E129: Sam Altman plays chess with regulators, AI's "nuclear" potential, big pharma bundling & more

(0:00) Bestie intros!: Reddit Performance Reviews (5:14) Quick AIS 2023 update (6:27) AI Senate hearing: Sam Altman playing chess with regulators, open-source viability (21:25) Regulatory capture angle, "preemptive regulation," how AI relates to nuclear, insider insights from the White House's AI summit (43:33) Elon hires new Twitter CEO (48:46) Lina Khan moves to block Amgen's $27.8B acquisition of Horizon Therapeutics (1:02:30) Apple's AR goggles are reportedly being unveiled at WWDC in early June, platform shift potential, how it deviates from Apple's prior launch strategies (1:07:45) Residential and commercial real estate headwinds (1:15:29) Unrest in SF and NYC after two recent tragic incidents ended in death (1:24:20) Soros political motivations for backing progressive DAs 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 Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://techcrunch.com/2023/05/18/psst-gary-marcus-is-happy-to-help-regulate-ai-on-behalf-of-the-u-s-government/ https://twitter.com/chamath/status/1658913074106236931 https://www.mosaicml.com/blog/mpt-7b https://huggingface.co/spaces/HuggingFaceH4/open_llm_leaderboard https://artificialintelligenceact.eu https://futurism.com/the-byte/warren-buffett-ai-atom-bomb https://www.cnbc.com/2023/05/12/nbcuniversal-ad-chief-yaccarino-resigns-as-sources-say-shes-in-talks-to-be-twitter-ceo.html https://www.wsj.com/articles/ftc-poised-to-block-amgens-27-8-billion-deal-for-horizon-therapeutics-a9c1b499 https://www.ftc.gov/system/files/ftc_gov/pdf/2310037amgenhorizoncomplainttropi.pdf https://www.benefitspro.com/2023/05/12/pbms-the-brokers-who-control-drug-prices-finally-get-washingtons-attention https://sharegpt.com/c/O6OKM9D https://www.wsj.com/articles/apple-mixed-reality-headset-9213ac1b https://twitter.com/PalmerLuckey/status/1657828947877560323 https://twitter.com/DavidSacks/status/1658955195450286081 https://www.foxnews.com/us/witness-jordan-neely-chokehold-death-calls-daniel-penny-hero https://www.reddit.com/r/nyc/comments/1njfls/try_to_stay_away_from_the_michael_jackson https://en.wikipedia.org/wiki/1984_New_York_City_Subway_shooting https://en.wikipedia.org/wiki/Guardian_Angels https://www.messynessychic.com/2019/03/26/in-the-shadows-with-nycs-self-styled-guardian-angels https://www.eviemagazine.com/post/media-falsely-representing-jordan-neely-10-year-old-photos-crucial-information https://twitter.com/Jason/status/1655716240500080640 https://www.foxnews.com/politics/george-soros-son-visited-white-house-dozen-times-since-biden-took-office-records-show

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

• 0:00Jason Calacanis?

  I have a little surprise for my besties. Everybody's been getting incredible adulation. People have been getting incredible feedback on the podcast. It is a phenomenon, as we know. And I thought it was time for us to do performance reviews of each bestie. Now, I, as executive producer, I'm not in a position to do your performance reviews. I too need to have a performance review. So I thought I would let the audience do their performance reviews. So we went and we're debuting a new feature today. At this very moment, it's called Reddit Performance Reviews. Cue some music here, some graphics. Reddit Performance Reviews. And so we'll start off with you, David Friedberg.

• 0:41Chamath Palihapitiya?

  This proves why you haven't been successful in life so far.

• 0:44Jason Calacanis?

  I haven't been? Are you kidding me?

• 0:46Chamath Palihapitiya?

  When you're trying to build a successful enterprise, instead of keeping the judgment to yourself, which is what all elite performers do.

• 0:53Jason Calacanis?

  Yes.

• 0:53Chamath Palihapitiya?

  You turned it over to a bunch of mids on Reddit?

• 0:56Jason Calacanis?

  Yes. No, they were already doing it. They were already doing it. We just collected it.

• 1:00Chamath Palihapitiya?

  What elucidation were you gonna get from Reddit?

• 1:02David Sacks?

  Yeah, really.

• 1:03Jason Calacanis?

  Let's not ruin the bit.

• 1:04David Sacks?

  Do you think Elon does 360 performance reviews?

• 1:07Jason Calacanis?

  On Reddit? On Reddit of all things? You know how many 360 performance reviews I've done in my life? Zero. Of course, and that's why this will be so entertaining.

• 1:16David Friedberg?

  Okay, go, go. Start off with me.

• 1:18Jason Calacanis?

  But here's how it's gonna work. You are going to be presented with the candid feedback that you've gotten in the last 30 days on Reddit, but for the first time, and you have to read it out loud to the class. Friedberg, you'll go first. Here's your first piece of candid feedback in your 360 from the Reddit incels. Go ahead, Friedberg, read it out loud.

• 1:38David Friedberg?

  David Friedberg deserves more hate. He and the others have made it their mission to convince us that reforming social security is the only way forward to survive. He hides behind this nerdy, apolitical persona and then goes hard right out of nowhere. It sacks fear mongered about the deficit as an excuse to restructure entitlement programs. We would see that as the partisan, right wing take it is. When Friedberg does it, we're supposed to act like he has no skin in this game. He's just the science guy. No. He's a rich guy who would rather work your grandparents to death than pay an extra 5% tax.

• 2:15Jason Calacanis?

  All right, there's your review. Very good. I think you took it well. And you don't have to respond now. Don't be defensive, just take it in.

• 2:21David Friedberg?

  Just to counter briefly, I have highlighted multiple times, I think we're going to 70% tax rates. But hey, you know.

• 2:28Jason Calacanis?

  To each their own. Everyone's got an opinion.

• 2:30David Sacks?

  That won't generate more revenue.

• 2:31Jason Calacanis?

  Yeah.

• 2:32David Sacks?

  History's any guide.

• 2:33Jason Calacanis?

  Yeah. Well, the audience has been waiting for this. David Sacks has never taken a piece of feedback and the feedback he has gotten, he hasn't taken well. So here we go, David. Here's your performance review.

• 2:43David Sacks?

  I'm supposed to read this?

• 2:44Jason Calacanis?

  Go with the bit. Come on. It's a little feedback for you. Come on.

• 2:47David Sacks?

  All right.

• 2:48Jason Calacanis?

  And I'm going to do this too, and I haven't seen mine. Oh, Nick pulled these? Nick pulled these. This is not my creation. These are actual pieces of real feedback. Nick, you're fired. That's it. Get out of here. It was my idea. Go ahead, Sacks.

• 3:03David Sacks?

  The thing about David Sacks, if he wasn't rich, everyone would dismiss him as being both stupid and boring. The secret to his wealth is just follow Peter Thiel around since college. It's like if Turtle from Entourage pretended to be a public intellectual.

• 3:16Jason Calacanis?

  Oh, this is good to work on. Okay, so the dictator has never had a 360 review. He informs us and I think his staff, you know, for all the people at Social Capital, you can get in on this by just posting to Reddit since he won't do 360 reviews at Social Capital. Go ahead. Let's pull up Chamath's feedback for the quarter. Go ahead.

• 3:33Chamath Palihapitiya?

  Chamath is the biggest self-serving leech. As long as he can make a dollar trade on it, he will burn anything down to the ground. Fuck the consequences to society or anyone else.

• 3:45Jason Calacanis?

  This was actually the good part of this 360. Those are the pros.

• 3:49David Sacks?

  Yeah, why'd you give him such a good review?

• 3:51Chamath Palihapitiya?

  That's the truth.

• 3:55Jason Calacanis?

  I gotta read mine. I haven't seen this. I'm bracing for impact here. Oh, no. What's the critique exactly? What is that? What is the critique from all the mids on Reddit? From that? I mean, that's like accolades. It's pretty accurate. Okay. All right, here we go. I gotta read mine. Okay. I can't wait for AI to replace J. Gal. J. Gal is the least skilled knowledge worker on the show. I think he has about three shows left before AI replaces his hosting skills and ability to trick dentists into investing in hype.

• 4:23David Friedberg?

  That's pretty good.

• 4:26David Sacks?

  That last part.

• 4:30Jason Calacanis?

  I do have a lot of dentist friends in the funds. Okay, I'm gonna pay for a lot of kids dentist school.

• 4:35David Friedberg?

  Great idea. Great idea, J Cal to give.

• 4:37David Sacks?

  Yeah, what a great bit.

• 4:38Jason Calacanis?

  There's one group one. It is one for the whole group. This is a group survey. This is our group 360. Vote to rename the podcast. The vote is binding and the podcast will be renamed.

• 4:48David Sacks?

  Three billionaires and J Cal, three kind of smart guys and J Cal, three assholes and Friedberg.

• 4:55Jason Calacanis?

  That's a pretty good survey. That was pretty good.

• 4:57Chamath Palihapitiya?

  That's a good one.

• 5:14Jason Calacanis?

  All right, everybody. Welcome to the All In Podcast. We're still here. Episode 129. All In Summit 2023. General admission sold out. Too many people apply for scholarships. That's on pause. And there's a couple of VIP tickets left. Get them while they're hot. Just search for All In Summit. Friedberg, anything to add? We'll just get through the grift real quick here in the beginning.

• 5:34David Friedberg?

  No, it's gonna be great.

• 5:34Jason Calacanis?

  Did I get it all right? That was it?

• 5:36David Friedberg?

  No, I mean, just more demand than we predicted. We looked for a bigger venue, couldn't find one. We were, I think we're excited about Royce Hall. It's still, as you pointed out, two and a half times the size of last year. So we want to make sure it's a great quality event. But unfortunately, way too many folks want to go. So we have to kind of pause ticket sales.

• 5:54Chamath Palihapitiya?

  What's my wine budget?

• 5:55Jason Calacanis?

  $300 per person per night, $1,000 per VIP per event.

• 5:59Chamath Palihapitiya?

  Thank you. Okay, I will handle it from here.

• 6:03Jason Calacanis?

  So there's 750 of them. So I think you have $750,000 in wine budget. Thank you. I mean, I just can't believe I just gave Chamath $750,000 to buy wine.

• 6:15Chamath Palihapitiya?

  Hi, guys. I'm gonna curate an incredible wine.

• 6:18David Friedberg?

  Josh was here today, by the way. He's doing a sommelier job. Yeah, sommelier Josh.

• 6:23Jason Calacanis?

  Sommelier Josh. All right, let's get to work. Let's get to work. Okay, the Senate had a hearing this week for AI. Sam Altman was there, as well as Gary Marcus, a professor from NYU. That's an overpriced college in New York City. And Christina Montgomery, the chief privacy and trust officer from IBM, which had Watson before anybody else was in the AI business. And I think they deprecated it or they stopped working on it, which was quite paradoxical.

• 6:52Jason Calacanis?

  There were a couple of very interesting moments. Sam claimed the US should create a separate agency to oversee AI. I guess he's in the Chamath camp. He wants the agency to issue licenses to train and use AI models. A little regulatory capture there, as we say in the biz. He also claims, and this was interesting dovetailing with Elon's CNBC interview with, I think, Dave Farber, which was very good, that he owns no equity in OpenAI whatsoever and was, quote, "doing it because he loves it." Any thoughts, Chamath? You did say that this would happen two months ago, and here we are two months later, and exactly what you said would happen is in the process of happening.

• 7:37Jason Calacanis?

  Regulation, licensing, and regulatory capture.

• 7:40Chamath Palihapitiya?

  Sam went a little further than I sketched out a few months ago, which is that he also said that it may make sense for us to issue licenses for these models to even be compiled.

• 7:55Jason Calacanis?

  Hmm.

• 7:56Chamath Palihapitiya?

  And for these models to actually do the learning. And I thought that that was really interesting because what it speaks to is a form of KYC, right? Know your customer. And again, when you look at markets that can be subject to things like fraud and manipulation, right? Where you can have a lot of bad actors, banking is the most obvious one. We use things like KYC to make sure that money flows are happening appropriately and between parties that where the intention is legal. And so I think that that's actually probably the most important new bit of perspective that he is adding as somebody right in the middle of it, which is that you should apply

• 8:38Chamath Palihapitiya?

  to this agency to get a license to then allow you to compile a model. And I think that that was a really interesting thing. The other thing that I said, and I said this in my, in a tweet just a couple of days ago, is I'm really surprised, actually, where, this is the first time in modern history that I can remember, where we've invented something, we being Silicon Valley, and the people in Silicon Valley are the ones that are more circumspect than the folks on Wall Street or other areas. And if you see, if you gauge the sentiment, the hedge funds and family offices right now are just giddy about AI. And it turns out, if you look at their 13Fs, they're all along Nvidia and AMD. But if you actually look at the other side of the coin,

• 9:23Chamath Palihapitiya?

  which is the folks in Silicon Valley that's actually making it, the rest of us are like, hey, let's crawl before we walk, before we run.

• 9:29Jason Calacanis?

  Yeah, let's think about guardrails, let's be thoughtful here. And so the, the big money people are saying, let's place bets. And the people building in are saying, hey, let's be thoughtful.

• 9:38Chamath Palihapitiya?

  Which is opposite to what it's always been, I think.

• 9:41Jason Calacanis?

  Right, we're like, hey, let's, let's run with this. And Wall Street's like, prove it to me. Sax, you are a less regulation guy, you are a free market monster, I've heard you've been called. You don't believe that we should license this. What do you think about what you're seeing here? And there is some cynical, cynical thoughts about what we just saw happen in terms of people in the lead wanting to maintain their lead by creating red tape. What are your thoughts?

• 10:10David Sacks?

  Yeah, of course, I think, you know, Sam just went straight for the end game here, which is regulatory capture. Normally, when a tech executive goes and testifies at these hearings, they're in the hot seat and they get grilled. And that didn't happen here because, you know, Sam Altman basically bought into the narrative of these senators. And he basically conceded all of these risks associated with, with AI. He talked about how chat GPT style models, if unregulated, could increase online misinformation, bolster cyber criminals, even threaten confidence in election systems. So he basically bought into the senators' narrative. And like you said, agreed to create a new agency that would license models and can take licenses away.

• 10:55David Sacks?

  He said that he would create safety standards, specific tests that a model has to pass before it can be deployed. He says he would require independent audits, who can say the model is or isn't in compliance.

• 11:08David Sacks?

  And by basically buying into their narrative and agreeing to everything they want, which is to create all these new regulations and a new agency, I think that Sam is pretty much guaranteeing that he'll be one of the people who gets to help shape the new agency and the rules they're going to operate under and what these independent audits are gonna, how they're going to determine what's in compliance. So he is basically putting a big moat around his own incumbency here.

• 11:35Jason Calacanis?

  And?

• 11:36David Sacks?

  So yes, it is a smart strategy for him. But the question is, do we really need any of this stuff? And, you know, what you heard at the hearing is that, just like with just about every other tech issue, the senators on the Judiciary Committee didn't exhibit any real understanding of the technology. And so they all generally talked about their own hobby horses. So, you know, you heard from Senator Blackburn, she wants to protect songwriters. Hawley wants to stop anti-conservative bias. Klobuchar was touting a couple of bills that have her name on them. One's called the JCPA Journalism Competition Preservation.

• 12:10Jason Calacanis?

  What does Bernie Sanders want to do? He wants to protect the 1% of the 1%?

• 12:14David Sacks?

  Durbin hates Section 230. That was the hobby horse he was riding. And then Senator Blumenthal was obsessed that someone had published deep fakes of himself. So, you know, all of these different senators had different theories of harm that they were promoting. And they were all basically hammers looking for a nail. You know, they all wanted to regulate this thing. And they didn't really pay much of any attention to the ways that existing laws could already be used

• 12:39Jason Calacanis?

  Absolutely.

• 12:40David Sacks?

  to stop any of these things.

• 12:41Jason Calacanis?

  If you commit a crime with AI, there are plenty of criminal laws.

• 12:44David Sacks?

  Every single thing they talked about could be handled through existing law if they amount to being harms at all.

• 12:49Jason Calacanis?

  Yeah.

• 12:50David Sacks?

  But they want to jump right to creating a new agency and regulations. And Sam, I think, did the, you know, expedient thing here, which is basically buy into it in order to be an insider.

• 13:02Jason Calacanis?

  If this was a chess game, Sam got to the mid-game, he traded all the pieces and went right to the end game. Let's just try to checkmate here. I've got the lead. I got the 10 billion from Microsoft. Everybody else get a license and try to catch up. Friedberg, we have Chamath Pro Regulation Licensing, I think, or just being pretty thoughtful about it. There you got Saks being typically a free market monster. Let the laws be what they are, but these senators are going to do regulatory capture. Where do you, as a Sultan of Science, stand on this very important issue?

• 13:32David Friedberg?

  I think there is a more important

• 13:38David Friedberg?

  Kind of broader set of trends that are worth noting and that the folks doing these hearings and having these conversations are aware of, which implies why they might be saying the things that they're saying. That's not necessarily about regulatory capture. And that is that a lot of these models can be developed and generated to be much smaller. We're seeing, you know, models that can effectively run on an iPhone. We're seeing a number of open source models that are being published now. There's a group called Mosaic ML. Last week, they published what looks like a pretty good quality model that has, you know, a very large kind of token input, which means you can do a lot with it. And that model can be downloaded and used by anyone for free. You know, really good open source license that they provided on that model.

• 14:22David Friedberg?

  And that's really just the tip of the iceberg on what's going on, which is that these models are very quickly becoming ubiquitous, commoditized, small, and effectively are able to move to and be run on the edge of the network. As a result, that means that it's very hard to see who's using what models how behind the products and tools that they're building. And so if that's the trend, then it becomes very hard for a regulatory agency to go in and audit every server or every computer or every computer on the network and say, what model are you running? Is that an approved model? Is that not an approved model? It's almost like having a regulatory agency that has to go in and audit and assess whether

• 15:04David Friedberg?

  a Linux upgrade or some sort of, you know, open source platform that's being run on some server is appropriately vetted and checked. And so it's almost like a fool's errand. And so if I'm running one of these companies and I'm trying to, you know, get Congress off my butt and get all these regulators off my butt, I'm going to say, go ahead and regulate us. Because the truth is, there really isn't a great or easy path or ability to do that, and there certainly won't be in five or 10 years. Once these models all move on to the edge of the network and they're all being turned around all the time, every day, and there's a great evolution underway. So I actually take a point of view that it's not just that this is necessarily bad and there's cronyism going on.

• 15:46David Friedberg?

  I think that the point of view is just that this is going to be a near impossible task to try and track and approve LLMs and audit servers that are running LLMs and audit apps and audit what's behind the tools that everyday people are using. And I wish everyone the best of luck in trying to do so. But that's kind of the joke of the whole thing. It's like, let's go ahead and pat all these congresspeople on the shoulder and say, you got it.

• 16:11Jason Calacanis?

  There you have it, folks. Wrong answer, Schumacher Sachs. Right answer, Friedberg. If you were to look at Hugging Face, if you don't know what that is, it's a basically an open source repository of all of the L L Ms. The cat is out of the bag. The horses have left the barn. If you look at what I'm showing on the screen here, this is the Open L L M leaderboard. It's kind of buried on Hugging Face. If you haven't been to Hugging Face, this is where developers show their work. They share their work and they kind of compete with each other in a social network showing all their contributions. And what they do here is, and this is super fascinating. They have a series of tests that will take an L L M, a language model, and they will have it do science questions that would be for grade school.

• 16:55Jason Calacanis?

  They'll do a test of mathematics, U S history, computer science, et cetera.

• 17:00David Friedberg?

  There's a Jeopardy test, too. I don't know if it's on here, but the Jeopardy test is really good. It's like straight up Jeopardy trivia and see if it can answer the questions.

• 17:06Jason Calacanis?

  Yeah. Which actually Friedberg was actually his high school Jeopardy championship three years in a row. But anyway, on this leaderboard, you can see the language models are outpacing what OpenAI did. I'm sorry, closed AI is what I call it now because they're closed source. Closed AI and Bard have admitted that internal person at Bard said the language models here are now outpacing what they're able to do with much more resources. Many hands makes for light work. The open source models are going to fit on your phone or the latest, you know, Apple silicon. So I think the cat's out of the bag. I don't know how they pull it back in.

• 17:44David Sacks?

  There's nothing incompatible about that, what Friedberg just said with what I said. In fact, Friedberg's point bolsters my point. It's highly impractical to regulate open source software in this way. Also, when you look at that list of things that people are doing on Hugging Face, there's nothing nefarious about it. And all the harms that were described are already illegal and can be prosecuted. Exactly. Some special agency, you know, giving it seal of approval. Again, this is going to replace permissionless innovation, which is what has defined the software industry and especially open source with the need to develop some connection or relationship and lobbying in Washington to go get your project approved. And there's no really good reason for this, except for the fact that the senators on the Judiciary

• 18:27David Sacks?

  Committee and all of Washington really wants more control so they can get more donations.

• 18:32Chamath Palihapitiya?

  Sax, I have a question. Do you think that creating the DMV and requiring a driver's license limits the ability for people to learn how to drive?

• 18:40David Sacks?

  The DMV is like the classic example of how government doesn't work. I don't know why you'd want to make that your example. I mean, people have to spend all day waiting in line.

• 18:49Jason Calacanis?

  He sends people to it. He's got a VIP person.

• 18:51David Sacks?

  You gotta spend all day waiting in line to get your photo taken. It's insane. I mean, everyone has a miserable experience with it. No, but it's highly relevant because you're right. If you create an agency where people have to go get their permission, it's a licensing scheme. You're going to be waiting in some line of untold length. It won't be like a physical line at the DMV building. It's going to be a virtual line where you're in some queue where there's probably going to be some overworked regulator who doesn't even know how they're supposed to approve your project. They're just going to be trying to cover their ass because if the project ends up being something nefarious, then they get blamed for it. So that's what's going to end up happening.

• 19:27David Friedberg?

  Let me also highlight something that I think is maybe.

• 19:30Chamath Palihapitiya?

  I think the gut analogy would be better.

• 19:31David Friedberg?

  A little bit misunderstood, but you know, an AI model is an algorithm. So it's a, it's a piece of software that takes data in and spits data out. And, you know, we have algorithms that are written by humans. We have algorithms that have been, you know, written by machines. These are machine learned models, which is what a lot of what people are calling AI today is effectively an extension of and out of. And so the idea that a particular algorithm is differentiated from another algorithm is also what makes this very difficult because these are algorithms that are embedded and sit within products and applications that an end user and end customer ultimately uses. And I just sent you

• 20:13David Friedberg?

  guys a link to the, you know, the EU has been working towards passing this AI act. Oh God, here we go. They're a couple of weeks ahead of these conversations in the US. But I mean, as you read through this AI act and the proposal that it's, that it's put forth, it almost becomes the kind of thing that you say, I just don't know if these folks really understand how the technology works because it's almost as if they're going to audit and have, you know, an assessment of the risk level of every software application out there. And that the tooling and the necessary infrastructure to be able to do that just makes no sense in the context of open source software, in the context of an open internet, in the context

• 20:56David Friedberg?

  of how quickly software and applications and tools evolve and you make tweaks to an algorithm and you got to resubmit it for authorization, reauthorization.

• 21:04Jason Calacanis?

  You can be sure their number one job, Friedberg, is going to be to protect jobs. So anything there that in any way infringes on somebody's ability to be employed in a position, whether it's an artist or a writer or a developer, they're going to say, you can't use these tools or they're going to try to throttle them to try to protect jobs because that's their number one job.

• 21:24Chamath Palihapitiya?

  Can I ask a question then of all three of you? Do you guys think that this was Sam's way of pulling up the ladder behind him?

• 21:29Jason Calacanis?

  Of course, 100%. Just like, absolutely it is. And it's because you can, you can prove it. He made open AI, closed AI by making it not open source.

• 21:39David Friedberg?

  If you're Sam, you're smart enough to know how quickly the models are commoditizing and how many different models there are that, you know, can provide similar degrees of functionality, as you just pointed out, J Cal. So I don't think it's about trying to lock in your model. I think it's about recognizing the impracticality of creating some regulatory regime around model auditing. And so you're very, so that in that, in that world, in that scenario where you have that vision, you have that foresight, do you go to Congress and tell them that they're dumb to regulate AI? Or do you go to Congress and you say, great, you should regulate AI, knowing that it's like, hey, yeah, you should go ahead and stop the sun from shining? You know, like, it's just, yeah, go for it.

• 22:18Jason Calacanis?

  So basically, he's telling them to do that. Because he knows they can't.

• 22:21David Sacks?

  No.

• 22:22Jason Calacanis?

  Therefore, he gets all the points, all the joy points, all the social credit, I don't want to say virtual signaling, but he gets all the credit, relationship credit with Washington for saying what they want to hear, reflecting back to them.

• 22:34David Friedberg?

  I'll say this.

• 22:34Jason Calacanis?

  Even though he knows they can't compete with Facebook's open model, which is number one.

• 22:38David Friedberg?

  Yeah, there is historical precedent.

• 22:40Jason Calacanis?

  Interesting idea.

• 22:41David Friedberg?

  For companies that are facing congressional scrutiny to go to Congress and say, go ahead and regulate us as a way of creating relief. Yeah, and I think that it doesn't necessarily mean you're going to get regulated, but it's a way of kind of creating some relief and getting everyone to take a breather and a sigh of relief and be like, okay, the industry is with us, you know, they're.

• 22:58Jason Calacanis?

  Garda's, what do you think of the Garda's strategy? Sax, the Garda's strategy he's pulling here.

• 23:03David Sacks?

  What's Garda's?

• 23:04Jason Calacanis?

  I think that's in chess when you are going to take the queen.

• 23:07David Sacks?

  What?

• 23:07Jason Calacanis?

  It's like a, anyway, what do you think of his chess moves?

• 23:10David Sacks?

  I can guarantee you that's not a strategy in chess. So I think it is a chess move nonetheless.

• 23:17Jason Calacanis?

  Is he pulling up the ladder sax or no?

• 23:19David Sacks?

  I don't think that's his number one goal, but I think it is the result. And so I think the, the goal here is, I think he's got two paths in front of him when you go to testify like this. You can either resist and they will put you in the hot seat and just grill you for a few hours, or you can sort of concede and you buy into their narrative and then you kind of get through the hearing without being grilled. And so I think on that level, it's preferable just to kind of play ball. And then the other thing is that by playing ball, you get to be part of the insiders club that's going to shape these regulations. And that will, I wouldn't say it's a ladder coming up. I think it's more of a moat where, because it's not that the ladder comes up and nobody

• 24:02David Sacks?

  else can get in, but the regulations are going to be a pretty big moat around major incumbents who know they qualify for this because they're going to write these standards. So at the end of the day, if you're someone in Sam's shoes, you're like, why resist and make myself a target or I'll just buy into the narrative and help shape the regulations and it's good for my business.

• 24:24Jason Calacanis?

  I like the analysis, gentlemen. This is a perfect analysis.

• 24:27David Friedberg?

  Let me ask Tumoth a question. Tumoth, what is the commercial incentive from your point of view?

• 24:33David Friedberg?

  To ask for regulation and to be pro regulation. You're pro regulation. Can you just highlight for me at least what you think? You know, the, the, the commercial reason is to do that. You know, how do you benefit from that? Like, not you personally, but generally, like, where does benefit arise?

• 24:48Chamath Palihapitiya?

  I think that certain people in a sphere of influence, and I would put us in that category, have to have the intellectual capacity to see beyond ourselves and ask what's for the greater good. I think Buffett is right. Two weeks ago, he equated AI to nuclear weapons, which is an incredibly powerful technology whose genie you can't put back in the bottle, whose 99.9% of use cases are generally quite societally positive, but the 0.1% of use cases destroys humanity. And so I think you guys are unbelievably naive on this topic.

• 25:30Chamath Palihapitiya?

  And you're letting your ideology fight your common sense. The reality is that there are probably 95 billion trillion use cases that are incredibly positive, but the 1,000 negative use cases are so destructive and they're equally possible. And the reason they're equally possible, and this is where I think there's a lot of intellectual dishonesty here, is we don't even know how transformers work. The best thing that happened when Facebook open sourced Llama was also that somebody stealthily released all the model weights.

• 26:03David Friedberg?

  Yeah.

• 26:04Chamath Palihapitiya?

  Okay, so I don't think that-

• 26:06David Friedberg?

  Explain a little bit for a neophyte what, what we're talking about here. So, so there's the model and there's the weights.

• 26:11Chamath Palihapitiya?

  Think about it as it's a solution to a problem. The solution looks like a polynomial equation. Okay, let's take a very simple one. Let's take Pythagorean theorem, you know, x squared plus y squared equals z squared. Okay, so if you want to solve an answer to a problem, you have these weights, you have these variables, and you have these weights associated with it. The slope of a line, y equals mx plus b. Okay, what a computer does with AI is it figures out what the variables are and it figures out what the weights are. The answer to identifying images flawlessly turns out to be 2x plus 7, where x equals this thing. Now, take that example and multiply it by 500 billion parameters and 500 billion weights.

• 26:57Chamath Palihapitiya?

  And that is what an AI model essentially gives us to, as an answer to a question. So even when Facebook released Lama, what they essentially gave us was the equation, but not the weights. And then what this guy did, I think it was an intern apparently, or somebody, he just leaked the weights so that we immediately knew what the structure of the equation looked like. So that's what we're basically solving against, but we don't know how these things work. We don't really know how transformers work. And so this is my point, when I think you guys are right about the overwhelming majority of the use cases, but there will be people who can nefariously create havoc and chaos.

• 27:37Chamath Palihapitiya?

  And I think you got to slow the whole ship down to prevent those few folks from ruining it for everybody.

• 27:44David Friedberg?

  Chamath, in, in, in, hold on, hold on, let me just talk with Chamath about this.

• 27:47Jason Calacanis?

  Hold on, I haven't had a chance to chime in on my position, so I'd like to just move my own, if I may.

• 27:51David Sacks?

  Nobody cares.

• 27:52Jason Calacanis?

  Okay, well, I do. I think, actually, I split the difference here a little bit. I don't think it needs to be an agency and licensing. I do think we have to have a commission and we do need to have people being thoughtful about those thousand use cases, Chamath, because they are going to cause societal harm or things that we cannot anticipate. And then number two, for the Neo Fight with the 1600 rating on chess.com, Sax, Gardes, an announcement to the opponent that their queen is under direct attack, similar to the announcement of check, the warning was customary until the early 20th century. So since you do not know the history of check, now you've learned something here today.

• 28:26David Sacks?

  Early 20th century, okay. Well, since I've only played chess in the 20th and 21st centuries, I'm unaware of that.

• 28:30Chamath Palihapitiya?

  Jake Allen French is pronounced Gardé.

• 28:33David Friedberg?

  Gardé. Très magnifique.

• 28:36Chamath Palihapitiya?

  Go ahead, Friedberg.

• 28:37David Friedberg?

  Chamath, in the context of what we're talking about, that models are becoming smaller and can be run on the edge, and there's obviously hundreds and thousands of variants of these open source models that have, you know, good effect and perhaps compete with some of these, these models that you're mentioning that are closed source. How do you regulate that? How do you? And then they sit behind an application and they sit behind tooling.

• 29:01Chamath Palihapitiya?

  Yeah. I think in order for you to be able to compile that model to generate that initial instantiation, you're still running it in a cluster of thousands of GPUs.

• 29:11David Friedberg?

  But let's say we're past that.

• 29:13Chamath Palihapitiya?

  You can't be past that. We're not past that yet. Okay, we don't have 5 million models. We don't have all kinds of things that solve all kinds of problems. We don't have an open source available simulation of every single molecule in the world, including all the toxic materials that could destroy humans. We don't have that yet. So before that is created and shrunk down to an iPhone, I think we need to put some stage gates up to slow people down.

• 29:36David Friedberg?

  What do you mean by those stage gates? Yeah.

• 29:38Chamath Palihapitiya?

  I think you need some form of KYC. I think before you're allowed to run on a massive cluster to generate the model that then you try to shrink, you need to be able to show people that you're not trying to do something absolutely chaotic or havoc creating. That I don't think that's unreasonable.

• 29:54David Friedberg?

  That could be as simple as putting your driver's license, setting your social security number, that you're working on an instance in a cloud, right? It could be you're putting your name on your work.

• 30:02Chamath Palihapitiya?

  It becomes slightly more nuanced than that. It's like, I think that JCal, that's probably the simplest thing for AWS, GCP and Azure to do, which is that if you want to run over a certain number of GPU clusters, you need to put in that information. I think you also need to put in your tax ID number. So I think if you want to run a real high scale model, that's still going to run you tens or hundreds of millions of dollars. I do think there aren't that many people running those things. And I do think it's easy to police those and say, what are you trying to do here?

• 30:30David Friedberg?

  So let me just push back on that because Mosaic ML published this model that is, let me, I can pull up the, the performance chart or Nick, maybe you can just find it on their website real quick of the new model they published. Chamath, they trained this model on open source data that's publicly available.

• 30:48David Friedberg?

  And they spent $200,000 on a cluster run to build this model and look at how it performs compared to some of the top models that are closed source.

• 30:57Chamath Palihapitiya?

  Just say it for the people who are listening.

• 30:58David Friedberg?

  Yeah, so for people that are listening, basically, this model is called MPT-7B. That's the name of the AI model, the LLM model, that was generated by this group called Mosaic ML. And they spent $200,000 creating this model from scratch. And the data that they trained it on is all listed here. It's all publicly available data that you can just download off the Internet. Then they score how well it performs on its results against other big models out there like Llama-7B.

• 31:27Chamath Palihapitiya?

  Yeah, but I know, but I don't exactly know what the actual problems they're trying to ask it to compare.

• 31:33David Friedberg?

  Right, so, but the point is that this model theoretically could then be applied to a different data set once it's been, you know, built.

• 31:41Chamath Palihapitiya?

  I don't think so.

• 31:42David Friedberg?

  I just want to use your point earlier about toxic chemistry. Because models were generated and then other data was then used to fine tune those models and deliver an output.

• 31:52Chamath Palihapitiya?

  Hold on a second, like, those answers were to specific kinds of questions. If you wanted to all of a sudden ask a totally orthogonal thing of that model, that model would fail. You would have to go back and you'd have to retrain it. That training does cost some amount of money. So if you said to me, H-Math, I could build you a model trained on the universe of every single molecule in the world, and I could actually give you something that could generate the toxic list of all the molecules and how to make it for $200,000, I would be really scared. I don't think that that's possible today. So I don't understand these actual tests, but I don't think it's true that you could take this model and these model weights, apply it to a different set of data and get useful answers.

• 32:33David Friedberg?

  But let's assume for a minute that you can, in fact, take $200,000 worth of GPU clusters.

• 32:39Chamath Palihapitiya?

  Here's my point. I want to tell you what's happening right now, which is that's not possible. So we should stop so that then I don't have to have this argument with you in a year from now, which is like, hey, some jack jerk off just created this model. Now the cat's out of the bag, so let's not do it.

• 32:54David Friedberg?

  Yeah, and...

• 32:55Chamath Palihapitiya?

  And then what's going to happen is like some chaotic seeking organization is going to print one of these materials and release it into the wild to prove it.

• 33:03David Friedberg?

  But here's the point for the audience. We are at a moment in time where this is moving very quickly and you have very intelligent people here who are very knowledgeable.

• 33:11Jason Calacanis?

  Talking about the degree to which this is going to manifest itself, not if it will manifest, you are absolutely 100% certain, Friedberg, that somebody will do something very bad in terms of the chemical example, as but one, we're only determining here what level of hardware and what year that will happen, Chamath is saying, we know it's going to happen, whether it's two or 10 or, you know, five years, let's be thoughtful about it. And I think, you know, this discussion we're having here, I think is super relevant.

• 33:40Chamath Palihapitiya?

  And I just think that on a spectrum, it's, this is a unique moment where the most knowledgeable people across every single political spectrum, persuasion, for-profit, nonprofit, Democrat, Republican, right, Elon and Sam, I'll just use those as the two canonical examples to demonstrate, are pro-regulation. And then the further and further you get away, the less technically astute you are, the more anti-regulation and like pro-market you are. And all I'm saying is, I think that should also be noted, that that's a unique moment, that the only other time that that's happened was around nuclear weapons. And, you know, that's when Bertrand Russell and Einstein.

• 34:17David Friedberg?

  I don't think that's true. I actually think it's just politically, I think it's politically incorrect to be anti-regulation right now. I think because of what you're saying, just give me a second, I think because of what you're saying, everyone on the left and the right, it's, it's become popular to be pro-regulation on AI and say that AI is going to doom the world. And it's unpopular and it's politically incorrect.

• 34:35Chamath Palihapitiya?

  No, I'm saying Elon and Sam. No, I'm saying Elon and Sam are pro-regulation.

• 34:37David Friedberg?

  I've explained my point of view on Sam. Elon's different, but I think like, I think it's become politically incorrect to stand up and say, you know what, this is a transformative technology for humanity. I don't think that there's a real path to regulation. I think that there are laws that are in place that can protect us in other ways, with respect to privacy, with respect to fraud, with respect to biological warfare, and all the other things that we should worry about.

• 34:59Chamath Palihapitiya?

  Elon has said pretty clearly, he doesn't give a shit about what it does to make money or not, he cares about what he thinks. So all I'm saying is, that's a guy that's not trying to be politically correct.

• 35:07David Sacks?

  Elon has a very specific concern, which is AGI. He's concerned that we're on a path to a digital superintelligence, singularity, and if we create the wrong kind of Artificial general intelligence that decides that it doesn't like humans, that is a real risk to the human species. That's the concern he's expressed. But that's not what the hearing was really about, and it's not what any of these regulatory proposals are about. The reality is, none of these senators know what to do about that. Even the industry doesn't know what to do about the long-term risk of creating an AGI.

• 35:44Jason Calacanis?

  Nobody knows.

• 35:44David Sacks?

  Nobody knows. And so, and so I actually, I disagree with this idea. Tom, earlier you said that there's a thousand use cases here that could destroy the human species. I think there's only one. There's only one species-level risk, which is AGI. But that's a long-term risk. We don't know what to do about it yet. I agree, we should have conversations. What we're talking about today is whether we create some new licensure regime in Washington so that politically-connected insiders get to control and shape the software industry. And that's a disaster. Let me give you another detail on this. So, in one of the chat groups I'm in, there was somebody who just got back from Washington. I won't say who they are. It's not someone who's famous outside the industry, but they're kind of like a tech

• 36:29David Sacks?

  leader. And what they said is, they just got back from Capitol Hill and the White House. And I guess there's like a White House summit on AI. You guys know about that?

• 36:39Jason Calacanis?

  Yeah.

• 36:40David Sacks?

  So, what this person said is that the White House meeting was super depressing. Some smart people were there, to be sure, but the White House and VP's teams were rapidly negative. No real concern for the opportunity or economic impact, just super negative.

• 36:58Jason Calacanis?

  Of course.

• 36:59David Sacks?

  Basically, the mentality was that tech is bad. We hate social media. This is the hot new thing. We have to stop it.

• 37:05Jason Calacanis?

  Of course.

• 37:06David Sacks?

  That basically is their attitude. They don't understand the technology.

• 37:08Jason Calacanis?

  You're talking about the White House, yeah.

• 37:09David Sacks?

  The VP specifically, because she's now the AI czar.

• 37:13Jason Calacanis?

  To put Kamala Harris in charge of this makes no sense. I mean, does she have any background in this? Like, it just shows like a complete utter lack of awareness. Where's the Meghan Smith, or somebody like a CTO to be put in charge of this? Remember Meghan Smith was CTO under, I guess, Obama? Like, you need somebody with a little more depth of experience here, like, hopefully in the multi-decade points.

• 37:33Chamath Palihapitiya?

  Are you guys then saying you're pro-regulation depending on who's in charge?

• 37:36Jason Calacanis?

  Well, I'm pro-thoughtfulness. I'm pro-thoughtfulness.

• 37:39David Sacks?

  I'm illustrating that, really, this whole new agency that's being discussed is just based on vibes.

• 37:45Jason Calacanis?

  You're not down with the vibes?

• 37:46Chamath Palihapitiya?

  Vibes.

• 37:47David Sacks?

  The vibe is that a bunch of people in Washington don't understand technology and they're afraid of it. If there's anything you're afraid of, you're gonna wanna control.

• 37:56Jason Calacanis?

  These are socialists, David. They're socialists. They hate progress. They are scared to death that jobs are gonna collapse. They're socialists. They're union leaders. This is their worst nightmare. Because the actual truth of this technology is 30% more efficiency, and it's very mundane. This is the truth here, I think, that representatives have. 30% more efficiency means Google, Facebook, and many other companies, finance, education, they do not add staff every year. They just get 30% more efficient every year. And then we see unemployment go way up, and Americans are gonna have to take service jobs, and white-collar jobs are gonna be refined to like a very elite few people who actually do work in the world. There is absolutely no

• 38:39David Sacks?

  There'll be a lot of new companies. If humans can become, if knowledge workers can become 30% more productive, there'll be a lot of new companies.

• 38:46Jason Calacanis?

  Absolutely.

• 38:47David Sacks?

  And the biggest shortage in our economy is coders.

• 38:49Jason Calacanis?

  Right. And we're gonna have an unlimited number of them now. They're all gonna go 10

• 38:52David Sacks?

  Yeah, I don't know if it's unlimited, but yes, it's a good thing if you give them superpowers. We've talked about this before.

• 38:55Jason Calacanis?

  Yeah, yeah.

• 38:56David Sacks?

  So, I think it's too soon to be concluding that we need to stop job displacement. That hasn't even occurred yet.

• 39:02Jason Calacanis?

  I'm not saying it's actually gonna happen. I do agree there'll be more startups. I'm seeing it already. I just think that's what they fear. That's their fear. And that's the fear of the EU. The EU is gonna be protectionist, unionist, protect pro-workers, which is fine.

• 39:16David Sacks?

  Well, unions aren't gonna be affected, because these are not blue-collar jobs we're talking about. These are knowledge workers.

• 39:19Jason Calacanis?

  There's white-collar unions out. All the media companies created unions. And look at them. They're all circling, all these media companies are circling the drain and going out of business.

• 39:27David Sacks?

  Fair enough. But that's on the margins. I mean, that's not

• 39:28Jason Calacanis?

  They're trying to start tech unions.

• 39:29David Sacks?

  Sure, they're trying to start them. But when we think of unionized workers, you're thinking about factory workers. And these people are not affected.

• 39:36Jason Calacanis?

  Okay. Listen, this has been an incredible debate. This is why you tune into the pod. A lot of things can be true at the same time. I really think the analogy of the atom bomb is really interesting because what Elon is scared about with general artificial intelligence is nuclear holocaust, the whole planet blows up. Between those two things are things like Nagasaki and Hiroshima or a dirty bomb and many other possibilities with nuclear power, you know, Fukushima, you know, etc.

• 40:03David Sacks?

  There's been no Hiroshima.

• 40:05Jason Calacanis?

  Not yet, right. And you know, the question is, is a three mile island, is a Fukushima, is a Nagasaki, are those things probable? And I think we are all looking at this saying there will be something bad that will happen. There will be the equivalent.

• 40:20David Sacks?

  Look, ChatGPT strings together and these large language models string together words in really interesting ways and they give computers the ability to have a natural language interface. That is so far from AGI. I think it's a component.

• 40:32Jason Calacanis?

  Now do auto, now do auto GPT.

• 40:34David Sacks?

  Hold on, I think it's a, obviously the ability to understand language and communicate in a natural way is a component of a future AGI. But by itself, these are models for stringing together language.

• 40:45Jason Calacanis?

  Now do auto GPT where these things go out and pursue things without any interference.

• 40:50Chamath Palihapitiya?

  I would be the first one to say that if you wanted to scope models to be able to just do human language back and forth on the broad open internet, you know, there's probably a form, David, where these chat GPT products can exist. I don't, I think that those are quite benign. I agree with you, but I think what Jason is saying is that every week you're, you're taking a leap forward and already with auto GPTs, you're talking about code that runs in the background.

• 41:18Jason Calacanis?

  Without supervision.

• 41:19Chamath Palihapitiya?

  It's not a human interface that's like, hey, show me how to color my cookies green for St. Patty's Day. It's not what it's.

• 41:26Jason Calacanis?

  Plan my trip to Italy, yeah.

• 41:27Chamath Palihapitiya?

  Yeah, it's not doing that. So I just think that there's, there's a place well beyond what you're talking about. And I think you're minimizing the problem a little bit by just kind of saying the whole class of AI is just chat GPT and asking, kid asking it to help it with its homework.

• 41:41Jason Calacanis?

  This example, I hate to say it out loud, but somebody could say, here is the history of financial crimes that were committed and other hacks, please with their Own model on their own server say, please come up with other ideas for hacks, be as creative as possible and steal as much money as possible and put that in an auto GPT, David, and study all hacks that occur in the history of hacking. And it could just create super chaos around the world.

• 42:05David Sacks?

  And you can be sure. The tech industry is going to regret buying into this narrative because the members of the judiciary committee are doing the same playbook they ran back in 2016. After that election, they ran all these hearings on disinformation, claiming that social networks have been used to hack the election. It was all a phony narrative. Hold on that they got.

• 42:21Jason Calacanis?

  What happened?

• 42:22David Sacks?

  That they got tech companies to buy into.

• 42:24Jason Calacanis?

  Biden, they, the Russians hacked, who hacked right after that?

• 42:26David Sacks?

  Stop, they got, they got all these tech CEOs to buy into that phony narrative. Why? Because it's a lot easier for the tech CEOs just to agree and tell the centers what they want to hear to get them off their backs. And then what did that lead to? A whole censorship industrial complex. So we're going to do the same thing here. We're going to buy into these phony narratives here to get the centers off our backs. And that's going to create this giant AI industrial complex that's going to slow down real innovation and be a burden on entrepreneurs.

• 42:55Jason Calacanis?

  Okay, lightning round, lightning round, we got to move on. Three more topics I want to hit, let's keep going.

• 42:59Chamath Palihapitiya?

  If I were to become an evil.

• 43:01Jason Calacanis?

  More evil.

• 43:01Chamath Palihapitiya?

  Yeah, what, what is it called, an evil comic book character?

• 43:06Jason Calacanis?

  A supervillain.

• 43:07Chamath Palihapitiya?

  A supervillain, I would train.

• 43:08Jason Calacanis?

  An even more loathsome supervillain, continue.

• 43:11Chamath Palihapitiya?

  I would take every single virus patch that's been developed and publicized, learn on them and then find the next zero day exploit on a whole bunch of stuff.

• 43:21Jason Calacanis?

  I mean, it's just like. Can we even publish that idea? Please don't, I mean, I'm, I'm worried about publishing that idea.

• 43:25Chamath Palihapitiya?

  That's not an intellectual leap. I mean, you have to be a duller.

• 43:29Jason Calacanis?

  It's obvious. Okay, let's move on. Another great debate, Elon hired a CEO for Twitter, Linda Iaccarino, I hope I'm pronouncing that correct, was the head of ad sales at NBC Universal. She's a legend in the advertising business. She worked at Turner for 15 years before that. She is a workaholic is what she says. She's going to take over everything but product and CTO. Elon's going to stick with that. She seems to be very moderate and she follows people on the left or right. People are starting the character assassination and trying to figure out her politics. That she was involved with the W E World Economic Forum, which anybody in business

• 44:08Jason Calacanis?

  basically does. But your take, Sax, on this choice for CEO and what this means just broadly for the next six months, because we're sitting here at six months, almost exactly since Elon took over. Obviously, you and I were involved in month one, but not much after that. What do you think the next six months holds? And what do you think her role is going to be? Obviously, there's some precedent for this with, you know, when at SpaceX?

• 44:33David Sacks?

  Listen, I think this choice makes sense on this level. Twitter's business model is advertising. Elon does not like selling advertising. She's really good at selling advertising. So he's chosen a CEO to work with who's highly complimentary to him in their skill sets and interests. And I think that makes sense. I think there's a lot of logic in that. What Elon likes doing is the technology and product side of the business. He actually doesn't really like the, let's call it the standard business chores, and especially related to, like we said, advertising.

• 45:09Jason Calacanis?

  It's his worst nightmare.

• 45:10David Sacks?

  Yeah, so he wants to offload that stuff.

• 45:12Jason Calacanis?

  Me with advertisers, I think is his personal nightmare.

• 45:14David Sacks?

  Right. So I think the choice makes sense on that level. Now, instantly, you're right, her hiring led to attacks from both the left and the right. The right, you know, pointed out her views on COVID and vaccines and her work with the W E F. And then on the left, I mean, the attack is that she's following libs at TikTok, which you're just not allowed to do, apparently.

• 45:35Jason Calacanis?

  A follow is not an endorsement.

• 45:37David Sacks?

  Well, if you're just following libs at TikTok, they want to say you're some crazy right winger now.

• 45:41Jason Calacanis?

  Well, she also follows David Sacks. So that does mean that she's pretty, that that is a signal. But the truth is, Sax, correct me if I'm wrong here, or Chumoff, maybe I'll send it to you. If you pick somebody that both sides dislike or are trying to take apart, you probably pick the right person. Yeah.

• 45:56Chamath Palihapitiya?

  Here's what I think.

• 45:57Jason Calacanis?

  Okay, go ahead.

• 45:58Chamath Palihapitiya?

  We're not gonna know how good she is for six to nine months, but here's what I took a lot of joy out of. Here's a guy who gets attacked for all kinds of things now, right? He's an anti Semite apparently, and then he had to be like, "I'm very pro Semite." He's a guy that all of a sudden people think is a conspiracy theorist. He's a guy that people think is now on the raging right. All these things that are just like inaccuracies, basically firebombs thrown by the left. But here's what I think is the most interesting thing. For a guy that theoretically is supposed to be a troll and everything else, he has a female chairman at Tesla, a female CEO at Twitter, and a female president at SpaceX.

• 46:42Jason Calacanis?

  Of course, it's a great insight. It's the same insight, I think, a lot of these virtue signaling lunatics on the left.

• 46:48Chamath Palihapitiya?

  Virtue signaling mids.

• 46:50Jason Calacanis?

  They're lunatics, and you know what? Like, you have Elizabeth Warren and Bernie Sanders giving, you know, the CEO of Starbucks a hot time when he doubled the pay of the minimum wage, gave them healthcare.

• 47:07Chamath Palihapitiya?

  Friedberg, you love mid, right? That's a great term, isn't it?

• 47:09David Friedberg?

  It's so funny, it's so funny.

• 47:11Chamath Palihapitiya?

  These fucking mids.

• 47:12Jason Calacanis?

  And paid for the college tuition. What gives you the right at Starbucks to pay for college tuition and double the minimum wage? That's all right.

• 47:20Chamath Palihapitiya?

  So, so mid.

• 47:21David Friedberg?

  I don't know why it's so funny to me.

• 47:23Chamath Palihapitiya?

  Isn't it so great? Like, you can just pick, you can picture them. When I say that these are these mids feverishly typing on their keyboards, their virtue signaling nonsense, Sax wrapping it up.

• 47:33David Sacks?

  Yeah, look, like you said, Elon has worked extremely well with Gwen Shotwell, who's the president of SpaceX for a long time. And I think that relationship shows the way to make it work here at Twitter, which is they have a very complimentary skill set. I think my understanding is that Gwen focuses on the business side and the sales side of the operation. Elon focuses on product and technology. She lets Elon be Elon. I think if Linda tries to rein Elon in, tell him not to tweet, or tries to meddle in the free speech aspects of the business, which is the whole reason he bought... Twitter, which is

• 48:06Jason Calacanis?

  That is the beginning and end of it.

• 48:08David Sacks?

  Yeah, that's right. That's when it will fall apart. So my advice would be let Elon be Elon. You know, he bought this company to make it a free speech platform. Don't mess with that. And I think it could work great.

• 48:20Jason Calacanis?

  And a free speech platform it is when you are saying anything about COVID. And I really don't even want to say it here because I don't want our to even say the word COVID or vaccine means that this could get tagged by YouTube and be D. You know, the algorithm could, could, could, uh, D, um, I don't know what they call it. Deprecate this and when we don't show up and people don't see us because we just said the word COVID. I mean, the censorship built into these algorithms is absurd. But speaking of absurd, Lina Khan, who has been the least effective FTC chair, I think, started out pretty promising with some interesting ideas. She's now moved to block a major pharma deal. In December, Amgen agreed to acquire Dublin-based Horizon Therapeutics for 27.8 billion.

• 49:05Jason Calacanis?

  This is the largest pharma deal announced in 2022. FTC has filed a lawsuit in federal court seeking injunction that would prevent the deal from closing. The reasoning is the deal would allow Amgen to entrench the monopoly positions of Horizon's eye and Gout Drugs. The agency said that those treatments don't face any competition today and that Amgen would have a strong incentive to prevent any potential rivals from introducing similar drugs. Chamath, the pharmaceutical industry is a little bit different than the tech industry.

• 49:33Chamath Palihapitiya?

  Insanity.

• 49:34Jason Calacanis?

  Explain why, and then Sax will go to you on the Gout stuff because I know that personally impacts you. Go ahead, Chamath.

• 49:40Chamath Palihapitiya?

  I think that this is a little like scientifically illiterate, to be honest.

• 49:46Jason Calacanis?

  Unpack.

• 49:46Chamath Palihapitiya?

  The thing is that you want drugs that can get to market quickly. But at the same time, you want drugs to be safe and you want drugs to be effective. And I think that the FDA has a pretty reasonable process. And one of the direct byproducts of that process is that if you have a large indication that you're going after, say diabetes, you have to do an enormous amount of work. It has to be run on effectively thousands of people. You have to stratify it by age. You have to stratify it by gender. You have to stratify it by race. You have to do it across different geographies, right? The bar is high, but the reason the bar is high is that if you do get approval, these all of a sudden become these blockbuster 10, 20, 30 billion dollar drugs.

• 50:28Chamath Palihapitiya?

  Okay. And they improve people's lives and they allow people to live, et cetera, et cetera. What has happened in the last 10 or 15 years because of Wall Street's influence inside of the pharma companies is that what pharma has done a very good job of doing is actually pushing off a lot of this very risky R and D to young, early-stage biotech companies. And they typically do the first part of the work, they get through a phase one, they even may be able to sometimes go and start a phase two trial, a two-way trial, and then they typically can get sold to pharma. And these are like multi-billion dollar transactions.

• 51:12Chamath Palihapitiya?

  And the reason is that the private markets just don't have the money to support the risk for these companies to be able to do all the way through a phase three clinical trial because it would cost, in some cases, five, six, seven, eight billion dollars. You've never heard of a tech company raising that much money, except in a few rare cases. In biotech, it just doesn't happen. So you need the M and A machine to be able to incentivize these young companies to even get started in the first place. Otherwise, what literally happens is you have a whole host of diseases that just stagnate. Okay? And instead, what happens is a younger company can only raise money to go after smaller diseases, which have smaller populations, smaller revenue potential, smaller costs

• 51:57Chamath Palihapitiya?

  because the trial infrastructure is just less. So if you don't want industry to be in this negative loop where you only work on the small diseases and you actually go and tackle the big ones, you need to allow these kinds of transactions to happen. The last thing I'll say is that even when these big transactions happen, half the time they turn out to still not work. There is still huge risk. So don't get caught up in the dollar size. You have to understand the phase it's in. And the best example of this is the biggest outcome in biotech, private investing in Silicon Valley was this thing called Stemcentrx, and that thing was a $10 billion dud, right? But it allowed all these other companies to get started after Stemcentrx got bought for $10 billion.

• 52:38Jason Calacanis?

  Friedberg, I want to get your take on this, especially in light of maybe something people don't understand, which is that the amount of time you get to actually exclusively monetize a drug. Because, my understanding, you correct me if I'm wrong, you get a 20-year patent, it's from the date you file it, but then you're working towards getting this drug approved by the FDA. So by the time the FDA approves a drug, this 20-year patent window, how many years do you actually have exclusively to monetize that drug? And then your wider thoughts on this FDA?

• 53:07David Friedberg?

  Yeah, I'm not going to answer that question right now, because I do want to kind of push back on the point. I'm generally pretty negative on a lot of the comments Lena Kahn's made in her positioning, and obviously, as you guys know, we've talked about it on the show. But I read the FTC filing, it's in federal court. And if you read the filing, let me just start, the company that Amgen's trying to buy is called Horizon Therapeutics, which is a company that's doing about $4 billion in revenue a year, about a billion to a billion and a half in EBITDA. So it's a business that's got a portfolio of orphan drugs, meaning drugs that treat orphan conditions that aren't very big blockbusters in the pharmaceutical drug context. And so it's a nice portfolio of cash generating drugs.

• 53:50David Friedberg?

  Amgen buying the business gives them real revenue, real EBITDA, and helps bolster a portfolio that, you know, is aging. And I think that's a big part of the strategic driver for Amgen to make this massive $28 billion acquisition. The FTC's claim in the filing, which I actually read, and I was like, this is actually a pretty good claim, is that the way that Amgen sets the prices for their pharmaceutical drugs is they go to the insurance companies, the payers, and the health systems, and they negotiate drug pricing. And they often do both, multi-product deals. So they'll say, hey, we'll give you access to this product at this price point, but we need you to pay this price point for this product.

• 54:33David Friedberg?

  And over time, that drives price inflation, it drives costs up, and it also makes it difficult for new competitors to emerge, because they tell the insurance company, you have to pick our drug over other drugs in order to get this discounted price. And so it's a big part of their negotiating strategy that they do with insurance companies. So the FTC's claim is that by giving Amgen this large portfolio of drugs that they're buying from Horizon, it's going to give them more negotiating leverage and the ability to do more of this drug blocking that they do with insurance companies and other payers in the drug system. So they're trying to prevent pharmaceutical drug price inflation and they're trying to increase competition in their lawsuits. So I felt like it was a fairly compelling case. I'm no lawyer on antitrust and monopolistic practices and the Sherman Act, but this was

• 55:18David Friedberg?

  not, sorry, let me just say this was not an early-stage biotech risky deal that they're trying to block.

• 55:23Chamath Palihapitiya?

  No, no, but it is.

• 55:24David Friedberg?

  A mature company with $4 billion in revenue and $1.5 billion in EBITDA.

• 55:27Chamath Palihapitiya?

  I understand. I read it too, but two comments. It is because the people that traffic in these stocks are the same ones that fund these early-stage biotech companies. And I talked to a bunch of them and they're like, if these guys block this kind of deal, we're going to get out of this game entirely. So just from the horse's mouth, what I'm telling you is you're going to see a pall come over the early-stage venture financing landscape because a lot of these guys that are crossover investors, that own a lot of these public biotech stocks, that also fund the private stocks, will change their risk posture if they can't make money. That's just the nature of capitalism. The second thing is Lina Khan did something really good about what you're talking about this week, actually, which is she actually went after the PBMs. And if you really care about drug inflation and you follow the dollars, the real culprits

• 56:12Chamath Palihapitiya?

  around this are the pharmacy benefit managers. And she actually launched a big investigation into them. But this is what speaks to the two different approaches. It seems that unfortunately for the FTC, every merger just gets contested for the sake of it being contested. Because I think that if you wanted to actually stop price inflation, there are totally different mechanisms, because why didn't you just sue all the PBMs? Well, there's no merger to be done, but you can investigate and then you could regulate. And I think that that's probably a more effective way. And the fact that she targeted the PBM says that somebody in there actually understands where the price inflation is coming from. But I don't think something like an Amgen, Horizon, because what I think will happen

• 56:54Chamath Palihapitiya?

  is all the folks will then just basically say, well, man, if these kinds of things can't get bought, then why am I funding these other younger things?

• 57:01David Friedberg?

  Yeah, but yeah, we're just not seeing a lot of the younger stuff get... Get blocked. I don't think we've seen any attempts at blocking speculative portfolio acquisitions or speculative company acquisitions. So

• 57:13Chamath Palihapitiya?

  I think these guys are getting caught up in the dollar number, you know?

• 57:17David Friedberg?

  Yeah.

• 57:17Chamath Palihapitiya?

  So I think the problem is they see 28 billion. They're like, we need to stop it.

• 57:20Jason Calacanis?

  You know what's amazing? I'll just wrap on this because it's a good discussion, but I think we got to keep moving here. Is I took the PDF that you shared and I put it into ChatGPT now.

• 57:30David Friedberg?

  Oh, wow.

• 57:31Jason Calacanis?

  And you don't need to upload the PDF anymore. You could just say summarize this and put the link. And it did it instantly.

• 57:38David Friedberg?

  It's awesome.

• 57:38David Sacks?

  Are you using the browsing plugin or?

• 57:41Jason Calacanis?

  I just use ChatGPT. No, it's not the browser plugin. I just did. This is the 3.5 model. I just gave it the link and it pulled the link in the GPT 3.5 model.

• 57:50David Friedberg?

  Does Bard do that?

• 57:51Jason Calacanis?

  I didn't know it could do that. That's new.

• 57:53David Sacks?

  They must have added browsing in the background.

• 57:55Jason Calacanis?

  Yeah, or just pulling a

• 57:56David Friedberg?

  They did today, by the way.

• 57:57Jason Calacanis?

  Whoa.

• 57:58David Sacks?

  They did that today.

• 57:59David Friedberg?

  They did it today. Yeah.

• 58:00David Sacks?

  Well, remember last week, we said that they had to build browsing into the actual product like Bard, right? Otherwise it couldn't be your Bard.

• 58:06Jason Calacanis?

  I gotta say, Open, Closed AI, Closed AI is on the top of their game.

• 58:10Chamath Palihapitiya?

  The app is available in the apps right now, right? As of today?

• 58:12Jason Calacanis?

  No, they, they had a test app. I was on the test flight.

• 58:16Chamath Palihapitiya?

  No, no, no. They just launched the app today.

• 58:17Jason Calacanis?

  They did? Oh, that's game over, man. If this thing is an app form, that's going to 10x the number of users and it's going to 10x the amount of usage or 10 users.

• 58:24David Friedberg?

  I just did the same thing for Bard. We should compare the two, but Bard, Bard was pretty good as well. Yeah.

• 58:29Jason Calacanis?

  Yeah, wow.

• 58:29Chamath Palihapitiya?

  Can you ask Bard to actually compare its summary with ChatGPT summary?

• 58:34Jason Calacanis?

  Can you tell us which one's better? All right, this is some interesting news here. You know, we, speaking of platform shifts.

• 58:42David Sacks?

  Do I get to give my view on the Linacon thing?

• 58:45Jason Calacanis?

  Oh, well, yes. But first start with, I don't, I didn't want to, this was getting a little Well, it's getting a little personal here, David, and I didn't, I didn't want to trigger you. I know you've been struggling with the gout because of your lifestyle choices, the alcohol, the foie gras, everything, but no, you've lost a lot of weight. I give you a lot of credit. Tell us, what do you think about the bundling we're seeing here? Because it does seem Microsoft has with the operating system.

• 59:07David Sacks?

  Yeah, it's very similar. And what I said in the context of tech is that we should focus on the anti-competitive tactics and stop those rather than blocking all mergers. And I think the same thing is happening now in the pharma space. If bundling is the problem, focus on bundling. The problem when you just block M and A is that you deny early investors, one of the biggest ways that they can make a positive outcome.

• 59:29Jason Calacanis?

  And what's the downstream effect of that?

• 59:31David Sacks?

  Yeah, exactly. Look, it is hard enough to make money as either a farmer investor or as a VC that there's only two good outcomes, right? There's IPOs, there's M and A.

• 59:40Jason Calacanis?

  Preach, brother, preach.

• 59:41David Sacks?

  Everything else basically goes, everything else is a zero, goes bankrupt. So if you take M and A off the table, you really suppress the already challenged returns of venture capital.

• 59:52Jason Calacanis?

  Yeah, well said, well said.

• 59:54David Sacks?

  And you're right. You mentioned earlier that we were willing to give Lina Khan a chance. We thought that some of her ideas were really interesting because I think there are these huge tech companies that do need to be regulated, these big tech monopolies. Basically that you have the mobile operating system duopoly with Apple and Google.

• 1:00:10Jason Calacanis?

  Yes.

• 1:00:10David Sacks?

  You've got Amazon, you've got Microsoft. And there is a huge risk of those companies preferring their own applications over downstream applications or using these bundling tactics.

• 1:00:21Jason Calacanis?

  Yes.

• 1:00:22David Sacks?

  If you don't put some limits around that, that creates, I think, an unhealthy tech ecosystem.

• 1:00:27Jason Calacanis?

  This is the insight, and I think it's exactly correct.

• 1:00:29David Sacks?

  Exactly.

• 1:00:30Jason Calacanis?

  For Lina Khan, I know she listens to the pod. Hey, Lina. You want to go after tactics, not acquisitions. So if somebody buys something and they lower prices and increases consumer choice, that's great. If it encourages more people to invest more money into innovation, that's great. But if the tactics are, we're going to bundle these drugs together to keep some number of them artificially high or reduce choice, or if we're going to bundle features into the, you know, suite of products and we do anti-competitive stuff, you have to look at the tactics on the field. Are people cheating? And are they using the monopoly power to force you to use their app store? Just make Apple have a second app store. That's all we're asking you to do. There should be an app store

• 1:01:13Jason Calacanis?

  on iOS that doesn't charge any fees or charges 1% fees.

• 1:01:20Jason Calacanis?

  Break the monopoly on the App Store. Sax is so right. Perfectly said. She actually did issue compulsory orders to the PBMs. So to your point Sax, the FTC has been worried that what Friedberg said had is been happening. But the real sort of middlemen manipulator in this market are the pharmacy benefit managers. And so this week, she actually issued compulsory orders to the PBMs and said, turn over all your business records to me. I'm going to look into them. That makes a ton of sense. But then on the same hand, it's like you see merger and you're like, no, it can't happen. It just doesn't speak to a knowledge of the market. We should have Lena on. Hey Lena, I know you listen to the pod. I've heard the back channel. Just come on the pod. She would be a good guest, right? We would have a good conversation. Yeah. Open invite. Nikki Haley's coming on the pod.

• 1:02:03David Friedberg?

  By the way, you have homework to do for the summit, which is to see if you can get Donald Trump to come on to the summit.

• 1:02:08Jason Calacanis?

  Okay. Huge. Love J Cal. Love all in. Great pod. Okay. Huge ratings. Okay. Not as good as Apprentice, but close. Okay. Great. Your mannerisms are unbelievable. Did you practice it? I did. I did a little bit. Only because I like to troll people and trigger them. I'm going to really dial in my Trump in the coming weeks. All right, here we go. Apple's long anticipated AR headset. That stands for augmented reality, which means VR, you can't see the real world. You're just in a, in a virtual world. AR lets you put digital assets on the real world. So you can see what's happening in the real world, but you can put graphics all around. That's expected to be revealed as early as June.

• 1:02:52Jason Calacanis?

  The projected cost is going to be around $3,000. It won't ship until the fall. This is a break from Apple's typical way of releasing products, which is to wait till it's perfect and to wait until all consumers can afford it. This is a different approach. They're going to give this out to developers early. And Tim Cook is supposedly pushing this. There was another group of people inside of Apple who did not want to release it. But there is some sort of external battery pack. It seems like a bit of a Frankenproduct, FrankenSight kind of project here that, you know, perhaps Steve Jobs wouldn't have wanted to release, but he needs to get it out, I think, because Oculus is making so much progress. The killer app supposedly is a FaceTime-like live chat experience. That seems interesting.

• 1:03:37Jason Calacanis?

  But they look like ski goggles. Your thoughts, Chamath, on this as the next compute platform, if they can get it, you know, to work. Would you wear these? Would they have to be Prada? What's the story here?

• 1:03:49Chamath Palihapitiya?

  No, no.

• 1:03:50David Friedberg?

  Does this seem like a weird conversation? Because none of us fucking know. None of us have seen this product and none of us have used it.

• 1:03:54Jason Calacanis?

  Friend of the pod, Palmer Lucky says it's incredible.

• 1:03:58David Friedberg?

  So what? That's just like commenting on one guy's five-letter, five-word tweet.

• 1:04:02Jason Calacanis?

  Let's just talk, let's.

• 1:04:03David Sacks?

  Palmer knows. I mean, Palmer invented Oculus.

• 1:04:05David Friedberg?

  Great. But what are we talking about? We have nothing to say about it.

• 1:04:08Jason Calacanis?

  Well, no, I'll form of a really good question here. Do you believe this is going to be a meaningful compute platform in the coming years because Apple is so good at product?

• 1:04:17David Friedberg?

  How do we know until we see it? We gotta see it.

• 1:04:19Chamath Palihapitiya?

  I think it's Facebook.

• 1:04:20David Friedberg?

  Of course they're, of course they're good at product. Let's, let's see the product, though. Like.

• 1:04:23Jason Calacanis?

  All right, fine. Sax, what are your thoughts?

• 1:04:25David Sacks?

  I think it's a good thing that they're launching this. Like you said, it is a deviation from what they've normally done. They normally don't release a product unless they believe the entire world can use it. So their approach has been only to release mass, mass market products and have a very small portfolio of those products. But when those products work, they're, you know, billion user home runs. This obviously can't be at a $3,000 price point, and it also seems like it's a little bit of a early prototype where the batteries are like in a fanny pack around your waist. And there's a ways to go around this. But I, I give them credit for launching what is probably going to be more of an early prototype so they could start iterating on it. I mean, the reality is the Apple Watch, the first version kind of sucked.

• 1:05:06Jason Calacanis?

  Oh, first five versions.

• 1:05:08David Sacks?

  Yeah. Now they're on one that's pretty good, I think. So, look, I think this is a cool new platform. They get knocked on for not innovating enough. I think, good, let them try something new. I think this will be good for Meta to have some competition.

• 1:05:20Jason Calacanis?

  Yeah, it's great.

• 1:05:21David Sacks?

  Having two major players in the race, maybe it actually speeds up the innovation. Maybe we get somewhere.

• 1:05:27Jason Calacanis?

  Chamath, any thought here?

• 1:05:29Chamath Palihapitiya?

  I mean, I think they should have done something in cars.

• 1:05:34Jason Calacanis?

  What should they do in cars? If you were gonna talk about the car, what would it be? Tell me what you think would be the right approach. You were gonna do the Facebook phone. That could have changed the entire destiny of Facebook.

• 1:05:44Chamath Palihapitiya?

  They should have bought Tesla when they could have had the chance for four or five billion dollars.

• 1:05:47Jason Calacanis?

  They could have bought it for 10 billion, 20 billion. It's a woman that got to 50, 60 that it got out of reach.

• 1:05:53Jason Calacanis?

  What do you think the car should?

• 1:05:54David Sacks?

  No, they could have bought it at 100 billion.

• 1:05:55Chamath Palihapitiya?

  They could have bought 100 billion. Tim Cook famously wouldn't take the meeting. Elon said it. He wouldn't, he wouldn't meet with us.

• 1:05:59Jason Calacanis?

  Bizarre, bizarre.

• 1:06:01David Sacks?

  Maybe they missed an opportunity there, but I do think the end game with the AR headset or glasses, right?

• 1:06:06Jason Calacanis?

  Yes.

• 1:06:07David Sacks?

  Where you get the screens and you get the Terminator mode and in, is that, what is that?

• 1:06:12Jason Calacanis?

  These are just glasses that.

• 1:06:14David Sacks?

  Oh, okay. You're acting like they were like fancy technology.

• 1:06:16Jason Calacanis?

  No, but this, this size glasses is what you're talking about.

• 1:06:20David Sacks?

  Yeah, you have like a little camera built in and in conjunction with AI. Then it gets really interesting. So that, that's the end game here, I think.

• 1:06:27Jason Calacanis?

  Give the audience an example of what this combination of AI plus AR could do.

• 1:06:31David Sacks?

  When you're walking around, it could layer on intelligence about the world. You meet with somebody and it can remind you of their name and the last time you met with them and give you a summary of what you talked about. What action items there are.

• 1:06:43Jason Calacanis?

  You could be walking in the city and it could tell you, it knows you like Peking duck. It could show you, hey, there's a Peking duck place over here. Some reviews of it. It just knows you and it's customized in the world.

• 1:06:51Chamath Palihapitiya?

  What about for people that do the same routine 99% of the time? How does it gonna help you then?

• 1:06:57Jason Calacanis?

  Hmm, it could tell you your steps every day, could tell you incoming messages. So you don't have to take your phone out.

• 1:07:02Chamath Palihapitiya?

  Are you gonna spend $3,000 on that?

• 1:07:03Jason Calacanis?

  No, but you would spend, people spend, people spend $1,200.

• 1:07:08Chamath Palihapitiya?

  To get your notifications on your wrist. Why do you want it on your eyes for 3,000?

• 1:07:11Jason Calacanis?

  I would love this.

• 1:07:12David Sacks?

  Maybe I just do like a lot of meetings or I'm at events where people are coming up to me and I've met him like once a year before. Like it would be really helpful to kind of have the Terminator mode.

• 1:07:22Jason Calacanis?

  Let's be honest though, the Terminator mode for you to be able to be present with your family and friends, but be playing chess with Peter Thiel on those glasses. That's your dream come true. You and Peter in AR playing chess all day long. Throw up the picture of Saks beating Peter Thiel. I watched the clip from the early All In episodes when we discussed you beating Peter Thiel. What a great moment it was for you. All right, listen, let's wrap up with this Gallup survey. The number of Americans who say it's a good time to buy a house has never been lower. 21% say it's a good time to buy a house, down 9% from the prior low of a year ago. Prior to 2022, 50% or more consistently thought it was

• 1:08:02Jason Calacanis?

  a good time to buy. Significantly, significantly fewer expect local housing prices to increase in the year. Hey, Saks, is this like a predictive of a bottom and pure capitulation? And then that means maybe it is in fact a good time? How would you read this data?

• 1:08:18David Sacks?

  I don't see it as a bottom necessarily. The way I read the data is that the spike in interest rates have made it very unaffordable to buy a house right now. You've got, you know, the mortgages are what, like 7% interest rate or even slightly higher? So people just can't afford the same level of house that they did before. I mean, mortgages were at 3, 3.5%, like a year and a half ago. Now, I think what's kind of interesting is that even in the 1980s, the early 1980s, when interest rates were at like 15%, you still had 50% thought it was an okay time to buy a house or attractive time to buy a house. So for the number to be this low tells me that it's

• 1:08:58David Sacks?

  not just about interest rates. I think consumer confidence is also plummeting and people are feeling more insecure. So I think it's just another economic indicator that things are looking really shaky right now. And I'll tell you, one of the knock on effects of this is going to be that people can't move because in order to move, you have to sell your current house and then buy a new one. And you're not going to want to sell your current house when prices are going down. And then for the new one, you're going to lose your 3% mortgage and have to get a new one at 7%. So you're not going to be able to buy anything like the house you currently have. So it freezes the market. It freezes mobility. I think over the last few years, during COVID, you saw tremendous movement between states. I think that's going to slow

• 1:09:43David Sacks?

  down a lot now because people just can't afford to trade houses. So as a result of that, I think discontent is going to rise because I think one of the ways that you create a pressure valve is when people are unhappy in a state, they just move somewhere else. Well, now they're not going to be able to do that.

• 1:09:57Jason Calacanis?

  Well, you can also move to a better opportunity for you and your family, whether that's schools, taxes, a job, lifestyle. So yeah, you can, you're getting, you're going to reduce joy in the country. And it also, it screws with price discovery, doesn't it, Jomaph? If you, if you don't have a fluid market here, then how does anybody know what their house is worth? And this just, again, creates more of a frost.

• 1:10:18Chamath Palihapitiya?

  I think Friedberg has said this a couple of times. Friedberg, you can correct me if I'm wrong, but like the, the home is like the disproportionate majority of most Americans' wealth, right?

• 1:10:28David Friedberg?

  Uh huh. It's all their wealth.

• 1:10:30Chamath Palihapitiya?

  All their wealth, yeah. So, I mean, there's that factoid.

• 1:10:37Jason Calacanis?

  Yeah. And then what does that do for their savings or whatever? Yeah, it's okay. You got incoming? What's going on? They're bringing you your lunch?

• 1:10:43Chamath Palihapitiya?

  No, I was looking, I was looking at, uh, some mansion. Mansion that's for sale.

• 1:10:50Chamath Palihapitiya?

  It's like a hundred and seventy-five million dollars, but they just cut the price to one forty. So I'm just taking a little gamble.

• 1:10:56Jason Calacanis?

  I mean, there's

• 1:10:56David Sacks?

  There's gonna be a lot of distress in the market soon. I'm predicting a lot of distress. Actually, can we shift to the commercial side for a second?

• 1:11:02Chamath Palihapitiya?

  Sam Zell just passed away. Yeah.

• 1:11:04Jason Calacanis?

  Sam Zell passed away? Today? Oh, wow.

• 1:11:07David Sacks?

  Rest in peace. Yeah.

• 1:11:08Jason Calacanis?

  Rest in peace. Uh, Chicago, uh, um, yeah, crazy.

• 1:11:12David Sacks?

  But speaking of

• 1:11:12Jason Calacanis?

  Bombastic, interesting guy.

• 1:11:14David Sacks?

  Yeah. But speaking of the real estate markets, I want to give an update on San Francisco CRE. I was talking to a broker the other day. And so here, here are the stats that they gave me. So it was a local broker and then someone from Blackstone. And they're fans of the pod and just came up to me. We started talking about what was happening in San Francisco. So shout out, shout out to them. Didn't take a, didn't take a photo, but, but in any event, they're, they're fans of the pod. So we started talking about what was happening in San Francisco, real estate. So the SF office market is just a level set is 90 million square feet. They said the vacancy rate is now 35%. So that's over 30 million square feet vacant and vacancy is still growing as leases end and companies shed space because some of that space that they're not using is not up for sublease.

• 1:11:59David Sacks?

  Everyone says, what about AI? Is AI going to be the savior? The problem is that AI companies are only, that's only about a million square feet of demand. So 1 million out of 30 million is going to be absorbed by AI. And maybe that number grows over time over the next five, 10 years as we create some really big AI companies, but it's just not going to bail out San Francisco right now. The other thing is that, you know, VC backed startups are very demanding in terms of their tenant improvements and landlords don't really have the capital right now to put that into the buildings and startups just are not the kind of credit worthy tenants that landlords really want. So this is not going to bail anybody out. They said there are a ton of zombie office towers, especially in Soma.

• 1:12:43David Sacks?

  And all these office towers are eventually going to be owned by the banks, which are going to have to liquidate them. And then we're going to find out that these loans that they made are going to have to be written off because the collateral that they thought was blue chip that was backing up those loans is not so blue chip anymore. So I think we've got not just a huge commercial real estate problem, but it's going to be a big banking problem as basically people stop pretending. You know, right now they're trying to restructure loans. It's called pretend and extend. You reduce the rate on the loan, but add term to it. But that only works for so long. If this keeps going, if the market keeps looking like this, I think we're going to have a real problem and that will be a problem in the banking system. Now, San Francisco is the worst of the worst, but they said that New York is similar and

• 1:13:27David Sacks?

  all these other big cities with empty office towers are directionally the same.

• 1:13:30Jason Calacanis?

  I'm in New York right now for the Side Connections conference and it is packed. The city is packed. Getting anywhere, there's gridlock. You can't walk down the street. You got to walk around people, every restaurant. It is dynamic. And then I talked to people about offices and they said, people are staying in their houses in their tiny little New York apartments instead of going three train stops to their office. They go to the office one or two days a week unless you're like JP Morgan or some other places that's, they dropped the boom.

• 1:14:00Jason Calacanis?

  But there's a lot of people still working from home. The finance people have all gone back. Media people are starting to go back. So there are three to five days here and the city is booming. Contrast that I spent the last two weeks in San Francisco, walking from Soma to the Embarcadero back, dead. Nobody in the city. It like literally a ghost town. It's a real shame. It's a real, real shame. And I wonder if these, this is the question I have for you, Sacks. Can they cut a deal? Can they go to like month to month rent, sub lets, you know, Lucy Goosey, just give people any dollar amount to convince them to come back? Is there any dollar amount? Cause I'm looking for a space for the incubator in San Mateo. I've been getting a ton of inbound, but the prices are still really high.

• 1:14:45Jason Calacanis?

  And I'm like, how do I cut a deal here? Because shouldn't people be lowering the prices dramatically? Or are they all just pretending? Or will I get a lower?

• 1:14:55David Sacks?

  Rents are definitely coming down big time, especially for space that's sort of commodity and not that desirable. But what's happening is, according to the people I talked to, is that the demand, the people who actually are looking for new space, they only want to be in the best areas and they want to be in the newest buildings that have the best amenities. And so that sort of commodity office tower where there's barely anybody ever there, like no one wants that. So I think people would rather pay a higher rent. I mean, the rent will still be much lower, probably be half the price of what it used to be, but they'd rather pay a little bit more for that than get like a zombie office tower.

• 1:15:29Jason Calacanis?

  We can't talk about all this without talking about two cases. Tragically, a shoplifter, a criminal who was stealing from a drugstore in San Francisco, got shot. And the video was released, I'm sure you've seen it, Sacks. And then here in New York, everybody's talking about this one instance of a marine.

• 1:15:50Jason Calacanis?

  Trying to subdue a violent homeless person with two other people. And it's on everybody's minds here and Brooke Jenkins is not prosecuting in San Francisco. The shooter, they look like, you know, a clean shoot, as they would say in the police business. An appropriate, and it's tragic to say this, but the person did charge the security guard. The security guard did fear for their life and shot him. So Brooke Jenkins is not going to pursue anything. But in New York City, they're pursuing manslaughter for the person who did seem a bit excessive from the video. It's hard to tell what the reality is in these situations. Any thoughts on it, David? These two cases in two cities, tell the two cities.

• 1:16:31David Sacks?

  Yeah, look, I mean, the only time you can get a source DA excited about prosecuting someone is when they act in self-defense or defense of others. I mean, this Marine, I guess Daniel Penny is his name. He was acting in defense of others. The person who he stopped was someone with an extensive criminal record, who had just recently engaged in an attempted kidnapping, who had punched elderly people.

• 1:16:57Jason Calacanis?

  Pretty gnarly track record.

• 1:16:58David Sacks?

  Dozens of arrests. In fact, people on Reddit were talking about how dangerous this person was. Apparently, a dozen years ago or so, he was seen as more of like a quirky, like Michael Jackson impersonator.

• 1:17:13Jason Calacanis?

  Street performer.

• 1:17:14David Sacks?

  Street performer, but something happened. This is according to a Reddit post that I saw where something happened and there was some sort of psychological break. And then since then, he's had dozens and dozens of crimes. And they just keep letting him loose through this revolving door of a justice system we have. And now, look, no one likes to see him basically dying. And yeah, it's too bad. It's horrible that that happened.

• 1:17:39Jason Calacanis?

  Tragic.

• 1:17:39David Sacks?

  I don't know, though, that if you're trying to stop someone, I don't know how easy it is to precisely control whether you use too much force or not. So I think Daniel Penny has a strong case that he was acting in self-defense and defense of others.

• 1:17:55Jason Calacanis?

  And there were two other people, by the way, who were holding this person down.

• 1:17:58David Sacks?

  There were three of them restraining him.

• 1:17:59Jason Calacanis?

  And what universally New Yorkers said to me of all different. Backgrounds was this is not a race issue. The other, I think one or two of the other people were people of color. It was not a race issue and they're trying to make it into a race issue in both these cases. And it's, this is literally what happens. It just, having been through this in New York in the seventies and eighties, when you do not-

• 1:18:19Chamath Palihapitiya?

  Sorry, who's "they"? Who's "they" when you say trying to make it a race issue?

• 1:18:22Jason Calacanis?

  There are a bunch of protests on the street, both in San Francisco and New York. People protesting these as, you know, justice issues. The fact is, if you do not, if you allow lawlessness for too long a period of time, you get a Bernie Getz situation. And Bernie Getz, people can look it up in the eighties. I was a kid when it happened, but they tried to mug somebody. He had a gun, he shot him. And like, this is what happens if you allow lawlessness for extended periods of time. It's just, you're basically gambling-

• 1:18:52Chamath Palihapitiya?

  And what happened to Bernie Getz?

• 1:18:54Jason Calacanis?

  He got-

• 1:18:54David Sacks?

  Not guilty.

• 1:18:55Jason Calacanis?

  The case, he got not guilty, but I think he had an illegal gun, so he was guilty of that. The Bernie Getz thing was really crazy because at the time, the climate in New York in this 1984 shooting,

• 1:19:09Jason Calacanis?

  there was a portion of people who, I don't want to say they made him a hero, but they made it a, "See, this is what happens if you allow us to be assaulted forever. We're gonna fight back at some point." That was the vibe in New York when I was a child. I was 14, 15 years old when this happened. He was charged with attempted murder assault-

• 1:19:27Chamath Palihapitiya?

  Jason, what was the name of that vigilante group that used to walk the streets? The Something Angels?

• 1:19:32Jason Calacanis?

  That was the Guardian Angels.

• 1:19:34Chamath Palihapitiya?

  Guardian Angels.

• 1:19:35Jason Calacanis?

  So, it was so bad in the eighties. And I actually almost signed up for the Guardian Angels. I went to their headquarters because I was practicing martial arts and I thought I would check it out. And they had their office in Hell's Kitchen. I didn't wind up joining, but what they would do is they would just ride the subway. They would wear a certain type of hat and wear a Guardian Angels shirt. And all they did was just ride the subways. A red beret, and they would just ride the subways. And you felt safe-

• 1:19:59Chamath Palihapitiya?

  What kind of martial arts were you taking?

• 1:20:00Jason Calacanis?

  Taekwondo. I was in Taekwondo, yeah. This is before mixed martial arts, but they just rode the subways. And honestly, I've been on the subways with them many times. You felt safe. And it wasn't vigilantes. They were guardian angels, they used that term. And many times, they would do exactly what this Marine did, which is try to subdue somebody who was committing crime. I was, I had two distinct instances where people tried to mug me, you know, riding the subways in New York in the eighties. Two distinct times. And one was a group of people and one was one person. Like, it was pretty scary. Both times I navigated it, but it was, yeah, not pleasant in the eighties in New York.

• 1:20:38David Sacks?

  Can I say one more thing about this Daniel Penny, Jordan Neely case? So, look, at the end of the day, this is going to be litigated. I don't know all the details. They're going to have to litigate whether Daniel Penny's use of force was excessive or not. But, but here's the thing is that the media has been falsely representing Jordan Neely by only posting 10-year-old photos of him and leaving out crucial information. This was a press report. So, again, this is why I mentioned the whole Michael Jackson impersonator thing is that the media keeps portraying Neely as this innocent, harmless guy who is this delightful Michael Jackson impersonator. In truth, he hasn't done that in more than a decade because, again, he had some sort of mental break. And since then, he's been arrested over 40 times, including for attempting to kidnap a seven-year-old child.

• 1:21:23David Sacks?

  And so, the media is not portraying this case, I think, in an accurate way. And I think as a result of that, it leads to pressure on the DA to prosecute someone who has, I think, a strong self-defense claim. Or, you know, maybe the DA just wants to do this anyway, and it gives the DA cover to do this.

• 1:21:43Jason Calacanis?

  What is Soros is, I mean, I know that we had this back and forth with this. But why is CNN being inaccurate, do you think, sucks?

• 1:21:49David Sacks?

  They're basically cooperating with Alvin Bragg's interpretation of the case. They're trying to make the case against Penny look as damning as possible.

• 1:21:57Jason Calacanis?

  Yeah, why don't they just take it straight down the middle? It's a tragedy. We have a screwed up situation here. We got a mental health crisis, and it's a tragedy for everybody involved. On the Bernie Getz stuff, he served eight of a 12-month sentence for the firearm charge, and he had a massive $43 million civil judgment against him in 1996, decade later. It's just...

• 1:22:18David Sacks?

  This is a little different than the Getz thing because pulling out a gun and shooting somebody is...

• 1:22:23Jason Calacanis?

  Well, yeah, no, that's deadly intent.

• 1:22:24David Sacks?

  Yeah, that's a huge escalation here. Whereas Penny, he's a trained Marine, right?

• 1:22:29Jason Calacanis?

  He's trying to immobilize him.

• 1:22:30David Sacks?

  He has to believe that he's just trying to subdue Neely. And so, he's not using a chokehold to kill him. That's an unfortunate consequence of what happened. But he was trying to restrain the guy, as far as we know, right? As far as we know.

• 1:22:45Jason Calacanis?

  Yeah, I mean, tragedies all around. We gotta have law and order. I tweeted, like, I don't know why we still have the post office. Maybe we can make that, like, once a week and redo all of that space and allow every American who's suffering from mental illness to check in to what used to be the post office. You know, maybe like once a week and obviously you can give those people very gentle endings, but I don't think we need postal service more than once or twice a week. And then let, you know, let's reallocate some money towards mental health in this country where anybody who's sick, who feels like they're violent or feels like they're suicidal can just go into a publicly provided facility and say, I'm a sick person, please help me. This would solve a lot of problems in society. We've got a mental health crisis.

• 1:23:27Jason Calacanis?

  We should provide mental health services to all Americans and it's obviously easy thing for us to afford to do.

• 1:23:32David Sacks?

  And if we had done that, then this never would have happened.

• 1:23:34Jason Calacanis?

  Exactly. I mean, literally you have Saks who wants to balance the budget saying, hey, this is something worth spending on. We can all agree on this.

• 1:23:41David Sacks?

  Compared to the impact on society, I don't think it'd be a huge expense.

• 1:23:45Jason Calacanis?

  We would save money. We'd save money because a city like San Francisco could become quite livable or New York if, and then you've got forbid these terrible school shootings, you know, if you avoid even one of them, it's 30 people's lives or 10 people's lives. So it's

• 1:23:58David Sacks?

  But Jacob, we don't even convert post offices. What we need to do is stand up scaled shelters and it doesn't need to be done on the most expensive land in a given city.

• 1:24:06Jason Calacanis?

  Do it outside of cities. Why does

• 1:24:07David Sacks?

  Yes.

• 1:24:08Jason Calacanis?

  There is no expectation in Europe for like Paris or London to be affordable or Hong Kong to be affordable. There are affordable places 30 minutes outside of those places where you could put these facilities. I just want to ask one question to Saks because I don't know, and I know Saks is a little bit deeper into this than I am. What is George Soros's motivation for putting in these lawless insane DAs? Like I understand that he was able to buy them. They're low cost. There's not a lot of money in them. Okay, I understand that. That's table stakes. But what is his actual motivation for causing chaos in cities?

• 1:24:42David Sacks?

  Listen, we can't know exactly what his motivation is, but what he did is he went into cities where he doesn't live and flooded the zone with money to get his preferred candidate elected as DA. Now, the reason he did that was to change the law and the way that he changed the law was not through legislatures, the way you're supposed to operate, but rather by abusing prosecutorial discretion. So in other words, once he gets his Soros DA elected, they can change the law by deciding what to prosecute and what not to prosecute.

• 1:25:10Jason Calacanis?

  Right.

• 1:25:11David Sacks?

  And that's why there is so much Lawlessness in these cities.

• 1:25:12Jason Calacanis?

  But that there's a better path, you're saying.

• 1:25:14David Sacks?

  Yeah, but look, this is not the only way that Soros has, I'd say, imposed his values on cities that he doesn't even live in.

• 1:25:24Jason Calacanis?

  Where does he live?

• 1:25:25David Sacks?

  I think he's a New York guy, but I'm not sure. But but he's gone far beyond that, obviously, in these elections. But also, he's done this across the world. Soros has this thing called the Open Society Foundation, which sounds like it's spreading democracy and liberal values, but in fact, is fermenting regime change all over the world. And he's been sponsoring and funding color revolutions all over the world. Now, if you like some of the values he's spreading, then maybe you think that's a good thing. But I can tell you that the way this is perceived by all these countries all over the world is it creates tremendous dissension and conflict. And then they look at America and they basically say, you know, this American billionaire is coming into our country and he's funding regime change.

• 1:26:10David Sacks?

  And it makes America look bad. Now, he's doing this, I think, with the cooperation of our State Department in a lot of cases. And maybe the CIA, I don't know. But this is why America frankly is hated all over the world, is we go running around meddling in the internal affairs of all these countries.

• 1:26:27Jason Calacanis?

  Too, is this guy all there? Like, that was the other thing I heard is that he's not all there and the people around him are doing these kind of things in his organizations.

• 1:26:33David Sacks?

  I heard something similar is that it's the idiot's son, Alexander, who's really now pulling the strings on the fortune.

• 1:26:39Jason Calacanis?

  Would you would you allow Soros to speak at all in summit? Would you interview?

• 1:26:41David Sacks?

  Yeah, sure.

• 1:26:42Jason Calacanis?

  Yeah, let's have Soros or his son and they could explain themselves if they're so proud of his work.

• 1:26:46David Sacks?

  Apparently, there is an article that Alexander Soros has visited the White House like two dozen times during the Biden presidency. This is an extremely powerful and connected person.

• 1:26:55Jason Calacanis?

  I mean, I'm sure he listens to pod. Okay, we'll see you all next time. This is episode 129 of All In. We'll see you in episode 130. Bye bye. Love you. Bye bye.

• 1:27:23Speaker 04

  What your winners want?

• 1:27:26Speaker 04

  Besties are back! That is my, uh, dog taking a piss in your driveway.

• 1:27:37Chamath Palihapitiya?

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

• 1:27:45Speaker 04

  What your... B... What your... What your feet? B... What? We need to get merged! Besties are back!