Elon gets paid, Apple's AI pop, OpenAI revenue rip, Macro debate & Inside Trump Fundraiser

(0:00) Bestie intros: bringing up the energy! (8:48) Trump fundraiser recap (23:16) Elon's comp package approved by shareholders (40:12) Apple announces "Apple Intelligence" and ChatGPT deal at WWDC (50:17) OpenAI reportedly hits a $3.4B revenue run rate (1:05:26) Macro debate: State of the US economy? Follow Tim Naki: https://www.instagram.com/tim.naki Follow the besties: https://twitter.com/chamath https://twitter.com/Jason https://twitter.com/DavidSacks https://twitter.com/friedberg Follow on X: https://twitter.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@all_in_tok Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://www.instagram.com/tim.naki https://x.com/eoghan/status/1799161733766062545 https://x.com/bennyjohnson/status/1800979079472288145 https://x.com/bennyjohnson/status/1797086962626494840 https://x.com/elonmusk/status/1801084780035154058 https://x.com/jhall/status/1795794521604718814 https://fortune.com/2024/06/10/elon-musk-pay-package-tesla-lawyers-delaware-chancery-payout-stock-award-56-billion https://companiesmarketcap.com https://www.youtube.com/watch?v=RXeOiIDNNek https://x.com/chiefaioffice/status/1801022115426009309 https://trends.google.com/trends/explore?geo=US&q=%2Fg%2F11khcfz0y2&hl=en https://trends.google.com/trends/explore?geo=US&q=%2Fg%2F11khcfz0y2&hl=en https://trends.google.com/trends/explore?q=%2Fg%2F11khcfz0y2&hl=en https://trends.google.com/trends/explore?q=%2Fg%2F11khcfz0y2&hl=en https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm https://fred.stlouisfed.org/series/FEDFUNDS https://www.jpmorgan.com/insights/outlook/economic-outlook/jobs-report-may-2024 https://fred.stlouisfed.org/series/CES0500000003 https://www.warren.senate.gov/imo/media/doc/2024.06.10%20Letter%20to%20Fed.%20re%20interest%20rates.pdf https://www.cnbc.com/2024/06/07/jobs-report-may-2024-us-job-gains-totaled-272000-in-may.html https://fred.stlouisfed.org/series/JTSJOL https://x.com/VinnyLingham/status/1801129023168454907 https://www.reddit.com/r/wallstreetbets/comments/1aw5bbb/world_economy_on_nvidias_shoulders https://www.instagram.com/stocktradingmemes/p/C3qer-sSfb0/?img_index=1 https://x.com/jameslavish/status/1801248976911634648 https://x.com/peterfenton/status/1801300735520608529

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

• 0:00Jason Calacanis?

  Nick, these guys are low energy today, you notice that? You know what we need to do? We need to gamble. Let's do it, Nick. Let's play a hand of blackjack. Let's get these guys amped.

• 0:08Speaker 01

  Gentlemen, what an absolute pleasure to walk amongst some goddamn greats. Let me see if I can put a bit of pip in your step with a one-time blackjack hand to kickstart one of the greatest podcasts on earth. It is, I can confirm this is not AI.

• 0:21Jason Calacanis?

  You did this?

• 0:22Speaker 01

  We're gonna rock and roll proper today.

• 0:24Jason Calacanis?

  Let's go.

• 0:25David Sacks?

  All right.

• 0:26Jason Calacanis?

  Get some action.

• 0:27David Friedberg?

  Is this guy, are you on right now?

• 0:28David Sacks?

  L F G.

• 0:29Speaker 01

  You are going, I'm actually breaking my own rules for you guys. I filmed today's hand, day 14, but I'm gonna film tomorrow's hand for you guys right now. It'll roll out.

• 0:40Jason Calacanis?

  Wait, Tim, sorry. Hold on, hold on. Wait a minute, Tim. You are a Kiwi living in Calgary, is that right?

• 0:48Speaker 01

  Yes, correct. Yep, Kiwi living in Calgary. Been here since September 2022, the Mrs. and I.

• 0:53Jason Calacanis?

  Oh, my God. This is awesome. Welcome, welcome to my country.

• 0:56David Friedberg?

  Welcome to the pod.

• 0:57Jason Calacanis?

  I don't live in Canada anymore, but.

• 0:58David Friedberg?

  I don't know how I stumbled across you somewhere and I started watching all your videos on Instagram. They were off the hook, man. Congrats. They're awesome.

• 1:07Speaker 01

  Thank you.

• 1:07David Friedberg?

  So much fun.

• 1:08Jason Calacanis?

  Where, where in New Zealand are you from?

• 1:10Speaker 01

  From Taranaki, so West Coast, North Island, certainly not somewhere. It's not a holiday destination for certain if you're going. It's like dairy farming country. It's, it's beautiful, but it's off the beaten path. So, yeah.

• 1:22Jason Calacanis?

  And how did you, how did you choose Calgary of all places in Canada?

• 1:25Speaker 01

  Do you know what the misses, we holidayed here, my fiance and I, May 2022. And we thought it was just gonna be a holiday, then back to the farm. But I guess we had that COVID cabin fever like the rest of the world and loved our time here so much that we just decided before we even finished the, uh, the holiday that we cracked on to get our visas and got back, sold up my livestock and leased the farm back to my parents and, and made the move. And we haven't looked back. I don't think they'll be seeing me pulling tits on the dairy farm anytime soon. I'll, that's colloquial for working, by the way. Yeah.

• 1:58Jason Calacanis?

  So lads, what do we want to do here? We want to put 10K and then give it to, uh, one of Tim's mates who's, who's stuck or something? How do we do this? We Mr. Beast this? We give 10K to the next time you get coffee if we win? And you give it to the barista or something? What should we do?

• 2:13Chamath Palihapitiya?

  Yeah, let's do it. Let's do it. Let's do a 10K free roll for Tim and his fans.

• 2:17Speaker 01

  Okay, perfect. So now do you want me to add that to my bet for this one?

• 2:21Jason Calacanis?

  Yes, absolutely. We want to be in a 10k sweat with you.

• 2:24Speaker 01

  One and done is absolutely the, uh, the way to go about this.

• 2:28Speaker 05

  There we go.

• 2:29Speaker 01

  First part we've got to do here is pick out.

• 2:31Jason Calacanis?

  Are these real dealers or are these AIs?

• 2:33Speaker 01

  No, these are, these definitely are real dealers. They're certainly Eastern European as far as I know. I don't know what their quality of life is like. I imagine their warehouse somewhere and put on the tools. Now I had a, I went with a, with a young lassie today and she [bleep] rolled bold and [bleep] me. So I'm going back to the bloke because they've been good to me.

• 2:50Jason Calacanis?

  Yeah, pick a bloke. Pick a bloke. Somebody who feels blue collar, who wants to work for us. We need somebody who's a worker and you have over a million followers now watching this craziness.

• 3:01Speaker 01

  15,000 to 1.3 million in this entire journey. So, uh, yeah, a little bit nonsensical, but.

• 3:07Jason Calacanis?

  Okay, this, this looks like a good, he looks like a worker.

• 3:09Speaker 05

  What do you think of this guy?

• 3:10Speaker 01

  He's gonna work for us. Are you gonna, you're gonna cop the insult live as I do it? Uh, alrighty. It is day 15, uh, going to blackjack committee. Once in three caller I've got. We have a $14,000 bit going on the line for me personally, but I actually have some absolute legends with me today. I'm bidding for the besties from the All In Podcast as well. They're gonna bring the luck, having been rolled bold and [bleep] by a young lassie yesterday. So $34,000 goes on the line. Oh, no, no, you guys want 10,000 on, right? Not 20? Jeez, I better not, uh, not take.

• 3:42Jason Calacanis?

  Yeah, put a star for 10. Put a star.

• 3:44Speaker 01

  24,000 is going on the line. Our dealer looks like the kind of bloke who stops at red lights playing GTA. We won't hold that again. Real knock, if you will. I need to see good cards. Jack and. 31.

• 4:06Speaker 05

  That's how we do it.

• 4:10Speaker 05

  That's how we do it.

• 4:13Speaker 01

  Oh my god.

• 4:14Speaker 05

  That's a worker bee. That's a worker bee. I knew he'd do it for us.

• 4:18Speaker 01

  I can't believe we've just pulled that off. Oh my god.

• 4:24Jason Calacanis?

  Did that, did that really happen?

• 4:25Speaker 01

  Gentlemen, that has really just happened. You've just turned 10 into 25. Holy shit.

• 4:30Jason Calacanis?

  Holy cow.

• 4:32Speaker 01

  Oh my god.

• 4:35Speaker 05

  Look at Sacks. It's like, we could do this for the whole taping.

• 4:38Jason Calacanis?

  That's amazing.

• 4:39David Friedberg?

  Sacks is ready for another round.

• 4:41David Sacks?

  We turned 10 to 25. Alright, so are we gonna have a separate all-in balance? We just keep rolling it every week?

• 4:47Jason Calacanis?

  Yeah, can you come back next week and can we put this out to him? We just keep rolling every week?

• 4:54Speaker 01

  We might have to. There is, I cannot believe we've just blackjacked. That is unbelievable.

• 5:01David Friedberg?

  Well, Tim, have a good day.

• 5:03Jason Calacanis?

  Alright, Tim, you are a legend. Everybody follow Tim on Instagram. Let's get him to 10 million. Let's get, I mean, you have a future in broadcasting. You are gonna make millions. You went from the farmhouse?

• 5:16Speaker 01

  Oh yeah, literally.

• 5:17Jason Calacanis?

  And here we go. Now you're gonna be running a casino. I think you should have Tim's Blackjack. You should have your own brand.

• 5:23Speaker 01

  Oh, I'd love to.

• 5:24Jason Calacanis?

  We could build a whole brand on this. Tim.naki on Insta.

• 5:27Speaker 01

  I tell you what, I wouldn't have to run anything if I can just play one hand of Blackjack with you guys and I land jack ace every week. That is unbelievable.

• 5:36Jason Calacanis?

  And like we said, that 15K we won. That's yours for you and the misses. Go on a great vacation. No, no, no, no. We said it. We said it. We want you to do something. Go with it. We're already cashed up. You take that 15K, you take the misses out, you get some first-class tickets, you meet Chamath in Italy, and then let's go. That's it. Come to the summit.

• 5:57Speaker 01

  How about I go first class to the All-in Summit? Now that, now there's a guy.

• 6:01Jason Calacanis?

  We could play some, oh, we could have a whole session.

• 6:04David Friedberg?

  We may or may not have a, have a fun casino night there, so this will be fun.

• 6:07Jason Calacanis?

  Yeah, you gotta come to All-in Summit, for sure. Yeah, get the misses, take the 15K, two first-class tickets, get yourself set up in a nice hotel, and we will see you there. Alright, everybody, let's get to the docket. Well done. Tim?

• 6:19David Friedberg?

  Thank you.

• 6:20Jason Calacanis?

  Tim, see you later.

• 6:21David Friedberg?

  I appreciate it guys. That was awesome.

• 6:23Jason Calacanis?

  I can't believe they have live dealers standing in a warehouse in front of a webcam.

• 6:28Chamath Palihapitiya?

  I don't.

• 6:28Jason Calacanis?

  That, that is such a, like, imagine walking into that facility.

• 6:32Chamath Palihapitiya?

  You're surprised that facility only has, what, dealers?

• 6:35David Sacks?

  That's like only fans or gambling.

• 6:37Jason Calacanis?

  There's a lot of webcams there. I think you can choose at the door what you want to do.

• 6:41Chamath Palihapitiya?

  Deal blackjack.

• 6:43David Friedberg?

  Or whatever else you want to.

• 6:44Jason Calacanis?

  Whatever else you want to be on a webcam.

• 6:45David Friedberg?

  Yeah, we got what you be doing.

• 6:46David Sacks?

  The dealer's probably making a porno in the next room.

• 6:50Jason Calacanis?

  Above the table and below the table. There's two different tapings occurring.

• 6:56Jason Calacanis?

  Oh my god.

• 7:00Jason Calacanis?

  Well, it's rough.

• 7:01David Friedberg?

  That was so awesome. So what happened? You DM'd him? That was so good.

• 7:05Jason Calacanis?

  Yeah, we, he, you know what? No, what happened was somebody emailed me and they're like, hey, that's my mate that you talked about. He's a big fan of the show, it turns out.

• 7:12David Friedberg?

  Yeah.

• 7:12Jason Calacanis?

  You know, this is the thing about influencers now. This is the thing about this micro celebrity stuff. We all, we all know each other by default, right? So he was just slid into the DMs.

• 7:24Chamath Palihapitiya?

  There's definitely a camaraderie.

• 7:25David Friedberg?

  Yeah, that was awesome. That's awesome. I'm so glad he won.

• 7:28Jason Calacanis?

  And, uh, you know, he, he basically got smashed in his DMs, like a thousand people DM'd him, oh, you're on All In, they're bugging out to you on All In. And, uh, so yeah, I just said, hey, would you do a hand, would you do your live hand with us? And then I didn't, I didn't, I wanted to clear with you guys before I put our money on it or whatever, but I couldn't do that because I wanted to surprise you.

• 7:46David Friedberg?

  Yeah, that's great.

• 7:47Jason Calacanis?

  Here we are.

• 7:47David Friedberg?

  I did not think that was real when he popped up. I thought it was like a reporter thing.

• 7:50Chamath Palihapitiya?

  Yeah, all I could think of was, do I look like an ass by saying more? So that I just stay quiet?

• 7:59Jason Calacanis?

  More than 10K?

• 8:00Chamath Palihapitiya?

  I was like, well, you know, start with 50K, let's just see what happens.

• 8:03David Sacks?

  I know. You ever feel like when you like tiptoe into the bet with like a small amount, but you want to do more? And then you win and, and you feel like you actually lost money because if you had made a bigger bet, you would have made more.

• 8:14Chamath Palihapitiya?

  I lost 60K.

• 8:19Chamath Palihapitiya?

  I should have put fifty, I would have won seventy-five. Instead, we put ten, we won fifteen. I lost sixty.

• 8:27David Sacks?

  We made a J. K. outside.

• 8:28Chamath Palihapitiya?

  Yeah, yeah.

• 8:48Jason Calacanis?

  I don't know what's going on, anything going on in your life. Anybody been busy having some adventure, Sax? Seems like you were busy last week. Any anything to report from your side of the world?

• 9:00David Sacks?

  Well, should we take you take you guys behind the scenes of of a presidential fundraiser? I admit, I've never done one before, so it was it was a new experience for me. When you host a president, it's just a whole different level of preparation. The Secret Service was out like a week before. The president has an amazing advance team. They work out every detail. They make a map of your house. They really have to think through everything. The police shut down the street. It's really a very involved process.

• 9:27David Friedberg?

  By the way, I went to dinner in the city that night. And, you know, I was right by your house, so I drove up the street and they had everything blocked off on like three blocks on both streets, like on both sides of your house. But there were all these protesters like all throughout San Francisco, like pro-Trump people had driven in from all over NorCal must have been because these were not San Francisco natives. Supporters, yeah. And they came in with these like cars and the streets were blocked. It was a total zoo in the city for hours before and after your I actually stayed in the city that night. And I heard the people going nuts for hours afterwards. But it definitely like took over. It took over the city.

• 10:07David Sacks?

  Yeah, it was really interesting is that all week, the San Francisco publications had been trying to gin up protesters by writing about that, you know, the president's coming to town and protesters are going to show up. And in fact, there was almost no anti-Trump protesters. And then a huge number of pro-Trump demonstrators came out and they were waving flags and cheering along his motorcade as he was coming to the house. So the whole protest thing backfired.

• 10:32David Friedberg?

  Why do you think?

• 10:35Jason Calacanis?

  Anti-Trump protesters did not show up. What happened?

• 10:39David Sacks?

  I think there's just a big enthusiasm gap. I mean, I think that the pro-Trump people are very enthusiastic and the, let's call pro-Biden or anti-Trump people are just not very motivated right now.

• 10:50Jason Calacanis?

  So it's exhausting to be against Trump for eight years. Like, this has been exhausting. People are wiped out. I think they've exhausted folks.

• 10:57David Sacks?

  Uh huh. So anyway, so Owen McCabe, who's the founder of Intercom, he was there and I, I think this was actually a good summary because he said that he spoke with a bunch of people and none of them identified as Republican, all voted or donated Democrat in the past. That's true for me too. Now they're backing this guy for his policies on war, immigration, crypto and more. This election's referendum on those issues. So Owen, you know, came out, appreciate his support, but it's true. The campaign told us that they had more first time donors at this event than they've seen before. And that's because a lot of these people hadn't supported Republicans or hadn't supported Trump and they came out. So we have a few photos and videos here to take you behind the scenes.

• 11:38Jason Calacanis?

  Here we go.

• 11:38David Sacks?

  I think that might be interesting for people. So the first thing to say is that President Trump is extremely charming. He connects with people in like five seconds. I mean, he meets you and finds something interesting and or funny to say. And he's hilarious. I mean, when he spoke in the, the living room and he talked extemporaneously for an hour, he's speaking off the cuff. Every speech he gives is different. This is him coming into the living room. He had made just a few notes about topics he wanted to talk about on a piece of paper, but that was it. It was all completely extemporaneous. No teleprompter, obviously. And he's hilarious. I mean, people don't realize how entertaining he is.

• 12:21Jason Calacanis?

  What were some of the greatest hits? What did he hit on? Did he hit on low pressure from showers? Did he, what, what, what, because I know he's got like some things he hits on that are relatable. Was it all like? Specific crypto topics, tech topics? Or did he go off?

• 12:36David Sacks?

  Well, he did, you know, he did talk crypto. And it was really interesting. At one point in his speech, he called on the Winklevoss brothers who were there. And I'm only mentioning this because it was already reported that they were there. So I don't want to speak out of school, but he said to them, he says, I know you guys created Facebook. He was giving them credit for creating Facebook.

• 12:58Jason Calacanis?

  I know you actually created it.

• 12:59David Sacks?

  Yeah, but he said, but, but it's okay. I mean, you guys look like models. You were dealt a lot of cards, you know, a lot of cards.

• 13:07Jason Calacanis?

  I mean, they're very good looking, huge IQ. And I mean, look at him, great hair.

• 13:11David Sacks?

  Yeah. And so I thought, okay, wow, like he must know the Winklevoss brothers. He must have met them previously. And I found out this is the first time that he had ever met them. So think about the awareness that he has to know that they're in the audience, to see them, point them out, and then have this kind of hilarious routine with them. So he's someone who's very sharp, very on the ball, very funny. And then his energy level is incredible. So he had started his day at Mar-a-Lago at 3:30 AM Pacific time, 6:30 AM his time. Then he flew to Arizona, did a Trump rally in Arizona. Then he flew to San Francisco for our event. He spent four hours at our event. He could have left an hour earlier if he wanted to. Then he flew to LA for more events the next day there.

• 13:56David Sacks?

  So think about his day and his energy level was just amazing the whole time.

• 14:01Jason Calacanis?

  Chamath, your thoughts before this goes on for an hour?

• 14:05Chamath Palihapitiya?

  Yeah, I'll give you two observations.

• 14:10Chamath Palihapitiya?

  The first is that I think that there is a huge gap

• 14:15Chamath Palihapitiya?

  between how the media tries to portray Donald Trump and what he's like when you meet him in person. And that gap is really wide. And so I would say specifically to Democrats and independents, you really do need to sit in the room and feel what it's like. He, David, David is right. He is charismatic. He's intellectually sharp and he's funny. And when you put that together, he can engage an audience for a long time and be totally extemporaneous. The other thing I would say that is that he is very polite and he's kind in a way that was disarming and was not what I expected.

• 15:02Chamath Palihapitiya?

  And so I felt that I had misjudged him many years in the past. And so I was very glad that I had an opportunity to sit beside him and to actually interact with him one on one. It was really, really engaging. And so that's, that's more about the style. And then about the substance, what I would say is it was not just a pro America agenda, but it was, it's very clear that he was pro innovation. So he was really supportive of AI in the details that he talked about. He was very supportive of crypto in those details. And he's very much low regulation, low taxation.

• 15:45Chamath Palihapitiya?

  And so when you put that together, it does stand very much in contrast with what the alternative is. Um, and so I think that, um, both of those things are a reason why, even if you aren't willing to vote for him, I would encourage everybody to experience what it's like to hear him.

• 16:09Jason Calacanis?

  Friedberg, your thoughts on, uh?

• 16:11David Friedberg?

  I didn't go to this, I didn't go to the event. I don't know.

• 16:13Jason Calacanis?

  No, I know, just big picture. Our besties hosting this.

• 16:16David Friedberg?

  I want to know why, why Chamath didn't wear a tie. Everyone else is wearing a tie. You didn't want the tie?

• 16:21David Sacks?

  Chamath doesn't need a tie, he's a baller.

• 16:24Jason Calacanis?

  All right.

• 16:24David Sacks?

  Do you want to say what, what Trump said to you when he met Natalie?

• 16:27Chamath Palihapitiya?

  So it's us talking and he says, you guys are a really beautiful couple.

• 16:32Jason Calacanis?

  Uh oh.

• 16:33Chamath Palihapitiya?

  And, and I said, well, thank you. And then he turns to me and he goes, well, you must be really rich.

• 16:43Chamath Palihapitiya?

  And I started laughing out loud. Nat thought he was hilarious.

• 16:47Jason Calacanis?

  So because of the disparity in the looks between you and Nat is what he was sort of implying.

• 16:52David Friedberg?

  You guys sat next to him at dinner?

• 16:53David Sacks?

  Yeah.

• 16:54David Friedberg?

  And was that like an hour, just private conversation between the three of you?

• 16:58Chamath Palihapitiya?

  This is the other thing that he does. He actually sits there and he says, you know, folks, I'm happy to continue to talk about whatever you want me to, you feel free to ask me questions or feel free to just go around the room and just tell me what you think. And what would happen is people would say different things and then he would start asking questions of other people and the thing becomes almost like this round table discussion of topics from, we talked about Iran, we talked about foreign policy, we talked about.

• 17:23David Friedberg?

  Deficit and debt.

• 17:24David Sacks?

  Crypto, regulation, everything.

• 17:26David Friedberg?

  What did he say about, what did he say about deficit? What did he say about deficit and debt?

• 17:31Chamath Palihapitiya?

  Well, he's very much, he's very much on your side of, we have to really figure out how to get spending in order and get the deficit under control.

• 17:41David Friedberg?

  Well, congrats on a, it sounds like a successful event for you guys.

• 17:44Jason Calacanis?

  It sounds like you guys are in the halls of power now and Trump has flipped his positions on EVs, abortion, and taking away a woman's right to choose. He's flipped his position on TikTok and flipped his position on crypto. I give him a ton of credit. Four flips in a month and he just sweeps all those votes. It's pretty smart. And for the Democrats who are listening, you're losers and you're not listening to people. So you're going to lose the election and Biden's going to get demolished. Nobody wants to vote for somebody who they think is incognito.

• 18:18David Friedberg?

  Jake, how do you think Biden's getting demolished, right? That's your thought?

• 18:21Jason Calacanis?

  I mean, did you see the video that came out this week where he was at some event? And he looks, it looked like a Mitch McConnell moment, right? Where he was kind of frozen?

• 18:29David Friedberg?

  He was like stuck.

• 18:30Jason Calacanis?

  And so I don't want to make it like elder abuse. And I know, like, people have-

• 18:34Chamath Palihapitiya?

  It's not elder abuse to sit, to say, to be honest about what you're observing, especially when it comes to the-

• 18:40Jason Calacanis?

  No, no, I'm just saying, harking on it.

• 18:42Chamath Palihapitiya?

  The most powerful role in America.

• 18:43Jason Calacanis?

  Yeah, he's got to, he's got to bow out.

• 18:44David Friedberg?

  Five thirty-eight just put out their election forecast showing 51% chance of Biden winning, 48% chance of Trump winning as of two minutes ago.

• 18:56Jason Calacanis?

  Yeah, who knows? I think it's all going to be determined by the debates. Sax, you were going to say?

• 19:00David Sacks?

  Well, I just think what other job in America could Biden even be qualified for? Like, what would you hire him to do? Is there any, is there any mental job you would hire him to do? Is there any physical job you would hire him to do? Would you hire him to be your babysitter? I mean, I don't think there's any job in America that anybody would hire him to do, except for maybe president. It's kind of, kind of crazy.

• 19:21Jason Calacanis?

  And this is where, like, the Democratic Party is in shambles.

• 19:24David Sacks?

  We should have the highest standards for the mental acuity, sharpness and energy level of our president. It's the most demanding job in the world.

• 19:32Jason Calacanis?

  We need a cognitive test, but the Democrats need to just look deeply in the mirror and say, hey, you're fielding a candidate that nobody's going to vote for. That's the problem here. And there's not enough anti-Trump sentiment. And Trump's a genius at flipping his position to get huge swats of voters. And so you're going to get demolished if you don't hot swap them. I guarantee you, hot swap is coming. I predicted the Trump VP flip, and I predict it now.

• 19:57Chamath Palihapitiya?

  I think, I think you're right about maybe some of the issues where folks will get much more precise on these issues. But I actually think what's happening is that this is really going to be about Trump versus Kamala Harris. I don't think Biden is going to step down at all, but I do think there's a chance, a non-trivial chance that Biden wins. And if he does, I don't think he's going to make it four years. And so then the real question is, do folks want Kamala? And have they had a chance to really figure out whether they want to vote for her or not? I think that's really where it's going to come down to. It's really Trump versus Kamala Harris.

• 20:33Jason Calacanis?

  And if you, if you frame it as that, Chamath, then it's even a bigger trouncing, right? Like, if you put Biden, if you put Kamala against Trump, then what would the, it would be an even bigger shellacking, yeah? In your mind?

• 20:47Chamath Palihapitiya?

  I just think that, without saying anything bad about Kamala, because I don't know much about her, is really what I would say is, I don't know much about her. And so you can't have somebody who gets into that role accidentally. I think there, we have to give both President Trump and President Biden a lot of credit, which is, they stood in the eye of the hurricane and withstood all the pressure and won. And he who wins that way deserves to be the President of the United States. She hasn't withstood that. And so I think that it's pretty unfair

• 21:28Chamath Palihapitiya?

  for a lot of voters if there is a bait and switch. And so I think that you have to look at both of these two candidates and assign a reasonable probability that both of them make it to the finish line. And from at least what I saw up close, I think it's a much higher probability that Donald Trump does than President Biden does.

• 21:49Jason Calacanis?

  And listen, Biden hasn't made it to the finish line of his first term. It's obvious to everybody he's in cognitive decline. You put up a candidate who's in cognitive decline, you're going to lose. Even against, you know, Trump, who people really don't like. These are the two most unpopular candidates of our lifetime.

• 22:05David Sacks?

  I'm not sure about that. I don't think it's true that people don't like Trump. I think that.

• 22:09Jason Calacanis?

  Oh, well, he's got a core, but yeah, no, people, the Republicans, including your, hold on. The Republicans, including yourself, were looking for a different candidate just months ago. You said Trump was not your preferred candidate and you were all in on DeSantis. So let's not pretend like he was your preferred candidate. He's the remaining candidate. So you're.

• 22:26David Sacks?

  Yeah, but I think, I think it's wrong to say that there's not enthusiasm and love for Trump. We saw it on the streets. We saw it in that room.

• 22:32Jason Calacanis?

  There's some, yeah.

• 22:33David Sacks?

  Do you see Logan Paul meeting with Trump four years ago? He was for Biden. Now he's for Trump. Have you ever seen Trump walk into a UFC event? They go nuts for him. I'm just saying, there's a lot of, there's a lot of enthusiasm and a lot of love out there for Trump. A lot of excitement. I don't see any of that for Biden. There are people who don't like Trump and that drives some support for Biden. But if you look at enthusiasm and excitement, it's all on the Trump side.

• 22:57Jason Calacanis?

  In this, we are in total agreement. Yes. There is no enthusiasm to put somebody in cognitive decline in the White House. All right, listen, we got to get to the docket. We could talk for hours about Biden, Biden, Biden, Trump, Trump, Trump. And we will, it's going to be a continuing topic. But let's get to a very full docket here. Breaking news, last night Tesla shareholders have backed their guy. Yes, there was two important votes, measures that Tesla just had taken with their shareholders. The first was approving Elon's pay package, the $56 billion pay package that was voided by a Delaware judge. We talked about that on episode 164 back in February.

• 23:41Jason Calacanis?

  And then moving Tesla's incorporation from Delaware to Texas. This is also major. Remember, we talked last week about the Texas Stock Exchange. Here's the two charts. Massive overwhelming support. There were some notable people who dissented. I think Norway's Sovereign Wealth Fund and CalPERS were two of the ones who were voting against it. Tesla share price popped 6% on the news. You don't want to lose Elon at Tesla. That would be really bad. So your thoughts, Chamath, on this vote? And maybe the move and what that represents.

• 24:17Chamath Palihapitiya?

  It's kind of odd that we're in this crazy place.

• 24:21Jason Calacanis?

  Same.

• 24:23Chamath Palihapitiya?

  When that original package was unveiled.

• 24:28Chamath Palihapitiya?

  There was a lot of people, including me, who thought, there's no way he's going to hit this. It's just way too aggressive and it requires so many things to go right. And so I think in part that's why three quarters of the Tesla shareholders approved it then. Seventy-three percent is not squeaking over the line. It's not fifty percent plus a vote. It's a super majority.

• 24:57Jason Calacanis?

  And that excluded Kimball and Elon shares.

• 24:59Chamath Palihapitiya?

  Exactly. And then I think you have this very dangerous form of judicial activism, which essentially ignored the will of the shareholders and tried to create some administrative ruling that threw up this big question mark. So then, in typical Elon style, he's like, great, we're just going to get them to vote it again. And then yet again, it passes and it looks like it's going to pass by around seventy-three percent. But the problem now is that it's still not clear what happens. I think that there's still some question marks where this may not nullify the judge's decision. It may actually create more question marks.

• 25:43Chamath Palihapitiya?

  So hopefully this gets sorted out. He should get this stock, he never should have, or these options, he never should have had them taken away. And so I just hope this thing.

• 25:52Jason Calacanis?

  Yeah.

• 25:53Chamath Palihapitiya?

  It becomes a nothing burger.

• 25:55Jason Calacanis?

  Sacks, you have thoughts on this outcome? Is it surprising to you? Not surprising? And then I think the jurisdiction thing is bigger than maybe people are thinking because Delaware has been the standard for incorporating companies, but Elon is putting his companies in Nevada and Texas. We saw the stock exchange last week getting back to move to Texas. This does seem like there's something about jurisdiction.

• 26:22Jason Calacanis?

  In the water. What are your thoughts, Sax?

• 26:24David Sacks?

  Well, I think it's ironic that the winning margin, seventy-three percent, is the same margin by which shareholders approved his comp package back in two thousand and eighteen. So again, they got seventy-three percent voted for this two thousand and eighteen. Now they voted to reapprove it by the same margin. And the reason why they had to do it is because this activist judge in Delaware avoided it on the grounds that somehow the original shareholder vote wasn't valid. And I think this is interesting that the margin didn't change because it shows that shareholders aren't ingrates. Elon delivered what he promised and now shareholders are upholding their end of the bargain. And certainly they didn't have to take that position. There were different groups like CalSTRS who basically took the position, what have you done for me lately?

• 27:10David Sacks?

  You know, yeah, you delivered, but we don't have to pay you because of the judge, so we're not going to pay you. And I think shareholders wisely approved the package because I think there was some chance that if they reneged, that Elon could leave the company and I still think he's absolutely vital to all the innovation that's going to come in the future from Tesla. And you see this, the stock is ripping on the news, it's up about three percent today in a down market. So clearly the market thinks that securing Elon's future at the company was the right decision and shareholders did the right thing.

• 27:43Jason Calacanis?

  Yeah.

• 27:44David Sacks?

  In terms of the downstream effect on this, like you said, it raises the specter of Delaware being an activist state. That's not why anyone incorporates in Delaware. The reason why you incorporate in Delaware is because you think it makes you subject to an extremely predictable body of corporate law. That's been tested and become bulletproof over many, many decades. And now all of a sudden, you have to worry that maybe a judge will set aside. A shareholder vote for reasons that seem incredibly specious, especially in light of the fact that the shareholders just reapproved it. So obviously, the shareholders didn't think they needed your protection and they voted to reverse you.

• 28:28David Sacks?

  And moreover, Tesla could still be subject to paying the legal fees of these trial lawyers who've asked for literally billions of dollars in legal fees that the judge still has to rule on. So imagine this, imagine that the shareholder vote gets set aside by the judge, it then gets reapproved by shareholders, but the trial lawyers who brought this nuisance suit can now get billions of dollars. If that happens, I mean, Delaware can kind of kiss its status as the premier corporate law state away.

• 28:58Jason Calacanis?

  Friedberg, is this a John Galt moment? Is this where capitalism, socialism, and the state collide and people now start thinking, hmm, maybe we need to create a new jurisdiction, a new framework?

• 29:14David Friedberg?

  That's a good question. I think it's a good example for capitalism.

• 29:19David Friedberg?

  And I think it should shine the light on how other CEOs are getting compensated at public companies where there's typically a multi-million dollar or multi-deca-million-dollar pay package that has no dependency on the performance of the business. You can make tens of millions of dollars a year and not drive shareholder value. And I think that the way that this deal was structured, where Elon effectively got 10% of the company for 10x-ing the stock, should be an example that other boards should actively consider when considering both candidates and their appetite for this sort of a package and their compensation packages themselves.

• 30:01David Friedberg?

  The way executive comp typically works at the board level at public companies is you hire these comp consultants. And the comp consultants come in and they use comparables, which basically means let's do what everyone else does. And so you have this self-reinforcing system of compensation and benefits for CEOs that bumps up a little bit every year, that ultimately has not, has some degree of ownership in the stock, but fundamentally has very little downside. And Elon had no guarantees in his pay package when he got this comp package originally in 2018, and he got 10% of the company if he 10x'd the stock, which is what he did. I really think that it is worth having this become the kind of beacon for all boards to

• 30:46David Friedberg?

  consider, and it seems like shareholders in aggregate are applauding the concept. And look, Elon is a special guy, and he gets special treatment. But I think that it moves the needle and should move the needle a little bit for other CEOs and other boards to stand up and say, we should think about something that looks a lot more like this than what we typically do. And I think you would find a very different cast of people showing up to become CEOs and to drive performance out of these businesses, and a lot more risky and aggressive behavior than what I think you typically see in big companies that are in maintenance mode.

• 31:18Chamath Palihapitiya?

  What do you guys think of the organizations that initially voted yes and now voted no?

• 31:25David Friedberg?

  They basically are saying, look, I mean, if you think about it, you're a big public company. I don't know what ISS recommended. This is institutional shareholder services.

• 31:31Chamath Palihapitiya?

  They recommended no both times.

• 31:33David Friedberg?

  Right. And so ISS, basically, is what a lot of big public fund managers will follow when they make their votes. And so if I'm a shareholder...

• 31:43Chamath Palihapitiya?

  That's not what I'm saying.

• 31:44David Friedberg?

  No, no, I know what I'm saying, but like, let's say, let's say that I'm BlackRock or I'm a shareholder, a big, I'm not going to put BlackRock, some big shareholder Tesla stock. Why would I vote to give away 10% of the company when I don't have to?

• 31:55Jason Calacanis?

  Yeah, very simple, because morals and ethics matter, and you want to do the right thing, and you want to incentivize capitalism to operate properly, and want to incentivize the people who take on the burden of running these companies. And the people who voted against it, I think people should just make a list of those individuals, Chamath, and they should not do business with them. Because if somebody is going to double-cross you, they've shown you who they are. These are people who double-cross them. They got the benefit, and then they stabbed them in the back. Make a list...

• 32:27Chamath Palihapitiya?

  That's exactly what they did. That's exactly what they did.

• 32:29David Sacks?

  It's worse if they voted yes the first time, and then they voted no.

• 32:32Chamath Palihapitiya?

  No, I'm saying, and there's a...

• 32:34David Sacks?

  Because if you're a no-no, then maybe you're just against the deal. But if you're yes-no, then that's a reneg.

• 32:40Jason Calacanis?

  Then you're a true scumbag.

• 32:41David Friedberg?

  You're a scumbag. Is that public anywhere, who did that?

• 32:44Chamath Palihapitiya?

  Yeah, there are a bunch of folks that said that they, you know, I think it was Calpers that voted yes. And then when they were on, trying to explain, they were like, tap-dab dancing and like corporal jargon, but really what they are scumbags. Jason, you're right. They are morally and ethically void, and they're reneging. And this is the one rule in business you're not allowed to do. And the people that do that... Are these penny pinching scumbags?

• 33:06Jason Calacanis?

  I'm not saying a blacklist, but I would say making a list of people who maybe you want to consider not doing business with is how I would frame it. These are people who-

• 33:14David Sacks?

  They're public market investors, they're not private investors. They buy the stock on the open market, so they don't have to worry.

• 33:19David Friedberg?

  I mean, I think the question is, what are the chances that Elon leaves the company? If he didn't get the pay package? The chances will probably-

• 33:25David Sacks?

  I think that was a risk, and I think that made people think about it.

• 33:28Jason Calacanis?

  Yeah, non-zero possibility.

• 33:30Chamath Palihapitiya?

  You made an agreement with somebody and you shook their hand.

• 33:34Jason Calacanis?

  Yeah.

• 33:34Chamath Palihapitiya?

  Why does it care whether he would have left or not left? This is like-

• 33:37Jason Calacanis?

  You have to do the right thing.

• 33:39Chamath Palihapitiya?

  You have to do the right thing. You promised the guy X amount of money for doing Y amount of things. He did the Y things, and then you had a judge come over the top because of somebody who owned 10 shares. And all I'm saying is, if you don't have the intellectual intelligence to look past that and say, "Wait a minute, we just paid the guy to do this work, and now we're going to renege."

• 33:59Jason Calacanis?

  They're gaming the system.

• 34:00Chamath Palihapitiya?

  I just think that, like, how can anyone who is capable of doing a job sign up for a pay package? How could anyone? And the people that will sign up are these, like, middling, corpore people who will accomplish nothing and will run these companies in ways that then speaks to organizations that have just proven themselves to be totally unreliable.

• 34:24David Friedberg?

  The irony of the thing is that these folks thought that they were getting a 10% free roll when they voted no. And the reality is that by him getting the pay package, the certainty of him sticking around at the company caused the stock to go up by 10%. So they actually had the calculus wrong, that if they had gotten their way, the stock would have declined by more than the 10% free roll they thought they were getting.

• 34:47Jason Calacanis?

  This is, I think, the main point here.

• 34:48David Friedberg?

  And 10% being the ownership of the company that he gets, yeah.

• 34:51Jason Calacanis?

  The pay package was laughed at on CNBC by all the experts. There is no way for him to hit this stuff. If he does hit it, he's getting a fraction of the value of it. And this is why stock is such a valuable device. If employees get stock, and the CEO gets stock, and everybody in between, and retail investors get it, and endowments get it, and your retirement account gets it, everybody rose in the right direction. Is it perfect? No, people can buy back their stock, they can do a little gaming on the margins. But it is the most pure system we have. Everybody has a share of the company. So if you're a socialist, you know, like, you should actually kind of appreciate- How stock works, that everybody has a chance to buy it. Everybody has a chance to participate.

• 35:33Jason Calacanis?

  This is the model we should be using for all CEOs. They should all get a massive package if the stock goes up into the right. It's so obvious, and this was so unfair. Let's see this flipper. I want to see their explanation.

• 35:47Speaker 06

  The compensation is commensurate with the performance of the company.

• 35:50Speaker 07

  Did you vote for it in 2018?

• 35:53Speaker 06

  I believe we did vote for it in 2018. But this is about long-term value creation.

• 35:57Speaker 07

  But do you believe you were duped in 2018?

• 36:00Speaker 06

  No, I believe we used the information we had available and made the best choice.

• 36:04Speaker 07

  Okay, so here's what I find so interesting about this particular choice.

• 36:10Speaker 07

  Seventy-three percent, I believe, of shareholders voted in favor of it in 2018. A judge has said that shareholders were not informed properly. If you talk to most shareholders, by the way, especially big shareholders, they say, "We were not duped. We understood completely what we're doing, and we were on board with this." Now that this opportunity, almost opportunity, has arrived on your doorstep, to say, to actually rethink this, if you will.

• 36:34Speaker 07

  There's a view that, "Oh, maybe we're not getting the value we thought we should." You thought you should get it, but he's worked, by the way, under the assumption that he was hitting the numbers and dealing with the contract. If I told you that you were being paid a certain amount of money in 2018, and then I called you and said, "Actually, you know what? We're not going to give you that money anymore." What would you do?

• 36:59Speaker 06

  That's a great question. I would go to my board. You know, I would talk with my board.

• 37:06Jason Calacanis?

  This woman is so smug. What is her name, Karen Frost?

• 37:09Chamath Palihapitiya?

  I don't think she's smug.

• 37:10Jason Calacanis?

  Sorry, Marshy Frost. Oh, sorry, I thought it was Karen Frost.

• 37:14Chamath Palihapitiya?

  I think like this is emblematic of the kind of person who is incapable of actually doing the right thing. And there's a lot of these people that run a lot of these organizations that I mean, what, what kind of an answer is that?

• 37:27Jason Calacanis?

  I mean, it was a non-answer. That's why I said it was smug.

• 37:30Chamath Palihapitiya?

  Let me just ask each of you, you've all started companies, some of you are still running companies. Would you take money from her and Calpers after that statement?

• 37:38Jason Calacanis?

  Hard no for me.

• 37:40David Sacks?

  But remember, she's not investing in private companies. She's buying stock on the open market.

• 37:44Chamath Palihapitiya?

  No, no, no. Calpers announced that they're, yeah, Calpers announced that they're an LP and they're starting to do directs.

• 37:50David Sacks?

  Oh, okay. I didn't know that.

• 37:52Jason Calacanis?

  Yeah, they're trying to catch up. They've been behind on venture.

• 37:55David Sacks?

  Let's call this whole thing what it is. It was a heist. You had these trial lawyers. They find a name plaintiff who's got nine shares. And on a contingency fee basis, they go after Elon's pay package. What are they looking for? $5.6 billion.

• 38:13Jason Calacanis?

  How does a lawyer make $5 billion? How is that possible?

• 38:16David Sacks?

  This whole thing, they don't care about Tesla. They don't care about the company. They don't care about shareholders. They're looking for a giant multi-billion dollar contingency fee payment. And they took their shot and they found a Delaware judge to basically agree with them, even though shareholders approved it. And then shareholders reapproved it. So my question is, how much are these trial lawyers going to get? Is a judge going to award them billions of dollars for what was clearly now a mistake? To avoid a pay package that shareholders wanted to stick with? If they award these lawyers billions of dollars, which is what they're seeking, no one's going to want to do business in Delaware anymore because it subjects you to these stick-up heists by trial lawyers.

• 39:00David Sacks?

  So I think that's going to be the next big shooter drop is what do these trial lawyers get awarded?

• 39:06Chamath Palihapitiya?

  Well, what are they going to get paid? Cause they also wanted to get paid in Tesla shares. No, I'm serious.

• 39:11Jason Calacanis?

  Here's an idea, buy the shares yourself.

• 39:14David Sacks?

  Yeah, they said, we don't like your management of the company, but we want to trade in your shares. Yeah.

• 39:19Jason Calacanis?

  Yeah, by the way, they got their shares and then they voted to give Elon the next pay package. So it's just a full on grift. They they secure the bag.

• 39:27David Sacks?

  But Delaware is supposed to protect corporations against this grift. That's why people incorporate there.

• 39:31Jason Calacanis?

  When people ask, why does Delaware have this special place that everybody decided Delaware would incorporate? It was because it was predictable. Lawyers felt this was the most predictable jurisdiction that would be the most shareholder friendly, most shareholder thoughtful, whatever word you want to use. They would defend the shareholders. And here we are.

• 39:52Chamath Palihapitiya?

  The last company I started, 8090, we incorporated in Nevada. And I just redomiciled a couple of other companies that I own into Nevada as well.

• 40:03Jason Calacanis?

  It's becoming a trend. We're having very big discussions about this in the startup community of where to domicile your company. And more to come on this one. Okay, let's keep moving. Apple had a huge announcement this week. Apple has entered the chat. They announced Apple Intelligence, get AI. And they have included a chat GPT integration from OpenAI. This was really, I think, impressive in many ways, because people thought Apple was far behind. It was a banger of a demo. A lot of un Apple like future looking demos. So none of these demos that we're going to show are coming to your phone this week. They were really, I think, playing catch up with Microsoft. And it worked. Stock is up 10%.

• 40:46Jason Calacanis?

  They added about 300 billion in market cap. Now, the top three market cap companies are all driven specifically by the perception that AI is going to be the next technological wave. Microsoft, Apple, and Nvidia all cruising around about 3.2 trillion dollars. And this top three keeps flipping back and forth. Apple had past Microsoft in market cap. Here's the features. I'll just give you a quick overview of what we're seeing. It's added a Grammarly like features. Great product, Grammarly. I'm not an investor, but they added the ability to proof, get grammar help. AI will transcribe and summarize phone calls with permission, obviously double opt in.

• 41:28Jason Calacanis?

  It will prioritize notifications and iMessage and email that are super important. You can do smart replies, a company where an investor in Superhuman already does this kind of stuff. And they're bringing AI to Siri, and this is going to be the big win in my mind. You're going to be able to say things like you want to order something in DoorDash or Uber Eats or Instacart. And it's the AI Siri will be able to dip down into apps. They're building a whole app AI interface, much like the rabbit device CEO talked about doing. And I think this means that Apple is going to win the AI consumer. There is a deal with ChatGPT that I'll get your feedback on, gentlemen, in a moment. According to sources, Apple is not paying OpenAI.

• 42:11Jason Calacanis?

  It's a non-exclusive deal. ChatGPT can be swapped out. Apple is also talking to Google about a similar deal. Obviously, it doesn't take a genius to predict that Apple is going to auction off the LLM integration. I think to the highest bidder, they did that with the search deal. Google pays Apple 20 billion to be the default search engine. That's about 5% of Apple's annual revenue, if you didn't know. And it's all profit, right? So this is a huge profit moment. I'm going to pause there for a second before I get into more of this and just get your general reaction, Chamath.

• 42:44Chamath Palihapitiya?

  I think you nailed it right at the beginning. The thing that I was struck by the most in this is we went from a phase where in the Steve Jobs era, these events were because you were about to unveil a product that was done and shipping as of that day. And then at some point, we transitioned to they are talking about products that they intend to release within a year. Now we've shifted to the part where they're talking about software integrations from a third party that will happen in a year. So if you just look at it sequentially, it's a little disappointing in that sense because for a company this big,

• 43:30Chamath Palihapitiya?

  it's really not much of anything. You can't really touch it and feel it. And it's going to take a year.

• 43:38Chamath Palihapitiya?

  Before we really know what the totality of all of this is. Meanwhile, the economics of the ChatGPT deal were leaked and there's no money on either side. So I don't know, it's a little bit of like, really not much of anything, to be honest, because there's nothing we can actually play with and experience.

• 43:59Jason Calacanis?

  Friedberg, your thoughts on the vision here at least? And to Chamath's point, Apple used to release dope stuff, fully baked, ready to go, and now we are increasingly see them talking about what's coming next year or at some point. Do you think Apple's going to win the consumer? Do you think Apple's falling behind should they have built their own LLM by this point?

• 44:20David Friedberg?

  I'm not sure. I think what they have shown is more of a glimpse into the future of hardware, where for the last two decades or so, hardware has mostly been a portal to access the internet and use the internet through apps or through the browser. And hardware has done a good job of enabling that. But I think we're now going to see a much more tighter coupling, where the hardware becomes more valuable and it's less of this kind of funnel for apps to flow through and data to flow through. But the hardware actually becomes the value creator. And you see a much more tighter integration in the hardware OS and the AI or the software that enables you to do lots of things. You're no longer just going to use the hardware to access an app to do something.

• 45:03David Friedberg?

  So a lot of the companies that are app developers are likely going to end up becoming services developers that enable that hardware AI to do something for you. And this coupling between hardware and software, because of the way AI works, is I think becoming more apparent, not just in consumer devices, but we see it in the data center and in the enterprise stack as well. You know, we've seen that obviously there's this tight integration between the chip and the software stack that Grok built. There's a tight integration between Google's TPU stack and then the ML instances and the tools that you can use in Google Cloud that are optimized for use on that TPU hardware. Nvidia's got a big effort, obviously, in continuing to build out their software stack that sits on top of their hardware and works in a more coupled way.

• 45:46David Friedberg?

  And then Google has this ability to kind of realize, I think, a similar outcome with Pixel phones. Which is a pretty sizable opportunity for them and then all of the hardware manufacturers can probably grab more value now as they build their own AI into their OS. And you start to see more of this value realized by the hardware companies. So I think that there's this really interesting shift where we've all thought about hardware as being this like commodity where there's some degree of like improvement or innovation made over time. But now it seems like a lot of value might actually get captured by hardware companies in all points in the value stack. So it's an interesting moment and I think that this just shines a light on that trend that I think is going to play out over the next couple of years.

• 46:27Jason Calacanis?

  It's clear, Sacks, that right now to enable these features, you're going to have to have a pretty solid device. They announced here at the keynote at WWDC that you need to have an M1 chip or better, iPhone 15 or better. So and having all this local data is a huge advantage for Apple. They've got your messages, your phone, your calendar, your photos, your app behavior, the data inside of your wallet. All of this gives them a huge, huge advantage. So I guess the question is, do you think this renews the Apple franchise and people start upgrading their phones again to get all these new features, David Sacks?

• 47:09David Sacks?

  Well, the market definitely thinks so because Apple was up big on this news. And even if it was largely vaporware at this point, the market definitely liked where they were going. And frankly, Apple did exactly what I said they should do last week, which was to reinvent Siri as an LLM with the ability, with the capability to reach into apps as an agent and take actions on the user's behalf. That's what they effectively announced. However, Apple took a shortcut to get here. They partnered with OpenAI. And this is something that I don't think they've ever really done before at the operating system level. Apple is famous for being vertically integrated, for being a walled garden, for being end to end. They control everything from the chips to the hardware, to the operating system, and

• 47:52David Sacks?

  they don't let anybody else in until you're at the App Store layer. This is allowing somebody in beneath the level of the App Store. This is allowing someone. OpenAI to get access to your data and to control your apps at the operating system level. And I think Elon pointed out, wait a second, what are the privacy implications here? And I think there are major privacy implications. There's simply no way that you're going to allow an AI on your phone to take all these actions on your behalf without giving that model substantial amounts of user data. And that is a huge change for Apple. Remember, Apple in the past has been the advocate for consumer privacy. There's a whole issue of the San Bernardino terrorist where the FBI went to Apple and said, we want

• 48:37David Sacks?

  you to give us backdoor access to their phone. And Apple refused to do it. It went to court to defend user privacy. And furthermore, one of Apple's defenses to the arguments, the antitrust arguments for allowing sideloading and allowing other apps to get access to parts of the operating system is they've always said, we can't do this because it would jeopardize user privacy and user security. Well, here they are, opening themselves up to OpenAI in a very deep and fundamental way in order to accelerate the development of these features. In other words, they took the shortcut. They could have developed the LLM themselves. They could have developed the AI themselves, but they chose not to do that. And I think this is going to open Pandora's box for Apple because again, they've proven that they can

• 49:22David Sacks?

  open up the operating system to a third party now. And who knows what the privacy implications of this are going to be.

• 49:28Jason Calacanis?

  It turns out, Apple has addressed this head on. They hear the concerns. And much like when you share a photo, or you share your location, it's going to ask you over and over again, do you want to let this app do this? So they're aware that this is an issue. They brought up privacy every single time, but people don't trust OpenAI. And they do trust Apple. So this is strange, bad fellows. To be short, Chamath, your thoughts?

• 49:52Chamath Palihapitiya?

  I think that Apple really cares about privacy when they're trying to hurt a company they don't like, i.e. Meta. And they're willing to figure out a way to work around it when it's a company that they clearly support, OpenAI.

• 50:08Jason Calacanis?

  Yeah, well, you're behind, you know, you behave differently than when you're ahead and you have your monopoly. Friedberg, you wanted to add anything here before we move on to the next story? Okay, in related news, OpenAI has hit a run rate, and this is kind of stunning, of $3.4 billion. That means they've roughly doubled their monthly revenue in the past six months or so. These are not official numbers, OpenAI is denying them, but here's a chart that somebody put together based on all the different leaks and approximations of what OpenAI is making. The reason this makes no sense, this chart, and it shows a year, and then it shows a month, a month, a month, a month, is because there's been different leaks at different points in time.

• 50:52Jason Calacanis?

  But just to normalize this, in 2022, for all of 2022, before they really had a lot of customers, 28 million, and now on a $3.4 billion run rate, again, it's a pretty stunning number, if it's true.

• 51:05Chamath Palihapitiya?

  You can do apples to apples here, because like 2023 Jan is 200 million, that means that June is 300 million if they're on a $3.6 billion run rate.

• 51:14Jason Calacanis?

  Yeah. And so if we were to even look at, you know, the number of people who work there, 770, if you put that at 500,000 a person, some engineers getting a couple of millions, some people maybe getting less, they're probably only got a half billion dollars in salaries a year. Who knows what they're spending on the infrastructure for this? If you were to do a valuation on this, everybody knows they sold a bunch of shares in secondary at around 80 billion, which means they're trading at, if these numbers are true, 25 times forward revenue, which is close to what Nvidia is trading at right now. Obviously, they're two very different businesses. So your thoughts on this as a SaaS company? Obviously, the majority of this revenue is consumption based, some portion of it is

• 51:59Jason Calacanis?

  SaaS based, reoccurring, like subscriptions we pay for. At launch, my venture fund, we pay for 6,000 a year to have all 20, 25 people on ChatGPT as a corporate account. Maybe it's 250, 300 a year per person. So what do you think of this business, Sax, and how fast it's growing? Obviously, some of it's API consumption based, not reoccurring. Some of it is reoccurring.

• 52:20David Sacks?

  First of all, let me say that, you know, we've talked about AI General Hospital and all the soap opera issues around OpenAI.

• 52:26Jason Calacanis?

  Yeah.

• 52:27David Sacks?

  And, you know, Judge Sax had opinions on that.

• 52:29Jason Calacanis?

  Yes.

• 52:29David Sacks?

  But putting that aside, I mean, everyone acknowledges that their products are awesome. I mean, OpenAI makes really great products with ChatGPT 4.0 being at the top of the list. And I talked about how when we moved from ChatGPT 4 Turbo to 4.0 at Glue, the speed and quality went up, you know, at least 2X and it felt like 10X. So they have the best language model as of this point in time. And they also have other products that are really great, like the Whisper API, which does transcription. I mean, there's a whole bunch of tools they have that are great for developers. So nobody's taking anything away from them on the product side. And I think you're seeing that in this revenue number.

• 53:12David Sacks?

  Now, if I was to try and take apart this business as an investor, I would separate the B2C business from the B2B business. The B2C is a consumer subscription plan, people paying $20 a month. I'm one of them. I pay the 20 bucks a month. It's probably the only LLM that I would pay 20 bucks a month for.

• 53:32Jason Calacanis?

  How often you use it? Daily, weekly, monthly?

• 53:35David Sacks?

  I'd say a handful of times. It's not, to be honest, it's not like a daily use for me, but I probably use it every week, I would say, at least once.

• 53:44Jason Calacanis?

  Yeah.

• 53:44David Sacks?

  So I still use it. I have to say, though, that the other LLMs are catching up. And if Gemini ever gets good enough, or, you know, when Grok gets to the next level, am I going to stick with that $20 a month plan? I'm not sure. It depends whether OpenAI can really maintain the leadership it has or the perception of leadership. Okay, so that's. Half the business and then the other part of the business is the B to B, which is the the API products that effectively they're selling to developers. And that's where I would place the future value of this company. I mean, as somebody who invests in SaaS, when we see a business that has B to C subscriptions and B to B, we place all the value on B to B. And the reason is because historically the churn rates in B to C are too high.

• 54:29Jason Calacanis?

  Yep.

• 54:29David Sacks?

  Five to 10% churn rates are common, 50% a year.

• 54:32Jason Calacanis?

  Per month.

• 54:33David Sacks?

  Per month, 50% churn a year, very common. OpenAI may not be experiencing that yet, but it's very hard to avoid the downdraft of consumer churn. And, and, you know, on the other hand, on the B to B side, a good B to B business has expansion, 120%, 150% expansion year over year from same customers. In other words, they're ordering more.

• 54:57Jason Calacanis?

  So you would compare this business to Amazon Web Services, Google Cloud, Azure? That's really the business here?

• 55:03David Sacks?

  Yeah. The first thing I'd want to know is how much of the 3.4 billion is consumer and how much of it is, is developers?

• 55:09Jason Calacanis?

  We'll find out eventually. Chamath, your thoughts on OpenAI's surging revenue?

• 55:14Chamath Palihapitiya?

  I'm kind of in David's camp, which is I think to the extent that the

• 55:18Chamath Palihapitiya?

  business has a large terminal value, it's going to be because of the enterprise cash flows. The thing to keep in mind is that I still haven't seen enterprises building production level products using AI.

• 55:36Jason Calacanis?

  It's all experimentational, right? It's all experiments now.

• 55:38Chamath Palihapitiya?

  That's nothing against OpenAI. It's just a commentary on the fact that we are at a very, very early part of the cycle where when you use this term blast radius, right? What are you referring to? You're referring to this idea that you're stringing together elements of a model or multiple models that each have some non-trivial error rate. And by multiplying all these error rates together, you get your final product. But the unfortunate reality in most AI workloads is that you end up with something that's not very good. And that's not the fault of OpenAI, nor is it the fault of Llama. It's just the nature of how these models work and the fact that, you know, you've gone

• 56:20Chamath Palihapitiya?

  from something very, you know, deterministic to something that's very probabilistic. And we have not found a way to create extremely high quality experiences, we as an industry.

• 56:33Chamath Palihapitiya?

  That make this cost justifiable. So right now, as you said, Jason, most of that is toy apps and a lot of experimentation. Will we get there? I absolutely think so. But we're not there yet. So I suspect that most of the revenue then

• 56:50Chamath Palihapitiya?

  is on the consumer side right now, actually. And so I just looked at Google Trends and I first looked at the United States and I just wanted to understand how is the traction? And what's interesting is, is that the traffic in the United States is down about twenty five, twenty six percent since the end of the school year. Which I think reinforces this belief that ChatGPT has definitely over indexed in that young people's cohort where they rely on it to write essays or what have you. But then I looked outside the United States and worldwide. And what's interesting about that is that's actually still growing up into the right. So I think you have then an ARPU problem, which is the same thing that we had to deal with at Facebook, which is we have these extremely valuable users in America.

• 57:35Chamath Palihapitiya?

  They asymptote at some point and then we have to grow in other markets, but those markets aren't nearly as lucrative.

• 57:41Jason Calacanis?

  Right. The average revenue per user ARPU per year is single digits, maybe it hits double digits as opposed to the United States where it could be triple digits, right?

• 57:50Chamath Palihapitiya?

  So then I don't know. I would just wrap up by saying that I think that it's just, if this number is right, it's just an incredible testament to what they've been able to uncover and create in a short amount of time. That is legendary stuff.

• 58:05Jason Calacanis?

  Yep.

• 58:06Chamath Palihapitiya?

  But what I can tell you in working with enterprises around these AI experiences through eighty ninety, we have not yet seen production quality models being deployed in the wild

• 58:22Chamath Palihapitiya?

  that are dealing with very, very important business processes, which means that most of the revenue right now is probably consumer oriented.

• 58:31Jason Calacanis?

  Okay, Friedberg, you, I don't know if you got to see Sonny's talk at liquidity last week, but he talked about how many of the CIOs, CEOs are looking for open source solutions here. Eighty percent of them want to go open source. They don't want a proprietary model to invest in, but the best model right now is a proprietary model. So what do you think about OpenAI's revenue surge? Is it sustainable or are there twenty?

• 58:56Jason Calacanis?

  Better open source projects that are going to be death by 20 open source project cuts. And Schmott's general feeling here that, hey, it's not ready for primetime yet. It will be, but we're in the AI dial-up era, to use an analogy here. Hey, you can see the promise, but it kind of sucks in terms of reliability.

• 59:13David Friedberg?

  Yeah, I mean, maybe OpenAI is AOL, right? Like, I think that there's going to be a Google that'll show up, that'll, maybe it's Google. Grab a large part of the value here. Or, you know, ultimately, the cost comes down so much with the open source tools. I do believe that these open source tools are incredible. I mean, the open source Llama instances are like, they get you 85 to 90% of what you're looking for. So if you're an enterprise user, why would you pay thousands of dollars for the OpenAI platform when you can use Llama? And you can tune it, and you can build your own front end to it, your own integration with your own data, et cetera, et cetera. It's just early days for enterprises figuring out how to do that.

• 59:56David Friedberg?

  But I do really believe that the future is enterprises, companies, building their own LLM-driven tools for both internal and external products that leverage smaller open source models. And that we're kind of in this, you know, dearth of people's understanding and ability on how to actually execute against that, which makes the default to be go to the ChatGPT interface. I will also provide a counter. I just did a big project at work this week. We had a, like, a big offsite with 20 people involved. And everyone used ChatGPT to get ready for it. So there was a ton of analysis, a ton of data gathering, a ton of reporting needed for the offsite.

• 1:00:37David Friedberg?

  And rather than hire a third party or have people go out and source data themselves, a lot of us, including myself, I prepared like maybe a quarter of the material, just use ChatGPT and pulled the sources to make sure it was all kind of useful.

• 1:00:50Jason Calacanis?

  Did you, oh, you did pull sources and check facts, right? You do have to do that step.

• 1:00:53David Friedberg?

  Yeah, so we pulled the source, and there was a lot of wrong stuff, just to be clear. But for our purposes.

• 1:00:57Jason Calacanis?

  What percentage, you were at a ballpark, percentage was wrong.

• 1:00:59David Friedberg?

  I would say 25% of it was like wrong, and then you had to clarify. But the truth is, for this particular application, it didn't matter. We were making some approximations on markets and sizes and, and various facts that we were kind of using to do some strategy stuff, but in some product development stuff. So I would say like it wasn't.

• 1:01:16Chamath Palihapitiya?

  But you found it useful, you found it useful.

• 1:01:17David Friedberg?

  Hundred percent. And I would say it saved us hundreds of hours, hundreds of hours.

• 1:01:21Chamath Palihapitiya?

  And were you paying them an enterprise license or a consumer license?

• 1:01:25David Friedberg?

  Twenty bucks a month, what is that?

• 1:01:27Jason Calacanis?

  It's the same thing for the enterprise, Chamath, you can just sign up and for twenty bucks a month, you can have your whole organization on it.

• 1:01:34Chamath Palihapitiya?

  Yeah, no, Freebird, like you're just paying it yourself or you pay for everybody at the hollow?

• 1:01:39David Friedberg?

  I think everyone has the right to pay for it. I think other people at the company pay for it too. I pay, like I, I have my, I don't have like a corporate thing set up.

• 1:01:46Jason Calacanis?

  So everyone basically. We took the time to set up the corporate, it's really easy and then anybody with your domain can sign up and let you track it, but it doesn't consolidate. That's what I'm looking for, Chamath, is the ability to consolidate all the searches in one place and everybody can share their searches.

• 1:01:59David Friedberg?

  But like I said, the application layer has.

• 1:02:00Jason Calacanis?

  Kind of is what Google is doing, right? In some ways, SaaS.

• 1:02:03David Sacks?

  Collaborative AI.

• 1:02:05David Friedberg?

  It's an application today, meaning like we go to the app, we ask questions, we get answers and we use that. And I actually had it pull tables down and I dropped those tables in, like all sorts of great stuff it could do. You know, do some analysis, pull out the stuff what the analysis showed, understanding unit economics on various businesses, all this sort of stuff that it consolidated for us very quickly.

• 1:02:23Jason Calacanis?

  Definitely makes everybody bionic, I agree.

• 1:02:25David Friedberg?

  But what it's, what it doesn't do yet is take all of our internal data and all of our internal tooling and kind of reconfigure how we use that. So we're still paying for a whole bunch of enterprise software and SaaS licenses for things that we know we don't want to be paying for in the future. And we're now starting to figure out how can we build our own AI-based software to replace a lot of the dependency we have on third-party software that uses our internal data for our internal consumption. So there's a lot of that still ahead of us and that's why I know, and we're pretty progressive. So that's why I know it's early innings, because I see the way we're going to use it. And I know that we're probably well ahead of a big enterprise company that are more traditional. And so I can see like a couple of years from now, all these big enterprises are going to figure the same thing out.

• 1:03:10David Friedberg?

  And then you're not necessarily going to need to pay for this chat GPT stuff. If there's an internal tool and an internal LLM that you can run.

• 1:03:18Jason Calacanis?

  Young people are really getting dependent on this and they use it constantly. We're on our investment team meeting. We were evaluating a company for real estate brokers. We're evaluating a company for therapists and like tools and SaaS products for those type of people. And when I asked them, well, how many, what's the total addressable market? Boom, three or four researchers and analysts on my team are doing that search, finding sources and saying there are this many therapists, this many social workers, this many real estate brokers, this many buyers. And then I'm saying, well, did you source them? They're like, yeah, of course. I asked, and like one of them was like, well, I asked Claude, I asked Gemini, I asked ChatGPT, I asked them all for sources. I cross referenced them.

• 1:03:56Jason Calacanis?

  So they're like, have three of these things open. And so just everybody's knowledge level goes up, but you do have to check it because one out of four facts is probably wrong or cited wrong. And so it's going to be.

• 1:04:07David Friedberg?

  I think one out of four is about the right number. Yeah.

• 1:04:09Jason Calacanis?

  Yeah.

• 1:04:09David Friedberg?

  And so.

• 1:04:10David Sacks?

  That's interesting. So you use multiple LMs to find the hallucinations.

• 1:04:14Jason Calacanis?

  Yeah. Basically, you cross reference them.

• 1:04:15David Sacks?

  That's actually pretty interesting.

• 1:04:17David Friedberg?

  I jump on Gemini too. So I use Gemini dot Google and I use ChatGPT and I just make sure that stuff lines up, just sanity check things because I'm trying to process a lot of data.

• 1:04:25David Sacks?

  But you're not going to pay for four of these, right? How many would you be willing to pay for?

• 1:04:29Jason Calacanis?

  I would pay for five.

• 1:04:31David Sacks?

  You'd pay for five different LMs?

• 1:04:32Jason Calacanis?

  Well, think about it. If somebody's salary is a hundred thousand and these cost a thousand dollars to have five of them, of course I'd pay for five because it's 1% of their salary.

• 1:04:40David Sacks?

  Okay, so as a work tool, you know, I guess, I guess there's three categories to their business now that you're raising this. There's sort of the consumer subscriptions.

• 1:04:48Jason Calacanis?

  Yep.

• 1:04:48David Sacks?

  Then there's the business descriptions, which are basically the consumer product, but a company's paying for it.

• 1:04:53Jason Calacanis?

  Correct.

• 1:04:53David Sacks?

  And then there's the developers paying for metered API usage.

• 1:04:55Jason Calacanis?

  Consumption metered.

• 1:04:56David Sacks?

  Yeah.

• 1:04:57Jason Calacanis?

  Yeah. Yeah. That, that enterprise is really powerful.

• 1:05:00David Sacks?

  Yeah. It's kind of like Microsoft Office or Google Docs where consumers use them for, for free or want to use them for free.

• 1:05:07Jason Calacanis?

  Yep.

• 1:05:08David Sacks?

  Companies will pay for it and that's where the real money is.

• 1:05:11Jason Calacanis?

  Anyway, this is going to make people bionic. I think all organizations will have the same number of people for the next couple of years. And then just individuals who get better and better at their jobs. And so efficiency is going to go way up. Speaking of efficiency, the market is ripping. We're going to get a little macro here in three acts. Inflation has been broken. I think it's safe to say we're down at three point X, three point three, lower than expected. And.

• 1:05:39Jason Calacanis?

  Hiring wages are surging and stocks are surging. So let's go through it here and get the besties take on the vibe session.

• 1:05:47David Sacks?

  I actually disagree with that framing, Jason.

• 1:05:49Jason Calacanis?

  Yeah, I agree. I disagree as well. You disagree with it. Let me go through the numbers and then you can all disagree. That's how that's how this works, folks. Inflation print came in at 3.3% lower than expected. Here's your 10 year chart. Super easy to explain what's happening here. Rates were low for a long time. Inflation cruising at about 2% and then lunatic spending during COVID and we added a trillion to the national debt and then Biden added a bunch. Everybody getting those STEMI checks and PPP loans. And so if you look at inflation here, we were just cruising along at 2%. Massive spike up to 9% year over year inflation and now coming back down to 3 point X. And the question is, can we get to a two handle? And the rates went up faster than in

• 1:06:31Jason Calacanis?

  ever in history. Here's the Fred chart. You can see there in and this goes from the 80s. So you see that massive spike when they tried to break the back of inflation previously. So this is the fastest ever gone up. And here we go. The common sentiment here is that savings has been burned off and people are starting to have debt. And so now we are in act two, the lowest unemployment rate of our lifetime continues. If you believe those numbers, some people do, some people don't. Labor Department reported 272,000 new jobs in May, smashing, crushing the 190,000 estimate. And then act three, average hourly wages up a massive 4%

• 1:07:16Jason Calacanis?

  from last year at $35 an hour. That also topped estimates. So if inflation is at 3 point X and hourly earnings are a 4 point X, maybe consumers will start feeling better about the economy eventually. They obviously have been pretty shocked by that 9% inflation and only 4% growth. Here's your chart from Fred of the hourly earnings of all employees. And you can feel pretty good about that. Everybody's wages keep going up. The question is, do they go up faster than inflation? Okay, so there's my framing of the situation. Freiburg, tell me what I got right. Tell me what I got wrong.

• 1:07:49David Friedberg?

  I think there are three numbers that matter.

• 1:07:51Jason Calacanis?

  Okay.

• 1:07:51David Friedberg?

  The inflation rate, the growth in GDP, and the cost to borrow. The growth in GDP in the first quarter of 2024 was a lousy 1.3% on an annualized basis. And even if the rate of inflation came down, we are still inflating the cost of everything by north of 3%. So the economy is only growing by 1.3% and it costs more than 3% more each year to buy stuff. So that means everyone's spending power is reducing and our ability and our government's ability to tax is declining because the economy is only growing by 1.3%.

• 1:08:31David Friedberg?

  And the most important fact is that the interest rates are still between 4% and 5%, 4% and 4.7%. That means that to borrow money costs 4.7%, but the businesses, the economy on average is only growing 1.3%. So just think about that for a second. We have a tremendous amount of leverage on businesses, on the economy, on the federal government. That leverage, the cost to pay for that debt is more than 4% to 5%, but you're only growing your revenue by 1.3%. So at some point, you cannot make your payments.

• 1:09:07Jason Calacanis?

  And the goal was...

• 1:09:09David Friedberg?

  That is true for consumers, that is true for enterprises, and it is true for the federal government.

• 1:09:15Jason Calacanis?

  Just to point out here what you're saying, the goal was to in fact increase the interest rate to cool the economy, right? Which they got too late, but that was the goal. That was the explicit goal, was to cool the economy.

• 1:09:26David Friedberg?

  Yeah, the whole purpose of raising rates is to slow the flow of money through the economy. And by slowing the flow of money through the economy, there is less spending, which means that you're reducing the demand relative to the supply. So the cost of things should come down. You should reduce the rate of the increase in the cost of things. Now, if you click on this link, Nick, that I just sent you, in response to the condition in the economy today, Elizabeth Warren sent this note to Jerome Powell three days ago saying, "Dear Mr. Powell or dear Chair Powell, we write today to urge the Federal Reserve to cut the federal funds rate from its current two-decade high of 5.5%."

• 1:10:06David Friedberg?

  Of high interest rates is already slowing the economy and is failing to address the remaining key drivers of inflation. She goes on to point out the fact that consumers are suffering, businesses are suffering, and the strain of these three numbers is really starting to show on individuals, on businesses, and obviously on the power of the dollar. But the dollar is a different story because of the condition of the economy and the rest of the world. And we're in a very unique position. But I think that things are not as rosy. Now, there's certainly a shift in the market because what this tells us is that the timeline at which the Fed will cut rates is coming in a little bit, relatively speaking. And so the market is saying, okay, let's adjust to lower rates. The 10-year Treasury yield has come down a bit. But we are

• 1:10:47David Friedberg?

  still in a difficult situation for people and for businesses. And you have Elizabeth Warren, who I think is the voice of small businesses and consumers. She's trying to be the voice of those groups.

• 1:10:59Jason Calacanis?

  Yeah, I'm sensing.

• 1:11:00David Friedberg?

  And saying this is very hard on people.

• 1:11:03Jason Calacanis?

  Chomak, what's your take on this? We have a slowing GDP growth. We have inflation going from nine down to three. We have wages going up 4%. How do you make sense of all this? Do you feel like?

• 1:11:17Chamath Palihapitiya?

  Sorry, Freebro, are you saying we're going to have stagflation?

• 1:11:20David Friedberg?

  Or we have stagflation right now, definitely. But what I'm saying is that it's not a rosy picture just because labor rates are going up. If the labor rates aren't going up, and you can see this ultimately, the best number for this is the sum of GDP growth. So in aggregate, if the revenue of everything combined, which is GDP, isn't going up faster than the increase in the cost of everything, people, businesses, and the government can't afford their stuff. And that's fundamentally what's going on right now. What we need to see is a normalization where GDP growth is greater than inflation rate. And as soon as that happens, then we have a more normalized and stable economy. So right now, things are not stable. There's a lot of difficulty and strain in the system.

• 1:12:03Chamath Palihapitiya?

  I will put myself on the other side of that trade if there was one. If I had to simplify the United States economy, remember, GDP is 70% spending by individual people.

• 1:12:20Chamath Palihapitiya?

  And so people can spend two things, savings that they have or credit that they have.

• 1:12:27Chamath Palihapitiya?

  And what's interesting is that we have finally burned through, and this is what this picture shows, all of the money that folks had in their bank accounts.

• 1:12:39Chamath Palihapitiya?

  And so what does that force people to do? It actually forces people to re-enter the workforce so that they can start to make money. But the problem is that companies have been shrinking and have been on a defensive posture. And so as a result, which you started to see this past unemployment report, unemployment is now ticking up because when these people re-enter the workforce, there are no jobs for them to have. People are filing incremental unemployment insurance claims. States like California, in fact, the state of California was the worst off this past month. So I think what we're starting to see is that for the large portion of the economy,

• 1:13:20Chamath Palihapitiya?

  we've run out of cash to spend. And as a result, I do think that we are going to see an economic slowing. And I think that that will create not just enormous empirical justification for Jerome Powell, it'll be exacerbated by what Friedberg just showed, which is the political pressure that he's going to be under to cut. Will it cause him to cut more aggressively than he would have otherwise? On the margins, I actually think yes. But my perspective is that I think that we've run out of money, individual people. So I think unemployment is going back up. I think GDP is going to shrink.

• 1:14:00Jason Calacanis?

  Yep.

• 1:14:01Chamath Palihapitiya?

  And so I kind of tend to be in this camp that we're going to see more than one rate cut.

• 1:14:05Jason Calacanis?

  So here is total job openings, to your point, Chamath, they're getting burned off. We peaked at 12 million. Again, if you believe the numbers or not, they obviously have some value. And we've burned off a ton of those. So Sax, what's your non-political, non-partisan take? First principles of what's going on with the economy?

• 1:14:23David Sacks?

  Well, look, we just had this inflation report. CPI was 3.3%. The market was expecting 3.4%, so that's a teeny bit better than expected. But it's still persistently sticky, inflation is. And furthermore, Powell's comments were very hawkish. He basically said he could not commit to when rate cuts might begin. And we're already, remember at the beginning of the year, we entered the year with expectations for seven rate cuts this year. Now we're down to an expectation of one rate cut. And we can't say for sure when that's going to happen. So honestly, I think your introduction overstated how positive this news was. And that's why I think if you look at the markets right now,

• 1:15:06David Sacks?

  it's very mixed. Most tech stocks that I'm seeing are actually in the red. And a few of them like Tesla and Apple and Nvidia are up, but the vast majority are in the red. So I think the market is taking this in stride. I think the big picture here is just we don't know when rate cuts are going to begin. And I think that Vinnie Lingam had a really interesting take on this, actually, where he said, look, could Powell cut by a quarter point? Would that matter that much? No, it wouldn't matter that much. But the point is Powell doesn't want to say that the rate hike cycle is over, right? If he were to cut by a quarter point, that by itself wouldn't do much, but it would be a huge statement that we're out of the woods on inflation. There's not going to be any more hikes coming.

• 1:15:49David Sacks?

  And we're beginning a new rate cut cycle. And Powell is clearly unwilling to say that. We're still in this like limbo where he is saying that we don't know when rate cuts are going to begin.

• 1:15:59Jason Calacanis?

  Betting markets had two, a 70% chance of two rate cuts before Powell spoke afterwards. Now it's one rate cut. Dow, record high again this past week and Nasdaq record highs each of the last like month for the last four months. So the market, putting aside individual stocks, has broken records almost every month for the last three, three, four months.

• 1:16:22David Sacks?

  On the back of like two stocks. I mean Nvidia is holding up the whole market. There's a lot of funny memes about this.

• 1:16:28Jason Calacanis?

  Nvidia, Microsoft and Apple.

• 1:16:31David Sacks?

  AI stocks have, are holding up the whole market.

• 1:16:34Jason Calacanis?

  Correct. Yes. Record stock market.

• 1:16:36David Friedberg?

  What does Jerome Powell have to gain or lose by bowing to political pressure? So a lot of folks mention and references kind of, there's political pressure for him to do something. But why would he bow? What does he care? What, what do you think the motivation is for Powell individually? And what is the political process that will ensue?

• 1:16:58Jason Calacanis?

  Future job prospects?

• 1:16:59David Friedberg?

  If he doesn't bow to political pressure?

• 1:17:01Chamath Palihapitiya?

  I think it's the legacy and the perception that he leaves behind. I think had he not Overpromised and underdelivered at the end of last year. Remember, he was promising, as Sacks said, six or seven rate cuts, and he's delivered bupkis. And the markets were none too pleased. And so now I think he's just swung the pendulum to the other side, which is he's going to massively underpromise and then overdeliver if he can. And so as a result, I think he's being much more measured and guarded. I don't think he wants to be wrong here. So I think he's thinking about what most folks think about when they're at the tail end of their of a job like this. He's not going to get reappointed. He's going to go off into the sunset. It's roughly about how history will write, how he handled the transition from that to the next phase, whatever that is. So I think he's probably

• 1:17:46Chamath Palihapitiya?

  very interested in making sure he doesn't break the economy, and also that he doesn't seem like he's constantly waffling and unpredictable.

• 1:17:53David Friedberg?

  But isn't he just an autonomous agent that is meant to respond to the data? I guess I'm not quite understanding the degree of judgment and discretion that everyone seems to think he has. They have the dual mandate, right, Freiburg? They have a mandate, but again...

• 1:18:04David Sacks?

  If you're asking what his incentives are, I agree with you, Matt. I think his main incentive at this point is concern for his historical legacy. And specifically, he wants to be thought of like Volcker, not like Arthur Burns in the 70s. Volcker basically crushed inflation even at the cost of recession, and he is worshiped today as the best Fed Chair ever, whereas Burns let inflation slip the leash in the 1970s, and he's not thought of very highly. So I think that Powell's main concern here is with his historical legacy at this point. I don't think he's expecting to be reappointed. He's wrapping up his second term already. Now, I think if you go back to 2021, the incentives were a little bit different. Powell wanted to be reappointed by Biden. And remember that

• 1:18:48David Sacks?

  in the summer of 2021, that's when the inflation began. We had that surprise 5.1% inflation print. Powell was up for renomination and confirmation in November of 2021.

• 1:18:59David Sacks?

  And I think what happened back in that year is the administration downplayed the inflation report. They called it transitory. Yellen did, Biden did. And so Powell had to get on board with that message if he wanted to get confirmed by the Democrats. And he did get on board that message. He repeated the whole transitory point. And for that reason, they didn't begin the rate hike cycle until March of the following year. And from that May inflation print to November, they kept doing QE, even though we had inflation back in the system. So I think, I think that Powell was actually intensely political in 2021. He knew who was going to reappoint him and who was going to have to confirm him. And he got on board that message. And that's why they were so slow to react to the inflation.

• 1:19:43David Sacks?

  And I think it was disastrous. And that's one of the reasons why the rate tightening cycle was so steep is because he had to catch up with all this inflation that he had allowed for nine months longer than he should have. But if you ask me, what's his incentive now? I think it's purely about legacy. And he does not want to let inflation come back after cutting rates a little too soon. So his incentive, I think, at this point is to, to make sure that he's not wrong again about inflation.

• 1:20:11Jason Calacanis?

  And to remind everybody, maximum employment, stable prices, moderate long-term interest rates is the mandate for the Federal Reserve. They're supposed to be independent. Famously, Reagan pushed Volcker to get rate cuts. And there is a lot of politics involved in this. And so, legacy does seem like the organizing principle here. I would agree with Chamath and Sacks that it's legacy. But there's always political pressure here. As you can see, Elizabeth Warren is trying to push him to make cuts for obvious reasons.

• 1:20:45David Sacks?

  Well, no, there's politics when they're up for appointment or for reappointment, for confirmation, basically, because they want to get that vote.

• 1:20:55Jason Calacanis?

  Yes.

• 1:20:56David Sacks?

  But

• 1:20:56Jason Calacanis?

  But there's also subtle pressure. And then there's letter writing like Elizabeth Warren's doing here, right? So the pressure can be there. The question is, do they bow to it, right, Sacks?

• 1:21:04David Sacks?

  Yeah, they don't have to. I mean, the Fed's independent.

• 1:21:06David Friedberg?

  What do they stand to gain or lose by the pressure is my question. And I'm not sure I really like this concept. Exactly. And I think that's really where there is a important point to note here, that you can identify the guy's motivation and how he's going to operate.

• 1:21:20David Sacks?

  This year, because there aren't, there is no political pressure. There wasn't 2021. And I think that's why he was slow to react.

• 1:21:26Jason Calacanis?

  Yeah.

• 1:21:27David Sacks?

  Listen, if Powell can stick the landing here, then his legacy comes out intact. But if he screws this up, and then he was slow to react to the inflation back in 2021 and 2022, his legacy is going to be mud. So I think he's going to be more concerned about erring on the side of tamping down inflation than erring on the side of the economy not doing as well. I think those are the incentives.

• 1:21:55Jason Calacanis?

  My position is I think he might have already stuck the landing. I think like the fact that we've burned off all that savings, to your point, Chamath, that people are going back to work and that these businesses are doing fantastic and efficient because of AI and other gains, it feels like all the record that he, I think he's stuck the landing already.

• 1:22:14David Sacks?

  No, no.

• 1:22:15Chamath Palihapitiya?

  They're, they're trying to go back to work, but the jobs don't exist.

• 1:22:19Jason Calacanis?

  I think they're going to take jobs, they just might get the job they want. And that's what I think people have to recognize is they have to take a job, and it may not be the one that they want, working from home.

• 1:22:31Chamath Palihapitiya?

  We could have a negative recessionary print going into the election cycle. I think that's very possible.

• 1:22:36David Friedberg?

  Yeah, exactly.

• 1:22:38David Sacks?

  I don't know, Jason. Look, I'm, I'm hearing a lot of happy talk right now. And I agree with Friedberg, you had, you had 1.3% GDP growth rate with a 6% of GDP deficit by the government. If the government wasn't printing so much money, wasn't overspending, if you were to have a balanced budget.

• 1:22:56David Friedberg?

  It would be a recession.

• 1:22:57David Sacks?

  Yeah. Think about that.

• 1:22:59David Friedberg?

  It would be negative GDP growth if not for the government's programs stimulating the economy.

• 1:23:05David Sacks?

  And a lot of the jobs you're talking about are government jobs. The government is creating jobs like crazy, not in the private sector, but in the public sector, because it is an election year. So there's a lot of political forces propping things up. And I wonder what happens after the election.

• 1:23:22Jason Calacanis?

  We'll find out. All right, everybody. This has been another amazing episode of the All In Podcast.

• 1:23:29David Sacks?

  Just one last thing, guys. This is really important. So friend of the pod, Peter Fenton, who's a famous VC in Silicon Valley tweeted that his sister has been diagnosed with a rare sarcoma, and they are searching for lookalike cases to do a study at Dana Farber. And if this works, it will change the future of cancer. But they are seeking this researcher, William Gibson, who he's retweeting, is seeking patients with myoxoid leiomyosarcoma featuring a PLAG1 fusion. So if you are somebody out there who has a case like this, then please

• 1:24:09David Sacks?

  reach out and let us know or let Peter Fenton know. This could save a life, or many lives. His sister is also the wife of a good friend of ours, Pete Brigger. So our thoughts are definitely with you. And if there's anybody out there who has this type of rare sarcoma, please let us know. And we can refer you to Dana Farber. And this is a very important study that may save some lives.

• 1:24:36Chamath Palihapitiya?

  Pete and Peter are great guys, and our thoughts with Devon. Hope you guys find a cure.

• 1:24:40Jason Calacanis?

  Okay, best wishes to Peter and his sister. Help out if you can. And you're in our thoughts and our prayers.