Fox News, and that all got shown in text messages, and Jason Calacanis (00:43:43): it was a disaster for them. Sacks, any thoughts on this and how this collection of assets and the GOP have, you know, collaborated over the years? David Sacks (00:44:01): I wouldn't necessarily call it collaboration. I call it a market position. I mean, Fox News has carved out a powerful and profitable market niche by being the No. 1 cable news network that appeals to conservatives. And now if, you know, let's say the more liberal members of the family like James take over, and change the content and the programming to serve their own political views, they're gonna lose viewership. They're gonna lose their audience. It would be a foolish idea just from a business standpoint. So I think that Lachlan is the right choice. I met Lachlan before it, by the way. Nice guy. Look, I think a pretty mainstream conservative type of guy. He's clearly the right guy in the family to run this, and the siblings, I think, could really screw it up. And I'm talking about not just from a content standpoint, I'm talking about from a revenue and profit standpoint if they Speaker 3 (00:44:51): take it in a different direction. I would already say that Fox News has a David Sacks (00:44:51): has a market position problem which is that Rupert is very much a neocon, and neoconservatism is on the way out in the Republican Party in favor of a more populist conservatism that you see with Trump or now his running mate J.D. Vance. Rupert and Fox waged a really strong campaign to keep J.D. Vance off the ticket, obviously lost that battle. Rupert fired Tucker, by far their highest-rated and most profitable host ever, and it was over again, this populism versus neoconservatism direction. So I think that Speaker 3 (00:45:35): Fox already has a problem where they are becoming misaligned with their audience. In regards to what you think of the politics, David Sacks (00:45:35): this is bad for business. It'll be really interesting to see if Lachlan will realign things in a more populist direction, but definitely going in a liberal direction that like James or the other siblings would want to go in, that would be a disaster. Jason Calacanis (00:45:59): Friedberg, Chamath, any thoughts on this, media empire and succession planning. Man, I think probate and Speaker 3 (00:46:04): wills and trusts are of the devil's making. Nothing good comes out of these things. And Chamath Palihapitiya (00:46:15): I don't know. I just think some of these assets should just be left to shareholders. David Friedberg (00:46:21): Just sell Speaker 3 (00:46:22): them to Chamath Palihapitiya (00:46:23): or just sell them and take the money, give it to the kids. Hopefully, you raise good kids. They can all go and pursue their own path. Because, again, I think the point is, like, the path and the journey is the fun, and these kinds of battles are really brutal. And I'll tell you, to me, the thing that I'm I'm I'm sad when I hear this whole thing, is like you have four siblings that I'm guessing grew up together. Yeah. And now are they ever gonna talk to each other again, or is it like three versus one or two versus two? Or and I just think that that's ugly over what power and money I would have just if I was the father, I would have sold the asset given the money to the kids or to charity or whatever, and hopefully they would have found happiness in a different way. David Friedberg (00:47:10): But that is what they did with the Disney deal. They took the cash and they distributed it to the kids. So they each got a pretty big windfall. And then, you know, I think the concept was this remaining asset would be managed over the long term. Maybe I'm speaking out of school a bit, but I thought that's what happened there. Chamath Palihapitiya (00:47:24): They'd be, Speaker 3 (00:47:24): you know Jason Calacanis (00:47:25): Fox, the studio, and yeah. That brings. David Friedberg (00:47:29): Yeah. In the Jason Calacanis (00:47:29): library. And that brings X-Men, Fantastic Four, Wolverine back together with the Avengers, which is most important. David Friedberg (00:47:36): $27. They didn't. Speaker 3 (00:47:39): No. It's all coming back together now. Jason Calacanis (00:47:41): Now they just gotta get Sony to give a I mean, we wanna talk about interesting IP. Speaker 3 (00:47:44): Marvel just sold these characters Jason Calacanis (00:47:46): to the highest bidder in perpetuity. Such a crazy weird deal, but Chamath Palihapitiya (00:47:51): it's like it's like me saying, you know, I, I've collected some really nice belts, and so I'm just gonna have, like, a death match between my Speaker 3 (00:47:59): five kids to see who gets the best belt. Jason Calacanis (00:48:01): I, just I mean and it's not it's it's not even about money, actually, because they have enough. It's clearly it's about power. Chamath Palihapitiya (00:48:09): No. And it's about being picked. Imagine if your father loves them. Picks your sibling. Mhmm. And not you. Why why would you why would you do that? Yeah. Like, is there is the asset so important? As I said, there's these are self-managing because business people will make rational business decisions. So put it in the hands of a rational business person. Keep the family intact because if you lose the family, what what do you have? Jason Calacanis (00:48:31): Yeah. Shauna. Chamath Palihapitiya (00:48:32): That's what I don't get. That's what I Jason Calacanis (00:48:33): don't understand. Tom Wambsgans. We might as well just go to our next topic. Joe Biden has been hot swapped as new shit and as predicted. The speedrun primary, maybe that's been subverted, as we all know, Joe, by formally hesitant. Chamath Palihapitiya (00:48:47): What's your version? Maybe it has been subvert. Jason Calacanis (00:48:49): Maybe possibly could have been subverted, inadvertently knocked over, forgotten. It could be an oversight. Anything's possible. Joe Biden formally exited the presidential race on Sunday after donors and party leadership politely asked him to enjoy his retirement. By most insider accounts, Biden was not happy about the decision and felt betrayed. Nonetheless, the public has backed his VP, Kamala Harris, who appears to have already wrapped up the nomination. A survey conducted by AP on Monday suggested that Harris already has the endorsement of enough delegates to secure the nomination in the first round of convention voting. So this won't be official until the DNC that starts August 19 in Chicago. So far, no one has stepped forward as a rival for Harris. And in fact, many of her would-be competitors have already endorsed her. That includes Shapiro, Pennsylvania's governor; Newsom, California's governor; Pritzker, Illinois' governor; and Whitmer, Michigan's governor. All of those, I guess, potential VP candidates. She is now the 90 percent favorite to get the Democratic nomination. I'll stop there and ask Speaker 3 (00:49:59): our panelists what they think of Jason Calacanis (00:50:04): this turn of events. Chamath, do you wanna start as well? Chamath Palihapitiya (00:50:12): I mean, I don't think the process was super open and transparent and democratic, but I don't think they had much of a choice, and I think we've talked about that because too much of the money would have had to essentially been returned. And I don't think you can fight a federal election in 2024 with one hand tied behind your back. So she was the de facto nominee when the rumors started. And now I think the whole point is to figure out where does she stand. I think the thing that she will have to overcome is that these last three years, three and a half years, she's been Jason Calacanis (00:50:53): relatively under the radar. MIA, some might say. And I Chamath Palihapitiya (00:50:56): think that now there's just, like, this whole controversy. I don't know if you guys have seen this where, like, she was named the borders czar, but then she was not the borders czar. And I think there's a there's a mainstream media is it's sort of fighting with itself from six months ago about the whole thing. But the point is that we don't know what she believes, and we don't yet have a sense of her agenda, really. You know? And I think that over these next two months, it'll be up to her to really create a very clear case of what she believes in. And then it'll be really interesting to see who she picks as her VP candidate. And then people, I think, will be in a position to judge. And I think that that's what, you know, what if I've been kind of like reading the tea leaves from the folks that I've talked to is sort of what they say, which is TBD, and we need to figure out where she's at. Jason Calacanis (00:51:43): Friedberg, thoughts on this Speaker 3 (00:51:46): unbelievable ten days in the history of our country Jason Calacanis (00:51:46): where the president was nearly murdered by an assassin. And Joe Biden resigns and a thirty-nine-year-old political neophyte venture capitalist is picked as VP. I mean, this is consequential. What are your thoughts on these ten days? Well, that's David Friedberg (00:52:14): a lot of stuff. I think we talked about that last week, but the Kamala Harris de facto nomination that took place over 48 hours, I think was a little bit shocking to a lot of people I've spoken with that there wasn't a bit more of a process to identify a nominee besides Kamala, that effectively the party lined up. Now, what I think is relevant here is that for the first time, it's exposing people to the way the electoral process actually works in the United States, that it's not a direct democracy where every individual in this country votes for their federally elected people. Remember, the United States was set up as a federated republic, that there was meant to be these states, the state were in a federation, and then the states would elect electors that would go and figure out who should be the president, who should run the federal office and the states would elect their representatives, their congresspeople, to go represent them in the federal government. And so I think a lot of people, you know, whether it's just without thinking about it or based on precedent, assume I get a vote and who gets to be president. What you get to have is a vote and who gets to be the delegate to represent your state in picking the president. And so this process where delegates very quickly fell behind Kamala Harris because of the significant coalescing of power and influence within the parties, Speaker 3 (00:53:40): the two major parties in the David Friedberg (00:53:40): United States, has, I think, exposed a lot of people to the lack of a democratic process for federal executive role in this country. And I think that's a little bit shocking to people, but it is the way that it's the way that the situation was set up. Jason Calacanis (00:53:56): And the same thing with the popular vote versus the Electoral College. Right? People keep getting confused by that. David Friedberg (00:54:02): That's right. And in this very unusual condition where a candidate who's earned all of these delegates drops out of the race is shocking and surprising to people that they don't get to go and make a vote again individually, and I think it feels unfair. And I think that a lot of people are feeling that way. I do, however, think that pretty quickly, there's a lot of people who are anyone but from that are gonna rally behind her, and she seems to be polling well in the polls that have come out in the last couple of days here. Jason Calacanis (00:54:29): Alright. Let me hand it over to Sacks then. You had a Speaker 3 (00:54:31): situation where Trump was the runaway favorite and this unbelievable unity at the RNC. And immediately after the RNC, the Democratic Party Jason Calacanis (00:54:47): hot swaps Biden for Kamala, and they've got a lot of great Speaker 3 (00:54:51): VP picks that they can choose from. Mark Kelly looking like a possibility, which would obviously give them a lot of support in Arizona Jason Calacanis (00:54:51): and with moderates and law and order folks. So Sacks, we're looking at, essentially a dead heat. Some polls have been tied. Speaker 3 (00:55:08): Some polls, Reuters/Ipsos has Harris with a 2% lead. Jason Calacanis (00:55:08): CNN has Trump with a 3% lead. What's your take on forget about how we got here. You know, how does this affect the race itself? This is a dead heat now. What are your thoughts on the race going forward? Who's the VP pick that you're most worried about, going up against the Republicans? David Sacks (00:55:32): Well, look, this clearly reshuffles the race to some degree. I don't think it's a dead heat. The polling shows that Trump is still ahead in most of the swing states, but look, Harris has more upside than Biden does because she can actually campaign. I mean, Biden clearly was a sure-fire loser. And that was exposed in the presidential debate, and that's why there was a total panic in the Democratic Party. After that debate, they're like, we gotta get someone new and they drove him out. I do wanna just say a word about that process. Speaker 3 (00:56:01): You David Sacks (00:56:01): know, throughout that process, remember, it started with Biden doing that Stephanopoulos interview. He said that even God Almighty won't get me out of this race. Then he said, nobody's pushing me out. I'm not going anywhere. I'm campaigning next week. He expressed that what was happening in the party was a revolt against him. Speaker 3 (00:56:15): And then boom, all of a sudden, he's out. And, you know, all we really David Sacks (00:56:16): know from the public reporting is that Nancy Pelosi said, You know, Joe, we can do this the easy way or the hard way. And he was out, again, less than 24 hours after he said, I'm in and I'm campaigning next week. And even his surrogates on the Sunday morning shows were saying that he's definitely in the race. The White House staff didn't know his campaign staff didn't know. It kinda came out of the blue. It's a very strange process, and it happened via him just posting a photograph of a letter that was on personal stationery, not even like an official White House memorandum. And we didn't get an update. We didn't hear directly from the president about one of the most consequential decisions of his life and of his presidency. Until Wednesday. Jason Calacanis (00:57:07): Well, he did have COVID. So that, you know, for an 80-year-old, it's pretty hard. Yeah. David Sacks (00:57:10): Fair enough. That was the story, but still, I mean, for us to be left in the dark wondering what's really going on for three days, it was very strange. It certainly was not what you would call a democratic process. There was no speedrun primary as you wanted, Jason. There was no open convention. What happened is the delegates fell in line instantly. As I predicted, because I said that they would not be able to handle the chaos, that they wanted to basically fall in line immediately and end the chaos. And they fell in line behind Kamala Harris, who has never gotten even one primary vote. Jason Calacanis (00:57:41): Who are you most scared of as a VP candidate? Give us that. Because we understand then. David Sacks (00:57:45): I'll be honest with you. Speaker 3 (00:57:46): I think David Friedberg (00:57:46): Who's the scariest? David Sacks (00:57:47): The scariest, the one I would pick is Josh Shapiro. He's the governor of Pennsylvania, rising star. Look, if he can deliver Pennsylvania for the Democrats, that's powerful because one way for Speaker 3 (00:58:01): Harris to eke out a victory is if Shapiro can get her Pennsylvania. And then if she sort of tacks back to appealing David Sacks (00:58:01): to the Arab Muslim vote in Michigan, Speaker 3 (00:58:16): to David Sacks (00:58:16): eke out Michigan and then eke out Wisconsin with just one point. In other words, if she can hold on to the blue wall, and then she loses the swing states that Trump is very much ahead in, like Arizona, Nevada, Georgia, North Carolina, she can still win this election by 270 electoral votes to 268. It'd be the closest margin in presidential history. So that's a scenario and is probably her best path to victory is to win by one electoral vote. That's the scenario I'd be most worried about as a Republican. Now the other candidate you hear a lot about is Mark Kelly, the senator from Arizona, who on paper, looks fantastic. He's an astronaut. His wife was a victim of a gunshot. Jason Calacanis (00:58:59): Moderate. Right? Super moderate. David Sacks (00:59:01): I personally don't think he is that moderate, but I think he presents as one. And he's made noises. He comes across as tough and comes across as someone who's wanted to be tougher on the border, which is a huge weakness for Harris. Yeah. If he can deliver Arizona, then he becomes a strong contender, but I'm not sure that he can. So if it were me, I'd probably go with Shapiro. I mean, hope they're not Jason Calacanis (00:59:27): listening to me. Speaker 3 (00:59:28): I hope David Sacks (00:59:28): they go with Kelly. Jason Calacanis (00:59:29): Chamath, obviously, even in this heated thing, the good news is that both sides are gonna accept the election results. We have that fairness and that honorability in both parties where they'll accept even a close election. We know drama after it. But what's your thought on the strongest ticket? Do you think Shapiro, do you think Kelly, CNN, said, hey. And this went viral, Do we think a Jewish vice president, the country's ready for it? They got kinda dragged for that. What do you what do you think is the right VP pick here, Chamath? What do you think the right VP pick here is? And which one is the scariest? To a Trump JD Vance ticket, which is a very strong ticket in and of itself. Chamath Palihapitiya (01:00:12): So if you look at Trump's VP Jason Calacanis (01:00:12): pick, it's about aligning a Chamath Palihapitiya (01:00:19): philosophy. Donald Trump created the MAGA movement, this populist conservative right-wing movement. Speaker 3 (01:00:25): And I think JD Vance has an opportunity now to carry that torch post-Donald Trump. Chamath Palihapitiya (01:00:36): And that is an ideology that spans states. I think this idea that you pick somebody because they can deliver a state is pretty misguided. I just don't think that that in reality is what happens. So I think that Kamala has to decide what she stands for and figure out whether she needs somebody on her flank that represents a slightly different set of ideas that will then maximize her appeal, or she wants to double down. And then she has to pick somebody that sort of, like, aligns with her philosophically. And, again, I would just say that it's not super clear yet what she thinks. I think that Joe Biden was more of a traditional centrist that had to appeal to the progressive left in order to get his work done. So that kind of makes sense. You can understand it. You don't have to agree with it, but it's pretty obvious. I don't know where she's at politically. So I think that that's the first thing. She needs to explain herself. Is she a centrist? Is she more of a moderate Democrat? Is she more of a progressive democrat? And then we can then understand who the best person to align her with should be. But if I was if I if I was in the democratic kind of like Jason Calacanis (01:01:55): star chamber, Chamath Palihapitiya (01:01:56): Yeah, I would kind of try to figure that out because I think the Donald Trump pick makes a lot of sense because it basically moves the Republican Party in a very firm direction. That die is cast for the Republicans for many years to come now. Jason Calacanis (01:02:08): Okay. Friedberg, your thoughts, who is the VP candidate? What do you think of this race and give us a prediction. You know, you're famous for your incredible insights and predictions. In politics, give us your prediction in River. Who should she pick? Speaker 3 (01:02:23): Who will she pick? Come on. David Friedberg (01:02:25): I think there's a lot of talk about Roy Cooper in North Carolina. Sacks didn't mention Cooper, but it sounds like he could be in the running and could be a leading contender for the slot. I think the Harris-Trump poll is not out, or there's a recent one that shows Harris. Yeah. 44-48 Trump in the lead in North Carolina. So there's some room there. If you can get the governor in that spot, that's a lot of electoral votes. In terms of who I think should be, I'm not sure. But I do think that might be a top contender from folks I've talked to. Jason Calacanis (01:03:08): Any votes on Shapiro and CNN's positioning that the country is not ready for a Jewish vice president? David Friedberg (01:03:16): So, you know, I was shocked recently to hear about a board, a pretty, you know, important board because it represents a large organization, and there was an individual on the board who was supposed to be elected chairman. They went in for the vote. And in that board meeting, this individual who happens to be Jewish, there was a conversation that ensued about you can't be the chairman at this time because having a Jewish chair would be really difficult in this current climate. And I was shocked to hear this. It, you know, it was not expected by folks going into the meeting. Things were supposed to be quite different in the vote. And, ultimately, the decision was made that a Jewish person should not be the chair of the board at this time. Jake, out to your question, I think that behind closed doors, these are the sorts of conversations that are going on, that there's a perception given the Gaza conflict that there is a risk of having Jewish leadership being put into powerful positions right now. Jewish leaders being put into powerful positions. Wow. Jason Calacanis (01:04:14): That is shocking. David Sacks (01:04:15): That's insane. Jason Calacanis (01:04:16): It's a range. David Sacks (01:04:17): It's Speaker 3 (01:04:17): just this is this is what is going what? Jason Calacanis (01:04:21): This is just Yeah. It's shocking and deranged. And the anti-Semitism right now on social media and what we're seeing online is just absolutely heartbreaking and infuriating in equal parts. Sacks, anyone to add to this as we wrap up our Chamath Palihapitiya (01:04:37): what the Jason Calacanis (01:04:40): well, I mean, just talk about Shapiro, Sacks. Is the country ready for this? You saw the CNN clip and, you know, sort of So can I just ask can Chamath Palihapitiya (01:04:48): I just ask I'm sorry? Yeah. Jason Calacanis (01:04:50): Go ahead. Chamath Palihapitiya (01:04:50): What what what does it solve? Speaker 3 (01:04:53): What does it accomplish? Jason Calacanis (01:04:55): Less heat coming into that board. Less protests. Less. Less protests. The protesters now have, I guess, what I would read into this, correct me if I'm wrong here, Friedberg, is the protesters have now won in that they've intimidated people to an extent that they don't want to go near Jewish leadership. Am I interpreting correctly? A possibility here. Sorry. Say that again. The protest was what? So these protests, the Gaza conflict, have reached a point where people do not want to have Jewish leadership because it would be polarizing and create more protests. That's right. Speaker 3 (01:05:36): That's the David Friedberg (01:05:36): and that's the conversation that I hear going on behind closed doors or I'm hearing about. And so you know, it's almost like a cancel culture against Jews because of the risk of a Jewish person being in a leadership position that could drive. Jason Calacanis (01:05:51): Yeah. Which is exactly what CNN was bringing up with the VP choice of Shapiro. David Sacks (01:05:55): And that's right. I think it's totally crazy. However, I definitely have seen people online. I mean, articles online, like saying, like, is this an issue with putting Shapiro on the ticket? Now I can't believe this is a problem for the voters of the country. However, I think if you're one of the Democratic masterminds and you're trying to engineer enough electoral votes for Harris to win, like I said, you're trying to win that blue wall. You're trying to get not to Pennsylvania, but Michigan. And the problem that Biden had, and now Harris has in Michigan, is that the large Arab and Muslim population of Michigan is really against the administration's support of Israel. Now this is why Harris just snubbed Netanyahu when he came to Washington. So they are immediately trying to reposition that issue. And remember, the margin of error in Michigan is like 2 percent. So if they can win back that vote, by seeming to be more progressive on the whole Israel-Gaza war, then there's a big electoral advantage for them. So I have to wonder if this is where this talk about, you know, is it an issue for Shapiro to be Jewish on the ticket or whatever? Again, it's nuts to me that we could be even having that conversation in this country, but it's possible that that is what's going on. It's like, can you win Pennsylvania but not lose Michigan? David Friedberg (01:07:20): Well, the inevitable outcome of identity politics by giving everyone a definition on their race or their gender or their background or their religion is that you ultimately end up picking winners and losers and you don't just get to pick winners. When you make selections or prioritize things based on identity like this, you also de facto pick losers, and that's where just unfortunate snowball. David Sacks (01:07:46): When John F. Kennedy ran for president, it was a big issue that he was Catholic. I mean, you guys don't remember this, but I do. Jason Calacanis (01:07:51): Yeah. I David Sacks (01:07:52): received it. Speaker 3 (01:07:53): It's a Jason Calacanis (01:07:53): major thing in our family. Speaker 3 (01:07:55): There was a Jason Calacanis (01:07:55): major point of pride we had an Irish Catholic in the White House. Yeah. David Sacks (01:07:58): Yeah. And specifically, what people asked is would he be loyal to the United States or would he be loyal to the Vatican? And the pope, you know, who was his ultimate authority? And he made it really clear. Look. I'm gonna do what's right for the United States and he neutralized that issue. I think that what matters about Shapiro or Speaker 3 (01:08:14): any VP is their views and their accomplishments, their policies. And whether he is Jewish or not really is secondary, even if David Sacks (01:08:23): even if your principal concern is Gaza, Speaker 3 (01:08:25): there are still plenty of Jews who have a wide spectrum of views on that issue. So it is nuts to me David Sacks (01:08:25): that this conversation is seriously happening. Right. Jason Calacanis (01:08:37): There has been a kerfuffle, a Donnybrook online between Paul Graham and our bestie, David Sacks here. Here, Paul Graham, threatening you, Sacks, on X, do you really want the full story of what you did to Parker being told publicly? Because it's the worst case of an investor maltreating a founder that I've ever heard, and I've heard practically all of them. This program, the founder of Y Combinator, I was talking recently to another investor about whether you are the most evil person in Silicon Valley for Antonio David Sacks. Speaker 3 (01:09:09): He thought about it for a few seconds and agreed, and he couldn't think of anyone worse. The second tweet about you being the most evil person, David Sacks, Jason Calacanis (01:09:19): in Silicon Valley has been deleted. David Sacks (01:09:22): Well, that's nice to Jason Calacanis (01:09:23): know. Response. It's nice to know. Yes. David Sacks (01:09:24): That's nice to know. There was also another unhinged tirade that he had against me a few months ago Speaker 3 (01:09:29): Okay. David Sacks (01:09:30): Where he was commenting in the Ukraine debate and was responding to a Ukrainian partisan who this guy is like a propagandist for Ukraine. It was embedded in the Azov Battalion. People may know what that is. Anyway, Paul went out of his way. The thing is I've never met Paul Graham. I don't know him. I've never I've never done business with him. So it's just weird to me that he has this animus and this vitriol towards me. It's hard to know exactly what this is based on. I think that part of it is that he thinks he knows what happened at benefits, even though he wasn't involved at all. And he's just listening to one guy who's been nursing this vendetta for many years. And then other people are speculating that there could be other things involved. I don't quite know. Chamath Palihapitiya (01:10:19): Do you want to set the record straight on benefits and just say what happened? David Sacks (01:10:22): What is it that you guys want to know? David Friedberg (01:10:24): Parker apparently has done several public interviews where he kind of made claims. I think I don't know if I've listened to him. I've just read the summaries, but, Jake, you probably know it Jason Calacanis (01:10:33): just says you ran a coup on him. Obviously, for folks who don't know, there was an SEC investigation and Speaker 3 (01:10:37): Parker was ousted from benefits as the founder and CEO. Jason Calacanis (01:10:37): He's very bitter about that. Did a revenge startup, Rippling, which is doing quite well from what I understand. And, he blamed Sacks for all of this, even though Speaker 3 (01:10:50): he was sanctioned for doing Jason Calacanis (01:10:50): essentially insurance fraud by helping people lie on a test for their insurance certifications. And he got sanctioned by the SEC for it. And as you pointed out, Sacks, he was the only person who was sanctioned for that. So he broke some rules and he got a pretty, pretty serious penalty. Yeah? Speaker 3 (01:11:17): Or do I have that basically? Yeah. I mean, that whole experience was easily the worst year of my entire David Sacks (01:11:25): professional career, having to deal with that mess that he created. And, look, anybody can now say anything almost 10 years later in a podcast, but the situation there was thoroughly investigated by regulators who had subpoena powers, who did extensive discovery. They looked at Speaker 3 (01:11:42): everyone's emails throughout the whole company. They also interviewed something like a dozen people David Sacks (01:11:42): under oath and took witness testimony from them. And then they sanctioned him, they fined him, and they published an account of what happened. I personally think it's a huge waste of time to be rehashing events that are almost a decade old, but I guess I'm being forced to by this campaign that he and Paul Graham have engineered against me. If you want to know what happened, just read what the SEC said, read what the other regulators said. There was only one person who was named as being aware of the misconduct, and there was only one person who was fined and held accountable by regulators. In fact, he was fined more than the company. Now if he just said, yeah, look, I learned from that mistake. And I'm, you know, I made some mistakes, moved on and apparently doesn't have a successful company. So I don't really understand why he's so bitter. He seems to have, like, a, you know, he's, like, disturbed about it. Then it would be fine. I mean, there'd be no reason to be talking about this, but the guy refuses to admit that he did anything wrong. And instead, he's created this elaborate story that his departure from Zenefits wasn't related to massive compliance issues. And that somehow it was related to him missing a sales target or being the victim of a coup. That's not what happened. This was a regulatory crisis that unfolded over many months and kept getting worse and worse, and we kept discovering new compliance violations, and this created a 50-state insurance investigation that could have shut the company down. Yeah. And he controlled the board. He didn't have to leave if he didn't want to. He ultimately perceived that it was in his interest to leave and let us clean it up. And then he went on to go do this other startup, which I think he was planning to do all along. So his plan worked out for him, which is he left a big mess for us to clean up. That's very successful Jason Calacanis (01:13:43): now with the new company. David Sacks (01:13:44): So right. Alright. David Friedberg (01:13:45): Sacks, I remember I will just say I remember how hard you worked at that after you were in the COO seat and then you were promoted to CEO. And I was really impressed watching it and seeing what you did because you chose to step up and take care of this company at a time where you expressed to all of us privately how hard it was and what a challenge this company had found itself in. And you had investors that were friends of yours that were involved in the company that were on the board. And I think you did what felt like at the time and from my experience interacting with you during the time, the right thing, which was to step up and address this rather than just throw your hands in the air and say, this guy screwed things up or this company screwed up and walk away from it. You had personally put money in. Your friends had put money in, and you worked hard to try and help the business recover after this miserable period of time, and it was really impressive to watch you do that work. So I just wanna highlight my kind of experience watching you and knowing you at the time. David Sacks (01:14:37): It was it was miserable and obviously pretty thankless, and I did it for no compensation. I did it because like you said, I had a lot of friends who invested in the company. I just thought it was the right thing to do to do this cleanup. The lawyer said it would take two years. We managed to get it done in one year. We got a clean bill of health and regulators. We had to remediate all the compliance failures. And when I then handed the torch to the new CEO, we had $200 million in the bank and $60 million of ARR with a clean bill of health. So, you know, but I didn't know I'd have this, like, crazy founder, like, lobbying bombs at me the whole time. And, frankly, if I'd known he was gonna do this, I would have just said, listen, man, you clean up your mess, and he would have continued playing games and stonewalling the regulators. And it would have been a much worse situation for sure. Jason Calacanis (01:15:22): Chamath, you wanna add anything here? Before we wrap up on this because I have two points to make, but I'll let you go first. Chamath Palihapitiya (01:15:28): Look. I think that part of what happens in Silicon Valley is that there's these cliques, and there's definitely a YC clique. And they protect their own in absolute terms. And so I think there's a level of morality that everybody else has to live by that's not necessarily the rules that apply if you're a YC CEO. Now that was accepted in Silicon Valley because in the early days, they were frankly one of a very, very small handful of games in town with respect to high-quality deal flow when you started to do Series A, B, and C. And as a result of that, I think venture capitalists essentially looked the other way because the returns were so good. The companies that were coming out of the incubator were so good. But as with all things, when you're successful and you try to scale, returns decay, and this is not a slight on YC's returns, but it's what happens to everybody. So if you look at Blackstone's returns, they were incredible when they started. Then they're okay today. When you look at Sequoia's returns, they were incredible when they started. They're okay today. YC's returns were incredible when they started. They're okay today. And this is nothing against any of these folks. It's that in the business of building an organization and scaling, that's what happens. And when that happens and a lot more competition emerges on the scene, the old tactics that you used to use to run a protection racket, if you will, just don't work anymore. And I think part of what's spilling out in public here is that that kind of immature form of bullying and intimidation is just kind of dumb because it just doesn't hang together anymore. So I don't know. I thought the whole melee, if you will, ruckus, Jason, fracas. Fracas. Jason Calacanis (01:17:25): Speaker 3 (01:17:26): Brouhaha. All a clash. Chamath Palihapitiya (01:17:30): Yeah. Was more about a guy that was engaged in this, trying to do what he perceived to be the right thing for a YC founder in his community, but probably just needs to get back to work and do something productive, and probably this wouldn't happen the next time. Jason Calacanis (01:17:47): I'll just make two points here. Y Combinator has always, like much of our industry—they're not unique in this—been in favor of rule benders, breakers, and naughtiness, actually something in their interview process that they optimize for. Sam Altman has talked about this very publicly. I had a YC alum who was trying to get funding from me hack my voicemail and change my outgoing voicemail. And that was like a big brouhaha, Hacker News, etc. And, you know, we kind of celebrate a little bit of bending and breaking of rules. And what everybody needs to understand is sometimes if you bend or break a rule like insurance certification like Parker did here, you know, that that can be fatal for a company, which it was, and it can be, you know, really, really dangerous. And so many superimposed on top of this, to your point, Chamath, Y Combinator, very big, powerful organization. Some folks say a mafia, and they described it as a bully stack. You know, Y Combinator does circle the wagons. They do bully people. And they do put out a presentation that we are the only people in Silicon Valley who are founder-friendly, you know, even though they're getting 7% for $125K like we do in our accelerator tech startups, while also saying everybody else is the enemy. Everybody else is taking advantage of founders. The truth is we're all working really hard. Every founder, you know, is going to hack their way to success. Sometimes you take it too far, like Parker did here. He learned a lot of lessons. Like some people say Uber did, like some people say Airbnb did. There's always been rule-breaking and bending in the entrepreneurial class. And then you superimpose on it, programs feelings, you know, in the Middle East, Sacks, your strong feelings about Ukraine and politics. And now the footprint of Silicon Valley is just so powerful, so influential on the global stage when it comes to politics. It just reaches a level of toxicity here that it doesn't need to. Jason Calacanis (01:19:44): We're all on the same team. Let's all build great companies. Let's put this ugliness behind us and get back to work. That's my final statement. No Shrikanis has spoken. David Sacks (01:19:52): I like that statement, and if we were just talking about somebody who had learned their lesson, this wouldn't even be an issue. This is like events that happened a decade ago, such a waste of our time and energy even to be talking about. The problem is that you have people, really, we're talking about Parker and Paul Graham, who are trying to smear somebody as a way to you. Yeah. Jason Calacanis (01:20:13): They're trying to damage your business. Let's be honest. They're trying to get founders to not work with you. David Sacks (01:20:18): For sure they're doing that. Jason Calacanis (01:20:19): And that's bull by the way. David Sacks (01:20:21): Look, Parker has a very complicated story. And the whole purpose of it is to exonerate himself to basically say that he didn't engage in any wrongdoing and somehow he was set up. Okay? It's ridiculous. I mean, I don't have that kind of power over the SEC. The SEC, they sent us a list of people they wanted to talk to. I was not on the list. And I was like, well, wait, don't they want to talk to me? I'm the new CEO of the company. And the lawyer said, no, your discovery was clean as a whistle. They don't have any questions for you. They only want to talk to people who, you know, they saw in the discovery. There was an issue. So the regulators prosecuted. They basically conducted this investigation. I had no impact over that. It was a very serious issue. This was not made up. So I just think it kind of defies belief to now say that this, you know, all the regulatory compliance issues, which played out over months, were not a central issue for the company. It certainly was. But, look, we have better things to talk about. Did you see Ali Resnick's tweet? Jason Calacanis (01:21:15): This is pretty dark. Ali Resnick tweeting here. Paul Graham reached out to the key SV firms, Silicon Valley firms, to attempt to get Jewish VCs fired post-October 7. No idea if that's true or not, but there has been this Paul Graham is anti-Semitic, you know, sort of, meme going around. I don't think he's anti-Semitic, but this is a pretty bold charge here, Speaker 3 (01:21:45): and Jason Calacanis (01:21:45): I don't know if it's true or not. David Sacks (01:21:47): Well, I can speak to some of it. Jason Calacanis (01:21:48): Okay. Go ahead. Yeah. David Sacks (01:21:49): I've talked to a few people who are involved in this. Look, I think what happened is that in the wake of October 7, there was obviously a very heated debate online. PG is on one side of that. He got into it with supporters of Israel on the other side. They accused him of saying anti-Semitic things. He took offense to that and basically went over their heads to their bosses of a couple of different VC firms, at least two that I know of, where he basically went to the heads of these firms to express his displeasure, I guess, with these exchanges. And I think the feeling on the part of the junior VCs to the people he was going over the heads of were not senior partners, whatever. These were lower-level to mid-level VCs at firms. You can understand how they would receive that. The head of YC Jason Calacanis (01:22:38): is going over. A giant. Yeah. David Sacks (01:22:40): Yeah. So he's basically going to the heads of their firm to seek a correction in their behavior, even though this wasn't like a workplace activity. And so they certainly felt intimidated and silenced by that. Jason Calacanis (01:22:55): Or, in the worst case, that he was trying to get them fired. In his case, I guess he's trying to, you know, say, hey, this isn't cool to call me an anti-Semite on Twitter publicly. And the truth may be somewhere in between. I mean, the great irony of this, of course, is he's concerned about his reputation being damaged. And I know YC took it very seriously. The claims that they're anti-Semitic and Paul Graham's anti-Semitic. They took that very seriously as they should. But here he is out there trying to damage your reputation. So it's a little bit of hypocrisy here. I think if he's outwardly trying to destroy your reputation with founders, and then he's concerned about his reputation. David Sacks (01:23:34): Well, clearly, there's a double standard here. Because PG doesn't like being called names on Twitter. Speaker 3 (01:23:39): Yeah. He doesn't like his use being labeled, and he's willing to take those debates offline. Go over the heads. Not talk to the people who said those things, David Sacks (01:23:40): but then go to their bosses, their heads of their firm. Yeah. Maybe not threaten them, maybe not say, yeah, I don't think he said fire this person, whatever, but like you said, there's always an implication of retaliation because people understand the way that YC operates. And certainly those junior-level VCs experienced it as a form of intimidation. I mean, this is the classic cancellation playbook, right, and this is what Jason Calacanis (01:24:14): people will do to the left or the right, or they'll do it to advertisers. They'll try to get advertisers to cancel. It feels similar to that cancel culture, even if that's not how PG intended it. David Sacks (01:24:24): Well, it's also, it's like rather hypocritical when he's super sensitive about this type of thing, but then he's instigating this pylon when on this whole benefits thing, he's basically single Speaker 3 (01:24:34): source from a disgruntled founder who has this vendetta who's been nursing this thing for years. David Sacks (01:24:34): He's never talked to me. Like I said, he's never even met me, but he's willing to call me the most evil person in all of Silicon Valley. And then, again, instigate this pile on with, like, all these other people from YC. Jason Calacanis (01:24:53): Yeah. I mean, how dare him call you the most evil person. That's my job here on the podcast. David Sacks (01:24:58): Yeah. Exactly. And then I saw, like, other people from YC, like, Michael Seibel, I think is actually a really cool guy. Jason Calacanis (01:25:04): Oh, he's awesome. Yeah. David Sacks (01:25:05): Yeah. Super supportive of the founders. Okay. And then he's tweeting that, like, I somehow I put up my founders who were there were a lot of founders who basically spoke up. And sure. I actually said, including many founders who came out of YC, so, you know, actually, David's been a great VC to us. And he's saying, oh, Sacks must have put them up to it. No. I never asked anybody to do that. And a good reason why is I don't wanna trouble my founders. Jason Calacanis (01:25:27): Oh, dragging into this. Yeah. David Sacks (01:25:28): Dragging into it. So I'm not gonna make them do that. So I had nothing to do with that. But frankly, you know, old saying that every accusation is a confession. Maybe the reason why people at YC think that I might have done that is because that's kind of their playbook is they create these online mobs. But, like, what gives them the right to do that? Chamath Palihapitiya (01:25:46): I can tell you. Speaker 3 (01:25:48): Go for it. Chamath Palihapitiya (01:25:49): He doesn't have enough to do. He's sitting around. He's got a lot of money. I mean, he's been very successful. And as far as I can tell, he's just getting into dust-ups on Twitter. And then like I said, there's a lot of amazing people. We all know them that are so good when they're under pressure, focused and grinding. And then when you take a little bit of the pressure off, they just go crazy. And they don't have enough to do, and it's amplified by money, and it's amplified by their own perceptions of themselves. So I don't know. Maybe maybe you should just go back to work. Jason Calacanis (01:26:21): So everybody back to work. When these things get heated, here's an interesting idea for everybody. Go get a cup of coffee with the person you disagree with. Sit down like we do here at the All-In Podcast. And have a vibrant debate. It makes life richer. It makes you smarter. It gives you more perspective. And so PG, Sacks, anybody else involved. You know, just all sit down. Have a cup of coffee. Try to hash this out. Hey. Good coffee in San Francisco. That's my Rx. Friedberg, I've been talking to Sacks privately. He has been complaining to me for weeks that we've had too much politics on the program and not enough Science Corner. So I acquiesce to Sacks's appeals to me and all of his supporters to get a Science Corner in today. Let's talk about nuclear power. Everybody's got nuclear power on their mind. Obviously, China's doing a really good job of executing on it, and there's some new science here. So fill us in. Sacks looks so engaged. Let's go. David Friedberg (01:27:18): Well, Sacks might like it because it's a bit of an economic story and a bit of a China competitiveness story, which I think is the main point here. The story is rooted in a paper that was published out of China on their new high-temperature gas-cooled pebble-bed reactor, which is a new type of nuclear reactor technology that shows that this thing cannot melt down, which is an amazing new technology. But I want to just take a step back and talk about general electricity production in the U.S. versus China and where it's headed. So today, the U.S. has roughly 1 terawatt of total electricity production capacity. China today has about 3 terawatts of total electricity production capacity, and about, you know, 2 to 3% of that is nuclear today for China. So by 2050, the U.S. is projected to build out an additional terawatt to get us to 2 terawatts of capacity. So we're going to double our total electricity output by 2050. China, meanwhile, has a plan stated to increase electricity production to 8.7 terawatts, so basically tripling between now and 2050. Eighty-eight percent of their power by 2050 will be renewables, and by 2060, they've stated this goal that they want about 18% of their overall power to come from nuclear reactors. They currently have 26 nuclear reactors in the construction phase. They've got planning going on around building 300 of these. And they've already got stated plans around 500 gigawatts of capacity. Just to give you a sense of that, 500 gigawatts, which is what China's got plans for, is half of the total U.S. electricity production today. That's in their nuclear buildout. Today, just to give you a sense of the relative cost of electricity, China's about 7 to 9 cents a kilowatt-hour. The U.S. is 17 to 25 cents a And China is projected to drop their price to less than 6 cents due to the expansion of renewables and nuclear power in the country. So the U.S. cost is about triple what it is in China to build out new electricity capacity. That's a really important point. So currently, we have about a third of what China has. China is gonna triple. David Friedberg (01:29:26): We're gonna double by 2050. Their cost is already lower than ours, and it's gonna get lower. And their cost to build out new electricity is a fraction of what it is in the U.S. So this is a massive difference. The International Energy Agency estimates that the electricity from nuclear power costs 65 bucks per megawatt-hour in China compared to 105 in the U.S. and 140 in the EU. And recent data has U.S. costs looking like they might be anywhere from five to up to 10 times what it costs to build out in China. So this is a real important long-term competitive point, China has more electricity production. It's cheaper to make electricity, and it's cheaper to build new capacity, and they're building at an accelerated rate. And this really highlights the industrial challenge the United States is gonna have in the decades ahead. We talk a lot about wanting to onshore manufacturing in the U.S., build out new manufacturing technologies, but ultimately, all of these industries, particularly AI, are gonna be driven by the cost of power. So, Nick, if you pull up this chart, so what's going on in nuclear, well, there's effectively considered to be four generations of nuclear reactors. The first generation was all the early prototypes, and I've got an image up here to show, to show this comes from the Department of Energy. The second generation, which was the first kind of commercial power reactor, started to get built out in the 1960s, '70s, '80s, and then these Gen 3 reactors were these lighter weight reactors that were kind of more advanced. Gen 4 is the next generation of nuclear power reactors. And they're next generation because they're meant to be much more safe where they cannot theoretically have a meltdown. You can't have a nuclear meltdown like you had with Fukushima, or with Three Mile Island. Speaker 3 (01:31:08): And to Jason Calacanis (01:31:09): be clear, Fukushima was Generation 2. Those are the boiling water reactors. Yeah. David Friedberg (01:31:13): Yeah. And so these old reactors have this risk where you pump water in to cool down the reactor and to drive the turbine. If the water pumping system fails and you can't get the rods out of the reactor, then the reactor keeps reacting, the uranium keeps having this kind of chain reaction, gets hotter and hotter, and eventually gets so hot it melts all the walls and all the surrounding materials of the reactor. All of the nuclear rods start to evaporate, and all this nuclear material is released into the environment. That's the risk of a meltdown, ultimately. This is not a nuclear bomb, just to be clear. It's just about really high temperatures melting the facility, and then radioactive material escapes the facility. The Gen 4 reactors are designed where that isn't possible. And so, if you go to this next slide, you'll see just kind of an image here. This is the new reactor called the pebble bed reactor. China started this facility. I don't want to butcher the name, but I think I will. It's at the Shidaowan site in Shandong province. It's a 210-megawatt electricity production reactor. They started construction in 2012. They finished and started doing operational tests in December of 2022. They ran all the safety tests in the summer of 2023 where they turned off the cooling and basically simulated that the system failed to see if it would melt down. And that's the results that they just published, which was the test they ran last summer. And even when they turned everything off, the system did not fail, it did not have a meltdown. It maintained its ability to control its temperature and not have a meltdown. And the way it works, as you can see here, is that these little pebbles, they're kind of like billiard ball-sized pebbles, have uranium in their core. These pebbles kind of drop into the center reactor chamber. And when the uranium is close to other uranium, a chain reaction starts to generate heat. That heat is actually, in this reactor concept, captured by helium gas that circulates inside around the reactor. That hot helium gas heats up water, turns a turbine, and generates electricity. David Friedberg (01:33:17): And then these billiard balls fall out the bottom. So what they did is they simulated that the system stopped circulating, that the power went out, and measured what happened. Ultimately, it was able to recover. It didn't melt down. And this is quite different, Nick, if you show an old model of an old nuclear rod system. So here's nuclear rods. They're made of uranium. They go inside these chambers that have other uranium. And when they touch each other, get close to each other, they heat up, and you have water that has to be pumped continuously to keep it cool to maintain a low temperature. What happened in Fukushima and other facilities where we've had meltdowns is that the water stopped pumping, everything kind of evaporated away, and the rods didn't get cooled. If the rods can't get pulled out and the water can't keep pumping, you have a meltdown. When things get so hot, it melts everything around it and collapses. So this Chinese site just demonstrated this pebble bed reactor, which is a Gen 4 reactor, and it has an extraordinary safety profile. There's, you know, basically no condition where the system would have a meltdown. So these Gen 4 reactors are smaller. They're more modular. They're much, much safer. They're more efficient. They have much less waste. You still have to store those used billiards somewhere. So you still have to kind of take them and put them somewhere and keep them underground for 10,000 years. But compared with previous reactors, you know, this plant is designed to be much more efficient, much safer, and they completed the safety test. They published the results on the safety test. And I think it really shows the performance is there. And this was always meant to be future technology, these Gen 4 reactors. China opened up commercial operations with this reactor in December of 2023, so it's running, producing power. It's on the grid. And, you know, this design, funny enough, was first proposed in the 1940s. And it took us nearly 100 years to get it to market, which makes me also point out why I'm so optimistic 100 years from now on fusion technology, which seems crazy today. And this sort of technology seemed crazy at the time, but, you know, 80 years later, we've gotten there. So you know, this was an exciting outcome, but I really do want to highlight the competitiveness with China, lower cost to produce, lower cost to run, much safer, and they're expanding like crazy. Jason Calacanis (01:35:27): And the downstream is they can power more H100. David Friedberg (01:35:31): This is why I asked Donald Trump when he came on the show, and I want to make my passionate plea. This is why investing in and deregulating nuclear reactor technology in the United States to enable a competitive playing field with the United States and China in the decades ahead is so critical because if we don't, China will beat the United States industrially, and we will eventually find ourselves in a greater point of conflict with respect to this rising power that is going to be driven by low-cost, highly abundant power and the United States does not have that. Jason Calacanis (01:36:00): Power equals AI. Chamath Palihapitiya (01:36:01): You don't think that distributed energy can basically deliver effectively energy at a marginal cost of zero? David Friedberg (01:36:10): Yeah. So the solar build that Chamath is in the US forecast where we could get in an optimistic scenario a doubling of power output from 1 terawatt to 2. So that's in the system today in the forecast. But how do we get to 9? That's where China's gonna be at by 2050. And we have to have this ability to more rapidly kind of accelerate, you know, high power output systems like nuclear, because while solar is great, it's a low power output. You need, you know, much more volume. So this is a highly concentrated system, and the cost per megawatt hour, you know, can be significantly competitive if you use these small modular reactors and accelerate from Jason Calacanis (01:36:47): a lot of the China. David Friedberg (01:36:48): So carbon Chamath Palihapitiya (01:36:49): What about carbon-based solutions as a David Friedberg (01:36:52): Difficult to scale. I mean, we're not gonna open up 500 more coal power plants in the next couple Speaker 3 (01:36:57): of years. Chamath Palihapitiya (01:36:57): What about oil and nat gas? David Friedberg (01:36:59): Yeah. So today, nat gas is 44% of US power production capacity, and we are gonna build out and we are building out new nat gas facilities, but that's in the forecast. So all of our forecasts today for the US are mostly nat gas going out and a lot of solar and wind going out to 2050 to double our capacity. It's already a stretch for us to be able to double our capacity. Chamath Palihapitiya (01:37:22): So the only solution is to rewrite the regulation. David Friedberg (01:37:25): We have to get nuclear going in the United States, and these systems are safe. They are scalable. And if the United States embraced this and we took a public policy perspective that this is about competitiveness with China, it's about national security. I'm hopeful that whoever comes in to lead the executive branch in this next administration will be really thoughtful and make this a top priority. So that's my plea and my reason for going through this today. Chamath Palihapitiya (01:37:49): Yeah. I agree with you. Jason Calacanis (01:37:51): Yeah. This has been another amazing episode of the All-In Podcast. What have we what have Chamath Palihapitiya (01:37:57): we learned, Jason? It's important to have a job. Otherwise, everything just goes to the bottom. Jason Calacanis (01:38:01): Yeah. Do not retire. Keep your mind sharp and, shout out to our friend Phil Hellmuth doing really great at the World Series of Poker. Happy birthday. Happy birthday to our guy, Xander. yada. And for the chairman dictator, the Sultan of Science and your Rain Man architect, David Sacks. I am the world's most moderate, moderate. We'll see you next time. Bye bye. We'll let your winners ride. Rain Man, David Sacks. And it Speaker 3 (01:38:34): said we open source it to the fans, and they've just gone crazy. Jason Calacanis (01:38:43): Oh, man. Speaker 3 (01:38:57): We should all just get a room and just have one big huge orgy because they're all just useless. It's like this, like, sexual tension, but they just need to release their Good. Good. Where did you get Mercury's artifacts?