E110: 2023 Bestie Predictions!

00:00:00.000 | All right, everybody, welcome to 2023. Everybody's well rested

00:00:04.440 | and ready to take on 2023. Yes, tomorrow. Amazing. Okay, sexy

00:00:09.080 | poo. I know you don't go to temperatures that are under 57

00:00:13.120 | degrees anymore. Have a nice break. Did you go somewhere

00:00:15.360 | warm? Yes. Okay, that's a confirmation. Wow, man, so many

00:00:19.760 | words. And freeberg. I'm over cold weather vacations. Yeah,

00:00:24.120 | that does happen at a certain point. I actually went to

00:00:26.320 | Florida went to the free state of Florida. Oh, really?

00:00:30.000 | Yes. What's going on in Florida at the turn of the new year? I

00:00:33.320 | wonder that drew you down to the great state of Florida.

00:00:37.280 | We're just freeing it up in the free state of Florida.

00:00:39.880 | Rain Man David

00:00:57.720 | We have our 2023 predictions now, play some music and all

00:01:01.120 | that kind of stuff. Producer Nick at this point. Let's get to

00:01:03.920 | it. Last year, we did. Do you guys notice that every time we

00:01:07.920 | talk about something somewhere between sort of two months to a

00:01:11.920 | year later, the Wall Street Journal ends up writing a big

00:01:14.920 | piece about it. Think piece about it. Yeah. So I tweeted

00:01:17.640 | into the group chat, like last year, we all talked about

00:01:20.400 | sequoia and distributing public equities and how it's very

00:01:24.440 | fraught and difficult. And then today, they write this big

00:01:27.560 | article about how people have just burned enormous amounts of

00:01:32.040 | billions of dollars that they could have returned to LPS like

00:01:35.320 | these venture investors by not distributing.

00:01:37.320 | Makes sense.

00:01:39.560 | Three weeks ago, when we did our end of the year wrap up, my big

00:01:43.880 | winner for 2022 were the pot shops, right Citadel. And today

00:01:49.000 | in Wall Street Journal, an article lands that these guys

00:01:52.520 | with 56 billion of aum over the last two years have made almost

00:01:56.640 | $45 billion of revenues. Isn't that incredible?

00:02:01.160 | And this is what happens to math.

00:02:03.080 | Usually, they are, these guys are just crushing in and Citadel

00:02:07.640 | securities did like almost, you know, seven and a half billion

00:02:10.320 | of revenue. I mean, it's unbelievable these businesses

00:02:14.040 | how good they are. Yes. So let's get into this is typical.

00:02:17.520 | Chamath. If you think about journalists, they're trying to

00:02:20.160 | get into the conversations that are occurring at the bar after

00:02:23.400 | the event, the late night conversation, the group chats

00:02:25.800 | will and that's what this podcast is. It's the exposed

00:02:28.320 | back channel, right. And so if you listen to this pod, you got

00:02:31.560 | the back channel of Silicon Valley, politics, tech, science,

00:02:34.920 | etc. So let's do our predictions. In 2020, we said

00:02:38.480 | our biggest political winner would be sacks. And I both said

00:02:42.360 | to Santa's Chamath says you should bang and freeberg said

00:02:44.240 | Putin, who do we think is our biggest political winner going

00:02:47.240 | forward? Who do you pick sacks biggest political winner for

00:02:50.800 | 2023? Who will be your biggest political winner for 2023?

00:02:53.400 | Well, I went a little bit outside the box here, because I

00:02:55.680 | think we're gonna have gridlock in Washington. So not expecting

00:02:58.680 | a ton to be coming out of Washington over the next year.

00:03:01.720 | My pick for biggest political winner is Asian American college

00:03:06.800 | applicants. There are two Supreme Court decisions that the

00:03:12.080 | court heard on Halloween last year, there was a lawsuit

00:03:16.480 | against Harvard and a another lawsuit against UNC by a group

00:03:21.640 | called students for fair admissions, and that they

00:03:24.560 | maintain that Harvard and UNC violate Title Six, the Civil

00:03:27.920 | Rights Act, because Asian American applicants are far less

00:03:31.720 | likely to be admitted than similarly qualified applicants

00:03:35.000 | from other groups. And the federal courts in Boston and

00:03:39.440 | North Carolina rejected this argument, but the Supreme Court

00:03:43.320 | took up the cases. So they kind of went out of their way to hear

00:03:46.800 | this. And I think that they are going to, they're going to

00:03:49.840 | file a primitive action, I think the majority will rule to strike

00:03:52.640 | down these policies that really discriminate against Asian

00:03:57.840 | Americans. And I think they're the last group in America where

00:04:02.120 | it seems to be okay to discriminate against and I think

00:04:05.200 | the Supreme Court is gonna is gonna find that unconstitutional.

00:04:08.040 | To my offended thoughts there, you have brought this up

00:04:11.040 | multiple times on the podcast over the last two years.

00:04:14.000 | I have said that this was unfortunately, affirmative

00:04:18.400 | action when it started, I think had very, very good intentions.

00:04:22.760 | And I still think that there's a place for it. The problem is

00:04:26.320 | that these very liberal institutions decided to play

00:04:29.800 | judge, jury and executioner on which minorities counted in

00:04:35.120 | affirmative action. And that's not what the intention was. The

00:04:39.520 | intention was to look at the establishment and their ability

00:04:44.160 | to get their progeny into these incredible schools, even when

00:04:48.080 | they didn't deserve to be there. And so I think this was always

00:04:52.680 | an issue of classism that was disguised as racism. And people

00:04:59.600 | who are in the upper classes of society have always had an edge.

00:05:02.720 | You had the legacy admissions into Harvard, you had people,

00:05:07.200 | the Kushner's very famously right, like the $5 million check

00:05:10.480 | from the father that got the son into the school, all of this

00:05:12.960 | stuff, it's, it's been well written about. And whether or

00:05:16.160 | not those things are right, isn't the point. I think the

00:05:18.560 | point is that there are folks in emerging, lower middle classes,

00:05:22.760 | who have the potential to crush. And those kids should have a

00:05:26.560 | chance. And you can't just decide who those kids are based

00:05:31.040 | on the color of their skin. And in this case, what happened was

00:05:34.560 | some blacks were still allowed in some Hispanics were allowed

00:05:37.200 | in, but Asian Americans broadly were discriminated. And that was

00:05:40.480 | a really stupid outcome. You cannot punish kids for willing

00:05:45.760 | to work their ass off. And I think that that was the

00:05:50.200 | unfortunate outcome of what affirmative action has become by

00:05:53.600 | 2022. So it is going to get repealed. The reason it's going

00:05:58.520 | to get repealed is that, you know, we have case law that very

00:06:02.520 | clearly states that any institution that accepts federal

00:06:06.080 | funds cannot have any form of discrimination. And this is how

00:06:10.520 | these folks who have tried to repeal affirmative action have

00:06:14.360 | taken up this lawsuit. And hopefully, the outcome is a more

00:06:19.080 | meritocratic system that also tries to create a plurality of

00:06:23.800 | different people from different backgrounds, free bargaining

00:06:26.240 | thoughts. And if not your biggest political winner for

00:06:29.480 | 2023, my biggest political winner for 2023 is MBS Mohammed

00:06:36.480 | bin Salman, I think that Saudi Arabia will have the most

00:06:42.880 | important year in kind of the modern era in terms of their

00:06:46.680 | role. I don't know if you guys saw this Reuters report from a

00:06:50.280 | few weeks ago, but there's kind of a deepening discussion about

00:06:56.200 | the oil yuan trade, in that Saudi would sell oil to China

00:07:02.120 | and they would get paid in one Saudi Arabia sits at the

00:07:04.640 | intersection of the United States, Russia and China, they

00:07:07.800 | have relationships with all three nations. And in the kind

00:07:11.640 | of conflict and power struggle that is underway, I think that

00:07:15.400 | ultimately, the direction of where global currency kind of

00:07:20.760 | reserves will be taken, and the importance of these great

00:07:24.600 | nations and who sits atop whom can actually be dictated and

00:07:29.240 | significantly influenced by MBS this year, by some of the deals

00:07:33.280 | and trades he might put in place and the and the kind of

00:07:37.880 | partnerships he might forge, I think as a result, you will see

00:07:41.840 | him kind of rise in terms of influence, not in terms of, you

00:07:45.160 | know, hey, the world has accolades for this for this guy.

00:07:47.640 | But I think in terms of global influence, he will rocket ship

00:07:51.280 | to kind of the top because of this, this kind of jockeying he

00:07:55.160 | can now do between these three great nation states and

00:07:58.600 | defining, you know, what's going to happen with the US and

00:08:01.080 | what's going to happen with China and what's going to

00:08:02.280 | happen, great selection of currency reserves, great

00:08:04.240 | selection. I mean, great selection.

00:08:06.120 | The shitty thing, by the way, about your selection is that

00:08:09.040 | Biden, our explicit stance is unfortunately, quite

00:08:16.160 | confrontational with MBS. And yeah, you saw that play out in

00:08:19.920 | q4. We asked them to ease up on OPEC plus to introduce supply

00:08:29.920 | cuts, and they did some nominal 100,000 barrel per day cut

00:08:34.840 | didn't do much of anything. There was an article to your

00:08:38.400 | point freeberg just recently about Saudi really doubling down

00:08:42.920 | on getting the oil out of the ground and monetizing their

00:08:46.040 | petrochemicals. So there's just going to be a glut of supply in

00:08:49.800 | the market. And we have the least amount of influence with

00:08:55.240 | Saudi Arabia than we've ever had. And it seems like we could

00:08:59.320 | change that if we decided to, but I think Biden has taken this

00:09:02.480 | very confrontational approach, which doesn't seem to make and

00:09:05.160 | remember a lot of sense.

00:09:06.480 | Their stated intent is to diversify away from oil, and

00:09:10.200 | into technology and other kind of emerging growth economies.

00:09:13.120 | That's why they funded the vision fund. That's why MBS made

00:09:15.920 | that big kind of visit to Silicon Valley a few years ago.

00:09:19.200 | And there is technology that they want to import into Saudi

00:09:22.520 | Arabia, and they want to have ownership in around the world.

00:09:24.560 | And if the US is creating a barrier for them to import us

00:09:27.280 | tech into Saudi or for Saudi to kind of invest in the US, but

00:09:30.640 | China and Russia have open arms, and all they want is for Saudi

00:09:34.440 | to start doing trades in yuan, it's going to happen. And I

00:09:37.680 | think that's where this guy has kind of a real opportunity to

00:09:40.440 | shift the global economic dynamic,

00:09:42.240 | say what you will about Trump, he had open dialogue with North

00:09:47.240 | Korea, China, Russia, and the enemies close, sure want to be

00:09:52.920 | able to talk to anybody, and he was able to talk to anybody. Now

00:09:56.720 | you also want to be able to say, Hey, listen, you can't dismember

00:09:59.640 | a journalist like Khashoggi, and you need to be able to have both

00:10:02.000 | of those ideas in your head. You can't be rigid in foreign

00:10:04.320 | policy, you have to be fluid, and keep people at the table

00:10:06.920 | talking to math, who is your big political? Who do you predict

00:10:10.560 | will be the big political winner of 2023? Chamath's prediction,

00:10:13.320 | everybody, go ahead.

00:10:14.400 | I really like spread trades, right? Where you go long

00:10:17.960 | something and short another. So I'd like to pair my biggest

00:10:20.520 | political winner with my biggest political loser for 2023. Okay.

00:10:23.840 | And I am going to focus on the Republican nomination. And I am

00:10:28.120 | going to go long. Nikki Haley, and I'm going to go short. Ron

00:10:33.920 | DeSantis. Now let me

00:10:35.160 | sacks again, if you if you're watching, you're not watching

00:10:39.600 | sacks right now, he is ready to interject, go to Martha.

00:10:43.480 | So I think that all of this nonsense, for example, in the

00:10:47.840 | house speaker race, all of the midterm results, what it really

00:10:52.360 | speaks to our people are getting exhausted with the lunatic

00:10:56.840 | fringes of both parties. That's point number one. And point so

00:11:02.120 | that favors moderates as an emergent class. And point number

00:11:06.880 | two is that if you look back through many, many cycles of

00:11:09.800 | Republican and Democratic nominations, it is a very

00:11:13.920 | negative thing to be in the lead so early going into the Iowa

00:11:17.920 | caucuses in January. And so if you put those two things

00:11:21.440 | together, the risk is that DeSantis decays, things emerge,

00:11:27.080 | people attack him because he's the clear front runner. And the

00:11:30.600 | opportunity just like it was for Trump in 16, or for Clinton, or

00:11:35.040 | for George Bush, not Herbert Walker, but you know, w is to

00:11:40.760 | emerge from the back. And so if I think about a moderate person

00:11:44.560 | who can emerge from the back, who can consolidate the ranks,

00:11:47.880 | they should probably be from the south, they will have a lot of

00:11:52.520 | these purple compromises that sacks mentioned in their policy

00:11:55.960 | program. And they will have a history of winning and a history

00:12:02.280 | of normalcy. And so I think that of all of the places where you

00:12:07.240 | could ever elect a woman as President of the United States,

00:12:09.680 | I think it will come from the Republicans before it comes from

00:12:12.840 | the Democrats. I mean, the Democrats are, unfortunately,

00:12:16.040 | increasingly judgmental. And I think it's very difficult for a

00:12:20.080 | woman to emerge there. But I do think that Nikki Haley has a

00:12:23.240 | shot. So I'm going to go long Nikki Haley. And I'm going to

00:12:26.000 | short Ron DeSantis.

00:12:27.400 | Okay, I like it a spread trade for his prediction. Well done

00:12:30.720 | before sacks you interject, let me just do mine. And because

00:12:33.600 | then you'll have to interject to I was looking at Biden and Trump

00:12:38.520 | and thinking, hmm, which one of these is going to have the big

00:12:41.520 | win in 2023. So the two biggest I think, players, I have a

00:12:45.840 | prediction for Trump. I think he's going to lose 50 pounds on

00:12:48.800 | the Ozempic. Everybody loves a weight loss story. I think he is

00:12:52.960 | going to be indicted by Garland. Is he on? Wait a minute. Sorry.

00:12:56.800 | He's on Ozempic. No, I'm predicting an Ozempic run.

00:13:00.920 | And he's going to drop 4050 pounds, then we're going to have

00:13:04.000 | a svelte Trump get indicted by Garland. And the debates and the

00:13:09.680 | and the and the rigmarole with DeSantis, I think he's gonna go

00:13:13.920 | after DeSantis based on weight and height. And then he's going

00:13:17.680 | to win the nomination in 24. And we're gonna have Trump versus

00:13:21.160 | Biden. But this is a crazy prediction here. I think we're

00:13:25.080 | going to have a settlement. I think he's going to agree to not

00:13:29.600 | run and get the pardon. This is a crazy prediction. I know. But

00:13:33.680 | I think he loses the weight. He wins the nom. He gets indicted.

00:13:38.400 | And then he gets the Richard Nixon pardon global pardon for

00:13:42.120 | all of the shit he's done. Saks you can reply to these two crazy

00:13:48.680 | predictions is right in mind.

00:13:50.000 | I mean, this is like proof positive that everything you

00:13:53.120 | have to say about Trump is an act of projection. I mean, like

00:13:57.200 | a zempik. Are you talking about yourself or Trump?

00:14:01.960 | Strike. Boom.

00:14:04.000 | My journey has been a zempik and super good. Yes. Both of those

00:14:09.480 | things. Have you Saks done any of them?

00:14:11.920 | Yeah, I've tried it.

00:14:13.400 | Yeah. I think everybody should be looking into this if you're

00:14:16.240 | have weight issues. It's a it's a it's a great new

00:14:18.520 | I would say it even more broadly. I've been reading a lot

00:14:21.120 | about these GLP ones. And I gotta tell you, statins are a

00:14:24.320 | clear wonder drug. Yes. Okay. I think the the 50 year

00:14:27.960 | longitudinal data on its value is pretty unimpeachable. Metformin

00:14:35.560 | even taken prophylactically has shown incredible benefits for

00:14:39.720 | cell regeneration, longevity, and glucose management. And the

00:14:43.960 | real look, the reality is, let's just take a step back the

00:14:46.040 | American diet, we're all pre diabetic. Okay, so let's just

00:14:49.120 | let's just not beat around the bush, the way that Americans eat

00:14:52.600 | and our food supply and also probably in Western Europe is

00:14:55.440 | pre diabetic by definition, it's shit, it's trash. So metformin

00:15:01.600 | makes a lot of sense. And again, it's longitude data is

00:15:03.680 | incredible. But I got to tell you, the early data on these GLP

00:15:07.160 | ones are unbelievable. It's extraordinary. And I can tell

00:15:11.840 | you, first hand experience, I would lose half a pound a week

00:15:15.080 | when I would diet. No, but what I'm saying is, it's beyond that

00:15:19.000 | I'm what I'm talking about is insulin response. It's cardiac

00:15:21.920 | health. And so if this data tracks like this, man, you just

00:15:25.240 | want to put everybody on these GLP. I just want to also put a

00:15:27.680 | disclaimer out here, do your own research, work with your doctors,

00:15:29.880 | whether it's for metformin or as epic, but I had great results on

00:15:32.560 | it. I recommend if you're struggling with weight loss,

00:15:35.840 | like I did for many years, you talk to your doctor about it.

00:15:38.520 | That said, it's not a commercial for what Govia or Zempik, but I

00:15:40.640 | do think these things are going to change the world jarra. Well,

00:15:42.920 | and they're getting better. And it seems like diet, people with

00:15:45.520 | diabetes are on them for life. So if your question is like, if

00:15:48.640 | I could do this for a year to lose weight, you know, I think

00:15:51.080 | diabetics are on it for life. So when I made my decision, again,

00:15:53.480 | work with your doctors, not random podcast or venture

00:15:56.520 | capitalists for your health advice. I was like, well, all of

00:16:00.600 | these people who have diabetes are going to audit for years

00:16:02.760 | unless it's non toxic, go get a prenuvo scan. Just make sure

00:16:06.080 | absolutely you got. So there you have it. There's our

00:16:08.840 | predictions. So I want to respond to any of this. I want

00:16:11.760 | to I want the sacks to react to my spread.

00:16:13.640 | Trade. Yeah. So look, I think, you know, if you're going on a

00:16:16.640 | betting site, I think that you could place that bet that

00:16:20.400 | Chamath made pretty cheaply. And probably it's like has some

00:16:22.880 | good upside to it. So I don't criticize it as a bet. Do I

00:16:25.680 | think it's actually going to happen? No. And I think the

00:16:28.520 | reason is, is this that if you look at what's happening right

00:16:31.720 | now with the speaker's race, there's two very clear wings in

00:16:35.200 | the Republican Party, there's establishment wing, and then

00:16:37.760 | there's kind of this populist MAGA wing. And the candidate,

00:16:41.560 | whoever it is, in 24 needs to unite those two wings. And I

00:16:45.720 | think this is really the best argument for DeSantis is he's

00:16:48.200 | widely accepted by both. I think Nikki Haley's problem is that

00:16:51.400 | she's very well regarded within the establishment wing of the

00:16:54.880 | Republican Party, but she has no meaningful support within the

00:16:57.960 | populist wing. And so I don't think she's capable of bringing

00:17:01.280 | the party together, at least at this point in time, she would

00:17:04.000 | have to prove let's call it populist bona fides that she

00:17:07.520 | just doesn't have right now. So this is why I think you know,

00:17:10.880 | DeSantis, he does have front runner risk, you're right that

00:17:14.080 | people are going to keep taking shots of them, as long as he's

00:17:16.840 | a front runner, but all right, let's

00:17:18.840 | he's capable of he's capable of uniting the party in a way that

00:17:21.960 | it desperately needs right now, as we're seeing with the Kevin

00:17:24.400 | McCarthy thing playing out.

00:17:25.600 | Yeah. Okay, let's go for our biggest losers. We'll rip

00:17:29.240 | through this last year, I said Biden and Trump and the

00:17:31.800 | extremes. Chamath said the progressive left again, the

00:17:34.760 | extreme SAC said Pelosi, who just wrapped up her tenure and

00:17:38.960 | Freeberg said US influence globally was the biggest

00:17:42.960 | political loser. Let's get our predictions for the biggest

00:17:47.480 | political loser of 2023. Freeberg, who do you think will

00:17:50.920 | be the biggest political loser of 2023? The world wants to know

00:17:54.080 | freeberg?

00:17:54.480 | I would continue my US influence, but I am going to

00:17:57.480 | shift. Here's what I think is going to happen this year. My

00:18:01.680 | big prediction is based on I think the world has too much

00:18:07.240 | debt. I think that the economic slowdown coupled with rising

00:18:10.800 | interest rates globally and a dearth of kind of asset capital

00:18:15.080 | inflows means that there's going to be a lot of issues with a

00:18:17.840 | number of debt markets around the world, particularly kind of

00:18:20.440 | emerging sovereign debt. Just to give you guys a sense global

00:18:23.800 | debt is about $235 trillion in public and private. You know,

00:18:28.560 | that's somewhere between five and $15 trillion of interest

00:18:31.040 | payments a year, depending on what the net rate is on $96

00:18:34.440 | trillion global GDP. And there's another trillion and a half of

00:18:37.800 | unfunded liabilities in the US and pensions and Social Security

00:18:40.780 | and all this other stuff. I think this is the year where a

00:18:43.180 | lot of the debt markets start to unravel. The freeberg is a

00:18:46.360 | entity that steps in or a political loser. I'm going to

00:18:49.840 | tell it one second. Political Yeah, so the political

00:18:52.160 | ramifications. So the political ramifications for me, I think

00:18:55.480 | that the the entity that steps in to try and support these

00:18:59.040 | unwinding moments is the IMF. And I think that no matter what

00:19:02.520 | the IMF does, they're going to look bad. I think that the you

00:19:05.280 | know, it's sort of like like Jerome Powell this this past

00:19:08.080 | year, right? Like you raised rates too late, you raise rates

00:19:10.980 | too quickly, no matter what you do, it has some adverse effect

00:19:14.180 | and impact. It's either inflationary, or it impacts

00:19:17.020 | growth. And so I think the IMF is going to get a lot of heat

00:19:22.100 | for either acting not too soon, or sorry, not fast enough or, or

00:19:26.980 | acting too aggressively and causing inflation as a bunch of

00:19:29.980 | these markets face credit risk this year. So my big bet is the

00:19:33.620 | IMF is going to play a major role. And we're going to be

00:19:35.660 | talking a lot about the IMF later this year. I think as a

00:19:38.420 | result, the IMF will get a lot of heat and you'll end up seeing

00:19:41.340 | a lot of pressure and political you know, just like we blame

00:19:44.260 | NATO, just like we blame Jerome Powell, and the Fed will end up

00:19:47.300 | blaming the IMF for a bunch of problems that will arise. But

00:19:50.360 | the natural physics of what's going on is the world has too

00:19:53.800 | much debt and not enough growth to cover the debt, the cost of

00:19:56.380 | debt. That's it. Okay, and the IMF will be the political kind

00:19:59.420 | of, you know, hit that'll that'll result. A point of view,

00:20:02.720 | but I think, yeah.

00:20:03.920 | And who do you have, as your biggest political loser

00:20:08.040 | prediction for 2023? Mr. David Sachs?

00:20:10.760 | Well, I mean, Kevin McCarthy may not survive the week. So let me

00:20:14.560 | go in a different direction. I think California is my big

00:20:19.560 | political loser. And I would say in particular, the city of San

00:20:22.280 | Francisco, both are going to have gigantic budget shortfalls.

00:20:26.040 | You may remember that this is back in 2021. When we had that

00:20:30.520 | asset bubble, California had a surplus of 76 billion. And then

00:20:36.240 | insane. And then 2022 happened. And now the state is looking at

00:20:41.360 | a $24 billion deficit. Well, if we had taken say a third of that

00:20:46.520 | surplus from 21 and put it in a rainy day fund, we wouldn't have

00:20:49.880 | to worry about this deficit. But that was never done. Newsom

00:20:53.080 | started handing that money out like candy to the electorate to

00:20:56.680 | goose is election is reelect numbers and to get him past the

00:21:01.000 | that recall, remember, okay, so the state never got a fiscal

00:21:05.360 | outlook in order. And now I think it's going to be even

00:21:07.880 | worse in 2023. And San Francisco, the city, very

00:21:13.000 | similar kind of problem where its tax base is heavily

00:21:16.440 | dependent on commercial real estate, which is really

00:21:18.240 | suffering. So you know, the city of San Francisco in the state of

00:21:21.160 | California, they've moved their tax base to, to highly volatile

00:21:26.040 | capital gains. And with a really lousy stock market, I don't know

00:21:29.560 | how these guys gonna meet their budgets. So a lot of pain is

00:21:32.520 | going to be a lot of austerity and pain coming, that's for

00:21:34.600 | sure. And these people do not know how to manage a budget.

00:21:38.560 | They're incompetent. So you say California freebirds as IMF,

00:21:42.120 | Chamath, who do you think the biggest political loser for 2023

00:21:45.160 | will be already gave us your predictions. Right? Okay. And

00:21:47.960 | I'm in alignment with you. I think to send us peaked a little

00:21:50.800 | too early and the forever Trumpers and the in the chaos is

00:21:53.840 | going to be a little too much for him to handle. Okay, now we

00:21:58.000 | get into what everybody wants business, business, business,

00:22:00.520 | biggest business winner for 2023. Who do you have Chamath for

00:22:05.280 | your biggest business winner of 2023?

00:22:07.080 | I'm going to pick something out of my portfolio. I think I'm the

00:22:11.440 | only non trivially large investor in both SpaceX and

00:22:16.560 | relativity space. Relativity space has a huge SpaceX is

00:22:21.840 | clearly just crushing on all cylinders. And they're really

00:22:26.920 | the only game in town with respect to launch capability.

00:22:29.720 | And if you just Google it, you'll see that the Europeans,

00:22:33.920 | you know, have a hit or miss capability and launch, the

00:22:38.400 | Russians are completely unable to do launch now because of all

00:22:41.680 | of these sanctions. The private companies in New Zealand or the

00:22:45.720 | United States have also had fits and starts really incapable.

00:22:51.640 | Relativity, which is really which is now the second most

00:22:54.680 | highly valued space business is about to do a launch in the

00:23:02.040 | third week of January. And the big difference between it and

00:23:05.600 | SpaceX, which is sort of why we did it. This is a early YC

00:23:09.600 | company, I did the series A and kind of went along the whole

00:23:11.840 | way. They have 3d printed everything. And the reason why

00:23:15.360 | 3d printing is interesting is you take a so if you if you

00:23:19.960 | think a rocket costs $5 billion, if built by NASA, Elon was able

00:23:25.280 | to take that to 100 to 500 million. And if you 3d print

00:23:29.360 | everything, you can take that cost to like five to 50 million.

00:23:32.760 | And so it allows you to just have this repeatability and

00:23:35.520 | manufacturability. Now SpaceX also has a lot of 3d printed

00:23:38.440 | parts, but relativity is entirely 3d printed. It has a

00:23:43.360 | launch in three weeks at Cape Canaveral, I think. And we have

00:23:50.400 | a like a $10 billion order book that gets unlocked. So I don't

00:23:54.400 | know how to see beyond a lot of these market forecasts right

00:23:57.520 | now. So I'd rather pick a company, I'll pick something in

00:23:59.960 | my portfolio. If the rocket does not blow up, there's a $10

00:24:03.680 | billion order book. And this company is now on a trajectory

00:24:08.720 | to be as valued as basic

00:24:10.240 | as talking his book times two. And if it doesn't, it goes to

00:24:14.240 | zero. freeberg. Go ahead and talk your book times two or

00:24:17.920 | three. Let's see if you can one up Chama. Which one of your

00:24:21.120 | investments will be the biggest business winner of 2023 free

00:24:23.520 | Burke.

00:24:23.800 | I'm not an investor. My big bet is open AI. It's just way too

00:24:27.960 | obvious to be anything else this year. As you guys know, there

00:24:30.760 | are dozens of startups that are being started right now, based

00:24:33.880 | on an open AI demonstration of Dolly and chat GPT. I think

00:24:37.880 | we're seeing this in the enterprise and consumer markets.

00:24:40.320 | I think open AI will become to some degree, maybe they could

00:24:43.840 | be as many paths they could take the AWS providing tooling and

00:24:46.960 | infrastructure to all these startups that are building

00:24:48.560 | applications for consumers and business users. Or they will end

00:24:52.960 | up doing a massive deal with Microsoft, I think it's

00:24:54.840 | inevitable, they're going to get a billion dollar plus investment

00:24:56.760 | this year, they could power, you know, AI driven Bing search and

00:25:00.320 | voice driven search. They could build their own products and

00:25:04.160 | their own tools. And they're becoming great investors, they

00:25:06.520 | invested in D script, which is a product company we use here for

00:25:09.600 | our podcast, which is an incredible product. And I think

00:25:12.720 | that Sam Altman is a very smart and shrewd investor as well. So

00:25:16.120 | for a lot of reasons, I think open AI could end up having an

00:25:19.520 | amazing year this year and a lot of different paths they could

00:25:21.600 | walk and we're going to come out of this year and say they're

00:25:23.360 | one of the top tech companies in the valley.

00:25:24.800 | Okay, sacks. Open AI has, of course, increased your ability

00:25:30.760 | to talk to other humans. So you're seeing a lot of big wins

00:25:34.160 | there. I know. Is how do I talk to a child about their college

00:25:42.600 | hopes and aspirations?

00:25:43.680 | No, no, no. How do I talk to a child about their day?

00:25:46.920 | Literally his Hello,

00:25:51.040 | Hello, progeny of mine. How are you faring today in this

00:25:55.600 | complicated?

00:25:56.560 | Write me a script of talking to a 12 year old about their hopes

00:26:00.720 | and dreams.

00:26:01.960 | Say interesting using GPT for talking points on different

00:26:05.160 | topics.

00:26:05.760 | Okay, here we go.

00:26:08.760 | On the GPT predictions.

00:26:11.160 | That would be great.

00:26:12.360 | These categories

00:26:14.720 | sacks as a person on the spectrum. Yeah, how delightful

00:26:18.840 | is this? chat GPT and you know, your treatment of your

00:26:22.880 | condition?

00:26:23.360 | That's great. Let me let me get to my answer here. So my answer

00:26:27.560 | for the big business winner of the year is America's natural

00:26:30.720 | gas industry. And I have to admit, this is an aspect of the

00:26:35.000 | Ukraine war that I didn't fully appreciate until I read this New

00:26:39.200 | York Times article the other day about how natural gas prices in

00:26:43.960 | Europe have now fallen to the level they're at before the war

00:26:47.360 | and everyone thought that there'd be this huge shortage,

00:26:49.920 | and they wouldn't be able to heat their homes. Well, what

00:26:52.320 | happened? The answer is that Europe completely cut off their

00:26:57.760 | dependence on Russian gas. And in fact, the Nord Stream

00:27:00.520 | pipelines were blown up. So physically, they separated, but

00:27:04.840 | then on top of it, they basically started importing

00:27:09.320 | liquefied natural gas from the US. And here's the key paragraph

00:27:13.160 | in this article from the New York Times is that Europe

00:27:16.720 | rapidly built terminals to receive liquefied gas, sweeping

00:27:20.080 | away many of the usual bureaucratic obstacles, and

00:27:23.120 | environmental objections. So in other words, what would normally

00:27:27.040 | would have taken decades to get approvals, now was all put on a

00:27:30.920 | fast track. And Europe is now completely dependent on American

00:27:36.600 | natural gas. And I think this is the again, the thing maybe I

00:27:40.360 | underestimated the cold hard American interest in this war is

00:27:45.000 | to basically turn Europe into a vassal of America's natural gas

00:27:50.040 | industry. Previously, they were about to be dependent on Russia

00:27:53.680 | and Nord Stream was going to make that situation permanent.

00:27:56.800 | We've, you know, somebody blew up Nord Stream. Now they're

00:27:59.360 | dependent on American LNG, they're going to pay higher

00:28:02.200 | prices for that. But it's, it's been a pretty impressive win for

00:28:07.800 | the American natural gas industry. And I think Biden has

00:28:10.520 | really pulled a 180 here. Because you remember when he

00:28:13.280 | first came into office, he canceled Keystone, he canceled

00:28:16.200 | drilling, he was very tough on the oil and gas industry. I

00:28:19.880 | think after he then delivered the hundreds of billions for the

00:28:23.320 | climate, special interest in the Inflation Reduction Act,

00:28:26.680 | now he's taking care of the oil and gas industry. I love it.

00:28:30.200 | Here we go.

00:28:30.680 | Yeah, not and so what you're saying is Biden dynamically

00:28:35.520 | changed course based on inputs like a great leader would. Okay,

00:28:38.920 | well done.

00:28:39.560 | Well, I don't I don't listen. I don't know. Well, no, listen, I

00:28:43.360 | think Biden has done something politically smart here. There's

00:28:45.880 | no question about it. I am giving him credit. Does it mean

00:28:49.480 | that this war was worth it? No, I don't. I don't think we should

00:28:51.560 | be engaging in oil wars like we did in the Middle East. So I'm

00:28:56.360 | not justifying this war. But I am saying that there is a cold

00:28:59.800 | hard American interest undergirding our position, which

00:29:03.520 | is, it's about LNG. It's not it's not just about moral

00:29:07.360 | platitudes.

00:29:08.120 | Yeah, I mean, strong start to 2023. vassal and undergirding.

00:29:12.080 | My biggest predictions I'm working backwards from to here,

00:29:16.760 | I think the door dashes, Airbnbs, Ubers, Etsy's of the

00:29:20.240 | world who need entrepreneurs, they need workers, they need

00:29:23.600 | supply, they've always been supply constrained. As

00:29:27.160 | unemployment becomes, let's call it what it is sticky, you're

00:29:30.560 | going to see a lot more people participating in gig platforms

00:29:33.040 | or entrepreneurial platforms that enable them to make money.

00:29:35.360 | So I think they will be huge beneficiaries, especially if

00:29:37.960 | they continue to lay off employees like DoorDash and

00:29:40.000 | Airbnb did to right size their businesses. But my first one, my

00:29:45.120 | number one is laid off tech workers. I think laid off tech

00:29:49.600 | workers who get together in groups of two, three or four

00:29:53.640 | developers, product managers, people who actually build stuff

00:29:56.720 | and start companies together are going to become extremely

00:30:00.680 | successful. And they're going to make incredible lemonade from

00:30:05.320 | these lemons of these big tech layoffs. So I think the startup

00:30:07.800 | space is again, and these laid off tech workers who choose to

00:30:10.480 | take control of the destiny and starts companies are going to be

00:30:12.960 | the true big winners. If you do it, do it with two or three

00:30:16.280 | friends, because you're going to need developers, you're going to

00:30:18.720 | need those those talented people in the startups that have three

00:30:21.920 | founders get funded faster than the ones with one. So those are

00:30:25.800 | my two winners. All right. Oh, yeah. And last year, our biggest

00:30:28.400 | business winners were Chamath said SMBs, Saks said rise to the

00:30:31.520 | rest, freeberg said stripe. And I said Disney Millennials and

00:30:34.200 | Gen Z. Let's go on to biggest business loser for 2023.

00:30:38.480 | Friedberg, who do you think will be the biggest business loser in

00:30:42.160 | 23 this year? In fact,

00:30:43.880 | okay, so my biggest loser is the general category of capital

00:30:47.920 | intensive series B through D growth businesses in the startup

00:30:51.560 | landscape private companies. As you guys know, there's been a

00:30:55.000 | big shift in capital allocation. A lot of the folks who were

00:30:59.640 | writing big checks into growth rounds are retreating back to

00:31:03.800 | writing smaller checks and seed and a rounds they don't want to

00:31:06.360 | write the $20 million Series B, they want to write the $5

00:31:09.120 | million seed in a round. No one wants to kind of follow the

00:31:12.440 | valuation. No one wants to set the valuation for these growth

00:31:15.040 | businesses. Particularly if after this round, you know, you

00:31:18.480 | need another big round of capital, and no one's sure if

00:31:21.000 | someone's going to be waiting on the other end. As a result, we're

00:31:23.640 | seeing tons of these businesses run into capital infusion walls,

00:31:27.360 | they can't pivot. I think we'll see what we saw in the.com

00:31:31.040 | bubble, where 99 and a half percent of these companies

00:31:33.720 | actually die, the half percent that we are going to emerge as

00:31:36.520 | the next $100 billion enterprises, the Googles and the

00:31:38.680 | Amazons of the world. So there will be light at the end of the

00:31:41.080 | tunnel for the winners. But generally, there are hundreds of

00:31:43.680 | companies in hardware, in sin bio in biotech and high growth

00:31:47.960 | enterprise software that require significant sales investment

00:31:51.400 | expense. A lot of these businesses where the capital

00:31:53.960 | intensive nature of the business just doesn't have the market for

00:31:57.680 | it right now. And investors are all retreating, and they're

00:32:01.280 | going to be selective. So that's where I think there's gonna be

00:32:03.560 | more capital intensive. By the way, seed seed and a investing

00:32:07.160 | hot as a button. B just kiss. That's what that Yeah, that's

00:32:11.120 | it. Okay, sacks biggest business loser for 2023.

00:32:15.560 | Well, I just by the way, 100% agree with what free work said,

00:32:17.920 | but my biggest loser for business in 23 is the consumer.

00:32:21.880 | I just don't understand how the consumer isn't going to finally

00:32:26.400 | tap out in this economy. I mean, they have a mountain of personal

00:32:30.160 | debt, credit card debts at all time highs. I think the average

00:32:33.600 | credit card rate hit 19.6% last week, and is expected to rise

00:32:38.360 | even further. The mortgage rates are above 7% now. So forget

00:32:43.240 | about trying to buy a new home, or sell your home and your stock

00:32:47.240 | portfolio is down to and now layoffs are starting to pile up.

00:32:49.880 | So I just don't understand how we're going to avoid a

00:32:52.280 | recession. And you saw you know, cash car he's saying that the

00:32:55.680 | Fed's gonna keep raising 5.4% his prediction. You know, I

00:33:00.360 | don't understand how if rates are at five and a half percent,

00:33:03.320 | that doesn't finally break the back of this economy. And we go

00:33:06.960 | into a recession. So you think sacks that the economy is

00:33:09.200 | actually broken right now, we just don't have the data because

00:33:12.160 | the data lag 60 days in most people's minds, because it does

00:33:15.280 | feel like the consumer is just and real estate has just broken

00:33:18.520 | at this very moment. It seems like I mean, the pain is very

00:33:20.760 | unequal, right. But in the tech industry, we've been in a

00:33:23.360 | recession for a year. I mean, like the growth stocks are down

00:33:26.200 | 80%. But freeberg said is true. No one's going to fund these,

00:33:30.160 | you know, high burning companies, there's an enormous

00:33:31.760 | amount of retooling that has to happen. Look, I think the

00:33:34.920 | recession is here. It's just very unequally distributed,

00:33:38.040 | distributed. Exactly.

00:33:39.360 | Yeah. Well, I mean, if you look at it, buy now pay later, that's

00:33:43.360 | a category starting to break credit card debt, as you're

00:33:45.640 | saying, hitting, you know, big, bad records in terms of how much

00:33:52.080 | we love spending. Also, people's savings are going down. So the

00:33:56.520 | consumers back has been broken. I think we're just going to feel

00:33:58.680 | it in the in the first and second quarter. Chamath, who's

00:34:02.000 | your biggest business loser prediction for 2023? The world

00:34:04.480 | wants to know,

00:34:05.000 | let me just build on what freeberg and sack said for a

00:34:08.000 | second before I give you my pick. Sure. I this is the

00:34:10.960 | conversation you and I had when we just got on guys, what I was

00:34:13.640 | telling J Cal is at the end of q4, I did five deals. And four

00:34:20.240 | were pro radios, one was a new deal. And they were all clean

00:34:25.040 | markups. So the four deals that other people put money into. And

00:34:30.560 | I was looking at them, and I was trying to figure out, okay, what

00:34:32.840 | differentiates these things and freebird to your point, these

00:34:35.040 | were super clean startups with very clean cap tables that had

00:34:38.600 | clear progress. And then conversely, I had seven converts

00:34:43.080 | showed to me for companies whose valuations were anywhere between

00:34:47.840 | three, and I would say 12 billion. And I did none of them.

00:34:52.280 | And not only did I do none of them, nobody else did any of

00:34:55.240 | them. And the problem was the real market clearing price was

00:34:59.840 | 80 to 90% down. And so I was like, what is going on here? So

00:35:04.960 | freebird to your point, I don't even think it's just cash

00:35:07.320 | intensive startups. I think it's like all growth companies are in

00:35:10.680 | a really bad place. I thought that this growth stuff would get

00:35:14.040 | sorted out in two to three months. And now I'm worried it's

00:35:16.200 | two to three years. I think it's toxic, toxic.

00:35:20.000 | Here's the definition of Chamath what I think has happened. And

00:35:23.440 | where I think the cutoff is, is when the value eight the

00:35:26.320 | implied market valuation of the company based on where public

00:35:28.880 | comps are trading is less than the total capital preference in

00:35:32.240 | the company, the total preferred stock. Well, there's so many

00:35:34.880 | companies now that raised 400 million at 2 billion valuation,

00:35:37.840 | but the company is actually worth 300 million now, based on

00:35:41.200 | public market comps. So they're worth less than their preference

00:35:44.080 | stack. So how do you sort of do that?

00:35:46.040 | No, that this is why I think all these converts are getting done.

00:35:50.400 | That's where the rubber meets the road on all these deals.

00:35:52.960 | Yeah, that's right. Who does the convert benefit the convert

00:35:56.480 | benefits, the VCs who want to maintain the illusory valuation

00:36:02.520 | that they had before? They do that on the block. Yeah, they do

00:36:07.040 | that to assuage the limited partner who gave the money that

00:36:10.480 | the marks aren't as bad as they thought. But the people that

00:36:14.240 | really get screwed, as Jason said, are the common

00:36:16.320 | shareholders, because eventually those converts deals that do get

00:36:20.000 | done, those people will end up owning the company, the cap

00:36:23.440 | table gets completely flushed and reset. And the employees get

00:36:27.240 | wiped out.

00:36:27.680 | Yeah. And then you got to basically take all the employees

00:36:30.600 | who were there previously, who now hate the founder, and you

00:36:33.480 | got to start over and give everybody all the other white,

00:36:36.320 | the people to do all the work at fucked and the people do none of

00:36:39.120 | the work and who just want to maintain this shell game gets to

00:36:42.680 | basically live another day.

00:36:43.920 | Basically, people are investing as you gave in the example

00:36:46.760 | earlier, like, hey, if it's a $3 billion company, but it's

00:36:49.080 | actually worth 750 people, instead of taking the valuation

00:36:52.400 | from 3 billion to 750, we'll say, okay, buy one share at the

00:36:55.240 | $3 billion price. And we'll give you three or four shares for

00:36:58.080 | free or for a penny warrants, they're called typically, or,

00:37:01.120 | you know, just different ways to structure this. And then all of

00:37:04.120 | a sudden, nobody knows the actual denominator, they may own

00:37:07.240 | them 10,000 shares, but they don't know how many shares are

00:37:09.600 | actually issued because the warrants are not on the cap

00:37:11.600 | table. They're in some side document in a folder in a lawyer

00:37:14.240 | or CFO's office.

00:37:15.240 | So let me let me tell you my biggest business loser. Yes,

00:37:17.720 | please.

00:37:19.640 | I think that the biggest potential business loser this

00:37:24.400 | year is Google search, who has measured by stunner

00:37:28.200 | profitability, and engagement. I think it's easier for me to see

00:37:34.320 | where the the usage comes from, as opposed to picking open AI or

00:37:41.240 | chat GPT in terms of where the usage goes to. And the reason is

00:37:44.960 | because I think a lot of people don't still fully understand how

00:37:49.560 | machine learning and AI work, but just 30 second primer,

00:37:52.680 | there's two big buckets of work. There's what's called learning,

00:37:56.360 | which is how you learn how to make predictions. And then

00:38:00.040 | there's what's called inference, which is when you actually type

00:38:02.160 | something into the search box, you get the answer. The thing

00:38:05.560 | with learning, and what chat GPT is showing is that they have

00:38:10.160 | learned by crawling the entirety of the web. There are five or

00:38:14.240 | six other organizations that are capable of crawling the entire

00:38:17.320 | web, in terms of cost in terms of compute in terms of the

00:38:21.200 | quality of the transformers and the quality of the AI. And so I

00:38:25.480 | find it easier to predict the decay in the quality of Google

00:38:32.000 | search as that much better than everybody else than I find it is

00:38:35.560 | to predict who will win because I think that with enough time

00:38:38.920 | and money, Oracle, Microsoft, Google, the Chinese internet

00:38:43.880 | companies can all compete Facebook. And so I think that

00:38:49.960 | you'll converge on the same training, which will lead to the

00:38:53.080 | same inference. And so I think consumers end up getting

00:38:55.240 | confused, and we'll end up being able to get high quality search

00:38:58.160 | results for many places versus today. You know, you wouldn't

00:39:02.000 | only think that Google is the only game in town, quite

00:39:04.360 | honestly, for most people. Well, I think that statistics show

00:39:07.280 | that Google could lose 10 or 15% of usage to all these other

00:39:11.200 | sites. And that may not make any of those sites that relevant,

00:39:14.800 | but it'll have a material measurable impact to Google and

00:39:18.080 | Google's fantastic prediction. And I think you know, chat,

00:39:21.080 | GPT, or these other ones are going to have a very interesting

00:39:23.760 | marketing attack that they can do on Google is why search when

00:39:28.120 | you can get an answer, right? Hey, we'll just give you the

00:39:30.240 | answer. You don't have to search. I had so many losers

00:39:33.200 | that I went through here. I'm just gonna run backwards to

00:39:35.760 | them. Number five, I thought founders refused to downsize in

00:39:38.280 | 2022 could be big losers in 2023.

00:39:40.440 | How do you have five and the rest of us are just

00:39:42.320 | I'm just gonna tell you my thought process. I just don't

00:39:44.560 | want to have a long hair. Your thought number four, I thought

00:39:47.360 | VC funds founded in 2020. Then I thought crypto because Gary

00:39:50.680 | Gensler says it's all stock. Then I went with you. Chumot

00:39:52.920 | number four, Google, my god, they got so many headwinds

00:39:55.800 | against them with his chat GPT. But I wound up on white collar

00:39:59.680 | workers with no hard skills. Twitter going down to I think,

00:40:04.640 | you know, Elon said a couple 100 people's all you need to run

00:40:07.320 | Twitter. And I think he said he has 2000 employees or something

00:40:09.360 | like that. He has shown everybody, you know, hey,

00:40:12.320 | listen, these more can be done with less, or these things are

00:40:15.720 | overstaffed in a massive way. I think white collar workers now,

00:40:19.280 | the idea that you're gonna have four offers and you're gonna be

00:40:21.520 | able to play them off each other is over.

00:40:23.520 | When we take the elites, elites,

00:40:26.880 | sure. White collar workers, aka surplus elites, people who

00:40:29.640 | actually, you know, are mid managers who don't, who don't

00:40:33.240 | actually code or don't actually build a product or sell a

00:40:35.400 | product don't actually do real work. As I think many people

00:40:39.640 | would frame it in the managerial class or the CEO class, man,

00:40:43.560 | they're gonna have a hard time. And this week, Andy, Amazon,

00:40:47.920 | Andy cut 18,000 white collar workers, not the blue collar,

00:40:50.640 | the white collar workers in Amazon, that was a big turning

00:40:53.720 | point. And Benny off. You know, he's Ohana, he is Mahalo, he is

00:40:58.160 | Aloha, he does not like to lay people off. He considers

00:41:01.080 | Salesforce or family, he laid off 8000.

00:41:03.680 | I predicted that.

00:41:05.000 | Yeah. And I mean, that

00:41:06.640 | tweet about that. Well, I mean, the reason is pretty simple,

00:41:09.400 | right? Their gross slowed down by two thirds of the most recent

00:41:12.000 | quarter, but they're still spending the same amount of

00:41:14.000 | sales and marketing. So when that happens, your cap payback

00:41:17.440 | explodes, right? You go from three years payback to like 10

00:41:21.120 | years. So they have to cut costs in order to rationalize your

00:41:24.200 | unique economics. So and now it cascades, right? Because all of

00:41:28.680 | Salesforce's vendors are gonna be getting less money from

00:41:32.320 | Salesforce, because they're tightening their belts. So then

00:41:35.600 | those companies are gonna have to cut and the cycle just keeps

00:41:38.080 | going and going.

00:41:38.880 | Right. And everybody tightens their belts at the same time,

00:41:42.640 | freezes the economy, aka recession, and possibly worse.

00:41:46.840 | So that mine was a surplus elite. So that's a nice little

00:41:49.160 | quartet. In 2022. Just so you know, I picked crypto freeberg

00:41:53.840 | also pick crypto, which must have used a MasterCard and SAC

00:41:56.200 | said, assets classes that benefit from government dumps,

00:42:01.360 | and publicity. Yeah. All right, let's go to biggest business

00:42:04.800 | deal of 2023. It's a prediction. What do we think could be the

00:42:07.080 | biggest business deal? Easy, easy. This one. Okay, come on.

00:42:09.800 | Go. Let's go. Right here. Okay, come off quickly. Starlink will

00:42:12.840 | go public. Oh, SpaceX will cut and paste the cap table. And we

00:42:17.520 | will take yum, yum, it'll be yummy and delicious. And my

00:42:21.640 | prediction is that the Starlink valuation will be at least half

00:42:25.520 | of SpaceX is current private Marth 75 Billy, just five

00:42:29.640 | billion, it will be phenomenal. And I think the reason why is

00:42:33.680 | that I think in order for Elon to have complete financial

00:42:37.920 | flexibility and do what he needs to do, and, you know, he talked

00:42:40.760 | about this on our pod about the difficulties and the dangers of

00:42:43.520 | margin loans and all of that stuff. Yes, he's gonna create

00:42:46.920 | breathing room for himself. Ah, this is the simplest and most

00:42:50.320 | obvious way for him to do it. It'll give him a ton of more dry

00:42:53.640 | powder. Sure. So I think that this is an obvious outcome in

00:42:59.200 | 2020. They already have a million subscribers in there

00:43:01.520 | better than nothing beta as they call it. I have two of them. I

00:43:04.240 | think this is a great, great. I was I was the first one to get

00:43:09.280 | it for for the global 7500. So okay, I got it for Yeah, yeah,

00:43:15.960 | similar. So there's my plate in your house in the same size.

00:43:20.000 | Exactly. So there you go. There is a point people are

00:43:23.800 | underestimating the TAM I think of this product. The TAM is not

00:43:27.720 | existing broadband connections. It's second connections. It's

00:43:30.520 | connections where connections didn't exist. Just so you know,

00:43:33.840 | buses, the best in class, the best in class broadband

00:43:37.240 | connection for a plane is called k a band. And it costs 500 grand

00:43:42.360 | a year. That's ridiculous. And you can replace it for, you

00:43:46.520 | know, a 10th of a cost and Starlink on a plane is

00:43:50.280 | dramatically better by directionally. So I think

00:43:54.760 | Starlink is going to go public and I think it's going to be

00:43:56.600 | here. It's going to be the best chance that we have of opening

00:43:59.320 | up the capital markets in 2023.

00:44:01.200 | There's another way of saying people who own private jets if

00:44:03.800 | they are flying 250 hours a year, which will probably be a

00:44:07.640 | reasonable number to 300 hours a year, they're paying $2,000 an

00:44:11.720 | hour for their internet service. That is bonkers. Okay, sax. Who

00:44:15.920 | is your big deal? biggest business deal prediction

00:44:18.760 | deals 23 prediction is there will be a deal between Putin and

00:44:25.520 | G. And they met by satellite late last week to discuss ways

00:44:31.000 | to further help each other in 2023. Putin characterized it as

00:44:35.400 | a no limits partnership. You may remember that the two of them

00:44:39.520 | inked a $175 billion gas deal in early February last year, that

00:44:44.880 | was three weeks before Putin invaded Ukraine. I think now

00:44:48.440 | Russia is even more dependent on China. We've really driven

00:44:52.240 | Russia into China's arms. And I think there will be a big deal

00:44:56.840 | not just on energy, but on agricultural products, mineral

00:45:00.560 | products, and rare earth minerals that, you know,

00:45:04.840 | Chamath likes to talk about, I think there could be a trillion

00:45:08.040 | dollar deal between Russia and China this year, if I was gonna

00:45:11.800 | go out and live and make prediction.

00:45:12.960 | Okay, so there is your 2023 prediction of the biggest deal

00:45:16.440 | the Legion of dictators is forming. I do think it's it is

00:45:20.840 | like, you know, that the axis of evil, this is more Legion of

00:45:23.600 | dictators, like, hey, let's do business together. Freeberg, you

00:45:27.760 | got a prediction for the biggest business deal of 2023. This is

00:45:29.840 | really going out on a limb here.

00:45:30.840 | I'll do two real quick. The first was the similar to what

00:45:34.280 | Zack said, but it's kind of echoing what I said earlier,

00:45:40.040 | which is the petro yuan trade. I think that's the Saudi China

00:45:43.960 | trade. If this happens, and oil is sold in yuan, it marks the

00:45:49.800 | beginning of I think, the end of the assumption that the US

00:45:56.720 | dollar is the global reserve and the risk free currency in

00:46:01.560 | reserve for the world. So I think the petro yuan trade, if

00:46:05.040 | you guys, here's the Reuters article covering G's visit to

00:46:09.640 | Saudi Arabia last month, first, second week of December. Once

00:46:13.520 | this gets inked, and signed, it's a real shift globally. I

00:46:17.720 | think the other one that I'm that I'm going to point out that

00:46:19.520 | I think is a bit of a out of left field one, maybe. And maybe

00:46:25.040 | I'm just gonna look like a total idiot at the end of the year.

00:46:26.920 | But do a wildcard. I like it. This is my wildcard. So my

00:46:29.000 | wildcard is I think Apple ends up buying something completely

00:46:32.560 | out of the ordinary. And here's why I think Apple's core

00:46:35.680 | business, they're facing significant pressure with

00:46:37.800 | respect to their relationship and ties to China. As you guys

00:46:41.440 | may have seen last week, Foxconn announced that they're actually

00:46:43.960 | going further downstream in terms of their production model.

00:46:47.480 | And they're trying to diversify away from being kind of the sole

00:46:49.920 | service provider to Apple. Apple, as you know, is under

00:46:53.000 | such pressure to get out of China, politically that they

00:46:56.800 | started to try and invigorate activity in Vietnam and

00:46:59.680 | elsewhere. So a lot of pressure on their relationship with their

00:47:03.840 | low cost producer and low cost production partner. They're also

00:47:08.960 | under a lot of political pressure because of the App Store

00:47:11.120 | revenues. You guys know this 30% App Store that they take, a lot

00:47:14.840 | of people are calling it monopolistic and antitrust is

00:47:16.920 | getting involved. So they're feeling that pressure. There's

00:47:19.040 | also the pressure with respect to the you know, waning consumer

00:47:23.800 | demand for high end electronics Samsung last yesterday or last

00:47:26.800 | week, or yesterday, I think announced significant declines

00:47:30.120 | in consumer demand for electronics, or their forecast as

00:47:33.240 | such, that has to impact Apple as well. So when you put all of

00:47:36.920 | this together, right, they're, they're, they're being pressured

00:47:39.320 | to get out of their low cost manufacturing center, they're

00:47:41.440 | being pressured to stop making money on the App Store, they're

00:47:43.960 | being pressured, because the demand may be waning, they have

00:47:47.400 | to do something big to kind of diversify the business. So I

00:47:49.880 | think they might end up doing something like buying a real

00:47:51.840 | content company, maybe they do something like buy a Disney,

00:47:55.000 | maybe they do something like buy an automotive company like Fiat

00:47:58.760 | Chrysler. I think there are a number of these kind of like

00:48:01.560 | what may seem today outrageous deals that Apple might end up

00:48:05.320 | kind of being pressured into doing so that they can get ahead

00:48:07.960 | of their forecast of the impact that all these pressures are

00:48:10.720 | going to have on their core business. And so I think this is

00:48:12.960 | something interesting to kind of think may happen this year. I

00:48:15.880 | certainly have no insight or Intel on anything or I could be

00:48:19.280 | completely wrong on this one. But it feels like they've got to

00:48:21.480 | do something this year. I'm going to keep that business

00:48:23.880 | growing. This is I think I love your wildcard because the MBS

00:48:27.400 | China trade and that relationship sure. Legion of

00:48:31.440 | dictators, but this one is really good. It's hard to buy

00:48:34.320 | Disney monopolistic issues, but buying a car company pretty easy

00:48:38.360 | because that's a fragmented market. I love this prediction.

00:48:42.560 | I mean, now with Tesla with this depressed stock price, Apple

00:48:45.080 | can make a run at Tesla, they have they could almost buy it

00:48:46.960 | with cash. Let alone BMW, Volvo, one of those brands they could

00:48:50.760 | buy easily. What a great prediction for me. The

00:48:54.800 | prediction is Amazon's three legged stool grows into a sturdy

00:48:58.680 | chair chair with a fourth pillar. For those folks who are

00:49:02.020 | not familiar with how Amazon has built their businesses. There

00:49:05.360 | are three pillars in their stool. ecommerce, obviously,

00:49:09.840 | when you buy stuff, prime memberships, which is kind of

00:49:12.200 | consider a separate revenue stream. And of course, AWS

00:49:15.680 | cloud computing, I think the fourth is going to be this

00:49:18.340 | continuation of following the health stream, not advertising,

00:49:21.760 | because that's not a consumer based product. That's just the

00:49:23.560 | way they make money. Health is going to be a big one for them.

00:49:26.440 | They obviously acquired one medical which was a small

00:49:29.000 | purchase. I think they're going to buy Roman hymns, they're

00:49:32.200 | going to buy Peloton, they could buy a whoop, and they're going

00:49:35.840 | to go all in on health. And you know that three legged stool

00:49:39.200 | becomes a very sturdy chair. And my runner up is Tick Tock is

00:49:43.480 | going to divest under duress. I think that it's going to have to

00:49:47.400 | go public and the Chinese are going to divest their interest

00:49:50.240 | in it and just take their chips because they're going to be

00:49:53.320 | faced with the existential threat during the political

00:49:55.740 | debates of the next two years, there will be unanimous support

00:49:59.600 | from Democrats and Republicans to get Tick Tock out of the US.

00:50:02.760 | Therefore they divest.

00:50:03.880 | Can I just test that with you guys because we've talked about

00:50:06.920 | this a lot that hey, we're gonna ban Tick Tock. How many of your

00:50:11.400 | friends kids or your kids do you guys know spend hours a week on

00:50:16.520 | Tick Tock 100% lot 90% How do you get over the political

00:50:21.320 | mountain of trying to ban Tick Tock? If you try and ban Tick

00:50:25.480 | Tock, whoever raises their hand and says we should ban Tick Tock

00:50:27.720 | and actually gets it done. They're out of office. There is

00:50:30.560 | going to be so much pressure and backlash because people are

00:50:32.680 | hooked and love that app and use it all the time to take that

00:50:35.360 | away from people will feel like this kind of young kids that

00:50:39.240 | don't have phones actually get everything that Tick Tock has on

00:50:43.000 | YouTube shorts. So I don't think Tick Tock is that important

00:50:46.040 | because it is not actually there is no sticky network effect

00:50:49.800 | inside that app. So there isn't usage that's dependent on people

00:50:53.400 | you know, or a graph that you build. It's a lot of passively

00:50:56.760 | consumed content. And so you know, you're you're getting

00:50:59.000 | pushed a lot of algebra algorithmically defined content,

00:51:02.320 | you can do that on YouTube. And so I actually don't think it's

00:51:04.800 | that meaningfully important. If Tick Tock goes away, I think the

00:51:08.080 | content creators stay. It's harder for them to build a

00:51:12.000 | business on YouTube shorts. But if you look at the men measure

00:51:16.960 | the density of content inside Tick Tock, it exists almost one

00:51:20.560 | to one on YouTube.

00:51:21.320 | That's interesting. It's an interesting thing. You think

00:51:24.800 | it'll you think it'll be okay if we if we cancel Tick Tock in the

00:51:27.520 | US and we say that's it you can't have to talk to YouTube

00:51:30.120 | and it's disruptive, but people will just go to YouTube and

00:51:32.880 | Instagram. It's not that big of a deal.

00:51:34.480 | In fact, a lot of the my favorites,

00:51:37.360 | if there was a network effect inside there, then I think

00:51:40.120 | people would have a reason to complain to somebody, whether

00:51:42.880 | it's your representative, or whether it's somebody else to

00:51:46.040 | say, Hey, don't do this, this would have a deleterious impact

00:51:49.200 | on my quality of life or my quality of experience. And you

00:51:52.320 | could make that clear claim on Instagram, Facebook, you know,

00:51:56.040 | Google, YouTube. But Tick Tock is is much more brittle that

00:52:01.120 | way. And that's why they need to get public sooner and

00:52:03.960 | monetize this bloody thing. Because I think that it's very

00:52:08.440 | easy actually, to deconstruct Tick Tock's value into these

00:52:13.000 | other places.

00:52:13.920 | I can tell you my favorite Tick Tock is chefs reactions. And I

00:52:17.280 | consume him now on Instagram because he posts, we just copies

00:52:20.520 | one to the other. And

00:52:21.480 | so chefs reactions is a great example where he actually got

00:52:24.640 | banned by Tick Tock and then diversified on his own. And now

00:52:27.840 | what he does is he publishes across multiple streams. And if

00:52:30.720 | you look at all the big creators, they all do that

00:52:33.760 | because it makes no sense to actually give the power to any

00:52:36.600 | one of these things.

00:52:37.280 | Why have a dependency?

00:52:38.200 | Why have a dependency?

00:52:39.360 | All right, let's keep the trains moving. Most contrarian belief.

00:52:43.480 | This is the Peter Thiel award, your chess partner, sex, who's

00:52:48.120 | winning in 2022 in chess, how many chess games do you have

00:52:50.800 | going with Peter Thiel right now? And who's higher rated you

00:52:53.120 | demolished me with your Queens gambit. I played one game I got

00:52:56.200 | killed in seven moves. I'm ranked at 800 900 right now.

00:53:00.320 | sax is at 1800. He just walloped me. Who's higher rated?

00:53:03.680 | You accepted the Queen's gambit? Well, you know, I just I didn't

00:53:07.200 | even know what it was. I was like, what opening is this?

00:53:09.080 | You're like, Queens gambit, you're dead. Boom.

00:53:12.360 | You don't want to accept the Queen's gambit. Very pleasant

00:53:17.600 | game for white. I'm going to go on a limb here, you know, and

00:53:20.720 | risk being wrong. My my prediction or most contrarian

00:53:24.720 | belief is that the bromance between Biden and Zelinsky comes

00:53:28.920 | to an end at some point in 2023. And let me state that the part

00:53:34.360 | that I think is conventional wisdom and everyone agrees with

00:53:37.880 | which is there's going to be a massive Ukrainian counter

00:53:40.680 | offensive in the spring. And I think that could go one of two

00:53:43.360 | ways. Either it could make limited gains, basically, the

00:53:46.560 | Russians fight them to a stalemate, or it could be

00:53:49.640 | successful. And they could basically push the Russians back

00:53:53.200 | to the February 23rd lines and then make it play for Crimea. I

00:53:56.400 | predict that in either one of those circumstances, Zelinsky

00:53:59.760 | his interests, and Biden's interest will start to diverge.

00:54:02.640 | So in the case of a stalemate, which I think is probably 5050

00:54:07.440 | here, Biden's got to start going into election mode for 2024. And

00:54:12.480 | I think we're saying that we're going to be in a recession. So I

00:54:14.880 | think that if there's a stalemate, I think Biden's going

00:54:17.560 | to tell Zelinsky wrap this thing up, it's time to negotiate, we

00:54:21.360 | need to get this over with. By the same token, if the

00:54:24.200 | counteroffensive successful, I think that the administration

00:54:27.360 | hopefully cooler heads will prevail and not let them take

00:54:30.240 | Crimea, that's basically what they're gunning for, is they not

00:54:33.360 | only want to get back to the February 23rd lines, they want

00:54:35.920 | to go all the way back to the 2014 lines of retaking Crimea. I

00:54:40.400 | think that's extremely dangerous. I think that could

00:54:42.560 | precipitate a nuclear war. And I think that the cooler heads the

00:54:46.480 | administration will tell Zelinsky to stand down. And

00:54:49.160 | that's the right time to make a deal. So I think in either one

00:54:52.000 | of these scenarios, I think you will start to see a divergence

00:54:54.840 | between the Ukrainian and the American interest and that could

00:54:57.320 | create a rift. And I think no one's really predicting that.

00:55:01.600 | I think this is great. This is kind of what I thought the plan

00:55:04.640 | all along was, which was to deplete Putin of resources,

00:55:07.920 | distract him and then get the West off of his oil and, and try

00:55:12.600 | to do regime change, but do it by bleeding him. This would be

00:55:16.200 | proof positive of that strategy, which is bleed him to the end,

00:55:19.560 | and then sell Zelinsky out. I think that's actually, I know

00:55:23.200 | that I know it's cynical. But I think that's what we're doing. I

00:55:25.960 | think Ukraine is a tool to deplete Putin and then maybe get

00:55:29.080 | to regime change. I'm cynical as it gets with this Chamath, which

00:55:32.600 | are most contrarian belief of 2023.

00:55:34.680 | I will go and pick that inflation, which people expect

00:55:42.200 | to fall off a cliff doesn't fall off a cliff as fast or as

00:55:47.120 | meaningfully as people want. And so I will explain inflation as

00:55:52.120 | three different chapters. And we've seen the first two

00:55:56.360 | chapters play out. So 2021, chapter one was all about energy

00:56:00.480 | inflation. And you know, we all talked about having almost $10

00:56:04.560 | gas at the pump, and what does it mean for everybody and it

00:56:09.240 | caused that initial spike in inflation. And then we had it

00:56:14.760 | come off and sacks called this he said, you know, we're going

00:56:17.400 | to have this sort of double hump. And 2022 was really the

00:56:21.120 | story of goods inflation, right? All these prices and all of

00:56:24.600 | these things went up because the input costs went up, and we all

00:56:29.080 | had to bear the implications of that. But then that started to

00:56:32.360 | ebb. Now, if you look at the tail end of 2022, what I found

00:56:37.920 | super interesting was the number of articles I saw about wage

00:56:42.800 | inflation, whether that was Biden using an 1800s era law to

00:56:49.000 | prevent a railroad strike, the number of states that increased

00:56:53.240 | minimum wage, the trend around unionization. So in general, my

00:56:58.440 | thought is that the pendulum is swinging very markedly away from

00:57:04.600 | capital and towards labor. And as the labor participation rate

00:57:08.320 | stays low and continues to go down. And also it's compounded

00:57:12.720 | by an unemployment rate that may go up, right people are, it's

00:57:16.240 | going to be harder and harder to get people to do the work you

00:57:19.480 | need at the company you have, unless you pay them more. And if

00:57:24.680 | that gets exaggerated, then inflation will stay where it is,

00:57:29.000 | it won't be as muted, and it won't fall off a cliff as people

00:57:31.760 | want. It'll be persistent. That's my big contrarian got it

00:57:36.600 | wager for this year is that we that is quite a shame. We see

00:57:40.440 | wage inflation that keeps inflation not going down as much

00:57:43.800 | as people want.

00:57:44.320 | This is contrarian because everybody's saying, hey, it's

00:57:47.200 | over, the consumers back has been broken, the credit card

00:57:50.080 | debt is high. And everybody's being laid off, yada, yada,

00:57:53.680 | yada, therefore, goods and services, there'll be more

00:57:56.960 | supply than demand, and the prices will lower. Very

00:57:59.880 | contrarian free break. You have a contrarian belief for 2023.

00:58:02.640 | I think my it follows my earlier points about the Saudi

00:58:10.680 | China, Russian, Russia trade this year exiting 2023. It may

00:58:17.560 | be the case that, you know, there's historically been this

00:58:20.920 | belief and this continuing belief that the US dollar will

00:58:23.400 | always be the de facto global reserve currency. And the

00:58:26.880 | current mantra is that it's better than the rest. Everyone

00:58:29.160 | else is worse off than the US Western Europe is in trouble.

00:58:31.440 | Japan is in trouble. China is in trouble. Everyone's in trouble.

00:58:34.440 | But if there is a coalition, an economic coalition, a scale

00:58:39.840 | economic coalition, that starts to shift the balance of power a

00:58:44.400 | little bit, and the US meanwhile, is taking on

00:58:46.800 | extraordinary debt load, spending $1.7 trillion in an

00:58:51.240 | omnibus bill, you know, has this massive unfunded Social

00:58:55.240 | Security problem coming down the pipe, and are trying to manage

00:58:58.440 | multiple funded conflicts around the world. It could be that the

00:59:02.600 | US dollar coming out of 2023 starts to trade more like a risk

00:59:06.160 | asset, and less like a risk free asset. And so I think that

00:59:09.640 | that's my big contrarian bet is that maybe this year marks the

00:59:12.800 | beginning of the end of the US dollar as the kind of global de

00:59:16.640 | facto reserve currency. Based on some of these big trades that I

00:59:22.040 | talked about happening. So that would be my, my big kind of

00:59:26.080 | contrarian

00:59:26.640 | perfectly said, that's your contrarian bet the accent, the

00:59:30.280 | Legion of dictators, the MBS is etc. They become they form a

00:59:34.800 | global currency. Yeah. My term, not yours.

00:59:37.360 | I'm not calling it. Yeah, I wouldn't say Legion of

00:59:39.600 | dictators. And I wouldn't say forming a global currency. But I

00:59:41.880 | do think that the fact that that large economic trading models

00:59:49.080 | start to be done in non dollar denominated form, got, you know,

00:59:52.640 | we can the kind of reserve status of the dollar to some

00:59:55.520 | degree, not fully right, it doesn't happen in a binary way.

00:59:58.120 | And then the dollar starts to trade more like a risk asset

01:00:00.640 | like other currencies do to some degree, not fully. So maybe

01:00:04.440 | once again, we start to see that shift.

01:00:06.720 | Once again, I take the exact opposite of your contrarian

01:00:09.120 | belief. I believe American exceptionalism continues to

01:00:12.600 | soar, as Russia, China, Saudi Arabia, to a lesser extent,

01:00:16.520 | continue to self sabotage themselves with insane wars like

01:00:20.200 | Putin has done, or cutting off the heads of entrepreneurs in

01:00:24.920 | China figuratively, I'm saying here, I think you cannot have

01:00:29.160 | exceptionalism without entrepreneurs without people

01:00:32.320 | having freedom. And I think that means American exceptionalism

01:00:35.880 | based on freedom is going to continue and the legion of

01:00:40.360 | dictators, I believe, are going to stab each other in the back

01:00:43.480 | before they change the world or move the currency. Can't trust

01:00:47.320 | them, though they'll snip at each other. And or they'll self

01:00:49.840 | sabotage.

01:00:50.280 | Exactly. What do you fall on our opposite? Yeah,

01:00:53.440 | I think that America is really feeling its Wheaties right now.

01:00:56.440 | I think that American power is immense. I think that the

01:01:00.080 | superiority of our weapons in Ukraine has been one of the big

01:01:03.360 | surprises of the war.

01:01:04.680 | Let's go Palmer lucky. I don't see the world in the simplistic

01:01:08.400 | good guys versus bad guys frame that Jake out does. However,

01:01:11.640 | America is on turbo right now. And yes, it is true that the

01:01:16.200 | bricks would love to get off of the dollar, because we are now

01:01:20.720 | using the dollar and the financial system and swift as a

01:01:24.280 | as a geopolitical tool and a weapon. And they would very much

01:01:27.720 | like to be off of our dependence on our currency. But I don't

01:01:31.280 | think they're anywhere close to be able to do that yet. And

01:01:34.720 | like I said, America is on turbo right now. Now, one thing one

01:01:38.480 | thing I want to mention this just came out White House

01:01:41.040 | correspondent named Jennifer Jacobs just reported that the US

01:01:44.760 | has agreed to send Bradley armored vehicles basically our

01:01:48.800 | best tanks to Ukraine. Previously, US officials had

01:01:52.680 | balked at sending armored vehicles saying heavier weapons

01:01:54.840 | be too difficult for Ukraine to operate and maintain bad allies

01:01:58.280 | are moving to provide such weapons. So we keep providing

01:02:01.920 | the Ukrainians with more and more sophisticated weapons, more

01:02:05.440 | and more support. Like I said, this is leading up to a huge

01:02:08.360 | Ukrainian counter offensive in the spring. And I really don't

01:02:11.720 | know what's going to happen at that point. I do think that the

01:02:13.840 | Russians will escalate. I don't think they can afford to lose

01:02:16.840 | this war. They view it as existential. And I like I said,

01:02:21.040 | I hope cooler heads will prevail. And if the Ukrainians

01:02:23.800 | are successful at breaking through, I hope that the Biden

01:02:27.160 | administration will shut this down before they try to retake

01:02:29.280 | Crimea. Because, you know, we've discussed this before, I

01:02:32.800 | think the Russians confronted with a choice between a total

01:02:37.280 | defeat that includes losing Crimea and their naval base of

01:02:41.000 | Estopel and sees the Ukrainian flag flying over their base at

01:02:45.280 | seven Estopel if that's a choice between that, or potentially

01:02:48.600 | using a tactical nuke, maybe at the mouth of the Crimean

01:02:52.720 | Peninsula as a firewall, I think they could choose the nuke

01:02:55.760 | option. So it's a very dangerous situation. And, you

01:03:01.520 | know, very, very dynamic. There's a lot of possibilities.

01:03:03.520 | All right, let's go on to best performing asset of 2023. I'm

01:03:06.680 | going with C stage investing again. I don't think people want

01:03:10.560 | to get into these toxic cap tables at the late stage as

01:03:12.600 | Chamath pointed out. So I go with C stage, you know, and up

01:03:15.640 | to series A, the people brave enough to place bets, the

01:03:17.840 | founders brave enough to start companies, I believe it's the

01:03:20.040 | best performing asset class of 2023. Chamath, who do you got?

01:03:22.240 | I think that there's still a lot of uncertainty in the world

01:03:25.720 | and in the markets. And so I'm generally concerned that there's

01:03:30.040 | a lot of chop. And so I pick something that's pretty

01:03:34.080 | conservative. But I would have a combination of cash and the

01:03:41.160 | front end of the yield curve. So T bills all the way up to two

01:03:44.880 | year bonds. So you can generate four and a half probably by the

01:03:48.280 | end of this year 5% pretty safely. owning this stuff while

01:03:53.280 | you wait for things to become more certain. And the way that I

01:03:58.400 | think about it is that I would rather miss the first 10 or 15%

01:04:03.280 | of a rally. Once we're really done this stuff, then try to

01:04:08.840 | overcorrect and try to pick a bottom just because I think that

01:04:12.600 | you could lose a lot of money. So I think the goal for this

01:04:17.400 | year is to stay resilient and in the game. And so owning having a

01:04:22.560 | bunch of cash on the sidelines ready to pound it in. Meanwhile,

01:04:25.840 | a portion of it collecting 5% is not such a bad thing while you

01:04:28.720 | wait for the bottom.

01:04:29.400 | Fantastic. My answer was actually very, very similar,

01:04:32.680 | which is if cash carries right, that rates are going to 5.4% in

01:04:36.320 | q1. Why wouldn't you just put all your money in short term T

01:04:39.720 | bills, you earn five, five and a half percent risk free? Yeah,

01:04:43.400 | like set it and forget it. Yeah. And that's why capital flows are

01:04:47.200 | moving hugely right now from equities into bonds. Especially

01:04:52.400 | if we're going to recession, which is inherently

01:04:54.120 | deflationary.

01:04:54.920 | What do you got for Berg?

01:04:56.720 | forming asset class of 2023.

01:04:59.680 | One of the things so I think it's inevitable that we continue

01:05:04.880 | to have significant infrastructure spending from

01:05:08.480 | both the stimulus and security point of view. So you know, we

01:05:11.360 | kind of want to continue to stimulate the economy and

01:05:13.560 | support growth, we want to continue to create jobs and

01:05:16.000 | support this transition and the risk if the if the recession

01:05:19.360 | predictions play out true in the job market does loosen, it's

01:05:22.560 | very tight right now. There's going to be even more of an

01:05:25.240 | impetus to continue to do infrastructure investment. But I

01:05:27.920 | think there's also these big economic transitions happening

01:05:30.440 | underway right now with pharmaceuticals, with

01:05:34.680 | semiconductors, with energy, there's a lot that we've talked

01:05:38.800 | about where there's a security problem, and a redundancy

01:05:42.160 | problem. And so you know, there are a couple of ways to kind of

01:05:45.600 | play this infrastructure spending thesis in each of those

01:05:48.880 | areas. I've kind of highlighted four of them. One is in

01:05:52.360 | semiconductor capital equipment. So K like 10 core applied

01:05:54.800 | materials that that range of businesses that provide and sell

01:05:57.960 | the equipment into the fabs and the and the organizations that

01:06:03.720 | build semiconductor manufacturing facilities. The

01:06:08.880 | second is kind of an oil and gas services. So similar to what

01:06:11.200 | sex said earlier, Schlumberger Baker Hughes, that class of

01:06:14.280 | businesses, I think benefit in this in this environment, and

01:06:17.760 | this is independent of kind of economic condition, certainly,

01:06:20.680 | because these are big multi year spending projects. The third is

01:06:24.280 | in the equipment to support them. So deer and caterpillar.

01:06:26.760 | And then the fourth, I think is an important one. I'll talk

01:06:29.200 | about this in a minute with respect to my biggest kind of

01:06:32.200 | anticipated thing for next year, which is in a pharmaceutical

01:06:35.480 | infrastructure. So thermo Fisher, and there's some company

01:06:38.080 | and others like them, because there's a lot of build out

01:06:40.560 | happening to support these big transitions happening in the

01:06:42.920 | modalities that are being used in pharmaceutical drugs and

01:06:45.680 | diagnostics.

01:06:46.200 | And then I think that there's also a couple of these

01:06:48.960 | businesses that are diversified, like Danaher Honeywell,

01:06:51.520 | thermo fish is a good example that play across multiple of

01:06:54.480 | these, these opportunities. So those are those are all great

01:06:57.680 | businesses to own, and you don't need to worry about, you know,

01:07:00.160 | they're growing cash flow, positive dividend paying

01:07:02.440 | companies, and you don't need to worry about, you know, am I

01:07:05.720 | getting 5% or five and a half percent based on the equity

01:07:08.280 | price this year, these are long range businesses that are

01:07:10.840 | building real value, growing their top line, and compounding

01:07:14.960 | value from within. And then they're acquiring a lot of

01:07:17.200 | smaller businesses very cheap. I'll say what that's an

01:07:18.960 | important trend I've seen across these companies, Danaher

01:07:21.600 | Honeywell, thermo Fisher, they buy small companies, they pay

01:07:25.000 | very little, and they immediately get massive return

01:07:28.120 | on invested capital, like they're in the high teens. So

01:07:30.920 | why get 5% on T bills, when you can get high teens ROIC on the

01:07:35.640 | management teams running these incredible platforms. So that's

01:07:38.320 | where I'm most excited for this year.

01:07:40.040 | Okay, now let's move on.

01:07:42.800 | That was like a mad that was like my my mad my mad money

01:07:45.400 | segment. I've never done the mad money segment before. But

01:07:47.680 | there you guys got

01:07:48.440 | worst performing asset. I went with energy because not that I

01:07:52.120 | think it's not important, but it just feels like everybody

01:07:54.080 | rushed into it in 2022. So it feels like it's overheated. And

01:07:57.360 | if we are in a recession, people might lower consumption in

01:08:00.600 | terms of energy and be looking for cheaper alternatives. So it

01:08:04.160 | could be overheated. So I went with energy. Chamath worst

01:08:07.160 | performing asset, you got one.

01:08:09.960 | I think that if we've learned anything from the last three

01:08:12.800 | years, you have to separate the valuation of a company and how

01:08:18.280 | it performs in the stock market with its value in society. So

01:08:21.560 | for example, if you look at zoom, zoom's valuation has

01:08:25.240 | cratered, but its value in society has probably continued

01:08:27.640 | to go up, it's still a massively relied upon tool. The point is

01:08:31.480 | that markets do not give you credit for the value in society,

01:08:35.120 | they will give you credit when you are about to over earn, but

01:08:39.480 | then they'll pull it all back when they think that you're

01:08:42.080 | going to under earn. So in that lens, I think that tech will

01:08:46.120 | have a tough year. I think energy will have a really shit

01:08:50.280 | year. And probably the biggest asset class that is going to get

01:08:55.680 | pressured is going to be junk debt. And the reason is a bunch

01:08:59.760 | of these variable rate loans, when rates are at five and 6%,

01:09:04.160 | that all of a sudden are like 11 1213 14% of the money that

01:09:09.240 | they're in. And if they're at 18% coupons, a bunch of companies

01:09:14.560 | will have trouble meeting their debt obligations, and we'll have

01:09:18.320 | to restructure the debt or we'll have to file so tech energy

01:09:21.720 | performing asset for 2023.

01:09:23.440 | subcategory of what you must have said I think office towers

01:09:27.240 | in San Francisco are that is some serious toxic debt 27%

01:09:31.320 | vacancy rates and growing as Lisa's role. I think that a lot

01:09:37.080 | of virtually all of the San Francisco downtown is going to

01:09:39.560 | be owned by the bank soon. Because no one can real estate

01:09:42.800 | in San Francisco,

01:09:43.600 | specifically the office towers, because no one wants to be in

01:09:46.840 | those those skyscraper buildings south of market, you

01:09:50.240 | know, mired in homelessness. So yeah, I mean, I think that a lot

01:09:54.360 | of those buildings can be owned by the banks, there's gonna be

01:09:55.880 | some major fire sales. Remember, this was the hottest commercial

01:09:59.640 | real estate market in the country a few years ago. And now

01:10:03.400 | it's the worst.

01:10:04.280 | Well, look, what happened to look what happened to be read?

01:10:06.680 | What do you think about that crazy thing that happened with

01:10:08.920 | the Blackstone read? I mean, that's nuts. You know, what

01:10:12.040 | happened? Yeah, Blackstone has a product called be read. It's

01:10:14.480 | like a $70 billion exchange traded fund effectively. And

01:10:19.280 | what it is, is the ability for individual investors don't

01:10:22.440 | access to Blackstone's, you know, commercial real estate

01:10:24.960 | portfolio. And they had such a massive amount of redemptions

01:10:29.280 | that they had to close redemptions at the end of q4.

01:10:31.480 | And they were worried that the redemptions were going to

01:10:34.440 | continue to go up. These are individual investors who

01:10:37.240 | basically sees the writing on the wall, as David said, and

01:10:40.040 | wants their money out. And so they went to the University of

01:10:43.240 | California pension system. And they essentially got a huge

01:10:47.880 | infusion of capital, I think it was about $4 billion, where they

01:10:51.640 | guaranteed 11 and a half percent interest to these guys for the

01:10:55.280 | $4 billion. And they also posted a billion dollars of their own

01:10:59.240 | equity in in the actual REIT to backstop it. So what does it

01:11:04.720 | show you, I think what Saks is saying is really right, it's it

01:11:07.520 | may not just be in San Francisco. But, you know, with

01:11:10.200 | all of these people either getting laid off with all of

01:11:12.600 | these people now working remotely, we may finally start

01:11:16.480 | to see the beginning of the reckoning in commercial real

01:11:19.080 | estate, which has been an unbelievably performant asset

01:11:21.760 | class up until right about now. And on top of that, you have to

01:11:25.300 | factor in these much higher rates. And so these building

01:11:27.480 | owners, if they financed it, which they invariably have

01:11:30.200 | always financed, they have huge variable rate payments that are

01:11:34.440 | due on these buildings, the rent rolls are lower, even people

01:11:37.840 | like Twitter is just refusing to pay the rent. So you have to

01:11:40.680 | take them to court. So it elongates when they have to pay.

01:11:43.600 | And so you could miss a bunch of rent payments. And all of a

01:11:47.840 | sudden, the banks could just go crazy and take ownership of

01:11:49.960 | these things.

01:11:50.440 | Okay. Do you have a worst performing asset class for 2023

01:11:56.080 | prediction? Sultan of science, Queen of Kenwa, Dave Friberg.

01:12:00.040 | It's, it's really simple. I've mentioned it before, it's

01:12:03.080 | consumer credit, we assume that raising rising rates and

01:12:06.560 | inflation would taper down consumer demand, meaning

01:12:12.080 | consumers buying goods and stuff. And that certainly hasn't

01:12:15.160 | happened. I'm in Vegas right now. I was in the car yesterday

01:12:18.680 | and the driver grew up in Vegas. He's like, in all the I've

01:12:22.880 | lived my whole life in Vegas. He's like, I've never seen a

01:12:24.920 | December like we just had, it was packed the entire month.

01:12:28.160 | He's like, normally in Vegas, it's dead up until Christmas and

01:12:31.000 | the New Year's people come into town, but it's normally dead.

01:12:33.280 | He's like, I've never seen such a busy month. And I think we see

01:12:35.880 | this in the numbers consumers are still spending, like it's

01:12:38.720 | 2021. They're still spending like interest rates are zero, as

01:12:41.840 | we talked about, consumer credit is skyrocketing, while rates are

01:12:45.960 | skyrocketing. And so I think we're going to run into a real

01:12:49.120 | wall with respect to consumer credit in sometime this year,

01:12:53.800 | and you're going to see, as you guys know, this is such a

01:12:56.320 | complicated, interwoven market of assets, that the way that

01:13:00.560 | this this can be traded, there's a lot of different ways to trade

01:13:03.600 | it. But I think it's going to be, in general, consumers are

01:13:06.280 | not going to be able to meet their debt obligations. And it's

01:13:08.520 | going to be

01:13:08.800 | could be mortgages, credit card debt, defaults are coming. Yeah,

01:13:14.160 | the markets, the market has priced in a bunch of this stuff,

01:13:17.200 | obviously companies like a firm and you know, the the what are

01:13:20.520 | they called buy now pay later companies, but credit card

01:13:23.320 | companies, mortgages, there's a lot of assets that you can start

01:13:26.560 | to kind of pick apart, where do you think this unravels first?

01:13:29.160 | How does what gets hit hardest? What's underpriced and

01:13:31.760 | overpriced? Probably a lot of good pair trading to do as

01:13:34.200 | Jamal kind of loves to talk about, with respect to which of

01:13:37.120 | these are more likely or less likely to be sensitive to this

01:13:39.560 | dynamic, but there's, I think it's, it's going to be a pretty

01:13:42.040 | ugly scene. Consumers just have way too much debt relative to

01:13:45.040 | their earnings right now. And it's pretty nasty.

01:13:46.960 | And they have some confidence that they'll always have a job

01:13:50.760 | or some way to pay their for easy payments.

01:13:52.880 | It's hard, it's muscle memory is serious. You know, you come out

01:13:57.800 | of 2021. When you had, it's not just stimulus checks, it was the

01:14:01.200 | low interest rate and easy credit availability everywhere.

01:14:04.000 | And it's just easy to jump into getting new stuff and cool

01:14:06.280 | stuff. And then when you get used to getting new stuff every

01:14:08.120 | week, or every month, you kind of stick with it. And you're

01:14:10.920 | like, I don't want to give it up just yet. I just not just yet,

01:14:13.200 | not just yet, you know, and so it's hard to kind of step back

01:14:16.520 | from spending when you have a new type of lifestyle. And I

01:14:19.320 | think that's what's going on.

01:14:20.200 | I think this is an incredible observation.

01:14:22.360 | There's a great tick tock of this guy that runs car

01:14:24.320 | dealerships, and he sent them out on like, how much incredible

01:14:28.320 | money like what a significant percentage of people's income

01:14:31.640 | they are spending on their monthly car payments and people

01:14:33.760 | buy these cars that are well beyond what should be kind of a

01:14:36.960 | reasonable budget. If you were to go to Susie Orman for

01:14:39.320 | stretch, you're not by that freaking stretch. And this the

01:14:42.960 | stretching is gonna is gonna snap this year. Yeah,

01:14:45.080 | absolutely. Which brings us to the most anticipated track. I

01:14:48.320 | love it. Great one. Most anticipated trend of 2023.

01:14:51.640 | Related to yours, I went with austerity. I have a friend who

01:14:56.840 | sometimes flies private often. And I was talking to him about

01:15:00.120 | his Christmas vacation. This friend of mine, Shemoth, instead

01:15:03.760 | of flying private to his vacation, he had to pick up his

01:15:06.400 | kids, he had to go back and forth. He was driving his car.

01:15:10.160 | That was three hour. That was you. Okay, I didn't want to

01:15:13.920 | decloak. He would normally buy private to Lake Tahoe. And he's

01:15:20.680 | like, No, I can't go out with your skiing on Friday. I got to

01:15:23.360 | pick up my kids. And then I'm driving. I said, Wait a second.

01:15:25.680 | How are you doing that? He's like, I'm driving a car. I said,

01:15:27.720 | What? Who's driving the car? He said, I'm driving the car. And

01:15:31.440 | that's why I say austerity is my anticipated trend of 2023.

01:15:34.960 | I agree with you. I actually think this is a really good

01:15:37.040 | opportunity to pull back on so much waste. I haven't really

01:15:41.840 | looked at my household budget and probably two or three years

01:15:44.560 | didn't even bother. Why? And then and then when I looked at

01:15:47.400 | it, I was like, wow, this is really inflated to a level that

01:15:50.080 | I didn't expect. Yes. But it makes a lot of sense to live in

01:15:54.040 | a more heads down austere way. I don't know. Yeah. I well, I

01:16:00.960 | mean, look at tonight's menu. You went with duck. I guess the

01:16:03.640 | olive fed Wagyu everything's off the menu. Now. No black

01:16:06.200 | truffles. We're having duck. We're down to poultry. That's

01:16:08.800 | just next week. We're gonna have pasta. It's okay. Come on.

01:16:11.280 | austerity measures for everybody. They call it foul for

01:16:15.000 | a reason. Right? Oh, God. Saks. Do you buy into austerity? Where

01:16:19.720 | Chamath and I are austerity bell tightening as our trends? Where

01:16:22.560 | were you? What's your trend for? I think it's a pretty good

01:16:24.360 | trend. The trend that I am going to suggest will be to your great

01:16:30.600 | disappointment, Jay cow, which is Trump's influence in the GOP

01:16:34.840 | continues to wane. You're seeing it in real time right now. The

01:16:39.680 | headline is Trump's endorsement proves worthless to Kevin

01:16:42.560 | McCarthy in the speaker bid. Even the MAGA faithful like Matt

01:16:47.240 | Gates, like Lauren Boebert, they are ignoring Trump's pleas to

01:16:51.760 | get behind my Kevin. And in fact, they're kind of not just

01:16:56.280 | defying him but making fun of him. Matt Gates had a repost

01:17:00.480 | Trump saying sad exclamation point. And Boebert was saying

01:17:04.040 | that Trump needed to get behind her movement. So we have now a

01:17:08.080 | level of open defiance to Trump and the GOP his endorsements

01:17:13.000 | just not are not what they once were. And even if somehow, Kevin

01:17:18.000 | McCarthy pulls us off. I think all that means is that Trump

01:17:21.840 | gets blamed for every swampy rhino compromise that McCarthy

01:17:25.640 | has to make to keep the government running over the next

01:17:27.320 | two years. So it's a lose lose.

01:17:28.640 | Does that mean that populism is on the wane? Do you think like

01:17:31.280 | because the it's the electorate that got him elected in the

01:17:33.440 | first place? He was not very popular with politicians, the he

01:17:36.520 | was kind of an outcast when he got elected the first time. And

01:17:39.720 | that may be the case now, but he still got elected because the

01:17:42.120 | population loved him. People loved him. Is that going to

01:17:44.560 | happen? Do you think that means that the populism is kind of

01:17:46.880 | waning or the interest of the voters is waning on him? Or is

01:17:50.440 | it just the political parties alignment?

01:17:52.160 | Boebert only Boebert only won by a few 1000 votes. She didn't

01:17:55.400 | exactly crush it in Colorado.

01:17:57.000 | I think a lot of this has to do with Trump's personal standing

01:18:00.800 | after the midterms, the candidates that he personally

01:18:03.360 | picked that were all in tough races, they all basically lost.

01:18:06.000 | It was about the distraction he caused by making the 2020

01:18:09.520 | election such a big deal constantly looking backwards. So

01:18:13.120 | I think the Republican Party doesn't like the antics. It's

01:18:15.880 | not about the policies. I don't think I think it's 100% about

01:18:20.080 | the about Trump's electability and about his ability to get

01:18:24.280 | things done. And it's not really about the positions per se. So I

01:18:29.400 | think freebird to answer your question, I think that the

01:18:31.920 | future of the GOP will incorporate this populism, but

01:18:34.600 | it's going to find a better integration with the

01:18:38.080 | establishment wing of the Republican Party. And future

01:18:40.920 | candidates will have to basically satisfy both of those

01:18:43.680 | wings of the party.

01:18:44.560 | sex was it was a straw that were maybe the two straws that broke

01:18:47.880 | the camel's back for Republicans and Trump in that relationship

01:18:50.960 | was it January six and the election denial like for

01:18:54.520 | Republicans is it just like, Come on, those are the two

01:18:57.200 | things

01:18:57.680 | this constant focusing on the 2020 election first, it costs

01:19:01.680 | them the cost Republicans that Georgia runoff seat with Purdue

01:19:05.520 | against Warnock. Purdue won on election night didn't clear 50%

01:19:09.400 | had to go to the runoff. This was happened the day before

01:19:12.320 | January six, this happened on January 5 of 2021. That was the

01:19:16.360 | first race where Trump's antics cost them. Then you had this

01:19:20.000 | midterm election, where you know all the candidates who had to

01:19:23.920 | appease Trump by talking about again, the last election instead

01:19:27.400 | of looking to the future, they got punished by the voters. I

01:19:31.080 | think Republicans want to win. I mean, they're tired of losing

01:19:34.120 | that simple. It's that simple.

01:19:35.680 | Yeah, the job of a politician is to win freeberg. You got an

01:19:38.880 | anticipated trend of 2023.

01:19:40.320 | I am excited about and want to share the point of view that I

01:19:46.440 | think I'm selling gene therapies are becoming more mainstream. So

01:19:49.440 | these are

01:19:49.960 | pharmaceutical modalities where we use gene editing systems

01:19:54.880 | where you can actually go in and change or add genetic material

01:19:58.960 | to cells in your body to resolve things like genetic diseases or

01:20:02.960 | change protein deficiencies or introduce new proteins. And then

01:20:06.160 | cell therapies where we engineer cells put in the body and those

01:20:09.440 | cells go and do things like attack and destroy cancer cells.

01:20:13.320 | For example, there are currently 27 FDA approved cell and gene

01:20:17.360 | therapies on the market. There are over 1000 in clinical

01:20:20.400 | trials, many of which are already showing extraordinary

01:20:23.200 | efficacy and benefit today. These therapies cost upwards of

01:20:26.760 | a million dollars. So I think there's a massive and talking

01:20:29.560 | about the infrastructure investment conversation earlier,

01:20:31.800 | because of the number of diseases and the number of

01:20:33.760 | conditions and number of people that these therapies can treat.

01:20:37.000 | I think there's massive infrastructure investment

01:20:39.080 | opportunity coming forward this year. But also seeing these come

01:20:42.080 | to market come out of the clinical trials, get FDA

01:20:44.320 | approved, we have to ramp up and build up the infrastructure

01:20:47.440 | needed because it's not traditional, we make a drug in a

01:20:49.720 | factory and send it to people and they get it injected. These

01:20:52.160 | are much more complex, they require a much more complicated

01:20:55.760 | delivery mechanism, you have to have systems to engineer cells

01:20:58.880 | and edit them and put them back in your body. Those systems

01:21:01.240 | today take days or weeks and cost, you know, as a result, a

01:21:04.200 | million dollar plus per treatment. So I think that the

01:21:07.320 | cell and gene therapy opportunity, you know, the JP

01:21:09.680 | Morgan Healthcare Conference starts this week. It's the

01:21:12.280 | biggest biotech and healthcare conference in the world starts

01:21:14.560 | in San Francisco on Monday. This is one of the biggest areas of

01:21:18.880 | interest and one that everyone's investing against. But as these

01:21:22.120 | come to market, there's, you know, we talked about this last

01:21:24.120 | week, genetic diseases, types of cancer that are going to be

01:21:26.920 | addressed. And I'm really excited about seeing more of

01:21:29.080 | these products come to market, seeing the whole kind of

01:21:31.600 | infrastructure and delivery system change.

01:21:33.240 | All right, sorry to interrupt trying to keep the trains

01:21:35.120 | moving gene editing. Very good choice. All right, we end with

01:21:39.040 | this a little bit fun. Most anticipated media for 2023.

01:21:42.560 | These are things we like to talk about the media here. Sometimes

01:21:45.360 | we talked about White Lotus season two amazing season. And

01:21:51.680 | maybe what you're looking forward to next year. I am

01:21:54.960 | really looking forward to in film Oppenheimer Christopher

01:21:57.800 | Nolan's movie about the Manhattan Project that should be

01:22:00.000 | extraordinary. I loved was Dunkirk his as well. I love

01:22:03.840 | Dunkirk. I like everything he does. And when he this is him

01:22:07.320 | becoming like a history uncle. I'm here for it. I'm here for

01:22:10.520 | Nolan becoming our history uncle, instead of Batman.

01:22:13.080 | What was the one after inception? Oh, that was really

01:22:15.360 | confusing. The one with Denzel Washington's son with john

01:22:18.440 | Washington. Yes, it was. I couldn't finish it. I tried

01:22:22.680 | twice. I gotta go a third shot on that one. It was Oh, yeah, it

01:22:26.800 | was it was his worst film. It was called tenant tenant tenant.

01:22:32.880 | Yes, about like time and reverse. And this it was

01:22:35.480 | possible to follow. Did you guys see his original film, which was

01:22:38.800 | incredible memento?

01:22:39.920 | Of course, it was fantastic. Yeah, and that was great.

01:22:43.280 | It was enough mind mind. Yeah, it was mind bending enough that

01:22:47.120 | you're like, Oh, my God, incredible. And then I think

01:22:49.440 | they took it too far tenant. I tried to watch it three times.

01:22:51.760 | I'm generally pretty good with these sorts of films and love

01:22:54.640 | them. But oh, my God, it was impossible to follow. He took it

01:22:57.520 | too far. Okay, so hopefully he goes back to his roots.

01:23:00.880 | In terms of TV series. I'm looking forward to secession

01:23:05.480 | coming back Ashoka, who is Anakin Skywalker, aka Darth

01:23:09.160 | Vader's Padawan Ted Lasso season three coming up. Those are for

01:23:13.080 | me incredible. And then on the book front, man, the Michael

01:23:15.960 | Lewis book about SPF is going to be next level. I cannot wait for

01:23:19.040 | that. sacks. You're a media junkie. What do you got on your

01:23:21.680 | list of things you're looking forward to? Or should say what

01:23:23.600 | is Tucker's writers? What did they put down?

01:23:25.080 | Well, Jake, I thought you're gonna pick I thought that for

01:23:29.600 | movie, you're gonna pick cocaine bear.

01:23:31.240 | I can't wait for cocaine.

01:23:33.560 | Extraordinary bear is in the woods. And a, I guess people who

01:23:44.560 | are trafficking in cocaine drop their or crashes and the bear

01:23:48.400 | eats the cocaine and then goes on a rampage is kind of like a

01:23:50.920 | genre film like in the crocodile way. By the way, I'm listening to

01:23:54.480 | Quentin Tarantino's book, by the way of criticism. Get the

01:23:57.960 | audiobook. You'll like it sacks. He talks about all the films in

01:24:00.600 | the 70s. Very good. Shout out to Quentin. What do you got? What

01:24:03.400 | do you got on your short list? History Uncle?

01:24:06.080 | Me? Yeah, I just gave you one. But

01:24:10.760 | cocaine bear top of your list.

01:24:12.680 | We'll watch it.

01:24:13.200 | was on my list. And I think Marvel is doing a good job

01:24:18.080 | developing a new villain to rival Thanos with this with

01:24:21.640 | Kang. I don't know what phase they're on now. But for me

01:24:24.800 | season two, and then the new Ant Man movie. And, you know, I

01:24:29.040 | thought after Thanos, he wouldn't really be able to top

01:24:30.920 | that. But yeah, they've come up with a really good concept, I

01:24:33.560 | think, for the next, you know, 20 Marvel movies.

01:24:36.440 | Well, and then it will eventually become Galactus.

01:24:38.440 | Yeah, you guys have completely fucked up. You have missed the

01:24:41.560 | most obvious slam. Here we go. shot days new album go.

01:24:45.440 | Dune, part two. Oh, I haven't watched number one yet. I got

01:24:50.920 | to wait what? You know, I was having a boring wasn't it? My

01:24:55.320 | wife wants to watch it. It is so stylistically beautiful. It is a

01:24:59.000 | little boring. There's not a lot going on slow, but it's so well

01:25:03.440 | shot. It's a fun. It's visually just stunning. I mean, if you

01:25:08.400 | need to watch it on a big screen with big speakers and but

01:25:11.400 | part two comes out in November this year. Absolutely. That's

01:25:13.400 | okay. Great. Freeberg, tell us what documentary on veganism

01:25:16.800 | you recommend and you're anticipating for 2023. What

01:25:19.600 | vegan documentary or animal abuse documentary?

01:25:23.520 | I am excited about the generative AI based media that I

01:25:28.080 | think is going to start to kind of rocket this year. We could

01:25:31.720 | see for example, the first, you know, AI written symphony, the

01:25:36.640 | first kind of AI written published novel, how

01:25:38.840 | interesting would that be like a full novel published by AI and

01:25:43.160 | more maybe short films based on AI driven script. And maybe even

01:25:48.080 | what I'm really excited about is these AI based interactive

01:25:50.840 | video games or kind of experiences where you the user

01:25:54.800 | kind of get to create and live your own world through some sort

01:25:57.600 | of video game type modality. So I think AI driven media.

01:26:01.600 | All right. There you have it, folks. There are

01:26:04.080 | speaking of pop culture chaos, I guess. Prince Harry has a book

01:26:08.120 | coming out. That's called spare.

01:26:10.720 | That's fair.

01:26:12.680 | Spare, like, you know, like, playing bowling,

01:26:16.720 | you know, but you know, like in in the English monarchy, they

01:26:19.680 | there's the air and the spare. So he's calling himself but to

01:26:24.520 | me, that's like a weird self description. Yeah, like, that's

01:26:27.560 | that's how you see yourself as just

01:26:29.080 | being self deprecating. He didn't pick that. They paid him

01:26:32.160 | so much money. I heard they have to sell 1.7 million books to

01:26:35.240 | break even. But you know, what it reminds me of is when Leonard

01:26:38.800 | Nimoy wrote a book, I think he wrote a book called I am Spock.

01:26:42.720 | And then he wrote a book called I am not Spock. Nice. He could

01:26:46.640 | never get comfortable with the fact that he was just Spock.

01:26:48.880 | Yeah. And there's something weird about calling yourself

01:26:52.720 | spare, like, you know, you're clearly not comfortable with

01:26:56.280 | it's like the

01:26:57.000 | everything. Yeah, everything they taught you everything I

01:26:59.960 | learned at Harvard Business School, and everything they

01:27:03.440 | don't teach at Harvard Business School, you can you can do both

01:27:05.320 | books. All right, listen, this has been great. Breaking news as

01:27:08.120 | we're talking here chat GPT, open AI, doing a tender offer at

01:27:13.160 | 29 billion.

01:27:14.480 | 3 billion a day. Oh, my God.

01:27:19.080 | 29. It's it's founders fund or reportedly, according to the

01:27:23.440 | journal, it's founders fund thrive capital. So founders fund

01:27:26.520 | does not generally do super overpriced deals. Yeah.

01:27:29.640 | Yeah, I would buy that.

01:27:31.800 | That's a silly picture. I mean, come on,

01:27:33.360 | dude, are you kidding me? That's that could be a $300 billion

01:27:35.720 | company. That's a tenant, right? But that yeah, it's a 10x from

01:27:38.640 | here. I wouldn't I would not. Totally could be. By the way,

01:27:43.280 | you guys remember that the long way of open AI, I don't know

01:27:46.760 | what the current situation is. But it was a nonprofit. Yeah,

01:27:50.160 | where they said investors put money in, but the investors

01:27:52.360 | maximum return was 100x on the dollar invested. No, I don't

01:27:55.680 | think nonprofit, but it's up to 100x. No, no, that happened

01:27:58.920 | afterwards. It's when they can learn the original model. Yeah,

01:28:01.760 | the know the original model was a pure

01:28:03.320 | and they can run any shares. No, no, the original model was a

01:28:06.280 | pure nonprofit where there was no cap because there was no

01:28:08.840 | concept of equity. Yeah, when they flipped, they kept

01:28:12.000 | everybody to 100x on the return. So the original money, but not

01:28:16.160 | anymore or still, but no, the original money, which was like

01:28:19.240 | Elon's money. Who else put in money? Read? Yeah, all that

01:28:25.160 | money came in as a as pure nonprofit. So I don't know how

01:28:27.960 | it converted. But that's when they

01:28:29.240 | or did it convert to those people who funded it originally

01:28:31.680 | get any shares in the for profit, we could we could find

01:28:34.320 | out probably they did. I mean, it would make sense that they

01:28:36.200 | will find out. But I mean, wait, if this is a tender offer,

01:28:39.200 | 27 billion, you wouldn't buy shares at 27. So again, like

01:28:44.080 | the thing that I want to impress upon you is like, there is an

01:28:47.320 | enormous amount of work that they do, that what their biggest

01:28:51.320 | gap to monetizing this will be finding unique content that they

01:28:56.960 | learn on that nobody else has access to. And this is why I

01:29:00.800 | really think it's important to understand, if you have enough

01:29:03.520 | compute, these all of these unsupervised learning models, if

01:29:07.480 | you run them on the same training set, will converge to

01:29:11.080 | the same answer. So you're just getting there first. So in

01:29:15.040 | order to be really defensible, you have to get there in a

01:29:17.400 | unique way. And so either you're going to hand tune, or you're

01:29:22.040 | going to have inputs that are different. So I don't know, I

01:29:25.320 | don't know the answer. That's why like, they have to answer

01:29:28.240 | that question in their fundraising. And I'm sure that

01:29:30.040 | they did, because these are smart investors. But that's the

01:29:32.520 | big idea that you have to overcome. And again, you have to

01:29:35.280 | think like, you think Google is sitting on their hands? No, or

01:29:38.760 | Google is

01:29:39.160 | 29 billion, like what fundamentals is that based on?

01:29:43.400 | Like, why not 5 billion? Why not 3 billion? I mean, like, why not

01:29:46.320 | 10 billion? Like what makes it double valuation? That's what it

01:29:49.480 | is. It's all this all momentum said nothing to do with reality,

01:29:53.240 | right? I mean, it this would imply at a 30 the public comps

01:29:58.240 | public Google trades at what 25 or 30 times EBITDA. So this

01:30:02.800 | would imply a billion dollars in EBITDA, a billion dollars in

01:30:06.680 | EBITDA, $3 million a day, they're losing $3 million a day

01:30:10.240 | on computer for reportedly $3 million a day in profit on what

01:30:12.880 | product? I don't know, they have a

01:30:16.360 | I said, that's not the issue. I think Look, I mean, my point was

01:30:18.600 | if these guys open up a set of tools that support all these

01:30:22.360 | applications and services to emerge on top of what they've

01:30:25.320 | built, and they're getting red share getting payments out of

01:30:28.560 | that, it's going to very quickly turn into a real

01:30:30.320 | here's the problem. This is why that can't happen. They don't

01:30:33.880 | have the rights to the data they built the training set on. And

01:30:36.920 | the second they commercialize it, the second anybody pays them,

01:30:39.920 | whoever they base this on to good into oblivion, I predict

01:30:45.360 | suit into oblivion.

01:30:46.680 | Let's talk about let's let's actually let's talk about that

01:30:48.920 | in the next show. Because I think that's like the way that

01:30:50.840 | AI works. And we should probably bring someone like Sam on to

01:30:53.000 | talk about it. But the way that AI works on training data, and

01:30:57.040 | now people are making claims that the training data is

01:30:59.160 | copyright, therefore, of course, model output is protected,

01:31:02.640 | protects that copyright is I think worthy of a good

01:31:05.320 | conversation.

01:31:05.960 | What's interesting is, you know, the early, the early version of

01:31:09.120 | the of the internet was very simple. It's like you had this

01:31:11.720 | file called roblox.txt. And you would basically be open to a

01:31:15.320 | crawl or not. And that's what would allow Google to basically

01:31:17.760 | go and spider your pages, right. And so we have to replace this

01:31:21.040 | concept of that with this AI dot txt. Well, you could make a

01:31:26.840 | claim that this is no different than, you know, a spider

01:31:29.960 | crawling a web page, except that in the in the search case, it was

01:31:33.400 | much cleaner, which is we're just going to index your page

01:31:36.040 | and redirect people to you. Here, it's we're actually going

01:31:39.880 | to create a derivative work because of you and go. And I do

01:31:43.880 | think that that's going to be a very interesting legal

01:31:46.000 | threshold that has to get figured out.

01:31:47.480 | Well, here it is, Chamath, you're nailing it. Exactly.

01:31:50.120 | It's a derivative work, and they did not have permission to use

01:31:53.200 | it. And it impedes upon the original authors, whether it's

01:31:57.440 | a photo, it's a song, it's a piece of code, it impedes upon

01:32:01.320 | their ability to do commerce in the world, you are interfering

01:32:04.000 | with their ability to monetize their content, and the

01:32:06.120 | percentage you're using is 100%. So when you get to fair use,

01:32:09.720 | non commercial use is very protected, parodies protected

01:32:13.640 | education's protected. But when you dip into using the entirety

01:32:17.800 | of the work, which they're doing, and you impede upon the

01:32:21.920 | person's ability to commerce, and you confuse the public,

01:32:24.520 | well, this is why I test that they will fail, fail, fail.

01:32:27.480 | This is why I think that most people don't understand what AI

01:32:29.960 | is, they don't even understand the difference between training

01:32:31.960 | and inference. So hopefully, there is some more understanding

01:32:36.320 | of this. But if you use the same data set, you will eventually

01:32:39.920 | converge to the same outputs absent of hand tuning weights,

01:32:44.600 | which has its own issues, and absent any asymmetrically

01:32:49.360 | different data that you have that nobody else has.

01:32:52.800 | Absolutely. Yes. So if you are Apple, and you have the watch

01:32:56.280 | data, or your Google, and you have the search data, or you're

01:32:58.960 | a weather company, you have the weather data, and your

01:33:00.720 | proprietary, of course, there's a very easy solution to this

01:33:03.160 | tomorrow. Number one, citations, when the algorithm gives you an

01:33:07.360 | answer, it should say what were the top percentage sources of

01:33:11.560 | this information? How did the AI?

01:33:13.400 | No, but Jason, again, look, if you look inside of a transformer,

01:33:16.320 | the problem is, okay, that you're going to have trillions

01:33:19.320 | of ranks, trillions of weights, trillions. And so how are you

01:33:23.640 | going to decide how to basically draw a line under a threshold?

01:33:26.600 | This was actually a useful input, and this was not. So

01:33:30.520 | again, I just think that it's hard, a very few small class of

01:33:33.920 | people actually understand this, like the great person to

01:33:36.120 | actually bring in to talk about this would be Andrej Karpev. He

01:33:38.800 | would not. And I think because Andrej was there, sure, and at

01:33:42.440 | Tesla, and he but he can say it in a very dispassionate way to

01:33:45.640 | explain this to people, I think we should, we should ask him to

01:33:48.280 | come on. Yeah, for sure. I mean, I can ask him.

01:33:50.640 | I can. I mean, this is brand is this the law, Sachs, you're an

01:33:54.400 | attorney, you understand fair use, copyright, all this stuff.

01:33:56.680 | The law, correct me if I'm wrong here, Sachs does not

01:33:59.640 | anticipate this.

01:34:00.640 | Like this highly specialized area, I don't want to pretend

01:34:03.640 | like I understand the law in this area. You know, I'd want to

01:34:06.640 | talk to a specialist.

01:34:08.240 | Yeah. Okay.

01:34:08.760 | So anybody, let's have this conversation. I think, yeah,

01:34:11.440 | this is a great discussion work for us to talk about because

01:34:15.240 | this is probably why, by the way, they started as open

01:34:18.240 | source, because it was like a slam dunk thing to make this a

01:34:21.800 | nonprofit and open source everything, because maybe in

01:34:24.680 | part because of these issues, but if you just let the code run

01:34:27.560 | free, you probably don't have to even deal with these issues.

01:34:33.400 | Right? Well, they they closed it. Remember their claim. The

01:34:37.000 | claim was this is too dangerous. Their original claim was it's

01:34:39.920 | too dangerous for people to not see the code. Then Sam flipped

01:34:43.040 | on that. And he said, it's too dangerous for people to see the

01:34:45.440 | code. And it started out as a nonprofit, where the idea was

01:34:48.920 | the way to keep this safe is for everybody to see the code. But

01:34:53.160 | they didn't make any money, whatever private and they flip

01:34:55.760 | the decision. So keep that in mind as well.

01:34:57.760 | He's a he's a very, very, very clever business person.

01:35:00.680 | He's savvy. And,

01:35:03.440 | you know, Paul Graham, when Paul Graham picked Sam to run YC

01:35:06.760 | Paul Graham said that this is the most impressive person I've

01:35:10.120 | met since Steve Jobs. Yeah. Remember that on the pot? I do

01:35:13.440 | remember that. He said something similar about Gary Tan is now

01:35:16.080 | running YC starting this week. Sam Altman, friend of the pot

01:35:19.080 | come on all in anytime and has played in our poker game several

01:35:21.720 | times. Yes, yes, we we had a tough situation there where you

01:35:26.200 | interfered in a hand if you remember. All right, listen,

01:35:28.880 | this is what there was a Sam and I were in a hand of poker. He

01:35:34.800 | raised, I had to pair and I'm trying to figure out does he

01:35:37.520 | have a set or is he bluffing me? I think he's got top pair. And

01:35:40.320 | you were like, Oh, look at this. And you started commenting on

01:35:42.320 | the hand. Oh, my God, I remember the call or not yet. And I'm

01:35:45.160 | like, God, I'm like, come on. For my little bush. Let's let's

01:35:49.600 | stop talking here. Because I'm trying to play and I'm like,

01:35:52.640 | okay, Sam would get and I basically came to the

01:35:54.440 | conclusion, Sam would get the light, great delight bluffing

01:35:56.760 | me off a hand. He's a risk taker. He knows I'm conservative.

01:35:59.160 | He knows he's a risk taker. I'm gonna call here with my I had

01:36:02.280 | bottom two. I'm like, does he have a set and there was also a

01:36:05.000 | straight on the board. I'm like, fuck it. I at best I'm, you know,

01:36:10.440 | even money here. But there was a lot in the pot. So I was just

01:36:12.800 | doing the pot odds while I'm doing the pot odds. You were

01:36:14.460 | like, which is usually me. I'm usually the one being

01:36:19.600 | reprimanded for talking. But it was notable. I listen. Love you

01:36:23.500 | besties. Why don't you tell people that there's no comments

01:36:25.960 | and just as a programming note, we turned off comments for a

01:36:29.100 | couple of weeks on the YouTube just to see how it's

01:36:31.200 | psychologically affects me and for Chamath to just ask with all

01:36:34.680 | you Brigadooners. We love you. Besties. This has been a great

01:36:39.880 | episode. Two great and his Twitter is at Chamath and he

01:36:44.600 | doesn't read it. So everyone knows me no sex sex and I voted

01:36:47.440 | against turning off comments. Just just voted in favor of

01:36:51.080 | whatever got Chamath's vote for the All in Summit 23. So that's

01:36:54.800 | how I this is horse trading now. But the podcast has never been

01:36:58.560 | better. Besties spending time together on the slopes is the

01:37:02.040 | cure to all evils. We'll see you next time. Love you besties. Bye

01:37:05.100 | bye. Love you guys. Bye bye.

01:37:06.600 | Let your winners ride

01:37:09.560 | Rain Man David

01:37:12.080 | Sass

01:37:12.400 | We open source it to the fans and they've just gone crazy with

01:37:19.000 | it. Love you.

01:37:19.840 | West Coast Queen of

01:37:28.280 | besties are

01:37:29.080 | dog taking a

01:37:32.360 | should all just get a room and just have one big huge orgy

01:37:41.440 | because they're all just like this like sexual tension that

01:37:44.280 | they just need to release

01:37:45.160 | your

01:37:47.560 | your feet

01:37:51.160 | good. We need to get murky.

01:37:54.080 | Oh,

01:37:54.720 | man.

01:37:55.240 | Oh, man.

01:38:03.400 | (chanting)

E110: 2023 Bestie Predictions!

Chapters