00:00:00
Brian Johnson that's so funny I I uh who knows I am the king of nighttime erections I go to bed thinking about
00:00:07
myself and I wake up thinking myself big correction in between let your winners [Music]
00:00:23
ride we open sources to the fans and they've just gone crazy with it queen of all right everybody welcome back to the
00:00:33
number one podcast in the world man we're starting off with three of the four original band members shamal poopaa
00:00:40
he's your chairman dictator the Sultan of science David freeberg and of course I'm your host Jason calanis and David
00:00:48
saaks from the original band will be on the second half of the show we're going to do some of the classics yes you get
00:00:56
some of the classics including Ukraine Ukraine Ukraine coming up on the second half of the show in our
00:01:02
greatest hits Revival tour but with us again sitting in The Red Throne is the one the only Joe lale is back he is if
00:01:11
you can imagine further right than Keith R boy and saaks they tell him to pump the brakes welcome back to the program
00:01:19
Joe Londale how you doing brother hey Jason doing great here in Texas today ah yes I I see you right over the hill on
00:01:25
the ranch our ranches are within 20 minutes of each other Joe Lonzo and I are shooting guns at our ranches are you
00:01:32
on a ranch Joe uh well I bought a bunch of the homes and connected them so it's kind of like a ranch but it's actually a
00:01:37
suburb yeah it's more like a compound he has a compound subb suburb that creaking sound you hear are
00:01:43
the libs Rolling In The Guillotines yes he bought the small town he lives in Joe
00:01:48
lale's here of course he is a venture capitalist the founder of 8vc they've got six Billy in AUM co-founded paler
00:01:57
open gov in adapar 3 billion Billion Dollar Plus companies he co-founded and an early investor in andrel I'm in the
00:02:06
market for secondary shares you know how to reach me folks if you're selling your
00:02:09
secondary and Andel and building a position for obvious reasons and Oculus wish Oscar Health amongst his other
00:02:14
Investments hey what was the feedback Joe on your first appearance here on the all-in pod people loved it you know you
00:02:19
guys gave me no warning so I was like on a mobile phone sideways but it worked out it was great everyone saw it I gu
00:02:25
looks like people actually watch your show Jason it was surprising apparently people tune in from time to time and
00:02:30
that's why we call it the number one podcast in the world how are you doing shth poopaa how you doing brother I'm
00:02:36
doing really well okay once again giving me a ton to work with there and Fred would you wait
00:02:42
what would you like to know why don't you ask me a question oh well I asked you how you're doing maybe you say oh I
00:02:47
had a great time with my kids I took them to Disneyland or I don't know Chef made an amazing aruga you used to give
00:02:53
me some some color to work with here so Nat was in Rome all last week great what
00:02:58
was she doing in Rome she had to go see her Factory she also had to go and renew her visa at the US
00:03:05
Embassy there okay so she's renewing her visa hopefully she'll be able to get back in the country I know we've
00:03:11
tightened up the borders well she's on an eb2 Visa she's already but she should switch to this eb5 as soon as it's
00:03:16
announced oh yes you can get the golden visa and I think you already put a down payment on freberg how was your week
00:03:23
what how's everything going at ohal you're having a productive week as one of my management team members told me
00:03:28
today it's a very complex business that's usually not a good sign when the conversation starts with that is that a
00:03:34
way of saying everything's no no we we we were good I was on the road this week I just got back I mean it's hard running
00:03:41
a business is hard you hire the smartest people you know and what happens they bring you all the problems they can't
00:03:47
solve so it's it's never easy we've got an incredible docket today let's just start with I'll give you a quick recap
00:03:55
boys of the week since we last taped to say the uh Zone was flooded in the words
00:04:02
of Steve Bannon would be an understatement here's your Trump tsunami for the week Thursday when we tape the
00:04:09
Epstein file dump Fiasco you remember that Joe right big zero big nothing burger then
00:04:15
Friday zalinski was dressed down and kicked out of the White House by the Vice President presidents markets
00:04:21
collapsed they rebounded on Saturday we got a beautiful day off video of trump dancing down a catwalk to YMCA maybe he
00:04:29
played played some golf he was at the White House South Mar Lago Sunday 9:24 a.m. eastern the president pumps three
00:04:37
specific crypto salana Cardona xrp to be in the first government strategic crypto
00:04:43
Reserve Joe ondale starts tweeting I start tweeting everybody's tweeting he quickly retweeted himself included
00:04:48
ethereum and Bitcoin some decentralized coins reaction was wow crazy you had a little bit of a spicy take Joe we'll get
00:04:55
into that later and I'm sure our friend David saaks will have much to say in second half of the program but it was
00:05:02
pretty negative Cardona ripped 70% xrp 32% salana 25% and then there was this crazy trade one whale went 50 times long
00:05:11
on BTC and eth $200 million position on just a $4 million investment everybody trying to figure out who that was I'll
00:05:18
leave it to you to speculate then we start the week Monday Trump says significant TR tariffs with Canada and
00:05:25
Mexico the market collaps he walks back tariffs couple of hours later and the market starts to rebound then at 2:38
00:05:31
p.m. Trump announces a hundred billion investment from tsmc in American Fabs huz off for that and our boy David saaks
00:05:41
Gets dragged out to the podium for a quick 15-second Cameo very nicely done to our boy David saxs and then Tuesday
00:05:49
we have the most chaotic State of the Union I've ever seen highlights include an angry man shaking a cane and getting
00:05:54
kicked out there were some auction paddles from the libs I don't know what they were bidding on there were 13 Biden
00:06:00
mentions and one Pocahontas Wednesday we have news that the Doge Blitz might slow down Supreme Court
00:06:08
chimed in with a 54 decision backing the federal judge who ordered the Trump admin to pay out two billion for USA
00:06:14
contractors then there was a closo meeting with the Senate with Elon maybe they discussed an approval process maybe
00:06:19
some voting type things and then here we are today Thursday when we're taping Market's down 2% on more tariff news
00:06:27
breaking news drops at 11:30 Trump announced are off for Mexico markets aren't rebounding we might be leaving
00:06:34
NATO hold on almost almost there yeah breaking we might be leaving NATO breaking we're shutting down the
00:06:40
Department of Education psych we just found out we're not okay gentlemen that's the week that was no there's
00:06:46
there's three things that are also kind of interwoven in all of this open AI dropped GPT 45 and I think it was not
00:06:57
really that well received I didn't even know nobody's talking about that quen which is the open source Alibaba dropped
00:07:03
to rev which seems actually really best in class so that was really interesting okay then there was a story that said
00:07:12
llama is going sideways Facebook's open source llm yeah and then the markets have just been going I think the
00:07:21
craziest I've actually seen in 20 years of following the markets and specifically you're seeing the mag 7
00:07:29
compressed towards the rest of the S&P 500 and then you're seeing this insane trade away from Europe so there's a ton
00:07:37
that happened this week I mean I don't remember a more eventful week Joe is this a little too much maybe you guys
00:07:45
missed the Shalom Hamas tweet by Trump too which for a lot of us is a big deal he said I don't know if this is hello or
00:07:51
goodbye but he's threatening them really strongly so for people who care about that part of the world it's interesting
00:07:56
to watch what's going to happen so that also happened yeah oh my lord well and Shalom is hello and goodbye right just
00:08:02
to clarify as a word you would say it both right Shalom yeah and peace ambiguous word and
00:08:11
peace well maybe he's leaving it into interpretation maybe they get to pick maybe it's hello no that's what that's
00:08:18
what he wrote in the Tweet oh he did yeah it's your choice okay it's should Choose Your Own Adventure Hamas from the
00:08:24
president United States but I think we should probably get into tariffs this is confounding to most people maybe
00:08:34
since I just did the whole rundown I won't go into all the details about tffs again but just looking at it from first
00:08:42
principles Joe I asked a couple of group chats you're in one one of them in fact and I have about I say about 400
00:08:49
people total in these four group chats what's the strategy here what do you think Trump is trying to accomplish and
00:08:54
man I got a range of answers let me ask you what is Trump in your estimation trying to accomplish with the tariffs on
00:09:02
the tariffs off the Tariff on the tariffs offs as Shou said here this is creating more chaos than any of us have
00:09:08
ever seen in the markets listen Trump's negotiating right so I I actually ran into David saaks each Senator gets one
00:09:13
guest we are both guests in the Senate dining hall hanging out with a bunch of these guys multiple of the guests some
00:09:19
of them were spouses of the Senators multiple of the guests were people who' lost kids def fentanyl right and so this
00:09:24
actually is a very serious issue it's a big thing on the populist right as it should be for all Americans we've lost
00:09:29
you know tens of thousands of young people recently to Fentanyl and and and Canada has done nothing about their
00:09:35
border and so you know you just reported breaking news I had even heard yet that
00:09:39
Mexico might be off can is still on he's using this to negotiate so I talk to the
00:09:43
Senators and I asked him what's going on because obviously I import things all over the place I'd like to know what the
00:09:47
hell the rules are but he wants people to actually crack down on this stuff and save American lives and I think it's a
00:09:53
reasonable thing to use to negotiate and force them to do that okay so you believe it's negotiation because of the
00:10:00
fental issue Cham let me go to you because many people are saying this has more to do with some great reset and
00:10:08
maybe the tenure do you think this is about fentol at the border or something else I think that this is the first week
00:10:19
where I've seen the first real Schism in how people are interpreting what's actually happening I think that
00:10:29
Trump and Elon were very much in a honeymoon period until this week and I think there was the benefit of the doubt
00:10:36
but what I saw on X was a real Divergence where on the one hand there were people that were basically
00:10:44
saying doge is deranged Elon is crazy Trump is lighting the world on fire in one camp and the other Camp saying he's
00:10:52
sticking to the plan and when I thought about this a little bit if you went back
00:11:00
to November the 5th I do think it's important to remember that we were at this moment
00:11:06
where you had this fork in the road and you had all these important issues where I think the best way to
00:11:13
generalize it was that the Democrats believed that the lines should continue to be blurred so whether that was on
00:11:22
gender or race or Merit versus some other immutable trait or fiscal and M monetary policy things were just getting
00:11:31
more and more blurred and then Trump and Elon basically showed up and said actually we
00:11:38
want to refocus and we want to make the lines very visible and clear on all those Dimensions h and a majority of
00:11:46
Americans voted that in but I think what you're starting to see now is the difficulty in actually
00:11:54
implementing that plan and what I mean specifically is tariffs are very nuanced and complicated
00:12:03
on the one hand there's these short-term wins there's these impacts you could deem them positive or negative to the
00:12:10
dollar there's impacts to us bonds there's impacts to us Bond markets there's impacts to how countries deal
00:12:18
with foreign reserves and then there's this impact that happens when the markets react to a
00:12:23
tariff and then Trump takes that off the table and then they snap back so you have this weird set of boundary
00:12:32
conditions right now so I think right now we're in the very difficult part of sorting through what the long-term
00:12:39
implications are and I can get to some of them later but I think that's where we are I think that's really interesting
00:12:43
the goal of tariffs in your mind for Trump is fenol finance related no give me your
00:12:51
definitive what you think this is about I think what tariffs allow us to do is rebase
00:13:00
the long-term Reliance on the US dollar it allows us to rebase our ability to fund our own
00:13:10
deficits and it allows us to rebase the long-term ability for American companies to be economically
00:13:19
vibrant okay so freeberg we got one person with fent all the Border negotiating we got one person on trade
00:13:29
some portion of this I hear and I when I asked in these four group chats I got he's throwing stuff at the wall the
00:13:35
Border he's trolling the 10year note and he doesn't care about stocks and then I
00:13:41
got onshoring and Manufacturing as a possibility we're going to make it more expensive to bring things in so why
00:13:47
don't you consider making stuff here do you think that third possibility is what's going on here just David freeberg
00:13:54
pick one of these three choices or another what's going on here with tus specifically I don't sit inside of
00:13:59
Trump's head and I don't have any direct line of communication to folks that are
00:14:03
constructing the theory and the policy if I were to say what's the most masterful plan in an optimistic way of
00:14:11
what could be going on here what's the master plan I would kind of craft it as follows tariffs aren't being done in
00:14:19
isolation they're being done along with a coordinated policy effort to reduce income taxes and another policy effort
00:14:28
to reduce government spend so those are three actions three legs on a stool so tariffs M reduced income
00:14:36
taxes reduced government spending and they are related to each other they're related to each other because if we
00:14:42
increase tariffs one element of that is that to import products is more expensive for example I buy LED lights
00:14:50
in my greenhouse and the price of the LED lights just went up by 25% this week I
00:14:55
actually spoke with the CEO of an LED company and I was like why don't you guys make the LED here and there starts
00:15:00
to become a crossover point where it actually makes economic sense for the company to make the LEDs here instead of
00:15:07
sourcing them from Asia and there's a 100,000 examples of this when the industrial supply chain goes to the
00:15:13
lowest part of production it's going to end up offshoring when there's no tariffs and
00:15:18
if there are tariffs then you start to do production here so you're increasing both kind of security for the US supply
00:15:25
chain but also increasing demand and creation of a Workforce Now I think that the income
00:15:33
tax piece is critical here because in order to make the capital available to build that industry here we need to have
00:15:39
unleash capital and reducing of income taxes the economic theory would be that Capital will now flow into these
00:15:46
entrepreneurial activity these opportunities that have emerged where suddenly it makes sense for me to make
00:15:51
textiles to make metals to make materials to make cars to make all this stuff here in the United States that I
00:15:56
otherwise wouldn't be making so both the corporate and the personal income tax by
00:15:59
reducing it unleashes capital that instead of going into the government it now goes into the private sector into
00:16:04
building businesses okay I think that there's another theory about this which is as you drop the income
00:16:10
tax one of the kind of key theories that I've heard spoken about a lot lately and
00:16:14
I think we're going to hear about it a lot more this year is trying to get the United States to move away from an
00:16:19
income taxation model to a consumption taxation model so effectively what the tariffs do is there's a tax for you
00:16:25
buying certain things so now instead of getting taxed when when you earn money as an individual you get taxed when you
00:16:32
spend money and some people think that that's both a more fair system and a more kind of economically vibrant system
00:16:38
because that will drive investment in the things that people want to to produce because the money's going into
00:16:44
production so you that do you think that free Breg I'm curious I I don't know it's a really interesting economic
00:16:50
theory I mean I am not opposed to seeing some sort of an experiment play out where we look at a shift from income
00:16:57
taxation to consumption Taxation and see if it actually does have an effect on economic growth and productivity it has
00:17:04
not been done in 150 years there's a lot of economic theorists on both sides of the equation saying this does work or it
00:17:10
doesn't work okay and let me just say one last thing by reducing government spending we are moving workers from the
00:17:17
government into the private Workforce so as those new Industries pop up as those
00:17:21
Investments start to get made in building new industry onshore where are the workers going to come from remember
00:17:26
the government's 30% of the US GDP today so if that's not a great way to invest money maybe the Private Industry is
00:17:33
better at investing money in employing people that will unleash the workforce and it will counterbalance the inflation
00:17:39
that we're experiencing so there's a lot of inflation because of tariffs and by reducing government spending that's the
00:17:44
offset to inflation so those three actions I think are three legs of a stool and they actually are all
00:17:49
interrelated to one another so that would be my grandmas theory of what might be going on this is an interesting
00:17:53
triangulation theory that people have been speculating about and there are a couple of caveo here Joe number one we
00:18:00
do have lowering income tax and lowering Services experiment it's called Florida
00:18:06
Texas and a couple of the states where they have lower income tax and and more consumption tax we pay a lot more in
00:18:12
real estate taxes here something we consume putting that aside the really interesting issue is we're at the lowest
00:18:18
unemployment of our lifetime 4% where are all these workers going to come from what do you think Joe now that you've
00:18:25
heard the two other panelists here discuss it what are we trying to get to where is
00:18:32
the destination at the end of this term Trump's lame duck he can go wild here he's not running for election and you
00:18:39
know what what do you think he wants to see do you think he just wants to sement some sort of legacy and if so
00:18:46
what's that Legacy and how do these actions equal his goals and Legacy no listen I agree with what David with what
00:18:54
David was saying Jason and it's it's a really important point also that we should mention is that the last four
00:18:59
years the economy's looked okay but part of that is because government's been hiring like mad and so the point he made
00:19:04
is that actually you know having twice as many people you know harassing me I just got back yesterday no action on an
00:19:10
audit that been harassing me on for three years they found nothing having twice as many people doing things like
00:19:15
that and and or like you know running TSA or pushing papers around in the Department of Labor doesn't actually add
00:19:20
output to the economy and so you know it it does seem like it makes a lot of sense let's take a million workers out
00:19:26
of the Consulting class around e DC out of the you know paper pusher classro on DC and let's actually deploy them to the
00:19:33
actual productive economy Elon and Trump have both been saying that I think David
00:19:36
is 100% right and it is true a lot of my companies thinks that the Tariff stuff are looking to build stuff here so I'm
00:19:41
not a huge fan of tariffs personally but they definitely make sense for things in
00:19:45
defense they definitely make sense for negotiating with countries and it is true it is pushing certain people to
00:19:50
including me to build some more things in America here's where tariffs make a lot of sense if you have markets where
00:19:56
there are domestic alternatives Andor where things are fundamentally commodity there's no reason why tariffs
00:20:03
can't work to create the incentives to redomicile economic productivity inside of the United States that's a that's a
00:20:10
slam dunk I think and and shamat there's another Twist on that too which I think
00:20:13
we should all acknowledge is America does have some really tough environmental laws despite what Jason
00:20:18
may think of me I actually don't want my daughters growing up with you messy air
00:20:21
messy water you know screwed up country oh I don't think that of you I I know that you're a nature guy you're like a
00:20:27
classic bush guy but but here's here's the thing in China and Indonesia and all these other countries they are just
00:20:33
shoting over the environment as they make things I think tariffs are very reasonable on that case like it's not
00:20:37
fair to make it more expensive for us because we're doing it well and then we Outsource it for them to destroy things
00:20:42
right so so there are some things there where it does make sense and what I would say is the other the other side of
00:20:47
the of the Tariff knife is that if there are markets though where you're making something that's fundamentally
00:20:54
Innovative where you are but one maker the problematic part of where tariffs really affect the US consumer is then
00:21:03
the price of that product of which there are no competitive Alternatives can go very very high and that's inflationary
00:21:11
and I think that that slows down consumption and then if if that consumption is not just of something
00:21:16
that's a nice to have but a must have then it becomes problematic and so you could see where tariffs could impact
00:21:23
certain industries for example if there are Innovative drugs I think that that's
00:21:29
problematic if there are Innovative Technologies of which there's only one vendor that's problematic so all of
00:21:34
those need to get sorted out but on balance in commodity markets like look at Autos Autos is a perfect example
00:21:41
there are so many purveyors and providers of Autos there is oems all around the world and so to have a
00:21:51
compensatory system doesn't seem like an unreasonable thing where it's a tit fortat tariff but
00:21:58
in markets where if you need for example a specific piece of equipment from asml
00:22:04
to build a chip and now all of a sudden that that machine is 25% more expensive or 30% more expensive and they pass that
00:22:11
cost Downstream it becomes very speculative and it becomes a little bit more fragile
00:22:18
I think this is dangerous though right jth because I agree with you in theory but then there's something where you
00:22:23
know if everyone's lobbing for their thing to be an exception you end up getting this very crony system that's
00:22:28
that you don't necessarily want right so you have to be very careful how you define these things exactly so this is
00:22:33
why the I think like sector by sector it's probably you can probably go and pass the smell test and say if there are
00:22:40
multiple providers and or if it's somehow commodity I think it's easier to absorb
00:22:45
the Tariff in the short term maybe that's the right way to say it which is if you believe if Trump believes
00:22:50
everything should be tariffed then instead of debating if to your point maybe the right thing to debate is when
00:22:57
and you have to put things on a much longer Glide path so that you don't just create inflation out of nowhere and or
00:23:05
you don't hold back American business or American consumers well this is a key point because you do need to have
00:23:10
predictability to make investment and reciprocity so really two important points Shaman's making here one on
00:23:16
reciprocity these things haven't been looked at for a while I'm not sure how they got so out of whack but just
00:23:22
putting some facts to this uh chat's exactly correct we get placed uh when we send cars to the EU they they get a 10%
00:23:29
tariff but when we get their cars it's a 2 and a half% tariff who let it get out
00:23:34
of whack I'm not sure but why not make the reciprocity perfect and just hey you say 10 we say 10 you say two and a half
00:23:40
we say two and a half and that would make I think a lot more sense just to put some numbers here on government
00:23:46
employees it's not as bad as people make it out to be a lot of our spending is nonemployee related but it is if you
00:23:55
look over the last two administrations we have added million 2 million three employees across all I disagree and that
00:24:01
hold on let me just finish the sentence so you have the facts and then you can disagree with the facts one point3
00:24:06
million additional employees added this does not include contractors and so we don't know what USA was doing with Nos
00:24:14
and contractors and I think that's where we do need to get some clarity and to chat's point this has all got to become
00:24:20
predictable you cannot put tariffs on off every week or else how does your friend Dave who wants to do the LED
00:24:27
lighting or your encouraging to do LED lighting know if they should build a factory and invest 10 million in that
00:24:34
you disagree with the number of employees you want to address that yeah look the government accounts for 30% of
00:24:39
GDP in the United States that's an extraordinary sum so just I was talking just about the employees that's a much
00:24:45
smaller percentage but that doesn't matter the direct employees of federal agencies is a fraction of people that
00:24:52
are employed indirectly by government spending this is super important as we all know many government agencies write
00:24:59
checks to large contractors subcontractors and third party service providers that do the work for them so
00:25:05
the money gets transferred they then employ the people and they do the work so it doesn't technically show up on
00:25:10
federal government payroll registers but these are people that are indirectly employed by federal spending that's
00:25:16
super important to to acknowledge that a large percentage of the US Workforce is
00:25:20
indirectly supported by federal dollars yeah it's gone up it's gone up massively
00:25:25
with the NGS too so you've had about four million people employed by contractors in DC 1.6 million more at
00:25:30
the states actually by federal by federal spending and then you have the NOS no one knows the noos Biden
00:25:36
Administration took down the data I used to see things in 2020 so we don't even know how much money but we know it was
00:25:41
hundreds of billions so it's pretty crazy the number one thing about how doge is not being done fully is that
00:25:47
Elon is doing an amazing job you know whether or not he cuts 500 billion or trillion or a lot more but the Senators
00:25:53
and the congressmen are not willing to take it out of their bill the reconciliation bill right now talking
00:25:58
about cutting one to two trillion so rather than like this is over 10 years it's ridiculous it's ridiculous if it
00:26:04
was equal to Elon was doing it'd be at least five trillion dollar and I've pushed a bunch of them they say oh the
00:26:08
Congressional budget office and all these things I'm sure there's some tough things there but like this is crazy we
00:26:12
need to see what these Cuts need to be on Doge and we need to cut five trillion and none of these people have the balls
00:26:17
to do that is there's not the political will to do it is my interpretation and just no coones let me just show you one
00:26:23
chart to back that up I have my new disg graciados look at this chamama you want to talk
00:26:30
about software and waste 35,8 55 according to Doge breaking news service now licenses on three products
00:26:41
only being used by 84 people oh my God you kidding me 11,000 acrobat licenses with
00:26:50
0.0 users disad absolutely abhorrent and I'm saying it right now I want an investigation into procurement who sold
00:27:02
this who bought it this could be a crime this could be fraud that could be Kickbacks I'm saying there could be I
00:27:07
don't think it's that but I do think you have to look at the earnings of these companies in question where's totally
00:27:13
correct number two totally correct if service now ever wants to work with the government again Mr
00:27:20
President Mr President our president I want them to pay us back for the unused licensees is and I want a full order for
00:27:29
the last 10 years if they don't pay us back that money and give us a credit hold on list banned forever hold on it's
00:27:35
not thank you Mr President this may not be service now's fault this may be the inaptitude of the people that bought the
00:27:40
LI course but they should still give us a credit I want the money back for the American people I do think Adobe has the
00:27:45
worst have you guys ever done Adobe subscriptions they're impossible to cancel I think Adobe 11,000 Z us only
00:27:51
the only thing harder than cancelling an adobe license is trying to cancel Wall Street Journal I was about to say Wall
00:27:57
Street Journal Hall of Fame let me just say something about the the budget because Joe brings
00:28:04
up something important unbelievable I'll just say it again at the sake of being redundant we're getting to the phase
00:28:10
where the details are complicated and they now matter so we've talked about repealing the IRA in its totality right
00:28:18
so that was a statement and there's there's theoretically a lot of money there but the details now all of a
00:28:24
sudden become complicated FK published a report just this past week and what do you think it
00:28:32
said was the percentage of incremental electricity that was generated from Renewables versus non-renewables I I'll
00:28:40
tell you the answer it was almost 91% in December so if you now tie two huge initiatives together which is how do we
00:28:49
find a budget that saves money and how do we continue to win an AI maybe you would have thought those weren't related
00:28:57
well guess what we know that AI needs a tremendous amount of power and whatever you thought
00:29:03
you knew actually you had to reer right because what Elon has shown is actually you need to now create these Mega
00:29:10
clusters 100,000 gpus going to a million gpus all of the Power forecasting that we have is miscast it doesn't even
00:29:18
account for this number one number two there are 35,000 applications into FK to get approved to generate
00:29:29
electricity 35,000 that's going to meander through some administrative rigu there is a 5year delay to get a gas
00:29:38
turbine into America and online okay if you ordered one today the fastest that you can get it turned on is
00:29:45
2030 the fastest that you can get a nuclear turned on is 2035 so we don't have the ability to
00:29:52
generate incremental electricity very quickly but for Renewables but then if you rip out the IRA there's many parts
00:30:00
of the IRA by the way that are just trash Nick I don't know if you can find it but Barry Weiss found this insane
00:30:06
thing that made me so angry which I'm happy to talk about which was like a 30-day Grant process that resulted in A7
00:30:13
billion Grant to some shell oh this was throwing the gold bars off the castle but but the other part of the IRA this
00:30:21
narrow part is what it did to reinforce tax incentives and tax equity which is a
00:30:27
200 billion Market that incentivizes that 90% of energy generation so my point is that
00:30:34
when you start to get into the details when the house Ways and Means Community has to figure out what part to put back
00:30:41
this is going to be hard because it's like hold on if you got the whole thing now all of a sudden you take 90% of the
00:30:47
incremental energy generation incentives out of the market you don't have enough
00:30:51
electrons there isn't enough electricity so then you lose the AI Ray so you start
00:30:56
to lose it I think the point is that we're now in the hard part where the details really matter listen you got to
00:31:02
start with the chainsaw we saw that at Twitter and by the way maybe you do like when we started this he just tweeted
00:31:08
this out he said guys now it's time to get surgical he and he said this per yes that was the metaphor I was about to use
00:31:13
is like you know you start with you cut out the goddamn service now in Adobe subscriptions and then you work on
00:31:19
something you know more DEA and maybe that's where we are IR just for the audience inflation reduction can I just
00:31:25
do a rant on this on this pop-up NGO thing to me this is like the worst of America and it makes me so angry and
00:31:32
I'll tell you my lived experience so I'm on the other side of this I started a company with these guys from Tesla to
00:31:38
make battery materials in the United States in 2019 we grind we grind we put in tens I
00:31:45
put in tens of millions of dollars we get a deal with a big OEM and then you see these doe grants we
00:31:52
spent millions of dollars we file a very detailed plan to build battery medals and battery capacity in
00:31:59
America we got rejected okay it was an entire yearlong process we got rejected we put it past us we kept working we
00:32:08
found more deals we found a way to survive raise a little bit more money and then we applied again on some
00:32:15
success and we got a $100 million Grant okay that was that's what just happened this year but then yesterday I read and
00:32:24
Nick maybe you can throw this tweet up this Barry Weiss investigation somebody in 30 days who was connected to
00:32:32
the Democratic infrastructure had some shell organization that got a grant that was 70 times bigger than us like we've
00:32:41
made stuff we have deals with oems we had to validate every step of the way we were rejected once so our
00:32:47
process to get a $100 million doe program was two years these people showed up in 30 days and got seven
00:32:55
billion that's just wrong why didn't you put why didn't you lead with Dei or something you would have gotten a
00:33:02
billion you just LED with the wrong thing you were actually providing a product or service people need this is
00:33:07
this this is why you don't have any equity in there for the minerals this is why it's so frustrating to build for the
00:33:12
government guys this is what paler and SpaceX had to deal with that's why they both sued the government is that all the
00:33:16
friends who used to be the CIO used to be the general made the right donations had the right kid on the board it's all
00:33:23
corrupt and then the actual substantive people you have to work like how do they
00:33:26
give $7 billion in 30 days we're gonna find out you got a bunch of democra operatives on the board let well let me
00:33:33
challenge you guys on one point there are now claims being made by reporters and by Third parties that are saying it
00:33:40
is a new form of kleptocracy with all the friends of Silicon Valley installing their friends
00:33:46
and agency heads as under secretaries and so on that's going to benefit Silicon Valley investors Silicon Valley
00:33:53
companies Joe jamath Jal I mean how do you guys react the claims that there's now you know this new kind of
00:34:00
kleptocratic movement it's the old guard is gone new guard you have paler you have andreil so go ahead you you answer
00:34:07
let's let's talk about this I mean when we go to DC when I go to DC what I am asking is I want there to be a Fair
00:34:13
competition and if I win I want my company to actually be able to win the contract because the way it's worked for
00:34:18
20 years like like epis you just raised $250 million this week it's a great company we you know we had a big contest
00:34:24
four years ago L3 rathon northr these guys you know in and out of government for decades they've they've gotten tens
00:34:30
of billions of dollars to the same technology area when we went head-to-head with them we we didn't just
00:34:35
like beat them by a little bit we shot down the hardened drones nine and a half times farther away same size same power
00:34:40
nine and a half times completely wiped the floor what was the cost difference between the bids like are you saving us
00:34:44
massive money massive money I invested only 30 40 in the whole thing at that point and they spent billions and we
00:34:49
have much cheaper much better not even a question and and you talk to the and you
00:34:53
talk to like at the time the the chief of staff of the Air Force the guy run the four star and and he says well Joe
00:34:58
this was written three years ago it looks like rathon probably did help write it and they required all these
00:35:03
things and your way you're doing it I'm like I I'm like yeah I'm using a chip instead of a cathod ray tube that's why
00:35:07
it's working so much better like yeah but it was written for the way they're doing it and I could overrule it but it
00:35:11
break a lot of glass so you probably wouldn't get in three years because everyone knows you're the best but it's
00:35:15
too it's too frust you know it's too stressful to give it to you right now like that is that so so so what I'm
00:35:19
doing is I'm not going and saying give my company's money I'm saying I'm saying make this actually a functional logical
00:35:25
process and give me a chance to win it from the best and that that is a hundred times better for our country to push how
00:35:30
do you but how do you make that transparent and how do you avoid there has to be massive transparency how do
00:35:35
you avoid the the perception of conflict and the perception of kleptocracy well it's acquisition it's acquisition reform
00:35:41
right so like this this a really important story you guys probably know we were in the Philippine jungles in the
00:35:45
early 1910s needed new pistols our pistols were terrible they had like a one-page thing what they needed there's
00:35:50
six arm manufacturers competed that's how we got the Colt 1911 in like three months it won by the by by a large
00:35:56
amount it's an awesome gun uh 12 years ago we had a 700 something page document that the bureaucrats spent years on
00:36:03
outling what they needed for a new pistol or probably needed to do Dei stuff I have no idea it's like this long
00:36:07
comical document they still don't have a new pistol today and so the way the way
00:36:11
we do it is we have a very clear process where it's very specific on the outcomes
00:36:16
not on the inputs and you have a contest and and then and then you make sure that
00:36:20
you know it's not it's obvious who wins guys it's not like we're like slightly better it's like we're shaming them so
00:36:24
the only way they can stop us is by playing these games so much better I think that if you're in the
00:36:31
administration or if you join some part of the administration whether you're a full-time employee or a gsse or just a
00:36:40
volunteer there's going to be that perception of impropriety or influence pedaling that's comes with the territory
00:36:47
so how do you avoid it and I think that Joe is exactly right when the administration was getting formed one of
00:36:54
the things that happened I had an opportunity to work with some of the folks to write some proposals for what
00:36:59
theoretically could happen in some of these bigger government organizations where there's just huge pockets of spend
00:37:05
and where I spent most of my time is what Joe talked about how do you create Open Standards so that it's very clear
00:37:13
what the competition is so that the rules on the ground can't get manipulated by people who are rolling
00:37:19
out of government into private industry or somebody has a very deep relationship
00:37:24
because of lobbying those are the things that pervert the clarity of what should
00:37:28
happen because then what happens can be far a field to that so number one is I think knowing that this time around a
00:37:36
different class of people are going to be seen on the quote unquote popular side it's really critical that all of us
00:37:45
that are involved in this promote extremely transparent Open Standards publish every RFP publish every spec
00:37:53
publish every evaluation criteria make these things as mean itic as possible so for example if you're going to go and
00:38:01
field a drone there's an incredibly detailed set of data that you should be publishing in it's not dissimilar to how
00:38:08
an FAA asks for flight test data and you should be able to review that so that then it can be escalated so that if
00:38:16
somebody then gets a deal because of preference and you think you're structurally better on the data there
00:38:22
needs to be an escalation and a release valve that says hold on this is just being manipulated and I think that's you
00:38:27
fight back yeah on not just this version of a potential Winning Side versus losing side but forever in the future
00:38:34
the government should be open the government should be transparent and every single point at which they're
00:38:41
making a decision and giving money should be measurable and known you guys got exactly right there's
00:38:47
transparency there's oversight obviously but there's whistleblowers as well and there's the role of the press in all of
00:38:53
this to sort of fact check it and to check in on it as a safeguard with the public getting engaged and that's one of
00:39:00
the great things that Doge has done by having a Twitter handle I can pull up hey here's what's going on with these
00:39:06
licenses and make an example so that kind of transparency helps and then finally we have to look at campaign
00:39:13
finance that is where a lot of the appearance of proprietary exists go back to this other thing because that's a
00:39:19
super important Point like it just occurred to me that if what you said happens then look the incentive today in
00:39:25
America is to try to position oneself to have one of these roles and the reason is because David of
00:39:32
what you said there is the chance to then preferentially nudge an opportunity your way right yes why do people sit on
00:39:41
committees why do people volunteer at least at that level and if you introduce Open Standards then the
00:39:50
real incentive to want to go do this should be because you actually are patriotic and want to just help so chth
00:39:55
I think I think you're right about the standards but I want push back on the incentive today like I know a lot of the
00:40:00
people who are getting into this and I really do think they're there to fight for the country I don't just say this
00:40:05
like as like you know naively or something like these people really are there for the right reasons for the most
00:40:09
part no I know I'm just saying generally over like the last 50 years if you look
00:40:13
at people there is this implied sense like for example like Goldman Sachs had a direct line to become treasury
00:40:19
secretary if you were the CEO of Goldman You' you were the treasury secretary now
00:40:24
don't you think that that was discussed amongst Partners at Goldman and and do we not think on the margins that that
00:40:29
beneficially helped Goldman of course it did we'd be we'd be naive to think otherwise my my point is not that my
00:40:35
point is just that going forward the best thing all of our friends could do is just make it all open source and Open
00:40:41
Standards that would be an incredible artifact I think for America Joe I think you telling us hey I trust these people
00:40:47
they're our friends you know that works with all of us because yes we know them we know they're going to do the standup
00:40:52
right thing and if you already have a ton of money like some incremental amount of money is not going to move the
00:40:56
needle for you it's it's farsal for us to think that David Sachs is going to give up four years of income producing
00:41:02
have to sell all his positions and that is in some way good for his balance sheet it is not he's going to miss out
00:41:08
on four years of AI and the massive runup of our lifetime in order to serve the country but I can tell you people
00:41:15
don't believe that just like you know you talked about the kleptocracy and the revolving door to raon or whoever that
00:41:22
people have talked about forever what you need is whistleblower protections journalists going after this like Barry
00:41:29
Weiss is doing old school journalism investigative The Whistleblower laws are great in our country we need to keep
00:41:36
reinforcing those but I'm going to go back to we need to limit campaign contributions we have to get rid of
00:41:42
super packs because these create the appearance of impropriety and the appearance of impropriety with Trump's
00:41:47
mean coin and that announcement on Sunday for the crypto Reserve was you know it doesn't help the mission here
00:41:55
that Trump is trying to get done so so maybe you could speak to that because that's where the appearance of
00:41:59
impropriety is great you got people like Sor who's doing his Bitcoin thing he's going on Friday and you know sax will do
00:42:07
a do a little bit here and announce some stuff on the program hopefully but maybe
00:42:12
you could talk about what you objected to with the coins the meme coin Endor the the announcement of the crypto
00:42:20
Reserve should our government and after all this donations from massive people like I saw at the crypto ball all the
00:42:28
people who were tweeted by Trump that looks terrible you tell me what you think I agree with you on the Tweet
00:42:33
you're sneaking two things together here though so I want to be really precise Jason because let's be precise that's
00:42:37
what we do here there are a lot of different possible ways that people can help politicians and so one of them is
00:42:44
if you're a celebrity like even all your guys show at this point you can you can
00:42:48
affect what people think that's powerful more there's there's other ways that if
00:42:52
you're part of a big Union if you're part of a government Union that's very powerful you know in our society if
00:42:58
you're part of the American Medical Association Healthcare System that the doctors and health systems are very
00:43:02
powerful even without super packs in our society and what a Super PAC is it's a former free speech and it's true wealthy
00:43:08
people have the ability to influence things through that speech but it's like one of many and so if you're cutting
00:43:14
that you're basically saying okay I don't want Elon and Joe to have as much say there but I do want to have even
00:43:19
more say for the celebrities and for the doctors and for the union members and government so you have to realize you're
00:43:23
dealing with a complicated situation with lots of forms of power I do agree with you as I said listen I saw David
00:43:29
and gave each other a hug I think we're all good but I was very frustrated with the posts of trump mentioning specific
00:43:35
coins I don't know who was trading them before it just looks bad like we're fighting all this grift doing all these
00:43:39
things where we have the moral High Ground I agree I don't want to give up the moral High ground with these with
00:43:43
these silly schemes that that that's 100% the case are you saying with like there's many forms of influence that you
00:43:48
think Super packs and rich people should be able to I think speech is important $50 million $2 million donations you
00:43:55
actually think that's fair for democracy I actually I actually think speech is very important I think the ability for
00:44:00
me to send out something is say guys I'm studying this it's corrupt it's been corrupt for 50 years we have to all get
00:44:06
together and stand against these Health Systems these crazy defense companies that have captured and broken everything
00:44:10
like I I think my ability to speak and do that and to convince people is really valuable and I and I've you know I
00:44:15
passed dozens of laws each year into these different states by convincing people nothing to do with making me
00:44:20
money that these incentives and accountability are wrong I think that's a good thing that I'm allowed to do that
00:44:25
should be so when you say speech you write a check you mean write very large checks you have to be careful that the
00:44:31
reason the Supreme Court ruled for super packs is not just about giving you're not you're not giving them the money
00:44:35
you're actually speaking yourself so when Elon spends $300 million he's actually spending it many times putting
00:44:41
out his own speech or he's putting out what about you Jamal do you think that Soros Elon let's take the names out of
00:44:49
it do you think there should be a cap on what you're able to donate to Super Pacs
00:44:53
because this does create the massive appearance of impropriety whether it's in Crypt
00:44:57
whether it's on the you know Soros on the Democrat side this seems to be I mean I I'm in favor of there being more
00:45:03
hard caps whether it's 510 or 25 million I think there needs to be caps and I think we should put a fund together for
00:45:09
the last two or three people and let them get that money from the government to run their campaigns like other
00:45:15
countries do I think it's important to note that this pendulum has swung pretty wildly out of wax in
00:45:23
citizens united yeah and it's not this is not a republic thing meaning there's a whole buch of factions there's the
00:45:30
George Soros faction that's true there's the liberal Democrat faction L we forget
00:45:35
I think Zuck spent 350 million in 2020 oh yeah then there's the kooch brothers faction and then there's what showed up
00:45:44
this year with Elon so my point is there's all kinds of pockets of spending in all manner of ways I think the
00:45:51
question is should citizens united have allowed this kind of spending and are we
00:45:57
better off as a democracy for it and I think what does shamat think the reason why I would be in favor of going back to
00:46:04
the way it was is that I think the biggest problem is the redistricting and the jury mandering that happens and the
00:46:11
amount of influence that happens Downstream inside of state and local elections and there are just places that
00:46:19
are just so sclerotic stuck if you look at the federal despite all the spending you still see at the
00:46:28
presidential level like pretty reasonable and healthy competition between two people it's much more
00:46:36
difficult to see dynamism lower and lower down ballot and so the reason to get rid of citizens united from my
00:46:43
perspective is that you'd have much more vibrant local state mayoral elections those things have huge impacts I think
00:46:51
to to Quality okay so you and I are in that camp Joe's in the other freeberg your thoughts you're the desire vote
00:46:57
here it's two to one in terms of the panel well you just said to me you you just said to me you think we should go
00:47:04
back the Supreme Court's on my side so you guys are in trouble no no yeah I mean but the point of this program
00:47:10
sometimes is not just to is to take ownership of your opinion and defend it so I we have I want to see people own it
00:47:17
here in the discourse or freeberg you can say pass but you don't get to say nothing okay what does it mean to spend
00:47:25
money on on a political point of view exactly what does it mean it it means you can put a book I mean the other side
00:47:33
wanted to censor books because like like if I want if I want to pay someone to make a book for me if I want to pay
00:47:39
someone if I want to pay 50 people to go and engage the community so I can get some leverage on my time if I want to
00:47:47
pay someone to make a website to promote my point of view on something I should be able to do that and if my point of
00:47:53
view is related to a vote that Congress might be taking or is related to a candidate that's running for election or
00:48:03
is related to taxes or is related to some other social issue I don't know how you can kind of very clearly delineate
00:48:10
the difference between some kind of political party or some political candidate versus my having a point of
00:48:17
view on an issue if I care very deeply about animal Weare which I do and if I had enough money that I felt like I
00:48:24
could spend that money to influence people's point of view you to improve Animal Welfare through laws and through
00:48:30
candidates I would spend that money and I should have a right to do so and I shouldn't feel restricted that I can't
00:48:36
go publicly express my voice make websites put up Billboards put up posters buy ads and papers telling
00:48:42
people how wrong it is the way we treat animals and slaughter them and keep them
00:48:47
living for their very short lives in Terrorist conditions I want to be able to express that point of view and so I
00:48:53
kind of Veer to this idea can I ask you a question would you do you think that your money spending if the balance of
00:48:58
power to get your view was to redistrict certain places so that then you could get a majority of people that were
00:49:08
ideologically aligned to you elected would you do that as well forget there's no ads running this is about a different
00:49:14
form of electoral influence would you do that so not spending money you're saying
00:49:18
like I'm not spending money to you you'd spend money but it's not for ads it's not for how does that work how do you
00:49:22
spend money to redistrict you get certain people elected by Trucking people out to vote and then you get that
00:49:29
person to join a coalition that then redistricts I mean maybe Trucking people out to vote as an action should be
00:49:34
illegal that seems pretty reasonable to me well yeah I mean to your point freeberg you asked like how do you
00:49:39
define it what I'm trying to point out to you is for every dollar that goes into politics I think it's I would ask
00:49:45
you guys to just suspend belief that 100% of that goes to ads no no what I'm trying to say is I would say a very
00:49:52
small not a very small 10 10 10 to 20 cents goes to ads 80% goes to all kinds of shady stuff and this also canvas by
00:50:00
the way you call it Shady but I would argue like what if I want to make a bunch of websites what if I want to make
00:50:05
like you know have people go out and express the point of view in the Town Square you know like there are other
00:50:09
aspects of what you might what I'm saying that's fine that's in the 10 cent bucket the 80 cents what I'm trying to
00:50:14
tell you explicitly is how it's spent today is not in the ways that you think I think that the fact that someone calls
00:50:20
it Shady might be because they disagree with my point of view and if they agree with my point of view they might not
00:50:24
call I think I think the tactics today look I play with the conditions on the field but if you look at them meaning
00:50:30
like using dollar incentives to incentivize people that's allowed today you can pay people to vote today before
00:50:37
we had pay them to join a super pack or something like that but let hold on let me let me just get Joe involved here so
00:50:43
Joe you heard freeberg you're kind of in alignment I think broadly yeah but we can Define some very specific things
00:50:49
that are obviously political like the window of when you spend the money like telling people well because you could
00:50:56
say say in the six in I'm not tarting a specific vote I get it I get it if you're not if you're
00:51:02
targeting an issue that's one thing but when you tell people she's for they them
00:51:06
he's for you that's clearly a political ad now you could take those ads you could take canvasing you could Define a
00:51:13
subset of behaviors and you could say you can raise up to this amount of money per person in that way that's me those
00:51:20
things are explicitly political when you tell people this is about candidate a versus candidate B if you were say this
00:51:27
we're not going to mention any candidates but we're going to talk about your puppies and you trying to increase
00:51:31
your Q score here on the goddamn pod by Saving puppies don't be Animal Welfare is a [ __ ] up issue and something you
00:51:38
to be agreement with you I just don't like how many points you're scoring with the audience over did you guys see this
00:51:42
thing on Instagram my wife show ridiculous I'm Gonna Save five puppies for my Ranch somebody save some cows did
00:51:48
you guys see this Instagram reel my wife showed it to me it's like of a of a calf
00:51:53
chasing a dog and it cuts to this Asian guy and he's like what's the big deal here what are we talking about like you
00:52:00
know you want us to not eat everything blah blah blah and then he realizes that they're talking about the dog versus the
00:52:05
the cat don't trigger freeberg don't do that leave freeberg freeberg I got 33 ACR of paradise don't laugh I got 33
00:52:12
Acres patus I'm going to save every animal in in Central Texas I'm gonna eat them and I and I would give you money to
00:52:18
do that got a deal actually I I actually I agree with what jamath was saying about Jerry mandering I think we could
00:52:25
use AI for that's a separate conversation it's it's discussing how it works right now however Jason the
00:52:30
problem at the end of the day with defining what's political or not is the boundary cases are really tough and you
00:52:34
do end up needing effectively effectively a censorship word example is I write I write a book about the dangers
00:52:41
of Communism and it explains how it's linked to things going on today and I like give it out at like all these
00:52:47
people are gonna be voting I mean there's just so many boundary cases said you can spend up to 10 million a year
00:52:53
doing political activity 10 million a year gives you a cap so you can only B this is not political activity it's my
00:52:59
art this is this is an artistic piece but when you put the book in and say vote for Biden then we would say okay
00:53:05
you put a vote for B you see what I'm saying though it becomes it becomes really complicated I just ran it through
00:53:11
grock and what the answer was is that 56% of all the spending happens to be on ads and 44% of all dollars in 24 25 was
00:53:22
spent on other yeah so there you put canvasing in there I bet you it's 75% so if we just say for those two activities
00:53:30
put a hard cap on them I would be for that but let's keep going we got a bunch of about the market Market's let's talk
00:53:36
about cor weave all right gentlemen we can't talk about politics all day as exciting as it is let's talk about this
00:53:42
cor weave IPO if you don't know cor weave is part of a new type of infrastructure provider called neocloud
00:53:50
it's a fancy way of saying using gpus to build data centers this is a really interesting
00:53:55
company because they got on to gpus early and they had a lock in on a large number of nvidia's gpus they've uh got
00:54:04
32 data centers with 250,000 Nvidia gpus as an example when Elon built the largest fastest uh data center Colossus
00:54:15
that was 100,000 so this is you know really really a big company they're going to do an IPO analysts are
00:54:21
estimating they're going to raise at least 3.5 billion at over $30 billion doar their secondary was 23 billion in
00:54:29
November of 2024 so this is cooking with oil they've got incredible Revenue by the way 1.9 billion in 2024 but if you
00:54:37
look at two years ago how much revenue they have the growth is amazing Nick put a chart in here and post because uh it's
00:54:43
like a 10x I think each year or something crazy like that when I talked about it on the other pod but they're
00:54:48
very unprofitable almost a billion dollars in loss in 2024 and that's interest payments on a
00:54:55
lot of their debt almost 8 billion in debt huge debt load to buy all these gpus and that has been the question
00:55:01
we've been talking about here trth is are these gpus are these neoc clouds fancy way of saying I'll give you couple
00:55:10
factoids about cor which I find super impressive so the first question is like you would say why didn't
00:55:15
AWS gcp and azour eat these guys for breakfast lunch and dinner and as it turns out they had one very specific
00:55:25
technical decision that I think was extremely valuable which is that these guys did not use hypervisors explain
00:55:31
what that is so a hypervisor is basically a middle Weare layer of software that allows you to
00:55:36
abstract units of compute so that then you can make them available and instead they basically allowed you to write to
00:55:43
the bare metal and this very native approach that allowed them to get a lot of traction so it's a really interesting
00:55:49
thing to note that just that simple thing like one simple technical design decision can allow you to build what
00:55:57
looks like at least from the revenue perspective an incredible business right so kudos to them super awesome to see
00:56:04
that you can still maneuver around the big giants I think that that's cool I think the big question with cor weave is
00:56:11
what is the period of amortization and the useful life of these gpus from Nvidia and I think that that question is
00:56:18
up in the air as you said Jason a lot of their losses are these interest payments and as long as that they have
00:56:26
that calculated right in their models that they Ed to borrow all this money to buy all these gpus from Nvidia this is
00:56:33
going to be a Killer Business to the extent that they got that calculation wrong meaning we thought the useful life
00:56:40
was 10 years but it turned out to be five this business is deeply underwater so I think that that's the bet the bet
00:56:47
is they've built an amount of Headway they're going to continue to do this good technical engineering
00:56:56
but the other side of it is is the useful life right is the technology curve right is Moore's law and all these
00:57:01
other things will they work in its favor or against it and I think that's Jo people say useful lifespan gpus three to
00:57:09
five years before the next generation is so much more powerful especially in relation to power consumption that it's
00:57:17
worth running it now with servers old CPUs for running Facebook it's a totally different story you can keep those
00:57:23
running five to seven years before it's not running them you have to turn them off what do you think here bus you're
00:57:29
right there's an economic question on the power and all these things I actually know Brandon he lives nearby me
00:57:32
in my house in Montana he's a really smart guy and I think the really interesting thing you know when they
00:57:36
built this that I think is relevant going forward is these guys were Commodities Traders and they were
00:57:40
originally buying stuff to like mine Bitcoin other stuff like that and they realized as Commodities Traders there's
00:57:46
like a certain supply and demand in the market of GPU chips but also of all the data centers by the way and it's really
00:57:52
it's really interesting what they did is they locked down the full supply of tons
00:57:56
of data centers tons of the power they needed tons of the chips and they're very very thoughtful I mean they're
00:58:00
effectively they're Traders and they're and they're very economic and they have I think they have bottled this stuff
00:58:05
well that explains the technical decision because they have to have very low latency throughput in order to
00:58:10
transact efficiently as Commodities Traders I'm guessing there is one heel here for this company Friedberg they had
00:58:17
massive Revenue growth but they have a dependency 60% of the revenue now from Microsoft and Microsoft seems to have
00:58:25
done this either it's unclear but maybe to service the open AI deal where they needed to give them a bunch of
00:58:31
infrastructure or it might be for Azure it's unclear people have been asking this question for a couple of years now
00:58:37
but what do you think of a business with one client with 60% dependency and this
00:58:42
is how these things work Jason is they just one client tends to grow really really fast and they they're actually
00:58:46
you know so they do this orchestration framework called sunk I know a little bit about it this like really easy for
00:58:51
scheduling workflows and batches and all these things that I think a lot of other
00:58:54
people are using really well they've just bought weights and biases right which like everyone uses basically
00:59:00
that's a great buyes they're killer for training I mean I think these guys crushing training saell said that
00:59:06
Microsoft was doing this maybe not for a long-term usage so freeberg your thoughts on Cor
00:59:12
weave I'm not as deep as you guys are I remember in 2003 I worked for nine months at a
00:59:19
private Equity Firm and I would cold call like companies that hadn't raised Venture Capital that were profitable and
00:59:26
growing and see if they would take our money that's the business model and I spent a lot of time in the sector of
00:59:32
businesses that were called speed doublers I don't know if you guys remember these companies 2003 was before
00:59:38
we all had broadband internet so we were a lot of people were using dialup and you could pay $9.99 a month for a speed
00:59:43
doubler and what it would do is it would basically on your browser set the server
00:59:48
to be their server and they had a cache of many of the popular sites on the internet so when you started browsing
00:59:54
the internet on your computer everything loaded faster because they had really fast servers and you got these cashes
01:00:00
and these companies dude they were doing like tens of millions of Revenue high margin 50% plus ebit margin and growing
01:00:07
like 100% plus a year and I remember we we spent a bunch of time looking at these companies this is right before I
01:00:13
joined Google and I was like this feels like a transitory business it's like an Arbitrage between where we were and
01:00:20
where we're going and that's what ended up happening many of them just cash flowed out the founders took money they
01:00:26
were able to get a really smart private Equity recap done get some money out and
01:00:29
run at some low multiple of EA or something and so I worry a little bit about a business like this where there's
01:00:36
four or five companies that are each doing 80 billion dollar of capex this year to create infrastructure that
01:00:43
effectively starts to replace what these guys are effectively offering out as a service that would be my biggest kind if
01:00:49
I was to do diligence on this business that's where I would spend a lot of my time is like guys what's the capacity
01:00:54
going to be in a year two sort like when Broadband hit the internet you didn't need speed doublers anymore do you
01:00:59
really need to be paying as much as you are today is there going to be as much demand how much is this going to get
01:01:03
bundled in with gcp or AWS and so on in the future so that would be my kind of macro hesitation and caution on the
01:01:10
diligence as I ran my diligence on this thing you basically need an economist to
01:01:14
map this all out it's the same question for data centers in a related way right which you just need to map everything
01:01:18
and I I don't have those D those numbers so you're right it's a hard thing to figure out that's right that's right
01:01:23
well the founders have control of the company I they sold few they sold a lot maybe it's 150
01:01:29
each or yeah but but they've kept most of their position they're smart guys so let's see yeah they still own the
01:01:34
majority I don't know so I don't want to speak negatively about the business and
01:01:37
I haven't spent much time on it but I mean I think that the worst that can happen if you speak negatively about
01:01:42
somebody's business you know you tell us you us Prof for years you tell us no idea what is it like to be on somebody's
01:01:51
list for a decade I don't know I mean the ratings keep going up for this week and startups all in so I'll I'll take it
01:01:58
shout out are you purposefully starting to dress up Jal by the way because I notice every week now you're wearing a
01:02:03
butt I had a speak I had a speaking gig but my friends at Eton reached out to me so I might be
01:02:10
trying to do a little gri right now are you plugging right now Laura Piana hasn't reached out but Eton shirts which
01:02:15
I'm wearing right now e n you know the famous uh shirt people are they've been reaching out and I also no no no no I
01:02:22
got but I'm also saying Tom for's people reached out and said you know that pelvin you can take that off if you want
01:02:27
we'll have somebody come over so I just want to shout out my friends over there I have noal deal out the Kon k i t o n
01:02:33
jackets I've been wearing k i o jackets on Earth I wear them all the time I love those jackets just saying
01:02:41
let's move on way yes and Joe lale's outfits are done by the Wagers the weers in China he gets them specifically made
01:02:48
for $17 each recently I was recently sponsored by a company this this service is incredible what they do is when
01:02:55
you're flying they they meet you at the FBO and they take your watch and they they set
01:03:02
the new time for you so especially if it's a mechanical watch is a very complicated oh this is very important
01:03:07
right I you know what I was fly you got to be kidding me that this exists and I had my watch collection and
01:03:14
they did this for me when I was flying between Montenegro and maltas absolutely just trolling I'm just trolling this is
01:03:21
like for spy villains telling you how to look at the world we should get rid of income tax I'm sure everybody listening
01:03:26
like hm really convenient no income tax for the billionaires and sent to millionaires good job guys all right
01:03:32
let's keep going down the all right jamat you know we've been going back and forth in the group chat
01:03:38
and you've been talking about it publicly maybe Main Street versus Wall Street and what's going on in the
01:03:44
markets here because there's EU uh Bond issues we obviously uh it seems like in some ways maybe the Trump campaign is
01:03:53
not thinking about the stock market as much as are thinking about the bond market explain to us your take on
01:03:59
markets right now yeah I think that there's three markets that are important there's the
01:04:04
US long end of the curve so this is the 10year bond yield I think then there's the US Equity market and then the most
01:04:13
next important Market are the European Bond and Equity markets together and I'll explain why in a
01:04:19
second but just on the first view I I mentioned this before but I really do think we're in a secular shift
01:04:26
where I think the Maga majority and the base of people that can be a reliable voting Block in the future
01:04:35
as I've said before are working in Middle Class folks that don't necessarily own a ton of stocks nor do
01:04:43
they own homes of which there's a lot second cohort are people that are pro-innovation and Protek and the third
01:04:51
are patriotic business owners I think that cohort is very large and I think that
01:04:59
when the core strategist inside of Maga figure this out one of the big takeaways
01:05:05
is that they're not going to care about the stock market in Wall Street and a lot of the policies will be viewed
01:05:12
through the lens of Main Street and I think that you started to see this rhetoric now one from bessent and we'll
01:05:20
play this clip in a second and the second was just today from Trump himself but Nick do you want to play the best
01:05:25
clip if you have it I think o over the the medium term which is what we're focused on it's a focus on Main Street
01:05:33
wall Street's done Great Wall Street can continue to do fine uh but we have a focus on small business and the
01:05:41
consumers so we are going to rebalance the economy we're going to bring manufacturing jobs home that was the
01:05:48
first one the second one was just today Nick I sent it to you do you want to just show it to these guys which I think
01:05:52
is really interesting so it says here breaking news from I guess on usual well else Trump has just said he's not
01:05:58
looking at the stock market okay so not sure I believe that but okay so why is this actually valuable well if we are
01:06:06
incentivized if the government of America is incentivized to implement policies that crack the equity markets
01:06:14
it's actually really good in some ways number one is if you deflate asset prices you also deflate
01:06:21
inflation okay and give an example there for the audience so we make it clear Nvidia is ripping at all-time highs you
01:06:29
are like oh wow I'm so cashr you can go get a margin loan you take that money you reinvest it in a second home and a
01:06:35
third home you sell some stock you start to buy cars all this other stuff it drives consumptive behavior that on the
01:06:42
margin isn't there if the markets were much much lower than this so if you rebase the
01:06:49
equity values that people have what you do is you actually depress the amount of
01:06:55
free cash flow that they have to spend on other things so it's a deflationary tactic how the bond market reacts to
01:07:02
that is if the stock market goes down is you start to become a flight to Quality
01:07:06
right oh my gosh there's volatility in the stock market oh my gosh I don't want to deal with the stock market going down
01:07:12
let me just sell take some chips off the table and buy 10e bonds when you buy the
01:07:17
bonds the interest rate goes down why is that good for America we have1 trillion
01:07:22
dollar we need to go out and borrow in the next 9 months and so if we can pay 3% 3.8%
01:07:29
4% we save us ourselves trillions of dollars versus if we had to pay four and a half five five and a half% so that's
01:07:37
the second thing and then the third thing is that right now what we had this week because
01:07:43
of the Ukraine and zalinsky thing is basically Trump say we are totally risk off this war and I'm not going to debate
01:07:50
whether that's right or wrong but that's what he said we're going to curil the aid we're not even going to share
01:07:56
intelligence they're on their own what did that Force what happened this week was the Europeans had to basically
01:08:03
circle the wagons and they said okay we're going to step up and what they announced was a four-year plan to borrow
01:08:11
money to invest in defense what they also did which was really interesting is the UK
01:08:17
specifically said we're going to borrow it in this clever little way this is their interpretation so that it doesn't
01:08:23
actually count in the debt to GDP calculations of my country so they're start they're
01:08:28
starting but then so then how did the bond market react to it Nick you can show it they're like you know what guys
01:08:34
if you want to fight this war obviously you're allowed to do whatever you want but the cost that you're going to have
01:08:39
to pay is going to go up this has been going up every day and you're at a point now where this is severe fiscal pressure
01:08:51
on these governments I do not know how they sustain their deficits and raise more debt so all of this is happening
01:08:59
all at the same time I think Trump is pro Main Street Equity markets basically do not get bid the bond markets respond
01:09:06
positively yields go down good for America they extract themselves from spending programs like again it's more
01:09:15
than a spending program but I'll just say it in this context narrowly Russia Ukraine is a spending program that that
01:09:20
if you take off the table that balance of responsibility goes to Europe and then the markets are saying this is not
01:09:27
right we want this war to end and we're going to make it more expensive for you to litigate it if you put it all
01:09:32
together it's a really interesting moment in the markets I haven't seen in a very long time Joe do you think this
01:09:38
is the refinancing of our debt is the end game here there's like maybe 10% of people who seem to have fallen in that
01:09:46
camp when I queried on these four group chats hey you know if we can depress everything we lower consumption we break
01:09:53
inflation even more maybe people lose their jobs you know less consumption and rates go down we have to
01:10:00
cut rates three or four times put pressure on the FED then we can maybe refinance our debt which is coming up
01:10:08
some percentage of it what do you think of that theory you know Jason jamaat has
01:10:12
a lot of interesting thoughts here and I think it's I think it's a very smart analysis I'm not fully aligned it is
01:10:16
true Bond markets hate war war is expensive or is inflationary it's very clear Europe is going through okay you
01:10:23
know war is more likely for us to spend money that and that hurts them you know in the US I think the number one thing
01:10:28
that Scott Besson and Trump would want around this is is to fight for Main Street like they said that that really
01:10:34
is you know the kind of populace energy we have right now and so I think they are focused on lower interest rates
01:10:38
lower interest rates you know I have some someone who works with me uh their spouse you know as a real estate agent
01:10:43
and that they're having a really tough couple years because indust R spiked up if you get IND rates down again there's
01:10:47
so many different places in America where people start making money again with with the title companies with the
01:10:51
Brokers with there's so many things that happen right with that trickle down yeah
01:10:55
it's it's well it's not just trickle down it's like this is the part of the economy that that just really does start
01:11:00
to turn on and certain transactions can happen again and and you're right it it is cheaper debt that is that is
01:11:04
Advantage as well so I think disinflation is very important and I think we have to find some way to get
01:11:08
there chth may be right that it's worth hitting assets to get to this inflation that's something that the Scott could be
01:11:13
working on because of all the debt but it is it is true the easiest it's the easiest it's the easiest and we do and
01:11:19
we do need it for sure so and I hopefully I think there's some other more clever ways to get there but but
01:11:23
but I do like that you said there's some more clever ways to get there obviously
01:11:27
we don't want to see 8 n 10% unemployment that's another way to get there and we don't want that because you
01:11:33
know Main Street equals jobs so what do what is your other ways to get there well the other ways to get there is
01:11:40
there's two there's really two right now in our society that are very positive one of them is a higher productivity
01:11:46
through AI I'm working on a ton of things as are sure everyone else doing that like we're doing construction for
01:11:50
much cheaper right now government can't do that though right government can't be
01:11:53
involved in that that's up to us not to SC I mean David's doing good work we can
01:11:56
make sure not to screw it up there's a lot of people trying to screw it up so I think David's job is very important
01:12:00
there to get Sam's not here please we and then the and then the second thing is actually cutting spend like just
01:12:07
giving out hundreds of billions willy-nilly to Stacy Abrams at all is very inflationary and so so so I think I
01:12:13
think cutting spend actually is a very positive thing we could do a lot more of that freeberg you heard the two
01:12:18
gentlemen what are your thoughts on the refinancing of Interest as I've done before I'm going to give you incredible
01:12:25
leadership credit for 3 years ago on this pod pushing all of us to really think about what would happen if the
01:12:31
debt increased another 8 trillion which it did and I think that influenced a lot
01:12:36
of people in our circles and obviously that's something that the president took on when none of us thought he would any
01:12:43
president would ever take on that issue how much pain do you think Trump is willing to take with the stock market
01:12:50
going down in order to refin the debt the debt is he willing to be incredibly unpopular is he willing to deal with the
01:12:57
criticism from Wall Street and from Equity holders over some sustained period and how much would he be if it
01:13:03
goes down the market goes down 10 20% do you think he's going to cry uncle or you
01:13:08
think he's willing to take that kind of pain freeberg like I said I I don't know
01:13:11
about Trump there's a you know I would say 6040 I'd be right 40% I'd be wrong so I I don't know people are here for
01:13:18
that that's actually a pretty good ratio in poker if you can win that many hint yeah I mean I'd say 60% he's probably
01:13:23
different than Trump 1.0 and he's probably less influenced by the short-term Rumblings about the market
01:13:31
okay and he's probably listening to bessent on this one although you know I I I think it's it's
01:13:39
got to be a complicated relationship between the two of them at the moment I I do think that he is aware and I would
01:13:46
imagine the administration generally with bessent and others in in um kind of key leadership positions are trying to
01:13:53
make the case that if we can get rates down we have an opportunity to kind of refinance this1 trillion that's coming
01:14:02
due in the next 12 months and get ourselves into a kind of more sustainable financing position there's
01:14:09
still the fiscal position which is how are we spending money and how are we spending money over time that needs to
01:14:14
be addressed this is this is the central question you're totally right let's address that specifically with Ukraine
01:14:21
you're a bit of uh a hawk an American except jist Joe and um we are looking at a situation where
01:14:30
we spent 175 billion there were some other numbers that Trump was floating around
01:14:35
that were Incorrect and they got fact checked 175 billion is what we're actually in for
01:14:41
according to all accounts this was done as I said many times on this very program and got laughed at and joked
01:14:47
about done on a lease loan Trump because these things were done on a lease loan now has the upper hand with zinsky and
01:14:55
he's a great negotiator and he said we want 500 billion back don't need to make this about dollars and cents here
01:15:02
because obviously this is life and death and people's democracy we're talking about their sovereignty but that 175
01:15:09
billion if he gets that 500 billion back that's a 42% irr in three years on this
01:15:15
even if we just got our money back that would be fine for the American people how do you look at the war in Ukraine
01:15:20
both financially and in terms of containing Putin and finally in terms of our participation in
01:15:28
NATO is it time for us to leave NATO Joe lale wow well you know Jason Putin's a bad guy that's number one he's shouldn't
01:15:35
have inv thank you for saying that it's refreshing to hear it on this podcast you know I I do think the last
01:15:39
Administration mismanaged it I don't think he would have invaded with Trump as president he certainly would have
01:15:44
invaded with competent person threaten him so but you know but now we have to have peace and I do want peace I don't
01:15:49
want to have the war continuing but to get peace you got to get both sides to come to the table I prefer peace through
01:15:54
strength prefer being really strong on Putin and showing why he has to have peace but then you need zilinski to be a
01:15:59
partner for it too and I do think listen I do think zilinski had the wrong idea on the White House last week he should
01:16:04
have been thanking them he should have come more humbly he should have actually been directed towards really wanting
01:16:09
peace and listen I I I agree that Ukraine's a very corrupt country we may find out that he and his cronies have
01:16:14
been taking a bunch of money I don't know if they are or not either way he has not really been signaling the right
01:16:19
way to be open to peace and a piece that does I think have to give up a little bit of Ukraine in order to get there I
01:16:23
think that's the option on the table right now and that's the direction I want about the NATO question what's the
01:16:28
you know and thank you for being so candid here what's the the NATO outcome here is it time for maybe Europe to just
01:16:37
go it alone because they don't seem to like what happened last Friday at the White House they yeah and and maybe do
01:16:43
you think it's time maybe that we we bow out and let them arm up this is really tough for me because some of the people
01:16:49
I care about most in the world uh live in places like Germany and and around there and I want them to be safe I also
01:16:55
think that the historic relationship between the UK and the US is this very very valuable thing that we have they
01:17:00
shouldn't just be tossed aside these are these are critical very longtime allies
01:17:03
and cousins you know I think Europe's in a very very bad place it's very dysfunctional man it's it's it's I do
01:17:09
not see European civilization going the right way the next 20 or 30 years I think JD's right to criticize them on on
01:17:15
anti-free speech on like you know arresting people who criticize the Islamic threat like more than the people
01:17:20
actually doing the rapes and stuff it's crazy these places have lost their minds
01:17:23
you know it's bonkers so yeah do do I want to to totally give it up no but do I want to demand fiercely that the
01:17:30
certain things get fixed and to use our foreign policy apparatus to make sure we
01:17:34
fix those things if we're going to stay in the relationship 100% what do you think chamat this NATO question seems
01:17:40
like Europe is kind of signaling that they're willing to go at alone and should the United States just say okay
01:17:47
go for it we're we're out because that's literally what sax retweeted recently just said hey we're out it's your
01:17:52
problem um and I think the administration has given him free reign to to discuss the topic he T discussed
01:17:57
it here for many years what are your thoughts should we be out on NATO well I think the question is when do these
01:18:04
transnational organizations outlive their utility that's the question on the table and it's not just a question for
01:18:11
NATO but it's a question for a bunch of these other things the who NATO the United Nations there's many
01:18:18
of these organizations what you've seen is that there are competitive organizations now that are
01:18:27
just as important if not more so if you didn't like OPEC well then there was this OPEC Plus+ thing if you didn't like
01:18:36
how the Europeans and the Americans did intelligence gathering then all of a sudden five eyes came out of nowhere if
01:18:43
you didn't like the G7 there's the bricks right so there's this tendency for the world to create these startups
01:18:53
to try to challenge incumbent as the conditions on the ground change I think the most important thing right now
01:19:00
the Europeans need to do is acknowledge this one critical fact the individual governments of Europe are vibrant and
01:19:07
Powerful the European Union itself was created almost without any real teeth and so what happened is the folks there
01:19:16
started to pass inordinate numbers of laws yeah and that has made it really complicated to be a European company a
01:19:22
European Citizen and that has to get sorted out what is the real decision there is it about being Italian is it
01:19:29
about being European what is the separation and I don't think that that's clear and I think once they figure that
01:19:35
out all this other stuff is much easier to figure out well you also have yeah other organizations interpo right we
01:19:41
have that you have the UN I mean it is maybe time to just reerrr BG what do you think I think that
01:19:50
there is a viable case for a peaceful trans I to kind of a multi-polar power Dynamic and if you're a techn
01:20:06
pessimist you're going to have a point of view that there are more limited resources available to humans on Earth
01:20:12
and therefore we have to have influence to access those resources if you're a techno Optimist you will believe that
01:20:20
through Ai and Automation and all these other Technologies that we could spend quite a bit of time around that we are
01:20:28
going to have abundant housing abundant fuel abundant materials and generally an
01:20:34
abundance of everything that one particular group might demand or need and you don't need to go be an Empire to
01:20:42
access the resources that your people are demanding and what I mean is the mining industry
01:20:49
is a good example there was this discovery which I think we put on the docket for the science Corner today of a
01:20:55
giant thorium Reserve in inner Mongolia which can be used to make a thorium molten salt reactor and there's enough
01:21:00
Thorium in this Reserve in China to produce enough energy for 60,000 years of consumption based on current
01:21:08
consumption rates I saw a fantastic presentation this week by a startup that's uh using
01:21:15
Ai and other sensing Technologies to identify new Rare Earth deposits in the crust of the earth that we have
01:21:24
absolutely no visibility into today and many of our assumptions about how much availability there is of certain rare
01:21:31
earth metals is wrong and that there actually may be many many many orders of magnitude more material available to us
01:21:37
to mine and the technology for mining is getting better the technology for discovering these deposits is improving
01:21:42
and so on so in that world where suddenly I can make all the food I want everyone can be fed there's plenty of
01:21:48
land there's plenty of housing there's plenty of water there's automation that and robots that are serving me and all
01:21:53
this sort of amazing that's coming cury do I really need to be having aing conflict with Russia and
01:22:00
China over access to some jungle or some plot of land on the other side of the planet or can I live sustainably on in
01:22:09
my country and everyone's going to be generally happy so I think that this idea that maybe the US exits NATO and
01:22:16
the US dials down its level of conflict and opposition to Russia and or China is
01:22:23
a pretty reasonable and I would argue maybe even a techno optimistic point of view and you know we may find that in
01:22:29
the next couple of years we start to really believe it and if we start to believe it all the things that we're
01:22:35
fighting over today you don't really need to fight over anymore except for the expansionist intentions of
01:22:42
individuals which is a sociological phenomenon which may still continue but I'm not sure that you need to be
01:22:49
investing as much resources as we have historically so I would argue maybe nato in a mult poar world of abundance isn't
01:22:56
as necessary as it has been in the past Century which was a world that was limited in resources fighting for Access
01:23:02
and a growing global population particularly in the developed world in the west that's made it a necessity to
01:23:08
maintain us Primacy and US policing of the world and I know others might have a point of view that's a little bit
01:23:13
different on that but I just think we this is I think actually what you're talking about is a Star Trek beautiful
01:23:19
version of abundance in the world if these Rare Earth minerals create unlimited energy and your energy
01:23:24
independent you look at the world differently and and Joe we certainly in America look at the world differently as
01:23:30
we're all gen xers here basically we look at the world much differently now since we have energy
01:23:35
Independence than we did under Bush and and these uh F Wars you know in the Middle East yeah I mean listen yeah and
01:23:44
I I'm I'm one of the most optimistic people I call myself the American Optimist Jason as you know have
01:23:49
greatone of us have been on yet app of get you on the we live together I mean had sacks on have you had sacks on at
01:23:57
least American Optimist people people are too busy to come on I'll try to get you so for four with best's got it okay
01:24:02
all right I gotta work on it listen I I would love AI to get to the point I think it will where it starts to
01:24:07
accelerate growth where this energy stuff could be mind more easily but until I'd say until we're at at least
01:24:12
five six% growth because we are going to the postcar city world we don't know what it's coming I do still think global
01:24:17
trade really matters I do think Global Security for ourselves like we don't want random people with nuclear
01:24:22
proliferation so there there are issues that are going to affect all of us but I
01:24:26
think Dave makes a really great point that it is becoming less important over time it's true let's talk about this
01:24:31
chat GPT I guess they came out with 4.5 it was such a dud I didn't even realize that they launched it chiman you monitor
01:24:39
this or freeberg did you try it because I've been using grock as my default now then Gemini then chat GPT that's my
01:24:46
order right now because I wanted to see how good grock is and man grock is really caught up and I don't have an
01:24:52
interest here in uh you know I don't have equity in any of these comp well I own Google in the public markets but I
01:24:58
don't own the other two but pretty amazing yeah what what do you think of this 4.5 dud and what what it means
01:25:05
chamal well I use them in in the companyb building context and specifically at 8090 because of what
01:25:12
we're building and what I would tell you is that I think anthropic just continues to do an
01:25:18
incredible job I think Claud 37 is it just kicks ass oh you're you're on Claud for you're
01:25:28
using on the back end yeah we use it for a lot of automated code generation got it and its models on code generation I
01:25:35
think are just exceptional it they're they are the best in market then what I would say is as a
01:25:40
consumer I've mostly flipped my usage to Gro 3 yeah and the reason is that it's in line with where I consume most of my
01:25:48
information it's elegantly integrated inside of X it's point this out to explain it to people when you're
01:25:56
in Twitter now X on the top right hand of a tweet there's an xai button when you click it it just gives you the full
01:26:02
context of the Tweet so I was reading one of dar's from Uber's tweets about autonomy I guess they added two more
01:26:09
Partners when I clicked it it gave me more than I ever could want it was almost like a deep research of the
01:26:14
context of a very short retweet he did and I didn't have to cut and paste and form a question so owning a social
01:26:21
network equals instant and here we're going to show with Joe lonsdale's where he says Hey listen the you know the the
01:26:27
crypto tax feels like taxation to me and look it goes and finds four web pages you can see there it tells you which
01:26:33
ones Wikipedia and um CNBC amongst them and then it gives Joe's position this is
01:26:39
like very elegant this is super elegant and I think there's a small tweak to this okay that Elon and I were talking
01:26:49
about actually onx which is then just the nature of being able to analyze it post for its veracity becomes really
01:26:54
valuable that extra little thing when it's available I think will have a really big impact on how people use it
01:27:00
in this context so I use gr for the consumer applications for all of our code generation we're using Sonet 37
01:27:07
it's exceptional which is anthropics which is doing a major round of funding got it
01:27:12
okay yeah and and I think like the the thing with the GPT 45 is that it's kind of like good now here's here's a tangent
01:27:20
let me just do a small little rant which is we're at the bleeding edge of where these benchmarks are useful meaning part
01:27:29
of why Jason maybe you weren't necessarily watching this as closely and I think where the media and the
01:27:35
sensemaking organizations get confused is they don't know now what to say because they'll say hey look at how I
01:27:41
did on sbench look at how I did on IMO look at how I did on Amy and the problem the Dirty Little
01:27:47
Secret of these model makers is that these guys are so trained on the evals that they're overfitting yeah and all
01:27:55
this overfitting basically makes it pretty unreliable what this means to translate
01:27:59
into plain English for humans listening is they basically are optimizing for the
01:28:04
test that are The Benchmark which is kind of like a person in high school or you know optimizing for the SATs it
01:28:10
doesn't mean they're going to be a great student but it may mean that they just spent a lot of time taking sat tests
01:28:14
yeah so we have we have one problem which is that I think it would be very valuable for the industry that it be
01:28:19
solved which is that we need to have extremely difficult and always changing third party independent verifiable
01:28:27
benchmarks oh that's a great idea like the safety test for cars is that's not run by the companies got it less about
01:28:34
safety though more about capability sure and I think if we're reporting on that then these leaps will mean something
01:28:39
more than what they are today right so got it when Alibaba pushes Gwen this week it was an exceptional model it's
01:28:47
probably one of the better open source if not the best open source model out there deep seeks I think is also quite
01:28:52
good it doesn't get any pressing anymore so I think we're starting to get to this
01:28:56
place where there's such abundance that actually people are just kind of like overwhelmed with all the choice and they
01:29:02
don't know how to differentiate this is like a 100 Michelin star restaurants opening up in your city you just don't
01:29:07
have enough meals to eat it we we're we're basically drowning in abundance to free Berg's point we I don't think we
01:29:14
understand exactly how golden how golden this golden age is in terms distribtion
01:29:19
distribution becomes really important I think that's why absolutely inside valuable but also think Google just that
01:29:26
they're going to drop an button into the front search page I don't know if you guys saw that but no Google's doing it
01:29:32
when you're logged in you will get the snippet at the top inside of YouTube they're doing summaries of the chat and
01:29:39
the comments and then you think about what meta could do you know they already put the AI box up there but you know
01:29:45
they'll they'll knock some of that off Google front door like google.com does anyone use that
01:29:51
anymore well I mean Google searches are still going and Facebook is about to launch a competitor to chat and gr yeah
01:29:58
well they're going to do a straight up a standalone app and the thing that they are so good at is whenever they launch
01:30:04
an app it doesn't matter when they launch it they'll just get it to a billion people yeah I mean that that is
01:30:09
uh super TR all this I think leads to so much abundance what I'm I'm seeing in startups I was the first investor in
01:30:17
a company called superum very elegant software luxury software for email productivity give it a shot
01:30:24
what he did was I didn't mean that's a super plug here but anyway I I'm so in love with
01:30:30
the company and the founder I I just had them on this weekend startups he's like
01:30:33
one of the best product Minds I've ever met extraordinary and superum now because it's gotten so cheap to do AI
01:30:41
that they are composing in this beta I in all of the replies to your email in real time on the back end and you can
01:30:48
see potential drafts they summarize everything even if you never read the summary that would be cost prohibitive
01:30:54
six to 12 months ago but now it's a no-brainer and because they're paid software it's like so this is going to
01:31:00
get very interesting very quick Joe your thoughts on this uh abundance yeah I'm actually building something on email
01:31:06
like you said that let works with your team to automatically kind of like you know create reports on everything that
01:31:11
comes in and rout it for you because a lot of our friends when you're a CEO you basically become a traffic cop it's
01:31:16
actually the email is gonna do it for you it's gonna be that'd be really nice but listen I'm invested in grock 3 and
01:31:20
I'm biased towards Elon but you know a lot of our companies will build on top of multiple of them as well and you I
01:31:26
think you're talking about Coen I'm you know in cognition I a lot of my companies using Devon it's actually just
01:31:31
like crushing it this stuff's getting like 10 15% better every month it's uh it's really amazing and it's good for
01:31:36
companies like that I'm mostly that level where I'm like using all of them or using a bunch of them that so I love
01:31:41
the fact there's all this competition because just makes it cheaper and better for me for all my companies I'm building
01:31:45
and and it's it's not slowing down is the other piece of this no it's getting better it's scary actually I thought it
01:31:50
would I thought it would ASM toote and it hasn't so amazing no that's that's the part that's so fascinating to me and
01:31:56
then there's a really interesting Ripple that I don't know if you guys are aware
01:32:00
of yet but journalists who have been losing their jobs at a tremendous Pace are now being hired by data aggregators
01:32:07
to come in look at queries let's say you had an expertise in agriculture free birg they'll pay you and I actually saw
01:32:13
one of these job descriptions 40 bucks an hour to sit there and answer questions about agriculture look at
01:32:19
answers and refine them and do reinforcement learning we're going to have a new job class which is people who
01:32:25
train AIS and people who fact check AIS and refine AIS and this could be a 50 to
01:32:32
$150,000 a year job because every time you make the AI a little better everybody on the planet gets to benefit
01:32:39
from it this is an extraordinary new job career I don't know what it's going to be called reinforcement learner I don't
01:32:44
know freeberg you get the last take here great job on the abundance angle which just pushed a really great discussion
01:32:51
here wrap us up with your thoughts on these llms and the pace of AI I just agree with chamat I think it's like you
01:32:58
got a lot of great stuff here it's changing every week I'm not paying attention to the details anymore new
01:33:03
models come out every week this is like when the internet launched new websites you know like this is this is carrying
01:33:09
us forward it's impossible to dissect and predict what's going to win when and why right now what are you um obsessed
01:33:17
with in the AI front is there are there things out I use I use chat GPT research
01:33:22
a lot the Deep research Arch right where fires off a bunch of web pages okay and
01:33:26
you're paying that means the 200 bucks a month or you I pay 200 a month yeah I find I find it very good yeah and then
01:33:32
um we build everything at oh Hollow on gcp and we run a bunch of different models that's Google's Cloud for people
01:33:38
who don't know thatr name got it and then we run models they're incredible yeah yeah lots of different tools but
01:33:44
it's awesome hey as we wrap here we're following our Muse here at Allin whatever the besties are most interested
01:33:50
in we are going to bring you the audience along with us so freeberg and I have been obsessed with content creation
01:33:57
and media so we're doing a little media Summit at South by Southwest apologies that it's sold out and then chth you
01:34:05
know he likes this F1 he's a big F1 fan I've never been I'm really excited that we're going to be throwing the best
01:34:11
party at F1 Saturday May 4th I'm cominging the bag you're not there's only room for as long as I get the bag
01:34:20
I'll be outside you know what I'll just go to 11 give me my bag I'll go play a tournament I'll go to 11 and have a
01:34:26
steak and that's it's a it's a it's a club I'll get I'll pop some bottles at 11 while you guys are at F1 you can
01:34:31
Photoshop me in but the fans can come and our community can come allin.com events for all the details and if you
01:34:40
party on Saturday night big party it's gonna be fun we're throwing a big party in Miami around F1 and we're gonna do a
01:34:45
little stage show beforehand because be awesome and we're gonna we're gonna celebrate my birthday because I'm not
01:34:51
going to be able to make it in June can I wear my app Apple watch can somebody loan me a nice watch for F1 I can't show
01:34:56
up with an Apple Watch anybody got a you're not allowed to wear an Apple Watch to F1 okay I'm going to put my
01:35:00
Apple watch in my in my draw never watch I want a watch that cost 25 to 75k what's a good starter watch for J Cal
01:35:09
that's like an appetizer that's what my watch has as a watch your watch is watch
01:35:14
Joe you got you into this watch thing what should I buy for 100 dimes what do you got there you can get a decent PCH
01:35:19
for 100 now it's like they've gone down yeah it's yeah I mean everything's collapsed like shouldn't I be able to
01:35:24
snipe something here it's it's deflation thanks to Trump and AI right you can grab whatever somebody give me a
01:35:31
suggestion for get a good mechanical watch not an automatic a mechanical anybody wants to
01:35:36
sponsor me for watches and get a mention here on the show I will gri the hell out
01:35:41
of that Jason cicis.com for life I just got a text from Swatch and tutor oh Swatch was I used to wear actually in
01:35:49
the 80s I don't know if freeberg definitely had a T of those Casio watches right did you have the Casio
01:35:56
where you would uh do your your C is a great watch that's I'm talking about him with the calculator watch I had that it
01:36:04
was I remember it was $50 it was a really big deal to it $50 and it was worth it you play the game you start and
01:36:10
stop it as fast as you could that was that was exactly remember that I had one on
01:36:15
each I was doubling down I recently bought a G-Shock on Amazon as kind of like a momento to
01:36:24
and my freaking daughter stole the g a free we can all bet on this what calculator do you have on your desk
01:36:32
right now how many how many calculators are on your desk now how many Can You Reach how many casos are within reach
01:36:37
there's only one calculator that matters only one for me yeah okay HP 17b there's
01:36:43
only one what are you talking about I got my T9 still 89 for me oh now you just told
01:36:48
me how how you're younger than me Joe now I know you're like four years younger than me true point of
01:36:54
it was the 8182 transition that was like a big deal yeah you know what I was doing when you
01:36:59
guys were on your calculator I can't even imagine I was in McKinley Park in Bay Ridge getting to second base all
01:37:04
right enough allin.com events did the guy consent absolutely absolutely he's a really hot dude please we we have two
01:37:13
genders folks there's an executive order I read it all right all right my trump grade for the week is c for chaos a for
01:37:22
effort with uh a for effort with those let's try to get back to a b president Trump we'll see you all next time on the
01:37:28
Allin P love you boys thanks Jo thanks guys that's fun byebye all right everybody we're suited up we're suited
01:37:35
up because the Zar The Wolf of the White House is here my brother David Sachs we
01:37:42
were trying to get you on the program you were going to make a drop in to talk about all this great crypto news coming
01:37:46
out of the White House and uh let's face it this was a um some people saying chaotic some people say intense this is
01:37:53
a pretty amazing intense week for the administration so we'll get into a little bit of that but you're here
01:37:59
specifically to talk about the crypto Reserve so welcome back to your program the Allin podcast David sax good to be
01:38:08
back I see that you suited up here yeah I mean I figured for people who uh weren't here for the pre-show I get on
01:38:15
saak is wearing a white shirt and a tie I'm wearing a Blazer and a white shirt so I'm like ah I got to go put a tie on
01:38:21
he's like ah J C wear a blazer I got to go get a blazer so then we came back and
01:38:24
here we are and uh right well look I I just have to correct one thing I think it's been a very smooth week at the
01:38:29
White House the president has lived up to one of his campaign promises this is not something new remember you go all
01:38:36
the way back to his National speech during the campaign and he re reiterated this many times that he wanted to create
01:38:41
a strategic Bitcoin Reserve sometimes he called it a digital asset stockpile what
01:38:45
we've ultimately done here is both he also in his week one EO on crypto you guys remember I came on the show to talk
01:38:52
about that he asked our president's working group on digital asset to evaluate the idea of a reserve or
01:38:58
stockpile and we made a recommendation and this Administration is moving at Tech speed it's really great to work for
01:39:05
an Administration where you can actually get things done and things move quickly
01:39:08
we made our recommendation and then we work with the lawyers to implement it and President signed it last night but
01:39:14
this is fully consistent with everything he's he's always said agree on that the
01:39:18
uh I guess the one criticism that you're going to get when you go face the media
01:39:21
so I might want to put it here is the order in which you're doing things sometimes Mr Trump is very uh expressive
01:39:27
on the social medias which is better than let's say the previous administration which just wasn't
01:39:32
available and and incognitive decline so I guess the the the question of he announces something and then you guys
01:39:40
explain it deeper is that the optimal way to do this should we not worry about it should you come out with like more
01:39:46
official stuff I guess that's the move fast break things that we are used to in Silicon Valley but that people you know
01:39:53
know whether it's in business or maybe a little concerned about that things are maybe different now in the White House
01:40:01
and and in how we're running our government maybe you could expand on that have you ever considered that maybe
01:40:05
you just had an overreaction to a tweet well okay so if we're going to place the
01:40:09
blame on me I wasn't the only one the original crypto ogs were like wait a second why
01:40:15
is he picking these three and not these three you know so that made a lot of people putting myself out of it like
01:40:21
whoa what's going on here is he picking favorites and that's I guess everybody's
01:40:25
big concern so maybe you could a sage we're not yeah we're not picking favorites obviously except I will say
01:40:30
this we do think Bitcoin is special and I can get it to to the reasons why expl why that's a great thing yeah well I
01:40:36
mean bitcoin's the original cryptocurrency it's the first one it's the only one that doesn't have an issuer
01:40:42
right it's it's very decentralized it's you know in crypto they call this the Immaculate Conception we don't really
01:40:46
know how it got here we don't know who Satoshi is it's almost mystical you would say yes it's the most valuable it
01:40:53
has a $2 trillion market cap and it's the most secure it's ever been hacked right so we're now you know over 15
01:40:58
years into this journey and there's been a lot of people who've been skeptical along the way and there's been a lot of
01:41:02
ups and downs but here it is I mean I remember back in 2011 I think it's the first time I bought a Bitcoin I think it
01:41:09
was at $120 now it's at $90,000 again there have been all sorts of wild swings along the way but this
01:41:18
thing just keeps keeps chugging along and you can think of that $2 trillion Market market cap is like a $2 trillion
01:41:25
bug Bounty if there was a way to hack this there's every incentive in the world and by hack I mean like to double
01:41:31
spend create basically a counterfeit Bitcoin I guess would be the way for people to think about it and so the
01:41:36
miracle it hasn't been compromised I think we can all say that well I don't know if it's a miracle I think it's
01:41:41
exceptional design sure you know and so I think I think what you could say is that it's been tested in a very robust
01:41:47
way and there's been every incentive to basically break the encryption and it continues to chug along and so I think
01:41:53
think the price has gone up as the protocol has gotten more acceptance and this is another point is that bitcoin's
01:41:59
most widely accepted as a store of value throughout the world yeah so we do believe it should be treated special now
01:42:06
that being said we're also creating the digital asset stockpile so all the other
01:42:10
explain the difference between these two so there's a digital asset stockpile that's the Picker and then on the other
01:42:17
side there's a strategic reserve for Bitcoin because we do acquire Bitcoin we the United States of America when we
01:42:24
seize from terrorists you know criminals Etc we do seize these and then we often
01:42:29
make the mistake of liquidating them when maybe we should be holding them yeah so explain that architecture so we
01:42:34
have the reserve and we have the stockpile so the reserve is just Bitcoin the goal is long-term preservation think
01:42:39
of it as like a digital Fort Knox for digital gold we want to put the digital gold in there we want to keep it secure
01:42:45
we never want to sell it that's the goal of the reserve and you're right that we've made the mistake in the past of
01:42:50
selling this stuff at one point in time we had about 400,000 Bitcoin on the federal balance sheet we sold roughly
01:42:55
half of that for something like $360 million total if we had held all of that it would be worth just that the portion
01:43:02
we sold would be worth over 17 billion so we made this mistake of prematurely selling Bitcoin when we should have held
01:43:08
it we don't want to make that mistake with regard to the rest of it we think there's around 200,000 coins left on the
01:43:16
federal balance sheet but the truth is that nobody knows because we've never done a proper audit so part of what this
01:43:21
executive order provides is that we're going to going to do for the first time a government wide accounting of the
01:43:27
digital assets that we actually have so and if digital assets emerge in some Department I don't know the FBI sees a
01:43:33
some the CIA sees a some I don't know which organization winds up having them they're going to be legally required to
01:43:40
report that and then put in the reserve well they'll they'll be legally required
01:43:45
to report it and then they'll go in the reserve if there's a final adjudication so you know obviously if those coins
01:43:50
could go back as restitution to victims or if the person who they were seized from wins their court case and gets them
01:43:58
back they're not going to go into the Federal Reserve but if there's been a final adjudication and a final
01:44:03
forfeiture yes those will go into the reserve anyway that's Bitcoin okay so then you got the stockpile let me just
01:44:09
talk about that so first of all like I said we don't know exactly what digital assets the federal government has I've
01:44:15
seen reports that it might have for example 50,000 eth which is ethereum but again we need to get to the bottom of
01:44:22
that we figure out exactly what the assets are we're going to move them into the digital stockpile the purpose of the
01:44:28
stockpile is responsible stewardship it's a place for safekeeping it's a centralized you could say account under
01:44:36
the direction of the Secretary of the Treasury and the Secretary of the Treasury will figure out how to maximize
01:44:41
the values of these Holdings now there's a couple of important differences between stockpile and Reserve so one is
01:44:47
the reserve the executive order actually provides that the Secretary of the Treasury will not sell the Bitcoin okay
01:44:54
we're we're prohibited from selling the Bitcoin there's no such prohibition with
01:44:59
respect to the stock pilot if the secet treasury decides that's in the long-term
01:45:03
interest of the US to rebalance the portfolio or change the portfolio the secretary has the discretion to do that
01:45:08
okay which makes sense because there's a longtail of crypto we might see something that we don't have the ability
01:45:13
to predict the predict the future and we don't have the staff to sit there and look at these assets every day like a
01:45:19
fund manager would and say huh what do we do with these what percentage should it be of the overall stock pot of the
01:45:23
overall Holdings so maybe the decision with ethereum is hey this thing's waning we just put it into Bitcoin because we
01:45:29
know that's the more solid one yeah that's what I'm reading into it yeah I mean I think that that's that's largely
01:45:33
fair I mean look I think that the stockpile should be subject to good portfolio management right unfortunately
01:45:40
we have a Secretary of the Treasury who is an extremely successful former hedge fund manager so he's going to figure out
01:45:46
the best way to manage these assets and we give him the flexibility to do portfolio management whereas live and
01:45:52
die with what he does he has to make those decisions and and that's going to be you know um part of how he's
01:45:57
evaluated by the president so hopefully he's going to be sharp about that right but the reserve is different right the
01:46:02
reserve is just digital for KNX now there's one other important difference between stockpile and Reserve so with
01:46:08
respect to to reserve the the EO provides that the secretaries and I'm talking about Treasury and commerce
01:46:14
they're allowed to figure out strategies to accumulate more Bitcoin for the reserve if those strategies are budget
01:46:20
neutral and don't cost the taxpayer anything okay so it's possible that we could I'm not saying that we will but it
01:46:27
gives them it authorizes them to acquire more Bitcoin if they can figure out a way to do it that doesn't impact the
01:46:35
federal budget or the deficit or taxpayers right okay well I had a very simple suggestion for this which I'll uh
01:46:42
float up the flag poll here and see what you think you probably we've talked about it on previous allins before you
01:46:47
on it how about a simple crypto tax you know crypto wants to be legal you're the
01:46:51
crypto are crypto wants to be regulated they want the rules they want the rails simple
01:46:58
suggestion from your bestie why don't we charge every transaction in the United States 0.01% just about one bit in that
01:47:05
native currency so you want to trade some salana for ethereum for xrp whatever you know put in whatever names
01:47:10
you want there the government says hey you want to have a a great vibrant system here we're going to need to take
01:47:17
just the most modest of taxes di Minimus in fact in the native crypto and put it
01:47:23
in the stockpile this seems to me like a very that's always how tax's start is that they're very they're described as
01:47:29
being very modest you know when the income tax started it only applied to like a thousand Americans and the
01:47:34
legislators swore up and down that it would never be applied to middle class people so I don't particularly like the
01:47:40
idea of new taxes even if it's it's promised that they just won't affect people very much that sounds burdensome
01:47:46
to me but look we have very successful this would and just so you know this is would be like more like a sales tax that
01:47:51
would be handled by coinbase base would be handled by Robin Hood by would be handled by those platforms they would
01:47:56
administer it it would be a transactional tax not an income tax so if you have a bunch it's not a wealth
01:48:01
tax it's not a seasoning tax but I'll let you on it if you can convince if you can convince the secretary of the
01:48:07
Commerce or the Secretary of Treasury to run with your idea then it could potentially happen I mean they have the
01:48:13
flexibility to figure out budget neutral ways to accumulate Bitcoin I don't know
01:48:17
what those ways are going to be but they're creative they're very successful businessmen and if they figure out a way
01:48:22
to do this then it can be considered that's the point okay well I'll be in the commissary later having lunch with
01:48:27
you you can introduce me um so let you let me just give you a fastball here well we'll see if it if it gets in the
01:48:32
strike zone the appearance of impropriety is what people are concerned with the picking of winners and
01:48:39
losers president Trump was the crypto president he went and he gave that famous speech I'm G to get rid of Gary
01:48:45
gansler we're going to make it legal and to his credit he has fulfilled that promise which means hey the donor class
01:48:52
on that side said we're going to back the crypto president not the anti- crypto team which means a lot of people
01:48:58
who are on the Twitter and the socials have donated a lot they have a lot of holding so this appearance which
01:49:05
you've now I would give you credit have cleaned up here hey there's two different things going on here and we're
01:49:10
not using taxpayer money we get all that but the appearance here is hey maybe somebody's going to benefit of course
01:49:16
that they came after you first for that without the facts you were very clear you cleared all your positions you sold
01:49:22
everything you divested so let's make that clear to the dumb Dums who are just trying to say that you're personally
01:49:28
address that yeah please cuz this is ridiculous yeah well people came out right away and were saying that somehow
01:49:33
I was engaged in a scheme to pump my bags or to basically create exit liquidity for myself and and billionaire
01:49:40
stuff like that you have to understand that those accusations I mean they're accusing me of a crime and serious crime
01:49:46
and they're doing it with no evidence whatsoever so these things are basically it's moral slander slander
01:49:53
yeah I would say so in any event what they didn't know and what I then proceeded to put out there is that I
01:49:58
sold all my cryptocurrency prior to day one of the administration because I didn't want to even have the appearance
01:50:05
of a conflict and by the way I could have waited I didn't have to do it like that but I decided to do it and take it
01:50:11
upon myself to do that because you just know that when it comes to crypto there's going to be a lot of
01:50:16
fluctuations in the market you never want someone to be able to point at one of those fluctuations and say somehow
01:50:21
that the cryptos are benefited from that and created a conspiracy theory which is
01:50:25
exactly what basically happened so first of all I got rid of all my cryptocurrency prior to day one craft
01:50:30
also sold all craft is the Venture firm that you funded that's done a lot of great work uh supporting Founders here
01:50:36
in Valley so we we basically sold I think it was around $200 million of crypto of which around $85 million was
01:50:43
personally attributable to myself and we cleared that before day one paid taxes on it and basically so there wouldn't be
01:50:50
a conflict so then the the smear shifted in another Direction was okay well maybe
01:50:55
he doesn't own crypto okay but he's in crypto funds okay and so they pointed to you know bitwise and multi-coin capital
01:51:03
and I was also in blockchain capital and so then the fund managers came out and one by one all said actually David
01:51:10
called us over two months ago and said he's going to need to divest from our funds and so we also did that so yeah
01:51:16
you know I think basically they've kind of given up on this but look it's very easy for why let the facts get in the
01:51:21
way of a good ER seriously you full disclosure you know you when you saw me doing the sea Scouts program said hey
01:51:28
why don't you do a fund I'll be the anchor I'll be your first LP and I mean one of the most generous things you've
01:51:33
done in our relationship and I had to have a call with you you know weeks ago and say hey
01:51:39
okay you're going to divest okay fine no problem no it's not not a problem for me
01:51:43
you sell the assets to somebody else so the way people understand how this mechanically works when you're in a fund
01:51:48
you have no sax cannot tell me what to do in the fund he just put money in it like I put money in other people's funds
01:51:54
they go and invest and 10 years later you get a return and hopefully that return in a venture firm or private firm
01:51:58
beats the markets public markets or whatever but then you can also sell that interest to somebody else so
01:52:04
mechanically takes time you have to sell it at 50% 25% off and it's painful you will lose I estimate you're going to
01:52:13
lose you know I don't want to be gratuitous here but eight nine figures by serving the country for a couple
01:52:18
years and not only that the great irony of this is the one thing holding back the industry is regulation
01:52:25
overregulation of AI and no clear regulation in crypto you're going to fix the two things that were number one and
01:52:32
two on all of our agendas in Silicon Valley in terms of getting Returns the next four years so the sacrifice you're
01:52:37
making is extraordinary and you're making it a better environment a regulated environment for the rest of us
01:52:43
to do Commerce so I just want to point out that you're losing like double here right well let me let me just underscore
01:52:49
something you said for your service and I don't know how much they're pay how much they paying for this job what do
01:52:53
you get paid like 50 Grand 100 Grand I'm an unpaid consultant to the government really is that actually accurate you get
01:52:58
no money no I don't want I don't want any costing you money no of course it is but it's it's it's an honor to serve and
01:53:04
it's a honor to be asked to serve and in particular it's an honor to serve this President because he really wants to
01:53:10
make the country great again so that's why I'm doing it but yeah look I think it's a it's a lazy and stupid narrative
01:53:16
to say that the reason why someone who's already successful in business goes into
01:53:21
government is to make more money I was making money before this involves a substantial disruption of my business
01:53:28
interest and I have to devest a lot of those business interest and in divesting I have to be either a taxpayer or I have
01:53:34
to take a significant discount and it costs you money so you know it's just a lazy narrative that people create but
01:53:42
it's there's no truth to it and just to underscore a point that that you made a second ago you were one of the funds I
01:53:47
invested from not because you're a crypto fund but because you might have a crypto position we went through I think
01:53:52
the launch funds Holdings and I think there was something crypto related in there we have one or two that pivoted
01:53:58
into crypto yes right so I just didn't want to have any problem there so listen it's this is the nature of the politics
01:54:05
we have people are you know gets very personal you know that better than anybody and so you know that's why
01:54:11
you're here and hopefully we can clean this all up and uh let people know that hey the intent here is good so just to
01:54:18
go back to one other point you said about not picking winners and losers I I think that's a very important comment
01:54:23
that you made that I see as fundamental to my job I mean look I think we do think that Bitcoin is special for the
01:54:28
reasons I said beyond that we do not want to be in the business of picking and choosing winners in in the space and
01:54:35
again if some other digital asset could prove that it's as decentralized and as secure and as widely accepted as a store
01:54:44
of value as Bitcoin then maybe it could be elevated in the same way that Bitcoin
01:54:48
has I mean I'm laying out the criteria for you but look beyond that we don't want to be picking winners and losers in
01:54:54
the space and that's not my job I mean my job is not to to be a regulator or to anoint which ones are good or bad it's
01:55:01
to basically be a policy adviser for Innovation and I'll just tell you the way that I see the you know all the
01:55:07
digital Assets in the space is that what's fundamental is disclosure if you're an issuer of a digital asset you
01:55:13
need to disclose you know all the material facts about what you're doing and those facts have to be accurate you
01:55:19
can't lie my view is that if you if you the issuer lie about something the government should come down on you like
01:55:25
a ton of bricks because that's fraud okay but as long as you do this in an honest way people should be able to
01:55:31
trade these things I understand that you think a lot of them are garbage you might be right you could express that
01:55:37
view in a trade but as long as everyone has been above board in terms of disclosure people should have the right
01:55:43
to trade these things and some are going to make money some are going to lose money it's about the freedom to
01:55:48
basically to trade to hold these assets the government doesn't want to get in the way of that it's just wants to make
01:55:52
sure that the information is out there that it's honest and if people lie in order to profit I'm all in favor of
01:55:59
going after them well and you know we already have a regulated market as an analogy and when you tell a lie and you
01:56:06
sell a share in a company whether it's a private or a public company the SEC has
01:56:10
a term for that it's called Securities fraud and we you know have this new type of device it's very Innovative it could
01:56:17
be an nft it could be a trading card it could be an actual utility token where you burn it in use of a service or it
01:56:23
could be anything it could be whatever the person describes it as but what's important is there's an entity with a
01:56:30
group of people I think you would agree who have said we have ownership of this we're Incorporated here in the United
01:56:36
States not in Panama not in the BVI not in some you know other place where maybe
01:56:41
they're a little faster or looser with regulations you got to be here in the US maybe you have to be insured in some way
01:56:47
maybe there has to be a board like there does in Delaware or in an LLC there has
01:56:51
to be some person where the buck stops and if you lie while committing a transaction or taking money for an asset
01:56:59
it would be Securities fraud and yes people will come down on you like a ton of bricks and if you promote things and
01:57:05
you don't disclose it well we have rules about that as well we saw many celebrities get pinched last time uh for
01:57:12
tweeting about cryptocurrencies and this is the stuff that I think has to stop I
01:57:17
think it should feel more like what we do in Angel Investing the private companies and in public companies so
01:57:22
that's your job when are we going to see you know that framework emerge because here you're only like 40 50 days into
01:57:28
this I think when we see the actual bones of a framework so if I want to do jco and I want to make an Angel
01:57:36
Investing coin or I want to do something fun an nft collection for Allin or something when will we have the actual
01:57:42
rules of the road and that and that's going to be multiple agencies right yeah what you're describing is is known in
01:57:48
Washington or that the the um the area of policy that you're describing is known as Market structure and Market
01:57:54
structure is about providing a clear framework for Market participants it would Define what is the security what's
01:58:00
a commodity what's simply a collectible you know it's property but it's not a security and then what are the rules for
01:58:07
each category that's know as Market structure there is a bill that passed the last Congress in the house but Biden
01:58:13
basically he didn't veto it but he basically he and the Democrats stopped he stopped in the Senate the Democrats
01:58:19
did it was called fit21 and it was authored by french hill who's now the chairman of the house
01:58:26
Financial Services committee so we expect that he will be introducing a new version of his bill probably in the next
01:58:32
few weeks I don't think I'm breaking any news by saying this I think people expect it and that's going to provide
01:58:37
the framework for Market structure and it's going to provide a lot of the definitions that that you're talking
01:58:42
about now I I agree with your sentiment okay but I will say that I might have a different view than you of what is the
01:58:49
security what's not I mean to me collectible are not Securities but if it's a collectible you got to disclaim
01:58:56
that look this has no intrinsic value right that's a collectible think about a baseball card a baseball card is a piece
01:59:02
of cardboard it has no intrinsic value but the value comes from basically other collectors being willing to buy it from
01:59:08
you and you could just say that that's irrational whatever but so look I think as long as people disclaim that this
01:59:15
coin has no intrinsic value they should be able to issue meme coins it's a separate question why people would want
01:59:21
to buy them but look that's very in my view that's very different than someone who goes out as an issuer and says I'm
01:59:28
issuing a token or a coin that has lots of functionality and has lots of value and you'll hear some of these guys even
01:59:35
say that hey our token is more valuable than Bitcoin you should value it more highly well if you're promising that and
01:59:42
you're saying that it's going to have certain functionality you better be telling the truth about it then we start
01:59:46
getting into the how we test and people can go look that up if they if they want
01:59:50
what I will say is there's an educational process that has to come in here which we've gone through as the
01:59:55
United States when people would buy interest in mines people would buy interest in gold claims oil fields and
02:00:00
that's when a lot of these regulations came out in the 20s around accreditation we've spoke about this before it's a pet
02:00:06
peeve of mind but I think there should be an educational framework here and I think there should also be some Nuance
02:00:11
that you could work on specifically with this group of being clear that when you
02:00:16
have a ticker symbol associated with something or you do charts associated with something you know it starts to
02:00:23
smell like a duck it looks like a duck it's quacking like a duck but then in the terms of services say hey this is a
02:00:28
collectible I think there needs to be some ground rules which maybe it says hey these need to be presented in a
02:00:34
certain way at the top level so the Nuance of disclosure is so important when I tweet something if it was an
02:00:41
Advertiser or a sponsor of Allin or this week in startups or any influencer or you did would to do this and you said I
02:00:48
love you know this brand you and I both were well you were an investor in ATM if
02:00:53
we were to tweet about that as investors we don't have to disclose but if we were
02:00:57
paid for that the FTC has rules you have to put this is a paid partnership you cannot confuse consumers and I think
02:01:04
that's where you're going to have to do a little bit of cleanup work and structure as well is the disclosure and
02:01:09
how this appears and then also maybe the educational system so you know if you want to own a firearm if you want to
02:01:17
drive a car if you want to be you know a beautician and listen we can talk about
02:01:21
overregulation you got to take tests man it would just be so much better if consumers could take you know like a 50
02:01:27
question test just to say hey they understand what we're talking about here in in terms of diversification so they
02:01:33
don't yo YOLO their entire mortgage and house into one crypto so what are your thoughts on those two issues disclosures
02:01:40
how it's presented and then accreditation and maybe a path to accreditation sophisticated investor
02:01:45
tells us how I refer to it for all Americans because 90% of people can't participate in private companies your
02:01:51
thoughts well disclosure is the key like I said I mean these projects should have
02:01:55
to disclose certain things I think for example the token cap table should be disclosed who are the who are the
02:02:01
Insiders how much do they have when are they selling you know that's that's information the market should always
02:02:06
know in my opinion easily done with the technology lotted by the crypto Community the blockchain this could just
02:02:12
be on the blockchain this was always the problem we had as Venture capitalists with hey this is a token project who
02:02:17
owns the tokens where are they when can when can I sell when can you sell insiders yes yeah I don't think you have
02:02:23
to disclose everyone who owns a token that could be hard to comply with but I think you should have to dis you should
02:02:28
have to disclose the Insiders and their their sales plans and their lockups and and and I would also say how new tokens
02:02:35
get created I mean if this is a fully centralized token where they can dism more people need to know that because
02:02:41
there's no scarcity right but if there's somehow an enforcement mechanism and there's enforced scarcity then that's a
02:02:48
different story so yeah these things have to be disclosed and by the way I think the market structure bills will do
02:02:54
that there's a version of this in fit 21 last Congress I think it'll be the next
02:02:57
one and moreover the SEC is looking right now at these rules and they're going to create their own Frameworks
02:03:03
they're doing an exent J SEC Chief I I was doing some research on him he's a really Pro actually more Americans being
02:03:11
able to invest in privates private Equity Etc and he's given speeches on it in the past so the person who's been
02:03:16
nominated for the new chair of the SEC his named Paul Atkins and he he has not been confirmed yet the confirmation
02:03:20
hearing still need to happen separately Hester Pur who's a commissioner at the SEC is in charge of
02:03:26
I know Hester I've had her on uh this week in startups a couple times she's great she's excellent she's very well
02:03:31
informed and she's T very sharp taking the lead on all the crypto related stuff so I trust her and I trust the SEC to
02:03:37
produce those detailed Frameworks that you're talking about yeah I think that my role as call it Innovation policy
02:03:44
adviser is just to kind of make sure that we have the big picture right and I'm I'm very confident that the SEC the
02:03:50
cftc and the legis they're going to figure out the balance here sex you got to go really proud of the work here uh
02:03:56
congratulations on cleaning this all up and presenting a really thoughtful plan that we can all ask you hard questions
02:04:03
on appreciate you taking the hard questions here on uh the all podcast um and good luck when you do the rest of
02:04:09
the media circus uh I wonder if I'm going to be the hardest questioner of you I I hope so and uh for people asking
02:04:15
yes I'm wearing a suit because I am now joining the administration big announcement I'm the official podcast
02:04:22
the official moderator of the uh Trump White House I'm just kidding I'm just K people actually believe you all right
02:04:27
man listen I got I got jokes good all right love you brother we'll see you soon cheers all right bye all right
02:04:33
everybody I'm obviously super conflicted sax is my friend of 20 years plus we're
02:04:38
Partners here on the allom podcast and of course I'm rooting for the administration but you know I got that
02:04:45
journalist blood in me I always want to call balls and Strikes I'm going to as you just heard ask hard questions so if
02:04:51
you're wondering where I'm coming from I'm going to ask hard questions to my friends because they're doing important
02:04:58
work for the American people and for the rest of the people on the planet candid
02:05:02
these are important decisions that saak is going to have to make about crypto AI
02:05:06
that elon's making with Doge I'm G to ask hard questions that's the way it's going to be and so I'm really excited
02:05:12
that they're coming on here they're going to take the hard questions for me but they're done in a certain Spirit
02:05:17
which is yes they're my friends but they got important jobs so they do have to ask answer the hard questions for the
02:05:23
American people and I'm also curious and we're all curious where they're coming from so I feel so privileged that
02:05:28
they're they're choosing to come on all in to face those hard questions we'll see you all next time on the all in
02:05:35
podcast let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy
02:05:46
with it love you queen of [Music] besties are my dog taking your driveway oh man myit will meet me we
02:06:06
should all just get a room and just have one big huge orgy cuz they're all useless it's like this like sexual
02:06:11
tension that they just need to release [Music] someh we need to get merch our [Music]
02:06:28
all I'm doing [Music]