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all right everybody welcome back to the
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number one podcast in the world it's
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episode 185 and uh you're going to be
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delighted by today's docket if you're
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into politics we we move the taping back
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a day gentlemen because we knew there
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would be a presidential debate so with
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me to discuss all things presidential
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debate and the News Finance markets
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maybe even a little science from our
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science boy David freeberg is the
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Rainman David Sachs yeah probably have a
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t Frozen or he's staring everybody down
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how are you sir we're about to enter the
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end game Jason oh oh the end game is
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here okay we're in the end game now and
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from a we work in the home office in
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Pasadena is uh our friend the sultant of
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science he's back to work he's in his
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Cube did you get the TPS reports done
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how you doing there freeberg The Humble
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headquarters of ohol genetics beautiful
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lab downstairs I'll take you on a tour
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one day oh nice can't wait to hear my
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friends gloat and bloat themselves on
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the show today after the debate last
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night it's going to be insufferable I'm
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looking forward to it okay so you're
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building the next 10 billion dollar
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company and we don't get to invest but
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we do get a tour thank you that's good
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to
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note not that we're bit uh we appr this
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every week we if you guys want to
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put money in I will open up the round
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again for you and you guys you said this
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three times when do we wet our beak
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jal's right about this actually that's
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how you know the winner the one he
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doesn't let us invest it is the winner
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[Music]
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it's the easiest way in his portfolio
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know he's like hey can I can I introduce
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you to a soda pop
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machine let your winners
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ride
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RAV and instead we open source it to the
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fans and they've just gone crazy with
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[Music]
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iten all right everybody let's get to
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the show here enough of the craziness
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last night was the first presidential
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debate and there's no easy way to put
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this it was an unmitigated disaster for
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the Democrats and President
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Biden uh gosh he looked confused uh lots
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of slips lots of gffs if you are under a
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rock living in a cave without starlink
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and you missed it here's a couple Clips
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everybody's talking about this one where
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Biden lost his train of thought for I
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don't know close to 10 seconds play the
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clip making sure that we're able to make
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every single solitary
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person eligible for what I've been able
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to do with the uh with with with the co
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excuse me with um dealing with
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everything we have to do with uh
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look if we finally beat Medicare thank
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you president uh Biden president Trump
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gosh that was brutal and uh the reaction
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from uh CNN even msnbc's Joy Reed as far
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left as you can go
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was brutal and candidate and here it is
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the knives are out from the Democrats
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for President Biden right now as we
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speak there is a deep a wide and a very
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aggressive panic in the Democratic party
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it started minutes into the debate and
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it continues right now it involves party
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strategists it involves elected
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officials it involves fundraisers and
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they're having conversations about the
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president's performance which they think
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was dismal which they think will hurt
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other people down the party in the
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ticket and they're having conversations
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about what they should do about it some
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of those conversations include should we
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go to the White House and ask the
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president to step aside other of the
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conversations are about should prominent
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Democrats go public with that call
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because they feel this debate was so
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terrible that was painful uh I love Joe
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Biden I work for Joe Biden he did not do
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well at all and I think there's a lot of
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people who are going to want to see him
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consider taking a different cour now
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there is time for this party to figure
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out a different way forward if he will
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allow us to do that I too was on the
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phone throughout my of the debate my
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phone really never stopped uh buzzing
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throughout and the um Universal reaction
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was somewhere approaching Panic the
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people who were texting with me were
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very concerned about uh President Biden
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seeming extremely feeble seeming
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extremely weak this has been quite
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frankly a car accident in slow motion
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that we've seen over and and building
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and questioning it and as has been
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pointed out Joe Biden sought this debate
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at this Remar remarkably early time
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because he knew he was losing and he
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needed to change the narrative and he
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did change the narrative he sunk his
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campaign
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toight all right gentlemen there is
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absolutely no way any of us could have
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predicted this oh wait Nick play the
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clip read the room Democrats you have
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put up a candidate that nobody wants his
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policies on the border and some other
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issues are not in sync with the majority
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of the country at some point the
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Democrats just have to take a deep look
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in the mirror and say we feel that a bad
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candidate who's too old and people don't
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believe will stand up to scrutiny of
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like say being on the all-in pot for two
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hours or in the debates or with a hosti
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interviewer or any of those
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possibilities and so I think if that's
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the case we really need to have the
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Democrats think deeply about maybe fiing
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a different candidate and I believe
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that's what's going to happen in the
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next 30 to 60 days so I'm predicting you
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think this G be a switch foro 100% I
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mean if you just think 100% there'll be
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a Switcheroo who's thewi
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I have no idea could be Gavin could be
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anybody anything's possible I think
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Trump's going to demolish him in the
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debate I think he'll sink to 30% in the
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in the polls and then the Democrats will
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find a way to give him a graceful out
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and then they'll feel somebody else I
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think the Democrats as cynical as it
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sounds were waiting to see what happens
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with this Trump trials conviction what
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you call law fair what other people call
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fair use of the law and then they are
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going to see how he does in the debates
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that's why they move the debate up in
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June and I think they know to pull the
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plug on this if it gets too far gone and
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they have the ability to do that because
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all he's got to say is you know what I I
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I'm I'm feeling old and I want us to win
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and I'm going to slot somebody else in
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all right and to wrap this up prediction
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markets showing Biden has plummeted to
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let's check the number oh yeah
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33% in the the sharps as uh you've
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referred to them on the program uh are
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basically saying Biden's going to drop
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out now 44% % chance over a poly Market
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will Biden drop out of the presidential
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race and then predicted another one of
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these prediction markets where you can
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actually BET Real dollars it's not a
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plug for them or commercial just those
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happen to be two of the bigger ones
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Newsome sits at 14% now Biden 33% Trump
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at
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58% at the start of the evening before
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the debate Biden was at
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47% post debate chth we see Biden
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dropping from 47% to 30 3% nothing like
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this has happened in modern
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politics your thoughts Jam POA and then
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saaks will give you the red me let me
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just start by saying that President
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Biden is a person that's given up his
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whole life to work on behalf of America
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in the best way that he thought was
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possible he's overcome a lot of
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tragedies I think he's worked very hard
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he's diligently tried to do what he
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thought was right on behalf of the
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people of Delaware and then the United
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States
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my honest takeaway is that that person
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though is no longer really in
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charge and I think that that was very
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troubling for me and it actually makes
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the last sort of six months make a lot
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more sense so I thought the fact that we
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could not get a response from the White
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House to be I took it a little bit
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actually personally I was wondering why
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for someone that had been such an Ardent
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supporter I couldn't even get an email
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back when I was consistently asking them
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to be on the
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Pod and now I see that it wasn't just
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one single act it was part of a holistic
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strategy it was the same strategy that
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boxed RFK out of the Democratic primary
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because could you imagine if this event
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had happened when he had to debate RFK
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in the Democratic primaries it would
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have been exposed then it's probably
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partly to
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explain how the law has been used in New
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York state
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whether you want to call it law or not
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but it it was a very directed partisan
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action and so all of these things are
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now three data points that are really
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important you will not come on an open
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format show like ours to just speak
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openly none of us were going to attack
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him or try to Corner him or box him in
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you prevented other people from actually
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challenging you and directly asking
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questions of you in the Democratic
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primaries and then you try to put
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political pressure on your opponents all
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of that
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is systematically about a group of
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people that are
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unelected who are trying to control
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democracy and I think that that's the
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most troubling takeaway from this I
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don't think that you should take away
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from last night that Joe Biden had a bad
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debate I think what we should take away
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is that there is a person who should be
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allowed to transition into the sunset
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and be celebrated for what he's done and
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instead there are
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people that frankly at the at the
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margins are
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acting pretty
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unethically and at the limit is actually
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acting somewhat diabolically to prop
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this person up so that they can keep
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power for example you've been in
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situations where you would expect the
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team that runs a company to be able to
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stand up and say the CEO is not in a
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position to run this company anymore
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that's what you would expect if there's
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good governance and honesty you know
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what was Ron Clan doing as an example
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when he was doing debate prep did he
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legitimately believe that Joe Biden was
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prepared for or mentally capable of
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actually doing this and the fact that
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they are allowing his legacy to be
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destroyed after 50 years I think is
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really tragic yeah I well said by the
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way chamat sacks your thoughts on what
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we witnessed last night in the reaction
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to
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it well let me speak as a objective and
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independent political Observer okay just
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as independent as you
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jcal yes let's do that let's be
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independent today yeah look anyone can
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have a bad night
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absolutely his campaign put out the word
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that he had a cold and uh maybe he just
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had a bad night I mean after all it was
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media people like Joe Scarboro just
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saying a week ago that Not only was
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Biden cognitively fine but in fact he
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was the best Joe Biden he had ever seen
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just a week ago or two weeks ago Reed
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Hoffman was saying that he had a
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two-hour lunch with Joe Biden and Biden
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was regaling him with details of AI and
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Gaza and he was
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good and so what we've heard from all
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these highly reputable people is that
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Biden may not present that well in
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public but in private he's just fine
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you're saying they're lying and they lie
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to the American people well I'm I'm
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actually taking them at their word
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because they seem like very trustworthy
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sources to me I see no reason to swap
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out this candidate I think that anyone
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can have a bad night and
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and there's no reason whatsoever for the
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media be panicking like
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this
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sack satire socks is into the J well I
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mean look I just um I I think that
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there's no reason for this kind of panic
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still going I believe in democracy and
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the Democratic primary voters have
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spoken this is the candidate who they
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voted for okay and there is there is
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Stand By Your Man to hear a message
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Stand by Your Stand By Your Man stop
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being a wimp because your candidate had
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one bad night you don't stab him in the
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back like this absolutely not and even I
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think van Jones said that Republicans
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wouldn't do this if Trump had a bad
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night you know he he's like why why are
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we all stabbing Biden in the back so
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look this is a candidate who you've been
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supporting for years this is a candidate
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who you rigged the primaries for you
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boxed out Bobby Kennedy who you know I
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thought was a fantastic candidate you
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basically boxed out Dean Phillips this
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is the candidate who you want
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and just days ago you were saying was
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completely mentally fit in fact the best
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he had ever been
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okay sleep in it you made your bed sleep
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in it stop betraying your candidate like
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this it's it's uh unseemly it's okay
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satire sex has some has some loyalty for
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God's sake okay freberg you've heard
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from compassionate shth you got to hear
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from satire Sachs now let's go to
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freeberg what do you got now this
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morning you get to hear from FR Frank
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freedberg Frank freedberg H to it buddy
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go for it the big loser of last night's
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debate was the American public the big
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winner of last night's debate was
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probably Russia China Iran maybe the
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Saudis licking their chops watching the
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utter dysfunction in the leadership of
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the party in the leadership of the
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country as it stands today a notable
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mention I will say was the debate format
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I absolutely love the fact that there
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were no interruptions that the mics went
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mute that there was no audience and the
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moderators didn't kind of challenge back
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and forth and try and make themselves
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the show that was very unique in in a
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presidential debate so I actually like
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the debate format fin they stopped
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interrupting
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me thanks for the interruption
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uh I think that as saak points out the
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biggest issue is that this was front and
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center Biden's decline in capacity and
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aptitude for quite some time I didn't
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tell you guys this before but last
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October a senior member of the
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democratic party reached out to me for a
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quote meeting I took the meeting in
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October and of course it turns out they
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were asking me for money little did they
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know I don't give any money to politics
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ever never have never will so they're
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their handlers are morons for bringing
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this person in to come and talk to me in
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the meeting I said you cannot put Joe
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Biden forward as your candidate what the
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hell are you guys thinking he's like no
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he is complet
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stable he is as sharp as he's ever been
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I sent him an email I'm going to read
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you what I said to him this was in the
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first second week of October I said Joe
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Biden does not appear equipped to be
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president of the United States I think
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the continued heralding of Democratic
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party leadership of the president's
00:14:46
performance and ability to continue to
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serve into the next term is mindboggling
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his inability to conduct even a basic
00:14:52
interview or give a clear and concise
00:14:54
statement in a candid setting highlights
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a clear and obvious decline in function
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since he took office it is important for
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Democratic Leadership to find an
00:15:01
alternative candidate and message this
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soon doing so I believe will buoy
00:15:04
fundraising efforts across yada y y I
00:15:07
said I would feel uncomfortable with a
00:15:08
democratic majority Senate head in house
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giving a leader with declining aptitude
00:15:12
nearly Limitless effect so I sent this
00:15:15
as my response to his follow-up request
00:15:17
for for money this was the second week
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of October and I wanted to pull up the
00:15:21
date on this because it was so apparent
00:15:23
back then what was going on so what's so
00:15:26
striking is how long
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mainstream media and leadership in the
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Democratic party have tried to tell an
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alternative story that was so obviously
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revealed to be not true last night and
00:15:39
that is the thing that I think makes me
00:15:41
say America is losing because there are
00:15:43
a few people that are in charge of
00:15:45
controlling the narrative there are a
00:15:46
few people in charge who decide who gets
00:15:48
to be the candidate and those few people
00:15:51
are keeping democracy from working
00:15:53
effectively because the raw data the
00:15:55
direct data the imagery the video the
00:15:58
media content that has come out of Biden
00:16:00
over quite some period of time made it
00:16:02
so obvious that he was not in full
00:16:05
capacity and so that was my biggest kind
00:16:07
of takeaway is that there's something
00:16:09
wrong with the way things are running in
00:16:11
this country you're saying the media and
00:16:13
the Democratic party leadership are
00:16:14
lying to America yeah and I think I but
00:16:18
I because if you fact the fact that we
00:16:21
all had this information we we've seen
00:16:23
the videos we've seen the interviews and
00:16:25
every time a video or an interview comes
00:16:26
out it has been excused away as oh well
00:16:29
he tripped or oh you know it wasn't well
00:16:32
edited and every time there's a story
00:16:35
and then when it's fully exposed it
00:16:37
becomes like well my God the fact that
00:16:40
they all flipped so quickly is what's so
00:16:42
shocking because this was there and you
00:16:44
you know if you're on Twitter you can
00:16:46
see these clips being talked about by
00:16:48
millions of people but then media and
00:16:50
Democratic Leadership won't acknowledge
00:16:52
them the subversion of democracy is
00:16:54
really the real threat to democracy to
00:16:56
your point you have the right to a
00:16:59
person up or down none of us are
00:17:01
choosing to elect a shadow cabinet of
00:17:03
handlers to run America that's not what
00:17:05
any of us are signing up for and I think
00:17:07
that's what we have the risk of having
00:17:09
for another four years if this lie isn't
00:17:12
exposed what I what I find unbelievably
00:17:15
shocking is all of these data points now
00:17:17
just make so much sense because the
00:17:19
through line is as you said a
00:17:20
coordinated effort to kind of obfuscate
00:17:24
his decline like if you thought about
00:17:26
this in a different way if you took a
00:17:29
29y old and a 32y old would you say that
00:17:32
they're the same absolutely right if you
00:17:35
took a 39 and a 42y old they're the same
00:17:38
a 49 and a 52 year old they're the same
00:17:42
but the reality is a 79 and an 82y old
00:17:45
or a 78 and an 82y old are meaningfully
00:17:49
different and the reason is that because
00:17:52
there is significant decline every year
00:17:55
every month every day and you're seeing
00:17:57
the impact of every week day and month
00:18:00
and year as a president of the United
00:18:01
States wear on an 82y old body and I'm
00:18:04
not sure any of us would do much better
00:18:07
but the reality is that when you're at
00:18:09
that age there's a level of transparency
00:18:11
that's required and we have the opposite
00:18:13
so take Warren Buffett as the
00:18:15
counterfactual to this Warren Buffett is
00:18:17
in his early
00:18:19
90s but what does he do every year he
00:18:22
marches tens of thousands of people into
00:18:26
Omaha he sits them down he sits at the
00:18:29
front of a dis with Coca-Cola and peanut
00:18:32
brittle and speaks for 6 to 8 hours and
00:18:36
is sharp as attack well the point is if
00:18:39
you decide after those 6 to8 hours of
00:18:42
fully transparent unedited interaction
00:18:44
with Warren Buffett that you don't think
00:18:46
he's capable of leading Burkshire you
00:18:48
can sell the stock what they don't do is
00:18:51
hide him behind the shadow propping them
00:18:54
out in package interviews and all of
00:18:55
this other stuff that is unamerican and
00:18:58
undemocratic and you see why because the
00:19:00
importance as freed BR said is so high
00:19:03
you probably do have a lot of people
00:19:05
outside the United States really
00:19:07
questioning what is going on in the
00:19:08
greatest country in the world right now
00:19:10
that this can even happen and the people
00:19:13
that you thought were so
00:19:15
anti-trump right that they would do
00:19:17
anything to make sure that Donald Trump
00:19:19
was
00:19:20
unelected well they're actually not that
00:19:24
anti-trump they're just Pro Power
00:19:26
because the thing that they care more
00:19:28
about than their hatred of Donald Trump
00:19:30
is your desire to stay in power yeah I
00:19:32
think these are all very well said Frank
00:19:34
freeberg nicely done I mean how is
00:19:37
anyone at this point in time surprised
00:19:39
like we have been talking about his
00:19:41
cognitive ability for a couple of years
00:19:43
here on this podcast everybody's been
00:19:45
talking about it on Twitter they've been
00:19:47
talking about on social media
00:19:48
everybody's been talking about it at
00:19:49
every Christmas every Thanksgiving for a
00:19:51
couple of years right now and um you
00:19:53
know this long form discussion podcast
00:19:56
test is the ultimate test and I think
00:19:58
people need to take that to heart if you
00:20:00
look at the long form podcast as and I'm
00:20:02
just saying this to twe our own horn
00:20:04
here it could be Joe Rogan it could be
00:20:06
Tim Ferris it could be whoever you want
00:20:09
Lex fredman when you saw RFK the Trump
00:20:12
Chris Christie Dean Phillips come on
00:20:14
this podcast talked for in some cases
00:20:16
two plus hours it was clear they were
00:20:19
there and this is completely selfish on
00:20:21
the part of Biden's family the people
00:20:24
around him to you know stay in power and
00:20:28
the swaps coming I just I'm telling you
00:20:30
right now he is not going to be in this
00:20:32
race in the next 30 days well theot the
00:20:34
hot swap is going to create a
00:20:35
free-for-all Jason which is better
00:20:37
better than running somebody who has a
00:20:39
30% chance of winning and I'm going to
00:20:42
take this a step further this is 25th
00:20:45
amendment territory this person is not
00:20:47
fit to serve as president for the
00:20:50
remaining of his term what we saw last
00:20:52
night was incredibly troubling he was
00:20:56
not there and I've been saying this till
00:20:59
I'm blew in the face for months this is
00:21:02
absolutely disgusting that they did this
00:21:04
this is elder abuse I don't say that as
00:21:06
a joke I say this sincerely I remember
00:21:09
when my dad had to take the keys away
00:21:10
from my grandfather God Rest his soul my
00:21:13
grandfather wanted to drive that car you
00:21:15
know in the streets of Brooklyn his his
00:21:17
his station wagon my dad at some point
00:21:19
said this guy keeps clipping other
00:21:20
people's mirrors we got to take the car
00:21:22
away so you know what my dad did he went
00:21:25
to my grandfather God Rest his soul and
00:21:27
he said listen the car was stolen and
00:21:30
I'm sitting there as a seven-year-old
00:21:31
next to my dad and I'm like the car
00:21:33
wasn't stolen and my dad said you know
00:21:35
what the car was stolen pop we can't
00:21:36
afford a new car I'll lend you my car
00:21:39
once in a while my dad then sold the car
00:21:40
for 800 bucks and got out of there
00:21:42
that's what we need to do you got to
00:21:43
take the keys away from Biden he's not
00:21:45
fit to finish the rest of his term
00:21:48
period full stop I and I'm glad
00:21:51
everybody else now sees what you know
00:21:54
half of Us Saw for the last year hold on
00:21:58
s has a Ruttle go ahead well look who
00:22:02
are you going to believe J Cal's
00:22:04
uninformed non-expert opinion or the
00:22:07
Expert Medical opinion of Dr Joe Biden
00:22:10
with her uh doctor in education well I
00:22:13
mean the bias is strong when you see
00:22:15
that clip I mean play the clip of Biden
00:22:18
post these guys are so deranged these
00:22:20
lunatics are so deranged they thought
00:22:22
they won last night here's a clip of Joe
00:22:25
Biden tell lady MC Beth telling in Biden
00:22:29
he did good Joe you did such a great job
00:22:32
you answered every question you knew all
00:22:38
the and let me ask the crowd what did
00:22:42
Trump do
00:22:44
why you're not running Joe Biden's not
00:22:47
running you are not running this is a
00:22:51
farce and now the Val so happy he looks
00:22:54
so happy in that moment getting that
00:22:56
approval I mean give the man some milk
00:22:58
and cookie I mean he literally let the
00:23:01
man retire to your point shth
00:23:03
compassionate shth said it great like
00:23:05
the guy had a lifetime of service let
00:23:07
the guy retire let him spend time with
00:23:10
his grandkids great grandkids whatever
00:23:11
he's blessed with and let's let's do the
00:23:14
hot swap now it's incredible that not a
00:23:17
single staff member has resigned isn't
00:23:19
that incredible like where they see this
00:23:22
Jason and they have the moral Clarity to
00:23:24
say hold on a second this is really
00:23:26
wrong not a single one yeah a really
00:23:29
good point it's a really good point and
00:23:31
actually I I thought I thought one of
00:23:33
Trump's best moments in the debate a
00:23:35
line that I hadn't heard him say before
00:23:37
is that Joe you never fired anyone you
00:23:40
know and he was specifically talking
00:23:41
about the Afghanistan withdrawal but
00:23:43
just more generally when have you ever
00:23:45
fired anyone for getting anything wrong
00:23:48
whereas I Trump fired Comey I fired
00:23:51
other people and I paid a political
00:23:52
price for that but at least I was
00:23:54
willing to fire people who do a bad job
00:23:56
you're not well now we know the reason
00:23:57
for that is because there is no Biden
00:24:00
Biden is just the staff so why would the
00:24:02
staff ever fire themselves and this is
00:24:04
why it's actually important to have a
00:24:06
leader at the top to have a
00:24:08
commander-in-chief as opposed to just a
00:24:09
shadow government consisting of party
00:24:12
apparat chicks and that's what we have
00:24:14
is the problem is when the staff gets
00:24:16
something wrong there's no one there to
00:24:18
fire them how like how does somebody
00:24:21
who's worked for Biden for 40 or 50
00:24:23
years who sat in Camp David helping to
00:24:25
do debate prep at no point have the comp
00:24:28
to say Sir this is not working because
00:24:31
they would be firing themselves chth
00:24:34
only Reon it's a rical question I'm just
00:24:36
saying actually there's a more Sinister
00:24:38
reason and I think Zach you're pointing
00:24:40
it out there which is they consider
00:24:42
Trump such an existential threat and
00:24:44
they want to maintain power that they'll
00:24:45
they're willing to do anything to keep
00:24:47
power you know and you know listen I I
00:24:50
don't want to get into Trump here but
00:24:52
he's got his own ways to stay in power
00:24:54
himself this was an embarrassment for
00:24:56
America this debate this fact that these
00:24:58
are the two candidates is a complete
00:25:00
embarrassment well I think the real
00:25:02
embarrassment for the media was the fact
00:25:05
that they were exposed the fact of the
00:25:07
matter is for months if not years
00:25:09
they've been saying that this candidate
00:25:10
is fine he is cognitively fit in fact
00:25:13
he's the best he's ever been I've had
00:25:15
two-hour lunches with him he's wonderful
00:25:17
that's what they've been telling us and
00:25:18
the reason why their Panic was so
00:25:21
visceral last night in all these
00:25:23
postgame wrap-up shows is they saw their
00:25:25
credibility going down the drain they
00:25:27
saw that they
00:25:28
had been exposed it wasn't just the fact
00:25:31
that Biden was exposed they were exposed
00:25:34
for putting out this North Korea level
00:25:35
propaganda for months and years and
00:25:38
everybody should understand these people
00:25:40
were part of the coverup it wasn't just
00:25:42
the Biden team who wants to hold on
00:25:43
their jobs it was the media it was this
00:25:45
entire Democratic party apparatus
00:25:48
they're all in on this giant con I
00:25:51
wouldn't have a problem with this sex if
00:25:54
it was like Reagan where they were like
00:25:55
oh God he's got 18 months left we're
00:25:57
going to ride this thing out and yeah
00:26:00
maybe we let him have a quiet thing but
00:26:02
to actually put him up for another four
00:26:03
years is the issue here if they just
00:26:05
said listen we could 25th amendment this
00:26:07
guy or let him finish the last six
00:26:09
months that's one thing but to say we
00:26:11
want four more years of this I mean how
00:26:13
much worse is it going to get he what's
00:26:16
going to happen right now I guarantee
00:26:17
you is he's out we're GNA have President
00:26:19
Kamala she's going to get her flowers
00:26:21
for four months as she gets to be the
00:26:23
first female president of the United
00:26:24
States then she steps out of the way she
00:26:26
decides she's not going to run because
00:26:28
she's got things to do with her family
00:26:29
and there will be two new people who
00:26:30
will be moderates and then the real
00:26:32
election starts in about 15 days I don't
00:26:35
think you need to go into all of those
00:26:37
mechanics to get the outcome of a new
00:26:40
candidate all Joe Biden has to do is go
00:26:42
into the Democratic Convention and
00:26:44
release the delegates yes of course yes
00:26:47
technically but the pro but the problem
00:26:48
with releasing the delegates is I do
00:26:50
think it creates a free-for-all unless
00:26:53
the party then exposes this next facet
00:26:55
of their plan which is that they are so
00:26:58
in control that they only allow one
00:27:00
candidate to go up there oh they've
00:27:02
already got that yeah that's done and
00:27:04
then I think what happens is depending
00:27:05
on who that person is they'll either I I
00:27:09
think the Democratic
00:27:10
party is probably at risk of a pretty
00:27:13
meaningful reset and yep I I think that
00:27:17
these tactics I think are very much seen
00:27:19
and understood by the American people I
00:27:22
think that people do not like this idea
00:27:24
that you vote for person a but instead
00:27:26
you get persons B through z I don't
00:27:28
think that's what anybody thinks the
00:27:29
election for the president of the United
00:27:31
States should be it should be two people
00:27:33
independently and then when you see one
00:27:35
person that's not really in a position
00:27:37
to run Faithfully I actually think that
00:27:40
you know Donald Trump last night showed
00:27:41
tremendous restraint and compassion I
00:27:44
think that is the right way to deal with
00:27:45
this situation I think it's just
00:27:47
acknowledging that President Biden is
00:27:50
not altogether there so without making
00:27:52
claims of a cold or anything else this
00:27:54
is the security and the well-being and
00:27:56
the economic prosperity of the most
00:27:58
important country in the world why are
00:28:01
we messing around let's just put it
00:28:03
plainly the Democratic party is a
00:28:04
collection of interests who want to
00:28:06
remain in power the Democratic party is
00:28:08
the party of government its goal is to
00:28:11
allocate money and power from the
00:28:14
government to the collection of
00:28:15
interests who back the Democratic party
00:28:17
in other words it's basically a
00:28:19
collection of of interests who want a Lu
00:28:21
the Republic well obviously no one's
00:28:23
going to vote for that so they have to
00:28:24
make it about something else they choose
00:28:26
a figurehead they talk about how this is
00:28:27
about saving democracy they basically
00:28:30
invent hoax after hoax lie after lie to
00:28:32
basically maintain their power and I
00:28:34
think what's happened is the mask has
00:28:36
come off the whole thing the whole shell
00:28:38
game has been revealed it's obvious that
00:28:40
Biden was always a puppet for these
00:28:43
interests who are hiding behind him and
00:28:46
now it's all being exposed this also
00:28:48
goes all the way back to 2016 because if
00:28:50
you remember and you look at the the
00:28:53
real runup into the 2016 primary you
00:28:57
have to remember president Obama sat Joe
00:28:59
Biden down and said you cannot run and
00:29:03
the reason was to direct the Democratic
00:29:06
party and establishment and energy
00:29:08
towards Hillary Clinton who ultimately
00:29:09
lost that election there's a very
00:29:11
important question here which is if Joe
00:29:13
Biden had actually run in 2016 you may
00:29:15
have actually had him beat Donald Trump
00:29:17
in 2016 and you he probably would have
00:29:20
continued into 2020 this would be a
00:29:22
totally different situation for the
00:29:24
Democrats so back to your point David
00:29:25
all of these back room Shenanigans and
00:29:28
negotiating and gerrymandering and
00:29:30
politicking and power broking is not how
00:29:33
democracy should work as messy as the
00:29:35
Republicans are I have to give you know
00:29:39
I tip my hat to them they run very
00:29:42
straightforward Fair visible
00:29:44
transparent faceoffs between people and
00:29:48
you may not like the candidates but the
00:29:50
process is what it's supposed to be
00:29:51
messy turbulent but you see all sides
00:29:54
whereas this tends to be managed from
00:29:56
the inside out and I think that that is
00:29:58
as your point being exposed and I think
00:30:00
that's what really has to stop within
00:30:01
the Democrats they need to open the
00:30:03
floodgates AB Bobby Kennedy should have
00:30:05
had the chance to run Dean Phillips
00:30:08
should have actually had the chance to
00:30:10
run but they were not and they were
00:30:11
prevented and by the way props to Dean
00:30:14
Phillips who in a very respectful and
00:30:15
compassionate way was telling the truth
00:30:18
from day one and he was essentially
00:30:20
censored he was not allowed to basically
00:30:22
tell you yeah he he told everybody what
00:30:26
he observed in front of his face
00:30:29
right and if people had listened a year
00:30:31
ago to Dean Phillips then the voters in
00:30:34
the Democratic primary could have made a
00:30:36
different choice they could have maybe
00:30:38
replaced Joe Biden but the party elders
00:30:40
and the powers that be did not let that
00:30:42
happen and now they're in a panic a year
00:30:45
later trying to do a hot swap because
00:30:48
it's manifest to everyone to the
00:30:49
American public that Joe Biden is not
00:30:52
fit to serve yeah but the real time to
00:30:55
hold on the let me to speak to the hot
00:30:56
swap for a second the time to do the hot
00:30:58
swap was a year ago when Democratic
00:31:01
primary voters could have voted for
00:31:03
someone new the problem you have now
00:31:05
jcal I actually think that on balance
00:31:07
the hot swap is not going to happen let
00:31:09
me just tell you why I think you make a
00:31:10
really good argument for it nonetheless
00:31:13
the reason it's not going to happen is
00:31:15
that Joe Biden and Jill Biden have come
00:31:18
out this morning and said there's no way
00:31:20
that he's stepping down it was just one
00:31:22
bad night he's fit to serve there is no
00:31:24
mechanism to replace a nominee who's
00:31:27
ready won all the necessary primary
00:31:30
votes without their consent so if if the
00:31:33
bidens are saying we're not stepping
00:31:34
down there's no mechanism to force them
00:31:36
to step down and that's the situation
00:31:38
we're in right now there's a very simple
00:31:40
mechanism he's going to he's going to
00:31:42
capitulate and you're Obama's gonna give
00:31:45
him a call I guarantee you Obama's going
00:31:47
to talk to him in the next 72 hours
00:31:50
guarantee the hot swap happens I'm
00:31:52
absolutely right now on it let me finish
00:31:54
my point yeah they can pressure him and
00:31:57
that's what you're talking is they're
00:31:58
going to try and leverage him out but
00:32:00
the truth of the matter is that if they
00:32:02
can't find the right leverage points he
00:32:04
does not have to step down the right
00:32:05
leverage point is very simple he's not
00:32:07
going to get any more donations last
00:32:08
night the Democrats who are donating all
00:32:11
said no more money for Joe Biden so he's
00:32:13
going to have no oxygen you need money
00:32:14
to run these things but all right look
00:32:16
just one other final problem with the
00:32:18
hot swap theory is not only is there no
00:32:20
mechanism to force Biden to do it but I
00:32:22
don't think there's a consensus right
00:32:23
now on who the replacement would be the
00:32:25
fact of the matter is that KLA Harris is
00:32:28
in line and she pulls even worse numbers
00:32:31
than Biden does so there's every reason
00:32:33
to believe that she would do worse than
00:32:35
Biden in the election and I think it's
00:32:38
not going to be easy to basically shiv
00:32:39
her and push her aside and so you can
00:32:42
talk about Nome you can talk about
00:32:44
Michelle Obama you can talk about
00:32:45
Hillary Clinton the fact the the matter
00:32:47
is that I think you're going to have a
00:32:48
big comma problem and because of that
00:32:51
you know there's no mechanism and
00:32:53
there's no clear replacement I think
00:32:55
that although a lot of people are going
00:32:57
to say what you said J Cal about the hot
00:32:59
swap being desirable I think at the end
00:33:01
of the day on balance probably not going
00:33:03
to happen although certainly I admit it
00:33:05
could I'll bet you $10,000 right now to
00:33:07
whatever charity you want that Biden
00:33:09
will not be in the
00:33:10
nominee you could be right but are we on
00:33:14
they got to work out those two problems
00:33:15
they got to work out those two problems
00:33:16
I'm just I'm just offering you a $10,000
00:33:18
bet and I and I'm not giving you any odd
00:33:19
straight money I would not bet a lot of
00:33:21
money on this because I'm not sure I'm
00:33:23
just raising some problems with the hot
00:33:25
swap Theory okay freeberg yeah you have
00:33:28
uh you've been a little bit silent here
00:33:29
you want to wrap us out so we can get to
00:33:30
the next topic I'll wrap us out I think
00:33:32
I'll read the final paragraph of the
00:33:33
email I sent to the Democratic party
00:33:35
leader a few months ago as a coda to
00:33:37
this conversation here goes the United
00:33:40
States is facing a fiscal crisis the
00:33:42
likes of which the world only sees every
00:33:43
few hundred years as World leading
00:33:45
nation states overextend themselves take
00:33:47
on unaddressed debt loads increase
00:33:49
social programming and eventually
00:33:51
collapse under these conditions the cost
00:33:53
to service the interest alone on our
00:33:55
federal debt is now greater than a
00:33:56
trillion dollars per year this already
00:33:58
exceeds the discretionary defense budget
00:34:00
The Debt Service expense will only swell
00:34:02
as interest rates are unlikely to
00:34:04
decline back to 0% and I do not
00:34:06
subscribe to the easyto refute economic
00:34:08
arguments of mon modern monetary Theory
00:34:11
simple arithmetic is all that's needed
00:34:13
to discredit it furthermore I can
00:34:14
identify dozens of federal programs
00:34:16
sponsored by democrats that are not
00:34:18
achieving their objectives yet we
00:34:20
continue to fund them as if they were
00:34:22
performing exactly as anticipated when
00:34:24
originally conceived every Federal
00:34:26
program should be held to account for
00:34:28
performance every year if not they
00:34:31
should be defunded instead I see the
00:34:33
party pushing new programs that create
00:34:35
new expense burdens without first
00:34:37
addressing programs that simply aren't
00:34:39
working accountability is a critical
00:34:41
first step in reducing our federal
00:34:43
deficit below 7% of GDP I believe our
00:34:46
nation is facing financial and thus
00:34:47
social Peril I urge the party to become
00:34:49
the quote party of reason and results
00:34:52
put forward leaders that can lead hold
00:34:54
government programs that aren't working
00:34:55
to account make sure that every dollar
00:34:57
spent on social programming has a
00:34:58
measurable impact and if they fail to
00:35:00
deliver results cut them the opportunity
00:35:02
to be the party of reason and results is
00:35:03
wide open myself and many of my friends
00:35:05
would Scramble for the opportunity to
00:35:07
support that party that's the end of my
00:35:09
statement and I think did you get a
00:35:12
response then a month later the Handler
00:35:14
said so and so has this on their docket
00:35:17
they're going to call you never got a
00:35:18
call of course yeah because you're not a
00:35:20
donor they only care if you donate and
00:35:23
you're not a I donated I donated and I
00:35:27
didn't get anything I asked for was a
00:35:28
chance to sit down know why bid didn't
00:35:30
come on the podcast I mean he couldn't
00:35:32
the debate format to your point freeberg
00:35:34
was like the easiest debate format ever
00:35:38
and the greatest thing I think Dave
00:35:39
Porton I pointed this out on Twitter
00:35:41
like Trump's best strategy was to just
00:35:44
let Biden talk like just get out of the
00:35:46
way and let him talk and there was one
00:35:47
moment where he's like I I I'm sorry I
00:35:50
mean Trump was pretty graceful here
00:35:51
which is a big statement he like at one
00:35:54
point was like I'm sorry I don't
00:35:56
understand what he just said like I
00:35:57
don't know how to respond to something I
00:35:58
don't understand if he what his point
00:36:00
was hot swaps coming and I am an
00:36:03
undecided voter I have a big
00:36:04
announcement
00:36:05
Sachs I have a big announcement about my
00:36:07
undecided vote you want to hear it yeah
00:36:09
let's hear it this is breaking news I am
00:36:12
not voting for Biden I've eliminated
00:36:14
Biden as a possibility I was waiting to
00:36:15
see what happened last
00:36:17
night no I I never was clear about that
00:36:19
I you also eliminated Trump you've also
00:36:21
eliminated Bobby Kennedy so you I have
00:36:23
not eliminated Trump or Biden Kenedy I
00:36:25
said Stein maybe Cornell West let's move
00:36:29
forward let's move on here we go who's
00:36:32
left bring anybody out it can't be
00:36:34
weekend up Bernie's part two I mean the
00:36:36
Weekend at Bernie's joke is real I mean
00:36:39
it's cruel and it's real and my Lord get
00:36:42
it together all right there's a really
00:36:44
interesting
00:36:45
um Trend going on that I wanted to get
00:36:48
everybody's thoughts on AI and corporate
00:36:50
efficiency killing tech jobs let's pull
00:36:52
up this chart uh this somebody shared in
00:36:54
our group chat from Fred these are
00:36:56
software developer job postings on
00:37:00
indeed from early 2020 that's pre-co
00:37:03
obviously to this year look at this the
00:37:06
number of job postings for developers
00:37:10
has absolutely come Crashing Down by 80%
00:37:14
this is below pre-co numbers in addition
00:37:17
to this we talked about getting back to
00:37:19
work Pensky and Dell saying you have to
00:37:22
be back in the office starting this fall
00:37:24
four days a week or resignation accepted
00:37:28
what are you seeing in your portfolios
00:37:30
any thoughts on this trend of the major
00:37:33
jobs the high-paying Elite jobs
00:37:36
chth maybe going away this is a trend we
00:37:40
haven't seen in our lifetimes there's
00:37:42
always room for Elites at Elite
00:37:44
companies and now it seems the demand's
00:37:47
gone what's going on here I just think
00:37:50
that company formation has changed after
00:37:52
the end of Zer and so I think that that
00:37:54
chart speaks more to a couple things one
00:37:56
is that
00:37:58
where typically people were hiring for
00:38:00
software engineering roles which was a
00:38:02
lot of SAS businesses contracted a lot
00:38:05
and the net new amount of SAS startups
00:38:08
also I don't think materially increased
00:38:10
and so that was one big switch second is
00:38:12
you went through a whole bunch of
00:38:14
layoffs at the big cap tech companies as
00:38:18
they reestablish profitability I think
00:38:20
when you layered those two things that
00:38:22
explains that chart more than the
00:38:24
emergence of AI tools just PR ially what
00:38:27
I see is all of these AI tools can add a
00:38:30
10 or 15% lift to an individual person
00:38:33
if you are in a traditional organization
00:38:35
I don't think these things are the
00:38:36
Panacea that they're marketed as being
00:38:39
these are not creating 10x engineers at
00:38:42
some point these tools will be good
00:38:44
enough and at some point companies will
00:38:46
get started from scratch that use those
00:38:48
tools and create a level of productivity
00:38:51
at on Tenth of the workforce but that
00:38:54
hasn't happened yet so I think that that
00:38:56
chart is more about layoffs and
00:38:58
contraction in Tech more than anything
00:38:59
else yeah and just to explain this chart
00:39:01
a little bit more in depth the 100%
00:39:03
number back in uh
00:39:05
2020 uh then boosts up to two and a half
00:39:09
times that amount and then comes back
00:39:11
down to 60% of that amount so it's an
00:39:12
index uh we don't actually have the raw
00:39:14
numbers here of the number of Developer
00:39:16
jobs open or close Sachs your thoughts
00:39:18
what are you seeing in company formation
00:39:19
to chat's point and overall what do you
00:39:22
think this means for the American Elite
00:39:25
Workforce people with you know really
00:39:28
high-end degrees and really high-end
00:39:30
salary
00:39:32
expectations well I agree with jamaath
00:39:34
it's just too soon for AI to be
00:39:35
responsible for this I mean the um AI
00:39:38
productivity gains are just starting and
00:39:40
we're not really seeing job elimination
00:39:42
yet or job replacement I think this is
00:39:44
just a symptom of economic weakness and
00:39:47
the main reason for the economic
00:39:49
weakness is the rate hike cycle remember
00:39:52
we went from practically 0% interest
00:39:55
rates to 5 a half%
00:39:57
in one year and a lot of people were
00:40:01
expecting that to cause a recession
00:40:02
that's normally what happens when you
00:40:04
get a very very rapid rate hike cycle is
00:40:07
it sucks liquidity out of the economy
00:40:10
and it contracts economic activity and
00:40:11
you get a recession I was one of the
00:40:13
people who thought that and that didn't
00:40:14
happen I think one of the reasons it
00:40:16
didn't happen is there was a huge
00:40:17
backlog of jobs of of sort of um open
00:40:20
job postings I think originally it
00:40:22
started at 12 million open jobs well
00:40:25
what's happened is the rise interest
00:40:27
rates has created some economic weakness
00:40:30
it's caused a reduction in liquidity and
00:40:33
investment it's created more pressure on
00:40:35
companies to be profitable and so all
00:40:37
those things have cascaded through and
00:40:39
it what it's doing is it's burning off
00:40:41
this JW backlog so we haven't
00:40:42
necessarily seen unemployment yet but
00:40:45
we're seeing a reduction in the the job
00:40:47
postings and I I think that's what's
00:40:49
going on and I would just say that the
00:40:51
economy may not be in recession yet but
00:40:52
I just think it's weak and um and this
00:40:55
is just one metric showing that ber
00:40:57
you're you know running a company now
00:40:59
you're doing hiring qualitatively what
00:41:01
are you seeing in terms of hiring from
00:41:03
when you were running production board
00:41:04
you had many companies people were
00:41:06
fighting it out in the peak Zer era you
00:41:09
know and giving people incredible
00:41:11
incredible you know compensation packets
00:41:14
and packages and then you also had like
00:41:16
sort of people trying to take talent and
00:41:18
maybe Talent hoarding was going on it
00:41:21
seems to have dramatically switched
00:41:22
we've been putting job postings out and
00:41:24
seeing hundreds of people apply for jobs
00:41:27
that we would get dozens previously what
00:41:28
are you seeing what's the game on the
00:41:30
field in terms of hiring I'm not really
00:41:32
I don't really have a great perspective
00:41:34
on this we're we hire very specialized
00:41:36
people at ohal and in the special
00:41:39
specialty field we're in we're the best
00:41:40
in the world so everyone wants to work
00:41:42
here got it uh I'll answer your question
00:41:45
J Cal I mean what I see from our
00:41:46
portfolio companies is hirings got
00:41:48
easier it is way higher much easier to
00:41:50
hire devs right now software developers
00:41:53
than two years ago no question about it
00:41:55
yeah and I think Global is a also having
00:41:58
a big impact here I I honestly my theory
00:42:00
on this is the because there's not three
00:42:03
competing offer sacks from Big Tech when
00:42:06
you're a startup you know trying to land
00:42:08
somebody and you're like we have to beat
00:42:09
Uber or Airbnb or coinbase you know like
00:42:12
a mid-market company or the Google offer
00:42:14
the Apple offer the Amazon offer
00:42:17
typically like a developer would have
00:42:19
those three sets of offers here's a
00:42:20
startup that's willing to give you 1% of
00:42:22
the equity here's a mid-market company
00:42:24
at Uber and Airbnb a coinbase that's
00:42:26
offering 300K and then here's the like
00:42:29
incredible $500,000 offer from Amazon or
00:42:32
Google those offers just aren't there so
00:42:35
then it makes for uh the ability for
00:42:37
startups to hire great talent this is
00:42:40
the best time possible to be a startup
00:42:42
the talent on the field is incredible
00:42:43
opening ey is considering a for profit
00:42:45
profit conversion and that means
00:42:48
possibly an IPO soon according to report
00:42:51
Sam Alman recently discussed this with
00:42:53
major shareholders like maybe Microsoft
00:42:56
and it's possible open AI will become a
00:42:58
for-profit benefit Corporation similar
00:43:00
to anthropic or xai if you don't know
00:43:02
what a for-profit benefit Corporation is
00:43:04
a benefit Corporation or bcorp in the
00:43:06
industry means you have a stated mission
00:43:10
that the board is responsible for going
00:43:11
after you know save the whales uh
00:43:14
provide AI software for all of humanity
00:43:17
whatever it is in addition to the
00:43:19
standard uh acting in the interest of
00:43:21
all shareholders and so this of course
00:43:24
means open eii which was valued at 86
00:43:26
billion could IPO at some point what are
00:43:29
your thoughts on this uh we saw the
00:43:31
revenue numbers are crushing it any
00:43:33
thoughts jam on open aai iping is that a
00:43:36
possibility in your mind I mean it makes
00:43:38
so much sense for them so I think they
00:43:41
should do it as quickly as possible we
00:43:43
are in the first inning of what should
00:43:47
probably be an enormous tectonic shift
00:43:49
in technology and I think if anything
00:43:53
whoever wins in the first inning usually
00:43:55
isn't the one that's winning by the
00:43:56
ninth inning
00:43:57
and so I would encourage anybody that's
00:43:59
winning right now to monetize get
00:44:01
secondaries take money off the table as
00:44:04
fast as possible because the future is
00:44:06
unknown and the more disruptive the
00:44:08
technology is the more entropy there is
00:44:10
which means that there's going to be
00:44:11
more changes not less and again I would
00:44:13
just look at search as an example I
00:44:15
would look at social networking as an
00:44:17
example when you look 20 years later the
00:44:19
people who captured all the value were
00:44:20
not the ones at the beginning who
00:44:23
everybody thought was going to win and
00:44:24
so I think if it plays out similarly
00:44:26
it's important for the people that are
00:44:27
in the lead today to recognize it's too
00:44:29
early and they should monetize their
00:44:32
perceived success as quickly as they can
00:44:35
to the largest magnitude possible in
00:44:37
other words you might be opening you
00:44:40
might be you might be my yeah grab if
00:44:42
you can grab the bag what is it called
00:44:45
secure the bag sorry secure the bag
00:44:46
secure the bag yes what what are your
00:44:48
thoughts here sacks on a potential IPO
00:44:51
by fam and the team at open Ai and the
00:44:53
impact that might have on the wider
00:44:55
space well for a long time time on this
00:44:57
show I've been saying that they need to
00:44:58
clean up that you know convoluted
00:45:00
Byzantine corporate structure with all
00:45:02
the line charts everywhere uh that's
00:45:05
that structure is what created all the
00:45:07
problems with this nonprofit board that
00:45:09
they had you've got a for-profit entity
00:45:12
reporting to a nonprofit board it
00:45:14
created a culture clash and as we've
00:45:16
said before on the show it's not a good
00:45:18
idea for stups to innovate on structure
00:45:21
using a tried andrue C Corp is the way
00:45:23
to go you're ready for IPO if you ever
00:45:26
get that far you don't need to like
00:45:28
restructure the company it was always
00:45:30
funky and weird that open AI had this
00:45:32
nonprofit structure and really they
00:45:35
should have fixed it years ago and and
00:45:37
like I said given Elon his Equity given
00:45:40
Sam his CEO package and they didn't do
00:45:44
either one of those things and so now
00:45:45
they're left with this crazy orc chart
00:45:48
that's a mess and I'm not even sure I
00:45:51
mean I think it's I think you would want
00:45:53
to clean it up as soon as you can
00:45:54
because I think my sense is that the
00:45:56
longer you wait on these things the
00:45:57
harder it actually gets but yeah more
00:46:00
calcified these things get yeah I'm not
00:46:02
sure how easy it is to actually fix this
00:46:04
thing but yes they should fix it they
00:46:07
should make it a standard C Corp they
00:46:08
should make things right with Elon
00:46:10
because he provided the first 40 million
00:46:12
of SE Capital they should make it right
00:46:14
with Sam he should get his Co comp and
00:46:17
then they should IPO so that the public
00:46:19
actually has the ability to invest in
00:46:22
this AI wave and ride this wave as you
00:46:26
know the same way they did with the
00:46:27
whole do boom in the late 90s I mean a
00:46:31
lot of those Doom companies didn't work
00:46:32
out but some of them did Amazon Google
00:46:35
and so on and the public had the
00:46:36
opportunity to participate in that huge
00:46:38
in wave of innovation and I think it' be
00:46:40
good if something like that happen we
00:46:42
still need more public companies right
00:46:43
yeah freberg you got a thought here
00:46:45
before we go into Super intelligence and
00:46:47
Ila's new company I don't care if open
00:46:49
is for-profit or nonprofit affects a few
00:46:52
people that put money in and the
00:46:53
employees doesn't affect anyone else so
00:46:56
well no it the public if they can buy
00:46:58
shares and they get to participate you
00:47:00
say that about any business right like
00:47:03
yeah open AI is one of the leading
00:47:05
companies of the AI wave it is the
00:47:07
leading company it's the the leading
00:47:09
company they apparently rais money at an
00:47:10
80 billion doll valuation so one could
00:47:12
also argue that a company doing three
00:47:14
billion in Revenue getting an IPO done
00:47:16
at 120 billion market cap maybe the
00:47:20
public already missed the big wave well
00:47:23
no I don't think so I mean we saw a lot
00:47:24
of these companies that you could have
00:47:26
said that about Nvidia and it
00:47:28
yeah it could go up it could go down but
00:47:31
anyway there's a buch there's a bunch of
00:47:33
people who put money in who are going to
00:47:34
make a lot of money if this thing gets
00:47:35
to P4 profit the trend line is it's
00:47:37
doubling Revenue right year over year so
00:47:40
yeah my argument is that it'd be good
00:47:41
for open AI to clean up its Byzantine C
00:47:44
uh cap table and structure and it would
00:47:45
be good for the public to be able to
00:47:46
have the opportunity to invest so it's a
00:47:48
win-win I'm not saying they have to do
00:47:50
it this minute I mean I I think that it
00:47:51
does take time to get your reporting to
00:47:55
the level of maturity necessary to be a
00:47:57
public company and you don't want your
00:47:59
your earnings or your Revenue you don't
00:48:01
want your numbers to be volatile if you
00:48:02
were an employee freeberg and it went
00:48:04
out at 120 billion would you clear your
00:48:07
position if you could would you sell
00:48:08
half your position I don't know enough I
00:48:10
don't know enough I'm assuming most of
00:48:12
those Jamal anybody anybody want to play
00:48:13
along here and well I've heard that
00:48:15
they've had quite a bit of turnover
00:48:16
because there's been pretty good
00:48:17
secondary Market activity which means a
00:48:19
lot of the employees have cashed out and
00:48:21
they've made so much money just like
00:48:22
what's happening in Nvidia now there's
00:48:24
very little upside relative to how much
00:48:26
money you've already made so at that
00:48:27
point a lot of the early people start to
00:48:29
leave got H more yeah so they're trying
00:48:32
to hire more people it sounds like I
00:48:33
heard 70% of employees at Nvidia are
00:48:36
millionaires now that's a crazy number
00:48:38
go ahead sex well I was gonna say you
00:48:40
know that question that you asked is is
00:48:43
really a highly personal question
00:48:44
because you could think that open AI is
00:48:46
a great company that's going to be worth
00:48:47
a trillion dollars in the future sure
00:48:50
but it still makes sense for you to take
00:48:51
chips off the table because 100% of your
00:48:53
net worth is in that one company so well
00:48:56
let let me ask it that way you got 90%
00:48:58
of your net worth in inid I'm sorry 90%
00:49:01
of your net worth you're a person at uh
00:49:03
open ey sitting on $10 million in shares
00:49:06
do you sell half all what would you do
00:49:09
personally sax I would take some chips
00:49:11
off the table I don't if you were first
00:49:14
if you're like this is 90% of your net
00:49:16
worth 99% of your net worth well I mean
00:49:17
you're an Insider so maybe you have a
00:49:19
lot of
00:49:19
information if you were really bullish
00:49:22
on the future of the company maybe you
00:49:24
take 10 or 20% of your chips off the
00:49:25
table if if you're less bullish maybe it
00:49:28
is 50% yeah so I don't know I'd be
00:49:30
influenced by my perspective on that but
00:49:32
I think that you could think it's the
00:49:34
greatest company in the world and still
00:49:36
it would make sense for you to take some
00:49:37
chips off the table because you don't
00:49:39
want all your eggs in one basket that's
00:49:40
a personal diversification
00:49:42
decision and if it was a $120 billion
00:49:45
valuation with 3 million in revenue chth
00:49:47
and you're trading a 40x or whatever it
00:49:50
is times next year's Revenue let's
00:49:51
assume they do 5 billion next year
00:49:52
you're still looking at 30X Revenue you
00:49:55
would clear I think these mult
00:49:57
are not really what's going to drive
00:49:58
their behavior I think open AI is
00:50:00
running a very strategic game plan to
00:50:04
become part of the tech establishment as
00:50:06
quickly as they can so that they are in
00:50:10
the inside looking out as opposed to the
00:50:12
outside looking in they were able to add
00:50:16
the former head of the NSA to their
00:50:17
board of directors yeah what would you
00:50:19
take on that by the way Jam that was
00:50:21
interesting people got pretty uh it's
00:50:23
how it's how you become part of the
00:50:25
establishment do you do you think the
00:50:27
former head of the NSA no longer has a
00:50:29
security clearance or knows people in
00:50:31
the NSA no of course not and I think
00:50:34
that there is a group of
00:50:36
people that want to make sure that these
00:50:39
kinds of Technologies and capabilities
00:50:41
are firmly within the hands of the
00:50:43
United States apparatus and not anybody
00:50:45
else and so I think that that pulls them
00:50:47
closer to the kinds of folks that could
00:50:49
otherwise give them a hard time right or
00:50:51
regulate them or etc etc so now what
00:50:54
happens is when you have Sen hearings
00:50:57
about this stuff it's more likely that
00:50:58
it's confidential behind closed doors
00:51:00
it's under the purview of National
00:51:01
Security all these things are beneficial
00:51:02
to open Ai and then secondly they were
00:51:04
able to get Elon to drop his lawsuit
00:51:07
conveniently I think it was like on the
00:51:08
same day that the head of the NSA was
00:51:10
added to the board or the former head of
00:51:12
the NSA so the next logical step is now
00:51:15
to create Capital markets distribution
00:51:18
which is really about syndicating
00:51:19
ownership of the company to all the big
00:51:22
deep pools of money so that they are
00:51:24
also rowing in the same direction in
00:51:26
support of open Ai and so that's what a
00:51:28
lot of people don't get it's not about
00:51:29
valuations or this and that this is
00:51:31
about creating a highlevel game theory
00:51:33
of how to
00:51:34
create an international apparatus that
00:51:37
supports your corporate objectives there
00:51:39
are a few companies that have done this
00:51:42
well and they are now one of them the
00:51:44
only thing left is to get shares into
00:51:47
the hands of the black rocks the t- the
00:51:51
all the big mutual fund apparatuses of
00:51:52
the world that then Syndicate to all the
00:51:54
individual investors of the world and
00:51:56
you have everything you have government
00:51:57
connections you have no real legal
00:51:59
overhang then the likelihood that an IRS
00:52:02
agent all of a sudden decides to audit
00:52:03
open AI is basically
00:52:05
zero okay so to summarize bit cynical
00:52:09
but you're building an ally base that
00:52:12
then makes it harder to investigate the
00:52:13
company criticize the company or
00:52:15
anything like that right that's that's
00:52:17
essing I don't think it's I don't think
00:52:18
it's cynical it's like a smart business
00:52:20
strategy strategy what are you what's
00:52:22
your take on that sex well yeah they're
00:52:24
borrowing their way into the deep state
00:52:27
okay I mean they're the quid pro quo is
00:52:29
we will be your vessel we will be an arm
00:52:33
of the intelligence community of the
00:52:35
deep state will give you access to
00:52:38
whatever it is you're looking for and in
00:52:41
exchange you're going to basically
00:52:42
protect us and allow us to get rich and
00:52:45
frankly that's the deal that all the big
00:52:47
tech companies have made they are all in
00:52:49
bed with the intelligence community and
00:52:52
we saw this in the Twitter files where
00:52:55
you know every week for the year before
00:52:57
the 2020 election there were meetings
00:53:00
between the trust and safety people the
00:53:01
censorship division of of Twitter and
00:53:04
the intelligence community so these
00:53:06
people are working arm in-arm and
00:53:09
basically the big tech companies have
00:53:11
given themselves over in a way to this
00:53:14
powerful apparatus this you know the the
00:53:16
Deep state in exchange for you know
00:53:19
they're willing to basically give up
00:53:20
power in exchange to be left unfettered
00:53:23
to make their money I think it's a
00:53:24
horrible development for the civil
00:53:27
liberties of the ordinary American but I
00:53:29
think that is a reality of what has
00:53:31
transpired yeah and the number of CIA
00:53:34
former CIA former FBI justice department
00:53:37
people working at the Googles Facebooks
00:53:40
metas apples of the world is like a very
00:53:43
large number I have family as many of
00:53:46
you know in law enforcement and in the
00:53:47
Deep State I guess I should call it sex
00:53:52
and they are constantly asking me about
00:53:54
job offers they have from these compan
00:53:56
companies and should which one should
00:53:57
they go to this is after they've done
00:53:59
tours in Afghanistan and you know
00:54:01
speaking many different foreign
00:54:03
languages and then all of a sudden they
00:54:04
secure this incredible you know 3x
00:54:07
salary Bump by working in big Tech so
00:54:09
there is something to all of this Ilia
00:54:12
announced his new startup finally it's
00:54:14
called safe superintelligence Inc or SSI
00:54:18
he uh was obviously an open AI
00:54:20
co-founder formerly their Chief
00:54:22
scientist and co-head of super alignment
00:54:25
last month he announced was resigning
00:54:26
from open AI after a decade with the
00:54:28
company and you remember he was on the
00:54:31
board that helped orchestrate Sam
00:54:33
maltman's firing um and then he reversed
00:54:36
chorus a few days after and expressed
00:54:37
regret in it everybody was asking
00:54:40
where's Ilia during all of this on
00:54:42
Twitter the co-founders in SSI include
00:54:45
Daniel gross a YC partner and Pioneer
00:54:48
Labs co-founder and open ey engineer
00:54:50
Daniel Levy company's goal right now is
00:54:53
in the title develop a safe super
00:54:55
intelligence here's what Ilia told
00:54:57
Bloomberg the company is special in that
00:54:59
its first product will be the safe super
00:55:02
intelligence and it will not do anything
00:55:04
else until then freedberg is this super
00:55:08
intelligence making safe super
00:55:10
intelligence a great business model or
00:55:13
is this something else it's a little bit
00:55:16
confusing to come into the market and
00:55:18
compete with a throttle or a governor I
00:55:21
guess on your startup at least that's
00:55:24
what some people are discussing so what
00:55:25
are your thought no idea I don't know
00:55:27
what these guys are doing have you guys
00:55:28
looked at this company I haven't seen
00:55:30
anything well I mean we're just basing
00:55:31
it on question yeah okay another assist
00:55:36
okay quick bounce pass to sack sack yeah
00:55:39
give us your opinion let me uh caveat
00:55:42
what I'm about to say by by saying that
00:55:44
I have not heard the pitch directly for
00:55:46
this company I've only read what you've
00:55:49
read in in the press that what they're
00:55:51
trying to do is the safe super
00:55:52
intelligence and I'm not bullish about
00:55:55
that pitch because I think it it makes
00:55:58
the company a little bit schizophrenic
00:56:00
it's working across purposes with itself
00:56:02
on the one hand you're a new company
00:56:04
which means you're behind you've got to
00:56:05
catch up with open AI or Google these
00:56:08
other companies that now have been
00:56:10
creating you know models for years so
00:56:13
you've got to move very fast on the
00:56:15
other hand you're saying you're going to
00:56:17
basically make this very safe well to be
00:56:19
frank safety concerns are a breake pedal
00:56:21
they don't help you move faster they
00:56:24
make you move slower yes it's a governor
00:56:26
yeah and in fact I think that this is
00:56:28
the main reason why Sam Alman either
00:56:31
kicked these people out of the company
00:56:33
or or starve their resources until they
00:56:35
left remember when a bunch of these
00:56:37
people left open AI they said that hey
00:56:39
we were originally promised 30% of the
00:56:41
Computing Resources by Sam and then he
00:56:44
reneged on that promise didn't give us
00:56:46
what we needed so they all left well I
00:56:48
think that was that wasn't by accident I
00:56:51
mean I think that Sam wants to win he
00:56:54
wants to develop AI as quickly as
00:56:56
possible possible specifically AGI and
00:56:58
he had this group inside the company
00:56:59
that frankly was a Lobby for moving
00:57:02
slower so now they have their own start
00:57:04
up that group that he kicked out right
00:57:07
and so I don't but I don't think that's
00:57:08
the recipe for winning because you're
00:57:10
the guys who want to move slower it
00:57:12
would be like taking the Dei group from
00:57:14
Twitter and having them start a new
00:57:15
Twitter well I think that's a little bit
00:57:17
harsh because I do think that by all
00:57:19
accounts karpathy is like a top
00:57:23
topnotch technologist and he's one of
00:57:26
the leaders in the space yeah but I do
00:57:28
think that he's going to be hamstrung by
00:57:30
his own concerns about safety and I
00:57:33
think this is maybe the the tragic
00:57:35
situation is we're going to have this
00:57:38
competition by all these different
00:57:40
companies to advance Ai and the
00:57:42
companies that care about safety more
00:57:45
than others are going to lose and so you
00:57:46
have this darwinian effect going on
00:57:49
where there's going to be a race to AGI
00:57:51
and I think that is genuinely a little
00:57:53
bit scary for where this all leads us
00:57:57
but I tend to think that it's not going
00:58:00
to be solved by trying to impose the the
00:58:02
safety Governor as you said I think
00:58:04
maybe the best you can do is impose a
00:58:07
truth Governor so you know Elon says
00:58:09
that we're going to make sure that our
00:58:11
model at XI the grock model is
00:58:13
scrupulously honest it's not going to
00:58:15
lie to you and I think maybe that's the
00:58:18
best you can do is is Advance AI to be
00:58:21
truthful but when you start injecting
00:58:24
these other safety concerns I I just
00:58:26
think it slows you down and hamstrings
00:58:27
you I think the best way to hit truth is
00:58:30
to site your sources I have been putting
00:58:33
into and I don't know if you have you
00:58:34
played with 40 yet or claude's new Sonet
00:58:37
shth have you yeah I mean it is
00:58:39
unbelievably good if you put site your
00:58:43
sources it's really starting to
00:58:44
understand what you're asking for I
00:58:45
don't know if you've seen this but I was
00:58:46
asking it like I'm hiring some positions
00:58:49
give me the high low average of this
00:58:51
position give me five sources of
00:58:53
information put it in a table and then
00:58:55
average the high low and median and it
00:58:57
came back to me saxs with an incredible
00:58:59
thread Jam off of this position and then
00:59:03
sourced glass store you know indeed
00:59:06
salary.com whatever it was and uh I was
00:59:10
like holy cow this is an hour or two of
00:59:12
researcher work done instantly there's
00:59:15
an important Insight here that I think
00:59:17
people are missing which is that
00:59:20
foundational models are quickly becoming
00:59:22
a consumer surplus every model is
00:59:25
roughly the same they keep getting
00:59:26
better and better but they're also
00:59:28
approaching these ASM totic returns and
00:59:31
what do you do when something approaches
00:59:32
an ASM totic return you need to change a
00:59:35
key underlying variable that you use to
00:59:37
build these models and it looks like one
00:59:39
of those variables that people are
00:59:41
looking at is how you basically take the
00:59:43
internet not as raw data but then you
00:59:45
actually kind of refine it and refine it
00:59:47
some more and then use that as the basis
00:59:49
of learning and what that does is it
00:59:51
drives up model costs to a degree that
00:59:55
are probably untenable for most
00:59:57
companies except but for a few so I
00:59:59
think it was Dario amade the CEO of
01:00:01
anthropic who said the cost of a a good
01:00:04
functional model today is in the
01:00:06
billions but you know by 2027 it could
01:00:08
easily approach a hundred billion
01:00:11
dollar the problem that that represents
01:00:14
for ilas company and I wish him the best
01:00:16
of luck but the reality is there isn't
01:00:17
hundred billion dollars for him to have
01:00:19
Google will find it Microsoft will find
01:00:21
it Facebook will find it Amazon is
01:00:23
coming out open AI will probably find it
01:00:26
Amazon will find it but I suspect that
01:00:28
these other startups there just isn't
01:00:31
that much money going into AI because
01:00:32
the returns don't justify it so I think
01:00:34
the bigger problem that you have is that
01:00:36
it's becoming an arms race it's not
01:00:38
dissimilar actually to ride sharing when
01:00:39
people saw Uber's success they thought
01:00:41
well this is simple and it was but you
01:00:43
had to subsidize losses for decades
01:00:46
before that company was profitable but
01:00:48
meanwhile you had to starve all of these
01:00:50
other companies that were funded to
01:00:51
compete with Uber until they ran out of
01:00:53
money and died I think that you could
01:00:55
make claim that the AI foundational
01:00:57
Model Market will look similar to that
01:01:00
one startup can probably win but there
01:01:03
will be a bunch of Open Source
01:01:04
Alternatives they're all ASM totically
01:01:06
similar and so it's an arms race on cost
01:01:07
and compute and I just don't see VCS
01:01:10
having the temperament and the
01:01:11
wherewithal to fund hundreds of billions
01:01:13
of dollars into multiple companies to do
01:01:16
that freberg any thoughts on the latest
01:01:19
models have you played with them I'm
01:01:20
curious um I have been having tremendous
01:01:22
results there it seems like there is I
01:01:24
don't know I don't want to say stepun
01:01:25
function but man it's a lot better right
01:01:28
now have you used any of these models
01:01:30
and are you applying any of them inside
01:01:32
of your company we're using a lot more
01:01:34
models and we're seeing them be very
01:01:36
practically applied at the edge so you
01:01:38
don't need to have large models running
01:01:41
on a large compute Cloud to get
01:01:43
practical value and this is definitely a
01:01:46
big a big point in the industry is that
01:01:50
you're you're getting highly functional
01:01:52
application specific models that can be
01:01:54
run in a local environment on the edge
01:01:57
so they're not running the cloud on big
01:02:00
compute clusters and there's incredible
01:02:02
applications in things like Machine
01:02:04
Vision and control systems you could
01:02:06
ultimately see this being I don't know
01:02:08
if you guys saw that Chinese dog we
01:02:11
never talked about
01:02:13
this China basically ripped off Boston
01:02:15
Dynamics or at least that's what it
01:02:16
looks like and they created this
01:02:18
military dog Nick can you pull up the
01:02:20
clip and then they put machine guns on
01:02:21
the back of the dog's back the models
01:02:23
are running locally in these devices I
01:02:26
think we're going to have a few
01:02:27
demonstrations of this at the um at the
01:02:30
all Summit so the robotic applications
01:02:32
are pretty powerful Machine Vision
01:02:34
applications are very powerful and when
01:02:36
you see this insane video from China by
01:02:38
the way this is a totally different
01:02:39
topic you guys seen this I I have seen
01:02:41
this it's so this thing goes
01:02:43
autonomously into a building and it can
01:02:45
then find its Target and eliminate its
01:02:47
Target with the machine gun on the back
01:02:49
incredible and you can see this becoming
01:02:52
like let's say they they build assembly
01:02:54
line and they put out 10 million 50
01:02:55
million of these things and these things
01:02:57
can now go run autonomously in the field
01:03:01
this is the Dark Side of small highly
01:03:04
performative application specific models
01:03:07
running in an embedded way imagine those
01:03:08
are amphi and they could travel against
01:03:11
they could travel across water and wind
01:03:14
up in another destination I don't know
01:03:15
where would a beach Invasion occur
01:03:18
anyway that was a very funky tangential
01:03:19
aside all right uh we've talked about
01:03:22
Microsoft and the bundling issues a
01:03:23
number of times here Saku had a spicy uh
01:03:26
take on this well the EU just charged
01:03:28
Microsoft with antitrust violations over
01:03:30
how it bundles teams their quote unquote
01:03:33
slack killer into office here's a quick
01:03:36
chart Microsoft teams obviously was
01:03:39
bundled everybody has it automatically
01:03:42
with office you don't get a choice and
01:03:44
they rocket it to 75 million members in
01:03:47
2022 slacks 12 million you've obviously
01:03:49
got a lot of thoughts here I'm sure too
01:03:52
as
01:03:53
well jamat and you were the early invest
01:03:56
in this looks like Salesforce just got a
01:03:59
big win Benny off gave some commentary
01:04:01
on x Microsoft excels with bundling it's
01:04:03
not it's their not so secret weapon for
01:04:06
dominating new markets we know the
01:04:08
Playbook office plus teams Windows plus
01:04:10
Explorer Azure plus Visual Studio 365
01:04:13
plus one drive and Xbox Plus game Xbox
01:04:17
plus Game Pass here's a clip of saaks
01:04:19
discussing this on episode 113 of your
01:04:22
Allin podcast if Microsoft can basically
01:04:26
clone the sort of the the Breakthrough
01:04:29
Innovative product you know just say
01:04:31
they do one every year and then they put
01:04:33
a crappy version of that in their bundle
01:04:36
yeah 10% 20 or 50% worse but they give
01:04:38
it away effectively for free as part of
01:04:40
the bundle and then they basically pull
01:04:42
the legs out from under that other
01:04:44
company so it can't be a a vibrant
01:04:45
competitor and then the next year
01:04:47
they'll just raise the price of the
01:04:48
bundle right and they've done that with
01:04:50
slack they've done that with OCTA
01:04:52
they've done that with zoom can we have
01:04:55
a vibrant Tech ecosystem at least in B2B
01:04:57
software if Microsoft can just keep
01:04:59
doing that indefinitely all right sax
01:05:02
you heard your quote there and guessing
01:05:04
you're not shocked by this
01:05:06
action well I think the EU made the
01:05:08
right decision here they basically sided
01:05:10
with Salesforce who made the complaint
01:05:12
and said that Microsoft was engaged in
01:05:15
illegal bundling by combining Microsoft
01:05:19
Office and teams and the reality is
01:05:22
Microsoft Office is a product that every
01:05:24
company has to have have every certainly
01:05:27
every Enterprise has to have and by
01:05:30
bundling it means that that
01:05:32
Enterprise receives the teams product
01:05:35
for free until of course the price of
01:05:37
the bundle goes up the next year which
01:05:38
it has just about every single year so
01:05:42
what that does is when that Enterprise
01:05:44
is evaluating the choice of do we use
01:05:46
teams or do we use slack or for example
01:05:49
glue or some other tool teams on the
01:05:53
margin appears to be free
01:05:55
whereas slack is something you have to
01:05:57
pay for seats and I think that is that
01:06:00
is a legal bundling you know when you
01:06:02
have a monopoly in one product and you
01:06:03
systematically use it to keep adding new
01:06:07
products that again on the margins
01:06:09
appear to be free because you've bundled
01:06:11
them and I think the EU has done the
01:06:13
right thing here which is push to end
01:06:15
the bundling every single product needs
01:06:17
to have its own allart pricing and when
01:06:19
you add together the alart prices it
01:06:22
should equal the price of the bundle so
01:06:24
in other words you don't get anything on
01:06:26
the margin for free the customer needs
01:06:28
to have the discretion to choose what it
01:06:30
wants if we don't do that I do think
01:06:33
that Microsoft will use the power of the
01:06:35
bundle to systematically dominate
01:06:38
enterprise software and they won't take
01:06:40
on everybody at once but like I said
01:06:42
they'll every year they'll add a new
01:06:44
product to the bundle shth what's the uh
01:06:47
what's the middle ground here between
01:06:48
the interest of consumers which is hey
01:06:51
I'm getting free a free version of slack
01:06:54
it's not free it appear appears to be
01:06:56
free on the margins because it's now
01:06:57
part of the bundle but then they raise
01:06:59
the price of the bundle the next year
01:07:00
correct they they boil the Frog so so
01:07:03
killed once they've pulled the legs out
01:07:05
pulled the rug out from under their
01:07:07
competition and that competitor is no
01:07:09
longer viable now they can raise the
01:07:11
price of the bundle okay and so it's
01:07:13
kind of like dumping in a way I mean
01:07:14
this is a very old antitrust argument
01:07:16
when you would dump product in the
01:07:18
market to kill a competitor or you would
01:07:19
price under your cost to kill a
01:07:21
competitor right yeah you dump to
01:07:23
basically drive a competitor out of
01:07:25
business because there's large cost of
01:07:27
Entry there's large capex required to
01:07:30
create a new
01:07:31
competitor and um and this is this is
01:07:34
basically what they're doing is they
01:07:35
appear to give you they appear to give
01:07:37
you the the slack clone or whatever for
01:07:41
free but then once they've uh pulled the
01:07:44
the rug out they'll increase the price
01:07:45
of the bundle shth what's the balance
01:07:47
here between say I don't know Apple
01:07:51
giving away a free note P note taking
01:07:53
app or a free journaling app to
01:07:55
Consumers saying hey consumers get this
01:07:56
benefit of free product uh versus the
01:08:00
bundling concept here with hey we'll
01:08:02
give a for free but eventually
01:08:04
we're going to boil the Frog what's your
01:08:06
thought of how to adjudicate this or to
01:08:09
execute on it uh the best interest of
01:08:11
consumers Microsoft has been bundling to
01:08:14
bundling products to kill competitors
01:08:16
for 40 years the the 10 years that they
01:08:19
didn't do it was the 10 years when Steve
01:08:22
Balmer was in charge during which there
01:08:25
was a legal document between Microsoft
01:08:27
and the justice department a consent
01:08:29
decree that prevented them from doing it
01:08:32
that consent decree came to be because
01:08:35
of this exact strategy and the most
01:08:37
famous example that was the tail end of
01:08:38
that process was when they used Internet
01:08:41
Explorer and they bundled it with uh
01:08:43
Microsoft Windows and they killed
01:08:44
Netscape right so there there's eene
01:08:47
examples of
01:08:48
this so I think that they've gone back
01:08:52
to their old Playbook it's a Playbook
01:08:54
that you have to remember the Executives
01:08:55
that run Microsoft have been there for
01:08:57
30 and 40 years they know this play and
01:08:59
they know that it works and they've been
01:09:01
rewarded incredibly handsomely by the
01:09:03
public markets so they're going to keep
01:09:05
doing it would slack have sold the
01:09:07
Salesforce now look I'm not complaining
01:09:09
it was a $27 billion acquisition but the
01:09:12
question is if it were allowed to
01:09:14
compete feature for
01:09:16
feature could it have beat teams
01:09:19
possibly would the board have made and I
01:09:22
was on the board of slack a decision to
01:09:24
have tried
01:09:26
possibly but none of those options were
01:09:27
on the table because when you see a
01:09:29
product it doesn't matter how inferior
01:09:31
it is get bundled in it's kind of DOA
01:09:34
and then you know you're on a melting
01:09:36
Iceberg and so you have to make a very
01:09:37
quick decision to preserve Enterprise
01:09:38
Value so I think what this comes down to
01:09:40
is the the FDC and the doj need to dust
01:09:44
off that old consent decree read it and
01:09:47
figure out whether this makes sense
01:09:49
again it seems like folks in the EU have
01:09:52
more recently read that consent degree
01:09:55
than American Regulators up look what
01:09:57
we've said all along is that the right
01:09:59
approach to antitrust is to stop
01:10:00
anti-competitive tactics bundling is at
01:10:02
the top of the list instead what they've
01:10:04
stopped is all m&a which is actually bad
01:10:07
for the ecosystem because you you deny
01:10:09
risk Capital reward and you need that
01:10:12
reward in order to induce the next stage
01:10:14
of risk-taking so again I think this was
01:10:17
a good decision by the EU regulators and
01:10:20
the um competition authorities in the US
01:10:22
should actually be looking to this again
01:10:23
it's a better approach than stifling m&a
01:10:26
you are so right on this we are so
01:10:27
aligned if you look at I've been talking
01:10:29
to a lot of
01:10:31
LPS and in talking to them they're
01:10:34
looking at corporate credit and p& Deals
01:10:38
because they can get a return on those
01:10:41
and then they're looking at Venture and
01:10:42
they're saying hey why is there no m&a
01:10:43
occurring where's our DPI can you guys
01:10:45
sell some of these companies it's like
01:10:46
yeah we can't sell them because lon's
01:10:49
going to Scuttle this m&a and what that
01:10:52
means is in a very real way we have
01:10:56
have dollars being taken out of
01:10:59
innovation in early stage and being put
01:11:01
into you know privatizing SAS companies
01:11:05
whatever real estate deals and this is
01:11:07
really dangerous for America we really
01:11:09
need more of this okay I I'll make one
01:11:12
last wrap on this topic I'll take the
01:11:15
other side of bundling oh here we go I
01:11:18
think ultimately if bundling benefits
01:11:21
the consumer or the customer from
01:11:23
improved prices I don't bu the
01:11:26
Anti-Trust arguments on a lot of these
01:11:28
cases I don't think that you're keeping
01:11:30
competitive Solutions in the market if
01:11:32
the benef if the benefit of the lower
01:11:34
cost product is actually there for the
01:11:36
consumer or the customer supermarkets
01:11:39
for example do this right so there's a
01:11:40
lot of products in the supermarket like
01:11:41
peanut butter milk eggs that have
01:11:43
historically been big loss leaders
01:11:45
because they get people in the store
01:11:46
once they get in the store monopolies
01:11:48
they're effectively peanut butter is not
01:11:50
a monopoly Bund Monopoly super it's F to
01:11:53
bundle Commodities but when when a
01:11:54
product is a monopoly and every enterpr
01:11:57
have finite shelf lives right so you're
01:11:59
talking about one week and teams is not
01:12:02
a monopoly right when you install it
01:12:04
Microsoft offices
01:12:06
and you can't rip it up you can't rip
01:12:09
there other options you have options
01:12:11
there's plenty of options and the whole
01:12:13
benefit of SAS is that you can Market
01:12:15
power of course they do I can switch to
01:12:19
money but but in the Enterprise I don't
01:12:21
have to buy it I don't have to buy
01:12:22
Enterprise seat licenses for office I
01:12:24
can buy Google
01:12:26
think that way
01:12:28
enterpr Enterprises don't think that way
01:12:31
yeah they have every option to Google
01:12:33
competing effectively in the office
01:12:34
space against Microsoft Office you to
01:12:36
look is the do Zoom is competing
01:12:38
effectively against teams like none of
01:12:40
these businesses have out from under
01:12:42
Zoom I would I would argue is getting SL
01:12:45
growing what look once they put teams in
01:12:46
the bundle slack sto growing what's the
01:12:48
monopolistic lock in the amazing thing
01:12:50
about s is that there's no switching
01:12:52
cost there's no switching cost what I
01:12:55
don't think we're debating that I think
01:12:56
what we're debating is a sales practice
01:12:58
where Microsoft says well you need
01:13:00
office you need Windows and you need 365
01:13:04
or sorry active directory well if you'd
01:13:06
like all of these things we're going to
01:13:07
give you this product for free as well
01:13:10
and they're going to be tightly
01:13:11
integrated then when you go to slack you
01:13:13
have to pay more and then you think to
01:13:16
yourself well how do I go back to my CFO
01:13:18
and say I need an extra $1.2 million a
01:13:20
year for this Enterprise license to
01:13:22
slack and then people say well that's my
01:13:24
point you're saving money if you stick
01:13:25
with Microsoft they're they're giving
01:13:27
you a discount not because once they
01:13:28
kill slack they'll just raise the price
01:13:30
of the bundle that's the point that's a
01:13:32
theory and if that's true that should be
01:13:34
prosecuted I don't think that the idea
01:13:37
was under the Microsoft Internet
01:13:39
Explorer action yeah but that's the
01:13:41
violating action that's my point that's
01:13:44
why can't you just make Microsoft the
01:13:45
idea of having a bundle should not be a
01:13:47
violating action no all Microsoft has to
01:13:49
do is they've got a price of the bundle
01:13:52
allocate that price across all the
01:13:54
components of the bundle so people can
01:13:56
buy each product all cart that's all
01:13:58
they can still they can still um sell a
01:14:01
bundled offering if at the end of the
01:14:03
day that sum is cheaper than you buying
01:14:05
the alternative all cart from third
01:14:07
party vendors that is a great deal for
01:14:09
you as a customer it it can be cheaper
01:14:11
yeah what we're talking about here is
01:14:13
proactively keeping competition and that
01:14:16
and I think that creates a good
01:14:17
competitive Dynamic but you know maybe
01:14:19
I'm thinking two first principles on
01:14:20
this I think you're missing something
01:14:21
here at freeberg which is like what
01:14:23
happens then when let's just say slack
01:14:24
there was n a Suitor for slug okay let's
01:14:27
take the internet browser example
01:14:29
because I think it's better if you
01:14:30
didn't have a multi billion doll company
01:14:33
prop up a product because they just felt
01:14:35
like it I.E Chrome and Google you would
01:14:37
have had Microsoft run away with the
01:14:39
core interface for the internet we don't
01:14:41
know how that would have turned out so
01:14:43
by luck we've had some modic come of
01:14:46
consumer choice but it's not as if
01:14:48
Firefox did well Firefox went to
01:14:49
basically irrelevancy Netscape went to
01:14:52
zero so there are examples where when
01:14:54
Microsoft has done done this they can
01:14:55
starve the Market of Choice over long
01:14:57
periods of time and I think hold on a
01:15:00
second so if your if your if your whole
01:15:01
point is well let's just bet on the
01:15:04
largest of other large companies that's
01:15:06
a bad bet but I will show you multiple
01:15:08
counter examples Google meet does not
01:15:10
dominate market share you're talking
01:15:12
about the largest you're talking about
01:15:13
the largest of companies you're talking
01:15:15
not about competitive practices find me
01:15:18
Venture funded people risk-taking people
01:15:20
who need a return on investment Google
01:15:22
is the worst example they have the most
01:15:25
discriminate forms of spending I'm not
01:15:26
saying that they shouldn't be allowed to
01:15:28
Sor giv a counter example to the point
01:15:30
about bundling right counter example
01:15:32
because Google wave or any of these
01:15:34
other nonsense products that didn't work
01:15:36
that you I'm not calling Google meet a
01:15:38
the the point of a healthy product
01:15:40
environment and Market is not that one
01:15:43
incumbent and another incumbent can
01:15:45
create their own crappy versions it's
01:15:47
that you could theoretically have an
01:15:50
open market where somebody can be funded
01:15:52
with nominal amounts of capital and
01:15:53
compete effectively that isn't possible
01:15:55
in many markets in software because of
01:15:57
these kinds of strategies so what you're
01:16:00
reduced to are these huge companies with
01:16:03
this product sprawl I don't think those
01:16:05
are good products and I think we're
01:16:07
lying to ourselves to say that they are
01:16:09
Google meet is a terrible product okay
01:16:12
so whatever they're competing with is a
01:16:14
terrible alternative that's my point and
01:16:16
and they've lost market share they have
01:16:18
not won market share by bundling and if
01:16:20
you try to find a real competitor to
01:16:22
build an alternative to it they're not
01:16:25
able to get funded because the Venture
01:16:27
investor says no I can't and that's the
01:16:29
market power that stifles competition
01:16:33
that's what this is about and if you as
01:16:35
an entrepreneur come up with a much
01:16:37
better product than Google meet a VC
01:16:40
will say wow we can go and blow up the
01:16:42
side of the Hall of that ship
01:16:43
totally i s person Microsoft bought
01:16:47
Skype how many years ago for8 halfon
01:16:50
anded if left unchecked Microsoft will
01:16:53
stand alone un product and they totally
01:16:56
dominated the market while everyone else
01:16:58
has been doing bundling the bottom line
01:17:00
is if left unchecked you will see people
01:17:03
abuse this it is not a big ass to have
01:17:06
allock cart pricing and that will make
01:17:08
the playing field much more is a Terri
01:17:11
the zoom example is a terrible one and
01:17:13
and the reason is that p&l would have a
01:17:16
hole blown on the side of it if they did
01:17:18
not have 90% of their R&D and Opex in
01:17:20
China so but for the grace of God and
01:17:23
Eric strategic thinking they were able
01:17:25
to survive but that is a perfect example
01:17:27
of a company that would absolutely not
01:17:29
have existed had they not had a labor
01:17:31
Arbitrage that is not the basis of a
01:17:34
competitive and fair market and you
01:17:36
cannot expect people going off to all
01:17:38
Far Corners of the world and trying to
01:17:40
do all these gymnastics to viably
01:17:43
compete against a Microsoft and a Google
01:17:46
I would argue figma Adobe Adobe has a
01:17:48
bundling solution they if you guys have
01:17:50
ever tried to sign up for Adobe or end
01:17:52
your subscription it's nearly impossible
01:17:54
just had action taken against them for
01:17:56
that they've got these insane practices
01:17:58
they make you buy everything to get
01:17:59
access to one thing comes along and
01:18:02
sigma figma kills the market they come
01:18:04
in and they're like we're a better
01:18:06
product better markets do win even with
01:18:08
bundling that's my argument I think the
01:18:10
interesting thing with Adobe is that
01:18:12
they have a product Suite that's used in
01:18:14
a narrow field I think what saaks is
01:18:15
saying is Adobe is about a sort of
01:18:18
vertical system of record I think what
01:18:20
the thing about Microsoft and you could
01:18:22
probably say about Google is but less so
01:18:24
but definitely from Microsoft is they
01:18:25
are these very horizontal broad
01:18:28
amorphous systems of record that you
01:18:30
cannot easily replace there aren't
01:18:32
people running around building nine of
01:18:34
the 19 things that Microsoft gives you
01:18:36
in the bundle that's the problem okay
01:18:39
the debate I mean on this very show we
01:18:42
were arguing that the figma acquisition
01:18:44
should go through because it created a
01:18:46
new market for web designers where as
01:18:48
Photoshop was basically for graphic
01:18:53
designers it doesn't with Photoshop it
01:18:55
competes with some of their other design
01:18:56
programs but that's anyway all right
01:18:59
we're not going to settle it here I
01:19:00
think there's a difference between a
01:19:01
bundle and a s SES are okay bundling
01:19:04
when you already have a monopoly in the
01:19:06
relevant part of Bund bunding is when
01:19:08
you take a wrench and a can of peanut
01:19:09
butter and put them together like here
01:19:11
you're gonna take them both you're like
01:19:12
well I only need the wrench well well
01:19:13
you're going to take the peanut butter
01:19:14
and they're like well I already have
01:19:15
peanut butter so I don't need to buy new
01:19:17
peanut butter I mean we saw this in the
01:19:18
cable providers and Direct TV as well
01:19:20
you know just you can't P for ESPN even
01:19:24
if you don't like sports all right
01:19:25
listen another amazing episode for
01:19:28
compassionate chamath satire Sachs and
01:19:32
the Frank satire saak wants to say one
01:19:35
more thing I just have a perfect wrap up
01:19:37
okay satire sax go ahead what's
01:19:40
your here we go sat no let's put this uh
01:19:43
tweet by Joe Biden President Biden oh
01:19:46
God here the elder
01:19:48
abuse no I want to I want to compliment
01:19:51
Joe Biden on continuing to fight you
01:19:54
keep fighting Joe do not let the media
01:19:57
get you down one bad night is not a
01:20:00
reason to get out of the
01:20:02
race all these people stabbing you in
01:20:04
the back they're basically ingrates and
01:20:06
backstabbers you're doing just fine all
01:20:08
right and from candid and from candid
01:20:11
calanis to the Democratic party disad
01:20:15
your disgrace what you did to the
01:20:16
American people with this rope of dope
01:20:18
is
01:20:20
ridiculous disad 25th amendment get this
01:20:24
guy out office president Camala hot
01:20:26
swapp it Dean Phillips let's go we'll
01:20:30
see you all next time on the all in
01:20:34
podcast love you
01:20:36
boys let your winners
01:20:39
ride Rainman
01:20:43
David and instead we open source it to
01:20:46
the fans and they've just gone crazy
01:20:48
with it love queen of
01:20:53
[Music]
01:20:57
besties
01:20:59
are that's my dog taking
01:21:03
driveway man oh man myit will meet me we
01:21:08
should all just get a room and just have
01:21:09
one big huge orgy cuz they're all this
01:21:11
useless it's like this like sexual
01:21:13
tension that they just need to release
01:21:14
[Music]
01:21:20
somehow we need to get merch our all
01:21:25
[Music]
01:21:30
I'm going all in
