00:00:00
s have tequila I tasted 10 samples the other day one was heads and shoulders Above the Rest which was a good sign oh
00:00:09
so now we're taking that and making it the new Baseline and I'm going to try 10 more samples and we're going to go from
00:00:15
there I think we're very close to having something excellent great and then I did
00:00:18
a a side by-side taste test of the sample I like the best compared to CLA zul Ultra and it was already better than
00:00:26
CLA Ultra which retails for like 3,000 a bottle really yeah holy so it's going to
00:00:32
be better v1's better than their final product is what you're saying yes and that was not just your taste test but
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like you and several people it was me and two other guys who I trust so we we did it together now when you say trust
00:00:44
do you mean underlings or do you mean actually like no he means alcoholics yeah where in your pay hierarchy are
00:00:51
they he recruited them at Alcoholics Anonymous in in West Hollywood are they level two employees or level four
00:00:56
employees no one one works for me and one's a consultant they both both on the pay let your winners
00:01:06
ride Rainman David and instead we open sources to the fans and they've just gone crazy with
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[Music] it okay are we over or underestimating the impact of the AI boom Nvidia has
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been on an alltime heater if you don't know its market cap is now 1.8 trillion freedberg this week it surpassed Google
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and Amazon as the fourth most valuable company in the world there it is folks right behind Saudi aramco 16 months ago
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stock was trading about $112 a share since then share price has gone up 6.5x on a big number shares went higher this
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week after it was reported that Nvidia plans to build custom AI chips with Amazon meta Google and open AI in other
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news finan Cal times reported openai hit a $2 billion run rate for their reoccurring Revenue it's about 165
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million a month and they think they can double that number in 2025 tons of competition coming out if
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you didn't see it Google rebranded their Genera of AI Suite to Gemini and they're
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charging 20 bucks a month for it and then there was this bizarre Wall Street Journal headline that Sam was going to
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raise $7 trillion that makes no sense maybe that was the Tam we'll get into that freeer thoughts on this Ascension
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are we underestimating or overhyping AI I mean it seems like the compute buildout is
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underway so this is going to continue for some time I think the real question that keeps getting asked is you know
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when do you really see the tides recede and what's what's there the compute buildout is underway but are we seeing
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application and productivity gains associated with the capability of that compute some would say yes some would
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say no but you've got to build out the infrastructure if you're going to assume that there's going to be these
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productivity gains in the application layer and everyone's assuming they'll be there so we need to meet the demand
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which is almost like building out an entirely new internet and so the core of AI is this matrix multiplication problem
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and you need these chips that do that really efficiently they're not traditional CPUs which are general
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purpose chips but they're chips that are very special purpose for a particular set of
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applications that render the output of whatever model is being run it's sort of like the internet like you could pretty
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much create a bogey of any number on how big this can get at the same time you're
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seeing some of the other players with different architectures and potentially that are going to be beneficiaries of
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this buildout because they're participants in other parts of the data center or alternative Solutions like arm
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and I don't know if you saw this but in just the last couple of weeks or last week or two arm's valuation
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doubled it's come down a little bit since that big doubling today arm is sitting at 140 billion
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valuation last week it got as high as 156 and remember it was only last August so if you guys remember arm was bought
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by SoftBank and the vision fund and then I think 25% of arm was held by the vision fund and 75% was owned by
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SoftBank last August SoftBank bought from the vision fund the 25% that the vision fund owned at a valuation of 64
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billion so now soft Bank owns 90% of arm the last 10% trades publicly so at $140
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billion valuation softbank's position in arm is 125 billion and I think it really
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begs the question did Masa have a masterful move here yet again because everyone said for years with all the
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bets this guy was making in the vision fund and some of the misguided bets he was making with SoftBank and the he was
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applying on himself and SoftBank to deploy all this Capital during the Zer era everyone was saying you know this
00:05:06
guy had a one hit it was Alibaba and that was it and clearly he doesn't know what he's doing but now all of a sudden
00:05:13
his bet on AI was fairly preing and it's paying off pretty powerfully he bought the whole business for 32 billion and
00:05:21
now he has a a stake that's worth 125 billion seven years later yeah I mean chip in a chair right I mean it's really
00:05:29
begging the you only need one the power law right when you're making a longterm investment you can very easily look like
00:05:35
a over the short term and to your point the power law all it takes is one of them to work out and it can wipe out
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the losses on the rest of the portfolio and we may be seeing mosac with his whole AI Vision story that he's been
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telling for seven years we may see mosa clawing his way out of the hole you only
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look like a to losers meaning when people were throwing shade at Masa it wasn't anybody that's
00:06:00
any good I didn't see headlines that said John Malone thinks Masa is a fraud Warren Buffett thinks Masa is a fraud
00:06:07
nobody was saying that because those guys know what the game is and the game is exactly what you said jcal you must
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always survive and you need to keep your wits about you and over time if you're prepared and do enough good work you'll
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get waves of good luck that amplify your hard work and Masa is an example of an incredibly talented person that has
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found a way to survive more than anything else and so waves of success will hit him the people that complain are the
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ones that are sort of a little bit stuck on the sidelines and are more frustrated
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with their own impotence and inability to do anything now on arms specifically the thing that I would keep in mind is
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that those guys floated I think about 15 million shares so there's about 145 150
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million shares outstanding 90% owned by them so there's about 10 or 15 million shares outstanding and there was about
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125 million shares short going into the earnings report and so the thing to remember is that there was almost an
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entire turn of the float that was short so I don't know how much of this reaction was just an enormous short
00:07:20
squeeze of people that were largely long other chip companies and so they thought
00:07:25
they could short arm essentially as a spread trait to minimize volatility but this is an example of where if you don't
00:07:32
do this analysis properly GameStop was another where you misjudge or you sub analytically look at the actual share
00:07:41
count and what's actually free floating you can get caught on the wrong side and
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these things can be very violent and to explain the float to folks you can make a certain number of shares available to
00:07:52
the public to trade when you have a small number of those correct shth available to the public weird things can
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happen because there's not enough available to short that's exactly right and so that
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could have been the situation here with this runup but I think I think the overall
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point of placing bets in being a capital allocator is the important one to discuss here saaks what are your
00:08:14
thoughts on all the crazy bets that Masa made we watched a lot of our companies or companies adjacent to our companies
00:08:22
get massively overfunded some of them literally got drowned in capital but then you only need to hit one and and
00:08:28
maybe win it all back what are your thoughts on this high alpha you know betting style of his look I mean he's a
00:08:36
gambler and he is playing a power loss so he only needs one really big return to basically make up for all the
00:08:43
mistakes and it seems like he's hit that once again he did it with Alibaba too right I mean he's a major Gambler most
00:08:50
people would be a little bit more risk averse I don't think it was a great strategy to be pumping $500 million
00:08:56
checks into what were effectively seed companies like they were doing with the vision fund however obviously he made
00:09:03
enough good bets that they're going to pay off that fund well it's a good point sacks I mean none of the big I don't I I
00:09:10
I probably need to be careful because I'm not super familiar with the portfolio but it doesn't seem like any
00:09:16
of the big winners were those seed bets like he doesn't have any returns coming out of that kind of investment strategy
00:09:23
door Dash door Dash yeah door Dash was not like what point did they invest billion or2 billion do was yeah pretty
00:09:30
important moment we've heard at dinner Jason and I at dinner we've heard the the waterfall from the soft Bank side
00:09:37
and it sounds like it was an enormous number yeah that was definitely their but it was a drisk business it was a
00:09:44
scaling business seems a little different than some of these companies that were fairly early on that got
00:09:51
monster valuations and large chunks of capital and then struggled to find ways to deploy that
00:09:56
Capital which led to unhealthy Behavior I think the thing you have to give him a
00:10:00
lot of credit for is it's so easy to give up when the peanut gallery is chirping and so the thing that you have
00:10:10
to give him a lot of credit for is he has the ability to tune those people out now he probably isn't even living in a
00:10:16
world where any of those people that chirping even gets to him and I think that that's a very important
00:10:22
thing but kudos to him I mean yeah to be able to tag something for 100 billion years 70 billion there I mean keep
00:10:31
swinging and by the way at the end of it all what is it going to change for him absolutely nothing except he'll have
00:10:37
some incredible stories to tell about the VA that he took and the roller coaster R he was on and I think that's
00:10:42
going to be the most valuable thing he's going to be able to tell his grandkids these stories and his their eyes will
00:10:48
just be like what and his friends you know I mean I would love to have a dinner with him I don't know him let do
00:10:54
it the Pod come on the Pod Masa let's talk about I've only met him once by I have a great story to tell about Masa
00:10:59
when I was on Facebook I met him once but anyways goad tell it I mean can you tell it all I'm saying is I would love
00:11:04
to have dinner with him because I just want to hear these stories of all like up and down and up and down and am I had
00:11:11
two lunches with him we had lunch one day we had such a good time he said can we have lunch again tomorrow how long
00:11:16
are you in Tokyo I said yeah and I came back the next day and I had lunch with a
00:11:20
voice that's amazing and it was great like talking two or three hour lunches where we're just talking about every Web
00:11:25
2.0 company this is in you know the 2009 Uber kind of Robin Hood period and he was just fascinated by what was going on
00:11:33
and and all the disruption happening door Dash series D $14 billion do Post 2018 he did well the question I was
00:11:40
asking is like door Das was a lot like an arm there's a point of view that the business is proven that there's a market
00:11:47
that it can grow into that there's a management team that knows how to deploy Capital versus a lot of these early
00:11:53
stage bets where when they got too much money they ambled about trying well they
00:11:59
didn't amble about they kind of incinerated it incinerated because what do I do with this money I
00:12:05
don't yet have a machine or an engine that can grow with this money and until the engine can handle the capital Pizza
00:12:11
thing like the pizza thing Zoom Pizza you're talking about yeah I mean if you well there's dozens of them in that
00:12:16
portfolio right yes if you don't have a business that can handle the gas you're putting in the tank the engine's going
00:12:23
to blow up the engine has to grow it has to build the volume has to build so that
00:12:28
it can actually handle the fuel and I think that's been part of the challenge and I will just say I've said this in
00:12:33
the past but there was an ERA in Silicon Valley that started around 20 10 2009 kind of right after right as
00:12:41
right as Web 2.0 was starting to venture into more traditional markets meaning tech companies were becoming other
00:12:48
companies kind of the Mobile Local era was was kicking off and there was a strategic concept that got popular
00:12:55
in Silicon Valley on take the market which is when you feel like you could be the winner give the person all the chips
00:13:02
and say now go over bet and take the whole Market because these are going to be winner take all or these could be win
00:13:07
or take most markets so get first mover Advantage here's more Capital than you need and I remember being pitched this
00:13:13
when I was raising my series B that I should raise more than I was trying to raise because I should use the extra
00:13:19
Capital to take the market and then that Mantra just became the deao standard which is oh you have something that has
00:13:25
something it has some Edge it has some Advantage it started to move in the market here's a ton of capital you don't
00:13:31
really need now go take the market and the reality is most of those businesses had absolutely no way of using that
00:13:38
Capital to quote take any Market they didn't even know what their Market was yet yeah they when you in the product
00:13:43
Market fa product Market fit phase and you don't have the engine as you called it how do you make the engine go faster
00:13:49
you're literally trying to take a bunch of car parts and then run a Formula 1 race the car's not even trackworthy yet
00:13:57
and Cera you not not to pick on any companies but I remember catara which was doing construction and they just
00:14:03
thought they're going to take over the whole construction injur you know industry with this company it raised
00:14:08
like $900 million and I believe it's like a zero the whole way you cannot you can't put the money to use Capital as a
00:14:15
weapon maybe works if you're uber lift and door Dash and you have customers and you can reduce the price but well you
00:14:20
know what's interesting is when you now look at all bunch of these AI companies every day what you see is every round is
00:14:26
a minimum of a hundred million but the the Dirty Little Secret is not that these companies have found product
00:14:34
Market fit or are scaling Revenue massively I'm not talking about open AI I'm talking about these other longtail
00:14:41
businesses the100 million is largely going to compute but as we know and I think we'll talk about this next week
00:14:48
when all these announcements are done but you're about to see a one10 thing of the compute cost and so what's
00:14:55
interesting for those companies is they're going to be left with a lot more money but back to free Brook's point
00:15:00
they may be ambling about with too much money at that point so today you raise $100 million because you need to spend
00:15:06
70 or 80 on compute tomorrow when you only need to spend seven or eight for the same amount of
00:15:11
throughput on one hand you could say well this is great I have so much more money I can spend but again we've seen
00:15:18
example after example where if you raise too much money when you don't need it you will just run yourself into a brick
00:15:23
wall you'll over hire you'll Mish hire you'll misallocate and it just goes back to the same thing that we've said before
00:15:30
which is there's just not enough people that actually know how to run companies yeah and it just becomes a huge
00:15:34
distraction you see sacks today Sora did you see Sora get dropped by open this is
00:15:39
breaking news right now yeah this is unbelievable if you haven't seen it Sora is the text video model from open AI
00:15:46
they've been talking about this I guess this uh would compete with staple diffusion do video as well
00:15:54
anyway you give a prompt I'll just read this one out loud beautiful snowy Tokyo City is bustling the camera moves
00:15:59
through the bustling City street following several people enjoying the beautiful snowy weather and shopping at
00:16:04
nearby St stalls gorgeous sakur pedals are flying through the wind along with snowflakes and
00:16:12
this if you weren't studying it would look like a major feature of film or TV show yeah SX yeah I mean it's
00:16:23
unbelievable I mean it looks to me like 4K video I mean I'm not sure it actually
00:16:27
is 4K but it looks pretty darn close yeah the rendering resolution can be whatever you want it to be right the
00:16:34
fact that you can describe the the way that you want the camera to move so I'm going to speculate on this you guys know
00:16:40
I talked about this quite a while ago on how I think we're going to be at prompt
00:16:45
to video meaning people are going to have personalized video games and personalized movie experiences and music
00:16:51
eventually where rather than everyone watch the same product made centrally by a producer we'll all make our own
00:16:58
products locally I spent some time digging into this over the last year and the Big Challenge was that the
00:17:03
traditional approach for rendering video is you create three-dimensional objects
00:17:07
and then you have a rendering engine that renders those objects and then you have a system that defines where the
00:17:12
camera goes and that's how you get the visual that you use to generate a 2d movie like
00:17:18
this and the best tool out there is Unreal Engine 5 which is made by epic games I don't know if you guys have ever
00:17:23
seen the demos of it but it's is that Star Wars uses with their like virtual sets now when they did the Mandalorian I
00:17:30
think they're using the Unreal Engine or unit they probably are and then there's
00:17:33
other tools if you're in movie production you'll use different stuff but Unreal Engine is just so
00:17:37
incredible but it requires the placement and the rendering of 3D objects so where
00:17:42
do those objects go and then the physics of the light moving off those 3D objects
00:17:46
to generate a 2d video is pretty straightforward that's been done for 20 30 years and so the the density the the
00:17:55
rate of improvement the color contrast Etc has all improved made it look incredible now it's super photorealistic
00:18:00
you create photo realistic video but it still requires this concept of where are
00:18:04
the 3D objects in 3D space this doesn't do that this was a train model so we don't know what's going on in the model
00:18:12
so how would you train a model to do this without having a 3D space because clearly there's thousands of objects in
00:18:20
that rendering if you look at that video thousands of little objects the compute
00:18:23
necessary to Define each of those objects place them in 3D space is practically impossible today so this is being done
00:18:32
through some model that starts to render all of these things together so it is very likely my guess is that open AI
00:18:39
used a tool like Unreal Engine 5 and generated tons and tons of uh video content tagged it labeled it and were
00:18:50
then able to use that to train this this model that can for whatever reason that
00:18:56
we don't understand do this make the output but what's interesting is that this output you're referring to synthetic
00:19:03
training data exactly exactly and and and but what's amazing about this model is that
00:19:10
underneath this this model on its own has rendered physics so all of the rules of physics all of the rules of motion
00:19:17
all of the rules of perspective all of the rules of how objects sit upon one another next to each other how fluids
00:19:22
move if you look at some of the other demos on this tool you can actually see fluid moving it's
00:19:29
the M of fluid or rering the M ofir those are like physics models that would typically deterministically written
00:19:35
meaning that a programmer an engineer writes the physics and then the the Unreal Engine renders the physics in
00:19:41
this case the model figured out the physics and the model probably did it in such a reduced way that you can use a
00:19:48
reduced amount of compute to generate something that would otherwise take a ton of compute time I mean look at this
00:19:53
it's truly amazing Nick find the one of Golden Retrievers playing in the snow this is what way better than this but
00:19:59
what's amazing is that the and by the way if you're listening to this I really recommend going on Twitter and typing in
00:20:03
open AI Sora s o r a and looking at some of these demo videos it's Bonkers and I
00:20:09
think it really speaks to what's so incredible right now which is that software is writing itself and it's
00:20:14
replacing a lot of human determinism the way that humans think about constructing
00:20:20
software is being completely redone with these uh uh learn models this model learned physics on its own and it
00:20:26
renders this thing that looks like only way we know how to do this today is to create 3D object models in 3D space and
00:20:32
use tons of compute to render the to translate that from Geek to you know people
00:20:37
listening this is incredible because Pixar spent years maybe a decade trying to figure out hair I remember talking to
00:20:45
Ed catull and he told me hair was just so hard to get right with wind and lighting they literally built the
00:20:51
physics engine for years like maybe even a decade to make hair cross The Uncanny
00:20:56
Valley what you're saying here free ber is somehow this language model this image model just outputs it and it
00:21:04
doesn't actually have a physics model it just outputs it correct yeah it it well
00:21:08
we don't know but the model there may be some determinism built into it so so I don't want to
00:21:14
assume anything but the general approach determinism means you write the physics
00:21:20
and you write the formula of the physics yep so that the software can execute the
00:21:24
physics and render the thing but in this case it may very well be the case like a
00:21:30
lot of the other models that are being trained today when you create a model they're trained that it's being trained
00:21:36
and on its own it resolves to figure out how to do the physics is there a limit on the length of these Sora videos that
00:21:44
you can generate right it's one minute right now 60 seconds today obviously that'll come off at some point but by
00:21:50
the way if you can do 60 seconds you can do two hours right the problem that you
00:21:53
have is I mean if we're talking about creating a movie is making edits so I obviously I haven't used sory yet
00:22:00
because it just came out today but I've used Dolly which is just their prompt uh
00:22:04
image service and I was designing the label for or the bottle for the all-in tequila for you guys yeah and what I
00:22:12
noticed is that it would spit out a bunch of ideas and then I would take one and then want to just make little
00:22:20
changes and I would just say okay keep this but just change this one detail it would give me a completely new image so
00:22:28
the AI doesn't realize the layers inherent in what it's producing somehow it takes this prompt and generates a
00:22:36
response and if you give it that same prompt a 100 times it'll give you 100 different answers and if you say just
00:22:43
modify this this or this it can't do it can't reason it can't take criticism well it seems like on some level it's
00:22:49
unaware of the output that it's created again yeah a human creating this in Photoshop would have a lot of layers and
00:22:56
every object in that image would have its own layer and you could have a layer for text and just quickly modify the
00:23:03
text when I want to do something as simple as edit the text or change the font again it would give me a completely
00:23:09
different image and I just wonder about these videos if you want to create a movie I think you're probably going to
00:23:16
be stuck with like the what they give you and then maybe you can import that at some point into an Unreal Engine and
00:23:23
then do work from there the editing part is it doesn't exist yet when you do text
00:23:28
it's easy because you just ex you cut and paste it into your grammarly or your notion or whatever you use and you start
00:23:33
editing here there's no exporting like you're saying it's to Final Cut Pro or something I bet that when they turn this
00:23:40
into an API that when you're working in Unreal Engine you know if you're like a VR designer or something like that or
00:23:46
you're like a um a filmmaker you could probably just get started with a prompt and that could
00:23:53
be hugely time-saving if they can make that integration work I think that's pretty interesting I
00:24:00
looked at this a lot over the last year this was one of the biggest challenges is in order to have an interactive
00:24:05
approach to video production or video game production you have to be able to say we take that out put that in but
00:24:13
like like you said the model doesn't distinguish the objects it doesn't distinguish each of those little flowers
00:24:19
or each of those little cherry blossoms or it doesn't even distinguish that there's two people walking down the road
00:24:24
the model doesn't have this concept of objects when it renders and so um the traditional model where
00:24:31
you have objects in a 3D model that then get rendered into a video allows you to
00:24:36
do those sorts of things so what may end up happening is a fusion and this is something we talked about with Steph
00:24:42
Wolfram and others that there are these models that are called compute models that do deterministic compute tasks then
00:24:51
there are these AI train models where we don't really have a sense of how they work but the fusion of the two will
00:24:57
unlock a lot of opportunities and that's very likely the next generation of models is not just purely um non-human
00:25:04
intervene train models but the integration of those models with these deterministic models with these compute
00:25:10
models and then you can start to do things like instead of saying hey render this whole scene you're saying render
00:25:16
all the objects that would go in the scene they get placed in an Unreal Engine and then the Unreal Engine
00:25:20
outputs the video and so that integration work I think is the next big phase in AI model development and
00:25:27
that'll unlock like insane yeah cuz right now you can't use this to create dialogue like actors in a movie scene
00:25:35
talking to each other and acting especially like close-ups of those actors with their facial expressions I
00:25:41
don't at least I don't see any examples like that the way humans want to have a creative process it doesn't work that's
00:25:47
right yeah yeah it'll get there though and if you put something like this out there to the public and said it's 20
00:25:52
bucks a month to do this or 50 bucks a month you can have a lot of consumers who want to buy this product so when I
00:25:59
see this I think people are going to pay for this and then going back to Nvidia or arm okay more infrastructure to your
00:26:07
point freeberg is like what infrastructure do we need for everybody to have Pixar on their laptop or on
00:26:13
their you know phone and people people are willing to pay for these I don't know if you guys saw this but there was
00:26:18
another big breakthrough announced today with the um the new Gemini pro15 can you
00:26:23
just pull up sundar's announcement on it yeah Sundar now is found the password to
00:26:27
his Twitter handle he's he's tweeting yeah the reason I want to talk about this if you just scroll down so when you
00:26:32
prompt an AI model you put in a certain number of words into like an llm model today and
00:26:39
it spits words back out the more words you put into the model the more compute intensive or challenging it is to do the
00:26:46
compute work needed to render the output so open AI their gp4 turbo model has 128,000 tokens which means about 28,000
00:26:58
words can be fed into the model to get an answer back out so you could put like a whole essay or 100 pages of text and
00:27:05
it will read a document for you you get a whole book and it can give you a summary in a couple of seconds what
00:27:11
Google just announced with Gemini 1.5 Pro is a 1 million token context window up to 10 million token context window in
00:27:19
total I don't know what's going on here because the problem is the way these models are kind of traditionally built
00:27:27
is that that creates a nonlinear scaling on compute needs to be able to increase
00:27:31
that that context window like that so there is some architectural work that's gone on to allow these models to scale
00:27:38
up in a way that we did not think possible when these models first came out which is crazy to think was only
00:27:42
like 24 months ago that they started to get kind of looked at like this 18 mon May yeah and so there's two kind of
00:27:49
things that are happening one is that these models are getting chopped up in a way that you can run small models in a
00:27:54
highly trained way locally and you don't need a massive general purpose model and
00:27:58
so that's going to make compute needs very small for very specific tasks and the other one is that there's other
00:28:03
architecture that's happening in deploying the models that's allowing massive context Windows like this so it
00:28:08
totally changes how scalable they are with the same number of chips or the same amount of computer the same amount
00:28:13
of power so there are all these amazing mors law effects happening right now in AI technology development on the chip
00:28:21
level on the architectural level and the how they're being built and how they're
00:28:23
being deployed that completely changes the concept that I think most folks had when these first came out two years ago
00:28:29
and the potential so I think sky is still the limit we don't really know how big this is going to get but all of
00:28:34
these efficiency gains mean that we can do so much more with so much less and by the way when you can do more
00:28:40
with less it doesn't mean you need less chips it means you need a lot more chips
00:28:44
because the fact that you can do a lot more with much fewer chips means everyone's going to want to do it now
00:28:49
more people can afford to do it so it unlocks the opportunity for uh for compute and so it really starts to
00:28:55
rationalize the Nvidia thesis that it could be worth1 trillion do potentially and for people in the audience to
00:29:02
understand what this context window means I'm sorry if I was too Technic no no no no I'm just I always like to just
00:29:07
give an example or two after you explain it the context window for example you could upload the transcript of this
00:29:14
podcast right and there were only certain services like Claude maybe where you could put a PDF attachment boom you
00:29:20
put it in there and say hey summarize this using your language model and using this content now you could be able to
00:29:25
say hey take me every Mr Beast video take me you know take the top 10,000 videos on YouTube take the transcripts
00:29:33
summarize them for me give some analysis on it and that was only available to developers prior to these large context
00:29:40
Windows being open and that's going to just open up a massive amount of application right shim the results are
00:29:48
actually not that much better there's these third party service benchmarks lombata is probably the most often
00:29:52
referred to but what you see if you just look at for example all the gpts even as
00:29:57
they increase the number of parameters in a model the quality of that model doesn't necessarily increase with the
00:30:03
rate of parameter increase so you have this thing of a little bit of diminishing return which is more a
00:30:09
problem of what we said before which is eventually when you're scouring the open
00:30:13
internet doesn't matter how fast or how how big you scour the open internet the open internet is a bounded space and so
00:30:19
you get the same answer so all of these things are they're interesting marketing
00:30:26
wear but I would just encourage us all to keep in mind that the shift is not necessarily these kinds of
00:30:35
things it's kind of like saying you know in a chip like oh wow we built this chip
00:30:39
on 3 nanometer okay what does it mean no I think the piece respectfully you might
00:30:44
be missing here is like your proprietary data might not be in that language model
00:30:50
so by having this context window and you can add something that you have on your
00:30:54
hard drive that's not how it works so my point is the context window is not correlated to the quality of the model
00:30:59
outputs correct but consumers and business users haven't been able to put their data into the models because that
00:31:06
has nothing to do with the context window that existed when the context window was smaller that that's what you
00:31:11
think you do things like rag with right but most people don't have access to that this is like consumers can now just
00:31:16
take something off their hard drive rag is different than what this is okay like
00:31:22
this is this what what you guys just spent all this time talking about is equivalent to saying I built this chip
00:31:28
with on a 7 nanometer process or a 3 nanometer process and what I'm saying is it is technically more burdensome as
00:31:36
freedberg said it's technically much more sophisticated and complicated but the the translation to
00:31:44
Quality in the consumer is not what that means so a 3 nanometer chip is not two times better than a 7 nanometer chip for
00:31:53
the consumer similarly a context window that's five times bigger than the one before it
00:31:59
doesn't make a model five times better to the consumer these are orthogonal ideas it's not to say that it isn't an
00:32:05
important thing but I I I would say that it's a reminder for me that we're in the
00:32:09
early phases where there's a lot of hay that people can make but it's important to look at these
00:32:18
third-party benchmarks that try to sort through and sift through what matters and what doesn't matter and one of the
00:32:24
interesting things that thirdparty Benchmark service have figured out is that irrespective of the exponential
00:32:31
growth of these things like parameter size quality is only growing linearly and now
00:32:38
sublinearly so it's just an interesting point I understand your point now my point is man when we when you are a
00:32:45
consumer of this and I've been talking to people trying to get their data into you know the context window to be able
00:32:51
to ask a question they're always like how do I put more in there how do I put more in there and then these language
00:32:56
models because of the copyright issues they're not able to upload Blade Runner and then
00:33:03
say hey make me something but I was able to and just to give a very real example
00:33:07
I did um a podcast around the ray Croc movie the founder that we were referencing earlier I uploaded the
00:33:14
screenplay I found a PDF of the book and I found two other like essays about Ray
00:33:19
Croc like HBS studies and I said give me like a timeline of it and I use something called Google notebook which
00:33:24
has a big context window and you can upload all this stuff and that's where I'm seeing
00:33:28
consumers and what these things are capable of Visa the context window it it just unleashes in people's mind so many
00:33:36
applications that you could do there are two examples today that caught my eye that I think are worth bringing up the
00:33:42
first one is from Meta Meta published this paper today which was like pretty crazy and essentially what they said is
00:33:49
that for the realm of the software worker the software engineer what they basically built is
00:33:56
the this llm tool that runs over llama called testgen and it essentially does automated unit testing to such a high
00:34:04
degree of accuracy so you know in the software development if you want to spit out a product you have to go through
00:34:09
this thing where you have to functionally run unit tests and make sure the thing works as advertised and
00:34:15
this paper essentially now allows you to Traverse a code base understand it generate these unit tests with high
00:34:21
accuracy so where is this valuable think of remember the software bugs in like the bow triple 737 Max issue jcal where
00:34:30
it turned out that it was just bad software tools like this now will able will be able to run unit tests where you
00:34:37
will not be able to get out get that plane out the door unless all of these functional unit tests not only have been
00:34:43
written but run and have been passed successfully and it'll all be done by Bots which means that you can't gain
00:34:50
that system so that's that's something today that it's the last thing developers get to is writing the unit
00:34:55
test right it's always like is why there's all kinds of bugs and security holes in code now I thought that that
00:35:01
was a pretty large breakthrough and I think we're going to go through a bunch of fine tunes on this that make it
00:35:06
interesting and then I saw this other thing which caught my eye even more which was this thing that Nat fredman
00:35:13
tweeted out which is this thing called Magic dodev and what essentially it is is like a coworker and what they are
00:35:19
claiming and I don't know if it's true is that now you can basically have this thing under
00:35:27
understand your style of code and actually be able to write code that is just as good as the way you write code
00:35:33
so now it's not a co-pilot but effectively a coworker and this is the first real
00:35:38
example of what I've seen of a claim that basically says hey you know we can now be an add-on to your
00:35:46
Workforce and this to me is just so gargantuan because like if you look at the amount of Opex inside of any company
00:35:56
that sits inside of R&D if you look at the amount of stock based compensation right if you replace humans
00:36:02
with Bots which is what this is you're going to crush those things SBC at the limit goes to zero because you don't
00:36:09
have to give stock to a bot right you have to give stock to people and Opex gets shrunk because now
00:36:16
you just pay a license to magic dodev or I don't know how they're going to make money on this but really really really
00:36:22
fascinating stuff it is a scary there was another open source project I think it's called Maggie mg I don't know if
00:36:30
you saw that freberg but Apple has been working on an open source image project and so you're kind of going to see I
00:36:38
think in iOS 18 or the next iPhone 16 they're going to have an image model on onto that phone where is where is Apple
00:36:46
in all of this it's unbelievable no they they're where are they they are building
00:36:51
an image model and you're going to be able to talk to your phone and they announced anything I think you're going
00:36:56
to see a on the next set of mobile devices that will run models locally yep and so this goes back to the point about
00:37:05
how the hell is the government going to regulate AI models which is the stupidest thing I've ever heard um well
00:37:10
not the stupidest it's probably you know probably top 20 but the fact that they're going to like be able to be
00:37:17
fully vertically designed that they can have the hardware and the software and integrate all the way through to the
00:37:24
application layer they're going to have I would imagine incredible intuitive AI features built into all of their
00:37:30
products that can run locally rather than all the other stuff that's going on where you've got to make a request on
00:37:35
the internet and get the results back over the Internet it'll be pretty powerful but obviously no data right we
00:37:41
don't know what they're doing what just speculating here well no I mean you have
00:37:44
breadcrumbs and the breaks are they have an image model and I just dropped in the
00:37:48
hugging face of it you can basically upload an image and just give it a text prompt of how to change the image so you
00:37:54
know if Nick were to use this he could upload a a picture of Youth and say you know give him five o' Shadow give him a
00:38:00
mustache whatever and Nick Nick will you do that real quick while we're talking while you're doing that can you bring up
00:38:06
the video of the robots life in a cyber Punk setting it's beautiful is this a SORA rendering yeah this is Sora so
00:38:14
beautiful so it's really cool so but here's the the limitation and this goes back to what me and fre were talking
00:38:19
about earlier okay so you've got these people in the background let's say Fe the feeder backwards by the way you can
00:38:26
see human feet aren't correct sort of like a vol problem anyway what's cool is that okay so those cars aren't moving
00:38:32
they're static you got some movement of these background people right at least so they're kind of they're the extras in
00:38:41
a movie but if you wanted to tell Sora this is just my guess that okay I want the people in the background to be doing
00:38:48
this it would render a whole different image like your robot might change too right well SX this is where your context
00:38:55
window matters so if you repeat keep the statement If instead of writing and then
00:39:00
iterating if you just reprompt it and your prompt got longer and longer and longer with the degrees of specificity
00:39:06
you needed that's the way you use these models today and to your point what humans are looking for from a ux
00:39:12
perspective is an iterative approach to rendering is an iterative approach which
00:39:17
isn't feasible in a world where the this this is all a matrix it's a three-dimensional Matrix there's two
00:39:24
dimensions of pixels and then the Third mention is the next image and the next image and the next image and so that
00:39:29
Matrix is rendered from scratch it doesn't have a concept of what are the objects that I'm rendering it has a
00:39:36
concept of a matrix of pixels and so it will render a matrix of pixels based on a redefined prompt but what you're
00:39:43
describing would require a very different model architecture than the way all of these train models operate
00:39:47
today this is going to revolutionize pornography I think it's the first no no no I'm not saying it as
00:39:53
a joke I think that's where you're going to see this first because then all these
00:39:56
issues potential issues of underage people or exploited folks it goes completely away your gonna cut
00:40:04
this no and and you know it'll kill only fans yeah say gambling is where every Revolution starts that's where exactly
00:40:12
technological that's where payments that's where the web started that's where payments got refined but I I think
00:40:17
that in pornography you're going to see this basically destroy pornography and only
00:40:23
fans well I I don't want to bring up something uh that's super offensive but there was a certain pop music star who
00:40:29
had a bunch of images just a couple of weeks ago that were AI generated yeah fakes deep fakes right yeah there were a
00:40:37
bunch of deep fakes of a pop star I don't to like actually highlight the person's name because then it just I
00:40:41
think it sense more of it but X did a really good job of blocking all of them watermarking them and saying you can't
00:40:48
do this and so this is like a whole new world you can take any person on the planet and make porn out of them that is
00:40:54
realistic well I don't I don't mean that I just mean that you'll be able to make
00:40:58
pornography in a way that is totally uh nonhuman involved which is generally better I would say for All Humans
00:41:06
involved what's great about the Deep fakes is that if you have a sex tape come out you can just say it's a deep
00:41:11
fake totally I was about to ask Cham what is the prompt you're GNA use to make love to yourself
00:41:16
tonight with the new Sor model chamat Embraces chath all I hope is I I may just need to publish some data so that
00:41:24
whatever deep fake gets some part it's accurate this is Apple Oh short Apple stock this is terrible it's not very
00:41:31
good that's not very good what is this model this is an apple model it's called Maggie mg e this is Apple's open source
00:41:38
image model it's way behind just looks like GPT 0.1 they got work to do but it's open source it's going to go faster
00:41:44
it's very hard to make fine tune changes in these models or to get the result that you want but that's fine this is
00:41:49
just a this is v0.9 so if you guys want to see a great fine tune the Juggernaut XL fine tune uh oh I would just say try
00:41:57
it it is a fine tune that does not allow bad-looking people the whole the whole concept is only beautiful people
00:42:07
so it doesn't matter what your prompt is but these people come out the most incredibly good-looking people I've ever
00:42:14
seen as if the standard wasn't already high enough with filters and everything else but this is going to be
00:42:19
revolutionary for independent film I mean this is obviously just tip of the iceberg but you know the problem with
00:42:23
independent film right now is that the economic model literally doesn't work it's too expensive to make an
00:42:29
independent movie relative to the return and so the independent movie business is
00:42:35
almost dried up almost completely this is going to revolutionize it because it'll bring the cost down close to zero
00:42:42
now I I don't I don't agree with freeberg that everyone's going to design their own entertainment because most
00:42:47
people are lazy no I'm not saying design the way you think about creative production processes is what's going to
00:42:53
change it's all going to reduce down to sitting down and it's like when you ask your spouse or partner or whatever what
00:42:58
do you want to watch tonight and they answer something that something will then be delivered to you instantly
00:43:04
that's what's going to be so powerful well you mean the AI is going to create it on the spot for you it certainly will
00:43:09
but I I think that there's a certain element of culture that gets integrated into
00:43:15
personal I mean I don't think we have time for this but I have like a whole philosophy people still want curation I
00:43:20
mean if you look at something like YouTube um or really any user generated content site there are rough 100 times
00:43:27
more people who are passive than people who are active and actually create stuff
00:43:31
whatever the ratio is there's always a lot more passive viewers than there are creators so there's I'd say most of the
00:43:39
content will be created by people who actually care enough to do it again let's call it one or two% of the
00:43:44
population and then of those 1% might actually be really good at it yeah but here here's where freeberg I think has a
00:43:51
really good point because I have been looking into this imagine if you took the soprano something you and I love ZX
00:43:58
and you just said hey for each season give me 10 more minutes per episode and give me like two more characters or
00:44:04
whatever now you when you watch it the next time you could say just fill it in I want every episode to be 90 minutes
00:44:09
instead of 50 minutes or I've been doing this thing uh with my daughters we're into Star Wars and the Clone Wars Etc
00:44:17
people have been cutting shows like Andor or Rogue one Clone Wars the prequels Etc and the bad
00:44:26
batch and they're putting in together like timelines and they're making their new versions of it by super cutting the
00:44:33
different series that are filling things in so you're going to be able to say hey
00:44:36
tell me the whole Star Wars saga with a little more perspective from Obi-Wan or give me a little more perspective from
00:44:43
this person and that that's going to just make these things like these franchises so much more watchable and
00:44:48
deep and Rich yeah so this is my point sex is I don't think it's about groundup personal media creation I think that
00:44:56
it's about the curation model changes the Creator or the central creative Force comes up with a genre with a bunch
00:45:05
of characters like a Star Wars and general like arcs of stories and then you can go in and you can view it from
00:45:11
any character's point of view imagine watching the Star Wars movie from Darth Vader's point of view imagine watching
00:45:17
the Star Wars movie where you just stayed on Endor the whole time and you watch the news on the TV while you're
00:45:25
hanging at fantasy you with the you with the ewo so you're right that there's a great
00:45:31
opportunity for some of these cinematic universes to kind of open up the creative assets and let the fan base do
00:45:36
whatever they want with them or create you know these Alternatives I still think that it's that 1% of the
00:45:43
viewership that actually cares enough to do that and the reason is because that I
00:45:49
think what you see with all these uh demos is that it's really easy to get the first 90% it's really really hard to
00:45:56
get the next 9% and then the final 1% you know to get to the level of of course yeah to get it dialed in to the
00:46:03
point where again the the first thing it gives you but the the benefits could outweigh those costs and this is true in
00:46:09
3D video game playing I don't know if you play fortnite but there's all sorts of stuff that you feel could be better
00:46:14
but the overall value of that experience far outweighs the missing elements of it
00:46:19
not being truly photo realistic and I think that's where this stuff goes it's ski week next week
00:46:26
and I've done this for all both of my older boys and I'm doing it now for my youngest boy who is four and a half
00:46:34
almost five we are going to watch this entire week all of the Star Wars movies fantastic and then I got a downloaded
00:46:42
history movies all the movies yeah from and I got an order the order was not what I thought it's not as released
00:46:49
obviously no you want to do timelines so you want to have the prequels I did that
00:46:54
once and I will tell you if Ro one uh the Star Wars the original sequel well you're saying this order is
00:47:01
not good here's what I was told this is what was the internet was the most popular you start with The Phantom
00:47:07
Menace yeah then attack of the Clones then revenge of theth yeah then solo is optional option yeah Rogue one optional
00:47:17
y Rogue one not optional then four five and six obviously a new hope that's when
00:47:21
your kids will lose their mind they'll be like what is this it's like Empire Strikes Back return to the Jedi six are
00:47:26
too slow for kids yeah like the better seven the force awakens and eight The Last Jedi then nine the rise of
00:47:32
Skywalker skip the last three yeah the last three are garbage they fall asleep during 456 yeah God 456 are the best
00:47:39
prequels are probably the most watchable they're very they in in retrospect they're great but there's also the Clone
00:47:44
Wars which is absolutely fantastic I would sprinkle in some Clone Wars Episodes Natt and my daughters I'm
00:47:50
forcing them to sit with us for this entire Matt's going to watch all this no she's ready to shoot her your in the
00:47:56
face yeah this is her worst nightmare she and my daughters are like I put the over under on Nat sticking through maybe
00:48:00
a 100 minutes of this and she's done she's done Amore why do you poison the kids with this nerd stuff they're never
00:48:08
going to get the girlfriend what this is not a felini this is a how about they watch something
00:48:15
where the people make a love instead of the lights they able to cut people hand off you watching this exactly it's said
00:48:21
no there's no love and a joy uh there's uh people with light it's no fun but to bridge the gap between your two Vision
00:48:29
Sachs and freeberg just ma voice is so great chamath and I will talk when we talk to each other for literally 20
00:48:40
minutes as Nat we'll just have a convers but it's a conversation we're having I don't know why Chata this deal has uh
00:48:48
such a high interest rate on the convertible note why would you do that to me I'm a your friend who's going to
00:48:53
be on the board that this a person looks like a dum dum what's going on I don't understand well it's an independency jth
00:49:01
you don't mean to have a put the super smart a different perspec is the opposite of a white truffle the white
00:49:07
truffle is delicious this a product that smells like a poo but anyway between we're literally just
00:49:18
talk coming tonight ask are you making it for dinner or not we need I have to I'm not I'm going to try to make it by
00:49:23
dinner I just have a I have to give a keynote on a podcast conference oh my God are you wait sorry are you kidding
00:49:28
me no I'm not Kidd you guys banned me from having advertising here I have to make cheddar I got bills to pay just
00:49:35
because there's an eight in front of the Uber stock price doesn't mean I can retire will you be there by 7 p.m. or
00:49:42
not I'm going to make it by 7 yes I keep me in for we are going to start dinner when you get there perfect I will not do
00:49:50
David saaks time okay thank you but between freeberg and Dave you know SA actually said it's like one or two% of
00:49:56
the audience for you know show with a million viewers or 10 million viewers that could be tens of thousands of
00:50:03
lunatics and I don't know if you knew this but you remember when Luke Skywalker showed up spoiler alert in the
00:50:08
Mandalorian everybody was like oh his young face does not skip The Uncanny Valley this is why you got to watch the
00:50:14
Mandalorian so then some kid did his own AI rendering of Luke Skywalker you know
00:50:21
after Return of the Jedi but you know after he defeats Emperor and they then hired that kid to work at Disney and
00:50:29
Lucas Arts so what's happening is all these people who are making content for the Star Wars Universe they are going to
00:50:36
be the next generation of creators so between a Mr Beast way over here and Lucas art there's going to be a new fill
00:50:43
in and it's going to be all these great 1centers making interesting with IP that's owned by other organizations I
00:50:50
think it's a whole new paradigm for media and content it's going to be so different the automated stuff that's
00:50:55
customized for you it's almost like what YouTube and Instagram did for user generated content there's going to be
00:51:02
this whole new model of AI generated content the the real winners are going to be the technology platforms that
00:51:09
bring these tools in a simple intuitive way that to Sax's point doesn't challenge the user to do work but makes
00:51:15
their life feel easier and better and brings them a more Rich experience and they're getting today from any other
00:51:20
media source and that's going to be a game changer all right Lots going on in AI I thought I'd bring up really
00:51:26
interesting story that happened just around stock options and employees and advice you're going to get generally
00:51:34
speaking just tons of chaos at the startup bolt if you don't remember that's a one-click checkout startup it
00:51:40
was founded by a guy named Ryan breslo he's been on my other podcast this week in startups he went viral in 2022 after
00:51:47
we call YC and stripe like mob bosses and had this whole conspiracy theory of how they were trying to kill this
00:51:52
company don't know if it's true or not but at its peak bolt was valued at $1 billion chth and they're buying back
00:52:00
shares at a $300 million valuation down 97% yada yada what makes this interesting was that in 2022 breslo
00:52:08
announced a new stock auction program for his employees on Twitter and he did this in a very bombastic lecturing kind
00:52:14
of way to the entire industry saying that bolt would offer loans to any employee to exercise their options early
00:52:20
we all know about these type of loans from their balance sheet that is the idea here yes and he called it the most
00:52:27
employee friendly plan possible and said that half of both 600 plus employees took the
00:52:35
deal he since deleted the entire thread but at the time a lot of VCS who had been through this before you know
00:52:41
explain to Ryan this a terrible idea here's ggv's Jeff Richards for what it's worth almost every private company s
00:52:47
finally did this in the 90s was an absolute disaster employees spent years paying back loans for worthless stock
00:52:52
tax bills for merely exercising Etc yada y and his now deleted tweet was over half our employees chose this plus I
00:53:00
would strongly encourage my family and friends to choose this but VC say it didn't work in the 90s so it's a
00:53:05
disaster VC Twitter pumps the tweet this is why VC run companies are never able to make strides for employees obviously
00:53:11
all those options at 11 billion are worthless now but sorry they did this when they were worth 300 billion 11
00:53:18
billion and it was reported that at the same time in a new industry publication that reslo
00:53:26
was selling his shares in secondary preso confirmed with that newsletter that he had sold 10 million and uh
00:53:35
sources uh Anonymous sources y yada take that forward it's where it said he didn't tell the team he was doing
00:53:41
that two investors also accused the company of misleading shareholders and raising capital on inflated metrics SEC
00:53:48
investigated but did not recommend any action sex jth I don't know if either want to take this this is really
00:53:54
mechanical but it does speak to what happens when things implode should employees be taking loans to buy these
00:54:00
kind of stocks yeah at a minimum hopefully these loans are non recourse and at the maximum if they were
00:54:09
recourse but it looked like these guys were doing these kinds of shady things they have to kind of forgive the loans
00:54:13
and eat it there's a reason why almost no one does these types of exercise loans anymore I mean whoever the VC was
00:54:19
who pushed back was right I mean these things were common 20 something years ago people stopped doing it and the
00:54:24
reason why why is that well there are a couple reasons so the mechanics of the loan are that the
00:54:31
company loans you the money to pay down the exercise price the strike price for the options and then you're supposed to
00:54:38
pay the company back at some future date basically when you can sell the shares and in effect from the point of view of
00:54:45
the balance sheet of the company this was cashless because it would loan the exercise price to the employee who would
00:54:51
then exercise and pay that money back to the company so everyone's like well what's wrong with this this just seems
00:54:56
like simple mechanics where no one loses the employee gets to start the clock on
00:55:02
their shares for long-term capital gains that's why they would do it the problem
00:55:06
is that what people discovered is that if the company didn't work out and those shares became worthless then the
00:55:14
employee is still on the hook for the loan and if they don't pay the loan back then there's a loan forgiveness issue in
00:55:21
other words the forgiven amount of the loan or the def faed amount of the loan becomes ordinary income and so what
00:55:28
happens is you end up having to recognize as income the loan that you never pay back so you can lose
00:55:34
furthermore if there's spread at the time that you exercise between the strike price and the fair market value
00:55:41
of the shares then although if if it's the right kind of option if it's an ISO you can defer paying tax on that spread
00:55:48
however people got whammied by the AMT that that spread still counted for Alternative Minimum Tax so there were a
00:55:55
lot of people during the first Doom bubble who exercised thinking they can't lose because the market was always up
00:56:01
and to the right and then the company would go bust and they would get hit with a big AMT and then they would get
00:56:07
hit with a loan forgiveness issue so that's why everyone stopped doing these things yeah yeah I mean really
00:56:12
importantly getting taxed on that spread you owe that money no matter what no matter what no matter what the IRS
00:56:19
demands that money and the California Franchise Tax Board demands that money so I just want to be very specific so
00:56:25
people understand this if the value of your company's gone up to $2 a share as a private company and your options are
00:56:34
10 cents a share you pay 10 cents a share to get those shares you owe tax on the $190 difference and ultimately if
00:56:42
the company's now worth less than a dollar when you're finally able to sell or it shuts down you actually have money
00:56:49
you have to pay to the IRS the franchise tax board and you did not make enough money to cover the tax bill the way a
00:56:53
lot of these companies do this is they do do a cashless early exercise or cashless exercise loan meaning you don't
00:56:58
even have to put money up to to pay the 10 cents a share the company is just covering it for you to sax this point
00:57:05
you end up getting taxed for that later if you don't pay it back so the whole thing creates a lot of tax obligations
00:57:12
and it's a very complicated structure and system and the reason options exist is so that people could buy their
00:57:18
options and not have to pay taxes at the time that they receive them because if you just get shares in a company rather
00:57:24
than options the value of those shares is your tax bill even if you can't sell the shares well it's income so it's
00:57:31
income and so options were created as a way that you would have a strike and the
00:57:35
strike was the fair market value so you're actually not getting any value today and so you can avoid the tax bill
00:57:41
but now it leads to all these other tax Loops way too complicated for R and file
00:57:45
employees is what it comes down to like I I saw this with like senior Executives
00:57:49
trying to get like the top five positions you know a CFO or something is to reduce your tax B bill
00:57:55
yeah from 50% to 20% and at the end of the day you open up all of these other problems if you try and do that
00:58:01
completely one of the stupidest things about the way this was used is that they would give the exercise loan to
00:58:08
employees who were leaving the company because they said that you know normally when you're a a departing employee from
00:58:14
a company you have three months to exercise your options or you or you lose them so they were saying that this would
00:58:20
be a solution to that right we'll allow you the money to exercise all they were doing is is creating a huge tax problem
00:58:26
for that former employee and you're right the average employee is not sophisticated enough to navigate all of
00:58:32
these issues it's not clear also why you'd want to create this complicated benefit
00:58:37
for departing employees it seems like if you're going to do this you would want to do it for a key exec who's joining
00:58:44
the company that's the only context in which I've seen it by the way yeah same yeah so they were trying to solve a
00:58:49
problem using this complicated device that that really backfired but it's not even a problem that you
00:58:56
should try and solve in that way I mean there's a much simpler solution which is
00:58:59
extend the period of time that employees have to exercise if you don't want them
00:59:03
to lose their option if they don't exercise within three months give them 10 years and there are a bunch of
00:59:07
companies that have done that where they give you a lot longer to exercise the option the trend I'm seeing with
00:59:13
startups like early stage startups seed stage startups which are really indicative of what startups will do
00:59:18
later on hiring people Cash basis paying them hourly outside the United States not having to worry about stock options
00:59:26
not having to worry about healthare just finding a global Workforce and using these thirdparty tools there's a lot of
00:59:33
third party tools to manage employees in Portugal or Manila or Canada or whatever
00:59:38
South America and they're just saying you know what stock options are going to be for like an elite group the top 10%
00:59:44
of the company and then we're going to automate the rest of the jobs with AI and we're going to Outsource and have
00:59:50
hourly workers or full-time contractors outside the United States it's the unden
00:59:55
that's terrible why that's throwing the baby out with the bath water one of the most magical things about stars in
01:00:01
Silicon Valley is that when it worked everyone got rich I mean you have the story of the Google Chef who made $100
01:00:07
million or the Secretary of Microsoft who got to retire it you know and those are extreme examp graffiti artist at
01:00:13
Facebook the graffiti artist he really what was his name David David show the fact of the matter is that Silicon
01:00:19
Valley had a share of the wealth mentality where the rank and fall employees did participate in the owner
01:00:24
ship at the company and they got equity and it was highly motivating or it is highly motivating sure for not just like
01:00:31
lower level employees but mid-level employees and Senior employees to basically get equity in the company
01:00:36
that's one of the things that makes Silicon Valley company special or companies created it outside Silicon
01:00:42
Valley but using this Valley template yeah the know getting rid of options alog together is a terrible over what
01:00:49
they're doing is more like for the core team that's in Silicon Valley options but then like for work that is not
01:00:56
considered as essential you know just hiring people offshore who don't well try to get those people then to work
01:01:02
nights and weekends the way that you might be if you're the owner of the company they're not g to have an
01:01:06
ownership mentality yeah I agree I mean get nine to five workers that way and I think what people are starting to
01:01:13
realize is like maybe there's with these remote workers a lot of people are doing
01:01:17
nine-to-five work and maybe that like hardworking culture just doesn't exist in Solon Valley like it used to you may
01:01:24
be a to find hardworking entrepreneurial like folks that don't necessarily speak
01:01:31
English that now with these AI tools basically become some of your best folks but there are many countries that don't
01:01:38
value Equity don't have an understanding of it and so to Jason's point it's almost more of a complication to try to
01:01:44
give it so that may be the balancing thing sacks that happens which is that all these tools actually allow somebody
01:01:51
in some country that speaks some language that's not English but who can be completely committed who becomes this
01:01:59
Lynch pin of a business and gets paid an extremely great salary in American terms
01:02:05
that makes them rich in their country get to the same place maybe maybe I don't know their infrastructure needs to
01:02:10
be built for stock options in other countries because I don't know that that exists or just pay people more cash
01:02:14
because a lot of folks have different again stock options make sense when you have a differential in taxation between
01:02:21
stock equity and inome yes but in other places where you have a flat tax or no income tax whatsoever what's the
01:02:31
difference yeah if you're in Dubai paying 1% like you could just ship it right yeah ship it I me you can always
01:02:39
go back to a model where people vest shares rather than vest options and those shares vest on a trigger of time
01:02:47
and a liquidity event and that way they can't exercise or real or they won't get
01:02:51
tax prior to the liquidity event happening but then they will will have to pay ordinary income tax rates on
01:02:57
their shares hold on we're making it sound like exercising options is a bad thing it can be a very good thing I mean
01:03:02
if you're an early employee of a startup and the options are worth pennies and you can exercise for I don't know a few
01:03:12
hundred dollars then that's a great tax benefit because you start the clock taking on long-term capital gains
01:03:17
treatment and when you sell those shares eventually if there's a liquidity event
01:03:21
you get turn tax at a capital gains rate not an ordinary income rate that's the tax benefit that's why people want to be
01:03:28
able to exercise their options in the first place the problem is that as you join the company later and later the
01:03:35
strike price of the options goes up and so therefore if you want to exercise you're going to have to write a pretty
01:03:42
big check and so you're going to take a meaningful risk some people do that and that's fine the trouble comes in when
01:03:48
you try to get cute and go around taking that risk by saying okay well the employee doesn't have to go out of
01:03:53
pocket for their exercise price we're going to loan them the money well they thought that they had figured out a way
01:03:58
to avoid taking that risk but as it turns out all you end up doing is potentially incurring AMT and a loan
01:04:05
forgiveness issue so there's no way around the fact that if you want to exercise your options to get the
01:04:11
potential tax benefit of a lower tax rate you have to also take the risk of losing the strike price that of that
01:04:20
check that you write into the company that's a fair trade right if you want the potential benefit you take the
01:04:25
potential risk but that doesn't that doesn't mean that you should never exercise there's a lot of cases again I
01:04:31
think if you're early at a company you should low thousands of dollars low hundreds of dollars go for it there's
01:04:37
all kinds of ways where when the basis is extremely low it's nominally not a lot of money so
01:04:44
you can take the risk but when you start talking about tens of thousands or hundreds of thousands of dollars or
01:04:49
millions of dollars and then using loans and leverage and you got the risk of Ruin coming out
01:04:54
News Bears all the way around no bu all right SX here your read me did you see the poll about Biden's age and his the
01:05:04
unfavorable percentage of people who think he is too old how can I not see that I think the most important thing
01:05:10
that we should talk about is that President Biden has decided to not go through a cognitive test as part of his
01:05:17
annual physical it's the first time it's ever happened Joe Biden now 81 years old
01:05:22
82 at the start of his second if he wins he'll be 86 at the end making him by far
01:05:27
the oldest president ever Trump is 77 he would be 78 and a half when he gets his
01:05:33
second term if he won 82.5 at the end of his term here's a histogram of age of presidents these are
01:05:40
the oldest just to give you a everybody obviously refers to Reagan as the oldest
01:05:44
president prior to this he was a spry 69 at the start of his presidency and by the end he was 77 which is younger
01:05:53
obviously than Biden and Trump today so saak thoughts or shth thoughts let's just say that we've had a bunch of
01:06:03
these issues over the last few years president Trump didn't disclose his tax returns is that a huge issue I think
01:06:14
people made it to be a huge issue but it's more of an issue of judgment but I don't think it fundamentally compromises
01:06:20
his ability to leave the country you had a different issue not with the president but with the current
01:06:27
SE defense secretary who had prostate cancer the disclosures were let's just say somewhat
01:06:37
suboptimal he had a UTI he got emergency admitted to the hospital he just had another acute issue and
01:06:45
those disclosures weren't good but you're talking about an acute kind of a thing where if you're
01:06:52
incapacitated there's a chain of of command that immediately kicks in those are a class of issue that I
01:07:00
think people can find things that are wrong with probably correlated to one's political affiliation the other side
01:07:09
probably cares more than the side that the that the leader on but I think this issue is a really big one and I posted
01:07:16
this clip of kjp basically saying nothing to see here move on and the first comment was Elon which I think
01:07:24
nailed it he said a basic cognitive test should not be something that someone who
01:07:29
controls nuclear strikes is allowed to skip and I think that that is part of the fundamental issue that I have with
01:07:37
what they decided to do here which is that it just massively increases the risk that you could
01:07:43
have somebody that was fundamentally unelected running and making decisions and I think that is a huge issue and
01:07:51
it's an enormous reason why for me this was sort of the straw that broke the camel's back and why I just absolutely
01:07:59
cannot vote for Biden anymore I was trying to find okay I was trying to find a lot of good reasons to support him
01:08:09
stability normaly all of this stuff but this is not what stability looks like and I go again back to this very
01:08:18
simple thing a cognitive test for somebody that can control the ability for us to go to war or for us to
01:08:25
completely eviscerate entire populations through Weaponry that he and he alone controls should be something that is
01:08:33
just mandatory you can't skip it this is not a thing where it's a nice to have I
01:08:38
think it's a must have and in the absence of it I think it compromises his ability to be a legitimate choice and we
01:08:44
do have a minimum age Sachs and what shamat saying is what the majority of Americans are saying ABC News ran a poll
01:08:53
8 6% of Americans across both parties think Biden is too old to be president 59% both said both Biden and Trump were
01:09:01
too old you said on a previous episode Sachs that you thought the public should decide not and that that doesn't need to
01:09:06
be a cognitive test are you sticking with that or do you think you're going to maybe move to chat's position and
01:09:11
mine cognitive test should be mandatory to be president well I think it's a tell
01:09:17
that they won't take the cognitive test because they're worried that he might fail just like it was a tell that they
01:09:22
refused to do the Super Bowl interview which the president always does that's the most softball interview that Biden
01:09:29
could possibly have and they refused to do it obviously because his AIDS and advisers are nervous about how that
01:09:35
might go we had the her report come out where the special counsel investigated that classified documents case for Biden
01:09:43
said that we can't prosecute this guy he'll be too sympathetic a defendant because he's manifestly scile and he'll
01:09:50
come across as an old man who can't remember what happened so that's why they decided not to prosecute him the
01:09:54
Babylon be had a hilarious headline or take on this which was man deemed too cile to stand for trial still fit to run
01:10:03
country that's the situation we're in he can't stand for trial but he's still running the country yeah and the thing
01:10:10
that was most damning about the her report was not just what the special counsil wrote but it was Biden's
01:10:16
reaction to it apparently he demanded that he wanted to go out and do a press conference that very day to refute the a
01:10:24
that his memory was bad or that he was scile and he then did this press conference and it completely backfired
01:10:32
he came across as kind of an old man shaking his fist yelling get off my lawn I mean that was basically the the vibe
01:10:39
that he gave to the press and then the thing that he got wrong was he confused Egypt from Mexico in regards to the
01:10:47
whole crisis in Gaza so it would have been one thing if it was just her saying that Biden was cile but then Biden
01:10:56
himself came out and seemed to confirm it by making these mistakes and gaffs so they know they have a problem so to my
01:11:04
original question would you be in favor and will you change your position here that we should have cognitive test for
01:11:10
the presidency of the United States yes or no I think that the real issue is that Biden would fail such a test I mean
01:11:15
that's the problem is that he is cognitively impaired and the thing to realize about these sorts of conditions
01:11:21
is they're not static there's a trajectory to them so in the same way that Biden is manifestly worse than he
01:11:30
was a year ago or three years ago yeah when he took off he was obviously sharper yeah whatever this condition is
01:11:36
it's going to be worse a year I wouldn't ask you if there time to answer the question but you were choosing not to
01:11:41
answer the question so fre when you say when you say that should the president take a cognitive test sure he should
01:11:47
take a cognitive test should it be the law the land just like we have a 35 year minimum age I'm just asking you to be
01:11:54
specific you could make him take a cognitive test but the point is that let's say the doctor says yeah he's
01:11:59
cognitively impaired is that gonna bar someone from running for office constitutionally no that's not going to
01:12:05
be part of the the Constitutional requirements you have to pass a constitutional amendment yes would it be
01:12:11
a good idea for someone to take a cognitive test part of their physical to be president sure but is that going to
01:12:16
be a constitutional requirement no you can't have some doctor and by the way that that's my whole point like you you
01:12:22
could take a a phys Bill Clinton did it and people used to joke about his cholesterol levels and he would go for a
01:12:27
jog and stop at a McDonald's so I'm not saying by any means that the results should bar you from the ability to run
01:12:34
it should still be up to the voters but just like we would make sure that acute or chronic health conditions were well
01:12:41
understood right the idea that this entire body of judgment which is around your brain around the Judgment of the
01:12:48
president of the United States to basically say no we're good here we can skip skip it I think that that's really
01:12:54
dangerous and it's part and parcel of a systematic set of Behaving now by the Democratic party which I think is really
01:13:04
not where they want to be so the only person that's really stood up to all of this is Dean Phillips yep but he is
01:13:10
being prevented and railroaded from even being able to put that issue on the table so that the voters can decide my
01:13:17
fundamental view is the voter should decide but all of these tests should be done and skipping them is a form of a
01:13:24
tell as David said and I think that this is the most important tell that we've been given about the amount of cognitive
01:13:31
decline that he suffered and John Stewart by the way had the funniest version of this John Stewart's
01:13:37
essentially monologue was like hold on everybody is out here giving sound bites that say he is a chess grandmas in
01:13:45
private but then he shows up in public and it looks like he can't even play checkers yeah freeberg let me let me
01:13:49
jump to you there you shared the clip with us what were your thoughts what are your thoughts on this whole ISS isue
01:13:53
cognitive test I don't I mean I don't think a cognitive test should be the law I because you're starting to get into
01:13:58
edge cases where you'll create lots of different requirements like what's the Strategic test and you know what's the
01:14:04
under pressure test and there's obviously uh a lot of ways that folks can game and Challenge and create new
01:14:10
systems for um a new criteria the system of democracy however is meant to solve these problems the system of democracy
01:14:18
is meant to allow individual voters to say we judge that someone is not equipped or prove us wrong which is what
01:14:26
the voters are saying and doing right now based on the polling data the majority of Voters in the United States
01:14:32
are saying we do not think that this individual is equipped to be president rather than respond to that
01:14:38
with a cognitive test we are stuck with a single candidate and I think it speaks
01:14:44
more to the problem of the democratic caucus and how the electoral system works in the United States today where
01:14:50
the Insiders get to decide who the nominee is for the party and those insiders are self-d they are getting
01:14:57
benefits by putting someone in the seat for next term because that person is in the seat this term and is approving
01:15:04
things that they want this term and so it feels very corrupt and it feels very unfair and very undemocratic I think it
01:15:13
leads to either a sense that the individual voters rise up and say we want a third party because the way that
01:15:19
this two- party system works and the way that the caucus system works isn't or we end up seeing a really unfortunate
01:15:27
outcome where you have a similar sort of like January 6 type event where folks are just fed up with the whole system
01:15:32
and don't trust it and if the citizens lose faith in democracy we're we're in Peril but as John Stewart said in his
01:15:39
monologue it is the responsibility of the citizens of this country to step up and not lose Faith but to take action
01:15:45
and to resolve to a solution we have the power we have the authority as voters and if enough of us get together and say
01:15:52
there should be a third party or we do not want this individual to be the candidate something will change rather
01:15:58
than just resolve to letting the Insiders set the terms of the caucus third party is seeming more and more
01:16:03
viable as we've talked about here people forget the case of Ross perau getting 19% RFK is looking pretty favorable and
01:16:14
the Third Party candidate something I think the two parties dismiss all the time but it is completely possible so
01:16:22
maybe this is the that this is the breakout season for it as saaks alluded to the her report also came out it was
01:16:30
released special counsel Robert her Republican and Trump appointed AG declined to prosecute Biden because he
01:16:39
feared they couldn't reach the standard of Reasonable Doubt as saxs pointed out and I'll just quote from the report
01:16:45
we conclude that the evidence does not establish Mr Biden's guilt Beyond a reasonable doubt they also said he was
01:16:53
an elderly man with a poor memory or that's how a jury would view Biden Democrats felt this was partisan
01:16:59
obviously and then pointed out a bunch of times that Trump has misstated people's names or been confused is there
01:17:09
any correlation here between the two candidates in your mind chamath is Trump right behind Biden in terms of this and
01:17:16
is he too old to run as well and do you think the gaffs that he's made are comparable I think that
01:17:25
he looks much younger and sprightlier than Biden does to be totally honest yeah and look at the schedule he
01:17:31
maintains is nothing like Biden's I mean look Democrats are trying to both sides
01:17:36
the issue because it's their only choice they're stuck with a candidate who's an
01:17:40
obvious Decline and the problem for Democrats wasn't just the her report which like you said jcal they can
01:17:46
dismiss as partisan because they control the media the problem is that Biden himself demanded to go out in front of a
01:17:52
press conference to refute the her report and he ended up confirming it and the people of the United States can just
01:17:58
look at Joe Biden and every time he talks no matter how much they try to hide him when he does speak the American
01:18:04
people are left with the impression that this is somebody who's invisible decline
01:18:08
Trump although he does misstate a word or two here and there does not give that impression Trump maintains a vigorous
01:18:15
schedule not only is he running a presidential campaign he's battling he's in court every other day fighting all
01:18:20
this lawfare he is willing to give interviews in fact he barely turns down a press interview and most importantly
01:18:27
he's willing to do a hostile interview he's willing to step into the lion's den he's will to go on CNN to those town
01:18:33
halls and basically battle I think your with these reporters I think Biden won't
01:18:38
even sit down for the Super Bowl interview which is as much of a softball interview as you're ever going to get
01:18:44
yeah yeah no no I mean that's your that's your best point I think who does a two or three if you
01:18:50
can't do a two or three hour interview I don't think you could be presid who do you think is going to run the country in
01:18:55
the second term if Biden were to win you know that that is the question you think
01:18:59
it's Biden no the staff runs it listen this will be this will be a regent president where the presidency becomes
01:19:06
an office instead of a person and it's run by powerful ministers like in some sort of European system that's what
01:19:14
we'll get or happened under Reagan and the fact of the matter is or or sax as happened under Reagan you can say only
01:19:20
in the last couple of years of Reagan exactly what happed the simility start to or not simility he had Alzheimer's
01:19:25
and it it really I think started to become a factor in the last couple of years it was the last two years yeah but
01:19:32
the first six years were very strong 25% of his presidency who was running the country is the question yeah it's it's a
01:19:38
valid question do you think there's a difference J Cal between 25% and 50% no no it I I think it's like we only have
01:19:45
I'm just looking for other corollaries where this happened and what happened uh who who is no I think the this isn't a
01:19:50
corollary exactly because when he ran when bran ran for a second term he was cognitively sharp it was true that he
01:19:58
was diagnosed with early onset Alzheimer's in the second year of his second term and then that was not
01:20:04
properly disclosed to Americans that was just it was just the beginning in the last two years if you look at if you
01:20:09
look at the 1984 campaign the morning in America campaign Reagan still did debates he was still sharp on his feet
01:20:16
he was debating Mondale remember yeah he gave speeches all the time he maintained
01:20:21
a vigorous schedule there was no evidence of there being a problem my only Point here chof is like does the
01:20:26
public has a right to know when these things happen and it seems to have happened a couple of times in history
01:20:31
well so I would take freedberg side I'm not sure that the public you could say irrespective of whether the public has a
01:20:37
right to know the public has a right to judge and I think in order to judge you have to make yourself available so that
01:20:44
you can actually see it in front of your own eyes or hear it or listen to it or watch it or what have you and that's the
01:20:50
second problem that I think we're starting to see which is it is so controlled how we get to interact with
01:20:59
with our leader and I think that should give people some pause so that they ask themselves why would this
01:21:08
happen and I think that that's worth internalizing here freeberg would you vote for a presidential candidate who
01:21:16
does not debate uh or who does not subject himself to you know serious strenuous confrontational adversarial
01:21:23
interviews those two things are those two things a requirement for you to vote for
01:21:28
somebody I don't know how much that matters anymore the problem with the two- party system is you vote for your
01:21:33
party no I know but to you if like a trump a Biden they just refuse to do it because we we're getting
01:21:39
to the point where maybe they're just going to refuse to actually Biden or Trump trump has refused to do any
01:21:44
debates so maybe they're just both going to refuse to debate would you vote for a
01:21:48
candidate if they refuse to debate is my question to you freeberg I mean I'm just in a very different
01:21:55
mindset on this stuff I'm not excited to vote for a candidate that's not making their priority to fix the fiscal problem
01:22:03
of the US that topic it's not that topic it's like for me it's like there's a car
01:22:08
driving towards a wall and you've got your foot on the gas pedal it's like which guy do you want to keep the foot
01:22:13
on the gas pedal like I don't care like we got to take the foot off the gas pedal that's the point you perceive
01:22:19
there's a difference between the two in spending you're talking okay so you're you're voting for a third party
01:22:24
candidate that would lean towards chamath would you vote for some Party candidate can't win in the system well I
01:22:30
mean they can't until they can right until they do so we'll see chamath would you vote for a candidate who didn't
01:22:38
debate or subject themselves to a rigorous adversarial interview not unless I wanted to Shadow government
01:22:46
okay sack same question to you Jason you're acting as if we need to have all of these tests because we don't don't
01:22:52
know whether Biden has a cognitive problem or not we know I was including Trump in this I'm including Trump in
01:22:57
this like the debate issue I think we also know about Trump trump maintains a vigorous enough schedule he takes enough
01:23:03
difficult interviews he does enough speeches what about the debate part that's the one I'm curious if he refuses
01:23:08
to debate would you would you still be willing to vote for him you know or any candidate you're acting like we need to
01:23:14
judge this question based on proxies for the real issue when the real issue is that we know one of these candidates has
01:23:21
basically dementia he's invisible decline I'm not asking you this about Biden I'm asking you in general because
01:23:28
we're talking about Norms one of the Norms of you know releasing your taxes I'm I'm not asking about but I'm asking
01:23:34
subject from the core substantive issue we have already all agreed that Biden is
01:23:39
in cognitive decline I'm asking you another question I'm opening up the aperture as the moderator here and I'm
01:23:44
asking you to address another question I think candidates should debate period candidates should debate that's what I'm
01:23:49
asking you I don't know why you're going back and telling me what I think because
01:23:52
I think that the tactic of Democrats the mainstream media right now is that they
01:23:56
can't there's no way for them to paper over or deny the visible reality of Biden's decline so they're trying to
01:24:03
muddy up the waters they're trying to claim well Trump is old too or that uh Trump refused to debate too they're
01:24:10
trying to both sides the issue I think we all know that Biden has a problem that Trump does not have now I think
01:24:18
that chamath is also right that there's a lot of Democrats who are comfortable voting for a shadow government they're
01:24:24
fine with the presidency being a figurehead or a rubber stamp and I think the reason why they're fine with it is
01:24:30
because Democrats basically control most of our ruling institutions really all of
01:24:34
them I don't think you can name one major institution run by Republicans and they don't need a president to do
01:24:41
anything other than be a rubber stamp Republicans are looking for something different Republicans need a president
01:24:46
who's willing to push back on the permanent bureaucracy in Washington push back on the Deep State or the state
01:24:53
department creating new Wars they want someone to push back on Wall Street they want someone to push back on all these
01:24:59
institutions Republicans are populists are looking for a Tribune of the plebs basically to push back on this
01:25:06
senatorial class that runs Washington for their own benefit Democrats are different Democrats are the ruling Elite
01:25:13
and they're fine with the president basically just being a a figurehead who will sign their legislation veto veto
01:25:21
bills they like does he drop out jth at this point is is this the moment we're going to look back on and say this is
01:25:27
the peak when that 86% poll comes out and all this negative press do you think Biden is there's an exit ramp here and
01:25:34
do you think there'll be a different candidate fielded by the Democrats no this is uh this was their
01:25:40
way of saying we're going for it okay freeer you have any thoughts on that you think they'll make a switch on Biden
01:25:47
yeah I think there's a chance I think there's a chance last week I had a few conversations that led me to think that
01:25:52
there not super influential people in the party but people that are in the party that you know have connections to
01:25:58
people of influence in the party I'd love to hear Jam's like conversations he may have had
01:26:04
around this stuff too but people are not happy in the party yeah very like very much unhappy and everyone would love to
01:26:12
see someone else now the assumption is Gavin is going to be shoved in that seat and that's also a losing proposition so
01:26:18
if you shove Gavin in the seat you're in a worse place than you are with Biden in
01:26:22
the with respect your shot at winning and it's a little late now but I still think that there's a chance saak what do
01:26:28
you think Biden drops out first of all the only reason these people are unhappy is because they think that Biden's
01:26:33
problems have become so manifest that it might cost him the election that's what
01:26:36
they're worried about they don't care about the fact that the B Biden presidency will be run by staffers as
01:26:43
long as those staffers will basically do what they want sign their legislation or
01:26:47
veto drop the question we're asking you will he drop out no he's already said he
01:26:51
won't look the problem that people in the Democratic party have who have this concern about B Biden losing the
01:26:58
election because of this cognitive issue is that there is no mechanism to replace
01:27:03
a candidate who has won all the necessary primary votes against his will Biden has said he's going to be the
01:27:11
nominee he has no desire to to drop out so unless he changes his mind or there's
01:27:15
some Act of God he's going to be the nominee the time for Democrats to make this change was a year ago it required
01:27:22
mounting a primary challenge to Biden the way that Dean Phillips has done the problem is that the Democratic party
01:27:29
elders and the powerful people in the party said we're going with Biden and so no one wanted to run against him and
01:27:35
they basically set up the primary calendar so that Biden would win and he is going to
01:27:40
win he'll have all the primary votes he needs locked up by the end of March and Dean Philips is not going to be able to
01:27:47
basically stop him so there is no mechanism to remove Biden he's going to be the candidate you know barring Act of
01:27:53
God unless he can be persuaded to step down so it's not going to happen what do you think about this new third party
01:28:00
effort in DC No Labels have you heard about it have you been pitched it I've heard of it I haven't been pitched it
01:28:06
jamat have you been pitched it I hosted a dinner at my house with some folks about it and yeah I mean I think like it
01:28:14
could be interesting I think that the is there room for a third party in the country you think yes and I and I think
01:28:19
that there is a very reasonable chance and I would put reasonable somewhere between 30
01:28:27
and 50% that this third party gets created after the presidential election and that is the one of the very
01:28:38
likely outcomes of rfk's candidacy because it is an infrastructure that will have gotten on
01:28:48
presidential ballots in 50 States and it's an infrastructure that if people are willing to fund specifically no
01:28:54
labels and other people I think the artifact could be a third party and if if RFK can
01:29:00
get 30 plus perc support which in some states I think he will I think that there's a decent chance that would be an
01:29:09
enormous outcome obviously the most disruptive outcome for RFK would be that he won the presidency but I'm just
01:29:14
saying that a very powerful outcome that has huge longitudinal benefits to America
01:29:20
would be that his candidate see essentially is the is the founding story of a third party
01:29:28
yeah and that was the shame of what happened with perau I think that there was a chance that perau could have done
01:29:32
that and he must have been under just an enormous amount of pressure I can't even
01:29:36
imagine what he must have dealt with but that could have been the artifact back then but it definitely can be the
01:29:42
artifact today so we'll see they haven't announced either and there's no timeline for them
01:29:49
announcing they've asked to come on this program many times to just talk about the concept I think like they they want
01:29:55
to have like the executive director on or yeah they've asked over love yeah I was like well maybe when you pick a
01:30:02
candidate that would be a better time than just talking about it in the abstract I think it's a great idea I
01:30:08
think that's what Americans want so maybe we the elections in nine months we're running out of time I mean it's
01:30:14
entirely too late to be talking about new candidates who aren't even in the race not going to happen I mean this
01:30:19
whole Gava new some things a fantasy even if Biden were to see the light and step down be pressured to do that KLA
01:30:27
Harris just said I'm ready to serve she wants to be president and even though she's not scile she's actually even more
01:30:34
unpopular than Biden so you have that huge problem in the Democratic party that even if somehow they could Prevail
01:30:40
on Biden to step down now you have KLA Harris ready to serve so how do you pass over her he's not stepping down he
01:30:47
didn't go through all of this craziness this past week to step down they didn't evade the cognitive test for him to step
01:30:54
down they're not doing all of that they're not keeping him away from the media so that he can step down none of
01:30:59
that is happening they're not having people come out with the sound bites about how he's got Mastery of everything
01:31:05
in private so that he can step down he's running Donald Trump is running and RFK
01:31:11
is running those will be the three people on the ballot in November of 2024 Biden's staff are the absolute last
01:31:19
people who would ever pressure him to step down why because they'd be out of a job I mean from the staff's point of
01:31:26
view having a weak president who basically they administer it's not just a job it's like you you allocate the
01:31:33
future as the President of the United States you decide it's the best it's the best situation possible for a staffer is
01:31:38
to have a president who is borderline incapacitated and you get to just do whatever you want you are the
01:31:44
president yeah jcal give us a rundown of the Tucker Putin thing what' you think just as a programming note it came out
01:31:50
it dropped right after we taped we would have covered it obviously we W not covering it for a reason I give him a B
01:31:55
on it could have been better but it wasn't bad all things considered I don't think any journalist is ever going to be
01:32:03
able to trap Putin or get good information out of him or any of those things and if you have somebody like
01:32:09
Tucker who is obviously very sympathetic to Russia and who believes that you know
01:32:14
the West forced Putin to invade Ukraine you know you're not going to get like a really great interview I did think he
01:32:20
had a great moment where he asked for the Wall Street Journal reporter back at that moment to take back with him he did
01:32:28
a lot of softball questions he asked 43 questions during the interview about 15 of them were kind of
01:32:34
softballs and he had about six fast balls but he lost control over the interview very early obviously if you
01:32:40
watched it and that's just kind you're like Chris Collinsworth here I'm not asking for a technical analysis
01:32:48
of the play I'm asking you what did you think of the interview what did you take
01:32:52
away from it what did you think going in and was there a Delta and a change going
01:32:56
out just a normal no CU I I've watched the other interviews I watch Megan Kelly as I watched NBC's he's done I did a
01:33:03
research on it he's done about nine interviews in the last 10 years so it's not like this was anything new and when
01:33:09
you watch the other ones it's just Putin spinning and pontificating and nothing gets accomplished he doesn't answer hard
01:33:15
questions so I had six questions I I said he should ask him he did ask two of them but he didn't asked the other
01:33:22
really hard questions I had and so you know he's not I wouldn't say tucker is like the
01:33:30
useful idiot like Hillary Clinton said but he is biased and he didn't ask enough hard questions I would have asked
01:33:36
three or four harder questions but the you're not going to get a lot out of Putin this guy's like a KGB stazzy
01:33:41
trained manipulator of media it's his speciality I had two really interesting takeaways the first was if you had
01:33:51
wanted to see see some crazy madman you actually left that interview thinking okay this is a person that's leading a
01:33:58
nation that has a deep historical context that goes back to basically the dawn of
01:34:05
Christianity of which he has a pretty deep grasp of and it seems that his decisions are rooted in a multi-
01:34:13
thousand year history I didn't know that and that was an interesting takeaway for
01:34:17
me so that was a broad strategic takeaway so he was a little professorial he was a little historical and all of
01:34:25
that to me made it harder for me to leave that interview thinking that he was a crazy person in fact it's more
01:34:31
like he's a bit of a methodical thinker I guess the second is much more tactical and I thought super
01:34:39
salacious and I wish Tucker would have dug into it which is that in 1999 when he was meeting Bill Clinton he asked
01:34:46
Bill Clinton can we join NATO and Bill Clinton said to him yes and let's go hash out the details over
01:34:55
dinner and then that night they have dinner and Clinton says my team says no and to me when I looked at the Arc of
01:35:04
that interview that was one of these really unique moments where it explains to me so much which is a country that's
01:35:13
at the that's birthing a democracy where Putin transitioning from yelton had to make a lot of very
01:35:21
important difficult decisions the idea that he would have made an in treaty to Clinton to say Can We join NATO and then
01:35:28
to be told yes and then rebuffed I suspect has an underlying amount of emotion that explains a lot of what's
01:35:36
happened since and I think that that should have been explored much much more I think they glossed over it and they
01:35:41
went on but it was a really important moment those are my two big takeaways from that from that from that interview
01:35:47
did you watching freeberg any thoughts I don't understand I think when he he said
01:35:51
that point he was talking in the theoretical not in the I'd like to join NATO because the intention of NATO was
01:35:58
to create a unified defense against the Russian Armament which is the most significant besides the US and at that
01:36:06
point before China's Rise um ahead of China so I think it doesn't make sense to be like hey there's two sides of this
01:36:16
defense system let's unify the two sides of the defense system it literally is a
01:36:21
sensical propos not true not true in 1999 that's totally not true what was the other side 1999 was where we've
01:36:29
tored this whole thing down it's no longer the Soviet Union so we're going to democracy it's probably just an
01:36:36
organization that looks like any other organization like aan what's aan well aan is an organization could they have
01:36:43
military defenses supposedly it's but it's a grab bag of countries what's the bricks it's another grab bag of
01:36:49
countries this this is a defense Alliance this isn't an economic Alliance but in that moment the the the
01:36:55
justification for NATO was the least powerful it had ever been so in some ways joining NATO would have been akin
01:37:01
to dismantling NATO and saying we don't need this anymore that's the point like why would he say why would the US and
01:37:06
the Western Europe allies say let's dismantle NATO that's effectively what historical context of that moment is
01:37:12
important he did it at the moment where they were transitioning to a democracy I
01:37:16
don't know it's like saying let's get rid of the defense system when Russia was transforming into a democracy well
01:37:20
when the US was breaking down and transitioning to a democracy yeah how did that democracy go if there was if
01:37:25
there was massive disarmament in Russia the question the question is what would have happened had they said yes and
01:37:30
Clinton took a different path all I'm saying is guys without prejudging it that that was I think a very important
01:37:37
context that is not understood in history I wouldn't dismiss it no no I certainly I think everybody raised their
01:37:44
eyes like really that happened what did you think of that moment and also Clinton who is so steeped in history and
01:37:51
policy is not somebody that would say something like that in an uncalculated way only to pull back that does not seem
01:37:59
and I know Bill Clinton that is not who he is so just in that context he is a very thoughtful person so he would have
01:38:06
said that thinking wow this makes a lot of sense on many dimensions and again the concept was it was a it was kind of
01:38:14
like let's sit down for dinner and figure out the details and it's like my team says no and of course the team
01:38:19
would say no because it's like well also we haven't heard from Clinton you know confirming this or how it was
01:38:26
structured this doesn't guys it sounds like it was a theoretical like that was my
01:38:30
interpretation he said it and kind of shocked Clinton he's like let me look into that that's crazy uh what did you
01:38:36
think of that moment Sachs and then overall well Jason the fact that Putin sought to join NATO or at least made
01:38:43
that offer is a welln well-documented historical fact this is definitely not the first time this has been raised more
01:38:50
generally I think what you heard in that interview once you got past the the sort
01:38:53
of the ancient history lecture is that Putin when he first came to power sought cordial relations with the US and with
01:39:02
American presidents and he was rebuffed his attempt to join NATO was rebuffed more
01:39:09
generally the US reneged on its promise to gorbachov not to expand Nato one inch
01:39:14
Eastward and instead we began multiple waves of of NATO expansion and I think it's very important to understand that
01:39:21
you don't need to believe Putin on this or trust Putin American diplomats were saying at the time what the
01:39:29
ramifications of this would be and I just want to put two data points in evidence one is George Kennan who was
01:39:36
the father of the containment Doctrine during the Cold War he was our most respected Cold War Diplomat said in the
01:39:43
late 90s when they were first debating on NATO expansion he said that quote expanding NATO would be the most fateful
01:39:50
ER of American policy in the entire postc Cold War era so think about it this is somebody who's been around since
01:39:56
the 1940s he was our Chief Diplomat and defined our containment policy towards the Soviet Union and he said that
01:40:04
expanding NATO would be the most fateful era of American foreign policy and he said that a decision like that would
01:40:10
inflame the Nationalist anti-western and militaristic tendencies in Russian opinion it would have an adverse effect
01:40:17
on the development of Russian democracy and it would restore the atmosphere of the Cold War so this is somebody who
01:40:23
really knew what he was talking about and warned us not to go down this path and then in 2008 second data point is
01:40:29
that Bill Burns who is our ambassador to Moscow who is now Joe Biden's own CIA director wrote a memo to conal arice who
01:40:38
was then Secretary of State called net means net and what he said in that memo is that NATO expansion to Ukraine
01:40:45
specifically is the brightest of all red lines for the entire Russian Elite not just Putin and in other words the idea
01:40:52
of bringing Ukraine into NATO was an idea that was rejected not just by Putin or by hardliners but even by liberal
01:40:59
reformers inside of Russia and nevertheless we persisted in this policy and so I
01:41:05
think what you hear in that interview are a lot of points by Putin around how he sought good relations with the west
01:41:15
but what was our reaction to him pressure pressure pressure we supported uh the maidon in 2014 we tried to expand
01:41:22
NATO into his backyard on his most vulnerable border and then finally we supported these hard right ultr
01:41:29
nationalist Neo-Nazi elements in Ukraine now whether or not you believe everything that Putin said my takeaway
01:41:37
is that this was a rational actor this was not a Madman this is somebody who we could have negotiated with and in fact
01:41:46
there was still an opportunity before this war to prevent the war by taking NATO expansion off the table we refused
01:41:52
to do that and even today there was a new press story that in the wake of this interview the bid Administration still
01:41:59
rejects entering negotiations with Russia even though Putin held out that Olive Branch in that interview
01:42:06
so you know again it's just uh very sad how we have conducted American Russian relations over the last 25 years we
01:42:16
turned what could have been an ally into an enemy and proven George Kenan correct I think
01:42:23
this has been the most faithful air of American policy in the last 30 years all right uh what an amazing episode has
01:42:30
this been I think we talked about Tucker and Putin enough love you boys for the sultant of science the dictator and the
01:42:36
Rainman I am the world's greatest moderator we'll see you next time byebye bye-bye let your winners
01:42:45
ride Rainman David in said we open source it to the fans and they've just gone crazy with it
01:42:54
love you queen of [Music] K [Music] besties my dog taking your [Music] driveway oh man myit will meet me at we
01:43:14
should all just get a room and just have one big huge orgy cuz they're all this useless it's like this like sexual
01:43:18
tension that they just need to release somehow your your we need to get mered [Music]
01:43:35
all [Music] I'm