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hey everybody Welcome to the all in
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podcast I'm your moderator for the week
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Dave Friedberg
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not the world's greatest moderator this
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show is going to be a bit of a shortened
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version at the back end of the Pod today
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we actually are going to show some q a
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from Jason's launch Summit which he held
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in Napa Valley this week great event
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thanks for having us up there Jay Cal
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thanks for coming great speakers great
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content and we did a live q a
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for the all in pod with the audience
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there which will transition to about
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halfway through through the show today
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Jay Cal thanks for your hospitality oh
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yeah thank you the fun birthday party
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the poker night we had a great time I
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still didn't know what I was doing there
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you were meeting some of your LPS who
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you've never met before it was like a
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dog and pony show Jake Howell was using
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us as some sort of dog and pony show to
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raise money Zack did you really have LPS
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there that you had never met no yes hold
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on a second I had one LP there who I
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have definitely met many times before
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okay she told us she'd never met you she
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wanted an introduction so maybe she's
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getting into the spirit of all in and
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joking with you but you had a three-hour
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meeting with one of your own pieces I
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heard Chicago yeah she said she had like
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two or three hours are you with us today
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what's going on you're there buddy was
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very drunk by the way he brought up his
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own wine he started Margarita well he
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was drunk by the time we got there what
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he showed up
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he was day drinking margaritas in the
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sun oh and then we showed up and he was
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like falling asleep by the time we were
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done with the steaks I said
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[Music]
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David's side
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we open source it to the fans and
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they've just gone crazy
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[Music]
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you know by the way politics is one of
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these incredible things where you see
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the meanest people
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come out of the woodwork when you even
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feign support for somebody that they
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don't support now that it's out there
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that sax and I are doing this fundraiser
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for RFK oh yeah if you look at Twitter
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some of like the the Democratic
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surrogates are out just
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smacking me and sax around and it's
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incredible
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these people are like the biggest
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imposter loser clowns
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they've never literally done anything in
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their whole life and then they show up
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and then they just like how dare you
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work and help build a company how dare
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you help build another company how dare
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you help now fund other companies I am a
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talking mouthpiece who's never done
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anything except work and want
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Administration as a speechwriter and now
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I think you guys suck balls it's like
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give me a break
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so you are you a little kind of
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emotional about that today I actually I
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love critiques actually because I think
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like you can learn a lot from critiques
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but then when mids just
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spew
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I just get annoyed I think mids should
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not be allowed to talk yeah well that's
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just my thought there goes half the
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internet sex are your Republican cohort
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friends upset about you hosting a
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fundraiser for RFK I've got none of that
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none of that
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that's interesting what's your take on
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that yeah do Republicans generally think
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that it's a good thing if RK Jr gets the
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Democratic nomination because he will be
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easily beatable I don't think they're
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thinking that way I think that there's a
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respect for RFK Jr among many
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Republicans because he's speaking out on
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issues that they care about like I've
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talked about he's denouncing censorship
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he's in favor of free speech he's in
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favor of civil liberties and you know
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not the this master surveillance State
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he's speaking out in favor of Peace
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instead of War he's speaking out on the
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border he had this amazing video that
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was great a couple of days ago where he
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went to the Border in Yuma Arizona at 2
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A.M in the morning and he shows he shows
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where the border wall ends and where the
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border wall ends the line begins and
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people from all over the world are just
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entering through this hole in the wall
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in a never-ending stream of people and
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then they get loaded onto buses provided
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by the government and then they get
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handed a ticket to supposedly appear in
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court to resolve their case in three or
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four years and they're never heard from
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again and they're dispersed all over the
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country what I don't understand is if
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the federal government can get its act
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together enough enough to provide buses
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why can't they get their act together
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enough to plug the hole in the wall it's
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absurd this is like an act of sabotage
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against the United States and so he's
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there just pointing this out I've never
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seen anything like this before it was
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interesting as a as a Democrat to do
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this because that's typically kind of a
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Republican
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point right and some of the commentary
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made about RFK Jr I think it was in the
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New York Times this week um or someone
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that covered his candidacy one of the
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big media companies
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highlighted how much of his agenda seems
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to be a republican talking point agenda
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does that sound accurate
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even most uh people in the country who
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identify as Democrats would be against
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having an open border that's what we're
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talking about when there's a hole in the
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wall and people can just start forming a
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line and then once they get through the
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line right they're literally hold on
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they're basically distributed throughout
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the country on buses I don't think most
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people in the country even Democrats
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would support that but what he's
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violating here is the Press blackout on
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what's really going on at the border
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he went there yeah but other Republican
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talking points so the points around the
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vaccine the points are Republican well
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he's expressed obviously concerns about
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vaccines preceding the covet vaccine I
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don't know whether he's right about that
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or not we're not willing to say whether
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he's right or wrong about that because I
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just don't know enough I think he's
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definitely right about the inefficacy of
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the coveted vaccine we've talked about
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this before even Bill Gates admits now
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that the vaccine doesn't work it's too
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short acting and it doesn't hold up
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against variance it's not a vaccine
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let's just start let's see it doesn't
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prevent you from getting the illness
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it's a death reduction shot it was a
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revenue grab by big Pharma plastered
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with non-scientific thinking from a
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bunch of people who should have known
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better wow okay I think you just got our
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oh so much
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this is just the truth hold on what
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shamas said is just like the factual
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reality and
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and you can't get that from the
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mainstream media like there's no
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re-evaluation there's no appraisal they
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control what we see in here it's like
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proveda level in terms of the propaganda
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and that's why I think RFK Jr is so
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interesting is because he is blowing up
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what the mainstream media wants is
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control the really interesting thing
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about him going to the Border I agree
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with sax is hey let's just have a
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discussion about this and look at the
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actual facts on the ground that we can
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agree on and what he actually did was he
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pierced the vow of like this is an issue
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about a certain group of people he was
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there and there are people from
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Afghanistan China all over the world
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coming in he made the point that this
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isn't just about one country and that
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these people are suffering and that I
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thought was like another really
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important highlight these people are
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being trafficked they're you know being
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abused at the border and that it's going
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to cost us 10 million
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talking about it and he's done this with
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Ukraine as well where he emphasizes the
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humanitarian aspect of it yes
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about it and I think Republicans should
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adopt some of that
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he rhetoric and to jamaat's point I
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think it's it is I think it's a
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MoneyGram I do think it lowered death
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rates but you know I do think piercing
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the veil on this and none of us are
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still getting boosted because we know
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they don't work guys okay let's keep
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moving I'm not debating vaccines and
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politics we're moving on we're going to
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talk about crypto so this week the SEC
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here we go serious action
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against binance and coinbase
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you know pretty significant pretty loud
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SEC filed 13 charges against Finance
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entities and the founders CC charges
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include operating unregistered
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Securities exchanges broker dealers and
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clearing agencies misrepresenting their
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trading controls and their oversight on
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the binance U.S platform and the
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unregistered offer and sale of
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Securities the next day they sought a
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temporary restraining order to freeze
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binance's U.S assets
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and then on Tuesday the SEC sued
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coinbase over their exchange and their
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staking programs stock dropped 12
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percent the SEC said that
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the company was operating an
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unregistered exchange and broker and
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that 13 of their assets listed on their
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platform were considered crypto asset
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Securities Brian Armstrong obviously has
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been on the Pod several times said he's
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not shutting down his staking service
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and said regarding the SEC complaint
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against us today we're proud to
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represent the industry in court to
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finally get some clarity around crypto
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rules he's generally made the statement
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that he has tried multiple times to
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register with the SEC they have not had
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a mechanism for him to register
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they have tried to do everything by the
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book and that the SEC
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approved their IPO filing knowing full
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well the details of their business and
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their operating model and still allowed
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them to go public on a U.S Securities
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Exchange despite full knowledge about
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their business Jamal does anything
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change this week based on the sec's
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action or is this just a continuation of
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you know crypto has been
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rolled back and will continue to roll
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back here in the U.S
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or is this something new and a new
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action and opens up a new front on the
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uh the government versus crypto it's a
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good question I think there's two ways
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to look at this one
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is the conspiracy theorist way which you
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see a lot of on
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Twitter which is this idea that crypto
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is making all of these inroads
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as a replacement mechanism for fiat
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currency and so governments are really
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now invested in trying to shut it down
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I think that's
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largely untrue and then there's the more
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simple basic reality
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which is that there was one part of the
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SEC
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that frankly didn't do the job that they
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were supposed to by either allowing a
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few of these crypto companies or crypto
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businesses to go public either as
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Standalone businesses or as part of
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other businesses so coinbase Robin Hood
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Etc
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and then there's this part of the
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enforcement action after this FTX Fiasco
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which is a lot of cya
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covering your ass by the SEC
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especially because it looked like they
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had some cozy relationships with them
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and so they're coming down hard and
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they're going to go and systematically
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dismantle
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the largest actors and they're going to
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go through the value chain so I think
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the obvious place that they're looking
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now are
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the exchanges they'll look at the
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custodial Services they will not approve
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any ETFs
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and then eventually I do think it
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trickles into all of the staking
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services
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and eventually I think it'll touch the
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Venture community and all of those firms
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and funds that had a huge robust
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business
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in staking
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these crypto projects in order to get
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coins like founding coins and then being
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able to sell them Jacob I mean I've been
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talking about this since the beginning
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because I I've bought Bitcoin and wrote
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about Bitcoin when it was maybe 25 cents
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and then again when it was a hundred so
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I've been following this for a long time
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and I think
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thinking from first principles just
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stepping back for a moment you know what
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we do in technology is fundamentally
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disruptive if it's at its best if it's
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truly going to be important in the world
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and when you hear that word disruption
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you kind of file it as a buzzword but
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what it really means at its core is like
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competition and it's not just
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competition disruption when you say
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disruption you're talking about
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existential competition two people go in
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the ring one person comes out like
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somebody's gonna get really [ __ ] up
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and if you people keep bringing up oh
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you're an investor at Uber they broke
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the rules they bent the rules
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Uber was going against caps Airbnb was
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going against like hotels wework was
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going against like long-term real estate
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leases when you look at all those
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disruptive Technologies and what they
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did at their core they disrupted on
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behalf of consumers and lower prices
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increased Choice et cetera when you get
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crypto
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the crypto crowd literally said we are
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going to replace fiat currency fiat
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currency is the government and so my
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thesis from the beginning was if the
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government has a way to stop this they
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do not want to be disrupted what what is
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a government at its core it's a military
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it's a bunch of rules laws and it's
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money that's the kind of pillars of any
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government's power we knew the
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government wasn't going to give this up
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and you know they they effed around and
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found out but the truth is the and this
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is where I have some sympathy for the
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crypto people not the people who are
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just committing crime with the whole way
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and just dumping these bags on retail
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Etc but we do want to have this
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Innovation here there are some
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Innovative aspects to it but Gary Ganser
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said listen you already have electronic
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money it's called money in the United
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States we already have these Services
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you don't need this consumers don't need
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it and you have to understand the sec's
00:13:30
function in the world to understand why
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they're taking this action their
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function is to protect investors
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investors lost a bunch of money
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therefore they are going to
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retroactively inflict pain and hold
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people accountable for their mandate
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which is to protect investors you could
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have easily resolved this the SEC
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and the company's gonna resolve this the
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companies could have followed these
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things as Securities and only allowed
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accredited investors top five percent of
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the country people who make over 200k a
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year they didn't do that they said
00:14:00
anybody can buy these
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well that's just not how it works in
00:14:04
America and it should change I think
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everybody should be able to buy any
00:14:08
security they want in America just like
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anybody can go play Blackjack and the
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easiest solution for this just passed in
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Congress this week and we'll go to the
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Senate and be a lawsuit I think allowing
00:14:17
every American the other 94 to take a
00:14:19
test and become accredited if that
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happens you take a test just like you
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take a driver's license test I know what
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diversification is I know how risky
00:14:26
these are once you take that 50 question
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test you become accredited and then you
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can buy these coins if you want to and
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that's really the easiest path to
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resolution here so we don't have Brian
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Armstrong move his company to the Middle
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East or uh you know an island in the
00:14:39
Caribbean which is what he's going to do
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I predict so okay well look we've seen
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this bill make its way I think through
00:14:47
is it going to the Senate next or is it
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going to the Senate yeah going to the
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Senate so let's see if it gets done I
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think it's a it's a good point one thing
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I'll point out
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when individual investors were making
00:15:00
money
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because all of these asset values were
00:15:03
inflating all of the coins were growing
00:15:05
and were climbing in value everyone felt
00:15:07
good
00:15:08
there was an emergent cry that we all
00:15:11
want to have access to these new
00:15:13
instruments we all have a right to make
00:15:15
these Investments and to own these
00:15:17
assets and then as the asset values
00:15:20
declined and individual investors began
00:15:23
losing money the emergent cry is where
00:15:26
was the government to help save and
00:15:28
protect us and so the SEC I would argue
00:15:31
was probably a little bit hindered when
00:15:34
the market was inflating and being able
00:15:36
to step in and take action because that
00:15:37
would have been
00:15:39
counter to the cries of the retail
00:15:41
Market but as the retail Market took
00:15:44
their their hits the SEC has to step in
00:15:46
and Congress steps in and everyone
00:15:48
starts to say it's time to act we should
00:15:50
have acted sooner and this was you know
00:15:52
fairly predictable I think what's
00:15:54
happening is more nefarious than that
00:15:56
so the SEC is doing two different things
00:15:59
they're alleging two different kinds of
00:16:03
crimes one set has to do with protecting
00:16:07
investors from having their funds
00:16:11
stolen on these exchanges or at least
00:16:13
commingled FTX did that right where they
00:16:16
basically took customer deposits and
00:16:17
stole them what binance is accused of is
00:16:20
taking customer deposits maybe not
00:16:21
stealing them but commingling them with
00:16:23
company funds that should be looked at
00:16:25
and and I think crypto customers should
00:16:28
be protected against that however the
00:16:30
case against coinbase they're alleging a
00:16:32
completely different set of facts which
00:16:33
is effectively what guns are in the SEC
00:16:35
are saying is that it is not legal to
00:16:38
operate a crypto Exchange in the United
00:16:40
States that is what the SEC is staying
00:16:42
because coinbase has basically done
00:16:44
everything right and I believe that
00:16:46
genzer is far exceeding his authority
00:16:48
and stating something like that it is
00:16:50
not up to the chairman of the SEC to say
00:16:53
that Americans should not be holding
00:16:55
crypto why as a free people should we
00:16:57
not be able to buy crypto if we want to
00:17:01
you know why shouldn't we be able to buy
00:17:02
Bitcoin now maybe you apply rules around
00:17:06
accredited investor status there should
00:17:08
be protections against unsophisticated
00:17:10
investors buying stuff or get defrauded
00:17:12
that's fine that's the framework that
00:17:14
Brian Armstrong is asking for but
00:17:17
everyone should understand what the SEC
00:17:19
is doing right now is
00:17:21
basically usurping Congressional
00:17:23
Authority it should be Congress that
00:17:25
makes the law if Congress wants to ban
00:17:27
crypto exchanges in the United States
00:17:29
and prevent the citizens of the United
00:17:31
States from owning crypto let Congress
00:17:33
do it it should not be up to Gensler to
00:17:35
do that and the question is why is guns
00:17:38
are going this far when previously he
00:17:40
had relationships in the industry
00:17:41
apparently he was a consultant to
00:17:44
binance and even worse he was talking to
00:17:47
FTX about giving them some special
00:17:49
status and I think the reason is the the
00:17:51
scuttlebutt is that he has an alliance
00:17:54
with Elizabeth Warren and the rumor is
00:17:56
that you know she will make him treasury
00:17:58
secretary if he basically destroys
00:17:59
crypto in the U.S sorry where's the
00:18:01
evidence for that that's just someone's
00:18:03
rumor and speculation this is the
00:18:04
scuttlebutt in the industry okay so it's
00:18:07
it's someone
00:18:08
this is in fact the back channel so just
00:18:11
to be clear rumor and innuendo is what
00:18:12
you're saying no look what I would say
00:18:14
is clear is that Gensler and Elizabeth
00:18:16
Warren have an alliance to destroy
00:18:18
crypto in the U.S this was speculated
00:18:20
about before with operation choke point
00:18:22
but now it's clear they're trying to
00:18:24
shut down choke point we've talked about
00:18:26
on the show before it was a series of
00:18:27
actions taken what you do when you're in
00:18:29
a hotel at night
00:18:32
no operation choke point was a series of
00:18:34
actions by the US government to
00:18:36
basically destroy all the on-ramps to
00:18:38
crypto so you couldn't get money into
00:18:40
the system now they're going further and
00:18:41
they're basically saying it is illegal
00:18:43
to operate a crypto Exchange in the
00:18:45
United States
00:18:48
yes
00:18:49
explain why I can explain why you're
00:18:51
wrong
00:18:52
what they're saying is it's not just the
00:18:54
exchange it's that the exchange contains
00:18:56
uh unregistered security so it's a more
00:18:58
nuanced point I think I think I agree
00:19:01
what security could you trade
00:19:03
well if it passes the Howie test or it
00:19:06
is registered and there are people who
00:19:07
have actually their registered their
00:19:09
crypto passes the Howie test no they're
00:19:11
going back on that you could pass it if
00:19:13
you limited it to accredited investors
00:19:15
and the fact is
00:19:17
Brian Armstrong binance and a lot of
00:19:20
crypto projects refused to exclude
00:19:24
non-accredited investors and I watched
00:19:26
this happen up close and personally
00:19:28
you're right about the unregistered
00:19:30
Securities thing they're trying to say
00:19:32
that all crypto is on registered
00:19:34
Securities
00:19:35
no they literally they named them sacks
00:19:38
in the in the lawsuit they named the 16
00:19:40
or 13 what was it Friedberg so they they
00:19:43
know how to it was 13 they know how to
00:19:45
craft this they're saying for these
00:19:46
specific 13. now the industry does feel
00:19:48
you're correct and the back channel is
00:19:50
everybody's against us but if they had
00:19:52
just registered these they would not
00:19:54
have a problem I don't think they're
00:19:55
gonna I think it's not important is not
00:19:59
included he doesn't have a way of
00:20:01
registering them
00:20:02
they do they don't want to so they claim
00:20:05
they don't have a way of registering
00:20:06
they could register it just like we all
00:20:08
know we have privacy there's been a lot
00:20:10
of people tweeting about this that the
00:20:11
SEC has put out statements saying our
00:20:13
door is open come talk to us there is no
00:20:15
Open Door there is no one to talk to
00:20:17
they have no idea how to get registered
00:20:19
how do you think this is going to get
00:20:21
resolved Armstrong's talked publicly
00:20:23
about going to Congress to try and get
00:20:25
some clarifying law passed are you
00:20:27
familiar with any of the
00:20:30
any of the drafting that might be going
00:20:32
on to support his cause here or do you
00:20:34
think it's going to get settled in the
00:20:35
courts first of all I think I think
00:20:37
Brian Armstrong is is a really really
00:20:39
really good entrepreneur
00:20:42
and I'm a really big fan of his
00:20:45
that said
00:20:47
I just don't think that there's a lot of
00:20:50
political support
00:20:52
to visit this issue right now
00:20:55
and so unfortunately I'm pretty
00:20:58
skeptical that you're going to see any
00:21:01
form of legislation pass
00:21:04
I unfortunately think that
00:21:09
the SEC has by and large put the entire
00:21:11
sector into mate and so I think that
00:21:15
what Jason said
00:21:18
is largely right which is that it's
00:21:20
going to force these companies to
00:21:22
preserve Enterprise Value to to leave
00:21:24
the United States and to
00:21:27
jurisdictionally operate from a
00:21:28
different place and to basically IP
00:21:31
block and IP gate U.S residents from
00:21:35
using their products and services
00:21:37
I also think that they're going to have
00:21:38
to pay large fines and so the only thing
00:21:42
that will be left is to adjudicate
00:21:44
all of the staking stuff that that
00:21:46
happened and whether that was right or
00:21:48
wrong right so the court it'll get
00:21:49
settled it'll get decided I agree with
00:21:51
that and I think I think that when you
00:21:53
start talking about minutia like well
00:21:55
these 16 cryptos are okay or not okay no
00:21:59
look you're kind of missing the point
00:22:00
the government led by Gensler is in a
00:22:03
Full Assault on crypto and the goal is
00:22:06
basically to either destroy in the US or
00:22:08
drive it offshore tremath is right about
00:22:10
that and the question is why and I think
00:22:12
jaycal you made the point that
00:22:15
progressives like Elizabeth Warren see
00:22:17
crypto as competition to fiat currency
00:22:21
and they do not want there to be a
00:22:22
competitor now what is the reason for
00:22:24
that I think it's because of their
00:22:25
radical spending schemes remember in the
00:22:27
first years of The Binding
00:22:28
Administration the progressives wanted a
00:22:30
four and a half trillion dollar build
00:22:32
back better Bill remember
00:22:35
Larry Summers told them that you're
00:22:37
going to cause inflation and even the
00:22:40
750 billion dollar scope down version
00:22:42
that they ultimately passed caused a lot
00:22:44
of inflation and it causes the problems
00:22:45
that we have now that we're seeing in
00:22:46
the economy but they wanted four and a
00:22:48
half trillion and when people were
00:22:49
opposed to it and said we couldn't fund
00:22:51
this they were in favor of minting
00:22:52
trillion dollar coins yeah so these are
00:22:56
the people who don't want any check on
00:22:58
their ability to spend down the full
00:23:00
faith and credit of the United States
00:23:02
they would basically spend all the money
00:23:04
that we have they would basically eat
00:23:06
the seed corn or don't have that we
00:23:09
don't have that I think you guys agree
00:23:10
we should not be spending and that is
00:23:12
why they're the faction in our political
00:23:14
system who are most against crypto
00:23:18
hold on I gotta respond to it two things
00:23:20
can be true
00:23:21
one the government doesn't want to give
00:23:23
up control of Fiat I agree with that
00:23:25
second thing that's also true is that
00:23:27
this group of people did not want to
00:23:28
play by the rules they knew the rules
00:23:30
they explicitly broke them for profit
00:23:32
that's why they have them dead to rights
00:23:34
you can name this operation choke point
00:23:37
you can brand it you can put out any
00:23:38
conspiracy theory you want they did have
00:23:40
the option
00:23:42
Theory you agree they're trying to run
00:23:44
these guys out of business I said two
00:23:45
things can be true at the same time
00:23:46
David these this is a tolerance for
00:23:48
ambiguity being able to hold two things
00:23:50
at the same time
00:23:51
and they don't want to give up control
00:23:54
yeah that's what's happening that's the
00:23:55
rule you have to file as a security you
00:23:57
have to only allow them you said that
00:23:59
coinbase was a good actor
00:24:01
I believe they have good intentions yes
00:24:03
I don't believe the other people do I do
00:24:05
believe you believe that coinbase is in
00:24:07
violation of the law I believe the
00:24:09
Securities they trading are in violation
00:24:11
of Law and that's obvious if you but I
00:24:13
believe that law should change let me
00:24:14
give you security points our security
00:24:17
jaycal let me give you a third point and
00:24:19
sex
00:24:21
Elizabeth Warren she may be motivated by
00:24:24
the intention to preserve
00:24:26
the authority of the Fiat
00:24:28
but is it not also possible that a large
00:24:31
number of people lost a lot of money
00:24:33
that they worked hard for and they used
00:24:36
to buy crypto assets and then the value
00:24:38
of those assets went down and those
00:24:40
people lost a lot of value I had there
00:24:43
was a group of guys that are house
00:24:45
painters that painted my house
00:24:48
two summers ago and they painted the
00:24:50
whole house they were here every day for
00:24:51
hours every day so I got to speak to
00:24:53
these guys
00:24:54
and these these guys were House Painters
00:24:56
you know they they work for an hourly
00:24:58
wage they do fairly well but every lunch
00:25:01
break every break they got all that they
00:25:03
would talk about with one another was
00:25:05
what cryptocurrency they're buying and
00:25:07
trading in and out of with the whole
00:25:09
intention of making money they all
00:25:12
believed that they had a good point of
00:25:14
view because they read something on the
00:25:15
Internet or got some tweet or got some
00:25:17
text or saw something on Tick Tock about
00:25:19
this one crypto asset or this crypto
00:25:21
asset and they were trading in and out
00:25:23
and all of the money that these guys
00:25:25
worked hard for was being invested in
00:25:27
crypto assets you're right that set of
00:25:28
facts is not great however I don't think
00:25:30
that's a motivation I think the
00:25:31
motivation is to basically end crypto as
00:25:35
a potential competitor to Fiat money in
00:25:37
the United States that's the motivation
00:25:39
and they're going to use those fact
00:25:41
patterns to basically support that
00:25:43
because look fair enough because we
00:25:45
could handle that okay we could do the
00:25:47
accredited investor test there should be
00:25:49
a framework or a set of guidelines under
00:25:51
which it is legal for people to buy and
00:25:55
hold or trade crypto in the United
00:25:56
States all that Brian has been asking
00:25:59
for is give us a framework and genzer is
00:26:01
not giving a framework he's just trying
00:26:03
to basically put them out of business
00:26:04
okay look I think we've gone around this
00:26:06
topic this has been a great conversation
00:26:08
I'm going to move forward to the next
00:26:10
topic which I think is
00:26:13
really interesting in the vein of both
00:26:17
de-globalization but also you know the
00:26:19
scale at which Venture firms have gotten
00:26:22
to Sequoia decided this week and
00:26:24
announced publicly that they're
00:26:25
splitting off their China and India
00:26:28
slash southeast Asia funds
00:26:30
as you guys obviously know Sequoia
00:26:32
capital is a venture capital firm and
00:26:36
within that firm they manage multiple
00:26:38
funds some of the funds that they've
00:26:40
raised and managed have been
00:26:42
specifically targeted in China where
00:26:44
they have 56 billion dollars I don't
00:26:47
know if this number is accurate but
00:26:48
that's an incredible number 56 billion
00:26:50
dollars of assets under management Focus
00:26:52
just in Sequoia China and then they have
00:26:55
a sequoia India fund
00:26:57
which has about four billion dollars of
00:27:00
capital raised in just the last three
00:27:02
years and now they are separating the
00:27:04
management company and the oversight of
00:27:06
those funds into separate management
00:27:08
companies so Sequoia Capital will no
00:27:11
longer oversee those China funds a new
00:27:13
firm has been formed called Sequoia
00:27:15
China that is now owned and run by a
00:27:18
separate management team based in China
00:27:19
and Sequoia India is now called Peak 15
00:27:22
Partners which is owned and operated by
00:27:24
a separate team of managers out of India
00:27:27
roll off Botha will manage the U.S and
00:27:30
European Sequoia capital
00:27:32
Neil Chen will oversee Sequoia China
00:27:36
I'm sorry Neil Shen and shailendra is
00:27:39
saying we'll oversee Sequoia India I
00:27:42
guess this is a question of did Sequoia
00:27:44
get too big or are they caving to
00:27:46
pressure of the political issues arising
00:27:49
with having deep relationships and ties
00:27:51
with China or as they have said a lot of
00:27:54
competition between these different
00:27:55
portfolios and companies Within These
00:27:57
portfolios amongst each other chamoth
00:27:59
what's your read on the action is there
00:28:01
anything to read into this and anything
00:28:02
to extrapolate from it well it's been a
00:28:05
parade of missteps for Sequoia in the
00:28:07
last couple of years and
00:28:10
I'll let Sequoia figure out who to blame
00:28:12
for this but the reality is
00:28:14
they I think felt a lot of fomo posts
00:28:18
off bank they raised this large Mega
00:28:21
fund that kind of straddled all of the
00:28:23
sub funds and straddled all of the
00:28:25
regions and so
00:28:27
they dangled the carrot of trying to get
00:28:29
into the early stage U.S fund by
00:28:31
investing in this big Mega fund that
00:28:32
also had China and Indie exposure and
00:28:34
growth exposure
00:28:36
then they tried this like very
00:28:39
convoluted Evergreen
00:28:41
structure right before the market fell
00:28:44
apart where you could basically become a
00:28:47
permanent Capital vehicle and
00:28:49
as far as I can tell from the outside
00:28:51
looking in it just seems like a taxi tax
00:28:55
play for the GPS to not have to
00:28:58
sell and realize capital gains
00:29:01
but that only works when the stock
00:29:02
market keeps going up which it didn't
00:29:04
and then it's summarily
00:29:06
Crush tech stocks 80 or 90 so that was a
00:29:08
misstep and then when you put all these
00:29:11
things together
00:29:12
now that China is Contracting and we've
00:29:14
said this before I think China is
00:29:16
largely uninvestable for the next 30 or
00:29:18
40 years
00:29:20
it just makes sense to jettison
00:29:23
now I will say though that Neil Shen is
00:29:25
Elite if you consider in investing I
00:29:28
would say I have a simple rubric anybody
00:29:30
who's made more than a billion dollars
00:29:32
for themselves as an investor I consider
00:29:34
Elite Neil Shen is Elite
00:29:37
and so he'll do just fine
00:29:40
running that Sequoia China business I
00:29:44
was surprised about why they would allow
00:29:46
India to leave there's nobody that Elite
00:29:49
at Sequoia India by that rubric
00:29:52
but India is a country growing at six
00:29:54
percent a year it literally looks like
00:29:56
China in 2008 and 9. and so I'm not sure
00:30:01
why you would let them leave I think
00:30:03
that you would want to attach them to
00:30:05
yourself because it makes the US
00:30:07
business look better you probably gets
00:30:09
differentiated and smoothed out returns
00:30:13
but I think this is a little bit of
00:30:14
particular of competition that there was
00:30:17
competition between the the different
00:30:19
portfolio companies
00:30:21
and it was leading to conflict
00:30:23
I mean that's dumb that happens in the
00:30:26
United States Sequoia has always been
00:30:29
known to fund everybody that they think
00:30:30
will make money no matter how much they
00:30:32
compete
00:30:33
when they back YouTube and Moritz was
00:30:36
sitting on the board at Google and sure
00:30:38
look Sequoia Sequoia as an organization
00:30:40
is Elite they're there to make money for
00:30:42
their LPS period end of story and so all
00:30:45
of the other words that can go in any
00:30:46
press release basically I think try to
00:30:49
hide the fact that this is an
00:30:50
organization that's hats and missteps
00:30:52
they're not on Solid Ground they've lost
00:30:55
a lot of money and they're trying to
00:30:57
figure out what to do next
00:30:59
I however if I was running that
00:31:01
organization would have probably done
00:31:03
nothing
00:31:05
and just let the dust settle
00:31:07
and I think that all of these actions
00:31:10
are too close together and it's a little
00:31:12
bit to me of flailing in the water and
00:31:15
so I don't think it was a good idea
00:31:18
to let India leave I think it made a ton
00:31:21
of sense to cut China
00:31:24
but I think all of this stuff happened
00:31:25
started happening a few years ago
00:31:27
starting with that eight or nine billion
00:31:30
dollar Mega fund that they raised to try
00:31:31
to compete with suffix
00:31:33
Saxony read on this
00:31:35
yeah I mean I think it's a example
00:31:37
probably an example of decoupling and
00:31:39
globalization going on so I agree we
00:31:42
have to treat India and China separately
00:31:44
with respect to China I just think it's
00:31:46
become harder and harder for Americans
00:31:49
to do business in China both because we
00:31:53
don't really have the visibility into
00:31:55
that system and there's too much
00:31:58
political uncertainty so kind of touch
00:32:00
Ma's point about it being increasingly
00:32:02
uninvestable but I also think that
00:32:04
geopolitical concerns it's just very
00:32:06
hard to straddle those concerns now
00:32:08
because the geopolitical competition is
00:32:10
heating up so much I think it's
00:32:12
investable for people like Neil Shen who
00:32:15
are insiders in that system so I think
00:32:18
you know Elite Chinese investors can I'm
00:32:21
sure make money in China over the next
00:32:22
few decades but I think it's just too
00:32:24
hard for Americans to figure that out so
00:32:27
I think them parting ways makes a lot of
00:32:30
sense I think it's going to simplify
00:32:32
sequoia's life a lot
00:32:34
India I I agree with jamas that that's
00:32:36
sort of a different question because
00:32:37
India is going to be a huge growth
00:32:39
economy over the next few decades and
00:32:41
they are a U.S Ally so it doesn't pose
00:32:44
the same geopolitical risk
00:32:46
but my guess is that it was just kind of
00:32:49
unwieldy that it's too unwieldy to kind
00:32:54
of merge funding sources and firm
00:32:57
management across two firms that are
00:32:59
really pretty different right the U.S
00:33:01
aquarium firm and then this Indian firm
00:33:03
so my guess is they just decoupled
00:33:05
because it was just getting too hard to
00:33:06
manage and if you're an LP don't you
00:33:09
just want the ability to say okay I'm
00:33:10
going to allocate this much money to
00:33:12
India and I'm going to allocate this
00:33:13
much money to the US I think LPS
00:33:16
probably like it too Sequoia China is
00:33:19
frankly over the last
00:33:20
15 or 20 years as good and probably is
00:33:24
numerically better than Sequoia us
00:33:27
so that was an elite organization just
00:33:30
by itself Sequoia India I don't think
00:33:32
has much to talk about and so maybe what
00:33:35
Roloff decided is this team is just not
00:33:37
very good so we might as well just cut
00:33:38
it and we can revisit it later they
00:33:40
probably have some number of years of a
00:33:42
non-compete and then they could come
00:33:44
back into the market five years with a
00:33:45
totally new team and that may be easier
00:33:47
so it may be easier just to just
00:33:49
actually wanted to be separate look it's
00:33:52
hard to cross returns from two totally
00:33:55
different funds right
00:33:56
because one side one side's gonna be
00:33:58
unhappy with the trade right yeah I I
00:34:01
can give you the jaycal's got actual
00:34:03
information to share well no I mean I
00:34:05
have to know I think I have the closest
00:34:07
one invest in your company right Jacob
00:34:09
well I'm an LP in their funds they're
00:34:11
printing money for me they back my
00:34:13
second startup roll-offs on the board of
00:34:15
that company and still with me and I was
00:34:17
their first Scout
00:34:18
when they started the scouts program
00:34:19
which is the highest
00:34:21
percentage performing fund I think they
00:34:23
ever had
00:34:24
you're our resident Captain America so
00:34:27
as a patriot how do you feel about it
00:34:29
they are put that aside um sequoise 20
00:34:31
of the NASDAQ this is the greatest
00:34:32
Venture firm of all time hands down and
00:34:35
the Sequoia fund
00:34:36
which refers you mean companies they've
00:34:38
invested in companies
00:34:41
I guess and so the reason the Sequoia
00:34:43
fund came out this Evergreen fund was
00:34:46
because a lot of their LPS wanted
00:34:48
Sequoia to manage the public equities
00:34:51
going forward because they didn't want
00:34:53
to sell them because they realized
00:34:54
[ __ ] that the massive gains the the
00:34:58
gains from Google Apple Etc of these
00:35:03
Investments that they did when they were
00:35:05
private companies Cisco the gains from
00:35:07
public forward were greater than the
00:35:09
gains in private and I've been in on
00:35:11
these presentations I've sat through
00:35:12
them uh with the Sequoia team and so
00:35:16
when you manage those public ones we've
00:35:19
all talked about the denominator problem
00:35:21
here the denominator problem is hey are
00:35:23
they Venture returns or are they part of
00:35:24
the public Equity so at a giant
00:35:26
endowment they want to put them into the
00:35:27
equities bucket get them out of the
00:35:28
Venture bucket and Sequoia store an
00:35:30
opportunity there to manage this
00:35:32
Evergreen fund I'm sure there are tax
00:35:34
advantages to it of course but with
00:35:36
relation to what they did in China and
00:35:38
India these these were incredibly
00:35:42
prescient and
00:35:44
Innovative things they did in 2000 and
00:35:47
2005 when they started India and then
00:35:49
China was 2005 I believe they found
00:35:52
domestic teams you need domestic teams
00:35:54
to do this properly especially in places
00:35:56
with different governance and different
00:35:58
regulations and it gives them autonomy
00:36:01
they were incredible Investments
00:36:03
but what's happening right now is all
00:36:06
venture Investments because of AI and
00:36:08
chips and the decoupling with China are
00:36:10
now under massive scrutiny so they can
00:36:13
say there's brand confusion you can talk
00:36:15
about you know the collisions and who's
00:36:18
going to back this Chinese entrepreneur
00:36:20
and Indian entrepreneur who also is
00:36:21
operating in the US right these
00:36:23
businesses operate in the U.S and so
00:36:26
what really is happening
00:36:27
is the government is going to stop all
00:36:30
U.S Venture investing in China that's
00:36:32
what's going to happen in the coming
00:36:33
months and so they're just getting ahead
00:36:35
of that and now they will compete
00:36:38
it really has to do with chips and AI
00:36:41
you may have seen some of these stories
00:36:42
and nobody's going to invest your if an
00:36:44
American invests in AI in China that's
00:36:47
going to be bad and the same with chips
00:36:48
yeah you're right there are a bunch of
00:36:50
stories about whether U.S investors
00:36:52
should be investing in AI in China and
00:36:55
people are saying this was Un-American
00:36:57
because it was basically going to give
00:36:59
China an advantage against us in this
00:37:01
key industry and I think that point is a
00:37:04
good example of what I'm talking about
00:37:05
with the geopolitical concerns it's just
00:37:06
getting too complicated yes for
00:37:09
Americans to invest in China it raises
00:37:10
too many geopolitical concerns and I
00:37:12
think Sequoia is massively simplifying
00:37:14
its life by just splitting these things
00:37:17
up and being out did you see Keith
00:37:18
Roberts tweets on this yeah that's what
00:37:20
we're referring to yeah Keith from boy
00:37:22
tweeted basically like it's Un-American
00:37:24
to invest in China at this point yeah
00:37:26
we've talked about this before I mean
00:37:27
look the Chinese relationship primarily
00:37:30
used to be seen as an economic
00:37:32
relationship and people are looking for
00:37:33
a win-win basically trade scenarios and
00:37:36
it was not seen as a moral to invest
00:37:38
western China now the relationship is
00:37:40
primarily seen through a geopolitical
00:37:42
lens which is to say the balance of
00:37:44
power which is a zero-sum game it's
00:37:46
about you know how much better is the US
00:37:48
doing how much more powerful is it than
00:37:49
China and anybody who's perceived as
00:37:52
helping China in that rubric now is
00:37:54
looked on skeptically within what do you
00:37:56
think the United States about that
00:37:59
well like I said I don't think that's
00:38:01
going to change so I think Sukhoi is
00:38:02
doing the right thing to cut like I said
00:38:04
simplify its life what's your personal
00:38:05
opinion I'm curious
00:38:07
I think that
00:38:08
it should be possible to do business
00:38:10
with China without it being seen as
00:38:13
either unpatriotic or immoral however
00:38:15
there are strategic technologies that
00:38:19
are just going to be I think it's too
00:38:21
hard and too risky to
00:38:24
um to be supporting China in chips and
00:38:26
AI
00:38:26
yeah I mean look if somebody is using
00:38:29
Chinese manufacturing to make toys or
00:38:31
clothes
00:38:32
I don't think that's fun at least
00:38:34
strategic in a geopolitical way but
00:38:37
if you're helping them make
00:38:40
the next generation of chips that's
00:38:42
going to raise a lot of questions
00:38:44
so so a VC firm Freebird can't take out
00:38:47
chips and AI from their investment hold
00:38:49
on hold on I want to say something
00:38:50
because sure this reminds me of when
00:38:53
Benchmark actually had Benchmark Europe
00:38:54
and then they cut it do you guys
00:38:56
remember that right yeah I do yeah and
00:38:58
kind of retrenched they weren't
00:38:59
retrenching from a position of strength
00:39:01
they were retrenching to re-establish
00:39:03
themselves after a bunch of missteps so
00:39:05
I think typically these retrenchments
00:39:06
happen when there's a little bit of
00:39:08
internal chaos and mismanagement and
00:39:11
underperformance that's not the case
00:39:12
here I can assure you yeah but I
00:39:14
actually think retrenching is good
00:39:16
because it simplifies things
00:39:19
yeah I I totally agree with you my point
00:39:21
is when I saw that overlay fund I was
00:39:24
like this is questionable but then when
00:39:26
I saw that weird Evergreen fund that to
00:39:29
me just seemed like a tax ARB and I
00:39:32
thought to myself as a person who's
00:39:34
looked at this exact stuff for my own
00:39:36
stuff
00:39:37
what I did was I just converted it to a
00:39:39
family office and from a tax perspective
00:39:42
it was much simpler but that exact same
00:39:44
structure I looked at for myself and the
00:39:47
reason that that structure exists and
00:39:49
Jason I know you want to think it's
00:39:51
because these endowments want them to
00:39:52
manage public equities I still work with
00:39:54
a few endowments and pension systems
00:39:56
they don't and the reason they don't is
00:39:58
they're not allowed to they're not
00:39:59
allowed for concentration purposes they
00:40:01
pay other people to manage it they have
00:40:03
these outside consultants and for
00:40:05
fiduciary perspective you have to do all
00:40:07
of these things with respect to managing
00:40:09
risk and one of the most obvious things
00:40:10
that these foundations do is they get
00:40:12
distributions and they sell they don't
00:40:14
hold and so the reason why you'd want to
00:40:16
look at the long-term gains of a stock
00:40:19
that you distributed is because the GP
00:40:22
sold too early not the lp and I just
00:40:25
don't I think that you should not just
00:40:27
be a blithe surrogate on this topic and
00:40:29
actually really think about it well I
00:40:31
mean I don't think you need to well I'm
00:40:32
not I'm not and you know square if you
00:40:35
look at something like that you know
00:40:37
rule off still on the border Square I
00:40:38
believe so they Sequoia has realized
00:40:41
over time you know as it's been
00:40:42
explained to me as NLP that you know
00:40:45
these companies grow
00:40:46
the outliers continue to grow massively
00:40:49
when they become public and Sequoia is
00:40:51
now staying on the board of those
00:40:53
companies and so they actually have the
00:40:54
most insight into it because they backed
00:40:55
it when it was two people and then
00:40:57
they're still on the board money is not
00:40:59
infinite and if you're a foundation and
00:41:01
you're legally obligated to distribute
00:41:03
some percentage every year you need the
00:41:05
money back and the foundations do get to
00:41:07
choose some foundations want to go along
00:41:09
Harvard or whoever I'm just picking you
00:41:11
know one of the large ones if somebody's
00:41:13
got 30 40 billion dollars they may not
00:41:14
need to liquidate that and they might
00:41:16
very much
00:41:17
the only person that is in a position to
00:41:20
actually hold for the long term because
00:41:21
it's so tax advantageous is the GP
00:41:24
that is why that fund was created and I
00:41:26
will bet you
00:41:27
if you ask him under oath why they did
00:41:30
it I'll tell you it was for themselves
00:41:33
people have the choice I bet you a
00:41:36
million dollars for charity whatever you
00:41:37
want to do I bet you if you put them
00:41:39
under oath then you subpo them and you
00:41:40
ask him why he did it he'll say he did
00:41:42
it for himself and that's fine all I'm
00:41:44
saying is that's the kind of complexity
00:41:46
that sax is talking about that does not
00:41:48
add to success it is over complexifying
00:41:51
something that doesn't need to be
00:41:52
complicated
00:41:53
yeah I disagree with you but we can just
00:41:55
move on well we agree to disagree
00:41:56
sometimes here on the all-in podcast
00:41:58
we're going to move on for our last
00:42:00
topic of the day with the uh
00:42:02
announcements can we talk messy no no
00:42:04
we're not we're because we're going to
00:42:06
do one last topic which I think PGA and
00:42:07
Messi go together yeah so let's just
00:42:09
talk about PGA
00:42:11
guys I appreciate the messy interest but
00:42:14
we're going to talk about something less
00:42:15
messy or even more messy who cares
00:42:17
actually think it's pretty interesting
00:42:19
for a couple of reasons so as you guys
00:42:21
know the PGA Tour has been around since
00:42:23
1930 I think the PGA Tour makes 1.6
00:42:27
billion dollars a year if reports are
00:42:29
correct I make 1.6 billion a year boring
00:42:32
that's I mean depends on the year
00:42:34
all of the players on the PGA tour
00:42:37
are independent contractors so uh Saudi
00:42:40
Arabia's public investment fund and this
00:42:42
is what I think is one of the more
00:42:44
interesting aspects of this story
00:42:46
and maybe speaks to a broader kind of
00:42:49
set of geopolitical
00:42:52
transitions that are underway the Saudi
00:42:55
Arabian public invention uh public
00:42:57
investment fund started live golf as an
00:42:59
alternative to the PGA Tour live golf
00:43:01
live golf They invested uh two billion
00:43:04
dollars of capital and offered
00:43:08
guarantees to Golfers to come and get on
00:43:10
their tour they ended up offering at one
00:43:13
point Tiger Woods reportedly got a 800
00:43:15
million dollar guarantee
00:43:17
to join their tour which he turned down
00:43:20
Phil Mickelson got a reported 200
00:43:22
million guarantee which he took to join
00:43:24
the tour hidaki Matsuyama got offered
00:43:26
750k 750 million
00:43:29
so seven of the 10 top paid golfers in
00:43:32
the world actually signed up and
00:43:36
um it caused obviously significant
00:43:37
disruption to what has effectively been
00:43:39
a monopoly which is the PGA tour in golf
00:43:42
in professional golf
00:43:43
and uh here we are two years later and
00:43:47
it was announced this week that live and
00:43:50
PGA are merging and the current PGA Tour
00:43:52
conditioner Jay Moynihan will serve as
00:43:54
CEO of the new entity
00:43:56
just by way of reference J Moynihan
00:43:58
makes a reported 14 to 15 million
00:44:00
dollars a year in salary as CEO of the
00:44:03
PGA Tour he will now be CEO of this
00:44:05
combined organization one big question
00:44:08
mark is how much is he getting paid and
00:44:10
did that help secure and solidify this
00:44:12
deal getting done
00:44:14
but I think another big question is do
00:44:16
we think this will actually close will
00:44:17
this face Regulatory and antitrust
00:44:19
scrutiny will this face cypheus because
00:44:21
it is the Saudi Arabian public
00:44:23
investment fund that is effectively
00:44:24
taking a large stake in the PGA tour
00:44:27
let's go to our resident professional
00:44:30
sports team owner or former minority
00:44:32
owner tomoth
00:44:35
and he takes on on this announced merger
00:44:38
what does it say about the pga's ability
00:44:40
to hold action this is what's so crazy
00:44:42
about your topic selection
00:44:44
Messi was offered 1.6 billion dollars
00:44:47
personally by the Saudis and you don't
00:44:49
want to talk about that because you want
00:44:50
to talk about a whole organization
00:44:52
playing an Antiquated sport that itself
00:44:54
generates 1.6 billion dollars
00:45:01
what's your point I don't care about
00:45:04
golf I don't care the reason this is so
00:45:07
controversial is
00:45:09
that they're calling it Sports washing
00:45:11
trying to make the reputation of
00:45:13
Saturday more palatable in the west by
00:45:16
using Sports things people love the
00:45:18
reason this has become controversial is
00:45:20
because of the hypocrisy of it the PGA
00:45:22
fought against Liv
00:45:25
and
00:45:26
this guy Jay Moynihan who is the CEO of
00:45:29
this he basically evoked the 911
00:45:32
families and went on a whole thing about
00:45:35
how evil live was only to then secure
00:45:38
the bag and then there's some background
00:45:41
here about well there was a lawsuit
00:45:44
between the live golfers you know who
00:45:46
are now banned from playing the PGA when
00:45:48
they signed up and Anti-Trust stuff and
00:45:51
so the hypocrisy of the group is what's
00:45:54
being pulled into the question here this
00:45:57
is why it's important the players who
00:45:59
took the money were ostracized as
00:46:02
supporting an evil regime
00:46:05
yeah and now it's clear that they were
00:46:07
smart and tigers should have taken the
00:46:09
money
00:46:10
and actually the guy who said as much at
00:46:12
the time was was Trump you know he you
00:46:16
know yeah he nailed it it's like one of
00:46:18
these uh once again
00:46:20
once again no he said he's basically
00:46:23
said that take the money from Lyft
00:46:25
because eventually live in PGA are going
00:46:26
to merge and then the guys who stuck
00:46:27
with BJ are gonna get nothing and
00:46:29
they're gonna feel like idiots he was
00:46:31
totally right he's
00:46:34
you don't think that that's insane I
00:46:36
mean come on it's pretty amazing tell me
00:46:38
when you get to Messi and the fact that
00:46:40
these guys were proclaiming that if
00:46:42
you're gonna go join this tour you're
00:46:43
joining you know you're lining up I
00:46:45
don't understand whether I don't
00:46:47
understand whether you're naive or dumb
00:46:48
this is like about money it's always
00:46:50
about money professional sports all the
00:46:52
money's been about money what what are
00:46:54
we what are we talking about money money
00:46:56
money money money there's your answer
00:46:58
money drove the answer money
00:47:00
drove the deals now money drove the
00:47:02
merger I don't understand can we talk
00:47:04
about Messi please it's so much more
00:47:06
interesting okay go talk about message
00:47:08
I mean the messy thing is so incredible
00:47:11
because Cristiano Ronaldo went to a team
00:47:14
in Saudi to play in the August of his
00:47:17
career the last two or three years and
00:47:19
this has been a thing that started with
00:47:21
Pele in the 70s Pele came to the New
00:47:23
York Cosmos and played Beckham famously
00:47:26
did it as well came to the LA Galaxy
00:47:28
but Beckham did this one interesting
00:47:31
thing which is he said okay I'm gonna
00:47:33
come to playing the MLS
00:47:34
on one condition really which is I'll
00:47:37
take a huge pay cut and all this stuff
00:47:38
but I want an option to buy an expansion
00:47:40
team for 25 million bucks
00:47:43
fast forward he ended up buying
00:47:45
intermiami
00:47:46
that team is now worth 585 million
00:47:49
dollars
00:47:50
so Messi is 36 years old he's about to
00:47:53
enter the August of his career he's won
00:47:55
everything he's done everything possible
00:47:56
he is so incredible I mean I love him
00:47:59
I love him
00:48:01
he gets offered 400 million dollars a
00:48:04
year for four years to go play in Saudi
00:48:06
Arabia a 1.6 billion dollar deal and you
00:48:10
know there's no income tax here so
00:48:11
that's like 1.6 billion dollars right in
00:48:14
his pocket
00:48:15
except the deal that he did which was
00:48:18
for a lot less upfront
00:48:20
is really interesting
00:48:22
he basically said I'll come to the
00:48:25
United States and play in intermiami
00:48:27
for for the Miami Football Club
00:48:30
but I am you know basically I'm not sure
00:48:34
he said this so I'm using my own words
00:48:36
I'm the greatest player in the world
00:48:38
every time I do something magical on the
00:48:40
field I'm creating content that will
00:48:42
sell tickets and create brand awareness
00:48:44
and move the interest level of soccer in
00:48:47
the United States I'm a content creator
00:48:49
so I want a piece of this content
00:48:52
and so Apple
00:48:54
who signed a two and a half billion
00:48:56
dollar 10-year license for the MLS said
00:48:58
you're right you're probably going to
00:49:00
sell more subscriptions for me I'll give
00:49:01
you a piece of the ref share
00:49:03
and then Adidas said you know what
00:49:06
you're right you're probably gonna sell
00:49:07
more shoes for me I'll give you a piece
00:49:09
of those shoes
00:49:10
so in one Fell Swoop I think what's
00:49:13
amazing is Messi is not an athlete in
00:49:16
this deal I think going back to a theme
00:49:18
that we've talked about a lot is
00:49:20
he is this
00:49:22
ultimate penultimate whatever he's an
00:49:24
elite content creator he's the equity
00:49:27
who is now creating incredible who will
00:49:30
come to the United States to create this
00:49:32
incredible content that will move
00:49:33
viewership move merchandise
00:49:36
and he's going to monetize that so it's
00:49:39
effectively like becoming the Jordan
00:49:41
brand getting a piece of Netflix all in
00:49:43
one he has the equity in those
00:49:45
businesses basically yeah there's a
00:49:46
subtle Point shabbat's making in the
00:49:48
deal you have the person who's
00:49:51
responsible for distribution so this
00:49:52
would be the same as like the NBA on ABC
00:49:54
ESPN or TNT and TNT or ESPN saying you
00:49:58
know what you're so important LeBron
00:50:00
James to play in this or Steph Curry
00:50:01
we're going to give you a piece of the
00:50:04
subscriptions to ESPN so apple is giving
00:50:07
him rev share on their Apple TV league
00:50:10
pass for MLS that's nuts like and this
00:50:15
is I think it goes back to the live uh
00:50:17
deal with PGA which is people are
00:50:19
looking at these sports leagues and
00:50:20
saying let's get creative it goes back
00:50:22
into a different one the the NBA just
00:50:24
signed a new collective bargaining
00:50:26
agreement that they're going to ratify I
00:50:28
always thought that the real thing that
00:50:30
the NBA players association should be
00:50:32
asking for Equity was Equity yeah and
00:50:36
that equity could be Phantom equity in
00:50:38
the teams because it's clear that in the
00:50:40
absence of the players there's no
00:50:42
viewership and there's no appreciation
00:50:44
in the value of those franchises and so
00:50:47
the idea that LeBron you know Steph Dre
00:50:50
KD
00:50:52
don't own a huge piece of the underlying
00:50:55
Equity gains that they're creating in
00:50:57
the period in which their players is
00:50:59
pretty crazy now the ownership their
00:51:01
perspective is while we translate that
00:51:03
in terms of rapture but it's really not
00:51:06
true because if you look at the
00:51:08
kager the irr of the franchise values
00:51:11
versus the catering of the salaries
00:51:12
they're not equivalent
00:51:14
yeah so I just think it has huge
00:51:16
implications
00:51:18
to all the professional sports leagues
00:51:20
because these big stars should be asking
00:51:23
their agents and their managers how do I
00:51:24
do a deal like message I am the ultimate
00:51:27
content creator in my league the
00:51:28
Dynamics are changing it will it will no
00:51:31
longer be an employee Capital labor
00:51:33
situation but capital is merging with
00:51:36
labor and labor labor is basically
00:51:39
becoming the equity in the equation and
00:51:41
they are 100 of the business
00:51:43
and by the way the reason we see it
00:51:46
happening so much is because of the
00:51:47
social media age and it's really
00:51:48
incredible
00:51:51
I know you have more
00:51:53
I have more to say I just want to hire a
00:51:54
highlight I need to go I have to go to a
00:51:56
kindergarten graduation congratulations
00:51:59
congratulations I love you guys I'll see
00:52:01
you later adios congrats to your kid
00:52:03
thank God but what's really interesting
00:52:06
to your point about the CBA is they're
00:52:09
going to make these huge salaries
00:52:11
they're not going to give them the
00:52:12
equity as part of
00:52:14
their five-year deal they make the money
00:52:17
they then have the ability to invest in
00:52:19
a team so you could be LeBron and you
00:52:21
could be investing in the Knicks maybe
00:52:23
if somebody wanted to sell a percentage
00:52:25
of it you can invest in any NBA team any
00:52:28
sports betting team any sports betting I
00:52:31
actually think there's a simpler way to
00:52:32
do this which is it's it I think it's
00:52:33
fair to say that when you join a team
00:52:35
it's like joining a company yeah and you
00:52:37
can create Shadow equity and that shadow
00:52:40
Equity says you came in at this point
00:52:42
right you left at this point here was
00:52:45
the Delta of the value and I think a
00:52:47
good Agent should be negotiating on
00:52:49
behalf of a player most players will not
00:52:51
get that much a few basis points of that
00:52:53
value yeah but the idea that a LeBron
00:52:56
James can go to on Miami and double the
00:52:58
franchise value double yeah right from
00:53:01
you know one
00:53:04
okay great stuff comes in at 480 million
00:53:07
and is now 5.3 billion so that's a
00:53:09
10xing plus a value you know is Step
00:53:12
responsible for 10 or 15 should a
00:53:15
billion dollars of that go to Steph Dre
00:53:17
and Clay I think you can make a great
00:53:19
claim that it could yeah absolutely put
00:53:21
them on the map so yeah
00:53:22
it would be and it would be pretty easy
00:53:24
to do and what this might do is keep
00:53:26
people on the same team longer which is
00:53:28
what fans want exactly why people moving
00:53:30
around that's a great point and private
00:53:32
companies like Cargill or Coke
00:53:34
Industries they have these shadow Equity
00:53:37
programs that they've had for years for
00:53:39
decades that they've run on behalf of
00:53:40
their employees so we know how to run
00:53:45
Phantom Equity programs in private
00:53:47
businesses
00:53:48
and I just think the leadership of the
00:53:51
NBA Players Association the NFL players
00:53:53
Association
00:53:54
is right now still lacking the
00:53:56
sophistication
00:53:58
to understand this well enough to then
00:54:00
propose when the next time it is to to
00:54:03
negotiate this kind of deal but when you
00:54:05
see things like this messy deal
00:54:08
I think it's a game changer it is a game
00:54:10
changer and I think for sports
00:54:13
I don't know if you saw Adam Silver gave
00:54:16
you know a little press conference with
00:54:18
the finals and everything he was talking
00:54:19
about the Jay Moran situation with the
00:54:21
guns and just a lot of like topics
00:54:22
coming up but one of the topics that was
00:54:24
probably underappreciated was he was
00:54:26
talking about the bundle the cable
00:54:28
bundles going away and that people can't
00:54:31
watch like the TNT uh NBA on TNT
00:54:34
whatever that is with you know Charles
00:54:35
Barkley et cetera and he wants that to
00:54:39
be available for free so he's going to
00:54:40
challenge people in the new TV deal if
00:54:42
you want to have the NBA you have to
00:54:44
have it available to everybody because
00:54:45
the number of people who can see NBA
00:54:47
games has been going down I have a
00:54:49
question for you more people do you
00:54:52
think more people would pay for a
00:54:54
subscription to watch the Knicks games
00:54:56
wherever they happen to be all over the
00:54:58
world or a subscription to watch Steph
00:54:59
Curry no matter what team he plays on
00:55:01
the old Generations are loyal to the
00:55:03
teams the new generations loyalty
00:55:04
players so it's a generation numerical
00:55:06
numerical question which one's great
00:55:07
it's probably a jump ball right now but
00:55:10
it will eventually be they'll follow the
00:55:12
players
00:55:13
because this new generation follows
00:55:14
players like our kids like I don't know
00:55:16
LeBron I think you could probably sell a
00:55:20
few hundred thousand subscriptions to
00:55:21
the Knicks and I think you'd sell mid
00:55:23
Millions for Stuff
00:55:25
what's going to happen now is I think
00:55:27
they're going to they just want this to
00:55:29
be ad based and to directly subscribe so
00:55:32
I directly subscribe to the NBA I get
00:55:33
every game for 200 a year with no ads
00:55:35
you know what we should do I actually
00:55:37
have I have a great idea what we should
00:55:38
do is we should what Liv did to the PGA
00:55:41
we should do to the NBA let's get
00:55:42
together 20 billion dollars let's start
00:55:45
a competitive NBA league where we give
00:55:48
the players oh I'm serious a structured
00:55:50
Phantom Equity plan
00:55:52
pay these guys 100 million bucks a year
00:55:55
get all the big guys to come everybody
00:55:56
else will come
00:55:58
and just blow the whole thing wide open
00:55:59
by the way that's the blueprint now if
00:56:01
you want to really compete with the with
00:56:03
the NFL or the NBA or the NHL this is
00:56:05
what you should do put together 20 or 30
00:56:06
billion which is not that much money
00:56:09
and go for it you only need to get a
00:56:11
couple of stars to to blow it up and if
00:56:13
you give Stars the equity in the league
00:56:14
they'll convince all the other players
00:56:15
to come all right give let's give sack
00:56:17
some red meat here you sax will give you
00:56:18
a little red meat you want Tucker on
00:56:20
Twitter here's your redmi choices as we
00:56:22
wrap you want Tucker on Twitter
00:56:25
you want
00:56:26
a Russian controlled dam being destroyed
00:56:30
for a major flood or
00:56:32
do you want Chris Christie joining the
00:56:34
race which red meat would you like which
00:56:37
red meat we put in front of crazy hair
00:56:39
well I mean what's happening Ukraine is
00:56:41
really the big news this week
00:56:43
intensive has well the Ukrainian counter
00:56:45
offensive has started in earnest
00:56:48
and yes in conjunction with that you had
00:56:50
the destruction of that major Dam which
00:56:52
it's not clear who did it I mean both
00:56:55
sides are pointing the finger at each
00:56:56
other so and there are
00:56:58
reasonable Arguments for why either side
00:57:00
may have done it in terms of who
00:57:02
benefits it seems to benefit the
00:57:05
ukrainians more because the destruction
00:57:07
of the dam washed out a bunch of Russian
00:57:10
defensive fortifications and
00:57:13
Villages of Russian speakers on the
00:57:16
other hand
00:57:17
the Russians were in control of the dam
00:57:20
so it would have been easier for them to
00:57:22
carry it out if they had wanted to we
00:57:25
just don't know but I think you know
00:57:26
events have now moved beyond that and we
00:57:28
are now probably in the third or fourth
00:57:30
day of of the Ukrainian counter
00:57:31
offensive of course has not been
00:57:33
officially declared but there is major
00:57:35
major fighting happening now where
00:57:38
Ukrainian armored divisions are seeking
00:57:40
to
00:57:42
you know penetrate Russian defensive
00:57:44
lines around zaparizia and so the
00:57:47
long-awaited Ukrainian counter offensive
00:57:49
has certainly begun how does the
00:57:52
the dam relate to the Nordstrom pipeline
00:57:55
because these are both situations where
00:57:57
people are like who actually did it
00:57:58
what's their motivation and let's face
00:58:01
it these are chaotic actors at times and
00:58:05
figuring out who has the motivation to
00:58:07
do these things
00:58:09
seems like a leveling up kind of game
00:58:11
because you can't put it past either
00:58:13
party in some cases but in the case of
00:58:15
nortream
00:58:17
people saying hey it was the Ukraine but
00:58:19
then there's this argument that the
00:58:20
Ukraine is not capable of doing it or
00:58:22
maybe it was sanctioned by the us or the
00:58:23
west and then executed by Ukraine where
00:58:26
do you wind up with all these so on on
00:58:28
nordstream we're now on our third cover
00:58:29
Story the CIA sourcing their
00:58:32
stenographers at the Washington Post
00:58:34
have now claimed that it was six
00:58:36
Ukrainian dudes in a yacht who blew up
00:58:39
nordstream
00:58:40
no seriously and if you look at this
00:58:42
boat I'll put a photo of the boat on the
00:58:44
screen it's it's pretty silly yeah the
00:58:47
opinions do not have a navy and they
00:58:49
certainly don't have Navy Seals I don't
00:58:51
believe they have the capability to by
00:58:54
the way this destruction in Nordstrom
00:58:55
Nordstrom was this huge underwater steel
00:58:59
and concrete structure it's not that
00:59:02
deep though because it's only 150 or 200
00:59:05
feet deep at the lower points it's deep
00:59:07
enough and it took a lot of explosives
00:59:09
so they had to know what they were doing
00:59:10
so I I dove 120 feet once so it's but
00:59:13
the point is that when when Nordstrom
00:59:15
was first destroyed
00:59:17
the media rushed out to say well the
00:59:19
Russians did it even though the Russians
00:59:21
had no motive to do it it was their
00:59:22
pipeline is there a pipeline they could
00:59:24
just turn it off if they wanted to
00:59:26
but this is what we hear is that every
00:59:27
time something destructive happens it's
00:59:29
the Russians did it why would they
00:59:31
attack themselves because they're so
00:59:32
crazy we heard this with the Nord stream
00:59:34
when belgarad which is a Russian
00:59:37
District just across the border from
00:59:38
Ukraine was attacked
00:59:40
it was claimed that the Russians did it
00:59:42
these were Russian insurgents no that's
00:59:44
pretty silly it was ukrainians dressed
00:59:46
in Russian uniforms and just recently
00:59:48
when there were drone attacks on Moscow
00:59:50
we were also told that oh it wasn't the
00:59:52
ukrainians who did it was Russian
00:59:54
dissidents or something which again
00:59:55
makes no sense so this is not to say
00:59:57
that
00:59:59
the Russians didn't blow up that Dam
01:00:01
it's just to say that whenever the story
01:00:03
is rushed out that the Russians did
01:00:05
something highly destructive you have to
01:00:07
we need to see some evidence here and we
01:00:09
just don't know it's just hard to know
01:00:10
the fog of war is thick
01:00:13
all right what do you think of Tucker's
01:00:15
first
01:00:17
show incredible getting sued but he got
01:00:19
The Tweak got at least like 90 million
01:00:22
views which means the video probably got
01:00:23
10 of that or something
01:00:26
yesterday was at 17 million views or
01:00:28
something like that so I'm sure it's
01:00:29
more today so no he's getting a huge
01:00:31
distribution through Twitter arguably
01:00:34
it's more distribution it's almost
01:00:35
certainly more distribution than he got
01:00:37
through Fox Fox was 3 million right yes
01:00:39
that's how many viewers he gets on Fox
01:00:41
yeah well Fox is half of that now
01:00:42
because they've
01:00:44
David traded so much viewership after
01:00:46
Tucker left but look the only thing that
01:00:49
I think Tucker got through Fox was
01:00:51
access to frankly a viewership base
01:00:53
that's not very online there are a lot
01:00:55
of old people who watch Fox who just
01:00:57
aren't on social media that's it though
01:00:59
everybody else can see it on Twitter and
01:01:02
he's getting more Distribution on
01:01:03
Twitter
01:01:04
super distribution is the way to go
01:01:07
he's gonna get
01:01:08
25 million people and of course
01:01:10
monetizing it is the hard part because
01:01:12
Fox is subscription revenue and
01:01:15
everything else is there but apparently
01:01:16
he's creating a list
01:01:18
um you know he advertised the website
01:01:19
Tucker carlson.com at the end of his
01:01:22
video and you can go there and sign up
01:01:24
for you can subscribe direct and get it
01:01:27
on his website well I don't think he's
01:01:28
monetizing it yet but you can sign up
01:01:30
for alerts and so forth so he's clearly
01:01:32
creating a list of some kind oh that's
01:01:34
probably because he yeah with his
01:01:36
contract he's still getting paid and so
01:01:38
he's like yeah daily wire is the model I
01:01:40
mean they they've got well over 100
01:01:42
million in Revenue I understand and they
01:01:45
have a massive subscription business so
01:01:47
there's a clear path all right Hey
01:01:48
listen for the uh world's greatest
01:01:50
moderator
01:01:52
living in the Bay Area David Friedberg
01:01:54
and uh the dictator himself apatia and
01:01:58
the architect hosting any number of
01:02:01
fundraisers for any number of
01:02:02
politicians David sacks the rain man I
01:02:05
am the world's greatest moderator taking
01:02:07
a week off we'll see you next week oh
01:02:10
and uh enjoy some q a here from the live
01:02:12
angels Summit 100 people in Napa thanks
01:02:14
for coming besties I appreciate you uh
01:02:16
love you supporting the event love you
01:02:18
besties see you next time bye-bye
01:02:20
all right welcome to a baptism
01:02:25
John the Baptist are you ready to accept
01:02:28
Christ freeberg into your soul I
01:02:32
honestly have no idea what I'm doing
01:02:34
here I've I have no idea who these
01:02:37
people are or what this is or why you're
01:02:41
all wearing white
01:02:43
I mean seriously I'm sure you're very
01:02:45
nice people but I have no idea what this
01:02:47
is have you seen the Wicker man Jacob
01:02:50
was like we're taping an episode in Napa
01:02:52
and I'm like what on a you know off day
01:02:55
what what is this Monday today's Monday
01:02:56
it's Monday are you okay buddy yeah
01:02:59
you low blood sugar yeah actually I do
01:03:01
bring us like a cheese plate or
01:03:03
something
01:03:04
and guacamole and chips
01:03:07
police but honestly like I didn't sign
01:03:10
up for this I thought we
01:03:14
we disagreed to a podcast and somehow
01:03:16
we've been roped into doing some dog and
01:03:18
pony show for jayco's LPS
01:03:20
by the way is that true or what these
01:03:23
are a bunch of your LPS as well you just
01:03:25
have never met them
01:03:28
literally
01:03:30
okay I'll drink it yes yes sir
01:03:32
literally somebody's like Jake out I'm
01:03:34
with this incredible endowment we're
01:03:36
incredibly successful I'm like oh that's
01:03:37
great Yes you heard I'm raising a fun
01:03:38
they're like no no no no
01:03:40
um we heard uh sax is going to be here
01:03:42
I'm like yeah you want to meet him
01:03:43
invest in his phone oh no we've invested
01:03:44
in all these funds we just never met him
01:03:47
I said wow that's one way to do it
01:03:50
that's how successful sex is it's pretty
01:03:52
funny two things they've never seen tax
01:03:54
and a distribution
01:03:59
great [ __ ] decision whoever you are
01:04:02
you're a real [ __ ] genius back there
01:04:07
except for the fun we already paid back
01:04:10
oh my God I lost control of it in the
01:04:13
first 90 seconds
01:04:15
why should tonight be any different
01:04:17
except for the five-year-old fun that's
01:04:18
already fully returned okay
01:04:21
whoa easy so uh welcome to the angel
01:04:24
Summit uh these are my besties we do a
01:04:26
podcast called all in we thought we'd do
01:04:28
it live this is the fourth time we've
01:04:31
ever appeared on stage together the
01:04:34
first two times we're at freeburg's LP
01:04:37
conference in the Presidio yeah
01:04:39
I resented that one too
01:04:44
[Music]
01:04:45
yes I came out in his mask he took his
01:04:49
gloves off it was very uncomfortable for
01:04:50
him but he eased into a seat and then of
01:04:53
course we did the all in Summit uh last
01:04:55
year in Miami and this is the fourth
01:04:57
time so it's great to be out here we
01:04:59
have a couple of news items on the
01:05:01
docket we could start with or we can go
01:05:02
right to q a with these many audience
01:05:05
members who have a lot of questions what
01:05:07
would your gentlemen like to do
01:05:09
so math has a few words he'd like to say
01:05:11
go ahead whatever you guys want to do
01:05:13
chamoth is drunk by the way he texted us
01:05:16
you
01:05:17
got grin on his face that's the chamoth
01:05:20
grin he gives when he decided like x
01:05:23
capital scheming that he would not have
01:05:26
LPS and he would just invest his own
01:05:27
money he does not care
01:05:30
so it's the gloves are off let's do q a
01:05:33
j Levy's sax what's the path for
01:05:35
DeSantis to win the nomination
01:05:37
um and get the base of trump oh red meat
01:05:40
oh goodness
01:05:41
here we go I think the path basically is
01:05:44
he has to win Iowa and or New Hampshire
01:05:46
it's just that simple
01:05:48
but keep in mind that Trump did not win
01:05:51
Iowa last or in 2016 Ted Cruz did Iowa
01:05:55
tends to be more religious
01:05:57
um I think DeSantis is trying to
01:06:00
outflank Trump on the right actually on
01:06:03
certain issues and
01:06:05
um so he's on the ground there
01:06:07
campaigning from what I understand he's
01:06:09
generating a lot of interest and
01:06:10
enthusiasm
01:06:11
and he's going to keep plugging away at
01:06:13
it I think he's going to out hustle
01:06:14
Trump I'm not saying he's going to win
01:06:16
but I think he's going to work harder
01:06:18
and the path would be that over the next
01:06:21
what is it like nine months that Trump's
01:06:24
style and message which is admittedly
01:06:27
much more entertaining than DeSantis but
01:06:29
kind of fatiguing whether that kind of
01:06:31
gets old and DeSantis more like
01:06:35
discipline messaging people just kind of
01:06:37
wake up and say you know what like I
01:06:39
don't really want to go back to the
01:06:40
chaos of of the whole Trump show this
01:06:43
seems like
01:06:44
better to me so
01:06:47
um that's basically what I think has to
01:06:48
happen is Trump fatigue has to set in
01:06:50
and people realize that there's a
01:06:52
different was that CNN Town Hall a sign
01:06:55
that
01:06:56
some group of people find him incredibly
01:06:58
entertaining and the media themselves
01:07:00
want him back because it's great for
01:07:02
Ratings Allah Menken on session or
01:07:06
is it a sign that like my God that's so
01:07:09
[ __ ] exhausting like you're saying
01:07:10
sex what do you think I think that the
01:07:13
the base like the town hall because it
01:07:16
was Trump walking into the lion's den
01:07:17
and standing up to the mainstream media
01:07:20
which is what they like but I don't
01:07:22
think it did anything to help them in
01:07:23
the general because I think that viewers
01:07:26
who don't like Trump or aren't
01:07:28
entertained by Trump I mean there's
01:07:29
nothing there to really grab onto I
01:07:32
don't think so
01:07:34
um but but look I think your point about
01:07:35
who does the media want to get the
01:07:37
Republican nomination definitely Trump
01:07:39
because he's good for Ratings I mean it
01:07:42
really is that simple and they think
01:07:43
they can beat him so right now the Biden
01:07:46
people the Trump people and the media
01:07:48
all want Trump over DeSantis and that is
01:07:52
why like DeSantis is getting dispatched
01:07:54
by everybody right now is because
01:07:58
you know everyone's kind of aligned on
01:08:00
this but the minute that Trump gets the
01:08:02
nomination it's all going to turn the
01:08:04
media all of a sudden is going to turn
01:08:05
on Trump and then we're going to see
01:08:06
what the real campaign is going to be
01:08:08
DeSantis is in show business as they
01:08:10
said on secession was that the quote he
01:08:11
show business he's box office he's not
01:08:14
Bach yeah DeSantis isn't box office he's
01:08:16
a he's somebody who actually can execute
01:08:18
right right but also that's that's why
01:08:20
he would be a good move for Republicans
01:08:22
I think is because he doesn't give the
01:08:23
Democrats as much to work with yeah all
01:08:26
right that Trump's entertaining but he
01:08:27
gives his enemies so much to work with
01:08:29
all right another question from the back
01:08:31
go ahead stand up tell us your name yeah
01:08:33
uh Sal daher from Boston and uh the
01:08:39
question is
01:08:40
much less exciting uh regarding sort of
01:08:43
in the problem of of bank bank runs and
01:08:47
Bank insurance by the fed and bailing
01:08:50
out uh you know average people bailing
01:08:52
out wealthy people
01:08:55
I've heard a lot of solutions about this
01:08:57
I've been so careers in banking for a
01:09:00
while
01:09:01
um the idea of having Senior Management
01:09:03
and the board have direct liability if
01:09:07
the feds have to step in to rescue the
01:09:09
bank do you think that that could be a
01:09:11
step in the right direction in
01:09:14
preventing Banks from taking risks they
01:09:16
really shouldn't have taken I mean the
01:09:18
2008 disaster the subprime crisis could
01:09:20
have been addressed with this I think
01:09:22
this crisis with SVP could have been
01:09:24
addressed with management just having a
01:09:26
lot more to lose okay so let me just
01:09:28
First Take issue with the terminology of
01:09:31
bailout I know that's what everyone
01:09:32
calls it a bailout in my mind is when
01:09:35
the shareholders the bondholders of the
01:09:37
bank get bailed out by taxpayers that
01:09:39
happened in 2008 it did not happen here
01:09:41
here the question was whether depositors
01:09:44
get made whole or not
01:09:46
I personally don't consider that a
01:09:48
bailout I understand there are people
01:09:49
who do but it is a slightly different
01:09:51
issue as to the bank management you know
01:09:54
uh you're talking about like a strict
01:09:56
liability standard here that
01:10:00
I mean basically you're talking about
01:10:01
piercing the corporate veil and making
01:10:03
the bank Executives and their directors
01:10:07
liable for mismanagement of the bank and
01:10:10
that is that's a pretty high bar that's
01:10:12
a really high bar and the problem with
01:10:13
it is that I I would never serve on the
01:10:16
board of a bank I mean I probably
01:10:17
wouldn't anyway but if you told me that
01:10:19
I could be liable piercing the Bell yes
01:10:23
right we have a thing called the
01:10:25
business judgment rule you know in
01:10:27
Delaware where if directors and officers
01:10:31
of the company perform their job in a
01:10:35
good faith way making the best decisions
01:10:37
they can and it goes wrong they're not
01:10:40
typically liable for that maybe the
01:10:41
corporation's liable if they're not
01:10:43
personally liable I'd like it's if you
01:10:45
did that
01:10:47
the managers wouldn't invest the cash in
01:10:49
anything
01:10:50
because they wouldn't want to take any
01:10:51
risk of loss and in order to operate the
01:10:54
business which has a bunch of people
01:10:55
working there and a bunch of banks that
01:10:56
they got to operate they're going to
01:10:57
charge you a fee to hold your money for
01:10:58
you and so what happens is interest
01:11:00
rates turn negative and you basically
01:11:02
have to pay someone to hold your money
01:11:03
for you and that's what's a little bit
01:11:05
messed up about the way the banking
01:11:06
system works today is you're effectively
01:11:08
giving a money manager the right to
01:11:10
invest your money for you they take your
01:11:12
money they pay you a low interest rate
01:11:13
and they go invested in high interest
01:11:14
rate stuff by taking on risk with your
01:11:16
capital and ultimately they can take
01:11:18
losses on that and if you wanted to make
01:11:20
them liable for those losses they're not
01:11:22
going to take that risk and the bank is
01:11:24
going to have to change its business
01:11:25
model from being an Arbitrage business
01:11:27
to being a service fee business and
01:11:29
they're gonna have to figure out other
01:11:30
ways to charge you service fees
01:11:31
including charging you to hold your
01:11:33
money in order to make money and that's
01:11:35
what a lot of the banks are now doing
01:11:36
first for public and others have now
01:11:38
proclaimed that they're going to start
01:11:39
charging a lot more service fees to hold
01:11:41
your money and they're going to start
01:11:42
taking a lot less risk so we're already
01:11:43
headed in that direction but that's
01:11:46
fundamentally what I think would let's
01:11:47
take another question from the audience
01:11:49
good evening I'm Lisa song Sutton Las
01:11:52
Vegas Nevada I'm GP in the veteran fund
01:11:54
as investors you all invest in
01:11:57
entrepreneurs theoretically you support
01:11:59
American entrepreneurship what role if
01:12:01
any do you think VCS should have in
01:12:05
shaping advocating supporting
01:12:07
conservative economic policy in the
01:12:09
country
01:12:10
Shama
01:12:11
zero
01:12:14
I think that we have to know the role
01:12:17
that you're doing if you're a venture
01:12:19
investor
01:12:20
which is you're buying a deep out of the
01:12:22
money option
01:12:24
and I think that you want to motivate
01:12:26
the people that you are partnering with
01:12:29
to take really thoughtful but outsized
01:12:31
risked
01:12:32
and so I don't think there's a lot of
01:12:35
room for conservativism I do think that
01:12:38
there's room for misallocation of
01:12:40
capital
01:12:42
and I think that there's people that can
01:12:43
help guide that but the reality is that
01:12:45
when you start a company
01:12:47
it's 95 percent likely to fail and the
01:12:51
Venture investor is signing up for a 70
01:12:54
or 80 percent
01:12:56
probability that they lose capital
01:12:58
maybe a 10 or 15 or 20 percent chance
01:13:00
that they get their money back and then
01:13:02
these small five percent chance that it
01:13:05
becomes reasonable
01:13:06
so
01:13:07
in that lens I don't think that's where
01:13:11
conservative economic policies really
01:13:14
should play a role
01:13:16
I think you just kind of got to go for
01:13:18
it and if it's gonna win it's going to
01:13:20
win big and if it doesn't you lose one
01:13:23
extra money I think like where you want
01:13:25
conservative economic and rational
01:13:27
thinking is when you go to the extreme
01:13:30
other end which is just like the
01:13:32
large-scale decisions that affect the
01:13:35
economic vibrancy of the country in
01:13:37
which you live and there on the margins
01:13:39
you probably want to be more rational
01:13:40
than unrational irrational but as a
01:13:43
venture investor I think you want to be
01:13:44
irrational
01:13:45
but I also think you have to be very
01:13:46
judgmental
01:13:48
and the reality is that most companies
01:13:49
aren't going to work and most people
01:13:53
this may seem controversial most people
01:13:57
actually when push comes to shove are a
01:14:00
little afraid of the decisions they need
01:14:02
to make to be truly successful
01:14:05
they're not willing to fire the people
01:14:06
that they need to fire they're not
01:14:08
willing to be extreme in the product
01:14:09
they want to build they're not willing
01:14:10
to price it they're not willing to go to
01:14:12
market in an extreme way and it tends to
01:14:15
be that these companies fail because of
01:14:16
that a lack of Courage a lack of
01:14:18
conviction it's a lack of courage or
01:14:20
conviction because that that's a very
01:14:21
heightened word I just think that when
01:14:23
push comes to shove most people implode
01:14:25
with the pressure of making a very very
01:14:27
hard decision
01:14:29
interesting all right in my experience
01:14:31
it could be yours could be no I mean I I
01:14:33
agree with you largely when a startup
01:14:36
does fail
01:14:37
if the experienced people around it are
01:14:39
watching and can't get through to the
01:14:40
founder or the founding team it's
01:14:43
typically they are blocking their own
01:14:45
success they're unwilling to fire their
01:14:47
co-founder their CTO as the example
01:14:49
you're alluding to perhaps or raise the
01:14:51
price of the software and lose some
01:14:52
customers or to drive people to work
01:14:54
harder because you've got a competitor
01:14:56
in the space and that's why you see
01:14:58
extreme people win in our Pursuit and I
01:15:02
think there's been just a great fallacy
01:15:03
that's gone on that you can have live
01:15:05
work balance or life work balance and
01:15:07
you could have this Nirvana where you
01:15:10
have it all the fact is the great
01:15:11
companies are made by people who make
01:15:13
great sacrifices period full stop and if
01:15:15
you're not willing to make the great
01:15:16
sacrifice you're not going to have great
01:15:17
outcomes hi uh David Samuel earlier
01:15:20
today Jason you had kind of a doomsday
01:15:22
or Ai panelist and my question is you
01:15:25
guys have been thrust into the public
01:15:26
spotlight
01:15:28
and we look at Deep fakes in the next
01:15:30
year or two as you talk about you know
01:15:32
tweeting on Friday versus Wednesday
01:15:34
how do you think about somebody having
01:15:37
each of you saying things that you did
01:15:39
not say and like how might we know
01:15:42
whether chamoth said that or it was a
01:15:45
deep fake saying it I already have that
01:15:47
problem
01:15:49
Insider last week where somebody was
01:15:52
saying I had a phone call I never had so
01:15:54
how do we solve this especially for you
01:15:56
as public as public two things two
01:15:58
things one I don't think people can say
01:16:00
more outlandish and damaging things in
01:16:03
AI than we say ourselves
01:16:05
on this podcast at times but uh number
01:16:08
two you know as we've discussed many
01:16:10
times on this podcast we have rebooted
01:16:13
our trust uh in institutions what we
01:16:17
read what we see and I think people are
01:16:19
now assuming they're being manipulated
01:16:22
assuming something might be fake news or
01:16:25
doctored and I think it's like people
01:16:27
are building up a much higher resiliency
01:16:29
to [ __ ] lies manipulation
01:16:32
and if I were to ask a hundred people
01:16:34
what is the bias of CNN New York Times
01:16:37
Fox MSNBC NPR
01:16:40
90 out of 100 Americans could describe
01:16:43
it almost exactly people are not dumb
01:16:46
this is another fallacy I think we have
01:16:48
in this country is that people are dumb
01:16:49
and they're going to get suckered people
01:16:51
are kind of figuring it out and and
01:16:53
we've seen deep fakes for what five
01:16:55
years ten years now and they're like
01:16:56
yeah you know Luke Skywalker didn't look
01:16:58
really good in the Mandalorian but
01:17:00
there's a kid who redid it and now dolly
01:17:02
two is doing it I think we're kind of
01:17:04
inoculating ourselves to what do you
01:17:05
think Freebird
01:17:08
deep fakes and Truth when the Gutenberg
01:17:10
Press was invented a bunch of fake [ __ ]
01:17:13
was
01:17:14
printed and people believed it
01:17:16
I don't think the current iteration with
01:17:20
deep fakes is very different from any
01:17:23
form of mass media being used
01:17:29
Crusades yeah no I mean but look I mean
01:17:33
you're 100 right I don't want to speak
01:17:35
about religion negatively in that way it
01:17:37
is one of many institutions of power
01:17:39
that leveraged mass media historically
01:17:43
uh to get people to believe things to do
01:17:46
things and to ultimately be able to tax
01:17:48
people and get them to provide capital
01:17:50
and Labor uh in the interest of those
01:17:52
who are in power and the the system of
01:17:55
deep faking is one of a long string of
01:18:00
using the current toolkit
01:18:02
um to take mass media and and follow
01:18:04
that same track so it will be dealt with
01:18:07
in the same way that things have been
01:18:08
dealt with that have been fake news in
01:18:11
the past which is that there will be an
01:18:13
opposing voice and there will be counter
01:18:15
arguments and there will be debate and
01:18:17
it will be rancorous and it will be
01:18:19
noisy and it will be hard to discern and
01:18:21
Alternatives will emerge and tools that
01:18:22
identify deep fakes will emerge and it
01:18:24
will be the same ongoing battle and
01:18:26
seeking of the truth that Humanity has
01:18:29
tried to do
01:18:31
um since the dawn of mass media you know
01:18:33
yesterday's conspiracy theories are like
01:18:36
tomorrow's Pulitzer prizes I always say
01:18:38
like if you look at Sinead O'Connor
01:18:39
ripping up the Pope's picture on
01:18:41
Saturday Night Live right in protest and
01:18:43
saying like the this is the true enemy
01:18:45
they're molesting children and then the
01:18:48
Boston Globe and the movie Spotlight is
01:18:50
about them decades later uh winning a
01:18:53
Pulitzer for uncovering what anybody
01:18:56
who's in the room who's Catholic in the
01:18:57
70s and 80s knew or had heard was going
01:19:00
on and so you know maybe the time frame
01:19:03
is shortening between when we're being
01:19:05
lied to and when we figure it out I
01:19:06
actually think it's interesting and good
01:19:08
because it forces us to find ways to
01:19:10
find the truth more effectively and
01:19:13
um you know it kind of without the
01:19:15
antagonism I think it's you know it's
01:19:18
it's absent what is the truth you don't
01:19:20
you don't force that debate you don't
01:19:21
force that question and this will
01:19:24
start to reveal ways that we can kind of
01:19:26
find things that are actual evidentiary
01:19:28
things versus things that someone told
01:19:31
me with either historically anecdote or
01:19:33
innuendo or I'm a person in power or I'm
01:19:35
an authority or I'm an expert and
01:19:37
nowadays it's like I'm a piece of media
01:19:38
you should believe me or here I'm an
01:19:41
image of a person and that's not going
01:19:42
to be the case anymore I am Jeff a
01:19:44
full-time corporate VC and part-time
01:19:46
Angel
01:19:47
um my questions about Ai and higher
01:19:49
education and it's actually some covert
01:19:52
parenting advice so you can decide who's
01:19:54
that's relevant for
01:19:55
um my son just finished his freshman
01:19:57
year of college and I'm questioning what
01:20:00
the future is for him in higher
01:20:02
education given all the change that AI
01:20:04
is going to
01:20:05
have on on every career and every
01:20:08
profession and I'm wondering what advice
01:20:10
you'd give to to your child or or
01:20:13
someone who's in college right now for
01:20:15
what what's an area of study that won't
01:20:18
maybe won't be disrupted by by AI or or
01:20:21
an area that's
01:20:23
um AI you'll get leverage from your
01:20:25
education
01:20:26
um through AI I think the reality is
01:20:28
that most of the existing jobs that we
01:20:31
have in the United States
01:20:34
are going to go to lower cost locations
01:20:38
that have that tool chain to accelerate
01:20:41
their capability
01:20:45
so we're gonna have to reinvent the
01:20:48
workforce
01:20:49
and the things that we do
01:20:52
over the next 30 or 40 years to stay
01:20:54
relevant
01:20:55
that's probably like I think that should
01:20:57
just be the operating principle
01:21:00
if you think about it we used to run
01:21:01
great call centers okay those call
01:21:04
centers were outsourced to the
01:21:05
Philippines in India but in the next you
01:21:08
know five or ten years you'll have this
01:21:10
flawless unaccented English or even more
01:21:13
yearly perfectly accented English for
01:21:17
the zip code of the person that's
01:21:18
calling in so that it sounds like
01:21:20
they're talking to somebody that's
01:21:21
literally their neighbor
01:21:22
that's like just makes so much sense
01:21:24
right so it's like all this stuff is
01:21:26
gonna happen where like all these
01:21:27
classes of jobs are going to go away I
01:21:29
saw this article where a lawyer two
01:21:31
lawyers use chat GPT to submit a legal
01:21:35
brief
01:21:36
the problem was that it cited cases that
01:21:38
didn't exist and now they're going to be
01:21:40
disbarred
01:21:41
so this is like serious business right
01:21:43
like you can't do that like that's like
01:21:45
real legal
01:21:48
malfeasance so what are your kids
01:21:49
practice
01:21:51
in college
01:21:53
you know if I had to choose something
01:21:55
for my kids I would probably
01:21:58
I would probably tell them to do
01:22:00
something mathematical or biological
01:22:03
the reason I would Point them to math is
01:22:05
that I think that it's irrefutable
01:22:07
there's this Great Clip between Ricky
01:22:10
Gervais and Stephen Colbert you guys
01:22:12
should go and Google this but it's a
01:22:14
clip where he's on The Colbert Show and
01:22:16
Colbert is a deeply devout Catholic and
01:22:20
he's offended by the fact that Ricky
01:22:21
Gervais doesn't believe in God
01:22:23
and he asked him why don't you believe
01:22:24
in God and Ricky gervaises look if we
01:22:27
wiped out all the books in the world
01:22:29
in a thousand years everything that's
01:22:31
scientific and mathematical would be
01:22:33
re-established
01:22:34
but everything that is religious or
01:22:36
theoretically not you know mythical if
01:22:39
you want to say
01:22:40
would look very very different
01:22:43
and that's why I don't believe in God
01:22:45
I'm not trying to question that but it's
01:22:47
a way of answering this question which
01:22:49
is I would try to point my children to
01:22:51
the body of knowledge
01:22:53
that's largely irrefutable which is
01:22:56
biological and mathematical versus
01:22:58
belief oriented because I think these
01:22:59
tools will change one's beliefs I've
01:23:01
been thinking about this a lot too I
01:23:02
think teaching them to be
01:23:04
entrepreneurial resilient worldly
01:23:06
ability to communicate ability to lead
01:23:09
other people
01:23:10
in teams that stuff's not going to go
01:23:12
away communication skill et cetera and
01:23:16
I'm encouraging everybody who I work
01:23:18
with to just use chat gbt4 and Bard
01:23:21
every day for every single thing that
01:23:23
they do my base thesis right now is that
01:23:28
the job
01:23:30
freezes the hiring freezes that all
01:23:32
these companies is indefinite I'm
01:23:34
assuming it's indefinite because the
01:23:36
amount of work it takes to write a job
01:23:37
requisition is more work in some cases
01:23:41
than actually automating with AI or
01:23:44
ready the job function and so I think 20
01:23:47
person companies might you know double
01:23:50
in size in the next two or three years
01:23:51
but still have 20 people
01:23:54
this is going to be a big challenge for
01:23:55
the for society uh and if it if that
01:23:58
does come to pass there's just going to
01:24:00
be large swaths of people who are not
01:24:02
going to be able to get job interviews
01:24:03
for anything other than service jobs and
01:24:06
you know we need a lot more plumbers
01:24:08
electricians waiters
01:24:10
et cetera those probably jobs won't go
01:24:11
away if especially if we don't let
01:24:12
people immigrate so
01:24:15
enthusiastic about that efficient but I
01:24:17
think it also means you have to be
01:24:19
entrepreneurial because if you can't get
01:24:21
a job and you can't get mentored you
01:24:22
better create your own opportunity you
01:24:24
better create your own company and
01:24:26
that's what I'm seeing that's the game
01:24:27
on the field right now two or three
01:24:28
people who don't have job offers from
01:24:30
Uber and Airbnb and Google and Facebook
01:24:32
just saying [ __ ] it let's start a
01:24:33
company because there's nothing else for
01:24:35
us to do and those are highly skilled
01:24:38
people right now doing that I'll say two
01:24:39
quick things about this topic so one is
01:24:42
I think there's a lot of AI fear porn
01:24:44
out there right now and I just think
01:24:46
that like all these Doomer scenarios are
01:24:50
they're not going to play out overnight
01:24:51
I mean this is going to take a while
01:24:54
second
01:24:56
if you think about like job elimination
01:24:59
it's going to be some super specialized
01:25:02
job so for example
01:25:03
I wouldn't want to be a radiologist
01:25:05
right now but doctors will be fine
01:25:08
so I think if you're thinking about like
01:25:11
going into a job category that's super
01:25:14
specialized and clearly in the way of AI
01:25:17
then that probably is not a good idea
01:25:20
but most General skills like you're
01:25:24
talking about and most job categories
01:25:26
are going to be fine there's just going
01:25:28
to be some Specialties within them that
01:25:31
make it dislocated like I wouldn't want
01:25:33
to be a truck driver either you know
01:25:35
because of self-driving but
01:25:37
transportation companies are still going
01:25:39
to exist so I think you just want to be
01:25:42
careful about super specialization I
01:25:44
think but building General skills is
01:25:46
always really good that really should be
01:25:47
the point of college where would you put
01:25:49
lawyers and accountants on that I'm
01:25:51
curious they're sufficiently General
01:25:53
that I don't think they're going to be
01:25:54
eliminated but will they be able to do
01:25:56
five times the amount of work therefore
01:25:58
we won't need as many
01:25:59
they may be able to get more done yeah I
01:26:01
would expect them to be able to get more
01:26:02
done yeah but I don't think necessarily
01:26:04
think that means we'll need less of them
01:26:07
I mean the old story about lawyers is
01:26:09
that there was one lawyer in a town had
01:26:12
no business second lawyer came to town
01:26:13
and they were both more busy than they
01:26:15
knew what to do with
01:26:19
lawyers get 30 more productive they file
01:26:22
30 more lawsuits and you know we're good
01:26:24
yeah all right let's take another
01:26:26
question these are great questions so
01:26:27
far hey guys Rick Spencer um I hope
01:26:29
chamoth gets to choose the wine this
01:26:30
evening for dinner I did not get to
01:26:32
choose your wine so I apologize in
01:26:33
advance
01:26:36
of 2018 uh Brazil
01:26:41
I love the bestie okay question so
01:26:43
you've talked recently in in episodes
01:26:45
about the speed of AI the adoption and
01:26:48
how the winners are still unknown that
01:26:50
was reinforced in the sessions today a
01:26:51
room full of investors how are you
01:26:53
thinking differently about your
01:26:54
investment you know your Strategic
01:26:56
investment decisions and your strategy
01:26:58
are there opportunities to look at
01:27:00
Venture investing differently like
01:27:01
Venture Studios you know in the future
01:27:04
of AI I had this conversation earlier
01:27:06
today I think I started a company in
01:27:07
2006.
01:27:09
where we took large data sets
01:27:13
and we built predictive models from
01:27:15
those data sets and we use those
01:27:16
predictive models to make analytical
01:27:18
tools available to a specific vertical
01:27:20
in our case agriculture farmers and the
01:27:23
models were both
01:27:24
deterministic meaning there was kind of
01:27:26
definitions algorithmic definitions of
01:27:29
physical parameters and there was like
01:27:30
all the statistical inference that you
01:27:32
get from large data sets
01:27:34
and it made recommendations for farmers
01:27:38
what a lot of people are calling AI
01:27:40
today is fundamentally a predictive
01:27:43
model on text on language
01:27:46
I am making a language predictor that
01:27:49
gives you a sentence and it seems so
01:27:51
profound because it is how we all
01:27:53
interact with computers and interact
01:27:55
with one another
01:27:56
and as a result it is kind of viewed as
01:27:59
the sea change across all of these
01:28:01
industries instantaneously it's this
01:28:03
whole new era but the fact is that
01:28:05
generally speaking the digitization of
01:28:08
things and the amount of data that's
01:28:10
being generated on Earth is going up by
01:28:11
some order of magnitude every number of
01:28:14
months and our ability to make
01:28:16
predictions and build predictive models
01:28:18
that are useful to specific vertical
01:28:19
segments is improving every sequential
01:28:22
cycle
01:28:23
that this is happening across every
01:28:25
vertical
01:28:26
and it is continued and it hasn't
01:28:28
changed and it's not any different so
01:28:30
there's in this area of genomics and
01:28:32
bioinformatics there is an absolute sea
01:28:35
change happening in human health in
01:28:36
synthetic biology and our ability to
01:28:38
understand and predict the biological
01:28:40
world and make changes and create new
01:28:42
drugs create new systems for producing
01:28:45
molecules for producing things that
01:28:46
humans consume and it is all buoyed by
01:28:49
Machine learning applied to large data
01:28:52
sets and genomics and other metadata
01:28:53
associated with human health and biology
01:28:55
and we're seeing the same thing in other
01:28:58
areas whether it's chemistry Material
01:29:00
Science
01:29:01
industrial application consumer markets
01:29:04
and so on the era of what people are now
01:29:07
calling AI is an interface layer of
01:29:09
language that's really creating
01:29:10
transformational opportunities on how
01:29:12
these tools how these systems how these
01:29:14
models can be utilized and provided to
01:29:16
all these different verticals and allows
01:29:18
us to rethink business models to rethink
01:29:20
interaction models
01:29:22
and to really change the economics of
01:29:24
different businesses and and the utility
01:29:26
and the productivity of humans because
01:29:27
it is about speech it is about
01:29:29
communication it's about what we
01:29:30
fundamentally do as a species so I would
01:29:34
argue that the general
01:29:36
trajectory of machine learning the
01:29:38
general trajectory of data generation
01:29:40
our ability to make predictions generate
01:29:42
value across all these different markets
01:29:44
is continuing in the way that it has
01:29:46
been continuing for the last 20 years
01:29:48
and it is profound in its own right and
01:29:51
I wouldn't say that there's a massive
01:29:52
sea change in that Evolution because of
01:29:55
large language models large language
01:29:58
models create another set of
01:29:59
opportunities so I would kind of create
01:30:01
a distinction and make sure that the
01:30:02
categorization of the investment
01:30:04
opportunities in large language models
01:30:06
be assessed on its own and everyone's
01:30:07
all over the place as you guys probably
01:30:09
heard today foundational models are
01:30:10
getting disrupted every other week
01:30:12
they're being decreased in size
01:30:14
parameters are being reduced they're
01:30:15
being commoditized you can run these
01:30:17
things on M2 chips everything is up in
01:30:19
the air right now and it's friggin nuts
01:30:21
you're going to invest in a company at a
01:30:22
500 million valuation and six weeks
01:30:24
later it's going to be worth zero
01:30:25
because someone open source the exact
01:30:27
same thing that you can now do for 100k
01:30:29
so that's very difficult and very
01:30:31
different than but there are still like
01:30:33
these incredible points of inflection
01:30:35
happening across all these other other
01:30:36
Industries with respect to machine
01:30:38
learning
01:30:39
and that's where I spend my time
01:30:40
chamathie want to add what you're
01:30:42
looking at I think this is going to be
01:30:43
the big question yeah six or seven years
01:30:45
ago
01:30:47
there was this Google earnings release
01:30:49
where they talked about building their
01:30:50
own silicon I've told this story before
01:30:52
but I pinged those guys and I was
01:30:55
basically like I just want to meet the
01:30:56
team that built the TPU
01:30:58
long story short a year later I put them
01:31:00
in business and you know we've been
01:31:03
building silicon for this moment for
01:31:05
years
01:31:06
it's been really really hard
01:31:09
and the reason it's been really really
01:31:11
hard is that Nvidia is just really
01:31:13
really good
01:31:15
Cuda is very very complete
01:31:19
and it's just very difficult to justify
01:31:21
why one would build
01:31:24
once you have something that you think
01:31:26
is profound through you know Implement
01:31:29
multiple sdks to like multiple points of
01:31:31
silicon just doesn't make any sense
01:31:33
that being said I still think you need
01:31:36
to be at the absolute bottom of the
01:31:37
stack and the absolute top of the stack
01:31:39
I think I'm a little too biased for
01:31:41
saying the former
01:31:43
which is I'm hoping that there's vendor
01:31:46
diversity in Silicon diversity
01:31:48
because I think it's going to be really
01:31:50
important I don't think we want to have
01:31:51
a world where Nvidia runs away with it
01:31:53
so I think there's investment
01:31:54
opportunity there just because I think
01:31:56
everybody should want that to happen
01:31:58
and then at the absolute top
01:32:01
friedberg's right that
01:32:03
all these foundational models I think
01:32:06
are changing so rapidly that the thing
01:32:08
that you want to figure out is like what
01:32:09
are you seating it with to drive
01:32:11
learning that's unique and that's a data
01:32:13
problem so there's an example that I've
01:32:15
given this was a an example given to me
01:32:19
by nikesh Aurora so it's not I'm not
01:32:21
going to take credit for it he's a CEO
01:32:22
Palo Alto networks but he was telling me
01:32:25
you know when you look at travel
01:32:29
the travel space all the public travel
01:32:30
companies are like 300 billion dollars
01:32:33
of public market cap Expedia Travelocity
01:32:35
all these companies
01:32:37
but they're pure middlemen
01:32:40
and they sit on top of a data feed that
01:32:43
comes from a handful of companies one of
01:32:45
them is saber
01:32:46
and so I went and I looked at saber
01:32:49
saber is like a 1.3 billion dollar
01:32:51
company a small little company
01:32:53
but they are the ones that go into all
01:32:56
the airlines extract all this
01:32:58
gobbledygook data normalize it and allow
01:33:01
Expedia Travelocity booking.com to exist
01:33:05
in a world of machine learning where an
01:33:07
AI where theoretically you can have
01:33:09
conversational languages in inside of
01:33:11
WhatsApp or messenger or Instagram you
01:33:13
see this beautiful picture you're like
01:33:15
book me a ticket to that place
01:33:18
well saber is actually the key
01:33:22
value Creator there and all these
01:33:25
Expedia examples that are plugins of gbt
01:33:27
make no sense they make no economic
01:33:29
sense those companies should go to zero
01:33:32
so I've used that as a way of forcing
01:33:35
function for me to try to prove that
01:33:37
there's really these two barbells it's a
01:33:39
barbell bookends one is a silicon and
01:33:42
one of these sort of like data providers
01:33:43
that's probably an investable thing
01:33:46
that's defensible everything in the
01:33:48
middle I think what what feedbrook said
01:33:50
is true which is today it looks like
01:33:52
it's worth a couple billion dollars
01:33:53
tomorrow's words nothing
01:33:54
and so I think you have to be very
01:33:56
careful if you listen to there's an
01:33:58
interview that Stephen Wolfram did with
01:34:00
Lex Friedman if you guys listen to it a
01:34:02
few weeks ago I had them on my pod the
01:34:04
couple weeks people haven't heard
01:34:05
they're free from yeah he's incredible
01:34:06
yeah he's incredible if you listen to
01:34:08
that interview I think Wolfram does a
01:34:09
great job of describing the difference
01:34:11
between inferential models or
01:34:12
statistical models and computational
01:34:15
models
01:34:16
statistical models are where you take
01:34:18
large data sets and you build
01:34:20
statistical models that infer and
01:34:24
predict things in the future or predict
01:34:26
things that you ask it to predict from
01:34:28
the data set that it's trained on and
01:34:30
then it creates a statistical
01:34:31
representation it has a probability of
01:34:32
being right or wrong and every
01:34:33
prediction it makes and it creates a
01:34:35
distribution of outputs from the model
01:34:37
and you can train a model from nothing
01:34:39
today
01:34:41
using a bunch of tools that are open
01:34:43
source and generally available and a
01:34:45
bunch of great silicon and all this
01:34:46
amazing stuff that's that's that's now
01:34:47
out in the world
01:34:48
but there's a bunch of things that you
01:34:50
can't generate data and you can't
01:34:52
necessarily train models on and that
01:34:54
requires computational models models
01:34:57
where you actually have to build some
01:35:00
system that creates a deterministic
01:35:02
outcome and deterministic means that it
01:35:04
doesn't have a distribution of things
01:35:05
that could happen it has one thing and
01:35:08
it calculates it like two plus four is
01:35:10
six there isn't a probability
01:35:11
distribution on it being six two plus
01:35:13
four is computable it is calculable it
01:35:16
is six
01:35:18
the great unlock that I think is ahead
01:35:22
of us still generally speaking with
01:35:24
respect to large language models is the
01:35:26
connection back to computational models
01:35:28
is the connection back to structured
01:35:30
data where you can make requests and
01:35:32
integrate structured data into the
01:35:34
output combined with inferential output
01:35:36
and computational models where you can
01:35:39
take the inference you can take the
01:35:41
request and figure out what
01:35:43
computational models can I now run in
01:35:45
addition to making a prediction about an
01:35:47
output and that's where so much of the
01:35:50
value is going to lie and it's going to
01:35:51
require incredible software engineering
01:35:53
Talent applied math statistics all the
01:35:57
stuff that's made data science generally
01:35:58
speaking so successful over the last two
01:36:01
decades is going to continue and it's
01:36:03
going to be this integration between
01:36:04
computation
01:36:06
an inference and it's going to be
01:36:08
applied in lots of different markets and
01:36:09
it's going to be really powerful and
01:36:11
we're all going to have our minds blown
01:36:13
just in terms of like the seed stage or
01:36:15
super early pre-seed stage two or three
01:36:17
people who are obsessed with this
01:36:19
technology who are playing with it every
01:36:21
day who are keeping up to speed on it
01:36:23
and who understands some customer base
01:36:26
whether it's delighting themselves or
01:36:28
delighting some other customer base I'm
01:36:29
willing to take that small bet on that
01:36:31
100K to 250k bet
01:36:33
because in the previous Paradigm shifts
01:36:36
or platform shifts cloud computing apps
01:36:39
and before that desktop Computing and
01:36:41
the web
01:36:43
you saw people start tinkering with
01:36:45
stuff and whatever their first two ideas
01:36:47
were are long forgotten because they
01:36:49
figured something else out and I kind of
01:36:51
feel like that's the stage we're in
01:36:53
there were a lot of people who were
01:36:54
playing with iPhones in the App Store
01:36:56
and you know they made a calculator or a
01:36:58
flashlight that got built into the
01:37:00
operating system as
01:37:02
um I think Freeburg is specifically
01:37:03
pointing out like you could just be part
01:37:05
of the model in your whole business is
01:37:06
wiped out we have one company that's
01:37:08
trying to make itineraries for travel
01:37:10
and I looked at what they're building
01:37:12
and then uh you know they're figuring
01:37:15
out prompts they're figuring out the
01:37:16
interface they're figuring out what
01:37:17
people want and I did the same searches
01:37:19
on chat GP before and I was like it's
01:37:21
not that much better what you're doing
01:37:24
but it's better and your ideas are
01:37:26
better and so I think that they'll win
01:37:27
the race and they only have to please
01:37:29
you know whatever number of users
01:37:31
and this company could wind up being
01:37:33
like I said before a 20-person company
01:37:35
that does 50 million in revenue and I
01:37:37
think that's going to be a very
01:37:38
interesting future and it reminds me of
01:37:40
the app economy there were a small
01:37:42
number of Acts things like distro kid or
01:37:45
Instagram where small teams built things
01:37:48
that printed money and had incredibly
01:37:50
High margins so I think that's part of
01:37:52
the opportunity here I do agree with
01:37:54
jamaat's Point data is the new oil
01:37:56
whatever data set you have that you have
01:37:58
That's Unique is incredibly powerful in
01:38:01
terms of defensibility and could help
01:38:03
you to outpace one of the generic models
01:38:07
this dude's been waiting okay dude who's
01:38:09
been waiting all right lightning round
01:38:11
thanks David for the mic my name is
01:38:13
rahid masri with transform VC in San
01:38:15
Francisco my question is for you shamath
01:38:18
um the last finally Jesus Christ
01:38:21
what the [ __ ] these guys
01:38:25
so and the last one or two episodes I
01:38:27
can't recall you um
01:38:29
you brought up this whole idea as how do
01:38:31
we get non-us born American Patriots run
01:38:34
for president
01:38:36
so uh as the growth hacking Drunken
01:38:40
Master uh what do you recommend how do
01:38:43
we Propel this idea how do we how did
01:38:45
the cup Steam and not have to wait 25
01:38:47
years or whatever you know it can't
01:38:49
happen in the next few years I think I
01:38:52
do think there's a small probability
01:38:53
could happen in 25 to 30 years but
01:38:57
like the problem is that
01:39:00
the people that only jaycal can be
01:39:03
president on the stage by the way yeah
01:39:05
the three of us that's how [ __ ] up
01:39:06
this is but I'll put you guys in my
01:39:08
cabinet positions I think the how is
01:39:11
that you have
01:39:13
enough Bottoms Up citizen journalism
01:39:17
and opinion formation
01:39:19
that people can independently decide
01:39:22
that on the margin this is a good idea
01:39:25
like look I I'm not interested in
01:39:27
running for government but if David were
01:39:29
in charge of something very important
01:39:31
treasury or state I would have immense
01:39:34
confidence if Friedberg were in charge
01:39:36
of something I would have immense
01:39:37
confidence so the idea that guys like
01:39:41
this
01:39:41
foreign
01:39:44
the idea that guys like this and oh
01:39:46
because I'm born here so you don't have
01:39:48
to say that yeah yeah don't worry you'll
01:39:49
get the Department of Sanitation no so
01:39:53
for sure General
01:39:57
I do think it's a little it's a little
01:39:59
crazy that guys like these two get
01:40:02
disqualified just because they emigrated
01:40:05
when they were like four and six
01:40:07
that's insane
01:40:10
so I I think that if we're in the
01:40:12
business of actually deciding that you
01:40:13
want the best people for this country on
01:40:16
the court so that we keep winning
01:40:18
championships
01:40:20
you don't tell Jonas oh you know you
01:40:22
were born in Greece so ciao you don't
01:40:24
get to play that's crazy
01:40:27
put them on the court and let them win
01:40:30
so I do think it takes 25 or 30 years
01:40:32
though of us saying this because it has
01:40:35
to be a Groundswell of people that say I
01:40:37
just want to win because I'm seeing all
01:40:38
these other countries starting to win
01:40:40
more and I don't think I want that for
01:40:42
my children I think I did I do think it
01:40:43
takes a generation I don't think it
01:40:44
happens today all right guys in a couple
01:40:47
of hours it will be
01:40:50
the Sultan of science's birthday and
01:40:52
Alan keedings and Alan Keating and yeah
01:40:55
that's right
01:40:56
so I thought it would only be fitting
01:41:00
if a hundred all in super fans took a
01:41:04
moment I'm gonna sing in Italian and son
01:41:07
happy birthday to Dave freeberg three
01:41:12
two one happy birthday
01:41:20
to you
01:41:23
happy birthday
01:41:31
to you and many more
01:41:35
all right Sultan of science
01:41:38
I know your wish was to be a top 10
01:41:40
podcaster it's come true finally I'm
01:41:43
quick I gotta go into podcasting yes
01:41:46
[Music]
01:41:49
amazing thank you thank you Ashley
01:41:51
we'll let your winners ride
01:41:54
Rain Man
01:41:56
[Music]
01:41:59
we open source it to the fans and
01:42:02
they've just gone crazy
01:42:04
the queen of Kim
01:42:06
[Music]
01:42:08
besties
01:42:11
[Music]
01:42:26
it's like this like sexual tension that
01:42:28
they just need to release
01:42:30
[Music]
01:42:41
[Music]
