Hey, everybody, welcome to the all in podcast. I'm your moderator for the week Dave Friedberg Not the world's greatest moderator. This show is gonna be a bit of a shortened version at the back end of the pod today We actually are gonna show some Q&A from Jason's launch summit, which he held in Napa Valley this week great event Thanks for having us up there Jkal, thanks for coming great speakers great content and we did a live Q&A For the all-in pod with the audience there which will transition to about halfway through through the show today Jkal, thanks for your hospitality.

Oh, yeah. Thanks for having me the fun birthday party the poker night We had a great time. I still don't know what I was doing there. You were meeting some of your LPs It was like a dog and pony show Jkal was using us as some sort of dog and pony show to raise money Zach did you really have LPs there that you would never met?

No. Yes Hold on a second. I had one LP there who I have definitely met many times before Okay, she told us she'd never met you she wanted an introduction So maybe she's getting into the spirit of all-in and joking with you But you had a three-hour meeting with one of your LPs as I heard she talked about Yeah, she said she had like two or three hours with you mother you with us today.

What's going on? You there buddy? Chamath is very drunk. By the way, he brought up his own wine. He started margaritas at 2 o'clock He was drunk by the time we got there. What? He showed up He was day drinking margaritas in the Sun Oh, and then we showed up and he was like falling asleep by the time we were done with the stage You know, by the way politics is one of these incredible things where you see the meanest people come out of the woodwork when you Even feign support for somebody that they don't support now that it's out there that sax and I are doing this fundraiser for RFK Oh, yeah, if you look at Twitter some of like the the Democratic surrogates are out just Smacking me and sax around and it's incredible These people are like the biggest imposter loser clowns They've never literally done anything in their whole life and then they show up and then they just like how dare you work and help Build a company.

How dare you help build another company? How dare you help now fund other companies? I am a talking mouthpiece who's never done anything except work in one administration as a speechwriter and now I think you guys suck balls It's like give me a break. Mm-hmm So you are you a little kind of emotional about that today?

I love actually I love critiques actually because I think like you can learn a lot from critiques, but then when mids just spew I Just get annoyed. I think mids should not be allowed to talk. Yeah. Well, that's just my thought there goes half the internet sex Are your Republican?

cohort friends Upset about you hosting a fundraiser for RFK. I've got none of that. None of that That's interesting. What's your take on that? Yeah, do Republicans generally think that it's a good thing if our a kid jr Gets the Democratic nomination because he will be easily beatable. I don't think they're thinking that way.

I think that there's a respect For RFK jr. Among many Republicans because he's speaking out on issues that they care about like I've talked about he's denouncing censorship he's in favor of free speech is in favor of civil liberties and You know not the this massive surveillance state. He's speaking out in favor of peace instead of war.

He's speaking out on the border He had this amazing video. That was great a couple of days ago where he went to the border in Yuma, Arizona At 2 a.m. In the morning And he shows he shows where the border wall ends and where the border wall ends the line Begins and people from all over the world are just entering Through this hole in the wall in a never-ending stream of people and then they get loaded onto buses Provided by the government and then they get handed it a ticket to supposedly appear in court to resolve their case in three or four years And they're never heard from again and they're dispersed all over the country What I don't understand is if the federal government can get its act together enough to provide buses Why can't they get their act together enough to plug the hole in the wall?

It's absurd This is like an act of sabotage against the United States. And so he's there just pointing this out I've never seen anything like this before It was interesting as a as a Democrat to do this because that's typically kind of a Republican Point right and some of the commentary made about RFK jr I think it was in the New York Times this week or someone that covered his candidacy one of the big media companies Highlighted how much of his agenda seems to be a Republican talking point agenda.

Does that sound accurate? Even most people in the country who identify as Democrats would be against having an open border That's what we're talking about when there's a hole in the wall and people can just start forming a line and then once they get through The line, right? They're literally just hold on.

They're basically distributed throughout the country on buses I don't think most people in the country even Democrats would support that But what he's violating here is the press blackout on what's really going on at the border So you're right. Like the only you went there. Yeah, but other Republican talking points.

So the points around the vaccine Republican well, he's expressed obviously concerns about vaccines preceding the kovat vaccine I don't know whether he's right about that or not I'm not willing to say whether he's right or wrong about that because I just don't know enough I think he's definitely right about the inefficacy of the kovat vaccine We've talked about this before even Bill Gates admits now that the vaccine doesn't work It's too short acting and it doesn't hold up against very it's not a vaccine.

Let's just You from getting the illness. It's a death reduction shot. It was a revenue grab by big pharma plastered with Non-scientific thinking from a bunch of people who should have known better Wow I think you just got our so much Is just the truth hold on what you must have said is just like the factual reality and and You can't get that from the mainstream media.

Like there's no Re-evaluation. There's no appraisal. They control what we see in here It's like prov to level in terms of the propaganda and that's why I think RFK jr. Is so interesting is because he is Blowing up what the mainstream media wants to control the really interesting thing about him going to the border I agree with sax is hey let's just have a discussion about this and look at the actual facts on the ground that we can agree on and What he actually did was he pierced the veil of like this is an issue about a certain group of people He was there and there are people from Afghanistan China all over the world coming in He made the point that this isn't just about one country and that these people are suffering and that I thought was like another really Important highlight these people are being trafficked They're you know being abused at the border and that it's gonna cost us 10 million a mile to secure the border It's a really great talking about it and he's done this with Ukraine as well where he emphasizes the humanitarian aspect of it Yes, and talking about it and I think Republicans should adopt some of that He rhetoric and to Chamath's point.

I think it's it is. I think it's a money grab Chamath I do think it lowered death rates But you know, I do think piercing the veil on this and none of us are still getting boosted because we know they don't I'm not debating vaccines and politics. We're moving on.

We're gonna talk about crypto. So this week the SEC. There we go. Serious action against Binance and coinbase You know pretty significant pretty loud SEC filed 13 charges against finance entities and the founders CC charges include operating unregistered securities exchanges broker dealers and clearing agencies misrepresenting their trading controls and their oversight on the Binance US platform and the unregistered offer and sale of Securities the next day.

They sought a temporary restraining order to freeze finances US assets and Then on Tuesday the SEC sued coinbase over their exchange and their staking programs stock dropped 12% the SEC said that The company was operating an unregistered exchange and broker and that 13 of their assets listed on their platform were considered crypto asset securities Brian Armstrong Obviously has been on the pod several times Said he's not shutting down his staking service and said regarding the SEC complaint against us today We're proud to represent the industry in court to finally get some clarity around crypto rules He's generally made the statement that he has tried multiple times to register with the SEC They have not had a mechanism for him to register.

They have tried to do everything by the book and that the SEC approved their IPO filing knowing full well the details of their business and their operating model and Still allowed them to go public on a US securities exchange Despite full knowledge about their business. Chamath does anything change this week based on the SEC's action or is this just a continuation of You know crypto has been Rolled back and will continue to roll back here in the US Or is this something new and a new action and opens up a new front on the the government versus crypto?

It's a good question. I think there's two ways to look at this one is The conspiracy theorist way which you see a lot of on Twitter which is this idea that crypto is making all of these inroads as a replacement mechanism for Fiat currency and so governments are really now invested in trying to shut it down.

I think that's Largely untrue and then there's the more simple basic reality Which is that there was one part of the SEC That frankly didn't do the job that they were supposed to by either allowing a few of these crypto companies or crypto businesses To go public either a standalone businesses or as part of other businesses.

So Coinbase Robin Hood, etc And then there's this part of the enforcement action after this FTX fiasco, which is a lot of CYA Covering your ass by the SEC Especially because it looked like they had some cozy relationships with them And so they're coming down hard and they're going to go and systematically dismantle The largest actors and they're going to go through the value chain.

So I think the obvious place that they're looking now or The exchanges they'll look at the custodial services they will not approve any ETFs and then eventually I do think it trickles into all of the staking services and Eventually, I think it'll touch the venture community and all of those firms and funds that had a huge robust business in staking These crypto projects in order to get coins like founding coins and then being able to sell them J.

Kel I mean, I've been talking about this since the beginning because I bought Bitcoin and wrote about Bitcoin when it was maybe 25 cents and then again when it was a hundred So I've been following this for a long time. And I think Thinking from first principles to stepping back for a moment You know what we do in technology is fundamentally disruptive If it's at its best if it's truly gonna be important in the world and when you hear that word disruption, you kind of file it as a buzzword, but what it really means at its core is like Competition and it's not just competition disruption when you say disruption you're talking about existential competition two people go in the ring one person comes out like Somebody's gonna get really fucked up.

And if you people keep bringing up, oh, you're an investor in uber. They broke the rules They bent the rules Uber was going against caps. Airbnb was going against like hotels. We work was going against like long-term real estate leases When you look at all those Disruptive technologies and what they did at their core.

They disrupted on behalf of consumers and Lowered prices increased choice, etc. When you get crypto The crypto crowd literally said we are going to replace fiat currency fiat currency Is the government and so my thesis from the beginning was if the government has a way to stop this They do not want to be disrupted.

What what is a government at its core? It's a military It's a bunch of rules laws and it's money that's the kind of pillars of any government's power we knew the government wasn't gonna give this up and You know, they they after round and found out but the truth is the and this is where I have some sympathy for the crypto People not the people who are just committing crime with the whole way and just dumping these bags on retail, etc But we do want to have this innovation here There are some innovative aspects to it, but Gary Gensler said listen, you already have electronic money.

It's called money in the United States We already have these services. You don't need this consumers don't need it And you have to understand the SEC's function in the world to understand why they're taking this action Their function is to protect investors Investors lost a bunch of money. Therefore they are going to retroactively inflict pain and hold people accountable for Their mandate which is to protect investors.

You could have easily resolved this the SEC and The companies could resolve this the companies could have followed these things as securities and only allowed accredited investors top 5% of the country People will make over 200k a year. They didn't do that. They said anybody can buy these Well, that's just not how it works in America and it should change I think everybody should be able to buy any security they want in America Just like anybody can go play blackjack and the easiest solution for this just passed in Congress this week And we'll go to the Senate and be a lawsuit I think allowing every American the other 94% to take a test and become accredited if that happens You take a test just like you take a driver's license test.

I know what diversification is I know how risky these are once you take that 50 Question test you become accredited and then you can buy these coins if you want to and that's really the easiest path to resolution here So we don't have Brian Armstrong move his company to the Middle East or you know an island in the Caribbean Which is what he's gonna do I predict so, okay.

Well look we've seen This bill make its way I think through is it going to the Senate next or is it going to the Senate? Yeah, go to the Senate. So let's see if it gets done. I think it's a it's a good point one thing. I'll point out when Individual investors were making money Because all of these asset values were inflating all of the coins were growing and were climbing in value everyone felt good There was an emergent cry that we all want to have access to these new instruments we all have a right to make these investments and to own these assets and then as the asset values declined and Individual investors began losing money the emergent cry is where was the government to help save and protect us?

And so the SEC I would argue was probably a little bit hindered when the market was inflating in being able to step in and take action because that would have been Counter to the cries of the retail market But as the retail market took their their hits The SEC has to step in and Congress steps in and everyone starts to say it's time to act We should have acted sooner and this was a you know, fairly predictable.

I think what's happening is more nefarious than that so The SEC is doing two different things. They're alleging two different kinds of Crimes one set has to do with protecting investors from having their funds Stolen on these exchanges or at least commingled FTX did that right where they basically took customer deposits and stole them What finance is accused of is taking customer deposits?

Maybe not stealing them but commingling them with company funds that should be looked at and I think Crypto customers should be protected against that. However the case against coinbase. They're alleging a completely different set of facts, which is Effectively what Gensler and the SEC are saying is that it is not legal to operate a crypto exchange in the United States That is what the SEC is saying Because coinbase has basically done everything right and I believe that Gensler is far exceeding his authority and stating something like that It is not up to the chairman of the SEC to say that Americans should not be holding crypto Why as a free people should we not be able to buy crypto if we want to?

You know, why shouldn't we be able to buy Bitcoin now? Maybe you apply rules around Accredited investor status there should be protections against unsophisticated investors buying stuff or getting defrauded. That's fine that's the framework that Brian Armstrong is asking for but everyone should understand what the SEC is doing right now is Basically usurping congressional authority It should be Congress that makes the law if Congress wants to ban crypto exchanges in the United States and prevent the citizen the United States from owning crypto let Congress do it it should not be Up to Gensler to do that.

And the question is why is Gensler going this far when previously he had relationships in the industry? apparently He was a consultant to finance and even worse he was talking to FTX about giving them some special status and I think the reason is the the scuttlebutt is that He has an alliance with Elizabeth Warren and the rumor is that you know She will make him Treasury Secretary if he basically destroys crypto in the US.

Sorry, where's the evidence for that? That's just someone's rumor and speculation. This is the scuttlebutt in the industry Okay, so it's This is in fact the back channel just to be clear rumor and innuendo is what you're saying No, look what I would say is clear is that Gensler and Elizabeth Warren have an alliance it to destroy crypto in the US This was speculated about before with operation choke point, but now it's clear.

They're trying to shut down We've talked about on the show before it was a series of actions. Take what you do when you're in a hotel at night Operation choke point was a series of actions by the US government to basically destroy all the on ramps to crypto So you couldn't get money into the system now They're going further and they're basically saying it is illegal to operate a crypto exchange in the United States.

So Yes I can explain why you're wrong what they're saying is it's not just the exchange. It's that the exchange contains Unregistered security, so it's a more nuanced point. I think I agree security. Could you trade? Well, if it passes the Howey test or it is registered and there are people who have actually Crypto passes the Howey test.

No, they're going back on that. You could pass it if you limited it to accredited investors and the fact is Brian Armstrong finance and a lot of crypto projects refused to exclude Non-accredited investors and I watch this happen up close and personal You're right about the unregistered securities thing.

They're trying to say that all crypto is unregistered security No, they said They literally they named them sacks in the in the lawsuit. They named the 16 or 13. What was it Friedberg? So they they know how to it was dirty. They know how to craft this They're saying for these specific 13 now the industry does feel you're correct and the back channel is everybody's against us But if they had just registered these they would not a problem.

I don't think they're gonna He doesn't have a way of registering They do they don't want to so they claim they don't have a way of registering They could register it just like we all Lot of people tweeting about this that the SEC has put out statements saying our door is open come talk to us There is no open door.

There is no one to talk to they have no idea how to get registered How do you think this is gonna get resolved Armstrong's talk publicly about going to Congress? To try and get some clarifying law passed. Are you familiar with any of the Any of the drafting that might be going on to support his cause here or do you think it's gonna get settled in the courts?

First of all, I think I think Brian Armstrong is is a really really really good entrepreneur And I'm a really big fan of his That said I just don't think that there's a lot of political support To visit this issue right now and so unfortunately, I'm pretty Skeptical that you're gonna see any form of legislation pass.

I unfortunately think that The SEC has by and large put the entire sector into mate and so I think that what Jason said Is largely right which is that it's gonna force these companies to preserve enterprise value to leave the United States and to jurisdictionally operate from a different place and to Basically IP block and I PK us Residents from using their products and services.

I Also think that they're gonna have to pay large fines. And so the only thing that'll be left is to adjudicate All of the staking stuff that that happened and whether that was right or wrong, right? So the court it'll get settled it'll get decided. I agree with that And I think I think that when you start talking about minutiae like well these 16 cryptos are okay or not Okay, no look you're kind of missing the point The government led by Gensler is in a full assault on crypto And the goal is basically to either destroy it in the US or drive it offshore Chamath is right about that and the question is why and I think Jake how you made the point that progressives like Elizabeth Warren see crypto as Competition to fiat currency and they do not want there to be a competitor.

Now. What is the reason for that? I think it's because of their radical spending schemes Remember in the first years of the Biden administration the progressives wanted a four and a half trillion dollar build back better bill. Remember Larry Summers told them that you're gonna cause inflation and Even the 750 billion dollars scoped down version that they ultimately passed Caused a lot of inflation and it caused the problems that we have now that we're seeing in the economy But they wanted four and a half trillion and when people were opposed to and said we couldn't fund this they were in favor of minting trillion dollar coins Yeah, so look these are people who don't want any check on their ability to spend down the full faith and credit the United States They would basically spend all the money that we have they would basically eat the seed corn or don't have That we don't have that I think you guys agree we should not be spending and that is why they're the faction in our political system who are most against crypto The two things can be free bird.

Hold on. I gotta I gotta respond to two things can be true One the government doesn't want to give up control of fiat. I agree with that Second thing that's also true is that this group of people did not want to play by the rules. They knew the rules They explicitly broke them for profit.

That's why they have them dead to rights You can name this operation choke point. You can brand it you can put out any conspiracy theory you want They did have the option. Why is it a conspiracy theory? You agree? They're trying to run these guys I agree. I said two things can be true at the same time David these this is a tolerance for ambiguity being able to hold And they don't want to give up control yeah, that's what's happening.

That's the rule you have to follow security You have to only allow three podcasts. You said that coinbase was a good actor. I Believe they have good intentions. Yes, I don't believe the other people do I do believe That coinbase is in violation of the law I believe the securities they trading are in violation of law and that's obvious if you but I believe that law should change Let me give you a security are Securities J Cal.

Let me give you a third point and sacks Elizabeth Warren she may be motivated by the intention to preserve the authority of the Fiat But is it not also possible that a large number of people lost a lot of money? That they worked hard for and they used to buy crypto assets And then the value of those assets went down and those people lost a lot of value I had there was a group of guys that are house painters that painted my house Two summers ago and they painted the whole house.

They were here every day for hours every day. So I got to speak to these guys and These these guys were house painters, you know, they they work for an hourly wage They do fairly well But every lunch break every break they got all that they would talk about with one another Was what cryptocurrency they're buying and trading in and out of with the whole intention of making money They all believed that they had a good point of view because they read something on the internet or got some tweet Or got some text or saw something on tik-tok about this one Crypto asset or this crypto asset and they were trading in and out and all of the money that these guys worked hard for Was being invested in crypto assets.

You're right. That set of facts is not great. However, I don't think that's the motivation I think the motivation is to basically end crypto as a potential competitor to fiat money in the United States That's the motivation and they're gonna use those fact patterns to basically Support that because look turn up because we could handle that.

Okay, we could do the accredited investor test there should be a framework or set of guidelines under which it is legal for people to buy and Hold or trade crypto in the United States and lose all that Brian has been asking for Let's give us a framework and Genzer is not giving a framework.

He's just trying to basically put them out of business Okay, look, I think we've gone around this topic. This has been a great conversation I'm gonna move forward to the next topic which I think is really interesting in the vein of both De-globalization but also, you know the scale at which venture firms have gotten to Sequoia decided this week and announced publicly that They're splitting off their China and India Southeast Asia funds as you guys Obviously know Sequoia capital is a venture capital firm and within that firm They manage multiple funds some of the funds that they've raised and managed have been Specifically targeted in China where they have 56 billion dollars.

I don't know if this number is accurate but that's an incredible number 56 billion dollars of assets under management focus just in Sequoia China and then they have a Sequoia India fund Which has about four billion dollars of capital raised in just the last three years And now they are separating the management company and the oversight of those funds into separate management companies.

So Sequoia Capital will no longer oversee those China funds a new firm has been formed called Sequoia China That is now owned and run by a separate management team based in China and Sequoia India is now called peak 15 partners, which is owned and operated by a separate team of managers out of India Roloff Botha will manage the US and European Sequoia capital Neil Chen will oversee Sequoia China and Shailendra Singh Neil Chen, I'm sorry, Neil Chen and Shailendra Singh will oversee Sequoia India I guess this is a question of the Sequoia get too big or are they caving to pressure of The political issues arising with having deep relationships and ties with China or as they have said a lot of competition Between these different portfolios and companies within these portfolios amongst each other Chamath.

What's your read on the action? Is there anything to read into this and anything to extrapolate from it? well, it's been a parade of missteps for Sequoia in the last couple of years and I'll let Sequoia figure out who to blame for this. But the reality is They I think felt a lot of FOMO post SoftBank they raised this large mega fund that kind of straddled all of the sub funds and straddled all of the regions and so They dangled the carrot of trying to get into the early stage US fund by investing in this big mega fund that also had China and India exposure and growth exposure then they tried this like very convoluted evergreen Structure right before the market fell apart where you could basically become a permanent capital vehicle and As far as I can tell from the outside looking in it just seems like a taxed tax play for the GP's to not have to sell and realize capital gains But that only works when the stock market keeps going up, which it didn't and then it's summarily Crushed tech stocks 80 or 90 percent.

So that was a misstep and then when you put all these things together Now that China is contracting and we said this before I think China is largely uninvestable for the next 30 or 40 years It just makes sense to jettison Now I will say though that Neil Shen is elite if you consider in investing, I would say I have a simple rubric Anybody who's made more than a billion dollars for themselves as an investor.

I consider elite Neil Shen is elite And so he'll do just fine Running that's Sequoia China business. I was surprised about why they would allow India to leave there's nobody that elite at Sequoia India by that rubric But India is a country growing at 6% a year. It literally looks like China in 2008 and 9 and So I'm not sure why you would let them leave I think that you would want to attach them to yourself because it makes the US business look better.

You probably gets differentiated and smoothed out returns But I think this is a little bit of taking you of competition to mark that there was competition between the different portfolio companies And it was leading to conflict I Mean, that's dumb that happens in the United States Sequoia has always been known to fund everybody that they think will make money no matter how much they compete When they back YouTube and Moritz was sitting on the board at Google and Sure, look Sequoia Sequoia as an organization is elite They're there to make money for their LPs period end of story.

And so all of the other words that can go in any press release Basically, I think try to hide the fact that this is an organization that's had some missteps They're not on solid ground. They've lost a lot of money and they're trying to figure out what to do next.

I however, if I was running that organization would have probably done nothing and Just let the dust settle And I think that all of these actions are too close together and it's a little bit to me of Flailing in the water and so I don't think it was a good idea To let India leave.

I think it made a ton of sense to cut China But I think all of this stuff happened started happening a few years ago Starting with that eight or nine billion dollar mega fund that they raised to try to compete with softbank Saks any read on this? Yeah, I mean, I think it's a example a prominent example of decoupling and Globalization going on.

So I agree. We have to treat India and China separately with respect to China. I just think it's become Harder and harder for Americans to do business in China both because we don't really have the visibility into that system and There's too much political uncertainty. So kind of touch my point about it being increasingly uninvestable But I also think that geopolitical concerns It's just very hard to straddle those concerns now because the geopolitical competition is heating up so much I think it's investable for people like Neil Shen who are insiders in that system So I think you know elite Chinese investors can I'm sure make money in China over the next few decades But I think it's just too hard for Americans to figure that out.

So I think Them parting ways makes a lot of sense. I think it's gonna simplify Sequoia's life a lot India I I agree with Jama that that's sort of a different question because India is gonna be a huge growth economy over the next Few decades and they are a US ally So it doesn't pose the same geopolitical risk but my guess is that it was just kind of unwieldy that it's too unwieldy to Kind of merge funding sources and firm management Across two firms that are really pretty different right the US aquarium firm and then this Indian firm So my guess is they just decoupled because it was just getting too hard to manage And if you're an LP, don't you just want the ability to say?

Okay, I'm gonna allocate this much money to India and I'm gonna allocate this much money to the US I think LP is probably like it to Sequoia China is frankly over the last 15 or 20 years as good and probably is numerically better than Sequoia us So that was an elite organization just by itself Sequoia India I don't think has much to talk about and so maybe what?

Roloff decided is this team is just not very good So we might as well just cut it and we can revisit it later They probably have some number of years of a non compete and then they could come back into the market five years with a totally New team and that may be easier So maybe easier just as just maybe the team actually wanted to be separate Look, it's hard to cross returns from two totally different funds, right?

Because one side one side is gonna be unhappy with the trade, right? Yeah, I can give you the J Cal's got actual information to share. Well, no, I mean I have I think I have the closest Investor in your company right Jake. Oh, well, I'm an LP in their funds.

They're printing money for me They back my second startup rule offs on the board of that company is still with me and I was their first scout When they started the scouts program, which is the highest Percentage performing fund I think they ever had Sequoia's when you're our you're our resident Captain America.

So as a patriot, how do you feel? Well, they are put that aside. Sequoia is 20% of the Nasdaq This is the greatest venture firm of all time hands down and the Sequoia fund Which shut them off referred to me companies they've invested in companies As I guess and so the reason the Sequoia fund came out this evergreen fund was because a lot of their LPs wanted Sequoia to manage the public equities going forward because they didn't want to sell them because they realized bullshit that The massive gains the the gains from Google Apple etc of these Investments that they did when they were private companies Cisco the gains from public forward were greater than the gains in private And I've been in on these presentations.

I've sat through them with the Sequoia team and so When you manage those public ones, we've all talked about the denominator problem here The denominator problem is hey, are they venture returns or are they part of the public equity? So at a giant endowment They want to put them into the equities bucket get them out of the venture bucket and Sequoia saw an opportunity there to manage this Evergreen fund I'm sure there are tax advantages to it, of course But with relation to what they did in China and India these these were incredibly Prescient and Innovative things they did in 2000 and 2005 when they started India and then China was 2005 I believe they found domestic teams.

You need domestic teams to do this properly especially in places with different governance and different regulations and It gives them autonomy though. They were incredible investments But what's happening right now is all venture investments because of AI and chips and the decoupling with China are now under Massive scrutiny so they can say there's brand confusion.

You can talk about you know Collisions and who's gonna back this Chinese entrepreneur an Indian entrepreneur who also is operating in the US, right? These businesses operate in the US. And so what really is happening is The government is gonna stop all US venture investing in China. That's what's gonna happen in the coming months And so they're just getting ahead of that and now they will compete And it really has to do with chips and AI Okay, you may have seen some of these stories and nobody's gonna invest your if an American invest in AI in China That's gonna be bad and the same with chips.

Yeah, you're right There are a bunch of stories about whether US investors should be investing in AI in China and people were saying this was un-american Because it was basically gonna give China an advantage against us in this key industry And I think that point is a good example of what I'm talking about with the geopolitical concerns.

It's just getting too complicated Yes for Americans to invest in China. It raises too many geopolitical concerns and I think Sequoia is massively simplifying its life By just splitting these things up and being out. Did you see Keith for voice tweets on this? Yeah, that's what we're referring to Yeah, Keith for boy tweeted basically like it's un-american to invest in China at this point Yeah, we've talked about this before I mean look that the Chinese relationship primarily used to be seen as an economic relationship and people were looking for a win-win Basically trade scenarios and it was not seen as a moral to invest in China Now the relationship is primarily seen through a geopolitical lens, which is to say the balance of power, which is a zero-sum game It's about you know, how much better is the US doing?

How much more powerful is it than China and anybody who's perceived as helping China in that rubric now is looked on? Skeptically within the United States about that Well, like I said, I don't think that's gonna change So I think Sequoia is doing the right thing to kind of like I said simplify its life what's your personal opinion?

I'm curious I think that It should be possible to do business with China without it being seen as either unpatriotic or immoral However, there are strategic Technologies that are just gonna be I think it's too hard and too risky to To be supporting China in chips and AI Yeah, I mean look if somebody is using Chinese manufacturing to make toys or clothes.

I don't think that's fundamentally strategic in a geopolitical way, but if you're helping them make The next generation of chips that's gonna raise a lot of questions So what so a VC firm? Freeberg can't take out chips and AI run their investment Hold on. I want to say something cuz sure this reminds me of one benchmark actually had benchmark Europe and then they cut it Do you guys remember that?

Yeah, I do. Yeah and kind of retrenched. They weren't retrenching from a position of strength They were retrenching to reestablish themselves after a bunch of missteps so I think typically these retrenchments happen when there's a little bit of internal chaos and Mismanagement and underperformance that's not the case here.

I can assure you. Yeah, but I actually think retrenching is good because it simplifies things You want to simplify yours? Yeah, I I totally agree with you My point is when I saw that overlay fund I was like, this is questionable but then when I saw that weird evergreen fund that to me just seemed like a tax arb and I thought to myself as a person who's looked at this exact stuff for my own stuff what I did was I just converted it to a family office and From a tax perspective.

It was much simpler, but that exact same structure I looked at for myself and the reason that that structure exists and Jason I know you want to think it's because these endowments want them to manage public equities I still work with a few endowments and pension systems They don't and the reason they don't is they're not allowed to they're not allowed for concentration purposes They pay other people to manage it They have these outside consultants and for fiduciary Perspectives you have to do all of these things with respect to managing risk and one of the most obvious things that these foundations Do is they get distributions and they sell they don't hold and so the reason why you'd want to look at the Long-term gains of a stock that you distributed is because the GP sold too early Not the LP and I just don't I think that you should not just be a blind Surrogate on this topic and actually really think about well, I mean, I don't think you need to well I'm not I'm not and you know square if you look at something like that, you know, Roloff's still on the board of square I believe so they Sequoia has realized over time, you know as it's been explained to me as an LP that you know these companies grow the outliers continue to grow massively when they become public and Sequoia is now staying on the board of those companies and so they actually have the most insight into it because they backed it when It was two people and then they're still on the board That's not the point money is not infinite And if you're a foundation and you're legally obligated to distribute some percentage every year You need the money back and the foundations do get to choose some foundations want to go along Harvard or whoever I'm just picking, you know, one of the large ones if somebody's got 30 40 billion dollars They may not need to liquidate that and they might very much I'm just the only person that is in a position to actually hold for the long term because it's so tax advantageous is the GP That is why that fund was created and I will bet you if you ask him under oath Why they did it I'll tell you it was for themselves I will people have the church million dollars for charity Whatever you want to do I bet you if you put him under oath and you subpoena him and you ask him why he did it He'll say he did it for himself and that's fine All I'm saying is that's the kind of complexity that sacks is talking about that does not add to success It is over complexifying something that doesn't need to be complicated Yeah, I disagree with you, but we can just move on.

Well, we agree to disagree sometimes here on the all-in podcast we're gonna move on for our last topic of the day with the announcement see can we talk messy? No, no, we're not good. We're good because we're gonna do one last topic, which I think is PGA and messy go together.

Yeah, so let's just talk about the PGA No, we don't have time guys. I appreciate the messy interest, but we're gonna talk about something less messy Who cares? I think it's pretty interesting for a couple of reasons So as you guys know, the PGA tour has been around since 1930 I think the PGA tour makes 1.6 billion dollars a year if reports are correct.

I make 1.6 billion a year boring I mean depends on the year all of the players on the PGA tour are independent contractors so Saudi Arabia's public investment fund and this is what I think is one of the more interesting aspects of this story and Maybe speaks to a broader kind of set of geopolitical Transitions that are underway the Saudi Arabian public invention Public investment fund started Li V golf as an alternative to the PGA tour live golf live golf they invested two billion dollars of capital and offered Guarantees to golfers to come and get on their tour.

They ended up Offering at one point Tiger Woods reportedly got an 800 million dollar guarantee To join their tour which he turned down Phil Mickelson got a reported 200 million dollar guarantee Which he took to join the tour Hideki Matsuyama got offered 750 K 750 million which I might so seven of the ten top paid golfers in the world actually signed up and It caused obviously significant disruption to what has effectively been a monopoly, which is the PGA tour in golf in professional golf and Here we are two years later And it was announced this week that live and PGA are merging and the current PGA tour commissioner Jay Moynihan will serve as CEO of the new entity Just by way of reference Jay Moynihan makes a reported 14 to 15 million dollars a year in salary as CEO of the PGA tour He will now be CEO of this combined Organization one big question mark is how much is he getting paid and did that help secure and solidify this deal getting done?

But I think another big question is do we think this will actually close will this face regulatory and antitrust scrutiny? Will this face CFS because it is the Saudi Arabian public investment fund that is effectively taking a large stake in the PGA tour Let's go to our resident professional sports team owner or former minority owner Chamath And he takes on On this announced merger.

What does it say about the PGA's ability to hold action? This is what's so crazy about your topic selection Messi was offered 1.6 billion dollars personally by the Saudis and you don't want to talk about that because you want to talk about a whole organization playing an antiquated sport that itself generates 1.6 billion dollars Welcome to being the moderator I don't care about golf.

I don't care. The reason this is so controversial is That they're calling it sports washing trying to make the reputation of Saudi more palatable in the West by using sports things people love the reason this has become controversial is because of the hypocrisy of it the PGA fought against live and This guy Jay Moynihan who is the CEO of this he basically evoked the 9/11 families and Went on a whole thing about how evil live was Only to then secure the bag and then there's some back channel here about Well, there was a lawsuit between the live golfers, you know Who are now banned from playing the PGA when they signed up and antitrust stuff And so the hypocrisy of the group is what's being pulled into question here Come on, this is why it's important size the players who took the money were ostracized As supporting an evil regime Yeah, and now it's clear that they were smart and Tiger should have taken the money and Actually the guy who said as much at the time was was Trump, you know, he Yeah, he nailed it's like one of these He's basically said that take the money from live because eventually live in PGA are gonna merge and then the guys who stuck with PGA You're gonna get nothing and they're gonna feel like idiots.

He was totally right Come on come on, you don't think that that's insane. I mean, come on, it's pretty amazing Tell me when you get to messy and the fact that these guys were proclaiming that if you're gonna go join this tour You're joining, you know I don't understand whether I don't understand whether you're naive or dumb.

This is like about money It's always about money professional sports has always been about money. What what are we what are we talking about? Money money money money money. There's your answer money drove the answer money drove the split money drove the deals now money drove the merger I don't understand.

Can we talk about messy, please? It's so much more interesting. Okay, go talk about messy tomorrow. I Mean the messy thing is so incredible Because Cristiano Ronaldo went to a team in Saudi To play in the August of his career the last two or three years and this has been a thing that started with Pele in The 70s Pele came to the New York Cosmos and played Beckham famously did it as well came to the LA Galaxy But Beckham did this one interesting thing, which is he said, okay, I'm gonna come to play in the MLS on One condition really which is I'll take a huge pay cut and all of this stuff But I want an option to buy an expansion team for 25 million bucks Fast forward he ended up buying inter Miami That team is now worth five hundred and eighty five million dollars So messy is 36 years old.

He's about to enter the August of his career. He's won everything. He's done everything possible He is so incredible. I mean, I love him. I love him he gets offered four hundred million dollars a year for four years to go play in Saudi Arabia a 1.6 billion dollar deal and You know, there's no income tax here.

So that's like 1.6 billion dollars right in his pocket Except the deal that he did Which was for a lot less upfront is really interesting He basically said I'll come to the United States and play in inter Miami for for the Miami Football Club But I am you know, basically, I'm not sure he said this so I'm using my own words.

I'm the greatest player in the world Every time I do something magical on the field I'm creating content that will sell tickets and create brand awareness and move the interest level of soccer in the United States I'm a content creator. So I want a piece of this content and so Apple Who signed a two and a half billion dollar ten-year license for the MLS said you're right You're probably gonna sell more subscriptions for me.

I'll give you a piece of the ref share and Then adidas said, you know what? You're right. You're probably gonna sell more shoes for me. I'll give you a piece of those shoes So in one fell swoop, I think what's amazing is Messi is not an athlete in this deal.

I think going back to a theme that we've talked about a lot is He is this Ultimate penultimate whatever. He's an elite content creator He's the equity who is now creating Incredible who will come to the United States to create this incredible content that will move viewership move merchandise And he's gonna monetize that so it's effectively like becoming the Jordan brand Getting a piece of Netflix all in one.

He has the equity in those businesses basically Yeah, there's a subtle point Schmott's making in the deal. You have the person who's responsible for distribution so this would be the same as like the NBA on ABC ESPN or TNT and TNT or ESPN saying you know what you're so important LeBron James to play in this or Steph Curry We're gonna give you a piece of the subscriptions to ESPN So Apple is giving him rev share on their Apple TV League pass for MLS That's nuts like and this is I think it goes back to the live Deal with PGA, which is people are looking at these sports leagues and saying let's get creative It goes back to a different one.

The the NBA just signed a new collective bargaining agreement that they're gonna ratify I always thought that the real thing that the NBA Players Association should be asking for equity was equity Yeah, and that equity could be phantom equity and the teams because it's clear that in the absence of the players There's no viewership and there's no appreciation in the value of those franchises.

And so the idea that LeBron You know Steph Dre KD Don't own a huge piece of the underlying equity gains that they're creating in the period in which their players is pretty crazy now the ownership their perspective is while we translate that in terms of rev share, but it's really not true because if you look at the Kager the IRR of the franchise values versus the K gring of the salaries.

They're not equivalent Yeah, so I just think it has huge implications to all the professional sports leagues because these big stars Should be asking their agents and their managers. How do I do a deal like Messi? I am the ultimate content creator in my league. The dynamics are changing it will it will no longer be an employee Capital labor situation, but capital is merging with labor Bravo and labor labor is basically becoming the equity in the equation and they are going to pursue the business just like And we're and by the way, the reason we see it happening so much is because of the social media age and it's really incredible It's but it wasn't like that.

I know you have more to say we all have more to say I just want to highlight I need to go I have to go to a kindergarten graduation. Congratulations Congrats close to chef you I love you guys. I'll see you later. Adios. Congrats. Thank God. Bye. Well, what's really interesting?

Chamath to your point about the CBA is they're gonna make these huge salaries They're not gonna give them the equity as part of their Five-year deal they make the money They then have the ability to invest in a team so you can be LeBron and you could be investing in the Knicks Maybe if somebody wanted to sell a percentage of it, you can invest in any NBA team Any sports betting team any sports betting?

I actually think there's a simpler way to do this Which is it's it's I think it's fair to say that when you join a team It's like joining a company and you can create shadow equity and that shadow equity says you came in at this point Right you left at this point here was the Delta of the value and I think a good agent should be Negotiating on behalf of a player most players will not get that much a few basis points of that value Yeah, but the idea that a LeBron James can go to a Miami and double the franchise value double Yeah, right from you know, one or style it or Steph Steph steps a better Okay, great stuff comes in at 480 million and is now 5.3 billion.

So that's a 10x thing plus of value You know is step responsible for 10 or 15 percent Should a billion dollars of that go to Steph Dre and clay. I think you can make a great claim that it could yeah Absolutely put them on the map. So yeah It would be and it would be pretty easy to do and what this might do is keep people on the same team longer Which is what fans want exactly why people moving around?

That's a great point and private companies like Cargill or Koch Industries They have these shadow equity programs that they've had for years for decades that they've run on behalf of their employees So we know how to run phantom phantom equity programs in private businesses and I just think the leadership of the NBA Players Association the NFL Players Association is Right now still lacking the sophistication To understand this well enough to then propose when the next time it is to to negotiate this kind of a deal But when you see things like this messy deal, I think it's a game changer It is a game changer and I think for sports, I don't know if you saw Adam Silver gave you know a little press conference with the finals and everything He was talking about the J.

Murrah Moran situation with the guns It's just a lot of like topics coming up But one of the topics that was probably under appreciated was he was talking about the bundle the cable bundles going away And that people can't watch like the TNT a NBA on TNT, whatever that is with, you know, Charles Barkley, etc and He wants that to be available for free So he's gonna challenge people in the new TV deal If you want to have the NBA You have to have it available to every because the number of people who can see NBA games has been going down I have a question for you because you think more people do you think more people would pay for a subscription to watch the Knicks?

games Wherever they happen to be all over the world or a subscription to watch Steph Curry No matter what team he plays on hmm, the old generations are loyal to the teams the new generations well to players So it's a generational miracle numerical question, which one's great. It's probably a jump ball right now, but it will eventually be they'll follow the players Because this new generation follows players like our kids like I don't think Ron from I've seen to take I think you could probably sell A few hundred thousand subscriptions to the Knicks and I think you'd sell mid millions for stuff What's gonna happen now is I think they're going to they just want this to be ad based and to directly subscribe So I directly subscribe to the NBA I get every game for $200 a year with no ads You know what?

You know what we should do. I actually have a great idea What we should do is we go we should what live did to the PGA we should do to the NBA. Let's get together 20 billion dollars. Let's start a competitive NBA League where we give the players all there is a structured phantom equity plan Pay these guys a hundred million bucks a year get all the big guys to come everybody else will come And just blow the whole thing wide open By the way, that's the blueprint now if you want to really compete with the with the NFL or the NBA or the NHL This is what you should do put together 20 or 30 billion, which is not that much money and Go for it You only need to get a couple of stars to blow it up And if you give stars the equity in the league, they'll convince all the other players to come I'll give let's give sacks some red meat here you sacks.

I'll give you a little red meat. You want Tucker on Twitter There's your red meat choices as we wrap you want Tucker on Twitter? you want a Russian controlled dam being destroyed for a major flood or Do you want Chris Christie joining the race? Which red meat would you like?

Which red meat we put in front of crazy hair Well, I mean what's happening Ukraine is really the big news this week. I mean offensive has well the Ukrainian counteroffensive has started in earnest and Yes in conjunction with that you're at the destruction of that major dam Which it's not clear who did it.

I mean both sides are pointing the finger at each other so and there are Reasonable arguments for why either side may have done it in terms of who benefits it seems to benefit the Ukrainians more because the destruction of the dam washed out a bunch of Russian defensive fortifications and villages of Russian speakers on the other hand The Russians were in control of the dam So it would have been easier for them to carry it out if they had wanted to we just don't know but I think you Know events have now moved beyond that and we are now probably in the third or fourth day of the Ukrainian counteroffensive of course has not been officially declared, but there is major major fighting happening now where Ukrainian armored divisions are seeking to you know penetrate Russian defensive lines around Zaporizhzhia and So the long-awaited Ukrainian counteroffensive has certainly begun.

How does the? The dam relate to the Nord Stream pipeline because these are both situations where people are like who actually did it What's their motivation and let's face it. These are chaotic actors at times and Figuring out who has the motivation to do these things Seems like a leveling up kind of game because you can't put it past either party in some cases, but in the case of Nord Stream People saying hey, it was the Ukraine, but then there's this argument that the Ukraine's not capable of doing it Or maybe it was sanctioned by the US or the West and then executed by Ukraine But where do you wind up with all these so on Nord Stream?

We're now on our third cover story the CIA sourcing their stenographers at the Washington Post have now claimed that it was six Ukrainian dudes in a yacht who blew up Nord Stream No, seriously, and if you look at this boat, I'll put a photo of the boat on the screen.

It's it's pretty silly It's a 10 great. Yeah, the Ukrainians do not have a Navy and they certainly don't have Navy SEALs I don't believe they have the capability to by the way that this destruction of Nord Stream Nord Stream was this huge underwater steel and concrete Structure, it's not that deep though Cuz it's only a hundred fifty or two hundred feet deep at the lower points deep enough and it took a lot of explosives So they had to know what they were doing.

So I dove 120 feet once so it's but the point is that when when Nord Stream was first destroyed The media rushed out to say well the Russians did it even though the Russians had no motive to do it It was their own is their pipeline. They could just turn it off if they wanted to But this is what we hear is that every time something destructive happens, it's the Russians did it Why would they attack themselves because they're so crazy?

We heard this with Nord Stream when Belgorod which is a Russian district just across the border from Ukraine was attacked It was claimed that the Russians did it. These were Russian insurgents. No, that's pretty silly It was Ukrainians dressed in Russian uniforms and just recently when there were drone attacks on Moscow We were also told that oh, it wasn't Ukrainians who did it was Russian dissidents or something, which again makes no sense so this is not to say that The Russians didn't blow up that dam is just to say that Whenever the story is rushed out that the Russians did something highly destructive you have to We need to see some evidence here and we just don't know it's just hard to know the fog of war is thick All right.

What did you think of Tucker's first? Show it's getting sued but he got the tweet got at least like 90 million views Which means the video probably got 10% of that or something So probably video yesterday was at 17 million views or something like that. So I'm sure it's more today So no, he's getting huge distribution through Twitter arguably.

It's more distribution It's almost certainly more distribution than they got through Fox Fox was 3 million, right? Yeah, that's how many viewers he gets on Fox. Yeah. Well Fox is half of that now because they've They've attracted so much viewership after Tucker left But look the only thing that I think Tucker got through Fox was access to frankly a viewership base That's not very online.

There are a lot of old people who watch Fox who just aren't on social media. That's it though Everybody else can see it on Twitter and he's getting more distribution on Twitter Super distribution is the way to go He's gonna get 25 million people and of course monetizing it is the hard part because Fox is subscription revenue and everything else is He's creating a list, you know, he advertised the website Tucker Carlson calm at the end of his Video and you can go there and sign up for you subscribe direct and get it on his website I don't think he's monetizing it yet, but you can sign up for alerts and so forth So he's clearly creating a list of some kind.

That's probably because he yeah with his Contract is still getting paid. And so he's like, yeah daily wire is the model I mean, they they have got well over a hundred million in revenue. I understand and they have a massive subscription business So there's a clear path there. All right.

Hey listen for the world's greatest moderator living in the Bay Area David Friedberg and the dictator himself Chamath Palihapitiya and the architect hosting any number of Fundraisers for any number of politicians David Sachs the rain man. I am the world's greatest moderator taking a week off We'll see you next week.

Oh and enjoy some Q&A here from the live angels summit hundred people in Napa. Thanks for coming besties I appreciate you. Love your voice during the event. Love you besties. See you next time. Bye. Bye. Bye. Bye All right, welcome to a baptism John the Baptist Are you ready to accept Christ freeberg into your soul I Honestly have no idea what I'm doing here.

I've I Have no idea who these people are or what this is or why you're all wearing white. I Mean seriously, I'm sure you're very nice people, but I have no idea what this is Have you seen the wicker man? Jake? I was like we're taping an episode in Napa and I'm like what on a you know off day Monday are you okay, buddy?

Yeah, you low blood sugar. Yeah, actually I do bring us like a cheese plate or something Guacamole and chips Please but honestly like I didn't sign up for this. I thought we I Thought we disagreed to a podcast and somehow we've been roped into doing some dog and pony show for By the way, is that true these are a bunch of your LPS as well You just have never met them Literally, okay, I'll drink it.

Yes. Yes, sir Literally, someone's like Jake out. I'm with this incredible endowment. We're incredibly successful. I'm like, oh, that's great. Yes, you heard I'm raising a fund. They're like no no, no, no. No, um, we heard sax is gonna be here I'm like, yeah, you want to meet him invest in front?

Oh, no, we've invested in all his funds. We just never met him And so wow, that's one way Two things they've never seen sacks and a distribution Fucking decision, whoever you are. You're a real fucking genius back there Except for the fun we already paid back. Oh My god, I lost control of it in the first 90 seconds Why should tonight be any different except for the five-year-old fun?

That's already fully returned So Welcome to the angel summit. These are my besties. We do a podcast called all in we thought we'd do it live this is the Fourth time we've ever appeared on stage together The first two times were at freeberg's LP conference in the Presidio. Yeah, I Resented that one, too Coming out to see humans Came out in his mask.

He took his gloves off It was very uncomfortable for him, but he eased into a seat And then of course we did the all-in summit last year in Miami and This is the fourth time. So it's great to be out here We have a couple of news items on the docket We could start with or we can go right to Q&A with these many audience members who have a lot of questions What would you gentlemen like to do?

Chamath has a few words. He'd like to say go ahead Chamath is drunk by the way, he texted us You can see that grin on his face. That's the Chamath grin. He gives when he decided That he would not have LPS and he would just invest his own money he does not care So it's the gloves are off.

Let's do Q&A Jay Levy's is sacks. What's the path for DeSantis to win the nomination? And get the base of Trump Oh red meat. Oh good Here we go. I think the path basically is he has to win Iowa and or New Hampshire. It's just that simple But keep in mind that Trump did not win Iowa last or in 2016 Ted Cruz did Iowa tends to be more religious.

I think Santas is trying to outflank Trump on the right actually on certain issues and So he's on the ground there campaigning. I for I understand he's generating a lot of interest and enthusiasm And he's gonna keep plugging away at it. I think he's gonna out hustle Trump I'm not saying he's gonna win but I think he's gonna work harder and the path would be that over the next What is it like nine months that Trump's style and message which is admittedly much more entertaining than DeSantis but kind of fatiguing whether that kind of gets old and DeSantis is more like disciplined messaging people just kind of wake up and say, you know what like I don't really want to go back to the chaos of the whole Trump show at this seems like better to me so That's basically what I think has to happen is Trump fatigue has to set in and people realize that there's a different Was that CNN Town Hall a sign that?

Some group of people find him incredibly entertaining and the media themselves want him back because it's great for ratings I'll uh Mencken on session or Is it a sign that like my god, that's so fucking exhausting like you're saying sacks What do you think? I think that the the base like the town hall because it was Trump walking into the lion's den Standing up to the mainstream media, which is what they like, but I don't think it did anything to help him in the general because I think that viewers who Don't like Trump or aren't entertained by Trump.

I mean, there's nothing there to really grab on to I don't think so But but look I think your point about who does the media want to get the Republican nomination? Definitely Trump because he's good for ratings And it really is that simple and they think they can beat him So right now the Biden people the Trump people and the media all want Trump over to Santas and that is why like to Santa's is getting dispatched by everybody right now is because You know, everyone's kind of aligned on this but the minute that Trump gets the nomination is all gonna turn the media all of a sudden is gonna turn on Trump and Then we're gonna see what the real campaign is gonna be a Santa's is in show business as they said on secession Was that the quote you show business?

He's box office. He's not box. Yeah, just add this is a box office He's a somebody who actually can execute right, right, but also that's that's why he'd be a good move for Republicans I think is because he doesn't give the Democrats as much to work with. Yeah All right, entertaining, but he gives his enemies so much to work with.

All right, another question from the back Go ahead stand up. Tell us your name. Yeah Sal Dacher from Boston and The question is much less exciting regarding sort of in the problem of bank bank runs and bank insurance by the Fed and bailing out, you know average people bailing out wealthy people I Have heard a lot of solutions about this I've been So careers and banking for a while the idea of having senior management and the board have direct liability If the feds have to step in to rescue the bank Do you think that that could be a step in the right direction in?

Preventing banks from taking risks. They really shouldn't have taken I mean the 2008 disaster The subprime crisis could have been addressed with this I think this crisis with SVP could have been addressed with management just having a lot more to lose Okay, so let me just first take issue with the terminology of bailout I know that's what everyone calls it a bailout in my mind is when the shareholders of the bondholders of the bank get bailed out By taxpayers that happened in 2008.

It did not happen here here. The question was whether depositors get made whole or not. I Personally don't consider that a bailout I understand that there are people who do but it is a slightly different issue as to the bank management, you know You're talking about like a strict liability standard here that I mean basically you're talking about piercing the corporate veil and making the bank executives and their directors liable for mismanagement of the bank and That is that's a pretty high bar That's a really high bar and the problem with it is that I would never serve on the board of a bank I mean, I probably wouldn't anyway, but if you told me that I could be liable piercing the bow Right, we have a thing called the business judgment rule, you know in Delaware where if directors and officers of the company perform Their job in a good faith way making the best decisions they can and it goes wrong They're not typically liable for that.

Maybe the corporation's liable if they're not personally liable I'd look if you did that the managers wouldn't invest the cash in anything because they wouldn't want to take any risk of loss and In order to operate the business which has a bunch of people working there and a bunch of banks that they got to operate They're gonna charge you a fee to hold your money for you And so what happens is interest rates turn negative and you basically have to pay someone to hold your money for you And that's what's a little bit messed up about the way the banking system works today Is you're effectively giving a money manager the right to invest your money for you.

They take your money they pay you a low interest rate may go invested in high interest rate stuff by taking on risk with your capital and Ultimately, they can take losses on that and if you want it to make them liable for those losses They're not going to take that risk and the bank is gonna have to change its business model from being an arbitrage business To being a service fee business and they're gonna have to figure out other ways to charge you service fees Including charging you to hold your money in order to make money and that's what a lot of the banks are now doing first Republic and others have now proclaimed that they're gonna start charging a lot more service fees to hold your money and they're gonna start taking A lot less risk, so we're already headed in that direction But that's fundamentally what I think would let's take another question from the audience Good evening.

I'm Lisa song Sutton, Las Vegas, Nevada I'm GP in the veteran fund as investors you all invest in entrepreneurs Theoretically support American entrepreneurship. What role if any do you think VCS should have in? shaping advocating supporting conservative economic policy in the country Shemot zero I think that we have to know the role that you're doing if you're a venture investor which is you're buying a deep out of the money option and I think that you want to motivate the people that you are partnering with to take really thoughtful but outsized risks and So I don't think there's a lot of room for Conservativism I do think that there's room for misallocation of capital and I think that there's people that can help guide that but the reality is that when you start a company it's 95% likely to fail and the venture investor is signing up for a 70 or 80 percent Probability that they lose capital Maybe a 10 or 15 or 20 percent chance that they get their money back and then the small 5 percent chance that it becomes reasonable so In that lens, I don't think that's where conservative economic policies really should play a role I Think you just kind of got to go for it And if it's gonna win it's gonna win big and if it doesn't you lose one extra money I think like where you want conservative economic and rational thinking is when you go to the extreme other end which is just like the large-scale decisions that affect the economic vibrancy of the country in which you live and They're on the margins.

You probably want to be more rational than unrational irrational, but as a venture investor I think you want to be irrational, but I also think you have to be very judgmental and The reality is that most companies aren't gonna work and most people This may seem countervert controversial most people Actually when push comes to shove are a little afraid of the decisions they need to make to be truly successful They're not willing to fire the people that they need to fire They're not willing to be extreme in the product.

They want to build they're not willing to price it they're not willing to go to market in an extreme way and It tends to be that these companies fail because of that a lack of courage a lack of conviction It's a lack of courage or conviction because that that's a very heightened word I just think that when push comes to shove most people implode with the pressure of making a very very hard decision Hmm interesting.

All right in my experience. It could be yours could be no, I mean, I Agree with you largely when a startup does fail If the experience people around it are watching and can't get through to the founder of the founding team It's typically they are blocking their own success.

They're unwilling to fire their co-founder their CTO as the example you're alluding to perhaps or raise the price of the software and lose some customers or To drive people to work harder because you've got a competitor in the space and that's why you see extreme people win in Our pursuit and I think there's been just a great fallacy that's gone on That you can have live work balance or life work balance and you could have this Nirvana where you have it all the fact is the great companies are made by people who make great Sacrifices period full stop and if you're not willing to make the great sacrifice, you're not gonna have great outcomes Hi, David Samuel earlier today Jason you had kind of a doomsday or AI Panelist and my question is you guys have been thrust into the public spotlight and we look at deep fakes in the next year Or two as you talk about, you know tweeting on Friday versus Wednesday how do you think about somebody having each of you saying things that you did not say and Like how might we know whether Chamath said that or it was a deep fake saying it.

I already have that problem. Yeah Insider last week where somebody was saying I had a phone call. I never had so how do we solve this? Especially for you as well as public two things two things one I don't think people can say more outlandish and damaging things in AI than we say ourselves On this podcast at times but number two, you know as we've discussed many times on this podcast We have rebooted our trust in Institutions what we read what we say and I think people are now assuming they're being manipulated Assuming something might be fake news or doctored and I think it's like people are building up a much higher resiliency to bullshit lies manipulation and if I were to ask a hundred people What is the bias of CNN New York Times Fox MSNBC NPR?

90 out of 100 Americans could describe it almost exactly people are not dumb. This is another fallacy I think we have in this country is that people are dumb and they're gonna get suckered People are kind of figuring it out and we've seen deep fakes for what five years ten years now and they're like, yeah You know Luke Skywalker didn't look really good in The Mandalorian, but there's a kid who redid it and now Dolly too is doing it I think we're kind of inoculating ourself to what do you think free bird?

Deep fakes and truth when the Gutenberg press was invented a bunch of fake shit was Printed and people believed it. I don't think the current iteration with deep deep fakes is very different from any form of Mass media being used to tell people on truth. I'm just called a crusades.

What's that? Oh the Crusades. Yeah. No, I mean but look I mean You're a hundred percent, right? I don't want to speak about religion negatively in that way. It is one of many institutions of power that leveraged mass media historically To get people to believe things to do things and to ultimately be able to tax people and get them to provide capital and labor in the interest of those who are in power and the the system of deep faking is one of a long string of using the current toolkit To take mass media and and follow that same track So it will be dealt with in the same way that things have been dealt with that have been fake news in the past Which is that there will be an opposing voice and there will be counter arguments and there will be debates and it will be rancorous and it will be noisy and it will be hard to discern and Alternatives will emerge and tools that identify deep fakes will emerge and it will be the same ongoing battle and seeking of the truth That humanity has tried to do Since the dawn of mass media, you know Yesterday's conspiracy theories are like tomorrow's Pulitzer prizes I always say like if you look at Shania O'Connor ripping up the Pope's picture on Saturday Night Live right in protest and saying like the this is the true enemy They're molesting children and then the Boston Globe and the movie spotlight is about them a decades later Winning a Pulitzer for uncovering what anybody who's in the room?

Who's Catholic in the 70s and 80s knew or had heard was going on and so, you know Maybe the time frame is shortening between when we're being lied to and when we figure it out I actually think it's interesting and good because it forces us to find ways to find the truth more effectively and You know it kind of without the antagonism.

I think it's you know, it's it's absent. What is the truth? You don't you don't force that debate. You don't force that question and this will Start to reveal ways that we can kind of find things that are actual evidentiary things versus things that someone told me with either Historically anecdote or innuendo or I'm a person in power where I'm an authority or I'm an expert and nowadays It's like I'm a piece of media.

You should believe me or here I'm an image of a person and that's not gonna be the case anymore. Hi, I'm Jeff full-time corporate VC and part-time angel my questions about AI and higher education And it's actually some covert parenting advice so you can decide who's that's relevant for My son just finished his freshman year of college and I'm questioning What the future is for him in higher education given all the change that AI is going to Gonna have on on every career in every profession And I'm wondering what advice you'd give to to your child or or someone who's in college right now for what?

what's an area of study that won't maybe won't be disrupted by by AI or or an area that AI you'll get leverage from your education Through AI. I think the reality is that most of the existing jobs that we have in the United States Are going to go to lower cost locations that have that tool chain to accelerate their capability So we're gonna have to reinvent the workforce and The things that we do Over the next 30 or 40 years to stay relevant That's probably like I think that should just be the operating principle If you think about it, we used to run great call centers Okay, those call centers were outsourced to the Philippines in India, but in the next, you know, five or ten years You'll have this flawless unaccented English or even more eerily perfectly accented English For the zip code of the person that's calling in so that it sounds like they're talking to somebody that's literally their neighbor That's like just makes so much sense, right?

So it's like all this stuff is gonna happen where like all these classes of jobs are gonna go away I saw this article where a lawyer two lawyers use chat GPT to submit a legal brief The problem was that it cited cases that didn't exist and now they're gonna be disbarred So this is like serious business right like you can't do that.

Like that's like real legal Malfeasance, so what are your kids not practice in college? You know if I had to choose something for my kids I would probably I Would probably tell them to do something mathematical or biological The reason I would point them to math is that I think that it's irrefutable.

There's this great clip between Ricky Gervais and Stephen Colbert. You guys should go and Google this but it's a clip where he's on the Colbert show and Colbert is a deeply devout Catholic and he's offended by the fact that Ricky Gervais doesn't believe in God and He asked him why don't you believe in God and Ricky Gervais says look if we wiped out all the books in the world In a thousand years everything that's scientific and mathematical would be reestablished But everything that is religious or theoretically not, you know mythical if you want to say Would look very very different And that's why I don't believe in God I'm not trying to question that but it's a way of answering this question Which is I would try to point my children to the body of knowledge That's largely irrefutable Which is biological and mathematical versus belief oriented because I think these tools will change one's beliefs I've been thinking about this a lot too.

I think teaching them to be entrepreneurial Resilient worldly ability to communicate ability to lead other people in teams. That stuff's not going to go away communication skill, etc, and I'm encouraging everybody who I work with to just use chat GPT for and Barred every day for every single thing that they do my base thesis right now.

Is that the job Freezes the hiring freezes that all these companies is indefinite I'm assuming it's indefinite because the amount of work it takes to write a job requisition is more work in some cases than actually automating with AI or ready the job function and so I think 20 person companies might you know Double in size in the next two or three years But still have 20 people It's gonna be a big challenge for the for society and if it if that does come to pass There's just gonna be large swaths of people who are not going to be able to get job interviews for anything other than service jobs And you know, we need a lot more plumbers electricians waiters Etc.

Those probably jobs won't go away. Especially if we don't let people immigrate. So I am super enthusiastic about that efficiency But I think it also means you have to be entrepreneurial because if you can't get a job and you can't get mentored You better create your own opportunity. You better create your own company and That's what I'm seeing.

That's the game on the field right now two or three people who don't have job offers from uber and Airbnb And Google and Facebook just saying fuck it Let's start a company because there's nothing else for us to do and those are highly skilled people right now doing that I'll say two quick things about this topic.

So One is I think there's a lot of AI fear porn out there right now, and I just think that like all these Doomer scenarios are they're not gonna play out overnight. I mean, this is gonna take a while Second If you think about like job elimination, it's gonna be some super specialized jobs.

So for example, I Wouldn't want to be a radiologist right now, but doctors will be fine So I think if you're thinking about like going into a job category, that's super specialized and clearly in the way of AI then that probably is not a good idea, but Most general skills like you're talking about and most job categories are gonna be fine.

There's just gonna be some specialties within them that may get Dislocated like I wouldn't want to be a truck driver either, you know because of self-driving But transportation companies are still gonna exist. So I think you just want to be careful about super specialization I think but building general skills is always really good.

That really should be the point of college Where would you put lawyers and accountants on that? I'm curious. They're sufficiently general that I don't think they're gonna be eliminated But will they be able to do five times the amount of work therefore we won't need as many They may be able to get more done.

Yeah, I would expect them to get more done Yeah, but I don't think necessarily think that means we'll need less of them I mean the old story about lawyers is that there was one lawyer in a town had no business Second lawyer came to town and they were both more busy than they knew what to do with So, you know Lawyers get 30% more productive.

They file 30% more lawsuits and you know, we're good. Yeah, let's take another question These are great questions so far. Hey guys, Rick Spencer. I hope Chamath gets to choose the wine this evening for dinner I did not get to choose your wine. So I apologize in advance What kind of water would you get?

This is the list of 2018 Chateau Conlefon, Brazil Oh, that's I love the bestie. Okay question So you've talked recently in episodes about the speed of AI the adoption and how the winners are still unknown That was reinforced in the sessions today a room full of investors How are you thinking differently about your investment, you know your strategic investment decisions and your strategy?

Are there opportunities to look at venture investing differently like venture studios, you know in the future of AI? I had this conversation earlier today. I think I started a company in 2006 Where we took large data sets and We built predictive models from those data sets and we use those predictive models to make analytical tools available to a specific vertical in our case agriculture farmers and the models were both Deterministic meaning there was kind of definitions algorithmic definitions of physical parameters and there was like all the statistical inference that you get from large data sets and It made recommendations for farmers What a lot of people are calling AI today is fundamentally a predictive model on text on language I am making a language predictor that gives you a sentence and it seems so profound because it is how we all interact with computers and interact with one another and As a result it is kind of viewed as this sea change across all of these industries instantaneously It's this whole new era But the fact is that Generally speaking the digitization of things and the amount of data that's being generated on earth is going up by some order of magnitude every number of months and Our ability to make predictions and build predictive models that are useful to specific vertical segments is improving every sequential cycle That this is happening across every vertical and it is continued and it hasn't changed and it's not any different So there's in this area of genomics and bioinformatics There is an absolute sea change happening in human health in synthetic biology And our ability to understand and predict the biological world and make changes and create new drugs Create new systems for producing molecules for producing things that humans consume and it is all buoyed by machine learning applied to large data sets and genomics and other metadata associated with human health and Biology and we're seeing the same thing in other areas whether it's chemistry material science Industrial application consumer markets and so on the era of what people are now calling AI is an interface layer of language That's really creating transformational opportunities on how these tools how these systems how these models can be utilized and provided to all these different verticals and allows us to rethink business models to rethink interaction models and To really change the economics of different businesses and the utility and the productivity of humans because it is about speech It is about communication is about what we fundamentally do as a species.

So I would argue that the general Trajectory of machine learning the general trajectory of data generation our ability to make predictions generate value across all these different markets is Continuing in the way that it has been continuing for the last 20 years and it is profound in its own, right?

and I wouldn't say that there's a massive sea change in that evolution because of Large language models large language models create another set of opportunities So I would kind of create a distinction and make sure that the categorization of the investment Opportunities in large language models be assessed on its own and everyone's all over the place as you guys probably heard today Foundational models are getting disrupted every other week.

They're being decreased in size parameters are being reduced. They're being commoditized You can run these things on m2 chips. Everything is up in the air right now, and it's friggin nuts You're gonna invest in a company at a 500 million dollar valuation and six weeks later It's gonna be worth zero because someone open source the exact same thing that you can now do for 100k So that's very difficult and very different then but there are still like these Incredible points of inflection happening across all these other industries with respect to machine learning and that's where I spend my time Chamathi want to add what you're looking at.

I think this is gonna be the big question. Yeah six or seven years ago There was a Google earnings release where they talked about building their own silicon. I've told this story before but I Ping those guys and I was basically like I just want to meet the team that built the TPU long story short a year later, I put them in business and You know, we've been building silicon for this moment for years.

It's been really really hard And the reason it's been really really hard is that Nvidia is just really really good CUDA is very very complete And it's just very difficult to justify why one would build Once you have something that you think is profound Through you know implement multiple SDKs to like multiple points of silicon just doesn't make any sense That being said I still think you need to be at the absolute bottom of the stack and the absolute top of the stack I think I'm a little too biased for saying the former Which is I'm hoping that there's vendor diversity in silicon diversity Because I think it's going to be really important I don't think we want to have a world where Nvidia runs away with it.

So I think there's Investment opportunity there just because I think everybody should want that to happen And then at the absolute top Freeberg's right that All these Foundational models I think are changing so rapidly that the thing that you want to figure out is like What are you seeding it with to drive learning that's unique and that's a data problem So there's an example that I've given this was a an example given to me By Nick Cash Aurora, so it's not I'm not going to take credit for it He's the CEO of Palo Alto Networks, but he was telling me You know when you look at travel The travel space all the public travel companies are like 300 billion dollars of public market cap Expedia Travelocity all these companies but they're pure middlemen And they sit on top of the data feed that comes from a handful of companies one of them is Sabre And so I went in I looked at Sabre Sabre is like a 1.3 billion dollar company a small little company But they are the ones that go into all the airlines extract all this gobbledygook data normalize it and allow Expedia Travelocity booking.com to exist in a world of machine learning where An ai where theoretically you can have conversational languages in inside of whatsapp or messenger or instagram You see this beautiful picture.

You're like book me a ticket to that place well Sabre is actually the key Value creator there And all these Expedia examples that are plugins at gbt make no sense. They make no economic sense. Those companies should go to zero so I've used that as a way a forcing function for me to try to prove that there's really these two barbells It's a barbell bookends one is a silicon and one of these sort of like data providers That's probably an investable thing.

That's defensible Everything in the middle. I think what what freebrook said is true, which is today It looks like it's worth a couple billion dollars tomorrow's worth nothing And so I think you have to be very careful if you listen to There's an interview that steven wolfram did with lex friedman if you guys listened to it A few weeks ago.

I had him on my pod a couple weeks ago, but haven't heard the free. Yeah, he's incredible Yeah, he's incredible If you listen to that interview, I think wolfram does a great job of describing the difference between inferential models or statistical models and computational models Statistical models are where you take large data sets and you build statistical models that infer And predict things in the future or predict things that you ask it to predict From the data set that it's trained on and then it creates a statistical representation It has a probability of being right or wrong and every prediction it makes and it creates a distribution of outputs from the model And you can train a model from nothing today Using a bunch of tools that are open source and generally available and a bunch of great silicon and all this amazing stuff That's that's that's now out in the world But there's a bunch of things that you can't Generate data and you can't necessarily train models on and that requires computational models models where you actually have to build some System That creates a deterministic outcome and deterministic means that it doesn't have a distribution of things that could happen It has one thing and it calculates it like two plus four is six There isn't a probability distribution on it being six two plus four is computable.

It is calculable. It is six the great unlock That I think is ahead of us still generally speaking with respect to large language models is the connection back To computational models is the connection back to structured data where you can make requests and integrate structured data into the output combined with inferential output And computational models where you can take the inference you can take the request and figure out what computational models Can I now run in addition to making a prediction about an output?

And that's where so much of the value is going to lie and it's going to require incredible software engineering talent Applied math statistics all the stuff that's made data science generally speaking So successful over the last two decades is going to continue and it's going to be this integration between computation And inference, um, and it's going to be applied in lots of different markets and it's going to be really powerful And we're all going to have our minds blown Just in terms of like the seed stage or super early pre-seed stage Two or three people who are obsessed with this technology who are playing with it every day Who are keeping up to speed on it?

And who understand some customer base whether it's delighting themselves or delighting some other customer base I'm willing to take that small bet on that 100k to 250k bet Because in the previous paradigm shifts or platform shifts cloud computing apps and before that desktop computing and the web You saw people start tinkering with stuff and whatever their first two ideas were are long forgotten Because they figured something else out and I kind of feel like that's the stage we're in There were a lot of people who were playing with iPhones in the app store and you know, they made a calculator or a flashlight that got built into the operating system as um, I think freeberg is specifically pointing out like you could just be part of the model and your whole business is wiped out We have one company that's trying to make itineraries for travel And I looked at what they're building and then you know, they're figuring out prompts.

They're figuring out the interface They're figuring out what people want And I did the same searches on chat gbd4 and I was like, it's not that much better what you're doing But it's better and your ideas are better. And so I think that they'll win the race and they only have to please You know, whatever number of users And this company could wind up being like I said before a 20 person company that does 50 million in revenue And I think that's going to be a very interesting future and it reminds me of the app economy There were a small number of acts things like distro kid or instagram Where small teams built things that printed money and had incredibly high margins So I think that's part of the opportunity here.

I do agree with chamath's point data is the new oil Whatever data set you have that you have that's unique is incredibly powerful in terms of defensibility And could help you to outpace one of the generic models This dude's been waiting, okay, dude, he's been waiting. All right lightning round.

Thanks david for the mic My name is raed must you transform vc in san francisco my questions for you chamath um in the last finally jesus christ something else What the fuck these guys So on the last one or two episodes I can't recall you um You brought up this whole idea is how do we get non-us-born?

American patriots to run for president so, uh as the growth hacking drunken master Um, what do you recommend? How do we propel this idea? How do we have it pick up steam? And not have to wait 25 years or whatever, you know, it can't happen in the next few years I think I do think there's a small probability could happen in 25 to 30 years, but Like the problem is that The people that Only j cal can be president on the stage.

Yeah, the three of us are fucked up This is but i'll put you guys in my cabinet. You've all got positions. I think the how is that you have Enough bottoms up citizen journalism and opinion formation That people can independently decide that on the margin. This is a good idea Like look, I i'm not interested in running for government But if david were in charge of something very important treasury or state I would have Immense confidence if freeberg were in charge of something I would have immense confidence.

So the idea that guys like this (laughter) The idea that guys like this and and oh because i'm born here so you don't have to say that Don't worry, you'll get the department of sanitation work. I'm definitely gonna win. No, so for sure. I'm gonna win postmaster general I do think it's a little it's a little crazy that Guys like these two get disqualified just because they emigrated when they were like four and six That's insane So I I think that if we're in the business of actually deciding that you want the best people for this country on the court So that we keep winning championships You don't tell janice.

Oh, you know, you were born in greece. So ciao. Ciao, you don't get to play that's crazy Put them on the court And let them win so I do think it takes 25 or 30 years though of us saying this because it has to be a groundswell of people that say I just want to win because i'm seeing all these other countries starting to win more And I don't think I want that for my children.

I think I did. I do think it takes a generation I don't think it happens today All right, guys in a couple of hours. It will be The sultan of science's birthday and alan keating's and alan keating's And yeah, that's right So I thought it would only be fitting if a hundred All in super fans took a moment.

I'm gonna sing in italian and sung Happy birthday to dave freeberg three two one Happy birthday dear free bird Happy birthday to you and many more All right, sultan of science I know your wish was to be a top 10 podcaster. It's come true. Finally. I'm like I gotta go into podcasting.

Yes Thank you ashley Will let your winners ride rain man david sax We open source it to the fans and they've just gone crazy with it Besties are gone My dog taking a notice in your driveway We should all just get a room and just have one big huge orgy because they're all just useless It's like this like sexual tension, but they just need to release them out What you're about to be Pure feet We need to get mercies I'm going all in you