E8: TikTok + Oracle, how privacy loss will impact society, economy & COVID outlooks for 2021

Hey everybody, hey everybody, welcome to another episode of All In, the podcast. Episode 8, besties are here to talk about tech, economy, politics, the election, and our lives in Silicon Valley. Welcome back to the pod, David Friedberg, the Queen of Kinhwa is here from an undisclosed location. Thanks, J.

Kel, always a joy. Yes. Undisclosed location somewhere in the Midwest. You bailed on SF after the smoke. You lasted how many days into the barbecue, into the orange cloud? I left on the Wednesday of the orange cloud and took, it was crazy, took my kiddos and we're waiting out the fires in the Midwest.

Well, it's beautiful the last two days here. Also from an undisclosed bestie location, David Sachs back on the program. Rain Man is here. Yep. Definitely here. Good to see you. All right. Well, there you go. A man of many words. And speaking of a man of many words, hot off of seven keynotes this week, talking about SPACs, the Prince of SPACs, Chamath Palihapitiya back on the pod.

How are you, besties? Well, we had a little bestie reunion, which I think we can talk about. Chamath invited us over to have an outdoor bestie reunion. Yeah. And you gave one of them gonorrhea and you gave the other two. Well, it's crazy to say, but I literally had to call Chamath two or three days after he hosted.

Ah, a socially, by the way, a socially distanced dinner outdoors. Socially distanced dinner outdoors. Wonderful. We had some great ribeye. Fantastic. Cracked open a nice bottle or two of wine and the port. But then what did you do? Well, then a family member of mine, who shall remain nameless, decided to go to a party in San Francisco and possibly got the Rona.

And he tested positive. And then I had to get everybody in my house tested twice. Everybody came back negative, but I had to call Chamath and tell him, listen, I wasn't exposed, but some members of my family were. Therefore, I might have secondhand exposure. I took two tests, came back negative two times in a row.

Can I just say, though, it's really crazy. Like, we have to, like, develop all these new social norms and you're not sure what to say and you're not sure how to react. And it's like, it must have been like when, you know, you got a call and it's like, hey, listen, you know, your girlfriend's like, I may be pregnant or like, you know, somebody's like, hey, listen, I have an STD.

Like, you're just like, what is going on here? I felt like that when I was texting the group chat. It was like three of us and I had to text my tail between my legs. I think I've been exposed. I'm really sorry, guys. I think Calcanus is the Greek word for a turd in the punch bowl.

You know, it's all. Yeah, exactly. I don't know if we can tell the Code 13 story. Oh, I'm going to tell the Code 13 story. I wasn't even there, but I. The Code 13 story is legendary. Jason Calcanus gets invited by David Sachs out of his benevolence to come to stay in Hawaii at the Four Seasons.

And at somewhere, some point during this week-long vacation, Christmas Day, you hear a shout from the pool from the lifeguard. Well, no, no, it was even before that. We were sitting at the bar. So me and Jason and his brother-in-law were sitting at the bar having drinks. And all of a sudden, there was a commotion and the bartenders and the staff.

And we started hearing people on walkie-talkie saying, Code 13, Code 13. People are running. People are running. We don't know what to make of that. We think it's a terrorist attack. I mean, literally, the Four Seasons is on a high alert. Alarms are going off. And then we hear, okay, well, we were like, we said to the bartender, well, what's a Code 13?

And he's like, well, it means that some kid, you know, crapped in the pool. Did a number two in the pool. And we're like, you know, and then we're like, okay, well, you know. It was Jason's kid. Well, then I started hearing something about like the Sachs kids. And I'm like, oh, no.

Sachs, Code 13. Yes. They thought it was us. And then it turns out it was Jacob's kid. And we were never able to get a reservation for Four Seasons again. Well, what's so funny is like, I went there at one point a few years later. And it's a whole ordeal because they said, so how do you guys deal with like, you know, a Code 13?

They're like, oh, Code 13. You have to evacuate the whole hotel. Half the island gets sent away. Here's what had to happen. This is on, just to put the Code 13 in perspective. I think my 10-year-old at the time was two years old. My sister-in-law takes the baby in the pool without telling anybody.

And the baby's not wearing a swim diaper. And so... Basically, a Snickers bar floats out of the... And there's a Snickers bar in the pool. And you guys have kids. You know how big these things can get. You're like, how is that possible? You know, like a movie theater-sized Snicker.

A king-sized Snicker pool is floating in the middle of the pool. But this is on December 25th. These poor people are spending $3,000 a night. There is not a single-chaise lounge by the pool that's not occupied. It is peak capacity at the... Four Seasons Hotel on the Big Island or wherever it was.

The pool has to be shut down for four hours. The person has to get in with a hazmat suit, retrieve the Snickers bar. King-sized Snickers has to get out of the pool. Then they have to throw in every chemical known to man. So much so that the pool is ruined for Christmas Day.

And that's the Code 13 story. All right, getting back to our topics. TikTok is on the verge of being banned from additional U.S. downloads. The Commerce Department has announced that it will ban U.S. downloads and business transactions with TikTok and WeChat. Somehow WeChat got pulled into this on Sunday.

This will... Seemingly, we're going to allow TikTok to operate until November 12th. So they got a little bit of a stay of execution. But of course, if they can't update in the App Store, that means there could be any security vulnerabilities that get found between now and then. Would not be able to be updated.

And Steve Mucin... Mucin? Steve Mucin is attempting to push through a TikTok deal that will enable retaining some Chinese ownership. And there's some sort of agreement now with Oracle. We'll have some kind of an oversight board to do continuous third party audits. What does this say, Chamath, about where we're at?

And do you believe that, you know, a Democratic leader, let's say Obama or Biden, would have taken the same approach? Here? Does it worry you that the government's getting this involved? Or is this inspiring that the government's putting their foot down and saying, hey, listen, we're going to need to have some basic level of reciprocity from China if we're going to allow you in our App Store?

You know, I think it's kind of like, you know, like if you've ever been driving someplace with your significant other and they're like, turn left. And you're like, no, no, no, I'm going to turn right. And then you realize you should have turned left. But then you keep turning right a few more times.

Then you take a couple more lefts. But then you end up at the same place. But it was complete shit, dumb luck. I feel like we're going to end up in the same place here with TikTok, which is that I think that the Trump administration probably is doing this.

And Donald Trump specifically probably does this more as a demonstration of power and, you know, American exceptionalism, which I'm not sure is the right reason to do it. But I think the outcome is right, which is that, you know, for years, China has essentially been shut out to American companies.

And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think it's because it's not just the Trump administration that's doing this. It's the Chinese government that's doing this. And I think that's why it's happening. And I think that's why it's happening.

And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think it's because it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening.

And I think it's because it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening.

And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening.

And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think that's why it's happening. And I think... You got to stop right there, Sachs. You got to stop right there, Sachs. Yeah. Yeah. Actually, an individual's data could absolutely be compromised if they have access to your passwords because through the clipboard, they have access to your phone roll.

If a young person had photos that were, say, compromising in their photo roll, the phone is basically given access to that. They upload that. Now you could use that as compromise against a senator's child or against a senator themselves. And this seems like an abstract thing. But this is exactly what it is.

Exactly. Exactly. Exactly. Exactly. Exactly. What the Chinese and Russians have been doing for a very long time, if you've seen the series of the Americans and you go back to the 80s, to see the weaponization of somebody who was in the closet who was gay during that time or somebody who was having an extramarital affair, you could compromise anybody with just sexual compromise.

And you hear we're giving access to hundreds of millions of people's photo libraries and their clipboards. By the way, you just said something that's really scary, which is like, if you're the Chinese and they have the patience to play the long game. You just aggregate and collect this thing for 30 years on the off chance that one of these people becomes important.

I mean, what is the real cost? And you got a mentoring candidate. You just surveil 300 million Americans and just say, you know what, we'll take our shot. I mean, it's going to cost us a few billion dollars a year in storage. Who cares? Yeah. I'm not like, is there really a case that what they're doing in the TikTok app, I don't know how much you guys have read some of the studies on what they are actually pulling.

But is there really a case that what they're pulling is actually a case that they're pulling? I mean, I think the way that they're pulling is particularly different than what would be pulled by pretty much any other social app or photo sharing app on your phone. There was some kind of insight that, hey, they were capturing the Mac address, but that was up until last November.

After November, the app kind of refreshed and stopped doing that. And it was a hack that some number of apps out there were already doing. But my understanding is the way that they've built the app, it's the same kind of ad tracking type approach that a lot of apps are taking.

I think it's interesting. I think it's interesting. I think it's interesting. I think it's interesting. I think it's interesting. I think it's interesting. I think it's interesting. Because we haven't caught them doing something nefarious, that they aren't actually doing something nefarious right now. If you look at what MBS did to Jeff Bezos sending that, I guess it was a movie file or an image that then wound up hacking his WeChat and his phone.

I think they've built the software. I think it's purpose built, whether it's WeChat or TikTok, to have these back doors. There's no way the Chinese government is not influencing that. Guys, look, if you had to bet, David, what do you think? The odds are between zero and 100, with 100 being absolute certainty, that there are foreign national spies that work at Google, Facebook, Amazon, Microsoft.

That's my point. I mean, look, I think that there are. No, no, but do you think it's 100%? Oh, of course it's 100. Yeah. I think at every one of them, it's probably 100%. Yeah, at least one foreign national that has a connection to intelligence in China. Yeah, it's probably 100%.

100%. So my point is TikTok is 100% Chinese. So we don't even have to guess whether it's. My point is, if there is some access to personal data that we're all concerned about being compromised at literally every other fucking app company, we're exposed. Yeah, but every other app company is not connected to.

But the point that Chamath just made is that they very well could be. The fact is, we as individuals have exposed all of our personal and private data to six or seven companies. I think you're saying the really right thing. I think that this is a canary in the coal mine for a bigger issue.

This is why I'm saying I think that Trump is probably acting out of an expression of power. But I think what we're realizing is actually this is about core fundamental privacy and the safety and security of each of us as individuals. And it should start a bigger conversation. Like privacy, I really do think this privacy is the killer feature of the 2020s.

Right. You know what David just said about like, you know, if you're. If you're a Chinese ex-national, the idea that you're like, look, I've been a citizen of three countries. The idea that the Sri Lankan government all of a sudden may not like what I have to say and can spy on me or, you know, root my phone or steal my data.

It really disturbs me. Like, I'm sorry, but no, go fuck yourself. Like I left that country for a reason. Yeah. So I think I think the Republican to watch on this is well, besides Trump, I guess, is there's a Senator Josh Hawley who is. Crazy. Well, he's he's sort of a critic of big tech.

And I think he's got some interesting things to say. But but in this particular area, he is proposing legislation to regulate the types of information that can be collected by applications that are based in countries that are fundamentally hostile or adversarial to the US. And that to me seems like the right policy because, you know, it's not just about TikTok.

It's about all the apps that collect information. It's about all the apps that collect information on Americans that can be appropriated by, you know, the Chinese Communist Party or Russia or Iran, places like that. And so I think we need a more holistic policy here than just banning TikTok.

And it may not be necessary to ban TikTok if you had the right limitations placed on them. But but I but I but I do think this this this whole sort of compromise solution with Larry Ellison and Oracle, that makes no sense to me. This idea that, you know, Ellison will own.

Twenty. Twenty percent of the company, but nothing else really changes. It'll still be based in China. A Chinese company will still be Chinese engineers based in China who, you know, and they still own 80 percent of it. I mean, how does that really address the data security issue? Don't you think, David, that that's just basically a way of just it's a wealth transfer to Larry Ellison, which I think is amazing.

I mean, if I could totally do it. Yeah, it's bite dance. It's it's it's it's it's it's bite dance. Put it in your lap. Yeah, no, it's it's bite dance. It's bite dance. Paying political. Protection money to Larry Ellison to be their bodyguard in this political process. But and I but that's why I don't think it's going to fly.

I mean, Holly has already said that it's not good enough for him. And so even if I think and it doesn't live up to Trump stated criteria, even though he seems to be. Is this ultimately a CFIUS ruling sacks? Is that who's going to make the final call on this?

Or does Trump have sole executive kind of authority on on foreign security on security grounds to kind of block it? Does it go to CFIUS? No, that's a good question. I think CFIUS disapproves M&A, right? It has to. It has to approve it. Yeah. I mean, so you're right.

I mean, there are there are members of Congress that are all going to need to be convinced to get this thing done. Well, but CFIUS approves M&A. I didn't think they could like block applications. As of last year, as of last year, every investment triggers CFIUS. It's it's a weird new thing that happened.

I was involved in a company recently. Yeah, but that seems secondary to the national security power that. That Trump may have. So this is almost like a two tier kind of thing. One is to approve one is for it to, you know, for Trump to be cool with it.

National security terms. And then second is the antitrust issues. If we just go back a second talking about the broad, you know, as Chamath called it, kind of this canary in a coal mine. You know, I don't know how many of you guys use an Amazon Echo or a Google Home or Amazon Fire TV or Nest thermostat.

Every every single every single one of them has ambient audio listening on it. Every single one of them even. And another thing people don't realize is every speaker is actually a microphone as well as a speaker. You can actually listen on any house speaker, whether it's a Sonos device or what have you.

And so we've got, you know, our homes are already wired. Amazon Fire TV runs on fucking Android. I mean, there is 100 ways into your home as it is. It seems to me like there's a significant concern about how much data we are already exposing that's being highlighted here.

I don't think that there's you know, it's sort of like playing where you try and pop the hamsters in the game. It's like at some point we're going to realize these things are here everywhere and it's not just a company, but it is how we are living our lives now and how technology is kind of capturing every piece of information about everything we do.

This is this is I go back to this. Somebody will take this or many people will take this and run with it. But I think that there is an enormous amount of money that consumers will pay for. The. Assurance of anonymity and privacy. I don't really know how it's expressed, David, but like, you know, for example, like if I could get a phone that was completely locked down and encrypted and.

Like a burner phone is what you're talking about, and a lot of people are now doing this. They take a second phone, they put a VP VPNs of the of the first step. And I and you're like, I try to be very popular. Well, like I try to use signal.

I try to use FaceTime. Audio. I'll even use WhatsApp now just because these things are end to end encrypted. And I have nothing particularly important or interesting to say or hide. But I just don't like the idea that in the in the open wild, I'm just I just feel very vulnerable to data breaches more than any other kind of breach.

I mean, I had this conversation with somebody that was, you know, sort of helping me lock down my Wi-Fi network, you know, and for a long time I only had one endpoint and all of a sudden he's. Like, look, let's have a home and a guest. But in that conversation, what he was saying is the biggest form of theft isn't like burglaries anymore.

It's basically people just having packet sniffer's outside your house because they can get access to everything and anything. And can I ask you, can I ask you a question? There's a there's a book by a guy named Stephen Baxter is a science fiction book from years ago and Arthur Clark called The Light of Other Days.

And these guys developed a wormhole technology. They could put it in any house and they could. See and listen to everything. And suddenly the technology became kind of ubiquitous so everyone could create a wormhole anywhere and see and hear everything so effectively information was completely transferable and free and available to everyone.

And the book kind of highlights how society changed in that context. So in a world where you see where everyone is and what everyone is doing and saying, there's no longer any notion of information asymmetry and the way people operate and behave changes because so much of our life is dependent on people not knowing things about us that we know.

So when you're when you're employed. You're going to go interview for another job and they tell you they're going to the dentist. You can say like, hey, that's not true. And the guy says, you know what? I'm actually thinking about looking for another job because I hate working for you.

You suck. So everyone starts changing kind of how they behave. Do you think that 50 years from now, that's where the world heads? Do you really think it's possible to stop this train in its tracks and not end up in a world of what I would call kind of like hyper transparency where all information becomes kind of because it's already being collected everywhere about everyone and it's only I think it's rising exponentially.

People are going to. Start. I think that people are going to start turning their homes into like those skiffs, you know, sensitive compartmented information facilities. You always hear about like senators going into the skiff kind of situation for private stuff. I think like people are going to start taking this very seriously as they get compromised, you know, time after time and embarrassing.

And you can see with Apple making it their marketing strategy. Apple's you don't you don't you don't think society changes? Oh, I think it's already changed already with like people getting their phones hacked and their, you know, news. I think people are now normalize that. I think it makes the world a much shittier place because it basically robs us of our own independence and our fundamental right to privacy.

And I just think that's a really bad outcome. And so you know what? Like if like the need for likes and tweets and followers leads me to a place where I lose privacy, I would just say shut them all down now. Because I think that people's self-worth is much bigger than what they understand it to be if they're willing to make that trade off.

But most people appreciate that. Well, I would also I would also just add that just because there's more transparency doesn't mean that it serves the interests of truth. Like Jason said earlier, this information can be used to create, you know, ops, you know, and manipulate. And, you know, it's and so.

Yeah, I don't you know, like like Trotsky said, just because you're not interested in war doesn't mean war isn't interested in you. I mean, this data can be collected to run operations on people that don't serve the interests of greater transparency or the truth. I think I think people don't think from first principles on this topic.

This is sort of like the the idiotic orthodoxy of Silicon Valley, which is like they they wrap themselves in the flag of transparency like it means something, but they have no real idea what it really means at scale and at the level of transparency. And so I think that's the thing that's really important.

And I think that's the thing that's really important. And I think that's the thing that's really important. And I think that's the thing that's really important. And I think that's the thing that's really important. And I think that's the thing that's really important. And I think that's the thing that's really important.

There's just an article in, was it Foreign Policy, saying that we need to go back to lockdowns. And I think Biden's said that we need to have lockdowns again. And his policy would be to listen to the experts, but all these experts, again, were wrong about so many things.

And so, again, I think this idea of permanent lockdowns. If that is the alternative to Trump, will help Trump win. And so you don't think that this Woodward book and that kind of stuff plays into the election or the debates in the coming weeks? I think it's sort of priced into the stock.

I mean, look, if it weren't for COVID, I think that if you go back to like January, February, when Trump gave that State of the Union speech, his ratings were the highest they had been. The economy was on fire. It looked like he was on cruise control. And then COVID happened and his ratings went down to their lowest point.

And so I think he already paid the price for the, let's call it, inconsistent leadership that Woodward described. So I think that's priced in. And now the question is if the economy gets good enough, fast enough, and the other side is on the side of lockdowns and Trump is on the side of reopening.

I mean, that's a big question. I think the question is, you know, if the economy gets good enough, fast enough, and then the other side is on the side of lockdowns and Trump is on the side of reopening, then the other side is on the side of reopening. And I think that's a big question.

I think that's a big question. I think that's a big question. I think that's a big question. And I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question.

I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question. I think that's a big question.

I think it's great. Is that annoying or is it inspiring? I think it's great. I think it's growing the market. It's good for entrepreneurs. It's amazing. I mean, this is going to mean that companies with 50 to 150 million will be able to go public on a clear path?

I hope so. I've said this before. We've gone from 8,000 public companies to 4,000 in 20 years. So let's reverse the tide. Let's go back to 8,000. It should be double the number of companies, right? I mean, we should have gone down. We should have gone up. You would think we would have gone up.

In a world with 0% interest rates, it has to. Yeah. Yeah. All right. So here we go. Please, for the love of God, somebody convince Calm, Robinhood, Thumbtack, and DataStax to go public because I've got kids to put through school. All right, everybody. For Bestie C, the Rain Man himself, David Sachs, and the Queen of Quinoa, Fried Burgers, this is the All In Podcast.

We'll see you next time. Bye-bye.

E8: TikTok + Oracle, how privacy loss will impact society, economy & COVID outlooks for 2021

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