E102: Elon closes Twitter deal, $META uncertainty, Zuck's historic bet, big tech decline & more

00:00:00.000 | My stance really took over the comment board.

00:00:02.520 | Yeah, Saks, how was your week off when you gave up on the pod for a week and then did

00:00:08.080 | four media appearances for 90 minutes each on other pods?

00:00:11.040 | You did six hours apart.

00:00:12.280 | You took off from this pod to give your ratings to Megyn Kelly and Dave Rubin.

00:00:17.120 | Yeah, I did a 45 minute hit with Dave Rubin on Ukraine.

00:00:21.600 | So be sure to check that out.

00:00:23.200 | And then, yeah, did I do no Megyn, Megyn Kelly, Freeberg and I did that the week before.

00:00:28.720 | Was that this week?

00:00:29.720 | Surprisingly, she didn't invite you back.

00:00:31.280 | Yeah, I don't know what could have happened.

00:00:33.160 | So great.

00:00:34.160 | It was so great.

00:00:35.860 | That was awesome.

00:00:36.860 | I love Megyn Kelly.

00:00:37.860 | Didn't she call you a prick?

00:00:38.860 | Yeah, she did.

00:00:39.860 | She did.

00:00:40.860 | And she only knew me for 45 minutes.

00:00:41.860 | Usually that takes like three or four days.

00:00:43.480 | She just got right to it.

00:00:49.280 | Rain man David Saks.

00:00:50.040 | And it said we open source it to the fans and they've just gone crazy with it.

00:00:57.040 | Love you guys.

00:00:58.040 | Nice.

00:00:59.040 | Queen of quinoa.

00:01:00.040 | Saks, we have not had such negative panning comments on YouTube since J.

00:01:06.600 | Cal got brigadooned for his pro Ukraine rhetoric a few weeks ago.

00:01:10.720 | Now I'm getting brigadooned for Saks not showing up.

00:01:13.280 | I get brigadooned for asking him a question.

00:01:15.680 | Then I get brigadooned from him not showing up.

00:01:17.040 | So maybe you're not getting brigadooned.

00:01:18.040 | I don't know.

00:01:19.040 | I'm just honest.

00:01:20.040 | When will you guys realize that there are three to 5 million people a week that listen

00:01:24.600 | to this podcast?

00:01:25.600 | 100 nitwits who comment on YouTube.

00:01:29.240 | They're neither right nor wrong.

00:01:30.760 | They should just be completely ignored.

00:01:33.240 | Turn the comments off.

00:01:34.240 | The only thing that matters are the ratings.

00:01:36.040 | If you care about that at all.

00:01:37.600 | And last week was one of the best rated shows we've ever done.

00:01:40.720 | I think it was highest rated after Elon's episode.

00:01:43.180 | It would have been even better with David.

00:01:45.360 | So we should brigadoon the brigadooners.

00:01:48.560 | Those nitwits should be ignored.

00:01:50.120 | I think this is a little bit like a band where like you can't mess with the chemistry of

00:01:54.880 | the band.

00:01:55.880 | And that's the lesson.

00:01:57.360 | Even though there's a lot of infighting in the band, like it just works.

00:02:01.560 | It works.

00:02:02.560 | And so you don't want to second guess it too much.

00:02:04.360 | Well and then if somebody from the band gets sick and somebody sits in, even if it's like

00:02:08.160 | you get some incredible guitar players sit in, people are like, that's not the guitar

00:02:11.240 | player who I have the T shirt of.

00:02:13.800 | I need my guitar player back.

00:02:15.600 | All right.

00:02:16.600 | Anyway.

00:02:17.600 | I'm glad Ringo showed up 22 minutes late.

00:02:19.480 | Welcome back, Freeburg.

00:02:20.480 | Let's get started.

00:02:21.480 | Sorry.

00:02:22.480 | I don't mean to fuck with the band.

00:02:23.480 | I'm not going to fuck with the band.

00:02:28.760 | Ringo was an underrated drummer.

00:02:31.400 | Freeburg, you have a role here.

00:02:34.480 | That's amazing.

00:02:35.480 | I think you're more like the drummer of J. Cal.

00:02:37.720 | Freeburg maybe bass, maybe bass player.

00:02:40.600 | You know I'm John Lennon.

00:02:41.600 | George Harrison.

00:02:42.600 | George Harrison.

00:02:43.600 | Yeah.

00:02:44.600 | Actually George Harrison, very underrated, but I, you know, I'm, I'm pretty clear.

00:02:46.840 | Have you guys ever heard the version of Blackbird that Paul Picard did just with the ukulele?

00:02:52.920 | No, I'd like to hear that.

00:02:54.720 | Maybe one of the best songs ever recorded.

00:02:57.160 | One of the best records I've ever heard.

00:02:58.800 | Fantastic.

00:02:59.800 | Incredible.

00:03:00.800 | All right.

00:03:01.800 | Listen, there's so much to start with, but I think birds swimming in the dead of night.

00:03:06.000 | Take these broken wings and learn to fly.

00:03:10.400 | All sax life.

00:03:13.320 | Guys, were you at a building on market street yesterday by any chance?

00:03:17.800 | No fly zone.

00:03:18.800 | The homeless shelter.

00:03:19.800 | Well, I think you can talk about abandoned homeless shelter.

00:03:26.160 | I think it's fair to say that there will be a lot of people that we know that will go

00:03:31.800 | and help make market street better.

00:03:35.180 | Make market street great again.

00:03:37.320 | Make market street great again.

00:03:39.000 | Absolutely.

00:03:40.000 | I'm looking forward to some tofu salads and meditation.

00:03:43.480 | Namaste.

00:03:44.480 | Literally, I think 8000 square feet is meditation rooms that haven't been used in five years.

00:03:50.760 | Quite honestly, though, like on the other side of this, I would say Prague Agrawal does

00:03:53.760 | deserve a statue for shareholder value creation.

00:03:56.760 | What he what 5420 a share, which by the way, we said was going to happen and it did happen

00:04:01.720 | was ginormous in this market.

00:04:04.760 | And I just want to see the look on that barista's face when they're warming up the oat milk.

00:04:12.000 | When a band of very, very tough knuckled company builders walks through that door.

00:04:19.400 | Yeah, the only has left the building.

00:04:21.880 | Let's just leave it at that.

00:04:23.160 | Wow.

00:04:24.160 | So I guess we can talk about it now.

00:04:25.600 | Elon has closed closed.

00:04:27.440 | Yes, we can talk about it.

00:04:29.320 | Well, no, I'm just saying sax and I could not talk about this because we had, you know,

00:04:34.120 | we couldn't talk about it for legal reasons.

00:04:36.360 | They deserve a statue in front of the bronze statue for shareholder value creation on Market

00:04:42.040 | Street in front of that Twitter building.

00:04:43.960 | Best tech CEO of the year.

00:04:46.280 | All right, girl, hold on a second.

00:04:48.640 | So your theory is that he did such a bad job in terms of suppressing viewpoints and censorship

00:04:56.580 | that he actually induced Elon to want to buy the company so he could fix their censorship

00:05:02.600 | problem.

00:05:03.600 | My theory, my theory is simpler than this, which is they got great representation to

00:05:10.520 | do a very bulletproof deal.

00:05:13.600 | And it turns out that contract law still matters in the United States.

00:05:18.000 | And Elon did the right thing and just said, you know what, I'm going to own this thing

00:05:21.080 | and probably double or triple my money.

00:05:23.240 | So I'm just going to go and do it.

00:05:25.080 | And I'll do it for the benefit of everybody else.

00:05:27.440 | But my point is more that they and the board had the wherewithal to fight because you know,

00:05:35.080 | that they could have easily gotten intimidated and capitulated.

00:05:39.080 | And in doing that, whether they were right or wrong or good or bad is irrelevant to me.

00:05:43.720 | They represented shareholder values well, and they got shareholders paid in a moment

00:05:47.780 | where the stock market is still down 2030 40% where big tech is down 50% some of these

00:05:53.320 | big tech companies are on 80%.

00:05:55.800 | These guys sold the company at a premium.

00:05:57.720 | And so that just, you know, we just have to acknowledge that that happened.

00:06:00.720 | That's all.

00:06:01.720 | I wanted to just give you a little bit of background on Twitter historically, you know,

00:06:04.960 | in 2013, the stock was trading at $69.

00:06:10.440 | And it got sold for 54.

00:06:12.120 | Like this company has been sideways for a decade, essentially, in terms of its market

00:06:17.200 | cap.

00:06:18.200 | So, but there's no doubt that I think Elon can turn this around pretty quickly.

00:06:26.000 | And make it massively profitable, I think and clean up the bot problem.

00:06:30.520 | Very quickly.

00:06:31.520 | If you can land two rockets at a time create self driving cars.

00:06:34.760 | I think you can figure this out.

00:06:36.560 | This isn't rocket science and Elon's done rocket science.

00:06:40.080 | So I think he's gonna figure it out.

00:06:41.400 | Right.

00:06:42.400 | Yeah, for what it's worth, I think Elon's really excited about it.

00:06:45.120 | And there is tremendous potential at Twitter.

00:06:48.160 | I mean, the company's been sideways because it hasn't done that much in 10 years.

00:06:52.200 | But there's so much you can do with that product.

00:06:54.440 | It's just, you know, there's a ton of potential.

00:06:57.240 | I think the best way to think about it is he bought a quarter of a billion mouths for

00:07:02.320 | $44 billion.

00:07:04.680 | And in the grand scheme of things, that is, I think going to turn out to be pretty reasonably

00:07:09.760 | cheap.

00:07:12.320 | Especially if he can layer in a few of his bigger ideas.

00:07:16.920 | And I think that those mouths, the value of those monthly active users could probably

00:07:20.920 | double or triple pretty quickly.

00:07:22.440 | Right.

00:07:23.440 | I think that was the so I just sent you guys this link from this analyst.

00:07:27.920 | And he said that Twitter was bought at $172 per monthly active user compared to $81 per

00:07:35.320 | monthly active user at meta, where they sit today.

00:07:39.640 | So but that's but that's for a very different point, which we can double click into because

00:07:43.040 | meta is its own bag of, you know, it's a little bit of an unfortunately, you know, a bit of

00:07:49.800 | a dumpster fire, attached to it.

00:07:52.120 | And I'll explain why because the meta the meta problem is, it's, it's a deep and a very

00:07:58.320 | dangerous situation that they've put themselves in, which is why their mal values are this

00:08:03.720 | low.

00:08:04.720 | But you know, if you had done this analysis a few years ago, the trade was looking at

00:08:10.920 | metas mal values being so high, where you would have said, Why isn't Twitter doing more?

00:08:16.080 | So I know that this, this is a little bit, in my opinion, cherry picking.

00:08:20.320 | Yeah, I think making everything verified in a path to verification, which Ilana has talked

00:08:26.440 | about publicly many times and payments, you know, he's talked about publicly many times,

00:08:31.240 | just those two things alone, could make the experience of being on Twitter, absolutely

00:08:36.720 | delightful.

00:08:37.720 | If everybody could verify themselves, this thing could turn around so quickly.

00:08:40.600 | I'll say I'll say what you're saying in a slightly more, I think the most powerful change

00:08:44.240 | that Twitter could make today is there are two classes of users, people who are verified

00:08:50.840 | real world identity.

00:08:52.440 | Yeah.

00:08:53.440 | And people who want to stay anonymous.

00:08:55.520 | Correct.

00:08:56.520 | There is 100% distribution firehose for people who are real.

00:09:01.440 | And there is a firehose for fake people or fake names that you need to pay to amplify.

00:09:07.920 | Just that one simple change will cut through all the nonsense.

00:09:10.520 | Yeah.

00:09:11.520 | Because if you want to see where the money is being spent, you will be able to see very

00:09:15.800 | quickly because otherwise, there'll be virtually no distribution for anonymous fake people.

00:09:21.160 | And it'll force those people if they really want to be heard, then and that there's something

00:09:25.120 | valuable to say to spend against it.

00:09:28.400 | Well, it really is about the Brigadoons.

00:09:30.800 | And Elon's been very clear about this, you know, it's pretty easy to get rid of the bots.

00:09:35.080 | And if people are opting in to putting themselves into the top class of verified users, well,

00:09:39.920 | that's a revenue stream, right?

00:09:41.440 | And so all of a sudden, you know, I don't know how many millions of people would instantly

00:09:45.480 | say, I'll pay for this for five or 10 bucks a month.

00:09:48.200 | I think you're right.

00:09:49.200 | And I think like what we want to do is like, you know, no offense to all the people out

00:09:52.800 | there, although I don't really care, but no offense, but you cannot use Twitter as a coping

00:09:58.080 | mechanism.

00:09:59.080 | Okay?

00:10:00.080 | Like, I get that life is hard, or that, you know, life hasn't lived out to your expectations,

00:10:04.720 | or, you know, there's envy and whatever of other people, but to go out there and spew

00:10:09.080 | hate doesn't solve anything.

00:10:11.520 | We talk about Brigadoons.

00:10:13.480 | Well, there's also just a lot of people that are just in general.

00:10:18.080 | They're just they're just mean.

00:10:20.000 | And I'll give you a perfect example.

00:10:21.480 | There was a woman that I saw on tik tok.

00:10:24.760 | And she's like, you know, been married for 13 years, mother of two kids.

00:10:29.800 | And she was, she had a thing that went viral, where she was talking about who's in charge

00:10:34.840 | her or her husband, and it was a very funny little thing.

00:10:37.200 | And so I followed a couple of her videos just to see what else she had posted.

00:10:41.360 | And one of the videos was how she has some complicated health issues, which she was very

00:10:45.360 | public about PCOS and how it causes, you know, issues in losing weight.

00:10:51.000 | And she posted a pre and post picture of her, which takes a lot of courage.

00:10:56.340 | And she was like Brigadoon.

00:10:58.980 | And it's like, what is wrong with these broken people that have to give this woman a hard

00:11:04.160 | time.

00:11:05.160 | And it just it took so to me, these social media channels are not coping mechanisms,

00:11:10.280 | they were never meant to be.

00:11:11.800 | And so, you know, if they have to go to 4chan or 8chan or Reddit or whatever, better to

00:11:18.040 | sort of create these honeypots of hatred, then to have it spew everywhere, because it

00:11:23.040 | makes for the rest of us these platforms to be unusable.

00:11:26.080 | Saks, you were the CEO of PayPal with Elon and Roloff and TL and everybody in that crew

00:11:32.920 | over 20 years ago, and verified you understand pretty well, because you yourself have been

00:11:38.480 | Brigadoon of late, and you've experienced this firsthand the psychological torture that

00:11:44.560 | made you take a week off from the show, in fact, because you were so under duress.

00:11:48.200 | I'm kidding, you had a planned week off, you're allowed to have vacation.

00:11:51.880 | Which of the two ideas is the bigger idea?

00:11:54.200 | Payments, making Twitter into PayPal, including that x.com, which was the original name of

00:11:59.720 | that was Elon's payment company, and he owns a domain x.com.

00:12:03.840 | Which is a bigger idea, the payments, or the verification?

00:12:08.660 | Which is the bigger idea for increasing shareholder value?

00:12:11.920 | Which would you do first?

00:12:12.920 | I mean, payments is an entire roadmap, right?

00:12:16.240 | So there's a lot that could be done there.

00:12:18.360 | Explain.

00:12:19.360 | Well, I mean, it's, it's about I mean, you could layer on a lot of services on top of

00:12:23.480 | that.

00:12:24.480 | So it's not just like one feature.

00:12:26.280 | Look, I think they're both compelling in terms of where they could lead.

00:12:29.400 | I think what's amazing about Elon as an entrepreneur is he always starts with a mission.

00:12:35.680 | And then he figures out how to turn it into a great product and a great business.

00:12:39.120 | So for example, with SpaceX, the mission was to get to Mars to make life multi planetary,

00:12:44.800 | you would think that'd be a spectacularly unprofitable business.

00:12:48.200 | But in the course of pursuing that mission, he figured out the launch business.

00:12:52.360 | And then the satellite business was Starlink.

00:12:53.680 | And I think Starlink is going to be a phenomenal business.

00:12:57.720 | And likewise, with Tesla, he started with the mission of moving the world to sustainable

00:13:01.560 | energy.

00:13:02.560 | Yeah.

00:13:03.560 | And in the process of doing that, he created the world's best car, not just the world's

00:13:06.960 | best electric car, but I just think it's the best car in the world.

00:13:10.120 | And Tesla is this amazing business today.

00:13:11.800 | It's so far ahead of every other car company.

00:13:14.000 | So look, I think what's cool about what Elon is doing is he's starting with this mission

00:13:19.160 | of restoring Twitter to being a free speech platform of being the town square, it was

00:13:24.600 | always meant to be.

00:13:25.960 | And in the process of doing that, he's going to figure out how to make Twitter into an

00:13:29.360 | even better product and into a great business, which is not today.

00:13:33.120 | I think Twitter's losing, you know, a few hundred million dollars a quarter.

00:13:36.240 | So there's work to do on all those fronts.

00:13:38.720 | But I think, you know, it's really impressive to see.

00:13:42.720 | And you know, he's still operating at the top of his game.

00:13:44.720 | I mean, 20 years after PayPal, some of us are just doing a podcast, but he is, he's

00:13:49.720 | still like, some of us are exhausted.

00:13:52.720 | We're tired, but we're tired.

00:13:54.920 | He's like working 16 hour days.

00:13:56.600 | He's been leveling up for 20 years.

00:13:58.800 | And at this point, he's like a level 99 major something.

00:14:02.520 | No, he's like a crazy.

00:14:05.160 | It's amazing to see.

00:14:07.040 | Freeberg, the biggest issue I perceive in the short term for Twitter is going to be

00:14:12.560 | what to do with people like Trump and Kanye West or yay.

00:14:17.760 | And of course, that's all going to seem like Elon is making those decisions as an individual

00:14:23.160 | as opposed to for the platform, etc.

00:14:25.480 | Should he let somebody like Kanye West, I'm sorry, yay is he likes to call himself who

00:14:30.160 | was in the middle of an obvious manic episode back on the platform?

00:14:34.200 | Should he let Trump back on the platform?

00:14:35.720 | How do you think he should handle those two polarizing individuals specifically?

00:14:40.280 | Look, I mean, I think this is what's going to be really interesting to watch because

00:14:44.240 | there have been very successful, very inspirational, very intelligent, very creative entrepreneurs

00:14:51.120 | that have started and built generally kind of open platforms at the beginning, only to

00:14:57.120 | over time, be challenged with the content that doesn't feel appropriate.

00:15:03.800 | And then they come back and they make the necessary kind of moderation guidelines and

00:15:07.120 | they make the necessary edits to the way the platform operates.

00:15:10.000 | This is how Google operated originally, you know, and then they ended up saying, you know

00:15:14.000 | what, if we're going to be in China, we do have to create a censored version of the internet.

00:15:17.200 | And they did that.

00:15:18.200 | And that was controversial.

00:15:19.880 | With YouTube, they've got a lot of censoring, and it was supposed to be just a generally

00:15:22.720 | open platform for anyone to use.

00:15:25.000 | And they were even Larry and Sergey were kind of flouting DMCA at the beginning.

00:15:29.500 | And they were like, it's not our job to monitor copyright, you have to file a takedown notice.

00:15:33.160 | And they kind of waved their hands in the air.

00:15:35.160 | Over time, they realized that that could actually damage and completely ruin the platform.

00:15:38.800 | And they had to go in and create guidelines and moderation systems.

00:15:42.360 | And the same was true of Ev and Jack at Twitter.

00:15:46.160 | The same was true of the founders at Reddit.

00:15:48.400 | And I don't know if you guys, you know, remember that period of time when Ellen Powell was

00:15:51.720 | CEO of Reddit, and she went in and cleaned up a lot of the bullying and harassment and

00:15:56.400 | nastiness that was going on on Reddit.

00:15:58.120 | And she got a lot of controversy for why are you closing it down?

00:16:00.800 | Why are you censoring it?

00:16:02.120 | Elon is a reasonable person.

00:16:04.620 | And he's going to be faced with unreasonable people on this platform.

00:16:07.980 | And when that happens, he's going to have very tough decisions to make about what kind

00:16:11.600 | of platform he wants to have, what's the quality of that platform going to need to look like.

00:16:15.400 | And then all of a sudden, he's gonna have to look in the mirror and say, did I step

00:16:18.480 | on the wrong side?

00:16:19.480 | And you know, he's, he's idealistic, and it's great.

00:16:22.400 | And it's wonderful.

00:16:23.400 | And I hope that he's successful.

00:16:24.920 | But to some degree, some amount of moderation is going to be necessary to create a high

00:16:28.520 | quality product.

00:16:29.520 | Would you allow?

00:16:30.880 | Would you if you were in charge yourself, freeberg?

00:16:34.000 | Would you put Trump back on the platform?

00:16:36.480 | And under what circumstances?

00:16:37.680 | And would you allow something like Kanye West back on the platform?

00:16:41.240 | At some point?

00:16:42.240 | Me, obviously?

00:16:43.240 | Yeah, you personally?

00:16:44.240 | Yeah, I think I'm gonna answer you personally on those two.

00:16:46.440 | Yeah, look, my content moderation guidelines.

00:16:49.280 | You know, it's, it gets very nuanced very quick.

00:16:51.800 | What do you allow people to say?

00:16:52.800 | What do you not allow them to say?

00:16:54.160 | And then if they violate them, is there the opportunity for a lifetime ban?

00:16:57.720 | I don't think so.

00:16:58.720 | I don't think anyone should have a lifetime ban on these platforms.

00:17:00.360 | So I'm totally would you do that for Kanye West, who has been saying crazy anti semitic

00:17:05.160 | stuff, which has real world danger.

00:17:07.160 | That's already started to spill over where people are putting up banners like Kanye's

00:17:09.960 | what right about the Jews.

00:17:11.760 | And they're putting up banners like over the, you know, 10 freeway, as you may have seen

00:17:16.120 | in Los Angeles, how would you deal with Kanye specifically in a manic anti semitic episode

00:17:20.360 | that he's been?

00:17:21.360 | Look, I think the question is anyone that's saying anything racist or whatever might be

00:17:25.360 | deemed kind of to fall in that category.

00:17:29.600 | There's a tagging mechanism, you have to figure out how to create the tagging mechanism.

00:17:34.160 | Based on that tagging mechanism, the default is it's like when you go to Google and you

00:17:37.800 | search for stuff, they exclude porn.

00:17:39.720 | So all porn content that's indexed on Google's index servers is indexes porn, and it's default

00:17:47.160 | off.

00:17:48.160 | There's a safe search thing you got to turn, I think off or something to access stuff that

00:17:53.480 | Google deems inappropriate.

00:17:54.720 | So how do you how do you how do you do that?

00:17:57.840 | No, but I think I by the way, I'll tell you when I worked at Google, we used to have pizza

00:18:03.440 | weekends where you would go into the office on the weekends, they give you free pizza,

00:18:07.240 | and everyone would tag, you'd watch porn, and you would tag porn.

00:18:11.080 | And so you basically go through the indexing servers, they show you images and Google images,

00:18:15.000 | and you click porn or not porn.

00:18:16.600 | And it was just like, Hey, come and volunteer, come and help us do it.

00:18:18.920 | And there was all these engineers sitting in the friggin cafeteria tagging porn.

00:18:23.040 | But actually, that happened to sacks.

00:18:24.760 | And he saw Tucker Carlson.

00:18:25.760 | And he said, Yeah, that's porn.

00:18:27.360 | That's, that's my, my personal for Yes, I think I think they're on Moncler had Yes,

00:18:31.440 | I think the same mechanism is needed on these social networks, which is that you have to

00:18:35.040 | figure out what you have to figure out a way to use AI to tag content.

00:18:39.560 | And think about them as cable.

00:18:41.000 | Just let me finish for one second, you think about them as cable, cable stations on a cable

00:18:44.720 | company.

00:18:45.720 | So they're the cable company.

00:18:46.720 | And there's different stations.

00:18:47.720 | And you as a user decide, what do you not want to opt into?

00:18:50.640 | And what do you want to opt into?

00:18:51.760 | What content you want to exclude from your version and your experience of Twitter.

00:18:55.960 | And if you're okay with the stuff Kanye says, you're okay with the stuff Trump says, you

00:18:59.680 | can keep that stuff in.

00:19:00.720 | If you want to exclude that type of content, it's excluded for you.

00:19:04.360 | And I think that's what Twitter ultimately has to become.

00:19:06.440 | What do you think, Chamath?

00:19:07.840 | Would you put Trump back on the platform?

00:19:10.160 | And seeing, you know, Kanye West having this manic episode and saying, you know, basically

00:19:15.200 | participating in hate speech explicitly?

00:19:17.960 | How would you handle those two specific instances in 2022?

00:19:21.320 | Going into 2023?

00:19:23.000 | I think that there has to be a way where nobody is banned forever.

00:19:28.720 | Okay, I think that when somebody is banned temporarily, they can be banned for any reason

00:19:34.120 | that violates a term of service that's well understood and uniformly enforced.

00:19:40.240 | And I think that's the right of a private company.

00:19:43.160 | But there has to be a way to get back on in the case of both of these folks.

00:19:48.720 | There should be a way to basically, you know, have because of the the step, the quantity

00:19:56.200 | of their reach, some sort of almost like tribunal or, you know, mediator that can understand

00:20:04.400 | what's going on.

00:20:07.080 | Because if somebody is going through a manic episode, it's absolutely right to turn that

00:20:10.640 | off.

00:20:11.640 | I mean, these guys should have turned him off much, much sooner.

00:20:16.240 | Because when you're in the middle of a mania, and I said this last week, like, you know,

00:20:19.960 | like, for example, like this, this relative of mine, when they're in a manic episode,

00:20:24.240 | it's 60 7080 emails a day and text messages 100 texts that I get.

00:20:31.400 | And they're honestly, they're vile.

00:20:34.040 | Yeah.

00:20:35.040 | Okay.

00:20:36.040 | And they don't even remember them half the time.

00:20:37.040 | And they don't even know.

00:20:38.040 | So and, and, you know, they go through paranoia, they go through mania, they go through these

00:20:42.220 | periods where they think they're completely right.

00:20:44.720 | They go through these periods where they look completely sane and normal.

00:20:48.400 | So, so it's a tough, the most important thing, when you have a family member in mental health

00:20:53.520 | crisis is to get the phone away from them.

00:20:56.600 | That is a weapon that only continues the loop and to re regulate this person.

00:21:02.140 | And then there should be a way to prove that you're back in a re regulated state to get

00:21:07.260 | these tools back.

00:21:08.260 | But I think that that needs to, we just need to acknowledge that there's just a lot of

00:21:12.800 | people with mental health issues.

00:21:14.100 | There's a lot of social media, there's a lot of damage that can be done.

00:21:18.200 | It's not to forgive these people.

00:21:19.760 | But it's to explain that in moments, you got to shut these channels down, and then give

00:21:23.320 | them a way to come back when they've re regulated.

00:21:25.840 | Sacks, how do you think about it?

00:21:28.080 | Well, with regard to Trump, I don't know what the continuing reason is for him not being

00:21:33.760 | allowed on the platform.

00:21:35.520 | Remember that when he was banned, it was considered to be a temporary measure because he was supposedly

00:21:42.240 | inciting a riot, right.

00:21:44.600 | So I think incitement to violence is legitimate grounds for taking down speech.

00:21:50.920 | But once that breach of the peace is over, I don't know why it would become a permanent

00:21:55.440 | ban as opposed to a timeout.

00:21:57.140 | So I don't even know how the companies continue to justify the ban on Trump, except for the

00:22:03.000 | fact that they just think that he's a threat to democracy.

00:22:05.480 | Well, I don't think that's for social networks to determine is that who gets to participate

00:22:11.400 | in our political process.

00:22:13.400 | So it's not necessarily the first thing I would do.

00:22:16.360 | But do I think that Trump should be allowed back?

00:22:18.400 | Yeah, I do.

00:22:19.840 | With regard to Kanye, it's a little more complicated because like you're saying, it's

00:22:25.600 | hard to know whether he's having a manic episode or he's just being Kanye.

00:22:30.500 | What he's saying right now is probably not in his own interest and probably it would

00:22:33.240 | be in his best interest to have a timeout.

00:22:35.680 | But what I would look for guidance here is there is a Supreme Court decision.

00:22:40.840 | And my general view on the content moderation is that these social networking companies

00:22:46.300 | should be looking for inspiration to Supreme Court decisions because Supreme Court's been

00:22:51.280 | wrestling with these issues for hundreds of years, whereas social networks are just making

00:22:55.280 | it up as they go along.

00:22:57.200 | And there are nine major categories of speech that the Supreme Court has said are not protected

00:23:01.960 | because they actually are dangerous speech.

00:23:04.120 | So for example, in this decision called Chplinsky v. New Hampshire, which came out in 1942,

00:23:10.560 | the Supreme Court held that so-called fighting words were not protected.

00:23:15.020 | And they define fighting words as speech that tends to incite an immediate breach of the

00:23:19.440 | peace through the use of "personally abusive language" that when addressed, the ordinary

00:23:25.000 | citizen is as a matter of common knowledge, inherently likely to provoke a violent reaction.

00:23:30.140 | So I would use that type of decision by the Supreme Court as inspiration to say that racist,

00:23:38.720 | misogynistic, homophobic and other racial and ethnic slurs shouldn't be allowed on these

00:23:45.780 | networks because it doesn't do anything to enhance the public debate.

00:23:50.480 | Now, there is a question like could Kanye frame his arguments in a way that is still

00:23:55.600 | incredibly offensive to us, but doesn't use slurs?

00:23:59.440 | Yeah, for example, he could say, hey, here are the top 10 media companies, here are the

00:24:03.520 | executives, here's the percentage that are Jewish.

00:24:06.040 | And this is, you know, my concern is that this is a, and here's the percentage of people

00:24:09.280 | who are Jewish in the population, you could some bullshit like that.

00:24:12.040 | And then you're like, okay, did he say something anti Semitic, you know, and you're kind of

00:24:16.160 | in this area.

00:24:18.080 | And there's always going to be edge cases, and people are always going to be pushing

00:24:20.400 | the envelope.

00:24:21.400 | And so listen, just because we find it offensive, and you know, it's specifically offensive

00:24:26.560 | to me, that doesn't mean that it should automatically be banned.

00:24:30.120 | I think slurs slurs banned or out but, but arguments, I don't know that we should be

00:24:35.160 | banning entire categories of arguments.

00:24:37.200 | And, and look, part of the problem here is that lots of people are hearing the arguments

00:24:41.400 | that Ye is making, whether he's making them on Twitter or not.

00:24:44.880 | And because he's there's a total ban, people can't really engage with him on Twitter.

00:24:50.740 | And so he's not getting off ramped from this rabbit hole he's falling into.

00:24:55.480 | And nobody else who might be a fan of his is hearing the other side of the argument.

00:24:59.800 | So I don't know that it's ultimately in the long term interest of the town square to be

00:25:05.240 | banning, you know, the argument, the you know, ACLU and other people have is like, hey, you

00:25:10.520 | put a little sunlight on these bad opinions, at least everybody knows who has the bad opinions,

00:25:15.240 | and you can fight them.

00:25:16.240 | Paradoxically, while we're talking, I mean, do you really want these folks going to the

00:25:19.440 | dark web and you know, being untraceable, there is some value in kind of knowing who's

00:25:24.100 | getting radicalized, and hopefully, exposing them to other opinions in the same conversation

00:25:28.760 | that can all frame them.

00:25:29.760 | Yeah, I mean, paradoxically, while we're talking, Ilan just tweeted at 1118 am, Twitter will

00:25:35.200 | be forming a content moderation council with widely diverse viewpoints, no matter no major

00:25:39.760 | content decisions or account reinstatements will happen before that council convenes.

00:25:44.680 | So he's going to take the same approach that Facebook has, they have a council as well

00:25:48.520 | that Zuckerberg tried to set up.

00:25:50.320 | So I think he realizes there should be a thoughtful discussion.

00:25:53.120 | So you're gonna be on that council?

00:25:55.200 | I have no idea.

00:25:56.200 | That sounds like a the worst purgatory you could ever be in is to be the person who has

00:26:01.000 | to make these decisions.

00:26:02.240 | Like, talk about a no win situation.

00:26:04.640 | I'm curious Chamath.

00:26:07.280 | We talked last week about Kanye and then Lex Friedman dropped his episode Lex came at it

00:26:12.280 | with he pushed back on Kanye.

00:26:14.880 | I don't know if you watch some of the highlights.

00:26:16.120 | I saw some of the highs he pushed back pretty hard.

00:26:17.560 | I watched the whole thing.

00:26:18.560 | Okay, so he pushed back really hard on the anti semitic stuff.

00:26:22.360 | And we had a discussion last week.

00:26:23.360 | I said, Hey, you can't platform this guy.

00:26:25.120 | But it looks like Lex had a specific point of view, which is he has a friendship with

00:26:31.280 | Kanye of some level.

00:26:32.860 | And he wanted to try to convince him in this manicness that he's wrong about things did

00:26:37.280 | do you think Lex succeeded?

00:26:38.960 | And he should have done it?

00:26:39.960 | I obviously we won't question Lex's intent.

00:26:41.480 | We know I have had replaced Lex with me and Kanye with my relative.

00:26:49.840 | Wasn't on television or whatever, but I've had these same kinds of I'll call them interventions.

00:26:55.720 | And like I said, this person goes through periods of lucidity, periods of mania, periods

00:27:01.500 | of paranoia, periods of anger.

00:27:06.080 | And so that's all I saw when I was watching this thing is just what a lot of people in

00:27:11.280 | the United States deal in the world deal with when they have relatives who are suffering

00:27:16.760 | from one of these things.

00:27:18.480 | And my relative has said the same thing.

00:27:21.280 | There's nothing wrong with me.

00:27:22.960 | I don't need medication.

00:27:24.240 | I'm not on these meds, blah, blah, blah.

00:27:26.200 | I don't want to judge because I don't know him.

00:27:28.320 | But I'll tell you in my situation, trying to like, for example, like this person thinks

00:27:34.400 | that myself and one other person like we hacked into a computer system of the place that they

00:27:42.720 | worked to manipulate the financial records to point to this person as having committed

00:27:48.880 | a fraud and has and then thinks that people are now listening and bugging the phone.

00:27:53.920 | I mean, there's all kinds of stuff over and over again.

00:27:56.680 | And then sometimes they don't think that and sometimes they do.

00:27:58.920 | And it's like, it's mad.

00:28:00.560 | What I'm trying to tell you is like, when you're not when you're in a normal state,

00:28:06.400 | regulated state, and you're talking to somebody who's dysregulated, it's not too normal people

00:28:11.440 | having a conversation where you're trying to get them to see the logic of your ways.

00:28:16.240 | So again, I just think that it's not it's not a thing that should be litigated in the

00:28:19.880 | media.

00:28:20.880 | I think it is a thing that is where people that care for this person need to surround

00:28:25.280 | them and get them with a doctor to help them rebalance in in the in the case of our family.

00:28:32.880 | What it turns out is that this person needs to constantly be retitrated the drugs for

00:28:38.360 | them to be regulated.

00:28:40.760 | That may be different for other people.

00:28:42.000 | And I don't know Kanye situation.

00:28:43.520 | So anyways, I see all that and I and I and I go to my own family situation, which I'm

00:28:50.000 | which we actively deal with today.

00:28:51.760 | And I don't have much of an idea of what to do about Kanye because it brings up too much

00:28:55.680 | stuff about what I'm dealing with in real time with my own family.

00:28:59.400 | I'm sorry, going through that.

00:29:00.880 | And I Yeah, like I said, I mean, I think Lex had good intent.

00:29:04.440 | I don't think it's worth doing.

00:29:06.720 | No, he's somebody he's incredible.

00:29:08.760 | You know, he's a really beautiful, empathetic person Lex is in general.

00:29:12.040 | So I think he tried to do the best job he could.

00:29:14.400 | So I saw I saw part of the the Lex interview, it was two and a half hours and I wasn't gonna

00:29:18.360 | sit through two and a half hours of it.

00:29:19.760 | You know, that's I went to I went to the chapter titles and I was in the middle is like Holocaust

00:29:24.400 | like, right.

00:29:25.400 | I was like, Okay, let's just go right to the train wreck.

00:29:28.000 | Yeah.

00:29:29.240 | So I skipped it to there.

00:29:30.560 | But anyway, I think the argument that that Lex should have made or pointed out to Kanye

00:29:34.640 | is like, go see the new Elvis movie, which is all about how an artist basically got taken

00:29:41.400 | advantage of by his business manager.

00:29:45.480 | And you'll see that this idea is a very familiar trope in the music business.

00:29:51.520 | But that manager, Colonel Tom Parker, he wasn't Jewish.

00:29:55.120 | He was a Dutch con man pretending to be a southern hick.

00:29:58.600 | So this can happen.

00:30:00.000 | And it's a very common story and it's got nothing to do with the religion or race or

00:30:05.160 | whatever of the business people.

00:30:08.400 | So and in fact, the person in that movie who has the best advice for Elvis is BB King,

00:30:14.720 | who says to Elvis at a very early point in the movie, he says, if you don't do the business,

00:30:19.240 | the business will do you.

00:30:22.080 | And so look, I think Kanye, again, if I was to sort of steel man and respond to it is,

00:30:28.200 | you know, what you're describing is a pretty common of artists being taken advantage of

00:30:33.120 | is is a common issue.

00:30:34.520 | It goes back a long time and it's got nothing to do with religion.

00:30:37.800 | And quite frankly, you know, there's probably a lot of other Jews in your life who've helped

00:30:42.400 | you.

00:30:43.400 | I mean, I wonder the last time you went to a doctor, did you notice whether they were

00:30:46.480 | Jewish or not?

00:30:47.480 | You know, and so he's developed a little bit of a fixation here of noticing that some people

00:30:53.840 | are Jewish, but probably he's not noticing when other people are Jewish who probably

00:30:57.400 | helped him.

00:30:58.400 | Yeah.

00:30:59.400 | So that's probably like the argument I would have made with him.

00:31:02.600 | You know, if I were conducting that interview,

00:31:04.760 | and you make the argument to a person who's in a manic episode, and there's no way to

00:31:08.640 | reach them.

00:31:09.640 | They don't even realize what they're saying.

00:31:11.120 | They forget what they say when they get through the manic episode.

00:31:13.400 | These paranoid, these paranoias don't tend to come up when you're in a regulated normal

00:31:17.480 | state.

00:31:18.480 | Exactly.

00:31:19.480 | All right, let's talk about meta.

00:31:21.400 | Brad Gerson was on last week, we've had an ongoing discussion about big tech entitlement

00:31:25.400 | spending, the number of employees at these companies.

00:31:28.760 | On Monday, Brad, I think, you know, got a little worked up on the last pod, maybe, and

00:31:33.520 | dropped an open letter, some might say activist, he would say constructivist to Zuckerberg

00:31:40.040 | and the team over there, hey, maybe pump the brakes on the capex, maybe do a riff, maybe

00:31:45.600 | become profitable.

00:31:46.600 | Anyway, the revenue and the third quarter was a complete, utter disaster for meta.

00:31:55.360 | And the stock has plummeted, and been under $100 a share.

00:31:59.960 | I don't know who wants to start on this one.

00:32:02.160 | Okay, look, there's a lot to unpack here.

00:32:04.120 | So I think I think we should take our time because I think one part of it is meta.

00:32:10.000 | But one part of it is actually about what we talked about a few episodes ago, which

00:32:14.240 | is like this big tech put, right, where they define the rules of the game on the field

00:32:21.080 | for every other startup.

00:32:23.160 | And I think the third part is just about like the era of big tech being over and what it

00:32:27.560 | means for the stock market.

00:32:28.560 | If I think if you section it out in those three ways, Jason, we can have a pretty rich

00:32:33.360 | convo.

00:32:34.360 | I'd love to tease some of the stuff.

00:32:35.360 | Where do you want to start?

00:32:36.360 | Okay, so let's let's start with meta.

00:32:38.060 | So Nick, can you please throw up Apple versus meta for a second.

00:32:42.560 | And let me just give you guys the talk track.

00:32:45.240 | And then maybe we can go from there.

00:32:47.020 | So when you look at Apple versus meta, there's this really interesting thing that comes up

00:32:53.080 | which is in 2016, you know, and we've said this before, you could not give Apple stock

00:32:59.640 | away.

00:33:00.800 | They were generating a ton of cash, it was sitting on the balance sheet.

00:33:04.660 | In many ways, Facebook was doing the same thing.

00:33:07.440 | And there was this famous dinner, I don't know if it was a dinner that ever happened,

00:33:10.240 | but that's how the the lore is told between Tim Cook, Carl Icahn, and I think Luca Maestri,

00:33:17.160 | the CFO.

00:33:18.800 | And in it, what Carl Icahn said is, listen, I have a below the line suggestion for Apple.

00:33:27.040 | And what does that mean?

00:33:28.040 | If you look at a P&L, you have your revenues, that's above the line, you have costs, that's

00:33:33.140 | also above the line.

00:33:34.720 | And then you have your profits, and then it's what you do with the profits.

00:33:38.120 | So what he was suggesting is below the line.

00:33:41.000 | After the fact, he had no suggestions for how the business should be run.

00:33:45.020 | He just said, give us back the money, and we will reward you, the stock price will go

00:33:49.800 | up.

00:33:50.980 | And what's interesting to note here is the black line is the performance of Apple stock

00:33:55.560 | as as they've given back.

00:33:58.320 | And they've used a ton of their own balance sheet cash to buy back the stock.

00:34:02.920 | Okay, so they've spent $396 billion since 2016 to buy back stock in the same time Facebook

00:34:11.660 | has spent almost 100 billion.

00:34:14.320 | Now, here is here's where you start to see the divergence.

00:34:18.040 | So you would have said, well, shouldn't Facebook's stock have reacted in the same way.

00:34:23.340 | And for a very long time, it actually looked like it was right until about September 21.

00:34:29.200 | And then obviously, this thing fell off a cliff.

00:34:32.980 | And the reason why it started to fall off a cliff was somebody started to notice that

00:34:37.200 | hold on a second.

00:34:39.480 | Even though you're buying back all these shares, the bottom of the funnel, right, you're

00:34:44.000 | leaking all of these shares to all of these new employees.

00:34:47.520 | Why are you hiring so many people.

00:34:50.260 | And this is when people started to uncover what was happening above the line at Facebook

00:34:55.220 | and is what caused this massive dispersion.

00:34:57.680 | So Nick, if you go to the first chart, so what is actually been going on above the line?

00:35:04.920 | Here's what's going on.

00:35:06.880 | If you look at the light purple bar, Facebook in the last two years have spent $25 billion

00:35:13.000 | on reality labs.

00:35:14.920 | And they said that they're going to spend, you know, meaningfully more in 2023 and then

00:35:19.260 | sustain that investment for a while.

00:35:21.920 | So if you do a little bit of math, if they spent, you know, they spend around 4 billion

00:35:25.600 | a quarter right now.

00:35:26.600 | So 16 billion a year, that'll go to 25 billion in 2023.

00:35:31.220 | And then they'll sustain that.

00:35:32.920 | What that means is that over this, you know, 12 or 13 year life of reality labs, as we've

00:35:37.960 | seen it, these guys will have spent a quarter of a trillion dollars.

00:35:43.400 | And what I did here was I just wanted to understand there is I wanted to understand a quarter

00:35:47.880 | of a trillion dollars in the context of other major leaps in humanity.

00:35:52.740 | So at the left is what Apple spent in its entirety.

00:35:56.000 | By the way, these are all inflation adjusted dollars.

00:35:58.680 | For today, Apple spent $3.6 billion to create the first iPhone.

00:36:04.520 | And what they did was they said every subsequent version of the iPhone would only be funded

00:36:10.680 | from the cash flow and profits of the generation before it.

00:36:13.840 | Right, so they used consumer demand as their guiding principle.

00:36:18.440 | So it was a very incremental approach, iPhone one, iPhone two, and now we're at iPhone,

00:36:22.800 | you know, 14, or whatever 13.

00:36:25.040 | But the point is, it took 3.6 billion to get that juggernaut off the ground.

00:36:31.040 | The Manhattan Project will cost 23 billion in today's dollars to create the atomic bomb.

00:36:37.320 | Tesla in its entire life spent 25 billion to get free cash flow profitability, and they

00:36:43.040 | took this incremental approach as well.

00:36:45.280 | Will create the you know, the the coupe, the Roadster, then the Model S, then the Model

00:36:50.680 | X, they iterated their way.

00:36:53.640 | They used customer demand, and all of that revenue to fund future growth.

00:36:58.000 | Cume spend on Tesla was 25 billion.

00:37:01.120 | Boeing spent 32, Google and other bets has spent 40.

00:37:05.160 | The only thing that I could find in history that is comparable to what meta has basically

00:37:10.420 | said they're going to spend is the entire Apollo program, which cost in today's dollars

00:37:15.360 | a quarter of a trillion as well.

00:37:17.240 | So the problem is that below the line meta was doing the right things.

00:37:22.920 | Above the line, they've created, I think, an enormous set of pressures for themselves,

00:37:28.280 | which is, you know, if you think about the Apollo program, this was 13 years of building

00:37:33.360 | rockets, getting to low Earth orbit, then getting to be able to, you know, orbit the

00:37:37.560 | Earth, then eventually building an entire infrastructure and capability to land on the

00:37:41.440 | moon and get back.

00:37:43.120 | So there was a lot of incremental progress there.

00:37:45.000 | I think what people don't understand is where is this quarter of a trillion dollars going?

00:37:49.200 | And is it going to be a leap in humanity at the scale of the Apollo program?

00:37:55.040 | Because it now is becoming the single largest capital allocation program in capitalism history.

00:38:04.360 | Nothing comes close.

00:38:06.000 | So I think that that is a really interesting, maybe jumping off point to talk about what's

00:38:11.060 | going on inside of this business.

00:38:12.680 | It's I think they're doing all the right things below the line.

00:38:15.880 | But there's this one major big red flag above the line that has to be probably better explained

00:38:20.960 | by them.

00:38:22.140 | If they want to have long term shareholders.

00:38:23.880 | And basically what happened was when people heard this, they said, this is a dumpster

00:38:26.800 | fire.

00:38:27.800 | We're out of here.

00:38:28.800 | Saks, what do you guys the question?

00:38:29.880 | What happened with the whole Brad Gershner proposal?

00:38:32.840 | Was that actually discussed on the call?

00:38:35.080 | No earnings call?

00:38:36.360 | They, you know, they ignored?

00:38:38.560 | Well, I don't want to say it was totally ignored.

00:38:42.280 | Because I do think that they should be given credit for a couple of things.

00:38:46.400 | I think that the core business continues to march forward.

00:38:50.560 | And they basically said, look, we're going to slow headcount growth.

00:38:54.300 | Some teams will shrink.

00:38:56.000 | I think the problem is really in this reality labs, the amount of investment that they're

00:39:01.040 | making is so outsized, and so abnormal, and doesn't compare to anything anybody's ever

00:39:07.840 | seen.

00:39:08.840 | I think everything else in the business seems to be actually quite functional.

00:39:13.600 | So the problem is that this above the line thing, though, has become so big.

00:39:18.880 | It could sink the business, you know, it's very, very hard to see an investment case

00:39:24.240 | for a quarter of a trillion dollars of money in the door before you really start to see

00:39:28.300 | something magical.

00:39:29.300 | Now, they may have something super magical that nobody knows about that they're going

00:39:33.660 | to unveil and say, ha, see told you.

00:39:36.600 | And maybe there should be a set of outcomes where we plan for that.

00:39:40.340 | But the reality is, it's, you know, $25 billion a year for the next umpteen years.

00:39:46.100 | And it's, it's, and I think people 10 billion, where did the 25 billion come from?

00:39:50.040 | No, this number, it's 4 billion, a quarter right now.

00:39:52.860 | So 16 billion a year, and they said that they're going to significantly increase it to 2023.

00:39:57.840 | So I just assumed it was a 50% increase, maybe significant means 100.

00:40:02.280 | But 16 goes to 25.

00:40:03.860 | And they said they're gonna keep going at that pace.

00:40:06.520 | And so if you run that out till 2030, that's how you get to $250 billion.

00:40:11.400 | You think there's a business here in VR, AR, sax?

00:40:14.840 | You think this will be the next platform?

00:40:16.040 | I guess that's a key question to ask here.

00:40:18.320 | Yeah, I mean, I like I actually like these Oculus products.

00:40:21.520 | I think it's a very cool product.

00:40:25.480 | The question is really just about the magnitude of the investment level.

00:40:28.640 | But I think there is a future in VR and AR.

00:40:31.560 | And it is a you've tried the Oculus headset before it is like a very magical, you know,

00:40:42.080 | experience with software, one of the most magical that I've had, the question is just,

00:40:46.840 | we're talking about magnitude and timeframe.

00:40:49.400 | And use case, I think also comes to mind for me, sax, I everybody seems to, you know, try

00:40:55.720 | and then say, Oh, my, and then say goodbye to these headsets.

00:40:58.400 | Like people buy them, they try them.

00:41:00.160 | And they're like, this is incredible, but there's no use case for them.

00:41:03.040 | I see very few people just use them on a regular basis.

00:41:05.900 | We just invested in a company that is creating professional flight simulators using VR as

00:41:13.000 | a component.

00:41:14.000 | And these are like, yeah, I think training is actually a huge use case.

00:41:18.080 | Huge, huge.

00:41:19.080 | And, by the way, these are not like video game flight simulator programs.

00:41:24.600 | These are actual, they create physical cockpits with knobs and dials and stuff.

00:41:29.920 | It's just that the pilot is using a professional grade VR headset.

00:41:35.240 | And so they're able to load, you know, a lot more training programs and scenarios, and

00:41:39.800 | they're able to train on more planes, they can like change up the cockpit.

00:41:44.160 | By the way, the cockpits on gyros, so it actually moves around.

00:41:47.440 | Let me put a date in a different way.

00:41:49.080 | I think that we should assume that VR and AR is going to be a really important part

00:41:52.680 | of our existence.

00:41:54.760 | And I do think that, as David said, many of these experiences are magical.

00:41:58.640 | I think what investors reacted to was spending $25 billion a year needs to be measurable

00:42:05.440 | somehow.

00:42:06.860 | And I think what they said is the things that we're seeing don't necessarily tell us that

00:42:11.040 | this bet is going to make any sense at that level of spend.

00:42:13.880 | So if you were spending 2 billion a year, or 3 billion a year, I don't think people

00:42:18.560 | would have said anything.

00:42:20.480 | It's just the magnitude relative to the progress that's being demonstrated publicly.

00:42:25.200 | And that's the thing that I think the Tesla program got right, the Apple phone program

00:42:29.720 | got right, the Boeing program, even the Apollo 13 program for that quantum of spend.

00:42:34.760 | So it's not to say that you can't spend a quarter trillion dollars over the next decade,

00:42:38.960 | but you got to eat what you kill, you have to be able to show progress in a way that

00:42:42.760 | says, this, this investment is tracking.

00:42:45.160 | freeberg, I think the biggest issue he's having is he's trying to build a moonshot that you'll

00:42:52.280 | only get to see when I'm done.

00:42:54.360 | It's like, Hey, I'm behind the curtain over here.

00:42:56.320 | I'm Willy Wonka, I'm going to come out with the most amazing chocolate bar in 10 years.

00:42:59.720 | And after I spend $100 billion, but don't worry, it's gonna be awesome.

00:43:03.600 | Trust me, shareholders, it's gonna be amazing.

00:43:05.960 | And with consumer products in particular, not guys, you keep saying 100, it's 250.

00:43:10.440 | Yeah, whatever it ends up being.

00:43:12.240 | In general, I think consumer products, you want to see them in the market.

00:43:17.480 | And you want to iterate to success.

00:43:19.480 | Tell me one consumer product that launched and didn't iterate after launch and didn't

00:43:23.680 | kind of evolve over time in a way that responded to what the market was telling the builder

00:43:28.160 | of that product.

00:43:29.160 | But freeberg, in fairness to them, they're doing that too.

00:43:31.680 | It's just I think what people can't square is, we see the next gen oculuses.

00:43:38.160 | And then we see the spend, and we think that they're upside down relative to what we're

00:43:41.960 | seeing in terms of progress.

00:43:43.160 | I think that's what people are reacting.

00:43:44.480 | If he was spending 5 billion a year, this wouldn't be an issue, Chamath, right?

00:43:47.640 | A nothing burger, a nothing.

00:43:49.920 | People would say good idea, throw a long ball.

00:43:52.640 | I think that there's two kind of ways to think about the distinct things that they're building.

00:43:56.960 | One is this hardware platform with oculus and a better kind of experience for immersive

00:44:01.640 | experiences, whether that's VR or AR.

00:44:05.480 | The second is what's all the software layer look like and what goes on in that platform.

00:44:09.680 | That's where this thing seems to be pretty short and where people seem to have a lack

00:44:13.520 | of confidence and conviction.

00:44:15.320 | The hardware seems super interesting.

00:44:17.400 | But I got to tell you, Epic Games just raised money earlier this year at a $31 billion valuation.

00:44:23.000 | If Zuck was a smart guy, he would go to Tencent and cut him a check and buy the whole thing

00:44:26.200 | for 50 billion and you know, buy those guys because that's a platform that has a couple

00:44:31.080 | hundred million active users is making money has a really deep immersive, but two dimensional

00:44:38.080 | experience.

00:44:39.080 | I mean, it's not on VR and on top of Fortnite and on top of their engine that they've built,

00:44:46.160 | there are just countless experiences and worlds and interactions and models that exist today

00:44:53.920 | that are already active, that are being iterated, that have been evolving for years.

00:44:57.360 | And if you look at where Fortnite and some of the tools and experiences that have been

00:45:01.080 | built into Fortnite over the past couple of years, sit relative to when Fortnite was first

00:45:05.760 | launched, I don't think that Tim Sweeney and that team would have ever said, Hey, this

00:45:09.680 | is where we're going to be in a couple of years, this is what we're going to be doing.

00:45:12.240 | It was part of an evolutionary experience of building a great platform and having an

00:45:16.040 | engaged user base.

00:45:17.520 | And unfortunately, there doesn't seem to be a great engaged user base in the software

00:45:21.200 | layer of what he's built here today, making it very difficult to track a path to get consumer

00:45:26.080 | feedback and to identify where that goes over time.

00:45:29.080 | The hardware experience totally understand that that takes time to build something incredible

00:45:33.160 | also should be in the market and getting iterative feedback, but really that that software pieces

00:45:37.320 | would would feel short.

00:45:38.800 | To your point, I think that that's another great example of a below the line decision

00:45:43.060 | that they could have made with all of this money.

00:45:46.320 | You know, if you compare what Brad asked Facebook to do on Monday versus what Icon asked Apple

00:45:50.620 | to do in 2016, you know, Icon basically said, just make this below the line change and everybody

00:45:56.940 | will be happy.

00:45:57.940 | It's a do no harm solution.

00:45:59.680 | None of us are getting in the way.

00:46:01.240 | We're not telling you how to run the business.

00:46:03.600 | The thing that I think that, you know, what Facebook had to react to was Brad's suggestions

00:46:07.160 | were fundamentally above the line.

00:46:08.580 | It's like, you know, firing 20% of the people or 30% or changing the capital allocation

00:46:13.140 | would require some changes to strategy.

00:46:15.880 | And I think this is a good moment to recognize it as as much clarity as Brad's letter had

00:46:21.480 | and as much sense as it probably makes to outsiders looking in.

00:46:25.360 | The minute you have to tell companies how to change above the line, it's just a good

00:46:28.540 | reminder to me that no, it's not going to happen.

00:46:31.820 | Because these folks will not want to make those changes.

00:46:34.320 | They don't want saying Zuck won't make the changes.

00:46:36.520 | I think it's natural human psychology.

00:46:38.360 | I think you want to make those changes yourself.

00:46:40.400 | You don't want to be told what to do.

00:46:42.760 | Got it.

00:46:43.760 | Saks, what do you think this is going to do to governance in Silicon Valley writ large?

00:46:47.920 | Probably nothing.

00:46:48.920 | Really?

00:46:49.920 | So it's not going to change anything.

00:46:51.920 | It is interesting.

00:46:52.920 | If you look at Elon's Twitter deal, there is no dual class.

00:46:57.740 | Everybody has, there's this one class of security.

00:47:01.800 | This is one type of stock.

00:47:03.680 | So it's simple majority voting.

00:47:06.080 | Elon actually had the choice of doing dual class and he decided not to.

00:47:11.280 | So that's pretty interesting.

00:47:13.120 | So if people want to follow Elon's example, then they would, you know, not not necessarily

00:47:19.120 | go for Tesla doesn't have super shares either.

00:47:20.920 | And he said it many times, if you want to vote me out, you can vote me out.

00:47:23.640 | Right?

00:47:24.640 | I mean, he's so he's putting his face X either.

00:47:27.760 | Yeah, he's putting his neck on the line.

00:47:30.960 | I don't know.

00:47:31.960 | I has a space actually.

00:47:32.960 | I have no idea.

00:47:33.960 | I don't know.

00:47:34.960 | It's a structure.

00:47:35.960 | Yeah, I can't remember.

00:47:36.960 | SpaceX isn't public yet.

00:47:37.960 | So maybe it doesn't matter.

00:47:38.960 | Like they haven't reached that decision point.

00:47:40.520 | Yeah, I will tell you, I just I think Starlink has such a huge opportunity.

00:47:45.440 | I just got Starlink for two locations as a backup because you lose your internet a couple

00:47:51.840 | times a year and you can get these routers now that'll fail over.

00:47:54.640 | So since I'm doing business, like, I can't really lose the internet.

00:47:57.600 | So for 1000 bucks a year, I can have Starlink as a backup and I started using it.

00:48:02.420 | And the speed is getting pretty compelling already.

00:48:05.280 | Like zoom calls, you can't tell the difference right now, most of the time, and certainly

00:48:09.600 | for web browsing or watching a movie.

00:48:13.400 | You know, it just works.

00:48:14.520 | So I could see many companies putting in Starlink, even if they have a fiber line or whatever,

00:48:18.880 | just as a backup.

00:48:20.500 | That business alone could be ginormous.

00:48:22.000 | Just to provide both sides of the story here.

00:48:24.600 | I mean, the reason why dual class emerged and was seen as viable is that if you look

00:48:30.560 | at the historic performance of internet companies, the ones that have done the best perform the

00:48:35.860 | best are the ones where the founder stays involved for a long time.

00:48:39.360 | And the ones where the founder checked out, like after a few years and hired a professional

00:48:43.680 | CEO, those are the ones that went off the rails, it happened again and again.

00:48:47.520 | So there is an argument for dual class in the sense that you keep the founder involved

00:48:52.240 | and you avoid a power struggle.

00:48:56.240 | That's not what happened.

00:48:57.240 | Well, but that was why it was considered acceptable.

00:48:59.880 | Well, I think it was considered acceptable because in the Google bake off, all these

00:49:03.680 | banks were clamoring so hard.

00:49:06.220 | And you know, there were two vectors of iteration.

00:49:08.600 | One vector was on the way that, you know, Google wanted to do this IPO process, they

00:49:13.200 | pick Credit Suisse, they did this Dutch auction.

00:49:15.100 | The other one was the bankers basically pitched them on a dual class voting control structure.

00:49:19.520 | And Morgan Stanley, Morgan Stanley, and once Google got it, everybody else was able to

00:49:23.840 | copy because all the bankers realized that if you want to win a bake off, you're not

00:49:28.200 | trying to win over the CFO, you're actually trying to win over the CEO.

00:49:32.520 | And giving that person control turned out to be an incredible commitment, and a way

00:49:36.480 | to win the deal.

00:49:37.780 | And so I actually think it was never a governance issue or a reflection of how value was created.

00:49:43.820 | It was just basically a feature that you that one banker used in an IPO bake off to try

00:49:49.280 | to differentiate versus another.

00:49:50.720 | This is why, you know, like I said, like Elon has never cared about that stuff, because

00:49:54.360 | it's like, if I'm not doing well, vote me out, which is so clarifying, because he realizes

00:49:58.540 | that that's actually the best check on him making bad decisions.

00:50:02.860 | You know, and I think part of it is why he's done so well, you know, one class of stock,

00:50:06.920 | he was able to negotiate an incredible compensation package.

00:50:10.200 | And it's he's he has clarity, a lot of the few things of the business that matter.

00:50:15.020 | But I think he's also more compelling than some of these other guys.

00:50:18.260 | And there may be some degree of feeling like this is a mechanism that other people need

00:50:23.080 | that Elon has a degree of confidence and a degree of charisma and salesmanship that gets

00:50:28.180 | him what he wants.

00:50:29.460 | I just want to read you guys the excerpt from Larry and Sergei's founders letter from the

00:50:33.300 | IPO in 2004.

00:50:35.140 | As a private company, we've concentrated on the long term and this has served us well.

00:50:38.860 | As a public company, we will do the same.

00:50:40.820 | In our opinion, outside pressures, too often tempt companies to sacrifice long term opportunities

00:50:46.380 | to meet quarterly market expectations.

00:50:49.580 | Sometimes this has caused opportunities to manipulate financial results in order to make

00:50:53.580 | their quarter, and they go on and on and on.

00:50:55.860 | And they say, Look, you might ask us how long is long term, usually we expect them in a

00:50:59.900 | couple of years, and they go on.

00:51:02.140 | Many companies are under pressure to keep their earnings in line with analysts forecasts.

00:51:05.980 | Therefore, they often accept smaller, predictable earnings, rather than larger and less predictable

00:51:11.300 | returns.

00:51:12.300 | Sergei and I feel this is harmful, and we intend to steer in the opposite direction.

00:51:16.580 | I think that the statement that they made really resonated in Silicon Valley at the

00:51:20.140 | time, particularly during this era of what people were calling web two and the internet

00:51:24.060 | was being rebuilt.

00:51:25.060 | And all these businesses were starting to thrive.

00:51:27.980 | And it was like we have this massive road ahead of us this long road ahead of us and

00:51:31.060 | we can really change the world.

00:51:32.980 | But in order to do it well, in order to do it effectively, we have to as entrepreneurs

00:51:37.380 | as engineers, be able to have the freedom to operate for the long term, I don't think

00:51:42.340 | it had anything to get stuck in the short term.

00:51:44.900 | But I think that that had nothing to do with anything that there was no pressure on them.

00:51:49.460 | It's not like they shied away.

00:51:51.180 | It's not like that super voting control allowed them to make one seminal decision.

00:51:54.940 | There were quarters to moth where Google was getting a lot of heat for the amount of money

00:51:58.380 | they were spending on capex because they were building their own data centers, they were

00:52:00.940 | building their own servers, they were building their own, eventually DRAM, they started to

00:52:05.740 | build their own switches.

00:52:07.340 | Every element of how Google build a competitive advantage over time was difficult for analysts

00:52:11.900 | to understand.

00:52:12.900 | You're not saying that you're not saying the obvious thing.

00:52:15.660 | The reason why they were allowed to do it in the end was because more and more users

00:52:20.260 | use their product because it was better and better.

00:52:22.900 | And they consistently meet and beat every expectation.

00:52:26.500 | This is not I didn't need to use this option.

00:52:28.860 | This was not I didn't need to call this option.

00:52:30.900 | This is not a company that went back and forth between meeting and missing expectations.

00:52:35.700 | Okay?

00:52:36.700 | They were up into the right.

00:52:38.380 | They were they were up into the right is correct.

00:52:40.220 | That is the general principle.

00:52:41.620 | But the time to return the ROC, the timeframe to hit their ROC targets was long.

00:52:47.180 | And it was hard for people to get that when they not true.

00:52:49.980 | That is not to David YouTube, and they spent 10s of billions of dollars investing in YouTube

00:52:55.460 | before generated cash.

00:52:56.700 | I get it.

00:52:57.700 | That would Yeah.

00:52:58.700 | That's not math.

00:52:59.700 | You're not what you're saying is not true.

00:53:01.140 | It is not mathematically true what you're saying there was no 13 year Roick play that

00:53:05.780 | they executed on not true.

00:53:08.860 | And you can just look at it.

00:53:09.860 | They may have put their own they put their own fiber optic lines across the oceans.

00:53:14.420 | The CAPEX I understand scrutinized and not well understood.

00:53:18.140 | I get it.

00:53:19.140 | You can read but you might you can read the analyst reports and see how difficult this

00:53:22.340 | was.

00:53:23.340 | I'm asking for you to do is look at they had voting shares is what gave them the ability

00:53:26.380 | to do this bullshit.

00:53:27.580 | I think that if you look at their performance, their EBITDA margins and their Roick was exceptional

00:53:32.660 | when they were making those investments.

00:53:34.020 | In fact, I would say the opposite.

00:53:35.820 | I would say that they were surprised by high how by how high quality their business model

00:53:41.300 | was.

00:53:42.300 | They were generating so much cash.

00:53:44.020 | What they were probably thinking back in the day was, oh, my gosh, we need to make sure

00:53:48.340 | that we are actually making long term investments.

00:53:50.380 | And now we have the ability to do it.

00:53:52.540 | Because we have all this cash we didn't expect.

00:53:54.780 | And we should probably bleed off cash so that we don't show 50% gross margins to raise all

00:53:59.860 | of the attention of regulators and everybody else.

00:54:03.060 | And so what do you think Zuck is doing?

00:54:04.620 | What's different today?

00:54:06.500 | I think that they have an incredible core business because he's got good business, good

00:54:10.620 | EBITDA margins, good revenue growth.

00:54:12.860 | What's different?

00:54:13.860 | They have an incredible core business.

00:54:16.220 | And they have decided for whatever reason, to make an enormous bet.

00:54:21.620 | And that bet could be a very good bet.

00:54:25.260 | But the way that you make a bet, and you said this well, is you have to look at incremental

00:54:29.460 | progress.

00:54:30.900 | And you have to demonstrate that all of these bets make sense.

00:54:34.660 | Because the problem is when you could compared to the Tesla program, look, Tesla is reinventing

00:54:41.500 | an entire category, trillions of dollars of energy generation and transportation.

00:54:47.460 | But they did it on in one year of meta reality lab spend.

00:54:53.580 | Apple reinvented an entire compute platform on one quarter of meta's reality lab spend.

00:55:00.260 | That's not a judgment.

00:55:01.260 | That's just a numerical observation.

00:55:03.520 | So if you want to get people on your side, you just have to be able to double click into

00:55:08.580 | that in an elegant, articulate way and say, here are all of these things that justify

00:55:15.180 | $25 billion a year.

00:55:17.220 | Hey, guys, let me show you a chart.

00:55:19.140 | Here's a chart of alphabets, capital expenditures by quarter, and here is their revenue.

00:55:26.380 | The blue line at $7 billion right now.

00:55:29.300 | This is my point.

00:55:30.300 | Yeah, they struggled.

00:55:32.820 | They struggled to find ways to spend money.

00:55:35.420 | Exactly.

00:55:36.420 | I mean, literally, they they created project loon, they were gonna do balloons, guys, they

00:55:40.660 | wanted to do a fiber, they wanted to build a VTOL, they wanted to build they wanted to

00:55:44.420 | build at one point a ladder to the moon, a ladder, they thought they could build from

00:55:49.020 | Ted.

00:55:50.020 | It was an elevator.

00:55:51.020 | But yeah, yeah, whatever an elevator is in that seven point to climb there.

00:55:54.260 | Right.

00:55:55.260 | The elevator was in the purple line.

00:55:56.740 | Yeah.

00:55:57.740 | And somewhere in there, they spent a billion or whatever on maps and it ended up being

00:56:01.220 | a phenomenal asset when the whole world moved to mobile.

00:56:03.500 | I think we're not saying the obvious thing.

00:56:05.660 | We spent a lot less than we're not.

00:56:07.900 | We're not saying the obvious thing, which is great leaps of progress in humanity are

00:56:12.220 | not correlated to dollars all the time.

00:56:14.580 | In fact, most examples are the exact opposite, which is it's more about small and extremely

00:56:20.780 | nimble and talented management teams that generate human progress.

00:56:25.020 | And again, if you go back to that first chart of Apple versus meta, you know, the fact that

00:56:29.660 | you've hired so many people to work on a category with so much money, it just violates a lot

00:56:35.320 | of pattern recognition that people have historically seen.

00:56:39.580 | So all I'm saying is maybe this is a great bet.

00:56:42.780 | They just need to do a better job of explaining this would have been so much easier if he

00:56:46.260 | had just put your burden.

00:56:49.020 | I'm saying this could be this could have been such a better transition, he should have put

00:56:52.320 | Sheryl Sandberg, a CEO of the Facebook Corporation, he should have became CEO of meta.

00:56:57.540 | And then he should have ran that other business to print even more profits.

00:57:01.460 | And then if you look at some of their forays into building a super app, they added Facebook

00:57:06.300 | marketplace to Facebook, and it was a huge hit.

00:57:09.280 | They started to pull the ecommerce string over at Instagram, it started to work.

00:57:13.380 | There's just no focus on those products.

00:57:15.380 | If you look at the Facebook collection of billions of users, what apps could you add

00:57:19.620 | to that?

00:57:20.620 | You know, whether it's payments, they did the whole crypto thing, they gave up on that

00:57:23.660 | it seems like there's no leadership on the Facebook side that actually wants to take

00:57:28.780 | swings over there.

00:57:30.360 | They just are obsessed with this one thing.

00:57:31.900 | It makes no sense to me.

00:57:32.900 | I think that there's probably part of it, which is that, you know, when you're working

00:57:37.320 | on a thing for a long time, there's a certain personality type that loves the mastery that

00:57:42.580 | comes from working on the thing for a long, long time.

00:57:45.860 | And then there's a different personality type that likes more shiny new things.

00:57:49.940 | And you kind of have to have a balance of all of those different people.

00:57:54.860 | And so maybe what we're seeing as well is that, you know, you're right, maybe the boring

00:57:58.500 | business was just labeled too boring internally.

00:58:01.460 | And there wasn't enough heat around wanting to work on it forever.

00:58:04.180 | Nobody wanted to keep grinding.

00:58:05.180 | And so you wanted to throw these big hill Marys.

00:58:07.640 | All I'm saying is you just need to explain the hill Mary.

00:58:09.740 | All right, let's, let's look, by the way, let me just ping you on this.

00:58:12.700 | So the meta spend in the quarter relative to the revenue, it's about 15 are the virtual

00:58:19.060 | reality stuff.

00:58:20.060 | It's about 15 billion 15%.

00:58:21.060 | Does that sound right?

00:58:22.060 | I don't know.

00:58:23.060 | But they said it was 4 billion this quarter.

00:58:24.620 | Yeah.

00:58:25.620 | So 4 billion out of 27 of revenue.

00:58:27.700 | So it's about 15%.

00:58:29.620 | And Alphabet's last quarter revenue was 70 billion.

00:58:33.620 | And they spent about a billion billion.

00:58:35.780 | Let me show you this.

00:58:36.780 | I actually actually had this chart handy because I was talking about it on this, which is 1.4%.

00:58:41.860 | So on a relative basis, Alphabet is spending one 10th of what meta is per dollar earned

00:58:48.380 | or top line revenue earned on their other bets category.

00:58:52.420 | So tomorrow, do you think it's a relative spend problem that because they're spending

00:58:56.820 | 10 times as much as a percent of revenue that it's causing so much heartache, even if it

00:59:01.620 | is directionally correct?

00:59:02.620 | If you want to see the capex versus revenue, here's that on the screen right now.

00:59:06.740 | I know we know we know what we haven't shown this is Google and meta on the same chart,

00:59:11.700 | the blue line on the red on the bottom 9 billion in capex for Facebook 7 for Google.

00:59:17.660 | Is this your new like charting tool that you guys built?

00:59:19.940 | Yeah, no, no, we just do it on this.

00:59:22.100 | We can startups all the time.

00:59:23.100 | What do you use?

00:59:24.100 | What is it?

00:59:25.100 | What is it?

00:59:26.100 | Yeah, actually beep it out because I don't want to give them a free.

00:59:29.440 | I'm not giving a free promo.

00:59:32.680 | They didn't let you invest.

00:59:33.680 | Whatever.

00:59:34.680 | I mean, the truth comes out.

00:59:35.680 | The truth comes out.

00:59:36.680 | They didn't let him invest.

00:59:37.680 | Yeah, no, they've been around forever.

00:59:38.680 | They've been around for a good product.

00:59:39.680 | I've used it just to be a good product.

00:59:40.680 | Listen, we're gonna promo something.

00:59:41.680 | It's gonna be call in or Nick, can you throw up the histogram?

00:59:42.680 | Super got super got this is super got charts.

00:59:43.680 | So look, I think the new charting feature on Colin, I think the problem is that I don't

00:59:44.680 | know if I'm gonna be able to get a call in.

00:59:45.680 | I don't know if I'm gonna be able to get a call in.

00:59:46.680 | I don't know if I'm gonna be able to get a call in.

01:00:14.680 | I don't know if I'm gonna be able to get a call in.

01:00:33.680 | I don't know if I'm gonna be able to get a call in.

01:01:01.520 | I don't know if I'm gonna be able to get a call in.

01:01:28.400 | I don't know if I'm gonna be able to get a call in.

01:01:57.920 | we were basically calling the top of the market and told people to sell. One of the trades that

01:02:02.960 | he put on Nick if you want to just throw it up was this long Google short meta spread trade,

01:02:08.800 | he called to tell me that you know, he closed it out yesterday. This is how that trade did.

01:02:13.760 | So yeah, there was just a lot of folks that just kind of like went to the exits and said,

01:02:18.800 | you know what, we're kind of done for the short term. I just think that it's it's a moment in

01:02:24.400 | time where those folks have to realize that they just have to explain a little bit better how they

01:02:31.680 | want to spend the money and show a little bit more incremental progress that justifies that level of

01:02:36.240 | spend. Otherwise, people will be a little skeptical, they'll build their own histogram.

01:02:40.640 | And it'll violate too many rules. And so it goes into the too hard bucket.

01:02:45.360 | Okay, we got macro, we got Ukraine. And I think I think that you should talk about big tech, because

01:02:52.560 | Amazon puked as well, Jason, the Can you just throw up the big tech chart? Because I think like

01:02:57.360 | you guys should see this, because I think this is very important for Silicon Valley.

01:03:00.560 | Amazon reported their q3 earnings yesterday, Thursday, total revenue 127 billion of 15%

01:03:06.080 | year over year 5% quarter of a quarter net income was 2.9 billion. And they're predicting they're

01:03:11.840 | giving slower guidance going forward. I mean, what's incredible on this chart is that you know,

01:03:16.240 | when when everybody talks about being long the S&P 500, it was always really a proxy for being long.

01:03:22.480 | Amazon, Facebook, Google, Microsoft and Apple. And at the peak, you know, in May of this year,

01:03:27.360 | it was still, you know, 25 cents of every single dollar of the S&P 500 were these five companies.

01:03:33.440 | And, you know, we always said the market bottom will be when the generals quote unquote get shot,

01:03:38.720 | you know, to borrow a phrase from Gavin Baker. And it looks like the generals have been shot.

01:03:43.520 | Yeah. And what's incredible is this week, every single one of those companies,

01:03:47.200 | other than Apple really reported pretty crappy earnings. They got totally taken to the woodshed.

01:03:52.640 | The percentage of the of these companies as a percentage of the S&P is now, you know,

01:03:57.520 | off by 500 basis points, it's down to 20%. Yet the markets are ripping higher today. So I think

01:04:05.280 | it's kind of what we talked about three weeks ago, like the bottom is kind of in for the short term,

01:04:09.360 | you know, so it's really exciting, actually, to see, I think this is the point where you have to

01:04:13.360 | now start to get pretty constructive about where things are going. Because if this stuff could not

01:04:19.040 | bring the market down, it's hard to see something other than an exogenous event, probably some

01:04:23.840 | Russia, Ukraine event really having a negative impact. So to me, I'm kind of like, I don't know,

01:04:30.400 | it seems like pretty bullish for also GDP was 2.6%. So I mean, the this this very weird conflicting

01:04:36.720 | data, we had two negative quarters of growth, we're in a recession, then we have a third quarter

01:04:41.040 | is up 2.6%. So remember, Jason, I said that we were gonna have a double dip that was sure,

01:04:46.480 | that was most likely thing. So we had this sort of mild technical recession based on nominal GDP

01:04:54.000 | growth, not being bad, but simply not quite keeping up with the inflation rate. Yeah, now

01:04:59.680 | things are a little bit better. But I still think the huge recession is to come next year, because

01:05:04.320 | all the interest rate increases we've seen. So the Fed is, you know, pedal to the metal on interest

01:05:10.000 | rate increases, just like they were pedal to the metal on printing money. And so first, they,

01:05:15.040 | you know, they were too loose. And now they're probably being too tight too fast. So I think

01:05:19.280 | we're headed for a huge recession next year. And I think you're seeing that in the softness of all

01:05:23.120 | these forecasts. Yeah, look at the look at the mortgage rates right now, something like 7.1%.

01:05:30.400 | They broke the backs of the housing market that the inventory and prices inventory shot up,

01:05:38.800 | prices have shot up, new mortgages have gone down. And you know, we talked about job openings.

01:05:44.640 | Here's the the Fred chart for job openings real quick. You can see the the peak we were talking

01:05:49.600 | about, we're wondering if that would come plummeting down. Well, here it is, folks.

01:05:52.800 | Yeah, plummeting down from 11 million, losing a million in a month. Yeah, job openings coming

01:05:58.480 | smashing down. There's the Fed fund rate. You know, that's a pretty high ramp. So you think

01:06:03.280 | double dip recession? What do you think? freeberg Chamath in terms of what 2023 looks like you're

01:06:09.280 | sort of saying Chamath a bottom is forming. I kind of agree with that. I think the stock market is

01:06:14.080 | going up. Then it'll go back down because I think what David said is right. But for the short term,

01:06:21.120 | this thing is going up. short term up. And we've generally been positioned for it to go up. And,

01:06:26.640 | and at some point, we will reverse and position for it to go back down. But it's going up sacks,

01:06:32.720 | it seems like you took a week off from the all in podcast and people stopped talking about Ukraine.

01:06:37.760 | You want to give us an update? I mean, obviously, the war is not over. But it does seem like

01:06:42.080 | it somehow has fallen out of the public's consciousness a bit. I don't know if I go

01:06:48.480 | that far. There was the big event in the Ukraine war debate this week was that the House Progressive

01:06:55.120 | Caucus put out a letter signed by 30 progressive members to merely suggest that while we continue

01:07:04.160 | to fund Ukraine on a virtually unlimited basis, we also in parallel open up a diplomatic track

01:07:10.080 | with Russia to mitigate against the threat of us being drawn into the war and specifically a nuclear

01:07:16.880 | war. And just that very, I'd say anodyne letter that very tepid sentiment, really, they weren't

01:07:25.360 | questioning in any way, the providing again, a virtually unlimited support to Ukraine, that

01:07:31.520 | met with such a fierce reaction on social media and in the traditional media that I think all

01:07:38.000 | but one of the signatories recanted or walk back the letter and kudos to Representative Ro Khanna

01:07:45.200 | for not being one of the people who recanted he sat tall and gave an interview on CNN and MSNBC

01:07:52.960 | saying why has diplomacy become a dirty word? I voted for every single appropriation to give aid

01:07:59.440 | and weapons to Ukraine. I'll continue to do that. But I don't see a problem with us maintaining

01:08:04.560 | diplomatic relations, we might need those to avoid an unwanted escalation.

01:08:09.440 | Well, and here we are.

01:08:10.720 | Kudos to him for standing tall. But it's amazing to me that the Progressive Caucus,

01:08:14.720 | which used to be one of the groups in Congress that questioned American involvement in foreign

01:08:22.400 | wars, like the Iraq War, they basically, they have moved off that. And they threw in the towel so

01:08:29.600 | quickly on this, it was really kind of pathetic to see.

01:08:32.800 | I mean, it really like this is back to Shakespeare, like politics makes for strange bedfellows,

01:08:37.440 | you find yourself aligned with the most left part of the Democratic Party in trying to just say,

01:08:43.440 | hey, maybe we should negotiate peace a little more for us to pursue the right foreign policy.

01:08:48.640 | And I don't really care which party has you would you would actually donate to anybody who is

01:08:54.400 | pushing for that. So did you actually make any? I mean, I just happened, but I plan to donate to

01:09:00.720 | members of both party who push for a correct foreign policy, which I believe needs to be

01:09:06.480 | a little bit more restrained a little bit more questioning of what is in it for the United

01:09:12.160 | States. And we need to be careful about overextending ourselves. And we need to

01:09:17.520 | ask what is in America's vital interests? And we can support

01:09:20.720 | AOC be coming to the with a she's pro recanted. So she's one of the ones that were can't

01:09:27.920 | What do you think happens in a situation like that? Well, how do they get them to recant? Yeah,

01:09:31.520 | like, why? What is the point of recanting something that was so benign? It's not

01:09:36.400 | totally no, but what do you think? Like what what's happening behind the scenes? Like, why

01:09:41.360 | are people so afraid to say that, you know, you can be in support of Ukraine,

01:09:45.360 | but also still try to find a reason why was that turned into such a scarlet letter?

01:09:48.880 | It's a great point. And I think it just shows the heat right now on the issue. Here's what I think

01:09:55.440 | does it do that? Or does it just show how the progressives as just kind of clown tones?

01:09:58.880 | I mean, it's it's kind of sad. I mean, Jayapal, who was sort of the leader who put out the letter

01:10:05.840 | through her own staff under the bus. And I guess there was this snafu where the members all signed

01:10:10.800 | this letter in July and then held it for a few months. And then they put it out two weeks before

01:10:14.720 | the election. I can see why that timing didn't make sense. I don't know why, like they released

01:10:20.480 | it now, not two months ago, not three weeks from now, after the election. I can understand all

01:10:25.920 | those political considerations. But once you put the letter out to stand by it, don't throw your

01:10:30.960 | own staff under the bus. Because like you're saying, the letter was really a pretty anodyne

01:10:36.240 | statement of, hey, listen, do you think we can just have diplomacy on a parallel track at the

01:10:40.480 | same time that we're arming Ukraine? I just don't see the downside. But look, here's why I think

01:10:46.080 | they took so much heat is there's a lot of people on this issue who start with the end result of

01:10:51.760 | what they want. And the end result that they want is Putin and Russia leave Ukraine with their tail

01:10:58.800 | tucked between their legs. And they basically don't get one square inch of Ukraine. They believe that

01:11:04.320 | is the only acceptable moral outcome here. And they may be right about that. But then what they're

01:11:10.560 | doing is they're kind of reverse engineering all the beliefs that they have based on that outcome,

01:11:15.680 | that moral outcome they want to get to. So, for example, for the longest time, you heard things

01:11:20.240 | like Putin is definitely bluffing about using nuclear weapons. Well, how do they know that?

01:11:25.200 | They don't know that. They can't say that for sure. But it's what they want to believe. Because

01:11:29.680 | if you believe that nuclear war is a possibility, you might not go all the way for that maximalist

01:11:36.560 | position of the only acceptable outcome here is Russia leaving with his tail tucked between his

01:11:40.960 | legs. And I think the same thing is happening here with diplomacy is people who want a certain

01:11:47.920 | result in the war are afraid that diplomacy might result in something less than that. That's not a

01:11:54.480 | reason not to engage in diplomacy. And it's not a reason to deny the potential of this war to spin

01:12:01.840 | out of control, potentially into a nuclear war. Saks Saks is like a walking thesaurus. So J Cal,

01:12:07.360 | for you, I looked up anodyne and it means not likely to provoke dissent or offense inoffensive,

01:12:12.960 | often deliberately. So yeah, like, it's like, Oh, I know you were looking, you were looking at the

01:12:17.680 | screen, like a confused little puppy when he said anodyne. I got a thesaurus over here. Also,

01:12:23.840 | I didn't know what it meant. So thank you.

01:12:25.520 | But seriously, what is the I want to know the fallout from two things. And then we're going

01:12:31.600 | to do science corner. So number one, what is the I've been getting a lot of oat milk stands emailing

01:12:38.960 | me different brands of oat milk have been emailing me this week. Just give us an update, generally

01:12:43.680 | speaking on the ultimate milk crowd and your inbox tomorrow. They're trying to they're definitely

01:12:48.960 | trying to bring a do me but but these people like, you know what's so funny about these folks?

01:12:53.760 | They have no judgment clearly. Because they can't even say you know what, it actually tastes much

01:13:02.000 | crappier than these alternatives, but I choose to for x, y, z reasons that I could respect. It's

01:13:07.280 | the Oh my god, it's incredible. And he's so much better. You know, look at my little mustache.

01:13:12.000 | Disgusting. It doesn't foam properly. It tastes like dishwater. It's ridiculous. And then sacks

01:13:17.680 | discussed this horrific illustration of you in the new republic I saw look like Dolly broke and

01:13:24.960 | they use Dolly to make that illustration. No offense to the illustrator got paid 1000 bucks.

01:13:28.640 | Well, it was like, it was pre Olympic sacks. I thought it was Yeah, that's the problem. If

01:13:34.160 | you're chubby sacks or chubby J cow. It sucks when people base an illustration on a previous one.

01:13:39.840 | But sacks like a deranged sociopath. I mean, you look like Alex Jones.

01:13:45.280 | Well, look, they got Elon and Peter up there too. It's such a stupid hit piece.

01:13:48.480 | Elon looks like Hugh Grant. Peter Thiel looks like he's rolling on.

01:13:52.560 | He's got Molly jaw. And also he's, he you show a lot of stubble, which you also don't have.

01:14:01.520 | But look how fat they make you look. Look at you.

01:14:04.320 | Yeah, the chin. Jesus, my lord. But what I mean, what's going on in terms of the general reaction

01:14:11.520 | to the amount of attention you're getting for political commentary now?

01:14:16.320 | sacks David sacks will be our next Secretary of State. Well, no, I'm here for it. I can't wait.

01:14:20.640 | I'll go long. David sacks will be our Secretary of State within two or three presidents.

01:14:25.200 | I'll take he's got to make a little more cash.

01:14:28.160 | My views, my views are so out of step with the foreign policy establishment.

01:14:31.840 | I wouldn't why you went, that's why you that's why I wouldn't feel the need to be so out there

01:14:36.720 | on this issue. If the foreign policy establishment was doing its job. If you actually had, you know,

01:14:43.120 | people from the policy elite going out there saying sensible things about Ukraine, it wouldn't

01:14:48.720 | fall on me or other people like and China, like Elon basically posted that straw poll on Twitter,

01:14:56.400 | which was totally reasonable, got condemned for it. And then Bill Ackman, actually, who's been

01:15:00.720 | in Twitter spats with me before we've been on opposite sides of issues, actually came out

01:15:05.680 | and retweeted something I wrote as basically being supportive. Because the weird thing is want this

01:15:12.000 | war to escalate out of control. I think the weird thing is people are, there's a group in the in the

01:15:17.680 | media class, other podcasters, other journalists, who are saying you have no right to talk about

01:15:23.120 | this topic. And what I said is, you know, hey, listen, Saxon, I could disagree about things on

01:15:27.440 | the margin here or there. But I'm glad we're having the discussion shouldn't all Americans

01:15:31.280 | be having a discussion about our foreign policy and what our goals are. That's our civic duty

01:15:35.280 | is to have this discussion. So whenever you hear the political class, the podcasting class,

01:15:40.000 | the coastal elites, which we are part of, when they tell you you can't participate, or this

01:15:44.560 | person can participate in the discussion, because they're successful in this other aspect of life,

01:15:48.480 | that's complete bullshit. Everybody should talk about this and disagree or agree and try to work

01:15:53.760 | towards some common understanding. You're right. So first of all, whenever they say listen to the

01:15:58.640 | experts, and you're not an expert, first of all, they're expressing an opinion themselves. And

01:16:03.360 | they are expressing equally passionate opinions on the other side about the sole Ukraine war.

01:16:07.920 | So first of all, why are they allowed to have an opinion? So whenever somebody uses this,

01:16:11.920 | you're not allowed to have an opinion argument, it's always very selective. And it's only applied

01:16:16.480 | to people they disagree with, not to people who are equally inexpert on their side of the debate.

01:16:21.760 | So that's point number one. Hold on point number two is I've listened to plenty of experts. Okay.

01:16:27.120 | I've listened to the IR scholar, John Mearsheimer, I've listened to the international development

01:16:30.400 | economist, Jeffrey Sachs, I've gone back and listened to our former ambassador to the Soviet

01:16:35.520 | Union, Jack Matlock. I've read George Kennan's interviews. I've read Bill Burns, our current CIA

01:16:40.880 | director on this matter. There are plenty of experts who warned that our policy of trying to

01:16:46.800 | bring NATO right up to Russia's border would eventually blow up in our faces, it would poison

01:16:52.880 | our relations with them, and lead to conflict and this war. So there are plenty of authoritative

01:16:58.800 | sources going back many years on this topic. And the problem is that the people on the other side

01:17:04.560 | of this debate simply want to memory hole all of these warnings and deny that they that this war

01:17:10.720 | was ever predicted. Because if this war was predicted, it means it could have been avoided.

01:17:15.200 | They don't want to admit that this war could have been avoided.

01:17:17.760 | Or how about this? How about war is messy, resolving things internationally with dictators

01:17:24.160 | can be very hard. And nobody wins in some of these cases. No, there's no perfect outcome here.

01:17:28.880 | And you could hold in your head two things. Number one, Putin's a dictator, we need to hold the line

01:17:33.440 | and make sure it doesn't invade other countries. And number two, yeah, you probably want to keep

01:17:37.680 | normal relations with these people and negotiate with them to resolve conflict. I'm getting a

01:17:43.520 | little concerned about the saber rattling on both sides in China. You know, we're escalating all this

01:17:47.840 | chip stuff. We're escalating and Xi Jinping is taking complete control. I'm wondering who's

01:17:52.960 | going to meet with him who's going to talk to Xi Jinping about how we could collaborate together?

01:17:57.040 | Who's left to talk to him Tim cook? There's a there's a bunch of unforced errors happening

01:18:01.280 | in China. How do we de escalate? Well, there's a bunch of unforced errors that you have to let

01:18:04.880 | play out because they have huge economic implications. So I don't think this I don't

01:18:11.040 | think this is a time for again, I think David's generally right. We do not have time for

01:18:15.520 | adventurism right now. Because even before we engage in some of these other places,

01:18:20.960 | there are a lot of, you know, headwinds that are working against for so for example, in China,

01:18:26.160 | you have these massive demographic headwinds that are just building, we have to see what

01:18:31.840 | the chips act does in terms of follow through to China's ability to expand militarily or

01:18:36.400 | technologically. There are all of these things that that you owe as a citizen of the United

01:18:42.960 | States to see some more data on the ground in terms of its empirical impact before you re

01:18:47.440 | underwrite a different strategy. Right now the strategy is working. You know, we we are observing

01:18:53.040 | this, you know, one China policy, I think that's the right thing to do. And now let all of this

01:18:57.440 | other stuff play out. Can I say one thing about this? So what the administration did in banning

01:19:03.120 | China from buying from us or any of our allied countries, these advanced semiconductor chips,

01:19:08.880 | that's what they did. They only banned the sale of chips to China, they banned the sale of

01:19:13.120 | equipment that can make the chips. And they even prohibited American citizens and companies

01:19:17.600 | from working in China to basically help them set up their own foundries and chip fabrication. So

01:19:24.080 | they are essentially cutting off China from advanced chips. That's the goal here. And you

01:19:30.080 | know, we've talked about on this pod before how chips are the new oil, right? These advanced

01:19:34.880 | semiconductors are the new oil. So this is almost like an oil embargo of China. If you go back and

01:19:41.520 | look at it, if you go back and look at history, reason why the reason why is they don't want

01:19:46.720 | these in weapons, correct? That is the stated reason. That's the tip of the spear. But I think

01:19:54.480 | the more impactful mechanism is to prevent an entire layer of infrastructure to be built in

01:20:02.320 | China that allows them to advance all of these next generation cyber capabilities, including a

01:20:08.000 | whole bunch of things in AI, that we want to make sure that as often and as often as possible is,

01:20:15.680 | is for the United States and our allies as we choose. So all this next generation silicon will

01:20:21.760 | do a lot more to push that forward. And so if you put that in the hands of Chinese technology

01:20:27.360 | companies, or Chinese government, or the Chinese government in the parts that are actually

01:20:31.680 | technological, you actually increase the surface area in which you compete. By preventing that

01:20:38.880 | technology to go to them, you decrease the service area in which you're competitive, and they are

01:20:43.360 | one or two steps behind and have an hour forced to build it themselves.

01:20:46.800 | So freeberg, if that happens, do you think that China escalates and says, Well,

01:20:52.320 | why are we building iPhones here? No, I think China makes decisions a little differently

01:20:59.120 | than perhaps US policymakers and foreign policy makers make decisions, they think forward,

01:21:06.800 | and calculate the series of events that will follow from that decision. Whereas we are typically

01:21:12.240 | reacting to some event that's happened in the past, not necessarily always thinking through

01:21:17.840 | the second and third or third order effects and consequences of our decisions. So the China

01:21:22.640 | calculus would likely look something more like, if we were to say stop making iPhones here,

01:21:27.840 | we would estimate that the US would do the following to retaliate back against us.

01:21:31.920 | And as they do through that calculation, you end up realizing pretty quickly that there isn't as

01:21:36.640 | much to gain as there is more to lose by doing that. That would be my guess. I'm no China expert,

01:21:42.320 | I'm no foreign policy expert. But from my understanding of how Chinese policymakers

01:21:47.280 | do think and do make decisions, it's much more about what's the rational calculated

01:21:51.760 | set of outcomes that will emerge and evolve from this decision. And in my experience,

01:21:56.640 | talking with people in the United States, that are in various communities of influence,

01:22:01.600 | it's much more about let's do what we consider to be the right or moral thing right now.

01:22:06.000 | And in response and retaliation, and let's do an eye for an eye. So that's why I don't think that

01:22:10.560 | they're likely to be the first step in an escalation escalatory ladder. There probably

01:22:16.800 | be a few more series of provocations before that may happen, at which point, it may need to be kind

01:22:22.080 | of an inevitable step that they'd have to take. But again, I think,

01:22:25.840 | I don't know, I mean, so in terms of the motivation for this, I think it's pretty clear,

01:22:29.760 | this is an attempt to hobble the Chinese economy, not just that all their weapons programs,

01:22:35.760 | but their economy itself, and hold them back and slow down their rise and their rapid growth.

01:22:41.520 | Now, is that a good idea? I mean, I think what this shows is we've moved from

01:22:45.040 | sort of economic logic, which is about finding trade surplus and win-win scenarios to geopolitical

01:22:51.840 | logic, which is about balance of power. And this sort of ban on sales of semiconductors to them,

01:22:57.920 | it's very much geopolitical, because it's hurting our companies, but it hurts China more. And so

01:23:02.800 | it's about increasing our balance of power against them. And now listen, I think you could make the

01:23:09.840 | argument that we were overdue to be thinking in terms of great power competition and geopolitical

01:23:16.880 | rivalry. And this is an attempt now to correct the bad decisions that were made 20 years ago in

01:23:23.920 | terms of how we fed the Chinese economy until it became a pure competitor to the United States.

01:23:28.880 | So I think you can make those arguments. The thing that concerns me most about it is,

01:23:34.640 | do our leaders really have the bandwidth to manage a second front in the sort of great

01:23:42.800 | power competition right now, while we've got Russia and Ukraine going on, on the one hand,

01:23:47.760 | are they really ready to manage an escalation of the competition with China? And to Freeburg's

01:23:53.600 | point, have they really thought through all the second, third, fourth order consequences of this?

01:23:58.320 | Have they thought through the incentives this may create on China, for example, to take Taiwan? I

01:24:03.600 | mean, if Taiwan is the place that makes all these chips through TSMC, for example, and we have now

01:24:11.200 | cut them off, we've now embargoed them from these chips, does it strengthen China's incentive to go

01:24:16.400 | after Taiwan? Does it strengthen China's incentives right now to help Russia in its war in Ukraine

01:24:22.960 | in retaliation, because they don't want to see Russia decisively defeated, and then they will

01:24:30.800 | solely be in the gun sights of US hawks. So I think there's a lot of things that could go wrong here

01:24:37.040 | when the US is now escalating geopolitical tensions and competition, not just on one front,

01:24:44.800 | but on two fronts. And especially given how weak the US economy is, and that we're headed into

01:24:52.160 | a major recession next year, it just feels to me like they are, you know, they are kind of putting

01:24:58.880 | their foot on the accelerator in terms of geopolitical risk at a time when we're not

01:25:02.880 | really in a great spot to be taking those risks. Also, on a foreign policy basis. Is there no

01:25:08.640 | common ground? Are there no things we could collaborate on and work on together? Right?

01:25:12.880 | And that's the thing that seems to be missing in the foreign policy for the last couple of

01:25:16.880 | administrations is, are there things that we could be building together? Are there things that we

01:25:21.040 | could be working on the environment, energy, sustainability, education, I don't know what it

01:25:26.560 | is. But it felt like, you know, with China for a couple of decades, we felt like we were working

01:25:31.040 | in a very collaborative way. And now it feels like every single instance is adversarial.

01:25:35.040 | Right? Because the problem is that those policies of constructive engagement that you're talking

01:25:40.480 | about, fed the Chinese tiger until it became a dragon. Yeah. Now the size of vagar or something

01:25:47.440 | and the US policy establishment in the Pentagon look at the rise of China. And they're like,

01:25:59.120 | what have we done, we have created a peer competitor, the United States, we need to stop

01:26:03.200 | their economic rise. And I think that, again, I think there is a geopolitical logic and strategy

01:26:10.240 | to what the administration has done. But I question the timing of doing it at the same time

01:26:14.480 | that we have this unresolved war in Eastern Europe. Well, it is nice that we're seem to be

01:26:19.280 | getting some of this on showing of chips, and that money is actually starting to flow. It does

01:26:22.400 | seem like we're thinking a little bit like in decades and strategy. The other part, I think

01:26:26.640 | Biden and Blinken have done a good job. They've done a good job on this right now. They've played

01:26:31.280 | it well. I don't know about that. I just come on. First of all, horrible job. Hold on a second.

01:26:39.040 | Biden did a horrible job. The tiger. Hold on. Hold on. You poke the tiger. No, hold on. They

01:26:45.120 | take where they did a bad job is last year, they had a whole year to negotiate to avoid

01:26:49.600 | this Ukraine war from happening. Biden even had a summit with Putin on June 16. Last year,

01:26:56.080 | they never engaged in diplomacy. And now they have stacked this geopolitical risk with China

01:27:01.280 | on top of the risk they've already created in Ukraine. I, this policy may or may not ultimately

01:27:06.640 | turn out to be correct. I like I said, I can see the strategy behind it. But I do not believe

01:27:11.360 | that Biden and Blinken have thought through the second, third and fourth order consequences,

01:27:16.000 | just like freeberg said. So I think it's a little early to be giving them credit on this.

01:27:20.160 | All right, freeberg, you got anything in the science corner, we gave we gave saxes red meat.

01:27:25.440 | And he ripped it to shreds. Now it's time to give you your soy tofu.

01:27:29.280 | You guys a quick, a quick science corner, please, please. So we've talked in the past about the

01:27:33.840 | human gut biome, 10 trillion bacterial cells living in our gut biome. And it turns out and

01:27:38.880 | there has been this theory for many years, that a lot of human disease actually originates in the

01:27:43.360 | gut. And there's increasingly evidence of how and why this happens. So it turns out that your immune

01:27:48.560 | cells can sometimes see a protein on the outside of a bacteria that sits in your gut, and it attacks

01:27:54.800 | that bacteria, and it tries to get rid of it. That protein can look a little bit like a human

01:27:59.520 | protein at some cell in your body. And so that then triggers an autoimmune reaction, meaning you

01:28:04.960 | are now making these antibodies to proteins that look a lot like your proteins and other parts of

01:28:11.120 | your body. And then your cells start to destroy yourself. And you end up having inflammation and

01:28:16.080 | disease. And they found evidence of this across a lot of disease states. So just the other day

01:28:20.640 | published in the journal science, translational medicine was a really interesting paper by a team

01:28:26.800 | that identified a very specific bacteria that we find in the gut, that can actually trigger

01:28:32.400 | rheumatoid arthritis. And so you know, I think 2 million Americans have rheumatoid arthritis,

01:28:37.600 | it's a really debilitating inflammatory disease. And we never understood where the inflammation

01:28:42.000 | comes from. Why is the human immune cell creating antibodies to attack its own protein in the joints

01:28:49.040 | of the body. And now it looks like that the protein that we find in the joints of the body

01:28:52.880 | has some overlap or three dimensional structure that looks similar to the protein we'll find

01:28:58.000 | on this very specific gut bacteria that they found, which creates obviously a path now,

01:29:03.200 | for if we can stop that gut bacteria from proliferating, or, you know, existing in the gut

01:29:08.480 | over time, that can have a reduction, but sorry, it's a rate of rheumatoid arthritis.

01:29:13.920 | Did they guess what the mechanism of action was?

01:29:16.640 | So so this tech, not this, so the mechanism of action is typically what's called,

01:29:20.080 | generally speaking, protein mimicry. And so protein mimicry means that there's some so

01:29:24.960 | think about a protein as being like, you know, a clumpy rock. And there's some part of the clumpy

01:29:30.800 | rock that looks a little bit like the part of another clumpy rock. And that's the protein,

01:29:34.880 | think about that as being the protein on the bacterial cell, and the protein in your joint

01:29:39.520 | cells. And so your body makes an antibody to that little part of the rock on the bacterial cell

01:29:44.720 | to get rid of it. And then it that there's some overlap that looks a little bit like your own

01:29:48.720 | cell. And so that's called protein mimicry. And because of the ability now to do DNA sequencing,

01:29:54.560 | and now with, you know, some of the alpha fold technology, we can actually take the genome from

01:30:00.640 | that bacteria, predict the 3d structure of the proteins created that by that bacteria,

01:30:06.880 | and then potentially identify that there's a mimicry or an overlap between our own protein

01:30:11.600 | in ourselves and the protein of the bacteria, which is why we're having auto immunity, which

01:30:16.320 | now our immune cells are not just attacking the bacteria, we could solve arthritis, we

01:30:19.840 | saw for arthritis. And so there's a lot of disease states that are starting to look like this. So the

01:30:23.520 | combination of DNA sequencing and our ability to identify organisms in the gut biome. And by the

01:30:28.080 | way, so much of this goes back to the gut biome, we're finding all these disease states from lupus

01:30:32.080 | to show grins to rheumatoid arthritis, that have some linkage back to some bacteria that shows up

01:30:37.280 | in your gut. And so now we can be very targeted potentially about eradicating that bacteria from

01:30:42.000 | the gut, or, you know, kind of changing our gut biome in a way that ultimately resolved to

01:30:47.200 | eliminating that disease risk. And so it's really fascinating. Yeah.

01:30:50.800 | Jamal, any thoughts on this gut biome?

01:30:52.640 | I mean, I always knew the solution was either in freeberg's gut, you know,

01:31:02.320 | in his gut or on Uranus.

01:31:03.680 | Oh, freeberg science quarter.

01:31:07.200 | Do it again. The joke didn't land.

01:31:10.880 | All right, here we go one more time. So Chamath, any feedback on this? It's pretty great science

01:31:15.520 | going on here. I mean, it was always 50/50 that the solution was either your gut or Uranus.

01:31:21.280 | Okay, you can't laugh till after you land the joke. Come on, do it again.

01:31:26.000 | I saw it coming. It was coming around the corner and I just started peeking his head out.

01:31:30.400 | Just leave this all in.

01:31:32.560 | Let's get this right for the fans.

01:31:34.160 | Okay, here we go. Three, two. All right, Chamath, it seems like very interesting science

01:31:38.320 | there coming out of science corner.

01:31:39.600 | 50/50.

01:31:40.640 | 50/50.

01:31:41.120 | You got Uranus.

01:31:45.120 | You can't even get it out. I mean, you tried to get it out of his anus. It was poking. It was

01:31:53.120 | like a little turtle coming out of his anus, but you couldn't get it out.

01:31:55.840 | Oh my gosh. 50/50.

01:31:58.720 | You got Uranus.

01:32:00.880 | It's like the entire science quarter is just here for us to beat up the nerd and throw him in a

01:32:06.240 | locker.

01:32:06.640 | Oh my God. My stomach is hurting. Oh my God.

01:32:11.760 | Poor guy.

01:32:12.160 | Oh, I needed that laugh.

01:32:13.520 | You ever see Smokey and the Bandit where they have the reels at the end sacks?

01:32:16.800 | The outtakes.

01:32:17.120 | When Don DeLuise and Burr Reynolds. I just keep losing it. That's what this is.

01:32:22.400 | Oh my God.

01:32:23.840 | It's like, I'm going to say science quarter and people are going to just start laughing

01:32:26.800 | and thinking about Freeberg's anus.

01:32:29.040 | All right. Listen.

01:32:33.440 | Welcome home, Saks. We miss you for your week off.

01:32:37.600 | We miss you, David.

01:32:41.680 | Thanks, guys.

01:32:42.640 | Thanks. And we'll see you over on Market Street. No announcements right now.

01:32:46.480 | No testimonials, no announcements. I'll see you at yoga. We're going to do a--

01:32:50.160 | I'll see you at the homeless shelter. We're volunteering today, right?

01:32:53.600 | Yeah, volunteering. I'll see you over at the homeless shelter.

01:32:55.840 | You're pouring soup?

01:32:57.440 | Yeah. If you could get me a tofu salad with extra tempeh before Freeberg eats it all.

01:33:01.440 | Don't don't go. Don't get me started on tempeh.

01:33:04.880 | I'm going to go. I'm going to pour all the oatmeal out. I'm going right to the cafe.

01:33:07.840 | I'm going right to the cafe. I'm getting all the oatmeal right down the drain.

01:33:11.360 | Honestly, honestly, there should be there should be one milk, non-lactose alternative.

01:33:16.960 | And then one milk.

01:33:18.880 | It's called black coffee. And that's it.

01:33:20.000 | Black coffee. That's it. If you're lactose intolerant. Yeah. Lactose intolerant milk.

01:33:23.040 | No, have one. Have one thing without lactose.

01:33:25.680 | So whatever that is.

01:33:26.800 | Can we wrap the show now?

01:33:28.320 | No, we're having too much fun.

01:33:29.360 | Can you imagine? Can you imagine the distribution of gluten-free snacks?

01:33:35.440 | I mean, there should have a few, but you know, all kinds of different snacks.

01:33:39.120 | And by the way, the keto snacks have horrendous amounts of chemicals in it.

01:33:42.880 | The xylitol. What is xylitol?

01:33:44.880 | Here's xylitol. Well, screw up your stomach, man. Do not have that.

01:33:48.320 | It's horrible.

01:33:49.200 | Freeberg, you want to tell everybody about xylitol and the impact it has on your anus?

01:33:52.800 | [Laughter]

01:33:57.280 | No, it seriously does.

01:33:58.720 | I think xylitol is the thing that gives you a lot of gas and you just keep ripping.

01:34:02.480 | I think it's really bad for you.

01:34:05.440 | Here's an idea.

01:34:06.080 | [Laughter]

01:34:10.880 | Way to go, J-Cal.

01:34:12.320 | Yeah, now he's going to turn into a school shooter.

01:34:14.240 | Well, that's your fault. You were mean to him.

01:34:16.400 | You came up with the anus jokes.

01:34:18.320 | That was all your anus.

01:34:18.880 | I've been doing that joke for five years with him.

01:34:22.400 | You're a bully.

01:34:23.280 | I'm not.

01:34:24.080 | No, no, no.

01:34:24.480 | You bullied Freeberg off the show.

01:34:26.160 | You brigaded him.

01:34:26.960 | I did not on the show.

01:34:28.400 | We brigadooned him.

01:34:30.000 | We brigadooned our bestie.

01:34:31.680 | Sorry, bestie.

01:34:32.240 | All right.

01:34:32.720 | For the dictator himself, Chamath Palihapitiya, going into sweater season, I might note,

01:34:37.440 | it's going to be a big, big Q4 for us.

01:34:39.680 | Big Q4.

01:34:40.400 | And the beep of the beep corporation, David Sachs.

01:34:45.280 | Oh, if you mean the general partner of Kraft Ventures.

01:34:47.840 | Yes, the general partner of Kraft Ventures.

01:34:49.760 | That's it.

01:34:50.400 | And the queen of quinoa, the prince of panic attacks, the ambassador of Uranus, David Freeberg.

01:34:57.200 | We will see you next time.

01:34:58.320 | I'm J-Cal.

01:34:58.800 | Love you, boys.

01:34:59.120 | Greatest moderator.

01:34:59.840 | I love you, guys.

01:35:00.400 | Bye.

01:35:00.640 | Bye.

01:35:00.880 | [MUSIC PLAYING]

01:35:02.880 | [MUSIC PLAYING]

01:35:05.360 | [MUSIC PLAYING]

01:35:07.360 | ♪♪ I'm going, I'm going all in ♪♪

01:35:10.040 | ♪♪ And it said, we open-sourced it to the fans, and they've just gone crazy with it ♪♪

01:35:14.040 | ♪♪ Loving You L.A. ♪♪

01:35:14.940 | ♪♪ I'm the Queen of Kin-wah ♪♪

01:35:16.200 | ♪♪ I'm going all in ♪♪

01:35:17.940 | ♪♪ What, what your winners like? ♪♪

01:35:20.960 | ♪♪ What, what your winners like? ♪♪

01:35:22.960 | ♪♪ Besties are gone ♪♪

01:35:25.140 | ♪♪ 'Cause my, uh, dog taken notice in your driveway steps ♪♪

01:35:28.100 | ♪♪ Oh, yeah ♪♪

01:35:29.340 | ♪♪ Oh, man ♪♪

01:35:31.300 | ♪♪ The dasher will meet me at Woodson Land♪♪

01:35:33.460 | ♪♪ We should all get a room and just have one big huge orgy, 'cause they're all just useless ♪♪

01:35:37.260 | ♪♪ It's like this, like, sexual tension that they just need to release somehow ♪♪

01:35:40.360 | ♪♪ What, what your, uh, B? ♪♪

01:35:43.160 | ♪♪ What, what your, uh, B? ♪♪

01:35:45.160 | ♪♪ B, what your, uh, B? ♪♪

01:35:47.160 | ♪♪ Besties are gone ♪♪

01:35:49.160 | ♪♪ I'm going all in ♪♪

01:35:51.160 | ♪♪

01:35:56.160 | ♪♪ I'm going all in ♪♪

01:35:58.160 | [inaudible].

01:35:59.160 | you

01:35:59.660 | [BLANK_AUDIO]

E102: Elon closes Twitter deal, $META uncertainty, Zuck's historic bet, big tech decline & more

Chapters