Presidential Debate Reaction, Biden Hot Swap?, Tech unemployment, OpenAI considers for-profit & more

00:00:00.000 | Alright, everybody, welcome back to the number one podcast in the world. It's episode 185. And

00:00:07.600 | you're going to be delighted by today's docket. If you're into politics, we move the taping back a

00:00:12.880 | day gentlemen, because we knew there would be a presidential debate. So with me to discuss all

00:00:18.240 | things presidential debate and the news finance markets, maybe even a little science from our

00:00:23.200 | science boy, David Freeberg is the rain man, David Sachs. Yeah, true. I have a t is frozen.

00:00:30.480 | Or he's staring everybody down. How are you, sir?

00:00:33.360 | We're about to enter the endgame. Jason.

00:00:35.840 | Oh, the endgame is here. Okay, we're in the endgame now.

00:00:39.120 | And from a we work in the home office in Pasadena is our friend, the Sultan of science. He's back

00:00:46.480 | to work. He's in his cube. Did you get the TPS reports done? How you doing there? The humble

00:00:52.000 | headquarters of Oh, hollow genetics, beautiful lab downstairs. I'll take you on a tour one day.

00:00:56.560 | Can't wait to hear my friends gloat and bloat themselves on the show today. After the debate

00:01:03.280 | last night. It's going to be insufferable. I'm looking forward to it. Okay, so you're building

00:01:07.840 | the next $10 billion company and we don't get to invest but we do get a tour. Thank you. Good to

00:01:12.560 | know. We're better. We brought this every week. We can you guys want to put money and I will open

00:01:19.600 | up the round again for you. And you guys you said this three times when do we wet our beaks?

00:01:24.000 | Jekyll's right about this. Actually, that's how you know the winner. The one he doesn't let us

00:01:28.480 | invest in is the winner. It's the easiest way to his portfolio. He's like, Hey, can I can I

00:01:34.160 | introduce you to a soda pop machine? Rain Man David. All right, everybody, let's get to the

00:01:56.080 | show here enough of the craziness last night was the first presidential debate and there's no easy

00:02:02.480 | way to put this. It was an unmitigated disaster for the Democrats and President Biden. Gosh,

00:02:09.520 | he looked confused. Lots of slips, lots of gaffes. If you are under a rock, living in a cave without

00:02:17.120 | Starlink and you missed it. Here's a couple clips. Everybody's talking about this one

00:02:21.680 | where Biden lost his train of thought for close to 10 seconds, but

00:02:26.560 | making sure that we're able to make every single solitary person eligible for what I've been able

00:02:32.880 | to do with the with the covid, excuse me, with dealing with everything we have to do with.

00:02:40.080 | Look, if we finally beat Medicare, thank you, President Biden, President Trump.

00:02:49.920 | Gosh, that was brutal. And the reaction from CNN, even MSNBC's Joy Reid, as far left as you can go,

00:02:59.840 | was brutal and candid. And here it is. The knives are out from the Democrats for President Biden.

00:03:08.080 | Right now, as we speak, there is a deep, a wide and a very aggressive panic in the Democratic

00:03:13.600 | Party. It started minutes into the debate and it continues right now. It involves party strategists.

00:03:19.360 | It involves elected officials. It involves fundraisers. And they are having conversations

00:03:23.760 | about the president's performance, which they think was dismal, which they think will hurt

00:03:27.600 | other people down the party in the ticket. And they're having conversations about what they

00:03:31.360 | should do about it. Some of those conversations include, should we go to the White House and ask

00:03:35.200 | the president to step aside? Other of the conversations are about should prominent

00:03:38.480 | Democrats go public with that call because they feel this debate was so terrible?

00:03:43.600 | That was painful. I love Joe Biden. I work for Joe Biden. He did not do well at all.

00:03:48.400 | And I think there's a lot of people who are going to want to see him consider taking a

00:03:53.520 | different course now. There is time for this party to figure out a different way forward,

00:03:57.120 | if he will allow us to do that. I too was on the phone throughout much of the debate. My phone

00:04:00.720 | really never stopped buzzing throughout. And the universal reaction was somewhere approaching

00:04:08.240 | panic. The people who were texting with me were very concerned about President Biden seeming

00:04:15.280 | extremely feeble, seeming extremely weak. This has been, quite frankly, a car accident

00:04:20.640 | in slow motion that we've seen over and in building and questioning it. And as has been

00:04:26.400 | pointed out, Joe Biden sought this debate at this remarkably early time because he knew he was

00:04:31.680 | losing and he needed to change the narrative. And he did change the narrative. He sunk his

00:04:36.800 | campaign tonight. All right, gentlemen, there is absolutely no way any of us could have predicted

00:04:42.880 | this. Oh, wait, Nick, read the room, Democrats. You have put up a candidate that nobody wants.

00:04:48.320 | His policies on the border and some other issues are not in sync with the majority of the country.

00:04:53.760 | At some point, the Democrats just have to take a deep look in the mirror and say we fielded a bad

00:04:57.920 | candidate who's too old and people don't believe will stand up to scrutiny of like, say, being on

00:05:03.840 | the all in pot for two hours, or in the debates, or with a hostile interview or any of those

00:05:08.880 | possibilities. And so, I think if that's the case, we really need to have the Democrats think

00:05:14.960 | deeply about maybe fielding a different candidate. And I believe that's what's going to happen in the

00:05:19.840 | next 30 to 60 days. So, I'm predicting... You think there's going to be a switcheroo?

00:05:23.040 | 100%. I mean, if you just look at the polls, it's 100% there'll be a switcheroo.

00:05:28.960 | Who's the switcheroo? I have no idea. It could be Gavin. It could be anybody.

00:05:32.160 | Anything's possible. I think Trump's going to demolish him in the debate. I think he'll sink

00:05:36.560 | to 30% in the polls. And then the Democrats will find a way to give him a graceful out,

00:05:41.840 | and then they'll field somebody else. I think the Democrats, as cynical as it sounds,

00:05:45.200 | we're waiting to see what happens with this Trump trials conviction, what you call lawfare,

00:05:49.360 | what other people call fair use of the law. And then they are going to see how he does in the

00:05:54.720 | debates. That's why they moved the debate up in June. And I think they know to pull the plug on

00:05:59.280 | this if it gets too far gone. And they have the ability to do that because all he's got to say is,

00:06:04.320 | "You know what? I'm feeling old, and I want us to win, and I'm going to slot somebody else in."

00:06:09.840 | All right. And to wrap this up, prediction markets showing

00:06:12.320 | Biden has plummeted to, let's check the number, oh, yeah, 33% in the sharps, as you've referred

00:06:22.640 | to them on the program, are basically saying Biden's going to drop out now, 44% chance over

00:06:30.480 | on poly market will Biden drop out of the presidential race, and then predicted another

00:06:34.800 | one of these prediction markets where you can actually bet real dollars. It's not a plug for

00:06:38.160 | them or commercial, just those happen to be two of the bigger ones. Newsom sits at 14% now, Biden,

00:06:43.840 | 33%, Trump at 58%. At the start of the evening before the debate, Biden was at 47%. Post-debate

00:06:55.120 | Chamath, we see Biden dropping 47% to 33%. There's nothing like this has happened in modern politics.

00:07:03.120 | Your thoughts, Chamath Palihapitiya, and then Saxe will give you the red meat.

00:07:09.120 | Let me just start by saying that President Biden is a person that's given up his whole life

00:07:14.960 | to work on behalf of America in the best way that he thought was possible.

00:07:21.440 | He's overcome a lot of tragedies. I think he's worked very hard. He's diligently tried to do

00:07:25.920 | what he thought was right on behalf of the people of Delaware and then the United States.

00:07:29.440 | My honest takeaway is that that person though is no longer really in charge. And I think that that

00:07:40.080 | was very troubling for me. And it actually makes the last sort of six months make a lot more sense.

00:07:48.240 | So I thought the fact that we could not get a response from the White House to be, I took it

00:07:54.000 | a little bit actually personally. I was wondering why for someone that had been such an ardent

00:07:58.160 | supporter, I couldn't even get an email back when I was consistently asking them to be on the pod.

00:08:03.840 | And now I see that it wasn't just one single act. It was part of a holistic strategy. It was the

00:08:11.680 | same strategy that boxed RFK out of the Democratic primary. Because could you imagine if this event

00:08:18.720 | had happened when he had to debate RFK in the Democratic primaries, it would have been exposed

00:08:22.560 | then. It's probably partly to explain how the law has been used in New York State, whether you want

00:08:30.800 | to call it lawfare or not, but it was a very directed partisan action. And so all of these

00:08:35.760 | things are now three data points that are really important. You will not come on an open format show

00:08:40.720 | like ours to just speak openly. None of us were going to attack him or try to corner him or box

00:08:46.480 | him in. You prevented other people from actually challenging you and directly asking questions of

00:08:52.640 | you in the Democratic primaries. And then you try to put political pressure on your opponents.

00:08:58.560 | All of that is systematically about a group of people that are unelected,

00:09:02.960 | who are trying to control democracy. And I think that that's the most troubling takeaway from this.

00:09:08.640 | I don't think that you should take away from last night that Joe Biden had a bad debate.

00:09:13.840 | I think what we should take away is that there is a person who should be allowed

00:09:18.400 | to transition into the sunset and be celebrated for what he's done. And instead, there are people

00:09:23.440 | that, frankly, at the margins are acting pretty unethically and at the limit is actually acting

00:09:34.720 | somewhat diabolically to prop this person up so that they can keep power. For example, you've been

00:09:40.080 | in situations where you would expect the team that runs a company to be able to stand up and say the

00:09:45.680 | CEO is not in a position to run this company anymore. That's what you would expect if there's

00:09:50.400 | good governance and honesty. You know, what was Ron Klain doing as an example when he was doing

00:09:55.680 | debate prep? Did he legitimately believe that Joe Biden was prepared for this or mentally capable

00:10:01.360 | of actually doing this? And the fact that they are allowing his legacy to be destroyed after 50

00:10:07.040 | years, I think, is really tragic. Yeah. Well said, by the way,

00:10:12.160 | come off sex, your thoughts on what we witnessed last night and the reaction to it.

00:10:16.480 | Well, let me speak as a objective and independent political observer,

00:10:24.400 | OK, just as independent as you, Jake. Yes, let's do that. Let's be independent today. Yeah,

00:10:30.320 | look, anyone can have a bad night. Certainly.

00:10:32.960 | His campaign put out the word that he had a cold and maybe he just had a bad night. I mean,

00:10:40.320 | after all, it was media people like Joe Scarborough just saying a week ago that not only was Biden

00:10:47.920 | cognitively fine, but in fact, he was the best Joe Biden he had ever seen just a week ago or two

00:10:54.160 | weeks ago. Reid Hoffman was saying that he had a two hour lunch with Joe Biden and Biden was

00:11:00.240 | regaling him with details of AI and Gaza and he was good. And so we've heard from all these highly

00:11:07.360 | reputable people is that Biden may not present that well in public, but in private, he's just

00:11:13.840 | fine. You're saying they're lying and they lied to the American people. Well, I'm actually taking

00:11:19.760 | them at their word because they seem like very trustworthy sources to me. I see no reason

00:11:24.080 | to swap out this candidate. I think that anyone can have a bad night and there's no reason

00:11:30.240 | and there's no reason whatsoever for the media to be panicking like this.

00:11:33.680 | Satire socks, satire socks is into the chat. Satire socks is into the chat.

00:11:39.040 | Well, I mean, look, I just I think that there's no reason for this kind of panic.

00:11:44.080 | I believe in democracy and the Democratic primary voters have spoken. This is the

00:11:52.000 | candidate who they voted for. OK, and there is there is your message. Stand by your man. Stop

00:11:58.320 | being a wimp just because your candidate had one bad night. You don't stab him in the back like

00:12:02.880 | absolutely not. And I think Van Jones said that Republicans wouldn't do this if Trump had a bad

00:12:08.160 | night. You know, he's like, why? Why are we all stabbing Biden in the back? So look, this is a

00:12:13.520 | candidate who you've been supporting for years. This is a candidate who you rigged the primaries

00:12:19.440 | for. You boxed out Bobby Kennedy, who, you know, I thought was a fantastic candidate.

00:12:24.960 | You basically boxed out Dean Phillips. This is the candidate you wanted just days ago. You were

00:12:31.520 | saying was completely mentally fit. In fact, the best he'd ever been. OK, so you made your bed

00:12:37.760 | sleeping. You made your bed sleeping. Stop betraying your candidate like this. It's unseemly.

00:12:46.000 | Satire sacks some loyalty, for God's sake. OK, you heard from compassionate Chamath.

00:12:53.760 | You got to hear from satire sacks. Now let's go to morning Friedberg. What do you got this morning?

00:13:00.480 | Frank Friedberg. Frank Friedberg. Talk to it, buddy. Go for it. The big loser of last night's

00:13:07.680 | debate was the American public. The big winner of last night's debate was probably Russia,

00:13:12.880 | China, Iran, maybe the Saudis licking their chops, watching the utter dysfunction in the

00:13:19.840 | leadership of the party, in the leadership of the country as it stands today. A notable mention,

00:13:26.000 | I will say, was the debate format. I absolutely love the fact that there were no interruptions,

00:13:30.080 | that the mics went mute, that there was no audience and the moderators didn't kind of

00:13:33.600 | challenge back and forth and try and make themselves the show. That was very unique

00:13:37.920 | and in a presidential debate. So I actually like the debate format. They stopped interrupting me.

00:13:41.680 | Hmm. Thanks for the interruption. I think that, as Saks points out, the biggest issue is that this

00:13:52.000 | was front and center. Biden's decline in capacity and aptitude for quite some time. I didn't tell

00:13:59.920 | you guys this before, but last October. A senior member of the Democratic Party reached out to me

00:14:06.400 | for a, quote, meeting. I took the meeting in October. And of course, it turns out they were

00:14:12.480 | asking me for money. Little did they know, I don't give any money to politics ever. I never have,

00:14:16.720 | never will. So they're, they're handlers are morons for bringing this person in to come and

00:14:20.240 | talk to me. In the meeting, I said, you cannot put Joe Biden forward as your candidate. What the hell

00:14:26.160 | are you guys thinking? He's like, no, he is completely stable. He is as sharp as he's ever

00:14:32.480 | been. I sent him an email, and I'm going to read you what I said to him. This was in the first,

00:14:38.400 | second week of October. I said, Joe Biden does not appear equipped to be president of the United

00:14:42.720 | States. I think the continued heralding of Democratic Party leadership of the president's

00:14:46.160 | performance and ability to continue to serve into the next term is mind boggling. His inability to

00:14:51.680 | conduct even a basic interview or give a clear and concise statement in a candid setting highlights a

00:14:56.320 | clear and obvious decline in function since he took office. It is important for Democratic leadership

00:15:00.720 | to find an alternative candidate and message this soon. Doing so I believe will buoy fundraising

00:15:05.280 | efforts across yada, yada, yada. I said I would feel uncomfortable with the Democratic majority

00:15:09.120 | Senate head in house giving a leader with declining aptitude nearly limitless effect.

00:15:14.560 | So I sent this as my response to his follow up request for money. This was the second week of

00:15:19.840 | October. And I wanted to pull up the date on this because it was so apparent back then what was

00:15:24.960 | going on. So what's so striking is how long mainstream media and leadership in the Democratic

00:15:32.880 | Party have tried to tell an alternative story that was so obviously revealed to be not true

00:15:38.320 | last night. And that is the thing that I think makes me say America is losing because there are

00:15:43.440 | a few people that are in charge of controlling the narrative. There are a few people in charge

00:15:47.840 | who decide who gets to be the candidate. And those few people are keeping democracy

00:15:52.640 | from working effectively, because the raw data, the direct data, imagery, the video,

00:15:58.160 | the media content that has come out of Biden over quite some period of time made it so obvious that

00:16:03.280 | he was not in full capacity. And so that was my biggest kind of takeaway is that there's something

00:16:09.280 | wrong with the way things are running in this country. You're saying that the media, you're

00:16:12.480 | saying the media and the Democratic Party leadership are lying to America. Yeah. And I

00:16:17.600 | think because if you of course, the fact that we all had this information, we've seen the videos,

00:16:23.760 | we've seen the interviews. And every time a video or an interview comes out, it has been excused

00:16:28.400 | away as, oh, well, he tripped or, oh, you know, it wasn't well edited. And every time there's a

00:16:34.320 | story and then when it's fully exposed, it becomes like, well, my God, the fact that they all flipped

00:16:41.040 | so quickly is what's so shocking because this was there. And, you know, if you're on Twitter,

00:16:46.240 | you can see these clips being talked about by millions of people. But then media and democratic

00:16:51.280 | leadership won't acknowledge that the subversion of democracy is really the real threat to democracy.

00:16:56.240 | To your point, you have the right to elect a person up or down. None of us are choosing to

00:17:01.680 | elect a shadow cabinet of handlers to run America. That's not what any of us are signing up for. And

00:17:07.440 | I think that's what we have the risk of having for another four years. If this lie isn't exposed.

00:17:12.960 | What I what I find unbelievably shocking is all of these data points now just makes so much sense

00:17:18.960 | because the through line is, as you said, a coordinated effort to kind of obfuscate his

00:17:24.160 | decline. Like if you thought about this in a different way, if you took a twenty nine year

00:17:29.920 | old and a thirty two year old, would you say that they're the same? Absolutely right. If you took a

00:17:35.600 | thirty nine and a forty two year old, they're the same. A forty nine and a fifty two year old,

00:17:40.320 | they're the same. But the reality is a seventy nine and an eighty two year old or a seventy eight

00:17:46.320 | and an eighty two year old are meaningfully different. And the reason is that because

00:17:51.760 | there is significant decline every year, every month, every day. And you're seeing the impact

00:17:58.400 | of every week, day and month and year as a president of the United States, where on an

00:18:02.080 | eighty two year old body. And I'm not sure any of us would do much better. But the reality is that

00:18:08.080 | when you're at that age, there's a level of transparency that's required and we have the

00:18:12.880 | opposite. So take Warren Buffett as the counterfactual to this. Warren Buffett is in his

00:18:18.000 | early 90s. But what does he do every year? He marches tens of thousands of people into Omaha.

00:18:26.160 | He sits them down. He sits at the front of a dais with Coca-Cola and peanut brittle and speaks for

00:18:34.720 | six to eight hours and is sharp as a tack. Well, the point is, if you decide after those six to

00:18:41.200 | eight hours of fully transparent, unedited interaction with Warren Buffett that you

00:18:45.760 | don't think he's capable of leading Berkshire, you can sell the stock. What they don't do

00:18:50.320 | is hide him behind the shadows, propping him out and package interviews and all of this other stuff

00:18:56.880 | that is un-American and undemocratic. And you see why, because the importance,

00:19:01.040 | as Friedberg said, is so high. You probably do have a lot of people outside the United States

00:19:06.800 | really questioning what is going on in the greatest country in the world right now,

00:19:10.720 | that this can even happen. And the people that you thought were so anti-Trump,

00:19:15.040 | right, that they would do anything to make sure that Donald Trump was unelected.

00:19:20.240 | Well, they're actually not that anti-Trump. They're just pro-power, because the thing that

00:19:26.960 | they care more about than their hatred of Donald Trump is their desire to stay in power.

00:19:32.000 | Yeah, I think these are all very well said, Frank Friedberg. Nicely done. I mean,

00:19:36.560 | how is anyone at this point in time surprised? Like, we have been talking about his cognitive

00:19:41.440 | ability for a couple of years here on this podcast. Everybody's been talking about it on

00:19:46.320 | Twitter. They've been talking about it on social media. Everybody's been talking about it at every

00:19:49.840 | Christmas, every Thanksgiving for a couple of years right now. And, you know, this long form

00:19:54.800 | discussion podcast test is the ultimate test. And I think people need to take that to heart.

00:19:59.920 | If you look at the long form podcast, and I'm just saying this to toot our own horn here,

00:20:04.640 | it could be Joe Rogan, it could be Tim Ferriss, it could be whoever you want, Lex Friedman. When you

00:20:10.240 | saw RFK, Vivek, Trump, Chris Christie, Dean Phillips come on this podcast, talk for, in some

00:20:15.680 | cases, two plus hours, it was clear they were there. And this is completely selfish on the part

00:20:21.680 | of Biden's family, the people around him to, you know, stay in power. And the hot swaps coming,

00:20:29.200 | I just I'm telling you right now, he is not going to be in this race in the next 30 days.

00:20:33.520 | Well, the hot the hot swap is going to create a free for all Jason.

00:20:36.320 | Which is better, better than running somebody who has a 30% chance of winning. And I'm going to take

00:20:42.240 | this a step further. This is 25th Amendment territory, this person is not fit to serve

00:20:48.800 | as president for the remaining of his term. What we saw last night was incredibly troubling.

00:20:55.760 | He was not there. And I've been saying this till I'm blue in the face for months. This is

00:21:02.160 | absolutely disgusting that they did this. This is elder abuse. I don't say that as a joke.

00:21:07.440 | I say this sincerely, I remember when my dad had to take the keys away from my grandfather,

00:21:11.760 | God rest his soul. My grandfather wanted to drive that car, you know, the streets of Brooklyn, his

00:21:17.200 | station wagon. My dad at some point said this guy keeps clipping other people's mirrors. We got to

00:21:22.080 | take the car away. So you know what my dad did? He went to my grandfather, God rest his soul. And he

00:21:27.120 | said, Listen, the car was stolen. And I'm sitting there as a seven year old next to my dad. And I'm

00:21:32.640 | like, wasn't stolen. And my dad said, You know what the car was stolen, pop, we can't afford a

00:21:37.200 | new car. I'll lend you my car once in a while. My dad then sold the car for 800 bucks and got out.

00:21:42.000 | That's what we need to do. You got to take the keys away from Biden. He's not fit to finish the

00:21:46.160 | rest of his term. Period, full stop. And I'm glad everybody else now sees what, you know, half of us

00:21:54.720 | saw for the last year. Well, look, who you're gonna believe the J cows, uninformed, non expert

00:22:05.360 | opinion or the expert medical opinion of Dr. Joe Biden with her doctor in education? Well, I mean,

00:22:13.760 | the bias is strong. When you see that clip. I mean, play the clip of Biden post. These guys

00:22:19.040 | are so deranged. These lunatics are so deranged. They thought they won last night. Here's a clip

00:22:24.640 | of Joe Biden. Telling Macbeth telling Biden he did good. Joe, you did such a great job. You

00:22:33.040 | answered every question. Let me ask the crowd. What did Trump do?

00:22:42.640 | You're not running. Joe Biden's not running. You're not running. This is a farce. And now

00:22:52.880 | the veil is so happy. He looks so happy in that moment getting that approval. I mean,

00:22:57.120 | give the man some milk and cookies. I mean, he was literally let the man retire to your

00:23:02.320 | point Chamath. Compassionate Chamath said a great like the guy had a lifetime of service,

00:23:07.280 | let the guy retire, let him spend time with his grandkids, great grandkids, whatever he's blessed

00:23:12.240 | with. And let's, let's do the hot swap. Now. It's incredible that not a single staff member

00:23:18.240 | has resigned. Isn't that incredible? Like, where they see this, Jason, and they have the moral

00:23:23.920 | clarity to say, hold on a second, this is really wrong. Not a single one. Yeah, that is really

00:23:29.520 | scary. It's a really good point. And actually, I thought, I thought one of Trump's best moments

00:23:34.400 | in the debate, a line that I hadn't heard him say before, is that Joe, you never fired anyone,

00:23:40.080 | you know, and he was specifically talking about the Afghanistan withdrawal. But just more

00:23:44.320 | generally, when have you ever fired anyone for getting anything wrong? Whereas I, Trump, fired

00:23:50.880 | Comey, I fired other people and I paid a political price for that. But at least I was willing to

00:23:54.400 | fire people who do a bad job. You're not. Well, now we know the reason for that is because the

00:23:59.360 | original Biden Biden is just the staff. So why would the staff ever fired themselves. And this

00:24:04.640 | is why it's actually important to have a leader at the top to have a commander in chief as opposed

00:24:09.360 | to just a shadow government consisting of party apparatchiks. And that's what we have is what the

00:24:15.280 | problem is, when the staff gets something wrong, there's no one there to fire them.

00:24:18.960 | How like how does somebody who's worked for Biden for 40 or 50 years, who sat in Camp David helping

00:24:25.040 | to do debate prep, at no point have the compassion to say, sir, this is not work, because that would

00:24:31.520 | be firing themselves, Chamath. No, no, I know. And it's a rhetorical question. I'm just saying,

00:24:36.800 | there's a more sinister reason. And I think sector pointing it out there, which is they consider

00:24:42.000 | Trump such an existential threat, and they want to maintain power that they're willing to do anything

00:24:47.200 | to keep power, you know. And, you know, listen, I don't want to get into Trump here, but he's got

00:24:52.640 | his own ways to stay in power himself. This was an embarrassment for America, this debate,

00:24:58.080 | the fact that these are the two candidates is a complete embarrassment.

00:25:00.560 | Well, I think the real embarrassment for the media was the fact that they were exposed.

00:25:06.960 | The fact of the matter is, for months, if not years, they've been saying that this candidate

00:25:10.800 | is fine. He is cognitively fit. In fact, he's the best he's ever been. I've had two hour lunches

00:25:15.920 | with him. He's wonderful. That's what they've been telling us. And the reason why their panic

00:25:20.800 | was so visceral last night, and all these postgame wrap-up shows is they saw their

00:25:25.840 | credibility going down the drain. They saw that they had been exposed. It wasn't just the fact

00:25:31.040 | that Biden was exposed. They were exposed for putting out this North Korea level propaganda

00:25:36.800 | for months and years. And everybody should understand these people were part of the cover

00:25:41.120 | up. It wasn't just the Biden team who wants to hold on to their jobs. It was the media,

00:25:45.360 | it was this entire Democratic Party apparatus. They're all in on this giant con.

00:25:50.960 | I wouldn't have a problem with this, Sax, if it was like Reagan, where they were like,

00:25:56.000 | God, he's got 18 months left, we're going to ride this thing out. And yeah, maybe we let him have a

00:26:01.280 | quiet thing. But to actually put them up for another four years is the issue here. If they

00:26:05.360 | just said, listen, we can 25th Amendment this guy or let him finish the last six months. That's

00:26:09.840 | one thing. But to say we want four more years of this? I mean, how much worse is it going to get?

00:26:15.200 | Hey, what's going to happen right now, I guarantee you is he's out, we're gonna have President

00:26:19.600 | Kamala, she's going to get her flowers for four months as she gets to be the first female president

00:26:24.080 | of the United States. Then she steps out of the way, she decides she's not going to run because

00:26:28.000 | she's got things to do with her family. And there will be two new people who will be moderates.

00:26:31.760 | And then the real election starts in about 15 days.

00:26:34.800 | I don't think you need to go into all of those mechanics to get the outcome of a new candidate.

00:26:40.640 | All Joe Biden has to do is go into the Democratic Convention and release the delegates.

00:26:46.080 | Yes, of course. Yes, technically.

00:26:47.840 | But the problem with releasing the delegates is I do think it creates a free for all,

00:26:51.920 | unless the party then exposes this next facet of their plan, which is that they are so

00:26:58.080 | in control that they only allow one candidate to go up there.

00:27:01.760 | Oh, they've already got that. Yeah, that's done.

00:27:04.080 | And then I think what happens is depending on who that person is,

00:27:06.960 | they'll either I think the Democratic Party is probably at risk of a pretty meaningful reset.

00:27:14.800 | And I think that these tactics I think are very much seen and understood by the American people.

00:27:21.760 | I think that people do not like this idea that you vote for person A, but instead you get persons B

00:27:27.440 | through Z. I don't think that's what anybody thinks the election for the president of the

00:27:30.880 | United States should be. It should be two people independently. And then when you see one person

00:27:35.280 | that's not really in a position to run faithfully, I actually think that Donald Trump last night

00:27:41.440 | showed tremendous restraint and compassion. I think that is the right way to deal with this

00:27:45.760 | situation. I think it's just acknowledging that President Biden is not altogether there.

00:27:51.040 | So without making claims of a cold or anything else, this is the security and the well-being

00:27:56.400 | and the economic prosperity of the most important country in the world. Why are we messing around?

00:28:02.400 | Let's just put it plainly. The Democratic Party is a collection of interests who wanna

00:28:06.480 | remain in power. The Democratic Party is the party of government. Its goal is to allocate

00:28:12.560 | money and power from the government to the collection of interests who back the Democratic

00:28:16.720 | Party. In other words, it's basically a collection of interests who wanna loot the republic.

00:28:22.080 | Well, obviously, no one's gonna vote for that. So they have to make it about something else.

00:28:25.600 | They choose a figurehead. They talk about how this is about saving democracy.

00:28:29.440 | They basically invent hoax after hoax, lie after lie to basically maintain their power.

00:28:34.000 | And I think what's happened is the mask has come off. The whole shell game has been revealed.

00:28:39.360 | It's obvious that Biden was always a puppet for these interests who are hiding behind him,

00:28:45.680 | and now it's all being exposed. - This also goes all the way back to 2016,

00:28:49.920 | because if you remember and you look at the real run-up into the 2016 primary,

00:28:57.040 | you have to remember President Obama sat Joe Biden down and said, "You cannot run."

00:29:01.360 | And the reason was to direct the Democratic Party and establishment and energy towards Hillary

00:29:08.880 | Clinton, who ultimately lost that election. There's a very important question here, which is,

00:29:12.880 | if Joe Biden had actually run in 2016, you may have actually had him beat Donald Trump in 2016,

00:29:19.120 | and he probably would have continued into 2020. This would be a totally different situation for

00:29:23.840 | the Democrats. So back to your point, David, all of these backroom shenanigans and negotiating and

00:29:29.280 | gerrymandering and politicking and power-broking is not how democracy should work. As messy as

00:29:35.600 | the Republicans are, I have to give ... I tip my hat to them. They run very straightforward,

00:29:43.360 | fair, visible, transparent face-offs between people. And you may not like the candidates,

00:29:49.440 | but the process is what it's supposed to be. Messy, turbulent, but you see all sides. Whereas

00:29:54.800 | this tends to be managed from the inside out. And I think that that is, as your point, being exposed,

00:29:59.680 | and I think that's what really has to stop within the Democrats. They need to open the floodgates.

00:30:04.160 | A Bobby Kennedy should have had the chance to run. Dean Phillips should have actually had the chance

00:30:09.840 | to run, but they were not, and they were prevented. And by the way, props to Dean Phillips,

00:30:14.240 | who, in a very respectful and compassionate way, was telling the truth from day one. And he was

00:30:20.080 | essentially censored. He was not allowed to basically tell you what he-

00:30:23.200 | Ostracize. Yeah.

00:30:24.640 | He told everybody what he observed in front of his face.

00:30:27.760 | Right. And if people had listened a year ago to Dean Phillips, then the voters in the Democratic

00:30:34.800 | primary could have made a different choice. They could have maybe replaced Joe Biden, but

00:30:39.680 | the party elders and the powers that be did not let that happen. And now they're in a panic a

00:30:45.280 | year later trying to do a hot swap, because it's manifest to everyone, to the American public, that

00:30:50.880 | Joe Biden is not fit to serve. But the real time to... Hold on, let me just speak to the hot swap

00:30:56.720 | for a second. The time to do the hot swap was a year ago, when Democratic primary voters could

00:31:02.560 | have voted for someone new. The problem you have now, Jay Kal, I actually think that on balance,

00:31:07.680 | the hot swap is not going to happen. Let me just tell you why. I think you make a really good

00:31:11.200 | argument for it. Nonetheless, the reason it's not going to happen is that Joe Biden and Jill Biden

00:31:18.240 | have come out this morning and said, "There's no way that he's stepping down. It was just one bad

00:31:22.640 | night. He's fit to serve." There is no mechanism to replace a nominee who's already won all the

00:31:28.960 | necessary primary votes without their consent. So if the Bidens are saying, "We're not stepping

00:31:34.640 | down," there's no mechanism to force them to step down. And that's the situation we're in right now.

00:31:39.360 | It's a very simple mechanism. He's going to capitulate, and you're going to have Obama.

00:31:45.040 | Obama's going to give him a call. I guarantee you, Obama's going to talk to him in the next 72 hours.

00:31:49.440 | Guarantee the hot swap happens. I'm absolutely willing to make a bet with you right now on it.

00:31:54.080 | Let me finish my point. They can pressure him, and that's what you're talking about is they're

00:31:58.240 | going to try and leverage him out. But the truth of the matter is that if they can't find the right

00:32:03.200 | leverage points, he does not have to step down. The right leverage point is very simple. He's not

00:32:07.200 | going to get any more donations. Last night, the Democrats who are donating all said, "No more

00:32:11.680 | money for Joe Biden." So he's going to have no oxygen. You need money to run these things.

00:32:15.360 | Just one other final problem with the hot swap theory is not only is there no mechanism to force

00:32:21.120 | Biden to do it, but I don't think there's a consensus right now on who the replacement

00:32:24.880 | would be. The fact of the matter is that Kamala Harris is next in line, and she polls even worse

00:32:30.480 | numbers than Biden does. So there's every reason to believe that she would do worse than Biden in

00:32:35.920 | the election. And I think it's not going to be easy to basically shiv her and push her aside.

00:32:40.880 | And so you can talk about Newsom, you can talk about Michelle Obama, you can talk about Hillary

00:32:45.280 | Clinton. The fact of the matter is that I think you're going to have a big Kamala problem. And

00:32:50.720 | because of that, there's no mechanism and there's no clear replacement. I think that although a lot

00:32:56.240 | of people are going to say what you said, Jake Al, about the hot swap being desirable, I think

00:33:00.800 | at the end of the day, on balance, probably not going to happen. Although certainly, I admit it

00:33:05.680 | could. I'll bet you $10,000 right now to whatever charity you want that Biden will not be the

00:33:09.840 | nominee. You could be right, but they've got to work out those two problems. They got to work out

00:33:16.000 | those two problems. I'm just offering you a $10,000 bet and I'm not giving you any on straight

00:33:20.080 | money. I would not bet a lot of money on this because I'm not sure. I'm just raising some

00:33:24.080 | problems with the hot swap theory. Okay, free bird. You have you've been a little bit silent

00:33:29.120 | here. You want to wrap us out so we can get to the next time I'll wrap us up. I think I'll read

00:33:32.320 | the final paragraph of the email I sent to the Democratic Party leader a few months ago. As a

00:33:37.280 | coda to this conversation. Here goes. The United States is facing a fiscal crisis, the likes of

00:33:42.400 | which the world only sees every few hundred years as world leading nation states overextend

00:33:46.480 | themselves take on unaddressable debt loads, increase social programming and eventually

00:33:50.880 | collapse under these conditions. The cost to service the interest alone on our federal debt

00:33:55.600 | is now greater than a trillion dollars per year. This already exceeds the discretionary defense

00:33:59.760 | budget. The debt service expense will only swell as interest rates are unlikely to decline back to

00:34:04.640 | 0%. And I do not subscribe to the easy to refute economic arguments of modern monetary theory.

00:34:11.440 | Simple arithmetic is all that's needed to discredit it. Furthermore, I can identify

00:34:15.040 | dozens of federal programs sponsored by Democrats that are not achieving their objectives. Yet we

00:34:20.320 | continue to fund them as if they were performing exactly as anticipated when originally conceived.

00:34:26.000 | Every federal program should be held to account for performance every year. If not,

00:34:30.880 | they should be defunded. Instead, I see the party pushing new programs that create new expense

00:34:36.160 | burdens without first addressing programs that simply aren't working. Accountability is a

00:34:40.640 | critical first step in reducing our federal deficit below 7% of GDP. I believe our nation

00:34:46.240 | is facing financial and the social peril. I urge the party to become the quote party of reason and

00:34:51.120 | results, put forward leaders that can lead hold government programs that aren't working to account,

00:34:56.320 | make sure that every dollar spent on social programming has a measurable impact. And if

00:34:59.520 | they fail to deliver results, cut them. The opportunity to be the party of reason and

00:35:03.120 | results is wide open. Myself and many of my friends would scramble for the opportunity

00:35:07.360 | to support that party. That's the end of my statement. And I think did you get a response?

00:35:12.880 | Then a month later, the handler said, so-and-so has this on their docket. They're going to call

00:35:18.000 | you. Never got a call. Of course. Yeah, because you're not a donor. They only care if you donate

00:35:23.200 | and you're not a donor. No, because I donated. I donated and I didn't get anything. All I asked

00:35:28.000 | for was a chance to sit down and talk to the president. I think we know why Biden didn't

00:35:30.320 | come on the podcast. I mean, he couldn't. The debate format, to your point, Freeberg, was like

00:35:35.280 | the easiest debate format ever. And the greatest thing, I think Dave Portnoy pointed this out on

00:35:40.800 | Twitter, like Trump's best strategy was to just let Biden talk, like, just get out of the way and

00:35:46.560 | let him talk. And there was one moment where he's like, I'm sorry. I mean, Trump was pretty graceful

00:35:51.200 | here, which is a big statement. He like at one point was like, I'm sorry, I don't understand

00:35:56.000 | what he just said. Like, I don't know how to respond to something. I don't understand what his

00:35:59.680 | point was. Hotswap's coming. And I am an undecided voter. I have a big announcement, Sax. I have a

00:36:06.240 | big announcement about my vote. You want to hear it? Yeah, let's hear it. Breaking news. I am not

00:36:12.160 | voting for Biden. I've eliminated Biden as possible. I was waiting to see what happened last night.

00:36:17.120 | So I knew that now I never was clear about that. I am also eliminated Trump. You've also eliminated

00:36:22.080 | Bobby Kennedy. So you have not eliminated Trump or Biden Kennedy. I said, I introduce you to Jill

00:36:26.640 | Stein, maybe Cornel West. Let's move forward. Let's move on. Here we go. Who's left? Bring

00:36:33.280 | anybody out. It can't be Weekend at Bernie's part two. I mean, the Weekend at Bernie's joke

00:36:37.440 | is real. I mean, it's cruel, and it's real. And my Lord, get it together. All right. There's a

00:36:43.920 | really interesting trend going on that I wanted to get everybody's thoughts on AI and corporate

00:36:50.320 | efficiency killing tech jobs. Let's pull up this chart. This somebody shared in our group chat from

00:36:55.600 | Fred. These are software developer job postings on indeed. From early 2020. That's pre COVID,

00:37:03.200 | obviously to this year, look at this. The number of job postings for developers has absolutely

00:37:11.840 | come crashing down by 80%. This is below pre COVID numbers. In addition to this, we talked about

00:37:18.960 | getting back to work, Penske and Dell saying you have to be back in the office starting this fall

00:37:24.240 | four days a week or resignation accepted. What are you seeing in your portfolios? Any thoughts on

00:37:31.440 | this trend of the major jobs, the high paying elite jobs, Chamath? Maybe going away? This is

00:37:39.600 | a trend we haven't seen in our lifetimes. There's always room for elites at elite companies. And now

00:37:45.360 | it seems the demand's gone. What's going on here? I just think that company formation has changed

00:37:52.240 | after the end of ZURP. And so I think that that chart speaks more to a couple things. One is that

00:37:56.960 | where typically, people were hiring for software engineering roles, which was a lot of SAS

00:38:03.040 | businesses contracted a lot. And the net new amount of SAS startups, also, I don't think

00:38:08.800 | materially increased. And so that was one big switch. Second is you went through a whole bunch

00:38:14.640 | of layoffs at the big cap tech companies as they reestablish profitability. I think when you layer

00:38:21.280 | those two things, that explains that chart more than the emergence of AI tools. Just practically,

00:38:27.600 | what I see is all of these AI tools can add a 10 or 15% lift to an individual person. If you are in

00:38:33.680 | a traditional organization, I don't think these things are the panacea that they're marketed as

00:38:38.880 | being. These are not creating 10x engineers. At some point, these tools will be good enough.

00:38:43.520 | And at some point, companies will get started from scratch that use those tools

00:38:49.280 | and create a level of productivity at one 10th of the workforce, but that hasn't happened yet.

00:38:55.280 | So I think that that chart is more about layoffs and contraction in tech more than anything else.

00:39:00.160 | Yeah. And just to explain this chart a little bit more in depth, the 100% number back in 2020,

00:39:06.080 | then boosts up to two and a half times that amount, and then comes back down to 60% of

00:39:11.840 | that amount. So it's an index, we don't actually have the raw numbers here of the number of

00:39:15.600 | developer jobs open or closed. Sax, your thoughts, what are you seeing in company formation to

00:39:20.000 | Chamath's point? And overall, what do you think this means for the American elite workforce,

00:39:26.000 | people with, you know, really high end degrees and really high end salary expectations?

00:39:31.200 | Well, I agree with Chamath, it's just too soon for AI to be responsible for this. I mean,

00:39:37.040 | the AI productivity gains are just starting, and we're not really seeing job elimination yet or

00:39:42.640 | job replacement. I think this is just a symptom of economic weakness. And the main reason for the

00:39:48.560 | economic weakness is the rate hike cycle. Remember, we went from practically 0% interest rates to five

00:39:56.720 | and a half percent in one year. And a lot of people were expecting that to cause a recession.

00:40:02.640 | That's normally what happens when you get a very, very rapid rate hike cycle is it sucks liquidity

00:40:08.720 | out of the economy, and it contracts economic activity and you get a recession. I was one of

00:40:13.280 | the people who thought that and that didn't happen. I think one of the reasons it didn't

00:40:16.640 | happen is there was a huge backlog of jobs of sort of open job postings. I think originally,

00:40:22.080 | it started at 12 million open jobs. Well, what's happened is the rise in interest rates has created

00:40:28.720 | some economic weakness, it's caused a reduction in liquidity and investment, it's created more

00:40:34.800 | pressure on companies to be profitable. And so all those things have cascaded through and what

00:40:39.600 | it's doing is it's burning off this job backlog. So we haven't necessarily seen unemployment yet,

00:40:44.960 | but we're seeing a reduction in the job postings. And I think that's what's going on. And I would

00:40:50.080 | just say that the economy may not be in recession yet, but I just think it's weak. And this is just

00:40:55.760 | one metric showing that. Freiburg, you're running a company now, you're doing hiring qualitatively,

00:41:01.200 | what you're seeing in terms of hiring from when you were running production board, you had many

00:41:05.200 | companies, people were fighting it out in the peak Zurp era, you know, and giving people incredible,

00:41:11.600 | incredible, you know, compensation packets and packages. And then you also had like sort of

00:41:16.880 | people trying to take talent and maybe talent hoarding was going on. It seems to have dramatically

00:41:22.480 | switched. We've been putting job postings out and seeing hundreds of people apply for jobs that we

00:41:27.360 | would get dozens previously. What are you seeing? What's the game on the field in terms of hiring?

00:41:31.680 | I'm not really, I don't really have a great perspective on this where we hire very specialized

00:41:36.400 | people at Ohalo. And in the special specialty field we're in, we're the best in the world.

00:41:41.120 | So everyone wants to work here. Got it.

00:41:43.680 | I'll answer your question, Jake. I mean, what I see from our portfolio companies is hiring

00:41:47.840 | has got easier. It is way higher, much easier to hire devs, right now software developers than

00:41:53.920 | two years ago, no question about it. Yeah. And I think globalization also

00:41:57.680 | having a big impact here. I honestly, my theory on this is that because there's not three competing

00:42:03.600 | offer sacks from big tech, when you're a startup, you know, trying to land somebody and you're like,

00:42:09.120 | we have to beat Uber or Airbnb or Coinbase, you know, like a mid market company, or the Google

00:42:14.400 | offer, the Apple offer, the Amazon offer, typically, like a developer would have those three

00:42:19.520 | sets of offers. Here's a startup that's willing to give you 1% of the equity. Here's a mid market

00:42:24.080 | company and Uber and Airbnb or Coinbase, that's offering you 300k. And then here's the like,

00:42:29.120 | incredible $500,000 offer from Amazon or Google, those offers just aren't there. So then it makes

00:42:35.760 | for the ability for startups to hire great talent. This is the best time possible to be a startup,

00:42:41.840 | the talent on the field is incredible. Open AI is considering a for profit,

00:42:45.680 | profit conversion. And that means possibly an IPO soon. According to reports, Sam Altman recently

00:42:52.560 | discussed this with major shareholders like maybe Microsoft, and it's possible OpenAI will become a

00:42:58.320 | for profit benefit corporation similar to Anthropic or XAI. If you don't know what a for profit

00:43:03.360 | benefit corporation is a benefit corporation or B Corp in the industry means you have a stated

00:43:09.440 | mission that the board is responsible for going after, you know, save the whales, provide AI

00:43:15.440 | software for all of humanity, whatever it is, in addition to the standard acting in the interest

00:43:21.120 | of all shareholders. And so this, of course, means OpenAI, which was valued at 86 billion

00:43:26.880 | could IPO at some point. What are your thoughts on this? We saw the revenue numbers are crushing it.

00:43:33.120 | Any thoughts Chamath on OpenAI IPO? Is that a possibility in your mind?

00:43:37.360 | I mean, it makes so much sense for them. So I think they should do it as quickly as possible.

00:43:42.480 | We are in the first inning of what should probably be an enormous tectonic shift in technology.

00:43:50.880 | And I think if anything, whoever wins in the first inning usually isn't the one that's winning by the

00:43:56.400 | ninth inning. And so I would encourage anybody that's winning right now to monetize, get secondaries,

00:44:02.480 | take money off the table as fast as possible, because the future is unknown. And the more

00:44:07.680 | disruptive the technology is, the more entropy there is, which means that there's going to be

00:44:11.840 | more changes, not less. And again, I would just look at search as an example, I would look at

00:44:15.840 | social networking as an example. When you look 20 years later, the people who captured all the value

00:44:20.640 | were not the ones at the beginning who everybody thought was going to win. And so I think if it

00:44:24.960 | plays out similarly, it's important for the people that are in the lead today to recognize it's too

00:44:29.760 | early, and they should monetize their perceived success as quickly as they can to the largest

00:44:36.000 | magnitude possible. In other words, you might be opening, you might be, you might be my space.

00:44:41.760 | Yeah, grab the bag if you can. Grab the bag. What is it called? Secure the bag. Sorry,

00:44:45.920 | secure the bag. Secure the bag, yes. What are your thoughts here? SACs on a potential IPO by

00:44:51.840 | Sam and the team at OpenAI and the impact that might have on the wider space?

00:44:55.280 | Well, for a long time on this show, I've been saying that you need to clean up that,

00:44:59.520 | you know, convoluted Byzantine corporate structure with all the line charts everywhere.

00:45:03.920 | That structure is what created all the problems with this nonprofit board that they had.

00:45:10.160 | You've got a for profit entity reporting to a nonprofit board. It created a culture clash,

00:45:15.760 | and as we've said before on the show, it's not a good idea for a startup to innovate on structure.

00:45:20.240 | Using a tried and true C-corp is the way to go. You're ready for IPO. If you ever get that far,

00:45:27.200 | you don't need to like restructure the company. It was always funky and weird

00:45:31.440 | that OpenAI had this nonprofit structure, and really, they should have fixed it years ago.

00:45:36.560 | And like I said, given Elon his equity, given Sam his CEO package, and they didn't do either

00:45:44.160 | one of those things, and so now they're left with this crazy org chart that's a mess.

00:45:49.280 | And I'm not even sure, I mean, I think you would want to clean it up as soon as you can,

00:45:54.320 | because I think my sense is that the longer you wait on these things, the harder it actually gets.

00:45:59.120 | Yeah, the more calcified these things get, yeah.

00:46:01.680 | I'm not sure how easy it is to actually fix this thing, but yes, they should fix it.

00:46:06.800 | They should make it a standard C-corp. They should make things right with Elon,

00:46:10.160 | because he provided the first 40 million of C-capital. They should make it right with Sam,

00:46:15.200 | he should get his CEO comp, and then they should IPO so that the public actually has the ability

00:46:21.760 | to invest in this AI wave and ride this wave the same way they did with the whole dot-com

00:46:28.720 | boom in the late '90s. I mean, a lot of those dot-com companies didn't work out,

00:46:32.720 | but some of them did. Amazon, Google, and so on. And the public had the opportunity to participate

00:46:37.920 | in that huge wave of innovation. And I think we'd go to something like that.

00:46:41.600 | We still need more public companies, right? Freeberg, you got a thought here

00:46:44.560 | before we go into superintelligence and Ilya's new company?

00:46:48.800 | I don't care if OpenAI's for-profit or non-profit affects a few people that put money in and the

00:46:53.680 | employees. It doesn't affect anyone else. Well, no, it will affect the public if they can buy

00:46:57.920 | shares and they get to participate. You could say that about any business, right?

00:47:00.960 | OpenAI is one of the leading companies of the AI wave.

00:47:07.200 | It is the leading company.

00:47:08.480 | It's the leading company.

00:47:09.760 | They apparently raised money in an $80 billion valuation. So one could also argue that a company

00:47:13.840 | doing $3 billion in revenue, getting an IPO done at $120 billion market cap,

00:47:17.760 | maybe the public already missed the big wave.

00:47:22.640 | Well, no, I don't think so. I mean, we saw a lot of these companies that you could have said that

00:47:26.480 | about NVIDIA and it basically went up 30x. Yeah, you could say that about any IPO. It

00:47:29.520 | could go up, it could go down. But anyway, there's a bunch of people who put money in

00:47:33.760 | who are going to make a lot of money if this thing gets to be for-profit.

00:47:36.240 | Yeah, but the trend line is it's doubling revenue, right, year over year. So, yeah.

00:47:40.240 | My argument is that it'd be good for OpenAI to clean up its Byzantine cap table and structure,

00:47:45.200 | and it would be good for the public to be able to have the opportunity to invest. So it's a

00:47:48.480 | win-win. I'm not saying they have to do it this minute. I mean, I think that it does take time

00:47:52.640 | to get your reporting to the level of maturity necessary to be a public company. And you don't

00:47:58.800 | want your earnings or your revenue, you don't want your numbers to be volatile.

00:48:02.560 | If you were an employee, Freeberg, and it went out at $120 billion,

00:48:06.160 | would you clear your position if you could? Would you sell half your position?

00:48:09.200 | I don't know enough. I don't know enough. I'm assuming most of those...

00:48:12.080 | Sak, Chamath, anybody want to play along here?

00:48:14.560 | Well, I've heard that they've had quite a bit of turnover because there's been pretty

00:48:17.440 | good secondary market activity, which means a lot of the employees have cashed out and

00:48:21.040 | they've made so much money, just like what's happening at NVIDIA now. There's very little

00:48:24.880 | upside relative to how much money you've already made. So at that point, a lot of

00:48:28.160 | the early people start to leave. Cash in your chips.

00:48:30.960 | Yeah. So they're trying to hire more people, it sounds like.

00:48:33.200 | I heard 70% of employees at NVIDIA are millionaires now. That's a crazy number. Go ahead, Sak.

00:48:39.040 | Well, I was going to say, that question that you asked is really a highly personal question

00:48:44.400 | because you could think that OpenAI is a great company that's going to be worth a trillion

00:48:48.240 | dollars in the future, but it still makes sense for you to take chips off the table because 100%

00:48:52.960 | of your net worth is in that one company. So...

00:48:56.640 | Well, let me ask it that way. You got 90% of your net worth in NVIDIA. I'm sorry, 90%

00:49:01.200 | of your net worth. You're a person at OpenAI sitting on $10 million in shares. Do you sell

00:49:07.040 | half or all? What would you do personally, Saks?

00:49:09.760 | I would take some chips off the table. I don't...

00:49:12.880 | Half? If you were first, if you're like, this is 90% of your net worth, 99% of your net worth.

00:49:17.200 | Well, I mean, you're an insider, so maybe you have a lot of information.

00:49:19.760 | If you were really bullish on the future of the company, maybe you take 10 or 20% of your

00:49:25.200 | chips off the table. If you're less bullish, maybe it is 50%. So, I don't know. I'd be

00:49:30.240 | influenced by my perspective on that, but I think that you could think it's the greatest

00:49:34.320 | company in the world and still, it would make sense for you to take some chips off the table

00:49:38.480 | because you don't want all your eggs in one basket. That's a personal diversification decision.

00:49:42.560 | And if it was $120 billion valuation with $3 million in revenue, Chamath,

00:49:47.520 | and you're trading a 40X or whatever it is times next year's revenue, let's assume they do $5

00:49:51.920 | billion next year, you're still looking at 30X revenue, you would clear?

00:49:55.840 | I think these multiples are not really what's going to drive their behavior. I think OpenAI

00:50:00.480 | is running a very strategic game plan to become part of the tech establishment as quickly as they

00:50:07.440 | can so that they are on the inside looking out as opposed to the outside looking in. They

00:50:13.920 | were able to add the former head of the NSA to their board of directors.

00:50:18.960 | Yeah, what was your take on that, by the way, Chamath? That was interesting. People got pretty-

00:50:22.880 | Well, it's how you become part of the establishment. I mean, do you think the

00:50:27.040 | former head of the NSA no longer has a security clearance or knows people in the NSA? No,

00:50:31.840 | of course not. And I think that there is a group of people that want to make sure that these kinds

00:50:40.000 | of technologies and capabilities are firmly within the hands of the United States apparatus and not

00:50:44.720 | anybody else. And so, I think that that pulls them closer to the kinds of folks that could

00:50:49.440 | otherwise give them a hard time or regulate them or et cetera, et cetera. So now what happens is

00:50:55.120 | when you have Senate hearings about this stuff, it's more likely that it's confidential behind

00:50:59.520 | closed doors, it's under the purview of national security. All these things are beneficial to

00:51:02.960 | OpenAI. And then secondly, they were able to get Elon to drop his lawsuit. Conveniently,

00:51:07.520 | I think it was like on the same day that the head of the NSA was added to the board of the

00:51:11.520 | former head of the NSA. So, the next logical step is now to create capital markets distribution,

00:51:17.280 | which is really about syndicating ownership of the company to all the big deep pools of money

00:51:23.600 | so that they are also rolling in the same direction in support of OpenAI. And so,

00:51:27.680 | that's what a lot of people don't get. It's not about valuations or this and that. This is about

00:51:31.760 | creating a high level game theory of how to create an international apparatus that supports your

00:51:38.480 | corporate objectives. There are a few companies that have done this well and they are now one of

00:51:44.160 | them. The only thing left is to get shares into the hands of the Black Rocks, the T-Rows, all the

00:51:51.280 | big mutual fund apparatuses of the world that then syndicate to all the individual investors of the

00:51:55.360 | world. And you have everything. You have government connections, you have no real legal overhang.

00:52:00.320 | Then the likelihood that an IRS agent all of a sudden decides to audit OpenAI is basically zero.

00:52:06.640 | Okay. So, to summarize, a bit cynical, but you're building an ally base that then makes

00:52:12.560 | it harder to investigate the company, criticize the company or anything like that, right? That's

00:52:17.360 | essentially what you're saying. I don't think it's cynical. It's like a smart business strategy.

00:52:20.880 | Strategy. What's your take on that, Sax? Well, yeah, they're borrowing their way

00:52:25.040 | into the deep state. Okay. I mean, the quid pro quo is we will be your vessel. We will be an arm

00:52:33.280 | of the intelligence community of the deep state. We'll give you access to whatever it is you're

00:52:39.200 | looking for. And in exchange, you're going to basically protect us and allow us to get rich.

00:52:44.640 | And frankly, that's the deal that all the big tech companies have made. They are all in bed

00:52:50.080 | with the intelligence community. And we saw this in the Twitter files, where every week for the

00:52:56.880 | year before the 2020 election, there were meetings between the trust and safety people, the censorship

00:53:02.240 | division of Twitter and the intelligence community. So these people are working arm in arm.

00:53:08.400 | And basically, the big tech companies have given themselves over in a way to this powerful

00:53:14.560 | apparatus, this, you know, the deep state in exchange for, you know, they're willing to

00:53:19.920 | basically give up power in exchange to be left unfettered to make their money. I think it's a

00:53:24.640 | horrible development for the civil liberties of the ordinary American. But I think that is the

00:53:30.560 | reality of what has transpired. Yeah, the number of CIA, former CIA, former FBI, Justice Department

00:53:37.520 | people working at the Googles, Facebook's metas apples of the world is like a very large number.

00:53:43.920 | I have family, as many of you know, in law enforcement and in the deep state, I guess,

00:53:48.960 | I should call it sex. And they are constantly asking me about job offers they have from these

00:53:56.160 | companies and should which one should they go to this is after they've done tours in Afghanistan,

00:54:00.480 | and, you know, speaking many different foreign languages, and then all of a sudden, they secure

00:54:05.120 | this incredible, you know, three x salary bump by working in big tech. So there is something to all

00:54:11.040 | of this. Ilya announced his new startup. Finally, it's called safe super intelligence, Inc, or SSI.

00:54:18.080 | He was obviously an open AI co founder, formerly the chief scientist and co head of super alignment.

00:54:25.120 | Last month, he announced he was resigning from open AI after a decade with the company.

00:54:29.600 | And you remember, he was on the board that helped orchestrate Sam Altman's firing. And then he

00:54:35.840 | reverse course a few days after and expressed regret in it. Everybody was asking where's Ilya

00:54:41.120 | doing all of this on Twitter. The co founders in SSI include Daniel gross, a YC partner,

00:54:47.360 | and Pioneer Labs co founder and open AI engineer Daniel Levy. company's goal right now is in the

00:54:53.440 | title develop a safe super intelligence. Here's what Ilya told Bloomberg the company is special

00:54:59.200 | in that its first product will be the safe super intelligence and it will not do anything else.

00:55:04.400 | Until then, Friedberg is this super intelligence, making safe super intelligence a great business

00:55:12.160 | model? Or is this something else? It's a little bit confusing to come into the market and compete

00:55:19.760 | with a throttle or a governor, I guess on your startup. At least that's what some people are

00:55:24.960 | discussing. So what are your guys? No idea. I don't know what these guys are doing. Have you

00:55:28.400 | guys looked at this company? I haven't seen anything. Well, I mean, we're just basing it

00:55:31.760 | on this question. Yeah. Okay. Okay, quick bounce pass to Zach. Zach. Yeah. Give us your opinion.

00:55:41.200 | The caveat what I'm about to say by by saying that I have not heard the pitch directly for this

00:55:47.120 | company, I've only read what you've read in the press, what they're trying to do is the safe,

00:55:52.400 | super intelligence. And I'm not bullish about that pitch. Because I think it, it makes the

00:55:58.960 | company a little bit schizophrenic. It's working at cross purposes with itself. On the one hand,

00:56:02.800 | you're a new company, which means you're behind, you've got to catch up with open AI,

00:56:06.960 | or Google, these other companies that now have been creating, you know, models for years.

00:56:13.360 | So you've got to move very fast. On the other hand, you're saying you're going to basically

00:56:17.680 | make this very safe. Well, to be frank, safety concerns are a brake pedal. They don't help you

00:56:22.400 | move faster. They make you move slower. Yes. And in fact, I think that this is the main reason why

00:56:29.920 | Sam Altman either kick these people out of the company or starve their resources until they left.

00:56:35.760 | Remember that when a bunch of these people left open AI, they said that, hey, we were originally

00:56:40.400 | promised 30% of the computing resources by Sam. And then he reneged on that promise and give us

00:56:45.920 | what we needed. So they all left. Well, I think that was, that wasn't by accident. I mean, I think

00:56:52.080 | that Sam wants to win, he wants to develop AI as quickly as possible, specifically AGI. And he had

00:56:58.640 | this group inside the company that frankly, was a lobby for moving slower. So now they have their

00:57:03.680 | own startup kicked out. Right. And so I don't but I don't think that's the recipe for winning.

00:57:09.600 | Because no, you're the guys who want to move slower. It'd be like taking the DEI group from

00:57:13.920 | Twitter and having them start a new Twitter. Well, I think that's a little bit harsh, because I do

00:57:18.240 | think that by all accounts, Carpathia is like a top top notch technologist. And he's one of the

00:57:26.240 | leaders in the space. Yeah, but I do think that he's going to be hamstrung by his own concerns

00:57:31.680 | about safety. And I think this is maybe that the tragic situation is, we're going to have this

00:57:38.000 | competition by all these different companies to advance AI and the companies that care about safety

00:57:45.040 | more than others are going to lose. And so you have this Darwinian effect going on where there's

00:57:49.920 | going to be a race to AGI. And I think that is genuinely a little bit scary for where this this

00:57:56.640 | all leads us. But I tend to think that it's not going to be solved by trying to impose the safety

00:58:02.800 | governor, as you said, I think maybe the best you can do is impose a truth governor. So you know,

00:58:08.640 | Elon says that we're going to make sure that our model at XAI, the grok model is scrupulously

00:58:14.160 | honest, it's not going to lie to you. And I think maybe that's the best you can do is is advance AI

00:58:21.200 | to be truthful. But when you start injecting these other safety concerns, I just think it slows you

00:58:26.800 | down and hamstrings you. I think the best way to hit truth is to cite your sources I have been

00:58:32.800 | putting into and I don't know if you have you played with four Oh, yet or Claude's new sonnet

00:58:37.120 | Jamaat. Yeah. Yeah, I mean, it is unbelievably good. If you put cite your sources, it's really

00:58:43.920 | starting to understand what you're asking for. I don't know if you've seen this, but I was asking

00:58:47.040 | it. Like I'm hiring some positions, give me the high low average of this position, give me five

00:58:52.480 | sources of information, put it in a table, and then average the high, low and median. And it

00:58:57.360 | came back to me sacks with an incredible thread, Jamal of this position, and then source glass door,

00:59:04.960 | you know, indeed, salary calm, whatever it was. And I was like, holy cow, this is an hour or two

00:59:12.320 | of research or work done instantly. There's an important insight here that I think people are

00:59:18.080 | missing, which is that foundational models are quickly becoming a consumer surplus. Every model

00:59:24.800 | is roughly the same, they keep getting better and better. But they're also approaching these

00:59:28.560 | asymptotic returns. And what do you do when something approaches an asymptotic return,

00:59:34.000 | you need to change a key underlying variable that you use to build these models. And it looks like

00:59:39.520 | one of those variables that people are looking at is how you basically take the internet,

00:59:43.440 | not as raw data, but then you actually kind of refine it and refine it some more, and then use

00:59:48.800 | that as the basis of learning. And what that does is it drives up model costs to a degree that are

00:59:55.520 | probably untenable for most companies, except but for a few. So I think it was Dario Amadei,

01:00:00.400 | the CEO of entropic, who said, the cost of a good functional model today is in the billions. But you

01:00:07.280 | know, by 2027, it could easily approach $100 billion. The problem that that represents for

01:00:14.560 | Ilya's company, and I wish him the best of luck, but the reality is there isn't $100 billion for

01:00:18.720 | him to have, Google will find it, Microsoft will find it, Facebook will find it, Amazon is coming

01:00:24.000 | out, open AI will probably find it, Amazon will find it. But I suspect that these other startups,

01:00:30.400 | there just isn't that much money going into AI because the returns don't justify it. So

01:00:34.400 | I think the bigger problem that you have is that it's becoming an arms race. It's not dissimilar

01:00:38.480 | actually to ride sharing. When people saw Uber's success, they thought, well, this is simple.

01:00:42.320 | And it was, but you had to subsidize losses for decades before that company was profitable. But

01:00:48.400 | meanwhile, you had to starve all of these other companies that were funded to compete with Uber

01:00:52.480 | until they ran out of money and died. I think that you could make a claim that the AI foundational

01:00:57.760 | model market will look similar to that. One startup can probably win, but there will be a

01:01:03.440 | bunch of open source alternatives. They're all asymptotically similar. And so it's an arms race

01:01:07.440 | on cost and compute. And I just don't see VCs having the temperament and the wherewithal to

01:01:12.240 | fund hundreds of billions of dollars into multiple companies to do that.

01:01:15.120 | Friberg, any thoughts on the latest models? Have you played with them? I'm curious.

01:01:20.800 | I have been having tremendous results. There seems like there is, I don't know,

01:01:25.040 | I don't want to say a step function, but man, it's a lot better right now.

01:01:28.400 | Have you used any of these models? And are you applying any of them inside of your company?

01:01:33.200 | We're using a lot more models. And we're seeing them be very practically applied at the edge. So

01:01:38.480 | you don't need to have large models running on a large compute cloud to get practical value. And

01:01:44.560 | this is definitely a big, a big point in the industry is that you're getting highly functional,

01:01:51.520 | application specific models that can be run in a more local environment on the edge. So they're

01:01:58.160 | not running the cloud on big compute clusters. And there's incredible applications in things like

01:02:03.920 | machine vision and control systems. You're going to ultimately see this being I don't know if you

01:02:08.560 | guys saw that Chinese dog, we never talked about this. China basically ripped off Boston Dynamics,

01:02:16.000 | or at least that's what it looks like. And they created this military dog, Nick,

01:02:19.200 | can you pull up the clip, and then they put machine guns on the back of the dogs back,

01:02:22.720 | the models are running locally in these devices. In fact, I think we're gonna have a few

01:02:27.120 | demonstrations of this at the at the island summit. So the robotic applications are pretty

01:02:32.640 | powerful. Machine vision applications are very powerful. And when you see this insane video from

01:02:37.520 | China, by the way, this is a totally different topic. You guys seen this? I have seen this.

01:02:41.760 | It's this thing goes autonomously into a building, and it can then find its target and eliminate its

01:02:47.040 | target with the machine gun on the back. Incredible. And you can see this becoming

01:02:51.920 | like, let's say they build a assembly line, and they put out 10 million 50 million of these things.

01:02:57.040 | And these things can now go run autonomously in the field. This is the dark side of small,

01:03:03.200 | highly performative application specific models running in an embedded way.

01:03:08.080 | Imagine those are amphibious. And they could travel against, they could travel across water

01:03:13.040 | and wind up in another destination. I don't know where would a beach invasion occur.

01:03:18.080 | Anyway, that was a very funky tangential aside.

01:03:20.240 | All right. We've talked about Microsoft and the bundling issues a number of times here.

01:03:24.720 | Thanks. You had a spicy take on this. Well, the EU just charged Microsoft with antitrust

01:03:29.520 | violations over how it bundles teams. They're quote unquote, slack killer into office. Here's

01:03:36.320 | a quick chart. Microsoft Teams obviously was bundled. Everybody has it automatically with

01:03:42.480 | office. You don't get a choice and they rocketed to 75 million members. 2022 slacks 12 million.

01:03:48.960 | You've obviously got a lot of thoughts here. I'm sure to as well.

01:03:54.240 | Come on, since you were the early investor in this. Looks like Salesforce just got a big win.

01:03:59.680 | Benioff gave some commentary on X Microsoft excels with bundling. It's not it's they're

01:04:05.040 | not so secret weapon for dominating new markets. We know the playbook office plus teams,

01:04:09.760 | Windows plus Explorer, Azure plus Visual Studio, 365 plus OneDrive and Xbox plus game Xbox plus game

01:04:17.840 | pass. Here's a clip of sacks discussing this on episode 113 of your all in podcast.

01:04:23.760 | If Microsoft can basically clone the sort of the breakthrough innovative product,

01:04:30.480 | you know, just to say they do one every year and then they put a crappy version of that

01:04:34.560 | bundle. Yeah. 10% or 50% worse, but they give it away effectively for free as part of the bundle.

01:04:41.120 | And then they basically pull the legs out from under that other companies. So it can't be a

01:04:45.280 | vibrant competitor. And then the next year they'll just raise the price of the bundle.

01:04:49.120 | Right. And they've done that with Slack. They've done that with Okta. They've done that with zoom.

01:04:54.080 | Can we have a vibrant tech ecosystem, at least in b2b software, if Microsoft can just keep doing

01:05:00.080 | that indefinitely? All right, sacks, you heard your quote there. I'm guessing you're not shocked

01:05:04.960 | by this action. Well, I think the EU made the right decision here. They basically sided with

01:05:10.800 | Salesforce who made the complaint and said that Microsoft was engaged in illegal bundling.

01:05:17.760 | By combining Microsoft office and teams. And the reality is Microsoft office is a product that every

01:05:24.640 | company has to have every, certainly every enterprise has to have. And by bundling,

01:05:30.960 | it means that that enterprise receives the team's product for free until of course the price of the

01:05:37.040 | bundle goes up the next year, which it has just about every single year. So what that does is

01:05:43.280 | when that enterprise is evaluating the choice of do we use teams or do we use Slack or for example,

01:05:49.760 | glue or some other tool teams on the margin appears to be free. Whereas Slack is something

01:05:56.880 | you have to pay for seats. And I think that is, that is illegal bundling. You know, when you have

01:06:02.400 | a monopoly in one product and you systematically use it to keep adding new products that again,

01:06:08.240 | on the margins appear to be free because you've bundled them. And I think the EU has done the

01:06:13.280 | right thing here, which is push to end the bundling. Every single product needs to have

01:06:17.280 | its own a la carte pricing. And when you add together the a la carte prices, it should equal

01:06:23.520 | the price of the bundle. So in other words, you don't get anything on the margin for free.

01:06:27.760 | The customer needs to have the discretion to choose what it wants. If we don't do that,

01:06:32.480 | I do think that Microsoft will use the power of the bundle to systematically dominate enterprise

01:06:38.960 | software. And they won't take on everybody at once. But like I said, they'll every year,

01:06:43.280 | they'll add a new product to the bundle.

01:06:45.680 | Chamath what's the what's the middle ground here between the interest of consumers,

01:06:50.400 | which is, hey, I'm getting free, a free version of Slack.

01:06:54.320 | It's not free, it appears to be free on the margins, because it's not part of the bundle.

01:06:58.480 | But then they raise the price of the bundle the next year.

01:07:00.720 | Correct. They boil the frog. So

01:07:02.800 | so once they killed, once they pulled the legs out, pull the rug out from under their competition,

01:07:07.920 | yes, that competitor is no longer viable. Now they can raise the price of the bundle.

01:07:12.080 | Okay. And so it's kind of like dumping in a way. I mean, this is a very old antitrust argument.

01:07:16.720 | When you would dump product in the market to kill a competitor, or you would price under your cost

01:07:21.280 | to kill a competitor, right?

01:07:22.560 | Yeah, you dump to basically drive a competitor out of business, because there's large

01:07:27.280 | cost of entry, there's large capex required to create a new competitor.

01:07:31.360 | And, and this is this is basically what they're doing is they appear to give you

01:07:36.400 | they appear to give you the the Slack clone or whatever, for free. But then once they

01:07:43.040 | pulled the rug out, they'll increase the price of the bundle.

01:07:46.240 | Chamath what's the balance here between say, I don't know, Apple giving away a free note

01:07:52.240 | pay note taking app or a free journaling app to consumers and hey, consumers get this benefit

01:07:57.200 | of free product versus the bundling concept here with, hey, we'll give it to you for free,

01:08:03.600 | but eventually we're gonna boil the frog. What's your thought of how to adjudicate this,

01:08:08.560 | or to execute on it? Microsoft's interest of consumers.

01:08:11.840 | Microsoft has been bundling to bundling products to kill competitors for 40 years.

01:08:17.280 | The the 10 years that they didn't do it was the 10 years when Steve Ballmer was in charge,

01:08:24.160 | during which there was a legal document between Microsoft and the Justice Department,

01:08:28.640 | a consent decree that prevented them from doing it. That consent decree came to be because of

01:08:35.120 | this exact strategy. And the most famous example that was the tail end of that process was when

01:08:40.080 | they used Internet Explorer and they bundled it with Microsoft Windows and they killed Netscape.

01:08:45.040 | Right? So there's umpteen examples of this. So I think that they've gone back to their

01:08:52.560 | old playbook. It's a playbook that you have to remember the executives that run Microsoft have

01:08:56.880 | been there for 30 and 40 years. They know this play and they know that it works and

01:09:00.800 | they've been rewarded incredibly handsomely by the public markets. So they're gonna keep doing it.

01:09:05.440 | Would Slack have sold to Salesforce? Now, look, I'm not complaining. It was a $27 billion acquisition.

01:09:11.440 | But the question is, if it were allowed to compete feature for feature,

01:09:17.280 | could it have beat teams? Possibly. Would the board have made, and I was on the board of Slack,

01:09:22.880 | a decision to have tried? Possibly. But none of those options were on the table.

01:09:28.560 | Because when you see a product, it doesn't matter how inferior it is, get bundled in,

01:09:32.800 | it's kind of DOA. And then you're on a melting iceberg. And so you have to make a very quick

01:09:37.600 | decision to preserve enterprise value. So I think what this comes down to is the FTC and the DOJ

01:09:43.040 | need to dust off that old consent decree, read it, and figure out whether this makes sense again.

01:09:49.840 | It seems like folks in the EU have more recently read that consent decree than American regulators

01:09:56.400 | have. Look, what we've said all along is that the right approach to antitrust is to stop

01:10:00.560 | anti-competitive tactics. Bundling is at the top of the list. Instead, what they've stopped is all

01:10:05.440 | M&A, which is actually bad for the ecosystem, because you deny risk, capital, or reward.

01:10:11.680 | And you need that reward in order to induce the next stage of risk taking.

01:10:15.680 | So again, I think this was a good decision by the EU regulators and the competition authorities in

01:10:21.440 | the US should actually be looking to this. Again, it's a better approach than stifling M&A.

01:10:26.160 | You are so right on this. We're so aligned. If you look at, I've been talking to a lot of LPs,

01:10:30.800 | and in talking to them, they're looking at corporate credit and P&E deals because they

01:10:39.120 | can get a return on those. And then they're looking at venture, and they're saying, "Hey,

01:10:42.640 | why is there no M&A occurring? Where's our DPI? Can you guys sell some of these companies?"

01:10:46.480 | It's like, "Yeah, we can't sell them because Lena Kahn's going to scuttle this M&A."

01:10:52.160 | And what that means is, in a very real way, we have dollars being taken out of innovation in

01:11:00.240 | early stage and being put into privatizing SaaS companies, whatever, real estate deals.

01:11:06.800 | And this is really dangerous for America. We really need more of this.

01:11:11.120 | I'll make one last wrap on this topic. I'll take the other side of bundling.

01:11:16.640 | Oh, here we go.

01:11:18.160 | I think ultimately, if bundling benefits the consumer or the customer from improved prices,

01:11:24.800 | I don't buy the antitrust arguments on a lot of these cases. I don't think that you're keeping

01:11:29.600 | competitive solutions in the market if the benefit of the lower cost product

01:11:35.680 | is actually there for the consumer or the customer. Supermarkets, for example, do this.

01:11:40.080 | So there's a lot of products in the supermarket, like peanut butter, milk, eggs,

01:11:43.440 | that have historically been big loss leaders because they get people in the store.

01:11:46.800 | Once they get in the store...

01:11:47.440 | They're not monopolies.

01:11:48.640 | They're effectively...

01:11:49.360 | Peanut butter's not a monopoly.

01:11:50.320 | Bundling. Monopoly in what way?

01:11:52.000 | The supermarket's not a monopoly.

01:11:52.480 | It's fine to bundle commodities, but when a product is a monopoly, and every enterprise must have it...

01:11:57.040 | Commodities have finite shelf lives. So you're talking about one week.

01:12:01.040 | And Teams is not a monopoly.

01:12:03.200 | Microsoft Office is.

01:12:03.680 | When you install it, if Microsoft Office is and 365 is, you can't rip it out.

01:12:08.480 | You can't rip it out.

01:12:08.880 | There are other options. You have options. There's plenty of options.

01:12:12.240 | You have options, but not...

01:12:12.560 | And the whole benefit of SaaS is that you can switch all the time.

01:12:14.160 | Those options are on market power.

01:12:15.520 | Of course they do. I can switch to Google Docs and save money.

01:12:19.120 | Microsoft Office is standard.

01:12:19.920 | It's standard in what?

01:12:20.880 | In the enterprise market.

01:12:21.520 | I don't have to buy it. I don't have to buy enterprise seat licenses for Office.

01:12:24.320 | I can buy Google Docs.

01:12:25.600 | SMBs think that way, but enterprises have to have Office.

01:12:29.120 | Enterprises don't think that way.

01:12:30.800 | Yeah, I mean...

01:12:31.200 | They have every option to.

01:12:32.640 | Google's competing effectively in the Office space against Microsoft Office.

01:12:35.600 | Yeah, but you have to look as the duopoly.

01:12:37.040 | Zoom is competing effectively against Teams.

01:12:39.040 | Like none of these businesses have a monopoly.

01:12:40.000 | Zoom's had the legs kicked out from under it.

01:12:41.920 | Yeah, Zoom, I would argue, is getting demolished.

01:12:44.080 | Slack just stopped growing.

01:12:45.600 | Look, once they put Teams in the bundle, Slack stopped growing.

01:12:48.160 | What's the monopolistic lock-in?

01:12:49.760 | The amazing thing about SaaS is that there's no switching cost.

01:12:52.560 | There's no switching cost. What?

01:12:54.000 | I don't think we're debating that.

01:12:56.240 | I think what we're debating is the sales practice where Microsoft says,

01:12:58.960 | "Well, you need Office, you need Windows, and you need 365.

01:13:04.160 | Or, sorry, Active Directory.

01:13:05.920 | Well, if you'd like all of these things,

01:13:07.360 | we're going to give you this product for free as well,

01:13:10.240 | and they're going to be tightly integrated."

01:13:11.840 | Then when you go to Slack, you have to pay more.

01:13:15.280 | And then you think to yourself, "Well, how do I go back to my CFO and say,

01:13:18.320 | 'I need an extra $1.2 million a year for this enterprise license to Slack'?"

01:13:22.960 | And then people say, "Well..."

01:13:23.840 | That's my point.

01:13:24.560 | You're saving money if you stick with Microsoft.

01:13:26.320 | They're giving you a discount.

01:13:27.680 | Because once they kill Slack, they'll just raise the price of the bundle.

01:13:30.960 | That's the point.

01:13:32.080 | That's a theory.

01:13:32.720 | And if that's true, that should be prosecuted.

01:13:34.800 | I don't think that the idea of a bundle...

01:13:36.320 | Which applies under the Microsoft Internet Explorer action.

01:13:40.960 | But that's the violating action.

01:13:42.560 | That's my point.

01:13:43.120 | Why can't you just make Microsoft...

01:13:45.440 | The idea of having a bundle should not be a violating action.

01:13:48.000 | No.

01:13:48.320 | All Microsoft has to do is they've got a price of the bundle.

01:13:51.920 | Allocate that price across all the components of the bundle

01:13:55.440 | so people can buy each product a la carte.

01:13:57.520 | That's all.

01:13:58.320 | They can still sell a bundled offering.

01:14:02.160 | If at the end of the day, that sum is cheaper than you buying

01:14:05.600 | the alternative a la carte from third-party vendors,

01:14:08.080 | that is a great deal for you as a customer.

01:14:10.400 | It can be cheaper.

01:14:11.360 | But the point is...

01:14:12.160 | What we're talking about here is proactively keeping competition.

01:14:15.680 | And I think that creates a good competitive dynamic.

01:14:18.240 | But maybe I'm thinking two first principles on this.

01:14:20.640 | I think you're missing something here, Preebh,

01:14:22.320 | which is what happens then when, let's just say Slack,

01:14:24.640 | there wasn't a suitor for Slack.

01:14:26.000 | Okay, let's take the internet browser example

01:14:28.960 | because I think it's better.

01:14:29.840 | If you didn't have a multi-hundred-billion-dollar company

01:14:33.200 | prop up a product because they just felt like it,

01:14:35.520 | i.e. Chrome and Google,

01:14:36.880 | you would have had Microsoft run away

01:14:39.120 | with the core interface for the internet.

01:14:41.200 | We don't know how that would have turned out.

01:14:43.040 | So by luck, we've had some modicum of consumer choice,

01:14:47.200 | but it's not as if Firefox did well.

01:14:48.880 | Firefox went to basically irrelevancy.

01:14:51.280 | Netscape went to zero.

01:14:52.640 | So there are examples where when Microsoft has done this,

01:14:55.200 | they can starve the market of choice

01:14:56.800 | over long periods of time.

01:14:58.240 | And I think if you're, hold on, hold on a second.

01:15:00.320 | So if your whole point is,

01:15:02.480 | well, let's just bet on the largesse

01:15:04.640 | of other large companies, that's a bad bet.

01:15:07.280 | But I will show you multiple counterexamples.

01:15:09.280 | Google Meet does not dominate market share.

01:15:11.520 | Again, you're talking about the largesse.

01:15:13.280 | You're talking about the largesse of companies.

01:15:14.800 | You're talking not about competitive practices.

01:15:17.040 | Find me venture-funded people,

01:15:19.680 | risk-taking people who need a return on investment.

01:15:21.760 | Google is the worst example.

01:15:23.280 | They have the most indiscriminate forms of spending.

01:15:26.560 | I'm not saying that they shouldn't be allowed to.

01:15:28.480 | - I'm sorry, I'm giving you a counterexample

01:15:30.080 | to the point about bundling.

01:15:31.120 | - No, that's not a counterexample.

01:15:32.640 | - Or they have Google Wave

01:15:34.080 | or any of these other nonsense products that didn't work.

01:15:36.160 | You know, I'm not calling Google Meet a nonsense product.

01:15:38.400 | - The point of a healthy product environment and market

01:15:41.840 | is not that one incumbent and another incumbent

01:15:45.200 | can create their own crappy versions.

01:15:46.880 | It's that you could theoretically have an open market

01:15:50.800 | where somebody can be funded with nominal amounts of capital

01:15:53.360 | and compete effectively.

01:15:54.720 | That isn't possible in many markets and software

01:15:57.200 | because of these kinds of strategies.

01:15:59.200 | So what you're reduced to are these huge companies

01:16:02.720 | with this product sprawl.

01:16:04.720 | I don't think those are good products.

01:16:06.640 | And I think we're lying to ourselves to say that they are.

01:16:09.280 | Google Meet is a terrible product, okay?

01:16:11.840 | - Brutal.

01:16:12.080 | - So whatever they're competing with

01:16:13.840 | is a terrible alternative.

01:16:15.200 | - That's my point.

01:16:16.400 | And they've lost market share.

01:16:17.840 | They have not won market share by bundling.

01:16:19.600 | - And if you try to find a real competitor

01:16:22.080 | to build an alternative to it,

01:16:24.000 | they're not able to get funded

01:16:26.320 | because the venture investor says,

01:16:27.760 | "No, I can't."

01:16:28.880 | And that's the market power that stifles competition.

01:16:32.320 | That's what this is about.

01:16:34.000 | - And if you, as an entrepreneur,

01:16:36.720 | come up with a much better product than Google Meet,

01:16:39.680 | a VC will say, "Wow, we can go

01:16:41.360 | and blow up the side of the hull of that ship."

01:16:42.880 | - I totally disagree with you.

01:16:44.000 | - "Let's go after it."

01:16:44.480 | - I don't think there's a single person.

01:16:46.320 | - Microsoft bought Skype how many years ago

01:16:48.720 | for eight and a half billion dollars

01:16:49.760 | and then Zoom came around.

01:16:50.640 | - If left unchecked, Microsoft will, I mean,

01:16:53.280 | Zoom is a standalone, unbundled product.

01:16:55.280 | And they totally dominated the market

01:16:57.280 | while everyone else has been doing bundling.

01:16:58.880 | - The bottom line is, if left unchecked,

01:17:01.760 | you will see people abuse this.

01:17:03.840 | It is not a big ass to have a la carte pricing

01:17:07.520 | and that will make the playing field much, much more competitive.

01:17:11.120 | - The Zoom example is a terrible one.

01:17:13.120 | And the reason is that P&L would have a hole

01:17:16.400 | blown on the side of it

01:17:17.520 | if they did not have 90% of their R&D and OPEX in China.

01:17:21.200 | So, but for the grace of God and Eric's strategic thinking,

01:17:24.800 | they were able to survive.

01:17:26.320 | But that is a perfect example of a company

01:17:28.080 | that would absolutely not have existed

01:17:30.240 | had they not had a labor arbitrage.

01:17:32.080 | That is not the basis of a competitive and fair market.

01:17:35.600 | And you cannot expect people going off

01:17:37.920 | to all four corners of the world

01:17:40.000 | and trying to do all these gymnastics

01:17:42.720 | to viably compete against the Microsoft and a Google.

01:17:45.680 | - I would argue--

01:17:46.240 | - That is not what-- - Figma, Adobe.

01:17:47.920 | Adobe has a bundling solution.

01:17:50.080 | If you guys have ever tried to sign up for Adobe

01:17:52.240 | or end your subscription, it's nearly impossible.

01:17:54.320 | - Yeah, they just had action taken against them for that.

01:17:56.400 | - They've got these insane practices.

01:17:58.240 | They make you buy everything to get access to one thing.

01:18:00.560 | - Well, look what they did. - And then Figma comes along

01:18:02.320 | and Figma kills the market.

01:18:04.480 | They come in and they're like, "We're a better product."

01:18:06.720 | Better markets do win even with bundling.

01:18:09.200 | That's my argument.

01:18:10.000 | - I think the interesting thing with Adobe

01:18:12.000 | is that they have a product suite

01:18:13.600 | that's used in a narrow field.

01:18:14.960 | I think what Saxe is saying is,

01:18:16.160 | Adobe is about a sort of vertical system of record.

01:18:19.840 | I think what the thing about Microsoft,

01:18:21.600 | and you could probably say about Google is, but less so,

01:18:24.080 | but definitely for Microsoft,

01:18:25.280 | is they are these very horizontal,

01:18:27.520 | broad, amorphous systems of record

01:18:29.920 | that you cannot easily replace.

01:18:31.840 | There aren't people running around

01:18:33.360 | building nine of the 19 things

01:18:35.840 | that Microsoft gives you in the bundle.

01:18:37.520 | That's the problem.

01:18:38.480 | - Okay, well-- - The debate continues.

01:18:40.400 | - Furthermore, I mean, on this very show,

01:18:42.560 | we are arguing that the Figma acquisition

01:18:44.640 | should go through because it created

01:18:46.480 | a new market for web designers,

01:18:48.400 | whereas Photoshop was basically for graphic designers.

01:18:53.680 | - No, but Saxe, it doesn't compete with Photoshop.

01:18:55.360 | It competes with some of their other design programs,

01:18:57.200 | but that's, anyway.

01:18:58.800 | - All right, we're not gonna settle it here.

01:19:00.240 | - I think there's a difference

01:19:00.960 | between a bundle and a suite.

01:19:02.160 | Suites are okay.

01:19:03.040 | Bundling, when you already have a monopoly

01:19:05.600 | in the relevant part of the bundle, that's the problem.

01:19:07.520 | - Bundling is when you take a wrench

01:19:08.800 | and a can of peanut butter and put them together,

01:19:10.560 | and you're like, "Here, you're gonna take them both."

01:19:12.080 | You're like, "Well, I only need the wrench."

01:19:13.680 | "Well, you're gonna take the peanut butter."

01:19:14.880 | And they're like, "Well, I already have peanut butter,

01:19:16.240 | "so I don't need to buy new peanut butter."

01:19:17.360 | - I mean, we saw this in the cable providers

01:19:19.520 | and DirecTV as well.

01:19:20.880 | You know, just, you can't-- - It only works

01:19:22.400 | if you're a monopoly. - Not pay for ESPN

01:19:24.080 | even if you don't like sports.

01:19:25.360 | All right, listen, another amazing episode

01:19:27.680 | for compassionate Chamath, satire Saxe,

01:19:32.400 | and the frank-- - Satire Saxe

01:19:34.000 | wants to say one more thing.

01:19:35.360 | - I just have a perfect wrap up--

01:19:36.800 | - Please. - Okay, satire Saxe,

01:19:38.080 | go ahead, what's your-- - Well, I wanna--

01:19:39.760 | - Continue the gloating, here we go, satire Saxe.

01:19:41.760 | - No, let's put this tweet by Joe Biden, President Biden.

01:19:45.360 | - Oh, God, it's the elder abuse.

01:19:47.840 | - No, I wanna compliment Joe Biden on continuing to fight.

01:19:53.200 | You keep fighting, Joe.

01:19:54.960 | Do not let the media get you down.

01:19:58.240 | One bad night is not a reason to get out of the race.

01:20:01.600 | All these people stabbing you in the back,

01:20:04.560 | they're basically ingrates and backstabbers.

01:20:06.720 | You're doing just fine.

01:20:08.240 | - All right, and from candid Calacanis--

01:20:10.640 | - Who? - And from candid Calacanis

01:20:12.400 | to the Democratic Party, desgraciad, your disgrace,

01:20:16.000 | what you did to the American people

01:20:17.360 | with this rope and dope is ridiculous.

01:20:19.200 | - Desgraciad. - 20, desgraciad!

01:20:22.720 | 25th Amendment, get this guy out of office,

01:20:25.200 | President Kamala, hot swap it, Dean Phillips, let's go.

01:20:29.840 | We'll see you all next time on the "All In" podcast.

01:20:34.320 | - We are back. - Love you, boys.

01:20:35.680 | (upbeat music)

01:20:37.280 | - We'll let your winners ride.

01:20:38.640 | - Rain Man David Sachs.

01:20:41.520 | ♪ I'm going all in ♪

01:20:44.560 | - And it said, we open sourced it to the fans

01:20:46.800 | and they've just gone crazy with it.

01:20:48.640 | - Love you, Wesley. - The queen of quinoa.

01:20:50.560 | ♪ I'm going all in ♪

01:20:52.160 | ♪ Let your winners ride ♪

01:20:53.520 | ♪ Let your winners ride ♪

01:20:54.960 | ♪ Let your winners ride ♪

01:20:57.440 | - Besties are gone.

01:20:58.560 | (laughing)

01:21:00.080 | - That is my dog taking a notice in your driveway, Sachs.

01:21:02.640 | (laughing)

01:21:04.960 | - Oh, man.

01:21:05.840 | - My avatars will meet me at--

01:21:07.840 | - We should all just get a room

01:21:08.960 | and just have one big huge orgy

01:21:10.560 | 'cause they're all just useless.

01:21:11.760 | It's like this like sexual tension

01:21:13.280 | that they just need to release somehow.

01:21:14.720 | (upbeat music)

01:21:15.920 | - What are the beat, what are the beat?

01:21:18.720 | - What are the beat, what are the beat?

01:21:21.120 | - We need to get merch.

01:21:22.000 | - Besties are back.

01:21:22.720 | ♪ I'm going all in ♪

01:21:24.480 | (upbeat music)

01:21:30.560 | ♪ I'm going all in ♪

01:21:33.760 | you

01:21:34.260 | [BLANK_AUDIO]

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