特朗普百日执政、关税冲击贸易、AI 智能体与亚马逊让步

Jason Calacanis (00:00:00): I gotta wrap, guys. I gotta catch a flight to Miami. Let me do a closing here if you wanna keep going. You're welcome. Two, three, two. Chamath Palihapitiya (00:00:05): Well, the plane just waits. Just text the pilot and just tell them you're Jason Calacanis (00:00:08): Alright. Listen. I'm not burning all the, all in credits, so to speak, and all of our tokens. Chamath Palihapitiya (00:00:13): I'm kidding. I'm kidding. I'm kidding. I'm like freight David Sacks (00:00:17): forwarder. Worried about missing a flight. Jason Calacanis (00:00:18): It's everything and then putting it on the all in budget, the rest of us are flying Southwest for your chairman dictator, Trimov Polioki. David Sacks (00:00:27): A flight? It's a strange concept. Speaker 4 (00:00:29): Yeah. David Sag is like, what does that mean? David, when's the last time you flew commercial? Jason Calacanis (00:00:32): Clinton. David Sacks (00:00:33): I haven't missed a flight in about fifteen years. Jason Calacanis (00:00:54): Alright, everybody. Welcome back to the number one podcast in the world. We're back. We're back. And what an amazing panel we have today with us. Ryan Peterson, friend of the pod, is back on the show. He's the CEO of FlexSport. How are you doing, Ryan? Did you get any skiing in this year? I know you like to ski in the deep powder like Ryan Petersen (00:01:13): I tried, man, but it was a busy year for work, and now I got two little kids. I I did a few days. Jason Calacanis (00:01:18): Okay. So you're oh, yes. We all forgot. You gave control of your company to somebody. It got a little shaky, got a little contentious, and then you took the reins back. How's it been being back in the pilot seat? Ryan Petersen (00:01:33): Oh, that was a year and a half ago, so it's a distant memory for in in Flexport time, that's like a decade. We've, yeah, really had an amazing run. Although, these tariffs I mean, I guess that's why you guys invited me on. These tariffs have kind of, made a lot of created a lot of new uncertainty in the Flexport's world. Jason Calacanis (00:01:48): Okay. So we'll definitely get into that. And, of course, fan favorite back for his fourth appearance on the pod. Aaron Levie (00:01:55): I I was so first of all, I saw the comment I I saw the comments last time I was on. I'm I'm officially not a fan favorite, but glad to be back on. And I will be I will be representing free markets in in this this version David Sacks (00:02:08): of the What do the comments say about you? Aaron Levie (00:02:10): It was like, you know, like, loves Biden. Biden. Totally beta. Like, you know, all the Beta vitamin. Pizza. Soy boy. Was this someone you're David Sacks (00:02:22): filling in for me, though? Aaron Levie (00:02:24): I think so. Yes. I was trying to represent, I was trying to represent libertarian values at the time. But I love Ryan Petersen (00:02:30): that leftists are embracing Milton Friedman. I think it's all worth it if that's what comes out of all Aaron Levie (00:02:34): the tariffs of different AOC is gonna be a complete free market person soon. Yeah. Jason Calacanis (00:02:40): Free market months are coming soon. David Sacks (00:02:41): Embracing free market values and the stock market. Right? Aaron Levie (00:02:44): Yes. Exactly. David Sacks (00:02:45): Because any decline in the stock market is Trump's fault. So now they're they're embracing the stock market. Aaron Levie (00:02:49): Well, unfortunately unfortunately, the one day that he said it's Biden's market, it was a it was a green day, so that that didn't help the case. Jason Calacanis (00:02:55): I mean, gosh. Well, listen, it certainly like another massive green David Sacks (00:02:59): day already. Jason Calacanis (00:03:01): All that Chamath Palihapitiya (00:03:02): matters to me is that Jason Calacanis (00:03:03): Uber is the anti tariff stock. It just does great. It's not impacted by tariffs. So here we go. Chamath, it started already. We have TDS on both sides. We've got Trump derangement syndrome from Aaron. Aaron Levie (00:03:14): Wait. No. No. No. Wanna be oh, Jason Calacanis (00:03:16): Defender syndrome from Saks. We've got both. Defender and derangement. Here we go. Aaron Levie (00:03:21): So TTS syndrome. David Sacks (00:03:22): TTS bias syndrome on your part. Jason Calacanis (00:03:24): Who? Me? Me? I call bulls and strikes. Chamath Palihapitiya (00:03:27): What are David Sacks (00:03:27): you talking about? Okay. Jason Calacanis (00:03:28): Let's get started. It's starting already, folks. It's gonna be a great episode. Lots of excitement with us again. Jason has the The rainbow. Chamath Palihapitiya (00:03:37): Self sabotage, find every way to not get rich syndrome. Jason Calacanis (00:03:40): I do? What are Aaron Levie (00:03:42): you talking about? You guys said you're buying me out of Jason Calacanis (00:03:44): this thing, and I could get the hell out of here. You know how much my shares are in all inner worth? For the love of God, write a check, Sheamus. Speaker 4 (00:03:52): Get me the hell out David Sacks (00:03:53): of here. Chamath Palihapitiya (00:03:53): I just may. Jason Calacanis (00:03:55): Oh, god. I mean, I'm gonna be a terrorist. Uber breaks 88, that's my number. 88 is the number. You're all when that happens, and we're getting close. Alright. Let's get started here. We have so many topics to get through. With us again, David Sacks. Hey, David, you're doing, more episodes now. The audience wants to know. I don't know if we're allowed to make any initial announcements, but people are asking me on the streets, in the airports, in the comment threads. Is Saks back? David Sacks (00:04:26): Well, the ratings are back ever since we Jason Calacanis (00:04:28): came back to David Sacks (00:04:29): the show. That's for The ratings are back, Shaul. But is Saks back? Jason Calacanis (00:04:35): Is Saks back? David Sacks (00:04:37): Well, I'm back as much as I can. Mhmm. Jason Calacanis (00:04:40): And you are a partial employee of the government. You can do a hundred thirty days a year or something. Is that still the status? David Sacks (00:04:46): Yeah. It's roughly half, half work days. Jason Calacanis (00:04:48): Got it. And so what do you do? You have a you have a punch clock there when you get to the White House? You punch in, you punch out, like Fred Flintstone or what? Are you keeping track of these days? How do you do it? Chamath Palihapitiya (00:04:56): I know why you don't know this because you have yet to be invited to the White House. No. Jason Calacanis (00:04:59): That's actually interesting. Chamath Palihapitiya (00:05:00): I got That's actually not how it Normal. People just people just badge in, badge out like they would. Jason Calacanis (00:05:05): Badge in Chamath Palihapitiya (00:05:06): and badge out. A normal place, Jason. Jason Calacanis (00:05:08): I I mean, literally, it's interesting. There's a new private club. Chamath Palihapitiya (00:05:11): It's incredible that you have thoroughly prepared for this week, just like always. Jason Calacanis (00:05:15): I am always prepared. Interestingly, I don't know if you gentlemen know this, Ryan and Aaron. There's a new private club in DC that Don Junior's doing, and Saks is a member, Chamot's a member. And I just checked my Gmail. I checked all three of my Gmail accounts, everything. No invite. I must have gotten lost again. Did you send a paper one? Was it like you sent a gold card or something, Sachs? How do I get invited to this private club? What is this private club? Everybody wants to know. David Sacks (00:05:41): Well, we'll be happy to have you as a guest. Jason Calacanis (00:05:44): Okay. Do I have to wear MAGA hats and have the courtesy MAGA hats at the If David Sacks (00:05:48): you wanna be a member, obviously, there are dues and a membership fee and Okay. I just didn't wanna waste your time with an offer that I knew you wouldn't I'd be willing to accept. Jason Calacanis (00:05:59): It's only $500,000 is what I read. Is that true? David Sacks (00:06:03): That's true for for founding members who have additional benefits, but there's also a lower level that's the more reasonable membership level. Jason Calacanis (00:06:10): Got it. David Sacks (00:06:11): So I think people are getting a little bit carried away with that number. Jason Calacanis (00:06:13): Got it. Okay. That's probably one to clarify. Yeah. David Sacks (00:06:15): Yeah. There's, like, 10 founding members who have that level, and then there's a lower level for Got it. More average member. Jason Calacanis (00:06:22): Chamatha, you one of those 10? Chamath Palihapitiya (00:06:24): Yes. Aaron Levie (00:06:25): Do you pay more if you have TDS, or how does that work? Jason Calacanis (00:06:27): TDS premium? David Sacks (00:06:29): Are you talking about JCAL specifically, or what are we talking about? Jason Calacanis (00:06:32): The TDS surcharge? Aaron Levie (00:06:33): Asking for Jason Calacanis (00:06:34): a friend. It's a TDS surcharge. You put the tariff David Sacks (00:06:36): surcharge in the TDS surcharge. Just we want a place to hang out in DC. All of us have been to clubs like the Battery or Jason Calacanis (00:06:44): I don't know David Sacks (00:06:45): if you go to LA, like the Chamath Palihapitiya (00:06:46): Malibu Beach House. David Sacks (00:06:47): There's Malibu beach house. There's Bird Street clubs. There are places in Palm Beach that are really cool. In any event, we wanted a place to hang out. And the the clubs that exist in Washington today have been around for decades. They're kinda old and stuffy. To the extent there are Republican clubs, they tend to be like more Bush era Republicans as opposed to Trump era Republicans. So we wanted to create something new, hipper, and Trump aligned. Since I'm in the government, I can't be an owner, but I told him I'd be happy to be member number one. And so I, you know, said, great, let's do it. And so we're creating a place for us to hang out. That's basically it. We want a place to go where you don't have to worry that the next person over at the bar is a fake news reporter or even a lobbyist or something like that who we don't know and we don't trust. Jason Calacanis (00:07:37): Got it. David Sacks (00:07:38): So it's like any private club. You wanna go somewhere that's highly curated. There's private club movements happening all over the country, not just Washington. But we're creating something that didn't exist before in DC, which again is younger, hipper, Trump aligned Republican. Aaron Levie (00:07:56): We're I I actually started a Kamala club in in the Bay Area. David Sacks (00:08:00): So so we're yep. I don't think anyone would pay to join that, though, is the problem. Right? Jason Calacanis (00:08:07): I mean, it's an open barn. That's for sure. Where where do you where Chamath Palihapitiya (00:08:11): do you guys meet up in, like, Redwood City? Aaron Levie (00:08:13): We actually meet up at the at the at the Trade Ports. Jason Calacanis (00:08:16): Alright. Listen. We're a hundred days in to Trump two point o. It's just a random hundred day thing, but everybody's talking about it. Everybody's hand ringing. What has it been like for this first hundred days? How does it compare to Biden? How does it compare to Trump one point o? 43 executive orders, most ever in the first hundred days. And they're moving obviously at a at a different pace to be generous. Major indices are down seven to 10%. Obviously, this trade war and tariffs, the yield on the ten year, that's down about 40 basis points. There's a lot going on. Let's go around the horn. Ryan, Aaron, you're our guests. What's your take on the first one hundred days? Is it what you expected? Good, bad, and otherwise? Wins and fouls, everything. Ryan Petersen (00:09:03): I'll go first. I think it's a whirlwind. I mean, if you look at the, the John Boyd, the fighter pilot has this concept of the OODA loop, which is observe, orient, decide, and act. And the concept is that if you're in dogfighting, if you're able to maneuver through those UDA loops at a faster pace than your than your competition, they get disoriented and don't know what to do. And I I think that that's gotta be how Democrats in Washington and maybe mainstream Republicans in Washington, certainly journalists are all feeling this. Like, there's the the Trump Trump administration takes action. And before anybody can respond to that, they have already done, like, four more things, and you're like, wait. I forgot to actually follow-up on the other thing that they did that I didn't like. And so it's, yeah, it's pretty disorienting if you're if you're trying to they they can't find a line to fall back to and go, hey. We're gonna push back against this policy because they're already moving on to the next one, the next one. So that that's, like, my high level interpretation. Obviously, I come at it from a trade angle. I think everybody knew that Trump was gonna be he he told us during the campaign that the the most beautiful word in the English language is tariff. Don't tell them it's an Arabic word, but the most beautiful word in the English language. And so we knew that was coming. I think that the the the suddenness of it all caught people by surprise. I mean, they told us April 1, April second would be liberation day. They didn't tell us that it would go live the next week, you know, and and affect ship. You've already ordered these goods. So that's one aspect that people are kinda disoriented about. Jason Calacanis (00:10:32): Then we're gonna unpack. Yeah. We're gonna unpack that. Aaron, your thoughts on the first hundred days? Obviously, you are a democrat, and you were pretty vocal, lean not in support of Trump. So what's your take on the first hundred days? Any any any bright spots for you? Things you, you know, support? Aaron Levie (00:10:50): Actually, Sax's world, I'd say, has has been a bright spot. So especially, I mean, I think we have a very clear message on AI, and and that that that is that's been, I think, huge net positive is, you know, if you look at the the past, you know, few months out of all the AI push from the administration, it's unmistakably pro open source, pro bring as much AI innovation to The US. Obviously, the tariffs add a little bit of a headwind to that. I have some very strong asks, you know, around high skilled immigration because I think that, you know, AI talent is gonna be super critical to to actually win the AI war. So so I'd say that that directionally has has had some positive momentum. You know, from my perspective, this is kind of playing out almost exactly how I thought it would six months ago. And then three months ago, I I think there were some signs that maybe maybe, you know, it wouldn't play out this way just based on some of the some of the, you know, kind of early groups that were coming to the White House, the the the the sort of deep business, you know, kind of centricity of the White House. You know, I think it was day one or two that Stargate was announced, you know, at the White House, we're gonna go build massive infrastructure. I think the case I'd like to make, know, once we talk about tariffs is is I think there's an alternative universe where you just lean into acceleration as opposed to adding headwinds. But but so that would be that would be the case of what what maybe could have been, you know, very different is we just keep double down on doubling down on what's working while fixing the parts that aren't working. But that would be my judgment so far. Jason Calacanis (00:12:22): Shammoth, you've been talking about it here every week. You and I have been talking about it pretty consistently, so I don't think there'll be many surprises here. But take a second and maybe assess what you think if you had to pick a singular thing that's gone really well and a singular thing you think could be improved. What what do you got? Chamath Palihapitiya (00:12:40): Let me give you my overall grade, and then I'll tell you how I get to that. I think the first hundred days have been a b plus. Jason Calacanis (00:12:52): And Chamath Palihapitiya (00:12:54): here's how I get to that score. There have been two things where I think Trump has, frankly, hit a home run. The first is all of the direct investment and specifically the foreign direct investment into The United States. I think it's approaching. If not, it has already exceeded a trillion dollars from corporations and organizations and individuals from around the world who have committed to bringing money into The United States. And I think strategically, that's a legacy that will live past him. So I think that's been an A plus. The second is we had a very unsafe border situation, and he ran on shutting it down. I'm not talking about the execution of the deportations. I'm just saying getting the illegal crossings to zero, and he's done that. So that's been an A plus. I think what's going to be more controversial are these next three things, though. In my interpretation, I think the tariffs have been an A, and I think that the market reaction, the stock market is only down 4% and the interest rate markets are, you know, four and a quarter percent. I think those have been an a. Now the reason I think tariffs have been an a is because it is uncovered, in my opinion, how beholden we are to a brittle supply chain and specifically to China who is a friend but who's also an enemy. And I think that that's gonna really severely complicate our flexibility and optionality in the future as they do what is in their best interests. Okay. So where have they then not done so well? I think the documents have been, frankly, a d. We were supposed to get the Epstein files. We haven't yet. We were supposed to get the Martin Luther King files. We haven't. We did get the redacted JFK files. I don't think that there's been very good communication about why it's taking so long. So I think it's a very small narrow thing, but I think it had a lot of attention on the way in. I think the communications of the tariffs and the back and forth had been a sea. I think the markets were not led in enough of a way where they could absorb the volatility. But if you take it all in its totality, I would give it a B plus. I think it's been a very productive hundred days. Chamath Palihapitiya (00:15:33): And when you look back, I think in, you know, three years, four years, five years. Jason Calacanis (00:15:37): Okay. Chamath Palihapitiya (00:15:38): We've made some important progress. Jason Calacanis (00:15:40): Sacks, obviously, you're part of the administration. So I'm not sure exactly how to ask you this. But you sir you heard some nice compliments about AI from Aaron. I I happen to agree with those. I actually agree with a good portion of the crypto stuff too. I think actually getting those tightened up, which are your two zones of excellence and your area that you're focused on, I think you've done a great job there. So just bestie to bestie, great job there. David Sacks (00:16:03): Sure. Thank you. Jason Calacanis (00:16:04): What's your take overall? You know, it's kinda hard, I guess, to have somebody in the administration to criticize the administration. But hearing everybody else's take, what's your response maybe? David Sacks (00:16:13): Well, I would I would highlight three main areas that I think are big accomplishments for the Trump administration in the first hundred days. So so number one has to be the border. Like Chamaz said, I think you have to give the administration an A plus on this. They've completely stopped the border crisis. I think we all knew that Trump would take action on this because it's one of the main issues he campaigned on. But I think if you had asked any of us, you know, four months ago, would this problem be completely solved, meaning border apprehensions completely stopped, border completely sealed within the first hundred days, I don't think we would have believed necessarily that it would get done so quickly. But it has. Recall that for four years during the Biden years, we were told for the first three years that the problem didn't even exist. Whenever the videos were published of caravans coming or throngs of people running across the border. We were told that these were cherry picked videos on Fox News. It wasn't real. Finally, in the last year of the Biden administration, they said, okay, we're finally gonna do something about it. They took some limited actions. They said that doing more than that would require new legislation. Well, all of that was just gaslighting, it turns out. Trump came in. He restored the remainder of Mexico and other policies completely stopped it. He had this line at the State of Union, which I think is exactly right, which is we didn't need a new law. We just needed a new president. So I think that's area number one. Area number two, I would say, would be the vibe shift in the culture around wokeism and DEI. You know, how quickly we forget about this, but wokeism has completely collapsed. I don't know that anyone is endorsing in a full throated way. Moreover, beyond just sort of the cultural aspect of it, I think we've had significant policy changes on DEI. Trump has basically ended DEI at the government level. David Sacks (00:18:01): He also signed an executive order ending the use of disparate impact for affirmative action. This is the policy that said that even if you have a policy that's applied in a completely neutral and objective way, if it results in a disparate impact where different groups are represented in a different way in the outcomes, then somehow that must be racist. And that led to essentially engineering the results of various populations to basically fit quotas. And I think all of that now has fallen by the wayside, and I think that meritocracy and color blindness are back. The only holdout really has been these universities where Trump is now taking action against Harvard, and I think that ultimately we will win that battle. You see that even in relatively liberal companies, the DEI departments have been canceled, and they're moving back towards more of a meritocracy. So I would say that that's like big shift number two. And I think if any of us had tried to predict that a hundred days ago, we would have thought, yes, Trump will do something about it, but I don't think we would have predicted the total collapse of wokeism and DEI so quickly. And then I'd say the third area, which is still in flight, is the reprivatization of the economy. That's a term that Scott Besson used. I think that the Trump administration needs to reprivatize the economy. And I like that framing of it. And there's a bunch of different pieces under that. I'd say number one is Doge. Again, ending this hog wild government spending. I do think that Trump has come into office inheriting a very weak Biden economy that was being propped up by massive amounts of government spending that was not only stimulating the public sector, but it was also goosing the employment numbers as well. And we knew that that spending was unsustainable. We have to do something about it. So I think for the first time in decades, we've actually started to make real cuts in government, real cuts in the federal workforce. And look, we'd like to do more, but that is a huge shift in the conversation. David Sacks (00:20:04): There's other pieces of it as well. I mean, President Trump has signed a significant number of executive orders on deregulation. There's also been unleashing energy. He ended Biden's EV mandate and a lot of these like green new scam projects, offshore wind, and he's been encouraging oil and gas exploration. So I think there's that. And then I appreciate what Aaron said about tech innovation. We did repeal Biden's exec order on AI, which was, you know, a hundred pages of unnecessary regulation on AI. We've ended the war on crypto, and I think we're trying to stop the regulatory capture that benefits large incumbents. So you have all of these things, and there's been other things that have been done on the economy as well. But I do think that this sets us up for a Trump boom in the future. It's just that a lot of these changes take time to to play out. Jason Calacanis (00:20:55): Okay. Great. Well done. And Well, I Ryan Petersen (00:20:58): think I think when you I think when you would actually be very pro, Chamoss seems really pro other than he wants, like, the alien conspiracy files released, which we'll get soon. What is the what is the view from Jay Cali Wendy where you're the the the left leaning guy in the in the room? Aaron Levie (00:21:16): I, you know, I'm kind Jason Calacanis (00:21:16): of independent, but, yeah, social liberal. You know, I I look at what all Americans believe and and try to build some consensus here. It's one of the things I've been trying to do on the pod is look for where we agree. Americans universally want the border secured. They don't want illegal immigration, and they don't want fentanyl. So this is the biggest win, I think, for Trump, which I think everybody on the panel pointed out. And Sacks, you were dead right. Like when we were seeing those videos, some of them were five years old, some of them were recent. Biden really covered up what was going on in the border, and it took years to figure out what was exactly going on there. So that's the biggest win possible. I give overall, just to be brief, a B for this first one hundred days, and I give, you know, Biden like a C minus. The second thing that everybody agrees on is they want to downsize the government, they don't want waste and fraud. So I think Doge is the other huge win. The things I think that could be improved, really just three simple things. The economic uncertainty is really terrible for running a business. I'm seeing a lot of folks in my circle, on my podcasts, This Week in Startups and Here, telling me, Oh, I don't know how to plan for the future. And we're going to get into that with this tariff stuff and the trade war. And so I think economic uncertainty, we have to sort of slow down and maybe make it easier for people to understand what the administration is trying to do. I think rule of law really matters to people. People didn't like Biden's pardons, they didn't like covering up his mental acuity. And I don't think people like the deportations without due process. We talked about that on a previous episode. Overwhelmingly, people want Trump and the administration to obey what the Supreme Court says. They really want rule of law. The third term talk, like eight out of 10 Americans don't like that kind of talk. Jason Calacanis (00:23:00): And then conflicts of interest, obviously people hated the Hunter Biden stuff, they hate the meme coin stuff. And so that's where it could improve crisper communications, more thoughtful execution, maybe less trolling. I don't like the White House Twitter account trolling. And then focus on what got Trump here. You know, you all said the same thing. What got Trump in here was the economy, and one thing that wasn't mentioned by everybody is the peace dividend. And Trump is making massive progress in Ukraine apparently. I don't know if it's on the docket today or not. But stopping the wars and making the economy boom, those are the two most important things that he could Chamath Palihapitiya (00:23:36): on that? I totally missed that. You're absolutely right. That's another one where I would give Trump an a plus. Nat and I had dinner with POTUS two weeks ago. Jason Calacanis (00:23:45): Wait a You had dinner with Trump. This is breaking news. Chamath Palihapitiya (00:23:48): Well, okay. Whatever. Yes. David Sacks (00:23:49): I I think it's I think it's remarkable how much of a Putin apologist Jake Al's become. I mean, you wanna end the war in Ukraine now? Well, you're gonna you're gonna just give it you're just gonna give it to Putin? No. No. No. Gonna stop Putin? Jason Calacanis (00:24:01): I'm totally in favor of what Trump's doing in in negotiating a deal to get Oh, David Sacks (00:24:05): you wanna talk to Putin? Jason Calacanis (00:24:06): No. I've always wanted to talk to Putin. I just don't trust him, but you you can trust him. Chamath Palihapitiya (00:24:10): Let me tell you what Trump said. So Jason Calacanis (00:24:13): There we go. Chamath Palihapitiya (00:24:14): There was a handful of us at dinner, and then he got up to say a few words at the end. And he reminded me why I was so inclined to vote for him, which is he talked about his uncle, and he talked about how his uncle taught him about the severity of nuclear war and how people don't understand how intense and how destructive it is and the power of these weapons. And he left that speech at the end saying, and this is why I'm so fundamentally against this thing. And it reminded me, to your point, Jason, it is so easy to forget that there's only one existential risk save aliens coming from the heavens. Right? There's only one existential risk where all these issues become fringe issues. You know, you mentioned rule of law, border security, foreign direct investment, tariffs. It all goes out the window in a nuclear war. And I was like, I am so glad this guy's in charge because this one issue, he never waivers. And I think there's all kinds of complicated moments that could make this an issue. And this was where my biggest issue with Biden was was I did not know who was in control. And I think that Trump in the first hundred days, to your point, I think has completely reinforced that there are no conditions under which he'll go to war. He has time and time again showed, find the off ramp. But I think that that's really healthy for Americans to see. David Sacks (00:25:48): Yeah. Let me build on that point with respect to Ukraine is we were on a glide path before the Trump presidency, that Biden had put us on a certain path. Kamala Harris gave every indication she would have continued it. What was that path? It was a path of continued escalation and doubling down in Ukraine. Recall that it was Biden himself at the beginning of the war who said that if we give Ukraine Abrams tanks and f sixteens or ATACMs or HIMARS, or if we allowed them to hit targets inside of Russia, it would lead to World War III. He actually used the word Armageddon. So at the beginning of that administration, they were very concerned about how an escalatory path could lead us into direct conflict with Russia and World War three. And yet, despite that, at every fork in the road where they had a choice, they ended up doubling down. They gave the Abrams tanks. They gave the f sixteens. They gave the HIMARS. They gave the ATAKEMs. And finally, when Biden was a lame duck in his last couple months in office, they did the most reckless and irresponsible thing, which is allow American weapons to be used to strike targets on Russian soil, not just fighting in Ukraine, but on Russian soil. Moreover, we now know from a New York Times article that just came out in the last few weeks that it was American generals and American intelligence who were planning this war. So when you're talking about striking Russian targets on Russian soil, it's not just the Ukrainians using our weapons. They're using our targeting. They're using our guidance. They're using our satellites. I mean, we are deeply integrated in the kill chain. This is The United States being a co belligerent in the war, hitting Russian soil. That is incredibly reckless and dangerous. I have no doubt that if the Democrats were still in office, we would be in an escalatory spiral right now with the destination being World War three. And I do think that Trump has pulled us back from the brink there. There's obviously still more work to do, but I really appreciate the efforts that Steve Witkoff has undertaken where for the first time in three years, we've at least had direct diplomacy with the Russians. David Sacks (00:27:50): We weren't even talking before. We weren't even talking before. Jason Calacanis (00:27:53): Mean, talking is a great thing, and and and apparently, we're gonna keep supplying with them with weapons as long as they pay for them. So it's gonna be very interesting to see how this all hashes out over the next hundred days or so. Let's keep moving. Don't think we know David Sacks (00:28:06): that yet. Let's let's wait and see on that. Chamath Palihapitiya (00:28:08): Okay. Jason Calacanis (00:28:08): Yeah. I mean, I think that's, yeah, what was reported, but you're right. We should wait and see. Okay. Downstream tariff impacts. We gotta talk about this and this is why we have you here. Ryan, since you're in the thick of it, you tweeted a thread last week about the lag time of shipments from China. And when you were on, I guess during COVID, you really educated us to how the supply chain works. And according to the thread that you shared somewhere around early June, we're going to expect warehouses, trucking, the entire supply chain maybe to start to seize up or layoffs. I don't know how you would frame it, Ryan, but are we past the point of no return with regard to the supply chain? Is there an off ramp for this tariff conflict war negotiation with China in your mind? What are you seeing on the streets and in the purchase orders and the invoices at Flexport? Ryan Petersen (00:29:07): Definitely not past the point of no return. I think we're still right in the middle of the don't judge the cook while he's cooking is one of you know, like, let's see what the let's see what it tastes like at the end is I think a starting point here, and we're still they're still in active negotiations. So I don't think today's it's not static. Now the world does want a lot more certainty, and that's a big cause of what's happened here. And what has happened is a 60% decline in bookings of ocean freight from China to The US. I mean, so that's really, really pretty dramatic, like, probably exceeding what was expected. I don't think you know, when they issued when they rolled out the initial reciprocal tariff plans on on April 2, it was meant to be a 54% tariff on China, then, you know, there's multiple cycles of escalation. We ended up at what's now a 54% tariff. So this is this is a lot higher than anybody planned for, and so, therefore, I don't think anyone's planning for a 60% decline in ocean freight. Jason Calacanis (00:30:03): Ryan, let me ask you a question about that. You Yeah. Are people actually paying that 54%? There's been this discussion online, and it's it's sort of unclear from the administration and from retailers. Stuff that's landing that people ordered before April 2, are they actually paying the 54% on top of what's landing? Ryan Petersen (00:30:23): It's live now. It is it was based on departure date. So goods that departed China after midnight eastern time on April 9 are subject to the tariffs upon arrival. And so now enough time has passed that pretty much all the ships that are arriving now left China after April 9 when that started. So yes. Jason Calacanis (00:30:40): So what happens? People are paying it, or are people saying, Chamath Palihapitiya (00:30:43): I won't take delivery because it's too You have you have to pay it, Ryan. Correct me if I'm wrong, but you have to pay it at the dock in order to get the goods released. Jason Calacanis (00:30:51): Or less. Ryan Petersen (00:30:52): Right? More or less, that's true. You they they allow you to you have a bond in place so you can pull the goods out before you pay, but it the money's owed at that time, and then you get you get, like, a two week time frame to actually make the payment. But there are strategies here a lot of people are doing that you can use what's called a bonded warehouse and move cargo into this warehouse, and then you only owe the duties when the cargo leaves. Jason Calacanis (00:31:12): That's what I was asking. Like, is there a hack here to Ryan Petersen (00:31:14): It's not that that'll let you defer things, and it's very, very common right now. People are searching everywhere for bonded warehouse capacity because in a bonded warehouse, not only you defer payment to when the cargo leaves the warehouse, but you only owe the duty amount based on at that date. So if the duties come back down, which a lot of people are betting they will on the China specific duties, you'll actually lower your tariff burden. And then there's another hack for this, which is effect use a Mexican or Canadian bonded warehouse. So you move the goods into Mexico, and then you actually only technically import them into The US at a future date when tariffs are lower. So I understand a lot of a lot of companies are doing that right now too. We're helping some people with that type of strategy. Chamath Palihapitiya (00:31:55): But Is that sorry, Ryan. Do you think that the government will they view that okay? That kind of hack? And or, like, you know, like, if you look at the GDP numbers, one of the craziest things was the inventory pull forward that people did, to your point, like trying to get as much stuff into The United States before April 9 as an example. Ryan Petersen (00:32:15): Yeah. I mean, it's not a hack. It's a bonded warehouses have been around for decades, and they're they're very commonly used. I don't know that it'll be that material in the scheme of things that it would, you know, cause a change in the law around bonded warehouse. Chamath Palihapitiya (00:32:28): So you don't think, for example, the Department of Commerce will have an issue with the strategy of sending inventory into Mexico? That essentially you're essentially, like, isn't it a workaround? Jason Calacanis (00:32:40): It's a workaround. Chamath Palihapitiya (00:32:41): Yeah. Like, instead of paying the China tariff, now you pay a Mexico tariff, which should be less. Is that the idea? Ryan Petersen (00:32:46): Well, you can move it into a bonded warehouse in Mexico even and not pay Mexican tariffs either, and you just wait until it imports. But, I mean, what's the Department of Commerce or the customs to do? It's sort of you just delayed importing the goods. You imported them in the future, and, you know, it doesn't I I I wouldn't even call it a hack. It's just sort of like peep people are gonna get creative here. You know what I mean? Like, that's the job, actually. The government should set the rules, and the rest of us gotta figure out, alright. How are gonna compete and make money in this environment that they've created? Jason Calacanis (00:33:14): Ryan, in that tweet you redid, which was a pretty dramatic tweet painting a very, like, I don't know, like, a pretty dire situation. Where are we at in terms of how dire this will get or resolvable? Paint us the best case scenario and what you expect could happen in that case. Or if this gets extended, are we going to see as, you know, people are hand wringing empty store shelves, Christmas gets ruined, and all of these layoffs start happening in the supply chain? Take us through the two scenarios that people are debating. Ryan Petersen (00:33:48): Yeah. I mean, the the the bleak scenario, which is I don't really think it's gonna happen. I think that the administration doesn't want this to be their legacy that they, like, created a policy that just, like, kind of tanked small business and supply chain. So I don't I don't actually think this is gonna happen. But the bleak scenario is tariffs stay at this level for 145% on China. The 10% goes way back up to what it was originally announced in reciprocal tariffs, so there's no, like, safe haven for tariffs. And trade just falls off a cliff, and a lot of companies go bankrupt. In our in our especially small companies are the ones that are importing from China. Reality is, like, tariffs have been high on China for a long time. Labor costs in China are not are are not there for cheap labor. You're there for quality manufacturing at this point. Like, there's much cheaper labor in Southeast Asia, other parts of the world than there is in China. So you're in China because of the manufacturing capabilities, the ecosystem, not just for cheap labor. And if you could have moved, you would have already with the 25% tariffs from the Trump's first terms were pretty were high enough incentive. And so that's the bleak scenario is that small business starts getting wiped out, the ones that are buying from China. And it's a lot of brands. Like, it's not just Amazon seller selling stuff that you don't need. It's like all the brands that you know are like, you know, fashion brands, apparel brands. Jason Calacanis (00:35:01): I had cuts clothing on this week in startups last week, and he said there's it'd be like, if this doesn't get revolve resolved in, like, let's say, two to four weeks in his group chats, people are gonna start layoffs, and they can't physically restart the supply chain in Vietnam or wherever to make t shirts. So, Aaron, what's your thought on this as well? Just bringing you in. Aaron Levie (00:35:24): Sure. Well well, first of all, I mean, Ryan has supplied me with a high degree of doom scrolling, and I it's just like a horror show reading his tweets. First of all, I I I would feel better if the messages out of the administration were either more kind of consistent or that there was a logical connection between do we either want to raise the kind of, you know, tariff revenue stream, or do we want free trade? Like like, those things are are working against each other because, like, depending on who you talk to, they they say this is a a mechanism to bring down income tax, which obviously then by definition means that they expect the tariffs to sort of persist, which is totally different from let's go negotiate deals that just allow for the, you know, free trade to actually increase. And so are we worried about the reciprocity, or are we worried about kind of revenue streams? So that's a whole whole issue. You also have this issue, which is the messaging from the government. And this is the the meta point I'll make in a second is about is about how we could have actually accelerated into the transformation of the economy. But, you know, you have folks like Lutnick, etcetera, you know, going on on TV talking about the the end state of our economy, which are are actually probably, you know, fine messages, but but we haven't seen what that vision looks like, So everybody is kind of confused. Like, does this mean that we literally go into manufacturing plants and we're like the ones literally doing the screws on an iPhone? Or is it a bunch of jobs which are next generation jobs, which is like we're managing robots and shipping and logistics grows as a result of this and all of the surrounding kind of supply chains start to grow. So there's an underlying mean, most people on this call have managed teams. You do change management. You lead people to the end state that you want them to sort of see the potential in. And I think something that kind of gets missed is, and the part that kind of confused me is like, I don't know if, you know, exactly to Ryan's point, like people are in China because of the ecosystem of manufacturing, yet the messages you get out of the administration are like, oh, you know, we're gonna have fewer toys at Christmas time. Aaron Levie (00:37:22): It's like, no, that's not the big picture. Like, the big picture is like, you know, this is supplying the parts that go into building a manufacturing plant and building a car that allows us to actually, you know, be even remotely competitive in car manufacturing. Jason Calacanis (00:37:36): So where should in your mind this all lead? Because you have some thoughts on American exceptionalism and maybe skating to where the puck is going. So if you were to become an advisor on this as a technology expert and and somebody who spent their whole career in it, what would you advise them to do? Aaron Levie (00:37:53): I'd get rid of Navarro immediately. And and you would basically say, you know, mia culpa, like, oops. And, like, obviously, you need to, like, land that with some really cool trade deals that make everybody kinda feel happy. Jason Calacanis (00:38:04): Got it. Aaron Levie (00:38:05): And you basically say, you know what? Like, let's go back to the first two days of Trump, which is let's announce massive deals. We're bringing manufacturing here with Stargate. We're doing TSMC. We're building NVIDIA chips. We're gonna do a deal which is you get like 5% tax rate if you build in America. And so you just stimulate a manufacturing boom the country. You know, we incentivize, you know, automation across the manufacturing. We use that as a competitive weapon to go and compete with sort of lower cost labor that happens internationally. You know, we find every incentive and tool we can. We deregulate. You allow people to build these plants, and so you don't have to go through the three year EPA process. Like you just accelerate from this position and you see it all as upside. And so then business leaders, you know, if you go talk to the Fortune 500 company that actually has to build anything right now, you give them a path to say, listen, we're gonna help you transition away from your current supply chain, and we're gonna make it even more competitive and more compelling in America to do that. You know, there's a reason that Elon builds in America. Like, he's actually made it be more effective to be able to bring automation to manufacturing, to be able to build locally, but he wasn't forced to do that. And so I argue you use as many carrots as possible. In some surgical areas, and Shammoth, I've heard your points about chips, pharma, AI, in those surgical areas, we get tough where necessary. And if we have to do a couple sort of very surgical tariffs to kind of make people move the direction that we want, that's totally fine. But arguing the premise is hard because we act like it's like countries that are screwing us, but actually businesses are independently making decisions about where they want their supply chain to exist. Aaron Levie (00:39:58): In a free market, they've made that decision. They don't need the government to tell them where are they supposed to or where are they allowed to have their supply chain operate. That ends up with just lots of economic distortions that everybody on the right would have called the left socialists for trying to kind of implement central planning around supply chains. So that's my piece. Jason Calacanis (00:40:18): Well, what do you think, Chamath, here of this sort of reframingoff ramp and sort of maybe the positive spin on it? Hey, if you wanna make t shirts, you wanna make commodity items, have at it, free trade, reciprocal tariffs, great checkbox there. But here is a series of incentives and a path forward to do the advanced stuff, to do robotics, etcetera. Chamath Palihapitiya (00:40:41): Let me answer this in a different way. Okay. A lot of those things he's actually doing. I think this is where we are is we're beyond TDS. There's something that comes after it, and I think that the mainstream media has just lost their mind to a degree that they hadn't even lost their mind in Trump won. I'll give you a couple of examples. Well, one example, by the way, just a shout out to our friend, completely brazen, ridiculous, shitty reporting by The Wall Street Journal last night. When they were told that this, you know, this whole Tesla thing was a total farce, they continued to publish it. Okay. Fine. They're they have great Jason Calacanis (00:41:24): Elon, the board Yeah. Starting a search to replace Elon, and then the board said, well, wait. We told you we weren't doing that, and they didn't even mention Chamath Palihapitiya (00:41:32): They communicated that directly to the Wall Street Journal. The Wall Street Journal said, I don't care. I have an axe to grind. Jason Calacanis (00:41:39): Correct. Yeah. Chamath Palihapitiya (00:41:41): I think that Trump has a strength, which is he shapes these potholes for the mainstream media to fall into. The downside of that, though, is that the mainstream media then doesn't do the other part of the job, which is to tell the things that are important. So for example, we spent a lot of time breathlessly talking about the MS thirteen knuckles of the guy. Right? Or then we spent a bunch of time talking about how MSNBC blurred out the names of the placards on the lawn. Okay. But here's the other part where then they get so tilted, here's what they don't report. They didn't report that, for example, when Trump took a shot at Harvard, he also reinforced and strengthened historically black colleges and universities. Totally did not get written. I'll give you another example. This past week, Besson said that the tax bill will allow you to fully deduct all the PPE and all of the incidental costs of building a factory. I heard that. I immediately went to my wife. She runs a pharma business. This is exactly what she's trying to figure out. And we now are like, how do you build a business case if this actually gets effectuated? The point is that thing would create an absolute economic bonanza if it were to get passed. Other than people hearing it on this pod or randomly maybe finding it on a direct clip that Besson puts out on x, there has been zero coverage by the mainstream media. Aaron Levie (00:43:20): Yeah. But but, Shmoop, the like like, the the, first of all, that that yeah. Okay. MSM and whatever we wanna call it aside, like, the that is that is still on the administration for driving a, a change management process that that causes people to build on momentum and not causes boards to basically say, oh, are we gonna pivot our entire supply chain this week because because Trump, you know, didn't get a callback from from Xi. Like like, that that is, like, it's this is really not a a a a TDSMSM issue. This if you talk to Fortune 500 CEOs Chamath Palihapitiya (00:43:53): Did you know about the PPE thing? Aaron Levie (00:43:55): No. But that's not but, like, I'm I don't need to. Like, the thing that Chamath Palihapitiya (00:43:58): I know, but there are many other CEOs that do. They've they're controlling trillions of dollars of capital allocation. It's an important thing. Aaron Levie (00:44:04): If we had if we had Mary Barra on this call and and we said, Mary, has has, you know, Trump increased your ability to execute and operate and accelerate the the transition to The US, or has he had headwinds that make it tougher to navigate right now? Which which way do you think she'd go? Chamath Palihapitiya (00:44:22): I think that she would give you a calculated answer that neither is pro or con. Ryan Petersen (00:44:26): I think I think that answer changes by the day. I think that if you talked to her last week, she would say there's been a major headwinds. And then yesterday, to Jamal's point, they did this thing where you can depreciate or fully expense in year one capital improvements or building out factories. But also earlier this week, they made it so that auto auto parts are not subject to the tariffs. They created a huge exemption. Jason Calacanis (00:44:47): Yeah. We exempt out everything. Aaron Levie (00:44:49): Like, it's Ryan Petersen (00:44:49): great. Should've by the Jason Calacanis (00:44:50): way Well, this this all speaks to Ryan Petersen (00:44:51): If this was a bit a complaint, it should've been there in the beginning because these auto auto companies were saying, hey. This is gonna bankrupt us if we have to pay taxes on the end. Jason Calacanis (00:44:58): Where I would take you circling back to communication and making a CRISPR and Yeah. You're right. Chamath Palihapitiya (00:45:04): Aaron, where you are right is my expectation is it's my job to stay informed. Okay? As a CEO of my company, I try to stay informed. And you're right. It is hard because sometimes I find myself hunting and pecking to find the things that matter. But I do put a bunch of that responsibility into the lap of the people that are supposed to actually report the facts. They can choose. They didn't have to run that article about Elon, which turned out to be total bull horse on the front page of The Wall Street Journal. They could have talked about what Ryan just mentioned as the first article and said, here completely changes your ROIC and ROE calculations for 90% of the S and P 500. That was not the article they chose to write and to publish. Ryan Petersen (00:45:48): I but I also think it comes back to my original point around the UDA loops that there that Trump is the administration is running these very tight, hey. Let's take an action. Let's see what happens. Let's see the reaction and then take another action. Washington's used to doing all these committees that plan everything for five years or something or whatever, eighteen months, and then roll it out slowly. And they're going, hey. Let's roll it out. Oh, crap. We're about to cause this huge problem in the auto manufacturers, and they're all telling us they're gonna go bankrupt. Okay. Three days later, they push an update to that. Think that it's kind of and Aaron feels chaotic, but it's Jason Calacanis (00:46:18): Just, yeah, to summarize, Ryan and Aaron, your position so we can keep going through the docket, hey. A little less shock and awe, maybe a little more predictability, a little crisper communication. Shammoth, I think your position is, hey. Maybe the mainstream media can play a better role here in focusing us on what matters. Aaron Levie (00:46:34): That wouldn't be my takeaway. So yep. Okay. My my What's your takeaway? I mean, like like, zero shock and awe. Chamath Palihapitiya (00:46:40): Like Okay. Aaron Levie (00:46:41): Like, not a little less. Like like, I like, my strategy would be a % different. Actually, Scott Besson has an incredible podcast from, like, September of last year. And he basically said, you know, Biden Bidenomics got it all wrong. And I was, like, listening to it. I was like, oh, okay. Actually, this is kinda cool. Like, he basically says, deregulate The US. Make it easier to build manufacturing in The US, increase the GDP, and then you'll be able to take in less tax revenue, spend less in the government. And it was like, oh, this is actually like a glide path. We could take the fact that we did a soft landing relative to the rest of the globe. We're winning in AI. We're winning in a number of categories. We obviously need more energy. We need to bring in manufacturing into The US. And so you have this great momentum, which is we are the tech leader in the world. Let's just pour fuel on that. And so to pour fuel on that, you you do you just do a series of carrots and and the and the winds that build a flywheel of positive energy. Like, the the reason why I take I take a little bit of exception to to Chamath's MSM point is that I think to some extent, Fortune 500 CEOs are not the ones like, oh my gosh. Like like Rachel Maddow said this. Like, I'm gonna go and and, you know, worry about this topic now. Like, they like, like, the information coming at them is is the Chamath Palihapitiya (00:47:55): goal talking about the information that's presented. I'm talking about the information that's excluded. How do you get the information that's not published and shared broadly? Aaron Levie (00:48:03): No. No. But but come on. Like like, Goldman Sachs and JPMorgan are not writing reports on the fact that we might enter a recession because of of MSNBs MSNBC's reporting on this topic. Like Chamath Palihapitiya (00:48:13): like Again but again, that that's not what I'm talking about. Okay. I'm saying, like, glad handing some high level prognostication, which nobody ever gets right, is in my opinion worthless. What I'm talking about is the details. So when you talk about something as narrow and specific as excluding PPE or allowing you to double or triple, depreciate something in a given calendar Aaron Levie (00:48:35): year That's fantastic. Chamath Palihapitiya (00:48:36): That is narrow. It's precise. It's It's actionable. And what I'm saying is if I surveyed the 500 CEO of the S and P five hundred dollars to doughnuts, the overwhelming majority would not have known. And had they brushed up against that somehow in their normal media consumption to then ask their teams, the odds of that would have been zero as well. And all I'm saying Jason Calacanis (00:48:58): is Who do we who do we blame for this, Chamath? Is it the administration's job or Meishui media's Chamath Palihapitiya (00:49:03): everybody knows about the blurring out of the stupid, you know, pictures on the lawn and the MS thirteen knuckle tattoos. Jason Calacanis (00:49:09): Yeah. Okay. So let's wrap up on this just really lightning round here. Amazon flip flopped on a new tariff notification on their websites. Trump said he had a great discussion with Bezos. He solved the problem very quickly. He did the right thing, good guy, etcetera. If you haven't seen this, it's something that is doing. Here's what TMU does currently today. Nick, you have that image, if you could pull it up of just when there is a tariff, they explain the tariff coming into the country. They put it as like a line item. I thought this was actually kind of cool. I don't know why people take offense with Ryan, this is pretty standard stuff. So Amazon's competitor, TMU is putting in the import charges. They don't say tariffs. They don't say taxes. Import charges. This is like a standard thing. This happens in other countries too. Chamath Palihapitiya (00:49:56): What is this? What is Timu? Is this like a dollar store? Jason Calacanis (00:49:59): It's basically like a doll is it this the last place you would ever buy anything from $5 jeans? No. Yeah. You can buy $12 jeans. Basically, your left sock from Lorapiana costs less than Tmu's entire inventory of jeans. Point being, I thought this was actually a plus for Ryan Petersen (00:50:19): I think they Amazon totally misplayed this. They they they did it. They roll it out, then they got criticized. I think they were called a treasonous company from the White House press you know, by the press secretary. They totally misplayed this because they should have gone and leaned into it and said, yeah. We're showing you all these tariffs when you buy from China. If you buy from America, you don't have to pay any tariff. Now look at all these other products. Aaron Levie (00:50:39): Come on. Come on. That would've lasted three and a half seconds. This is exactly consistent with the other issue, which is they're playing whack a mole. Okay. We're gonna do something with the automakers. We're gonna we're gonna try and solve some problem with Amazon. Like like, this is a sign that that it's like, it's not a good strategy if you have to do this much whack a mole. Like Like, they can't cover up what Amazon is gonna end up dealing with because there's gonna be 500 other retailers don't get the call with Trump. So this is like, to me, that's evidence of clearly this, they didn't think through the entire downstream set conditions that are going to change as a result of this. Jason Calacanis (00:51:16): Sure. Yeah, I thought this was a big win, Chamath, because they could then have Amazon, here's a mock up somebody made, I'll pull it up here, it was interesting. They could, to Aaron's point, just show, Hey, here's a bunch of American companies, buy American when you do a search. That's Ryan's point. I'm sorry, Ryan's point, Hey, here's what it might look like. Out the Oral B toothbrush one up, Nick, if you got it right there. So somebody mocked this up. I think this could be the hugest win. You could have the retailers do Buy American, buy it once, buy a high quality product from America. If you look here Aaron Levie (00:51:52): We don't have the products. It wouldn't work. We don't have the products. Jason Calacanis (00:51:58): Well, I mean, we do have for some products, you know, American made products. You know, I buy my boots from Danner, and those are all American made. Aaron Levie (00:52:05): So yeah. So we should just go back to communism, and we're all gonna make our our shoes. Like, it's like that's like, we're we're in a global market. Like, we buy from everywhere. Jason Calacanis (00:52:14): Chamop, any thoughts on this? I mean, obviously, there's the whack a mole angle. There's buy American and be proud of it. Here's the narrow communication. Chamath Palihapitiya (00:52:23): Here's the narrow question. I I got a bunch of emails from people, and a bunch of them were Amazon sellers. And I don't know, Nick, if you can find it, but I posted their comments, and I reshared them just to kind of highlight the issues that they were going through. And at the core of it was a feeling by them that Amazon had abandoned them as American purveyors and sellers of goods, and that Amazon, on the margins, had a tendency to help competitors from abroad come stand themselves up and compete and essentially cannibalize on price and margin. Ryan Petersen (00:53:05): This is my view completely. And that this is the biggest opportunity that I think the Trump administration administration's flying at 40,000 feet doing macro level negotiations and look and failing to see some of these micro optimizations that are really, really real. So you in The United States, you can import goods as a foreign company. You don't not you do not have to create an LLC or any sort of registered entity in The United States to import goods. Sometimes they say, oh, Americans pay the tariff. Like, that is not true. In many, many cases, the foreign company just imports this stuff, and they sell on Amazon. And when they get caught cheating, they can they can lie about the valuation and pay a lower tariff. They can change their classification and pay a lower tariff. They can import stuff that, you know, is harmful to children, has lead paint, whatever else. There's no enforcement at all. You can't rely Jason Calacanis (00:53:49): on people's control. Third party is like a bit of a backdoor to abuse the system. Right? Ryan Petersen (00:53:53): I mean, Amazon is sort of just playing the game that's on the field, but they're this is legal in The United States as these companies import stuff. And I think it's 60% of all of all the sellers on Amazon are these Chinese registered they're not registered in The United States at all. Just Chinese companies Okay. Look. Jason Calacanis (00:54:06): Which sounds profoundly unfair in terms of the playing field. Chamath Palihapitiya (00:54:09): Sure. Just take a step back and also acknowledge that we are talking about a level of detailed issues that we would never have talked about six months ago, that there was no interest in even bringing this up? Like, if if Ryan wanted to bring up the sort of hollowing out of American salesmanship, let's say, if you will, because of, like, this arbitrage that Amazon does for GMV, that would have been a snooze fest. Except today, it can actually get a lot of awareness. And Aaron mentioned this, and I've mentioned this before, but, like, I think that there are four things that really matter, batteries, AI, pharma APIs, and rare earths. That now is on the agenda. I think the the positive way to look at this is the American economy is too complicated. If you had waited, Aaron, for a study, for all of the implications, we would have been waiting forever and nothing would have happened. And I think that we've made macro level moves, you're right, and now we are finding what the implications are in course correcting in real time. And I hope what happens though is when we find these big thorny issues, I think the Amazon thing is a is a pretty interesting issue actually about, like, American competitiveness. Now the question is, do we follow through and get to the root cause of it and and fix it? Ryan Petersen (00:55:26): And those feedback loops are there. I mean, the Trump administration is gonna act on this, and if and there's an act that's coming out of congress as well to shut down the foreign imported records. So those feedback loops are there in ways that I don't I don't know if they were there in the past. Go ahead, Aaron. Aaron Levie (00:55:37): We can totally chaos monkey the the economy and just see what breaks. I think that the you know, you you you sort of phrase the we could, you know, do the research paper and we could do, you know, Aspen Institute, as a bad thing, but, also, it can be a bad thing if you're the small business owner right now who has 30 employees and you just literally don't know what you're gonna do next month. And so so that that's that's sort of then the argument to not, you know, good counterbalance. That's that's like why Ryan Petersen (00:56:03): you you Aaron Levie (00:56:03): do have some bureaucracy and and you don't chaos monkey the economy and why Rand Paul is literally saying, I mean, we shouldn't actually let, you know, have unilateral, you know, control over tariffs. So, you know, in interesting that that, like, dynamic there. Jason Calacanis (00:56:17): Alright. Sax, you wanna wrap us up here or you wanna pass? David Sacks (00:56:22): Oh, am I still on the pod? Jason Calacanis (00:56:23): Yeah. Well, you turned your camera off. So David Sacks (00:56:26): Look. I spent 80 minutes debating this topic with Larry Summers three weeks ago. The point I made then is that we had in this city at for twenty five years, a globalist consensus on trade that distorted a lot of outcomes. I don't need to rehash that debate, but I'll just recall that Larry Summers' main argument for why this would not work out is that the market was down. Do you remember that? That was his evidence that this wasn't gonna work. Okay? And it was all about the market not pricing in lower expectations. Well, guess what? The market is actually up since Liberation Day on April 2. So what happened three weeks ago was basically a panic in the market over this policy, and the media has been trying to fuel that panic. Now, what I said as well is we do have to stick the landing on this. I mean, president Trump shifted the conversation away from this globalist consensus, and he's now redefined the debate, but it is now up to Scott Besson, the treasury secretary Howard Ludnick, the commerce secretary Jameson Greer, the US trade rep, and so on, the Trump trade team, to now negotiate these deals, stick the landing. And I agree with you to the extent that the sooner that is done, the better because it is good to provide business certainty. But the idea that so far this hasn't worked, I think, again, the main argument against that was the market reaction that now the market's now positive. So I think my point is just we need to give this time to work. I think it's too soon to be judging this policy as if it hasn't worked yet. It needs to be executed properly. And quite frankly, Ryan, I mean, I remember the last time you were on this pod, you were coming on about wasn't there, like, some union deal that was supposed to shut down all the ports and all the shelves to be empty? That never happened either. Ryan Petersen (00:58:17): It did happen. It did. They shut down for three days. I don't David Sacks (00:58:20): okay. I don't remember the the shelves being empty, which is now the new panic the media is trying to create. So, look, there's a lot of pants sweating that's occurring here that's being fueled by the media. Aaron Levie (00:58:29): Woah. Woah. Woah. I I do want I want I I do wanna I just wanna bookmark one one thing. The only thing I actually I was more frustrated listening to the Larry Summers and and you conversation because I was like, what? Larry, make this point. Like, come on. Like, don't go down the WTO rat hole. Like, that's that's not relevant. So here here's the other thing. David Sacks (00:58:45): The Of course, it's relevant. It's how we got here. Aaron Levie (00:58:47): No. No. So, like, like, as in, like, that's twenty five years ago. Like, let's worry about literally today, and, like, what what do we do going forward at Chamath Palihapitiya (00:58:53): this moment? Today Aaron Levie (00:58:54): is Right. And the only thing I just wanna say, because I because I I do think that that, you know, I appreciate your point about, hey. There's, you know, everybody's freaking out, whatever. But to be totally fair, that some of that freak out, whether we can decide how emotional it needs to be, is the reason that then Trump walks back the things that then cause the market to correct. So so we can't just say the market's back and and, like, see, we didn't need to freak out because it was literally David Sacks (00:59:18): I said we have to make the deals. We have to stick the landing. But look, China over the last twenty five years has been able to strategically annihilate our rare earth processing capability and our ability to cast rare earth magnets. We just sat back and watched as the market basically went to the lowest bidder, which was being subsidized by the Chinese government, which the WTO allowed them to do. We should totally Jason Calacanis (00:59:40): do And David Sacks (00:59:40): now we a critical dependency in our supply chain on China for basically every electric motor in every product, including cars. That was crazy. We should not have allowed that to happen. How are gonna change that? So we needed to shift the political conversation to recognize the ways in which Ryan Petersen (00:59:58): free trade David Sacks (00:59:59): led to unfair trade created unacceptable dependencies on the American for the American economy. Chamath Palihapitiya (01:00:05): Wait. Wait. Just I I just wanna make one one point. Jason Calacanis (01:00:08): It's more than point, and then I'll No. Jay, but Chamath Palihapitiya (01:00:10): this is the national security of The United States that that's at stake. Let's go take your favorite pet issue. China invades Taiwan. Okay? And we have to take a side, Jason. Jason Calacanis (01:00:22): My pet issue? Chamath Palihapitiya (01:00:23): Hold on. Let me just finish. Who's going And the and Chinese say, here are the implications of supporting Taiwan on this. A, b, c, and d. You don't get any pharma APIs. You don't get any rare earths. You don't get any batteries. Okay. It'll it'll send life back fifty years. Or let's say China and India get into a fight and we're forced to pick a side. Same situation. The point is there's all these scenarios that we never even considered us being able to have strategic optionality to make the decision that's morally and ethically right for The United States. And I think that we have learned through this lens that these are huge issues. The thing that the Chinese did that was so brilliant, which we still don't have an answer for, is they have these national champions. And being a national champion allows you and we'll talk about this in AI. It allows you to blur the lines between the public and private partnership. It allows you to blur the law. It allows you to blur capital. And I'm not saying we have to do that, but what I am saying is we need to have our own answer to it. And that was never on the table until April 9. Aaron Levie (01:01:32): Alright? Well, yeah, but, like, 100%. Like, do that strategy, and don't have a mad rush. Chamath Palihapitiya (01:01:39): It is the strategy. Aaron Levie (01:01:40): No. No. No. Because that's if you have a you know, Ryan, what is the number? I don't know. Trillion of imports or whatever. Like, you don't need everybody then then jamming the system to build their supply chain, you know, in The US to solve that problem immediately. Chamath Palihapitiya (01:01:53): If we're sitting here in nine months and you're saying this and there are no deals, I would say that you're Right. What Howard Lutnick said last week, and, again, we may have all gotten caught up in the knuckle tattoos and we missed this, but he was very clear. We have a country. A deal is already done. Yep. We're convening parliament. It's gonna be the first of many. So for all we know, there's, like, 30 deals that are waiting in the wings, and the first one will set the tone. And and I think that Saxe is right here, which is it's way too early to declare defeat and that it was, quote, unquote, chaos. I think if we're sitting here in nine months and foreign direct investment has shriveled up and domestic investment has shriveled up because there is just no continuity, you have a claim. But that's Aaron Levie (01:02:37): not what we are now. I I I don't I don't think that'll happen. I don't I don't think that'll happen. I think we will end up in like, I'm with Ryan. Like, we will end up in a good spot because we'll iterate through this. My only point is there's an alternative path that could have occurred. Jason Calacanis (01:02:48): It could have been done That's all. In a more thoughtful, well communicated pattern instead of, hey, let's do barrel rolls with the airplane. I don't disagree with you, Aaron, and I could tell you we've already started to see layoffs. Chamath Palihapitiya (01:02:58): Nobody wanted to even initiate the barrel rolling. Guys. Yeah. Listen. We get it. It's like, hey, I don't want anything to change. Jason Calacanis (01:03:06): Think we agree to disagree on this, Aaron. David Sacks (01:03:08): We gotta move on Jason Calacanis (01:03:09): to the next Hold David Sacks (01:03:10): this one Jason Calacanis (01:03:10): last point. We're gonna move David Sacks (01:03:11): on to the next topic. Me. You didn't call me for forty minutes. I just wanna make one final point. Aaron. Jason Calacanis (01:03:16): Here he goes. David Sacks (01:03:17): Aaron, where were you with this perfect plan? Yeah. Where were you with this perfect plan before liberation day? Aaron Levie (01:03:23): Was telling Kamala about it. David Sacks (01:03:25): You were telling Kamala. Okay. Great. He was. Nobody Nobody. Aaron Levie (01:03:29): All the people Jason Calacanis (01:03:30): Mai Tais and they were talking about this specific issue. David Sacks (01:03:33): All the people who suddenly know what the perfect plan is and how to perfectly execute it, no barrel rolls, Had nothing to say about this topic for twenty five years. Now all of a sudden, they've come forward with their perfect plans. I would say that's victory for Trump. Ryan Petersen (01:03:47): It's like, look at this. Wait. The best thing of all of this is you've got the liberals embracing Milton Friedman and their backgrounds on there. I Jason Calacanis (01:03:52): love it. Chamath Palihapitiya (01:03:53): Yes. Alright. Listen. Jason Calacanis (01:03:54): We're agree to disagree. We're gonna agree to David Sacks (01:03:56): disagree on this one. The liberals love the stock market. Jason Calacanis (01:03:59): Listen. Sachs, Kamala is coming on next week. We're gonna make some cocktails. It's gonna be wonderful. We'll ask her some direct questions about it, but I wanna talk about AI agents. Twenty twenty five shaping up to be the year of AI agents, tons to talk about here. OpenAI is planning to charge between 2 and 20 ks a month for different levels of AI agents. These would be basically cron jobs, they would run-in the background and do things for your company that humans are doing right now. You may have heard of this agentic tool. Again, agentic is just a fancy word for agent, which is a fancy word for like a cron job that just runs Aaron Levie (01:04:35): Nope, that's Jason Calacanis (01:04:36): right. Yep. And Manus is the company in China that started this, weirdly, benchmark invested in it. That's created a whole kerfuffle on the side. And Manus's website has a really good visualization of what these agents would look like. David Sacks (01:04:49): So first of all, I think you're giving me a little too much credit to Manus. They didn't come up with the agents, but I do think that they have a very good demo. And it's hard to know exactly how real it is because not everyone's used it. Jason Calacanis (01:05:00): And it's from China? David Sacks (01:05:01): It's from China. I'll get to that in a second. If you go to their website, you can see a bunch of their demos. And I do think that what they deserve credit for is advancing the ball on the UI paradigm. And it's not that other people weren't doing this. I mean, I think notably Anthropic was doing this with its operator product. But the basic idea is that you've got this two pane view. And in one window, you've got the standard chatbot interface. And then in the other view, you can see what the agent is doing. And that agent has the ability to toggle between the currently four apps. There's search, browser, code terminal, and document editor. And so when you give Manas a task, the first thing it does is create a to do list in the document editor. You can kind of see it there. And then it works sequentially to achieve each of those tasks and then puts an x on them there. And you can kind of see it working. And I think what's cool about the demo is just the way that it seamlessly toggles between those four apps and you can see what the AI agent is doing, you know? And it's browsing the internet, it's searching for things, it's writing documents, it's crossing things off its to do list. Now, I think it's pretty easy to imagine where this goes, which is you'll be able to connect an agent to all of your SaaS apps. So it won't just be four applications. It'll now be connected to dozens of applications, including ones that already have your data, and it's gonna know what actions it's possible to take in those apps. So when it creates its to do list, there's a much wider range of things that it can accomplish. And in fact, there's a new standard called MCP, which is taking off like wildfire, which is built specifically to enable agents to connect with applications and understand the data and understand the actions that are possible in those SaaS applications. So look, Manus is just the tip of the iceberg here. I think this will become a very standard UI paradigm. That's the reason why I mention it, not because I am predeclaring them to be the winner in the space, but just because I think there's a lot of talk about agents, and I think it's hard to conceptualize what that means without just seeing it visually. Jason Calacanis (01:07:01): Great, great summary there, Sax. And Aaron, I wanna get your thoughts on it because obviously you're running Box and you have your finger on the pulse of this. We actually started building one of these in our venture firm. We have 20,000 applications a year, and we have updates coming in from investments. We are now taking those sacks, Aaron, and we are having an agent sort them and then look for competitors and compare them to the last update. And we're looking into our notion, our coda, and saying, what have what other communications have we had? What questions should we ask about the startup and about their strategy? And then we're presenting that in Slack to our team. So this is coming fast and furious. And we spend, I don't know, probably fifteen minutes on each of those incoming applications to start doing the math on that, talk about five thousand hours of work. Aaron, what are you seeing on the street? What are you doing at Box in terms of agents landing right now in q two of twenty twenty five? Aaron Levie (01:07:57): Yeah. I mean, I think I think Sax represented it well, which is which is, you know, you have to now think about AI as as effectively being able to do anything on a on a computer or as another piece of software as as a human can do. And the little distraction that that I think happened two years ago after the chat should be tea moment was we sort of thought about that as, oh, we're just gonna now, you know, do, like, typing information retrieval, and that's a new paradigm for user interfaces, let's say. So you just, like, talk to your software and you, like, search Zillow via chat. That was sort of a little bit of a distraction. That that's super helpful, like, when you want basic information look up or or whatnot. The big breakthrough is starting to think through these things as full, you know, effectively, you know, agentic systems that operate on any amount of data, any amount of tools for as long as you want to complete any task that you want. And this is sort of a big year where agents are starting to enter the vocabulary of enterprises, of IT people, of larger and certainly smaller organizations. And it kind of requires you to have a little reset moment on how you think about AI, which is it's not just now a kind of a copilot that you talk back and forth with. It's actually something running behind the scenes that's now actually starting to deliver real automated kind of work for you. And so lots of implications, like, you know, massive implications to what the software business model is in the future. You know, I would argue strongly that it's a massive TAM increase, because now software starts to go after labor spend. It completely changes the dynamics of then, you know, how do you build a moat in a world of AI agents? But but I think I Jason Calacanis (01:09:34): like that piece there, Aaron. You said something very interesting. How software then is going to go over human spend. Chamath Palihapitiya (01:09:40): Yes. Jason Calacanis (01:09:41): Explain that concept. Yeah. So a second. Aaron Levie (01:09:44): David and I you know, we we we go back way back in SaaS land, but, like, you used to basically just you know, you built you built a piece of of software, and you sell it for the number of of people in the organization. And so, you know, company has 500 employees and you sell that thing for, let's say, 10 a user a month, you know, $120 a year, and you make $60,000. And that's kind of the business model. Now, when your software actually brings the underlying workflow to the customer or the underlying outcome to the customer, so that company might have 10 lawyers. And so previously, if you were selling software for lawyers, you had a maximum amount of 10 seats that you could sell. Now, all of a sudden, if your AI agents are doing the equivalent of, let's say paralegal work or some form of professional services, all of a sudden you might be able to sell a multiple of the initial kind of 10 seats that you would have sold previously. Chamath Palihapitiya (01:10:36): So you say that's Jason Calacanis (01:10:37): a huge opportunity because now you're not enabling a human to be 5% more productive, you're replacing a human or you're replacing one out of 10. Aaron Levie (01:10:44): Yeah, and actually, I'm gonna take a massive I'm gonna do an underscore on this point, though. I don't like the word replace because I think actually most of the upside is actually gonna be for companies that now deploy labor at things that they wouldn't have deployed labor at before. Got it. And, you know, maybe I'm biased from the view we have, but most of our conversations with customers are when they have AI agents, they can actually now go and actually deliver work in areas that would have been unaffordable previously. They actually they weren't doing the work. Ryan Petersen (01:11:11): Is that true in logistics? So, like, we we're making thousands of phone calls a day using AI calling truck drivers. And we if we have a load we've got 400,000 truck drivers using the mobile app, Flexport mobile app. I don't have enough loads to keep them all checking it every day to see if there's a load that matches them. And if they don't check it, I'm they're they're useless to me. Now and it was too expensive to call the truck driver and have a human call and talk to them even if it's a human in a call center in The Philippines. Whereas with AI, it's almost free. I'm calling thousands of them a day going, hey. This load looks like it's a good match for you. Are you interested? And and then we activate them on the platform. There's that's new work that wasn't gonna happen before, not just a replacement. Aaron Levie (01:11:51): Yeah. I I think that I think trouble I think, like, we we you know, in in the Valley, unfortunately, we've been co opted a little bit somewhat with with a little bit of a doomer, you know, mindset in some areas, and and we think of then AI as, okay. Like like, it's all fixed pie. It's gonna replace things. And on the ground with large enterprises, the vast majority of the use cases are, it's the ability to finally review the contracts that we never got around to reviewing. It's the ability to finally automate an invoice process that we never did. It's the ability to go in and just create marketing campaigns in every language that we never got around to. And so I think that'll probably be actually like 90% of the usage of AI in the future will be things that if we look back and we snap the line right now, we said this is what knowledge work is today. 90% of AI usage will be things that we don't do today. 10% will replace, you know, what we're doing in some areas. Jason Calacanis (01:12:41): Think that's the right take because Chamath, I can tell you in our firm, would never have associates or researchers or analysts, Saxe, you're also were in this line of work as well, venture capital, you'd never have them review legal documents. That's something lawyers would do in the legal department. But now because of AI, we have them say, here's the safe, here's the term sheet, here's the edited version, dump it all in, find out what the changes are, what are the deltas here? And then let's have a discussion about what the founder changed in a standard document. And we don't have to bother with an attorney and maybe you wouldn't have even checked those documents if you were a seed fund or an angel fund, you would just go along for the ride because you're the tenth person signing the documents. What do you think, Tremoth, here in terms of the premise that maybe it's 10% replacing work that's happening, but this is blue ocean and we're gonna do 90% of new stuff that we just never got to. Chamath Palihapitiya (01:13:32): Yeah. I tend to I tend to believe that's true. I think the customers that we sell into at eighty ninety are largely large enterprises as well, so not dissimilar to Aaron's customer base. What I would say is that what they are encountering is the trough of disillusionment. And I don't know if, Aaron, you're seeing this as well, but every single, you know, CIO ran around signing up some sort of AI product in large part because their CEO would say to them, hey. What's your AI strategy? And the reason the CEO asked them that is that at some point, somebody on the board said, what are we doing about AI? So that's the the bull cascade that that that we went through in the last two years. And I think what has happened now is people have spent billions and billions of dollars. I think you can see it in the revenue traction of the AI companies. But I think where we are today is that there are some real technical complexities that have not been solved. I'll give you an example. We have a lot of customers in regulated industries, which is to say that if you make a mistake, you will get fined or you will get shut down. Life sciences, healthcare, financial services are three examples. People still don't seem to appreciate that when you replace software that is deterministic with software that is probabilistic, meaning software that somebody wrote for you, do A, then do B, then do C, with an LLM that can hallucinate, you'll have errors. So what used to be a throwaway thing, which is quality assurance and QA, right, unit testing, integration testing, is now the only thing that matters. Why? Because if you're a financial services institution and you're supposed to do KYC and it borks and now all of a sudden you send a wire somewhere in Syria, guess what? You're in Yeah. You're a health care company and you're supposed to do some clinical diagnosis to send out a drug on time and you don't do that because the the model hallucinates, that's a real problem. Chamath Palihapitiya (01:15:45): And I I'm guaranteeing you, we have not seen the class action lawsuits that will come when those errors will eventually be made. They're guaranteed to be made. We just don't know the scope and the scale of them. So that's why I am sort of of this posture where I think we've sold in a ton of promise. I think the reality is much more tactical. It's a little bit more banal. Mhmm. I think we're sorting through the exact use cases where you can put guardrails around these error rates where it's okay and tolerable. Like, Brian will probably tell you there's some number of phone calls that just sound totally, but he's okay with that because the broader thing is okay. And error will probably so I don't know. So what Ryan Petersen (01:16:32): I talk to my customers, though. I have it calling truck drivers to offer them, you know, offer them loads, but I'm not having to talk to my customer. Chamath Palihapitiya (01:16:39): Sorry. I meant your truck drivers. But my my my point just is that I think agents are real, but I think that we are far away from that because we're still at the phase of how do you build reliable software in production for an enterprise versus the toy apps that you see on the Internet, which is like, let me vibe code something. I think these things are worlds apart still. Jason Calacanis (01:17:03): Okay, so let me get Saxon on here. And just to inform the audience, you heard Trial of Disillusionment. This comes from the hype This is something Gartner has been talking about for a long time. In case you're taking it for granted, and if you're watching, you have some sort of technology trigger like agents, you have this like peak of inflated expectations. Now we're in the trial of disillusionment. Hey, this stuff doesn't work. It's hallucinating, but we're kind of going up that's No, it works. Chamath Palihapitiya (01:17:24): It just doesn't It doesn't say Jason Calacanis (01:17:26): we're on the slope of the line. Chamath Palihapitiya (01:17:27): It doesn't, I don't David Sacks (01:17:28): see that. Disillusionment. I don't know where this is coming from. I don't even think we're at the peak yet. Jason Calacanis (01:17:32): Oh, okay. So you think we're still going up? Because a lot of people, to Shmock's point, were buying stuff and saying, hey, it doesn't work, you know, and now we're in the middle. Chamath Palihapitiya (01:17:41): Let me say differently, Saks. I think we have not yet figured out how to move the budgets from experimentation to mainline production, meaning where large chunks of The US economy are comfortable enough with the ways in which hallucinations are managed such that they will replace legacy deterministic code with this new probabilistic model generated code, meaning model enabled codes. Let's just put it that way. Jason Calacanis (01:18:10): Saxe, where are we on the slope here? David Sacks (01:18:12): Yeah. Look, I would separate change management issues, which are always gonna be important and there's always gonna be big ones whenever there's a big disruption, especially in enterprise and especially around compliance and legal and all that kind of stuff. I would separate that from the impact of the underlying technology trend. And I don't think the impact has come anywhere close to peaking it. And in fact, I would say the rate of progress is exponential right now on at least three key dimensions. So number one is the algorithms themselves. The models are improving at a rate of, I don't know, three to four times a year. They're not just getting faster and better, but qualitatively they're different. Remember, we started with pure LLM chatbots. Then we went to reasoning models. And the difference there is with a chatbot, it's like kind of a smart PhD or college student giving you an answer off the top of their heads. The reasoning models, it's more like the PhD saying, okay, let me go off and think about that. Let me do a project on that. And it could work for thirty seconds or a couple of minutes. I mean, as much compute as you wanna throw at it. And it will break down your complicated question into a bunch of sub questions, and then it'll try different approaches. And it can validate some of those approaches and come back to you with a much more impressive answer. And if you've been using like the Grok three deep research or the new ChatGPT o three to do these types of new reasoning models, it's pretty mind blowing what they're capable of. Have we even come close to figuring out how to tap the potential there, especially in an enterprise context? No. But my point is that the rate of progress on the algorithms is, again, three to four times Yeah. Let me just pull it Jason Calacanis (01:19:48): up here. Okay. Yeah. Okay. Go finish with that SACS, and then I'll I'll take it and pass it. Go ahead. David Sacks (01:19:53): Well, I was trying to lay out the dimensions of which progress is proceeding exponentially. Okay. So one is the algorithms, okay, which is not just quantitative. It's also qualitative. We didn't even get to the agents part of it yet, but that's the next big leap after reasoning models. We're just starting to scratch the surface there. Then you've got the chips. I mean, the chips are getting better at, I don't know, three to four x a year. We've gone from, you know, the h 100 to the h 200. Now we're on the GB 200. We'll be at GB 3 hundred soon. We'll be onto Root Ryan Petersen (01:20:22): and everything. Better per year, or they get better three times per year? David Sacks (01:20:26): No. No. No. They're getting the chips themselves, depending on how you measure it, each generation of chips is probably three or four times better than the last. Okay? And NVIDIA is back to rolling out new chip, new generation products roughly annually. And I'm just using them as one example. Obviously, there are other companies as well. So basically the leap from Hopper to Blackwell to Jason Calacanis (01:20:47): Got it. David Sacks (01:20:47): Rubin, I guess, will be in next year, and then I think five minutes coming after that. I mean, really an astounding rate of progress. It's not just the individual chips are getting better. They're figuring out how to network them together, like with NVL 72, it's like a rack system, to create much better performance at the data center level. And that would be like the third area where you're seeing basically exponential progress. Just look at the number of GPUs that are being deployed in data centers. So when Elon first started training Grok, I think they had maybe a hundred thousand GPUs. Jason Calacanis (01:21:16): Colossus was a hundred thousand. Correct. David Sacks (01:21:17): Right. Now they're up to 300,000. They're on their way to a million. Same thing with OpenAI's data center, Stargate. And within a couple of years, they'll be at, I don't know, 5,000,000 GPUs, 10,000,000 GPUs. Ryan Petersen (01:21:29): So I mean David Sacks (01:21:29): And you see them on the power side. Right? You're going from a hundred megawatt data centers to 300 megawatts to we're just starting to now see the first gigawatt power data centers. I don't even think they're live yet, but this is where they're trying to get to. And I don't think it's beyond the realm of possibility that we could be at five or 10 gigawatt data centers in the next, I don't know, several years. So so my point is just look. The algorithms, the chips, and the data centers are all improving or scaling at a rate of, I don't know, three to four x a year. That's 10 x every two years. Okay? Where people don't understand exponential progress is that if you're getting better at 10 x every two years, that doesn't mean you'll be at 20 x in four years. It means you'll be at a hundred x, a hundred x. So the models, the chips, and the data centers will all be a hundred times more powerful in four years, let's say, the end of this presidential So you multiply those things together, the algorithms, the chips, and then the raw compute that's available, you're talking about a million x increase, some of which will be captured in price reductions, some of it will be in the performance ceiling, and then some of it will just be in the overall amount of AI compute that's available to the economy. But the impact of this thing is gonna be absolutely massive, and I think people still don't even appreciate that fact because they don't understand exponential progress. Aaron Levie (01:22:46): And I think maybe just to square the circle, because because every everything is that that you just said, Taks, is what what I think is propelling the industry. And then the reality on Chamath's side, like like, just just to connect the dots. So we have an eval test that we do where we run enterprise data through every model to kind of figure out its accuracy rate and how much it's not even hallucination, but just literally how much data does it miss when we ask for facts. The best model in the world, actually, interestingly, we was Grok three on this particular test. We send it 500 documents and we ask for 40 data fields back from the documents. And so it has to get every single data field correct, and we only do a single pass. So we send the document to the model, we get a single pass back. Right now the best score is about 90%. And so you can imagine a number of industries where you can't have 90% accuracy if you give something a question on 40 data fields. Now, there's ways to solve it is you rerun it multiple times or you chunk up the document into smaller parts, and so it doesn't get confused by the large context window. But a lot of the people that were deploying AI a year ago or a year and a half ago weren't doing that. And so they you know, they did have a a kind of a a pilot run of something and it it kinda worked okay. And what they have to realize, back to your point, Sax, is like this space is literally exponentially changing. And so if you don't use the latest methods of, okay, you have to actually run the data through the model multiple times, and you have to chunk up the data into smaller parts, and you have to use a reasoning model, and you have to make sure that your prompt is like hyper tuned for the particular use case. If you haven't done those four things, then you probably will actually end up with a project that fails. Aaron Levie (01:24:26): And even so, even when you do all those things for even harder problems, you're still gonna run into issues. So I think the challenge is that everybody's running a million miles an hour right now, and they're trying a lot of things. Some work, some don't work at the same time that the space is actually changing at a pretty crazy rate. Jason Calacanis (01:24:43): And let's take a look at our partner polymarket and which company they think will have the best AI model by the end of twenty twenty five and get feedback from our panel on. If you think this is accurate and who you would pick here, looks like Google is in the lead here. 41% of people believe that they will have the best AI model by the Chamath Palihapitiya (01:25:06): end of the question '25. What is what is the dimension? Like, you know, we use Gemini. So for many tasks at eighty ninety, we use Gemini. It's incredible. But for most of our cogen, we use Anthropic, and Claude kicks ass. It's it's exceptional. Jason Calacanis (01:25:19): This is, based on the best scores in the chatbot arena, which just became a for profit company. So that is slightly different because people have gained those tests. So that is a rub there. People are now building their AM model for the eval unit. Right? Chamath Palihapitiya (01:25:34): All the models are way overfitted for these eval. Jason Calacanis (01:25:36): So But if you had to pick, who's your I mean, so I guess, Chamath, you're saying Chamath Palihapitiya (01:25:39): You have to take a task by task. Depends on task. I agree with What Saks said is right. So it's kind of like what what problem are you trying to solve? And then you have to ride this technology wave that is compounding very quickly. All I was just trying to get across is that the error rates have been diminishing, but not nearly as fast as you need for some sectors of the economy. Right. So you can use a model to generate deterministic code. That's great. And as long as you unit test it and integration test it, it'll be fine. But I'm saying if you're gonna use a in production in an environment where if stuff goes wrong, there are consequences. Health care. We're not there yet. Right. Don't wanna use Jason Calacanis (01:26:15): this for health care yet, but you could use it for writing or writing jokes or David Sacks (01:26:35): the the progress is so rapid in coding assistance, and I I think, you know, you're right that Anthropic with was it Claude three point seven Jason Calacanis (01:26:43): or so? Chamath Palihapitiya (01:26:44): 3 7. Yeah. David Sacks (01:26:45): Yeah. I think they're the leader. And in fact, I think the Manus demo that we showed, it's not entirely a wrapper on Claude because they actually they do a number of different things, but I think they are significantly using Anthropic for the code assistant part of it. In any event, the reason why the progress is so rapid with coding is because code compiles and you can determine objectively whether it works or not. You can validate it. And so that makes it a perfect area for AI to get better at through reinforcement learning and test time compute is AI tries a bunch of things. It sees what works. It sees what compiles, sees what the user then accepts, and then to be able to learn to iterate based on that. That's why coding right now is really the big breakthrough application and use case. But it's not gonna be the only one. I mean, math is another good area where I think AI is improving rapidly again because math, you have proofs and you can look at the results and see if it validates. Now, I think one of the big questions in terms of AI progress is how extensible is the progress to other areas that don't easily validate that way? So for example, legal work is I think a really good area for AI, but how do you validate that that are harder to validate. But I think this is one of the big questions is whether I think people just kind of assume that AI progress will be equally fast in all areas. And I think it's possible that AI gets really good in some areas, better than human. But it's sort of childlike in other areas. Jason Calacanis (01:28:41): And David Sacks (01:28:42): that's a possible Narrow up test Jason Calacanis (01:28:42): is like, make your point, right, like with a finite answer or an answer we know is the definitive Aaron Levie (01:28:48): But this is the important thing about the agent kind of, you know, let's just say, framework or architecture, you know, momentum was was instead of just saying, okay, we're gonna do a single pass through the model, and then whatever it comes back with is is we're gonna be satisfied. Like, you know, the legal work might be reviewed by another agent whose job is to review legal work. And so, we can just throw more and more compute at the problem, and we're just early in figuring out how to architect those Jason Calacanis (01:29:17): Or multiple models, right? You could have Yes. So would have Anthropic check, LGBT check, Gemini. Yeah. Aaron Levie (01:29:24): When you have some anomaly, it spits back out to the user. So human in the loop still matters in this type of process. Jason Calacanis (01:29:29): In the early days of OCR, you would have a computer say, here's the characters in this legal document, then you'd have two humans type it in, and then you would get a certain level of certainty. Chamath Palihapitiya (01:29:38): Yeah. You'll quickly find that when you layer these models on top of each other, the test time compute costs are astronomical. Jason Calacanis (01:29:44): Yep. Chamath Palihapitiya (01:29:45): And Aaron's probably dealt with this. Like, it's like I get a bill from AWS, and it's like, oh, wait. Hold on a second. I just you know, per hundred thousand this month? What's going on? So I have to get to the bottom. David Sacks (01:29:57): That by the way, is another major trend line, which is that the new applications that we talked about are all much more token intensive. So we went from basic LLMs Totally. Know, which don't require that many tokens to give you an answer to the reasoning model where you can spend a thousand times more tokens just getting one answer to a question. And now the agents are gonna be even more token intensive than that. So the amount of compute required to serve all these new applications is gonna be massive, Chamath Palihapitiya (01:30:23): which is David Sacks (01:30:24): why I think the CapEx build out actually makes sense. Jason Calacanis (01:30:26): When you do a deep research to your point, David, you're firing off maybe 200 queries and it's asking them the AI is saying, hey. What query should I ask on behalf of the user? And then you go down that rabbit hole. You it's basically on doing 200 of them at once. Ryan, your thoughts here on AI first companies and agentic computing. Ryan Petersen (01:30:43): Well, the one that I really wanted to tie back to is actually our earlier conversation on tariffs, and this is a very real use case of a of LLMs is how do you classify a product? And you'd like to get to what we see today, when we did our first machine learning based natural language classification of a product, you take a product URL listing page, a Shopify page, Amazon page and say, hey. What what classification code is this? What duty is owed? Six years ago in a hackathon, we got to, like, 70% accuracy. We're now in high nineties accuracy versus what a human trained expert will get to. But you actually get to it, which is not good enough. You know? You're wrong 3% of the time. You know, you might have committed a a violation of the law for sure. But, actually, what is truth in that regard? It's there's a lot of gray area in this. And truth ultimately is what does customs say? What does the CBP determine is correct? And those guys are using software. Jason Calacanis (01:31:36): Right. Ryan Petersen (01:31:37): That's pretty that's a very simple algorithm, and it's a decision tree that's going, okay. Is it a shoe? Yes. Is the top made of leather? Yes. You know, is the bottom made of rubber? And they just go through a very simple and that outputs it. So on some level, if you convince the government to use your LLM, it becomes true whether it's true or not. I think there's gonna be some interesting cases like that that we haven't really thought through of, like, when does the government adopt these to be the source of truth? Chamath Palihapitiya (01:32:02): Okay. All of this speaks to this thing that's gonna sound totally esoteric, but, like, we all used to shit on QA. Right? Like, the least talented engineers were allocated to QA. I think in the world of AI, it's it'll end up being the most talented. You know, we internally at eighty ninety, we call it improvement engineering, and it's a total specialty. It's similar to when I kind of coined the growth team at Facebook. I feel it's the same kind of moment where Improvement engineering is really the skill that translates toy apps and vibe coding into something that's very practical and real. And we like, and my team and the leader of this team, he's, like, steeped in things like Japanese management from, like, Toyota and quality systems. And these are all the things that matter when you're trying to just shrink the error rate down to zero so that you can use it in a reliable way. And also to document it so that if people wanna question what happened or have recompense or some some way to come back and say, hey, that that really harmed me. How do you even do that? Like, these are all very complicated issues that that will get sorted out. Super, I think, interesting. Jason Calacanis (01:33:14): Okay. Four. I gotta wrap, guys. I gotta catch a flight to Miami. Let me do a closing here if you wanna keep going. You're welcome. Two, three, Chamath Palihapitiya (01:33:21): plane just waits. Just text the pilot and just tell them you're Jason Calacanis (01:33:24): Alright. Listen. I'm not burning all the all in credits, so to speak, in all of our tokens. Chamath Palihapitiya (01:33:30): I'm kidding. I'm kidding. I'm kidding. I'm I'm wait. David Sacks (01:33:33): You're worried about flying flight? Jason Calacanis (01:33:34): Everything and then putting it on the all in budget, the rest of us are flying Southwest for your chairman dictator, Chamath Paliapitiya. David Sacks (01:33:43): A flight? It's a strange concept. Speaker 4 (01:33:45): Yeah. David Sykes, I what does that mean? David, when's the last time you flew commercial? Jason Calacanis (01:33:49): Clinton. David Sacks (01:33:49): I haven't missed a flight in about fifteen years. Jason Calacanis (01:33:53): For Ryan Peterson from Flexport, Aaron Levy from The Amazing Box, Shama Paihapatia, David Sachs, your chairman dictator czar. I am the world's greatest moderator. Love you, boys. We'll let your winners ride. Chamath Palihapitiya (01:34:35): We should all just get a room and just have one big huge orgy because they're all just useless. It's like it's like sexual tension that they just need to release somehow.