反垄断的标准与执法、科技股重定价、实验室泄漏论的遮掩

David Friedberg (00:00:00): Is Chemata in a room with his PR crew right now? Like, rehearsing and practicing and -- David Sacks (00:00:05): This pod is ruined. Jason Calacanis (00:00:08): The Leather Winter Ride. Rainman, David Saffens. Speaker 4 (00:00:15): And it says open source it to hands and make discoveries. Love you. Chamath Palihapitiya (00:00:25): Hey, everybody. So I just wanted to make sure based on last week's pod, it was absolutely clear. I care about human rights. Many of you know my origin story, but for those of you that don't, I was born in a country that's no stranger to civil war and religious and political persecution. Growing up, my family and I felt those effects. It affected our safety. It's in part what led my family to file for refugee status and stay in Canada. So this is a real part of my lived experience. That said, you know, I realized that what I said last week lacked empathy, particularly towards others who are dealing with persecution. In this case, the weakest. And based on what I read this week, I think what's happening to them in Western China is a terrible situation. I also wanna talk about this idea about nobody caring. Look, if we take a step back and replace Uighur with other really important issues like the conflict in Yemen, the potential war in the Ukraine, gun control, school shootings, health care equity. We're faced with horrible events every day. However, the unfortunate state of the world today is that we've also normalized this routine of being confronted with something tragic or horrible or unjust and being allowed to react with thoughts and prayers. And this was the real intent of what I was trying to get across. So when I talk about my line, it's not about whether something matters or not. It's about which issues of all the important issues we face every day, where I have the expertise and I believe I have the ability to have a real impact even if just by a little. For me, those areas happen to be climate change, life sciences, and deep tech But just because this is where I spend my time, it's not to take away from any of the real work any of you are doing in other areas. And then lastly, I just wanted to explain to people who may be new to the pod because of last week. Chamath Palihapitiya (00:02:12): And this is a place where four of us, four friends talk about A whole wide range of things. We explore our curiosities. We try to learn from each other. We challenge each other, but we've always done it in a really supportive space. And I hope you keep that in mind as you listen and watch going forward, and, hopefully, you can you can bring some of that to your own conversations. That's all I have to say. Jason Calacanis (00:02:33): Well said. David Friedberg (00:02:35): Zach, I mean, I I know you have something to say, but I'll say I got a lot of messages this past week after the show where which which I felt a little bit hurt by and mischaracterized, and maybe it was simply, I said the wrong thing at the wrong time. And so I I wanna just be very clear about a couple of points if I can take a minute. That's alright with you guys. Yeah. So I said I I just wanted to I was gonna actually send this out on Twitter, and I decided it was better just to address it on the pod. So to be clear, I strongly believe in and support absolute freedom of all people. And this means de facto, I strongly disagree with the suppression of free speech, denial of religious freedom, imprisonment, harm, capital punishment, slavery, and genocide. I thought this was obvious when we were having our conversation. I did not know I needed to be -- -- Jason Calacanis (00:03:26): not in favor of genocide. David Friedberg (00:03:27): I'm not in favor of genocide. I'm not in favor of slavery or capital punishment or suppression of religious freedom. I thought this was obvious. The conversation I tried to have was the wrong conversation at the wrong time, which was to try to talk about the broader China v US narrative, that is swelling and will continue to swell this decade. I think that the primary function of civilized society or any advance social system is to take care of and protect those that cannot take care of or protect themselves, and this is usually done by government. when government fails and government is in fact the oppressor, I think it is the responsibility of other governments and other peoples to step in and have a voice and to take action. And so that is that is kind of my moral framework. I think it's important. I don't deny any of the harm being done to the Uighur population in China. I don't agree with it on principal basis, and I don't think that what the Chinese government is doing is right. And the point that I was trying to make during our conversation was a very one that I think got completely lost in the moment, which was really just about what's going on with the China US narrative right now I'm not pro China, I'm also not anti China. I am particularly interested in understanding the broader China US dynamic, and what it means for the world over the coming decade decades, I think it's really important for us when we evaluate these things and to understand them. to not just take sides, but to understand the context in the broadest way possible, and that's why I am trying to get both sides and understand the mindset of the people that are involved in running these governments and the way that this of this world is going to evolve as this economic tension continues to mount. And so that that's where I was trying to go. And I was just trying to highlight where I think everything is headed over the next decade or 2, independent of what are obvious human rights issues going on. David Friedberg (00:05:18): So let me just stop there and say thanks for letting me say that, but that was important for me to just be really clear on because clearly, I wasn't clear last week. So -- Jason Calacanis (00:05:26): Yeah. Well and I I'll I'll just add to what you said that I also thought it was implied that you care about these things and that you're not in favor of them. I I didn't think that need to be spoken. Yeah. So I think it's it's nice that you're clarifying it, but I think any reasonable person would understand that if you care deeply as a vegan about factory farming, that you also care about humans and you know, genocide and and torture or or whatever issue. So I think it's like an your statement is So obvious that I I wonder if you even had to have made it, but I'm glad you did. Saks? David Sacks (00:05:59): Okay. So I guess, first, I I I should say that you know, what's happening to the Uighurs and China's indefensible. You've got reports of upwards of a 1,000,000, you know, of these people being held in detention camps or so reports of mass sterilization and rape. It's like ethnic cleansing over there. So that's absolutely wrong, and it's one of a growing list of issues that we have serious problems with China on, which include theft or intellectual property, cyber espionage, the bullying of their neighbors, There are crackdown on dissidents. The list goes on and on. I mean, I think we have to be clear eyed about the challenge and the threat that China represents. And we've discussed that on this pod many times. That being said, you know, what I think we saw this week was really about cancel culture. Right? You had, in response to last week's pod, you have this online mob form. And they wanna take what Jamal said and interpret in the worst possible light so they can turn the outrage meter up to 11. And everyone gets to basically go on Twitter and virtue signal and say what great people they are because Chamath is a bad person. And I just wanna speak to that issue. I mean, there's a huge amount of hypocrisy going on in that. Because how many of the people who are tweeting their outrage and their denunciation of Chamath are doing it from a device made by forced labor in China, wearing their Nike's made by forced labor in China on their way to Target to buy cheap goods made in China. How many of those people have actually lifted a finger in the real world to help the Uighurs? How many of them have sacrificed an economic benefit? in any way. And so when Shamas said nobody cares, I thought it was a really startling statement by him. But if you define caring as doing something more than just virtue signaling and expressing your feelings, as actually making a sacrifice or taking a risk in the real world, I thought he was frankly telling us a very uncomfortable truth. We haven't really most of us done anything. And in that sense, I think the reason why his comments hit such a nerve I don't think you get the kind of pylon that we got unless he's saying something that's hitting a nerve. And I think the nerve the thing that he exposed is that We're not really doing more than virtue signaling on this issue. And then came all the, you know, all the hypocrites. David Sacks (00:08:26): You've got the NBA denouncing him issuing a statement, when what have they done? I mean, when Daryl Morey spoke up on behalf the protesters in Hong Kong, the NBA shut down and sanctioned him. And, you know, LeBron James said he was uneducated. Actually, I think, turmoil was pretty educated about what's going on. So you've got those hypocrites. You got the White House issuing a statement disavowing Chamath. But Hunter Biden went over to China to manage billings dollars for them and profited by his business dealings over there. So there are a bunch of hypocrites, and the list goes on and on. And so, you know, I think that if in order for the mob to summon the outrage that it summons, it requires them to I would say, 1st, put the worst possible light on what Joth is saying and to ignore, I'd say, the fundamental truth of it. And second, to engage in this massive hypocrisy. And that is the way that Cancer Culture operates, and I don't think we should buy into it. So I appreciate what what Shamas said. I think he's clarifying his remarks. He's showing that He does care and he does of empathy as we all should. But I think there was a fundamental truth in what Shamas said last week, and that is what people are so uncomfortable with. Jason Calacanis (00:09:38): Okay. Well said, I have feelings. And most of all, I'm I'm thankful we had the discussion. The goal of this pod, I think what makes it special and why y'all who are listening, come here every week is because you know we're gonna honest with you, and and we're gonna tackle these hard discussions. And I think Friedberg comments and Saks's comments really explain that and and what our intent here is. And is it human rights is one of the hardest issues to discuss? That's why you don't hear it being discussed. And there are not easy answers. And I think, you know, I was challenged by my besties on the episode and their questions and their challenges were absolutely critical. Yeah. Yes. How can we care about one group of people when the people in our backyard were not caring about Are we going to invade countries? These are very nuanced, difficult questions, but we must have this discussion. And if we try to cancel people with a 20 second clip that looks completely different if you look at the 2 minute clip where you take the time to have a 40 minute listen of the the whole segment, you get a totally different picture. And I I think it's very important to raise awareness about human rights and it is an issue that I have been passionate about my whole life. And I'm not trying to verge your signal or score any points here, but I know firsthand that raising awareness and having the discussions reduces the violations because dictators' despots and people doing this kind of stuff do not want the heat of what happened this past week. And what happened this past week is that more awareness was raised about the Uighurs' and the situation that they're going through. I think then, you know, as somebody who's modelled this situation than I've seen in the last couple of years. Perhaps this was a tipping point. And that is something good that can come out of that discussion. Jason Calacanis (00:11:25): Now on a personal basis, I have had some feelings of guilt. because I it was very hard for me to watch what happened to Chamath this week and to watch people dunking on him. And then let's face it. I brought the topic up. and I dug in with my feelings, and it got a little heated. And and I am suddenly being portrayed as, you know, a a hero in this discussion. that's not the intent. And there's there's no hero or villain in this. There is a hard discussion in this. and I am extremely proud of my friendship with each of you, especially you too much. I am extremely proud of your candidness and tackling these issues and making people think about them. And, you know, I'm just so proud to be friends with each of you and I'm so proud of the work we hear we do hear every week. And I think it's important work, and I feel like I get smarter every week. And and I hope the audience does too. I hope we can keep having these discussions. David Friedberg (00:12:22): And Can we now make fun of each other? Jason Calacanis (00:12:24): Yeah. Now let's yeah. Make fun of each other. I mean, I don't know if we're allowed to laugh This is, like, so serious and heavy, but David Sacks (00:12:30): So what you're saying is thank you, Shamalff. David Friedberg (00:12:34): I don't now that It cut for 20 seconds. I'm gonna get cancelled. Jason Calicadis today. Jason. But Saks's point about I mean, look, we've talked about cancel culture a lot on this show. You know, we've always been, I think, generally able to be 3rd party observer to what's happened. And it was really interesting to go through the cycle this week where, you know, there was just kind of an an echoing narrative on one thing that was said with one direction. There were a few pieces, though, Chamath. Right? I mean, it wasn't there a piece from the Atlantic and some other pieces that kind of highlighted that things that you said were things that a lot of people won't say, and that's what was really so shocking for so many people. What's the Chamath Palihapitiya (00:13:17): what's the Peter Thiel comment on this whole on all of this stuff. Yeah. David Friedberg (00:13:21): He said if if no one's saying it, it's probably true. David Sacks (00:13:24): Or if you're not allowed to say it, it's probably true. Chamath Palihapitiya (00:13:27): Yep. If you're not allowed to say it. Yeah. David Friedberg (00:13:29): But, yeah, it was it David Sacks (00:13:31): was really -- -- think based on the the mob that formed, And, you know, it's already kinda blown over, and that's the way this kinda cancel culture starts. But for that sort of that white hot really intense day or David Friedberg (00:13:42): 2, David Sacks (00:13:42): you would think that, like, Chamath had practiced genocide himself. You know? You know, because everybody comes out in the way that they make themselves feel better is by virtue signaling on this issue. And, again, I would just say that well, I think we should be thinking about what do we do You know, how do we actually make a difference? Because I don't think just virtually on the issue is is gonna do it. And, you know, at the same time that this mob was forming against Chamath, we had a 2 hour Biden press conference in which Biden never mentioned the Uighurs' ones, the press corps never mentioned the Uighurs' ones. So does that mean the Uighurs' are below their line? you know, why wasn't it mentioned? You know, shouldn't we be ganging up on Biden? Why is you know, why is the press ganging up on Chamath when they're not ganging up on Biden for So there is a fair amount of hypocrisy here. I actually think Jason, I think you make an excellent point that by discussing these issues and raising these issues, it creates a little bit of a check on the people perpetrating these atrocities because they don't like to be exposed that way. And, you know, maybe we we should be boycotting the Beijing Olympics. I mean, maybe that should be on the table. Maybe we should be boycotting the NBA. I mean, let's have that conversation. Jason Calacanis (00:14:59): Yeah. Or maybe everybody who goes there. I wouldn't wanna see the athletes miss the Olympics. but maybe they could each just raise their hand and and do a you or some sort of a signal to show they support the situation or they're aware of it. with the Uighurs. There there could be some, you know, modest protest or statement they could make without ruining, you know, their lives work. I I always hate when the Olympics get canceled for some political reason because I think those people work so hard for it. But racing awareness, you know, is a noble goal in all of this. and then also doing things is a noble goal. And yeah. I mean, I I I I it was very weird to watch the the mob form and then dissipate, and and just who was, you know, taking the time to actually listen to the full it was clear from that Atlantic article and some of the nuance takes that they listen to the full discussion because there are bullet points here, like, like, there there was somebody who asked me a very challenging question. I think it might have been you, Freeburg. Like, are we going to start invading countries over human rights? And then there's more suffering in death and pain from the wars? And and and when do you decide as the the democracies of the world to invade the dictatorships of the world to promote human rights. Like, this is a very difficult issue that the world has had to deal with sadly before, and there is no easy answer there. You know what I -- Right. I I think that -- This David Sacks (00:16:22): is this is a point that I also tried to make on the last episode. Like Friedberg did, which is I I think it's I think it's actually great to have these ideals. And we should have moral clarity about what's happening. And I think it it what's happening is wrong. It's outrageous. It's an atrocity. But but the question is what we do about it. And and the the the reality is, even though it's important to speak out about human rights, these types of fulminations about human rights when they become this sort of you know, when when people when we get into this, like, frenzy, it's been the prelude and pretext for every misguided foreign intervention that we've had over the last 20 years. And the Example? the Iraq war. I mean, Saddam Hussein was suddenly Hitler. You know, the the goals of nation building Afghanistan for 20 years, our invasion of Libya. We got rid of Gaddafi, and we replaced it with chaos. David Friedberg (00:17:18): And for years, we were talking about how evil the Taliban and their social system and then we just handed Afghanistan back to them a few weeks ago. David Sacks (00:17:25): Exactly. So, you know and so these types of you know, when when you kinda you whip people up over human rights, I mean, I agree with the sentiment, and I agree with the moral clarity. But I also can't help but recognize that Neocons and the military industrial complex and the Washington Blob have used this type of rhetoric for decades to corral us and stamped eat us into wars and foreign interventions that don't make any sense. And we all recognize after the whole project gone wrong. Like Afghanistan, we become suddenly more realistic about the whole thing. And suddenly, you know, we're not talking about, you know, the the the the sort of the moral atrocities of the Taliban anymore. But the discipline is to -- They're David Friedberg (00:18:10): still there. David Sacks (00:18:11): They're still there. The discipline, though, is to be able to check ourselves before we get into these interventions. And I don't think we do a good job of that. We're whipping ourselves up into these mobs, and we're in a frenzy. Jason Calacanis (00:18:23): And the the raising awareness is something that has been lacking. The, you know, certain organizations and I I think it's very important that we don't organizations that have engaged with a country, let's say, China or Saudi Arabia. They may have engaged in good faith with the goal of you know, engagement is a positive for humanity in the world. Okay. If we engage with China and we are codependent on each other, that will lead to a better arc for human rights and for humanity and less wars because our our economies are entangled and we do business together. Okay. This is a fine premise. What the dictators and despots want you to do is to fight each other and not look at the human rights atrocities. So it's easier for us to say, oh, the NBA, oh, Apple, oh, you know, pick pick the the the the company or corporate interest or organization that has engaged. But by raising awareness, consistently, it gives other people the ability to talk about this. some organizations weren't willing to even talk about this or say the name Uighurs. And if we keep talking about the Uighurs, the chances that that situation improves I think there is a chance it does improve. David Friedberg (00:19:31): But I do think this, like, notion that the four of us can get together on a podcast and not get canceled because, you know, we we don't collect money from advertisers, and we started having these conversations amongst friends and we just put it on the Internet. First of all, it's a great kind of reflection of what you can do in the States with the freedom of speech that we have, and we can just put this on the Internet. Anyone can watch it around the world. I don't know how many people are watching Chamath Palihapitiya (00:19:52): it, but -- Mostly freedom of speech. David Friedberg (00:19:54): mostly freedom of speech. Much. But I do think that it's it's pretty valuable. And I do think that that's, you know, an important point for us is, you know, as much as Timov got completely destroyed this week, you know, the -- Chamath Palihapitiya (00:20:08): I gotta I gotta say other than COVID, I'm I'm feeling pretty good. David Friedberg (00:20:11): You feel better. You're pretty bummed for a day or 2? Chamath Palihapitiya (00:20:15): I mean, I think the the COVID thing was scary because 4 of my 5 kids got it. So I was just like, oh my god. Jason Calacanis (00:20:21): That's terrible. David Friedberg (00:20:22): How's everyone doing, by the way? Chamath Palihapitiya (00:20:25): I'll I'll be very honest with you. So between both houses, you know, mine and my ex wives. David Friedberg (00:20:33): 4 Chamath Palihapitiya (00:20:33): to the 5 kids got it. Our nanny got it, Nat did not, and the youngest baby did not. There's a real difference between in on my house, how the boys experienced COVID and how the girls experienced COVID, quite honestly. It like, we ex you know, we've expressed Certain symptoms specifically a really bad sore throat and a cough that the girls in our house did not. The girls had more intestinal issues. The boys roughly did not. So it all manifested kind of in odd ways. But oh my god. I mean, what a pain in the ass. Jason Calacanis (00:21:06): Well, to be going through that and then also, like, monitoring Twitter and inbound, your phone must have been blowing up. I'm just Chamath Palihapitiya (00:21:11): like, I wasn't doing any of that. Okay, Jason. Start the pun. Jason Calacanis (00:21:14): Let's go. Alright. Well, okay, everybody. Welcome to you all in podcast with us. the sultan of science who's got a new startup he launched. We'll hear about that later in the show, the rain man himself. And dare I say, The dictator's David Friedberg (00:21:28): mom told me I'm a teen. I Jason Calacanis (00:21:31): I was like, guys -- It's David Sacks (00:21:32): not like we it's not like we didn't warn you. David Friedberg (00:21:34): We got a 63 episodes. We called them to dig 10. This was bound to happen. Jason Calacanis (00:21:38): That's a great show, everybody. Chamath Palihapitiya (00:21:39): You guys were like, after 20 years of friendship, it's I don't know. The list is, like, 9000 items long. Jason Calacanis (00:21:44): I was like, yeah. If you're gonna cancel them, we got a log list. Alright. So first up, I think we should start with a a a a duo of stories that relate to each other. Microsoft announced it's buying Activision Blizzard. for David Friedberg (00:21:59): $68,000,000,000 Jason Calacanis (00:22:01): of cash. Microsoft's got a lot of cash. And I I think we all understand like, why this is a great idea for Microsoft with Xbox and, obviously, Activision owns Call of Duty, which has a 120,000,000 or so monthly active users. They also own a bunch of nerd stuff from Blizzard like Diablo World to Warcraft, my favorite starcraft. And and those have upwards of 40,000,000. They also had Blood King. If you remember that, they Candy Crush and those kinda casual games, which have a quarter 1,000,000,000 users. But even with all of these, it's a highly fragmented market. But in related news, Alina Kahn, the, I believe, thirty two year old head of the FTC, who has written a bunch of pieces. We talked about this. on all in episode 36, sat down with Cara Swisher and Andrew Ross Sorkin for an interview, and Basically, we're moving or she intends to move the goal posts on antitrust. I wanna play 3 clips and have you each react to them. Here's the first one. And this is her take on changing the antitrust from consumer harm to now shift to does this deal and we'll take the Activision deal here as a but one example, but you could take the Instagram and the YouTube deals as well. Do these deals substantially reduce competition in the future. Let's watch the first clip. Certain cases may be too much success. And so the question is when is the regulator supposed to say, this could work And if it works, it's actually worked too well. Speaker 6 (00:23:32): It's an interesting question, and I think, you know, for enforces, the the real question is, is this a deal that could lessen competition? And in hindsight David Friedberg (00:23:41): -- -- Jason Calacanis (00:23:41): all deals to some to all deals to some degree have been a lesson Speaker 6 (00:23:45): substantially less in competition or tend to create a monopoly. Mhmm. And there's also indication that Congress wanted enforcers not just to when, you know, the 3rd and 4th companies are merging on the first and second. But, actually, in the incipiency, when you said see trends towards concentration that those can also be important moments for enforcers to jump in. Jason Calacanis (00:24:04): So what do we think, Friedberg, about this sort of new rubric not consumer harm because obviously if Microsoft buys Activision and makes those part of Game Pass and you get Call of Duty for free with your Game Pass, and the Candy Crush games and Blizzard games. That's good for consumers. They get a whole bunch of more games. It would be like Disney buying Star Wars. You get all the Star Wars stuff in Disney Plus. for the same low price. David Friedberg (00:24:27): Yeah. Look. Saks is our legal eagle here. Not legal legal. But but I'll but I'll just say before, you know, he probably speaks better informed than than me If it's not about consumer harm and it's about decreasing competition in this broadly, I would argue subjective sense, then what's scary is that there are going to be decisions made by interpreters of what is and isn't competitive. And ultimately, if they're not trying to keep in mind the best interest of the consumer, then it is in fact going to cause consumer harm at some point, not necessarily at all deals that they block, but there will be deals that they may block that may have benefited consumers, meaning prices go down. Imagine having all of your products integrated in one streaming service instead of having to pay for 3 streaming services. So instead of paying $70 across HBO Max and Disney plus and Netflix, you get everything in 1. But today, the regulators would not let those businesses merge because that would be anticompetitive under this context. And so this is going to be a touchy debate it's gonna be difficult, I think, ultimately, to rationalize this if there is gonna be a point in the future where we can actually show that consumer harm would be caused by decreasing competition in in place. And so I would be nervous about that subjectivity and the slippery slope that enables. Jason Calacanis (00:25:40): I think it's a great point. Think about it. If you had to pay instead of for Disney Plus, you paid for Pixar Plus Disney plus, Marvel Plus, and Star Wars Plus, it'd be chaos in your household to manage all those accounts. It's a much better offering. David Friedberg (00:25:50): Better consumer experience. Yeah. Jason Calacanis (00:25:52): Much better consumer experience and and cheaper. David Friedberg (00:25:54): this actually by the way, I said sorry. I'll say this is what I said in the past. It's we use the term monopoly as if it's de facto, evil, and bad. But not all monopolies are businesses that have very big moats is another way to kinda describe them -- Yeah. -- are necessarily bad for the customer. Jason Calacanis (00:26:08): You David Friedberg (00:26:08): get cheaper product. You get better product. You get more of an advantage. they may ultimately be yielded to be anticompetitive in a -- Let me -- -- Chamath Palihapitiya (00:26:15): harmful way. David Friedberg (00:26:15): Let me let me just -- -- necessarily always. Chamath Palihapitiya (00:26:17): But let me explain to you where she's coming from. like there's a fundamental pillar of capitalism that says that excess returns must get competed away. So if a capitalist system is to be efficient, If a company has profit margins of 99 percent, competitors emerge pushing those profit margins down to something reasonable where you get to some sort of equilibrium. And the whole principle of what she's saying is in in the absence of competition, we don't really know what the equilibrium Return really looks like. And she's not saying that, but that is the implicitness of what she's saying. And so And if you allow all of this stuff to aggregate, Maybe Google shouldn't have 45 percent EBITDA margins. Maybe in a really competitive society, they would only have David Friedberg (00:27:04): 18% Chamath Palihapitiya (00:27:05): And that's actually better net net for the system. The problem is that counterfactual to your point, Friedberg, it's impossible to measure. How do you know And how much value do you need to take away of the panoply of things that Google does to figure that out? And that's I think we're the problem with it. But, you know, let's be clear. In 2019, I wrote in my annual letter. There's a section called the the tightening of the regulatory noose and meaning it was a framework for how to basically dismantle Big Tech. And element number 1 of that was a changing regulatory landscape, and really incredible to see it in front of our eyes. We got a bill that just left judiciary. Right? That was effectively voted across the aisle. That's now gonna go to the floor of the senate, which is gonna rewrite some of these anti committee David Friedberg (00:27:47): -- Jason Calacanis (00:27:47): It's like 7525, and it was a 5050 committee of Democrats and Republicans. So clearly across the aisle. Clearly across the aisle. Chamath Palihapitiya (00:27:54): And, I mean, the funny thing about that was Feinstein and Padilla, the 2 democratic senators from California where most of these companies are. in in the Wall Street Journal article that I read railed against it but still voted for it to go to the floor. So it's I think some version of that is gonna pass. She's gonna go and scrutinize these companies. I still think this Microsoft Activision deal on balance gets done. Because if you take the absolute values away from it, The reality is that it's an adjacent part of Microsoft's core business, and there's nothing fundamentally monopolistic about what would happen if you let Microsoft and Activision come together. Jason Calacanis (00:28:28): Could it reduce competition in the future, I think, would be her new lens? And if Xbox has Call of Duty and Sony Playstation doesn't or the next console doesn't? Maybe it does. You could make the argument, Saks. What are your takes on this? Very hard to apply standard of reducing future competition Chamath Palihapitiya (00:28:47): because as Aaron Ross Arkansas said very Jason Calacanis (00:28:47): clearly, all of these reduce competition. It's now we gotta get into what does the word substantially mean in this context? David Sacks (00:28:56): Yeah. So my take on on Leila Khan is that she's got some worthwhile observations on the problems posed by these big tech monopolies, but I don't think she's got the right remedies. So on the observations, I think she's correct, broadly speaking, that these big tech companies, the fans, they have way too much power in the marketplace. They are now gatekeepers over the Internet to control all these powerful platforms. And broadly speaking, it is time, I think, to to basically have some limits on those powers, make sure they don't abuse it. I think she's also right that the traditional standard of consumer harm doesn't really capture that sort of concept of market power for these free ad based services, right, because there is no pricing. And furthermore, I think she's got a point when she says that, you know, a deal David Friedberg (00:29:45): -- -- Jason Calacanis (00:29:45): say no pricing, you mean Facebook and Google David Sacks (00:29:48): doesn't pay. So how can there be consumer harm? Right? So, clearly, that there's that that standard of consumer harm doesn't really capture the market power dynamic. And then I think the the last observation she makes, which I think is pretty pretty valid, is this idea that, you know, when Facebook bought Instagram. At that time, it didn't seem to be a problem, but it definitely allowed them to extend their monopoly. from the desktop into mobile, and it probably should be scrutinized harder. My problem is with her remedies. I mean, what she's basically saying is, first of all, like you said, any deal that could decrease competition in the future is a problem. Well, the whole goal of business and making business moves like an acquisition is to build your moat, is to is to win, create a more competitive offering. So there's no limiting factor. There's no BrightLine test. there. At least with consumer harm, there's a BrightLine test, which is about pricing. Right? It's mathematically measurable. you could create a model around it. Here, there's absolutely nothing. And so what it's gonna do is completely politicize the process of getting an m and a deal approved. And you can see this when she's talking about the impact on labor. I mean, this is a total David Friedberg (00:30:58): soft to the -- Let's let's David Sacks (00:30:59): say, this had a total swap to the labor constituency in the Democratic Party because look. Facebook and Google no matter how powerful monopolies B, they don't have a dominant position in the labor market. This is not true. They're competing for the same engineers that every tech company is competing for. So she's bringing a purely political consideration in now And so, again, you're there's no BrightLine rule. It's gonna be heavily political. Companies trying to get a merger approval, never know whether they're good or not, and even after they get approved. they'll never know they're good. And I have a big problem with her saying that any deal that they approve can be reopened and reevaluated Right. A decade into the future and reverse. Jason Calacanis (00:31:39): I need the actions they're taking David Sacks (00:31:40): to get. Companies need certainty. Chamath Palihapitiya (00:31:42): That's the that's the real issue. It's the the rules of capitalism have been that the smarter slash more strategics, you know, entity if they can run their plays more efficiently, has the right to win, this is almost trying to say actually not really. and that is very problematic. Jason Calacanis (00:32:02): Yeah. David Sacks (00:32:02): So you never know you're good. You never Jason Calacanis (00:32:05): know you're good. -- know you're good. Chamath Palihapitiya (00:32:06): And then the problem that it'll create in the equity market specifically is How do you actually drive shareholder returns? And then what do all these shareholders then do if these companies are rendered to basically stay where they are? Jason Calacanis (00:32:20): So you take a snapshot -- I Chamath Palihapitiya (00:32:21): mean -- you take a snapshot of the economy and you say, this was what it will be from now on. David Friedberg (00:32:25): But it did Saks point is really interesting. It's gonna require m and a to become kind of a political maneuvering process similar. You know, create sort of these you know, obfuscated gates where you don't really know what it's gonna take to get through there. And then you've gotta go do what you do when you try and convince foreign governments to work you or allow you to do a transaction in a foreign government in a foreign country, where you gotta go in and you gotta go figure out the politicians, who they want who they are, what they want, and then put together a consortium that's gonna approve the deal given that there's now gonna be subjective, you know, validation whereas before, I think, the criteria were were much more objective. Jason Calacanis (00:33:01): Let me play this other clip. This is the clip that the Saks was referencing. Alina Kaun also talks about how labor Eunions are trying to get in on the action slash GIF. See Young on the other side. Speaker 6 (00:33:12): Among this research has showed that labor markets are significantly concentrated, and it's led to, you know, additional thinking at the policy level of how this should be affecting what anti trust enforcers are doing. So the justice department, including in the last administration, started looking at no coach agreements more closely instances in which employers may be colluding to less wages. Both agencies have been looking at the ways in which mergers in particular may lessen competition for labor and have downstream effects on workers in ways that are harmful and that also be needs to be on our radar. So I think this is an ongoing conversation, but, increasingly, the question is, you know, how we implement some of these priorities and not, you know, whether they're important. which is the first time you've included labor. This is something laborers wanted for a long time. The idea of looking at antitrust through the lens of unemployment, essentially. Yeah. There's an interesting history here. I mean, you know, there were cases in which, you know, unions were supportive of transactions because they thought they would lead to more downstream benefits. But I think we started to see through retrospective studies, instances in which, you know, mergers actually ended up having a harmful effect. And so I think that is what's significantly contributing to this. Chamath Palihapitiya (00:34:26): This is this is also part of what I said in 2019. The 3rd element of that plan was you have to change the rules on stock based compensation. So instead of her talking about it as labor, I think the the more accurate way to say it is, like, there's very valuable human capital in technology business. A few people have you know, discontinuous impact on these businesses. And it has been a stated strategy of all of Big Tech to use their balance sheets to buy small companies in their incipiency to use her words, not because it helps advantage their monopoly, but it prevents the leakage of human capital into other ideas and it prevents those other ideas from literally flourishing. That's really what's been happening for years in Silicon Valley. And we all know that. you know, all the aqua hiring we see is about hoarding talent. And you'd rather pay these people 1,000,000 of dollars a year if your big tech To basically work on next to nothing, then take the risk of them going across the street to a competitor and then having them build something federal strategy. Jason Calacanis (00:35:25): And this was such a this is such a no thing. The only way Chamath Palihapitiya (00:35:28): but the I'm sorry. Just to finish, the old one of the ways that you can change it is you have to change the way that stock based compensation works. how it's accounted for, you know, how you can actually deal with it on a GAAP basis, how capitalists then treat that in terms of their earnings. If you don't do that, None of the models change. Yeah. People look past it. People look through it. They don't think it's a real cost, which it is. And then you're allowed to continue to do it. That's really the underlying issue. Jason Calacanis (00:35:55): And so much so, Chamath, that the human the hoarding of human capital was a reoccurring theme on the Silicon the HBO show where people in Hulu were getting paid 1,000,000 of dollars and hanging out on the roof. Friedberg, when you look at this human capital labor being brought into it isn't the point of a lot of M and A to eliminate jobs and eliminate redundancy. So if you brought in YouTube at Google, I'm not sure if you were there at that time period, The distinct concept was, hey. We already have an advanced ad network. We already have accounting, and we already have servers around the world and storage. you don't need to hire those people who can get rid of them or whatever, and we get rid of that redundancy. No. Let me scale. David Friedberg (00:36:36): Large scale consolidation that certainly proves. most M and A in technology is the opposite where an acquisition takes place and the acquisition gets fueled by further investment after the acquisition is made. When YouTube was acquired, there was a few dozen employees there. And then very quickly Google scaled that team, the engineering team, the infrastructure team, they even had their own independent ad sales team to thousands of employees. And without that, it would have been very difficult for YouTube to achieve that scale both from a product success perspective, an infrastructure perspective, but also an employee based perspective with the amount of capital it would have taken to go and raise that from venture capital. Jason Calacanis (00:37:13): Got it. David Friedberg (00:37:14): Maybe nowadays where there's billions of dollars floating around, it would be different. But back then, it would have been very hard. Chamath Palihapitiya (00:37:19): And so what is the same for WhatsApp and Instagram at Facebook? David Friedberg (00:37:22): Yes. Exactly. WhatsApp was nineteen people when it was acquired, and now it's thousands on certain and and Instagram's the same. And so what we've seen traditionally or not traditionally, but over the f Ten, 15 years, with Internet based acquisitions is not about consolidation and reduction in costs, but about taking and enabling technology and accelerating it on an existing platform. Now number 1, it makes that new technology a product far more successful, far more far reaching, and more consumers benefit from it. Number 2, is it now makes that platform harder to compete with. So as a platform, it's gonna be a lot harder to catch up with the cash flows being generated at Google and at Facebook. given how quickly they reinvest that capital in new technology to further their advancement. Jason Calacanis (00:38:02): And to David Friedberg (00:38:02): your point Yeah. But but I would say what what's what's been so significant over the past 15 years that people are lifting their head up is that it has been both beneficial to consumers and anticompetitive. that was exactly what I was gonna get Jason Calacanis (00:38:16): to here. Your YouTube example is the perfect one because if you look at YouTube, think about all the joy, education, communication it has created on a global basis as a juggernaut. David Friedberg (00:38:26): -- free. Yeah. Jason Calacanis (00:38:26): And it's free. And that has helps humanity so much. In this new lens, David Friedberg (00:38:30): But no one else can make a video ad site. Like, this year Jason Calacanis (00:38:33): Exactly. So they're now looking at all the benefit that YouTube has created for humanity versus the fact that it's gonna be impossible to de displace YouTube. Now to your point, Sachs, how do you get past the bright line? Do you have a suggestion for a way? And would you now look at something like YouTube and say, we shouldn't have allowed that to happen. YouTube was on debt store because of the lawsuits and the server bills. We all know that. David Sacks (00:38:57): Right. Well, this is the uncertainty that's gonna be created. And I think this administration's creating tremendous business uncertainty. I think the reaction of a lot of big tech companies is this is gonna be to stop doing m and a until the situation gets clarified because they just don't know. You know, targets are target companies are gonna want to have huge breakup fees. And it's just gonna have a chilling effect on the market for m and a. I mean, business needs certainty, and they're not giving it in this business environment. jump up before we get to you. Just let me kinda make one point about that last clip on on the labor point. Listen. This feels to me just like when the administration talked about CleanTech And Clean Energy And Electric Vehicles, but then they only gave the subsidy to the car companies that were that were basically Union shops. And so -- They give Jason Calacanis (00:39:47): Tesla the same. Yeah. David Sacks (00:39:47): That's right. They excluded Tesla. They excluded Tesla from the EV trying to pretend that Ford and GM were the ones driving the EV revolution in the US. It was laughable. What they were trying to do there is there are shoehorning a union agenda into cleantech. And I think that's what Lena Hornahorn was doing in that clip. She was shoehorning a union agenda into antitrust law And it's a bit absurd because Facebook and Google, even though they are very powerful companies, when it comes to talent, they are in a war for talent just like everybody else, they completely get some jobs. -- issue there. Jason Calacanis (00:40:19): These are not factored ones. David Friedberg (00:40:20): -- David Sacks (00:40:20): mistreated employees. These are very well paid employees, and moreover, the market is highly competitive. And we don't need them trying to insert this union agenda into antitrust law. Chamath Palihapitiya (00:40:30): You gotta think that, for example, going back to Microsoft Activision. Obviously, the bankers would have called Apple and Facebook and Google as well. I mean, it's absurd that they wouldn't Jason Calacanis (00:40:42): have. They refuse to be. Chamath Palihapitiya (00:40:44): The minute that you think you have a bonafide offer, one of the things you have to do is essentially, you know, get an opinion letter and also to make sure that a public market shareholder, you can justify that you've evaluated all the other options. Right? Sure. But it's really quite telling to David's point I don't think that if you were Facebook or Google or Apple, you could have credibly made an offer because the calculus in the back of your head was not whether it had business logic. but whether you could actually get it through the FTC. Jason Calacanis (00:41:11): But Microsoft did because Microsoft is no longer seen as a threat. Chamath Palihapitiya (00:41:15): And, look, we said this we said this in our awards show 2 or 3 episodes ago, you know, they have really been the most untouched in the last decade by antitrust scrutiny. whether in domestically or internationally, they've largely skated under the radar after paying the price for an entire decade. David Sacks (00:41:34): And I think a lot of that has to do with the fact that Microsoft's effectively pivoted with the exception of this gaming into being an enterprise software company and the politicians just care a lot less about enterprise software. It doesn't capture the public's imagination. It's the big consumer, you know, companies that get all of that attention. Jason Calacanis (00:41:51): Fascinating point. Like, literally, the consumer and the bread and circuses of this is what's driving it. Like, people hate big tech and Trump got banned from it yadayada. David Sacks (00:42:02): But but I gotta say, you know, these increasing restrictions on big tech and the these probitions and the chilling effect, the uncertainty, it's one thing to do it when the market is just completely ripping, and we can sort of afford to run these experiments and tinker with these these rules. But I gotta say, I'm I'm starting to get pretty worried here that, you know, we had Jeremy Grantham as sort of a David Friedberg (00:42:26): -- Jason Calacanis (00:42:26): Old school. David Sacks (00:42:27): Yeah. Old school kinda bearish type market commentator. he had this expression that the yeah. I mean, it's more one of these stop clock right twice a day things. Chamath Palihapitiya (00:42:36): Jared Jeremy Grantham has never found a market he didn't name. David Sacks (00:42:39): Yeah. Yeah. Exactly. But but but a stop clock can be right twice a day. And the the line he had today is that we're seeing the popping of a super bubble. And, you know, we've been talking about David Friedberg (00:42:47): -- Jason Calacanis (00:42:48): Super bubble. David Sacks (00:42:48): Yeah. Exactly. Basically -- But Chamath Palihapitiya (00:42:50): that's not that's not true, but, I mean, it's good. Yes. Jason Calacanis (00:42:52): Well -- -- it's evocative. David Sacks (00:42:53): Well, the the sense in which it's it might be true is that mean, when you talked about this last few months is that you had the Fed and the the the federal government hump a 10,000,000,000,000 of liquidity into the market over the past 2 years because of COVID. Now they're starting to pull that back. And there was, I think, a general asset inflation across asset classes certain types of assets clearly got more inflated than others. We've seen a huge correction in growth stocks. We've seen a huge correction in in crypto. Basically, anything long dated as the fear of interest rates increasing has gone up, they've massively corrected. But So the concern is that, you know, with the losses we're seeing and I mean, every day, it just keeps, like, you've seen more red. that this could turn into a recession. You know, popping of bubbles is usually followed by by a recessions or So I think, you know, the fortunes of the economy could turn really quickly here. And -- That Chamath Palihapitiya (00:43:52): is that is the marginal risk. The marginal risk is actually for recession. We we talked about before, by the way, just to your point, you're right that we pumped in $10,000,000,000,000, but over the last 3 weeks and really over the last two and a half months, we have actually eviscerated. $10,000,000,000,000 of value as well. So if you wanna measure it, we put $10,000,000,000,000 of excess capital in, but we've now destroyed $10,000,000,000,000 of equity. Jason Calacanis (00:44:14): Destroy it lowering the prices or repricing stuff. Yeah. We've repriced out Chamath Palihapitiya (00:44:18): of that. I mean, crypto in the last couple of days has just been Schallach. Yeah. Growth stocks have been shellacked. Biotech stocks have been just absolutely spoken. Everything is Jason Calacanis (00:44:29): getting crushed. COVID stocks. Chamath Palihapitiya (00:44:31): But David is saying something really important. The risk, in my opinion, is not of runaway inflation anymore. And the reason was what happened this weekend was incredibly important. And we have seen this happen just a few years ago. So this weekend, China cut interest rates. Now As we know, we are dealing in the United States with this issue of whether we should raise rates and by how much because we're worried about inflation. While if you're cutting rates, It's because you're worried about the other problem, which is that the economy is basically turned over and you need to become more accommodating. Right? You need to incentivize businesses to spend by lower By Jason Calacanis (00:45:10): turned over, you mean? it's slowed down. People are not building companies, not doing new projects. So you wanna insight you wanna give them an incentive or or maybe some catalyst to start some new company or start some new project because all the real estate projects have wound down. Chamath Palihapitiya (00:45:27): In 2018, here's exactly what happened. The setup was The fed we were everybody was worried about what the fed was going to do on interest rates. The fed was looking at China as the canary in the coal mine, the leading indicator of what we should do. And at the end of David Friedberg (00:45:43): 2018, Chamath Palihapitiya (00:45:45): Jerome Powell decided to raise rates. and we raised rates and then enter David Friedberg (00:45:51): 2019 Chamath Palihapitiya (00:45:53): and the Chinese economy turned over. And we realized that the economy was not nearly as strong as we thought it would be. And so our reaction was disproportionate to what the actual data on the ground said. We entered a recession in 2019. That's when you guys probably saw Trump going crazy, blaming Powell I mean, most of us ignored it because, you know, we were all dealing with, you know, Trump derangement syndrome. But the underlying thing of what he was saying was, hey. Hold on a second. you just caused the recession in America by raising too quickly. The Fed is now in this really delicate situation where China cut rates last week. We have an FOMC meeting open markets committee that sets rates on Wednesday, I think, of this coming week. What is he supposed to do? You know, Bill Ackman 2 weeks ago was advocating for a 50 basis point raise in this meeting. So that's way beyond what people even thought is supposed to happen. Speaker 4 (00:46:45): We we David Sacks (00:46:45): should just remember that Bill Ackman has bets macroeconomic bets in the market. If he's calling for a 50 point raise, I guarantee you -- You're gonna David Friedberg (00:46:52): make a lot of money. David Sacks (00:46:53): You don't make a lot of money if there's a default race. David Friedberg (00:46:55): -- Chamath Palihapitiya (00:46:55): conflict, no Yeah. Yeah. Exactly. My my only point is the setup is a very complicated one for the Fed coming into this week. And the risk is to a recession because if we overcorrect Yes. And the leading indicators all around the world tell us that their economies are weak, then inflation may have actually been much more transitory than we thought. And right now, we have to decide because if we overcorrect, we're gonna plunge the United States economy into a recession. Jason Calacanis (00:47:20): This is why I think, Friedberg, when you look at this, when you have so many different things happening at once and you're trying to pilot a plane or a car, you know, in rain on ice, going really fast. Maybe there's something wrong with the brakes. And you gotta be very delicate with, you know, how you steer into this. What is the right strategy here on a policy basis? coming out of Omicron, should we just take a pause on raising rates? What what do you think the right situation here? Obviously, putting a bunch regulation on top of big, you know, mergers and acquisitions, and and that's gonna create headwinds. I I don't know how many different variables we wanna add to the mix of an economy that feels like we're in a perfect storm. David Friedberg (00:48:01): I don't know. Look. A lot of us kind of talk about the valuation of things in markets as being the economy, but it's not the economy is the productivity of businesses that are valued in the market. And as long as the productivity of the businesses in the market continues to improve that businesses continue to grow, that there's stability to pricing that's not runaway or or declining. neither inflationary or too deflationary. You know, I think those are the the indicators that matter most. Now the reality is Over the last couple of years, we've had 1,000,000,000,000 of dollars that have flowed into these markets for free. and those trillions of dollars have created lots of mini asset bubbles. Lots of little new markets have emerged, NFTs, random cryptocurrencies that don't actually do anything, the collectibles market, the art market. There are lots of I mean, there are and and lots of examples of these speculative early stage businesses that have gone public, and people backed them. And they they said, look. When there's this much money around, I'm gonna start making more risky bets. I'm gonna make more speculative bets. And regardless, the money's coming out of the markets, the money's going to come out one way or another. And as it starts to come out, These little bubbles are the first that are gonna pop, and that doesn't necessarily mean that the economy is at risk. It means that there are valuation bubbles that are gonna burst They're gonna decline, and no interest rate policy is gonna change that because the inevitable growth in the underlying economy, the inevitable end to the pandemic, is what's ultimately gonna drive capital out of these markets and back into ultimately more productive assets and less speculative assets. And so this is a transition, and I'm not sure you can really kind of manage, I think, underlying businesses and the growth of the economy and the ability for people to get jobs an incredible number of open jobs are in the US right now. 3,000,000 open job listings. Go apply for a job. -- 1,000,000. David Friedberg (00:49:53): 11,000,000. Whatever it is, go go go sign up for a new job. -- 3 Jason Calacanis (00:49:56): point what is it, Saks? David Friedberg (00:49:57): 3.7 Jason Calacanis (00:49:59): percent unemployment. David Friedberg (00:50:00): There are not a lot of people in the US that don't have an option to go out right now. and go improve their their working condition. There are a lot of open jobs in the US. Jason Calacanis (00:50:10): And salaries have gone up. David Friedberg (00:50:11): That that's what I mean. Your working condition. You can go make more money. Yeah. And And so, you know, the economy underlying, there are lots of great businesses that are growing and doing well, and there's stability that's emerging, and then there's a bunch that aren't. And there are a bunch that we're always and that they were hyped and overvalued. And, you know, as those assets get devalued, a lot of us that have most of our worth and income coming from capital are are gonna feel the burn. Jason Calacanis (00:50:36): I have two questions David Friedberg (00:50:37): -- Chamath Palihapitiya (00:50:38): By the way David Friedberg (00:50:38): -- Jason Calacanis (00:50:38): that we I wanna go around the horn on first, Shamal. if we could do if each of you could do one thing to 1 or 2 things to manage this economic policy in the next year, what would it be? Like, what 2 things do you think we should do, David? 1 or 2 things. We have the top of this that regulators should do in terms of managing this seemingly chaotic situation. It just feels to me David Sacks (00:51:02): it just feels to me, like, we're pinballing from one overreaction to another. So we overreacted in terms of flooding the zone with liquidity because of COVID. I mean, remember, like, Druckenmiller it was, like, the one of the only voices about a year ago when they did that 2 that last $2,000,000,000,000 stimulus bill, the COVID relief bill David Friedberg (00:51:22): -- Jason Calacanis (00:51:22): Yep. David Sacks (00:51:23): And he said, look, retail's already 15% above trend. Meaning, if you looked at demand, the the demand side of the economy, it had fully recovered and it was actually above prime. People were spending more money. And then we flood the zone with another 2,000,000,000,000. And then low and behold, 6 months later, we have this inflation. And then in response to that inflation, we're now jacking up rates so quickly that I think we're risking to Tom's point or a recession. we're pinballing from one overreaction to another. And I just the big meta thought I had this week was just how many of our problems are just self inflicted. right now. I mean, even on COVID. Right? We could live with this variant of COVID, Omicron, you know, Chlamaz and all of our friends. We've Everyone I know in the last few weeks basically has had it, and it's been very mild. It's basically been a cold. But in large loss of the country, we're not choosing to live with it. We're at each other's throats about these vaccine mandates, these other restrictions, and -- Okay. So you're not going on. And similarly and and the same thing just to make even more local. We've got a crime wave in America going on right now. Why? Because we emptied the jails last year and stopped prosecuting. totally self inflicted. Jason Calacanis (00:52:30): Okay. So what things do we need to do? Just if you had one or 2 things that you think we should do. 1, you said we're ping ponging. So do you think more consistent policy, communication? David Friedberg (00:52:38): I don't Chamath Palihapitiya (00:52:39): I think that you want some neat little answer that's treatable, and there is none. Jason Calacanis (00:52:42): No. It's I wanted your -- I mean, let David Friedberg (00:52:44): me explain. -- Jason Calacanis (00:52:45): thought that was a good idea. Chamath Palihapitiya (00:52:46): There there there is no 1 or David Friedberg (00:52:47): 2 Chamath Palihapitiya (00:52:47): things anybody can do. I think there's a collective set of things that we have to do in an organized way. So look. Just to set up. Right? We have had more activity and hedging than in any other period in recent memory except the great financial crisis. just to set the tone of where we are in terms of volatility in the capital markets. Mutual funds who don't short stocks Right? The multi $1,000,000,000,000 mutual fund complex whose only job is to buy has been a net seller hasn't even started buying a single thing yet. We have an fomc meeting that's gonna happen next week Jason Calacanis (00:53:22): where Jerome Powell and the Chamath Palihapitiya (00:53:27): you know, the fed has to decide what to do in the face of incomplete data. It's not as if we've even stopped all of the purchasing of assets that we've been doing, we're still putting money into system. I just wanna be clear. We were debating when we stop the spigot. We're not even debating when we shrink our balance sheet as a country. So we are in a really complicated moment and I think the risk is that there is an overreaction to incomplete data, and we plunge the US economy into a recession. And I just think that that that has to be really thoughtfully measured. And we guys, we've seen this in David Friedberg (00:54:06): 2019 2018 19. Hey, Frank. Any thoughts? No. I'm not an economist, and I'm not a central banker, and so I have no clue. Jason Calacanis (00:54:16): Okay. The the next David Sacks (00:54:18): thing I remember -- But but but to Moss point, I mean, we are dealing with balancing the risk of inflation against the risk of recession. I think that is fundamental. And right now, all the statements have been so hawkish that, you know, the markets have been just flowing red now for months. And it's starting I think I think the the balance of risk is starting to make recession possible in a way that Didn't seem possible 2, 3 months Jason Calacanis (00:54:45): ago. the repricing of assets though. Like, we look at Peloton, you know, it's down whatever. 80%. You look at Zoom is down 70, 80%. When you see those things, were obviously mispriced Rivian, which we talked about No. David Friedberg (00:54:56): I wouldn't use the term mispriced. Jason Calacanis (00:54:59): They were Repriced. Chamath Palihapitiya (00:54:59): I would say they're repriced. Jason Calacanis (00:55:01): the re they were mispriced. They're not repriced. David Friedberg (00:55:03): Oh, they were they were they someone paid some unemployment. Someone someone sold them for something, and now they -- They were price David Sacks (00:55:08): against gravity. If yesterday, they paid 25% more, and then today, they're paying 25% less. David Friedberg (00:55:13): What difference does it make whether it's yesterday an hour ago or a year David Sacks (00:55:16): I mean, this is priced. David Friedberg (00:55:18): Everyday pricing changes. Well, no. Jason Calacanis (00:55:20): Here's the thing about the pricing. The pricing was based on people with a lot of money placing a lot of bets maybe who are new to the market in the retail? Chamath Palihapitiya (00:55:27): Okay. Fine. What's the point, Jason? David Friedberg (00:55:28): The market condition changed. Jason Calacanis (00:55:31): Well, I think maybe we had enthusiastic people who betting things up without looking at fundamentals is my point. I think Zach agrees with me here on this. So I think I was just curious Chamath Palihapitiya (00:55:39): about that. Yeah. Jason Calacanis (00:55:40): You're right. So now you have market participants who were gambling, on, like, momentum. Now we're re pricing stuff. Do we think where are we at in this repricing or correct pricing in Chamath Palihapitiya (00:55:50): that sense? David Friedberg (00:55:51): We're Chamath Palihapitiya (00:55:51): in the 8 in my opinion, I think we're in the 8th inning of of the tech drawdown. So David Friedberg (00:55:56): -- Chamath Palihapitiya (00:55:56): Got it. -- if you're a high growth tech company, you can smash for 3 months in a row. as you said, Jason, were off. Some stocks are off 80 you know, 50 to 80% of their highs. Jason Calacanis (00:56:07): That's like dotcom era. Correction. David Friedberg (00:56:09): Yes. It really is. That's crash. That's dotcom error David Sacks (00:56:11): crash occurs. Yes. Chamath Palihapitiya (00:56:12): If you're if you're if you're in other areas like value, you've had a pretty good rally. If you're in crypto, you're just starting to get smoked now. If you're in Why is it crypto? Jason Calacanis (00:56:24): This I wanted your thoughts on this, Tremont. Why is in crypto getting smoked like Peloton and Zoom? It's because those people are hoardlers or something? Chamath Palihapitiya (00:56:31): Well, crypto, I think, has slightly different dynamics than than individual stocks like a Peloton. I think that you're gonna see -- -- release for 1. Right. There's you're gonna because, like, you David Friedberg (00:56:40): have to understand -- All the all that the market is is who's bidding and who's coming into the market. I mean, there's still thousands millions of people from around the world stepping into the crypto markets each day that are putting more money into these markets, and that balances out the withdrawals And that's all the crypto is. There's no fundamental underlying business that you're valuing. Chamath Palihapitiya (00:56:56): The Peloton release was really bad. Okay. I mean, really -- It Jason Calacanis (00:56:59): was very strange, Janet. Well, I think they over Chamath Palihapitiya (00:57:00): I think they strange. It was just like, we're just gonna basically stop producing anything because all of our inventory will meet our demand for the foreseeable future. That's a That's not a good statement if you're supposed to be a high growth. Jason Calacanis (00:57:13): Okay. So if we're seeing 50 to 80%, Saks. Gavin Baker had a tweet. That's Capital allocator. Yep. Chamath Palihapitiya (00:57:19): Yeah. The bottom of the market, he and it was a phrase something like when we shoot the generals, and his comment was the generals are big tech. When those things trade down 25%, the bottom is in. And I think that collectively most people think that we're a little bit oversold in all areas except Big Tech. I think Big Tech is down David Friedberg (00:57:39): 10, 11, 12%. Chamath Palihapitiya (00:57:41): When you see this thing really get cracked is when those folks, you know, trade down another 10 or 15%, and then I think we're kind of through most of the pain. Jason Calacanis (00:57:50): So Peloton and Zoom were kinda mid tech. I don't know what we call those, but I would call them, like, mid tech obviously not Big Tech, but they're not small either. Mid Tech gets their asses kicked 50 to 80%, Big Tech 15%. But if Big Tech goes down 30%, then we start really seeing a bottom, we consider Netflix part David Sacks (00:58:06): of that. David Friedberg (00:58:06): -- Chamath Palihapitiya (00:58:06): ever see that because I think big tech you have to remember is basically the index. And in the last 10 or 20 years, you've never seen drawdowns more than 15 to 25%. You've never seen it. And when you've ever had a 15 to 25% drawdown meaning the market goes off 15 or 25%, You have to remember the thing that we have also done over the last 20 years has created so much money on the sidelines, always looking for a cheap buying opportunity. And so the minute that these things So even, you know, in March of 2020, remember when we started to do this pod and it literally looked like the world was ending? Yeah. the bottom existed for a week. Yep. And then within a week, the entire David Friedberg (00:58:44): 25% Chamath Palihapitiya (00:58:45): loss in the stock market was wiped out and we were back to normal. So That's David Friedberg (00:58:48): what that's what I sold. We do don't take our advice, folks. Okay. Jason Calacanis (00:58:52): Well, let's talk specifically about Nep. I think it was good that we talked about Palatine. David Friedberg (00:58:56): -- Chamath Palihapitiya (00:58:56): at the lows. Oh my god. It too. I remember selling I remember selling Slack going, this is the dumbest thing, but I have no choice because I was David Friedberg (00:59:03): -- Jason Calacanis (00:59:03): How about when Uber goes to David Friedberg (00:59:04): 15? Jason Calacanis (00:59:05): How about when Uber goes to team from 45. I I was ready to -- Basic curled up in a ball and said, I'm not selling, but I'm not feeling good right Chamath Palihapitiya (00:59:12): by the way. David Sacks (00:59:12): That's why David Friedberg (00:59:13): I was saying Jason, like, any comment you made earlier, I think you made a comment you know, what do you do right now to drive or make change in these markets? And I'm not sure that at the end of the day, the drive or the change is being made as much as the change that's being made is being driven by the market itself. There is just so many dynamics at play that it's very difficult to kind of ascertain where things are headed next, what's going on, and we're all gonna sit here, and we're all gonna speculate, we're gonna flip a coin It's gonna come up heads. It's gonna come up tails. We're gonna be right. We're gonna be wrong. It's really difficult to kind of put put our foot down and for any of us to put our foot down and say this is what I think needs to happen, and this is what I could happen or could happen or will happen. Half of us will be right. Half of us will be wrong. But, man -- Let Jason Calacanis (00:59:54): let's take another stock. I think it's interesting to talk about this. Netflix was at $700 could, Lord. David Friedberg (00:59:59): Just a Jason Calacanis (00:59:59): couple months ago. It's at 3:90 today. David Friedberg (01:00:02): This is incredible large customers. the business. Yeah. That's like a real business that you can assess what's going on with the business itself? Jason Calacanis (01:00:08): Well, they think they're not gonna grow 20, 30 percent a year. They think they're gonna grow David Friedberg (01:00:13): 8, 9, 10% Jason Calacanis (01:00:14): a year, but a a a fabulous business. Right? Like, Great business. Incredible. So is that now the time? So is this becoming so much? I mean, time? David Friedberg (01:00:22): Netflix is so saturated. it is it has achieved such incredible market share by growing so quickly every year for years and years in end. At some point, the growth was gonna slow down. Jason Calacanis (01:00:32): It hit their natural audience. Chamath Palihapitiya (01:00:34): I think Netflix I think Netflix is gonna be the best example of consumer surplus at scale. And what I mean by that is they have given so much value a way for an incredibly small amount of money. Like if you think about the value you get from Netflix as compared to what you would get from Comcast, And you spent 10 bucks a month David Friedberg (01:00:54): $10 Chamath Palihapitiya (01:00:54): or $15 for Netflix versus a hundred bucks for Comcast, there was such a huge gap in value. But Netflix had to spend so much money to keep people entertained. The real question is, at what point do they start to sort of, like, run out of the things that they can do to keep people engaged? And otherwise, they, Jason, do what you did, which is you have subscription to HBO Max. You have a subscription to Disney Plus. Yeah. Jason Calacanis (01:01:19): I mean, the headwinds are Chamath Palihapitiya (01:01:20): Everybody gets in the game. The only real winner is the consumer. Yeah. And any individual company, I think, gets gets into a real tough spot. And I think what you saw was their earnings release basically said just that. Disney's doing a great job competing against us. HBO Max is doing a great job competing against us, so we're not sure with the incremental dollar that we can give you the growth that we've given you before when we had no competition. And that's, by the way, Lina's Lina Khan's comment, which is the other side of the coin, which is when you have more competition, the consumer does win, it contains prices It just doesn't contain asset inflation, which does impact the shareholders of these companies. Jason Calacanis (01:01:55): Yeah. And still, even at this level, a $172,000,000,000, they have a 35 x David Friedberg (01:02:01): p e ratio. One one way that to look at this, your I I think your point is an interesting one, Shamak, where you talk about how much value they've given away over the years. what they have today. You can always look at the balance sheet of a business, a public company. And in the balance sheet, there's this this line Goodwill. No. Well, not even goodwill, just the the accumulated loss. the accumulated deficit. And if you look at that on Netflix, they basically run the business right now at as of their last earning statement, which was December 31st, negative $40,000,000. So in terms of the total net cash that they've generated as a business since their founding, as a business. They've lost $40,000,000. So, you know and and meanwhile, the question is, okay. What's the you know? So so they're not necessarily at a stage where they've been generating cash. But for many, many years, Amazon had a similar strategy where they were reinvesting all their capital. Yep. And that capital was going into building the business and growing the platform and adding the next layer of growth. The question is, has Netflix from a fundamental business perspective, not a valuation perspective? Have they added enough growth platforms into the business? Have they grow found enough other products, services, or ways to build something with the business? Jason Calacanis (01:03:13): one product here. -- video. Chamath Palihapitiya (01:03:15): They don't have gaming. They don't have anything else. Right? Jason Calacanis (01:03:16): They did start doing David Friedberg (01:03:17): -- -- Jason Calacanis (01:03:18): sports. They just -- They they they they are dabbling. They dabbled with doing a couple of podcasts. They dabbled with doing a couple of games. And there's rumors that they might try to get the other 20 or 30 percent of people who don't pay by creating a lighter version that was ad supported. In other words, you're not gonna get the new season of Ozark, but maybe you can get the 1st 2 or 3 you're a year behind the production schedule, but you could watch it all with ads. So the Why isn't Chamath Palihapitiya (01:03:42): Netflix in video games and sports? Jason Calacanis (01:03:44): It's such an obvious one. And that's why I think they released a series of games based on their IP. So as their IP grows and I think that's what you'll see with Disney Plus is. Think about an App Store inside of Disney Plus, a merch store inside of Disney Plus. I think there's so many verticals next to them. Why do they know merch store inside David Friedberg (01:04:00): of it? Why don't they why don't they own Spotify or have a Spotify penetitor. Jason Calacanis (01:04:04): Well, I think Spotify sees themselves as a Chamath Palihapitiya (01:04:06): That's a that's a really good point. You know, when you look at the Peloton, I was looking at the Peloton earnings when, you know this it was down 25% yesterday or the day before. And I was like, this is an incredible business because they have David Friedberg (01:04:19): 2,100,000 Chamath Palihapitiya (01:04:21): scribers that do the -- -- 40 bucks a month. It's incredible. I mean, it's a money printing machine. Money printing machine, I actually have a subscription. I don't even have a Peloton Peloton. don't have any You just Jason Calacanis (01:04:30): pay $500 a year Chamath Palihapitiya (01:04:31): to use the the classes. I have the app. It's crazy. I don't even use the app. David Friedberg (01:04:34): But I Jason Calacanis (01:04:34): think that's twenty bucks for the just that app. Yeah. Chamath Palihapitiya (01:04:36): But the point I was trying to make is when you look at it, You know, there's about 30 percent of that revenue that goes right back to the music labels for the music. So, you know, to your point, like, there's just an enormous value in actually music. David Friedberg (01:04:48): Oh, wonderful. Yeah. One of Chamath Palihapitiya (01:04:49): the things -- -- built library values and content, they could be they could point it to music as well. There's all these things they could do to reignite growth. David Friedberg (01:04:56): a lot of people discount the value of having a subscription consumer business. When you have a consumer's credit card on file and they're paying every month for something, It's an incredible point because you don't have the friction of getting the sale done. You've already done the sale. Yep. Now the question is, can you upsell them some new service or some new addition that they're not paying for today? Jason Calacanis (01:05:13): obvious. Yeah. David Friedberg (01:05:14): It's so obvious. Right? And so, like and by the way, I'll say this, like, for years, Google struggled with this question, which is, what is Google's consumer subscription business? because Google did not have consumer credit cards across its platform despite a billion daily users. And so Google for years was strategically trying to figure out what business can or should we be in, to have a subscription model with consumers because once you have that, then you can charge for all sorts of stuff. You can charge for storing photos. You can charge for -- Yep. accessing audio. You can charge for accessing unlimited video. If that's the -- I'll David Sacks (01:05:42): I'll be the I'll take the contrarian side of this. Jason Calacanis (01:05:44): Okay. Here we go. Yeah. Go ahead. Go ahead, Peter. David Sacks (01:05:46): Well, No. Look. I I invest in b to b subscription businesses. I hate b to c subscription businesses, and the reason is just the churn rates. What we see when we look at BC subscription businesses is 5% monthly churn is not uncommon. It's pretty much the standard. So call that 50, 60% churn in the subscription base every year. So effectively, you're rebuilding the company from scratch every 2 years. I don't see, like, how you can build a successful business that way. Jason Calacanis (01:06:12): See, but I'll why David Sacks (01:06:13): you're wrong about this. Let me let me contrast that to b to b. With b to b subscription businesses, you do lose some customers, but the ones who stick with you keep adding seats for more employees usually. And so, actually, Jason Calacanis (01:06:25): your co ops your David Sacks (01:06:26): land and expense, your courts are actually your cohorts are growing 20% every year and says shrinking 50%. Now, obviously, there are some of these b to c subscription businesses like Netflix and Peloton. They are obviously valuable. They've defied gravity. Well, Netflix has done it because they spend David Friedberg (01:06:41): 1,000,000,000 David Sacks (01:06:41): of dollars on content. And Peloton's got it be because they plop a expensive machine in your house so you can't forget about it. and that keeps you a little bit more recurring than, like, a lot of these subscription switches is very easy to cancel. But so look. They've been able to make it work, but I'm mostly species. David Friedberg (01:06:59): -- Jason Calacanis (01:06:59): why I think you're wrong. It it turns out if these are so low priced subscriptions that you get a lot of consumers trialing them. So because it's only 5 or 10 bucks a month to use something like a Spotify or a Disney, because they're so low price, you you do get a little bit of sampling, and that's why the rate's higher. Whereas in business, there is a massive onboarding of people have to take their time to set up the software, learn how to use it. So if you're going to commit to it, it does reduce it. And you do have land and expand. But what we're talking about with product expansion is the equivalent in SaaS of land and expand. So imagine if Disney plus or Spotify after you listen to an album or it's in your top rotation, they showed you the merch. for that band. Or after you completed the season of Mandalorian or Book of Bobafat, they showed you the merchandise and said, here is an limited edition of Grogu baby yoda. When that we tried to get baby yoda stuff last Christmas, Disney dropped the ball. They didn't have any. And they could've had all that made, and they would've sold millions of we were buying stuff on Etsy. David Sacks (01:08:01): The reason baby Yoda works is because it's leverage off a platform this massive Disney platform of which this B2C subscription service is just one piece. I mean, look, obviously, there are valuable consumer subscription businesses. So the way I'm approaching it can't be right in all cases. However, I think people really get themselves in trouble when they start to value these b to c subscription businesses the same. as the b to b ones. In one case, you in the b to c case, churn is a predominant characteristic, and it means that you're gonna have to spend more on marketing or COGS or content or what have you to keep rebuilding the user base. Whereas in the b to b context, the user base is compounding on its own And that'll that just makes for, I think, a more permanently attractive business opportunity. Chamath Palihapitiya (01:08:47): But it grows slower. Again, just At the end of the day, these are all variables. Just the weights just changed. I agree with David that consumer churn businesses or consumer businesses have much higher churn An enterprise and enterprises have negative churn, which means that they just naturally grow. But the reality is consumers just have an unbounded TAM that enterprises do not. And the way that the way that the LTVs work just tend to be different. And the cash flow cycle of these companies tend to be very different. And that's why You see Netflix kept these enormous valuations that Enterprise Subscription businesses do not. Jason Calacanis (01:09:19): What some people are now doing when they look at consumer businesses and they look at churn is they take out the ones that are based on credit card to look at, like, people who actually unsubscribe because they don't want it, but not because their credit card change. David Sacks (01:09:31): So so, basically, so if you think about, like, Netflix has this. If it's turning 2 a half percent per month, let's call that 30% of the user base is a trading every year, they've gotta rebuild their user base from scratch every 3 or 4 years. Now they can do that. I guess at some point, though, they may run out of you know, greenfield opportunity to grow their customer base. But, you know, it's gonna pressurize their margins because they're gonna have to constantly spend on content original content to retain you. Like, you have to spend on marketing to keep going after the portion Jason Calacanis (01:10:06): of the marketing required. Yeah. You're you're you're leaving out the archive. These archives are gonna be super valuable. And I don't think we even know how to value these archives yet because if you look at the Marvel archive or the Star Wars archive, these things just keep printing money year after year. And then you'll see now and HBO Max will keep being able to go back to them HBO Max being the canonical example now because you didn't think that that business would have you know, a lot of IP to build on, but suddenly, you have the many states of Newark and the Sex and the city reboot. I mean, they're going right down the line. David Sacks (01:10:35): It's gonna be an entree. When you own the franchise, it has value. Disney has shown that. You own the best franchise. Jason Calacanis (01:10:40): It's gonna have that. But -- It BOMAX is now showing it, and then that means Netflix will show it next. Yeah. David Sacks (01:10:45): But how much of Netflix's content do they even own? Are they licensed? Jason Calacanis (01:10:48): Now it's a 100%. Netflix is a 100%. They stopped, and that's why Disney started taking it off. Their their whole spend. That I think they're spending 20,000,000,000 or something. it's all on original content. So that that's why they made that move is because they knew they were gonna have the Disney content and the Marvel content pulled. Where do we wanna go next? Guys, well, for instance, Chamath Palihapitiya (01:11:05): I have COVID I want I want I want Saks to to talk to me about his what what's going on with Fauci? David Sacks (01:11:14): Oh my gosh. This is quite a story. This really is. Jason Calacanis (01:11:17): I'm trying to get my head around the story, and I I'd be totally honest. Chamath Palihapitiya (01:11:20): Slow it down. Explain it to us because I think we all My head is spinning. David Sacks (01:11:23): Okay. So a series of emails have come out that were requested on the Freedom of Information Act. And what they show is that at the NIH, Falci and Francis Collins, who was ahead of it, they had a series of conversations with scientists around January sorry, January 31st or February 1st. there are emails on February 1st summarizing those conversations. And, basically, what they say is that a group of scientists advised Fauci and Collins that COVID likely came from a lab. How they know? Because it had, you know, hallmark signatures like the fear in sights. The same reasons we now believe the the virus came from a lab. Okay? But by February 4th, officials at so 3 days later, officials at the NIH, including Fauci, had come to the conclusion that the virus must have been passed zoonotically from an animal like a pangolin. It didn't come from the lab. And furthermore, They were starting to use language like conspiracy theory to discredit the the the lab leak the lab leak idea. So the within a few days, they were all in on this sort of so called zoonotic theory. And they really began a campaign in the words of Collins, a devastating takedown. of scientists who were trying to discuss the lably theory, that became the official position. David Friedberg (01:12:53): Why? David Sacks (01:12:54): Why? Well, okay. So this is where it gets really interesting. Obviously, I can't speculate to Motors, but here's what we know. The NIH, Fauci's division, Years ago, there was a debate in the scientific community about how we study viruses. Vauci is an epidemiologist. He wants to study them. makes sense. The debate is over whether you should enhance the viruses as a way to study them, so called gain of function research. Their Fauci is on the side of engaging in that kind of research. There are other scientists who think it's crazy. They lose. Yeah. NIH then makes grants to a group called the EcoHealth Alliance. It's run by a British scientist named Peter Dasek. Okay. Chamath Palihapitiya (01:13:39): By the way, who doesn't who doesn't support eco, health, and an alliance? Yeah. The crow buddy. Branding. Yeah. Exactly. We love puppies. David Sacks (01:13:47): Yeah. We're yes. David Friedberg (01:13:49): So -- Angel puppy love. David Sacks (01:13:50): Yes. Exactly. So so Eco Health Alliance, which is has neither been good for the ecology, for our health, or David Friedberg (01:13:58): -- David Sacks (01:13:59): We're alliances. -- alliances. David Friedberg (01:14:00): Yeah. Keeping a bad name to alliances everywhere. David Sacks (01:14:03): Yes. So they then provide funding to the Wuhan Institute of Virology to study bat viruses where getting a function research then occurs. This lab in Wuhan is known to have had leaks in the past. So just from a security choice, not the best recipient of a grant. But that is what happens. Okay? And then we know the history from there. It's almost certain that Chamath Palihapitiya (01:14:25): this virus is dealt down. What's the element of this story that has to deal with the Lancet and the David Friedberg (01:14:30): -- David Sacks (01:14:30): Yes. I'll tell you. David Friedberg (01:14:31): -- Chamath Palihapitiya (01:14:31): person that worked for Fauci and then and then that person got a grant afterwards. What? Jason Calacanis (01:14:36): And and then just one other thing I wanna point out here so we're clear. This has become a very partisan issue, but the original fauxas were done by BuzzFeed and the Washington Post. Foya. Foya. Foya. Sorry. The Foya releases were done by Buzzfeed And Washington Post, and now you have Rand Paul on the other side of it who seems like really wacky and, obviously, conspiracy right wing. Black. So you have this, like, really weird partisanship that's now been embedded in it. David Sacks (01:15:03): Okay. Yes. Jason Calacanis (01:15:06): So, Zach, can you explain the partisan nature? And then Shamak has a question David Sacks (01:15:09): as well. I almost wanna take Shamak's question first about who is Isaac, hi. What is this Lance letter? Let me come back to parts and think. I'm just gonna try to establish the facts before we get into the partisan mess of this thing. So Peter Dasek is the guy who made these grants to the Wuhan Institute of virology. Okay? There is one other interesting fact When the west wanted to come in and investigate what happened in this lab, China approved one person from the west to come in and conduct the investigation. Guess who that was? Peter Dazzic. k? He was the only guy the CCP led in to go look at this lab. He then comes out of this whatever he did and says it has to be the zoonotic theory. He endorsed the wet market idea. It cannot be lab leak That is a conspiracy theory. And then he rounds up a group of scientists to write a letter to the Lancet. which is a respect to scientific publication, which David Friedberg (01:16:02): -- Chamath Palihapitiya (01:16:02): Incredibly respected. David Sacks (01:16:03): Yes. Which he signs in which he basically advocates the zoonotic theory, but he goes further and says there is no way that it could be lab leak and anyone who says as a conspiracy theorist, and that has an incredibly chilling effect on the scientific community because no scientist wants to be labeled a coupe or conspiracy theorist. Chamath Palihapitiya (01:16:22): Or heretical to the Lancet. David Sacks (01:16:24): Exactly. And this is a tight knit ecosystem of of of -- Insiders. David Friedberg (01:16:28): -- David Sacks (01:16:29): insiders and institutions and grants. No scientist wants a loser funding. Right? And then furthermore, Big Tag starts censoring his disinformation, the lab leak theory because they say, well, these officials Look at all the scientists. We have to follow the science. Right? So the science, according to this letter from the lancet, is basically on the side of the zoonotic theory. So you then have downstream censorship with this. So that that is who Peter Dasek is. And and and and in this letter, in the Lancet, he never disclosed his conflict of interest, which is the fact that he funded this Wuhan Institute of Virology to conduct the type of research that might have led to the leak of the virus. So this guy is hopelessly conflicted and has a reason to wanna suppress and cover up a lab leak and he never disclosed it. And look, so does Fauci. I mean, because Fauci funded Dazzic. So imagine, in February of 2020, when the lab leak is coming across the desk of Fauci, Does he tell the president, mister president? He's at the right hand over the pres mister president, we might have funded this thing. We funded Dazzic who funded the Wuhan lab, We, collectively, the United States government, might have some responsibility in this. Do you think that conversation ever took place when he was making his recommendations? he was hopelessly conflicted. And if the truth about this had come out and look, I'm not saying he had any intentional role. I'm not saying he wanted this to happen. I'm not even saying that he knew for sure that Dasek was funding the Wuhan lab. Okay? Let's just give Fauci the benefit of the doubt. but we all know how politics works. If it had come out in February of 2020, that Fauci had funded the guy who funded the Wuhan lab, and that's where the virus likely came from, his career would have been finished. David Sacks (01:18:17): Okay? Finished, we know that as a political reality. And so within days of scientists advising Fauci, hey. This thing probably came from the lab. The NIH has consolidated around the idea that this is a conspiracy theory, and they work to suppress it and they wage a public campaign. I gotta tell you when I have learned all these facts, I gotta tell you what I compare it to. It's almost like when we learn all those revelations about Bill Cosby, that hears this guy on TV for years pretending to be America's dad, and then we find out he's a monster. Fauci has been on TV for years lecturing us about COVID, he's been like America's dad, America's doctor. And lo and behold, we find out that he has a role. in this whole thing. And, look, I'm not saying David Friedberg (01:19:00): -- Jason Calacanis (01:19:00): Well, his intent was not to abuse anybody. His intent has been always to help people. So it's David Friedberg (01:19:05): a little bit of a gnarly. -- Jason Calacanis (01:19:06): give him I'm gonna David Sacks (01:19:07): give him the benefit of every doubt here. I'm gonna give him the benefit of every doubt. Okay? He's Jason Calacanis (01:19:12): called them Bill Cosby. David Sacks (01:19:13): I'm gonna give him the benefit of the doubt in the sense that he didn't want to happen. He didn't have any he didn't cause that, but we know for a fact that he funded Dasek, who funded this lab. It's where the virus came from. Come on. We know that. And he covered it up. He engaged in a campaign -- Okay. Jason Calacanis (01:19:29): We suspect that. David Friedberg (01:19:29): -- David Sacks (01:19:29): the lab leak theory. That is a conflict of interest. Jason Calacanis (01:19:32): Let's get let's get Freeman on the science. What do you think as some a man of science, Friedberg, the Sultan of Science, in fact, about these emails and the chances that Fauci essentially was funding, gain of research, and then attempting to cover it up, which is the accusation. David Friedberg (01:19:50): a question of science. Like, there I mentioned this in the past. Jason Calacanis (01:19:53): Jamie Metzel -- -- community. You know? David Friedberg (01:19:55): Jamie Metzel did a a podcast interview with, like, Freedman. It's worth listening to. It's a couple hours long if you got some time to kill, but he does a good job contextualizing these and what may have gone on that led ultimately to the lab leak and also the lab leak cover up. I don't know what happened with Fauci and emails. I have not read this stuff. So I I, you know, I I have no reason to believe that Fauci is now that he had some reason to harm or hurt. I I could see that there is a certain degree of nervousness to accuse the biggest foreign government and potential US adversary of pausing a global pandemic and and not wanting that sort of conflict to arise at a period of time when you really need to take care of your people, and we really need to focus internally as a country on how do we get through this pandemic. making that I'm Jason Calacanis (01:20:48): trying to David Sacks (01:20:48): respond to that. I gotta respond to that. No. David Friedberg (01:20:52): No. No. No. No. David Sacks (01:20:52): I have to respond to that. I'm not saying that Fauci or anyone involved in that process should have accused China, but that's not what was their decision and that what was not what was made They decided to stop the debate altogether. They decided to suppress the debate. David Friedberg (01:21:07): What would you have done in that seat sex? You're sitting in that seat, and the country is potentially facing a pandemic that could wipe out millions of Americans. David Sacks (01:21:14): I'll tell you. David Friedberg (01:21:15): Where do you prioritize? How do David Sacks (01:21:16): you how do you I'll tell you what. If I was sitting at the NIH and I wasn't hooked conflicted, I would probably have just said, listen. I don't know what the origin of the virus is, let that debate continue. I would not have tried to wage a public campaign against the people, against the scientists who were honestly pursuing in good faith. Where this virus might have come from? we can learn things, maybe how to avoid something like this from happening again. The people at the NIH should not have engaged in that type of politically minded PR campaign. They just shouldn't that's not their job as scientists. And then to find out that they have a conflict of interest, on top of that that might be motivating that desire, that is not that is not appropriate. Chamath Palihapitiya (01:21:57): I I think it's really important, Freeport. You can probably agree with that at some point, some journalists should really simplify this for all of us because it's it's a it's an incredibly important topic that we need to look at at the end of all of this, assuming that Omicron is the end of this chapter because it's been a horrible chapter for the world. but we do need an accounting of the truth. Right? And I think that that's really important. David Friedberg (01:22:22): Look, there there was an episode many ago when I said I don't know and I don't care about whether or not the virus came out of China. And, again, I was somewhat kind of misstated as the intention of why I said that. The reason I said that And what I really meant was that what happened even if it was a lampley? What happened was really the tip of the iceberg. The ability the bioengineer pathogenic organisms is becoming ubiquitous. The toolkit to do gain of function research as it's being called in the press It's a very simple toolkit. The ability to engineer organisms that can cause catastrophic harm to the human species is becoming available on the Internet and with tools that any of us can buy and use in our garage. And so what I'm more questioning and what I'm more concerned about and what I care more about is what is our global biodefense strategy are we getting ahead of the next wave of this happening? And it's not about the who said he said she said Chamath Palihapitiya (01:23:12): she said what those things David Friedberg (01:23:14): are -- It's really important to understand the technology. -- David Sacks (01:23:16): we need bio defense when they're saying it came zoonotically. They're saying it came from an animal when actually was created in the lab. If you wanna have biodefense, we gotta first say that it came from a lab. David Friedberg (01:23:25): -- or yeah. You're right. Whether it separate question to me whether it did or didn't. The tooling to do this is absolutely possible and the ability for these sorts of viruses to leak out and be made and turned into a weapon is significant. It's a real risk. And so I'm more -- -- you guys. I think both Chamath Palihapitiya (01:23:41): of you guys are safe. David Friedberg (01:23:42): -- figuring out how do we solve this problem? Like, how do we solve this problem? Like, how do we Chamath Palihapitiya (01:23:45): both of you guys are but both of you guys are saying Nuance versions of David is saying, we have to have an honest accounting of what happened. if we could if we're supposed to actually have an eco health alliance. David Friedberg (01:23:57): Yeah. I'm not by the way, I'm not I'm Jason Calacanis (01:23:58): not I'm not David Friedberg (01:23:58): I'm not comparing that. Yeah. Yeah. Jason Calacanis (01:24:00): I'm not just making David Friedberg (01:24:00): I'm not dismissing that. Yeah. Chamath Palihapitiya (01:24:01): And you're saying we need to actually formalize gain of function research because everybody has it, and so it's going to be inappropriate for us to ignore it David Friedberg (01:24:10): going forward. -- to assume game in the function research leads to dangerous pathogenic bio organisms. Chamath Palihapitiya (01:24:15): And then we need to and then we need to David Friedberg (01:24:17): and then we need to form you it doesn't. And then we need to formulate a biodefense strategy. I'm just saying, like, we don't Chamath Palihapitiya (01:24:22): The implication the reason why Saks's thing is important to me is the implications we have to have an honest accounting of these implications. We saw another implication just this week in Flint, Michigan. They shut down indefinitely the public school system in Flint, Michigan. Okay. This is a society just to give you a sense of the facts here. 90% are minority. David Friedberg (01:24:43): 80% Chamath Palihapitiya (01:24:46): Because of COVID. Yeah. Because of the fear of of catching COVID and spreading COVID. But the and and the 8 90% are minority kids. 80% are in poverty. I don't know how, you know, 80 percent of kids who are in poverty are expected to have a laptop and Internet says on a consistent basis. This is the same place that screwed up the water system. So I don't I so I think, like, we have to have an honest accounting of of all of these things because the implications are real. David Sacks (01:25:16): This is the biggest story of our lifetimes, COVID. I mean, it might be the biggest international incident since World War 2. And the fact that the major, let's call it, prestige publications have not really fully investigated David Friedberg (01:25:28): -- Jason Calacanis (01:25:28): Hold on a second. David Friedberg (01:25:29): -- Jason Calacanis (01:25:30): is unbelievable. Penundrum to me. because this started with a massive amount of coverage from BuzzFeed, Washington Post, New York Times in June of last year 2021 They were covering this like crazy event, and they fair did a major investigation. And then it seems to have gone silent And then Rand Paul has been going after this, and it all of a sudden became partisan. So the only coverage I'm seeing of it that's independent is the intercept. but then everything else is the hill and, you know, really weird, far right stuff that wanna, like, you know, Fauci needs to be whatever. And how did it become so partisan if it started with left leaning publications getting this information Like, how did this become partisan? Because the president changed in the middle of all this? Like, what do you have an honest handicapping of why we can't get you know, like, a consensus on what's actually happening here from the press. Is it Rand Paul's too polarizing? David Sacks (01:26:27): Well, I think what happened is if you go back to February of David Friedberg (01:26:31): 2020, David Sacks (01:26:32): if you look I just had this conversation with Ashley Friedberg on my call in show. And know, he's -- A plug. David Friedberg (01:26:39): What does a plug? Now available, Larry. I draw it. Call it. David Sacks (01:26:43): Can I he he he literally wrote the book on The New York times, and I asked them about their coverage of of David Friedberg (01:26:48): -- Probably would account. Jason Calacanis (01:26:50): You could trade that out, Robert. Gotcha. So fine. David Sacks (01:26:54): Can I can I finish? Chamath Palihapitiya (01:26:56): Sorry. David Sacks (01:26:56): This is the guy who literally this is the guy who literally wrote the book on The New York Times, and I asked him about the New York Times coverage of of COVID and COVID origins. He says that on February 17th, so basically 2 weeks after these officials at the NIH settle on the conspiracy theory narrative. That that narrative is then published almost word for word verbatim using the same language, not just the New York Times, in the Washington Post across all these major publications. So what you see there is a PR campaign. It's a concerted effort. You don't get the same words and language being used across all the major publications at the same time unless somebody is pushing that narrative. We all know this. This is corporations do this. Right? They run PR campaigns. That is what basically happened. And so the prestige media got on board this zoonotic theory and this idea. Look. Like they've done so many times, they got on board WMD interact before realizing it was a total farce and a hoax. Okay? They so they got themselves on record behind this conspiracy theory idea. And, similarly, I think the Democrats got themselves on record as being pro Fauci and everything because of, you know, TDS. Right? Anyone who's standing up to Trump must be correct and defended. And so all of this happened in 2020. And so by the time we now fast forward to, let's call it an honest investigation of the origins of the virus, which should be bipartisan. This should not be partisan. We should all want to know what happened. We should all wanna take the politics out of it. Because without knowing what happened, how do we prepare for it in the future? Everyone's already, like, hopelessly committed to positions they took in 2020. And I think this was driving the partisanship. Chamath Palihapitiya (01:28:42): Yeah. I think you're right. Jason Calacanis (01:28:43): Yeah. I mean, that's the thing I'm trying to get to is, like, when I saw you wanted to put it on the docket, I'm, like, trying to grok this, and I can't find I'm finding all the left leaning coverage from June of 2021, none since then. And then it's alright coverage now, and I think it's something we need to get some independent coverage with. David Friedberg (01:29:03): So I'll take credit I'll take credit for saying Fauci is the biggest political Luther at our all in Podcast recap. Thank you. I'll take my bow now. Jason Calacanis (01:29:11): Well, I mean and the the other thing that's kind of David Friedberg (01:29:13): -- David Sacks (01:29:13): We have our questions have come true already. I mean -- I know. Jason Calacanis (01:29:16): We're so correct on these things. The thing that's, I think, just infuriating right now is that everybody is trying to manipulate the public and they have not understood that in this media environment, the truth comes out kind of not only eventually, but pretty quickly, So stop trying to game the public either way that the vaccines don't work. David Sacks (01:29:39): But, Jay, they've delayed they've delayed the public reckoning on this by, what, like, 2 years? Jason Calacanis (01:29:43): Well, here's the thing. There's a so I agree with you on that. There's also a forward release that happened in the UK where and it's it's a little too much to get into right now, but this forward release now is looking at all the people who died in the UK of COVID. And it turns out, like, maybe more people are dying because they didn't get their cancer or a large number of people died because they didn't go in to get tested for cancer. And all of this is gonna come out eventually and not putting out every day, the ages and the comorbidities of people who died of COVID just led to this feeling that we're getting game and turning on CNN and seeing the case counts in a cumulative chart is like a startup giving me, like, the cumulative number of people registered for their company for their product. We don't care about that. We wanna know your daily active users David Sacks (01:30:28): like that. What about what about the catastrophic impact of school closures that we've been talking about in the show repeatedly? Jason Calacanis (01:30:33): You know, I I've only seen one. manipulated. Stop manipulating the public. David Sacks (01:30:36): Look. You you have to realize that there is huge political motivations here because huge CYA going on because the heads of the teachers union said there is no learning loss. They are the ones who lobby to shut the schools down. they sure as hell aren't gonna admit their mistake now, they're covering it up. And so any politician who takes their money is basically they're gonna muffle their criticism There's only one really honest, like, left wing guy I've seen acknowledge the school closure issue, which was Jonathan Chate, had a great article in New York Magazine. saying that progressives must acknowledge the mistake of school closures because otherwise, we can't learn from it. He has been a voice in the wilderness on that side of the aisle. Jason Calacanis (01:31:16): We we gotta wrap up. Now that Saks has cracked open the plugs, what are we all working on? because I I wanna give a plug to Friedberg who did a great interview on a tech podcast called this week at startups where he announced Hannah So it's a dual plug here, Friedberg episode of this week in startups. Maybe you could tell us a little bit about the launch of of Cana, your new David Friedberg (01:31:39): -- Chamath Palihapitiya (01:31:39): Yeah. We're a duplicator. David Friedberg (01:31:40): we're just announcing the business, which I talk about a lot on JSON Pod, so definitely worth hearing. But as you guys know, I've talked a lot about this concept of decentralized manufacturing sharing where we can kind of move old school industrial production systems, which are super inefficient. We use lots of resources, move stuff into factory, process them and then ship the products back out. And, you know, technology now allows us to have more distributed or decentralized manufacturing potentially. So what, you know, what we've been working on for 3 years at this point is a company called Cana, which is really about, you know, printing beverages in your home. So you can use a single device to print iced coffee or iced tea, cocktail, juice, wine, soda, etcetera, all using a single flavoring system and water from your from your sink. We talk more about it on the pod, but I think this is a big theme know, forget about Canada for a second, but generally, like, the systems of old, like, you know, the industrial revolution created all these old school systems that are big contributors to carbon emissions and are super resource inefficient. And I do think that everything from 3 d printing to biomanufacturing to the system that we kind of introduced today with Cana, can completely reinvent our global industries in different ways and ultimately lead to cheaper product better products and products that use much less natural resources and put less carbon out. And so it's been a big thing that we've been working on. I'm excited to kinda open it up a little bit and talk more about what we're doing. So thanks for having me on. Jason Calacanis (01:33:10): And it's the mute. Are you Chamath Palihapitiya (01:33:11): did you hire the mute SSO person? David Friedberg (01:33:14): He may or may not have his brand on here. We'll see. There were so right now, the business is is signing up lots of different folks that can create digital beverage brands. And so if any of you guys wanna have Jake House, you know -- Hard cider. -- hard cider. Here we go. We'll we'll be launching to that. But but that's -- Yeah. And I've -- Chamath Palihapitiya (01:33:31): That's a bit of Jason Calacanis (01:33:31): how to work. actually told me his his new his new soda that he's gonna be bringing, it's called it, muc cola. It has five times the sugar. of Coca Cola. Other than that, it's just like any other colder, but you get five times the calories. David Friedberg (01:33:44): -- grips out like maple syrup. Chamath Palihapitiya (01:33:46): I'd like to I'd like to do a I logged in. Jason Calacanis (01:33:48): Did you get a plug? I'm sorry. Project Jordan. David Friedberg (01:33:50): But I Chamath Palihapitiya (01:33:50): I wanna I wanna say it again. In Genesee County in Michigan, Flint indefinitely shut down their public schools this week. What is going on? You have thousands of kids who at best will have to learn via zoom and Internet access that most of these kids may or may not have because, again, You know, they're they're in poverty. And so I just wanna make sure that everybody just understands that. Jason Calacanis (01:34:15): Everybody tweet that and and David Sacks (01:34:17): talk about -- -- inflicted wounds. Jason Calacanis (01:34:18): Well, here's the thing. It the these kids this is one of Eric Adams points. David Friedberg (01:34:23): 90 90 Chamath Palihapitiya (01:34:24): percent minority, 80% in poverty. all virtual until further notice Well, Jason Calacanis (01:34:29): here's what's gonna happen too. Chamath Palihapitiya (01:34:30): It goes right against the CDC guidelines. Okay? And This is really the accounting of the cost. And we are as we said before, learning loss in our kids is going to be the single biggest thing we look back in 20 years coming out of this pandemic. and realize was the the the the biggest price we paid for this. So And here is Jason Calacanis (01:34:50): the stupidity of it. The what the and Eric Adams and the and the New York City, you know, sort of leadership we're talking about this. When these kids are in school, okay. There's a chance they're gonna get Omicron. Like, everybody got Omicron. Like, everybody has it now. Like, it's crazy how many people in our circle have it. The only person who doesn't have is Phil Hellmeade. Now What's gonna happen when they go home or they're not at school and they're hanging out with their friends or looking for something? They're gonna get it anyway. What Eric David Sacks (01:35:19): Adams said is that school is the safest place for them to be. Chamath Palihapitiya (01:35:22): Yes. Totally. Totally. If David Friedberg (01:35:24): and then -- School shutdowns are just so insane to me. right now. It makes David Sacks (01:35:29): no freaking sense. Unisav had an article, which I'll dig up, where they said that the cost in future earnings by this generation of students who suffered learning loss is gonna be 17,000,000,000,000 -- Oh, yeah. David Friedberg (01:35:42): -- David Sacks (01:35:42): worldwide. That's gonna be the economic impact from this thing. Not to mention the stunts of social and emotional development by locking these kids down for a Chamath Palihapitiya (01:35:50): year. Jason Calacanis (01:35:51): Anxiety PTSD. I mean, this is gonna create depression in kids. We need to solve this. Chamath Palihapitiya (01:35:56): We gotta we gotta get the we gotta get the schools in Flint open. Jason Calacanis (01:36:00): Alright, everybody. For the dictator, Shamoff, Palihapitiya, David Friedberg, the Sultan of Science, and the rain man himself. David Sacks. I'm Jake Howell. We'll see you time episode 65. Love your besties. Bye bye. Speaker 4 (01:36:15): We'll let your winners ride. Jason Calacanis (01:36:18): Rainman David Sachs. Speaker 4 (01:36:23): We open source it to the fans, and they've just gone crazy with it. the Chamath Palihapitiya (01:36:45): we should all just get a room and just have one big huge door because they're all just useless. It's like this, like, sexual tension that they just need to release somehow. David Friedberg (01:36:54): You're the BP. What? You're David Sacks (01:36:56): a thief. David Friedberg (01:36:58): What? What? What? Jason Calacanis (01:36:59): Where did you get merkeys on that? I'm going Oh,