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Peter was the person who told me this really pithy quote in a world that's changing so
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quickly the biggest risk you can take is not taking any risk this guy is a tough
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nut to try to sort of explain changed money with PayPal was the first outside investor in Facebook uh back paler which
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is I believe they helped find Osama Bin Laden almost certainly the most successful technology investor in the
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world I don't think the future is fixed I think what matters is a question of agency what I think works really well
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are sort of oneof A- kind companies how do you get from Z to one what great business is nobody building tell me
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something that's true that nobody agrees with you on all right Peter welcome back it's
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good to see [Applause] you um you don't do this too often uh so we do appreciate it U but when you do do it
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you're always super candid and appreciate that as well you fit right in here um you're sitting this year's
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political cycle out right politics well no I mean I think this is a question we all have which is you were very active
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um you bet on Jed in a major way um he delivered today it was a very impressive uh discussion why aren't you involved
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this this cycle where it's very confounding to us because these are your guys man how much time do we have
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supposed talk about this for two hours or something um um I I don't know look I have a lot of conflicted thoughts on it
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uh I I am still very strongly prot Trump Pro uh Pro JD I've decided not to uh donate any money politically but uh I'm
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supporting them in every other way uh every other way possible uh I you know uh obviously uh you know I think uh I
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think there's my my pessimistic thought is that uh Trump is is going to win and probably will win by a big margin uh
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he'll do better than the last time and it'll still be really disappointing because you know the elections are
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always a relative Choice and then once someone's president it's an absolute and they you get evaluated you know do you
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like Trump or Harris better and that seems there seem to be a lot of reasons you know and that one would be more
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anti-h haris than anti-trump let's again no one's Pro any of these people it's all it's all negative right um and uh
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but then after after they win there will be a lot of buyers remorse and disappointment that's sort of that's
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sort of the arc that I I see of what's going to happen and it's it's somewhat under motivating um I don't know just to
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describe describe it I I think you know I think it's I think the odds are slightly in favor of trump but it's
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basically 5050 um my one contrarian view on the election is that it's not going to be
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close un you know most presidential elections aren't and uh you know one side just breaks you know 20 2016 2020
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we super close but two-thirds of the elections aren't and you know you can't always line things up and figure it out
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I think either the you know the comma bubble will burst or you know maybe maybe the Trump voters get really
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demotivated and don't show up but I think you know one side is is simply going to collapse in the next uh in the
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next two months and then you know if you want to get involved you know with all the headaches that come with being
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involved if it makes a difference counterfactually and if it's a really close election everything makes a
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difference if it's if it's not even close I don't think it makes much of a difference if if it is going to be close
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by the way if it's if it's like going to be a razor thin close election then um then I'm pretty sure KLA will win
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because um because they will cheat they will fortify it they will steal the ballots and so so uh so you know if we
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if we can if we can if we can and so then in the event in the event that it's close I don't want to be involved in the
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event that it's not close I don't need to be involved and so that's sort of that's sort of a straightforward analis
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right there jumping off point much cheating on a percentage basis do you think happens every year how much and do
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you think Trump actually careful with the verb so you know um cheating stealing that implies something happened
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the dark night I think the verb you're allowed to use is fortify okay yeah we don't want get canell on YouTube ballot
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harvesting I mean it was you know it's all sort of there were all these rule changes it was sort of done in plain
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daylight and uh um but yeah I think I think our elections are not they're not perfectly clean otherwise we could
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examine it we could have vigorous debate about it well what would you change then
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what what should change cuz we all want everybody's votes to count we want it to
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be clean um I'm I'm talking about the audience here I know at a minimum you you'd run them you'd try to run
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elections the same way you do it in every other Western democracy you have one day voting you have practically no
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absentee ballots um you have um and um and it's you know it's it's it's it's it's one day where everything happens
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it's not this uh two two-month elongated process that's what the way you do it in
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every other country you you'd have you'd have some somewhat stronger voter ID and
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you know make sure that you know the people who are voting have a right to vote um make it a national holiday
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that's that's basically that's basically what you do in every other Western democracy and it's it's it and it used
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to be much more like that in the US I mean it's it's it's meaningfully decayed over the last 20 30 years you 20 30
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years ago 30 40 years ago you you got the results on the day of of the vote and that sort of stopped happening a
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while ago what would make you not disappointed so Trump gets elected how do you what's your counternarrative on
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you know where a year or two years past the election Trump is president what what makes you say I'm surprisingly not
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disappointed what takes place man it's um you know it's I I I think there are some extremely difficult problems that
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it's it's it's really hard to know how how to how how to solve them I wouldn't know what to do but uh we have you know
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we have an incre incredibly big deficit and uh and yeah if you can if you can find some way to meaningfully reduce the
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deficit with no tax hikes and without without GDP contraction well you you would do it if you got a lot of GDP
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growth maybe right but um if you could if you could meaningfully reduce the deficit with with um with no with no tax
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hikes that would be that would be very impressive you know I I think we're sort of sleepwalking into Armageddon with uh
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you know the Ukraine and um the conflict and Gau are just sort of the warm-ups to
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the China Taiwan war and uh and so if uh if if Trump can find a way to head that
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off that would be incredible if they don't go to war in four years that that would be that would be better than I
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would expect possibly in relation to Taiwan if Trump called you and asked should we defend it or not in this acute
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case would you advise to let Taiwan be taken by China in order to avoid a nuclear
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Holocaust in World War II or would you believe that we should defend it and defend free countries like that well I I
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I think um I think you're probably not supposed to say no no no if you no if you um you I I
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I think look I think there's so many ways our our policies are messed up but probably you know the one the one thing
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that's roughly correct on the Taiwan policy is that uh uh we don't tell China what we're going to do um and what we
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tell them is we don't know what we'll do and we'll figure it out when you do it which is probably has the virtue of
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being correct and uh and then I think if you had yeah if you had a red line at quoy Matsu the the island you know five
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miles off the coast of China that's unbelievable if you um if you um if you say we want some guard rails and we
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won't defend Taiwan then they'd get invaded right away so I think I think I think policy of um not say policy is and
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maybe not even having a policy you know in some ways is relatively the best I I I think anything anything anything
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precise you say that's going to just lead to war right away but what do you believe I um worth defending or not
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worth starting the conflict democracy in this tiny Island worth going to war over
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or not according to Peter teal it's um it's not worth uh it's not worth World War III
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um and I I still think it's it's uh quite catastrophic if it uh if it gets taken over by the Communists how does
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the world those can both be true how does the world divide if we end up in a heightened
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escalation is China Russia Iran friends is that an Alli is that an axis that forms you know think out the next decade
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in kind of your base case and I don't know what happens how the world I don't know what happens militarily if there's
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a China Taiwan Invasion I mean may maybe we roll over maybe it escalates you know all the way to
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nuclear war probably it's it's you know some very messy in between thing sort of
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like what what you have in in the Ukraine uh what what I think happens economically is very straight forward I
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think uh I think basically um you know you have with Russia and Germany you had one northstream Pipeline and we have the
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equivalent of a 100 pipelines between the US and China and they they all blow up you I I met the tick tock CEO about
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about a year ago and um you know I not maybe I wouldn't have said this now but what I told him and I felt was very
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honest advice was you know you don't need to worry about the us we're never going to do anything about Tik Tok we're
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too incompetent um but um but but if I were in your place I would still get the business out of China I would get the
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computers out the people out I'd completely decouple it from bike Dan because um Tik Tok will be banned 24
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hours after the Taiwan invasion and if you think there's a 50/50 chance this happens and that will destroy you
00:10:04
know 100% of the value of the Tik Tok franchise what was his reaction um you know uh he said that they had
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done a lot of simulations and the bunch of companies in World War I and World War II that managed to sell things to
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both sides he doesn't seem so bright to me do you think he's um he no he donly what your take on him he he didn't
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disagree with my frame and so I always I always find that flattering if someone basically framing so he seemed he seemed
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perfectly bright to me even though lot of bright people I saw you give this I saw you give a talk last
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summer with Barry Weiss and you talked about this decoupling should be happening you weren't saying should you
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were recommending that every industry leader consider decoupling from China I think your comment was it's like picking
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up nickels in front of a freight train you remember saying that the well I I I think like it's it's there a lot of
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different there lot of different ways in which businesses are coupled to China that were investors that tried investing
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there are people who tried to compete within China they people who built factories in China for export um and um
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you know there different parts of that that worked to um to to varying degrees but uh but yeah
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my um my I I certainly would not try to um to invest in a company that competed domestically inside China I think that's
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that's virtually impossible um I think it's probably quite tricky even to invest in Chinese Chinese businesses um
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uh and uh and then and then there is there is sort of this model of you know building factories in China uh for uh
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for export uh to the west and um it was it was a very big Arbitrage these things
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do work you know I me I visited the foxcon factory nine years ago and it's you know you have people get paid a
00:11:59
dollar and a half $2 an hour and they work 12 hours a day and they live in a dorm room with two bunk beds where uh
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you know you get eight people in the dorm room someone's sleeping in your bed while you're working and vice versa and
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uh and you sort of realize they're really far behind us or they're really far ahead of us and either way you know
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it's it's not that straightforward to just uh shift the um the iPhone factories to the United States um so I I
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sort of understand you know why a lot of businesses ended up there and why why this is the the arrangement that we have
00:12:32
but uh but yeah my my my intuition for you know what is going to happen without making any normative judgments at all is
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it is going to decouple how inflationary will that be it presumably is it's presumably
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pretty inflationary yeah that that's that's probably the you know I I don't know it's and you'd have to sort of look
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at you know what the in elasticities of all these goods are so that's true what's the policy re probably not that
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it may not be as inflationary as people think because um people always model trade in terms of uh pairwise in terms
00:13:09
of two countries so if you literally have to move the people back to the US that's that's insanely expensive I don't
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you know I don't know how much would cost people to build an iPhone you just you just well I think
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India is sort of too messed up but you shift it to like Vietnam Mexico there are you know there there 5 billion
00:13:26
people living in countries where the incomes are lower than China and so um and so you know probably the um the
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negative sum trade policy we should have with China is um you know we should just
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shift it to other countries which is a little bit bad for the US extremely bad for China and let's say really good for
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Vietnam that's kind of um and that's kind of the the negative sum policy um that uh that's going to manifest as this
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sort of uh decoupling happens let's talk about avoiding it for a second here Trump seems to be extremely good with
00:14:02
dictators and authoritarians uh Kim Jong-un seems like a big fan I mean that in like as a compliment as a superpower
00:14:08
right like he doesn't have a problem talking to them he connects with them and they seem to like him so what would
00:14:16
be the path to him working with XI to avoid this is there a path to avoid this because we were sitting here last year
00:14:23
talking about this and it just seems mindboggling that if everybody agrees that this is going to happen happen that
00:14:30
we can't figure out a way to make it not happen well it's it's not just up to us
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so um yeah there's there's and so I don't know it's it's obviously somewhat of a black box we don't exactly we we I
00:14:46
I I feel we just have no clue what people in in in China think but um but I I I think it's sort of the the sense of
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history is is strongly the sort of thus trap idea that you have a rising power against an existing power and it tends
00:15:02
to you know it's it's willham mean Germany versus Britain before World War I and you know it's um you know Athens
00:15:10
against Sparta the rising power against the existing power you you tend to um get conflict that's that's probably what
00:15:18
deep down I think is is really really far in the China DNA so so I'd say maybe maybe the first I don't know the meta
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version would be the first the first step avoiding the conflict would be we have to we have to start by admitting
00:15:32
that China believes the conflict's happening right and then if if if if people like you are constantly saying um
00:15:40
well we just need to have some happy talk right um that's that is a recipe that's a recipe for world I'm not
00:15:46
advocating happy Jo necessarily um I'm I get accused of being a bit more hawkish obviously obviously um in in
00:15:54
general you know I don't know I I'm not I'm not sure Trump should talked to the North Korean dictator but yeah in
00:16:01
general um it's probably a good idea to to try to um talk to people even if they're they're really bad people most
00:16:08
of the time and uh and uh you know it's it's certainly um a very odd Dynamic with the US and and uh and Russia at
00:16:15
this point where um I I think it is impossible for anybody in the Biden Administration even to have a back
00:16:22
Channel communication with uh with people like I I don't think Tucker Carlson counts as an emissary from the
00:16:28
Biden Administration and if anybody gets tuckered or I don't know what the verb is who talks you know that's that's that
00:16:35
seems that seems worse than the alternative can we um talk about technology um you have this you you you
00:16:44
have a speech where you talk about some of the misguided things we've done in the past in the name of technology and
00:16:49
use like big data as an example of that um what is AI um oh man that's that's sort of a
00:16:59
big question I um it's um yeah I I always I I always had this riff where I I don't like the
00:17:09
buzzwords and um you know machine learning learning Big Data cloud computing you know I'm going to build a
00:17:16
mobile app bring the cloud to um you know if you have sort of a concatenation of buzzwords um you know my my first
00:17:23
instinct is just to run away as fast as possible some really bad group think and
00:17:29
um and for many years I I my bias is probably that AI was one of the worst of all these buzzword it meant you know the
00:17:36
next generation of computers the last generation of computers you know anything in between so it's meant all
00:17:41
these all these very different things if we if we roll the clock back to the 2010s you know the um probably the AI to
00:17:50
the extent you concretize I would say the AI debate was maybe framed by by two the two books the two canonical books
00:17:57
that framed it was there was the the Bostrom book super intelligence 2014 where AI was going to be this super
00:18:03
human super duper intelligent um thing and then um the anti- um Boston book was the Kaiu Lee 2018 AI superpowers you can
00:18:13
think of the CCP rebuttal to Bostrom where basically AI was going to be surveillance Tech face recognition and
00:18:20
China was going to win because they had no qualms about uh applying this technology and um and then um if we now
00:18:28
think about what actually happened let's say with the llms and and chat GPT it was really neither of those two um and
00:18:35
it was this in between thing which was actually what people would have defined AI as for the previous 60 or 70 years
00:18:42
which is passing the touring test which is you know this the somewhat fuzzy line
00:18:46
it's a computer that can pretend to be a human um or that can fool you into thinking it's a human and um and uh you
00:18:54
know even with the fuzziness of that line you could say that pre chat GPT wasn't passed and then chat GPT passed
00:19:02
it and that seems that seems very very significant um and um and then obviously leads to all these questions what does
00:19:10
it mean you know is it going to is it going to complement people is it going to substitute for people you know what
00:19:16
does it do to the labor market do you get paid more paid less you know so there all these all these questions but
00:19:21
uh it um it seems extremely it seems extremely important um and um and it's probably you know certainly the
00:19:32
the big picture questions which I think Silicon Valley is always very bad at talking about is like you know what does
00:19:37
it mean to be a human being right um sort of the I don't know the stupid 2022 answer would be that humans differ from
00:19:43
all the other animals because we we're good at languages if you're a three-year-old or an 80-year old you
00:19:48
speak you communicate we tell each other stories this this this is what makes us
00:19:53
different and so um so yeah I think there's something about it that's uh incredibly important and and very
00:19:59
disorienting you know the question I always have as a I know the narrower question I have as an investor is sort
00:20:03
of how do you make money with this stuff and um how do you make money I it's um it's pretty confusing and I think I I
00:20:13
don't know this is always where I'm anchored on the late 90s is sort of the formative period for me but uh I I I I
00:20:19
keep thinking that uh AI in 20123 2024 is like the internet in 1999 um it's it's really big it's going
00:20:29
to be very important it's going to transform the world not you know in 6 months but in 20 years and then um there
00:20:37
are probably all kinds of incredibly uh catastrophic approximations where you know uh what businesses are going to
00:20:45
make money you know who's going to have the Monopoly who's going to have pricing
00:20:48
power is um you know is is is is super unclear um probably you know one one layer deeper of analysis you know if
00:20:56
attention is all you need and if you're you're not post economic you need to pay
00:21:00
attention to who's making money and in AI it's basically one company is making Nvidia is making over 100% of the
00:21:07
profits everybody else is collectively losing money and so um and so there's sort of a you have to do some sort of
00:21:13
you should do you should try to do some sort of analysis you do you go long Nvidia do you go short you know is it um
00:21:20
you know My Monopoly question is it a is it a really durable Monopoly you know and and then I it's it's hard for me to
00:21:27
know because I'm in Silicon Valley and I haven't done anything we haven't done anything in semiconductors for a long
00:21:31
time so I have no clue do you um if you let's debz word the word Ai and say it's
00:21:35
a bunch of process automation let's just say that's version 0.1 where brains that
00:21:40
are roughly the equivalent of a teenager can do a lot of manual stuff what do you
00:21:45
have you thought about what it means for you know 8 billion people in the world if there's an extra billion that
00:21:52
necessarily couldn't work or like whether that in political or economic terms I don't know the the the
00:22:01
um I I I don't know if this is the same but this is you know the the history of 2050 years the Industrial Revolution
00:22:09
what was that it you know it adds to GDP it frees people up to do more more productive things um you know maybe
00:22:17
there's you know there was yeah there was a I know there was a lite critique in the 19th century of the factories
00:22:23
that people were going to be unemployed and wouldn't have anything to do because
00:22:25
the machines would replace the people you know maybe the Lites are right this time around I'm I'm I'm probably I'm
00:22:32
probably pretty pretty skeptical of it but uh but yeah it's it's it's extremely confusing you know uh where where the
00:22:39
gains and and losses are there there probably are um you know there there's always sort of a hobby you can always
00:22:47
just use it on your hobby horses so I don't know the you know my anti- Hollywood or anti- university hobby
00:22:52
horse is that uh it seems to me that you know the um the AI is quite good at the
00:22:57
woke stuff and um it'll and and so you know if you want to if you want to be a successful
00:23:03
actor you should be maybe a little bit racist or a little bit sexist or just really funny uh and you won't have any
00:23:09
risk of the AI replacing you everybody else will get everybody else will get replaced and then probably
00:23:17
I don't know um I don't know uh Claudine gay the plagiarizing Harvard University
00:23:23
president um you know the AI is going to you know the AI will produce end amounts
00:23:29
of um of these sort of I don't even know what to call them uh woke um papers and
00:23:36
um they they were all already sort of plagiarizing one another they were because they were always saying the same
00:23:41
thing over and over again they were using their own version of is just going to flood the Zone with with even more of
00:23:46
that and that you know I don't know obviously they've been able to do it for a long time and no one's noticed but uh
00:23:52
but I think I think at this point um that it it doesn't seem promising from a um compet compe Point obviously my hobby
00:24:00
horses so I'm I'm just maybe just wishful thinking on my part what are the areas of technology that um you're
00:24:06
curious about that your mind is like wow this is really I have to learn more pay
00:24:11
attention you know I'm always I always think uh you you want to instantiate it more in companies than than um things or
00:24:21
you know you ask sort of like where is where is innovation happening you um you know it it it
00:24:29
in our society it doesn't have to be this way but it's it's um it's mostly in in um in a certain subset of relatively
00:24:37
small companies where we have these relatively small teams of people that are really pushing the envelope and
00:24:43
that's that's sort of you know that that's sort of what I find you know inspiring about about venture capital
00:24:50
and then you and then obviously you don't just want Innovation you also want it to sort it to it to um to translate
00:24:57
into into good businesses but that's that's where it happens it it somehow it doesn't happen in universities it
00:25:03
doesn't happen in government you know there was a time it did I mean you know somehow in this very very weird
00:25:09
different country that was the United States in the 1940s you had you know somehow the Army organized the
00:25:15
scientists and got them to produce a nuclear bomb in Los Alamos in three and a half years and you know the way the
00:25:20
New York Times editorialized after that was you know it's it's you know it was sort of an anti-libertarian write up it
00:25:26
was you know there were um you know obvious Maybe you'd left the Primadonna scientists to their own would have taken
00:25:31
them 50 years to build a bomb and uh the Army could just tell them what to do and
00:25:35
this will should silence anybody who doesn't believe the government can do things and uh they don't write
00:25:40
editorials like that in the New York Times anymore but I think um yeah but I think that's sort of that that's that's
00:25:47
sort of where where when where when should look I think it I think I think a crazy amount of it still happens in the
00:25:52
United States you know there sort of you know we've we've you know episodically tried to all this investing we probably
00:25:59
tried to do tooo much investing in Europe over the years it's always sort of a junk it sort of it's a nice place
00:26:04
to go on vacation as an investor and um and it's it's it is it is very it's it's
00:26:10
very and I don't have a great explanation but it's a very strange thing that uh so much of it is still the
00:26:17
US is somehow still the country where people do new things Peter is that is that a team organizational social
00:26:24
evolutionary problem in the United States what is the root cause of the failure to innovate in the United States
00:26:30
relative to the expectation going back 70 years 50 years Etc from you know the the rocket shift and we're all going to
00:26:39
live yeah well this is always this is always this always one of the big picture and claims I have that we've
00:26:44
been in an era of relative Tech stagnation the last 40 or 50 years or the you know the tagline um that we
00:26:51
had they promis flying cars all we got was 140 characters which is not an anti- Twitter antix commentary even though the
00:26:58
the way the way I used to always qualify it was that uh at least you know at least it was at least a good company you
00:27:04
had you know 10,000 people who didn't have to do very much work and could just smoke marijuana all day very similar to
00:27:10
Europe and so I I think that actually that part actually did get corrected but um um but the um very but I think I I
00:27:19
think um like what went wrong because you you point out that it's not a technology Trend tracker that you think
00:27:24
about it's about people and teams that innovate and drive to outcomes B on their view of the world and and what's
00:27:30
gone wrong with our view of the world and our ability to organize to achieve the seemingly unachievable with very
00:27:37
rare exceptions obviously elon's here later but yeah you know it's it's it's it's overdetermined um the um the the
00:27:44
the rough frame I always have and again it's not that there's been no innovation
00:27:48
there's been there's been a decent amount of innovation in the world of bits computers internet mobile internet
00:27:54
you know crypto AI so there sort of all these um world of bits uh places where there was you know a sign significant
00:28:04
but sort of somehow narrow cone of progress but it was everything having to do with atams that was slow this was
00:28:09
already the case When I Was An undergraduate at Stanford in the late 80s in retrospect any applied
00:28:14
engineering field was a bad idea it was a bad idea to become a chemical engineer
00:28:18
you know a mechanical engineer aeroastro was terrible nuclear engineering everyone KN I mean I no one did that you
00:28:25
know and um and and there's something about yeah the world of Adams that um you know from a Libertarian point of
00:28:32
view you'd say got regulated to death um there probably uh you know there's there's some there's some set of
00:28:39
arguments where um the lwh hanging fruit got picked and got harder to find new things to do although I always I always
00:28:46
think that was just a sort of baby boomer excuse for for covering up for the the failures of that generation um
00:28:53
and um and then um and then I think but I think maybe maybe um maybe a very big picture part of it was that uh at some
00:29:03
point in the 20th century the idea got took hold that not all forms of technological progress were simply good
00:29:12
and simply for the better and there's you know there's something about the two world wars and the you know the
00:29:17
development of nuclear weapons that uh that that gradually pushed people into this this more uh risk ofers society and
00:29:23
it didn't happen overnight but um you know maybe a quarter century you know after the nuclear bomb it's
00:29:29
like by Woodstock it happened by Woodstock it happened yeah cuz that was the same summer we landed on the moon
00:29:35
yeah Woodstock was three weeks after that yeah that's that was the Tipping Point progress stopped in the took over
00:29:41
sex can we shift gears just to the domestic economy what what do you think's happening in the domestic
00:29:45
economy and just say backdrop we've had something like 14 straight months of downward revisions to jobs the revisions
00:29:52
are supposed to be completely random but somehow they've all been down um prob doesn't mean anything um
00:29:58
there's also what's happening with with the yield curve but I'll stop there what
00:30:02
what's your take on what's happening in the economy um you know it's it's man it's always hard hard to know
00:30:12
exactly yeah I I I suspect we're close to a recession i' I've probably thought this for a while uh it's it's being
00:30:20
stopped by really big government spending so um you know in May of 2023 the projection for the deficit in 20
00:30:30
fiscal year 24 which is October of 23 to September 24 was something like 1.5 1.6
00:30:37
trillion um the deficit is going to come in about 400 billion higher and so um which you know was a sort of a crazy
00:30:44
deficit was projected and it was way off and then somehow um and so if if we had
00:30:50
not found another 400 billion um to add to you know this this crazy deficit at the top of the economics cycle you know
00:30:59
you're supposed to you're supposed to increase deficits in a recession not at the not at the top of the cycle um you
00:31:05
know think things would be probably very shaky there's yeah there's there's there's there's some way where um we
00:31:11
yeah we have a um too much debt not enough sustainable growth um you know again I always think it comes back to
00:31:19
you know Tech Innovation there probably are other ways to grow an economy without Tech um or intensive progress um
00:31:28
but I think they we we we don't have those don't seem to be on offer and then that's that's where it's very deeply
00:31:34
stuck if you if you wind back over the last 50 years you there's always a question why did people not realize that
00:31:39
this Tech stagnation had happened sooner and I think there were two one-time things people could do economically that
00:31:45
had nothing to do with science or tech there was a 1980s Reagan Thatcher move which was to massively cut taxes
00:31:53
deregulate allow lots of companies to merge and combine and and it was sort of a one-time way to make the economy a lot
00:32:02
bigger even though it had it was not something that really had the sort of compounding effect so it led to one
00:32:08
great decade and then there was um you know and that was sort of the right-wing capitalist move and then um in the 90s
00:32:15
there was sort of a Clinton Blair um Center left thing which was sort of Leaning into globalization and there was
00:32:21
a giant Global Arbitrage you could do which also had you know a lot of negative externalities that came with it
00:32:27
but um it sort of was a one-time move I think both of those are are not on offer
00:32:33
you know I don't necessarily think you should undo globalization I don't think you should raise taxes like crazy but um
00:32:39
you can't you can't do more globalization or more tax cuts here that's not going to be the win and and
00:32:45
so I I think you have to somehow get back to the future um we have time for a couple more questions you um I think saw
00:32:52
that maybe this ivy league institutions maybe weren't producing the best and brightest or weren't exactly um hitting
00:32:59
their mandate um and you created the teal fellows and you've been doing that for a while and I meet them all because
00:33:04
they all have crazy ideas and they pitch me for Angel investment what have you learned getting people to quit school
00:33:10
giving them $100,000 and then how many parents call you and get really upset that their kids are quitting
00:33:16
school uh it's well I I don't know I've I've I've learned a lot I mean it's it's um
00:33:30
I don't know I I I I think I think the universities are far worse than I even thought when I started this thing um I
00:33:37
think um yeah it's um you know I I I I did this uh I did this debate at Yale last week um you know resolved higher
00:33:46
education's a bubble and um and uh you sort of go through all the different numbers and um the and then you know and
00:33:57
again I I was ful to word it in such a way that I I didn't have to you know and then people kept saying well what's your
00:34:01
alternative what should people do instead and I said nope that's not was not the debate I'm not you know I'm not
00:34:06
your guidance counselor I'm not your career counselor I I don't know how to solve your problems but um if
00:34:11
something's a bubble you know the first thing you should do is probably not you know lean into it in too crazy a way and
00:34:19
you know the student debt was 300 billion in 2000 it's uh it's basically uh close to two trillion at this point
00:34:25
so it's just been the sort of runaway um this runaway process and um and then if
00:34:30
you look at it by cohort if you graduated from college in 1997 12 years later um people still had student debt
00:34:39
but most of the people had sort of paid it down um but the first by 2009 we started the teal Fellowship in 2010 and
00:34:47
it you know it felt uh two by 2009 was the first cohort where this really stopped if you take the people graduated
00:34:54
from college in 2009 and you fast for forward 12 years to 2021 the median person had more student
00:35:04
debt 12 years later than they graduated with because it's actually just it's just compounding faster and it was you
00:35:11
know partially partially the global financial crisis the people had less well-paying jobs they stayed in college
00:35:17
longer um and the colleges they it's just sort of been this background thing where it's it's decayed in these in
00:35:25
these really significant ways and um you know again I I think it's on some level
00:35:30
um there are sort of a lot of um debates in our society that are probably dominated by sort of a boomer narrative
00:35:37
and maybe the Baby Boomers were the last generation where College really worked and you know they think well you know I
00:35:43
I worked my way through college and why can't why can't um why can't you know an
00:35:48
18-year-old going to college do that today and um and so I I I think the bubble will will will be done once the
00:35:56
Boomers have exited stage left but does the government to it would be good if we
00:36:00
figured something out before then you know does does the government need to stop underwriting the loans because it's
00:36:06
the lending I think the 90 plus perc of the the the capital in the student loan programs is funded by federal uh Federal
00:36:14
the federal government and there's if you're an accredited University you can take out a loan and go to it and
00:36:20
accreditation in in a in a in a rigid kind of free market system you would have an underwriter that says are you
00:36:27
going to be able to Gra graduate make enough money to pay your loan off is this a good school are you going to get
00:36:31
a good job and then the market would figure out whether or not to give you a loan would figure out what the rate
00:36:34
should be and so on but in this case the government simply provides Capital to support all this and as a result
00:36:39
everything's gotten more expensive and the rigidity in the system that basically qualifies schools and the
00:36:46
quality of those schools relative to the earning potential over time is gone we need the government to get out of
00:36:51
student loan business yeah but look the the place where I'm I I know I'm sort of
00:36:56
some ways I'm rightwing some ways I'm left wing on this so the place where I'm leftwing is I do think a lot of the
00:37:01
students got ripped off and uh and so I think there should be some kind of broad
00:37:06
um debt forgiveness at this point um who should pick up the T but it's not just the taxpayers it's the universities and
00:37:14
it's the the the the bond holders got it the bond take a little bit out of those
00:37:18
ends the universities and um and then obviously if you just make it the taxpayers then um then you'll just then
00:37:26
the universities can just charge more and more no incentive to reform what whatsoever but uh had me you know it's
00:37:33
in 2005 uh it was under Bush 43 that the bankruptcy laws got Rewritten in the US
00:37:39
where you cannot discharge student debt even if you go bankrupt and if you haven't paid it off by the time you're
00:37:44
65 your Social Security wages checks will be garnished it's crazy so um so you know I I I I do think um but should
00:37:52
we stop lending should the federal government get out of the the student lending business well if if if we if we
00:37:58
say that uh if we if we start if we start with my place where you know a lot of the student debt should be forgiven
00:38:05
and then and then and then reform the then we'll see how many people are willing to lend you know how how much
00:38:11
how many of the colleges can um pay for all the student what's your sense if if it was a totally free market system how
00:38:17
many colleges would shut down because they wouldn't be able to S there's no tuition
00:38:24
support it it probably would be a lot smaller it it might it might you might not have to shut them down because
00:38:33
there's you know a lot of them have gotten extremely a blow it's like Bal Mall's cost disease where you know I
00:38:38
don't know if I have no idea like a place like UCLA it probably has you know twice or three times as many bureaucrats
00:38:45
as they had 30 40 years ago so there's sort of all there's sort of all these sort of um parasitic people that have
00:38:52
sort of uh gradually approved and uh and um and and so there's probably a lot of
00:38:57
would be a lot of rational ways to dial this back but um but yeah um you know maybe we're to a new
00:39:03
location if the only if the only way to lose weight is to cut off your thumb that's kind of a difficult way to go on
00:39:08
a DI he um Peter three of your collaborators longtime collaborators Elon Musk um Mark Zuckerberg and uh Sam
00:39:18
mman are arguably the three leading AI language model um leaders which one is going to win rank
00:39:27
in order and tell us a little bit about each Peter said he would answer any question I I I I I said I would take any
00:39:37
question I didn't say to answer any question you said you would honestly you said today you felt extremely honest and
00:39:43
candid Let's uh I I yeah but Ive already been extremely honest and candid so I think qu it's it's it's whoever I talked
00:39:52
to last okay they're they're all very very convincing people so you know I cre I I talk a little bit I talked to Elon a
00:40:02
while ago and and you know and it was it was just um how ridiculous it was that Sam Alman was getting away with turning
00:40:10
open AI from a nonprofit into a for-profit that was such a scam if everybody was allowed to do this
00:40:17
everybody would do this that it has to be totally illegal what Sam's doing and it shouldn't be allowed at all and that
00:40:24
seemed really really convincing in the moment and then then sort of half an hour later I I thought to myself but you
00:40:30
know actually um man it was it's been such a horrifically mismanaged place at open AI with this Preposterous nonprofit
00:40:40
board they had nobody would do this again and so there actually isn't much of a moral hazard from it so but yeah
00:40:46
who whoever whoever I talk to I find very convincing in the moment well will that spaces get
00:40:52
commoditized I mean do you see a path to Monopoly there well again this is this is again where you know you should you
00:40:58
know attention is all you need you need to pay attention to who's making money it's Nvidia it's it's the hardware the
00:41:04
chips layer and um and um and then that's just it's just what we you know it's not what we've done in tech for for
00:41:13
30 years you are they making 120% of the profits they're they're make they're I think everybody else is losing money
00:41:21
collectively yeah everyone else is just spending money on on the computer so it's it's one it's one company that's
00:41:25
making I mean maybe there's a few other people are making some money I mean I assume tsmc and asml but but uh but uh
00:41:32
yeah I think everyone else is collectively losing money what do you think of Zuckerberg's approach to say
00:41:36
I'm so far behind this isn't cour in my business I'm going to open source it um is that going to be the winning strategy
00:41:44
handicap that for us um again I I I I I I I would say um my again my my my big my my big
00:41:55
qualification is you know my my model is AI feels like it does feel uncomfortably
00:42:00
close to the bubble of 1999 so I'm we haven't invested that much in it um and uh I I I'd want to have more clarity in
00:42:11
investing but uh but the the uh the simple simplistic question is you know who who's going to make money um you
00:42:19
know I think a year ago two years ago in retrospect Nvidia would have been a good
00:42:22
buy you know I think at this point everybody it's it's it's sort of too obvious that they're making too much
00:42:27
money everyone's going to try to copy them on on the chip side maybe that's straightforward to do maybe it's not but
00:42:34
but that's you know I'd say probably um you should you should if you if you want
00:42:39
to figure out the AI thing you you should not be asking this question about um you know meta or um open air or any
00:42:46
of these things you should really be focusing on the Nvidia question the chips question and the the fact that
00:42:50
we're not able to focus on that that that tells us something about how we've all been trained you know I think Nvidia
00:42:55
got started in 1993 yeah I believe that was the last year where anybody in their
00:43:00
right mind would have studied electrical engineering over computer science right
00:43:03
94 Netscape takes off and then yeah it's probably a really bad idea to start a Semiconductor Company even in '93 but
00:43:10
the benefit is there was going to be no one would come after you no no talented people started semiconductor companies
00:43:17
after 1993 because they all went into you know into software score their Monopoly
00:43:23
power um it's I I I think it's quite strong because this this this history that I just gave
00:43:35
you where none of us know anything about chips um and then I think the you know I
00:43:41
think the risk it's always you know if attention is all that you need um the qualifier to that is you know when you
00:43:49
get started as an you know actress as a startup as a as a company you need attention then it's desirable to get
00:43:56
more and at some point attention becomes the worst thing in the world and and there was the one day where Nvidia had
00:44:03
the largest market cap in the world earlier this year and I do think that represented a phase transition once that
00:44:10
happened they probably had um more attention than was good hey Peter as we wrap here um your brain works in a
00:44:18
unique way you're an incredible strategist you think you know very differently than uh a lot of the folks
00:44:25
um that we get to talk to um with all of this are you optimistic for the future uh I I always man I always push
00:44:35
back in that question I I um I think I think extreme optimism and extreme pessimism are both really bad attitudes
00:44:46
and they're the somehow the same thing you know extreme pessimism nothing you can do extreme optimism the future will
00:44:53
take care of itself so if if you have to have one it's probably you want to be somewhere in between maybe mildly
00:44:59
optimistic mildly pessimistic but uh you know I I believe in human agency and that it's up to us and it's not you know
00:45:06
it's not some sort of winning a lottery ticket or some astrological chart that's
00:45:11
going to decide things and I believe in human agency and that's sort of an axis that's very different from optimism or
00:45:18
pessimism what a great extreme optimism extreme pessimism they're both excuses for laziness what an amazing place to
00:45:24
end ladies and gentlemen give it up for Peter J thank you thank you Peter come on
00:45:29
now wow all right Peter ch