科技巨头反垄断听证之后：并购收紧将如何冲击硅谷

Jason Calacanis (00:00:00): Alright, everybody. Welcome back. It's another episode of all in podcast. The podcast that is racing up the charts despite the fact that we recorded every 3 or 4 weeks. There's no marketing. There's no ads in this podcast. It's just four friends who play poker together who've decided to talk about the most important issues in the world Welcome back to the podcast, David Friedberg, the queen of Kinois himself, obviously climate.com. Eizza and an undisclosed beverage startup that I'm not supposed to talk about. Sorry about that. I know a lot of people were tweeting about this beverage startup. You're still not ready to talk about the startup. David Friedberg (00:00:36): Thank you, Jake, pal. Jason Calacanis (00:00:37): Yep. Welcome back to David Friedberg (00:00:38): the show. I always appreciate your promotions. Jason Calacanis (00:00:42): But when when will the beverage start up? David Friedberg (00:00:43): By the way, do you guys wanna talk about guys wanna talk about Jason's home address? because I have that, I think. Please now too. Chamath Palihapitiya (00:00:50): I wanna ask, is is that a picture in the back ground. I love space, by the way, as you know, but is that a picture of Uranus, or what is Speaker 4 (00:00:57): that picture? Jason Calacanis (00:00:58): I think it's Saturn. It's Saturn. It's Saturday. It's not a great -- It's not a Saturn. Friedberg, obviously, taking the 1st virgin galactic flight Chamath, Palihapitiya, of course, with us here. The prince of Spacks calling in from an undisclosed location that is not burning down like the United States? How are you doing on your vacay? Chamath Palihapitiya (00:01:23): Doing really well. Thanks. Like, I'm giving you the 3 button saluda Yeah. Jason Calacanis (00:01:27): Thank god. The microphone is perfectly positioned, so we do not have to look at your chest hair. All six of your chest hairs. Oh my god. David Sacks (00:01:35): It's like a $1000 suit that's missing all of its buttons, per per shirt, rather. I mean, they couldn't afford to put buttons all the way up on your, like, probably a $2000 shirt. Jason Calacanis (00:01:45): Oh, is there any meds? -- get back Chamath Palihapitiya (00:01:47): to the United States. As Jason said, my Habitasher will meet me at play so I can solve the 3 buttons. Jason Calacanis (00:01:52): Yeah. When he when he leaves for Europe, they removed the 3 buttons. He comes back. The Habit Dasher puts him back on each shirt. He does that for the entire wardrobe. And, of course, chiming in as rain man himself, David Sachs blog professional blogger and the the fund manager of Craft Ventures, of course, before that, working at PayPal with Peter Tio Elon Musk and a bunch of other famous people. 2 of which have gone on to have demonstrably more success than Saks, but Saks having, of course, more than success to multiple success than the other 72 rocket scientist from PayPal. In between, he did a little company called Yammer, which Microsoft bought for a $1,000,000,000. Speaking of Big Companies And Big Tech, we had a Big Tech hearing this week. And Jeff Bezos, Sundar and Zuck himself, as well as Tim Cook, 2 founders and 2 hired guns, people who were hired for their positions defending themselves from what I thought was some pretty good questioning. My expectations were very low that anybody on that panel would know what they were talking about. For me, I thought Jeff Bezos did the best job. He had a great opening statement, and he was the most candid. And I think, least likely to get broken up. Going around the horn here, Who did the best job in the hearings? I don't know if you saw all of them are just clips, but who do you think shined? Chamath Palihapitiya (00:03:22): I I only saw, to be honest with you, your recap, which I thought was frankly really, really good when we should we should probably link to that in the show notes so people can listen to it. I saw a couple of answers. The the thing that jumped off the page to me was I I read a little bit of Bezos's statement. I thought it was pretty fire. I thought he did the best job kind of positioning himself. But the reality is, you know, it's kind of what I said a few days earlier on CNBC, but I just thought going in. This whole thing was set up to be kind of performative theater, and it basically was that. You know? The the just like the the level questions are just so poor. The level of understanding is so bad. And then, you know, people just use it as a way to grandstand, and everybody did. So You know, I wasn't completely blown away by any of it to be quite honest. Jason Calacanis (00:04:13): What do you think? Friedberg, who had the best showing in those hearings? David Friedberg (00:04:18): I think Zach was the most kind of eloquent in the on point responses. He was super super well prepped for this thing. I think Bezos and and others were obviously You know, they had they had great kind of prep work done for their statement. But in terms of, like, awarding off the attacks, I think Zuck did did a great job. you know, it was weird. It didn't feel like like Tim Cook should have been there. He was, like, kind of a random thing that he was there because everyone had an axe to grind. And the acts that everyone had to grind was a little bit different. It wasn't like this was a a true objective discussion about, you know, antitrust. And so the the apps that people had to grind were kinda pointed at Google and Facebook and Amazon in different ways. Tim Cook was kinda, you know, hey. Yeah. This is cool. You guys go ahead and give you a response. I'll I'm gonna go back Jason Calacanis (00:05:15): for -- -- think that's because Apple does not have a monopoly position on a on a numbers basis in any one era. And -- No. -- and and or because they're products are so loved and universally, you know, used? David Friedberg (00:05:30): Well, I I think it's actually a function of what these companies do. So if you look at the the Jim Jordan rant, I don't know if you guys watched this, but Jim Jordan did this big rant of the opening. -- worst. And he went on and on. And the first thing he said, he's like, Big Tech is out to get conservatives. And then he went on and gave all these examples about how Twitter has been pulling down Donald Trump's tweets and flagging them and and Facebook's been being know, canceling certain people on the platform. And his whole axe to grind with really about censorship on social media platforms, which has fucking nothing to do with antitrust and has nothing to do with Apple's business. And so, yeah, I guess my point is, like and then other people have issues with with the with Google's dominant and ads and Amazon's impact on local business. And so there there wasn't much of an axe to grind frankly with Apple. At the end of the day, as I said, I don't think that it was a function of, you know, a true kind of objective antitrust approach, and it was just more about, like, hey. We've all got different things we wanna address, and we finally got these guys here. Let's beat them up and You know? Jason Calacanis (00:06:27): Saks, what do you think? You you with Friedberg that it was performance art, or do you think that or performative rather. Do you or do you think that there are actually substantive issues that came up during the hearings that we should discuss here? David Sacks (00:06:38): Well, you know, it was both. You know, certainly, there was a tremendous amount of grandstanding and political theater and the the politicians on both sides wanted to take shots at at the companies for various reasons. I mean, I think they have a slightly different hierarchy of hate. I think the The the left sort of hates Facebook the most because they blame it for Trump's election, which I think is kind of a ridiculous scapegoating, which we should talk more about. But and then I think the right is is most suspicious towards Google. But I think there are, you know, legitimate issues here as that that were brought up. And I and I think the congressional hearing did score some hit points. I think your your previous pod did a good job showing some of those. The these hearings were teed up apparently over the past year by a series of subpoenas of records that the the committee this is the this is the house subcommittee on antitrust had teed up. And so there were some moments where I thought that, you know, the the the representative scored some hits on, you know, Facebook and Google. Jason Calacanis (00:07:53): What do you think the big who took the biggest hit in all of this? Who who who do you think has the most putting aside all this performance, obviously, and the politicization of everything in our country? and Jim Jordan who, to me, is like the he's like the dad at the baseball game who, like, the little league late game who runs on the pushes the empire and gets banned for the season. Like, he just yells over everybody for no reason. But -- Chamath Palihapitiya (00:08:18): Right. Jason Calacanis (00:08:18): -- what is the actual what was the punch that landed that is the most valid as we go around the horn one more time here. Now that we've got our initial thoughts about it, what punch landed the squarest in one of these companies' faces? David Sacks (00:08:32): Well, I I I let me me set this up. I I think there were 3 big areas of concern where just about all the companies with maybe the exception of Amazon took hits. although even, you know, Bezos took hits. I think one is with respect to anticompetitive actions that these platforms are taking, particularly with respect to the applications or small businesses that operate and are dependent on those platforms. I think all of the companies were interrogated about that. You know, Bezos took a hit when he had to admit there were concede that the company may not have always followed as policy with respect to using It's, you know, 3rd party sellers data to to figure out how to compete with them. You know, Google was interrogated at about snippets. There was news today actually just out of Australia that the government's gonna order Google to pay small businesses for the use of its its content for snippets, which, you know, so so the, you know, the the regulations are kinda heating up on this. But the the sort of the first area was sort of anticompetitive. And I think Facebook took some some hits with respect to the Instagram acquisition. -- which, you know, congressman Nadler really went after him. And then I think Jayapals as well And that that's a tremendously threatening issue for Facebook. Because if it is forced to divest Instagram, it would just be crippling for for the company. We've talked more about that. Jason Calacanis (00:09:56): Yeah. Let's take David Sacks (00:09:57): let's let's -- Jason has set the table. Two other issues that I think came up. I'll just very briefly Number 2 is sort of cozying up to China. I think Google is the one that's most vulnerable here. And then the third issue is sort of this issue of censorship and bias. with respect to content and and politics in Jason Calacanis (00:10:14): the election. -- to do with which has nothing to do with antitrust, the censorship issue. So table that one. Chamath Palihapitiya (00:10:21): I think you're hitting the nail on that. This was not about antitrust going in. I think people were, you know, kind of confused even Jim Jordan just I don't think he has any clue what he's talking about. He doesn't know the difference between regulation and antitrust. He doesn't know the difference between the Sherman Act and, like, you know, section 230. I think they're all kind of making it up as they go along. So in many ways, I think personally that the companies that were the most at risk going in were the same companies at risk coming out. And so, you know, if you had to stack rank risk, I think Facebook is number 1 at the top of the list. then I think it's Google, then I think it's Apple, and then I think far, far, far down is Amazon. In many ways, Amazon is the most inoculated simply because the end market that they operate in is so massive. And the the market that Facebook operates in is so new yet so constrained with very few competitors. So in many ways, I think that's how the risk cuts. I really think that the antitrust ledges latest framework that exists today isn't enough to touch any of these guys. Instead, I think what really happens is more regulatory. And if you really think about what these guys are very concerned about, It's more that Facebook largely and then Google to a smaller degree essentially can be kingmakers with respect to popular opinion and sentiment. I think that they wanna have regulations. And I think that there's a good historical precedent for a bunch of industries that have had to come under regulation when they effectively get to 100% distribution. You know, whether it's meet or airplanes or radio or television, you know, agriculture writ large, automobiles and transportation, whenever a market basically serves 100% of the total addressable universe, Government stepped in and they don't necessarily legislate and trust bust, they fundamentally regulate in tax. And I think in many ways that's just as bad and frankly in some ways it's worse because if you do that to a tech company, you're basically crippling The one thing that they're supposed to be very good at, which is to innovate. And that's the only thing that they can use to basically keep their stock price high, which is then the only thing that they can use to get people continue to work for them. Chamath Palihapitiya (00:12:37): So that's the sort of circular loop that breaks if you regulate them. And I think that the risk coming in was the same as coming up. Jason Calacanis (00:12:43): So Facebook let let's let's take them let's take them one at a time. Facebook, I thought, had the worst performance because it was pretty clear that Nadler was setting them up not only to not be able to buy a company in the future, but in that clip, he was sort of teeing them up that maybe the Instagram acquisition should be unwound and they should be forced to spin that off because they were saying over and over and over again that Zuckerberg put in emails with his management team that they were going to buy these companies or kill them or copy their feature sets And even though that may not be explicitly illegal, the fact that they've hit as a Chamath is talking about, such incredible market share with billions of users and because of the track record of Zuckerberg, you know, which may not be at all related to this, but It sets the table. Chamath Palihapitiya (00:13:35): No. But, James, in fairness to Mark, that decision wasn't made when Facebook had market dominance. That decision was made when Facebook was still fundamentally at risk, and there was a large point of time where a lot of other people had they been left to their own devices or properly capitalize have actually become a relatively, you know, important competitor to Facebook. Jason Calacanis (00:13:55): Instagram could have been at that point, but then Snapchat was the opposite. Snapchat, they were at scale, and then they were gonna buy it and threaten them either you sell to us or we're gonna copy the features. Chamath Palihapitiya (00:14:05): I think I think I think what a more logical and defensible reaction like, I I just think it's not defensible to say, oh, you know what? Facebook, I didn't like the acquisition you did 10 years ago, basically, because it worked. Yeah. And so I'm gonna punish you 10 years later. That's crazy. That's stupid. Jason Calacanis (00:14:21): Yeah. In the review, Mara, no no good. Yeah. Chamath Palihapitiya (00:14:23): A more reasonable place to be is to say, okay. This thing, meaning communications writ large, has become a critical piece of societal infrastructure, and we are trying to figure out now what the rules should be and rules shouldn't be brittle, rules should be evolutionary. They should map you know, to the moral decisions and ideas and frameworks of the time. And so, you know, we have to figure out, for example, number 1, interoperability. So how can you message across all these multiple networks? You know, another simple example. You know, we legislated the ability for emergency services to be able to send a message on your mobile phone line and your landline. You should probably be able to have a backdoor into all the messaging networks simply for that reason. So the point is that, you know, there are all kinds of things you can do today to make this infrastructure layer of society operate in a more predictable way on behalf of What Jason Calacanis (00:15:18): was your best do you have have you thought about a regulation? Then let's stick to Facebook, and then we'll go to Amazon. Chamath, have you thought about a regulation that would make sense to Facebook, whether it's divesting an asset or maybe a certain percentage of usage or allow Facebook Messenger to work with iMessager to work with, you know, Twitter DMs. Chamath Palihapitiya (00:15:39): I'll answer it in different ways. So look, I mean, for 20 years, I've run these kind of businesses. Like, from from WinApp to AIM and ICQ to then, you know, at Facebook. And so, you know, I remember in at AIM and ICQ, we you know, did all this hand ringing and all these meetings between us and Microsoft and Yahoo to make our messaging networks interoperate. And, you know, eventually, we were basically just cut off at the knees because other people just moved around us and eventually, it all just morphed anyways away from these sort of brittle messaging networks. My my kind of view is that I don't I I think what's best for Facebook is the status quo. And so, you know -- Yeah. Jason Calacanis (00:16:20): -- Chamath Palihapitiya (00:16:20): if if if they can basically and by the way, I think the strategy is and and Mark wrote this in his manifesto, but A couple of years ago, you know, this is sort of what led to Chris Cox resigning if I'm playing, you know, sort of like conspiracy theorist. If you read Zuck's manifesto, What he was basically saying is, listen, we're gonna take all these product, and we're gonna take all that code, and we're gonna mesh them all together in such a complicated convoluted mess that if and when somebody ever tells us to rip it apart, it'll take another 5 or 10 years to do it. And that's effectively the technical read on that manifesto is you're gonna make it technically impossible to unthread these things as independent. Jason Calacanis (00:16:58): And your thesis is that's a strategy against an antitrust breakup. I I I find that -- Chamath Palihapitiya (00:17:05): No. I just think it's a really smart strategy. I mean, he wrote it and he published it online, so it's not like deciding anything. You made it. Right. I mean, this is the beautiful part about it. He made it completely in the clear. Now -- Right. Jason Calacanis (00:17:16): -- Chamath Palihapitiya (00:17:16): so that's that's the strategy. It to basically make it one monolithic code base so that if and when, I think I don't I'm not sure if this is the intention, but, frankly, if and when somebody knocked on the door and said, hey. You need to strip apart WhatsApp and Messenger and Instagram. You can say, well, look. It's it's one monolithic code base of, you know, 50 million lines of code. It'll me 10 years, but sure, I'll figure it out somehow. So -- Yeah. Jason Calacanis (00:17:38): -- Chamath Palihapitiya (00:17:38): you know, I think what's good for Facebook is a status quo. Now that's different from what's good for politicians. and then what's different for consumers. I think what's good for consumers is fundamental interoperability. Now this is then what touches, you know, Android and Apple as well. Like, the idea today that you cannot have a group text message that can only include iPhones. You know, on the off chance, one of your friends has an Android phone, you're basically fucked this kind of Jason Calacanis (00:18:07): Which happens every 6 months on our group that? Friedberg, what do you think in terms of Facebook and any potential action that could be taken? or any possible solution to them having such a dominant position because they are the only one of the 4 that has a dominant position. David Friedberg (00:18:25): I would think about the you know, how these businesses are are kind of built. Right? They're in in all these businesses, there's an infrastructure layer. The infrastructure layer in the case of Google and Facebook is is is reasonably similar. It's a bunch of data centers and and the hardware and software infrastructure to run all of their services on top. And then on top, there are consumer products, and then there are advertising products. And the and the customer base for the consumer product is obviously users and the, you know, customer base for the advertising products is these advertisers that pay to access these consumers and give them ads and get clicks from them and sell them stuff. And and so if you think about what do you pull out, it it sounds like on the Google side, there's there's there's concern both on the advertising and on the consumer products that are being offered and the scale and the leverage that Google has and how they make those products kinda come to market. And with Facebook, it's really about this absolute kind of monopoly on, you know, on social products and services, whereas Google's got this great monopoly on on search products for consumers. So you could kind of take a layman's view and say, hey. Like, rip out WhatsApp and rip out Instagram, and, you know, then Facebook is good. But the problem is in that infrastructure layer, they've created the social graph and this connection between you know, all the people that you know, and they've got all the stuff sitting on the same servers. And Shamab points out all the same code base, and there's a lot of commonality there. So the reality of, like, ripping something out from there is a lot more nuance and a lot more challenging than just saying, hey. You gotta get rid of WhatsApp or you've gotta get rid of Instagram. David Friedberg (00:20:08): And it's more likely some sort of Chinese wall situation where you end up with a negotiated exit, continued ownership, and control. But, you know, almost like what happened with the banks in the eighties, you kinda gotta separate one side of the business from the other. That could be one way that this goes because it's really hard to kind of break apart given the way that these businesses are built. Jason Calacanis (00:20:29): What do you think about a solution, David, in which They conceded, hey. We're not gonna buy any more of these competing social networks, which I think would be kinda hard for them to buy one right now. Chamath Palihapitiya (00:20:41): I think that's done. I mean, like, you can even see that Google Fitbit. I mean, Fitbit is, you know, what is it, a $1,200,000,000 acquisition? It's gonna take almost 2 years to close. and Google's already making concessions, antitrust concessions to the EU. Speaker 4 (00:20:55): Right. Chamath Palihapitiya (00:20:55): Or, you know, this is a $1,000,000,000,000 company trying to buy a $1,000,000,000 company. So I have large acquisition in M And A by the big Jason Calacanis (00:21:04): 4. Chamath Palihapitiya (00:21:05): It's impossible. Jason Calacanis (00:21:05): Is that good for society Chomot or bad? society, is it good for our business of investing in startups? Or is it bad for us investing in startups? Chamath Palihapitiya (00:21:12): Well, I I think it's good in one very important way, which is that it forces the capital markets to support these companies. And what I mean by that is, you know, I I I told you guys a couple times, but in the year 2000, there was 8000 public companies. In the year 2020, July 2020, as we sit there, August 2020, about Jason Calacanis (00:21:32): 4000. Chamath Palihapitiya (00:21:33): So we've seen a shrinking of 50 percent of the number of public companies. So the idea that there isn't an m and a on ramp anymore means that more capital and the capital markets will become more fluid. And we will support emerging growth companies in the public markets is my suspicion. Jason Calacanis (00:21:52): If only there was yeah. If only there was an easy way for these companies to get public, go ahead, David respond. David Sacks (00:21:57): Well, I I was I mean, I I think that I I think you're raising the right issue, which is the chilling effect on m and a that these hearings are gonna have. Even if Facebook is never broken up or where that deal is sort of retroactively challenged, the the the big 4 tech companies have to be looking at these hearings, and now they're gonna be second guessing every acquisition they wanna make, and it's gonna have a chilling effect. And I I think that's a disaster for Silicon Valley because we know that most of the startups don't work. And, you know, And there's really only you know, most of them go out of business. And there's only 2 good exits. One is an IPO. The other is m and a. And if you take the m and a exit off the table because it's no longer sort of feasible from a regulatory standpoint. Not all those companies are gonna IPO. Jason Calacanis (00:22:48): Yeah. But, David, what you're for to what you're saying doesn't make a logical sense because if those companies are shit anyway, they should be going out of business, and who cares about an aqua hire or some mini modest hire that gets you two times your money? David Sacks (00:23:00): There's a lot of of acquisitions where the acquirer is picking them up because they provide an important component or technology or product. But that that that startup would not have been a great standalone public company. Jason Calacanis (00:23:14): Would Yammer be worth more today, and would you be worth more money? Would your investors be worth more money if Yammer had spacked? Yes or no, David? Chamath Palihapitiya (00:23:23): I And I'm that too. Yes. Jason Calacanis (00:23:24): Okay. So, David, your your argument makes no sense. I think you're playing to lose Chamath Palihapitiya (00:23:29): It's not that it doesn't make sense. I think Dave David does bring up something that's important in the following way, which is there's a lot of companies, Jason, that get to a certain amount of scale And then they basically start running out of oxygen, whether it's because they've overbuilt or they've over hired or they've overspent Jason Calacanis (00:23:44): -- Or there's a natural audience for the product? Chamath Palihapitiya (00:23:48): Yeah. Maybe. But I think I think a lot of it is just sort of more overbuilding and just kind of distracted capital allocation. But then, you know, you need somebody to come in. And this is the problem with Silicon Valley, and I think what David speaks to is the following. If big tech m and a is off the table, The single biggest thing that'll change is valuations by late stage private by late stage privates. Because if you know that you can't get a 2 x mark to market from the last post, guess what'll happen to your post money? It'll go way down. Right? Because that was always the understood assumption. You know, all these guys, these late stage money can come in and say, well, sure. I'll put, you know, a $2,500,000,000 post to $3,000,000,000 post. Because in their mind, what they've been taught is that immediately sets the mark to get acquired as 2 x. And in many ways, Facebook started it because Facebook came to buy Instagram. literally weeks after that growth stage round at 500,000,000, that's why they paid a Jason Calacanis (00:24:43): 1,000,000,001. They doubled the valuation, but wouldn't it hold on a second. wouldn't it be healthier though for the entire ecosystem? If we weren't building those late stage companies to be flipped to a major company, maybe merging them with medium sized companies that are slightly stronger, and then taking them public to your point, Chamath. Chamath Palihapitiya (00:25:01): The point is if you don't have a fucked up cap table, you can do all of those things. It's the fucked up cap table. Jason Calacanis (00:25:06): So besides that, who who needs this late stage capital coming in and doing these crazy rounds. Why not take the company's public earlier? David Sacks (00:25:14): Well, because look. You don't always know what's gonna happen. I mean, this is the reason why Instagram sold. It's the reason Yammer sold is you don't know exactly what's gonna happen. You don't know what the outcome's gonna be. And in a lot of those cases that you're saying, would would become IPOs if they weren't acquired. Well, a lot of them just, you know, aren't gonna work. It's it's crazy to be taking those exits off the table when both the startup and, you know, the acquirer or the big tech company, you know, wanna do the do the transaction. And and and and and one of the reasons why I think these you know, there are a lot of these m and a type outcomes is because big companies have realized they're not very good at r and d at sort of good at sort of new product development. And so what they've done is they've outsourced a lot of their r and d budgets to m and a. And so they let the startups run the experiments. You know? In any category, in any new area, you end up having a dozen of these startups get funded, you know, we we make fun of it because they're all you know, there's so many competitors in every little space. But those startups are the laboratory where all these experiments are taking place. And then you know, the big company comes in at the end and sees which experiment -- Freeburn, where do you think? Jason Calacanis (00:26:23): Freeburn, where do you think? David Friedberg (00:26:24): I think it's I mean, I think the advantage of being a platform business is you can plug something in and immediately gain a lot of scale from it. So, I mean, you know, Instagram and YouTube are perfect examples. they were, you know, reasonably fast growing, had millions of users. But once they were plugged into the engine of the bigger platform, they were worth a hundred times as much over a few years because of all the usage and the infrastructure and the and the distribution, etcetera, that was provided But, you know, it looked insane at the time to pay a $1,000,000,000 and a $1,600,000,000 for those two businesses Each of them are easily worth a 100,000,000,000 plus today, probably some multiple of that. And so I think it's Saks is point is right is, like, I'd rather as a and and look. I worked in m and a at Google for a couple of years early in my career. I left Google and in 2006 and a lot of the infrastructure that makes Google's, you know, revenue engine was acquired we bought a company called Applied Symantics for a 100,000,000 bucks or a 100 something $1,000,000 at the time, which ultimately became AdSense. and applied semantics could scan a webpage and basically determine what keywords that webpage represented and then match ads from AdWords onto that that webpage that acquisition with a $100,000,000, I mean, I don't track anymore how much, but tens of 1,000,000,000 of dollars of revenue are generated by that you know, by that AdSense system today. Chamath Palihapitiya (00:27:53): You're bringing up something really important, which is at the time Google was not a $1,000,000,000,000 company. So the point is that Google had access to enough capital market scale where, you know, nobody's going to get in the way of a Jason Calacanis (00:28:06): 5, 10, $20,000,000,000 Chamath Palihapitiya (00:28:08): company trying to buy a $100,000,000 business like that. I just don't think you're gonna see, you know, any regulatory body take that serious. Jason Calacanis (00:28:15): Wait. So didn't we just paint the perfect David Sacks (00:28:16): picture tomorrow? There'll be a trickle down. Jason Calacanis (00:28:18): Wait. Wait. Isn't that the perfect picture? No. Chamath Palihapitiya (00:28:20): No. In fact, I think what it means is the $20,000,000,000 company now probabilistically can actually win. So for example, like, look look at this Intuit Credit Karma transaction. Right? The question is, you know, could a smaller company have bought Credit Karma? probably, but not at the price that, you know, Intuit is willing to pay. Now if Intuit gets big enough where there's a chilling effect and regulators say, okay. you know, you're above a magic threshold and, you know, no Bueno on the m and a anymore. Now Credit Karma has 2 choices, which is maybe they sell for 4,000,000,000 to a very different company. Right? Or maybe they sell actually, let's take a different example. PayPal. PayPal is now a top 20 business in America, right, by market cap. So if PayPal isn't allowed, for example, to buy, you know, a bunch of sort of like, you know, payment rail, payment companies, Maybe what happens is, like, a, you know, a medium tier business is allowed to buy them. And now all of a sudden, those medium tier businesses can compete with PayPal. Jason Calacanis (00:29:15): That's what I that actually seems like the best solution that we've we've kinda stumbled on here. Can Slack then become or Dropbox or Uber or any Airbnb. Now they can become the acquirers of these companies, and then they can compete. So why don't we just say, hey. If you're over a $1,000,000,000, or if you're over 500,000,000,000, you can buy 1% of your market cap. I'm just throwing a number out here. David Sacks (00:29:37): Jason, let me jump in on this. The the the that's not what Nadler was arguing for. You know? It's not like Nadler was saying that if you're a big fork tech company, you can't do these deals, but everyone else can. The the the that the standard that that Nadler and the precedent that he was essentially setting in that hearing is, you know, 2020 hindsight bias. You know? If if a company acquires Jason Calacanis (00:30:02): a company that I agree with you on that. But putting that aside, if we weren't gonna come up with the rule, because we know the rules that as they currently exist, are inadequate to do any type of regulation for these companies because none of them have 95% market share. So if, in fact, we we need a new solution. How about this for a solution? I'm just putting it out here. You can acquire something that is under 5% of your market cap. So if you're market cap over the last year is a 1,000,000,000, you can buy something 50,000,000,000 or less. If you're under 5 if you're under 250,000,000,000, you could buy whatever the hell you want. David Friedberg (00:30:37): But, Jake, hell, let let me let let let me let me ask this question. You know, the the points we made earlier about YouTube and Instagram, they were successful because of scale of the user base of the platforms that acquired them and the work that had already been done, and so they could plug in. They would Jason Calacanis (00:30:50): have both been totally successful without them. David Friedberg (00:30:52): They would have been But would they have been worth $300,000,000,000 like they are today? Maybe Jason Calacanis (00:30:56): more. I mean David Friedberg (00:30:57): but Instagram was thirteen people. YouTube was a couple dozen people. It doesn't matter. The story is a small group were brought in with with an interesting platform that was kinda working at the time, and then they became these $300,000,000,000 platform. So that's one scenario. And a lot of money could be used and Google and and Facebook used a lot of money to be the best acquirer or to be able to acquire those businesses, and that's the argument for this hey. They're at such a scale right now. No one else can compete because only they can pay this this fee, as Shamak points out with Intuit and Credit Karma, only Intuit can buy Credit Karma at that price. Now the alternative way to think about this is what if there is vertical expansion? So instead of leveraging their existing platform and their existing dominance, what if Google, in this case, it's trying to get into the cloud business. Right? And they're competing viciously with Amazon and Microsoft and others in this enterprise cloud business marketplace that is continuously evolving, changing every year. There's a different kind of lead and a and a different company that's suddenly growing faster than the others, and Google spent $2,600,000,000 to buy Looker. buying Looker for $2,600,000,000 does not advantage Google's advertisers. It does not advent I mean, to some degree in mind, it does not advantage Google's users. and it is not about platform dominance in their traditional ad business. It's about vertical expansion into a new market. Jason Calacanis (00:32:10): Okay. So here's how I'll rewrite the law, David. If you have over 70% market share, in your vertical, you cannot make acquis additional acquisitions in that vertical. If you have They're David Friedberg (00:32:19): they're buying into a new vertical. Right? That's my point. Jason Calacanis (00:32:21): And so then the caveat is if you're buying into a new vertical, You don't have to hit that cap. David Sacks (00:32:26): We already have that. We already have I mean, that that's that's basically the the the way the the rules work today is that you look at market I mean, Coke cannot buy Pepsi, Facebook cannot buy Twitter today. But what we're talking about is at a much earlier stage you gonna interfere with the m and a, or are you gonna retroactively go back and unwind these transactions? Jason Calacanis (00:32:47): How many transactions makes no sense. Yeah. Chamath Palihapitiya (00:32:50): think the point is this is all water under the bridge, and but the incremental m and a for these big guys is very unlikely. Now David does bring up a good point unless it's in basically a, you know, do nothing not of that important, you know, in in the positioning. category relative to the core business. And so this is why, you know, it's again, go back to, like, why it did Looker close faster than Fitbit. It's half the price. Looker is twice the price. Right? Fitbit is half the price. David Friedberg (00:33:24): Yeah. New mark new market completely. Yeah. Chamath Palihapitiya (00:33:27): Yeah. And so so there is a fear that there is going to be a compounding advantage that regulators have a responsibility to stop. So I think it goes back to once you get to a certain level of scale, the thing that we're missing with online businesses is this kind of like you know, there there's like a there's like a great original sin here that we're not admitting, which is that The Internet is now a pervasive and critical part of human infrastructure. As such, there needs to be people that regulate and manage the Internet the same way the FAA manages and regulates planes and wind turbines. Like, think about the FAA. Let's just take aviation. It is impossible for you to go and just go into your garage, build some random thing to carry people from point a to point b, in the absence of some certification. Okay? Take agriculture. It is impossible for you to basically go and, like, build up a farm and build up you know, livestock or whatever and all of a sudden just supply it into fucking sobeys and Safeway without any sort of, like, checks and balances. Similarly and the reason is because it's simple human infrastructure that everybody relies on. And and I just think that we have to admit that now these are the companies. Jason Calacanis (00:34:43): Also, those are life and death. Chamath Palihapitiya (00:34:46): This can be too. I mean, like, what about the guy that read the post about like, the pedophiles and the pizza joint came up with an ak Jason Calacanis (00:34:53): 47. Yeah. I mean, it's quite an edge case compared to flying on a plane. Chamath Palihapitiya (00:34:57): this stuff is life in death at some level, but even more than life in death, it's the anointing of power that then determines life in death. Jason Calacanis (00:35:05): And that's I think the key is that power. Yeah. David Friedberg (00:35:07): Damat, do you think that there should be an Internet regulatory body that decides how businesses operate and how content is censored and and managed on the Internet? Is that what kind of suggesting? Chamath Palihapitiya (00:35:18): Yeah. So let me be very specific. So I think that there are very specific kinds of businesses and business models that should be overseen. Specifically, I think the first and most important thing is a body that oversees the collection of user data and how it drives targeting and identification. Jason Calacanis (00:35:41): So privacy concerns around that. That's a that's a no brainer. Chamath Palihapitiya (00:35:46): That's the first one. And then I think the second one is something that essentially tears the fig leaf off of Internet companies and says, you know what? You are the equivalent of a publisher and a platform, some weird hybrid that we didn't think could exist when we wrote these rules. And so we're now going to adapt these rules. Because, you know, if you think about it, nobody is happy with the Internet publishers today. You know? The the left thinks that it skews right, the right things it skews left. Everybody's confused. Nobody gets what they want. And so I think somebody has to step in Jason Calacanis (00:36:18): a good segue to Saks's point. And then I guess we we have we have a fork here now in the discussion. Do we wanna go and talk about censorship and that specific issue across Facebook, or do we wanna get into Amazon for a second? Which way do we wanna go, Saxx? Chamath Palihapitiya (00:36:34): Go to censorship. David Sacks (00:36:34): Well, I mean -- Well, go let's think. Let's jump the fence. -- censorship. Jason Calacanis (00:36:37): I mean -- -- the fence here. Yeah. Should there be to Chemalt's point, Zach, a regulatory body that decides what people can and cannot say on social networks? Yes or no? David Sacks (00:36:51): No. I mean, let let's think about that. What we're saying is we we need the the the politicians to set up a regulatory body to control how the people talk about the politicians. I mean, that seems like a recipe for disaster. Jason Calacanis (00:37:06): What about specific lies and intentionality to frame debates incorrectly? Chamath Palihapitiya (00:37:14): That's not what I'm saying. I'm saying, like like, you go to a movie And, you know, there's a little blurb here that says, who can go to the movie and who cannot? You know, you get a you buy an album and it tells you whether there's explicit lyrics or not. Like, you before you turn on the TV, there's, like, some rating agency that tells you whether your kid should be watching it with you. My my point is what is the equivalent version? We all need to think about what it is, but to say that there should be nothing, I think, is crazy. Saks? David Sacks (00:37:41): Well, Well, I think I mean, those ratings are mostly about, you know, the standards related to to kids. You know? And the big Internet companies already have a lot of child safety features. I don't know that you need to create laws around that. And and I and I don't think that's what we're talking about anyway. I mean, I think the big debate about Facebook or Twitter is whether they're engaging in censorship or bias. Right? And that that goes way beyond the this topic of of of child safety. Jason Calacanis (00:38:18): So okay. Let's let's unpack -- Chamath Palihapitiya (00:38:20): I don't think that they're censoring. All I'm saying is I think you need to label and you need to more clearly designate what this content is so that people can choose. Like, for example, on Twitter, you know, I follow a bunch of people on the right. I follow a bunch of people on the left. I follow 1 or 2 QA non accounts Only because, like, I just wanna see it all, and then I wanna judge. And I feel like if I can see everything, I can sort of, like, lay it all on a table and figure out where the rough center is and kind of move to that. You know? Jason Calacanis (00:38:48): So you feel you're intelligent and mature enough to do that Chamath, but the rest of the world isn't? Chamath Palihapitiya (00:38:53): No, not really, but I try to do it because I think it's important for me. Jason Calacanis (00:38:57): Would you rather the platforms or some regulators come up with what you could see on those platforms tomorrow? Chamath Palihapitiya (00:39:03): Again, not what I can see. but there has to be a simple way, for example. You know, you could have something. And, again, this this this all all of this does is it breaks business models which then breaks monetization and it breaks the market cap of these companies. But for example, let's just say you had a new kind of job, which was, you know, all these you had you hired 500,000 people, and these were a combination of lawyers, journalists, you know, academics, all kinds of random people, artists, everybody. Okay? It's normal folks, blue collar folks, and you paid them full time to basically read stuff and kind of like, you know, you know, wisdom of the crowd style, tell us where this sat in the spectrum. Okay? This is on the left. This is on the right. This is kind of centered. This seems laughable. This seems unbelievable. This seems relatively. And I think that you would get, you know, very quickly, and I don't think the latency would be that high, but probably minutes where, you know, 40 or 50000 signals would tell you whether something is you know, where something is in the spectrum of, you know, how to understand it. David Friedberg (00:40:10): And then that that system that system will get paid get get played, though. It'll a game. Right? Like, someone will figure out a way to turn all of Chemut's tweet labels into super evil tweets and, you know, now and everyone will meet you because you're super evil. Jason Calacanis (00:40:23): Yeah. I think we just defined George Orwell's 1984. Like -- David Friedberg (00:40:27): Or cancel a culture. Right? Like -- If Chamath Palihapitiya (00:40:29): you beat 500,000 or a million people if Facebook and Google and these guys come together on Twitter and they pay a body of people to do this work. And so you don't know who posts it. You just see the content. You read it. You label it. it's a classifier. David Friedberg (00:40:42): So, Shamad, let what what do you what do you think you would get classified as? And then what if you disagreed with what what you were classified as? Chamath Palihapitiya (00:40:48): No. But, David, like, what what I'm saying is you wouldn't know it's me. Like, if I wrote an article on Medium, right, and I wanted to publish it in Twitter, That article first hits a queue. 50,000 people read it. They human classify it, and then it gets published. David Friedberg (00:41:04): Now what if you don't like the way it's classified? And you don't want those tags attached to it? And you want a place to publish freely without classification, without tagging. Chamath Palihapitiya (00:41:12): Then there will be a company that supports that too, and you'll see how much people care about them. Jason Calacanis (00:41:17): Yeah. I mean, the the I think the free market could handle what you're saying, Shamoff, because that I think David's concerns would be the same as mine, which is who who's doing this classification? What kind of transparency is there? And we already have the wisdom of the crowds, which is things that are outrageous automatically get pushed up on Twitter, which allows anonymous, and then Facebook seems to be all the top trends seem to be on the right. Let's swing over to Saks. Saks, what do you think of of of the 1984 proposal from Chamath 500,000 sensors telling you what to think of a post before you read it. David Sacks (00:41:51): Yeah. I mean, it's -- I Jason Calacanis (00:41:51): don't wanna bias the question, but it's an insane idea from us. David Sacks (00:41:55): It's it's a it's a little bit like Twitter fact checking, the the politicians they don't like. David Friedberg (00:42:01): The digital politburo David Sacks (00:42:03): It's it's a it's a form of, like, soft censorship. And, you know, I I I actually think that, you know, Zuckerberg gets attacked the most, but I think his position on speech actually makes makes the most sense. I mean, it seems like what he said is we wanna be a neutral free speech platform. And, you know, whereas, I think, you know, Twitter and Snapchat for that matter are much more likely to engage in either you know, censorship or or fact checking. Jason Calacanis (00:42:32): Which is paradoxical because Twitter's initial position David was it was the free speech platform. Chamath Palihapitiya (00:42:38): No. I totally agree because I think Zut's position is the most defensible, but it also is the most untenable because it's the most it's the it's the least technologically and to socially palatable. But it is the most defensible and philosophically, in my opinion, the only position you can have. But it's not it's not gonna be a wind. David Sacks (00:42:56): Right. Well, it's it's it's the the the reason why Zuckerberg has hated is because if you're gonna defend the principle of free speech, you always end up defending speech that society hates, you know, like the ACL you insert. Exactly. Exactly. And and and so, you know, Zuckerberg, I think, has done the best job sticking to his guns. I mean, the reason why Twitter is sort of, you know, loved on the left is is precisely because they gave in to the mob, and they've, you know, they've started taking down accounts that the mob doesn't like or or or or or, you know, fact checking them. Speaker 4 (00:43:32): Right. David Sacks (00:43:32): Whereas I think, you know, Zuck and and that and and Zuckerberg's refusal to do that. And by the way, I I think he's been, like, perfect in this regard, but he's been much better about standing up for the principle of free speech. That's what's made him, you know, anathema to the left. I think that and the fact that Facebook still gets blamed for Jason Calacanis (00:43:49): -- Free break, I have 2 I have 2 specific follow ups to what David just said for you, which is, 1, how much of this has to do with anonymity being allowed on Twitter versus not being allowed on Facebook? And second, how much of it has to do with the fact that we have algorithms that trend topics. If we didn't have those algorithms trending them, perhaps this wouldn't be an issue because if you wrote something that was inflammatory, it wouldn't and false, let's say, in that situation, both characteristics. It wouldn't go to the top list, which is what everybody's kind of upset about is that something that's false goes to the top of your feed. Comment on those 2 issues. David Friedberg (00:44:24): Well, I think your second your second point's an important one, which is, like, social media helps to enhance the stimulation of the amygdala in the human brain. you know, you see something that makes you angry or something that makes you related, you are more likely to engage with it. If you see something that is kind of a rational discussion about something that doesn't incite emotion in you, you're less likely to engage in it. And so whatever the engagement model is, it ends up, you know, creating a lot more virality and chatter and and kind of gets brought to the surface, and there's a lot that's been written and said about this that I don't think we're kind of uniquely in a position to to say anything more on And that's obviously what a lot of people are kinda concerned about is the inflammatory and polarizing nature of the content that is getting highlighted on these platforms and is getting greater distribution on these platforms. And then I think to your prior point, I'm not sure it's about anonymity as much as it is about any form of censorship that ultimately can be viewed as bias. So Jim Jordan's points were actually you know, as much as the guy rants and goes on, it sounds like a guy running on the soccer field to punch the coach. It it's really interesting to hear the point of view that As a conservative, I believe that a lot of what Donald Trump is saying or what some conservative voices are saying is reasonable and that voice should be heard. and to hear over and over about Twitter pulling these things down and then seeing a whole bunch of stuff like anarchists taking over Seattle and taking over Portland, and they don't get their stuff taken down. You know, them claiming that they can hold down the streets of Portland and Seattle because that's, you know, the way that it should be. Doesn't, you know, incite any sort of censorship but Donald Trump's saying he's gonna end it inside censorship. David Friedberg (00:46:03): And so I think it's not as much about anonymity as much as it is about you know, having censorship tied to a voice and censorship tied to a labeled or tagged point of view or labeled or tagged individual or voice, on the platform. So Jason Calacanis (00:46:18): -- Without anonymity, I think the problem goes away for Twitter. I think Twitter is working on a project, and I've been saying this for decade that they should let everybody pay $50 a year, $5 a month, or 30 bucks a year, $10 a month, whatever it is, to go through a verification process to make sure it's their name on the account, which, by the way, Nextdoor is doing at scale. Not only do they know it's you. They know it's you're you're the person who lives at that address because you got a postcard there. I think and in Korea South Korea, you're required to put your Social Security number in to open a social account. That would solve the entire problem. Now that may seem and then it would drive other users who want anonymity to anonymous platforms. And that's where Twitter, it's trying to have its cake and eating it too, and they're falling on their face. They have one level which is troll accounts because he can do whatever the hell they want, playing on a same playing field with people who can. And and this is just a disaster for them. The Jim Jordan may be an idiot, and just a loud mouth. But I think I agree with you. If the situation was reversed and we were talking about Obama being censored for some reason and the and right wing people or left wing weep people being silenced or deprecated on the platform, you know, soft band people will be up in arms, but it that was a different form. He should be doing that in a censorship, and they should have a censorship committee talking about that. What do you think Chamath about these 2 issues? anonymity on these platforms and the velocity in which things that outrage people because you, yourself, Chlamath, went from hold on. But I wanna queue this up for you, Chlamath. you yourself went from being a perennial guest on a lot of these programs. And then now since you've been a little bit more vocal about how you feel about social issues, when you said, break everything up. Who cares on CNBC? Jason Calacanis (00:47:58): And then when you said, who cares let them fail? They don't get their summer hamptons house. You gained a 150,000 followers. And now you've learned that if you're more I don't wanna say the word outrageous, but if you're more vocal about social issues, you're gonna gain a lot of attention Do you think you should have been labeled as somebody who is hysterical by your 500,000 people or being outrageous? Chamath Palihapitiya (00:48:26): Both and all platforms are littered with fake accounts. The interesting factoid from yesterday was, I think Facebook says they take down 6,300,000,000 fake accounts or something. some crazy crazy crazy numbers. So they are paying playing whack a mole. Twitter just basically says, we don't have the team in the infrastructure, so we'll just let the 6,000,000,000 accounts beat. That's the only difference between Facebook and Twitter. It's a it's a it's an acknowledgment of the problem and the transparency on the reporting. So, you know, look, my my point of view on this is that I think that irrespective of what I believe about free speech I think it's becoming harder and harder for me just as a layman reading to figure out what's true and not true. I think that the line is getting very gray. And I think that sources that used to have complete integrity that were, you know, just just beyond reproach in terms of their integrity, it's not clear anymore because the business model of the Internet is driven towards clicks. So I think what's actually happening is that we are dismantling information and news and journalism. The first place where I think that goes is places like Substack, which is going to rebuild it bottoms up where people will vote with their subscription dollars, what to believe, and what not to believe. And then on top of that, people will overlay aggregation tools so that you can actually have multi subscriptions and create sort of like next generation magazines and content subscriptions or whatever. I think that's where the that's where the world is going in terms of information and content. Jason, my honest belief is that I don't think I've ever said anything that particularly crazy. I just think that I'm reasonably intelligent I'm precise in what I say, and it cuts through a lot of the bullshit because most people have nothing to say. So, you know, when I make a fucking investment, I write a one pager and I post it and I'm willing to be held accountable. You know, when I don't understand about climate change, I just post about it even though I want to invest $2,000,000,000 of my own money in it. And so I think being authentic and just being straightforward is is sort of like what is valuable at some level on the Internet. Speaker 4 (00:50:46): I think Chamath Palihapitiya (00:50:46): that governments are going to regulate these companies. Yeah. Let's just be clear. Yeah. Jason Calacanis (00:50:51): And and you you Whatever Chamath Palihapitiya (00:50:52): I think about censorship, it just doesn't matter what I think because governments are of a belief that these platforms craft and shape public opinion and sentiment which drive the aggregation and coalescing of power, which fundamentally disrupts the business model of the politician. Jason Calacanis (00:51:13): Let's go swing over to Saks here. Saks, any comments on that censorship issue or the Once very respected sources of news maybe being less respected now, I think the New York Times came to mind when Chamath was sort of outlining that phenomenon, and then we'll move on to Amazon. David Sacks (00:51:35): Yeah. I mean, I I think there are things that these platforms can do to elevate the, you know, the the discourse, you know, the the quality of the information people are getting. I think that eliminating the bot accounts. I think it's a huge problem on Twitter that that it's, you know, that that they're out there. They're they're not really doing much about it. I think that's something they could improve and fix. You know, re requiring people to to be who they purport to be, you know, I think in this is a type the bot issue of, you know, not allowing these sort of sock puppet accounts. So the the but but the thing about those those steps that they could take is they're speech neutral. Right? The rules would apply to everybody, you know, to Friedberg's point. And so I think they should look at doing more of those things. But You know, what I'm concerned about is that, you know, so so much of the the debate so much of the pressure that's being brought on Facebook is to actually moderate and control the the type of speech that occurs on its platform. And and I think the reason why Zuckerberg is is attacked more than, say, you know, Jack Dorsey is because he's been more resistant to to doing that. Chamath Palihapitiya (00:52:47): I I think I think it's actually because you have a bunch of what seems like real names. But, again, I think that there's a fake account issue on Facebook that's just as bad as Twitter. It's just the differences. You know, the the fake accounts on Facebook have proper first and last Whereas Twitter, you have all kinds of alphanumeric garbage as an as an account name. So here's a different proposal. Why you know, maybe what maybe what we need is the decision that we allow complete unfettered free speech. And there's a layer of both Facebook and Twitter and YouTube where that's completely allowed But the precursor to have that access is you need to put in your Social Security number or something that's uniquely identifiable by your government. so that if you say something and there's a law against you saying something, already a pre established law, there's recourse. David Friedberg (00:53:32): Where can you go and be anonymous to my because, you know Jason Calacanis (00:53:35): -- On a web page, you can create any web page you want. Chamath Palihapitiya (00:53:37): No. No. What I was gonna say is then I think what it creates is a decision by a user to coalesce on completely different platforms if what you want is complete anonymity for a very different reason. And I think that that's very reasonable too. My point is the solution to this david is diversity. Not to have one thing and 2 companies try to create some Swiss army knife Frankenstein product solves this. It's just not possible. And I think we're both saying the same thing, which is like, you have completely different behaviors trying to go in through the same channel, it's not possible. David Sacks (00:54:11): I actually I I like the idea of these platforms doing more to eliminate bought accounts and and anonymity because the those are neutral rules of the game, and they do improve the quality of the debate that occurs on those platforms. I think those would be good things. I think it's just hard to do. I think that those companies may even wanna do that. It seems like Facebook certainly does. It's just a hard thing to execute. Jason Calacanis (00:54:34): -- not that hard. I mean, if you just said, hey. Listen. This account in order to have a verified account, you have to have a phone number and email. So that's 2 steps that a spammer trying to create a lot of accounts would not be able to do because you'd have to get burner phone number after burner phone number, which is a cost. It's possible. David Sacks (00:54:50): Right. Jason Calacanis (00:54:51): But it's a cost. if you wanna be verified, we need your phone number, and we need your email address, and we need you to you put in your credit card and get charged a dollar on your credit card just David Friedberg (00:55:01): that -- Over overnight overnight, Reddit would become the new Twitter. Overnight, Reddit would be cut. 4 Chan would become the new Facebook I mean, overnight. Like like, Jason Calacanis (00:55:09): you know, there's -- -- to have an account Friedberg to have the blue check mark. So you would still be able to. And then over time, people could say, I don't want to see replies unless they've been verified. And it could be just a toggle you pick. Chamath Palihapitiya (00:55:20): By the way, Facebook, Google, and Twitter already have this mechanism because that's what they do to grab advertisers up the spending curve. You know, you can start as an anonymous advertiser just spending, you know, onesie, twosie dollars you know, just off of a web page. Basically, just you go through and you do self serve ads. And the more you spend or the more targeting capability you want, You graduate, you self identify, you give more information, you get more capability back, you get more trust in the system. So it does exist for the customers of these big tech companies, and this is the other big thing. What it shows you is that it's actually solved the problem for the customers is just doesn't solve it for the, you know, feudalist feedstock, which are the users. Jason Calacanis (00:55:59): Because they won't pay. And so if you said, hey, listen. There's some users Chamath Palihapitiya (00:56:02): to -- -- customers No. The users are good. Jason Calacanis (00:56:05): Twitter's coming out with a paid version. So they're obviously on the on the halfway there. They're going to come up with a paid version of Twitter. Jack said it on his quarterly earnings call. David Friedberg (00:56:15): I'm gonna sell my Twitter stock. Jason Calacanis (00:56:17): Well, I mean, it's not it's not one of the other Friedberg, though. You you don't have to pick 1 or the other. You could still be anonymous, but you have opportunity because right now they're not accepting new verified users. And unless you're a mucky muck, you don't get to even go down that route. So shouldn't everybody have the ability Speaker 4 (00:56:31): to come David Sacks (00:56:32): in? I I would like I mean, I person would like Twitter more if it verified identity. I mean, I don't don't think there should be a speech tax. I don't know why they have to charge a dollar. But but but taking it Jason Calacanis (00:56:43): Well, if it's charging a dollar means we have your credit card. It's just another hurdle. That's why Speaker 4 (00:56:47): you put it down. David Sacks (00:56:48): Yeah. Yeah. Yeah. You you you can do it, like, a $1 off without actually charging anyone's card. Yes. You could do that. Chamath Palihapitiya (00:56:53): For example, like, if you if you actually force people verified by putting in their Social Security number. Like, there's a couple of guys I follow. I'll just name them Scott Adams who wrote the Dilberg comments. Yeah. There's a guy -- He blocked me. -- Mike Siklovich, who I'm really not sure I understand his politics, but I follow him because I because, you know, he he posts all kinds Jason Calacanis (00:57:11): -- He's a rabbleRouser. Chamath Palihapitiya (00:57:12): Another point is you know, it's it's not just people on the left, but I think it would be people on the left, people in the center, people on the right who would basically pay the quote unquote tax because they're already real people. And and they would just they would then have more guarantees and assurances that Twitter won't be arbitrary. And I think that makes Twitter better. And if it maybe makes it smaller, right, and then maybe you're right, Friedberg, like 4 Chen or 8 Chen or Reddit it become good for a different kind of behavior. By the way, I mean, like, that's what we do today. We don't eat the same fucking thing every goddamn day. We don't wear the same pants every day. David Sacks (00:57:47): I agree with where he's going with that. I mean, the the the defining feature of Reddit is that it is basically an MS. People have the usernames, but you never know who it is. And -- Surnems. Yeah. Surnems. And it creates a certain kind of conversation, and that's fine. Twitter is supposed to be real people. I mean, it's not I mean, Facebook even more so. But, you know, when I think about the accounts that I follow on Twitter, you know, it's it's, you know, all of them are are real people. Occasionally, you'll get occasionally, you'll get a synonymous. brags? You you'll yeah. You'll get, like, a a startup l Jackson or something like that. And, you know, and I and I think that's okay. Jason Calacanis (00:58:25): Yeah. But you would choose to then follow them. David Sacks (00:58:27): The difference with, like, a starter pellet Jackson is they're not a fake account. they're just using a pseudonym. Jason Calacanis (00:58:32): Right. David Sacks (00:58:32): And over time -- -- when you follow them. Jason Calacanis (00:58:34): And over time, they've proven to be to provide some value that makes people follow them. And so you could be anonymous if you get a certain number of followers, I guess you rise above the noise. Here's another solution. There there are no there's no nuance about truth or how much you believe this is true as a voting mechanism. So if you were verified on Twitter, and there was a scale that says, how true how truthful do you believe this is? And you could slide it and pick, you know, from 1 to 5, you could actually have another signal there do you think about some sort of a signal to Tremont's point about community value saying, I buy this, I don't. 97% David Friedberg (00:59:14): of people wouldn't use it and the 3% that do would completely bias the results. Speaker 4 (00:59:18): Okay, Jason Calacanis (00:59:18): Chamath. What do you think would happen? Chamath Palihapitiya (00:59:19): I agree with Freeport. I I don't I don't think that's a it's just I don't think it's a really good idea. My my my only comment was just offering the the other thing, by the way, I know it sounds crazy. I was just offering it as, like, the, you know, the the way that this negotiated solution will end up. And it's kind of sort of what these Internet companies are being forced to do, which are these weird, you know, pseudo action bodies that, like, review things and, like you know? Mhmm. So it's all just a slippery slope to that outcome. But by the way, you you you were speaking about the start up all Jackson. You know, there was another guy, Super Mougatou. And, you know, he turned out to be this you know, really good young up and coming investor, Dan McMurtry. And he was suit you know, he used to suiting him for a long time, build up a huge audience, and then flipped himself and basically came out and said, here, my name is Dan McPertree, and I run a fund. And, you know, it was wonderful. Jason Calacanis (01:00:10): Yeah. it's a very good marketing strategy. It's a growth strategy now. Be start up, Jack. Come on. Speaker 4 (01:00:15): When are Jason Calacanis (01:00:15): you when are you -- -- adventure partner. David Friedberg (01:00:17): When are you gonna announce that you're the guy behind VC Brex? Chamath Palihapitiya (01:00:23): Like, I'm not ready to do that. Jason Calacanis (01:00:24): I'm not Speaker 4 (01:00:25): ready either. I'm not Jason Calacanis (01:00:25): people thought it was me. I was like, I'm getting tortured. Chamath Palihapitiya (01:00:28): Wait. Do you hear that I'm the guy behind 0 hedge? That'll really take you. David Friedberg (01:00:32): Correct. Well, Jason Calacanis (01:00:32): 0 I mean, 0 hedge is instructive. Didn't he get banned or does she get banned for posting about stuff in coronavirus that eventually turned out to be acceptable and true. Chamath Palihapitiya (01:00:42): Now imagine if he had verified his account. He had his so security number. He had all that stuff in there. Just verify. That's it. Just information that says zero hedge is real. It's a real person. Yeah. And, you know, the rule is when you're at that level of verified, you can publish whatever you want. Yeah. David Friedberg (01:00:57): So you can you can say false statements as a real person. So Donald Trump is a real person. He's a verified account, and he's saying things that Twitter is then determining are false. or inflammatory -- I would Chamath Palihapitiya (01:01:07): rather, you know, them not try to do it, and I'd rather have punduits that you can believe in. So, like, the other problem is, like, look, when you have public figures, you have punditry around public figures. But the problem isn't what that person says. It's you can't believe the punditry because half of them are fake. So at some point, you have to break the cycle and somebody has to be real. Jason Calacanis (01:01:32): Well and this is the problem with the the Trump issue in a pandemic is 2 edge cases put together. And now we're figuring out what the actual cost of it is. Trump said masks are bullshit. You don't need to wear a mask. Blah blah blah. I choose not to wear a mask. I'm not gonna give people a satisfaction so you can wear a mask. Turns out masks are correct, we we should have put that or or should we have put in front of Trump's non mask comment hey, this is against what the guidelines are. Or the fact is the who said, the World Health Organization said you shouldn't wear masks. Then it turns out now we have a bunch of conservatives dying who didn't wear masks. No. Chamath Palihapitiya (01:02:13): I don't think I don't think you should have put anything there. Jason Calacanis (01:02:16): let all the conservatives who believe him die? Chamath Palihapitiya (01:02:19): It's it's not about letting conservatives die. I think that's a crazy way of positioning it. Like, he's allowed to have his opinion And really, like, if if anything, I think social media has shown that the way that we use to venerate like, veneration is sort of like it's it's kind of it's been disrupted by social media. Like, the idea that you venerate somebody because, like, they won an election in a moment, is so crazy because they are basically like you, and in many cases, may be dumber than you. David Sacks (01:02:47): With respect to I mean, all these ideas surrounding the idea that we need to regulate these platforms. I think we should just remember that the way stuff gets into your feed is that you make the decision to follow it. You know, these feeds are self curated. I mean, there is this issue about, well, you know, the algorithm does sort of emphasize or or sort of increase the volume. And, you know, we wanna make sure those algorithms, you know, are done in a a neutral way. They're not they're not biased somehow. But you know, the the the content that appears in people's feed is content they've they've chosen to see. Jason Calacanis (01:03:19): With the exception of trending topics on both platforms. David Sacks (01:03:23): Well, like I said, though, as long as those algorithms are unbiased and work in a speech neutral way, I think they're they're fine. But the, you know, the the the reason why Facebook has been boycotted is is that their they refused to sensor some of Donald Trump's tweets. You know? And but but you don't see those you don't see those posts rather unless you've chosen to follow them. Jason Calacanis (01:03:48): I I think it's crazy that they wanna ban him. Chamath Palihapitiya (01:03:51): Problem is it's a chain of it's a chain of fake accounts and real accounts Right? Let's be honest. It's just a combination of both that exist on both Facebook and Twitter to amplify content in ways that none of us really understand. And I would I would be very skeptical that anybody there really understands every single piece of content, how and why it gets weighted the way it does and, you know, like, I bet you that there's probably a way to tell whether an account is fake mean, obviously, they have system integrity tools to figure this out. That's there's no way you could have eliminated 6,000,000,000 accounts if that wasn't true. But then, you know, you choose not to suppress the weighting of those, or maybe you do suppress the weighting of them entirely. It's just an awful Jason Calacanis (01:04:34): -- David Sacks (01:04:34): You're talking about But but in terms of implication okay. So maybe maybe you can game the trending topics that way. But you can't get it in my feed. unless either I choose to follow you or you you pay to, you know, run an ad which my eyes are just trained to skip over. So I, you know, I I think if you were to Speaker 4 (01:04:55): ask the average person, do you believe David Sacks (01:04:55): that you are sort of influenced by deceptive content on Twitter and Facebook or you're sort of unduly influenced they would say no. You know, none of us believe that we are. But then if you ask Jason Calacanis (01:05:11): -- Chamath Palihapitiya (01:05:11): But if you if you said, do you interact in groups and forums with a bunch of people that you don't know, the answer Jason Calacanis (01:05:19): would be yes. Speaker 4 (01:05:21): I mean, David Sacks (01:05:21): what I'm saying is that the average person doesn't believe that they're unduly influenced but if you ask them, or do you think other people are? They would say yes. Chamath Palihapitiya (01:05:27): David, of course, like, it's like, you know, when you're having a fucking slurpee, it's like, you know, do you think that this is unduly gonna hurt you? No? Jason Calacanis (01:05:34): It's 1200 calories of liquid sugar. Alright. I think we beat this horse to death. There's no solution just on the edges. But Let's let's go to Amazon because I thought that this was a particularly interesting one. Amazon, I thought came out the best of everybody. and is the least likely to be broken up. I think some of you agree with that. What were your impressions on Amazon's performance and Amazon in terms of being broken up. Let's start with you, Friedberg, and then we'll go back to Chamath. David Friedberg (01:06:04): I think the intention of antitrust law is obviously is to protect consumers in tech markets and protect market pricing from being manipulated by monopolists or monopolies. And so, you know, the the the the point that was made about Walmart years ago is the same point that's being made about Amazon today, which is that they're crushing small local businesses And as a result, there is a lot of damage being done, and they are quote, unquote, too powerful. But the reality is that the the pricing effect of what they're doing is what needs to ultimately be scrutinized, and I think is what will ultimately drive whether or not these guys have either some massive penalty or get forced to break up. And so you ask yourself the question, look, if I'm gonna buy, call it, a mattress or or let's let's use something like a pillow, is it cheaper for me to buy that pillow as a consumer through Amazon or from the local store? Now what if the local store is put out of business because of Amazon? And now Amazon is the only place I can get a a pillow. Is the pillow now gonna be more expensive or less expensive than it would have been otherwise? And I think that is the lens by which we need to kind of assess, and the regulators will ultimately assess whether or not Amazon is causing harm in the marketplace because of its -- What do you mean its power? Jason Calacanis (01:07:20): Freeburn. David Friedberg (01:07:21): Look. I have several businesses that sell on Amazon. And it is fucking expensive. One of my companies I'm on the board of, we're we've been the number one food product on Amazon multiple times. and we we kind of slide up and down the top Jason Calacanis (01:07:35): 10 -- Can you say what that is? David Friedberg (01:07:37): Yeah. Soy linked. Soy linked. And so we sell a lot of soylent on Amazon. Yeah. And it is expensive, man. I mean, the fulfillment, the shipping, the advertising fees they force you to pay, I will tell you that as a business owner or a board member of a business that sells and I have several others that sell on Amazon too, it is a it is a grind and it is cheaper for us to sell directly through Shopify. Jason Calacanis (01:08:01): Why don't you just raise the price on Amazon? David Friedberg (01:08:04): So to some extent so Amazon this is actually part of the problem. So Amazon forces certain best pricing negotiations. If you're a large seller on Amazon, you have to make sure in order for them to promote you and make kind of a sponsored item and show you at the top of the list, you have to give them the best deal sort of like what Walmart does. Right? You can't have a cheaper price anywhere else. Got it. Jason Calacanis (01:08:24): So that was something that did not come up. They force you to have the best price there even if you charge more on your website. David Friedberg (01:08:31): In these negotiated deals. Yeah. And so you have to make sure that you're providing and I'm not sure what the deal is specifically with toilets. I don't wanna kinda speak it incorrectly here. Jason Calacanis (01:08:41): No. No. I've heard of the same thing from other folks. What if so -- Speaker 4 (01:08:43): That is kinda David Friedberg (01:08:43): part of what happens. And so I will tell you, like, it it is harder for it is cheaper for me to sell toilet. I I think it's cheaper for some of these products to be sold. I can tell you my other company, which we sell, it's cheaper for us to sell through retail stores than it is to sell on Amazon. We actually give up more margin selling on Amazon. Jason Calacanis (01:09:01): So how would David Friedberg (01:09:01): you do it? because of the volume and because they've aggregated all Jason Calacanis (01:09:05): the tiers. -- made the decision as an entrepreneur to sell you quinoa in all places even though you lose some margin, you make it back in aggregate. David Friedberg (01:09:12): Well, goes to the market -- -- capital isn't to me. Well, this goes to the market problem because now I as a I have less choice as a business owner because the only place I can find consumers in this online marketplace called Amazon, I can no longer go sell at 50 local grocery stores because people don't go to the freaking local grocery stores anymore. that's obviously a little bit of an extreme statement, but let's say I'm a pillow guy. I can't go sell at Jason Calacanis (01:09:32): 50 David Friedberg (01:09:33): pillow stores because they've all been shut down because all the consumers go to Amazon. Jason Calacanis (01:09:36): you also sell at Target and Walmart and those other competitors who seem to be doing just, you know, pretty well, actually. David Friedberg (01:09:42): They're doing well. Yeah. And and a lot of people have said that they're the kind of you know, the exceptions, but there's a 1000 versions of Sears and other stores that haven't done as well. Walmart And Target just happened to be extremely well run businesses. but there's nothing fundamental about those businesses. Jason Calacanis (01:09:55): -- kicked you off the platform and said we're not gonna allow third party sellers? Would you be happier or would you be sadder? David Friedberg (01:10:01): It would be sadder. Jason Calacanis (01:10:02): Got it. Chamath, what are your thoughts? Amazon specific. Chamath Palihapitiya (01:10:06): Yeah. I think David said it really well upfront. which is that it's a it's kind of a when and not an if. So it's, you know, Amazon today, I don't think is at risk just because its end market is so big. But I think within 5 or 10 years, it definitely will be looked at through the same lens as Facebook and Google, and, actually, the just those Jason Calacanis (01:10:32): 2. Speaker 4 (01:10:33): Yeah. Look. Chamath Palihapitiya (01:10:33): And I and I think David said it also really well. Like, the antitrust law that you would get, you know, to be successful if applied to Facebook and Google has nothing to do with users and content, and it has everything to do with the pricing of the ads to their customers. And if anybody actually were smart enough to figure out whether there was some way in which their auctions were working that was effectively pricing inventory in a market, quote unquote, or in a system manipulated way, that's probably the best hook to to nab one of these folks in antitrust law. But other than that, it's gonna be regulation. In terms of Amazon, I think they're gonna get away unscathed. What's incredible, by the way, is, you know, 2 days later, they're like, hey. By the way, we just got an FCC license, and we're gonna launch a $10,000,000,000 satellite constellation and you know, if you if you looked at their RFP to to the f to the FCC, the number of people that, you know, basically complained and ride, it was incredible. David Friedberg (01:11:32): By the way, I think this is a huge important point that we haven't made, which is the benefit of scale for large innovative companies. there is no way any company would have out of the blue been able to afford a $10,000,000,000 distributed satellite program without having customers and all this other stuff lined up. Amazon can afford to take that risk. just like Alphabet has taken the risk with self driving cars and did so before anyone else for many years. Jason Calacanis (01:11:53): Which is a net benefit for society. Correct, Dave? David Friedberg (01:11:55): Which is a net benefit for society. So by having scale by having incredible profits by and then by reinvesting it in r and d, creating jobs, innovating, it's the only way this kind of stuff is gonna get done. you're not gonna get it done by breaking up these companies and having a 100 companies that only have $10,000,000 of profit each. And then each of them are you know, no one at all can afford to do these grand important projects that that move markets forward. Jason Calacanis (01:12:18): Ultimately, for humanity, Friedberg, you see these $1,000,000,000,000 plus companies as because they can make those big swings a net benefit for humanity. David Friedberg (01:12:27): As a technologist and as a kind of person that hopes for the future, I hope I hope that they that that these sorts of companies can continue to persist and that they're led by people that wanna take innovative risk with R&D Dollars. And by the way, if they don't, they're gonna fucking fail eventually. Right? It's these guys that are leading these companies and and putting these crazy bets on crazy new ideas that are allowing these businesses to remain competitive. And if they didn't, and, you know, some big company manager were to come in and start running these things and distributing cash and dividends back to shareholders, these wouldn't be happening and and, you know, capitalism would take care of itself. And then the next big innovative risk taker that can generate a profit and reinvest profit in a smart way would end up winning in the marketplace. So Jason Calacanis (01:13:12): -- Zach, you are a big investor in SpaceX at Kraft Ventures. I understand. when you see Bezos copy every single thing Elon does from, you know, launching the rockets to then putting up the satellites, do you think he's just a copycat? David Sacks (01:13:30): Well, I you know, I I think he's the scariest monopolist out of the the whole bunch. You know, if you look at kind of Amazon versus, say, Google or Facebook or Apple. I mean, the those other companies are sort of sticking to their original footprint, whereas Amazon keeps expanding into new areas. You know, it's that that whole mantra has about your profit as my opportunity. And so, yeah, with each, you know, with with each advancement, make as they get into you know, as they get to a new level of scale, they then turn around and and seek to take over kind of the the, you know, the areas that that their vendors or or business partners are operating. And so, you know, it started with, 1st, they did retail. you know, books, and then they expand into other areas of retail. And then they take over infrastructure, and now there's talk about them getting into to freight or trucking. And so, yeah, they keep expanding into these new areas, and it's it's really a statement about our politics. I agree with Chamath that that Bezos went pretty much unscathed. And I think it has a lot to do with you know, he he did win the Internet with that opening statement that he gave. It was really sort of great, you know, rags to riches only in America type story. And and so I think I agree as to why he's gonna get away pretty unscathed. But I I do think that the they are the scariest monopolist of the bunch. Jason Calacanis (01:14:47): Well, comment specifically on him copying every one of Elon Musk's ideas. David Sacks (01:14:54): Well, you know, copying is it it is it is sort of a part of the game. You know? It is part of the game. And I've I've heard you attack Zuckerberg for doing the same thing. And, you know, the look. I I get it. You know, we we we prize innovation and we we we love innovators. But as soon as you say that you can't that other companies can't copy those innovations, you do stifle progress and Jason Calacanis (01:15:19): I I look at it as more how consistently you do you do that as your playbook when you look at Amazon Basics. This is the point I wanted to make when and I made in my my earlier podcast, which was, you know, the Amazon Basics and the 3rd party seller system is the thing that they keyed in on these hearings. They did not key in on the issue of that Friedberg brought up, which was, what is the margin they're taking from those third party sellers, which I think would have been a much more depth approach to questioning them But when it comes to 3rd party sellers, the fact is they're allowing people to compete with them on their own platform, which drives prices so low And when they make a better USB C cable, that doesn't take a genius to make a better cable. So do you think Amazon Basics should be allowed and is great for humanity, or do you think that that using of the data because they have the sales data on it is in some way abhorrent and a problem given the way antitrust laws are currently framed for Saks. David Sacks (01:16:29): Well okay. So I I think this is an area where so the the area you're talking about is the way that these platforms treat the applications or small businesses that operate on their platforms. And I do think this is a a good area for for congress to keep scrutinizing. you there there there there's a saying in in in chess that that the threat is greater than the execution, so sort of a chess strategy principle. I think that's true here where We I I I think the execution would be a disaster if we actually impose a lot of these rules if we broke up these companies, if we stopped Amazon from innovating. I think that would be a disaster for for for those companies and for the economy. because I do think they they do a lot of good things. in a weird way, I think we have to keep threatening to to do those things in order to get these companies not to do anti competitive things. I mean, we heard Bezos say that he couldn't guarantee that they weren't using their their their sellers' data to to to to in inappropriate ways, basically, Amazon to to break Amazon's own policy. And so I think you do have to apply this kind of scrutiny to these companies Because I I don't think we wanna be retroactively, you know, remediating a situation. I don't think we wanna be breaking them up or doing something like that. But I do think we want them second guessing these anti competitive decisions before they actually happen. Because otherwise, you know -- So some Jason Calacanis (01:17:54): scrutiny, some rules But we certainly don't wanna ankle them versus their competitors in China as we wrap up here because we're getting way past our hour. We're now at 80 minutes, and we set a max in 90 here is what we all agreed on. I wanna talk about the election. We are now at the 100 day mark We all thought Biden was a shoe in. Now I have my own thesis. I wanna float it and see what you guys think. you had Trump start wearing a mask last week, telling everybody they should wear masks. Now there's universal discussion of wearing masks We've got a little bit of vaccine hope, and then we'll get to Friedberg's position on, is that vaccine false gold or is it actual reality? But We know that masks are gonna take 3 or 4 weeks if they're implemented properly for us see the caseload go down, which then the caseload starts going down in 3 or 4 weeks after that, the debts would start going down. We may have even seen a little plateau in the number of cases. is ramping up. We hit a record 850 or 900,000 just yesterday at the time of taping, I think, on 29th July. Now my thesis is, Trump goes all in on masks. The vaccine starts to show promise. right as the debates start. He gets in there with Biden. We see case loads go down. We see debts plummet. we get down under 250 deaths per day in America. By September 15th, the market rips, and on sept end of September, we have the presidential debate. Biden dunks on a senile or maybe not crisp Biden Trump sells in. And we were just talking 2 months ago, anything could happen, but Trump was definitely not gonna be there. Let's go around the horn, Friedberg, vaccine false gold, or really promising, and what happens in the election? David Friedberg (01:19:50): I think there's tons of promise with vaccine news in the next 2 months 3 months. I guess the point is, You're gonna hear more upside than you're gonna hear downside news on vaccines for sure. You know, whether or not we have a vaccine and by when and yada yada Jason Calacanis (01:20:07): -- Present a chance we have a vaccine. David Friedberg (01:20:09): we're gonna have a vaccine. I think it's a function of how many doses at at what point in time. And you know, there there is this 30,000 trial happening with Moderna right now. There's a Russian vaccine that just got approved yesterday in Russia that they're saying it's ready to go, and they're starting to distribute it. So there is a vax there are vaccines. Right? This is a a known known. So so that news will only continue to improve and build, and there'll only be more and more indications of success with vaccines between now and November. How that affects markets? I think I'm not sure that drives markets as much as some of the other stuff that's going on in markets with the with the fed and and with policy and with stimulus packages. I think those are are frankly important drivers right now. And how much the markets ultimately affect the election? I don't know. Speaker 4 (01:21:00): So, yeah, it's still it's it's all still pretty uncertain. Who's gonna win the I I think it's pretty uncertain. David Friedberg (01:21:01): I I Okay. You have to put your entire Jason Calacanis (01:21:10): net worth on one person go? Yeah. Speaker 4 (01:21:12): I I I I still think Trump is I Chamath Palihapitiya (01:21:13): I I David Friedberg (01:21:19): I kind of have been vacillating on this. I I think Trump is probably only gonna improve from here on out Jason Calacanis (01:21:26): So your entire net worth is on the line in 3, 2, place your bet. David Friedberg (01:21:32): I'd go Trump. Wow. Jason Calacanis (01:21:34): Wow. It's David Sacks (01:21:34): still it's it's still it's still to me I mean, Trump has has gotta be the huge underdog here. I mean, right now, it looks like Biden's gonna win. I mean, his basement strategy could backfire in the sense that if, you know, fundamental conditions improve with respect to COVID or the economy, the fact that he hasn't said anything, done anything, gone anywhere You know, it it it it could it could turn out to be a mistake. But right now, it it looks like it's working. And and, you know, Trump seems to be completely knocked off his game. You know, just earlier in the week, he floated this trial balloon about delaying the the election that was completely shot down by Republicans. And it's When you saw that, what did you Jason Calacanis (01:22:14): think as a Republican? When you saw him tweet What did you think? What was your emotional, visceral reaction as our token? David Sacks (01:22:20): You know, I'm not yeah. I I I don't I don't necessarily identify with with partisan politics. So let me just I have to state that book. Jason Calacanis (01:22:27): But but we sure react you know, as an American to him saying delayed Speaker 4 (01:22:30): the election. David Sacks (01:22:30): Of course. Everybody everybody showed down for Jason Calacanis (01:22:32): your reaction. David Sacks (01:22:34): Everybody shot it down for good Jason Calacanis (01:22:35): reason or not. Your reaction set. David Sacks (01:22:37): Of course, we're not gonna delay the election. We've, you know, you know, we we we haven't delayed the we didn't delay Speaker 4 (01:22:44): the election to to fight war war war war war war war war war war war war war war war war war war war war war war war war David Sacks (01:22:44): war war war war war war war war war war Speaker 4 (01:22:44): war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war war Jason Calacanis (01:22:46): war war war too. 2. war 2. 2. You can be a Republican. Okay. Speaker 4 (01:22:53): Your entire net worth, we have to wrap your entire net worth, Saxx. You could right now, Jason Calacanis (01:22:54): 3, 2, David Sacks (01:23:00): Yeah. Right now, looks like Brian's gonna win that Trump's Trump's been knocked off his game. And and me to say, like, I I think the the problem that Trump has right now is he's a salesman without a sales pitch. You know, you you go back to the state of the union pre COVID. He had it all worked out. He was gonna run on the greatest economy ever. Keep America great. that issue's been taken away from him, and it seems like he's still trying to regain his footing. He's trying to figure out what to run on. And the fact that he can't do these rallies, which were really you know, the fact that he was able to go in 2016 to these swing states, he would be, you know, flying around on his plane and and and he would 3 he did 3 rallies a day in these swing states with tens of thousands of people. Jason Calacanis (01:23:38): He wanted it. He wanted to win. David Sacks (01:23:40): It was it was it was that, and they gave him a way to go over the heads of the media and speak directly to the people and then those people talk to other people. There's a Speaker 4 (01:23:47): lot of David Sacks (01:23:47): word-of-mouth. And so he he the inability for him to hold those rallies, I think, has just been devastating for the type of campaigning that he likes to do. And so in a weird way, we have less than a 100 days to the election, but it feels like the campaign hasn't really started yet because Trump can't do rallies and Biden hasn't left his basement. Okay. Jason Calacanis (01:24:08): Tremoth. entire net worth on the line. All specs, spec b, spec c, spec d, whatever you got spacked up. all your specs on the line, everything, the warriors position. 3322. Chamath Palihapitiya (01:24:24): But but but we don't need to guess, but I'll tell you why. You know, we had a 33% drop in GDP. We have double digit unemployment. And I think Trump's real path to winning the White House which we talked about before was getting an enormous stimulus bill passed and he didn't force the Republican senate to the table to make sure that these unemployment benefits didn't roll off. Now there's a very practical problem with these unemployment benefits, which is that it is not administered at the federal level. It's administered by literally 50 state agencies that run relatively decrepit software. Now just so you guys know, why do we pick $600? It was an estimated numerical average because what the Republicans really wanted to do was just top it up. You know, whatever you used to get to get to a 100, and it was technically not feasible to implement across 50 different insurance. Jason Calacanis (01:25:21): So somebody in Boise, Idaho is different than somebody in New York. Chamath Palihapitiya (01:25:27): So they they were like, ah, Jason Calacanis (01:25:28): 600 Chamath Palihapitiya (01:25:28): bucks. So my point is it's gonna take 4 to 8 weeks to reimplement unemployment insurance once we decide what we're going to do. So that basically, if you start it today, puts you somewhere between September 1 and October 1. And the you know, so you have then 30 days to basically catch a positive tailwind or 60 days. So call it midpoint 45 days. you know, you have now federal eviction laws that are rolling off. So I think that it's setting itself up for a very, very difficult path. He just stopped spending, I believe, in Michigan. Trump did, which is, you know, not a good sign. He actually has overspent in Georgia So if you look at the facts on the ground Jason Calacanis (01:26:16): Your entire net worth goes on? Chamath Palihapitiya (01:26:18): No. Biden, it's a it's a language and campaign. As of today, David is right. He's a salesman without a pitch. And, unfortunately, he's a the path isn't clear. The path should have been paid Jason Calacanis (01:26:29): with money. It's such a no brainer. David Friedberg (01:26:32): Here. Let me let me give you one live call. Jason Calacanis (01:26:34): all that money too, and why would you stop printing the money? If you gave everybody $1200 6 weeks of unemployment, why not just do it for another 6 weeks and give everybody another 1200 don't understand why that's such a difficult decision for Trump Friedberg. Speaker 4 (01:26:48): Let let David Friedberg (01:26:49): me give you a scary poll that just came out by YouGov. It says, 55% of supporters of Donald Trump say that they will not accept the election victory of Joe Biden if mail in votes are are are allowed. Wow. So -- Cash. You know, the the the framing of this is actually a little bit more serious than just who's gonna win. There is a further polarization, constitutional crisis this question, rioting, you know, whatever disregard for the election entirely kind of moment coming up here because Trump and others have kind of framed this as such a non election election because it's all fake and it's all fake news and it you know, this is all part of the conspiracy. So there is something scary brewing, I think. And that that's what I'm kinda most interested in tracking is really where does this all go? Jason Calacanis (01:27:35): Percentage chance that we get to a constitutional crisis Trump says I'm not leaving the White House on a percentage basis, Friedberg. David Friedberg (01:27:42): I don't think he'll say I'm not leaving the White House. I think he's gonna be fucking easy to go back to wherever he's gonna go. Okay. Yeah. But I think it it it I think there's gonna be other ramifications that are worth us figuring out and thinking about because that's the scary stuff that's coming David Sacks (01:27:55): Okay. That's a 25% chance of a constitutional crisis. I think if the election's close, we could easily have, like, a Gore, v, Bush. type situation. Yeah. It could be very damaging for for the republic. Chamath Palihapitiya (01:28:07): I do not think there'll be a hanging chat issue in this election. This is going to be One way or the other incredibly decisive on an electoral college level. Jason Calacanis (01:28:15): Okay. Final. Chamath Palihapitiya (01:28:16): I don't -- It's not set up for it to be that that close. Speaker 4 (01:28:20): Okay. David Sacks (01:28:20): Well, I I I don't think the election right now, it's not trying to be close at all. It's trying to be a blowout. And so I think we'll avoid the the crisis because it's not closed and at looks like Biden's gonna run away with it. But if it does get super close, you know, I could imagine there being a crisis based on people not accepting if the margin of error is within the margin of these mail in ballots and you have, you know, 30, 40% of the population saying they're not gonna accept it, I'm I'm not saying we'll have like a legal crisis, but I think you could have a legitimacy crisis. It can be very bad for the republic. Jason Calacanis (01:28:53): Not as bad as Trump's presidency clearly. So final question final final question. If Trump believes he's not gonna win, and he's essentially given up right now, which it feels like he's kinda given up. What would do you think who would win if Trump says Nikki Haley and Pence can run. I've done such an amazing job. I've been the best president in the history of the union, but I wanna get back to my life and I think Pence Nikki Helly should go for it what happens and who wins, Saxx. Too late for that? Chamath Palihapitiya (01:29:25): wait for that. You can't you can't put Pence and Nikki Haley on the ballot. Jason Calacanis (01:29:28): Why not? Of course, you can if he says I'm feeling under it. If he bows out, the Republicans would have to pick a successor. It's not a new third party that the Republicans would be allowed to pick a successor. If he said, I'm not doing it for, you know, health reasons. Whatever the reason he comes up with, who wins, Nikki Halle, now? Too silly? Too silly. I think he might drop out. I think there I'm putting it out there. I think it's a 5% chance he doesn't wanna be demolished. And he says, you know what? I'll take the deal. You agree to not prosecute me getting out of here. I'll take it and and -- David Friedberg (01:30:01): I changed I changed my bet to Joe Biden. I've changed my bet. Jason Calacanis (01:30:05): After this, after you've risked your whole not worth you change to Joe Biden. David Sacks (01:30:08): Well, he's he's clearly the favorite right now, and the question is whether there was still time for there to be a change. Chamath Palihapitiya (01:30:14): I mean, honestly, we we I think we should stop betting on what the outcome is. I think it's stupid. I think what we should really be worried about is -- 10 to Jason Calacanis (01:30:21): 10. -- Chamath Palihapitiya (01:30:21): what? what are we doing, like, letting tens of millions of Speaker 4 (01:30:25): Americans roll off of unemployment Chamath Palihapitiya (01:30:25): insurance with 0 like, the Republican senate went on vacation. It's ridiculous. Jason Calacanis (01:30:34): I mean, they should all be fired. It's it's the craziest thing. We have the biggest crisis in our lifetime. If you roll up the last three crises, 911.com bust, and the great recession, Those three pale in comparison to the magnitude of this one, and these motherfuckers are going on vacation. I agree with you. It's out rages. David Sacks (01:30:54): I I don't think partisan politics are that interesting, but I I think they will eventually pass a bill. I think the the the issue on the unemployment is not that the Republicans don't support an extension of unemployment. But the the magnitude of the unemployment now exceeds what workers would get if they went back to work. And so I think they're concerned about creating a disincentive for for workers to come out Speaker 4 (01:31:16): to work. Jason Calacanis (01:31:16): -- difference. Why not make it $300? Chamath Palihapitiya (01:31:19): Honestly, it is such fake fucking news. Like, it's, like, it has been shown that people then end up spending that money. Like, I don't know if you guys saw, but, like, there are industries that are posting. It's not just Facebook, Amazon, and Google, posting meat and beets like you wouldn't believe in boating, in housing, people are spending this money. It drives GDP. So whether you put Jason Calacanis (01:31:40): 600 Chamath Palihapitiya (01:31:40): or 1200 or 1200 into people's pockets, they have a proclivity to spend it. Jason Calacanis (01:31:45): They should have gotten something done David Sacks (01:31:48): Trump Trump as well as all the Republicans are up for reelection, I think, would just cave on this issue. And and I I I think it will get done. The the republicans are opposing it are the ones who aren't up for reelection and are concerned about debt. You know, that's the that's the that's the concern that all of a sudden people have. Jason Calacanis (01:32:05): matter if we go into a depression, David, why not what the incremental 6 weeks of unemployment put it at $300 but get something done, David. Why are you not getting something done, David Sacks (01:32:15): David? Why is Jason Calacanis (01:32:18): your team fucking this off, David? Speaker 4 (01:32:20): Yeah. I David Sacks (01:32:20): don't I don't wear a jersey. I'm not on a team. There but I I think they will get something done. I mean, I'm not -- When Jason Calacanis (01:32:26): they're back from vacation, do you think they should have gone a vacation? Chamath Palihapitiya (01:32:30): They're called their own vacation, David. They can't. They gotta come back to work. These guys went Jason Calacanis (01:32:34): duck hunting instead of taking care Chamath Palihapitiya (01:32:36): of the 15 moon. Your team with Donald in Washington, DC. David Sacks (01:32:40): Because there there obviously, there's a lot there's enough Republicans who wanna get something done. I mean, why not blame the Democrats for being too intransigent? Chamath Palihapitiya (01:32:47): Sorry. What I'm saying is it's not Republican. I'm saying the entire -- No. Speaker 4 (01:32:50): The entire Jason Calacanis (01:32:51): -- We're breaking your jobs, Saxx. The the entire group should not have gone on vacation The Chamath Palihapitiya (01:32:57): entire half half half of the congress is gone. They're they're tough to be fast. Jason Calacanis (01:33:02): Where are they? What What are they doing that's more important? David Sacks (01:33:06): Maybe they're hanging out in their basement like like Biden. Jason Calacanis (01:33:09): I love you guys. Alright. Everybody stay safe. on behalf of the dictator himself, Besty C, the the Spak Maestro himself. Stay safe. Chamath on behalf of the Queen of Kenwa, the Friedberg himself. Stay safe, David Friedberg, in whichever one of your 3 houses you're in right now. And Ed to rain, man. He's definitely burnt don't burn baby. He's definitely a great driver in the driveway. Yeah. Yeah. Definitely still. Chamath Palihapitiya (01:33:47): Yeah. Yeah. Jason Calacanis (01:33:47): Yeah. He's definitely investing. Wapner. Wapner and, of course, have physics. And, of course, he's still investing from Craft. Certainly, Kraft Fund's still investing. We'll see you all next time on the 6 most popular podcast out of the gate. Let's see. Maybe if you tell your friends about this podcast will go to number 1 on the technology list. Love you, boys. Stay safe. Can't wait to play poker. Bye. Great job, everybody.