00:00:00
when I wasn't able to use the r word I
00:00:02
would use Dey Chente for two people
00:00:05
Jason and and friberg's dog Marshall
00:00:08
freedberg oh come on I can't stand
00:00:11
Marshall freed that little bastardino
00:00:13
jumps on the table eats the nuts the
00:00:16
worst the worst I hate Marshall
00:00:18
freedberg I hate him I can't stand this
00:00:22
bastard guy look how he sits like a
00:00:25
[ __ ] sits like he sits like a Dey
00:00:28
chanted look at this dweeb and
00:00:31
this now Nick show them my dogs
00:00:34
beautiful beautiful dogs Valentina
00:00:37
zanini she's the breeder of breeders
00:00:39
look at these two beautifully elegant oh
00:00:42
look at look how look how well behaved
00:00:44
they are you don't see them jumping on
00:00:45
the table to eat the main course freed
00:00:47
no no Marshall almost ruined our
00:00:49
Christmas dinner this is why I'm holding
00:00:51
a real grudge against Marshall freedberg
00:00:52
he at off nuts no and Alison [ __ ]
00:00:55
Allison off guard she's like Marshall
00:00:56
freedberg get off the table I just love
00:00:59
that he's got a full
00:01:00
name Marshall Eugene
00:01:04
freedberg let your winners
00:01:06
ride Rainman
00:01:11
David and instead we open source it to
00:01:13
the fans and they've just gone crazy
00:01:15
with
00:01:16
[Music]
00:01:19
it all right everybody welcome back to
00:01:22
the number one state SP I'm sorry Allin
00:01:25
podcast in the world the number one
00:01:27
podcast oh sorry stray bullets here we
00:01:29
go back on the program our guy Gavin
00:01:32
Baker is here you know him from a
00:01:34
treaties management does private and
00:01:36
public 4 billion under management and
00:01:38
lot to talk about with you gb1 good to
00:01:41
have you gb1 is Here solo Doo cor weave
00:01:44
IPO happening soon uh by the time you
00:01:47
get this and Nvidia you were there at
00:01:49
Nvidia you were the one analyst Gavin
00:01:53
that Jenson pulled up you're loved by
00:01:57
Jensen what's it like to be loved by
00:01:59
Jens
00:02:00
tell us
00:02:01
everything well so first he did um there
00:02:04
was uh Alfred F was from squa
00:02:08
MH and then they had a a nice sside guy
00:02:11
whose name is escaping me at the moment
00:02:13
but it is technically true I was the
00:02:14
only public Equity investor on the buy
00:02:16
side that Jin Jensen asked I've known
00:02:19
Jensen for 25 years he's he's kind of
00:02:22
the same guy he ever was like just maybe
00:02:24
slightly calmer Gavin can I ask you like
00:02:26
all this stuff where they talk about the
00:02:31
balance
00:02:32
sheet questions that some folks have
00:02:35
about Nvidia some of the accounts
00:02:37
receivable issues and stuff is there any
00:02:40
legitimacy to those issues the round
00:02:42
tripping like what's the what's the real
00:02:44
story of someone that that peers into
00:02:46
that p&l and understands it yeah so we I
00:02:49
guess maybe take them in reverse order I
00:02:52
really don't think like if if Nvidia had
00:02:55
not not put any money into cor weave not
00:02:58
put any money into kind of other of
00:03:00
these neoc clouds I don't think it would
00:03:02
have impacted their revenues at
00:03:05
all at all they would have sold more to
00:03:09
meta and more to more to meta more to
00:03:12
Amazon more to
00:03:14
Microsoft so the reason they did it is
00:03:19
even three years ago it was a very
00:03:21
stable three-player
00:03:23
oligopoly from the cloud computing
00:03:25
players in Amazon Google and Microsoft
00:03:28
and if you're Nvidia that's not great to
00:03:30
have just three big
00:03:32
customers those big clouds particularly
00:03:35
in 2023 when there was such a rush to
00:03:38
get gpus they each kind of want to do
00:03:40
their own kind of custom version of an
00:03:43
Nvidia server and Nvidia by giving kind
00:03:47
of like a standard reference design
00:03:49
which someone like cor weave bought to
00:03:51
cor weave you got gpus in the market a
00:03:52
lot faster and when you use Nvidia
00:03:55
reference design it's generally smoother
00:03:57
and easier to stand them up and
00:04:00
so the big three kind of cloud computing
00:04:04
you know
00:04:05
hyperscalers their incremental share of
00:04:07
Revenue went down and that was nothing
00:04:11
but good for NVIDIA because they now
00:04:13
have kind of a more fragmented base of
00:04:16
buyers who have less power over them but
00:04:18
what does that mean Gavin when like the
00:04:20
accounts receivable jumps from a billion
00:04:22
five or so to like 5 and a half billion
00:04:24
year-over-year is that concerning or
00:04:27
that's just business so look it's never
00:04:29
good good but if you think Nvidia has
00:04:32
gone through the biggest product
00:04:35
transition in history in terms of Hopper
00:04:38
you know this is a business doing tens
00:04:39
of billions of dollars at scale there's
00:04:42
never been a product transition like
00:04:43
this in the history of semiconductors
00:04:45
going from Hopper to Blackwell you know
00:04:46
kind of the 2022 generation GPU to this
00:04:50
one the only precedent for this on
00:04:53
planet Earth is the
00:04:54
iPhone
00:04:56
and there's something called the Osborne
00:04:59
effect which is you know when Apple
00:05:01
comes out with new iPhone for the three
00:05:02
months before nobody buys the new
00:05:06
iPhone and I think the only reason
00:05:08
Nvidia was able to grow through this
00:05:10
product transition is because of
00:05:12
reasoning models like deep seek which
00:05:13
are just so compute hungry and this
00:05:16
product transition does come back to the
00:05:17
days receivables the cume receivables
00:05:19
now is like23 billion yeah it's never
00:05:22
good when accounts receivables go up but
00:05:25
if this is the most understandable time
00:05:29
for it to happen in a product refresh
00:05:31
cycle you're saying yeah and because a
00:05:34
hopper server you know it's a rack it's
00:05:36
whatever it is 7 feet high it weighs
00:05:38
1,000 lbs it consumes 60 kilow which is
00:05:41
60 American OHS and it's air cooled so
00:05:43
you cool those gpus and the big problem
00:05:46
gpus one of the biggest is they melt you
00:05:48
cool it with air
00:05:50
Blackwell weighs 3,000 lb so three times
00:05:53
as much the rack you know it's 8T tall
00:05:56
maybe 5T deep or 4 feet deep 300 ,000 lb
00:06:00
and it consumes 120 KW so twice as much
00:06:04
power and roughly kind of the same
00:06:06
footprint three times as much weight and
00:06:09
it's liquid cooled so this is like an
00:06:11
iPhone upgrade cycle you know it was
00:06:13
like it's still a pain that we went from
00:06:16
you know lightning to USBC you know I'll
00:06:18
grab a cord and it'll be lightning
00:06:20
instead of USBC this is like an iPhone
00:06:22
upgrade cycle where to get the new
00:06:24
iPhone not only do you have to change
00:06:26
your connectors you have to put in a new
00:06:29
generator you have to put in a new
00:06:31
boiler and a whole house humidification
00:06:33
system you know to kind of make it
00:06:36
work so it's a Monumental product
00:06:39
transition
00:06:41
and I think that is a lot of why the
00:06:44
receivables went up you know they're
00:06:46
recognizing Blackwell
00:06:48
Revenue you know while it was still kind
00:06:50
of getting into customers hands
00:06:54
um if that Trend continues past the July
00:06:58
quarter then I would say hey that's
00:07:01
reason for concern but this is a very
00:07:04
understandable time for that to happen
00:07:06
from my perspective so basically the
00:07:07
summary is AR accounts
00:07:10
receivable builds as you go through this
00:07:12
very complicated product transition but
00:07:16
then at some point it Peaks and then you
00:07:18
start to work through all of it and it
00:07:21
moves off balance sheet basically gets
00:07:22
recognized and you move forward and so
00:07:24
then that AR should shrink and just to
00:07:26
clarify that that's accounts receivable
00:07:28
that's the money owed to you by by
00:07:29
customers for the audience who might
00:07:31
have a question what they are exactly
00:07:33
and the reason they're not collecting it
00:07:35
is because they haven't delivered it I
00:07:37
mean the county gets very complicated
00:07:38
with these systems but yes I mean they
00:07:41
have delivered it and they've recognized
00:07:44
the revenue but maybe the customer is
00:07:47
saying hey we're not going to pay you
00:07:48
until
00:07:50
X you know until we get them plugged in
00:07:52
and working I mean who knows what it is
00:07:55
got it because it's a new thing total
00:07:59
accounts receivable it's just that here
00:08:02
the accounts receivable have gone up
00:08:04
more than sales and that's just a
00:08:06
function of the complexity of this
00:08:07
product transition the other part of
00:08:09
what I would say is the first part of
00:08:10
what you're saying is very similar to
00:08:12
what Intel did to scale their chip
00:08:15
dominance in the 80s and 90s with this
00:08:17
Intel Inside program they didn't really
00:08:19
need to do it probably in hindsight but
00:08:22
it helped them support an ecosystem and
00:08:23
it helped diversify their buyer base so
00:08:27
that fewer people had power over them
00:08:28
and so a lot this quote unquote round
00:08:30
tripping from your perspective is
00:08:32
diversifying the ownership pool of
00:08:34
Nvidia is what you're saying absolutely
00:08:36
and sending Nvidia gpus to people who
00:08:39
are adopting invidious reference
00:08:41
architecture which they believe is the
00:08:43
best architecture for those gpus whereas
00:08:47
each hyperscaler has their own slight
00:08:50
tweaks to that server um that
00:08:52
hyperscaler does it so it looks more
00:08:54
like their other servers but maybe
00:08:56
doesn't run quite as well as the
00:08:58
standard in video reference architecture
00:09:00
with all of their chips not just the
00:09:02
Nvidia gpus but the Intel Insight
00:09:05
analogy is interesting I had not thought
00:09:06
of that thank you jth well it he is
00:09:09
definitely doing Keynotes like Intel did
00:09:13
and trying to Brand the actual names of
00:09:15
the units which is yeah it was
00:09:17
interesting Pentium inside people would
00:09:19
go and buy a computer does it have a
00:09:21
Pentium and which Pentium does it have
00:09:23
and now Apple's doing that same thing
00:09:25
with the M4 you know series and people
00:09:27
are actually asking questions like you
00:09:29
know so there is something to it that
00:09:31
maybe some portion of the consumer base
00:09:34
wants to know what's inside right and
00:09:37
and doesn't cost much to brand since
00:09:39
we're here let's talk a little bit about
00:09:40
the cor weave IPO cor weave is going to
00:09:42
go public on Friday we tape on Thursday
00:09:45
so when you listen to this episode you
00:09:48
will have the actual data on what
00:09:50
happened with their IPO they're going to
00:09:52
raise 1.5 billion they're a neocloud
00:09:54
neocloud means not just cloud computing
00:09:56
but a new Cloud thus Neo and company has
00:10:01
really been growing quickly it was
00:10:02
reported they wanted to raise 2 billion
00:10:04
and I guess they stepped it down to 1.5
00:10:06
billion at a 23 billion doll valuation
00:10:09
they had two billion in Revenue last
00:10:11
year so they're up 8X and they've got a
00:10:13
lot of debt that's the other issue with
00:10:15
core weave that people note almost 8
00:10:17
billion in debt and one customer
00:10:19
Microsoft accounts for over 60% of their
00:10:21
revenue always a bit of a a red flag
00:10:24
there as Troth mentioned Nvidia accounts
00:10:26
for 15% of their revenue and they own 6%
00:10:29
6% seems small enough to not make a
00:10:31
difference so Gavin I guess what do you
00:10:33
make of this company cor weave and their
00:10:35
timing what it says about the markets
00:10:37
because hey this is the biggest IPO
00:10:39
we've had in a bit I think maybe the
00:10:42
last ones that were notable were Reddit
00:10:44
last year and a couple of other
00:10:45
companies got out obviously stripe
00:10:47
hasn't gotten out so is this a major
00:10:50
Milestone or are they going out because
00:10:53
they have to go out because of all this
00:10:54
debt and then this is all against maybe
00:10:57
a backdrop of did we
00:10:59
overb and are these language models
00:11:02
going to require as much Hardware uh as
00:11:06
we thought last year so we're definitely
00:11:08
not overbuilt yet like since deep seek
00:11:12
came out like what has happened since
00:11:14
deep SE car1 came out is China is buying
00:11:17
every GPU they can one of the largest
00:11:19
Chinese server manufacturers warned last
00:11:21
night that there's about to be a
00:11:24
shortage of gpus in China the price of
00:11:27
memory DM goes up every day
00:11:30
so we're not overbuilt
00:11:33
today Point number one and you know open
00:11:36
AI yesterday said that they are gating
00:11:39
their new image generation service
00:11:40
because they don't have enough gpus so
00:11:42
we're not overbuilt yet Blackwell is
00:11:44
going to be a very successful product
00:11:46
cycle there is a little bit of a
00:11:47
prisoners dilemma
00:11:49
where you're going to spend on Blackwell
00:11:52
almost no matter what because if you
00:11:54
don't you're afraid that you seed a big
00:11:56
advantage to a competitor you know if
00:11:57
you're meta and you don't spend Google
00:11:59
spins and their AI is a lot better than
00:12:01
yours you're worried you may not catch
00:12:03
up I would say that that's already the
00:12:05
case yeah that's already the case but
00:12:07
here this is a brand new architecture
00:12:09
which is a lot I mean not only is it
00:12:12
really different as we went through it
00:12:14
is a lot better but now I would say all
00:12:16
these gpus they're hard to get them
00:12:18
working at the beginning like right now
00:12:20
Hoppers are you know finally tuned
00:12:22
everybody knows how to work with them
00:12:25
Blackwell you know it's almost like
00:12:26
you're you're skipping ahead you know
00:12:29
it's like imagine each one of these gpus
00:12:31
is a Formula 1 car you know now you
00:12:33
skipped ahead 10 years in the future and
00:12:34
you have to kind of learn how to drive
00:12:36
that new Formula 1 car and it takes a
00:12:38
while till you drive it as well as the
00:12:40
old one so any other thoughts Gavin on
00:12:42
the core weave IPO which will have
00:12:44
happened by the time people listen to
00:12:46
this episode yeah I would say you know
00:12:49
the sentiment on X investors on X are
00:12:52
pretty negative on core weave I think
00:12:53
there's maybe a little bit of you know
00:12:55
negativity in the market they had to you
00:12:57
know reduce the range lower the price
00:13:00
and everyone is very convinced this is a
00:13:02
commodity business loads of debt loads
00:13:04
of capex you know one really
00:13:06
concentrated customer and that they're
00:13:08
completely
00:13:10
undifferentiated and I guess I would
00:13:11
just make a point which is in America if
00:13:15
you can pick any category any retail
00:13:18
category and if you can run a thousand
00:13:20
stores in 50 different states with
00:13:23
different preferences and have those
00:13:25
stores well lit clean stocked by
00:13:28
friendly employees es with the right
00:13:30
stuff in stock you will create a
00:13:32
business that is worth you know well
00:13:35
over 10 billion and that's sounds easy
00:13:37
but very few companies have been able to
00:13:39
do it I think what may be
00:13:42
underappreciated about cor weave is it's
00:13:44
actually really hard to run these big
00:13:47
training clusters everybody thinks it's
00:13:50
easy but to synchronize ttin of
00:13:53
thousands of gpus where they're melting
00:13:55
or cables are being
00:13:57
unplugged and you know you lose a bunch
00:13:59
of training data when it happens I just
00:14:02
think it's
00:14:03
not it may not be the commodity that
00:14:06
everyone thinks it is and it may turn
00:14:07
out that it's much harder to do than
00:14:10
people think would there be analogy for
00:14:12
that wouldn't there like people thought
00:14:14
AWS would never work at the beginning
00:14:16
they were like who's going to trust
00:14:17
Amazon with their compute and it was
00:14:20
difficult and it you know developers
00:14:22
didn't understand exactly how to
00:14:24
abstract their services into the cloud
00:14:26
yeah the world was convinced AWS well
00:14:29
lot of the world was convinced AWS was a
00:14:30
terrible business for the first few
00:14:32
years you know when Microsoft announced
00:14:33
they're going to transition to the cloud
00:14:35
it was very controversial because you go
00:14:37
from a capex light model to a capex
00:14:39
heavy model so you know Wall Street
00:14:41
consensus has been wrong before and I do
00:14:43
think core weave
00:14:45
runs these big GPU clusters as well as
00:14:49
anyone and there aren't that many people
00:14:51
on planet Earth who can run them well
00:14:54
and you know it's kind of easy you can
00:14:56
just look at the npv of their contracts
00:14:58
and the asset value and so everyone you
00:15:01
know who's kind of you know confidently
00:15:03
putting out all the negatives here like
00:15:05
I just think there are some offsetting
00:15:07
positives that it's good for you know I
00:15:10
think people to be aware of and consider
00:15:13
that's all I think it's a good company I
00:15:15
I would I would second I mean I think
00:15:17
it's a and it's a great business and I
00:15:18
think they deserve to be
00:15:21
successful totally true and it's great
00:15:23
to see a competitor to the existing
00:15:25
three or four clouds that are out there
00:15:26
and uh it's great to see a company go
00:15:28
public I mean m&a with whiz and now core
00:15:31
weave going public rol lenina KH is over
00:15:34
you got to give the administration a lot
00:15:36
of credit for maybe removing the
00:15:38
roadblocks to m&a and IPOs or at least
00:15:41
people perceive that so I don't know if
00:15:43
perception becomes reality here but does
00:15:46
seem like m&a is a bit on Far yeah Gavin
00:15:48
and and people are talking above and
00:15:49
beyond Wiz I mean cor we bought weights
00:15:51
and biases which I think is a really
00:15:53
interesting acquisition for them that
00:15:54
kind of kind of further differentiates
00:15:56
them and maybe decommodify them a little
00:15:58
bit uh but there have been quite a few
00:16:01
acquisitions by big companies of smaller
00:16:03
companies in the last month and I think
00:16:05
as none of the companies that have been
00:16:07
bought have been public maybe it's
00:16:08
flying a little under the radar but it's
00:16:10
happening in in I think a you know an
00:16:13
accelerating way and I think this would
00:16:15
be you know very good for the market and
00:16:17
animal spirits
00:16:19
and everything that we care about do you
00:16:22
think that there's any issues there was
00:16:23
a a bunch of companies added to the
00:16:25
export control list two days ago some
00:16:28
were in quantum Computing generally a
00:16:30
lot of it though was in the Nvidia
00:16:31
ecosystem so I think that the the US
00:16:34
government is really trying to make sure
00:16:36
that these next gen gpus don't go
00:16:38
directly to China but also don't go to
00:16:39
countries that could then redirect them
00:16:41
into China did you get a chance to look
00:16:43
at that or did your team look at that
00:16:44
yet oh yeah and I think this will be
00:16:47
part of you know the upcoming
00:16:49
negotiation between America and China
00:16:51
but it is hard you know it's like if we
00:16:54
can't you know if America cannot keep
00:16:56
illegal drugs out of you know out of our
00:17:00
own country these gpus are arguably
00:17:04
dramatically more valuable per unit you
00:17:08
know like a Blackwell is like you know
00:17:10
the size of this and it's just hard
00:17:14
particularly like you know America we're
00:17:16
trying to keep drugs
00:17:17
out here China is trying to bring the
00:17:20
gpus in and it's kind
00:17:23
of significantly you know I think harder
00:17:26
to prevent than than you know smuggling
00:17:28
of drugs now everybody does their best
00:17:31
but um yeah the United States I think
00:17:34
it's always going to be kind of a game
00:17:35
of cat and mouse until you get some sort
00:17:37
of grand bargain and right now they
00:17:40
they're allowed to sell certain kinds of
00:17:41
gpus into China and I'm sure they'll be
00:17:44
should we be doing that Gavin is is this
00:17:46
going to be an effective strategy you
00:17:48
know if you were advising the president
00:17:50
we just say ah just let Nvidia sell them
00:17:53
it's a Fool's eron to try to stop them
00:17:54
because they're all going to Singapore
00:17:56
or wherever Vietnam and and routing
00:17:59
their way around I think we're putting
00:18:01
enough friction into the
00:18:03
system that it does theoretically give
00:18:07
America an advantage at the cost of
00:18:11
creating tremendous incentives for China
00:18:15
to develop their own semiconductor
00:18:18
ecosystem and you know pressure to kind
00:18:22
of you know Necessities a mother of
00:18:24
innovation and these export controls are
00:18:27
creating an immense incentive for China
00:18:29
to be really algorithmically Innovative
00:18:30
and you saw that with deep SE where
00:18:32
there were some real algorithmic
00:18:35
Innovations yeah so said another way if
00:18:38
we squeeze too tightly on letting them
00:18:40
buy the Nvidia chips they might make a
00:18:42
better Nvidia I mean become resilient I
00:18:46
think they're doing it now they're
00:18:47
trying now so that's well they're trying
00:18:49
but I guess what are the chances they
00:18:51
succeed in your mind Gavin in creating
00:18:52
something competitive with or better and
00:18:55
then what would that say about the AI
00:18:57
race in the next five years I think zero
00:18:59
I think it's really really hard but over
00:19:02
the 10 years who knows and if you're the
00:19:05
CCP 10 years isn't that long if you're
00:19:07
America 10 years is an eternity yeah
00:19:10
they're thinking in centuries and we're
00:19:12
thinking in decades yeah that's probably
00:19:15
correct hey um let's pivot over to AI
00:19:17
agent since we're in the AI and
00:19:19
obviously there's other big topics this
00:19:21
week we'll get to you doing politics and
00:19:23
uh signal and all that kind of good
00:19:25
stuff but we have a company
00:19:29
that seems to be you know having a
00:19:32
moment it's called Manis uh m n it's
00:19:36
currently in private beta but they're
00:19:38
creating agents and we've been talking
00:19:40
about this agentic revolution basically
00:19:43
little you know jobs going out we used
00:19:45
to call them Crown jobs back in the day
00:19:47
but going out and doing things for you
00:19:49
and it seems to be working and it's
00:19:51
pretty impressive what do you think
00:19:53
about this company specifically if
00:19:55
anything and are we getting to a point
00:19:59
where we're going to have the same chat
00:20:01
GPT 2.5 moment but with agents and then
00:20:04
if we do have that Gavin what will that
00:20:07
look like in terms of employment and how
00:20:09
companies are run look I do think uh
00:20:12
if agents materialize as a reality and
00:20:16
you know Manis is maybe a little bit of
00:20:18
a chat GPT moment for that I would say
00:20:21
open Ai and anthropic anthropic
00:20:23
developed something called the model
00:20:24
context protocol that openai just
00:20:27
adopted I think it will become a
00:20:28
standard and it makes it really easy for
00:20:31
an llm like stripe can just integrate
00:20:34
with mCP and then any llm that uses mCP
00:20:38
can you know interact with
00:20:41
stripe and this is solving a big big
00:20:44
problem for agents um in terms of just
00:20:47
making them you know much easier to use
00:20:49
much more
00:20:51
standardized but if agents become a
00:20:54
reality one the ROI on AI and Blackwell
00:20:58
is going to be very high and two what
00:21:01
will it's not good for human
00:21:04
employment but what will be kind of I
00:21:07
would say the rate limiting factor is
00:21:09
just compute in a world where we all
00:21:12
have agents doing things for us all day
00:21:15
long it's going to be a long time before
00:21:18
we have enough compute in the ground for
00:21:21
that to be a really really widespread
00:21:24
reality and I think that's why you know
00:21:25
open AI was talking about pricing their
00:21:27
first agents at ,000 $20,000 a month
00:21:30
like this Roi on AI question I think to
00:21:32
me really does come down to agents in
00:21:35
the short term freeberg your thoughts on
00:21:37
these agents and the impact they could
00:21:41
have on running businesses employment
00:21:43
and just generally efficiency we now
00:21:45
starting to have some standards mCP
00:21:47
stands for model context protocol your
00:21:51
thoughts freeberg on how this might
00:21:53
impact you know architecting a business
00:21:55
which you're doing right now with ohal
00:21:56
how how might this change how people
00:21:59
work on a day-to-day basis let's maybe
00:22:01
give some examples for the audience look
00:22:03
I'll take a slightly different view than
00:22:05
Gavin I've said this in the past but
00:22:08
maybe I'll try and contextualize it a
00:22:11
little bit I think that the big unlock
00:22:14
with these kind of agentic systems is
00:22:17
not necessarily about replacing the easy
00:22:20
human tasks which everyone kind of
00:22:23
thinks are kind of the obvious
00:22:25
application of them I think what we're
00:22:27
missing is is the ability to unlock
00:22:32
really complex tasks that are not really
00:22:35
manageable today I
00:22:38
can't come up with a very Grand project
00:22:43
planning exercise with the team I have
00:22:45
today I have to go hire 30 people let
00:22:47
let me give you an example I want to go
00:22:49
build a plant breeding facility under
00:22:52
the ocean okay so how do I do that so to
00:22:56
do that today I'm like well I got to go
00:22:57
hire people that under understand oceans
00:22:59
I that understand engineering that
00:23:02
understand how to do underwater
00:23:03
engineering I have to hire material
00:23:04
scientists I have to hire physicists I
00:23:06
have to hire construction project
00:23:08
planners there's a whole group of
00:23:10
complicated people I would need to kind
00:23:11
of put together to be able to kind of
00:23:14
execute on that opportunity but now a
00:23:16
smaller group maybe three or four people
00:23:18
or two people can say okay let's use
00:23:20
these agents to help us build that
00:23:22
project plan and spec out every step of
00:23:24
the process Define how much everything
00:23:26
will cost what workloads are needed
00:23:28
who's going to do what so suddenly that
00:23:31
difficult project becomes a reality
00:23:32
here's another good example the
00:23:34
California highspeed rail program that's
00:23:36
ballooned to this hundred billion doll
00:23:37
what if we had a agents organizing and
00:23:39
running that program well maybe the cost
00:23:41
of that program and the reality of that
00:23:43
program makes it a reality now so it
00:23:46
suddenly becomes a program that we
00:23:47
launch we get it done we build this
00:23:49
railroad whereas all the people all the
00:23:51
complication all the confusion has and
00:23:53
whatever grift has been going on has led
00:23:56
to a hundred billion dollar balloon
00:23:57
budget with no outcome so I think
00:23:59
complex projects can actually be tackled
00:24:01
in an easier way that actually unlocks a
00:24:04
tremendous amount of building a
00:24:05
tremendous amount of opportunity for new
00:24:08
employment for people to come in and
00:24:10
small teams of three or four to get
00:24:12
hired that can now do the work of three
00:24:14
or 400 really deeply sophisticated
00:24:16
highly technical people with a very
00:24:18
small less technical group so I think
00:24:20
there's going to be a tremendous amount
00:24:22
of opportunity in biotech in Engineering
00:24:27
in Manufacturing in Urban Design in
00:24:31
transportation and on and on and on
00:24:33
where small groups are going to get spun
00:24:35
up that can use these systems uh to do
00:24:37
really complex projects it's less about
00:24:39
like oh you're going to replace call
00:24:40
centers like sure maybe but like what
00:24:43
are we going to be able to do with these
00:24:44
things that I can't even think about
00:24:45
doing today chamath let's level this up
00:24:48
and just talk about the bigger picture
00:24:49
which is our giant rival in
00:24:53
China they're actually catching up in
00:24:55
some cases exceeding us if they get to
00:24:58
AI first and then are able to execute on
00:25:01
this given their top- down controls uh
00:25:04
given the size of their population given
00:25:06
their advantages in manufacturing that
00:25:08
we're seeing now with xiaomi making
00:25:12
cars you know what uh byd is doing in
00:25:15
self-driving and cars what we're seeing
00:25:17
now with chips versus Nvidia it's kind
00:25:20
of getting set up that almost everything
00:25:22
we're building here in the US China's
00:25:24
copying at a very fast pace and then
00:25:26
exceeding so what's at stake here big
00:25:28
picture and then I guess we'll then look
00:25:31
at why what should our what should our
00:25:33
philosophy be you know on in a
00:25:36
geopolitical way yeah let's just do an
00:25:38
economics lesson why does
00:25:39
anybody invest they invest because you
00:25:43
let's just say a
00:25:44
dollar you want to generate a rate of
00:25:47
return that's better than all your
00:25:49
Alternatives and the riskier it gets the
00:25:52
more of a return you want right that's
00:25:53
the basic idea so if you invest a dollar
00:25:55
in bonds you can get five or six% if you
00:25:57
invest a dollar in an early stage
00:26:00
startup you want to get 50 or 60%
00:26:02
returns okay that's that's obvious but
00:26:05
the return that you generate is in part
00:26:08
driven by how profitable is this company
00:26:11
obviously and if you have a 300 person
00:26:14
group of people that has to do something
00:26:17
it's a lot harder for them to generate
00:26:18
profit and then to generate a rate of
00:26:20
return than it is if you have two or
00:26:22
three people so the
00:26:26
Chinese strategic comperative is no
00:26:29
different than small startups versus an
00:26:32
incumbent which is to be as hyper
00:26:34
disruptive economically as you can so I
00:26:39
think the big risk is not necessarily
00:26:42
Chinese but many of these Alternatives
00:26:44
will come from China which is to say
00:26:47
that where are the
00:26:49
incumbents most of the incumbents are
00:26:51
American companies if you look at SAS
00:26:54
software that's a perfect example of
00:26:56
where there is trillions of of dollars
00:26:58
the the software industrial complex as I
00:27:01
call it right that's like a three and a
00:27:03
half four trillion dollar industry it
00:27:06
grows by 10% a year so every year it's
00:27:09
adding 300 billion of quote unquote
00:27:12
Enterprise Value is that value that is
00:27:15
being created I think a lot of the
00:27:17
customers would say no so if you're a
00:27:20
startup or if you're China what is the
00:27:23
most disruptive thing you could do well
00:27:26
you could take a three-person team to
00:27:28
disrupt a 30,000 person team and blow a
00:27:30
hole right in the side of that trillion
00:27:32
economy that's the big risk so whether
00:27:35
the risk comes from here whether it
00:27:37
comes from the Chinese I think what
00:27:39
you're seeing is that if these agents
00:27:41
can scale the Opex the actual load of
00:27:45
making something will go down by an
00:27:47
order of magnitude and that is and maybe
00:27:50
even two orders of magnitude that is
00:27:52
incredibly disruptive because the
00:27:55
existing incumbents cannot compete with
00:27:57
that cost scale and Gavin to just bring
00:28:01
this around the horn Here China is
00:28:03
playing a different game and obviously
00:28:05
there's other competitors on a global
00:28:07
basis but they are subsidizing for
00:28:08
example their cars and their entire car
00:28:11
industry so the margin of cars here in
00:28:14
the United States and Germany and Japan
00:28:16
that's their opportunity they don't
00:28:17
actually need to make a profit on it
00:28:19
they could just break even there are
00:28:20
cars now 10 20 30 $40,000 cars now being
00:28:23
made there so this then leads us to oh
00:28:27
my goodness will Americans buy these
00:28:30
we're pretty great customer Will trump
00:28:32
block them with tariffs so let's make
00:28:35
the jump what would the Tariff policy be
00:28:38
if as chamat points out here we've got
00:28:41
this big broadside of our Battleship
00:28:43
that they can put a giant hole through
00:28:45
which is our software industry our car
00:28:48
industry pick and Industry that they
00:28:51
might be able to just blow a hole in
00:28:52
because they don't need to make a profit
00:28:54
they just need to have jobs and break
00:28:55
even
00:28:58
what should our tariff policy be or what
00:29:00
is it I mean we know what it is for
00:29:01
Autos it's 25 do we know what it is I
00:29:03
mean it seems like it's inlux so maybe
00:29:05
we start there what should the policy be
00:29:08
what do you perceive the policy is
00:29:11
because it does seem to be a moving
00:29:13
Target we'll see what happens on April
00:29:15
2nd because Trump keeps tweaking let's
00:29:18
say adjusting in
00:29:20
public yeah I mean this is so
00:29:24
traditional economics would say hey
00:29:27
tariffs are not a good idea we should
00:29:29
have free trade you know everybody
00:29:30
understands the principle of comparative
00:29:32
advantage I do think the Trump
00:29:34
Administration is pretty
00:29:35
convicted that that approach has not
00:29:39
worked well for America over the last 20
00:29:43
years and maybe it's worked well for
00:29:44
knowledge workers but it hasn't worked
00:29:46
well for kind of ordinary Americans and
00:29:49
I think they are very convicted in
00:29:51
changing that and trying to bring back
00:29:53
kind of good highquality manufacturing
00:29:55
jobs to America I think they see tariffs
00:29:57
as an eff way to do that are they right
00:30:00
is is it going to be because a lot of
00:30:02
what we're seeing in factories is
00:30:04
automation so what they may have been
00:30:06
right about tariffs bringing back
00:30:09
high-paying middle class jobs for the
00:30:10
past 20 years we cannot go in a time
00:30:12
machine and change that policy and isn't
00:30:14
where the Puck's going that we're going
00:30:16
to have Optimus robots figure robots
00:30:18
pick a robot company doing all this work
00:30:20
here's what tariffs do tariffs are a
00:30:23
level setting mechanism
00:30:25
that fixes a historical imbalance look
00:30:29
the reality is that we have had
00:30:32
meaningfully lower tariffs for products
00:30:35
coming in then those reciprocal tariffs
00:30:38
exist for our products going into these
00:30:41
other countries that's true and the one
00:30:44
thing I'll say about Donald Trump is you
00:30:46
may not agree with the tariffs but he's
00:30:48
been incredibly consistent I was on
00:30:51
YouTube
00:30:53
yesterday and I stumbled into an
00:30:56
interview he did Nick maybe you can find
00:30:58
this with Larry King in
00:31:00
1987 and he ran a full page ad in the
00:31:03
New York Times talking about this exact
00:31:05
issue and then went on Larry King and he
00:31:08
walked through the entire trade
00:31:09
imbalance 40 years ago yeah he's been on
00:31:12
this so this is not a fly by night thing
00:31:16
so what do they want what they want is
00:31:19
to create the economic incentives to
00:31:22
reshore as much industry as possible
00:31:25
into the United States the delicate
00:31:28
Balancing Act though is that after 20
00:31:30
years of
00:31:32
globalism and a perverted version of
00:31:35
free trade because it's not what it is
00:31:36
today it's been
00:31:38
perverted it is incredibly difficult to
00:31:40
do that without these whack-a-mole
00:31:43
problems emerging in other areas right
00:31:46
whether it's inflation or whether it's
00:31:48
retaliatory tariffs or consumption taxes
00:31:51
all of these complexities I think are
00:31:52
what has to get figured out but the
00:31:54
structural reason of why tariffs make
00:31:57
sense is not necessarily to overly
00:31:59
penalize one country over another but
00:32:01
it's simply to say if you charge 5% we
00:32:04
charge 5% if you charge 10% we charge
00:32:06
10% Nick has the clip you just just
00:32:08
listen to this from 40 years ago we
00:32:10
don't have free trade right now because
00:32:11
if you want to go to Japan or if you
00:32:12
want to go to Saudi Arabia or various
00:32:14
other countries it's virtually
00:32:15
impossible for an American to do
00:32:17
business in those countries virtually
00:32:19
impossible so the fact is that you don't
00:32:21
have free trade we think of it as free
00:32:23
trade but you right now don't have free
00:32:24
trade so Gavin let's get back to this
00:32:27
original question with chat's important
00:32:30
context Trump has been on this for a
00:32:31
while but is this where the Puck's going
00:32:34
we have the lowest unemployment of our
00:32:37
lifetime wages are obviously not where
00:32:39
we want them to be so is the right
00:32:41
solution to in put in a bunch of tariffs
00:32:44
create trade Wars and then hope that
00:32:46
people are going to build factories that
00:32:48
employ humans when in fact it probably
00:32:51
will be robots so is there another
00:32:54
solution like maybe raising the minimum
00:32:56
wage I don't know what are you your
00:32:57
thoughts well one I think it's jamat and
00:32:59
that clip Illustrated he is convicted in
00:33:02
this it's 40 years old it's happening
00:33:05
yeah it's happening and so I would say
00:33:08
two things like one I think it's all
00:33:10
something I'm always conscious
00:33:12
of at um my wife Becky one of her
00:33:17
college or High School reunions there's
00:33:19
a guy there who' been in her class and
00:33:20
had been in the Navy Seals and he
00:33:22
deployed to 80 countries he'd been the
00:33:23
Navy Seals for like a decade and I said
00:33:26
what's the one thing that you learned
00:33:28
and he said the one thing I learned is
00:33:30
everybody in America is always trying is
00:33:32
always focused on making America better
00:33:35
have youve been to 80 different places
00:33:37
all around the world our only goal
00:33:40
should be to not screw it up in America
00:33:42
just don't make it worse because America
00:33:44
is so much better than everywhere else
00:33:46
so the first thing is like you know chth
00:33:49
said the word delicate and I think
00:33:50
that's right and if I had one thought
00:33:53
for the administration it would be every
00:33:55
time they say the word tariff whatever
00:33:57
they think
00:33:58
Wall Street in the markets and I would
00:34:00
say you know I think a lot of Business
00:34:02
Leaders are convinced that tariffs are
00:34:03
bed now maybe Wall Street is wrong and
00:34:06
the administration is right one thing
00:34:08
everyone agrees on is deregulation is
00:34:10
good so every time they say the word
00:34:13
tariff they need to say the word
00:34:14
deregulation two or three times because
00:34:18
the best way to I think maximize the
00:34:20
odds of this policy succeeding despite
00:34:23
the headwinds from
00:34:24
automation I think it's going to be a
00:34:26
long time before we have hundreds and
00:34:27
millions of robots you know even between
00:34:29
China and Tesla I think it's going to
00:34:31
take a long time to make vast numbers of
00:34:34
humanoid robots the best way to
00:34:36
encourage this reshoring is just making
00:34:39
it easier to do business in America okay
00:34:42
100% can I just add one thing that's
00:34:44
really really important what Gavin said
00:34:46
there's a third thing I would add Gavin
00:34:47
to your list which is we need to figure
00:34:50
out the difference between manufacturing
00:34:53
and IP and I think what we want to do is
00:34:55
make sure that we trap the real value
00:34:57
back back in America as well look I've
00:34:59
told you guys a story before but when I
00:35:02
was helping to run Facebook I was a
00:35:03
signatory when we were setting up
00:35:05
Facebook abroad we exported all of our
00:35:07
IP to
00:35:08
Ireland and lo and behold who do they
00:35:12
sue Zach meta and me pink and we've been
00:35:17
in this 10year lawsuit 15year lawsuit
00:35:20
with the IRS because they're trying to
00:35:22
come back and say hey Facebook you owe
00:35:25
all of this money why because we
00:35:27
exported all of our critical IP to
00:35:29
Ireland and we trapped it there that
00:35:31
should not have been able to happen we
00:35:33
can fix it separately there's many
00:35:36
companies who are abroad who live inside
00:35:39
the American Market who have given a
00:35:40
mechanism would import their IP into the
00:35:42
United States if there was a mechanism
00:35:44
to do so so not only can you have
00:35:46
manufacturing you can also have the
00:35:48
critical knowledge not just of that
00:35:50
manufacturing but of that product of
00:35:51
that supply chain those are the
00:35:53
incentives that these nuances if we get
00:35:55
right it's really a Renaissance for the
00:35:57
United States let's talk a little bit
00:35:59
about maybe other Solutions
00:36:01
freedberg
00:36:03
obviously perhaps raising the minimum
00:36:05
wage or increasing corporate taxes in
00:36:08
order to do that would that not
00:36:10
also help us maybe build back the middle
00:36:14
class that is the criticism I think some
00:36:16
other people have we you know Trump when
00:36:17
he did his tcj ja if people remember the
00:36:21
tax cut and jobs act corporate tax rate
00:36:23
was 35% we put it down to 21 and now rep
00:36:27
ation of cash from overseas as chat's
00:36:29
pointing out I think it's only 15% it's
00:36:31
like everybody can kind of afford that
00:36:33
so would that not be another way to
00:36:37
solve this problem of the bottom half
00:36:39
the bottom third not making enough or
00:36:41
maybe even lowering their tax rate which
00:36:42
is already pretty
00:36:46
low well I think the proposal that I've
00:36:49
heard from this
00:36:50
Administration that we heard from Howard
00:36:53
lutnick when we met with him was they're
00:36:54
going to cut all taxes for people making
00:36:57
less than $150,000 a year so get the tax
00:37:00
rate to
00:37:01
zero do you believe that do you think
00:37:03
it's realistic now that it's after you
00:37:05
do that you actually think that could
00:37:06
happen I 100% do and in what timeline
00:37:09
and why well that's the key question
00:37:12
this is where this becomes like a first
00:37:14
and second derivative problem let's just
00:37:16
talk about it this way when you take
00:37:18
money out of the economy you want to
00:37:21
make sure you're also putting money back
00:37:22
into the economy in another way to keep
00:37:24
the economy stable or growing so if
00:37:27
you're taking money out of the economy
00:37:29
in the case of tariffs you're putting
00:37:31
money into the government's
00:37:33
coffers you're reducing people's
00:37:36
spending because everything costs more
00:37:37
now so consumers will spend less so what
00:37:40
you want to do is you want to make sure
00:37:41
that the money that you're
00:37:43
repatriating is going back to the
00:37:45
consumers so they can now have more
00:37:46
money to spend so that's why you want to
00:37:48
cut taxes at the same time that you're
00:37:50
increasing the Tariff rates so if you
00:37:52
increase the Tariff rates things cost
00:37:54
more the government is now making things
00:37:56
more expensive that's not good but at
00:37:59
the same time if I cut your taxes and
00:38:00
you got more money now than you did
00:38:02
before so you can now buy the things
00:38:04
that you were buying even though they're
00:38:05
a little more expensive the economy
00:38:07
should be able to remain stable or grow
00:38:10
at the same time if you're cutting
00:38:11
government spending that means that the
00:38:14
government can afford to take less taxes
00:38:17
in and so they can make that assessment
00:38:20
so these are all we've said it many
00:38:22
times these are all very related and to
00:38:24
Gavin's point you've got to cut
00:38:25
regulation at the same time so that the
00:38:27
incremental dollars flow into things
00:38:30
like automation onshore production so
00:38:32
the cost of things come down and so
00:38:35
again not a simple equation I would call
00:38:37
it a grand economic experiment the
00:38:40
analogy for me feels a little bit like
00:38:41
there's four freight trains kind of
00:38:43
passing by each other at very high speed
00:38:45
and you're trying to pass all the
00:38:46
ingredients to make a sandwich between
00:38:48
the windows of the freight Trends you're
00:38:49
trying to get them all over so you can
00:38:51
make this delicious sandwich and get to
00:38:52
this golden age that's the configuration
00:38:55
that it feels like they need to kind of
00:38:57
assess as and they're iteratively they
00:38:59
have to thread the needle is I think
00:39:01
your point and it's really hard to do
00:39:03
and you use the phrase experiment Gavin
00:39:06
you said before hey don't screw up this
00:39:09
amazing country and what we've got here
00:39:12
this sounds like a very high-risk you
00:39:15
know High dexterity maneuver it feels
00:39:17
like a a fighter plane like trying to
00:39:20
land on you know a very small you know
00:39:23
aircraft carrier can they pull this off
00:39:26
can they get to the tariffs working at
00:39:28
the same time inflation not spiking not
00:39:31
impacting employment getting rid of
00:39:33
people's taxes does this sound too
00:39:35
complex to you and too much too fast
00:39:38
what what is your honest thought Gavin
00:39:39
as you watch this as a capital allocator
00:39:41
are they going too hard too fast or is
00:39:42
it worth pursuing this experiment as as
00:39:46
freedberg framed it look Scott bent is
00:39:49
probably the single most respected or
00:39:51
was the single most respected macro
00:39:53
investor in the world like he really
00:39:55
understands the markets how they through
00:39:57
to policy policy flows back he's an
00:40:00
extremely smart talented guy they have a
00:40:04
coherent Theory you know I thought
00:40:06
Howard and Scott did a great job in the
00:40:09
last two episodes Absolutely yeah kind
00:40:11
of explaining the theory and the one
00:40:14
thing I would just say having you know
00:40:15
we all watched the first Trump
00:40:17
Administration he is adaptable he adapts
00:40:19
to
00:40:20
circumstances and the midterms now are
00:40:24
whatever whatever they are you know and
00:40:26
and pol iCal terms they're they're 15
00:40:29
months away from you know around the
00:40:30
corner yeah around the
00:40:32
corner so I think they're trying to do a
00:40:35
lot as quickly as they
00:40:37
can but I also think that if after a few
00:40:41
months it's you know 6 months nine
00:40:44
months it's not working they will adapt
00:40:47
and I think that's one reason there's
00:40:49
such an emphasis on reciprocity you know
00:40:52
and Vietnam came out and they lowered
00:40:53
their tariffs on American goods and
00:40:55
that's that's good and so I think the
00:40:58
out is oh you know maybe it's not going
00:41:02
quite the way we hoped we're going to
00:41:04
declare kind of hey we have a series of
00:41:06
grand Bargains with these countries
00:41:08
declare Victory maybe tariffs on
00:41:10
American goods are slightly lower
00:41:12
tariffs here are slightly higher feels
00:41:14
more
00:41:16
fair and you know move on to kind of
00:41:18
firmer ground of kind of
00:41:21
deregulation balancing the budget
00:41:23
cutting government spending and cutting
00:41:25
Government taxes commensurate with the
00:41:27
spinning Cuts so I think they're trying
00:41:29
the risky stuff first and if it doesn't
00:41:32
work they will attack quickly yeah that
00:41:34
was my perception especially after
00:41:36
hearing bent on the all-in pod great job
00:41:39
uh guys on getting those long form and I
00:41:41
think this is where the administration
00:41:42
is strong it's when they do a long form
00:41:43
discussion and you hear their thoughts
00:41:45
about it it doesn't sound as crazy as
00:41:48
when you know all due respect to the
00:41:50
president when the president is like I'm
00:41:51
going to go easy on them I'm going to go
00:41:53
hard on them you know and it's like a
00:41:54
reality TV show and who's going to get
00:41:55
fired this week you actually have two
00:41:58
incredibly thoughtful I will point out
00:41:59
Democrats lifelong Democrats around
00:42:02
Trump and I I think that's like a really
00:42:04
I had this crazy observation gabin I
00:42:06
don't know if you notic it as well you
00:42:08
know Trump lost his reelection campaign
00:42:11
and he filled his whole cabinet with a
00:42:12
bunch of Republicans this time he's
00:42:14
filled his whole cabinet and everybody
00:42:16
around him's a Democrat and he's gone to
00:42:18
a really unique concept here of how to
00:42:21
solve the US's problems which is get the
00:42:24
working man and woman a higher salary
00:42:27
and lower their taxes this this could be
00:42:30
like an incredible Grand bargain that
00:42:32
bent I think is the architect of and
00:42:35
letnik is you know the communicator and
00:42:38
and uh executor of you think they have a
00:42:40
chance of pulling this off what do you
00:42:41
if you had to handicap it I hope they do
00:42:44
as an American I hope they do I think
00:42:46
they for sure have a chance of doing it
00:42:47
they have a solid theory of the case
00:42:50
they need to execute well um I would say
00:42:52
Doge's efforts are important you know if
00:42:55
you can really cut a trillion dollars of
00:42:57
of waste Fraud and Abuse out of the
00:42:59
government government spending that's
00:43:01
good you know we should all agree As
00:43:03
Americans you know maybe Democrats they
00:43:05
want more government spending maybe
00:43:07
Republicans want less but for whatever
00:43:08
given level of government spending we
00:43:10
want it to be as efficient as possible
00:43:12
because if you're a Democrat that means
00:43:13
more services if you're a republican
00:43:15
maybe that means a smaller government so
00:43:17
I think they have a solid theory of the
00:43:19
case I think there's a reasonable chance
00:43:21
it will succeed but if it doesn't I
00:43:23
think they will tack quickly and the one
00:43:26
thing they can't afford is a recession
00:43:27
if they're focused on the def deficit a
00:43:30
recession blows out the deficit so they
00:43:33
will be ultimately sensitive to these
00:43:35
market-based forces you know rates stock
00:43:39
markets the foreign Cur foreign currency
00:43:42
markets trath you want to uh maybe wrap
00:43:45
this up for us here move on to some of
00:43:47
the other topics of the Week John Arnold
00:43:49
had a post this morning on X he was
00:43:51
saying the deficit this year is going to
00:43:54
be 1.9 trillion his best guess for 20 26
00:43:57
was 1.9 trillion and he was just kind of
00:43:59
asking his followers what they thought
00:44:02
if you listen to Howard last week what
00:44:04
he said is I'm going to raise a trillion
00:44:06
dollars and elon's going to cut a
00:44:08
trillion now if that comes to pass then
00:44:13
we have a balanced
00:44:15
budget if you ask the sharp money on
00:44:17
Wall Street their numbers range from 170
00:44:21
billion to 300 billion on the revenue
00:44:24
side so let's take the midpoint of
00:44:27
around 200 to 250 billion okay 250 if
00:44:30
the sharp money is right that means that
00:44:33
tariffs and all of that stuff will only
00:44:35
really raise a quarter of a trillion
00:44:38
which means that there's going to be
00:44:39
even more pressure on Elon he's going to
00:44:41
have to find not one trillion but 1.75
00:44:44
trillion again assuming that that $1.9
00:44:47
trillion deficit exists next year so
00:44:50
that's the math it is A2 trillion doll
00:44:53
Bogey and they have to fill it somehow
00:44:55
my intuition is that the waste Fraud and
00:44:58
Abuse is probably meaningfully more
00:45:02
significant than we think when we were
00:45:04
there we heard about one consulting firm
00:45:08
95 plus of all of their revenue
00:45:10
multi-billion dollar Revenue comes from
00:45:12
time and materials contracts with the
00:45:13
United States government we heard
00:45:15
throughout the week I've reposted it on
00:45:17
X $65 billion is paid out to Consulting
00:45:22
organizations Beyond just that one in
00:45:25
these time materials costplay contracts
00:45:27
if you start to add all of these up
00:45:30
today we just heard that the2
00:45:32
billion grift to Stacy abrs was canceled
00:45:35
and they're now starting a doj
00:45:38
investigation into how those dollars got
00:45:39
given to her all of these things start
00:45:42
to add up it may be the case that if
00:45:45
there's an upper bound on
00:45:47
tariffs that there will be more than a
00:45:50
trillion and Elon kind of fills in the
00:45:53
Gap but I think it's possible they are
00:45:56
looking Gavin also at military spending
00:45:59
and maybe cutting that 8% a year every
00:46:01
year for a couple years that's where big
00:46:03
dollars are are sitting and obviously
00:46:05
nobody wants to touch Social Security
00:46:06
despite I do have to point this out for
00:46:08
my besties you guys did a great job with
00:46:10
that interview and uh you know I just
00:46:12
want to say fmz for like trying to spin
00:46:15
it as you know letnik was trying to take
00:46:18
away people's Social Security they
00:46:21
literally took an hour plus interview
00:46:25
they clipped it to try to make it seem
00:46:28
like he was saying the opposite of what
00:46:30
he said he was saying the frauders will
00:46:34
be the first to respond not my mom my
00:46:37
mom would just you know call eventually
00:46:39
and say hey can I she would assume that
00:46:41
there was good intentions yes whereas
00:46:43
the fraud would be like oh man I got to
00:46:44
get here I think it's you know what
00:46:47
swier did the same thing no let me
00:46:48
finish my little thing here TR because I
00:46:50
don't want you guys have to defend
00:46:51
yourself listen I couldn't make it you
00:46:53
guys did these last minute interviews
00:46:55
mazeltov we missed you I thank you for
00:46:57
saying that I would have loved to be
00:46:59
there I will be at the next ones for
00:47:00
people who are saying like oh there's
00:47:02
some conspiracy there's no conspiracy I
00:47:03
had ski week these guys went to do
00:47:05
business or whatever they were doing and
00:47:06
to see their friends in DC and uh you
00:47:09
know these things happened very rapidly
00:47:11
uh and I wasn't able to get there bottom
00:47:13
line these were great substantive long
00:47:16
interviews from Democrats one of them a
00:47:19
gay Democrat by the way the highest
00:47:21
ranking gay Democrat who's ever been in
00:47:23
uh an Administration the left and the
00:47:25
media should be giving praise to these
00:47:27
interviews they should be studying them
00:47:29
and they're doing the exact opposite
00:47:31
they're trying to spin them into
00:47:32
something they weren't it's a gift what
00:47:34
the all-in podcast did to the American
00:47:36
people by showing them a long form
00:47:39
interview with the administration
00:47:41
explaining these details don't spin it I
00:47:44
think great I think it's great sorry I'm
00:47:46
pissed off about it piss me off I don't
00:47:48
think you should be pissed off I think
00:47:49
it's wonderful that these people lie I
00:47:51
think it's incredible that they just put
00:47:52
it out there and it just further erodes
00:47:56
what's happening I think if once Bobby
00:47:59
puts a nail in the coffin of Pharma ads
00:48:01
on TV byebye Anderson Cooper byebye all
00:48:04
these guys I think it's great I'm so
00:48:07
pissed off I'm sorry like when I see
00:48:09
people lie like that they should be
00:48:10
lying they should be lying they should
00:48:12
it's great they're because they will not
00:48:14
exist okay gav you're a neutral third
00:48:16
party go ahead no I just say three
00:48:17
really quick points like first what
00:48:19
Howard lutnick literally said was if we
00:48:22
can find a lot of waste Fraud and Abuse
00:48:24
we don't have to raise the retirement
00:48:26
age everybody talking about raising the
00:48:27
retirement age to 70 if we administer
00:48:30
these programs more efficiently we can
00:48:32
keep it at 65 and you know that's good
00:48:34
for everyone the second thing is it's
00:48:36
just interesting to me there's so much
00:48:38
doubt about this when the inspector
00:48:40
generals of you know both Biden and
00:48:43
Obama you know said there were hundreds
00:48:45
of billions of dollars of waste Fraud
00:48:46
and Abuse and I would just say someone
00:48:47
in my immediate
00:48:49
family has had their social security
00:48:52
their identity stolen and someone is
00:48:54
using their social security number to
00:48:56
collect unemployment benefits in Alabama
00:49:00
and this has been going on for two years
00:49:02
and they've been unable to stop it and
00:49:04
so you know you don't want to rely too
00:49:06
much on anecdote but I think this is
00:49:08
really happening and then just the third
00:49:10
thing I would just say is I do think you
00:49:13
know no one has ever raised no president
00:49:15
has ever raised my taxes more than Trump
00:49:17
did and I think they are pretty
00:49:19
convicted in their focus on normal
00:49:22
workingclass Americans and making their
00:49:25
lives better is actually genuinely their
00:49:28
North Star You can disagree with the
00:49:30
theory of the case you can disagree with
00:49:34
you know the the way they're
00:49:35
communicating it but I think their
00:49:37
intentions are good absolutely and you
00:49:40
know what he even said in the interview
00:49:42
if you if you really listen to it he
00:49:44
said he was disgusted by the idea that
00:49:46
you would even raise the Social Security
00:49:49
age I think we should by the way any
00:49:51
rational person I think the majority of
00:49:53
people say hey maybe it should go up a
00:49:54
year or two maybe we should have a
00:49:56
little auster here on the margins but no
00:49:59
of course not we can't talk about that
00:50:00
and um you know the the thing this
00:50:03
Administration could do better is
00:50:05
communication those two long form
00:50:06
interviews was a great step in the right
00:50:08
direction they should do more of those
00:50:10
and do should do a better job of
00:50:12
explaining this waste and fraud they're
00:50:14
doing a good job I give them like you
00:50:16
know a B+ but there's more work to be
00:50:18
done here and there's waste there's
00:50:22
overspending there's fraud and there's
00:50:24
abuse right these are like different
00:50:25
categories to get to the fraud that
00:50:28
takes building legal cases all that
00:50:30
stuff's going to have to be referred to
00:50:32
people we have a justice system here
00:50:33
it's going to take years to figure out
00:50:36
if somebody actually stole but waste and
00:50:39
overspending we're going to find that
00:50:40
pretty quickly so it's a process people
00:50:42
and I I I for one trust the process
00:50:45
because we're overspending massively
00:50:47
let's get to some other conversations
00:50:49
here I think maybe we start with J I
00:50:52
just think it is it is whether it's a
00:50:55
semiannual or quarterly something that
00:50:57
is like the Doge report and everything's
00:51:00
been audited and triple checked these
00:51:03
are the three categories this is what we
00:51:05
found I think something like that would
00:51:07
be very helpful I think they need
00:51:09
investigative journalists I'm I'm happy
00:51:10
to help with this I'll do a doge pod you
00:51:12
know listen I'm not part of the
00:51:13
administration everybody knows I was
00:51:15
never Trumper I'm independent blah blah
00:51:16
blah disclaimer disclaimer disclaimer I
00:51:18
would totally go in there and I would do
00:51:20
a do J why do you keep saying
00:51:23
independent and then you throw yourself
00:51:24
a label that says you're not independent
00:51:27
I'm telling people I I was a never
00:51:29
Trumper but if Trump is going to
00:51:30
surround himself with the moderate
00:51:32
Democrat are you truly
00:51:34
independent I like to think so I I try
00:51:36
to be independent call balls and Strikes
00:51:38
here on the program I'm not going to
00:51:39
bend the knee to the administration I'm
00:51:40
going to I'm going to be critical of
00:51:42
trump coin I'm going to be critical of
00:51:44
these deportations which we're going to
00:51:45
get to and I will say critical things
00:51:48
but I would go in there and I would do
00:51:49
the Doge pod with Elon or whoever in the
00:51:51
group is and go Point by Point through
00:51:53
these things to explain it to the
00:51:54
American public let's keep moving here
00:51:56
we got such a full docket I want to talk
00:51:58
about signal text our bestie and talk to
00:52:00
him about it I think that's yeah I mean
00:52:02
maybe I should go in there because
00:52:03
listen I don't even consider this like a
00:52:05
trump Administration now I consider this
00:52:06
a democratic moderate Administration
00:52:09
everybody around Trump now is a Democrat
00:52:12
I think I might be in I might be in you
00:52:13
guys look like you had a good time you
00:52:15
guys look like you had a good time last
00:52:17
week I kind of want to included it look
00:52:19
like fun did you vote for Trump I don't
00:52:22
want to bring in my vote I did not vote
00:52:24
for comma let's keep moving here I'm
00:52:26
going to keep dropping wow my go I did
00:52:28
not vote for KLA I couldn't vote for her
00:52:30
she said I don't want to say it
00:52:34
but anyway let's keep going I I don't
00:52:36
want to vote for somebody who was
00:52:37
selected I wanted to vote for somebody
00:52:39
who had a primary and the Democrats disr
00:52:41
OD for not having a speedrun primary
00:52:44
signal gate it's the biggest story in
00:52:46
America right now on Monday turning this
00:52:48
is incredible what a day no I me list
00:52:50
I'm going to call balls and shrikes
00:52:51
right now 70% of what they're doing I
00:52:53
agree with 30% I don't I'm going to get
00:52:55
to the 30% and human rights basis I
00:52:57
think you just admitted you voted for
00:52:58
Trump it's really incredible actually
00:53:00
anyway let's keep moving here I'm from
00:53:02
the great state of Texas I'll leave that
00:53:04
signal gate signal gate signal gate on
00:53:06
Monday the Atlantic published a story
00:53:09
titled the Trump Administration
00:53:10
accidentally texed me their War plan
00:53:12
somehow Atlantic editorinchief Jeffrey
00:53:15
Goldberg was added to a super high
00:53:18
profile signal group with our secretary
00:53:22
of state our vice president tulsy
00:53:25
bessent the CIA director the Secretary
00:53:28
of Defense how is this possible folks
00:53:31
they added a journalist the edin chief
00:53:33
of the Atlantic to their War planning
00:53:35
signal group they shouldn't be using
00:53:37
signal obviously to do this stuff and
00:53:40
inside this group they discussed the
00:53:42
plans to strike houy targets across
00:53:44
Yemen nobody noticed nobody checked that
00:53:48
the editor-in-chief of the Atlantic was
00:53:51
in the group
00:53:52
chat they included the exact t targets
00:53:57
the actions the timing of all of this it
00:53:59
was apparently cut and pasted from some
00:54:02
other system by heg our secretary of
00:54:05
defense and former Fox commentator
00:54:08
that's not a dig it's just a fact and
00:54:10
I'm not saying it as a dig
00:54:12
chth people are losing their mind over
00:54:14
this I could get into all the details I
00:54:15
think most people know it because it's
00:54:17
taking up the
00:54:18
whole all the oxygen in the room in the
00:54:20
media in the group chats number one
00:54:24
what's your general take on what
00:54:25
happened to how stupid is this how
00:54:27
ridiculous is it does it matter go ahead
00:54:30
Jam start us off here I think that what
00:54:33
folks have stopped talking about
00:54:35
entirely which I think is just worth
00:54:37
touching upon okay is what is actually
00:54:40
going on that
00:54:42
necessitated this group chat to be
00:54:44
created in the first place in such haste
00:54:48
so I have a couple of images that I
00:54:50
pulled just to explain what this issue
00:54:52
is so the problem that we have is that
00:54:56
somewhere
00:54:58
after the war with
00:55:00
Gaza Iran continues to fund these houti
00:55:05
rebels in Yemen and what do they start
00:55:07
to do they start to invade and flood
00:55:09
into the Red Sea and they start to block
00:55:12
up the suas canal in different points
00:55:14
making it very perilous for Freight
00:55:17
traffic to get there so what do folks do
00:55:19
they're either forced to go all the way
00:55:21
around the Cape of Good Hope or risk
00:55:23
attack through the Suz Canal so what do
00:55:26
you think happens
00:55:27
well the traffic through the Red Sea in
00:55:30
the sus Canal falls off a cliff and then
00:55:33
you would ask well why is that important
00:55:35
well the problem is that because of that
00:55:36
other chart and this chart prices start
00:55:39
to Skyrocket so if you're trying to ship
00:55:41
things even going into the United States
00:55:44
prices start to rise 30 40% going to
00:55:47
Europe prices are rising 300 and 400% if
00:55:50
you add that all together as Gavin said
00:55:53
earlier we're in this very delicate
00:55:55
moment where we're fixing all these
00:55:57
parts of the economy the thing we can't
00:55:58
have is productivity go down you can't
00:56:02
have a recession and so if you have a
00:56:04
bunch of input prices that go up or
00:56:06
trade slow down now you're bringing the
00:56:10
likelihood of a recession to the
00:56:12
Forefront so that's one thing the second
00:56:14
thing which was included in the group
00:56:16
chat is it turns out that nobody was in
00:56:19
a position to fight off these houthis
00:56:22
except the United States the British the
00:56:25
French all of their Naval capacity
00:56:28
wasn't strong enough or adaptable enough
00:56:30
to fight these folks off so the United
00:56:32
States had no choice but to attack these
00:56:35
guys and reset and so what happened now
00:56:38
all of a sudden traffic is reset right
00:56:42
volumes are back up by the third week of
00:56:44
March which is where we are now we're
00:56:46
back to where they were even a year
00:56:49
ago the price of shipping is now
00:56:51
contained the inflation risk is
00:56:53
contained the productivity hit is
00:56:55
contained
00:56:57
it's just
00:56:58
important that's the context why they
00:57:01
did the attack great I find it crazy
00:57:03
that we still actually for 95 articles
00:57:06
though Jason on Signal we have only less
00:57:09
than one article on this so I just
00:57:11
wanted the smart people listen to our po
00:57:13
to actually understand it the second
00:57:14
thing the second we're to send the bill
00:57:16
to Europe because this is really a
00:57:19
European problem because okay so we have
00:57:21
the whole Pacific Ocean we can accept
00:57:23
things through and you can go ports in
00:57:24
Texas or you go so the point is we're on
00:57:27
a shock so the point is we're on a shock
00:57:29
clock people had to act quickly here's
00:57:32
my big problem with signal I think it
00:57:33
was a [ __ ] up okay and I think I think I
00:57:37
think it was an important set of
00:57:39
decisions that had to be made but I
00:57:40
think the using signal was a mistake but
00:57:42
there's very one narrow reason why and
00:57:45
we've said this in our group chat the
00:57:47
signal desktop app is total and complete
00:57:50
garbage okay and when you build apps
00:57:54
somewhere along the way we were all told
00:57:56
all of us as app developers oh you need
00:57:58
to have an app on every endpoint it
00:58:02
needs to be available for Android it
00:58:03
needs to be available for the iPad it
00:58:05
needs to be available for your phone it
00:58:06
needs to be available for the desktop
00:58:08
and the problem is now you'll have a
00:58:11
computer at home you'll have a computer
00:58:13
In Your Den you'll have a computer at
00:58:14
the office some it person comes and
00:58:17
helps you install this stuff and now all
00:58:19
of a sudden instead having one attack
00:58:21
Vector you you have seven right so this
00:58:24
is insanity so
00:58:26
it's a mistake it's a stupid mistake but
00:58:29
I think it's a mistake and so I think
00:58:30
like you know let's give it two
00:58:32
scaramucci I think we'll forget about it
00:58:35
give it a scarci or to should somebody
00:58:37
resign should somebody be fired no no no
00:58:39
I think these are mistakes and I think I
00:58:41
think by the way sorry the other thing
00:58:42
is John rackliff was very clear there
00:58:44
are very clear procedures that they
00:58:45
inherited which is no administration's
00:58:47
fault but there's some security it
00:58:49
person that writes these things it's
00:58:52
approved and so rewrite those things to
00:58:54
be more normal your thoughts here do you
00:58:57
have a
00:58:58
take so I think this issue will become
00:59:02
one of whether or not government
00:59:06
officials can use signal and apps like
00:59:11
it for
00:59:13
communication this is a controversy
00:59:15
that's been around for some time but
00:59:16
it's actually being tried in the courts
00:59:18
right now there's I think four Active
00:59:21
cases so the federal records Act was
00:59:24
originally passed in 1950
00:59:26
and then there was this amendment
00:59:28
related to electronic communications
00:59:30
that was passed in
00:59:31
2014 and the federal records act says
00:59:34
all government officials and employees
00:59:36
have to create maintain and preserve
00:59:38
adequate and proper documentation of
00:59:40
activities transactions decisions
00:59:42
policies and other business that's the
00:59:44
law that's the law and it says adequate
00:59:46
and proper documentation is defined as
00:59:48
records that clearly document the
00:59:49
government's decisions and actions and
00:59:53
that can be preserved and retrieved for
00:59:54
accountability transparency and
00:59:56
hisorical purposes and then we have the
00:59:57
foil laws which allow you as a citizen
01:00:00
or as a journalist to go make a request
01:00:01
Freedom of Information Act this is to
01:00:03
have a functioning democracy what you're
01:00:06
talking about here freeberg is people
01:00:07
who work for us should not be able to
01:00:09
endr run their communication and that's
01:00:12
the law yeah the Foya provides access to
01:00:14
government records because our taxpayer
01:00:16
dollars pay for the government to do its
01:00:17
work and therefore access so the
01:00:19
question is is the particulars of the
01:00:22
communication that's taking place
01:00:24
amongst these individuals in this case
01:00:26
and in the daily work done by government
01:00:29
officials that's like this where people
01:00:32
are updating one another or talking with
01:00:33
one another about things does that have
01:00:36
restrictions around preservation of
01:00:39
Records under the federal records Act
01:00:40
and the amendment that came out in 2014
01:00:43
and so there were a bunch of lawsuits
01:00:44
one is the competitive Enterprise
01:00:46
Institute against the OSP the office of
01:00:48
Science and Technology policy in
01:00:50
2016 where using email accounts and
01:00:53
Communications that weren't properly
01:00:54
archived or preserved was challenged by
01:00:57
this institute and the DC Circuit Court
01:00:58
of Appeals ruled that the officials who
01:01:01
use private email for official business
01:01:03
must copy or forward email
01:01:04
Communications government accounts to
01:01:05
comply the citizens for responsibility
01:01:07
and ethics in Washington act sued the
01:01:09
Trump Administration in 2017 and this is
01:01:12
ongoing in multiple forms right now in
01:01:14
the courts where there's a lot of
01:01:17
procedural
01:01:18
complexity but the courts have generally
01:01:20
said that they emphasize that these
01:01:22
officials are obligated to preserve
01:01:24
official Communications and that failure
01:01:27
is violating the laws then there's
01:01:29
Judicial Watch versus Department of
01:01:30
Homeland Security and then there's
01:01:32
National Security archiv versus Mike
01:01:34
Pompeo the state department 2019 which
01:01:36
is also still in the courts and I think
01:01:39
from these cases and this particular
01:01:41
incident there's going to become much
01:01:43
greater kind of call it Clarity and also
01:01:46
a better understanding of the
01:01:48
consequences of what communication do
01:01:50
you need to preserve records of and what
01:01:53
communication are you allowed to have
01:01:55
off the Record that you what do you
01:01:56
think freeberg I mean we get it there's
01:01:58
a what do you personally think like what
01:02:00
do you David freeberg the sulan of
01:02:02
science think I think it is
01:02:04
counterproductive to have every piece of
01:02:06
communication foilable and kept in the
01:02:08
public record I think that's a mistake
01:02:10
and I'll tell you why when you're making
01:02:12
a business decision let's say you're
01:02:13
making an HR decision the management
01:02:15
team sitting around they're talking
01:02:16
about a particular candidate or person
01:02:18
at the company should we give this
01:02:19
person a raise should we terminate
01:02:21
someone you don't want to have a record
01:02:22
of that that employees can then go pull
01:02:24
up and see and understand because it
01:02:26
will have a really muing effect and a
01:02:29
dampening effect on the types of
01:02:31
conversation on the authenticity of the
01:02:33
conversation on the productivity of the
01:02:35
conversation that you will be able to
01:02:37
have if you're forced to say this is
01:02:39
always going to be in the public domain
01:02:40
true and so I do think that this idea on
01:02:43
like how did you make a decision and
01:02:45
what was the action that you took those
01:02:48
to me feel like they should be recorded
01:02:50
and they should be foilable but all of
01:02:53
the background material all of the noise
01:02:55
all of the dialogue that leads to
01:02:58
that I do not think that should be
01:03:00
foilable and I think that you need to
01:03:02
justify the actions and the decisions
01:03:03
that you're making as a government
01:03:04
official but I don't think that you need
01:03:06
to have a record personally of
01:03:08
everything that led up to that action or
01:03:10
that decision because I think that that
01:03:11
will be really deeply unproductive let
01:03:13
me give a take
01:03:15
here this is a serious issue they
01:03:17
shouldn't be doing it for obvious
01:03:19
reasons it's very easy to hack personal
01:03:21
phones and they do have a way to do this
01:03:24
which is called the skiff and there's
01:03:26
other places for them to have secure
01:03:28
communication and as you point out they
01:03:29
work for the American people they should
01:03:31
be a record of this they're breaking the
01:03:33
law by doing this so the the the
01:03:35
administration should not be breaking
01:03:37
the law obviously we don't want them to
01:03:39
do that also hexa clearly
01:03:42
took a report of the attack plan cut and
01:03:46
pasted it from a some server somewhere
01:03:48
and then pasted it over this is a known
01:03:50
Vector your your clipboard is what it's
01:03:52
called and this is an attack Vector that
01:03:54
you know anybody who's in
01:03:56
or has basic security training knows
01:03:59
that you can get your clipboard hacked
01:04:01
very easily they need to take ownership
01:04:04
of it and this is one of the things that
01:04:05
this Administration and this group does
01:04:07
very poorly instead of taking ownership
01:04:10
like chamad said here just take just own
01:04:11
it no big deal this is a you know a
01:04:14
chance for us to learn and iterate on
01:04:16
the security protocols yada yada we
01:04:17
apologize let's move on they attack and
01:04:21
this is Trump's like Playbook we have to
01:04:23
attack the journalist so what did they
01:04:24
do they attack the journalist they take
01:04:26
no ownership and the second thing which
01:04:28
this Administration really has an
01:04:29
Achilles heal for is on top of just
01:04:32
taking not taking ownership and
01:04:34
attacking um the hypocrisy because this
01:04:37
was the entirety of the anti-hillary
01:04:39
movement was oh my God she did this
01:04:42
exact same thing with her email and
01:04:44
Republicans had a long list of oh my God
01:04:46
here's hold on I'll finish you'll get
01:04:48
your chance sham to defend your boys the
01:04:51
point is it's complete utter hypocrisy
01:04:54
and it's distasteful to attack the
01:04:56
journalist which you added this is
01:04:57
incompetence it's a mistake own it well
01:05:00
hold on and then every single person's
01:05:02
phone has to get dumped now and so
01:05:05
they're not doing a good job
01:05:06
communicating what they're going to do
01:05:07
to make sure that somebody hasn't gotten
01:05:10
onto everybody's personal phone why are
01:05:12
they doing this on their personal phones
01:05:14
as chth you very much pointed out these
01:05:17
are attack vectors they should be using
01:05:19
the phones issued to them for these
01:05:21
communications not their personal
01:05:23
devices goad the first thing is I think
01:05:26
you're wrong about the fact that they
01:05:30
don't have an adequate claim with this
01:05:32
journalist I think it's fair to ask what
01:05:35
is the ethical standard that that
01:05:37
journalist should have had if you're
01:05:39
added to something you know it's
01:05:42
inappropriate the guy just sat there
01:05:44
lurking you don't know how it was added
01:05:47
Jason you're speculating it could have
01:05:48
been Sure hold on it could have been
01:05:50
injected okay it could have been
01:05:52
injected into a laptop nobody knows yet
01:05:55
this is why I think just admit what
01:05:58
happened was a mistake I think they did
01:06:00
that they're looking into it let them
01:06:02
look into it I don't think you need to
01:06:03
have scalples and heads and all this
01:06:05
other stuff but I do think it's
01:06:07
important to say why was this guy
01:06:09
lurking about okay what ethical standard
01:06:12
should he have at C he had none and by
01:06:14
the way this guy oh no that's ridiculous
01:06:15
you're so wrong with this he he tried to
01:06:18
figure out okay your opinion is wrong in
01:06:19
this case respect he tried to figure out
01:06:22
what was going on here and then when he
01:06:25
did figure out it he contacted them and
01:06:27
removed himself he didn't stay on there
01:06:29
indefinitely if he did that that would
01:06:31
be wrong but for him to be added to
01:06:33
something he may have he may have been
01:06:35
being attacked himself and the other
01:06:38
reason you're wrong is they went on the
01:06:39
attack immediately and they denied that
01:06:42
there was anything wrong they did not
01:06:44
take ownership of it and that's why
01:06:45
we're having this debate right now is
01:06:47
they don't take ownership of these
01:06:48
things Marco Rubio did say someone made
01:06:51
a big mistake there were no
01:06:54
consequences we learned we're going to
01:06:56
do better and he is a secretary of state
01:06:58
so someone in the
01:07:00
administration did say that this was a
01:07:02
mistake yeah and the other guys attacked
01:07:03
a journalist so that's what I find
01:07:04
distaste no no but hold on a second
01:07:06
Trump said it was a mistake too I don't
01:07:07
think these guys it it is it's a mistake
01:07:09
so fix it and move on but the point
01:07:12
should be what is the mistake the
01:07:14
mistake is the security protocols that
01:07:18
these guys rely on I don't I'm going to
01:07:21
just go out on a limb as expert as they
01:07:23
are in policy I think they're in experts
01:07:25
in technology so there is probably
01:07:29
somebody that is responsible for how all
01:07:31
of these folks communicate how all of
01:07:34
these folks get software installed on
01:07:36
their multiple devices okay how they get
01:07:38
new devices it I'm guessing that it's
01:07:40
not them so I think that they're using
01:07:44
their personal devices I think that's
01:07:46
the problem why why is anybody in
01:07:48
government using a personal device to
01:07:51
Share Plans how do you know that for
01:07:53
because they said it was their personal
01:07:55
device
01:07:56
they've said it this has been
01:07:57
established that they did this on their
01:07:58
personal devices that that that's
01:07:59
totally established now okay um so and
01:08:03
they have skips for this so I I just
01:08:04
don't understand why they don't just
01:08:07
their but again I'm saying the bigger
01:08:09
issue is that they had to
01:08:10
operationalized quickly they weren't in
01:08:12
a position to be together the importance
01:08:15
of the issue is getting lost it was an
01:08:17
important issue that has consequences
01:08:19
they're all within 10 ft of a skiff at
01:08:21
all times their their SUVs are Skiffs
01:08:23
their offices are Skiffs scav you have
01:08:25
any final that's why before we move on
01:08:26
to the yeah I would just say I thought
01:08:28
the contents were interesting and that
01:08:30
there are a couple of things you know
01:08:31
there's all this you know oh the Trump
01:08:33
Administration is you know coing up to
01:08:36
Russia and you know trying to blow up
01:08:38
these you know this post World War II
01:08:40
alliance with Europe there are two
01:08:42
things one they said we are the only
01:08:44
people on our side of The Ledger who can
01:08:48
deal with the houthis and our side of
01:08:51
Ledger meaning like recognizing kind of
01:08:54
Europe you know tradition alliances the
01:08:56
good team the good team so I thought
01:08:58
that was interesting that just for all
01:09:00
the rhetoric they're conscious of who's
01:09:02
the home team and second they made it
01:09:05
was very clear to everyone in that chat
01:09:06
and JD van raised it 3% of America's
01:09:09
trade goes through the sus Canal 40% of
01:09:13
Europe's trade so we are really doing
01:09:15
this it will help us a little bit but it
01:09:18
will help Europe a vast amount and we're
01:09:21
doing something that helps them that
01:09:23
they cannot do now hey they're asking
01:09:26
that they want to be paid but I just
01:09:28
think it made me think that behind the
01:09:30
scenes a lot of this rhetoric about you
01:09:33
know the US and the European Schism is
01:09:35
overblown and we're still helping them I
01:09:38
thought that was interesting yeah I
01:09:40
think it's important note okay let's
01:09:42
move on to our final two stories the
01:09:44
Trump Administration has deported 238
01:09:46
alleged gang members to a pretty severe
01:09:50
prison called Cott CE coot prison in El
01:09:53
Salvador here's a clip of them being
01:09:55
dragged out of the United States and put
01:09:57
into this
01:10:00
extremely
01:10:01
notorious prison this was all done under
01:10:04
the alien enemies Act of 1798 this
01:10:08
allows the president to detain and
01:10:09
support individuals without due process
01:10:12
from quote an enemy Nation during an
01:10:14
invasion or quote predatory incursion
01:10:17
it's been used before but only during
01:10:18
actual Wars FDR used it to deport
01:10:21
thousands of Germans Italians Japanese
01:10:23
during World War II the Trump
01:10:25
Administration is claiming that the gang
01:10:27
members were sent to the US
01:10:29
intentionally calling them a hybrid
01:10:31
criminal State not surprisingly most of
01:10:33
them were not all of them had criminal
01:10:34
records in the US uh this was confirmed
01:10:36
by ice and obviously some number of
01:10:40
them appear to have been misidentified
01:10:44
as gang members or terrorists I can tell
01:10:45
you you know coming from a law
01:10:47
enforcement family and just looking at
01:10:49
the statistics out of 238 you're not
01:10:51
going to bat a thousand so maybe you get
01:10:53
a couple of these wrong former pro
01:10:55
soccer player jersey Rees baros he fled
01:10:59
Venezuela after being tortured by the
01:11:01
government for protesting he's a
01:11:03
refugee he has been mistaken for a gang
01:11:06
member according to his people because
01:11:09
he's got an arm tattoo supporting his
01:11:11
favorite Club Real
01:11:13
Madrid and there is a social media post
01:11:17
that ice officials believe
01:11:19
featured him making gang signs but it
01:11:22
was actually the language for I love you
01:11:24
according to to his attorney second
01:11:27
example a shoe salesman and social media
01:11:29
influencer noberto Rodriguez he fled
01:11:32
Venezuela for Columbia out of
01:11:33
desperation because he and his family
01:11:35
were starving he's a father of three he
01:11:37
was also suspected because of a tattoo
01:11:39
which features playing cards and dice
01:11:41
his family says he got to he got it to
01:11:43
cover a scar on his forearm and third
01:11:46
and final example stylus and makeup
01:11:49
artist Andre Hernandez he is being
01:11:52
represented by the immigration Defenders
01:11:54
Law Center
01:11:56
he claims he has no criminal history he
01:11:58
sought Asylum after fleeing Venezuela
01:12:01
where he was persecuted for being
01:12:03
gay again his arrest was based on
01:12:06
tattoos that is attorneys claim are not
01:12:09
gang affiliated this has caused the US
01:12:12
District Judge to pause these
01:12:14
deportations the Administration has
01:12:17
apparently continued these deportations
01:12:19
and they're even gloating by doing
01:12:21
videos highly produced videos
01:12:25
threatening people with the prison in El
01:12:28
Salvador again the seot your thoughts
01:12:32
chth on this extradition process if any
01:12:36
I mean as long as there's a mechanism
01:12:40
for these mistakes to get
01:12:43
rectified seems like the overwhelming
01:12:46
majority of these folks should
01:12:48
not have been in the United States and
01:12:50
we part of illegal criminal
01:12:52
organizations okay so there should be a
01:12:54
mechanism Gavin your thoughts if
01:12:56
innocent people were sent to a prison
01:12:59
like that's a terrible mistake and you
01:13:01
know that that
01:13:03
happens and it shouldn't happen and
01:13:05
hopefully it gets rectified but I guess
01:13:07
my bigger thought is a little bit you
01:13:10
know the this Administration and as we
01:13:12
discussed they have a really ambitious
01:13:14
agenda they want to fundamentally change
01:13:16
America in the ways that they think will
01:13:17
be better for kind of blue Coller normal
01:13:19
working Americans and things like this
01:13:23
you know signal gate if you if they made
01:13:26
a mistake and sent innocent people to
01:13:28
this prison there's only so many of
01:13:31
those mistakes they can afford before
01:13:33
they lose kind of the Mandate necessary
01:13:36
to accomplish their
01:13:38
goals and you know hopefully it's you
01:13:41
know we're we're whatever we're not even
01:13:44
into the you know third full month 66
01:13:47
days 66 days we're into the third month
01:13:49
but um we're 4.5% of the way through the
01:13:53
second term and it feels like
01:13:55
yeah six gamucci in yeah it's brutal It
01:13:59
Ain't Easy here this is such a good
01:14:01
point though Gavin continue they just
01:14:03
execution matters like if they they to
01:14:07
accomplish their goals they need to
01:14:09
execute at a high level and
01:14:12
communicate clearly and effectively and
01:14:16
just if innocent people were sent to you
01:14:19
know this prison mistake signal gate
01:14:23
look you know hey maybe it's a big
01:14:24
mistake it's a small mistake depending
01:14:26
on where you sit I thought Marco Rubio's
01:14:27
response was good but just like I think
01:14:30
execution is important for them to
01:14:32
accomplish their goals great freeberg
01:14:34
any thoughts here I do not agree with
01:14:38
sending people to prison or Detention
01:14:40
Center that due
01:14:42
process I felt similarly that Guantanamo
01:14:45
Bay because I don't think
01:14:47
it matches the rights and the values
01:14:50
that the United States should stand for
01:14:52
I think it's different if you believe
01:14:54
that they're here illegally part of a
01:14:55
criminal Enterprise and we don't want to
01:14:56
try them in courts here then we should
01:14:58
ship them back to a port of departure
01:15:00
somewhere else in another country maybe
01:15:01
it's back to Venezuela and let their
01:15:04
courts try them but I will talk a little
01:15:05
bit about this El Salvador motivation as
01:15:08
you guys know the El Salvador prison
01:15:11
that they set up for putting the um the
01:15:12
gang members in had a radical impact on
01:15:15
living standards in the country in 20 15
01:15:19
the homicide rate per capita in El
01:15:21
Salvador was 103 people per 100,000 so
01:15:25
out of every thousand people were
01:15:26
murdered every year they introduced this
01:15:28
aggressive policy of rounding people up
01:15:30
without you process and putting them in
01:15:31
this prison and through that action they
01:15:34
were able to reduce the homicide rate
01:15:36
per capita below two per 100,000 which
01:15:39
is what it was last year
01:15:41
1.9 so it had a radically positive
01:15:43
effect on society but obviously at the
01:15:46
cost of a value that we in the United
01:15:48
States hold dear which is the the value
01:15:51
of due process and and the importance of
01:15:53
due process because all it takes is one
01:15:54
innocent life being locked up but so
01:15:57
you're saying El Salvador there was no
01:15:58
due process there was no due process and
01:16:00
so there are plenty of stories if you
01:16:02
watch the documentaries on this prison
01:16:04
there are plenty of stories of people
01:16:05
that later were released when they were
01:16:07
found to be completely innocent and
01:16:08
randomly rounded up or caught up in a
01:16:10
sweep or something that they shouldn't
01:16:11
have been at um and there was actually
01:16:14
one fascinating interview I saw of one
01:16:16
of the guys who spent over a year in the
01:16:17
prison was completely Innocent but he
01:16:20
said you know what it was worth it
01:16:22
because the government's been able to
01:16:23
clean up the streets I got to find this
01:16:25
clip but I was really like shocked I
01:16:27
couldn't believe that a guy that spent a
01:16:28
year in this prison actually had
01:16:29
something positive to say because it was
01:16:30
such a say that to get out who knows you
01:16:33
know well it was such a profoundly
01:16:34
difficult place to live in El Salvador
01:16:37
and we've all heard these stories but I
01:16:38
do think that there's an a cue being
01:16:40
taken by this
01:16:43
Administration that there's a way to
01:16:45
kind of very quickly resolve to a
01:16:47
positive outcome with respect to
01:16:48
immigration and crime but I do think
01:16:50
Gavin's point is right that we do have
01:16:52
to have some boundary conditions
01:16:53
particularly as it relates to human
01:16:56
rights that we do value here in this
01:16:58
country and as long as there's a court
01:17:00
trial as long as there's a judge as long
01:17:01
as there's some sort of it doesn't need
01:17:03
to be a jury of peers but as long as
01:17:05
there's some evidentiary hearing to make
01:17:07
the determination that someone is you
01:17:10
know likely this criminal makes sense
01:17:12
but again I'm much more in favor if
01:17:14
there's going to be forced movement of
01:17:16
people I don't think that they should
01:17:18
necessarily be moved into a prison as
01:17:20
much as moved to a port of departure and
01:17:22
have them tried in another country if is
01:17:25
a crime or we try them here and put them
01:17:26
in prison I agree so much with what you
01:17:29
just said due process is important like
01:17:32
America like human rights are a core
01:17:34
American value that was great you
01:17:36
acknowledged that like the outcome in El
01:17:39
Salvador was good homicides down 99.9%
01:17:43
lots of lives saved and just you know
01:17:46
there needs to be a balance between
01:17:48
these yes then let me ask you guys a
01:17:50
question very pointed question if you
01:17:51
guys could Implement an El Salvadorian
01:17:54
Style
01:17:55
incarceration system
01:17:57
tomorrow and it would have the exact
01:17:59
same effect on American Crime so yeah C
01:18:03
by with and and and I'll give you
01:18:06
there's a four or five% error rate would
01:18:09
you do it would the benefit of the safer
01:18:14
Society be outweighed in your minds by
01:18:17
the error rate or not absolutely not
01:18:20
most people would say yes because they
01:18:22
would view it wouldn't affect them and
01:18:24
then the two 5% of people who have
01:18:26
family members who are innocent get
01:18:28
locked up I get that I'm saying what do
01:18:29
you think yeah I I I wouldn't compromise
01:18:32
that value yeah yeah we don't want to
01:18:33
compromise that value it's incredibly
01:18:35
dangerous yeah incredibly dangerous
01:18:37
we've been riding on a bit of a high and
01:18:40
I think there's a couple of things here
01:18:42
this Administration could do better and
01:18:44
communicating when they make a mistake
01:18:46
and then human rights is such a core
01:18:48
part I believe me Jason calanis believes
01:18:51
that there is a sadistic nature to this
01:18:53
Administration is an Achilles heal for
01:18:55
them and when you see them doing videos
01:18:59
from these prisons and saying this is
01:19:01
going to happen to you and this prison
01:19:03
is known for torture and this prison is
01:19:05
known for just absolutely the most
01:19:07
abhorent issues in the world this is the
01:19:10
sadistic nature of this Administration
01:19:13
that I think they need to drop because
01:19:14
it is going to derail them and people
01:19:16
care in this country deeply about human
01:19:18
rights and process and there is a
01:19:20
constitutional issue right now because
01:19:23
Trump and this Administration is
01:19:25
disobeying the court when they say hey
01:19:27
let's slow down here there is no cost
01:19:30
zero cost to Americans sending these
01:19:32
people to a was station and
01:19:34
investigating each of these cases to
01:19:36
make sure we don't send a gay
01:19:37
hairdresser to El Salvador another
01:19:40
country to be tortured in prison if that
01:19:42
is in fact the case and it is Against
01:19:46
All American principles to not have due
01:19:48
process and to have innocent people
01:19:50
potentially go to jail and what all
01:19:52
Republicans should do is here is say
01:19:54
this is going to derail the
01:19:56
administration these are the things that
01:19:58
will build up over time and people just
01:20:01
pragmatically speaking people in America
01:20:04
who are rooting for this Administration
01:20:06
to do some good things like I am when
01:20:08
they do stuff like this and I represent
01:20:10
a large swath of people it loses them
01:20:12
votes and this is why they I predict
01:20:15
this is why they will lose the mid turns
01:20:17
if they continue to do this type of
01:20:18
stuff that's my position it's not
01:20:20
virtual signaling I've cared about human
01:20:22
rights long before the all-in podcast
01:20:23
existed I my first job was working at
01:20:26
Amnesty International and this is a
01:20:29
giant Mistake by this Administration
01:20:30
Gavin you had some thoughts this whole
01:20:32
debate is a question of ins versus means
01:20:35
and it's like we all agree that the
01:20:37
homicide rate down
01:20:39
99.9% and Al Salvador is a good outcome
01:20:42
it's a good end and this is one of the
01:20:44
great philosophical questions and it's
01:20:48
you know we can debate it
01:20:50
endlessly and there has to be a balance
01:20:53
between the two human rights are a core
01:20:55
American value and I agree I think with
01:20:58
a lot of what David said but I also
01:21:00
think if you are you know going back to
01:21:02
that homicide rate the Trump campaign
01:21:05
you know they spoke to the mothers and
01:21:08
the families of people who were brutally
01:21:10
murdered or raped and
01:21:13
murdered by um people who were illegal
01:21:17
immigrants and were convicted criminals
01:21:20
in their home country and were known
01:21:22
convicted criminals and some how still
01:21:25
were not apprehended and then committed
01:21:27
terrible crimes that were very similar
01:21:29
to the crimes they committed there you
01:21:30
have a lot of compassion for the victims
01:21:33
too but all they have to do like one of
01:21:35
I thought elon's best moments and I
01:21:37
think you know it's what doge is doing
01:21:39
is great these are brilliant people
01:21:41
working hard for
01:21:43
free to do things that have never been
01:21:45
done before in the government in terms
01:21:47
of efficiency and kind of modernizing it
01:21:49
but you know Elon said at one of the at
01:21:51
the first press conferences listen we're
01:21:53
going to make mistakes and then we're
01:21:54
going to quickly correct them so to me I
01:21:58
think all the administration needs to
01:21:59
say and I do think more due process to
01:22:02
David's point is good is like listen if
01:22:04
we made a mistake it's terrible and
01:22:07
we're going to fix it
01:22:08
immediately and it just it bring gives
01:22:11
you so much credibility when you say
01:22:13
that
01:22:15
agreed but isn't due process happening
01:22:17
how else would you guys know that three
01:22:20
out of the 238 were miscast the fact
01:22:24
that you know that means the process is
01:22:25
working I I think the question is what
01:22:27
about the other 235 people their
01:22:30
families talked to the press this wasn't
01:22:31
from the administration from but the
01:22:33
point is it's it's there so whether it's
01:22:35
the freedom project or whether it's the
01:22:36
Southern Property Law Center my point is
01:22:38
there are resources is it bad when this
01:22:40
happens absolutely my question is do you
01:22:43
just blow the whole process up and then
01:22:44
what do you do with the other 235 people
01:22:46
You' hold all 238 at GMO if you wanted
01:22:49
to in Humane prisons and process them
01:22:53
and then have their attorneys get to
01:22:54
look at their case you could give their
01:22:56
cases to you could be public with their
01:22:58
cases and say here are the cases these
01:23:00
are the people we deporting and why
01:23:02
right so your specific issue is where
01:23:04
they're being sent yes you Cham they're
01:23:07
being sent to the most sadistic prison
01:23:09
in the world Cham do you want to answer
01:23:10
your question about like the 5%
01:23:13
trade-off like if you sweep up 5% of the
01:23:16
people being innocent whether it's worth
01:23:18
that trade off for
01:23:20
Crime did I get an answer you well you
01:23:23
asked the question but I wanted to hear
01:23:25
your answer like what's your point of
01:23:26
view on that I think that that's
01:23:28
probably what happens today in America's
01:23:31
prisons in fact it's probably more than
01:23:34
5% but I guess the question is Jam what
01:23:36
is an acceptable you know it's a little
01:23:37
bit like the trolley problem you know
01:23:39
there are many variations of this I
01:23:40
think the important thing is I think
01:23:42
that that a bit above our pay grade but
01:23:44
I don't think it's above the presidents
01:23:46
and I think that that was part of what
01:23:49
he was elected to do is make that call
01:23:51
because I don't think he hid behind any
01:23:53
rhetoric he was very clear about what
01:23:54
his intentions were and to your point he
01:23:57
did bring the you know Lake and Riley
01:24:00
act I mean they were very explicit about
01:24:02
what their intentions were
01:24:05
yes but man it just feels like a little
01:24:08
more due process being a little more
01:24:10
careful with the signal but also just
01:24:12
going back to what were 4 and a half%
01:24:13
into the administration I'm not saying
01:24:16
hey mistakes were made and it's okay
01:24:18
inent people were sent to this prison
01:24:19
that's terrible and I hope it gets
01:24:21
rectified quickly if there was some
01:24:24
concession here hey if we made a mistake
01:24:26
we're going to fix it that would be a
01:24:27
lot better than putting out promotional
01:24:29
videos Ling how brutal this prison is
01:24:34
that would go a long way with me but
01:24:36
we're seeing the opposite they're
01:24:38
releasing videos that they're producing
01:24:40
we we'll play one here for you to see by
01:24:43
the way I I think an important point
01:24:45
about
01:24:48
this and perhaps like the key part of
01:24:51
the strategy of the administration is
01:24:53
that this isn't the beginning of a
01:24:54
continuous
01:24:56
process
01:24:58
but they're sending a signal which they
01:25:01
expect will cause people to naturally
01:25:04
immigrate out of the country that are
01:25:06
committing crime or at risk of being
01:25:07
caught for being associated with gangs
01:25:10
and while beinga uh in the United States
01:25:13
as a way to kind of Chase folks out so I
01:25:15
think that there's some calculus and
01:25:16
what's going on here with respect to the
01:25:18
risk and the actions being hey look if
01:25:21
we do this to the first 240 people and
01:25:23
even if or four innocent people get
01:25:25
caught up there's a net benefit
01:25:28
ultimately because it will reduce the
01:25:30
immigra immigrants kind of coming to
01:25:32
this country that are parts of gangs and
01:25:34
perhaps some of them will choose to go
01:25:36
home you know they clearly believe that
01:25:39
this is that this is going to save
01:25:42
innocent lives in America that is their
01:25:45
clear belief
01:25:46
system well yeah and everybody wants
01:25:49
that here's secretary chrisy Noam from
01:25:52
the prison itself at Cott today and uh
01:25:56
visiting this facility and first of all
01:25:57
I want to thank El Salvador and their
01:25:59
president for their partnership with the
01:26:01
United States of America to bring our
01:26:02
terrorists here and to incarcerate them
01:26:05
and have consequences for the violence
01:26:07
that they have perpetuated in our
01:26:08
communities I also want everybody to
01:26:10
know if you come to our country
01:26:11
illegally this is one of the
01:26:13
consequences you could face uh first of
01:26:15
all do not come to our country illegally
01:26:18
uh you will be removed and you will be
01:26:20
prosecuted but know that this facility
01:26:22
is one of the tools in our toolkit that
01:26:23
we will use if you commit crimes against
01:26:26
the American people harsh words she's
01:26:28
trying to make it a deterrent clearly
01:26:30
all right another amazing episode of
01:26:33
Allin is in the can for Gavin Baker
01:26:37
David freeberg and jth
01:26:39
POA I'm Jay Cal Jason Cal canis and we
01:26:41
will see you all greatest next time
01:26:44
virtue signal [ __ ] [ __ ]
01:26:47
did you see I love I mean I can't even
01:26:49
take it there I'm sorry I'm passionate
01:26:51
about some things I'm passionate about
01:26:53
some things look at this I can't tell
01:26:54
how much of the tension is real vers
01:26:57
like I love I
01:27:00
love let your winers
01:27:03
ride Rainman
01:27:07
David and instead we open source it to
01:27:10
the fans and they've just gone crazy
01:27:12
with it love queen
01:27:14
[Music]
01:27:20
of Besties
01:27:24
that's my dog taking
01:27:26
[Music]
01:27:28
driveways oh man myit will meet me at
01:27:32
should all just get a room and just have
01:27:33
one big huge orgy cuz they're all this
01:27:35
useless it's like this like sexual
01:27:36
tension that they just need to release
01:27:38
[Music]
01:27:44
Som we need to get mer
01:27:49
[Music]
01:27:54
I'm going all in
