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all right everybody welcome back to the number one science politics technology and business podcast in the world for
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for or so and that's a million doll domain just so we all know five letters in the dictionary so good for Branding
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good job J thank you my friend yeah now we have allin.com tequila oh I love it exactly exactly and you can yum yum yeah
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I got you sax.com didn't I you have the domain nam.com I negotiate that for you wow we have all the way back to episode
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one this is incredible oh the new website yeah this is great oh can I tell you if I website
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all allin.com allin.com that's our website it's like this thing is real yeah it's like a real thing
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after four years we got our sh together this looks great here we go and I want to give a shout out to podcast AI one of
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our um remember those fake all-in episodes that became a startup podcast Ai and they built our website for us so
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shout out to the team over there all right ladies let's move on and uh I am of course your executive producer for
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life and the moderator the all in podcast and if I may just a tiny plug if you're a found found ER we are having
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our ninth cohort of founder University it's a 12we course I teach on starting companies what you stop I'm just giving
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a Qui plug for found University I I need to get a plug because I go to AR one and
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buy Super gut bars $3.99 you can pick them up this afternoon let your winners [Music]
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ride and instead we open source it to the fans and they've just gone crazy with love
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you speaking of that your people use me in an ad freedberg so don't talk about plugs a few weeks ago when I shouted out
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that glue AI was hiring Engineers we had like a 100 applications just from that from glue AI looking for engine plug on
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the show yeah for glue AI yeah right that's awesome for glue Ai and if you haven't tried super gut free Berg's team
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literally made an advertisement with me talking about super gut it didn't tell me and we're still hiring so okay well
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there you have it so go to founder. university to apply for my 12we program check out I'm running a
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GoFundMe tr get a new yeah go to GoFundMe freberg for what more Xanax to deal with your panic attacks all right
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let's get started everybody enough of the shenanigans hurricane season is upon us as freeberg had predicted
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hurricane Milton made land fall on Wednesday evening along the west coast of Florida as as many of you
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know it's been downgraded it it started as a category 5 potentially then a category 3 and then it looks like it's a
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category one now so I guess these things are quite random leading up to Milton though 6
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million Floridians across 15 counties were ordered to evacuate that's a lot of people moving out and it was a pretty
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powerful storm it ripped off the roof of the Tropic Canfield in Tampa so far the death toll is at 4 but
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it's expected to rise sadly and just two weeks ago hurricane helain swept through
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six Southern States killing over 220 people tragically devastating Western North Carolina and entire towns were
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wiped out these are also beyond the tragic human losses are economically staggering
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in terms of the losses ACU weather estimating the total economic damage could be between 145 and 160 billion
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from Helen and Moody estimates the property damage alone could be as high as 26 billion tons to get into here FEMA
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starlink saving the day tons of stuff but free uh back on episode 182 you predicted this would happen what's
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causing all this and let's just start with the science angle I guess before we get into the other political and um
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insurance issues well I think if you'll remember when we talked about this a couple months ago the sea surface
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temperature was at kind of a record high in the Atlantic and warm oan temperatures Drive moist air up that
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evaporates the warmer the air the faster the evaporation and that starts to cause
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the movement of the air which drives ultimately the hurricane and then the hurricane sucks up more warm moist from
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the ocean and it creates a feedback loop so the more energy you have in the ocean
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the more likely you are to accelerate wind forces in storms and that's why you get these massive hurricanes that
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suddenly form seemingly overnight go like in the case of Hela that hurricane went from a c 2 to a c 4 or C 5 in like
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48 hours because of the energy that's stored up and 90% here's an interesting stat 90% of the energy that we get from
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the Sun is absorbed and stored in our oceans the other kind of fact that's playing into this if you pull up that SC
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that nature article and this is something that I think you guys may remember we talked about so this was an
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article that came out a paper a science paper that came out a couple of months ago and in this paper these scientists
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identified that removing sulfur dioxide from cargo ships that travel across the oceans is actually causing accelerated
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warming in the oceans and the reason is that the sulfur dioxide forms cloud formations and those as they travel
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across the oceans and those cloud formations reflect sunlight and in the absence of those cloud formations that
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sunlight makes its way into the ocean and you get more ocean warming and by their estimation removing sulfur dioxide
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which causes acid rain and that's the reason it's been pushed to be removed and they started removing it in 2020
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2021 from cargo vessels by removing sulfur dioxide we are now going to see a doubling of the rate of warming of the
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oceans in the 2020s and going forward let me pause there for a second just to make sure people understand what you're
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saying emissions from cargo ships block sunlight which then of course reduces the heat absorbed by the oceans and so
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we're now choosing between pollution of the air or overheating of the oceans am I correct in summarizing that that's
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roughly it and um what is the pollution again sorry I just understand dioxide go
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yeah that goes into the fuel of cargo vessels and a couple of years ago they started to implement these mandates that
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sulfur dioxide no longer be used in the fuel as a result when sulfur Dio oxide is emitted from these vessels it goes
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into the atmosphere and it actually triggers cloud formation so now you have these clouds that are forming and Nick's
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going to pull up this image right now yeah here you can see that so all of these tracks are these cargo vessels
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moving across the ocean and as they move across the ocean they create cloud cover
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that cloud cover actually reduces the warming in the ocean because it reflects sunlight so now that sunlight energy
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gets absorbed into the ocean so this is another driving force that some people are now speculating maybe accelerating
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the warming of the oceans that we're seeing which drives these extreme storm and and hurricane events and so this
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becomes a more frequent event now a lot of people can I ask you a question does that mean that we're mean reverting
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meaning if we improve the quality of the fuel source that are used in shipping doesn't that then mean that
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we're reverting back to what would have happened in the absence of these dirty fuel
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sources yeah so in addition no no I'm asking I'm asking you the question is that true or not um so yes we are no
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longer reflecting as much sunlight and so for several decades we had bad fuel sources artificial we had artificial
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cooling effec we had an artificial Cooling and now we take but that's counter to The Narrative of what we all
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think is happening oh well the argument is that we've actually been warming the atmosphere which we have been we can see
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the data that shows that everywhere all over the Earth not just about sunlight coming in on the oceans and not just
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ocean warming but the the atmosphere is warming the planet is warming and so this is by by blocking the sunlight
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above the oceans we were artificially dampening that effect and we were reducing the amount of heat energy that
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was getting into the oceans so now by taking that away we're seeing the heat energy in the oceans accelerate and now
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the oceans are getting much much warmer the pollution was good turn out it the Paradox here is that it was creating a
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blocker for sunlight and to your point shth exactly like shouldn't we just be going back to what was normal but at the
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same time in the same system we had heated things up so this is a multifactored system uh that we're
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dealing with freedberg and I guess the takeaway from all of this is that we got to be really careful with what we do
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with the environment right well I mean let's talk about economics right so what how much real estate do you guys think
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is on the Florida coastline what's the real estate value sorry fre can you just anchor this like was it that it was
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supposed to be a category five and now it's category three when it hit land right so what happens typically When
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Storms hit land is they no longer have that hot ocean pumping energy back into the storm that keeps the feedback loop
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going so the storm cycle starts to break down all hurricanes when they hit land they start to break apart and so the
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category which measures the wind speed actually reduces this is just a natural thing that happens but this was
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a category five hurricane when it made landfall I believe it was category four so you know it was a massive hurricane
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we should not dismiss it because my understanding was Helen was Cat 4 when it like hit North Carolina but I read
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yesterday that what happened yeah what happened with Helen was it was is cat three when it hit Tampa or something is
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that not right yeah yeah so that's right but what happened when helain hit North
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Carolina it was not a cat four uh what happened is as that storm moved Inland it hit the the mountains and the first
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Mountain it hit are on Western North Carolina that area is elevated there's mountains there so when a heavy hot
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storm runs into cold mountains all the moisture dumps out it's like it runs into it and suddenly everything
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precipitates out of that storm and that's why some parts of Western North Carolina got like 18 some high some
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people measured as high as 30 inches of rainfall in a couple of hours so this insane dumping happens when that hot air
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hits cold hits a cold region and suddenly everything all that warm moisture precipitates out and dumps to
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the ground so it ran into a mountain it's effectively why everything fell out in North Carolina wa wait so you're
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saying that it wasn't Democrats who basically uh right blame me who did it I thought Nancy Pelosi cast a spell or
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something and well isn't there a lot of geoengineering conspiracy theories uh going on in your cohort I mean what's
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your I don't think so but venod wants us to be very clear that we need to we need
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to stop all this disinformation that somehow Democrats were behind that storm well there are we can assure everyone
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that it was just online that there's a ton of um geoengineering being run by government agencies to drive these think
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people aren't taking that seriously well I mean the or the origin of this though
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freeberg is people have done experiments for decades on trying to control the weather or you know alter the weather
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and and they're doing that in the Middle East by seeding clouds and creating more
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rain we saw that with the Dubai floods they said that that might have been caused by overseeding of clouds which
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they're doing there and then there have been experiments just to you know for the crazy laser people conspiracy the
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theist on X there actually have been experiments with lasers you know being shot into hurricanes and storms
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correct are you Alex Jones is that what we're doing well no I'm not saying Alex Jones I'm just saying that's the origin
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of where people are kind of building on this there have been okay so so let's just talk about the the hurricane the
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amount of for you to debunk it is what I'm doing here yeah putting particulates in clouds to accelerate
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precipitation is I mean we've done that for hundred years you know you can do you can increase the precipitation rate
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when there's already clouds that have formed but that has nothing to do with creating 200 M hour wind speed that
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requires an extraordinary amount of energy all of this energy that the oceans are like giant batteries and when
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a hurricane gets going that battery is accelerating the hurricane and the hurricane sucks up more power from the
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battery and it creates this incredibly dynamical system there is no human created Energy System that can for form
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a hurricane a hurricane is an extraordinarily powerful natural phenomenon that arises from the amount
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of energy that can come out of very very very hot oceans relatively speaking so you know that's really where these
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hurricanes are coming from now they're going to be more frequent if the ocean temperatures remain elevated as they
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seem to be and continue to be elevated and this can be a function of generally the temperatures warming on Earth
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generally the removal of sulfur dioxide generally these alino linia Cycles there's a lot of factors but it seems to
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be the case that we are having a very significant trend of continuously warmer oceans and those continuously warmer
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oceans means that we're going to have what used to be called a one in 500e storm which is what Asheville is being
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termed at one in 500 year these sorts of storm events can happen every couple years and we're now looking at one in
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100y Year events happening every 2 to three years in the United States with the uh the hurricane activity that we've
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been seeing I think a lot of conspiracy theories are built on actual experiments
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that happened this one project storm Fury I'm sure you know about was to try to modify hurricanes by putting in some
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chemicals that would uh freeze them and dull them so they're they're kind of building on break it apart yeah break it
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apart so you know there there there have been experiments here with altering weather altering hurricanes but that
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doesn't mean it's Putin Pelosi or you know the alumin so let's get let's get back to Brass talk so let's talk about
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the economics so there's there's 500 billion to a trillion dollars of real estate value on the Florida coastline
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and what used to be a one in 100 Year event the average Florida homeowner historically has been paying about 1% of
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the real estate value in insurance so now if your real estate is likely to be wiped out one out of every 20 years
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instead of one out of every 500 years the cost of insurance gets to the point that it is untenable for most people to
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pay for their insurance Florida has a stateb reinsurance provider called the Florida hurricane catastrophe fund and
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this fund issues debt to meet its coverage demands because it reinsures insurance companies in order to in
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incentivize them to come into the state and underwrite home owners you should explain the loop here which is you go
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and get a mortgage the bank says you need to get insurance if I'm going to lend you the money to buy the home so
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then a bunch of insurers need to decide that they're willing to underwrite that area and then when they give you that
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insurance they then want lay that risk off and go to reinsure is that the cycle that's right and what's happening is
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they would normally underwrite that risk they would say this is going to cost you're going to lose the value of your
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home every 100 years or every 200 years but now the models are showing because of the frequency of these sorts of
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hurricane events and the severity of the hurricane events that maybe you'll lose
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the value of your home once every 20 years or once every 30 years and no consumer is going to be willing or able
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to pay that much for the insurance on their home so the state over the last several years has had to step in and
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effectively subsidize the insurance and now the state reinsurance vehicle only has statutory liability maximum of7
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billion in a single Hurricane Season now I think they got lucky with Milton today
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but some were estimating that the Milton losses were going to be in excess of a hundred billion bigger than Katrina it's
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likely as of this morning the reinsurance um websites are all saying it's probably a 40 to 50 billion loss
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event still exceeds the state's reinsurance capacity so you can kind of think about Florida State's reinsurance
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thing being effectively bankrupt it doesn't really have the capacity to underwrite the insurance anymore so the
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real question for everyone is is the federal government going to have to step in and start to support the price of
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homes because if they don't well it's a terrible precedent to set because if you
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do it for Florida then you'll have to do it in Texas and Louisiana and missia with wild CIA Arizona there's there and
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Texas there's going to be no way to create a clear demarcation of who gets a bailout and who doesn't which
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which will mean that everybody will get a bailout or nobody gets a bailout that's right and if everybody gets a
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bailout and if you think about how systematically unpredictable at least in the southern
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states the weather is you're going to be talking hundreds of billions of dollars
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a year probably the total value of all mortgages in home homeowner mortgages in Florida is $454 billion and those people
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typically have you know a debt to equity ratio probably on the 50-day 80% range so if the value of your home dips by 25%
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because everyone starts selling their homes leaving Florida or they can't get insurance then the people that live in
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Florida most of them have their net worth tied up in their home are going to see their personal net worth wiped out
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or cut in half so it's not just an economic problem it's a social problem that now there are so many people that
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have put their entire net worth into their home the value of their home is written to a point that no longer makes
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sense given the frequency at which homes are going to get destroyed that's probably the reason why they'll have to
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do it because they'll exactly but then that calculation will have to happen for every single homeowner in every single
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state at where this is this is an issue yeah wait free are you saying the entire
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Florida coastline is no longer economically viable no it's totally viable it's just the question is what
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are you willing what price at what price will you pay 5% of your home value for insurance every year you know will you
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pay 2% 3% if the expected life of a house is 20 years then no that's not that's not viable it becomes very very
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untenable well it used to be one in 500 year now it's proba does this apply to the entire Coastline or just parts of it
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well I mean you saw that the range at which these events can happen is all over the place and the and the challenge
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is the events are getting more significant because of this warm ocean weather that we see this warm ocean
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temperature only freberg is that now people are building the first couple of floors in highrises in Miami and homes
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on stilts with concrete and with resistant you know saltwater resistant material so there is a counter to this
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so we might be looking investment in climate resilience that's right yeah so it might actually be an opportunity to
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upgrade all these homes to resistant ones uh using another set of Technologies but the bailout is really
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interesting to sacks because Florida's got a lot of Electoral College votes doesn't it like I I hate to bring this
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back to politics but you know promising people bailouts is how these politicians seem to be getting
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votes these days yeah but is anyone talking about a federal bailout I mean is that this is something you're predict
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free BR is saying is that there's a there's a pretty obvious parade of Terribles here where the question will
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have to be answered one way or the other because if you only have a17 billion reinsurance fund and there's 50 billion
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of damage somebody's going to have to come in and cover the Gap and if it's the insurance companies expect your
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insurance premiums to double or triple that's right and that's what happened in California and by the way State State
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Farm left a lot of California this is what I was going to say most of these big insurance companies have already
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done the calculus to realize that these regions are no longer profitable enough to justify the downside risk that's
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bigger problem so then the the ones that are left are insolvent reinsurers or insurers that are just funding
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short-term arbs because they know that the odds are they're going to get wiped out so they'll price gouge effectively
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so you know a different example is that here where I live in Meno Park we're not
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in a flood plane we're not in a fire region none of that stuff but in order for us to get home insurance you have to
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now go through a risk assessment and in our specific case we were like hey what should we do with our roof and they were
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like you got to take the roof off if you want home insurance we're like well home
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insurance is probably a good thing to have was it a wood Shake roof on your house it was a be you saw our house it's
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a beautiful wood Shake roof and we had to remove it and the two choices were a $350,000 like iron materials yeah or or
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like 70k for composite and it's like this is insane and yeah the cost of insurance was just egregious in the
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absence of going in one anyways we ended up getting the for most homeowners when
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the cost of insurance gets to a certain threshold you don't have budget for it you can't afford it and so that's a lot
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of why the insurers leave they'll underwrite anything at any price but they just know that most consumers can't
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afford it here's some other interesting statistics related but unrelated in the early 1900s the City of Phoenix Arizona
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averaged 5 days a year of temperatures of 110° or warmer by the 2010s Phoenix averaged during the 2010s 27 days a year
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where the temperature was 110 or higher since 2021 Phoenix average plus days 42 days and in 2024 it's been 70 days so
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far this year that the temperature is over 110 so this is affecting and so there's there's increased risks in
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California with wildfires increased risk with hurricane there are a lot of these
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factors and I have friends that work in reinsurance and in the insurance markets
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even even if you don't get affected by a wildfire or disaster when that that article was in the Wall Street Journal
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it I think it said that the the number of average days above a hundred was like hundred something yes and right and the
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Prof they profile this retired woman who is an insurance adjuster or something and the whole point of the article was
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not that her her house was destroyed or at risk but the cost of electricity has gone just absolutely skyh High even with
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solar pan even with storage you need to basically lean on the grid and the grid now just charges you an exorbitant
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amount of money and so these these folks were paying thousands of dollars a year
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so if you imagine the the trifecta you have all of this climate risk that could destroy your home you're paying an
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enormous premium for home insurance and then you're paying an enormous premium for electricity from the mainline power
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utilities it's it's not sustainable yeah and just for back FEMA manages something called the nfip
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national flood insurance plan and it's historically about 50% cheaper than private flood insurance they have 4.7
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million active policies providing 1.3 trillion in coverage but they instituted a new risk assessment system and that
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caused rates to increase and yeah it's uh because of all this the policies have decreased over the last
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couple years meaning less people have flood insurance at the same time that these things are getting worse and so
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yeah this is a really tough issue I wonder if this is an opportunity chth if you think about historically how
00:24:13
Insurance worked it worked in communities where people would help each other out and do barn raising kind of
00:24:19
events when somebody had a problem so if we just put on our entrepreneurial hats
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here if you look at the cost of insurance if a hundred different people bundled the cost of their homes together
00:24:29
put money into some sort of platform like an Uber Airbnb Marketplace and there was some management structure here
00:24:36
of self- insurance because I know some people are doing self- insurance for healthare at their companies for this
00:24:40
kind of thing do you think there's going to be a new business opportunity here exist Jason it's called a mutual and
00:24:48
those are like a good chunk of the industry are mutuals where it's uh the shareholders are the members and they
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all share the risk and the ownership the problem is those things work because have broad Geographic coverage if you
00:25:00
had to go just into Malibu and self-insure the rates would literally be the greater than the value of the home
00:25:07
right no one would pay into it so you actually if you do proper underwriting what's happened in the last couple of
00:25:12
years is all the reinsurance companies and all the insurance companies have had to reer write the rates that they charge
00:25:16
for insurance because the frequency of a disaster has gone up and the new price that they should be charging is so high
00:25:23
it doesn't matter how the capital structure is set up it's simply there's there's one big event that's going to
00:25:29
cause a big wipe out for a large number my personal belief is I think that the the real estate markets in some of these
00:25:35
places are um meaningfully mispriced and specifically what I mean is that they're
00:25:42
massively overpriced that's right because I think when you actually account for the climate damage and the
00:25:49
long-term Financial stability of the insurers and the reinsurers I don't think that many of
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the markets that have seen the crazy sky high prices I'll name two to be specific West Palm Beach and Malibu
00:26:05
so both ends of the coasts these things just don't make sense and I think people
00:26:10
view these things as Investments but on the west coast when you deal with things
00:26:13
like soil erosion and other things I think it's a there's it's a Calamity waiting to happen and I think on the
00:26:19
East Coast when you factor in the extreme weather conditions even Jason your comment about rebuilding these
00:26:26
homes in a more foolproof way doesn't it because it you won't be able to rebuild
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the entire State there's a lot of people that just can't afford it there's a lot
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of folks that will not have adequate coverage so I just think these are disasters waiting to happen
00:26:43
unfortunately yeah it's uh and saxs there's a movement right now a lot of people even of means are
00:26:51
renting their homes and so in the real estate market what are your thoughts on that just renting versus buying now
00:26:58
becoming like a something that you know people in the in the top half of homeowners or potential home owners are
00:27:06
now electing to not own their home and rent have you been mon honestly I hadn't heard that I mean the the trend that I
00:27:13
thought was happening was that you had these big funds like black rock or whatever buying up huge numbers of homes
00:27:19
and then running them to low-end homes yeah lowend or medium yeah you know to families I thought that's what was going
00:27:26
on I hadn't heard that that's the high end of the range that people were running well if you think about it like
00:27:31
there's there seems to be a cap when you have a $10 million home of what you can
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possibly rent it for and it's it's the the the prices are now making more s to keep more sense to keep your money in
00:27:42
the market or in other places and then rent I'm just hearing are are you long real estate in Florida or Coastal
00:27:50
California if you could or do you treat them differently I think they're different but Florida's like I mean I
00:27:56
don't know how you do the math on I just don't know what you do on a trillion dollars of real estate value
00:28:04
with half a trillion of mortgages when you have real exposure on loss more frequently than one in 100
00:28:11
years they're to your point they need to be repriced and how do you repic those homes in the significant level that they
00:28:17
need to be repriced without causing massive economic and social consequence that's what's that's what's kind of I
00:28:23
think challenging me in thinking about what's the path here so is a was a good thing that I sold sold my Miami place
00:28:29
last once again Sak makes a great trade pretty awesome well done SX top ticked it again well done Saxy poo just like
00:28:40
beep I really love I love that house on the you love that house where do you think I stayed when I was in town you're
00:28:47
so selfish I lost a I lost a place to stay I mean the yacht access alone being able to get out on the bay and get on a
00:28:55
boat the ski do all this great stop H all right let's uh let's keep the freeberg train going here huge news
00:29:03
Alpha creators just won a Nobel Prize in chemistry two members of Google's deepmind AI research team Demis hassabis
00:29:11
and John jumper received this year's Nobel Prize in chemistry they both work for Google's
00:29:18
deep mine as you know and freeberg again all in getting there first explained what Alpha fold was back on episode 14
00:29:27
in December of 2020 that was almost four years ago freeberg maybe um you could explain did
00:29:34
we did we predict that they would win the Nobel Prize at the time I believe you did we'll go check the receipts
00:29:40
using search Eng it was it became it became much more likely that they would win the Nobel after they won the
00:29:46
Breakthrough prize I mean just to just to point this out but yeah yeah shout out Yuri M shout out Yuri and Julia and
00:29:54
Julia because when those guys won that award for 2023 and you you heard the extent of
00:30:03
what they've done it was almost like obvious that they were going to win a Nobel after the fact so I think the
00:30:09
really interesting thing is actually in this community I think the Breakthrough prize is actually meaningfully more
00:30:15
relevant and a positive directional indicator to breakthrough science well it's kind of like winning Sundance or
00:30:21
can you win the Palm Door you become a favorite to win at the Oscars right in the Academy Award so that's actually
00:30:27
interesting the Regional or more industry Centric award could lead to the next one so freeberg just explain to us
00:30:34
why this is so important before we I just think it's much more rigorous than the Nobel I think the Nobel can be a
00:30:39
little bit gained I think oh interesting okay what do you think freeberg explain
00:30:43
to the audience why this is important and and what's transpired we talked about it four years ago there's been a
00:30:50
long challenge in Biochemistry on understanding or predicting or visualizing the threedimensional structure of of
00:31:00
proteins because remember proteins are produced by long chains of amino acids and those amino acids are kind of create
00:31:09
like a bead beaded necklace and then the whole necklace collapses on itself in a
00:31:13
very specific way and that three-dimensional molecule that big chunky protein does something
00:31:18
structurally physically and so trying to understand the shape of a protein is really hard I mean we've used kind of
00:31:25
X-ray Imaging systems to try and identif it and tried to build models to identify
00:31:30
how does that quote protein folding work how do those amino acids collapse on each other to create that
00:31:35
threedimensional construct and if I don't know if you guys remember in the early 2000s there was a Stanford folding
00:31:40
at home distributed computing project do you guys remember this yeah it would use
00:31:45
people's machines and extra CPU like the set at home project to precisely yeah exactly right yeah so it's like it ran
00:31:51
on the background of your computer it used your CPU Cycles when you weren't using your computer and it tried to
00:31:56
model protein folding and so this has been a a problem that folks have tried to tackle with compute for decades to
00:32:03
figure out the 3D structure this is so important because if we can identify the 3D structure of proteins and we can
00:32:09
predict them from the amino acid sequence we can print out a sequence of amino acids to make a protein that does
00:32:16
a specific thing for us and that unlocks this ability for humans to create biomolecules that can do everything from
00:32:22
binding cancer to breaking apart pollutants and Plastics to you know creating entirely new molecules to
00:32:31
running in some cases like what David Baker did at University of Washington he shared the Nobel Prize creating micro
00:32:36
Motors mini motors from proteins that he designed on a computer and so this becomes I think this great like big Holy
00:32:43
Grail in Biochemistry and the alpha fold project at at Deep Mind inside of Google
00:32:48
solved this problem and and by the way since since then they've come out with Alpha fold 3 they've launched a drug
00:32:54
Discovery company called isomorphic Labs where they're basically basically predicting molecules that will do
00:32:59
specific things for a Target indication and then they use the alpha fold models to actually design and develop those
00:33:06
molecules and there have been literally dozens of companies that have been started since Deep Mind was published
00:33:13
and probably several billion dollars of capital that's gone into companies that are creating new drugs creating new
00:33:18
industrial biotech applications using this protein modeling capability that was Unleashed with Deep Mind a number of
00:33:24
years ago so it really has transformed the industry it'll be a couple years before we see a transform the world but
00:33:30
uh it's it's it's an exciting kind of thing yeah not to um virtue signal here but those are plus-size proteins now
00:33:36
freeberg they don't like being called chunky you got to call them plus-sized proteins plus- siiz proteins yes one one
00:33:42
really difficult technical question for your free B is there any way for you to take this amazing breakthrough uh and
00:33:48
make saaks interested in it is there any possible Vector here for it relate to Sachs and get him off his BlackBerry
00:33:57
right now Blackberry I think he's playing chess with TL and JD Vance is watching them
00:34:03
play chess I think that's what's going on right now it's really hard I mean the poor audience here is watching saaks
00:34:08
looking down all right let's keep this train moving here enough of the shenanigans anyway congrats to the teams
00:34:15
the very I mean it's just great and David Baker at the baker lab in University of
00:34:20
Washington also breakthrough Prize winner yeah what's interesting to me is like these two nobels these guys but
00:34:28
also Jeffrey hinton's you know you're really seeing now the convergence of the hard sciences and computer science
00:34:36
totally in a really meaningful way and I think that that's so interesting and cool I think in the group chat chth you
00:34:43
had an interesting hey maybe there should be a computer science award for you know a Nobel computer
00:34:49
science award and uh I actually think it's the opposite now which is that it's amazing to see folks using computers
00:34:58
to improve our understanding of the Natural Sciences and I think that that's a really great place to be so what Demis
00:35:04
and John and David are doing in the life science is amazing What Jeffrey Hinton you know did you know TW 30 and 40 years
00:35:11
ago and 20 years ago in terms of training deep neural and that's also really amazing in related new all
00:35:17
computer based yeah all computer based and in related news Benny off just nominated himself for excellence in CRM
00:35:23
management so congratulations to Benny off on nominating himself for a what is that com a why are you attacking Benny
00:35:31
off a the audience what did he do wrong it's a joke they're just jokes have you not learned anything from the
00:35:41
people that attack you it's not an attack it's a joke Ben off has done so much for philanthropy just ask him if
00:35:49
you dude he's doing the best can doing a great job how I got Dr with exactly can
00:35:55
you people have a sense of humor about no but it's not even it's not even funny if you had said something else I mean
00:36:02
okay give me a give me a funnier nobell go ahead go runs a 300 billion market cap he's chomping the bit to come back
00:36:09
on the Pod and explain why AI is not going to disrupt SAS really oh we see he wants to be back on the he's texting me
00:36:16
he wants to come on we'll check in we'll check in in a hundred billion dollar sh he had his chance that chance is
00:36:23
closed he shot his shot and it did not land that door was when he insulted our guests about not being able to afford
00:36:30
dis when he called you all in people pores oh my God now you're piling on anybody coming to dream Forest 2025 okay
00:36:38
let's move on sorry anyways leave Benny off alone J it's like leave Britney Alone that famous meme leave Benny off
00:36:48
alone so how many new enemies do you want to create I just just jokes they're just
00:36:55
jokes this when you thought was running out of feuds you know I'm not in the feud with anybody I'm making stupid
00:37:02
jokes the reason people tune in is because you laugh and learned did you guys see that that tweet that uh
00:37:09
somebody suggested throwing a conference with all of J Cal's haters Jason con jcon jader jader convention what is it
00:37:21
called Jers Jers yeah J yeah J haters Jers yeah I'd like to shout out my Jers they're just jokes folks I love you Mark
00:37:31
I'm Penny off oh come on the Pod zck I think somebody could launch a successful Summit just doing that it's
00:37:38
like it's like a readymade audience and they're clearly passionate clearly passionate all the YC Founders
00:37:45
will be there keynote day one Palmer lucky keynote day two David Sachs I think it would rival the all in
00:37:55
Summit in terms of The Passion of the fans three of us would show would be so devastated I think it's
00:38:04
hilarious i' have to Benny off I like Benny off what I don't I'm trying to make enemies with
00:38:11
Benny off he's just got to have a sense of humor oh my gosh Megan Kelly special chat Megan Kelly and fmer lucky wait
00:38:20
does Zuck hate you too why did zck oh my God Jal was just so I was brutal to Zuck
00:38:25
in the early days brutal yeah why well he just anyway we'll get to it later but you're
00:38:29
right like you know throwing a conference for Jay haters would just be like a ready made Jers Jers that is an
00:38:35
underserved and passionate demographic it would be bigger than passionate demographic just just look at Sax's
00:38:42
replies Community with shared values hey man if I can get 25% of those ticket sales I'm in let's go all right let's
00:38:50
keep the train moving here we have an update on the doj's antitrust suit with Google looks like
00:38:57
they're going for the breakup as chamath predicted you remember the Bloomberg report back in August we covered it on
00:39:06
episode2 Google is found liable for maintaining a monopoly in Search and digital ads now the doj is
00:39:13
working on the remedy right okay they're guilty so now comes time for the remedy
00:39:18
and the doj is quote this from Bloomberg considering asking a federal judge to force Google to sell off parts of its
00:39:26
business and according to this filing the doj is specifically considering structural remedies that would prevent
00:39:33
Google from using products such as Chrome Google Play That's the App Store on Android and Android itself to
00:39:40
Advantage Google search 32-page document released by the doj Lays out several options and we'll go through them and
00:39:47
talk about them here the obvious one terminating Google exclusive agreements with Hardware companies like apple
00:39:54
they're the default search engine there for 30 or 40 billion a year Samsung that's a layup uh separating Chrome and
00:40:00
Android my God that would be drastic ripping that out of the Google ecosystem prohibiting certain kinds of Data
00:40:07
Tracking that's a layup as well or other behavioral and structural changes for the company I'm going to pause there
00:40:13
freedberg and get your thoughts on this as a former googler and you interviewed Sergey at the summit but I don't think
00:40:20
we talked to seray about this because obviously he would not be able to talk about it so what are your thoughts here
00:40:25
on a potential REM I think we've talked about this I mean look I've shared in the past my belief
00:40:33
that companies that are big that have excess Capital that then invest that excess capital in R&D can be a net
00:40:39
benefit for all of us look at Bell Labs Bell Labs had a monopoly on through their association with
00:40:49
AT&T with developing radar microwave the transistor integrated circuitry information Theory
00:40:57
everything that is the basis of the internet Computing even nuclear technology and so on it's because they
00:41:04
had this extraordinary Capital flow from the scale of the business and they were
00:41:08
able to invest in R&D similarly Google Acquired and invested for many many years in Deep Mind and we just talked
00:41:15
about how demison team won the uh uh the Nobel Prize for the work that they did and they by the way published the
00:41:22
protein structure for 200 million proteins for free out of that service I just want to zoom out for a minute and
00:41:29
talk about the fact that this isn't about you know whether Google has a monopoly in search that prohibits
00:41:35
competition or in ads that prohibits competition but are do is it really worth penalizing any company that's big
00:41:44
particularly do we lose the benefit of those big companies investing in technology that pushes us forward Google
00:41:49
also invested in whmo for years and years and years which arguably spurned and drove investment from many other
00:41:56
companies in self-driving technology and if Google hadn't done that would self-driving have taken off the way it
00:42:01
did I don't know same with Kitty Hawk and Larry's investment in EVs and that that spawned a lot of evall investing
00:42:08
and similarly if you think about Amazon and their investment in AWS where they were burning cash for many
00:42:13
years that turned out to spawn arguably a lot of interest and investment in cloud and so I I don't think that these
00:42:21
big companies are bad just because they're big I think we should take apart the monopolistic antitrust
00:42:27
actions and behaviors that they take and then identify ways to remedy those behaviors verus just saying or that's
00:42:34
big should be taken apart because there is a tremendous benefit to be gained from the R&D dollars that they all put
00:42:40
into things that you know move the whole industry forward and I think that leadership's important to need it
00:42:45
otherwise if you got a bunch of startups that are trying to get $10 million checks from VCS I'm not sure they're
00:42:50
going to build AO and I'm not sure they're going to build Amazon Cloud and I'm not sure they're going to build a
00:42:55
deep mind you know protein folding company and publish it for free so I don't know that's just my point of view
00:43:01
onam what's the likely how we should think about this stuff jth you kind of nailed this one pretty good with these
00:43:07
predictions tell us we'll be sitting here five years from now what will have occurred unfortunately not what freeberg
00:43:16
just said it'll be the opposite there'll be some form of forced remedy I'm sympathetic to freeberg argument I don't
00:43:23
think that it's really a good thing in the end because I do think there are some incredible
00:43:28
examples of Google specifically reinvesting in a way that's really added value in the
00:43:35
world I think the problem though is that the Technology Innovation cycle has gotten too elongated so you're not
00:43:46
seeing creative destruction be the natural force that keeps all of these companies in their own swim lanes and so
00:43:54
they are allowed to become two and too profitable and I think it becomes an obvious Target for politicians I think
00:44:04
that's a really good observation there about the timeline of this because if you look at this I have started now and
00:44:13
I know many people are starting their search Journey on Claude and chat GPT every day I'm doing 30 40 50 queries and
00:44:20
follow-ups per day I force my entire team to do that as well and so just as there's an actual viable competitor to
00:44:29
Google this action has reached I don't know the halfway mark this is going to wind up being completely meaningless
00:44:36
saxs if chat GPT does build a viable competitor coexist that siphons off search am I wrong
00:44:46
here well it is ironic that frequently the government takes actions on these monopolies at precisely the moment
00:44:54
they're subject to the greatest disruption totally same thing happened with Microsoft in a way but it was still
00:44:59
a good thing that the government acted when it did because there was a risk of Microsoft porting over its desktop
00:45:05
Monopoly into this new era of the internet I think it's still a good thing to be looking at breaking up Google I
00:45:10
actually think that would be good at the end of the day it might even be good for
00:45:13
shareholders this thing should be probably three separate companies like we've talked about in our previous show
00:45:18
but it is true that Google is facing the most existential threat to its search Monopoly and it is Monopoly in the form
00:45:26
of open AI at this point in time I have one final thought here and piece of advice
00:45:32
for Sergey and the team over there and and I told Sergey directly they have to get good at making apps to go use chat
00:45:40
GPT you take out the app and it's a wonderful beautiful experience when you go try to figure out how to use Gemini
00:45:47
it's like shoehorned into search results and then it's like some subdomain that's
00:45:51
why people aren't using it Go by The Domain in chat.com and make a dedicated app just for and I kick ass you're 100%
00:46:00
right you suck at apps we said this when when you asked about the bare case of open
00:46:07
AI if the doj is going to go after Google and by the way the interesting thing Jason and I mentioned this to you
00:46:15
is that in the same article that floated the trial balloon about this remedy of a
00:46:20
Google breakup the headline in the Wall Street Journal which I think was very purposeful said Google and meta so I
00:46:26
think that they have given their brothers they being the powers that be at Washington will probably want to take
00:46:33
a run at both of these companies they'll start with the one that they think they
00:46:37
can disassemble the quickest and then they'll go to meta afterwards my strong advice to meta and
00:46:46
Google is if this is going to happen you got to go out kicking and punching and fighting and scratching and
00:46:56
I think the most thing is what you just said Jason which is you are the front door through the
00:47:01
internet and there is this completely new emerging technology and where is the same
00:47:09
response to chat GPT that you had to X or that you had to Snapchat or that you had to Tik Tok
00:47:18
because if it's going to happen it's going to happen and then you might as well just go for it yeah build the apps
00:47:24
make them kick ass make the chat G PT alternative and get it to billions of people
00:47:31
yesterday that would be the most logical Game Theory thing to do to build up a pool of users that you will rely
00:47:42
on when the doj tries to come with some consent decree or whatnot so this is the
00:47:48
time to build up the Assets Now as aggressively as possible yeah and uh selling YouTube would be the ultimate I
00:47:55
know that the ad Network you pointed out free bar are connected but if they distributed if they SP out I'll give you
00:48:02
I'll give you something about the ad thing can you imagine $500 billion going into Google's coffers in YouTube shares
00:48:09
they have 500 billion in cash chamal I had a I talked to a company he a CEO of a of a public consumer facing
00:48:18
company and this was in the context of some 8090 stuff and he said that he and and two other
00:48:27
CEOs the three of them you guys would all know these are very big companies the three of them combined are
00:48:33
particularly large and they said they've had multi-year road maps to try to build
00:48:39
a reasonable set of tools in advertising and it's been impossible and partly why is that the
00:48:45
the tools that the big folks offer are so good that they just cannibalize and run over the entire market and so what
00:48:52
they hear from CMOS is we would love to advertise on your company your site but a your tools are substandard and B even
00:49:00
though your inventory is cheaper you just don't give us the same scale and breath that we get in these other big
00:49:06
places I'm not saying that that's either right or wrong but through the lens of probably what the doj sees is when a lot
00:49:14
of these folks write letters to them talking about what they're going through this is what they're saying and I
00:49:20
suspect that if you could actually have a more fragmented Market in some of these key Market markets it's going to
00:49:27
be a little bit easier for these smaller companies to have a business now you could say well tough luck you tried and
00:49:33
you couldn't build it I get that argument and I and I think that that at some point that is legitimate but the
00:49:37
problem is if you're public and you're trying to make your company profitable what do your engineers want to work on
00:49:43
they want to work on consumer facing forward features and so what always falls off the list it's the stuff at the
00:49:48
end the tech yeah and so anyways it's this recursive negative Loop that a lot of these other companies are in in the
00:49:55
shadow of these big companies that I think is going to cause the doj to try to do something you know this is a great
00:50:00
setup for m&a it's a great setup for IPOs starting to look like and this is a multi- Administration case that's been
00:50:08
going right I think this started under Trump went into Biden and is now going to continue on to Trump or or
00:50:14
Harris so what are your thoughts here Sachs well in terms of the political environment for m&a next year yeah yeah
00:50:22
I mean so obviously it depends which administration's in power a lot of Democrats you know prominent
00:50:29
Democrats in Tech like Mark hubin or Reed Hoffman have been making the case that if kamla is President she's going
00:50:35
to be much more hospitable and friendly towards m&a and they've been saying explicitly that they want Lena KH fired
00:50:43
well in response to that AOC just came out and said we're gonna have a Throwdown if you do that so I don't go I
00:50:50
would not expect a substantial difference or Improvement in the in the regulatory permissiveness uh towards m&a
00:50:59
if uh if we have a democratic Administration if that if you have Trump in office next year I think that there
00:51:07
there will be an opening up of of m&a I think the Republicans have their own issues with big Tech but those issues
00:51:13
tend to revolve around censorship and bias and search results and llms things like that as opposed to bigness per se
00:51:21
so I think it will be easier to get m&a done next year if you have a republican Administration absolutely I am going to
00:51:28
be printing money in a trump Administration it is going to be obscene how many m&a deals and IPOs are going to
00:51:34
occur there is such a huge backlog but I do think there I do think the Democrats want to get this moving as
00:51:41
well and I I was talking to Reed Hoffman uh and you and Peter teal in the Illuminati meeting and they voted 190
00:51:48
to2 to replace lenina Con in the Illuminati meeting chamat why didn't you make the Illuminati meeting last week
00:51:54
I'm shocked that you weren't there I'm not I'm not inv to that people don't know that you're being fous Jason oh
00:52:00
really they don't understand that I'm joking about the Illuminati they often don't they often don't well I'm sorry to
00:52:06
the low IQ listeners who don't know that the Illuminati is not real oh now now you're
00:52:12
insulting the audience no I'm insulting the ones who believe there's an Illuminati he's trying to sell tickets
00:52:17
to the Jad trying to sell tickets to the jader ball with buck nasty Zuck nasty J cow is
00:52:25
the biggest hater in the tech industry you ever see the haters ball sacks I have not SE Chapelle show no Cham it
00:52:34
looks like between the time we mentioned it on the Pod it's it's actually happening here it is the jader ball is
00:52:39
happening there it is lenina David Sach wait why am I there well because you're a headliner you're you organizing I
00:52:47
think you're the host I'm gonna be a keynote you're the I'm the I'm okay wow I'm the MC there look there's there's
00:52:54
Zuck nasty and there's Palmer lucky you guys don't know this bit from Chappelle the haters ball from Chappelle
00:53:01
oh my God it's the funniest bit on shabelle show it's literally I mean I saw a lot of Chappelle Show I never
00:53:08
remember God just show the real picture Nick um on the Chappelle show they have all of these pimps who have a yearly
00:53:16
convention which is their player haters I've seen this I've seen all they do is sit there with like a toothpick in and
00:53:22
they hate on each other make fun of each other I've seen it is the Fest bit in the history of the Chappelle show all
00:53:29
right let's keep the train moving here CRV is giving back or maybe not calling down 275 million from their LPS Charles
00:53:36
Riv Aventure shout out to my pal George Zachary and Greek brother from CRV historically they invest in early stage
00:53:43
startups they did door Dash air table Twitter back in the day they had two funds that they raised back in 2022
00:53:49
billion dollar early stage fund and a 500 million growth fund sometimes people call that an opportunity fund or a
00:53:55
Select Fund the New York Times reported CRV is going to give back about half of that 275
00:54:00
million to investors or technically probably not call it down the four Partners at CRV gave an exclusive to the
00:54:08
New York Times so either getting ahead of this story or uh maybe you know who knows what the motivation here is but
00:54:14
the reason they gave is that the market conditions for late stage have worsened dramatically and that the valuations are
00:54:20
still too high yes the rent is too high and that there aren't any exit options as we just talked about with the
00:54:27
administration no IPOs no m&a and that VC map doesn't work in the late stage so I'll just stop there there's a bunch of
00:54:35
other notes here obviously this isn't the first time this has happened I think Founders fund cut the size of its eighth
00:54:40
Fund in half from 1.8 billion to 900 million they didn't actually give the capital back to VCS like they're saying
00:54:46
CRV did here again I'm not certain if that's what's happened or not they put the extra 900 million into its ninth
00:54:52
fund if they decide to raise that which I'm assuming Founders fund will if you have any thoughts on this I I guess
00:55:01
Trend we got two stories here so I don't know Trend P did this and he gave back quite a large piece of his fund a couple
00:55:08
of years ago and then CRV just did it I I want to make sure I get the citation right I think it was Thomas lefont at
00:55:15
kotu who said this it was really powerful it made a huge impression on me which is that the NASDAQ creates about
00:55:21
$800 billion of Enterprise Value a year and he brought that up in the context of
00:55:28
private markets have to exceed that in order for it to be a real viable alternative to just owning public
00:55:35
indices and so if you factor in il liquidity risk and the duration you have to probably generate I
00:55:42
don't know a trillion $1.2 trillion dollars of Enterprise Value in private Tech every year that just seems like
00:55:49
it's really hard to do where is all of that value getting created so I think that Venture need to go through a phase
00:55:57
where it rationalizes you know this is sort of what I said at David's LP day which is I think that LPS have made a
00:56:04
couple of very big mistakes and I think the biggest mistake that they've made is by smearing too
00:56:10
much money across too many General partners and I think if you had to redo it a it's probably a lot less money in
00:56:18
total but B and the example I gave there was instead of giving $50 million to craft and $10 million to somebody else
00:56:25
you're better off giving $60 million to craft and not even having that other GP because that GP makes everybody's life
00:56:32
complicated they overpay they Mis pay they're probably not supposed to be a GP in the first place and so they force
00:56:38
returns down and then when you contrast that again to a public market that is systematically creating $800 billion
00:56:46
dollar of Enterprise Value a year this is an incredibly tough game and it's getting much much harder so I think that
00:56:53
if you just take a step back these are the right things to do because you're much better off having a smaller pool of
00:57:00
capital that you can concentrate into the things that matter you're probably better off having smaller teams versus
00:57:05
bigger teams and you're probably better off trying to forge LP relationships where
00:57:13
they're not doing 50 fund Investments because it just makes the entire industry lag public liquid Alternatives
00:57:22
and I think that that's just not good peanut butter getting spread a little bit than there any thoughts uh freeberg
00:57:28
on this trend if we can call it that or is this like maybe they're reacting right as the market is changing and
00:57:37
valuations are getting more reasonable and the exit opportunities are getting more reasonable it seems like this was
00:57:41
the right reaction two years ago but maybe it's the wrong reaction now what do you think freeberg for a venture firm
00:57:47
to return Capital they need to have at least one or two big Winners and so if that winner needs to be a 10x or 20 X or
00:57:56
30X of the fund because most of the investments in the fund are not going to work you need to be able to enter at a
00:58:04
reasonable price and there needs to be enough opportunity relative to the capital trying to invest in that
00:58:10
opportunity out there for to make sense so in a market where there is excess Venture Capital where valuations are at
00:58:17
a premium and where you don't see the exit path the m&a or the IPO events that make sense that you can actually realize
00:58:24
that model you should take less capital and make fewer Sher Investments and I think that that's what some folks have
00:58:33
realized they don't want to be chasing um you know highly valued inflated opportunities and they don't want to be
00:58:40
putting Capital into tier b or tierc opportunities just for the sake of deploying Capital this is a really
00:58:47
interesting moment where you can kind of see who are the the right folks in terms
00:58:52
of thinking longterm in Silicon Valley longterm in terms of building an investment practice in private
00:58:58
Venture and maybe who are folks that are trying to build their AUM stack and folks who have done reasonably well like
00:59:04
Founders fund has probably the most exceptional track record in Silicon Valley as a venture
00:59:09
firm they are very cognizant of the market conditions and I think that they're being very smart by the way the
00:59:15
other thing I've heard from LPS is they're similarly trying to find more concentrated Capital themselves so
00:59:22
they're trying to put more Capital to work in fewer managers and so there's a real weat from the chaft moment
00:59:30
happening in Silicon Valley venture right now what I think a couple years ago was hey everyone's going to go do a
00:59:35
startup a few years ago became everyone's going to go do a venture fund and now I think the froth that has
00:59:40
occurred because of that is being cleared out and to just explain this math before I get Sax's thoughts on this
00:59:46
if this was a $500 million fund let's say they were putting $25 million into each we'll take management fees out of
00:59:54
it $25 million into each opport Unity at a billion dollar valuation they would own 2 and a half% obviously of those
01:00:00
firms they need to get probably a 30 billion power law exit of 30X ax in order to just return the fund there'll
01:00:09
be some dilution obviously along the way that's why it's not 20x and the number of companies that go from a billion to
01:00:16
30 billion per cycle is incredibly low Uber coinbase Airbnb I it's a really short list huh
01:00:25
sax and recent history I mean look just just go back to the crb thing you said at the outset of the
01:00:33
conversation that this was either a growth fund or an opportunities fund that makes a really big difference
01:00:39
explain please because well an opportunities fund typically exists to back up your winners in other words if
01:00:47
the Venture fund is producing some big Winners the opportunities fund exists to deploy more Capital into those into
01:00:54
those companies as opposed to growth fund which is you'd be underwriting brand new companies from scratch
01:00:59
typically an opportunities fund is limited to companies that you're ready an investor in through your Venture fund
01:01:04
so that makes a big difference I mean if CRV has a billion dollar Venture fund and only a $500 million opportunities
01:01:10
fund it may just be the case that they don't need all that Capital to back up the winners they can do their pratas out
01:01:16
of the main fund so I I suspect that that might be what's going on I actually think this is a pretty good time to have
01:01:23
a growth fund a lot of the the yeah well because a lot of the uh crossover Capital has left the ecosystem okay a
01:01:30
few years tigers and that sort of cohort yeah well tiger and and um SoftBank are still around but there are
01:01:39
other very large investors hedge funds and so on who had come into the ecosystem with billions of dollars a few
01:01:46
years ago and now they've left and some of those funds that you're talking about
01:01:50
like tiger used to be $10 billion funds now they're $2 billion funds right they've been right sized they're not
01:01:54
violently doing I mean the tiger deals my understanding was they weren't joining the board in a lot of the cases
01:01:59
and they were Outsourcing the diligence and that was a pretty violent Pace I don't know what this is the best time in
01:02:05
probably five years to have a growth fund H interesting but to to your point about the size of the Venture fund the
01:02:10
bigger the Venture fund the bigger the winner that you need to make that payoff obviously yes and so because of the
01:02:16
power law so to take an example I don't know let's say you've got a billion- dollar Venture fund let's say that at
01:02:23
IPO you own 10% of whatever that that winner is and because of the power law your your fund
01:02:30
performance is really determined by your best outcome right yep so in order to take a$1 billion Venture fund and say
01:02:38
deliver a 3X you know so three billion of returns and your best company you own 10% of that implies you have a $30
01:02:46
billion winner in that fund and there are precious few outcomes where you have a $30
01:02:53
billion IPO right yeah I me very count them on two hands the last cycle like I just did you got you got Uber you got
01:03:01
Robin Hood you got coinbase strike will eventually come out you got SpaceX well that was two cycles ago so I mean yeah
01:03:09
you're going to need to have a meaningful ownership position and a massive company in order to make a fund
01:03:13
that big payoff the the data that I think LPS look at shows that smaller Venture funds tend to perform better for
01:03:20
this reason 50000 million funds so yeah I personally want the pressure of a billion dollar Venture fund that would
01:03:28
be really hard as a five or $600 billion Venture fund you kind of need to have or
01:03:35
or want to have like a decacorn outcome to make that a great fund but to have to
01:03:40
have a $30 billion plus outcome it's it's even more difficult moving on Pew just published uh some really
01:03:46
interesting research on Tik Tok uh if you don't know the Pew study they've been doing it for decades it's very well
01:03:51
respected um and uh bipartisan or nonpartisan 4 in 10 us adults aged 18 to 29 are now regularly getting their news
01:04:00
from Tik Tok here's some charts for you to take a look at as you can see the younger generation is really spending a
01:04:07
lot of time on Tik Tok and getting a lot of their news there I know this because
01:04:11
uh yeah I I've talked to a bunch of kids about this and people that use Tik Tok 52% are regularly getting their news
01:04:19
from the platform and that number has skyrocketed compared to other social platforms take a look at this chart
01:04:26
here's X 59% of people say they get their news at X it's really a news platform so that makes total sense you
01:04:32
look at Facebook it's you know 48% right now Reddit 33% YouTube 37% in 2024 Instagram 40% but Tik Tok 52
01:04:43
up from 22% so it's no longer just dancing and this is the reason I think many people in the government were
01:04:50
concerned about the attack Vector that the CCP would have in the United States they still control the company for
01:04:57
services like Snapchat LinkedIn and WhatsApp and next door it's below 20 below 30% get their news from there
01:05:05
there sure truth social there uh sacks 57% of people get news there and Rumble 48% so what what's your takeaway from
01:05:12
from this just sax looking at it and this impact that Tik Tok has is this concerning on a
01:05:18
national security level since the algorithm is a black box and you could tweak it if you really wanted to to
01:05:24
Really change sentiment and um young people are obviously very impressionable on this platform and they're big users
01:05:31
of it well I thought there was other data in the study that should calm people's fears that Tik Tok would
01:05:38
somehow be used as a political weapon so in the same survey you're talking about
01:05:43
95% of adults that use Tik Tok say they use it because it's entertaining so that's the main reason people use it and
01:05:50
only 10% of accounts followed by us adults post content related to political social issues okay that's posting and
01:05:57
the main reason right sure yeah but so so basically 90% of the accounts that get followed aren't even posting
01:06:04
political or social issues they're there for entertainment as people watching Dance videos as people yeah watching I I
01:06:12
mean I the main thing I use it for is to watch wrestling highlights so uh you're
01:06:18
a wrestling guy yeah I'm a wrestling fan what yeah you're into this Kabuki theater of wrestling this new
01:06:27
information I get my WWE on on Tik Tok because I don't to watch the whole yeah favorite are you a Hulk Hogan guy are
01:06:34
you an Undertaker guy Vince McMahon I mean Jimmy Jimmy Superfly snooker who are you Andre is I know all
01:06:42
those names but uh I like I also love the Road Warriors uh Ultimate Warrior I loved I I was a huge wrestling fan that
01:06:49
was the one thing that my dad and I bonded over we would watch wrestling every Saturday did you ever watch the
01:06:56
the specials on Saturday night like the oh yeah oh those are so that that was the era of Hulk Hogan for sure Saturday
01:07:03
night's Main Event Randy Savage Savage Savage is great Savage yeah I mean look my my all-time favorite was Stone Cold
01:07:10
Steve Austin Stone Cold is great I marked out the hardest for Austin he was he was anti-woke before antiok became a
01:07:16
thing totally this is crazy you guys are into wrestling I'd say flare number two for
01:07:24
me wait wait hold on have you gone to a wrestling did you only like the WWF at the time or did you like the NWA as well
01:07:31
that their moments when when Hogan turned heel and joined the the uh was it the NWO that was like a big moment I'm a
01:07:40
big uh Andy Kaufman wrestling fan that was my only interest is when when Andy Kaufman came in
01:07:45
there and uh trolled them but have you Kaufman yeah that well that was like in the 1970s wasn't it or it was the late
01:07:54
his 80s remember he was on with Jerry Waller and he he comes to a wrestling match Sach in the South and
01:08:03
was where I grew up in my hometown of Memphis right so he goes there and he gets in the ring and he says all of you
01:08:10
rednecks I want to show you some new inventions this is called soap and this is called a washcloth and you used it to
01:08:19
clean yourself and he's like just mocking the southern accent and Jerry law remember Jerry laa smacks him and on
01:08:28
Letterman oh it's the greatest it was a huge deal I mean where I grew up because
01:08:32
that this was like on the local news yes when I grew up in Memphis there was no professional sports teams okay all we
01:08:39
had was the Memphis State basketball and and uh wrestling every Monday night at the mids South Coliseum that was it that
01:08:47
was like professional sports in Memphis you also had probably like some state fairs or you know like best goats best
01:08:53
sheep or something Lawler was so popular that he could have been elected mayor in
01:08:59
fact I think there was talk at one point of him becoming mayor wow I mean the intergender champion Andy coff did you
01:09:06
guys like mouth of the South Jimmy Hart oh yeah course he was amazing he was like the main heel manager for a while
01:09:14
yeah okay this is before the WWE took over I guess it was called WWF back then but they were all these little Thoms and
01:09:20
kingdoms and Midsouth wrestling was like one of those kingdoms and Lawler was like the king of it and then you had all
01:09:26
these guys come in and out and wrestle fredberg you ever watch wrestling and what do you think of this Tik Tok survey
01:09:34
I don't watch wrestling okay very good and Tik Tok survey anything where are you no any thoughts looks like they
01:09:41
gathered some reasonable data okay there you go there's there's your hard point my point was that it's mostly an
01:09:47
entertainment app where people go to watch Dance videos wrestling Clips style influencers and so on and I think that
01:09:54
this idea that it's somehow a propaganda tool around you know programming our youth I think that's a moral Panic
01:10:00
that's been exaggerated what do you think the odds are that Tik Tok is hacked to allow you to passively listen
01:10:07
even when the app is not being used zero you think it's definitively zero no like 5% I think that's very unlikely
01:10:15
yeah because some someone said that that was that was a there was some code that
01:10:23
enabled that in the early version of the app and then some other people audited it and they said they did not find
01:10:27
evidence that there was any technology and Apple's got a very good audit system for this did those same people audit
01:10:33
WhatsApp and then it turned out that it was they passively listen yeah does WhatsApp passively listen yeah it's one
01:10:39
of the it's one of the most well-known breaches well maybe they do maybe it's maybe I'm 100% certain that the CCP is
01:10:45
using it because they the people have tracked already journalists using it so if they've already done it it's 100% now
01:10:51
I don't know about the passive listening but any thoughts on 50% Plus young people getting their news here shamat
01:10:57
any news on that I mean obviously we don't have evidence that it's being used currently to manipulate people but it's
01:11:02
over 50% of young people are now getting their news there or say they're getting
01:11:06
their news there I bet more than 50% of young people are getting their news from
01:11:10
podcasts and those podcasts get chopped up and clipped and then people watch them on Tik Tok yeah for sure I bet
01:11:15
that's how it's happening there are a lot of people who think this show is a Tik Tok show and they don't know it's a
01:11:21
big show yeah we'll have to prepare for a bre New World in the following way there was an article I think it was in
01:11:28
the Wall Street Journal that said that Russia and Iran were paying low-level Street criminals to create chaos okay
01:11:37
and I and I read that article and I thought okay well what does this mean if you actually extrapolate this which is
01:11:43
that the hot Wars are very complicated not worth doing these disruptive fissures are the better
01:11:53
way to sew chaos and it occurred to me then that tying this back to something that we saw
01:11:59
before it does make sense for a lot of folks to sponsor a lot of longtail content that say a lot of different
01:12:05
things I think that that just is pretty obvious and so I think that if you put these two ideas together it stands to
01:12:13
reason that a lot of people will be paying influencers a lot of money to create all kinds of content that is
01:12:22
specific to a perspective that they have and then on top of that if you can algorithmically amplify one over the
01:12:27
other you know you're you're going to have issues is it the biggest issue in the world probably
01:12:34
not probably wouldn't swing an election but it would cause chaos and we just had
01:12:38
the the southern district of New York Target that Russian Russia Today was giving $10 million to four
01:12:46
podcasters didn't even know they were getting paid by the Russians they just picked them because they like their
01:12:50
opinions and they gave them 100,000 an episode to to promote Pro Russian positions if the Russians were actually
01:12:57
doing it it's the stupidest use of $1 million ever because great those podcasters already had their own
01:13:04
channels they're already putting out lots of content and this other content is a drop in the bucket I think Jamal
01:13:09
the issue with what you're saying is just there is so much content out there already people create it for free people
01:13:15
create it you know because they're they have a career in it there's a whole long
01:13:19
tale of influencers there is so much content out there already through podcast through websites it's all being
01:13:26
chopped up that trying to do it as some sort of disinformation strategy I think is very hard to do because it's just
01:13:33
when there's billions and billions of of Impressions any effort that you try to engineer ends up just being a drop in
01:13:40
the bucket I agree yeah it's defin it makes sense in theory but it makes sense in theory it's very hard to do in
01:13:47
practice Yeah the goal is not to win any specific argument it's to create mistrust in the entire news ecosystem in
01:13:56
the information system so that people give up trying to figure out what the truth is and that's what the Russians
01:14:03
doing that on their own the mainam media lies so much that's what's creating the
01:14:07
distrust as are the Russians paying off podcasters okay let's how is1 million going to accomplish anything if that
01:14:13
story is even true great question great question may I answer it conspiracy theory not a conspiracy
01:14:21
theory at all these were very low-level mid like you know tier B CD podcasters if you give them $100,000 per episode
01:14:29
they can spend more money buying cameras promoting their shows hiring people so you're just finding people and dropping
01:14:36
money on their head so they can do more of the same so it's a very smart strategy in fact I think I think it's
01:14:41
the stupidest thing I've ever heard they took podcasters who are already successful and paid them to release
01:14:46
content through a less watched Channel That's the yes it was it was just more about getting the money to produce more
01:14:52
content and then they in the these guys are these guys are already live streaming
01:14:57
like 247 oh there's a puppy oh here he goes freeberg trying to win more people over with his puppy love unbelievable
01:15:05
this guy is absolutely ridiculous unbelievable all right listen let me give saak some red meat here he
01:15:13
got he got his little steak Tata with my Russia Today story got your little amus
01:15:18
BGE and now I give you your Tomahawk you ready saaks you want your Tomahawk you want it rare here it comes
01:15:25
2024 election update the betting markets and polling indicate a really tight race
01:15:30
but maybe Trump is surging this week poly Market which is a betting Market has Trump 55 to 45 versus kamla Ki
01:15:40
another betting Market 5248 Trump bada and points bet those are offshore booking and poly Market is also
01:15:47
offshore 5248 Trump Nate silver friend of the Pod his algorithm has it 5347 KLA real clar polling that's an
01:15:58
algorithm has KLA with a two-point lead New York Times Sienna comma with a three-point lead Reuters ipso pretty
01:16:05
well trusted uh three-point lead for kamla NPR PBS Maris pole has com with a two-point lead so sportbooks and Betty
01:16:14
markets are favoring Trump slightly while the polls are slightly favoring comma Sachs I sliced it up nice for you
01:16:24
you got nice 10 slices of meat here which slice you going for well I think your recitation of the polls there kind
01:16:32
of mixes up a couple of things there's popular vote polls and then there's Electoral College which goes state by
01:16:37
state if you look at pretty much now all the main pollsters you look at Tony Fabrizio you look at real clear politics
01:16:44
they're now showing that Trump is winning the electoral college right now he is up in almost every swing state
01:16:50
including I think Michigan which is pretty surprising clearly there's been a huge swing towards Trump over the last
01:16:57
week or two and look there's still 25 days to go so anything can happen I don't want to overstate this but yeah
01:17:02
this is a good example right here showing thatal college is is 296 to 242 what is
01:17:10
fabrio he's just a republican pollster but his accuracy is pretty high I've never heard of it FAO well another guy
01:17:17
who I think is more neutral is Mark Halprin who is a pundit who has been very accurate this election cycle
01:17:24
remember he's the one who broke the scoop that Biden would be replaced by Harris and he even said exactly when it
01:17:30
would happen and uh he predicted it down to the day he was exactly right about that and if you follow his account he is
01:17:38
now saying that both Republican and Democrat insiders that he talks to are both saying the same thing which is
01:17:45
their internals are now showing Trump ahead in every swing state or almost every swing state and uh things seem to
01:17:53
be breaking Trump's way right now again there's 25 days left but if you're wondering why is Harris all of a sudden
01:17:59
doing interviews it's because their internals started showing that she was in trouble so they decided to get her
01:18:05
out more and or is it the other way is it that the her Howard Stern interviews or whatever are causing her to lose
01:18:12
votes well yeah exactly well so you know which one is it do you think because I don't know when I don't have the dates
01:18:16
of all these polls versus that no I think it's it's what I predicted a couple of months ago it's the Doom Loop
01:18:21
so what I said two months ago is that if Harris gets behind she's going to have to abandon this sort of basement
01:18:27
strategy of not doing interviews she's going to have to start doing interviews the problem is she's not good at
01:18:32
interviews and if she does more interviews she's gonna fall further behind in the polls and it could cause a
01:18:36
doom Loop so that's where we appear to be right now I said that on August 30th okay shamat your thoughts I think
01:18:43
that Donald Trump is basically stuck to his strategy which is he is a generational retail
01:18:53
politician I just heard parts of what he did with Andrew Schultz another great sort of you know
01:19:01
podcast I think David's right that the editing and the massaging of the Kamala hara's talking
01:19:08
points are galvanizing the people that have already decided and turning off the people that have already decided to vote
01:19:15
for Trump and she's losing the folks in the middle and so this is what's causing
01:19:20
her to have to be out there and and she's gonna have to deliver a very crisp message and I and I think that right now
01:19:28
it's been a little bit lacking which is why you're seeing the polls at least the Electoral College
01:19:34
which is really what matters at this point turn Trump so she's going to have a bit of an
01:19:41
uphill fight between here and November the other thing I'll say is that if you've seen what's happening in the
01:19:46
appet court it's not clear whether the the Trump case is going to get overturned
01:19:52
before the election but if that does that could be very meaningful momentum for him and then I think the third thing is
01:20:00
that we should now Buckle in because if the last two elections are any guide there are going to be a bunch of
01:20:09
spanners in the works between now and November the wait what did you say spanners spanners in the works yeah what
01:20:15
does it mean what do you call it wrench in the system you mean like an October surprise you mean like some crazy turn
01:20:20
of events okay freeberg any uh thoughts here would you like to shck test this and see what you want in the numbers or
01:20:27
do you have some objective thoughts here what what's your what's your take you know there's on the polling
01:20:33
data or yeah where we're at in the election you pretty open-ended here you can look at the you can make a note on
01:20:41
overall what you see between the betting markets and the polls and that disparity you could just talk
01:20:48
generally about where you think we are you could talk about coma on Howard Stern and doing a bunch of interviews
01:20:53
with friendlies where you at right now I didn't see her interviews okay I saw some excerpts on Twitter oh boy yeah let
01:21:01
me just follow upon a point jth made Jam said that she had to be crisp if you look at any of these interviews they're
01:21:07
the opposite of crisp she's asked softball questions by by like Stephen Cole bear saying why are you running for
01:21:12
president how are you different than Joe Biden yeah and she doesn't have good answers she starts free associating she
01:21:19
gives these very long-winded answers that don't go anywhere she says she can't think of a single way she's
01:21:24
different than Joe Biden when when pushed on that it's very strange these are she definitely did the most favorite
01:21:30
shows I wish she would do some challenging shows I think she's got to do Joe Rogan all in and um what would be
01:21:37
another good podcast for her do your moth if she really wanted to like do the adversarial thing or something more do
01:21:43
adversar do an adversarial just come to Allin come and have a conversation come and have a normal conversation here yeah
01:21:48
no I'm just thinking like it seems like ZX if she comes and has a has a conversation
01:21:55
you'll be respectful yeah this whole idea that I didn't treat Cuban respectfully is nonsense just watch the
01:22:01
tape I don't think he thought that I know somebody somebody asserted that no I mean I the all if you look back on
01:22:10
every single presidential related one we did here they were all respectful and they were all conversations I think the
01:22:16
Cuban one dipped because of both of you into a bit more of a debate and it was a
01:22:19
lot more crossover than the other he wanted that that's what I agree back to him he likes to
01:22:26
come out he likes to do his thing that's exactly what if you look at all the other ones I'm trying to think of a
01:22:30
moment where it if you look at the other Dean B Phillips Chris Christie VC boring
01:22:37
gotta go love you guys see you later this has been another amazing episode The Allin podcast episode 199 make sure
01:22:45
you go to allin.com meetups make sure if you're starting a company you go to founder. university if
01:22:51
you're an engineer please go to I'm doing whatever okay please David Sachs make sure you go to um super gut glue AI
01:23:00
if you're an engineer and if you like potatoes go to aal.com and order your potatoes pre-order a subscription I mean
01:23:06
if we're doing sell some let's sell some super 890 890 go to 899 we'll see everybody next time on the
01:23:15
all in byee Let Your winners ride Rainman David and instead we open source it to the
01:23:29
fans and they've just gone crazy with it love you [Music] Queen besties are that's my dog taking a your
01:23:47
driveways oh myit meet we should all just get a room and just have one big huge orgy cuz they're all just it's like
01:23:55
this like sexual tension that they just need to release [Music] somehow we need to get merch our
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[Music]