E34: Wuhan lab leak theory, India's "traceability" law, Coinbase's fact check, Big Tech's Hollywood takeover

Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Referenced in the show: WSJ - The Wuhan Lab Leak Question: A Disused Chinese Mine Takes Center Stage https://www.wsj.com/articles/wuhan-lab-leak-question-chinese-mine-covid-pandemic-11621871125 Forbes - Friends Don't Let Friends Become Chinese Billionaires https://www.forbes.com/sites/raykwong/2011/07/25/friends-dont-let-friends-become-chinese-billionaires/?sh=44597352ddae Brookings - Fentanyl and geopolitics: Controlling opioid supply from China https://www.brookings.edu/research/fentanyl-and-geopolitics-controlling-opioid-supply-from-china/ NPR - 'We Are Shipping To The U. S.': Inside China's Online Synthetic Drug Networks https://www.npr.org/2020/11/17/916890880/we-are-shipping-to-the-u-s-china-s-fentanyl-sellers-find-new-routes-to-drug-user Coinbase - Announcing Coinbase Fact Check: Decentralizing truth in the age of misinformation https://blog.coinbase.com/announcing-coinbase-fact-check-decentralizing-truth-in-the-age-of-misinformation-757d2392d61a Show Notes: 0:00 Friedberg recaps Sacks' birthday party 6:47 "Wuhan Lab Leak" theory, did COVID come from a lab? Plusn China's fentanyl production 26:09 India's new "traceability" law 33:11 Coinbase & Brian Armstrong debut fact checking blog 41:17 Friedberg's science corner: groundbreaking gene therapies 45:06 Amazon's MGM acquisition, media consolidation 1:04:45 Biden's $6T infrastructure, Democrat's feeling the inflation pressure & responding

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Chamath Palihapitiya?

  Okay, so Jason, you're gonna send a Zoom link. Uh, great. I'm gonna make love to Natha. It'll take 70 minutes and then I'm gonna stretch and shower. I'll be ready at 1:15.

• 0:10Jason Calacanis?

  Okay, awesome. Thanks. I just puked in my coffee a little bit, but okay.

• 0:17Speaker 02

  It's just that he does, he gets seconds and minutes mixed up, you know?

• 0:22Jason Calacanis?

  Ah, got it. Seven seconds in heaven, got it. Seven seconds, got it.

• 0:29Jason Calacanis?

  Thank you for tuning into the All In Podcast. We got our cold open, 73.

• 0:32David Sacks?

  That's gonna be a highlight.

• 0:34Chamath Palihapitiya?

  That's, no, that should be the cold open. That should be the cold open.

• 0:38Jason Calacanis?

  Seventy seconds in paradise.

• 0:40Chamath Palihapitiya?

  Oh my god.

• 0:42Jason Calacanis?

  By the way, that's, all of these seconds includes Chamath brushing his teeth.

• 0:47Chamath Palihapitiya?

  Fuck you.

• 1:04Jason Calacanis?

  Hey, everybody. Hey, everybody. It is another edition, episode 34 of the All In Podcast. With us today, David Friedberg, the queen of quinoa, the science sorcerer of the pod, Rain Man David Sacks, hot off his 60th birthday bash in Los Angeles.

• 1:25Jason Calacanis?

  Sorry, sorry. That was just going by the, his looks. And the dictator, Chamath Palihapitiya, fresh off of writing editorials about himself in Bloomberg. Congratulations, everybody. Chamath, give yourself a pat on the back for that exceptional.

• 1:40David Sacks?

  Friedberg is not my favorite bestie because he actually showed up at my birthday party and like you guys.

• 1:44Chamath Palihapitiya?

  Oh, I'm sorry, David. David, how, how do you expect people to react in 24 hours to fly to a different city?

• 1:51David Sacks?

  It was a surprise. It was a surprise birthday.

• 1:53Jason Calacanis?

  Surprise to the guests.

• 1:54Chamath Palihapitiya?

  It was a surprise to all the invitees as well.

• 1:57Jason Calacanis?

  Let me tell you guys what you missed out on, okay? All right, wait, let's give background. Sacks is now... Forty nine, fifty years old.

• 2:03David Friedberg?

  Forty nine.

• 2:04Jason Calacanis?

  Seventy two. His wife decides to throw a last minute birthday party after I bought tickets to the Knicks and the Nets and invited family members. Go ahead. And now we're the bad guys.

• 2:17David Friedberg?

  We fly down for the birthday. They, you know, they shuttle you on the cars from the plane to the, to the house. We get to the house, long driveway. There's like dudes making like watermelon tequila beverages while you hang out and wait. There's some dude from America's Got Talent playing the guitar or playing the violin in the driveway. The bathrooms are nicer than the bathrooms I have at home. You know, these porta potties they rented in the driveway. And, you know, we're all waiting. Of course, Sax is late, two and a half hours to his own party. We're all hanging out starving. But then we go into the party, sit down for dinner, and then who shows up as our, you know, dinner experience? It's the guy that won America's, I, American Idol two nights before. So no one knows who this guy is except seventeen year

• 3:02David Friedberg?

  old girls and myself. So I like hop out of my seat. I'm like, oh my God, is that guy from American Idol? I had to rush into the backstage to get a photo with him, you know, Sax's garage. And then they have like, Coolio shows up. So we're like, sitting down at dinner for course two. All of a sudden, Pop comes out of the woodwork. Coolio, I lose my shit. I run up on the, you know.

• 3:25Jason Calacanis?

  The Coolio fan?

• 3:26David Friedberg?

  The dance floor. I grew up, Coolio like is like high school jams, man. I mean, that's like in the car cruising. And at this point, I'm like seven tequila, watermelon tequilas in. So I'm like.

• 3:35Jason Calacanis?

  Oh my God.

• 3:40David Friedberg?

  On the dance floor, you know, jamming at the Coolio. I think Coolio thought I was Sax, you know, because he's like, you know, he's like, oh, two South African Jews. You guys all look the same. Coolio comes up, starts high fiving me and hugging me. And I'm like, what's up, Coolio? Oh my God, this is like a dream come true. He's like hugging me. His face is right next to my face. I didn't know what to say. And I like, I'm, I'm, I've had a little bit of tequila and I, and I whisper in Coolio's ear. I'm like, I appreciate, I appreciate you. I didn't

• 4:18Chamath Palihapitiya?

  Oh my god.

• 4:19David Sacks?

  I think I saw Friedberg throw his panties on stage two at one point.

• 4:23Chamath Palihapitiya?

  You are such

• 4:24Jason Calacanis?

  Wow, what a nerd.

• 4:26David Friedberg?

  I don't know what to say. I mean, what do you say when Coolio's face is in your face?

• 4:29Jason Calacanis?

  Clearly you don't know what to say.

• 4:31Chamath Palihapitiya?

  Can I go back to the part where you said that you were dancing and instantly the image I had was Julia Louis-Dreyfus?

• 4:40Jason Calacanis?

  Yeah, we have to find that security footage.

• 4:43David Friedberg?

  And then Zach had like Mark McGrath from Sugar Ray performing and he had that dude from Cool and the Gang performing and the game showed up to give Zach's a birthday wish. What an incredible.

• 4:54Jason Calacanis?

  The rapper, the game?

• 4:55David Sacks?

  The game came, yeah. The game I was supposed to do a movie together like 15 years ago and, you know, never panned out, but he still remembered me and he came by to say hi on my birthday. It was pretty incredible.

• 5:04Jason Calacanis?

  Very nice.

• 5:05David Friedberg?

  Have you guys ever met Zach's parents?

• 5:08Jason Calacanis?

  Yeah, of course.

• 5:09Chamath Palihapitiya?

  At his 40th.

• 5:10David Friedberg?

  Yeah, they're so nice. Like

• 5:11Chamath Palihapitiya?

  They're so nice.

• 5:12David Friedberg?

  We spent so much time with them. We loved hanging out with them. It was a really, really cool party.

• 5:17Jason Calacanis?

  Happy birthday. Sorry we missed it. 72 hours is generally a shorter window than most out of city parties, but

• 5:25Chamath Palihapitiya?

  I have a better excuse. I had a corporate offsite for my team, so I apologize, Zach.

• 5:29David Sacks?

  It's okay. We missed you guys. It was really fun.

• 5:32David Friedberg?

  I can't wait.

• 5:33David Sacks?

  When Jacqueline sends out an invite for a party, you definitely want to

• 5:36David Friedberg?

  She knows how to throw a party.

• 5:39Jason Calacanis?

  She does.

• 5:39David Sacks?

  She knows how to throw a party.

• 5:40Jason Calacanis?

  She knows how to make it. So how does it feel being this old and just looking so exhausted, David? Tell us.

• 5:50Jason Calacanis?

  I mean, you do look exhausted.

• 5:52David Sacks?

  Jacob, aren't you turning 50 this summer?

• 5:54Jason Calacanis?

  I was, I was actually, I reached 50 in November. I did, yeah. I was in quarantine, so we're gonna have to have like a post.

• 6:00David Sacks?

  How heavy is that?

• 6:01Jason Calacanis?

  The 50? About 194, give or take. It wasn't actually super heavy for me. I mean, I think just you do think about, hey, we're counting down. It's the back nine. You want to make good use of the time you have left. And so, yeah, of course, it's something where you're going to consider, you know, your life, of course, yeah, and just make sure you make good use of the time that you have here.

• 6:25David Sacks?

  Yeah, I think 40 was just a party, but 50 feels a little bit heavy. It'll still be a great party, but it does feel a little bit metaphysical, I guess.

• 6:34Jason Calacanis?

  Yeah, I'm looking at metaphysical right now. So I'll let you know after I figure out what that word means. Well, okay, listen, we didn't get together on Friday, but here we are, recording on a Saturday, and lots of stuff going on. The thing I think I'm most interested in hearing from Friedberg about is the lab leak theory. And I think that this touches on a little bit of the politicization of science, I guess. There's a lab in Wuhan.

• 7:03Chamath Palihapitiya?

  I think it's more Trump derangement syndrome. It didn't allow us to see the forest from the trees. And the same words just said by a different president, all of a sudden invokes an investigation.

• 7:13Jason Calacanis?

  Yeah. So, I mean, there is a COVID laboratory in Wuhan. It is the only one in China. And that's where

• 7:22David Friedberg?

  It's a virology labs where they study viruses and

• 7:25Jason Calacanis?

  Yes, but specifically, they've studied COVID viruses.

• 7:29David Friedberg?

  They have. Yeah, that's, I mean, that's a big class of virus. So

• 7:32Jason Calacanis?

  And it's the only one in China? And it's funded by America and China and the who?

• 7:39David Friedberg?

  The Wuhan Institute of Virology. I mean, this is, this is, I mean, this is a

• 7:44David Sacks?

  The Wuhan Institute of Virology was posting job recs two years ago for specifically for researchers of bat viruses. We know they were studying bat viruses at this place. And Wuhan just happens to be the place where a novel coronavirus that seems derived from a bat virus, you know, like emerges. I mean, what are the odds, right? I mean, this was such an obvious theory, the idea that

• 8:10David Sacks?

  You know, COVID might have leaked from from this particular lab and yet we were forbidden from talking about it, I guess, till Donald Trump was out of office. I mean, I think there's really two stories here. One is Chinese culpability, you know, in in the spread of the virus. The other one is the media story. Why were we not allowed to have this discussion? Why did the media brand anybody who discussed this leak theory as being some sort of conspiracy theorist or a racist? Why were big tech companies censoring or removing any user generated content from their sites that were putting forward this theory? Um, you know, why was the media and big tech doing this? I mean, is it somehow?

• 8:49Chamath Palihapitiya?

  I can, I can tell you why.

• 8:50David Sacks?

  But somehow they were telling us it was more racist to talk about a lab accident than to

• 8:56Chamath Palihapitiya?

  David, because the person who could have explained it in a deescalated factual way chose to escalate it and be emotional and superficial, and that was Donald Trump. And so I don't, I don't think that you could point to us and say, we could have changed how the narrative is exploited. All of us are just normal, average people on the ground. But there probably is sort of, you know, a hierarchy of like information and there probably isn't a single individual, individual beyond the president who has access to more information. And so if he was, if he was just more moderate and normal and basically said, hey, guys, there is a legitimate risk that we need to investigate because fast forward, basically 18 months later, and this president, who is moderate, you can like

• 9:41Chamath Palihapitiya?

  him or not like him, but he's kind of moderate and unoffensive, says basically that. And now we have this news cycle about investigating something we should have been investigating 18 months ago, just at least to get to the bottom of it, what was going on. But Trump had to make it such a big deal and about himself. And I think that's the takeaway.

• 9:59David Sacks?

  But just because Trump says something doesn't mean it's not true. I mean, he is occasionally going to say things that are true and

• 10:06Chamath Palihapitiya?

  That's not what my point is. My point is, as the president of the United States, you just have to have more discipline.

• 10:11David Sacks?

  Well, but, but I think you're right in the sense that the reason this became a forbidden topic is because the media had to act like anything Trump said is is untrue or crazy or racist.

• 10:21Chamath Palihapitiya?

  It's a failure on both sides then, David. I mean, the, the media is failing to be independent critical thinkers and Trump is failing to be a good leader and be clear. And that means you have to be an independent, critical thinker.

• 10:33David Sacks?

  The media's first obligation here is to the truth. They're not supposed to distort the truth or push forward a false narrative because of the political consequences and they didn't want to be seen as helping Trump in any way. And that's really what their motivation was. But I find it equally disturbing that big tech was censoring the truth on this issue. The whole point of having a free marketplace of ideas is so that we can arrive at the truth. And how's that can be possible when big tech is censoring?

• 10:58Chamath Palihapitiya?

  I really disagree with you. I think that the the big tech's decision to censure this information was a was a derivative of the first two things. Like, I don't think that decision would have happened had Trump been normal. And then, you know, media would have just listened and said, okay, maybe there's a chance this guy is right. He's saying and acting in a normal way. Let's go investigate. And then big tech would have basically said, we don't know the truth one way or the other, but it seems legitimate, sane people are on both sides of the issue.

• 11:29David Sacks?

  So because Donald Trump published mean tweets, it was okay for big tech, or rather the media, to basically portray the correct theory as a lie and a conspiracy? And it was okay for big tech to engage in censorship on that basis?

• 11:41Chamath Palihapitiya?

  What I'm saying is the following. The President of the United States, independent and whoever it is, has a very specific responsibility to be measured, to be unemotional, and to be about the bigger picture. That's what the President of the United States's responsibility is, no matter who holds the office. And then the media's job is to fact check that and hold that person accountable and cull that person in a transparent manner.

• 12:09Jason Calacanis?

  Friedberg, yes or no? Is it a viable theory? And then, let's get to odds and percentages. I mean, as a scientist, do you think that this is because came from a wet market or some accidental exposure, somebody eating bad, or some cross contamination, a bat and a pig, and then somebody eats the pig? Or do you think somebody from the lot from the lab accidentally brought it home with him?

• 12:34David Friedberg?

  Don't know, doesn't matter. I feel like we need to kind of recognize that bio-warfare, bioterrorism is a real risk, and I think more importantly, that this moment, whether or not it's proven, and it will never be proven or disproven one way or the other, so it really doesn't matter. What will ultimately happen is we are going to kind of become much more cognizant of these sorts of threats to the human population. Let me be very specific. A kid in high school could write up some RNA code today on their computer, order that RNA to be delivered to them by what's called an oligo-printing facility, get this RNA, boot it up, turn it into a virus, and they could release that thing into the wild.

• 13:19David Friedberg?

  There are several very cheap, over-the-counter, internet-based ways that one could do this. So the fact that there's some sophisticated government-run lab doing this, I don't think matters as much. What's really compelling in this whole storyline is like, holy shit, this is possible. It's possible that there's either an engineered or discovered virus, and it shows just how, if these things leak out, and they are infectious, and they are transmissible, can become a real risk to the global population. And it's not just viruses. There are other mechanisms of bio-warfare that can be printed and created using similar techniques of genomics. There are proteins called prions, and prions cause other proteins to fold in a mismatched way.

• 14:03David Friedberg?

  This is actually what mad cow disease is. It's a prion, it's a protein that you find in the brain, and if you eat this particular protein and ends up in your brain, it causes the other proteins in your brain that match that protein to misfold, and it basically replicates and creates this cascading effect.

• 14:18Jason Calacanis?

  So basically like aliens, like aliens.

• 14:20David Friedberg?

  Yeah, but I guess my point is, like, whether it's prions or viruses, there are techniques, and there are capabilities and instruments now that all humans have access to, that theoretically could allow for the booting or the creation and the distribution of truly terrifying tools, biological tools. Now, this comes hand-in-hand with the incredible optimism and opportunity that Tools present much like chemical engineering presented in the early 20th century to humanity. We could create things like DDP and kill ourselves, or we could create things like artificial fertilizer and feed ourselves. And so there's this tremendous, as there is with any new technology, this tremendous kind of optimism and fear. And it's going to create, I think, a very powerful debate narrative over the coming decade.

• 15:05David Friedberg?

  On what do we do with these tools? Is it even possible to regulate them? Where is this going to go? And what are the risks? And it's not necessarily just government agencies that we need to kind of be considering here. It's the fact that there's a democratization of this tooling, which is enabling all this great innovation.

• 15:20Jason Calacanis?

  Does it, Sax, does it matter if it was leaked or not? Friedberg is saying it doesn't matter, big picture.

• 15:25David Sacks?

  Of course it matters. And the only reason we don't know conclusively that it came from a lab is because the Chinese government wouldn't let, they thwarted the investigation, they wouldn't let the investigators come in. And so the smoke is pouring out of the Wuhan Institute of Virology and they will not allow the firefighters in because those firefighters come from the West. We could establish the truth of what happened if they would let us talk to the scientists who work at that lab. If they could go.

• 15:54David Friedberg?

  What would you do about it? Let's say that you find out that it did leak.

• 15:56David Sacks?

  Yeah, well, at a minute, well, first of all, we're talking about a virus that's killed millions of peoples, millions of people across the world. It's caused enormous damage to the economy, to our economy, to economies all over the world. You know, we have to think through carefully what the consequences would be. But it matters a lot how the Chinese government handled this. At a minimum, at a minimum, we need to decouple ourselves from China with regard to anything. That's a vital American interest. We cannot be dependent on them for the manufacturing of our PPE, for our antibiotics, for our pharmaceuticals. It is insane.

• 16:30Jason Calacanis?

  So there's nothing we're going to do, there's nothing we're going to do to China in terms of sanctions. If we find out they covered up a leak, if there's an accidental leak and they covered it up. We're not, it acts only as a, it acts more as a warning sign for us to do better and be more independent.

• 16:48David Friedberg?

  It's a principle of escalation. They are still the critical supplier to most of American manufacturing and industry. Every product that American companies make, most products have some sort of Chinese-produced input.

• 16:59David Sacks?

  Well, I would start, I would start with, I think the measured response that's also in our national interest is to reshore any critical components that we need for our pharmaceutical industry. So drug manufacturing and the manufacturing.

• 17:13Jason Calacanis?

  So it's not about sanctioning China, it's about getting our act together. Chamath, you agree with this? And what do you think? If we did find out that it was in fact a covered-up leak, which I think is the most reasonable assumption here, what should we do as America? As a country, global reaction to China?

• 17:33Chamath Palihapitiya?

  I agree with Friedberg and David Sacks in parts. There's nothing to do. I think we have to move on. I think it's important to get to the bottom of it. It'll maybe help eliminate some of the politicizing of science that we've seen as a result of this thing. But ultimately, what's done is done. Instead, what I think we have to learn from it is you can't elect hot heads and people who are unpredictable and unreliable to basically be our truth tellers and fact tellers. And if anybody but Donald Trump was the President of the United States in that moment, we probably could have had a chance of getting to the

• 18:15Chamath Palihapitiya?

  bottom of it when it counted. And whether you support him or not, it doesn't matter. The style made it impossible for anybody to really listen. That, to me, is the most important takeaway of that moment, which is he does have a responsibility above everybody else's. The second thing is, I think this is the most important macro investing theme that I've seen in my lifetime, which is that globalization as we know it is over. And what Sacksy Pooja said is what I really believe, which is that you have to onshore and you have to move to a place where you value resiliency over just in time. And if you look at the businesses that get, that need to get built in order to enable resiliency,

• 18:59Chamath Palihapitiya?

  you will see trillions of dollars of opportunity. And I really, really believe in that. That's, that's very exciting to me. So instead of, yeah, instead of being anti-China, which I don't think is productive, I think it's better to be pro-America and say, hey, let's just figure out how to build this stuff ourselves. Now, here's the problem, though. When the rubber meets the road... The biggest impediment to onshoring jobs into the United States are the same people on the left who actually claim that there is no upward mobility. And here's why. When you go and you want to basically balkanize supply chains, you are introducing inefficiency. You're also introducing some puts and takes in areas that today have been like third

• 19:41Chamath Palihapitiya?

  rail issues. For example, the people on the left believe in climate change more than anybody else. But when you explain to them that in order to eliminate hydrocarbons, you actually have to mine critical minerals and metals out of the ground, they're the same people that say, no way. Well, you can't have one without the other. And you actually have to have a rational conversation and realize like, listen, we're going to have to do this. And so, for example, like Biden this past week somewhat capitulated for environmental interests and said, you know what? Yes, climate change is critical, but we're going to try to get them from everywhere else but America. It's not going to work. So that's kind of where like I'm a little frustrated. But those are my two takeaways. Number one is

• 20:24Chamath Palihapitiya?

  pass, let's just get past China and let's just focus on the United States. And number two is globalization as we know it is done, and we need to focus on resiliency.

• 20:32Jason Calacanis?

  Did you guys read the Wall Street Journal piece on the miners who in 2012 were the ones who, you know, were clearing essentially bat dung?

• 20:45Chamath Palihapitiya?

  Bat dung.

• 20:46Jason Calacanis?

  Yeah. And so this, this is a really fascinating turn of events that we're starting to know what this lab was doing. If you didn't see the Wall Street Journal story.

• 20:55Chamath Palihapitiya?

  We'll put it in the show notes.

• 20:56Jason Calacanis?

  Yeah, we'll put it in the show notes. But in April 2012, six miners fell sick with a mysterious illness after entering the mine to clear bat guano, I guess, is what.

• 21:03Chamath Palihapitiya?

  Poop.

• 21:04Jason Calacanis?

  Bat poop.

• 21:06Chamath Palihapitiya?

  Bat poop.

• 21:06Jason Calacanis?

  Which is supposed to be.

• 21:07Chamath Palihapitiya?

  It used to be the primary source of fertilizer worldwide.

• 21:09Jason Calacanis?

  Yeah. So three of them died. Chinese scientists from the Wuhan Institute of Virology were called in to investigate after taking samples from bats in the mine identified several new coronaviruses. Now unanswered questions about the miners' illness, the viruses found at the site and the research done with them have elevated into the mainstream and idea wants to. dismissed as a conspiracy theory that SARS-CoV-2, the virus that causes COVID-19, might have leaked from the lab in Wuhan. I mean, this is just becoming more and more obvious. My, my gut tells me that our government already knows this, has known it for some time. The 90-day sort of window that they've given the Chinese to kind of give us an answer as to what happened here

• 21:50Jason Calacanis?

  is window dressing and then we're going to start the process of becoming more independent from China. Because there's, I mean, there's nothing you could do. I mean, how could we retaliate for an accident?

• 21:59David Sacks?

  We're not going to get in a war over this. No one's suggesting that, but I think we have to open our eyes to the regime that we're dealing with over in China. And just to lay, to add a layer to this analysis, novel coronas, coronaviruses are not the only thing coming out of Chinese labs. China is also the number one producer of fentanyl.

• 22:19Jason Calacanis?

  Obviously.

• 22:20David Sacks?

  Yes, and that's another truth that we can finally talk about now that Trump is out of office. People haven't wanted to talk about it or they thought that you were hysterical or promoting a conspiracy theory if you talked about it. But I just posted two articles in the chat, one from Brookings and one from NPR about how China is the main source of fentanyl that's pouring into our streets. At first it makes a stopover in Mexico and then somehow it gets smuggled into the US. This is a huge problem in our cities and, um, you know, I, I think this is not, this is not accidental. You know, this is, um, this is deliberate.

• 22:57Jason Calacanis?

  So the Chinese, your position is the Chinese government is deliberately sending a super opioid drug into the United States for profit or to destabilize the country and different cities and create more division between the left and the right because homelessness and wealth inequality is getting mixed up with a super drug as opposed to a homeless problem.

• 23:19David Friedberg?

  This is getting a little, this is getting a little, um.

• 23:21Jason Calacanis?

  I know it's getting crazy conspiracy. Well, that's what I'm reflecting back to Sacks.

• 23:25David Sacks?

  But, but how's it a conspiracy theory? We know that China is mass producing the fentanyl that's coming into the US. We know that that fentanyl is creating a gigantic crisis of drug addiction and homelessness on the streets. We know they could stop it if they wanted to. They have total control over that country. What is a conspiracy theory?

• 23:45David Friedberg?

  Yeah, I don't know if that's the equivalent of saying America produces all the world's cars. It's not America. There are organizations within the United States that are under the purview

• 23:55David Sacks?

  The CCP is handpicking who gets to run ByteDance and Ants and their retiring CEOs. They get to decide what is producing that country and who produces it. You're telling me that fentanyl can be just-

• 24:07David Friedberg?

  What do you think is going on in the federal government when they say to their counterparts at the Chinese Communist Party, "Hey, we need you guys to stop producing fentanyl"? Do you think that conversation's happening?

• 24:18David Sacks?

  Yeah, this was an agenda item during the Trump administration and talks between-

• 24:23David Friedberg?

  Do you have any sense of what the feedback was from China? I mean, what's the counterpoint? I don't know enough, but what is the counterpoint that China would then say? Like, why they can't stop it or why this is still happening? I mean, my understanding is there are thousands of kind of, you know, call them under-regulated factories and facilities in China, any number of which this could be-

• 24:41David Sacks?

  Let me ask you a question. Does China have a fentanyl addiction problem in their streets? We don't know. I mean, maybe they do.

• 24:49Jason Calacanis?

  The answer is no, and the answer is they round up every single person who's a Hong Kong dissident who would sell a book or if anybody goes to the Tiananmen Square protest- You're going to jail for five years. They just announced Hong Kong citizens who go to the Tiananmen Square Memorial this year are getting five years and if you tweet about it, you get one year in jail. So they can, they can control anything in their country.

• 25:12Chamath Palihapitiya?

  Just to build on your control point, I tweeted this to you guys in the group chat. We can post this as well in the show notes, but there was an article in Forbes this week that said, "Friends Don't Let Friends Become Chinese Billionaires." That was the title and the data point that-

• 25:26Jason Calacanis?

  This is an old story, by the way. It's like eight years old, just so you know.

• 25:29Chamath Palihapitiya?

  No, no, no, this was written now.

• 25:31Jason Calacanis?

  That might have been, no, I think, read the story. I think at the top it says the story is like eight years old. But anyway, it is true that Chinese billionaires disappear.

• 25:39Chamath Palihapitiya?

  A Chinese billionaire dies every 40 days. Unnatural deaths have taken the lives of 72 mainland billionaires over the past eight years. Fifteen were murdered.

• 25:45Jason Calacanis?

  It's the Wild West over there, man.

• 25:47Chamath Palihapitiya?

  Seventeen committed suicide, seven died from accidents and nineteen from illness and fourteen were executed.

• 25:52Jason Calacanis?

  Suicide, accidents?

• 25:54David Sacks?

  What do they execute the 14 for? Can you imagine 14 billionaires just get executed?

• 25:59David Friedberg?

  Is that story real? What is that story from, Chamath?

• 26:01Chamath Palihapitiya?

  I mean, well, this maybe is a good segue into Coinbase fact check, but this was an article in Forbes.

• 26:09Chamath Palihapitiya?

  All right, India versus WhatsApp. Well, I'll give you the rundown on the India thing. So basically, you know, there is a right to, you know, free speech effectively in the Indian constitution. But then India passed a law, effectively, I'll just summarize it as traceability, which basically means that if you have an online network and you post something in the network, if an Indian censor or an Indian regulator or authority basically says, hey, hold on, this is an issue, they have the right to basically have the network, or whoever owns that network, trace it down to its originating source. Now, that's a really important distinction because there are certain products,

• 26:49Chamath Palihapitiya?

  so for example, take WhatsApp, where a feature of that product is end-to-end encryption. Right? So it's hopping around in ways that are very difficult and near to impossible for anybody to really figure out. And now, all of a sudden, that element, which used to be a feature, is now a bug, because if the Indian government says, hey, hold on, that statement I have an issue with, I need you to figure out who said that, they'll essentially have to undo all their end-to-end encryption to figure it out. So then WhatsApp filed a court case in New Delhi this week, essentially, I think, asking for an injunction, and so I think this is going to go to a head. But you have this now state of affairs, which I think is really interesting, which is so,

• 27:34Chamath Palihapitiya?

  you know, we talk about how we have an issue with Chinese censors. Well, now here's a different, more complicated example, because this is the largest democracy in the world, and what they're effectively saying is, we need to have an equivalent red button and a set of levers so that we can figure out what's going on when we choose. And there's going to be a lot of implications, because inside of India, what's different than America as a democracy is, it has lower average incomes, it has lower health, it has lower literacy rates, it has more religious sort of tension, and it's got, you know, many, many more young people, who are more prone theoretically to get, you know, bamboozled by misinformation and disinformation.

• 28:19Chamath Palihapitiya?

  And so, you know, India sees those facts on the ground and probably wrote this law with those intentions in mind, right? And it's had a bunch of these issues, by the way, particularly between Muslims and Hindus. And so what do you do? You know, what is Facebook and WhatsApp supposed to do? What is Google supposed to do? What does it mean for internet rights? I think it's a super, super complicated problem. And do you prioritize misinformation and disinformation above the right for people's privacy? And you're going to see it unfold in the largest democracy in the world over the next couple of months. I don't really know how I feel about it, to be honest, except I do think that Indian government has a right to set the rules of their own country.

• 28:59Jason Calacanis?

  Well, and set the rules they are. I mean, remember, they also banned TikTok in an instance and hundreds of other apps. I think 60 apps from China have been banned permanently in India. So India obviously has a different approach to China, which is we're going to put our foot down. Now, of course, they're involved in some skirmishes on their border. But yeah, it does seem, Sax, what you would thought you have personal right to privacy, end to end decryption, and then you have, you know, the ability to run.

• 29:27Chamath Palihapitiya?

  Backdoor, a backdoor to it.

• 29:29Jason Calacanis?

  Yeah.

• 29:29David Sacks?

  This is another major sledgehammer to globalization. You know, in the, in the mid to late 90s, we had this beautiful dream that we're going to create a single internet for the whole world. It would create a single common market, a single place for people to interact and go. And that all of these barriers, these geographic barriers, tribal barriers would come down over time. And now what we see is the trade barriers have come up. And now, instead of having one internet for the whole world, it's fragmenting into a bunch of different internets governed by local laws. You know, it started with the, the great firewall of China, creating sort of a separate Chinese internet. Now you're starting to see country by country regulations. And I just think it's, it's sort of an inevitable reaction that

• 30:13David Sacks?

  the power of governments and sovereignies comes before the, the power of corporations and they're re-imposing their will. And I think the question for all these companies is going to be where they decide they're willing to play. And, you know, I think, now, I do think it's a very different choice, whether you want to play in India or whether you want to play in China. Because in China, when the government tells you to hand over information on dissidence, you really are aiding and abetting what could be political oppression. Whereas India being a democracy, I don't think the choice is quite the same at all. And so, you know, I do think these tech companies are going to have to decide which countries they want to sort of play ball with. And ultimately, I think they probably have to make a determination

• 30:58David Sacks?

  based on working with the democratic ones, and they're probably going to have to exit the ones that engage in political repression.

• 31:04Chamath Palihapitiya?

  In my, first of all, I think that's really well said, what you said. In my, in my annual letter last year, I kind of wrote like, here's the white paper on how to dismantle big tech. And there were two frames. One was around taxation, which we're also seeing. But the second was on this regulator regulatory point, David, that you're bringing up. That's the simplest way to sort of break these companies down, which is if you have to engineer now, instead of one monolithic code base, multiple instantiations where you can't even get the leverage of like, you know, cross border data centers. I mean, by the way, there, there, there's a really interesting thing that the Biden tax bill also proposes on this dimension, right? It's going to prevent you from sending IP, you know, into places like, like Ireland

• 31:46Chamath Palihapitiya?

  and keeping it there, right? So you can't have all of a sudden, you know, code that's running in Ireland that executes something that makes money so that you can pay Irish tax versus something code that runs in America that's largely, you know, user oriented. That's not going to happen. That's not going to be allowed anymore. Right? So all of these things are happening at the same time, essentially to rein big tech in, making it almost a whack-a-mole problem inside these companies where you're fighting a tax thing. For example, Google's fighting antitrust in France. Then you're fighting antitrust at the EU level. Then you're fighting, you know, traceability and encryption in India. Then you're fighting, you know, inversion of, uh, and IP in America. Wow. Like, it's like, all of a sudden, the lawyers

• 32:29Chamath Palihapitiya?

  inside of these companies will outnumber the engineers.

• 32:32David Sacks?

  And I think a lot of this is the downstream consequences of what happened back in January, when Twitter and all the other big tech companies deplatformed Trump. Remember at the time, it wasn't just, you know, conservatives or in the US who raised alarm bells. It was Angela Merkel in, in Germany. It was the finance minister in France, I think India, you, uh, talked about it. I think Modi had a statement about it. They all woke up and said, whoa, a head of state can be deplatformed by Jack Dorsey. He's more powerful than the President of the United States. And countries all around the world started looking at the power of big tech and realized that they're subordinate to all of these tech billionaires and oligarchs.

• 33:11Chamath Palihapitiya?

  Tell me about Coinbase and Fact Check. It's incredible. I mean, I have to say, by the way, the first thing I'll say about, and this is, this is the exact opposite of what I said the last time Brian Armstrong wrote a memo. This memo is excellent. And if you haven't had a chance to read it, we'll put it in the show notes. But Brian's essay is super. I think there have been a couple of CEO memos in the last two months that I think honestly should be in the Hall of Fame in the Smithsonian. One is the Toby Lutke memo. That the internal email he wrote. And the second one is this one that Brian wrote, because I think this, this thing is probably one of the most important things. In my opinion, that has been written by a CEO, which has the potential to lead to huge systemic changes.

• 33:53David Sacks?

  Well, he echoed, he echoed a lot of the things we, we've been saying on this pod about going direct. Don't let the press tell your story. Go direct. Get, get the truth out. Um, they're basically what the, what the blog said is they're going to start using the Coinbase blog as a forum, basically as a media publication for, for crypto related things. And the fact check part is that when the popular press gets crypto wrong, which they do frequently Coinbase's view. Coinbase is going to call them out and correct them.

• 34:23Jason Calacanis?

  Yeah. So basically here's what he says. The increased awareness has been great. Unfortunately, we also see misinformation published frequently as well. Whether in traditional media, social media, or by public figures, this doesn't always come from negative intentions. Our business and crypto can be difficult to understand. And often people are rushed to post first impressions online, making mistakes in the process. At other times misinformation comes from people publishing their own agenda or from people who have a conflict of interest. This is not unique to our business or industry, of course. So how should companies respond? One, turn the other cheek. Two, fight. And three, publish the truth. I believe there is a reasonable middle ground between these first two options. Turning the other cheek and fighting, which is to simply publish the truth in a thoughtful and respectful way.

• 35:03David Sacks?

  The, the way you fight back is you publish the truth. So to me, that's not a choice. Those are the same thing is you can either remain silent. Take the high road, which always results in people believing whatever, you know, lies are, are being said, or you fight back by telling the truth.

• 35:20Jason Calacanis?

  Fact check approach is not about antagonizing or embarrassing others. This is Brian Armstrong, but simply sharing what happened through our own channels. It also means sharing the good along with the bad with radical transparency.

• 35:32Chamath Palihapitiya?

  I just want to say that I wish him all the success in the world because I think if, if, if and as this works, which I think it will, because people in the crypto universe are more prone to actually get their own information and do their own diligence. I think the spillover effects to other companies can be really positive. All of this is going to the same place, which is the intermediary layer of traditional media is basically getting whittled down, right? There was a, there was a different thing that happened in those last few weeks, which was the Tribune Company, I think it was, basically got taken private by some hedge fund. And in it, they talked about what has happened in the industry. And the most incredible thing was the amount of revenue that has disappeared from newspapers.

• 36:16Chamath Palihapitiya?

  And literally from the tens of billions of dollars to basically single digit billions today over the last 20 years, which effectively means traditional media's revenue source is going away. And if then, all of a sudden, if you take that media model away, and there are no more economic incentives, then it stands to reason that the overarching incentives that remain are around reputation, which is then about facts. And so the fact that Coinbase will have a place that says, here are the facts, and we're going to put it on chain permanently on the record. That's, I think, a really powerful idea. Andreessen Horowitz, by the way, same situation. They're doing it in venture capital, you know, one of the largest and most prolific

• 36:58Chamath Palihapitiya?

  and important sources of funding the future. They're on the record on chain in their own way, right? With their own media and, and they're now helping to tell the stories of other folks through it. David Sacks, you know, Sacks has put so much content

• 37:14Chamath Palihapitiya?

  in terms of teaching people about the business that he knows really well. But at the same time, he's also been able to write about what he thinks about certain things. And then eventually, on behalf of his companies, he'll be able to say things and do things as well. So all of a sudden, not all of a sudden, I guess we've seen it, but if we had to put a label on this, this is the dismantling of traditional media. It is happening in real time. And it's accelerating.

• 37:36Jason Calacanis?

  It turns out, you know, as a subject being interpreted as your being through the New Yorker right now in your story, Jamath, and I am through my Business Insider profile, you know, all these profiles that they do, they're interpreting your life when people could just tune into the podcast and hear us talk about it, right? And it's like you can go direct to the source and listen to 34 episodes of All In, or you could read some interpretation from somebody trying to get page views.

• 38:01Chamath Palihapitiya?

  Well, here's my, here's my observation. The thing is that people who create artifacts on a real time basis, so in many ways, we have all collectively now started to create a weekly artifact of who we are as people. It leaves very little left over for interpretation. And so then unfortunately, what happens is journalists trying to write content have to introduce some form of flourish to stand out.

• 38:25Jason Calacanis?

  Yeah.

• 38:26Chamath Palihapitiya?

  Because if you're just repeating something that was said on the podcast, or something that we said in a tweet, there's nothing left to talk about. It's kind of already been said. And so that's what creates boundary conditions for lying. And it's what creates boundary conditions for mistruths. And we've seen a handful of reporters back in the day fall, you know, fall into that trap. You know, there was a couple of writers in the New York Times that got pinched for lying. It's going to be harder and harder to lie. So in many, in some ways, I'm actually pretty optimistic that, that reputation management and truth will be easier to do in the future when this intermediary layer doesn't exist. But it'll take many other companies to do what Coinbase is doing and recent, us in this podcast, us with our tweets and our memos and our posts. I think it's, it's all in a good, positive direction.

• 39:10David Sacks?

  Yeah. And Armstrong in his, in this blog talks about the gelman amnesia effect, which we've talked about on this pod before, which is

• 39:17Jason Calacanis?

  Yeah, I saw that. Yeah.

• 39:18David Sacks?

  Yeah, which is great. I love that. Because, you know, the gelman amnesia is you read the newspaper about a topic you know something about, you see that 50% of it is just wrong. Then you turn the page to some other part of the newspaper, say, you know, world affairs you don't know as much about, and you just assume it's true. And we all know that the media is maybe 50% right about everything. And so, yeah, I mean, so this is why we have to hear from experts directly. I think it's why, it's a decentralization. Of media. It's why I think this like heavy handed centralized censorship by big tech is so offensive and anachronistic is to try and control what everyone can say, especially when it later turns out that, you know, big media gets so many things wrong, like the lab leak theory.

• 40:02David Sacks?

  So it's, it's, this is definitely the way things are headed.

• 40:05Chamath Palihapitiya?

  I would like to invest some money to basically get Friedberg a platform to explain science.

• 40:11Jason Calacanis?

  Well, that's right here. Friedberg, tell us about the science of NBA games and large gatherings in the age of vaccination.

• 40:19David Friedberg?

  I'm pretty sure you got COVID this week, Jake out.

• 40:22Jason Calacanis?

  I'm pretty sure I definitely lost my voice at the Knicks games, but I have to say this was pretty stunning to go to a Knicks game, have everybody in the arena show their vax card to get in. I suppose somebody could photocopy one or steal one, you know, it sounds like a lot of work and I don't know what the, if there's any penalty for doing something like that. But what, when you see a full arena, Madison Square Garden, everybody vaccinated, Friedberg, do you, does it give you any pause as a scientist that this is not a good idea or this is too soon? Or do you think, heck, yes, this is what we should be doing, proper risk assessment, finally?

• 40:59David Friedberg?

  No, we should do what we want to do.

• 41:02Jason Calacanis?

  They have it, folks, science. Science, do what you want to do. There's a great science moment. Way to keep the Friedberg ratio high.

• 41:11David Friedberg?

  That was supposed to be the science segue?

• 41:13David Sacks?

  We're, we're ready for a monologue. Let's go, Friedberg. Come on.

• 41:15Jason Calacanis?

  Let's go, Friedberg. We're poking the tiger here.

• 41:17Chamath Palihapitiya?

  Friedberg, why don't you tell, this is something I thought was incredible. Amgen this week, at the end of this week, got approval for this really incredible drug that basically targets KRAS mutations in lung cancer, which has been this body of cancer that has basically been somewhat intractable for a really long time. And these guys have cracked the code, it looks like. And now the drug is 18,000 a month, I think, but, you know, that's, that's for insurance to take care of. But pretty incredible breakthrough that people are talking a lot about. I don't know if you, if you were tracking it.

• 41:48David Friedberg?

  No, but I think that there were several other gene therapies. There are several

• 41:55David Friedberg?

  drugs that got approval in the last like month. One of which is this, or actually it was about two months ago, this drug that.

• 42:05David Friedberg?

  Uses targeted CAR-T therapy. Basically, you know, we all have T cells. And we can edit our own T cells now using this CAR-T therapy. This is a series of techniques where you basically reprogram your T cells genetically to go after a specific target in your body. And so there are now a whole series of CAR-T therapies that are coming to market, that are actually in market. You can go down and go get treatment today for several of these CAR-T therapies that, you know, not too long ago were really difficult to kind of understand, you know, being real. They take your T cells out of your blood, you know, so you go in, you get your blood drawn.

• 42:48David Friedberg?

  Couple of weeks later, you come back to the doctor, they've taken the T cells out of your blood, they re-engineer them. The way they re-engineer them is really interesting. They basically use this technique where they zap them with electricity and it gets this gene editing in there and then they get edited. And then they put those T cells back into your, in your body. Takes about an hour to get them re-injected back into your body and then they do their job. And they, in many cases, are being used to target cancer cells. It's very specific receptors. So now the T cell has been programmed to go find that cancer cell receptor. They hit the cancer cell receptor, bind to it, and then eliminate that cancer cell.

• 43:23Jason Calacanis?

  So essentially, in plain English, you're putting this super T cell back in the body, it goes through the blood, and then it finds something far in that shouldn't be there, like a virus or cancer.

• 43:35David Friedberg?

  You can find anything you want to go find.

• 43:36Jason Calacanis?

  Bacteria, whatever you want it to find, and it snipes it.

• 43:39David Friedberg?

  But yeah, what it does, remember, it's looking for a specific protein. And that protein, for example, can be expressed only on the surface of specific cancer cells. So if you found certain cancer cells, then you have a cancer. And we know that there's a specific protein that shows up on the surface of that cancer, which is common in many cancers, because they all follow very similar kind of, you know, mutations. You can end up targeting that cancer cell and only that cancer cell, and your T cells go to work and they go and wipe it out.

• 44:07Chamath Palihapitiya?

  I think the breakthrough this week was in multiple myeloma and thyroid cancer.

• 44:11David Friedberg?

  Yeah, there was a multiple myeloma one, which was a bluebird bioproduct.

• 44:15Chamath Palihapitiya?

  Yeah.

• 44:16David Friedberg?

  And then I think it got picked up by Bristol. Or someone else picked it up. So they basically paid the fee and they run their own good manufacturing practice facility where your blood is shipped to them. They do all the gene editing with your own T cells in this facility and they ship it back to your doctor and it gets re-injected back into you.

• 44:36Jason Calacanis?

  There are 600 CAR T cell. Is that what it's called? CAR space T cell?

• 44:42David Friedberg?

  Yeah, so CAR stands for chimeric antigen receptor and that is the little, think about it as like a seeker. That's on the outside of your T cell. It goes and it finds a specific thing it's trying to bind to. And so you're reprogramming your T cell to have a specific receptor. And then as soon as it finds that, as soon as that receptor binds to the correct protein that it's looking for, boom, that cell that it binds to gets wiped out. Are we going to talk about the crazy media mergers and spinouts that are happening? Because it seems like just in the last 90 days, the entire industry is rewiring itself. And it's kind of a pretty significant set of transactions that are underway.

• 45:19Jason Calacanis?

  Amazon is buying MGM, which owns, most importantly, James Bond. James Bond has done $20 billion in adjusted revenue for their movies. And you can obviously see many different backstories in television shows around the James Bond. So this is kind of in my mind, of that eight or nine billion, they spent six billions on the franchise for James Bond so that Bezos can play James Bond, obviously while he retired.

• 45:44David Friedberg?

  If you take a zoom out, you know, several years ago, you guys may remember, you know, early 2000s into the mid, you know, aughts, all the telcos started freaking out because they were, or sorry, all the media companies were freaking out because their controlled points of distribution, which were network television and then their cable television stations and the movie theaters, were getting disintermediated by the internet. So all these internet companies showed up, like YouTube and Netflix, and were going direct to consumer where consumers were not getting access to content directly without the controlled channels that the media companies controlled. At the same time, the telcos were freaking out because it turns out people didn't need cell phones anymore or need phone lines anymore.

• 46:26David Friedberg?

  What they needed was internet access and internet access was quickly commoditizing. So the telcos were like, holy crap, being in the business of providing internet service, not a great business. We need to be making more value per user per year than we're going to be able to make charging them for internet access. So the telcos started buying up media companies. This is what Verizon and others did.

• 46:46Chamath Palihapitiya?

  AT&T as well.

• 46:47David Friedberg?

  And AT&T, and the media companies, so remember Verizon bought AOL and Yahoo. AT&T bought Time Warner. And then the media companies, the old school media companies that were kind of like still decided not to sell and to stay on their own. They decided, well, we got to go internet, right? So we got to figure out how to be on the internet and compete in this world where companies like Netflix and Amazon are going direct to consumers. And, you know, they all started building their own internet services.

• 47:12Chamath Palihapitiya?

  HBO Max, Hulu.

• 47:14David Friedberg?

  HBO Max, yeah Hulu. And that, you know Hulu was a big one. And meanwhile, the tech companies that went direct to consumers, they're realizing, you know what? If these media companies aren't going to play ball, we better get our own media. We got to get our own content.

• 47:25Chamath Palihapitiya?

  Apple TV.

• 47:25David Friedberg?

  And so then they started licensing, buying, funding and building their own media companies. And so there's a total reorientation that's underway. Now, what's interesting in the last couple of weeks is Verizon decided, you know what? We can't be in the media business. We're not very good at it. And they spun it out and they're selling AOL Yahoo. And then meanwhile, this really interesting deal is AT&T gave up on owning Time Warner. And so it turns out that the telcos who thought that they could own the media and monetize it. You know what? It's just a pain in the butt. It's another business. We can't really figure out how to add value to our subscriber base with these products. They're going to have to exist on their own. We don't know how to run them because we're not media guys. And they're spinning out. So now the telcos, the interesting question to ask is what are they going to do next? What's the next move for them? Because they got to keep growing.

• 48:08David Friedberg?

  Meanwhile, the tech companies and the media companies are just like this. And there's 50 subscription services, each with their own silo and balkanization of content. And we're all going to have to choose as consumers, do I want HBO Max or Paramount Plus? Or, you know, the bundle I get from Comcast? And it's going to be a nasty battle for the next 10 years. Where you, and where you want content, you're going to have to go pick and choose who do you want to buy content from? And so, yeah.

• 48:32Chamath Palihapitiya?

  I have a theory. I think consolidation happens when markets don't matter anymore and are getting commoditized. And what I would say about all of this, what it shows me is that we're now transferring to the phase of the market where it's all about cost of capital. And right now, the only person that actually understood that was Netflix. And Netflix issued billions of dollars of debt. And they've started to finance every piece of content under the sun. And being small and trying to compete against Netflix was not possible.

• 49:04Chamath Palihapitiya?

  And now we're in that part of the market where content is actually not that important because there is an enormous diversity of it. So no one single person can really corner that market. And so then it becomes how much can you make and how cheaply can you make it? And there, scale matters. So I can think like what this shows me, back to sort of what we talked about before on the other part about like facts and truth is this is part of a much broader, you know, media puzzle that's becoming more obvious, which is traditional outlets that push top-down content is kind of yesterday's news. And what it's being replaced by is more and better forms of user-generated content and highly commoditized professional content.

• 49:50Chamath Palihapitiya?

  And in all of that, the economics are going away. So if you, if you, if you are not sure, go and look inside of TikTok. The content that individual people create inside of TikTok is unbelievably good. And they are training an entire generation of kids to consume content 15 seconds, 30 seconds at a time, which has huge implications, by the way, for how they consume music. So for example, if you guys like look inside a TikTok and then go to YouTube and look at the most popular videos.

• 50:22Jason Calacanis?

  Exactly the same. And same thing with Spotify.

• 50:24Chamath Palihapitiya?

  It's 15-second clips now. No, you know, these kids want to listen to the hook of a song and then they won't listen to it. I, I see how my kids use it and it's crazy because like they get addicted to a hook on TikTok. They try to go to YouTube to learn the lyrics. They only want to learn the lyrics for the part that's in the TikTok.

• 50:38Jason Calacanis?

  Bust it.

• 50:39Chamath Palihapitiya?

  And then they move on.

• 50:40Jason Calacanis?

  Bust it challenge, yes, whatever it is.

• 50:42Chamath Palihapitiya?

  And so the, the point of all of that is that content costs are going to continue to go down, which means the economics are going to go down. The margins are not that good. And so it's all just a commodity that almost doesn't matter.

• 50:53Jason Calacanis?

  I don't know about that. I think for the top-tier IP, like you can't displace a Disney and their growing portfolio of IP and those things are high margin. And, you know, having 250 to

• 51:03Chamath Palihapitiya?

  I don't know.

• 51:03Jason Calacanis?

  Having 250 to 500,000, 500 million people paying you monthly has never existed in the history of humanity. There's never been an at-scale service like this before. The closest was Verizon and AT&T when they hit 100 million members.

• 51:17Chamath Palihapitiya?

  I'm not disputing that people won't pay 9.99. What I'm disputing is The denominator of what they're paying for is increasing so fast that no one piece of content matters, Jason.

• 51:26Jason Calacanis?

  No, we agree with that. Collections matter, right? So the IP of Marvel, Disney, Pixar, put together.

• 51:33David Friedberg?

  Disney's the perfect case study, right? Disney launched this thing with no direct-to-consumer relationships when they launched Disney Plus. What do they have now? 60 million subscribers or something?

• 51:42Jason Calacanis?

  Close to 100 now.

• 51:43David Friedberg?

  100 million subscribers, which is incredible. You guys have kids. My kids watch this stuff on Disney Plus.

• 51:48Jason Calacanis?

  We'll have it for the rest of our lives.

• 51:50David Friedberg?

  And over, and over. They'll put on frigging Moana. I cannot tell you how many times I've watched the Seashore scene in Moana. They want to watch the beginning, they want to watch the middle part. It's just like infinitely reusable content. And so Disney's content library is so powerful for that particular demographic, basically the demographic of anyone with children, that it's an instant on kind of moment. These other guys like Paramount Plus, HBO's obviously got some special content, but it shows how much content matters, right? The quality of the content for the demographic is so key for this to work. All these media companies that have kind of a broad, dithered, you know, library of half-quality, half-good kind of content, they're going to struggle, man, because they're not going to be able to get people to subscribe to that thing.

• 52:30Jason Calacanis?

  I also feel like they're wringing a little too much out of it. With this too much content production, there is like 50 shows about superheroes. Then there's like 50 shows that are like, you know, meta-commentary on the superhero shows. It's almost becoming exhausting. Like, how many Homeland-style shows are there going to be? How many Sopranos-style shows are there going to be? Game of Thrones? I'm getting burnt out on it.

• 52:52Chamath Palihapitiya?

  I think you're making my point, which is that no one piece of content matters anymore. It's all the same.

• 52:57David Sacks?

  So my big takeaway from Bezos buying MGM and these other, you know, M&A events is it's less about the decline of content, even though there are more and more options there ever have been, and therefore more competition. And it's more about the rising power and wealth and influence of big tech. I mean, if you look at throughout history, whoever is buying studios in any given era, they're the people with the money and power and they're seeking influence. It was GE buying NBC. It was Gulf and Western buying Paramount in the 1970s, an oil and gas company. Or it was Sony.

• 53:29Jason Calacanis?

  Robert Evans stays in the picture.

• 53:31David Sacks?

  That's right. Sony buying Columbia in the 1980s when you had the era of the rising sun. So whoever has the money and the power and seeking influence are the ones buying studios. That's what Bezos is doing right now, but I think this time it is a little bit different in this sense that we're reaching an end state of digital convergence where the where where content and the digital distribution are now reaching their kind of final state. And so I don't expect these studios, once they're owned by big tech, to ever go anywhere. And I don't think they're going to be trading again every 10 years. I think this is the end state. Amazon wants this library for their streaming service. And I think that big tech is going to gobble up the rest of these libraries and that's where they're going to stay.

• 54:14David Friedberg?

  You think all media will end up in tech?

• 54:16David Sacks?

  Yeah, I mean, I think I think I think big tech is going to eat Hollywood. Look, we've been on this this path of convergence now since the mid 90s with the internet. And the question was always, you know, we knew that tech and Hollywood were converging and and joining to more and more. And the question would be on whose terms this final merger would take place. And I think that big tech now, you just look at the market caps, there's so much bigger than the market caps of these studios that Eight billion is a rounding error. It's a rounding error for Bezos. I mean, it's one day's it's one day's revenue or whatever, less. So obviously, big tech is going to win this battle. They are going to own Hollywood.

• 54:55David Friedberg?

  But except for the few guys that have scale to actually be successful like Disney, right? Disney, maybe HBO to some extent, we'll see how, I mean, look, Zaslove, who runs Discovery, he's an incredible media guy and he gets it. But they could be like this Discovery Plus slash HBO Plus, whatever that combined business ends up looking like. That could be a competitor and there may be like there's two to three libraries that are deep enough and strong enough to compete and stand on their own as a tech. Kind of platform, but what's also really interesting is that all the telcos are exiting. What are they going to become? Right? It's clear. What's interesting is they're not, they're not tech companies.

• 55:30Jason Calacanis?

  Yeah, but dumb pipes that are fast are important.

• 55:33David Sacks?

  Right. So, so, so here's the thing with the telcos, the telecom stack is, is we know that tech is taking over Hollywood, but the question is what part of the tech stack? And what's happened is the part of the tech stack that has the direct relationship with the audience, Apple, Google, Amazon, who aggregate millions and millions of consumers. They're the ones who should actually own the content because they are the ones delivering up the content to the consumer and everybody else who's lower down in the stack, who are just the pipes. They don't really have a claim on these libraries and this content.

• 56:08Jason Calacanis?

  The pipes are super valuable.

• 56:10David Sacks?

  The pipes are, the pipes are valuable, but they're a commodity. What Elon is doing with Starlink is going to disrupt them. I'm not saying they're not valuable, but they're not in a highly leveraged position to do anything with the content.

• 56:22Jason Calacanis?

  They're going to keep increasing speed in order to keep you paying 30 bucks a month.

• 56:26David Friedberg?

  Cause like now that they're out, they realize, you know what? We can't, we can't run media businesses and we can't monetize it. Well, what are they going to do? Cause they can't just sit there.

• 56:32Jason Calacanis?

  Focus on faster bandwidth. Get us to gig a bit. I mean.

• 56:36Chamath Palihapitiya?

  It doesn't matter. I mean, like you guys are like, you guys are so fucking old. Like you're just like talking about yesterday's news. Nobody cares. This is what I mean. Consolidation in markets like this should tell you it's time to move on and focus on something else. This is a dead industry with no profit.

• 56:52David Friedberg?

  So, Jamal, what happens to AT&T and what happens to Verizon over the next 10 years?

• 56:56Chamath Palihapitiya?

  It doesn't matter.

• 56:57David Sacks?

  Well, I, I agree. I agree with that part that it doesn't matter what happens to these telcos. They should be dumb pipes. Again, they're not in a, in a leveraged position to create value around content. They never should have owned it, but I do think there is major, major significance in Amazon and Apple and Google and these other big tech companies owning Hollywood because they have, they're going to combine the influence they already have with the influence of Hollywood. And you already have, again, censorship on these tech platforms. Are they going to start censoring the type of content that Hollywood produces? I think these issues are going to get more and more important over time because so much control over our politics and society and culture are being concentrated in the hands of frankly, our industry.

• 57:40Chamath Palihapitiya?

  But this is what I think about the other, the other side of that coin is what we talked about before with respect to things like Coinbase. While that's happening, more and more people who have their own distribution are going direct. So let's just separate entertainment and facts. From a fact perspective, I think we're seeing everything sort of become highly decentralized. And I think that that's constructive. Now, there'll be services that will be there to help us navigate, but I think that's what's happening. With respect to entertainment, I just think like it was our generation was the last one that actually even cared about movies. That cared about these tent productions that that cared about water cooler type conversations on a Monday morning. Books, novels.

• 58:21Chamath Palihapitiya?

  Kids will not understand what the hell we're talking about. They're like, what do you mean you used to run into work on a Monday? Kids don't want to go to the movies anymore? You think it's over? They couldn't care less. Really? My daughter still loves going to the movies. They love video games?

• 58:35David Friedberg?

  Yeah, I mean, video games are obviously like that, you know, the combination of media tech and they're just the kind of ultimate manifestation of where it's all.

• 58:44Chamath Palihapitiya?

  And it's not just our kids. Just look at the monthly active usage numbers that Roblox and Epic.

• 58:49David Friedberg?

  And Fortnite, yeah, yeah.

• 58:50Chamath Palihapitiya?

  It's, it's nuts. And so they are voting every day with their attention. And at the end of the day, the thing that has never been improved is the not or increased is the number of hours in a day.

• 59:02David Friedberg?

  So Chamath, your point, your point on the telcos, you know, as an investor, I own a bunch of Verizon and AT&T stock. If you were running that company, what would you do?

• 59:10Chamath Palihapitiya?

  I would quit. You might run it for capital and then buy assets. Oh, wait, they did that. You can't.

• 59:16David Friedberg?

  What's left to do, right?

• 59:19Chamath Palihapitiya?

  These businesses have had horrendous capital allocation for decades. And the reason that they were allowed was that they were, they were part of a culture of insiders where other insiders said that they were important. But as it turned out, to individual users who are making usage decisions every day, they were not important at all. And this is what we're learning, that the emperor has no clothes. So while everybody was, you know, looking around themselves saying AT&T is important and hey, you know, let's go and like, you know, buy all of. These crazy old school media assets. Young people were like, I use Snapchat and TikTok and YouTube and I'm done. Thanks. Goodbye.

• 59:56David Sacks?

  Right. And who owns those platforms? I mean, you're right that professional content is being crowded out to some degree by amateur content. But now the the big tech companies own the professional content or the studios for creating them. And they own the the user generated platforms. That lets the amateurs create the content. So big tech now owns everything.

• 1:00:16Chamath Palihapitiya?

  No, but you're seeing the next shoe to drop because the thing that I think content creators haven't yet realized. And social media personalities and influencers haven't yet realized. Is how can I own my own distribution? And monetize my relationship? That feature of the web will get figured out in our lifetime. And that's what

• 1:00:40Jason Calacanis?

  Starting to with Patreon and then Apple is now

• 1:00:42Chamath Palihapitiya?

  No, no, no.

• 1:00:43Jason Calacanis?

  Spotify is doing paid content. People are doing Stripe accounts direct with their fans.

• 1:00:48Chamath Palihapitiya?

  Those people are too old. They're not going to figure it out. What I'm saying is There are going to be people who are teenagers today. Right? Or kids who will be teenagers in a decade, twenty somethings. Who will figure this out for whom the idea that if you're a Charlie D'Amelio, right? You're TikTok's top biggest star with a hundred and twenty odd million followers.

• 1:01:11Chamath Palihapitiya?

  That to go through an intermediary to talk to your people will not in the future make any sense. And I think David, that's that's where the the next thing will change. I just think it's unreliable to expect. Laser beam, Mr. Bees, Charlie D'Amelio, all these people. To continue to go through the, no, because they have, they have such.

• 1:01:31David Sacks?

  Yeah, they could go direct. Some of those guys could go direct now that they're huge, but

• 1:01:35Chamath Palihapitiya?

  It's it's no different than building a name on the New York Times and then starting your own Substack. It's gonna happen.

• 1:01:40David Sacks?

  Yeah, but you can't go viral and you can't get discovered unless you participate.

• 1:01:45Jason Calacanis?

  These are not an ore. You can use the platform and you can have a relationship.

• 1:01:50Chamath Palihapitiya?

  Build scale, you will build scale on a platform. And then you'll go on your own because you'll want to control and monetize your own relationship. It's It is what these folks have done, meaning like how Kylie Jenner and Kim Kardashian had built incredible scale and wealth.

• 1:02:04Jason Calacanis?

  Yeah.

• 1:02:04Chamath Palihapitiya?

  Is effectively through that. They build scale through Instagram and Twitter and wherever.

• 1:02:09Jason Calacanis?

  TV show.

• 1:02:10Chamath Palihapitiya?

  Now, the only thing that they haven't done is they've monetized it through offline goods. But if somebody figures out how to monetize it through an online relationship. Then what you're really doing is you're learning how to build scale in an established platform and then you on-ramp to something else that's also online and you go from there. To think that it won't get figured out, I think, is being naive.

• 1:02:29Jason Calacanis?

  It's being figured out. It's being figured out right now. The street is figuring out. There's something called Ghost, which is like an open source version of Substack. It is an open source version of Substack and people are building direct relationships and doing their own Patreon. And if you leave Substack, you get to take your Stripe account with you. You use your Stripe account. So now it's portable. You can go on Substack for a year, leave and keep all your subscribers.

• 1:02:51Chamath Palihapitiya?

  I think this solution will get figured out through the crypto community. And the reason is because that is by definition, to your point, Jason, fundamentally distributed and tied to a payment and a store of value. Because that's what effectively this is. It's like, where is the value of somebody's reputation? And right now, we don't have a way of measuring it. And you can, you can put that on-chain in some way. I don't claim to know how.

• 1:03:14Jason Calacanis?

  I mean, people have talked about this, as all these different platforms.

• 1:03:18David Sacks?

  I hope, I hope that happens. I hope that crypto figures out a way to, to create decentralized social networks and all the rest of it. But it doesn't exist yet. And the only way that Mr. Beast, or Charlie D'Amelio, or any of these people became stars, is they went viral on YouTube, or TikTok, or Insta, they, on a, on a big tech platform. And so, right now...

• 1:03:38Jason Calacanis?

  The strategy is going to be doing both. You, you use the platform for all it's worth.

• 1:03:41David Sacks?

  Big tech has all the power. They have all the power right now. Because if they deny you access to one of these platforms, you are not getting big.

• 1:03:47Jason Calacanis?

  Who cares about Trump's ass?

• 1:03:49David Sacks?

  I'm not talking about Trump.

• 1:03:50Jason Calacanis?

  You're talking about Trump. You're certainly completely lost your mind. Nobody wants Trump in their life but you. Okay?

• 1:03:55David Sacks?

  You're the one who mentioned his name. You're the one with Trump on the, on the brain.

• 1:03:59Jason Calacanis?

  What are you talking about? We love that he's bad. You love he's bad. Or do you want him back?

• 1:04:03David Sacks?

  No, I'm not missing it at all. But...

• 1:04:05Jason Calacanis?

  You want him back or not?

• 1:04:07David Sacks?

  We're, we're trying to do takeaways on these moves by big tech to buy Hollywood studios. And I'm telling you, it's about who has the power, money, and influence. And it's all big tech.

• 1:04:16Chamath Palihapitiya?

  I'll go out on a limb and say, um, we're, we're, we're in the sort of the, the august of their supremacy. So, and again, I would just say, David, if on the one hand, it's a whack-a-mole problem with governments on taxation and regulation. And on the other hand, you have a way where you can have distributed social currency and value. Wow. I mean, these big tech companies are getting bombarded on every single side. And I think that's just a hard place to be. One last thing for you guys on a market check. My 10 year breakevens, remember, were now down to 242. It's been 18 days.

• 1:04:55Jason Calacanis?

  What is he talking about?

• 1:04:57Chamath Palihapitiya?

  My little inflation check, my little inflation check. And it seems like things are trending in the right direction.

• 1:05:03David Sacks?

  The markets are back. The market's back a little.

• 1:05:06Chamath Palihapitiya?

  There may not be inflation.

• 1:05:07David Sacks?

  Well, I think what happened, Chamath, is you put it well, I think, a couple of pods ago. The market sent a signal to Biden that, look, this is too much taxing, too much spending. It's too inflationary. And I don't know if Biden heard the message, but several Democratic senators did.

• 1:05:21Jason Calacanis?

  Pumped the brakes.

• 1:05:22David Sacks?

  And they pumped, put on the brakes, they reduced the size of the package. They're now talking about maybe the capital gains rate going to 25. The infrastructure bill is, you know, been chopped in half. So I think there's less inflationary pressure coming out of Washington, hopefully.

• 1:05:38Chamath Palihapitiya?

  Yeah, what I what I heard last week, I spoke to some folks in Washington. What they said was exactly what you said, David. They're not gonna, at best, they're gonna get the cap gains, sorry, no movement on cap gains. They don't think it can happen at all. So that's not going to move.

• 1:05:52Jason Calacanis?

  Oh, good.

• 1:05:52Chamath Palihapitiya?

  Number one. Number two is that corporate will go to 25 and not to 28. And then number three, they're going to really tighten the IP loophole, which will prevent American companies from shipping IP to places like Ireland to not pay tax. They're going to make it impossible to do things like inversions, all this kind of stuff, and then scope that down. That's actually, to your point, a very, very good outcome for the markets.

• 1:06:15Jason Calacanis?

  So this was actually productive if this happens?

• 1:06:19David Sacks?

  If the infrastructure bill gets, I think the Republicans now, they first, McConnell said 600 to 800 billion. Now I think they're at 900 billion. I think the Democrats started at 2.3 billion. Now I think they're at 1.7. So hopefully it's being brought down to a more reasonable number. That's not going to bust the budget.

• 1:06:36Chamath Palihapitiya?

  1.2, 1.3, and everybody will have something.

• 1:06:39David Sacks?

  But here's the crazy thing. I mean, the US government debt. is now at 100% of GDP. We owe our entire economy. It's pretty crazy and

• 1:06:49Jason Calacanis?

  there's still other countries that are 1.5 right and double like Japan and others.

• 1:06:52David Sacks?

  Yeah. Biden Biden's $6 trillion budget would increase our budget debt or debt from 100% of GDP to 117%. If he gets his way too much. It's a World War II level of spending. But what is the benefit equivalent to World War II that we're getting out of this thing?

• 1:07:11Jason Calacanis?

  Well, also we have a surplus in so many states that we're doing lotteries. Thank you, Queen of Kinwa, Rain Man and the dictator. I'm Jason Calacanis. We'll see you next time on the All In Podcast. Bye bye.

• 1:07:24David Sacks?

  We'll let your winners ride.

• 1:07:27David Friedberg?

  Rain Man David.

• 1:07:31David Sacks?

  And instead we open source it to the fans and they've just gone crazy with it.

• 1:07:35David Friedberg?

  Love you, West.

• 1:07:36David Sacks?

  I'm the queen of Kinwa.

• 1:07:44David Friedberg?

  Besties are gone.

• 1:07:47David Friedberg?

  That's my dog taking a piss in your driveway.

• 1:07:54Chamath Palihapitiya?

  We should all just get a room and just have one big huge orgy because they're all just it's like this like sexual tension that they just need to release somehow.

• 1:08:02David Friedberg?

  What? You're the bee. What?

• 1:08:05David Sacks?

  What? You're a bee.

• 1:08:08David Friedberg?

  We need to get merch.