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I got it for or

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so we all know, five letters in the

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dictionary. So good for

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branding. Good job, Jacob. Thank you, my friend.

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Yeah. And now we have all in.com/tequila.

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Oh, I love it. Exactly. Exactly. And you

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can yum yum. I

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got you sax dot com. Didn't know you have the domain name. So yeah,

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yeah. Wow. We have all the way back to Episode

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One. This is incredible. Oh,

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the new website. Yeah, this is great. Oh,

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can I tell you website

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all in.com all in dot com. That's our

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website. It's like this thing is real. Yeah.

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It's like a real thing. After four years,

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we got our together. This looks great. Here

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we go. And I want to give

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a shout out to podcast AI, one of our remember

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those fake all in episodes that became a startup

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podcast AI and they built our website for us.

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So shout out to the team over there. All

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right, ladies, let's move on. And I am of

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course, your executive producer

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for life and the moderate

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the all in buckets. And if I may just

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a tiny plug. If you're a founder.

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We are having our ninth cohort of Founder

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University. It's a 12 week course I teach

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Queen of Kinwam. I'm going all in. Speaking

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of that, your people used me in

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an ad, Reidberg. So don't talk about

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plugs. A few

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weeks ago when I shouted out that Glue AI was hiring

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engineers, we had like 100 applications just

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from that. From Glue AI looking for

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engineers? From one plug on the show, yeah. For

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Glue AI? Yeah. Right. That's

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awesome for Glue AI. And if you haven't tried SuperGut, Freiburg's

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team literally made an

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advertisement with me talking about SuperGut

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and didn't tell me. And we're still

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hiring, so. Okay, well there you

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have it. So go to founder.university to apply for

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my 12-week program. And check out Grok. I'm

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running a GoFundMe. A GoFundMe?

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Yeah, go to gofundme.com/Freiburg. Really?

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For what? More Xanax to

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deal with your panic attacks?

3:17

All right, let's get started,

3:19

everybody. Enough of the shenanigans.

3:21

Hurricane season is upon us,

3:23

as Freiburg had predicted. Hurricane

3:25

Milton made landfall on Wednesday

3:27

evening along the west coast

3:29

of Florida, as many of you know. It's

3:32

been downgraded. It started as a Category 5,

3:35

potentially, then a Category 3, and then it looks like it's a

3:37

Category 1 now, so I guess these things are

3:39

quite random. Leading

3:42

up to Milton, though, 6 million

3:44

Floridians across 15 counties were

3:46

ordered to evacuate. That's a lot of people moving

3:48

out. And it was

3:51

a pretty powerful storm. It ripped off the

3:53

roof of the Tropicana Field in Tampa. So

3:56

far, the death toll is at 4, but it's

3:58

expected to rise 7. Sadly, just

4:01

two weeks ago, Hurricane Helene swept

4:03

through six southern states, killing over

4:05

220 people tragically, devastating

4:08

western North Carolina, and

4:11

entire towns were wiped out. These

4:14

are also beyond the tragic human

4:16

losses are economically

4:19

staggering in terms of the

4:21

losses. Accuweather estimating the total economic

4:23

damage could be between $145 and $160 billion from

4:27

Helene, and Moody estimates the property damage alone

4:29

could be as high as $26 billion. Tons

4:33

to get into here, FEMA, Starlink, saving

4:36

the day, tons of stuff. But FreeBarr, back

4:38

on Episode 182, you predicted this would happen.

4:41

What's causing all this? And let's just start with the science

4:43

angle, I guess, before we get into the other political

4:46

and insurance issues.

4:49

Well, I think if you'll remember when we talked about

4:51

this a couple months ago, the sea

4:54

surface temperature was at kind of a record high

4:56

in the Atlantic. And

4:59

warm ocean temperatures drive

5:02

moist air up that evaporates.

5:05

The warmer the air, the faster

5:07

the evaporation and that starts to cause the

5:09

movement of the air, which drives ultimately the

5:12

hurricane and then the hurricane sucks up more

5:14

warm moist air from the ocean and it creates

5:16

a feedback loop. So the more energy you have

5:18

in the ocean, the more

5:21

likely you are to accelerate wind forces

5:23

in storms. And that's why

5:25

you get these massive hurricanes that suddenly

5:27

form seemingly overnight and go like in

5:30

the case of Helene, that hurricane

5:32

went from a cap two to

5:34

a cap four or a cap five and like

5:36

48 hours because

5:38

of the energy that's stored up and 90%. Here's

5:40

an interesting stat. 90% of the energy that

5:43

we get from the sun is absorbed

5:45

and stored in our oceans. The other kind of

5:47

fact that's playing into this, if you pull up

5:49

that science, that nature article and this is something

5:51

that I think you guys may remember we talked

5:53

about. So this was an article that came out

5:56

a paper, a science paper that came out a couple of months

5:58

ago. the scientists

6:02

identified that removing sulfur dioxide

6:05

from cargo ships that travel across

6:07

the oceans is actually

6:09

causing accelerated warming in

6:12

the oceans. And the

6:14

reason is that the sulfur dioxide

6:16

forms cloud formations as they

6:18

travel across the oceans. And those cloud

6:20

formations reflect sunlight. And in the absence

6:23

of those cloud formations, that sunlight makes

6:25

its way into the ocean and you

6:27

get more ocean warming. And

6:30

by their estimation, removing

6:32

sulfur dioxide, which causes acid rain,

6:34

and that's the reason it's been

6:36

pushed to be removed, and they

6:38

started removing it in 2020 2021.

6:41

From cargo vessels by removing sulfur dioxide,

6:44

we are now going to see a doubling of

6:47

the rate of warming of the oceans in the

6:50

2020s and going forward. Let me ask

6:52

for a second just to make sure

6:54

people understand what you're saying emissions from

6:56

cargo ships block sunlight, which then of

6:58

course reduces the heat absorbed by the

7:00

oceans. And so we're

7:02

now choosing between pollution of

7:05

the air or overheating of

7:07

the oceans. Am I correct in summarizing that? That's

7:11

roughly it. And what

7:14

is the pollution again? Sorry, I just saw. Yeah, that

7:16

goes into the fuel

7:19

of cargo vessels. And

7:22

a couple of years ago, they started to implement

7:24

these mandates that sulfur dioxide no longer be used

7:26

in the fuel. As a

7:28

result, when sulfur dioxide is emitted from these

7:30

vessels, it goes into the atmosphere. And it

7:33

actually triggers cloud formation. So now you have

7:35

these clouds that are forming and Nick's gonna

7:37

pull up this image right now. Yeah, here

7:39

you can see that. So all of these

7:42

cracks are these cargo

7:44

vessels moving across the ocean. And as they

7:46

move across the ocean, they create cloud cover,

7:48

that cloud cover actually reduces the

7:50

warming in the ocean because it reflects

7:52

sunlight. So now that sunlight energy gets

7:54

absorbed into the ocean. So this

7:57

is another driving force that some

7:59

people are now speculating. maybe accelerating

8:01

the warming of the oceans that

8:03

we're seeing, which drives this extreme

8:05

storm and hurricane events. And

8:07

so this becomes a more frequent event. Now, a lot of

8:09

people... So sorry, can I ask you a question? Does that

8:11

mean that we're mean reverting? Meaning, if

8:14

we improve the quality of

8:16

the fuel source that are used in shipping,

8:19

doesn't that then mean that

8:22

we're reverting back to what would have happened

8:24

in the absence of these dirty fuel sources?

8:27

Yeah. So in addition... No, no, no. I'm

8:30

asking you the question. Is that true or not? So

8:35

yes, we are no longer reflecting as

8:37

much sunlight. And so for several decades...

8:39

We had bad fuel sources. We

8:41

had artificial cooling. We had an

8:44

artificial cooling. And now we take... But that's

8:46

counter to the narrative of what we all

8:48

think is happening. Oh,

8:50

well, the argument is that we've actually been warming

8:52

the atmosphere, which we have been. And

8:55

we have a phenomena that shows that everywhere all over the

8:57

Earth, not just about sunlight coming in on the oceans and

8:59

not just ocean warming, but the

9:01

atmosphere is warming. The planet is

9:03

warming. And so this is... By

9:06

blocking the sunlight above the oceans,

9:08

we were artificially dampening that effect.

9:11

And we were reducing the amount of heat energy

9:13

that was getting into the oceans. So now by

9:15

taking that away, we're seeing the heat energy in

9:18

the oceans accelerate. And now the oceans

9:20

are getting much, much warmer. Right. Much faster. So

9:23

the pollution was good? It was going to be paradox here. Yeah.

9:26

It was that it was creating a blocker for sunlight.

9:29

And to your point, Chamath, exactly. Like, shouldn't we just

9:31

be going back to what was normal? But at the

9:33

same time, in the same

9:35

system, we had heated things up. So this

9:38

is a multi-factored system that we're dealing

9:40

with, Friedberg. And I guess the takeaway

9:42

from all of this is that we

9:45

got to be really careful with what we do

9:47

with the environment, right? Well, I mean, let's talk

9:49

about economics, right? So

9:51

how much real estate do you guys think is on

9:53

the Florida coastline? What's the real

9:56

estate value? Sorry, Friedberg, can you just anchor this?

9:58

Was it that it was supposed to be a

10:00

category? category five and now it's a category three

10:02

when it hit land. Right. So what

10:04

happens typically when storms hit land is they

10:06

no longer have that hot ocean pumping energy

10:08

back into the storm that keeps the feedback

10:10

loop going. So the storm cycle starts to

10:12

break down all hurricanes when they hit land,

10:15

they start to break apart. And so the

10:17

category which measures the wind speed actually

10:20

reduces. This is just a natural thing that

10:22

happens. But this was a category five hurricane

10:25

when it made landfall, I believe it was

10:27

category four. So, you

10:30

know, it was a massive hurricane. So we should

10:32

not we should not dismiss it because my understanding

10:34

was Helen was cat four

10:37

when it like hit

10:39

North Carolina. But I

10:41

read yesterday that happened. Yeah, what happened with Helen

10:43

was it was built for his cat three when

10:45

it hit Tampa or something. Is that not? Yeah,

10:48

yeah. So that's right. But what happened when Helene

10:50

hit North Carolina was not a cat for what

10:53

happened is, as that storm moved

10:56

inland, it hit the

10:58

mountains and the first mountains that hit

11:00

are on Western North Carolina, that area

11:02

is elevated, there's mountains there. So

11:04

when a heavy hot storm runs into cold

11:06

mountains, all the moisture dumps out, it's like

11:09

it runs into it. And suddenly everything precipitates

11:11

out of that storm. And that's why

11:13

some parts of Western North Carolina got like 18, some high,

11:15

some people measured as

11:17

high as 30 inches of rainfall in a

11:19

couple of hours. So this insane

11:21

dumping happens when that hot air hits cold,

11:23

it hits a cold region. And suddenly everything

11:26

all that warm moisture precipitates out and dumps

11:28

to the ground. So it ran into a

11:30

mountain is effectively why everything fell out of

11:33

North Carolina. Right. So you're saying that it

11:35

wasn't Democrats who basically, right?

11:37

I believe that who

11:40

did it, sex, sex,

11:43

Nancy Pelosi cast a spell or something.

11:45

And yeah, well, isn't there a lot

11:47

of geoengineering conspiracy theories going on in

11:49

your cohort? I mean, what's your, but

11:52

Vinod wants us to be very

11:54

clear that we need to, we

11:57

need to stop all this disinformation that somehow

11:59

Democrats are behind. behind that storm. So

12:01

we can assure everyone that there was just precipitation. There's

12:04

a lot of theory online that there's a ton of

12:06

LASEO engineering being run by government agencies to

12:08

drive these storms. Yeah, I don't think people

12:10

are taking that seriously. Well, I mean, the

12:13

origin of this though, Freebird, is

12:15

people have done experiments for decades

12:18

on trying to control the weather

12:20

or alter the weather. And

12:22

they're doing that in the Middle East by seeding

12:24

clouds and creating more rain. We saw

12:26

that with the Dubai floods. They said that that

12:29

might've been caused by overseeding of clouds, which

12:31

they're doing there. And then there have been experiments

12:34

just to, for the crazy

12:36

laser people conspiracy there are sun

12:38

X. There actually have

12:41

been experiments with lasers, being

12:43

shot into hurricanes and storms, correct?

12:47

Are you Alex Jones? Is that what we're doing?

12:50

Well, no, we're not saying that. I'm not saying

12:52

that's the origin of where people are kind of

12:54

building on this. There have been the amount. Okay,

12:56

so let's just talk about the hurricane I'm

12:59

teeing it out for you to debunk, is

13:01

what I'm doing here. Putting particulates in clouds

13:03

to accelerate precipitation is, I

13:05

mean, we've done that for a hundred years. You

13:08

can increase the precipitation rate when there's

13:10

already clouds that have formed, but that

13:12

has nothing to do with creating 200

13:15

mile an hour wind speed. That requires

13:17

an extraordinary amount of energy. All of

13:20

this energy, the oceans are like giant

13:22

batteries. And when a hurricane

13:24

gets going, that battery is accelerating the

13:26

hurricane and the hurricane sucks up more power

13:28

from the battery. And it creates this incredibly

13:31

dynamical system. There is no human created energy

13:33

system that can force form a hurricane. A

13:35

hurricane is an extraordinarily powerful natural phenomenon that

13:38

arises from the amount of energy that can

13:40

come out of very, very, very hot oceans,

13:42

relatively speaking. So, you know, that's really where

13:44

these hurricanes are coming from. Now they're going

13:47

to be more frequent if the ocean temperatures

13:49

remain elevated as they seem to be, and

13:52

continue to be elevated. And this can be a function

13:54

of generally the

13:56

temperatures warming on earth, generally

13:58

the removal of sulfur dioxide. generally these

14:00

El Nino La Nina cycles, there's

14:03

a lot of factors. But it seems to be

14:05

the case that we are having a very significant

14:07

trend of continuously warmer oceans. And those

14:09

continuously warmer oceans means that we're going to have

14:11

what used to be called a one in 500

14:13

year storm, which is what Asheville

14:16

is being termed at one in 500 year, these

14:18

sorts of storm events can happen every couple years.

14:21

And we're now looking at one in 100 year events

14:23

happening every two to three years in

14:25

the United States with the hurricane activity that

14:27

we've been seeing. I think a lot of

14:29

the conspiracy theories are built on actual experiments

14:31

that happened. This one project storm fury, I'm

14:33

sure you know about was

14:35

to try to modify hurricanes by

14:38

putting in some chemicals that would

14:41

freeze them and dull them. So they're kind of

14:43

building on this break it apart. Yeah, break it

14:45

apart. So, you know, there,

14:47

there, there have been experiments here

14:49

with altering weather, altering hurricanes, but

14:51

that doesn't mean it's Putin, Pelosi,

14:54

or, you know, the aluminum. So let's get

14:57

let's get back to brass tax. So let's talk

14:59

about the economics. So there's there's 500

15:01

billion to a trillion dollars of real estate value on

15:03

the Florida coastline. And what

15:05

used to be a one in 100 year event, the average

15:08

Florida homeowner historically has been paying about 1% of

15:10

the real estate value in insurance. So

15:12

now if your real estate is likely to be

15:14

wiped out, one out of every

15:16

20 years, instead of one out of every

15:18

500 years, the cost of insurance

15:21

gets to the point that it is untenable for

15:23

most people to pay for

15:25

their insurance. Florida has a state

15:28

back reinsurance provider called the Florida

15:30

hurricane catastrophe front fund. And

15:32

this fund issues debt to meet its coverage

15:35

demands because it reinsures insurance companies in order

15:37

to incentivize them to come

15:39

into the state and under it. You should

15:41

you should explain the loop here, which is

15:43

you go and get a mortgage. The

15:46

bank says you need to get insurance if I'm going

15:48

to lend you the money to buy the home. So

15:51

then a bunch of insurers need to

15:54

decide that they're willing to underwrite that area. And

15:56

then when they give you that insurance, they then want to

15:58

lay that risk off and go to re-insure. Is

16:00

that the cycle? That's right. And what's

16:03

happening is they would normally underwrite that risk,

16:05

they would say this is going to cost,

16:07

you're going to lose the value of your

16:09

home every 100 years or every 200 years.

16:11

But now, the models are

16:13

showing because of the frequency of these sorts

16:15

of hurricane events and the severity of the

16:18

hurricane events, that maybe you'll lose the

16:20

value of your home once every 20 years or once every

16:22

30 years. And no consumer

16:24

is going to be willing or able to pay that

16:26

much for the insurance on their home. So

16:29

the state over the last several years

16:31

has had to step in and effectively

16:33

subsidize the insurance. And now

16:35

the state re insurance vehicle only

16:38

has statutory liability maximum of

16:40

$17 billion in a single

16:43

hurricane season. Now, I think they

16:45

got lucky with Milton today, but some were estimating that

16:47

the Milton losses were going to be in excess of

16:49

100 billion bigger than Katrina. It's

16:52

likely as of this morning, the reinsurance websites

16:54

are all saying it's probably a 40 to $50 billion loss

16:58

event, which still exceeds the

17:00

state's reinsurance capacity. So you can kind

17:02

of think about Florida State's reinsurance thing

17:04

being effectively bankrupt, it doesn't really have

17:06

the capacity to underwrite the insurance

17:08

anymore. So the real question for everyone

17:10

is, is the federal government going to have to step

17:13

in and start to support the price

17:15

of homes? Because if they don't, well, it's a terrible

17:17

precedent to set because if you do it

17:19

for Florida, then you'll have

17:22

to do it in Texas and Louisiana and

17:24

Mississippi. And California with wild fires. And Arizona,

17:26

there's there and Texas, there's going to be

17:28

no way to create a

17:30

clear demarcation of who gets a bailout and

17:32

who doesn't, which will mean that everybody will

17:34

get a bailout or nobody gets a bailout.

17:37

That's right. And if everybody gets a bailout, and if you

17:39

think about how systematically unpredictable, at

17:41

least in the southern states, the

17:44

weather is you're going to be talking hundreds of billions

17:46

of dollars a year, probably. The total

17:49

value of all mortgages and homeowner mortgages in

17:51

Florida is $454 billion. And those people typically

17:55

have, you know, a debt to equity ratio, probably on

17:57

the 50 to 80% range. So

18:00

if the value of your home dips by 25% because

18:02

everyone starts selling their homes, leaving Florida or they

18:05

can't get insurance, then the people

18:07

that live in Florida, most of them have their net

18:09

worth tied up in their home, are gonna see their

18:12

personal net worth wiped out or cut in half. So

18:14

it's not just an economic problem, it's a social

18:16

problem that now there are so many

18:18

people that have put their entire net worth into their

18:21

home, the value of their home is written to a

18:23

point that it no longer makes sense given the frequency

18:25

at which homes are gonna get destroyed. That's

18:27

probably the reason why they'll have to do it but

18:31

then that calculation will have to happen for every

18:33

single homeowner in every single state where

18:36

this is an issue. Yeah. The

18:39

way, Freebert, are you saying the entire Florida

18:41

coastline is no longer economically viable? No,

18:43

it's totally viable, it's just the question is,

18:46

what are you willing to ask? At what

18:48

price? Will you pay 5% of your home

18:50

value for insurance every year? Will

18:52

you pay 2%, 3%? If the

18:54

expected life of a house is 20 years, then

18:58

that's not viable. It becomes very, very untenable.

19:00

Well, it used to be one in 500

19:03

year, now it's probably one in 15, right? The

19:05

question is, does this apply to the entire coastline or just parts

19:07

of it? Well, I mean,

19:09

you saw that the range at which these events can happen

19:11

is all over the place and the

19:13

challenge is the events are getting more significant because

19:17

of this warm ocean weather that we

19:19

see, this warm ocean temperature. The only

19:21

good news for Freebert is that now

19:23

people are building the first couple of

19:25

floors in high rises in Miami and

19:28

homes on stilts with concrete and

19:30

with salt water resistant material. So there is

19:33

a counter to this, so we might be

19:35

looking at- An investment in climate resilience, that's

19:37

right. Yeah, so it might actually

19:39

be an opportunity to upgrade all these

19:41

homes to resistant ones using

19:43

another set of technologies, but the bailout

19:45

is really interesting too, Saks, because Florida's

19:49

got a lot of electoral college votes, doesn't

19:51

it? Like I hate to bring this back

19:53

to politics, but promising

19:57

people bailouts is how

19:59

these- politicians seem to be getting votes these

20:02

days. Is anyone talking about a federal bailout? I

20:05

mean, is that, this is something you're predicting. I

20:07

think what Freiburg is saying is that there's a,

20:09

there's a pretty obvious parade of parables here where

20:11

the question will have to be answered one way

20:13

or the other. Because if you only have a

20:15

$17 billion re-insurance fund and

20:17

there's 50 billion of damage, somebody's

20:20

gonna have to come in and cover the gap.

20:22

And if it's the insurance companies, expect

20:24

your insurance premiums to double or triple.

20:27

That's right. And that's what happened in

20:29

California. And by the way, State Farm left

20:31

a lot of California. And this is what

20:33

I was gonna say. Most of these big

20:35

insurance companies have already done the calculus to

20:37

realize that these regions are no longer profitable

20:40

enough to justify the downside risk. That's the

20:42

bigger problem. So then the ones that are

20:44

left are insolvent re-insurers or

20:46

insurers that are just funding

20:48

short-term ARBs because they know that the odds

20:51

are they're gonna get wiped out. So they'll

20:53

price gouge effectively. So, a different example is

20:55

that here where I live in Menlo Park,

20:57

we're not in a floodplain. We're not in

21:00

a fire region, none of

21:02

that stuff. But in

21:04

order for us to get home insurance,

21:06

you have to now go

21:08

through a risk assessment. And in our specific case, we

21:10

were like, hey, what should we do with our roof?

21:12

And they were like, you gotta take the roof off

21:14

if you want home insurance. And we're like, well, home

21:16

insurance is probably a good thing to have. Was it

21:18

a wood-shake roof on your house? It was a beautiful,

21:21

you saw our house. It's a beautiful wood-shake roof and

21:23

we had to remove it. And the two choices were

21:25

a $350,000 like iron- Composite

21:28

materials, yeah. Or like

21:31

70K for composite. And it's like, this

21:33

is insane. And the

21:36

cost of insurance was just egregious

21:38

in the absence of going

21:40

in one. Anyways, we ended up getting the- For most

21:43

homeowners, when the cost of insurance gets to a certain

21:45

threshold, you don't have budget for it. You can't afford

21:47

it. And so that's a lot of why the insurers

21:49

leave. They'll underwrite anything at any price, but they just

21:51

know that most consumers can't afford it. Here's some other

21:54

interesting statistics. Related but unrelated. In the early

21:57

1900s, the city of Phoenix, Arizona averaged five days

21:59

a year of- of temperatures of 110 degrees or

22:01

warmer. By

22:03

the 2010s, Phoenix averaged, during the 2010s,

22:07

27 days a year, where the temperature was 110

22:10

or higher. Since

22:12

2021, Phoenix averaged- 100

22:15

plus days. 42 days, and in 2024, it's been

22:17

70 days so far this year, that

22:20

the temperature is over 110. So

22:22

this is affecting, and so there's increased risks

22:24

in California with wildfires, increased risk with hurricane.

22:27

There are a lot of these factors, and

22:29

I have friends that work in re-insurance and

22:31

in the insurance markets. Even

22:33

if you don't get affected by a wildfire

22:35

or disaster, when that article was

22:37

in the Wall Street Journal, I think it

22:39

said that the number of average days above

22:41

100 was like 100-something. Yes,

22:44

that's right. And they profiled this retired

22:46

woman who was an insurance adjuster or

22:48

something, and the whole

22:51

point of the article was not that her

22:53

house was destroyed or at risk, but the

22:55

cost of electricity has gone just absolutely sky-high.

22:57

Even with solar panels, even with storage, you

23:00

need to basically lean on the grid, and

23:03

the grid now just charges you an exorbitant

23:05

amount of money. And so these folks were

23:07

paying thousands of dollars a year. So

23:10

if you imagine the trifecta,

23:12

you have all of this climate risk that

23:15

could destroy your home. You're paying an

23:17

enormous premium for home insurance, and then

23:19

you're paying an enormous premium for electricity

23:22

from the mainline power utilities. It's

23:25

not sustainable. Yeah. And

23:28

just for a background, FEMA manages

23:30

something called the NFIP, National Flood Insurance

23:32

Plan, and it's

23:35

historically about 50% cheaper than

23:38

private flood insurance. They

23:40

have 4.7 million active policies providing

23:42

1.3 trillion in coverage,

23:45

but they instituted a new risk

23:47

assessment system, and that caused rates

23:49

to increase, and yeah, it's, because

23:51

of all this, the policies have

23:53

decreased over the last couple years,

23:56

meaning less people have flood insurance

23:58

at the same time. that

24:00

these things are getting worse. And

24:03

so, yeah, this is a really tough

24:06

issue. I wonder if this is an opportunity

24:08

to math. If

24:11

you think about historically how insurance worked, it

24:13

worked in communities where people would help each

24:16

other out to barn raising

24:18

kind of events when somebody had a problem.

24:20

So if we just put on our entrepreneurial

24:22

hats here, if you

24:24

look at the cost of insurance, if

24:27

a hundred different people bundled the cost

24:29

of their homes together, put money into

24:31

some sort of platform, like an Uber,

24:33

Airbnb marketplace, and there was some management

24:35

structure here of self insurance, because I know some people

24:37

are doing self insurance for health care at their companies for

24:40

this kind of thing. Do you think there's going to

24:42

be a new business

24:44

opportunity here? Let's call it to our business, Jason,

24:46

it's called a mutual. And those

24:48

are like a good chunk of the

24:51

industry are mutuals where it's the shareholders

24:53

are the members and they all share

24:55

the risk and the ownership. Those those things

24:57

work because you have broad geographic coverage. If

24:59

you had to go just into Malibu and

25:02

self insure, the rates would literally

25:04

be the greater than the value of the home.

25:07

Right? No one would pay into it. No one

25:09

actually, if you do proper underwriting, what's happened in

25:11

the last couple of years is all the reinsurance

25:13

companies and all the insurance companies have had to

25:15

re underwrite the rates that they charge for insurance,

25:17

because the frequency of a disaster has gone

25:20

up. And the new price that

25:22

they should be charging is so high, it doesn't matter

25:24

how the capital structure is set up. It

25:26

simply there's there's one big event that's

25:28

going to cause a big wipeout for a large number. My

25:31

personal belief is I think that the real

25:33

estate markets in some of these places

25:36

are meaningfully

25:38

mispriced. And specifically,

25:41

what I mean is that they're massively overpriced.

25:43

That's right. Because I think when you actually

25:45

account for the climate

25:47

damage and the long term

25:50

financial stability of the insurers and

25:53

the reinsurers, I don't

25:55

think that many of the markets that have

25:58

seen these crazy sky high price I'll

26:00

name two to be specific, West Palm

26:02

Beach and Malibu.

26:05

So both ends of the coasts. These

26:07

things just don't make sense. And I think

26:09

people view these things as investments, but on

26:11

the West Coast, when you deal with things

26:13

like soil erosion and other things, I

26:16

think it's a, it's a calamity

26:18

waiting to happen. And I think on the

26:20

East Coast, when you factor in the extreme

26:22

weather conditions, even Jason, your comment about

26:25

rebuilding these homes in a more

26:27

foolproof way doesn't solve it because you won't

26:29

be able to rebuild the

26:31

entire state. There's a lot

26:33

of people that just can't afford it. There's

26:36

a lot of folks that will

26:38

not have adequate coverage. So

26:41

I just think these are disasters waiting to happen,

26:43

unfortunately. Yeah, it's,

26:45

and Saks, there's a movement right now. A

26:49

lot of people, even of means, are

26:51

renting their homes. And so in

26:54

the real estate market, what are your thoughts on that? Just

26:57

renting versus buying now becoming like a,

27:00

something that people in the

27:03

top half of homeowners or

27:05

potential homeowners are now electing to not own

27:07

their home and rent. Have

27:09

you been monitoring that? I honestly hadn't heard that.

27:11

I mean, the trend that I

27:13

thought was happening was that you had these

27:15

big funds, like BlackRock or whatever, buying up

27:18

huge numbers of homes and then running

27:20

them to- Low end homes, yeah. Low

27:22

end or medium, to

27:24

families. I thought that's what was going on. I hadn't

27:26

heard that at the high end of the

27:29

range that people were running. Yeah, well, if you think about it, there

27:32

seems to be a cap when you have a $10 million

27:34

home of what you can possibly rent it for. And

27:38

the prices are now making more sense

27:42

to keep your money in the market or in

27:44

other places and then rent. I'm just hearing that

27:46

over and over again. Are you long real estate

27:48

in Florida or coastal California if you could, or

27:51

do you treat them differently? I

27:53

think they're different, Florida is like, I

27:56

mean, I don't know how you do the math on-

28:00

I just don't know what you do on

28:02

a trillion dollars of real estate value with

28:04

half a trillion of mortgages when

28:08

you have real exposure on loss more

28:10

frequently than one in a hundred years.

28:12

To your point, they need to be reprised. How

28:15

do you reprice those homes in the significant level

28:17

that they need to be reprised without causing massive

28:20

economic and social consequence? That's

28:23

what's challenging me in thinking about what's the

28:25

path here. So it was a

28:27

good thing that I sold my Miami place. Once

28:30

again, Saks makes a great trade. Pretty

28:34

awesome. I topped it. Well done, Saks. Just

28:41

like, I love that house. You love

28:43

that house. Where

28:45

do you think I stayed when I was in town? You're

28:48

so selfish. I lost a place to stay. I

28:52

mean, the yacht access alone, being able to get

28:54

out on the bay and get on a boat,

28:56

the ski boots, all this great stuff. All

29:00

right, let's let's keep the Freeburg

29:02

train going here. Huge news. AlphaFold

29:04

creators just won a Nobel Prize

29:06

in chemistry. Two members of

29:08

Google's DeepMind AI research team, Demis

29:11

Hassabis and John Jumper received

29:13

this year's Nobel Prize in

29:15

chemistry. They both work

29:17

for Google's DeepMind, I should know. And

29:20

Freeburg, again, all in getting there

29:22

first, explained what AlphaFold was back

29:24

on Episode 14 in December of

29:27

2020. That

29:30

was almost four years ago. Freeburg,

29:32

maybe you could explain. Did

29:35

we predict that they would win the Nobel Prize at

29:37

the time? I believe you did. We'll go check the

29:39

receipts using podcast AI search engine. It

29:43

became much more likely that they would win the

29:45

Nobel after they won the Breakthrough

29:47

Prize. Just to point this

29:49

out. Yeah, yeah. Shout out Yuri Milne. Shout

29:52

out Yuri and Julia. And Julia.

29:55

Because when those guys won

29:57

that award for 2023. and

30:00

you heard the extent of

30:02

what they've done, it

30:04

was almost obvious that they were gonna

30:07

win a Nobel after the fact. So I

30:09

think the really interesting thing is actually, in

30:11

this community, I think the Breakthrough Prize is

30:14

actually meaningfully more relevant and a positive directional

30:16

indicator to breakthrough science than any of us.

30:18

Well, it's kind of like winning Sundance or

30:21

Cannes. You win the Palme d'Or, you become

30:23

a favorite to win at the Oscars, right,

30:25

in the Academy Award. So that's actually interesting.

30:27

The regional or more industry-centric award

30:29

could lead to the next one. So, Freiburg, just

30:32

explain to us why this is so important before

30:34

we go on. I just think it's much more

30:36

rigorous than the Nobel. I think the Nobel can

30:38

be a little bit gamed, I think. Oh,

30:41

interesting, okay. What do

30:43

you think, Freiburg? Explain to the audience why this

30:45

is important and what's transpired since we talked about

30:47

it four years ago. There's

30:49

been a long challenge

30:52

in biochemistry on

30:54

understanding or predicting

30:56

or visualizing the

30:59

three-dimensional structure of proteins. Because remember,

31:01

proteins are produced

31:03

by long chains of amino acids, and

31:06

those amino acids are kind

31:08

of created like a bead, beaded necklace, and

31:11

then the whole necklace collapses on itself in

31:13

a very specific way, and

31:15

that three-dimensional molecule, that big, chunky

31:17

protein, does something structurally, physically. And

31:21

so trying to understand the shape of a

31:23

protein is really hard. I mean,

31:25

we've used kind of X-ray imaging systems to try

31:27

and identify it and try to build models

31:29

to identify how does that, quote, protein folding work.

31:31

How do those amino acids collapse on each other

31:34

to create that three-dimensional construct? And I don't

31:36

know if you guys remember, in the early 2000s,

31:39

there was a Stanford Folding at Home Distributed Computing

31:41

Project. Do you guys remember this? Yeah.

31:44

It would use people's machines and extra CPU, like

31:46

the SETI at Home Project, to do this. Precisely,

31:48

yeah, exactly right, yeah. So it was like, it

31:51

ran on the background of your computer, used your

31:53

CPU cycles when you weren't using your computer, and

31:56

it tried to model protein folding. And

31:58

so this has been a problem that

32:00

folks... have tried to tackle with compute

32:02

for decades to figure out the

32:04

3d structure. This is so important because if we

32:06

can identify the 3d structure of proteins, and

32:09

we can predict them from the amino acid

32:11

sequence, we can print out

32:13

a sequence of amino acids to make a

32:15

protein that does a specific thing for us.

32:18

And that unlocks this ability for humans to

32:20

create biomolecules that can do everything from binding

32:23

cancer to breaking apart pollutants

32:25

and plastics to

32:27

creating entirely new molecules to running

32:30

in some cases like what David

32:32

Baker did at University of Washington.

32:34

He shared the Nobel Prize creating

32:36

micro motors, mini motors from

32:39

proteins that he designed on a computer. And

32:41

so this becomes I think this great

32:43

like big holy grail in biochemistry. And

32:45

the alpha fold project at DeepMind inside

32:48

of Google solved this problem. And by

32:50

the way, since then they've come out

32:52

with alpha fold three, yeah, they've launched

32:54

a drug discovery company called isomorphic labs

32:56

where they're basically predicting

32:58

molecules that will do specific things

33:00

for a target indication. And

33:03

then they use the alpha fold models to actually

33:05

design and develop those molecules. And

33:08

there have been literally dozens of companies

33:10

that have been started since DeepMind was

33:12

published, and probably several billion dollars

33:14

of capital that's gone into companies that are

33:16

creating new drugs, creating new industrial biotech applications,

33:19

using this protein model and capability that was

33:21

unleashed with DeepMind a number of years ago.

33:23

So it really has transformed the industry. It'll

33:25

be a couple years before we see a

33:28

transplant in the world. But it's

33:31

an exciting kind of thing. Yeah, not to

33:33

virtue signal here. But those are plus size

33:35

proteins now free bird. They don't like being

33:37

called chunky and phone plus size proteins plus

33:39

size. Yes.

33:41

One, one really difficult technical question for

33:44

your free bird. Is there any way

33:46

for you to take this amazing breakthrough

33:48

and make Saks interested in? Is there

33:51

any possible vector here

33:53

for it to relate to Saks and

33:56

get him off his Blackberry right now? Blackberry.

34:00

playing chess with Tio and JD Vance

34:02

is watching them play chess. I

34:04

think that's what's going on right now. It's really hard.

34:06

I mean, the poor audience here is watching Zach looking

34:08

down. All right, let's keep

34:10

this train moving here. Enough of the shenanigans. Anyway,

34:13

congrats to the teams. The very great guys at one.

34:16

Yeah. Yeah. I mean, it's just great. And David Baker

34:19

at the Baker Lab and University of Washington. And David

34:21

Baker, also a breakthrough prize winner. Yeah. What's

34:24

interesting to me is like these two Nobel's, these

34:27

guys, but also Jeffrey Hinton's, you

34:30

know, you're really seeing now the

34:33

convergence of the hard sciences and computer

34:35

science. Totally. In a really meaningful way.

34:37

And I think that that's so interesting

34:39

and cool. I think

34:41

in the group chat, Chamath, you had an interesting,

34:43

hey, maybe there should be a computer science award

34:47

for, you know, a Nobel computer

34:49

science award. And I actually think

34:51

it's the opposite now, which is

34:53

that it's amazing to see folks

34:55

using computers to

34:58

improve our understanding of the natural sciences. And I think that that's a

35:00

really great place to be. So what Demis and John and David are

35:02

doing in the life sciences amazing, what Jeffrey

35:07

Hinton, you know, did, you

35:09

know, what 30 and 40 years ago and 20 years ago in

35:11

terms of

35:13

training deep neural nets, also really amazing.

35:15

All computer based. Yeah, all computer based.

35:17

And in related news, Benioff just nominated

35:20

himself for

35:22

excellence in CRM management. So congratulations to Benioff

35:24

on what is that? What is that?

35:26

What is that? Call it. It's

35:29

just a straight. Why are you attacking Benioff? What

35:33

did he do wrong? They're

35:38

just jokes. Have you not learned anything?

35:40

They're people that attack you. It's not

35:42

an attack. It's a joke. Has

35:45

done so much for philanthropy. Just ask him

35:47

if you do

35:50

these things. This is how I got drunk with pop

35:52

about. Exactly.

35:54

Yeah. I don't people have a sense of humor

35:56

about yourself, but it's not even it's not even

35:59

funny. something else. I

36:01

mean, okay, give me a give me a funnier Nobel.

36:04

Go ahead. He runs

36:06

a 300 billion market. Come

36:08

back on the pod and explain why AI

36:10

is not gonna disrupt sass. Really? Oh, we

36:12

see he wants to be back on the

36:14

box. He wants to come on. We'll check

36:16

in. We'll check in in a hundred billion

36:19

dollars. He had

36:21

his chance. That chance

36:23

is closed. He shot his shot and it

36:25

did not land. That door was closed when

36:27

he insulted our guests about not being able

36:29

to afford the Disney. When he called the

36:31

all in people. Pours. Oh

36:34

my God. Now you're piling

36:36

on. Anybody coming to Dreamforce 2025? Okay,

36:38

let's move on. Sorry.

36:40

Anyways, leave Benny all alone.

36:42

Leave, it's like, leave

36:45

Brittany alone. The famous meme. Leave Benny

36:47

all alone. So how many new enemies

36:49

do you want to create? I

36:52

just, every week there's just

36:54

jokes. This

36:57

one, you thought he was running out of feuds, you know? I'm

37:00

making stupid

37:02

jokes. The reason people tune in is

37:04

because you laugh and learn. Did you

37:06

guys see that, that tweet that

37:09

somebody suggested throwing a conference with all

37:11

of J Cal's haters? J's.

37:16

Jators. Jators

37:18

convention. What

37:21

is it called? Jators? Jators. Yeah. J

37:23

haters. Yeah. Jason haters. Jators. Yeah.

37:25

I'd like to shout out my Jators. They're

37:28

just jokes folks. I love

37:30

you Mark. I'm penny off. Come

37:33

on the pod, Zach. I

37:35

think somebody could watch a successful summit just doing

37:37

that. It's like a ready-made

37:39

audience. And they're

37:41

clearly passionate. They're clearly passionate. All

37:44

the YC founders will be there.

37:47

Keynote, day one. Pomer lucky. Keynote,

37:49

day two. David Sacks. I

37:54

think it would rival the all in summit in terms of

37:56

the passion to the fans. All three of us would show

37:58

J Cal would be so devastated. I have to keep it

38:00

up. I like Betty off. I don't know. I'm trying to

38:02

make it up. He's just gotta have a sense of humor.

38:04

Oh my God. Meghan Kelly. Meghan

38:07

Kelly and farmer lucky. Wait, does that hate you too?

38:09

Why does that? Oh my God. Why?

38:13

Well, he just anyway, we'll get to it later. But you're right. Like,

38:15

I'm not. I'm not. I'm not.

38:18

I'm not. I'm not. I'm

38:20

not. I'm not. I'm not. I'm

38:23

not. I'm not. I'm not. I'm

38:26

not. I'm not. I'm

38:28

not. But you're right. Like,

38:30

you know, throwing a conference for Jay

38:32

haters would just be like a ready

38:34

made. Jaders Jaders. That isn't underserved and

38:36

passionate demographic. It would be bigger than.

38:39

Just look at Sax's replies community

38:43

with shared values. Hey man, if I can

38:45

get 25% of those tickets out, I'm in.

38:47

Let's go. All right.

38:49

Let's keep the train moving here. We

38:53

have an update on the DOJ's

38:55

antitrust suit with Google. Looks

38:57

like they're going for the breakup,

38:59

as Chamath predicted. You

39:02

remember the Bloomberg report back in August. We covered

39:04

it in episode one, 92. Google

39:08

was found liable for maintaining a monopoly in

39:10

search and digital ads. Now the DOJ is

39:12

working on the

39:14

remedy, right? Okay. They're guilty.

39:17

So now comes time for the remedy.

39:19

And the DOJ is quote from Bloomberg,

39:21

considering asking a federal judge to force

39:23

Google to sell off parts of its

39:26

business. And according to

39:28

this filing, the DOJ is specifically

39:30

considering structural remedies that would prevent

39:32

Google from using products such as

39:35

Chrome, Google Play, that's the

39:37

app store on Android, and

39:39

Android itself to advantage Google

39:41

search. 32 page document

39:43

released by the DOJ lays out several

39:46

options and we'll go through them and talk about

39:48

them here. The

39:50

obvious one terminating Google's exclusive agreements

39:53

with hardware companies like Apple, the default search

39:55

engine there for 30 or 40 billion a

39:57

year, Samsung, that's a layup, a separating from

39:59

an Android, my God, that would be drastic

40:02

ripping that out of the Google ecosystem,

40:05

prohibiting certain kinds of data tracking, that's a

40:07

layup as well, or other behavioral

40:10

and structural changes for the company. I'm

40:12

going to pause there, Friedberg, and

40:14

get your thoughts on this as a

40:16

former Googler. And you interviewed Sergey

40:18

at the summit, but I don't think we

40:20

talked to Sergey about this, because obviously he

40:22

would not be able to talk about it.

40:25

So what are your thoughts here on a

40:27

potential remedy? I think we've talked about this.

40:29

I mean, look, I've shared in the

40:31

past, my belief that companies

40:33

that are big, that have

40:35

excess capital, that then invest that excess capital

40:37

in R&D can be a net benefit for

40:39

all of us. Look

40:42

at Bell Labs. Bell Labs

40:44

had a monopoly on through

40:46

their association with AT&T,

40:50

with developing radar,

40:52

microwave, the transistor, integrated

40:54

circuitry, information theory,

40:57

everything that is the basis of

40:59

the internet, computing, even

41:01

nuclear technology, and

41:03

so on. It's because they had this extraordinary

41:06

capital flow from the scale of

41:08

the business, and they were able to invest in

41:10

R&D. Similarly, Google acquired and

41:12

invested for many, many years in DeepMind. And

41:14

we just talked about how Demison team won

41:16

the Nobel Prize for

41:19

the work that they did. And they, by the

41:21

way, published the protein structure for

41:24

200 million proteins for free out

41:26

of that service. I just want to

41:28

zoom out for a minute and talk about the fact

41:30

that this isn't about you

41:33

know, whether Google has a monopoly in

41:35

search that prohibits competition or in ads

41:37

that prohibits competition, but is

41:40

it really worth penalizing

41:42

any company that's big, particularly do we lose

41:44

the benefit of those big companies investing in

41:46

technology that pushes us forward. Google also invested

41:49

in Waymo for years and years and years,

41:52

which arguably spurned

41:54

and drove investment from many other companies in self

41:56

driving technology. And if Google hadn't done that, would

41:59

self drive driving have taken off the way it did. I don't

42:01

know. Same with Kitty Hawk and

42:03

Larry's investment in Eevee dolls and that that spawned

42:06

a lot of Eevee tall investing.

42:08

And similarly, if you think about Amazon and

42:10

their investment in AWS, where they were burning

42:12

cash for many years, that

42:15

turned out to spawn arguably a

42:17

lot of interest and investment in cloud. And

42:19

so I don't think that these big companies

42:21

are bad just because they're big, I think

42:23

we should take apart the

42:26

monopolistic antitrust actions and

42:28

behaviors that they take and then identify ways to

42:30

remedy those behaviors versus just saying

42:32

anyone or anything that's big should be taken

42:34

apart. Because there is a tremendous benefit to

42:36

be gained from the R&D dollars that they

42:38

all put into things that, you know, move

42:41

the whole industry forward. And I think that

42:43

leadership is important to need it. Otherwise, if

42:45

you've got a bunch of startups that

42:47

are trying to get $10 million checks from VCs, I'm not

42:49

sure they're going to build a Waymo and I'm not sure

42:51

they're going to build Amazon cloud. And

42:54

I'm not sure they're going to build a deep

42:56

mind, you know, protein folding company and

42:58

publish it for free. So I don't know, that's

43:00

just my point of view. What's the likely I

43:02

wish I should think about this stuff. Chamath, you

43:04

kind of know this one. Pretty

43:06

good with these predictions. Tell us we'll be sitting here

43:08

five years from now what will have occurred. Unfortunately,

43:14

not what Freebird just said. It'll

43:17

be the opposite. There'll be some form

43:20

of forced remedy. I'm sympathetic

43:22

to Freebird's argument. I don't think that it's really

43:24

a good thing in the end, because I do

43:26

think there are some incredible examples of

43:30

Google specifically reinvesting in a way

43:33

that's really added value in

43:35

the world. I

43:37

think the problem though is that the

43:40

technology innovation cycle has gotten

43:42

too elongated. So you're

43:44

not seeing creative

43:47

destruction be the natural force that

43:50

keeps all of these companies in

43:53

their own swim lanes. And so they

43:55

are allowed to become too amorphous

43:57

and too profitable. And I

43:59

think it becomes an obvious

44:01

target for politicians. I

44:03

think that's a really good observation

44:07

there about the timeline of this. Because

44:10

if you look at this, I have

44:12

started now and I know many people

44:14

are starting their search journey on Claude

44:16

and chat GPT every day, I'm doing

44:18

3040 50 queries and follow

44:21

ups per day. I forced

44:23

my entire team to do that as well.

44:26

And so just as there's an

44:28

actual viable competitor to Google, this

44:30

action has reached, I don't

44:33

know the halfway mark, this is going

44:35

to wind up being completely meaningless sacks. If

44:37

chat GPT does build a

44:40

viable competitor coexist or that

44:42

siphons off search, am

44:44

I wrong here? Well,

44:48

it is ironic that frequently the

44:50

government takes actions on these monopolies at

44:52

precisely the moment they're subject to

44:54

the greatest disruption. Totally the

44:56

same thing with Microsoft in a way, but it

44:59

was still a good thing that the government acted

45:01

when it did because there was a risk of

45:03

Microsoft porting over its desktop monopoly into

45:05

this new era of the internet. I think it's still

45:07

a good thing to be looking at breaking up Google,

45:09

I actually think that would be good. At the end

45:11

of the day, it might be good for shareholders. This

45:14

thing should be probably three separate companies like we've

45:16

talked about in our previous show. But it is

45:19

true that Google is facing the

45:21

most existential threat to its search monopoly.

45:23

And it is a monopoly in

45:26

the form of open

45:28

AI at this point in time. I

45:30

have one final thought here, a piece of

45:32

advice for Sergey and the team over there.

45:34

And when I told Sergey directly, they have

45:36

to get good at making apps to

45:39

go use chat GPT, you take out

45:41

the app, and it's a wonderful, beautiful

45:43

experience. When you go try to figure

45:45

out how to use Gemini, it's like

45:47

shoehorned into search results. And then it's

45:49

like some sub domain. That's why people

45:51

aren't using it. Go buy the domain

45:54

name chat calm and make a dedicated

45:56

app just for Gemini. You're 100% kick

45:59

ass. You're 100% right. Google and you

46:01

suck at apps. We said

46:03

this when you asked about

46:05

the bear case of OpenAI. If

46:09

the DOJ is gonna go after Google,

46:11

and by the way, the interesting thing, Jason

46:14

and I mentioned this to you is that in

46:16

the same article that floated the trial

46:18

balloon about this remedy of a

46:20

Google breakup, the headline in the Wall Street Journal,

46:22

which I think was very purposeful, said Google and

46:25

Meta. So I think that they,

46:27

if given their druthers, they being the

46:30

powers that be at Washington, will

46:32

probably wanna take a run at both of these companies.

46:34

They'll start with the one that they think

46:36

they can disassemble the

46:39

quickest, and then they'll go to

46:41

Meta afterwards. My

46:43

strong advice to Meta

46:45

and Google is, if

46:48

this is gonna happen, you

46:51

gotta go out kicking

46:53

and punching and fighting and scratching. And I think

46:55

the most obvious thing is what you just said,

46:58

Jason, which is you are the front

47:00

door through the internet, and

47:03

there is this completely new emergent technology.

47:07

And where is the

47:09

same response to chat

47:11

GPT that you

47:13

had to X or that you

47:15

had to Snapchat or that you

47:17

had to TikTok? Because if it's gonna happen, it's

47:19

gonna happen, and then you might as well just

47:21

go for it. Build the apps,

47:24

make them kick ass, make the

47:26

chat GPT alternative, and get it

47:28

to billions of people yesterday. That

47:32

would be the most logical

47:35

game theory thing to do to

47:38

build up a pool of users that

47:40

you will rely on when

47:44

the DOJ tries to come with some consent

47:46

decree or whatnot. So this is

47:48

the time to build up the assets

47:51

now, as aggressively as possible. Yeah, and

47:53

selling YouTube would be the ultimate. I know that

47:55

the ad networks you pointed out, Le Rak in.

48:00

They give you something about the

48:02

app thing. Can you imagine $500 billion

48:05

going into Google's coffers

48:08

in YouTube shares? They will have 500

48:10

billion in cash. Chama. I

48:13

had a I talked to a company he CEO

48:16

of a public consumer facing company.

48:18

And this was in

48:21

the context of some 8090 stuff. And

48:25

he said that he and and two other

48:27

CEOs, the three of them you guys would

48:30

all know these are very big companies, the

48:32

three of them combined are particularly large. And

48:35

they said they've had multi year roadmaps to

48:37

try to build a reasonable

48:39

set of tools and advertising and it's

48:41

been impossible. And

48:43

partly why is that the tools

48:45

that the big folks offer are

48:48

so good, that they just cannibalize

48:50

and run over the entire market. And so what

48:52

they hear from CMOs is

48:54

we would love to advertise on your

48:56

company, your site, but A your tools

48:58

are substandard and B, even

49:00

though your inventory is cheaper, you just don't

49:03

give us the same scale and

49:05

breadth that we get in these other big

49:07

places. I'm not saying that that's either right

49:09

or wrong. But through the

49:11

lens of probably what the DOJ sees is when

49:13

a lot of these folks write letters to them

49:16

talking about what they're going through, this is what

49:18

they're saying. And I suspect

49:20

that if you could actually have a

49:23

more fragmented market in some of these key markets,

49:26

it's going to be a little bit easier for

49:28

these smaller companies to have a business. Now, you

49:30

could say, well, tough luck, you tried and you

49:32

couldn't build it. I get that argument. And I

49:35

think that that at some point that is legitimate.

49:37

But the problem is, if you're public, and you're

49:39

trying to make your company profitable, what

49:42

do your engineers want to work on? They want

49:44

to work on consumer facing forward features. And so

49:46

what always falls off the list, it's the stuff

49:48

at the end, the attack. And

49:50

so anyways, it's this recursive negative loop that a

49:52

lot of these other companies are in, in

49:55

the shadow of these big companies that I think is going

49:57

to cause the DOJ to try to

49:59

do something, you know, this is a great setup

50:01

for M&A, it's a great setup for IPOs starting

50:03

to look like. And this is a multi administration

50:07

case that's been going, right? I think

50:09

this started under Trump, went into Biden,

50:11

and is now going to continue on

50:13

to Trump or Harris. So

50:16

what are your thoughts here, Sacks? Well,

50:19

in terms of the political environment for M&A next year? Yeah.

50:22

I mean, so obviously it depends which administration's in power.

50:25

So I think

50:27

that's a good point for a lot of Democrats,

50:29

prominent Democrats in tech like Mark Huber

50:32

or Reed Hoffman have been making the case that

50:35

if Kamala is president, she's going to be

50:37

much more hospitable and friendly towards M&A. And they've

50:39

been saying explicitly that they want Lena

50:43

Khan fired. Well, in response to that, AOC just came out and

50:45

said, we're going to have a throwdown

50:48

if you do that. So I don't- Let's

50:51

go. I think there's a substantial difference or

50:53

improvement in the regulatory

50:56

permissiveness towards M&A if

51:00

we have a Democratic administration. If

51:03

you have Trump in office next year,

51:05

I think that there will

51:07

be an opening up of M&A. I

51:09

think the Republicans have their own issues with big

51:11

tech, but those issues tend

51:13

to revolve around censorship and bias

51:16

and search results and LLMs, things like

51:18

that, as opposed to bigness per se.

51:20

So I think it will be easier

51:22

to get M&A done next year if

51:25

you have a Republican administration. Absolutely. I

51:27

am going to be printing money in

51:29

a Trump administration. It is going to

51:31

be obscene how many M&A deals and

51:33

IPOs are going to occur. There is

51:35

such a huge backlog. But

51:38

I do think the Democrats want to get this

51:40

moving as well. And I was talking to Reed

51:43

Hoffman and you and

51:45

Peter Thiel in the Illuminati meeting, and they voted 190

51:47

to 2 to replace Leon I'm

51:56

shocked that you weren't there. I'm not invited to that. People

51:58

don't know that you're being facetious, Jason. Oh,

52:00

really? They don't understand that I'm joking about the

52:02

Illumina. They often don't. They often don't. Well,

52:06

I'm sorry to the low IQ listeners

52:08

who don't know that the Illuminati is not

52:10

real. Oh, now you're insulting the audience? No,

52:12

I'm insulting the ones who believe there's an

52:15

Illuminati. He's trying to sell

52:17

tickets to the Jeter stuff. I'm trying to sell tickets

52:19

to the Jeter's Ball. With

52:21

Buck Nasty. Zuck Nasty. Jane

52:24

Cowd is the biggest hater in the

52:26

tech industry. You ever

52:28

see the Haters Ball, Sacks? Chipolsha?

52:33

Chamath, it looks like between the time

52:35

we mentioned it on the pod, it's

52:38

actually happening. Here it is. The Jeter's

52:40

Ball is happening. There it is. Lena

52:42

Khan, David Sacks. Wait, why am I

52:44

there? Because you're a headliner. You're

52:46

organizing. I think you're the host. I'm going to be a

52:48

keynote. You're the MC. Okay,

52:51

wow. I'm the MC. Look, there's

52:54

Zuck Nasty and there's Palmer Lucky.

52:56

You guys don't know this bit from Chappelle? The

53:00

Haters Ball from Chappelle? Oh my god,

53:02

it's the funniest bit on

53:04

Chappelle's show. I

53:07

mean, I saw a lot of Chappelle's show. I remember that

53:09

one. Just show the real picture, Nick. On

53:11

the Chappelle's show, they have all of

53:13

these pimps who

53:15

have a yearly convention, which is their

53:17

player haters' ball. I've seen it.

53:19

And all they do is sit there with

53:22

a toothpick in and they hate on each

53:24

other and make fun of each other. It

53:26

is the funniest bit in the history of

53:28

the Chappelle's show. All right, let's keep the

53:30

train moving here. CRV is

53:33

giving back or maybe not calling down 275 million from their LPs.

53:36

Charles River Ventures, shout out to my pal, George

53:38

Zachary and Greek Brother from CRV. Historically,

53:41

they invest in early stage startups. They

53:43

did DoorDash, Airtable, Twitter back in the

53:45

day. They had two funds that

53:47

they raised back in 2022, billion dollar

53:50

early stage fund and a 500 million growth

53:52

fund. Sometimes people call

53:54

that an opportunity fund or a select fund. The

53:57

New York Times reported CRV is going to give back about

53:59

half a million. that $275 million to

54:02

investors or technically probably not

54:04

call it down. The four partners

54:06

at CRV gave an exclusive

54:08

to the New York Times. So either getting ahead of this

54:10

story or maybe, you know, who knows what

54:12

the motivation here is. But the

54:15

reason they gave is that the market conditions

54:17

for late stage have worsened dramatically, and that

54:19

the valuations are still too high. Yes, the

54:21

rent is too high. And

54:23

that there aren't any exit options, as we just

54:25

talked about with the administration, no

54:28

IPOs, no M&A. And

54:30

that VC map doesn't work in the late

54:32

stage. So I'll just stop there.

54:34

There's a bunch of other notes here. Obviously, this

54:37

isn't the first time this has happened. I think Founders Fund

54:39

cut the size of its eighth fund in half from 1.8

54:41

billion to 900 million. They

54:43

didn't actually give the capital back to

54:45

VCs like they're saying CRV did here. Again, I'm

54:47

not certain if that's what's happened or not. They

54:50

put the extra 900 million into its ninth fund

54:53

if they decide to raise that, which I'm assuming

54:55

Founders Fund will. Chumath, you have any

54:57

thoughts on this?

55:00

I guess we had two stories here.

55:02

So I don't know. Peter Thiel did this, and

55:05

he gave back quite a large

55:07

piece of his fund a couple of years ago, and

55:09

then CRV just did it. I

55:11

want to make sure I get the citation

55:13

right. I think it was Thomas Lafont at

55:15

COTU who said this. It was really powerful. It

55:18

made a huge impression on me, which is that

55:20

the NASDAQ creates about $800 billion

55:23

of enterprise value a year.

55:26

He brought that up in the context

55:28

of private markets have to exceed that in

55:30

order for it to be a real viable

55:32

alternative to just owning public

55:35

indices. So if you

55:37

factor in illiquidity risk and the

55:39

duration, you

55:41

have to probably generate, I don't

55:43

know, a trillion, $1.2 trillion of enterprise

55:45

value in private tech every year.

55:48

That just seems like it's really hard to do.

55:50

Where is all of that value getting created? So

55:54

I think the venture needs to go

55:56

through a phase where it re-rationalizes. This is sort of

55:58

what I said at the end. David's

56:01

LP day, which is I think that

56:03

LPs have made a couple of very

56:05

big mistakes. And

56:07

I think the biggest mistake that they've made is

56:09

by smearing too much money across too many general

56:11

partners. And I think

56:13

if you had to redo it, A,

56:16

it's probably a lot less money in total.

56:19

But B, and the example I

56:21

gave there is instead of giving $50 million

56:23

to Kraft and $10 million to somebody else,

56:25

you're better off giving $60 million to Kraft

56:27

and not even having that other GP. Because

56:30

that GP makes everybody's life complicated.

56:33

They overpay, they mispay, they're probably not supposed

56:35

to be a GP in the first place.

56:37

And so they force returns down. And

56:40

then when you contrast that again to a

56:42

public market that is systematically creating $800

56:46

billion of enterprise value a year, this

56:49

is an incredibly tough game and it's getting much,

56:51

much harder. So I think

56:53

that if you just take a step back, these

56:55

are the right things to do because you're much

56:57

better off having a smaller

56:59

pool of capital that you can concentrate into the

57:01

things that matter. You're probably

57:04

better off having smaller teams versus bigger teams.

57:08

And you're probably better off

57:10

trying to forge LP relationships

57:12

where they're not doing 50

57:16

fund investments because it just makes the

57:18

entire industry lag public

57:21

liquid alternatives. And I think that that's just not

57:23

good. Peanut butter again, spread

57:25

a little bit then there. Any thoughts,

57:27

Freiburg, on this trend,

57:29

if we can call it that? Or

57:32

is this like maybe they're reacting

57:34

right as the market is changing

57:36

and valuations are getting more

57:38

reasonable and the exit opportunities are getting more reasonable?

57:40

It seems like this was the right reaction

57:42

two years ago, but maybe it's the wrong reaction

57:44

now. What do you think,

57:47

Freiburg? For a venture firm to return

57:49

capital, they need to have at least one

57:51

or two big winners. And so if that

57:53

winner needs to be a 10x or 20x or 30x of the

57:55

fund, because most of of

58:00

the investments in the fund are not going to work, you

58:03

need to be able to enter at a reasonable

58:05

price and there needs to be enough opportunity

58:07

relative to the capital trying to invest in

58:09

that opportunity out there for it to make

58:11

sense. So in a market where there is

58:14

excess venture capital, where

58:16

valuations are at a premium,

58:19

and where you don't see the exit path, the

58:21

M&A or the IPO events that make sense that

58:23

you can actually realize that model, you

58:26

should take less capital and

58:28

make fewer surer investments.

58:31

And I think that that's what some folks have realized. They

58:33

don't want to be chasing, you know,

58:36

highly valued inflated opportunities, and

58:39

they don't want to be putting capital into tier

58:41

B or tier C

58:43

opportunities just for the sake of

58:45

deploying capital. This is a really interesting

58:48

moment where you can kind of see who

58:50

are the right folks in terms of

58:52

thinking long-term in Silicon Valley, long-term in terms

58:54

of building an investment practice

58:56

and private venture, and

58:59

maybe who are folks that are trying to

59:01

build their AUM stack. And folks

59:03

who have done reasonably well, like Founders Fund

59:05

has probably the most exceptional track record in

59:07

Silicon Valley as a venture firm. They

59:10

are very cognizant of the market conditions, and

59:13

I think that they're being very smart. By

59:15

the way, the other thing I've heard from

59:17

LPs is they're similarly trying

59:19

to find more concentrated capital themselves.

59:21

So they're trying to put more

59:25

capital to work in fewer managers. And

59:28

so there's a real wheat from the shaft

59:30

moment happening in Silicon Valley venture right now.

59:32

What I think a couple of years ago was, hey,

59:34

everyone's gonna go do a startup. A few years ago

59:37

became everyone's gonna go do a venture fund. And now

59:39

I think the froth that has occurred because of that

59:41

is being cleared out. And to just

59:43

explain this math before I get Sax's thoughts

59:45

on this, if this was a $500 million fund, let's

59:49

say they were putting $25 million into each, we'll

59:53

take management fees out of it, $25

59:55

million into each opportunity at a billion

59:57

dollar valuation, they would own 2.5%, obviously

59:59

of those. firms, they

1:00:01

need to get probably a $30 billion

1:00:04

power law exit of 30X SACs in

1:00:06

order to just return the fund. There'll

1:00:08

be some dilution, obviously, along the way.

1:00:11

That's why it's not 20X. And the

1:00:14

number of companies that go from a billion

1:00:16

to 30 billion per cycle

1:00:18

is incredibly low. Uber,

1:00:21

Coinbase, Airbnb. It's

1:00:24

a really short list, huh? SACs in recent

1:00:26

history? Robinhood? Yeah, I

1:00:28

mean, look, just

1:00:30

go back to the CRV thing. You said

1:00:32

at the outset of the conversation that this

1:00:35

was either a growth fund or an opportunities

1:00:37

fund. That makes a

1:00:39

really big difference. Explain, please. Because,

1:00:41

well, an opportunities fund typically exists

1:00:44

to back up your winners. In other

1:00:47

words, if the venture fund is producing

1:00:49

some big winners, the opportunities fund exists

1:00:52

to deploy more capital into those companies.

1:00:55

As opposed to a growth fund, which is you'd

1:00:57

be underwriting brand new companies from scratch. Typically

1:01:00

an opportunities fund is limited to companies that you're writing

1:01:02

an investor in through your venture fund. So

1:01:05

that makes a big difference. I mean, if CRV

1:01:07

has a billion dollar venture fund and only a

1:01:09

$500 million opportunities fund, it may just

1:01:11

be the case that they don't need all of that

1:01:14

capital to back up the winners. They can do their

1:01:16

pro-rattas out of the main fund. So

1:01:18

I suspect that that might be

1:01:20

what's going on. I actually think this is a pretty good

1:01:23

time to have a growth fund. Well,

1:01:26

because a lot of the crossover capital

1:01:28

has left the ecosystem a few years

1:01:30

ago. Okay. The Tigers and

1:01:32

that sort of cohort, SoftBank, Masayoshi-san.

1:01:35

Yeah. Well, Tiger and SoftBank

1:01:38

are still around, but there are other

1:01:41

very large investors, hedge funds, and so

1:01:43

on who had come into the ecosystem with

1:01:45

billions of dollars a few years ago. And

1:01:47

now they've left. And some of those funds that you're talking

1:01:49

about, like Tiger used to be $10 billion funds, now they're

1:01:51

$2 billion funds. Right. They've been right-sized.

1:01:53

And they're currently doing, I mean, the Tiger deal is

1:01:56

my understanding, was they weren't joining the board in a

1:01:58

lot of the cases and they were out of the

1:02:00

board. outsourcing the diligence and that was a pretty violent

1:02:02

pace. I don't know. Yeah, this is the best time

1:02:04

in probably five years to have a growth fund. Interesting.

1:02:07

But to your point about the size of

1:02:09

the venture fund, the bigger the venture fund,

1:02:11

the bigger the winner that you need to

1:02:13

make that pay off, obviously. Yes. And so

1:02:15

because of the power law, so to take

1:02:17

an example, I don't know,

1:02:19

let's say you've got a billion dollar venture fund, let's

1:02:22

say that at IPO, you own 10% of

1:02:26

whatever that winner is. And

1:02:28

because of the power law, your fund

1:02:30

performance is really determined by your best

1:02:32

outcome, right? Yep. So

1:02:35

in order to take a $1 billion venture

1:02:37

fund and say deliver a 3X, so

1:02:40

3 billion of returns, and your

1:02:42

best company you own 10% of, that

1:02:45

implies you have a $30 billion winner

1:02:47

in that fund. And there are

1:02:49

precious few outcomes where you have a $30 billion

1:02:52

IPO, right? Yeah,

1:02:55

I mean, count them on two hands the last

1:02:58

cycle. You got

1:03:00

Uber, you got Robinhood, you got

1:03:03

Coinbase, Stripe will eventually

1:03:05

come out, you got SpaceX, well that was two

1:03:07

cycles ago, so I mean. Yeah, you're gonna need

1:03:09

to have a meaningful ownership position and a massive

1:03:11

company in order to make a fund that big

1:03:14

payoff. The data that I

1:03:16

think LPs look at shows that smaller

1:03:18

venture funds tend to perform better for

1:03:20

this reason. 500, 600 million dollar funds. So

1:03:25

yeah, I personally wouldn't want the pressure of a

1:03:27

billion dollar venture fund, that would be really hard.

1:03:30

As a five or $600 billion venture fund, you

1:03:33

kinda need to have or wanna have

1:03:35

like a decacorn outcome to

1:03:38

make that a great fund, but to have

1:03:40

to have a $30 billion plus outcome, it's

1:03:43

even more difficult. Moving on, Pew just

1:03:45

published some really interesting research on TikTok,

1:03:48

if you don't know the Pew study, they've been doing

1:03:50

it for decades, it's very well respected, and

1:03:53

bipartisan or nonpartisan. Four in 10

1:03:55

US adults aged 18 to 29

1:03:57

are now regularly their

1:04:00

news from TikTok. Here's some charts for you

1:04:02

to take a look at. As you

1:04:04

can see, the younger generation is really

1:04:06

spending a lot of time on TikTok and

1:04:08

getting a lot of their news there. I

1:04:10

know this because, yeah, I've talked to a

1:04:13

bunch of kids about this. And people

1:04:16

that use TikTok, 52% are regularly

1:04:18

getting their news from the platform. And

1:04:21

that number has skyrocketed compared to other

1:04:23

social platforms. Take a look at this

1:04:25

chart. Here's X. 59% of

1:04:27

people say they get their news at X. It's

1:04:29

really a news platform, so that makes total sense. You

1:04:33

look at Facebook, it's 48% right now. Reddit, 33%. YouTube, 37%

1:04:38

in 2024. Instagram, 40%. But TikTok, 52% up from 22%. So it's

1:04:40

no longer just dancing. And

1:04:46

this is the reason I think many people in

1:04:48

the government were concerned

1:04:50

about the attack vector that the

1:04:52

CCP would have in the United

1:04:55

States since they still control the

1:04:57

company for services like Snapchat, LinkedIn,

1:04:59

and WhatsApp. And Nextdoor, it's

1:05:02

below 30% get

1:05:04

their news from there. They're sure true social there, Saks.

1:05:06

57% of people get news there

1:05:09

in Rumble, 48%. So what's your

1:05:11

takeaway from this, just Saks,

1:05:15

looking at it in this impact that TikTok

1:05:17

has is this concerning on a national security

1:05:20

level since the algorithm is a black box

1:05:22

and you could tweak it if you really

1:05:24

wanted to, to really change sentiment and young

1:05:27

people are obviously very impressionable on this

1:05:29

platform and their big users. Well,

1:05:33

I thought there was other data in the

1:05:35

study that should calm people's fears that TikTok

1:05:37

would somehow be used as a political weapon.

1:05:40

So in the same survey, you're talking about 95%

1:05:44

of adults that use TikTok say they use it

1:05:46

because it's entertaining. So that's the main

1:05:48

reason people use it. And only 10% of

1:05:51

accounts followed by US adults post content

1:05:53

related to political or social issues. Okay,

1:05:56

that's posting and the main reason, right?

1:05:58

Yeah. But so, so basically 90%

1:06:01

of the accounts that get followed

1:06:04

aren't even posting political or social

1:06:06

issues. They're there for entertainment as

1:06:08

people watching dance videos, as

1:06:10

people watching. I mean, the

1:06:13

main thing I use it for is to watch wrestling

1:06:16

highlights. So, uh, you know, wrestling

1:06:19

guy? Yeah, I'm a wrestling fan.

1:06:21

What? Yeah. You're

1:06:23

into this Kabuki theater of

1:06:25

wrestling? This is new information.

1:06:27

I get my WWE on,

1:06:29

uh, on TikTok. Are

1:06:31

you a Hulk Hogan guy? Are you an

1:06:35

undertaker guy? Vince McMahon? I

1:06:37

mean, Jimmy, Jimmy's super fly

1:06:39

snooker. Who are you? Andre the

1:06:41

giant? I know all those names, but I like,

1:06:43

I also love the road warriors. Uh,

1:06:46

ultimate warrior. I loved. I was a huge wrestling

1:06:48

fan. That was the one thing that my dad

1:06:50

and I bonded over. We

1:06:52

would watch wrestling every Saturday. Saks, did

1:06:55

you ever watch the specials on Saturday

1:06:57

night? Like the, oh yeah. Oh, those

1:06:59

are so great. That was the era

1:07:01

of Hulk Hogan for sure. Saturday night's

1:07:03

main event. Randy, Savage Savage.

1:07:05

Yeah. Savage is great. Savage.

1:07:08

Yeah. I mean, look, my, my all time

1:07:10

favorite was stone cold Steve Austin stone cold

1:07:12

is great. I marked out the hardest for

1:07:14

all. He was, he was anti-woke before anti-woke

1:07:16

became a thing. Totally. This

1:07:18

is crazy. You guys are into wrestling.

1:07:20

I love wrestling. I'd say for me.

1:07:23

Wait, wait, hold on. Have you gone

1:07:25

to a wrestling? Did you only like

1:07:27

the WWF at the time or did

1:07:30

you like the NWA? That their moments

1:07:33

when, when Hogan turned heel and

1:07:35

joined the, the,

1:07:37

uh, was it the NWO? That was like

1:07:39

a big moment. I'm a big, uh, Andy

1:07:41

Kaufman wrestling fan. That was my only interest

1:07:43

is when, when Andy Kaufman came in there

1:07:46

and, uh, trolled them. But

1:07:49

yeah, that was like in the 1970s, wasn't it?

1:07:52

Or it was the late eighties. Remember

1:07:55

he was on David Letterman with Jerry

1:07:57

Waller and he, he

1:07:59

comes to a wrestling match,

1:08:01

Zach, in the South. And he

1:08:03

gets in there. That was where I grew up, in my

1:08:05

hometown of Memphis. Right, so he goes there and he gets

1:08:07

in the ring and he says, all

1:08:10

of you rednecks, I wanna show you some

1:08:12

new inventions. This is called

1:08:14

soap and this is

1:08:17

called the washcloth and you use

1:08:19

it to clean yourself. And

1:08:21

he's like just mocking the Southern

1:08:23

accent and Jerry Lala, remember Jerry

1:08:25

Lala smacks him and on

1:08:28

Letterman, oh, it's the greatest business. It was a

1:08:30

huge deal, I mean, where I grew up because

1:08:32

this was like on the local news. Yes. When

1:08:35

I grew up in Memphis, there was no

1:08:38

professional sports teams, okay? All we had was

1:08:40

the Memphis State basketball and

1:08:43

wrestling every Monday night at the Mid-South Coliseum.

1:08:45

That was it, that was like professional sports

1:08:49

in Memphis. You also had probably like some

1:08:51

state fairs or like best

1:08:53

goats, best sheep or something. Lala

1:08:55

was so popular that he could have been elected

1:08:57

mayor. In fact, I think there was talk at

1:09:00

one point of him becoming mayor. Wow.

1:09:03

I mean, the intergender champion, Andy Kaufman.

1:09:05

Did you guys like mouth of the

1:09:07

South? Jimmy Hart, oh yeah, of

1:09:09

course. Yeah, he was amazing. He

1:09:11

was like the main heel manager for a

1:09:13

while. Yeah. This

1:09:15

is before the WWE took over, I guess it was called

1:09:17

WWF back then, but there were all

1:09:20

these little fiefdoms and kingdoms and Mid-South wrestling

1:09:22

was like one of those kingdoms and

1:09:24

Lala was like the king of it and then you had all these

1:09:27

guys come in and out and wrestle. Freiburg,

1:09:30

you ever watch wrestling and what do you

1:09:32

think of this TikTok survey? I

1:09:34

don't watch wrestling. Okay, very good. And

1:09:37

TikTok survey, anything where you know, any

1:09:39

thoughts? Looks like they gathered some reasonable

1:09:42

data. Okay, there you go. There's

1:09:44

your hard hitting. My point

1:09:46

was that it's mostly an entertainment app

1:09:48

where people go to watch dance videos,

1:09:51

wrestling clips, style influencers and so on.

1:09:54

And I think that this idea that it's

1:09:56

somehow a propaganda tool around programming

1:09:58

our youth, I think that's... moral panic

1:10:00

that's been exaggerated. What do you think the

1:10:02

odds are that TikTok is

1:10:05

hacked to allow you to passively listen even when

1:10:07

the app is not being used? Zero. You

1:10:11

think it's definitively zero? No, like five

1:10:13

percent. I think that's very unlikely. Because

1:10:17

someone said that that was, that

1:10:21

was a, there was some code that enabled that

1:10:23

in the early version of the app and then

1:10:25

some other people audited it and they said they

1:10:27

did not find evidence that there's any technology and

1:10:29

Apple's got a very good audit system for this.

1:10:31

Did those same people audit WhatsApp? And

1:10:34

then it turned out that it was passively

1:10:36

listen? Yeah. Does WhatsApp passively listen? Yeah, it's

1:10:38

one of the, it's one of the most

1:10:40

well-known breaches. Well, maybe they

1:10:42

do. Maybe it's, maybe it's 100% certain that

1:10:44

the CCP is using it because they, this

1:10:46

people have tracked already journalists using it. So

1:10:48

if they've already done it, it's 100%. And

1:10:50

I don't know about the passive listening, but

1:10:52

any thoughts on 50% plus

1:10:54

of young people getting their news here, Chamath,

1:10:56

any news on that? I mean, obviously, we

1:10:59

don't have evidence that it's being used currently

1:11:01

to manipulate people, but it's over 50% of

1:11:03

young people are now getting their news there, or

1:11:06

say they're getting their news there. I met more

1:11:08

than 50% of young people are getting their news

1:11:10

from podcasts and those podcasts get chopped up and

1:11:12

clipped and then people watch them on TikTok. For

1:11:14

sure. I bet that's how it's happening. There

1:11:17

are a lot of people who think this show is a

1:11:19

TikTok show and they don't know

1:11:21

it's a big show. We'll have to prepare for a

1:11:25

brave new world in the following way. There

1:11:27

was an article, I think it was in

1:11:29

the Wall Street Journal that said that Russia

1:11:31

and Iran were paying low

1:11:33

level street criminals to create

1:11:36

chaos. Okay. And I read that

1:11:38

article and I thought, okay, well, what

1:11:40

does this mean if you actually extrapolate this,

1:11:42

which is that the

1:11:46

hot wars are very complicated, not worth

1:11:48

doing. These disruptive

1:11:51

fissures are the better way to sow

1:11:54

chaos. And it

1:11:56

occurred to me then that tying this back to something

1:11:58

that we makes sense for

1:12:00

a lot of folks to

1:12:02

sponsor a lot of long tail content that say

1:12:04

a lot of different things. I think that that

1:12:07

just is pretty obvious. And

1:12:10

so I think that if you put these two ideas

1:12:12

together, it stands to reason

1:12:14

that a lot of people will

1:12:17

be paying influencers a lot of money to

1:12:20

create all kinds of content that is

1:12:22

specific to a perspective that they have.

1:12:24

And then on top of that, if

1:12:26

you can algorithmically amplify one over the

1:12:28

other, you know, you're going to have

1:12:30

issues. Is it the biggest issue in

1:12:32

the world? Probably not. It's

1:12:35

probably a swing in election, but it would cause

1:12:38

chaos. And we just had the Southern District of

1:12:40

New York target

1:12:42

that Russian. Russia today

1:12:44

was giving $10 million to four podcasters. They didn't

1:12:47

even know they were getting paid by the Russians.

1:12:49

They just picked them because they liked their opinions

1:12:51

and they gave them a hundred thousand an episode

1:12:53

to promote pro Russian positions.

1:12:55

If the Russians were actually doing it,

1:12:57

it's the stupidest use of $10 million

1:13:00

ever because those podcasters already had

1:13:02

their own channels. They're already putting out lots

1:13:05

of content. And this other content is a

1:13:07

drop in the bucket. I think, Jamath, the

1:13:09

issue with what you're saying is just there

1:13:11

is so much content out there already. People

1:13:14

created for free. People create it, you

1:13:16

know, because they're, they have a career

1:13:18

in it. There's a whole long tail

1:13:20

of influencers. There is so much content

1:13:23

out there already through podcasts, through websites.

1:13:25

It's all being chopped up that trying

1:13:27

to do it as some sort of

1:13:30

disinformation strategy, I think is very hard

1:13:32

to do because it's just when there's

1:13:34

billions and billions of impressions, any

1:13:37

effort that you try to engineer ends up just

1:13:39

being a drop in the bucket. I agree with

1:13:41

that. Yeah, it's definitely a drop in the bucket.

1:13:43

It makes sense in theory, but it

1:13:45

makes sense in theory. It's very hard to do in

1:13:47

practice. Yeah. The goal is not to win

1:13:50

any specific argument. It's to create

1:13:53

mistrust in the entire news ecosystem, in the

1:13:55

information system, so that people give up trying

1:13:57

to figure out what's going on. what the

1:13:59

truth is. And that's what the Russians and

1:14:01

the KGV is doing that on their own.

1:14:04

Yeah. You could argue that.

1:14:06

Sure. As are the

1:14:09

Russians paying off podcasters. Okay. Let's give sex. How

1:14:11

is $10 million going to accomplish anything if that

1:14:13

story's even true? Oh, very simple. Great

1:14:16

question. May I answer it? It's a

1:14:18

great question. It's not a conspiracy theory.

1:14:20

Not a conspiracy of the art at all. These were

1:14:22

very low level, mid like, you know, tier B, D

1:14:25

podcasters. If you give

1:14:28

them $100,000 per episode, they can spend

1:14:30

more money buying cameras, promoting

1:14:32

their shows, hiring people. So you're just finding people

1:14:34

and dropping money on their head so they can

1:14:36

do more of the same. So it's a very

1:14:38

smart strategy. In fact, I think, I

1:14:41

think it's the stupidest thing I've ever heard

1:14:43

that they took podcasters who are already successful

1:14:45

and paid them to release content through a

1:14:47

less watched channel. That's the case.

1:14:49

It was, it was just more about getting the

1:14:52

money to produce more content. And then they in

1:14:54

the, these guys are allegedly, these guys are already

1:14:56

live streaming like 24 seven. Oh, there's

1:14:59

your puppy. Oh, here he goes.

1:15:01

Freeberg trying to win more people over

1:15:03

with his puppy love. Unbelievable. This guy

1:15:05

is absolutely ridiculous.

1:15:09

Unbelievable. All right. Listen,

1:15:11

let me give Sax some red meat here. He got,

1:15:13

he got his little steak Tata with my Russia

1:15:16

today story. Got your little amused bougie.

1:15:18

And now I give you your Tomahawk.

1:15:20

You ready, Saks? You want your Tomahawk?

1:15:23

You want it rare? Here it comes. 2024 election

1:15:25

update, the

1:15:27

betting markets and polling indicate a really

1:15:29

tight race. But maybe Trump

1:15:31

is surging this week. Poly market, which is a

1:15:34

betting market has Trump 55 to

1:15:37

45 versus Kamala Kalshi.

1:15:39

Another betting market, 5248 Trump.

1:15:43

Bovada and points bet. Those are offshore booking

1:15:46

and Poly Market is also offshore. 5248 Trump

1:15:49

Nate Silver, friend of the pod.

1:15:51

His algorithm has it 53 47.

1:15:53

Kamala real clear

1:15:56

polling. That's an algorithm

1:15:58

has Kamala with a two. point lead. New

1:16:01

York Times, Siena, Comela with a

1:16:03

three point lead, Reuters, Ipso, pretty well

1:16:05

trusted. Three point lead for

1:16:07

Comela. NPR, PBS, Maris, Poll has

1:16:10

Comela with a two point lead.

1:16:12

So, Sportbooks and

1:16:14

Betty markets are favoring

1:16:16

Trump slightly, while the

1:16:18

Polls are slightly favoring

1:16:20

Comela. Saks, I

1:16:23

sliced it up nice for you. You got nice 10 slices

1:16:25

of meat here. Which slice you going for? Well,

1:16:28

I think your recitation

1:16:30

of the Polls there kind of mixes up a

1:16:33

couple of things. There's popular vote polls and then

1:16:35

there's electoral college, which goes here by state. If

1:16:37

you look at pretty much now

1:16:39

all the main pollsters, you look at

1:16:41

Tony Fabrizio, you look at Real Clear

1:16:43

Politics, they're now showing that Trump

1:16:46

is winning the electoral college right now. He

1:16:48

is up in almost every swing

1:16:50

state, including I think Michigan,

1:16:52

which is pretty surprising. Clearly, there's been

1:16:54

a huge swing towards Trump over the

1:16:56

last week or two. And look,

1:16:59

there's still 25 days to go, so anything can happen.

1:17:01

I don't want to overstate this, but yeah, this is a good

1:17:03

example right here, showing that Trump now has a lead in that

1:17:05

recitation. I think the electoral college is 296

1:17:08

to 242. What is Fabrizio? He's

1:17:11

just a Republican pollster, but his accuracy is pretty high.

1:17:13

Oh, okay, he's a Republican. I've never heard of him.

1:17:15

Fabrizio. Well, another guy who

1:17:17

I think is more neutral is Mark Halperin,

1:17:19

who is a pundit who has been very

1:17:22

accurate this election cycle. Remember, he's the one

1:17:24

who broke the scoop that

1:17:26

Biden would be replaced by Harris. And

1:17:29

he even said exactly when it would happen. And

1:17:33

he predicted it down to the day. He was

1:17:35

exactly right about that. And if you follow

1:17:37

his account, he is now saying that both

1:17:41

Republican and Democrat insiders that he

1:17:43

talks to are both saying

1:17:45

the same thing, which is their internals are now

1:17:47

showing Trump ahead in

1:17:49

every swing state or almost every swing state. And

1:17:53

things seem to be breaking Trump's way right now.

1:17:55

Again, there's 25 days left. But if

1:17:57

you're wondering why is Harris all of a sudden interviews

1:18:01

is because their internals started showing that she

1:18:03

was in trouble so they decided to get

1:18:05

her out more. And the other way is

1:18:07

it that the her Howard

1:18:10

Stern interviews or whatever are causing her to lose votes?

1:18:12

Well yeah exactly well so which one is it do

1:18:14

you think because I don't know when I don't have

1:18:16

the dates of all these polls versus that. No I

1:18:18

think it's what I predicted a couple of months ago

1:18:20

it's the doom loop so what I said two months

1:18:22

ago is that if Harris gets behind

1:18:24

she's gonna have to abandon this sort of basement

1:18:27

strategy not doing interviews she can have to start

1:18:29

doing interviews the problem is she's not good at

1:18:31

interviews and if she does more interviews she's gonna

1:18:33

fall further behind in the polls and

1:18:35

it could cause a doom loop. So that's where

1:18:38

we appear to be right now I said that on

1:18:40

August 30th. Okay Chamath you know that's

1:18:43

I think that Donald Trump has basically stuck

1:18:45

to his strategy which is he is

1:18:49

a generational

1:18:51

retail politician I

1:18:54

just heard parts of what he did

1:18:56

with Andrew Schultz another

1:18:59

great sort of you know podcast

1:19:02

I think David's right that the

1:19:05

editing and the massaging of the

1:19:07

Kamala Harris talking points are

1:19:11

galvanizing the people that have already decided and turning

1:19:13

off the people that have already decided to vote

1:19:15

for Trump and she's losing the folks in the

1:19:17

middle and so this is what's causing

1:19:20

her to have to be out there and

1:19:22

and she's gonna have to deliver a very crisp message

1:19:27

and I think that right now it's been a

1:19:29

little bit lacking which is why you're seeing the

1:19:31

polls at least

1:19:33

the Electoral College which is really what matters at

1:19:35

this point turn Trump so

1:19:40

she's gonna have a bit of an uphill fight between

1:19:42

here and November the other thing I'll say is that

1:19:44

if you've seen what's happening in the appellate court

1:19:47

it's not clear whether the the Trump case

1:19:51

is gonna get overturned before the

1:19:53

election but if that does that

1:19:55

could be very meaningful momentum for him

1:19:57

and then I think the third

1:20:00

thing is that we should now buckle

1:20:02

in because if the last two

1:20:04

elections are any guide, there are

1:20:07

going to be a bunch of

1:20:09

spanners in the works between now and November.

1:20:11

Wait, what did you say? Spanners? Spanners

1:20:13

in the works. Yeah. What does it mean? Rent,

1:20:15

what do you call it? Rent in the system?

1:20:18

You mean like an October surprise? You mean like

1:20:20

some crazy turn of events? Okay. Freiburg,

1:20:22

any thoughts here? Would you like to Roshak

1:20:24

test this and see what you want in

1:20:26

the numbers? Or do you have

1:20:28

some objective thoughts here? What's your take? You

1:20:33

know there's some polling data? Oh yeah. Where

1:20:35

we're at in the election, pretty open-ended here. You

1:20:37

can look at the, you can make a

1:20:40

note on overall what you

1:20:42

see between the betting markets and the

1:20:44

polls and that disparity.

1:20:47

You could just talk generally about where you think we are. You

1:20:49

could talk about Kamala on Howard Stern

1:20:51

and doing a bunch of interviews with friendlies.

1:20:53

Where are you at right now? Joe

1:21:25

Biden when pushed on that. It's

1:21:27

very strange. Yeah, no, she definitely did

1:21:30

the most favorite shows. I wish she would do

1:21:32

some challenging shows. I think she's got to do

1:21:34

Joe Rogan, All In, and what

1:21:36

would be another good podcast for her duchama

1:21:38

if she really wanted to like do

1:21:40

the adversarial thing or something more? Talk to us. Why would she

1:21:43

do an adversarial interview? Why would she do an adversarial interview? Just

1:21:45

come to All In. Come and have a conversation. Come and have

1:21:47

a normal conversation here, yeah. No, I'm just thinking

1:21:49

like it seems like sex,

1:21:52

if she comes and has a conversation,

1:21:55

you'll be respectful. Yeah. This

1:21:57

whole idea that I didn't treat Cuban respectfully is not. nonsense.

1:22:00

Just watch the tape. I don't keep all

1:22:02

that. Somebody asserted

1:22:05

that. No, I mean,

1:22:07

that all if

1:22:09

you look back on every single presidential related one

1:22:12

we did here, they were all respectful. And

1:22:14

they were all conversations. I think that Cuba one dipped

1:22:16

because of both of you into a bit more of

1:22:18

a debate. And it was a lot more crossover than

1:22:20

the other one. That that's what I

1:22:24

agree back to him. He likes to come out. He

1:22:26

likes to do his thing. Yeah, that's exactly what you

1:22:28

look at all the other ones. I'm trying to think

1:22:30

of a moment where it if

1:22:32

you look at the other D&B

1:22:34

Phillips, Chris Christie, the Vivek boring,

1:22:36

got to go. Love you guys.

1:22:40

This has been another amazing episode

1:22:42

of the all in podcast episode

1:22:44

199. Make sure you

1:22:46

go to all in.com/meetups. Make

1:22:48

sure if you're starting a company, you go to

1:22:50

founder dot university. If you're an engineer, what are

1:22:52

you doing? Let's go to I'm doing whatever the

1:22:54

please. David Sachs, make sure

1:22:56

you go to super glue

1:22:59

AI if you're an engineer and if you

1:23:01

like potatoes, go to a hollow calm and

1:23:03

order your potatoes pre order a subscription. I

1:23:05

mean, if we're doing it, sell some let's

1:23:07

sell some super 8090

1:23:10

8090 control. We'll see everybody next time on the

1:23:12

all in.

1:23:23

Rain Man David and

1:23:27

it said we open source it to the fans and

1:23:29

they've just gone crazy with it. Love you.

1:23:32

I squeen of Ken. Besties

1:23:40

are gone. My

1:23:43

dog taking a notice your driveway.