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All right, everybody. Welcome back to the number one podcast in the world. It's the All-In podcast. The original
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Quartet is here. Bizarre David Saxs. How you doing, brother? >> I'm good. >> You got a busy week. A lot of long posts
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from you on X. We'll get into it. >> Wait. A lot of what? >> Long posting. Lot of long posts.
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>> I had like one long post. >> Yeah. How's the carpal tunnel going over there? Two long post.
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>> Yeah, that carpal tunnel flaring up. I got a third one teed up. I I might use
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one. You got one in the chamber. >> I got one in the chamber, but I was going to save it for the pod. It's a
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good one. >> Oh, coming in hot. I wonder who's going to get this bullet. >> We'll let your winners ride.
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>> Rain and we open source it to the fans and they've just gone crazy with it. Love
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you. We can all >> a cackling of course that's the dick in dictator >> is my bestie
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>> Holly Hapatia how you doing brother getting ready for summer jallet have been laid on the bed you're ready to
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pack it up >> opposite I got a lot of travel grinding >> oh I forgot you're doing founderled
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sales so the summer of relaxation's over now he's in the CEO slot. Got to get out
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there and do those enterprise sales. And of course coming off a pretty hot week.
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Comment section was on fire. >> Very pro- Freeberg. Very pro. >> Very Freeberg had perhaps his greatest
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performance. Also >> greatest. >> The first performance when he said more than three sentences. What's going on
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Freeberg? You went off last episode and and then I think you also with the long posts.
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>> You know what's so funny? As the valuation of Oho ticks up, he gets more and more based. I love it.
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>> He is getting >> Welcome to the club. Welcome to the club. >> He's got trace comm's base.
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>> Unleash the beast. >> When you're just a mere singleton, you kind of just keep it to yourself and
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then all of a sudden it starts to pick up. >> Nine figure freeberg. He's like, I got
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something to lose. >> Wait for a 10 figure freeberg. >> 10 figure freeberg's like yolo.
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You also with the long posts you and Nancy Pelosi. uh making sweet sweet let him go
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>> what is being formed in the United States right now is the great American burrow okay the great American polic
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is being formed >> the new oligarchs are taking their seats they're arranging the chairs
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They're determining who will be chairman of the pilot bureau, who will assign what workforce to do what efforts for
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them, which $600 million stock trades their families will make to benefit and enrich themselves as they fly around in
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their private jets on the taxpayers money. And we are watching it all before our very eyes as individual liberties
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are eroded. I am fired up about it. I see it happening. You know, Sax is on the show this week. You can't just take
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strays like that. >> Freeberg, expand on who the PA bureau is. >> Yeah. So, so basically the the pilot
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bureau is the leaders who elect themselves to dictate the flow of the economy, the allocation of capital, what
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work individual they're allowed to do, and what what activities they're allowed to do in an unfree society, which is
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what they're creating. They are the true oligarchs. And this is Elizabeth Warren,
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Bernie Sanders, Ro Kana. This is the uh the group that is trying to coalesce power and create for themselves a system
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whereby they have greater influence, greater control over aspects of the economy. They want to seize the means of
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production. They want to control education. They want to control media. And anytime there's an effort by an
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individual enterprise or an individual themselves to go out and build a business and succeed and do something
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that's outside of their scope and their span of control, they lose their minds over it. And that's what we're seeing.
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So, I react to their tweeting and their [ __ ] where they're basically trying to contort things about inequality and
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fairness and justice when the truth is they are the rising empire, the evil empire in Star Wars. They are
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>> the folks who want to take from all of us what we were endowed with when this
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nation was started and what many people came to this country for, which is individual freedom and liberty. the
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ability to build a business in peace, the ability to make decisions, to do what you want with your own assets, and
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to have functionally private property. And they're taking it all away, and they're trying to take it all away. And
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we're watching piece by piece, step by step. So, they are forming a poll burrow where they can effectively control the
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economy, control education, control the media, and tell us all what we can and can't do and say. And it's frustrating
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to me to watch it because it's masqueraded as [ __ ] virtue, as justice, as equity. It's a bunch of
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nonsense words that they use to try and make themselves seem virtuous when in the end of the day they are
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fundamentally evil and I hate watching it. So that's why I react so aggressively to it. Freeberg, you I
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think you said something that's really important which is they they presented as virtue.
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>> That's right. >> Put yourself in the body of a person that's probably middle of the roadish but is falling for it.
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Why do you think they're falling for it? >> Because they have needs and wants and
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desires individually that this person is saying this system, this evil empire will give to you. If you take the knee,
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we will give you the education for free. We will give you the child care for free. We will give you the food for
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free. We will give you the the paycheck every week. We will give you, we will give you, we will give you. Those
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promises in a democratic system like this or in a fake democratic system like this are what make people feel like the
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the virtuous uh offerings will align with their individual needs and wants. And I think that that's why people say
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like, okay, that's good. Free childare for all. There is inequality in the world. There is disparity in wealth.
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There is disparity in asset ownership. and your solution despite you know the the loss of liberty along the way and
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the loss of economic mobility that arises from what you're offering me and this is really key people don't realize
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the value of the United States the power of this nation was to give people individual liberty which which unlocks
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agency to progress yourself to educate yourself to make money to give yourself more assets and more freedom and more
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flexibility than you had economic mobility is the key to the United States. You do not get economic mobility
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if the government is giving you a job or giving you money. You lose economic mobility. You become indentured to the
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government. Everyone wants more. Everyone wants something that they don't have. But the truth is that the more the
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government is giving it to you, the less you have mobility. The more you are indentured, the more you are enslaved,
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and the more we are limiting people's ability to progress. And I think that that's what's really so frustrating for
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me is that people sign up to this, to your point, Jim, and they're like, "Okay, that's great. I get to have this
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and I get to have that and I get to have that. But at the end of the day, you're
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giving all of your liberties up. You're giving all of your progress up is what you're saying. And you're
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looking for them. And you don't have agency to pursue your own personal freedom.
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>> Yeah. >> One thing I believe to be 100% true is that no human being that's ever been
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alive has ever lived up to their true capacity as a human. >> Like human agency is limitless.
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>> Limitless. >> Limitless. And and the truth is like anytime that you create a system with
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the government that's giving people stuff, you are taking away people's agency. And so that is what is so so sad
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about the whole thing is like human agency is the one thing that we have unlimited capacity, unlimited infinite
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upside. Every human does. and and to and shroud yourself in this government burden thinking that it is a relief.
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>> Well, then that creates helplessness because you're always looking to the government to solve your problems.
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>> The threshold for learned helplessness is far far lower than one may think. I grew up on welfare
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and my mother was initially a housekeeper and then she was a nurse's aid. She was probably making eight,
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nine, 10 bucks an hour. My father couldn't get a job. So, we were on welfare and welfare was probably 17, 18,
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$19,000 a year at the time in Canada. And it's a family of five. But it was just enough that my dad just
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spent this cycle between drinking and not working, drinking and not working. And he would try in bursts. And you
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know, I I think that it must have been deeply frustrating for him, obviously. So, I want to be compassionate to the
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struggle that he went through, but man, I would have thought that 17,000 is not nearly enough support. And so, it would
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animate you to try to do whatever it took. But could he have gotten a job making 8 n 10 bucks an hour at a store?
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He could have. He chose not to. And so my recollection of being a ward of the state is that the
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threshold for that helplessness is far lower than one may think. >> Right? >> And then if you actually stack all these
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other things, people will just fall into their worst proclivities and they will be a shell and a shadow of
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what they could be. My dad was in my mind the giant who had all this potential unfulfilled.
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And I keep that because I want a positive sense of who he was to me despite all of the ups and downs and the
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stuff that he went through and how it it negatively affected me at times. But man, if you want a whole country of
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those people, what happens when you're giving people 30 40 50 60 70 $80,000 a year of stuff? One, at some point you're
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not going to be able to pay for it. But two, you're going to reduce people to a shell of what their potential is. And
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that is not good. I have lived it and I am warning all of you. Be careful what you wish for.
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>> The flip side of it, by the way, as you point out, you can't pay for it. What
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ends up happening is the moment that we find ourselves in today, and we see it in, and we'll talk about Pritskar's law
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in Illinois that passed this week, but we are now at a moment where we are saying there is no longer private
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property in the United States. This is one of the foundational rights that the founders of the United
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States try to create a distinction between these other nations that everyone flees from where a monarchy or
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a totalitarian government or some communist system says everyone owns everything together or some small number
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of people own and control everything. And that's what this always comes down to. Whether it's a socialist state or a
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communist state or a monarchy or some other totalitarian regime, there's a small number of people that own and
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control everything. And that is the brink that we're on because they are trying to say for the first time ever,
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there is no longer private property in the United States. That if the government can say everything that
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you've already paid your income tax on and then you've bought and you now own, the government can take a piece of it
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every year based on the vote and the budgetary needs of an irresponsible fiscal legislature,
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>> we've lost it all. >> And that's where we are. And we see this, it just passed in Illinois. People
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think it's just crypto, just like they think the billionaire tax is just billionaires.
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>> But anytime the government can take your private property after you've paid your
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taxes, bought something, and put it in your garage, we are done for. >> Yeah, we're going to get that. That is
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when the pallet burrow has unlimited capacity to tax and take and do what they want. Here's
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>> that's the moment we're at. Well, and the the super sinister part to to dovetail what both of you are saying and
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to give some grace to your dad Shimath in the studies of learned helplessness for people who you know are trying to
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guess what that term is who who haven't heard it before psychological condition if you give people a hard problem to
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solve like an impossible problem to solve they don't solve it then you give them easy problems to solve they don't
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solve the easy ones and they become depressed and then they attribute their depression to themselves they
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internalize it in other words if you give people easier problems to solve uh and make them increasingly harder as
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you go. They become empowered. They have agency. They feel like they can solve problems. And then when they get stuck
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on something, they don't attribute it internally. And this is the why alcoholism is so pernicious in our
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society as well is because when you start attributing it yourself and you then you start self-medicating. You try
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to dull these feelings because you're depressed. And I've had many friends who've gone through it and family
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members. And this is why having agency is so important. This is why endless unemployment is so dangerous. Uh, and
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you need to taper people off and you need to give them a chance to be successful. If your dad had taken that
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$102 an hour job, he would have become the manager. Then he would have become the owner of the place. So the koda to
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your story is at some point I think and I don't know because my mom doesn't share this with
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me. There was some kind of breaking point because it was a really violent household. And then near the end of my
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high school career when I left things got I think materially better and part of it was because he got a job
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>> and ultimately he got a job pretty low-level clerical work at the government but we were so proud of him
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and he did that until he passed away but it changed him completely. Now, it could also been
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because he had gotten older, you know, but drank a lot less and was much more regulated.
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>> Yeah. >> So, I completely agree with what you're saying. It's a really sad phenomenon and
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you and you see it sometimes in successful people. They get successful very quick. They don't attribute to
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their own success. They get up out of bed in the morning. They don't have to get out. They start drinking. They don't
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take a job. And they're affluent, but they're just not motivated. They don't have purpose. All right, let's get
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started. We got a huge docket to get through today. SpaceX had a record-breaking IPO and $60 billion
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cursor deal was quickly consummated as predicted. Friend of the pod Elon Musk took space X
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public last Thursday. $135 a share. A lot of people got to participate. Robin Hood, Charles Schwab, everybody talking
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about they got an allocation, one share, 10 shares, and they filled the green shoe 85 billion raise. That's three
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times what Saudi Aramco raised back in 2019. stock closed up 19% to 161 market cap above two trillion and uh at the
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taping of this pod $177 not too shabby on Tuesday SpaceX exercised its option to acquire Cursor that's the coding
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agent that got shd by speaking of Anthropic and Claude they originally used Claude to be the back end of Cursor
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and then Claude and Anthropic had an internal Skunk Works project they told Curser allegedly they were never going
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to release it to the public they would never have a coding agent and they did and that led to this incredible
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opportunity for cursor to make their own model and use Elon's hardware at Colossus. They're doing 4 billion in
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revenue. So they got bought for 15 times revenue. SpaceX trading I don't know 60
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70 times revenue. So a great deal for everybody. SpaceX briefly passed Amazon and Microsoft which is mind-blowing to
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be the fourth most valuable company. Amazon's revenue in 25717 billion. Microsoft's 2025 282 billion.
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SpaceX is 2012 only 19 billion. So um they that's corrected a bit and now SpaceX is sitting at seventh largest
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company right behind TSMC. That's the Taiwan Semiconductor Corporation. So let's just go around the horn here.
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Congratulations to Elon and the team over there. Elon exercised his Tesla shares that he had coming from his
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employment uh there. I think he's done a pretty good job as CEO. He got a little
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bonus. So that sets up potentially Chimath, the merger of the two big companies. Just broad strokes, what's
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your take from take away from the SpaceX IPO? Seems to have been executed flawlessly. It's an incredible company.
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It's a one of one. It's just a unique unique animal. I think that the highest price to sales
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was essentially these last few days and now it's just going to grow into its valuation and generally just grow
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valuation. Nick, play the clip. The acquisition was essentially negotiated and the way that
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it's structured is so that the S1 doesn't go stale. So I think the way that it was announced has more to do
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with the fact that they don't want to slow down and have to rewrite parts of the S1, have to redo the disclosures,
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have to redo the risks. The deal is effectively done. >> But what's so smart is that where is
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SpaceX today, let's call it a trillion, where could it be, just for the purpose of this argument, let's say 2 trillion.
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So when the deal gets done on a stock for stock basis, it's going to be again if it's 60 billion in tomorrow dollars,
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effectively Elon's gotten a 50% discount. >> All right, they'll give that and Okay,
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sure enough. >> What I didn't factor as well is that the revenue run rate would essentially
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double on top of that. So he essentially got cursor for 15 billion. >> You got a good deal,
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>> which is unbelievable. His business intellect is off the charts. That is an incredible deal. And now the
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consolidation phase will begin and we're going to see Tesla and SpaceX merge and
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it's going to be glorious. >> Sax, you can also take a little bit of a victory lap here. You've been friends
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with Elon since PayPal days obviously and um you obviously were an investor in SpaceX for a long time. Your thoughts on
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what this means for the company? Obviously, it's an incredible milestone, but what does it mean for the company
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going forward? obviously champagne bottles yada yada but what does it practically mean for SpaceX and Elon
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going forward? >> Well, in a certain sense, as we all know, this was the biggest IPO of all
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time. And so, in that sense, it was a huge milestone for this company that Elon and many other people have been
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working on for a very long time. I mean, this has been 25 years in the making. When people turn on the TV and they see
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this, they think that this is just some sort of overnight success. It's not. A lot of people had to work very hard to
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get to this point. But at the same time that it was this historic IPO, it's also
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the case that in a certain sense this didn't change anything for Elon. You know, I think when people read that he's
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the world's first trillionaire, they start to think that he must have gobs of money, a trillion dollars sitting in a
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bank account, and that's not true. That's not how it works. That's not how wealth is created. He doesn't have one
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more dollar in the bank than he did the day before the IPO. He doesn't have more
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stuff. doesn't have more houses or anything that you could buy with money. Literally, his balance sheet is exactly
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the same. It consists of the same thing. It's just that the public is putting a higher value on the shares of stock in
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SpaceX that he already owned. And he's not selling. He's under a one-year lockup. And I predict that he'll hold on
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for much longer than that because creating SpaceX is his life's work. So, you know, you see all these people
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reacting with tremendous animosity and basically saying that, you know, we can't allow the world's first
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trillionaire, you know, stuff like that. Look, he doesn't have more cash than he
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did the day before they >> it's paper wealth clearly. >> It's that other people are placing a
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greater value on what he's built. >> Yeah. >> And I think this is very important for
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people to understand is that there's a big difference between stuff and then the machines that make the stuff. And I
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think again this is where wealth comes from is the machines that make the stuff. So you know you go all the way
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back to hunter gatherer days right the only wealth was in what you could collect hunt gather whatever it's
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basically the collection of stuff. Then humans develop the ability to create tools and then very sophisticated tools.
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And then some of those tools are corporations which are almost like cybernetic organisms or combinations of
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tools, workflows, humans work in them. And it's those corporations that make the stuff. And the way that people get
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wealthy is that if you create a machine that makes more stuff, then there's a discounted present value for all the
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stuff in the future that that machine might create. And that's where the wealth comes from. It's in the
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discounted present. >> It's not in the stuff. It's in creating a machine that will create stuff for
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humanity for a long time. And people will put a value on it today. >> That's really
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>> because of all the stuff that it'll create in the future. And so just out of nowhere it will appear that all of a
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sudden you have all this wealth created. But again that wealth is a reflection of
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all the stuff that this machine will now create in the future. And people need to
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understand that that process is a good thing because when you think about all the progress that humanity has made,
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it's not in having more stuff because again that stuff it all goes away right whether it's food or shelter whatever
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>> it it depreciates. It's a wasting asset. The reason why humans are more prosperous is because of all the
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machinery we've created to make stuff well into the future. And you know again some that stuff can be things like
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shelter clothes. It can also be medicines and cures and entertainment and all the things electricity all the
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things that make your life better. We need those machines and someone has got to own the machines and the people who
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own it are the ones who create it. And the thing that Karl Marx never understood is that it's not this sharp
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delineation between capital and labor because you can take people who start with nothing. You don't start with
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nothing. I mean he was a immigrant >> to the United States. Slept on the floor zip too.
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>> Yeah. On the floor. >> He created these companies. He created these machines from nothing with his own
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vision and hard work. And he included thousands of other people. So, here's the other thing is just because you're
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quote unquote labor doesn't mean that you're not also an owner of capital. There's a great story about how there's
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a welder >> who worked at SpaceX who I think has made a million dollars in SpaceX stock
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transformational. But everybody who's part of these companies and I think this is the magic of the tech industry. It is
00:22:45
it is much more inclusive in terms of ownership than any other industry. It's the magic of capitalism in free markets
00:22:52
where anyone can participate in that market, anyone can enter that market and ultimately anyone can transition from
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being labor to capital. >> Yes, it's fluid. It's back and forth. If you buy shares in a company and you have
00:23:04
the ability to buy them, you just vest them equity >> or you start a business and you
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basically do work, save money, invest your capital and continue to compound the capital to till you get to a point
00:23:17
that your labor is worth less than your capital. And that's what ultimately allows this economic mobility, this
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transition for people. And when you take that away, you destroy that capacity for
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mobility. That's why capitalism >> where we started today. Yeah, that's right. And that's why
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>> we started today with agency. >> That's why it's so frustrating to me to watch people denounce Elon's success and
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denounce the value that the world is putting on this business and on the success because what they're saying is
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that no future human, no kid that's sitting on a on a floor right now, sleeping on a floor that's poor, should
00:23:53
have the capacity to achieve what Elon achieved. No one should be allowed that capacity to transition, to progress, to
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mobilize themselves. at Freeberg. They're saying you should hate him. You should
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>> by denouncing him. And by denouncing that, you are basically taking that ability away. And you're saying that
00:24:09
this is evil. And you're telling all these young kids around the world that are thinking about their future that
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they are now indentured to a government or to a fixed income for the rest of their lives to perform labor for a fee
00:24:22
for the rest of their lives as opposed to having the opportunity to transition, which is what Elon has done and what
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millions of others have done because of the freedoms in the United States and and other free markets that have allowed
00:24:34
this to happen for people. And that is why it's not just about getting wealthy. It's not just about getting rich. It's
00:24:39
about having agency to transition yourself and inspiring young people and inspiring young people. Yeah, it's a
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different kind of transition. >> It's a good transitioning. No, you're transitioning from from labor to capital
00:24:48
by virtue of sweat equity. You have skills that are valuable that you can then translate into creating something
00:24:55
that's valuable. And just just to underscore that point, I mean, you think about SpaceX, it's a machine that makes
00:25:02
satellites. It's a machine that makes broadband connections from space. It's a machine that creates launch vehicles,
00:25:10
>> software, >> AI software and so forth and so on. So, it's a machine that makes things that
00:25:15
people want and that therefore enhances people's lives. And it's only the market, the public's value that it
00:25:22
places on those things that creates the net worth that creates the value of SpaceX's stock and therefore the net
00:25:30
worth of someone like Elon. But again, he doesn't have one more dollar than he had before. Well, and to put a finer
00:25:37
point on it, you have to earn that by continuing to make the best product in your class. The second Elon satellite
00:25:45
Starlink is not as good as the next two or three competitors and there are two or three of them coming right behind him
00:25:49
and there's other people doing rockets and obviously he's in a heated competition for LLMs and with Cursor
00:25:56
versus Claude Code. It's he's not guaranteed. He has to fight and he's had to fight to win each of those
00:26:02
categories. And the second he stops fighting in those categories, he loses and all that equity gets cut like we see
00:26:09
when stocks tank because they cannot keep up. So he's had to fight for every inch uh by making the best product.
00:26:17
Nothing was given to him. Everything was earned and earned by his team. This idea
00:26:21
that like he won the lottery is far. It's a 25 year overnight success story that had three or four distinct points
00:26:30
where it was going out of business and he had to scramble. I've always thought that the people that rail on wealth are
00:26:37
actually secretly incredibly jealous and want to be extremely rich. >> Because I've never heard a coherent
00:26:44
argument about why when somebody achieves something that you should dismantle the
00:26:51
things that they're building. And what you both of you said are so right. The facicissicitudes of the
00:26:57
market can make that number fluctuate wildly. There is a version of the market that has nothing to do with him that
00:27:04
judges his stuff in the future as half of what they're judging it today. Nothing stops us from doing that. And
00:27:11
all of a sudden, everybody who's breathlessly mad that he's a trillionaire, what do they say now?
00:27:17
Because he wouldn't be a trillionaire. He's some version of what he was the Thursday of last week. Right.
00:27:22
>> Right. Right. And you know to extend my analogy the machines become obsolete very quickly. You know in a capitalist
00:27:28
society you can get disrupted and companies get disrupted all the time. If they become stale or calcified if if
00:27:37
they don't if they don't invest in maintaining and upgrading their machine they will become obsolete
00:27:42
>> improving value. And you know what can't get disrupted? You know what can't get
00:27:45
disrupted? The one unobstructible monopoly government. And that's the problem. Government is
00:27:52
competing for capital and it's competing for markets and it's competing for all these things. And that's why I talk
00:27:57
about these people as being evil. They're a pallet burrow. They're basically trying to take away capacity
00:28:02
for value creation to make things better. Every generation for society, better medicine, better education,
00:28:10
better livelihoods, better homes, everything gets better. But when the government monopolizes it, it doesn't.
00:28:16
And that's the competing force that we're up against. >> Yeah. And and I want to just add one
00:28:21
thing to this which is there is a piece of this that needs to be solved which is
00:28:26
people wanted to participate in the success of these companies earlier and we Chimath and I interviewed the head of
00:28:33
the SEC and he's working on this but the amount of demand from retail and there was a very innovative thing that Elon
00:28:39
did and the team over at SpaceX they gave 20 or 30% of the IPO to retail investors when you opened up your Robin
00:28:46
Hood account I don't know if you guys have one or Charles Schwab It gave you a little interface that said, "Hey, would
00:28:51
you like to participate in the IPO of SpaceX and you could put in your request." I think six or seven, I was
00:28:58
talking to Vlad, maybe 6 or 700,000 Robin Hood users got an allocation. It might have been one share. It could have
00:29:04
been 50. That democratization needs to continue because the real uh back to Freeberg's points about being a wage
00:29:13
slave or an equity holder and trying to make that transition. Well, people being
00:29:18
able to open up Robin Hood and just buy one or two shares and vote with their dollars for 150 bucks that they want
00:29:24
this future as opposed to other versions of the future. That's what gives them that empowerment. That's what gives them
00:29:30
that agency. Well, what if they could do that earlier? And I've beaten this drum
00:29:34
on this podcast and my other podcast for a decade on this, but people knew SpaceX. They were watching these rockets
00:29:40
launch for a long time. and they would have placed that bet 10 years ago when the company was worth a hundred billion
00:29:45
or 10 billion or you know 500 billion but they weren't allowed to because we have a corrupt system in our government
00:29:53
that says rich people the top four or 5% of this country are smart enough to buy
00:29:57
private company stocks and the 95% are too stupid to and it's antiquated and it has to change and you should be able to
00:30:04
buy whatever you want if you want to buy crypto you can. If you want to buy a private company you can. If you want to
00:30:11
play cards with your friends and play bomb pots and watch Dave Freeberg rage quit because he keeps losing at
00:30:19
bomb pots when we play. That's Freeberg's right. Let people buy private company stock. It's [ __ ] crazy that
00:30:25
we still have this rule keeping poor people poor. Thanks for coming to my TED talk.
00:30:29
>> Can I take a shot at answering Chamas's question? Why why are there so many people who are influential who are
00:30:36
resentful of what Elon's done or what other capitalists do? I think it was Joseph Champa who explained this that
00:30:43
basically you've got this intelligencia in a society like ours where they don't make things they don't make the machines
00:30:50
that make things >> they just make words and you know I guess ideas and most of those ideas are
00:30:56
just wrong right they're just made up >> and they become resentful of the fact that there are all these people who are
00:31:03
able to create not just stuff but the machines that make the stuff right and that in our society. That is the thing
00:31:11
that creates the greatest reward financially. Why? Because it actually aligns with what's in the greatest value
00:31:19
for society. Whereas they produce a bunch of hot air. So it's natural for that class of intelligencia to become
00:31:26
resentful and hostile towards the people who are able to amass this great wealth.
00:31:31
>> I think that the great lie is that there are two sides to the society. That is
00:31:36
the rich and the poor. And the great truth is that there are two sides that are the makers and the takers. The lie
00:31:43
is that the rich are unfairly rich and the poor are unfairly poor. And therefore the poor must take from the
00:31:50
rich. But the truth is that it's the takers that tell you that lie. That the real truth is that artists, plumbers,
00:31:59
electricians, woodworkers, computer scientists, people that build, people that make from all walks of life, all
00:32:07
income levels, all wealth brackets are the makers. And the takers are what Sax calls this intelligencia, the analysts,
00:32:17
the espousers, the armchair mechanics, the critics, the commentators, the politicians. They are the takers. They
00:32:26
are the people that watch the rest of society make stuff, build stuff, specifically doing things that create
00:32:33
value for other people in society. That's what a maker is. Tell my kids this lesson all the time. I say, "What
00:32:39
did you guys make today?" They tell me something they made and I'm like, "Did someone else value it or did you make it
00:32:43
just for yourself?" At the end of the day, if you made something and someone else valued it, you were a maker. That
00:32:48
was an amazing achievement. That is a great day. Whether you make a piece of art, whether you build a house, whether
00:32:54
you write a piece of software, whether you build a business, whatever you make, if you're a maker and someone else
00:32:58
values it, they become your customer in some way, they become your partner in some way, you've done something
00:33:03
valuable. Those are the true engines of progress for humanity. And the takers are the ones that tell the lie that it's
00:33:10
rich versus poor because they what they want to do is rip apart the makers and they want to tell everyone you got to be
00:33:15
on one side of the other. And they use that lie to get everyone to line up against each other and to give
00:33:20
themselves ultimately the control to form the great American pallet burrow which is what they're trying to create.
00:33:27
That is what's underway right now. And that is the fundamental great truth and great lie that that we're kind of
00:33:32
fighting against at this moment. >> All right. This broke shortly after we taped our episode last week. We tape on
00:33:38
Thursdays, we drop on Fridays, as fans of the show know. Well, the US government has pulled the plug on
00:33:44
Anthropic's latest model. You've heard us talk about that as Mythos. They released it as a controlled version
00:33:52
called Fable 5. So, there was Mythos, that was the one they held for 30 days while they were doing security cyber
00:33:57
security testing. Then they released it as Fable and a bit of a um guardrailed version of it. Commerce Secretary Howard
00:34:05
Lutnik told Anthropic to restrict that model to US citizens last week, last Friday. In fact, Anthropic couldn't
00:34:12
implement those restrictions or wouldn't in that granular of a way. So, they just
00:34:16
decided to do something more conservative and shut it down for everybody. This of course created a lot
00:34:21
of hand ringing in the industry, rug pulling, oh my god, we lost this great model and what does that mean if I build
00:34:27
my models on top of anthropic? Can I trust them? yada yada. And this was just days after the model was launched on
00:34:33
June 9th. How this all started it seems to be that Amazon CEO Andy Jasse who owns a large Amazon is a an early
00:34:40
investor in Anthropic and they a large portion of it. He had told the administration uh that there was a
00:34:46
security vulnerability in Fable 5 that they were able to bypass to jailbreak the guardrails that Enthropic put on it.
00:34:53
Daario said the jailbreak wasn't serious. There seems to be some fingerpointing it back and forth and
00:34:58
Daario said it was narrow. separately semaphore a publication um like an email publication reported that
00:35:07
the White House acted partially over suspicion that a China linked group had access to Nethos and they weren't
00:35:13
supposed to. Why it reported that this group was South Korea's SK Telecom. Now you're saying, "Hey, how does South
00:35:19
Korea have anything to do with China?" Well, they have a long-standing or there are long-standing allegations that SK
00:35:24
has a relationship with China. The White House previously ordered Anthropic to revoke SK Telecom's access to Mythos.
00:35:30
They're kind of like the Verizon 70% market share for telecom in South Korea. According to the Washington Post,
00:35:36
Anthropic did not initially disclose it had given Mythos to SK Telecom. And this happened before all the export
00:35:43
controls quote badly damaged officials confidence in the company's ability to safeguard sensitive technology.
00:35:50
Anthropic says the White House never raised the Chinese access in the fable jailbreak conversations. There's a lot
00:35:57
of fingerpointing and perhaps nobody is closer to this except the principles and
00:36:04
you David Sax. So tell us what is going on here. Is this politics and political between anthropic in the administration?
00:36:13
Is this a misunderstanding or is this, you know, the future of what's to come as these models become
00:36:19
more powerful? >> Well, let me give you an update based on what I learned. This would have been
00:36:24
last Friday and Saturday. So, by that point, I got a readout from various folks at the White House about what
00:36:31
happened around the time that that letter was sent to Anthropic. And I then summarized what I learned in that long
00:36:39
post on X and no one told me what to say. I just listened to these various officials explain themselves. I also
00:36:47
heard from let's say some of the private companies who were involved in this and
00:36:51
all I asked was listen I think this context would be helpful to provide. They said sure you can publish it. So I
00:36:56
posted my summary of what was happening and whether you agree with the decisions
00:37:00
of those officials or not I do think that my post provides a window into exactly what they were thinking at that
00:37:07
time. And what this comes down to is a couple of things. So, first of all, like you said, Daario came to Washington a
00:37:14
few months ago, this is back in April, and basically said that he had created a cyber weapon called Mythos and he spiked
00:37:21
the cortisol level, got everyone really worried, and there was some truth to it in terms of the sense that this model
00:37:28
had advanced cyber capabilities, but he got everybody very focused on this problem. So, mission accomplished. They
00:37:36
then had this pilot program for Mythos, this trusted partners program. And as a Washington Post reported, Anthropic
00:37:44
expanded the program to something like 50 companies or more without consulting the White House. And according to the
00:37:51
Washington Post, I can't confir I don't have any firsthand knowledge of this, but I don't have any reason to to
00:37:57
question the the Washington Post's reporting on this. They did share Mythos with a company that the White House
00:38:04
believes it should not have been shared with. So think about that. They're sharing these capabilities that Daario
00:38:11
himself has said is a cyber weapon with parties that the White House and really we're talking about the national
00:38:18
security officials believe might have connections to China. >> That's SK Telecom according to these.
00:38:24
>> I'm not going to say who it was. I know that's been reported. I don't have any
00:38:26
firsthand knowledge of that. Okay. I'm just reporting what was in the Washington Post. But you have to
00:38:30
understand that that's the context. So first of all, you got anthropic effectively conducting its own foreign
00:38:36
policy here, expanding the mythos preview to groups that the White House didn't have any knowledge of. And then
00:38:43
once they found out, the White House, you know, this is really the role of what the White House wanted is, look, we
00:38:48
have classified information that you don't have. We know that there are certain groups that shouldn't be getting
00:38:54
this. and Anthropic expanded the pilot without consulting which is again sort of bewildering because the whole point
00:39:02
of what they were supposedly doing by trying to get this pre-approval regime was to consult with the government. So
00:39:08
really that was the predicate for this and apparently again this is according to the Washington Post that's when a
00:39:14
conversation started about whether a model like mythos needed to be export controlled. Okay then you have the
00:39:20
launch of fable which is basically mythos with guardrails. Again if those guardrails fail then you have a cyber
00:39:28
weapon being released to the public. And it wasn't the White House who came to the conclusion that the guardrails
00:39:34
failed. It was private companies who were testing Fable, testing those guard rails. And as has been publicly
00:39:42
reported, one of them was Anthropic's largest shareholder and cloud partner. >> And so,
00:39:50
>> well, again, I'm not going to confirm, but I think we all can read the publications. Okay.
00:39:54
>> Yeah. >> So, again, normally I wouldn't mention the names at all, but this is all widely
00:39:58
reported. Okay. In any event, they I think tried to convey their findings to Anthropic. I
00:40:06
think there was some sort of breakdown in communication. I don't really understand, but they felt the need to
00:40:11
escalate it to the White House and it's almost like a whistleblower. Okay. U because they have no reason to lie about
00:40:18
this. I mean, again, they are anthropic. >> Well, they have reason to. >> Yeah. I mean, they're partners, so
00:40:23
that's even reason to support Anthropic. Obviously, Sachs, they would have told Anthropic first. But the fact that Andy
00:40:30
Jasse got involved in this at all means somebody on the team must have said, "Hey, on the security team at Amazon,
00:40:37
who has to host these models said, "Hey, this is something that could be a liability for us, Amazon, and could be a
00:40:43
national security threat." That's why Andy Jasse made that call because somebody put that into a slack room
00:40:49
somewhere or documented it. >> They don't do things like that based on a Slack room. Okay. They had somebody in
00:40:55
the security team reported it, right? >> Amazon. Amazon is part of Mythos preview
00:41:00
and they are also testing Fable. Remember, they've got the biggest cloud to protect. We're talking about AWS.
00:41:06
They've got teams banging on this and making sure the guardrails are safe. And as has been publicly reported, they came
00:41:13
to the conclusion that there was a jailbreak and that this was serious security problem. So, they then escalate
00:41:18
to the White House. And again, and this is where my summary takes over based on me hearing firsthand from these
00:41:24
officials. They tried to call Anthropic. They tried to call Daario. And there were a number of conversations and the
00:41:31
TLDDR of it is Daario refused. Meaning refused their request to take down Fable until this jailbreak could be fixed. And
00:41:41
again, the White House was really just, I think, bewildered and confused by that
00:41:45
because, again, it's so off-brand for Anthropic. They claim to be the AI safety company. And yet, here the White
00:41:53
House is reacting to credible information about a major security threat from Anthropic's own partner. And
00:42:00
instead of basically saying, "Yes, we'll react on this right away," they get the
00:42:04
Heisman. I mean, just imagine this call. Apparently, again, reportedly the Treasury Secretary of the United States
00:42:09
call Daario personally. I mean, why wouldn't this be a 5-minute call? Why wouldn't Dario just say, "Yes, sir. We
00:42:15
take security more seriously than anybody else. We'll fix this problem. >> Thank you for taking the time to call us
00:42:21
out of your busy day. We're going to handle it right now." Click. And instead of doing that, you know what the
00:42:27
administration heard, and I'm not saying maybe Daario didn't mean to communicate
00:42:30
this, but he sort of pedantically argued that this jailbreak wasn't really a serious issue. And we know that to be
00:42:38
true because you don't have to take the administration's word for it. Daario then published a blog post that
00:42:43
basically conveyed the idea that, well, not all jailbreaks are that bad. And trying to differentiate between good
00:42:49
jailbreaks and bad jailbreaks, >> minor ones, major ones, >> minor ones, major ones, whatever. You
00:42:54
know, again, very off-brand for them. I didn't know until now that that was the case. Remember, this is all downstream
00:43:00
of the fact that Daario primed all of these officials to view Mythos as a cyber weapon and to view therefore Fable
00:43:08
as a cyber weapon if the guard rails failed. And they already had problems with the Mythos preview being
00:43:15
overextended to parties that they didn't approve of. So, look, I think maybe there's room in here to give Daario some
00:43:22
grace. Maybe he didn't interpret this correctly, what have you, but this was the way that the administration
00:43:28
perceived the situation that they were in as of whatever that date was a week ago, last Thursday, and they reacted by
00:43:36
sending the export control letter because they wanted Fable to come down until the guardrails were put in place.
00:43:43
Now, we're in a situation where Anthropic is negotiating with the government to try and fix the situation.
00:43:51
Look, once you're in one of these situations, it's always harder to extricate yourself than to avoid getting
00:43:57
in them in the first place because the trust is broken. The trust is now gone. And look, I hope this does get resolved
00:44:04
as quickly as possible because I don't view what the administration did as a policymaking exercise. Some people are
00:44:10
saying that this export control letter is now a new type of policy. Now the government has to approve every model
00:44:16
release. I don't think that was the intention. I think this was a reaction by the administration to a credible
00:44:23
report of a national security threat and they felt that they had no alternative but to react immediately with the tools
00:44:30
that they had available to themselves. So, I hope that this problem gets fixed and then we have a serious deliberative
00:44:37
policy conversation about what the right hoops should be for models that are cyber weapons
00:44:44
>> and reviewing those models which yeah, let's pause there because we're going to
00:44:47
get into model reviews and what's the best way to do that. Chamath, what's your take on this situation? Uh, in
00:44:53
terms of maybe a little bit of I don't know your handicapping of the situation with the
00:45:00
relationship with Amazon. I think that's kind of an interesting angle. Or if you
00:45:03
have a different angle you want to take. >> I think the leaders of the Frontier Labs
00:45:09
leave a lot to be desired. >> Okay. >> I think what we're seeing is a consistent pattern of evasiveness and
00:45:16
immaturity. And I think that that does a huge disservice to the entire movement of AI. Maybe to connect the
00:45:26
dots between this and what Freeberg said, I couldn't agree more with what he said. The key
00:45:33
to a vibrant life is rooted in economic mobility. And I think AI is the grand leveler. It is the thing that can enable
00:45:42
everyone to have unique amounts of economic mobility because they are unencumbered
00:45:48
to figure out what their upper bound is. And against that backdrop, which is an incredibly positive sum view of the
00:45:57
world, but I think is accurate, we have to live in this constant doomerism, hype cycle,
00:46:07
naivity. And I think it holds us back. How does it hold us back? Tactically, number one, it creates
00:46:16
mistrust. I think that Silicon Valley was already decaying in the prestige that it held in
00:46:24
American society. When I first came here in 2001, it was a place of misfits that
00:46:29
were good intention, that were doing the right thing, that didn't take themselves
00:46:32
too seriously, that in success, wasn't ostentatious, that kind of kept their head down.
00:46:39
We built important things. Then we veered away from that and we started building less important things. And now
00:46:46
we're at a point where we've potentially started to rebuild important things again. But we have this veneer of
00:46:53
negativity and mistrust that are created in large part because we just cannot get
00:46:58
our [ __ ] together. And the leaders of the Frontier Labs are public enemy number one. And so this entire episode
00:47:08
is yet another proof point that you just can't trust these guys. That's number one.
00:47:14
Number two, I think what it creates, which I think is bad, but what it creates is an
00:47:22
incredible opportunity for the hyperscalers. And the very simple opportunity is to
00:47:28
convince governments all around the world, not just America, that they should be the gatekeeper. A, you can't
00:47:34
trust these guys. B, these models are all over the place. C, let us be the ones that provisions them to the world.
00:47:43
We will wrap it in KYC. I've been now talking about KYC for a while, right? Who are these customers? Do they have
00:47:51
identification? Why are they allowed to run these models? What are they prompting? Let's keep them so that
00:47:56
there's an audit trail. All of these things are going to become issues. The Frontier Lab folks made it an issue
00:48:03
because of how they've handled all of this up until now. And what does that create now? That creates an oligopoly
00:48:10
for AI, the most powerful economically leveling instrument we've ever seen in the hands of maybe a handful of
00:48:17
hyperscalers who by the way would make an incredibly compelling argument and they would be right. And the only
00:48:24
counterfactual to it would be well trust us guys it should actually be much more
00:48:28
open and in a far more distributed environment. If can you imagine the cost and the complexity if you ask the
00:48:34
neocaler to build the same robust KYC or the same VPC infrastructure that Amazon
00:48:42
and Microsoft and Google have spent decades investing trillions of dollars in. It's an impossibility Jason. So you
00:48:49
can take all of those data centers off the map. you can take all of the neocalar market off the map.
00:48:56
All of this was preventable. So instead of a diverse, robust open ecosystem giving a tool that is the fundamental
00:49:04
unlock for humans, we are now going to debate gatekeeping and duopoly versus oligopoly.
00:49:11
They have created a total mess and it's a shame. So instead of people, just to summarize that, instead of people being
00:49:19
able to use the model they want from the provider they want, you're going to have
00:49:22
to put in your driver's license, your tax ID, your social security number, whatever it is
00:49:26
>> obvious to Amazon Web Services. >> If you have to put in your driver's license to buy fertilizer, you're sure
00:49:32
as will have to put in your driver's license to use Fable 5, which is the precursor to know how to use fertilizer
00:49:38
to make the bomb. >> Yeah, as we talked about last week. >> Sorry, last thing. Total own goal. And
00:49:43
then what does it do? We in Silicon Valley yet again look like people that have just optimized for our own selves.
00:49:51
We take ourselves seriously. We take nobody else seriously. We're not willing to play ball. It's unserious. It's
00:49:56
immature and it does not help society at large. >> Okay, Freeird, there's been some talk
00:50:02
about political tribalism here and I'll let you take this one. Anthropic, the only company that doesn't seem to show
00:50:10
up when President Trump has CEOs at the White House. backed by Reed Hoffman who funded the
00:50:17
lawfare against the White House. Jean Okaro lawsuit, this lawsuit, that lawsuit. There's major beef between the
00:50:25
left and the right and anthropics in the middle of it. Is this the White House treating Anthropic differently? And do
00:50:33
they have it out for Anthropic? And Anthropic is basically handing him the ability
00:50:38
to take these kind of actions. In other words, is this political instead of pragmatic and practical in your mind?
00:50:48
>> Well, I mean, I think that there there's no regulatory framework today. And so
00:50:55
antagonizing the government to create a regulatory framework and then feeling antagonized when they
00:51:02
regulate you just seems a little bit weird. And Anthropic seems to be the only one doing that. So I don't know if
00:51:08
it's a political motivation as much as it is like some strange set of behaviors from anthropic that that's motivating
00:51:17
this perception. Look, I think at the end of the day, we're all losers if the government is going to be picking
00:51:26
winners and losers in AI. And we're all losers if we all have to be restricted on accessing these tools. At the end of
00:51:33
the day, like I've said before, you know, an entire AI model can fit on a USB drive and you just need to have good
00:51:41
hardware to run it. And the value of that model is time bound because at some point a better model is going to come
00:51:48
around. So my point being, I think we're all losers if there's one stack that one company owns the whole thing
00:51:56
and we all have to put in our ID and the government decides who's the winner and
00:52:00
who's the loser. None of us are going to be winners in that sense. That's why I think that there's currently a natural
00:52:07
market force for two things. One is more open- source and second is a fragmentation of the AI stack. If you go
00:52:16
back to the 1960s, IBM was the predominant provider of mainframe computers. And I don't know if you guys
00:52:23
remember this or know this, but like at the time, IBM did the whole stack. They actually made the chips. Yeah. So all of
00:52:30
the um you know the I think it was solid logic technology chips that IBM created
00:52:35
were were made in house. They made the hardware, they made the operating system, they also made the software and
00:52:42
this was the case through the whole mainframe technology era that IBM was the monopoly. They had the whole thing
00:52:49
and then ultimately the government had to intervene to get them to disagregate the software layer and that's what
00:52:55
actually started the independent software vendor era which is when the software industry really started was
00:53:00
after the government said hey we shouldn't have one company that has the whole stack in computing then we get to
00:53:07
the 80s and that's when everything disagregated then IBM started buying the Intel chip for the personal computer
00:53:13
they had their own OS but ultimately Microsoft came along and made a better OS and then this entire proliferation of
00:53:19
the software stack with independent vendors took off and I think that that ultimately is what allowed this industry
00:53:25
to progress. The productivity boom that arose from both mainframe computing and desktop PCs was because of this
00:53:31
disagregation that happened. I think the same is likely going to have to happen with these AI companies. And you know,
00:53:37
I'm not sure that what we're looking at today as being kind of some igopoly of three or four businesses is really where
00:53:43
we're going to stand. I think the equivalent on the hardware side is there's going to be multiple chip
00:53:47
vendors. There's also going to be multiple clouds. There's also going to be multiple models that run on the
00:53:52
clouds. People are also going to run models locally. They're going to use different software factories. They're
00:53:56
not just going to use anthropic. They're going to use tools like Salesforce and,
00:54:00
you know, 8090 and other things. They're going to run different applications on top of it that are going to be
00:54:05
purpose-built or customuilt. So, I think there's very likely kind of a diffusion
00:54:09
that's happening right now. If it doesn't happen, it's going to be pretty nasty. But I just think the market
00:54:13
forces are so strong for a diffusion of each layer in the stack finding its way to the cheapest, the more available, the
00:54:21
more accessible partner vendors that we're very likely going to see these kind of, you know, handful of igopies
00:54:26
kind of break down a little bit. >> Yeah, I that's my that's my take on this. I'm not sure.
00:54:32
>> I'm not sure I'm not sure there's going to be a political >> capture that's going to happen. It just
00:54:36
seems very unlikely. I I'm I'm going to steal men for the for the good of the pod and also a little bit of my personal
00:54:43
belief here. I think if we were to take Anthropic's name out of their series of behaviors in how they handled the
00:54:50
release of Mythos, let's just say we put Grock in there, Open AAI or Gemini. Gemini is a good one. Google, they're
00:54:57
not totally in the uh in either camp and it's a company that's been around for a
00:55:02
long time. So Gemini comes out with a model when they test it. it's incredible at hacking and cyber warfare and they
00:55:09
say you know what this is incredible it's super powerful we're going to limit it to 50 partners and those 50 partners
00:55:15
include Microsoft etc they happen to have SK Telecom in there they make a mistake they put them in there and we
00:55:21
looked at them and we said hey holding the model for 30 days while they test it we'd say thumbs up good move and then
00:55:27
one of their partners Amazon says uh hey we were able to jailbreak this and they
00:55:33
say okay we're going to put put a couple guardrails on this when we put it out or
00:55:37
let's just say second phase after they give it to their 50 partners in control beta they said we're going to open it to
00:55:42
the public but we're going to watch every single thing you do I think David you said this is a privacy issue it's
00:55:47
pretty standard actually for when you release something like this to monitor it for the first 30 days if you don't
00:55:52
want to be have people looking at the results then don't join the beta keep using 4.8 8 don't use the newest one.
00:55:59
And so you'd say thumbs up to that as well. Hey, they're giving it only to logged in customers. And if somebody
00:56:05
does something dangerous like they try to get it to do nuclear weapons or last week when I asked it about fertilizer
00:56:12
regulation, it dropped me out of the model, right? We would give a thumbs up to that. And then if we were asked, hey,
00:56:19
by the government to take it down for anybody outside the United States and we said, you know what, we'll take it down
00:56:23
for everybody. probably give a thumbs up to that too if Gemini did it. So there is a definite backdrop of beef between
00:56:30
Anthropic and this administration. And if you look at the Reed Hoffman connection, you look at Daario who
00:56:36
refuses to participate. The people who go work at Anthropic are the people who hate Trump, who hate the Trump
00:56:41
administration, they're opting into that. If you look at OpenAI and Grock, those are the people who are largely
00:56:47
proTrump. Uh including Greg Brockman and his wife who gave 25 million to Trump. So there's a political underpinning
00:56:53
here. In fact, you may not be able to get into this. I understand that. But that's part of what's going on here. I
00:56:58
think Anthropic actually did a really good job of rolling out this model and being conservative about it. I think
00:57:05
their comms are the problem. Every time Daario talks, it's too much talking and there's too much fear-mongering. So,
00:57:11
somebody's got to fix the comms over there to your point, Chimath, because the whole industry is going to need to
00:57:17
be regulated. And I think the industry needs to regulate themselves. That's the key to this. We need to have a set of
00:57:23
tests that Google, Microsoft, Amazon all agree to Elon, hey, these are the things
00:57:29
we should test and they should self-certify each model before asking the government which doesn't understand
00:57:35
the models to certify them. The industry should have an industry certification like they do for countless other things.
00:57:41
I've talked about the MPAA and the video game industry. We should just self-certify. It's the simplest thing in
00:57:46
the world to do. and then we could release the models ourselves without the government getting involved. Anybody
00:57:52
else have any thoughts on this before we go on to our next topic? Well, let me just respond to this accusation. You're
00:57:58
saying that this is somehow politically motivated. There's just that's just not true. Look, there are anthropic aligned
00:58:04
influencers who are trying to spread the story that all of this is basically a beef between me and Anthropic. They're
00:58:10
trying to say that somehow I did this, which obviously is untrue. I don't have the power to do it. I'm not a day-to-day
00:58:15
employee of the White House and I only got the readout of this once the letter was sent. So, you know, I wasn't
00:58:22
involved. Secretary of War Pete Hexath, he wasn't involved. People are trying to
00:58:26
make it sound like this was a beef with the Department of War. Just not true. This happened as a result of the things
00:58:32
I mentioned, which is they got a report of a jailbreak. Daario had the chance to
00:58:37
fix it. He basically said no. Maybe that's not the way he thought he was communicating, but that's what the
00:58:42
administration heard. Daario double down that blog post and that had the prior history of expanding the mythos preview
00:58:50
to at least one company that the administration felt was a national security threat. That's the reason it
00:58:56
happened. It has nothing to do with the be and by the way it was the people in the administration who were most
00:59:01
sympathetic to Daario and Anthropic who wanted to reset this relationship after the department of war and then Daario
00:59:10
basically blew it. >> Yeah, that's >> with those people. So, look, I mean, you can just make stuff up if you want.
00:59:16
>> No, I'm not making it up. Just, you know, I take offense to that, Saxs, because it's your guy, Pete Hexith, who
00:59:21
is doing tweets like this. Three months ago, Department of War kicked anthropic out of the building forever. Every
00:59:26
passing day proves why this was the right move. I'm not making anything up here. There's serious beef between these
00:59:31
folks. If you're saying that like this has nothing to do with this, read the tweet.
00:59:36
>> That was after the letter was sent. Check the the time stamp. >> I get it. No, no, it's totally fine.
00:59:40
There is beef between Anthropic and the administration. To say there's not is just sill.
00:59:45
>> I didn't say there wasn't a prior history. I'm just saying that that wasn't the reason why this happened.
00:59:49
This was not a dispute between Anthropic and Department of War. This was not a dispute between Anthropic and me. We
00:59:55
were not the parties who were involved. >> I don't think you're involved in it. I I
00:59:58
didn't say that obviously, >> but neither was Department of War. Now, what Hexa's tweet reflects is he feels
01:00:04
vindicated. there's a sense of vindication that hey we had a really difficult time with these guys when we
01:00:11
did a contract negotiation people may have thought that we were the difficult ones in fact we said they were difficult
01:00:18
and communicated in a strange way and now everybody else can see it too. So I think what Hexath is saying there is
01:00:24
like hey we told you so but he did not make the decision here. This had nothing to do with it and look at the time stamp
01:00:31
of that. It was after all this whole series of events went down. If I'm a shareholder in uh Anthropic, I would
01:00:38
have told Dario to show up every time Trump had the CEOs over there and I would have told somebody in that
01:00:43
management team to drop a 1025 million check into some ballroom or some America, you know, pack uh just like
01:00:52
Greg did at Open AI. >> He really didn't need to do that. All he needed to do is that when a cabinet
01:00:58
secretary calls you and says that we have a credible national security threat report to us by one of your own most
01:01:06
trusted partners that he take it seriously. >> I mean he took it down. How more seriously can you take it than taking
01:01:11
the whole thing down? >> He didn't take it down until after they got the letter which was the whole
01:01:15
point. >> Yeah. Anyway, >> can I jump in here? >> Please jump in. Yeah. I had Claude read
01:01:21
Machines of Loving Grace and AI policy on the exponential and then I asked it to do
01:01:26
>> what is that? >> Uh those are his two long form essays. >> Darios >> Dario >> just just to be clear for the audience.
01:01:34
>> Yeah. And and I asked it to do a psychological analysis and well no I I'm not joking. I mean, I think it's
01:01:41
important, you know, and use these as insights into his personality and give me a psychological analysis of him based
01:01:48
on these as well as based on the current facts on the ground with mythos. Be truthful,
01:01:55
don't protect simply because you are an anthropic model. And then I asked it to refine through the lens of EAC movement
01:02:03
and tell me if there's any psychological leanings. Do you want me to read to you
01:02:07
movement, just so people know, is the accelerator movement to accelerate society and technology as opposed to
01:02:12
decelerate. Uh, okay. I think people understand. Yeah. Let's >> Can I read this? Okay. Two paragraphs.
01:02:16
>> Delusions of grandeur. >> No. Well, let me I don't I I'm not saying it to make fun of him. Look, he's
01:02:21
built an incredible business. The shareholders, I think, are are doing phenomenally well. I think the revenue
01:02:27
run rate of this business continues to accelerate. >> All of it's incredible. But I want to
01:02:33
understand this person. I am paying millions of dollars. And so, you know, I just want to understand.
01:02:37
>> Here we go. >> Okay. He distrusts other labs, positioning them as racing recklessly.
01:02:44
He distrusts authoritarian states because he says they will weaponize AI. He distrusts markets to distribute the
01:02:49
gains. He distrusts institutions to move fast enough and post mythos distrusts the government to wield power quote
01:02:56
transparently and fairly. That's a very long list of untrustworthy actors. The list of trustworthy ones is
01:03:01
conspicuously short and it has a suspicious tendency to resolve towards people who reason the way I do operating
01:03:07
under the rules I help design. When your safety framework requires that someone hold the keys and your analysis keeps
01:03:13
concluding the other key holders can't be trusted, you've built a machine that outputs me no matter what you feed it.
01:03:21
Eak would call that a god complex. The more precise term is epistemic exceptionalism. Not that I am superior,
01:03:27
but more my reasoning is the loadbearing one. And the failure of others to reach
01:03:32
my conclusions is evidence of their corruption or slowness, not of my error. That's the genuinely concerning pattern,
01:03:38
and it's worth naming plainly because it's the engine of the dangerous version. Once you believe your judgment
01:03:43
is the uncorruptible reference point, every conflict gets recoded. Government overreach isn't powerful actors have
01:03:51
competing interests and I lost. It becomes they failed to be transparent and fair. Losing the Pentagon fight
01:03:57
isn't a negotiation he misplayed. It's evidence the system runs on leverage instead of reason. The mythos collision
01:04:04
is we shipped a dangerous capability and a hostile state reacted predictably. It's a misunderstanding.
01:04:12
The word his company actually used. Notice that misunderstanding presumes that if everyone simply understood
01:04:18
correctly, they'd agree with him. That word choice under stress is the closest thing in the public record to the tell.
01:04:25
It's not megalamania. It's the quieter, more defensible feeling conviction that disagreement is downstream of error. I
01:04:33
thought that was really interesting. >> I mean, >> well, I think I think it's like super
01:04:36
accurate. I mean, look, there's no question that Anthropic's whole mantra, and actually Ben Thompson pointed this
01:04:43
out in one of his pieces, is that they believe that AI is super dangerous, and only they are virtuous enough to
01:04:50
basically control the negatives of it. I mean, that is basically their view on it.
01:04:55
>> They're the Jedi. They're the Jedi. They believe that they will bring balance to
01:04:59
the universe and that they are the ones who can adjudicate all of these rulings.
01:05:04
Yes, they believe they're superior to everybody else, which is why they are a magnet for talent.
01:05:08
>> Now, what I would say is I don't think that they have a particular problem with
01:05:13
the Trump administration per se. What I would say is they got spoiled by the Biden administration because they had
01:05:19
totally captured the Biden administration. And the proof of that is the fact that the leaders of the Biden
01:05:27
administration's AI policy. Not just one of them, but all of them went to go work
01:05:31
at Enthropic like the minute the Biden administration was over. I'm talking about officials who were in charge of AI
01:05:38
for the NSC. the ones who were in charge of the new AI safety institute, which was something that Anthropic basically
01:05:44
set up under the Biden administration. The person who is my predecessor effectively as AIAR, they all went to go
01:05:50
work at Anthropic. So >> there's no politics going on here except it's incredibly tribal. Okay.
01:05:56
>> No, I just think that they got used to the fact they they I mean they were incredibly organized for a startup and
01:06:03
prioritized government affairs from an early stage, maybe before any other AI company. And I think Daria went to
01:06:10
Washington very early on and convinced key officials in the Biden administration of this idea that AI was
01:06:15
extremely dangerous and needed to be controlled by the government in some sort of like merger between the
01:06:22
government and then a very small number of hand selected companies, two or three
01:06:26
of them. It was that message that Mark Andre heard which is what caused remember this when he went to go meet
01:06:32
with the government and they said don't waste your time investing in different AI companies. We're going to anoint the
01:06:37
winners. there's only going to be a couple of them. We're going to create a cartel. I think the way that Anthropic
01:06:42
describes it is that they describe competition between AI companies as a dangerous race condition. Meaning they
01:06:50
all just are racing towards AGI and therefore safety falls by the wayside and they want to centralize and control.
01:06:58
They see competition as a nefarious force. So they want centralization. They effectively want to create a cartel and
01:07:04
that is their view of AI safety. Now, you can see how they could see it in their language as being virtuous. But if
01:07:10
you see it from the point of view of what's really happening, which is they're trying to create a monopoly or
01:07:14
duopoly or cartel, it's incredibly self- serving. And that is the danger. And I do think that, you know, a fundamental
01:07:20
philosophical question is whether you think competition is a good force or a bad force. In my opinion, competition is
01:07:28
a good force. It's what protects consumers. It gives consumers choice. It also brings out the best in competitors
01:07:34
and prevents regulatory capture. >> It balances the power too, right? If you don't have one person who you're
01:07:38
dependent on. >> Yes. And it has a greater chance of leading to decentralization. I think
01:07:44
centralization is the greatest threat of AI, >> right? You don't want to become a
01:07:49
totalitarian force. So there there's a fundamental ideological difference here. But look, you have to say Daario was
01:07:55
incredibly successful at resetting the conversation with mythos. You go back to I think it was April and they had just
01:08:03
been kicked out of Department of War because of that unsuccessful contract negotiation and then all of a sudden
01:08:09
they come to Washington and declare they've invented this cyber weapon and they basically freaked everyone out and
01:08:14
they got everyone to basically go along with their idea of some sort of government approval regime and it's only
01:08:21
because I think of their own >> I don't know you could say hubris >> hubris or they misplayed it. Yeah. their
01:08:28
delusions are hubist and they misplayed it and it ended up getting kicked out under their own nent pre-approval
01:08:34
regime. >> Hey uh Freeberg, just one last question for you. If we do tip over into super
01:08:38
intelligence and it becomes like cataclysmic for humanity and we look back on this conversation, what would
01:08:45
have the right thing to do been for the government? Again, there's this important force that needs to continue
01:08:53
to maintain its strength, which is to avoid the natural instinct to control this stuff. This this happened with the
01:09:03
desktop computing revolution and the mainframe computing revolution. You guys know there were like articles published
01:09:10
in Newsweek and New York Times in 1961 that talked about the demise of the workforce because of the computer. They
01:09:18
said, "We've now automated everything. Humans are irrelevant. No one will have a job. The workforce will go away." It
01:09:25
was an existential threat in the media at that time. And what happened? The mainframe computer drove productivity.
01:09:32
Every individual that worked was able to do a hundred times more work. Then the same thing happened with the desktop
01:09:38
computer and that also enabled economic mobility and it enabled productivity gains, enabled new industries. And
01:09:44
everyone said when that happened, this is the end of the workforce. No one's going to be able to get a job anymore.
01:09:49
Everyone's getting replaced. It's over. We've got to retrain our entire workforce. In fact, the federal
01:09:54
government did this deal in the early 80s. They spent hundreds of millions of dollars in workforce training programs
01:10:00
that literally did nothing. And it was all about, oh my god, we got to get our workforce ready to transition to the
01:10:05
desktop computer industry. You know what ended up happening? People figured out.
01:10:09
>> It wasn't that difficult to turn on a Windows PC, right? >> And companies figured out how to help
01:10:14
employees navigate and transition to higher levels of productivity by taking advantage of this new technology and
01:10:20
these new tools. The same thing is going to happen here. So this whole notion of
01:10:24
AGI wipes out everything. And this is the end conclusion. There's a deep arrogance to technologists. a deep
01:10:30
arrogance and we know it. It's what drives all of us. >> But that arrogance always leads to these
01:10:35
existential conclusions. This will cure all cancer. This will solve all disease.
01:10:40
This will eradicate all jobs. None of us. And by the way, no one's immune to this arrogance. From Elon to Sam to
01:10:46
Daario to all of us. We all assume that this time is different and everything's about to change completely. And you know
01:10:51
what? It doesn't. We're all part of this long-term continuum of technological and
01:10:56
productivity improvements driven by human ingenuity which unlocks human potential and gives humans more capacity
01:11:02
to do more. And it's awesome and there's no job loss and narrative, you know, end
01:11:07
of the world and that is driving us all into an insane frenzy. Everyone needs to
01:11:11
chill the out and just let technology do what it does. >> Point these companies need to stop doom
01:11:16
trolling. They need to stop doom trolling. Do you see that New York Times oped? Look, this is all downstream. This
01:11:21
is all downstream of the fact that these AI CEOs have been scaring the daylights
01:11:26
out of the public with respect to AI. It was totally unnecessary. And by by the way, JK, I just want to say one other
01:11:32
thing, which is I am not happy about this result. I'm not happy about the fact that Anthropic is in this
01:11:39
predicament. Why? Cuz I don't like the president. You know, I hope this does not become presidential. I don't want
01:11:46
policy being made out of these types of emergencies. I trust it won't be. I hope
01:11:50
this won't become the basis for policy. I hope it's a good >> You think they should regulate
01:11:54
themselves? >> As I've been saying, >> if you go back to April, here's the thing that's really crazy. Okay, I just
01:12:00
saw that Dario did this interview with um Bloomberg, you know, Emily Chang, and he said
01:12:04
>> that by not releasing Mythos in April, the company suffered massively commercially. You know, he's acting like
01:12:11
he's doing this great and noble thing for humanity, this great sacrifice. The truth is that if he had to release
01:12:17
Mythos with no guardrails in April, he would have exposed the company to massive legal exposure because thousands
01:12:24
of companies would have gotten hacked. And it would have been very easy to say that was a foreseeable consequence of
01:12:30
releasing Mythos with no safety features, no guardrails. Look, right now, Meta is being sued. They just lost
01:12:35
a multi-million dollar verdict because a user accused them of body shaming. Meta
01:12:40
and Google are both being delused with product liability lawsuits right now. So, you're telling me that it was this
01:12:46
great sacrifice for humanity that you didn't release Mythos when it was patently unsafe back in April? Of
01:12:53
course, you had to include the safety features. Of course, you would have exposed yourself to liability that could
01:12:59
have put you out of business. That is just good business practice. That is corporate responsibility. You shouldn't
01:13:04
deserve this giant pat on the back. And you didn't need to go to Washington and freak everybody out like this. I mean,
01:13:10
you should have quietly done it. You should call it what it You could have quietly gone to the NSA and said,
01:13:14
"Listen, >> they're going to get kneecapped by the hyperscalers. It's a clear lane for them
01:13:18
to say, "Let us be your trusted partners." >> And by the way, the hyperscalers, if you
01:13:22
look at their balance sheets, the hyperscalers are out over their ski tips. They have trillions of dollars of
01:13:27
onbalance sheet and offbalance sheet exposure to AI. The best thing that they can do to underwrite all of that money
01:13:34
is to kneecap the Frontier Labs and play gatekeeper, charge a toll, take a tax. It is business 101. They're going to say
01:13:41
they're the adult supervision. >> And by the way, capture 101. Yes. That's not regulatory capture.
01:13:48
>> Yeah. >> Well, they're creating a market opportunity for themselves because these
01:13:52
companies have doom trolled their way into it. That >> they've doom trolled their way into it.
01:13:58
>> Give us a policeman. That's what I'm saying. >> I capture is when you surreptitiously in
01:14:01
the dead of night swoop into Washington and introduce some bill as a Christmas tree ornament in a Christmas tree bill.
01:14:07
This is literally the exact opposite with the same outcome. I I agree with you, Jason, which is you bumble your way
01:14:14
into getting kneecapped by everybody around you. >> No, no, it's I guess an analogy would be
01:14:19
they literally walk themselves into prison and hand the hyperscalers the keys and were like, "Please lock us up."
01:14:25
>> They closed the door. They closed the door themselves. They lock They threw the keys out the window. Yes, we're
01:14:30
locking ourselves up. All right. The Iran war might be ending after 110 days. President Trump has announced for the
01:14:38
37th time that the war has ended and that the initial agreement on June 15th will be codified. A lot of details here.
01:14:47
A lot of unknowns. Conflict began obviously on February 28th. Formal signing happens Friday, June 19th in
01:14:53
Geneva. Deal was mediated by Pakistan. Extends the ceasefire for 60 days. Includes a Lebanon ceasefire. US gets
01:15:01
the straight of Hormuz reopening which it was open before the war. Obviously, Iran commits to not developing nuclear
01:15:08
weapons. Iran agrees to destroy its stockpile of enriched uranium under IEA supervision and that they will freeze
01:15:16
its nuclear program at current levels for 60 days. Iran gets all sanctions lifted and $300 billion in
01:15:25
reconstruction. So we spent 10020 $200 billion blowing the place up and we and our partners in the Gulf are going to
01:15:32
spend 300 billion half a trillion. >> We're not we're not on the hook for a dime, Juel.
01:15:36
>> Okay. I was just saying there's some people in the Gulf who are going to be involved in this. Uh and we'll get into
01:15:40
it. Access to Iran's going to get access to their frozen assets and uh the US is
01:15:47
going to remove its forces from the region after the final deal. A lot of stuff not defined yet will be deferred.
01:15:55
Uh like Israel's sign on to this deal and uh bunch of spicy comments happening there
01:16:02
and Iran's nuclear enrichment going forward. That's not resolved. Iran's ballistic missile program that's kind of
01:16:08
important. That's also not yet resolved. So I'll stop here. Obviously there's a lot in play. Many people said the reason
01:16:16
to vote for Trump was because he would never start wars. Started a couple. What's your take on where we're at
01:16:21
today, Saxs? >> Well, I think this deal is a tremendous achievement for the president. I think
01:16:27
that it was very difficult to get. I think the Iranians are not easy to negotiate with.
01:16:31
>> You'd think, >> let's review this deal. Number one, it reopens the straight of Hormuz. That
01:16:36
means all the oil will flow and all the other vital materials that are necessary
01:16:41
for the global economy. So, that's number one. Number two, we have a commitment from them not to pursue a
01:16:46
nuclear program and to collect all the nuclear materials. Number three, there's a ceasefire of the war on all the
01:16:53
different fronts. Four, this will not cost us a dime. There is a reconstruction fund, but we're not
01:16:57
paying for it. I don't see why that's a problem for us. >> Who's paying for it? >> I guess it's something that the Iranians
01:17:02
will do in combination with the Gulf States, but it's not the US is not on the hook for that money. We're not
01:17:07
paying a dime. And then lastly, this could lead to a reproach mall with Iran, which I think could be a good thing
01:17:12
because I don't think we need to be at war with that country forever. And look, what is the alternative to this deal?
01:17:19
I'm seeing a lot of people, it's easy to take pot shots and criticize the deal, but what is the alternative to this? I'm
01:17:25
hearing neocons who basically want us to put ground troops in and try and effectuate a regime change in Iran. This
01:17:34
is what I'm hearing. I heard John Pador say this. I'm hearing other neocons say this. I mean, are you serious? Are we
01:17:39
really going to escalate this war by putting ground troops in? Who exactly do you want to go fight? What I heard John
01:17:44
Pador say is, "Well, we have a volunteer army, so they signed up for this." No, they didn't. They signed up to protect
01:17:51
America, not to go charging into Iran, which is basically a mountain fortress. I've heard estimates it would take over
01:17:57
a million troops, and even then it might not be successful. We send half a million to Iraq, and Iran is three times
01:18:04
bigger as a country, and it's a mountain fortress. So, that would be a suicide mission. That would be insane. Nobody
01:18:11
wants that. I'm not sending my kids to fight that war. You don't want to send your kids to fight that war. If John
01:18:17
Pador and the neocons want to do it, let them send their kids and their family. If Raza Palavi wants to go to Beverly
01:18:24
Hills and muster an army from his legion of supporters, let him try and do that.
01:18:28
I don't think they will sign up for it. I think they're living too well in Beverly Hills. Okay? Nobody wants to
01:18:33
fight that war. That is the alternative here. Okay? So, if we're not going to send in ground troops and we're not
01:18:40
going to continue the bombing cuz what's the point? We already hit every We already flattened every military target
01:18:45
above ground in that country. So what is the point of continued bombing? Then we might as well hold Hold on. If
01:18:51
my point is if we're not going to send in ground troops because it makes no sense, we're not going to continue the
01:18:56
bombing because it makes no sense. Then we might as well try what's behind door number three, which is a deal here that
01:19:03
will try to create a peace. Remember, we're only at theou stage of this. But let's give peace a chance here. I don't
01:19:09
understand these people who just want this war to go on forever. Haven't we tried that before? The forever wars of
01:19:14
Iraq and Afghanistan. We're really going to sign up for another one of those. I don't think so. So, look, it's easy for
01:19:21
people to take pot shots at the president here, but I think this is by far the best of all the alternatives.
01:19:27
>> Sax, the long-term issue has been the enrichment of uranium to the point that
01:19:32
it can be used as a nuclear weapon. Is is it part of the deal that all that enriched uranium that we do know there's
01:19:38
a stockpile of gets removed from the country? Because if that goes, I personally feel very good about let the
01:19:45
citizens deal with what they have to deal with. >> That's what they've said. This this is
01:19:48
part of theou. They will not only agree not to pursue a nuclear weapon. They will give up their nuclear material.
01:19:54
This >> Yeah, that's a big deal. If all that enriched uranium comes out of the country, I think it's a very big deal
01:19:59
because even if they restarted the program, even if they resourced the equipment, rebuilt the intelligence to
01:20:05
do it, etc., etc., it's going to take years to a decade to 15 years plus to build enough enriched uranium to build a
01:20:13
nuclear weapon. That would kind of be the natural setback, if you will, that provides some defense for the conditions
01:20:20
that we really care about. I didn't realize that was in the deal. I thought the deal was just that they would make a
01:20:24
quote commitment to stopping a program. But if all that enriched uranium is coming out, that's a really big deal.
01:20:29
>> Well, they still have to define it. You know, again, this is at theouou stage is
01:20:32
at the level of highle principles. They have to define exactly how that program is going to work. But what they get in
01:20:37
exchange is relief from the sanctions and they get a more normalized relationship with the US.
01:20:43
>> Yeah. Yeah. >> There's an incentive there for them, you know, if they're willing to basically
01:20:48
give that up. >> You have any uh take care or you want to check in or no? I think the market's
01:20:52
going to the moon. The market's going to the moon. Uh I'll just add I'm glad if this uh gets consummated and it was a
01:21:00
huge blunder for Trump to do this and obviously he's trying to get out of it. Should have never done it, but here we
01:21:06
are and I hope it resolves and I hope the people of Iran are free eventually. Do you think it's worth it, Jal, to have
01:21:11
gone through what we went through over the last couple of months if all of the Iranian enriched uranium is gone, their
01:21:17
missiles are are depleted and they have no capacity to enrich uranium again? Do you think just just looking back like if
01:21:22
you just put this all together summarily and said, "Hey, like there was this big
01:21:26
war and this stuff that happened and all the loss of life and like suddenly this
01:21:31
this real risk of nuclear from the beginning of this we don't have complete information. So, you know, for venture
01:21:37
capitalists, capital allocators, entrepreneurs can speculate all they want, but we don't see what Trump sees,
01:21:42
right? So, I you have to be humble enough to know, we don't know what information he had in all of this, but
01:21:47
the trimming of the grass, the the hedging, you know, of the garden approach that Israel had been taking all
01:21:52
this time, that was the right approach. Isolating dictators, waiting them out is
01:21:56
always the better approach than starting full-scale wars with them because you don't know what could happen in an
01:22:01
escalation. So, simply not worth the risk. much better to just send the air troops in and clean it up and and we did
01:22:09
not need to, you know, go collect this uh you know material obviously because we have these bunker busters and we can
01:22:16
just slam it every x number of months and that would have been a much better approach just like we've contained North
01:22:22
Korea for all this time and you know we contain other dictators with weapons. >> North Korea has
01:22:29
>> What are you talking about? North Korea has a nuke. No, no, but we've contained
01:22:32
them. And we actually did have this discussion with Graham Allison about, hey, why didn't we contain that one when
01:22:39
we had a chance, that was a mistake by other presidencies to to allow them to get this far. And then once they have
01:22:45
it, it's really hard. And in this case, it was working very well. Every 18 months, we bomb the facilities. It was
01:22:51
fine. We didn't need to start a full-scale war. And uh we're probably going to just wind up where we were at
01:22:56
the start of all this. But I hope that at some point the people of Iran are free. that that's my, you know, true
01:23:01
hope. But people have to we we can't enforce democracy in the Middle East. We've learned that over and over and
01:23:07
over again. The people have to take, you know, they have to lead their own revolution. We can't facilitate it. All
01:23:13
right, listen. Another amazing episode of the All-In podcast for your Sultan of science, the dictator, and the Rainman.
01:23:23
Yeah, David Saxs. I am the world's greatest moderator, and we'll see you next time. Byebye, you boys. Bye-bye.
01:23:31
>> We'll let your winners ride. >> Rainman David. >> And it said, >> "We open source it to the fans and
01:23:40
they've just gone crazy with it." >> Love you, Queen of >> Besties. That is my dog taking your driveways.
01:23:59
Oh man, my appetiter will meet. >> We should all just get a room and just have one big huge orgy cuz they're all
01:24:05
useless. It's like this like sexual tension that we just need to release somehow.
01:24:11
>> Wet your feet your feet. >> That's going to be good. We need to get our >> I'm going all in.