E50: Crypto investing deep dive, Facebook's whistleblower fallout, Chappelle's new special & more

Show Notes: 0:00 Mercury is in retrograde & impacting the besties 2:01 Sacks on Solana, sophisticated crypto strategies, crypto deep dive 26:23 Building regulatory framework for utility tokens, institutional money in crypto 40:59 Facebook whistleblower, potential ramifications & regulation 57:10 Comparing potential Facebook regulation to Microsoft regulation in the 1990s 1:02:34 Is decentralization a solution for social media? 1:09:09 Chappelle's controversial new special, All-In summit & more Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://coinmarketcap.com https://www.bitgo.com/newsroom/press-releases/galaxy-digital-to-acquire-bitgo https://www.coindesk.com/policy/2021/09/30/fed-chair-powell-says-he-has-no-intention-of-banning-crypto/ https://www.bitwiseinvestments.com https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether https://twitter.com/KariyaKanav/status/1446207805220917252 https://www.ledgerinsights.com/sec-gensler-calls-out-utility-tokens-in-european-crypto-asset-briefing/ https://techcrunch.com/2021/10/06/fantasy-equity-nft-game-wants-you-to-spend-real-money-buying-fake-shares-of-real-startups/ https://techcrunch.com/2021/10/07/fantasy-startup-investing-nft-platform-visionrare-shuts-down-paid-marketplace-after-a-day-in-open-beta/ https://nypost.com/2015/06/14/141m-sculpture-may-point-to-top/ https://www.facebook.com/zuck/posts/i-wanted-to-share-a-note-i-wrote-to-everyone-at-our-company-hey-everyone-its-bee/10113961365418581 https://www.netflix.com/title/81228510 https://twitter.com/DavidSacks/status/1446245636563619840 https://twitter.com/DavidSacks/status/144624654499108864

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

• 0:00Chamath Palihapitiya?

  Our daughter's head has dropped because the, our doctor, she, she felt the head and she was like, "Yeah, it's, it's..."

• 0:06David Sacks?

  Hey Chamath, whose head has gotten bigger? Yours or your daughter's?

• 0:13Chamath Palihapitiya?

  What do you mean?

• 0:14Jason Calacanis?

  Don't quit your day job, Sax.

• 0:16Chamath Palihapitiya?

  Yeah Sax.

• 0:16David Sacks?

  That didn't quite land.

• 0:18Jason Calacanis?

  That didn't land.

• 0:21Speaker 03

  He's trying out material. Total flow.

• 0:23Chamath Palihapitiya?

  We are not in rhythm. You know why? It's Mercury retrograde. Our 50th episode is gonna suck because of this.

• 0:30Jason Calacanis?

  Here we go. Three, two.

• 0:49Jason Calacanis?

  All right. The Facebook whistleblower hearings occurred and Facebook, um,

• 0:54Chamath Palihapitiya?

  No, but where's your, "Hey, everybody. Hey, everybody. Hey, everybody."

• 0:56Jason Calacanis?

  Hey, everybody. Huh. Three, two. Hey, everybody. Welcome to another episode of the All In Podcast. Episode 50. We made it to 50.

• 1:04Chamath Palihapitiya?

  Cinquanta.

• 1:05Jason Calacanis?

  Nobody expected us to make it. Here we are. We've made it and everybody is thrilled to be here with you. And thank you for the support over the first 50 episodes.

• 1:15Chamath Palihapitiya?

  One episode closer to getting canceled.

• 1:16Jason Calacanis?

  One episode closer. Man, how great would it be to be canceled and never have to work again? Oh, that'd be wonderful. Okay. So Francis Haugen revealed herself on Sunday night on 60 Minutes and then appeared before the set on Tuesday.

• 1:33Chamath Palihapitiya?

  Intros or no, we're done with that?

• 1:36Jason Calacanis?

  Hey, you're unbelievable.

• 1:37David Sacks?

  Doesn't the audience know us?

• 1:38Jason Calacanis?

  Mercury retrograde. Mercury retrograde.

• 1:40Chamath Palihapitiya?

  Mercury retrograde. I'm all fucked up.

• 1:42David Sacks?

  Doesn't the audience know us by now after 50 episodes?

• 1:44Jason Calacanis?

  Everybody loves the intro. Three, two. All right. With us again this week is the Rain Man himself, David Sax and the Queen of Kinwa, David Friedberg.

• 1:56Chamath Palihapitiya?

  I love the intro.

• 1:57Jason Calacanis?

  Of course, the dictator Chamath Poliopetia and I'm your boy Jay Cal.

• 2:01Chamath Palihapitiya?

  Sax, I gotta say, I think, I think your AUM is positively correlated with the bags under your eyes.

• 2:09David Sacks?

  If you mean it's getting bigger, you're correct.

• 2:11Jason Calacanis?

  Yes, they're heavy.

• 2:13David Sacks?

  Good lord.

• 2:14Jason Calacanis?

  They're heavy, dragging you down.

• 2:16Chamath Palihapitiya?

  That's where you're hiding all that Solana in your fucking, under your eyes.

• 2:20Jason Calacanis?

  You better clear that Solana position. What's your lockup? 24 months? Fuck no, he's trying to sell it to me on text message.

• 2:26Chamath Palihapitiya?

  Yeah, of course he is.

• 2:28Jason Calacanis?

  We're negotiating discounts. I just had the.

• 2:30David Sacks?

  Hey, you're fucking the whole thing up.

• 2:32Jason Calacanis?

  Bro, you don't, you don't think.

• 2:34David Sacks?

  I'm holding, I'm holding.

• 2:36Chamath Palihapitiya?

  You think I buy hundreds of millions of dollars of anything without a discount?

• 2:39Jason Calacanis?

  Everything is a discount. Everything's discounted. You want to clear that position in an LLC?

• 2:44David Sacks?

  Are you saying I got a billion dollars of Solana?

• 2:46Chamath Palihapitiya?

  No, bro, I'm saying I have one, but you know, I brought it at a discount.

• 2:49David Sacks?

  But you're holding, correct?

• 2:51Chamath Palihapitiya?

  Ish.

• 2:52David Sacks?

  Yeah, okay. Yeah, me too.

• 2:55Jason Calacanis?

  Well, I mean, if something apprecia-, at what point is the appreciation in an asset that you've invested in early, something you need to, you know, at least clear a position of and lock in a win? I mean, what, what's enough? A hundred X, 500 X? You gotta, at some point, bank a win, right?

• 3:11Chamath Palihapitiya?

  Well, I think you have to put things in a bucket of like, is it an investment? Or is it something that represents an idea that you love so much? If it's the latter, you should never sell. If it's the former, yeah, you gotta manage risk.

• 3:24David Friedberg?

  Or rather, you know, is it a trade or is it something you want to own?

• 3:28David Sacks?

  By the way, let me just clean this up because um, it was, Solana was not a direct investment for us. What we did is we invested in um, in a crypto venture firm called MultiCoin Capital. This is back in 2017. We realized like crypto was becoming like a full-time job for us. It was a total rabbit hole. And we were like, we don't have time to figure out this like 24/7 trading stuff. But we met Kyle and Tushar, who were these two young guys. We met them through Vinny Lingam, actually. And they were creating MultiCoin Capital and we actually invested, we gave them a million bucks at a 20 cap to help set up their firm. And then we invested in their, they had both a venture fund and a hedge fund.

• 4:08David Sacks?

  And they were like the first money into Solana. So that fund, I mean, it's, it's like a hundred X fund. It's just like bonkers.

• 4:15Jason Calacanis?

  Crazy.

• 4:16David Sacks?

  And so as a result of that, we are um, indirect beneficiaries of this huge increase in Solana. It will end up being about, you know, a billion dollars of, I think, Solana for us in terms of returns. But um, but it's the MultiCoin guys determine the trading decisions on that.

• 4:34Jason Calacanis?

  Yeah. And so people who don't know, Solana is a programmable, you know, Ethereum competitor, I guess, and it's at $50 billion or so market cap. It was trading at a dollar not long ago, and now it's at 164.

• 4:48David Sacks?

  It's an Ethereum competitor, basically, for, you know, a smart contract platform. And there's a lot of people, I'd say, smart money in Silicon Valley, who are betting on a flippanting where Solana could ultimately overtake Ethereum as the preferred platform. But even if it doesn't overtake Ethereum, you know, it's the number eight cryptocurrency right now, you know, it could go, there's a lot of people betting it'll go to number three or, you know, what have you.

• 5:13Jason Calacanis?

  Additionally, it is a fraction of a penny for a transaction, and it can do many more transactions than Ethereum. So it's, you know, technically should be much cheaper. If you're buying NFTs right now, you're probably spending, you know, tens of dollars, you know, in fees on Ethereum, whereas if you did those same NFTs, which some people are starting to do on Solana, they would cost a fraction of a penny. Correct, David? Or Shrimma?

• 5:42David Sacks?

  Yeah, I think the, the platform is, is known for being a faster, cheaper, you know, blockchain.

• 5:47Jason Calacanis?

  Really, really, congratulations. And if Vinnie Lingam's Instagram is any indication, he did pretty well because his Instagram suddenly turned into a world tour on private jets.

• 5:57David Sacks?

  Yeah, he's like, which, which, which island should I buy? And well, like, Vinnie was sort of like a, I don't think he's full time in multicoin, but he was sort of a venture partner to Kyle and Tushar, and he helped set them up. This is back in 2017. He helped bring us in as the first investors. And I mean, for us, it was sort of a founder bet combined with a, like a team, like sort of a space bet. Like, we knew the cryptocurrencies were starting to be traded 24/7. We knew it required more of like a hedge fund skill set than what we had. And so we made, you know, we made a bet on those guys. And man, it's

• 6:34Jason Calacanis?

  One of the nice strategies, right, Sax, is if you are LPing in new fund managers, which I've done a couple of times now, you get to learn from them and basically dive into a data set of a new market, right? I mean, it's like one of the nice things about being an LP in a fund is you can place a small bet, whether it's 50K or 500K or 5 million, whatever it is, you, you get like this meta education of an entire sector, correct?

• 7:02David Sacks?

  Yeah, but I think, you know, we didn't do it to learn from them, although we have. It's more that we realized that crypto was, like I said, becoming such a rabbit hole. Like, we realized we would either need to do crypto full time as a fund, or we would need to like partner with people who actually did. And you see that with like a lot of VC firms now. Is there creating like specialized crypto funds? Or at least they have specialized crypto partners? There's so much to know about the crypto world. It's a hard thing to invest in unless you're like totally focused on it.

• 7:31David Friedberg?

  I've struggled with that. Like, I've tried to go deep on a couple topics and like I realized, holy shit, I've been in this for like four to six hours just trying to learn this stuff and I'm not like there. And then I feel uncertain about making any decisions. I totally get it. I mean, you gotta have folks like working on this and the pace is changing so rapidly. You really need to kind of be up to date on what's next.

• 7:52Jason Calacanis?

  You know what the other issue of Free Bird is? When you look at crypto, people use the word crypto as if it's like, that's all there is.

• 7:58David Friedberg?

  Totally.

• 7:59Jason Calacanis?

  Crypto is like distributed computing.

• 8:01David Friedberg?

  Yeah, right.

• 8:02Jason Calacanis?

  Ecash, cryptography, you know, financial modeling or building new economic systems, Chamath?

• 8:10David Friedberg?

  There's business model innovation, there's technology innovation, there's economic innovation.

• 8:14Jason Calacanis?

  Distributed computing innovation.

• 8:16David Friedberg?

  Yeah, infrastructure, infrastructure, hardware. I mean, there's, there's quite a lot of layers of activity. Chamath, are you spending time in crypto yourself? Or do you have people doing it for you? Or how are you kind of?

• 8:28Chamath Palihapitiya?

  Yeah, we have, look, we have, we have a lot of it.

• 8:32Chamath Palihapitiya?

  A lot of a lot of everything. So, yeah, we have things.

• 8:36David Friedberg?

  But do you go deep yourself, Chamath? Like, how do you spend enough time to really get up to speed on all the goings on?

• 8:44Chamath Palihapitiya?

  I cherry pick and I snipe and opportunities where I get intellectually curious and jump in. But a lot of the credit goes to my team. There's a couple of folks that spend a lot of their time in it. And, you know, we've, we've had a couple of people do extremely well for us. You know, similar, similar to David's story back in the day.

• 9:11Chamath Palihapitiya?

  You know, I invested in Barry Silbert and DCG.

• 9:15Jason Calacanis?

  Second market Barry Silbert.

• 9:16Chamath Palihapitiya?

  Yeah, and, you know, DCG is now, I don't know, I'm guessing a $20 billion company.

• 9:23Chamath Palihapitiya?

  Maybe more, I don't know.

• 9:24Jason Calacanis?

  So how does it mechanically work with your team? They are investigating opportunities and then they come to you and bring you, you know, hey, we'll do a meeting and I'm going to share four with you. And then you say, hey, let me get on the phone with that guy.

• 9:33David Friedberg?

  Do you basically go deep, go deep when something shows up, Chamath?

• 9:37Chamath Palihapitiya?

  No, so basically what happens is they have carte blanche to do whatever they want. And what they're typically doing is they're working with entrepreneurs to seed projects and, you know, to, to, to get projects off the ground. And then at some point when those, when those projects become large enough, then they'll issue tokens and, you know, we'll get a certain allocation of those tokens. And so we've done that for, you know, call it, I don't know, some number of projects that we think are valuable. Then along the way, you know, they'll have certain views on Bitcoin. They'll have certain views on Ethereum, they'll have certain views on Solana, and we'll make capital allocation decisions. They tend to have the ability to do whatever they want. And then what I tend to do is just think about when it gets above like it,

• 10:20Chamath Palihapitiya?

  to me, I need to see the chance to make at least, you know, in the rough justice around, you know, 500 to a billion dollars and then I'll get involved. But otherwise they just kind of run the whole thing.

• 10:32Jason Calacanis?

  Let me ask you guys a question here. You know, when you look at the market caps of these projects, it seems like things are changing. Cardona or Cardana is number three now. And Tether still remains number five, XRP is still number six, but Solana.

• 10:50Chamath Palihapitiya?

  I would encourage people to not look at it like that. I think looking at it as a rank list betrays what it is. So, you know, I'll give you a simple example. Let's like, compare the fate of two projects. Or actually, right now, there's a distributed form of Discord that's being built.

• 11:07Jason Calacanis?

  Discord, the chat app.

• 11:09Chamath Palihapitiya?

  Yeah.

• 11:09Jason Calacanis?

  Popular amongst gamers.

• 11:10Chamath Palihapitiya?

  In a completely distributed way with an integrated crypto wallet. Because if you look at Discord, it's really two cohorts of people. There's gaming and there's crypto, right?

• 11:18Jason Calacanis?

  Those are the two big ones, yeah.

• 11:19Chamath Palihapitiya?

  So, you know, that's an example of a really interesting product that has some real potential. Then if you look at something like DSO, DSO is a decentralized social.

• 11:34Chamath Palihapitiya?

  Programming framework, then if you look at something like helium, that's completely about building a large distributed, you know, connection of on-ramps to the internet, so internet connectivity. So those are three completely different ideas with three completely different paths to success. If to invest in those tokens, you have to believe in three totally different sets of things. So to look at it on a rank list and just buy something because it's cheap is stupid. Yeah, no, no, my question was, it's stupid. Don't do that.

• 12:05Jason Calacanis?

  That wasn't really my question. My question was, you know, we have an extraordinary number of the public who've invested in Bitcoin and Ethereum as number one and number two, and those projects feel maybe stagnant when compared to the dynamism of what I'll call, you know, the projects launched in the last three or four years.

• 12:24Chamath Palihapitiya?

  Because they're different, no, no, but you're talking about confusing. Again, that's what I mean. Those are layer one protocols, right? Meaning they are at the core substrate of how all of crypto is going to work. Then you have these other projects that build on top of these things in different ways or build around them. So my point is, if you don't have, if you don't want to take the time to understand which layer twos you want to own and which layer ones you want to own and why, I think you're much better off.

• 12:51Jason Calacanis?

  I understand your point. My point is.

• 12:53Chamath Palihapitiya?

  Buying an ETF or something else because there are, there are ways to own these things. So for example.

• 12:56Jason Calacanis?

  David, Solana is, does not need Ethereum to exist. So my point is, do we, do we see a day when this, you know, the past decade has been about Bitcoin and Ethereum. Do we see a day when maybe people stop buying those and start buying these new ones?

• 13:14David Sacks?

  Anything's possible, but here's, here's the evolution of our thinking. I mean, the first step was realizing, okay, we need to own Bitcoin. Why? Because, you know, there's now enough evidence where what, like a decade, we're more than a decade into this, nobody has been able to essentially counterfeit a Bitcoin. It is, you know, new money. It is, it is better money. So if you, so I'm not going to convince people right now of the argument for Bitcoin, but if you believe in it, that's sort of the first step is you realize you really need to have one to two percent. Some of your portfolio in Bitcoin in the event that fiat money sort of becomes debased and eventually you move to crypto. Then you realize, well, wait a second, Bitcoin is just one application of blockchains. There's a bunch of applications of blockchains.

• 13:56David Sacks?

  So maybe we need to own not just sort of, you know, digital money, but we also need to own the underlying blockchain platform and that leads you to Ethereum. Then you realize that there's a bunch of competitors to Ethereum and it's still very early days and one of those guys might ultimately displace Ethereum as a blockchain platform. Then you realize that there's all these applications on top of all these blockchains. And so, you know, the conclusion I come to after all of that is I can't figure all this out. And well, maybe I could if I was willing to go back to school and like make this a full-time job, which I just don't want to do. I mean, I'm lazy and that's why I focus on SaaS. Like that's what I know.

• 14:30Chamath Palihapitiya?

  Your killer zone.

• 14:31David Sacks?

  Yeah, like I'm not going to reinvent myself.

• 14:33Chamath Palihapitiya?

  It's like you playing Hold'em versus PLO.

• 14:35David Sacks?

  Right, right. Right, exactly. So, but this is why we partner with MultiCoin Capital. So, what I would just say is like, the idea that you as an individual investor are going to like, you know, pick off the one cryptocurrency here or there to invest in. I mean, that's going to be a lottery. I would, I would find a manager basically who is really good, who has a track record, who understands this stuff.

• 14:56Chamath Palihapitiya?

  Our approach is to hire very young, extremely technical computer scientists and mathematicians to basically do the work.

• 15:05Chamath Palihapitiya?

  That's, that's working.

• 15:06David Sacks?

  Yeah. And, you know, one of the things that I think these guys do, and the reason why it is very helpful for them to be computer scientists is these are all open source projects. So they go look at the repos. Just go look, go look.

• 15:18Chamath Palihapitiya?

  You can actually see the changes being made. And this is like, do you realize there's only 12 people who are actively working on Solana? In the.

• 15:25David Sacks?

  But you need to, you need to look at all the code check-ins.

• 15:27Chamath Palihapitiya?

  Seven of them work for Solana.

• 15:29David Sacks?

  You need to look at all the code check-ins. You need to look at the velocity of the code check-ins. So you can see like how many projects are being created on these platforms.

• 15:36Chamath Palihapitiya?

  The white papers are also really exceptional. Like if you, if you read these white papers, they are, they're, they're, they're really incredibly thoughtful and, and well-written and you can really understand what their goals are and. You can make some informed decisions there, but again, if you're not going to be in the business of being in this ecosystem, because I think David's right. Everything is moving so fast. What's successful today could be just a dog tomorrow and vice versa. That I think speculating in this market will, not only will it be super volatile, but more than likely you're going to lose all your money. So I would encourage people to not speculate in crypto. I would encourage you to figure out an elegant way of having an abstracted bet if to the extent you care about it.

• 16:19Chamath Palihapitiya?

  And by the way, in the UK, for example, there are ways where you can own publicly traded mutual funds

• 16:26Chamath Palihapitiya?

  that give you exposure to this. It's just simpler.

• 16:27Chamath Palihapitiya?

  Like ETFs. Yes. Yeah, but there are mutual funds of crypto. Do the work, find these mutual funds, just own those things and let somebody else do the hard work because it is too, it's too hard.

• 16:38David Sacks?

  Some of the other investments we made back in 2017, 2018 timeframe. One was a company called Bitwise, which was creating an ETF for crypto. So it's a monthly rebalanced portfolio of, I think, the top 10 cryptocurrencies. And you could buy it, they finally got approved by the SEC and you can buy it like it, like with a ticker symbol from your E-Trade account.

• 17:00Chamath Palihapitiya?

  Buying Robinhood or E-Trade.

• 17:01David Sacks?

  Exactly. So that was, that was pretty incredible to see the progress they've made. And then the other big bet we made was just institutional custody. Back in 2017, we invested in Bitco. Actually, Bill Lee helped found that company many years ago. And then that became, last year, Galaxy announced a deal to acquire them for, I think, 1.2 billion. Largest crypto acquisition to date. The thesis there was just that crypto would go more institutional and I think we're starting to see that now. Where endowments and so on are realizing they need to have some portion, maybe one or two percent of their portfolio in crypto. And so, you know, they need...

• 17:37Chamath Palihapitiya?

  It's unrealistic. Look, we have two, almost $3 trillion of market cap in crypto. It's unrealistic for folks to expect people to be able to be living in Discord channels and doing all of this work. I think what that means is that the SEC is going to be asked increasingly, more often to approve simpler on-ramps for this stuff. And now, in the last week, by the way, we had a pretty important, two things happen. Both Jerome Powell and Gary Gensler basically said crypto is here to stay and, you know, we're not going to ban this stuff. And so hopefully what it means is that you get some ETFs passed in the United States. You know, grayscale is one, there could be more. And I think that stuff makes it much easier for folks to... Own this stuff.

• 18:18Jason Calacanis?

  Well, a clear regulation would be a great thing for the industry for people to buy into it and removing some of the, let's call them, I don't want to say bad actors, but people who are maybe questionable like Tether, you know, I don't know if you saw the Bloomberg story yesterday, but you know, a Bloomberg reporter basically found out that Tether, he got the list of what Tether owns with their stablecoin. And it looks like they're giving a lot of loans to other crypto projects and own a lot of Chinese paper in that they are basically making the float on $69 billion, sweeping it, which then incentivizes them to take risky bets because they get paid on them and it's anything but a stablecoin. If you think about it from that regard.

• 19:02David Sacks?

  It's, I don't know the details on Tether, I won't speak to that, but I'll say that any stablecoin, if it's not 100% backed by dollars, if that's the currency that's going in and out or other hard currency, that's not a stablecoin.

• 19:17Jason Calacanis?

  Right.

• 19:17David Sacks?

  You know, a stablecoin is supposed to be a service. It's not supposed to be a speculator's currency. It's basically just supposed to be a mechanism by, at the on-ramps and off-ramps of the crypto ecosystem, you can convert your dollars into a temporary, like a stablecoin that will hold its value, so you can, a poker chip that you can use to then buy Bitcoin or Ethereum or whatever.

• 19:40Jason Calacanis?

  Yeah, USDC, USDC, Jeremy Allaire's competitor from Circle, just said that he would switch to 100% to what you're saying, cash, cash equivalents.

• 19:52Chamath Palihapitiya?

  Guys, this is, this has always been a money market fund. It should be treated like a money market fund and it should be regulated and managed like a money.

• 20:00Jason Calacanis?

  Which was Tether's original vision and then they flipped the script because I think they got greedy and now they own, I think, 3% or 4%.

• 20:05David Friedberg?

  And because they want regulated. By the way, by the way, it speaks to the role of regulation. Like, you know, a lot of people have trust and faith because they make some claim, but there's no regulator actually checking on their claims.

• 20:16Chamath Palihapitiya?

  The only people that want regulation are at two ends of the spectrum. So young and so disruptive where they want rails to operate legally and so big and so over the top that they want to basically entrench themselves for the rest of their lives. That's it. No, everybody in the middle doesn't really want regulation.

• 20:30Jason Calacanis?

  What's a, what's a way to create?

• 20:33Chamath Palihapitiya?

  Crypto company or if you're big tech, you both want regulation.

• 20:35David Sacks?

  Well, but yeah, but there are some narrow cases like, again, you know, if, if, if a stablecoin is going to say that we are just a money market fund, we're 100% dollar reserve. It is really nice to have a regulator, somebody we trust to go in there and put the stamp of approval on it.

• 20:52Jason Calacanis?

  FDIC.

• 20:52David Sacks?

  So we can trust it.

• 20:53Jason Calacanis?

  Or an SRO.

• 20:55David Sacks?

  That is a valid role, I think, for a regulator.

• 20:57David Friedberg?

  In traditional financial markets, you have these self-regulating bodies. I think FINRA is a self-regulating body, right? And so, you know, some of these self-regulating bodies should be formed in the crypto community. I don't know if they're doing this, I'm so naive in this space, but certainly would make sense to have an SRO form that, that does self policing effectively within the community, rather than try and bring in a government regulator.

• 21:17Jason Calacanis?

  Here's the thing, if you police yourself, you can really define the execution and the ramifications of that policing.

• 21:26David Friedberg?

  If you have 30, call it competitors and cooperators in the, in the market space doing this together, it can be a highly effective model for creating a system of trust and reliability and not having to, you know, bring in, you know, call it outside incompetence to overseeing the rules and rights.

• 21:43David Sacks?

  Yeah, another area we need standards is around the token cap tables for these projects, right? So how much, how much of the token cap table goes to the founders? What are the rules around them selling? What are the vesting periods? And what are the disclosures around them selling? In public markets, we have 10B5. So if you're an insider who runs these companies, you have to disclose when you're selling. There's no similar rule for crypto. I think there probably should be, right? Like, if you own the, if you own the token and you run this project as publicly traded and the public can buy it, you should really probably have to disclose your, your sales.

• 22:16Jason Calacanis?

  And maybe, you know, these, it's very strange because they're running foundations and I had a crypto person on from a music crypto. Project and he said they had like three or 400 million in this project in Panama. I was like, who's on the board of that? And he's like, I can't say. And I'm like, why can't you say? And he said, security reasons. I was like, well, anybody who's on a public board has to be public. And of course, they have, you know, people who are on the board of GE or IBM or Amazon, they have security issues. Like they deal with their security issues. That doesn't mean they don't disclose who they are. He's like, yeah, I'm not comfortable saying who they are. And it's like, okay, well, they sold three or 400 million. I was like, how do they give that money out? I'm like, he's like, I'm not sure I'm not on it. I'm like, what? Like, there's some organization in Panama? That's, uh, it was really weird.

• 23:00Chamath Palihapitiya?

  And I think one thing that I'll say positively about about these crypto founders is that they will never allow a single venture investor to clog up their cap table. Number one, they do a great job of creating these large, broad syndicates of participation when they seed their projects. And then, you know, a lot of it goes into treasury where then they issue coins as needed. And I think that that strategy actually is very pro employee and pro ecosystem. So, you know, when we see these projects, all these companies tend to raise, you know, three, four, five million bucks. It all tends to be at like 30 million pre, and it all tends to be distributed. So like, you know, you know, it's us and Reese and Sequoia. And it's like, you know, we put in

• 23:42Chamath Palihapitiya?

  200 grand each or 400 grand each. You know, that's why you're forced then go into the market if you believe in a project, and then spend hundreds of millions of dollars to buy into it after the fact. And I think that that's very, um, very powerful. It's a really important dynamic that if it comes back to traditional venture, could be really disruptive.

• 24:01Jason Calacanis?

  Why?

• 24:02Chamath Palihapitiya?

  Well, could you imagine a SaaS founder that basically all of a sudden says, all right, you know what? I'm raising a $6 million Series A. You know, Kraft can take 500K. Sequoia, you can have 500K. Um, you know, blah, bitty blah, folks. And then you raise 6 million bucks that way. And you never allow anybody to have more than, call it, you know, a few percent of a company.

• 24:23Jason Calacanis?

  So the fact that it's like, it's like a mini IPO. It's like a private IPO on Santal Road.

• 24:28Chamath Palihapitiya?

  Yeah. And then your board construction looks entirely different. And then as a result, you know, founder protections probably go way up. Employee protections probably go way up.

• 24:35Jason Calacanis?

  And governance goes way down.

• 24:37Chamath Palihapitiya?

  Uh, no. I actually think what will happen is you're less likely in a round like that to be okay with some dork dingleberry joining your fucking board. You're going to actually point to some industry expert and say, this person is joining my board. She does XYZ job at such and such a startup. And then the investors say, wow, well, that's a pretty great advocate for the business. Go ahead and do that.

• 24:59Jason Calacanis?

  Another thing I learned about this whole token space was when I talked to Anatoly from Solana, when they sold their 300 or 400 million tokens to fund the company because they consider them utility tokens, not shares, they paid taxes on it. So the IRS is getting massive amounts of tax revenue. Well, think about it, they're selling the token, it's supposed to be for utility, therefore it's a taxable event.

• 25:24David Sacks?

  That actually was really smart. That is showing, I think, some wisdom because there's a lot of founders who want to have their cake and eat it too, which is to say, they want to say that these are utility tokens and they don't pay tax. And then when they later get traded, they want to say that they're not, you know, they're not securities. But so when does the tax get paid? I think it's really smart to pay the tax upfront to establish that this is a corporate sale. They're basically paying the corporate tax, right?

• 25:49Jason Calacanis?

  Yes.

• 25:50David Sacks?

  That is what is, because this is, this is the problem is if, if you wait until they're traded publicly and then say, no, no, no, they're, they're utility tokens, not security tokens, the government's going to ask you, well, why didn't you pay corporate income tax when you sold them, right? So that is actually showing some perspicacity, I think.

• 26:08Jason Calacanis?

  Uh, could somebody look that word up for me?

• 26:11David Sacks?

  Do you know that word? Foresightedness, J Cal.

• 26:14Jason Calacanis?

  Okay, great, awesome. It's so great that you have the two producers on either side of you right now feeding you vocabulary words. Well done. So here's, here's, um, you know, another question with this. If the majority of people sacks, um, just put your legal hat on for a second. If the majority of people who bought a token in a, a project, we'll call it the, you know, Acme Crypto Project, they buy Acme coins. If they're buying them and they have absolutely no interest in using them for the utility and they say, I bought these as a speculative device and the founder says they're utility tokens, but let's say 70% of the people who bought them said, I didn't buy them for that reason. They just came out right and said, I bought this to speculate on the price.

• 26:59Jason Calacanis?

  What should the government do? Should they deem them a security or should they deem them a utility token?

• 27:05David Sacks?

  I think that's a complicated question, but I think that there should be an opportunity for these cryptocurrencies to establish themselves as utility tokens because they are, they do serve a purpose. They are designed to be part of a system, right? They're not just objects of speculation. And by the way, even if they were, we don't, we don't treat baseball cards as, you know, as, as sort of as security. So it wouldn't necessarily make them a security just because they're speculated on. They actually do serve a function in a designed computer system. So I think what's important here is that there's a safe harbor where these crypto companies know what the rules are. And if they, if they can basically

• 27:46David Sacks?

  meet the criteria such as by paying corporate income tax when they sell the tokens and other things like that, that they won't later be deemed to be engaged in a lawful sale of securities. I think the, I think the important thing is just that entrepreneurs, founders know what the rules are so they can abide by them and not be

• 28:03Jason Calacanis?

  And they don't right now.

• 28:04David Sacks?

  Well, so they don't get surprised later. They don't get whammied, but with basically, you know, because they are building something legitimate here, you know?

• 28:12Jason Calacanis?

  Right.

• 28:14Jason Calacanis?

  But it would seem to the sniff test if the people buying the tokens have no idea, have never written a line of code, have no use for them.

• 28:22David Sacks?

  I don't see why that's relevant. I don't see why that's relevant.

• 28:25Jason Calacanis?

  Well, because they're profiting off of them as if they're shares and unlike baseball cards, which you can't sell a thousand baseball cards for an increasingly, uh, you know, in a, in a very instantaneous way, you would have to put them in an auction.

• 28:39David Sacks?

  You can't, you could sell.

• 28:40Jason Calacanis?

  There'd be a lot of friction. There'd be a lot of friction.

• 28:42David Sacks?

  You could sell physical coins.

• 28:44Jason Calacanis?

  Yeah. Uh, Friedberg, what do you think? If the majority of people buying a token are doing it to speculate, can the founder say it's a utility token? And then those people who are trading it like either baseball cards, minted coins, whatever analogy shares you want to use are in it for the increase in the value, should it be a security and should they have to play by the rules we play at in the traditional venture startup game?

• 29:08David Friedberg?

  I mean, the question is, what's the utility? So I mean, if you can demonstrate some utility, then maybe that's the uh, the, the, and this will probably be litigated at some point, right? Um, I'm sure there'll be enough capital sloshing around here that someone will say, you know what? We believe strong. I mean, we're seeing this happen with Ripple already. But um, someone will litigate this and we'll get some clearer definition on, you know, what statutes are going to be referenced and what those statutes might say with respect to the, how this ties to the definition of utility and then that'll become hopefully a standard that, that people can kind of look to, to guide them in the future. But it's definitely the Wild West right now.

• 29:49Jason Calacanis?

  Yeah, and the reason I bring it up is because Gensler was sort of floating this argument. Chamath, what do you think?

• 29:57Chamath Palihapitiya?

  I think that um, you can't wipe three trillion dollars of value out of the world. And so

• 30:03Jason Calacanis?

  So pragmatically hard to do, got it?

• 30:05Chamath Palihapitiya?

  So it's here to stay. And it's too institutionalized now. So you know, there's just way too many organized pools of capital that are now speculating inside of this entire ecosystem. You know, I saw a tweet today, there was a, there's a firm, I think like called Jump Trading or something. It's like a high-speed frequency trading organization. And they tweeted out some pictures where, you know, they're, they're uh, they hired a bunch of folks to start a jump and they did a coding bootcamp on Solana. That was their onboarding as an example. So when you have people in high finance, you know, really vested in this thing, uh, and you have three trillion dollars of value that'll go to six trillion and then go to 10 trillion. This can't go away.

• 30:48Chamath Palihapitiya?

  So uh, that's why I think Powell and Gensler had to say some version of that on the record, which is, you know, we're not going to ban this stuff because they know it's not possible. So I think David's right. You have to create some rules, make folks and let folks pay their taxes. You know, I remember, for example, like I did this Bitcoin transaction in 2014 or something. I bought some land, I used Bitpay, I transferred some Bitcoin, bought the land, blah, blah, blah. It was like a, you know, whatever, but then

• 31:16Jason Calacanis?

  Whatever?

• 31:18Chamath Palihapitiya?

  I mean, I left, I mean, I owned a lot at the time, so it wasn't that big of a deal. But my point is, finding a way for me to pay my taxes was a huge deal, I remember. And, you know, we filed the tax return and we tried to make sure that we paid our taxes. These are very complicated, even if you want to be conformant to the government, it's impossible right now. So they just need to create some rules where folks can say, here's what I own, here's what it's worth, tell me how much I owe you, and we're all willing to pay, or not, maybe we're on a, I am. Because I just think it's like, make sure that we can, we can trade around it, hedge it, structure it, do the things that we would normally do with any other risk assets. Right now, that's very hard. And when you own lots of this stuff, it sits in your balance sheet and you just take these

• 32:02Chamath Palihapitiya?

  enormous swings and you're just like, God, you can't do anything around this stuff. And that's not a viable financial market. That doesn't.

• 32:10Jason Calacanis?

  Yeah. To be specific about what Gensler said, I just looked it up here, you know, he compared utility tokens with, you know, laundry mat tokens or tickets to the opera. And he said entrepreneurs are choosing to perceive their tokens as utility to sidestep regulation. And that, here's the quote, "There are highly speculative investment tokens for people who are trying to save or speculate for their future. And that's why I think it's appropriate to bring them inside the investor protection perimeter." I agree with him. I also agree with you, Chamath, that this is a can of worms that I don't know how you put the genie back in the bottle.

• 32:44Chamath Palihapitiya?

  But he's, he's partially right. I mean, he is partially right on some tokens, but he's not completely accurate on some other tokens. I think it's on a case by case basis and it depends.

• 32:53David Sacks?

  Listen, I think anybody who is buying these tokens right now knows that they're engaged in, in financial speculation. This idea that people in middle, middle America are going to blow their retirement savings on crypto, I don't, I just don't really buy it.

• 33:06Jason Calacanis?

  But if they know, if they're doing speculation, then it should be a security.

• 33:09Chamath Palihapitiya?

  No, no, no, David, I think you're totally wrong. I totally buy it. Look at the quarterly returns, the filings of earnings from companies like Robinhood and how much, and Square, and how much money they make from crypto and look at their audience. That's totally not true.

• 33:24David Sacks?

  But don't you think that audience skews really young and they're getting their like COVID stimulus check and they're yoloing it into meme stocks or crypto?

• 33:31Jason Calacanis?

  What does that have to do with?

• 33:32David Sacks?

  Well, because you're making it sound like they're going to blow their retirement savings. Okay, well, if you're talking about a 25 year old who's got $5,000 of retirement savings, maybe, but they still got, you know, they still got 40 years of work ahead of them.

• 33:42Chamath Palihapitiya?

  Hold on a second. Wait, no, they don't. This is going to be the least hardworking generation of our lifetime. Why? No, no, not because they're not hardworking. Why? There's 70 trillion dollars that boomers had that they were about to pass down to these folks. On average, between two and three trillion a year for the next 30 years.

• 34:03Jason Calacanis?

  Also, they know how to do gig work. Like, they're so smart, this generation. They know how to do projects for five grand and float themselves.

• 34:09Chamath Palihapitiya?

  You're going to take one entire turn of the world's GDP and give it to 100 million people in America over the next 20 to 30 years. That is what is actually going to happen. So.

• 34:20David Sacks?

  Yeah. Look, I think.

• 34:22Chamath Palihapitiya?

  Of course, they're going to keep YOLO-ing this stuff.

• 34:24David Sacks?

  Yeah, look, I think, I think we're getting off on like a little bit of a tangent here.

• 34:27Chamath Palihapitiya?

  A good one.

• 34:28David Sacks?

  My, my point is not that there shouldn't be investor protections, but rather that I think we also need to balance another important objective, which is to create a hospitable environment for innovation. And the fact of the matter is that you've got a lot of brilliant, young entrepreneurs, computer scientists, building this financial infrastructure of the future with crypto. It's not just speculation. There is a lot of code being written. It has functionality. There's a purpose to it. We don't, we don't necessarily want to interfere with that to, to the point where we break it.

• 35:00Jason Calacanis?

  Every startup has to do their securities, though, David. All the other startups that are not in crypto are playing by the rules. So it's crypto, people get a pass. It's unfair.

• 35:07Chamath Palihapitiya?

  I agree with J Cal. People make this claim, and I just think it's so specious. Do you think that you would have made a single professional decision in your life based on tax rate? Have you ever made a single, like, I'm going to start this company? I'm going to make this product. You know, I'm going to change this job. I just think that most people.

• 35:24David Sacks?

  I'm not talking about paying taxes. I think it was smart for, for example, Solana to pay corporate taxes on their token sale. I think everyone should pay their taxes. That's not what we're talking about here. And I'm not saying that Gensler shouldn't prescribe regulations. I think that part of the purpose of those regulations should be to give. Entrepreneurs predictability to be able to give them a safe harbor so they can build what they want to build.

• 35:45Chamath Palihapitiya?

  Let me make one final point. I'm just saying from my perspective, I just think that if you have clear sensible taxation, that's 90% of what this industry needs. And I don't think it will, it will change anybody's real motivation to work inside this ecosystem.

• 35:59Jason Calacanis?

  I agree.

• 35:59Chamath Palihapitiya?

  Just like, just like entrepreneurship doesn't change when capital rates, capital gains rates.

• 36:03David Sacks?

  Look, I've, I've paid, I've paid taxes at, you know, on, on all my crypto sales like it was any other investment since the beginning.

• 36:11Jason Calacanis?

  You know, that's not the issue. The issue is when you're a company and you're raising money, should you be allowed to not follow securities law because you say it's a token Friedberg? Uh, when you look at this, an NFT company came out last, this past week that was selling shadow shares in startups and anyone in the world could buy a shadow share in a private company like Stripe, et cetera, in this fantasy football league. They wound up shutting it down or changing it because they didn't want to trade on other people's intellectual property. They were concerned about that. But just looking at it, the public in America, 96% of them who are not accredited cannot buy shares of Stripe in the secondary market, but you can buy NFTs in it and speculate on the NFTs, which are accelerating from,

• 36:55Jason Calacanis?

  you know, a thousand dollars to $500,000 in these different clubs. Um, how is it fair that crypto companies get to not obey basic securities laws? Friedberg?

• 37:06David Friedberg?

  Well, it's not a security. There's no underlying asset.

• 37:09Jason Calacanis?

  Okay.

• 37:10David Sacks?

  It's a collectible and NFT is clearly a collectible, J Cal.

• 37:13Jason Calacanis?

  Uh, okay. And when you produce 10,000 of them and have a marketplace for people to sell them and they're appreciating. I mean, I, I do agree it's something different.

• 37:22David Sacks?

  Sounds like art to me.

• 37:23David Friedberg?

  Yeah, you could go draw a piece of, uh, picture of Stripe and put it on a piece of paper and go down to downtown wherever and stand in front of the burrito shop and try and sell it to people walking by.

• 37:32Jason Calacanis?

  It's qualitatively different than a security, but they're acting as securities in relation to the fundraising of these projects. So I think that's the challenge.

• 37:38David Sacks?

  Not everything is a security.

• 37:39David Friedberg?

  Yeah, there's no secured interest. You don't have any secured interest. It's literally just a, a, like an image, a figure.

• 37:45Chamath Palihapitiya?

  I was just offered a Giacometti sculpture, but I turned it down.

• 37:50David Friedberg?

  How much 60 million?

• 37:51Jason Calacanis?

  I'm not going to comment on the price. Yeah, I had to say no.

• 37:54David Friedberg?

  Was Stephen Cohen selling it?

• 37:56Jason Calacanis?

  Not commenting on the seller.

• 37:57David Friedberg?

  I bet Stephen Cohen was selling it. That was the record deal. Uh, Stephen Cohen bought that Giacometti sculpture a few years ago, like the highest uh, price ever paid at auction for a piece of art in the US.

• 38:06Jason Calacanis?

  Can I just, can I just tell you my problem with, with it? I, I took the price and I divided it by the height in centimeters and it just tilted me.

• 38:15David Sacks?

  Is price per square inch a metric in?

• 38:18Jason Calacanis?

  It is in my head.

• 38:21David Friedberg?

  In 2016, 15, Stephen Cohen paid 141 million dollars for the Giacometti sculpture. Loam odo, odoit. Pretty uh, incredible and I think you're right. It's about 12 inches tall or something.

• 38:36Jason Calacanis?

  I just want to let you know that if you look at the height, it looks like it was done by a 12 year old.

• 38:43Chamath Palihapitiya?

  Oh my God, stop.

• 38:44David Friedberg?

  J Cal, J Cal.

• 38:46Chamath Palihapitiya?

  God, stop.

• 38:47David Friedberg?

  Yeah.

• 38:47David Sacks?

  This is a billionaire equivalent of uh, of crypto and NFTs, right?

• 38:51David Friedberg?

  Totally, totally.

• 38:53Jason Calacanis?

  I don't know what scam this guy's running, but that looks like.

• 38:56David Friedberg?

  I don't know how anyone can raise their hand and say, I have an independent, objective assessment of the value of anything in the world. Um, and you can look at it from high to low and this is all um, effectively a subjective

• 39:09Jason Calacanis?

  This sculpture looks like it was a beautiful sculpture that was in a giant fire and that somebody pulled out of the ashes.

• 39:15David Friedberg?

  It's a beautiful piece. If you want to read a little bit of art history, yeah, you can understand a little bit about Giacometti's work, but it's um, it's a 70 inch piece, not 12 inches, sorry. And um, yeah, his work is all about kind of like, how do you capture the essence of the form? Anyway, this is a super ridiculous tangent.

• 39:32Jason Calacanis?

  It looks like somebody made something out of mud and put it into a clay oven.

• 39:37Chamath Palihapitiya?

  I have a very funny Stevie Cohen story. So this is like 10 years ago at Art Basel in Miami. And uh, the day before the art fair opens, it's called the Vernissage.

• 39:46Jason Calacanis?

  Woodstock for rich people.

• 39:46Chamath Palihapitiya?

  And so uh, you know, uh, it's like a day where you can go and see the, the stuff the day in advance and you can, you know, kind of buy stuff or whatever. And uh, it's very funny. It's kind of like um, You know, like when Walmart does like a Black Friday thing, like everybody lines up and then they open the doors and we all run in and I was standing side by side. We were right at the front of the line. And I noticed that he had these, and this was my first time there, he had New Balance running shoes on. And I thought, what is he doing? But then when the doors went open, they just took off and started running. And I was walking, wearing normal loafers. And then I realized I should have been wearing running shoes.

• 40:21Jason Calacanis?

  You don't own normal loafers. You're wearing Italian loafers. Uh, I missed out on everything. I like the balloon dog guy.

• 40:26David Friedberg?

  It's like the, it's like the running of the bulls.

• 40:28Chamath Palihapitiya?

  I missed out on, it was, it was the running of the bulls. I missed out on everything.

• 40:31Jason Calacanis?

  Running of the billionaires.

• 40:32Chamath Palihapitiya?

  I got to the things after and I was like, oh, sorry. I sold it to Stevie Cohen. I sold it to Stevie Cohen.

• 40:37Jason Calacanis?

  Jesus Christ.

• 40:39Chamath Palihapitiya?

  I had blisters on my feet. It was brutal.

• 40:40David Friedberg?

  Do you guys know we haven't even started our agenda?

• 40:43Jason Calacanis?

  No. Episode 50 is a dreamer.

• 40:48Jason Calacanis?

  Fucking moderating this. 3, 2. All right, Facebook whistleblower hearings occurred, yada, yada.

• 40:53David Friedberg?

  Hey, everybody, everybody. Welcome to the All In Podcast.

• 40:55Jason Calacanis?

  Jesus Christ.

• 40:56David Friedberg?

  Welcome to the All In Podcast. Let's start our show.

• 40:58Jason Calacanis?

  I'm sure everybody by now has seen Francis Haugen on 60 Minutes and testifying. She seemed incredibly credible, well spoken, and had very common sense, non-extreme views about what should be happen, what should happen with the research that Facebook has been funding. That shows, like other media forms, Instagram and Facebook have a really terrible effect on young people, specifically young girls and body dysmorphia, which seems to be the one thing that is landing pretty well. Her suggestions were not to break up Facebook. Hers was to have a regulatory body and to do soft interventions. If you don't know soft interventions.

• 41:40Chamath Palihapitiya?

  Her, her suggestions were worse than breaking up Facebook.

• 41:43Jason Calacanis?

  Well, soft interventions, let's get to that, include things like, hey, in order to retweet the story on Twitter, you probably should read it first. She thinks she wants to reform, or she's an advocate for reforming Section 230 in relation, I think, to the algorithms. And the idea here would be that the algorithms are making an actual editorial decision, which is something that I remember in the YouTube early days. They said, we will not feature your videos that you're making, but we will have the algorithm pick them because that keeps our safe harbor. Zuckerberg.

• 42:16Jason Calacanis?

  Came back and wrote a spirited defense, basically saying, "Why would we do this research if we didn't care? The people at this company care a ton." Sax and the entire Peter Thiel cobble of, you know, acolytes and friends are coming on strong as pro-Facebook. I'll have him talk about that. He thinks it's Facebook. It's laughable that people are addicted to Facebook, yada, yada. So who wants to go first? You, Chamath, or Sax?

• 42:52Chamath Palihapitiya?

  Well, look, let me say a couple of things. I think that, I think Zuck's, the title of Zuck's internal company post could have been titled "Nah-ah," which basically was his way of saying, "This is ridiculous and I don't believe it." The thing that she asked for in substance is a little different than what the DOJ did with Microsoft in 2000, but in form is actually quite similar, which basically is like gumming up how the internal product development would work inside the company. And, you know, the most damaging thing you already saw, which is that they had a bunch of planned product

• 43:30Chamath Palihapitiya?

  releases, and then they put them on ice. And I think this is really where, unfortunately, the most damage gets done. Because engineers won't really tolerate that for some amount of time, right? They'll put up with it initially. But, you know, you've had, I don't know, I think like a 20% reduction in stock price. So you had, you know, you lost $200 billion of market cap. There's probably going to be more turbulence in the company. You can sustain and get through all of it as long as the engineers hold the line. But if you basically slow down and put a pin in their ability to generate code and to put out features...

• 44:14Chamath Palihapitiya?

  On the margins enough people I think will get frustrated and leave. And I think the way that she, you know, what she is asking for was tantamount to that. And I think that's the really destructive part of, of what could go on here. So they need to get this pinned down quickly, get in front of regulators, get some laws passed, whether it's section 230 or whatever. That's the path to salvation for Facebook.

• 44:36Jason Calacanis?

  Sax, what do you, what do you think? I see you're basically saying this is like ridiculous and silly on Twitter. Mike Solana saying that. Obviously Peter Thiel is on the board of Facebook.

• 44:47David Sacks?

  You're gonna have to, you're gonna have to give me time to unpack this, Jake, without getting hysterical, because there is, there's a lot to go over here.

• 44:53Jason Calacanis?

  No hysterical, I want, I'm literally throwing it to you in a non-hysterical way. You think that this is, there's nothing to this, and you think it's ridiculous.

• 44:59David Sacks?

  First of all, let's, let's understand what this really was. Okay. You have this so-called whistleblower who is working with the staff of the Senate Judiciary Committee, giving documents to the Wall Street Journal, and then appears on 60 Minutes in this great unveiling. 36 hours later, she's testifying on Capitol Hill. That does not happen. The Senate committees do not operate that fast. This was coordinated. She's got a Democrat, a well-known Democratic operative named Bill Burton working for her. She's got a team of lawyers. She's got a PR team. This whole thing.

• 45:29Jason Calacanis?

  Coordinated by who?

• 45:30David Sacks?

  This is a coordinated hit, okay, by anti-Facebook forces, starting with the Senate Judiciary Committee, who want to regulate.

• 45:39Jason Calacanis?

  Who?

• 45:40David Sacks?

  She's working with the staff, Jake.

• 45:41Jason Calacanis?

  Hold on, Jason, Jason, stop.

• 45:42David Sacks?

  You're already interrupting.

• 45:43Jason Calacanis?

  Jason, I'm asking you who? You said she's working with somebody. I want to know who it is.

• 45:46Chamath Palihapitiya?

  Just let him make this argument and then just stop. Let, I want to hear what he has to say.

• 45:51David Sacks?

  Okay. What is the purpose of this testimony? First of all, we can go over the details of what she said. I don't think there was anything new here. This was all the same arguments we've been hearing from these same sort of forces who want to regulate Facebook, whether it's the, whether it's the senators on the committee who've hauled up Zuckerberg no fewer than four times to lecture him about the need for more censorship, or it's these forces in the media who basically want Facebook, it's all about, you know, having more censorship. But in any event, there was nothing really new there. What this really was, was corroboration and. Of of of the same talking points we've been hearing for years. And where and what it's all leading up to is there's a very important part of her testimony.

• 46:33David Sacks?

  Which is, this is really the crux of it, is that they that she proposed. And what Blumenthal wants, he's the chairman of the Senate Judiciary Committee. Is a dedicated oversight body, this is in this clip, okay? With a power to oversee social media platforms. So what we have here is the government. Is now going to have a new agency, they're saying like the FTC. Then she said, a regulatory home where somebody like me. Could do a tour of duty after working at a place like this and and. Hagen said, right now, the only people in the world are trained to analyze these experiments. To understand what's happening inside of Facebook are people who grew up inside of Facebook. Or Pinterest, another social media company, basically people with her experience. I mean, I have to admire the chutzpah. I mean, she's basically proposing.

• 47:17David Sacks?

  That she be made Zuckerberg's boss, okay? That a new oversight board be created by the government, which she would be appointed to, which she presumably would run. And this board is now going to prescribe regulations and rules. For social networks in terms of how their news feed is going to run. That is what was proposed on Capitol Hill. That is what this operation is all about.

• 47:38Jason Calacanis?

  So it's about her getting a job and being lording over Facebook is your claim?

• 47:44David Sacks?

  No, I think I think I think the purpose of all this is to create new regulatory oversight of social networks. I simply would note. That she has proposed herself as somebody who would be on this board, which is pretty amazing. But what this is really about is that new oversight power.

• 47:59Jason Calacanis?

  And is that a Republican or a Democrat? Are you insinuating it's Democrats who want to regulate this? Or all politicians want to regulate this because they're scared of Facebook having too much power? Which I think we all agree Facebook has too much power. In in the public.

• 48:13David Sacks?

  You've had the leaders, you've had the leaders on the Senate Judiciary Committee now for months. Calling up Zuckerberg and Dorsey and other social media leaders and basically. Lecturing them on the need to censor more, to take down more material. That is their objective. This is not a conspiracy theory on my part. This is expressly what they've said. Okay? Now, until now.

• 48:33Jason Calacanis?

  Or right or both?

• 48:34David Sacks?

  We come to that. I think the Republicans are a little bit confused on this issue, but we get to that. So what you've heard until now is, uh, is that is, is a tax on the supply side of the platform. So what they've advocated is deplatforming people with heterodox, heterodox views, dissenting voices, and they have been deplatformed in large numbers. Obviously, it started even before Trump, but certainly the sitting president of the United States was deplatformed. YouTube just took down a million COVID videos because they disagree with the official position on COVID. So until now, the censorship has been on the supply side of the platform. What they're advocating for now is censorship on the demand side of the platform, which is, we're going to rewrite these newsfeed rules, okay? We're going to rewrite them because we can't give people what they want.

• 49:19David Sacks?

  The, the, they're making these algorithms sound like they're these incredibly evil sinister things. All the algorithms do at the end of the day is give the user more of what they're looking for, okay?

• 49:29Jason Calacanis?

  Well, hold on a second.

• 49:30David Sacks?

  That is not good enough for these politicians. They want to rewrite those rules.

• 49:33Jason Calacanis?

  That's not actually what they said.

• 49:34David Sacks?

  They want to rewrite these rules to determine what people see.

• 49:37Jason Calacanis?

  No, no. What they said about the algorithms was that the algorithm had a multiplier on it and that this multiplier of people resharing it, re-engaging the content would lead people, and this was statistically proven in Facebook's own research, that things that were either misinformation or that were supercharged, uh, you know, uh, polarizing issues, they would rise quicker, which then gave people not what they wanted in their feed. They gave people what would increase the length of a stay on Facebook or on YouTube or on Twitter for that matter. And they think the antidote for this is to maybe not allow things in the algorithm to go viral because what you're doing is saying things that are either misinformation or polarizing,

• 50:19Jason Calacanis?

  um, or will make things go to the top of the list and maybe we don't want that as a society.

• 50:24David Friedberg?

  Let, let me intervene with a, with a point of view on this because I think you're headed, you're headed down a path that, um...

• 50:31David Friedberg?

  To me, I don't think actually speaks to what's really going on. It sounds like there's some sinister, you know, architecture here that's driving this outcome.

• 50:42Jason Calacanis?

  I never said that.

• 50:43David Friedberg?

  Well, I mean, it's implied because it's like, oh, well, they're multiplying sinister stuff.

• 50:48Jason Calacanis?

  No, I'm saying they're just care about length of stay on the site. My belief is they just want it to grow. They care about revenue. Yes, that's exactly my point, Shama.

• 50:55David Friedberg?

  They care about what consumers want to consume and consumers demand what they want to consume. So think about media in the old days, right? We used to have books that an author would put out every year. And so the author would get feedback on the book and so it would be one year on that feedback cycle. Then magazines would come out, magazines would come out every month. And so every month, the magazine would get feedback on what sales were and they would make decisions, editorial decisions, and they would iterate. TV shows came out every week, newspapers came out every day, cable TV came out every hour and they could adjust their content accordingly. In the internet age, the media is getting a much more kind of instantaneous feedback cycle. And the, call it publisher or editor or curator of that media ultimately ends up putting in

• 51:37David Friedberg?

  front of the consumer more and more of what they want as a function of what they're choosing to watch. And what we're calling kind of these algorithms, quote unquote, are really just the same thing that editors and publishers and others have done in the past, which is looking at what the consumer votes by what they choose, making decisions to put more of the things that they want in front of them. The consumer consumes more of that. And here's what's messed up. We're getting a very ugly look in the mirror and what humanity and what citizens and what individuals actually want to consume and choose to consume and get turned on by. And that is what's making this all so ugly. And when we see that, we don't like to accept the fact that maybe that is just what humans are attracted to and what humans want to consume at scale. And we end up wanting to blame someone.

• 52:20David Friedberg?

  And I could argue, and I think others could argue, that these algorithms that are effectively just recursive optimization functions, they're recursively trying to figure out what do people want to consume and then giving them more of what they want.

• 52:30Jason Calacanis?

  You keep saying want.

• 52:31David Friedberg?

  Are simply solving for those very specific needs and use cases. And I don't think that those algorithms are necessary.

• 52:38Jason Calacanis?

  Go ahead, Jamar. Why is it not want? I'm interested in that unpacking it.

• 52:41Chamath Palihapitiya?

  No, the, I, everything Freebrooke says is absolutely right, but it's not the word want. It's not what they want. It's what they will react to the most. And sometimes what they react to the most.

• 52:52David Friedberg?

  Subconsciously want.

• 52:54Chamath Palihapitiya?

  I don't know, but my point is that there's, there's a, I guess, I don't, I don't use Facebook, but they went from thumbs up and thumbs down when I was there to like this nuance, like there's likes, there's tears, there's angry.

• 53:04Jason Calacanis?

  Reshares.

• 53:05David Friedberg?

  But there's also analytics data on engagement, right? Like on how long someone's watching a video or?

• 53:09Chamath Palihapitiya?

  What I saw in there was that there was an amplification of things that were more extreme emotional reactions.

• 53:15David Friedberg?

  Right.

• 53:16Chamath Palihapitiya?

  Now, and, and the point is that I think everything you said is absolutely right. The algorithms are amplifying. I think all I would say is I would restate what you're saying is these algorithms tend to amplify the things that are the most extreme and elicitor reaction.

• 53:30David Friedberg?

  Yeah.

• 53:30Chamath Palihapitiya?

  Those reactions aren't necessarily the things that you want. Those are the things that you will react to the most. And by the way.

• 53:36Jason Calacanis?

  What the algorithm wants to serve you.

• 53:38Chamath Palihapitiya?

  That's why you see that the top 10 things that are reshared the most often tends to be very extreme. Right?

• 53:44David Friedberg?

  Fundamental emotional responses are typically associated with things that I think we call hedonism. And the things that you can ignore your emotional responses and take another course of action, we typically call altruism or what have you. This is a, a kind of a common reason why people would want to watch a comedy or watch a horror film because there's some emotional response. It's not a universal response. And people aren't rushing to the theater to watch documentaries. They're not rushing to the movie theater to be like, oh, I want to be informed and educated on something that's factual and interesting. They want to go and have emotional experiences. And that's how humans are biologically wired. And the same is happening in these short forms of media, these little tweets or these posts on Facebook.

• 54:23Jason Calacanis?

  David, you do understand that they won't show murders and porn on Facebook. So they're making an editorial decision to say, hey, we're not going to include.

• 54:31David Sacks?

  They will every night on the local news. If it bleeds, it leads. That, how long has that been the motto in media? So I'm listening, I'm listening to Hoggan on 60 Minutes. I'm hearing her describe a corporate profit-making machine that tries to get more reach, more ratings by fueling pullers. Division and I'm thinking, is she talking about cable news? That's what she's talking about, isn't she? Is she talking about the New York Times? Is she talking about the traditional media? Because every single thing she said about how social media fuels polarization and division applies to the media. And yet those same voices in the traditional media are the first ones howling about Facebook and calling for its regulation. It is completely hypocritical because the real purpose here is not to reduce divisiveness

• 55:16David Sacks?

  or polarization in our society. The regulations on Facebook will not do that. It is to seize control and influence over the machinery of social networking. Why? Because the news feed now controls the flow of information in our society.

• 55:31Chamath Palihapitiya?

  Don't you think the damage has been done though? Meaning in the sense that if you cripple Facebook's product velocity and you shrink the surface area of the areas in which they can operate, isn't that more damaging than any regulation?

• 55:48David Friedberg?

  No, people will just stop using it and then they will find another place to get that same emotional behavior.

• 55:53David Sacks?

  I've already stopped using Facebook, okay? I don't find it compelling at all and I'm not really on Instagram either. I, I do find Twitter rather compelling and I'm probably more addicted to that than other things. Yeah, exactly.

• 56:04David Friedberg?

  Off the rails.

• 56:06David Sacks?

  Probably not very good for me, okay? But, but, but here's the thing, I think, I think all of us on this show right now, none of us find Facebook particularly addictive in our own behavior, okay? I think we understand in our own behavior that Facebook is sort of like a mildly diverting amusement that occasionally yields information, sometimes it's useful, okay? We understand that it's sort of like a news feed with a lot of noise, okay? In our own usage, but somehow we've bought into this larger narrative that in everybody else's usage, that somehow this is a brainwashing machine that is pumping people full of disinformation and warping their thinking. In other words, there's a sharp dichotomy between how we perceive our own usage and other people's usage.

• 56:48David Sacks?

  And what I would submit is our own usage is what we know and what we know to be true. And what we believe about other people's usage is simply a narrative that's been fed to us over and over again by the traditional media who hate Facebook because it's disintermediating them. That is what's really going on here.

• 57:05Chamath Palihapitiya?

  You may, you may be right. I, I'm saying something different, which is getting apart from all of that stuff. What's happening practically on the ground right now is that is a company who has to now slow way down. And what I'm saying is that's not dissimilar to what Microsoft had to do, which was there was this 10-year period at Microsoft where they really couldn't innovate. And that's really how the government solved the Microsoft problem.

• 57:29David Friedberg?

  Yeah, they made them less aggressive, right?

• 57:31Chamath Palihapitiya?

  They gummed up the internal machinery so that Microsoft couldn't really be there for the next few major... So, for example, we just spent 40 minutes talking about crypto. What do you think the chances are that Facebook now can land a really compelling crypto project?

• 57:47David Friedberg?

  Right. They got totally shut down with Libra, right? I mean, they went after it and the regulators stepped in.

• 57:52Jason Calacanis?

  It's too bold for them to launch that after what happened with their behavior in other arenas.

• 57:58David Sacks?

  I think that like Microsoft back in the late 90s, I think there are real and legitimate concerns about the power of these big tech companies, about how big and powerful they've become, about their ability to crush competitors. I think those are all legitimate. And in a weird way, if this government scrutiny slows those companies down, that's not an altogether bad thing. But I am concerned about, I'd say separately, just because these companies do deserve to be scrutinized more, I do think that we have to see that the people who are engaged in this really coordinated hit campaign against Facebook, they have another agenda, and that is to control the flow of information online. It is to control online discourse.

• 58:41David Sacks?

  It's already been happening over the past year with censorship on the supply side of the news feed, and now they're trying to control the demand side. I think we have to be extremely wary about this.

• 58:50Jason Calacanis?

  Well, David, you've been on the other side of this, because on previous podcasts, you've talked about Facebook being too influential, having too many users. And now you're saying, well, these tiny little news networks that get a couple of low millions.

• 59:04Chamath Palihapitiya?

  No, he has an issue, Jason, with the way in which they're going after Facebook.

• 59:08Jason Calacanis?

  Okay, I get that. He thinks it's a coordinated hit. Fine. But you also have had an issue with Facebook having too much power.

• 59:17Jason Calacanis?

  To take somebody off the platform or to promote certain ideas.

• 59:21David Sacks?

  Yeah.

• 59:21Jason Calacanis?

  So which is it? It seems like you're a little bit. Both can be true.

• 59:26David Sacks?

  No, it's perfectly, it's, it's, no, it's perfectly consistent. I've expressed concerns about the way in which Facebook is, is deplatforming people. It's summarily silencing them and ghosting them. It's engaged in censorship. I've expressed concern about that, but we should understand that the people on the Senate Judiciary Committee who hauled up, who had this hearing, who featured and spotlighted Hagen and turned her into this great hero. Their agenda is even more censorship. They, they are complaining about the fact that Facebook is not censoring enough. And that is what their real agenda is.

• 1:00:00Chamath Palihapitiya?

  I do think it should have been disclosed that Hagen does stand to gain financially from whatever happens.

• 1:00:06Jason Calacanis?

  You know, I don't know that that's been confirmed, that there is a whistleblower reward here. So we'll have to wait and see about that. I haven't heard.

• 1:00:13David Sacks?

  There's no reward until there's a fine, but Chamath is right that she qualifies, if she's a whistleblower, she qualifies for, what a 30% portion of, or some very large percentage of any fines.

• 1:00:23Jason Calacanis?

  What would the fine be here though? What would the fine be? How would that be framed Chamath?

• 1:00:27David Sacks?

  This whole thing is just getting started. There are going to be, there are going to be government actions and there will be settlements from those government actions. And the, and Facebook, as you all know, will pay any kind of fine to put this behind them.

• 1:00:38Chamath Palihapitiya?

  You're the one that said, Jason, they, they spent $5 billion just so that they wouldn't subpoena Zuck and Shiro, right? That's what you said last week.

• 1:00:45Jason Calacanis?

  We talked about that last week. Yeah. So I mean, I, I think there's a fine coming.

• 1:00:48Chamath Palihapitiya?

  But let's, let's be honest. I do not think Lena Khan or Gary Gensler or any of these other folks are going to be in the business of making a quick decision.

• 1:01:00Chamath Palihapitiya?

  Nor the DOJ, nor any of these other folks, they're going to want to really take their time to figure this out. But what I'm saying is it's not the ultimate result of it. Cause I, again, I go back to like, if you look at what happened in 2000 and Microsoft. The substance of what Microsoft had to agree to was ultimately not as bad as the way in which it was implemented, which is that, you know, my understanding was like Microsoft had to submit feature reviews to lawyers at the DOJ who would then approve, you know, updates and upgrades to their code base for things like Windows. That's what caused them to miss an entire wave of compute. And so this is the, this is the point, which is, I think, practically speaking, the beginning of what Microsoft went through, Facebook is

• 1:01:43Chamath Palihapitiya?

  going to have to navigate. And so the faster they can try to say, all right, folks, you're right, you caught us, let us tell us what to do, maybe actually the, the better path, because it allows them to get past it. Because the longer this, this, this period of like gray stretches out, I think is, is actually the worst outcome.

• 1:02:01Jason Calacanis?

  Well, let's go through what we each think would be a possible solution here to allowing free speech to occur on Facebook, but maybe not having the things that, you know, fake news, you know, misinformation, you know, maybe lowering down the rhetoric and the charged nature of the algorithm. Friedberg, do you have any common sense solution here that might address both sides of the issue, freedom of speech and maybe things being amplified to 100 million people that are fake and just simply not true?

• 1:02:34David Friedberg?

  We've talked a lot about this notion of like decentralized social networks. I mean, we haven't talked a lot. We've talked a little bit about it, but if you end up putting a regulatory hammer down on Facebook and Twitter and telling them what consumers, and remember, these guys aren't media creators. They're platforms effectively for search, discovery and access. So you, as an individual, can discover third-party content on their platform. If they start putting the regulatory hammer down on these quote unquote platforms, telling them what they can and cannot make available to their users, there will be another platform that will emerge. And that platform may end up being in this kind of decentralized model. And in that decentralized model, you're not going to have the same degree of regulatory

• 1:03:17David Friedberg?

  oversight. And that system will end up solving the same use case. consumers will get what they want, which is, you know, what Chamov called kind of this emotional response is eliciting this emotional reaction. They will consume it until they, you know, achieve one of their kind of seven deadly sins objective, which is what's driving the emotion, underscoring their decisions on what to watch, what to consume. And and there will be an alternative. So, you know, go ahead and play whack a mole. You'll play whack a mole for a few years, maybe a few decades. But at the end of the day, digital technology in a connected world will drive consumers to exactly where they will naturally find themselves, which is consuming ever more of the things that create this emotional response in them.

• 1:03:59David Friedberg?

  The consequences are unfortunate. Um, you know, I don't know what the right solution is, you know, we we've we've to some degree, put a regulatory hammer down on things like uh smoking and uh uh in some places, things like sugar, things that have kind of a, you know, uh an obvious effect on our physical uh health. Uh, these other things that we're seeing now are having an effect on our mental health. And I I think that there may be kind of an emerging regulatory uh regime around mental health standards and how much of things can be consumed. And I think what we're seeing is the leading indicator of this is what's gone on in China. Because China is the nation that I would say is probably at the forefront of research and understanding of what the consequences are

• 1:04:42David Friedberg?

  of consuming more of more of media and content that causes an emotional response to you. And what happens down the road, isolation, loneliness, suicide rates go up, unhappiness, et cetera. It certainly is the consequence, but it's not a function of any individual company's um misconveyance of content to consumers. It's just a function of where these systems end up going because of the way humans are biologically wired. Um, and so I guess my my first concern is maybe we end up in a decentralized system that ends up replacing all of these tools. And this just doesn't end, or you end up having, or you end up, and it could be worse, or you end up having these kind of regulatory regimes emerge.

• 1:05:18Chamath Palihapitiya?

  No, it'll be, that would be better. A decentralized solution is actually

• 1:05:22David Friedberg?

  No.

• 1:05:22Chamath Palihapitiya?

  better in one, no, it's better in one key way, which is that it's fundamentally harder to create the exact same network effect and density that you can have with one monolithic closed system. So you're much more likely to actually have a very fragmented ecosystem of hundreds of different solutions, depending on what of the sins you want to feed, or, you know, what of the feelings you want to feel at any one time.

• 1:05:46Jason Calacanis?

  I think it's a big assumption that it would be a fragmented network. If you did replicate Facebook on a decentralized platform, and then some piece of misinformation came out, and it trended all the way to number one, like, say, the January 6th insurrection.

• 1:05:59Chamath Palihapitiya?

  No, no, but there's not gonna be.

• 1:06:00Jason Calacanis?

  People brought guns to that.

• 1:06:00Chamath Palihapitiya?

  There's not one network.

• 1:06:02Jason Calacanis?

  I understand that, but if one, hold on, hold on, let me finish my point. If the, if one network became so large and there was nobody who could turn off something, what if people said, hey, there's a riot going on at the Capitol, and more people showed up with more guns, right? You have nobody to sit there and say, hey, don't go to the Capitol. Turn those trending posts off. Go ahead, Sax.

• 1:06:20David Sacks?

  Okay, so let's, let's talk about this problem of misinformation. Okay, I think there's an old Mark Twain quote saying that the, a lie can travel around the world faster than the truth can put on its shoes. Okay. There is a problem of falsehood spreading online. I agree with you there. The question is what you do about it. And the problem we have right now is that, is that truth is not by either beholder. There is no truth API. And so at the end of the day, it's the people in power who get to decide what is true and what is false, if you give them the power to censor misinformation. Example, we just saw, we talked about in this program, the Rolling Stone ivermectin hoax, provably false story. And yet Rachel Maddow still had it up on her post.

• 1:07:05David Sacks?

  She was not sanctioned by MSNBC. Twitter never told her to take it down, and she was not fact checked. However, the Hunter Biden laptop scandal, or story, which came out in the New York Post a couple of weeks before the election, turned out to be a provably true story, and yet it was taken down by Facebook and Twitter. At the end of the day, this term of misinformation is just another vector for partisan attack, and it will be used by whoever we give the power to, to decide what misinformation is. So what is the answer then to this point of falsehood spreading online? Well, at the end of the day, the answer to bad speech is more speech. You try to create a free marketplace of ideas to let. To let the good speech ultimately drive out the bad speech or prove that it's wrong.

• 1:07:49David Sacks?

  That's the best you can do. That's the best you can do in a free society.

• 1:07:52Jason Calacanis?

  Yes, but we've, this is the first time a free society has had social networks that can reach a billion people instantly in, you know, an hour. So I think there's one differentiator there that we must think of.

• 1:08:04David Sacks?

  If somebody defames you on a social network, they are absolutely liable. I mean, you can sue them. Okay. But I think, and you should. And I think we can.

• 1:08:11Jason Calacanis?

  We've talked about cancel culture. People are destroyed before they even get their day in court.

• 1:08:16David Sacks?

  I think, I think that's being destroyed for something different. I think if somebody.

• 1:08:19Jason Calacanis?

  But it's because it trends. If it didn't, if it couldn't trend to so many people, it wouldn't leave, lead to the cancellation and destruction of somebody's life. You've talked about that many times yourself.

• 1:08:29David Sacks?

  If, if somebody libels you, I think they should be, you should be able to sue them. And I think we could actually, we could have a libel regime more like the UK where it's easier to prove these cases in court and people are much more careful about defaming other people. I would be very much in favor of that. Okay. Because defamation is not free speech. But the question really is about, really, we're talking about non-defamatory statements that somebody in a position of power has cited is not true. Many of these statements are subjective. Dave Portnoy got labeled for his subjective opinion about AOC's dress. Why did that happen? And why is that kind of labeling only used to protect one side of the political spectrum? So, I mean, that, that's what's really going on here.

• 1:09:09Chamath Palihapitiya?

  Let's end with this. Has anybody watched Chappelle's The Closer? I did. Incredible. I, I watched it. Pretty incredible. I mean, fearless. Fearless is a word. I was really, um, I think that he slightly missed it because I think he could have really actually called out cancel culture and wokeism more. I think he kind of left it a little bit to me where I was like a little. I don't know, I just, I just didn't think they were as good as his other ones and I felt like he didn't really make the point he wanted to make.

• 1:09:42Jason Calacanis?

  It was a little convoluted.

• 1:09:43Chamath Palihapitiya?

  We need somebody who can actually stand up and, and, and actually, you know, be more satirical. And tell the story of why all this cancel culture and defamatory statements and judging people doesn't make sense, but then.

• 1:09:56Jason Calacanis?

  Did he seem?

• 1:09:57Chamath Palihapitiya?

  He didn't, he didn't get the job done, I felt like.

• 1:09:59Jason Calacanis?

  Well, did, let me ask you this about the performance. Did he seem qualitatively different than you in that? The other times he seemed very light on his feet, you know, having a good time, being a comedian, and this time it felt like he was personally hurt. Or he was.

• 1:10:12Chamath Palihapitiya?

  It wasn't comedy.

• 1:10:13Jason Calacanis?

  It was less, it felt less comedic. I agree. It felt like he had an agenda. He was hurt. He wanted to get some stuff off his chest and there were some jokes in between, which is very different. Like the percentage of jokes in this is like 20% and the like heavy.

• 1:10:27Chamath Palihapitiya?

  Max.

• 1:10:27Jason Calacanis?

  Max. And then the other ones were 80% jokes, 20% social commentary. This felt like. He, um, he was actually really hurt and like, I don't want to say bitter, but just fed up maybe frustrated. He, he had a chip. Which made it interesting to me.

• 1:10:43Chamath Palihapitiya?

  You know, in the, in the early 2000s, Chappelle for me was really important because he was an advocate for minorities. And I felt seen and protected by Chappelle. And, uh, and I thought that was really important. And then his, his comedy was just so sharp.

• 1:11:02Jason Calacanis?

  Oh, yeah.

• 1:11:03Chamath Palihapitiya?

  And I, I said, I just think that it was a little bit of an opportunity lost.

• 1:11:07Jason Calacanis?

  Yeah, I.

• 1:11:08Chamath Palihapitiya?

  I think if he had really actually taken the, you know, it, it to its conclusion, he would have actually.

• 1:11:15Chamath Palihapitiya?

  There was just too many uncomfortable moments in that thing.

• 1:11:17Jason Calacanis?

  It was super uncomfortable at times and.

• 1:11:22Jason Calacanis?

  I, you know, I really would like to see it again. Um, because, you know, if you just think about his career, you know, him talking about police brutality, him talking about race, you know, very fearless. You know, entertaining, but also informative way and, and just being a truth teller. Yeah, this was so uncomfortable at times. I agree with that. I need to watch it again and I need to let it sit because I was taking. It's on Netflix. It's the last in his contract. Yeah. I mean, this could be, I almost felt like he was trying to break Netflix because he does seem to have a. He does seem to have a streak in him where he's like, okay, I'm gonna, I'm walking away from Comedy Central and he does seem to burn the boats. This felt like he was burning the boats with Netflix to me. I don't know if you got that vibe where he was like, this is the last

• 1:12:06Jason Calacanis?

  one. I'm being canceled after this. Fuck y'all. I'm out. And he has that, I mean, he torched it, Sacks. I mean, you're gonna watch this thing.

• 1:12:13David Sacks?

  Well, now I'm definitely watching it. I have not seen it yet, but I'm definitely watching. I'll watch it tonight.

• 1:12:18Jason Calacanis?

  I give it a 50% chance that Netflix takes it down.

• 1:12:22David Sacks?

  Well, let's watch it quickly.

• 1:12:23Chamath Palihapitiya?

  Well, there were, there were, everybody was screaming for, for him to be deplatformed. Everybody was screaming.

• 1:12:28David Sacks?

  Well, then I, I like it even more. You know, one of the ironic things about these warning labels, I've noticed they've started to become a badge of honor where, you know, if, if, if the, if the hall monitors or Twitter are trying to label your tweet as, as, uh, you know, being incendiary, maybe it's just interesting, right?

• 1:12:44Jason Calacanis?

  Buy, buy, to buy signal.

• 1:12:46David Sacks?

  It's a, yeah, exactly. So, you know, um, I was listening to, uh, Antonio Garcia Martinez interview, uh, Camille on, um, on call in and they, they labeled that. I mean, just the post about they were gonna have a conversation.

• 1:13:01Jason Calacanis?

  You're saying the link to it was even flagged as like, oh my lord. I think there needs to be a Netflix for a comedy where it's only subscription and it's owned by the comedians. Like if Dave Chappelle were to create his own Netflix, I think it gets 10 million paid subscribers in the first two years.

• 1:13:18Chamath Palihapitiya?

  Overnight. No, overnight.

• 1:13:19Jason Calacanis?

  Overnight. Okay. So wait a second. How do we wet our beaks on this? If we go to Chappelle and we say, hey, listen, here's $25 million, we'll set up the tech team.

• 1:13:27Chamath Palihapitiya?

  I'll, I'll, I'll ask, I'll ask K heart. I'll ask him this weekend.

• 1:13:30Jason Calacanis?

  I think that, yeah, you get K heart, you get Chappelle, you get Seinfeld, you get, um, now do you get Louis, Louis CK in there? Or CK, what's his name?

• 1:13:39Chamath Palihapitiya?

  I never found that guy funny. That guy never did it for me.

• 1:13:42Jason Calacanis?

  Well, I mean, anyway.

• 1:13:43Chamath Palihapitiya?

  You know who's funny? You know who's funny? Have you, have you had this Asian guy Ronnie Chang? He's on, uh, there's a great Netflix special on him. He is fucking funny. And then Joe Coy, Joe Coy is very funny.

• 1:13:55Jason Calacanis?

  Yeah. I think Ronnie Chang taped his own special.

• 1:13:58Chamath Palihapitiya?

  Hassan Minhaj, that guy's very funny.

• 1:13:59Jason Calacanis?

  He's great.

• 1:14:00Chamath Palihapitiya?

  He's, he's legit.

• 1:14:01Jason Calacanis?

  But I mean, I, this would be a great way for them to just control their destiny and not have to worry about cancel culture. Cause I think a lot of the folks who are on.

• 1:14:10Chamath Palihapitiya?

  Well, they are probably the, the last line of people that actually.

• 1:14:15Chamath Palihapitiya?

  Will be the defenders of free speech.

• 1:14:16Jason Calacanis?

  Yeah, it's pretty scary. As much as I think Facebook should be more thoughtful about their algorithm, you know, back to, you know, circling Netflix and censorship, back to the Facebook issues. I just think Facebook should say, hey, listen, we've throttled the algorithm so that any one piece of content can only reach this many people over this period of time. And yeah, sure, that's going to lower our time on site or whatever. But we want things to have a little bit of time to spread and get fact checked. Does anybody think that that's a good idea to say, just, you know, if you're trying to cancel somebody, instead of it going to number one on trending topics before the person has a trial, that the algorithm would just take a little bit of time to propagate content?

• 1:14:57Chamath Palihapitiya?

  Here's what I can tell you conclusively. If Facebook wanted to solve these issues in the ways that the government expects in their head for these problems to be solved, Facebook market cap would be $250 billion and they'd have a million people working there at the company. So this is not an issue of whether it's possible. The question is, is it right? And does it actually get at the solution? Or does it just, as Friedberg said, create whack a mole someplace else? And so, you know, I don't know what obliterating three quarters of a trillion dollars of market cap will do, but I suspect that the government is going to want to find out.

• 1:15:35Jason Calacanis?

  Sax, do you think that throttling the velocity of the algorithm so that news doesn't spread as fast and violently, or which could be misinformation, could be valid information? Do you think that's a possible solution?

• 1:15:48David Sacks?

  Look, I think that at the end of the day, with

• 1:15:50Jason Calacanis?

  Or disclosing the algorithm, maybe?

• 1:15:52David Sacks?

  With both Facebook and Twitter, you only see stuff from people who you're following or you're friends with. It's actually

• 1:15:59Jason Calacanis?

  Not true.

• 1:16:00David Sacks?

  What do you mean?

• 1:16:01Jason Calacanis?

  If things, they will insert stuff into your Twitter algorithm now that's adjacent to you and Facebook will do that as well.

• 1:16:07David Sacks?

  Well, maybe, maybe if people respond to someone who you're following, but I've never seen anything in my Twitter feed other than an ad that's not from somebody I follow. So

• 1:16:15Jason Calacanis?

  You never went to trending topics?

• 1:16:17David Sacks?

  No, I mean, not my feed.

• 1:16:18Jason Calacanis?

  The explore feed? Oh, okay. No, but you the explore feeds right there and they are surfacing things in your feed now that are not people you follow. But anyway.

• 1:16:25David Sacks?

  What what they're really doing, okay, is there's a universe of people who you're following or you're friends with, and you could just see all of that content in a reverse chronological feed, but that would be too much. It'd be overwhelming.

• 1:16:37Jason Calacanis?

  Originally worked.

• 1:16:37David Sacks?

  Yeah, exactly. And I get it. And that was fine. I didn't. I liked it. Okay. But as you're following thousands of people now, there's too much content. And so they will simply surface the tweets that you're most likely to want to interact with. I don't believe, by the way, that those tweets are necessarily the ones that make you angry. I think I think for some people it is clearly, but it's not certainly not the case in my case. What I would say is it's more refined than that. It's the tweets that you think are interesting. It's the tweets that perhaps express a sense of outrage that agrees with your sense of outrage. It's a little different than anger. But it's it's basically the subset of content that you through your reveal preferences have have shown Facebook or Twitter that

• 1:17:21David Sacks?

  you that you care about the most. And that's basically what they're doing. They're giving the consumer more of what they want. And I think that we've blown this thing so far out of proportion. I mean, yeah, if there's an analogy that it's addictive, but I think that it's been blown so far out of proportion, we've exaggerated the fear beyond any reasonable recognition.

• 1:17:42Jason Calacanis?

  By the way, I think the I think the reason that that tweet was flagged, I'm guessing, is that in the tweet, Kamala says he's going to talk about critical race theory, and that may be why.

• 1:17:53Speaker 03

  Or it could be because it was linking to the.

• 1:17:56Jason Calacanis?

  Well, Twitter just said this conversations like this can be intense. That's all.

• 1:17:59David Sacks?

  I think because he says the gloves are coming off. It looks like two people fighting or whatever. I just think it's sort of ridiculous. You know, like, this is where like the warning label stuff.

• 1:18:08Jason Calacanis?

  Patriarchal. Yes, it's a little condescending.

• 1:18:09David Sacks?

  Patronizing.

• 1:18:10Jason Calacanis?

  This content.

• 1:18:11David Sacks?

  Patronizing, I think, is the word.

• 1:18:12Jason Calacanis?

  Patronizing, yeah.

• 1:18:12David Sacks?

  Yeah, exactly.

• 1:18:13Jason Calacanis?

  I'm circling. I got the thesaurus up here. I'm not dumb. I got a thesaurus here.

• 1:18:18David Sacks?

  I'm a smart.

• 1:18:19Jason Calacanis?

  It's very, it's a very peletronic.

• 1:18:22Speaker 03

  You should have looked out for me. You was my brother.

• 1:18:25Jason Calacanis?

  I find it a little like.

• 1:18:26Speaker 03

  I could have been a contender instead of what I am.

• 1:18:29David Sacks?

  I'm smart, not like they say. Not dumb. Smart.

• 1:18:35Chamath Palihapitiya?

  How'd you get your fucking Shitbox? Oh shit. Oh, boys, I love you. Happy 50th episode.

• 1:18:42Jason Calacanis?

  And what's going on with you, Friedberg and Sax, that you won't make the journey down to the poker game? Is this like some sort of David protest here? Sax, why don't you host in the city? Sax, why don't you host in the city?

• 1:18:55David Sacks?

  I will come back. I will. I will start playing again. If we get, if we get the game going at like a regular time.

• 1:19:00Jason Calacanis?

  What the fuck is on your schedule?

• 1:19:02Chamath Palihapitiya?

  What are you talking about?

• 1:19:03Jason Calacanis?

  Nothing going on.

• 1:19:04David Sacks?

  Okay.

• 1:19:04Jason Calacanis?

  Yeah, you have nothing going on, Sax.

• 1:19:06David Sacks?

  All right, I'll start, you know, I'll start making, I'll start coming down.

• 1:19:09Jason Calacanis?

  Stop evading your family, stay in the city, come

• 1:19:14Jason Calacanis?

  see your fucking friends, play some cards, lose some money. We're not playing PLO. Yeah, no PLO. I mean, we did at the end just to get Sky's money, but just to keep Sky there for another 30 minutes since he was flushing cash.

• 1:19:26Chamath Palihapitiya?

  Beat him up real good, Saxi Poo, we beat him up real good.

• 1:19:28Jason Calacanis?

  It was Skyfall. When you crumble. Actually, the new, I'm really excited to see the new Daniel Craig 007. I can't believe that.

• 1:19:36Chamath Palihapitiya?

  Can you still rent a Midtown movie theater for like 50 bucks?

• 1:19:39Jason Calacanis?

  Yeah, 300 bucks. So, yeah. It used to be not, it was 99 during the pandemic. It was awesome. It's 300 now. Now it's 300, yeah. I haven't done it the last two times I went with the girls because it was first run movies and the theaters were pretty empty.

• 1:19:51Chamath Palihapitiya?

  But it's like 300. If you get like 10 of your friends to come, it's like basically the same price as a ticket.

• 1:19:55Jason Calacanis?

  Five of your friends to come, it's worth it. I mean, that's 60 bucks each and, yeah, I mean, it's Or we just go to Sax's theater, he's got. Sax's theater is better because you have a chef there who will make your food. But yeah, and for those of you asking about the All In Summit, Sax and I are leading the charge for a February or April. We got a couple of locations. Thank you to everybody who sent us location ideas. Two days, 250 people, 200 paid tickets, 50 by scholarship. And you can go to the All In website. When we have information, we will post it there, but we're just in the planning phase right now. But we're thinking two days, right, boys? Yeah, two days for All In Summit and then five hours of content, something like that a day. We each interview people. Yeah. And then we're done. Okay.

• 1:20:38Jason Calacanis?

  And Miami is the host city and we'll draw a high card for who picks the next city. Chamath, you said you're picking something in Italy. I'm going to probably pick my home.

• 1:20:45Chamath Palihapitiya?

  Rome or Venice.

• 1:20:46Jason Calacanis?

  Rome or Venice. I'm going to probably pick New York for mine or Austin. And then Friedberg, where would you pick? Napa or something? Marin County. Oh, wow. What, where everybody wants to go. Great. Go to anti-vaxxertown.

• 1:20:58Chamath Palihapitiya?

  Fuck, fuck you, Friedberg.

• 1:20:59Jason Calacanis?

  Marin County. Wow, what a destination. Freebrooke, where would you pick?

• 1:21:04David Friedberg?

  It's a good question. Um, so who are we doing Miami first? Is that right?

• 1:21:09Jason Calacanis?

  Miami's first, then we draw a high card for the next city. Who gets to pick next city? Each bestie picks for four years. Each buddy picks one. If we go twice a year, even better.

• 1:21:17David Friedberg?

  I mean, I'd probably split it between London and

• 1:21:21Jason Calacanis?

  Ooh.

• 1:21:22David Friedberg?

  Ooh. London and somewhere in Hawaii.

• 1:21:25Jason Calacanis?

  Ooh.

• 1:21:26David Friedberg?

  Hawaii movies, Hawaii, yeah.

• 1:21:29Jason Calacanis?

  Hawaii's an inspired choice. Can you imagine 250 degenerate?

• 1:21:33Chamath Palihapitiya?

  London's great.

• 1:21:34Jason Calacanis?

  Iconoclastic, but London would be, we would take over. We'd take over. Miami is freaking out.

• 1:21:39Chamath Palihapitiya?

  Run over Annabelle's, boys. I bring you all to Annabelle. That's incredible. That that Members Club is, I think, the most over the top thing I've ever seen.

• 1:21:48David Friedberg?

  You're you're referencing something that no one knows what you're talking about.

• 1:21:50Jason Calacanis?

  Nobody knows what you're talking about. Is that a nightclub?

• 1:21:52Chamath Palihapitiya?

  Yes, a nightclub. Well, no, it's a private.

• 1:21:54David Friedberg?

  Annabelle's. It's a lady I know. She's down on the in the West End.

• 1:21:58Chamath Palihapitiya?

  No, you have to have Members Clubs in London because you can't drink alcohol after like 9pm unless it's a private club.

• 1:22:04Jason Calacanis?

  Yeah. All right, we'll see you all next time on the All In Podcast. Here's to another 50, everybody. First 50 done. Love you, guys. Let's get another 50 in the books.

• 1:22:45Chamath Palihapitiya?

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