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All right, everybody. Welcome back to the number one podcast in the world. We've got the core four here and dare I
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say, >> the king of Adams. >> The king of Adams. Yes. Captain Travis
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Kalanick is here. How you doing, brother? >> I'm pretty good. Pretty good. I'm uh
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sitting here doing the podcast just next door to David. >> Ah, yes. There you go.
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>> Don't reveal our locations. >> Please don't dock. >> I didn't put my address out there, dude.
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>> No, that's true. Don't worry, Mandami did. He's outside your houses right now
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asking them to >> foresee trying to collect 3.9% or so. >> Yeah, he's he they he decided there's
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rich people left in New York. So, he's looking for other is it 3.9% a year. Is it per year or is
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it >> I don't know if the percentage has been released yet, but the speculation I've
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seen is 3.9% but I don't think that's final. >> But yeah, it's a pia ter tax. So, if you
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have a second home Yeah. every year. >> Wow. And by the way, it's for any home
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over 5 million. There's no homes under 5 million in Manhattan. This is not a rich
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person tax. This is within 15 miles of Midtown Manhattan, you're paying an extra tax. Uh I don't
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>> but only but Jal only if it's a pat. So what it means is that the most
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>> second homes. >> Well, yeah, but the most elastic part of the market is what they're targeting for
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this tax. So in other words, people who don't live in New York, who just have it
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as a second or third home, who could buy that property anywhere, >> yeah, >> are now being taxed the most. So what do
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you think that's going to do? It's going to have a massive impact on demand for
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second homes in New York, which will crash the whole market. >> Yes, congratulations, Mummy.
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>> But in a weird way, that'll be good for housing affordability in New York.
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>> Well, that that's sort of the the claim, but I don't think it'll be good for it
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because there'll be no incentive to build more. Yeah, all units matter. Every time you
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add units, people upgrade. And it's not like these are going to be lowincome
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housing. Like penthouse on 57th Street or, you know, in Grammarcy. That's not
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lowincome housing. You'd have to break it into seven units. Makes no sense. But
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by the way, I don't know if you guys saw the video, not to get too serious, but
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he's doxing a certain billionaire who owns a certain place and he's literally
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pointing at his home. >> No, I said that to you, Jason. He's not doxing because everybody's known for
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years that Ken Griffin bought that place. Everybody knows that address. Everybody knows that unit. We all knew
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it. It was marketed widely. I don't think that's really doxing. He doesn't
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live there and everybody knew he owned it. It would be very different if it was a place where somebody was keeping their
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primary residence and you didn't know and they stood in front of the house. That I would agree with you. I think
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this one is a little bit more tenuous. >> Okay, fair enough. But what I will tell
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you is it's a dog whistle. crazy people and this thing's been seen by 30, 40, 50
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million people. Now, >> it's a dog whistle to say that's the next United Healthcare CEO and in the
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week that a fire a Molotov cocktail and a bullet gets shot into Sam Alman's house, it's deadly serious. And if you
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reverse it, I always reverse it. What if a Republican sat outside of Bernie Sanders second or third home and said,
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"We should, this is his piano, this is his summer home. We should add, you know, taxes to And I'm sure you can
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look up Bernie Sanders home pretty easily. So it just before you point at people's homes and say this is the
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villain, be careful folks because then if something does happen to that person like you know what happened to Sam Wman
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this week and you feel however you want about him, but nobody deserves to have their house fire bombed or shot at.
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Period. Full stop. I just think that it's going to kill the demand for, you know, maybe people who
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already have a home in New York like Ken Griffin, they probably are just going to
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suck it up and pay the tax and keep whatever they have. But if you were a person who is thinking about buying a
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pat in New York, there's no way you would do it now. >> Yeah. >> Because you don't know what the tax rate
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is going to be and it's going to keep going up. >> After a decade with interest and
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inflation, you've effectively almost doubled the price of your unit. So, if you're going to buy a $10 million unit,
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you're probably then looking at a $20 million purchase price just to break even after about 10 or 11 years. That's
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crazy. The math doesn't work anymore. >> What is the downstream effect of these
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individuals not coming to New York, going to a Knicks game, going to a restaurant? No, they spend money. They
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spend money in New York. >> They have their birthday party. They do all kinds of things.
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>> I'm not a big fan of the piet culture. I I own one house. I don't like this whole
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multiple houses you flitter flattering everywhere. It ruined London because when when you look at London
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>> where do you vacation Shimoth? Where do you vacation? >> I go to a hotel.
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>> Okay. So my point is this that I think the way that it works is it's not just pedair.
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If you if you own a home that you fully rent out but that is not the primary residence of the person who is renting
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it, it's also a problem. So, this is any even like a like a, you know, you had a
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two-e rental or a oneweek rental or a 30-day rental or even a 5-year rental and it was somebody else's second home,
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the owner still gets gets hit. So, the rental the sort of rentals of like folks who want to come to that city or who
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don't want to own in that city. Uh, but it's a second place. The second place
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thing goes away. So, maybe this is just good for hotels. I think it's good for
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hotels, but if you look at London, it's probably the best example where there
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was a lot of people who used London as a place to store assets. Real estate became the primary way in which they
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would do that. It hollowed out parts of London where it's not as if it was unlivable. It's just that it was
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unlived. >> Nobody was there. You drive around Chelsea, you drive around certain parts
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of London and it was like a ghost town on like a Thursday night or a Friday night. that is an issue is the land
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banking. It's like your bitcoin is hollowing out a neighborhood and and there is something there. But you know
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what the whole uh housing thing is complete cap and utter [ __ ] because if you move to a place like Austin where
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you are in Nevada or Florida, you see what happens when you allow people to build units in Austin three years in a
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row rents and housing prices have gone down while net migration has gone up. But that's been good for Austin, you
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guys would say. Isn't that good? Incredible. >> Yeah. Amazing. >> Austin has like roughly doubles as the
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city over the past decade. And yet the rent for, you know, whatever a one or two bedroom apartments gone down.
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>> That's incredible. >> So, in other words, if you let people build to satisfy the demand, you won't
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have this problem. >> And then who's stopping the building? >> It's Democratic cities. It's nimi
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people. And then in a Republican town, they're actually building units for an
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affordability. So you have one group saying they care about affordability and they're doing nothing about it and
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they're stopping it. And in another place, they're like, "We're just going
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to let you build because it's your right to build because it's your land." That's
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the approach in Texas. It's your land. You have the right to develop it. Go.
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>> By the way, the high end of the market in London has basically turned over and
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collapsed Sachs. to your point, like they introduced the stamp tax, which I think is equivalent to this tax that the
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New York City mayor is proposing. And if you look at London as a guide, the real
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estate market just bid it at the high end. And >> I don't think that's going to be good
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for that city or even the UK as a whole. There's a handful of cities where people
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do what you say, which is kind of park money there. The reason why they do that is because they believe that that city a
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has the rule of law and b is a unique worldass city that's going to keep appreciating. And if you have new
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management that doesn't really believe in the rule of law that basically keeps
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imposing all these arbitrary taxes. That money is going to flee and find other kinds of investments. People aren't
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going to park their money there. That has to be a bad thing for the city. It's
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like, you know, who cares if the top floor of that building where Ken Griffin lives is owned by one guy who isn't
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there that much? It's not going to affect the city that much, but having all these billionaires from all over the
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world decide to park money in that American city has to be good for the US, just like it's good for the UK. And if
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you give that up, then again, the money will just go somewhere else. >> Well, to your point,
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>> the only thing is they're already paying taxes on the property. And because
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they're not there very often, they're not using city services. So they're
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paying taxes on the property. They're not using city services. >> They're profitable to the city. Yeah.
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>> Think about a developer who's underwriting some new project. You know,
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the fact that a whale like Ken Griffin is willing to overpay in the sense of price per foot for that top floor might
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make that whole project pencil. And this is what contributes to the vitality of New York is there's constantly
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development going on. There's constantly cranes. And so you take out that part of
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the market that in effect was price insensitive and was subsidizing all these projects and I think development
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is going to dry up to a large degree. >> Mhm. He's paying he must be paying three
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or four million in taxes every year and getting no services to your point Travis
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good point like all profit for the >> London also did something else which is
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that they essentially crippled what's called non-dom status which is the big
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tax orb if you moving or parking assets in London and to your point Sax what did
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all the rich people do they just redirected themselves to Zurich to Lugano to Milan and they they took
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advantage of more hospitable tax policy in other places now what the people Britain would tell you, I actually met
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with the UK government yesterday. They don't see a meaningfully enough measurable impact yet where they think
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it's a five alarm fire. So the real question is, is it more of a slow bleed and a slow melt and at some point it's
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just hollowed out and it's very hard to reverse because there's not going to be
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a cataclysmic acute moment where people say, "Oh my god, we need to reverse
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these policies." It doesn't seem like that's in the offing. You know, LA did
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something a little different but similar is they introduced that 5% mansion tax.
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This on like all the areas except for like Beverly Hills and >> San Francisco has that too.
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>> Yeah, San Francisco got that too. I think it's actually like 6% in San
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Francisco. >> San Francisco. It's 6% over 25 million and it starts at 5 million. So there's a
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transfer tax, an excess transfer tax above $5 million properties that scales up above 25 million to an extra 6% on
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top of your brokerage commission. So when you sell a house in San Francisco, you're paying 13% now.
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>> Which is why you look at the transaction volume in the LA real estate market and
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it's just completely dried up. You know, people aren't doing the house flipping
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anymore, like that kind of stuff, because the transaction costs are too high. But it just shows I mean again
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this tax was imposed retroactively. For example, I had my house in SF and then they just take you know a couple of
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rooms of it and we talked about this on the show when it happened. But my my point is just your property is
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not safe in blue states and wealthy people who have a choice of where to park their money are going to
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increasingly realize that and they're not going to buy I think real estate in
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blue states is dangerous because the political class thinks that they can take a chunk of it and you know the
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wealthy people are going to react to that and they're going to move their money elsewhere.
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>> All right, let's go to topic number one. Open AI is apparently suffering from a
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bit of an identity crisis on Sunday. Open AI's chief revenue officer Denise Dresser sent a four-page memo to
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employees. Obviously, it leaked immediately, probably the point of it, and she called out Enthropic. She said
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their $30 billion run rate is cap inflated by 8 billion due to a revenue share and some accounting with AI model
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providers. Chimati pointed that out in the last couple weeks. Also, she said anthropic stories built on quote fear
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restriction and the idea that a small group of elites should control AI. Obviously, she's a fan of the pod. She
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also laid out OpenAI's pivoting and she said they are going hard after business
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customers and they want to win the agent platform layer. If you remember, they hired the architect of the open source
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project openclaw. They didn't acquire openclaw. So Peter uh Steinberger is working at Open AI. Cynical people said,
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"Hey, maybe they want his next set of innovations to go inside of OpenAI's
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products as opposed to the open source one." I kind of agree with that directionally.
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There's obviously Perplexity Computer is doing really well. They quadrupled their
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revenue. And uh I was over at XAI earlier this week with Elon and I can tell you he's got some very cool stuff
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coming. And this new model, Spud, is coming uh from Open AI. Here's your poly
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market. 75% chance Spud is released next week. Additionally, and we'll go to the panel
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in just a second. On Tuesday, 2 days after this memo came out, obviously people write these memos to go directly
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to the press. So, they're obviously trying to undercut Anthropics valuation and they feel that's a threat. That's my
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take. The FT cited anonymous OpenAI investors who are frustrated with the company's lack of focus. Here's the
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anonymous quote. quote, "You have chat GPT a 1 billion user business growing 50
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to 100% a year. What are you doing talking about enterprise and code? It's a deeply unfocused company and uh we
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talked about this chat GPT's market share is going down as the number of users is going up because Gemini and
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Claude gaining significantly and Medage just last week released their first proprietary model and Apple doesn't have
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a product in market yet, but they do have a lot of users. So here's your Gen
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AI website traffic. Let's start uh Chimath with you. Your thoughts on OpenAI. Should they be pivoting straight
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into business developers and getting focused on that or should they stay focused on the consumer where they are
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the verb? as it relates to complex long horizon coding tasks. What I can tell you from my team at 8090 is codeex is
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better generally than anthropic. And so what happens is for the more day-to-day work,
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I think it's more reliable to use the clawed ensemble of models, but when you're dealing with something that's
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very tricky and very complicated and a little bit more long horizon, codeex is really functional and really
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good. So I think if you're looking at it through the lens of open AI, what they're probably saying is, hey, hold on
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a second. If we allocate more resources and just double down and crush consumer,
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that's probably three or four trillion of enterprise value. And then if we slowly refocus the
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company with the rest of the resources and double down on codeex and do something meaningful in enterprise, we
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can probably capture two or three trillion there. And now all of a sudden you can paint a picture for a seven
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eight n trillion dollar market cap in the fullness of time. Not tomorrow obviously, but Codeex is really good.
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and there's a business to be had in both. You have to separate the two businesses. You can't have a lot of
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overlap because there's too much context switching. You got to let the consumer
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team run and then you got to isolate the enterprise team and let them do what they think is right.
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>> Travis, uh there's a big debate going on amongst the investors. The FTPS also
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questioned the $850 billion valuation of OpenAI. Secondary markets have now priced Anthropic higher than OpenAI for
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the first time. This is the flipping that people predicted. One investor said OpenAI would need to IPO at a valuation
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of 1.2 trillion for the last round to make any sense, but there's no buyers currently at the $850 billion valuation
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that OpenAI just closed. According to Bloomberg, Travis, how do you uh handicap this race between these two
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leading frontier models? >> Growth is king right now in this in this world uh in this segment. Growth is the
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whole damn thing. And if Anthropic is growing faster than OpenAI by a significant clip, the investors right
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now are going to play it forward. And they're it, you know, you start to get
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network effects around compute, network effects around the number of tokens you're pushing out for various
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customers, enterprise or consumer. And ultimately, you know, it's not great today, but how that plays into
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reinforcement learning and the things getting smarter over time. There's so many there's so much upside to volume
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and scale that if they are growing faster at the same size, even if OpenAI is still growing, but if
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they are half the growth rate, a third the growth rate, a fifth the growth rate,
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I would be I'd be worried. >> And you saw this at Uber specifically when you accelerated away from the
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competitors like Lyft and Door Dash. Yeah. >> Yeah. you had to network effects was the
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whole thing at the end of the day and network effects was based on scale. So yes, I'm I'm sort of like coming from my
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very specific experience. But if you believe there's network effects with the
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scale of data that you have and the scale of customers and the revenue that this is cash that's coming in that you
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redeploy into compute and so say there's network effects of large compute I'd be very worried uh if I'm open AI
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and seeing somebody growing faster at the same size. So Freeberg, when you look at this race between these two
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giants, maybe your thoughts on the flywheel as it relates, as Travis is pointing out to advantages in compute,
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reinforcement, learning, and then also the ability to fund raise. One of the great things that Travis and the team
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did was as they were pulling away, they just sucked all the oxygen out of the room by using capital as a weapon. Uh,
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so your thoughts, Dave, on this high stakes game because there's also a point
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at which, and I'll just end on this. There's a point at which >> you could run off the cliff. You raise
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so much money >> and you deploy it so fast and the revenue doesn't catch up to it and then
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you go public and the markets don't believe the story. So, your thoughts, Free, Bird,
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>> I don't know the financials of the two companies well enough. Obviously, Sam
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has no problem raising money. The guy, didn't he just close like $150 billion
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round or something? >> 122 billion. >> 122 billion. largest round ever raised
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in any market I think private or public. >> Yeah, probably. Yeah, I mean that's
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crazy. >> That doesn't seem to be an issue. What I've noticed is just the the pace of uh
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innovation at Anthropic is from my experience unprecedented. I mean, they're release cadence is
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extraordinary. They've basically supplanted Open Claw already with this release they did a few days ago and then
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today the new Opus model got dropped. So there's something about the momentum,
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not in necessarily just in user growth, but in how they're operating this business that just seems to be head and
00:19:04
shoulders above everyone else in the cadence of of upgrades. If I look back 6 months ago, I think we were pretty heavy
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on Cursor and Gemini. And now I think we're probably 90% anthropic in just the
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last 6 months at my my organization. There's something very powerful about the flywheel they have going on.
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>> Yeah. Oh, here's where I'd go just real quick, Dave, is mad respect on a$1
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120 or $130 billion raise. I mean, >> this is obviously next level, but you
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can use capital and investment to acquire scale and network effects associated with it. But if somebody is
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getting that scale with revenue and let's call it contribution margin, contribution
00:19:50
profit, efficiency will outstrip subsidy and it will you can't just keep raising hundred
00:19:57
billion dollar things forever. That's where the train will stop. And if Anthropic is funding theirs through
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revenue and other folks are funding it through investment, there's like a shortterm that's a short-term solve, but
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it the long run is whoever is scaling their actual usage and system and ultimately with contribution profit that
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then soaks up the need for investment. That's a that's a that's a very scary
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machine if you're competing against it, >> which is exactly sachs what the um
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legacy Mac7 are doing. you have massive profits from uh Meta's core business,
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Google's core business that are being redeployed into infrastructure and even
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uh Tesla which has a lot of profits and SpaceX which has a lot of cash on hand and they're building out Colossus and
00:20:51
other assets including uh Elon is working on building a fab as folks have been talking about. So, Sax, is there a
00:20:59
chance for the legacy companies, the MAG7s to compete in this, or are we looking at OpenAI and Anthropic are one
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and two and then everybody else can uh fight for third place and and the and the and the bronze as it were?
00:21:14
>> Well, I think Google's clearly in the mix. I mean, Deep Mind has an
00:21:17
outstanding team and I think Elon's still in the mix with XAI and then you've got Meta also has the resources
00:21:24
and they're seem to be further behind, but they're going to compete. Look, let
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me just go back to the central premise here. I agree that there's some valid
00:21:33
criticism that OpenAI has been unfocused and should be, you know, moving forward
00:21:41
more focused in what they do. I have no idea, for example, what they're doing
00:21:46
buying a podcast that's not us. So, I don't know what what that was about. Um,
00:21:52
if you were gonna buy a tech podcast for a few hundred million dollars, I mean, um, we were here.
00:21:57
>> We're here. >> We're here for Dario, reach out. Small potatoes for you guys though. Small
00:22:03
potatoes. They can afford you. They can't afford you guys. >> Yeah. They thought we were too
00:22:07
expensive. >> Little did they know we would have sold out. But, um, >> punch the ticket, Daria. Yeah,
00:22:14
>> but look, this other part of the criticism of Open AI that they shouldn't
00:22:19
do enterprise is totally misguided. One of the reasons why they should have been
00:22:23
more focused is to do more enterprise and get enterprise more correct. Now, why do I say that? To Travis's point
00:22:30
about growth rates, it's true that OpenAI and Anthropic as of the beginning of Q2, so let's say two weeks ago, they
00:22:40
were both around 30 billion of revenue. And that memo from that open AAI employee was right that if you compare
00:22:46
them on an applesto apples basis that anthropic is about 20% less because they are including revenue made by their
00:22:53
channel partners. But that doesn't matter. What matters is the growth rate. You know again to Travis's point and let
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me just put some numbers around this. The open AI growth rates been around 3 to 4x a year. The anthropic growth rate
00:23:06
has been around 10x a year. So they went from let's call it 1 to 10 billion of
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ARR last year and by the end of Q1 this year they were already at 30 billion of again let's call it their revenue and
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they're on their way you know like Brad Gerson was saying on our podcast I think
00:23:25
in the last couple weeks they're going to end this year at 80 to 100 billion at
00:23:29
least on the current trajectory and so you can plot their revenue on a logarithmic graph I mean again no one's
00:23:35
ever seen anything like before where every unit on the y- axis is another expon is 10x and it's a straight line
00:23:43
>> now it's crazy >> it's crazy right so if it's taking anthropic let's say one year to 10x and
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it's taking open AAI 2 years to achieve a 10x then it's obvious which one's
00:23:54
going to win now what is the reason for this is because anthropic was very focused on enterprise specifically
00:24:01
coding and what you're seeing is that businesses are willing to pay for coding
00:24:06
code tokens on a meter basis, let's call it like electricity. The more they use, the more
00:24:12
they're willing to pay and their usage just continues to scale and scale. Consumer is completely different. I
00:24:18
mean, consumer is a thing that OpenAI prioritized. Consumers have a lower willingness to pay. Maybe only 3 or 4%
00:24:24
of them are willing to convert to premium in the first place. And what they want is a $20 a month all you can
00:24:30
eat subscription. So, the revenue simply doesn't scale the same way that enterprise does. And so if you want to
00:24:36
tap into the scalable revenue source in the market right now, you have to go after enterprise. So you know again
00:24:42
where I would agree with the criticism of OpenAI is maybe they should have been more focused but they need to be more
00:24:48
focused specifically to pursue coding and enterprise and if they don't catch
00:24:54
up soon to Travis's point then you could see Anthropic taking a lead here that
00:24:59
let's say over the next one or two years could be insurmountable. Just by the
00:25:03
way, let me just say say one thing is even though anthropics revenue has followed this graph, this exponential
00:25:09
graph very predictably, it can't do that forever, right? Like let's say it does
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get to >> 80 to 100 billion this year. Can it really get to a trillion dollars in
00:25:19
revenue the year after that seems hard to believe, right? And and and the reason is because as you hit new levels
00:25:25
of scale, you encounter new problems. I mean, you're simply going to run out of
00:25:29
compute or electricity, data centers, you know, infrastructure. There are physical limits or there's limits in the
00:25:35
physical world that you're going to hit. And there's already some evidence that
00:25:39
Anthropic is hitting some of those limits. Users were complaining, for example, that Claude was thinking less.
00:25:45
Did you guys see this? That >> that, you know, a typical Claude prompt, they they seem to have cut down on the
00:25:50
thinking time by about 2/3. Now, I saw someone tweeting today that they just released Opus 4.7, replacing Opus 4.6,
00:25:58
and the thinking is back, but you know, maybe they're charging more for that.
00:26:02
Hard to say, but they're going to hit some sort of physical limits. And I do
00:26:05
wonder if over the next year Anthropic will reconsider whether it's support for
00:26:11
all this like doomer nimiism was the right call because it kind of made sense for them from a business standpoint when
00:26:20
their competitors were building data centers and they were just getting compute from the hyperscalers. But now
00:26:25
that they're I think going to have to move into the game of building their own
00:26:28
data centers, they might regret salting the earth for data centers all over the country. And I wonder if that'll be the
00:26:35
natural limit of their growth is they'll be hoisted on their own petard of doomer
00:26:41
nimism. >> And they're also using the uh coding platform to build anthropic itself
00:26:47
better. So that in and of itself is a reason to nail coding. You get the double whammy. You can make a better
00:26:53
product and you can get paid for it. >> Yes and no. Hold on. Because if you look
00:26:56
on Twitter, people are panning cloud desktop and what they said is this is all a bunch of vibecoded slop. I think
00:27:02
we have to remember if you keep these agents on task and they're guard railed
00:27:06
properly, this stuff is a force multiplier. The problem is nobody knows how to do this really well yet. Nobody
00:27:13
has built real products of scale largely using agents yet. Nobody knows how to give an example of how an org structure
00:27:21
should be redefined. Nobody knows how to budget properly. We had the CTO of Uber
00:27:26
say, "I give up. I've hit my token budget." The problems I see it are
00:27:30
twofold. The first is just to build on Sax's point. All of these frontier labs have a
00:27:37
very serious issue which is both open AAI and Anthropic are growing so fast that they're at a point now where they
00:27:44
need their own infrastructure. It's kind of like when you first start building
00:27:47
any kind of company, you're just much easier renting capacity from the hyperscalers
00:27:53
>> and it's a dependency. Yeah. >> But then it becomes a dependency.
00:27:56
Exactly. And now when you're so big, it's actually strategically a huge mistake to not have your own comput.
00:28:04
Why? Because if you look at who's leading, the frontier labs are leading. And Sax, to your point, you mentioned
00:28:10
this on X. You're like, there was all this doomerism, but maybe it was tied to
00:28:13
compute capacity because when Bedrock opened up more capacity for anthropic, all the doomerism went away. You're left
00:28:19
wondering like, is it really tied to just the fact that they were just trying to throttle usage? So if you're a
00:28:24
frontier lab, you don't want to have to go through Amazon and GCP and Azure and
00:28:28
Tin Cup for access and capacity. What you'd much rather have is go straight to
00:28:33
your customer. On the other side, if you're Gemini or Microsoft or Meta and you have all this
00:28:41
compute, because I saw a stat this week, the hyperscalers control 60% of all the
00:28:46
compute. So the game theory there is if you kneecap the Frontier Labs, it'll
00:28:50
give you some chance to catch up and it gives you time to catch up because no matter what the demand is on the upside,
00:28:56
you remember you guys remember like in social networking when Fster was the cat's meow.
00:29:01
>> Yeah. >> Cat's meow. >> Remember what the biggest problem at
00:29:04
Fster was? >> Cats meow. >> Fster was slow as a dog. >> Yes. >> Yes. Yes.
00:29:09
>> And what happened? Then MySpace came in and took all the share. Then we came and
00:29:12
Facebook and we took all their share. So there is a way where you can handicap and kneecap these companies by
00:29:18
throttling compute access to them. So a they are forced to now go and get in the
00:29:24
game which is weird because look open AAI has tried to displace some of the Stargate spend. I don't see any path
00:29:32
except they're going to have to do it themselves and anthropic will have to do
00:29:34
it themselves. But then separately, the other problem is when you change the subscription model in enterprise and you
00:29:41
say, "Hey, we're not going to subsidize any more tokens." What's going to happen is all these
00:29:46
token budgets are going to go crazy. And what Freebrook said is going to happen where he's like, "Hey guys, why are you
00:29:50
spending all this money? What are you making?" And you inspect the code and
00:29:53
you're like, "What is this slop?" And you're not going to add 30 40 50%
00:29:58
opex to produce nothing. So I think that that's an open question and that question will become more amplified over
00:30:05
the next year as they push the cost off of them. So as Travis said, no more subsidy from the capital.
00:30:13
You have to grow into it, but you're not going to support negative gross margins.
00:30:16
So you're going to pass through the token costs. I So I think it's a very
00:30:19
dynamic moment right now for these. If you look at the ranking of these clusters and who has the most right now,
00:30:27
uh people have forgotten about Colossus, which Elon's been building, he's
00:30:30
expanding to 555,000 GPUs across three buildings, 18 billion in investment. He then if you look at
00:30:39
Prometheus Meta's planned 2026, that's 150,000 GPUs. So this is uh >> well Elon just announced a deal. He
00:30:47
announced a deal this morning with Kurser. So Elon's Elon's renting a bunch
00:30:51
of capacity. So he's now getting effectively into the data center business. He's going to be a hypers
00:30:55
skill. >> So he's he's going to use as much as he can for XAI and whatever is left over
00:30:59
he'll give to well in this case he's giving to cursor to train their model.
00:31:03
He could >> what you're saying is you might as well overbuild capacity because that way your
00:31:08
own models would be in a privileged position and you can sell the rest to to your competitors. But to Jamath, to your
00:31:13
point about the thing I was saying on X, I actually I think I was retweeting Mark
00:31:17
Andre who pointed out that one of the reasons why Anthropic might have wanted to hold back Mythos is they simply
00:31:24
didn't have the compute to serve it. The model was huge and very expensive to
00:31:28
serve something like maybe even 10 or 20 times the token cost of of say Opus. They knew Opus 4.7 was coming out,
00:31:36
right? So they hold it back knowing that they don't have the compute to serve it
00:31:40
anyway and they save their compute for the next iteration of Opus. And then by holding it back they create this
00:31:47
impression of scarcity and altruism and it turns into this gigantic marketing event for their product because everyone
00:31:54
in the government's like, "Oh wow, they're holding it back because it's so
00:31:57
amazing." Now look, I think it may have been genuinely altruistic as well in the
00:32:03
sense that Mythos does reveal coding vulnerabilities that people didn't know
00:32:08
about before. And you know, it does make sense to give time to companies with large code bases to patch these dormant
00:32:15
bugs and vulnerabilities, but it's looking more and more like Anthropic could not have offered that model
00:32:22
commercially anyway because it was just too big and expensive and they need to create space for Opus 4.7. So, it's an
00:32:30
interesting theory on what actually happened there. >> All right, guys. Uh before we go to our
00:32:34
next story, some breaking news here. Uh here's your poly market, gentlemen. And
00:32:38
I don't this is I don't know if you're placing some insider bets here uh
00:32:41
Freeberg but looks like the All-In podcast uh anthropic now 37% chance of buying the All-In podcast. This is live
00:32:48
>> by what time? By >> poly market. Yeah, this is by the end of the year.
00:32:52
>> By end of the year. Okay, got >> by end of the year. So it's >> this isn't real, is it?
00:32:56
>> Yeah, absolutely. They've been People have been trading on this. This is
00:32:59
heavily traded. >> It can't be. It says $92 million of volume. >> Yeah, this is the number three largest
00:33:06
market. There's no way this is real, dude. There's no way. >> It's breaking news, guys. I don't I
00:33:10
don't control the news flow. >> This is Jake slump. >> This is no way this is real.
00:33:15
>> Anybody can write a prediction market, I guess. Hey, what's the what's the uh
00:33:19
volume of that thing? >> 92 million. >> It's not real. >> Is there $2 behind it?
00:33:24
>> There's no way that's real, guys. Come on, >> guys. It's all good upgrade,
00:33:28
>> guys. Time to upgrade the planes. I just Hey, guys. Just I don't need the PC24.
00:33:33
I'll take somebody's G650. Whoever's got a G650, go up to the 800. It's going to
00:33:38
be trickle down to JCAL. Let's do it. I'm I'm giving up my United Platinum
00:33:42
status. >> Trickle down economics. >> Trickle down avionics. All right,
00:33:45
listen. Story number two. >> Triple triple down. That's good. This is pretty good. Okay,
00:33:53
number two. All birds, speaking of data centers, all birds just pivoted from ugly sneakers to scratiad to AI and the
00:34:02
stock has ripped. talking about peak bubble behavior podcast getting bought by Frontier models and sneaker companies
00:34:10
uh pivoting to data centers. All birds as you know is the ugliest sneakers on the planet and uh this became a massive
00:34:20
delusion in our industry that this company was worth billions of dollars. They went public in 2021. This might be
00:34:27
one of the peak zer moments. Raised $350 million in their IPO. Sax, were you an investor in this thing?
00:34:34
>> All birds. >> All birds back in. No, >> no, no, no. You're thinking about the
00:34:38
scooter company. That's right. >> Don't Don't remind me of the the
00:34:43
investments that didn't work. >> But no, >> Bird was crazy. >> This reminds me of the late 90s where
00:34:51
all you had to do was change your name to whatever.com. >> Yeah. Yes. >> And you get a huge pop in your valuation
00:34:57
>> and you could spit it out. Barnes & Noble.com became then Barnes & Noble.
00:35:02
And so the stock crashed and never looked back. There's your Stark chart. Um they sold off all their brand assets
00:35:08
for 39 million, about 10% of what they raised in the IPO. Congratulations to whoever owns those ugly ass sneakers.
00:35:15
>> Why were they worth 4 billion? They sold >> collective delusion. Collective
00:35:19
delusion. People in Silicon Valley liked them and they just thought it was the next Nike.
00:35:23
>> Tulips. >> It was tulips. Well, I think I think that was an era in Silicon Valley where
00:35:29
people rewarded rapid growth without really looking at gross margins or cost of goods sold. People didn't really make
00:35:36
the distinction between software and everything else, right? Software, you never really had to worry about COGS or
00:35:43
gross margin because the incremental cost of serving a customer with software is like almost zero. So people in
00:35:50
Silicon Valley weren't really trained to look at gross margin and there was this
00:35:53
rash of physical world companies that all of a sudden started getting crazy valuations. Travis, quite frankly, you
00:36:00
might have the success of Uber might have ushered in this era of, you know, these physical world companies that
00:36:06
started getting valued like software companies even though obviously they didn't deserve it.
00:36:10
>> David, thank you so much for that shout out. I really appreciate it. >> You and Airbnb your fault. Anyway, let's
00:36:16
get back to >> No, no, no, no. Hold on, hold on. The era of 21 is super interesting though
00:36:20
guys. I don't believe it was a physical versus digital thing. I believe it was a
00:36:26
moment in time in the COVID zer massive money going in. We hadn't seen inflation
00:36:32
yet. It was all of that happening and the investor class was basically deciding we're going to look two and
00:36:39
three years forward on your current growth. And it wasn't one year forward. It was
00:36:45
like two or three years forward. And that's where these crazy valuations got
00:36:48
weird. So if you went from 0 to, you know, if you went from a hundred to $300 million in the last year, they'll play
00:36:56
that two, three years forward and go, "Oh yeah, you're totally 20 times
00:37:00
bigger. We'll pay you for that now." >> Yeah, >> that's where it got weird.
00:37:04
>> It got weird. Hey, Bird Scooters was valued at two or three billion. They
00:37:07
were doing micromobility. >> You're just trolling them, Jay. I'm No,
00:37:11
we're giving everybody their flowers for incredible investments and even even the
00:37:17
mighty sachs could trip up. Did you sell IPO? >> Yeah. >> No. No, we don't do that.
00:37:22
>> Uh it was a series A we did. I mean, look, we we got it right in the sense
00:37:26
that it was a total phenomenon, >> but then the cities just cracked down on
00:37:30
it and killed it. Look, if the cities had leaned into it Yeah. Look, if the cities had reacted differently, if they
00:37:34
had leaned into it, if they had created, let's say, a scooter or like a small EV
00:37:40
lane, they could have transformed cities. I mean, it would have been a lot easier to get around. But instead, they
00:37:44
banned it. They limited it. They didn't create designated areas for it. And then
00:37:50
the the cuda grass was basically when they would take a city where Bird already had like 80% dominant market
00:37:56
share and then they would say that well we're going to choose four operators and
00:38:00
give them each 25% of say a thousand scooter allocation. That just killed the economics for everybody.
00:38:06
>> Yeah. There's no market anymore. >> There's no market. Yeah.
00:38:08
>> Yeah. >> There's no marketplace network effect, right? When when they're basically just
00:38:12
picking the winners and deciding the market. >> Yeah. You can't you can't compete
00:38:16
>> and splitting it even. So then >> yeah, there's no there's no competition.
00:38:19
You can't drive value. >> Regulatory capture at its worst, >> guys. Like we should watch for this in
00:38:24
the in the autonomous car space too. Cities may get cute and start doing things like that. And and what they did
00:38:30
on scooters, they could do on cars. >> That's a really good point. Yeah, you're
00:38:34
right. Instead of just letting the market >> play out, they say, "Well, we're only
00:38:38
going to have x number a thousand autonomous cars. >> New York is literally doing this right
00:38:44
now. New York and Boston >> and then the prices prices go up. The innovation doesn't get realized.
00:38:50
Consumers don't benefit. No one benefits. Basically, you've deleted the market.
00:38:55
>> Yes. And anyway, just to wrap up this story on the the shoe company, they're now Newird
00:39:01
AI. They bought eight H100s, I think, with $50 million in a convertible note. And the stock has gone up.
00:39:10
>> Not eight. Stop. Eight. Really? No, it's not. >> No, it's a joke. Obviously, the stock's
00:39:14
now at $14 a share. It's up 450% in the last week. Shout out to Wall Street Bets
00:39:19
for staying Can I say something more than the shorts can stay solvent. >> Can I say something serious?
00:39:27
>> Yes, please. >> There are a handful of transactions that have happened in the last few days that
00:39:32
if you look far away are head scratchers. So, this is one. I don't know if you guys saw recently, but Jane
00:39:40
Street did a a billion dollar investment in essentially a neo neocaler and then also did a $6 billion compute deal with
00:39:49
them. That was like a little interesting. So what would I like to say about this? I think the thing that the
00:39:55
capital markets are getting right is that we are massively compute constrained. Massively.
00:40:02
And those are two problems. One is the power. So if you look at companies like Bloom Energy, it has gone absolutely
00:40:10
straight up vertical nuclear. And the reason is because Bloom has a solution that allows you to useNAT gas that
00:40:18
allows you to do something on site and critically allows you to get your clean air permits very quickly because it has
00:40:25
very very little emissions and it's been proven as such. And so instead of waiting for years to get on the grid, if
00:40:32
you wanted to build a data center, you can now use their services. The other part that's going absolutely nuclear is
00:40:38
the actual land and the shell because it's turning out it's impossible to get
00:40:43
these approvals. Now, why is that? And I sent Nick an image. The reason is because underneath at the core of it all
00:40:50
is there's a tide that is shifting on AI. the American population is incrementally
00:40:58
getting more and more negative on the whole subject matter rit large and it's not clear exactly why they're
00:41:07
doing that. Maybe it's the doomerism which we talked about last week. Maybe it's the fear of the job loss that Jason
00:41:11
has been talking about. Maybe it's just this idea of yet another wave of innovation that's only going to benefit
00:41:17
a few in an extreme way. minting trillionaires all over the place while everybody else stands still. I don't
00:41:24
exactly know what's causing it, but the sentiment is shifting. And as the sentiment shifts, the most scaled action
00:41:32
that they can take, they're taking, which is then they are going and voting down data centers. Here's an example
00:41:36
which was insane. A town approves a $6 billion data center build and then half the the the board gets ousted. just
00:41:46
voted out overnight so that they could put in new people to undo the decision. So if you look at this all around the
00:41:54
country, the answer is not, oh, we're only going to build in Texas. That doesn't work. There's not enough power.
00:42:01
There's not enough grid capacity. There's not enough net gas that allows
00:42:04
that to happen. Maine just passed a bill that bans all data center buildings. So
00:42:10
I think the reason why all birds went crazy is a very very small canary in a very
00:42:17
important coal mine which is we are absolutely compute constrained. I think if you play this out the real
00:42:24
problem again goes back to anthropic and open AI. If I were them it is a five alarm fire for them. They more than
00:42:30
anybody else needs to get their hands on compute. They need to have land power shell, but otherwise that revenue could
00:42:37
either slow down or hit a wall and it will not be because of product quality and adoption. It will entirely be
00:42:44
because of the Fster effect. You just couldn't keep the site up and I think that that that would be a huge huge
00:42:50
problem for everybody. >> Saxs, final thoughts on data centers and the buildout.
00:42:54
>> Well, I think I think Jimoth is right that the the data centers become very
00:42:57
unpopular. probably in 30 states they're just going to ban them outright and then
00:43:02
it's very hard to get projects approved. Look, I think there's a few reasons for
00:43:05
this. One is that there are a lot of let's call them real estate developers who are kind of wildcatterers who are
00:43:11
out there trying to get entitlements and they did bring a lot of projects up for
00:43:16
local permits where they didn't have a a power solution. And there's no question
00:43:20
that local communities do not want the data centers drawing off the grid, thereby increasing residential prices if
00:43:28
that data center is not bringing its own power generation. And the administration
00:43:33
agrees with this. This is why the president did the rateayer protection pledge where we got all the major users
00:43:38
of the data centers, you know, all all the hyperscalers to agree that they would not build new data centers without
00:43:45
bringing their own power. So again, it was designed to be power neutral to the grid or in fact it would increase the
00:43:52
amount of energy available to the grid because these data centers would give back when they're not at peak usage. So
00:43:58
that's sort of like category number one is there's this fear of electrical rates
00:44:03
going up. But there's a couple other categories I think of groups. The second
00:44:06
one was future of life and a lot of these like doomer groups saw that data centers were a way to stop AI progress
00:44:15
and there are interviews with some of these doomer folks who say things like we have to meet people where they are
00:44:21
meaning that they've been unable to convince people that AI is going to lead
00:44:24
to the terminator but they can convince them that AI data centers are going to use up their water for example which
00:44:30
isn't true and so a lot of the nimism has been kind of astrourfed by a lot of
00:44:36
the doomer groups which have a lot of money thanks to contributions from a few tech billionaires like we've talked
00:44:43
about in the past. So that's category number two. Category number three ironically again is anthropic itself. It
00:44:50
has allied itself politically with a lot of the doomer groups, a lot of the nimi
00:44:55
groups. It didn't seem to matter in the first couple of years because Anthropic
00:44:59
had made the strategic decision not to build its own data centers. So they probably thought that they were just
00:45:04
throwing sand in the gears of OpenAI or XAI, their competitors, and they would just rely on hyperscalers to get their
00:45:13
compute. And I think that that strategy has now backfired in the sense that they
00:45:18
apparently have reached the limits of the compute that's available to them by
00:45:23
buying it from a third party and they need to build their own data centers. It's going to be very interesting to see
00:45:27
how they adapt to that and how the message around data centers changes over the next year as let's call it the
00:45:34
effective altruists decide that all of a sudden data centers or certain kinds of
00:45:38
data centers might be a good thing because they serve their mission. So I think that's going to be a very
00:45:43
interesting thing to watch. I'll tell you the one thing I think you're missing, which is that most people in
00:45:48
America really are starting to really hate rich people. And there's no physical space that better represents
00:45:56
the wealth in America, the wealth creation that's happened that a lot of people feel left behind from than the
00:46:02
data center. What other physical space is there to go to? It is the temple of the wealthy. It is the mechanism, the
00:46:09
tool, the machinery of the wealthy. It is the way that the rich elite tech kind of political connected billionaires that
00:46:19
we're obviously all attached to are taking from the poor, getting themselves
00:46:26
ahead, shooting themselves to space, leaving everyone else behind. And the data center, I think, is the
00:46:32
representation of their progress. And it is a representation of the progress that
00:46:37
others don't feel. So that's why I think it is physically like the manifestation
00:46:41
that people want to attack and destroy. Uh there's very little rationale about
00:46:46
oh let's stop AI robots from killing us. I think people just don't see the value
00:46:50
in AI. The average person doesn't see the value in AI today yet. Like we just
00:46:54
talked about so much of the value of AI is showing up in the enterprise and in the rebuilding of enterprises. But for a
00:46:59
consumer's life to actually be altered in a meaningfully positive way, most people don't feel that yet. the best
00:47:04
thing they see is some medical advice they're getting on chat GPT or something
00:47:08
and that's kind of the end of it for them. So I think there's a lot of this
00:47:12
populism that's swollen and that's taken over not just the US but probably a good
00:47:16
chunk of the west and and the the data center is the target. It is the pier deter of this space in a way. This is
00:47:23
their attack vector. >> To David's point, they'll probably ban data centers in 30 states. Data centers
00:47:29
can output and input at the speed of light. So they can be anywhere. I mean, you know, the reason you put data
00:47:33
centers in different states is cheap power, low latency. So maybe you get a couple milliseconds of latency. So the
00:47:39
data centers can go anywhere. So as soon as all the states start banning the data
00:47:43
centers, the data centers will just go to space to Iceland to Texas to Florida and then and then the data center and
00:47:51
then everyone will be forced to move on Travis. They'll basically find the next
00:47:55
target for populism which will be something else. The peerto- tear, the data center, what's next? You know, this
00:48:00
is this is part of what's going on right now >> where we've got this kind of level of
00:48:05
debt from the I always bring it back to this because I do think this is at the root cause of populism is the fact that
00:48:11
the government promised so much is so inefficient and as a result it's destroyed the value of the dollar not
00:48:15
given anyone anything that they thought they were getting. >> And we do have the rateayer pledge sachs
00:48:20
to address the energy issue that was a big win I think and you worked on that I believe.
00:48:25
>> Yeah. >> But hold on. Can I just say something? I think that rate payer pledge is
00:48:29
important. It doesn't change the business model of the utility. Meaning >> what the utility is allowed to do is
00:48:37
every year build a budget. And the way that they decide how to charge you is that they are allowed to make
00:48:44
investments, right? And then they're allowed to earn 10% roughly on the amount of investment that they make.
00:48:53
What do you think their incentive is? their incentive is to find ways to keep investing and upgrading the
00:48:59
infrastructure. So I suspect what you'll see is independent of what the data
00:49:04
centers do on site, which I think is smart and good, and I'm glad you guys did that. It doesn't slow down the
00:49:11
actual fundamental business model of the utility because those are local monopoly
00:49:16
licenses that are granted at the state and county level. And so when you go inside and you look at those utilities,
00:49:22
what they're allowed to do is say, "Well, I'm going to bury the lines
00:49:25
underground because there's a wildfire threat that's going to cost 10 billion."
00:49:29
And they present that. The PUC has to say yes. And they're allowed to make 10%
00:49:32
on 10 billion. So the business model of the utility has to be looked at because it is independent of all of these other
00:49:39
things. And they have an incentive like insurance companies to just walk prices up over time.
00:49:44
>> It's true. >> That's why I think behind the meter is so so important there for sure. But
00:49:48
look, I mean, this idea that that data centers don't create jobs is just wrong.
00:49:51
I mean, it's been a huge boon for bluecollar jobs and the construction industry. I mean,
00:49:56
>> while they're building the data center. >> Yeah. But that that construction could
00:49:59
be a wave that goes on for a decade or two decades. I mean, the capex is not going down. It's increasing. Listen to,
00:50:06
for example, what Jensen says about his projections. I mean, it's not like the
00:50:09
capex is a one-year thing. We're seeing tens of thousands of new construction
00:50:13
jobs being created and 25 to 30% higher wages for electricians, carpenters, the guys who hang drywall or pour concrete,
00:50:21
create roads, install equipment. I mean, these are blue collar jobs and it's
00:50:26
creating again not just new jobs, but also wage increases. It's a good thing.
00:50:31
It's not a bad thing. I think the issue is >> it's not a bad thing, but it's not the
00:50:35
same as a fab where the jobs are permanent and they're there. Uh we can debate it all we want but you can
00:50:41
there's about a hundred data centers right now that are being contested. The
00:50:44
data is for every hundred that are contested about 40 get cancelled. That number is increasing for this year. It's
00:50:51
more than doubled already from what the number was last year. And the total economic value of those 100 data centers
00:50:57
right now is about $162 billion. >> Jason, the the thing is is that there are permanent jobs because what where's
00:51:04
the energy that's powering that? Where's the semiconductors that's powering that?
00:51:08
You know, there's a lot of >> we we actually had um Chase from Crusoe and Michael from Cororeweave on the
00:51:16
All-In interview show and they said they're bringing energy with them. That's their big thing. Bring BYO, bring
00:51:22
your own energy to the space. They're bringing in Knackas. They're bringing in
00:51:26
diesel fuel. They're bringing in solar. BYOE is the model. Well, c can I also
00:51:31
say listen if if you were of the opinion that you didn't want more data centers
00:51:36
in America because it was using up say scarce energy resources or something like that but you weren't just
00:51:42
anti-progress altogether then what you would want to do is at least see more data center construction among US allies
00:51:49
right energyrich US allies well a year ago that's one of the things I worked on
00:51:54
was allowing the Gulf states to build data centers with American technology for American companies and remember the
00:52:02
controversy that caused. Everyone accused us that somehow this was like serving China. Well, those data centers
00:52:07
are getting bombed and I don't think they'd be getting bombed right now by
00:52:10
Iran if they were serving China. These were >> they're very strategic. Yeah.
00:52:15
>> The IRGC has put these data centers on a list of assets that they've threatened
00:52:19
to destroy because they're American assets or they're assets of our Gulf
00:52:24
State partners in partnership with America and American companies. This whole idea that somehow this was a
00:52:32
threat to American national security was a total hoax just like the data center uses too much water. And what I'm saying
00:52:38
is that a lot of the same forces were behind this hoax as are behind these data center hoaxes. Now Freeberg is
00:52:44
right about the resentments, but those resentments get whipped up and marshaled by people who have an agenda and that
00:52:52
agenda is wellunded and strategic. And I can tell you then the case of the GCC data centers, Anthropic was adamantly
00:53:00
opposed to that and they were lobbying against it and they were again salting the earth against those projects. I
00:53:06
think the whole issue is kind of moot now anyway because I think the data centers have been blown up but
00:53:10
>> uh or they've been threatened to but it just shows how ridiculous >> and and what a scop some of the
00:53:16
opposition to these ideas are. and it's a cell phone in many ways. If you think
00:53:22
about who are the top two spokespersons for our industry and what they're communicating to Americans versus say
00:53:30
how the Chinese view AI, which is incredibly positive, we've got Daario who says it's the end of days.
00:53:36
Everything's going to be hacked. All your files are going to be hacked. All your accounts are going to be hacked.
00:53:41
And then on the other and everybody's losing their job. That's our top spokesperson in Dario at Anthropic. The
00:53:47
other top spokesperson just had a 70,000word piece written about him where Ronan Farah said, "I had a dozen people
00:53:55
tell me unprompted, Sam Wolman's a sociopath." Those are the top two spokespeople. Those people cannot be the
00:54:02
spokespeople for this industry. And this industry's got to get focused on fixing
00:54:05
the big three. Healthcare is going to be dramatically improved by AI. Housing could be dramatically improved. I'm not
00:54:12
sure who's working on that. And obviously education and the cost of education. We need somebody out there, a
00:54:18
Michael Dell, you know, Jensen, Elon, just explaining how world positive this could be because right now AI is as
00:54:26
popular as is less popular than ICE, the Democrats, and the government of Iran. >> Joe Leand at Alpha School. On the
00:54:34
education side, I think you just have to look at Alpha School. It's it's working.
00:54:37
>> All right. So, that's your story, uh, Chimath. That's the story of all birds,
00:54:43
the most overvalued startup. But uh we're going to play a little uh cue the music here. We're going to play a little
00:54:48
game show for everybody. This is the price uh David Saxs is wrong. Yes, this is the price is wrong. The price of the
00:54:56
startup Travis is wrong. >> And this is the game show where we guess which overvalued disaster are we talking
00:55:05
about. First up, hell from Austin, Texas, an enforcer in the PayPal mafia. It's Mr. David Saxs. Welcome to the
00:55:11
program, David Saxs. Are you ready to play the price? >> I'm ready to play. Let's do it.
00:55:15
>> You're ready to play? Okay. >> All right. >> Here we go. The price is wrong. This
00:55:19
startup was once valued at over $13 billion. Their main business model selling JPEGs for fake internet money.
00:55:26
People lost their minds and started spending millions of dollars on monkey images. Play the thinking music, please.
00:55:33
David Sachs, can you name that start at one? Billion. 13 billion for is that is that like the board apes thing?
00:55:43
>> Okay, you're closing in. Remember, form it in the name of a question.
00:55:47
>> I know. I know. I know. >> It's selling JPEGs for fake internet
00:55:50
money. >> Me, me, me. Pick me. Pick me. Pick me. >> People, you'll get your chance. Chim.
00:55:55
>> Oh, I think I know what you're talking about. I can't remember.
00:55:59
>> They're spending millions of dollars. Can I say Can I say it's your turn to
00:56:04
steal the steel? >> Open. >> Correct. 100 points for Chimoth Polyhapatia.
00:56:10
>> Okay. An amazing steal. An amazing steal. And next up, >> okay, here we go. He puts the dick in
00:56:16
dictator hailing from Palo Alto, California. It's your favorite Door Dasher Jamal Poly Hot. How long you been
00:56:23
door dashing there, Jamal? >> Nine years. >> Nine years. You like that? What do you
00:56:27
like about that? Is it the interaction with the people? Is it the tips? Is it stealing a couple of French fries? What
00:56:31
do you like about being a door dasher there? >> I typically take four fries. I lick the
00:56:35
burrito. >> Okay. Licking burritos. Did he just say licking burritos? >> This is why we need robot delivery.
00:56:41
Robot delivery drivers. I mean, it's just >> coming. >> It's coming. Okay.
00:56:46
>> We don't want our French fries being licked. >> Let's get the music going here. This
00:56:49
startup once valued at 4 billion. >> Allowed you to talk to other people on
00:56:55
your mobile device during co and you could listen to mid VC. >> Yes. Yes. I got it. I got it. It's
00:57:00
called >> generic startup device. Can you name that overvalued startup? >> Oh my god. It's called Clubhouse.
00:57:05
>> Oh my god. He's on a heater. That's 200 points for Chim Polyatilla. Hey, that's
00:57:10
a lot of Door Dashes. He's going to do very well here in the final round. >> That's an amazing memory. How How soon
00:57:15
we forget? I can't I couldn't replace any of these names. >> Okay, finally streaming in from a potato
00:57:21
field at an undisclosed location in Idaho. It's It's Dr. David Freriededberg. Uh you're you're in the
00:57:27
potato sciences, correct, >> Mr. Freeberg? That's right. Potato. >> Okay. You like the potatoes? You have a
00:57:33
favorite potato dish? Is it the scallops? What do you like to do with your potatoes?
00:57:36
>> What is your name, Mr. What is the host's name? What is your name, host?
00:57:39
>> It is me, Jocular Jal. Let's go. Here we go. It's Jocular Jal here at the helm.
00:57:45
>> You like a certain type of potatoes there? >> It's calacanis. And what do you like
00:57:51
there on the potatoes? What's your favorite there? You like a creamy mashen? Little little little little
00:57:56
cheesy. >> You're liking You like the cheese? Okay, very good. Okay, David, this startup was
00:58:00
once valued at $270 million. This is your favorite. I understand you're a vegan. They sold juice. These juice
00:58:07
packages went into a juice machine. I know. I know. I know. I know. I know. I know. I know. I know. Branded as the
00:58:12
next iPhone. The iPhone of juice. Can you name >> Oh, I know it. >> I know it.
00:58:18
>> I know it. I know it. Pick me. >> You'll have a chance to zero. Juice.
00:58:21
That's 100 points. >> Wait, are you searching? It looks like he's searching.
00:58:25
>> Did he? Oh my god. Are you on your device? >> He looked like he was on his device.
00:58:29
>> Internet free. Internet free here. All right, folks. There you have it. A
00:58:34
clear winner. Chamal Poly Hapatia. Tell him what he's won. He's won a trip to
00:58:40
Temptations 2 in Cabo. You're going directly to Temptations to an adult resort. Uh that's for you and two of
00:58:46
your friends. Okay. Enjoy Temptations 2. Shalom. Polyapatia. >> Two of your friends. What a fun game
00:58:52
this is. >> You can bring your throppple. >> I think this is going to need to become
00:58:56
a regular feature of the pod. >> Okay, landed. Everyone Everyone forgets the unicorns that don't work. They just
00:59:03
like disappear into the ether. >> All right. All right. There you go. You won a pier tear on a uh on a
00:59:12
>> tax bill in New York. >> You got a pier tear available to you as your first place winner. Chimoth Poly
00:59:18
Hapia Door Dasher for Ela Pear. All right. Listen. Uh there's been a lot of shenanigans going down in DC, the most
00:59:26
boring city in the world, where apparently everybody's uh getting a little frisky after hours. TMZ launched
00:59:33
a news bureau. Eric Slaw is out of the governor's race. There's a lot of dark stuff that's been
00:59:41
released. He is innocent until proven guilty, but it's not looking good. >> He also resigned from Congress, Jal.
00:59:49
>> And he resigned from Congress as well. And Freedberg are investigative journalist now working
00:59:56
as a stringer for TMZ Freeberg. What have you learned? What's in Freeberg's
01:00:02
anything? I my um >> Okay, you have an analysis then? Maybe >> my anecdote on this is back in December
01:00:11
when it was first rumored that Swallwell was going to run for governor. I started
01:00:19
making some calls to various folks to be like, "Hey, you know, what do we think
01:00:25
of this guy? Is he going to be a good candidate?" You know, obviously I and a
01:00:29
lot of other people before they evacuate the state care a lot about the future of
01:00:34
California. So, I started checking around. I spoke to several people who independently told me that there's
01:00:42
knowledge about this guy sending, you know, pics to employees and that this guy has a bunch of stuff that's going to
01:00:50
come out about him. So, I heard all of this not from one person, but from several different sources. This was back
01:00:56
in December going into January. And I largely kind of dismissed it cuz I was like, if this is true, this would have
01:01:03
all come out already. I'm like, there's no way this is true. If it was true,
01:01:06
like people would have talked about it. They would have made a thing about it. If multiple people are telling me about
01:01:10
this, then I've got to assume that it's a rumor that's being used to block him
01:01:16
from running for governor versus it being a real thing because multiple people have this knowledge and this
01:01:21
information. So, this was December, January where I had these conversations and at that point, nothing had come out.
01:01:27
So, I was like, "Okay, it doesn't seem like this is real." And then everything
01:01:30
that I had been told started to come out in the last week. So the striking aspect
01:01:35
of all of this for me was how much knowledge there was about these various incidents with the guy. How so many
01:01:43
people had this knowledge and how no one had actually brought the knowledge to bear. Which begs the question,
01:01:52
why did they not do what was right by the victims? Or why did the victims sit on the sidelines waiting for the right
01:02:00
moment to all come out together? because this was broad knowledge within a community of people and they made the
01:02:07
choice not to bring it forward with that knowledge. And that's what was so striking to me about this whole thing. I
01:02:13
had honestly dismissed the whole thing as just being rumoring to try and bismerch the guy. And it turned out that
01:02:18
these were all being held back purposefully and deliberately for a very particular moment in time when they were
01:02:24
all brought forward to be used. >> And let me just be clear, these are all
01:02:28
allegations. Nothing's been proven in court. He does get his day in court. etc. We just want to make sure there's a
01:02:35
bunch of alleged here. >> Yeah. No matter how bad and all that I'm saying is that people had told me about
01:02:41
these supposed claims 5 months ago, four months ago, multiple people, and had chosen not to bring it forward. And that
01:02:48
the victims had not come forward publicly with these claims. And then there was this coordinated effort to
01:02:53
bring everything forward at the same moment. And that's what was so striking
01:02:56
to me is just how coordinated all of this happened. >> Who's controlling it? Who do you think
01:03:00
like is there like a meeting? Is there like a a counseling >> Nancy Pelosi?
01:03:06
>> Jesus Christ. It's so >> I don't know if that's true.
01:03:08
>> Well, I don't not just her. >> I'll tell you my sense of it. My sense
01:03:12
of it is that there are certain insiders and he's not an insider. And those insiders are like the Katie Porters of
01:03:18
the world. Katie Porter, I think, is who the Democratic establishment wants to be
01:03:22
governor. She's an insider to national Democrats. She's an insider to California Democrats. And I think that
01:03:31
she's the preferred candidate. Tommy Styer, she's a spousal abuser. >> I don't know that Katie Porter is like
01:03:37
this ultimate insider, but I think there are, look, there are clearly insiders. The Democratic Party is a machine that
01:03:43
exists to siphon off as much money as possible from the public till the interests that support the party and
01:03:50
it's their gravy train. And they're not going to let anyone stop. >> The Dems Sachs, I don't know if it's
01:03:54
just the Dem. >> Hold on a second. They're not going to let that gravy train stop for one
01:03:57
second. Now, the Democratic party had a huge problem in this California governor's race, which is that the
01:04:03
Democratic field was very fragmented. And so, the two Republican candidates actually were polling the highest. And
01:04:09
so, that just so the viewers have context, California has this weird jungle primary system where the top two
01:04:15
go to a runoff. They don't have a Democrat lane and a Republican lane. They just take the top two jungle
01:04:20
primary and then they go to the runoff. Even today still Hilton and was it Bianca or whatever they are polling at
01:04:28
both around like 14 or 15% and if the election were held today you'd have two
01:04:32
Republicans in the runoff. So the Democrats needed to winnow the field down and have fewer candidates. In
01:04:39
addition to that, they must have been concerned that all this oppo on sua would come out once it was him versus
01:04:47
say Steve Hilton and they didn't want it to come out later when they could lose
01:04:51
the election. So the powers that be made the decision to lance the boil probably
01:04:57
there was a conversation with him to tell him to get out of the race. He didn't listen. And by the way, remember
01:05:02
this feels a lot like what happened with Joe Biden when he had to drop out of the
01:05:06
presidential race. That sounds surprisingly like that. >> The whole Democratic establishment and
01:05:11
all the mainstream media were saying that Biden was sharp as attack. Okay. And then he had that disaster debate
01:05:17
performance with Trump and it became clear. Yeah. And you could just see the text messages were flying during the
01:05:24
debate between the Democratic Party insiders. And by the time that debate was over, they had congealed on a new
01:05:31
position, which is that Biden had to step aside. And then Nancy Pelosi was reported as having gone to the president
01:05:36
and said, "We can do things the hard way or the easy way." Imagine that. Like
01:05:42
telling the president of the United States, "We can do things the hard way or the easy way." And then Biden
01:05:47
disappeared for a week and magically he stepped aside by tweets. Remember that he published a statement that appeared
01:05:55
to be done by an autopin. People were speculating whether he was even behind this or whether the staff pushed him to
01:06:00
do it. The whole thing was extremely weird. But he, you know, was clearly muscled out of it. Just a few days
01:06:07
before he had said, "I'm not leaving the race no matter what." I mean, it was
01:06:11
like straight out of that Wolf of Wall Street meme. They're not getting me out
01:06:15
of here. And then a few days later, he's resigning by tweet. And again, Nancy
01:06:20
Pelosi appears to be the figure at the center of both these things. She was hold
01:06:25
on a second. Pelosi is reported as having been Swallwell's mentor. I guess she found him roughly 20 years ago to
01:06:33
run for Congress in the first place when the Republicans wanted to kick Swell off
01:06:38
of the intelligence committee, the House Intelligence Committee for allegedly being involved with that Chinese spy
01:06:44
Fangfang. It was Pelosi who protected him. So, she's sort of been a central figure in his career. I'm not saying she
01:06:54
approved of anything he did. But >> listen, politics is >> But there's no there's no way that that
01:06:59
button gets pushed without going to Pelosi for the sign off, right? I mean, she's like the boss of this operation.
01:07:06
And I think that the same thing happened to Swallow that happened to Biden is they went to him and said, "We can do
01:07:11
things the hard way, the easy way." He was too dumb to listen and they did things the hard way.
01:07:16
>> Yeah. Shout out Nancy Pelosi, incredible day trader. And uh shout out to a friend
01:07:22
of the pod Ro uh Row who's now beaten Nancy Pelosi. I think his trades this year he's uh he's actually even beaten
01:07:29
>> Nancy Pelosi. That was the Roana has traded $600 million of stock. >> He trades more frequently than Citadel
01:07:37
Securities. >> I mean it's incredible. Yeah. Where's his piter? >> I want to get in on it.
01:07:42
>> The congressman you've been supporting for years is a great stock trader. He's
01:07:47
apparently we should have been talking to him not about taxes. We should have been talking to him about trades.
01:07:52
>> There were things I liked about Roana. I mean he he did support freedom of speech
01:07:56
with the whole Twitter thing. >> You know what it was is that the Overton window shifted so much.
01:08:01
>> He supported him. >> Yeah. When I supported Roana, freedom of speech was a big issue and he was one of
01:08:06
the only Democrats to support that. He was also, I think, the only member of the progressive caucus to support a
01:08:11
diplomatic track for Ukraine, which I supported and I gave him credit for that. And yeah, I knew that he was in
01:08:17
favor of a wealth tax, but I thought that was just a very unserious proposal that, you know, it wasn't in play in any
01:08:22
way. Well, the Overton window shifted so much that now the wealth tax really is a
01:08:27
possibility. So, you know, things have changed. >> Here it is. Shout out to our boy Ro
01:08:33
Kana. Look at this. Right about now, Chimat's thinking about making a managing director offer here. I mean,
01:08:38
Ro, if it doesn't if you get booted out of office, you could become a managing
01:08:42
director >> at Alt Catholic. Statistically, like even if you had insider information,
01:08:47
making that much money is like very hard. >> Holy cow. Nancy Pelosi is going to
01:08:53
shiver Roana next for not giving her the uh giving her the inside track on whatever he's betting on. What did he
01:09:00
bet on? >> Well, look, any any, as we all know, any investor can have a good quarter or a
01:09:04
year. But to put up the kind of returns that Nancy Pelosi has done over decades is nothing short of miraculous.
01:09:10
>> It's generational. It's a generational run. Give her her flowers.
01:09:14
>> She's substantially better than Warren Buffett. >> I mean, Warren Buffett, Stan, Dr.
01:09:21
Miller, and Nancy Pelosi are three of the most accomplished investors of all time.
01:09:27
>> Whatever you did to the poor Buffett fans, Chimath, they are incredibly angry
01:09:33
at you for desecrating his legacy. >> I didn't desecrate his legacy. I pointed
01:09:38
out one unavoidable fact which is his returns are biodally distributed pre and postreg.
01:09:46
>> When you have to follow the rules of disclosure, everybody's returns got
01:09:50
kneecapped. When there was no disclosure rules, his returns were off the charts. That's
01:09:56
just a mathematical truism. Now, what's interesting to note is the reason why
01:10:00
Nancy Pelosy's returns are so consistently good is reggga FD does not apply to people in Congress.
01:10:06
That should be the takeaway. They can learn things. >> We got to stop them.
01:10:10
>> They can learn things in their committee meetings. In fact, there are situations
01:10:14
where things are disclosed and then they are trading in real time. >> Shout out to the skiff. Yeah, get out of
01:10:20
the skiff quick and get that trade in. >> So, I have enormous respect for Warren
01:10:24
Buffett and what he's done. It's it's he's he's the goat of goats,
01:10:27
>> but the returns postreg are they are just materially worse than they were
01:10:31
preregg. And that's >> what's he going to do with that cash position? And Jamat speaking of Buffett
01:10:35
they >> the market the market >> 300 billion sitting there >> the market is in a very complicated
01:10:40
moment right now if you look at historical indicators of value so if you look at Schiller as an indication of
01:10:47
value it's peaking if you look at the Buffett index it's peaking so there are things that when
01:10:56
you look at it look like all-time highs and the problem with that is you would say oh man But there's this weird
01:11:04
dispersion happening in the market. Dispersion means literally a few companies are hitting all-time highs. I
01:11:10
think it's like eight or nine and everybody else is not. So, it's a really
01:11:15
complicated moment. It's hard to understand what's going on, but he's got
01:11:18
a lot of cash. If he's sticking to his knitting, he's looking at the chiller
01:11:22
index and he's looking at his own indicator which shows all-time highs and he's waiting for a correction.
01:11:27
>> He's not really in charge anymore. Like Berkshire Hathaway is not Warren Buffett
01:11:30
anymore. Even though he's a big owner, he's not really doing it. >> But I mean, the fact that they're
01:11:35
sitting on that massive pile of cash says something that they're not putting
01:11:38
it to work in the market says they don't see an opportunity yet. Saxs, Travis,
01:11:43
I'm curious your takes. Uh either one of you can go in whichever order you want
01:11:47
on how is the market crushing it while we're in week seven of a war and we put
01:11:54
a hundred billion dollars or something into this military activity in Iran and the market is pricing it in shrugging it
01:12:03
off and we're hitting all-time high sex. I don't know if you're feel first.
01:12:07
>> Yeah. I mean, look, I think it's pretty straightforward, which is that in the
01:12:12
wake of the meeting in Islamabad that the market is feeling confident and pricing in that the war is going to get
01:12:21
resolved. The president also recently said that it's very close to being wrapped up. The military objectives are
01:12:28
close to being achieved and he's made it sound like it's going to be resolved.
01:12:34
Yes. a deal was not signed in Islamabad. I always thought that was an unrealistic
01:12:38
expectation that these two countries which are at war with each other and in fact have had hostile relations for
01:12:43
almost 50 years are going to resolve all their differences in 24 hours is not realistic. But the impression that the
01:12:50
market I think has and clearly is trading on this is that that war is going to be what Donald Trump said which
01:12:55
is an excursion and something that is on its way to being resolved that they've
01:13:01
made progress. And Jal, you're right. The whole week has just been in incredibly strong. I think by Tuesday,
01:13:08
the market had recovered all of its losses since the start of the war. I think it made a new high yesterday on
01:13:15
Wednesday and is making new highs, fresh highs today on Thursday. So, you just have to say that at the present time,
01:13:23
the market thinks, and I I would consider the stock market to be the ultimate prediction market, that this
01:13:28
war is on its way to being resolved. Just to qualify, I'm not speaking as a member of the administration. I'm not
01:13:35
saying that I know something. Okay? I'm just interpreting what the market is.
01:13:40
>> No clipping. >> I'm not representing anyone and I don't know anything different than what any of
01:13:47
you know. I'm just saying that I think this is what the market is clearly pricing in and I'm paying attention to
01:13:54
what the statements are of the president and vice president. And this Travis, you
01:13:59
and I were talking the other day while you were >> Yeah. >> slaughtering me in back gammon when you
01:14:04
won our eight-point match. You're almost caught up >> about the taco trade, not Trump always
01:14:11
chickens out. You have a theory about Trump always cares about optics. Unpack it for us, Travis.
01:14:17
>> Yeah. So while I was beating you back Ammon >> I sort of had a you know there's like
01:14:23
the in because Jay Kal asked me and the insight is is like and I think this maybe is just the more simple view of
01:14:30
things which is Trump's weather vein is the stock market like we see VA is up we
01:14:37
see the VIX is really high but you know what the S&P is trading in this band
01:14:42
that's actually fairly tight given the crazy [ __ ] that's going down and
01:14:46
everybody's nervous nervous, but actually he he moves in the policy space. He's he's he he does not let the
01:14:54
S&P go down too low. People also get the sort of the panicking thing now, which
01:14:59
is like he gets people nervous. He makes moves and then he comes back to sort of
01:15:04
reality and gets things done is practical and and probably the the better parts of what he he might be, you
01:15:11
know, what he does well and people are pricing that in. So there's there's all
01:15:15
the things Sax is saying about the nuances and the details, but the sort of super highlevel like I'm in low earth
01:15:23
orbit view is like the stock market is Trump's weather vein and he will go to
01:15:30
the place that makes the stock market come up and if he's go and and if it's
01:15:35
up and it's too high, he almost feels like it's too easy. So he makes it hard
01:15:38
on himself again and then he brings it back up and the traitors are getting used to it I think.
01:15:44
>> Yeah. It's like playing Chimoth with Alan Keading. It's just like how is this
01:15:48
guy solvent? He's literally playing every hand of poker. He's losing tons of
01:15:52
money and then all of a sudden by the end of the night he hits two big pots and he's got the nuts both times and he
01:15:57
pulls out of the stall. What's your take on the market today? Yeah, I mean I'll just do it again, but
01:16:05
I think the the Schiller PE Nick I sent it to you shows near all-time highs. Then the second is the Buffett index,
01:16:11
which is the sum of all uh US equities divided by GDP is also at all-time highs.
01:16:18
So this would generally mean that you need to be increasingly a little bit more riskoff. But then the opposite side
01:16:25
of that and I sent you a third one and this is why it's so confounding is you
01:16:28
have signals showing everything which is which typically doesn't happen and this
01:16:33
is this dispersion point where when you see this performance and it's up 5% in the first you know half of April
01:16:42
typically the market is up almost 32% on average for the rest of the year and we
01:16:46
were already up as Sax said you know 7 and a half% already >> trying to read this graph this is crazy
01:16:52
I don't even know what's going on This is just the this is just a dispersion.
01:16:55
But the the the idea of all of this is I think we're in a moment where you can
01:17:00
find a piece of data to underwrite your bias. And I think that's where there's a
01:17:07
lot of danger. I don't know for me personally I'm generally more risk off
01:17:11
right now and more importantly I'm waiting for these IPOs so that I can to be very honest with you delever and get
01:17:18
some chips off the table. I think that it is crucial that the SpaceX IPO get done ASAP and then I think it's even
01:17:27
more crucial that one of anthropic and OpenAI frontr run the other one and get out first
01:17:34
>> and the first two charts are the reasons why I it's fairly obvious to me what's
01:17:39
going on here. You you have uh these multiple trends going on at the same time. The reason people and traders are
01:17:45
valuing this and I think there is some smart money in the market right now is what you're seeing in terms of the
01:17:51
earnings potential of these companies as they deploy AI as they have unlimited intelligence and the top employees at
01:17:58
the top companies become 10 or 20 or 30 times more productive that's never been
01:18:03
seen before. Microsoft Office may have made you 30% more efficient. The internet may have made you 50% more
01:18:09
efficient but none of these things made you 10 times. And you had a really interesting point that you slipped in
01:18:14
earlier, Chimoth, which was nobody knows how to harness these things yet, right?
01:18:17
And it's producing slop. The truth is 10% of people do know how to harness it.
01:18:22
20% maybe. And I watch this in my own organizations and I watch it in 600 portfolio companies. The ones that do
01:18:27
deploy it correctly, they are running the table on the ones that are not. So the efficiency boom that we're going to
01:18:34
see at these companies, whether it's Meta or Uber or Airbnb, whoever executes
01:18:39
it properly, is going to be phenomenal. The earnings will be insane. >> Maybe I'm an idiot, but it has not
01:18:46
translated into a tsunami of more revenue and more profit for me yet. Maybe I'm the only one and maybe it's
01:18:53
everybody else but me, but I haven't seen it. >> I see it in a lot of companies. So I
01:18:58
think in private companies we have two companies as just two examples. Micro one, which is doing data, you know, dark
01:19:05
pools of data for these language models. And they have built technology that allows them to build data and allows
01:19:11
them to collect data to help the large language model companies grow. And they are on a tear by using this to identify
01:19:17
and find great people who can then contribute to these corpuses. And then we have one tax GPT that is making the
01:19:23
accountants, I think they have six or 7% of all accountants using their platform.
01:19:27
Jason, you agree? They're just ripping accountants. I hope you can agree with
01:19:31
me with the following statement. Small companies nibbling at the edges is not where these guys will build a multi-
01:19:39
trillion dollar market cap. >> I think we're we're both in alignment.
01:19:42
Big companies, dumb companies, slow to implement the technology. Startups. No, they aren't implementing new technology.
01:19:49
They're always the lagards when it comes to implementing new technology. >> The reason that they are slow is not
01:19:53
because they are dumb. The reason that they're slow is their business is much
01:19:56
more sophisticated and much more complicated than many other businesses. And what I'm saying is if you can't
01:20:02
prove that this works in the big time, prime time, big league use cases, it's a
01:20:09
toy. All right, Saxs, where where do you stand? Are you in the Jal position? The
01:20:14
startups are showing the way. They're being massively efficient. They're
01:20:16
growing revenues like we've never seen in the startup community before with less people. Or you in the Chimoth camp,
01:20:23
hey, big companies are not having a drop to the bottom line and they're smart. Or
01:20:26
both things are true. Where do you stand, Sax? be the uh adjudicator of this case.
01:20:30
>> I mean, honestly, I'm probably closer to you, Jal. I hate to say that. Um,
01:20:35
>> listen, >> because look, I think people are still figuring out how to drive business value
01:20:40
out of AI and change management is hard and the bigger the company, the harder it is. So, what's happening right now is
01:20:48
there are a lot of transformation projects at large enterprises that are failing. There's like a big Mackenzie
01:20:53
study on that. But if you look at activity from the bottom up, I think it's very interesting and it's becoming
01:20:59
more interesting. And over the last several months, obviously with coding reaching a new level, we're starting to
01:21:06
see very interesting things happening there. And obviously the revenue that's
01:21:10
now being generated from these coding models is, you know, again, it's exponential like we've never seen
01:21:14
before. So the ROI is finally there at the model layer. Meaning before, you know, people were
01:21:22
were saying that it's a bubble because >> you had all this massive capex at the
01:21:26
data center level and there was no ROI coming at the model layer. Now we have the ROI at the model layer and I guess
01:21:34
we're sort of questioning whether the ROI will be there at the application level. But any event, I think things are
01:21:40
progressing. I mean, look, I fundamentally I'm bullish on this whole thing. >> Okay. No, let me be clear. Hold on. Hold
01:21:45
on. >> Okay. Obviously, I'm bullish. I'm in this I'm in the space. I'm doing it.
01:21:49
you're in the arena. >> We have seen in every single wave in the mobile wave, we needed consumers to show
01:21:56
up at scale. So, we needed consumer experiences. And it was very obvious that there were these consumer
01:22:02
businesses that were going to be, if not already, incredibly, incredibly profitable. Google and Facebook were
01:22:08
profitable within the first few years. They never looked back. And all I'm trying to point out to you guys is there
01:22:15
is not one great example yet. If we believe enterprise is where all the money is and if we believe that's what's
01:22:22
going to underpin these trillion dollar valuations, just please somebody show me
01:22:26
a couple of good examples of scaled profits. >> Okay, fair enough. Travis, uh, final
01:22:32
word here on >> By the way, can I say one other thing? I think I think Chimath has a good point
01:22:36
about being riskoff right now because if you just look at valuation metrics, they
01:22:40
do seem to be quite high and I've seen other uh versions of those metrics as
01:22:44
well. So, look, it's very very hard to time the market. I don't try, but I
01:22:49
think you could make an argument just based purely on valuation levels, not events, that you want to adopt a more
01:22:56
conservative posture right now. I I think the bet you're making then, Travis, is are these valuations
01:23:04
so high right now on the standards that the efficiency that AI could bring to these
01:23:12
companies is uh not real enough to continue the growth from here. It's not a catalytic enough technology. And you
01:23:21
know, when you look at >> No, it's the opposite. No, all all these traditional companies have horrible
01:23:25
valuations. They've been crushed. So my point is if AI is real, the upside is
01:23:29
also real. All I'm saying is >> the details guys matter. It's very hard
01:23:35
to take a very complicated business and all of a sudden quote unquote transform it.
01:23:40
>> It's not as easy as it sounds. That word easy to say >> for sure. Travis, go ahead. Final word.
01:23:46
Final word from Travis. Couple things. First is when it comes to big companies, I think the big thing about let's call
01:23:51
it the the autonomous enterprise is change management. is the big boy. And and change management actually is about
01:23:59
all the people that already work there, the middle managers, the technocrats, the bureaucrats, the whatever, the
01:24:07
>> getting the change management going. The change management going there is it's a
01:24:12
human thing and it's very tricky with very complex processes, many of which are not even documented. And in theory,
01:24:20
it's just all going to happen real fast. But in practice, like that's hard. So
01:24:23
that that's part one. Part two, what I'm seeing with true tech companies,
01:24:28
>> real companies, public, I would say public like hardcore public companies. I
01:24:35
mean like you know founder, you know, folks that are really cranking public companies and tech companies that are
01:24:42
sort of upandcomers. I talked to CEOs across the board and they're like they are fired up about the
01:24:50
development the sort of the the productivity and deployment schedule and like the new features they were able to
01:24:59
roll out much much much faster because they've pivoted their culture sort of
01:25:03
very pro- AI development. Um, and I'm getting like almost at this point a consistent feedback from real founder
01:25:12
CEOs that like this stuff's real and it's it's it's not just hype. Now, there
01:25:18
are folks pushing, you know, selling their book that are like, "Oh, we're at
01:25:22
AGI and all this." Anybody who's worked with these agents and done the AI dev
01:25:29
stuff, there's a lot of good stuff, but they're not they're not that smart yet. They're
01:25:36
just not that smart. Anybody who's done like I got a side quest where I'm just
01:25:39
investing. I have agents investing and betting on Kali and Paulie and you know these other places and it's silly how
01:25:49
dumb the agents are. Even their best agents to be honest. >> Yeah. >> The agents are what you you have to be
01:25:56
human in the loop with the agent. The agent has no taste. The agent can do repetitive tasks. the agent is not going
01:26:02
to do something novel and they quickly can get lost in the forest. >> We had to spend a lot of time we had to
01:26:07
spend a lot of time with our investing agents getting them on board with the idea that if you want to make money
01:26:15
investing, you can't be on both sides of the same bet. >> Yeah. >> You know what I mean?
01:26:22
>> There it is. >> It's just like that. That's where we're
01:26:25
at. It's the AGI is not here and it's kind of silly for folks, I think, to
01:26:28
sort of suggest it is. >> Absolutely. Hey guys, we got a wrap. Travis, you didn't get to play uh the
01:26:35
price is wrong. I have two more. You guys want to do a bonus round of the Price is Wrong?
01:26:39
>> Yeah, do it. Do it. See if See if Travis gets it. >> Okay, two more. But you guys can steal.
01:26:44
You guys can steal here. Let me get my back. I got to give me the music. Travis, you're going to get to do the
01:26:49
bonus round here. >> Let's go. >> Hello everybody. We got Travis Kalanick.
01:26:53
He's here. He is a professional water sports player from Tallahassee, Florida.
01:26:59
Uh, how is it down there in Tallahass, Florida? I understand you do a little handy work uh to pay the bills, but you
01:27:04
spend your most of your time out there on the lakes and the oceans doing water sports. Yeah, you like the water sports.
01:27:09
>> I love the water sports. I I doing water ski lessons on the weekends. Anybody's
01:27:14
interested? >> All right, I'll be out there uh at Tallahassee, Florida. Okay, now here we
01:27:19
go. It's your job to figure out the price is wrong. The price is wrong. Here we go.
01:27:27
>> It's so funny. The >> price is wrong here. Here we go. This is
01:27:30
your bonus round. >> Yeah. >> All right. This startup raised $900 million
01:27:37
>> at a $9 billion valuation. This is a big one. >> This is a big one. Before dissolving in
01:27:43
2018 >> and their famously deep voiced founder CEO >> is currently serving an 11-year sentence
01:27:51
in a federal prison. >> Yes. >> Can you name that mispriced startup? You
01:27:56
name the mispriced story. >> It rhymes withinos. >> Okay, you're you're closing in here. Be
01:28:05
careful. You have to formulate a question. You could lose twist the >> final answer. Theronos.
01:28:09
>> Ferrronos. Okay, very good. 100 points. You're on the board. And here is your
01:28:13
next one. This is your next one. >> Okay, this is the overtime. All three players get to play this one. Whoever
01:28:21
zooms in first and says it, this is your final. That's the mispriced startup here. The
01:28:27
price is wrong on this startup. Here we go. >> Come on, you can do this. Come on,
01:28:30
Jimoth. >> You got this now. Here we go. >> You can do this. >> This short form mobile first streaming
01:28:36
platform raised 1.7 billion >> from top investors. Jeffrey has got the the the the uh what is it?
01:28:43
>> You got to YELL IT OUT. TOP INVESTORS ACROSS Silicon Valley and shut down in
01:28:48
just 6 months. >> Quicky quickie >> quickie. Wrong. David Sax wrong company. JEFFREY JACKSONBY
01:28:59
WINS. >> YES. >> There's your champion everybody. Let's tell him what he won. He uh apparently
01:29:06
he's won a Pier in downtown uh East Austin. A Pier in East Austin by the airport. God knows
01:29:15
what shenanigans are going down there. I think if you need methamphetamine or a date, you're going to have an easy time
01:29:20
there. Chimoth. Okay. Oh, hey, Chimath. Um, I'm getting hammered with people who
01:29:23
want to come to the soldout liquidity. 500 was the cap you put on it. You've
01:29:27
been [ __ ] around as dictator. Can we add 50 seats? >> I think we can add 50 or 100. I don't
01:29:33
know. Lisa, can we add 100? >> Get a Simocast room going. All right, we'll see you all. Oh, and the All-In
01:29:39
Summit tickets are on sale. Go to allin.com. Uh, and yeah, don't get shut out of the summit, folks, because this
01:29:44
happens every time. You guys email me two months out, the tickets have been sold out for four months. So, get your
01:29:49
tickets now uh at allin.com. Another amazing episode and we'll see you next time. Bye-bye.
01:29:56
>> Bye-bye. >> We'll let your winners ride. >> Rain and we open sourced it to the fans and
01:30:08
they've just gone crazy with it. Love you. Queen of >> your besties are gone.
01:30:21
>> That is my dog taking your driveways. >> Oh man, my appetasher will meet me at
01:30:29
>> We should all just get a room and just have one big huge orgy cuz they're all
01:30:32
just useless. It's like this like sexual tension that they just need to release
01:30:35
somehow. Wet your feet. >> We need to get merch. I'm going all in.