00:00:00
I'm so [ __ ] tired I've slept six hours in three and a half days six hours so wait wait I went to the World Series
00:00:07
of Poker with helmets so you spent no no first of all I flew public took Southwest what yeah
00:00:15
cost me 49. yeah cause I got a ticket for 49 bucks it's like so [ __ ] incredible did you sit in seat A1 also
00:00:21
known as Jake owl's Reserve seat it has my name on it Moe's in the front row yeah it's great like Southwest has these
00:00:28
numbers first class on Southwest no no no no premium plus he was in the front row no there's like these signs that
00:00:37
that like have a number that attaches to your ticket and then you stand in that line and then you go on in this orderly
00:00:42
way and so I was I had like A5 or something so I was like the fifth person on and then I sat in the front and I put
00:00:49
my bags up top yeah you carried your backs yeah an hour later I was in Vegas it was so easy Southwest is phenomenal
00:00:56
and then I flew back anyways and after after losing as much money as I did it felt good to fly for 49 so I gotta be
00:01:02
honest with you well austerity measures you can sleep better at night with austerity measures and did you go to the
00:01:08
all-you-can-eat buffets ticket to go as well no I'd never do that you never know
00:01:13
[Music] Rain Man David said we open source it to the fans and they've just gone crazy
00:01:26
[Music] why did you fly Southwest why did I Fly Southwest well the planes in Europe with
00:01:34
Nat that's number one and then two I just wanted some flexibility to get in and out depending on when I busted these
00:01:40
tournaments so let me tell you about these tournaments the 100K is literally like a murderer's
00:01:46
row of like every great poker Pro so it was like 96 of us or something I got to be honest with you it was so much fun
00:01:57
so much fun why how so you know that we play 40 minute levels and you have to really get the chips moving which means
00:02:05
that there's only so much like you know Game Theory optimal poker you can play and at some point you just gotta gamble
00:02:11
it up and you gotta take your shots and you have to be willing to Bluff and you know you have to bet for thin Equity
00:02:16
it's so much fun and then you see some of these guys that just lose their minds anyways it was it was really really a
00:02:22
lot of fun I finished in the middle of the pack like 40 second or something so that was brutal but then the thing that
00:02:28
I'm the most proud of is and I went from that and I hopped in the 3K six six-handed right afterwards and there
00:02:34
was like 1250 people in that and I got to 81st and whoa the problem was I just couldn't get anything going I couldn't
00:02:41
get any real car like you need some card distribution like you have to at some point yes make some hands you can't just
00:02:47
you know I could Bluff my way to 81st but I needed hands to really to really really have a chance to chip up and run
00:02:54
it then I played in the Raz which is seven card stock low there's 126 people now when I finished
00:03:02
in the middle of the pack there and then this 10K Bounty there's about 600 people
00:03:06
and I finished like 150. those are all respectable I mean I know play tournaments I have no idea how to play
00:03:12
tournament to be honest I know how to play poker I know how to play cash games but tournaments are very different so I
00:03:16
feel like I was very ill prepared but I had so much fun and you know the crazy thing is when you're playing for 12
00:03:22
hours a day you are focused for 12 hours the thing that I forgot is that you end
00:03:28
up I ended up losing like two and a half pounds oh wow if your brain is going going
00:03:36
biggest [ __ ] thing and I was I was mentally devastated at the end of each night you're just lying in bed eyes
00:03:42
awake yep and then you can't sleep and so then you know you go and you play craps and bakra
00:03:47
break the casino for a couple hundred times a night there and then we'll go back to bed that's great sounds like a
00:03:52
great week the good news is uh as Phil was live blogging for you on your behalf from uh over your
00:03:59
shoulder by the way the other thing was I brought my phone but I don't have anything on my phone like I don't have
00:04:04
Twitter I don't have any of that stuff so I was just totally in the zone it felt so great to not be connected to
00:04:10
social flow experience it's a flow experience when you can turn it very often just be in the moment
00:04:14
congratulations on the on the you know coming in the 10 of the field and the 3 000 or eight percent of the field that's
00:04:20
incredible dude if I really practice at these tournaments I think I would Bank a
00:04:24
couple but I just don't have the time the Paradox there is that you did best in the largest field if you can do this
00:04:29
for three or four years and you go into those Razz Fields when it's 100 or those
00:04:33
25k 100ks when it's 100 200 people in the 100K there's 90 95 96 people like you really do have about a one percent
00:04:42
shot of winning the thing which is pretty incredible yeah Raz too Raz is always a hundred I love tournament poker
00:04:48
that was my that was my game back in the day that's because it's because you're afraid to lose money so it's perfect for
00:04:53
you put up a small amount of money and you can play for many hours you're probably in your mind you're probably
00:04:58
dividing the number of hours by your buy-in so that you can think about what your hourly cost is I actually like
00:05:03
tournament poker because when you lose you lose like you can't just yeah rebound basically and then there's a
00:05:09
broader macro strategy you start to play the chips against the other players because you know how everyone else is
00:05:14
playing based on how many chips they have in front of them it's a great point this theory of ICM which is like
00:05:19
independent ship model is exactly what you just said the craziest thing Freeburg happens right at the money
00:05:23
bubble these guys start I've never seen this before they Ultra tank ultrade oh yeah they go in the tank for two
00:05:31
minutes and then they fold so obnoxious when I used to play tournament poker I'd
00:05:35
sit I'd fold Ace King suited you'd fold pocket Queens you'd fold everything if you're on the Bubble Level of getting
00:05:41
into the money or you're on the bubble or getting to the final table it just doesn't matter because if there's three
00:05:46
guys with you that have smaller chip Stacks let them get blinded off and now you're in the money or now you're on the
00:05:51
final table and then you'll play poker it's like go get up go have some dinner I'm back in an hour don't even look at
00:05:56
your cards if you can Cruise your way there it's a totally different kind of game totally different there's a guy
00:06:02
that was tanking he's a really lovely guy a British guy I offered him the Min cash just just not tank I was like
00:06:09
please stop taking for four minutes and folding around I'll just needed his action I had a guy do this in a
00:06:15
tournament and I timed it with the rest of the table I took out my phone I timed
00:06:19
it and I said whatever number of seconds you do I'm doubling and I just did that it was so obnoxious
00:06:27
that the entire table like the guy finally stopped well in the in the 100K we actually had a better setup which is
00:06:32
that we had these iPads on the table and everybody gets a 30 second shot clock so
00:06:37
you can't really [ __ ] around but then in these big field events they're not going
00:06:41
to have iPads on 100 tables obviously yes and so instead people just tank forever and
00:06:47
then you have to call the floor and you have to call time on these folks the funniest thing though was like the last
00:06:52
tournament I bought in for was a 10K secret Bounty which means that on day two when you knock somebody out you
00:06:58
actually everybody stops the action you go up on stage and you pull like out of it's like treasure hunting some of these
00:07:04
bounties can be like a million bucks and obviously there's a lot of people there
00:07:09
that kind of recognize me and when they saw me in the 10K secret bounty there was like a movement it was so funny they
00:07:15
were like if you win the secret Bounty and you win the million we're gonna revolt and burn the Paris Paris
00:07:25
and I and I thought you know it's true it'd be patently unfair if I was the one that won that million dollar secret
00:07:29
value how many selfies did you take on Southwest that's the question everybody wants to know how many people recognize
00:07:35
you on Southwest and what was the shame that you felt that's great I'm Gonna Fly
00:07:40
I'm Gonna Fly Southwest to Vegas all the time now it's [ __ ] great it I literally was honestly to get from my
00:07:45
house to the gate where you stand to get into the plane it was like clustered maybe 15 minutes more than just driving
00:07:51
on the tarmac like it was a nothing Burger check out it's amazing what a down Market could do to people
00:07:57
you know what this is what is it Brad this is the victory of the age of fitness Southwest you were in the first the
00:08:09
first 30 minutes you were the front row Southwest all right listen there's a big
00:08:12
docket today we've got a lot on the plate David sacks is busy in a Star Chamber right now selecting the next
00:08:18
president of the United States he's picking a VP in the cabinet for whoever's gonna win so he couldn't make
00:08:23
it today so we brought the fifth bestie Brad gerstner back and great timing because the FED decided to pause rate
00:08:29
hikes in just yesterday I guess and this would have been the 11th consecutive rate hike is that about right that's
00:08:38
right and they anticipated two more 25 bases hikes before the end of the year so here's just the um fed
00:08:46
funds effective rate so you can all can see it here over time and there was also
00:08:51
some big news this week a couple of 20 23 IPO candidates started to be floated obviously we've
00:08:59
been hearing about Reddit and tripe for a while but arm confidentially filed for an IPO back in
00:09:04
April and they're seeking to raise between 8 and 10 billion later this year and that would be uh a pretty big deal
00:09:10
for SoftBank which owns The Firm and that could I guess save SoftBank which has had a just a brutal
00:09:19
run with the two different opportunities save softbanks the arm deal is being done is what's the
00:09:26
valuation that's being done at SoftBank acquired on for 32 billion in 2016. they
00:09:31
don't know the valuation right now they haven't put that out there yet I mean they were originally looking for
00:09:35
anywhere from 30 to 70 but I mean Brad where do you think that comes out I have no idea I think that
00:09:41
you know they're shopping to get these anchor tenants into arm if the IPO Market was super hot and this
00:09:49
was really easy to get done this would have been done you know so I think you know they're tiptoeing now because they
00:09:55
need to get it into the public market but you know I I think that anybody who does an IPO today okay is going to
00:10:05
demand a you know a rate of return into that offering that is a significant margin of safety
00:10:14
relative to all deals that were done in 20 and 21. and what that means is on the road show investment Banks go and
00:10:22
they try to drum up demand they want to have anchors in the IPO book they call firms like ours they call Strategic
00:10:28
investors they want to size up what that is and you know they give you their expectation of fair value or where they
00:10:36
think the IPO will trade to of course you meet with management you ascertain and develop your own
00:10:42
expectations of fair value what I'm saying is maybe in the peak you know in 20 and 21 people were
00:10:49
getting thinner and thinner in terms of the margin of safety they demand I my expectations whether it's arm whether
00:10:56
it's data bricks or other companies that are starting to queue up and these are fantastic companies right make no
00:11:01
mistake about it Nvidia tried to buy arm and you know databricks is doing over a
00:11:06
billion in Revenue growing extraordinarily fast led by an incredible team but in order to get into
00:11:12
the public markets they have to you know step in with a bigger discount than they
00:11:16
would of you know previous correction and uh just to put some numbers on it arm had agreed to be acquired by Nvidia
00:11:24
for 40 billion before the talks fell through that was due to regulatory scrutiny Bloomberg says arm is aiming
00:11:29
for evaluation of 70 billion obviously there's no confirmation about that that's just the news hopefully
00:11:34
intelligently speculating about it what exactly would you be buying for 70 billion dollars I thought they missed it
00:11:40
yeah arm had a window where they had to make some really important product decisions to be able to actually have
00:11:47
reference designs that actually made sense Beyond just simple mobile processors and CPUs and they don't have
00:11:53
any of that so they have a good Cash Cow business it's probably worth 25 billion
00:11:57
they paid 30 some odd 32. yeah they could have gotten it out for 40 something but it's a mid-20s billion
00:12:04
dollar company no more and if you're in if if you buy it at the 20s you're buying a cash flow yielding
00:12:10
asset and the good luck to all the players I guess is what I would say clearly it's a function of soft Bank
00:12:16
seeking liquidity right I mean they uh they've had this position for how many years now
00:12:24
four years no more I think this was six maybe six years yeah when did they buy it was it 2016 I think it was longer
00:12:31
yeah 2016. they bought it so this has been and in the physical Center ending march the vision fund alone took a 32
00:12:38
billion dollar write down obviously SoftBank has a big chunk of the vision fund but this is not in
00:12:45
division and it's not in the vision fund exactly yeah but it's clearly uh liquidity
00:12:53
driver for them I don't think that this is you know first of all Jason I don't think the point about SoftBank needs
00:12:58
saving is necessarily true it's not a company that needs saving but they've certainly taken some hits well
00:13:03
they could use a win this is what my point yeah yeah they could use a win but the last two uh quarterly calls you know
00:13:12
was pretty repentant and humble right in fact he used that exact language we talked about it here so there's a big
00:13:19
liquidity need at some point for the business so they can get this thing out and get liquid on it
00:13:25
it would certainly support the balance sheet more than anything you know the the market is on a tear this year Brad
00:13:30
is there now that everybody's buying back into tech stocks I guess two questions why is everybody suddenly
00:13:37
buying into tech stocks when people think there's going to be a recession and consumers have run out of money and
00:13:48
yeah what what's the thinking here of why so much money has gone to Tech and this incredible rally it's been great to
00:13:54
watch but uh people seem to be perplexed by the rally and then the FED even though they didn't do a rate hike seem
00:14:01
to put cold water on and say Hey listen don't get ahead of yourselves we're gonna probably do rate hikes later in
00:14:05
the year we all have short memories you know Tech had a devastating year in 2022 so this is a bit of a reversion to
00:14:13
the mean right if you remember the chart we you know we showed a lot on this pod
00:14:16
last year at the at the end of starting at the end of 2021 was that we were trading at you know multiples that were
00:14:25
you know 50 to 70 percent above their 10-year average um and at the trough we were trading
00:14:31
about 30 to 40 below the 10-year average right so the market corrected it overshoots on the upside because rates
00:14:37
went to zero and by the end of 2022 when you had Larry Summers and others who were going out and saying we don't know
00:14:44
what the upper bound of inflation and rates is that's really scary to the markets and so you had this overshoot to
00:14:51
the downside we're still trading below the 10-year average for internet and software companies based upon our
00:14:58
numbers and so when you look at this as we said at the end of last year the framework changed early in this year all
00:15:06
of 22 was about two things is inflation going higher and our rates going higher and those things are debilitating for
00:15:13
growth assets and growth multiples by the beginning of this year we started to have confidence that inflation had
00:15:21
peaked which meant that rates were largely in kind of you know spitting distance of their final destination and
00:15:29
the framework shift to economy are we going to have a hard Landing now remember at the start of the Year Mike
00:15:35
Wilson from Morgan Stanley who made give him credit made the call in 2022 he said
00:15:40
22 was going to be awful he was right but he stayed in that bearish position at the beginning of 2021 said the
00:15:48
economy is going to hit the skids in q1 and that we're going to revisit 3 000 or
00:15:53
3200 on the S P instead we're sitting at 4 300. so he was tragically wrong at the
00:16:00
beginning of this year because again he was fighting I think the last battle that he that was one as opposed to
00:16:07
looking ahead and saying this is no longer about rates and inflation so the NASDAQ has moved 30 percent to start
00:16:13
this year you know the FED said yesterday um we're hitting pause um you know the quote uh from chairman
00:16:20
Powell that has everybody a little bit perplexed because on the one hand he says we're data dependent on the other
00:16:26
hand he said we're likely to have more rate hikes right and the rates are going to stay high for a couple years well if
00:16:35
we're dated you can't have it both ways if we're data dependent we have a hard Landing like Stan drucken Miller thinks
00:16:41
we're going to have in Q4 this year then rates are going to get caught but the market seems to like this and
00:16:48
let's talk about where we are the 10 years at about 3 7 the s p is basically flat
00:16:55
in terms of where it was and where it was before and where it was after the rate hike announcement the economy
00:17:02
appears to be reasonably good 80 percent of earnings in q1b the guides were okay
00:17:08
Stan druckenmiller said I shifted you know he pulled forward when he thought we were going to have a hard Landing
00:17:15
based upon the bank crisis which now feels like it's a distant memory for many and he's now calling for
00:17:22
potentially a hard Landing in Q4 so the FED just came out and said no we're not going to have a hard Landing in Q4 we
00:17:28
think we're going to have one percent growth they think that inflation to end the
00:17:33
year is going to be at 3.2 percent versus the 3.7 percent Goldman consensus what I would say is you know we've moved
00:17:41
but we're still below the 10-year average but you have to start paying attention now to individual stocks that
00:17:48
have likely gotten ahead of themselves or where they've taken that's an example of that a lot of the return
00:17:54
Facebook no Microsoft you know I think a lot of the AI related stocks are at or within 10 of our end-of-year price
00:18:04
Target and when you when you see that take something like Nvidia if I'm playing at
00:18:10
home or I'm a you know a professional investor I may say oh I'm going to go sell some long dated calls to buy a
00:18:16
little protection to the downside I don't think there's any problems with Nvidia I think they're going to continue
00:18:21
to perform I think they're beat their numbers for the balance of the year but you know remember at the start of
00:18:27
the Year people thought they were going to miss their numbers for data center people thought data center revenues this
00:18:33
year were going to be negative and they just revised their guide from 7 billion in Q2 to 11 billion in Q2 so they've
00:18:42
absolutely blistered their numbers and the Stock's gone from 125 dollars you know to over 400 so when you have
00:18:51
those parabolic moves just like we did with rates last year I think it's wise to say it's a fantastic company we want
00:18:57
to be involved it's going to continue to be one of our larger positions but if I
00:19:01
can lock in 20 yield by selling calls six months out I think that's a reasonable risk reward
00:19:09
so you know I think that's where we are and now now the question really becomes and it's unknown and unknowable
00:19:16
right are we going to have a soft Landing a medium Landing a hard landing and Q4 and rolling into next year and I
00:19:22
would say as an investor I'm very data dependent you know we're talking to companies what data point should we all
00:19:27
be looking at at this point you think jobs unemployment just these stocks in their multiples and how are you looking
00:19:35
at it as a capital allocator to month still on the sidelines what if I said like a broken record rates are going to
00:19:41
be higher than you want and they're going to be around for longer than you like and now Powell is basically telling you
00:19:47
the same thing so we're almost at the end of I think the bottoming though I don't agree with drucken Miller I
00:19:59
think he's wrong on which part that doesn't be a hard Landing in Q4 yeah yeah and the reason there's not going to
00:20:04
be a hard Landing is you just saw China today basically say we're going to start
00:20:07
to rip in trillions of dollars they're going to stimulate the economy you can't have a hard Landing when China's
00:20:12
printing trillions of dollars not possible so I think that what Powell was forecasting is that if China starts to
00:20:19
basically turn on the money printer and go through a huge Spate of quantitative easing
00:20:26
it's going to just inflate everything because they're just such a critical artery to the world economy and so you
00:20:33
just have to get prepared for rates just being sticky and inflation being sticky
00:20:38
and I think that that's probably the most reasonable base case for the rest of the decade rest of the Decades seven
00:20:44
more years yeah yeah and so in that environment the problem is that now you have the
00:20:51
seven or eight most valuable tech stocks priced to Perfection yet again if you look at their Enterprise Value
00:20:58
over their net income these things are trading at astronomical yields that are less than half of the two-year note
00:21:06
and now approaching sometimes less than half of the 10-year note government bonds that makes no sense
00:21:14
and if you subtract out those seven or eight biggest companies in the S P 500 the s p
00:21:20
has not been a great asset so the I think the equal weighted index Brad you probably know the exact number
00:21:27
the equal weighted index is just [ __ ] so what does all this mean I think it means that people are psychologically
00:21:34
exhausted with having lost money they are psychologically wanting to Will the Market up they want to
00:21:39
psychologically believe whatever will allow them to influence rates getting cut but I think the most reasonable bear
00:21:50
cases rates aren't getting cut and whatever I hope you had of rates getting cut just went out the window today
00:21:54
because there is no world in which you cut rates when China is going to print a trillion dollars free bird a lot of
00:21:58
people seem to think that uh this big run up in the markets is AI related everybody's got an AI
00:22:05
angle for their company some of them super valid like Microsoft and Google other ones feels kind of speculative we
00:22:12
talked about BuzzFeed talked about having AI journalists in their stock which is looks like it's going to be
00:22:18
delisted got a quick pop do you think the AI AI actually coming to Market driving
00:22:25
efficiency driving revenue for companies is going to happen in the short to mid term or is it more like midterm to long
00:22:33
term in other words is the AI rally overheated and fake I don't know if I would assume that the
00:22:41
pricing of equities is entirely driven by AI I think there's a lot of factors including a lot of folks maybe being on
00:22:50
the sidelines for too long and needing to come and buy in at the same time but I do think that there's a radical
00:22:58
realization underway that a lot of businesses that are dependent on services that
00:23:07
might be replaced by AI don't necessarily have the longevity today those are businesses that have been
00:23:13
severely hurt by the point of view of what AI could bring to Market and bring to Industry
00:23:19
there's a lot of stuff happening on the short side on the long side I think it's
00:23:25
a distribution curve unlike how quickly different Industries will be affected in
00:23:29
a positive way by AI certainly the most obvious is demand for chips is all this infrastructure is
00:23:36
being built out so that's the first and so you know with a high discount rate which is the environment we're in today
00:23:42
you can more quickly bet on those opportunities and so you see a disproportionate bubbling evaluation in
00:23:48
multiples on businesses like that there are other businesses that are further down like Services businesses how long
00:23:57
until lawyers are able to leverage AI how long until Banks investment banks are going to be leveraging AI to create
00:24:04
new products and improve their margins there's a lot of speculation a lot of ideas but the discount rate is quite
00:24:09
high right now and that's probably a few years out to the point that the fuzziness wipes out the potential value
00:24:15
what you mean by the discount rate in this context so let's say that I think that investment banks are going to be
00:24:20
severely changed in seven to ten years that's the time Horizon I think that their business is going to improve
00:24:26
because of AI as an example or you know Factory Machinery automation right manufacture structuring businesses
00:24:33
probably 10 to 15 years so I can't really give them that much credit today and so I apply a higher discount rate
00:24:40
there but there are other industries that are certainly being affected much more quickly and you know I'm sure Brad
00:24:45
and his his team of of uh Finance Wizards probably have a board you know where they have this list of all the
00:24:52
industries they're going to be affected and what time Horizon I mean that's the way you could kind of think about this
00:24:56
and over different time Horizons you could kind of accrue some net Improvement to earnings and say okay you
00:25:02
apply a discount rate to that here's how much the stock should trade up and and you know that's one way to kind of think
00:25:07
about this I don't think it's everything everywhere all at once great drop uh great reference Brad great
00:25:13
by the way I I got to tell you I just saw that movie I have to reference it because I saw it over the weekend have
00:25:18
you seen that movie of course of course yeah what an unbelievable film I had not
00:25:23
seen that film I had very clearly postponing it incredible anyway uh what is it what movie it's uh everything
00:25:29
everywhere all at once it won best picture not the Oscars last year I don't trust the best picture awards at
00:25:37
the Oscars for a few years I've just been duped by that award like you get some really crap ass movies that are
00:25:43
like uh watch this movie and then report back let's I won't even tell you more politically correct or whatever and then
00:25:48
they get this little virtue signaling they were doing a little catch up because of Oscar so white the movement
00:25:54
to try to balance things out in fact people well that doesn't exactly reinforce trust that actually destroys
00:26:00
complete trust and reputational credibility yes they're uh virtuous and actually that was something people said
00:26:06
that everything everywhere all at once was possibly uh because it's an Asian cat I don't even know what is it what is
00:26:12
it it's a Sci-Fi Adventure surrealist kind of romp Michelle yo is in it uh she's very famous from Crouching Tiger
00:26:21
Hidden Dragon correct exactly yeah who played Short Round in Indiana Jones yep impersonation but I would get canceled
00:26:34
for doing the impersonation of him in that that guy must be like [ __ ] 70 years old no yeah no he's like he's like
00:26:41
something but it's pretty great because he also won best actor best supporting actor and
00:26:48
there were all these pictures of him with Harrison Ford and Steven Spielberg the guys that made it are like music
00:26:55
video directors you got to go see this film it's really good it's it's on a visual basis
00:27:03
watch it on Apple TV in one of your theaters tonight I ever had I go to the bathroom
00:27:18
you know it's a long flight back from Italy so I'm taking my time and I see that ASAP as sub soap that I can't
00:27:26
afford it's like a hundred peso yeah that one okay so I see that and I'm like wait a second so I look in the cabinet
00:27:32
underneath I'm like if there's two up here there's got to be six down below so I check in the galley of course there's
00:27:37
six down there I put two I boost two on my back which I'm still not through in my uh bathroom here that's about 300
00:27:45
bucks and I check out he's got a TV set up so I'm like oh I wonder what movies are on
00:27:50
here and it's Netflix he's got so much bandwidth on that freaking plane all right let's get back to work here
00:28:03
right have you seen it by the way have you seen that movie yeah it's incredible movie
00:28:08
it's not the best film of the year that was tar but I don't want to get into it with chuma
00:28:13
oh my God I tried to watch tar that movie sucks balls it was so boring and [ __ ] self-absorbed and controlled
00:28:22
that's what I like about it for anybody that has sleeping issues and otherwise needs to use a sleeping aid I would just
00:28:29
put that movie on because you know once you see Kate Blanche had blathering on and walking back and forth from her kids
00:28:35
[ __ ] school and then some crappy piano play you'll fall asleep what puts you to bed faster chamoth
00:28:43
Ambien tar or science corner or science Corner which one I actually love science
00:28:49
Corners I don't take I don't take sleep aids I've taken Ambien three times in my
00:28:54
life yeah but that was recreationally during the day it was prescribed to me because I wanted to try it I also tried
00:29:00
Lunesta once they were they're both like be careful with that stuff man you'll start tweeting weird [ __ ] be careful I
00:29:07
tried those sleeping aids four times in my life and you wake up I wake up with a
00:29:11
it has a really bad tail effect so like you wait I woke up I wake up super groggy I only get five or six hours of
00:29:17
sleep with it so anyways I uh I do take melatonin and that's really good that works that's natural and it does the
00:29:23
trick does the trick for me everybody on melatonin all of a sudden like everybody
00:29:28
I know takes melatonin are you just a natural way to ease into sleep yeah for me what I do is like I use it as part of
00:29:34
a routine where like typically around 10 like all the you know devices things get
00:29:40
silenced and do not disturb mode and I'm in a really restful place by 10 o'clock
00:29:44
and then usually by 10 15 to 10 30 I'm out like a light I just like this infrared sauna you guys
00:29:51
have infrared saunas this is like the new hotness and uh man that is incredible uh you get a heart rate goes
00:29:57
way up and then you sleep like a baby okay let's get back to AI Brad are people getting too much credit in
00:30:03
their stock prices and is the do you do contrast therapy after the infrared sauna I don't know what contrast RP is
00:30:09
what is that meaning when you do the hot then you jump into like an ice bath no I'm getting an ice bath of course next
00:30:15
for my little outdoor sauna area and I'm going to start doing that I did that with my friend Antonio friend of the pot
00:30:20
Antonio gracias he's got one of those cold plunges we jump in the cold plunge together he's got this thing at 45
00:30:25
freaking degrees he says don't try to do too much he'll have a heart attack so I go in I get 45
00:30:30
seconds in I start breathing like really heavily and I'm like I could get the hell out of here he does six minutes
00:30:39
I do four minutes three times a week what temperature what temperature 42 to 44. the research paper that everybody
00:30:48
references now I think her name is Suzanne's Soderberg or something like that she's the Swedish researcher
00:30:54
huberman did it on his podcast that Rogan did it anyways the the data is like an out like a little less than an hour
00:31:02
of heat and 11 minutes of cold per week per week was shown to be physiologically
00:31:08
optimal so I do it three times a week 20 minutes of heat followed by four minutes
00:31:13
of of cold plunge three times a week do you have like a cold plunge where you set the dial on it or is it no no I just
00:31:19
call water in no I do old school I uh I use the Mr steam in my bathroom because like after I'm done working out the last
00:31:26
thing I want to do is schlep outside find my slippers put on a robe I'm not gonna do any of that so I walk upstairs
00:31:31
I do the mistress team at like 110 degrees and then while I'm working out somebody just
00:31:38
makes an ice bath for me and ah nothing put a bunch of ice in the tub fill it with water and just jump in it so that
00:31:44
what do they do they carve like a bunch of baby seals in ice and then they just when you get pushed all the ice cubes
00:31:50
were made to look like my Chase so I have these shapes just like advice of yourself so I'm like looking at myself
00:31:56
yeah no infrared gets up to like 130 140 degrees and your heart rate will go up to 140 150 degrees in this it's a whole
00:32:04
different experience than the Mysteries I was recently on a ski trip yeah and it's a this extraordinary sauna it's
00:32:12
Wood Fired okay you told me about this so so the lead guide on this trip we go down there he gets the thing heated up
00:32:21
before we show up right and I show up with this great athlete down there and we go in the hot box because you know
00:32:27
this is the thing to do yeah and I look at the thermostat I think it's broken it feels like it's hard pegged at like
00:32:35
225 degrees Fahrenheit that's a lot you walk in you're I mean you slow cook meat
00:32:41
at 225. my lips are burning you know and this this person sitting in there is like now
00:32:48
this is the way you do it right tough guys you know do it at this temperature we're like all right so you know we sit
00:32:54
in there for like 10 10 minutes and then we go and we jump in you know in a frozen lake and about 10 minutes later
00:33:00
we're taking off we had to leave this particular place and you know people are waving goodbye and they're looking you
00:33:07
know they have to look over the sauna as they're waving goodbye and they notice that the sauna is on fire ah yeah that's
00:33:15
basically what happens when you go to 220. people are taking this a bit to the exynos it's a little crazy all right so
00:33:24
back to back to the docket here AI yeah are people getting too much credit in public markets kind of running with this
00:33:30
before it's actually ready for prime time time just to add to freeburg's point here there are a lot of people
00:33:36
talking about doing things in startups I see people actually doing things I would
00:33:39
say four out of five startups that we've invested in and the majority of them that we're being pitched on right now
00:33:45
are not only talking about AI which they were all talking about it three years ago they're actually implementing it now
00:33:50
because the tool sets are available I just had a call thank you Freeburg for putting me in touch with the Google
00:33:54
people I just did a call this past week with Google and they gave me some previews of what they're working on I
00:34:00
can't say anything about it but it's it's mind-blowing I think Google's not as Far Behind Closed AI That's your read
00:34:06
on Google now we had a little kerfuffle when I when I talked about sundar's reaction to
00:34:12
you know Ai and the concerns that others might have on folks talking about the company I mean what's your point of view
00:34:18
on Google today I don't know if you've talked about this yeah yeah no well I mean I think you know I had this
00:34:25
I had this dinner this incredible dinner actually Thursday at the pub and you know it's how I know Silicon Valley is
00:34:31
back because it was just like serendipitous we threw it together in the afternoon you had this like poor
00:34:36
extraordinary you know CEOs there and you know you had Mustafa the one of the co-founders Deep Mind there and Rich
00:34:44
Barton from expedienzo it's just just an incredible group and the 20 trillion dollar question is how does the entire
00:34:51
open architecture of the web get re-architected in the age of AI another way of ask asking the question
00:34:58
because we're all kind of playing small ball right we're all talking about oh you know our tpus but gpus you know and
00:35:04
who what Cloud's going to get accelerated that's kind of the small ball the big ball here the 20 trillion
00:35:10
dollar question that is defined the entire internet for our entire careers has been web search
00:35:17
and I will tell you that the conversation around that table there's increasing confidence that whatever
00:35:24
comes next right the top of the funnel is up for grabs and all of those dollars over a period again a five years seven
00:35:32
years is going to get redistributed and make no mistake Google is well positioned to make its claim for that
00:35:40
but its claim is going to come at the expense of search and so Google May create the best AI in the world but it's
00:35:49
going to have to fight off the cannibalization of course search and the question is in this new thing and so
00:35:55
rich Barton you know an incredible product founder right think about Expedia Zillow yes and Zillow so he's
00:36:03
founder of Expedia and founder of Zillow two vertical search engines that dominated right their particular
00:36:09
verticals and the topic of the conversation was that the new UI right the new way you interact with your
00:36:16
customers right right is not optimizing a web page it's not optimizing an application he calls it the race to
00:36:25
intimacy the race to intimacy that you have to build a conversational UI I've run that
00:36:31
race a few times and no and it's a related race okay Sprint not a marathon sometimes it's been American and the
00:36:41
penultimate question is who ends up on top yeah are you always on top this is I I run a really good middle
00:36:49
distances and then if I need to just make it you know run a Boston Marathon I can if I want but I don't know okay yeah
00:36:55
sure you can yeah but I think you know I took a poll does he think sorry does he
00:36:59
think Zillow is dead I mean he's no longer a shareholder I'm guessing I mean he's the CEO he's the chairman sorry
00:37:05
sorry not zero sorry not Zillow Expedia pardon me what does he think about Expedia and travel well you know you and
00:37:10
I had this conversation girly chimed in the cash chimed in on Twitter well you're not on Twitter but they chimed in
00:37:16
you know about the conversation from last week's pod every Vertical Search Engine and Google itself that
00:37:24
architecture is suspect right the questions just over what timeline is it suspect but the world is moving past 10
00:37:33
Blue Links information retrieval that looked like a card catalog is not where we're going you no longer need an index
00:37:40
you need someone to do the retrieval from the index for you that's the the new service extract the knowledge that's
00:37:46
what I mean it's personalized to you but I think one of the questions that's still outstanding from an architectural
00:37:51
point of view in terms of your interaction with all the data in the world is are you as a user going to have
00:37:58
a number of independent relationships with your travel search engine so your travel agent or are you going to have a
00:38:05
relationship with your doctor medical office and you're going to have a separate relationship
00:38:09
with your you know Financial advisory type service or are you going to end up seeing similar to The Challenge we have
00:38:16
in search versus Vertical Search today an aggregator of services because there's value in Cross populating the
00:38:23
data and the knowledge about you across those services so yeah sure you know it's going to be the no it's going to be
00:38:29
the former because like obviously there's value to the company because every company wants to profiteer from
00:38:36
you and monetize you in nine different ways and maximize the equity for their employees and their Founders and their
00:38:43
board and their shareholders but that's not what people want right so like for example when you go to a doctor would
00:38:48
your doctor be better off if you know she also had all of your data from I don't know pick your other service
00:38:55
providers of course maybe you could make a claim that if they had all of your personal information and they understood
00:39:01
your risk factors they could do a much better job but the reason you don't do that is you want some segregated
00:39:07
relationships a it gives you some level of privacy but mostly it gives you control in a world of AI where you can
00:39:12
be more conversational the idea that humans will want to get reduced to talking to one thing for everything
00:39:19
I think is wrong I think instead it's actually going to be hyperpragmented because the best-in-class use cases are
00:39:27
going to be the things that people want and then B it gives the user control the
00:39:32
one thing I would tell people is do not give up all of your data to one thing who's professing to be at all they are
00:39:39
going to lie to you and trick you and you're going to have a social media problem writ large all over again
00:39:45
there's another way to think about this which is the reverse of the client server model where today you as you are
00:39:51
the client you are the node on the network and you're communicating with the center of the network which is the
00:39:56
server which is the service provider and all the data sits there and you're getting data in and out of their product
00:40:02
to suit your particular objectives but the future may be that more data is aggregating and accruing about you you
00:40:09
end up becoming a server you then have the option just this speaks to kind of the architecture on the internet imagine
00:40:14
if every individual had their own IP address and that individual's IP address uh had behind it behind your ability to
00:40:22
control lots of information and lots of output about all your interactions across the different networking service
00:40:28
providers that you use that's a very smart framework I think and that object and ultimately what you would agree you
00:40:34
want to be able to rent that data to services I don't even think it's about rent is yeah as much as it is about you
00:40:40
should have the reason the reason rent well that then you have to rent it you can't give it to them because that's be
00:40:44
stupid that's right and so your goal your usage like let's say the doctor says hey can I can I get access to your
00:40:51
health data or sorry your your Apple watch activity data for the last year you then have the option to provide that
00:40:57
data to them through some permission type service that you then make available so there will be
00:41:02
interconnectivity amongst the service providers but entirely gated and controlled by the user look you're
00:41:06
seeing this up front now with Reddit when in this world the people that create the content are actually in
00:41:13
control of the data and if you try to like monetize an API without paying the people that created it or giving them
00:41:20
control they'll revolt and you're seeing it happen now Reddit lost what 90 some odd X percent of all of their content
00:41:27
because the mods were like [ __ ] you to Reddit well think of that writ large where everybody is asked hey on this
00:41:34
great service hey I'm this great service I can solve x y and z problem for you just give me all your data and then if
00:41:40
you're not asking well what do I get and they're like well you're going to get a
00:41:43
whizbank service and that's all they they say you're being tricked it's already happening I mean there's an open
00:41:48
source lawsuit against uh Microsoft's GitHub co-pilot and you have the Getty lawsuit and
00:41:55
you know it there's also a correlator for this Google tried to kill Expedia already they tried to kill Yelp and it
00:42:01
didn't work folks use both services and you know if you if you are trying to boil the ocean like chat gbt might I
00:42:08
think it's not going to work because there's going to be so much Innovation so much Community brand and all that
00:42:13
kind of stuff and these llms seem to be trending towards good enough or some kind of parody that I think your rights
00:42:20
people are just not going to give their data over wholesale I've been using the Zillow plug-in to get exact
00:42:25
and the zoa plugin sucks on chat it's getting slightly better well I guess it's the wrong model
00:42:31
this will exist on Zillow site Zillow will not let chat CPT take their business you're going to go to Zillow
00:42:38
site and you're gonna say hey show me homes that have a sauna and a nice plunge and that are four bedrooms and
00:42:44
that are you know fixer-uppers or are not fixer-uppers and have ensuite bathrooms and whatever and
00:42:49
it's just going to give you that list why would they give that business to closed AI can you take a crack just at
00:42:54
summarizing what we all just said because your your initial question was Friedberg was like what does this mean
00:43:00
for Google well we all just said that what we're certain of is there's not going to be 10 Blue Links and a
00:43:07
model of search that they have monetized in a way that has been the most prolific
00:43:11
business model in the history of capitalism right so that's a problem for them you know from a business model
00:43:18
perspective so they're going to have to reinvent their business that's going to be hard to do it's like rebuilding the
00:43:22
plane on the fly but that then if you just go to the two models that we outlined here on the one hand shama said
00:43:28
you know you're going to work with all of these agents that's exactly what Mark Zuckerberg said on Lex he's like you're
00:43:34
not going to have one super agent you're going to have you know hundreds of agents and he he thinks of what's
00:43:38
happened all of his platforms is the new open web where all of these agents will
00:43:42
live and you'll interact with them you'll interact with your Zillow agent there you'll interact with your booking
00:43:47
agent your Expedia agent there Etc on the other hand chat GPT Hyatt inflection read Hoffman and and
00:43:55
Mustafa and many others think that the benefits of general intelligence this will be the first time that that we
00:44:03
solve vertical problems horizontally right and their metaphor the compare there is we all don't have a hundred
00:44:11
personal assistance in our office you have one that gets to know you really well they get to know what you like to
00:44:17
wear how you like to travel the things you like to eat the things you like in your house how many kids you have so
00:44:23
there's real leverage in that in that horizontal knowledge that can then be applied to these different verticals I
00:44:30
think the answer lies in between your personal assistant will do a lot of the general stuff okay whether it's Pi chat
00:44:37
GPT whatever Googs comes up with Etc but I think they will subcontract the work whether they chain it out via you know
00:44:45
behind the the scene you know mechanism to other agents so for example if you're interested in
00:44:52
traveling to this undisclosed location that I'm at in in Europe right now you know my my my assistant doesn't know
00:45:00
anything about this place so she may interact with a specialist for this particular place to get you
00:45:06
that magical experience so you know I I don't think you have to pick one or the other but architecturally 20 trillion
00:45:14
dollars of value on the web is built around web pages advertising and e-commerce right and
00:45:24
sending traffic to those other places and what we're all saying unequivocally is it's moving to knowledge extraction
00:45:32
and intelligent agents and I think that's tectonics but I still think there'll be clicks I you know I
00:45:38
have been using Bard a whole bunch and they have made massive rapid progress just to give you but one example here
00:45:44
I'll share my screen it is pretty extraordinary how quickly they're figuring this out and I did this just to
00:45:50
the search while we're talking about the five best Greek restaurants uh in the Bay Area obviously came up with kokar
00:45:54
and you know other ones and then I asked it like hey what are the top items on each of these menus they started putting
00:46:01
images in and linking to Yelp and then I said hey tell me the most expensive wines and
00:46:07
it actually got that from kokari they have a chateau Margot 2009 for 1500 chamoth I don't think it's good enough
00:46:13
for you but what year is it it looks like 2009 yeah they have Screaming Eagle 2013. I don't know if that's a no-go
00:46:21
Carl in 2014. yeah but anyways okay okay good so we've got to save anyway search like four weeks ago it didn't
00:46:33
have images and it couldn't get me the items on the menus and these could all be links and these could all be paid
00:46:38
links so in these results there's nothing to stop Google from saying hey Yelp if you want we'll put your
00:46:45
information here or not up to you you choose do robots.txt except we're going to call it ai.txt you tell us what you
00:46:52
want to be included and if you want to be included we want you know it's it's a Marketplace for clicks we'll include
00:46:57
three of your images with clicks and we'll call it sponsored they are going to be able to insert ads into here that
00:47:02
are better than the current ads and that will perform at a higher level and they're going to know us this could
00:47:07
actually be the reverse of what everybody's thinking this could lead to higher cpms and higher costs per click
00:47:12
because of intent by the way I mean the the 2014 is actually I think uh underrated and it's very highly rated
00:47:20
but I think it is an excellent one all right Jason as to your point I think all of
00:47:26
that I mean that's impressive it's true you can also do it on chat GPT I'll just
00:47:30
say the number of people I interact with on a global basis who talk about chat GPT versus Bard is like ten to one today
00:47:39
now Google's not that's gonna change real fast Google's got massive distribution power let me tell you what
00:47:44
I what I also think but to your point Brad about this bro I just want to I want to respond to you Bard versus gpd4
00:47:50
that's people are not paying attention and when Google puts this on the home page yeah and starts sending five
00:47:57
percent of users to it I mean obviously it's expensive to do it people are going
00:48:01
to have their eyes jump out of their head I think Google's going to be Chachi pt4 I'm saying it right here right now I
00:48:07
think they're going to beat them because I think that they're better at indexing
00:48:10
all this information and understanding it than anybody on the planet and they have the the largest ad network if they
00:48:16
get this done in the next six months I think it's going to increase the cost per click because they're going to know
00:48:21
so much about each user continue abroad I know I'm in the minority here well uh no no I mean listen I think a lot of
00:48:28
Google's revenue comes from de facto navigation of the web they term they turn the URL into a navigation box there
00:48:34
are a bunch of ads there that you know people click on they don't even know they're clicking on ads and you know
00:48:40
they generate a lot of Revenue off of that but let's be clear Google is firing at this I just don't think it's going to
00:48:48
be as monopolistic as they are in search I think there are going to be other competitors who are going to be wealth
00:48:53
financed you're going to have access to the data um and today you have well north of 100
00:48:59
million people who are paying to you know a huge percentage of those to use chat GPT and I think this you know it's
00:49:08
the first competition but you know Friedberg knows he and I had the back and forth they reported earnings stock
00:49:14
was flat I said on CNBC that we had sold our shares we bought back some of the shares around Google I O because we do
00:49:22
think they're going to be a player we think they're going to be a beneficiary but I I would say as I sit here today
00:49:26
the distribution of potential for them is less than it was before chat GPT you know the the distribution of of upside
00:49:38
they have some competitors now who are going to be vying for this next new thing and I wonder whether or not
00:49:46
you know as they try to navigate you know you're saying they're going to take some of this traffic from search and
00:49:51
feed it into this other thing this other thing better monetize as well as search
00:49:55
or by definition that means Revenue goes down it feels like Google is so close to
00:49:59
figuring this out I mean I've been doing some barge searches how much Google do you own how much Google is not enough
00:50:05
not enough I've just been playing with the J on my jtrading.com he's thinking of adding this stuff
00:50:12
like a buy-in or two but uh let's pivot over to this Reddit thing because it's super important that
00:50:19
people understand this I'm gonna buy 17 more shares I'm gonna buy like a Harlan 2014 equivalent
00:50:26
insurance no my J training is up right now jtrading.com shout out uh to my trades I did it as for fun I'm at like
00:50:33
20 Returns versus six percent well you were kind of quiet for a while so when you're down you don't talk
00:50:39
to things I liked and I didn't want to change them do you track them and exit or what do you do I'm gonna track the
00:50:46
exits but I haven't exited any if you go to jtrading.com you can play along how can you only be up 20
00:50:54
when Facebook has doubled oh sorry 22.43 yeah but Facebook doubled off the bottom
00:51:00
the whole goal of trading jcal is to maximize your highest conviction maximize your highest conviction what'd
00:51:06
you do put a nickel to put five percent into Facebook I don't know I just I just
00:51:11
bought companies you got to put a lot of chips on the table I mean that's I think what's the
00:51:21
optical number as a day trader Brad what's the optimal number of names I should have you're not a day trader you
00:51:26
don't trade as a long Trader what's the optimal number of names I should be uh you have
00:51:33
too many um I think with your level of insight um you know on the things that you
00:51:39
really believe in there was such asymmetry in that position at the time that you bought it it was your best idea
00:51:45
you should have put at least 30 percent of of whatever you're going to allocate to this internet position that's what
00:51:51
I'll do yeah I mean it's done okay I mean listen I'm up what did I buy I bought uh 500 shares
00:51:57
and my basis is 47 I'm at 140. so it was a good trade now imagine if you could you know 10 or 20 exit yeah that's what
00:52:03
I should have done yeah all right Jason how wait hold on how much have you put into all those stocks 1.5 million I I
00:52:09
basically took I had some money in an index fund laying around and I was like let me do this 5 million I did Jay
00:52:15
trading as a blatant attempt to get a sponsor for this weekend startups so I was like oh maybe Robinhood or E-Trade
00:52:21
will sponsor this and I'll make it like a segment oh my God let me do like a segment where I trade and see if I can
00:52:27
secure the bag and it you know the markets are so crushed that nobody is spending advertising from Robinhood or
00:52:32
E-Trade or interactive brokers or Bloomberg but I also did because I wanted to become better at Public Market
00:52:38
trading to your point to last week's Prime conversation per month is under understanding when to sell and when to
00:52:44
go long when you get distributions as a VC that was really the reason I tried to
00:52:48
do it was just to try to have skin in the game you know just like learning to play PLO or you playing the Razz
00:52:53
tournament I just want it's it's very it's very easy once you get shares distributed to you immediately sell them
00:53:00
and then yeah and then hold on yeah and then re-underwrite from scratch from there
00:53:06
okay once the money is sitting in your account even if it takes a day a week a month
00:53:11
it's not like the Stock's going to rip and triple on you over the next 30 days re-underwrite it from scratch and then
00:53:18
see if you have that much conviction when you see the money in your bank account
00:53:21
um I like it I would just tell you guys the distributions you know there were a lot of firms
00:53:28
that rode you know a lot of these big names right all the way down um you know they they got public but
00:53:37
they didn't distribute much if any and it's really don't say the names but what do they rhyme with I'll I'll start
00:53:44
I'll start but yeah go ahead you go you go next you pick one not doing it um Andreessen borrow its flounders Lund
00:53:58
look at Freeburg just dropped off I don't want to be associated with this conversation all right listen we all got
00:54:05
our asses kicked except for me Uber's up 67 this year oh come on come on let me what what I was saying
00:54:13
it's just Rockets what tends to happen is things hit the bottom they bounce a little bit and people are so relieved
00:54:22
that they bounced a little bit did they immediately start Distributing because LPS are hammering them LPS are like why
00:54:30
did you not send us this you know snowflake when it was at 400 a share why did you not send us this doordash why
00:54:37
did you you know go through any name you know that you can think of but then people compound the mistake I think
00:54:44
that as soon as they get a little relief boom it's out the door and then the thing doubles on them and I just think
00:54:52
you know part of the benefit of me having to get up every day 5 a.m deal with public markets and think about long
00:54:59
or short it's what we were talking about in the fall of 2021 around the table before the poker games which is the
00:55:06
public market is tilty it doesn't feel good and that you know we stopped making Venture investments in October of 21.
00:55:14
principally because of how we felt about public markets at that point in time and
00:55:18
so I think a discipline in fact I was meeting with a managing uh partner of a very big Venture firm in Silicon Valley
00:55:24
this week they just started about a year ago or six months ago doing Public Market investing and they said it was
00:55:31
incredibly valuable to how they think about distributions and what they're doing in the Venture business that's
00:55:37
what it's been for me I have now started to learn how these things are priced and
00:55:40
I just think it's great as a learning thing for me I have to make two decisions when to distribute to my LPS
00:55:45
which I just give them the shares the second I have them and let them make the decision but then it's also personally
00:55:50
for me me do I want to hold it or do I not I like your suggestions a nice punch up shamath of looking at the cash and
00:55:55
then deciding if you want to react did you guys see this crazy thing from Calpers where they were like yeah you
00:56:00
know they were they were down like four I mean horrible Returns on the Venture side and so their decision was to Double
00:56:06
Down well they didn't have they took like a decade off from Venture the returns of
00:56:11
what they did invest in adventure were atrocious to be fair I don't know how the board has changed to Calpers but
00:56:17
Calpers brought in a new CIO an entire new team and so they can't be held liable for you know that track record I
00:56:25
did kind of see something on Twitter about I was shocked it would be very difficult to manufacture that bad a
00:56:31
track record if what I saw was accurate however I would say the team that is there now the portfolio that they're
00:56:38
putting together and doubling down where I think Venture is kind of at the bottom
00:56:43
or bottom third and oh this is the bottom you know I think bottom third I don't know bottom half you know listen
00:56:49
inventory you got to find three things you gotta find you know you don't want to invest all your money at the top so
00:56:55
you got to get the bot you know bottom third none of us can call the bottom but you know last year at the end of 22 we
00:57:01
were certainly in the bottom third evaluations then you want to be early in a major platform disrupt I think we all
00:57:08
agree we're early in a major platform disruptions probably the third of our careers
00:57:13
and then you want to back one of the best firms Best Brands in Silicon Valley like if you do like and people know who
00:57:18
those are if you do those three things you know simultaneously like he got a good shot at producing really incredible
00:57:24
vintage just to put some numbers on the Calpers thing so you can respond to its mouth America's public largest public
00:57:29
pension Calpers that's the California's manages some 444 billion in capital on behalf of California's 1.5 million state
00:57:37
school and public agency employees is leaning it to venture after years of bringing down its VC exposure to one
00:57:45
percent to a one percent Target the institution investor is now looking to increase this allocation more than
00:57:50
six-fold obviously six percent from 800 million to 5 billion the financial times reported so thoughts
00:57:57
on that Shabbat well I mean this is the moment there's a lot of venture firms that are hard up for money and so
00:58:03
they may have a shot they can get allocations now in order to get into these funds the problem that they have
00:58:08
to realize is they may be buying a bunch of toxic assets or a bunch of toxic Partners in
00:58:14
the sense that a lot of these people have been getting run over for the last three or four years we don't know again
00:58:20
we've said before most Venture investors are probably unprepared for this shock because
00:58:27
they've never lived through one there's been a lot a lot of Junior monkey mucks that were hired because they were XYZ
00:58:32
middle level exec at Rando company means nothing so I don't know I think it's smart that
00:58:40
they have I mean they have to be thoughtful first of all how is it that the Calif like literally it's like
00:58:47
I know trillions of dollars being made in your backyard and some genius was like well the thing that's creating all
00:58:54
the wealth in the world which is in our backyard where we probably have the best
00:58:57
pitch in order to get into these alien just called Doug Leone and say hey oh my God give me the listed
00:59:04
put money on those tenant call it a day oh my God that's unbelievable that's unbelievably derelict that's
00:59:10
unbelievably sloppy and I will tell you I'm sorry that's it sorry let me just finish
00:59:16
that's actually that's the best word to use when you look back on a decision like
00:59:20
that there's no numerical justification that one could have made in the 2000 teens to have made that decision except
00:59:26
that that was an emotional decision and when you're running a half a trillion dollar fund there is no room
00:59:32
for emotion you should not be allowed there should be some so I think that that shows a very hollowed out
00:59:40
and at a minimum imbecilic risk management infrastructure at Calpers that needs to get fixed so whether the
00:59:47
allocation goes up or down if I was a teacher and my money was being managed by them I'd say man these people I would
00:59:54
want to understand how they're making decisions because I don't I would want to see the investment memo that got them
01:00:01
to decide as an investment committee that one percent in the most important asset class that's in your backyard
01:00:07
that's making all the money in the world made any sense I just want to read that
01:00:10
memo and see could I agree with that um hold on then I would want to read the investment memo that says we're going to
01:00:20
change course and get back to five or six percent because if that process isn't fixed these decisions are just
01:00:25
going to be equally bad you're just going to compound bad on top of bad because again they clearly did a
01:00:31
terrible job and then on top of that they had horrible partner selection because the
01:00:37
people that they did invest in because the data is public have performed horribly
01:00:42
so what changes now all of a sudden right because if the best firms still don't want you in increasing it from 800
01:00:49
million to 5 billion just means you're going to lose 4.2 billion more than you would have otherwise at 800 million it
01:00:54
says here they made uh two bets they had bet on uh looks like light speed in the
01:01:00
last couple years Lightspeed and tpg so we'll see how those goals but I do have some data on this
01:01:09
because we've spent a lot of time talking with them and as you know Jason we were just talking you know like
01:01:13
talking to folks like mabala who I I yep California is one of the largest Sovereign wealth funds in the world
01:01:19
right this is not just a state this is bigger than most countries right this is one of the biggest economies in the
01:01:25
world I would say that what my interactions with the new team have been very impressive and I will tell you
01:01:33
they're not just looking at funds and building a new portfolio I think they are thinking about doubling down at the
01:01:39
right time and they're thinking about thematic bets against super Cycles like AI to say let's allocate this much money
01:01:47
who are the three or four deep strategic Partnerships that we can have to drive you know return on that so I I think it
01:01:54
I I think they're on their way but I I agree with you they're The Sovereign wealth fund of the most prolific state
01:02:00
in the world and they should have outsized return it's not trailing with this I just want to point out uh one
01:02:06
thing here is the power of writing shamop you decided to write your annual letter a couple years ago Brad you also
01:02:11
uh will write a letter famously in the Facebook getting fit one or the meta getting fit one the power of writings
01:02:17
and I just did this for the launch run 4. and when you write a deal memo compared to doing a deck
01:02:24
the the questions you get are so qualitatively different and the people you attract are so different it is
01:02:31
extraordinary I am advising startups across the board to write really tight deal memos because I write these we
01:02:38
write these deal memos internally when we make an investment but man is it great for clarity of thought and for the
01:02:43
person on the other side to just stop and read a thousand words or two thousand words as opposed to go through
01:02:48
some stupid performative deck it's just so such a better process maybe you could
01:02:53
you both could speak to that or Friedberg I don't know if you're you've been writing deal memos but maybe for
01:02:57
people who are listening or capital allocators and Founders I've been writing for years why and what is the
01:03:02
what is it what does it do for you yeah well it allows you to actually find people
01:03:08
who will critique things in a thoughtful intelligent way it's hard to critique Dax because you use broken English you
01:03:14
use fancy Graphics all of a sudden somebody that's very good at like graphical layout can dupe somebody else
01:03:20
and so you don't get to good outcomes because this weird group think effect sets in
01:03:26
when you look at decks so I'm not a fan of decks I I use them but they need to be a companion to some sort of long-form
01:03:33
narrative document and I just think it's more useful you get people who can really think about what they agree about
01:03:40
what they don't agree about it shows the intellect of the person writing it quite
01:03:44
honestly I just think it's a it's like a basic skill that people should have it's a
01:03:50
useful skill to teach people as well decks are very dangerous I think if you're going to make decisions I would
01:03:56
encourage you the bigger the decision a deck is insufficient it can be a companion piece but it needs to be
01:04:01
attached to long-form documents but the law firm documents don't need to be long
01:04:05
either two three four five pages but without it I think you're going to allow some
01:04:10
really bad decisions to creep into some good ones Freeburg any writing from you for deals
01:04:17
okay do you have uh he ran he doesn't want to talk about writing all right as everybody knows uh
01:04:23
Reddit is on strike right now I should say the mods who run Reddit are on strike 95 of reddits went dark they
01:04:31
basically turned off new posts or they just went private basically nobody could join nobody could see the content I
01:04:36
believe is what that me means between Monday and Wednesday and the reason they're doing this is
01:04:42
because Reddit decided it would start charging for its API so who gets impacted by using the API it turns out
01:04:49
apps we saw this at Twitter as well when Twitter started changing its pricing for
01:04:53
its API and this means that some of the really high-end Reddit apps would have to pay 20 million dollars a year for
01:05:02
access to read its data now they originally had said they were changing this pricing
01:05:07
because they were going to train AI models uh and they wanted anybody using that data I.E Google bard or chatgpt4
01:05:15
and closed AI they wanted them to pay for it and Steve Huffman was uh explained all this in a New York Times
01:05:20
profile in April you can go search for that Reddit wants to get paid for helping to teach big AI systems the
01:05:27
largest app is called Apollo uh just so you know if you're not into those Reddit
01:05:30
really came out with their app really late this was a function of the 2005 to 2015 time frame back then
01:05:39
Web 2.0 startups didn't have a lot of capital so they let other people build on their apis and build apps some of
01:05:44
those apps caught Steam and are actually better than the apps developed at least
01:05:49
for a while it was better than the Twitter app and the Reddit app so thoughts on this freeberg there's a
01:05:55
history here um is mimicked at both Facebook and Twitter both of whom had open apis that
01:06:03
provided access to third-party app developers to build tools on top of the platform by
01:06:09
accessing either user data or content off of the network and then making that available via some different product
01:06:17
function some different UI than the native tools allowed if you'll remember Facebook started to kill off its API and
01:06:24
in the process killed a number of these third-party app developers the most prominent of which was Zynga I think
01:06:30
this was around the 2012 time frame you guys know if I'm right on that I think it's right sounds right and you know we
01:06:35
saw the same thing happen in Twitter where if you guys remember in the early days a lot of users accessed tweets from
01:06:43
people that they followed through third-party apps and third-party apps all competed for the user and ultimately
01:06:50
Twitter's management team realized that having direct access to the user being able to control the UI the ux and not
01:06:57
just become a Data Network but to actually become a a service for users made a similar sort of change so you
01:07:05
know reddit's motivation around AI training is an interesting one but it does speak to this idea that these
01:07:11
social network companies social in the sense that the users themselves are creating the value they're creating the
01:07:16
content at both Facebook at Twitter and at Reddit ultimately the company loses the
01:07:24
value if that data that content gets extracted and they can't monetize it or capture the
01:07:30
value somehow and it's a lot different you know every company ultimately wants to become a platform company meaning
01:07:36
that they can offer multiple products or services to users that sit on top of some you know Network they've created
01:07:44
and in the process create a network effect because more products more apps creates more users more users you know
01:07:50
it gets more more uh more apps and so on that works well in some contexts like an
01:07:56
Apple App Store context but in the context where there is a network unto itself like Facebook Twitter and Reddit
01:08:03
meaning that there is already a user Network that is generating value in the form of the content that's being
01:08:09
produced and consumed you don't necessarily gain anything by then building an app Network on top of it and
01:08:15
I think that's been one of the kind of key learnings that's repeated itself over and over with Twitter and Facebook
01:08:20
the thing about Reddit it's always been a community service if you guys remember
01:08:24
like in 2014 2015 in Ellen Powell stepped down after there was a Reddit Revolt she was the CEO at the time and
01:08:31
she fired an employee at Reddit that ran the Q a site for reddit's mods and their
01:08:37
users and the network the community was super pissed off when this happened and they all revolted and they were going to
01:08:42
shut down the service and ultimately Ellen you know got removed from her role as CEO when this
01:08:48
happened so you know because so much of the value of Reddit isn't in the management team it's not in the work
01:08:54
that the software Engineers do that run the company it's not the the VCS or the shareholders the value of Reddit is
01:09:00
inherent in the community it's inherent in the individuals that build the content on that platform and that
01:09:05
Community has convened many times in the past at Reddit to change the rules to say this is what we want this community
01:09:11
to become and this is how we want this management team to operate and so it's a really uniquely positioned business
01:09:18
says a lot about how social networks in this kind of modern era are operating it
01:09:22
really speaks to how much of the value ultimately accrues to the shareholders in a business like this when the users
01:09:27
themselves can step in and unionize and say hey you know what we're not going to
01:09:30
allow this much value to be pulled out of the network in this way we want this to change so I think it'll it'll have a
01:09:36
lasting effect in terms of investing in Social Network or social media type businesses where the users are
01:09:42
generating so much of the value and have the ability to kind of communicate with
01:09:45
one another and control where value ultimately Falls tremoth you were at Facebook I think when Zuckerberg
01:09:51
realized enabling a bunch of folks to use the API wasn't as good as controlling the user
01:09:57
experience having a uniform user experience and uh it got deprecated and I remember
01:10:03
Zynga and a bunch of other people had games and were sucking users off the platform there was a LinkedIn competitor
01:10:09
at one point that was growing at a credibly violent pace and I guess you all made a decision we don't want you
01:10:15
sucking our user base off the platform maybe you could expand on what the decisions were at Facebook at the time
01:10:20
that was one of the things I ran I think one of my teams was responsible for Facebook platform
01:10:26
yeah it was just a very clinical decision around Enterprise Value look the the thing with Reddit
01:10:32
is that it's a hot mess and in order to try to create Enterprise Value they decided to really Leverage
01:10:42
the mods so that there was some level of control and that control was necessary so that
01:10:51
they could basically sell ads that's how this thing moved in lockstep because the
01:10:54
minute that there was corporate Venture investors and other investors and a need
01:11:00
to generate Enterprise value and is it worth 2 billion or 5 billion or 10 billion whatever the number was that
01:11:05
they thought they were worth they had to make money right and Huffman was very straightforward about that and wanting
01:11:11
to go public in the whole nine yards but because it was such a hot mess the mods
01:11:16
became this integral part of the ecosystem so that they could actually drive reasonable Revenue
01:11:23
but then what happened was it also allowed them to basically take over and I think that it was a pretty
01:11:32
significant miscalculation because I think that what they needed to do was really redefine the economics of how
01:11:39
Revenue generation splits would work before they could do all of this stuff to try to monetize the API so I think
01:11:45
like they got the order of operations wrong but I also think it's very fixable and I think that they have some very
01:11:51
smart people around that table so as long as they're again willing to be clinical and unemotional like we were
01:11:57
they'll get to the right answer which is give them a healthy rev share that's the
01:12:02
future Freeburg you know what version of what Freiburg said is true the content creators need to get paid you know why
01:12:08
you know you see content creators now on YouTube making millions tens of millions
01:12:13
hundreds of millions in a few unique cases billions and then we are all content creators yet
01:12:19
most of us on these old Legacy platforms make nothing so that exch that exchange has to change
01:12:25
Brad any thoughts with this derail the IPL not on that but I mean I think you know you bring up this thing about meta
01:12:31
you know did anybody pay attention to you know such launching project 92 right and project 92 is going to take on
01:12:40
Twitter it's a text-based social network that's going to pay creators and they're
01:12:46
recording apparently Oprah Winfrey the Dalai Lama and all of their creators that are already on their current sites
01:12:53
are saying we will use this thing to interact and we will compensate you and then on Lex Friedman's podcast he
01:13:00
mentioned something about um you know having been inspired a little bit by what was
01:13:07
going on with blue sky so I'm super intrigued you know you talked about it at this all hands meeting I think Chris
01:13:13
Cox talked about it so it looks like meta may be revisiting some of these things that they shelved a while back
01:13:19
you know doesn't have any direct uh implications on the Reddit front but I think there's a suggestion here
01:13:28
that it may be more about putting the control back in the hands of the user from a data perspective and a
01:13:35
monetization perspective that would be a pretty gangster move you know and an interesting way to
01:13:42
leverage the platform and I don't really hear anybody talking about it there's a
01:13:46
really easy solution here for rabbit those mods most of them do it for fame glory and
01:13:52
affiliation uh Community but if some number of them wanted to monetize their activity there why not allow people to
01:14:00
subscribe to subreddits and pay a membership fee and split it with the mods that that seems like it would be a
01:14:06
high scale move getting patreon you know subscription services to let them make a
01:14:12
little bit of money and then with these it's only three apps that are being affected they should just either buy
01:14:16
those apps and bring those teams internal or I think it's not or they could split Revenue with those apps they
01:14:21
could tell those apps that that's the key issue it's like it's like if you're going to try to monetize apis on user
01:14:26
generated content I think what's Happening Here is the internet is saying okay that's enough because we're going
01:14:32
to leak our activity someplace else where we can directly monetize it so that's the whole point I think in this
01:14:37
current version of the internet the value is going to go and again further further further erode away
01:14:44
from decentralized apps and more towards the individual people or in this case these hubbed spokes these mods and not
01:14:53
to the centralized organization that that has the housing the Reddit the Facebook of the world so that's just the
01:14:58
trend that's happening the Instagrams of the world and there's nothing wrong with
01:15:01
that YouTube as well it's just where the pendulum is swinging so I think that Reddit just has to
01:15:09
cut him a deal pretty easy to do speaking of AI funding there was a breaking news story
01:15:16
just in the last 48 hours a startup named mishro AI has raised a 105 million seed round they're calling it
01:15:26
should be at about a 240 million valuation according to reports one of the co-founders is a deep mind
01:15:33
researcher I guess people are saying this is insane because they haven't written any code yet and they've been
01:15:38
working on the company for a couple of years why these rounds are so big is I guess that you have to buy all these
01:15:44
h100s and they're expensive and these rigs are very expensive I mean you guys saw this that Nat Friedman basically
01:15:50
published that he spent 75 million dollars on a bunch of hardware and if you were one of his
01:15:57
portfolio companies you could use it so getting these h100s and a100s to train on seems to be a non-trivial task and so
01:16:04
and they're very expensive even if you can't get a hold of them so I think what we're talking about is
01:16:10
basically that these rounds have to go up my and because if you notice like the the post
01:16:16
you had to raise the post so that it wasn't so utterly deluded as to completely disincentivize the employees
01:16:22
but let's be honest here nobody's writing 105 million dollar heat check that 105 million is chopped up probably
01:16:29
10 Ways to Sunday so there's a bunch of people putting in fives and tens and 15s
01:16:33
in the round and they said it was massively oversubscribed yeah so I so it's everybody taking a little teaser
01:16:40
bet the problem with these teaser bets is they never hit in the way that you think maybe you'll get your money back
01:16:45
with all the dilution that's going to happen etc etc this is not the way to make money guys
01:16:51
I'm just going to be honest with you so whoever's putting money in thinking they
01:16:53
know what the [ __ ] they're doing you might as well just light it on fire go to Vegas and have some fun with it
01:16:58
because you will make more you'll get more enjoyment from that than you will for making these kinds of Investments
01:17:02
what do you think that's dumb stupid stupid bat brilliant Pat by the way this has nothing to do with the
01:17:08
company when you're embedding four million in 105 million dollar rounded 240 plus you
01:17:15
do not know what the [ __ ] you're doing that is not the job so again Mr they're going to be a couple monster
01:17:23
rounds I think announced next week like that are gonna make this one look like kids play
01:17:29
um so a lot more of this is coming you're exactly right this is about buying h100s and compute everything
01:17:35
we're talking about right an essential ingredient is compute and it's a scarce resource my God these people that put
01:17:42
the money in the seed round should have just bought Nvidia buy some call options
01:17:45
like you'd make more money well and there's downside protection because Nvidia has a floor and by the way
01:17:51
because in just in case Mistral doesn't work Nvidia will sell those h100s to somebody else yeah they probably have
01:17:57
the option I think you're right on these teaser bets this is a power law business
01:18:03
there's a massive pressure on Young Junior Partners principals Within These firms to do something fire them it's not
01:18:13
just teaser bets what happens in these players they want to get the logos because they need to explain sorry no
01:18:22
actually no that's even worse the GP that can't manage their [ __ ] principle should be fired right so I
01:18:28
think I should those the young people should shut the [ __ ] up okay be lucky you have a job learn the
01:18:35
craft it'll take you a decade and if you are proposing stupid bets like this again sizing matters again I'm not
01:18:42
talking about the company here I'm just saying when you make a five million dollar three million dollar deal memo
01:18:48
for 105 Million Dollar Round that is stupid okay and so if you're the partnership that allows those kinds of
01:18:55
things to leak through you don't know what you're doing so at some point somebody should be held
01:19:01
accountable for this and I guess what's going to happen is the returns of Calpers are going to Cascade through
01:19:06
everybody else thinking well at least I own some you know h100s for a minute so let me see people I think this could you
01:19:12
wanna take the other side of that no that's just an incredible team that's going to do you know that this may turn
01:19:17
out to be a fantastic bet or I don't know Lightspeed or whoever LED this round let me let me say something
01:19:23
different in in 1997-98 we had a similar phenomenon everybody thought internet search was going to be huge there was
01:19:31
massive fomo and chasing and everybody scrambled to get a search logo Alta Vista info C lycos go plan it all
01:19:42
you know geocities just go through the lists you know that people were scrambling after and the truth of the
01:19:48
matter is almost all those companies went to zero even though you got a couple bets right you got the internet
01:19:54
right you got search right but you didn't have to invest a dollar in search until 2003 and you would have captured
01:20:01
98.99 do it again do it again now for social networking same thing do it again for social networking Brad say all the
01:20:08
names say all the names it's the same thing same thing and so you know when you when I look at it
01:20:15
today we have a huge anti-portfolio for AI it's painful we've said no to over 60
01:20:22
companies right we you know but when we look around I see a lot of our competitors doing a
01:20:30
lot of these deals maybe they're teaser bets I don't really know the size they're putting into those
01:20:36
companies but I suspect that if we believe this is as big as as it's going to be and going to play out over decades
01:20:43
then putting a bunch of really small bets in order to buy a network or buy relationships or buy logos Etc I don't
01:20:50
think it's going to work any better this time than it worked then around social networking but to be clear there could
01:20:56
be some people who lead these deals who help these companies build incredible businesses and those will you know
01:21:03
they're going to be some winners here I think there's time to participate in the
01:21:07
winners a lot of this is unknown and unknowable it will become more clear in the one two three years ahead the
01:21:15
problem is for the LPS like if you are the lp I am an LP in a bunch of venture funds this stuff really turns my stomach
01:21:21
because I'm like wow I am losing money every day when I see these things that's why I get so emotional about this
01:21:27
I think to myself if the GPS that I've given money to are doing these kinds of deals I'm screwed at best maybe I'll get
01:21:35
back 50 or 60 cents on the dollar and I immediately start thinking to myself I really need to write this down and I'm
01:21:41
re-underwriting that person and that organization because I'm wondering how can you let these things happen because
01:21:46
if you just look back in history you have to be really really negligent to not learn that these things never
01:21:54
work out the way that you think they are and especially these kinds of rounds and
01:21:58
this nominal ownership the inability to defend ownership it's just not a path to
01:22:02
success I mean also if you think about this tremath you know what company in recent history that got over funded
01:22:09
actually use that money logically the magic of Silicon Valley is the milestone-based funding system and we
01:22:15
never use short-circuit that this money becomes a huge distraction to Founders if they were to receive 10 million 25
01:22:22
million work for a year or two then raise another 25 or 50 million they don't need to raise all this money at
01:22:27
once this is like taking your ABC round putting it all in 100 is distract Founders and then everybody coming for a
01:22:34
salary says well you got 105 million in the bank I want three million dollars I want five million dollars what's the
01:22:39
best example guys of a huge financial winner that raised these ginormous amounts of money
01:22:45
pre-launch of our product there's no product here what's the best example magic leap
01:22:50
what is it oh oh of disasters that actually oh no no what is the best example of a great company I'm putting
01:22:58
great quotes that raise these kinds of amounts so early in this like quibby we needed a lot of money later but no
01:23:32
it's five million sorry 500 000 safe at five five posts there's a five million valuation for Uber and 1.25 I think
01:23:39
wouldn't it here's another thing everybody walks in they say well I have to raise this much money
01:23:44
it's good this is a circular logic I have to raise this money because I have to have all this compute
01:23:52
and I say okay you got to train it you know we want to have a vertically integrated model we want to train a
01:23:56
model and say okay so there's a huge upfront cost and they're like but I don't want to take a lot of dilution so
01:24:03
I have to raise it at a really high price and so you say okay well um that's a that's a challenge for you not
01:24:10
necessarily a good thing for us and then they say oh and I if you ask the question is this an ongoing expense
01:24:16
they're like oh yeah we're gonna have to retrain like we're gonna have to continue to spend this money and I'm
01:24:20
like well so if if you're a software company for example and you say well what's my cogs if all of a sudden you
01:24:27
have an embedded cogs that's massive and recurring right for your compute costs that we haven't had in the past then the
01:24:37
revenue on the other side of that's got to be a multiple of what a traditional software company might have in order to
01:24:43
get back to that set of Economics so I think there's this there's a scramble and understandably so
01:24:49
if you think the big win AGI or you know this autonomous agent that's going to you know
01:24:56
be the top of the next funnel that thing is going to be worth a lot but to me those are lottery tickets at this at
01:25:04
this stage can I tell you a little secret here's a little secret when you put in a hundred million
01:25:12
dollars into a startup to buy compute you are not buying whiz-bang Next Generation IP you are subsidizing capex
01:25:23
and that is a job that many many other people do at a very low hurdle rate and so it is a law of capitalism
01:25:35
that it could be the most incredibly Innovative company in the world but if you are offering money to them
01:25:43
to fulfill a low-yield thing you are just not going to make a lot of money when you put money into a startup that
01:25:54
is their writing code to build groundbreaking IP you own something that's really real
01:26:01
but that's because 80 cents on the dollar is going to core critical r d in that point in time and then they raise a
01:26:08
lot of money at a lot less dilution when 80 cents on the dollar goes to sales and
01:26:12
marketing then they raise a lot of even more money at an even smaller smaller amount of delusion you start to get to
01:26:17
scale internationally so you start to see right more dollars less return right you're owning less of the critical
01:26:25
differentiation so if if everybody is like oh it's so expensive for compute I need to raise
01:26:31
100 million well buddy you know that's like a leasing function you know you're you're like all of a
01:26:38
sudden like the best VCS in the world have become like Comerica Bank yeah I mean they could have done it with the
01:26:44
same structure right Comerica could have given them 50 million to buy these machines and maybe they should and
01:26:48
Comerica and JPMorgan and somebody else should basically say hey you know what here's a lease line for your h100s
01:26:54
because I know they're worth so much and I'll just yes write it at 10 percent and and my point is that the fact that
01:27:00
people don't understand this is why the money will get torched I would love a critique that says actually tomoth
01:27:05
you're an idiot I'm right I know that that's happening but here's why I still see it happening I don't hear any of
01:27:10
that here's the problem with that critique okay so you asked like what are the biggest projects in history you know
01:27:16
uh around startups think about AWS I don't know they spent 400 million probably uh in order to get AWS off the
01:27:22
ground but it wasn't done by a startup right you think about what zoc's spending on the metaverse it's not being
01:27:28
done right by a startup the truth of the matter is can you go back to apa AWS AWS
01:27:34
was dog food on Amazon retail of course of course and Oculus was done on Kickstarter like the cash flow of Amazon
01:27:41
retail fed the development of AWS correct my point is that when you think about what these hyperscalers are going
01:27:49
to do they're not going to spend a billion they're not going to spend 10 billion they'll spend a hundred billion
01:27:54
dollars right in order to be in this race and so if you're backing a startup that says I'm going to
01:28:01
build a better chat gbt right just like open AI discovered themselves they sold 51 or 50 percent of the company to
01:28:09
Microsoft for a reason they had to they had to have the data and they had to have the compute this is
01:28:14
a nuclear arms race around compute and so but I think it's this is insane it's financially illiterate for someone to
01:28:22
think that they are actually doing anything other than subsidizing capex when you're giving a hundred million
01:28:29
dollars to a startup to literally buy chips and services you want to give up 40 of their Equity that's the other
01:28:35
thing this Equity is so valuable why would you want to give 40 of it when you could get an equipment lease and keep it
01:28:40
twenty percent you probably can't get this you can't get them I mean if the VC's put in 50
01:28:45
million instead of 105 you don't think America would come on the back end with 25 million of course they would Brad is
01:28:51
right this happened in 98 99 2000 where all of this money was getting flushed down the drain going into buying Data
01:28:58
Center capacity where remember even at Facebook like we were racking and stacking our own servers and then we
01:29:04
then we ultimately got big enough where we actually built out our East Coast and
01:29:07
West Coast Data Centers and data centers all around the world but it was very expensive and in that moment again all
01:29:13
of those companies just lit all that money on fire it they torched it there was no Remnant Equity value for that
01:29:20
capital I guess I'm just I'm just questioning like what does a GP think they're actually buying
01:29:29
well 80 if 80 of it's going to Hardware I mean they're buying the other 20 buying chips I mean it doesn't make much
01:29:36
sense that's going to get options I want to make one point here and Freeburg I want to get your input on this as well
01:29:41
it constraint is important for Founders and the thing that I find really troubling about this is yeah and putting
01:29:48
this startup aside because crypto people also went through this for the last three or four years where they were over
01:29:52
funded it was tens of billions of dollars burnt of LP monies people's retirements and college
01:30:00
endowments and it's going to be quite a postmortem but look at you you invoked meta it's important for people who don't
01:30:06
know this to know that that was a Kickstarter shout out to Palmer lucky he raised a couple of million dollars in
01:30:14
2011 I think it was on a Kickstarter pre-selling the devices right constraint makes for great art
01:30:21
constraint makes for great startups you need to have pressure on a startup for them to deliver you cannot give startups
01:30:29
five years of Runway and expect it's going to work it just doesn't work and I've seen this
01:30:34
movie so many times but now we've gone through 18 months of nobody doing anything I guess in VC land so folks on
01:30:40
Saturday are itchy they want to justify why they should still be drawing two percent on the full fund they want to
01:30:48
try to show activities so that they can raise the next fund and continue to stack fees and all of these sort of
01:30:53
leads to these suspension of financial logic but it gets replaced with financial illiteracy which is really
01:31:00
there's an optimal fund size right and this is why the people that pay the price are ultimately the LPS and it may
01:31:05
be the case that Calpers maybe actually avoids a lot of these pitfalls because by missing yeah they missed all the
01:31:10
returns but then they missed writing the mega follow-on checks for all of these folks that they and then they would have
01:31:16
torched I'm gonna take the other side of that go ahead Brad I think it's merely impossible to conceive that all of these
01:31:23
bets that are currently being made are bad bets I think it's a major platform disruption
01:31:29
but I I you know instead I think the right way to think about it is it's about pacing and if you're trying to if
01:31:36
everybody thinks they're going to build the next Google they're going to build the next autonomous agent that's going
01:31:41
to sit on top of the funnel that's going to be worth a trillion and therefore they can burn a billion dollars training
01:31:47
models that's not like we're not going to have 10 of those winners okay but at the same time there's a lot of
01:31:54
stuff getting funded that is in the application layer that is in the tool layer and these are not the big
01:32:00
headlines that you're reading about but these are really interesting businesses that are solving real problems in the
01:32:07
software and tooling layer here you know in the smaller model layer vertically oriented things around Life
01:32:14
Sciences or uh you know targeting you know Financial Services or things in the application layer you know like
01:32:22
character.ai Etc so I do think there are a lot of good things getting funded that will deliver real value but I agree
01:32:31
with you the prop that there's a there's a second problem to this chamoth if you
01:32:35
drop a billion or two billion or three billion into something you have not only a a product challenge
01:32:42
you have a distribution challenge right we know all the hyperscalers are going to play Google is going to play
01:32:49
meta is going to play and so you've got to compete and then beat them and it used to be that you would say well if I
01:32:56
get a lot of traction they'll buy me if I'm Instagram or Whatsapp like they'll buy me well we have such a regulatory
01:33:03
nightmare in Washington DC today no hyperscaler can spend over a billion dollars to buy any AI company not even
01:33:12
that 400 million gift what is it giffy I bet it wasn't even actually in the United
01:33:18
Place mergers and acquisition right with copy and compete because we've said to hyperscalers
01:33:25
you're not allowed to acquire any of these companies so the unintended consequence of the
01:33:32
regulation in Washington is that entrepreneurs and Founders and Venture capitalists who might otherwise have had
01:33:39
a good idea built something with some traction they can't find a home for it in the way you know that WhatsApp found
01:33:46
a home or is that a good thing Instagram isn't that a good thing go public and be independent is it
01:33:53
better presupposes that everything can become a big and profitable business there are a lot of net net can what is
01:34:00
it better for them or become a big and profitable business no on its own no chance
01:34:05
well it's still not a bigger problem so that's what I'm saying so maybe it should have died I mean maybe it's being
01:34:11
kept alive but I mean it's better don't you think it's better for the market I think it's created it was it was
01:34:17
Innovative technology it was yeah it you know you you were able to to back it with some good funding and I think
01:34:23
what's coming is going to be really exciting but it took a really long Runway a lot of capital A lot of
01:34:28
intelligence in order to build unfortunately we've killed that so you have a two-sided problem we're spending
01:34:34
more than ever to fund and start these companies and we you know have undermined a lot of the downside
01:34:40
protection Freeburg your thoughts so if you look at how the capital is being deployed if it's mostly being deployed
01:34:46
to train models then the question has to be is there really a sustainable advantage
01:34:52
that arises by being the first to train the models and then being able to persist an advantage by training new
01:34:59
models from that foundational model going forward and the reason that that matters so much is because you have to
01:35:06
really have a deep understanding if you're going to invest a lot of capital here you have to have a deep
01:35:11
understanding for how quickly model development and training is accelerating and how quickly the costs are reducing
01:35:17
so something that costs like we said open AI spent 400 million dollars training models for for gpt4 if they
01:35:24
spend 400 million dollars in the last couple of years you could probably assume that doing the
01:35:29
same trading exercise could be done for five to ten million dollars 18 months from now to generate the same model
01:35:36
that's a you know 100x cost production and I'm just ballparking it here but if that's really where things are headed
01:35:43
then does the 100 million dollars to train models today really make sense if trading those same models can be done
01:35:50
for five million dollars in 18 to 24 months great point and that's where it becomes a really difficult investment
01:35:55
exercise and one that you have to really critically understand how cost curves are moving in AI the same thing with
01:36:01
true and DNA sequencing in the early days and it's following by the way a similar cost curve is DNA sequencing
01:36:06
which is actually greater than Moore's Law greater than a 2X cost reduction every 18 months we're seeing something
01:36:12
much greater than that in machine learning right now in terms of cost reduction and model training so
01:36:17
ultimately the business model has to have some advantage that by being the first to Market you can then generate
01:36:24
new data that gives you a persisting advantage and no one can catch up with you and my guess is if you get under the
01:36:29
hood of the business models you it's unlikely going to be the case and it's very likely going to be the case that
01:36:34
you don't know when the market Advantage will lie when you will be able to kind of create a
01:36:40
persisting mode a moat that expands as you get more data and can train more and this is why it's so hard to invest
01:36:45
generally in technology is because you don't know the point at which the market tips relative to the point at which the
01:36:52
technology tips so there's a moment where the technology gets so cheap and then the market maybe adopts after the
01:36:59
technology gets cheap and at that point it's a totally different game remember in the mid 2000s where we had memory
01:37:04
shortages and we used to have to buy Ram yeah I mean it's just like it's all this
01:37:09
stuff and it's like if VCS are funding this stuff just you just like like the equity on fire guys not going to be
01:37:15
worth anything Brad's point is Right which is the question is what's possible now where can you build a sustaining
01:37:21
Advantage now rather than go after big model development Cycles where the cost curve is going to come down by 100 fold
01:37:27
in some period of time in the near future is there a business model Advantage you
01:37:32
can build by being in the market first building a customer base accelerating your features getting user feedback and
01:37:38
that certainly exists in the application and the tools layer as Brad is talking about that seems like such a no-brainer
01:37:44
for disruption across many different segments many different verticals many different markets right now
01:37:49
versus trying to compete further down the stack where it takes hundreds of millions of dollars of capital and in a
01:37:56
couple of months that hundred millions of dollars of capital can be replaced with five million bucks of training
01:38:00
exercise and compute can I take the other side of that yeah all that coordination makes no money today so to
01:38:05
your point when you cut the actual input cost by a hundredfold the coordination cost goes from being zero to being worth
01:38:12
less than zero right I don't see any money being made there either and all the people that say I'm sure there's
01:38:17
going to be some genius in the comments but what about open source it's like what about it open AI also just
01:38:24
gave an update on their cost structure for their API and they just dropped it 25 to 75 again this is after the tenfold
01:38:31
drop they did last year play this out a hundred million dollars of capital spent
01:38:35
training today is a million dollars spent doing trading in 18 years yeah three years 18 18 to 36 months somewhere
01:38:42
in that time frame likely the time frame so why would you spend all this money today when an 18 to 24 month things are
01:38:48
going to get so much cheaper yeah I think the further up the value stack you go the more of an opportunity to truly
01:38:53
kind of innovate disrupt and make well what on Capital as possible what happens in 24 months though when you've made a
01:38:59
bunch of 100 million dollar Investments and they're all zeros uh you uh get fired
01:39:07
maybe unfortunately as an investor chip up is that what you're asking at some point you don't get invited to
01:39:13
join the next fund think about the alternative investment strategy with lots of capital where the cost curve is
01:39:20
not coming down as quickly in terms of where that capital is being deployed for example building Rockets to go to space
01:39:25
or building uh infrastructure to transport power or building roads you could raise a billion dollars to
01:39:33
build a toll booth system or a port let's use a port a shipping Port is a good example you could spend a billion
01:39:39
dollars to build a shipping port it's not that the cost of building a shipping Port is going to come down by
01:39:44
10x in 18 months so it makes sense to raise a billion dollars and build a freaking shipping port and charge people
01:39:51
right coming out VCS thought they were underwriting IP instead they're just actually subsidizing catbacks it's the
01:39:58
craziest thing Brad is this a problem of the optimal Venture fund size that Fred
01:40:03
Wilson talks about that bill Gurley talks about a lot of the ogs say hey 250 400 600 million there's an optimal size
01:40:11
here for four or five Partners in a venture fund to put money to work is this part of the problem right now which
01:40:16
also happened in crypto is you had billion dollar two billion dollar funds sitting around and and different Venture
01:40:22
brand names having four or five of these multi-billion dollar funds burning a hole in their pocket and getting frisky
01:40:28
uh over this you know 18 month pause and is this about optimal Fun Size uh making
01:40:36
you know we have over a billion dollar funds so if I if I if I take the other side of that the people are going to say
01:40:42
you're talking your book but I don't think this is about large funds I think this is about good and bad decisions at
01:40:49
the end of the day some of these decisions will pay off like for example what's the largest bet size from a
01:40:54
billion dollar fund that you've made or will make I think out of that fund would be a
01:41:00
hundred million dollars most likely but we may cross it over other funds and have you know bigger bets
01:41:07
um certainly would that happen two or three times though would you do it all at once like this or might it happen
01:41:12
over you know series ABC kind of situation where you build a position well I would say you know we're not
01:41:17
writing I you know we haven't written a hundred million dollar check into a series a and I don't think most of
01:41:22
people to Chamas point that you're talking about are writing a 100 million dollar checks into those series is the
01:41:27
Mr all around it you reference I imagine the lead check into that was maybe 50 Maybe 50.
01:41:33
so listen larger fund sizes enable you to participate in companies that require more capital and and these companies do
01:41:43
require more Capital so you may take the position that all these companies are going to zero that's not my position
01:41:50
my position simply is that I do believe there is a bit of over exuberance that too many things are getting funded
01:41:59
right and it's um you know like the margin of safety the margin of return being required is probably lower than it
01:42:09
should be but there's no doubt out of this vintage in my mind that you're going to have some epic companies now I
01:42:15
don't know if what Mustafa and Reed Hoffman are doing an inflection is you know building pie to take on chat
01:42:22
GPT and to take on bar to be the intelligent assistant the ambition is extraordinary the cost of compute is
01:42:30
high but the first mover Advantage is also high right because whoever secures this position
01:42:37
you know Bill Gates said he's been playing around with it it's one of his favorite agents or whatever that's an
01:42:42
interesting comment I think it's pretty good but I think chat GPT is out in front in this regard I think a lot of
01:42:48
people are going to try to compete for that space But you know I can't imagine that all these researchers leaving Deep
01:42:54
Mind right are going to be able to compete for the most sophisticated model to answer general purpose questions so I
01:43:02
don't think it's the large font size I think it's just a lot of exuberance to participate in what everybody perceives
01:43:08
to be a massive platform disruption I think that can be true just like the internet was in 1997 and a lot of these
01:43:17
bets can you know can and will likely go to zero how great is America you just rent other people's money they pay you
01:43:23
two percent and then you're allowed to get exuberant yet keep your job when you lose it
01:43:28
God Bless America well I mean the the issue trim off is it takes 10 years to prove you're bad at this job
01:43:38
it takes 10 years to prove you're good and it takes 20 to prove to prove that you can be consistently good and didn't
01:43:44
get lucky but it in a few years you can tell that somebody sucks can LPS tell well I'm not sure that they get the
01:43:52
visibility because when LPS interact with GPS they're grin [ __ ] for the most part so I don't know probably not
01:43:59
but when I interact with them just as a peer-to-peer level and I see the deals that get done it's pretty easy to
01:44:06
understand that some people just suck they don't know how to make money I guess is the point which in the job
01:44:11
that's the job is to make money to consistently make money okay Brad take care and uh let's go to science corner
01:44:19
Bill Gates wants to genetically modify mosquitoes is this fingers incorrect fake news it's fake news okay
01:44:28
explain the reference is from RFK Junior's tweet that he sent out where he retweeted someone talking about this
01:44:36
mosquito Factory in Colombia and this guy basically put out a tweet saying oh look
01:44:43
Bill Gates has a mosquito Factory in Colombia it's the largest in the world 30 million genetically modified
01:44:48
mosquitoes are released every week into 11 countries because Bill knows better than nature what could possibly go wrong
01:44:54
RFK Jr then took it upon himself to retweet and say should Bill Gates be releasing 30 million genetically
01:45:00
modified mosquitoes into the wild part of the mentality of Earth as engineering object what could possibly go wrong so I
01:45:07
really wanted to take issue with this because I do think that this is the sort of misinformation that both create
01:45:14
scientific illiteracy and damages and impacts negatively some of the significant progress that can be
01:45:22
made in medicine and in science so I want to speak very clearly as to what is going on what the science is behind it
01:45:28
why this is super important and then we can speak philosophically if you guys are interested on kind of
01:45:34
should we be doing this sort of stuff and why so what's real here like what what are actual facts versus fake news
01:45:39
maybe that's a good place to start the most common disease-carrying mosquitoes are called uh Edis uh egypti uh egyptia
01:45:48
um it's a species of mosquito that carry yellow fever a Dengue uh zika a number of viruses that obviously are pretty
01:45:57
adverse to human health each year about 400 million people are infected with Dengue virus via this mosquito Vector
01:46:05
100 million become ill and 21 000 deaths are attributed to Dengue globally 200 000 cases of yellow fever each year
01:46:12
causing thirty thousand deaths these are pretty significant health concerns and it turns out that in mosquito
01:46:18
populations not in this particular species that carry these viruses but in other species of mosquito there's a
01:46:25
bacteria a natural bacteria called walbachia and this bacteria exists in nature and sometimes these mosquitoes
01:46:31
get infected with this bacteria so they carry this this bacterial bug and this bacteria is really interesting
01:46:38
because it causes what's called cytoplasmic instability in the mosquito cells which actually makes the mosquito
01:46:44
largely resistant to a lot of viruses and there's a bunch of theories for this mechanism and why this is the case but
01:46:50
it causes the mosquito to not be able to carry and spread these viruses that are super adverse to human
01:46:56
health so number one there's a natural bacteria that's found in nature and up to 40 percent of mosquitoes are already
01:47:03
infected with it number two is it's not common in the the mosquito species that is common in these areas that are
01:47:09
spreading these awful viruses to humans and so there's been a project that's been going on now for 12 plus years
01:47:17
where they're taking large amounts of mosquitoes and breeding them specifically to have this bacteria
01:47:23
in the mosquitoes and then they release those mosquitoes into the wild and over time the bacterial infected mosquitoes
01:47:29
start to become a larger percentage of the population and as a result the vector of carrying these awful viruses
01:47:35
into humans goes way down there was a study done in Indonesia where they took these walbachia infected
01:47:41
mosquitoes and they released them into the wild and they looked at a population that was in a region where they released
01:47:47
them in a population that they didn't in the release and region where they didn't
01:47:50
release some 9.4 percent of people ended up getting infected with dengue fever and where they did release them only 2.3
01:47:59
were infected so it was an amazing 75 reduction in the infection of people by these mosquitoes and so the whole point
01:48:07
is just to kind of you know move the mosquito populations in a way without doing any sort of genetic modification
01:48:13
but by exposing them to this bacteria so that they don't carry these viruses into
01:48:17
people but you know because Nuance point there Friedberg the it's not genetic modification or it is it's not I just
01:48:25
explained it's a bacteria mosquitoes they're exposing the so that they end up getting infected with this
01:48:31
bacteria and then as they breed the mosquitoes breed in this facility you have you have to have two an infected
01:48:37
male and an infected female for The Offspring to have the bacteria if you have an infected male they're actually
01:48:43
infertile they can only fertilize an infected female so unless you do this breeding work you don't end up seeing
01:48:50
this happen naturally in the environment where the wolbachia starts to spread where's the genetic modification
01:48:55
misinformation coming from them from from the the presidential candidate RFK Jr who just propagated it and so
01:49:03
this is why I want to make this point because this whole idea that oh should we be engineering the Earth let me just
01:49:07
say something about engineering the Earth humans used to wander around the earth
01:49:12
or proto-humans did without access to food and until we realized that we could plant a seed in the ground and grow
01:49:18
crops and started to engineer the Earth in the form of farming we did not have access to a reliable source of calories
01:49:24
human Ingenuity human engineering gave us the ability to do this gave us the ability to feed ourselves similarly
01:49:31
humans got infected by viruses by bacteria by Fungus and died at a young age over and over again and when humans
01:49:38
began to engineer medicine and engineer unnatural substances because he makes this point oh should we be interfering
01:49:45
in the natural world what is natural is for people to get infected with viruses or bacteria and die and if not for the
01:49:52
Advent of our engineering and our Ingenuity and our ability as a species to create Solutions through science
01:49:58
which allows us to do Discovery and then through engineering which allows us to make solutions that solve problems that
01:50:04
humans face we would all be dead at a young age and we would not have realized the progress that we've had as a species
01:50:09
so I really get ticked off when I see guys like RFK Jr and others not just propagate this this BS misinformation
01:50:18
spiel about oh genetically modified this and that science is bad but to then say
01:50:23
should we be messing with the natural world because I would say to him what about when your kid got infected and you
01:50:27
gave your kid antibiotics maybe you shouldn't have done that and this is a group of people who are saying that you
01:50:33
shouldn't do that right there is a movement to stop taking antibiotics because it's making
01:50:37
yeah because it's it's having it I'll tell you a couple things there are bad pesticides that impact human health and
01:50:45
cause damage to our DNA there is bad sunscreen that is endocrine disruptors and can damage human health there are
01:50:51
plenty of chemical products that are made that we use in everyday products that cause cancer
01:50:56
there is an endless string of things that are wrong with the system of engine the systems of engineering that we do
01:51:02
use that doesn't mean that they're all bad that doesn't mean that we then say hey you know what let's not do anything
01:51:09
let's not do any engineering let's not use any antibiotics let's not use anything in food and that's the
01:51:15
challenge is you know getting into the details on like I'll tell you I don't use any sunscreen products with myself
01:51:21
or my kids I only use zinc and I have a similar sort of nuanced approach to understanding what things we should or
01:51:26
shouldn't use in our lives because of the data on the side can you please explain that because I didn't know this
01:51:32
but am I doing am I gonna what explain yeah so there's a number of substances which are known endocrine disruptors
01:51:40
that are found in sunscreen I think it's like one of the craziest things that we
01:51:44
haven't made these products illegal at this point but the only sunscreen that you should
01:51:50
use is natural mineral sunscreen uh this sorry I shouldn't say that you should I
01:51:54
should say this is what I chose choose to do based on the data that I've seen what's a good brand what brand any brand
01:52:00
that sinks just zinc sunscreen just look at the back if there's anything but zinc
01:52:03
in it don't use it zinc oxide is that yeah zinc oxide sunscreen yeah well that's the ingredient in it
01:52:15
so I don't know what you guys um huh wow but uh here let me just send you this but are you saying that you're
01:52:21
not allowed to have any other ingredient like there's no stabilizers there's nothing else no no that like it's it's
01:52:26
it's the principle ingredient has to be zinc oxide versus some other chemical you're saying
01:52:32
yeah so oxybenzone I don't use any product with oxybenzone that's like the most common sunscreen ingredient uh
01:52:38
octanoxate is the other one homothalate and the parabens all of those product categories which are the most common
01:52:45
products used in sunscreen they're absorbed by your skin they go into your bloodstream and their endocrine
01:52:50
disruptors now the problem with the zinc sunscreen and the mineral sunscreen is it actually stays on your skin so you
01:52:55
look like you're wearing it's really hard to rub it in you got to really really rub it in so they're actually not
01:53:00
popular from a cosmetic point of view people don't like wearing them because they look like idiots and it's really
01:53:04
hard to yeah that's the stuff I use in the summer the isdin it drives me crazy because I look like this weird ghost
01:53:11
shiny ghost thing I know but I do use that that's like really hardcore about that so that that's an example of
01:53:18
understanding Nuance right it doesn't mean all sunscreens are bad and it doesn't mean that we shouldn't
01:53:23
use sunscreen but understanding what the risk factors are that are associated with different
01:53:29
ingredients or different engineering that's been done to make sunscreens available is important but that's so
01:53:34
many levels deep it's a really difficult thing so then people end up being scientifically illiterate and being
01:53:38
wrong because someone like RFK Jr comes along and says hey should we really be engineering the Earth with genetically
01:53:43
modified mosquitoes and then people have this call to action shut those things down shut those things down and they're
01:53:49
incredibly beneficial and effective they're not taking any sort of genetic editing to Market they're not doing
01:53:53
anything that people might consider risky and we could have a separate conversation about the risks and
01:53:57
benefits of of genome editing that's another topic but how much of this Freiburg as we get ready to wrap here is
01:54:05
a reaction to what happened with covid-19 and people's fear now of and getting sort of educated on gain of
01:54:12
function research and you know this sort of recency effect of my Lord doing some
01:54:19
of the science feels like it's too dangerous certainly too dangerous to do inside a city and what's the point of
01:54:23
taking bats out of caves and and doing gain of function research how much of it has to do with that right now and it's a
01:54:30
sort of the downside to questioning that technology can can be asymmetric you can have like
01:54:36
nuclear weapons can wipe out the world they can wipe out the whole population yeah you know Talib makes this point on
01:54:44
his argument against GMOs which I would argue against him on this point but we could do that another time if he's
01:54:49
willing to come on I'd be super happy to debate him on this point but the idea being that there's super asymmetric
01:54:56
downside and so you know what happens is people see incremental improvements from technology
01:55:03
and they don't really praise those incremental improvements they assume that to be the case it's a linear step
01:55:09
function but when something goes wrong it's a big step down and then people are like oh wow and then people get scared
01:55:16
of technology and then people want to step away from it and this is true in anything that relates to your health to
01:55:21
Food Systems to the environment now um now it doesn't mean that all technology is bad or all engineering is
01:55:27
bad but you know as mistakes are made in the system as new things are discovered
01:55:31
we have to retrench and change what we're doing but it doesn't mean that we should stop progress and it doesn't mean
01:55:36
that the whole system of humans figuring out how to engineer ourselves of the world around us
01:55:41
to benefit the health to benefit the planet to benefit other species on the planet isn't a critical Mission and
01:55:46
effort that we should be undertaking while the sunscreen thing is really tilting I mean I just I need to make
01:55:51
sure I'm pretty sure we have a good one but I don't yeah I'm on this right now this has got me a little nervous with my
01:55:57
kids I I like these um like I I have all my kids have long sleeve Sun shirts and I try to that's
01:56:05
what I am that I think is like the key thing and because I my family has skincare do I have to do that since I'm
01:56:12
dark skinned Freeburg [Music] yeah you know it's a summertime you're in the bed you know you want to show up
01:56:23
yeah you want to show off your typical stuff Revenge body I get it I get it all right everybody on behalf of
01:56:31
sacks let me just say Ukraine Ukraine Ukraine body Biden and uh Francis mayor Francis
01:56:39
is now in the race so I guess we'll have him on the Pod we already talked to him
01:56:44
oh okay so uh yeah at the summit last year and also we're doing a survey for the podcast all in podcast dot Co slash
01:56:52
survey all in podcast dot Co slash s-u-r-v-e-y if you got to this point in the podcast please fill out our survey
01:56:59
our listener survey and we will see you all next time on the all-in podcast we'll let your winners ride
01:57:12
[Music] and they've just gone crazy [Music] besties [Music] it's like this like sexual tension that
01:57:44
they just need to release [Music] [Music] I'm going all in