"Harvard Is Cooked" Chamath Palihapitiya On Harvard’s Future

Harvard's cooked, Jason. Harvard's cooked. Explain. It turns out, and there's been a lot of people that's posted about this on X, but there continues to be rampant Title 9 violations with respect to admissions. I think Creme Nick, you can probably find it. I think he published one that Colombia was continuing to discriminate against Asian students. Harvard's original case was against Asian students. There was a bunch of woke stuff at other Ivy League schools like UPUPEN. There's all this rampant anti-semitism. It all needs to get fixed. And so I think that if you get a deal done, Harvard will have to capitulate. I think President Trump

holds all the leverage and all the cards and there's nothing mathematically that Harvard can do. They can stall for probably another year and a half, but at some point they will not have the budget to sustain themselves and they're going to get into a huge world of hurt. What they will have to do in order to finance their budget in probably 18 months is start to actively sell their private equity portfolio, which by the way from 2019 to this year almost doubled from 20 to 40%. So, an insane asset allocation, frankly, an asset misallocation at the top of the market to the most illquid asset class. And when people sniff this

out, what they're going to do is Harvard was able to sell a billion dollars recently of private equity stuff in managers that they didn't want to support anymore at a 7% discount. There is no smart money on the street that's going to look at any private equity portfolio from Harvard without asking for a 20 25 30 35 40% discount because your back will be totally against the wall. And if you don't ask for that, you're just a bad businessman. So if you put all of these things together, they're going to need to reestablish federal funding. But in order to do it, I think the president has been very, very clear and for whatever reason, they've refused to want

to address these issues. But the Ivy League, there's just something fundamentally broken. Well, and Freeberg, the Wall Street Journal, reported on Wednesday that Harvard would face a billion dollar budget shortfall every year if Trump followed through on his funding cuts and tax hikes. He was also saber rattling that he would get rid of their nonprofit status or maybe change how the endowments worked. A lot of uh tools I think that he could deploy here. And uh there's an excise tax by the way in the BBB that taxes foundation assets. I don't know what the final language was, but there is a there was a version that

I saw where excise tax on foundations was upwards of 8% a year. I don't know if that was the final version, but that's an enormous amount. Let's just say it's half that. Let's just say it's 4%. But if you're paying 4% tax on your endowment every year, it all of a sudden starts to add up. That's like, you know, for Harvard like$2.5 extra billion dollars a year. that they have to pay. And uh Freeberg, reportedly Harvard is at the table and in discussions with the White House after a couple of months of defiance. What's your take on this? Is this an important priority for America and for the Trump administration? Is it

a sideshow? What are your thoughts on the larger ramifications of this? Let me just suspend the brand and history and legacy of Harvard for a second. Sure. And just talk about these call them prestigious higher education institutions. What are the two primary functions of these institutions? The first is to educate students and the second is to conduct research or to create facilities for research. Remember these institutions do not direct research. They recruit and enable researchers to apply for grants to get funding to do their research and then they educate kids. I think the internet was the first leg on the stool to break higher education.

The internet democratized access to information and knowledge. You can watch MIT graduate courses. All of the core kind of educational content that is delivered in prestigious higher education institutions has been largely democratized and is broadly available for free on the internet. That's an incredible transition that's happened for humanity, for society, for the world. AI is the next leg of the stool to break. And I think that AI may actually break education. It may break higher education and then eventually it may make its way all the way down to childhood in terms of rethinking from first principles. How do we educate? How is an individual getting educated? And

what are the other benefits they get from an educational system besides just core domain knowledge? There's also socialization and experience with project-based work. But I think that AI fundamentally rewrites the ability for an individual to get a good quality education. And we could see kids in Africa and kids in South Asia getting the equivalent of a Harvard graduate school degree at a cost of zero through personalized tutoring enabled through AI and the ubiquitous access to knowledge and information. So that core function of the university I think is broken and they're now starting to reconcile what that actually means for the long-term viability of all of these higher

educational institutions in the United States. The research function I think is also being rewritten around the world in Europe and in China and in Asia. There are independent research institutions that get research funding that can show up and say, "Hey, this institution is just being used to run research. It doesn't necessarily need to be within an educational framework. It can be an independent research institution that focuses on either a topic or a domain. So, I do think we're going to see more and more independent research funding happening with the grants that come out from the federal government, from nonprofits, from endowments and foundations that fund research. So, I

think that there's a real reckoning underway. It's almost like these guys have created a monopoly. They've accumulated this capital which allows them to build these great buildings, attract these great researchers, and then get the research funding to fund those researchers, and then use that to raise more capital in their endowment and build the next building and keep this thing growing. And I think that that's breaking