特朗普对垒鲍威尔、化解债务危机、十万亿美元的 AGI 大奖、GENIUS 法案落地

Jason Calacanis (00:00:00): So, Gavin, were you at the, Coldplay concert in Boston last night? Gavin Baker (00:00:05): Sadly, I missed that. It's Good. David Friedberg (00:00:08): Who are you with? Gavin Baker (00:00:09): Exactly. I was at home with my wife, but, yeah, Wow. How insane. Jason Calacanis (00:00:13): There's just so many layers to that story. It's impossible to get away from. It'll be seventy two hours of memes. Dave, were you at the cold play concert in Boston last night? And if so, were you with Woody, your astronaut friend? Did you take Woody to the concert? David Friedberg (00:00:32): No, counselor. I was here in Santa Cruz last night. Jason Calacanis (00:00:36): Oh, you were in Santa Cruz on a business trip? Okay. Gavin Baker (00:00:38): The funny thing is if they had not reacted the way they did, the camera would have just panned away. Yeah. Yeah. Nothing. Jason Calacanis (00:00:46): No one would have ever known. There is some great irony to the head of people and human resources being in an affair with the CEO apparently. David Friedberg (00:00:55): Allegedly. Don't jump to conclusions, Jason. It could've I He could've been cracking her back, you know, like, when you get the baptized Yes. Jason Calacanis (00:01:02): See, could've been in chiropractic. David Friedberg (00:01:03): Yeah. Chiropractic move. Jason Calacanis (00:01:08): Let your winners ride. Rain man David Saxon says, go away go. And it said, we open sources to the fans, and they've just gone crazy with it. Love you, Wes. Ice. Queen of Kinwad. Going all in. Alright. Let's get to work. It is, the slow, slow news weeks of summer, and we are delighted, delighted to have fan favorite super intelligent bestie, Kevin Baker, with us from Atreides. How are you, sir? How's your summer shaping up? Gavin Baker (00:01:40): Fantastic. It's been awesome. Jason Calacanis (00:01:42): Stock market is back. That's good for you because you invest in both public and private companies. Yeah? Gavin Baker (00:01:49): My firm does. Yes. David Friedberg (00:01:50): Yeah. Gavin, let me ask you a question. How do you price tariffs today? So where do you think this ends up? Obviously, there's a lot of back and forth and, you know, everyone's trying to make a read on what the end game is. What's your market take as you're making investments right now and where we end up on the tariff front? Gavin Baker (00:02:07): It is a good question. It's it's open. We're gonna see what happens with sectoral tariffs. I think it's it's hard. You're doing the winning AI summit. It's gonna be hard to win an AI if we put tariffs on semiconductors. But for a lot of what I do for now, tariffs are not super relevant. But, you know, for for the market, for the economy, they are relevant. But for AI, they're maybe a little less relevant because I think everyone is is maybe a little more sophisticated about the downsides of tariffs for constructing data centers here in The United States. Jason Calacanis (00:02:44): Mhmm. And, ultimately, don't we look at the tariff situation and say, despite the shock and awe of the opening salvo, it's quite a boring position now. It just seems to be reciprocity and reasonable reciprocity at that. Yeah. That's how we would sort of categorize the end game here. Gavin Baker (00:03:06): I would say for everyone but China. You know, it is and, you know, we're we've clearly reached some sort of deal with China, you know, rare earths for h twenties and m I three zero eight x's. But it's interesting. And one of the the trade deals that has been finalized is Vietnam, and there's a special carve out for goods that were transshipped from China through Vietnam. So they're clearly focused on China more than almost, you know, any other country, rightly or wrongly. But yeah. And I do think there is you know, there was maybe three months where where Trump said he did not care about the stock market, but now he's back to quoting the market at all time highs. Yes. He clearly cares and is clearly very sensitive to market feedback. So I think that that will be a dampening mechanism on tariff volatility. But, you know, they passed the bill and he immediately went back to tariffs. And, you know, we'll see where we land in August. But I just think the most important thing in the market by far is AI. It kind of overwhelms everything else. Absolutely. Jason Calacanis (00:04:15): And, I guess the other big story with the market, and we'll get into the h twenties. David Sacks will be joining us in a moment, so he'll be jumping in halfway through it. But let's start with maybe this, soft launch of the firing of Jerome Powell. On Wednesday morning, Bloomberg reported that Trump was likely to fire Powell soon after talking with Republican lawmakers. Shortly after that, The New York Times reported that Trump had actually drafted Powell's termination letter. Market instantly reacted negatively, dropped 1%. Bond yields rose about 10 basis points. You can see the blips here on these charts starting around 11:30AM when the article was published. Polymarket reported Jerome Powell out as Fed chair in 2025 spiked up to, 30% on Wednesday before dropping back down to 20%. Trump, quickly squashed these rumors. Markets rebounded, and Trump said, we're not planning on doing anything regarding Powell. Some people speculating, maybe this was Trump testing the market reaction, and she talked about earlier, Gavin, he he does seem to care about the market as most presidents do. If you remember, Trump nominated Powell as Fed chair 11/02/2017, and he has gone on a tirade the last couple of months calling Powell stupid, numbskull, stubborn, low IQ, a knucklehead, mentally average. It's a long list of descriptors of the person he placed. Powell's term ends May. White House officials have confirmed Trump is in the process of selecting his successor. Polymarket says that could be Kevin Walsh, 22%. Kevin Hassett, 19%. Scott Besson, 15%. This hasn't actually ever happened. Right? We've never had a Fed share fired. But we have inflation coming back a bit. If you all remember, there's a dual mandate for the Fed. Keep unemployment low, Check. That's pretty good. And keeping inflation under control, that's been going very well since our massive inflation spike over the past couple years. And here we go. CPI ticked up 10% from 2.4 to 2.7%, 30 basis point increase over May. So any thoughts, Gavin, on these macro issues around inflation coming back a bit, the the stock market at an all time high, and unemployment? Jason Calacanis (00:06:35): If you believe the unemployment data, and we've had a bunch of debates here about that, you know, how how correct is it being at, close to an all time low in our lifetimes? Let's go macro. Gavin Baker (00:06:46): Yeah. I wouldn't read too much into the CPI bouncing up a little bit. There's base rate effects, I think, on a month over month, basis. And if you looked at, you know, what what economists call core, super core, different, you know, ways to maybe smooth out CPI. I think inflation is still relatively contained. As far as but, I mean, a lot of very smart people are convinced that tariffs will lead to inflation. We'll see. There's certainly sound theoretical arguments for why they will, but it does look like maybe the, overseas exporters are eating a little bit more of the tariffs than than people thought that they would, which is which is good for US inflation. But, you know, the combination of a very weak dollar and tariffs theoretically should lead to a little more inflation. Firing Powell, I worry that the market only went down 1%. I do think the market would go down quite a bit more if Trump did fire Powell. I think it would be a mistake. I hope he doesn't do it. And, you know, there are very sound reasons for the Federal Reserve to be independent. And I hope he does not read from that trial balloon down 1% that that's all that would happen. Look. The world would continue spinning. America would go on, but it would be a mistake. Jason Calacanis (00:08:16): Freiberg, we have, this idea that there would be a couple of rate cuts, and maybe we get monetary velocity going again, people will be able to take more loans out, invest more in business. But with the stock market tearing it up, there's a lot of wealth being put into the system with the big beautiful bill. There's a lot of spending in there as we've talked about here. Putting that aside, it feels like the economy is in really great shape. Chances of a rate cut has now flipped. No change is now the favorite option for September, whereas a week ago, the favorite option was 25 bps. So this idea that we're gonna cut or the Fed's gonna cut, that seems to be changing as well. So your thoughts on the, the macro picture here? David Friedberg (00:08:57): So I'm not sure, like, the firing of Jerome Powell necessarily solves The US fiscal challenge, which is rising interest rates on the long end of the treasury curve. So if you look at the the thirty year treasury yield over time and, Nick, maybe you could pull this up while I'm talking. But as of today, we're at exactly 5% on the thirty year. And you can see that this 5% yield, which is what the market is demanding the United States government pay in order to be loaned the money to make the bill payments that the US government has to make every year is the highest it's been. The borrowing cost is the highest it's been since going all the way back to 2007 as of today. And I think this is the real story for The United States. We have $36,000,000,000,000 of debt. The average interest rate we're paying on that debt today is 3.3%. That's the average of all the treasuries that the federal government has issued, the treasury department has issued to borrow the money that it is using and has used to pay all its bills. And if you look at the 5% number, that's a 1.7% hike. At 3.3%, which is the current average rate we're paying across $36,000,000,000,000, we're we have a run rate interest expense. So just the money we're paying each year on the interest of the outstanding debt is $1,200,000,000,000 a year. And if this spikes up to 5% from 3.3, we're talking about nearly $2,000,000,000,000 a year in interest expense. And that number is only gonna get bigger as we borrow more money each year and the loan balance goes up, the outstanding debt goes up because we are still running a deficit. The government is spending more than it's making every year. So the crisis that America faces is a more profound fiscal crisis where the rates that we're having to pay are a function of what the market is telling us. The market does not want to loan The United States money over a thirty year period for less than 5% as of today. And so making adjustments to the short end of the treasury curve, making overnight loans cheaper, which is what the Fed can do, will stimulate the economy and make more money flow easily because now you'll be able to borrow money overnight to do stuff like build a building and then sell the building next week or next month or take out a car loan and pay it down and use your car to go drive for Uber and grow the economy and other things. So the theory is that if we can, you know, drive rates down on the short end of the curve, we'll grow the economy such that we'll be able to make those payments on the long end of the curve. But there comes a point where, again, you're only gonna be able to move the market so much until the more important fiscal situations are gonna be addressed, which is spending, taxation, and some of the other key policy issues. David Friedberg (00:11:46): So I think what the market is saying is it's not as much about Jerome Powell and, frankly, getting rid of a prudent individual may be more challenging than it is beneficial when the real challenges facing The United States need to be more heartily addressed. So I think that's my kinda take on this whole point. Gavin Baker (00:12:01): Can I Jason Calacanis (00:12:01): Yeah? Go ahead, Gavin. Build on it. Gavin Baker (00:12:03): So point number one, the thirty year has gone up since Powell started cutting rates. So that is just empirical proof that what David is saying, I think, is right. And second, the deficit has been a feature of American politics dating back to Ross Perot's, you know, 1992 presidential run. Jason Calacanis (00:12:27): His independent third party run. Gavin Baker (00:12:29): His independent third party run. Here we go. But yes. But the deficit never really mattered because interest rates kept going down such that even as our debt grew, interest expense has kind of a percentage of the government's budget stayed relatively low. Now that rates have gone up and don't seem like they're, you know, going down anytime soon, the deficit does matter, and it really matters. And you you can kind of run a a couple of scenarios, but, like, pick your pick your metric. If the deficit kind of continues at current levels and we were to refinance the debt at the prices that, you know, David was talking about, You know, it's it's only a few years before spending on interest is significantly larger than spending on Medicare and Medicaid or Social Security or the military. So pick something you care about. But, you know, our current course and speed, it's it's in the not too distant future where interest expense is the biggest line item for the government. And that is not healthy. And that's why the deficit finally matters. It's just that rates are higher. But the great thing is is there is a virtuous cycle here. Has you closed the deficit? Rates should theoretically come down. And then those both feed on each other to kind of help the problem. And it is possible. There's no silver bullet here, but some combination of slowing government spending, extra revenue, and, you know, tariffs are effectively we've never had a consumption tax here in America, which I think is a good thing because consumption taxes are very regressive. But the reality is, like, even when Obama controlled the house, the senate, and was the most popular democratic president of our lifetime, I don't think federal government tax receipts as a percentage of GDP got above 19%. So that's kind of the ceiling. Gavin Baker (00:14:33): And it for income taxes alone. And tariffs are really just a consumption tax that kind of incense domestic manufacturing. I mean, there's all sorts of reasons they're bad ideas. You know? David Ricardo, the theory of comparative advantage, 100% correct. Free trade is a good thing. But introducing some sort of a consumption tax, growing the economy a little bit faster through deregulation, and slowing government spending, I think there is a way out of this for America. Yeah. But it's important to find the way because the deficit finally does matter after really never mattering in my political lifetime. Jason Calacanis (00:15:11): It is interesting. We've never had to worry about our debt. It was always manageable because it wasn't that large. And even when it got large, it wasn't compared to GDP because the country was doing so well. We had the PC revolution. We had the Internet boom. I mean, we've had boom after boom after boom in efficiency that we've led the world. And these companies like Google or Apple take over the world and all those tax receipts and income comes into our country, that does sort of, make you not look at it. I guess I know, I haven't talked to you, Gavin, not to make this super political, but both parties have proven that they have no interest historically and in in the current one with cutting spending. It's just the nature of it. So we can sit here whether you're a Biden fan, Trump fan, put it all aside. Both parties love spending, and they're not stopping. One of our friends has proposed, hey. Maybe in the midterms, we have a couple of, these house positions, couple senators. Maybe we try to flip them and create a new party that cares about this issue. What are your thoughts broadly on that if couple of more Joe Manchin types were in the house, the senate? Could this country maybe start to make this the, the deciding issue? And maybe could we see some movement on the other two parties, some pressure on them by a third party, an America party perhaps? Gavin Baker (00:16:29): Yeah. Well, I think a few things. I do think there is room for a much more centrist party in America. You know, the way the primaries work, it, you know, leads to more maybe extreme candidates than anyone would actually want, you know, be being each party's candidate. So I think a third party would be helpful, you know, and, you know, I think there's plenty of room for a party that is, you know, kind of a, you know, fiscally conservative, you know, reasonably socially liberal, pro American energy production, all kinds of energy production, including solar, importantly. So I think there is room for that, and I think it is right that if you just target a few races, you can have a big impact. But I would just say Yeah. Humbly, I think the American party is a great idea. I just don't know that it is the highest and best use of Elon's talents Jason Calacanis (00:17:31): Oh, no. Gavin Baker (00:17:32): At this moment in time with what's happening with AI. And just, you know, to the extent, Elon is a friend of the pod, I just think staying focused AI, Mars, that might be the highest and best use of his particular talents. Jason Calacanis (00:17:49): 100100%. David Friedberg (00:17:50): Hasn't that been the case for for some time, Gavin? And anytime there's something, whether it's Neuralink or Boring Company or some other new project that there's these claims that this is a distraction away from the highest priority work that should be done? I mean, is the political stuff unique? And then his point of view on the political stuff, just like it was with Twitter, is that it's existential to society and civilization and our ability to function and to do you know, to achieve the progress that he aims to achieve in his core function. Gavin Baker (00:18:22): So, obviously, he is succeeding being the CEO of many different companies. But, you know, I think a big part of what makes him kind of exceptional as a CEO is the perfectionism, the drive, and, you know, politics is not a game of perfection. It's a game of compromise. So I am sure if he sets his mind to the America party that he will succeed, but I think there are other things for him to focus on. And, you know, The Boring Company, Neuralink, these are games of perfection. These are you know, this is about engineering. This is about solving a problem. It's not, you know, compromise in the art of the possible. So I think he would succeed. I just think that there are other things that maybe a higher calling for him. David Friedberg (00:19:12): Yeah. Jason Calacanis (00:19:13): Yeah. I mean, in the the cost of being away from his businesses this last time around, as he said very publicly, was severe. It was intense, and he's had to really regroup. But we got this incredible news when Grok four came out, and I think we should maybe talk a little bit here about what that big prize is. The big prize, I think, is most well, it's actually gonna be an open question, Freiburg. I think the big prize is whoever wins general intelligence, super intelligence, or the biggest cluster or the most power to power the biggest cluster that powers general super intelligence. So where do we sit on the language models today, Gavin, and Elon's recent? Let's just call it what it is. I mean, incredibly dominant release of Grok four. I don't think people expected that. They didn't expect him to be able to leapfrog everybody. And and let's be honest, people are leapfrogging each other every four to six months. So I I fully expect Gemini will leapfrog rock and OpenAI will have their time in the sun again as well. But this was pretty impressive. Right? Gavin Baker (00:20:18): I would say this is the biggest leap frog we've seen in quite some time. And I think the benchmarks that matter are RKGI two and Humanity's last exam where it did in in the case of RKGI two. It's called semi private, which is important because it means that some of the questions were held back because the criticism of these models is they memorize the answer. And so RKGI two, it has not seen the questions before, and it did roughly twice as good as, you know, the state of the art Google OpenAI and Anthropic models. And then on humanities last exam, you know, we can call it 50 to 75% better. You know, an exceptional human score 5% on that. It scores in the forties. So this is incredible progress, and I think it's worth mentioning this model was trained on Hopper. So this this model is probably about as far as you can take the last generation of NVIDIA GPUs. The next models we see, you know, Grok five, you know, o five from OpenAI, whatever they're gonna call Jim the next Gemini, they will be trained on Blackwell, and I think that will be a really big step function. But I do think the ultimate prize here is, artificial superintelligence. Like, I think artificial general intelligence will create a lot of economic value, But, you know and, you know, maybe we will be able to work less as humans. But I think ASI, artificial superintelligence, is what is really exciting, you know, in terms of maybe, you know, being able to live longer, you know, really kind of fundamentally kind of change the fabric of our lives. Jason Calacanis (00:21:51): Can you take a stab at explaining that difference in definition to the audience who they hear these terms and we kinda bundle them into either a transcendent intelligence that we haven't seen before that we as humans can't comprehend. It goes beyond human intelligence. Or this is the smartest human on the planet and where we are right now in this journey. Because I think these terms are all getting muddled together, and I think we have an interesting conversation here if we parse them. Gavin Baker (00:22:18): I think artificial general intelligence, I would define it as an AI that can take economically useful actions in a variety of domains and be better than the average human in most domains, all domains. But that's very different than superintelligence. K. You know, being, you know, being able to draft a contract, that's not superintelligence, but it is useful. Being able to do a medical diagnosis is not superintelligence, but it is useful. You know, being able to book my travel, so on and so forth. Superintelligence means exactly what you said, that it is smarter than any human, but it has, you know, access to all of human knowledge. And I think one of the most interesting questions is what will the economic returns to superintelligence be? And they are definitionally unknowable because we have never seen superintelligence before. If as humans, we have kind of, pushed the limits of physics, biology, chemistry, the laws of the universe, then maybe the economic returns to superintelligence won't be that high. But if superintelligence is curing cancer and inventing warp drives, then the returns are gonna be really, really high and it's fundamentally unknowable. Yeah. Jason Calacanis (00:23:30): Okay. So we're at general intelligence. Hey. Your lawyer, your tax, your accountant's gonna go much faster. They'll have a copilot. This is all gonna be great for a business. Every business gets 10% more efficient a month. Seems like a reasonable bogey, which means every seven, eight, nine months, every business is gonna get twice as efficient at these kind of chores. Yeah? Gavin Baker (00:23:52): I think that I wouldn't say that's a reasonable bogey. I think that might be a little aggressive. It's, you know, the world the world always it's, you know, I think it's a a Bill Gates quote. You know, the the world always changes less than you expect over the next one, two, three years, but way more than you expect over ten years. Yes. Just takes time for technologies to diffuse. You know, maybe really nimble startups will see some of the gains, you you know, that you're talking about. But, I mean, if we doubled productivity, I mean, that would be like an economic revolution. Jason Calacanis (00:24:23): I mean, we're seeing it in programming. I'm I I I For sure. Talk to the average developer. They, I think, would say they're getting five to 10% better a month, better being defined as faster shipping more code. Rule of 72. Hey. You know? Every year at least you're gonna you're gonna be twice as good. I think that actually seems to be happening with developers. Gavin Baker (00:24:43): I think it is happening with software. I think software is the first area where you've seen a real true kind of economic productivity impact. Generalized, a lot of companies are having incredible success with AI for customers, you know, support for sales. I think you see it more in startups than big companies, but it the impact it has had on coding is undeniable. Jason Calacanis (00:25:04): Freiberg, let me swing this around to you. We've got the superintelligence out there. We've got AGI out there. One of the things Gavin said was, by definition, you can't quantify the gains of super intelligence. That is the big prize here. That's why people are putting this much money into these kind of data centers. Yeah. In your mind, it's not just the general intelligence that would be the silver medal. People are going for the gold here, not general intelligence, super intelligence, breakthroughs that we can't imagine. Am I would you say that's a fair way to, sum up the massive interest in investing in these projects? David Friedberg (00:25:43): Yeah. I mean, I think there's something where everyone has identified this asymptotic return moment where if you get to that moment, you're limitless in terms of the upside. Is there one winner? I don't know. I don't think so. But I I would also kind of reframe this as being some binary condition that I think we're talking about it as being, quote, general intelligence, superintelligence as being on a spectrum of leverage towards complexity. Complexity meaning, like, I can do a simple task. Like, instead of writing a letter and putting it in an envelope and having some guy carry it to my mom, you know, and she gets it the next day, I can digitally get her that message instantly over email. That creates an incredible amount of leverage and solves a lot of the complexity of getting her that communication from me. So if I, as a human, said I would like to harness fusion power similar to what the sun uses to make energy, and I wanna do that on Earth, Today, we're in, call it, year forty or fifty of a research cycle of humans trying to solve that particularly complex problem. It's a scientific problem. It's a discovery problem. It's an engineering problem. And this idea of superintelligence is that it could give us immense leverage in solving that complex problem that we otherwise may be challenged to solve over decades or hundreds of years or think about one day solving a problem that would take humans thousands of years to solve. I I don't think that humans are limited in our ability to solve problems. I think we're limited in terms of time. And what intelligence what digital intelligence gives us is leverage on time so that we can now tackle ever more complex tasks that as you think about these tasks, the amount of time isn't just an incremental one year or two years, but it becomes a hundred years or maybe a thousand years. So this relates to, I think, projects around physics, around chemistry, around transportation, around biology, where we're probably fundamentally scratching the surface today and where the superintelligence is an enormous leverage creator for us. And so I don't view it as some, like, species or race that independently persists in its own intentions, but it is a tool that provides leverage in a way that is orders of magnitude greater than the leverage we got from yesterday's digital tools and probably today's AI tools and probably tomorrow's general intelligence tools is kinda how I would I would think about it. And, you know, maybe it's because one model does so much stuff better than any human. David Friedberg (00:28:26): You can call it superintelligence. But I think functionally, leveraging into complexity is is where this becomes super compelling for humans. And it's why I think we can and should be highly optimistic about living very long lives and traveling anywhere we want and having abundance in food and having abundance in resources and having abundance in recouping our time to do the things we wanna do instead of the things that we have to do today because we don't have access to this incredible leverage. So that's where I get kinda I love Jason Calacanis (00:28:56): it, Friedberg. I think it's a great way to look at it. But I wanna go back to the silver metal here in this sort of competition. Gold being superintelligence, we start solving fusion and really big problems on deep research cycles, and the velocity of that goes up. But just going back to the silver, you know, everybody in the economy becomes, I don't know, single digit, it's more efficient every month and, you know, some amount every year. I've been trying to back of the envelope what I think the value is for a human being in the West, in the modern world, and what they should spend on AI per month. I've come up with a number of about 75, a $150. Somewhere in that range is a no brainer to spend on your AI per month as an individual working in the world. If that's the premise, right, I think there's a billion people in the developed world who could spend, let's call it a 100 a month, 1,200 a year. Doesn't take a genius to figure out this is a trillion dollars in revenue based on market cap. That's probably $10,000,000,000,000 in market cap. And then we just have to back into the spending of what it costs to build this. You're doing these kind of calculations, I'm sure, at a treaties. Yeah? And and where this general back of the envelope that I've come up with in my mind for a mental model that there's a $10,000,000,000,000 prize, a trillion dollars in revenue just in the silver medal, does that jive with the spending we're seeing today? David Friedberg (00:30:39): Each of twenty seventy. Jason Calacanis (00:30:41): Yeah. Is that is that 70,000,000,000 they're putting in this year gonna be repeated for the next five years? So it'd be 350,000,000,000? David Friedberg (00:30:47): If you look at TBD? Gavin Baker (00:30:48): If you well, yeah. TBD, the future is always uncertain. Yeah. But, you know, if there are economic returns to that, they will keep doing it for sure. Something interesting is, you know, AI is, you know, as we've discussed in previous all ins, extremely compute intensive. And it's just at no point in my career as a tech investor except the very beginning, which was kind of the end of the PC wars, which Dell won by being a low cost producer, going direct, cutting out the working capital, you know, the components in a PC depreciate. So if you have to go through a store, where where it sits on the shelves, you're at a big disadvantage from, you know, either a, you know, call it a cost or quality perspective. But at no point in the twenty five years I've been a tech investor as being the low cost producer mattered. Being the low cost producer is really gonna matter in AI because, at some level, the amount of tokens you produce is intelligence because of test time compute, you know, post training reinforcement learning. And so if you can produce those tokens at a lower cost, you'll have a big advantage. You know, if for that 75,000,000,000 or 30,000,000,000 or 50,000,000,000 that you're spending per year in CapEx, you can produce more tokens. That is a profound advantage. I don't like your your calculations, like, just has a back of the envelope, you know, kind of scratch. They seem reasonable to me. Jason Calacanis (00:32:11): The trillion dollars a year in revenue because of AI seems quite reasonable when you frame it as a thousand dollars for a person to be whatever thirty, forty, 50% more efficient at work every year. Gavin Baker (00:32:25): Yeah. And it's just you we could probably go back and look at kind of like the early days of, you know, cell phones and what were people willing to pay relative to disposable income. Jason Calacanis (00:32:33): Your PC analogy would actually be the perfect one. A PC at back in the air that era was, what, $34,000 per person. They lasted for three years. So it's exactly a thousand a year. David Friedberg (00:32:43): But this is why this is why creating such delineated distinction between different types of AI, I think, is is also, like, the equivalent of trying to create distinctions between other types of technology. So the the automobile, the airplane, the telephone, the computer, all of these technologies are tools that created leverage, leverage on things that were otherwise complexity and reduced them down to simplicity from a human perspective. Pick up the phone, make a call instead of giddying up on your horse and going across the country to deliver a message or using a computer to do a spreadsheet that calculated everything for you rather than calculated by hand and so on and so forth. Like, all of these tools reduce complexity to simple tasks for humans. And the ever increasing complexity of what we can accomplish with digital tools is, you know, continuing in this kind of era now. But that's why I think it's very similar, Jason. Like, we this is not some new concept. It's it's the continuation of human productivity. It's the continuation of the improvement of what humans can do and what we can produce, what we can and and, yes, there's a concept now that intelligence has become such a like, it's caught up to everything. But and, Gavin, I don't know if you think that there is this concept of some moment of singularity, but it it does feel to me like there's just extraordinary leverage that's being created that feels similar to yeah. Gavin Baker (00:34:09): For sure, that's true. I hope that's true. I hope your vision of it being a productivity enhancer for humans is correct. You know, I do think, you know, people deep in AI do think there's some probability that it goes sideways. But I hope I I hope that you're right. But coming back to to Jay Cal's, you know, $10,000,000,000,000 prize and, you know, relative to, you know, the market caps of the companies involved, it it it needs to be at least $10,000,000,000,000. Something that I think is is interesting and and and relevant, particularly to Croc four being the best product, is the best product doesn't always win in technology. Jason Calacanis (00:34:46): No. Beta max. Yeah. Gavin Baker (00:34:48): In sports, you know, they say, defense wins championships. And on the Internet, distribution wins championships. And Grok four has formidable competitors with lots of distribution. And Google and Meta. Meta, they Microsoft. Get their act And so from an industrial logic perspective, something that I think makes a lot of sense, particularly since OpenAI bought Johnny Ives hardware startup, which will place them into competition with Apple at some point, is x AI and Apple are natural partners. There's been a lot of news about Apple thinking about buying Perplexity or Mixtrawl, but that's just a Band Aid. Those companies don't get Apple what they need, And Apple's had an incredible partnership for many years now with Google that's generating tens of billions of dollars for both companies. And I think there is solid industrial logic for partnership. You could have Apple grok, safe Grok, whatever you wanna call it, you know, so that Apple feels comfortable. And that probably also helps Grok in the enterprise. And then it also helps both Apple and Google with this DOJ trial. And so I think in this, you know, incredibly high Elo chess match that is being played between the leading labs, like, that is that partnership makes a lot of sense for both companies. Jason Calacanis (00:36:11): First time I've heard anybody sort of make that natural connection. But you're right. Eric Schmidt and Steve Jobs at one point had this discussion, which was, hey. We've got search, and you've got a browser now because the iPhone didn't have a browser, you know, or or, you know, and they could have built their own search engine. They could have partnered with Yahoo, but they decided to make this long term partnership with Google. And man, that dropped what, $2,030,000,000,000 to the bottom line at Apple and cemented Google search franchise. Gavin Baker (00:36:40): Absolutely. And right now, that deal is being litigated by the DOJ, and the DOJ is considering remedies. And so if you bring on a really kind of effective, credible AI provider, I think it could help both Google and Apple with their antitrust issues. And at the end of the day, you know, Google, they have Android in their Pixel phones. OpenAI is making hardware. Anthropic is kind of a captive of Amazon. Meta is kind of a, you know, they're they're in a death match with Apple. So I think there is really sound logic for that partnership. Think it'd be good for both companies. Love to see it happen. Jason Calacanis (00:37:22): It feels to me like the interface is gonna be the browser. I know this sounds crazy, but I've been playing with the Comet browser from Perplexity. Did you play with it yet, Gavin, or look at some of the demos? Gavin Baker (00:37:32): Yeah. And I What Jason Calacanis (00:37:34): just are your thoughts here? Because it's really and and then ChatGPT just launched a virtual desktop that pops up to go do your, you know, little web based scrapes, agents, assignments, whatever you I'm gonna call it assignments, you know, homework, chores. Go to your chores. What what are your thoughts on this modality? Gavin Baker (00:37:57): Yeah. The browser is part of distribution winning championships. Apple has Safari. Google has Chrome. And if you're not gonna strike a partnership with one of those distribution channels, you will eventually need to do your own browser, and you can extend that logic, you know, all the way. You know, that's why they Google, they did a browser, they did a phone. But I also do think the, you know, the companions from Grok have been interesting to play with, and they certainly make it more engaging. Jason Calacanis (00:38:26): That becomes the agent. It's a kind of incredible mind blowing concept for that to be the interface. Alright. Listen. Here we go. Calling in live. Got a breaking bestie coming on board here. David Sachs calling in live. I I see the pale yellow paint, and an ancient building. You must be in some sort of wing of the great White House. Is that correct, David? David Sacks (00:38:55): I am. Well, I'm actually not in the White House per se. I guess I'm on the White House grounds. We're in the, Eisenhower Executive Office Building. That's where my Jason Calacanis (00:39:02): office. I can tell from that people David Sacks (00:39:04): have been here. Jason Calacanis (00:39:06): Yeah. No. I they said great things. I and I checked my calendar. David Friedberg (00:39:10): I'll I'll send you some photos. It's great. Jason Calacanis (00:39:12): Well, no. But the calendar's wide open between now and the allinsummit, allin.com slash yada yada yada. So the window's there, Sachs. The window's wide open, And I'll see you in the cafeteria, I guess. David Friedberg (00:39:22): Play your cards right on stage next week, JKL, and you might get invited after the JNBIA Summit we're doing. Yes. Absolutely. In DC next Wednesday, which has been publicly announced. So it's gonna be exciting. Jason Calacanis (00:39:33): David, you, you brought a friend today. Maybe introduce your friend and tell us, what you got done. What have you gotten done in the last week for the American people? They wanna know what because you weren't here last week doing the pod, so you must have gotten something done for the American people. Let's hear it. David Sacks (00:39:47): Well, first of all, this is the czar behind the czar, Bohynes. Okay. He's the executive director of the president's working group on digital assets. So that's the working group that I chair, but he actually does all the work. He's the executive director and he's here every day. And he's been working on crypto pretty much nonstop since we started the administration. And he's kind of the unsung hero within our operation here on these two bills that just passed the House, which are historic and quite momentous. Jason Calacanis (00:40:26): So, Bo, welcome to the program. And, maybe you could tell us a little bit about these bills and what they do for the American people. Bo Hynes (00:40:35): Yeah. Well, first of all, David, you're you're too kind. We've had a blast working together. I mean, we connected back in transition, I think, in late November, and we started mapping out a plan for this. And to see it come to fruition this week is is really like it's unbelievable. The fact that we had the bipartisan votes we did today in the house is remarkable. It's unprecedented, and it shows you that, you know, leaders on both sides of the aisle understand that our country has to be at the forefront of this technological development. But let's start with genius because I think genius is really the foundation for everything else we can build upon in this space. A lot of industry cares about market structure as do we, and we wanna see it done on the president's desk as well. But Genius is unique because it really updates the payment rails inside of our current financial system. I mean, the payment rails have been archaic, and I've likened to the fact that the ways in which we've communicated have changed quite dramatically over the course of the last several decades. The ways in which we move money really haven't, and we have the technology there and blockchain technology. So what we're doing here is we're fixing the plumbing of our financial system We're securing US dollar dominance for decades to come. If you want to access our capital markets, you're going to have to use a dollar backed stable. You're also providing a pathway for tokenization of public securities in 20 fourseven markets and the things that people have dreamed about for quite some time. This is a revolutionary piece of legislation, and the fact that it had this much bipartisan support is incredible. It's a testament to President Trump's leadership. It's a testament to our fantastic AI and crypto czar, David's leadership. I mean, he's truly been the guiding star behind the ideology and what we're pushing here. And, you know, he has a phenomenal team as well. Bo Hynes (00:42:14): I mean, I'd be remiss not to thank Tracy, who's David's chief of staff. I mean, in the midst of all of the chaos to get this done, and, like, there were so many steps Bill Hagerty (00:42:23): to this, we had to Bo Hynes (00:42:24): beat the banking lobby to get it past the senate. Then it moved over to the House in which we had to to to basically fight some members that that really misinterpreted or misunderstood what this bill actually did. And the president stepped up. David stepped up in an enormous way. Wouldn't have happened without either of them. And so now we have this bill heading to his desk tomorrow. And to pivot to market structure really briefly, this provides, like, the rules of the road for the exchanges, the brokers, everyone in this space. They desperately need it so that we can break down the wall between traditional financial institutions and these digital asset players. I think that's that's well underway. Obviously, you know, getting a vote as strong as they did in the house is indicative of what can happen in the senate. If we deliver on these two pieces of legislation, I mean, that's about 90% of what needs to be done for crypto to make The US crypto a capital of the world. And, you know, it's it's just remarkable. I mean, we're we're over the moon. Jason Calacanis (00:43:17): Okay. Sachs, you got these two things over the finish line. Congratulations on that. Lots of compromises you had to make. So I wanna get into what were the compromises to get this done. David Sacks (00:43:27): Just to clarify one thing when you say finish line. So like Bo was saying, there's two bills. There's the Genius Act, which is the stablecoin legislation. And then there's the Clarity Act, which is market structures, basically all the other tokens besides stablecoins. Where we are is that both passed the House today, but Genius has already passed the Senate. So it is going to the president's desk tomorrow, and it will become law. We're doing a bill signing with the president. By the time this pot is released, it will probably be law. I think we will have the signing. Clarity started in the House, and so it has passed the House, and now it's going to the Senate. And they still have to do their hearings and markup on it, and we expect that'll happen over the next couple of months. In fact, the chairman of the Senate Banking Committee, Tim Scott, has said that he wants to finish with the market structure legislation by the September. So if all goes well, then we could be looking at a second bill signing in, say, October. And like Bo said, that would be pretty much the crypto industry's wish list for having a clear legal framework in The United States for both stablecoins and other crypto tokens. So it's really pretty amazing. I mean, when I started this job, I'll just tell you, one one of my friends in Silicon Valley said that, you know, you may be able to get some AI things done, but you'll never get anything done on crypto. And the reason is because the entrenched interests are too powerful, and they'll stop it. The banking lobby will stop it, or Elizabeth Warren will stop it, or just all the status quo players who could get disrupted by blockchain based technology will somehow find a way to stop it. And that didn't happen. Like, we've actually now moved forward. Genius is about to become law, and I think Clarity is looking like it's gonna have the votes in the Senate as well to become law. So it's really pretty amazing how much progress we've made in just six months. And like Bo said, this really comes down to president Trump's leadership. He made the promises during the campaign to prioritize crypto, to make The United States the crypto capital of the planet, and it was his negotiating skills and deal making that made this all happen. I mean, this past week has been a little bit of a roller coaster. David Sacks (00:45:43): There were reports over the last couple of days that the whole thing was falling apart. And would it happen? There was a moment, I think this has been publicly reported, but to give you some color on it, is there were 12 members of the House whose votes were necessary to advance the bill to this vote today. And at a certain point, President Trump brought him into his office, the Oval Office, and worked out all the differences personally. And that's what put this bill over the top. If it wasn't for the president's direct involvement and action and understanding of the issues, he listened to all the concerns and he paid attention to the ones that were real and then rebutted the ones that weren't. If it wasn't for his direct involvement, we would not be here today. Jason Calacanis (00:46:25): And he understands crypto. He's involved in it. He's seems to have an understanding of the value of stablecoins for the US dollar. That seems to be a key motivator for this being bipartisan. You got twice as many democrats as you thought you would get. Is that because people wanna make sure the dollar supremacy gets locked in in stablecoins as a way to do that because you can't have a stablecoin unless it's backed by a dollar? David Sacks (00:46:50): Yeah. I mean, like I've talked about on this show before, it shouldn't be that hard to sell regulation to Democrats. I mean, what we're doing here is providing a regulatory framework for the industry. They didn't have one before, and that's why the number one stable point player in the world right now is an offshore entity. They will have to come onshore as part of this bill in the next three years. So what we're doing here is creating a regulatory framework. But the reason why it's substantially bipartisan is because the industry wants this regulation because they want the stability it gives them in terms of having that legal authorization. They want to make sure that if, you know, four years, eight years from now, twelve years from now, whatever, there's not some new Gary Gensler who comes in and turns the whole industry upside down because he doesn't like some aspect of what they're doing, and he just starts prosecuting them, which is what the industry experienced over the past four years with Biden's war on crypto. So we, meaning that the Trump administration could fix the the Gensler issues just with agency rule making, and we're certainly on that path to do that. But if you want long term stability that goes beyond just this administration, you have to get legislation. You have to canonize it into law. And that's why the industry was so interested in getting these bills passed. So I think that's why you're seeing some bipartisanship here. Like Bo said, I do think that there's a substantial number of Democrats who understand that this technology is the future, and it's a positive thing for The US. What could David Friedberg (00:48:15): be bad David Sacks (00:48:15): about allowing digital dollars, which extends the dollar's dominance online so that it basically bolsters the dollar's status as the world's reserve currency. Over time, as we get challengers from Brix, for example, this is gonna make the US dollar stronger. And every time a dollar token trades somewhere in the world on a crypto wallet, there has to be a physical dollar in The US bank account invested in a US treasury. And that creates demand for our debt, which is another positive thing. And there have been studies done that show that the results of this bill could be trillions of dollars of new demand for our debt, which is only a positive thing. Jason Calacanis (00:48:56): And if you don't allow a legal way to do this and you don't have a proper framework, you have you've been dancing around, this person who has three years to get their act together. That's Tether. I'll say it. You can type you can do a search for Tether controversies or, shenanigans, and you'll find plenty of them. David Sacks (00:49:11): I don't think it's fair to say they don't have their act together. I think they have their act together. It's just that they did not know how they'd be treated operating onshore in The US under Gary Gensler and the Biden administration. And so they operated offshore. And and and what was happening under the last administration is that the last administration, by creating all this uncertainty and doubt, was driving all the innovation offshore. Jason Calacanis (00:49:37): Okay, fine. I they have a sorted past. That's my statement, not yours. But now they have to clean up whatever messy stuff they have in their past. That's me saying it, not you. You can have your opinion. I'll take mine. But I we're we're in agreement that if you don't have a framework, they would be doing even more things that were maybe off the reservation in my mind. Gavin, any thoughts here on crypto? I'm not sure you've participated in it particularly because it didn't have a framework. Yes? Gavin Baker (00:50:02): I would just say, one, David, congratulations. Seems like an incredible achievement. Two, I try to invest in areas where I feel like I I at least believe I have some sort of competitive advantage, and it's not clear to me that I have any sort of competitive advantage in crypto. But three, David, I am curious for the stablecoins, is it does the Genius Act limit them to dollar backed stablecoins? So it's not like you can create the stablecoin and then swap in something other than a dollar. Is that is that true? David Sacks (00:50:34): Well, I mean, anybody can create a stablecoin that's backed by anything. And in fact, I think there are, like, euro backed stablecoins out there, for example, but nobody uses them. I think if you look at the stablecoin market share, it's like 98% US dollars, 2% Euros, because there's a flight to quality. Mean, everyone wants to use the best one, right? And this is why it's in the interest of The United States to basically enable this technology to continue flourishing is because as the best fiat currency, we're the one that's going get used the most. There's no reason to have multiple fiat stablecoins, not really. So this is going accrue to the benefit of The United States. Jacob, let me go back to something you said. So I don't necessarily agree with your criticisms of that particular company, but where I will agree is that this bill will provide additional comfort for consumers and additional protection for consumers because now all the stablecoin companies will have to operate in The United States. They'll be subjected to quarterly audits. And we will know that every stablecoin that's been issued is fully reserved or backed up by a dollar in a US bank account. And so therefore, when a stablecoin holder eventually wants to cash out and they go to basically an off ramp, the money will actually be there. Now, I'm not saying that the money isn't there with any of the current providers. In fact, I think it is, but now consumers will have the additional protection and confidence to know that all these entities have been audited, they've passed these audits, and they're regulated entities under US law. And that creates confidence for the market, and it's good for everybody, and it will spread the adoption of this stable coin product. Jason Calacanis (00:52:20): And if they don't, they can't participate in our market. Right? So that's the the good news here is, you know, if you choose to not go through those audits and you do attestations or other Fugazi, Fugazi stuff offshore, you know, not saying anybody's doing that, but people have, you know, then you just don't get to participate. And and this is the great thing about having some basic rules of the road. We should talk a little bit here about infrastructure sacks. You were in Pittsburgh this week. There were some announcements. This was another bipartisan win. Think Shapiro was there. A bunch of investment going on there. Maybe tell us a little bit about the progress made in Pittsburgh with regards to AI and infrastructure. David Sacks (00:53:00): This was a energy and innovation summit that was organized by the Pennsylvania senator Dave McCormick and his wife, Dina Powell McCormick. And they did an amazing job bringing together all of these different companies and interests that have a stake in energy in Pennsylvania and the development of AI. And Pennsylvania is, I think it's the number two energy producing state in The US. It has tremendous amounts of natural gas. They feel like they can expand that. I think there's been a lot of fracking in the past there. For example, they even have nuclear Westinghouses there. And it makes sense to have the data centers near the power source, right? And so we know that these big AI data centers can be powered by either natural gas or nuclear. And so Pennsylvania just makes a lot of sense as a place to build this AI infrastructure. So this was a summit to announce new investment in Pennsylvania, something like $90,000,000,000. President Trump was there to keynote the summit and talk about these investments. It's his policies towards energy that he started describing long ago. I mean, remember, he made the campaign promise of Drill Baby Drill. He's been talking about the need for energy expansion in America for many years. And I think he was very farsighted in seeing that energy is the basis for everything. It's the basis for AI. It's the basis for all other kinds of growth. So by promoting energy dominance, we also get AI dominance. And we've talked on this show before about how we're going to need that energy to power the electricity of all these new AI data centers. So this summit brought together all these different groups. And the thing I thought was really interesting, the thing I learned from it was just how diverse the business interests are that are gonna participate in this whole AI boom. It wasn't just big tech. Yes, Ruth Porat from Google was there. It's also small tech. David Sacks (00:54:52): There was hardware companies. There were robotics companies. But there were also these energy companies. There was nuclear. There was gas. The trade associations were there. It's construction. It's electricians. It's carpenters. And so there's a huge diverse array of different parts of the economy that are going to experience growth from this AI boom that's taking place. It's not just a Silicon Valley thing. So that was what I took away from Pittsburgh. And it was really cool experience being there. Jason Calacanis (00:55:18): Thought there were two interesting notes as well. Hydro, I saw Google was investing in hydro and upgrading some dams there. This is, I think Gavin, one of the great upshots of the AI boom is that the AI companies, whether it's Meta or Google, they're so motivated that they'll actually go and upgrade the infrastructure. They'll invest in the, you know, small modular nuclear reactors that are coming and, even gas turbines. Obviously, natural gas is is a major part of this as well. And and you saw that up close and personal with the build out of Colossus. Yeah, Gavin? Gavin Baker (00:55:55): Yeah. Absolutely. I mean, electrical production is fundamental to AI. If we do not significantly increase kind of domestic energy production and electricity generation, you know, we are already at a disadvantage to China. And I do think we want to close that kind of electrical generation gap as quickly as we can. You know? And natural gas is great. Nuclear is great. Solar is great. Batteries are great. We need it all. Jason Calacanis (00:56:22): Yeah. All of it. And Saxa, I saw your favorite governor, Josh Shapiro was there, and, he was being very positive about finding common ground on energy, economic development, and, saying, hey, this is like a great example of bipart bipartisan efforts to collaborate. So maybe you can talk a little bit about that because you had two great moments of collaboration between the Trump administration and the Democrats. This is, this is good for the American people. Yeah? Both on the crypto project and on AI in Pennsylvania. David Sacks (00:56:53): I have never met Shapiro. I did see him there at the event, but I didn't see him on the stage. I don't know if he was part of the roundtable, so I don't know exactly what his status was. But what's interesting about Pennsylvania right now is that it's a state that's turning red. So you see that Fetterman, who's probably the most right wing member of the Democrat party in the Senate, and Josh Shapiro obviously is tacking towards the center because they see the direction of travel in Pennsylvania. So yeah, I think you've got some centrist Democrats in that state. Jason Calacanis (00:57:24): Yeah. Working out pretty well. Gavin Baker (00:57:27): Josh Shapiro, every two days, tweets something about how he's deregulated something. He's made it easier to do business. Like, is he's on the program. Seems like a sensible man. Jason Calacanis (00:57:39): Yeah. 100%. David Sacks (00:57:40): I'll just give a final shout out to Bo here for all the work that he did on Genius. I mean, he's kind of the unsung hero. Jason Calacanis (00:57:47): How are you, how are you doing all this while finishing up your degree? When do you when do you graduate from college? The kid looks like he's 20 years old. How old are you, Bo? Bo Hynes (00:57:55): I have the baby face. I'm 29, turning 30 next month. Jason Calacanis (00:57:59): Look at you. 29 in the White House lead and working with David Sacks. This is a dream come true for you. Bo Hynes (00:58:05): It is. I mean, David's been incredible. I've learned so much from him. Just the way that he negotiates and the way that his his brain works has been it's it's been a blast just to be a part of it. But I have a 10 old now, so I should have bags under my eyes, from lack of sleep. But, Jason, I'll make one more point before I jump off on the Tethr topic. The one thing that I think your viewers should know is this year, they'll be the fourth largest purchaser of US Treasuries. And I think that's something that, you know, we should really contemplate. You know, I agree with David's sentiment on this. I'm excited to see what they do here in The US. I'm glad they're going be a part of our system under the regulatory regime, but so will everyone else. And I think that's a great thing for our country. It allows us to have control. Jason Calacanis (00:58:45): That's great that you guys are backing them up because they've been banned so many times by other governments. I'm glad you got their act together. I'm gonna I'm gonna keep on those Tethr guys until they get their act together. So David Sacks (00:58:55): Keep qualifying that you speak only for yourself. Jason Calacanis (00:58:58): I only speak for myself. I've been following that Tethr story for a long time, and I think it's great. David Sacks (00:59:04): I want to make this point. I always know that our critics have never actually watched the pod they start talking about the all in point of view on something, right, as if there's a singular point of view from the all in pod. You know, it's like the all in pros, whoever thinks something. When anyone who's watched the show knows that we've been fighting like cats and dogs for years, and there's four distinct points of view. And sometimes we agree, but there's almost always some disagreement. So David Friedberg (00:59:34): We Jason Calacanis (00:59:34): we've disagreed about this issue. We also, Trump and I, as you know, are relentless supporters of Ukraine. We believe we should be giving them weapons and support. And, David, you happen to disagree with me and our president on that. You've had a different position historically. So here we are. David Sacks (00:59:52): I'm gonna stay in my lane on that one. Gavin Baker (00:59:55): David, can we talk about the h twenties, or would you rather not? Because I feel like you have been, like Let's go. So dead right about this. And I am you know, I it seems like the export, they're gonna get the licenses, and that is 100% the right decision for America. And I do give you credit for championing that. I'm happy to talk about why I think it's great, but would just, know, Jason Calacanis (01:00:19): if Can you frame it for a second for the audience, Gavin? What we're talking about here, NVIDIA, obviously, was banned from selling their latest and greatest to China and even the last generation, the h twenties. And, obviously, that creates, an opening for Huawei and and other players Yeah. To create competitive products as opposed to using the standards built here in America. Gavin Baker (01:00:40): Yeah. Well, I think, I mean, I think you said it well. But first of all, it's not the latest and greatest. The h 20 is not the latest and greatest. We're not gonna I don't think we're gonna let the latest David Sacks (01:00:49): It's not even the last gen. It's a deprecated version of the last generation. Bill Hagerty (01:00:53): Right. Jason Calacanis (01:00:54): Yeah. So remnants. David Sacks (01:00:56): It's a less powerful version of the hopper chip, and now they're on to Blackwell. So it's anyway, Gavin can explain. Gavin Baker (01:01:03): Yeah. It is. It's many, many years behind. But while it's many years behind the kind of state of the art here in America, it is, I think, kind of devilishly clever because it's, call it, two years ahead of kind of the chips from Huawei. And so it kind of gives America an advantage while preventing China from developing kind of a domestic NVIDIA alternative. And the real threat is because China, they do have more electricity. They can do things that we cannot do here in America. You know, the Blackwell racks are exquisitely designed to be as power efficient as possible. If you don't care about power, you can make very different kind of design decisions. Huawei has something called the CloudMatrix three eighty four, which uses fiber optics instead of copper to link the chips together. And while it's not nearly as power efficient as the Blackwell NVL 72, they have all the power they need. And so I think it's very it's it's it's a smart decision for America to sell this chip that gives American advantage in AI and keeps China from developing kind of their own domestic alternatives, which could eventually kind of challenge, you know, NVIDIA, AMD, you know, other kind of American AI accelerator champions globally. We don't want that that to happen. So I thought it was a mistake when they banned the chips, and I'm really happy and think it's really good for America if that is being reversed. And kudos to you, David. David Sacks (01:02:32): Gowny said it so well. I don't think I have anything to add. Gavin Baker (01:02:35): Can I just say one thing on crypto? You guys can put it in or not, but it I saw it as interesting, David. I was always worried about stablecoins as a risk to the dollar, but I think you make a very good point that when you are the dominant currency, they entrench the dominance. And I just should not thought of them that way. David Sacks (01:02:53): I think what's gonna happen with these dollar based stablecoins is they'll start being used all over the world. Let's say that you're in a country, maybe it's a developing world country, where the fiat currency is not trusted, and now all of a sudden you can transact in dollars using a wallet on a phone, you know, and the merchant also has a wallet on a phone, now you can just transact in dollars, you could see a large portion of these economies dollarizing from the bottom up. Because again, once you have your choice of fiat currencies through a stablecoin, why wouldn't you just use the best one? And that that's what I think is really interesting. So I do think it extends the the dollar's dominance internationally into the online realm. Yeah. Jason Calacanis (01:03:35): And and previously, people were basing their stablecoins on a basket of assets. Some treasuries, some real estate investments because they were seeking yield, Gavin. So they would buy real estate or, you know, short term, long term treasuries. They might put equities into it. They might keep some in cash, and none of that was known. And so that's where this big fear came. Hey. These things are getting pretty big. There's obviously a demand to use us this concept of a stablecoin. But what if there's a run on the stablecoins? And that was always the big fear with various players which what if everybody wants to withdraw their stablecoins? Are there enough dollars or liquid assets in there? And that's where I think certain players have maybe, you know, moved the asset allocation. And in order to be in The US market, Tether's gonna have to be a 100% in treasuries. Right? They're not gonna be allowed to be, say, in real estate. There was a, you know, concept that maybe they were buying Chinese paper for real estate back in the day, and people were concerned about that. So this cleans all that up, and they have an easy path. But you can't make interest on it. That's actually a very interesting portion of this. So that will have to come at a later time so the banks don't lose anything here. Right? David Sacks (01:04:46): Well, just to just clarify one point on that. One of the concessions that was made to community banks is not to have an interest feature because the community banks were worried that this new stablecoin industry would put them out of business. I think that that fear was wildly overblown on their part. I don't think that's what's gonna happen remotely. But when you have a new technology like this in a very established industry, you can see why maybe they'd be afraid. But the bill allows for all sorts of marketing, promotions, rebates, that kind of stuff. So maybe it's not called interest, but there there are mechanisms to create, let's say, rewards for stablecoin holders. So it's not as, like, black and white as just, oh, there's, like, nothing a stablecoin issuer can do to attract or incentivize or reward one of their holders. It is a dimension they could compete on. Jason Calacanis (01:05:39): So maybe if I were to buy $10,000 worth of a stablecoin, I could get mileage like points or maybe a load in gift card or David Sacks (01:05:47): Maybe on the map. Yeah. We have to interpret the language, but the mechanism is there. Jason Calacanis (01:05:52): Okay. Well, there you have it, folks. Alright. Reporting from our capital, David Sachs, our czar of AI and cryptocurrency. I'll see you next Wednesday in DC for a very important summit. David Sacks (01:06:07): Alright. Besties, I'm here at the White House with senator Bill Hagerty from Tennessee, the principal author of the Genius Act. He, I would say, along with the leadership of president Trump, are the reason why this bill happened. And then we have stablecoin legislation just signed into law by president Trump. Bill, you did a phenomenal job. I got to observe this whole process, and you really played the critical role. You're a very skillful legislator, crafting delicate compromises. You were kind of the glue that held the whole thing together. Congratulations on getting this done. Is this your first bill that you've gotten done as a senator? Bill Hagerty (01:06:38): It is. I've served in the Senate for over four years, but we were in the minority for the past four years. So this is the first opportunity since the Senate was taken by the Republicans to actually drive legislation through. The And fact that we have the House of Representatives, the Senate, and the White House made this possible. It was just a threshold concern. We worked so hard, as you know, to retake the Senate in 2024, to retake the White House in 2024, and hold on to the House of Representatives. It worked. That's the only thing that's enabled us to deliver this type of meaningful legislation. And I say this too, it's been a great team that has done this. I may be the author of the legislation, but the leadership that you've brought to bear from the White House coming in and donating your time from the private sector working as a volunteer here, but making certain that the leadership and the vision is present here at the executive branch, you've been absolutely great. And that vision I think is carried forward into the Senate, the House. More and more people are understanding this and catching on. And I think what we've done today is launch the catalyst for what's going to make America the crypto capital of the world. David Sacks (01:07:37): Yeah, it's been really amazing and interesting for me to watch this whole process. They say that you shouldn't watch legislation or sausages being made. But earlier in the week, the media was reporting that this bill was dead because there were a dozen holdouts, and President Trump made calls late into the night. He gathered people into the Oval Office. He cajoled. He twisted arms. And he also persuaded, and he got us over the finish line. Well, was pretty Bill Hagerty (01:08:05): think the founding fathers made it actually quite difficult to legislate for a reason, but it is difficult. It's taken months upon months to get to this point, and legislation, the Genius Act has been killed a couple of times in the media. Elizabeth Warren declared victory early on that she'd killed the bill. That didn't happen. She didn't have the juice to do it. But there have been many, That's many David Sacks (01:08:24): a big deal because until now, the crypto community's been living under Elizabeth Warren's reign of terror. Bill Hagerty (01:08:29): That's I mean, exactly she David Sacks (01:08:30): basically was calling the shots during the Biden administration on crypto. And I was there when the Genius Act passed the Senate, I was up in the bleachers or whatever, and she was not happy. I mean, there were photos of her and she did not like losing. Bill Hagerty (01:08:44): There's a fundamental reason for this, David, because Elizabeth Warren and her crowd want to see a central bank digital currency. What they want is control of our transactions. They want the ability, they're the ones that wanted to get to a $600 threshold for your Venmo transactions reporting everything. They want the ability to do choke point three point zero. And if you think about it, they had visibility on our transactions, the ability to centralize and control them. They can control our lives. That may be okay for the Chinese Communist Party, but that's not going to work here in America. And this legislation put the final nail in the coffin to that. David Sacks (01:09:15): It's really amazing that you got it through. And to get this passed, the Senate, you had to have 60 votes, right? Because reconciliation, you only need 50 plus one, but for a regular order, I guess, to get past the potential for a filibuster, need 60. That's exactly So what demands did that put on you in terms of getting Democrat votes? Because the Republicans have what, 53? We didn't have all the Republicans. We didn't have all Bill Hagerty (01:09:40): the But what enabled me to get the other nine Democrats to come on board was really an education process. Because at its core this shouldn't be a partisan issue. This is about taking America's payment system into the twenty first century. This is about making our nation more competitive. This is about expanding demand for the US Treasury securities that we issue. This is about the dominance of The US Dollar. It's hard not to like it, but I think there's a partisan bent here in Washington that's so strong that their objective is just to keep Republicans or Donald Trump or David Sachs from getting a win here. And through education and through listening, and frankly I don't think it's my legislative skills, I think it's the business skills that I brought to the legislative branch. I think it's through the business skills and the ability to negotiate that we've actually gotten to this point today. David Sacks (01:10:26): And so tell us about that. So before this you were a businessman, then you became ambassador of Japan. You met President Trump, you told him you Bill Hagerty (01:10:32): wanted to David Sacks (01:10:32): run for senator He told the story up in He his said that you had learned Japanese in like six months as ambassador of Japan. It was a little longer than that. Bill Hagerty (01:10:43): Okay, there's a piece of the story missing because I started my career at a place called the Boston Consulting Group. They sent me to Tokyo for three years back in the late 80s, early 90s. That's when I learned the language. And to go back as US Ambassador to Japan under President Trump in 2017, the honor of a lifetime. I can tell you representing the greatest nation in the world, any place in the world is an honor. But particularly in a region like that that has so much strategic, so many strategic initiatives that are underway right now. You think about this, Japan has more US military stationed there than any place else in the world. Japan is one of the toughest environments in the world. If you think about the neighborhood that they're in, Korea, Russia, China right at your doorstep. The time that I spent as ambassador really helped me dig in deeply in terms of the national security issues that our nation confronts and those that our allies confront. At the same time we did two trade deals with Japan. Nobody thought it could be done and we were able to navigate that with Jameson Greer working right beside Bob Blytheiser. I loved working with those guys and we got two great trade deals done. Jameson is back now as The US Trade Representative and I'm very optimistic that we're going see more trade flourish. President Trump knows how to do this. I've been with him in the trade negotiations. He knows exactly how to navigate this. And I'm looking forward to great results from our trade negotiations as well. David Sacks (01:11:59): Excellent. And so we're only six months since this administration. It feels like so much has happened. So much has been done. I mean, we just had one big beautiful bill. Now we have this legislation. What's next in your view? What do you think is going to happen next? Bill Hagerty (01:12:13): What's happening right now in the United States Senate, we just put through a rescissions package for a little bit over $9,000,000,000 That's a small amount, it's a large amount of money of course, but it's a small amount relative to the entire budget. The Democrats have just gone apoplectic over this. Any effort to cut back on spending somehow they've got to be against that. They're only for spending and we're trying to bring physical sanity back to America. So the focus is going to be to continue to find opportunities to basically legislate what has been found in Doge. The other activities well beyond Doge, every department head, every agency is looking for ways to streamline regulations and to cut costs and to operate more efficiently. And I've got to believe there are tremendous opportunities there and many billions more dollars that will come out of the budget as a result. But we've gone into a fairly partisan mode right now and I think it's going be tough for the next little while. While we're in this sort of partisan gap, I think what we should be doing is focusing on market structure for digital assets. And we are working on that. I just talked to some of my colleagues in the house today about how we are going to marshal that forward. I am going look forward to your leadership there as well and many people in the industry. David Sacks (01:13:18): Just so everyone knows what that is, so market structure is the legal framework, it's the rules for all the crypto tokens that are not stablecoins. So the Genius Act just passed, I gave the legal framework for stablecoins, now we've market structure for all the other tokens. It deals with questions like what's a crypto security, what's a currency, what's a commodity, who regulates those things. Just providing clarity, that's name of the bill, so that market participants know what the rules are. Because the last four years under Gensler, they were basically prosecuted without knowing how to abide. Bill Hagerty (01:13:51): Yeah, they called it regulation by enforcement. You don't know what the rules are, but they just launched an enforcement proceeding against you. President Trump was funny today because he looked at the and said, I guess half of you were being prosecuted here about a year ago by the previous administration. Things are David Sacks (01:14:04): He going to was on fire today. People should go back and watch. He spoke off the cuff basically like he normally does for twenty minutes and was very funny. The reason why he said that is when we did the crypto summit at the White House back in March, the Winklevoss brothers, Tyler and Cameron, were there. And they told the story about how a year before they thought it would be more likely that they'd be in the big house than the White House. The fact that they were at the White House was Bill Hagerty (01:14:37): Rather than in the big house. Because David Sacks (01:14:39): that's the way it was looking. Mean, they were dealing with so much unfair lawfare. But any event, we've moved past that. So thank you for your leadership on this. And by the way, on the rescissions, I know that this is the one issue that I think all of the hosts, the four hosts of the All In Pod all agree on is that deficit spending is out of control. Anything we can do to try and rein it in and have more physical sanity is appreciated. Even Cal Canis can agree with that one. He's sort of like the token lib on the podcast. We'll tell Bill Hagerty (01:15:08): him we're going to continue to work along those lanes. The Big Beautiful bill is doing it's already toward growth stimulation, right? Everything that we can do to stimulate more capital investment in The United States is embodied in the tax law as part of that bill. So with the growth coming out of the big beautiful bill and if we continue to go through the cuts with the decisions, I'm very optimistic that we're going to get back on the right path. That's the objective, that's the goal. Meanwhile, taking us into the twenty first century with our payments, with digital assets, we're going to continue to work along those lanes as well, and I appreciate your leadership in that regard. David Sacks (01:15:38): Well, and we appreciate you. I think the state of Tennessee, where by the way, grew up, I grew up in Memphis, I was very lucky to have you as their Senator. The Republican Party is really lucky to have you, the Senator is very lucky to have you, to have someone with your business background, to have your skills, who has now gotten through this first piece of legislation through, again, this wasn't a budget bill. It took 60 votes in the Senate. I mean, when's the last time that even happened? I mean, it's been years. I heard the Senate Rareon Committee. I mean, I heard they hadn't passed a bill in like ten years, basically, because it takes 60. Jason Calacanis (01:16:07): It's been Bill Hagerty (01:16:08): over ten years to get out of the Senate Banking Committee. One of my friends wrote me yesterday and he said, I didn't think you could get the 10 Commandments passed out David Sacks (01:16:13): of the Bill Hagerty (01:16:13): United States Senate. So congratulations. And I don't want to take the credit for it because it's been a wonderful team. As I said, your leadership in the White House and the executive branch, our friends in the House, representatives, my great staff led by Luke Pettit, done just a terrific job. David Sacks (01:16:27): Luke Pettit was amazing. We worked closely with him. Bo Hodge, who was the director of the crypto council, who was on the show earlier today. Bill Hagerty (01:16:34): Tyler was wonderful at Treasury. David Sacks (01:16:35): Yep. Tyler Williams Treasury who was Secretary Besson's staff person. The staff people never get the credit they deserve for all the work they do, right? But Tyler, Luke, and Beau were amazing through this process. Bill Hagerty (01:16:48): And in the Senate too, we've had great leadership. Our chairman for the Senate Banking Committee is Tim Scott. He's been a true proponent of this. Cynthia Lummis is very focused on digital assets and was very supportive of me as she chairs the digital assets subcommittee of our banking committee. So we've had great support in the Senate and I think it's going to continue to grow both sides of the aisle. David Sacks (01:17:09): Cynthia Lummis, she's been great. I've met with her many times. Tim Scott's been great. I understand that Kristen Gillibrand, the Democrat Bill Hagerty (01:17:15): she She's was absolutely in New great to work with. David Sacks (01:17:17): She brought in a lot of Democrat votes. I think you got 18. Bill Hagerty (01:17:20): And the great thing about Kristen too, she was a Wall Street lawyer at Davis Holt. She understands the markets and to have her level of technical expertise was a huge asset. And she was able to really convey to the democrat side that we were here trying to get the right thing done for the country. This was not a partisan effort. This was something that really is aimed at growth, leadership, technology leadership and frankly dollar dominance that we all should be for. David Sacks (01:17:45): Amazing. I think it's really amazing that we got this done when you compare this to where we were a year ago. I mean, it was nonstop against regulation by enforcement, basically regulation through prosecution, lawfare, and the crypto community was being driven offshore. There wouldn't have been a crypto community in The United States. And then President Trump won the election. Now, thanks to the efforts of Bill and others, it's law. The Genius Act is now law. We have a legal framework for stablecoins. And market structure is next. The clarity bill is next. We're going to try and do that by October. So it's really amazing that this is a you know, I thought that working for President Trump would be a once in a lifetime opportunity because he's a president who really wants to get things done, that's what's happening. It's really been amazing. So thank you, Bill, for being here. David Friedberg (01:18:27): Thank you, Dave. Bill Hagerty (01:18:28): Thank you. Appreciate it. Thanks.