E6: Big Tech antitrust aftermath, potential effects of an M&A clampdown on Silicon Valley & more

Follow the crew: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://bio.fm/theallinpod Jason's recent Big Tech antitrust hearings breakdown: https://www.youtube.com/watch?v=VWeMnJ0-a_U

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

• 0:00Jason Calacanis?

  All right, everybody. Welcome back. It's another episode of All In Podcast, the podcast that is racing up the charts despite the fact that we record it every three or four weeks. There's no marketing, there's no ads in this podcast. It's just four friends who play poker together, who've decided to talk about the most important issues in the world. Welcome back to the podcast. David Friedberg, the queen of quinoa, himself, obviously, climate.com, ITSA, and an undisclosed beverage startup that I'm not supposed to talk about. Sorry about that. I know a lot of people were tweeting about this beverage startup. You're still not ready to talk about the beverage startup.

• 0:36David Friedberg?

  Thank you, Jake, pal.

• 0:37Jason Calacanis?

  Yep. Welcome back to the show.

• 0:38David Friedberg?

  I always appreciate your promotions.

• 0:42Jason Calacanis?

  But when will the beverage startup-

• 0:43David Friedberg?

  By the way, do you guys want to talk about, do you guys want to talk about Jason's home address? Because I have that, I think-

• 0:48Jason Calacanis?

  Please, no.

• 0:50Chamath Palihapitiya?

  I want to ask, is that a picture in the background? I love space, by the way, as you know, but is that a picture of Uranus? Or what is that picture?

• 0:58Jason Calacanis?

  I think that's Saturn. It's Saturn.

• 1:01Chamath Palihapitiya?

  It's Saturn.

• 1:02Jason Calacanis?

  It's not Uranus. It's Saturn.

• 1:06Jason Calacanis?

  Friedberg, obviously, taking the first Virgin Galactic flight. Chamath Palihopetia, of course, with us here. The prince of Sacks, calling in from an undisclosed location that is not burning down like the United States. How you doing on your vacay?

• 1:23Chamath Palihapitiya?

  Doing really well. Thanks. Thank God. I'm giving you the three-button salute, as I told you.

• 1:27Jason Calacanis?

  Yeah, thank God the microphone is perfectly positioned, so we do not have to look at your chest hair. All six of your chest hairs. Oh, my God.

• 1:35David Sacks?

  It's like a $1,000 suit that's missing all of its buttons, or shirt, rather. I mean, they couldn't afford to put buttons all the way up on your, like, probably $2,000 shirt.

• 1:45Chamath Palihapitiya?

  Austerity measures. When I get back to the United States, as Jason said, my haberdasher will meet me at plain sight and sew the three buttons off.

• 1:52Jason Calacanis?

  Yeah, when he leaves for Europe, they remove the three buttons. He comes back, the haberdasher puts them back on each shirt. He does that for the entire wardrobe. And, of course, chiming in is Rain Man himself, David Sacks, professional blogger, and the fund manager of Craft Ventures, of course. Before that, working at PayPal with Peter Thiel, Elon Musk, and a bunch of other famous people, two of which have gone on to have demonstrably more success than Sacks, but Sacks having, of course, more than success, demonstrable success, than the other 72 rocket scientists from PayPal. In between, he did a little company called Yammer, which Microsoft bought for $1 billion.

• 2:35Jason Calacanis?

  Speaking of big companies and big tech, we had a big tech hearing this week, and Jeff Bezos, Sundar, and Zuck himself, as well as Tim Cook, two founders and two hired guns, people who were hired for their positions, defending themselves from what I thought was some pretty good questioning. My expectations were very low that anybody on that panel would know what they were talking about. For me, I thought Jeff Bezos did the best job. He had a great opening statement, and he was the most candid, and I think least likely to get broken up. Going around the horn here, Chamath, who did the best job in the hearings? I don't know if you saw all of them or just clips,

• 3:19Jason Calacanis?

  but who do you think shined?

• 3:22Chamath Palihapitiya?

  I only saw, to be honest with you, your recap, which I thought was frankly really, really good. We should probably link to that in the show notes so people can listen to it. I saw a couple of answers. The thing that jumped off the page to me was I read a little bit of Bezos's statement. I thought it was pretty fire. I thought he did the best job kind of positioning himself. But the reality is, you know, it's kind of what I said a few days earlier on CNBC, but I just thought going in, this whole thing was set up to be kind of performative theater, and it basically was that. You know, the level of questions are just so poor. The level of understanding is so bad. And then, you know, people just use it as a way to grandstand. And everybody did.

• 4:07Chamath Palihapitiya?

  So, you know, I wasn't completely blown away by any of it, to be quite honest.

• 4:13Jason Calacanis?

  What do you think Friedberg, who had the best showing in those hearings?

• 4:18David Friedberg?

  I think Zuck was the most kind of eloquent in the on-point responses. He was super, super well-prepped for this thing. I think Bezos and others were obviously, you know, they had, they had great kind of prep work done for their statement, but in terms of like warding off the attacks, I think Zuck did, did a great job.

• 4:43David Friedberg?

  You know, it was weird, it didn't feel like, like Tim Cook should have been there. It was like, kind of a random thing that he was there because everyone had an axe to grind and the axe that everyone had to grind was a little bit different. It wasn't like this was a true, objective discussion about, you know, antitrust. And so the, the axe that people had to grind were kind of pointed at Google and Facebook and Amazon in different ways. Tim Cook was kind of, you know, hey, yeah, this is cool. You guys go ahead and give your responses. I'm gonna go back to work.

• 5:15Jason Calacanis?

  And do you think that's because Apple does not have a monopoly position on a, on a numbers basis in any one era?

• 5:22David Friedberg?

  No.

• 5:23Jason Calacanis?

  And, or, and, or because their products are so loved and universally, you know, used?

• 5:30David Friedberg?

  Well, I, I think it's actually a function of what these companies do. So if you look at the, the Jim Jordan rant, I don't know if you guys watched this, but Jim Jordan did this big rant at the opening.

• 5:39Jason Calacanis?

  He's the worst.

• 5:39David Friedberg?

  And he went on and on and the first thing he said, he's like, "Big tech is out to get conservatives." And then he went on and gave all these examples about how Twitter has been pulling down Donald Trump's tweets and flagging them and Facebook's been, you know, canceling certain people on the platform. And his whole axe to grind was really about censorship on social media platforms, which has fucking nothing to do with antitrust and has nothing to do with Apple's business. And so, yeah, I guess my point is like, and then other people have issues with, with, with Google's dominance in ads and Amazon's impact on local business. And so there, there wasn't much of an axe to grind frankly with Apple. At the end of the day, as I said, I just don't think that it was a function of, you know, a true kind of objective antitrust approach. And it was just more about like, hey, we've all got different things we want to address

• 6:23David Friedberg?

  and we finally got these guys here, let's beat them up and, you know.

• 6:26Jason Calacanis?

  Sax, what do you think? You, you with Friedberg that it was performance art or do you think that, or performative rather, do you, or do you think that there are actually substantive issues that came up during the hearings that we should discuss here?

• 6:38David Sacks?

  Well, you know, it was both. You know, certainly, there was a tremendous amount of grandstanding and political theater and the politicians on both sides wanted to take shots at the companies for various reasons. I mean, I think they have a slightly different hierarchy of hate. I think the left sort of hates Facebook the most because they blame it for Trump's election, which I think is kind of a ridiculous scapegoating, which we should talk more about. But and then I think the right is most suspicious towards Google. But I think there are legitimate issues here as that were brought up. And

• 7:19David Sacks?

  I think the congressional hearing did score some hit points. Your previous pod did a good job showing some of those. The these hearings were teed up, apparently, over the past year by a series of subpoenas of records that the committee, this is the this is the House Subcommittee on Antitrust, had teed up. And so there were some moments where I thought that, you know, the representative scored some hits on, you know, Facebook and Google.

• 7:52Jason Calacanis?

  What do you think the big who took the biggest hit in all of this? Who who do you think has the most, putting aside all this performance, obviously, and the politicization of everything in our country, and Jim Jordan, who to me is like the he's like the dad at the baseball game, who like the little league game, who runs on the court and pushes the empire and gets banned for the season, like he just yells over everybody for no reason. But what is the actual what was the punch that landed that is the most valid as we go around the horn one more time here? Now that we've got our initial thoughts about it, what punch landed the squarest in one of these companies faces?

• 8:32David Sacks?

  Well, I let me set this up. I think there were three big areas of concern where just about all the companies with maybe the exception of Amazon took hits, although even Bezos took hits. I think one is with respect to anti-competitive actions that these platforms are taking, particularly with respect to the applications or small businesses that operate and are dependent on those platforms. I think all of the companies were interrogated about that. Bezos took a hit when he had to admit or concede that the company may not have always followed its policy with respect to using its third-party sellers' data to figure out how to compete with them. You know, Google was interrogated about snippets. There was news today, actually, just out of

• 9:17David Sacks?

  Australia, that the government's going to order Google to pay small businesses for the use of its content for snippets, which, you know, so the regulations are kind of heating up on this. But the sort of the first area was sort of anti-competitive, and I think Facebook took some hits with respect to the Instagram acquisition, which Congressman Nadler really went after him, and then I think Jayapal as well. And that's a tremendously threatening issue for Facebook, because if it is forced to divest Instagram, it would just be crippling for the company.

• 9:55Jason Calacanis?

  All right, so let's take

• 9:56David Sacks?

  Jason, just to set the table, two other issues that I think came up, I'll just very briefly. Number two is sort of cozying up to China. I think Google is the one that's most vulnerable here. And then the third issue is sort of this issue of censorship and bias with respect to content and politics in the election.

• 10:15Jason Calacanis?

  Which has nothing to do with, which has nothing to do with antitrust, the censorship issue. So let's table that one.

• 10:20Chamath Palihapitiya?

  I think you're hitting the nail on the head. This was not about antitrust going in. I think people were, you know, kind of confused. Even Jim Jordan, just I don't think he has any clue what he's talking about. He doesn't know the difference between regulation and antitrust. He doesn't know the difference between the Sherman Act and like, you know, Section 230. I think they're all kind of making it up as they go along. So in many ways, I think personally that the companies that were the most at risk going in were the same companies at risk coming out. And so, you know, if you had to stack rank the risk, I think Facebook is number one at the top of the list. Then I think it's Google, then I think it's Apple, and then I think far, far, far down is Amazon.

• 11:02Chamath Palihapitiya?

  In many ways, Amazon is the most inoculated, simply because the end market that they operate in is so massive. And the market that Facebook operates in is so new, yet so constrained with very few competitors. So in many ways, I think that's how the risk cuts. I really think that the antitrust legislative framework that exists today isn't enough to touch any of these guys. Instead, I think what really happens is more regulatory. And if you really think about what these guys are very concerned about, it's more that Facebook largely, and then Google to a smaller degree, essentially can be kingmakers with respect to popular opinion and sentiment.

• 11:43Chamath Palihapitiya?

  And I think that they want to have regulations, and I think that there's a good historical precedent for a bunch of industries that have had to come under regulation when they effectively get to 100% distribution. You know, whether it's meat, or airplanes, or radio, or television, you know, agriculture writ large, automobiles and transportation, whenever a market basically serves 100% of the total addressable universe, governments step in, and they don't necessarily legislate and trust bust, they fundamentally regulate and tax. And I think in many ways, that's just as bad, and frankly, in some ways, it's worse. Because if you do that to a tech company, you're basically crippling

• 12:26Chamath Palihapitiya?

  the one thing that they're supposed to be very good at, which is to innovate. And that's the only thing that they can use to basically keep their stock price high, which is then the only thing that they can use to get people to continue to work for them. So that's the sort of circular loop that breaks if you regulate them. And I think that the risk coming in was the same as coming out.

• 12:43Jason Calacanis?

  So Facebook, let's, let's take them, let's take them one at a time. Facebook, I thought, had the worst performance because it was pretty clear that Nadler was setting them up not only to not be able to buy a company in the future, but in that clip, he was sort of teeing them up that maybe the Instagram acquisition should be unwound, and they should be forced to spin that off. Because they were Saying over and over and over again that Zuckerberg put in emails with his management team that they were going to buy these companies or kill them or copy their feature sets. And even though that may not be explicitly illegal, the fact that they've hit, as Chamath is talking about, such incredible market share with billions of users and because of the track

• 13:28Jason Calacanis?

  record of Zuckerberg, you know, which may not be at all related to this, but it sets the table.

• 13:34Chamath Palihapitiya?

  No, but Jane is saying, Jason, in fairness to Mark, that decision wasn't made when Facebook had market dominance. That decision was made when Facebook was still fundamentally at risk and there was a large period of time where a lot of other people, had they been left to their own devices or properly capitalized, could have actually become a relatively, you know, important competitor to Facebook.

• 13:55Jason Calacanis?

  Instagram could have been at that point, but then Snapchat was the opposite. Snapchat, they were at scale and then they were going to buy it and threaten them. Either you sell to us or we're going to copy the features.

• 14:05Chamath Palihapitiya?

  I think, I think, I think what a more logical and defensible reaction, like I just think it's not defensible to say, "Oh, you know what, Facebook, I didn't like the acquisition you did 10 years ago, basically because it worked. And so I'm going to punish you 10 years later." That's crazy. That's stupid.

• 14:20Jason Calacanis?

  Yeah. In the rearview mirror, no, no good. Yeah.

• 14:23Chamath Palihapitiya?

  A more reasonable place to be is to say, "Okay, this thing," meaning communications writ large, "has become a critical piece of societal infrastructure and we are trying to figure out now what the rules should be. And rules shouldn't be brittle. Rules should be evolutionary. They should map, you know, to the moral decisions and ideas and frameworks of the time. And so, you know, we have to figure out, for example, number one, interoperability. So how can you message across all these multiple networks?" You know, another simple example, you know, we legislated the ability for emergency services to be able to send a message on your mobile phone line and your landline. You should probably be able to have a backdoor into all the messaging

• 15:04Chamath Palihapitiya?

  networks simply for that reason. So the point is that, you know, there are all kinds of things you can do today to make this...

• 15:13Chamath Palihapitiya?

  Infrastructure layer of society operate in a more predictable way on behalf of

• 15:18Jason Calacanis?

  What was your best, have you thought about a regulation, and then let's stick to Facebook and then we'll go to Amazon. Chamath, have you thought about a regulation that would make sense to Facebook? Whether it's divesting an asset, or maybe a certain percentage of usage, or allowing Facebook Messenger to work with iMessenger to work with, you know, Twitter DMs?

• 15:40Chamath Palihapitiya?

  I'll answer it in a different way. So, look, I mean, for 20 years I've run these kind of businesses, like from Wynn Amp to AIM and ICQ to then, you know, at Facebook. And so, you know, I remember at AIM and ICQ, we, you know, did all this hand wringing and all these meetings between us and Microsoft and Yahoo to make our messaging networks interoperate. And, you know, eventually we were basically just cut off at the knees because other people just moved around us and eventually it all just morphed anyways away from these sort of brittle messaging networks. My, my kind of view is that, I think what's best for Facebook is a status quo. And so, you know, if they can basically, and by the way, I think the strategy is, and Mark wrote this in his manifesto,

• 16:25Chamath Palihapitiya?

  but a couple of years ago, you know, this is sort of what led to Chris Cox resigning, if I'm playing, you know, sort of like conspiracy theorist. If you read Zuck's manifesto, what he was basically saying is, listen, we're going to take all these product and we're going to take all that code and we're going to mesh them all together in such a complicated, convoluted mess that if and when somebody ever tells us to rip it apart, it'll take another five or 10 years to do it. And that's effectively the technical read on that manifesto. It's just like you're going to make it technically impossible to unthread these things as independent entities.

• 16:59Jason Calacanis?

  And your thesis is that's a strategy against an antitrust breakup. I find that

• 17:05Chamath Palihapitiya?

  No, I just think it's a really smart strategy. I mean, he wrote it and he published it online. So it's not like he's hiding anything. He made it, I mean, this is the beautiful part about it. He made it completely in the clear. Now, uh, so that's, that's the strategy is to basically make it one monolithic code base so that if and when, I think, I don't, I'm not sure if this is the intention, but frankly, if and when somebody knocked on the door and said, hey, you need to strip apart WhatsApp and Messenger and Instagram, you can say, well, look, it's, it's one monolithic code base of, you know, 50 million lines of code. It'll take me 10 years, but sure, I'll figure it out somehow. So, you know, I think what's good for Facebook is a status quo. Now that's different from what's good for politicians and then what's different for, um, consumers. I think what's good for

• 17:49Chamath Palihapitiya?

  consumers is fundamental interoperability. Now this is then what touches, you know, Android and uh, Apple as well. Like the idea today that you cannot have a group text message that can only include iPhones, you know, on the off chance one of your friends has an Android phone, you're basically fucked is kind of crazy, right?

• 18:07Jason Calacanis?

  Which happens every six months on our group that Freeburg, what do you think, uh, in terms of Facebook and any potential action that could be taken? Or any possible solution to them having such a dominant position because they are the only one of the four that has a dominant position.

• 18:25David Friedberg?

  I would think about the, um, you know, how these businesses are, are kind of built, right? They're in, in all these businesses, there's an infrastructure layer. The infrastructure layer in the case of Google and Facebook is, is, is reasonably similar. It's, it's a bunch of data centers and, and hardware and software infrastructure to run all of their services on top. And then on top, there are, uh, consumer products and then there are advertising products and the, and the customer base for the consumer product is obviously users and the, you know, customer base for the advertising products is these advertisers that pay to access these consumers and give them ads and get clicks from them and sell them stuff. Um,

• 19:08David Friedberg?

  And so if you think about what do you pull out, it sounds like on the Google side, there's concern both on the advertising and on the consumer products that are being offered, and the scale and the leverage that Google has and how they make those products kind of come to market. And with Facebook, it's really about this absolute kind of monopoly on social products and services, whereas Google's got this great monopoly on search products for consumers. So you could kind of take a layman's view and say, hey, like rip out WhatsApp and rip out Instagram, and then Facebook is good. But the problem is in that infrastructure layer, they've created the social graph and this connection between all the people that you know,

• 19:53David Friedberg?

  and they've got all this stuff sitting on the same servers, and Chamath points out, all the same code base, and there's a lot of commonality there. So the reality of ripping something out from there is a lot more nuanced and a lot more challenging than just saying, hey, you got to get rid of WhatsApp or you've got to get rid of Instagram. And it's more likely some sort of Chinese wall situation where you end up with a negotiated exit, continued ownership and control. But almost like what happened with the banks in the 80s, you kind of got to separate one side of the business from the other. That could be one way that this goes, because it's really hard to kind of break apart given the way that these businesses are built.

• 20:29Jason Calacanis?

  What do you think about a solution, David, in which they conceded, hey, we're not going to buy any more of these competing social networks, which I think would be kind of hard for them to buy one right now?

• 20:42Chamath Palihapitiya?

  I think that's done. I mean, you can even see that Google Fitbit. I mean, Fitbit is, what is it? A $1.2 or $3 billion acquisition. It's going to take almost two years to close, and Google's already making concessions, antitrust concessions to the EU. This is a $1 trillion company trying to buy a $1 billion company. So I think large acquisition and M&A by the big four, it's impossible.

• 21:05Jason Calacanis?

  Is that good for society, Chamath? Or bad for society? Is it good for our business of investing in startups versus bad for us investing in startups?

• 21:12Chamath Palihapitiya?

  Well, I think it's good in one very important way, which is that it forces the capital markets to support these companies. And what I mean by that is, you know, I told you guys a couple of times, but in the year 2000, there was 8,000 public companies. In the year 2020, July 2020, as we sit there, August 2020, there's about 4,000. So we've seen a shrinking of 50% of the number of public companies. So the idea that there isn't an M&A on-ramp anymore means that more capital and the capital markets will become more fluid and we will support emerging growth companies in the public markets is my suspicion.

• 21:52Jason Calacanis?

  If only there was, yeah, if only there was an easy way for these companies to get public. Go ahead, David, respond.

• 21:57David Sacks?

  Well, I was, I mean, I think that, I think you're raising the right issue, which is the chilling effect on M&A that these hearings are going to have. Even if Facebook has never broken up or that deal is sort of retroactively challenged, the big four tech companies have to be looking at these hearings and now they're going to be second guessing every acquisition they want to make and it's going to have a chilling effect. And I think that's a disaster for Silicon Valley because we know that most of the startups don't work. And, you know, and there's really only, you know, most of them go out of business and there's only two good exits. One is an IPO, the other is M&A. And if you take the

• 22:39David Sacks?

  M&A exit off the table because it's no longer sort of feasible from a regulatory standpoint, not all those companies are going to IPO.

• 22:48Jason Calacanis?

  Yeah, but David, what you're saying doesn't make logical sense because if those companies are shit anyway, they should be going out of business and who cares about an aqua hire or some mini modest hire that gets you two times your money?

• 23:00David Sacks?

  There's a lot of acquisitions where the acquirer is picking them up because they provide an important component or technology or product, but that startup would not have been a great standalone public company.

• 23:14Jason Calacanis?

  Would Yammer be worth more today and would you be worth more money? Would your investors be worth more money if Yammer had SPAC? Yes or no, David? Um, I...

• 23:23Chamath Palihapitiya?

  Answer is absolutely yes.

• 23:24Jason Calacanis?

  Okay, so David, your, your argument makes no sense. I think you're playing to lose.

• 23:29Chamath Palihapitiya?

  It's not that it doesn't make sense. I think David, David does bring up something that's important in the following way, which is there's a lot of companies, Jason, that get to a certain amount of scale, and then they basically start running out of oxygen, whether it's because they've overbuilt, or they've overhired, or they've overspent, or whatever.

• 23:45Jason Calacanis?

  Or there's a natural audience for the product.

• 23:47Chamath Palihapitiya?

  Yeah, maybe, but I think, I think a lot of it is just sort of more overbuilding and just kind of distracted capital allocation. But then, you know, you need somebody to come in, and this is the problem with Silicon Valley, and I think what David speaks to is the following: If big tech M&A is off the table, the single biggest thing that'll change is valuations by late-stage privates. Because if you know that you can't get a 2X mark-to-market from the last post, guess what'll happen to your post-money? It'll go way down. Right? Because that was always the understood assumption. You know, all these guys, these late-stage money can come in and say, "Well, sure, I'll put, you know, a $2.5 billion post, a $3 billion post." Because in their mind, what they've been taught is that immediately sets the

• 24:32Chamath Palihapitiya?

  mark to get acquired as 2X. And in many ways, Facebook started it, because Facebook came to buy Instagram literally weeks after that growth stage round at 500 million, and that's why they paid a billion one.

• 24:44Jason Calacanis?

  They doubled the valuation, but wouldn't it, hold on a second, wouldn't it be healthier, though, for the entire ecosystem if we weren't building those late-stage companies to be flipped to a major company, maybe merging them with medium-sized companies who are slightly stronger, and then taking them public, to your point, Chamath?

• 25:01Chamath Palihapitiya?

  My point is, if you don't have a fucked-up cap table, you can do all of those things. It's the fucked-up cap tables that prevent...

• 25:06Jason Calacanis?

  So this solves that. Who needs this late-stage capital coming in and doing these fuck-ca-crazy rounds? Why not take the companies public earlier?

• 25:14David Sacks?

  Well, because, look, you don't always know what's going to happen. I mean, this is the reason why Instagram sold, this is the reason Yammer sold, is you don't know exactly what's going to happen. You don't know what the outcome's going to be. And in a lot of those cases that you're saying would become IPOs if they weren't acquired. Well, a lot of them just, you know, aren't going to work. It's crazy to be taking those exits off the table when both the startup and, you know, the acquirer, the big tech company, you know, want to do the, do the transaction. And, and, and one of the reasons why I think these, you know, there are a lot of these M and A type outcomes is because big companies have realized they're not very good at R and D, at sort of good, at sort of new product development.

• 25:56David Sacks?

  And so what they've done is they've outsourced a lot of their R and D budgets to M and A. And so they let the startups run the experiments, you know, in any category, in any new area, you end up having a dozen of these startups get funded. You know, we, we make fun of it because they're all, you know, there's so many competitors in every little space. But those startups are the laboratory where all these experiments are taking place. And then, you know, the big company comes in at the end and sees which experiment did well and they acquire it.

• 26:24David Friedberg?

  I think it's, I mean, I think the advantage of being a platform business is you can plug something in and immediately gain a lot of scale from it. So, I mean, you know, Instagram and YouTube are perfect examples. They were, you know, reasonably fast growing, had millions of users. But once they were plugged into the engine of the bigger platform, they were worth a hundred times as much over a few years because of all the usage and the infrastructure and the, and the distribution, et cetera, that was provided. But, you know, it looked insane at the time to pay a billion dollars and a billion six for those two businesses. Each of them are easily worth a hundred billion plus today, probably some multiple of that.

• 27:07David Friedberg?

  And so I think it's, Sacks' point is right, is like, I'd rather as a, and, and, look, I worked in M and A at Google for a couple of years early in my career. I left Google and. In 2006 and a lot of the infrastructure that makes Google's revenue engine was acquired. You know, we bought a company called Applied Semantics for a hundred million bucks or a hundred something million dollars at the time, which ultimately became AdSense. And Applied Semantics could scan a webpage and basically determine what keywords that webpage represented and then match ads from AdWords onto that webpage. That acquisition with a hundred million dollars, I mean, I don't track anymore how much, but tens of billions of dollars of revenue are generated by that, you know, by that AdSense

• 27:52David Friedberg?

  system today.

• 27:53Chamath Palihapitiya?

  You're bringing up something really important, which is at the time, Google was not a trillion dollar company. So the point is that Google had access to enough capital market scale where, you know, nobody's going to get in the way of a five, 10, 20 billion dollar company trying to buy a hundred million dollar business like that. I just don't think you're going to see, you know, any regulatory body take that seriously.

• 28:15Jason Calacanis?

  Wait, so didn't we just paint the perfect picture, Tomah? There'll be a trickle down. Wait, wait, isn't that the perfect picture?

• 28:20Chamath Palihapitiya?

  No, no, in fact, I think what it means is the 20 billion dollar company now probabilistically can actually win. So for example, like, look at this Intuit Credit Karma transaction, right? The question is, you know, could a smaller company have bought Credit Karma? Probably, but not at the price that, you know, Intuit is willing to pay. Now, if Intuit gets big enough where there's a chilling effect and regulators say, okay, you know, you're above a magic threshold and, you know, no bueno on the M and A anymore. Now Credit Karma has two choices, which is maybe they sell for 4 billion to a very different company, right? Or maybe they sell, actually, let's take a different example. PayPal. PayPal is now a top 20 business in America, right? By market cap. So if PayPal isn't allowed, for example, to buy, you know, a bunch of sort of like,

• 29:05Chamath Palihapitiya?

  you know, payment rail, payment companies. Maybe what happens is like a, you know, a medium tier business is allowed to buy them. And now all of a sudden, those medium tier businesses can compete with PayPal.

• 29:15Jason Calacanis?

  That's what I thi- that's actually seems like the best solution that we've, we've kind of stumbled on here. Can Slack then become, or Dropbox, or Uber, or any Airbnb? Now they can become the acquirers of these companies and then they can compete. So why don't we just say, hey, if you're over a trillion dollars, or if you're over 500 billion, you can buy 1% of your market cap. I'm just throwing a number out here.

• 29:37David Sacks?

  Jason, let me jump in on this. The, the, that's not what Nadler was arguing for. You know, it's not like Nadler was saying that if you're a big four tech company, you can't do these deals, but everyone else can. The, the, the, the standard that, that Nadler and the precedent that he was essentially setting in that hearing is, you know, 2020 hindsight bias. You know, if, if a company acquires, um...

• 30:02Jason Calacanis?

  Yeah, but putting that aside, I agree with you on that. But putting that aside, if we were going to come up with a rule, because we know the rules that as they currently exist are inadequate to do any type of regulation for these companies, because none of them have 95% market share. So if, in fact, uh, we, we need a new solution, how about this for a solution? I'm just putting it out here. You can acquire something that is under 5% of your market cap. So if your market cap over the last year is a billion, you can buy something 50 billion or less. If you're, uh, under 500, if you're under 250 billion, you can buy whatever the hell you want.

• 30:37David Friedberg?

  But J K, let, let me, let, let me, let me ask this question. You know, the, the points we made earlier about YouTube and Instagram, they were successful because of the scale of the user base of the platforms that acquired them and the work that had already been done and so they could plug in...

• 30:50Jason Calacanis?

  They would have both been totally successful without them.

• 30:52David Friedberg?

  They would have been successful, but would they have been worth $300 billion like they are today?

• 30:55Jason Calacanis?

  Maybe more, maybe more.

• 30:57David Friedberg?

  But Instagram was 13 people, YouTube was a couple dozen people. It doesn't matter. The story is a small group were brought in with, with an interesting platform that was kind of working at the time, and then they became these 3 billion dollar platforms. So that's one scenario. And a lot of money could be used, uh, and Google and, um, and Facebook used a lot of money to be the best acquirer, to be able to acquire those businesses. And that's the argument for this, hey, they're at such a scale right now, no one else can compete because only they can pay this this fee. As Chimaq points out with Intuit and Credit Karma, only Intuit can buy Credit Karma at that price. Now, the alternative way to think about this is what if there is vertical expansion? So instead of leveraging their existing platform and their existing dominance, what if Google, in this case,

• 31:38David Friedberg?

  is trying to get into the cloud business, right? And they're competing viciously with Amazon and Microsoft and others in this enterprise cloud business marketplace that is continuously evolving, changing every year, there's a different kind of lead and a different company that's suddenly growing faster than the others. And Google spent $2.6 billion to buy Looker. Buying Looker for $2.6 billion does not advantage Google's advertisers, it does not, to some degree it might, it does not advantage Google's users. And it is not about platform dominance in their traditional ad business, it's about vertical expansion into a new market.

• 32:09Jason Calacanis?

  Okay, so here's how I'll rewrite the law, David. If you have over 70% market share in your vertical, you cannot make additional acquisitions in that vertical.

• 32:19David Friedberg?

  But they're buying into a new vertical, right?

• 32:21Jason Calacanis?

  And so then the caveat is, if you're buying into a new vertical, you don't have to hit that cap.

• 32:26David Sacks?

  We already have that. We already have, I mean, that's basically the way the rules work today is that you look at market share. I mean, Coke cannot buy Pepsi, Facebook cannot buy Twitter today. But what we're talking about is at a much earlier stage, are you going to interfere with the M&A? Or are you going to retroactively go back and unwind these transactions?

• 32:47Jason Calacanis?

  Unwinding transactions makes no sense, yeah.

• 32:50Chamath Palihapitiya?

  I think the point is, this is all water under the bridge. And but the incremental M&A for these big guys is very unlikely. Now, David does bring up a good point, unless it's in basically a, you know, do nothing, not at that important, you know, in the positioning category relative to the core business. And so this is why, you know, it's, again, go back to like, why did Looker close faster than Fitbit?

• 33:19Chamath Palihapitiya?

  It's half the price. Looker is twice the price, right? Fitbit is half the price.

• 33:24David Friedberg?

  Yeah, new market, completely, yeah.

• 33:27Chamath Palihapitiya?

  Yeah, and so, so there is a fear that there is going to be a compounding advantage that regulators have a responsibility to stop. So I think it goes back to, um, once you get to a certain level of scale, the thing that we're missing with online businesses is this kind of like, you know, there, there's like a, there's like a great original sin here that we're not admitting, which is that the internet is now a pervasive and critical part of human infrastructure. As such, there needs to be people that regulate and manage the internet, the same way the FAA manages and regulates planes and wind turbines. Like, think about the FAA, let's just take aviation. It is impossible for you to go and just go into your garage,

• 34:12Chamath Palihapitiya?

  build some random thing to carry people from point A to point B in the absence of some certification, okay? Take agriculture, it is impossible for you to basically go and like, build up a farm and build up, you know, uh, livestock or whatever, and all of a sudden just supply it into fucking SoB's and Safeway without any sort of like checks and balances. Similarly, and the reason is because it's simple human infrastructure that everybody relies on, and, and I just think that we have to admit that now the internet company-

• 34:43Jason Calacanis?

  Also, those are life and death.

• 34:46Chamath Palihapitiya?

  This can be too. I mean, like, what about the guy that read the post about like, the pedophiles in the pizza joint came up with an AK-47?

• 34:54Jason Calacanis?

  Yeah, I mean, it's quite an edge case compared to flying on a plane.

• 34:57Chamath Palihapitiya?

  This stuff is life and death at some level, but even more than life and death, it's the anointing of power that then determines life and death.

• 35:05Jason Calacanis?

  And that's, I think, the key, is that it's power, yeah.

• 35:07David Friedberg?

  Chamath, do you think that there should be an internet regulatory body that decides how businesses operate and how content is censored and managed on the internet? Is that what you're kind of suggesting?

• 35:18Chamath Palihapitiya?

  Yeah, so let me be very specific. So I think that there are very specific kinds of businesses, um, and business models that should be overseen. Specifically, I think the first and most important thing is a body that oversees the collection of user data and how it drives targeting and identification.

• 35:41Jason Calacanis?

  So privacy concerns around that, that's a, that's a no-brainer.

• 35:45Chamath Palihapitiya?

  That's the first one. And then I think the second one is something that essentially tears the fig leaf off of internet companies and says, you know what? You are the equivalent of a publisher and a platform, some weird hybrid that we didn't think could exist when we wrote these rules. And so we're now going to adapt these rules. Because, you know, if you think about it, nobody is happy with the internet publishers today. You know, the left thinks that it skews right, the right thinks it skews left. Everybody's confused. Nobody gets what they want. And so I think somebody has to step in and kind of sort it all out.

• 36:18Jason Calacanis?

  Well, I think this is a good segue to Sax's point. And then I guess we have a fork here now in the discussion. Do we want to go and talk about censorship and that specific issue across Facebook? Or do we want to get into Amazon for a second? Which way do we want to go Sax?

• 36:33Chamath Palihapitiya?

  Go to censorship.

• 36:35David Sacks?

  Well, I mean, yeah, we can talk censorship.

• 36:37Jason Calacanis?

  Let's jump the fence here. Should there be, to Chamath's point Sax, a regulatory body that decides what people can and cannot say on social networks? Yes or no?

• 36:51David Sacks?

  No, I mean, let's think about that. What we're saying is we need the politicians to set up a regulatory body to control how the people talk about the politicians. I mean, that seems like a recipe for disaster.

• 37:06Jason Calacanis?

  What about specific lies and intentionality to frame debates incorrectly?

• 37:13Chamath Palihapitiya?

  Sax, that's not what I'm saying. I'm saying like, you go to a movie and, you know, there's a little blurb here that says who can go to the movie and who cannot. You know, you buy an album and it tells you whether there's explicit lyrics or not. Like, before you turn on the TV, there's like some rating agency that tells you whether your kids should be watching it with you. My point is, what is the equivalent version? We all need to think about what it is, but to say that there should be nothing, I think is crazy.

• 37:40Jason Calacanis?

  Sax?

• 37:41David Sacks?

  Well, well, I think, um, I mean, those ratings are mostly about, um, you know, standards related to kids, you know, and, um, the big internet companies already have a lot of child safety features. I don't know that you need to create laws around that. Um, and I, and I don't think that's what we're talking about anyway. I mean, I think the big debate about Facebook or Twitter is whether they're engaging in censorship or bias, um, right? And that, that goes way beyond, um, this topic of, of child safety.

• 38:18Jason Calacanis?

  So, okay, let's, let's unpack.

• 38:20Chamath Palihapitiya?

  I don't think that they're censoring. All, all I'm saying is I think you need to label, and you need to more clearly designate what this content is so that people can choose. Like, for example, on Twitter, you know, I follow a bunch of people on the right. I follow a bunch of people on the left. I follow one or two QAnon accounts, only because like, I just want to see it all. And then I want to judge. And I feel like if I can see everything, I can sort of like lay it all on a table and figure out where the rough center is and kind of move to that, you know?

• 38:48Jason Calacanis?

  So you feel you're intelligent and mature enough to do that, Chamath, but the rest of the world isn't?

• 38:53Chamath Palihapitiya?

  No, not really. But I try to do it because I think it's important for me.

• 38:57Jason Calacanis?

  Would you rather the platforms or some regulators come up with what you could see on those platforms, Chamath?

• 39:03Chamath Palihapitiya?

  Again, not what I can see. But there has to be a simple way. For example, you know, you could have something. And again, this, this, this, all, all this does is it breaks business models, which then it breaks monetization and it breaks the market cap of these companies. But for example, let's just say you had a new kind of job, which was, you know, all these, you had, you hired 500,000 people. And these were a combination of lawyers, journalists, you know, academics, all kinds of random people, artists, everybody, okay? Normal folks, blue collar folks, and you paid them full time to basically read stuff and kind of like, you know, uh, you know, wisdom of the crowd style, tell us where this sat in a spectrum.

• 39:48Chamath Palihapitiya?

  Okay, this is on the left, this is on the right, this is kind of center, this seems laughable, this seems unbelievable, this seems relatively credible. And I think that you would get, you know, very quickly, and I don't think the latency would be that high, but probably minutes, where, you know, forty or fifty thousand signals would tell you whether something is, you know, where something is in the spectrum of, you know, how to understand it.

• 40:09David Friedberg?

  And then that system, that system will get paid, get played though, it'll get gamed, right? Like, someone will figure out a way to turn all of Chamath's tweet labels into super evil tweets and, you know, now, and everyone will mute you because you're super evil.

• 40:23Jason Calacanis?

  Yeah, I think we just defined George Orwell's 1984.

• 40:26David Friedberg?

  Or cancel culture, right?

• 40:28Chamath Palihapitiya?

  If you're being five hundred thousand or a million people, if Facebook and Google and these guys come together and Twitter, and they pay a body of people to do this work, and so you don't know who posts it, you just see the content, you read it, you label it, it's a classifier.

• 40:41David Friedberg?

  So Chamath, what do you think, what do you think you would get classified as? And then what if you disagreed with what you were classified as?

• 40:48Chamath Palihapitiya?

  No, but David, like, what I'm saying is, you wouldn't know it's me, like, if I wrote an article on Medium, right, and I wanted to publish it in Twitter, that article first hits a queue, fifty thousand people read it, they human classify it, and then it gets published.

• 41:04David Friedberg?

  And now what if you don't like the way it's classified? And you don't want those tags attached to it? And you want a place to publish freely without classification, without tagging?

• 41:12Chamath Palihapitiya?

  Then there will be a company that supports that too, and you'll see how much people care about that.

• 41:17Jason Calacanis?

  Yeah, I mean, I think the free market could handle what you're saying, Chamath, because I think David's concerns would be the same as mine, which is, who is doing this classification? What kind of transparency is there? And we already have the wisdom of the crowds, which is, things that are outrageous automatically get pushed up on Twitter, which allows anonymous, and then Facebook seems to be, all the top trends seem to be on the right. Let's swing over to Sax. Sax, what do you think of the 1984 proposal from Chamath, the five hundred thousand censors, telling you what to think of a post before you read it?

• 41:50David Sacks?

  Yeah, I mean, it's...

• 41:51Jason Calacanis?

  I don't want to bias the question, but it's an insane idea, Chamath.

• 41:55David Sacks?

  It's a little bit like Twitter fact-checking the politicians they don't like.

• 42:01David Friedberg?

  The digital politburo.

• 42:03David Sacks?

  It's a form of, like, soft censorship.

• 42:07David Sacks?

  And you know, I, I, I actually think that, you know, Zuckerberg gets attacked the most, but I think his position on speech actually makes, makes the most sense. I mean, it seems like what he said is, we want to be a neutral free speech platform. And, you know, whereas I think, you know, Twitter and Snapchat for that matter are much more likely to engage in either, uh, you know, censorship or, or fact checking.

• 42:32Jason Calacanis?

  Which is paradoxical because Twitter's initial position, David, was it was the free speech platform.

• 42:38Chamath Palihapitiya?

  No, I totally agree with you. I think Zuck's position is the most defensible, but it also is the most untenable because it's the most, it's the, it's, it's the least uh, technologically and socially palatable, but it is the most defensible and philosophically, in my opinion, the only position you can have. But it's not, it's not going to be what wins.

• 42:56David Sacks?

  Right. Well, it's, it's, it's, the, the, the reason why Zuckerberg is hated is because if you're going to defend, defend the principle of free speech, you always end up defending speech that society hates, you know, like the ACLU and Spoke.

• 43:10David Friedberg?

  Exactly.

• 43:11David Sacks?

  And, and, and so, you know, Zuckerberg, I think, has done the best job sticking to his guns. I mean, the reason why Twitter is sort of, uh, you know, loved on the left is, is precisely because they gave in to the mob and they've, you know, they've started, uh, taking down accounts that the mob doesn't like, or, or, or, or, you know, fact checking them. Whereas I think, you know, Zuck, and, and that, and Zuckerberg's refusal to do that, and by the way, I don't think he's been like perfect in this regard, but he's been much better about standing up for the principle of free speech. That's what's made him, you know, anathema to the left. I think that and the fact that Facebook still gets blamed for, you know, Hillary's loss.

• 43:50Jason Calacanis?

  Friedberg, I have two, I have two specific follow-ups to what David just said for you, which is, one, how much of this has to do with anonymity being allowed on Twitter versus not being allowed on Facebook? And second, how much of it has to do with the fact that we have algorithms that trend topics? If we didn't have those algorithms trending them, perhaps this wouldn't be an issue because if you wrote something that was inflammatory, it wouldn't, and false, let's say, in that situation, both characteristics, it wouldn't go to the top of the list, which is what everybody's kind of upset about, is that something that's false goes to the top of your feed. Comment on those two issues.

• 44:24David Friedberg?

  Well, I think your second, your second point's an important one, which is like, social media helps to enhance the stimulation of the amygdala. In the human brain, you know, you see something that makes you angry or something that makes you elated, you are more likely to engage with it. If you see something that is kind of a rational discussion about something that doesn't incite emotion in you, you're less likely to engage in it. And so whatever the engagement model is, it ends up, you know, creating a lot more virality and chatter and it kind of gets brought to the surface. And there's a lot that's been written and said about this that I don't think we're kind of uniquely in a position to say anything more on. And that's obviously what a lot of people are kind of concerned about is the inflammatory and polarizing nature of the content that is getting highlighted on these platforms

• 45:09David Friedberg?

  and is getting greater distribution on these platforms. And then I think to your prior point, I'm not sure it's about anonymity as much as it is about any form of censorship that ultimately can be viewed as biased. So Jim Jordan's points were actually, you know, as much as the guy rants and goes on and sounds like a guy running on the soccer field to punch the coach, it's really interesting to hear the point of view that as a conservative, I believe that a lot of what Donald Trump is saying or what some conservative voices are saying is reasonable and that voice should be heard. And to hear over and over about Twitter pulling these things down and then seeing a whole bunch of stuff like anarchists taking over Seattle and taking over Portland and they don't get their stuff taken down, you know, them claiming that they can hold down the streets of Portland and Seattle

• 45:54David Friedberg?

  because that's, you know, the way that it should be, doesn't, you know, incite any sort of censorship. But Donald Trump saying he's going to end it incites censorship. And so I think it's not as much about anonymity as much as it is about, you know, having censorship tied to a voice and censorship tied to a labeled or tagged point of view or labeled or tagged individual or voice on the platform. So.

• 46:18Jason Calacanis?

  Without anonymity, I think the problem goes away for Twitter. I think Twitter is working on a project, and I've been saying this for a decade, that they should let everybody pay $50 a year, $5 a month, or $30 a year, $10 a month, whatever it is, to go through a verification process to make sure it's their name on the account, which by the way, Nextdoor is doing at scale. Not only do they know it's you, they know it's you're the person who lives at that address because you got a postcard there. I think, and in Korea, South Korea, you're required to put your social security number in to open a social account. That would solve the entire problem. Now, that may seem, and then it would drive other users who want anonymity to anonymous platforms. And that's where Twitter, it's trying to have its cake and eating it too, and they're falling on their face. They have one level, which is troll accounts, because they can do whatever the hell they

• 47:03Jason Calacanis?

  want, playing on a same playing field with people who can. And this is just a disaster for them. Jim Jordan may be an idiot, and just a loudmouth, but I think, I agree with you. If the situation was reversed, and we were talking about Obama being censored for some reason, and the right, and right-wing people, or left-wing people being silenced or deprecated on the platform, you know, soft banned, people would be up in arms. But that was a different form. He should be doing that in a censorship, and they should have a censorship committee talking about that. What do you think, Chamath, about these two issues? Anonymity on these platforms, and the velocity in which things that outrage people, because you yourself, Chamath, went from, hold on, but I want to cue this up for you, Chamath.

• 47:46Jason Calacanis?

  You yourself went from being a perennial guest on a lot of these programs, and then now, since you've been a little bit more vocal about how you feel about social issues, when you said, "Break everything up, who cares?" on CNBC, and then when you said, "Who cares? Let them fail, they don't get their summer ham from his house," you gained 150,000 followers, and now you've learned that if you're more, I don't want to say the word outrageous, but if you're more vocal about social issues, you're going to gain a lot of attention. Do you think you should have been labeled as somebody who is hysterical by your 500,000 people, or being outrageous?

• 48:23Chamath Palihapitiya?

  Both and all platforms are littered with fake accounts. The interesting factoid from yesterday was, I think, Facebook says they take down 6.3 billion fake accounts or something, some crazy, crazy, crazy numbers. So they are paying, playing whack-a-mole. Twitter just basically says, "We don't have the team and the infrastructure, so just let the 6 billion accounts be." That's the only difference between Facebook and Twitter. It's an acknowledgement of the problem and transparency on the reporting. So, you know, look, my point of view on this is that... I think that irrespective of what I believe about free speech,

• 49:06Chamath Palihapitiya?

  I think it's becoming harder and harder for me, just as a layman, reading to figure out what's true and not true. Um, I think that the line is getting very gray. And I think that sources that used to have complete um integrity that were, you know, just um just beyond reproach in terms of their integrity. Um, it's not clear anymore because the business model of the internet is driven towards clicks. So I think what's actually happening is that we are dismantling um information and news and journalism. Um, the first place where I think that goes is places like Substack, which is going to rebuild it bottoms up.

• 49:51Chamath Palihapitiya?

  Where people will vote with their subscription dollars what to believe and what not to believe. And then on top of that, people will overlay aggregation tools. So that you can actually have multi-subscriptions and create sort of like next generation magazines and content subscriptions or whatever. I think that's where the, that's where the world is going in terms of information and content. Jason, my honest belief is that I don't think I've ever said anything that particularly crazy. I just think that I'm reasonably intelligent and I'm precise in what I say. And it cuts through a lot of the bullshit because most people have nothing to say. So um, you know, when I make a fucking investment, I write a one pager and I post it and I'm willing to be held accountable.

• 50:31Chamath Palihapitiya?

  You know, when I don't understand about climate change, I just post about it even though I want to invest $2 billion of my own money in it. And so I think uh being authentic and just being straightforward is, is sort of like what is valuable at some level on the internet. I think that governments are going to regulate these companies. Let's just be clear. Yeah, and, and you, you. Whatever I think about censorship, it just doesn't matter what I think. Because governments are of a belief that these platforms craft and shape.

• 51:02Chamath Palihapitiya?

  Public opinion and sentiment which drive the aggregation and coalescing of power, which fundamentally disrupts the business model of the politician.

• 51:12Jason Calacanis?

  Uh, let's go swing over to Sax here. Sax, any comments on that censorship issue? Or, uh, the, uh, once very respected sources of news, maybe being less respected now? I think the New York Times came to mind when Chamath was sort of outlining that phenomenon. And then we'll move on to Amazon.

• 51:35David Sacks?

  Yeah, I mean, I, I think there are things that these platforms can do to elevate the, uh, you know, the, the discourse, you know, the, the quality of the information people are getting. I think that, um, eliminating the bot accounts, I think it's a huge problem on Twitter that, that it's, you know, that they're out there, um, they're not really doing much about it. Um, I think that's something they could improve and fix. Um, you know, requiring people to, to be who they purport to be, you know, I think, and this is tied to the bot issue of, you know, not allowing, um, these sort of, um, sock puppet accounts. Um, so the, but, but the thing about those, those steps that they could take is they're speech neutral, right? The rules would apply to everybody, um, you know, to Friedberg's point. And so I think they should look at doing more of those things.

• 52:20David Sacks?

  But, you know, what I'm concerned about is that, um, you know, so, so much of the, um, the debate, so much of the pressure that's being brought on Facebook is to actually moderate and control the, the type of speech that occurs on its platform. And, um, and I think the reason why Zuckerberg is, is attacked more than say, you know, Jack Dorsey is because he's been more resistant to, to doing that.

• 52:47Chamath Palihapitiya?

  I, I think, I think it's actually because you have a bunch of what seems like real names. But again, I think that there's a fake account issue on Facebook that's just as bad as Twitter. It's just the difference is, you know, the, the fake accounts on Facebook have proper first and last names, whereas Twitter, you have all kinds of alphanumeric garbage as a, as an account name. So here's a different proposal. Why, you know, maybe what, maybe what we need is the decision that we allow complete unfettered free speech.

• 53:15Chamath Palihapitiya?

  And there's a layer of both Facebook and Twitter and YouTube where that's completely allowed. But the precursor to have that access is you need to put in your social security number or something that's uniquely identifiable by your government. So that if you say something and there's a law against you saying something, already a pre-established law, there's recourse.

• 53:32David Friedberg?

  Where can you go and be anonymous, Timoth? Because, you know.

• 53:35Jason Calacanis?

  On a webpage. You can create any webpage you want.

• 53:37Chamath Palihapitiya?

  No, but no, what I was gonna say, then I think what it creates is a decision by a user to coalesce on completely different platforms if what you want is complete anonymity for a very different reason. And I think that that's very reasonable, too. My point is, the solution to this, David, is diversity. Not to have one thing and two companies try to create some Swiss Army knife Frankenstein product that solves this. It's just not possible. And I think we're both saying the same thing, which is like, you have completely different behaviors trying to go in through the same channel. It's not possible.

• 54:11David Sacks?

  I actually, I like the idea of these platforms doing more to eliminate bot accounts and anonymity. Because those are neutral rules of the game, and they do improve the quality of the debate that occurs on those platforms. I think those would be good things. I think it's just hard to do. I think that those companies may even want to do that. It seems like Facebook certainly does. It's just a hard thing to execute.

• 54:34Jason Calacanis?

  It's actually not that hard. I mean, if you just said, hey, listen, this account, in order to have a verified account, you have to have a phone number and email. So that's two steps that a spammer trying to create a lot of accounts would not be able to do, because you'd have to get burn a phone number after burn a phone number, which is a cost. It's possible.

• 54:50David Sacks?

  Right.

• 54:51Jason Calacanis?

  But it's a cost. And if you want to be verified, we need your phone number, and we need your email address, and we need you to put in your credit card and get charged a dollar on your credit card just that we have a credit card.

• 55:02David Friedberg?

  Overnight Reddit would become the new Twitter. Overnight Reddit would become, 4chan would become the new Facebook. I mean, overnight, like, like.

• 55:09Jason Calacanis?

  I'm not saying to have an account, Friedberg, but to have the blue checkmark. So you would still be able to, and then over time, people could say, I don't want to see replies unless they've been verified. And it could be just a toggle you pick.

• 55:20Chamath Palihapitiya?

  By the way, Facebook, Google, and Twitter already have this mechanism because that's what they do to graduate advertisers up the spending curve. You know, you can start as an anonymous advertiser, just spending, you know, onesie twosie dollars, you know, just off of a webpage, basically, just you go through and you do self-serve ads, and the more you spend, or the more targeting capability you want, you graduate, you self-identify, you give more information, you get more capability back, you get more trust in the system. So, it does exist for the customers of these big tech companies, and this is the other big thing. What it shows you is that it's actually solved the problem for the customers, it just doesn't solve it for the, you know, feudalist feedstock, which are the users.

• 55:59Jason Calacanis?

  Because they won't pay, and so if you said, "Hey, listen, there's an on-ramp to verify."

• 56:03Chamath Palihapitiya?

  Users are not the customers, no, the users are the customers.

• 56:05Jason Calacanis?

  They could though, Twitter's coming out with a paid version, so they're obviously on the halfway there. They're going to come up with a paid version of Twitter. Jack said it on his quarterly earnings call.

• 56:15David Sacks?

  I'm gonna sell my Twitter stock.

• 56:17Jason Calacanis?

  Well, I mean, it's not one or the other, Friedberg, though. You don't have to pick one or the other. You could still be anonymous, but you have the opportunity, because right now, they're not accepting new verified users, and unless you're a muckety-muck, you don't get to even go down that route. So, shouldn't everybody have the ability to do that?

• 56:32David Sacks?

  I would like, I mean, I personally would like Twitter more if it verified identity. I mean, I don't, I don't think there should be a speech tax, I don't know why they have to charge a dollar, but, but taking additional...

• 56:44Jason Calacanis?

  Well, because charging a dollar means we have your credit card. It's just another hurdle, that's why I put it at a dollar.

• 56:48David Sacks?

  Yeah, yeah, yeah, you can do it like a one-dollar auth without actually charging anyone's card, yes, you could do that.

• 56:53Chamath Palihapitiya?

  For example, like, if you actually force people to verify by putting in their social security number, like, there's a couple of guys I follow, I'll just name them, Scott Adams, who wrote the Dilbert comics. There's a guy, Mike Sodavich, who I'm really not sure I understand his politics, but I follow him because I, because, you know, he posts all kinds of...

• 57:11Jason Calacanis?

  He's a rabble-rouser, rabble-rouser.

• 57:13Chamath Palihapitiya?

  But my point is, you know, it's not just people on the left, but I think it would be people on the left, people in the center, people on the right, who would basically pay the quote-unquote "tax" because they're already real people.

• 57:24Jason Calacanis?

  And and they would just they would then have more guarantees and assurances that Twitter won't be arbitrary and I think that makes Twitter better and if it maybe makes it smaller right and then maybe you're right Friedberg like 4chan or 8chan or Reddit become good for a different kind of behavior by the way I mean like that's what we do today we don't eat the same fucking thing every goddamn day we don't wear the same pants every day

• 57:47David Sacks?

  I agree with where he's going with that I mean the the the defining feature of Reddit is that it is basically anonymous people have usernames but you never know who it is and pseudonyms and it creates a certain kind of conversation and that's fine Twitter is supposed to be real people I mean it's not I mean Facebook even more so but you know when I think about the accounts that I follow on Twitter um you know it's it's you know all of them are real people occasionally you'll get occasionally you'll get a pseudonymous

• 58:17Jason Calacanis?

  VC Braggs

• 58:18David Sacks?

  you you yeah you'll get like a startup L Jackson or something like that and um you know and I and I think that's okay

• 58:25Jason Calacanis?

  yeah but you would choose to then follow them

• 58:27David Sacks?

  the difference with like a startup L Jackson is they're not a fake account they're just using a pseudonym

• 58:32Jason Calacanis?

  right

• 58:33David Sacks?

  and you know that when you follow them

• 58:34Jason Calacanis?

  and over time they've proven to be to provide some value that makes people follow them and so you could be anonymous if you get a certain number of followers I guess you rise above the noise here's another solution there there are no um there's no nuance about truth or how much you believe this is true as a voting mechanism so if you were verified on Twitter and there was a scale that says how true how truthful do you believe this is and you could slide it uh and pick I you know from one to five you could actually have another signal there what do you think about some sort of a signal to Tramath's point about uh community value saying I buy this I don't

• 59:13David Friedberg?

  97% of people wouldn't use it and the 3% that do would completely bias the result

• 59:18Jason Calacanis?

  okay Tramath what do you think would happen

• 59:19Chamath Palihapitiya?

  I agree with Friedberg I I don't I don't think that's a it's just I don't think it's a really good idea um my my only comment was just offering the other thing by the way I know it sounds crazy it was just offering it as like the you know the the way that this um negotiated solution will end up and it's kind of sort of what these internet companies are being forced to do which are these weird you know pseudo action bodies that like review things and like you know so it's all just a slippery slope to that outcome

• 59:47Chamath Palihapitiya?

  But by the way, you were speaking about Startup Al Jackson. You know, there was another guy, Super Mugatu. And, you know, he turned out to be this, you know, really good, young, up and coming investor, Dan McMurtry. And he was sued, you know, he used a pseudonym for a long time, built up a huge audience, and then flipped himself and basically came out and said, here, my name is Dan McMurtry, and I run a fund, and, you know, it was wonderful.

• 1:00:10Jason Calacanis?

  Yeah, I think it's a very good marketing strategy. It's a growth strategy now. Be Startup Al Jackson, then you wind up becoming a venture partner.

• 1:00:17David Friedberg?

  When are you going to announce that you're the guy behind VC Brecs?

• 1:00:23Chamath Palihapitiya?

  I'm not ready to do that.

• 1:00:24Jason Calacanis?

  I'm not ready either. I'm not. People thought it was me. I was like, I'm getting tortured.

• 1:00:28Chamath Palihapitiya?

  Wait till you hear that I'm the guy behind Zero Hedge. That'll really freak you out.

• 1:00:32Jason Calacanis?

  Well, Zero, I mean, Zero Hedge is instructive. Didn't he get banned, or she get banned, for posting about stuff in coronavirus that eventually turned out to be acceptable and true?

• 1:00:42Chamath Palihapitiya?

  Now imagine if he had verified his account, he had his social security number, he had all that stuff in there. Just verified, that's it. Just information that says Zero Hedge is real. It's a real person.

• 1:00:51Jason Calacanis?

  Yeah.

• 1:00:52Chamath Palihapitiya?

  And, you know, the rule is, when you're at that level of verified, you can publish whatever you want.

• 1:00:57David Friedberg?

  So you can, you can say false statements as a real person? So Donald Trump is a real person, he's a verified account, and he's saying things that Twitter is then determining are false or inflammatory.

• 1:01:07Chamath Palihapitiya?

  I would rather, you know, them not try to do it. And I'd rather have pundits that you can believe in. So the other problem is, like, look, when you have public figures, you have punditry around public figures, but the problem isn't what that person says, it's you can't believe the punditry, because half of them are fake. So at some point, you have to break the cycle, and somebody has to be real.

• 1:01:32Jason Calacanis?

  Well, and this is the problem with, the Trump issue in a pandemic is two edge cases put together. And now we're figuring out what the actual cost of it is. Trump said masks are bullshit, you don't need to wear a mask, blah, blah, blah. I choose not to wear a mask. I'm not going to give people the satisfaction of seeing me in a mask. Turns out masks are correct. We, we should have put that, or should we have put in front of Trump's non-mask comments, hey, this is against what the guidelines are? Or the fact is, the WHO said, the World Health Organization said you shouldn't wear masks. Then it turns out, now we have a bunch of conservatives dying who didn't wear masks.

• 1:02:13Chamath Palihapitiya?

  No, I don't think, I don't think you should have put anything there.

• 1:02:16Jason Calacanis?

  And let all the conservatives who believe him die.

• 1:02:19Chamath Palihapitiya?

  It's not about letting conservatives die. I think that's a crazy way of positioning it. Like, he's allowed to have his opinion. And really, like, if anything, I think social media has shown that the way that we use to venerate, um, like, veneration is sort of like, uh, it's kind of, it's been disrupted by social media. Like, the idea that you venerate somebody because, like, they won an election in a moment is so crazy. Because they are basically like you, and in many cases, maybe dumber than you.

• 1:02:47David Sacks?

  With respect to, I mean, all these ideas surrounding the idea that we need to regulate these platforms, um, I think we should just remember that the way stuff gets into your feed is that you make the decision to follow it. You know, these feeds are self-curated. I mean, there is this issue about, well, you know, the algorithm does sort of, um, emphasize or sort of increase the volume. Um, and, you know, we want to make sure those algorithms, um, you know, are done in a neutral way. They're not, they're not biased somehow. But, you know, the, the, the content that appears in people's feed is content they've, they've chosen to see.

• 1:03:19Jason Calacanis?

  With the exception of trending topics on both platforms.

• 1:03:22David Sacks?

  Well, like I said, though, as long as those algorithms are unbiased and work in a speech-neutral way, I think they're, they're fine. Um, but the, you know, the, the, the reason why Facebook has been boycotted,

• 1:03:36David Sacks?

  is, is that they're, they refuse to censor some of Donald Trump's tweets. You know, and, but, but you don't see those, uh, you don't see those posts, rather, unless, uh, you've chosen to follow them.

• 1:03:48Jason Calacanis?

  I, I think it's crazy that they want to ban him.

• 1:03:51Chamath Palihapitiya?

  Problem is, it's a chain of, it's a chain of fake accounts and real accounts, right? Let's be honest, it's a combination of both that exists on both Facebook and Twitter to amplify content in ways that none of us really understand. And I would, I would be very skeptical that anybody there really understands every single piece of content, how and why it gets weighted the way it does. And, you know, like, I bet you that there's probably a way to tell whether an account is fake. I mean, obviously, they have system integrity tools to figure this out. That's, there's no way you could have eliminated six billion accounts if that wasn't true. But then, you know, you choose not to suppress the weighting of those, or maybe you do suppress the weighting of them entirely. It's just an all

• 1:04:34David Sacks?

  You're talking about, but in terms of implication, okay, so maybe, maybe you can game the trending topics that way, but you can't get in my feed unless either I choose to follow you, or you you pay to, you know, run an ad, which my eyes are just trained to skip over. So I, you know, I, I think if you're to ask the average person, do you believe that you are sort of influenced by deceptive content on Twitter and Facebook, or you're sort of unduly influenced, they would say no, you know, none of us believe that we are. But then if you ask

• 1:05:11Chamath Palihapitiya?

  But if you, if you said, do you interact in groups and forums with a bunch of people that you don't know, the answer would be A hundred percent yes.

• 1:05:21David Sacks?

  What I'm saying is that the average person doesn't believe that they're unduly influenced, but, but if you ask them, do you think other people are, they would say

• 1:05:27Chamath Palihapitiya?

  Yes. David, of course, like, it's like, you know, when you're having a fucking slurpee, it's like, you know, do you think that this is unduly gonna hurt you? No.

• 1:05:34Jason Calacanis?

  It's 1,200 calories of liquid sugar. All right. I think we beat this horse to death. There's no solution, just on the edges. But let's, let's go to Amazon, because I thought that this was a particularly interesting one. Amazon, I thought came out the best of everybody, and is the least likely to be broken up. I think some of you agree with that. What were your impressions on Amazon's performance and Amazon in terms of being broken up? Let's start with you, Friedberg, and then we'll go back to Shama.

• 1:06:04David Friedberg?

  I think the intention of antitrust laws, obviously, is to protect consumers and protect markets and protect market pricing from being manipulated by monopolists, monopolies. And so, you know, the, the, the point that was made about Walmart years ago is the same point that's being made about Amazon today, which is that they're crushing small, local businesses. And as a result, there is a lot of damage being done, and they are quote unquote, too powerful. But the reality is that the, the pricing effect of what they're doing Is what needs to ultimately be scrutinized and I think is what will ultimately drive whether or not these guys have either some massive penalty or get forced to break up.

• 1:06:45David Friedberg?

  And so you ask yourself the question, look, if I'm gonna buy, call it a mattress, or let's use something like a pillow. Is it cheaper for me to buy that pillow as a consumer through Amazon or from the local store? Now, what if the local store is put out of business because of Amazon? And now Amazon is the only place I can get a pillow? Is the pillow now gonna be more expensive or less expensive than it would have been otherwise? And I think that is the lens by which we need to kind of assess and the regulators will ultimately assess whether or not Amazon is causing harm in the marketplace because of its position and its power.

• 1:07:20Jason Calacanis?

  What do you think?

• 1:07:21David Friedberg?

  Look, I have several businesses that sell on Amazon. And it is fucking expensive. One of my companies I'm on the board of, we've been the number one food product on Amazon multiple times. And we kind of slide up and down the top 10.

• 1:07:36Jason Calacanis?

  Can you say what that is?

• 1:07:37David Friedberg?

  Yeah, Soylent. Soylent. And so we sell a lot of Soylent on Amazon. And it is expensive, man. I mean, the fulfillment, the shipping, the advertising fees they force you to pay. I will tell you that as a business owner or board member of a business that sells, and I have several others that sell on Amazon too. It is a grind, and it is cheaper for us to sell directly through Shopify.

• 1:08:01Jason Calacanis?

  Why don't you just raise the price on Amazon?

• 1:08:04David Friedberg?

  So to some extent, so Amazon, this is actually part of the problem. So Amazon forces certain best pricing negotiations. If you're a large seller on Amazon, you have to make sure, in order for them to promote you and make you kind of a sponsored item and show you at the top of the list, you have to give them the best deal, sort of like what Walmart does, right? You can't have a cheaper price anywhere else.

• 1:08:24Jason Calacanis?

  Got it. So that was something that did not come up. They force you to have the best price there, even if you charge more on your website.

• 1:08:31David Friedberg?

  It needs negotiated deals. Yeah. And so you have to make sure that you're providing, and I'm not sure what the deal is specifically with Soylent, so I don't want to kind of speak incorrectly here.

• 1:08:40Jason Calacanis?

  No, I've heard the same thing from other folks. What if Soylent?

• 1:08:43David Friedberg?

  That is kind of part of what happens. And so I will tell you, like, it is harder for, it is cheaper for me to sell Soylent. I think it's cheaper for some of these products to be sold. I can tell you my other company, which we sell quinoa, it's cheaper for us to sell through retail stores than it is to sell on Amazon. We actually give up more margin selling on Amazon.

• 1:09:01Jason Calacanis?

  Then why would you do it?

• 1:09:02David Friedberg?

  Because of the volume and because they've aggregated all the consumers.

• 1:09:05Jason Calacanis?

  So you've made the decision as an entrepreneur to sell your quinoa in all places even though you lose some margin, you make it back in aggregate.

• 1:09:12David Friedberg?

  Well, this goes to the market problem. Well, this goes to the market problem because now I have less choice as a business owner because the only place I can find consumers is in this online marketplace called Amazon. I can no longer go sell at 50 local grocery stores because people don't go to the frigging local grocery stores anymore. And that's obviously a little bit of an extreme statement, but let's say I'm a pillow guy. I can't go sell at 50 pillow stores because they've all been shut down because all the consumers go to Amazon.

• 1:09:36Jason Calacanis?

  But could you also sell at Target and Walmart and those other competitors who seem to be doing just, you know, pretty well, actually?

• 1:09:42David Friedberg?

  They're doing well, yeah. And a lot of people have said that they're the kind of, you know, the exceptions, but there's a thousand versions of Sears and other stores that haven't done as well. Walmart and Target just happen to be extremely well-run businesses, but there's nothing fundamental

• 1:09:55Jason Calacanis?

  What if Amazon kicked you off the platform and said, "We're not going to allow third-party sellers"? Would you be happier or would you be sadder?

• 1:10:01David Friedberg?

  We'd be sadder.

• 1:10:02Jason Calacanis?

  Got it. Chamath, what are your thoughts? Amazon-specific?

• 1:10:07Chamath Palihapitiya?

  Yeah, I think David said it really well upfront, which is that it's a, it's kind of a when and not an if. So it's, you know, Amazon today, I don't think is at risk just because its end market is so big, but I think within five or 10 years, it definitely will be looked at through the same lens as Facebook and Google and actually just those two. Look, and I think David said it also really well, like the antitrust law that you would get, you know, to be successful if applied to Facebook and Google has nothing to do with users and content and it has everything to do with the pricing of the ads to their customers.

• 1:10:49Chamath Palihapitiya?

  And if anybody actually were smart enough to figure out whether there was some... way in which their auctions were working that was effectively pricing inventory in a market quote unquote or in a system manipulated way that's probably the best hook to nab one of these folks in antitrust law but other than that it's going to be regulation if terms of Amazon I think they're going to get away unscathed what's incredible by the way is you know two days later they're like hey by the way we just got an FCC license and we're going to launch a $10 billion satellite constellation and you know if you if you looked at their RFP to the FCC the number of people that you know basically complained and cried it was incredible.

• 1:11:32David Friedberg?

  By the way I think this is a huge important point that we haven't made which is the benefit of scale for large innovative companies there is no way any company would have out of the blue been able to afford a $10 billion distributed satellite program without having customers and all this other stuff lined up Amazon can afford to take that risk just like Alphabet has taken the risk with self-driving cars and did so before anyone else for many years.

• 1:11:53Jason Calacanis?

  Which is a net benefit for society correct David?

• 1:11:55David Friedberg?

  Which is a net benefit for society so by having scale by having incredible profits by and then by reinvesting it in R and D creating jobs innovating it's the only way this kind of stuff is going to get done you're not going to get it done by breaking up these companies and having 100 companies that only have $10 million a profit each and then each of them are you know no one at all can afford to do these grand important projects that that move markets forward.

• 1:12:18Jason Calacanis?

  Ultimately for humanity Friedberg you see these trillion dollar plus companies as because they can make those big swings a net benefit for humanity.

• 1:12:26David Friedberg?

  As a technologist and as a kind of person that hopes for the future I hope I hope that they that these sorts of companies can continue to persist and that they're led by people that want to take innovative risk with R and D dollars and by the way if they don't they're going to fucking fail eventually right it's these guys that are leading these companies and and putting these crazy bets on crazy new ideas that are allowing these businesses to remain competitive. And if they didn't, and you know, some big company manager were to come in and start running these things and distributing cash and dividends back to shareholders, these wouldn't be happening and, and you know, capitalism would take care of itself. And then the next big innovative risk taker that can generate a profit and reinvest that profit

• 1:13:09David Friedberg?

  in a smart way would end up winning in the marketplace.

• 1:13:12Jason Calacanis?

  Uh, Sax, you are a big investor in SpaceX at Kraft Ventures, I understand. Uh, and when you see Bezos copy every single thing Elon does from, you know, launching the rockets to then putting up the satellites, do you think he's just a copycat?

• 1:13:28David Sacks?

  Well, I, you know, I, I think he's the scariest monopolist out of the, the whole bunch. Um, you know, if you look at kind of Amazon versus say Google or Facebook or Apple, I mean, those, those other companies are sort of sticking to their original footprint. Whereas Amazon keeps expanding into new areas. Um, you know, it's that, that whole mantra he has about your profit is my opportunity. And so, yeah, with each, uh, you know, with, with each advancement they make as they get into, you know, as they get to a new level of scale, they then turn around and, uh, and seek to take over kind of, um, the, the, you know, the areas that, um, that their vendors or, or business partners are operating. And so, you know, it started with, first they did retail, you know, books, and then

• 1:14:12David Sacks?

  they expand into other areas of retail, and then they take over, um, infrastructure. And now there's talk about them getting into, to freight or trucking. Um, and so, yeah, they keep expanding into these new areas and it's, it's really a statement about our politics. I agree with Jamar that, that Bezos went pretty much unscathed. And I think it has a lot to do with, you know, he, he did win the internet with that opening statement that he gave. It was really, um, sort of great, you know, rags to riches, only in America type story. And, um, and so I think, I agree with Jamar, he's going to get away pretty unscathed, but I, I do think that they are the scariest monopolists of the bunch.

• 1:14:47Jason Calacanis?

  Well, comment specifically on him copying every one of Elon Musk's ideas.

• 1:14:54David Sacks?

  Well, you know, copying is, it is, it is sort of a part of the game, you know, it is part of the game. And I've heard you attack Zuckerberg for doing the same thing. And, you know, look, I get it. You know, we, we, we prize innovation and we, we, we love innovators. But as soon as you say that you can't, that other companies can't copy those innovations, you do stifle progress.

• 1:15:18Jason Calacanis?

  Yeah, but I, I look at it as more, how consistently you do you do that as your playbook? When you look at Amazon Basics, this is the point I wanted to make when, and I made in my, my earlier podcast, which was, you know, the Amazon Basics and the third-party seller system is the thing that they keyed in on these hearings. They did not key in on the issue of that Friedberg brought up, which was, what is the margin they're taking from those third-party sellers, which I think would have been a much more deft approach to questioning them. But when it comes to third-party sellers, the fact is, they're allowing people to compete with them on their own platform, which drives prices so low.

• 1:16:03Jason Calacanis?

  And when they make a better USB-C cable, that doesn't take a genius to make a better cable. So do you think Amazon Basics should be allowed and is great for humanity? Or do you think that that using of the data, because they have the sales data on it, is in some way abhorrent and a problem, given the way antitrust laws are currently framed for Saks?

• 1:16:28David Sacks?

  Well, okay, so I, I think this is an area where, so the, the area you're talking about is the way that these platforms treat the applications or small businesses that operate on their platforms. And I do think this is a good area for, for Congress to keep scrutinizing. There, there, there's a saying in, in chess that, that the threat is greater than the execution. So sort of a chess strategy principle. I think that's true here, where we, I, I, I think the execution would be a disaster if we actually impose a lot of these rules, if we broke up these companies, if we Stop Amazon from innovating. I think that would be a disaster for for those companies and for

• 1:17:10David Sacks?

  the economy because I do think they do a lot of good things. But in a weird way, I think we have to keep threatening to do those things in order to get these companies not to do anti-competitive things. I mean, we heard Bezos say that he couldn't guarantee that they weren't using their their seller's data to to to in inappropriate ways, basically Amazon to break Amazon's own policy. And so I think you do have to apply this kind of scrutiny to these companies because I don't think we want to be retroactively, you know, remediating a situation. I don't think we want to be breaking them up or doing something like that. But I do think we want them second guessing these anti-competitive decisions before they actually happen. Because otherwise, you know,

• 1:17:54Jason Calacanis?

  So some scrutiny, some rules, but we certainly don't want to ankle them versus their competitors in China. As we wrap up here, because we're getting way past our hour, we're now at 80 minutes, and we set a max of 90 here was what we all agreed on. I want to talk about the election. We are now at the 100-day mark. We all thought Biden was a shoo-in. Now I have my own thesis. I want to float it and see what you guys think. You had Trump start wearing a mask last week, telling everybody they should wear masks. Now there's universal discussion of wearing masks. We've got a little bit of vaccine hope, and we'll get to Friedberg's position on is that vaccine

• 1:18:34Jason Calacanis?

  false gold, or is it actual reality? But we know that masks are going to take three or four weeks, if they're implemented properly, for us to see the caseload go down, which then the caseload starts going down. And three or four weeks after that, the deaths would start going down. We may have even seen a little plateau in the number of cases. Cases is ramping up. We hit a record 850 or 900,000 just yesterday at the time of taping, I think on the 29th of July. Now, my thesis is, Trump goes all in on masks. The vaccine starts to show promise right as the debates start. He gets in there with Biden.

• 1:19:14Jason Calacanis?

  We see caseloads go down. We see deaths plummet. We get down under 250 deaths per day in America. By September 15th, the market rips and on end of September, we have the first presidential debate. Biden dunks on a senile or maybe not crisp Biden, Trump sails in. And we were just talking two months ago. Anything could happen, but Trump was definitely not going to be there. Let's go around the horn. Friedberg vaccine false gold or really promising? And what happens in the election?

• 1:19:50David Friedberg?

  I think there's tons of promise with vaccine news in the next two months, three months.

• 1:19:58David Friedberg?

  I guess the point is you're going to hear more upside than you're going to hear downside news on vaccines for sure. You know, whether or not we have a vaccine and by when and yada, yada.

• 1:20:07Jason Calacanis?

  Percentage chance we have a vaccine?

• 1:20:09David Friedberg?

  We're going to have a vaccine. I think it's a function of how many doses at what point in time. And you know, there is this 30,000 trial happening with Moderna right now. There's a Russian vaccine that just got approved yesterday in Russia that they're saying is ready to go and they're starting to distribute it. So there is a vaccine, there are vaccines, right? This is a known known. So that news will only continue to improve and build and there'll only be more and more indications of success with vaccines between now and November. How that affects markets, I think, I'm not sure that drives markets as much as some of the other stuff that's going on in markets with the Fed and with policy and with stimulus packages.

• 1:20:52David Friedberg?

  I think those are frankly important drivers right now and how much the markets ultimately affect the election, I don't know. So yeah, it's still, it's all still pretty uncertain.

• 1:21:04Jason Calacanis?

  Who's going to win?

• 1:21:06David Friedberg?

  I think it's pretty uncertain. I talked at one right now.

• 1:21:09Jason Calacanis?

  You can put your entire net worth on one person. Go.

• 1:21:13David Friedberg?

  Um, yeah, I, I, I, I still think Trump is, um, I, I, I kind of have been, uh, vacillating on this. I, I think Trump is probably, uh, only going to improve from here on out.

• 1:21:26Jason Calacanis?

  So your entire net worth is on the line in three, two, place your bet.

• 1:21:32David Friedberg?

  I'd go Trump.

• 1:21:33Jason Calacanis?

  Wow.

• 1:21:34David Sacks?

  Well, it's still, it's, it's still, it's still to me, I mean, Trump is, has got to be the huge underdog here. I mean, right now it looks like Biden's going to win. I mean, his basement strategy could backfire in the sense that if, you know, fundamental conditions improve with respect to COVID or the economy, the fact that he hasn't said anything, done anything, gone anywhere, um, you know, it, it, it, it could, it could turn out to be a mistake, but right now it, it looks like it's working and, um, and you know, Trump seems to be completely knocked off his game. Um, you know, just earlier in the week, he floated this trial balloon about delaying the, the election that was completely shot down by, um, Republicans and it seems like

• 1:22:13Jason Calacanis?

  When you saw that, what did you think as a Republican? When you saw him tweet that, what did you think? What was your emotional visceral reaction as our token conservative?

• 1:22:20David Sacks?

  You know, I'm not, uh, I, I, I don't, I don't necessarily identify with, with partisan politics, so let me just, I have to state that, but.

• 1:22:27Jason Calacanis?

  But what was your reaction as an American to him saying delay the election?

• 1:22:30David Sacks?

  Yeah, of course. Everybody, everybody shot it down for.

• 1:22:32Jason Calacanis?

  Your, your reaction?

• 1:22:34David Sacks?

  Everybody shot it down for good reason.

• 1:22:35Jason Calacanis?

  Not everybody, your reaction, Sax.

• 1:22:37David Sacks?

  Of course, of course, we're not going to delay the election. We've, you know, um, you know, we, we, we haven't delayed the, we didn't delay the election to, to fight.

• 1:22:45Jason Calacanis?

  He's so scared of being pinned as a Republican. He's, it's not going to fuck with your deal flow, Sax. You can be a Republican. Okay, your entire net worth, we have to wrap, your entire net worth, Sax, you could, right now, three, two, net worth.

• 1:23:00David Sacks?

  Yeah, right now it looks like Biden's going to win, but Trump's, Trump's been knocked off his game and, and me to say like, I, I think the, the problem that Trump has right now is he's a salesman without a sales pitch. Um, you know, you, you go back to the State of the Union, pre-COVID, he had it all worked out. He was going to run on the greatest economy ever, keep America great. That issue's been taken away from him and it seems like he's still trying to regain his footing. He's trying to figure out what to run on and the fact that he can't do these rallies, which were really, you know, the fact that he was able to go in 2016 to these swing states, he would be, you know, flying around on his plane and, and, and you'd three, he did three rallies a day in these swing states with tens of thousands of people.

• 1:23:38Jason Calacanis?

  He wanted it, he wanted to win.

• 1:23:40David Sacks?

  It was, it was, it was that and it gave him a way to go over the heads of the media and speak directly to the people and then those people talk to other people. There's a lot of word of mouth. And so he, the inability for him to hold those rallies, I think has just been devastating for the type of campaigning that he likes to do. And so in a weird way, we have less than 100 days to the election, but it feels like the campaign hasn't really started yet because Trump can't do rallies and Biden hasn't left his basement.

• 1:24:07Jason Calacanis?

  Okay, Tremoff, entire net worth on the line, all Sacks, SPAC B, SPAC C, SPAC D, whatever you got SPAC'd up, all your Sacks on the line, everything, the warrior's position, three, two,

• 1:24:24Chamath Palihapitiya?

  But we don't need to guess, but I'll tell you why. You know, we had a 33% drop in GDP. We have double-digit unemployment. And I think Trump's real path to winning the White House, which we talked about before, was getting an enormous stimulus bill passed and he didn't force the Republican Senate to the table to make sure that these unemployment benefits didn't roll off. Now, there's a very practical problem with these unemployment benefits, which is that it is not administered at the federal level. It's administered by literally 50 state agencies that run relatively decrepit software. Now, just so you guys know, why did

• 1:25:06Chamath Palihapitiya?

  we pick $600? It was an estimated numerical average because what the Republicans really wanted to do was just top it up. You know, whatever you used to get to get to 100, and it was technically not feasible to implement across 50 different.

• 1:25:21Jason Calacanis?

  Right. So somebody in Boise, Idaho is different than somebody in New York.

• 1:25:26Chamath Palihapitiya?

  So they were like, ah, 600 bucks. So my point is, it's going to take four to eight weeks to re-implement unemployment insurance, once we decide what we're going to do. So that basically, if you started today, puts you somewhere between September 1 and October 1. And the, you know, so you have then 30 days to basically catch a positive tailwind, or 60 days, so call it midpoint 45 days. You know, you have now federal eviction laws that are rolling off. So I think that it's setting itself up for a very, very difficult path. He just stopped spending, I believe in Michigan, Trump did.

• 1:26:06Chamath Palihapitiya?

  Um, which is, you know, not a good sign. Um, he actually has overspent in Georgia. Um, so if you look at the facts on the ground.

• 1:26:16Jason Calacanis?

  Your entire net worth goes on?

• 1:26:18Chamath Palihapitiya?

  No, Biden, it's a, it's a languishing campaign. As of today, David is right. He's a salesman without a pitch. And unfortunately, he's a, the path isn't clear. The path should have been paved with money.

• 1:26:30Jason Calacanis?

  It's such a no brainer.

• 1:26:32David Friedberg?

  Uh, here, let me, let me give you one last poll.

• 1:26:34Jason Calacanis?

  All that money too. And why would you stop printing the money? If you gave everybody $1,200 and six weeks of unemployment, why not just do it for another six weeks and give everybody another 1,200? I don't understand why that's such a difficult decision for Trump. Friedberg, go.

• 1:26:48David Friedberg?

  Let, let me give you a scary poll that just came out by YouGov. It says, um, 55% of supporters of Donald Trump say that they will not accept the election victory of Joe Biden if mail-in votes are, are, are allowed.

• 1:27:03Jason Calacanis?

  Wow.

• 1:27:03David Friedberg?

  So, you know, the, the, the framing of this is actually a little bit more serious than just who's going to win. There is a further polarization, constitutional crisis question, rioting, you know, whatever disregard for the election entirely kind of moment coming up here. Because Trump and others have kind of framed this as such a non-election election, because it's all fake and it's all fake news and it, you know, this is all part of the conspiracy. So there is something scary brewing, I think. And that, that's what I'm kind of most interested in tracking is really where does this all go?

• 1:27:35Jason Calacanis?

  Percentage chance that we get to a constitutional crisis and Trump says, I'm not leaving the White House on a percentage basis, Friedberg?

• 1:27:42David Friedberg?

  I don't think he'll say, I'm not leaving the White House. I think he's going to be fucking happy to go back to wherever he's going to go.

• 1:27:47Jason Calacanis?

  Okay.

• 1:27:48David Friedberg?

  Yeah. But I think it, it, I think there's going to be other ramifications that are worth us figuring out and thinking about because that's the scary stuff that's coming next.

• 1:27:55Jason Calacanis?

  Okay.

• 1:27:55David Sacks?

  That's a 25% chance of a constitutional crisis. I think if the election's close, we could easily have like a Gore v. Bush type situation. Uh, it could be very damaging for, for the republic.

• 1:28:06Chamath Palihapitiya?

  I do not think there will be a hanging chat issue in this election. This is going to be, one way or the other, incredibly decisive on an electoral college level.

• 1:28:15Jason Calacanis?

  Okay, final.

• 1:28:16Chamath Palihapitiya?

  It's not set up for it to be that, that close.

• 1:28:20David Sacks?

  Okay. Well, I, I, I don't think the election is, right now, it's not trying to be close at all. It's trying to be a blowout. And so I think we'll avoid the, the crisis because it's not close and it looks like Biden's gonna run away with it. But if it does get super close, um, you know, I could imagine there being a crisis based on people not accepting it. If the margin of error is within the margin of these mail-in ballots and you have, you know, at 30, 40% of the population saying they're not gonna accept it, um, I'm, I'm not saying we'll have like a legal crisis, but I think you could have a legitimacy crisis. It could be very bad for the republic.

• 1:28:52Jason Calacanis?

  Uh, not as bad as Trump's presidency, clearly. Uh, so, uh, final question, final, final question. If Trump believes he's not gonna win, and he's essentially given up right now, which it feels like he's kinda given up, what would, do you think, who would win if Trump says Nikki Haley and Pence can run? I've done such an amazing job. I've been the best president in the history of the union, but I wanna get back to my life and I think Pence, Nikki Haley should go for it. What happens and who wins? Sax. Too late for that?

• 1:29:25Chamath Palihapitiya?

  Too late for that? You can't, you can't put Pence and Nikki Haley on the ballot?

• 1:29:28Jason Calacanis?

  Why not? Of course you can, if he says, I'm feeling under it.

• 1:29:33Jason Calacanis?

  If he bows out, the Republicans would have to pick a successor. It's not a new third party that the Republicans would be allowed to pick a successor. If he said, I'm not doing it for, uh, you know, health reasons, whatever the reason he comes up with. Who wins? Nikki Haley? No? Too silly?

• 1:29:48David Sacks?

  This is silly.

• 1:29:49Jason Calacanis?

  I think he might drop out. I think there, I'm putting it out there. I think it's a 5% chance. He doesn't wanna be demolished and he says, you know what? I'll take the deal. You agreed to not prosecute me getting out of here. Uh, I'll take it and, and.

• 1:30:01David Friedberg?

  I changed, I changed my bet to Joe Biden. I've changed my bet.

• 1:30:05Jason Calacanis?

  After this? After you risk your whole net worth to change to Joe Biden?

• 1:30:08David Sacks?

  Well, he's, he's clearly the favorite right now and the question is whether there's still time for there to be a change.

• 1:30:14Chamath Palihapitiya?

  I mean, honestly, I think we should stop betting on what the outcome is. I think it's stupid. I think what we should really be worried about is what are we doing like letting tens of millions of Americans roll off of unemployment insurance with zero, like the Republican Senate went on vacation.

• 1:30:33Jason Calacanis?

  It's ridiculous. I mean, they should all be fired. It's the craziest thing. We have the biggest crisis in our lifetime. If you roll up the last three crises, 9/11, dot-com bust, and the Great Recession, those three pale in comparison to the magnitude of this one, and these motherfuckers are going on vacation. I agree with you. It's outrageous.

• 1:30:54David Sacks?

  I don't think partisan politics are that interesting, but I think they will eventually pass a bill. I think the issue on the unemployment is not that the Republicans don't support an extension of unemployment, but the magnitude of the unemployment now exceeds what workers would get if they went back to work. And so I think they're concerned about creating a disincentive for workers going back to work.

• 1:31:16Jason Calacanis?

  So why not split the difference? Why not make it $300?

• 1:31:19Chamath Palihapitiya?

  Honestly, it is such fake fucking news. Like, it's like, it has been shown that people then end up spending that money. Like, I don't know if you guys saw, but like, there are industries that are posting, it's not just Facebook, Amazon, and Google, posting meat and beats like you wouldn't believe, in boating, in housing, people are spending this money. It drives GDP. So whether you put 600 or 200 or 1,200 into people's pockets, they have a proclivity to spend it.

• 1:31:45Jason Calacanis?

  They should have gotten something done.

• 1:31:47David Sacks?

  Trump, as well as all the Republicans who are up for reelection, I think would just cave on this issue. And I think it will get done. The Republicans who are opposing it are the ones who aren't up for reelection and are concerned about debt. You know, that's the, that's the, that's the concern that all of a sudden people have.

• 1:32:05Jason Calacanis?

  What does debt matter if we go into a depression, David? Why not, the incremental six weeks of unemployment, put it at $300, but get something done, David. Why are you not getting something done, David? Why is your team fucking this up, David?

• 1:32:20David Sacks?

  Yeah, I don't, I don't wear a jersey. I'm not on a team. But I think they will get something done. I mean, I'm not, I'm not defending them.

• 1:32:27Jason Calacanis?

  When they're back from vacation, do you think they should have gone on vacation?

• 1:32:30Chamath Palihapitiya?

  They're on their own vacation, David. They can't. They gotta come back to work.

• 1:32:33Jason Calacanis?

  These guys went duck hunting instead of taking care of the 15 million. Your team went duck hunting.

• 1:32:38Chamath Palihapitiya?

  They're not in Washington DC.

• 1:32:41David Sacks?

  Obviously, there's a lot of, there's enough Republicans who want to get something done. I mean, why not blame the Democrats for being too intransigent?

• 1:32:47Chamath Palihapitiya?

  Sorry, what I'm saying is, it's not Republicans. I'm saying the entire Senate is on-

• 1:32:51Jason Calacanis?

  No, the entire, we're breaking your chop sacks. The, the entire group should not have gone on vacation.

• 1:32:56Chamath Palihapitiya?

  The entire, half, half, half of the Congress is gone. They're about to be found.

• 1:33:02Jason Calacanis?

  Where are they? What, what are they doing that's more important?

• 1:33:06David Sacks?

  Maybe they're hanging out in their basement like, like Biden.

• 1:33:09Jason Calacanis?

  I love you guys. All right, everybody stay safe. Uh, on behalf of the dictator himself, bestie C, the, the, uh, SPAC Meister himself, stay safe Chamath. On behalf of the Queen of Kinwa, the Fried Burger himself, stay safe David Friedberg, uh, in whichever one of your three houses you're in right now. And,

• 1:33:37Jason Calacanis?

  and to Rain Man, he's definitely, burn, don't burn baby. He's definitely a great driver in the driveway.

• 1:33:45David Sacks?

  Yeah.

• 1:33:45Jason Calacanis?

  Yeah, definitely still, yeah, he's definitely investing.

• 1:33:49David Sacks?

  I gotta watch Wapner.

• 1:33:49Jason Calacanis?

  Wapner, and of course you have the fish sticks, and of course he's still investing from Kraft, certainly Kraft Fund's still investing. We'll see you all next time on the six most popular podcast out of the gate. Let's see, maybe if you tell your friends about this podcast, we'll go to number one on the technology list. Uh, love you boys. Stay safe. Can't wait to play poker. Bye. Great job, everybody.