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All right, everybody. Welcome back to the number one podcast in the world, the All-In podcast. Today, the original
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squad is back. No guests, just Full Contact Sachs is back. We're going to break down a number of topics today,
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including chaos in the bond market as Republicans seemingly have abandoned the Doge agenda. And we're going to debate
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the big beautiful bill, which is going to add trillions to our national debt. And it's a new era for Google as they
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released an AI first search product. OpenAI has acquired Johnny IV's company IO to make some sort of gadget. They've
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paid over $6 billion. Is this the real deal or not? You're going to find out today. And is energy the solution to
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every problem we have? One besties got a very interesting take. All that and more
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on the number one podcast in the world. Stick with us. For the fourth year in a row, we're going to do the all-in
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summit. If you guys remember four years ago, I decided, hey, let's do a summit. And then these three besties were like,
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"No, we don't want to do a summit." Now, it's become a big thing, and everybody loves it. September 7th to 9th in Los
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Angeles. I do give you credit for that, Jal. Yeah, after you gave me hell for a year. Okay, that sounds like an apology,
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but okay, sure. I'm sorry. You're wonderful, and I appreciate what you created. Thank you very much. Wow,
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finally some credit. Okay, we all know the goal of the summit is to have the world's most important conversations and
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this year will be no different. yada yada yada allin.com/summit if you would like to
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apply to come. Why do you say the most important conversations and then say yada yada yada as a way to dismiss it?
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Do you think that that increases your salesmanship and effectiveness? I don't want to make any grand pronouncements
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here, but these have been important conversations we've had. It's been pretty great, I have to say. yada yada
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yada. No, there's just like they put like 18 things in the plugs now and I don't want to do too many. Why don't you
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do a modeicum of work before you get on camera and actually edit it. Here we go.
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I get one compliment and then that's exactly it. He doesn't do the homework. So, he runs out of words. He's like, "We
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get the biggest names to come to our summit. The vice president came. He said yada yada yada." Elon Musk showed up in
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person. yada yada yada. There was an astronaut. Freeberg lost his yada yada yada yada yada yada. Uh, but this year
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will be no different. We'll have incredible parties, blah blah blah, and let's get to work. Okay. President did a
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trip to the Middle East, yada yada yada. Maybe more peace, a whole new framework.
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America's going to yada yada yada yada yada. World's greatest moderator, yada yada yada. Executive producer for life.
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Deal with it, Fredber. Okay. Uh, what's in the contract? Let your winners ride. Rainman David.
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We open sourced it to the fans and they've just gone crazy with it. All right, let's get to work here. The
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bond market is the captain. Apparently, Treasury Department sold $16 billion worth of newly issued 20-year bonds on
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Wednesday afternoon, and there was weak demand. This pushed yields higher across
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the board. the 10-year, which Beston has said to focus on because it's the benchmark rate for most borrowing costs,
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you know, mortgages and stuff like that. It spiked and here it is. It actually hit a five handle at one point. A lot of
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people were hand ringing about this. And the S&P dropped 1.5% in about 30 minutes. Here's that chart as
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well. And the three major indices were all down between 1.5 and 2% on the day. Obviously, in related news, the House
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passed the big beautiful bill at the 11th hour last night. Uh this makes the TCG JA tax cuts permanent. Um and it's
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estimated to increase longr run GDP by 60 basis points. Uh that's if all the cuts were
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implemented. It's also going to reduce tax revenue by 4 trillion over 10 years is the estimate and it's going to add
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between 3 and 5 trillion to the national debt over 10 years. free break. What's your take on the tripleB and the bond
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weak bond market, all of it? I just want to take a quick primer on Sure. how the
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government gets funded. I know we we assume everyone understands it, but I think it's important for folks to really
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grock it. For the federal government to make payments to employees and contractors and buy stuff, they need to
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put money in their bank accounts. And the way they put money in their bank accounts is they issue bonds. These are
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treasury bonds. So they'll sell treasury bonds to the public and individuals buy
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it, companies buy it, banks buy it, and foreign governments buy US treasuries. And they transfer or wire cash into the
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federal government's bank accounts, which they can then use to pay for stuff. And then the Treasury Department
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needs to continuously sell treasuries to raise cash to fund the government. When
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folks don't show up to buy treasuries, that's a bad thing. And that means that the government needs to
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increase the interest rate that they're paying on those bonds. So what we saw on
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Wednesday was a really weak demand signal for treasuries on this, you know, modest treasury auction. Selling 16
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billion of bonds is not a lot. There's hundreds of billions being sold each quarter. And so this was not a big
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number, but there was no buyer. The market was really dry. And so everyone that participates in financial markets
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saw this and freaked out. And the big motivation, the big understanding of the relationship here is to your point that
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this big tax bill and spending bill is passing out of the house. And that bill, as we talked about last week, has a high
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deficit and that'll run up US debt over time, which makes it more difficult for the US government to pay its bills
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because it has to issue more debt. Interest payments have to be paid every year and so on. Now, if you just pull up
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this one slide, this is something I thought was really worth sharing. The CBO estimates, which is what you
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referenced, Jason, are estimates of what the cost is going to be over time. And this is from Jessica RLE or Ridle out of
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the Manhattan Institute put this chart together. Budget Office. Yeah. So the Congressional Budget Office, the CBO
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creates an estimate of the budget, the spending, and the deficit, and ultimately the incremental debt that the
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US government will need to issue to fund its obligations over time. This is a chart that was put together that the
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expectation on a baseline basis is that over the next 30 years or so, US debt to
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GDP will climb to 203%. But what a lot of people don't know and don't talk about is that in the CBO estimates, they
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assume in all of their models that interest rates are at 3.6%. And with the bond selloff
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yesterday, what we are now seeing is 30-year Treasury interest rates at over 5%. It's 5.1% this morning. And for
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every incremental 1% above 3.6, six, you're spending an extra 350 billion a year in interest. 350 billion a year.
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So, as we go up by 1.5% interest over the next 10 years, we're spending another 5 trillion just on interest
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payments. Half a billion dollars after trillion dollars a year of incremental interest on the difference between 3.6
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and 5.1. That's an incredible recursive problem. And I say recursive because the
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incremental interest that we now have to pay because interest rates just went up
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because the market is demanding more payments from the government to fund this means that the government has to
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issue more debt and it quickly gets away from you. There is a nonlinear relationship between the deficit and
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interest rates which drives up the debt problem in a nonlinear way and it gets away from you and you can't fix it. And
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that's what the market is telling us is that the current bill that's being passed out of the house is showing such
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an extraordinarily high deficit that the market does not want to buy the debt from the government. Rates are now
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climbing and that creates a massive problem for the government. Okay, Chimath, you've been tweeting about
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this. Uh we thought we were going to get uh an administration and maybe um some focus from the government that we would
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be have more austerity measures, balance the budget. Now it looks like we're going to pour gasoline on the fire. What
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are your thoughts? I think we have to be careful here. So Jason, the political calculus will be for the president to
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decide how much credit he actually wants to take for this bill because even though it has his name on it, the
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contents of the bill are different in actual facts than what I think he intended. And
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what I mean by that is when you look inside of what happened in the 11th hour last night, it's disappointing. This
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thing is like anti-D Doge. If Doge was meant to be a reflection of the American voting
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population's desire for meaningful reform in government, cost controls, some form of austerity, and to
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get this debt spiral in check. This is the opposite of that. What happened was in the 11th hour, you
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had a handful of people abstain. You had one person that passed away in the last
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few days. You had one person that fell asleep on the floor of the house, so he wasn't even woken up for the vote. And
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in the middle of all of that chaos, what happened was all kinds of things were added and attached and
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cancelled at the last minute because what happens is you have to have these puts and takes as Freeberg described. If
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you want to spend over here, you have to find a cut over there. But I think what
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happened was there was really not a lot of financial literacy used to decide what to actually put in and what to cut.
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And that lack of discipline is going to create I think a negative set of consequences. So what
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are those consequences? Today the tenure is around 4.5%. At the rate in which it's
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escalating since liberation day, by the end of this year, we're going to be past
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5%. The 30 year is on a rate now to get past 6 and a quarter, maybe even reach 6
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1/2%. Those are way beyond what most people thought was a reasonable place to be for the United
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States economy. And so what will the implications be as rates go to those levels? You'll delever from the United
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States. You'll sell US debt. You'll own things like gold and Bitcoin. If you're curious about what's happening to gold
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and Bitcoin, they started to spike in the last few days. You'll have ratings organizations
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that add to this cascade by downgrading the United States. That happened on Friday. you'll have very smart people
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starting to signal that this is a much harder problem than they initially thought.
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That's how I personally interpreted Elon's comments over the last few days. So, what was the House supposed to do? I
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think what they were supposed to do was implement some form of austerity. They were supposed to by the will of the
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people pass a recision bill. They were given that recision bill. It was just $9 billion. They couldn't even pass a $9
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billion recision. And instead, they passed a $4 trillion inflation to our debt. Now, you hand this to the Senate.
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The Senate is in a very difficult place as well. Do they want to quote unquote claim victory and say, "Here you go,
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President Trump. Here's your bill." But they'll further bastardize this thing and it will be even further away from
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what I think benefits MAGA and benefits Main Street. So who does it benefit? Current course and speed right now. This
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bill is about traditional Republicans and traditional Democrats circling the wagon and putting on a platter a set of
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things that I think will be hurtful to average Americans. You're going to see energy prices spike. You're gutting the
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number of electrons that will be available for things like AI. You're going to increase Medicare prices and
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the math is wrong. So when you sensitize this thing to a 4 and a half or five or
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five and a quarter rate, so meaning not what the CBO used but the real conditions on the
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ground, this thing is an albatross. And I think unfortunately for President Trump's agenda and for a MAGA movement,
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this is the worst of all conditions. The financial markets will punish this. And
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then the last thing I'll say is now to top it all off, I think that Jerome Powell will see the writing on the wall.
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Many aspects of this thing are inflationary and if they're not handled well by the
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Senate, he has a lot of room to actually increase interest rates. So, I would just say that the Senate has
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an incredibly difficult job. I think the president has an even more difficult job
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about what to do right now. But the House did nobody favors. They did not do anybody a favor yesterday. Here's the uh
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prediction from Poly Market on what will happen to Fed rate cuts in 2025. It's across the board. It seems like nobody
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can tell if it's going to be zero, 1, 2, or three. 20 22 25 and 15% respectfully
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respectively for those four options. Sax, you don't speak for President Trump. You're the zar of AI and crypto
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specifically. So, let's put that out there. But I'm curious your thoughts on what happened with Doge. Why are we
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continuing to spend ourselves into oblivion? And what will the downstream issues be here? Because this
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sounds like it's going to be inflationary. This sounds like it's going to be hard for people to buy
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homes. It's going to create more austerity in the future. How bad is this? Do you feel it's as bad as Dave
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and Chimath are framing it? Well, look, I mean, I wish we had 435 members of the
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House who thought like Freeberg about spending and deficits. Um, we don't. The Democrats all want a lot more spending
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and a lot more taxes. Remember, if it wasn't for Mansion Cinema, we would have had that $4.5 trillion build back
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better. And among the Republicans in the House, unfortunately, we have a bunch of
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Republicans who are pretty soft on spending. I mean, you can call them rhinos if you want. And we only have
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what, like a three vote margin in the House, and the Democrats are not cooperating in any way. So, you don't
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have that many votes to spare. So, what I'm saying here is you can't make the perfect the enemy of the good. I think
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you have to be realistic about how much we can get done here. And I do think that this bill does contain a lot of
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good things in it. There are a lot of priorities for the administration in here. Do I wish it cut spending more?
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Yes. I mean, do I wish that it made all the Doge cuts permanent through recisions? Yeah, absolutely. I think
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it's outrageous that there were enough House Republicans who didn't want to back up Doge that that wasn't enacted.
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But there are a lot of good things in the bill and I should just highlight them for balance here. So, the number
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one thing here is that this bill will permanently extend the 2017 tax cuts. And if we don't pass this bill, let's
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just assume that we do nothing. Okay, if we do nothing, you're going to get the largest tax increase in decades, and it
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won't just affect the rich. This affects the middle class as well. The 2017 tax cuts increase the standard deduction,
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which is important for the middle class. It raised the child tax credit. So again, if you do nothing, you get a huge
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tax increase as soon as the 2017 tax cuts, which Trump passed back in his first term when they
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sunset. So that's number one. In addition, there are promises here that were made during the campaign to
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eliminate taxes on tips and overtime that have been enacted, and the president promised to do those things,
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and he is accomplishing those things. So I think that's important. There's funding for the border wall here, 10,000
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new ICE officers, more detention beds, and so on. On energy, it repeals a methane tax and unlocks new oil and gas
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on federal lands. And there's a bunch of other things as well. So, there are a lot of good things in here. Now, to
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point, will this bill be bad for the Republicans prospects in the midterms? I guess what I would say to that is I
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don't understand how you expect to do well in midterms if Republicans preside over the largest tax increase in
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decades. A tax increase that Joe Biden tried to get during his administration. Biden tried to raise taxes and couldn't
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get the votes for it. But if we don't make those tax cuts permanent, if we allow the sunset to happen, then you
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will accomplish what Joe Biden could not, which is to raise taxes on the American people. So, look, no bill like
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this that's passed by a one vote margin on straight party lines when you only have a three vote margin in the entire
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house is going to satisfy everyone here. Let me Well, let me ask you a question there. You have Trump at his peak power.
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You have all these threats of, hey, we're going to primary anybody if they don't do like what we're saying here.
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Why isn't Trump just coming in and using his power and just saying, hey, not good
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enough. Get back to work. we need to cut spending. Period. Full stop. And he's got that power. I don't hear him saying
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that. I do think that there are ways to enact the tax cuts and make them permanent. And I think that that is a
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good part of what this bill did. The problem was what happened from 11:00 p.m. to 6:00
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a.m. And that's all of the nonsense where I'll just be honest. I think the people in the House are not nearly as
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financially literate as they need to be and I think what they wanted to do was pass something and throw it over the
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wall and say mission accomplished. Now it's up to the Senate and the good news is look, the Senate
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has these six-year election cycles for a reason. It allows them to think strategically and see past what's right
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in front of them. So, I still think that there's a chance for the president to have his cake and eat it, too. But I
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just want to highlight that as a supporter of his and a supporter of that MAGA agenda, which I think a lot of
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people voted for, I just want to be honest and say this is not it. And there has to be some meaningful reforms in the
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Senate version of this thing that gets sent back to the House. So, I'll give you an example of one. 81% of the
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incremental energy that's generated in the United States last year came from private enterprises that were investing
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in short-term forms of power that have a credit and a transfer market tied to it.
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This is just the financial machinery. This is how Blackstone and Goldman Sachs and Brookfield and all of these big
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players move tens and hundreds of billions of dollars around. They changed those rules at the
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11th hour. What is the impact of that? Elon foreshadowed it. Nick, maybe you can
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show the headline of the article. He said, "We could be running into a power capacity issue by mid next year." Now,
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if we knew that, why would we take the short-term incentive away to generate more electrons? All the great things
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that David has done, that the president has done on AI, I mean, we'll talk about
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what happened in the Middle East. But when the rubber meets the road and you actually have a shortage of
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electrons because these financial actors, they're not, you know, and in fairness to them, they're acting
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rationally. You take the financial incentive away and you can't underwrite this thing. What are they going to do?
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They're just going to stop doing it. So in the absence of electrons, what happens? Prices go up. It's
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inflationary. And now you'll have to allocate electrons. Does the electrons go to an AI data center or does it go to
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a home? In a different example, actually on the residential side, places like Florida, I think there was like an
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incentive for like batteries. So if you are about to get hit by a hurricane, you
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can buy these big battery systems from Tesla as an example, but there are other ones, Generrack and whatever
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train that was cut out. And so in Texas, all of these impacts will have negative
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consequences. My point is, I think you have to really look at what happened in the 11th hour and fix those things
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because the problem with these plans is you can't look at gains that are in years 6 through 10 to justify pain in
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years 1 through 5. You can't do that. Because I understand how that mathematically makes sense. It doesn't
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make sense practically for the average American. That's just not how life works. You don't go into a J curve. You
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know, we do that as investors, right? But you don't do that as a normal American, which is be on the wrong side
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of the economy for four or five years in the hopes that your six and seven are good. That's the point that has to get
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fixed. I asked Chimat the question, shouldn't Trump use his capital he's built up here and say not good enough,
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make some cuts here? What would you say to President Trump if he was asking you for your advice? Freedber. I think the
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writing's on the wall that the system is winning and the rebels came in and they
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tried to fix the inefficiencies in government with Doge under Elon's leadership and our friend Antonio's
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participation and a great group of individuals who are true patriots who are spending time trying to help
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reassess how the government operates. And they, as I've said from day one, for my first visit to DC during inauguration
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weekend and every visit I've done since then, I always leave after meeting with members of Congress deeply worried that
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they won't actually do what they need to do to make the changes. And the last line of defense ultimately is the
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president with his veto authority and his ability to tell people to go back, rethink this, and cut spending. I feel
00:22:24
like we're in a last ditch effort. And I'll tell you why I say it's last ditch. I think that there's a relationship
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between what's going on in the United States and what's going on in Japan. Nick, if you'll pull up the Japanese
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government 40-year bond yield chart. So, just so you guys can kind of observe, in
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the last couple of days, we've seen Japanese bond yields sore from 2.5% to 3.5%. Remember, Japan owns $1.1 trillion
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of US treasuries. I'll just read a quote from a guy uh who's the chief global strategist named Albert Edwards at
00:22:52
Society General and he said recent developments in Japan may signal the end of the
00:23:00
favorable investment cycle that's been established since the 2008 global financial crisis potentially reshaping
00:23:06
global financial landscapes in the coming months. Can I translate that because it's it's incredibly important
00:23:11
what Freeberg said but I'll translate that what he is saying. So this is a guy from Sockgen since
00:23:17
2007208. Every now and then the markets give you free money. One of the most obvious free
00:23:23
money trades was the yen carry trade. And in order to to execute that trade, you're effectively leveraging
00:23:32
treasuries against the Japanese bond market. What he is saying is that there is increasing risk that that trade
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unwinds. When that trade unwinds, what you're going to have are net sellers of up to,
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as Freeberg said, a trillion plus dollars of US treasuries. What will that do? It will
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further exacerbate the market's reluctance to own US treasuries, which means yields go
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even higher, which means interest rates for businesses and individuals go higher. Correct. And the only way to
00:24:04
keep those interest rates low will be for the Federal Reserve to try and step in and buy those bonds, which will
00:24:12
devalue the dollar. And in his commentary, he went on to say that uh the 20-year Japanese bond auction that
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just took place, similar to the US Treasury auction that just took place, was the worst they've seen since
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1987. That's how significant this event was in Japan over the past week. So the massive climb in bond yields in Japan
00:24:34
indicates a massive selloff in credit. And remember if you look at the historical perspective when the global
00:24:42
reserve currency nation sees their debt sell off it usually is part of a global selloff that happens. It's not just the
00:24:49
US that gets affected. And any one of these markets can cause a cataclysmic follow on to the rest of the global
00:24:56
financial markets. like if Japan sells off too much, we are going to start to see a lot of unraveling happening.
00:25:02
That's the consequence I think of this particular bill because it's it signals a lack of a reluctance to actually
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address. Let me let me say something here. I called Freeberg today on the way here. It's very rare that he and I agree
00:25:17
about this kind of stuff because normally what I say is you're catastrophizing. Sure, calm down. But
00:25:23
this is where I will say I'll put my money where my mouth is and I'll put the chips on the table to say this is the
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moment. This is the moment where we either reunderwite what we voted for or we mistakenly pass this Christmas
00:25:40
tree concoction. It does have President Trump's signature on the top of it. It does have some features that he asked
00:25:47
for, but what I hope he sees and realizes is the details here matter. And without some technical maneuvering
00:25:55
in the Senate, this is a bad bill as constructed. And if it passes, forget what any of us think, the
00:26:04
bond markets will act decisively and they are going to go in one direction and it's away from us. And I just hope
00:26:13
that we figure this out. Seems like a classic diffusion of responsibility here, Sax. You have Congress, Senate,
00:26:19
and POTUS not willing to step up and say, "Let's cut the spending." Well, I don't I don't think that's fair.
00:26:27
I mean, look, the the president backed up Elon and Doge. First of all, he created Doge. He gave it the US digital
00:26:32
service. He backed it up in every cabinet meeting, in every public pronouncement. There's a limit though to
00:26:37
what he can do. Congress has the power of the purse. And we said on a previous episode that at the end of the day, for
00:26:43
the Doge cuts to become permanent, Congress has to incorporate that into the budget. And the reality is there are
00:26:50
still a number of these like old bull appropriators on the Republican side who just are not wired to make spending
00:26:57
cuts. Why are we hearing him vocally saying stop this madness? He is the most vocal guy in the world who mixes it up
00:27:05
every topic on the planet. Why is Let's give him the benefit of the doubt. Let's
00:27:08
give him the benefit of the doubt. He's probably working it all in the back channel. There are the things that he
00:27:13
wants and he's in the midst of negotiating as well. But my my point is just this. The level of financial
00:27:19
illiteracy in this bill will come back to bite America in the ass. Look, here here's the problem is that what what you
00:27:26
guys want to sell right now is austerity. And the reality is that the politicians in Washington just are not
00:27:32
buying austerity right now. I mean, that's what you want is austerity. Yep. And the reality is the only way you get
00:27:39
true austerity, like a painful set of changes, is when both parties link arms and jump off the cliff together and and
00:27:46
make those changes. The Democrats right now have no willingness to do that. They're opposed to doing this. This is a
00:27:52
straight line party reconciliation vote. I think you're trying to overload this vote with way too much stuff. You're
00:27:58
trying to basically say that this vote has to fix America's fiscal problems. Just not going to happen. I mean, I
00:28:04
look, I agree with you that the fiscal situation needs to get fixed. This is just not the vote where it's going to
00:28:09
happen. You cannot exacerbate it. Well, I don't know. I mean, look, I understand
00:28:12
that this doesn't have as much stuff as as we want. I mean, like I said, I want to see the Doge cuts made permanent, but
00:28:18
the alternative to this bill, let's say the alternative is just do nothing. That
00:28:22
is actually meaningfully worse because you will get a massive tax increase. Massive. I think President Trump
00:28:28
inherited a Biden economy that was already feeling pretty shaky. I don't know what the argument is for a massive
00:28:33
tax increase in an economy that's not doing great. I'd rather see the tax cuts made permanent. I'd rather see the no
00:28:40
tax on tips and overtime implemented. Important campaign promises. I'd rather see funding for the border wall. I mean,
00:28:46
these are all important things that we need to have happen. And I just don't think that this bill is how you're going
00:28:51
to start. Good. But what I'm saying is why do you pay for that with electron supply for homes and AI? I don't know. I
00:28:57
mean, you're talking about a pretty esoteric issue, Chimoth. This is not the same as solving the US budget situation.
00:29:03
Why do it by doing Medicaid cuts? Why? Well, let's talk about the Medicaid cuts first of all. I mean, you're being a
00:29:08
little bit schizophrenic about this. I mean, you guys are saying that you want to see more cuts, but then you also
00:29:14
believe that the Medicaid cuts are a bad idea. So, you got to kind of choose. I'm
00:29:17
not saying that. I think all cuts are great. Cuts across the board. Yeah, cuts across the board. Spread it out. You got
00:29:23
to decide what you're opposed to. Are you opposed to cuts or you want more of them? I want more cuts. And given the
00:29:28
fiscal situation, I'm actually if if someone showed up and said, "Hey, we're going to increase taxes." I'd say,
00:29:33
"That's what we got to do right now. Everyone's got to take a hit on this." But hey, I know I'm going to be alone in
00:29:37
that. So, I'm not going to try and make that argument. I guess the question for you, you're not alone in that. I agree
00:29:41
with you. Well, let me ask a question, Sax. What do you think is the moment when the two parties lock arms and do
00:29:47
jump together? What is the conditions that need to be kind of prevalent for us to take, you know, draconian austerity
00:29:55
measures? probably the bond market forces it on the politicians force it on Washington. Yeah, I think you're right.
00:30:00
You're an economist by background. Do do you see that happening right now? Like do you see this the sell-off that's
00:30:04
happening not just in the US, but everyone that's linked to the US with Japan and so on. Don't you think that
00:30:09
the markets telling us that this might be the moment? It could be the moment, but you know, I remember the first week
00:30:14
of April when Larry Summers came on the pod and said that the markets were melting down and that was a different
00:30:20
moment that he was trying to sell in favor of his policy. So my point is just there's market volatility and we won't
00:30:26
know for a while whether this means anything. It could just be a blip, right? So look, you ask me what are the
00:30:32
conditions for getting austerity. I think that austerity will have to be imposed on Washington from the outside.
00:30:38
Washington's not going to find the will internally. We had a wonderful moment here where you have Elon come in with
00:30:45
Doge, which the president made possible. Okay. No other president would have even
00:30:49
have done this. Agreed. Agreed. Big credit for that. where you get a total outsider to come
00:30:54
in and bring a team of like young big bald geniuses and you let them go through these departments line by line
00:31:02
and start deleting things. Okay. And they made I think great progress. I think they found a 160 billion a year of
00:31:09
cuts that can be made administratively. Beyond that they need Congress to approve it. And I will acknowledge that
00:31:16
there are still a number of soft onspending Rhino Republicans and there's just not a majority for the types of
00:31:25
austerity and cuts that you guys would like to see. I mean, that's just the reality. Yeah. But I still think that
00:31:30
the question with this bill is just how pure you want to be. My point is just are you going to make the perfect the
00:31:36
enemy of the good? I don't think you're going to get austerity out of Washington
00:31:38
right now. It's just not in the cards. The question is whether this bill is basically better than the status quo.
00:31:44
And I and I think it is because of the tax cuts. To your point, without opining on it, I think what's going to happen is
00:31:50
the bond market will sensitize this budget at real rates. They're not going to use the 3.6 that Freeb pointed to.
00:31:58
They're just going to rewrite this at 5, five and a quart, or 5 1/2. That has a very
00:32:04
different risk exposure, I think. And so to your point, they'll react. If it looks like it passes as is, then that's
00:32:12
what they'll do. And to your point, David, we'll know in the next 60 to 90 days. Let's say that this is just a blip
00:32:17
in the market and it's not some larger once in a century type event. The reality is we don't know exactly what's
00:32:23
going to happen. Look, I don't like America's fiscal picture at all. But what if the AI and robotics revolution
00:32:28
plays out in the most optimistic way over the next decade and is massively deflationary and we get basically AI
00:32:36
powered robots expanding the economy massively. You need power for that. I get that and we need to do power
00:32:41
generation for sure. But my point is just what if the new technology provides an answer to the fiscal situation that's
00:32:50
not currently on the table. I think again. So, this is my point is is Washington's not going to embrace I
00:32:54
understand, but you're going to have brownouts and blackouts of average human homes to do that. No, you shouldn't have
00:32:59
to make these decisions. Those are dumb trade-offs. You're not going to be able to solve the power generation problem in
00:33:03
a reconciliation bill. And I want to just add my two cents at the end here. Leadership starts at the top. This
00:33:09
president acts unilaterally all the time. Whether it's immigration, DEI, he has no problem. And this is what he is
00:33:18
doing. He's endorsing this bill. He's saying it's big. It's beautiful. He is saying this is historic. I think this is
00:33:27
bad leadership. I'll just say it straight out. He was elected to balance this budget and to have austerity. He's
00:33:32
going to put more onto the debt. And we sat here on this very podcast, the four of us, and said this was the most
00:33:38
important issue on the world. And Trump is putting gasoline on the fire. I think
00:33:44
it's bad leadership. Let's continue on the docket. I suggest you look at the Constitution because the power of the
00:33:50
purse rests with Congress. He's endorsing this. He's endorsing it. He's not even putting up a fight. When it
00:33:56
comes to immigration, these other areas, the president has far more unilateral power and he's used that every chance he
00:34:01
gets. But when it comes to spending, you have to get Congress on board. This is a
00:34:06
bill that passed with a one vote margin. I don't know where you think the opportunity is to squeeze out more
00:34:12
concessions from Congress. I don't think he could speak up. He could speak up and
00:34:16
say do better. He's doing the opposite. He's doing the opposite. This bill passed by a one vote margin. It was
00:34:21
hanging on by a thread. And if it failed, you get basically hundreds of billions of tax increases, which we
00:34:28
don't need right now. And you know, in terms of in terms of I think he's trying in terms of Republican prospects. Look,
00:34:35
people vote for Republicans to do two things. Cut taxes and cut spending. I wish that this bill did two out of two.
00:34:42
It does one out of two with some of the second one like with the Medicaid stuff.
00:34:47
If we didn't at least cut taxes, there'd be no reason to vote for Republicans. None. You all are much closer to him
00:34:53
than I am. You all should be challenging him to not endorse this and to do the opposite. That would be the profile and
00:34:59
courage. Then we get the biggest increase in decades. Great. No, he should just go to everybody and say do
00:35:04
better. I don't agree with that tactic. I think the better tactic is to do what he did, but then work behind the scenes
00:35:09
and help the Senate implement the technical guard rails that make the bill better than it as is. Look, nobody
00:35:16
thinks that this bill is going to pass as is. It's going to go through its own set of changes in the Senate. Now, I
00:35:22
think the opportunity is to understand these puts and takes with a little bit more detail and a little bit more
00:35:27
mathematical precision and fix it. So, I still hold out hope that we're going to
00:35:31
get to a better place. But he's going to have much more influence, Jason, by actually taking the positive path than
00:35:36
throwing everybody under the bus. The real question will be in 30 days or 45 days, what is the final version of this
00:35:43
thing? And whatever gets passed and signed by him, there will have been enough time to understand it. And you'll
00:35:50
see the real-time reactions. All I'm trying to indicate is I think that this was a moment where people were very
00:35:58
pensively optimistic that the approach of Doge would really be embraced and that we'd see some broadscale attempts
00:36:05
to at least and you know Freebrook said this just to go back to 2019 even if we don't do anything else just go back to
00:36:11
2019 pretend COVID didn't happen. Yeah. And we would be, by the way, if we did that, we would have a budget surplus and
00:36:18
the bonds would be trading down to 2% yields again. I mean, we would be in such an incredible condition. We've got
00:36:23
2% inflation right now. Anyway, we don't need to beat the dead horse. Let's move
00:36:27
on. I I wish I wish there were 218 members of the House who thought like I hear you. Oh gosh. Listen, this guy is
00:36:34
saying he's going to primary anybody who, you know, doesn't he should be speaking up right
00:36:40
now. I'll tell you what, give him the line item veto and then let's talk, right? How about you saying guys spend
00:36:45
less money? He doesn't have to throw him under the bus, Jimoth. It could be something very subtle. But you make it
00:36:50
that way. What you the way that you position it is like you make it such a black and white thing and it's I speak
00:36:55
up is is black and white. He's there's a lot going on bill. No, but what I'm saying is he
00:37:01
is I'm guessing I don't know, but I'm going to assume working behind the scenes. And what you're saying is he
00:37:08
should virtue signal and prognosticate in public. And I'm saying that I I never said virtue signal. That's what you're
00:37:14
asking him to do. No, I'm not. I'm asking him to say reduce spending in the bill because that's good for America.
00:37:21
This bill cuts 880 billion for Medicaid over a decade, which is something that already is politically tough and
00:37:28
controversial. It imposes work requirements for able-bodied adults. This is similar to what Bill Clinton did
00:37:34
back in 1996 with welfare reform. Basically saying that you can't be a layabout and get welfare. So these are
00:37:40
relatively tough things to do politically. It's like do I want to see even more cuts? Yeah, absolutely. But
00:37:46
again, when you have a one vote margin, whose vote are you going to pick up by doing more cuts? I guess you get Thomas
00:37:51
Massie maybe. But you probably have to go all the way to balance the budget to get his vote. I don't know what it takes
00:37:55
to get a Thomas Massie vote. So, I don't know what votes you think you're going to pick up by cutting even more. And we
00:38:02
can't afford to lose even one vote. It's literally the art of the game. We got to
00:38:05
move on. I will move on. But if you're going to tell me it's I'm asking virtual signal, you're going to lie about my
00:38:09
position, I will correct it. It's been 40 minutes. So, my position is not to virtual signal. It's to go flip a couple
00:38:14
people and say, "Do better." Okay. It was a huge week for AI again. Google and the ghost of Steve Jobs took center
00:38:21
stage. Let's start with Google here. They had their IO conference on Tuesday. This is where they show a bunch of new
00:38:27
stuff. They get developers to come together to embrace their products and the stock ripped 5% on the day which
00:38:35
might be a turning point for Google and up again today. Search was the big announcement and we had a discussion
00:38:42
with Sergey about that in Miami and we had multiple discussions about it here over the last couple of months. They
00:38:49
demoed something called AI mode. No, not founder mode, AI mode and they compared
00:38:53
it to regular search. Here it is on the screen if you're watching us on YouTube or Spotify. A very elegant app. And so
00:39:00
here you have somebody searching and what you can see is in AI mode. It looks like a nice comprehensive search.
00:39:06
Instead of 10 blue links and tons of advertising. So you can flip over and see all or you can do a perplexity like
00:39:14
search. Here we're showing you what this search would have looked like. The AI summary at the top and then your 10 blue
00:39:19
links. It's distinctly different. It is exactly Chimath what you talked about. Somebody has to have the courage to flip
00:39:25
the switch here. And so that's was the big drop. And I think that in your interview Dave, didn't Sundar say we're
00:39:33
going to integrate ads into that kind of result? Yes. The comprehensive search result. I think there were a couple of
00:39:39
things that Sundar said in the interview that showed up in a really important way
00:39:44
at IO. The first was exactly this which is to make AI mode more ubiquitous in search and effectively over time replace
00:39:51
search with this AI mode experience which they've been testing in a small group and now they've expanded very
00:39:57
specifically to kind of Chimath's point a couple weeks ago they should try and flip the switch. Well, it appears
00:40:02
they've done that. The key question and the challenge has always been what's the
00:40:05
revenue per query? How are you going to make money? And I think one of the other
00:40:09
kind of interesting announcements that we saw come out of IO which indicates the business model opportunity here is
00:40:16
not just AI mode and search but some of the other tools that they launched bundling them together and they have
00:40:22
this product offering called AI ultra for $250 a month that includes you know YouTube premium. It includes 30
00:40:28
terabytes of storage on your Google account. It includes access to flow which is their movie creating AI model
00:40:35
where you can use they have V3, Gemini and imagen below it. Those are the three models that contribute to this movie
00:40:41
creation studio tool and they've launched a number of other kind of highv value Gemini models as standalone
00:40:48
research apps and you can get access to all of these kind of high-owered tools for $250. So I do think this sets a new
00:40:55
direction that Google is likely testing as a business model which is subscriptions you're saying. Can we make
00:41:00
yeah a very high dollar volume subscription model for consumers that over time could create a very meaningful
00:41:07
shift in the revenue mix for Google away from ads and more towards subscription revenue that we already see in some of
00:41:14
the consumer services like YouTube and YouTube TV. This is I think a really important turning point. I would say if
00:41:20
anyone were to identify the week that Google really pivoted into the AI business model it might be this week.
00:41:26
They launched over 15 products at this thing. And another important one I'll highlight, Sundar talked about this in
00:41:31
the interview uh I did with him. In the early days of Google from 2002 till about 2011, Google had this kind of
00:41:38
playground of products called Google Labs where they would introduce new stuff. I don't know if you guys remember
00:41:43
checking out new stuff. So they relaunched Google Labs like a year ago or so and as Sundar said they're putting
00:41:50
a lot more stuff in labs. So Labs is now becoming the new test bed and they launched a bunch of the announcements in
00:41:56
labs. So that becomes the place where they'll say what's the business model, what's the use case, do people like it,
00:42:01
do they love it? If they do, it graduates out of labs into full production. And I think that opens up
00:42:06
the opportunity for some of the things like Chimath was talking about where they could experiment new ideas, new
00:42:10
modalities, and then productize them if they work. And they discontinued labs in
00:42:14
2011. They just brought it back last year. They just brought it back. Yeah. Saxs, you I think mentioned, hey, they
00:42:19
have the I'm feeling lucky button here. They put the AI search up in the top bar. We have images, video, shopping,
00:42:26
etc. news. We're all familiar with that. What do you think? Just swap out I'm feeling lucky for Delight Me with AI and
00:42:32
and M or maybe just if you were a product manager there because you've done a lot of great product work in your
00:42:37
career before you were in politics, would you just AB test this and say anybody who let's say doesn't click on
00:42:44
ads, let's send them to the AI search and just see how they do because they don't click on ads anyway and then just
00:42:48
let the ad clickers keep going to the ad product. Well, I think you know we were all
00:42:54
calling on previous podcasts for Google to risk disrupting their dominance in search by moving to more of an AI based
00:43:03
model. And I think they've taken an important step in that direction. They've sort of threaded the needle here
00:43:09
between keeping their old UI and product and then also incorporating the the new
00:43:14
sort of AI UI. So, this is a compromise. I mean, they're trying to have their cake and eat it too. It ultimately feels
00:43:21
a little bit like a transitional move. I doubt that this will be the end point, but given their need to protect their
00:43:28
search business while also developing their AI business, this feels like a pretty good compromise, I think. I mean,
00:43:35
it certainly shows that they're in the game and they're not going to get caught totally flatfooted and let the whole
00:43:40
world disrupt them while they're trying to figure out AI. I mean, they are responding now and the market seemed to
00:43:47
like it. I think they were up like 5% on this news. Yeah. And then up again today. Chimatha, you talked about having
00:43:53
some uh design sense and maybe some bravery here. Looks like uh they're pretty much on the cusp of doing that.
00:44:01
The search alerts results in AI look elegant. They look uh dare I say perplexity like when you look at them. I
00:44:08
would say I would like to have that as my default. I think when I'm doing search,
00:44:15
what do you think of the product? We're showing it here again. And what do you think the road map will be? I gave one
00:44:21
possibility. Sax is totally right. I think that this is not the destination, but they've taken a really important
00:44:28
step and now they have to follow through. We all know what has to happen. So, I think we're all just going to
00:44:35
debate when it happens and I think what the market is betting is that it's going
00:44:39
to happen in the next 18 months. So what is it exactly? It's when AI mode becomes
00:44:44
the default for a large swath of existing Google users. How will we know that happens? They're probably running
00:44:50
AB tests right now. They're probably gauging behavioral patterns of which kinds of users, what the actual impacts
00:44:57
to search are, and what impacts exist to CPCs to cost per click, which is one of
00:45:02
the inventory types that they sell. But I think this is the beginning of a process. I suspect it'll be done in less
00:45:08
than a year. And for a large swath of users, they are going to put AI in the front door. I think that's a feta
00:45:15
compli. I think we're just now debating the mechanics of getting there per how Sax alluded to it. That's a really
00:45:21
powerful step. But here's Jason. I think I go back to what they also have to keep
00:45:27
in mind. What you don't want to have when you are going through an innovator's dilemma
00:45:36
is to have the competitor be on to the next lily pad while you are figuring out the current lily pad. And the reason I
00:45:44
bring this up, and I'm sure we'll talk about this, is it's impressive what Sam Alman is doing right now at OpenAI. I
00:45:53
don't know if it was a troll or not, but to buy IO, Johnny Ives firm at the end of Google IO. And I read an article that
00:46:01
said OpenAI has been trying to do this for a couple years in a row. But what Sam alluded to in that video was some
00:46:08
nextgen whisbang device that they've been working on. That was the industrial logic for the M&A.
00:46:16
I think what you don't want to have happen if you're Google is to finally get the search thing right and then now
00:46:24
have to play catchup on some device. So I would encourage them to just run the AB tests and shorten the window of
00:46:32
measurement. I think we all know what has to happen. So, it's probably better to just do it sooner than later and then
00:46:39
start to allocate the incremental resources to these new form factors and other things so that they shorten the
00:46:47
distance between them and open AI. Let me tee up exactly what happened. OpenAI, they're the makers of Chat GPT, bought
00:46:55
Johnny IV's startup. The startup is called IO. They bought it for 6.5 billion in an all stock deal. If you
00:47:01
remember, Johnny IV was Steve Jobs collaborator and designer. iPhone, iPod, iPad, all that beautiful stuff. So,
00:47:09
OpenAI is buying IO. IO is not loved from, if you've heard about that. That's his design agency. And so, they did a a
00:47:16
really interesting romcom video. I don't know if you guys saw this. It's incredibly ridiculous. Let's play it.
00:47:22
Here are two people having a meat cute. Dude, you're right. It's like a love story. It literally is like a meat cute.
00:47:29
Here comes Sam. He's walking around San Francisco and he's a genius according to
00:47:34
this video. Here's what I have said about Johnny. I was like, I've never met a man who's so brilliant and so humble.
00:47:41
I mean, it's embarrassing the language. The responsibility that Sam bears is actually honestly beyond my
00:47:47
comprehension. He's a co-founder of IO. Yeah. Open AAI already owns 20% of it. Yes. No, no, 23%.
00:47:55
As all Sam Alman deals, if you learned anything, they're conflicted. But the the copy here I just want to get
00:48:01
your general the gentleman's comment on what I see you worrying about are other people or about customers about society
00:48:09
about culture and to me that tells me everything I want to know about surprised you guys are such haters on
00:48:14
this I'm excited to see what this thing is but I just thought this was like you're falling for
00:48:20
it the deepest I don't know why we're even watch but they're going to watch the 9minute video I wanted my 9 minutes back
00:48:29
Nothing happened. I want the device. They say they have a device. Okay, I'm giving them the benefit of the doubt.
00:48:35
They've invented something that they say is world changing. Okay, but they this is again I'm just using their words and
00:48:42
he's sipping a macchiato there. So that's important. Oh my god, you are so falling for the espresso video. This is
00:48:48
your problem. Jam, look at the glasses. I think the clue is in the video. Look at Johnny's glasses. The fact that we're
00:48:54
even talking about this such a problem. Let me let me tell you my 2007 my 2007 Apple iPhone moment. Steve announced the
00:49:03
iPhone. I got one of the I don't know first like few hundred few thousand. I was going to Vegas. So I got it on a
00:49:11
Friday and I had it in my hand. The way that people looked at me for those three
00:49:16
days. I've never been looked like at that ever or since. They liked you. People like what you were feeling was
00:49:23
love and admiration. All I had All I had was music. There was no multiple screens. You couldn't buy app stores.
00:49:28
Yeah. But it was so mesmerizing. And my point is, you're right. I may have fallen for it, which may seem crazy, but
00:49:36
when I saw that video, I thought, hey, hold on. All I'm saying is if there is a next generation device that they or
00:49:42
somebody else, my my only comment is I think Google is so wonderful. I love the people there. I just want them to be on
00:49:49
the forward foot and I just don't want them to be reacting for the next five years. That's all I'm Here's what Sam
00:49:54
said about Johnny. Johnny is the deepest thinker of anyone I've ever met. I mean,
00:49:58
this was a love story. I'm not justifying what they said about each other. Okay, let's handicap it here.
00:50:04
I'll tell you exactly what's happening. It's the glasses. He's wearing the glasses in there. They're making smart
00:50:08
glasses. Sachs, what are they making? What are these two guys up to? You know these guys. You know both of them for 20
00:50:14
years. Come on now. You know what's going on. Just spill the beans. Let me spill it. Let me express a hot take
00:50:21
here. But let me express in the form of a question cuz I don't want to I don't want to be too definitive with the
00:50:27
rhetoric. Okay, go which is is Johnny IV just a media creation? I mean no seriously just did Steve Jobs
00:50:37
manifest him? Well, I know he did good work at Apple, okay, don't get me wrong, but the software was done by someone
00:50:45
else, right? So, he did like the beautiful Eddie. So, you know, the whole and Scott industrial design. Yes, the
00:50:52
hardware looks beautiful with a beveled edge to paint a glass with a beveled edge. Okay, great. So, he has this
00:51:00
beautiful English accent which everyone associates with intelligence, right? So he could describe anything and it's
00:51:05
going to sound amazing and taste and taste 15% smarter, right? So I don't know. I mean, maybe he's like parlayed
00:51:14
this incredible reputation that he's built in the media into 2% of open AI. Open AI. It's incredible. I mean, what a
00:51:22
trade. What a trade. Do you think it was done at that $300 billion price? You think it was done at like a cheaper
00:51:28
price? Yes. Yes. Yeah. I mean, there is an argument. I'm going to go in Sax's corner here. I'm going to go into
00:51:34
Conspiracy Corner here. I'm going to say Dita Rams designed the iPhone, not Johnny IV. Pull it up, Nick. Well, I'm
00:51:41
going to say Tony Fidel designed the iPhone. Okay. But if you don't know who Dita Rams is, I mean, if you look at the
00:51:47
transistor radio, made the iPod. If you pull up the U Braraw radio, here is the power Mac. If you look at the iMac,
00:51:55
basically what did Steve Jobs Are you accusing Johnny IV of ripping off a German industrial designer? What I'm
00:52:01
saying is immature artists copy, immature artist steal. I am saying 90% of what Apple did was steal Dita Rams
00:52:09
design. I will die on that hill. 90% stolen. Johnny IV has been kned. He's Sir Johnny. He took Der Rams' nighthood.
00:52:18
That's what he did. Sir Johnny. I mean, Sir John, he did put the handle on an iMac, right? I mean, so you got that.
00:52:26
Stop. He did. You can move those iMacs around. So slanderous. Stop you guys. This is so brutal. So great, dude. Look
00:52:34
at this one. Pull this one up, Nick. Everybody knows the iconic iMac. I hate to break your hearts, folks. Totally
00:52:39
ripped off from deer. It was all inspired by the Germans. Sorry. So you're saying deer brawn is like the
00:52:46
Kaiser So of our entire physical world. Look, here's the speaker on the left. Look at the iMac on the right. These
00:52:52
guys took every design that deer did in the 60s and 70s, even the 50s, and they photocopied it and they put an Apple
00:53:00
logo on it. I couldn't Stop. Stop. Stop. Stop. Sax, am I wrong? Stop. I didn't know about the Der Braun angle.
00:53:09
I mean, listen, it is what it is. I mean, look, everyone at Apple did amazing work. There's no question about
00:53:15
it. But but I but I'm just saying like I don't quite get this like design god reputation that's been created a little
00:53:23
bit. But but I would say that it's certainly a brilliant idea to parlay that into 2%. By the way, is that what
00:53:30
San Francisco looks like? Like I never thought every time I go to San Francisco it's so disgusting and it's cloudy and
00:53:36
cold. But yes, did they find the one day where like the sun was shining in that hellscape? Yeah, there were no homeless
00:53:43
people and there was no fentinel. I don't know what happened. Yuck. On a serious note, what I would say is maybe
00:53:48
what this deal indicates is, I mean, obviously, is that OpenAI is going to do something with hardware. Sure. It could
00:53:54
be a new kind of phone that is AI first as opposed to the wall of applications. Or maybe it's like some sort of like
00:54:01
pendant thing that like tracks what's going on around you and feeds it into AI so it can give you more context. You
00:54:07
know, maybe like in the movie Her. Who knows? But it seems like they'll do something with devices in the physical
00:54:14
world. So that would be the play, I guess. I I guess the question you have to ask is,
00:54:19
will it make Open AI 1% more valuable? If it's a $300 billion company, 2% more valuable.
00:54:26
Yes, thank you. Will it make it more than 2% more valuable? If it makes it 1% more valuable, it was worth the the
00:54:33
swing, I guess. Right. I heard an interesting factoid yesterday which is by somebody who was looking at OpenAI
00:54:42
equity. All of the rounds before the $300 billion round from SoftBank had essentially a feature where there was
00:54:49
like a hard rate of return and the ability tax or something. No, but the ability to put the stock back if they
00:54:55
weren't able to do the conversion to a for-profit company, etc., etc. And in the $300 billion round, apparently it's
00:55:04
much cleaner and it's essentially like sub new co that is owned. And I thought to myself like, wow, at at those
00:55:13
valuations, I would have expected the terms to ratchet up. And instead, it seems like the terms have ratcheted
00:55:18
down, which is I don't It's either it's either commentary on the negotiating prowess of
00:55:25
OpenAI and their team and or the riskmanagement philosophy of SoftBank and the lack
00:55:31
thereof. I do think you know he is a great designer and he will make it one or two% better. Design matters. So if he
00:55:38
makes it I mean there's a chance right Sachs that he could make the product five or 10% better through design. I
00:55:43
don't think it's going to be one or two% better. I think it's going to be either
00:55:46
zero or a doubling of the company's value. Something like that. Right. like either he develops an iPhone like
00:55:52
amazing hit product no one's seen before some new consumer device that you know really could take the company to another
00:55:58
level or probably they do something that kind of doesn't work. So it's more of like a 2% option against a strike of
00:56:06
doubling the value of the company. I'm surprised it hasn't leaked because in the in Sam's update or whatever he said
00:56:12
that the that the executive team was shown the device and that he has it. Who? So what is it? It's it's definitely
00:56:20
going to be a pendant or glasses. It's got to be those two form factors. He was the investor in Humane. Remember, wasn't
00:56:27
that the pendant from the Apple people? Yeah. I will take the field against that. What are the odds and how much
00:56:31
money do you want to bet? Okay, here we go. So I think it's a a pendant like a wearable. We'd have to define that. So
00:56:38
like humane. I'll say it's not a pendant. Okay. Glasses. I get What are you going to give me? You give me odds.
00:56:44
I'll give you Give me odds. Well, we'll just do even money. Let's do even money.
00:56:48
Even money. I don't know. Whatever you want. How However many thousands of dollars you
00:56:53
want to bet. Even money. How about you give me two to one 10 dimes? Cuz you have every option. I have
00:57:00
to pick them. No. No. No. That's a pretty good bet. This is my You want to get in on the bet here? All right, let's
00:57:08
move on. All right. We covered Trump's trip to the Middle East last week, but our bestie Sachs was there as well. Um
00:57:15
and uh you did uh you got a couple photos to show and uh you met a lot of friends there. Tell us about the
00:57:22
experience of did you go first of all did you go on Air Force One? That's what everybody wants to know. Or did you go
00:57:28
on Airsacks? I took my own plane. So I know that sounds a little bit like a flex but
00:57:34
were you were you in formation with Air Force One? Were you like you know just right behind it or on your own travel?
00:57:41
You were on your own travel schedule. I was I was doing my own my own thing. But
00:57:45
did you have the option to go on Air Force One? I probably could have if I wanted to, but I I actually wanted to
00:57:49
get to the region a little bit early cuz I hadn't been before and I kind of checked it out and so I was waiting
00:57:54
there when the president arrived. Oh wow. So it was your first time in the region. Yeah. Well, tell us about your
00:57:59
impressions generally and uh what were you trying to accomplish there as the ZAR? Well, I call it AI diplomacy. First
00:58:05
of all, these countries are obviously they're very resourcerich. They've got a lot of capital to deploy and they're
00:58:14
also very interested in diversifying their economies. They're very interested in high-tech and they want to do things
00:58:18
in AI. They've got very significant aspirations there and so I was over there just to kind of listen and learn
00:58:25
and see what they're interested in doing and I also got to see some of their tech
00:58:29
scenes and just Oh, you went to Digital Garage in Riad, right? I've been there. Oh, you've been there? Okay. Yeah. Yeah.
00:58:35
No, no, it's um they are really pushing entrepreneurship, trying to generate more ideas and teach people how to start
00:58:41
companies and co-working spaces, all kinds of incentives in terms of visas to come to Riad, to come to UAE, you know,
00:58:49
Dubai, Abu Dhabi specifically. So, yeah. Right. I'm curious your impression of the individuals who are leading a lot of
00:58:56
these different groups. I was really taken back by how much time they had spent in the West. It seemed like every
00:59:04
single person I had met had taken one of these scholarships to go to Oxford to Harvard to you know Caltech whatever it
00:59:11
was they all had spent massive amounts of time in the west and then come back to either Saudi or UAE or Oman etc. So
00:59:19
maybe you could talk a little bit about the people and their knowledge base motivation etc. I had the same
00:59:25
observation. The elites of all these countries have all been educated in the west, usually in the United States, some
00:59:30
in the UK. The leadership tends to be young, visionary, future oriented, intensely interested in AI, like I was
00:59:39
saying, and they want to do big things in AI. The thing that that's been in their way is that in October 2023, the
00:59:48
Biden administration basically put a a blanket on the whole region acquiring semiconductors, GPUs, and it it required
00:59:57
that every export of a GPU or a server that contains a GPU had to get a specific license from the commerce
01:00:06
department. And it put a major damper on their efforts to do things like build data centers in the region.
01:00:12
or to have their own local AI efforts. So, they've been kind of in this holding pattern where the Biden administration
01:00:18
decided to kind of alienate them. And, you know, it wasn't just AI, there was other things, too. Remember the fist
01:00:23
bump? And the Biden administration was very, I'd say, hostile, standoffish, cool to, and even hostile towards these
01:00:32
states in the region. And I think from a geopolitical standpoint, it was just stupid because we're in an intense
01:00:38
competition, a high-tech competition, a security competition, economic competition with China. And these states
01:00:44
want to be aligned with the US and we are pushing them into China's arms. And if we don't give them the ability to buy
01:00:50
the American tech stack, it's not like they're going to sit on their hands and do nothing. They're going to be forced
01:00:56
to buy the Chinese tech stack. They're going to participate one way or the other, right? And China still has some
01:01:01
limitations on how many chips it can produce, but they clearly are building their own Chinese tech stack. It's a
01:01:07
Huawei plus Deepseek tech stack. There's actually a story in Malaysia just in the
01:01:12
last couple of days where they were talking about building a local data center using the Huawei Ascend GPU plus
01:01:20
Deep Seek. And then they walk back that story because I think they're afraid of getting in trouble with with the US
01:01:25
government. But the point is that if we drive these countries away, if we alienate them, they will end up
01:01:32
partnering with China instead of the United States. I don't understand how that's in the United States's interest.
01:01:37
Now, as part of this trip, we rolled out a new framework for an AI acceleration partnership with these countries. And
01:01:45
there's a few very important terms that I think it's worth going into. So, so first of all, the the purpose of the
01:01:50
framework is to replace the Biden export control to the region with a framework that gives them the ability to buy GPUs
01:01:58
and build data centers. Uh, but there's a few very important provisions. Number one is there's a matching investment
01:02:04
provision. So, for every dollar of investment they make in terms of building out data centers in the region,
01:02:10
they have to invest a dollar in the United States and building out our AI infrastructure. So it's a huge win for
01:02:16
the United States in terms of accelerating our own infrastructure buildout. So that's point number one.
01:02:21
Number two is even with respect to the data centers they're going to build in the region, at least 80% of the chips
01:02:28
have to be owned and operated by American cloud service providers or American hyperscalers. So even with
01:02:34
respect to the data centers they're building, the vast majority of the compute is going to be run by American
01:02:41
companies. And so I mean this to me is just a huge was there critique were people critiquing it like uh you know
01:02:48
this uh expansion I guess Ro Khan has said like hey we should build more data centers here that was sort of a light
01:02:53
critique maybe or a misunderst that that Ro was making and Ro is a friend but just you know I
01:03:00
respond to him on on X which is we are building out data centers in the US. We want to do as much as we can. It's the
01:03:07
Trump administration's policy towards energy that's making that possible. We're making it easier to spin up new
01:03:13
power generation and we're making it easier to permit. Both both those things were virtually impossible during the
01:03:18
Biden administration. So we are building more here in the US. In addition to that, you've got these countries who are
01:03:25
resourcerich and they have their own AI dreams and aspirations and we can either
01:03:30
partner with them or drive them into the arms of China. And the deal we've made is to enable their aspirations while
01:03:35
getting them to fund more AI infrastructure in the United States and even the infrastructure they're building
01:03:40
over there. First of all, it's going to be on an American tech stack, right? We want it to be Nvidia and AMD and those
01:03:45
types of companies. That improves our balance of trade. It also ensures that these data centers across the world are
01:03:52
going to be built on American technology. We want American technology to become the standard of course and if
01:03:58
you allow those data centers to be built on Huawei plus deepseek that will become
01:04:01
the standard. So I think this is something that people in Silicon Valley intuitively grasp but people in
01:04:07
Washington don't which is the way that you win these technology battles is you create the largest ecosystem right you
01:04:13
want to have the most partners you want to have the biggest app store you want to have the API everyone use the most
01:04:18
data power exactly so the point is we want to involve the whole world on our tech stack I think export controls on
01:04:25
China that makes sense but we don't want to reduce our market share in the rest of the world we want them getting hooked
01:04:31
on our platform platforms, making those platforms the standard and getting lock in before China can catch up to us. Sax,
01:04:38
did Jensen just say that he thought export controls were kind of pointless? Did he just say that recently? Yeah, he
01:04:45
he's against all export controls. And you know where I would split the baby here is that I think that most people in
01:04:52
Washington believe that the export controls on China make sense because we simply can't allow our most powerful
01:04:59
semiconductors to be to be used by China because of the dual use. Now, where I agree with Jensen is that I
01:05:08
think we should not place undue restrictions on the rest of the world using the American tax stack because we
01:05:14
will simply concede the market share to China. And so I think he's right with respect to the Middle East. Now the the
01:05:20
other concern that you heard a lot is around this quote diversion the idea that somehow the GPUs
01:05:28
or somehow the IP if we allow it to be used in data centers in the Middle East will somehow find its way to China and
01:05:36
yeah I mean the expression on your face Jal shows that makes no sense like these
01:05:40
guys have unlimited resources they have unlimited ambition that's just a naive point of view they want these for
01:05:45
themselves they understand the power of AI they don't want to give it to China they want it for themselves pounds. They
01:05:50
make trillions of dollars selling oil and gas. They don't need to smuggle our GPUs. It doesn't make any sense. The the
01:05:55
other thing is that that people don't understand, you know, they're called chips, but really these things are now
01:05:59
the size of mainframes. The NVIDIA data center product, NVL72, is this giant server cabinet. It's 8 ft tall. It
01:06:06
weighs 3600 lb. It's not like diamonds you smuggle in a briefcase, right? All you have to do is send You're not
01:06:13
putting them up and getting them across the border. That's definitely not happening. No, it's not happening. All
01:06:19
you have to do is send an inspector to the data center to count the servers and you can see that they're there.
01:06:24
Ridiculous. So this idea that somehow they're going to get smuggled. It's like this totally fake concern that's been
01:06:29
created. It's almost like a totally fake narrative, you know. Then people, well,
01:06:33
they won't physically smuggle the servers, but the IP will somehow be transferred to China. Look, there's
01:06:38
nothing in a data center that China hasn't already seen. They have one of at least one of everything. The issue is
01:06:44
that they can't reverse the advanced semiconductors just from the chips, right? Because it's about the process
01:06:50
technology that it takes to create an advanced semiconductor. There's hundreds or even thousands of steps in that
01:06:55
process. And you can't figure out the recipe just by seeing the end product. I would like to say that I'm very proud of
01:07:01
my bestie. I got three calls. I do want to tell you, Sax, you crushed it. I think you Yeah, it was pretty
01:07:08
impressive. put your best foot forward and people were really impressed. But I got calls I got three calls from the
01:07:15
powers at be. They were very psyched to meet you and spend time with you and they thought you were super impressive.
01:07:21
So it was awesome. Thank you for doing that. Well, I appreciate that. Yeah, it's an incredible region. I think
01:07:26
you're doing like a really patriotic thing. If you look at that region, like you said, it could tip one way or the
01:07:32
other. They could be involved with the West. They we could be building businesses together. And if we build
01:07:37
businesses together, that's better than them building businesses with China. Pretty obvious, I
01:07:44
think. I mean, totally. And this is the thing is I just don't get the opposition
01:07:47
in Washington to this. And I especially don't get how the opponents of this can call themselves China hawks because at
01:07:53
the end of the day, this is a tech battle between the US and China. And we can have these countries be aligned with
01:07:59
us and in our orbit, or we could push them into the arms of the Chinese. The choice is do we want these countries to
01:08:04
be the piggy bank for American AI or for Chinese AI? It's like say they have an investment level that they can do that
01:08:13
dwarfs anybody else in the world with the exception of Norway and the United States. I mean they can put a lot of
01:08:18
money to work and here's the thing they want to. It just hit the wire that OpenAI is partnering on a 5 gawatt data
01:08:24
center cluster in Abu Dhabi with G42. Well, let's hold on. Let's just be clear about so the the 5 gawatt cluster or
01:08:30
it's more of a a campus that's going to support many American hyperscalers and cloud service providers and they're
01:08:38
going to be one of the tenants. So, I think they're saying that they're going to have 1 gawatt. There's still 4
01:08:42
gawatts to go that they plan on supporting. Well, well, the the the most interesting part of the deal it said was
01:08:48
that as part of the deal, G42 plans to make a reciprocal dollar for-dollar investment in AI infrastructure in the
01:08:54
US. So to your point, Saxs, it's like perfect. Cooperating like this, I think just makes a ton of sense. Absolutely.
01:09:01
And this is not dumb money, by the way. These are very smart people who are investing very strategically with a very
01:09:07
crisp, you know, group of individuals, like you said, who have been educated in the west. You know, when people explain
01:09:13
to me, oh yeah, just go to Abu Dhabi and come back with a a suitcase full of money. No, these are folks who want to
01:09:18
be on the board of companies. They want to company build. They see themselves as
01:09:22
owners in business, not just investors. And then they want to do it domestically
01:09:26
and abroad. The amount of investment that they're going to do in the next 30 years is going to dwarf what we see out
01:09:33
of universities and retirement accounts. I don't people understand the scale of what's happening. This is why I just
01:09:38
don't understand the point of the Biden policy of alienating these countries and
01:09:43
making them feel uneasy about their place because you you don't know who it was that made the decision. Yeah, I
01:09:51
mean, let's face it, that guy was confused. We can have Bernies. I've actually have a pretty good idea at this
01:09:56
point of who was controlling the auto pen on AI. There was a group of of very powerful staffers in the Biden
01:10:02
administration, about half a dozen people who kind of controlled AI policy. And the interesting thing is none of
01:10:08
them have ever worked in Silicon Valley. They're all basically lawyers. And they
01:10:12
don't really have a good understanding of the idea of a platform or a technology ecosystem or a stack. And I
01:10:18
don't think they realized that by alienating these very resourcer-rich countries that they were creating a huge
01:10:28
opportunity for China to come in and serve the region. And this is why I think this, you know, again, what I call
01:10:33
AI diplomacy is so important is it boxes out China. It's good for America. It's good for our companies. It's good for
01:10:39
our trade balance. It makes us the standard and it boxes out China. What's not to like about this? I really don't
01:10:45
get it. I you know I think they were living in a world where they put people into very rigid buckets. If you wanted
01:10:52
to look at human rights as an issue, which I think is what some people were doing in that administration, I look at
01:10:58
the progress that's being made and if you go to these societies and you look at what's happening in that region, the
01:11:04
pace at which human rights and individual freedoms is growing and the rate at which those societies are moving
01:11:11
forward, it's going in the right direction. So what do we want to do? Do we want to steer people towards
01:11:15
collaboration and working together to build the future or do you want to have it devolve? I mean, it's such a stupid
01:11:21
decision by the Biden administration. I It was perplexing. Yeah, I I really don't get it. I I don't understand what
01:11:26
the point of alienating these Gulf States was. Well, I like Trump's approach there when he said, "Listen,
01:11:33
you're going to make decisions in your own time." That's what they want to hear. They want to be respected as they
01:11:39
respect us. Hey, we're going to make decisions in our own time what's right for our people. That's a process that
01:11:43
we'll decide. Now, if you want to collaborate on building a company, a data center, a technology platform, hey,
01:11:49
we're here for that, but you can't tell us how to run our society and just like we wouldn't want them to come here and
01:11:54
tell us how to run our society, right? So I agree with what you just said Jal and I thought the best part of the
01:12:00
president's speech which the whole thing was excellent but the best part was when
01:12:03
he talked about how the neocons and the interventionists had come into the region and lectured people and come in
01:12:09
with this very moralistic point of view and made all these interventions that basically wrecked countries and it's it
01:12:16
wasn't the the neoconsi interventionists who have led to so much progress in the
01:12:20
Middle East and in the Arab world it's been the countries themselves whose own leaders ers have set the the path and
01:12:27
have had the vision. That was an incredible speech. It was incredible. Trump for me. Yeah, he did a great job.
01:12:34
Credit do and that's the message they've wanted to hear for a long time and that's the message that moves society
01:12:40
forward. All these other messages just sort of set it back and um I think I'm I'm super hopeful about the region.
01:12:46
Okay, let's do Science Corner. you know. Oh, by the way, I just I was just checking um X here and it looks like
01:12:52
there is a um announcement on what the Open AI device is going to be. You guys see this? Here we go. Oh, the puck. The
01:13:01
little puck. I saw that puck, but it hasn't been confirmed yet. Oh, it's a puck you put on your desk and it Yeah,
01:13:06
it's like a puck with a camera and a hole for a mic. Oh, that's a pin. Yeah, that's a pendant. It's a pendant. I
01:13:11
could have made 10 times straight up versus a pendant. That's a puck. It fits in the palm of your hand. It's
01:13:17
too small to be a puck. A puck's like the size of your hand. It looks like your thumb. Okay, this is AI generated.
01:13:23
It's not actually the device. They haven't shown the device from Johnny IV yet. Somebody just took what's in the
01:13:28
Wall Street Journal report. They mocked it up. This is their best guess as to what it might look like. This is already
01:13:34
out. And by the way, this is going to get you punched in the face. You show up with a listening device to a party or a
01:13:40
meeting, I'm gonna knock you out. This is ridiculous. And it's got a camera in it, too. I don't want this surveillance
01:13:46
device anywhere near me. How are you going to do it? Like this? Yeah. Get that buck away from me.
01:13:56
Yeah. Okay. Anytime you're ready, how dare you record me and violate my privacy. I was literally at dinner the
01:14:02
other day. I kid you not. And somebody came up with one of these things and it was clipped on his thing. I said, "Hey,
01:14:07
uh, what's the thing on your lapel?" He said, "It's an AI recording device. It does. Uh, it summarizes what we're
01:14:12
doing. I said, he goes, "Oh, do you do you care?" I said, "Do you care if I punch you in the face for covertly
01:14:18
recording me?" And he said, "Yes." I said, "Well, then turn it turn it off." I mean, literally, let's talk about
01:14:24
science. Let's talk about science. I mean, well, you rais a good point, Jay Cal, that these um these new devices
01:14:30
No, these new devices requires a level of trust that is kind of unprecedented. Yeah, I mean you
01:14:37
already had to trust, you know, Google and iPhone and so on because they do have a huge level of access to your
01:14:43
data, but the new let's call them AI connected devices. I mean they are surveillance devices. I mean their whole
01:14:50
point is to listen and see everything that you can hear and see and you know and then to give that data to AI to do
01:14:58
something with and um man you better trust that company completely. Oh yeah. Which company's doing it? Oh right, that
01:15:04
company. Yeah. Hm. The company that had every leader leave because they didn't trust the founder. Okay. All right.
01:15:12
Yeah. Go ahead and wear the puck. And by the way, with these pucks, I'm going to
01:15:14
make one more point, Freeberg. I'm sorry. These devices need to have a red flashing diode on them when they're
01:15:19
recording. We need to pass legislation that it does that. If it's recording, it should have a flashing red light on it.
01:15:25
Let's go to Science Corner because everybody Chim loves Science Corner. Freeberg. Some breaking news, some uh
01:15:32
innovations in Crisper. Yes. It's got a lot of press coverage, but there was a baby born named KJ in the research paper
01:15:40
that was published was born with a mutation that was inherited from the mother on a specific gene called
01:15:48
CPS-1. And the same mutation inherited from the father, which resulted in the fact that this gene has a deficiency in
01:15:55
it. CPS1 produces a protein that's part of the ura cycle. So basically breaking down nitrogen or protein compounds in
01:16:05
the blood so that they can be excreted. And in the absence of this protein, if this protein is not being made in the
01:16:11
body, ammonia accumulates in the blood and that has extraordinarily harmful consequences including brain damage and
01:16:19
ultimately death. This gene had a G that was mutated into an A on both of the copies of the gene meant that the
01:16:29
protein wasn't being correctly produced. And as a result, the breakdown of nitrogen and ammonia was not possible.
01:16:38
And so this leads to a very short life for the very very very very few people that have ever had this double mutation
01:16:45
that this particular child was unfortunately born with. So we have technology today, crisper gene editing
01:16:51
technology. In fact, crisper gene editing technology is what we use to do some of the work we do at Oh, the
01:16:57
company I run. And um some advanced forms of gene editing technology include what are called base editors where you
01:17:04
can change a single letter on a strand of DNA into another letter. So in this particular case, changing an A to a G
01:17:11
was the goal. So the physician Rebecca Arens Nicholas, giving her a big shout out for the incredible work she did in
01:17:17
partnership with scientists at the University of Pennsylvania, they developed very
01:17:22
quickly a very specific gene editing target to go in and find the letter A and turn it to G in this particular
01:17:32
patient's body. Now remember, we have the same DNA in all of our cells in our body, but specific cells have specific
01:17:39
functions and genes are expressed in only those cells. So in this case, it's the liver that makes this this CPS1
01:17:48
protein. And so they had to get the gene editing into the liver cells to edit the
01:17:52
liver cells. And if they could edit the liver cells, then those liver cells would start to become more functional
01:17:57
and you would have a functional protein. So they quickly tested dozens of base editors. These are different proteins
01:18:04
that can go in and edit. They tested different guide RNAs. These are the guides that tell that editing protein
01:18:10
where to go, what part of the DNA to go to, which is trying to get it to this exact same site. They tested it in petri
01:18:16
dishes. Then they tested it in mice, then in monkeys to make sure that the selection that they came up with worked.
01:18:22
They then put it in the child. And so basically by putting it in the blood found its way into the liver and that's
01:18:29
the the the the fortunate benefit here was at the end of the day you're trying to edit specific cells and we can get to
01:18:35
the liver by putting the crisper and the guide into the blood. It made its way to
01:18:39
the liver and they coded the gene editing system with liquid nanop particles which helped it get into the
01:18:46
cells. It got absorbed by the liver. It got went into the cells. It found its way to the site on the DNA. That's
01:18:51
amazing. converted the A to G and as a result those liver cells became functional to make the protein that
01:18:58
breaks down the ammonia in the child's blood. And so they did the first one just to make sure the child would handle
01:19:03
it. It worked. The child didn't have any adverse effects. They then did the second dose, able to take the child off
01:19:09
some of the medicines and compounds they were giving the child to break down ammonia in the blood and they gave it
01:19:13
the third dose and they're monitoring. So this is the first time that we've seen this kind of custom crisper gene
01:19:20
editing for a genetic mutation being applied to a patient in vivo in the blood for a specific target for a
01:19:27
specific particular uh treatment. I just asked rock how many diseases are because of an adg point
01:19:36
mutation and it says it's hard to estimate through the human genome database or clinvar but it estimated
01:19:44
between 20 and 30,000 conditions are because of an ad point mutation and isn't that incredible? Yeah. And I'll
01:19:51
tell you one other story about this. I saw a geneticist here at UCSF a couple years ago and he was telling me about
01:19:59
all of these kids that come in and they don't know what's wrong with them and he
01:20:03
can see on the kid's face. He can see a disease condition. They have all these weird lab tests and the kids are dying
01:20:08
or they're really deficient in some way and they can't afford to do the DNA sequencing because the child is on
01:20:14
medical or some other sort of like healthcare plan and it costs like $5,000 to do the DNA sequencing needed to
01:20:20
figure out what genetic mutation this particular child has. So there aren't easy offthe-shelf targeted tests or lab
01:20:27
tests you can run to figure out when people have genetic disease. And so this is a an incredible like undiscovered set
01:20:35
of problems. Chim off to your point that there are likely millions of people out
01:20:38
there that have some health condition that they've not yet been able to identify because it's a genetic mutation
01:20:44
and not everyone can afford to go out and just get their genome sequence to figure out where the mutation might lie
01:20:49
in their body. And so as we discover more and more genetic mutations, we build targeted tests for identifying
01:20:54
that people have them and hopefully over time can start to build more targeted therapies like this one to go after and
01:21:01
make the changes at specific sites to fix the the genetic mutations. Bad ass. It's incredible. Okay, somebody wake
01:21:08
Sachs up. Sax, just so you know, one thing about America is we've got a pretty good
01:21:14
advantage in gene editing technology today. And China is on its way coming after the US on this technology front as
01:21:20
well as AI. You woke him up. You should peak his interest. China's coming for Uranus. And you will see some very good
01:21:27
posts recently on people talking about how a lot of technology that's been developed in the United States is being
01:21:33
transferred to China. and they are building biotech companies and biotech solutions that take American IP and put
01:21:38
them into market and this has also had a very big dampening effect on the biotech
01:21:42
market. So what do you think we should do about that? It should be in the trade negotiations
01:21:48
some tighter IP controls. I can tell you Saxs that a very large company I had a conversation with their CEO and they
01:21:56
said this exact thing which is that the amount of IP that's available for purchase or for
01:22:02
licensing questionable provenence but how effective and good it is is causing them to figure out how to establish more
01:22:09
of a presence to just buy stuff there. It's kind of like so what does that mean? Meaning that let's just say you
01:22:15
have an R&D effort in the United States. you can almost hedge your bets by having
01:22:20
an outpost in or near China, let's say Hong Kong, where there's an equivalent project for almost anything that we're
01:22:27
working on happening there at the same time in real time. And so if you can't figure out how to get it here, you can
01:22:33
get it there and it's much murkier and the the laws are sort of unclear and it's just different enough where you can
01:22:41
kind of get to the same place. So it's just to say what Freeberg said, which is that the amount of R&D that the Chinese
01:22:49
are doing is roughly equivalent to the amount of R&D that the United States is doing. Yeah. And so as a result,
01:22:55
everything that we discover, they discover. And so it really is a foot race. And we're kind of neck and neck.
01:23:02
For sure. This is a perfect time to make sure that we have an electricity deficit. Perfect time. Well, I agree
01:23:08
with you. We need to build out power, but I think the administration's committed to doing that. Drill, baby,
01:23:12
drill. I'm not questioning Trump's desire. I'm talking about the actual congressional bill details. I saw
01:23:18
yesterday the Tennessee Valley Authority filed the first ever application for a small modular reactor. Let's go.
01:23:25
Hopefully, it gets approved very quickly. This is, by the way, I I I will watch this. I think others should watch
01:23:30
this to see how quickly they're able to get through the regulatory process to get that thing approved. And that will
01:23:36
be a very good indicator if it gets approved and they can get fast permitting, fast deployment. That would
01:23:40
be an incredible insight on how quickly the US will be able to scale power production for AI over under 2032. What
01:23:46
exactly? Let's do a poly market. Great. Let's do a poly market and let's you should create a special Trump
01:23:53
designation like a speedrun designation. When something's super important, he puts the speedrun designation on it and
01:23:59
they they actually attempt to do it as fast as possible. I don't know if you guys watched my interview with Bergam,
01:24:03
but he said that there's a permit for a copper mine that's been outstanding for 30 years. They've been trying to get
01:24:09
through the permitting process. 30 years to get this copper mine started to run.
01:24:14
And now he and the team are trying to fasttrack this thing. But 30 years it's been sitting through a Here's the good
01:24:18
news. The Manila folder has made its way down the elevator. So, it's down there in the subb
01:24:25
uh shipped. But let's go ahead and get rid of Doge. Let's get rid of Doge and keep things Let me ask Let me ask
01:24:29
Freeberg. Well, I don't want to get rid of Doge, but let me ask you a very question. No, I'm joking. I'm like,
01:24:34
yeah, I know. Given the amazing advances that you see coming with crisper, biotech, but also AI, robotics, what are
01:24:42
the odds that we can grow our way out of this fiscal problem? Yeah. Yeah. I do I I I'll be honest. I think
01:24:51
the limiting fac so the crisper side is going to have profound effects in longevity, human health, and food
01:24:57
abundance. So those are I think about abundance in four ways. One is abundance of food or calories. One is in abundance
01:25:05
of labor through automation. One is in abundance of lifespan or longevity. And one is an abundance of what I think is
01:25:12
the most important and gating factor which is energy which leads to everything else. So you can't have the
01:25:17
labor savings without the energy and the productivity improvements without the energy. So the thing I do watch the
01:25:21
most, Sax, and that I do think you and I have talked about this that I do think is the critical lynch pin for all of
01:25:26
those other points of abundance being unleashed is the energy equation. And this is where I look very clearly and
01:25:32
plainly at what China's doing versus what where we're at today. We've got stated intentions, but the actions are
01:25:38
where we're still, you know, we got to start showing up. That's it. But let's assume that we have enough power. I
01:25:43
mean, my point's really about Yeah. If we have enough power, the 38 trillion of debt doesn't matter. Really? You you're
01:25:49
saying that in a No, I'm very very serious way. That's a pretty that's a pretty important conclusion because if
01:25:57
that's true and we can grow our way out of this problem, then that's an alternative to having this austerity
01:26:04
approach where there's for which there's no political, you know, will sax listen.
01:26:09
If I saw us adding a terowatt of electricity production capacity per year in the US, I would shut the up about the
01:26:14
debt. I wouldn't care. terowatt. We're talking about gigawatts. Yeah, I'm talking about one terowatt. No, I know.
01:26:21
But I'm saying I'm like chi China, you guys know China right now is dealing in in gigawatts. Yeah, I know. Have a
01:26:28
terowatt and China is dealing in terowatts. China is moving. I mean, we've been through the numbers, but
01:26:33
they're going to they're adding an entire United States every 18 months. Every 18 months. Yeah. So, every
01:26:41
18 months, China adds all of the power production capacity of the entire United States. additional to their grid mostly
01:26:48
in nuclear and solar. Solar is a big component. Hydro hydro is look at the look at the
01:26:53
number of times they're adding like hundreds of gigawatts just on the on the Yang. Yeah. Look at the number of times
01:27:00
that Elon has said this. Like it's like the amount of energy that's available if
01:27:05
we just harness it from the sun and redirect it with some storage would solve all of our problems. But the
01:27:12
problem is that we're at like just a little over a terowatt. We're inching along in gigawatts whereas China is in
01:27:20
the terowatts adding terowatts. Yeah, they're in that chart. There are three ter
01:27:26
corner of Arizona or Utah going to eight and we're at one going to two. Yeah, I've shown this many times before on
01:27:33
this show. Crazy. This is in this is total production over a year. So this is terowatt hours and this shows 4,000
01:27:40
terowatt hours is where the US is at. If you break that down on basically a continuous production, you measure it in
01:27:47
watts. So the number of watts that the US can make in any given point in time or is making any given point time is 1
01:27:52
terowatt, 1 trillion watts. Meanwhile, right now, China is making three terowatts and they're scaling up to make
01:28:00
eight. We are at one going to two over the next 15 years. So you consider this graph to be more
01:28:07
important than the the budget deficit graph? I do. And I'll tell you why. Um, I've got another chart. I can pull it up
01:28:14
for next time. So, now do you think it's esoteric sachs to like add these line items that this market? Well, I don't I
01:28:21
just don't I mean, you're talking about I I just I'm not sure. You're going to have to provide a lot more information
01:28:27
about what exactly is No, but I mean, look, it's obvious. It's obvious and Blackstone. And I just want to translate
01:28:34
this. I It's so obvious that any reporting on that, Jamath, I just haven't seen anything. It just happened
01:28:39
last night. This is the point. I'll just say one thing because I think it's I just want to add it at the end. Sure.
01:28:44
Automation which is unlocked by AI. We are going to see an explosion of robots. They're not going to all be humanoid
01:28:50
robots, but like robotics allows humans to get an incredible amount of work done. Imagine
01:28:56
having the cost to build a giant building go down by 50x. That's what this unlock unleashes is all of this.
01:29:03
Optimist doing it. Yes, we'll have optimist but we'll have these robotic devices doing it. You can see it in
01:29:08
China. Go look at how they build bridges. It takes like 3 days to build a multi-m bridge in China because the
01:29:13
whole thing is automated. They do automated drilling. They do automated mining. They do automated building. All
01:29:18
of that If we unleash that capacity in the United States, we can build things that are economically
01:29:23
productive for America. All of this gets unleashed. The technology is here today.
01:29:28
The only thing that's missing is the power. We want this. David, I would just then ask folks, go talk to like Duke
01:29:34
Energy, go talk to Constellation Energy, go talk to the the drillers, but they'll
01:29:39
all tell you the same thing. If you want a NAT gas turbine, we have to wait until
01:29:44
2030. Why? Because China owns them all. They make them all. So, if you say, "Hey, Chimat, drill, baby, drill, and
01:29:51
use that gas." And I say, "Okay, I'm waiting in line for 5 years to get a turbine." So, then it's like, "Okay,
01:29:57
what can I do? Nuclear? I can't because that'll take till 2035. So then I'm like, okay, I'll go
01:30:03
into the tax equity markets and I'll finance myself residential or industrial solar. And when that goes away, there is
01:30:09
no energy. Somebody should just go and figure this out. By the way, this is our Manhattan project. This there was the
01:30:15
Manhattan project, then there was the Apollo project. This generation's Manhattan and Apollo project is energy
01:30:21
production scaling in the United States. That's it. All the other flows. We don't
01:30:25
need the government to do AI. We don't need the government to do automation. private market. Let us let us do the
01:30:30
energy. We need to figure out how to get energy and you can't decapitate the markets that finances it. We're all
01:30:35
willing to put up the risk capital. That's the crazy part. We don't even need the government. I don't know any of
01:30:39
the details of what Jama's talking about, but I mean generally like you think and your chairman dictator
01:30:45
dictator. Yeah. Chairman dictator. Who you dictate for your chairman dictator? I'm trying to close the show for the
01:30:52
seventh time. your chairman dictator Chimath Payatia Yar David Sachs Sultan of science I am the world's greatest
01:30:59
moderator I'll be in Singapore next week if anything's popping off Jasonallin.com hit me up why do you
01:31:06
broadcast your location I don't what what are you I'm going to Singapore I'm doing a bunch of public events people
01:31:11
know you're the same one that wants to like for the pin and then you're just telling people where you're at put on
01:31:16
see what happens tough guy put the pin on the pin I'm sorry you took allin.com as your email address. Jason.com. We
01:31:24
each have that. Wait, but don't broadcast that out, bro. Come on. Just email me.
01:31:30
Jasonin.com. You know how long that domain? That's your domain. This is not your domain. This is
01:31:40
all you ungrateful pricks. Why do you use that for negotiation? Oh my god. I can't even goddamn email. It's
01:31:49
not in the contract that you get the email. Jasonallin.com for life. I think we should charge you 50k a month for that.
01:31:55
Email for life. Executive producer for life and email for life. We'll see you all next time. What are you going to
01:32:01
Singapore for? He's trying to pay you 25 grand. What are you doing? This is a plug. This is a
01:32:06
plug. Singapore. There's no plug. I'm in Singapore next week. That's it. You were
01:32:10
in the Middle East last week. Yeah, but I didn't pre-announce it. You didn't pre-announce it. You were on CNN.
01:32:17
You pay for your business class ticket, Jake Hell, to come to a talk. Is that what's going on here? You got a free
01:32:22
ticket. Let's go. First of all, first of all, let let me just tell you I speaking
01:32:25
gigs are six figures now, I flown private to Singapore. Never again. That is the dumbest thing. Fly Singapore
01:32:32
Airlines. The best. The best. Are you doing Singapore first, Jal? The Yeah, I don't know. I think I'm United,
01:32:39
actually. But do not fly United. Do not fly United to Singapore. Oh, really? Okay, I'll switch it out. Fly Singapore.
01:32:44
What do you think? Raffles? You like raffles? Raffles is the best. That's what I keep
01:32:49
hearing. Let me have the best. The best. The best. Beautiful. All right, everybody. We'll see you next time.
01:32:53
Byebye. Love you guys. Byebye. We'll let your winners ride. Rainman David S. And it said we open sourced it to the
01:33:06
fans and they've just gone crazy with it. Love you. Queen [Music] of your life. Besties are gone.
01:33:20
That is my dog taking notice of your driveways. Oh man, my appetiter will be. We should
01:33:28
all just get a room and just have one big huge orgy cuz they're all just useless. It's like this like sexual
01:33:32
tension and we just need to release something else. Your feet. We need to get mercy.
01:33:45
[Music] I'm going all in.