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All right, everybody. Welcome back to your favorite podcast, the number one podcast. In fact, in the entire
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universe, the Allin podcast with your besties. We're all here. It's the original quartet. Everybody loves When
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the Core Four are here. And we have a docket for you today, guys. We got to start out with Bernie Sanders. I know
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this is becoming a bit repetitive, but AI is the topic. We reached a new level of retardation
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this week that we cannot avoid. Bernie Sanders has a major del pitch, a moratorum on new AI data centers.
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Here's his argument. Number one, the billionaires are pushing AI because they
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want more money and power. Number two, there's going to be massive unemployment. And he cites Skates,
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Staro, Elon, saying that a AI would replace most jobs. Number three, he uh has an interesting point actually. AI is
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harmful to kids because it decreases social interaction. Actually, we kind of agree with that one, I think, across the
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board. But here's his pitch, Sachs. His pitch >> you want your using these chat box.
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>> No, I've talked to my kids about it. >> Okay, we'll get into it.
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>> We can get into it, but I've talked to them about it. Look, if you actually
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look at the data, if you look at what kids are doing, it's so much more interactive and engaging for them to
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talk to their friends on Snap or to watch videos on Tik Tok. Those things are super engaging. Whereas doing
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research on an AI chatbot is just it's way less engaging and you see this in
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the data. So, I'm not saying there's not an issue there. You want to pay
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attention to the way that these technologies are shaping the minds of young kids, but I think people get a
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little bit confused. what they're really talking about is social media and then
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they attribute all the ills of social media over to these new AI chat apps and they are a little different. You know,
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when I when I asked my kids like >> how much do you use these things? Are they addictive? They said no, they're
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more just really useful. It's like Google. >> It's like there's two
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>> I couldn't do school without it. >> Yeah, there's two pieces here. One,
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using AI to be smarter and to learn stuff and ask questions. Absolutely fantastic. phenomenal. I think we'll all
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agree on that. There is, and I don't know if this is actually what he was referencing, but there's character AI in
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a in a long tale of spicy chats where people we talked about getting oneshotted and these parasocial
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relationships. That's I think what he's referring to, but maybe I'm reading it
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wrong, >> but let's get into it here. His pitch is that we need to slow down so that quote
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democracy can catch up and that Congress should put a moratorum on new data centers. That's his solution. He got
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roasted obviously on social media for this. It's the most absurd I think solution to you know what are valid
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concerns. friend of the podro kind of who represents Silicon Valley. He I guess supported it a bit and then he
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replied to me and says his concerns are not as acute and that he just wants to make sure we use renewable energy which
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I guess is you know a fine position to have poly market put up a little uh market here AI data center moratorium
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passed before 2027. Yeah, we'll see if that comes true or not. But uh hey Saxs, you are our SGE.
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Sachs or SGE, this is your time to shine. You have framed the AI debate as we can't lose to China. Bernie framed it as
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not letting the billionaire class get more power and money by eliminating American jobs. And last week on this
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very program, Tucker framed it as what are Americans going to get out of this? Right? That that was the framing, you
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know, as of December of 2025. So here's your chance, Sax. Why should Americans
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who have some concerns about losing their jobs care about beating China? Why should they care about that sex?
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>> Why should they care about beating China? Because AI is a profound technology. It's going to have huge
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economic and national security implications. And the thing that Bernie gets wrong is that he can't stop the
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progress. I mean, he can't stop China from making progress. We can stop progress in the US, but it's not going
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to stop China from advancing these technologies. A lot of this is just math. And just because we stopped
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doesn't mean China's going to stop. So, this would be the biggest own goal ever
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if we took our leadership in the AI race and just handed it to China. But look, I
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appreciate Bernie's honesty in a way because he is actually telling the truth
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about what he wants. And I remember just a week ago when President Trump signed an executive order to advance a national
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AI framework, a lot of critics and a lot of Democrats were saying this was a violation of states rights and we need
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to support the states and regulating AI. And here Bernie is acknowledging that this is not about states rights because
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he's saying that there needs to be a moratorium on new data centers even if the states want them. So he doesn't
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support states rights either. He just wants all the progress to stop. And I think this is really the truth of the
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matter is that all this talk about states rights or affordability, it's all a red hearing. And what's really going
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on is there's a large and growing contingent of people who just want all the progress to stop. But again, we
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can't stop China from making progress. So all they would be doing is seeding
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leadership of this AI race to China. What people like Bernie really want is they want the US to become like Europe.
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You know, Europe has half the share of global GDP that they had 30 years ago. And that's because of their hostility
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towards innovation and technological progress. And that's kind of where Bernie wants us to be is he wants us to
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go down the the path of Europe. And the reason he says is because, god forbid someone gets rich. Well, look,
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capitalism sometimes results in the unequal distribution of wealth, but socialism always results in the equal
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distribution of poverty and misery. And if the US stops developing AI, if we hand this leadership to other countries,
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it'll make the United States poor, it'll make the American people poor, and it
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will seed our leadership globally. We will not be the pre-minent power in the world anymore.
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>> Okay. >> So, I'll stop there. >> No, no, it's great. Thank you. SGE David
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Saxsberg, there seems to be a couple of conversations. Unfortunately, we weren't
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here last week, but we had a really nice uh visit from our pal Tucker, and we talked about this. He seemed to think
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there was a bit of a communication problem with selling to the public the value of these technologies. Do you
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agree with that? And what do you think's going on here in terms of the cross
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conversations? One group wants to del, has some concerns, environmental, you know, job displacement, etc.
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And then there is there an issue where the China beating China doesn't resonate
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with the American populace? You've been harping on about the rise of socialism
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for four plus years on this very podcast. So from where you sit, what's the actual disconnect in these multiple
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conversations that are going on concurrently and and seemingly coming to a head here at the end of 2025? Well, if
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you ask any of the politicians that are making these proclamations about the quote tech barons and try and actually
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talk to them about what is the AI technology delivering, what is it not delivering, you kind of typically hit a
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wall pretty quickly. It's very hard for folks to articulate what is actually
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happening. There's a tremendous amount of capital being put at risk against infrastructure to build out the capacity
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for many companies, the entire economy, the entire industry to deliver AI tools.
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There isn't an aggregation at this stage of value creation with the exception of Nvidia which has really got
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this $3 trillion market cap creation that's happened in the last couple years. Peter Teal said this best. He's
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like look at all the money that's going into AI. There's really only one company
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that's making any money and that's Nvidia. Like at this point the juryy's
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still out. We don't even know what AI is. It's sort of like when the internet
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was happening. You know, everyone thought these fiber optic switch companies were going to make all the
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money. Turns out that was wrong. It was the end applications that made all the money and they competed in many
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different markets from Google to Amazon to Uber. You can go down the list of all
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the beneficiaries of the core infrastructure technology of the internet that was built out. So what is
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really going on? Well, AI is the new lightning rod for fear and for divisiveness that ultimately breeds
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compliance and control, which is where these politicians are trying to drive the the populace and the voting
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conditions in the United States. And that's what's going on right now. There's a lot of fear about, oh, putting
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this data center in my town is going to do X or Y or Z with no real conversation
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about the truth of that matter. There's a lot of fear about wealth creation being aggregated in the hand of a few
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when, as we saw with the internet, it benefited the many. And that fear mongering is a very similar tactic that
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we've seen in the prior generations where policies were misstated, fear was used, and then voting control allowed
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folks to come to power that were looking for power. So I think it's just the
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lightning rod at the moment. >> Okay, Jim, what's your take on this big
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picture? What's going on here? >> I think it's important to understand
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that politicians have an incredible sense of self-preservation. So the question is why would Bernie
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Sanders think he would not look totally foolish in putting that video out? And the reason it went viral is not because
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it sounded so crazy. It was that to some faction and percentage of people it sounded rational and reasonable.
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And the problem that highlights is that we have a huge perception issue in AI. We have a handful of companies.
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All the PR that you see from those handful of companies is a bunch of circular deal making. It's a bunch of
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capital that flows from one to the other. It causes these stocks to go up of which a small percentage of people
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benefit. And at the tail end of it, it's accompanied by a completely different
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set of articles that everybody also reads about the sort of damocles that's about
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to fall on their head. whether it's electricity prices or whether it's their
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jobs or whether it's the jobs of their children or the quality of their education. So we have a big perception
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problem. So the question at hand is how do we fix it? How do we get back to the place where a video talking about
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stopping all progress would seem as laughable as it should be? And I think you can go back to the guilded age and
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you can ask the question, how did the industrialist leaders of that era respond through that 1880 to 1920 age of
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industrialization when you had all of this technological upheaval accompanied by a handful of people with incredible
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success, right? Andrew Carnegie, John D. Rockefeller, Henry Ford. What did they do? And I think the lesson we can borrow
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from them is we now need to be on the forward foot as an industry. Enough of the stupid haircuts, dumb watches, ugly
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clothes, ostentatious displays of wealth. We've all done it. I've been guilty of it. It has to stop. Absolutely
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stop. And instead, we need to start to use a percentage of the balance sheets of these companies in order to benefit
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as many Americans as possible. That is the absolute minimum. Andrew Carnegie built 2500 libraries.
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The idea was as he built the railroads, you're going to scale GDP. You're going
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to scale education and knowledge. Those libraries are artifacts that allowed people to feel a dividend from that
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industrial revolution. John D. Rockefeller took all of his wealth and invested in institutions and
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universities. Henry Ford specifically focused on wages. We need to self-organize better and we need to be
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more on the forward foot. We need to start doing things that are practically measurable by tens of millions of
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American citizens. And it starts to beat back the perception problem that we have
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because Sax pointed out last week, the data does not support the misperception. But the problem is, and Sax and I were
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talking about this last week, the misperception is gaining steam. And so I think we need to use these tools that we
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have to provide some more practical benefits that every man, woman, and child can feel. Otherwise, this thing is
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going to build and you'll see crazier and crazier versions of this Bernie Sanders video.
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>> All right. I think it's well said and you know, as I said last week, I think
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beating China does not matter to the average American. It's below their line,
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Jimoth. Uh I think in many ways what they care about is jobs. They care about their kids getting jobs and yeah, they
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care about costs. They care about inflation. They care about energy costs going up. Our industry has done a
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terrible job of explaining how this benefits the average American. And they're seeing all these headlines
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about, as you mentioned, all the cross deal booking and all these stocks going up. Half the country doesn't own stocks,
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so they're not participating in it. And they're not blind to seeing self-driving
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cars or seeing their kids having a hard time getting a job. and they're hearing
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everybody talk about job displacement and that's a valid concern. People are
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scared and our industry is scaring them I think by not meeting them where they are and then beating China respectfully
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is important sachs super important. I can intellectually agree with you on that.
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>> But if you lose your job and your kids can't get a job that's that's
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existential. Yes. It's not >> my child needs a job next year. They're
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graduating from school with $100,000 in debt and my energy bills going up and my
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grocery bills are going up and they haven't come down. That's what Americans
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are experiencing. And yeah, maybe giving uh I think you also made an interesting
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point there too about the libraries. >> The war with China is existential because if we can keep it on the
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battlefield of AI and intellectual and economic prowess, we have a very good chance of winning. If it devolves and
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all of a sudden becomes a different kind of battle, that's bad for everybody,
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especially our children and our children's children. So, we need to win the current game on the field. But in
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order to do that, we need to change these misperceptions. We need to start showing tactical artifacts that show
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that this is a dividend that can benefit everybody. And we need to start now. I'm
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just putting it out there. We have so much cash on the balance sheets of these companies. Wall Street values it at
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zero. If you look at the enterprise value of any of these companies and you do a sum of the parts, nobody cares
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about that cash. So, we need to start using that cash more effectively. >> What's the equivalent of the library
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metaphor here for you, Jamath? Do you have any ideas? >> I'm not going to frontr run
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what's being worked on except to say that the leaders of these companies have
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gotten the message. They are working on a whole host of solutions. And again, we're fighting misperception, which is a
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complicated battle, but it's winnable and I think you're going to start to see
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stuff in the new year. >> Yeah, I would say education is at the top of that list. Saxs, your thoughts
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here as we wrap on this first topic. >> I'm not sure whether to address the
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particular hoaxes or the fact that there are there's a larger effort here to try
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and discredit AI and get AI development to stop entirely. Let's talk about some of these
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particular hoaxes. So on the job loss claim, I feel like I do this every week now, but there's a new study from
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Vanguard where they analyze job growth and wage growth in occupations that are highly exposed to AI automation versus
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all occupations. And they find that both job growth and wage growth is higher, not lower, in the
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occupations that are exposed to AI. So if you look at job growth in occupations exposed to AI, it's 1.7% compared to
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0.8% for other. For wage growth, it's 3.8% versus 0.7% for other. So what you
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see here is something maybe it's counterintuitive, but it makes sense to me, which is as you make workers more
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productive, the value of their labor increases, not decreases, and they end up getting paid more, and you want to
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hire more of them. So this is a huge narrative violation. And again, this is coming from Vanguard and it's showing
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that AI productivity is good for workers. This follows on the heels of that study from Yale Budget Lab, which I
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talked about in a previous show that it said there's no discernable disruption
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to the job market based on 33 months of data after the launch of chat GPT. Now, I understand that you can make
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predictions as to the future that this state's going to change, that there will
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be AI job loss, but what I'm saying is that if you look at the data so far, there is no AI job loss. Quite the
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opposite. It's job growth and job gains. By the way, we have a 2% tailwind to GDP
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growth right now. That's coming from this AI boom, this capex boom that's
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happening. And so, this is, I think, a very good thing for the US economy. Now, why do people want to sabotage it?
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There's a really interesting article in Semaphore recently that described how AI
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critics were funding journalism fellowships at major publications like NBC News, Bloomberg, Time, The Verge, LA
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Times, which by the way, I mean, I track these things. They're relentlessly negative about AI.
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These fellowships were funded by future of life institute which is a doomer group that thinks that
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AI is going to become sensient and replace humans and they were funded by a donation by Vitalic Buterine from
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Ethereum. It's an interesting story actually. He donated his dog coins to future of life. They ended up being
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worth $600 million. >> Dogecoins. >> Doge. And then you remember how there
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was like those other dog coins. >> She Oh, he had a collection of dog coins. Got it.
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>> He had a collection of dog coins. Apparently people like air dropped them
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to him as like a promotional thing. >> Got it. >> I don't think he wanted them. So he's
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like, "How do I get rid of them?" So he donates them to Future of Life and they
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end up being worth $600 million. So by this >> Oh my god. almost like this accident.
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This Doomer think tank ends up with a $600 million war chest and they've been
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funding these journalism fellowships. They've been funding grants for academics to study AI. Obviously, that's
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going to end up being very negative. And they are funding a lot of these nimi organizations that are opposing data
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centers because their goal is just to get it to stop. That's their goal. They
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just want the development to stop. And you can't, I don't think, underestimate
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how much of an impact this has had on the public discourse. But if you look at their actual claims, like for example,
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the water use claims, it's a total hoax. I mean, these AI data do not use a lot
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of >> Yeah, that was one of the things I wanted to get into because yeah, compared to a golf course, they're not
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using that much or or walnuts and, you know, almonds in central California. So, I think it is worth maybe just
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>> throwing a lot of spaghetti at the wall. Look, you have to remember who was who
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was Ida Tarbel because it's quite interesting in the context of this. Ida Tarbell was this American writer again
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in the Gilded Age. She was part of the Muckwreckers which was a group of journalists that were doing
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investigative research around the abuses of the industrial revolution, labor abuses and the like. And she took on
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sandal. Exactly. If you look at that example, I'm sure that the people in this current generation who have a
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Tarbell fellowship, what they're living out is this desire to tell a story about
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exploitation and wrong and misdoing. The problem is that these things don't factually hold together, but
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unfortunately it adds to the perception problem that we have and that has been growing. As Sax said, like so many of
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these things have been debunked, but it's playing whack-a-ole, Jason, because
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they'll throw the water thing out. It'll get debunked next week. We'll probably
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something about liquid cooling and all the PAS and forever chemicals. We'll have to debunk that. Then we'll go to
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like air cooling and how that's a problem. Then we'll go to something else. Eventually, it'll be the upper
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land grouse, but they're not going to stop. >> Sax, how do you do you have a plan to
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reframe this to the American public? You're explaining how these bad things are happening and all the evil forces at
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work behind the scenes. >> Well, look, it's not evil forces, but I don't think people understand the extent
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to which the discourse has been impacted by a few anti- AI tech billionaire. >> I brought it up every week and on your
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text. >> I brought it up. Hold on. I brought it up on this show and I tweeted about it
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way back in November. Yeah. >> And I linked to a writer named Nerret Weisslat who has analyzed this whole
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doomer industrial complex and she has shown that there are hundreds of these front organizations and they're all
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really just funded by a few big tech billionaires. It's Dustin Moskovitz, Yan
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Talin and Vitalic Buterine. Well, when I first described this, people thought that this sounds kind of crazy like a
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conspiracy theory. And then sure enough, Semaphore comes out with the article explaining that all these journalism
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jobs are being funded by future of life, which was the big donation by Vitalic Buterine. So my point is just you can't
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underestimate the extent to which a few billionaires who've donated over a billion dollars to this cause have
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distorted the public debate. And you really see this actually in the relative popularity of AI in the United States
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versus China. So there's recently a poll on they call it AI optimism where they
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ask people do you believe that the benefits of AI will outweigh the harms. 83% of people in China believe the
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benefits will outweigh the harms or AI optimistic. In the US it's only 39%. >> So again the discourse has really been
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affected by a few of these >> institutions. Let's say let's say that's
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all true. >> Yeah. My question to you is, what's your plan to turn this around and explain to
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the American people why they should be optimistic about this? What's your plan,
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David? >> Well, look, I mean, you're right that we have to flip the narrative around. And I
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I do think that the tech companies have done a really bad job explaining the benefits. We talked about this with
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Tucker. I think he brought up some really good points. And you're right, like the the AI companies lean way too
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much into the whole job loss narrative as as a way to explain their value prop. And I think it's just either what Jamath
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has said, which is this is about their next fundraising round, or it's a form
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of laziness because it's easier to describe job loss or job replacement than it is productivity, right? Like
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multiffactor productivity is a difficult concept to explain. So I do think that they've played into this narrative. But
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I think that what we have to do here is just debunk these narratives. Again, no evidence of job loss yet. No evidence of
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the the water problems. I think the electricity issues with data centers are addressable. You have to let the AI
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companies build their own power. They don't have to connect to the grid. In fact, that's what President Trump has
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called for for the last 6 months is to let the AI companies build their own power so they're not drawing on the
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grid. So, that problem is easily addressed as well. Talking about the affordability problem, but you're right,
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we have to get the message out how this technology will benefit Americans. And the bottom line is, look, I've always
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said I'm a technorealist, not a techno accelerationist. Because at the end of
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the day we don't have a choice. I mean yeah China is gonna develop the technology if we don't.
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>> Okay. >> So we don't really have a choice. >> I you know as I said last week I think
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the three most pressing issues chimat education housing and healthcare. And our industry is in a unique position to
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use AI to impact all three of those. So why don't we as an industry collectively
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explain all the great things going on there. I gave a shout out to Daniel, Prenovo, Pernovo rather, all these great
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companies analyzing our blood. There's so much going on in healthcare that could massively lower the cost, make
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people's lives better. >> Obviously, in construction, you could have incredible advances, and certainly
00:24:07
in education, but we haven't explained those three things. What's your point?
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Is there anything you can think of to add to that list? >> We have to understand the president and
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Sachs, they're responsible for shephering the GDP of America. And as Sax said, half of American GDP over the
00:24:24
next few years is forecasted to come from all of the capital that goes in to build out our capabilities in AI. We
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need this to happen. There's the existential reason why, but there's also
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a basic economic reason why. So Jason, the social license comes when off to the side, the private companies
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start to take this perception problem more seriously. So to your point, are there things that they can do around
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housing? Yes. And again, not to frontr run, they're actively working on something that I think could be
00:24:55
transformational separately. Could they do something on healthcare? TBD, but we should look at it. Can you do something
00:25:01
in education? TBD, but we should look at it. But the point is, if you can have the same companies that are on the
00:25:08
forward foot building this revolution for us, recognize that we need to bring some more folks along take some of their
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balance sheet capital and invest it to create this social license to operate. We will flip this perception on its
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head. >> Yeah, I think it's well said. And you know, there was a really interesting I
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don't you guys must remember this. The AT&T commercials, you will. Do you
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remember those >> by the way? Sorry, that's another great example, Jason. AT&T at the turn of the
00:25:34
century. What did they do? They took their capital and they created Bell Labs. What did Bell Labs do? Bell Labs
00:25:40
drove all of modern information theory. It was the precursor to the internet. They did so much fundamental research. I
00:25:47
want to be clear. I don't think that this is a five alarm fire. This is very
00:25:50
fixible right now. And the litmus test quite honestly is in 3, four, five, six months. Jason, when you see the trickle
00:25:57
of progress if we can get organized, does your perception change and does the language that you use and the tone that
00:26:04
you've used over these last 6 months has me? >> No, no, no. I'm actually thinking that
00:26:08
you've actually been quite a good early warning system >> for what a certain percentage of
00:26:14
Americans think. And so, >> yes, I predicted it perfectly. Yes. >> It's been extremely useful. But now we
00:26:19
got to act on it and you have to change your mind. >> Oh, no. No. My my mind has been very
00:26:23
crystal clear. I won't let you you know, tell what I'm saying is my opinion has been job displacements
00:26:29
coming. >> Jason, let me be clear. We have to earn you changing your mind publicly on this
00:26:33
show. If we do that, we're back in a good place. >> Uh, yeah. No, I think that you're saying
00:26:37
that in a very condescending way. I have brought up I have brought up Okay. Unintentionally.
00:26:42
>> Here, let me let me try to say again. Sorry. Let me try this again. We have
00:26:45
>> You're saying it as if I'm misguided. >> No, no, no. You have a perception
00:26:49
>> which is what do you think my perception is? that on the balance it's a coin flip
00:26:54
about whether AI is going to be >> all good for all people or very good for
00:26:59
a small subset of people. That's what I would roughly say that's I would say
00:27:03
that's accurate job. So let me finish. So if we can execute this plan again, meaning marry all the
00:27:12
stuff we're doing on the forward foot within in investing >> with some of the stuff that we also need
00:27:17
to do to bring a broader swath of the American population along. >> Yeah. >> You will have a different perception if
00:27:25
we are successful. And what I'm saying is you've had this one perception and
00:27:29
our goal would be to shift you and people like you. >> Okay. I I I take it I think it's
00:27:35
completely fair. Yeah. I have been trying to bring up that as an industry, we have not recognized people's valid
00:27:42
concerns about job displacement. That's all I've brought up on this program. I'm
00:27:46
not saying I think it's going to be cataclysmic or we can't handle it. But I
00:27:49
think if we constantly talk about, hey, winning the AI race in China, that's
00:27:54
abstract for people. And if we deny the fact that robo taxis and human robotics are coming and intelligent people like
00:28:03
Elon or other leaders are saying, "Yeah, we're we're planning on replacing those
00:28:07
jobs. We're doing a terrible job communicating this." And I do think part
00:28:10
of this is communication and part of it is, "Hey, these are valid concerns." So
00:28:14
I think great resolution. Yeah, sure. I'll be the litmus. >> Do you guys know what um the Mottton
00:28:19
Bailey fallacy is? >> No, explain it to the audience. I mean, I think I've heard of it, but
00:28:22
>> the M and Bailey Castle is an early medieval fortification where there's
00:28:26
like a very protected area, the keep or the M. And then the Bailey is kind of this looser area that's harder to
00:28:34
defend. Right. So, what happens is if they need to retreat, they'll go into the M. Okay.
00:28:40
>> Yeah. Lord of the Rings. Right. Right. So, this has become known as a debating
00:28:44
trick or fallacy where people will make a really outrageous claim, which is they'll they'll basically run to the
00:28:53
Bailey and then when you prove that it's false, they'll run back into the M and
00:28:58
say something very unobjectionable. So, in the context of like the AI job loss fallacy,
00:29:04
the Bailey is people will say this is causing massive job loss, massive disruption. It's already here. you can
00:29:10
see it and then when I point out well actually if you look at the Yale Budget Lab study or you look now at the
00:29:16
Vanguard study there is no job loss then they'll retreat into the M and they'll
00:29:21
say no no no I'm talking about what's going to happen in the future which is a
00:29:24
position that's fundamentally irrefutable and then when I point that out well wait you just totally change
00:29:31
what you're saying you're like no no no I was only talking about the future and
00:29:34
then as soon as we sort of seem to have agreement >> then the people in the M will race out
00:29:38
to the Bailey and basically saying well look at happening with Uber drivers or what have you. So there is this Mott and
00:29:43
Bailey thing happening all the time on this job loss question >> and I just want people to be straight
00:29:49
about or honest about it which is look if your claim is that this will cause job loss in the future. It's true. I
00:29:55
can't refute that because none of us can prove what's going to happen in the
00:30:00
future. But be honest about what's happening today. And in the first three years after the launch of AI chatbots,
00:30:07
there's been no discernable disruption to the labor market and the early studies and data are showing
00:30:12
>> wage increases and actually job increases and there's definitely job
00:30:17
increases in blue collars because of the construction boom. >> This has been our first debate club
00:30:23
corner. Every week we're going to teach you how to debate better here. No, it's
00:30:26
you know and I I appreciate that and I have really tried to say here like I'm
00:30:30
not a doomerist at all. you know the statistics I look at you know I talk to Dar I have actually sincerely that's why
00:30:37
I don't use I use displacement you know I really use refined language I do I do
00:30:42
and when I talked to DA he told me in areas where robo taxis like Whimo are occurring what they did specifically to
00:30:51
deal with this issue was they stopped trying to hire drivers in cal in Los Angeles and in San Francisco because
00:30:59
there are so many whimos they don't want them to have a had experience. So, you
00:31:03
know, you wherever in the castle we're talking about this, I I I don't have a a horse
00:31:10
in this race. I'm not part of this habal of, you know, Dustin Mosvitz's people. I
00:31:14
just know from talking to Uber and Whimo and these other companies and, you know,
00:31:19
other companies that are building software where they're trying to eliminate jobs. And so, I'm just
00:31:24
bringing that up as a a really interesting example. Uber and Whimo, Elon with Tesla, they are actually
00:31:31
making plans right now to deal with this displacement of drivers and they're
00:31:36
coming up with new products and services for those drivers. So, one of the things
00:31:38
they're doing is data labeling at Uber. They they bought a data labeling company
00:31:42
and they're taking the drivers and saying, "Hey, you want to do some data
00:31:44
labeling over here?" And actually creating AI jobs for them. So, this is, you know, uh something that the whole
00:31:50
industry is working on. >> Look, there's going to be a spectrum, right? Some jobs are going to change,
00:31:55
some jobs will be eliminated. The question is with respect to job eliminations, will that be more than
00:32:00
offset by the net new job creations? If you're looking at things like Uber drivers and we go to full self-driving,
00:32:06
then obviously there's going to be some category of job loss there. So, I'm not
00:32:10
claiming that there's not going to be any elimination of certain types of jobs, but I believe that on the whole,
00:32:16
what we're seeing is that when you improve the productivity of workers, their wages go up and there's more
00:32:21
demand for their labor, not less. That's what the data is showing so far and I
00:32:26
just don't think you get that from the media right now because they are promoting this dumer narrative and a lot
00:32:31
of that is astroturfed by these enormously deeped organizations that have been funded by a few effective
00:32:37
altruists. All right, topic number two. Economic numbers are out. It's a mixed
00:32:42
bag. Unemployment rate is up and government payrolls are down. Inflation somewhere in between. Let's get into the
00:32:50
numbers here. Fun with numbers. unemployment rate rose to 4.6% from 4.4% in September and 4% in January of 2025
00:33:00
when President Trump took over. US economy added 64,000 jobs in new jobs in November. October saw about 104,000 job
00:33:09
losses, but 162,000 of those job losses came from the federal government. You remember the Doge buybacks, friend of
00:33:17
the pod Elon Musk was involved in. Uh those all took effect at the end of September. So, there was a little bit of
00:33:22
a balloon payment that occurred. An analyst from Moody's says, quote, "It's
00:33:26
a frozen job market. There's not much hiring. There's not much firing happened." That tracks with what I'm
00:33:32
seeing on the ground. Meanwhile, inflation came in better than expected at 2.7%, beating the 3.1%
00:33:39
expectation, but still far away from the 2% target for the Fed. Trump gave an 18minute very loud emphatic address to
00:33:51
the nation last night and it was not that we're invading Venezuela. It was uh
00:33:57
mostly him talking about his accomplishments in terms of uh prices and affordability
00:34:04
and uh a little bit of admonishing Biden. Here's a 20 second clip. The last administration and their allies in
00:34:11
Congress looted our treasury for trillions of dollars, driving up prices and everything at levels never seen
00:34:18
before. I am bringing those high prices down and bringing them down very fast. >> Sax, your thoughts on the economic data.
00:34:27
>> Well, you're you're painting it as you're painting the economic data as
00:34:30
mixed. I don't know how you have a economic report that's better than what
00:34:33
we just had today. So, first of all, we saw that CPI came in at 2.7% like you said, but the expectations were 3.1%.
00:34:40
That's why the market is rallying today in a big way. Core inflation is down to
00:34:44
2.6%. These are significant beats. And this puts core CPI inflation in the US at its
00:34:52
lowest level since March of 2021. So, since the whole CO thing. And if you listen to Kevin Hasset, he said that
00:34:59
over the past 3 months, core inflation's been running at 1.6%. So the trend line
00:35:04
is going down even further. So it looks to me like inflation's rolling over and
00:35:08
that's just about a solved problem which is really good news for what it implies
00:35:12
for interest rates because it implies that interest rates are coming down and that's going to bring down things like
00:35:17
mortgage costs and the costs of financing a car payment and things like that. Now you talk about unemployment. I
00:35:24
think the unemployment news is very very good. So if you look at the data from September to November, the overall
00:35:33
employment is down 41,000. But why was that? Private employment was up 121,000, but government employment in the last 2
00:35:41
months has declined by 162,000. So this is what the media was focused on is they
00:35:45
were trying to claim that unemployment was up, but actually it's just that the
00:35:49
government jobs decreased. Why did the government jobs decrease? Well, you remember that when Doge went in and made
00:35:54
their cuts at the beginning of the year, they offered people a buyout as of October 1st. Now, some people took the
00:36:01
buyout right away, but a lot more waited until the last possible day, which was October 1st. And that's why you saw this
00:36:07
big spike in October unemployment, but those are government jobs that are being cut. And moreover, there are people who
00:36:15
voluntarily wanted to take the buyout and they took that deal. So again, I think the employment picture is looking
00:36:21
actually quite good and if you believe what we believe, you don't want an excessive number of government jobs. And
00:36:28
President Trump has presided over, I think, the first decrease in the federal workforce in decades. We've seen a 10.7%
00:36:36
decrease in federal workers in 2025. Basically, the number's gone from 2.4 million to 2.15 million. I know that'll
00:36:44
make Freeberg very happy. But look, what we had during the Biden years is we had
00:36:49
9% inflation. We had a very weak economy. We did have a recession. It was that two quarter shallow recession. And
00:36:56
the media even tried to start redefining what a recession was to avoid those headlines. But what the Biden
00:37:02
administration did in response to that is they went hog wild with government hiring. And what we're seeing now is
00:37:08
inflation is now coming back down and we're seeing the number of government workers come down to a more reasonable
00:37:15
level and the private economy is making up for it. We still have a relatively historically low unemployment rate. So
00:37:23
those numbers look good. Then you look at the deficit. We've reduced the deficit year-over-year by 600 billion.
00:37:29
That will help bring interest rates down. And then on prices, you got the lowest gas prices in five years, below
00:37:36
$3 nationally. And then finally, on wages, real wages are up by over $1,000 on average. And um it's $1,300 for
00:37:45
factory workers, $1,800 for construction workers. And again, that's a big change
00:37:49
from the buying years where you saw that in real terms, wages went down by about
00:37:55
$3,000 on average per worker. So look, I mean, it seems to me like we're on the
00:38:01
cusp of a golden age here. I don't see how the numbers could really be better.
00:38:06
And then on top of it, again, you've got this AI tailwind, which I think is a
00:38:10
huge positive, not a negative, which is adding roughly 2% GDP growth every year because of huge capex investment with so
00:38:18
far no job loss associated with that. So I would just say sit back and enjoy this. I think we're headed for a gang
00:38:25
busters 2026. Rates are coming down. Inflation's coming down. And you're also
00:38:31
getting tax cuts going into effect next year because of the big beautiful bill. No tax on tips, no tax on overtime, no
00:38:37
tax on social security, plus the standard deductions being beefed up. So people haven't even felt the benefit of
00:38:43
those tax cuts. That's coming in in April. I don't see how things could be
00:38:47
much better. >> Okay, Freeberg, any thoughts here on the data as it's come in? Or Chimath? I'll
00:38:53
I'll go to either one of you. >> Directionally, I think it's really
00:38:55
positive. You want to see private sector jobs growing and the shrinkage of government sector jobs has
00:39:04
profound impacts not just on the budget, but it starts to create obvious air pockets where you get a little bit more
00:39:13
rational regulation. You can deregulate in the appropriate places. You can shift
00:39:18
the burden and the responsibility to private industry. So, it's more than just what's in the numbers that I think
00:39:23
is positive. I've told you this story before, Jason, to do some of the things
00:39:26
that I've wanted to do. I'll give you an example. When we started a battery
00:39:30
business 5 years ago, when we filed with the DOE, the Department of Energy, these
00:39:36
are 700page reports. You spend millions of dollars and you hire teams of 50 and 100 people. And what are we trying to
00:39:44
do? We're trying to build a battery business in the United States so that we
00:39:46
can delever from the Chinese. to the extent that we could do that a little bit simpler and a little bit
00:39:53
easier because there's fewer folks and so the burden goes to state and local
00:39:58
regulators which we all already have to deal with. These are just generally good
00:40:01
things for productivity. They're generally good things for GDP. It allows us to invest more aggressively in the
00:40:06
things that help America. So it's trending in the right direction. By the way, Sachs didn't mention this
00:40:11
explicitly, but I'll say it. >> The other thing in 26 is you get a bunch
00:40:14
of tax cuts that kick in. No tax on tips, no tax on overtime. the deductibility of the cost of interest
00:40:20
for things like car loans. These are big stimulation accelerated depreciation. You have big
00:40:29
stimulative actions for the United States economy. >> Yeah. I think what you guys are missing
00:40:35
>> respectfully is that uh >> you know uh Trump promised something completely different. He said starting
00:40:42
on day one we will end inflation and make America affordable again to bring down the prices of all goods. And when
00:40:47
he was running for election, he promised the Americans that he would reduce prices. Now, what's happened is prices
00:40:55
have not come down. They've gone up 2.5 to 3.1%. But what really matters, and I
00:41:00
think you guys are doing a great job, you know, pro- administration, part of the administration. What you're missing
00:41:06
is the American people don't believe you. And the American people are experiencing something different. And
00:41:11
when you look at the uh approval rating, Trump's approval rating is at its historic lows. and specifically on
00:41:17
inflation. Pull up the silver bullet and meta analysis there. This is the disconnect and this is why it seemed
00:41:22
tonedeaf last night when Trump was telling everybody it's great and when you say it's the golden age, Americans
00:41:27
aren't experiencing that. That's just not what they experience. They are
00:41:32
experiencing grocery prices that have continued to go up and they are experiencing unemployment that's gone up
00:41:39
15%. Whether it's the federal employees, whether it's private sector, and you
00:41:43
debate the numbers, or there's a golden age coming because of no tax on tips,
00:41:46
these are all talking points. What the American people remember is the Trump administration said prices would go
00:41:52
down. Prices have gone up. That jobs and manufacturing, there'd be all these
00:41:56
incredible manufacturing things. Obviously, that's going to take years. That has not happened yet. So, I hope
00:42:01
for the best. I hope inflation goes down to two. And I hope they turn this around. But the American people don't
00:42:07
believe the Trump administration. And it's a big difference between promising
00:42:11
stuff in 2024 and delivering it. And here we are in the first year and the delivery that's come in from the Trump
00:42:17
administration on inflation and on the economy is not good if you're in the bottom half of society that doesn't own
00:42:25
equities. Period. Full stop. >> So, first of all, prices have come down. You look at gas prices are the lowest in
00:42:30
five years. They're below $3 nationally. Now, I don't know how you want a new
00:42:35
administration to come in and literally affect every single change on day one. How do you do that?
00:42:40
>> Oh, no. That's just what he said. >> No. What the president said is they
00:42:43
would start working on they would start. >> I'm not saying it's possible. That's
00:42:47
what he said. >> No, he said he'd start working on it on day one. And so he did. And look at the
00:42:52
results. Inflation's now down to 2.7% way below expectations. I don't know how
00:42:57
you want a better report than this. Unemployment is very low. The only reason Remember the uh the economic
00:43:04
target was 3 three and three 3% GDP growth, 3% deficit to GDP and 3% inflation. They're below 3% inflation.
00:43:13
They're above 3% GDP growth and the deficit to GDP is not where it needs to be. So cutting is still ahead. But I
00:43:21
looked at the budgets for 2026 for a number of the departments in the cabinet over the last couple days and they do
00:43:28
have big cuts that they're trying to implement across the federal government.
00:43:32
We're going to be interviewing Scott Bessent tomorrow morning that'll come
00:43:36
out shortly after this episode airs. But this is the catchup conversation with Scott on how's the 333 plan going. But
00:43:42
on two of the three metrics, Jay Cal, it does appear like things are good. I'm
00:43:46
not trying to be a spokesperson for the Trump administration, but I'd say if you
00:43:49
look at this just from the raw economic data and the the goals of the administration following that, there
00:43:54
should be a flow through in terms of job growth, the flow through in terms of affordability, in terms of wage growth,
00:44:00
all those other sort of economic indicators that actually affect people on Main Street every day. Uh that's also
00:44:05
TBD in the narrative is still to be written, but those high level economic goals are still, you know, are starting
00:44:10
to kind of fall within the the framework of what they set out to do, which is generally good, right?
00:44:15
>> Yeah. I'm just pointing out the disconnect again. This is the disconnect
00:44:18
with the American people. I mean, >> no, no, I'm looking at year one. >> Just year one. We're here at the end.
00:44:24
>> Time to implement an agenda. >> I totally agree. I'm just telling you
00:44:28
the American people don't believe the Trump administration right now. There's
00:44:31
more work to do. >> That's the data that came out today is looking awesome. By the way, that
00:44:37
Vanguard report that I mentioned that also exposes the AI job loss hoax, it also has a new economic assessment for
00:44:46
next year is projecting 3% growth for next year, which I think is conservative, and an improved labor
00:44:52
market outlook for 2026, and it says the most robust improvement will come in the
00:44:57
second half of the year. So, Vanguard is saying that 2026 is looking very good. And by the way, that's when the fight
00:45:04
for Congress will unfold is next year. So, you know, the thing about polls is it's obviously just a snapshot in time
00:45:10
and it doesn't tell you what things are going to look like 6 months from now or
00:45:13
a year from now. I think they're going to look very good. >> Yeah. I mean, maybe he turns it around.
00:45:18
>> I think it's already been turned around. It just takes time to kick in.
00:45:22
>> Yeah. I mean, the the public's perception it hasn't turned around and
00:45:24
inflation was supposed to go down and it stayed. >> It has. No, it stayed at it's still way
00:45:31
above the 2% >> 1.6% for the last three months. >> No, it has not. It was just 2.7.
00:45:38
>> No, that's the problem I think with the administration and your part of it. Like
00:45:42
you guys cherry pick numbers and it's not matching the numbers on the field.
00:45:46
So when you cherryick cherry picking, this says CPI report. >> The the the number
00:45:52
>> open the cover of the Wall Street Journal. 2.7 Hold on. 2.7% CPI 2.6% 6%
00:45:58
core >> 1.6% for last 3 months. >> Okay. >> What is hard to understand about this?
00:46:04
Obviously, the last three months are going to tell you what the trajectory is. >> Okay. The the fact is
00:46:11
>> you're looking for every excuse you can to basically downplay what is
00:46:16
>> an awesome report and just look at the stock market which is ripping today
00:46:20
because this is way below expectations. You're the only one who's not happy
00:46:23
about this news, Jacob. >> No, no. the the country is not happy about it. I I'm not I don't have a horse
00:46:28
in this race. I'm doing fantastic. I own equities. I'm doing better than I ever
00:46:32
have in my life. I'm talking about how the bottom half of America perceives it.
00:46:36
This is the blind spot of the Trump administration. You've proved my point by not addressing it. Let's go to the
00:46:41
next subject. >> No, I haven't. What? What? >> No, I guess the fact that you guys My
00:46:46
point is the American people >> expected that inflation would go down and prices would go down. Prices have
00:46:53
continued to go up. Fed has a 2% target. It's a little bit unrealistic to say
00:46:57
that what you want to you want wait you want to have you want to have a negative
00:47:00
inflation rate. >> Trump said prices will go down. They have not. That's what the American
00:47:06
people feel. Unemployment has gone up. They expect it to go down. So the this idea that we're in the golden age is not
00:47:14
tracking with the bottom half of Americans. That's just facts, David. It's just facts. You have work to do.
00:47:20
Trump has work to do. You're you're saying that anything less than deflation
00:47:23
anything less than deflation in your view is >> I did not say that you keep telling I
00:47:27
keep telling you what I'm reporting in terms of facts then you tell me I said
00:47:31
something different I didn't say that the American people are very disappointed in the Trump
00:47:35
administration's first year when it comes to inflation and the economy >> I don't understand how the numbers could
00:47:41
be any better we just blew past expectations here 2.7% >> I don't know whose expectations I don't
00:47:48
know whose >> pulse you think you have the finger of but the economists who put together
00:47:54
>> these expectations >> were expect one more time for me just pull up the
00:48:00
chart for me uh so I can just explain that this isn't bias on my part I'm just
00:48:05
putting the fact on the field no it is not this is >> these are numbers that you can look at
00:48:11
and see that Trump's two worst categories right now are the economy and inflation the American people thought he
00:48:18
was >> these are snapshots in time and they're going to snapshot time from February goes down.
00:48:24
That's the snapshot time. Every month you have 12 months there to look at. >> Let me explain. I don't know what's so
00:48:30
hard about this is a really partisan point that you're making it. You're
00:48:33
basically saying >> I'm not part economy is like a giant super >> tanker. I'm not part
00:48:38
>> Can I finish my point? >> Sure you can. >> I mean you must know this and I think
00:48:41
you're pretending not to. The US economy is like a giant super tanker. It takes
00:48:45
time to turn around. It takes time to implement your economic agenda. It took the president the first six months of
00:48:49
the administration to implement the big beautiful bill which is his economic program. But it doesn't even go into
00:48:54
effect until January 1st. So the tax cuts have not gone into effect. The inflation reductions have happened.
00:49:02
We've gone from 9% under Biden to now 2.6% core 1.6% the last 3 months. I don't know what more you could want.
00:49:10
Interest rates have come down. They're projected to come down even more because
00:49:13
inflation's coming down. This is again a huge ship that's in the process of
00:49:17
turning around and I predict that by next year the numbers are going to be even better. Let me remind you of what
00:49:22
happened in the early 1980s under Ronald Reagan when Reagan took over. Okay, the
00:49:25
misery index was at like 20%. Reagan implemented his economic agenda, but it took a couple of years to actually
00:49:32
implement it. By 1983, we actually had a very severe recession because Vulkar had
00:49:37
raised interest rates so much to tame inflation. We're lucky we don't have
00:49:41
that issue today. In any event, it took like three years for Reagan to implement
00:49:45
his economic agenda and his popularity was very low by 1983, but by 1984, the program had worked and it was morning in
00:49:53
America again. And he won the biggest landslide election, I think, in American history. So, you got to give it time for
00:50:00
the president's agenda to play out and work. And it certainly looks like after
00:50:06
10 months that is performing extremely well. and we are just beginning to see the impact of it.
00:50:12
>> I think the core issue is Trump overpromised and underd delivering year
00:50:17
one and it's not the golden age for the bottom half of Americans and they don't
00:50:21
feel it's the golden age and I think just t tackling that head on and saying
00:50:25
yeah we have more work to do and I actually think that's what the address last night was about. I suspect
00:50:30
somebody, maybe Susie or the the chief of staff or somebody said, "Hey, we got
00:50:35
to start communicating better about the cost of living and our promises during the election so that we turn this
00:50:43
around." That's actually what I think is happening. But I I don't have a horse in
00:50:46
this race. I'm doing fabulous because I own equities. I'm happy. I'm concerned,
00:50:51
sure, that the bottom half of society needs to do a little bit better. That's
00:50:55
all. All right. But you, you know, listen, I I'm never going to win with you, Saxs, because you're the captain of
00:51:00
the debate club. You will win every debate. You're you're incredible. >> Well, look, I mean, like the president
00:51:04
the president made the right point last night, which is he inherited a giant mess. Again, under the Biden years, we
00:51:09
had a $3,000 reduction in in real wages by American workers. That's already gone
00:51:15
up by $1,000 under President Trump in the first year. But yeah, if you're a worker and you're just looking at your
00:51:21
situation, you're underwater 2,000 relative to where you were 5 years ago. So obviously you're going to be salty
00:51:26
about that, but that's the situation that that President Trump inherited. I don't know how much more progress you
00:51:32
could make in 10 months, but give it another year and then we'll really see.
00:51:36
>> All right, I am rooting for you guys. I hope you turn it around in year two.
00:51:40
Okay, Freeberg, we got an important story here we have to get to. >> Do you guys want to hear a crazy
00:51:45
personal story for 2 minutes as a palette cleanser? >> Oh, 32. >> Oh, yes. As a palette cleanser,
00:51:50
>> this is an amuse bougge. >> Okay, this is an amuse. A little a little pomplamoose sorbet.
00:51:56
>> This is the craziest story >> in my life right now. >> Pull up the photo, Nick. The first
00:52:01
photo. >> You guys remember my dog, Monty? >> Yeah. This is the virtue signal dog.
00:52:06
>> Not the virtue signal. >> Oh, this is the best dog. This is Monty.
00:52:10
>> This is Monty. Monty. Monty was my dog for 10 years. I got him 10 years ago in
00:52:15
January and he died suddenly in May. He turns out he had a tumor on his heart and his heart burst open in front of me
00:52:22
and he died. It was the worst thing. He was with me every second of every day >> that I wasn't at work. He slept on my
00:52:28
bed. He was in my office all day. You guys have seen him a million times in the background during the all-in pod. My
00:52:33
best friend in the world. The greatest thing I've ever come across in my life.
00:52:39
>> So, he died suddenly. It was very brutal, very hard. So, I'm at my house
00:52:43
the other day. My next door neighbor walks in and he's got this dog on his leash. Pull up this photo. This is this
00:52:51
dog. So, my next door neighbor finds this dog at Rocket Dog Rescue. It was pulled out of a kill shelter. The vet
00:52:59
estimates this dog is like a decade old. Today, I live probably 40 miles away from where we got Monty. He was found
00:53:06
wandering the streets of the Mission District in San Francisco. This random dog here was found at some random kill
00:53:11
shelter somewhere in California, pulled out of the kill shelter a few days ago, put into Rocket Dog, and rescued by my
00:53:17
next door neighbor. Brings him over. He's walking him in the street. And I'm
00:53:20
like, "Oh my god, that dog looks just like my old dog, Monty." We ran a DNA
00:53:24
test. This dog is Monty's brother. >> What? >> This dog is Monty's brother. It is the
00:53:32
craziest. There's like a billion dogs on planet Earth. And of the billion dogs,
00:53:36
some random dog from some random litter from some street pup in the Mission District from a decade ago found its way
00:53:42
into a shelter, into another rescue center, into my next door neighbor's arms, and brought back to my house
00:53:47
months after Monty died. How crazy is that? What is his personality like? >> I'm going to hang out with him this
00:53:53
afternoon. I got to go see. >> But how crazy is this? Just It's Monty's
00:53:57
actual brother from the same >> Monty in fairness. >> Monty. >> Well, the angles are off.
00:54:02
>> Step brother. >> Monty's more robust. >> Yeah. Well, Monty was wellfed. This dog
00:54:06
lived in a freaking kill shelter. So, >> Monty was a heck of a dog. Take take 12
00:54:10
pounds off Monty. But >> wait, where's the other tests? >> Don't lie.
00:54:14
>> Where's the uh dog that was being tortured by Revlon? >> That dog. The dogs have gotten robust,
00:54:20
too. >> Yeah. >> Was it Rabon who was torturing your >> She she Daisy has a thousand siblings,
00:54:26
not just one. >> And uh Daisy Daisy I'm fine with. It's Mitchell. It's Mitchell Freeberg. I hate
00:54:32
>> Marshall. Marshall. >> Marshall Freeber. I hate Marshall Freeberg.
00:54:36
>> I got to hang out. >> He ate the pistachios last Christmas. Marshall's like a little
00:54:40
>> Monty's father must have really gotten around San Francisco. >> He had a great run on
00:54:46
>> What are the odds of this? >> Same mother, same father. It's not a
00:54:48
half brother. This is the same Monty's dad was a >> same same litter, same dog, same same
00:54:54
mother, same father, same litter on the streets of San Francisco a decade ago. And they all find their way in different
00:54:59
parts of California and come to Andy's buried in my backyard. And this dog >> samples
00:55:06
love. Was it the summer of the same? >> You would say no way, but you got to see
00:55:11
better shots of it. I'll put more >> photo side by side. >> Yeah,
00:55:14
>> this doesn't make sense. >> I know. It's the craziest ever. And by
00:55:17
the way, like >> yeah, it doesn't look like they're related. I'll be honest with you.
00:55:21
>> Gotta find you a proper photo of >> What's going on? Chop up with Oki and
00:55:25
Joker. How old are these dogs now? >> Oh my god. From your lips, the God's
00:55:28
yours, bro. Aie is 14 and a half. She turns 15 in July. >> She's so precious.
00:55:34
>> And Joker's eight or nine. So Touchwood, they're uh >> Yeah,
00:55:38
>> Golden Retrievers don't really live to 15, but my god, she's been
00:55:42
>> You got a lot of good years. I was just on the I was on the floor last Thursday
00:55:45
snuggling with her and it was so precious. >> Well, you know what we did the I think
00:55:49
the best thing that we did was we got much more disciplined about diet for AI when she turned about 13.
00:55:58
Little bit calorie restricted. It's not nearly as much. She lost a few kilos. It
00:56:03
helped her a lot walking and >> she's a little deaf unfortunately, but
00:56:07
she can see. >> Dogs are the best. My god, >> dogs are the best. Here's my Here's
00:56:11
here's my other photo of the dog that Chamoth hates. Pull it up just so you can see.
00:56:15
>> Marshall, listen. Last last Christmas at Nat's birthday dinner on the 26th, which
00:56:20
is her birthday, Marshall Freeberg jumped on the table, started eating all of the pistachios and the nuts,
00:56:26
>> ruined them, >> ruined all of them, slobbered everywhere. >> All David Freeberg was like, "Oh, look
00:56:32
at that." Allison Freeberg was like, "Marshall Freeberg, they they have no
00:56:36
control over what's going on." >> Here, pull this photo up, Nick. This is
00:56:40
a a medical issue Marshall Friedberg's been dealing with. He wakes up with irreoverable erections, so he can't
00:56:45
walk. >> What? >> Pull this up. >> Irreoverable. >> So, Nick, you got to blur this out. When
00:56:53
you >> Oh, dude's packing. >> So, this little guy, he wait erection.
00:57:00
>> He has these erections and well, the doctors say like, "You just got to wait
00:57:03
and if it ends up staying for too long, there's going to be a surgery." But like
00:57:07
right now, he's okay. But he can't move when he gets them and he's stuck and
00:57:10
he'll just stand there unable to move for like 20 minutes like with his little
00:57:13
>> thing happened. I gave Chimat some of my roast sparks and he had a similar thing
00:57:18
happened. He was frozen. >> There's there's a Brian Johnson joke in
00:57:21
here. But >> that is a problem. >> Yeah. >> How's Moose doing? Jake's my special
00:57:26
guy. >> Here he is. Special. >> Oh, >> is that your dog? >> This is the moose. The moose is trying
00:57:34
to keep Oh, buddy. Oh, buddy. Fish is my buddy. Oh, good. What are you doing? What are you chewing on?
00:57:41
>> What's he doing? >> I think you got a pop. Get that out of your mouth. Come on. Get that out of
00:57:45
your mouth. He is such a little love buddy. Sh love. >> It's like a gremlin.
00:57:54
>> He loves it. >> It's great. It's great to see you so in control.
00:58:00
>> Jason, you're such a natural dog guy, Jason. That's buddy. >> A disciplinarian. This dog loves food.
00:58:09
>> You're really and he loves to wrestle. >> You're like a modern believable
00:58:14
at the ranch. >> Does he headbutt you? >> The dog whisper >> Moose. Take it easy, buddy. I know. He
00:58:21
loves to wrestle this dog. >> He's heavy, right? He's >> Well, we he added about four or five
00:58:26
pounds cuz he wasn't eating all that much when we got him. And then we realized he needs a little bit of extra
00:58:31
food. We gave him a little more food and he became a little less um grumpy >> and then he just
00:58:37
>> we take him for like maybe three one mile walks a day on the ranch. >> Totally fine. If he misses a walk,
00:58:44
doggy's got way too much energy. So, he's not he's a ranch dog, not a city
00:58:48
dog. This dog >> I know. I know. I told you. >> Yeah, he needs to run. When he doesn't
00:58:52
run, you got a problem. All right, let's keep going through the docket here. Uh
00:58:56
that's dog corner. That's K9 corner. What do you guys think? That's a good
00:58:59
corner. It's a good cat corner. It's the best corner. >> But how crazy is that? One like one in a
00:59:03
billion's got to be that this dog lands up next to me. It's just the craziest
00:59:06
thing. Anyway, >> yeah. And uh yeah, there's no cat corner here. Cats are horrible.
00:59:10
>> Shout out to our friends at Whimo for eliminating the cat problem in San
00:59:14
Francisco. >> I mean, that's just that was the greatest update to their software ever.
00:59:19
If they can eliminate more cats, >> what's that paradox that the AI has
00:59:25
where it's like, do I hit the trolley? It's like the cat problem. Go for the
00:59:29
problem. Go for the cat. It's just go for the cat. >> Absolutely. You could get somebody there
00:59:32
on time or you could get them there 30 seconds late and take out a cat. Take out the cat. Less stray cats. Cats are
00:59:40
horrible. Shout out to our cat ladies listening to the pod. There's I wonder
00:59:44
how many cat ladies listen to this pod. I think there are a few. >> Oh, there are a few.
00:59:48
>> Are there a few? Yeah, they hear from they're on blue sky talking about Oh,
00:59:54
god. I had a joke. I'm not going to do it. All right. According to a Reuters
00:59:58
report, Freeberg, China has built a prototype of ASML's EUV machine. Hey, if
01:00:06
this is true, this report, it's uh it could have a profound impact on the AI
01:00:11
race that we talked about. For those of you who don't know, ASML is the Dutch
01:00:15
company worth $400 billion, 22nd largest market cap in the world, and uh they are the only company that
01:00:22
makes EUV machines, also called lithography. That stands for uh extreme ultraviolet. That's how you make H100s.
01:00:31
Here's a photo of one of these giant machines. They cost $250 million to make, and they take 6 months to make,
01:00:38
filled with all kinds of important parts. Carl Zeiss lenses, etc. Since 2018, these machines have been limited for
01:00:47
sale by the Dutch. Why? Why can't China buy these machines? Well, in 2018, Trump's Secretary of State, Mike Pompeo,
01:00:55
put pressure on the Dutch to impose export controls on China. And uh later that same year, they did. So,
01:01:03
according to Reuters in this news story, Freeberg, China used former ASML engineers
01:01:10
allegedly to reverse engineer the machines. Reuters has pointed out that the machine in China has not yet
01:01:18
produced any working chips. It's a prototype. The CCP is targeting 2028 uh for working chips. Some sources say
01:01:26
maybe 2030 is more likely. You've been talking about China lithography on the
01:01:30
show. We can play the Chariots of Fire music that Freeberg insists we play when he does his victory lap. Chimoth, here's
01:01:36
his victory lap. Episode 224. Last year, China announced and began a 37 billion investment in developing their own
01:01:46
3nanometer uh chimp technology. China made a claim that this investment they had made was starting to pay off and
01:01:53
they had developed their own EUV system and their big semiconductor companies called the semiconductor manufacturing
01:02:00
international corporation or SMIC in China. They launched a seven nanometer chip with Huawei in their Mate 60 Pro,
01:02:08
which is sort of like their iPhone competitor in China. And so they're proclaiming that they've already got
01:02:13
this EUV technology. From what I understand, and Sax would know better than I, it sounds like there was a lot
01:02:18
of reverse engineering and workound of existing technology in order to deliver that system.
01:02:24
>> Who do you think has the best chance of challenging Nvidia? My early prediction
01:02:29
for 2026 is Huawei where I think that there's lithography technology that exists in China that is not publicly
01:02:37
discussed that is going to be deployed in Huawei and all these fabs that they're building in mainland China.
01:02:42
>> So announcements 2026 impact 27 probably fair. >> Do you have first first on allin
01:02:48
Freeberg? Congratulations on your weekly >> victory lap here. I don't I don't I
01:02:54
honestly don't think that the Reuter story is necessarily news cuz I think it's a little bit of a narrow scope in
01:02:58
trying to describe what happened which is that they quote stole ASML technology because scientists are working on it.
01:03:03
That's not really the full scope of what's been going on in China for a number of years and it really
01:03:09
understates the technological progress that China's independently made in using
01:03:13
other systems to try and achieve lithography parody. So if you go back a number of years, the current kind of
01:03:20
investment vehicle is actually Chinese banks put capital into a fund that's roughly $48 billion uh US dollars which
01:03:29
is actually what's called the national integrated circuit industry investment
01:03:33
fund phase 3. So there was phase 1 which started in 2014 which focused on manufacturing. So developing fabs with
01:03:41
groups like SMIC. Phase two was stood up in 2019 which focused primarily on design and materials. And then this
01:03:49
phase three fund was established in 2024 explicitly to pivot to what they call choke points or bottlenecks in the
01:03:57
manufacturing process. And state media has confirmed the existence of this phase 3 fund and the intentionality of
01:04:04
the phase 3 fund to try and replicate lithography technology. Couple of months ago, if you pull up the link, Nick,
01:04:10
here's a publication on this paper. So this is the leading research group out
01:04:14
of China that's been backing into lithography technology using AIdriven systems. They published this paper which
01:04:22
was a very good summary of where they are in July. Was this in nature? No, it's in light
01:04:28
science and applications and this paper is called advancements and challenges in
01:04:33
inverse lithography technology a review of artificial intelligence-based approaches. If you read into the paper
01:04:40
and then you read the other publications from this particular research team at Singua University, they have made a
01:04:46
number of breakthroughs in using AI to try and reestablish alternative systems and the traditional Zeiss optics and
01:04:54
other control systems that are used in the ASML platform. And the way that they've done it, I I won't spend too
01:04:59
much time on it, but there's a bunch of neural networks that they've used,
01:05:03
trained, and have made discoveries from, including doing things like working with
01:05:07
suboptimal optics, meaning you can have optics that have a degree of diffusion. And then how do you actually recreate
01:05:13
3nmter printing techniques or 3nm masks by having shadowy effects accounted for in the AI? So, you almost like assume
01:05:21
that the shadowy effects are going to come out and you print differently than you otherwise would. you don't need the
01:05:26
degree of precision that you need and you don't necessarily need to go get the
01:05:28
Zeiss optics. There was another paper that was published early this year by another Chinese research team that
01:05:34
actually demonstrated how they did use AI to discover a novel method for doing optics. So there is a very broad and
01:05:41
wellunded effort that's been underway for over a decade. But just in the last
01:05:45
couple of years with artificial intelligence based approaches, they've made a series of breakthroughs. It is
01:05:50
very likely the case that Huawei already has a lithography system that they'll be
01:05:55
putting into production and this is why I kind of talked about it when we were in Vegas and pointed it out earlier this
01:06:00
year. >> But I again I think Reuters just sort of maybe caught on to some narrow segment,
01:06:04
but this is a bigger story and a bigger set of progress that's been made over
01:06:08
quite some time. ramification stacks here and and what you're thinking. Obviously, you've talked a bunch about,
01:06:16
hey, let's sell our stack in there and they're clearly working on their own
01:06:19
stack. What what's uh what's the ramification of this if it's true? >> Well, I've never supported selling EUV
01:06:25
lithography to China. It is probably, >> you know, selling the stack of H1,
01:06:30
whatever the previous Nvidia stack was. Yeah, EUV lithography. These machines that are made by ASML is probably our
01:06:36
single biggest advantage in the AI race because they're the only machines that
01:06:41
are capable of creating say 2 to 3 nanometer chips, semiconductors, and it's sort of the perfect export control
01:06:48
because there's only one company that makes these machines like you showed. They're gigantic. They're expensive. So
01:06:54
if you think about like trying to put an export control on a commodity, there'd
01:06:58
be a lot of ways to circumvent it because there's a lot of sources for a commodity. But in this case, there's
01:07:03
literally only one company that makes these machines. So it's been a tremendous advantage, I'd say, for the
01:07:08
West that we have EUV lithography. I'm not surprised that China is trying to
01:07:14
reverse engineer it. It's kind of the obvious thing to do. No advantages forever. It does seem likely that at
01:07:21
some point they'd be able to figure out how to do it. So I think that this article is not altogether a surprise in
01:07:29
that sense. I mean I'm sure that China is trying really really hard to reverse
01:07:34
engineer this. In the meantime, however, they've also made substantial progress
01:07:38
with DUV lithography. So the previous generation of lithography before EUV was DUV. E is extreme. D is deep. In any
01:07:48
event, DUV was supposed to sort of top out at say 14 nanometer chips and China was able to push the technology to get
01:07:56
to 7 nanometer and now to five. So they've able to get a lot further using DUV lithography than anyone thought
01:08:03
possible and that is why the Huawei chips, the Ascent chips are they're not as good as our chips, but they're
01:08:09
serviceable and they've been able to use their prowess in networking to string
01:08:14
more of them together. You have the cloud matrix 384 technology where Huawei will string together 384 of their Huawei
01:08:22
Ascent chips into a rack and that will perform comparable to an Nvidia rack but using a lot more power. So the bottom
01:08:32
line is China's been able to create a lot of these workarounds to our restrictions. But if they figured out
01:08:38
how to reverse EUV that would be I'd say a blow because it is a real advantage
01:08:43
for us. But I'm not convinced that this Reuter story is the the full picture. I
01:08:48
think it's just a data point. >> Jim, any thoughts here? >> If you want a very short summary of how
01:08:53
the last generation of chips work, the best way to think about this is that the most profitable and valuable chips to
01:09:00
date have taken a very compute ccentric approach. That's why we've needed these
01:09:05
ultra advanced process nodes. But the reality is that in a world of infinite inference, let's say the next generation
01:09:14
of silicon will not take the same compute heavy approach and will probably rely on a much more memorycentric
01:09:20
architecture that uses a lot of SRAM. The value of that is that you can produce these things as Sax said at 14
01:09:26
nanometer at 75 all of these process nodes that are much less advanced that I actually think is the future. So, in a
01:09:34
weird way, if they steal this, which I think we should assume they've already stole it
01:09:41
quite honestly and they figured it out, the question is how bad is it? That's
01:09:45
the really important question. And the thing about a more memory ccentric approach for AI inference or these next
01:09:52
generation forms of silicon, it demands a lot more of compilers. It demands a lot more of the software. I still think
01:09:59
that's where we are light years ahead. So, I don't think it's the end of the
01:10:02
world and we're still in a very good place, but it is bad. Friberg, weren't we
01:10:08
supposed to uh start onshoring with the chips act and maybe get trending towards
01:10:15
having this production ability in America? And obviously that's been really hard to do.
01:10:22
And China and their relationship with Taiwan seems to be and and the possibility that they actually take over
01:10:28
Taiwan in a military fashion has been this existential concern or even short-term concern.
01:10:35
>> Maybe it's a better way to say it. The I think the biggest security implication
01:10:38
to consider at this moment is that both the US and mainland China are onshoring manufacturing and that makes Taiwan less
01:10:46
of a strategic point of interest for the United States and for United States industry. Maybe one of the ways to think
01:10:51
about the positive aspect of what is going on which is maybe call it the bulcanization of generally manufacturing
01:10:57
but specifically semiconductor manufacturing in this case is reduced security concerns. So there's no longer
01:11:04
this flash point perhaps in Taiwan. If China did invade Taiwan and the US had fab manufacturing, we're less likely to
01:11:10
want to defend Taiwan. And frankly, if China has fabs on mainland, do they really need to invade Taiwan?
01:11:16
>> What's the economic interest in doing so? >> Yeah, that's kind of where I was going
01:11:19
with it. But if they also wanted to jumpstart Freedberg, they could just go to Taiwan and take the machines. Like,
01:11:25
is that actually the plan? >> Like I I don't know what the CCP's plan
01:11:29
is. I think that's a pretty um simple statement to make. I think just going to
01:11:33
Taiwan is probably a lot more complicated than >> of course it is. My point is if this if
01:11:38
this was super existential to get those chips for China and they go to Taiwan and they then they've reverse engineered
01:11:44
the machine by default. >> We we need to recognize we keep using the term reverse engineering as if ASML
01:11:49
is the only way to do this and it is not. If you read their papers and you read what's coming out, there are
01:11:55
alternative production manufacturing methods and systems that are being developed in China that not only maybe
01:12:01
provide parody to ASML, but get ahead of ASML. And I think this is really important to understand. China is not
01:12:06
just in a catch-up race. They're in a primacy race and they are trying to develop privacy in lithography
01:12:12
technology which will give them privacy in manufacturing which will give them primacy in AI which will give them
01:12:17
economic leverage over the planet and that is very critical for us to understand. This is not about stealing
01:12:22
data from ASML. Like, no one gives a [ __ ] If you're sitting in China, you're
01:12:25
thinking about I've got the world's best scientists or some of the world's best
01:12:28
scientists and I'm giving them the resources and I'm giving them the mandate to go solve this problem. The
01:12:33
government, as I mentioned last year, put $40 billion against this problem and said, "Go figure it out." And these guys
01:12:39
at Singa are publishing some groundbreaking research on how to do it. >> But it's easier to catch up or to copy
01:12:47
than to innovate. So if you're China, the first thing you'd want to do is just copy EUV and
01:12:52
get that technology for yourself. >> Well, let me ask you this. What would
01:12:56
you do? So you're the AIAR. You're sitting in the United States and China's
01:12:59
got this lithography technology. Is your goal to steal their technology or is your goal to get your best scientists
01:13:03
and say, "Let's get ahead of their technology." >> If I'm China,
01:13:06
>> neither are the United States. >> It's to solve the problem. What is the
01:13:10
actual economic commercial problem we're solving? >> Right. So if you can figure out a way to
01:13:14
do manufacturing better, cheaper, faster than the way the that China does it, you
01:13:18
would obviously take that path. You're not trying to get to par with China, if
01:13:21
you view yourself to be supreme to China, >> China. But you have to understand even
01:13:24
with these EUV machines and the same is true in the other side >> at two or even sub 2 nanometer scale,
01:13:30
you have these incredible laws of physics that you are pushing to the boundaries of which cause these chips to
01:13:35
have pretty low yield. you have a lot of systems that actually aren't that efficient and highly utilized as a
01:13:42
result. So these systems are brittle. The second thing is that when you have these compute- ccentric architectures,
01:13:47
you end up making design decisions like HBM, they'll have to go and steal all
01:13:52
the HBM which is the high bandwidth memory business that SKHix and Samsung have. But again, that's where Nvidia and
01:13:58
then Google have an effective monopoly. >> Let me ask you a question, S. I mean,
01:14:02
what's your strategic response if China next year goes into manufacturing? with
01:14:06
a sub 2 nanometer system that's got higher yields, is faster, is cheaper than anything that we're seeing anywhere
01:14:12
else in the world. >> Well, I don't think that's going to happen. Let's talk about that if it actually
01:14:17
happens. I don't think it's going to. But what would I be focused on right
01:14:21
now? I would say we want to get more of the leading edge manufacturing in the United States. TSMC has already opened a
01:14:29
big fab in Arizona and they're planning on increasing the size of that and that's really important and we should
01:14:37
get all these restrictions out of the way. They're facing all sorts of permitting restrictions. I mean all the
01:14:43
stuff that Bernie is talking about where he wants to slow down. I mean he's talking about data centers but not
01:14:49
>> manufacturing but the concepts are the same. >> Yeah. Roana, Elizabeth Warren, you've
01:14:53
got >> exactly wrong. I mean, >> anti-che progress people saying, "Let's
01:14:57
stop all this stuff." Meanwhile, China is not just racing to catch up, but they're likely going to get ahead of the
01:15:02
United States. And if we're caught flatfooted because we've got a moratorium on development, a moratorium
01:15:07
on production, it's going to be extraordinarily damaging, >> right? Well, look, this is where I agree
01:15:13
with you is that if this Reuters report is accurate, it does speed up the timeline on China closing the chip gap
01:15:20
from >> decades to a few years. You can go read the Singua papers. You'll see that these
01:15:25
guys are so advanced. >> If they care about being ahead, why are they publishing that paper?
01:15:29
>> So, by the way, this is a really important point and I've picked up on
01:15:32
this from a number of different disciplines in scientific research. So, what's been going on is scientists in
01:15:39
China, they're very smart people. There's very great scientists there. And
01:15:43
like all scientists, they don't think necessarily in terms of nationalism first. They think in terms of science.
01:15:49
They want to publish their research. They want to be known. They want to be the discoverers of these new frontiers
01:15:56
and so they publish. And what we've seen in several instances is that the scientific research groups will publish
01:16:02
and they'll publish slightly ahead. And once they get ahead of the market or
01:16:06
they get ahead of the world, suddenly they stop publishing. And it's almost like the CCP comes in and it's like,
01:16:12
okay, you guys are now, you know, going too far. We don't want to tip our hat
01:16:16
too far. And the stuff starts to recede. And I think there was this one paper on
01:16:20
optics that is designed to replace the Zeiss monopoly in optics that suddenly disappeared and that research team
01:16:26
stopped publishing. I got to find this paper. This came out last year. >> There are a number of these disciplines
01:16:31
where there's publications that go to a certain extent and then they stop publishing. So I think that there's a
01:16:35
little bit of a >> because of the funding cycle in China. You have every single local government
01:16:40
that's given capital to invest in businesses and so they compete and compete until it gets to the state level
01:16:46
and you have one or two national champions. But if this was so important, Freeberg, would there also be an
01:16:51
argument to publish things that would send um that would be misinformation or send people
01:16:59
down a wrong direction? >> No, because you have to again the funding cycle is you get as a policy
01:17:06
person in Shanghai, you get promoted because you make a good bet. >> Yeah. No, but you so by the time it
01:17:13
becomes a one national to Freeberg's point, when's the last time you saw BYD
01:17:16
or CL publish anything meaningful, >> but when they were not the national champion, they were probably publishing
01:17:24
very aggressively. But at that time, there was 50 different companies competing to be the national
01:17:30
champion. So I suspect what's happening here is there's 50 different semi-
01:17:34
startups all over China. Everybody's trying to support their own local version and eventually when there's one
01:17:40
they disappear. >> Okay. Interesting. >> I mean, one of the things we see is
01:17:45
China does give money to these research institutions on frontier science and then there's an industrialization. It's
01:17:52
something the US isn't quite as good at. And I think it's again, we've talked
01:17:55
about the co-opting of our universities as research institutions over the last couple of decades. They've become these
01:18:01
sort of employment centers, if you will, and they've become these sort of weird
01:18:05
social engineering systems. They've kind of gotten away from some of the core
01:18:09
research or that that's been kind kind of co-opted. In China, there are these
01:18:13
sort of dedicated research centers and then there are universities where there's very clear independent research
01:18:18
that goes on on university campuses. They typically get quite a bit of funding. And the way this worked, if you
01:18:24
look into the details of this China National Integrated Circuit Industry Investment Fund, and there were three
01:18:29
funds, one, two, and three, the funds get bigger and bigger as the research teams make progress. Uh, it's a very
01:18:34
smart way of doing things from a central planning perspective. And then in in phase three, they're now targeting these
01:18:40
specific unlocks that then will enable industrialization. So they're funding
01:18:44
some of this core research. The core research has these breakthroughs and then it gets industrialized. It's during
01:18:48
that research phase where we see a lot of publications happening and this is happening in life sciences as well and
01:18:53
in physics and in material science and as soon as they start to get a little bit ahead of the curve then it gets
01:18:58
industrialized and the and the publications kind of stop. So I don't know if it's necessarily the CCP
01:19:03
stepping in and saying hey stop publishing you're going to let the world know too much of what we're having
01:19:07
versus okay the handoff is now happening and industrialization begins. Yeah, look, I would just say that to me the
01:19:13
takeaway here is that the timeline on China closing the gap with us is being sped up. Whether it's the fact that
01:19:21
they're copying what we're doing, whether EUV is being reverse engineered
01:19:24
or maybe their scientists are figuring out a way to leaprog, we are in a pretty close race with China. And that's why I
01:19:31
think it's really important that we don't listen to Bernie and others who
01:19:35
just want to stop the progress because the progress is not going to stop. This is going to happen in China and that
01:19:41
will be a big problem for the United States. >> All right, speaking of socialism/communism,
01:19:46
uh you guys thinking about coming to Austin, my neck of the woods. >> I've been uh pulling up these photos in
01:19:52
Austin of these homes. >> You know I'm doing it right. >> Welcome to Texas, boys.
01:19:56
>> Like on the lake. >> Sachs already bought a house. Sachs already bought a house.
01:20:00
>> He hooked me up with the uh agent. >> What does she got you looking at?
01:20:04
>> I'm not sure yet. We're just >> You guys are bidding against each other,
01:20:08
[ __ ] >> You can have my sloppy seconds. >> You have the high ground, so you can
01:20:11
negotiate hard. >> Uh there is so much inventory, but only like 20% of the inventory is on the MLS.
01:20:19
80% here because it's a no reporting state is off market. So, it's completely
01:20:24
different than >> any other market. Certainly California. >> I want to be on the lake. Like, if I'm
01:20:29
going to do this on the water, >> Oh, really? I don't want the lake. I
01:20:33
mean, if you're here, here's the challenge with the lake. People are going to come up to your house and take
01:20:39
pictures and hang out like 2 feet off your house and starting at 7 a.m. >> Texas house in San Francisco.
01:20:45
>> Everybody's zipping around the lake in motorboats starting at 7 a.m. It's
01:20:49
beautiful. >> I love your thing. It's great, but just >> understand it's going to get loud at 7
01:20:55
a.m. >> There's nothing a good motorboating doesn't >> Who doesn't love a good motorboat?
01:21:02
Jal, I heard you're like an hour away. You're not even in Austin. >> I I'm in the Hill Country on my ranch,
01:21:08
but we're getting a place closer to the city, actually. So, we're 30 minutes
01:21:11
outside the city. >> 30 minutes? My god. >> I heard you're >> I heard you're in the sticks.
01:21:18
>> No, not that far. Not that far. >> No, he's in the suburbs of the suburbs.
01:21:21
>> No, if you want to have like, you know, dozens of acres, you can't do that in
01:21:25
the city. >> When I was growing up in Memphis, they called that Bumble Egypt.
01:21:30
BF >> Bumble. >> I mean, if you want a ranch and you want like dozens of acres, you can't do that
01:21:37
in You can get an acre to three acres inside of the city. >> I found an acre in Terry Town.
01:21:43
>> An acre is doable. Two acres is possible. >> You know what's so sad? Even if this
01:21:48
bill doesn't get on the books, which I think >> everyone's leaving,
01:21:51
>> there's a decent chance it ripped the band-aid off, the revenues of California
01:21:55
are going to plummet. plummet. >> Man, it is um yeah, I mean we saw the writing on the wall. Socialism is coming
01:22:05
and you know this one of the great things about having a United States of America that different states can
01:22:12
optimize for different things. >> The thing here >> that one bill this proposed billionaire
01:22:16
tax has singlehandedly changed the trajectory of the California economy by a hundred to$200 billion dollars over
01:22:24
the next 5 to 10 years. It's an enormous cell phone. People were here willing to
01:22:29
pay the money and now >> Yeah, people were willing to put up with a lot in this state.
01:22:35
>> As soon as you tell people, "Hey, we're we're doing property seizures,
01:22:38
>> property seizures or their threat of property seizures or the fact that
01:22:42
people didn't come out against property seizures is enough for everyone to be
01:22:45
like, "See you see you later." The fact that all the politicians didn't in
01:22:50
uniform stand up and say, "This is ridiculous. We're never going to let
01:22:52
this happen." They let this happen by not defending the property rights that
01:22:57
are endowed in this country. They lost everything. >> They had to defend it.
01:23:02
>> What do you think happens to the state budget over the next four or five years
01:23:06
as a result of this? >> You're right. It's trash. And by the way, and that that's what drives the
01:23:09
socialist spiral because then they try and do more property seizures and they try and get the money back.
01:23:14
>> Who are they going to tax? Everybody's going to be gone now. >> And here's the other crazy statistic
01:23:17
that we never talk about. I was going to try and put some data together and get it as a topic, but we should save it for
01:23:22
the new year. But the California pension fund system is underfunded by roughly a
01:23:27
trillion dollars. So these folks in the California pension fund system are sitting around waiting for money to come
01:23:33
to them every year for the next 30, 40, 50 years and the money isn't there. They're guaranteed that money from this
01:23:39
pension fund system and it's not there. What are they going to do? It's a
01:23:43
trillion dollars short. That's a state obligation. Why would anybody hear something like that and think giving
01:23:49
politicians more money is a good idea? These people are so fiscally irresponsible. They're fiscally
01:23:56
illiterate. There is that it's pretty clear to me that in New York and California it'll be 60 plus% taxes.
01:24:08
And you know, if you were living in a perfect society that appreciated it and you had this incredible safety, you had
01:24:17
extraordinary schools and the roads and the public transit, >> everything worked.
01:24:22
>> Yeah. Like Japan, >> you'd pay 60%, you would be ecstatic. >> Yeah. You'd be like, "Okay, I mean, it's
01:24:28
a lot, but hey, this is a pretty great place to live." If you're paying that
01:24:32
and people are breaking into your home and there's nine overdoses a day, you're
01:24:38
like, "Wait a second." And then on top of that, by the way, >> and they're seizing your private
01:24:42
property now. >> Seizing your property. >> They're seizing your property. And by
01:24:45
the way, they don't care about you when it when you look at the laws. I was just
01:24:49
talking to some law enforcement people. >> City's using your money to give homeless
01:24:53
people vodka. It's just >> Well, I mean, if it was tequila, I mean, I have a good tequila brand we could
01:24:59
give to the homeless. Maybe we can make a deal. >> Yeah. >> Shout out to all at Gaya coming to you.
01:25:04
Uh to delivery is happening right now. Um, in all seriousness, I was talking to some security folks um and was talking
01:25:14
to my security guy in Cal who's a in California and um in California, not only do they not have the castle
01:25:22
doctrine, they've replaced the castle doctrine where you can like defend your
01:25:25
home if somebody comes into it with your gun uh and protect your family and your
01:25:30
property. Now you have to have this um duty to flee. So you have to be able to run out
01:25:39
of your home with your family as opposed to defend your family. So they literally
01:25:44
are telling the criminals, "Hey, listen. If you break into somebody's home in
01:25:47
California, don't worry about getting shot. You they're going to have to run
01:25:51
out or else they're in the wrong." Like this is deranged. The the inmates have
01:25:56
literally taken over the asylum. They they have taken over the asylum. I I realized this two years ago and I pulled
01:26:02
the rip cord. Some Elon realized it six years ago when he tried to build a factory. He pulled the rip cord. You
01:26:08
guys are realizing it now. Everybody's realizing this. New York uh the hedge
01:26:12
fund guys in New York and in Jersey and Connecticut. They realized it. What? >> Only Hollywood guys. I know a bunch of
01:26:18
Hollywood guys leaving. >> Yeah. I literally this producer, one of the major producers who has produced
01:26:24
billions of dollars worth of films came here last year. I met him at a football game. He said, "Tell me everything." I
01:26:29
told him everything. He moved here. He moved here. He's going to start making
01:26:32
movies here. And he is one of the top top I won't say who he is, but you know
01:26:37
his films because his partner who is an incredibly high-profile comedian, like amongst the highest profile in history,
01:26:44
where they make films together, he moved here. Why? He he doesn't want to live in
01:26:49
LA and risk his family's life to an home invasion and and the house burning down
01:26:53
because they don't fill water in the reservoir. I mean, guys, >> hopefully not everyone realizes it cuz I
01:26:59
need to sell my house to someone. >> Good luck. You'll be okay. You'll be
01:27:04
okay. There's a Chinese billionaire. >> Actually, you know, you know who you'll
01:27:07
be able to sell your house. >> There's no billionaires left in California.
01:27:10
>> It's whoever uh the politicians are that are able to aggregate power and money in
01:27:15
the socialist. >> Gavin will buy your house and turn it into a home. >> Gavin's gone. You guys are going to look
01:27:21
You guys are going to look back on Gavin and realize he was the most uh >> upstanding moderate governor that
01:27:28
California had in modern era and suddenly we're going to be like what the >> and I think that's a great place to stop
01:27:33
it, boys. >> We will be doing a couple of episodes between now and the end of the year and
01:27:39
uh yeah, no weeks off. Hopefully we get to see each other over the holidays. I'll see you Saxs uh and you as well
01:27:46
Jimath and Freedberg shortly. Oh, by the way, the president just signed an executive order reclassifying marijuana
01:27:52
from schedule one to schedule three. >> Schedule one to schedule three. Okay. Uh
01:27:59
that's something Obama wanted to do in the second term and never did. So, >> I think it's a good thing. I mean,
01:28:04
schedule one is like heroin. You know, it just never made sense to treat it the same as heroin. You know, I know a lot
01:28:09
of people aren't thrilled about marijuana. It's not great when people are in the
01:28:12
>> I don't like marijuana, but I I agree with this. >> It's not heroin.
01:28:17
I mean it would be on I think most people intellectually would put it on the same level as alcohol, right?
01:28:23
>> I just want it studied so that we can have toxicity labels. That's the big
01:28:26
thing that I want because like if these kids >> Yeah. >> That's the most important thing is put a
01:28:32
tox label on these things so you know what you're taking. >> It's the the strength of these things
01:28:37
over the last 50 years has changed dramatically. And there are Yeah. There there there are these um shards they
01:28:46
create of this like incredibly intense THC that will make you like go psychotic. Like it's really dangerous.
01:28:52
So the smoking a joint from our youth is very different than smoking these like resins and stuff that they've created
01:28:59
apparently that are like a 100 times the potency 200 times potency and they can put you in a psychotic state. Really
01:29:05
dangerous folks. >> Oh that's that's where like the FDA should regulate it. More like alcohol or
01:29:09
something. 100%. Much better process, especially since kids are getting messed up. Yeah.
01:29:14
>> All right, everybody. Another amazing episode of your favorite podcast in the
01:29:18
world, the all in pockets. Love you. >> Happy holidays, everybody. Merry Christmas.
01:29:22
>> Happy Hanukkah. Merry Christmas. >> Happy Hanukkah. Christmas, whatever
01:29:26
you're into. >> Let your winners ride. Rainman David >> and it said we open sourced it to the
01:29:37
fans and they've just gone crazy with it. >> Queen of besties are my dog taking a notice driveway.
01:29:56
Oh man, my habitasher will meet up. >> We should all just get a room and just
01:30:00
have one big huge orgy cuz they're all just It's like this like sexual tension
01:30:04
that we just need to release somehow. >> Your feet. Waiting to get Mercury's are going all
01:30:23
in.