Tesla vs. Mark Rober, Google's $32B M&A Bet, & XRP's SEC Victory | E2100

Today's show: Tesla FSD drama, Google's massive $32B cybersecurity bet, and XRP's SEC victory. Jason, Lon, and Alex break down the internet firestorm over Mark Rober's viral Tesla test, why Google's Wiz acquisition could spark a new M&A wave, and what the SEC dropping its case against XRP means for crypto's future. Timestamps: (0:00) Episode Teaser(1:27) Show intro(2:01) Jason's skiing trip and Tesla stock banter(3:00) Criticism of Democratic party's approach(5:44) Discussion of Mark Rober's Tesla and lidar video and autopilot vs FSD(8:00) Mark Rober's response and debate over his relationship with lidar CEO(9:56) Gusto - Get three months free when you run your first payroll at http://gusto.com/twist(11:02) Further criticisms and analysis of Rober's video and audience expectations(19:41) Suggestion for Rober to redo the test and video title accuracy(20:07) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist today!(21:38) Accountability and public reaction to Rober's video(25:00) Potential fallout, personal consequences, and stock impact(29:58) AdQuick - For TWiST listeners - AdQuick is waiving their fee on your first campaign. Visit https://www.adquick.com/twist(31:18) Personal investments and conflicts of interest(33:25) Wiz acquisition and implications for M&A market(37:28) Calculation of returns and LP impact(40:38) Benefits of M&A for society and antitrust concerns(43:27) Examples of market cornering, price gouging, and cloud computing(49:29) XRP and SEC lawsuit update and implications(56:29) Proposed regulations for crypto projects and Trump coin(1:00:21) The need for clear crypto regulations and potential for new projects Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Links from the show: Mark Rober's Philip Defranco interview: https://www.youtube.com/watch?v=W1htfqXyX6M Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (9:56) Gusto - Get three months free when you run your first payroll at http://gusto.com/twist(20:07) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist today!(29:58) AdQuick - For TWiST listeners - AdQuick is waiving their fee on your first campaign. Visit https://www.adquick.com/twist Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

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

• 0:00Jason Calacanis?

  On Monday, we talked about this video that went viral. There is a YouTuber. He's incredibly popular. He did this video. Since we talked about it, there's like very granular things that have been discovered.

• 0:14Speaker 01

  Tesla community really pored over this video and found a lot of issues.

• 0:18Jason Calacanis?

  He's friends with the CEO of this LIDAR company. That's been established. He said on social media, he's good friends with them and he raised money with them for a charity.

• 0:27Speaker 01

  We've not established that they're good friends. We've not, that's a, that's a pure rumor. He says they know each other. They, but they don't know if they're good friends. Good friends is editorializing.

• 0:38Jason Calacanis?

  Are you friends with him or something along? Why, why you keep interrupting me when I just try to finish a sentence here?

• 0:44Speaker 02

  This Week in Startups is brought to you by Gusto. Gusto is easy online payroll benefits and HR built for modern small businesses. Get three months free when you run your first payroll at gusto.com/twist. Northwest Registered Agent. Starting your business should be simple. With Northwest Registered Agent, you can form your entire business identity in just 10 clicks in 10 minutes. From LLCs to trademarks, domains to custom websites, they've got you covered. Get more privacy, more options and more done. Visit northwestregisteredagent.com/twist today. And AdQuick, easily plan, deploy and measure out of home campaigns as easily as digital ads. Visit adquick.com/twist to learn more. And just for Twist listeners, they're waiving their fee on your first campaign.

• 1:27Jason Calacanis?

  Hey, everybody. Welcome back to This Week in Startups with me again, Alex Wilhelm and Lon Harris. He's at Alex on X. He's at L O N S, Lon's plural. And we had a little bit of a technical snafu today, but let's just get right to work. Obviously you can see I am still in the mountains. Got that last week of skiing in. And while I was here, the docketh, runneth over. Lots going on. Um, I sent in some like banter here for us. What, what did I send in for banter? I know we had like a little couple of banter items, Alex. Cue us up.

• 2:01Speaker 03

  Well, we have, uh, we have a clip from the former candidate for Vice President. Uh, Mr. Tim Wall is discussing his adornment of, uh, Apple's, uh, stock application.

• 2:11Speaker 04

  Saying, oh, Mr. Wall, I know some of you know this on the iPhone. They've got that little stock app. I added Tesla to it to give me a little boost during the day.

• 2:20Speaker 04

  2:25 and dropping.

• 2:23Speaker 03

  Where was this guy during the campaign? Where was the witty, off the cuff, uh, non overly consultified guy?

• 2:31Speaker 01

  We got our answer on that, which is they Kamala's campaign told him to stop doing that. Like they very purposefully defanged him and told him to stop calling everybody weird and stop trying to be goofy and funny and like get in line.

• 2:45Jason Calacanis?

  I mean, the guy made it to governor, correct?

• 2:47Speaker 01

  Yeah.

• 2:48Jason Calacanis?

  The guy who made it to governor, so there were some group of people who find him appealing and put him in office, correct?

• 2:57Speaker 03

  Yes.

• 2:57Speaker 01

  The voters of Minnesota, yes.

• 2:59Speaker 03

  He's very popular there.

• 3:00Jason Calacanis?

  This is like such a bad take, like it's an American car company. It's the one successful one. You could disagree with whatever you want to say about Tesla or what, you know, they're doing at Doge.

• 3:15Speaker 01

  You get why people react. Like, I'm not saying you have to agree or that you're like, I, I understand, but like,

• 3:24Speaker 01

  they've made themselves into, like Tesla wasn't always this. It wasn't always the enemy of the Democratic Party and of liberal. It was, it was, it was a thing they all liked at first. It, Elon has made-

• 3:36Jason Calacanis?

  It was an electric car. They cared about the environment and it's done more to change the fate of global warming than any other car company. Sure. Obviously, it's just such a losing position to go after an American car company like this when you could have your own platform for like healthcare, homes. They have to define something that isn't anti-Trump, that didn't work this last election. I just think it's a terrible, like, approach to, because what's gonna happen if-

• 4:05Speaker 01

  Of course I get why. Tesla the enemy first. Elon said he was the enemy of the Democrats and they are now responding in kind.

• 4:15Jason Calacanis?

  No, no, I get it. I just think you have to have a platform. If the Democratic Party, I mean, I understand the dynamic at play. It's pretty obvious, right? They're dunking, he's cutting jobs at Doge and downsizing the government. They are taking the, you know, they're gloating that the stock is down.

• 4:31Speaker 01

  He's been very critical of Tim Walz, the person and woke mind virus. And he's moved himself the center of right wing American politics. So reacting outraged when a person on the left wing of American politics criticizes him is like, well,

• 4:48Jason Calacanis?

  I just don't think it's not a, the most important thing for the Democrats is to actually have something of substance that they can offer to the American people that will get a vote. And being anti-Trump worked in 2020. It did not work in 2024, and it specifically did not work with this guy and Kamala. And it didn't work because people, this is not what people are concerned with. They're not concerned about the stock price of Tesla. They're concerned about their home and can they own a home? They're concerned about education. They're concerned about healthcare. The Democratic Party's lost, this is the first time we're really hearing from Tim Walz since the election, and this is a losing platform. They gotta have somebody out there.

• 5:30Speaker 01

  Viral. I bet his whole speech was not, I agree with you that like Democrats lost this election because of their platform, not because they didn't make the best jokes or whatever. But I, you know, I, I, I think that it's obvious that Democrats are gonna make jokes like this. Should we talk about this Mark Rober Tesla ongoing controversy?

• 5:48Jason Calacanis?

  It's all gonna be all Tesla.

• 5:50Speaker 01

  It's gonna be all Tesla, but this was, this was a huge thing and we did talk about it on Monday. So we already discussed this viral.

• 5:57Jason Calacanis?

  We have to follow this up. Yeah.

• 5:59Speaker 01

  This viral YouTube video that Mark Rober did where he drove toward various obstacles in both a LiDAR equipped vehicle and Tesla, notably a Tesla on autopilot, not in full self-drive mode. Within hours of the video posted, the LiDAR detects all of the, all of the barriers and obstacles. The Tesla blows right through most of them. Within hours of it being posted, the. Internet was picking the whole thing apart.

• 6:26Jason Calacanis?

  Since we talked about it, there's like very granular things that have been discovered.

• 6:31Speaker 01

  Tesla community really pored over this video and found a lot of issues.

• 6:35Jason Calacanis?

  Got it. Yeah, we have to go really slow here because this has now become forensic. So there's two levels of this, you know, we reacted to the video, big picture. We didn't zoom in on was FSD on or was autopilot on, which are two different products inside of a Tesla. If you know the, if you, if you have a Tesla, you understand this autopilot just as adaptive cruise control and stays in the lane. It's not the full self-driving with AI that dynamically reacts to the environment.

• 7:03Speaker 01

  And we will get into this distinction, this distinction becomes a big part of this whole controversy.

• 7:08Jason Calacanis?

  And the second piece lawn that we have to get into is who's funding this and is there a funding relationship? So there, there's two angles.

• 7:15Speaker 01

  So if you look at the description of the original video, LiDAR company Luminar, they produce the LiDAR self-driving system that Rover uses. They provided him with their systems for free. Now he's saying this wasn't spawn con, this wasn't a paid promotion, no money exchanged hands. They just gave him their LiDAR system and he used it to conduct the experiment. Some people are still saying, well, he's still incentivized. Yeah, now we do have a clip of Rover that we're about to show from the Philip DeFranco show on Monday, where he denies that he has any direct connection. He says Luminar was a partner in making this video because they loaned him the tech, but money did not exchange hands and he's not purposefully making sponsored content for Luminar. Let's take a look.

• 8:00Jason Calacanis?

  Okay.

• 8:00Speaker 03

  All right, here's the clip.

• 8:01Speaker 05

  I really want to clear this, Luminar gave us no money. They had no say in the edit. They did not approach us. Uh, they were just a car technology I know that use LiDAR. So I reached out to them and say, hey, will you let us borrow some cars? Right. And we told them, look, if your LiDAR fails one of these, it goes in the video. And if Tesla would have passed all of them, by the way, that would have gone in the video. Like I'm very agnostic. I really just wanted to see what would happen.

• 8:28Jason Calacanis?

  Okay, now, Alex, there were people talking about a previous financial relationship between Mark and the CEO of this company, based upon a nonprofit. And that nonprofit relationship is different than this video one, but he's friends with the CEO of this LIDAR company that's been established. He said on social media, he's good friends with them, and he raised money with them for a charity.

• 8:56Speaker 01

  Yeah.

• 8:56Jason Calacanis?

  That is not, what's not established is that there was any money that exchanged hands for this video.

• 9:02Speaker 01

  We've not established that they're good friends. We've not, that's a, that's a pure rumor. He says they know each other. They, they don't know if they're good friends. Good friends is.

• 9:12Jason Calacanis?

  No, no, hold on. In the tweet, and I directed this to Alex Lon, so please stop interrupting. Alex, did we establish this in the tweet? Because he just, didn't we just show a tweet where it said, "My good friend got us over the hump"?

• 9:25Speaker 03

  Uh, "Help from my buddy" is the, is the phrase. Buddy is, you can read that as a colloquialism for closeness, or you can read that as an arm's length. I'm not going to take an opinion about semantics.

• 9:33Jason Calacanis?

  I don't know, but there is obviously a pre-existing relationship that people are focused on, and money going to a charity, but we don't, it's not necessarily Mark's charity. So that is the, that is what people are debating online, is, is there some relationship here? Is there something nefarious going on? But let's go to the video, and the items in the video. All right, you didn't start, "Your company to run payroll, did you?" Of course not. We all know that. Gusto is here to help. Gusto's going to help you run your payroll and handle all your benefits, onboarding, and HR, all in one place. The market agrees. 300,000 businesses trust Gusto today,

• 10:16Jason Calacanis?

  and you can too. As your startup scales, Gusto is going to grow with you. You got state and federal taxes handled for your staff around the country. Gusto does all that. And hey, maybe it's finally time for you to offer a 401k plan for your team, right? Gusto's got you on that. And you might need to get your compliance sorted, right? Well, three out of four employers. Say Gusto helps them be government compliant and even better Gusto is simple, easy to use software. So you can focus on what matters, building your startup. So here's your quick call to action. Do you want all Gusto has to offer with no hidden fees? Well, how about a discount? Try Gusto and get three months free. Gusto.com/ twist. That's G U S T O dot com slash

• 11:01Jason Calacanis?

  twist.

• 11:02Speaker 01

  Well, yeah, there are a number of criticisms that are directly about the content of video. A lot of people feel like even though it was focused purely on the cameras, the Tesla cameras versus the LiDAR, that it was still biased or misleading to not use the full self-driving system, which is AI enabled. It's a different system than just using the cameras with autopilot. So again, we have, he did respond to this, the very first clip, if we want to show that one.

• 11:33Speaker 03

  Yes.

• 11:34Speaker 01

  Is Rover talking about why he used autopilot instead of full self-driving?

• 11:38Speaker 03

  I believe this is the right clip. Wish me luck.

• 11:41Speaker 05

  My understanding with full self-driving is that you have to enter an address for it to work.

• 11:47Speaker 03

  That's not true.

• 11:48Speaker 05

  And as opposed to just being able to engage it. And this is what Tesla has called autopilot. And even Googling it, seeing what they determine, they determine as autopilot. And my understanding is that the, the sensor is not different, whether it's full self-driving or autopilot, knowing if that's a wall or not, that, that doesn't change. So I think I could, I mean, I'd be happy to rerun the experiment in full self-driving.

• 12:15Speaker 01

  Okay.

• 12:15Jason Calacanis?

  That's, that's actually not true because I drive this every day. When I use FSD.

• 12:20Speaker 01

  Oh, sorry.

• 12:20Jason Calacanis?

  I.

• 12:22Jason Calacanis?

  Are you friends with him or something along? Why, why are you keep interrupting me when I just try to finish the sentence here?

• 12:26Speaker 01

  I was just going to say, we had a tweet from Sawyer Merritt, who's been a big critic of the Rover video that actually does clarify both of these points if we want to pull that out.

• 12:34Jason Calacanis?

  I was just going to say, based on my firsthand experience using a Tesla every day. I often put it in full self-driving without the address in, so that reflects what my personal experience. It will go into full self-driving mode. And these are two radically different technologies. So what does Merit say?

• 12:53Speaker 01

  So this was what Sawyer Merritt had to say is, but basically what you said. One, full self-driving does not need an address in order to work. So that's just incorrect information that either Mark Rober had or that he's spreading. And two, FSD and autopilot process the incoming visual data differently. So even though Rober suggests the two results would have been identical because it's the same camera, that's not really accurate. The results might have been different if you were using the full A and I enabled self-drive.

• 13:22Jason Calacanis?

  So that's probably the beginning and the end of this, I think, in terms of, he doesn't even understand the difference between FSD and autopilot. That's like, if you're going to construct a test and you don't understand those two things are different, and you don't understand that FSD does anything, well, that, I think he has to just redo the entire test, because that's like going into a lab test and not knowing the difference between like, I don't know, sugars and fats or something, and you're doing some test on calories. But anyway, what else in the video is wrong?

• 13:54Speaker 01

  Right.

• 13:54Jason Calacanis?

  Or questionable, or being debated?

• 13:56Speaker 01

  So yet others claim that Rober actually goose the results through direct intervention in the test. Like, some people are saying the breakaway wall that he drives through appeared to have already been broken when he drove through it. So like, was he doing multiple takes? Were there different results on multiple takes? And also, a lot of people were saying he turns off autopilot before he actually hits the obstacle to potentially cause the crash. In response to this, he posted some raw footage of the test so that you can see. But even in the raw footage, it only raises more questions. About 17 frames

• 14:37Speaker 01

  before he hits the wall, even in the raw footage that he posted, you can see that autopilot does turn itself off and he can't, he can't really explain that. On the Philip DeFranco Show, we also have a clip of- About this, he does confirm that they did multiple takes in order to get the most cinematic footage and make it look really good. But he's saying he got the same results every time. So even combining different results into one shot doesn't compromise the integrity of the video.

• 15:05Speaker 03

  So they did another take to make it look more, more appealing. Again, my, my take here is that Mark did a funny video. And he probably got a car from a company that someone he knows owns. And then it got much bigger because everything involving Tesla is so. I mean, here we are talking about it. If this was about a Jeep, no one would care, you know?

• 15:25Jason Calacanis?

  Um, that's interesting. Alon, what's your take?

• 15:29Speaker 01

  I, I mean, I think like it's sort of reality TV. It's sort of the way YouTube is done. Like to me, I don't know Mark Rober, but I know a lot of YouTube creators. And the goal is always to make the most clicky thing, the most entertaining thing, the most compelling thing. That's the, that's the relentless focus. You wake up every day like, how can I get the most people possible to click my video? He is a NASA scientist. I saw your question. That is, he's a former NASA engineer, Mark Rober. I think that's what happened here. I think that he was entirely focused on making this very clicky, making it go viral. It worked. But I don't think he was thinking about it as you would normally think of a scientific experiment where the results are meant to be

• 16:09Jason Calacanis?

  Okay.

• 16:10Speaker 01

  Provable evidence of anything. I think it's just a fun video.

• 16:14Jason Calacanis?

  Got it. So I, I think I've now figured this out. So the facts are, he has a relationship with this person. But the person didn't pay to do this. The person gave him the car. The next piece of this, and by the way, I've never, I've never heard of this individual before today.

• 16:29Speaker 01

  He's gone viral before. He's a long time YouTube creator. It does a lot of like sciency STEM kind of stuff. Yeah.

• 16:35Jason Calacanis?

  Yeah. And because his audience is losing their minds that they don't trust him anymore. And that this is ruining his relationship. That's what I'm seeing. That's from his audience, from his fans are very upset about this. So I think what I'm getting from this is he is a scientist. He, people expect him to construct.

• 16:55Jason Calacanis?

  Really good experiments. His audience is extremely disappointed that this one was not constructed well. And into his own admission, he doesn't even understand the basic fundamental difference between autopilot and FSD. And he took multiple takes to kind of make it cinematic. Now, if that was Mr. Beast, the expectation is when I watch a Mr. Beast video is that it's not thoughtful, it's entertaining. It's constructed like reality TV. I don't think people look at him, based on the reaction I'm seeing from his own fans, as a Mr. Beast, as much as they look at him as a scientist. And they're disappointed in the value proposition of Mark, what's his last name?

• 17:37Speaker 03

  Rover.

• 17:37Jason Calacanis?

  Rover. Mark Rober to people equals NASA scientist. And that would mean you would be based in facts and integrity and the construction of a really good experiment, which did not occur here. Independent of whatever you think of Tesla, you know, I call balls and strikes on this on Monday, which was, everybody already knows that LiDAR can see through fog and does better in rain. And because there's nothing new in it, that's the other piece to the puzzle here. I'm going to put aside, I don't think there's some like bag of money being handed to him. He's already a successful YouTuber, right? He doesn't need a bag of money to ruin his reputation. So I'll take that off the table, right? That's what people are insinuating.

• 18:21Jason Calacanis?

  So I'll take that allegation off the table. But what you can say here is poorly constructed, sloppy work, and nothing new, because we all knew this going in. So then you have to wonder in a vacuum, why is he doing this? This is not the right experiment. The right experiment would be to have a human driver, as I said, LiDAR and FSD, and then have that discussion where, see if a human can see the child through the rain, see if a human could see the child through fog. I brought that up on Monday. And what he should really do is redo the test over again, as I said it. And then he should not be going for entertainment value. Alex, to your point... These are publicly, these are both publicly traded companies.

• 19:06Jason Calacanis?

  And he has a deep relationship or a significant relationship or what looks to me like a non-casual relationship with one of the two public companies. So that creates an appearance of impropriety. And then the public companies start flip flopping all around based on it. So he's a scientist. He used his perch in science to do an experiment. He put this as an experiment. He frames it as an experiment over and over again. That's the problem. The expectation is he did a thorough experiment and he's a NASA scientist. He should just apologize and say, you know what? I just wasn't tight enough to everybody's standards. Let's do it again. Let's run it back.

• 19:41Speaker 01

  I think that's the best thing he could do.

• 19:43Jason Calacanis?

  And he should get rid of the LIDAR from his friend's company or his buddy. Who knows if he's exaggerating or not. It felt a bit squirrely the way he says they didn't pay for this video. So I, he's got to be much more clear about that relationship and just own it. If they're friends and they go have dinner all the time, great. I'm friends with Elon. I have dinner all the time. Like you know that coming into my discussion here. All right, founders. Okay, digital nomads and my remote entrepreneurs, I need you to listen to me right now. I know you want to build that next great company. Well, you're going to need two things, right? You're going to need a great idea and you're going to need to properly set up your business. And that's where Northwest Registered Agent comes in.

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• 21:09Jason Calacanis?

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• 21:38Speaker 01

  There was one point that somebody brought up that I thought was a really good one. Uh, it's he titled the video. Can you fool a self-driving car? And I think that's what upset people because that's not really.

• 21:50Jason Calacanis?

  He didn't use FSD.

• 21:51Speaker 01

  Exactly. If he had named it, can you fool Tesla autopilot? I don't think there would be nearly as open criticism because it would be more accurate about what he's actually testing. I think that to me is the biggest thing is that he's pretending this is a test of the overall Tesla system, but it's actually just a test of this one feature.

• 22:11Jason Calacanis?

  Was he, Alex, in any of this? Was he apologetic and did he take any ownership of this being a poorly constructed experiment?

• 22:18Speaker 03

  I'm trying to recall the, I watched the entire interview he did with DeFranco and I don't recall there being an apology. There was a lot of comments on just trying to get the data, underscoring the point that this is framed as an experiment. The thing that I'm kind of surprised by in all this, because I appreciate you guys breaking down your views, but I at no point watching this video thought it was going to be any more rigorous than I would expect from a Mythbusters rerun. And what I've learned, Jason, from your framing of people thinking that this guy has a bit more serious, is that people have higher standards than I thought they did for YouTube clickbaity experiments. Maybe my standards have been too low, but when I saw this, I thought, oh, this is fun. Yeah. And I, I took it no more seriously than popcorn.

• 22:56Jason Calacanis?

  Were you aware of his work and were you aware he was a NASA scientist before this?

• 23:00Speaker 03

  Um, I do not recall my exact free knowledge because this has been going on for long enough. But no matter what, if it's a YouTube video that I'm having a zipping time watching, probably more entertainment than science. That's my take.

• 23:13Speaker 01

  I actually think this is a generational thing with YouTube. Those of us who remember the early era of YouTube, when it was very casual and it was very silly, we don't think of YouTube as having. Having rigor at all. But if you are a younger person who's grown up with YouTube, there's such a diversity of content on YouTube now. There really is a lot of academic, scholarly, scientific, like, there is a lot of that kind of content on YouTube now. So I think younger people have a different perspective about a YouTube video and how accurate and how rigorous and how transparent it's going to be.

• 23:47Jason Calacanis?

  The way he presented it was very academic and scientific, that he had set up a scientific test and they were doing five tests and then they were going to do pass, fail, and each test. So I don't give him the YouTube pass or the generational pass. If he just said, hey, we made a brick wall to see if we could fake it, that would be one thing. But when you construct it as an experiment and you go step by step through each one, that's where he messed up. He should just apologize and say, you know what? I screwed up. I presented this as a very rigorous test. We didn't actually do a rigor drop and I fumbled by doing autopilot and the naming of this. Apologies to the Tesla team. I know they put a ton of work into this. Apologies to my audience.

• 24:28Jason Calacanis?

  I know they expect better of me. Let's run it back. I'm going to do it exactly with FSD. I'll do autopilot too. I'll do a human and I'll do a different LiDAR system, not from my friend's company, if in fact it's his friend, which it seems to be, but maybe not, who knows? And he needs to address that piece. But he did, I think, intentionally mislead people. I think he intentionally misled people. And I think that's the problem, is people get disappointed and then not taking ownership of it as a fail. But, um, yeah, that's, that's my take on it.

• 24:59Speaker 03

  Well.

• 25:00Jason Calacanis?

  Is there any ramifications of this? Is he getting sued? Is there any like fallout?

• 25:05Speaker 01

  I haven't heard any, any lawsuits. I mean, it definitely, there will be personal fallout for him. I feel like this is the most notable thing he's sort of maybe ever done. And now it's, you know, he's going to have like a little bit of infamy about this for sure, unless he makes another video. And I mean, I, I think now that he's got everybody watching him, it's actually a huge opportunity. He can make another huge video if he does the test for real.

• 25:28Jason Calacanis?

  And I'll tell you, like, I'm looking at the the press's reaction to this. Like, The Verge is, you know, kind of is super left-leaning. They're part of Vox. I know because The Verge team was stolen from the Engadget team at AOL. Had to create The Verge. So like, I'm pretty well aware of like their politics and where they stand on all this. They are like, hmm, like, their headline is, was more than a little weird.

• 25:53Speaker 01

  Oh, yeah. A lot of, I mean, these questions are undeniable when you see them all put together. Like, I don't think the donating to charity thing is that significant, but obviously, there are significant things. I mean, his explanation about FSD versus autopilot being completely wrong to Philip DeFranco.

• 26:10Speaker 03

  That's embarrassing.

• 26:11Speaker 01

  It's pretty damning. I mean, I don't, I don't know how you really, you really work your way around that one.

• 26:16Speaker 03

  I just want to go back to our Monday conversation. I'm gonna say, wow, LiDAR is great. Let's use more of that. Moving on.

• 26:22Speaker 01

  The, the video does open with a really interesting, like, 15-minute where he uses the LiDAR camera to map Space Mountain. I don't know if you guys watched the full video. That part's a lot of fun. That part's a lot of fun.

• 26:32Jason Calacanis?

  I like that one. That one seemed like very credible.

• 26:34Speaker 01

  That's more like his usual content, actually. Like, silly, kind of goofy, fun things. Like, using science to have fun.

• 26:42Jason Calacanis?

  Um, and the, and the LiDAR company that he talks about.

• 26:46Speaker 03

  Luminar.

• 26:47Jason Calacanis?

  Luminar. That is also a little bit of a controversial company, huh? Like, it was a giant company, and then it crashed, and it's like, I don't know if it's a penny stock now, Luminar, but the Luminar shares went bonkers on the video.

• 27:02Speaker 01

  Correct. Yeah.

• 27:03Speaker 03

  Yep.

• 27:04Speaker 01

  Tesla dropped around 5%, and Luminar shot up, which, which obviously looks bad. That's not proof of anything, but it doesn't look great.

• 27:13Jason Calacanis?

  The appearance of impropriety. Oh, my God. Look at the five-year chart for Luminar. Pull that up on the screen.

• 27:18Speaker 03

  I'm on it.

• 27:18Jason Calacanis?

  So I think this is like a really interesting subplot here.

• 27:22Speaker 01

  27%. Luminar shares soared 27% after the video was posted.

• 27:28Jason Calacanis?

  Yeah. So this is, you know, I always go back to the appearance of impropriety and trying to be really clear about that. I have this come up in my life, too, because, you know, I got, I don't know, friends in the administration or friends in high places sometimes, and the appearance can be like, whoa. I can tell you here, I, I did not talk to Elon about this. He's busy. I haven't talked to anybody about Tesla or whatever. Like, I'm looking at this just from first principles, and...

• 27:54Jason Calacanis?

  Just construct a better test, maybe also use some of the other autopilots. Like I know Tesla for clicks, right? But why not use the Mustang or like my GMC or my Suburban has lane and adaptive cruise control. So there's like 20 systems for this. Why, why go Lumineer, who he's got a relationship with of some level, minor or major, who knows? And Tesla, why not try two different companies? Put, put three companies to work.

• 28:24Speaker 01

  I mean Tesla for clicks is the answer.

• 28:27Speaker 03

  That was my point with the Jeep point is that people are very vociferously pro or con with Tesla and at the point of Frigen yields attention and he's on YouTube, which gets paid by the view.

• 28:38Jason Calacanis?

  Yeah. So, you know. Did you, did you pull up the five year chart? Check this out.

• 28:43Speaker 03

  I didn't, I didn't. I put it up, I'll put it up again.

• 28:45Jason Calacanis?

  This is the. Just so you and I can talk about that. Like the five year chart is just for Lumineer where the all type chart I think was good enough.

• 28:54Speaker 03

  This is the five year here and Jason, whenever I see a company that was trading above $500 a share historically and is now at seven, I'm presuming that there was a stock split or reverse split involved here, but the company's value now is under a quarter billion dollars. So it's essentially kind of a large AI series A market cap, not much.

• 29:11Jason Calacanis?

  Crazy. And then this video came out, I think last week, was it? So in five days since then, it's up 40, 38% in the last five days. So this has had a massive impact on the company. Again, back to appearances of impropriety, being impropriety in people's minds. So bad construction of the test, faked results or manipulated results, not understanding the technology, plus the stock bump, looks really bad for him. He's got to do a better job, simply solved. Use this energy to make a better test and you'll get 10 times as many views on the next one.

• 29:46Speaker 01

  That's, I mean, that's the real, like you could easily flip this into a win by doing the test again, the right way. Cause that's another blockbuster hit video. Like he's going to clean up when he posts that.

• 29:59Jason Calacanis?

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• 30:40Jason Calacanis?

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• 31:22Jason Calacanis?

  And just so you know, I don't own either of these stocks directly. I mean, I probably own Tesla index funds as Alex might.

• 31:29Speaker 03

  I definitely do. My index funds are full of the S and P 500.

• 31:32Speaker 01

  I own a little bit through my mutual funds or whatever.

• 31:35Jason Calacanis?

  Yeah, exactly. So everybody who's got a mutual fund or a retirement account, has some exposure to Tesla, not Luminaire, but who cares? Yeah. And just so people know, I don't trade specifically in Elon stocks because of my friendship with him. People will assume things that they shouldn't. So I have exposure just, you know, through.

• 31:55Speaker 01

  There. Oh, are you not in SpaceX either? I just assumed you were a little.

• 31:59Jason Calacanis?

  No, I literally, when he started those companies, I probably could have been, but I wasn't an investor at that time. And then since then, I have other opportunities to invest. So if I buy shares in those type of companies, then people are going to say, oh, conflict of interest. Anytime I talk about it here or on All In, people are just going to, you know, try to put it together. I do own the first model asset ever created. I do own the 16th Roadster. So I'm a big investor in buying the cars for sure. Uh, but I, I don't trade and I also don't like day trade all that much. I buy and hold, generally speaking.

• 32:33Speaker 01

  Did you buy all of Sacks's crypto when he had to divest?

• 32:36Jason Calacanis?

  No, but he, as I said, he, on the All In podcast where he came on, he was, has been an LP in my firm, in my venture funds, you know, not major. I think like it was a small amount, but he was up like seven, eight, nine X in our first fund. Cause he didn't sell the Robinhood shares that had been distributed. And so he had to, because I think two of my companies from our first fund pivoted into crypto. People know I'm not a crypto investor. He still, uh, sold his GP interest, his LP interest in my first fund to somebody else. So I haven't, you know, and he called me long before his announcement and said, hey, listen, it's not personal. I just have to sell these to another person. And he lost money on it. He sold it at discount or he will eventually lose money on it.

• 33:20Jason Calacanis?

  Um, and that person who bought it, who bought it at discount will get that, you know, gain that he gave up. So, all right, next story.

• 33:25Speaker 03

  I want to talk about Wiz. Ladies and gentlemen, we have the first absolute mega deal of the year. Jason, $32 billion from Big Search, all cash. This deal is absolute gold. And what's really fun is the sheer number of venture capitalists that are about to walk away with an enormous pile of money. We have talked about the liquidity crisis on this show every seven minutes, Jason, for the last year, give or take. So I want to say that I think this deal is going to save a lot of people some heartburn. So going back in time, Sequoia, Insight Index, Cyberstarts, Circa Partners, and then later on, Blackstone, G Squared, Thrive, Wellington. They put a lot of money in this company and they cleaned up.

• 34:05Jason Calacanis?

  Now, they were. Wiz, we had talked about previously that there was an acquisition they had walked away from last year, and then there was possibility of them going public. Um, but here we are. This will be like a major test, I think, for this administration. Will they try and block it, etc. There are no fans of Google. Uh, you've heard Trump say over and over again, he's not a fan of Google because of the woke stuff and the AI products or YouTube subverting some speech at times, which, you know, they labeled stuff. And yes, they did on the margins, you know, though they explicitly banned, uh, Trump from YouTube and Twitter and Facebook. So he had some beef there, but I think they'll let it go through. And I think this will be, this is the starter's pistol for M and A.

• 34:49Jason Calacanis?

  If this deal goes through, now anything under 32 billion is gonna get done. That's my prediction. So anybody who's got a company under 32 billion is now looking at it saying like, hey, you let them buy that for 32 billion. We want to sell this asset for 10 billion, 15 billion, or maybe even 50 or 75 because that's not that much more than 32. So the Figma deal, maybe the Figma deal, which obviously got stopped by the UK, but

• 35:17Speaker 03

  Yeah.

• 35:18Jason Calacanis?

  Uh, you know, maybe it's time for the Figma deal to go through or they'll IPO.

• 35:22Speaker 03

  Hey, Jason, if Figma wants to buy what's left of Adobe, I'm not opposed to it. The other way around, I'll be a little bit sad, but you actually raise a really good point. This is not an idle regulatory moment. The, the FT, who actually broke the news that the deal's about to land before it did, said that the first deal, a $23 billion transaction last year that didn't consummate, was aborted in part because, quote, "Directors and investors became worried about antitrust hurdles." Now this year, two things happened. One, yes, Trump administration, expectations of easier M and A transactions for sure. And Google upped the breakup fee to $3.2 billion. So if this fails, Wiz gets funded through IPO. If it goes through, then Google's happy.

• 36:05Jason Calacanis?

  So I mean, it's And that 3.2 billion breakup fee, is that an investment in the company? Or is it, um?

• 36:14Jason Calacanis?

  Just a fee that they get free and clear.

• 36:17Speaker 03

  My, so making a point by analogy, Jason, I think the breakup fee that uh Figma got from Adobe was a billion and I believe it was just straight cash. So my guess here would be that it's just literally money, not a deal.

• 36:29Jason Calacanis?

  Sometimes it's constructed as an investment. Uh when we saw Weblogs Inc., they wanted us to pause a lot of what we're doing to do this deal. And so we negotiated, I think it was $500,000 in like repayments, so like 250, 125, 125 at each milestone that the deal hit. So if it took, when it hit the 60, 30 day, 60 day, 90 day, or whatever was constructed, they had to pay it. We hit the first milestone. We sent them an invoice, but what I told them was, hey, the breakup fee will be advertising on the all, on the Weblogs Inc. network. So you, it won't be for zero. And they were like, okay, fine. And I literally sent them the invoice and the person in the deal group was like, are you serious?

• 37:11Jason Calacanis?

  We're about to close. And I was like, about to? Okay, but it's the 30th day. I made them pay it. Um, and then I think like the president of the company was like, uh, Jake, can we give a seven day extension on that? It's like literally this guy's about to make me a millionaire and I gave them a seven day extension. But I knew that if I get, I let, I, I knew that if I let the like mid-level deal guy get that, it would have been a sign of weakness.

• 37:39Speaker 01

  I'm, I'm reading the Reuters article right now. I do not think it is an investment. I think Wiz keeps this money free and clear. Uh, it's just a, it's just a payment payable to Wiz if the deal falls through.

• 37:52Speaker 03

  Amazing. Uh, I ran the math though, Jason, just for fun. Uh, you had me do IRR calculations using ChatGPT a while back and now it's become a habit of mine. So, uh, $32 billion all cash deal, very simple. If you go back in time to just the series E, this was raised at a $12 billion post-money valuation last May. The investors who put money into that round had an IRR of 224%. And if you go all the way back to the series B, that was in March of 21, 1.7 billion post, at a $32 billion exit, 108% IRR over a four-year period.

• 38:24Jason Calacanis?

  Which basically means you doubled your money every year.

• 38:27Speaker 03

  That's insane.

• 38:28Jason Calacanis?

  100% return every year. That's.

• 38:30Speaker 01

  It's a good deal.

• 38:31Jason Calacanis?

  It's the power law. Uh, we had Sebastian from the book, The Power Law on this program. You can look it up. The power law for every one of these outliers you have as an investor, you have 99. And this actually probably represents for most investors, one in a thousand. This is like a real extreme case. Whoever did the seed round, those are the people who I want to calculate. They probably got a thousand X return and then their IRR was bonkers. Okay. Let's keep moving through the docket. Congratulations to them and hopefully this is the start of a vibrant M and A market for the United States, which will keep us competitive because all that money goes back to LPs. Those LPs are Harvard, Yale, the Ford Foundation, CalPERS, people's retirement account, and on the margin,

• 39:15Jason Calacanis?

  some other country sovereign wealth funds perhaps, and on the margins, high net worth individuals. But the bulk of that money, probably 80% of it are the institutions like the Ford Foundation, like the Rockefeller, this, this, that, the other one. You know, CalPERS, people's retirement, that money actually goes in large part to noble causes. And you can look up what the Ford Foundation does. You can look up what Memorial Sloan Kettering does, like MSK, they're a major LP in a lot of these funds. So that's going to go to cancer research. I know that maybe I sound like corny. It's actually the truth. You can look it up. 80% of the LPs in these funds are noble nonprofits with endowments. You can, maybe you don't like some of them, but

• 40:00Jason Calacanis?

  it's going to go to good things. And that's why you want to have what we call monetary velocity, right? You want the money to be flowing. Because when the money flows, you have to pay tax on it. So if money just sits, it just stagnates. People take loans against it. They don't pay taxes. Here, this will be distributions. When you get these distributions, now the nonprofits don't have to pay. So that's the big secret. Because they're a nonprofit, right? Harvard is a nonprofit. But all the other people, the GPs, the employees, the LPs, they're all, the LPs who are not nonprofits, they're all going to pay taxes on this. That's a great thing for society. So we want to see M and A. It's in everybody's best interest to see a lot of M and A. The only exception being if companies corner a market.

• 40:46Jason Calacanis?

  And then raise prices.

• 40:48Speaker 01

  Right.

• 40:48Jason Calacanis?

  I dare you to find me an example of that in modern history. It doesn't happen anymore.

• 40:54Speaker 01

  Well, there are some examples of that, but I think a good point here is that.

• 40:57Jason Calacanis?

  Give me one, give me one in modern history. What I, I, I put those conditions on it because in the age of technology, Lon, the idea that you can corner a market is very, very hard. The last time this happened, when people had a, a market cornered would be like the telcos, right? Baby bells that got broken up. We really haven't seen a market get cornered. You might say e-commerce, right? Like Amazon? If you look at Amazon as a percentage of commerce in the United States, it is low, single digits of overall. If you look at e-commerce, it's like medium double digits. It's not like you would think, oh, Amazon ran away with it. People still order from, you know, Walmart and Target and they shop in specific vendors and they use Shopify stores.

• 41:41Jason Calacanis?

  So give me but one, anybody in the comments, any, you know, uh, after we publish this or anybody in the chat rooms while we're recording this live, tell me the last time M and A caused a market to get cornered.

• 41:56Jason Calacanis?

  Anyone?

• 41:59Speaker 01

  Feel free, Lon.

• 42:00Jason Calacanis?

  I just say it hasn't happened in modern history. That's the crazy thing. And then give me an example of price stuff. You, you can all go into chat, GPT and ask.

• 42:08Speaker 01

  They put on the, the total spot like this. Like, I don't have a great immediate answer, but I, I mean, come on, couple like, like, what about, well, yeah, what about all like the supermarkets? Like there's only like two or three supermarket companies and like they, they, they can set whatever prices they want. There's definitely price rigging going on in those companies. Or what about, what about beer? Like big Anheuser-Busch and InBev and all those companies buy up all the craft breweries.

• 42:32Jason Calacanis?

  So you make up a great point. You make up a great point here, which is, does price gouging occur? Price gouging can occur at times in markets. What we're talking about here is price gouging caused by M and A activity. Now, in the beer market, maybe that's one. When I ask this question to people who are in the industry, right? And you say, hey, who has done price gouging after doing an M and A deal? Right? They did M and A in order to raise prices. Nobody can give me a modern day example.

• 43:04Speaker 03

  I have two ideas, Jason. Do you want me to throw them out just for discussion?

• 43:07Jason Calacanis?

  Yeah, sure, sure, sure.

• 43:09Speaker 03

  So I was just thinking about how in geographic terms broadband access is often controlled by one company and people therefore don't have the ability to kind of price shop. Now, you can argue that Starlink is changing that and fair enough. But historically, you know, when I was in San Francisco, I think I had had to get Comcast. I think that was the way it was set up. And so that was kind of crappy. I had to just take the price that was offered to me. Now, I know there's nuance to that. And then I would say in the realm of social media advertising, I think probably Facebook buying Instagram did lead to some consolidation and therefore probably some price.

• 43:41Jason Calacanis?

  Perfect. Let's pause on those two. So when you look at advertising, there is a duopoly, Google and Meta. That duopoly for online advertising has gotten most of the gains historically. And that's a, that's a perfect example. Meta consolidated Instagram and Google consolidated YouTube and DoubleClick. If you look at those, they don't have pricing power because they're, they're auctions, basically. So because they're auctions, they actually have not been able to price fix. So that would be their defense to it. So then you have to ask yourself, you know, what percentage do they each have? Combined of online advertising, they're in the 80% range.

• 44:25Jason Calacanis?

  And you, you'll probably look it up. But that's a duopoly. So because there's two of them and then a long tail for the other 20% or so, and my statistics might be a couple of years old here, you have new entrants come in. Amazon, as we've talked about here, Uber, DoorDash, Instacart, all becoming places where people do advertising. So let's, let's put a pit in this for now. It's an interesting discussion because what I'd like to do is always deal in facts here and question like, our gut reaction to things. And I think this is. You know, Lon, you're instinctual like, aren't they doing this still? I think that the important part is to actually deal in the facts there.

• 45:05Jason Calacanis?

  It is, have any of the recent mergers that we've had resulted in market dominance? That resulted in price gouging, right? That's what we need to know. And when did those occur? Because we are living in a, in a belief system that these big companies are merging and then they're raising prices. But technology is deflationary. What typically happens when these things merge is you lower prices, you, and you increase volume. Amazon is such an amazing deal, right? And even in travel, when they consolidated all these travel vendors, the, the response to that was United and different hotel chains, building really great apps and going direct.

• 45:48Jason Calacanis?

  And then Airbnb and VRBO challenging them. The disruptive nature of markets now because of technology makes it very hard to lock in a monopoly.

• 45:58Speaker 01

  Yes.

• 45:58Jason Calacanis?

  Abuse the power.

• 45:59Speaker 01

  I mean, I think the one, the one pin I'd like to put in it in terms of Google whiz is that in this particular case, it's hard to make the argument that there are real antitrust concerns because Google's only in third place among the big cloud providers. Like there are, they're behind Microsoft, they're behind Amazon. So this is helping them to be competitive, not helping them to corner a market. They don't control this market.

• 46:25Jason Calacanis?

  Right. And you just pointed out, if you look at cloud computing, there are four major players actually, because Oracle's a major player now. So you have four major players, none of them have over 30 or 40. I think the lead is probably 35% for AWS or 40, somewhere in that range. So proving my point yet again, we have yet to see a consolidation getting to, and consolidation really takes getting to 80, 90% of a market in order to have the pricing power to, you know, distort the market and price gouge. So let's, as a challenge to the audience and to YouTube, find me the worst example of price gouging.

• 47:05Jason Calacanis?

  That M and A enabled because that's what we're talking about here. It has to be price gouging enabled by M and A.

• 47:12Speaker 03

  Can I, I want to make a, I'm not going to make this point. I'm going to quote the current DOJ because we're talking about the Department of Justice approving the, the Wiz deal. Here is from the HPE, June of Pursuit from January of this year. This is a Trump administration DOJ argument against a corporate combination. From the perspective of competition and prices. And I bring it up because they're not discussing price gouging, but discussing a cessation of competitive discounting. And it's slightly different, but roll with me here. Here's what the government said. Frontline sales executives regularly seek deep discounts to win or retain business. HPE contemplated price reductions for software and hardware products to avoid being undercut.

• 47:52Speaker 03

  Defendants merger, if consummated, would eliminate head to head competition that has lower prices and would decrease pressure on HPE to discount and innovate. So that is the government's take on what these deals can do to be anti-competitive, not taking a position on that. That's the current logic from the administration.

• 48:07Speaker 01

  I asked ChatGPT, do you want to hear what ChatGPT think?

• 48:11Jason Calacanis?

  I mean, sure.

• 48:12Speaker 01

  They named a bunch of different pharmaceutical companies. Martin Shkreli's Turing Pharmaceuticals raising the price of Daraprim after a merger. The EpiPen price hike in 2007. Valant Pharmaceuticals acquired many smaller drug companies and then raised prices by over 3,000%. Botox, AbV required Allergan in a $63 billion merger.

• 48:36Jason Calacanis?

  Hold on a second though, aren't those because they have a patent? Not because, so they, because of patents, they don't actually have a competitor. So that's different.

• 48:47Speaker 01

  Well, they're, they're buying their competitors like Botox, the, the company that makes Botox bought the company that makes competitor Humira. And then raised, and then raised prices.

• 48:57Jason Calacanis?

  Okay, that would be a legit one.

• 48:58Speaker 01

  And then they also mentioned AT&T and Time Warner. AT&T acquired Time Warner for 85 billion shortly after the merger. DirecTV and HBO subscription prices increases as did cable bundle fees. Finally, they also mentioned Ticketmaster and Live Nation as our commentators.

• 49:14Jason Calacanis?

  All right, here we go.

• 49:14Speaker 03

  That's valid.

• 49:14Jason Calacanis?

  Getting spicy today, getting spicy.

• 49:16Speaker 03

  All that's valid, but I don't think actually undercuts the point that I think matters most, which is that technology in general is deflationary. We're referring in those cases mostly to things that are predicated on IP, which is a little bit different.

• 49:27Jason Calacanis?

  Yes.

• 49:27Speaker 03

  Patent IP, okay. We only have time for one more thing and I'm gonna throw this, I'm gonna throw this in a bone here today. I'm gonna throw him a bone.

• 49:33Jason Calacanis?

  Okay, what are my choices? What are my choices?

• 49:35Speaker 03

  Let's talk about XRP.

• 49:37Jason Calacanis?

  Oh, yeah, this is an interesting one. I have been very, you know, I basically said like the XRP is such a centralized company. You know, the Howie test is pretty clear on this one. We can pull up the four parts of the Howie test. You know, if you allow XRP to operate as like something other than a security and they don't have to follow securities law, then well, anybody can go and launch a token for their company. And why would you actually do anything else? So let's start with explaining to the audience what's happened.

• 50:14Speaker 03

  All right, so the news here is that after a four year period, the SEC, according to Ripple Labs, is dropping their suit against the company and some of its executives. This was a bombshell suit when it landed and Ripple and the XRP team have been very much opposed to it. They've called it lawfare, unfair use of the government power to essentially suppress the crypto market. Jason, the context here more recently is that we've seen the SEC drop a number of suits against companies like Coinbase, et cetera. So this is part and parcel of a cessation of regulatory hostility towards players in the crypto space. The difference between this suit and criticism of cryptocurrencies like Bitcoin, et cetera, is the point of centralization.

• 50:58Speaker 03

  The history of XRP Ledger or XRPL and Ripple is a little complicated, but essentially Ripple got a whole lot of the tokens that are on the XRP blockchain. And therefore, Jason, you've argued that it's centrally controlled and therefore should be considered a security. Now it is not. And my read of this plain text is that now Katie bar the door. Everyone can launch a token centrally controlled or not. If it's not a security, then why wouldn't you go play?

• 51:24Jason Calacanis?

  Just because they dropped the case doesn't mean that they didn't break securities law. So I just want to put that out there to begin. They did, you know, donate $5 million to Trump's inauguration campaign. I believe that was the largest single donation was XRP's donation. And then suddenly, here we go. The case is dropped. So that looks terrible. It has the appearance of impropriety that they paid to get this shut down. But what people have to understand is SEC raised $1 billion selling XRP. That money went to the company. The company then claims to have all this technology. It is an incorporated company, but they couldn't.

• 52:05Jason Calacanis?

  What the, the first part of the case they lost was that the company was not found guilty in the first case, and this is slightly technical, of an exchange trading the XRP. Cause what they found was you couldn't tie an exchange, let's say Coinbase, and you, the three of us trading XRP between each other. Well, XRP was not selling it to us, right? It was just us selling them between us. So how could they be guilty of anything? So that would be like me, starting a company. Hey, this company's called Airbnb. It's got a billion shares or a dollar each. And I put that out into the world and I make money selling it the first time. And then you all start trading it back and forth.

• 52:48Jason Calacanis?

  I'm not, I made it the first time when I sold it because it was centralized and you all then started trading it back and forth because you saw value in it and you implied some value to it. So this is like, this case proves perfectly why crypto is slightly different than securities. The securities that you would own in a company would be in a cap table somewhere and it would be recorded and the transactions would have to be approved. So it would be, you know, more centralized, but this was centralized in itself. And what they found was they did actually sell it. The thing that they were still going, the part that's been dropped is the second piece,

• 53:29Jason Calacanis?

  which is they were selling to accredited investors without filing with the SEC. So when you issue shares to a company, you have to tell the SEC. That's how we keep people from launching companies without any regulations. So they weren't able to prove that consumers bought this stuff, but they worry, they did have a case and that's the piece that got dropped is the second piece. Now, XRP is coming out or Ripple is coming out the company and saying like, hey, we've been proven correct. Not exactly, but what this does mean is I guess I could launch tomorrow a billion J coins and say, I'm going to go invest in startups and this coin is going to be used

• 54:13Jason Calacanis?

  by startups to trade some value in the world. I take the billion dollars and I don't know what I can do with it, but I tweeted to Sacks today, you know, David Sacks 47 in his official capacity, like, what are the rules of the road here? Because just because this case is off, doesn't mean that it's legal for startups to go do that. And that's the gray area we're in now. It was too cold when Gensler was running this. He wouldn't give people a path to do what I've described. And now they're not giving a path to making it legal. So it's maybe too hot. So is everybody going to just launch a crypto offering tomorrow now that this has been dropped?

• 54:57Speaker 03

  Amazing, Jason, is that we've done this before. Do you recall the 2017 ICO boom? I do. That was a wild time period. That was insane.

• 55:07Jason Calacanis?

  People lost money, a lot of people got in trouble with the SEC. So this is now becoming the Wild West. I think they got to get their hands around this. The same thing happened with the Trump coin, which was obviously a grift. And then the SEC responded to that and they made rules around it.

• 55:21Speaker 03

  Specifically.

• 55:22Jason Calacanis?

  Coming out specifically saying like, I don't like the way they're doing this. This is too hot. Gensler was too cold. They need to get ahead of this is my belief. I'm not in the administration. My friend is the crypto czar. He's not the head of the SEC. There's a new head of the SEC. Why not put these projects into a new class? And this is what I suspect, and I don't have inside information, that the SEC and Sacks, Sacks will advise and the SEC and other people will execute, which is how about a sandbox for crypto? And the sandbox is you can be of a certain size. You can sell to certain people. You have to know your customer. You have to have insurance. You have to have a board.

• 56:04Jason Calacanis?

  You have to have some oversight and you could sell up to 10 million coins with $10 million in insurance for lawsuits, whatever losses, and you have to have a board and you have to have accounting. In other words, some version of securities law applied to crypto, but not so much that you can't do creative things like burn tokens and use them for utility or trade them very quickly, et cetera.

• 56:29Speaker 01

  I really like the idea of an insurance version, like making companies upfront, put money aside in case they rug pull people and need to pay off lawsuits, like that would go a long way towards making it less appealing to rug pull people because right now it's just like, if you could figure out how to do it, there's no downside.

• 56:48Jason Calacanis?

  Maybe you have to list on the blockchain who each beneficial owner is. Each of those beneficial owners has to have their name or their company associated with it and the director of that company. Because when you buy into say like Trump coin or Malay coin, do you know who those insiders are? I think the Trump coin actually to their credit, I hate to give too much credit here because I do think it was like horrible, terrible grift that took advantage of the goodwill of the crypto community and the goodwill of his constituents. But they did put in it that this has no monetary value that there are insiders, like literally their terms of service was written to be like, you can't, and it even said in there, you can't join a class action suit.

• 57:31Jason Calacanis?

  Or if you do join a class action suit, you have to let us know within the first 30 days. They really wrote a bulletproof proof terms of service there, which I'll give them some credit for. Making people walk through that and sign off on each piece in plain English, like, you know, you ever sign a document for buying a home or buying a car, you have to initial like 30 different things. There's a reason why they have you initial those and they write them in plain English. It's because they know that you could get screwed.

• 57:57Speaker 03

  Yeah. So what I pulled up, yeah, pulled up here, this is the kind of poker economics, if you will, from the Trump coin. Now, what this document says is terrifying because it's so centrally controlled. But at least they broke it down for you. So you know how you're getting screwed. It's like if Jason wanted to loan me a hundred bucks and he said, sign here, it's 10,000% interest per minute. And I signed it, not a great deal, but at least I was informed of what I was getting into.

• 58:21Speaker 01

  They could get away with this on Trump coin that you couldn't with other crypto projects. Cause other crypto projects, people are actually reading the terms, they're investing in the coin. In this one, it's Trump fans, they just love Trump and they want to support Trump. They're not really into the coin economics. And so they're probably skipping a lot of.

• 58:39Jason Calacanis?

  Which means like, again, and I hate to give too much credit here, but using the analogy of it's a, um, it's a, it's a, what did, what did Sacks call it?

• 58:50Speaker 01

  It's like a collective, a collectible coin.

• 58:53Jason Calacanis?

  It does have a flavor of that to certain individuals. Certain individuals are buying it to support him and as memorabilia, other ones are buying it because they want to gamble. Other people are buying it because they're probably confused and think it's kind of like Bitcoin. So there's, I think Pete, there's different groups of suckers at this poker table, just like a regular poker table. You might have pros, you might have criminals colluding, you might have semi pros and you might have drunk people who don't know how to play, where you might have drunk people who do know how to play. And then people who are playing poker for the first time and don't know if a flush or a straight is better. You got a lot of people at the table, they got to clarify this. Just follow my advice, folks.

• 59:33Jason Calacanis?

  Have a very simple rule set for crypto projects and keep them under a certain size offering. Maybe you can offer 10 million for the first year, 25 million the next year, 100 million the next year. So it's kind of staged. What that would do is the good actors would be like, yeah, that's great. I don't need to like make some quick hit and run and I don't mind being incorporated. I don't mind having these rules. And then you, you put onshore the good actors and you push offshore the bad actors. Then you have a license, you know, like a driver's license, not a license. Like a brokerage license, but it's a driver's license or a hair cutting license. Well, you can say, hey, this is an offshore account. Are you sure you want to buy something in the BVI or in Venezuela? Like, you think that's a good idea to buy the North Korean based coin? Okay.

• 1:00:18Jason Calacanis?

  Or do you think you should buy the US based ones that are in this area?

• 1:00:21Speaker 01

  It's like a little clippy that pops up like, are you sure you want to buy this meme coin?

• 1:00:26Jason Calacanis?

  Yes. All right.

• 1:00:27Speaker 03

  If you need the clip.

• 1:00:28Jason Calacanis?

  That's my thought on it. Of course, Brad Lars, Brad Garland House is going out. Chris Larson's the guy. Brad Garland House is dunking on everybody and saying like, oh my God, we told you it's lawfare pandering to Trump. Cause Trump experienced lawfare is going to be their claim. We were just like that. No, I think what you did was you skirted securities law. And at the same time, yeah, you, the, the system wasn't clear, but man, that if you can let people sell a billion dollars in a centralized token and there's no ramifications, this could cause chaos in markets, folks.

• 1:01:01Speaker 03

  So here's the thing though, and I know we got to wrap it. I'll just say this. Crypto folks have been saying less regulation, make US the crypto capital of the world. We're being held back. We're being suppressed. Okay. Here is a playing field so open that even our resident venture capitalists are saying, hey, maybe we need a couple of rules here. So this should be the absolute blank slate that should allow for a Cambrai explosion of awesome crypto projects that will change my life. I'm ready. Show me.

• 1:01:31Jason Calacanis?

  There have been none. I mean, tell me what XR, who's using XRP? Brad Garland House.

• 1:01:36Speaker 01

  This always, this is always, I think, on one level, crypto is just like the world's favorite Ponzi scheme of the moment. Like on one, I'm not saying it's, it's only useful for that, but it does, a lot of these coins end up feeling like it's just about who gets, who's, who's the last in the musical chairs, who gets, who gets left without a chair.

• 1:01:55Jason Calacanis?

  Yeah. The greater fool theory. All right, everybody's been another amazing, tankerous contentious. Uh, episode, let's see if we maybe leave a little spice in line in the post edit. But uh, clean it up a little bit so people can follow it. Yeah. I think it's pretty good to have a little spicy spice in there. Uh, we'll see you.

• 1:02:10Speaker 01

  A little spicy.

• 1:02:11Jason Calacanis?

  Yes. Uh, I don't know what that dish is, but yeah. There's some, I think general so's is like sweet and then they sometimes put chili peppers in it.

• 1:02:19Speaker 01

  That's always a good, that's always a good.

• 1:02:19Speaker 03

  Someone said on YouTube that I'm now the show's mom.

• 1:02:22Jason Calacanis?

  Oh, coming in trying to Keeping this separately. There we go. All right, he's at Lon's, at Alex, at Jason. Go ahead and just tell us your opinion. And let's on Friday, let's talk on Friday to see if we can find some specific examples of an M and A transaction resulting in abuse in terms of pricing and consumers being harmed. So M and A leading to consumer harm, like actual case of that. I want to just go through it intact specifically and media. We know obviously that, yeah, sometimes the drug companies do crazy stuff. Okay, we'll see you all next time. Bye bye.