Elon gets paid, Apple's AI pop, OpenAI revenue rip, Macro debate & Inside Trump Fundraiser

Nick these guys are low energy today you notice that you know what we need to do we need to gamble let's do it Nick let's play a hand of blackjack let's get these guys amped gentlemen what an absolute pleasure to walk amongst some goddamn greats uh let me see if I can put a bit of pip in your step with a onetime black jackan to kickart one of the greatest podcasts on Earth it is I can confirm this is not AI my you did this we're gonna rock and roll proper tonight let's go all right get some is this guy you on right now you are going you I'm actually breaking my own rules for you guys I filmed

today's hand day foing but I'm going to film tomorrow's hand for you guys right now um it'll roll out this will roll hold on hold on wait a minute Tim you are and kiwi living in Calgary is that right yes sir correct yep kiwi living in Calgary been here since September 2022 the misss and I oh fantastic welcome welcome to my country I know how I I stumbled across you somewhere and I started watching all your videos on Instagram they were off the hook man congrats they're awesome thank you so much fun where where in New Zealand are you from uh from tanaki so West Coast North Ireland certainly not somewhere uh it's not a holiday destination for certain if you're going

it's like Dairy farming country it's it's it's beautiful but it's off the beaten path so yeah and how did you how did you choose Calgary of all places in Canada do you know what the Miss we holiday here uh my fiance and I may 2022 too and we thought it was just going to be a holiday then back to the farm um but I guess we had that uh Co Cabin Fever like the rest of the world and loved our time a so much that we just decided before we even finished the uh the holiday that we cracked on to to getting our visas and got back sold up me livestock and leased the farm back to me parents and and made the move and uh we haven't looked back I I don't think they'll be seeing me uh pulling tits on

the dairy farm anytime soon I'll that's Cal foring by the way um yeah so Lads uh what do we want to do here we want to put 10K and then give it to uh one of uh Tim's mates who's who's stuck or something how do we do this we Mr Beast this we give 10K to the next time you get coffee if we win you give it to the Barista or something what should we do yeah let's do it let's do it let's do a 10K free roll for Tim and his fans okay perfect so now do you want me to add that to my bet for this one yes absolutely we want to be in 10k sweat with you one and done is absolutely the uh the way to go about this here we go first part we've got to do here is pick

out are these real dealers or are these AI these definitely are real dealers they certainly Eastern European as far as I know I don't know what their quality of life is like I imagine they're warehoused somewhere uh and put on the tools now I had a I went with a with a young Lassie today and she roll Bing ass for me so I'm going back to the B Because they' been good to me yeah pick a BL pick a somebody who feels Blue Collar who wants to work for us we need somebody who's a worker and you have over a million followers now watching this yeah it's G from 15,000 to 1.3 million in this entire Journey so yeah a little bit nonsensical but okay this this looks like a good he looks like a

worker what you say he gonna work for us are you gonna you're gonna cop the insult live as I do it uh all righty it is day 15 uh going to Blackjack committing 13 I've got we have a $14,000 bit going on the laan for me personally but I actually have some absolute Legends with me today I'm bidding for the besties from the Orland podcast as well they're going to bring the luck having been rolled bold and AR by a young Lassie yesterday so $34,000 goes on the line oh no you guys want 10,000 on right not 20 geez I better not not take put us down for 10 put us down for 10 24,000 is going on the line alela looks like the kind of bloke who

stops at red lights playing GTA we won't hold that again real n if you will I need to see good cards Jack 2 do baby go oh my God that that worker B I knew he would do it for us I can't believe we've just pulled that off oh my god did that did that happen gentlemen that has really just happened you've just turned 10 into 25 holy sh holy cow oh my God look at s is like we can doing this for the whole taping that's amazing ready for another round we turn 20 10 to 25 all right so are we going to have a separate All In Balance we just keep rolling it every week yeah can you come back next week and can we rolling

we just keep rolling every week we might have to that is I cannot believe we've just Blackjack there is unbelievable well Tim have a good day all right Tim you are a legend Everybody follow Tim on Instagram let's get him to 10 million let's get I mean you have a future in broadcasting you are going to make millions you you went from The Farmhouse oh yeah literally and here we go now you're gonna be running a casino I think you should have Tim's Blackjack you should have your own Brandon build a whole brand on this on Insta tell I would have to run anything if I can just play oneand of blackjack with you guys and I land Jack Ace every week that is unbelievable and like we said that

15K we won yep that's yours for you and the misses go on vacation no no no no we said it we said it we want you to do something go with it we're already cashed up you take that 15K you take the misses out you get some first class tickets you meet your M Italy and then let's go that's it how about I go first class to the orand summit now that we could play some oh we could have a s we may or may not have a have a fun casino night there so this will be fun yeah you got to come all in Summit for sure yeah get the misses take the 15K two first class tickets get yourself set up in a nice hotel and we will see you there all right everybody let's get to

the docket well done Tim thank you Tim see you later I appreciate it I can't believe they have live dealers standing in a warehouse in front of a webcam I don't that that is such a like imagine walking into that facility you're surprised that facility only has what dealers it's like a lots there I think you can choose at the door of what you want to do D blackj yeah or whatever else you want to whatever else you want to be on a web probably making a porno in the next room above the table and below the table there's two different tapings occuring oh oh my God smell warehous oh man well it's rough rough so awesome

so what happened you dm' him that was so good yeah we he you know what no what happened was somebody emailed me and they're like hey that's my mate that you talked about he's a big fan of the show it turns out you know this is the thing about influencers now this is the thing about this micro celebrity stuff we all we all know each other by default right so he was just slid into the there's definitely camaraderie yeah that was awesome that's awesome I'm so glad he won and uh you know he he basically got smashed in his DMs like a thousand people dm'd him oh you're on Allin they're bugging out to you on Allin and uh so yeah I just said hey would you do

a hand would you do your live hand with us and then I didn't I didn't I wanted to clear with you guys before I put our money on it or whatever but I couldn't do that because I wanted to surprise you here we are I did not think that was real when he popped up I thought it was like a record thing yeah all I could think of was do I look like an ass by saying more so that I just stayed quiet we more than I was like you start with 50k let's just see what happens I know you ever feel like when you like tiptoe into the bet with like a small amount but you you want to do more and then you win and and you feel like you actually lost money because if you made a bigger bet you

would have made more I lost 60k I should have put I no I would I would have put 50 I would have won 75 instead we put 10 we won 15 I lost 60 we made a jake house size back yeah yeah there a feel that let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy with [Music] it I don't know what's going on anything going on in your life anybody uh been busy having some Adventure sacks seems like you were busy last week any anything to report from your side of the world well should we take you take you guys behind the scenes of of a presidential fundraiser I admit I've

never done one before so it was uh it was a new experience for me when you host a president it's just a whole different level of preparation the Secret Service was out like a week before the president has an amazing Advanced team they work out every detail they make a map of your house they really have to think through everything the police shut down the street it's really a very involved process by the way I went to dinner in the city that night and you know I was right by your house so I drove up the street and they had everything blocked off on like three blocks on both streets like on both sides of your house

but there were all these protesters like all throughout San Francisco like prot Trump people had driven in from all over NorCal must have been because these were not San Francisco natives supporters yeah and they came in with these like cars and the streets were blocked it was a total zoo in the city for hours before and after your I actually stayed in the city that night and I heard the people going nuts for hours afterwards but it definitely like took over it took over the city yeah so really interesting is that all week the San Francisco Publications had been trying to Jin up protesters by writing about that you know the president's coming to town and

the protesters are going to show up and in fact there was almost no anti-trump protesters and then a huge number of prot trump demonstrators came out and they were waving flags and cheering along his motorcade as he was coming to to the house so the whole protest thing backfired why do you think anti-trump protesters did not show up what happened I think there's just a big enthusiasm Gap I mean I think that the prot Trump people are very enthusiastic and the let's call Pro Biden or anti-trump people are just not very motivated right now so it's exhausting to be against Trump for eight years like this has been exhausting think they've exhausted folks uhhuh so

anyway who's the founder of intercom he was there and I I think this was actually a good summary because he said that he spoke with a bunch of people and none of them identify as Republican all voted or donated Democrat in the past that's true for me too now they're backing this guy for his policies on war immigration crypto and more this elections referend on those issues so Owen you know came out appreciate his support but it's true the campaign told us that they had more firsttime donors at this event than they've seen before and that's because a lot of these people hadn't supported

Republicans or hadn't supported Trump and they came out so we have a few photos and videos here to take you behind the scenes I think might be super people so the first thing to say is that President Trump is extremely Charming he connects with people in like 5 seconds I mean he meets you and and finds something interesting and or funny to say and he's hilarious I mean when he spoke in the the living room and he talked extemporaneously for an hour he's speaking off the cuff every speech he gives is different this is him coming into the living room he had made just a few notes about topics he wanted to talk

about on a piece of paper but that was it it was all completely extemporaneous no teleprompter obviously and he's hilarious I mean people don't realize how entertaining he is what what were some of the greatest hits what did he hit on did he hit on low pressure from showers did he what did he what because I know he's got like some things he hits on that are relatable was it all like specific crypto topics Tech topics or did he go off he did you know he did talk crypto and it was really interesting at one point in his speech he called on the winlos brothers who were there and I'm only mentioning this because it was already reported that they were there so I don't want to speak

out of school but he said to them he says I know you guys created Facebook you know he was giving them credit for creating Facebook and said created yeah but he says but but it's okay I mean you guys look like models you were dealt a lot of cards you know a lot of cards you I mean they're very good-looking huge IQ and I mean look at him great hair yeah and so I thought okay wow like he must know the wink ofos Brothers he must have met them previously and I found out this is the first time that he had ever met them so think about the awareness that he has to know that they're in the audience to see them Point them out and then have this kind

of hilarious routine with them so he's someone who's very sharp very on the ball very funny and then his energy level is incredible so he had started his day at Mar Lago at 3:30 a.m. Pacific Time 6:30 a.m. his time then he flew to Arizona did a trump rally in Arizona then he flew to San Francisco for our event he spent four hours at our event he could have left an hour earlier if he wanted to then he flew to La for more events the next day there so think about his day and his energy level was just amazing the whole time shath your thoughts before this goes on for an hour yeah I'll give you two observations the first is that I think that there is a huge

gap between how the media tries to portray Donald Trump and what he's like when you meet him in person and that Gap is really wide and so I would say specifically to Democrats and independents you really do need to sit in the room and feel what it's like he David David is right he is charismatic he's intellectually sharp and he's funny and when you put that together he can engage an audience for a long time and be totally extemporaneous the other thing I would say that is that he is very polite and he's kind in a way that was disarming and was not what I expected and so I felt that I had misjudged him many years in the past and

so I was very glad that I had an opportunity to sit beside him and to actually interact with him one onone it was really really engaging and so that's that's more about the style and then about the substance what I would say is it was not just a pro-america agenda but it was it's very clear that he was Pro Innovation so he was really supportive of AI in the details that he talked about he was very supportive of crypto in those details and he's very much low regulation low Taxation and so when you put that together it does stand very much in contrast with what the alternative is um and so I think that um both of those things are a reason why

even if you aren't willing to vote for him I would encourage everybody to experience what it's like to hear him freeberg your thoughts on uh all this I didn't go to this I didn't go to the event I don't know no I just big picture wonder I want to know why why chamat didn't wear a tie everyone else is wearing a tie you didn't want the tie chamat doesn't need a tie he's a baller all right you want to say what what Trump said to you when he met Natalie so it's us talking any he says you guys are a really beautiful couple uhoh and and I said well thank you and then he turns to me and he goes well you must be really rich

he and I started laughing out loud Nat thought he was hilarious so oh because of the disparity and the looks between you and Nat is what sort of implying you guys sat next to him at dinner yeah yeah and was that like an hour just private conversation between the three of you this is the thing that he does he actually sits there and he says you know folks I'm happy to continue to talk about whatever you want me to you feel free to ask me questions or feel free to just go around the room and just tell me what you think and what would happen is people would say different things and then he would start asking questions of

other people and the thing becomes almost like this Roundtable discussion of topics from we talked about Iran we talked about foreign policy we talked about deficit crypto regulation everything what he say about what did he say about deficit in debt well he's very much he's very much on your side of we have to really figure out how to get spending in order and get the deficit under control well congrats on it sounds like a successful event for you guys sounds like you guys are in the halls of power now and Trump has flipped his positions on EVS abortion and taking

away a woman's right to choose he's flipped his position on Tik Tok and flipped his position on crypto I give him a ton of credit four flips in a month and he just sweeps all those votes it's pretty smart um and for the Democrats who are listening he's also Pro you're losers and you're not listening to people so you're going to lose the election and he's Biden's going to get demolished nobody wants to vote for somebody who they think J you think Biden's getting demolished right that's your thought I mean did you see the video that came out this week where he was at some event and he looks it looked like a a mitch mcconell moment right where he kind of

Frozen he was likeu so I don't want to make it like elder abuse and I know like not elder abuse to to S to say to to be honest about what you're observing especially when it comes to I'm most role in America yeah he's got to he's got to bow out 538 just put out their election forecast showing 51% chance of Biden winning 48% chance of trump winning as of two minutes ago yeah who knows I think it's all going to be determined by the saxs you were going to say well I just think what other job in America could Biden even be qualified for like what what would you hire him to do is there any is there any mental job you would hire him to do is there any physical job

you would hire him to do would you hire him to be your babysitter I mean I don't think there's any job in America that anybody would hire him to do except for maybe president it's kind of kind of crazy and this is where like the Democratic parties in shambles we should have the highest standards for the mental acuity sharpness and energy level of our president it's the most demanding job in we need a cognitive test but the Democrats need to just look deeply in the mirror and say hey you're Fielding a candidate that nobody's going to vote for that's the problem here and there's not enough anti-trump sentiment and

Trump's a genius that flipping his position to to get huge swats of Voters and so you're going to get demolished if you don't hot swap them I guarantee you hot swap is coming I predicted the Trump TV flip and I predict it now I think I think you're right about maybe some of the issues where folks will get much more precise on these issues but I I actually think what's happening is that this is really going to be about Trump versus KLA Harris I don't think Biden is going to step down at all but I do think there's a chance a non-trivial chance that Biden wins and if he does I don't think he's going to make it four years

and so then the real question is do folks want Kamala and have they had a chance to really figure out whether they want to vote for her I think that's really where it's going to come down to it's it's really Trump versus KLA Harris and if you if you frame it as that chamath then it's even a bigger trouncing right like if you put Biden if you put kamla against Trump then what would the it would be a even bigger shellacking yeah in your mind I just think that without saying anything bad kamla because I don't know much about her is really what I would says I don't know much about her and so you can't have somebody who gets into that role accidentally I think there we have to

give both president Trump and President Biden a lot of credit which is they stood in the eye of the hurricane and withstood all the pressure and won and he who wins that way deserves to be the president of the United States she hasn't withstood that and so I think that it's pretty unfair for a lot of Voters if there is a bait and switch and so I think that you have to look at both of these two candidates and assign a reasonable probability that both of them make it to the finish line and from at least what I saw up close I think it's a much higher probability that Donald Trump does than President Biden does and listen Biden hasn't made it to the finish line of his first term

it's obvious to everybody who's in cognitive decline you put up a candidate who's in cognitive decline you're going to lose even against you know Trump who people really don't like these are the two most unpopular candidates of our lifetime I'm not sure about that I don't think it's true that people don't like Trump I think that he's got a core but yeah no people the Republicans including the Republicans including yourself we looking for a different candidate just months ago you said Trump was not your preferred candidate and you are all in on to santis so let's not pretend like he was your preferred candidate he's the remaining candidate so

you're I think it's wrong to say that there's not enthusiasm and love for Trump we saw it on the streets we saw it in that room there's some yeah do you see Logan Paul meeting with Trump four years ago he was for Biden now he's for Trump have you ever seen Trump walk into a UFC event they go nuts for him I'm just saying there a lot of there's a lot of enthusiasm and a lot of love out there for Trump a lot of excitement I don't see any of that for Biden there are people who don't like Trump and that drives some support for Biden but if you look at enthusiasm and excitement it's all on the Trump side in this we are in total agree ment yes there is no

enthusiasm to put somebody in cognitive decline in the White House all right listen we got to get to the docket we could talk for hours about Biden Biden Biden Trump Trump trump and we will it's going to be a continuing topic but let's get to a very full docket here breaking news last night Tesla shareholders have backed their guy yes there was a two important votes measures that Tesla just had taken with their shareholders the first was approving elon's pay package the $56 billion pay package that was voided by a Delaware judge we talked about that on episode 164 back in February and then moving Teslas incorporation from Delaware to Texas this is also major remember we talked

last week about the Texas Stock Exchange here's the two charts massive overwhelming support there were some notable people who dissented I think Norway's sovereign wealth fund and cpers were two of the ones who were voting against it Tesla share price popped 6% on the news you don't want to lose Elon a Tesla that would be really bad so your thoughts chamath on this vote and maybe the move and what that represents it's kind of odd that we're in this crazy Place same more when that original package was unveiled there was a lot of people including me who thought there's no way he's going to hit this it's just way too aggressive

and it requires so many things to go right and so I think in part that's why three4 of the Tesla shareholders approved it then 73% is not squeaking over the line it's not 50% plus a vote it's it's a super majority and that excluded Kimbell and Elon sh ex so and then I think you had this very dangerous form of judicial activism which essentially ignored the will of the shareholders and tried to create some administrative ruling that threw up this big question mark So then in in typical Elon style he's like great we're just going to get them to voted again and then yet again it passes and it looks

like it's going to pass by around 73% but the problem now is that it's still not clear what happens I think that there's still some question marks where this may not nullify the judge's decision it may actually create more question marks so hopefully this gets sorted out he should get this stock he never should have or these options he never should have had them taken away and so I just hope this thing yeah it becomes a nothing Burger saaks you have thoughts on this outcome is it surprising to not surprising and then I I think the jurisdiction thing is bigger than maybe people are thinking because Delaware has been the standard for incorporating companies but Elon is

putting his companies in Nevada and Texas we saw the stock exchange uh last week getting back to move to Texas this does seem like there's something about jurisdiction in the water what are your thoughts Sachs well I think it's ironic that the winning margin 73% is the same margin by which shareholders approved his comp package back in 2018 so again they got 73% voted for this 2018 now they voted to reapproved by the same margin and the reason why they had to do it is because this activist judge in Delaware avoided it on the grounds that somehow the original shareholder vote wasn't valid and I think this is interesting that the margin didn't changed because it shows that

shareholders aren't in grates Elon delivered what he promised and now shareholders are upholding their end of the bargain and certainly they didn't have to take that position there were different groups like calers who basically took the position what have you done for me lately you know yeah you delivered but we don't have to pay you because of the judge so we're not going to pay you and I think shareholders wisely approved the package because I think there was some chance that if they reneged that Elon could leave the company and I still think he's absolutely vital to all the Innovation that's going to come in the future from Tesla and you see this the stock is

ripping on the news is up about 3% today in a down market so clearly the market thinks that securing elon's future at the company was the right decision and shareholders did the right thing yeah in ter in terms of the the downstream effect on this like you said it raises the Spectre of Delaware being an activist State that's not why anyone incorporates in Delaware the reason why you incorporate in Delaware is because you think it makes you subject to an extremely predictable body of corporate law that's been tested and become bullet proof over many many decades and now all of a sudden you have to worry that maybe

a judge will set aside a shareholder vote for reasons that seem incredibly specious especially in light of the fact that the shareholders just reapproved it so obviously the shareholders did didn't think they needed your protection and they voted to reverse you and moreover Tesla could still be subject to paying the legal fees of these trial lawyers who've asked for literally billions of dollars in legal fees that the judge Sol to rule on so imagine this imagine that the shareholder vote gets set aside by the judge it then gets reapproved by sholders but the trial lawyers who brought this nuisance suit can now get billions of dollars if that happens I

mean Delaware can kind of Kiss its status as the premier corporate law state way freedberg is this a John G Moment is this where capitalism socialism and the state Collide and people now start thinking H maybe we need to create a new jurisdiction a new framework that's a good question I think it's a good example for capitalism and I think it should Shine the Light on how other CEOs are getting compensated at public companies where there's typically a multi-million dollar or multi- deam million doll pay package that has no dependency on the performance of the business you can make tens of millions of dollars a year and

not drive shareholder value and I think that the way that this deal was structured where Elon effectively got 10% of the company for 10 Xing the stock should be an example that other boards should actively consider when considering both candidates and their appetite for this sort of a package and their compensation packages themselves the way executive comp typically works at the board level at public companies is you hire these comp consultants and the comp Consultants come in and they use comparables which basically means let's do what everyone else does and so you have this self-reinforcing system of compensation and benefits for CEOs that

bumps up a little bit every year that ultimately has not has some degree of ownership in the stock but fundamentally has very little downside and Elon had no guarantees in his pay package when he got this comp package originally in 2018 and he got 10% of the company if he 10x the stock which is what he did I really think that it is worth having this become the kind of Beacon for all boards to consider and it seems like shareholders in aggregate are applauding the concept and look Elon is a special guy and he gets special treatment but I think that it moves the needle and should move the needle a little bit for other CEOs and other boards to stand up and say we should think about something

that looks a lot more like this than what we typically do and I think you would find a very different cast of people showing up to become CEOs and to drive performance out of these businesses and a lot more risky and aggressive behavior than what I think you would typically see in big companies that are in maintenance mode what do you guys think of the organizations that initially voted yes and now voted no they basically are saying look I mean if you think about it you're big public company I don't know what iss recommended this is institutional shareholder Services they they recommended no both times right and so ISS basically is what a lot of big

public fund managers will follow when they make their votes and so if I'm a shareholder that's not what I'm no no I know what I'm saying but like let's say let's say that I'm black rock or I'm a share a big I'm not goingon to put Black Rock as some big shareholder of Tesla stock why would I vote to give away 10% of the company when I don't have to yeah very simple because he would leave morals and ethics matter and you want to do the right thing and you want to incentivize capitalism to operate properly and want to incentivize the people who take on the burden of running these companies and the people who voted against it I think people should just make a list of those individuals Cham

and they should not do business with them because if somebody is going to double cross you they've shown you who they are these are people who double cross them they got the benefit and then they stabbed them in the back make a list exactly what they did that's exactly what they did it's worse if they voted yes the first time and then they voted no no I'm saying and then maybe you're just against the deal but if you're yes no then that's a a reneg then you're a true scumbag you're a scumbag is that public anywhere who did that yeah there are a bunch of folks that said that they you know I think it was cpers that voted yes and then when they were on trying to explain

they were like tap dancing in like corpor jargon but really what they are scumbags Jason you're right they are morally and eth void and they're reneging and this is the one rule in business you're not allowed to do and the people that do that are these penny pinching scumbags I'm not saying a black list but I would say making a list of people who maybe you want to consider not doing business with is how I would frame it these are but they're public they're Public Market investors they're not private investors they buy the stock on the open market so they don't have to worry I mean I think the question is what are the chances that Elon leaves

the company if he didn't get the pay package the chances prob risk and I think Poss think about it yeah non zero possibility you made an agreement with somebody and you shook their hand yeah why does care whether he would have le left or not left this is like you have to do the right thing yeah you have to do the right thing you promised the guy x amount of money for doing y amount of things he did the why things and then you had a judge come over the top because of somebody who owned 10 shares and all I'm saying is if you if you don't have the intellectual intelligence to look past that and say wait a minute we just paid the guy to do this work and now we're going to reeg

they're gaming the system I just think that like how can anyone who is capable of doing a job sign up for a pay package how could anyone and the people that will sign up are these like middling corpo people who will accomplish nothing and will run these companies in ways that then speaks to organizations that have just proven themselves to be totally unreliable the irony of the thing is that these folks thought that they were getting a 10% free roll when they voted no and the reality is that by him getting the pay package the certainty of him sticking round at the company caused the stock to go up by 10% so they actually had the calculus wrong

that if they had gotten their way the stock would have declined by more than the 10% free roll they thought they were getting this is I think the the main point and 10% being the ownership of the company that he gets yeah the pay package was laughed at on CNBC by all the experts there's no way for him to hit this stuff if he does hit it he's getting a fraction of the value of it and this is why stock is such a valuable device if employees get stock and the CEO gets stock and everybody in between and Retail investors get it and endowments get it and your retirement account gets it everybody rows in the right direction

is it perfect no people can buy back their stock they can do a little gaming on the margins but it is the most pure system we have everybody has a share of the company so if you're a socialist you know like you should actually kind of appreciate how stock works that everybody has a chance to buy everybody has a chance to participate this is the model we should be using for all CEOs they should all get a massive package if the stock goes up and to the right it's so obvious and this was so unfair let's see this flipper I want to see their explanation the compensation is commensurate with the performance of the

company did you vote for it in 2018 I believe we did vote for it in 2018 but this is about long-term value but do you believe you were duped in 2018 no I believe we used the information we had available and made the best choice okay so here's what I find so interesting about this particular choice 73% I believe of the shareholders voted in favor of in 2018 a judge has said that shareholders were not informed properly if you talk to most shareholders by the way especially big shareholders they say we were not dup we we understood completely what we were doing and we were on board with this now that this opportun almost opportunity has arrived on your doorstep uh to say

to actually rethink this if you will there's a view that oh maybe maybe we're not getting the value uh we we thought we should MH you thought you should get it but he's worked by the way under the assumption that he was hitting the numbers right and and dealing with the contract mhm if I told you that you were being paid a certain amount of money in 2018 and then I called you and said actually you know what we're not going to give you that money anymore what would you do it's a great question I would um I would go to my board you know I would talk with my board this woman is so smug what is her name Karen Frost I don't think she's smug sorry marshy Frost oh sorry I

thought it was Karen Frost I think that this is emblematic of the kind of person who is incapable of actually doing the right thing and there's a lot of these people that run a lot of these organizations that I mean what what kind of an answer is that I mean it was a non answer that's why I said it was smug let me just ask each of you you've all started companies some of you are still running companies would you take money from her and cpers after that statement hard no for me yeah but remember she's not investing in private companies she's buying stock on the open market so announc yeah cper announced that they're

an LP and they're starting to do directs oh okay I didn't know that yeah they're trying to catch up they've been behind on Venture let's call this whole thing what it is it was a heist you had these trial lawyers they find a name plan if who's got nine shares and on a contingency fee basis they go after elon's pay package what are they looking for $5.6 billion how does a lawyer make $5 billion how that's what motivated this whole thing they don't care about Tesla they don't care about the company they don't care about shareholders they're looking for a giant multi-billion dollar contingency fee payment and they took

their shot and they found a Delaware judge to basically agree with them even though shareholders approved it and then shareholders reapproved it so my question is how much are these trial lawyers going to get is a judge going to award them billions of dollars for what was clearly now a mistake to avoid a pay package that shareholders wanted to stick with if they award these lawyers billions of dollars which is what they're seeking no one's going to want to do business in Delaware anymore because it subjects you to these stickup up Heist by trial lawyers so I think that's going to be the next big shooter drop is what do

these trial lawyers get awarded well what are they going to get paid because they also wanted to get paid in Tesla shares no I'm serious here's an idea buy the shares yourself yeah they said we don't like your management of the company but uh we want your shares yeah yeah by the way they got their shares and then they voted to give Elon the next pay package so it's just a full-on grift they they secure the bag but supposed to protect corporations against this grift that's why people incorporate there when people ask why does Delaware have the special place that everybody decided Delaware would incorporate it was because it was predictable lawyers

felt this was the most predictable jurisdiction that would be the most shareholder friendly most shareholder thoughtful whatever word you want to use they would defend the the the shareholders and here we are the last company I started 8090 we incorporated in Nevada and I just redomicile a couple of other companies that I own into Nevada as well it's becoming a trend we're having very big discussions about this in the startup community of where to domicile your company and more to come on this one okay let's keep moving Apple had a huge announcement this week Apple has entered the chat they announced Apple intelligence get it Ai and they have

included a chat GPT integration from open AI this was really I think imp impressive in many ways because people thought Apple was far behind it was a banger of a demo a lot of unapp like futur looking demos so none of these demos that we're going to show are coming to your phone this week they were really I think playing catchup with Microsoft and it worked stock is up 10% uh they added about 300 billion in market cap now the top three market cap companies are all driven specifically by the perception that AI is going to be the next technological wave Microsoft Apple and Nvidia all cruising around about $3.2 trillion and the this top three keeps uh

flipping back and forth Apple had past Microsoft and market cap here's the features I'll just give you a quick overview of what we're seeing it's added uh grammarly like features great product grammarly I'm not an investor but they added the ability to proof get grammar help AI will transcribe and summarize phone calls with permission obvious double opt in it will prioritize notifications and iMessage and email that are super important you can do smart replies uh and Company where an investor in superhuman or he does this kind of stuff and they're bringing AI to Siri and this is going to be the big win

in my mind you're going to be able to say things like you want to order something in door Dash or Uber Eats or instacart and it's the AI Siri will be able to dip down into Apps they're building a whole app AI interface much like the rabbit device CEO talked about doing and uh I think this means that apple is going to win the AI consumer there is a deal with chat GPT that I'll get your feedback on gentlemen in a moment according to sources apple is not paying open AI it's a non-exclusive deal chat GPT can be swapped out apple is also talking to Google about a similar deal obviously it doesn't take a genius to predict that apple is going to auction off the llm integration I think

to the highest bidder they did that with the search deal Google pays Apple 20 billion to be the default search engine that's about 5% of Apple's annual revenue if you didn't know and it's all profit right so this is a huge uh profit moment I'm going to pause there for a second before I get into more of this uh and just get your general reaction shath I think you nailed it right at the beginning the thing that I was struck by the most in this is we went from a phase where in the Steve Jobs era these events were because you were about to unveil a product that was done and shipping as of that day and then at some point we transition to they are

talking about products that they intend to release within a year now we've shifted to the part where they're talking about software Integrations from a third party that will happen in a year so if you just look at it sequentially it's a little disappointing in that sense because for a company this big it's really not much of anything you can't really touch it and feel it and it's going to take a year before we really know what the totality of all of this is meanwhile the economics of the chat GPT deal were leaked and there's no money on either side so I don't know it's a little bit

of like it's really not much of anything to be honest because there's nothing we can actually play with experience freeberg your thoughts on the vision here at least and to chat's point Apple used to release dope stuff fully baked ready to go and now we are increasingly see them talking about what's coming next year or at some point do you think Apple's going to win the consumer do you think Apple's falling behind should they have built their own llm by this point I'm not sure I think what they have shown is more of a glimpse into the future of hard Ware where for the last two decades or so Hardware has mostly been a portal to

access the internet and use the internet through apps or through the browser and Hardware has done a good job of enabling that but I think we're now going to see a much more tighter coupling where the hardware becomes more valuable and it's less of this kind of funnel for apps to flow through and data to flow through but the hardware actually becomes the value Creator and you see a much more tighter integration in the hardware OS and the AI or the software that enables you to do lots of things you're no longer just going to use the hardware to access an app to do something so a lot of the companies that

are app developers are likely going to end up becoming Services developers that enable that Hardware AI to do something for you and this coupling between hardware and software because of the way AI works is I think becoming more apparent not just in consumer devices but we see it in the data center and in the Enterprise stack as well you know we've seen that obviously there's this tight integration between the chip and the software stack that grock built there's a tight integration between Google's TPU stack and then the ml instances and the and the tools that you can use in Google Cloud that are optimized for use on that TPU Hardware nvidia's got a big effort obviously in

continuing to build out their software stack that sits on top of their hardware and works in a more coupled way and then Google has this ability to kind of realize I think a similar outcome with pixel phones which is a pretty sizable opportunity for them and then all of the hardware manufacturers can probably grab more Val now as they build their own AI into their OS and you start to see more of this value realized by the hardware companies so I think that there's this really interesting shift where we've all thought about Hardware as being this like commodity where there's some degree of like Improvement or innovation made over time but now it seems like a lot of

value might actually get captured by Hardware companies in all points in the value stack so it's an interesting moment and I think that this just shines a light on that Trend that I think is going to play out over the next couple of years it's clear Sachs that right now to enable these features you're going to have to have a pretty solid device they announced here at the keynote at WWDC that you need to have an M1 chip or better iPhone 15 or better so and having all this local data is a huge Advantage for Apple they've got your messages your phone your calendar your photos your app Behavior the data inside

of your wallet all of this gives them a huge huge Advantage so I guess the question is do you think this renews the Apple franchise and people start upgrading their phones again to get all these new features David sax well the market definitely thinks so because Apple was up big on this news and even if it was largely vaporware at this point the market definitely liked where they were going and frankly Apple did exactly what I said they should do last week which was to reinvent Siri as an llm with the ability with the capability to reach into apps as an agent and take actions on the user's behalf that's what they effectively announced however Apple

took a shortcut to get here they partnered with open Ai and this is something that I don't think they've ever really done before at the operating system level apple is famous for being vertically integrated for being a Walled Garden for being end to end they control everything from the chips to the hardware to the operating system and they don't let anybody else in until you're at the App Store layer this is allowing somebody in beneath the level of the App Store this is allowing someone open AI to get access to your data and to control your apps at the operating system level and I think you know Elon pointed out wait a second what are the Privacy implications here and I

think there are major privacy implications there's simply no way that you're going to allow an AI on your phone to take all these actions on your behalf without giving that model substantial amounts of user data and that is a huge change for Apple remember Apple in the past has been the advocate for Consumer privacy there's a whole issue of the San Bernardino terrorist where the FBI went to Apple and said we want you to give us backd door access to their phone and apple refused to do it and went to court to defend user privacy and furthermore one of Apple's defenses to the arguments the antitrust Arguments

for allowing sideloading and allowing you know other apps to get access to parts of the operating system is they've always said we can't do this because it would jeopardize user privacy and user security well here they are opening themselves up to open AI in a very deep and fundamental way in order to accelerate the development of these features in other words they took the shortcut they could have developed the llm themselves they could have developed the AI themselves but they chose not to do that and I think this is going to open Pandora's Box for Apple because again they've proven that they can open up the operating system to a third party

now and who knows what the privacy implications of this are going to be it turns out Apple has addressed this head-on they hear the concerns and much like when you share a photo or you share your location it's going to ask you over and over again do you want to let this app do this so they're aware that this is an issue they brought up privacy every single time but people don't trust open Ai and they do trust Apple so this is strange bad fellows to be sure chath your thoughts I think that Apple really cares about privacy when they're to hurt a company they don't like I.E meta and they're they're willing to figure out a way to work around it when

a company that they clearly support open AI yeah well when you're behind you know you behave differently than when you're ahead and you have your Monopoly freeberg you wanted to add anything here before we move on to the next story okay in related news open AI has hit a run rate and this is kind of stunning of $3.4 billion that means they've roughly doubled their monthly Revenue in the past six months or so these are not official numbers open eyes denying them but here's a chart that somebody put together based on all the different leaks and approximations of what open is making the reason this makes no sense this

chart and it shows a year and then it shows a month a month a month a month is because there's been different leaks at different points in time but just to normalize this in 2022 for all of 2022 before they really had a lot of customers 28 million and now on a $3.4 billion run rate again it's pretty stunning number if you can you can do apples to apples here because like 2023 Jan is 200 million that means that June is 300 million if they're on a$ 3.6 billion run rate so yeah and so if we were to even look at you know the number of people who work there 770 if you put that at 500,000 a person some Engineers getting a couple of million some people maybe getting less they're probably only

a half billion dollars in salaries a year who knows what they're spending on the infrastructure for this if you were to do evaluation on this everybody knows they sold a bunch of shares in secondary at around 80 billion which means they're trading at if these numbers are true 25 times for Revenue which is close to what Nvidia is trading at right now obviously they're two very different businesses so your thoughts on this as a SAS company obviously the majority of this revenue is consumption based some portion of it is SAS based reoccurring like subscriptions we pay for at launch my

Venture fund we pay for 6,000 a year to have all 20 25 people on chat GPT as a corporate account maybe it's 250 300 a year per person so what do you think of this business sacks and how fast it's growing obviously some of it's API consumption based not reoccurring some of it is reoccurring first of all let me say that you know we've talked about AI General Hospital and all the soap oper issues around open AI yeah and you know judge sax had opinions on that yes but putting that aside I mean everyone acknowledges that their products are awesome I mean open AI makes really great products uh with chat gbt 40 being at the top of the list and I talked about how when we move from chat gbt 4

Turbo to 40 at glue the speed and quality went up you know at least 2X and it felt like 10x so they have the best language model as of this point in time and they also have other products that are really great like the whisper API which does transcription I mean there's a whole bunch of tools they have that are great for developers so nobody's taking anything away from them on the product side and I think you're seeing that in this Revenue number now if I was to try and take apart this business as an investor I would separate the b2c business from the B2B business the BC is a consumer subscription plan people paying $20 a month I I'm one of them I pay the 20 bucks a month it's probably

the only llm that I would pay 20 bucks a month for how often do you use it daily weekly monthly it's a a handful of times it's it's not to be honest it's not like a daily use for me but I I probably use it every week I would say at least once yeah so I still use it I have to say though that the other llms are catching up and if J and I ever gets good enough or you know when grock gets to the next level am I going to stick with that $20 month plan I'm not sure it depends whether open AI can really maintain the the leadership it has or the perception of leadership okay so that's half the business and then the other part of the

business is the B2B which is the the API products that effectively they're selling to developers and that's where I would place the future value of this company I mean as somebody who invests in SAS when we see a business that has uh beta C subscriptions and beta B we place all the value on beta B and the reason is because historically the churn rates in BC are too high yep 5 to 10% churn rates are common 50% a year per month per month 50% turn a year very common open AI may not be experiencing that yet but it's very hard to avoid the downdraft of consumer churn and and you know on the other hand on the B2B side a good B2B business has expansion 120% 150% expansion year-over-year from same

customers in other words they're order more so you would compare this business to Amazon web services Google Cloud Azure that's really the business you're yeah the first thing I'd want to know is how much of the 3.4 billion is consumer and how much of it is is developers we'll find out eventually chamath your thoughts on open AI surging Revenue I'm kind of in David's Camp which is I think to the extent that the business has a large terminal value it's going to be because of the Enterprise cash flows the thing to keep in mind is that I still haven't seen Enterprises

building production level products using AI it's all experimentation right it's all experiments now yeah that's nothing against open AI it's just a commentary on the fact that we are at a very very early part of the cycle where when you use this term blast radius right what are you referring to you're referring to this idea that you're stringing together elements of a model or multiple models that each have some non-trivial error rate and by multiplying all these error rates together you get your final product but the unfortunate reality in most AI workloads is that you end up with something that's not very good and that's not the fault of open AI nor is it the fault of llama it's just the

nature of how these bottles work and the fact that you know you've gone from something very you know deterministic to something that's very probabilistic and we have not found a way to create extremely high quality experiences we as an industry that make this cost justifiable so right now as you said Jason most of that is toy apps and a lot of experimentation will we get there I absolutely think so but we're not there yet so I suspect that most of the revenue then is on the consumer side right now actually and so I just looked at Google Trends and I first looked at the United States and I just wanted to understand

and how is the traction and what's interesting is is that the traffic in the United States is down about 25 26% since the end of the school year which I think reinforces this belief that chat GPT has definitely over indexed in that young people's cohort where they rely on it to write essays or what have you but then I looked outside the United States and worldwide and what's interesting about that is that's actually still growing up into to the right so I think you have then an arpo problem which is the same thing that we had to deal with at Facebook which is we have these extremely valuable users in America they ASM toote at some point and

then we have to grow in other markets but those markets aren't nearly as lucrative right the they just average revenue per user rpu per year is single digits maybe it hits double digits as opposed United States where it could be triple digits right so then I I don't know I would just wrap up by saying that I think that it's just if this number is right it's just an incredible Testament to what they've been able to uncover and create in a short amount of time that is legendary stuff yep but what I can tell you in working with Enterprises around these AI experiences through 8090 we have not yet

seen production quality models being deployed in the wild that are dealing with very very important business processes which means that most of the revenue right now is probably consumer oriented okay freeberg you I don't know if you got to see Sunny's talk at liquidity last week but he talked about how many of the cios CEOs are looking for open- Source Solutions here 80% of them want to go open source they don't want a proprietary model uh to invest in but the best model right now is a proprietary model so what do you think about open ai's Revenue surge is it sustainable or are there 20 better open source projects that are

going to be death by 20 open source project cuts and chat's general feeling here that hey it's not ready for prime time yet it will be but we're in the AI dialup era to use an analogy here hey you can see the promise but it kind of sucks in terms of reliability maybe open AI is AOL right like I think that there's going to be a Google that'll show up that'll maybe it's Google that'll grab a large part of the the value here or you know ultimately the cost comes down so much with the open source tools I do believe that these open source tools are incredible I mean the the open source llama

instances are like they get you 85 to 90% of what you're looking for so if you're an Enterprise user why would you pay thousands of dollars for the open AI platform when you can use llama and you can tune it and you can build your own front end to it your own integration with your own data etc etc it's just early days for Enterprises figuring out how to do that but I do really believe that the future is Enterprises companies building their own llm driven tools for both internal and external products that leverage smaller open- Source models and that we're kind kind of in this you know

dir of people's understanding and ability on how to actually execute against that which makes the default to be go to the chat GPT interface I will also provide a counter I just did a project at work this week we had a like a big offsite we had 20 people involved and everyone used chat GPT to get ready for it so there was a ton of analysis a ton of data Gathering a ton of reporting needed for the offsite and rather than hire a third party or have people go out and Source data themselves a lot of us including myself I I prepared like maybe a quarter of the material just used chat GPT and pulled the sources to make sure it was all kind did you did you oh you did pull sources and check facts right

you do have to do so we pulled the and there was a lot of wrong stuff just clear but for our to ballark percentage I would say 25% of it was like wrong and then you had to clarify but the truth is for this particular application it didn't matter we were making some approximations on markets and sizes and and various facts that we were kind of using to do some strategy stuff but and some product development stuff so I would say like found it useful you found it 100% And I would say it saved us hundreds of hours hundreds of hours you paying them an Enterprise license or a consumer license 20 bucks bucks a month what is that it's the same thing for the

Enterprise jamaath you can just sign up and for 20 bucks a month you can have your whole like did freeberg yeah no freeberg like you're just paying it yourself or you pay for everybody at ohal I think everyone has the right to pay for I think other people at the company pay for it too I pay like I I have my I don't have like a corporate thing set up so everyone B we took the time to set up the corporate it's really easy and then anybody with your domain can sign up and let you track it but it doesn't consolidate that's what I'm looking for trat is the ability to consolidate all the searches in one place and everybody can share their searches but like I said the application

is doing right in some way Sachs yeah collaborative AI it's an application today meaning like we go to the app we ask questions we get answers and we use that and I actually had it Pull tables down and I Dro those tables in like all sorts of great stuff it could do you know do some analysis pull out the Stu what the analysis showed understanding unit economics on various businesses all this sort of stuff that it Consolidated definitely makes everybody bionic I but what it's what it doesn't do yet is take all of our internal data and all of our internal tooling and kind of reconfigure how we use that so we're still paying for a whole bunch of enterprise software and SAS licenses for

things that we know we don't want to be paying for in the future and we're now starting to figure out how can we build our own AI based software to replace a lot of the dependency we have on third party software that uses our internal data for our internal consumption so there's a lot of that still ahead of us and that's why I and we're pretty Progressive so that's why I know it's early Innings because I see the way we're going to use it and I know that we're probably well ahead of a big Enterprise companies that are more traditional and so I can see like a couple years from now all these big Enterprises are going to figure the same thing out and then you're not

necessarily going to need to pay for this chat GPT stuff if there's an internal tool and an internal LM that you can run young people are really getting dependent on this and they use it constantly we were on our investment team meeting we were valuating a company for real estate brokers we're evaluating a company for therapists and like tools and SAS products for those type of people and when I asked them well how many What's the total addressable Market boom three or four researchers and analysts on my team are doing that search finding sources and saying there are this many therapists this many social workers this many real estate

brokers this many B and then I'm saying well did you source that they like yeah of course I asked and like one of them was like well I asked Claude I asked Gemini I asked chat gbt I asked them all for sources I cross reference so they like have three of these things open and so just everybody's knowledge level goes up but you do have to check it because one out of four facts is probably wrong or cited wrong and so it's going to be I think one out of four is about the right number yeah it's about one out that's interesting so you use multiple LMS to find the hallucinations yeah basically you cross reference them that's actually pretty interesting I jump on Gemini too

so I use Gemini Google and I use chat GPT and I just make sure that stuff lines up just sanity check things because I'm of these right how many would you be willing to pay for pay for five you'd pay pay for five different llms well think about it if somebody's salary is a $100,000 and these cost $1,000 to have five of them of course i' pay for five 1% of their Sal okay so as a work tool you know I guess there's three categories to their business now that you're raising this there's sort of the consumer subscriptions y then there's the business subscriptions which are basically the consumer product but a company's paying for it corre and then

there's the developers paying for meter yeah yeah this that that Enterprise is really powerful yeah it's kind of like Microsoft Office or Google Docs where consumers use them for for free or want to use them for free and then companies will pay for it and that's where the real money is anyway this is going to make people bionic I think all organizations will have the same number of people for the next couple of years and then just individuals will get better and better at their jobs and so efficiency is going to go way up speaking of efficiency the market is ripping we're going to get a little macro here in 3A inflation has uh been broken I I think it's safe to say we're

are down at 3.x 3.3 lower than expected and hiring and wages are surging and stocks are surging so let's go through it here and get the besti take on the vibe session I actually disagree with that framing Jason yeah I agree I disagree as well disagree with it let me go through the numbers and then you can all disagree that's how that's how this works folks inflation print came in at 3.3% lower than expected here's your 10-year chart super easy to explain what's Happening Here rates were low for a long time inflation cruising at about 2% and then lunatic spending during covid and we added a trillion to the national debt and then Biden added a

bunch everybody getting those stemy checks and PPP loans and so if you look at inflation here we were just cruising along at 2% massive Spike up to 9% year-over-year inflation and now coming back down to 3.x and the question is can we get to a two handle and the rates went up faster than in ever in history here's the Fred chart you can see there in and this goes from the 80s so you see that massive um Spike when they tried to break the back of inflation previously so this is the fastest ever gone up and here we go the common sentiment here is that savings has been burned off and people are starting to have debt and so now we are

in uh act two the lowest unemployment uh rate of our lifetime continues if you believe those numbers some people do some people don't Labor Department reported 272,000 new jobs in May smashing crushing the 190,000 estimate uh and then act three average hourly wages up a massive 4% from last year at $35 an hour that also topped estimates so if inflation is at 3.x and hourly earnings are at 4.x maybe consumers will start feeling better about the economy eventually they obviously uh have been pretty shocked by that 9% inflation and only 4% growth here's your chart from Fred of the hourly earnings of all employees and you can feel pretty good about that where

everybody's wages keep going up the question is do they go up faster than inflation okay so there's my framing of the situation freeberg tell me what I got right tell me what I got wrong I think there are three numbers that matter the inflation rate the growth in GDP and the cost to the growth in GDP in the first quarter of 2024 was a lousy 1.3% on an annualized basis and even if the rate of inflation came down we are still inflating the cost of everything by north of 3% so the economy is only growing by 1.3% and it costs more than 3% more each year to buy stuff so that means everyone's spending power is reducing

and our ability and our government's ability to tax is declining because the economy is only growing by 1.3% and the most important fact is that the interest rates are still between four and 5% four 4.7% that means that to borrow money cost 4.7% but the businesses the economy on average is only growing 1.3% so just think about that for a second we have a tremendous amount of Leverage on businesses on the economy on on the the federal government that that leverage the cost to pay for that debt is more than four to five four to 5% but you're only growing your Revenue by

1.3% so at some point you cannot make your payments and the rate and the goal that is true for consumers that is true for Enterprises and it is true for the federal government just to point out here what you're saying the goal was to in fact increase the interest rate to to cool the economy right which they got too late but that was the goal that was the explicit goal to cool the economy yeah the whole purpose of raising rates is to slow the flow of money through the economy and by slowing the flow of money through the economy there is less spending which means that there is

you're reducing the demand relative to the supply so the cost of things should come down you should reduce the rate of the increase in the cost of things now if you click on this link Nick that I just sent you in response to the condition in the economy today Elizabeth Warren sent this note to Jerome pal three days ago saying dear Mr pal or dear chair pal we write today to urge the Federal Reserve to cut the federal funds rate from its current two decade high of 5.5% the sustained period of high interest rates is already slowing the economy and is failing to address the remaining key drivers of inflation she goes on to point out the fact that consumers are suffering businesses are

suffering and the strain of these three numbers is really starting to show on individuals on businesses and obviously on the power of the dollar both the dollar is a different story because of the condition of the the economy and the rest of the world and we're in a very unique position but I think that things are not as rosy now there's a certainly a shift in the market because what this tells us is that the timeline at which the FED will cut rates is coming in a little bit relatively speaking and so the market is saying okay let's adjust to lower rates the 10year treasury yield has come down a bit but we are still in a difficult situation for people and for

the uh for businesses and you have Elizabeth Warren who I think is the voice of small business and consumers she's she she's trying to be the voice of those very hard on people chamath what's your take on this we have a slowing uh GDP growth we have inflation going from nine down to three we have wages going up 4 per. how do you make sense of all this do you feel like sorry freeberg are you saying we're gonna have stagflation or we have stagflation right now definitely but I uh what I'm saying is that it's not a Rosy picture just because labor rates are going up if the labor rates aren't going up you can see this ultimately the

best number for this is the sum of GDP growth so in aggregate if the revenue of everything combined which is GDP isn't going up faster than the increase in the cost of everything people businesses and the government can't afford their stuff and that's fundamentally what's going on right now what we need to see is a normalization where GDP growth is greater than inflation rate and as soon as that happens then we have a more normalized and stable economy so right now things are not stable there's a lot of difficulty and strain in the system I will put myself on the other side of that trade if if there was one if I had

to simplify the United States economy remember GDP is 70% spending by individual people and so people can spend two things savings that they have or credit that they have and what's interesting is that we have finally burned through and this is what this picture shows all of the money that folks had in their bank accounts and so what does that force people to do it actually forces people to re-enter the workforce so that they can start to make money but the problem is that companies have been shrinking and have been on a defensive posture and so as a result which you started to see

this past unemployment report unemployment is now ticking up because when these people re-enter the workforce there are no jobs for them to have people are filing incremental unemployment insurance claims States like California in fact the state of California was the worst off this past month so I think what we're starting to see is that for the large portion of the economy we've run out of cash to spend and as a result I do think that we we are going to see an economic slowing and I think that that will create not just enormous empirical justification for Jerome Powell it'll be exacerbated by what freedb just showed which is the political pressure that

he's going to be under to cut will it cause him to cut more aggressively than he would have otherwise on the margins I actually think yes but my perspective is that I think that we've run out of money individual people so I think unemployment is going back up I think GDP is going to shrink yeah and so I kind of tend to be in this camp that we're going to see more than one rate cut so here is total job openings to your point shth they're getting burned off we peaked at 12 million again if you believe the numbers or not they're they they obviously have some value and we've burned off a ton of

those so saaks what's your non-political nonpartisan take first principles of what's going on with the economy well look we just had this inflation report CPI was 3.3% the market was expecting 3.4% so that's a teeny bit better than expected but it's still persistently sticky inflation is and furthermore Pal's comments were very hawkish he basically said he could not commit to when rate Cuts might begin and we're already remember at the beginning of the year we entered the year with expectations for seven rate Cuts this year now we're down to an expectation of one rate cut and we can't say for sure when that's going to happen so honestly I think your introduction

overstated how positive this news was and that's why I think if you look at the markets right now it's very mixed most tech stocks that I'm seeing are actually in the red and a few of them like Tesla and apple and Nvidia are up but the vast majority are in the red so I think the market is taking this in stride I think the big picture here is just we don't know when Ray cuts are going to begin and I think that Vinnie lingam had a a really interesting take on this actually where he he said look could pal cut by a quarter point would that matter that much no it wouldn't matter that much but the point is Pal doesn't want to say that the rate height cycle is over right if he were to cut by

a quarter point that by itself wouldn't do much but it would be a huge statement that we're out of the woods on inflation there's not going to be any more hikes coming and we're beginning a new rate cut cycle and pal is clearly unwilling to say that we're still in this like limbo where he is saying that we don't know when rate cuts are going to begin betting markets had two a 70% chance of two rate Cuts before pal spoke afterwards now it's one rate cut Dow record high again this past week and NASDAQ record highs each of the last like month for the last four months so the market putting aside individual stocks has

broken records almost every month for the last three free on on the back of like two stocks I mean Nvidia is holding up the whole Market there's a lot of funny memes about this Nvidia Microsoft thei stocks have have are holding up the whole Market correct yes record stock market what does Jerome pal have to gain or lose by bowing to political pressure so a lot of folks mention and reference his kind of there's political pressure for him to do something but why would he bow what does he care what what do you think the motivation is for pal individually and what is the political

process that will ensue he doesn't bow to political pressure I think it's the Legacy and the perception that he leaves behind I think had he not over promised and underd delivered at the end of last year remember he was promising as sack said six or seven rate cuts and he's delivered bubus and the markets were none too pleased and so now I think he's just swung the pendulum to the other side which is he's going to massively under promise and then overd deliver if he can and so as a result I think he's being much more measured and guarded I don't think he wants to be wrong here so I think he's thinking about what most folks think about when they're at the tail end of their of a job like this

he's not going to get reappointed he's going to go off into the sunset it's roughly about how history will write how he handled the transition from that to the next phase whatever that is so I think he's probably very interested in making sure he doesn't break the economy and also that he doesn't seem like he's constantly waffling and unpredictable but isn't he just an autonomous agent that is meant to respond to the data I gu I'm not quite understanding the degree of judgment and discretion that everys they have a mandate but if you're asking what his incentives are I agree I think his main incentive at this point is concerned for his historical Legacy

and specifically he wants to be thought of like vulker not like Arthur Burns in the 70s vulker basically crushed inflation even at the cost of a recession and he is worshiped today as the best Fed chair ever whereas Burns let inflation slip the leash in the 1970s and he's not thought of very highly so I think that Pal's main concern here is with his historical Legacy at this point I don't think he's expecting to be reappointed he's wrapping up uh his second term already now I think if you go back to 2021 the incentives were a little bit different pal wanted to be reappointed by Biden and remember that in the summer of 2021 that's when the inflation began we had

that surprise 5.1% inflation print pal was up for renomination and Confirmation in November of 2021 and I think what happened back in in that year is the administration downplayed the inflation report they called it transitory Yellen did Biden did and so pal had to get on board with that message if he wanted to get confirmed by the Democrats and he did get on board that message he repeated the whole transitory point and for that reason they didn't begin the raik cycle until March of the following year and from that may inflation print to November they kept doing QE even though we had inflation back in the system so I think I think that pal was actually intensely political in 2021 he

knew who was going to reappoint him and who was going to have to confirm him and he got on board that message and that's why they were so slow to react to the inflation and I think it was disastrous and that's one of the reasons why the rate tightening cycle was so steep is because he had to catch up with all this inflation that he had allowed for N9 months longer than he should have but if you ask me what's his incentive now I think it's purely about Legacy and he does not want to let inflation come back after cutting rates a little too soon so his incentive I think at this point is to to make sure that he's not wrong again about inflation and to remind

everybody maximum employment stable prices moderate long-term interest rates is the Mandate for the Federal Reserve they're supposed to be independent famously rean push vulker to get R cuts and there is a lot of politics involved in this and so Legacy does seem like the organizing principle here I would agree with chamath and Sachs that it's Legacy but there's always political pressure here as you can see Elizabeth Warren is trying to push him to make cuts for obvious reasons yeah well no there there's politics when they're up for appointment or for reappointment for confirmation basically because they want

to get get that vote Yes but but there's also subtle pressure and then there's letter writing like Elizabeth Warren's doing here right so the pressure can be there the question is do they bow to it right sex yeah they don't have to I mean the fed's independent what do they stand to gain or lose by the pressure is my question and I'm not sure I really like this Con exactly and I think that's really where there's a important point to note here that you can identify the guy's motivation and how he's going to operate this year because there are there is no political pressure there was in 2021 and I think that's why he was slow to react yeah right listen if pal can stick The Landing here then his

legacy comes out intact but if he screws this up and then he was slow to react to the inflation back in 2021 and 2022 his legacy's going to be mud so I think he's going to be more concerned about airing on the side of tamping down inflation than airing on the side of the economy not doing as well I think those are the my position is I think he he might have already stuck The Landing I think like the fact that we've burned off all that savings to your point shth that people are going back to work and that these businesses are doing fantastic and efficient because of AI and other gains it feels like people are I think he's

stocks that are no no yeah they're they're trying to go back to work jobs don't exist I think they're going to take jobs they just might get the job they want and that's what I think people have to recognize this they have to take a job and they may not be the one that they want working from home we could have a a negative recessionary print going into the election cycle I think that's very possible yeah exactly I don't know Jason look I I'm I'm hearing a lot of happy talk right now and I agree with you had you had 1.3% GDP growth rate with a 6% of GDP deficit by the government if the government wasn't printing so much money wasn't overspending that's right were to

have a balanced budget it would be a recession yeah think about that to subtract Nega it would be negative GDP growth if not for the government's program stimulating the economy and a lot of the jobs you're talking about are government jobs the government is creating jobs like crazy not in the private sector but in the public sector because it is an election year so there's a lot of political forces proing things up and I wonder what happens after the election we'll find out all right everybody this has been another amazing episode of the Allin podcast Just One Last Thing guys this is really important so friend of the P Peter Fenton who's a famous VC in Silicon

Valley tweeted that his sister has been diagnosed with the rare saroma and they are searching for lookalike cases to do a study at Dana Farber and if this works it will change the future of cancer but they are seeking this um researcher William Gibson who's retweeting is seeking patients with my oxoid Lio myosarcoma featuring a plag1 fusion so if you are somebody out there who has a case like this then please reach out and let us know or let Peter Fenton know this could save a life or many lives his sister is also the the wife of a good friend of ours Pete brigger so our thoughts are definitely with you and if there's any out there

who has this type of ver saroma please let us know and we can refer you to Dana Farber and this is a very important study that may save some lives Pete and Peter are great guys and our thoughts with Devin and hope you guys find a cure okay best wishes to Peter and his sister help out if you can and you're in our thoughts and our prayers