E53: Wealth tax, dealing with inflation as a capital allocator, big tech earnings, Facebook's rebrand, paternity leave & more

0:00 Bestie intro, child update, Joe Lonsdale's take on paternity leave 20:44 Proposed "Wealth Tax" 35:13 Inflation discussion: corporate and government reactions 52:30 Dealing with inflation as a capital allocator 58:49 Big Tech's outrageous quarterly earnings, why Google is the best business ever, Facebook's "Meta" rebrand 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://twitter.com/JTLonsdale/status/1453399478254379008 https://www.npr.org/sections/money/2019/02/26/698057356/if-a-wealth-tax-is-such-a-good-idea-why-did-europe-kill-theirs https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield https://www.npr.org/2021/10/28/1049980529/starbucks-and-costco-raising-wages-in-the-nationwide-competition-for-workers https://fred.stlouisfed.org/series/GFDEGDQ188S https://markets.businessinsider.com/news/currencies/crypto-investor-turned-8000-into-5-billion-buying-shiba-inu-2021-10 https://www.bloomberg.com/news/articles/2021-10-29/tesla-s-tsla-hidden-billionaire-how-one-retail-investor-made-7-billion https://finance.yahoo.com/quote/TOST/ https://www.wsj.com/articles/microsoft-overtakes-apple-as-most-valuable-company-11635516976 https://abc.xyz/investor/static/pdf/2021Q3_alphabet_earnings_release.pdf?cache=f1ba3f6 https://twitter.com/Jason/status/1450108244915937284 https://www.theverge.com/22743744/facebook-teen-usage-decline-frances-haugen-leaks https://vm.tiktok.com/TTPdYPqdJ6/

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

• 0:00Jason Calacanis?

  Oh baby. No skin on skin. You guys gotta keep the shirt on.

• 0:03Chamath Palihapitiya?

  Listen to me. Only the best for my daughter. This is 100% Laura Piana Vicuna.

• 0:10Jason Calacanis?

  She's gonna puke on it any minute.

• 0:12Chamath Palihapitiya?

  There is not a-

• 0:12Jason Calacanis?

  You're using Laura Piana to wipe her when she mumbles.

• 0:16Chamath Palihapitiya?

  No, this is the sweater that she's got her face on, but this is the softest material, human, you know, I mean, natural material on earth.

• 0:23Jason Calacanis?

  Really?

• 0:23Chamath Palihapitiya?

  This is not subject to any supply chain constraints.

• 0:26Jason Calacanis?

  Aww.

• 0:28Chamath Palihapitiya?

  In fact, when you buy one from Laura Piana, they'll fly one right to you.

• 0:50Chamath Palihapitiya?

  Guys, isn't it amazing how people in power cannot take any time off and still remain in power and engaged when you have a baby?

• 1:00Jason Calacanis?

  J Cal, what's the reference? Okay, our friend Joe Lonsdale, venture capitalist living in Austin, had a tweet that went viral, but maybe not for the best reasons. He said, in response to a Dan Primrack tweet, Dan works at Axios, who was talking about Joe Rogan criticizing the amount of time Buttigieg was taking on paternity leave. And Joe Lonsdale responded, "Wow, great for fathers to spend time with their kids and support moms, but any man in an important position who takes six months of leave for a newborn is a loser. In the old days, men had babies and worked harder to provide for their future." That's the correct masculine response.

• 1:42Jason Calacanis?

  Well, it was an opinion from 1957. That's either his or he found it in the Wayback Machine. But Joe's old school. Joe is a unique individual. And he just happened to, I think, in this whole like not get canceled debate or don't let yourself get canceled debate, the right is now saying like, "I'm just gonna tell you how I actually feel." And so Joe told us actually how he felt.

• 2:07Chamath Palihapitiya?

  I don't think he said anything offensive. I think you can have a different opinion than what he said. But I don't think he said it shouldn't exist. He said, if you're in a position of power and you check out for six months, it puts everything that you're doing under a lot of pressure. That's, I think, what he said, and he called those very specific people losers. The context is Joe Rogan called out Pete Buttigieg. Because Pete Buttigieg had two kids via surrogate. And I guess it's taking six months, or I don't even know how much time he's taking off.

• 2:40Jason Calacanis?

  He's at three months, but nobody knows if he's like working half time, full time.

• 2:44Chamath Palihapitiya?

  But Rogan had an issue with it. And then Dan Primack basically said, what Rogan doesn't know is at his own company, i.e. Spotify, there's a six-month policy.

• 2:54Jason Calacanis?

  Which, by the way, Joe Rogan does not work for Spotify. They license his show, so there is no way for Joe Rogan to know the internal policies. He is not an employee.

• 3:03Chamath Palihapitiya?

  I mean, Jason, if you want to hang your hat on that little fig leaf, okay.

• 3:08Jason Calacanis?

  No, I'm just saying, I'm not defending Joe, but I'm also saying, like, how would he know? It's not like he went to HR and was like, hey, what's our paternity? He doesn't work there.

• 3:17Chamath Palihapitiya?

  Fine.

• 3:17David Sacks?

  Well, six months is a long time, especially, I mean, that is a long time to take off.

• 3:23Jason Calacanis?

  The word loser is a very strong word. Do you think men who take paternity are losers?

• 3:28David Sacks?

  No, no. I mean, it's their choice.

• 3:30Jason Calacanis?

  Do you think men who take six months of paternity are losers?

• 3:34David Sacks?

  I wouldn't necessarily call him a loser. I do think that is a long time for somebody who, you know, prioritizes work. I mean.

• 3:42David Friedberg?

  If an entrepreneur took six months of paternity, would that influence whether or not you invest in his business?

• 3:49David Sacks?

  Well, look, if you are the principal of a business and you just disappear for six months, that's not going to work. I mean, let's be realistic.

• 3:56Chamath Palihapitiya?

  Unless it does, in which case, then you have other problems.

• 3:59David Sacks?

  Well, or look, if you're at like the stage that Google is at or whatever, the founders can disappear and move to, you know, islands and private islands, and it doesn't matter.

• 4:08Jason Calacanis?

  Exactly what they did.

• 4:08David Sacks?

  But, but look, we all know, I mean, that when you're a startup, you face existential decisions daily, weekly, or monthly. You can't just disappear for six months. It's not going to work.

• 4:18Jason Calacanis?

  You might only have six months of runway. So if you did take six months of paternity, there would be no company when you came back, in all likelihood.

• 4:23Chamath Palihapitiya?

  Let me speak for myself. I couldn't ever take six months. I'll, I'll probably take three weeks to a month. And honestly, I agree with David. I really didn't do much of anything. Nat had to do frankly, all of this by herself. And so I'm there to just be moral support and help where I can. You know, baby needs a diaper change. I do that. I'll hand feed in a bottle because she's tired of pumping and, you know, breastfeeding. Like, but I am so peripherally at the edges trying to help and be relevant and try to give her a break here or there. That's my role. And at some point, when the kid gets on a schedule, um, there's even less stuff necessarily

• 5:05Chamath Palihapitiya?

  for me to do, other than again, just be moral and emotional support. Then of course there's bonding and stuff, but you know, to be honest with you, like I have found as a parent, the, the connection that I have with my children has gotten meaningfully better as they've gotten older. And maybe that's just a limitation that I have and my need to communicate and how I want to connect with my kids and how I feel like I feed back, back that gives me energy to be a parent. It is much easier for me to find that equation with my 12 year old than it is with my, you know, two day old. So that's just me, you know, I'm going to be out for three weeks to a month and.

• 5:44Jason Calacanis?

  Well, the other thing we're leaving out here is the question of resources. So Joe Lonsdale, uh, according to his podcast is a billionaire in his podcast title. And so if you're a billionaire and you have unlimited resources at home and 24 hour night nurses, which, you know, we all know what those cost. Uh, you're talking about a thousand or $2,000 a day, uh, to have 24 hour coverage, but that's nothing to a billionaire. So if you, I don't make it about class, but if you were two working parents and you didn't have the money to hire somebody, this is actually practically the only thing you can do. Somebody has to be with the kid and can one spouse be at home, you know, or 24 hours alone with the kid all the time?

• 6:25Chamath Palihapitiya?

  As you guys know, I'm from Canada and Canada, we have a one year maternity and paternity leave policy. It can kind of go both ways. The, the basically the family gets it and you can allocate it as and how you need it.

• 6:38Jason Calacanis?

  Who pays for their salary?

• 6:40Chamath Palihapitiya?

  The government basically guarantees your job. You go on effectively unemployment insurance after some period of time where you go from 100% of your salary to about, I think it's 50%. Somebody will correct me if I get these details wrong. And then you go through the rest of the year. Now, in both cases, my sister, you know, when she had both kids, you know, on the way in, she was like, I think I want to take the full year. And by the six month mark, she was losing her mind and, you know, she's a lawyer at a really good research hospital and, you know, she does work that's really valuable to her and that she finds really stimulating. And she just needed more adult connection after six months. It was very hard for her to kind of be there.

• 7:21David Sacks?

  Yeah, I just think six months for the second parent is, that seems like a long time.

• 7:26Jason Calacanis?

  I don't think I could take six months off. But I also think if you have resources, there's pockets of time, even when I did stay home for, I don't know, the first couple of weeks after the kids were born. You know, they're asleep for three hours and then you clean the diapers, feed them, they play for an hour or two, and then they go back on a nap. You know, it's like, it's constantly the stop and start. I mean, that's the thing that's hardest about is the lack of sleep, I think.

• 7:50Chamath Palihapitiya?

  Oh, my God. It feels like, I mean, it's funny, but like, I forgot what it's like, but, you know, you reminded quickly. It feels like you're drunk.

• 7:59Jason Calacanis?

  Yes.

• 7:59Chamath Palihapitiya?

  Two hours, you wake up. You get a 10 minute cat nap, you wake up. And this is where, again, I go to, and I'm such a bit player in this play right now, you know, at the edges where it's like not sleeping, I can take care of Tali, but I don't know how women do it. It's incredible.

• 8:16Jason Calacanis?

  And for those of you listening, Chamath has got his newborn on his chest and swallowed quite nicely there.

• 8:24Chamath Palihapitiya?

  This is why you should subscribe on YouTube and you can see.

• 8:27Jason Calacanis?

  Yes, he's using his new daughter to get the YouTube subscriptions up. This is good, they should blow us past 100,000 subscribers. How do you feel?

• 8:34Chamath Palihapitiya?

  It's so special. I feel so lucky.

• 8:38Chamath Palihapitiya?

  Um, I feel so, so lucky.

• 8:41David Sacks?

  This is gonna be the most popular cameo on the pod since Friedberg's dog.

• 8:45Chamath Palihapitiya?

  Yeah, I mean, she, this chick is so deliciously cute. She's so, she's so delicious. And I forgot how beautiful the sounds that girls makes versus boys, having three boys and two girls now. I remember the boys, they make kind of interesting noises, but not really. But my gosh, like little baby girl noises. And you guys, Sax has two girls, you have three, Friedberg got girls. It's, girls are incredible.

• 9:10Jason Calacanis?

  We're all basically girl dads like Kobe.

• 9:12Chamath Palihapitiya?

  Oh, so what a blessing. What a blessing.

• 9:16Jason Calacanis?

  Any news on your front?

• 9:17David Friedberg?

  Well, we had a baby the day after Chamath had a baby.

• 9:20Jason Calacanis?

  Oh, right. I did see the picture. Congratulations.

• 9:23David Friedberg?

  Thank you.

• 9:24David Sacks?

  Friedberg, where's your swaddled infant? You're letting, you're letting Chamath win sweeps week here. What's going on?

• 9:30Chamath Palihapitiya?

  His vicuña is on the way.

• 9:32Jason Calacanis?

  Are you in the Joe Lonsdale? You, you did one day off and then went back to work?

• 9:37David Friedberg?

  She's in the, the place where you drop the kids off to get raised and then you pick them up in a year.

• 9:42Jason Calacanis?

  Okay. You're like, oh, you mean like Vulcans? You're like Vulcans where you drop them into a learning pod and come back a year later?

• 9:48David Friedberg?

  I mean, they, they sleep most of the day. So she's asleep right now. Actually, Allison just sent me a picture. She's sitting on the rocking chair where they're outside right now. Pretty amazing.

• 9:56Chamath Palihapitiya?

  I give Lonsdale a lot of courage for saying what he thought. I really don't think that, uh, what he said was altogether that like vilifiable, if that's the word you want to use. I think that there's a lot of reasonable points of view. He could have maybe used better language. But I think where he was coming from, I think a lot of us probably wouldn't do it ourselves. We may never judge anybody else. I would never judge anybody who wants to take six months. I know that I could not. I would just, I think either I'm too selfish or whatever. But, um, I'm not sure there's just that much to do as the secondary. And to David's point, if I was asked to be the primary, I think I could probably step in and do 10% of what Nat would do or.

• 10:34Jason Calacanis?

  Here, here's Joe Lonsdale's super blind spot. He made this very gender specific with men and women in certain roles. And he basically is saying, you know, a man who takes six months off is a loser. So he is not just giving his opinion, he's attacking people who do take the time off. And then he says, listen, in the old days, men had babies and worked harder to provide for the future. That's the correct masculine response. So I think what triggered people about his response, and perhaps rightfully so, is that this is just a view of-

• 11:07Chamath Palihapitiya?

  I know, but Jason, can I say something?

• 11:08Jason Calacanis?

  It's like degrading men who take time to take care of their kids.

• 11:11Chamath Palihapitiya?

  But look, we've talked about this a lot. There is an opportunity for folks like us to take a step back and slow down in how we interpret a tweet that's written at 8:00 AM in the morning, super quickly.

• 11:24Jason Calacanis?

  Sure, I'm not advocating he be canceled.

• 11:25Chamath Palihapitiya?

  And not just him, but everybody else, but like, there is an opportunity to teach empathy here where, I'm not saying you have to agree with him, but you can also choose to see what he's trying to say through the exact words that he used, decide that you agree or disagree, and then just move on.

• 11:43Jason Calacanis?

  Of course.

• 11:43Chamath Palihapitiya?

  You know what I mean? And I think that the reason why folks may want to do that in this case, but in most other cases, is eventually it will be you that makes a mistake.

• 11:54Jason Calacanis?

  Sure.

• 11:55Chamath Palihapitiya?

  And you want to be let off the hook by other people that are empathetic enough to say, "I really disagree with what you're saying, but you don't deserve to be punished beyond disagreement."

• 12:06David Sacks?

  I love what Jarmath just said. You know, the mistake that we make might even be on this pod today.

• 12:13David Sacks?

  I might have already made it.

• 12:14Jason Calacanis?

  You may have already made it.

• 12:15David Sacks?

  I agree that we should all just be a little bit less judgmental. And there is an element, there is a judgmental element in Joe's tweet that that's probably the part I don't agree with. Is, look, if someone wants to do that, fine, take the time, doesn't necessarily make them a loser, but it's not a choice that I would realistically make.

• 12:36Jason Calacanis?

  Yeah, it's totally unrealistic.

• 12:37Chamath Palihapitiya?

  It's not even startups. Like, you know, I'm getting put to these multi-hundred-million-dollar decisions a day. I can't- You know, I could pause the business, but that'll have so many downstream implications. Unfortunately, I picked a job where I'm in a position where I can't check out even if I wanted to. So I try to do my best.

• 12:54David Friedberg?

  That's the point he was trying to make that wasn't that well articulated. I don't think, I don't think any of us are in a situation where we can straight up walk away from work for any meaningful time. I mean, on a daily basis.

• 13:04Chamath Palihapitiya?

  It would destroy, it would destroy my business.

• 13:05David Friedberg?

  Yeah, we get texts, we get emails, we get phone calls that we have to answer. And so it's not, it, it, it, you know, almost definitionally isn't an option to just walk away. But for those who it is, and if that's their choice, that's what it is. The, the great thing about freedom isn't that you can say whatever you want. It's that you don't have to listen to what anyone else is saying. And, you know, for people that disagree with Joe, I feel like you always have the option to not listen and you always have the option to walk away.

• 13:33Chamath Palihapitiya?

  Unfollow.

• 13:33David Friedberg?

  And, yeah, and unfollow. And the whole idea of cancel culture and, you know, punishing people for the things they say, regardless of what they say, and, and the censorship and all the shutdown of, of voices and channels for people to have a voice. I think it, um, it takes the freedom away that's inherent in the idea of, you know, your choice to not listen.

• 13:56David Sacks?

  Yeah, and, and it's almost always totally hypocritical. So this is a postscript on the whole Chappelle debate. It turns out that the leader of this, the anti-Chappelle protests, who've been trying to get him canceled at Netflix. It turns out this, this person has like a treasure trove of the most angry, hateful, vile tweets that I or anybody has ever seen.

• 14:19Chamath Palihapitiya?

  When you, when you put it in the group chat, I thought that that was a joke. The, the things that she wrote were so beyond the pale.

• 14:28David Sacks?

  Beyond, beyond.

• 14:29Chamath Palihapitiya?

  Oh, my God.

• 14:30David Sacks?

  They're like, they're like the worst tweets.

• 14:32Jason Calacanis?

  We can't play them on the show.

• 14:33Chamath Palihapitiya?

  No, we can't. I, I don't even want anybody to speak these things.

• 14:35Jason Calacanis?

  I don't want to include it in the show notes.

• 14:37David Sacks?

  They're literally the worst tweets I've ever seen.

• 14:40Chamath Palihapitiya?

  Seriously, like completely.

• 14:42David Sacks?

  The most racist, like, I've never seen such explicit racism in the 21st century, basically. Aside from these tweets and, um, and this is the person who's trying to cancel Chappelle, was out there with the megaphone and who the press was fawning over.

• 14:56Chamath Palihapitiya?

  By the way, and she said in her thing, yeah, those were from a long time ago. I've already owned up to those, so let's move on.

• 15:04Jason Calacanis?

  Wait. Hold on.

• 15:06David Sacks?

  Owned up how? Owned up how?

• 15:08Chamath Palihapitiya?

  And it's kind of like, you know, let me play the empathy card on me. But then, you know, I so meaning I expect you to see through what I'm going through. And that those expressions were in a moment in time. So see past them and see my true character. That's what she's asking. That's what she's asking the world to do, you know, about her. But then you're not willing to do it to any for anybody else. And that's where I think that double standard just doesn't work anymore. And I think this is what people are getting really fed up with.

• 15:37David Sacks?

  Yeah. And I would also say that her tweets weren't funny. They weren't attempting to be funny.

• 15:42Chamath Palihapitiya?

  They are so gross.

• 15:43Jason Calacanis?

  They were. I have a customer service problem with this beeping beep.

• 15:47Chamath Palihapitiya?

  No, they're so bad.

• 15:48David Sacks?

  I want to bash. I want to bash this, you know, beeping Asian or whatever over the head, blah, blah, blah, blah. Like a lot of racism towards Asia, you know, Asian people.

• 15:57Chamath Palihapitiya?

  No, there was homophobic tweets. There was A- Asia, Asian hate tweets. I mean, it Latina, Hispanic. I mean, it was.

• 16:03David Sacks?

  She wasn't even trying to be funny. That's the thing. It wasn't even. It wasn't even a failed attempt at humor. So you here you have Chappelle, who I think is dishing it out in an equal opportunity way, making, you know, funny, uh, observations about really he's criticizing our culture, not specific groups. And he's being deliberately misinterpreted by the people who want to cancel him. They're really to think that Chappelle's stand up routine is hateful really requires, I think, deliberate, uh, obtuseness. You have to deliberately misinterpret what he's saying. And so you have these people out there trying to do that. And meanwhile, they are guilty of the, it's a total act of projection because they are guilty of everything they accuse Chappelle of.

• 16:48Jason Calacanis?

  Well, not all of them, Miss Person in particular.

• 16:50David Sacks?

  The leader, the leader. And of course, the press doesn't dig any of this up. It all happens through the, through kind of internet sleuths.

• 16:59Jason Calacanis?

  That would be a narrative violation, David. If, if somebody is virtue signaling and they are leading a cancellation movement, it's, it's kind of a narrative violation to say, well, they, maybe they should be canceled by the same standard or, you know, quite easily. I think the thing that.

• 17:12Chamath Palihapitiya?

  I don't think she should get canceled. Let's just, there you go.

• 17:15David Sacks?

  Yeah. I don't, I don't think she should be canceled, but I.

• 17:17Chamath Palihapitiya?

  And, and this, this lady.

• 17:19Jason Calacanis?

  When she was drunk. What if she had a nervous break?

• 17:21Chamath Palihapitiya?

  I can only imagine that the difficult path that this lady has gone through. And on the off chance that she's listening. I'm totally cool with your journey. I understand you made some mistakes. We've all, I'm gonna let you off the hook. Can you please try to let the next person off the hook?

• 17:37Jason Calacanis?

  I think that would be a nice place for everybody to aim to go. And then, and just to circle back with, with Joe, when he started explaining himself in the thread, when it became a conversation with a wider group of people, the journalists went on the pure dung cancellation route. But then there was actually a productive discussion about between CEOs, et cetera. And I thought what was very interesting about it was he started talking to Gary Tan, who, you know, was like, listen, we have a four month leave practice at our venture firm. And Joe said, do you really take 100% off cold turkey? Or did you work part time and stay in touch like a responsible leader of your firm? And of course, Gary did just that, right? And then Joe says, you know what, I shouldn't have written loser and appreciate the push pack. In more intensive operational context, losing key leaders cold turkey for six months seems

• 18:20Jason Calacanis?

  unnecessary. But I respect the different takes here. And I think that really is an actual good discussion about this is, hey, well, maybe if you're an intense leader and you don't have the ability to take a couple of months off, well, maybe you should take a couple of Fridays off. And then there was a really interesting discussion. What's better for a leader to do? Spend a little more time every year, or to spend three or four or six months in the beginning when you're, as you just said, Chamath, on the periphery here and trying to be helpful on the margins? Maybe for the secondary person, if it isn't 50/50, Sax, it is actually better for you to pick up some Fridays or whatever, and take over the whole.

• 19:00David Sacks?

  I'm glad you read that clarification by Joe, because I think what he basically is saying is that, yeah, he, the initial language he used, he would, he basically clarified that. And it sounds like what he's saying is, listen, if you're on a high performance team and you're the star player, and you disappear for six months, that's going to cause your team to lose. So I think that's maybe what he was saying.

• 19:20Jason Calacanis?

  That's a perfect analogy, Sax, because if we were looking at LeBron James or Kevin Durant, and they had a baby mid-season, or Draymond had a baby mid-season, which I'm sure has happened to, you know, folks, it's not like they say, I'm not playing the next six months of games. They miss one game, maybe two, they go back on the road, and I think everybody understands, like, yeah, you can't give up one of your 10 primary years or three years left that LeBron and KD have left.

• 19:45Chamath Palihapitiya?

  I'll give you one final anecdote to end this. Chapter of our discussion today, uh, 2007 at Facebook. At one point in like one of the umpteen reorgs we were doing as we were trying to get out of the primordial ooze. I was in charge of HR and everybody at that company was young, except for a handful of people. And then there was finally a person, and I think it was our, this HR person that, that at some, through some weird convolution of events reported to me, uh, who got pregnant, who was pregnant. And we didn't have a policy because nobody had ever gotten pregnant before. And, you know, I remember saying, oh, we have to come up with a policy. And what I did was I was like, well, what would I want?

• 20:28Chamath Palihapitiya?

  Which is the easiest way for me to answer most questions.

• 20:31Jason Calacanis?

  Yeah.

• 20:32Chamath Palihapitiya?

  And I came up with four months for either the father or the mother, irrespective of the context. And that's how we started the original policy. Four years later, though, when I had my first kid, um, I took like three weeks and it came back because the grind was too hard.

• 20:43Jason Calacanis?

  Yeah. All right. I think, I think where we have to go is it's been a crazy week of, uh, the reconciliation bill, the infrastructure bill, and how to pay for this incredible spending.

• 20:54Chamath Palihapitiya?

  It's been a meta week.

• 20:55Jason Calacanis?

  It's been, it's been a meta week. I mean, and this builds on top of our discussions about inflation, uh, as well as the supply chain issues that builds on the conversation we had about COVID and the new president. So we're trying to get the wealth, uh, we're trying to get the reconciliation bill done. And part of that is, hey, how is this going to get paid for? And in the course of one week, we've seen, uh, the tax proposals flip, I think, multiple times to ones that have never been tested and it, and may not even be legal in the United States. Of course, I'm referring to a billionaire tax, which was proposed, uh, which would be a penalty or a tax on assets that are liquid, but that have not yet been sold.

• 21:40Jason Calacanis?

  And it would look back three years, essentially going after Bezos or Elon, Larry, Sergey, basically going after the top 10 billionaires in the world. And then maybe it was going to be the top 700, then it became a millionaire tax, uh, all of this to try to pay for these bills. While so much money has been poured into the system that, you know, NFTs and stocks are going through the roof. Where do we want to begin, gentlemen? Should we, does anybody have thoughts on this brief billionaire tax that was floated and what that says? About where we are as a country in terms of how we think about the success of our greatest entrepreneurs? Do we want to talk about what's fair or the process?

• 22:20Chamath Palihapitiya?

  Well, I thought the process was insane. And what was crazy was that, you know, Ron Wyden had been working on this proposal theoretically for the past two years. And at no point did he bother to float the trial balloon with his colleagues in the Senate to even see whether these people actually supported it. Beyond some folks on the progressive left who are ideologically fixated on, you know, this confiscatory way of running the country. The funniest thing about that bill to me, and I let the powers that be know this, is, hey, guys. I've always been on the record, I'm happy to pay whatever tax you want. I feel super blessed to be in America. Whatever, you want me to pay 30%, 80%, I don't care.

• 23:03Chamath Palihapitiya?

  But I had a real issue with the way that bill was written because I'm like, um, the Democrats are writing a bill that will disproportionately tax Democratic, uh, successful billionaires. And it'll even tax the Kochs, who is literally the boogeyman to the progressive left who wants to write this bill. And I thought, how could you even write this bill this way? It is so stupid.

• 23:28Jason Calacanis?

  You're saying because those people own private assets and this goes after public?

• 23:32Chamath Palihapitiya?

  Guys like me would have been paying billions of dollars and the Kochs would not have paid zero.

• 23:38Jason Calacanis?

  Because their entities are private and yours are public, just so the audience understands.

• 23:42Chamath Palihapitiya?

  Yes. How insane is that? And yet we're the ones supporting this.

• 23:46Jason Calacanis?

  That is a great second order observation. These people clearly didn't think through.

• 23:51Chamath Palihapitiya?

  That was my only issue with the thing. It's like, if you want to try to ram and jam this thing through, go ahead and try. I'm not going to be the one that, that, you know, files a lawsuit the day after it's passed and takes it to the Supreme Court, which will get heard and, you know, this conservative Supreme Court would not have allowed this, this tax to stand. You can't target 700 people. Uh, but by the way, the reason you can't target 700 because there's a slippery slope from 700 to 7 million to 70 million. And what it does is it allows tax and spend politicians, a blank ledger, to go absolutely crazy and just fund every single harebrained pork barrel scheme that they can come up with.

• 24:32Chamath Palihapitiya?

  And that's really what we stopped was an important slippery slope. And then in its place, I think, is a tax that is fair. A simple surtax on adjusted gross income. If you're above X, you pay 5 million, and if you're above Y, you pay another 3, so 8%.

• 24:48Jason Calacanis?

  5% or 2%.

• 24:50Chamath Palihapitiya?

  On every kind of income. And I think that's a really reasonable way to get folks to pay more. That seems like a good start. But the first version of the bill was so stupid. And the thing that really anchored me, though, was it targeted Democratic, successful people, and left alone Republican, successful people, written by the Democrats.

• 25:07Jason Calacanis?

  Freebird, what are your thoughts on the confiscatory nature of this? I've never heard the word used that way, confiscatory. Where we're going back and saying, listen, you want so much, we're just going to take 20 or 30% of it.

• 25:20David Friedberg?

  We all pay property taxes. So there is an experience we've all had with paying a percentage of assets that we own, people of all income brackets, every year, to your local government to fund local services that everyone participates in. So, you know, I don't think it's unfounded. Now, if you look at history as a guide, you know, France introduced a wealth tax to people making over, I think it was 1.3 million euro per year, and it was shut down and came back, basically, 1999, 2000. And between the year 2000 and the year 2016, 25% of millionaire households emigrated

• 26:04David Friedberg?

  out of France during this period. And the amount of tax revenue that was lost during that period of time was greater than the new revenue generated from the wealth tax that was introduced. And so France ultimately scrapped the wealth tax. And there have been a number of other reasonably good examples of European countries putting in place these wealth taxes and then kind of removing them later. So, you know, on the one hand, I think that we've all seen this experience, and Switzerland does this. I think you get taxed on your total assets in Switzerland, and you have to go negotiate every year with respect to how much you pay. It's a very weird process. So on the one hand, there is this kind of experience and precedent for paying some percentage of assets.

• 26:47David Friedberg?

  Sometimes it's a targeted asset and sometimes it's not. But the longer range consequences that we've seen is like, you know, immigration and people realize there's always a better choice. The question we have in the United States, if we introduce a wealth tax like this, where will successful Americans immigrate to? You can see how people could leave France and go to Belgium, or go to the UK, or go to Switzerland, or go somewhere else where they might be better off. Where are Americans gonna move to? Canada. You're successful. Canada? I mean, are you gonna move to Vancouver? I mean, you're from Canada, but Zach, would you move? You know, where would you move to? You know, it's almost like there ends up being this kind of, you know, I think, really interesting experiment that'll be run here. Now, remember, this wealth tax was introduced by Warren and others last year, so this wasn't

• 27:32David Friedberg?

  some new concept that was fly-by-night. This has been one of those things that's been on the shelf for a while. What happened is they pulled it down from the shelf and said, "Let's try this now."

• 27:40David Sacks?

  Yeah, they've never had committee hearings on it. They've never had committee markups on it. It's been tried and repealed in European countries, and like you said, they pull it down at the 11th hour. Why? Because there are carefully laid plans, which they've been concocting for three months, were thrown overboard when Sinema said she wouldn't support the rate increases. Now, I don't know why they wouldn't go to her at the beginning of the process, instead of waiting till the end of the process. But so because of that, they're scrambling around trying to find any source of revenue. So it's, "Oh, well, a billionaire tax work." No. "Well, what about a corporate AMT? How about that?" No. "What about a millionaire surcharge?" These guys are like burglars, rubbaging through the house. They hear the sirens.

• 28:22David Sacks?

  They hear the sirens coming, and they're like, "What can we take? Oh, the TVs are bolted down. Can't get that. Where's the jewelry? What can we take?" And it's just, you can't set, you can't set tax policy this way. And this whole idea that we can set tax policy based on our intuitions of fairness without having hearings, to ask the question, "What will this do to the economy? How much damage will it cause?" This is absurd.

• 28:48David Friedberg?

  I'll say, it's really important to note- The market is telling Congress something here, and the market is members of Congress informed by their constituents. The market is saying, maybe we shouldn't be spending this much because there isn't a place to fund it, and no one's raising their hand and saying this is something we can all align on. And so I think the more important fundamental question is, are we really equipped and do we really have a general economic interest? Economic interest meaning people measure things and vote with dollars to support these sorts of social programs. And it seems to me the indication is no. And this seems to me to be primarily a response of the pendulum swinging the other way post

• 29:30David Friedberg?

  the Trump era, where, you know, the Trump era was all about blowing up these ineffective, overregulated, bloated government infrastructure and programs and people and bureaucracies. And now we've kind of found ourselves through our voted representatives swinging this other way, but it turns out maybe we swung too far and the market is now voting and saying, this just isn't a playing field we should be on. And so, you know, where they end up here, I think regardless, it's going to end up needing to be some sort of reconciliation on spending to make this all work.

• 30:00Jason Calacanis?

  Let's be honest, Bernie Sanders and Elizabeth Warren were, did not win the nomination. The country specifically wanted a moderate. Biden was sold as a moderate. Go back to the way it was, moderate Dems like Clinton, like Obama, this is the classic Coca-Cola, this isn't new Pepsi nonsense. And we got hoodwinked, basically, and I think what a lot of Democrats are seeing now, especially the moderate ones, is, hey, wait a second, Biden is Warren and Bernie in chief's clothing, perhaps, and we didn't want this. We didn't want Trump, he was too hot, and we don't want this too left, crazy, let's just take everybody's money, randomly change the tax code.

• 30:42Jason Calacanis?

  I don't think American citizens want to live in a world where we change tax code at the 11th hour. That is scary to people, all people, people who have savings.

• 30:52David Sacks?

  If you care about the economy.

• 30:54Jason Calacanis?

  Well, yes, and it is the economy.

• 30:55David Sacks?

  I think these progressives, so it used to be that taxation was a necessary evil. You you you tax people because you got to pay for government and government programs. Everybody hates it, but but you do it and you try to figure out the way of achieving the revenue government needs in the least destructive way possible. But I think progressives now, they are so focused and monomaniacal about this issue of income inequality, the fact that there's some people who've gotten richer than everybody else, that I think they're willing to tax those people. I mean, they would like to siphon off money from those people. I think they would siphon it off just to light it on fire, just to level people. And so they don't really care what the impact is going to be on the economy.

• 31:33Jason Calacanis?

  Well, I mean, and their position was in fact ban the billionaires. That was their roof. But, you know, before we get to that, I just want to say, these rules, I think Americans want the rules to be simple. And I don't think people want you changing the rules at the last minute and then making them retroactive. I think all Americans want taxes to be predictable and simple, not just change them willy nilly because you change the budget. This seems so unthoughtful and crazy. Chamath, your point?

• 31:59Chamath Palihapitiya?

  I have two points to make. The first is that I don't think anybody really knows what's in these bills. And as a result of nobody really knowing what's in these bills, they're used as negotiating chips. So case in point, when Biden came out and said, you know, we have a 1.85 trillion dollar bill now and we're ready to get this done so that he could, you know, fly to Europe and, you know, fly to COP26 and kind of, you know, declare victory. Unfortunately, the progressive wing of the Democratic Party in the House said, no, I'm not ready to dance yet. And, you know, they have consistently refused to sign an infrastructure bill until they got what they needed from this other bill.

• 32:44Chamath Palihapitiya?

  And so when Pelosi called the vote, she had to pull it because they weren't going to get the votes necessary to get this bill passed. So what this says to me is that even with spending, it doesn't matter whether you're spending five, because that's a, I think it's a trillion dollar bill, right? That's a one trillion dollar bill. This is a 1.875 trillion dollar bill. Nobody cares about the quantity and nobody cares about the details. They care about some perceived moral victory. This is the only reason why we're seeing this, you know, Mexican standoff that we're seeing today. If these things were so substantively important. We would have passed the first bill, we would have negotiated a reasonable second version and passed that too. Instead, we're here going through the end of the year with

• 33:26Chamath Palihapitiya?

  nothing done. And I just want, you know, the Democratic leadership who listens to this, because we know a lot of people in Washington listen to this podcast, you guys gotta get something done. Because if you go into the midterms with nothing done, with a Democratic president, Democratic senate, and Democratic house, this is going to be a bloodbath.

• 33:47David Sacks?

  Well, this is why something will get done, but you know, I think the political realities are that at the end of the day, the Democrats will come together and pass something. But it's concerning that we're just talking about doing something because it will help you in the midterms. You know, in the immortal words of Nancy Pelosi, you have to vote for the bill in order to find out what's in it. I mean, at the end of the day, we're not even going to know what's in this thing. And, you know, we're spending another, it'll probably end up being a 1.75 trillion dollar bill. It'll be stacked on top of the spending that's already happened. One point, remember, Biden already passed 1.9 trillion of COVID relief, another 1.2 trillion of infrastructure.

• 34:26Chamath Palihapitiya?

  No, that hasn't passed yet.

• 34:27David Sacks?

  Well, it's going to, along with this now 1.75 million, sorry, 1.75 trillion of this new social spending bill, assuming.

• 34:36Chamath Palihapitiya?

  Right. So it's about five trillion dollars, five trillion of wealth redistribution.

• 34:40David Sacks?

  And progressives will have, will have set the stage for this to be perceived as some sort of failure. It's bizarre.

• 34:44Chamath Palihapitiya?

  By the way, David, if you go back, then if you take that five trillion and add it to the, all the COVID before and all of the Fed buying, we've probably had one entire turn of GDP. So call it 20 to 22 trillion dollars of money created in the last three or four years.

• 35:04David Sacks?

  Right.

• 35:05Chamath Palihapitiya?

  Now you go back, so now, so now you go back to Jason, what you started, the thing that I have struggled with the most in these last few weeks is trying to come to a conclusion on inflation. My worry is that it's here and it will be persistent. And inflation comes in two ways. Way number one is if you massively increase the supply of money. Why? Let's just say the economy had a hundred dollars. And now all of a sudden, you just print another hundred, so now there's 200 dollars. What will happen is all of the goods and services that make up that hundred will get repriced to absorb the 200. So prices go up, inflation goes up. The second way that inflation can happen is if middle and lower income people buy and spend.

• 35:50Chamath Palihapitiya?

  Because when rich people have extra money, they just buy financial assets. That's why you get financial bubbles. But practical goods and services are bought by average, everyday, normal working folks. And their wages are going up. And so I think what we've created is a really distortive inflationary cycle. That's going to really hurt the United States because as Sacks talked about. We cannot print enough money to pay for the debt when interest rates go up.

• 36:20David Sacks?

  This is, this is the number one, this is the number one thing causing me concern as well is that. You look around, it's all time highs for everything. It's all time best everything. Nasdaq and S and P, all time highs, crypto markets, all time highs. Shibu Inu worth thirty, forty billion dollar bubble. Uh, I'm seeing SaaS multiples, real estate, I'm seeing SaaS multiples at all time highs. And so you have to wonder, is this a new normal? Is this sustainable? Or is it some sort of inflated bubble? Then you look at the inflation rates, five point one percent. To Chamath' point, it might be persistent. You look at treasury, the treasury, uh, interest rates, the yield is one point six percent on the ten year T bill.

• 37:05David Sacks?

  Okay, so effectively, your real interest rate for savers is one point six percent minus the five point one percent inflation rate. You're at negative three point five percent. If you just save your money in T bills, in sort of, uh, risk free, you take the risk free return, negative three point five percent. So now you have everybody going out there trying to chase yield because. How do you earn a return on your money? You don't want it to be.

• 37:30Chamath Palihapitiya?

  You buy, you buy stocks or NFTs or houses.

• 37:33David Sacks?

  So people start going into riskier, riskier assets to basically try and make up for the loss of inflation. And so you have to.

• 37:40Chamath Palihapitiya?

  They're trying to hit the one outer.

• 37:42David Sacks?

  Yeah, so then, okay, so, so you have to ask yourself, okay, so back to this point about all time highs. Is this because everything is really this great? Or how much of this is driven by these sort of distortions?

• 37:54Chamath Palihapitiya?

  Fifty fifty.

• 37:56Jason Calacanis?

  I mean, I'm just putting a number on it. Like, obviously, the industry and economy is doing fantastic, but it seems 50/50.

• 38:02Chamath Palihapitiya?

  Here's the other thing that I wanted to make in just the last portion, which is, I think what we've realized as well at the end of this is, I actually, again, now to use this empathy card, I'm going to give the progressives my empathy card and say, "I understand what you're trying to do." And I believe in a lot of what you're trying to do is to even the starting line for everybody. Right now, a lot of what you end up proposing distorts that goal by trying to, you know, even out the outcomes and even the finish line, but I really do think they want to even the starting line. But here's the thing that we all have to realize now. All the things that the progressives want to tax and fund are actually being done by private corporations.

• 38:44Chamath Palihapitiya?

  And I think we just have to acknowledge that and make a decision about whether, as a society, that's okay or not. I'll give you two examples. Number one is the federal minimum wage. We have tried for years and we have debated raising this minimum wage. It still sits today at $7.25. Just this week, McDonald's moved their minimum wage up, Starbucks moved their minimum wage up. We're talking about, you know, entry-level, quick-service jobs that now pay $17 to $25 per hour.

• 39:13Chamath Palihapitiya?

  Right? So two and a half to three-plus times the proposed federal minimum wage.

• 39:19Jason Calacanis?

  The free market.

• 39:20Chamath Palihapitiya?

  And so, and so, and so what government didn't and wasn't able to do, the free markets have done. Second example, we tried to get free community college inside of one of these bills. It was drops. Now, depending on where you go, the nation's largest employer, Amazon, actually will just pay you to go to college. Right? So they are replacing that intention and a version of the GI Bill, but as a private organization. So I think what we also have to realize is that maybe some of these policy decisions is actually a little bit of, you know, getting tilted by the fact that private organizations are acting more nimbly

• 40:02Chamath Palihapitiya?

  to actually implement this progressive agenda, because it actually exists in America if you're willing to take the time to look.

• 40:08Jason Calacanis?

  Let me ask a question about inflation. If, who is inflation going to hurt the most? And who's going to gain the most from it? Because it does seem like consumables. Gas station, supermarket trips, etc. are going through the roof. In that case, that's going to have no impact on the top third of people because gallon of milk at $3, $6, $9 doesn't matter. But then you look at inflation on stocks, it's going to make it go up. So a rich person isn't impacted by their gas or their groceries, but somebody in the middle class or who's poor, that's going to dramatically impact them. So if we spend more, does that actually create a larger wealth gap? Sax?

• 40:50David Sacks?

  Look, inflation is devastating for the middle class. If you have savings, if you can afford to put all of your savings in financial assets the way that the super wealthy can, then your financial assets will go up. But if you have a good, sort of, middle-class income, and you don't have your, and your savings are in something more conservative, you're going to get absolutely eroded by inflation over time. It's going to kill you. And housing prices will go up. The middle-class young couple that wants to buy a house for the first time, that's going to be much harder to achieve because housing prices will inflate away. So I think, you know, there is, there are some effects that are awash.

• 41:32David Sacks?

  So for example, prices go up and then wages go up at the same time. But savings can really get hammered if you're not in financial assets.

• 41:41Chamath Palihapitiya?

  It hurts the middle class first, but it also hurts, it hurts everybody. Because again, unless you're perfectly hedged going into a rising rate environment, you will own assets that are just speculative and good question.

• 41:51Jason Calacanis?

  Let me ask Friedberg a scientific question here. Are we starting to go into a self-fulfilling prophecy around inflation, Allah, what happened in the 70s, which is, we've been talking about it so much, that anybody who is thinking about raising prices says, well, everybody else is raising prices. So even if my grilled cheese sandwich hasn't been impacted by all of this, and I didn't have to give raises to my employees, they're happy at their current salaries, I'm just going to put $2 on my grilled cheese. And we just get this cycle of everybody saying, how much can I add to the cost of something?

• 42:21David Friedberg?

  I am trying to remember, there was an earnings interview I saw yesterday. God, which was the company? Anyway, they're, um, they're a company in the industrial supply chain. And he said that they're raising rates to get ahead of the supply costs going up for them. Um, so that their margins won't get squeezed. And I think that's, uh, it's almost like that, what you're referencing is a little bit of a run on the bank. Mentality where, um, those with pricing power. Raise, raise prices and as a result, you end up kind of seeing the, the, the trickling effect because competition can't catch up. So if everyone's kind of raising rates and there's not enough competitive advantage, the one thing that's making this even harder right now is the gluts in the supply chain.

• 43:03David Friedberg?

  Which are reducing the competitive, um, uh, market dynamics that we might normally see where. One customer raises, one company raises rates and another company says, wait, our rates are going to stay the same. But because so many people are challenged by getting product, there's enough demand for their product, everyone can raise rates together. We're seeing this in the energy markets now. So, um, yeah, I mean, this is kind of part of the scary, uh, scenario that everyone's trying to manage against. Um, so I don't know what the science is and I'm not an economist, but, uh, it certainly seems to me. Like the psychology of managers and business owners and, and boards is such that they're saying, let's get ahead of the curve. Let's raise rates and as a result, you're seeing the trickling effect. Of inflation throughout the whole economy. So, um, both scary.

• 43:47Jason Calacanis?

  Sacks, what do you think psychologically is going on with raising prices?

• 43:52David Sacks?

  So, so expectations are definitely part of the inflation game. People raise prices if they expect inflation in the near future and then that feeds on itself. And that's how, if you look at countries that have had hyperinflation, that's how you get a spiral. Now, I don't think we're going to have hyperinflation here, but we're at 5.1% now. And if people think it's going to be worse next year and the Fed's not going to raise rates, it could even be higher next year. And I think people are going to start getting upset about this. You know, when they buy their Thanksgiving turkey and their Christmas ham. And those prices are way higher than they think and they're already paying gas prices that are a lot higher than they're used to. Um, I think you could see a lot of unhappiness out there.

• 44:31Jason Calacanis?

  One other thing I'm thinking about is, is the logical thing for a person to do in this hyperinflationary. You know, market is to say, you know what? The, this, I went to look at a car and I wanted to get to driving the snow. And I was like, you know what? I'm just going to hold off buying this because I'm not paying 15K over sticker. So, and I can pay 15 or 16, I was like, ah, do I want to do that? Ah, the other car is okay. I'll just put snow tires on it. So are a lot of people chamot then as part of this psychological, you know, spiraling out of control situation. Then some group of people might say, you know what? I'm going to opt out of consumerism and I'm just going to lower my burn rate and stop consuming, which is also bad for the system.

• 45:08David Sacks?

  Are you going to stop consuming food?

• 45:10Jason Calacanis?

  No, this is the thing. Inflation. Well, you might, instead of getting, you know, filet mignon, you might get chicken.

• 45:17David Sacks?

  Okay, well, there's going to be a lot of unhappy people who are eating chicken for Christmas instead of filet. I mean, serious.

• 45:22Jason Calacanis?

  I'm coming to your house, so I'm getting filet, so I'm good. I'm going to go to your house for lunch and I'm going chamot's for the surf and turf after.

• 45:29Chamath Palihapitiya?

  Guys, rich people don't create inflation. The middle class and low middle class create inflation. There's just not enough rich people to matter. They're irrelevant. So when you look at the last two or three spikes and waves of risk that we've seen globally, they've come from large multi-hundred million person cohorts of people. Right? Those could be in Asia. Those could be specifically in China. Those could be in the United States plus all around the world because of certain loose monetary conditions. That's what we have now. We have a multi-hundred million, probably approaching more than a billion person strong, liquid buying pool of people that are, again, as I said, if the, if the lowest on the pecking order is now making 17 bucks an hour,

• 46:15Chamath Palihapitiya?

  we all know this, guys. It's not as if the inflation stops at 50,000 bucks a year. Everybody's wages rise. So consistent and persistent wage inflation will allow you to spend more because that's just what people do. We also have high savings rates, so people will feel more flush with money. The point is that everybody will spend, they will spend more. You know, you can't get cars, you can't get this, you can't get that. All this pent up demand will get fed. And the downstream implication is I think that prices will rise, but it will disproportionately hurt the middle class and the lower middle class. And then these asset bubbles will probably deflate, or they'll have to get rerated.

• 46:57Chamath Palihapitiya?

  And if the Fed stops tapering and hikes rates two or three times over the next 12 or 18 months, man, this is an ugly, ugly stock market.

• 47:08Jason Calacanis?

  One of the things people have been asking me to ask all of us on the pod is, what are our strategies right now, given the turmoil we're in? So maybe we can go around the horn and what we're thinking about in terms of our strategies to deal with inflation while maybe not getting ahead of our skis and being the bag holders? Anybody have?

• 47:29Chamath Palihapitiya?

  I'm not gonna answer this question, and you know why, because I can't.

• 47:33Jason Calacanis?

  Got it, okay.

• 47:34Chamath Palihapitiya?

  Because of the public market, I don't want to even answer this question yet.

• 47:37David Sacks?

  Okay, well, can I, I'll let me further describe the problem. So this happened in the late 1970s, we had stagflation, we had sort of, every year we had increasing inflation because of the expectation game. And the thing that broke it was you had Paul Volcker come in at the Fed and he jacked up interest rates. And he actually caused a pretty severe recession in like 80, I think it was like 82, 81, 82. I think by 83, we were coming out of it, and then the economy absolutely boomed. Interest rates came way down because he broke the back of inflation. And actually, interest rates came down for, you know, as a result of Volcker and the Fed controlling inflation,

• 48:20David Sacks?

  they came down for 40, 40 years, basically. And that those, that decrease in interest rates fueled everything. It made debt a lot cheaper. It made the stock market boom because the net present value, the discount rate went down, so the net present value of all those future earnings went up. So you had, it set the stage for the boom in the Reagan era and beyond, and the Clinton era as well. Now, what's the difference between then and now? Well, for one thing, the government debt as a percentage of GDP, when Reagan took office, was around 31%, okay? So when Volcker jacked up.

• 49:00David Sacks?

  Interest rates, it didn't really create that much more of a debt service cost for the United States, for the federal government. Now, today, the government debt is 125% of GDP. So if, and this goes back to the Druckenmiller point from previous pod, if the Fed were to jack up interest rates to say the historical norm of 4.9%, debt service would go from 2% of the federal budget to 30%. You would have a massive crowding out of government programs. So how we fund all that debt service, very unclear. So we're caught between a rock and a hard place. The rock is, we have inflation that could be persistent. The hard place is

• 49:42David Sacks?

  the debt service. So, you know, the tools for controlling this aren't exactly clear. So this, I think, is fundamentally, the problem is, it's not clear whether we're going to have, you know, interest rates going up, or persistent high inflation. Those are the threats to the sort of economic boom we're seeing. Now, the full side of it is, that the reason why the stock market is, one of the reasons is at an all-time high is because earnings right now are fantastic. So, the economy is doing very, the companies are doing very well, but we just had for Q3, the GDP growth was at 2% annualized, which was sort of an anemic number. It's a low

• 50:22David Sacks?

  it's been since this COVID recovery started. So, it's, you know, it's interesting. We're at all-time highs, but there's also these like major storm clouds on the horizon. And I'm not going to like pretend like I know what's going to happen. I just, you know, when, when things are this good, I start getting nervous. When it's this easy to make money across everything, the stock market, the crypto market, the SaaS investing we're doing.

• 50:46Chamath Palihapitiya?

  We know we're on a heater. Can I say, that's the, that's the part that really scares me. So, for example, when everybody gets tilted because there's some Shiba wallet where 8,000 turns into 5.7 billion, right? So for those that don't know, there was a, you know, Shiba Inu coin, which is a shitcoin, which was basically there to ape. The other shitcoin, Dogecoin. The Dogecoin, right? A meme coin. All of a sudden, some guy 13 months ago put 8K into it, because the whole market cap was 80K. And then all of a sudden, over the course of these 400 days, that wallet holds $5.7 billion of value, or 10% the entire market cap of Sheba. People get tilted by that. Then there was an article today in Bloomberg,

• 51:31Chamath Palihapitiya?

  where there's a gentleman, a 66-year-old man in Singapore, who's a billionaire, right? So he was successful in his own right. However, he had made in his entire career about one or two billion. And he has made seven billion in the last two years, speculating on Tesla call options.

• 51:49Jason Calacanis?

  Wow.

• 51:49Chamath Palihapitiya?

  I'm not kidding. So buying short-dated calls, right, riding the wave, making money, allocating the gains, buying the underlying Tesla security, over and over and over again. And so, you know, I was talking to Nat about this, and I was telling her these examples, and she's like, "That's what sounds like a bubble." Because it really is very difficult to be in business, and to make these decisions and to be reasonably right.

• 52:13Jason Calacanis?

  But also, if you're a capital allocator, or you're building companies, like, how do you know if you're doing a good job if everybody just is all of a sudden...

• 52:22Chamath Palihapitiya?

  I'm gonna be right back, guys. I have to deliver the goods.

• 52:25Jason Calacanis?

  Yeah, okay. Got a quick baby change.

• 52:27David Sacks?

  I think what's hard about this is, okay, so one of the areas where it's sort of like best times ever is the SaaS market, which is where I invest in. And I'm obviously investing in very, very early-stage companies, but we're seeing valuations now go to multiples of ARR that we've never seen before.

• 52:44Jason Calacanis?

  50, 75.

• 52:46David Sacks?

  I would say 100 times ARR is sort of the rule of thumb right now. And you're seeing...

• 52:51Jason Calacanis?

  At what scale? A $5 million company is worth 500 million?

• 52:54David Sacks?

  Uh, anywhere from 1 million to 10 million. I mean, absolutely.

• 52:58Jason Calacanis?

  Is worth between 100 and a billion dollars, which makes no sense.

• 53:02David Sacks?

  Well, no, it does. If, well, let me give you the argument for why it could make sense. Okay, let's say the company is expected to go 3.3X this year, and 3X next year. That's basically a 10X over the next two years. So that 100X in two years will only be a 10x ARR multiple. And by the way, if you look at the comps for the companies that have gone public, the SaaS companies that have gone public, like... Look at Toast being worth, what, 30, 40 billion? So they're trading at 30, 40, 50, 60 times ARR.

• 53:35Jason Calacanis?

  On big numbers.

• 53:36David Sacks?

  On big, big numbers. So my point is-

• 53:38Jason Calacanis?

  But David, how hard is it to go 3X, 3X? That is, I mean, going 3X is hard. Going 3X, 3X back to back, that's like winning two NBA championships for being in the finals. It's hard.

• 53:48David Sacks?

  I don't think it's that hard. I mean, it's-

• 53:50Jason Calacanis?

  Not for you, but you're the king of SaaS. I know, I'm being dead serious. For a SaaS founder with a million to go from one to three and then three to nine, how many out of 100 actually go from one to nine?

• 54:02David Sacks?

  Yeah, I'll tell you, Yammer's trajectory, and this is over a decade old. We went from 1 million in our first full year selling the product to, well, back in those days, we looked at total contract value, 7 million of TCV, that was about 5 million of ARR. And then it tripled the year after that. So, you know, and then we tripled the year after that.

• 54:23Jason Calacanis?

  Well, a category-defining SaaS company, so you're taking-

• 54:26David Sacks?

  And then we got a client by Microsoft. But I'm just saying that it's entirely possible. There's a lot more Yammer's today or companies with that growth trajectory. So, I mean, but look, this is what's led to, you know, our Fund II, which we started investing in 2019, which has a SaaS focus, already has five unicorns in it from companies that we invested in the Cedar Series.

• 54:46Jason Calacanis?

  That's crazy.

• 54:47David Sacks?

  So, but look, I mean, when you're seeing like results that good, where my head goes is, okay, this is too good. You know, what am I missing here? Or like, what's the downside? And how long will this sustain?

• 54:58Chamath Palihapitiya?

  Just to build on your point, there are these businesses that have,

• 55:04Chamath Palihapitiya?

  I would say, interesting products that are growing well, but they may not actually be very important companies, yet they trade at enormous valuations. And then you have these companies that are just so superb. And I'm talking about Microsoft, Google, Apple, and Facebook that now trade in many cases at some pretty deep discounts to their intrinsic value. But this is the sign of this histrionic behavior that I think embellishes the end of a bubble. Right? It's this thing where you look at a growth rate and you don't even ask the structural questions about business quality, viability, sustainability, competitive moats.

• 55:49Chamath Palihapitiya?

  Management team. You're like, oh, well, it's going from 300% to Totally addressable market. You know, it's only decaying to 200%. I buy. Well, it's like, but yeah, but what are you buying? And is there any longevity and staying power? This is why, you know, I've, I think there are some great businesses in SaaS, but I also think there's a lot of head fakes. And in the public markets particularly, people just want to buy that growth, as David said, because they're chasing yield. They're not, you know, do they really understand? Am I buying this company because I really believe in this database technology versus that streaming technology versus this container technology? They don't know any of those things.

• 56:25David Sacks?

  Well, I, so, so this is the conundrum is I actually do believe like, so I believe in my own portfolio and I'm doubling down on all these companies and I do believe in SaaS. And I think the reason why these SaaS companies get such great multiples is because they're pure software businesses, very high gross margins, 80% plus gross margins. You know, once the flywheel gets going, they're very hard to displace. I mean, they have, it's not just a recurring revenue subscription type business, but you get expansion out of your current customer base. So, you know, on January 1st of a new year, you're starting with 120%, 150% of last year's revenue just from your existing customers. And then you're stacking the new revenue cohorts on top of that. So I am a believer in SaaS, but when I see everything going so well,

• 57:09David Sacks?

  it's SaaS and NASDAQ and S and P and crypto. And then I see, you know, 125% debt to GDP and the, the sort of radical spending that's coming out of Washington. I just start getting nervous and I don't know if I have like a prescription for people out there. I would just be a little bit cautious. Right now and temper your enthusiasm. But but look, the flip side of it is, we could keep having a boom for five more years, you know? And so the market

• 57:38Jason Calacanis?

  So what are you doing? Sitting out while inflation's going through the roof?

• 57:41David Sacks?

  You can't sit it out. But but but you know, but on on, I was listening to Vinny Lingam's show on beep on call in. It's called it's called Crypto Musings. No, he and Sunny Madra do a great show that you guys

• 57:55Jason Calacanis?

  I think we all just got 25 bips.

• 57:58David Sacks?

  You guys should all listen to his show. It's called Crypto Musings. They were talking about all the the dog coins. The other night it was Shiba Inu and Dogecoin and there's a couple of others. Vinny made a great point. He said, listen, if you're out there listening and you're sitting on life changing money in Shiba Inu. Sell, take it off the table if you can. Keywords being if you can. So look, I you know, this boom could last for another five years. It could last for another 10 years and the value valuations keep going up, the earnings could keep going. You don't want to miss out on that bull run. But if you've got life changing money in a in a highly risky position, that's not diversified. I'm amending my advice of let your winners ride to take some, take some chips off the table prudently.

• 58:42David Sacks?

  Doesn't mean you sell everything, but just take some chips off the table.

• 58:45Jason Calacanis?

  To diversify specifically.

• 58:47David Sacks?

  Yes.

• 58:47Jason Calacanis?

  Yeah, I mean, I think it's absolutely.

• 58:49Chamath Palihapitiya?

  I mean, I got to say, when you saw these quarterly earnings, there is no better business in the world than Google. Single handedly par excellence, the most incredible money making machine that's ever been created. And a close second, as it turns out, is Microsoft.

• 59:06Jason Calacanis?

  Unbelievable. I mean, just to

• 59:08Chamath Palihapitiya?

  Which is now the most valuable company in the world, greater than Apple.

• 59:10Jason Calacanis?

  Well, and Friedberg's been saying this on the podcast forever, but just to give people an idea. Q3 revenue at Google was up 41% year over year to $65 billion in a quarter.

• 59:25David Friedberg?

  And by the way, that is high margin.

• 59:28Chamath Palihapitiya?

  High margin.

• 59:28David Friedberg?

  The incremental revenue on the core Google products.

• 59:33David Friedberg?

  Generated an increment, operated at incremental 50% EBITDA margin. Sick. And they just adjusted their capex depreciation amortization schedule. Because they realized that their computers that they use in their data centers last four years instead of three, and the networking equipment lasts five years instead of three. So they're like, and I've been saying this since the beginning because I worked at Google and Erz is still there and he runs all the data centers and the networking infrastructure. When I worked at Google, there was this amazing project where we built a 10,000, we didn't build it, they built it, a 10,000 port switch called Firehose, which helped increase the throughput of the data centers and had these massively parallelized indexing and production servers.

• 1:00:19David Friedberg?

  And there was so much investment made from the beginning in building the infrastructure stack, the flywheel continues to move, spin faster and faster and faster. And here they are, building their own servers, building their own racks, their own data centers, literally the most, they have their own fiber across the oceans. Literally the most vertically integrated business in history with a moat that no one will ever be able to catch up on. And I read all these nonsense comments on the internet about people being like, why doesn't someone else go after search? It's so crazy to me. People fail to recognize that what we see is the tip of the iceberg at Google. And this flywheel is built by layers and layers of monopolistic, in a good way, monopolistic technical advantages that they've built into this business over the period of the past two decades.

• 1:01:03David Friedberg?

  And it is extraordinary, beyond anything we've ever seen in human history, how well this commercial enterprise is run. And the reinvestment of capital has been extraordinary. If you look at YouTube in the quarter, YouTube generated, this is insanity, YouTube is now operating at a nearly $30 billion revenue run rate. And that's just like pure margin incremental revenue for Google, layered on, you know, built off of the same ad network that they were originally running on Google. Obviously they have a different ad team now at YouTube, but YouTube now has more revenue than Netflix and is growing at likely 40 to 60% year-over-year revenue growth rate.

• 1:01:43David Friedberg?

  Netflix is, you know, considered one of the fang stocks, you know, one of the top stocks. And Netflix is only growing at 22%.

• 1:01:49Chamath Palihapitiya?

  You should remove Netflix and just put Google twice. It should be.

• 1:01:52David Friedberg?

  And then you look at Google Cloud.

• 1:01:54Chamath Palihapitiya?

  YouTube in there on its own.

• 1:01:55David Friedberg?

  And Google Cloud is now operating at a $20 billion run rate. And, you know, they can just throw these services on top of all these flywheels that they've built. And they become massive enterprises unto themselves. I mean, it is a behemoth. That is effectively not a tax in a bad way, but a tax on the internet. Because they are core infrastructure, a service, almost everything that we all consume and use.

• 1:02:17Chamath Palihapitiya?

  Yeah, but they give it to everybody for free and they build the internet for everybody.

• 1:02:21David Friedberg?

  They have been extremely smart about competitive pricing. As we saw recently, they dropped the commission in the place store to 15%. If I'm making an app and I'm giving Apple 30%, now I give Google 15%. I'm more inclined to promote my Android app and that's going to affect users and. You know, they're putting out this Pixel 6 phone that looks like an incredible piece of equipment. That's cheaper than the iPhone.

• 1:02:41Chamath Palihapitiya?

  They're an incredible company.

• 1:02:43David Friedberg?

  Everything.

• 1:02:43Chamath Palihapitiya?

  They are so incredibly well-run at the top. Sundar is. An incredible CEO. And they are. They're running a money printing pest at Amphitheater Parkway in Mountain View. I was going to say, Jason, to your point.

• 1:02:59Chamath Palihapitiya?

  I was talking to somebody.

• 1:03:02Chamath Palihapitiya?

  And. One really interesting thing that. This organization did. Was. A couple of years ago, they basically went long Google and Microsoft and they shorted. Apple, Amazon and Facebook against it. And I asked them why. And they said. It's the best inflation hedge we could come up with at massive scale. That could work in a way where, you know, we're long growth. But we're hedged where, you know, the types of supply constraints that could come in and, you know, kick us in the ass would never affect Microsoft and Google the same way that it would affect Apple and Amazon.

• 1:03:42Chamath Palihapitiya?

  Which, by the way, in their earnings results, they said, right? Amazon has huge issues on the supply chain side. Apple has huge issues on the supply chain side.

• 1:03:49Jason Calacanis?

  Amazon was up 15%. They missed their numbers.

• 1:03:54Jason Calacanis?

  Although Amazon Web Services is up 40% year-over-year, also on a big number, $16 billion in AWS revenue for Q3. So that as a standalone company is now on a...

• 1:04:07Chamath Palihapitiya?

  What did you guys think about Meta?

• 1:04:09Jason Calacanis?

  $16 billion. Oh my God. I mean, that was... Did you watch the video? I watched the whole thing.

• 1:04:15Chamath Palihapitiya?

  I watched two minutes of it and then I stopped watching.

• 1:04:19Jason Calacanis?

  PTS. I mean, it's basically, you have Facebook in the face of all of the things, all the times they got their hand caught in the cookie jar, saying, "This is going to be the new world, but instead of us doing everything wrong and screwing the users and their privacy and democracy and creating strife in the world, this time we're going to make it open source, this time we're going to build a coalition and partnership, and this time it's going to be awesome." And it's like a dystopian SNL skit where Zuckerberg is describing the future and he literally describes how proud he is that you're going to be able to play Grand Theft Auto. And Nick Clegg is like, "Yeah, this is going to be amazing. This time, we're going to bring all the regulators and the scientists in to tell us how to build it

• 1:05:04Jason Calacanis?

  and we'll have consensus of how to build the future." And you're like, "Did you just say that everybody in 3D is going to be in a virtual space, beating each other up with bats and guns and killing police officers in Grand Theft Auto?" Luckily, they didn't show a clip of it, but it was basically Zuckerberg taking credit for every single virtual reality or augmented reality thing you've seen over the last 20 years. He literally took everything from education to hololens to poker games and he took basically credit that this is going to be the future and that instead of this time it being a closed ecosystem, it would be an open one that supports NFTs and don't worry this time. I think any developer who puts any amount of their effort into...

• 1:05:49Jason Calacanis?

  Supporting in any way Zuckerberg's view of the metaverse is crazy when they could do it on a distributed, decentralized, crypto-based, open-source platform. You do not want to give Zuckerberg any more power. And if there is even a 10% or 20% chance that this is the next big compute platform, Zuckerberg needs to be stopped from doing it by the market.

• 1:06:10Chamath Palihapitiya?

  Wow, J Cal. I think you're crazy. I think you've lost your mind.

• 1:06:14Jason Calacanis?

  I haven't.

• 1:06:15Chamath Palihapitiya?

  Yeah, I think you've lost your mind. Oh, my God. I have a counterargument, too. Okay, David, you start.

• 1:06:20David Sacks?

  Well, I don't even know if I could categorize what I'm about to say as a counterargument. I don't even know how to counter that. All I would say.

• 1:06:27Jason Calacanis?

  It's insanity.

• 1:06:28David Sacks?

  All I would say is, look, I think it's really great that Facebook is spending all this R and D money on metaverse, virtual reality. Oculus is a really cool product. I think, Jason, you made the observation that people use it once, say it's the coolest thing ever, and never use it again. There is that element to it. They have to solve that. Using Oculus for the first time was one of the most unique experiences I've ever had with computing, but I admit, I don't use it anymore. It's just not something I.

• 1:06:55Chamath Palihapitiya?

  Better or worse than Pornhub the first time?

• 1:07:00David Sacks?

  But in any event, look, I think, I think.

• 1:07:03Jason Calacanis?

  That's his way of saying worse.

• 1:07:06David Sacks?

  I think that the fact that Facebook wants to do all this R and D in virtual reality, great. Changing the name of the company, however, at this point in time, it felt to me like, a little bit like Philip Morris changing his name to Altria Group. And by the way, I don't buy the idea that Facebook is like cigarettes. I don't believe that at all. I don't think it's, it's bad for people in the way that it's been hyped up to be.

• 1:07:27Jason Calacanis?

  You're saying this is a PR marketing strategy.

• 1:07:29David Sacks?

  But it feels like they're running from their name. And, and basically, it's almost like saying, you know, this whole business of social networking has been so sullied that we appear to be a diversified portfolio of companies, of which social networking is just one small piece.

• 1:07:45Jason Calacanis?

  A deprecating piece.

• 1:07:47David Sacks?

  Yeah, exactly. And I don't, I don't really buy into that. And I, I think if that was any part of their motivation, it's a mistake. Because I think the only thing Facebook should do about all these accusations is get up. On their hind legs and fight because I think like all this these leaks from the so-called whistleblower. I think this is a completely orchestrated political hit and they should just fight back and push back on it. I think the dangers of social networking have been vastly exaggerated. So it seems to me like they're buying into that nonsense by running from their name. So I at least would not have done this right now. I would have won that battle. And then if it was still important to change their name, then I would have changed the name.

• 1:08:28Jason Calacanis?

  Uh, well, they're losing young people at an extraordinary rate on Facebook. U S teenagers were projected to decrease by forty five percent over the next two years. Young adults between the ages of twenty thirty.

• 1:08:37David Sacks?

  Insta.

• 1:08:38Jason Calacanis?

  Were expected to decline by four percent or Tik Tok, I think is probably more.

• 1:08:41David Sacks?

  Yeah, Tik Tok is big. Yeah.

• 1:08:42Jason Calacanis?

  Yeah, during the same timeframe of our leaked memo obtained by.

• 1:08:45David Sacks?

  By the way, I mean, how in the world is Facebook or Instagram more dangerous than Tik Tok? I I don't get it.

• 1:08:51Jason Calacanis?

  No, Tik Tok is deranged, which, but by the way, our Stan making our Henry Belkasser of Tik Tok is reporting that we have like millions of views over there. So there's some rogue.

• 1:09:04David Sacks?

  Did I say that? How much I love Tik Tok?

• 1:09:06Jason Calacanis?

  I love Tik Tok.

• 1:09:11Jason Calacanis?

  Tik Tok.

• 1:09:13David Sacks?

  You're right. The Tik Tok account, there's an all in Tik Tok account done by a fan. And we got like two million views in the last week. It is absolutely bonkers.

• 1:09:22Chamath Palihapitiya?

  We we just passed Rachel Maddow and a bunch of folks.

• 1:09:25David Sacks?

  Yeah, we're more popular than all of MSNBC.

• 1:09:27Jason Calacanis?

  Yeah, well, I mean, come on, way to set the benchmark. Friedberg.

• 1:09:32David Friedberg?

  Do you guys, do you guys remember a year ago Larry Ellison negotiated this deal with Trump to buy Tik Tok?

• 1:09:37Jason Calacanis?

  That's brilliant. Yeah, he's gonna throw in Lanai. Friedberg is.

• 1:09:42David Friedberg?

  Masa-san was supposed to be on Tik Tok's board.

• 1:09:44Jason Calacanis?

  Yeah, that's by the way, uh, Xi Jinping is on Lanai right now and Larry Ellison got Tik Tok. Fair trade.

• 1:09:51Chamath Palihapitiya?

  Nobody talks about the Billy that Ellison kicked into Tesla right before.

• 1:09:57Chamath Palihapitiya?

  He's he's such a boss.

• 1:09:59David Friedberg?

  He made like twelve billion dollars.

• 1:10:01Chamath Palihapitiya?

  Fifteen, fifteen, fifteen.

• 1:10:02David Sacks?

  Fifteen billion.

• 1:10:03Chamath Palihapitiya?

  He's such a boss.

• 1:10:04David Friedberg?

  He put a billion dollar investment, joined the board, told everyone. Talk all, talk all the the snack you want about this guy, but he's landing spaceships on a drone ship in the middle of the ocean. What are you doing? And he'll figure it out and 50 next. It's insane.

• 1:10:20Jason Calacanis?

  But wait, I have one question for Friedberg. Is Zuckerberg pulling a Larry Page, i.e. somebody else becomes CEO of the Facebook collection of companies and then he becomes the chief product officer and then doesn't have to go to Senate hearings?

• 1:10:33David Friedberg?

  No, I think he's way more active and driven in terms of product direction than Larry ever was. So I don't think they're the same person and I wouldn't liken these two at all.

• 1:10:42Jason Calacanis?

  But what about the meta strategy of changing the company name?

• 1:10:44David Friedberg?

  By the way, my prediction was that they were, I should have done this on the pod a month ago. I said they were going to change their name to Meta. I think that at some point, as you diversify these businesses away from your core and you have this core engine driving the business, you know, you have to make it look like these businesses can and will operate independently. While they might get some leverage off of one another and one might feed into the other, they need to be able to operate independently from a kind of public perception, operating in management perspective. That's what Alphabet did. It's a natural progression of states as you start to do things that are too far distinguished from one another. And so it feels reasonable. I think, you know, is this a whole like PR rebranding?

• 1:11:26David Friedberg?

  Maybe to some extent that's helpful, but I do think that this idea that we need to do more than we're doing today and we need to make a big hard cold bet on it is what this represents. Now, the important psychological question, is he doing it out of a matter of defense? Meaning like, does this signal fear about the core business? Or is it about ambition and aggression and rebets on new opportunities and emerging opportunities that he thinks? And that's the big debate that I think is kind of going on right now. Is how much, often when you see people make big moves like this, it's either out of greed or out of fear. And I think some people are asking the question, how much should we be afraid of the core business being eroded based on his making this sort of a big bet?

• 1:12:09Jason Calacanis?

  Oh, you think this could perpetuate that or it's a bit of a tell that this is happening?

• 1:12:13David Friedberg?

  A tell. Right. And I'm not saying that's the case. I'm saying that's the question, right? And that's the question a lot of people are asking. Is this a tell that the core business is at serious risk?

• 1:12:24Jason Calacanis?

  Well, he's putting 10 billion into it this year.

• 1:12:27David Friedberg?

  For example, this Apple, you know, ad revenue business, I think is climbing by billions of dollars while Facebook's core business is being affected by the cookie tracking policy change on Apple iOS. So at the same time that, you know, Apple's reaping these benefits from the changes that they've made in iOS. You know, people don't really have great visibility into how much it's really affecting Facebook's ad revenue at this point. And this could be, as you point out, Patel, that maybe things aren't that good and he needs to diversify and he needs to make a big aggressive bet elsewhere. So, um, you know, we'll see. I mean,

• 1:13:00Jason Calacanis?

  Important question, Chamath, are we going to celebrate the birth of both your and Friedberg's daughters with a poker game? With my gambling?

• 1:13:11Chamath Palihapitiya?

  Do you want me to give you my thoughts on that or no?

• 1:13:13Jason Calacanis?

  No, it's a joke. Can you take paternity to go to?

• 1:13:18David Friedberg?

  I got a board meeting. I gotta go. Bye.

• 1:13:20Jason Calacanis?

  All right. Uh, for the queen of quinoa.

• 1:13:23Chamath Palihapitiya?

  Wait, wait, wait. Don't you want to know what I think? I think on the meta thing, I think the, the risk is if Google and Apple take the hardware costs to zero, because I think there's an incentive in a highly fragmented ecosystem. You have to remember when Apple introduced the iPhone, there was nothing that came before it. So it was completely groundbreaking. And I think what Facebook has to figure out is how to make their VR experience so revolutionary that it attracts developers. And in the meantime, if Apple and Google figure out how to kind of give it away for free and just kind of make it a low cost hardware game where everything else, Jason, as you say, is this kind of open source thing where it's like a browser.

• 1:14:02Jason Calacanis?

  Yeah.

• 1:14:02Chamath Palihapitiya?

  Right. Where everything just exists in a DeFi kind of world.

• 1:14:05Jason Calacanis?

  Like the web and the internet.

• 1:14:06Chamath Palihapitiya?

  Then, then it's a little bit more problematic for all the money spent. That's what they have to figure out.

• 1:14:11Jason Calacanis?

  Do you think Saks is going to be VR or AR?

• 1:14:16Jason Calacanis?

  What wins the day with consumers?

• 1:14:18David Sacks?

  Well, it's a good question. I mean, they're very different experiences.

• 1:14:24Chamath Palihapitiya?

  Both can win.

• 1:14:25Jason Calacanis?

  But when we're not, when what I think is the question. Twenty years from now, which one will be used more, or ten years from now, ten to twenty years from now, which one will make more money? Be more relevant, be more utilized?

• 1:14:35David Sacks?

  Well, I mean, AR, the dream there is that you wear these glasses that have like the Terminator view, where it's like scanning the world and giving information. You'll never forget anyone's name again. Stuff like that. That would be kind of useful, maybe. VR, I think, is more about immersion. It's really like a gaming experience, I think, at least now.

• 1:14:55Jason Calacanis?

  I think it's all about AR. Basically, what he was saying there, he was talking about VR. I think VR lets you make the world. And then AR lets you experience them concurrently with the real world. And it's the same tools and libraries and kits. As a developer, making it for VR, AR is going to be pretty. I think seamless. And so I think Apple has skipped VR on purpose and they're going to AR. I think Google is basically going to go directly to AR. And then where does that leave? And then Microsoft already has HoloLens that they've been investing in heavily, and I think they got the biggest lead. That at least we publicly know about. So I think it's going to be a race for who can get AR to work and VR is just. Like kind of a waypoint on the way there.

• 1:15:40Chamath Palihapitiya?

  There's a lot of stuff going on, and I'm sure that people will want to check out of the real world for some amount of their life. But they'll probably also want to be in the real world for some part of their life. And. At some point, maybe if those two things merge, that distinction won't matter as much. And I think. If the experience is compelling enough. It could happen.

• 1:16:01Jason Calacanis?

  Well, I mean, if you think about us playing poker on the poker, one of those poker apps. If we could put our glasses on, sit in our room and see each other at a poker table. You know, like if Bogut wanted to play from Australia and he was, you know, projected into the seat on the game and we all saw them there with glasses, AR glasses. That would be amazing, wouldn't it?

• 1:16:19Chamath Palihapitiya?

  Sure.

• 1:16:19Jason Calacanis?

  Be able to, you know, have two of the people at the game be. Projected in, as it were. Could be, especially if it was Diego. I mean, that would be pretty great. I mean, for the, I'm saying for the good of the game. I, I did a tweet where I said, listen, VR, people leave it on the shelf and that, you know, Paul Malucki and a bunch of people got in my face about it. And then we had like a actually really good discussion. Um, and I said, well, what about serious gamers? Cause I'm talking about serious gamers. They all buy it and then they never use it. And they said, yeah, it's not for serious gamers. I said, okay, well, what about iPad gamers and casual gamers and bejeweled and Candy Crush? Like, oh yeah, they're not interested in it. And I'm like, well, well, who are the gamers then? Is it the intense ones or the casual ones? They said, no, it's a new category. The number one game like Rec Room, Beat Saber and Golf are like

• 1:17:04Jason Calacanis?

  crushing it, uh, with a million users a month in some cases. You know what they all have in common? They're physical activities where you get some amount of exercise and it would be very difficult to coordinate in the real world.

• 1:17:14Chamath Palihapitiya?

  I know, but Jason, when you look at things like, like Axie Infinity, where, you know, there are play to earn movements that are happening in, in sort of this, you know, layer three kind of DeFi world where you're getting paid to basically, you know, play games. That could be a job and then you will spend eight to 10 hours in the metaverse of some sort. So these things are very possible.

• 1:17:35Jason Calacanis?

  I find it so dystopian. Uh,

• 1:17:37Chamath Palihapitiya?

  That's true, but I'm sure that our parents find some parts of our lifestyle dystopian and, you know, we find certain parts of our kids' lives dystopian. It's just what happens.

• 1:17:47Jason Calacanis?

  Yeah. I don't know. All right, everybody.

• 1:17:50Chamath Palihapitiya?

  We will play poker. We will play poker.

• 1:17:51Jason Calacanis?

  Yeah, we gotta play poker at some point. I mean,

• 1:17:53Chamath Palihapitiya?

  We'll play poker. Either, either Tuesday or Thursday.

• 1:17:56Jason Calacanis?

  Okay. Yeah. Well, that's good. Perfect. Babies will be like almost a week old.

• 1:17:59Chamath Palihapitiya?

  Sax, which, which days are you gonna flake? Tuesday and Thursday?

• 1:18:02Jason Calacanis?

  Yeah. Which day will you play? Tuesday and Thursday?

• 1:18:04Chamath Palihapitiya?

  Tuesday and Thursday, Saxi.

• 1:18:05Jason Calacanis?

  I mean, do I have to come pick you up?

• 1:18:07David Sacks?

  I can play on Tuesday.

• 1:18:09Jason Calacanis?

  All right, everybody. For the Queen of Kinwa, the Rain Man and the Dictator, I'm Jason Calhoun. So we'll see you all next time on All In. Love you, besties.

• 1:18:23David Sacks?

  Rain Man David Sax.

• 1:18:40David Sacks?

  Besties are back.

• 1:18:43David Friedberg?

  That is my dog taking a notice in your driveway.

• 1:18:50Chamath Palihapitiya?

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

• 1:18:58David Sacks?

  What your B B? What your B? What your B? B? What? We need to get merch. Besties are back.