Hurricane fallout, AlphaFold, Google breakup, Jayter's Ball, VC giveback, TikTok survey

00:00:00.000 | Alright, everybody, welcome back to the number one science,

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00:02:22.760 | Speaking of that, your people use me in an ad reberg. So don't

00:02:37.960 | talk about plugs.

00:02:39.080 | A few weeks ago when I shouted out that glue AI was hiring

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00:02:45.680 | From looking for engineers like on the show. Yeah. For glue AI.

00:02:49.560 | Yeah. Right. That's awesome for glue AI. And if you haven't

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00:03:12.920 | more Xanax to deal with your panic attacks. All right, let's

00:03:15.960 | get started. Enough of the shenanigans hurricane season is

00:03:20.600 | upon us as free bird have predicted Hurricane Milton made

00:03:25.200 | land fall on Wednesday evening, along the west coast of Florida

00:03:29.400 | as many of you know, it's been downgraded. It started as a

00:03:34.000 | category five potentially than a category three and then it looks

00:03:37.160 | like it's a category one now. So I guess these things are quite

00:03:39.760 | random. Leading up to Milton, those 6 million Floridians

00:03:44.760 | across 15 counties were ordered to evacuate. That's a lot of

00:03:48.400 | people moving out. And it was a pretty powerful storm. It ripped

00:03:52.160 | off the roof of the Tropicana field in Tampa. So far, the

00:03:56.760 | death toll is at four, but it's expected to rise sadly. And just

00:04:01.080 | two weeks ago, Hurricane Helene swept through six southern

00:04:04.560 | states killing over 220 people tragically devastating western

00:04:09.120 | North Carolina and entire towns were wiped out. These are also

00:04:15.160 | beyond the tragic human losses are economically staggering. In

00:04:20.240 | terms of the losses, Accuweather estimating the total economic

00:04:23.800 | damage could be between 145 and 160 billion propellant and Moody

00:04:28.800 | estimates the property damage alone could be as high as 26

00:04:31.800 | billion tons to get into here FEMA starling saving the day

00:04:36.320 | tons of stuff. But freeberg back on Episode 182, you predicted

00:04:39.600 | this would happen. What's causing all this? And let's just

00:04:42.840 | start with the science angle, I guess, before we get into the

00:04:44.880 | other political and insurance issues.

00:04:48.880 | Well, I think if you'll remember, when we talked about

00:04:51.720 | this a couple months ago, the sea surface temperature was at

00:04:55.840 | kind of a record high in the Atlantic. And warm ocean

00:04:59.920 | temperatures, drive moist air up that evaporates, the warmer the

00:05:06.200 | air, the faster the evaporation, and that starts to cause the

00:05:10.160 | movement of the air, which drives ultimately the hurricane,

00:05:12.720 | and then the hurricane sucks up more warm, moist air from the

00:05:16.320 | ocean, and it creates a feedback loop. So the more energy you

00:05:18.920 | have in the ocean, the more likely you are to accelerate

00:05:22.360 | wind forces in storms. And that's why you get these massive

00:05:26.040 | hurricanes that suddenly form seemingly overnight, and go like

00:05:30.320 | in the case of Helene, that hurricane went from a cat to to

00:05:34.360 | a cat four or cat five in like 48 hours. Because of the energy

00:05:39.280 | that's sort of a 90%. Here's an interesting stat 90% of the

00:05:42.320 | energy that we get from the sun is absorbed and stored in our

00:05:46.080 | oceans. The other kind of fact that's playing into this if you

00:05:48.680 | pull up that science that nature article, and this is something

00:05:51.440 | that I think you guys may remember we talked about. So

00:05:54.120 | this was an article that came out a paper science paper that

00:05:57.760 | came out a couple of months ago. And in this paper, the

00:06:01.480 | scientists identified that removing sulfur dioxide from

00:06:05.440 | cargo ships that travel across the oceans is actually causing

00:06:09.880 | accelerated warming in the oceans. And the reason is that

00:06:14.280 | the sulfur dioxide forms cloud formations, and those clouds,

00:06:18.520 | they travel across the oceans, and those cloud formations

00:06:21.120 | reflect sunlight. And in the absence of those cloud

00:06:24.200 | formations, that sunlight makes its way into the ocean, and you

00:06:27.400 | get more ocean warming. And by their estimation, removing

00:06:32.440 | sulfur dioxide, which causes acid rain, and that's the reason

00:06:36.240 | it's been pushed to be removed. And they started removing it in

00:06:39.200 | 2020 2021. From cargo vessels by removing sulfur dioxide, we are

00:06:44.640 | now going to see a doubling of the rate of warming of the

00:06:48.440 | oceans in the 2020s. And going forward,

00:06:50.840 | let me pause there for a second, just to make sure people

00:06:53.640 | understand what you're saying emissions from cargo ships

00:06:56.800 | block sunlight, which then of course, reduces the heat

00:06:59.760 | absorbed by the oceans. And so we're now choosing between

00:07:03.880 | pollution of the air, or overheating of the oceans. Am I

00:07:08.440 | correct in summarizing that?

00:07:09.720 | That's roughly it. And

00:07:12.560 | what is the pollution again? Sorry, I just saw

00:07:16.040 | it's a mission oxide. Yeah, that goes into the fuel of cargo

00:07:20.600 | vessels. And a couple of years ago, they started to implement

00:07:24.120 | these mandates that sulfur dioxide no longer be used in the

00:07:26.960 | fuel. As a result, when sulfur dioxide is emitted from these

00:07:31.440 | vessels, it goes into the atmosphere. And it actually

00:07:34.600 | triggers cloud formation. So now you have these clouds that are

00:07:37.840 | forming. And Nick's gonna pull up this image right now. Yeah,

00:07:40.320 | here you can see that. So all of these tracks are these cargo

00:07:44.160 | vessels moving across the ocean. And as they move across the

00:07:46.520 | ocean, they create cloud cover, cloud cover actually reduces the

00:07:51.120 | warming in the ocean because it reflects sunlight. So now that

00:07:54.080 | sunlight energy gets absorbed into the ocean. So this is

00:07:57.000 | another driving force that some people are now speculating,

00:07:59.760 | maybe accelerating the warming of the oceans that we're seeing,

00:08:02.920 | which drives these extreme storm and hurricane events. And so

00:08:07.400 | this becomes a more frequent event. Now, a lot of people

00:08:09.600 | sorry, can I ask you a question? Does that mean that we're mean

00:08:12.160 | reverting? Meaning? If we improve the quality of the fuel

00:08:16.560 | source that are used in shipping? Doesn't that then mean

00:08:21.440 | that we're reverting back to what would have happened in the

00:08:24.080 | absence of these dirty fuel sources? Yeah. So in addition,

00:08:29.040 | no, no, I'm asking, I'm asking you the question. Is that true?

00:08:31.880 | Or not? So, yes, we are no longer reflecting as much

00:08:37.120 | sunlight. And so for several decades, we had bad fuel. So we

00:08:41.440 | had artificial cooling, we had an artificial cooling. And now

00:08:45.160 | we take but that's counter to the narrative of what we all

00:08:47.960 | think is happening. Oh, well, the argument is that we've

00:08:51.360 | actually been warming the atmosphere, which we have been

00:08:53.880 | we can see the data that shows that everywhere all over the

00:08:56.360 | earth, not just about sunlight coming in on the oceans, and not

00:08:59.040 | just ocean warming. But the the atmosphere is warming, the

00:09:02.640 | planet is warming. And so this is by by blocking the sunlight

00:09:07.120 | above the oceans, we were artificially dampening that

00:09:10.000 | effect. And we were reducing the amount of heat energy that was

00:09:13.120 | getting into the oceans. So now by taking that away, we're

00:09:16.280 | seeing the heat energy in the oceans accelerate. And now the

00:09:19.200 | oceans are getting much, much warmer.

00:09:20.600 | Right? So the pollution was good.

00:09:22.240 | Turns out, it was a paradox here, is that it was creating a

00:09:26.520 | blocker for sunlight. And to your point, Chamath, exactly

00:09:30.560 | like, shouldn't we just be going back to what was normal, but at

00:09:32.600 | the same time, in the same system, we had heated things up.

00:09:36.480 | So this is a multi factored system that we're dealing with

00:09:41.080 | Friedberg. And I guess the takeaway from all of this is

00:09:43.680 | that we got to be really careful with what we do with the

00:09:46.600 | environment, right?

00:09:47.360 | Well, I mean, let's talk about economics, right? So what, how

00:09:51.440 | much real estate do you guys think is on the Florida coastline?

00:09:54.120 | What's the real estate value?

00:09:55.800 | Sorry, Friedberg, can you just anchor this like, was it that it

00:09:58.440 | was supposed to be a category five, and now it's a category

00:10:01.480 | three when it hit land?

00:10:02.680 | Right. So what happens typically, when storms hit land

00:10:05.200 | is they no longer have that hot ocean pumping energy back into

00:10:08.360 | the storm that keeps the feedback loop going. So the

00:10:11.080 | storm cycle starts to break down all hurricanes, when they hit

00:10:14.480 | land, they start to break apart. And so the category, which

00:10:17.440 | measures the wind speed actually reduces, this is just a natural

00:10:21.680 | thing that happens. But this was a category five hurricane, when

00:10:25.320 | it made landfall, I believe it was category four. So, you know,

00:10:29.640 | it was a massive hurricane.

00:10:31.200 | We should not dismiss it, because my understanding was

00:10:34.360 | Helen was cat four, when it like hit North Carolina. But I read

00:10:41.160 | yesterday that

00:10:41.920 | what happened, yeah, what happened with Helen was it was

00:10:44.200 | cat four

00:10:44.920 | is cat three when it hit Tampa or something. Is that not?

00:10:47.520 | Yeah, yeah. So that's right. But what happened when Helene hit

00:10:50.320 | North Carolina was not a cat four. What happened is, as that

00:10:54.200 | storm moved inland, it hit the mountains and the first mountains

00:10:59.000 | it hit are on Western North Carolina, that area is elevated,

00:11:02.600 | there's mountains there. So when a heavy hot storm runs into cold

00:11:06.480 | mountains, all the moisture dumps out, it's like it runs into it.

00:11:09.800 | And suddenly everything precipitates out of that storm.

00:11:12.120 | And that's why some parts of Western North Carolina got like

00:11:14.760 | 18. Some high, some people measured as high as 30 inches of

00:11:18.440 | rainfall in a couple of hours. So this insane dumping happens

00:11:22.040 | when that hot air hits cold, it hits a cold region. And suddenly

00:11:25.200 | everything all that warm moisture precipitates out and

00:11:27.640 | dumps to the ground. So it ran into a mountain. It's

00:11:30.160 | effectively why everything fell out in North Carolina.

00:11:32.600 | Right. So you're saying that it wasn't Democrats who basically

00:11:36.160 | right?

00:11:37.760 | Nancy Pelosi cast a spell or something.

00:11:44.840 | Yeah, well, isn't there a lot of geoengineering conspiracy

00:11:47.920 | theories going on in your cohort? I mean, what's

00:11:50.600 | I don't think so. But the node wants us to be very clear that

00:11:54.720 | we need to, we need to stop all this disinformation that somehow

00:11:58.680 | Democrats were behind that storm. Well, there are we can

00:12:01.720 | assure everyone that it was just a lot of online that there's a

00:12:05.120 | ton of lazy geoengineering being run by government agencies to

00:12:09.600 | drive these people aren't taking that seriously.

00:12:11.360 | Well, I mean, the the origin of this, though, free bird is

00:12:16.160 | people have done experiments for decades on trying to control the

00:12:19.840 | weather or, you know, alter the weather. And they're doing that

00:12:22.920 | in the Middle East by seeding clouds and creating more rain.

00:12:25.800 | We saw that with the Dubai floods, they said that that

00:12:28.240 | might have been caused by overseeding of clouds, which

00:12:31.080 | they're doing there. And then there have been experiments,

00:12:33.440 | just to, you know, for the crazy laser people conspiracy there,

00:12:37.600 | it's there are some x, there actually have been experiments

00:12:40.880 | with lasers, you know, being shot into hurricanes and storms,

00:12:44.680 | correct?

00:12:45.200 | Are you Alex Jones? Is that what we're doing? Well, no, we're

00:12:49.760 | not saying Alex Jones, but I'm just saying that's the origin of

00:12:52.560 | where people are kind of building on this. There have

00:12:54.360 | been the amount. Okay, so so let's just talk about the

00:12:56.920 | hurricane, the amount of

00:12:58.120 | teeing it up for you to debunk is what I'm doing here. Yeah.

00:13:00.600 | Putting particulates in clouds to accelerate precipitation is I

00:13:05.040 | mean, we've done that for 100 years, you know, you can do, you

00:13:07.840 | can increase the precipitation rate when there's already clouds

00:13:11.000 | that have formed. But that has nothing to do with creating 200

00:13:14.600 | mile an hour wind speed, that requires an extraordinary amount

00:13:18.320 | of energy, all of this energy that the oceans are like giant

00:13:21.760 | giant batteries. And when a hurricane gets going, that

00:13:24.720 | battery is accelerating the hurricane and the hurricane

00:13:27.440 | sucks up more power from the battery. And it creates this

00:13:30.080 | incredibly dynamical system, there is no human created energy

00:13:33.120 | system that can force form a hurricane. A hurricane is an

00:13:36.800 | extraordinarily powerful natural phenomenon that arises from the

00:13:39.600 | amount of energy that can come out of very, very, very hot

00:13:42.480 | oceans, relatively speaking. So you know, that's really where

00:13:45.680 | these hurricanes are coming from. Now, they're going to be

00:13:47.760 | more frequent if the ocean temperatures remain elevated as

00:13:50.600 | they seem to be, and continue to be elevated. And this can be a

00:13:53.640 | function of generally, the temperatures warming on Earth,

00:13:57.440 | generally, the removal of sulfur dioxide, generally, these El

00:14:00.640 | Nino La Nina cycles, there's a lot of factors, but it seems to

00:14:04.400 | be the case that we are having a very significant trend of

00:14:08.160 | continuously warmer oceans. And those continuously warmer oceans

00:14:11.440 | means that we're going to have what used to be called a one in

00:14:13.720 | 500 year storm, which is what Asheville is being termed at one

00:14:17.000 | in 500 year, these sorts of storm events can happen every

00:14:19.720 | couple years. And we're now looking at one in 100 year

00:14:22.480 | events happening every two to three years, in the United

00:14:25.400 | States with the the hurricane activity that we've been seeing,

00:14:28.080 | I think a lot of the conspiracy theories are built on actual

00:14:30.960 | experiments that happened this one project storm fury, I'm sure

00:14:33.960 | you know, about was to try to modify hurricanes by putting in

00:14:38.960 | some chemicals that would freeze them and dull them. So they're

00:14:43.160 | kind of building break it apart. Yeah, break it apart. So, you

00:14:46.520 | know, there, there, there have been experiments here with

00:14:49.000 | altering weather, altering hurricanes, but that doesn't

00:14:51.800 | mean it's Putin Pelosi, or, you know, the Illuminati. So let's

00:14:56.560 | let's get back to brass tacks. So yeah, let's talk about the

00:14:59.320 | economics. So there's, there's 500 billion to a trillion

00:15:02.000 | dollars of real estate value on the Florida coastline. And what

00:15:05.600 | used to be a one in 100 year event, the average Florida

00:15:07.760 | homeowner historically has been paying about 1% of the real

00:15:10.200 | estate value and insurance. So now if your real estate is

00:15:13.760 | likely to be wiped out, one out of every 20 years, instead of

00:15:18.040 | one out of every 500 years, the cost of insurance gets to the

00:15:21.720 | point that it is untenable for most people to pay for their

00:15:25.680 | insurance. Florida has a state backed reinsurance provider

00:15:28.600 | called the Florida hurricane catastrophe front fund. And this

00:15:32.640 | fund issues debt to meet its coverage demands because it

00:15:35.440 | reinsures insurance companies in order to incentivize them to

00:15:39.360 | come into the state and under you should explain the loop

00:15:43.040 | here, which is you go and get a mortgage. The bank says you need

00:15:47.560 | to get insurance if I'm going to lend you the money to buy the

00:15:50.280 | home. So then a bunch of insurers need to decide that

00:15:54.120 | they're willing to underwrite that area. And then when they

00:15:56.960 | give you that insurance, they then want to lay that risk off

00:15:59.600 | and go to reinsure. Is that the cycle?

00:16:01.520 | That's right. And what's happening is they would normally

00:16:04.600 | underwrite that risk, they would say this is going to cost,

00:16:07.800 | you're going to lose the value of your home every 100 years or

00:16:10.400 | every 200 years. But now, the models are showing because of

00:16:14.680 | the frequency of these sorts of hurricane events and the

00:16:17.080 | severity of the hurricane events, that maybe you'll lose

00:16:19.720 | the value of your home once every 20 years or once every 30

00:16:22.280 | years. And no consumer is going to be willing or able to pay

00:16:26.320 | that much for the insurance on their home. So the state over

00:16:29.920 | the last several years has had to step in and effectively

00:16:32.800 | subsidize the insurance. And now the state reinsurance vehicle

00:16:36.880 | only has statutory liability maximum of $17 billion in a

00:16:42.520 | single hurricane season. Now, I think they got lucky with

00:16:45.400 | Milton today, but some were estimating that the Milton

00:16:47.960 | losses were going to be in excess of 100 billion bigger

00:16:50.360 | than Katrina. It's likely as of this morning, the reinsurance

00:16:53.760 | websites are all saying it's probably a 40 to $50 billion

00:16:57.400 | loss event, which still exceeds the state's reinsurance

00:17:00.520 | capacity. So you can kind of think about Florida state's

00:17:02.960 | reinsurance thing being effectively bankrupt, it

00:17:05.360 | doesn't really have the capacity to underwrite the insurance

00:17:08.440 | anymore. So the real question for everyone is, is the federal

00:17:11.680 | government going to have to step in and start to support the

00:17:14.800 | price of homes? Because if they don't, well, it's a terrible

00:17:16.960 | precedent to set, because if you do it for Florida, then you'll

00:17:21.160 | have to do it in Texas and Louisiana and Mississippi,

00:17:23.720 | California with wildfires, Arizona, there's there and Texas,

00:17:27.480 | there's going to be no way to create a clear demarcation of

00:17:31.160 | who gets a bailout and who doesn't win, which which will

00:17:33.600 | mean that everybody will get a bailout, or nobody gets a

00:17:36.200 | bailout. That's right. And if everybody gets a bailout, and if

00:17:39.120 | you think about how systematically unpredictable,

00:17:41.600 | at least in the southern states, the weather is you're going to

00:17:45.000 | be talking hundreds of billions of dollars a year, probably, the

00:17:48.360 | total value of all mortgages and home homeowner mortgages in

00:17:51.240 | Florida is $454 billion. And those people typically have, you

00:17:56.080 | know, a debt to equity ratio, probably on the 50 to 80% range.

00:17:59.440 | So if the value of your home dips by 25%, because everyone

00:18:02.800 | starts selling their homes leaving Florida, or they can't

00:18:04.680 | get insurance, then the people that live in Florida, most of

00:18:08.800 | them have their network tied up in their home, are going to see

00:18:11.160 | their personal net worth wiped out or cut in half. So it's not

00:18:14.600 | just an economic problem, it's a social problem, that now there

00:18:17.720 | are so many people that have put their entire net worth into

00:18:20.080 | their home, the value of their home is written to a point that

00:18:22.920 | it no longer makes sense, given the frequency at which homes

00:18:25.240 | are going to get destroyed.

00:18:26.560 | That's probably the reason why they'll have to do it because

00:18:29.960 | they'll actually, but then that calculation will have to happen

00:18:32.680 | for every single homeowner in every single state at where this

00:18:36.280 | is a this is an issue.

00:18:37.400 | Yeah, wait, free bear, are you saying the entire Florida coast

00:18:40.800 | line is no longer economically viable?

00:18:43.000 | No, it's totally viable. It's just the question is, what are

00:18:46.040 | you willing to price? At what price? Will you pay 5% of your

00:18:49.560 | home value for insurance every year? You know, when you pay 2%

00:18:53.040 | 3%

00:18:53.600 | if the expected life of a house is 20 years, then no, that's not

00:18:58.880 | that's not viable.

00:18:59.880 | It becomes very, very untenable.

00:19:01.560 | Well, it used to be one in 500 year now.

00:19:03.640 | Does this apply to the entire coastline or just parts of it?

00:19:08.600 | Well, I mean, you saw that the range at which these events can

00:19:11.240 | happen is all over the place. And the and the challenges the

00:19:13.880 | events are getting more significant.

00:19:15.560 | Because of this warm ocean weather that we see this warm

00:19:20.000 | ocean temperature, so we're gonna see more is free bird is

00:19:22.760 | that now people are building the first couple of floors in high

00:19:26.040 | rises in Miami, and homes on stilts with concrete, and with

00:19:31.000 | resistant, you know, saltwater resistant material. So there is

00:19:33.720 | a counter to this. So we might be looking at investment in

00:19:36.640 | climate resilience. That's right. Yeah. So

00:19:38.240 | it might actually be an opportunity to upgrade all these

00:19:41.320 | homes to resistant ones using another set of technologies. But

00:19:45.240 | the bailout is really interesting to sacks, because

00:19:48.000 | Florence got a lot of electoral college votes, doesn't it? Like,

00:19:52.240 | I hate to bring this back to politics. But, you know,

00:19:56.720 | promising people bailouts is how these politicians seem to be

00:20:00.800 | getting votes.

00:20:01.640 | These days. And is anyone talking about a federal bailout?

00:20:04.720 | Is that this is something you're

00:20:06.160 | I think what free brick is saying is that there's a there's

00:20:08.600 | a pretty obvious parade of parables here where the question

00:20:11.920 | will have to be answered one way or the other. Because if you

00:20:15.080 | only have a $17 billion reinsurance fund, and there's

00:20:18.120 | 50 billion of damage, somebody is going to have to come in and

00:20:21.480 | cover the gap. And if it's the insurance companies, expect your

00:20:25.000 | insurance premiums to double or triple.

00:20:27.000 | That's right. And that's what happened in California. And by

00:20:29.360 | the way, State State Farm left a lot of California.

00:20:32.240 | This is what I was gonna say. Most of these big insurance

00:20:34.720 | companies have already done the calculus to realize that these

00:20:37.600 | regions are no longer profitable enough to justify the downside

00:20:41.040 | risk. 100% bigger problem. So then the ones that are left are

00:20:45.200 | insolvent reinsurers or insurers that are just funding short term

00:20:49.560 | ARBs because they know that the odds are they're going to get

00:20:52.000 | wiped out. So they'll price gouge effectively. So, you know, a

00:20:54.920 | different example is that here where I live in Menlo Park,

00:20:58.160 | we're not in a floodplain. We're not in a fire region, none of

00:21:02.360 | that stuff. But in order for us to get home insurance, you have

00:21:07.280 | to now go through a risk assessment. And in our specific

00:21:11.040 | case, we were like, hey, what should we do with our roof? And

00:21:13.720 | they were like, you got to take the roof off if you want home

00:21:16.320 | insurance. We're like, well, home insurance is probably a

00:21:18.080 | good thing to have.

00:21:18.760 | Was it a wood shake roof on your house?

00:21:20.600 | It was a beautiful, you saw our house, it's a beautiful wood

00:21:22.760 | shake roof, and we had to remove it. And the two choices were a

00:21:25.760 | $350,000 like iron composite materials. Yeah. Or, or like 70k

00:21:31.400 | for composite. And it's like, this is insane. And the cost of

00:21:36.520 | insurance was just egregious in the absence of going in one

00:21:41.160 | anyways, we ended up getting the

00:21:42.400 | for most homeowners, when the cost of insurance gets to a

00:21:44.800 | certain threshold, you don't have budget for it, you can't

00:21:46.760 | afford it. And so that's a lot of why the insurers leave,

00:21:49.040 | they'll underwrite anything at any price, but they just know

00:21:51.080 | that most consumers can't afford it. Here's some other

00:21:52.880 | interesting statistics, related but unrelated. In the early

00:21:56.120 | 1900s, the city of Phoenix, Arizona averaged five days a

00:21:59.520 | year of temperatures of 110 degrees or warmer. By the 2010s

00:22:04.600 | Phoenix averaged during the 2010s 27 days a year, or the

00:22:09.040 | temperature was 110 or higher. Since 2021. Phoenix average

00:22:14.720 | hundred plus days 42 days, and in 2024. It's been 70 days so

00:22:19.560 | far this year, that the temperature is over 110. So this

00:22:22.920 | is affecting and so there's there's increased risks in

00:22:24.920 | California with wildfires increased risk with hurricane,

00:22:27.360 | there are a lot of these factors. And I have friends that

00:22:29.720 | work in reinsurance and in the insurance markets.

00:22:32.200 | Even even if you don't get affected by a wildfire or

00:22:34.880 | disaster, when that that article was in the Wall Street Journal,

00:22:38.520 | it I think it said that the number of average days above 100

00:22:42.320 | was like 100 something. Yes. And, and the profile, they

00:22:45.600 | profile this retired woman who is an insurance adjuster or

00:22:48.880 | something. And the whole point of the article was not that her

00:22:52.000 | her house was destroyed or at risk, but the cost of

00:22:54.480 | electricity has gone just absolutely sky. Yeah. Even with

00:22:57.920 | solar panels, even with storage, you need to basically lean on

00:23:02.200 | the grid. And the grid now just charges you an exorbitant amount

00:23:06.360 | of money. And so these, these folks are paying 1000s of

00:23:09.240 | dollars a year. So if you imagine the trifecta, you have

00:23:13.400 | all of this climate risk that could destroy your home, you're

00:23:16.920 | paying an enormous premium for home insurance, and then you're

00:23:19.880 | paying an enormous premium for electricity from the mainline

00:23:23.600 | power utilities. It's it's not sustainable. Yeah.

00:23:26.800 | And just for background, FEMA manages something called the NF

00:23:31.440 | IP national flood insurance plan. And it's historically

00:23:36.480 | about 50% cheaper than private flood insurance. They have 4.7

00:23:40.720 | million active policies providing 1.3 trillion in

00:23:44.040 | coverage. But they instituted a new risk assessment system and

00:23:48.200 | that caused rates to increase. And yeah, it's because of all

00:23:53.960 | this, the policies have decreased over the last couple

00:23:56.520 | of years, meaning less people have flood insurance at the same

00:23:59.400 | time that these things are getting worse. And so, yeah,

00:24:04.520 | this is a really tough issue. I wonder if this is an

00:24:07.720 | opportunity tomorrow. If you think about historically how

00:24:13.200 | insurance worked, it worked in communities where people would

00:24:16.000 | help each other out to barn raising kind of events when

00:24:20.000 | somebody had a problem. So if we just put on our entrepreneurial

00:24:22.880 | hats here, if you look at the cost of insurance, if 100

00:24:26.880 | different people bundle the cost of their homes together, put

00:24:29.880 | money into some sort of platform, like an Uber, Airbnb

00:24:33.520 | marketplace, and there was some management structure here of

00:24:36.360 | self insurance, because I know some people are doing self

00:24:38.520 | insurance for healthcare at their companies for this kind of

00:24:40.800 | thing. Do you think there's going to be a new business

00:24:44.560 | opportunity here?

00:24:45.480 | That's called Jason, it's called a mutual. And those are

00:24:49.120 | like a good chunk of the industry are mutuals, where it's

00:24:52.640 | the shareholders are the members and they all share the risk and

00:24:56.040 | the ownership.

00:24:56.520 | Those problem is those things work because you have broad

00:24:59.160 | geographic coverage. If you had to go just into Malibu and

00:25:02.160 | self insure, the rates would literally be greater than the

00:25:07.080 | value of the home, right? No one would pay into it. So if you do

00:25:10.200 | proper underwriting, what's happened in the last couple of

00:25:12.400 | years is all the reinsurance companies and all the insurance

00:25:14.560 | companies have had to re underwrite the rates that they

00:25:16.400 | charge for insurance, because the frequency of a disaster has

00:25:19.720 | gone up. And the new price that they should be charging is so

00:25:23.560 | high, it doesn't matter how the capital structure is set up. It

00:25:26.520 | simply, there's, there's one big event that's going to cause a

00:25:29.720 | big wipeout for a large number.

00:25:31.000 | My personal belief is I think that the real estate markets in

00:25:34.480 | some of these places are meaningfully mispriced. And

00:25:40.160 | specifically, what I mean is that they're massively

00:25:43.080 | overpriced. That's right. Because I think when you

00:25:45.320 | actually account for the climate damage and the long term

00:25:50.360 | financial stability of the insurers and the reinsurers, I

00:25:55.080 | don't think that many of the markets that have seen these

00:25:58.600 | crazy sky high prices, I'll name two to be specific, West Palm

00:26:02.320 | Beach, and Malibu. So both ends of the coasts, these things just

00:26:07.920 | don't make sense. And I think people view these things as

00:26:10.920 | investments. But on the West Coast, when you deal with things

00:26:13.920 | like soil erosion and other things, I think it's a there's

00:26:17.360 | it's a calamity waiting to happen. And I think on the East

00:26:20.120 | Coast, when you factor in the extreme weather conditions, even

00:26:24.200 | Jason, your comment about rebuilding these homes in a more

00:26:27.120 | foolproof way doesn't solve it, because you won't be able to

00:26:30.800 | rebuild the entire state. There's a lot of people that

00:26:34.040 | just can't afford it. There's a lot of folks that will not have

00:26:39.480 | adequate coverage. So I just think these are disasters

00:26:42.600 | waiting to happen, unfortunately.

00:26:43.920 | Yeah, it's, in fact, there's a movement right now. A lot of

00:26:49.760 | people even have means are renting their homes. And so in

00:26:54.280 | the real estate market, what are your thoughts on that just

00:26:57.360 | renting versus buying now becoming like a something that,

00:27:01.360 | you know, people in the in the top half of homeowners or

00:27:05.440 | potential homeowners are now electing to not own their home

00:27:08.080 | and rent? Have you been monitoring?

00:27:10.040 | I hadn't heard that. I mean, the trend that I thought was

00:27:13.760 | happening was that you had these big funds, like BlackRock,

00:27:16.880 | whatever, buying up huge numbers of homes, and then running them

00:27:20.480 | to low end homes, you know, low end or medium, you know, to

00:27:24.440 | families, I thought that's what was going on. I hadn't heard

00:27:27.040 | that at the high end of the range that people were

00:27:30.160 | running. Well, if you think about it, like there's, there

00:27:32.280 | seems to be a cap when you have a $10 million home of what you

00:27:35.000 | can possibly rent it for. And it's, it's the the prices are

00:27:39.840 | now making more sense to keep more sense to keep your money in

00:27:42.920 | the market, or in other places, and then rent. I'm just here.

00:27:45.960 | Are you long real estate in Florida or coastal California if

00:27:50.720 | you could? Or do you treat them differently?

00:27:52.400 | I think they're different. But Florida is like, I mean, I don't

00:27:56.840 | know how you do the math on. I just don't know what you do on a

00:28:02.360 | trillion dollars, a real estate value with half a trillion of

00:28:05.400 | mortgages. When you have real exposure on loss more frequently

00:28:11.240 | than one in 100 years, they're to your point, they need to be

00:28:14.080 | repriced. And how do you reprice those homes in the significant

00:28:17.360 | level that they need to be repriced without causing massive

00:28:20.240 | economic and social consequence? That's what's, that's what's

00:28:23.360 | kind of, I think, challenging me and thinking about what's the

00:28:25.640 | path here. So it was a good thing that I sold my Miami

00:28:28.800 | place.

00:28:29.320 | Once again, Zach, it's a great trade. Pretty awesome. Well done

00:28:34.560 | sex. Again, well done. sexy. Just like I love I love that

00:28:42.120 | house on the house. Where do you think I stayed when I was in

00:28:46.840 | town? Yeah, you're so selfish. I lost the place to stay. I mean,

00:28:52.520 | the yacht access alone, being able to get out on the bay and

00:28:55.440 | get on a boat and the ski booze all this great stuff. All right,

00:29:00.360 | let's let's keep the free bird train going here. Huge news

00:29:03.560 | alpha fold creators just won a Nobel Prize in chemistry. Two

00:29:07.680 | members of Google's DeepMind AI research team. Demis Hassabis

00:29:11.600 | and john jumper received this year's Nobel Prize in chemistry.

00:29:16.200 | They both work for Google's DeepMind as you know, and free

00:29:20.480 | Berg again, Paul and getting their first explained what alpha

00:29:24.160 | fold was back on episode 14. In December of 2020. That was

00:29:30.000 | almost four years ago. free bird, maybe you could explain

00:29:34.320 | did we did we predict that they would win the Nobel Prize? I

00:29:37.280 | believe you did. And we'll go check the receipts using

00:29:40.160 | searching. It was it became it became much more likely that

00:29:44.760 | they would win the Nobel after they won the Breakthrough Prize.

00:29:47.680 | I mean, just to just to point this out. But yeah, yeah.

00:29:50.800 | Shout out your email, shout out Uri and Julia and Julia. Because

00:29:55.360 | when those guys won that award for 2023 and you heard the

00:30:02.320 | extent of what they've done, it was almost like obvious that

00:30:06.520 | they were going to win Nobel after the fact. So I think the

00:30:09.400 | really interesting thing is actually, in this community, I

00:30:12.640 | think the Breakthrough Prize is actually meaningfully more

00:30:15.080 | relevant, and a positive directional indicator to

00:30:17.800 | Breakthrough Science. Well, it's kind of like winning Sundance,

00:30:20.840 | or can you win the Palme d'Or, you become a favorite to win at

00:30:25.040 | the Oscars, right in the Academy Awards. So that's actually

00:30:27.280 | interesting, the regional or more industry centric award

00:30:31.280 | could lead to the next one. So free bird, just explain to us

00:30:33.800 | why this is so important. I just think it's much more rigorous

00:30:37.160 | than the Nobel. I think the Nobel can be a little bit

00:30:39.360 | gained, I think. Oh, interesting. Okay. What do you

00:30:42.960 | think free bird explain to the audience why this is important

00:30:45.560 | and what's transpired since we talked about it four years ago?

00:30:48.680 | There's been a long

00:30:50.440 | challenge in biochemistry on understanding, or predicting or

00:30:57.080 | visualizing the three dimensional structure of

00:31:00.560 | proteins, because remember, proteins are produced by long

00:31:04.160 | chains of amino acids. And those amino acids are kind of create

00:31:09.360 | like a bead, beaded necklace, and then the whole necklace

00:31:12.200 | collapses on itself in a very specific way. And that three

00:31:15.720 | dimensional molecule, that big chunky protein does something

00:31:18.720 | structurally physically. And so trying to understand the shape

00:31:22.600 | of a protein is really hard. I mean, we've used kind of x ray

00:31:26.200 | imaging systems to try and identify it and try to build

00:31:28.960 | models to identify how does that quote protein folding work? How

00:31:32.400 | do those amino acids collapse on each other to create that three

00:31:35.200 | dimensional construct? And if I don't know if you guys remember

00:31:37.240 | in the early 2000s, there was a Stanford folding at home

00:31:40.840 | distributed computing project. You guys remember this? Yeah, it

00:31:44.440 | would use people's machines and extra CPU, like the steady at

00:31:47.800 | home project to precisely Yeah, exactly. Right. Yeah. So it's

00:31:51.160 | like it ran on the background of your computer, use your CPU

00:31:53.520 | cycles when you weren't using your computer. And it tried to

00:31:56.280 | model protein folding. And so this has been a problem that

00:31:59.600 | folks have tried to tackle with compute for decades to figure

00:32:03.960 | out the 3d structure. This is so important, because if we can

00:32:06.480 | identify the 3d structure of proteins, and we can predict

00:32:09.880 | them from the amino acid sequence, we can print out a

00:32:13.800 | sequence of amino acids to make a protein that does a specific

00:32:17.440 | thing for us. And that unlocks this ability for humans to

00:32:20.200 | create biomolecules that can do everything from binding cancer

00:32:23.760 | to breaking apart pollutants and plastics, to, you know, creating

00:32:29.120 | entirely new molecules to running in some cases, like what

00:32:32.560 | David Baker did at University of Washington, he shared the Nobel

00:32:34.800 | Prize, creating micro motors, mini motors, from proteins that

00:32:39.440 | he designed on a computer. And so this becomes, I think, this

00:32:42.360 | great, like big Holy Grail in biochemistry, and the alpha fold

00:32:46.360 | project at DeepMind inside of Google solve this problem. And

00:32:50.280 | by the way, since since then, they've come out with alpha

00:32:52.000 | fold three, yeah, they've launched a drug discovery

00:32:54.720 | company called isomorphic labs, where they're basically

00:32:58.000 | predicting molecules that will do specific things for a target

00:33:01.520 | indication. And then they use the alpha fold models to

00:33:04.440 | actually design and develop those molecules. And there have

00:33:08.160 | been literally dozens of companies that have been

00:33:10.800 | started since DeepMind was published, and probably several

00:33:14.080 | billion dollars of capital that's gone into companies that

00:33:17.120 | are creating new drugs, creating new industrial biotech

00:33:19.320 | applications, using this protein modeling capability that was

00:33:22.920 | unleashed with DeepMind a number of years ago. So it really has

00:33:25.720 | transformed the industry. It'll be a couple years before we see

00:33:28.280 | it transform the world. But it's it's it's an exciting kind of

00:33:31.640 | thing. Yeah,

00:33:32.280 | not to virtue signal here. But those are plus size proteins.

00:33:35.880 | Now, Freebird, they don't like being called chunky, plus size

00:33:38.920 | proteins. Yes. One, one really difficult technical question for

00:33:44.320 | your free bird. Is there any way for you to take this amazing

00:33:47.360 | breakthrough and make sacks interested in? Is there any

00:33:51.400 | possible vector here for it to relate to sacks and get him off

00:33:56.560 | his BlackBerry right now? BlackBerry, I think he's playing

00:34:00.320 | chess with Teal and JD Vance is watching them play chess. I

00:34:04.440 | think that's what's going on right now. It's really hard. I

00:34:06.160 | mean, the audience here is watching sacks. All right, let's

00:34:10.400 | keep this train moving here enough of the shenanigans.

00:34:12.960 | Anyway, congrats to the teams, the very

00:34:15.400 | grass, yeah, yeah. I mean, it's just great. And David Baker at

00:34:19.360 | the Baker lab and University of Washington. David, they're also

00:34:21.680 | a breakthrough prize winner. Yeah. What's interesting to me

00:34:25.360 | is like these two Nobels, these guys, but also Geoffrey

00:34:29.000 | Hinton's. You know, you're really seeing now, the

00:34:32.880 | convergence of the hard sciences and computer science

00:34:36.000 | totally in a really meaningful way. And I think that that's so

00:34:39.280 | interesting and cool. I think in the group chat, Chamath, you had

00:34:43.640 | an interesting Hey, maybe there should be a computer science

00:34:45.640 | award for, you know, a Nobel Computer Science Award. And I

00:34:50.880 | actually think it's the opposite now, which is that it's amazing

00:34:54.120 | to see folks using computers to improve our understanding of the

00:34:59.840 | natural sciences. And I think that that's a really great place

00:35:02.520 | to be. So what Dennis and john and David are doing in the life

00:35:06.040 | science is amazing, what Geoffrey Hinton, you know, did,

00:35:09.000 | you know, 30 and 40 years ago, and 20 years ago, in terms of

00:35:13.520 | training deep neural nets, also really amazing. In related

00:35:16.920 | computers. Yeah, all computer based. And in related news,

00:35:19.560 | Benioff just nominated himself for excellence in CRM

00:35:23.480 | management. So congratulations to Benioff on himself.

00:35:27.160 | What does that call?

00:35:29.960 | Why are you attacking Benioff?

00:35:31.160 | They're just jokes. Have you not learned anything?

00:35:39.800 | To people that attack you, it's not an attack. It's a joke has

00:35:45.000 | done so much for philanthropy. Just ask him. If you

00:35:48.160 | what are you doing? Exactly? People have a sense of humor

00:35:57.120 | about yourself. But it's not even it's not even funny. If you

00:35:59.680 | had said something else.

00:36:01.120 | I mean, okay, give me a give me a funnier Nobel. Go ahead.

00:36:04.760 | Go runs a 300 billion market.

00:36:06.960 | Come back on the pod and explain why AI is not going to disrupt

00:36:13.080 | SAS. Really? Oh, we see he wants to be back. He wants to come on.

00:36:16.880 | We'll check in. We'll check in and $100 billion. He had a

00:36:22.440 | chance. That chance is closed. He shot a shot and it did not

00:36:26.200 | land. That door was closed when he insulted our guests about

00:36:29.200 | not being able to afford people wars. Oh, my god. Now you're

00:36:35.680 | piling on anybody coming to Dreamforce 2025. Okay, let's

00:36:38.880 | move on. Anyways, leave me off alone.

00:36:42.080 | It's like, leave Britney alone. The famous me leave Benny off

00:36:48.400 | alone.

00:36:48.840 | So how many new enemies do you want to create?

00:36:51.200 | I just every week. Just jokes.

00:36:56.800 | This one you thought he was running out of feuds. You know?

00:36:59.040 | I'm making stupid jokes. The reason people tune in is because

00:37:05.160 | you laugh and learn. Did you guys see that? That tweet? That

00:37:09.400 | somebody suggested throwing a conference with all of J cal's

00:37:12.320 | haters? Jason.

00:37:13.600 | jaders. jaders convention. What is it called? jaders? jaders?

00:37:22.720 | Yeah, jaders. Yeah, jaders. jaders. Yeah. I'd like to shout

00:37:26.600 | out my jaders. They're just jokes, folks. I love you. Mark.

00:37:31.040 | I'm penny off. Come on the pod Zack.

00:37:33.800 | I think somebody could launch a successful summit just doing

00:37:37.760 | that. It's like a ready made audience.

00:37:40.320 | All the YC founders will be there. Keynote day one Palmer

00:37:48.440 | lucky. Keynote day to David sacks.

00:37:54.080 | I think it would rival the all in summit in terms of the

00:37:56.400 | passion of the fans. All three of us would show up. He's so

00:37:59.480 | devastated.

00:38:00.240 | He's just got to have a sense of humor. Oh my god. Megan Kelly.

00:38:15.800 | Megan Kelly and farmer lucky. Wait, does that keep you too?

00:38:21.760 | What is that? Oh my god. Jake out was just so I was brutal to

00:38:25.160 | suck in the early brutal. Yeah. Why? Well, he just anyway, we'll

00:38:28.560 | get to it. But you're right. Like, you know, throwing a

00:38:30.800 | conference for J haters would just be ready made. jaders. That

00:38:35.640 | is an underserved and passionate demographic. It would be bigger

00:38:38.680 | than demographic. Just just look at sexist replies. Community

00:38:43.600 | with shared values. Hey, man, if I can get 25% of those ticket

00:38:46.840 | sales, I'm in. Let's go. All right. Let's keep the train

00:38:50.600 | moving here. We have an update on the DOJ is antitrust suit

00:38:55.560 | with Google looks like they're going for the breakup as

00:38:59.720 | Chamath predicted. You remember the Bloomberg report back in

00:39:04.280 | August, we covered it in Episode 192. Google was found liable for

00:39:08.920 | maintaining a monopoly in search and digital ads. Now the DOJ is

00:39:12.560 | working on the remedy, right? Okay, they're guilty. So now

00:39:16.840 | comes time for the remedy. And the DOJ is quote is from

00:39:20.920 | Bloomberg, considering asking a federal judge to force Google to

00:39:25.000 | sell off parts of its business. And according to this filing,

00:39:29.040 | the DOJ is specifically considering structural remedies

00:39:32.880 | that would prevent Google from using products such as Chrome,

00:39:35.800 | Google Play, that's the App Store on Android, and Android

00:39:39.640 | itself to advantage Google search 32 page document released

00:39:43.920 | by the DOJ lays out several options. And we'll go through

00:39:47.640 | them and talk about them here. The obvious one terminating

00:39:51.080 | Google's exclusive agreements with hardware companies like

00:39:54.400 | Apple, they're the default search engine there for 30 or 40

00:39:56.800 | billion a year, Samsung, that's a lab separating Chrome and

00:40:00.440 | Android, my god, that would be drastic ripping that out of the

00:40:03.400 | Google ecosystem, prohibiting certain kinds of data tracking.

00:40:07.720 | That's a layup as well, or other behavioral and structural

00:40:11.120 | changes for the company. I'm going to pause their Friedberg

00:40:13.800 | and get your thoughts on this as a former Googler. And you

00:40:17.440 | interviewed Sergei at the summit, but I don't think we

00:40:20.800 | talked to Sergei about this, because obviously, he would not

00:40:23.280 | be able to talk about it. So what are your thoughts here on a

00:40:26.280 | potential remedy?

00:40:27.560 | I think we've talked about this. I mean, look, I've shared in the

00:40:31.080 | past, my belief that companies that are big, that have excess

00:40:35.760 | capital that then invest that excess capital in R&D can be a

00:40:39.160 | net benefit for all of us. Look at Bell Labs, Bell Labs had a

00:40:43.760 | monopoly on through their association with AT&T, with

00:40:50.680 | developing radar, microwave, deep transistor, integrated

00:40:54.760 | circuitry, information theory, everything that is the basis of

00:40:59.000 | the internet, computing, even nuclear technology, and so on.

00:41:04.240 | It's because they had this extraordinary capital flow from

00:41:07.240 | the scale of the business, and they were able to invest in R&D.

00:41:09.800 | Similarly, Google acquired and invested for many, many years in

00:41:13.960 | DeepMind. And we just talked about how Demis and team won

00:41:17.120 | the Nobel Prize for the work that they did. And they, by the

00:41:20.880 | way, published the protein structure for 200 million

00:41:24.280 | proteins for free out of that service. I just want to zoom out

00:41:28.480 | for a minute and talk about the fact that this isn't about you

00:41:33.320 | know, whether Google has a monopoly in search that prohibits

00:41:35.680 | competition or in ads that prohibits competition, but are

00:41:39.320 | do is it really worth penalizing any company that's big,

00:41:43.880 | particularly do we lose the benefit of those big companies

00:41:46.640 | investing in technology that pushes us forward. Google also

00:41:49.520 | invested in Waymo for years and years and years, which arguably

00:41:53.480 | spurned and drove investment for many other companies in self

00:41:57.040 | driving technology. And if Google hadn't done that, would

00:41:59.640 | self driving have taken off the way it did? I don't know. Same

00:42:02.760 | with Kitty Hawk and Larry's investment in eVTOLs. And that

00:42:05.880 | that spawned a lot of eVTOL investing. And similarly, if you

00:42:09.520 | think about Amazon and their investment in AWS, where they

00:42:12.000 | were burning cash for many years, that turned out to spawn

00:42:16.680 | arguably a lot of interest and investment in cloud. And so I

00:42:21.000 | don't think that these big companies are bad just because

00:42:23.400 | they're big, I think we should take apart the monopolistic

00:42:26.560 | antitrust actions and behaviors that they take and then

00:42:29.400 | identify ways to remedy those behaviors versus just saying

00:42:33.760 | anyone or anything that's big should be taken apart. Because

00:42:36.440 | there is a tremendous benefit to be gained from the R&D dollars

00:42:39.600 | that they all put into things that, you know, move the whole

00:42:42.640 | industry forward. And I think that leadership is important and

00:42:45.280 | needed. Otherwise, if you've got a bunch of startups that are

00:42:47.760 | trying to get $10 million checks from VCs, I'm not sure they're

00:42:50.640 | going to build a Waymo and I'm not sure they're going to build

00:42:52.720 | Amazon Cloud. And I'm not sure they're going to build a deep

00:42:55.960 | mind, you know, protein folding company and publish it for free.

00:42:59.520 | So I don't know, that's just my point of view on what's the

00:43:01.960 | likely I should think about this stuff.

00:43:03.920 | Matthew kind of know this one. Pretty good with these

00:43:07.000 | predictions. Tell us we'll be sitting here five years from now

00:43:09.720 | what will have occurred.

00:43:10.520 | Unfortunately, not what free bird just said. It'll be the

00:43:17.880 | opposite. There'll be some form of forced remedy. I'm

00:43:21.720 | sympathetic to free birds argument. I don't think that

00:43:23.880 | it's really a good thing in the end, because I do think there

00:43:26.640 | are some incredible examples of Google specifically reinvesting

00:43:32.720 | in a way that's really added value in the world. I think the

00:43:37.160 | problem though, is that the technology innovation cycle has

00:43:42.320 | gotten too elongated. So you're not seeing creative destruction

00:43:48.280 | be the natural force that keeps all of these companies in their

00:43:52.880 | own swim lanes. And so they are allowed to become too amorphous

00:43:57.440 | and too profitable. And I think it becomes an obvious target for

00:44:02.480 | politicians.

00:44:03.880 | I think that's a really good observation there about the

00:44:08.000 | timeline of this. Because if you look at this, I have started

00:44:12.880 | now. And I know many people are starting their search journey on

00:44:16.560 | Claude and chat GPT every day, I'm doing 3040 50 queries and

00:44:20.880 | follow ups per day, I forced my entire team to do that as well.

00:44:25.520 | And so just as there's an actual viable competitor to Google,

00:44:30.120 | this action has reached, I don't know the halfway mark, this is

00:44:34.640 | going to wind up being completely meaningless sacks. If

00:44:37.720 | chat GPT does build a viable competitor coexist or that

00:44:42.400 | siphons off search, am I wrong here?

00:44:47.240 | Well, it is ironic that frequently, the government takes

00:44:51.360 | actions on these monopolies at precisely the moment they're

00:44:54.400 | subject to the greatest disruption. Totally the same

00:44:57.160 | thing with Microsoft in a way, but it was still a good thing

00:45:00.120 | that the government acted when it did, because there was a risk

00:45:02.640 | of Microsoft porting over its desktop monopoly into this new

00:45:06.760 | era of the internet. I think it's still a good thing to be

00:45:09.280 | looking at breaking up Google, I actually think that would be

00:45:11.200 | good. At the end of the day, it might be good for shareholders.

00:45:13.520 | This thing should be probably three separate companies, like

00:45:16.520 | we've talked about in our previous show. But it is true

00:45:19.240 | that Google is facing the most existential threat to its

00:45:22.720 | search monopoly. And it is a monopoly in the form of open AI

00:45:28.480 | at this point in time.

00:45:29.480 | I have one final thought here, a piece of advice for Sergey and

00:45:33.280 | the team over there. And I told Sergey directly, they have to

00:45:36.640 | get good at making apps to go use chat GPT, you take out the

00:45:41.200 | app, and it's a wonderful, beautiful experience. When you

00:45:44.480 | go try to figure out how to use Gemini, it's like shoehorned

00:45:48.120 | into search results. And then it's like some sub domain,

00:45:51.360 | that's why people aren't using it, go buy the domain name,

00:45:53.640 | chat.com, and make a dedicated app just for Gemini. Kick ass.

00:45:59.680 | You're 100% right. We suck at apps.

00:46:01.920 | We said this one, when you asked about the bear case of open AI.

00:46:07.360 | If the DOJ is going to go after Google. And by the way, the

00:46:12.520 | interesting thing, Jason, and I mentioned this to you is that in

00:46:16.280 | the same article that floated the trial balloon, about this

00:46:19.800 | remedy of a Google breakup, the headline in the Wall Street

00:46:22.360 | Journal, which I think was very purposeful said Google and meta.

00:46:25.400 | So I think that they have given their druthers they being the

00:46:30.120 | powers that be at Washington will probably want to take a run

00:46:33.640 | at both of these companies, they'll start with the one that

00:46:36.520 | they think they can disassemble the quickest, and then they'll

00:46:40.240 | go to meta afterwards. My strong advice to meta and Google is, if

00:46:48.200 | this is going to happen, you got to go out kicking and punching

00:46:54.480 | and fighting and scratching. And I think the most obvious thing

00:46:57.240 | is what you just said, Jason, which is, you are the front door

00:47:00.880 | through the internet. And there is this completely new emergent

00:47:04.960 | technology. And where is the same response to chat GPT that

00:47:12.920 | you had to x, or that you had to Snapchat, or that you had to

00:47:17.440 | tick tock, because if it's going to happen, it's going to happen.

00:47:20.120 | And then you might as well just go for it. Yeah, build the apps,

00:47:23.920 | make them kick ass, make the chat GPT alternative, and get it

00:47:29.040 | to billions of people yesterday. That would be the most logical

00:47:34.960 | game theory thing to do, to build up a pool of users that

00:47:40.200 | you will rely on. When the DOJ tries to come with some consent

00:47:46.600 | decree or whatnot. So this is the time to build up the assets

00:47:50.160 | now as aggressively as possible.

00:47:52.400 | Yeah. And selling YouTube would be the ultimate I know that the

00:47:56.160 | ad networks you pointed out for your blog are connected. But if

00:47:59.320 | they distributed, they spot give you something about the ad

00:48:03.600 | thing. Can you imagine $500 billion going into Google's

00:48:07.400 | coffers in YouTube shares, they will have 500 billion in cash,

00:48:11.880 | Chama.

00:48:12.440 | I had a I talked to a company, he is the CEO of a public

00:48:17.200 | consumer facing company. And this was in the context of some

00:48:22.160 | 8090 stuff. And he said that he and and two other CEOs, the

00:48:28.840 | three of them, you guys would all know these are very big

00:48:31.680 | companies, the three of them combined are particularly large.

00:48:34.320 | And they said they've had multi year roadmaps to try to build a

00:48:39.200 | reasonable set of tools and advertising and it's been

00:48:41.640 | impossible. And partly why is that the tools that the big

00:48:46.840 | folks offer are so good, that they just cannibalize and run

00:48:50.560 | over the entire market. And so what they hear from CMOs, is we

00:48:54.520 | would love to advertise on your company, your site, but a your

00:48:58.280 | tools are substandard. And B, even though your inventory is

00:49:01.840 | cheaper, you just don't give us the same scale and breadth that

00:49:05.400 | we get in these other big places. I'm not saying that

00:49:08.320 | that's either right or wrong. But through the lens of probably

00:49:12.480 | what the DOJ sees is when a lot of these folks write letters to

00:49:16.160 | them talking about what they're going through, this is what

00:49:18.120 | they're saying. And I suspect that if you could actually have

00:49:22.600 | a more fragmented market in some of these key markets, it's going

00:49:27.520 | to be a little bit easier for these smaller companies to have

00:49:30.440 | a business. Yeah, now, you could say, well, tough luck, you tried

00:49:33.240 | and you couldn't build it. I get that argument. And I think and I

00:49:35.640 | think that that at some point that is legitimate. But the

00:49:37.840 | problem is, if you're public, and you're trying to make your

00:49:40.200 | company profitable, what do your engineers want to work on, they

00:49:43.240 | want to work on consumer facing forward features. And so what

00:49:46.360 | always falls off the list, it's the stuff at the end, the

00:49:48.880 | attack. Yeah. And so anyways, it's this recursive negative

00:49:52.280 | loop that a lot of these other companies are in, in the shadow

00:49:55.360 | of these big companies that I think is going to cause the DOJ

00:49:58.480 | to try to do something,

00:49:59.520 | you know, this is a great setup for M&A. It's great setup for

00:50:02.280 | IPOs starting to look like and this is a multi administration

00:50:08.000 | case that's been going right. I think the started under Trump

00:50:10.840 | went into Biden and is now going to continue on to Trump or

00:50:14.120 | Harris. So what are your thoughts here, Sax?

00:50:18.120 | Well, in terms of the political environment for M&A next year?

00:50:21.720 | Yeah. Yeah. I mean, so obviously, it depends which

00:50:24.280 | administration's in power. A lot of Democrats, prominent

00:50:29.360 | Democrats in tech, like Mark Cuban, or Reid Hoffman have been

00:50:31.880 | making the case that if Kamala is president, she's gonna be

00:50:35.400 | much more hospitable and friendly towards M&A. And

00:50:39.400 | they've been saying explicitly that they want Lena Khan fired.

00:50:42.800 | Well, in response to that, AOC just came out and said, we're

00:50:46.000 | gonna have a throw down if you do that. So I don't let go, I

00:50:50.160 | would not expect a substantial difference or improvement in the

00:50:54.640 | in the regulatory permissiveness towards M&A. If, if we have a

00:51:00.520 | democratic administration, if that if you have Trump in

00:51:04.320 | office next year, I think that there, there will be an opening

00:51:08.320 | up of of M&A. I think the Republicans have their own

00:51:11.080 | issues with big tech. But those issues tend to revolve around

00:51:14.400 | censorship and bias and search results and LLM, things like

00:51:18.760 | that, as opposed to bigness per se. So I think it will be easier

00:51:23.320 | to get M&A done next year, if you have a Republican

00:51:26.040 | administration.

00:51:26.720 | Absolutely, I am going to be printing money in a Trump

00:51:30.080 | administration, it is going to be obscene how many M&A deals

00:51:34.000 | and IPOs are going to occur. There is such a huge backlog.

00:51:36.920 | But I do think that I do think the Democrats want to get this

00:51:40.680 | moving as well. And I was talking to Reid Hoffman, and you

00:51:44.720 | and Peter Thiel in the Illuminati meeting, and they

00:51:47.800 | voted 190 to two to replace Lena Khan in the Illuminati

00:51:51.200 | meeting. Chamath, why didn't you make the Illuminati meeting

00:51:53.640 | last week? I'm shocked that you weren't there.

00:51:55.640 | Not I'm not invited to that. People don't know that you're

00:51:58.520 | being facetious, Jason.

00:51:59.600 | Oh, really? They don't understand that. I'm joking

00:52:02.120 | about the Illuminati often don't. Well, I'm sorry to the

00:52:06.600 | low IQ listeners who don't know that the Illuminati is not real.

00:52:11.400 | Or now you're insulting the audience. No, I'm insulting the

00:52:13.800 | ones who believe there's an Illuminati.

00:52:15.520 | He's trying to sell tickets to the

00:52:18.560 | sell tickets to the Jaders ball. But Buck nasty, Zack nasty.

00:52:23.720 | Jane Cowne is the biggest hater in the tech industry. You ever

00:52:28.640 | see the haters ball, Saks?

00:52:30.280 | I'm not sure.

00:52:31.680 | Chappelle show. No. Chamath, it looks like between the time we

00:52:35.560 | mentioned it on the pod, it's actually happening. Here it is.

00:52:38.400 | The Jaders ball is happening. There it is. Lena Khan, David

00:52:43.240 | Saks.

00:52:43.760 | Why am I there?

00:52:44.640 | Because you're a headliner. You're you're organizing. I

00:52:47.360 | think you're the host.

00:52:48.000 | I'm gonna be a keynote.

00:52:48.840 | Yeah, I'm the I'm okay. Wow. I'm the MC there. Look, there's

00:52:53.840 | there's Zack nasty. And there's Palmer lucky. You guys don't

00:52:57.520 | know this bit from Chappelle. The Haters ball from Chanel. Oh

00:53:01.280 | my god, it's the funniest bit on Chappelle show. It's literally

00:53:06.840 | I mean, I saw a lot of Chappelle shot.

00:53:08.280 | Just show the real picture, Nick, on the Chappelle show. They

00:53:12.520 | have all of these pimps who have a yearly convention, which is

00:53:17.600 | their player haters. I've seen it. I've seen it. And all they

00:53:20.240 | do is sit there with like a toothpick in and they hate on

00:53:23.440 | each other and make fun of each other. I've seen this is the

00:53:26.120 | funniest bit in the history of the Chappelle show. All right,

00:53:29.280 | let's keep the train moving here. CRB is giving back or

00:53:33.800 | maybe not calling down 275 million from their LPS Charles

00:53:37.000 | River Ventures. Shout out to my pal George Zachary and Greek

00:53:39.600 | brother from CRB. Historically, they invest in early stage

00:53:43.200 | startups. They did DoorDash air table Twitter back in the day.

00:53:47.160 | They had two funds that they raised back in 2022 billion

00:53:49.840 | dollar early stage fund in a 500 million growth fund. Sometimes

00:53:54.080 | people call that an opportunity fund or a select fund. The New

00:53:57.200 | York Times reported CRB is going to give back about half of that

00:54:00.200 | 275 million to investors or technically probably not call it

00:54:04.640 | down. The four partners at CRB gave an exclusive to the New

00:54:08.800 | York Times. So either getting ahead of this story or maybe you

00:54:12.320 | know, who knows what the motivation here is. But the

00:54:14.840 | reason they gave is that the market conditions for late stage

00:54:17.800 | have worsened dramatically. And that the valuations are still

00:54:21.160 | too high. Yes, the rent is too high. And that there aren't any

00:54:24.640 | exit options as we just talked about with the administration.

00:54:27.680 | No IPOs, no M&A. And that VC map doesn't work in the late stage.

00:54:32.560 | So I'll just stop there. There's a bunch of other notes here.

00:54:35.760 | Obviously, this isn't the first time this has happened. I think

00:54:38.640 | founders fund cut the size of its eighth fund in half from 1.8

00:54:41.880 | billion to 900 million. They didn't actually give the capital

00:54:44.800 | back to VCs. Like they're saying CRV did here again, I'm not

00:54:48.280 | certain if that's what's happened or not. They put the

00:54:51.120 | extra 900 million into its ninth fund, if they decide to raise

00:54:54.440 | that, which I'm assuming founders fund will. Chamath, you

00:54:56.680 | have any thoughts on this? I, I guess, we had two stories here.

00:55:02.840 | So I don't know, Peter Teal did this, and he gave back quite a

00:55:06.880 | large piece of his fund a couple of years ago, and then CRV just

00:55:10.400 | did it. I want to make sure I get the citation right. I think

00:55:13.920 | it was Thomas Lafont at CO2, who said this, it was really

00:55:17.400 | powerful. It made a huge impression on me, which is that

00:55:19.920 | the NASDAQ creates about $800 billion of enterprise value a

00:55:25.200 | year. And he brought that up in the context of private markets

00:55:29.360 | have to exceed that in order for it to be a real viable

00:55:32.600 | alternative to just owning public indices. And so if you

00:55:36.720 | factor in illiquidity risk, and the duration, you have to

00:55:41.360 | probably generate, I don't know, a trillion $1.2 trillion of

00:55:45.600 | enterprise value in private tech every year. That just seems like

00:55:49.600 | it's really hard to do. Where is all of that value getting

00:55:52.360 | created? So I think that venture needs to go through a phase

00:55:57.360 | where it re rationalizes, you know, this is sort of what I

00:55:59.680 | said, David's LP day, which is, I think that LPS have made a

00:56:04.360 | couple of very big mistakes. And I think the biggest mistake

00:56:08.320 | that they've made is by smearing too much money across too many

00:56:11.240 | general partners. And I think if you had to redo it, a it's

00:56:16.680 | probably a lot less money in total. But B, and the example I

00:56:21.080 | gave, there was instead of giving $50 million to craft and

00:56:23.840 | $10 million to somebody else, you're better off giving $60

00:56:26.720 | million to craft and not even having that other GP. Because

00:56:30.280 | that GP makes everybody's life complicated. They overpay, they

00:56:34.080 | miss pay, they're probably not supposed to be a GP in the first

00:56:36.840 | place. And so they force returns down. And then when you

00:56:40.480 | contrast that, again, to a public market that is

00:56:43.040 | systematically creating $800 billion of enterprise value a

00:56:47.640 | year, this is an incredibly tough game, and it's getting

00:56:51.120 | much, much harder. So I think that if you just take a step

00:56:54.720 | back, these are the right things to do, because you're much

00:56:57.400 | better off having a smaller pool of capital that you can

00:57:01.120 | concentrate into the things that matter. You're probably better

00:57:04.200 | off having smaller teams versus bigger teams. And you're

00:57:08.520 | probably better off trying to forge LP relationships where

00:57:12.960 | they're not doing 50 fund investments, because it just

00:57:17.680 | makes the entire industry lag, public liquid alternatives. And

00:57:22.200 | I think that that's just not good.

00:57:23.600 | Peanut butter getting spread a little bit then there. Any

00:57:26.520 | thoughts, freeberg on this trend, if we can call it that it

00:57:31.880 | or is this like maybe they're reacting right as the market is

00:57:35.920 | changing, and valuations are getting more reasonable, and the

00:57:39.240 | exit opportunities are getting more reasonable. It seems like

00:57:41.480 | this was the right reaction two years ago. But maybe it's the

00:57:44.160 | wrong reaction. Now, what do you think freeberg

00:57:46.000 | for venture firm to return capital, they need to have at

00:57:50.880 | least one or two big winners. And so if that winner needs to

00:57:54.520 | be a 10 x or 20 x or 30 x of the fund, because most of the

00:58:00.160 | investments in the fund are not going to work, you need to be

00:58:03.480 | able to enter at a reasonable price. And there needs to be

00:58:06.240 | enough opportunity relative to the capital trying to invest in

00:58:10.520 | that opportunity out there for to make sense. So in a market

00:58:13.200 | where there is excess venture capital, where valuations are at

00:58:17.800 | a premium, and where you don't see the exit path, the M&A or

00:58:21.720 | the IPO events that makes sense that you can actually realize

00:58:24.400 | that model, you should take less capital and make fewer, surer

00:58:30.280 | investments. And I think that that's what some folks have

00:58:33.120 | realized, they don't want to be chasing, you know, highly

00:58:36.880 | valued inflated opportunities. And they don't want to be

00:58:40.040 | putting capital into tier B, or tier C opportunities, just for

00:58:45.000 | the sake of deploying capital. This is a really interesting

00:58:48.000 | moment where you can kind of see who are the right folks in terms

00:58:52.360 | of thinking long term in Silicon Valley long term in terms of

00:58:55.080 | building an investment practice and private venture. And maybe

00:58:59.760 | who are folks that are trying to build their AUM stack. And folks

00:59:03.480 | who have done reasonably well, like founders fund has probably

00:59:06.040 | the most exceptional track record in Silicon Valley as a

00:59:08.680 | venture firm. They are very cognizant of the market

00:59:12.600 | conditions. And I think that they're being very smart. By

00:59:15.600 | the way, the other thing I've heard from LPS is they're

00:59:17.640 | similarly trying to find more concentrated capital themselves.

00:59:22.880 | So they're trying to put more capital to work in fewer

00:59:26.400 | managers. And so there's a real wheat from the chaff moment

00:59:30.320 | happening in Silicon Valley venture right now. What I think

00:59:33.440 | a couple years ago was, hey, everyone's gonna go do a

00:59:35.600 | startup, a few years ago became everyone's gonna go do a venture

00:59:38.680 | fund. And now I think the froth that has occurred because of

00:59:41.440 | that is being cleared up.

00:59:42.360 | And to just explain this math before I get saxes thoughts on

00:59:46.160 | this, if this was a $500 million fund, let's say they were

00:59:49.560 | putting $25 million into each, we'll take management fees out

00:59:53.920 | of it $25 million into each opportunity at a billion dollar

00:59:57.040 | valuation, they would own two and a half percent, obviously of

00:59:59.560 | those firms, they need to get probably a $30 billion power law

01:00:05.920 | exit a 30 xax in order to just return the fund, there'll be

01:00:09.480 | some dilution, obviously, along the way. That's why it's not 20

01:00:12.440 | x. And the number of companies that go from a billion to 30

01:00:16.400 | billion per cycle is incredibly low Uber, Coinbase, Airbnb. It's

01:00:23.880 | a really short list, huh? sacks in recent history.

01:00:26.400 | Right? I mean, look, just just go back to the CRV thing. You

01:00:31.960 | said at the outset of the conversation that this was

01:00:35.000 | either a growth fund or an opportunities fund. That makes a

01:00:38.360 | really big difference. Explain, please. Because, well, an

01:00:41.520 | opportunities fund typically exists to back up your winners.

01:00:46.920 | In other words, if the venture fund is producing some big

01:00:49.640 | winners, the opportunities fund exists to deploy more capital

01:00:53.440 | into those into those companies, as opposed to a growth fund,

01:00:56.600 | which is you'd be underwriting brand new companies from

01:00:58.840 | scratch. Typically, an opportunities fund is limited to

01:01:01.380 | companies that you're already an investor in through your venture

01:01:03.680 | fund. So that makes a big difference. I mean, if CRV has a

01:01:07.360 | billion dollar venture fund, and only a $500 million

01:01:09.840 | opportunities fund, it may just be the case that they don't need

01:01:13.160 | all that capital to back up the winners, they can do their pro

01:01:15.840 | ratas out of the main fund. So I suspect that that might be

01:01:20.760 | what's going on, I actually think this is a pretty good time

01:01:23.440 | to have a growth fund. A lot of the why? Yeah, well, because a

01:01:26.720 | lot of the crossover capital has left the ecosystem. Okay, a few

01:01:30.960 | years ago,

01:01:31.240 | there's in that sort of cohort. Yeah.

01:01:33.560 | Yeah, well, Tiger and, and SoftBank are still around, but

01:01:39.600 | there are other very large investors, hedge funds, and so

01:01:43.120 | on, who had come into the ecosystem with billions of

01:01:45.400 | dollars a few years ago. And now they've left. And some of those

01:01:49.120 | funds that you're talking about, like Tiger used to be $10

01:01:50.920 | billion funds. Now they're $2 billion

01:01:52.320 | funds. And right size, they're not violently doing I mean, the

01:01:56.080 | the Tiger deals, my understanding was they weren't

01:01:58.120 | joining the board in a lot of the cases, and they were

01:01:59.920 | outsourcing the diligence. And that was a pretty violent pace.

01:02:02.880 | I don't know. Yeah, this is the best time in probably five years

01:02:05.920 | to have a growth fund. Interesting. But to your point

01:02:09.080 | about the size of the venture fund, the bigger the venture

01:02:11.400 | fund, the bigger the winner that you need to make that pay off,

01:02:14.440 | obviously. Yes. And so because of the power law, so to take an

01:02:17.920 | example, I don't know, let's say you've got a billion dollar

01:02:20.640 | venture fund, let's say that at IPO, you own 10% of whatever

01:02:26.560 | that that winner is. And because of the power law, your your fund

01:02:30.600 | performance is really determined by your best outcome, right?

01:02:33.520 | Yep. So in order to take $1 billion venture fund and say,

01:02:38.280 | deliver a three x, you know, so 3 billion of returns, and your

01:02:42.640 | best company you own 10% of that implies you have a $30 billion

01:02:47.320 | winner in that fund. And there are precious few outcomes where

01:02:51.320 | you have a $30 billion IPO, right? Yeah, I mean, happened

01:02:56.080 | very often on two hands the last cycle, right? Like I just did,

01:02:59.400 | you got you got Uber, you got Robin Hood, you got coinbase,

01:03:04.800 | strike will eventually come out, you got SpaceX. Well, that was

01:03:08.120 | two cycles ago. So I mean, yeah, you're going to need to have a

01:03:10.360 | meaningful ownership position and a massive company in order

01:03:12.960 | to make a fund that big payoff. The data that I think LPS look

01:03:16.600 | at shows that smaller venture funds tend to perform better.

01:03:20.240 | For this reason, 500 million dollars. Yeah, funds. So yeah, I

01:03:25.280 | personally wouldn't want the pressure of a billion dollar

01:03:27.440 | venture fund, that would be really hard. As a five or 600

01:03:31.760 | billion dollar venture fund, you kind of need to have or want to

01:03:35.760 | have like a decacorn outcome to make that a great fund. But to

01:03:40.160 | have to have a $30 billion plus outcome, it's it's even more

01:03:43.640 | difficult

01:03:44.080 | moving on, Pew just published some really interesting

01:03:46.840 | research on Tick Tock. If you don't know the Pew study,

01:03:49.520 | they've been doing it for decades. It's very well

01:03:51.440 | respected, and bipartisan or nonpartisan. Four in 10 us

01:03:56.840 | adults aged 18 to 29 are now regularly getting their news

01:04:00.360 | from Tick Tock. Here's some charts for you to take a look

01:04:03.240 | at. As you can see, the younger generation is really spending a

01:04:07.520 | lot of time on Tick Tock and getting a lot of their news

01:04:09.880 | there. I know this because yeah, I've talked to a bunch of kids

01:04:13.720 | about this and people that use Tick Tock 52% are regularly

01:04:18.360 | getting their news from the platform and that number has

01:04:21.840 | skyrocketed compared to other social platforms. Take a look at

01:04:25.400 | this chart. Here's x 59% of people say they get their news

01:04:29.080 | at x it's really a news platform. So that makes total

01:04:31.480 | sense. You look at Facebook, it's you know, 48% right now

01:04:35.840 | Reddit 33% YouTube 37% in 2024 Instagram 40% but Tick Tock 52

01:04:43.080 | up from 22%. So it's no longer just dancing. And this is the

01:04:46.520 | reason I think many people in the government were concerned

01:04:50.480 | about the attack vector that the CCP would have in the United

01:04:55.320 | States since they still control the company for services like

01:04:58.440 | Snapchat, LinkedIn, and WhatsApp and next door. It's below 20

01:05:03.600 | below 30% get their news from their their shirts with social

01:05:06.360 | their sacks 57% of people get news there and rumble 48%. So

01:05:10.840 | what's your takeaway from from this just sex looking at it in

01:05:16.040 | this impact that Tick Tock has is this concerning on a national

01:05:18.920 | security level since the algorithms a black box and you

01:05:22.600 | could tweak it if you really wanted to to really change

01:05:25.120 | sentiment and young people are obviously very impressionable on

01:05:29.680 | this platform and their big users.

01:05:31.560 | Well, I thought there was other data in the study that should

01:05:35.760 | calm people's fears that Tick Tock would somehow be used as a

01:05:38.880 | political weapon. So in the same survey, you're talking about 95%

01:05:44.000 | of adults that use Tick Tock say they use it because it's

01:05:46.720 | entertaining. So that's the main reason people use it. And only

01:05:50.600 | 10% of accounts followed by us adults post content related to

01:05:55.280 | political or social issues.

01:05:56.560 | Okay, that's hosting and the main reason, right? Yeah, but

01:05:59.520 | so so basically, you're 90% of the accounts that get followed

01:06:03.480 | aren't even posting political or social issues. They're there for

01:06:07.560 | entertainment as people watching dance videos as people. Yeah,

01:06:11.400 | that's watching. I mean, the main thing I use it for is to

01:06:14.600 | watch wrestling highlights. So you're wrestling? Yeah, I'm a

01:06:19.920 | wrestling fan. What? Yeah. You're into this kabuki theater

01:06:24.560 | of wrestling. This is new information. Yeah, I get my WWE

01:06:29.560 | on on Tick Tock.

01:06:31.120 | Yeah. Are you a Hulk Hogan guy? Are you an undertaker guy? Vince

01:06:36.400 | McMahon? I mean, Jimmy Superfly snooker. Who are you? Andre?

01:06:41.400 | I know all those names. But I like I also love the road

01:06:44.800 | warriors. Ultimate Warrior. I loved I was a huge wrestling

01:06:48.800 | fan. That was the one thing that my dad and I bonded over we

01:06:52.760 | would watch wrestling every Saturday. sacks. Did you ever

01:06:56.160 | watch the specials on Saturday night? Like the Oh, yeah. Oh,

01:07:00.000 | those are so that was the era of Hulk Hogan. For sure. Saturday

01:07:03.560 | night's main event. Randy. Savage. Savage. Yeah. Savage is

01:07:07.560 | great. Savage. Yeah. I mean, look, my all time favorite was

01:07:10.040 | Stone Cold Steve Austin. Stone Cold is great. I marked out the

01:07:12.980 | hardest for also he was he was anti woke before anti woke

01:07:16.080 | became a thing. Totally. This is crazy. You guys are into

01:07:20.560 | wrestling. I'd say for me, wait, wait, hold on. Have you gone to

01:07:26.120 | a wrestling event? Like the WWF at the time? Or did you like the

01:07:30.600 | NWA? Is that their moments? When when Hogan turned heel and

01:07:35.520 | joined the the was at the NWO? That was like a big moment. I'm

01:07:40.600 | a big Andy Kaufman wrestling fan. That was my only interest

01:07:43.680 | is when when Andy Kaufman came in there. And troll them. But

01:07:49.000 | Kaufman Yeah, that was like in the 1970s. Wasn't it? Or was the

01:07:53.560 | late 80s. Remember, he was on David Letterman with Jerry

01:07:57.040 | Lawler. And he he comes to a wrestling match sacks in the

01:08:02.360 | south. And I grew up in my hometown of Memphis. Right. So

01:08:06.280 | he goes there. And he gets in the ring. And he says, all of

01:08:10.680 | you rednecks, I want to show you some new inventions. This is

01:08:14.400 | called soap. And this is called the washcloth and you use it to

01:08:19.480 | clean yourself. And he's like just mocking the southern accent

01:08:24.520 | and Jerry Lawler. I remember Jerry Lawler smacks him. And on

01:08:28.480 | Letterman. Oh, it's the greatest. It was a huge deal. I

01:08:31.040 | mean, where I grew up because that this was like on the local

01:08:33.560 | news. Yes. When I grew up in Memphis, there was no

01:08:37.040 | professional sports teams. Okay. All we had was the Memphis

01:08:40.400 | State basketball, and, and wrestling every Monday night,

01:08:45.040 | the Mid-South Coliseum. That was it. That was like professional

01:08:47.840 | sports. In Memphis. You also had probably like some state fairs

01:08:51.640 | or, you know, like best goats, best sheep or something. Lawler

01:08:55.960 | was so popular that he could have been elected mayor. In

01:08:59.160 | fact, I think there was talk at one point of him becoming

01:09:01.240 | mayor. Wow. I mean, the intergender champion, Andy

01:09:04.920 | Kaufman. Did you guys like mouth of the south? Jimmy Hart? Oh,

01:09:08.800 | yeah. Yeah, he was amazing. He was like the main heel manager

01:09:13.480 | for a while. Yeah. Okay. Before the WWE took over, I guess it's

01:09:17.320 | called WWF back then. But there were all these little fiefdoms

01:09:20.440 | and kingdoms and Mid-South wrestling was like one of those

01:09:23.680 | kingdoms. And Lawler was like the king of it. And yet all

01:09:26.760 | these guys come in and out and wrestle.

01:09:28.280 | Freeburg, you ever watch wrestling? And what do you think

01:09:32.560 | of this Tick Tock survey?

01:09:33.640 | I don't watch wrestling. Okay, very good. And Tick Tock survey.

01:09:38.200 | Anything. Where are you? No. Any thoughts? Looks like they

01:09:41.120 | gathered some reasonable data. Okay, there you go. There's

01:09:44.240 | there's your heart.

01:09:44.960 | My point was that is mostly an entertainment app where people go

01:09:49.080 | to watch dance videos, wrestling clips, style influencers, and so

01:09:53.120 | on. And I think that this idea that it's somehow a propaganda

01:09:56.680 | tool around, you know, programming our youth, I think

01:09:59.680 | that's a moral panic that's been exaggerated.

01:10:02.240 | What do you think the odds are that Tick Tock is hacked to

01:10:06.080 | allow you to passively listen even when the app is not being

01:10:08.680 | used? Zero? You think it's definitely zero?

01:10:13.040 | No, like 5%. I think that's very unlikely. Yeah. Because so

01:10:17.720 | someone said that that was that was a there was some code that

01:10:23.080 | enabled that in the early version of the app. And then

01:10:25.360 | some other people audited it. And they said they did not find

01:10:27.920 | evidence that there was any technology. And Apple's got a

01:10:30.080 | very good audit system for this.

01:10:31.400 | Did the same people audit WhatsApp? And then it turned out

01:10:35.000 | that it was

01:10:35.760 | passively listen. Yeah, that's what's that passively listen.

01:10:39.120 | That's one of the it's one of the most well known breaches.

01:10:41.360 | Well, maybe they do. Maybe it's

01:10:43.480 | 100% certain that the CCP is using it because they this

01:10:47.200 | people have tracked already journalists using it. So if

01:10:50.000 | they've already done it, it's 100% I don't know about the

01:10:52.160 | passive listening, but any thoughts on 50% plus of young

01:10:55.520 | people getting their news here to my any news on that. I mean,

01:10:58.400 | obviously, we don't have evidence that it's being used

01:11:01.120 | currently to manipulate people, but it's over 50% of young

01:11:03.840 | people are now getting their news there, or say they're

01:11:06.280 | getting their news.

01:11:06.840 | I met more than 50% of young people are getting their news

01:11:09.840 | from podcasts, and those podcasts get chopped up and

01:11:12.440 | clipped. And then people watch them on Tick Tock for sure. That's

01:11:15.960 | how it's happening.

01:11:16.920 | There are a lot of people who think this show is a Tick Tock

01:11:19.880 | show. They don't know it's a big show.

01:11:22.040 | We'll have to prepare for a brave new world in the following

01:11:26.640 | way. There was an article, I think it was in the Wall Street

01:11:29.200 | Journal that said that Russia and Iran were paying low level

01:11:34.360 | street criminals to create chaos. Okay, and I and I read

01:11:38.400 | that article. And I thought, Okay, well, what does this mean

01:11:41.480 | if you actually extrapolate this, which is that the hot wars

01:11:47.200 | are very complicated, not worth doing. These disruptive

01:11:52.000 | fissures are the better way to sow chaos. And it occurred to me

01:11:57.040 | then that tying this back to something that we saw before, it

01:11:59.640 | does make sense for a lot of folks to sponsor a lot of

01:12:03.680 | longtail content that say a lot of different things. I think

01:12:06.480 | that that just is pretty obvious. And so I think that if

01:12:11.200 | you put these two ideas together, it stands to reason

01:12:14.360 | that a lot of people will be paying influencers a lot of

01:12:18.720 | money to create all kinds of content that is specific to a

01:12:23.240 | perspective that they have. And then on top of that, if you can

01:12:25.800 | algorithmically amplify one over the other, you know, you're

01:12:29.440 | you're going to have issues. Is it the biggest issue in the

01:12:32.440 | world? Probably not.

01:12:33.560 | That probably wouldn't swing an election, but it would cause

01:12:37.520 | chaos. And we just had the Southern District of New York

01:12:40.760 | target that Russian, Russia Today was giving $10 million to

01:12:46.320 | four podcasters, they didn't even know they were getting paid

01:12:48.360 | by the Russians, they just picked them because they like

01:12:50.040 | their opinions. And they gave them 100,000 an episode to

01:12:53.480 | promote pro Russian positions.

01:12:56.600 | If the Russians were actually doing it, it's the stupidest use

01:12:59.480 | of $10 million ever. Because great news podcasters already

01:13:03.840 | had their own channels, they're already putting out lots of

01:13:05.760 | content. And this other content is a drop in the bucket, I think

01:13:08.880 | your mouth, the issue with what you're saying is just, there is

01:13:11.520 | so much content out there already. People create it for

01:13:14.600 | free, people create it, you know, because they're they have

01:13:17.960 | a career in it. There's a whole long tail of influencers, there

01:13:21.280 | is so much content out there already, through podcasts,

01:13:25.360 | through websites, it's all being chopped up, that trying to do

01:13:28.440 | it as some sort of disinformation strategy, I think

01:13:31.840 | is very hard to do, because it's just when there's billions and

01:13:34.640 | billions of impressions, any effort that you try to engineer

01:13:39.120 | ends up just being a drop in the bucket. I agree. So yeah, it's

01:13:42.080 | that's the problem. But yeah, it makes sense in theory, it's very

01:13:46.520 | hard to do in practice.

01:13:47.600 | Yeah, the goal is not to win any specific argument. It's to

01:13:52.360 | create mistrust in the entire news ecosystem in the

01:13:56.800 | information system so that people give up trying to figure

01:13:59.760 | out what the truth is. And that's what the Russians are

01:14:03.080 | doing that on their own. Yeah, I mean, you could argue the

01:14:06.760 | distrust, as are the Russians paying off podcasters. Okay,

01:14:10.800 | let's get $10 million going to accomplish anything if that

01:14:13.560 | story is even very simple. Great question. Great question. May

01:14:16.480 | answer it. Great question. theory, not a conspiracy there

01:14:21.640 | at all. These were very low level mid like, you know, tier

01:14:24.720 | B, CD podcasters. If you give them $100,000 per episode, they

01:14:29.360 | can spend more money buying cameras, promoting their shows,

01:14:33.160 | hiring people. So you're just finding people and dropping

01:14:36.200 | money on their head so they can do more of the same. So it's a

01:14:38.920 | very smart strategy. In fact, I think,

01:14:40.520 | I think it's the stupidest thing I've ever heard that they took

01:14:42.960 | podcasters who are already successful and paid them to

01:14:45.600 | release content through a less watched channel. That's the

01:14:49.440 | yes, it was it was just more about getting the money to

01:14:52.200 | produce more content. And then they in these guys are on these

01:14:56.160 | guys already live streaming like 24 seven. Oh, there's a puppy.

01:15:00.000 | Oh, here he goes. Freeberg trying to win more people over

01:15:03.000 | with this puppy love. Unbelievable. This guy is

01:15:06.400 | absolutely ridiculous. Unbelievable. All right, listen,

01:15:11.600 | let me give Saxon red meat here. He got he got his little steak

01:15:14.680 | tartar with my Russia today story that you little amuse

01:15:18.160 | bouche. And now I give you your tomahawk. You're ready, Sax. You

01:15:21.880 | want your tomahawk? You want it rare? Here it comes. 2024

01:15:26.440 | election update the betting markets and polling indicate a

01:15:29.680 | really tight race but maybe Trump is surging this week

01:15:33.080 | polymarket which is a betting market has Trump 55 to 45

01:15:37.880 | versus Kamala Kalshi another betting market 5248. Trump

01:15:42.680 | bovada and points bet those are offshore booking and polymarket

01:15:47.000 | is also offshore. 5248. Trump, Nate silver friend of the pod.

01:15:51.920 | His algorithm has it 5347 Kamala real clear polling. That's an

01:15:58.480 | algorithm has Kamala with a two point lead. New York Times

01:16:01.760 | Siena, Kamala with a three point lead Reuters Ipsos pretty well

01:16:05.520 | trusted three point lead for Kamala NPR PBS Marist poll has

01:16:10.800 | Kamala with a two point lead. So sport books and betting markets

01:16:15.560 | are favoring Trump slightly, while the polls are slightly

01:16:19.560 | favoring Kamala sacks. I sliced it up nice for you. You got nice

01:16:25.080 | 10 slices of meat here, which slice you going for?

01:16:27.680 | Well, I think your recitation of the polls, they're kind of mixes

01:16:32.680 | up a couple of things. There's popular vote polls. And then

01:16:35.360 | there's electoral college, which goes here by state. If you look

01:16:38.040 | at pretty much now all the main pollsters, you look at Tony

01:16:42.200 | Fabrizio, you look at real clear politics are now showing that

01:16:45.880 | Trump is winning the electoral college right now he is up in

01:16:49.520 | almost every swing state, including I think, Michigan,

01:16:52.800 | which is pretty surprising. Clearly, there's been a huge

01:16:55.320 | swing towards Trump over the last week or two. And look,

01:16:59.640 | there's still 25 days to go. So anything can happen. I don't

01:17:01.560 | want to overstate this. But yeah, this is a good example

01:17:03.560 | right here.

01:17:04.240 | Showing that I think colleges is 296 to 242. What is Fabrizio?

01:17:11.040 | He's just a Republican pollster. But his accuracy is pretty

01:17:13.880 | high. I've never heard of Fabrizio.

01:17:15.640 | Well, another guy who I think is more neutral is Mark Halperin,

01:17:19.880 | who is a pundit who has been very accurate this election

01:17:23.640 | cycle. Remember, he's the one who broke the scoop that Biden

01:17:26.760 | would be replaced by Harris. And he even said exactly what

01:17:30.800 | happened. And he predicted it down to the day. He was exactly

01:17:35.560 | right about that. And if you follow his account, he is now

01:17:38.800 | saying that both Republican and Democrat insiders that he talks

01:17:43.480 | to are both saying the same thing, which is their internals

01:17:46.560 | are now showing Trump ahead in every swing state or almost

01:17:51.080 | every swing state. And things seem to be breaking Trump's way

01:17:54.600 | right now. Again, there's 25 days left. But if you're

01:17:57.840 | wondering why is Harris all of a sudden doing interviews is

01:18:01.280 | because their internals started showing that she was in trouble.

01:18:04.160 | So they decided to get her out more.

01:18:06.640 | And or is it the other way? Is it that the her Howard Stern

01:18:10.560 | interviews or whatever are causing her to lose votes?

01:18:12.760 | Well, yeah, exactly. Well, so which one is it? Because I

01:18:15.320 | don't know when I don't have the dates of all these polls versus

01:18:18.040 | that. No, I

01:18:18.600 | think it's it's what I predicted a couple of months ago. It's the

01:18:21.120 | doom loop. So what I said two months ago is that if Harris

01:18:24.520 | gets behind, she's gonna have to abandon this sort of basement

01:18:27.720 | strategy of not doing interviews. She has to start

01:18:29.840 | doing interviews. The problem is she's not good at interviews.

01:18:32.520 | And if she does more interviews, she's gonna fall further behind

01:18:34.760 | the polls. And it could cause a doom loop. So that's where we

01:18:38.280 | appear to be right now. I said that on August 30.

01:18:40.360 | Okay, to Matthew, that's, I think that Donald Trump has

01:18:44.960 | basically stuck to his strategy, which is he is a generational

01:18:51.720 | retail politician. I just heard parts of what he did with Andrew

01:18:57.400 | Schultz. Another great sort of, you know, podcast. I think

01:19:02.800 | David's right, that the editing and the massaging of the Kamala

01:19:07.440 | Harris talking points are galvanizing the people that have

01:19:12.760 | already decided and turning off the people that have already

01:19:15.080 | decided to vote for Trump, and she's losing the folks in the

01:19:17.840 | middle. And so this is what's causing her to have to be out

01:19:21.240 | there. And, and she's going to have to deliver a very crisp

01:19:24.680 | message. And I and I think that right now, it's been a little

01:19:29.520 | bit lacking, which is why you're seeing the polls, at least the

01:19:33.480 | Electoral College, which is really what matters at this

01:19:35.600 | point, turn Trump. So she's going to have a bit of an uphill

01:19:41.480 | fight between here in November. The other thing I'll say is that

01:19:44.440 | if you've seen what's happening in the appellate court, it's not

01:19:47.960 | clear whether the Trump case is going to get overturned before

01:19:52.520 | the election. But if that does, that could be very meaningful

01:19:56.600 | momentum for him. And then I think the third thing is that we

01:20:00.800 | should now buckle in because if the last two elections are any

01:20:05.320 | guide, there are going to be a bunch of spanners in the works

01:20:10.240 | between now and November. What do you say spanners? spanners in

01:20:14.000 | the works? Yeah. What does it mean? What do you call it wrench

01:20:16.680 | in the system?

01:20:17.280 | You mean like an October surprise? You mean like some

01:20:20.160 | crazy turn of events? Okay. Freeberg, any thoughts here?

01:20:23.800 | Would you like to Rorschach test this and see what you want in

01:20:26.480 | the numbers? Or do you have some objective thoughts here? What

01:20:29.560 | are what's your, what's your take? You know, there's polling

01:20:33.760 | data? Or Yeah, where we're at in the election, you're pretty open

01:20:37.480 | ended here, you can look at the, you can make a note on overall

01:20:41.600 | what you see between the betting markets and the polls and that

01:20:45.520 | disparity, you could just talk generally about where you think

01:20:49.080 | we are, you could talk about Kamala on Howard Stern and doing

01:20:52.200 | a bunch of interviews with friendlies. Where are you at

01:20:54.960 | right now? I didn't see her interviews. Okay. I saw some

01:20:58.560 | excerpts on Twitter. Oh, boy. Yeah.

01:21:01.480 | Let me just follow up on a point Shemoth made. Shemoth said that

01:21:03.920 | she had to be crisp. If you look at any of these interviews are

01:21:07.360 | the opposite of crisp. She's asked softball questions by by

01:21:10.160 | like Stephen Colbert saying, why are you running for president?

01:21:12.720 | How are you different than Joe Biden? Yeah. And she doesn't

01:21:16.280 | have good answers. She starts free associating. She gives

01:21:19.480 | these very long winded answers that don't go anywhere. She says

01:21:22.440 | she can't think of a single way. She's different than Joe Biden

01:21:25.520 | when when pushed on that. It's very strange. These are

01:21:29.280 | most favorite shows, I wish you would do some challenging shows.

01:21:32.640 | I think she's got to do Joe Rogan, all in. And what would be

01:21:37.320 | another good podcast for her do tomorrow, if she really wanted

01:21:39.960 | to, like, do the adversarial thing or something?

01:21:42.400 | Never say never cereal, just come to all in. Come and have a

01:21:46.240 | conversation. Come and have a normal conversation here. Yeah.

01:21:48.760 | No, I'm just thinking like, it seems like sex if she comes in

01:21:53.280 | has a has a conversation. You'll be respectful. Yeah.

01:21:57.120 | This whole idea that I didn't treat Cuban respectfully is

01:21:59.920 | nonsense. Just watch the tape. I don't keep all that.

01:22:02.800 | Somebody asserted that.

01:22:05.880 | No, I mean, that all if you look back on every single presidential

01:22:11.560 | related one we did here, they were all respectful. And they

01:22:14.520 | were all conversations. I think the Cuban one dipped because of

01:22:17.720 | both of you into a bit more of a debate. And it was a lot more

01:22:20.160 | crossover than

01:22:20.960 | he wanted that. That's what

01:22:22.200 | bring back to him. He likes to come out. He likes to do his

01:22:27.000 | thing. Yeah, that's exactly what you look at all the other ones.

01:22:29.880 | I'm trying to think of a moment where it if you look at the

01:22:32.840 | other Dean B. Phillips, Chris Christie, the Vivek boring, got

01:22:37.880 | to go. Love you guys.

01:22:38.840 | This has been another amazing episode of the all in podcast

01:22:43.560 | episode 199. Make sure you go to all in.com slash meetups. Make

01:22:48.720 | sure if you're starting a company, you go to founder dot

01:22:50.480 | university. If you're an engineer, what do you do is go

01:22:53.360 | to I'm doing okay, please. David Sachs, make sure you go to super

01:22:58.800 | glue AI if you're an engineer, and if you like potatoes, go to

01:23:03.280 | a hollow calm and order your potatoes pre order a

01:23:05.600 | subscription. I mean, if we're doing it, let's sell some super

01:23:08.680 | tomorrow. Okay, so 8090 8090 8090 control. We'll see everybody

01:23:14.800 | next time on the all in.

01:23:16.560 | Let your winners ride.

01:23:21.640 | Rain Man David Sachs.

01:23:24.520 | We open source it to the fans and they've just gone crazy with

01:23:31.120 | it. Love you guys.

01:23:32.160 | I'm the queen of quinoa.

01:23:33.680 | Besties are gone.

01:23:41.600 | That's my dog taking a notice in your driveway.

01:23:45.160 | We should all just get a room and just have one big huge orgy

01:23:53.560 | because they're all just useless. It's like this like

01:23:55.400 | sexual tension that they just need to release somehow.

01:23:58.840 | What your BP? Your BP?

01:24:03.360 | We need to get Merck is our

01:24:05.680 | going all in. I'm going all in.

01:24:15.360 | (upbeat music)

Hurricane fallout, AlphaFold, Google breakup, Jayter's Ball, VC giveback, TikTok survey

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