DOGE kills its first bill, Zuck vs OpenAI, Google's AI comeback with bestie Aaron Levie

(0:00) Bestie intros (3:07) The Besties welcome Box CEO Aaron Levie! (5:40) Thoughts on Sacks's new role, what areas he can have immediate positive impact on in crypto and AI (18:42) DOGE's first casualty and its paradigm-shifting potential (48:25) Conspiracy Corner: What are the drones over New Jersey!? (57:36) Zuck joins Team Elon against OpenAI, AI's competitive landscape and downstream impact on business software (1:27:29) Google's AI turnaround, future of AI physics and video models Follow the besties: https://x.com/chamath https://x.com/Jason https://x.com/DavidSacks https://x.com/friedberg Follow Aaron Levie: https://x.com/levie Follow on X: https://x.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@theallinpod Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://x.com/yung_spielburg Intro Video Credit: https://x.com/TheZachEffect Referenced in the show: https://www.cbsnews.com/news/government-shutdown-continuing-resolution-march-14 https://x.com/Jason/status/1869816646954823916 https://docs.house.gov/billsthisweek/20241216/CR.pdf https://www.cbsnews.com/news/government-shutdown-house-vote-continuing-resolution https://x.com/KobeissiLetter/status/1869730547851051029 https://www.cbsnews.com/news/continuing-resolution-government-shutdown-2024 https://x.com/VivekGRamaswamy/status/1869407887983821089 https://avalon.law.yale.edu/18th_century/fed58.asp https://x.com/patrickc/status/1869422495985750459 https://x.com/chamath/status/1869773044832718917 https://x.com/SpeakerPelosi/status/1869871681830879256 https://x.com/RepJayapal/status/1869823494588162475 https://x.com/elonmusk/status/1869485580276629975 https://x.com/elonmusk/status/1869482581181554704 https://x.com/elonmusk/status/1869487359420727338 https://www.wsj.com/politics/biden-white-house-age-function-diminished-3906a839 https://www.cnbc.com/2024/12/19/faa-drone-flights-are-temporarily-banned-new-jersey.html https://x.com/KanekoaTheGreat https://x.com/AutismCapital https://x.com/Geiger_Capital https://www.cnbc.com/2024/09/27/openai-sees-5-billion-loss-this-year-on-3point7-billion-in-revenue.html https://www.axios.com/2024/12/19/openai-bret-taylor-nonprofit-restructuring https://openai.com/index/scale-the-benefits-of-ai https://www.nytimes.com/2024/09/25/technology/mira-murati-openai.html https://apnews.com/article/elon-musk-openai-lawsuit-sam-altman-chatgpt-36bc55dbb8b4f9e1e5675ff7564e5fa0 https://www.theverge.com/2024/12/13/24320880/meta-california-ag-letter-openai-non-profit-elon-musk https://x.com/DailyPalantir/status/1869097046889882057 https://www.bloomberg.com/news/articles/2024-10-28/openai-cfo-says-75-of-its-revenue-comes-from-paying-consumers https://x.com/GoogleDeepMind/status/1868703624714395907 https://x.com/_philschmid/status/1869639246434246966

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

• 0:00David Friedberg?

  JCal, what just happened? Did you just have a moment, an emotional moment?

• 0:03Jason Calacanis?

  I don't know, you know, I've been trying to get over Sax and um, it's hard to get over your ex.

• 0:08David Friedberg?

  Even when they didn't treat you well?

• 0:09Jason Calacanis?

  We were in a codependent relationship and we were working on it.

• 0:13David Friedberg?

  You have no one to fight with anymore. Who are you gonna fight with, JCal? That's the emptiness you feel inside, because you're a fighter, you're a street brawler, and you have no one to brawl with anymore. So you feel...

• 0:22Jason Calacanis?

  Well, you're the first guy to jump under the table in a bar fight.

• 0:26David Friedberg?

  I mean, here you go, there you go, as I was saying.

• 0:30Jason Calacanis?

  No, I feel like if the [bleep] goes down, I feel like Sax and I would have like, we would have thrown down, we were [bleep] bulldogs, we would have fought like tooth and nail.

• 0:39Chamath Palihapitiya?

  Okay, I have this, I have this, I have this, I have this image. It's like, we're in a bar, okay? And all of a sudden...

• 0:46Jason Calacanis?

  You talking to me?

• 0:47Chamath Palihapitiya?

  A fight is about to break out, four thought bubbles appear, okay? JCal's like, JCal's like, "Let's go get him." Sax is like, "This guy, this guy's a dip [bleep], let's roll." I'm like, "Look at that chick, she's so good looking." And then Friedberg's like, "What will happen to my invite [bleep] duck?"

• 1:06Jason Calacanis?

  Friedberg's like, "Oh, how do I get out of this unskating [bleep]?"

• 1:30Jason Calacanis?

  Alright, everybody, welcome to the number one podcast in the world. With me again today, for better or worse, your Sultan of Science, David Friedberg is back. How you doing, Friedberg? I see you're a pawn, only a pawn in their game. What's going on with the pawn background?

• 1:48David Friedberg?

  The imposter syndrome.

• 1:49Jason Calacanis?

  Pawn or queen? Hmm. What is that from? Is that from a movie? What movie is that from?

• 1:54David Friedberg?

  It's called the imposter syndrome.

• 1:58Jason Calacanis?

  Just like some French new wave I'm not aware of.

• 2:00Chamath Palihapitiya?

  This is how I I've learned that Friedberg's backgrounds is some like weird secret communication language. There's a small but fervent group of people that are really into these backgrounds. They're always trying to figure something out.

• 2:12Jason Calacanis?

  Absolutely. Of course, with us again, Chamath Palihopetia, your chairman dictator. How you doing Chamath? Nice sweater.

• 2:19Chamath Palihapitiya?

  Thank you, sir. Good to see you.

• 2:20Jason Calacanis?

  You ready for?

• 2:21Chamath Palihapitiya?

  Excited to see you.

• 2:23Jason Calacanis?

  I know. Look at this. Three or four besties will be hitting the slopes.

• 2:26Chamath Palihapitiya?

  Three or four besties will be skiing together.

• 2:28Aaron Levie?

  Aaron might be there. Aaron, where are you going for the holidays? Oh, actually, I'm I'm we'll be in next week.

• 2:34Jason Calacanis?

  What?

• 2:34Aaron Levie?

  Well, there we go.

• 2:35Jason Calacanis?

  Oh, new bestie in. Aaron, are you staying in the town?

• 2:38Aaron Levie?

  Yeah, just at the hotel.

• 2:40Jason Calacanis?

  Okay, this is perfect. We're all gonna be there, bro. It's $2,000 a night. How many rooms you got with the kids and the fam? You have three?

• 2:47Chamath Palihapitiya?

  Bro, boxes at all time highs. Take it easy.

• 2:49Jason Calacanis?

  What did you do? Did you start buying Bitcoin with your treasury? How? What do you mean boxes at an all time high? Are you doing a Michael Saylor or something?

• 2:57Aaron Levie?

  You know, it turns out if if you were if you didn't get crushed during the post-COVID period, you can just keep keep cranking. So that's what we've been doing.

• 3:06Jason Calacanis?

  Oh, you've been building a real business. Of course, with us now, our new fifth bestie, Aaron Levie. He is the CEO of the publicly traded company Box, which means he's got the most to lose by coming here. So welcome back to the program.

• 3:20Chamath Palihapitiya?

  Centristax.

• 3:21Aaron Levie?

  Based on what you guys were just talking about before this recording started, I have no idea what what what we're in for. Yes.

• 3:28Jason Calacanis?

  Listen, we're living in an age of meme stocks and people selling convertible notes to buy Bitcoin for their treasury and then and then becoming a NASDAQ 100. It's that simple. Aaron, when you see a company buy billions of dollars worth of Bitcoin and get added to the NASDAQ 100, what method of suicide do you think of taking your own life with?

• 3:49Aaron Levie?

  There was a there was a brief week in in 2021 where where the thought kind of crossed my mind. So.

• 3:55Jason Calacanis?

  Yes. Sapuku, you're just gonna use the sword, the short blade?

• 3:59Aaron Levie?

  We have a very sophisticated audit committee that that prevented the action. So.

• 4:05Jason Calacanis?

  Will you do this for me?

• 4:06Aaron Levie?

  Yeah.

• 4:07Jason Calacanis?

  Just do this for me.

• 4:08Aaron Levie?

  Yeah.

• 4:08Jason Calacanis?

  How much cash does Box have in the books? Ballpark.

• 4:13Aaron Levie?

  Well, we just did a convert, so we're probably 600, 700, 600 or 700 million.

• 4:17Jason Calacanis?

  Okay, here's what I want to do, a little experiment for next week. Just buy, put 5% of the treasury, 30 million in Bitcoin. And then we'll invite you back in two weeks and we'll see what happens. Okay, just put 5% of the treasury Bitcoin. Hey, everybody. Here's another announcement, a little housekeeping. As you know, we successfully got the all in dot com domain. That was a big victory for us. And we now have an email list. So four years into this, Mashugana, we now have the ability to take your email address and spam you with all kinds of great information like a notification when the pod drops. Wow, so compelling.

• 4:55Jason Calacanis?

  Insights from the besties, who you've had enough of. And first dibs on overpriced event tickets to come hang out with us. Wow, this is the compelling pitch we have for giving us your emails. So if you'd like to give us your email and get spammed, go to all in dot com and let the spam begin. All right, that's out of the way. Sax is out again this week. I don't know what's going on. We've been trying to figure out where he is. He's MIA. If anybody knows.

• 5:22David Friedberg?

  He's in DC this week. Yeah.

• 5:24Jason Calacanis?

  Oh, is that what's going on?

• 5:25David Friedberg?

  Did you see all the meetings?

• 5:28Jason Calacanis?

  I know, I'm being facetious. He's, he's, he's in meetings. Mr. Sax went to Washington, creating waves, but Mr. Sax is in Washington. And have you guys seen the photos?

• 5:40David Friedberg?

  Aaron, what do you think of, what do you think of Sax in this role?

• 5:45Aaron Levie?

  I think it's, I think it's a strong pick. So.

• 5:51Jason Calacanis?

  Let the genuflecting begin. Go ahead and say more, Aaron.

• 5:54Aaron Levie?

  So crypto, I'm a little bit indifferent on. You know, I, I haven't, you know, so we haven't spent much time there, leaned in much but there, but, but on AI. I think is a very, very strong pick. And I think you want somebody that is, you know, has a general sort of deregulation, anti-regulation bent at this stage in the evolution of the technology. I think there's risk of, of sort of slowing down too much progress right now. And I think that, I think he'll provide, you know, some good kind of parameters and principles around, around how to avoid that. So I think very strong. And then, you know, crypto, again, don't know, don't know too much about. And then we'll, we'll see the rest of the topics.

• 6:38David Friedberg?

  As a software CEO.

• 6:39Aaron Levie?

  Yeah.

• 6:40David Friedberg?

  Of a public company, when the Biden administration was putting forward their proposals on how to regulate AI and have definitions on the size of a model and what the models could or shouldn't do and the regulatory authority they would have over the software that's written, what was your reaction? And you were supporting Harris at the time, I believe, or Biden at the time, right? But like, how did you react to that when you saw those proposals?

• 7:04Aaron Levie?

  And just to be clear, are you talking about the EO that went out?

• 7:07David Friedberg?

  Yeah, there was the EO, but then they were also drafting, they, they published a lot of detailed drafting. And then obviously California had its bill, which you probably saw as well, which specified like the number of parameters in a model and the size of a model and.

• 7:20Aaron Levie?

  Yeah.

• 7:20David Friedberg?

  And all these kind of constraints.

• 7:22Aaron Levie?

  In reverse order was, was against SB 1047. It, it felt like, you know, you had two big issues. One, you probably don't want state by state legislation on this topic. That, that's going to be, you're in a world of hurt if, if every state has a different approach to this. And then second, secondarily, if you just look at how it evolved from the very first proposal to the final proposal, and unfortunately the kind of underlying philosophy that was in the, the bill, it was, it was very clearly a sort of like, like viewing, you know, basically AI progress as inherently risky right now. And so it just ratcheted up the, the different, you know, levels of consequence for the AI model developers. And, and the risk is, is, is sort of the second or third order effects of that, which

• 8:06Aaron Levie?

  is like, does Zuck then want to release the next version of Llama if you're taking on, you know, that much risk? And, and, you know, even the incremental updates, the liability you have. In terms of any of the model advancements. And so right now we're benefiting from just an incredibly competitive market between five or six players. And you want them running as fast as possible, not having to have sort of this, you know, a whole council before every model gets released because they're, they're, you know, in fear of getting sued by, you know, the government for hundreds of millions of dollars if one person does something wrong with the model. So that was the problem with SB 1047. That's been the problem with some of the, the proposals on national legislation. I felt like the first EO, it didn't have a lot of teeth in it. So, so it kind of was more like, let's watch, you know, this space and continue to study it.

• 8:51Aaron Levie?

  The actual current head of OSTP, Arty Prabakar, a lot of folks in Silicon Valley know her. She's actually very strong, very technical, you know, understands the valley well, is not a sort of, does not lean into overregulation. So I actually think OSTP has had a, a pretty good steward, even under Biden. But, but I think, you know, the, the efforts that, that Sacks would, you know, clearly be leading, I think would, would lean even more toward AI progress and, and sort of not accidentally overregulating too early in, in this journey.

• 9:24Jason Calacanis?

  So let me ask you a question then about crypto. You're not into crypto. Crypto is a little bit harder to regulate. So with Sacks being there, what do we think the one, two or three things he could do to actually make crypto not a scam, not have consumers get left holding the bag? Obviously sandboxing projects, maybe having people know your customer, you know, some basic regulation there. The sophisticated investor test comes to mind. Chamath, what do you think Sacks should do in terms of crypto regulation in the short term and the near term?

• 10:01Chamath Palihapitiya?

  That's a really good question. I think that today there are a lot of really valuable use cases that can sit on top of

• 10:13Chamath Palihapitiya?

  crypto rails. I think the most obvious one is how you can have real time payments using stable coins. I think the United States government is already using some of these stable coins for a bunch of purposes. The number of companies that are beginning to adopt and use stable coins is actually growing very quickly as well.

• 10:32Jason Calacanis?

  Take a second to define stable coins for the audience, just to get people out.

• 10:36Chamath Palihapitiya?

  Let me define what a stable coin is, which is that you put

• 10:41Chamath Palihapitiya?

  A dollar into a wallet somewhere and in return you get a digital token of that dollar. There are two big purveyors of stable coins. There's Tether and then there's USDC, which is this company called Circle. I think the easiest way to to disambiguate them is Tether is abroad. I think it's run out of somewhere in the Caribbean and USDC is American. It's run by this company called Circle. The other difference is that there is some ambiguity

• 11:15Chamath Palihapitiya?

  around how these assets are secured. So what a stable coin is supposed to do is when you give them a dollar, they're supposed to go and buy some short term treasury security so that that dollar is always guaranteed, right? Because if they, if you had a billion dollars of stable coins, but only 900 million dollars of assets to back them up, there's an insolvency risk there. There's a run on the bank risk, right? So theoretically, a billion dollars of stable coins should have a billion dollars of cash in some short term fungible security. What's incredible is at the scale in which these stable coins operate, that has turned out to be an enormous business. Why? When you give them a billion dollars and get a billion dollars of stable coins in return,

• 11:59Chamath Palihapitiya?

  they just go and put it into the bank. And you know, when interest rates are 2, 3, 4, 5%, they're making billions and billions of dollars. They get the float. They get the float. So these businesses have turned out to be incredible. But that's beyond the point. The point is that a lot of companies that you would never think. So for example, SpaceX uses these stable coins. How? How do you think they collect payments from all the Starlink customers? When they aggregate them in all of these long tail countries, they don't want to necessarily take the FX risk, the foreign exchange risk. They don't want to deal with sending wires. So what they do is they'll swap into stable coin, send it back to the United States and then swap back to US dollars. So it's a very useful utility.

• 12:40Chamath Palihapitiya?

  So number one is I think we need to make those rails the standard rails in the United States. And what that does is it allows us to chip away at all of this decrepit. Infrastructure that the banks use to sort of slow down and tax a process that should never have been taxed.

• 13:01Jason Calacanis?

  So this is good competition in a way, Chama.

• 13:03Chamath Palihapitiya?

  It's incredible.

• 13:04Jason Calacanis?

  Now the banks have somebody to challenge them for money transfer and money storage, and it could be regulated and stable. But I guess the question that, yeah.

• 13:14Chamath Palihapitiya?

  But that's the, that's the first thing. But then the second thing it allows you to do is you, you start, you can see a world where now you can have real competition against the traditional rails, specifically Visa, Mastercard, American Express. Because when you look at great companies like Stripe, I use Stripe, I pay them 3%. If I use stable coins from Stripe, I, I don't pay zero, but I don't pay 3%. It's kind of somewhere in the middle. If I was technically adept at implementing stable coins through the entire stack of, of my product. So I, I use it for this learn with me thing where we publish research. I would save a lot of money. So

• 13:51Jason Calacanis?

  Yes.

• 13:52Chamath Palihapitiya?

  The idea that you can take that 300 basis points you pay to these companies and crush it to zero would be a boon to global GDP, because that's 3% on many tens of trillions of dollars.

• 14:06Jason Calacanis?

  Aaron, you're shaking your head. This is a, something that you're experimenting with at Box, or you're aware of, or a problem that you recognize?

• 14:13Aaron Levie?

  No, no, just the, I mean, the credit card rails is, I mean, the tax on, on transactions is obviously insane. So, so the, the stable coin being the intermediary for that in the future makes total sense if you could get everybody to kind of coordinate against that. So, yeah.

• 14:28Jason Calacanis?

  Well, in regulating, it would get people off of Tether, hopefully, which has a checkered, colorful, sorted pass. You can go look it up. But they've had many, many legal

• 14:37Chamath Palihapitiya?

  But I think, again, I think it looks like they're

• 14:39Jason Calacanis?

  Passions against them. I'll leave it at that. Yeah.

• 14:40Chamath Palihapitiya?

  Yeah. But in fairness to them, I think, again, both of these two companies look, as of today, again, you have a jurisdictional issue difference. But as of today, it looks like they're both pegged one for one. But anyways, the point is, if, if Sacks can really push the adoption of stable coins, number one, and then number two is to incentivize much, much cheaper transactional rails, then I think he can go to Bitcoin and

• 15:08Chamath Palihapitiya?

  These other more long tail crypto projects off of the back of momentum because these first two things I think everybody will embrace and he won't get caught in a political quagmire. These other things you have these opponents always coming into the system and they have even Bitcoin. Like when I said this thing about encryption and quantum and even though I I thought I was very clear, the crypto community on the internet went absolutely crazy all last week.

• 15:38Jason Calacanis?

  Yes.

• 15:38Chamath Palihapitiya?

  Up in arms and yeah. But the thing is like some of the maxis piled on then when they actually took time to understand the technicalities of what I was saying, other people realized that was right, that they were tweeting it. My point is that world is so

• 15:51Jason Calacanis?

  Religious.

• 15:52Chamath Palihapitiya?

  animated and energized that I think it's hard to use them as the first place where you find progress. So I would tell Sax, go to stable coins, then disrupt the Visa rails and then go to the other stuff.

• 16:05Jason Calacanis?

  I would go stable coins and I would go even before that, the accreditation test that I've been talking about because the SEC has that mandate. People were educated, Aaron. They could buy crypto and know they're going to lose their money or know that something so fugazi or fugazi, whatever it is.

• 16:22Aaron Levie?

  Yeah, I mean, I I'm sure we want to move on, but I guess the so there's a there's a a parallel universe where where so no matter what, like obviously Gensler did not get his arms around this whole thing. So so that that was a big, big mistake. But there's sort of like, like DeFi slash financial crypto where where almost everything is is deflationary, it improves the rails. It, you know, if you believe in Bitcoin as this, you know, store of value and digital gold, like all of those things can actually kind of make sense and be a bit rational and like improve things. And then, you know, you know, unfortunately or not, depending on your views, there was this other sort of, you know, fractal event that happened, which was, oh, let's also use

• 17:06Aaron Levie?

  these things as a means of of kind of creating a virtual, you know, currency and and token equities and and tokens for anything where that then runs into.

• 17:19Aaron Levie?

  Basically, the SEC remit of like, are these things securities or not? And is there insider trading or not? And can anybody issue them at any time and promote them on Twitter or not? And so, so, you know, I think to some extent, if you could get back to like crypto 1.0, which was like, this is a, this is a financial infrastructure. I think you would have avoided a lot of the, the sort of noise and challenges with crypto. Now, I don't know, you can't put the, you know, you can't put it back in the bag. But, but there's like, I don't think you could get 10 crypto people to agree on how you regulate that second category.

• 17:48Jason Calacanis?

  Absolutely not.

• 17:49Aaron Levie?

  Because some people, some people believe I should be able to issue an NFT on anything, and I should be able to trade that. And, and, and at the same time, they would obviously, they would sort of claim, well, that's just the same as a, as an aftermarket, you know, a seat to a concert. And yet another group would, would be treating this as, as effectively, you know, a security. And so you, you, I don't know how you're ever going to reel that in without some people being upset, you know, within the crypto community.

• 18:14Jason Calacanis?

  Yeah. All right, well, more to come, and Sacks will be back. Sacks will be back, and we will be rotating the fifth seat amongst, you know, friends of the pod and newsmakers.

• 18:25Aaron Levie?

  Sorry, did I already, did I already get rotated out based on?

• 18:28Jason Calacanis?

  Well, yeah, basically, the energy was a little low, but, you know, I mean, it's just, I think, well, what's your?

• 18:34Aaron Levie?

  You already had to warn people that this is a-

• 18:35Jason Calacanis?

  What's your resting heart rate? What's your resting heart rate versus we're boys? And then we'll just make a decision based on that.

• 18:41Aaron Levie?

  Okay, okay, I got it.

• 18:42Jason Calacanis?

  All right, listen, Doge is fully operational. Elon and Vivek have helped kill the last minute omnibus spending bill. Wednesday night, the bill had been killed, and we were looking at the government shutting down starting Friday, December 20th. Today, when you are listening to this, for some quick background, in September, Congress approved a bill that would keep the government funded through December 20th, the day this episode published. Keep that December date in mind for a second. This Tuesday, December 17th.

• 19:15Jason Calacanis?

  Three days before the deadline, leaders in Congress unveiled what was presented as a bipartisan stopgap bill that would keep the government funded through March 14th. That kind of bill is called a continuing resolution. Basically, it gives you more time for the incoming GOP majority to reach an agreement on the funding for the government. But there are two major problems with the bill. It's a rushed job. It had to pass the House and the Senate by Friday night after being presented on Tuesday. It's absurdly long, 1,500 pages with $340 billion in spending, including pay raises and better healthcare benefits for the members of Congress. My Lord, read the room, gentlemen and ladies. Funding for a global engagement center for another year. That's the Disinformation

• 19:58Jason Calacanis?

  Watchdog Group that was wrapped up in the Twitter files. 130 billion to renew the farm bill for another year. $110 billion in hurricane disaster aid. Just money being thrown everywhere. A billion three to replace the Francis Scott Key Bridge in Baltimore. Vivek had some spicy comments on it. Congress has known about the deadline since they created it in late September. He said, "The urgency is 100% manufactured and designed to avoid serious public debate." But serious public debate is exactly what's happening on Twitter. People are screenshotting and using ChatGPT and Claude and Gemini to work their way through these documents. And it looks like this is not going to happen. Free bird, your thoughts.

• 20:41David Friedberg?

  So, the proposed bill made no real change to the current spending level of the federal government at roughly $6.2 trillion on an annualized basis, which by the way, is roughly, call it 23% of GDP. Just to give you some context, in 1860, nearly 100 years after the founding of the United States government, federal spending to GDP was less than 1%. And it took off during the Civil War for a couple of years, but you know, we're at these kind of like unprecedented levels year after year now, really speaking to how the federal government has grown, as we talked about many times, so much in our life.

• 21:24Aaron Levie?

  Our roads were really bad back then, though.

• 21:27David Friedberg?

  Yeah. Yeah, our roads were really bad back then. Lots of hurdles. But remember, the objective of the republic was to have the states make local decisions about how to take care of their infrastructure. The national highway effort obviously changed that in the mid 20th century. But this was kind of the original intention of the republic. It wasn't to have the federal government come in and employ people, provide insurance to people, provide energy markets to people, own football stadiums, et cetera, et cetera, et cetera. You go through the list of things in this bill. I think the $100 billion of natural disaster relief, everyone says, that seems very reasonable. That's something the federal government should do. When we have a natural disaster, we need help, we need support.

• 22:12David Friedberg?

  That's a great thing for the federal government to do. But think about the incentive it creates. It distorts markets. So we've talked about this in the past. In areas where you have a higher probability of natural disasters and people have paid a lot of money for their homes, pay a lot of money for infrastructure, should the federal government come in and rebuild those homes and provide capital to those individuals and those businesses to help them rebuild those homes if there's a high probability of natural disaster events happening again in the future? It means that the cost of insurance doesn't matter and the cost of real estate doesn't matter because the federal government effectively can come in and support those prices. In the same way, the federal government comes in and supports the prices in agricultural products through the work in the farm bill and through the biofuels mandates, which were also proposed to be extended in this thing.

• 22:56David Friedberg?

  So the federal government's playing both a market role and also kind of this role that I think fills the gap where people want to have a customer where there isn't a customer and an employer where there isn't one. So like, how did we get to this point? So from a first principles perspective, we've kind of, I think, lost the narrative on what the federal government was meant to do. If you think about the simple rubric in a bill, like just go back some period of time and someone says, hey, I want something, I want to have this in this bill. And you're the representative that's supposed to vote on that bill and say yes or no. It's very hard to just say, no, we are not going to spend that money. What's the incentive to say no? The alternative is you say yes, but give me X as well.

• 23:39David Friedberg?

  There is an incentive in that response and the incentive there is to get something for your electorate, the people that voted you in as a representative of the House, which is how we ended up at this point where everyone says, I want something if you're going to get something. And eventually the government, the federal government swells to spending roughly 24% of our GDP. Now, the biggest mistake I think the founding fathers made was that they didn't create constitutional limits on spending and enrichment. And this was because they had these deeply held philosophical beliefs that relied on the House of Representatives to provide a check by the people. If you read the Federalist Papers, and I went through a couple of these recently, and I use ChatGPT to help me kind of, you know, bring out some of, I think, the key points.

• 24:22David Friedberg?

  But in the Federalist Papers 10 and 51, James Madison emphasized that the structure of government was meant to ensure that both state and federal governments would limit each other's excesses, including their financial ones. And then in the Federalist Paper number 58, he said, "The House of Representatives has control over the quote, 'power of the purse,' which gives the people's representatives authority over taxation and spending." But they also warned, along with Alexander Hamilton, of the dangers of unchecked government power through burdensome taxation and excess spending, which would ultimately erode individual freedoms. So they recognized that there were going to be limits, but their expectation was that the House and the individuals that were electing people to the House that were members of

• 25:06David Friedberg?

  this republic would come in and say, "We're going to keep that from happening." And clearly, something went wrong along the way that we got to this point where, again, spending is 24% of GDP. And I think that the biggest thing they got wrong was that they didn't create these constitutional limits on federal spending or taxation through either a balanced budget structure, spending as a percent of GDP, no federal debt or term limits, or all of these other mechanisms that could have been introduced at the beginning that could have created some structural limits. Instead, they assumed that there was this natural limit that would emerge as a function of the democratic process because of how they formed the government. But unfortunately, I think they failed to realize

• 25:46David Friedberg?

  That the electorate would eventually not want the freedoms of the people of the time. Back then, in 1776, this was a pioneering country where everyone wanted to come here to have freedom to do anything they wanted, everywhere they wanted, to build a business, to homestead, to be rugged individuals.

• 26:06Jason Calacanis?

  It was entrepreneurial, yeah.

• 26:08David Friedberg?

  It was. And over the last 250 years, we've gotten used to an increment in lifestyle every year and discovered that we have a mechanism to force the increment in lifestyle through the actions of government. And so the electorate has stood up and said, I want more each year and I want the government to provide it for me if the free markets are not doing it. And that's really where we kind of got to this point where I think we elected people to the House who ultimately had this incentive that said, if I give you this, I need to get this. And we ended up swallowing this. So I don't know if it cracks with Doge. I really don't know if people step up and recognize the limits of government and what the limits should be of the federal government on an electorate basis. It's an amazing moment to see that Elon went on Twitter and said, hey, guys, this is nuts. And everyone said, this is nuts.

• 26:53David Friedberg?

  We're not going to elect you if you do this. If that momentum and that transparency can keep up, I hope that people start to connect the dots. This isn't a free lunch, that the federal government's spending is not limitless and it's not unaccountable.

• 27:05Jason Calacanis?

  Aaron, I think we have enough people who are notable now, speaking up about this excess spending and the out of control debt, that it's now in vogue to talk about austerity, to talk about inefficiency. And that really all comes back to Doge and, dare I say, you know, the conversations we've been having this podcast for two years, that this is becoming acute. What are your thoughts on this vibe shift, this complete pivot?

• 27:33David Friedberg?

  Yeah.

• 27:34Jason Calacanis?

  Where we've gone from, my Lord, everybody's saying, I gotta get mine. You got yours, I'm getting mine, to... Name and shame. They're naming and shaming now very specific pieces of pork in these bills, you know, including stadiums for the NFL. And people are like, why is the NFL getting this if they're worth 20, 30, 40 billion dollars?

• 27:55Aaron Levie?

  Two, just quick thoughts. One, Patrick Carlson had a tweet yesterday that basically said this sort of this, this big misinformation kind of created by, by people that want to be slow is that you, you have to sort of choose two of fast, good and cheap. And, and I think basically, you know, Elon's companies have sort of always effectively kind of proven the opposite, which is, which is actually, if you just like start to ask the question, like, why does that thing have to cost as much? You know, if you're building a rocket or designing a car or developing batteries, like why, you know, if you just do ground up, why does that have to cost as much? And so, so what's interesting is, is that, that probably if most people looked at what the government was spending on, they wouldn't even feel like, like, you know, it's

• 28:38Aaron Levie?

  not even helping them in like the disaster relief sense of, of, you know, I think like that, there are probably actually people that actually do experience the benefits of disaster relief. It's actually just all of the, all of the overhead that we've created to getting anything done in the government that could actually make the government better serve that all of, all of the constituents. I was talking to, you know, sort of a nameless individual in the government the other, the other week, where by Congress, they have to hire contractors to do work and the contractors, the contracting firms charge them two and a half times the, the sort of cost of, of an individual employee that they could otherwise hire. And so, and so now, now they have to outsource the work and they don't have any accountability mechanism

• 29:21Aaron Levie?

  for that contractor. And so I think there's not a single American that could look at that and say, and say, this is like actually working well. Like,

• 29:29Jason Calacanis?

  Yeah.

• 29:29Aaron Levie?

  We, we are spending more money to do less and the ultimate outcome is actually lower quality. And so, so you have to at some point just kind of do a little bit of a reset moment. And that's obviously the, the upside of Doge is like, it's like, it breaks every rule of us thinking about how, how you would actually go and attack this problem. We thought you'd attack it through meetings and, and we would do it through, through congressional, you know, sort of processes and, and research. And it's actually just, it is, you know, obviously a much more sort of founder startup oriented way to approach this. There's going to be lots of things that are broken glass around the edges. There's, there's no question. But I think what's interesting about this week's event is I think that there's been this underlying kind of notion of like, you know, Elon and whatnot

• 30:13Aaron Levie?

  at all, you know, don't understand the government enough to be able to change it. And it might actually be the case that the government doesn't understand Elon in the sense of like, he will just see this thing through. And the tools at his disposal and Doge's disposal is sort of, you know, completely unprecedented in terms of the ability to put any, anybody in Congress on notice if, you know, if basically they are promoting things that are not making the country better. So, so the, you know, the thing that we saw this week was actually that playing out. Everybody's been wondering, well, what are the actual, you know, what are the formal mechanisms Doge has to accomplish and enact change? And it's like, you just saw it, like, they can just, they can just create enough visibility

• 30:55Aaron Levie?

  and spotlight on the problem that it causes a level of discomfort in, in supporting moving forward with, with whatever that thing is. And so I think it's interesting. I have no opinion on the actual elements of the bill, other than from a process standpoint and a, and a new kind of case study of, of how this is going to play out is I think we're seeing some early indication of what Doge will, will be able to do.

• 31:17David Friedberg?

  Aaron, how do you feel about this Doge effort? As someone who is a public Harris supporter, so you've come out, I think you've, you've been public about this, but I want to understand like, why people wouldn't be supportive of this effort, right? Like, like what is, like, what is the motivation for people saying this isn't a good thing? We shouldn't be doing this. Like, because there's a lot of folks that have gone on these shows. It's like they, they blast Elon, they blast Vivek, but like, aren't these principles, like, shouldn't they just be universal that we should not be wasting money and stuff?

• 31:50Aaron Levie?

  Sure, of course. The, now, I mean, so to give some credit, you know, you have Ro Khanna supporting it, you have Fetterman supporting it, Bernie Sanders, you know, everybody has their-

• 32:00David Friedberg?

  Yeah, Bernie Sanders had a good call out for Elon.

• 32:03Aaron Levie?

  You have, everybody has their thing in the government budget that they don't like. So assuming that they see that as something Doge can contribute to, you could probably get actually broad support. You know, there's a classic, you know, sort of reflex within, within probably Democrat Party on, at this point, just because of Elon's support of Trump, that, that if something is a, is an Elon project, they're gonna, they're sort of gonna instantly respond, no matter what the thing is, as a negative, without, you know, kind of actually saying, is this, this is actually support, actually something I do agree with.

• 32:33Jason Calacanis?

  And so that's all partisan, none of its first principles, right?

• 32:37Aaron Levie?

  Yeah.

• 32:37Jason Calacanis?

  I mean, for these people, for this group of people, which isn't everybody.

• 32:40Aaron Levie?

  That's going to be true of both sides, like Michelle Obama, Michelle Obama was like, let's get kids healthy and all of a sudden now it's in vogue to do that. So, so I think, I think we're just in an environment where, where any, anything will become partisan. What's interesting is, is that because of the, you know, some of the, the cross-party elements of, of, of Trump and now his cabinet is it might pull in more, more of the Democrat party than, than would usually happen. And, and I think because of Elon and the people that are surrounding Trump, you probably have a bit more air cover for the Rokanis of the world to also step up because if it was like Steve Bannon and Trump doing Doge, it would be like, ah, okay, you know, maybe this is not the thing to, to, you know, lend credibility to for, for pure political reasons.

• 33:23Aaron Levie?

  If you have, you know, some of the best entrepreneurs that are, that are out there actually like literally in the cabinet driving this, at some point, you know, it's, it is an IQ test if you're, if you're on board or not.

• 33:34Jason Calacanis?

  Chamath, this is a sea change that we're seeing and to Aaron's point, this administration gets to pick their priorities, but everything can't be a priority or it's not a priority. Therefore they've picked the priority of smaller government, more controlled spending over say mass deportation or removing more rights from women to choose when they have an abortion, et cetera. So this seems like a distinctly different focus for Trump 2.0, the second term. What are your thoughts on what we saw this past 72 hours with relation to this bill?

• 34:06Chamath Palihapitiya?

  It was the most incredible change in how politics will be done going forward. I think that people are probably underestimating what happened here. This was a multi-hundred billion dollar grift that was stopped on a dime over 12 hours of tweets. You would have never thought that that was possible. The point is to put a dagger in something that big, that had so much broad support just a few hours earlier. I think it's so consequential in how the United States can run going forward.

• 34:48Jason Calacanis?

  So building on what you said, Chamath, also very interesting here is the fact that Trump hasn't taken office yet and they're having this huge impact. This is occurring a month before he's even in office. If they can stop this, what will they do when they actually are in power?

• 35:04Chamath Palihapitiya?

  I think right now you're seeing the first order reaction, which is about the bill itself. And I think that misses the point. The bigger issue is going forward, you will have the ability to, and part of it is because we have a set of tools now that allows us to do this, to read 1,500 pages in a matter of minutes, to summarize it into the key essential elements, to really understand what's being asked and what's being offered. And then to put it in a digestible format that normal people can consume. Then all you'll have to do is just connect the dots and tell your congressman or congresswoman that you'd like or dislike this thing. And what you're going to see is a much more active form of government. And I think that's the really big deal.

• 35:50Chamath Palihapitiya?

  The fact that it's, it really becomes the voice of the people. Now, the alternative can also happen. Imagine there is a piece of legislation that is very controversial, but it turns out that people actually want it. Then the opposite will also happen and can also happen now. So I think that it's a very nuanced and interesting way that governance can happen. The other thing that I'll say though, which is funny is we should have a segment called "Today in Hypocrisy." And if I was running the segment, what I would say is today in hypocrisy, you have a group of people, i.e. the Democrats, who are very upset and who now point to Elon as sort of like some

• 36:33Chamath Palihapitiya?

  shadow cabinet minister, or some shadow president-elect, or some shadow first buddy, right?

• 36:39Jason Calacanis?

  First buddy. I love that.

• 36:41Chamath Palihapitiya?

  Except then I thought to myself, well, hold on a second. Like there was like some, something untoward happening in the shadows. And I thought, well, actually, this is the exact opposite. The guy is tweeting in real time, his stream of consciousness. You absolutely know everything that he wants because he just lays it all bare. And at the same time, I thought it was really interesting. The same people who were saying that were the ones that finally admitted that they were hiding Biden for the last two years. And I thought, did we just miss this? Like the same people that are like, hold on Elon, I don't like the fact you're telling us what you actually want on Twitter transparently, while we hide our president of the United States in a box.

• 37:22Jason Calacanis?

  Well, yeah. So you're referring to a Wall Street Journal story that broke, uh,

• 37:25Chamath Palihapitiya?

  This week in hypocrisy, Jason, take it away.

• 37:28Jason Calacanis?

  Yeah. I mean, it was just, as we said on this pod, we knew that they were hiding him. Now, the cover up is worse than the crime and the cover up is a cover up. They were not letting him take meetings. They were limiting access to him. Dean B. Phillips came on this program. Shout out to him. Congratulations on a great run. You know, he, he just told the truth here. He's not up for it. He's sundowning, you know, terrible situation. People get old and people have cognitive decline. The end.

• 37:59Chamath Palihapitiya?

  Question, hold on a second. So just to contrast and compare, Trump is not even in office, you know, Elon is not a member of the cabinet per se. These are effectively today, still private citizens. When there's all of this noise about what happened over the last two days to stop an absolutely ridiculous pork barrel bill. But when are we going to double click into what decisions have been made in the last two years that were actually Bidens versus surrogates that just decided? And who gave them the authority to make those decisions?

• 38:30Jason Calacanis?

  If they're going to do, Aaron, and you and I are left leaning moderates, I think that would be the most accurate way to describe us. I mean, if they want to do an investigation, there should be an investigation to, did they know that he was in massive cognitive decline and let him stay in charge of the nuclear codes? Do you agree or disagree?

• 38:50Aaron Levie?

  This is, uh, this is sort of not, not the part of politics I, I think about as much. So I'll, I'll leave that up to you as the other left-leaning moderate. So, yeah.

• 38:58Jason Calacanis?

  No, I just wonder if like this is a crime that they, like, what if it turns out he actually has Parkinson's or Alzheimer's, like a diagnosis? It's not out of the realm of possibility that they covered up an Alzheimer diagnosis, Chamath. And if they did, is that criminal?

• 39:16Jason Calacanis?

  I mean, it's unethical.

• 39:18Chamath Palihapitiya?

  It's deeply unethical.

• 39:20Jason Calacanis?

  Yeah.

• 39:20Chamath Palihapitiya?

  It's very dangerous.

• 39:22Jason Calacanis?

  Yes.

• 39:23Chamath Palihapitiya?

  Again, it just goes back to, the people elected Joe Biden. He won fair and square. He ran on a specific mandate that the people endorsed. I just think it's devious, though, that certain figures in that White House took a level of power and decision-making authority that they were never entitled to. If, if they wanted that, they should have run and they should have been elected. That's what we all sign up for. And so I think that that idea that we let that happen, or that that happened to the American voting public, is, I think, very unfair. That's why I think you have to realize that, and you've said this before, we need these checks and balances going forward.

• 40:06Chamath Palihapitiya?

  And I think the way that you have these checks and balances, again, is veer towards transparency. The more transparency there is. And again, this is where I'll say, you may or, you may or may not like Donald Trump, but the one thing you will never have to be worried about is whether you will not be able to hear from him in first person.

• 40:26Jason Calacanis?

  You're gonna hear from him? That is absolutely true. I mean, simple suggestion here, Chamath.

• 40:31Chamath Palihapitiya?

  If you're ever in doubt, you will be able to know very quickly where he stands on whatever topic is important to you. And I think that that idea is very important, because then if it's filtered through somebody else because of some health issue that's then covered up. We're making decisions that impact the entire world. We're making decisions that impacts the economy. We're making decisions that touch hundreds of millions of American lives. Who are making those decisions?

• 40:59Jason Calacanis?

  Yeah, it's kind of crazy. I have a simple suggestion here with these bills, by the way, when they're 1500 pages. How about for every 100 pages you release, you have one day of review? So if you want to release 1500 pages, 15 business days of review, does that sound reasonable? Maybe three weeks? And then just stop doing 1500 at a time. Break these things up into 200 or 300 pages at a time. I just love the fact that people are motivated and they have the will and the desire to focus on these, focus and desire, because people have to have the will. And people did not have the will to get in the weeds and examine the spending. And now it's becoming like in vogue, it's becoming a pastime to question the spending. This is a really great moment in time for America.

• 41:42Chamath Palihapitiya?

  The other thing, Jason, that we haven't done is I think that killing the bill was step one. The thing that America has not yet seen, and I think Aaron brought this up with the Patrick Collison tweet, which is just excellent, Nick, if you just want to put it up there. It really is true. America still believes that the more you spend, the more you get. We do. At the core, that's why there are 1500 pages of spending in here. Because people want things, because they want things to be better. What we need to train people to understand is actually that it's the lies that are told that make you think that with more money comes a better outcome. And we see it every day in Silicon

• 42:24Chamath Palihapitiya?

  Valley. We all start with next to nothing as a startup, and we outmaneuver and we out execute companies all day long with way more resources. So it has nothing to do with the resources.

• 42:35Jason Calacanis?

  Contraint leads to great art. Aaron, your thoughts?

• 42:37Aaron Levie?

  No, I mean, I can't add that much more to this. I think it's, there's probably a little bit of a disconnected times from the, let's say, the voting public and, you know, broad constituents from then those that have sort of seen this in real life, being inside of a company, having to, you know, do a startup and scaling up and, and just this, the perverse incentives to build bigger teams, spend more, your project then is more important, the more dollars it gets. We have all of these systems in place, which is the stuff that gets attention are the things that you spent more on. So you have all these weird incentives to actually have your thing literally cost more, to have, you know, more overhead because you've brought in more contractors

• 43:19Aaron Levie?

  into the project that then, you know, you're going to get some, you know, kind of future benefit from in some way. So you have a lot that is sort of fully broken in this and, and there's no, there's, there's, you know, it's hard to imagine any other way to veer off from that path other than something that does shake things up, you know, as much as Doge is doing.

• 43:39Jason Calacanis?

  All right, listen, we can't do any worse than being massively in debt. So just let's have a culture of

• 43:44Chamath Palihapitiya?

  Yes, you can. No, yes, you can. You could, you could have runaway debt.

• 43:48Jason Calacanis?

  Yeah, I think we already have that. I mean, we, this is for, for people who maybe are rooting against Trump in the audience or rooting against this because they're super partisan. All I'll say is I know these individuals around Trump, root for them and root for this process, please, because this is a path to fixing the most acute existential problem we have, which is our debt. You don't have to like Trump to like Elon, to like Vivek, and to like these other individuals, Sacks included. There are great people who are being called to serve. Let's judge them based on their performance. That's all I ask for the people who hate Trump, who hate these individuals, judge them on their performance. They've come out with a bold plan,

• 44:30Jason Calacanis?

  let them cook. Once they've cooked, then judge their results. That is what I'm telling everybody who hates Trump and who hates this administration and who's partisan on the other side. Let them cook, judge the results.

• 44:42Aaron Levie?

  I'll just throw out one more, one more thing in this because I think Doge has, the branding of Doge is, is often the efficiency side, which people always go to the, the spend side. But the corollary to that is the regulations that, that obviously are expensive to maintain. And, and that's what creates layers and layers of overhead on reviewing everything that's coming in then to the government. And unfortunately, we have great examples in California where literally we spend more to do less. And it's because we've ratcheted up these layers and layers of regulation. And I have friends literally doing climate tech. In like, climate tech, you couldn't imagine something more probably left-leaning Democrat that they can't actually get things done in

• 45:26Aaron Levie?

  California, the state that you would imagine to be the most kind of climate-first, you know, friendly state because of the amount of regulation that prevents them from getting things done. So, you know, there's actually this like, you know, total combination of actually fewer regulations, you'll spend less money in government, you'll actually grow the economy faster, which will create more jobs. Like, all of the things get solved the more efficient you get, you know, kind of writ large on all of the topics.

• 45:55Jason Calacanis?

  So this is spending. Great point, Aaron. Regulations next. Let's see what they do there. I was in the room when Antonio Gracias was doing zero-based budgeting at Twitter, now X, and Sax and I were looking at roles for people. What this team can do in terms of making things more efficient, it's amazing what can happen when you do zero-based budgeting. And when you just think from first principles, well, do we even need to do this? Does this need to exist? Take all these regulations, put a 20-year clock on half of them, a 10-year clock on the other half.

• 46:29Aaron Levie?

  Can I just get one more random example? Feel free to edit it out. Chamathia liked this because it came out of Meta. Have you followed the Z standard compression library from Meta? So, this open source library, kind of a next-gen compression on data. And we finally, it took us, you know, probably too long, but the team worked insanely hard, implemented this compression algorithm. We literally, our uploads and downloads got faster. We spend less money on networking and compute. And it, you know, took some reengineering of the system. But like, that's just not a concept that people go into problem solving with, which is like, what if the thing actually was cheaper to run and it was better? And so, think about all the systems of government that could be, that could just be upgraded, and then you would spend less money actually maintaining them. I mean, we

• 47:13Aaron Levie?

  spend, you know, hundreds of billions of dollars, way too much, on legacy infrastructure, technology. We could automate more, you could spend way less money and then get better outcomes. So this is just happening everywhere. And I don't think people realize the scale of the opportunity. So.

• 47:27Jason Calacanis?

  And I'll just give an example. When we went into Twitter, nobody was coming to the office. There were people who hadn't committed, who hadn't come to the office, who hadn't committed code in six months. So what were they doing, right? So you start looking at the data, then they were spending an enormous amount of money on SaaS software that nobody had logged into. And then they had desk software for route people around that was costing $10 per day, per desk, per, you know, location, whatever. Nobody was coming to the office, but they were paying for software to route people to the right desk in office meeting. The waste, when I tell you the waste and the grift, and I'll just call it what my interpretation is, stealing. They were stealing from those shareholders. The government is stealing

• 48:11Jason Calacanis?

  from taxpayers. It has to be fixed. Let our boys cook. Friedberg, you get the final word before we go on to Conspiracy Corner. You got nothing? All right, let's go straight to Conspiracy Corner. Everybody put your tin foil hats on. There were drones over New Jersey Thursday morning. The FAA banned drones. This is breaking news in parts of New Jersey until January 17th due to quote unquote, "breaking news," special security reasons. They also warned that the government may respond with deadly force against drones posing a threat. This thing is getting crazier by the day. There have been thousands of reported drone sightings in New Jersey and bordering states over the last week. Here's

• 48:52Jason Calacanis?

  some examples. Play the clip, yada yada. Until Thursday morning, White House officials have been dismissive, saying repeatedly that nothing significant is going on. One of the theories was that there was a, that the drones were looking for nuclear material, AKA a dirty bomb, or lost radioactive material, or the ultimate, a lost nuclear bomb from, like an actual nuclear warhead from Ukraine. On Tuesday morning, the mayor of Belleville, New Jersey suggested the drones could be looking for that radioactive material that went missing on December 2nd. That was radioactive material germanium-68. We'll get details on that from Friedberg in a moment. And then, of course, conspiracy theories are going wild.

• 49:36Jason Calacanis?

  It's Iran, it's UFOs, and my favorite, Project Blue Beam, which is that NASA is using holograms and other technology to create a new world order and religion and projecting Jesus into the clouds. You can look that stuff up, or we'll have Alex Jones on in Sacks's seat one week. Okay, Friedberg, you're the genius here. Tell us what's going on.

• 49:56David Friedberg?

  I think there are three likely explanations. The first is that the government's got some activities that can't be disclosed. So we don't know, and they can't talk about it. No one can neither, you know, say yes or say no to it. So, you know, that's kind of one that that's pretty possible. The second is these are just individuals with a bunch of drones messing around, having fun, trying to wreak havoc, could be fun, a bunch of kids. I think we've all been there. The third is what I would call kind of a bit of a more nefarious, like, this is my conspiracy theory. I think it it could be considered a psyop. Okay, so right now, the US has a significant regulatory burden on on drone utilization in a commercial setting. And it's very hard to use drones.

• 50:41David Friedberg?

  You have to have line of sight to the operator. These things aren't supposed to go on their own. There's all these rules and restrictions and so on and so forth. Meanwhile, you've got countries like China rocketing ahead. So I don't know if you guys know the company Meituan in China, you know, the food delivery company? Have you guys, do you know that they do a large amount of drone delivery of their food now?

• 50:59Jason Calacanis?

  Was not aware of that. We're testing that here in the US.

• 51:02David Friedberg?

  The drone delivery business in China is already $30 billion a year. And they're also launching a pretty significant fleet of what we would call kind of the EV Tolls or flying cars. The expectation is that by 2030, there'll be 100,000 flying cars moving people around in China. And these are huge efficiency gains. In fact, with Meituan, you can now order food while you're on the Great Wall at one of the ramparts, and it'll bring, the drone will bring the food to you while you're walking the Great Wall as a tourist.

• 51:31David Friedberg?

  And in the US, the reason that these things haven't taken off and the reason we don't have a large kind of drone industry, which is clearly emerging and is going to be a huge economic driver for China and others around the world, is simply the regulatory restrictions. And so if you were going to try and mess with the US's ability to move forward with the drone economy, you would probably try and wreak some havoc, stoke some fear and get people to say, hey, this doesn't seem cool. What's going on? I don't like that there's all these drones in the sky. I'm freaking out. And try and get the regulators to come in and say, hey, we're banning drones and set up everyone, including the people in the government, to say, we should take a beat. We should think a little bit before we deregulate. We should-

• 52:14Jason Calacanis?

  Who would do this? Who's the motivation? Uber Eats and Postmates?

• 52:17David Friedberg?

  No, no, no. I'm saying, no, no, no. It could be the other government. That's my psyop point. This could be a psyop-

• 52:23Jason Calacanis?

  Oh, you're saying this could be China doing this to try to slow down our economy?

• 52:26David Friedberg?

  Think about it. If you're going to pass a bill in Congress to make drones more freely roamable in the skies, you're going to reference back this crazy story in New Jersey. Everyone's freaking out about it. And you're going to say, hey, wait, what about all that stuff that happened in New Jersey? Maybe this doesn't make as much. People are kind of scared about it. We shouldn't rush. We shouldn't rush. We shouldn't rush. That would be my psyop theory. That's my, you know, kind of conspiracy theory tinfoil hat. I don't often do them. But that's what I would kind of think about. I think the first two are probably more likely.

• 52:54Jason Calacanis?

  Alex Jones would be proud. Aaron, why don't you jump the fence and tell us your best conspiracy theory of this?

• 52:59Aaron Levie?

  No, no, I'm- This is, that was all crazy pills, what I just heard.

• 53:02Jason Calacanis?

  Yeah, take some.

• 53:05Aaron Levie?

  I think there's like, there's like 10 higher psyops you would do if you wanted to get us to, you know, have a collapsing economy than going after drone deliveries. But, no, I-

• 53:14David Friedberg?

  What would they be? What would they be?

• 53:16Aaron Levie?

  I mean, well, first of all, I think, I think you'd have AI like, like do a robot that would-

• 53:21David Friedberg?

  I like conspiracy corner.

• 53:22Aaron Levie?

  I think you'd have a robot AI thing that goes, you know, runs amok.

• 53:25David Friedberg?

  That's a good idea.

• 53:26Jason Calacanis?

  Oh, rogue robot, Robocop. Yeah.

• 53:27Aaron Levie?

  Yeah, I think that would be way sooner than you worry about food delivery.

• 53:30Jason Calacanis?

  No, you have 10 self-driving cars hop the, you know, hop the curb and crash into a storefront. Self-driving is on ice for two years. That would be, you know, an example. Chamath, your thoughts? You got some conspiracies here? What do you think's going on here?

• 53:45Chamath Palihapitiya?

  No, but I thought that the most credible thing was that they were they were looking for radioactive material that somehow some got lost and.

• 53:56Jason Calacanis?

  Why would they only look at night? Actually, it's interesting you say that. There was somebody on Twitter X who claims to be an expert in this field and there's a startup, actually, that I just talked about him.

• 54:07Chamath Palihapitiya?

  Which one? Ken Koa the Great?

• 54:09Jason Calacanis?

  I think it might have been King Koa the Great. Shout out to King Koa the Great and his mom's basement eating pizza bites.

• 54:13Chamath Palihapitiya?

  Why do you hate Ken Koa? He's an expert.

• 54:14Jason Calacanis?

  I don't hate Ken Koa. I don't hate Ken Koa. Ken Koa tried to get me banned because he said I was trying to dox him.

• 54:20Chamath Palihapitiya?

  You always can't Ken Koa. He's great.

• 54:22Jason Calacanis?

  No, I just think it's his lyrics that people are retrading Ken Koa the Great as if he's like this great journalist and he's in his mom's basement eating Hot Pockets or he's working for Putin.

• 54:33Chamath Palihapitiya?

  He's a really good.

• 54:33Aaron Levie?

  I don't know. Do I want my news from J Cal or Ken Koa? I don't know.

• 54:38Jason Calacanis?

  I don't know. Who do you take? I mean, your experience there is pretty good. You like Ken Koa?

• 54:42Chamath Palihapitiya?

  I subscribe to Ken Koa.

• 54:44Jason Calacanis?

  Yeah. Aaron Levie, you have a favorite? Who are you? You autism capital or Ken Koa?

• 54:48Chamath Palihapitiya?

  Oh, I like autism capital too. I think he's really good.

• 54:51Aaron Levie?

  I'm liking Geiger these days.

• 54:53Jason Calacanis?

  Oh, you're into Geiger?

• 54:54Chamath Palihapitiya?

  Geiger capital. Geiger capital is good.

• 54:56Aaron Levie?

  I read them all.

• 54:57Jason Calacanis?

  VC Brags. VC Brags.

• 54:59Aaron Levie?

  I think the nighttime thing would be it would be at least typical of this government to do a Streisand effect of of just like, maybe if we cover it up, nobody will see. And then obviously it's the biggest thing. So.

• 55:09Jason Calacanis?

  Yeah, and they've got all these lights on them. Yeah.

• 55:13Jason Calacanis?

  But if they, there is a startup that makes, we really looked it up. And there is a startup that makes drones to do this specific task to look for dirty bombs in ports and ports, obviously, look for these things. It's a known threat. This is not rocket science.

• 55:30Chamath Palihapitiya?

  And why? And why only at night? Did Freebo question?

• 55:33Jason Calacanis?

  Because that they can read the signatures better was the theory, that at night you can read the signature, which doesn't make sense to me. Science guy, you want to come in here?

• 55:42Aaron Levie?

  I don't see how night, I don't see how nighttime you'd get a better read on radioactive material. It doesn't make any sense. So.

• 55:49Jason Calacanis?

  That made no sense. That's sound like a crazy thing. But anyway, we're living in crazy times. Speaking of crazy.

• 55:55David Friedberg?

  By the way, that was my first conspiracy theory in 208 episodes of the All In Pod, so.

• 55:59Jason Calacanis?

  Very nice. I actually can participate in Conspiracy Corner now. I'm coming back next week with a better one.

• 56:07David Friedberg?

  Okay, J Cal, read us some more news. Go to Google News and read us some more news so we can do another topic.

• 56:11Jason Calacanis?

  Jesus Christ, man.

• 56:12David Friedberg?

  Read a [bleep] article for us. Go.

• 56:14Jason Calacanis?

  No, you do it. Go ahead. No, no, you got the document in front of you, dipshit. Okay, so today, the Dow Jones Industrial Average is up 23,000 to 44,000. I tried to highlight. You guys make you look good. Gary Gensler said he's super happy. Yeah, I'm going skiing. That's enough. I'm going skiing.

• 56:29Aaron Levie?

  I thought it was cool how he read the entire congressional bill earlier.

• 56:32Jason Calacanis?

  Yes, all 1,500.

• 56:34David Friedberg?

  J Cal loves to filibuster.

• 56:36Jason Calacanis?

  I'm not filibustering. All right, listen. Here, let's do another story. Let's see if you can contribute something. OpenAI update, Meta's letter. Your contribution was amazing. I was actually using ChatGPT to go into the to go into the founding fathers' papers and yeah, I was reading the Federalist Papers with Gemini. 13 and number 44. I would like to quote from Hamilton the Musical.

• 57:03David Friedberg?

  Hamilton the Musical.

• 57:05Jason Calacanis?

  I was comparing the lyrics from Hamilton the Musical.

• 57:09David Friedberg?

  Oh my God. Hey, Nick, can you send J Cal another Yahoo News article? Let's get going. Come on.

• 57:14Jason Calacanis?

  Yahoo.

• 57:22David Friedberg?

  Can't wait. Can't wait to see you [bleep] tomorrow. Let's go, Nick. Come on.

• 57:25Jason Calacanis?

  Oh my God. Can we just end it here?

• 57:28Aaron Levie?

  Yeah.

• 57:30Jason Calacanis?

  No, do it. Do it. Because I want to talk about OpenAI.

• 57:32David Friedberg?

  You want to talk about OpenAI? You do?

• 57:33Jason Calacanis?

  Yeah.

• 57:34David Friedberg?

  Give him his red meat. Give Chamath his red meat.

• 57:36Jason Calacanis?

  All right, here's an update on closed AI flipping and Sam Altman, supervillain Sam Altman secure in the bank. Meta wrote a letter, California's Attorney General.

• 57:47David Friedberg?

  That was your best open yet.

• 57:48Jason Calacanis?

  On OpenAI's for-profit conversion, two months ago, OpenAI announced a $6.6 billion funding round, $157 billion valuation. They're projecting $3.7 billion in revenue this year. Pretty great revenue growth.

• 58:05Jason Calacanis?

  But there's a poison pill in the deal. OpenAI must convert to a for-profit within the next two years, or investors can ask for their money back. And right before they announced this round, you remember CTO Mira Maroti and two other top researchers resigned. Many people saw this as a protest. Elon, who put the first 50 million in and co-founded OpenAI, is currently suing the company and seeking a court order that would stop the for-profit conversion. Now, Zuck is joining Team Elon. Elon and Zuck are in some weird pairing up. They're not in the ring, not in the octagon, no. Last week, Meta sent a letter asking California's Attorney General to stop OpenAI's for-profit conversion.

• 58:50Jason Calacanis?

  What do you think of this? We've got them now not in the octagon, but they're in the political arena. Chamath, your thoughts?

• 58:57Chamath Palihapitiya?

  I think that this is so interesting. So I was looking at all of these things. If you, if you put them all together, it paints a really interesting story. So you have Elon filing an injunction, which basically says you should not allow this conversion to happen until we sort out all of these details. Because if you allow it to convert and then I win, it'll be very messy to go backwards. I think that that's a pretty credible legal argument. Then you have Zuck basically say, hey, Elon's right, this company should not convert. But the more interesting thing that really got me thinking about this was a chart that Menlo Ventures put out. Nick, can you just show this? What this shows is just what's happened in the last year.

• 59:42Chamath Palihapitiya?

  And what do you notice? What you notice is the market share of OpenAI has changed pretty meaningfully from half to about a third. And what you see is Anthropic doubled, Meta roughly staying the same, Google picking up steam. And it started to make me think this is very similar to a chart that I would have looked at when, you know, in 2006 and '07, when we were building Facebook. Because we had this huge competitor in MySpace that was the de facto winner. And we were this upstart. And it made me think, is there a replay of this same thing all over again? Where you have this incumbent that pioneers an idea?

• 1:00:29Chamath Palihapitiya?

  And they start with 100% share. And then all of these upstarts come around from nowhere. And then I thought, well, what is better today? If you are a company that's just starting versus if you were the incumbent? And I think that there's a handful that are worth talking about. So the first is, when you look at what XAI has done with respect to Nvidia GPUs, the fact that they were able to get 100,000 to work as, you know, in one contiguous system and are now rapidly scaling up to basically a million over the next year. I think what it does, Jason, it puts you to the front of the line for all hardware. So now, all of a sudden, if you were third or fourth in line, XAI is now first, and it pushes everybody else down.

• 1:01:14Chamath Palihapitiya?

  And in doing that, you either have to buy it yourself or work with your partner. And I think for the folks like Meta, that translates and explains why they're spending so much more. Sort of like this arms race. If you can't spend with my competitors, I'm just going to prefer my competitor to you. So I, I think that that creates a capital war. In a capital war, I think the big companies like Google, Amazon, Microsoft, Meta, and brands like Elon will always be able to attract effectively infinite capital. And their cost of capital goes to zero, which means they'll be able to win this hardware war. Okay, so put a pin in that. Then the second thing is what happens on the actual data and experience side on the training side?

• 1:01:58Chamath Palihapitiya?

  If you listen to Ilya Sutskever, if you listen to Andre Karpathy, what they effectively are saying is there's this terminal asymptote that we're seeing right now in model quality. So what happens? A lot of these folks are now experimenting on the things around the model, right? The user experience, how you use it. Can I keep things in memory? Can I cut and paste these things from here and there? Because what it says is like, the data is kind of static and brittle. But it's actually not, is what we said before. Because you have this corpus of data on X that's pretty unique. I suppose if Elon fed in all this kinetic data that he controls through Tesla, that's very unique. Does that all of a sudden create this additive pool of information? Possibly.

• 1:02:43Chamath Palihapitiya?

  And then the third thing is, when you look at that chart, what that chart says is, hold on a second, why are corporates moving around? And what I can tell you just through the 80, 90 lens is we are completely promiscuous in how we use models. And the reason is because these models offer different cost, quality trade offs at different points in time for different tasks. And so what we are seeing is a world where instead of having two or three models you rely on, you're going to rely on 30 or 40 or 50. And you're going to trade them off and you're going to use effectively like an LLM router to, you know,

• 1:03:19Jason Calacanis?

  Load balance them, yeah, and to route them.

• 1:03:21Chamath Palihapitiya?

  Or just to manage and route them. And then there's an intelligence above that that's constantly tasking and figuring out prompt optimization across these models. So it's this thing where we were very reliant on OpenAI. Now we're reliant across three or four. Ideally, we'll be reliant on 30 or 40.

• 1:03:40Chamath Palihapitiya?

  And so I just see this world where it's all getting commoditized quite quickly.

• 1:03:45Chamath Palihapitiya?

  And so I'm just like sort of scratching my head, like, where is the market value here?

• 1:03:48Jason Calacanis?

  Aaron, your thoughts? I know you're very promiscuous when it comes to LLMs as well.

• 1:03:53Aaron Levie?

  I mean, we have a very similar model as what Chima said, which is we're agnostic. So we work with multiple AI vendors. But the, I think the, a friend deep in AI land a couple of years ago, right before ChatGPT said, there's no secrets in AI. And I didn't totally understand kind of at the time, it hadn't registered what that meant. But very quickly, it kind of became obvious, which is the research breakthroughs sort of propagate insanely quickly across the AI community. And so back to Chima's framework, if you just think about it, is if the research effectively becomes open at some point in time, quickly enough, because either the researchers move or people publish it or whatnot, then it really is a compute game and then maybe a data access game.

• 1:04:36Aaron Levie?

  And that means that there's four or five at scale players that can fund this. And I think as we've seen in other areas where it's an infrastructure play, you eventually have the underlying service with enough competition, you have the underlying service eventually trend toward the cost of the infrastructure. So what we should expect is that the price of a token in AI land, you know, basically will be whatever the price of running the computers are. And maybe with like a, you know, plus 10, 20% margin.

• 1:05:07Jason Calacanis?

  Did you see the same thing happen with storage? I remember in the early days, Box and Dropbox and YouTube, you all had this major innovation with storage. And how did that play out?

• 1:05:16Aaron Levie?

  Let me give you a fun stat. We give our customers unlimited storage. We have 82% gross margin. So what happened was the price of the underlying storage has gone down by hundreds of times since we started the company. And then all our value is in the software layer on top of the storage. So we've benefited by this incredible, just, you know, ruthless competition between Western Digital, Seagate, other players that are just trying to pack more, more, more, you know, basically more storage density into these drives. And every couple of years, they have a new breakthrough. We're now, you know, upcoming, we're heading toward maybe a 50 terabyte hard drive. When we started the company, they were kind of 80 gigabytes.

• 1:05:56Jason Calacanis?

  How much of your time in the early days was spent on dealing with this infrastructure issue? And then how much of your time and your leadership team's time is spent on this issue now?

• 1:06:06Aaron Levie?

  Yeah, so back in the day, like if we had, you know, 10, 10 people in engineering, you know, 80% of them was doing, you know, pure infrastructure work. Now, if we have a thousand people, you know, be inverted in terms of the ratio. So you just get, you get more leverage, both as the, you know, as you get the advancements in the technology, but then also as you get scaled. But all of this is to say, you should basically anticipate a world where, and I think Zuck is this interesting counterbalance on all of this because of open source. If at any moment you know that Zuck will, will basically provide an open source model that is at kind of best in class benchmarks and at the frontier, then there is a limit on how much you can charge for the tokens of your hosted model, because anybody will then be able to go host the open model.

• 1:06:51Aaron Levie?

  And be able to provide infrastructure around it. So, so if you always have that counterbalance and the tokens eventually kind of look the same, the output tokens kind of look the same.

• 1:07:00Jason Calacanis?

  Isn't it, yeah, always, isn't it also the truth that major enterprises, Fortune 500s, 200s, you know, 20 years ago weren't interested in open source and now that's kind of their default? They want to buy into open source because they don't want to be locked into a vendor?

• 1:07:15Aaron Levie?

  It's actually not even necessarily the case that the, that the customer has to pick the open source vendor. They might buy it through an abstraction layer that, that is letting them get the benefit of open source, but, but still buy through a proprietary.

• 1:07:26Jason Calacanis?

  So you believe open source wins?

• 1:07:28Aaron Levie?

  I believe.

• 1:07:29Jason Calacanis?

  In AI?

• 1:07:30Aaron Levie?

  No, no, no. So I, I believe open source causes pricing to always be extremely low.

• 1:07:34Jason Calacanis?

  Right, but, okay. But in this case, do you think, do you think open source is going to ultimately win the day in models?

• 1:07:41Aaron Levie?

  No, not necessarily.

• 1:07:41Jason Calacanis?

  You don't? Okay, explain.

• 1:07:42Aaron Levie?

  Because only, only Meta has the, has the, the scale to be able to provide.

• 1:07:46Chamath Palihapitiya?

  I think what Aaron is saying here, let me, let me maybe try to frame it. I think what he's saying is there'll be open source models, there'll be closed source models, but the price that Aaron or me or anybody else pays these model makers will effectively go to zero.

• 1:08:01Jason Calacanis?

  Got it.

• 1:08:02Aaron Levie?

  And it'll, it'll go to the cost of the compute, to be, to be clear, with a little bit of margin for, for.

• 1:08:07Jason Calacanis?

  The energy, the physicality of that compute, got it.

• 1:08:10Aaron Levie?

  Now, it's important to step back and say, I still think you could probably have the entirety of the model providers make 10 times more revenue than they do today, because we're just literally in like the first percent of the total TAM. So, so it'd be a mistake to think that that has, you know, some kind of downward pressure in, in terms of the long-term economics of these businesses, especially because I think OpenAI's revenue stream is increasingly looking like a SaaS revenue business as opposed to just, you know, just the API kind of token pricing. So, so none of this is, is to, you know, provide any, any sort of color on like, what would you bet on today? I, I agree with Chamath that you're going to have maybe not 30 providers, but let's say you at least have, you know, five to 10 good choices all, all competing heavily for the next breakthrough. Like literally this morning, Google had a breakthrough in, in sort of this reasoning oriented model from, from their flat, from their Gemini family.

• 1:08:55Jason Calacanis?

  Their 2.0, yep.

• 1:08:57Aaron Levie?

  Yeah. And and so what's what's incredibly, you know, kind of great is it's it's sort of the best time ever to be building software, assuming, you know, assuming that that you have a play in the market that lets you remain differentiated. And the key there is just do enough on top of the AI model that there's enough value there.

• 1:09:14Chamath Palihapitiya?

  You know how much the world spends on software and software related things every year? It's about five trillion dollars. So there's like, call it like a trillion and a half of software licenses, a trillion and a half of consulting and a trillion and a half of IT folks inside of companies, plus or minus a little bit more, you get about five trillion, and that's compounding 13% a year. I I'm pretty sure that the market here shrinks by an order of magnitude. And instead of fighting over five trillion, I think we'll be fighting over 500 billion. What do you think? Aaron, you buy that?

• 1:09:52Aaron Levie?

  No, not at all. I mean, I don't know if you want to make the case more, but but.

• 1:09:57Chamath Palihapitiya?

  Well, the only reason is that I think that as we delever the software development process from humans, I think the unit cost of creating code effectively becomes so cheap that it's going to be very hard to differentially price these products the way that they are. So an example would be that, let's say you use, I don't know, pick your favorite piece of software. I don't want to pick on anyone, that's why I'm not saying. I'm just saying Office Suite. Let's pick an Office Suite. Everybody's got one. Sure, actually, let's pick on Excel, because maybe that's like. Sure, Excel, Google Sheets, yeah. It's not it's not that Excel isn't valuable. It's incredibly valuable. It's what is the marginal cost of creating the Excel equivalent that is good enough that people switch?

• 1:10:41Chamath Palihapitiya?

  The marginal cost today is very expensive. And you can see that because it's what it costs Google to make Sheets. But that's humans. So the real question is, if you have a legion of bots that works 24/7 incrementally and increasingly more accurately every day.

• 1:11:02Chamath Palihapitiya?

  The question is, what is the marginal cost? And I think the marginal cost of that is going to be very cheap. And when you do that, it's very difficult to price it anywhere near the same. And the reason is that other companies will then replicate it and say, hold on. If if Excel wants to charge a hundred dollars, I'll charge 50 and I'll take a lower margin. That's just supply, demand economics.

• 1:11:24Aaron Levie?

  Yeah, yeah. So, so, so I think, I think there's. I just don't agree with the TAM compression because I think there's another kind of counter event that's happening that that AI is really going after like services. And so that then then conversely expands the TAM of software where IT budgets weren't usually applied to those types of things, but we can get into that in a second. But I think we've already seen, I think we've already seen this, though, and it hasn't exactly played out as you're saying. So you already have like a like, so Zoho is this really interesting business. It's probably a couple billion in revenue at this point. And it's basically a suite of of extremely low cost, affordable software products by category.

• 1:12:02Chamath Palihapitiya?

  The cycle time of Zoho is poor.

• 1:12:04Aaron Levie?

  But it's not, that's not been, that's not been the reason people don't switch, though.

• 1:12:07Chamath Palihapitiya?

  No, it's all, it's all levered to humans. I just think it's not a good product. It's decent enough.

• 1:12:13Jason Calacanis?

  Why do you think people don't switch, Aaron?

• 1:12:14Chamath Palihapitiya?

  By the way, sorry. Yeah, I do agree with you, Aaron, by the way, that when you bring that whole offline services category online and you automate them with AI, I agree with you that that TAM could be ginormous. All I'm saying is the traditional software TAM today, what people spend 5.1 trillion dollars on, I think people will spend 500 billion dollars on and barely if not.

• 1:12:37Chamath Palihapitiya?

  There are, there may be other things that people spend money on that that are that are wrapped in AI.

• 1:12:41Aaron Levie?

  Yeah, I guess the the the counter and maybe you'd look at an ERP system or a CRM system or something else like, like it that is sort of.

• 1:12:50Chamath Palihapitiya?

  Like those things are totally screwed.

• 1:12:52Aaron Levie?

  No, but like, but but this is my point, the opposite, like the last thing you want to touch is the system that is like, like powering your supply chain.

• 1:13:00Chamath Palihapitiya?

  Companies, the companies I talked to, they're consistently like rip it up, get us to a point where we can rip it up. And the reason is because what they've realized is they'll spend 50 to 100 million dollars a year for five features. And they're like, just give me these five features as workflows.

• 1:13:14Aaron Levie?

  Yes.

• 1:13:14Chamath Palihapitiya?

  Give me a simple crud database and just get me, get out of the way. And it's like, the trade off for that. Makes a lot of sense because, look, let's face it, like, when you have to build one piece of software that has to sell to 50,000 companies, the reality is that that piece of software is trying to do everything and then some, and it's trying to solve two or three use cases, plus around, you know, five or six common use cases that are generalized. Yep. For 50,000 customers, so you end up with 50,000 features.

• 1:13:43Jason Calacanis?

  You know, it's really interesting because Aaron, you kind of alluded to there's a TAM expansion moment there, and I'm seeing this on the front lines. We run a program at Found University, I've talked about it here before, where we see people pitching us their year zero startups, two or three person teams, and what they're doing is they're not going after existing legacy software, they're kind of going after jobs. They're looking at a position or a job somewhere. This is an accountant, we're going to take an accountant, we're going to make the number one accountant in the world, that's an AI agentic, an agent. We're going to make a podcast producer with Podcast AI. We're going to make a virtual assistant with Athena. We're just seeing it over and over again. That's a whole nother category where

• 1:14:25Jason Calacanis?

  you study a person's behavior as they work, a social media manager, and what they do, and then you replicate it with AI. And that's something that just hasn't previously been done. So there could be two things occurring here, Chamath and Aaron, at the same time, which is a deflation in legacy systems, and they'll be replaced, and then additionally, human capital and jobs that are easy enough for AI to do as an agent will also expand the TAM, two things at the same time.

• 1:14:55Chamath Palihapitiya?

  You are completely right about the usage. All I'm debating is, when you have to price something, you have to look at the total cost of what it took to make it. And then you want to try to build in a reasonable amount of margin and some reasonable expansion, and you discount it back, and this is what you think it's worth. Even though you may not think you're doing that when you implicitly price something that way, that is what's happening underneath the hood to the unemotional buyer of that good. And all I'm saying is, If what Aaron says before, which I agree with is true, which is the cost of using a model to get to an output effectively goes to zero, somewhat what I've been saying before,

• 1:15:36Chamath Palihapitiya?

  the marginal cost of compute goes to zero, the marginal cost of energy goes to zero. The real question is, what does it take to make a good in the digital world?

• 1:15:46Jason Calacanis?

  Let me ask Friedberg a question here. You're back in the CEO slot at Ohalo. You're doing it every day, Dave. You're making these choices as to what SaaS products and how you're going to solve problems. Are you looking at it saying, I'm going to hire developers who can work 10x because of all these new tools and I'm going to build my own internal systems? Or are you looking and saying, I'm going to buy off the shelf SaaS products? What are you doing when you make your own decisions every day, David Friedberg?

• 1:16:13David Friedberg?

  Well, I try and encourage the teams to build stuff that better meets our needs and then it can actually be a better solution and it can be built in-house. And I think we did a, I think I mentioned this the last episode, but we did a hackathon where we brought in people to learn how to use Cursor and ChatGPT to build software that had never done it before to try and create this as a capability for people broadly in the organization. And there were great tools that came out of it. So I think that that's really the future. As, and this is kind of like, you know, I'd say early generation, but as we get to further later generation capabilities, you could see the instruction to a ChatGPT or like interface, hey, I'd love to do the following things with a piece of software, shows you a couple

• 1:16:58David Friedberg?

  of options, you pick one, shows you a couple UX, you pick one, it does user testing automatically for you, it does QA for you. And ultimately it puts it into production for you, which is the biggest challenging step right now. You still need engineers that can load stuff into production and do QA. But if all of that gets automated as well, now any user in a company can actually stand up software to do something for them.

• 1:17:19Jason Calacanis?

  A non-developer, you're saying?

• 1:17:20David Friedberg?

  Non-developer.

• 1:17:21Jason Calacanis?

  Stand up software?

• 1:17:22Aaron Levie?

  Maybe, so Chamath, just to clarify, are you, there's two different ways to approach the lowering the cost of developing software. One is that it just creates more competitors in each of these categories, which then lowers my price because now there's, there's some downward pressure. Dave's bringing up a different example, which I'm going to build my own software at effectively the price of zero.

• 1:17:41Aaron Levie?

  The challenge on this, especially the second one is, is like when you, like, most organizations don't want to be in the business of having to think about, about building their own software. They just like want it done for them. Like it's like not a core part of their, like, so, you know, your, your business would be very unique relative to the broad economy, which is like, I just want, like, just like, I want a place to put my CRM records. I want a place to like, just like have my HR get managed. And I think the downward pricing pressure due to software cost lowering makes total sense. I don't think it's, it's a 10x factor. But, but, but, you know, I, I think that we've always had a long tail of applications that, that enterprises build. You did it in Microsoft Access, now you do it in Retool. So the next era of that will be obviously AI built,

• 1:18:23Aaron Levie?

  and there'll be 10 times the amount of that software. But it's not obvious to me why that would go after the kind of core, the, the core systems of running a business, because just most companies are like not looking to reinvent the wheel of that.

• 1:18:34Chamath Palihapitiya?

  We're working with an aerospace partner, won't say who it is. And we sat there and they walked us through what they deal with to make the things that they're making. It's convoluted. And this is not a software problem. It's that there is no piece of software that understands how they want to run their company. And so instead, they have to morph their org chart to the tools that are available. So I think what Friedberg is saying is some version of that as well. He's probably, there were probably people there using the tools that were available. And as a result, at some point, some HR person said, we need to hire this other person and this other person. And instead, what, what it allows companies to do is just completely reimagine. How do you want your company to work? And

• 1:19:18Chamath Palihapitiya?

  what is the business process you actually need to implement? And then let's just get that built. And, you know, I, I don't know if you guys saw this, but Satya Nadella had this clip that's gone pretty viral in the last couple of days, where he effectively said the same thing. And what he's effectively saying is, all these big software systems are business rules, wrapping a database, plus

• 1:19:42Chamath Palihapitiya?

  An incredible go-to-market team. You know, and this is what Alex Karp points to as sharp knives, steak dinners, and basketball game tickets. I don't know if you guys saw that clip.

• 1:19:55Jason Calacanis?

  I did see the clip. Yeah, he likes to win based on product, not on sales effort.

• 1:19:59Chamath Palihapitiya?

  Nick, you should find this clip.

• 1:20:01Speaker 04

  We don't play golf. What we do do is we play software. We will put, if you want to actually compete, compete on your product. And what's very special, and yes, do I enjoy humiliating people who have better steak dinners and sharper knives and better golf swings? Yes, I do. You know what? I really, I really like that we win in that way. It makes me very happy and it makes our clients happy.

• 1:20:22Chamath Palihapitiya?

  But it really points to the heart of how the software industrial complex, that's what I call it. This $5.1 trillion, this software industrial complex, how has it evolved? I think it's people that build good point products. But when the market, meaning the shareholders and the public investors, demand growth, you have this natural expansion. And what do they do? They inflate the feature set. They inflate the cost. And then in order to sell that, they inflate the set of

• 1:20:54Chamath Palihapitiya?

  incentives that they give to the buyer. So the CIO inside of these large organizations, they control budgets. They're equivalent to like state level budgets in some cases. You know, what do you think the CIO of a top five bank is spending? It's probably 15 to 20 billion dollars a year. They are getting winded and dined to a way that you could not even imagine. I don't even think the CEO probably understands. And that filters down through the org and so they make these-

• 1:21:22Aaron Levie?

  Don't like totally ruin our whole game here.

• 1:21:24Chamath Palihapitiya?

  Well, I'm just, I'm just pointing it out like it's like-

• 1:21:27Jason Calacanis?

  I mean, I'll say the counterbalance of that, which is- But here, but here's another part of the game in the field. If these tools- Make your team 10, 20, 6%, whatever you can quantify more effective at their jobs. Then it's a de minimis amount for most organizations who have created very profitable businesses. I see this where I was mentioning some companies earlier and their SaaS pricing is broken because the number of employees at a company has been going down because people are getting more efficient. So now they're looking at saying, well, what value do we provide with this podcast, you know, producer in a box and whatever it does. They say they were starting with like $99 a month or $49 a seat. I said, listen, just charge a minimum of $500 to get the software.

• 1:22:11Jason Calacanis?

  Nobody complained and they got rid of the bottom tiers. So there's a value being created here that is so great that I don't think everybody's going to roll their own like Friedberg because they'd be like, you know what? This is so great. It's 6,000 a year. Fuck it, YOLO, I'll just buy it.

• 1:22:29David Friedberg?

  It is today and in five years, just like we're all going to, and we're all using chat like interfaces more frequently.

• 1:22:38Jason Calacanis?

  Yeah.

• 1:22:38David Friedberg?

  You go to your chat like interface and eventually you realize you can ask it to build some tool for you that does something. And it renders the tool and it makes it possible and it stands it up in production and suddenly you're using it at your company. And then you ask it to do another tool and it does it exactly to spec and you define the UX you want, you define what you want it to do and it works and it interoperates but you and really clearly and really cleanly with the other tool. And there's a big aspect of this where you can start to build all of the software infrastructure that you as an organization want.

• 1:23:11Chamath Palihapitiya?

  Right, but I think you and Aaron, you and Aaron mentioned this though, the extreme difficulty is not that front end part. That's easy. It's like, I think it's less than three or 4% of the work. The ninety-six percent of the work is how you actually integrate it in the backend and how do you provision it? How do you have controls? And how do you do security? Because if those things fail and those are implemented in a bot in a highly regulated market, as an example, you may not actually be allowed to operate.

• 1:23:41David Friedberg?

  Let's go through that example and let's say that you're in a bank and you tell the AI, figure out all the security and permissions and authority rules that are necessary for me to operate as a bank and it can actually render it. It sounds far-fetched today, but there's no reason that in seven years, that is not the standard de jour, that I don't have the ability to say, go look at all the software that's out there in the world today.

• 1:24:01Chamath Palihapitiya?

  So that will be-

• 1:24:02David Friedberg?

  And help me build a tool that meets compliance standards, that meets all of my security standards. And you can actually instruct the AI to operate like a large number of software engineers

• 1:24:10Chamath Palihapitiya?

  No, I think the-

• 1:24:11David Friedberg?

  Need to operate today.

• 1:24:12Chamath Palihapitiya?

  The practical issue where the rubber meets the road there is when there is a penetration and a regulator who's a human, because it will not have been a bot, comes and knocks on your door and you're like, well, here's this immutable log of the things that I did. And they're like, I don't want an immutable log. Who the hell tested this? Show me the unit test that you created and signed off on. So there's a, there is a critical human in the loop problem on that other ninety-five percent, which is where I agree with Aaron.

• 1:24:40David Friedberg?

  In, in, in reach, in like stage one, like we're in stage zero.

• 1:24:43Chamath Palihapitiya?

  No, no, no. You will, you will need- No, but you'll, I think it's in stage five and six. I think you'll need governments to take an entirely different risk posture for highly regulated markets. I don't see that happening in any, in any time in the near future.

• 1:24:55Aaron Levie?

  In, in life sciences, if you want anything in a, in a clinical system, I don't need to tell you guys this, but you have to, you have to do a QA test on every single change that ever happens and be able to prove that you tested every single thing. So, so the idea of a probabilistic AI system generating the, the kind of code for you, you know, in a clinical trial, you know, workflow, like I just think, yeah, it's going to take a lot of change from, from regulators.

• 1:25:17Jason Calacanis?

  Yeah, I mean, we've got another decade of evolution here to make these things sustainable and have a high quality. I think it'll happen faster than everyone thinks.

• 1:25:25Aaron Levie?

  Yeah, I think actually that's that's like, there's actually no reason why that wouldn't be a good thing if that did happen, to be clear. I think though, back to, you know, Jason's earlier point, though, like then the counterbalance on the TAM compression is is just now the the sort of thing that we think of as software, that market is now is is much larger.

• 1:25:43Chamath Palihapitiya?

  Bigger.

• 1:25:43Aaron Levie?

  So if you're if you're selling, if you're selling

• 1:25:45Chamath Palihapitiya?

  Yeah, yeah, yeah.

• 1:25:46Aaron Levie?

  Yeah, so but like, but like, that means that if you're selling, let's say, fifty thousand dollars of security software, you know, maybe that goes down a little bit to, you know, twenty five thousand dollars, but but you might, yeah, but you might sell

• 1:25:55Chamath Palihapitiya?

  Exactly, right.

• 1:25:56Aaron Levie?

  Two hundred thousand dollars of

• 1:25:57Chamath Palihapitiya?

  An agent of new agent, yeah.

• 1:25:58Aaron Levie?

  Right.

• 1:25:58Chamath Palihapitiya?

  That I so I agree a hundred percent with that. My only comment is the software industrial complex today has to shrink because the stranglehold that it has on how companies run is incredibly high for an experience that's incredibly poor. Nobody, nobody raises their hand and says, gosh, this piece of enterprise software that I use in my day to day life is as good as Instagram or TikTok. Nobody says that.

• 1:26:23Jason Calacanis?

  Well, I mean, except about Box. I was reading the reviews earlier today.

• 1:26:26Aaron Levie?

  Okay, good.

• 1:26:26Jason Calacanis?

  And I was on G2 or one of those sites and it's just Box was just a rating for a tremendous, so. I love Box. I love Box. It's incredible.

• 1:26:34Aaron Levie?

  Well, I mean, I mean, just to

• 1:26:36Jason Calacanis?

  What's the ticker symbol? Is it dollars?

• 1:26:38Aaron Levie?

  We dress it very simple for people, so.

• 1:26:41Jason Calacanis?

  Is it Dollar Box? Is that what it is?

• 1:26:42Chamath Palihapitiya?

  It is.

• 1:26:43Jason Calacanis?

  I'm putting a J trade in here because I may have to J trade this. It sounds like a really great opportunity for me. All right, listen. Aaron, you just got Kramer'd.

• 1:26:52Aaron Levie?

  What was your last J? Yeah, you got Kramer.

• 1:26:54Jason Calacanis?

  My last J trade is I'm just, I'm loading up on MSTR and Bitcoin. I'm doing a, I'm shorting Bitcoin and I'm buying MSTR. I don't know what that, I'm not, I'm not trading stocks right now. I'm focused on investing in a hundred startups per year, one hundred new startups per year and putting the first check into them. That's what I do. All right, listen, enough. This has been a great episode. Aaron, you're amazing. Thank you for coming on constantly. Everybody follow. What is your Twitter handle?

• 1:27:20Chamath Palihapitiya?

  On AI, can I just tell you guys, are you at Levy or at Aaron?

• 1:27:23Aaron Levie?

  Ah, yeah, yeah, I love you.

• 1:27:25Jason Calacanis?

  Levy, is that the French pronunciation? L E V I E, Levi.

• 1:27:29Chamath Palihapitiya?

  Have you guys seen the Vio model from Google?

• 1:27:31Aaron Levie?

  Yeah, have you guys talked about how Google has like gotten some religion?

• 1:27:35Jason Calacanis?

  Google's incredible. They are, they are firing on all cylinders. I literally paid Shout out to Sundar. Yeah, and Sergey's going to work every day, by the way. He's at work. What can Brown do for you, J Cal? Sundar, back in the group chat.

• 1:27:47Chamath Palihapitiya?

  Okay, there we go. Did you guys see Genesis yesterday? Well, okay, let's, let me just put this up here and then I'll tee it up to you, Free Bird.

• 1:27:53Jason Calacanis?

  Google has been putting out new models. They have this new Google Gemini. And they have one with deep reasoning and their 2.0 model. I did a side by side test, same prompts with our friends in Deep Madra on this week in startups. Just this week, we did multiple tests. He was, he has the O1 Pro, the $200 per month. Gemini was beating that hands down for me. And I think he conceded that with their free model and their $20 model, if we just gave it decent prompts. I think Google now has reached parity and they have an app out. Friedberg, what are your thoughts? Because people were counting them out. And here we are. I think not only have they caught up. I think they have exceeded. What are your thoughts?

• 1:28:34David Friedberg?

  They were late. The compounding effects are playing out and it's only going to continue to compound. And I will say the data repository at Google, the engine that they have, the infrastructure, the team, all, everything down to components is advantaged. And so everyone's been kind of counting them out, but it's clear. They're in it to win it. They're here to play.

• 1:28:50Chamath Palihapitiya?

  70% of the usage of OpenAI is consumer.

• 1:28:53Jason Calacanis?

  70% consumer.

• 1:28:55Chamath Palihapitiya?

  What does that mean for them as, as Gemini and Google get, get momentum?

• 1:28:59David Friedberg?

  I think you'll end up having a Gemini that has ads eventually. And you could pay and have no ads or you could not pay and have ads.

• 1:29:08Chamath Palihapitiya?

  Meaning, do you provide enough value and of enough quality where folks don't need to then, folks stay on Google?

• 1:29:16David Friedberg?

  On Google.com.

• 1:29:16Chamath Palihapitiya?

  I'm asking you whether it impacts OpenAI, the quality of Gemini as it increases? Or do you think that these usage cohorts are roughly set?

• 1:29:25David Friedberg?

  I jump back and forth personally. My experience is I don't feel like I've got embedded data on OpenAI or on Gemini that makes me stick with one. I'm just like with Google, I'm going to go to the best interface, the best engine. So I do think that there's fungibility here and people will move over as they realize better results, better performance. But I will say that what we're seeing now with the data advantage at Google. So, you know, the internet, all these LLMs are, are language models trained on text from the internet, right? There's, call it 50 billion words on the internet. And I think if you estimate the data repository in these training sets, it's like probably a couple of terabytes, one to five terabytes or something like that. But if you look at the, the, the video data that's out there. There's hundreds of billions of hours or 100 billion plus hours of video data.

• 1:30:09David Friedberg?

  A large amount of that is sitting on YouTube. And by some estimates, there's a thousand exabytes of video data on the internet. So about a billion times more video data than there is word or text data. And I think we just saw that play out with the VO model that launched yesterday. But here's some examples of VO. Google has all of this YouTube data, you know, whether or not they're using it to train. I don't know the answer.

• 1:30:30Jason Calacanis?

  I don't think they're allowed to is what I heard from the insiders.

• 1:30:33David Friedberg?

  They have to redo their terms of service to get explicit permission to use it.

• 1:30:38Jason Calacanis?

  But you're right, these models are tremendous.

• 1:30:40David Friedberg?

  Whatever they're using and it's basically rendering physics or it looks like it's rendering physics. Now Genesis came out yesterday and it's open source. So you can actually go play with this Genesis model, which similarly renders the actual 3D objects into a 3D environment. So you, so rather than rendering a two dimensional set of pixels to look at a video visual with Genesis. As you can see here, you can type in a prompt and it renders this extraordinary video that, that also has underlying it. The three dimensional objects that make up the video.

• 1:31:12Jason Calacanis?

  Which means you could change the angle, right? And you could work with it.

• 1:31:16David Friedberg?

  And also with Google and this, you can start to implement three dimensional models based on some prompt. It says something like, I want to have the camera angle at this point in the room. I want to have the room look like this. I want to have this color, this wallpaper. And suddenly everything starts to prompt in a way that you can actually render in real time. A video game, a movie, a visual experience. And it goes to this point that we're unleashing the capacity for human imagination and creativity with these systems. Cause it's no longer just a look alike, two dimensional image. It's now an actual three dimensional object that then renders the visuals to make this happen. So we're starting to see, I think the next era of these models that goes beyond just text prediction.

• 1:31:57Jason Calacanis?

  What do you think, Aaron?

• 1:31:59Aaron Levie?

  There was another release last week of an experimental project for browser use by Gemini, which is another advantage. Cause YouTube has obviously incredible amount of screen sharing data and, and videos. So, so you have, you know, like, like we think about visual as just like, okay, it's, it's going to be, you know, for, for developing, you know, CG characters or something. But it's, it's actually just like, like just all of the use cases of a computer are also on YouTube.

• 1:32:24Jason Calacanis?

  Project Mariner is the name of it, right? Where your Chrome extension AI can control your browser to do things.

• 1:32:30Aaron Levie?

  And then if you go to the AI studio from Gemini, they, they have a mode where you can turn on your webcam. And, and then you, you basically, it has full visual kind of access to anything.

• 1:32:43Aaron Levie?

  And so they're cranking and it's super exciting because like just you can tell that Google's woken up and and they are just on full assault. So I mean, just in 10 days, the quantum, the AI, open source, Gemini updates. It's like every morning you're waking up to a Sundar tweet that is that is some new breakthrough. So

• 1:33:03Jason Calacanis?

  Well, yeah, it's amazing when you fire 20,000 people who weren't doing any work and were involved in DAI nonsense. And then you yeah, say, hey, and then Sergey shows up.

• 1:33:13David Friedberg?

  That's not the point. The point, the point is they've had this compounding, you know, infrastructure advantage, data advantage, personnel advantage. And now they were just a little late to the game. But when you have a better engine.

• 1:33:24Jason Calacanis?

  Is my point. They were distracted with nonsense. You know, that's true. Come on. The first version of this came out, it was making Abraham Lincoln African American and okay, that maybe was Asian, you know, like they were distracted.

• 1:33:36David Friedberg?

  Okay, a big part of Google's orientation historically has been don't mess, don't mess up the machine, a classic kind of big company dilemma, where if I do something that's either disruptive to my core business, or if I do something wrong, where I will invite regulatory and consumer scrutiny, I'm going to get wrecked. And so they avoided launching stuff early. And what they've done is they've changed the posture in the last two years. And now the posture is launch early, launch aggressively, push hard. We have to win this battle or we're going to get eaten alive. And it's amazing to see the founders and Sundar lead this organization. I think there were a lot of question marks a year ago, but I think that the questions have been answered.

• 1:34:13Jason Calacanis?

  I agree. I'm saying it right now. I think we've hit peak OpenAI in the market. I think they're going to be the number three or four player. I think Gemini, Meta, and XAI are going to lead them. If we're sitting here in three years, I think OpenAI is number three, four, or five, not one or two. I don't think they get the one or two slot. What do you think, Aaron? OpenAI, who's in the one and two slot?

• 1:34:38Aaron Levie?

  I don't think you want to bet against Sam and Greg. You don't want to bet against Elon. You don't want to bet against Sergey now, you know, in office with Sundar. You don't want to bet against Zuck. So I think, I think the rankings are kind of less interesting as much as just the fact that it's like game is on. You do not have, you do not have incumbents that are sleeping at this point. That's just going to push everybody forward. So yeah, just an incredible time for everybody.

• 1:35:02Jason Calacanis?

  What a time to be alive. All right. For the Sultan of Science, David Friedberg, the Chairman Dictator, Chamapaya Hapatia, and I don't have a nickname for you, Aaron Levie, but we will have one soon. This is the All In Podcast. We miss you, Saxy Poo. We miss you. Come back soon, Saxy Poo.

• 1:35:19Chamath Palihapitiya?

  Come back soon, Sacks.

• 1:35:20Jason Calacanis?

  We miss you. All right, everybody. Have a great Christmas break and we'll see you shortly. Go sign up for our spam at allin.com. Sign up for the spam newsletter. We'll send you some updates on the pod. No, it's a good thing to sign up for. I'm joking. I'm joking. Sign up at allin.com. Love you, boys.

• 1:35:38Speaker 05

  Let your winners ride. Rain Man David Sacks.

• 1:35:45Speaker 05

  And instead, we open source it to the fans and they've just gone crazy with it. Love you, Sacks. Queen of Kinoa.

• 1:35:58Speaker 05

  Besties are gone.

• 1:36:01Speaker 05

  That is my dog taking a notice in your driveway. Sacks.

• 1:36:06Speaker 05

  Oh, man. My haberdasher will meet me at place.

• 1:36:09Chamath Palihapitiya?

  They should all just get a room and just have one big U-Jorgie because they're all just useless. It's like this like sexual tension that they just need to release somehow.

• 1:36:17Speaker 05

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