00:00:00
what did you think about that
00:00:01
reservation article thing oh that's
00:00:03
crazy well this is a great topic there
00:00:06
is a guy a pretty industrious kid it
00:00:08
turns out what this kid's been doing is
00:00:10
he's been getting Carbone reservations
00:00:12
other top tier reservations and by the
00:00:13
way everybody's had this as an app idea
00:00:15
nobody's really executed it that well I
00:00:17
don't want to give any plugs for any
00:00:18
apps right now but he has been selling
00:00:21
$70,000 he's been flipping restaurant
00:00:24
reservations for upwards of a, bucks jth
00:00:27
you're very uh industrious and you're
00:00:30
Tipper 100% Tipper
00:00:32
minimum I know this because when I paid
00:00:35
for dinner one time at Carbone you took
00:00:37
me and Phil helmet's Cards and you said
00:00:40
you guys pay and I'm going to put the
00:00:41
tip in and then I had to sell Uber
00:00:44
shares to cover it that was gross that
00:00:47
was gross I've never had problem getting
00:00:49
a reservation at any restaurant in New
00:00:51
York yeah they see you coming you know
00:00:53
what they see 10 dimes worth of wine I
00:00:55
have taught many of my friends how to
00:00:58
get reservations I have a a series tips
00:01:01
that I could give but I don't want to
00:01:02
give too many of them away but nobody
00:01:05
gives tips to matri anymore saak you tip
00:01:08
the Mator day with cash oh all the time
00:01:10
yeah sure of course right see this is
00:01:12
why sax and I get along saak is a legit
00:01:14
old school guy yeah sax is Elite he's
00:01:17
got the $100 bill pressed into his palm
00:01:20
shakes the guy's hand I'll tip the
00:01:22
bartender to keep the ice cubes cold I
00:01:24
the bartender got 100 just for keeping
00:01:26
the ice cubes cold there you go oh
00:01:30
know for you know for
00:01:33
you let your winners
00:01:36
ride Rainman
00:01:40
DAV and instead we open source it to the
00:01:43
fans and they've just gone crazy with
00:01:45
[Music]
00:01:48
it this is my tip it has worked I'm GNA
00:01:52
give it out here and the reason I'm
00:01:53
giving this out is because y'all are
00:01:55
cheap and not you but just a lot of
00:01:58
y'all out there and you don't know the
00:01:59
art in Brooklyn everybody gets tipped we
00:02:01
tip the phone guy when he comes to fix
00:02:03
your phone at your house everybody gets
00:02:05
tipped so here's what I would do and you
00:02:07
can do this with a 20 you can do it with
00:02:09
a F50 you know if you're going to some
00:02:11
great place you can do it with a Hyundai
00:02:13
you fold it twice as chamat says you put
00:02:16
it in your palm you walk up to the matri
00:02:20
stand if there's anybody in line you
00:02:22
just cut it and you go to the side of
00:02:24
the table you put your hand on the
00:02:27
matrid stand you push the hand over
00:02:30
here's the m s you just slide your hand
00:02:31
over and you reveal the 50 and you say I
00:02:34
am so sorry I was supposed to make a
00:02:36
reservation I don't know if my assistant
00:02:38
did it or not she probably didn't
00:02:40
however I'm a huge fan of the restaurant
00:02:41
if there's anything you could do for me
00:02:43
I made a stupid mistake to not make a
00:02:45
reservation if somebody cancels I'll be
00:02:47
at the bar if there's any way you could
00:02:48
accommodate me I truly appreciate only
00:02:50
in town for one
00:02:52
night when I say 99 times out of a 100
00:02:56
it works the one time it didn't work how
00:02:58
much are you tipping 100 it used to be
00:03:00
20 when I lived in New York now I
00:03:02
regularly do
00:03:03
50 and the reason I do it is I don't
00:03:05
like giving money to charity I feel like
00:03:07
these Charities are all a giant scam and
00:03:09
I like to give it to service people like
00:03:10
is it awkward when you tip $50 in ones
00:03:13
like that like doesn't it become
00:03:14
realistic it's a little harder to hold
00:03:16
in your hand I used to use a roll of
00:03:18
quarters actually that was awkward the
00:03:20
roll of quarters was a little bit hard
00:03:22
the 50 is
00:03:24
easy I'm just asking everybody here if
00:03:27
you hear my voice please go tip your
00:03:29
matred 20 or 50 and report back if my
00:03:32
technique works because what you're
00:03:33
doing in the framing is you're saying
00:03:35
you made a mistake and then you make it
00:03:37
so the person doesn't feel like you're
00:03:38
bribing them or paying them off they're
00:03:41
helping you solve a problem so anyway
00:03:43
it's kind of like when I troll David and
00:03:45
I'm like hey freeberg uh with the with
00:03:47
the sum whatever he's like I'll do all
00:03:48
the work forget about it you just got to
00:03:50
reframe it all right let's get started
00:03:52
here is a bribe that is a bribe yeah it
00:03:55
is in fact a bribe yeah I consider it a
00:03:59
uh it's interesting you bring up you're
00:04:01
creating plausible deniability but it's
00:04:03
still a bride I consider it a tip in
00:04:05
advance servic no you're not tipping him
00:04:07
for good service you're tipping him to
00:04:08
basically break the in line yeah
00:04:12
you you're taking away somebody else's
00:04:15
spot and you're paying him to break the
00:04:17
rules it's you know what your shift to
00:04:20
man of the
00:04:22
people brilliant move it's a bribe a
00:04:25
it's not a bribe you're you're not even
00:04:26
really doing him a favor you're doing
00:04:28
yourself a favor all right let's unpack
00:04:32
you're such a populist so brilliant I
00:04:34
hate you he just figures out a way to
00:04:37
get those populous
00:04:39
votes no here's what it is because I had
00:04:41
this argument with my my you gave him
00:04:43
the 50 just for doing a good job even if
00:04:46
you had the reservation is what you're
00:04:47
saying I am so confident in how good the
00:04:49
service is going to be I'm giving a
00:04:51
pre-tip I consider it a pre-tip oh my
00:04:53
God a pre tip if he gives you a
00:04:56
reservation when you don't have one I am
00:04:58
happy to not get the money back if they
00:05:00
can't accommodate me one time it
00:05:02
happened the woman at Asia to CU New
00:05:04
York in the90s said here's your 20 back
00:05:07
and she said I'm really sorry there's
00:05:08
nothing I can do I would love it's very
00:05:10
lovely of you to give me the tip and she
00:05:11
handed it back to me and I said keep it
00:05:13
and she said no but uh I I got uh the
00:05:16
bartender is gonna take care of you at
00:05:17
the bar so well that ends well all right
00:05:20
let's get started everybody we have a
00:05:22
full docket for you today and story of
00:05:25
the week as voted by besties we have a
00:05:28
new system here instead of me sorting
00:05:30
the docket the besties give a thumbs up
00:05:32
thumbs down this one I think had two of
00:05:35
three people voted for it one person
00:05:37
didn't vote this week and that is zuck's
00:05:39
scorched Earth AI strategy as you
00:05:42
probably know if you're in Tech meta was
00:05:45
the first big tech company to fully
00:05:47
Embrace open source AI llama leaked last
00:05:51
year folks said that it wasn't leaked it
00:05:54
was released covertly or on the slide DL
00:05:57
by the folks at meta but they just just
00:05:59
released llama 3 and I talked to some
00:06:02
deep about this a whole bunch last week
00:06:05
it just came out a few days ago and it's
00:06:06
already in the top two models on hugging
00:06:08
faces leaderboard you can take a look at
00:06:10
hugging faces leaderboard it's basically
00:06:11
where uh it's the most trusted place I
00:06:13
think where people Benchmark these
00:06:16
things developers are saying it's faster
00:06:18
it's less preachy was an observation
00:06:20
than chat GPT 4 despite being slightly
00:06:23
lower quality they also have some small
00:06:25
models that are performing really well
00:06:27
they also announced very interesting
00:06:29
open sourcing the quest operating system
00:06:33
called metah Horizons OS the OS Powers
00:06:35
the mixed reality headsets VR all that
00:06:37
kind of stuff AR but here's the big news
00:06:40
this one is amazing Instagram Facebook
00:06:42
and WhatsApp are integrating a search
00:06:44
box or their AI assistant chat box into
00:06:46
all their apps worth noting meta came
00:06:49
out with their results just the other
00:06:52
day and we're taping this on Thursday as
00:06:53
you know comes out Friday their stock is
00:06:55
down as much as 16% after reporting its
00:06:57
q1 earnings
00:06:59
beat estimates but uh Zuck is saying
00:07:02
he's going to spend a bucket load of
00:07:04
cash on infrastructure shath it's your
00:07:06
all mamada you worked side by side with
00:07:09
Zuck growing Facebook from what 10 20
00:07:12
million to 400 million ma what do you
00:07:15
think of his 00 million when I left okay
00:07:18
what are your thoughts on gold chain
00:07:21
Zuck and his new strategy the pivot away
00:07:23
from VR to AR Ai and going full Allin so
00:07:28
to speak on open source they're taking a
00:07:32
play that we talked about which makes a
00:07:34
ton of sense which is it's not a core
00:07:37
Market but it's very important the core
00:07:40
money-making market for them is
00:07:42
monetizing their family of apps and so
00:07:45
they're scorching the Earth for these
00:07:48
new markets so that the economics are
00:07:50
not viable which will I think allow a
00:07:54
more robust ecosystem where they'll have
00:07:57
more of a say because I think up in
00:07:59
until this point you could have said
00:08:01
that they and Google were sort of
00:08:02
lagging behind open AI but I don't think
00:08:05
that's the case and by the way this is
00:08:07
the strategy that we talked about 16
00:08:10
months ago that these big companies
00:08:12
should take I just think it's worth
00:08:13
listening to what what we said and then
00:08:16
basically what Zuck said just right now
00:08:18
here we go this is a black and white
00:08:20
flashback chth in turtleneck go I think
00:08:24
that Google will open- Source their
00:08:26
models because the most important thing
00:08:28
that Google can do is reinforce the
00:08:31
value of search and the best way to do
00:08:33
that is to Scorch the Earth with these
00:08:36
models which is to make them widely
00:08:38
available and as free as possible that
00:08:40
will cause Microsoft to have to catch up
00:08:42
and that will cause Facebook to have to
00:08:44
really look in the mirror and decide
00:08:46
whether they're going to cap the betting
00:08:49
that they've made on arvr and reallocate
00:08:52
very aggressively to AI that should be
00:08:54
what Facebook does and and the reason is
00:08:56
if Facebook and Google and Microsoft
00:08:58
have rough roughly the same capability
00:09:00
and the same model there's an element of
00:09:03
machine learning called reinforcement
00:09:05
learning and specifically it's
00:09:06
reinforcement learning from Human
00:09:07
feedback Facebook has an enormous amount
00:09:10
of reinforcement learning inside of
00:09:12
Facebook every click every comment every
00:09:16
like every share the huge companies will
00:09:19
create the substrates and I think
00:09:21
they'll be forced to Scorch the Earth
00:09:23
and give it away for free now you can
00:09:26
see what Zuck said last week look at
00:09:28
this a little Victory lap here
00:09:30
it's probably also pretty bad
00:09:33
for one
00:09:35
institution to have an AI that is way
00:09:37
more powerful than everyone else's Ai
00:09:40
and I kind of think that a world where
00:09:43
AI is very widely deployed in a in a way
00:09:46
where it's gotten hardened um
00:09:48
progressively over time and is one where
00:09:52
all the different systems will be in
00:09:53
check in a way that seems like it is
00:09:56
fundamentally more healthy to me than
00:09:58
one where this is more concentrated that
00:10:00
is I think the definition of scorched
00:10:02
Earth so and he's he's running a really
00:10:04
perfect play so far he's open
00:10:06
sourced the headset OS he's opening
00:10:09
Source these models he stopped training
00:10:12
I think for llama 35 was it and now he's
00:10:15
moved directly to llama 4 just to try to
00:10:18
head off GPT 5 at the pass so what are
00:10:21
we seeing we're seeing the economic
00:10:23
value getting disintegrated there is no
00:10:25
value in foundational models
00:10:27
economically so then the question is who
00:10:29
can build on top of them the fastest and
00:10:32
Jason to your point llama was announced
00:10:34
last Thursday 14 hours later grock
00:10:37
actually had that model deployed in the
00:10:39
gro Cloud so that 100,000 plus
00:10:41
developers could start building on it
00:10:43
that's why that model is so popular so
00:10:46
it puts the closed models on their heels
00:10:49
because if you can't both train and
00:10:51
deploy iteratively and quickly enough
00:10:55
these open source Alternatives will win
00:10:57
and as a result the economic potential
00:10:59
that you have to monetize those models
00:11:01
will not be there and what that does is
00:11:03
reinforce the existing economic moat
00:11:06
that Facebook already has in monetizing
00:11:08
their apps now why the stock went down
00:11:10
I'd like to talk in contrast to Tesla a
00:11:12
little bit later because this has
00:11:14
nothing to do with that and it's more
00:11:16
about squares versus sharps in the stock
00:11:18
market uh freeberg your thoughts on meta
00:11:22
embracing going all in on
00:11:24
AI you were at Google uh you're Alma mat
00:11:27
up and you watched them
00:11:30
be proprietary and closed when it came
00:11:34
to search and the search algorithm but
00:11:36
open source when they were behind and
00:11:38
and that's the I guess the phrase we use
00:11:40
here in Silicon Valley when you're
00:11:41
behind you use open source to catch up
00:11:44
and when you're ahead you close
00:11:45
everything down Facebook famously shut
00:11:48
down all access to their apis you can't
00:11:51
get into the social graph but they're
00:11:54
going open here why because they're
00:11:56
behind your thoughts on this from say a
00:11:58
Google perspective Ive and then maybe
00:12:00
how Google might react and then just
00:12:02
broadly do you think open source wins
00:12:05
the day getting to AGI I would say the
00:12:09
analogy for Google is Android where
00:12:13
Google open sourced the Android
00:12:14
operating system because the handset
00:12:18
manufacturers and some of the big
00:12:19
software companies so Nokia and
00:12:21
Microsoft in particular Blackberry had
00:12:25
these closed proprietary operating
00:12:27
systems and then the Telos put their
00:12:30
apps on and made money and basically had
00:12:31
control over whether or not people could
00:12:33
access Google and Google services
00:12:35
through their phone so the intention
00:12:37
with open sourcing Android was to make
00:12:39
sure that Google was not disadvantaged
00:12:41
in their Core Business over time I think
00:12:43
that there's a similar analogy here that
00:12:45
by open- sourcing these models they
00:12:47
limit competition because VCS are no
00:12:49
longer going to plow half a billion
00:12:51
dollars into a foundational model
00:12:53
development company so you limit the
00:12:55
commercial interest and the commercial
00:12:57
value of foundational models now the
00:13:00
capex question is is a really hard one
00:13:02
to diagnose because we don't know how
00:13:04
they're spending the money where they're
00:13:05
spending the money what they're doing in
00:13:06
there I think that it's a really
00:13:08
important sign that founder-led
00:13:10
companies with these voting
00:13:13
rights you know have the ability to make
00:13:16
these sorts of hard decisions that it
00:13:19
might be very difficult for a management
00:13:21
by committee group to make got it look
00:13:23
at how Mark is making these decisions
00:13:26
and Elon is making big tough decisions
00:13:28
that it would very likely be pushed back
00:13:30
on if they didn't have the Voting Rights
00:13:32
if they didn't have the control over the
00:13:34
company that they had it's a great point
00:13:36
about founder Authority I think that's a
00:13:38
really Salient point a shout out to Zuck
00:13:41
would really be great to get him at the
00:13:42
Allin Summit saak we have some breaking
00:13:44
news here it turns out llama 3 they just
00:13:46
tested it in the benchmarks it says here
00:13:48
you can make the founding fathers any
00:13:50
race you like it's a really interesting
00:13:51
feature uh any thoughts on Facebook's
00:13:55
strategy here you are a master
00:13:57
strategist David Sachs give it your
00:13:59
master strategy here 1700 uh chess
00:14:02
rating sax well we we kind of glossed
00:14:05
over what the real news was which was
00:14:07
that meta released llama 3 which they
00:14:10
had spent billions of dollars creating
00:14:12
in in a completely open source way and
00:14:15
the testing on llama 3 is that it's
00:14:17
comparable to GPT 4 and I think this is
00:14:19
what jth means by scorched Earth is that
00:14:22
we now have a free model that's as good
00:14:25
as G best in class or at least tied for
00:14:28
Best in Class
00:14:29
there are some slight differences and
00:14:31
we've been playing around with
00:14:33
it it is faster and cheaper than using
00:14:38
chat GPT 4 but the context window is
00:14:41
smaller I think it has only an 8,000
00:14:43
token context window so that's something
00:14:46
that the open source Community is going
00:14:47
to need to work on is you know Rolling
00:14:49
Out Foundation models have a bigger
00:14:51
context
00:14:53
window nonetheless the point is that at
00:14:56
least for now until open AI comes out
00:14:58
with GPT
00:15:00
5 which is supposed to happen soon the
00:15:02
open source Community has kind of caught
00:15:04
up with the top Clos Source model which
00:15:08
is open AI will they blow past the
00:15:11
closed Source model
00:15:12
sex well I I still think that open AI is
00:15:15
ahead because the scuttlebutt about Chad
00:15:19
GPT 5 is that it's amazing and it's a
00:15:21
big improvement over GPT 4 and
00:15:23
supposedly it's going to come out any
00:15:25
day week or month so if GPT 5 comes out
00:15:29
and knocks our socks off in a few weeks
00:15:32
then we're going to see that oh they're
00:15:34
actually a cycle ahead of the open
00:15:37
source Community but as of this moment
00:15:39
in terms of what's been publicly
00:15:40
released I think it's fair to say that
00:15:42
open source is largely caught up with
00:15:45
open Ai and this is why you know bring
00:15:48
up this tweet by Naveen Ral who is a
00:15:51
Founder who created the company Mosaic
00:15:53
ml which is sold to data bricks for
00:15:55
unicorn outcome and he says I don't
00:15:57
think everyone has comprehended the M
00:15:59
disruption and Distortion that's going
00:16:01
to happen in the Gen Market due to llama
00:16:03
3 Moes will be destroyed and investments
00:16:05
will go to zero just like everything in
00:16:07
geni this will all happen fast so you
00:16:11
know it's a similar reaction to what
00:16:12
jamath is saying which is we have a open
00:16:14
source model now that erases billions of
00:16:19
dollars of private investment and by the
00:16:21
way you just said something really
00:16:23
interesting before which is okay there's
00:16:25
a limitation right you mentioned the
00:16:27
context window which was a problem
00:16:29
I just found this thing today they
00:16:33
solved it now they're at 96k
00:16:35
cont so to your point Saks this Market
00:16:38
is moving so fast because you cannot
00:16:41
compete with open source so all these
00:16:42
closed models which means open Ai and a
00:16:45
bunch of these other folks especially
00:16:47
the ones that are sitting inside of
00:16:48
these smaller companies right snowflake
00:16:51
has a model I think data brick has a
00:16:53
model there's a important question that
00:16:56
has to be asked around the economic
00:16:57
viability of these models in a world
00:16:59
where open source is not only better and
00:17:02
better funded but they're iterating
00:17:04
faster and the feature set is catching
00:17:06
up to your needs so the minute that sack
00:17:08
says he needs a longer context window
00:17:11
within a week it's there that's pretty
00:17:13
intense yeah I think this is like one of
00:17:15
the what do you think j.co well I've
00:17:17
I've got a totally uh different take on
00:17:20
this obviously I agree with all you
00:17:22
you've said here in terms of the open
00:17:24
source and the dramatic effect it's
00:17:25
going to have on pricing but there's
00:17:27
something people are missing if you go
00:17:29
to meta for a second Nick and you pull
00:17:31
it up what you'll see is they've
00:17:34
dedicated The Meta URL to a search like
00:17:38
experience and then they've put a search
00:17:41
box at the top of Instagram
00:17:44
WhatsApp and Facebook and so they are
00:17:47
going to
00:17:49
put search engine essentially their
00:17:52
modern search engine which is starting
00:17:54
from zero in front of three billion
00:17:56
people using metas collector C of
00:17:59
services and so just like apple and
00:18:01
Firefox were able to intercept search
00:18:03
traffic I think and I'll just make a
00:18:05
prediction here that met is going to get
00:18:07
10 points of the search market now each
00:18:09
point of the search Market is worth you
00:18:12
know what is Google's worth about two
00:18:14
trillion if you take out 500 billion for
00:18:16
YouTube and their other services you get
00:18:18
1.5 trillion which means 10 points is
00:18:20
worth 50 150 billion in market
00:18:22
cap now as you well know chamath and you
00:18:25
all know David these two ad Networks
00:18:28
meta started with psychographic data the
00:18:31
person who they know and then of course
00:18:34
Google had the greatest advertising
00:18:36
product ever intent you type in Volvo
00:18:38
you type in Tesla type in Tesla Santa
00:18:40
Monica used you know you don't have to
00:18:43
guess what the person is interested in
00:18:44
at that moment well for the first time
00:18:48
you know one of these ad networks has
00:18:49
content data and psychographic and
00:18:51
they're going to be able to put it
00:18:52
together and I think they take 10 points
00:18:54
of search but more importantly they're
00:18:56
going to have data on individual that
00:18:59
will be unrivaled in the advertising
00:19:02
space now Google tried to do this
00:19:04
themselves they did something called
00:19:06
Google Plus I don't know if you were
00:19:07
there freeberg during the Google+ era
00:19:09
they spent billions of dollars on a
00:19:11
social network it failed they shut it
00:19:12
down because they wanted to get that so
00:19:15
looking at this I think man there's so
00:19:17
much going on on open source but now
00:19:21
Google we haven't talked about Google's
00:19:22
role in all of this and Sundar being a
00:19:24
Hired Gun not having founder authority
00:19:26
to your point freeberg you know I think
00:19:29
they're going after Google search
00:19:30
business as well as you know taking away
00:19:34
and commoditizing all of the open source
00:19:36
so we might be sitting here in three or
00:19:38
four years watching meta have I don't
00:19:41
know 10 nobody nobody has search it's
00:19:44
just that Google can't afford to lose
00:19:46
anything yeah everybody takes a point
00:19:48
here and a point there and all of a
00:19:49
sudden Google could be in the high 70s
00:19:52
of search and that would be economically
00:19:54
disastrous for their stock yeah you're
00:19:56
going to have to make Cuts why do you
00:19:57
guys think the stock is down why is a
00:19:59
stock down 16% I I have a theory as to
00:20:02
what that tell us your theory go for it
00:20:06
I think that
00:20:07
there's a few times a quarter where you
00:20:10
can really see the dispersion in the
00:20:12
stock market between what I would call
00:20:13
the smart money and everybody else so
00:20:16
you know using betting
00:20:18
language the sharps and the
00:20:21
squares and I
00:20:23
think meta was an example of the sharps
00:20:27
taking a line which I think is very
00:20:29
accurate and Tesla was the other great
00:20:31
example this
00:20:33
quarter and so if you look inside of
00:20:35
meta and this freedberg mentioned this
00:20:37
earlier I think freeberg what people
00:20:39
really reacted negatively to was the
00:20:42
total Quantum of spending and the idea
00:20:45
that it's misallocated not to AI but
00:20:48
specifically to Nvidia and the reason is
00:20:52
that and we've mentioned this before
00:20:54
I've tried to talk a lot about this with
00:20:55
Jonathan Ross from grock but AI is
00:20:58
really two markets training and
00:21:00
inference and inference is going to be a
00:21:03
100 times bigger than
00:21:05
training and Nvidia is really good at
00:21:08
training and very miscast at inference
00:21:10
the problem is that right now we need to
00:21:13
see a capex build cycle for inference
00:21:17
and there are so many cheap and
00:21:19
effective
00:21:20
Solutions grock being one of them but
00:21:22
there are many others and I think why
00:21:25
the market reacted very negatively was
00:21:27
it did not seem that Facebook understood
00:21:29
that distinction that they were way
00:21:32
overspending and trying to allocate a
00:21:34
bunch of GPU capacity towards inference
00:21:36
that didn't make sense and so I think
00:21:38
what people were saying is hold on a
00:21:41
second so far your plays are perfect
00:21:43
it's everything we want you to do we
00:21:45
want you to Scorch the Earth we want you
00:21:46
to open source the headset but we also
00:21:49
want you to understand the difference
00:21:51
between training and inference and a
00:21:52
little bit more of a Nuance way build up
00:21:54
the inference capacity but spend a lot
00:21:56
less money because you don't need to
00:21:57
spend it on Nvidia
00:21:59
and the reason is the sharps know that
00:22:01
Nvidia cannot do inference and so I
00:22:04
think that's why the stock is down this
00:22:05
much and I think it's important for
00:22:06
people who care about AI but also May
00:22:09
traffic in Nvidia to understand why the
00:22:12
sharps think that and I think several of
00:22:15
us have tried to explain it now for the
00:22:16
last couple of weeks but it is miscast
00:22:18
and so you're overspending up next Tesla
00:22:21
earnings elon's master plan part two is
00:22:23
going well as planned again this was
00:22:26
voted up by our panel here here in our
00:22:29
group chat last time we covered Tesla
00:22:31
was episode 164 early February after a
00:22:33
Delaware judge voided elon's pay package
00:22:36
since then Tesla has made some giant
00:22:38
moves they launched fsd2 I've been using
00:22:41
it it's pretty great also they cut the
00:22:44
price of FSD by oneir from 12K to 8K I
00:22:47
think you can also get it for 100 bucks
00:22:48
a month and they announced a 10% riff
00:22:51
going to cut 14,000 employees always
00:22:54
painful to do that they're looking to
00:22:57
reincorporate in Texas leaving Delaware
00:22:59
for obvious reasons earlier this week
00:23:01
Tesla shares were down more than 40%
00:23:03
year to date mostly due to a decrease in
00:23:05
demand for EVS market caps dropped from
00:23:08
750 billion to 460 billion shares from
00:23:11
12% when theyve reported q1 earnings on
00:23:14
Tuesday investors got excited after Elon
00:23:17
announced that Tesla's new line of
00:23:18
models could start production at the end
00:23:20
of the year or maybe even early
00:23:23
2025 he shared some thoughts on the robo
00:23:27
taxi or cyber cab which he talked about
00:23:30
maybe five or six years ago and he has
00:23:32
had in the master plan for a long time
00:23:34
shth you made some great calls on Tesla
00:23:38
and made some great trades there back in
00:23:39
the day your thoughts on Tesla in
00:23:45
2024 Sharps love it this is another one
00:23:49
Sharps versus the squares why did the
00:23:50
sharps love it why did it go up and
00:23:52
everybody was so confused and I think
00:23:54
the answer is that he's actually
00:23:56
executing exactly the plan and so if
00:23:58
you're investing in a stock what you
00:24:00
really want is a CEO to kind of stick to
00:24:03
a plan that is wellknown so we don't
00:24:06
have to actually guess what the plan is
00:24:08
because he puts it out on the website
00:24:09
look at the master plan part du and if
00:24:12
you start reading down everything that
00:24:15
he said he's going to do starting in
00:24:16
2016 is basically what it is so let's
00:24:18
take the first part right what did he
00:24:20
say in the first part he said Hey listen
00:24:22
guys this is 2016 we're going to build a
00:24:25
model 3 we're going to build a compact
00:24:27
SUV the model why we're going to build a
00:24:29
new kind of pickup truck okay check
00:24:31
check and check then he said oh by the
00:24:33
way we're also probably going to have to
00:24:34
do a heavy duty truck and a high
00:24:36
passenger density Urban transport
00:24:39
vehicle so that's the robo taxi thing
00:24:40
that he's going to announce in August
00:24:42
okay check and check and then he talks
00:24:44
about the software and the investment in
00:24:46
FSD and trying to get to a place where
00:24:48
you know you can just have a much higher
00:24:50
probability that it will save you from
00:24:52
an accident and it'll keep you safe when
00:24:54
you're driving your car which will be a
00:24:56
large driver of why people want to buy
00:24:58
the cars themselves and you can see like
00:25:00
these FSD miles so if you're a smart
00:25:03
Capital
00:25:04
allocator what you actually saw was a
00:25:07
dislocated stock price what you saw was
00:25:09
a plan that by and large he's been
00:25:12
executing on at a strategic
00:25:15
level underneath there's the vicisitudes
00:25:18
what are the vicisitudes sometimes you
00:25:19
over hire you need to trim some fat
00:25:22
sometimes you overspend on capex now he
00:25:25
spent about a billion of of capex this
00:25:27
quarter on on AI infrastructure so h100s
00:25:30
for training but the market saw through
00:25:32
it because that was a reasonable amount
00:25:34
of money to spend on training for FSD
00:25:37
right so you can start to see the tale
00:25:39
of these two reactions the sharps looked
00:25:43
at the capital allocation and said okay
00:25:44
you missed by two and a half billion
00:25:46
this quarter but that's going to create
00:25:48
a buying opportunity because we think
00:25:50
it's roughly mispriced and we think it's
00:25:52
misprice because going back to this plan
00:25:54
from 2016 this is all the things that
00:25:56
we've been underwriting from billion of
00:25:59
market cap to 750 and now we're getting
00:26:01
a 40% discount to buy back in so I think
00:26:05
it's a really interesting moment to just
00:26:08
contrast and compare what Sharps look at
00:26:12
and then what the media breathlessly
00:26:16
exaggerates and I think what they wanted
00:26:18
was to lionize The Meta earning story
00:26:22
but the sharps rejected it and they
00:26:24
wanted to dump on Elon and the sharps
00:26:27
rejected that ins size in both cases and
00:26:29
it's just a reminder to all of us be
00:26:31
very careful what you're reading because
00:26:34
if you just took the headlines you would
00:26:35
have expected the two reactions to be
00:26:37
exactly opposite but when you vote with
00:26:39
money it's very clear and unambiguous
00:26:42
because you actually move in the
00:26:43
direction of accuracy and that's what
00:26:45
the stock market allows you to see and I
00:26:47
think this is a really interesting
00:26:48
contrast and compare of Sharps versus
00:26:50
squares here yeah just well recapped uh
00:26:53
for those who don't know sharps in
00:26:54
gambling are people like or alob friend
00:26:56
of the Pod who who are just the sharpest
00:26:59
betters in gambling vicissitude that's
00:27:02
an unpleasant change in circumstances
00:27:04
for those of you who don't know the
00:27:06
word saxs I don't know if you want to
00:27:09
comment I mean you and I are biasing
00:27:11
this with the relationship with Elon any
00:27:13
any thoughts on chat's take well I'm not
00:27:16
going to comment on the stock per
00:27:18
se I mean Tesla's products are amazing
00:27:21
they seem to be really executing well
00:27:23
there and I think that Elon foreshadowed
00:27:26
on that earnings call was coming in the
00:27:28
future I'm personally really curious
00:27:31
about the Optimus robot I mean that has
00:27:33
the potential to create an entirely New
00:27:35
Market and bring about something that
00:27:38
we've only seen in science fiction so to
00:27:40
me that's very interesting I think in
00:27:42
terms of the company's problems I think
00:27:45
they're mostly dealing with some macro
00:27:47
forces so first of all the GDP growth
00:27:51
rate has slowed to
00:27:53
1.6% in q1 so this just came out and
00:27:57
that was a notable slowdown relative to
00:28:00
expectations so first of all you're
00:28:02
dealing with the slowing economy it
00:28:03
seems like second High interest rates
00:28:06
mean that car payments are higher if you
00:28:08
want to finance the purchase of a car
00:28:10
your your car payments is going to be a
00:28:12
lot higher when interest rates are above
00:28:13
5% and I think that has been a pretty
00:28:16
big headwind for Tesla and really all
00:28:18
the car companies over the last year or
00:28:21
so but I would say that I think both of
00:28:23
those things are ultimately cyclical and
00:28:25
what matters is Tesla's products I would
00:28:26
say the only issue they have that's a
00:28:29
real long-term issue is just the the
00:28:31
Chinese competition companies like bdy
00:28:35
are ramping up production of knockoff
00:28:38
products at low prices and so managing
00:28:42
the competition with China is probably
00:28:45
the only one of these issues that's I
00:28:46
think probably a long-term issue for
00:28:48
them to deal with let me ask a question
00:28:50
here how do you
00:28:52
rank these businesses energy Optimus
00:28:58
Trucking ride sharing energy Optimus the
00:29:02
robot Trucking ride handling rank those
00:29:06
you're number one or two in terms of
00:29:08
potential for Tesla chamat round the
00:29:11
horn it's a good question ride sharing
00:29:14
is number one and the absolute probably
00:29:17
by an order of magnitude and interesting
00:29:20
the reason I say that is in order for
00:29:21
ride sharing and ride healing to really
00:29:23
work the way that they Envision it you
00:29:27
will have
00:29:29
level five
00:29:32
autonomy supported in jurisdictions
00:29:35
where again if you just look at partu
00:29:38
the whole point is you can summ summon a
00:29:40
car from your app and if you don't have
00:29:42
access to a mobile phone you can go to
00:29:44
these bus stop equivalents and just
00:29:46
press a button and the car comes to you
00:29:48
and so in that world there's just so
00:29:50
much value add in terms of Passenger
00:29:53
safety and sustainability for the
00:29:55
environment and less traffic it's a
00:29:59
gargantuan Game Changer meanwhile what's
00:30:02
your number two sorry meanwhile I'm
00:30:05
sorry just to contrast Uber and Lyft
00:30:08
seemingly are profitable because they
00:30:10
find pricing power to raise prices so if
00:30:13
Tesla enters in as a third player in
00:30:15
that field and just guts pricing which I
00:30:17
think would make sense for them to do
00:30:18
yeah I think this thing is just Gang
00:30:20
Busters
00:30:22
nuclear that's a really interesting
00:30:24
point what do you got Sachs going around
00:30:26
the horn here well I already said
00:30:27
Optimist but that's Bas on a long-term
00:30:28
view yeah this is a long-term question
00:30:30
based on the longterm one and two in the
00:30:33
long term in terms of option value I'm
00:30:36
I'm am the most intrigued by the robot
00:30:40
play and Elon has pointed out that once
00:30:43
you have robots that are capable of
00:30:44
doing lots of different jobs pretty much
00:30:46
any job you point them at that we could
00:30:50
have more robots on Earth than
00:30:52
humans so it's it's a big future market
00:30:56
so you got Optimus number one and who's
00:30:58
number two I agree with Jam in the short
00:31:00
term that ride sharing could really
00:31:02
reach its its logical conclusion with
00:31:07
with Robo taxis remember when you know
00:31:10
Uber first gained Steam and people were
00:31:13
speculating about how big the market
00:31:15
could be there was a lot of giddy talk
00:31:17
about how car ownership would change and
00:31:21
you wouldn't need to buy a car anymore
00:31:23
because you would just like use Uber all
00:31:25
the time we called it going full Uber
00:31:28
yeah yeah and I actually I went full
00:31:29
Uber or I I shouldn't say full I went
00:31:32
mostly Uber like within a couple of
00:31:34
years of discovering that product yeah
00:31:37
so I thought the potential was there but
00:31:39
the problem is it was just too expensive
00:31:41
I mean Uber is still quite expensive and
00:31:44
the most expensive piece of it is the
00:31:46
human driving the car it's all that
00:31:47
labor cost so if you're able to charge
00:31:50
for the ride purely based
00:31:53
on fractionalizing the cap X and that
00:31:57
capex is even that high because they're
00:31:59
making these Robo taxis pretty cheaply
00:32:02
now and you're able to get so much more
00:32:04
utilization out of a car exactly right
00:32:07
because I mean how many hours a day do
00:32:08
you drive your own car like an hour
00:32:10
maybe less but a robo taxi 90% I think
00:32:13
is the number uh on average that they're
00:32:15
not used freeberg who's your one and
00:32:18
two I think the Optimus has the highest
00:32:22
Alpha but the highest beta so you know
00:32:25
more upside than anything else just
00:32:28
unclear how you get there what the path
00:32:32
is and the capital requirements and I
00:32:35
think there's going to be a lot of
00:32:36
commoditization in this space but the
00:32:38
ride sharing is built in it's low beta
00:32:40
and significant Alpha so so you're one
00:32:42
and two uh Optimus R share yeah Optimus
00:32:46
R share chath what was your number two
00:32:47
again just so I can recap here I would
00:32:49
actually probably pick energy and why
00:32:51
would you pick energy as your number two
00:32:52
after rideing I think it's a pretty
00:32:54
obvious disruption if so today in
00:32:58
America if you look at the energy
00:32:59
infrastructure the utilities keep
00:33:02
raising rates and they keep raising
00:33:04
rates independent of what it costs to
00:33:07
generate
00:33:08
energy there are 1,700 Utilities in
00:33:12
America they are by law obligated to
00:33:16
spend I think in the next 10 years about
00:33:18
$2 trillion doll on
00:33:20
capex they will pass all of those costs
00:33:23
plus a margin to Consumers even though
00:33:27
in these next 10 years the cost of
00:33:28
generating an incremental unit of energy
00:33:30
will be essentially free so I think the
00:33:33
very disruptive play is to take a
00:33:36
hundred million homes and make them
00:33:39
manyi
00:33:40
utilities same one and what does it mean
00:33:42
make them utilities yeah you go to a
00:33:45
website again the biggest investment
00:33:47
I've made is in a company called
00:33:49
Palmetto they
00:33:50
are close to now the largest residential
00:33:53
solar business in the United States if
00:33:55
not the largest already now what what
00:33:57
did they do you're a consumer you can go
00:34:00
and lease or buy it doesn't really
00:34:01
matter and we give you a super cheap
00:34:03
system that goes on top of your roof
00:34:05
plus a battery system and all of a
00:34:07
sudden you're totally resilient and
00:34:09
independent of the utilities and we help
00:34:12
change the laws so that every time you
00:34:14
have excess energy you can put it back
00:34:15
into the grid and get paid which is
00:34:17
called net metering so if you have a
00:34:19
hundred million of these mini utilities
00:34:21
competing against 1,700 incumbents that
00:34:24
are forced to make huge Investments and
00:34:27
are
00:34:28
mispriced that's a an upheaval of an
00:34:31
enormous amount of market cap but also
00:34:33
an enormous amount of debt there's like
00:34:35
trillions of dollars of debt so I've
00:34:37
always thought a ginormous directional
00:34:40
bet to make would be to go long the
00:34:42
disruptor the person that helps arm the
00:34:44
rebels in this case would be the person
00:34:46
that arms 100 million homes and then
00:34:48
eventually at some point just short the
00:34:51
debt of these utilities because they
00:34:53
won't be able to service them if enough
00:34:55
people quit and don't need pg& and
00:34:56
everybody else
00:34:58
it'll be just massively massively
00:35:00
disruptive so that's why I think that
00:35:02
that market could be big I like the
00:35:06
Optimus Market the only thing that I'll
00:35:08
say is in my experience when I've looked
00:35:10
at these generalized robots the
00:35:12
conclusion that I came to and I could be
00:35:14
totally wrong is I suspect instead of
00:35:17
having a generalized robot you have very
00:35:20
specific use case robots that look
00:35:22
differently so for example there's an
00:35:23
example Nick you can throw a picture but
00:35:26
there's something called intuitive
00:35:27
Surgical which is essentially a robot
00:35:29
that's operates on you and if you look
00:35:31
at that it doesn't look anything like
00:35:33
what you would think a robot would look
00:35:36
like it just looks like a ginormous
00:35:39
machine and so I suspect that there will
00:35:41
be people that become experts in these
00:35:43
vertical use cases and that will limit
00:35:46
The Tam for a generalized approach I
00:35:50
could be totally wrong but that's sort
00:35:51
of why I rank them the way I rank them
00:35:52
but I'm pretty convinced that robot
00:35:54
toxis are number one and and then this
00:35:56
energy thing that upends these 1700
00:35:59
Utilities in America as number
00:36:01
two all right J Cal you are the third
00:36:03
investor in Uber are you worried about
00:36:05
your investment as I understand it you
00:36:07
still hav't sold have you I've sold
00:36:10
slightly more than the majority of my
00:36:12
Holdings over the years two private
00:36:14
transactions and then I held everything
00:36:16
post going public and uh I'm still long
00:36:20
Uber I I give number one to Optimus by
00:36:23
far in way because I think the build of
00:36:26
materials on Optimus could be 10K or
00:36:31
less I looked at some of these other
00:36:34
startups that are in the space and I've
00:36:35
been studying it a little bit just out
00:36:37
of curiosity and so at a 10K bomb I
00:36:41
think they could rench you one of these
00:36:42
for $300 a month or something like that
00:36:45
a subscription I think every human on
00:36:48
planet earth eventually will have a
00:36:50
robot so I know that's crazy but I think
00:36:53
Optimus will dwarf the entire entirety
00:36:56
of Tesla's other businesses number two
00:36:59
is energy clearly I think and number
00:37:01
three is riling number two energy fairly
00:37:04
obvious what's happening here if you
00:37:06
look at what's happening with data
00:37:07
centers it spiked I think from like
00:37:09
three or 4% of energy now to like is it
00:37:12
15% shth I think we had a discussion
00:37:15
it's almost it's almost it's I think
00:37:16
it's 18% it's almost 20% it's a huge
00:37:18
number now okay so we we don't tell the
00:37:21
two stories together these h100s are
00:37:23
beasts cooling beasts this is like you
00:37:27
can't even Phil Deutch was telling us in
00:37:29
the group chat like you can't even cool
00:37:31
some of these places and what that means
00:37:33
is there's going to be demand for energy
00:37:36
to chat's point if each home becomes a
00:37:39
little provider you know it's going to
00:37:41
create some regulation change I believe
00:37:43
I'm no expert on the regulations we
00:37:45
should definitely have deuts on the PO
00:37:46
at some point to talk about this but
00:37:48
imagine these um like in Texas they keep
00:37:51
having the grids go down and in
00:37:53
Australia they have the grids go down it
00:37:56
it's going to be so annoying for
00:37:57
consumers to have the grids go down
00:37:59
while demand spikes for data
00:38:01
centers all the regulations are going to
00:38:03
get opened up to put batteries and solar
00:38:06
everywhere it's also dangerous I mean
00:38:09
people die when these blackouts and
00:38:10
outages occur and also like we saw in St
00:38:14
Carlos here in the Bay Area Nat gas
00:38:17
lines explode PG is responsible for
00:38:19
forest fires I mean if you can do your
00:38:22
part to basically get off these
00:38:25
grids use some some like paletto or
00:38:28
somebody else and just get solar Tesla
00:38:30
and be done with it and at least you're
00:38:32
not contributing to some of these
00:38:33
Downstream
00:38:35
errors yeah and so I I agree 100% And by
00:38:38
the way if you can make money from your
00:38:42
solar and your batteries and somebody
00:38:44
else picks up the cost of installation I
00:38:47
think there's some Arbitrage here chath
00:38:49
to be had and I think that's like what
00:38:50
you discovered when you did your first
00:38:53
principal approach to this so I think
00:38:56
those two businesses will be far far
00:38:57
bigger than anything else they're doing
00:39:01
now on ride haing I'm using fsd2 I have
00:39:05
been using autopilot I was one of the
00:39:07
first users of
00:39:09
autopilot you know from the beginning
00:39:11
like literally and fsd2 is a significant
00:39:15
Improvement that being said all of these
00:39:18
systems work really well in a controlled
00:39:20
grid like we've seen with weo in Arizona
00:39:23
and in you know limited parts of Los
00:39:25
Angeles and San Francisco I think that
00:39:28
vision is five six seven years out from
00:39:30
having low single-digit percentages and
00:39:32
you may have seen Uber has incorporated
00:39:35
weo and the taxis in London into their
00:39:38
system I think Uber's ultimately going
00:39:40
to be the place people go to call up one
00:39:44
of 20 different self-driving I think a
00:39:47
lot of people are going to get there at
00:39:48
the same time wouldn't be surprised if
00:39:49
Elon gets there first but I think that's
00:39:52
five or 10 years out if I'm being
00:39:53
totally honest you know in terms of
00:39:55
getting to scale so I would never ever
00:39:58
bet against Elon seeing what he's done
00:40:01
watching wait a second when are you
00:40:03
saying that self-driving will be good
00:40:05
enough to power just one Robo taxi let's
00:40:08
just forget about the scale just like
00:40:10
when will it be good enough to have like
00:40:12
a steering wheel free
00:40:14
car yeah so if you you can just look at
00:40:17
Cruz and weo and you can have your
00:40:19
answer which is today in a contained
00:40:22
environment with remote drivers
00:40:24
intervening on some regular basis it
00:40:27
works s so people are taking wayo San
00:40:30
Francisco LA on a pretty regular basis
00:40:31
cruise I think got kicked out of San
00:40:32
Francisco but if in the cruise data
00:40:34
there was a lot of interventions going
00:40:36
on I suspect weo is doing a lot of
00:40:37
interventions so I think I don't want to
00:40:41
be a proponent of this by the way
00:40:43
but bleep out his name was saying
00:40:46
that Jason with FSD they're very strict
00:40:50
that you have to be holding the steering
00:40:52
wheel and stuff but you can go to
00:40:53
Alibaba and buy something that hacks
00:40:56
that right it's a we a l I'm not
00:40:58
promoting that I'm
00:40:59
Notting I'm not promoting this I'm just
00:41:01
saying that it does anyway to answer
00:41:02
your question SX I think today or let's
00:41:05
just say by the end of this year an fsd2
00:41:08
could be operating in a contrain space
00:41:10
just like whmo is now to get it to all
00:41:15
regions back
00:41:16
roads you know weather there's a lot of
00:41:19
edge cases here so I think to the more
00:41:22
important question is when can automated
00:41:23
be 5% of rides or 10% of rides and I
00:41:26
think that's 5 or 10 years from now I do
00:41:28
think a couple of people will reach that
00:41:29
moment at the same time well let me show
00:41:31
you a video this is one of my co-workers
00:41:33
at craft took this this wasn't me but he
00:41:36
was riding in the back of one of these
00:41:37
Robo taxis I think this is San Francisco
00:41:40
or New York I'm not sure which
00:41:42
one but there is no one in yeah the
00:41:47
driver's seat yeah but there's a safety
00:41:49
driver watching this remote I believe
00:41:52
which is what Cruz was doing and then
00:41:53
when they get to a point where they
00:41:55
can't figure it out the human comes in
00:41:59
inter I don't see a safety driver
00:42:00
where's the safety driver no no a remote
00:42:02
safety driver remote remote but I have
00:42:05
to say watching this video that is the
00:42:07
coolest bloody thing I mean yeah this is
00:42:10
amazing I'll be honest I think it's
00:42:12
underrated in terms of how significant
00:42:14
this is going to be if this is a jaguar
00:42:17
look at that it's a Jaguar so you're
00:42:19
telling me that Tesla's not gonna have
00:42:22
something at least as good as this
00:42:24
better soon yeah I think
00:42:27
they they have it already if you drive
00:42:29
fsd2 I believe
00:42:31
fsd2 probably could be working today in
00:42:34
San Francisco under a controlled grid
00:42:36
with the remote drivers like the other
00:42:38
people have if somebody knows about this
00:42:40
by the way can they send us information
00:42:42
I'm Jason at cal.com for life just send
00:42:44
me a picture I I'll keep it on the DL I
00:42:47
won't reveal sources of who these remote
00:42:50
drivers are what their setup looks like
00:42:52
I I'm I'm very curious to understand how
00:42:54
the remote drivers work for weo and Cruz
00:42:56
can they Park the car they can take the
00:42:58
car with a joystick is my understanding
00:43:00
and move it around a garbage can in the
00:43:01
middle of the street Jam wow and that
00:43:04
might be the future of this like let's
00:43:05
say 10 or
00:43:06
15% let's say 10% of the time it needs
00:43:09
an intervention one an hour two an hour
00:43:13
having some remote person in Manila
00:43:15
wherever watching 10 videos concurrently
00:43:19
and looking for moments to do this Inc
00:43:22
Cruise workers intervened to help the
00:43:24
company's cars every 2.5 to 5 miles
00:43:27
according to a New York Times article
00:43:29
all right and just if we uh score
00:43:31
everybody's rating here I give two
00:43:33
points for first place one point for
00:43:34
second place Optimus got six points ride
00:43:36
hailing four energy two Trucking zero
00:43:39
there you have it folks there's your
00:43:40
scores from the besties what is wayo
00:43:43
what is that is that like uber that's
00:43:44
Google self-driving they spun it
00:43:46
out but what what is it is it like
00:43:51
$150,000 cars uhhuh and but is it it
00:43:54
competes with Cru yeah they're doing
00:43:57
what cruised it it was the original
00:43:59
self-driving car company that Google set
00:44:01
up and then they they set up Google X
00:44:02
around it and no I just explain to me
00:44:04
the market guys I'm not sure I get it so
00:44:06
there's way wh and Cruz yeah but there's
00:44:09
weo and Cruz which are like there's no
00:44:10
drivers and then there's Uber and Lyft
00:44:12
where there R drivers yeah that's the
00:44:15
basic right is that yeah that's right
00:44:17
yeah yeah okay and there's also
00:44:19
Aurora I don't does I don't know if Uber
00:44:22
has owns a percentage of that or not but
00:44:24
I think you know about Aurora Aurora was
00:44:26
set up by sson he was the original
00:44:28
engineering lead on weo inside of Google
00:44:31
when they did a management change over
00:44:32
there was a big falling out a lot of
00:44:34
people ended up leaving the weo program
00:44:36
Chris left took a bunch of people with
00:44:38
him and started Aurora which was
00:44:39
basically software to do autonomous
00:44:42
driving that they were then going to
00:44:44
license into oems so that company got
00:44:46
backed by a bunch of VCS and ended up
00:44:48
going public via spa and it's publicly
00:44:50
traded today ah I see Uber owns 26% of
00:44:54
Aurora or actually now it's down to 20%
00:44:56
there's also zuk they made an investment
00:44:58
in it yeah yeah there's also zukes which
00:45:01
is part of Amazon so I think there's
00:45:03
about 10 people who are going to get to
00:45:05
the Finish Line at the same time I think
00:45:06
it's going to be a very crowded space
00:45:07
but again some of these guys are trying
00:45:08
to make software for OEM so that the
00:45:11
oems don't have to build their own
00:45:12
autonomous
00:45:13
platform and some of them are trying to
00:45:16
make a a driving service like weo and
00:45:21
then some of them are like Tesla has a
00:45:23
driving car they actually sell cars so
00:45:25
different models all going to converge
00:45:27
yeah I actually disagree that there's
00:45:29
going to be 20 or 30 of these because I
00:45:32
actually think that self-driving is
00:45:33
really really hard and we know that
00:45:36
Tesla has been spending
00:45:39
years getting to this point and then
00:45:41
Google as well so I'm not sure why
00:45:43
there'd be more than two or three
00:45:45
companies that can do sof are 10 there
00:45:48
are 10 or more pursuing it I do agree it
00:45:51
goes down to four or five and then it's
00:45:53
a question of does any is it a win or
00:45:54
take all win or take most and that's
00:45:57
what remains to be seen but I mean you
00:45:59
need a ton of data to make it work and
00:46:01
you need a lot of data around edge cases
00:46:03
and so the advantage Tesla has is they
00:46:07
actually have cars on the road they have
00:46:09
real cars on the road with real driver
00:46:10
minutes and with drivers using the
00:46:13
previous version of FSD and making
00:46:15
interventions so they're constantly
00:46:18
getting better I think Google seems to
00:46:20
be putting enough resources into this to
00:46:23
get somewhere but I don't think a lot of
00:46:26
companies are going to figure this out
00:46:27
out I think it's going to be somewhere
00:46:28
between one and three companies figure
00:46:30
this out well weo has the most on the
00:46:32
road right now I think Cruz is second to
00:46:34
them in terms of in market so the
00:46:37
question is how quickly can Elon get
00:46:38
this out have you guys any of you guys
00:46:40
taken one of these Robo taxis I haven't
00:46:43
taken one uh one my co-workers yeah we
00:46:47
gotta have you taken one yeah they're
00:46:48
cool they just move around you did take
00:46:50
one yeah they're they're all over the
00:46:52
city you can take them in San Francisco
00:46:54
now yeah you have to download the whmo
00:46:56
app yeah and there's like a weight list
00:46:58
and then you get on it and you know
00:47:00
they're letting people on and then you
00:47:01
just get on it and go for a ride pretty
00:47:03
cool by the way someone tweeted
00:47:05
something kind of funny they said you
00:47:06
know it took Uber years and years and
00:47:09
like a trillion dollars to finally get
00:47:11
to profitability and now they're about
00:47:12
to get disrupted by Robo taxis this is
00:47:15
brutal unlikely I think unlikely I think
00:47:18
it's going to be a very slow roll out
00:47:21
you know one or two% a year so but you
00:47:23
know it compounds and so we'll see all
00:47:25
right everybody is this a big win for
00:47:27
Lena Khan the FTC just banned
00:47:29
non-competes three of three people voted
00:47:31
this up of the three besties who decided
00:47:33
to vote on the docket Federal Trade
00:47:36
Commission this week voted by a 3 to2
00:47:39
margin to ban non-competes to give you a
00:47:40
sense of the impact here estimated of
00:47:42
18% of the total us Workforce are
00:47:44
covered in some way by non-competes 30
00:47:47
million people the ruling bans
00:47:50
agreements entirely and requires
00:47:52
companies to let their staff know that
00:47:54
non-competes are non- enforceable there
00:47:55
are a few exceptions like existing
00:47:57
non-competes for senior level Executives
00:48:00
I'm guessing uh when you buy a company
00:48:01
you can get somebody to non-compete for
00:48:03
buying their company the Democratic FDC
00:48:06
commissioner Rebecca Slaughter called
00:48:08
non-competes unfree and unfair one of
00:48:12
the dissenting Commissioners Republican
00:48:14
Andrew Ferguson said the FTC lacked
00:48:16
Authority from Congress to make this
00:48:18
ruling without specifying whether or not
00:48:20
he agree with it theoretically the new
00:48:21
rule takes effect in 120 days wow we're
00:48:24
on a fast timeline after which the vast
00:48:26
majority of existing non-competes will
00:48:28
be unenforceable here in California
00:48:30
they're not enforceable as we know
00:48:32
except under certain circumstances so
00:48:34
this is really an East Coast thing
00:48:36
people in Boston New York they're really
00:48:38
affected by this and people will
00:48:40
actually enforce these for things as
00:48:42
silly as hairdressers it was a big
00:48:44
lawsuit by hairdressers who had to sign
00:48:47
like 50 mile non-competes with their
00:48:50
beauty
00:48:52
salons the US Chamber of Commerce says
00:48:54
it plans to follow suit over the ruling
00:48:56
FTC say the ru will create 8,500 new
00:48:59
startups a year because people can leave
00:49:01
and compete freeberg your thoughts in
00:49:05
California non-competes are not
00:49:06
enforcable but outside of California
00:49:08
they are and they're often used like in
00:49:10
the
00:49:11
agriculture industry the a inputs
00:49:14
industry where folks are developing new
00:49:16
technology mostly at companies based in
00:49:19
the Midwest and East Coast as you guys
00:49:21
know in financial services as well
00:49:24
they're often used that if you work for
00:49:26
one company because you have a lot of
00:49:27
Trade Secrets you can't carry them over
00:49:28
to others but in Silicon Valley we're
00:49:30
very used to Engineers product managers
00:49:32
Executives taking all of the knowledge
00:49:34
and capabilities that they've developed
00:49:36
at one business and leveraging that into
00:49:38
a new role it creates a dynamically
00:49:41
competitive market place it also
00:49:43
inflates obviously costs because you're
00:49:45
willing to pay more for someone who's
00:49:47
worked directly at a competitor and has
00:49:48
deep knowledge but they are bringing IP
00:49:51
often and there is you know a real risk
00:49:53
that they take something from your
00:49:54
company that you've invested in them to
00:49:57
understand then they take it to your
00:49:58
competitor so I I see both sides of this
00:50:01
I think
00:50:04
non-competes give companies the ability
00:50:06
to invest in employees and feel
00:50:09
confident that the knowledge and
00:50:10
information and support they're
00:50:12
providing to those employees doesn't
00:50:13
ultimately find its way over to a
00:50:16
competitor and it gives you a rationale
00:50:19
for paying more to your employees it
00:50:20
actually inflates salaries if I'm
00:50:23
fearful that someone might leave and
00:50:25
take knowledge with them I'm going share
00:50:27
less with the employee I'm going to pay
00:50:28
them less so I could see this going both
00:50:30
ways I'm really fairly torn on this
00:50:32
issue to be honest I don't know what the
00:50:34
right answer is or if there really is a
00:50:37
strong kind of ethical case one way or
00:50:39
the other I think that non-competes can
00:50:43
both benefit and hurt employees and
00:50:45
benefit and hurt companies yes there are
00:50:47
unintended consequences Jam where do you
00:50:49
stand on this is this a huge win for
00:50:50
lenina con neutral or a
00:50:54
loss I don't see non-compete having any
00:50:57
value in any Market
00:50:59
except East Coast Financial markets I've
00:51:02
heard of folks getting something called
00:51:05
Beach leave typically in finance these
00:51:08
are Wall Street jobs hedge fund
00:51:10
jobs so I know it exists there what does
00:51:13
it mean Beach leave like if you leave
00:51:16
hedge fund a and you're going to go to
00:51:17
hedge fund B they make you sit on ice
00:51:20
for six months or nine months Garden
00:51:22
leave I think maybe they call it and the
00:51:23
whole idea is that you don't take any
00:51:26
active Market thoughts to your next job
00:51:29
for what for what freeberg said I just
00:51:32
think the whole thing doesn't make much
00:51:33
sense I mean
00:51:34
like intellectual property is the least
00:51:38
valuable it's ever been right more
00:51:41
people develop things now via trade
00:51:44
secret then patents the whole patent
00:51:46
system has become a little bit of a game
00:51:49
we just talked about open source right
00:51:51
they have less and less value so
00:51:52
Innovation is happening in plain sight
00:51:55
and so I don't think companies are
00:51:57
actually thinking about this issue at
00:51:58
all anymore they're paying people
00:52:01
because they need to pay more to get the
00:52:03
best and brightest so I think if you're
00:52:05
hoping to rely
00:52:07
on one of these agreements if you're an
00:52:11
employer I think that you should just
00:52:13
forget about them and just hire the best
00:52:16
people pay them the best and if they
00:52:17
suck fire them did you ever see that
00:52:19
movie Spanish Prisoner starring Steve
00:52:22
Martin you guys ever SE yeah great film
00:52:24
god wow that's deep pull Steve Martin
00:52:26
plays the con man that goes to this guy
00:52:30
and the guy is like a chemical engineer
00:52:32
Campbell Scott is the guy's name the
00:52:33
actor and he has like a a process for
00:52:37
making a chemical and it's worth so much
00:52:39
money and the whole movie is Steve
00:52:41
Martin conning him into telling him the
00:52:43
chemical process and eventually he took
00:52:45
it he was going to give him all this
00:52:46
money hire him and then he disappeared
00:52:48
once he got the knowledge and that was
00:52:49
the end of it's a great great film shout
00:52:51
out David mammo David mammo exactly yeah
00:52:54
fantastic but I think there's a lot of
00:52:57
investment that goes into intellectual
00:53:00
property businesses that include things
00:53:03
like chemical engineering obviously
00:53:05
Financial Services trading companies
00:53:07
alos in hedge funds and a lot in
00:53:10
software that if you can access that
00:53:13
intellectual property without stealing
00:53:15
it but actually hiring an employee that
00:53:17
has it in their head uh you gain quite a
00:53:20
lot but you can do that now I don't see
00:53:22
it actually doing anything B so I have
00:53:24
had a lot of folks that I know in other
00:53:26
Industries outside of tech or software
00:53:28
where California non-competes are non-
00:53:30
enforceable that aren't allowed to go
00:53:32
work at a competitor for one year two
00:53:33
years three years no no no I'm not
00:53:35
disputing that it doesn't exist I'm
00:53:36
saying where do you see it actually
00:53:38
having negative repercussions in
00:53:40
California the point of the fact that it
00:53:42
doesn't exist here is also seemingly
00:53:44
that it doesn't mean anything yeah
00:53:46
theate but the rate of change here is
00:53:48
crazy like the the rate at which
00:53:50
software changes I think is quite
00:53:52
distinct from the rate at which for
00:53:54
example a chemical engineering process
00:53:56
might change where you learn that
00:53:58
process you spend $200 million building
00:54:00
a system and then that that employee can
00:54:02
go and tell it to someone else and
00:54:03
suddenly changes everything about that
00:54:05
other business so I I don't know I feel
00:54:06
like there's something about California
00:54:08
software that gives us this this point
00:54:11
of view that maybe it doesn't matter but
00:54:13
in other Industries it might in that
00:54:14
example you'd still need to have come up
00:54:16
with hundreds of millions of capex to
00:54:17
implement it whatever you know so saxs
00:54:20
any thoughts I just don't think these
00:54:21
things mean anything yeah do you care
00:54:23
about non-compete sxs I think one of the
00:54:25
reasons why the tech industry moves so
00:54:26
so fast and innovat so well is because
00:54:29
of the happy coincidence that California
00:54:31
doesn't allow non-competes and so the
00:54:33
industries never had them and as a
00:54:36
result of that like you're saying the
00:54:38
talent just flows freely to wherever the
00:54:40
opportunity is and you have this dynamic
00:54:43
in Tech where the VCS and the talent all
00:54:48
swarm the biggest and best opportunities
00:54:51
and the newest Platforms in a completely
00:54:54
decentralized way and there's no little
00:54:55
or no friction in doing that if you were
00:54:58
to
00:54:59
impose non-competes on all of the talent
00:55:02
there's going to be enormous delays and
00:55:04
friction in them moving around to pursue
00:55:07
opportunities and so I think it's been
00:55:08
very beneficial to the industry as a
00:55:10
whole that we don't have that now it's
00:55:12
hard for me to speak to other Industries
00:55:14
but I think that if you're looking to
00:55:16
maximize the pace of innovation you
00:55:18
wouldn't have these employee non-compete
00:55:21
so on that level I kind of agree with
00:55:23
what Lena Khan's done that being said I
00:55:26
do think the Republicans point was well
00:55:28
taken in the sense that this was very
00:55:30
aggressive Ru
00:55:32
making I mean I think you could
00:55:34
legitimately argue that a change this
00:55:37
big should be made by Congress but I
00:55:40
tend to think this is probably a
00:55:41
positive change I think this is great
00:55:43
what Lina Khan's doing and this is two
00:55:45
for two I think her Apple Action was
00:55:47
great I think this is great love to have
00:55:49
her at the summit that would be an
00:55:50
amazing fireside chat uh so if anybody
00:55:53
knows her invite her to the summit it
00:55:55
really is threeway oh and by the way
00:55:58
chth media business on the East Coast
00:56:00
also does this and that's why friend of
00:56:04
the Pod Tucker Carlson and uh Don Lemon
00:56:08
both of them started shows on the
00:56:10
internet not other networks because they
00:56:12
have very tight non-competes and it's
00:56:14
pay to play they got paid out their full
00:56:16
contracts according to reports and so
00:56:19
there is something I think in a middle
00:56:21
ground here chth where if you do want
00:56:24
somebody to not compete you got to pay
00:56:26
to play in other words they're getting
00:56:28
this what I'm saying it just tends to be
00:56:30
examples Jason over and over of markets
00:56:32
that don't really matter that much
00:56:35
relying on these things and markets that
00:56:37
are Dynamic and add value in humanity
00:56:39
just moving past them so it's probably
00:56:42
make sense for all of us to just go move
00:56:44
past them absolutely 100% that's GNA be
00:56:46
great for the economy saak you gonna say
00:56:47
something well just because these
00:56:50
Agreements are no longer enforcable
00:56:52
doesn't mean that businesses don't have
00:56:54
modes it just means you have to look in
00:56:55
other places places I mean you have to
00:56:58
you have to find network effects you
00:56:59
have to find data scale effects there's
00:57:01
other ways of building a mode product
00:57:03
besides just trade secrets or or you
00:57:07
know patents is another category where
00:57:10
you know in the tech industry patents
00:57:11
have never really matter that much and
00:57:13
the only people who are seeking to
00:57:14
litigate patents are basically patent
00:57:16
trolls losers so you want to find real
00:57:20
durable Moes not these like legal
00:57:22
Arrangements that try to protect your
00:57:24
business through you know these these
00:57:26
types of contracts well said that's
00:57:28
really well said that's exactly what I
00:57:30
was trying to say that's well said well
00:57:31
said Team product brand these are the
00:57:35
ways to build a great business not legal
00:57:38
by the way one of the reasons why the
00:57:41
industry moves so fast is because best
00:57:42
practices get shared very quickly and
00:57:45
one of the ways that happens is that
00:57:48
everybody is moving around to different
00:57:49
companies I mean what's the average term
00:57:52
of employment one or two years 36 months
00:57:55
right and you don't have to
00:57:56
that if you've got some knowledge in
00:57:58
your head that you don't have to worry
00:58:00
that if you use it at some new company
00:58:01
you're going to violate some trade
00:58:03
secret the but the one thing everyone
00:58:05
knows not to do is take anything with
00:58:07
them in terms of you know not everybody
00:58:11
not every dowski was that his name L
00:58:14
well that's why it's really stup what an
00:58:15
idiot oh my God yeah I mean sometimes
00:58:17
people do Break The Rules I mean the
00:58:18
rule is you don't take any work product
00:58:21
with you you don't take any documents no
00:58:23
thumb drives di don't bring your old
00:58:26
computer to the new no to the new job
00:58:28
don't bring any old code no do and there
00:58:31
are people who violate those rules and
00:58:33
that is definitely breaking the rules
00:58:35
but you're allowed to take with you
00:58:37
anything in your head and it is one of
00:58:39
the ways that best practices sort of
00:58:42
become more common you guys know the
00:58:44
story right like Steve Chen before he
00:58:46
started YouTube was an engineer at
00:58:48
Facebook and there was like at one point
00:58:52
I remember being in some meeting where
00:58:54
was like oh I think we found an early
00:58:55
vers of the YouTube code on Old on an
00:58:59
old laptop that was a Facebook laptop
00:59:01
that's Ste so I remember like the GC was
00:59:04
like I think we technically own
00:59:07
YouTube that's a good General I think we
00:59:09
own
00:59:11
YouTube could you have imagin if
00:59:14
Facebook sued Google to get YouTube
00:59:16
speaking of startups this is critically
00:59:18
important for Founders listening if
00:59:19
you're working at a company the best
00:59:22
practice is if you're going to do a side
00:59:23
hustle is to get permission and a waiver
00:59:25
from your boss that you're working on
00:59:27
that and clean machine you got to go on
00:59:30
a clean machine your machine is being
00:59:32
canot use your work computer your work
00:59:35
machine I'm telling you right now is
00:59:36
being monitored every step of the way I
00:59:39
had well it's not just monitoring it's
00:59:41
who owns that it's their property it's
00:59:43
their proper absolutely and if you type
00:59:44
on it especially in this work from home
00:59:47
era and you know
00:59:49
anyway I had a situation I wouldn't say
00:59:52
it which company where a sales
00:59:55
executive left the company went into the
00:59:58
CRM system downloaded it and he was so
01:00:04
dumb he had written plans for his next
01:00:07
employer on his computer and then in his
01:00:09
Corporate email emailed the database and
01:00:13
his plans for the new employer to his
01:00:15
Yahoo or Outlook email oh my God they
01:00:19
busted him of course they dropped a
01:00:21
legal letter on him they put a legal
01:00:23
letter on the person was hiring him the
01:00:25
person hir resends the offer obviously
01:00:27
they don't want some toxic nonsense and
01:00:30
uh yeah the person you know I have no
01:00:32
idea what happened to him you know
01:00:33
there's that very famous email that
01:00:35
Steve Jobs sent to Bruce
01:00:37
chisen which goes something along the
01:00:39
lines of dear Bruce it's come to my
01:00:41
attention that oh Apple never recruits
01:00:44
from Adobe but it seems like Adobe is
01:00:47
actively recruiting Apple employees one
01:00:50
of our practices have to
01:00:53
change a gangster you know please let me
01:00:56
know who or something like that it's
01:00:58
just a phenomenal email yeah they they
01:01:00
this actually resulted in a bunch of
01:01:02
legal action a settlement because I
01:01:05
think Eric Schmidt and Steve Jobs
01:01:07
correct me if I'm wrong producers or
01:01:08
there was something between Google and
01:01:10
apple where they agreed and I think
01:01:13
Sergey or somebody was yeah Sergey got
01:01:16
in on it says I don't know if this is
01:01:18
legal but they didn't want to piss Steve
01:01:20
off because it's not the kind of guy you
01:01:22
want to piss off because he can execute
01:01:26
and Eric Schmidt was on the board of
01:01:28
Apple at the time there's a very famous
01:01:30
picture of them at the Pao the the
01:01:33
sandill road or Stanford mall having
01:01:35
coffee and Steve is lit he's not happy
01:01:38
about this and I think they agreed to
01:01:42
not poach a certain level or something
01:01:44
like that oh there's the famous picture
01:01:45
where they were breaking bread and then
01:01:46
Eric Schmidt did Android Steve felt very
01:01:49
betrayed by this and Eric Schmidt left
01:01:51
the board of Apple shortly thereafter
01:01:56
because Steve reportedly felt like he
01:01:58
was double crossed but uh you know all
01:02:00
that is speculation so check your own
01:02:02
facts any any do you have any other
01:02:05
details on that freeberg do you remember
01:02:06
that case it was after your time right
01:02:09
I'll tell you a funny story we had a
01:02:11
meeting with the exec team from Apple
01:02:14
when I was at Google and Marissa mayor
01:02:18
and Sergey and myself and one other
01:02:21
person went to the meeting and Marissa's
01:02:24
idea was why don't we pitch Apple that
01:02:27
we could put a cach of the internet in
01:02:29
200 megabytes like the most important
01:02:32
200 megabytes of the internet cash it
01:02:34
and put it on the iPod so you could
01:02:35
access the internet on the iPod surf the
01:02:37
web right basically search search a
01:02:40
cached version of the web and that was
01:02:42
the pitch and they kind of were like
01:02:43
radio silent they didn't respond to the
01:02:45
pitch and then they kind of blank-faced
01:02:46
stared at us two years later the iPhone
01:02:50
came out I have three amazing Steve Jobs
01:02:53
stories I'll tell you one of them right
01:02:54
now
01:02:56
I was the co-founder of a website called
01:02:57
in gadget which was the largest blog in
01:02:59
the world we wind up selling the
01:03:00
collection of those blogs to AOL I was
01:03:03
at a conference Steve Jobs was there he
01:03:05
sees my badge says in gadget he goes oh
01:03:08
Jason in gadget my
01:03:11
favorite tech blog in the world I read
01:03:13
it every day y
01:03:14
yada and I said oh that's great and you
01:03:17
know D and I said hey can I ask you a
01:03:18
question he said yeah sure anything and
01:03:20
we're we're out there beautiful view of
01:03:22
the Pacific Ocean and I said you know
01:03:24
Steve um I have the iPod I that out of
01:03:26
my pocket and it had a color screen and
01:03:28
I said to him I said you know it seems
01:03:31
to me that I could download short video
01:03:34
clips like of the Chappelle show and I
01:03:35
use that as an example and uh they could
01:03:38
sell them to me like you're selling mp3s
01:03:39
and you could just buy like a Chappelle
01:03:41
Show issue episode it's pretty obvious
01:03:43
idea and then I could play it when I'm
01:03:45
on the Subway or something or got some
01:03:47
downtime in a cafe I could watch
01:03:49
Chappelle show clips could you make a
01:03:52
video version of this since it's already
01:03:53
got the you know storage in in the
01:03:55
screen he looked at me he said Jason do
01:03:57
you want to watch a thumbnail size video
01:04:00
I said yeah totally fine he said all of
01:04:04
our research says nobody wants to watch
01:04:07
a tiny video like that it's the worst
01:04:09
idea ever and I had this moment of like
01:04:12
self-doubt because he had that reality
01:04:14
Distortion field I go back I tell my
01:04:16
guys what he said and hey should we
01:04:18
write a story about it and uh 30 days
01:04:21
later he releases the video version and
01:04:24
the ability to watch videos on it he had
01:04:26
the greatest poker face ever it was just
01:04:30
an incredible moment man I really missed
01:04:32
that guy what a
01:04:34
incredible what an incredible are we
01:04:36
doing a walk down memory lane of our
01:04:38
Steve Jobs stories do you have one I
01:04:40
have two but I I give us one come on
01:04:42
these are great people loved by the way
01:04:44
the segment when we went on when I
01:04:46
worked at
01:04:47
winam my
01:04:50
boss when when it was merged into AOL to
01:04:54
create AOL music was this guy Kevin
01:04:56
Conway great guy remember
01:04:58
Kev and Kevin basically got us Runway to
01:05:04
launch a 99 Cent music download
01:05:08
store and we were able to use aol's
01:05:11
cards on file so there was like 25 or 30
01:05:14
million credit cards and we were able to
01:05:17
use Warner Brothers music library
01:05:20
because AOL had merged with Time Warner
01:05:23
and so we launched this 99 Cent music
01:05:25
store
01:05:26
and it performed phenomenally and I went
01:05:30
and I did demos for Walt mosberg
01:05:33
TOA I went to Apple I showed James higga
01:05:37
Eddie Q Steve Jobs all these guys and
01:05:41
AOL just couldn't do anything with the
01:05:42
data we kept pushing Kevin kept pushing
01:05:45
but they were just so tied up in their
01:05:47
own political nonsense they wouldn't
01:05:49
Greenlight it becoming more than a beta
01:05:52
and then 9 months later the 99 cent
01:05:55
download store launched on iTunes and I
01:05:57
was just like oh my God this is
01:05:59
execution and they had all the labels
01:06:02
and it was a thousand times better
01:06:03
experience and we created but it was the
01:06:06
first time where I stumbled into
01:06:08
something relatively accidentally and
01:06:10
just got frankly owned by an
01:06:12
organization that's just a thousand
01:06:14
times better saak you ever meet Steve
01:06:16
Jobs in person no
01:06:19
freeberg uh yeah I met him at Mac World
01:06:22
in
01:06:24
2003 he was walking the floor it was at
01:06:27
Moscone I remember it because I I've
01:06:29
been a Mac User since 1984 first Mac
01:06:32
original I still have it in my office
01:06:34
Die Hard Die Hard Mac fan I read every
01:06:36
edition of Mac World Mac User Mac week
01:06:41
and so to meet him on the floor walking
01:06:42
around I was just like like a 22y old
01:06:45
kid I was freaking out it was awesome
01:06:48
only time I met him he was the greatest
01:06:50
he was the absolute greatest I have one
01:06:52
other story but I'm not going to share
01:06:54
it you know you know what segment people
01:06:57
love last week I interviewed with him
01:06:59
for a job what oh come on you cannot
01:07:01
tell that story right when I left
01:07:02
Facebook people love the story last week
01:07:04
when we did our childhood uh business I
01:07:06
want he the story Cham come on chamath
01:07:09
you give us one more I'll give you one
01:07:10
that's recorded on video it's like so
01:07:12
littered with my failures and my
01:07:14
insecurities but okay that's why we want
01:07:16
to hear it that's why we want to hear it
01:07:17
so damn successful be self-deprecating
01:07:19
share with your brothers there was
01:07:21
basically somebody at a well-known
01:07:24
recruiting firm who pinged me and said
01:07:25
hey there could be a consol this is
01:07:28
right when I was leaving Facebook and I
01:07:30
had a pretty
01:07:32
large project that never saw the light
01:07:35
of day which was this Facebook phone
01:07:36
although people in the ecosystem knew
01:07:38
that we were working on it so you know
01:07:40
Samsung and Intel were our partners and
01:07:42
AT&T and all this stuff anyways long
01:07:44
story short there was a rumor that they
01:07:47
wanted to consolidate iPhone into one
01:07:50
business unit right and at the time it
01:07:52
was kind of like very balkanized or
01:07:54
whatever and and I got approached by
01:07:57
recruiter saying they're thinking of
01:07:58
creating a role which is kind of like
01:08:00
head of iPhone and at that point I was
01:08:02
like this was in 201 11 and I was
01:08:06
adamant that I would never work for
01:08:08
anybody until I heard it was Steve Jobs
01:08:10
and I was like I will do whatever he
01:08:12
says
01:08:14
whatever
01:08:16
ask dude I would have driven his car I
01:08:19
would yes sir I would have driven that
01:08:21
car I was you be Driving Miss Daisy oh
01:08:25
Steve job you're my best friend and I
01:08:28
went through a couple of interviews I'm
01:08:29
not going to get into those details and
01:08:32
at the end of it it was like well he's
01:08:34
not going to become he's not going to be
01:08:35
the CEO you know he's going to become
01:08:37
executive chairman and so you'll be
01:08:40
reporting to Tim Cook and that's where
01:08:42
that process
01:08:44
died they said I wasn't a good cultural
01:08:46
fit for Apple in the new era now and
01:08:48
then it turned out what happened yeah
01:08:50
you would four left I was not a good
01:08:52
culture I would not have been a good
01:08:53
cultureal fit for that no he wanted
01:08:54
radicals and Tim Cook wanted you know
01:08:57
optimizers yes so then I went and I
01:08:58
started Social Capital but that was my
01:09:00
only job interview that I
01:09:02
had when I was leaving Facebook and it
01:09:05
was for me to I had the same reaction as
01:09:08
freeberg I was like a kid
01:09:12
meeting his I don't even want to call it
01:09:14
Idol like I think I was like a a
01:09:18
Believer meeting
01:09:20
Jesus that's how it felt I will uh I
01:09:23
will save my um you just to get this uh
01:09:26
we got to get through two more stories
01:09:27
in the docket I'm going to leave my
01:09:28
other Steve Jobs stories for another
01:09:30
time we got time it's time well you have
01:09:32
that famous clip of you asking in that
01:09:34
question where he basically was looking
01:09:35
at you like that's a very famous one
01:09:37
because that that you you really got the
01:09:38
better of him I thought which is pretty
01:09:39
good here all right will you uh help
01:09:41
companies like ours uh sell podcasts you
01:09:44
know be an audible so if we wanted to
01:09:45
sell a podcast through your service
01:09:47
would you uh help us do the Fulfillment
01:09:50
um you know we're planning on having all
01:09:52
the podcasts be free at first but uh
01:09:54
zing me an email email with what you've
01:09:56
got in mind and we're open to anything
01:09:57
same email I always send it to you yep
01:10:01
okay it's so strong I mean I gotta give
01:10:04
it to you J call you have balls I mean
01:10:07
the truth is I traded emails with Steve
01:10:10
many times he he was with the Press he
01:10:13
was full contact as you know all right
01:10:16
it's time full contact it's time for
01:10:20
saxs red meat and we've got a double
01:10:22
serving for sax sax stands are going to
01:10:24
be really happy right now now Tik tok's
01:10:26
dester ban bill has been signed into law
01:10:28
Senate passed the bill 79 to18 we've
01:10:30
talked about this year over and over and
01:10:32
over again President signed it this
01:10:35
thing's uh on the fast track divest or
01:10:38
shut down Tik Tock bill was packaged
01:10:41
bundled with 95 billion in foreign aid
01:10:47
61 billion for the Ukraine Ukraine
01:10:49
Ukraine 26.4 billion for Israel and
01:10:52
human humanitarian aid for civilians in
01:10:54
Gaza
01:10:56
and about 8 billion for the indopacific
01:10:58
region AKA
01:11:00
Taiwan house added a provision to the
01:11:02
bill that require the president to seek
01:11:03
A10 billion repayment from Ukraine's
01:11:07
government finally they're talking about
01:11:10
the lease back we'll see if that ever
01:11:12
happens I'm curious what sack things
01:11:14
there last year CNBC reported that by
01:11:16
Den was buying back 5 billion worth the
01:11:17
stock and early Thursday morning it was
01:11:20
reported that b Dan is exploring selling
01:11:23
a majority stake in Tik tok's us
01:11:25
business
01:11:26
looks like gun to the head is working to
01:11:28
a non-te company without the algorithm
01:11:30
in other words maybe they sell it to a
01:11:32
Walmart somebody who they don't consider
01:11:35
super competitive I'm not sure who the
01:11:36
non-tech company is here could be Disney
01:11:38
would come to mind as well and remember
01:11:40
Disney did look at buying Twitter but
01:11:42
they didn't want the toxicity of an open
01:11:44
platform uh Tik Tok is obviously heavily
01:11:47
scrubbed of anything that is aggressive
01:11:49
you can't show a movie clip with
01:11:51
somebody getting attacked violently it's
01:11:53
very PG-13
01:11:56
but this is the key part saaks no
01:11:58
algorithm in the package deal your
01:12:00
thoughts on this and you can take it
01:12:03
either way you like because I know your
01:12:05
fans want to hear about everything do
01:12:07
you want to talk the the budget bundling
01:12:09
or the Tik Tock ban which and the
01:12:12
divesture which seems to be happening
01:12:14
well the overall theme is just that the
01:12:15
National Security State got everything
01:12:17
it wanted it got 100 billion for to
01:12:20
support forever Wars it got a Tik Tock
01:12:24
ban and this divesture thing is a total
01:12:26
fig Leaf because it's not clear that
01:12:28
China is going to allow Tik Tock to
01:12:30
divest because it would set a horrible
01:12:32
precedent where the us could just pass a
01:12:34
law and then essentially steal the value
01:12:37
of a Chinese company so I don't think
01:12:39
they're going to be able to divest I
01:12:40
think they're just going to get shut
01:12:41
down so the security State's getting its
01:12:43
wish there and then another bill that
01:12:45
you didn't mention which they just
01:12:46
passed is they approved the warrantless
01:12:49
spying on Americans so the federal
01:12:51
government can now spy on you and you're
01:12:54
you know know Communications without
01:12:57
even getting a warrant ridiculous
01:12:59
disgusting the National Security State
01:13:01
just seems to get whatever it wants and
01:13:03
there was large bipartisan majorities
01:13:05
follow of this and the way they do it is
01:13:07
they conjure all these fears to try and
01:13:11
fear us into well if we don't agree to
01:13:14
warrantless spying then you could get a
01:13:17
terrorist attack well when has a warrant
01:13:21
requirement ever gotten in the way of
01:13:24
actually doing what we needs to to do to
01:13:25
stop terrorism never but that fear was
01:13:28
enough to get Congress to authorize that
01:13:31
legislation they're keeping us involved
01:13:33
in this forever war in Ukraine by this
01:13:35
fear that Putin is somehow going to
01:13:36
conquer all of Europe which I think is
01:13:38
total threat inflation and this Tik Tock
01:13:42
fear that somehow what videos we like is
01:13:46
like Precious data that's being shared
01:13:47
with the CCP look I'm willing to believe
01:13:50
it's possible but they never proved that
01:13:53
oh they proved that data it's been
01:13:54
proven
01:13:55
you show us when we debated this when we
01:13:57
debated this you showed one article from
01:13:59
The New York Times about how yeah that's
01:14:02
not proof jcal those were two Rogue
01:14:04
employees who shared some data with I
01:14:08
spoke to New York Times
01:14:10
reporters I spoke I spoke to multiple
01:14:12
Tik Tock employees myself personally and
01:14:14
they told me that the Chinese
01:14:16
representatives are all over the company
01:14:18
and inside of it freeberg your thoughts
01:14:21
but what was the what was the judicial
01:14:22
process or legislative process to prove
01:14:24
that
01:14:25
do they have hearings they prove that I
01:14:28
understand that yeah you know your
01:14:30
hearsay in your view is good enough to
01:14:32
ban it but I'd actually my position on
01:14:34
Banning thanks for asking is based on
01:14:37
reciprocity and the potential damage it
01:14:39
could do and based on how influential
01:14:41
and Powerful the product is and how they
01:14:43
could change sentiment and censorship
01:14:45
and the Chinese government is fantastic
01:14:48
at censorship
01:14:49
they're trade bill then because handle
01:14:52
it in a trade bill because what we've
01:14:54
authorized here is not a Tik Tok ban it
01:14:56
is a sweeping new federal power to ban
01:15:01
foreign adversary controlled
01:15:02
applications that's the new category so
01:15:05
we have a new category of foreign
01:15:07
controlled apps whatever that means and
01:15:10
the government can now use it to shut
01:15:11
down apps they don't like and I
01:15:13
guarantee you I think here's where this
01:15:14
goes next I think telegram is next on
01:15:17
The Hit List you have a Russian founder
01:15:21
okay you have rumors for years I'd say
01:15:24
unpro proven that somehow telegram's
01:15:27
been backdoored by the Russian
01:15:29
government you know we've all heard
01:15:31
those those rumors it's kind of like the
01:15:33
where is it face though isn't it isn't
01:15:35
he out of there he's in Monaco or
01:15:36
something he doesn't live there no he in
01:15:38
Dubai he lives in Dubai yeah PA here's
01:15:41
here's what you're going to see you're
01:15:43
going to see at at some point you'll see
01:15:45
a media campaign that'll be promoting
01:15:47
the idea that telegram is used by Hamas
01:15:51
by terrorists by groups that the US
01:15:53
doesn't like m and that it's back doored
01:15:56
by Russia and that it's got some shady
01:15:58
investors on its cap table and no
01:16:01
politician's going to want to stand up
01:16:03
and defend Telegram and all the industry
01:16:06
money that flows into Washington will be
01:16:10
promoting this idea that we have to ban
01:16:11
it because think about the market share
01:16:13
gains that all of telegram's competitors
01:16:16
will make and they're the ones wired
01:16:17
into DC so this is a foregone you also
01:16:20
said on Twitter you thought this would
01:16:21
come to X and to rumble you actually
01:16:24
think they take this to American
01:16:26
companies I think that that seems like a
01:16:28
stretch not really I think that the
01:16:30
first step is you go get telegram
01:16:32
because that's easy you know this guy is
01:16:34
an agent of Putin obviously and anyone
01:16:37
who says differently is is themselves an
01:16:39
agent of the Kremlin how does it jump
01:16:41
that's how that's how this rhetoric
01:16:42
works so first they'll they'll whack
01:16:45
Telegram and by the way we all know the
01:16:47
companies are going to benefit
01:16:48
enormously by slurping up that market
01:16:49
share and then if Biden wins a second
01:16:52
term they will eventually set their gun
01:16:55
sights on X but look that's a battle
01:16:57
because it in X you have a billionaire
01:17:00
who has resources who's willing to stand
01:17:02
on his hind legs and fight yeah I mean
01:17:05
and so they're not going to do that
01:17:06
before the election but look if we
01:17:08
continue to see more weaponization and
01:17:12
more censorship I believe that
01:17:14
eventually what they will do is try and
01:17:16
push Elon to divest X and look all they
01:17:19
got all all they got to do listen job
01:17:21
this this act empowers the Attorney
01:17:23
General to open an investig
01:17:25
so I think that in a second Biden term
01:17:28
they will open an investigation and just
01:17:30
start ratcheting up the pressure on Elon
01:17:33
to get rid of X because that's clearly
01:17:34
what they want yeah and the Tik Tock guy
01:17:36
bought off Trump already so he's gonna
01:17:38
fight for it freeberg your
01:17:41
thoughts I don't agree that I the
01:17:44
Chinese government will shut it down I I
01:17:47
certainly don't have any insight into
01:17:49
what the Chinese government is
01:17:51
discussing or thinking about doing but
01:17:53
there's a lot of money to be made here
01:17:55
so if I'm bite Dance I'm very likely
01:17:58
going to hire a bunch of Bankers run an
01:18:00
auction process and sell this thing and
01:18:02
I have a year to do it this is a
01:18:05
business that did 14 billion in Revenue
01:18:07
last year according to a published
01:18:09
report 170 million Americans are active
01:18:12
users of Tik Tok a revenue grew 40% plus
01:18:16
last year so I don't know how they would
01:18:18
just say hey let's write this thing off
01:18:20
and and and shut it down when we could
01:18:23
probably generate I'm basic that
01:18:25
statement on published reports that
01:18:28
China has said they're opposed to the
01:18:30
for sale of Tik Tok in the US and look I
01:18:34
agree with you that that it might change
01:18:36
think about it if you're the Chinese
01:18:37
government you're adamantly opposed to
01:18:39
this you don't like the president and
01:18:41
you don't really care you don't really
01:18:43
care about tech entrepreneurs getting
01:18:45
rich I mean the the founder CEO of Tik
01:18:49
Tok lives in Singapore right so why
01:18:52
would they give a but now let's
01:18:53
assume that they let it go through think
01:18:56
about the implications Morgan Stanley
01:18:58
and Goldman Sachs get hired to run a a
01:19:00
joint process to auction this thing off
01:19:02
right they're going to run this process
01:19:04
for a period of months there's only a
01:19:05
certain number of folks that could
01:19:07
actually make a bid to buy this thing
01:19:09
maybe some of the big guys in private
01:19:11
Equity Silver Lake and others try and
01:19:12
pull some Capital together to buy it but
01:19:14
I think it's more likely a big company
01:19:16
tries to buy it cifas and antitrust will
01:19:19
probably not
01:19:21
be as relevant here as it normally would
01:19:24
be certainly C s wouldn't be because
01:19:25
it's being completely divested antitrust
01:19:28
there's a real question on whether
01:19:30
they're going to be given some leeway
01:19:32
but even if if antitrust does apply who
01:19:35
could buy Tik Tok in the US there's only
01:19:37
a handful of companies that could or or
01:19:40
would
01:19:41
Oracle maybe Microsoft they said it's
01:19:44
not a tech is the report that it's not a
01:19:47
what not a tech company so that would be
01:19:50
Walmart Disney you start to get to over
01:19:52
maybe a media company right yeah so I do
01:19:55
I do think that there's a really
01:19:56
interesting Netflix maybe Netflix so I
01:20:00
think that there's a really interesting
01:20:01
rewrite of the landscape a little bit
01:20:03
here where some of the traditional big
01:20:06
tech companies meta Google have really
01:20:09
had total control over the consumer
01:20:12
media consumption on the internet that
01:20:13
there's going to be a real difference
01:20:14
here that
01:20:16
might be triggered in how the industry
01:20:20
kind of is sorted based on the Tik Tok
01:20:23
auction if it does happen and I think
01:20:25
it's probably look we could argue all
01:20:26
day about what the Chinese are going to
01:20:27
do but if it does go through there's
01:20:30
next story you're going to see in the
01:20:31
Wall Street Journal is how much money
01:20:32
the bankers are going to make on fees
01:20:33
running the auction here and and then
01:20:36
the next story you'll see after that is
01:20:38
going to be about how the tech and media
01:20:39
landscape has been reshuffled and
01:20:41
Rewritten by the Tik Tok deal shth hly
01:20:45
batia our chairman dictator can't wait
01:20:47
to see a poker tonight what are your
01:20:49
thoughts on this if any I think the
01:20:50
thing to keep in mind is that the reason
01:20:53
why the government is Bing Tik Tok and
01:20:55
I'm totally speculating and guessing has
01:20:57
nothing to do with these silly little
01:20:59
videos but it is that the overwhelming
01:21:02
majority of the people that download Tik
01:21:04
Tok keep the microphone on and it is an
01:21:07
ambient passive surveillance device and
01:21:10
I think to the extent that a foreign
01:21:13
government has access to whatever you
01:21:15
hear ambiently and randomly while the
01:21:17
app is not even being used is the real
01:21:20
problem here and so I think that that's
01:21:23
effectively what this is is a listening
01:21:25
device into enough Americans and I think
01:21:28
that that's pretty scary to folks the
01:21:30
second thing is with respect to the
01:21:31
actual product itself in the absence of
01:21:34
that algorithm which I think is just
01:21:36
incredible as somebody who was a
01:21:38
voracious user of that app until I
01:21:40
deleted
01:21:41
it I don't think the product is much of
01:21:43
anything it's probably no better or no
01:21:46
worse than shorts or reals or some of
01:21:48
these other
01:21:50
Alternatives so I don't see the economic
01:21:52
justification for anybody whoy one of
01:21:54
these assets to buy these things because
01:21:56
the content is roughly the same now it
01:21:59
it is the thing that makes that app is
01:22:01
the algo but the videos are everywhere
01:22:04
they're on YouTube they're on
01:22:07
Instagram they're everywhere so I don't
01:22:10
see why anybody would pay a lot of money
01:22:12
for this especially in the absence of a
01:22:14
the algorithm is is my honest thought
01:22:16
what do you think jakeob I think this is
01:22:19
um a security risk I've made that clear
01:22:21
here before and I don't think we would
01:22:23
ever allow
01:22:25
Iran North
01:22:26
Korea Russia to run any of these
01:22:29
companies inside of America nor would
01:22:31
they allow us to run Facebook X Etc in
01:22:34
their countries so I think reciprocity
01:22:37
is the key but I am running a little
01:22:39
test right now I posted this video to my
01:22:42
Tik Tok today and uh it's under review
01:22:45
they won't let it publish and the video
01:22:48
is very simple it uh quotes a study from
01:22:51
Reuters you don't have to play it um
01:22:53
I'll explain what I said it but I just
01:22:56
took a video of the reuter study what
01:22:58
this reuter study shows you pull up the
01:22:59
chart there Nick is that in this Rucker
01:23:02
study the CCP is censoring sensitive
01:23:04
topics related to China and so if you
01:23:06
want to understand why the CEO who I
01:23:09
think you may have worked with before
01:23:11
chth at
01:23:13
Facebook the CEO is saying it's a ban
01:23:15
when in fact it's a
01:23:16
divestiture if you want to understand
01:23:19
why they care about this it's because
01:23:21
they want to be able to influence things
01:23:24
in a America they want to have data on
01:23:26
Americans it's spyware that's my
01:23:29
position and it's the most censored
01:23:31
platform I think In America which I know
01:23:34
you feel passionately about saxs so I I
01:23:36
did this uh video and uh just like
01:23:40
covid-19 was blocked on X here in
01:23:43
America in the US if you talked about
01:23:45
Wuhan if you talked about any of these
01:23:47
topics our government banned well if you
01:23:50
talk about Hong Kong if you talk about
01:23:52
Wagers if you talk about
01:23:55
tnm and square your video will not be
01:23:58
posted and in fact my video is held
01:24:00
right now so if you're hearing my voice
01:24:02
right now I'm doing a little experiment
01:24:04
I want everybody to post that chart and
01:24:07
just read the Wikipedia page maybe talk
01:24:10
about tankman talk about the Hong Kong
01:24:12
riots and then use the hashtag don't ban
01:24:14
Tik Tok as a little bit of a a cheeky
01:24:17
way for us all to track each others and
01:24:19
I want to see if a hundred or a thousand
01:24:21
all-in fans post one of these if they
01:24:24
all get banned or if we can see any of
01:24:26
them so we can do a live censorship test
01:24:28
here in America are Americans allowed to
01:24:30
talk about T and square the Hong Kong
01:24:32
riots Wagers or any of those things and
01:24:35
uh you can also um if you want at
01:24:39
mention me I'm mat calanis on Tik Tok
01:24:42
can that's my position on it I wanna I
01:24:44
want to see this thing banned
01:24:45
immediately or divest I would prefer it
01:24:46
be divested one I think people love it
01:24:49
one quick thing I I think what saak said
01:24:51
is really interesting about them then
01:24:53
going after Telegram
01:24:56
the the big issue that I think telegram
01:24:58
has always had is that it is encrypted
01:25:02
but it's it has its own form of
01:25:05
encryption that they rolled themselves
01:25:07
right like typically I think WhatsApp
01:25:08
and a lot of these other folks just use
01:25:10
pretty standard signal I think as well
01:25:12
use sha256 encryption which is like
01:25:14
pretty standard but there is always a
01:25:15
fear that the US
01:25:17
government actually can unencrypt that
01:25:20
and has some kind of a back door that
01:25:22
was always the fear of that SG 256 and
01:25:24
so pav durov and his team basically
01:25:26
rolled his own which is also 256 bit
01:25:29
symmetric encryption but different
01:25:30
standard altogether and what people
01:25:33
would say is hold on he has the back
01:25:35
door to Sax's point so that was always
01:25:36
the claim counter claim between these
01:25:39
things of of why telegram was always
01:25:42
painted in more of a sketchy corner I'm
01:25:44
not saying that it's
01:25:45
true and I think that if they go after
01:25:48
it I think it's because this underlying
01:25:50
encryption model is something that we
01:25:51
can't get access to and so they'd rather
01:25:53
just eliminate to to saxis point all
01:25:56
right I think telegram can stick its
01:25:59
head between its legs and kiss us ass
01:26:01
goodbye because they're they're next on
01:26:03
The Hit List all right we're gonna see
01:26:06
what do you think of my don't t Security
01:26:08
state has has used fears like the one
01:26:10
that Jake kelp explained to get a new
01:26:14
power and it's not a power to ban Tik
01:26:16
Tok it's a power to ban any foreign
01:26:18
controlled app so goodbye telegram what
01:26:21
do what do you think of my don't ban Tik
01:26:23
Tok challenge sex the censorship
01:26:26
challenge yeah I mean fine whatever wow
01:26:30
you're so passionate about it's done
01:26:32
it's over it's over look the the
01:26:35
National Security State gets whatever it
01:26:36
wants it's pretty clear not if we stay
01:26:38
vigilant I mean if we keep talking about
01:26:40
this how did this warrantless spying
01:26:41
thing happen I mean look I think the
01:26:42
warrantless spying is actually worse
01:26:44
than the Tik Tok band me too 100 100
01:26:46
times I how how are they not
01:26:49
requir easy by the way have we have we
01:26:52
eliminated the physic courts entirely we
01:26:54
don't need those anymore either they can
01:26:55
just do whatever they want well I think
01:26:57
we saw have fisa but you don't have to
01:26:58
go to the court to get a warrant they
01:27:00
can just do whatever they want we need
01:27:02
let's take a deep dive on that in in a
01:27:04
future episode because we're running out
01:27:05
of time One More Story to get to yeah
01:27:07
let's let's Deep dive it you know listen
01:27:08
there there's a lot of topics people
01:27:09
want us to talk about and this one I
01:27:11
think people are talking about a whole
01:27:14
bunch it's kind of breaking I I haven't
01:27:16
couldn't find a Wall Street Journal or a
01:27:18
Washington Post covering this but a lot
01:27:19
of people were cover talking about it on
01:27:21
X Biden's 2025 budget includes some
01:27:24
serious capital gains
01:27:27
hikes there are three proposals in the
01:27:29
2025 budget we'll put all the links in
01:27:31
the show notes to increase cap gains
01:27:34
rates as opposed to income cap gains if
01:27:37
all three are passed big if it would
01:27:39
more than double the long-term capital
01:27:41
gains tax to almost
01:27:44
45% important to note this only covers
01:27:46
those making 1 million or more a year
01:27:49
which is like you know less than 1% of
01:27:51
the country way less and so this is
01:27:53
definitely attacks the rich idea here
01:27:56
currently the highest long-term capital
01:27:58
gains rate is 20% Which is really about
01:28:01
24% if you earn more than 200k per year
01:28:03
because you have to pay an extra small
01:28:04
tax if these proposals become law big if
01:28:09
it would create the highest cap gains
01:28:11
rate in 100 years here's the chart this
01:28:15
comes from Americans for tax reform
01:28:17
which was done by a Reagan Era an NGO I
01:28:20
think that was formed by a former Reagan
01:28:23
administration they basically make
01:28:25
politicians sign that they won't
01:28:26
increase taxes the budget also proposes
01:28:29
a 25% unrealized cap gain tax this would
01:28:32
be a tax on total income including
01:28:33
unreeled cap gains for all taxpayers
01:28:35
worth over 100 million okay uh Sachs I
01:28:39
know this is your red meat there's a lot
01:28:40
of pieces here but gosh this is crushing
01:28:43
for those folks who want to vote for
01:28:45
Biden but are moderates because this is
01:28:48
like the number one thing you can do to
01:28:50
stop Innovation and investment in the
01:28:52
country which we desperately need this
01:28:53
is a head scratcher Biden is playing
01:28:55
game of chicken with the tech industry
01:28:57
and with I'd say Suburban voters in
01:29:00
general I mean is this what you want at
01:29:02
some point you're going to have to say
01:29:04
that this is not okay I mean first of
01:29:07
all you've got this 25% unrealized gains
01:29:11
tax which is a wealth tax if you're
01:29:13
somebody who's created a small business
01:29:15
or a family farm or you're a tech found
01:29:17
founder if you get to qualify for the
01:29:21
amount then you've got to pay 25%
01:29:24
and in order to raise the money for that
01:29:27
25% you're going to get taxed on let's
01:29:30
say you try to sell 25% of the company
01:29:32
you're now going to get taxed
01:29:34
45% of that plus 13.3% California so
01:29:38
really you're going to have to sell more
01:29:40
like 40% of the company just to pay off
01:29:42
this unrealized gains tax and by the way
01:29:45
you haven't made a dime yet you haven't
01:29:46
put a dollar in your bank account pure
01:29:49
confiscation that's year One what what
01:29:51
happens the following year the actual
01:29:53
business insane ah this is this is
01:29:56
ridiculous these things will never pass
01:29:57
let me let me tell you I mean so so this
01:30:00
is in Biden's budget for next year and
01:30:02
this idea this is not the first time
01:30:04
we've seen this it was in his original
01:30:06
build back better proposal and the only
01:30:08
reason that failed is because mansion
01:30:10
and Cinema voted against it so mansion
01:30:13
and Cinema are not going to be in the
01:30:14
Senate next year okay they're not
01:30:17
running for reelection so if the
01:30:19
Democrats have the trifecta if Biden
01:30:21
wins reelection and holds on to the sen
01:30:24
and house but without mansion and Cinema
01:30:26
I think you have to price in the strong
01:30:29
possibility that this passes I don't
01:30:31
think you can just shrug it off freeberg
01:30:34
your thoughts well we're talking about
01:30:35
it here we're not shrugging it off this
01:30:36
is like five Al on fire here on X
01:30:39
everybody's talking about it freeberg
01:30:41
your thoughts there was a poll published
01:30:44
yesterday Bloomberg News morning consult
01:30:47
surveyed 4900 registered voters in seven
01:30:50
swing
01:30:51
States and the poll showed that
01:30:55
77% of registered voters in those States
01:30:59
support basically an asset tax on ultra
01:31:03
high net worth people people worth over
01:31:05
hundred million
01:31:06
doar to keep Social Security
01:31:09
intact so I think that's a strong
01:31:12
indication of where things are headed
01:31:14
generally we can debate the tactics and
01:31:16
the Nuance of this election cycle but as
01:31:19
we all have talked about and know Social
01:31:21
Security becomes def facto bankrupt by
01:31:25
2033 perhaps earlier so we have a few
01:31:28
years to figure out whether we cut
01:31:31
Social Security benefits in this country
01:31:33
or find alternative ways to fund it and
01:31:36
it's pretty evident from this poll that
01:31:38
Americans are not in support of raising
01:31:41
the minimum age from 67 to 69 which is
01:31:43
one of the questions in here only
01:31:46
25% of Americans support raising the
01:31:49
minimum age for Social Security from 67
01:31:52
to 69 meanwhile 77% strongly support a
01:31:57
tax on ultra high net worth to fund the
01:32:00
Gap the funding need well yeah I mean
01:32:02
that's a loaded that's a loaded question
01:32:04
because you're basically positioning
01:32:08
this
01:32:09
tax which is really complicated in the
01:32:12
details and the person getting asked the
01:32:13
question doesn't understand it compared
01:32:15
to the most popular program that the
01:32:18
federal government has which is social
01:32:20
security so obviously it's going to pull
01:32:22
that way I mean look can you can ask a
01:32:25
question in a way on a poll to get
01:32:27
whatever answer you want to get to I can
01:32:29
basically prove to you that a majority
01:32:31
of the American public is either for
01:32:33
Ukraine funding or against Ukraine
01:32:35
funding depending on how you ask the
01:32:37
question and look yeah obviously taxing
01:32:41
people with $100 million of paper wealth
01:32:44
is going to be more popular than
01:32:47
sacrificing your Social Security
01:32:48
obviously but that doesn't mean that
01:32:50
this is a good proposal economically at
01:32:52
all no it doesn't and I don't think that
01:32:55
that's what really matters I think most
01:32:57
folks are voting for themselves their
01:32:59
particular needs and the majority of
01:33:01
people need more support and there's not
01:33:05
even going to save Social Security I
01:33:06
mean you know what is this this tax
01:33:09
going to get us it's going to destroy
01:33:10
the startup ecosystem it's not going to
01:33:13
balance the budget we're still spending
01:33:14
way too much for that it doesn't pay
01:33:17
down the debt it doesn't save Social
01:33:19
Security it's just more and more taxes I
01:33:22
think that's the inevitable Trend I'm
01:33:23
just saying I don't know how it's going
01:33:24
to manifest but I think it's inevitable
01:33:26
that we're going to raise federal
01:33:28
revenue through some form of Taxation
01:33:30
that's going to feel deeply
01:33:31
uncomfortable and inappropriate and it's
01:33:34
going to have negative Economic
01:33:36
Consequences and this is where the
01:33:37
economic
01:33:39
spiraling but has talked
01:33:42
abouty actually had a brilliant blog
01:33:45
post about this called all it takes is
01:33:48
all you got and what he pointed out is
01:33:51
he was talking about the Federal feral
01:33:53
government's runaway deficits and debt
01:33:56
and borrowing and somebody responded to
01:33:59
him with this chart that shows assets
01:34:02
versus liabilities this guy Brent who I
01:34:05
guess is a foil on exology sometimes
01:34:09
said oops you only showed one side of
01:34:11
the balance sheet common mistake though
01:34:12
basically saying that bology didn't know
01:34:14
what he was talking about because bology
01:34:16
was only showing the red which is the
01:34:18
government liabilities the government
01:34:20
debt and he showed that well no you have
01:34:22
to include all the green ball bar s but
01:34:24
what are the green bars those are
01:34:25
private assets and bology pointed out
01:34:29
that no actually you're proving my point
01:34:31
because people like you just see all of
01:34:34
the private assets of citizens of the
01:34:36
United States as belonging to the
01:34:38
government yeah and if you actually
01:34:40
extend the red bars to the present value
01:34:43
of all the long-term liabilities that
01:34:45
this government has it's more like 175
01:34:48
billion so you know people like this see
01:34:52
the 11 160 trillion of private wealth as
01:34:56
being on the balance sheet of the
01:34:59
federal government and being used to
01:35:01
offset the 175 trillion of liabilities
01:35:05
in other words all it takes is all you
01:35:08
got that's the trajectory we're on is we
01:35:11
have a your home your 401k is the
01:35:14
governments and we're going to they're
01:35:15
going to go after your they're going to
01:35:16
absolutely go after your retirement
01:35:17
accounts because that's the only way
01:35:19
they're going to pay off these
01:35:19
liabilities it's gross another idea cut
01:35:22
spending
01:35:24
cut spending well there's another
01:35:25
there's another great tweet by a guy who
01:35:26
said laptop mercenary I don't know this
01:35:29
account but he said something funny he
01:35:31
said imagine being a California high
01:35:33
earner options either vote for your own
01:35:36
Financial liquidation or vote for the
01:35:37
orange man yeah it's BR Checkmate dude
01:35:40
Checkmate you guys just got to put on
01:35:42
the red magga hat it's happening uh
01:35:45
here's the I mean I read that I read the
01:35:47
I read that you're uh you're all you
01:35:49
don't you don't have to wear the look
01:35:50
you don't have to wear the red Maga hat
01:35:52
when you go into that polling booth
01:35:53
Nobody Knows the button you're pushing
01:35:55
yeah okay there it is I mean these these
01:35:58
are the two worst candidates in the
01:36:00
history Jason Biden has had Biden has
01:36:04
had four years to prove that he's a
01:36:05
moderate he's had four years to prove
01:36:08
that he represents the normaly that he
01:36:10
promised to us when he first got elected
01:36:13
that's been refuted I mean how much more
01:36:15
does it take for you to understand that
01:36:17
his policy is radical yeah I mean he
01:36:21
combines the foreign policy of Dick
01:36:23
Cheney with the economic policy of
01:36:24
Elizabeth Warren how much more does it
01:36:27
take are you going to vote for your own
01:36:28
Financial liquidation because that's
01:36:30
what we're talking about it's the worst
01:36:32
two candidates and I think I'm voting
01:36:33
for the third oo an RFK endorsement wow
01:36:37
I didn't I didn't see that I think I
01:36:39
just have to put in the protest vote of
01:36:41
RFK or love RFK I think he's a great
01:36:44
vote yeah for Democrats I mean crazy I
01:36:48
think maybe I go after the rock but uh
01:36:50
yeah congratulations on Biden on making
01:36:52
this easy for Trump
01:36:54
with his build back broke plan so dumb
01:36:58
all right everybody this is the world's
01:37:00
greatest podcast by the way Jason if you
01:37:02
do decide in the end to vote for Biden
01:37:04
I'll send you some luxury tents that you
01:37:07
and your kids could sleep
01:37:10
in you can tell them stories about how
01:37:12
you voted for them it's so brutal I mean
01:37:16
the worst two candidates of our lifetime
01:37:18
jcal here here are your choices okay you
01:37:21
can vote for Trump or you can give up
01:37:23
this the uh Ski
01:37:25
Lodge what's it going to be I mean at
01:37:28
this point I think I'm RFK all the way I
01:37:30
think I got to go for just try to
01:37:32
support Independence I just think we got
01:37:34
to balance the budget shout out David
01:37:35
freeberg for the Rainman himself David
01:37:38
saaks yeah David fredberg the Sultan of
01:37:42
science we didn't get the science Corner
01:37:43
this week we're going to start with it
01:37:45
next week and the chairman dictator
01:37:47
chamath
01:37:49
poopaa I am world's greatest moderator
01:37:53
of
01:37:54
the number one podcast in the world I'm
01:37:56
manifesting can we get the Spielberg on
01:37:58
manifesting track in here and take us
01:38:00
out Spielberg young Spielberg baby
01:38:02
coming at you Z 100 love you boys byebye
01:38:05
love you besties welcome everybody to
01:38:07
episode
01:38:08
175 that's right it's
01:38:10
episode7 your favorite
01:38:13
podcast the and mosten the world
01:38:18
official now
01:38:21
and got so many feelings about is that
01:38:23
the largest most listen to podcast in
01:38:25
the world I'm
01:38:27
[Music]
01:38:33
manifesting I'm
01:38:35
[Music]
01:38:51
[Applause]
01:38:54
[Music]
01:39:02
manifest just like there worldest poker
01:39:05
player and then we watch Roo roll over
01:39:07
him is that a new word that nist used
01:39:09
for
01:39:11
lying no it's just like know the world's
01:39:14
greatest poker player and then just so
01:39:15
you know tonight is a murderer's row and
01:39:18
hel youth is flying back you saw the
01:39:19
lineup and now the plugs follow the show
01:39:23
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01:39:36
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01:39:39
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01:39:43
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01:39:54
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01:39:56
at x.com David saxs saaks recently spoke
01:39:59
at the American moment conference it's
01:40:01
his pin tweet on his x.com profile
01:40:04
follow David freedberg the sultant of
01:40:07
science x.com freedberg ohal is hiring
01:40:11
and David freeberg is the CEO you can
01:40:13
click on the careers page at ohal
01:40:15
genetics.com we're hiring a full-time
01:40:18
researcher here we need somebody who can
01:40:20
do data research for us so we're looking
01:40:22
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01:40:24
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01:40:34
podcast.co researcher to apply the
01:40:37
Summit is taking place in September in
01:40:39
Los Angeles again at UCLA summit. Allin
01:40:44
podcast.co I'm Jason kakanis you can
01:40:46
follow me on x.com Jason or search for
01:40:50
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01:40:51
follow my other podcast I'm host ing my
01:40:53
liquidity conference again in Napa on
01:40:55
June 2nd to the 5th only LPS and GPS
01:40:58
come to this event 125 people every year
01:41:01
this year's speakers include Ibrahim
01:41:03
aami from mubadala David freeberg Jamal
01:41:06
PA hatia Gavin Baker Jordan Stein from
01:41:10
Crescent Partners Mo'Nique Woodard from
01:41:12
Cake Ventures I'm an LP my guy peson
01:41:15
from par Ventures and Phil deut my
01:41:18
bestie liquidity pod.com Summit to apply
01:41:22
for one of the a few remaining tickets
01:41:24
we'll see you next time
