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oh no gosh I'm having some technical difficulties freeberg there's something happening oh you got a bit oh something
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breaking in what's happening oh no my camera is not working but I sense something is happening guys it's like a
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transformation I'm going through you're not going to believe it yes it is I nois
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I'm here I'm here nois has arrived I have predicted the hot swap Sachs can I get my flowers now from you
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saxs you you need to bring yeah I give you I absolutely give you credit for that you also predicted a speedrun
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primary which is the opposite of what happened okay so one out of two is not bad though no Stanis did not account for
00:00:41
the Democratic party being run by the Deep State H but I'm having a vision producer Nick there's a vision for you
00:00:53
coming in to view yes your uncle has been bought out of the o podcast is going for Maga and
00:01:02
he he got the $25 million buyout deal and he gave you 20% we're leaving we're going to start a new podcast and Jared
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Kushner is the new moderator here oh no wait it's JD no it's Alex Jones starting
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next week Alex Jones the new host oh wait I'm going away let your winners ride Rainman
00:01:34
David and instead we open source it to the fans and they've just gone [Music] crazy all right let's get started here
00:01:44
we've got a full docket we've got Civil Wars everything is going down in all in land it is episode 189 you're not done
00:01:54
with us yet folks the world's number one podcast is still publishing the world is
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still spinning hey did you announce that you're you've moved to Texas I did I did
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I I did a little tweet I uh we moved to Austin a little earlier this year we have a horse ranch and um you know we've
00:02:12
always wanted to move to Austin we looked during the pandemic thanks for asking jamath and we wanted to have a
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ranch and horses and live a more homesteading lifestyle and obviously a lot of our friends are in Austin so I'll
00:02:24
still be spending a lot of time in the valley in New York like I always do in Miami but the home base and the girls
00:02:30
are going to school and in Austin how is it going so far it's super hot you know
00:02:36
isn't it in the summer the summers are hot but most people DeCamp so we'll DeCamp for Tahoe or Park City or
00:02:42
something during the summer months and the winter months uh to go skiing in get a little Lake time or whatever and uh
00:02:48
yeah we're really really excited we found an incredible horse farm and we're going to raise animals and horses and
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just enjoy these last years with the girls while um you know some big announcements coming in terms of my
00:03:02
accelerator and my investing in startups in Austin so I'll I'll save those announcements for maybe the fourth
00:03:08
quarter some big announcements will happen and um yeah I'm just super excited obviously I'm going to miss you
00:03:14
know the weekly poker game but I will be back uh on the regular and uh we'll just
00:03:19
do a double session play Friday Saturdays we'll do you got to get this for two days in a row we'll just do a
00:03:24
full Friday session everybody take up Fridays I'm sad to see you go the one thing I'm saying about is like missing
00:03:31
the Thursday game but I'll be back regular don't forget science Corner today we got a great science Corner
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lined up absolutely ABS is looking forward to it SX has been texting me all week about it he's like I can't wait for
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science corner I'm thrilled he was shaking nervously he's ready sax does not look amused all right
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let's get started whiz has declined Google's 223 billion offer and it intends to IPO some big news there last
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week we talked about Google offering to acquire this Cloud security startup for 23 billion CNBC reported whiz decline
00:04:04
Google's offer wow that's big time because whiz was valued at 12 billion in its most recent funding round they've
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got about 500 million in ARR uh so this $23 billion is a massive massive 50 times current Revenue 23 or so
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times forward looking Revenue they think they'll hit a a billion in AR this is a
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company that was founded in 2020 and just so if you don't know what they do they help people secure their
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data in clouds like AWS Azure Google Cloud all that good stuff but high growth SAS businesses are trading at a
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10x Ford Revenue multiple there's the chart this is obviously an absurd premium and two potential reasons that I
00:04:48
can think of and I'm curious your positions gentlemen of why they would do this I guess chth there's two reasons
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one they think they can grow this company at a high percentage maybe fill in that premium Google was willing to
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pay or maybe they're scared that they can't get this deal through you know Regulators what's your
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take here and then we'll go talk about the wider cloud and Google cloud and AWS in a moment but what what's your initial
00:05:14
take here of why they would do this tomor I actually wonder whether this deal would have had more probability of
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happening had the whole AT&T snowflake leak not happened because I think that when you have moments like
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this there's a non-trivial possibility that it supercharges sales even more I think the reality is that if
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you're a hyperscaler so if you're Amazon or Google or Microsoft your business is pretty
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fragile and brittle if the services you provide or the services that third parties like snowflake provide through
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you are not reliable and so I've never heard of a business that has generated so much ARR so quickly I mean from zero
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to half a billion dollars in four or five years I mean how do you even build the product surface area quick enough to
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capture that much revenue I think it just goes to show you how bad security is in the cloud and how needed it is so
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it doesn't surprise me that Google wouldn't buy something like this I think Amazon and and Microsoft would
00:06:27
probably want something like it as well I suspect that if you had to guess why they said no is because they thought
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that they could grow Revenue much faster because of recent events as well as their own just natural momentum and I
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think that if if this thing had not happened I wonder whether they wouldn't have just sold all right sax I want to
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get your take on this after showing you a couple charts here Google's Cloud Revenue growth has
00:06:53
been absolutely stunning here is a chart they're going to hit gosh in the first half they did almost 20 billion so
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they're on a run rate of $40 billion this year last year they did 33 back in 2017 he only did four and if you compare
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this to Amazon's AWS again these are cloud services people can buy compute in the cloud AWS if you look at those first
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seven years the all the crack all-in research team put these side by side uh Google is tracking almost identical in
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Revenue to aws's interestingly meta and and apple do not have a competitor here you said on this podcast shth I think
00:07:33
last year that would be a pretty bold move by Apple to have a cloud computing platform since they have all the app
00:07:40
developers sax what what do you think of this just tremendous run by Google Cloud
00:07:46
also known as gcp in the industry well all the cloud service providers are doing extremely well I mean cloud is
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still the future of software and the cloud service providers are still growing really strongly on Whiz I think
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the most likely explanation is that they just want to keep building this a standalone company I think they're
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probably also worried that they can't get the deal through the multiples that we have right now are not that insane I
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mean I think the long-term median software multiple is around a seven so you know you see here the mid growth
00:08:15
median 7.7 we're about tracking at the Historical preco mean and we had that really frothy bubbly period in 2020 and
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2021 and that's clearly over now in terms of how our friends at altimer break this down I think that high growth
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means a 30% or greater growth rate and then I think the mid- tier is more like what is it like 10 or 15% to 30% and
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then the low growth is like you know yeah under 10 yeah so my point is if whiz is growing at 100% 100% I mean I
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don't know if it's still growing at 100% but I I mean I guess they're projecting
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% yeah would be yeah they're they're projecting a billion in AR next year up from what is it roughly
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500 like that offer may not be that crazy again you know you're getting 10 times at a 30% average growth rate so
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you know let's say they get to a billion in AR next year and then they're forecasting you know whatever it is the
00:09:23
the year after you know the 23 may be reasonable so I can see why these guys would just want to go for it if they
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think they're building a big stand loone company uh freeberg let's talk a little
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since you were a googler at some point um this gcp product maybe you could tell us a little bit about uh and I know you
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know some of the people running it um how meaningful this is becoming to Google or how much of a priority it is
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uh YouTube obviously Android priorities there at the company then you have like the next year down Nest weo you know
00:09:55
some of those other projects but but how important is gcp right now to Google well gcp in the last quarter did 10.3
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billion in Revenue which is up from eight billion in Revenue the year before in the same quarter of the year before
00:10:09
and importantly in this past quarter they're running at a $1.2 billion operating profit out of
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gcp so you know if you kind of think about what cloud margin should be over time and kind of call it 20 to 30%
00:10:21
margin This Cloud business could be generating 20 to30 billion a year of free cash
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flow now in the last year if you kind of look at or even if you look at the last
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quarter annualized Google's generating currently about $60 billion a year in free cash flow as an overall
00:10:38
organization alphabet is um and they have over a hundred billion in cash so you know what can I do to accelerate
00:10:47
This Cloud outcome given the risks the challenges The Slowdown with respect to the core consumer business cloud and AI
00:10:56
based tools really is where it's at and so Google's asking this important strategic question I would imagine what
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can we do to accelerate outcomes in the cloud and what can we do that is going to be big enough to matter and what can
00:11:11
we do that is going to past antitrust muster so we can actually get it through antitrust authorities so Cloud security
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kind of comes top of mind it's a fast growing segment as evidenced by the results with with whiz and it's a an
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opportunity for Google to cross sell and to secure more enterpr customers and theoretically cross sell more Enterprise
00:11:32
Revenue by getting folks on a platform um that Google could now offer I would imagine that what saak is saying
00:11:40
is probably right I have absolutely no sense of what these individuals and board members at whiz are thinking but I
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think what saak is saying is right this is an incredibly fast growing business Peter teal made the comment once which I
00:11:50
think is totally right either the buyer pays way too much or the seller sells way too early um when you have a fast
00:11:59
growing business like this it's really an important question to kind of acknowledge that if whiz continues to
00:12:04
grow at this rate it's conceivable they could be in the range of a Palo Alto networks's hundred billion dollar market
00:12:09
cap in a couple of years um you know given uh given this momentum and if you if you progress it forward so if I was
00:12:16
them I would ask that question could we reach a 100 billion if we feel reasonable reasonably confident this may
00:12:21
be a risk worth taking and what's the downside right the downside is they go public next year anyway and maybe
00:12:26
they're only valued at 15 billion or 20 billion there's not a lot of downside from this offer and certainly seems to
00:12:32
be quite a bit of upside but I think for cloud the thing to to watch is what they're going to do next Google wants to
00:12:37
accelerate Beyond AWS they want to become the leader and they're going to look for other sizable transactions that
00:12:43
will pass antitrust muster and so I think you could see them perhaps looking at some public m&a in the same space and
00:12:50
I wouldn't be surprised to see them start to get active in that sense YouTube and gcp are the are the two
00:12:55
money printing machines inside the organization that have actually paid off Android it's paid off in terms of
00:13:00
dumping more search you know from the default search buttons or boxes but I guess the to steal me on the
00:13:07
other side if you're on the board and you want your cash you know you get 100% of it you
00:13:13
take no risk and what if Google decides they're going to make this product free and bundle it as we saw Microsoft do in
00:13:20
a number of cases and they just Microsoft teams this or Internet explore it I guess that would be the risk is if
00:13:25
Google feels uh some Vendetta here and puts this product out for free as you alluded to chth it was a big week for
00:13:34
cyber security crowd strike had a really rough week last week when they knocked out eight and a half million Windows
00:13:39
machines just to briefly explain what happened here obviously whiz is cyber secur and so is crowd strike crowd
00:13:47
strike instead of working on data sets in the cloud they work on securing your laptop your desktop your servers all
00:13:53
that kind of stuff for threats and uh they did an update and when they did their update a sensor configuration
00:13:59
update as they called it to Windows machines they basically bricked them and this wasn't a Cyber attack they a cyber
00:14:07
security company they weren't attacked they updated it and it crashed all these machines and these machines all needed
00:14:13
to have a hard reset by it it wasn't something that could just be field swapped apparently people had to go back
00:14:18
to their offices in some cases Delta was hit hardest they canceled over 6,000 flights and there's a Department of
00:14:25
Transportation investigation going on now Shares are down 25% since Friday so that represents $24 billion in market
00:14:33
cap crowd strike CEO it's been uh clown for his apology and explanation and uh the good news though is they sent
00:14:41
everybody an Uber Eats gift card so I'm super happy about that shamat saaks looking at this and duve telling with
00:14:48
the last story this is going to be an ongoing story and and one of the big trends in our industry yeah major
00:14:57
outages like this I I think the reality is that that code is still really brittle and there's gaping holes
00:15:04
everywhere and I suspect that the reason why foreign adversaries don't hack us is
00:15:10
because we could hack them back and so I think it's almost like a mutually assured destruction is the only reason
00:15:15
why these things stay up every day so at some point we're going to write better code maybe these AI agents will do it
00:15:22
and there won't be like memory leaks and all this other random stuff but in the meantime
00:15:29
I think you just have to assume that everybody will get access to all of your information and that eventually
00:15:35
everything is hacked and everything is leaked yeah and act accordingly and act accordingly yeah assume every the worst
00:15:42
conversation you ever had on social media or on uh DMS is going to come out all right I think we've kind of finished
00:15:49
this anybody have any thoughts on the scratch strike thing seems like it's over now I don't have a lot to say about
00:15:53
them except actually this is that that company has some murky connections to the Deep state
00:16:00
and yeah well apparently yeah their fingerprints were all over you know Hillary's bleach
00:16:06
server then there's been other reports which I don't know exactly what to make of I can say this that in the wake of
00:16:13
this Elon announced that he was removing crowd strike from any of his company's servers similarly I had my it department
00:16:20
check and make sure that we didn't have it running anywhere we don't I'm just gonna be frank I don't trust this
00:16:25
company all right there you have it uh deep state tinfoil hat deep State deep State AC
00:16:32
accusation tin foil hat today I forgot you believe what you want that's what I don't this is the first time hearing
00:16:38
about it I don't have my chin foil hat here but uh who knows I guess uh use your products if you want to you have it
00:16:46
folks and sax is as a puts his endorsement B paler definitely not deep State paler paler look there's no question
00:16:55
that paler paler sells into the deep state but know that that makes a deep State well I they're on your team as
00:17:02
oppos to the other so no hold on I'm not on any team and respect I don't really understand what
00:17:09
you're saying there I'm just goof I have shares in the company I think it's a good investment oh okay there have all
00:17:15
right let's go to the stock market it just had its first days I gotta get a t hat for a bit here one thing I want to
00:17:21
say none of us are at any risk of running paler in our servers okay crowd strike is running in the background of
00:17:28
many many companies who may not even be fully aware of it and they were certainly surprised when all those
00:17:33
Airlines computers went down right so my only point is maybe you should make sure
00:17:39
about whether you're running their products or not and then make a conscious decision whether you think
00:17:43
that's a good idea that's all that's all just a little tip from the more you know
00:17:47
from David J J move on I'm trying I'm trying my best all right the stock market just had its worst day since 2020
00:17:55
on Wednesday clearly this is because of the January 6th insurrection and the NASDAQ which is the most tech I'm joking
00:18:01
the NASDAQ which is the most tech heavy F 3.6% S&P down 2.3% bunch of The Magnificent Seven
00:18:07
companies were in the red but you got to put this in context NASDAQ and S&P still
00:18:12
up around 15% for the first half of the year record setting territory obviously if that holds up or
00:18:20
increases there's a lot of theories about this that people are rotating out the max 7 tech stocks which were a place
00:18:26
that maybe got a little overheated with the AI here's the top gainers that are not in
00:18:34
the max 7 as you can see financials energy materials over the last six months S&P financials up 11 S&P energy 9
00:18:44
S&P materials 9% as well broader index up 11 as we said Tessa dropped 12% after missing on earnings but they had a
00:18:51
massive runup earlier this year Google dropped 5% I guess YouTube was what most people
00:18:58
pointed to their revenue came in lower than expected so maybe some softness in the advertising Market which would then
00:19:03
correlate with consumers Nvidia down 7% metad down 6% chth any thoughts here on what we're
00:19:12
saying you talked a lot about the consumer weakening on an episode about six weeks ago I believe so is this just
00:19:18
the manifestation of that prediction you made not this specific thing I think that when you
00:19:24
see a broad-based set of Revenue misses that that will kind of mean that the consumer is really Under Pressure I
00:19:30
think I still think that that's more in the fall but we're headed in that direction
00:19:36
I think what happened here is that the market is just priced to Perfection and all of a sudden we had all kinds of
00:19:43
volatility you had the former president almost assassinated you have the current
00:19:48
sitting president resigned you have a somewhat convoluted process to pick who replaced him that at a minimum
00:19:56
was opaque and all of these things create doubt and anxiety in the people that own Financial
00:20:04
assets and so if you saw the volatility index the vix that has spiked and so whenever you see that stuff happen
00:20:11
people go risk off right and when you go risk off what do you sell you sell the things that are deepest in the money
00:20:18
where you think that they probably don't have that much more room to run and that
00:20:22
was the mag 7 and so what you actually saw was a huge rotation out of those companies into everything but those S
00:20:29
names and I think that that's a pretty reasonable thing to do so I think we're in the part of the cycle where people
00:20:35
are getting a little bit more sober and risk managing we're also in the middle of the Summer where a lot more vacation
00:20:42
is taken which how it manifests is that people tend to be frankly more riskof and be more liquid because a lot of
00:20:50
people are in and out of the office and I think it the real setup is for what happens in September maybe
00:20:56
there's a cut which will help maybe maybe there isn't which won't help and then the whole consumer cycle the
00:21:02
consumer credit cycle that doesn't look good to be honest and so I think the fall is going
00:21:08
to be complicated yeah absolutely what an eventful week on a political front we'll get towards that in a moment but
00:21:15
uh freeberg your thoughts here is it just people trimming their perfect positions and maybe a dispersion going
00:21:21
out people wanting to own some other assets that maybe have been undervalued in this market cycle
00:21:29
no I think it's definitely this mini AI bubble deflating a bit and transactions are let me get out of some
00:21:39
of these high multiple tech stocks that are expected to grow rapidly get of AI and shift more into Stable Market
00:21:46
recovery interest rates are going to get cut type trades that will benefit there
00:21:51
so I think it's just a rebalancing and as a result of the high concentration of the mag 7 in the S&P and in the q's the
00:21:57
indes look like they're coming down but yeah there's obviously a lot of complexity in what's going on in the
00:22:03
economy right now but I do think that that's been a big trade for PMS for portfolio managers over the last couple
00:22:08
of weeks makes sense yes ax if you owned a bunch of Nvidia and it ran up meta Google Apple other companies that ran
00:22:16
way up you might want to trim your position here and and deploy capital and balance things out yeah sure I just
00:22:22
don't want to overreact or over read into one day in the market I mean today is up yesterday was down it's these are
00:22:29
blips in the grand scheme of things even a 2 to 3% move is just not that unusual
00:22:33
yeah especially given the context but definitely something worth keeping an eye on is what the earnings reports will
00:22:41
say for Q3 and Q4 and those will come out towards the end of the year okay some interesting news Sam wman did a Ubi
00:22:51
experiment a couple of years ago he put 14 of the $60 million into this experiment that was done by by a firm
00:22:59
called open research that's a nonprofit group that was founded in 2015 out of an
00:23:05
accelerator called why combinator first I'm hearing of that one well here's the experiment they did this took place
00:23:11
between November of 2020 October of 2023 3,000 low-income adults in Texas and Illinois making just under $30,000 a
00:23:19
year on average were selected a thousand participants received $1,000 a month for
00:23:25
3 years so on top of the $30,000 they got1 $2,000 a year taxfree so that's nearly a 50% pay increase for doing no
00:23:33
more work 2,000 control participants receive $50 per month over the same period and the research collected and
00:23:41
studied a bunch of data they did blood draws to do uh health impact uh they had a custom app that tracked time usage
00:23:49
work play Etc and they checked everybody's credit reports and Bank balances So brly speaking the research
00:23:56
found almost no lasting impact on everything they tested from overall health to work to
00:24:01
education and here are the quotes directly from the paper and I'll get the gentleman's take on this Ubi is super
00:24:07
fascinating obviously the cash transfer resulted in large but short-lived improvements in stress and food security
00:24:13
we find no effect of the transfer across several measures of physical health we also find that the transfer did not
00:24:19
improve mental health after the first year and by year two we can again reject very small improvements final quote we
00:24:28
also so find precise null effects on self-reported access to healthare physical activity so fascinating and
00:24:37
reinforces a bunch of intuition that I think we would probably all have you have you guys seen these studies where
00:24:43
when somebody has an amputation or they get paralyzed they study their pre levels of happiness their inim level of
00:24:53
happiness and then they just kind of mean revert to their natural state of happiness
00:24:58
independent of what physical Calamity they may have gone through and I I'm when you were talking about it Jal I was
00:25:05
reacting in the same way which is in the absence of I think purpose and Community I think children in many
00:25:15
cases it just doesn't meaningfully shift any of these curves that really matter I
00:25:19
think your happiness levels mean revert I think your health levels mean revert so it's great to kind of confirm
00:25:29
at least my intuition which is that Ubi is a wonderful idea that I think doesn't
00:25:38
really understand how humans are both motivated and wired freeberg your thoughts yeah so I definitely agree I
00:25:46
think I've talked about this we talked a little bit about it with Jonathan height
00:25:49
there's some great studies that have shown in the past that the change in income is a better predictor of
00:25:53
happiness than absolute income eventually everything normalizes so I think you bi makes no sense for three
00:25:59
reasons the first is this normalization of spending level so once you've kind of
00:26:04
had this increase you have a moment of happiness and then you actually start spending differently or spending more
00:26:10
and effectively every human has one innate trait desire and desire is what drives Humanity it's what drives
00:26:18
progress It's what pushes us forward because no matter what our absolute Condition it's our relative condition
00:26:23
that matters relative to others or relative to ourselves in the past or perspect itively in the future and so we
00:26:30
always want to improve our condition so a Ubi based system basically gives a flat income so the only way for it to
00:26:36
really work is if you increase the income automatically by say 10% a year so in a Ubi world no amount of money
00:26:43
will actually make someone satisfied or meet their minimum thresholds because those minimum thresholds will simply
00:26:49
shift and you know the second issue is just the the net economic effect if we gave 350 million Americans
00:26:57
,000 bucks a month that's $350 billion a month that's $4 trillion a year our prospective budget for next year is 7.3
00:27:06
trillion at the federal level so you know that's already more than 50% of the total projected federal budget next year
00:27:14
finding the mechanism for funding this at scale is not what this study actually looked at because if you look at it the
00:27:21
net effect would be inflationary and that's the third major reason is that ultimately this would have an
00:27:26
inflationary effect anytime we've stimulated the economy with outside money with government-driven money we
00:27:33
see many bubbles emerge and we see an inflationary effect so look at covid there were all these little bubbles that
00:27:38
popped up in the financial markets we had nfts we had crypto we had all these sort of new places that money found its
00:27:44
way to and then we had an aggregate inflationary effect food prices are still up 30 40% since covid and so net
00:27:51
net I think that the study provides an interesting insight into the micro effect the psychological effects the
00:27:57
social effect but macro effects are what is so like simply arithmetically obvious
00:28:02
which is inflation and an inability to actually fund us at scale and fundamentally people want to work so
00:28:08
they'll take that money and then they'll go find ways to work and generate more money and you have this inflationary
00:28:13
effect so I think N Net Ubi does not make sense Sachs participants were 5% more likely to start a business by the
00:28:20
third year maybe that was the most encouraging part of this people work slightly less 2% decrease in labor
00:28:26
participation but that seems negligable people in their 20s had a 2% increase in
00:28:32
enrolling in postsecondary education again very tiny impact there were major benefits to
00:28:37
stress and mental health in year one but by year two as we talked about it reverted to the Baseline how do you
00:28:42
think about Ubi in a world where let's say I don't know we lost a large amount of jobs in a short period of time
00:28:51
because of AI so in that hypothetical situation and we hit 20 or 25% unemployment from the historic low we're
00:28:57
at now now how might you think about Ubi well that's positing a future that I don't think's going to happen at least
00:29:04
any I tried to yeah that's why I'm trying to give you a hypothetical yeah no I just I I don't really buy that and
00:29:09
so I think this whole idea of Ubi is premature and very expensive and it doesn't work I mean I think what we saw
00:29:16
from the study just to Echo what freeberg said is that cash transfers don't work we saw this in the Great
00:29:21
Society just handing people money doesn't solve poverty it actually tra people in conditions of dependence we
00:29:29
also saw during covid that all those stimy checks it might have had a macro effect in the economy of kind of
00:29:35
boosting the economy during what could have been a covid depression however at an individual
00:29:41
level what did we see we saw people quitting or quite quitting their jobs they spent more on Leisure alcohol and
00:29:48
meme stocks in other words it wasn't tremendously productive so I think that what we've
00:29:54
seen in the past is just handing people money doesn't create the types of outcomes that people want and you know
00:30:03
is all this virtue signaling sax is it virtue signaling kinda kinda I'm kind of that from you yeah I think it's I think
00:30:10
it's a combination of virtue signaling combined with let's assume that you want to become the first AI trillionaire and
00:30:19
people are concerned about job loss you're going to virtually signal in the direction of well let's just give
00:30:24
everyone money and a lot of people in power will love that because it creates a lot of dependence yeah so it serves
00:30:34
the interests of tech Moguls and people in the government but I don't think it serves society and I think one of the
00:30:41
most interesting data points in the study please confirm if I get this right but what it said is that the people who
00:30:47
got the thousand a month Ubi saw their incomes rise to $445,000 on average while the control group who only got $50
00:30:55
a month increased their average income to 50,000 actually just sh 51,000 so the people who didn't get the
00:31:03
larger stimi actually genuinely bettered themselves over the course of the study
00:31:09
while the ones who got the 12,000 a year stayed in place and that's kind of what
00:31:13
you'd expect right which is if you just hand people money without having to work
00:31:17
it doesn't motivate them to work harder it actually motivates them to do less yes and let's say that you're in a point
00:31:23
in your career where you need to learn you need to get mentorship you need to advance yourself by giving people Ubi
00:31:29
you could be kicking out those bottom rungs of the ladder where you know the work isn't necessarily that fun but
00:31:34
you're picking up very important skills that are going to help you rise up in the ladder and being a cashier like
00:31:40
sending your kids to be a cashier at a restaurant or a bus boy or a waiter like that teaches them a work ethic I was a
00:31:46
dishwasher I did hard work as a child like I was a bender I mean look these are all jobs that have dignity I mean I
00:31:52
think work has dignity and you need people to start somewhere and if you just give them the stimi or
00:32:00
the Ubi it demotivates them from starting their careers and you trap people at this lower level so I just don't think
00:32:07
you're doing anyone any favors by doing this and I just want to say you know my production company's in full swing and
00:32:13
we are actually working on a remake of Cheers with David Sachs yeah as the bartender as the lead character it's
00:32:22
it's a really great show looking at um the back of the envelope matth here I had the crack research team take a look
00:32:29
at this welfare $1.1 trillion budget in 2023 eight different federal agencies you know Medicare I'm sorry Medicaid is
00:32:36
in there as well unemployment $33 billion paid across 1.8 million participants last year food stamp safety
00:32:43
113 billion we put all those numbers together and uh we got about a 100 million people participating in these
00:32:51
programs in some way for $1.2 trillion per year this is all back of the envelope it's imperfect but that turns
00:32:57
out to be about 12K each uh which is exactly what the study did so not perfect math but that's totally
00:33:03
reasonable I grew up on welfare and we needed it to make ends meet and we would have completely fallen through the
00:33:10
cracks without it and so I'm glad that I was able to be raised in a country that
00:33:17
has welfare I guess my question to you choth is do you think all these agencies put
00:33:24
together you know with all this Administration and this complexity would it be better if we take something from
00:33:30
this Ubi of maybe consolidating down no no no okay no because I I think like you
00:33:36
need to be motivated as sack said and so even though we got support from I grew up in Canada so
00:33:44
the Canadian government there was still an expectation where certain things were
00:33:49
not covered and you still had to work and so you had to find motivation to pick yourself up and go out and get a
00:33:55
job and it just so happened that in situation even welfare and what my mom made as a housekeeper and then as a
00:34:02
nurse's aid wasn't enough and my dad didn't have a job so I went and I started working at Burger King and to sa
00:34:08
this point it's pretty eye openening when you're 14 years old and you know you're working the night shift and
00:34:16
people come in after going to the bars they're drunk they're puking all over the place sometimes you see people that
00:34:21
go to your own high school and it's a little bit embarrassing because you're working while they're going out but at
00:34:27
the end of the day was very motivating and I think saak is right if you take that away from people I think that you
00:34:32
end up with a worse Society I don't think that you have a motivated group of people that want to go and better
00:34:38
themselves I think they just become really lazy I think it's well it's well stated and I think the pressure cooker
00:34:44
that immigrants are under or you know people who have tough situations like it it can create the diamonds and man I I I
00:34:52
do think a lot of the folks here on this podcast went through that pressure cooker and does create a on your
00:34:58
shoulder and and when people criticize these entry-level jobs I'm and they're oh they're not sustainable well they're
00:35:03
we do have a safety net in both countries I think that that's not I think the problem is not the entry-level
00:35:08
job I think it's the expectation of people and freedberg just mentioned this but what you have is that there is this
00:35:16
desire Doom Loop that we've Fallen ourselves into where what social media does is
00:35:24
amplify in many cases a fake ception of what your neighbor has that you don't have and so you're in this constant
00:35:32
desire Doom Loop so if you go to a job and you're expected to work for four years I'm just going to make up a number
00:35:38
before you get promoted and the perception is that your neighbor is getting promoted after eight months
00:35:43
you're going to be mad and you're going to be angry and you're going to feel like life isn't working out for you and
00:35:49
we have to figure out a way of resetting that back to normal so that you know that that is a lie that is being told to
00:35:56
get clicks and likes and the real truth is you're going to have to just put your nose down and
00:36:01
grind at something to get what you want and life is not perfect and it's complicated and it's
00:36:05
messy and we need to do a better job of that let me ask you a question freeberg if you were going to do a 2.0 of the
00:36:11
study I was thinking about it you know where do you go from here I just had this idea like well what if you put like
00:36:19
half of the money into like a a perfect portfolio wealth front one of those services and um allow people to take out
00:36:25
maybe 5% of it every year some sustainable amount so they see you know and get some education around that or
00:36:31
maybe put the money into a business formation fund people can apply to get grants to you know maybe form a business
00:36:39
and you you kind of reframe how this Ubi is distributed with milestones and maybe
00:36:46
some education baked into it that that was my thought on where to go next with it do you have any thoughts of where you
00:36:50
would do a 2.0 test of this or would you just well that's that's not Ubi right and what you're describing I think exist
00:36:58
and there are incentives and programs and opportunities out there people can sign up with Roth IRAs they can
00:37:03
contribute some percentage of their paycheck to a 401k if they have a job that has a 401k setup for them there's a
00:37:09
lot of systems and mechanisms out there and you get tax breaks for doing that so
00:37:13
there's mechanisms and incentives out there to do that sort of thing the the concept with Ubi is can you pay people a
00:37:20
flat amount of money so that they don't have to work and then they end up being able to explore and do other things with
00:37:27
their life as the robots and AI does everything for them and I've just always been of the belief that I don't think
00:37:32
that there's this natural border that we hit Beyond which humans don't work I think that AI based tools and automation
00:37:40
tools are the same as they've always been when we developed a tractor people didn't stop farming they could get much
00:37:46
more leverage using the tractor and farm more and new jobs and new Industries emerged and I expect that the same thing
00:37:51
will happen with this next evolution of technology and human progress humans will find ways to create new things to
00:37:58
push themselves forward to drive things forward and for the natural market-based
00:38:02
incentives that fundamentally are rooted in this internal system of Desire will create new opportunities that we're not
00:38:08
really thinking about so I don't believe in this idea of Ubi in some utopian world where everyone's happy not working
00:38:14
and letting machines do everything for them I think that the fundamental sense of a human is to find purpose and to
00:38:20
realize that purpose to drive themselves forward and progress themselves and I think that that's always going to be the
00:38:25
case the closest thing to leisure and leisurely Pursuits that we have today in modern society is the nepo baby and if
00:38:33
you look at the no but and if you look at the nepo baby they're the most miserable group of people I've ever met
00:38:39
they're so unhappy with themselves and so and part of it is because they've only ever lived a life of shout out to
00:38:45
Alex Soros no I'm I'm not name checking anyone I'm just saying when I when I when I observe it I think that you can
00:38:54
see it right in front of you which is that there's just so much inherent unhappiness because you're not motivated
00:39:01
to do anything and then that's Amplified typically by guilty parents because they've been working so hard and I so I
00:39:09
don't think you need to run a second study a different version of an idea that friend of the Pod Brad gersner is
00:39:15
working on which I think deserves a shout out is this idea of giving every kid when they're born a retirement
00:39:22
account and I think that that's interesting idea where you give them some amount of money and it just matures
00:39:30
inside of an index fund that gets unlocked for you when that kid is 65 or 70 years old that's great because it
00:39:37
helps you have a soft Landing in retirement I think that that's very Humane and a right thing to do but it
00:39:44
doesn't rob you of that motivation to work in your 20s 30s 40s and 50s and that's a much better idea than Ubi and I
00:39:50
think by the way it's really important to state that Ubi can be more of a trap than a
00:39:56
benefit it takes away the opportunity for individuals to progress because you no longer have a system that says you
00:40:05
progress you get richly rewarded It ultimately drives to an outcome where you spend all the money and distribute
00:40:10
it equally so everyone ends up having some sort of stasis and I don't think that that's really human nature I do
00:40:16
think that systems and government programs that support people's ability to succeed to work hard to work smart to
00:40:22
progress while providing these necessary safety nets is a better solution there's
00:40:26
no right or wrong way it's just it's it's a very complicated system that's needed and I don't think that this like
00:40:32
this Ubi concept is fairly naive and I think that you'll see it play out at at both a micro and a macro scale as being
00:40:39
I think net net negative so yeah you know just wrapping up here so we can get on to the rest of the very juicy docket
00:40:45
we have today it it does seem demotivating to just have money drop in your head that's why like my experiment
00:40:50
I was referring to freeberg of just forcing people not like having these programs that you have to go find out
00:40:56
about and have the social capital and fabric around you that you know about small business loans Etc but hey these
00:41:02
three things are happening to you right now this Money's been put into your account automatically and you can decide
00:41:07
what to do with it and just raising the education level and empowering people is
00:41:13
a much better idea I feel like whatever the education system is schools or whatever like actually teaching the
00:41:19
vocational skills or the skills on how to succeed in the workplace like here's how you go get a job here's how you
00:41:24
build a business here's how you start something those are the sorts of skills that are not taught in the educational
00:41:30
system that I think are generally lacking and then people kind of learn a bunch of history or some algebra or
00:41:36
whatever they learn in school and they they pop out the other end and it's like okay go figure out how to survive go
00:41:41
figure out how to get a job go figure out how to build a business to just build on your idea we need more
00:41:44
healthcare workers if you paid somebody $1,000 do a month and you paid for their
00:41:48
school for one year to become a nurse doctor nurse practition or whatever that would actually have a dramatic impact
00:41:54
and solve a problem for our society while not giving a hand out I think we all agree on this one let's keep moving
00:42:00
through this amazingly juicy docket all right there is a battle right now for rer Murdo media Empire the times
00:42:07
reported on a behind the-scenes fight for control of Fox News Wall Street Journal New York Post and just tons of
00:42:15
TV networks in Australia the UK I think we all know the newscorp holding Set uh bit like the TV show secession uh which
00:42:24
makes sense because they based it on the Murdoch family it turns out this article
00:42:30
in the times is based on a sealed court document that was obtained by them Murdoch to remind you is 93 years old
00:42:35
now and his trust would have given control to his four eldest children however he changed the uh trust to
00:42:43
ensure that Lin Murdoch who is more conservative and would take over these assets as opposed to James Elizabeth and
00:42:55
Prudence who are more moderate in laan and they are engaged in a massive court case now that's going to
00:43:02
start in September the trust is irrevocable but it contains a provision allowing for changes so long as they're
00:43:08
made quote in good faith and with the purpose of benefiting all member so rert argued that the change is in the best
00:43:16
interest of James Elizabeth and Prudence as it keeps them formally separate from
00:43:20
Fox News without having to worry about its political point of view Fox News obviously has massive influence and has
00:43:28
been a bit of a disaster over the last couple of years they did the largest settlement ever
00:43:34
in a defamation case with Dominion Aid $787 million you remember Tucker Hannity Laura Ingram all of them privately uh
00:43:46
trashed the people who lied about the Dominion case on Fox News and that all got shown in text messages and it was a
00:43:53
disaster for them saaks any thoughts on this and and how collection of assets and the GOP have you know collaborated
00:44:01
over the years I wouldn't necessarily call it collaboration I call it a market position I mean Fox News has carved out
00:44:07
a powerful and profitable Market Niche by being the one Cable News Network that appeals to
00:44:13
conservatives now if you know let's say the more liberal members of the family like James take over and change the
00:44:21
content and the programming to serve their own political views they're going to lose viewership they're going to lose
00:44:26
their audience it would be a foolish idea just from a business standpoint so I think that Lachlan is the right choice
00:44:33
I've met Lan before by the way nice guy look I think a pretty mainstream conservative type of guy he's clearly
00:44:40
the right guy in the family to run this and the siblings I think could really screw it up and I'm talking about not
00:44:47
just from a Content standpoint I'm talking about from a a revenue and profit standpoint if they take it in a
00:44:54
different direction I would already say that Fox News has a has a market position problem which is that rubert is
00:45:04
very much a neocon and neoconservatism is on the way out in the Republican party in favor of a more populist
00:45:11
conservatism that you see with Trump or now his running mate JD Vance rert and fox waged a really strong campaign to
00:45:20
keep JD Vance off the ticket obviously lost that battle rert fired Tucker by far their
00:45:27
EST rated and most profitable host ever and it was over again this populism versus neoconservatism Direction so I
00:45:35
think that fox already has a problem where they are becoming misaligned With Their audience and regardless of what
00:45:44
you think of the politics this is bad for business it'll be really interesting to see if laan Will realign things in a
00:45:52
more populist Direction but definitely going in a liberal direction that like James or the siblings want to go in that
00:45:58
would be a disaster freeberg chth any thoughts on this uh media Empire and secession
00:46:05
planning man I think probate and wills and trusts are of the devil's making nothing good comes out of these things
00:46:14
and I don't know I just think some of these assets should just be left to shareholders just sell them and or just
00:46:23
sell them and take the money give it to the kids hopefully raise good kids they can all go and pursue their own path
00:46:29
because again I think the point is like the path and the journey is the fun and these kinds of battles are really
00:46:41
brutal and I'll tell you to me the thing that I'm I'm sad when I hear this whole
00:46:44
thing is like you have four siblings that I'm guessing grew up together yeah and now are they ever going to talk to
00:46:52
each other again or is it like three versus one or two versus two or and I just think that that's ugly over what
00:46:58
power and money I would have just if I was the father I would have sold the asset given
00:47:03
the money to the kids or to charity or whatever and hopefully they would have found happiness in a different way but
00:47:10
that is what they did with the Disney deal they took the cash and they distributed it to the kids so they each
00:47:14
got a pretty big windfall and then you I think the concept was this remaining asset would be managed over the long
00:47:20
term maybe I'm speaking out of school a bit but I thought that's what happened there Fox the studio and yeah that the
00:47:29
library in the library and that brings X-Men Fantastic 4 Wolverine back together with the Avengers which is most
00:47:35
important 20th C clearly they didn't no it's all coming back together now now they just got to get Sony to
00:47:42
give up I mean we want to talk about interesting IP Marvel just sold these characters to the highest bitter in
00:47:48
perpetuity such a crazy weird deal but it's like it's like me saying you know I uh I've collected some really nice belts
00:47:56
and so I'm just going to have like a death match between my five kids to see who gets the best belt yeah it's just I
00:48:02
mean and it's not it's not even about money actually because they have enough it's clearly this is about power picked
00:48:09
no and it's about being picked imagine if your father picks your sibling and not you why why would you why would you
00:48:16
do that yeah like is there is the asset so important as said there these are self-managing because business people
00:48:23
will make rational business decisions so put it in the hands of a r bus keep the
00:48:28
family intact because if you lose the family what what do you have that's what I don't get that's what I don't gam we
00:48:35
might as well just go to our next topic Joe Biden has been hot swapped as no sh and as predicted the speedrun primary
00:48:42
maybe that's been subverted uh as we all know Joe Biden formally exited what's your version maybe it has been subverted
00:48:49
maybe possibly could have been subverted inadvertently knocked over forgotten it
00:48:55
could be an oversight anything's possible Joe Biden formerly exited the presidential race on Sunday after donors
00:49:04
and party leadership politely asked him to enjoy his retirement NOP they shived him by most Insider accounts Biden was
00:49:11
not happy about the decision and felt betrayed nonetheless public has backed his VP Cala Harris who appears to have
00:49:20
already wrapped up the nomination survey conducted by AP on Monday suggested that
00:49:25
Harris already had the Endor ment of enough delegates to secure the nomination in the first round of
00:49:30
convention voting so this won't be official until the DNC that starts August 19th in shy toown so far no one
00:49:38
has stepped forward as a arrival for Harris and in fact many of her would be competitors have already endorsed her
00:49:45
that includes Shapiro Pennsylvania's Governor Nome California's governor pritzer Illinois's governor and Whitmer
00:49:53
Michigan's Governor all of those I guess potential VP candidates she is now the 90% favorite
00:50:01
to get Democratic nomination I'll stop there and ask our panelists what they think of this turn of events jamath do
00:50:11
you want to start us off I mean I don't think the process was super open and transparent and Democratic but I don't
00:50:19
think they had much of a choice and I think we've talked about that because too much of the money would have had
00:50:23
to essentially been returned and I don't think you can fight a federal election in 2024 with one hand tied behind your
00:50:30
back so she was the de facto nominee even when the rumor started and now I think the whole point
00:50:41
is to figure out where does she stand I think the thing that she will have to overcome is
00:50:47
that these last three years three and a half years she's been relatively under the radar Mia some
00:50:55
might say and I think that now there's this like this whole controversy I don't know if you guys have seen this where
00:51:00
like she was named the borders are but then she was not the borders are and I think there's a there's a mainstream
00:51:05
media it's sort of fighting with itself from six months ago about the whole thing but the point is that we don't
00:51:10
know what she believes and we don't yet have a sense of her agenda really you know and I think
00:51:19
that over these next two months it'll be up to her to really create a very clear
00:51:24
case of what she believes in and it'll be really interesting to see who she picks as her VP candidate and then
00:51:30
people I think will be in a position to judge and I think that that's what you know what if I've been kind of like
00:51:35
reading the tea leaves from the folks that I've talked to is sort of what they say which is TBD and we need to figure
00:51:41
out where she's at freeberg your thoughts on uh this unbelievable 10 days in the history of our country
00:51:51
where president was nearly murdered by an assassin and Joe Biden resigns and a 39-year-old political neoy venture
00:52:07
capitalist is picked as VP I mean this is consequential what are your thoughts on
00:52:12
this 10 days that's a lot of stuff I think we talked about that last week but the kamla Harris deao nomination that
00:52:21
took place over 48 Hours um I think was a little bit shocking to a lot of people
00:52:26
I've spoken with that there wasn't a bit more of a process to identify a nominee
00:52:33
besides KLA that effectively the party lined up now what I think is is relevant here is that for the first time it's
00:52:41
exposing people to the way the electoral process actually works in the United States that it's not a direct democracy
00:52:47
where every individual in this country votes for their federally elected people remember the United States was set set
00:52:53
up as a Federated Republic that there was meant to be States the states were in a federation and then the states
00:53:00
would elect electors that would go and figure out who should be the president who should run the the federal office
00:53:07
and the states would elect their representatives their Congress people to go represent them in the federal
00:53:13
government and so I think a lot of people you know whether it's just without thinking about it or based on
00:53:20
President assumed I get a vote and who gets to be president what you get to have is a vote and who gets to be the
00:53:26
delegate to represent your state in picking the president and so this process where delegates very quickly
00:53:32
fell behind kamla Harris because of the the the significant coalescing of power and influence within the parties the two
00:53:41
major parties in the United States has I think exposed a lot of people to the lack of a democratic process for Federal
00:53:48
Executive role in this country and I think that's a little bit shocking to people but it is the way that the way
00:53:55
the nation was set up and and the same thing with the popular V vote versus electoric college right people keep
00:54:00
getting confused by that that's right and in this very unusual condition where a candidate who's earned all of these
00:54:06
delegates drops out of the race yeah is shocking and surprising to people that they don't get to go and make a vote
00:54:12
again individually and I think it feels unfair and I think that a lot of people are feeling that way I do however think
00:54:19
that pretty quickly there's a lot of people who are anyone but Trump that are going to Rally behind her and she seems
00:54:25
to be pulling well in the polls that have come out in the last couple days here so all right let me hand it off to
00:54:31
sxs then you had a situation where Trump was The Runaway favorite and this unbelievable Unity at
00:54:41
the RNC and immediately after the RNC the Democratic party hot swaps Biden for kamla and they've got a lot of great VP
00:54:51
picks that they can choose from Mark Kelly looking like the possibility which would obviously give them a lot of
00:54:58
support in Arizona and with moderates and Law and Order folks so saaks were looking at uh essentially a dead heat
00:55:06
some polls have them tied some po Reuters ipsos has Harris with a 2% lead CNN has Trump with a 3% lead what's your
00:55:15
take on forget about how we got here you know how does this affect the race itself this is a dead heat now what are
00:55:24
your thoughts on the race going forward who's the VP pick that you're most worried about going up against the
00:55:31
Republicans well look this clearly reshuffles the race to some degree I don't think it's a dead heat the polling
00:55:37
shows that Trump is still ahead in most of the Swing States but look Harris has more upside than Biden does because she
00:55:44
can actually campaign I mean Biden clearly was a shorefire loser and that was exposed in the
00:55:51
presidential debate and that's why there was a total panic in the Democrat Party
00:55:55
after that debate they're like we got to get someone new and they drove him out I
00:55:58
do want to just say a word about that process you know throughout that process remember it started with Biden doing
00:56:03
that Stephanopoulos interview he said that even God Almighty won't get me out of this race then he said nobody's
00:56:10
pushing me out I'm not going anywhere I'm campaing next week he expressed that what was happening in the party was a
00:56:15
revolt against him and then boom all of a sudden he's out and you know all we really know from the public reporting is
00:56:23
that Nancy Pelosi said you know Joe we can do this the easy way or the hard way and he was out again less than 24 hours
00:56:33
after he said I'm in and I'm campaigning next week and even his surrogates on the
00:56:37
Sunday morning shows were saying that he's definitely in the race the White House staff didn't know his campaign
00:56:43
staff didn't know it kind of came out of the blue it's a very strange process and
00:56:48
it happened via him just posting a photograph of a letter that was on personal stationary not even like an
00:56:55
official White House memorandum and we didn't get an update we didn't hear directly from the president about one of
00:57:01
the most consequential decisions of his life and of his presidency until Wednesday well he did have covid so that
00:57:08
you know for an 80y old is pretty hard yeah fair enough that was the the the story but still I mean for us to be left
00:57:15
in the dark wondering what was really going on for three days it was very strange it certainly was not what you
00:57:20
would call a democratic process there was no speedrun primary as you wanted Jason there was no open convention what
00:57:26
happened is the delegates fell in line instantly as I predicted because I said that they would not be able to handle
00:57:31
the chaos that they wanted to basically fall in line immediately and end the chaos and they fell in line behind kamla
00:57:38
Harris who has never gotten even one primary vote who are you most as a VP candidate give us that because we
00:57:45
understand that I'll be honest with you I think that the guy the scariest the one I would pick is Josh Shapiro he's
00:57:51
the governor of Pennsylvania rising star look if he can deliver p Mania for the Democrats that's powerful because one
00:57:59
way for Harris to eek out a victory is if Shapiro can get her Pennsylvania and then if she sort of
00:58:10
taxs back to appealing to the Arab and Muslim vote in Michigan to eek out Michigan and then
00:58:17
eeks out Wisconsin with one point in other words if she can hold on to the blue wall and then she loses the swing
00:58:23
states that Trump is very much ahead in like Ariz Iona Nevada Georgia North Carolina she can still win this election
00:58:30
by 270 electoral votes to 268 it' be the closest margin in presidential history so that's a scenario and it's probably
00:58:39
her best path to the to Victory is to win by one one electoral vote that's the scenario I'd be most worried about as a
00:58:47
republican now the other candidate you hear a lot about is Mark Kelly the cater from Arizona who on paper looks
00:58:54
fantastic he's an astronaut his his wife was a victim of a of a gunshot moderate
00:59:00
right super moderate I personally don't think he is that moderate but I think he
00:59:03
presents as one and he's he's made noises he he comes across as tough and and comes across as as someone who's
00:59:11
wanted to be tougher on the border which is a huge weakness for Harris yeah if he
00:59:16
can deliver Arizona then he becomes a strong Contender but I'm not sure that he can so if it were me I'd probably go
00:59:25
with Shapiro I mean I hope they're not listening to me I hope they go with Kelly chamaa obviously even in this
00:59:31
heated thing the good news is that both sides are going to accept the election results we have that fairness and and
00:59:38
that honorability and both parties will accept even a close election there'll be
00:59:42
no drama after it but what's your thought on the strongest ticket do you think Shapiro do you think Kelly CNN
00:59:50
said hey and this went viral do we think a Jewish vice president the country's ready for it they got kind of dragged
00:59:57
for that what do you what do you think is the right VP pick here Cham what do you
01:00:02
think the right VP pick here here is and which one is the scariest to a trump JD
01:00:08
Vance ticket which is a very strong ticket in of itself so if you look at Trump's VP pick
01:00:15
it's about aligning a philosophy Donald Trump created the Maga movement this populist conservative
01:00:26
right-wing movement and I think JD Vance has an opportunity now to carry that torch post Donald
01:00:34
[Music] Trump and that is an ideology that spans States I think this idea that you pick
01:00:43
somebody because they can deliver a state is pretty misguided I just don't think that that in reality is what
01:00:48
happens so I think that kamla has to decide what she stands for and figure out whether she needs somebody on her
01:00:56
flank that represents a slightly different set of ideas that will then maximize her appeal or she wants to
01:01:02
double down and then she has to pick somebody that sort of like aligns with her philosophically and again I would just
01:01:10
say that it's not super clear yet what she thinks I think that Joe Biden was more of a traditional Centrist that had
01:01:17
to appeal to the progressive left in order to get his work done so that kind of makes sense you can
01:01:27
understand it you don't have to agree with it but it's it's pretty obvious I don't know what
01:01:33
she where she's at politically so I think that that's the first thing she needs to explain herself is she a
01:01:38
Centrist is she more of a moderate Democrat is she more of a progressive Democrat and then we can then understand
01:01:47
who the best person to align her with should be but if I was if I if I was in the
01:01:53
Democratic kind of like Star Chamber yeah I would kind of try to figure that out first because I think the Donald
01:01:59
Trump pick makes a lot of sense because it basically moves the Republican party in a very firm direction that die is
01:02:05
cast for the Republicans for many years to come now okay freeberg your thoughts who is the VP candidate what do you
01:02:12
think of this race and give us a prediction you know you're you're famous for your incredible insights and
01:02:19
predictions in politics give us your prediction R who should she pick who will she pick and why I think there's a
01:02:26
lot of talk about Roy Cooper in North Carolina saak didn't mention Cooper but sounds like could be in the running and
01:02:35
could be a leading Contender for the slot I think the Harris Trump poll is not out or there's a recent one
01:02:46
that shows Harris yeah 4448 Trump in the lead in North Carolina so there's uh some some room
01:02:56
there if you can get the governor in that spot that's a lot of electoral votes in terms of who I think should be
01:03:03
I'm not sure but I do think that might be a top Contender from folks I've talked to any thoughts on Shapiro and
01:03:11
CNN's positioning that the country is not ready for a Jewish vice president so you know I was shocked recently to hear
01:03:18
about a board a pretty you know important board because it represents a large organization and there was a an
01:03:26
individual on the board who was supposed to be elected chairman they went in for
01:03:29
the for the vote and in that board meeting this individual who happens to be Jewish there was a conversation that
01:03:34
ensued about you can't be the the chairman at this time because having a Jewish chair would be really difficult
01:03:40
in this current climate and I was shocked to hear this it you know it was it was not expected by by folks going
01:03:48
into the meeting things were supposed to be quite different in the vote and ultimately the decision was made that a
01:03:53
Jewish person should not be the chair of the bo at this time jcal to your question I think that behind closed
01:03:59
doors these are the sort of conversations that are going on that there's a perception given the Gaza
01:04:04
conflict that there is a risk of having Jewish leadership being put into powerful positions right now Jewish
01:04:11
leaders being put into powerful positions wow that is shocking that's insane it's R it's just this is this is
01:04:19
what is going what this is just yeah it's shocking and deranged and and the anti-Semitism right now social media and
01:04:28
what we're seeing online is just absolutely heartbreaking and infuriating in equal parts saak anything you want to
01:04:35
add to this as we uh wrap up our what the well I mean just talk about Shapiro saxs is the country ready for this you
01:04:44
saw the CNN clip and you know sort of ask question can I just ask I'm sorry go ahead what what what does it
01:04:52
solve what does it accomplish less heat coming into that board less protests less less protests the
01:05:00
protesters now have I guess what I would read into this correct me I'm War here freeberg is the protesters have now won
01:05:08
in that they've intimidated people to an extent that they don't want to go near Jewish leadership am I interpreting
01:05:16
correctly a possibility here sorry say that again the protest was what so these protests the Gaza
01:05:26
conflict have reached a point where people do not want to have Jewish leadership because it would be
01:05:33
polarizing and create more protests that's right that's that and that's the conversation that I hear going on behind
01:05:39
closed doors or I'm hearing about and so you know it's almost like a cancel culture against Jews because of the risk
01:05:47
of a Jewish person being in a leadership position that could yeah which is exactly what CNN was bringing up with
01:05:53
the VP choice of Shapiro and that's right I think it's totally crazy however I definitely have seen people online I
01:06:00
mean articles online like saying like is this an issue with putting Shapiro on the ticket now I can't believe this is a
01:06:08
problem for the voters of the country however I think if you're one of the democratic masterminds and you're trying
01:06:14
to engineer enough electoral votes for Harris to win like I said you're trying to win that blue wall you're trying to
01:06:20
get not just Pennsylvania but Michigan and the problem that Biden and had and now Harris has in Michigan is that the
01:06:29
large Arab and Muslim population in Michigan is really against the administration's support of Israel now
01:06:37
this is why Harris just snubbed Netanyahu when he came to Washington so they are imately trying to reposition
01:06:44
that issue and remember the margin of error in Michigan is like 2% so if they can win back that vote by seeming to be
01:06:53
more Progressive on the whole is Gaza War then there's a big electoral Advantage for them so I have to wonder
01:07:01
if this is where this talk about you know is it an issue for Shapiro to be Jewish on the ticket or whatever again
01:07:08
it's nuts to me that we could be even having that conversation in this country but it's possible that that that is
01:07:15
what's going on is it's it's like can you win Pennsylvania but not lose Michigan well the inevitable outcome of
01:07:21
identity politics by giving everyone a definition on their race or their gender or their background or their religion is
01:07:29
that you ultimately end up picking winners and losers and you don't just get to pick winners when you when you
01:07:34
make selections or prioritize things based on identity like this you also deao pick losers and that's where this
01:07:44
unfortunate snowball when johnf Kennedy ran for president it was a big issue that he was Catholic I mean you guys
01:07:50
don't remember this but 1960 right a major thing in our family was major point of Pride that we
01:07:56
had an Irish Catholic in the White House yes yeah and specifically what people asked is would he be loyal to the United
01:08:02
States or would he be loyal to the Vatican and the pope you know who is his ultimate Authority and he made a really
01:08:07
clear look I'm going to do what's right for the United States and he neutralized
01:08:10
that issue I think that what matters about Shapiro or any VP is their views and their accomplishments their policies and
01:08:19
whether he's Jewish or not really is secondary even if even if you're a principal concern is Gaza there are
01:08:26
still plenty of Jews who have a wide spectrum of views on that issue so it is nuts to me that this conversation is
01:08:35
seriously happening all right there has been a Kur fuffle a Donnie Brooke online
01:08:42
between Paul Graham and our bestie uh David Sachs here here Paul Graham threatening you Sachs on X do you really
01:08:51
want the full story of what you did to Parker being told publicly because it's the worst case of an investor
01:08:57
maltreating a Founder that I've ever heard and I've heard practically all of them this Paul Graham the founder of Y
01:09:02
combinator I was talking recently to another investor about whether you are the most evil person in silon Valley
01:09:08
Frank to you David sax he thought about it for a few seconds and agreed that he couldn't think of anyone worse the
01:09:15
second tweet about you being the most evil person David Sachs in Silicon Valley has been deleted well that's nice
01:09:23
your response it's nice to know yes that's nice to know there was also another unhinged tyde that he had
01:09:27
against me a few months ago okay where he was commenting in the Ukraine debate and uh was responding to a Ukrainian
01:09:36
partisan who this guy is like a propagandist for Ukraine who was embedded in the asof Battalion people
01:09:43
may know what that is any event Paul went out of his way the the thing is I've never met Paul Graham I I don't
01:09:50
know him I've never I've never done business with him so it's just weird to me that he had this animus and this
01:09:56
vitriol towards me it's hard to know exactly what this is based on I think that part of it is that he thinks he
01:10:05
knows what happened at zenitz even though he wasn't involved at all and he's just listening to one guy who's
01:10:11
been nursing this Vendetta for many years and then other people are speculating that there could be other
01:10:16
things involved I don't quite know you want to set the record straight on zenitz and just say what happened what
01:10:22
is it that you guys want to know Parker apparently has done several public interviews where he kind of made claims
01:10:29
I think I don't know if I've listened to him I've just read the summaries but J you probably know that par say you ran a
01:10:34
coup on him obviously for folks who don't know there was an SEC investigation and Parker was ousted from
01:10:42
zenitz as the founder CEO he's very bitter about that did a Revenge start up Rippling which is doing quite well from
01:10:49
what I understand and uh he blamed Sachs for all of this even though he was sanctioned for doing essentially
01:10:55
Assurance fraud by helping people lie on a test for their insurance certifications and he he got
01:11:06
sanctioned by the SEC for it and as you pointed out sax he was the only person who was sanctioned for
01:11:11
that so he broke some rules and he got pretty pretty serious penalty yeah do I have that basically I mean that that
01:11:21
that whole experience was like the was easily the worst year of my entire professional career having to deal with
01:11:28
that mess that he created and look anybody can now say anything almost 10 years later in a podcast but the
01:11:35
situation there was thoroughly investigated by Regulators who had subpoena Powers who did extensive
01:11:43
Discovery they looked at everyone's emails throughout the whole company they also interviewed something like a dozen
01:11:49
people under oath and took witness testimony from them and then they sanctioned him they find him and they
01:11:56
published an account of what happened I personally think it's a huge waste of time to be like rehashing events are
01:12:02
almost a decade old but I guess I'm being forced to by this smear campaign that he and Paul Graham have engineered
01:12:10
against me if you want to know what happened just read what the SEC said read what the other Regulators said
01:12:18
there was only one person who was named as being aware of the misconduct and there was only one person who was fined
01:12:27
and held accountable by Regulators in fact he was fined more than the company now if he just said yeah look I learned
01:12:34
from that mistake and I you know I made some mistakes moved on and apparently he
01:12:38
does have a successful company so I don't really understand why he's so bitter he seems to have like a you know
01:12:45
he's like disturbed about it then it would be fine I mean there would be no reason to be talking about this but the
01:12:52
guy refuses to admit that he did anything wrong and instead he's created this elaborate story that his departure
01:12:59
from Zenit wasn't related to massive compliance issues and that somehow it was related to him missing a sales
01:13:05
Target or being the victim of a coup that's not what happened this was a regulatory crisis that unfolded over
01:13:11
many months and kept getting worse and worse and we kept discovering new compliance violations and this created a
01:13:19
50 State Insurance investigation that could have shut the company down yeah and he controlled the bll he didn't have
01:13:26
to leave if he didn't want to he ultimately perceived that it was in his interest to leave and let us clean it up
01:13:32
and then he went on to go do this other startup which I think he was planning to
01:13:35
do all along so his plan worked out for him which is he left a big mess for us to clean
01:13:41
up and he very successful now with the new company so right right sax I remember I will just say I remember how
01:13:47
hard you worked at that after you were uh in the COO seat and then you were promoted to CEO and I was really
01:13:53
impressed watching it and seeing what you did because you chose to step up and take care of this company at a time
01:14:00
where you expressed to all of us privately how hard it was and what a challenge this company had found itself
01:14:04
in and you had investors that were friends of yours that were involved in the company that were on the board and I
01:14:11
think you did what felt like at the time and from my experience interacting with
01:14:15
you during the time the right thing which was to step up and address this rather than just throw your hands in the
01:14:20
air and say this guy screwed things up or this company screwed up and walk away from it you had personally put money in
01:14:24
your friends have put money in and you worked hard to try and help the business recover after this miserable period of
01:14:30
time and it was really impressive to watch you do that work so I just want to highlight my kind of experience watching
01:14:36
you it was it was miserable and obviously pretty thankless and I did it for no compensation I did it because
01:14:43
like you said I had a lot of friends who invest in the company I just thought it
01:14:45
was the right thing to do to do this cleanup the lawyer said it would take two years we managed to get it done in
01:14:51
one year we got a clean bill of health from Regulators we had to remediate all the compliance failures and when I then
01:14:57
handed the torch to the new CEO we had $200 million in the bank and 60 million of ARR with a clean bell of health so
01:15:05
you know but I didn't know I'd have this like crazy founder like lobbing bombs at
01:15:09
me the whole time and frankly if I known he was going to do this I would have just said listen man you clean up your
01:15:15
mess and he would have continued playing games and stolen Walling The Regulators
01:15:19
and it would have been a much worse situation for sure Cham you want anything here before we wrap up on this
01:15:25
because I'll I have two points to make but I'll let you go first look I think that part of what happens in Silicon
01:15:32
Valley is that there's these clicks and there's definitely a a YC click and they
01:15:39
protect their own in absolute terms and so I think there's a level of morality that everybody else has to live by
01:15:45
that's not necessarily the the rules that apply if you're a YC CEO now that was accepted in Silicon
01:15:53
Valley because in the early days they were frankly one of a very very small handful of games in town with
01:16:03
respect to high quality deal flow when you started to do series a b and c and as a result of that I think venture
01:16:10
capitalist essentially looked the other way because the returns were so good the
01:16:15
companies that were coming out of the incubator were so good but as with all things when you're successful and you
01:16:20
try to scale returns Decay and this is not a a flight on YC's returns but it's what happens to everybody so if you look
01:16:29
at blackstone's returns they were incredible when they started then they're okay today when you look at
01:16:35
sequoia's returns they were incredible when they started they're okay today YC's returns were incredible when they
01:16:42
started they're okay today and this is nothing against any of these folks it's that in the business of building an
01:16:47
organization and scaling that's what happens and when that happens and a lot more competition emerges on this
01:16:56
seen the old tactics that you used to use to run a protection racket if you will just doesn't work anymore and I
01:17:04
think part of what's spilling out in public here is that that kind of immature form of bullying and
01:17:11
intimidation is just kind of dumb because it's it just doesn't hang together anymore so I don't know I
01:17:17
thought the whole melee if you will Ruckus Jason fraus fraus Donnie Brooke bruh a clash yeah was more about a guy
01:17:32
that was engaged in this trying to do what he perceived to be the right thing for a YC founder in his community but
01:17:41
probably just he just needs to get back to work and do something productive and probably this wouldn't happen the next
01:17:46
time I'll just make two points here why combinator has always like much of our industry they're not unique in this been
01:17:54
in favor of rule Benders Breakers and naughty is actually something in their interview process that they optimize for
01:18:03
Sam Alman has talked about this very publicly I had a ycl Alum who was trying to get funding for me hack my voicemail
01:18:10
and change my outgoing voicemail and that was like a big brewhaha and Hacker News Etc and you know we kind of
01:18:16
celebrate a little bit of bending and breaking of rules and what everybody needs to understand is sometimes if you
01:18:22
bend or break a rule like insurance certification like Parker did here you know that that can be fatal for a
01:18:28
company which it was and it can be you know really really dangerous and so then you superimpose on top of this to your
01:18:37
point chamama Y combinator very big powerful organization some folks say a mafia and they described it as a bully
01:18:45
stack you know y combinator does circle the wagons they do bully people and they
01:18:50
do put out a presentation that we are the only people in Valley who are founder friendly you know even though
01:18:57
they're getting 7% for 125k like we do in our accelerator techar does while also saying everybody else is the enemy
01:19:04
everybody else is taking advantage of Founders the truth is we're all working really hard every founder you know is
01:19:11
going to H hack their way to success sometimes you take it too far like Parker did here he learned a lot of
01:19:17
lessons like some people say Uber did like some people say Airbnb did there's always been rule breaking and bending in
01:19:23
the entrepreneurial middle class and then you superimpose on it Paul Graham's feelings you know uh in the Middle East
01:19:30
Sachs your strong feelings about Ukraine and politics and now the footprint of Silicon Valley is just so powerful so
01:19:37
influential on the global stage when it comes to politics it just reaches a level of toxicity here that it doesn't
01:19:43
need to we're all on the same team let's all build great companies let's put this
01:19:47
ugliness behind us and get back to work that's my final statement No shanis is spoken I like that statement and if we
01:19:54
were just talking about somebody who had learned their lesson this wouldn't even
01:19:58
be an issue this is like events that happened a decade ago such a waste of our time and energy even be talking
01:20:03
about the problem is that you have people really we're talking about Parker and Paul Graham who are trying to smear
01:20:10
somebody as a way to you ex yeah they're trying to damage your business let's be
01:20:15
honest they're trying to get Founders to not work with you for sure they're doing
01:20:19
that and that's by the way look Parker has this very complicated story and the whole purpose of it is to
01:20:25
exonerate himself to basically say that he didn't engage in any wrongdoing and somehow he was set up okay it's
01:20:32
ridiculous I mean I don't have that kind of power over the SEC the SEC they sent
01:20:36
us a list of people they wanted to talk to I was not on the list and I was like well wait don't they want to talk to me
01:20:41
I'm the new CEO of the company and the lawyer said no your Discovery was clean as a whistle they don't have any
01:20:46
questions for you they only want to talk to people who you know they saw in the discovery there was an issue so The
01:20:52
Regulators prosecuted they basically conducted this investigation I had no impact over that it was a very serious
01:21:00
issue this was not made up so I I I just think it kind of defies belief to now say that this you know all the
01:21:06
Regulatory Compliance issues which played out over months were not an existential issue for the company it
01:21:11
certainly was but look we have better things to talk about do you see Ali resnik's tweet this is pretty dark Ali
01:21:17
Resnik tweeting here Paul Graham reached out to the key SV firm so Valley firms to attempt to get Jewish
01:21:28
VCS fired post October 7th no idea if that's true or not but there has been this Paul Graham is
01:21:38
anti-Semitic you know sort of meme going around I don't think he's anti-semitic but this is a pretty bold charge here
01:21:45
and I don't know if it's true or not well I can speak to some of it okay go ahead yeah I've talked to a few people
01:21:50
who are involved in this look I think what happened is that in the wake of October 7 there was obviously a very
01:21:55
heated debate online PG is on one side of that he got into it was supporters of Israel on the other side they accused
01:22:04
him of saying anti-semitic things he took offense to that and basically went over their heads to their bosses of a
01:22:14
couple of different VC firms at least two that I know of where he basically went to the heads of these firms to
01:22:20
express his displeasure I guess with these exchanges and I I think the feeling on the part of the junior VCS
01:22:27
because the people he was going over the heads of were were not senior Partners or whatever these were lower level to
01:22:32
mid-level VCS at firms you can understand how they would receive that the head of YC is going PA is a giant
01:22:40
yeah yeah so he he's basically going to the heads of their firm to seek a correction in their behavior even though
01:22:48
this wasn't like a workplace activity and so they certainly felt intimidated and silenced by that or in the worst
01:22:56
case that he was trying to get them fired in his case I guess he's trying to you know say hey this isn't cool to call
01:23:02
me an anti-semite on Twitter publicly and the truth may be somewhere in between I mean the great irony of this
01:23:08
of course is he's out he's concerned about his reputation being damaged and I know YC took it very seriously the
01:23:15
claims that they're anti-semitic and Paul Graham's anti-semitic they took that very seriously as they should but
01:23:21
here he is out there trying to damage your reputation so it's a little bit of hypocrisy here I think if he's outwardly
01:23:30
trying to destroy your reputation with Founders and then he's concerned about his reputation well clearly there's a
01:23:35
double standard here because PG doesn't like being called names on Twitter yeah he doesn't like his views being labeled
01:23:43
and he's willing to take those debates offline go over the heads not talk to the people who said those things but
01:23:49
then go to their bosses the heads of their firm yeah maybe not threaten them maybe not say
01:23:55
I don't think he said fire this person whatever but like you said there's always an implication of retaliation
01:24:00
because people understand the way that YC operates and certainly those junior level
01:24:06
VCS experienced it as a form of intimidation I mean this is the classic cancellation Playbook right and this is
01:24:13
what people will do to the left or the right or they'll do it to advertisers they'll try to get advertisers to cancel
01:24:19
it feels similar to that cancel culture even if that's not how PG intended well it's also like rather hypocritical when
01:24:27
he's super sensitive about this type of thing but then he's instigating this pylon when on this whole Zenit thing
01:24:34
he's basically single Source from a disgruntled founder who has this Vendetta who's been nursing this thing
01:24:40
for years he's never talked to me like I said he's never even met me but he's willing to call me the most evil person
01:24:46
in all of Silicon Valley and then again instigate this pylon with like all these
01:24:51
other people from YC yeah I mean how dare him you the most evil person that's my job here on the podcast yeah exactly
01:24:59
and then I saw like other people from YC like Michael seel who I think is actually a really cool guy oh he's
01:25:04
awesome yeah supportive Founders and then he's tweeting that like I somehow I put up my Founders who were there were a
01:25:10
lot of Founders who basically spoke up and actually said including many Founders who came out of YC say you know
01:25:17
actually David has been a great VC to us and he's saying oh saxs must have put them up to it no I never asked anybody
01:25:22
to do that and a good reason why why is I don't want to trouble my founders with
01:25:28
into this drag them into it so I'm not going to make them do that so I had nothing to do with that but but frankly
01:25:33
you know old saying that every accusation is a confession maybe the reason why people at YC think that I
01:25:39
might have done that is because that's kind of their playbook is they create these online mobs but like what gives
01:25:44
him the right to to do that I can tell you go for it he doesn't have enough to do he's sitting around he's got a lot of
01:25:53
money I mean he's been very successful and as far as I can tell he's just getting into dust UPS on Twitter and
01:25:59
then like like I there's a lot of amazing people we all know them that are so good when they're under pressure
01:26:06
focused and grinding and then when you take a little bit of the pressure off they just go crazy and they don't have
01:26:14
enough to do and it's Amplified by money and it's Amplified their own perceptions
01:26:17
of themselves so I don't know may maybe you should just go back to work so everybody back to
01:26:22
work when these things get heated here's an interesting idea for everybody go get
01:26:27
a cup of coffee with the person you disagree with sit down like we do here at the all-in podcast and have a vibrant
01:26:32
debate it makes life richer it makes you smarter it gives you more perspective and so PG Sachs anybody else involved
01:26:39
you just all sit down and have a cup of coffee try to Hash this out okay good coffee in San Francisco that's my Rx
01:26:46
freeberg I've been talking to saaks privately he has been complaining to me for weeks that we've had too much
01:26:51
Politics on the program and not enough science corner so I acques to Sax's appeals to me and all of his supporters
01:27:00
to to get a science Corner in today let's talk about nuclear power everybody's got nuclear power on their
01:27:06
mind obviously China is doing a really good job of executing on it and uh there's some new science here so fill us
01:27:15
in sax looks so engaged let's go well SX might like it because it's it's a bit of
01:27:20
an economic story and a bit of a China competitive story which I think is the main point here the story is rooted in a
01:27:28
paper that was published out of China on their new high temperature gas cooled Pebble bed reactor which is a new type
01:27:35
of nuclear reactor technology that shows that this thing cannot melt down which is an amazing new technology but I want
01:27:41
to just take a step back and talk about General electricity production in the US
01:27:45
versus China and where it's headed so today the US has roughly one terawatt of total electricity production capacity
01:27:53
China today has about 3 ter of total electricity production capacity and about you know 2 to 3% of that is
01:28:01
nuclear today for China so by 2050 the US has projected to build out an additional terawatt to getting us to two
01:28:08
terawatts of capacity so we're going to double our total electricity output by 2050 China meanwhile has a plan stated
01:28:16
to increase electricity production to 8.7 tratt so basically tripling between now and 2050 88% % of their power by
01:28:25
2050 will be Renewables and by 2060 they've stated this goal that they want about 18% of
01:28:31
their overall power to come from nuclear reactors they currently have 26 nuclear
01:28:36
reactors in the construction phase they've got planning going on around building 300 of these and they've
01:28:42
already got stated plans around 500 gws of capacity just to give you a sense of that 500 gws which is what China's got
01:28:49
plans for is half of the total us electricity production today that's in their nuclear buildout today
01:28:57
just to give you a sense on the relative cost of electricity China's about 7 to 9
01:29:01
cents a kilowatt hour the US is 17 to 25 cents a kilowatt hour and China is projected to drop their price to less
01:29:10
than 6 cents due to the expansion of Renewables and nuclear power in the country so the US cost is about triple
01:29:17
what it is in China to build out new electricity capacity that's a really important point so currently we have
01:29:23
about a third of what China has China's going to Triple we're going to double by
01:29:27
2050 their cost is already lower than ours and it's going to get lower and their cost to build out new electricity
01:29:34
is a fraction of what it is in the US so this is a a massive difference the International Energy agency estimates
01:29:41
that the electricity from nuclear power cost 65 bucks per megawatt hour in China
01:29:46
compared to 105 in the US and 140 in the EU um and recent data has us costs looking like they might be anywhere from
01:29:54
five to up to 10 times what it costs to build out in China so this is a real important long-term competitive point
01:30:03
china has more electricity production it's cheaper to make electricity and it's cheaper to build new capacity and
01:30:08
they're building at an accelerated rate and this really highlights the industrial challenge the United States
01:30:13
is going to have in the decades ahead we talk a lot about wanting to onshore Manufacturing in the US build out new
01:30:19
Manufacturing Technologies But ultimately all of these industries particularly AI are going to be driven
01:30:24
by the cost of power so Nick if you pull up this chart so what's going on in nuclear well there's uh effectively
01:30:32
considered to be four generations of nuclear reactors the first generation was all the early prototypes and I've
01:30:37
got an image up here to to show uh to show this comes from the Department of energy the second generation which was
01:30:43
the first kind of commercial power reactor started to get built out in the 1960s 7s 80s and then these gen 3
01:30:49
reactors were these lighter weight reactors that were kind of more advanced Gen 4 is the next generation of nuclear
01:30:57
power reactors and their next Generation because they're meant to be much more safe where they cannot theoretically
01:31:02
have a meltdown you can't have a nuclear meltdown like you had with Fukushima or with Three Mile Island and
01:31:09
to be clear Fukushima was generation two those are the boiling water reactors yeah yeah and so these these These Old
01:31:15
reactors have this risk where if the the where you pump water in to cool down the
01:31:21
reactor and to drive the turbine and if the the water pumping system fails and you can't get the rods out of the
01:31:29
reactor then the the reactor keeps reacting the uranium keeps having this kind of chain reaction gets hotter and
01:31:35
hotter and eventually gets so hot it melts all the walls and all the surrounding materials of the reactor and
01:31:41
all of the nuclear rods start to evaporate and all this nuclear material is released into the environment that's
01:31:47
the risk of a meltdown ultimately this is not a nuclear bomb just to be clear this just about really high temperatures
01:31:52
melting the facility and then radioactive material escapes the facility the Gen 4 reactors are designed
01:31:59
where that isn't possible and so one of the first uh if you go to this next slide you'll see just kind of an image
01:32:04
here this is the new reactor called the the pebble bed reactor China started this facility I don't want to butcher
01:32:10
the the the the name but I think I will it's at the Shia Dawan site in Shandong Province it's a 210 megawatt electricity
01:32:18
production um reactor they started Construction in 2012 they finished um and started Ed uh doing operational
01:32:25
tests in December of 22 they ran all the safety tests in the summer of 23 where they turned off the cooling and
01:32:32
basically simulated that the system failed to see if it would melt down and that's the results that they just
01:32:38
published which was the test they ran last summer and even when they turned everything off the system did not fail
01:32:43
it did not have a meltdown it it maintained its ability to control its temperature and not have a meltdown and
01:32:50
the way it works as you can see here is that these little Pebbles kind of like billiard ball sized Pebbles have uranium
01:32:56
in their core these Pebbles kind of drop into this um the center reactor chamber
01:33:01
and when the uranium is close to other uranium a chain reaction starts to generate heat that heat is actually in
01:33:07
this reactor concept captured by your helium gas that's circulated inside around the reactor that hot helium gas
01:33:14
heats up water turns a turbine generates electricity and then these billiard balls fall out the bottom so what they
01:33:21
did is they simulated that the system stopped circulating that the power went out and measured what happened
01:33:25
ultimately it was able to recover it didn't melt down and this is quite different Nick if you show an old model
01:33:31
of an old nuclear Rod system so here's nuclear rods they're made of uranium they they go inside these chambers that
01:33:37
have other uranium and when they touch each other or get close to each other they heat up and you have water that has
01:33:43
to be pumped continuously to keep it cool to maintain a low temperature what happened in Fukushima and other
01:33:48
facilities where we've had meltdowns is that the water stopped pumping everything kind of evaporated away and
01:33:55
the rods didn't get pulled if the rods can't get pulled out and the water can't keep pumping you have a meltdown where
01:34:00
things get so hot it melts everything around it and collapses so this Chinese site just demonstrated this Pebble bed
01:34:07
reactor which is a Gen 4 reactor and it has extraordinary safety profile there's
01:34:14
you know basically no no condition where the system would have a meltdown so these Gen 4 reactors are smaller they're
01:34:20
more modular they're they're much much safer they're more efficient they have much less waste you still have to store
01:34:26
those used Billiards somewhere so you still have to kind of take them and put them somewhere and keep them underground
01:34:31
for 10,000 years but compared with previous reactors you know this plant is designed to be much more
01:34:39
efficient much safer and they completed the safety test they published the results on the safety test and I think
01:34:44
it really shows the the performance is there and this was always meant to be future technology these Gen 4 reactors
01:34:50
China opened up commercial operations with this reactor in December of 2023 so it's running it's producing power it's
01:34:56
on the grid and you know this design funny enough was first proposed in the 1940s and it took us nearly a 100 years
01:35:03
to get it to Market which makes me also point out why I'm so optimistic 100 years from now on Fusion technology
01:35:10
which seemed crazy at the today and this this sort of Technology seemed crazy at
01:35:14
the time but you know 80 years later we've gotten there so you know this was an exciting outcome but I really do want
01:35:19
to highlight the competitiveness with China lower cost to produce lower cost to run and and they're expanding like
01:35:26
crazy and the downstream is they can power more h100s the US this is why this is why and this is why I asked Donald
01:35:33
Trump when he came on the show and I want to make my passionate plea this is why investing in and deregulating
01:35:38
nuclear reactor technology in the United States to enable a competitive playing field with the United States and China
01:35:44
in the decades ahead is so critical because if we don't China will beat the United States industrially and we will
01:35:49
eventually find ourselves in a greater point of conflict with respect to this Rising power that is going to be driven
01:35:55
by lowcost highly abundant power and the United States does not have that power equals AI you don't think that
01:36:02
distributed energy can basically deliver effectively energy at a marginal cost of
01:36:09
zero yeah so the the the solar build atum off is in the the US forecast where we can get in an optimistic scenario a
01:36:17
doubling of power output from one terawatt to two that's in the system today in the forecast but how do we get
01:36:24
to nine that's where China's going to be at by 2050 and we have to have this ability to more rapidly kind of
01:36:31
accelerate you know high power output systems like nuclear because while solar is great it's a low power output you
01:36:37
need you know much more volume So This is highly concentrated system and the cost per megawatt hour you know can be
01:36:44
significantly competitive if you use these small modular reactors and accelerate about carbon what about
01:36:49
carbon based Solutions as a fall back difficult to scale I mean we're not going to open up 500 more coal power
01:36:56
plants in the next couple years what about oil and N gas yeah so today n gas is 44% of of us power production capacity
01:37:05
and we are going to build out and we are building out new n gas facilities but that's in the forecast so all of our
01:37:10
forecasts today for the US are mostly n gas going out and and a lot of solar and
01:37:15
wind going out to 2050 to double our capacity and it's already a stretch for us to be able to double our capacity so
01:37:22
the only solution is to to rewrite the regulation we have to get nuclear going in the United States and these systems
01:37:30
are safe they are scalable and if the United States embraced this and we took a public policy perspective that this is
01:37:36
about competitiveness with China it's about National Security I'm hopeful that whoever comes in to lead the executive
01:37:42
branch in this next Administration will be really thoughtful and make this a top
01:37:46
priority so that's my plea and my reason for going through this today yeah I agree with you yeah this has been
01:37:52
another amazing episode of the Allin podcast for what have we what have we learned Jason it's important to have a
01:37:59
job otherwise everything just goes to pot yeah do not retire keep your mind sharp and shout out to our friend Phil
01:38:06
helmuth doing really great at the World Series of Poker happy birthday Xander happy birthday to our guy Xander yada
01:38:13
yada and for the chairman dictator the uh sulan of Science and your Rainman architect yeah David Sachs I am the
01:38:22
world's most moderate we'll see you all next time byebye let your winners ride and instead we open source it to
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the fans and they've just gone crazy with it love [Music] youen besties are that's my dog taking a your driveway
01:38:52
wa yeah oh man myit meet me we should all just get a room and just have one big huge orgy cuz they're all just usess
01:39:01
it's like this like sexual tension that they just need to release [Music] somehow we need to get merch
01:39:15
[Music] our I'm going all in