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Brad Gersonner's here joining us hot after crashing the stock market and
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popping the AI bubble. Well done, Brad. We're going to get into it. All of our portfolios, thank you. We're
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all down 15% this week. Can we ask OpenAI to just put a moratorum on any more public statements
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or appearances for another couple months? Good. Good job, Brad. You You decided you'd be a podcaster. You're like, "Hey,
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let me ask a couple of hard questions here." And you pop the AI bubble.
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Yeah, sound like a do as I say, not as I do. Are we getting into it? Because I think it is interesting actually.
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Oh, it's super interesting. Super interesting. Let's get So Sam uh um of course if you're not in the industry, Sam Alman appeared on the
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fabulous BG2 podcast last Friday and um it got a
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little frisky when our fifth bestie here asked what I thought was a completely
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totally legitimate you know, mundane question. Hey, you're making 13 billion.
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It's actually a a softball question to be honest. It was an underhanded pitch. The way that it was asked, I think you
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did a very reasonable job of asking a good question in a very fair way. So, let's just show this clip here and then I I want to go behind the pod with
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you, Brad. So, I think the single biggest question I've heard all week and and hanging over
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the market is how, you know, how can a company with 13 billion in revenues make
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1.4 4 trillion of spend commitments, you know, and and and you've heard the
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criticism, Sam. First of all, we're doing well more revenue than that. Second of all, Brad, if you want to sell your shares, I'll
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find you a buyer. I just enough like, you know, people are
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I think there's a lot of people who would love to buy OpenAI shares. I don't I don't think you want, including myself.
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Including myself who talk with a lot of like breathless concern about our comput stuff or
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whatever that would be thrilled to buy shares. So I think we we could sell, you know, your shares or anybody else's to
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some of the people who are making the most noise on Twitter, whatever about this very quickly. We do plan for revenue to grow steeply. Revenue is
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growing steeply. We are taking a forward bet that it's going to continue to go grow. There are not many times that I
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want to be a public company, but one of the rare times it's appealing is when those people are writing these ridiculous OpenAI is about to go out of
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business and you know, whatever. I would love to tell them they could just short the stock and I would love to see them get burned on that. So Brad, um, you
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asked, I think like you know, Jamath and I were just saying the pretty mundane question. You said it very nicely.
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I I guess we could give Sam a little bit of grace. I don't know if he was being a little cheeky or maybe he's tired of
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answering the question, but the internet took this and ran with it in a very
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viral way that he was angry and he was hostile. How did you take it? And and
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that's the interesting thing, right? I mean I mean listen, we bust each other's chops all the time. We get feisty with
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one another. Sometimes it runs a muck. Like we don't know if somebody's being serious or not serious and and you know
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Sam and I had a good laugh after you know I think Sam was he was feisty but I
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think he also intended it as a joke. He knows that I don't want to sell my shares. He knows that I would like to buy more shares in the company etc. But
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I think the reason that it went so viral is because it is a super important
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question. People are really nervous. They're wondering, are we walking in to an AI bubble? Like, how can these huge
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numbers, how can you be talking about 1.4 trillion in spending when you, you know, have kind of gap revenue that's
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been reported to 13 billion this year. So, I was I was a little disappointed and I tweeted about this afterwards that
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kind of the feistiness got in the way of the answer. But if you listen to his words during the rest of the segment,
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he basically said, "Listen, we think we're going to have a h 100red billion in revenues over the course of the next couple years." And you know, Jay Cali
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sent the team a chart that that basically just shows the information's forecast for what OpenAI and Anthropics
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revenues are going to be over the course of the next several years. And like the information is reporting that their internal numbers are both over a
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hundred, you know, billion dollar. This is the information reporting on leaked internal numbers or the
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information is taking a guess. What? No, I think this is I think they report this is on leaked internal numbers
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according to the information. And so, you know, I think Sam's in his
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head saying I believe and he says multiple times on the pod, we're going to have
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revenues in excess of hundred billion dollars and the 1.4 4 trillion. It's super important to remember this is over
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a period of five or six years. I I estimate about half of that spending is
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going to be borne by the partners. So now we're talking $700 billion in spending. Spread that over five or six
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years. In the out years, you're probably talking about $150 billion of capex to
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open AAI. So he's probably, you know, sitting there saying and and he said we're going to have over 100 billion in
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revenue. So if we have 150 billion in revenue and 150 billion in capex now it begins to pencil out a little bit more
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but importantly he said and if we don't have those revenues we've got to match
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our revenues to our expenses right I think they will just extend recut the deals in order to make those expenses
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doable for the company this is an important point because we don't know we haven't seen these actual
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deals and if they have conditions or outs or if they can push it out or they can cancel it maybe you know they they
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have and that will come out I guess in the public filings but putting all that aside the market was not happy about
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this Microsoft Nvidia Oracle Broadcom who all are the partners we're talking
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about who are close to and when you see these charts of all the deals Sam has done and Sam's a great deal maker
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obviously they were all down 6 to 20%. So this has in fact been a significant
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correction in terms of the AI boom. So before we get into their CFO's comments,
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Chimath, um I'd love to hear your just general I think these are I think it's fun to give these guys, but
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they're totally and completely uncorrelated. Okay. Every now and then you have a bad day.
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I've done thousands of hours on TV. I've had a couple of really bad days. You guys have been there.
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Yeah. I suspect that if Sam had to do it over, he wouldn't have said what he said in the way he said it. And even if he was
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joking, he would have practiced it a little bit more and just landed it. So
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what's actually going on? I think right now we are in a period of getting a
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little risk off and rebalancing. Why? There are two sets of things that are
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happening. The first set of things is the market is learning to digest all of
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the capex that has happened and they're all breathlessly trying to build models
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that try to predict what the ROI is of that spend. The second part of that is
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they're trying to figure out how this new spend will actually impact future
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earnings. And this is less to do with Open AI, but it has much more to do with
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the big stalwarts of the Mag 7. Google's earnings were phenomenal. Their AI
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numbers were blazing hot. Facebook's was terrible.
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Apple is now in this really interesting place where it seems like they're going to seed their AI business to Google
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and pay them billions of dollars a year like they get paid billions of dollars a year for search from them. I think that
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that's what's happening. The second part is as you go into year end, there's just a little bit of all in the
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market and people are like, "Let me just consolidate. Let me book some wins. Let me get ready for the new year. Let me
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tax loss harvest. Let me do all the things that people used to wait until mid December." And now they are smart
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enough to know that mid December the price action is. And so now this price action starts in mid November.
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So I wouldn't pin this on all Brad and Sam. I just think this is natural market machinations. But to be
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clear, we are very much getting into a phase of riskoff. Yeah. And this got exacerbated Sachs
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because on Wednesday, uh, OpenAI decided to be in the news again when their CFO
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Sarah Frier told the Wall Street Journal she hopes the US government, that's you Saxs, will backs stop financing of its
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1.4 trillion in data centers. Here's a direct quote. the backs stop, the
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guarantee that allows the financing to happen. And she said that the federal
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guarantees would quote really drop the cost of financing. Of course, it would.
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And this would allow OpenAI to borrow more money at lower rates from a much larger pool of lenders. that went viral
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and everybody said, "Oh my god, it started feeding I think the narrative that maybe OpenAI is insolvent in fact
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and there's no way for them to pay their bills, which obviously is a little bit ridiculous
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and people are trying to correlate this to obviously the dotcom bust and then
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the great financial uh crisis. But on Wednesday night, Frier walked back her
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comments. I want to clarify my comments. OpenAI is not seeking a government backs stop for our infrastructure commitments.
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I used the word quote backs stop and it muddied the point. I was making the point that American strength and
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technology will come for building real industrial capacity which requires the private sector and government playing their part. And uh she also said that
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OpenAI was on pace to generate 13 billion. I'll get to you on this one Brad because he took offense to the 13
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billion revenue number and disputed that. So we'll see if there's some clarity there. But uh Sax, you came over
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the top and tweeted that there will be no federal bailout. There's plenty of
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people available to pick up the mantle if Open AI needed
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a bailout. You got five major frontier model companies. Gro, Claude, Gemini, plenty of them. So Sax, you came
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in. Daddy's home and you settled it. Daddy came home. Everybody has to sit
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down in the kitchen and explain what's going on. Take us through um you know
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how you think about this as our zar of Well, this morning my entire feed was full of comments by people analysts,
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consumers, business people, and politicians saying that we can't allow Open AI to have a
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federal bailout. And I think they were kind of connecting Sam's original comments or prickliness to what Brad
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talked about like, hey, do they have the money? Can they justify this with Frier's comments that they need a backs
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stop to say, hey, this company's not solvent. It's going out of business and they're demanding a federal bailout. So, I think that's kind of how the pieces
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got put together. And what I said is, look, there's not going to be a federal bailout for AI. Not going to happen. We
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have five major frontier model companies right now, and there are new companies
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being formed all the time. And if one of them fails, hey, it's going to go out of business and the other ones are going to
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replace it. So, nobody is talking about a bailout. In fact, I would say that the AI sector is maybe one of the
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healthiest, meaning most competitive sectors of the entire American economy right now. To the extent that you just
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love ruthless competition driving innovation, that's what we have right now. So, if one of these companies gets
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over its skis and ends up going bankrupt, the chips are going to fall where they may. And I've never heard
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anyone serious disputing that fact. Now, I also made the point, which I think is
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important, that to give OpenAI the benefit of the doubt, I don't think anyone at OpenAI was asking for a
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bailout. If you watch the video with Sarah Frier, she's clearly searching for the right word to describe what she's
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trying to say, and then she settles on a word that she now regrets, which is backs stop. Definitely not the right word. So, I don't think they are asking
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for a bailout. I don't know what she meant by backs stop. Doesn't make sense. So, I think this is a little bit of a
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tempest in a teapot. What I think is important and I think maybe where she
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was going is that I do think that we want to make it easier to build infrastructure in this country and that
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means making permitting easier, making power generation easier. That's all about regulatory reform. And I think
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that the goal here is to enable a rapid infrastructure build out without increasing residential rates for
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electricity, which nobody wants. And that's in the process of potentially creating a little bit of a nimi backlash
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is when local communities fear that their electricity rates are going to go up because someone wants to build a data center. That's the thing we have to
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combat. But the way that you solve that problem is by making it easier for these AI companies to stand up their own power
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generation behind the meter. And that requires regulatory reform. That's what the president has called for is allowing
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the AI companies to do behind the meter. So no one's talking about bailout. Nobody's talking about backs stop. We
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are talking about making making permitting easier and making it easier to do buildout. So build out not
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bailout. Yes. Should be our motto here. Build out not bailout. Now there was a
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little bit of sort of reading the tea leaves. There have been times when loans were given to incentivize an industry.
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So I just want to be clear with you. There's no discussions of like Celindra, you know, type loans.
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Nobody's discussed any of that with me. So, it's not even on the radar, I would say, from the government standpoint.
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And why would it be if there's so many people trying to pour capitalist capital into this, Brad, and there's so many
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people trying to buy your shares in a company making $1 billion that's currently valued at 500 billion, which I
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think is like a 30 to 40 price to sales ratio. I mean, this company is fully valued and people are still trying to
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buy the shares. So, Brad, wrap us up here. Yeah. Yeah. I think I was brilliantly said by David. Listen, it's a national
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imperative that we accelerate the buildout of AI infrastructure across the country. I've said before the $4
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trillion that Jensen Hang has estimated will be built out over the next 5 years
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is 10 times the size of the Manhattan project that was totally federally funded. Okay? And this is all being
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privately funded. But it wouldn't be possible without the government, Secretary Wright, others Bergam etc.
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clearing out of the way the regulatory hurdles we you know you heard on the pod
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same pod that power is really the gating issue here and so it's been amazing to
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see what the federal government is doing I think that's what Sarah was trying to get to that they need to be have a
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public private partnership they're going to do their job raise their money back stop was not the right choice of words
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but they uh I know and I talked to Sarah this morning about this are deeply grateful for what the federal government
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is doing to accelerate the buildout of power and infrastructure and the federal
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government can do that without taking risk on their own balance sheet. In fact, we've seen some of the investments they've made as a result of the Japanese
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deal they got on tariffs. They can reinvest those dollars to accelerate some of the nuclear buildout, etc.
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By the way, Sam just posted something about 15 minutes ago. And he was pretty authoritative in
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addressing the three critical questions. The first thing he says is that we will
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we meaning open AAI will end the year on a $20 billion forward run rate which means December revenue will be 1.666
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billion at least. So we kind of know where the revenue is
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going from 1.2 to 1.6 over these next few months which is a pretty staggering growth rate if they were at 13 and
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they're going to end at 20. And then he goes and addresses the whole too big to fail and whether they want government
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sponsorship. and he's he's pretty unequivocal here. So, I think this is a tempest in a deep. I
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think people are people are on pins and needles. They're agitated. Some people have had no gains. Other people have had
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incredible gains. Everybody's agitated. I think we Well said. We are getting in the
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riskoff phase for at least two or three months. We will be back firmly in riskon mode in February is my suspicion. But
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these next few months, I think people will overblow every random little thing. Well, and in fairness, you know, $1.4
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trillion is a very large number. I mean, this is a number we've never seen one company say they're going to do a build
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out of. Okay. Well, can I take the other side of this? If it is, if I was the US government, to the
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extent that we are doing public private partnerships, if there is a way for us taxpayers to own a piece of open AI, I
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would say great. I mean, so Brad, will you sell your shares to the Trump? So,
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hold on. So, before everybody breathlessly complains, whether you see it or not,
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there is an enormous sovereign wealth fund that is being built by President
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Trump and it is for the benefit of all American taxpayers. And so to the extent
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the people in government could underwrite an investment structure like they have
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done in things like MP materials which is way up, things like Intel which is way up. These guys are like really good
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smart people. Mike Grimes, Dave Shapiro, Steven Fineberg and his team at DoD.
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They're cutting hard deals, tough deals. So I don't know if they did do a deal with OpenAI, I think they'd probably get
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the best of it. and the American taxpayer would win. And I wouldn't be angry at that.
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I think I think as you see from Sam's tweet, they're not looking for the government to invest. They're not looking for a government bailout. What
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they are doing, and I think David said it well, is they're pushing us very hard
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as a matter of national security and economic growth to go faster, to accelerate, to build out infrastructure.
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And to give a little credit where credit is due, right? All of this buildout,
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right? All of the Stargate stuff that people were laughing about 18 months ago, thank God as an American citizen
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that we are running this fast. China has a 100 nuclear fision plants under construction and we were sitting on our
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hands. So, I think if anything, they've helped jumpstart that conversation and get us moving faster and I think that's
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good for all of us. Great segue, Brad. Thank you. Jensen told the FT straight
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up, quote, "China is going to win the AI race." His argument uh is that US
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state-by-state regulations and power constraints are making it harder for US AI companies. As we've discussed here
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countless times, whereas the CCP is obviously in just making it super affordable to run all
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those GPUs. Nvidia put out the following statement from him. As I have long said, China is
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nanosconds behind America in AI. It's vital that America wins by racing ahead and winning developers worldwide.
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Obviously, he's 100% right. He's 100% right. I don't know if you guys saw, but Cursor
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2.0 launched this week. My team at 8090 use it. It's an
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incredible product. Guess what they did? They swapped out Anthropic for an open source Chinese model. Yep.
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Do you know what they're using? Is it like Kimmy or what is it? I think it's Quen. I think they're using a spin of Quen. Yeah.
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To be clear, they're cleansing these Chinese open source models, but they are I don't know about Cursor, but there are
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a lot of companies. Yes. and then running them, setting them up themselves. Obviously, my point is we are right now running
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with one hand tied behind our back. We are going to have to deal with 50
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different sets of legislation from state legislators who think they know what AI
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is. They don't. Sax knows. So, there should be a federal framework and that
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should be it. And then meanwhile, the Chinese open source models get better and better and better and better.
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And so we're making technology decisions that tie our wagons to that steel thread. And so Jensen is right. We need
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to clean this up quickly. I was a little bit disappointed to see I thought it was reasonable for certain
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politicians, especially Republican ones, to say, "Look, there's not going to be a federal bailout for AI. Great. We all
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agree. No one's asking for it." But I was a little disappointed to see that some of them were associating a bailout
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with a single federal framework as opposed to the patchwork of 50 state regulatory regimes. Because if
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Republican governors think that they're the ones who are going to be writing the rules, they're sorely mistaken about this. 25% of the bills going through
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state legislatores are in four states. California, New York, Colorado, and Illinois. In other words, the biggest
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blue states. Those also happen to be the states where these big AI companies are
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all headquartered with the one exception of XAI which is in Texas. But these
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companies are in California. The blue states have the most market power and if they end up creating the regulations, I
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just think it's naive to think that the AI companies won't write their models to
00:21:00
those regulations of the blue states. I don't think that red states are somehow going to find themselves exempted from
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the blue state regulations that are being imposed. And I've talked about on a previous podcast how what the blue
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states are going for here is to reinsert DEI into AI models to achieve
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ideological capture. And the way they do this, they don't say we're requiring DEI. They say that we're prohibiting
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algorithmic discrimination, which means that the model says something bad about a protected group. You end up with the same end result, which is again
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ideological capture. I think all Republicans should be opposed to this. There's only one way to stop it, which
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is with federal preeemption. Otherwise, the states will do what they want and the blue states will basically dominate.
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Now, I think that part of what's going on here is that Republicans have muscle memory around what happened during the
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Biden years. And what happened during the Biden years is that the Biden administration pushed for censorship and
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shadow banning and deplatforming, all that kind of stuff. They were working very closely with the big tech companies
00:22:00
to push the censorship agenda. The only push back that Republicans were able to achieve was at the state level. And so
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you had cases like Biden v. Missouri where we had Senator Eric Schmidt was on the pod talking about that when he was
00:22:13
attorney general. And so he was able to make a states rights argument to push back on the Biden censorship. So I think
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that Republicans remember that and they think, well, states rights is our
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solution. But now we have a completely different situation. I mean, the board's been completely reversed where
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Republicans are in power in Washington and the states are making a bunch of bad decisions with respect to AI. And so I
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think that to be honest, I think we need to kind of just realize that. And I think the arguments that make the most
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sense right now are the commerce clause arguments where look, the Constitution wants to create a single national market
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for interstate commerce. AI clearly qualifies and let's give President Trump, not Gavin Newsome or JB Pritsker
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or Kathy Hokll or Jared Polus, the ability to write the rules. Let's have a single federal framework that will
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prevent ideological capture of AI, keep it unbiased, which every conservative
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should want. I'll just reiterate again, if you want to see the impact of having a state set of regulations
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that basically munge a market up, just go and use your favorite AI tool and ask
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what happened when California passed carb, which are the emission standards
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that forced the entire American US auto industry to have two sets of cars, one for California and one for the rest of
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the market. And what did it do? It completely flipped demand upside down on its head. And it has made it very
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difficult for the auto industry to be sustainable. And I think if you apply that same idea across four states
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instead of just one across the most important technological revolution we've had, I just don't think it's going to be
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a good outcome. The stale manif we got rid of smog in California and
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that it did an amazing job in terms of getting rid of pollution which also
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matters. And I'm trying to think of the steel man. Are you sure that that's the steel man that you've come up with or do
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you think that the tax credits did that? Um,
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do you think making two of everything was the way that solved smog or do you think the $7500 federal tax credit solve
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smog? Well, no, but the smog regulations predated the EV ones. Those have been going on for decades. So, it did get rid
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of smog. So, you know, putting uh better um using cleaner gas and then having
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better exhausts on those cars. That would be the steelman of it. I'm not saying I'm for or against state
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regulations, but Sachs, have you heard any aside from the the federalism argument,
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states rights, have you heard any great defense of states having some say in how
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AI is deployed in their communities? Well, they can have some say there.
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There's definitely areas where you don't preempt. I mean, you have to decide how wide the the preeemption is. But when it
00:25:04
comes to things like notifications about model safety instance, things like that,
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it doesn't make sense to have model companies needing to report to 50 different states, 50 different agencies
00:25:14
within those states, each with a different definition of what needs to be reported, each with different reporting deadlines. Like, why would you have
00:25:21
that? It doesn't make any sense. Why would you allow the big blue states to
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essentially insert DEI into the models which will affect the red states too? You're not going to be able to keep that
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out. I mean, if California pushes algorithmic discrimination, you know, Florida and Texas and Arkansas are going
00:25:38
to be affected as well. So, I think we need to use the opportunity we have right now by the fact that we have a
00:25:44
majority in Washington to set a sensible federal standard that preempts the
00:25:49
excesses of the blue states. And look, the constitutional arguments you can make either way. I personally believe in
00:25:55
the commerce clause, but I think when it comes to the merits of the policy argument, we should let Donald Trump write these rules. Let me just say one
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other thing. Part of what's going on here on the right is that there's so much anger towards the big tech
00:26:07
companies for what happened during the Biden years with censorship and deplatforming that I think there's just
00:26:12
this knee-jerk reaction where we don't want to do anything to help the tech companies. We just want to hurt them. And I think we just have to have a more
00:26:19
nuanced approach than that because the question is what will the result be? Look, no one was more critical of the
00:26:24
big tech companies engaging in censorship in Silicon Valley than me when Donald Trump was kicked off every
00:26:31
big tech platform. I think I was literally the only person in Silicon Valley who was publicly objecting to
00:26:36
that on this podcast. So, I'm perfectly willing to criticize the big tech companies when they make a mistake. But
00:26:43
when they're engaging in healthy competition and innovation and we want
00:26:49
to prevent ideological capture and that's what we're talking about. Let's make sure it ends up in the right place,
00:26:54
not just engage in this knee-jerk anti-tech reaction which will play into
00:26:59
the hands of the blue state governors. We're in this race to win uh AI globally
00:27:06
and one of the major concerns I have is that AI is becoming deeply unpopular in
00:27:11
America, right? Silicon Valley is losing the battle around AI. Doomers are now
00:27:17
scaring people about jobs. They think all these job cuts that are going on in America are the result of AI. And number two, they're seeing their electric bills
00:27:23
go up and they think that's also the result of AI. I've talked with a lot of Republican senator and House members who
00:27:29
say they are afraid to mention the words AI because their popularity ratings go down. We need to get on the other side
00:27:36
of that because that is a losing proposition for America. If what takes hold here is that, you know, it's
00:27:43
politically popular, right, to push back against AI, then David, I think that's what you're seeing at these state levels
00:27:49
with Republican governors as well. And so, you know, I think both of those are false narratives,
00:27:55
but we need to get on the other side. In China, they're not going to slow down. So, if we do an own goal here and slow
00:28:01
down because we think somehow that this is the the the path to greater economic growth, it's going to be a real problem.
00:28:07
both national security as well as economic security 3 five years down the line. Yeah. Can I build on that actually? So
00:28:13
in terms of the public discourse, it's true that the doomer narratives have had this tremendous effect that you can see in the poll numbers and then the
00:28:19
politicians feel like they can basically play into that in one way or another. But where do these narratives come from?
00:28:26
Three big tech billionaires who are on the left contributed over a billion dollars to these doomer think tanks.
00:28:33
basically was Dustin Moskovitz, Yan Talon and Vitalic Buterine. And from open philanthropy and from some of these
00:28:40
other entities, they have spun up hundreds of these astrourfed organizations that are spending
00:28:45
literally hundreds of millions of dollars to spread these doomer narratives. A writer named Nerret Weissplat on Substack has basically
00:28:52
broken down how this all works. It's actually a great article I'll put on the screen. So, people need to understand
00:28:59
that these narratives are coming from somewhere. They're astroturfed. I don't think they're true and the narratives
00:29:05
are contradictory. So, let me give you an example. Right now, the two biggest narratives that we're seeing on social
00:29:10
media and in mainstream media are number one, the idea that there's a huge AI bubble right now. In other words, it's
00:29:16
all totally fake. The other biggest narrative is that AI is on the verge of super intelligence and we're all going
00:29:22
to get replaced. Also fake, right? In other words, AI is completely real and super powerful. Well, these two
00:29:27
things are contradictory. If it's a bubble, it's not going to be on the verge of super intelligence. And if AI
00:29:32
is really that powerful, then obviously on some level this economic activity is justified. So these narratives are
00:29:39
completely contradictory. I think that it's possible to believe in neither one of them, which is where I'm at. But it
00:29:46
makes no sense for people to believe in both. And you literally have the same people on social media and in mainstream
00:29:51
media pushing both of these dumer narratives. So I think we need to increase somehow
00:29:56
our immune defenses or our antibodies. We need to improve our antibodies to I think these memes that
00:30:03
are being pushed out by groups that have these weird doomer ideologies like
00:30:09
effective altruism and they literally just want progress to stop on AI. And if
00:30:16
we do that, like Brad's saying, China will end up winning this AI race. Progress in AI is not going to stop. It'll just all be in China.
00:30:22
Brad, let's talk brass tax uh before we move on to our next topic about Chat GPT
00:30:27
and their revenue. If they're at 20 billion in revenue run rate, I think it's pretty well known their majority of
00:30:35
their revenue is consumer. 7 uh 5% is the number I heard. You can tell me if
00:30:41
that aligns with your estimates as well. And uh cost 20 bucks a month, 240 a
00:30:46
year. That's about 60 million paid subscriptions a year. And then on the
00:30:52
other side, you got Anthropic, which is kind of got the opposite, right? They're they're mostly APIs. And do those
00:30:58
roughly correlate with what you know, Brad? Well, I I would just say they correlate
00:31:03
with what the information is reported as leaked, you know, data from from both companies and and that makes them both
00:31:09
the fastest growing companies in the history of Silicon Valley. Let's just be clear, but specifically the 75% coming from
00:31:14
consumer from open AI. Yeah. More I think I think it's well known more comes from consumer and open AI and and more comes from enterprise at
00:31:20
and two challenging questions for you since you have a big bet here. Google, Apple make these products free. They
00:31:28
have pretty robust ad networks. That's a massive headwind. And then on top of that, in the startup community, we just
00:31:34
talked about cursor. People are not trusting Open AI and their API anymore
00:31:39
because they know OpenAI is creating competing services. And so there is a big movement in the startup community to
00:31:46
not use Open AI's API products. How confident are you that with those two
00:31:52
headwinds, free for consumers and better products, right? Gemini is a great
00:31:57
product, Rock's a great product, Claude's a great product. A lot of great product out there, and I don't think consumers can tell the difference. Why
00:32:03
would they pay 240 if they can get it for free from Google? And then second, startups are realizing, hey, Sam has to
00:32:10
make a lot of money. Therefore, he's going to do what Microsoft did. There was a company called Lotus 123. There's
00:32:16
a company called Word Perfect that were on the Microsoft platform, Windows, and then Microsoft killed them. People right
00:32:22
now are experiencing that from OpenAI. How concerned are you about the revenue growth? Yeah, I mean, listen, I'm betting in the
00:32:29
super cycle. This is the biggest super cycle of all of our lives. I'm an investor in OpenAI and Anthropic and
00:32:34
Google and and Microsoft and Nvidia, etc. And so, I don't think you have to make the call right now, one of these
00:32:41
uh, you know, companies winning. The fact of the matter, as Sax said, we have one of the most vibrant and competitive
00:32:47
ecosystems of in AI in the world. I love the fact that Sundar is coming off the mat swinging. I think Gemini 3 is going
00:32:54
to be great at Google. They may in fact make it free. I think Apple I love seeing Apple pay Google to, you know,
00:33:01
make Siri better. I think that's going to be a great consumer experience. And the only way that OpenAI wins is they
00:33:06
got to build a product that we all love. You've seen those cohort curves. The reality is they are the verb at the
00:33:12
moment. It's theirs to lose in consumer. The cohort curves are things of dreams, right? This is the retention rate, the
00:33:19
engagement rate as people stay with the service longer. And then by the way, anthropics numbers, despite cursor doing
00:33:26
some of their own thing, anthropics numbers are off the charts. I think that this market is as big or bigger than
00:33:33
current estimates are out there, but it's not going to be a straight line up and to the right. We're going to have these moments as Chama said of riskoff
00:33:39
panic just as we did with internet just as we did with mobile just as we did with cloud. The key here is as an
00:33:46
investor is conviction. There is a massive conviction tax to be paid. Right? If you lack conviction and sell
00:33:53
when these things are down, I'm going to bet on the super cycle. But I'm betting over a much longer period of time than most people. And the the amongst the
00:34:00
startups out there, they basically believe Claude is not trying to take their business. and Quad has been very
00:34:06
careful to say, "Hey, we're not going to encroach into the application layer." So, all right. Um, yeah.
00:34:11
By the way, the most impressive revenue chart when you showed that leak from OpenAI
00:34:17
was Anthropic. If that revenue chart is real, what's really impressive is anthropic is not really in a J curve at
00:34:24
all. and they get to very similar points of
00:34:30
free cash flow but will not have burned through near as much capital to get there. That's my singularly interesting
00:34:37
observation about this chart. Can can I say again those numbers are if it's real as reported by the
00:34:43
information but but what I would say about that is this. I've been forecasting companies for 25
00:34:49
years. I know the numbers today. Sam just told us 20 billion dollar run rate
00:34:54
end of the year for open AI. Everybody who is forecasting three years out on these companies is totally
00:35:01
guessing, right? Like that's why I said time is on your side if you're betting over a five
00:35:07
to 10 year horizon. But if you think with precision that the company itself can forecast what's going to be
00:35:13
happening in three years, I think you're misleading yourself, right? So we'll see. I think it's going to be a lot
00:35:18
bigger. could be even bigger than those numbers. But, you know, those forecasts are highly uncertain because the rate of
00:35:24
growth has never been seen before. How do you think about expenses then because you're going to have to have some sense of whether this spend is
00:35:31
accurate or reasonable. I think you have to build in an expense structure that has the flexibility so if
00:35:36
the numbers don't show up that you have the ability to extend your, you know, your obligation. So, that's why I was
00:35:42
saying I don't think this 1.4 4 trillion. I think it's kind of this the red herring out there. I think it's kind
00:35:49
of a fake madeup number. It's all of the obligations of all of the deals that have been announced. And the the truth
00:35:55
of the matter is only a portion of that is born by OpenAI. And I'm certain there's flexibility in all of those
00:36:00
deals to match the expenses with the revenue side. But listen, let's deal the
00:36:05
opposite case, Chima. Let's just say that all of these revenues start flatlining uh for Anthropic, for X, for,
00:36:12
you know, for Google. people aren't willing to pay for these products, then our then our capex buildout for AI is going to be a lot slower because at the
00:36:19
end of the day, there's got to be somebody either in the enterprise or a consumer willing to pay real money to
00:36:25
pay back all of this infrastructure buildout or it doesn't happen. Well said. And um hey, just a quick plug
00:36:31
here. We're going to have an amazing holiday party. Come spend another Christmas with your besties at the AllIn
00:36:39
Extravaganza with Kill Tony. Yeah. Thank you. You got the announcement. We're burning it down this
00:36:46
year. Joining us on stage, it's going to be a show. The host of Gil Tony is going
00:36:52
to mercilessly roast everyone in Silicon Valley and the besties. Tony Hingcliffe
00:36:58
is coming to the Bay Area. We're going to have the same great stuff we always do. Casino nights, poker, DJs, open bar,
00:37:06
food, cocktails. You guys have the courage to go up there and do a little set. I'm going to do a set. That's what we're going to do. It's
00:37:12
going to be the four of us. People are going to come up and do a set. We're going to roast each other. It's going to be absolutely brutal and fun. So, uh,
00:37:20
you can I'm gonna have to bring in some firepower. I'm going to have to bring in my Oh, I know exactly what you're doing. You're calling Kevin Hart, aren't you?
00:37:27
That's fine. I'm going to get Chappelle. I got a I I got a way to get to Chappelle. So, uh, I'm going to get my
00:37:34
own writing team going. You guys were all there. I mean, that threw a birthday party for me. What was it? Five years ago?
00:37:39
Yeah. three, four years ago and Kevin and Sky and Diego, they all flew up from LA. Al Roble, we all did speeches. Sax
00:37:46
did a great roast. Jal did one. Freeberg did one. Nat did an incredible one. And
00:37:54
then Kevin just adlibs and destroyed everyone. Singularly destroyed everybody in the
00:38:02
room one by one. was about. She said, "I'm going to do a quick tight
00:38:09
five minutes on Europe, which is a so small and pathetic."
00:38:15
And so go to allin.com/events and you get to come make jokes about
00:38:20
Shimat's tiny penis. Join us for the allin spectacular. That's worth the
00:38:25
price of admission alone. allin.com/events. It's going to be off the chain. If you
00:38:32
want to do something fun, you know, it's hard to throw a holiday party. Why not buy 20 tickets? You bring your whole
00:38:37
company and you can buy a group ticket, individual tickets available, group tickets available, and uh you know, you
00:38:44
get your your logo on the step and repeat. All kinds of great stuff. Outsource your holiday party to us.
00:38:49
We'll make it better. Okay, I'll I'll do that at 8090. I'll get 8090. Uh you know, just outsource
00:38:55
it. Sachs, you could outsource it for your 370 domestic staff. They can all
00:39:00
come and give you the All right, listen. We got to talk about markets. We got Brad here, our fifth bestie.
00:39:07
Stock market uh pulling back as Chimath just said. Hey, we're going to be risk off. And we have been getting a lot of
00:39:14
data, a lot of hand ringing going on, Brad. Uh GDP growth. Hey, maybe that's
00:39:20
mostly due to AI. The unemployment rates ticking up, inflation's ticking up.
00:39:25
Lots of concerning signs. Help us make sense of this, Brad. I think it, you know, Chimat teed this up perfectly,
00:39:31
which is, you know, let let's rewind the clock a little bit to April of this year. I think on an intraday basis, the
00:39:38
NASDAQ was down 20% year to date in April. We're now up 20%.
00:39:44
So, a 40% move higher in a few months. Same with the S&P. I think it was down
00:39:49
over 10%, now it's up 14% on the year. So, we've had some pretty massive moves.
00:39:54
And I think you have to, you know, reflect on where we are, you know, and we used to do this on on on market
00:40:01
checks when I was on and you used to say, you know, where is altimter? And so early in the year when we're worried
00:40:06
about tariffs, al alttimeter was positioned small, right? By May, we
00:40:12
thought they would land the plane with the best consensus, you know, uh, on trade. We'd get the big beautiful bill
00:40:18
passed and we went to kind of extra large positioning and we've been there most of the year. And so now we're back
00:40:24
to kind of Chimathat just nailed it. You know, we're back to kind of medium medium small positioning in the market.
00:40:29
And I'll I'll walk through a couple slides as to the reasoning for that. Maybe we can kick it around a little bit. The first one is just there's
00:40:35
growing signs um you know, the consumer is pulling back. And you know, you heard
00:40:40
it out of uh Chipotle, you heard it out of Cava, you heard it out of NCO, you heard it out of JetBlue. And and you
00:40:47
know, the the nature of it is we have this two-tier economy. The low-end consumer is faltering. The higherend
00:40:52
consumer is hanging in there. But the consumer thing is making people nervous. Now, uh compounding that is US credit
00:40:58
card delinquencies are now uh uh back to two, you know, 2009 levels,
00:41:04
right? And so you have okay, consumer cracking a little bit, delinquencies, you know, and now we're seeing regional
00:41:11
banks roll over, etc. We're seeing the credit markets beginning to crack a little bit, credit spreads blowing out a
00:41:17
little bit. And then if you go to this next slide, you know, this goes to what Sachs has has talked a lot about on this
00:41:22
pod that we're still in highly restrictive territory. When you look at the 10-year tips, you know, uh the Fed
00:41:29
is still, you know, got the market tight because they're seeing, you know, the market at all-time highs. They're seeing
00:41:35
AI stocks rip, but under the surface, I think there's a lot of concern and question about what's going on. The good
00:41:41
news about this is we still have firepower. So what's gone on in this earnings season you know this next slide
00:41:48
basically earnings have come in really strong you know so we have 70% of companies that are beating they're
00:41:54
beating by wide margins you know in earnings but if you look at the forecast you know
00:42:02
basically earnings have come in about 11% higher than last year and the stocks
00:42:08
are up about 13 or 14% but the real question is as we roll into next year and So, you know, Scott Besson on the
00:42:15
one hand is saying, "Listen, in Q1, we're going to have some big tax refunds because of no tax on tips, no tax on
00:42:22
overtime, and he thinks that'll give it a boost." But clearly, you hear them pounding the table that we need to get
00:42:28
rates down. I tend to agree the low-end consumer who pays a lot on their credit cards, on their car loan, etc., is
00:42:35
clearly hurting. We see these layoffs, these layoffs are are hurting some of these people as well. And so when you
00:42:42
look at the multiples of the market, how do we look at it from an alttimeter perspective? We still believe that
00:42:49
owning all of compute like we have for 3 years and a this AI trade has room to
00:42:54
run, but there obviously multiples have come up a lot. I talked about a 40% move from the bottom this year. And so you
00:43:01
can just take your position size and make it a little bit smaller. So in the world of less or more, I think Chamas
00:43:06
exactly right. there's a pause as we head in over the course of the next couple months reflected by the stuff
00:43:12
that we're doing, but I do think the economy is set up as we head into next year. There's been a
00:43:18
total decoupling. Yeah, it used to be the case that as goes Main Street, so goes Wall Street or
00:43:23
vice versa. The unfortunate reality is that there's a handful of companies that have bids that are, as you said, totally
00:43:31
speculative and well into the future, but they are so well bid and they're so highly valued that they drag the entire
00:43:38
indices forward. Even though underneath the waterline, you're leaving 493 companies behind. And the reality is
00:43:44
that those companies that more accurately reflect what's happening to middle inome America
00:43:50
are not doing so well. And so we need to find some visible wins
00:43:57
in the domestic policy arena. I think that that's what we need now because if you think of each year of a presidency
00:44:04
as an act in three parts, I think act one was tariffs. I think act two has
00:44:10
been foreign policy. And now it's an opportunity for act three to refocus on
00:44:17
domestic earnings and the domestic wealth effect of middle inome Americans.
00:44:22
I think that's what has to happen. And there's a lot of clever ways by the way that we can do this. I I've mentioned
00:44:29
this before, but I think the really interesting opportunity for us is to use
00:44:36
the money that's been committed by all of these countries as part of their trade negotiations. It's like if you add
00:44:41
up the money that was committed from Japan to South Korea to the Middle
00:44:46
Eastern countries, you're talking trillions of dollars. I think it's like 3.2 trillion is the number. So, it's an
00:44:53
enormous amount of capital that can improve the state of earnings of the
00:44:59
middle class. And I think we need to figure out a way to more aggressively put that money to work. Now, I think
00:45:04
that that's that's what needs to happen. I think if you look at some of these other markets, it's really incredible. Bitcoin is about to break through a
00:45:11
100,000 to the downside which I think is a psychological barrier that probably
00:45:17
has another five or 10% more to run. There's a dispersion happening in the MAG 7 as of this past quarter earnings.
00:45:23
So I think all of it has to get sorted out. You nailed it. 29 days ago I talked to you guys a little bit about the net
00:45:29
approval rating here and how the country is feeling. And you can see Trump's net approval rating 9.4. We're going to get
00:45:36
into the election as well because it dovetales really nicely with this discussion. Um, it's gotten worse.
00:45:41
Here's the numbers from November. It's gotten 30% worse. Now Trump's down 13%.
00:45:47
I attribute it, I think, to the fact that we've had all this layoff news. Inflation ticked up to 3%, everybody
00:45:53
knows it was down at 2.3. We had made great progress on it, but now it went back up. And there's a lot of survey
00:45:59
data going on right now. And I think if you look at this next chart, it's super
00:46:04
interesting. What gets all the press is the foreign policy, right? We're talking about wars ending and great job in the
00:46:11
Middle East uh for Trump and Jared and the and the team. Border security, immigration, of course, a big win in
00:46:18
terms of shutting the border. Bit controversial on ICE, but uh that's my personal stuff, so I'll leave it out here and we'll just talk about brass
00:46:24
tax. If you look at where the country feels Trump has fallen
00:46:29
short, it's where he's strongest or where he was elected for being so
00:46:34
strong. Look at these last three here, Chimath. The economy, 63% believe Trump has fallen short. Uh looking out for the
00:46:42
middle class, this is the one that should be the most disturbing. 65% of the country believes he's fallen short
00:46:47
and inflation and the cost of living, 66%. If you look at this next chart, this one
00:46:53
has been trending online and I've been talking about unemployment and I've been attributing it to AI. I
00:46:59
know some people think I'm crying wolf here or I'm the boy who cried wolf, but the statistics are starting to trend
00:47:05
towards my position, I believe. And if you look at people who are aged 20 to 24, they're at 9.2% unemployment and it
00:47:13
is spiking. Why is it spiking? I can tell you from the front lines uh you know hiring young people and being at
00:47:19
startups with young people in them and talking to them about their contemporaries
00:47:26
as companies cut and they use AI to solve problems they're saying hiring
00:47:31
young people and training them is not as rewarding or efficient as training an AI
00:47:38
to do the same task and why do you keep thinking it's AI even the Amazon cuts Andy Jasse on the
00:47:45
earnings call said this is not AI, this is us digesting all this hiring through
00:47:50
ZER and DEI. Yeah, I can answer that. Yeah, for sure he uh he did say that. He did also say
00:47:55
in his memo before that that he thought there would be a lot of changes because of AI and they had the leak memo that
00:48:01
they would not be hiring those. But I'm talking here specifically about youth people. And so I'll I'll take Jasse at
00:48:06
his word. Those 30,000 people are just redundancies. But what I'm seeing on the ground because I work with startups and
00:48:13
I work with young folks who are in them, their contemporaries are not finding jobs and the companies that we see and
00:48:20
the companies that are selling the technology solutions are getting rid of what I'll call the like entrylevel white
00:48:27
collar work. In addition to this, student loan delinquencies also going up massively. They had a big hiatus.
00:48:33
Doesn't this indicate that there's no ROI to this expensive degree in a lot of
00:48:39
cases that these kids are being sold? They're being forced all this debt. This has been going on since before November
00:48:46
of 2022 when Chad GBT launched. I don't think AI has had enough time to
00:48:51
have a huge impact on this. Yeah, you're in this case, I think you're wrong, respectfully, even though you're the ZAR of AI. I I'm seeing it
00:48:57
with young folks and I'm seeing it with the software that the companies I'm investing in are deploying in other
00:49:03
companies, but we'll see who's right in the coming months. And that inflation back up to 3%. And so this is going to
00:49:09
make it particularly hard to cut rates because the reason when we go back to slide
00:49:16
number three there, the reason why people feel Trump has fallen so short on the economy and taking care of the
00:49:22
middle class is because of inflation. Trump said over and over again and some people in the administration have been
00:49:27
very publicly gaslighting in my opinion the country saying, "Hey, inflation's not happening. Inflation is happening."
00:49:34
And Trump sold people that prices would go down. We're back up to 3% inflation,
00:49:41
folks. Not only is it not going down, it's going up. And I think when you put together what people are seeing this
00:49:48
focus on a big a ballroom being added focus on tariffs things that Americans
00:49:54
are not seeing hit their wages and they're seeing their kids not be able to get jobs that 9% this is what's
00:50:01
concerning Americans. Trump has failed the middle class. That's the bottom line here.
00:50:07
I don't think that that's true. The country does 66% of them. I think
00:50:13
everybody can find a piece of data to hang their bias on.
00:50:18
And I think that what this most recent spate of elections show is that most
00:50:23
people are looking for some form of a price break. And so if you're a New York
00:50:30
mayoral candidate and you offer giveaways, you get a lot of attention. If you're running for governor and you
00:50:37
offer giveaways, you get a lot of attention. The question is why is that happening?
00:50:42
And I think it's fair to say that the reason why that's happening is that we have now spent
00:50:49
a lot of time setting the table for a wave of domestic policy
00:50:55
initiatives and I think now is just the opportunity to follow through on those. I I think that what we need to do is we
00:51:03
need to just figure out where the pressure is and I think Trump is doing this. So, for example, today he announced the Eli Lilly and Nova Nordisk
00:51:10
would be selling GLP1s for like $149 a dose. I think like that's that's good.
00:51:16
Is it as expansive? I think it could be probably more expansive, but there are all of these other programs that I think
00:51:23
need to get addressed. The student loan thing is a key one. It's time for legislation that says we're going to
00:51:28
stop federally underwriting these things. Force it into the public market. Force it into the open. allow
00:51:34
transparent pricing of loans and risk and you can stop that curve dead in its tracks.
00:51:41
We need to clean up the AI stuff. So there's a bunch of things now where when the government shutdown ends, we just
00:51:46
got to get to its legislative agenda and start to fix domestic policy. But you can't do that when folks won't even come
00:51:53
together or folks won't even end the shutdown. So I think Jason, part of this is a frustration that's going to keep
00:51:59
brewing that I think is less a reflection on him, but more a reflection on the point where we're at is that people want these structural problems
00:52:05
fixed. That can only happen through legislation that but that can't happen if the House and the Senate are not even
00:52:11
convening because there's still a shutdown. Yeah. And and people are seeing equity holders like us, people in crypto get
00:52:18
rich. We're all up 20 30% this year. And the working man in this country and the
00:52:23
working woman is not. That's the truth of it. And I think that's why and 60% by
00:52:29
the way, 60 65% of the country blame the Republicans for the shutdown and people aren't getting food stamps and you know
00:52:36
people aren't getting paid and people see their healthcare prices are about to spike. So we're doing all these tax
00:52:42
cuts. It's great that the economy is ripping for equity holders, but there's a reason why twothirds of the country
00:52:48
feels this administration has failed the working man. It's time to get back to work. It's time for Trump and his group
00:52:54
to get focused on the people who put him there, not just the people like us who are extremely affluent already. What do
00:53:01
you think, Brad? If you're right and we have inflation over 3% next November
00:53:08
and you have higher youth unemployment and the economy is only growing at 1 and
00:53:14
a.5% and interest rates stay high, then I think uh it'll be a rough midterm for
00:53:20
the Republicans. I don't actually think that's the flight path for the country. I actually think you are going to get
00:53:25
three to four rate cuts. I actually think you are going to see a reaceleration of GDP. I don't think that
00:53:31
these job cuts are the result of AI. But that's what makes a market. I think you
00:53:38
heard the president say after the elections this week that you know that there are a lot of things around
00:53:44
affordability that got to be delivered that aren't being delivered. And that number one affordability issue starts
00:53:49
with interest rates being lower. And he's been pounding the table on that all year long. But listen, I think a big
00:53:55
mistake by Republicans in this uh last election cycle is they weren't talking
00:54:01
about affordability and the people they lost to were talking about affordability. So I think on that uh
00:54:06
score, you're correct. But I I happen to think that inflation uh is going to
00:54:11
continue rolling over. I think you see some one-time effects in here. Um, and so I'll take the under, Jason,
00:54:18
with you and you can I can have a little side wager. I'll take the under next year. So, can I respond?
00:54:24
Of course. Yeah, that's why we're here. Yeah, you're really good at finding these cherry picked charts. So, let me show you a couple of them. So, with
00:54:29
respect to how are they picked? Well, you find like Jamal said, you find charts or polls that support the point
00:54:36
you're trying to make, which is fine, but let me just show you a couple other ones provide some balance. So US white
00:54:43
collar jobs as a percent of total employment in the US very steady line you see a blip there around co because
00:54:48
so many blue collar jobs were lost so that created the percentage of white collar to bounce up but postco it's been
00:54:55
on a very stable trajectory if it were true that we were seeing massive AI job
00:55:00
loss you would see the percent of white collar jobs dropping in the economy that has not happened okay and every time
00:55:08
there is some sort of job loss story you glom on to it being AI related like you did with Amazon and then Andy Jasse
00:55:14
comes out and refuts that then you're oh no no I'm talking about something in the future so like about your chart here
00:55:19
about your chart is that chart ends in the first quarter of 2025 so it's missing the last two
00:55:25
quarters so so now you're saying that all of a sudden this this has just happened in the last six months
00:55:30
no it's just it's flat you can see it's flat there for the four years the percentage on your own chart and it's that only goes to Q1 but sure keep going
00:55:37
I don't see a big change here in the % of white collar jobs. Yeah, I'm not even sure this is relevant
00:55:45
without the last of data. If there was some sort of job shock in the economy, it would be white collar jobs who'd be affected, right?
00:55:51
Well, I think the white collar jobs amongst young people this narrative whenever we point out very clear, I
00:55:57
think it's happening with young folks and then the number of layoffs right now is the largest number of layoffs we've had in a quarter since 2003. So, this
00:56:05
has been a a lot of layoffs. I know it's hard to hear, Saxs, but this has been the largest number of layoffs in 20
00:56:11
years. It's not hard to hear. I think, look, you keep bringing up these anecdotes, and the plural of anecdotes is not data.
00:56:18
So, in any event, when I look at this chart, I see that there is no job loss
00:56:24
shock in the economy. And that's what you've been claiming. And every time we specifically refute your anecdote,
00:56:29
you're like, "Oh, no, no, that's going to happen in the future." So, you don't know what the cause of that is. The
00:56:35
cause of that could be the fact that all these kids graduated from college are woke and majored in degrees that don't
00:56:40
have economic value. You don't know what the problem is. You're just glomming onto this AI story because you just like
00:56:47
it. You like this narrative and you're just I do narrative that's been fed to
00:56:52
the by the media. Okay. No, no. I I I told you what it is. I'm just see the anecdotal stuff I see on
00:56:58
the front lines is what I base it on. It's it's not just me glomming on to random data. Okay. The second chart I want to bring
00:57:03
up, what you see here is median real wages earnings are going up. Now, if
00:57:10
it's true that inflation is high and wages don't increase, then people's purchasing power will go down. But what
00:57:16
we're seeing here is purchasing power is still going up. And we have seen that during the first year of the Trump administration. So, look, it is true
00:57:22
that Republicans need to focus on affordability. the price of gas and eggs, for example,
00:57:29
has gone down and we need to keep making progress in that area. And I don't know if you saw the tweet by JD Vance, but he
00:57:35
basically said that Republicans need to focus on the domestic picture and they will. Now, if you're talking about the
00:57:41
election, one thing I want to point out is that all the major races were in blue
00:57:46
territory and we got blue results. So, this wasn't like unexpected. And
00:57:52
furthermore, Trump wasn't on the ballot. Now, I concede to you that Republicans
00:57:57
have a problem that when Trump is not on the ballot, our voter turnout is lower.
00:58:02
So, in this election, the only thing that was a little disappointing, I think, was the gap in excitement between
00:58:07
the Democrats and the Republicans. Democrats were able to turn out their voters. Republicans were not. And again,
00:58:12
that's a problem that Republicans are going to have to solve for the midterms and in 2028, which is how do we turn out our base when Trump is not on the
00:58:19
ballot? But you can't really lay that problem at Trump's feet. I mean, when he's on the ballot, he turns out the base and he wins. And that is the
00:58:26
problem that we have to solve. So, I agree with that part of it and okay,
00:58:31
I agree with the part of it that said that Republicans now need to focus on the domestic picture. But look, one of
00:58:36
the biggest problems we have right now is the government is shut down. Who does the public blame for that? Unfortunately, they're going to blame
00:58:42
the party that's in power, not realizing that the reason why the Democrats are
00:58:47
able to shut down the government is because of the filibuster. So unfortunately I think the public
00:58:53
perceives that they gave power to Republicans but the government is shut down. The reason for that is because
00:58:59
Democrats can shut down the government with just 41 votes basically. And
00:59:04
President Trump has called for getting rid of the filibuster if the Democrats won't reopen the government. I think we
00:59:10
should do that. By the way, just to go off on this tangent for a second, most people don't understand the filibuster
00:59:15
or how it works or why that's even a part of democracy. Basically what it says is that for votes where the
00:59:22
filibuster is in play, you need 60 votes. You know, super majority in the Senate as opposed to 50. If you ask most
00:59:28
people in the country, what is democracy? They would say it's 50 plus
00:59:33
one in the House, 50 plus one in the Senate and the presidency. That's all you need. But that's not true. And the
00:59:40
question is, if Democrats won't reopen the government, then I think Republicans are within their rights to get rid of
00:59:45
this filibuster. And we know the Democrats will do it. The next time the Democrats have the trifecta, they will
00:59:50
absolutely get rid of the filibuster. We know that's true because when we interviewed Joe Mansion, he was very clear. He was asked by Schumer and
00:59:57
Biden, let's vote out the filibuster, and he drew a bright line in the sand
01:00:02
and said no. But you're right, they would have. And we're getting to a place where if these folks in the Senate and
01:00:08
the House don't get back to work soon, there will be no domestic policy agenda that gets passed. There's critical
01:00:14
crypto legislation, AI legislation, there's domestic healthcare and other legislation that has to have a chance to
01:00:21
see the light of day. And so if you're not going to show up, then it doesn't leave many other options except to get
01:00:28
rid of the filibuster. Now, that has all these downstream effects for when you're not in charge, right? Just because then
01:00:34
it'll be a simple majority for the other team as well, right? But you're right, Sax, like we're getting to a point where there are two Democrats who are opposed
01:00:40
to getting rid of the filibuster was Mansion and Cinema. are now both gone. So, the moderate Democrats are are largely out of the caucus now. And if
01:00:48
and when because at some point the Democrats will at some point return to power. You know, they're going to get
01:00:53
rid of the filibuster. And here's the crazy thing. You can get rid of the filibuster with 50 votes in the Senate.
01:00:59
I don't think people realize that. So, basically, you've got this custom cuz that's all it is is a custom or
01:01:05
convention or tradition in the Senate of having this filibuster vote, but the majority can just get rid of it. and the
01:01:12
Democrats already said they're going to. So why would the Republicans foolishly
01:01:17
abide by this sort of gentleman's agreement that doesn't exist anymore, hold themselves to a 60 vote majority?
01:01:22
The country gave President Trump a mandate. They gave him a sweeping
01:01:27
reelection. Seven out of seven swing states, the House and the Senate, and they want results. And those results are
01:01:34
being thwarted by a government shutdown and more generally by this crazy filibuster rule. Why wouldn't we get rid
01:01:41
of it now and actually pass the reform that the country wants and then let's be judged on that in the midterms and in
01:01:47
2028 and if it ends up if it ends up not being good then we'll pay the price. That's the calculus.
01:01:53
So we should get to the election results and then just as they just with the chart I was mentioning Sachs here's the
01:01:58
layoffs for any October highest since 2003. So
01:02:04
hey listen we're all trying to figure things out in real time here. Uh, but it's not just the all- in pod talking
01:02:09
about what's going on here with jobs. Uh, it's a big discussion on CNBC and everywhere in between social media.
01:02:15
I know. And I remember that article that got pulled up when we discussed for Amazon was basically automating its
01:02:21
warehouses. And you were saying that this is like all AI related job loss. And then the article itself said that
01:02:26
they bought a robotics company a decade ago and this was all on trend for what they've been planning for a decade and
01:02:31
the humanoid robots aren't even here. And then you're like, "Oh yeah, yeah. I'm talking about the, you know, the Tesla Optimus robot that'll be here in a
01:02:37
few years. It's like you keep pivoting between what's going to happen in the future and what's happening now. Trying to win the debate club, but you
01:02:43
you're you're misconstruing my point. You're trying to spin like my point of view. And you're the greatest debate club captain. I'm not trying to debate.
01:02:49
I'm just putting out facts here for the audience. You are debating me. No, no, no. I'm just putting out facts here as the world's greatest moderator.
01:02:55
You're putting out spin. It's okay. Spin. Go ahead. Spin. Okay. Spin away. Take it easy. Debate club captain. Don't
01:03:01
pretend you're not debating when you're debating, okay? Just debate. It's okay. Don't be a Say
01:03:07
it. It's okay to debate. Just disagree with me. Don't pretend you're not.
01:03:13
Here's the thing. The the 600,000 jobs is what they were saying in a leaked document, Amazon, that they were not
01:03:19
going to fail. The automation group, you want to be a defender of the weak and the plighted. And the problem is,
01:03:25
once again, you're trying to diminish me by saying this is what I'm trying to do is balance out the fact that you two
01:03:30
guys are captured and are no longer objective on this podcast. I'm the objective voice company where
01:03:36
the CEO said the exact opposite. And you won't take them at your word. He said that a week later.
01:03:41
Okay. So, you get a week to make up your own [ __ ] Doesn't make it right. He was very tell they literally were saying in the
01:03:47
leaked documents that they had a PR crisis on their hand and they were going to try to spin the AI job losses. part
01:03:53
of what he said trillion dollar public company said on the record and filed with the SEC that the reason he did
01:04:00
these layoffs was because of Zer and DEI. There's two sets of layoffs. One of them
01:04:06
is the 30,000 white collar people. Sure, we'll take him on his word. The other one is that they're cancelling jobs
01:04:12
explicitly because of the AI that they're planning to deploy and that they're making PR plans to cover
01:04:18
themselves for how bad that looks to them. Let's move on to Mandami. I want to read you something from Morgan
01:04:24
Stanley this week on this question of are the job losses caused by AI or are they caused by something else and the
01:04:31
title of this section is flatter is faster. It says you know the cynical take has always been that this just
01:04:37
wouldn't last that companies wouldn't be able to maintain this level of discipline and that they were doomed to
01:04:42
repeat the mistakes of the past. It's never different this time as they say. But the cynical take seems wrong again.
01:04:50
And the number of examples of companies that have adopted this mindset, culture, behavior of efficiency, and getting fit
01:04:57
appears to be growing quarterly. Guess what? It's cool to have fat margins, no
01:05:03
debt, maximum flexibility, and be efficient and more faster. Credit Dash and Curtis. But they're saying, you
01:05:09
know, they're out there talking to the companies. I'm not saying that there's no AI effect, but the idea that you're
01:05:14
going to hang all of these layoffs on AI hang them all on AI. I think there's
01:05:21
Hold on. I'm going to be very clear. I am not hanging them all on AI. I'm saying for the young folks,
01:05:27
that's what I suspect is happening there. For the existing pros, I do agree that they're all getting rid of excess fat
01:05:33
and they want to be a leader and they want to juice their earnings. That those are two different things. Okay, now
01:05:38
let's go on to Mandami because it's getting boring. We're starting in a circle here. The Zoron has won New York
01:05:44
City. The Dems won across the board. Zoron won every burrow except Staten
01:05:51
Island. You finished with 50.4% of the vote. Nine-point lead over Cuomo.
01:05:57
Curtis uh was a distant third at 7%. No surprise if you're on Poly Market
01:06:04
because they have been saying this for months. Pull up the chart. Producer Nick. Thank you. He's been a big favorite since he
01:06:09
crushed Cuomo in uh the primary in June and he's held the lead the whole way.
01:06:17
He's self-proclaimed Democratic socialist. Some people think he's a communist. Um and he's the first Muslim
01:06:24
mayor and the youngest in over a hundred years. Big promises seem to have
01:06:30
resonated with young folks, especially women in New York. affordability, rent freezes, free public transit, higher
01:06:37
taxes on the rich. You're going to pay an extra 2%. I think it'll be 54% will be the highest tax rate in New York, the
01:06:43
highest tax rate in the nation. And hilariously, he added super villain Lena
01:06:48
Khan to his transition team. And she's going to go break up the bodeas. Um, and
01:06:53
shout out to our friend who's not here today, the Sultan of Science, David Freeberg, predicted the rise of
01:06:59
socialism on this very show, about 6 months before anybody knew who Zoron was. Here's the clip. Give him his
01:07:07
flowers. He's not here. The party line is that socialism was defeated in this
01:07:14
election cycle and that there was a resounding kind of vote from the
01:07:19
American populace against socialism. And I actually think my my contrarian belief is that we'll see a rise a dramatic rise
01:07:26
in socialist movements in 2025 in the United States. We're going to see an unleashing of uh economic growth because
01:07:33
of deregulation and AI. There's going to be some parts of the economy that are going to be big winners and some parts of the economy that are going to be big
01:07:39
losers. When you have this sort of a change this fast, there are often large contingents of people that are left
01:07:45
behind. And when that happens, I do think that the socialist policies and the socialist movements gain steam.
01:07:51
Growth does not mean that it benefits everyone equally. And I think that some folks will see people go from being
01:07:56
billionaires to 100 billionaires to the world's first trillionaire. And it will also start to fuel this rise. So I think
01:08:02
that we will see an increase in the breadth and depth of socialist movements in the United States. Shamath, what can we learn from the
01:08:09
Mammi effect? Peter Teal predicted this in 2020. There
01:08:15
was a bunch of leaked memos between Peter and Zuck and Andre, but he put his finger on it in January of 2020. I
01:08:22
retweeted it out. Basically, what Teal said was, "From the perspective of a broken generational compact, there seems
01:08:29
to be a pretty straightforward answer to me, namely that when one has too much student debt or if housing is too
01:08:35
unaffordable, then one will have negative capital for a long time and or find it very hard to start accumulating
01:08:42
capital in the form of real estate. And if one has no stake in the capitalist system, then one may well turn against
01:08:48
it. This has been floating around for years and I think Teal yet again has seen the
01:08:56
forest from the trees many years ago. So yeah, what is happening? I think that
01:09:01
we've put our finger on it. We need to come back and now focus on domestic policy and fix some of these core
01:09:09
pernicious issues. One is clearly that we now need to address how student loans
01:09:15
are underwritten. We cannot allow generation after generation of people to
01:09:21
graduate from degrees that they don't quite understand with hundreds and hundreds of thousands of dollars of debt
01:09:27
that they have zero chance of paying off. That is a horrible way to start your life. And we have not done right by
01:09:34
these folks. We need the free market to be able to tell somebody, as hard as it may sound, to hear that an art history
01:09:41
PhD will cost you $800,000 so that the people that take it have the
01:09:47
money or are willing to bear that cost. Meanwhile, if you became an electrician,
01:09:53
it would only cost you 40 or 50,000 and you could have an incredible life. Or if you go and get a degree in AI or stats
01:10:00
or something. My point is that we need to differentially price degrees based on the value and the earnings power that it
01:10:07
creates for people. That is a policy level initiative that needs to cascade through America. That cannot happen if
01:10:14
the government is not working. So we need to fix that. The problem with housing is much more
01:10:20
state and local. And I'm not sure I have a a great diagnosis for how to fix that
01:10:25
except that certain states just need to get their act together. I mean, in California, we have just absolutely
01:10:30
abysmal building regulations that prevent anything and anybody from doing anything. So, that's what we need to do.
01:10:36
We need to fix these things legislatively. We need to do it right away. And we need to fix this broken
01:10:42
generational compact. This was the first moment in years
01:10:47
where I have now become sympathetic to this idea of student loan forgiveness. I was never sympathetic to this idea. I am
01:10:54
sympathetic to it now. Why are you sympathetic to it, Chama?
01:10:59
Because I think that we should have fixed this problem a long time ago. We should have not allowed these loans to
01:11:05
be underwritten the way that it was for so long. Not allowed all of these effective
01:11:11
subsidies to pervert the free market's ability to tell people that some of these degrees
01:11:17
were not worth their time. We have Palunteer today saying that they are not going to hire from college anymore. Let
01:11:24
me build on that. Okay. So, look, I just just on the narrow loan forgiveness point. So, I actually agree that maybe
01:11:31
loans should be forgiven if you get a total overhaul of the system. What you don't want to do is acknowledge that all the loans are bad and they need to be
01:11:37
written off and then continue making them. And that was the problem with, I think, the Biden loan forgiveness program is he's going to write off trillions of
01:11:43
dollars of loans while keep funding the system without any reform. So, let's talk about a big reform package where we
01:11:49
completely reunderite how we do this and maybe some loan forgiveness can be part of that so that we don't have all these
01:11:55
kids graduating who are basically socialists because they're so deeply in debt they're never going to own capital
01:12:00
in the system. By the way, JCL, maybe the fact that all these millennials are
01:12:06
socialists might have something to do with the fact they're unemployable. Who the hell wants to hire
01:12:11
Fair enough young Lenin 2.0 O communist revolutionary to be in their company if
01:12:17
they don't believe in capitalism. How are they going to work their way up through a capitalist system? That's your best point so far. Yeah,
01:12:22
that's your best. Best point so far. Maybe it has something to do with the fact that all these kids are socialists
01:12:28
and junior communist revolution rather than blaming our favorite scapegoat AI.
01:12:34
Okay, so anyway, that's that point. Now, in terms of mom Donnie getting elected, you got to remember New York City is
01:12:40
like 8020 Democrat and he won very narrowly. It was like 50.4% of the vote.
01:12:46
So, this was not some overwhelming victory. It was a narrow victory. He squeaked by, but he did win. And it's
01:12:53
because the base of the Democratic party is energized by this socialist ideology.
01:12:58
So, what we saw in this election, I think, was blue cities and states getting bluer, meaning moving to the
01:13:04
left. And that is a problem that is a little bit scary because historically in
01:13:11
this country the politics was played between the 40 yard lines. You didn't have one of the parties being fundamentally a revolutionary party. And
01:13:17
it does seem like the Democrat party is gradually becoming a party of me don
01:13:23
Katie Porters and genuine socialist revolutionaries. And you know if we
01:13:28
ultimately lose then the country's going to be in for a big shock. But I don't think that's going to happen though. But
01:13:33
this is why I think we should take very seriously the idea of if the shutdown continues,
01:13:40
end the filibuster because while the country has empowered Republicans with
01:13:45
all the different parts of the federal government, we have to deliver genuine results now. Otherwise, these socialists
01:13:50
are going to take over in 3 years. Brad, what was your take on this? I know you were involved in a debate, a ban the
01:13:58
billionaires debate that you did very bravely. I don't know if you can talk about it or not. I know it was at a
01:14:03
certain university. Uh, I'll leave it at that. But if you were willing to talk about a little bit, I think it relates
01:14:09
and dubtales quite nicely with what happened in New York. And by the way, I think the most important statistics and
01:14:15
since my hometown, I think a lot of New Yorkers don't fall for this kind of [ __ ] that he's spinning. And if you
01:14:21
look at the chart, if you could pull up the chart, Nick, of people who were born in New York as opposed to people who've
01:14:26
been there. So if you look at that bottom one, I was born in New York City. uh 38% of those people went for uh
01:14:34
Mandami and the and the other 60% went for the other two candidates. But if you were there for less than 5 years or less
01:14:39
than 10 years, 78 and 85% chance you voted for him. The people who were not
01:14:45
born there, they fell for it. This guy's a charlatan. Nothing he says he's going to do is going to happen. It's going to
01:14:51
be total, complete, utter chaos. Brad, your thoughts on
01:14:57
what we're seeing like bigger picture, not just what's happening in New York, but what you heard when you debated kids
01:15:02
about ban the billionaires and socialists? Yes. Yeah. So, the debate was at Stanford
01:15:08
sponsored by the economics department on whether or not billionaires should be allowed to exist in America. can't talk about, you know, what what we debated in
01:15:15
the room as Chattam House rules, but I will tell you this that a prepoundonderance of people on their way in, you know, thought that they should
01:15:22
uh, you know, ban billionaires in the United States, right? I think it's a fundamental fight for the soul of
01:15:28
America going on right now. This goes to the very basic premise of the American dream. Do, you know, is there economic
01:15:34
mobility in America? But I think Republicans have to get real about this. I think they have. The president ran on
01:15:40
a main street agenda. He passed the Invest America Act, I think he absolutely gets what's at stake. 70% of
01:15:47
people feel left out and left behind. They feel like the system is rigged against him. And when you have somebody
01:15:52
like Mandami who comes along and promises everything under the sun for free, that he can solve all of these
01:15:58
problems, I think it's very enticing for young people who are frustrated. They also don't do any diligence because
01:16:03
he can't deliver on any of these promises. He's not allowed to as mayor. He takes the state assembly. You know,
01:16:09
Chimath and I were with VC Ramaswami last night and VC tweeted about this yesterday. Republicans have to talk
01:16:15
about the issue of affordability, right? And I think they really have uh a good
01:16:20
game plan around the main street agenda for affordability. Remember, no tax on tips that doesn't help rich people,
01:16:26
helps people who are feeling left out. No tax on overtime helps people who are feeling left out. But that's getting
01:16:32
drowned out uh you know Jason as you pointed out in the moment by people who
01:16:38
feel like their grocery bills are going up, the cost of rent is going up etc. So that is going to be the struggle over
01:16:43
the course of the next 12 months. That is the battling narrative. And in the Democratic party, clearly this was,
01:16:49
remember, this was a fight within the Democratic party between Andrew Cuomo and Mdani and the centrist Democrats are
01:16:57
losing to, you know, kind of the more socialist part wing of the party. And I think on a national level, folks in
01:17:03
Indiana, Ohio, Wisconsin, they don't fall for that. They believe in the American dream. They believe in economic
01:17:09
mobility. They may be frustrated by affordability, but they're not ready to burn down capitalism um in the way that
01:17:16
Mandani is suggesting. Those voters may not want to burn down capitalism, but that's what they're going to get because we have a two-party
01:17:22
system in America. And if the Democrats go socialist and then they get the trifecta and they get rid of the
01:17:28
filibuster, that's what they're going to impose. I think the person who wins 2028 is the
01:17:34
person who puts as much energy into say building data centers or ballrooms as
01:17:40
puts into building affordable housing. That will be a great thing for somebody
01:17:45
running in 2028 to champion. Why do you guys think young women overwhelmingly supported mom Donnie the
01:17:53
vibes? No, I look I think there's a lot of polling showing that
01:17:59
between young people and old people, young people are much further left and as between women and men, women are much
01:18:06
further left. So like the most left-wing group of the electorate is young women, young female professionals at the
01:18:13
professionals versus bluecollar. So basically professional class versus working class is another very important
01:18:18
overlay. It might also be there's the overlay sacks of COMO being metoed as well. So
01:18:24
maybe some women didn't feel comfortable voting for him. He is a particularly odious candidate, by the way. The worst candidate ever.
01:18:30
Yeah, I agree that he is a weak candidate. He kind of represents this like washed up establishment
01:18:36
vibe. It's just not a fresh candidate at all. That's a problem. But look, the
01:18:41
Democratic establishment did a terrible job here that not only was Cuomo the candidate they put forward, but also
01:18:47
they lawfared Eric Adams. They basically wrecked his mayorship through this really weak lawfare based on like
01:18:53
airplane upgrades or whatever. And they did that because they thought they're going to be able to get a more compliant establishment figure in the role and it
01:18:59
completely backfired and they end up with Mandani who hates them as much as they hate Trump. So the establishment
01:19:06
Democrat wing of that party has completely failed. But look, this is what we're seeing across the country is
01:19:11
that the so-called centrist Democrats, the mansions, the cinemas, they're being driven out of the party and all the
01:19:17
energy is with this base that's turned socialist. And so, Brad, this is where I get very nervous. Yeah, it's true. Like
01:19:24
the American Heartland does not want a communist revolution, but if these guys get power, then that's what we're in
01:19:29
for. So, it is it's pretty scary. How affordable homes and this will end. How I forecast is that San Francisco ran
01:19:38
this experiment. We have people, you know, feces in the street. We had people dying in the street, etc. Daniel Lur, a
01:19:45
centrist Democrat, gets elected in San Francisco now is putting the city back on a right trajectory and New York is
01:19:51
heading in the exact opposite direction. That's going to be a really interesting AB test for America because I think San
01:19:57
Francisco is trending in the right direction. I think that, you know, to the extent that Mandani can do any of
01:20:02
these things he's talking about, he's going to put New York City on a very, very bad track. In addition to all the economic
01:20:08
redistribution, the idea the government's going to run grocery stores and things like that, he's also said he's going to abolish all the gifted
01:20:14
programs in New York City schools and he wants to close Rikers and he believes
01:20:19
in, you know, cashless. That's the plot of the second Dark Knight movie by Christopher Nolan when they open him
01:20:25
asylum and like the Joker and the Sadman come out. Okay, so speaking of which, at least I
01:20:30
think New York City has got multiple jails in LA right now. There's only one county
01:20:37
jail. It's like I think it's called like the men's county jail or something like that. And the board of supervisors for
01:20:43
LA County has been talking about shutting that down because it it has fallen into disrepair and needs to be
01:20:49
upgraded. They have a $50 billion budget. They haven't allocated any money towards building a new jail. And now
01:20:55
they're talking about demolishing that jail without a replacement and just having all the inmates basically be sent
01:21:01
to diversion or social services, which means they get an ankle bracelet and they're turned down the street. There's 7,000 of the most hardened criminals are
01:21:09
in that jail and half of them are like severe mentally disturbed cases like the
01:21:14
guy who killed Brianna Cuper. So they're talking about doing this right now. There was supposed to be a vote a couple,
01:21:19
but they're going to make new jails is the idea. They're going to shut down this jail. No, they have not allocated any money towards building a new jail. They should
01:21:25
have done it years ago. And they're actively discussing whether they are going to shut down this jail, whether
01:21:30
they're going to demolish it and send all the inmates to diversion of social services. This is a serious possibility
01:21:37
in LA County right now. That's insane. So, they've gone from defund the police to demolish the jails.
01:21:43
Yeah. Mandami's been trying to clean that up and saying he's not going to shut it down without the new ones belt,
01:21:49
but uh yeah, Arkham Arkham Asylum a great idea. It's like releasing all the crazy
01:21:55
people. Yeah. Well, I mean and and a lot of these people who are in jail are actually suffering from mental illness
01:22:01
and we should definitely have address that as well at the same time. J, what are you doing? Founder University, you're trying to raise
01:22:06
money. What are you doing over there? So we did a deal with Sonobble to bring Foundry University to Riyad and uh we
01:22:13
were going to have 25 companies mostly Saudi nationals and then teach them how
01:22:18
to build companies and like the best practices from America. We had so many applications it went to 50 that it was
01:22:25
like all these people we know trying to get people into the program. So we wound up with 60 companies and I spent three
01:22:31
days working with them. Really great like fintech, construction technology, real estate stuff.
01:22:38
It was really inspiring. Um, and I saw all of our friends from Saudi there and then uh I saw that I think did you have Tariq
01:22:44
from Humane actually talked to the founders? Tariq came. Yeah. He made an offer to them to give them he matched
01:22:49
the Google offer for cloud computing with all of them. So just giving him bunch of credits and um yeah Tariq came
01:22:56
by and it was you know it was really nice of him to come by. He's got like he was going to his board meeting and he came to speak to you know 60 founders 70
01:23:03
well there were probably like there's 60 teams but maybe like 90 founders in the room like it's a tiny little thing and a
01:23:09
lot of people came out to support it um because they're trying to get more domestic you know startup
01:23:15
going totally um so it was really good and then since um
01:23:21
that went so well the uh Jetro which is the enterprise trade organization of
01:23:27
Japan and called me and said, "We want to do it in Japan." So, I'm leaving here to go to Japan and announce the launch
01:23:34
of it and and then we'll have it in three cities, the United States or three countries, United
01:23:39
States, Saudi, and Japan. Uh, which will which will officially start in January. I'm just going there to do like a press
01:23:45
tour about it. Now, are those to feed the funnel of angel investments for you or are you
01:23:51
making money on those? So, you know, we got a fee to run the program, but it's not going to, you
01:23:57
know, match venture investing obviously. Um, it just kind of underwrites the cost of it. And then that creates the funnel.
01:24:02
About 5% of the companies that come to 5 to 10% of the companies that come to Founder University wind up going to the
01:24:08
accelerator or we make a direct investment. So, it's a pre-acelerator, but it lets us get to the companies
01:24:13
before Tech Stars or Y Combinator or other folks even know they exist because half of them aren't incorporated yet,
01:24:20
right? So that's kind of the exciting part about it is we meet them when they're just two or three people working
01:24:25
on a prototype. It is there were I've had two angels, three angels come in or
01:24:30
three founders come in here over the course of the last two years. Um two I did angel investments in. The
01:24:37
third I did not unfortunately um but they their valuations of those
01:24:44
three companies one is cognition now at 15 billion. One is Decagon now at 4 billion. Um and uh you know and and the
01:24:53
other one is Distill that just raised at two billion. I mean the the rate at which these companies are scaling for
01:24:58
the best companies really I mean it's pretty um angel money is now real money.
01:25:04
Uh it's going to be interesting to see you know how
01:25:10
resilient and robust this revenue is you know and churn and totally people sampling stuff but it's feeling
01:25:16
pretty good right now. the cohort data for people who have had products out for six, seven, eight months, it's starting to turn into the smile where the cohorts
01:25:23
like go down, down, down, but then they turn back up, which means people who, you know, signed up for it forgot they
01:25:30
were using it and then they came back and started using it again. It's a really good sign for some of these companies. Uh, all right, listen, great
01:25:37
show everybody. We got through a lot and everybody come to the holiday. We're going to be holiday cheer. Sax and I
01:25:44
will be pouring eggnog and singing carolling songs. It's going to be wonderful. Saturday, December 6, join us
01:25:52
allin.com/events. Brad, are you going to join us as fifth bestie at the All-In Holiday Special?
01:25:58
Who uh who's dealing? We got some poker up there if there's poker. Plenty of poker. Absolutely. There'll be some poker. Yes.
01:26:05
Christmas poker with the besties. Love it. All right, everybody. Uh we'll see you next time. Bye-bye.
01:26:10
Love you, Bruce. Byebye. to let your winners ride.
01:26:16
Rainman David and it said we open source it to the
01:26:22
fans and they've just gone crazy with it. Love you queen of
01:26:28
[Music]
01:26:33
besties are my dog taking notice in your driveway.
01:26:41
Oh man, my habitasher will meet the endless. We should all just get a room and just have one big huge orgy cuz they're all
01:26:47
just useless. It's like this like sexual tension that we just need to release somehow.
01:26:55
[Music] We need to get mercy. I'm going all
01:27:01
[Music]
01:27:08
in.
