E125: SpaceX launch, Fox News settlement, "Zombie-corn" exodus to AI, late-stage implosion

(0:00) Antonio Gracias and Gavin Baker join to discuss SpaceX's Starship launch (28:58) Fox News settles with Dominion Voting Systems, will pay $787M (40:38) AI update: Reddit to start charging for training data, how the next startup bubble will materialize, navigating the AI "dust storm" (53:49) Why AI is challenging/exciting to invest in right now, late-stage implosion, pay-to-play rounds (1:21:26) Is crypto dead in America? Plus DeSantis vs Trump polling update and wrap 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://twitter.com/GavinSBaker/status/1649107858267439108 https://www.bbc.com/news/science-environment-65294084 https://twitter.com/thePrimalSpace/status/1649051677377560578 https://www.wsj.com/articles/spacex-starship-elon-musk-second-launch-attempt-bf932aaf https://twitter.com/elonmusk/status/1533408313894912001 https://www.reuters.com/technology/fcc-votes-approve-spacex-satellite-plan-official-2021-04-27 https://www.axios.com/2023/04/18/fox-news-settles-dominion-lawsuit https://investor.foxcorporation.com/static-files/3b2bdb74-8ebe-4173-9f0f-ac18831ff094 https://www.theatlantic.com/business/archive/2015/03/finland-home-of-the-103000-speeding-ticket/387484 https://twitter.com/KanekoaTheGreat/status/1648462770936115202 https://www.nytimes.com/2023/04/18/technology/reddit-ai-openai-google.html https://www.cnbc.com/2023/04/20/alphabet-merges-ai-focused-groups-deepmind-and-google-research.html https://twitter.com/chamath/status/1647010187377774596 https://en.wikipedia.org/wiki/Dal%C3%ADland- https://www.nytimes.com/2023/04/20/business/buzzfeed-news-shut-down.html https://www.vox.com/technology/2023/4/18/23688627/meta-layoffs-mark-zuckerberg-facebook-instagram-whatsapp https://news.crunchbase.com/venture/series-c-funding-decline-q1-2023 https://www.theinformation.com/articles/tiger-global-managements-12-7-billion-venture-fund-records-20-loss https://en.wikipedia.org/wiki/Greater_fool_theory https://www.wired.com/story/stack-overflow-will-charge-ai-giants-for-training-data https://www.coindesk.com/business/2023/04/18/coinbase-could-move-away-from-us-if-no-regulatory-clarity-ceo-brian-armstrong https://news.yahoo.com/poll-trumps-big-post-indictment-bounce-is-fading-fast-183753992.html https://www.washingtonpost.com/politics/2023/04/20/desantis-trump-new-hampshire-poll

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

• 0:00Jason Calacanis?

  Hey everybody, welcome to episode 125 of the All In Podcast. On a historic day, we're taping 420. Really excited that SpaceX was able to launch Starship and it made it off the launchpad and incredibly successful today, day today. We have, of course, with us the Rain Man David Sacks, the Sultan of Science David Friedberg, and of course, the dictator of Chamath Palihapitiya. But two special guests are here. Special guests. Gavin Baker from Atreides. How do you pronounce it? Atreides. Atreides. House Atreides. House Atreides, if you know Dune. And then SpaceX board member, Antonio Gracias, one of

• 0:41Jason Calacanis?

  the first investors in SpaceX. Antonio, a big day for you. Maybe you could just tell the audience what happened today, why that is so important in the history of this company.

• 0:54Antonio Gracias?

  Well, first I want to thank you guys for letting me come on and have a little chat with you about this.

• 0:59Antonio Gracias?

  Today was extraordinarily important for SpaceX, I think for America and for humanity. And the Starship is the realization of the vision Elon had 20 years ago, 25 years ago, even as a child, really, to go to Mars. And the engineers here at SpaceX and the entire team working extremely hard, really just to get this vehicle off the pad, as Elon has said, right? This is a brand new vehicle. Everything about it is new. So the engines, the material science, the structure, the design, all of it new. And the most important thing here was to get off the pad so we could collect data. And this technology platform is the platform that'll

• 1:40Antonio Gracias?

  allow us to go to Mars. So from a non-engineer's standpoint, why this is important is that what we've proven with this flight, we got past a point called Max Q, which is the point at which the vehicle takes maximum stress. That's how I think about it. I'm sure engineers will tell you a lot more description to it, or David Friedberg will give you a better description to it. But it's the most amount of stress in the vehicle, which means this vehicle will get to orbit. And this is the vehicle that's going to take us to Mars. So today is the day that all of the hardworking people at SpaceX accomplished a goal of making the human race spacefaring. When we look back in history, I believe this will be the day we mark the technological development that we broke through and built a vehicle that could actually go to Mars.

• 2:24Jason Calacanis?

  Now, when we look at it, obviously, it didn't make it to orbit. Maybe you can give some context into what is the typical life cycle of the new rocket ship coming out? The Falcon, the original one, has done, I think, 224 missions, 222 of them successful. I think 160 or so actually landed themselves.

• 2:45Antonio Gracias?

  Yes.

• 2:46Jason Calacanis?

  And so you had two or three mulligans, I think, in the development of that, maybe two, actually. So what can we expect here? When are they going to stack and rack and launch the next one? Antonio, what's the timeline here to getting to orbit? What would we expect versus some of the other projects that we've seen, like the Russian rockets?

• 3:04Antonio Gracias?

  So, look, this is a brand-new vehicle. And whenever we develop a brand-new vehicle, it takes a long time of development. You know, my understanding of this is, again, a layman and sort of as a board member, not an executive here, is that it'll take at least, call it, two or three months, really get the pad rebuilt and get another vehicle back on for testing, maybe longer. But it's really important to note here that we've gotten sort of used to the idea that SpaceX launches rockets and all these rockets come back and all those vehicles are stable because the Falcon 9 and 9 Heavy are so stable and they're so well-engineered and they're amazing vehicles, the most valuable vehicles on Earth in human history. This is a brand-new vehicle. This was a huge win. I mean, it was an enormous win for the company, an enormous win for the country, just getting it off the pad and collecting the data.

• 3:49Antonio Gracias?

  And now we know it works. We just have to get it stable now and get it up to orbit. So it's really, it's a hard problem, but it's a solvable problem from here. And the, we learned here is that this vehicle does work.

• 4:03David Friedberg?

  Amazing. Can you guys talk about like the impact of this vehicle, cost to launch, payload, like the big metrics that are, that kind of help realize that outcome? Gavin, I think I saw you did a bunch of really good tweets on this. You shared some of the metrics that I, that I thought were really succinct and really helpful.

• 4:20Gavin Baker?

  Yeah, sure. So when this is, I think it's a long road to full reusability. Um, you know, the first step will be Mechazilla catching the booster. Doesn't, doesn't have a legs like the Falcon 9. And then the second step will be landing the starship, which is really hard. But once you do that, they should be able to send over a hundred metric tons to orbit at a variable cost of under $2 million per public data. This, these are public statements.

• 4:52Antonio Gracias?

  I would never confirm or deny those statements. This is Gavin's, this is Gavin's math off the back of the envelope.

• 4:57David Friedberg?

  $2 million is the cost to get 100 tons into orbit? That's, that's the, the metric?

• 5:02Antonio Gracias?

  Variable cost.

• 5:03David Friedberg?

  Variable cost.

• 5:04Antonio Gracias?

  So, but I, I think the point Gavin's making, if, if I might just add, is that it is a step function change. It's not like a small change, it's an enormous change.

• 5:12David Friedberg?

  Right. Can you compare that to the numbers before for folks to understand?

• 5:16Gavin Baker?

  The Falcon 9 mass to useful orbit is 17 metric tons. And the variable cost that, you know, I, I have seen Elon tweet about is somewhere around $15 million. So you are lifting more than five times the mass to orbit. And based on other statements, that 100 metric tons is a very conservative estimate. And you're doing it, I'd call it 10 to 15% of the cost. So this is a, you know, we can all do the math, but we can envelope it, um, you know, roughly a 50x.

• 5:58Antonio Gracias?

  Huge.

• 5:59Gavin Baker?

  Change. And this, you know, massively changes unit economics for Starlink for sending anything into orbit.

• 6:06Gavin Baker?

  And as Antonio said, it's it's great for SpaceX, it's great for America, and it's great for uh for everyone.

• 6:12Antonio Gracias?

  It's great for humanity, and it's great for humanity.

• 6:14David Friedberg?

  Can you explain how that then translates into going to Mars? So now we can get 100 tons into orbit for $2 million. What happens next in terms of like how that payload capacity and low cost enables, you know, full transport to Mars? And, you know, I know that the timelines are tough, but it would be super helpful to just to translate the the orbit concept into the let's go to Mars concept.

• 6:35Antonio Gracias?

  It's important to know that like the size of this thing, to give a sense of scale, is the interior space of it is the size of the International Space Station. So it's a huge amount of tonnage. Just think about all that's going to take to get to Mars, right? You've got to you'd have to lift a payload into orbit, you'd have to, you know, create a base either on the moon or or or in it's orbiting the Earth to actually refill ships and send them out into space. And this same design will scale up to become the Mars cargo transporter, very similar design. That's why it's important. And look, the timeline on that, I don't know. I'm hoping that it will be, um, while I'm still able to go, that would be great, physically able to go. But that's really why it's important. Think of this as a small version of the same vehicle we will actually use to go to Mars.

• 7:18Antonio Gracias?

  And then all the stuff you have to transport to orbit becomes more more economic because, as Gavin just said, Ted, you know, 50x kind of reduction in cost.

• 7:26David Friedberg?

  Can I ask you another question? Sorry, I don't mean to monopolize the questions, but these are things that I think are like super important questions, but that that a lot of people often ask, or I hear them asking, but what happens with the space industry in the nearer term? So there's this great long-term goal, get to Mars, that's a that's a big project, there'll certainly be funding, I'm sure, to run that project. But what other economies now emerge as this this cost down of 50x happens? And what else do you think happens besides, you know, communications and Starlink, obviously there's that's already a pretty scaled business? What other markets can develop here in the near term? What other economies do you see happening?

• 8:05David Friedberg?

  As a result of this cost.

• 8:06Antonio Gracias?

  Yeah, I mean, Gavin could jump in here, too, but the reality is, once you can take that much mass to orbit, you can move anything around the planet very quickly. You can kind of go up, but the Earth's spin below you can come down. So transportation generally changes. You know, if you want to fly to Tokyo from New York City, it goes from being, you know, a day trip to a matter of hours. It's extraordinary.

• 8:25David Friedberg?

  Or a container ship in a couple hours.

• 8:27Antonio Gracias?

  Yeah, everything that's rapid transport around the Earth, you're going to be packaged around there, everything gets faster. Gavin?

• 8:32Gavin Baker?

  Yeah, there will be no more transpacific or transatlantic cargo flights. I think in five, six, seven, eight, 10 years, you're going to need a big starship fleet to accomplish that. But I think the transatlantic and transpacific aerospace cargo routes go away.

• 8:51Antonio Gracias?

  So transportation logistics, I think, is a fundamental change. Human transport, fundamental change. And then there's all the knock-on effects of building this kind of technology. Look, the space program, the American space program that took us to the moon, created the cell phones we use, right? I mean, there's so much, this chip designs, all the technology that came off of that, the same kind of effects we believe will happen here. So it's hard to predict, but it will be a lot of great stuff.

• 9:14Jason Calacanis?

  Well, and that's kind of the point. When you can get payload up there, now entrepreneurs can think of a million different crazy ideas and affordably put something up there, whether they want to mine an asteroid, or they have a science project. Now, a thousand flowers, a million flowers can bloom, and entrepreneurs can start thinking about it. And that's already happened to a certain extent with Falcon, that people are able to come up with great ideas. Well, I have to say.

• 9:39Antonio Gracias?

  And the inspiration it provides.

• 9:40Jason Calacanis?

  It does, yeah.

• 9:41Antonio Gracias?

  It's amazing to be here and feel the inspiration and the just the joy.

• 9:45Jason Calacanis?

  I think that's what I was going to ask you about, if, you know, as we wrap here with you, too. If you could, if you could take people inside Mission Control, which we're privileged enough to be in, the sense of history and the feeling in that room, if you could describe it for the audience, what those engineers were feeling, and what you, in fact, felt at that moment. Antonio, and then Gavin.

• 10:10Antonio Gracias?

  So I would start by juxtaposing with Monday. So we were here Monday.

• 10:14Jason Calacanis?

  We were here Monday.

• 10:15Antonio Gracias?

  Monday. And Monday, I think there was a real sense of concern. You know, the the countdown stopped for around 10 minutes, the vehicle, we had a valve failure and the valve got stuck open, basically. And we had to stop and and kind of regroup. And by the way, from my perspective, that's like a solid success because the vehicle did not get destroyed in the pad.

• 10:35Jason Calacanis?

  Yeah.

• 10:35Antonio Gracias?

  Which is like the number one thing to have happen here. So that's success. The second, and so that was kind of Monday. And I think Monday was, um, yeah, caution and intensity.

• 10:44Jason Calacanis?

  It was a very intense feeling.

• 10:45Antonio Gracias?

  Very intense feeling.

• 10:46Jason Calacanis?

  Can this, will this, will this ever happen?

• 10:48Antonio Gracias?

  Yeah.

• 10:48Jason Calacanis?

  When will it happen?

• 10:50Antonio Gracias?

  Yeah. Today, what I felt in that room was a sense of, um, there was a high sense of intensity, a high sense of focus, and also a sense of

• 11:03Antonio Gracias?

  people were excited. There was excitement about it. It felt different today. It felt more electric today. They were super focused, but you could feel the excitement in the room. They believed it was going to happen. They thought it was highly probable and that it was going to work. And when it did work, I would say it was a sense of elation and joy. And just, you know, this is, this is 20 plus years of work. And, you know, Elon was here in the room with the engineers and it just seeing him light up, seeing the joy that he felt, seeing the joy the engineers felt together, for me. And having been a board member here at Invest for a long time and sort of been along this company and seen it develop, it it brought a real sense of of hope.

• 11:44Jason Calacanis?

  Yeah.

• 11:45Antonio Gracias?

  For what's going to happen to this country and what's happening to humanity. And and it's a joy to my heart.

• 11:50Jason Calacanis?

  Yeah. Gavin, do you have any emotional feelings there when you watch it? You want to add?

• 11:54Gavin Baker?

  Yeah, well, I think it's also just what I would, what always strikes me when I'm here is this is a sandy spit of land. There was no power, no electricity, no potable water, you know, no sewage, no utilities, nothing. And out of this, you know, sandy spit of desert, you know, on the Gulf of Mexico, a extremely talented group of engineers, the last five years, have lived in, you know, these, these air streams.

• 12:26Gavin Baker?

  You know, a long way from a major city. And it is, it is just an amazing place to visit. And you know, the sense of commitment. And when you talk to anyone at SpaceX, anyone here at Starbase, you know, what are you trying to accomplish? Make humanity a multi-planetary species. Get to Mars. So the experience of visiting Starbase is amazing. Second, I would just say launches are very visceral. It's shocking if you have not experienced one.

• 12:56Jason Calacanis?

  The ground shaking.

• 12:57Antonio Gracias?

  Yeah, feeling your chest, you feel it in your chest.

• 12:59Jason Calacanis?

  Feel the, yeah, you, you feel your body shaking like an earthquake.

• 13:03Antonio Gracias?

  Yeah.

• 13:04Jason Calacanis?

  But it doesn't stop.

• 13:05Gavin Baker?

  And it's incredibly dramatic. You know, the rocket, it's going so slow at first and then it accelerates. And then you hear this enormous crackling noise that's, you know, louder than any concert, louder than any, you know, sports stadium. Then a blast of hot air hits you, you feel it. And I would, I would say a lot of people at launches cry. It's a very emotional experience, often for people who are, who are not emotional.

• 13:31Jason Calacanis?

  It's hard not to get emotional, yeah.

• 13:33Gavin Baker?

  I think just that hu- human beings can accomplish something like this is amazing. And then what I would just say is, you know, there was, the rocket flew for four minutes. It went through Max Q, it went to 39 kilometers. The Soviet N1, uh, which was comparable rocket, only reached 12 kilometers. Like the team was ecstatic.

• 13:56Jason Calacanis?

  Yeah. The joy on their faces.

• 13:58Gavin Baker?

  Happy, cheering.

• 14:00Jason Calacanis?

  You've never seen anything like it.

• 14:01Gavin Baker?

  Yeah, it was awesome. It was very inspirational and I felt very, uh, very grateful to be there.

• 14:07Jason Calacanis?

  Yeah, incredible.

• 14:09Gavin Baker?

  Yeah.

• 14:09Antonio Gracias?

  Can I give one thought of what I'm feeling right now?

• 14:11Jason Calacanis?

  Yeah.

• 14:11Antonio Gracias?

  The after effect?

• 14:12Jason Calacanis?

  The after effect, afterglow.

• 14:13Antonio Gracias?

  It's just, it extorts a sense of gratitude. I mean, there has been so much sacrifice here and we have witnessed it over 20 years from from Elon, of course, and the amount of just, you know, unbelievable work done from him and the entire team at SpaceX, his engineers, everyone that works here.

• 14:29David Sacks?

  Yeah.

• 14:29Antonio Gracias?

  It's been extraordinary and it just really, I'm just deeply grateful.

• 14:33David Sacks?

  Incredible.

• 14:33Antonio Gracias?

  And grateful to you all for having us on. Thank you.

• 14:35David Sacks?

  Ah, incredible. It's great to hear that perspective because you would not have gotten it from off the Twitter feed, you know, from the mainstream media.

• 14:44Antonio Gracias?

  David, if you'd come here with us, you could have gotten your stuff.

• 14:46David Sacks?

  Yeah, David. You were invited.

• 14:48Antonio Gracias?

  You were invited. You almost, we almost shanghaied you from Miami.

• 14:52David Sacks?

  I appreciate the invite. I'm sorry.

• 14:53Antonio Gracias?

  There's a new term called starship as opposed to shanghaide. We're gonna shanghaide you from Miami.

• 14:56David Sacks?

  We're gonna starship you.

• 14:57Antonio Gracias?

  We're gonna starship you next time.

• 14:58David Sacks?

  Yeah, I'm bummed I couldn't be there, but I'm excited to see how excited you guys are. And just the point I was making is that when I was reading the mainstream media coverage of this, it was almost like ghoulish. It was like a type of glee. It was almost like an excitement that the rocket blew up, but they didn't, they didn't really mention any of the things you're mentioning. I mean, from the point of view of the people who are there, it was a triumph and it was exciting because of the data that was collected and the fact that this rocket even got off the earth and achieved its goal.

• 15:29Antonio Gracias?

  This is a triumph.

• 15:29David Sacks?

  It flew up for four minutes, but the media never really conveyed that. So thank you for giving us perspective that you just would not have gotten today from the New York Times or other mainstream media.

• 15:39Gavin Baker?

  And just to add to that, just a little bit of context, you know, this is an iterative design process with rapid improvement. This starship had 31 engines that were made over the course of one year, had different tolerances, behaved unpredictably.

• 15:55Gavin Baker?

  You know, this was far from the best starship. The one that's gonna launch in three months or two months or four months or five months or whenever it is, they've already made over a thousand discrete improvements to it. And that was before they got all the data for today. And then there's a starship after that and after that.

• 16:13Gavin Baker?

  So I think that's important.

• 16:15Jason Calacanis?

  It really is. The, what the mainstream media just fail to understand is the process under which a new rocket platform is deployed and how revolutionary this is. They, they, they are iterating at a speed here that I don't think people can comprehend.

• 16:31Antonio Gracias?

  I mean, on this note, it's important.

• 16:33Chamath Palihapitiya?

  They don't, they don't care. They don't care. And it was a way to paint somebody who they dislike and they are threatened by in a negative light. The, the front page of the Wall Street Journal says SpaceX's starship explodes shortly after launching uncrewed test flight. If you take Antonio Gracias's explanation, which was articulate and transparent and fair, and this headline, you could not be more further apart on the spectrum of truth. Antonio just said that this is a day, this is for the audience of which there are millions of people now. Antonio said, this is the day that you look back on when we are multi-planetary as this Cambrian moment, if you will, this incredible point of innovation and human ingenuity and

• 17:18Chamath Palihapitiya?

  teamwork and sacrifice. You know, Gavin said it as well, just giving up five years of your life to move in the middle of nowhere, live in an airstream trailer. And then the Wall Street Journal was basically perspective.

• 17:29Jason Calacanis?

  Rocket goes boom.

• 17:31Chamath Palihapitiya?

  I mean.

• 17:32Antonio Gracias?

  It was just fireworks. It was just a fireworks display, right? I sent a note to my own team today. I just said, I said, look, ignore, please ignore the news media.

• 17:41Jason Calacanis?

  Yeah.

• 17:42Antonio Gracias?

  It's total BS. This is a huge success.

• 17:44Jason Calacanis?

  Fake news.

• 17:45Antonio Gracias?

  It's a huge success and, you know, we should just step back for a second and enjoy the success because part of the problem with the news media is this is a moment that should galvanize our country. I mean, SpaceX is-

• 17:55Jason Calacanis?

  This is about America.

• 17:56Antonio Gracias?

  SpaceX is an American company.

• 17:58Jason Calacanis?

  This is about America.

• 17:59Chamath Palihapitiya?

  I think they can't, I think they can't see that it galvanizes, potentially galvanizes support for a human being that they feel deeply threatened by. And that's what it all comes down to ultimately. And that's what you see in the headlines. That's why what's so interesting about this is that the behavior of the mainstream media to now paint this as something unsuccessful or a joke or rocket goes boom or fireworks, when you look back on something as meaningful as this, it'll just make them even less credible. That's what, that's unfortunately what they're doing to themselves is shooting themselves in the foot.

• 18:30Jason Calacanis?

  It's pretty sad. Yeah. And this wasn't just Wall Street Journal. This is CNN, New York Times, everybody just painted it as a failure. And it's like, oh, here's a collection of headlines. Well done, producer Nick. I mean, literally, you would think if you read the mainstream media that SpaceX failed. And it really, the, when I was talking to Elon months ago about this, you know, he said, "Listen, 50/50, we get off the launchpad."

• 18:54Antonio Gracias?

  Yeah.

• 18:54Jason Calacanis?

  If we can get off the launchpad and we don't blow up the launchpad, that's a huge success. The fact that this thing got as far as it is in four minutes, and they got all that data, and they've got, when you see the scale of this factor, and I hope you all get to come down here, and all Americans get to see this, because for me, you know, and being friends with Elon for as long as I have, and to watch him go from the idea of this, and he showed me, I went with Elon to see the Hawthorne factory when he was considering renting it. And from that moment to now, to see the suffering that he went through personally to do this, and the team, the amount of suffering to get to this point has been so tremendous.

• 19:36Jason Calacanis?

  But when you go to the Gigafactory in Texas, when you see what's happening here at Starbase, it should let you know that this is still the greatest country in the world with the greatest entrepreneurs, and he is truly the greatest entrepreneur of our lifetime. And I'm not just saying that because he's my bestie, I'm saying it because it's objectively true. And when you see headlines in the press, look at what has been accomplished. Look at the Teslas on the road. Look at what happened with this rocket ship, and judge the man by what has been produced to date, and understand he's going to keep going. And the team he has inspired is relentless. I spoke, I sat there on the deck, an hour or two after all this went down, and I just

• 20:19Jason Calacanis?

  ate some chips and salsa with a half dozen of the people who were in Mission Control. They love the podcast, they listen to every episode of All In, I kid you not. And they said, Will you talk about this on all in? I said, will we talk about this on all in? Thank you for what you've done for humanity. This is the most inspiring thing I've experienced in my whole life. We love you guys SpaceX. Charge ahead, be relentless as you've been, and know that despite these absolutely insignificant headlines, what you're doing is so meaningful to every American and every human on this planet. Don't stop. Go faster, go harder, be more relentless. We're all cheering and we're in awe of you.

• 21:03Jason Calacanis?

  This is one topic we can all agree on. This is something that can galvanize America. This should be an important. We are leading the world again. Yes. We're leading the world in the space race again. We're going to be on the moon. We're going to be on Mars.

• 21:17David Sacks?

  What about Uranus?

• 21:20Jason Calacanis?

  Well, you know, Free Bird keeps asking. Antonio, give me a hug. I love you, brother. Thanks for coming on. Gavin, give me a hug over here. Love you, brother. Thanks for coming on. Bye, guys. Thanks for coming on. See you later.

• 21:32Chamath Palihapitiya?

  Bye, guys. See you, Gavin. Bye, Antonio.

• 21:35Jason Calacanis?

  That was great.

• 21:35David Sacks?

  I'm surprised I beat Chamath to the punch there.

• 21:38Jason Calacanis?

  Yeah.

• 21:38Chamath Palihapitiya?

  Oh, no.

• 21:39Jason Calacanis?

  We were all queued up. Chamath was having a moment. He was like daydreaming about the future and not thinking about the line.

• 21:45Chamath Palihapitiya?

  I was taking the number of shares of SpaceX I own and multiplying it by a billion trillion.

• 21:52Chamath Palihapitiya?

  Billion trillion dollars per share.

• 21:54Jason Calacanis?

  Wow. Yeah, the rest of us are thinking about humanity, America, inspiring people. And Chamath's got his like little calculator out.

• 22:01Chamath Palihapitiya?

  I'm going to have like a babushka of planes, a plane.

• 22:06Jason Calacanis?

  Right to ruin the moment. Make it about you.

• 22:09Chamath Palihapitiya?

  Oh, my God.

• 22:27David Sacks?

  I did have a business question about how the Starship impacts Starlink.

• 22:32Jason Calacanis?

  Very simple. There's a graphic online you can find on the SpaceX YouTube channel. And they show the Starship. And it literally looks like a goddamn Pez dispenser shooting out the next version of Starlink. And these are, you know, I don't want to speak about any specifics, but you can, you can watch it spit them out. You can put out more and they're obviously going to be more powerful. And if you have seen the size of the satellite, I have Starlink at both houses, the ski house and my main house as a backup. It's getting scary how good it is. And if you look at the size of them, and again, I don't want to speak about any future products. It's not my place.

• 23:14Jason Calacanis?

  But if you see the size getting smaller, there's one or two things that we all know about technology. Cheaper, faster, better, smaller. Just, I would just say, if you're, if you're a fan of Starlink, just keep those words in mind.

• 23:28David Sacks?

  Yeah.

• 23:29Jason Calacanis?

  It's going to be pretty amazing what Starlink is going to be able to do.

• 23:32David Sacks?

  Yeah, I thought that, maybe I read this somewhere, that Starship can carry 600 plus satellites. Whereas the previous top line rocket, the Falcon 9, could only carry, was it like 50 or something?

• 23:46Jason Calacanis?

  Yeah, I think maybe a little less, yeah, I think it's like 30, 40.

• 23:49David Sacks?

  So you're talking about 20 times the number of satellites can go up.

• 23:52Jason Calacanis?

  And at a lower expense.

• 23:54David Sacks?

  Yeah, and I guess SpaceX has gotten permission from the FCC to put up about 12,000 Starlink satellites. So you could do that, you know, with, I guess it's just 20, you know, 20 missions.

• 24:10Chamath Palihapitiya?

  The big disruption is going to happen by the end of 2026 because this next generation set of licenses, uh, spectrum licenses that the FCC sold came with a condition that you had to launch satellite capacity by the end of 2026, I think, otherwise you lose it. Or you have to do your first launch, I think, by the end of 2020. And the point is that the only company that actually has the capability to build and to launch is SpaceX. So they have a complete monopoly and because they're advantaging their own solution, it puts everybody else behind the eight ball. So not only will they probably offer the best global internet connectivity at every single natural point in the world that you could be, which is going to be a really big leap.

• 24:55Chamath Palihapitiya?

  They're going to do it, Jason, as you said, at a throughput that's going to surprise people.

• 25:00Chamath Palihapitiya?

  And it's also going to render every other existing provider in a really difficult situation who's like, you know, what is their alternative? You can't launch with ULA because they're inconsistent. You can't launch with Blue Origin because they're inconsistent. You can't launch with the Europeans in general because they're inconsistent. SpaceX is the only solution, but then SpaceX is just going to advantage themselves. And there's nothing illegal about that. So you're going to be left with a bunch of these existing telecommunications companies in a really difficult spot in the next couple of years. So it's going to be really dynamic space, I think, very much worth paying attention to.

• 25:33Jason Calacanis?

  Elon sends his regards to the all-in community. He's taking a nap. Man has not slept in the last couple of days. He's taking a well-deserved nap right now, so hopefully we'll have him on in a future episode very quickly.

• 25:48David Sacks?

  Where are you taping from, J Cal? Just curious, where are you taping from there?

• 25:51Jason Calacanis?

  I'm at Starbase, and there are little tiny homes, and Elon lent us one to stay in here. And yeah, it's just inspiring to be here. It's been a great experience. And I've been here a couple of times, and the scale of the factory, the ships, and just over the last, like they said, the last, I've been here a couple of times, maybe three or four years ago. It really is growing exponentially. And the other really positive thing is people are driving, again, back to the enthusiasm in the public. And what you don't see mirrored in the press, which I think was a really astute point, Sacks, I met a guy who gave me a ride in his golf cart.

• 26:35Jason Calacanis?

  I was late to a meeting. Guy says, hey, are you going somewhere? And I said, yeah, because I was literally running down the street trying to catch a flight. And the guy drives me in his golf cart. And I say, hey. He says, hey, are you here for the launch? I said, yeah, I'm here for the launch. He says, so am I. I said, can I ask you, do you work for SpaceX? He says, no, I'm just a fan of Elon's. I'm a fan of SpaceX. And I said, can I ask where you drove from? He said, I drove 19 hours to somewhere in Texas, Houston or something. He drove 19 hours to come here to spend the week to see the launch. And the crowds here have gotten bigger and bigger, and there's hundreds of people, I think it's called San Padre Island over here, a little beach community, kind of like a Las Vegas on the beach, or a Reno, or an Orleans. They're just lined up there with cameras.

• 27:20Jason Calacanis?

  These are Americans. Just Americans in RVs, in cars, setting up cameras to see history happen. And it really is truly inspiring. These are just salt of the earth, normal folk. This isn't the media. This isn't like affluent people or necessarily, they're just Americans who are inspired. And then that's, I think, what all entrepreneurs who hear these stories about what's going on down here, you'll overestimate what you can do in a year, you're going to underestimate what you can do in 10. And I think that's, you know, we all know Elon pretty well here and have watched this journey. They're cooking with oil. They're moving fast and the iteration process is extraordinary.

• 28:02Jason Calacanis?

  And they're making everything here and it's Americans making everything. The tiles, I remember being here three years ago and Elon and I, 2:00 in the morning, were walking through the factory where they were working 24 hours a day trying to figure out the tiles on Starship to get it back in. And they were making the tiles themselves and just trying to figure out that formula. That's the level of detail that's occurring here. And as Gavin said, there's a thousand different things changing on each iteration of this. So more great stuff to come, I believe. Yeah.

• 28:34Chamath Palihapitiya?

  That's been another episode of Phil Halmuth Mentions His Relationship With Elon. Thanks, everybody, for tuning in.

• 28:40Jason Calacanis?

  Exactly. No, I mean, what am I supposed to do? You know, like, I'm sorry that my friend, you know, started a rocket ship company. I don't want to apologize for it. You guys doing great stuff in the world as well. So do we want to talk about AI? Do we want to go to this Tiger marking down their book? Where would you like to go, gentlemen? We could talk about the Fox settlement with Dominion. That was something you and I talked about last week, Sacks. I'd love to get your opinion on that. They paid $787 million in this settlement for defamation. It didn't go to trial. You were hoping it would go to trial. How do you feel? I mean, and this is an extraordinarily large settlement, so.

• 29:19David Sacks?

  Yeah.

• 29:20Jason Calacanis?

  But what are your, what are your thoughts on this? You wanted to see this go to the man, go to the Supreme Court and maybe see the laws in the United States change eventually. Catch us up on your reaction to this ginormous fine.

• 29:29David Sacks?

  Yeah.

• 29:30Jason Calacanis?

  It's a big speeding ticket, yeah?

• 29:32David Sacks?

  Yeah, well, it's funny you, you call it a speeding ticket because when I saw this, it reminded me of a scene at the beginning of Apocalypse Now, where Martin Sheen says that charging a man with murder in this place is like handing out speeding tickets at the Indianapolis 500. I mean, the analogy here is that the media is so dishonest, whether at CNN or MSNBC or the New York Times. I mean, they're constantly inaccurate or whatever. And, you know, so.

• 29:59Jason Calacanis?

  It's still defending Fox.

• 30:00David Sacks?

  So for this one network to get a fine of like 800 million, it's like pretty, pretty incredible. I mean, they should be handing out a lot more of these in my, in my view, not just to Fox. But yeah, look, I would like to see, to that end, I would like to see the standard in New York Times versus Sullivan revised by the Supreme Court. The standard is actual malice. So you have to prove not just that the press told a lie, but that there was malice behind it. And that's what this trial would have been about and Fox.

• 30:29Jason Calacanis?

  What should it change to? Yeah.

• 30:32David Sacks?

  I think that.

• 30:33Jason Calacanis?

  What would it change to? What would be a better standard in your mind?

• 30:37David Sacks?

  I think that if the media makes a mistake, they should have to correct it. And I would say the correction needs to be at the same level that they publicize the original story. So if they make a mistake, if it's untruthful and it damages someone's reputation and they refuse to post a correction, then I think they should be liable. That seems fair to me.

• 30:59Jason Calacanis?

  If you were to put something on page A1, if you were to give it five minutes at the start of a show on whether it's Rachel Maddow or Tucker, whoever makes the mistake, it could be anybody. If they made the mistake in the first five minutes, top of the show, they don't get to bury it on the website. They don't get to bury it on page seven. They gotta say it upfront. Hey, listen, we made a mistake.

• 31:18David Sacks?

  Correction.

• 31:18Jason Calacanis?

  Here's the mistake.

• 31:19David Sacks?

  Correction.

• 31:19Jason Calacanis?

  We're correcting. Yeah. I think it's reasonable.

• 31:21David Sacks?

  Correction should get the same level of publicity as the original story. And by the way, if they correct it, that would be like a safe harbor. But if they refuse and they publish a lie and it damages somebody, then they should be liable for that.

• 31:33Jason Calacanis?

  I think there should also be something.

• 31:34David Sacks?

  That's what I think, but.

• 31:35Jason Calacanis?

  Yeah, I'm in agreement with that because they, there is the trick in journalism to bury the correction. And, and there's another trick that I think needs to be looked at and it's a little more nuanced, which is.

• 31:47Jason Calacanis?

  Somebody makes a mistake or an accusation in a publication. And then the next publication says, oh, the New York Times, Fox News, CNN said this. But they don't check it themselves. So they're using another publication as like a proxy to kind of give them some level of protection. I think they should have to on a firsthand basis.

• 32:07David Sacks?

  Right. No, that's the game they play. You're right. So they start with a super shady source.

• 32:13Jason Calacanis?

  Yeah.

• 32:13David Sacks?

  That, you know, it just attributes it to some sort of anonymous source. Then the second most shady publication quotes that one. And then the third most shady quotes that. And then it goes through the whole food chain. Yeah. So you're right. Reposting something in the echo chamber because other publications are doing it. You're right. That should not be protected. They should have to do their own sourcing, basically.

• 32:35Jason Calacanis?

  Yeah, or just some base level of fact checking. If you, and now if, if you called it Fox Opinion, that's slightly different than calling it Fox News. So maybe the part of this is branding a Chamath or Friedberg. Do you have any thoughts on this? Just in general?

• 32:48Chamath Palihapitiya?

  Fox, I think, has only four billion of cash. So they just spent 20 some odd percent of it paying this off. And if I were a shareholder, the question I would ask is, did we actually make enough money to justify having to pay almost $800 million of our cash balance? The answer is probably no. And this is the first of a bunch of lawsuits that they have. The next one, which is, I think, is like Smartomatic, which is another voting machine company. That's an even bigger lawsuit, actually. That's a two and a half billion dollar lawsuit. And so it's, could it be the same outcome in another settlement? And so now all of a sudden you would deplete half their cash? All for a lie? To do what? At some point, some smart business governance needs to kick in over at Fox and they need

• 33:32Chamath Palihapitiya?

  to realize that this stuff just doesn't make economic sense. Maybe they thought it made political and ratings sense, but you can't justify that when it costs $2 billion.

• 33:43Jason Calacanis?

  There is a concept here, I think, Sax, that is particularly interesting. In Finland. When you get a speeding ticket, speaking of speeding tickets, your speeding ticket is proportional to your net worth. And so these NHL players who like to speed and a Nokia executive was given the equivalent, and this is a bit excessive, of $103,000 fine for going 45 into 30 zone on his motorcycle. And an NHL player got a $39,000 fine two years earlier. I think that this is part of the problem is sometimes fines don't match the crime and or they're not proportional enough for the person to feel them. And so then we kind of can joke that they're speeding tickets. One very rich person said to me, you know, when they would, I'd watched them parking,

• 34:27Jason Calacanis?

  you know, incredibly illegally in a small town. And I said, you're going to get a pretty serious ticket. That's a pretty gnarly spot to be parking. And they said, oh, you mean the VIP parking charge? And I was like, yeah, that kind of sucks, but okay. So there might be some concept here of a proportional fine. And I think the EU is starting to work on that as well because, you know, big tech was ignoring.

• 34:54Chamath Palihapitiya?

  This is going to embolden a lot of people to take matters into their own hands and sue some of these media companies if the lie is egregious enough and it negatively impacts them enough. I think it would embolden a lot of folks. So Sacks is right that up until now, most folks haven't done anything about this. But if you feel like the media has really wronged you in a meaningful way, there's probably also now a lot of private equity organizations that would do the lawsuit finance or hedge funds that would do the lawsuit finance.

• 35:27Jason Calacanis?

  Like Peter Chiel did.

• 35:28Chamath Palihapitiya?

  Like you're free rolling it, right? So you get one of these folks to pay it. They get 50% of the gains. You get 25%, the lawyers get 25% and you go and you litigate. I'm sure that you'll see more, not less, because this fine is really big. And again, we don't know the end of all of these 2020 election hoax shenanigans, because this is the first, not the last of these.

• 35:50David Sacks?

  I do think it's a really big number. I mean, I did, I did want the case to go to all these courts so they could revise New York Times versus Sullivan. But I do wonder about the size of this settlement here. It's just, it seems extraordinary.

• 36:03Jason Calacanis?

  They paid it.

• 36:04David Sacks?

  There was a interest.

• 36:05Jason Calacanis?

  It's a settlement.

• 36:06David Sacks?

  Yeah, they voluntarily agreed to do it. Yeah, absolutely. So.

• 36:10David Sacks?

  So in any event, look, I, I hope Chamath is right that this actually incentivizes more actions against media companies because I think their feet need to be held to the fire and they need to do a better job publishing the truth. There was an interesting thread by a Twitter poster called Kanakoa. Do you, I don't know if you guys saw this?

• 36:30Jason Calacanis?

  No.

• 36:30David Sacks?

  Where he posted an hour of footage by Democrats and Democratic groups and more Democrat-leaning political science experts questioning whether voting machines could be hacked. Basically, this, this idea that voting machines could be hacked is not, it's not an allegation that is unique to Fox. So apparently there's evidence that Fox knew it was bogus, so they definitely should not have run with it. But I do wonder, hey, why, why shouldn't other people be liable for this too?

• 37:05Jason Calacanis?

  Well, I mean, the, the question is, I think those internal text messages between the hosts who knowingly knew it was false and then were doing it. I think that's why they, they took that settlement because 800 million or whatever or so is a lot less than 1.4 or 1.5. And so there is speculation that maybe-

• 37:21David Sacks?

  Clearly, they got some bad discovery. They got some discovery problems.

• 37:24Jason Calacanis?

  Yeah.

• 37:24David Sacks?

  But I'm just saying that-

• 37:25Jason Calacanis?

  You got discovery problems, yeah.

• 37:26David Sacks?

  These allegations about electronic voting machines being hackable or rigged, this seems like an allegation that's been made-

• 37:33Jason Calacanis?

  Well, that's actually interesting.

• 37:35David Sacks?

  Not just in 2020, but it's been made multiple times by whichever side loses.

• 37:39Jason Calacanis?

  Yes.

• 37:40David Sacks?

  And so I would wonder why more parties aren't liable for this. By the way-

• 37:44Jason Calacanis?

  The hanging chair.

• 37:45David Sacks?

  I never, I never bought into, I never bought into those allegations. I said so at the time. I thought they were bogus. I thought the whole Sidney Powell thing, you know, the release of the Kraken or whatever was ridiculous. So I don't feel too bad for Fox or anything like that. But it seems to me, like I'm saying, they're, they're not the only ones speeding here. There's a lot of people who need to get speeding tickets.

• 38:05Jason Calacanis?

  Yeah, there is a roadmap for the press to learn from this and to get better. Right? Like to maybe take to heart that maybe the public now is looking at them and assuming that the trust in media has is at an all time low.

• 38:18David Friedberg?

  Alex Jones got fined a billion dollars, right?

• 38:21Jason Calacanis?

  It's a judgment.

• 38:22David Friedberg?

  Judgment, yeah.

• 38:23Jason Calacanis?

  He had a judgment. The Fox thing's a settlement, right? He got a judgment of over a billion from multiple courts.

• 38:29David Friedberg?

  Yeah, so he said a bunch of stuff that, you know, was in court provable to be false. And then he kind of restated it and he got, you know, this massive fine. I think there's an interesting question here on how far this goes with respect to, you know, maybe it invites the lawsuits, like you guys say, where there's things that are more on the on the line. And then we really start to have kind of a tough set of conversations that maybe there are things that are factually debatable, arguable, opinionated, where they were true at a certain point. And then you didn't really have evidence to disprove it. What are you allowed to say? Are you only allowed to say things that you've proven or things that haven't been disproven? And that becomes a pretty tough set of conversations.

• 39:11David Friedberg?

  And what I think might be interesting from here, if so much of media over time gets replaced by chat and AI aggregating lots of different information, synthesizing that and making representations back to us. And that becomes our primary source of call it news or quote media in the future. What happens when those models or the synthesis of data or the source of the data leads to a statement that has a similar sort of dissent around whether or not it's true or not? And that you really end up kind of ending up in a pretty cloudy environment.

• 39:44David Friedberg?

  You know, by starting this process.

• 39:46Jason Calacanis?

  I think it's very insightful and we'll get to AI in a minute. I just coming as a coming from a journalism background myself and then becoming a commentator. There really needs to be three or four very simple things that the media needs to do. Number one, more fact checking. And number two, less anonymous sources. It's they rely too much on anonymous sources. And then there needs to be very clear delineation between what is a fact and what is an opinion? And the public is trying to sort this out. Is it Fox News is an opinion? And what you're saying is this an opinion or is this a fact? Did you do journalism or did you just have an opinion? Is Rachel Maddow an opinion or did she actually have a journalist check these facts? And I think this is where self policing and maybe rebuilding their rebuilding trust is on the media.

• 40:31Jason Calacanis?

  It is now the news and the media's job to rebuild trust. And if not, they're going to get more fines. But let's get into, I think, some of the stuff we're seeing with AI. We had talked on this show before, many times, about the corpus of data under which these models are being built. Well, Reddit announced plans to start charging companies that use its data to train AI models. The co-founder, Steve Huffman, who came back after Conde Nast had bought Reddit and then sold it back to the founders. And paradoxically, I believe Sam Altman has a major investment in Reddit. He said, "More than any other place on the internet, Reddit is a home for authentic conversations. There's a lot of stuff on the site that you'd only ever say in therapy AI or never at all." A lot of people use pseudonyms, obviously.

• 41:14Jason Calacanis?

  And the Reddit corpus of data is incredibly valuable. But we don't need to give all that value to some of the largest companies in the world for free, crawling Reddit, generating revenue, and not returning any of the value to our users is something we have a problem with. It's a good time for us to tighten things up. Your thoughts, Chama, on what we talked about two different episodes? Maybe we'll play, drop a clip in here, Nick, if you want to, in post. It's going to be the large data sets. Quora, Yelp, the App Store reviews, Amazon's reviews. So there are large corpuses of data that you would need. Like Craigslist has famously never allowed anybody to scrape Craigslist. The amount of data inside Craigslist, as but one example of a data set, would be extraordinary to build ChatGPT on.

• 41:58Jason Calacanis?

  ChatGPT is not allowed to because, as you brought up, robots.txt last week, there's going to need to be an AI.txt. Are you allowed to use my data set in AI? And under, and how will I be compensated for it? Will the rights to the data, will Google just say to Quora, "Hey, we'll give you a billion dollars a year for this data set if you don't give it to anybody else"?

• 42:19Chamath Palihapitiya?

  They should.

• 42:21Jason Calacanis?

  Chama, those were our previous discussions that we just played. What do you think?

• 42:24Chamath Palihapitiya?

  It's so incredible. We are witnessing such an important moment for...

• 42:31Chamath Palihapitiya?

  Silicon Valley, but frankly, how the world works and it's just, everything is changing. That's what I'm just in awe about that, you know, we talked about this and we were basically spitballing something two or three months ago and not but 60 or 90 days later, these things come to pass. Right? We talk about something in one week and then, you know, 14 days later, it's completely upended. Like how impressed Saks was about plugins and then plugins were rendered useless and somewhat impotent two weeks later by AutoGPTs.

• 43:07Chamath Palihapitiya?

  It's just so profound, I think, what's going on. So Google today announced that they're going to merge two organizations that I thought were so orthogonal to each other. Disparate. Brain and deep mind. The cultures just seem so totally different, but now they're merging those two things together, something that I thought would never happen. They did it. So all these competitive pressures are so real.

• 43:32Chamath Palihapitiya?

  I was in LA for the breakthrough prize. I was flying home with somebody on Saturday. I won't say who it is, but they are right at the bleeding edge of a lot of this AI stuff. And they let go a third of their company, replaced it with an agent within six weeks of training it. So how is this not going to affect everybody else, I guess, is maybe the bigger question. And then I go back to what I said last week, which is that we've talked about a lot of the positive things. And I think it's important to make sure that people understand that there are a bunch of non-trivial negative things. And I think I shared one on Twitter, which was around this company that used an AI

• 44:13Chamath Palihapitiya?

  model to build a library of 40,000 toxic compounds that could kill all kinds of numbers of humans. So there's all kinds of really, really tough things going on right now that I think to me means it's the moment where I have the least sense of how to do my job.

• 44:30Chamath Palihapitiya?

  And so I've tried to kind of like put a pin in everything and just go back to learning mode.

• 44:34Jason Calacanis?

  It's a bit humbling is what you're saying like.

• 44:36Chamath Palihapitiya?

  It's incredibly humbling.

• 44:37Jason Calacanis?

  The entire rulebook, even for us as capital allocators, company formation, it has you, it has you, Chamath, wondering how to do this.

• 44:46Chamath Palihapitiya?

  As a CEO, I'm like, should I be using models to do parts of the workflow inside of my business, inside the portfolio companies that we're invested in? Am I supposed to go into the board meeting now on Monday and say, hey, XYZ person just did one, two, and three, and cut OpEx by a third? Do I demand the CEO do that? Do I force change if they don't do it? Do I say? So I don't, I don't, I don't exactly know what to do.

• 45:16Jason Calacanis?

  The carousel is spinning increasingly faster and we're all on it.

• 45:20David Friedberg?

  I'll just say a general point, which I kind of made at this event today. It feels like the pace of change is so high that you're kind of in a dust storm. You don't really know where you're going to end up. So it's very hard to sit as an investor right now and say, I'm going to pick these things because, you know, two weeks later, you just don't know whether that path even exists anymore because the dust storm washes it away, you know, blows it away. And I think that there will, as a result, there will be a lot of money lost by investors, by companies building in this space.

• 45:57David Friedberg?

  Net, net, the index for investing in like dot com companies, the majority, a large amount of money was lost during that era.

• 46:09David Friedberg?

  But from that era also emerged a handful of winners and those winners ended up creating extraordinary value. I think we're at a point in time right now where we could see 10 times the value generated in this phase of technology advancement than we saw during the internet. And the advancement of the internet. And if that is true, I think you'll end up seeing certainly the same thing happen, which is the index will lose money. But the few winners will accrue such extraordinary gains. The problem is, you can't deterministically pick those winners today.

• 46:41Jason Calacanis?

  Totally.

• 46:41David Friedberg?

  Because of the dust storm problem. You just don't know the path.

• 46:44Jason Calacanis?

  Totally.

• 46:44David Friedberg?

  So if you were to meet Jeff Bezos versus some CEO of some dot com selling pet stuff back in 1995 to 97, 94 to 97, would you have recognized Jeff Bezos was going to stand out? Would you have recognized Larry and Sergey were going to stand out? Would you have recognized Bill Gates was going to stand out? Or Zuck? At the end of the day, this is harder than it has ever been in terms of predicting a technology cycle. But what we still know to be true is that the capital will be allocated within a company, the operations will be run, managed, and driven and led by an individual or a set of individuals. And that's effectively what I think a lot of investing in the cycle is going to come down to. We're all going to sit here and pontificate and intellectually masturbate ourselves to

• 47:27David Friedberg?

  some, you know, genius, you know, path that we think is going to evolve. And at the end of the day, most of it won't turn out to be true and that path won't be real. Because this is such a dynamical system right now. There are so many feedback loops. One thing makes one step change and it changes every other step. But what we still know is that great leaders can lead. You know, and especially coming out of this Elon discussion and seeing the extraordinary achievements he's delivered particularly today. I think that's maybe what a lot of early-stage venture is going to shift to in AI. It's really, you know, finding great people. And I'll tell you one thing for sure, and I was kind of commenting on this earlier today, was I really think a lot of series C and later companies, and I know we're going

• 48:09David Friedberg?

  to talk about this implosion discussion later, so many of those companies have a valuation that's less than their preference stack. And as a result, those founders that work there and those employees that are there are getting their equity wiped out. They'll have to get restructured.

• 48:24Jason Calacanis?

  Would you give me a favor, Friedberg? Can you just explain what that means technically to the audience?

• 48:28David Friedberg?

  So when you raise money into a startup, the investors that give you that money, that invest that money, it's effectively a loan. You owe them that money back first before your shares get paid out in the future. So if the company ends up being worth less than the money that they've invested, they get the money first. And ultimately, if the company goes public or gets sold, they can convert their what are called preferred shares into common shares and participate. So even though you only quote sold 20% of your company for, let's say, $200 million, that $200 million actually has to get paid first. So now you've raised this $200 million. The investors, the company is now repriced because the market has come down by 80%.

• 49:12David Friedberg?

  And investors are saying, hey, your company is now worth 175 million. Your company is now worth less than what you owe the preferred investors. And if it's worth less than what you owe, which I think is the case for over 70 or 80% of Series C and layer companies. Oh, really? Yeah. And this, but this number comes from what I shared a few months ago, which is that 70% of publicly traded companies that went public in the last three years are trading below the cash that they've raised. So if you translate that on a one-to-one basis to the private market, you know, and these, by the way, were the best companies, actually got public. So in the private market, you've got to assume that something in that late-stage market is on the order of 70, 80% is worth less than their preference stack.

• 49:56David Friedberg?

  So a lot of those employees are going to run. Those founders don't want to go work for the VCs when they get recapped and get offered a 4% equity grant. Where are they going to go? Because it looks like... They're going to start AI companies. And I think that's what... Fantastic. And I think that's what's really shifting it right now. That's kind of a big dynamic is a lot of these, I'm calling them zombie corns, are going to see this kind of mass exodus of talent. And a lot of the investors that don't know how to price stuff and don't want to deal with recaps in the late stage are diverting their attention to seed and A and early stuff. And so there's both a rush of talent and a rush of capital to this kind of very early stage. And so we'll create this massively bubble-ific, you know, index of AI stuff. But some number of these things with some great leaders will emerge and will accrue

• 50:40David Friedberg?

  extraordinary value across many industries.

• 50:43Chamath Palihapitiya?

  I really agree with a lot of what you're saying. The thing to keep in mind is that the problem with the use of AutoGPTs as an example is that the order of magnitude of capital that you need has now just gone down.

• 50:55David Friedberg?

  Yeah, yeah.

• 50:56Chamath Palihapitiya?

  Instead of a $10 million Series A. So we used to, you know, people in the height were doing 30 and 40 million-dollar Series As into crazy, very bubble-ish ideas and NFTs and all this other stuff. That's idiotic today.

• 51:12Chamath Palihapitiya?

  Because a two or three person company can now do the work of 20 to 30 people. And the amount of capital that they need is really their salaries plus the cost of renting some GPUs on your favorite, pick your cloud. And so all of a sudden, you can get huge amounts of progress in weeks and months with hundreds of thousands or low millions of dollars. So if you've raised all of a sudden a $5 billion fund because you were trying to do late-stage deals, and now all of a sudden said, well, wait, we'll just pivot to early stage, but what are you gonna do? Find the next 30-person company? That's not gonna work because you have to know how to write 500,000 to million-dollar

• 51:55Chamath Palihapitiya?

  checks with two or three people and really help them and really understand their technical ability to execute, right?

• 52:03Jason Calacanis?

  Yeah.

• 52:04Chamath Palihapitiya?

  But then it also quickly becomes a thing where maybe you're better off just doing 500 of these two- and three-person teams. We tried this experiment seven years ago, this thing called Capital as a Service, where we were doing this automated investing. I don't know if you guys remember this, but it was like some machine learning that we did on all of our portfolio companies. And all somebody had to do was fill out a form and send us some metrics, and we would have a machined decision, right? So humans would not be allowed to make the investment decision. The problem that we ran into was there was a lot of great companies all around the world, but the administrative burden of supporting 500 companies was unbelievably large and complicated. Oh, you have a company in Indonesia.

• 52:48Chamath Palihapitiya?

  Well, there's another company in South Korea, and here's a company in, you know...

• 52:52Jason Calacanis?

  Oh, they're raising a new round. They have to get board approval. They gotta do this, signatures. I mean, it's hard to scale.

• 52:57Chamath Palihapitiya?

  Yeah, so the VC, which is a software-light, people-heavy, artisanal business, all of a sudden becomes misfired, right? So you actually need to be highly automated and use software yourself in order to put 500 three-person teams on the field. So this is what I mean by it's really, I think Friedberg's... Use of the term dust storm is a really good one. It's extremely, extremely confusing what to do. And if you have large amounts of money, that may actually now, what used to be a real differentiator and a key to success, may actually become an impediment because you

• 53:37Jason Calacanis?

  It's a burden.

• 53:38Chamath Palihapitiya?

  You are forced to do business in a classical way. That has changed frankly in the last 90 days.

• 53:45Jason Calacanis?

  What do you think, Sacks?

• 53:46David Sacks?

  What's the question? Because we're touching on a lot of different things here.

• 53:49Jason Calacanis?

  Do you feel like this is a dust storm and it's murky? And it's just hard to place bets as a capital allocator? Because something comes out the next day or 48 hours later or the next week? That takes the previous idea and wipes it out? And then, and how do you scale? And be capital efficient?

• 54:07David Sacks?

  Well, we're at the early stages of a huge new wave. And I think that creates a lot of opportunity. So yeah, you've got to basically separate what's really interesting from the fool's gold. There's definitely going to be a lot of that. But at least there's a reason now to believe that, say, dozens of unicorns could be created in the next couple of years. So before we were getting kind of long in the tooth on some of these tech cycles. I mean, cloud, social, mobile. I mean, there was a reason to believe that those earlier waves had sort of played out, that the big winners have already been determined. And maybe there wouldn't be too many more big winners in those spaces. But now we have a whole new catalyst for founders to do all sorts of new things.

• 54:50David Sacks?

  And so I tend to think that's super exciting. You know, we're in the early stages. And I do think there will be dozens of new unicorns minted in various aspects of AI. It could be in AI infrastructure. You know, whether you're seeing now, there's a lot of funding that's gone into vector databases or platforms for creating agents.

• 55:13David Sacks?

  Or it could be in AI co-pilots, basically that tackle various professional categories and create a co-pilot for coders, or a co-pilot for doctors, or lawyers, or architects. I think there's going to be potentially multiple unicorns created in those categories. I think there's going to be SaaS software products that were just good before, but now will actually be great because the incorporation of APIs from, you know, AI foundation models will just turbocharge the capabilities. And so there's a whole bunch of SaaS products that I think become newly interesting and better. They go from being vitamins to painkillers.

• 55:55David Sacks?

  So, you know, we're looking in all those categories and I think we'll end up making some bets, but there's also going to be a lot of companies that are flashes in the pan or get undermined. You know, there'll be SaaS companies that actually become less attractive because of disruption from AI. But look, I think all of this, this maelstrom is great for an investor. I mean, if you're going to spray and pray, it's not good. You've got to be selective about where you take your shots. But I think this is the most exciting environment we've been in in a number of years. I mean, it makes me want to go to work every day and see.

• 56:31Jason Calacanis?

  It's so funny you say that, Sacks, because I literally am looking for an office space in San Mateo to start like doing the incubator in person again. And on Monday, I'm having 60 companies come to San Francisco. We'll be at my attorney's office and we're having like a founder university with just all these new startups that we invested in to just hang out for a day. The enthusiasm right now is amazing. And what's really unique is the developers who had three out of seven companies they interviewed with, offer them 150 or 250K packages, RSUs, whatever. Now, there's no offer from Facebook. There's no Apple. There's no Twitter. There's no Google or Microsoft offer coming in to be the backstop

• 57:15Jason Calacanis?

  against starting a company. So what are they doing? They're saying, you know what? I got two friends who got laid off. I got one friend who's halfway at the door. Let's just start something. Let's just start something. Who can give me 100K? Who can give me 500K? And it's, uh, it's, it's so invigorating to see the talented people, not people who've learned how to. You know, hack a pitch together and tell a story, but people were actually coding and making MVPs. It's truly exhilarating right now, the amount of two and three person startups I'm seeing.

• 57:47David Sacks?

  Yeah.

• 57:47Jason Calacanis?

  And so while you'll have this, and it's incredible, I've never seen this amount of destruction and creation occurring simultaneously. I love this zombie coins concept. You have one half of your portfolio coming apart at the seams, layoffs, reducing their targets. While people are coming in the door with products that are absolutely awe inspiring. I'll just give one example. I had a company come out of our founder university, gave them $25,000 to incorporate. A developer and his brother who's a screenplay writer. They're taking screenplay writing software sacks. You'll appreciate this, having produced two amazing movies. Thank you for smoking and the Dolly film is called?

• 58:24David Sacks?

  Dollyland.

• 58:25Jason Calacanis?

  Dollyland?

• 58:27David Sacks?

  Yeah, coming out in two months.

• 58:29Jason Calacanis?

  Coming out in two months. Congratulations to Emmy award winning, Oscar winning producer. He's going to win an Oscar this time. He's, you know, the screenplay writing tools that have existed. They're like, what word processors with formatting? What they're doing is they're saying, hey, write some dialogue. And then you can have dialogue and say, hey, make it a little snappier, make it a little Tarantino-ish, make it a little more, you know, Sorkin-ish. And then make a storyboard with, you know, stable diffusion. And I was like, well, this is the genius idea. I mean, it's unbelievable. Of course I'll give you $25,000 for your incorporation. And then they're coming to the Excel, I'm going to give another 100K. And every single piece of software.

• 59:09Chamath Palihapitiya?

  Will that company in success ever raise 25 or 30 million dollars, do you think?

• 59:13Jason Calacanis?

  No, I think there'll be 12 people. I think it'll be 12 people. I'll give them the 25K, 100K and then a million.

• 59:20Chamath Palihapitiya?

  Our industry raises $100 billion a year on the premise that each company, before they become a unicorn, will absorb between 500 and a billion dollars.

• 59:29Jason Calacanis?

  Yeah, I'm gonna own 20%, 10 to 20% of the company for low millions and we'll see.

• 59:35Chamath Palihapitiya?

  Mid-journey is 12 people and no, it's totally bootstrapped. Like, I guess what I'm saying is, because in the world of AI, so much work is done for you for free. This is why I'm asking, maybe we will have to change how we do business.

• 59:50David Sacks?

  On the Hollywood example, there's about to be a Writers Guild strike. And they may want to think twice about that because this is not the time where you want to be encouraging the industry to find alternatives to writers.

• 1:00:02Jason Calacanis?

  Yeah, you want to get back in the office and you want to say, hey, can I, is there any other work I can do this weekend, boss? Did you see the news about BuzzFeed today? They had won a Pulitzer. They just shut down BuzzFeed News, the entire news division, gone. Another 15% gone. The layoffs, and then there was a report this week that Zuckerberg's doing his third round of layoffs. Another 4,000 people. That puts him at 24,000.

• 1:00:26David Sacks?

  Yeah.

• 1:00:26Jason Calacanis?

  With a hiring freeze.

• 1:00:28David Sacks?

  So the way I describe the current funding environment is, it's a tale of two cities. It's the best of times, it's the worst of times. If you're a hot AI startup that's able to tap into the zeitgeist, that's doing something that's perceived as cutting edge or relevant, there's a strong why now, and you're early. You know, you're early stage, you're able to raise money for that. The spigot has turned back on, there's a lot of funding for those types of early-stage startups. But if you're a Series C-stage startup, you're a late-stage startup with a, it's called a pre-AI model. The spigot has just turned off completely. I mean, let's look at that chart from Crunchbase, where the amount of Series C funding has gone from

• 1:01:11David Sacks?

  something like 10 billion a quarter last year to like zero. I mean,

• 1:01:16Jason Calacanis?

  This chart is hardly... I thought this was an era in the chart. Look at this chart, everybody. Series C funding to US companies by quarter.

• 1:01:24David Sacks?

  There is just no growth stage funding, it's just completely dried up. I mean, look at that.

• 1:01:30Jason Calacanis?

  I mean, it got cut in a half and then it got cut in half again. And then it just flatlined. And so when you see this, is your thesis, let me ask you this, is your thesis here that people aren't trying to raise money and they're just busy cutting their companies down to a smaller team size and they'll come back out in the second half of the year? Or that anybody with that amount of dry powder is out of the game now?

• 1:01:52David Sacks?

  Yeah, I think that we're in this awkward stage where the, the companies who raise money and call it 2020 and 2021, all of those valuations are obsolete. And you've had a lot of late-stage players leave the game or they're in the penalty box, they're in timeout. I mean, look at Tiger, for example, the single most active funder at late-stage is trying to figure out how much to mark down his portfolio. So I just think that a lot of the funding has dried up. This idea that there's tons of dry powder sitting out there, I think is a myth. Or maybe it's there, but there's no willingness to deploy it. The valuations are all out of whack and VCs generally would rather lead around in a new

• 1:02:34David Sacks?

  startup with a fresh cap table than in a cap table they got to restructure because no one really wants to do restructuring work.

• 1:02:40Jason Calacanis?

  Which is what we talked about a year ago. This is what we talked about a year ago, Chamath. I asked you point blank, would you, if they cut the valuation and, you know, they redid everything and said, hey, listen, we understand this is reality, would you get involved and cut a check? And you're like, I don't want to deal with that kind of, you know, that kind of...

• 1:02:55Chamath Palihapitiya?

  Too hard bucket.

• 1:02:56Jason Calacanis?

  Too hard bucket for you.

• 1:02:57David Sacks?

  Yeah.

• 1:02:58Jason Calacanis?

  And so now, once again, a year, six months or a year after we talk about this, it has now manifested. This has metastasized into...

• 1:03:05Chamath Palihapitiya?

  No, no, no. It hasn't even started. I think we are still...

• 1:03:08Jason Calacanis?

  You don't think it started?

• 1:03:08Chamath Palihapitiya?

  I think, I think we're still being really prescient. Like, the Tiger thing was very important because they are, in many ways, at the front of the line in terms of the number of companies they've touched, the amount of capital they've written. And because they're in the middle of a very large fundraise, their need to mark to market quite accurately so that their existing LPs know what they're signing up for in this next fund. So they're the ones that have the most incentive. To move the marks. But it still leaves an entire industry of folks that don't necessarily need to do that because they have, whether it's dry powder, that dry powder is real or not. The point is that there's a lot of money that hasn't been deployed. And so, again, I've asked this question before.

• 1:03:51Chamath Palihapitiya?

  What is their incentive to really mark their book down 50%? They don't have an incentive. Why would they do that? They would rather let it decay down naturally. I'll give you an example of this. Or do converts that keep it alive, that basically allow them to delay. Yeah, but even the convert market free, that was hot for about six months and then it just Yeah. Nobody's doing that stuff either. But I'll give you one example. There's a very good company that we are investors in, along with every kind of big, blue-chip, tier-one muckety-muck organization. We did the A and they stacked on afterwards. And when we thought about what our valuation should be, we did something. We got to a number which was a third of what the mark was.

• 1:04:35Chamath Palihapitiya?

  And we're like, well, if we think the price is two-thirds off, we should probably just sell it now. And we actually went and got some term sheets from some private equity firms to validate it. And what they, it was incredible, they both independently got to that same number. And so while the deal was closing, we went through to the end of quarter, we moved the mark down and we pointed to that valuation. And we said, look, this is what these two other very well-known firms have said. This is what we've said. So this is what our new valuation is. And, you know, we're trying to sell it and we ended up selling it. But every other organization didn't touch their valuation, that valuation.

• 1:05:10Jason Calacanis?

  The private equity folks, maybe you could explain to the audience why the private equity folks are such a good backstop in terms of valuation versus, say, venture capitalists?

• 1:05:19Chamath Palihapitiya?

  Well, I think that venture capitalists, we tend to be glass half-full. And we are conditioned, especially if you do your job well, to be smart buyers of deep out-of-the-money options. What does that mean? It's like when you meet an entrepreneur and you give them three or four million bucks or $500,000 or whatever at some nominal valuation, you're not trying to get your money back. You're trying to figure out whether he is a Zuck or an Elon or Larry Page and all of a sudden you get 1,000x on your money back, right? So we are buying these deep out-of-the-money options. Most of them don't hit. But when they do, they can just have these crazy statistical outlier outcomes.

• 1:06:00Jason Calacanis?

  Yum yum.

• 1:06:01Chamath Palihapitiya?

  So we're trying to buy the future and we tend to be believers of what can go right. Private equity has refined a very powerful toolkit of putting

• 1:06:14Chamath Palihapitiya?

  two or three orders of magnitude of the money we put into companies to work on the premise that the glass is actually half empty. And what can go wrong and how do we mitigate that risk? And so they tend to be much more sober, I think, in my experience dealing with them. And what is the true valuation of a business? What are the upsides of a business? What are the warts on a business? They they really kind of see the truth, the ground truth, much better than VCs do in general.

• 1:06:40Jason Calacanis?

  Because they're closer to public markets and they're they flip these things every two or three years.

• 1:06:44Chamath Palihapitiya?

  Their margins are much thinner. They're they're trying to make 1.5, 1.6x their money. 2x is a huge outcome for them.

• 1:06:51Jason Calacanis?

  Yes, so they they have a much more sober version of reality. A bunch of this Tiger stuff.

• 1:06:58Chamath Palihapitiya?

  Yeah.

• 1:06:59Jason Calacanis?

  Got released and I mean, their their funds underwater, just like Masayoshi Son's fund is underwater. And it's going to be years of pain and suffering to get out from under this. And so again, I think Sacks nailed it with Tale of Two Cities. Anybody else want to chime on this before we talk a little bit about?

• 1:07:16Chamath Palihapitiya?

  Well, for us.

• 1:07:16Jason Calacanis?

  Our friend of the pod, Brian Armstrong.

• 1:07:18Chamath Palihapitiya?

  I've been I've been investing off balance sheet since 2018. And six months ago, we started to explore whether we should raise a fund. And I think it was like two weeks ago, we brought the senior partners in, me and the five other guys that that run our business. And we said, we're not going to raise a fund. And the biggest reason is this dynamic, which is that, you know, we have dollars of private assets. I don't actually know what they're really worth. But I have a responsibility to try to get as much of that capital out. And so I thought the best thing to do is just to take our time and try to figure it out because I have way more questions than answers right now.

• 1:07:59Chamath Palihapitiya?

  And that's really the first time since I've moved to Silicon Valley where I've had that sensation.

• 1:08:04Jason Calacanis?

  Is a sensation humility?

• 1:08:06Chamath Palihapitiya?

  I think it's like.

• 1:08:08Jason Calacanis?

  I mean, I'm joking, but it is. It is for somebody like you who has done so well placing bets.

• 1:08:14Chamath Palihapitiya?

  Deeply humbling.

• 1:08:15Jason Calacanis?

  I mean, I say this as a joke, but I mean it as like a point of self-awareness for you because listen, you place some amazing bets, whether it's the Warriors or Facebook.

• 1:08:24Chamath Palihapitiya?

  Or Bitcoin or whatever, or Slack or whatever. I don't know whether I should be writing $200 million checks or $200,000 checks. And I don't know whether I should be doing that sort of as an incubator, actually, as an accelerator.

• 1:08:37Jason Calacanis?

  That's what I'm doing.

• 1:08:38Chamath Palihapitiya?

  Or actually just as a series A detached investor. So I don't know. I'm trying to take the time to figure it out. And my thought was if I raise a fund right now, I could barely stand the idea of me putting money to work right now of my own capital without any answers. But then the idea of like having a bunch of sovereign wealth funds and folks that were ready to work with us. I don't know. I just, I

• 1:09:00Jason Calacanis?

  Just to

• 1:09:01Chamath Palihapitiya?

  Not the right time.

• 1:09:02Jason Calacanis?

  Just to tell you my fundraising story. I am publicly raising Watch Fund 4. I get over $50 million in just, you know, high net worth individuals, you know, and family offices who are interested, immediately close, I don't know, 26, 27, 28 of it. And then I'm going to go out on the road to meet with LPs and Silicon Valley Bank blows up. Nobody can take a meeting that month, right? And so now thank the Lord, I said, I'm going to have a one year window to raise the fund. And I talked to some old school VCs, Fred Wilson, Bill Gurley, these people would take a year to raise a fund. It used to be, or I'm sorry, in the height of this bubble, you tell me a Saks, the quick issue closed one of the crafts funds, but I was hearing people saying they're closing funds within two or three months. I think we're back to it's a year

• 1:09:47Jason Calacanis?

  on the road to close a fund. What's your experience, Saxton? And you're an all-star. So I'm curious, the shortest to the reality.

• 1:09:55David Sacks?

  I think it's just depends on your situation, to be honest, but, but I, I think the important thing for founders to know is just that the way that late stage financing has dried up is very real. I'll give you like two data points just this week. So I got my first notification from a portfolio company. This is a company I invested in before Kraft. It's not a Kraft investment, but my personal investments and they're doing a pay to play round. You know what that is?

• 1:10:21Jason Calacanis?

  Explain what that is. That means pain.

• 1:10:23David Sacks?

  Yeah. Yeah. So basically the way it works is they say they're going to raise $20 million. Well, by the way, they said they went out to raise growth funding. Weren't able to get a term sheet from anybody.

• 1:10:35Jason Calacanis?

  No takers.

• 1:10:36David Sacks?

  No takers. And this is a good product. I mean, a lot of startups use this product. I think their ARR is in the 20 something million, maybe 30 something million. It's not like doubling year over year. It's growing like, let's call it 50% year over year. This is a company that should have been able to raise money. I don't understand why they weren't. Maybe because they're burning too much money. So instead of cutting costs the way they should, they're doing like a $20 million pay to play round. And what that means is that everybody is an investor in the company. You either have to do your prorated share of the 20 million or you get diluted 10 to one.

• 1:11:10Jason Calacanis?

  If you had 10% of the company, you have to put in $2 million or your 10% of the company is now 1%.

• 1:11:16David Sacks?

  No, it'd be more because you would look at, let's say 50% of the company is owned by the investors and the other 50% is common. Just to take round numbers.

• 1:11:26Jason Calacanis?

  Okay.

• 1:11:27David Sacks?

  If you own 10% of the company, that would actually be 20%.

• 1:11:29Jason Calacanis?

  Of the preferred. Yes. Yeah. The employees are not buying shares in this.

• 1:11:32David Sacks?

  20% of the, of the, of the 20 million.

• 1:11:35Jason Calacanis?

  So it's 4 million.

• 1:11:36David Sacks?

  4 million. Yeah, exactly. So basically you have to.

• 1:11:39Jason Calacanis?

  4 million or own 1%.

• 1:11:41David Sacks?

  Right, right. So basically it's almost like a capital call where you just have to pony up more money in order to preserve your ownership in the company.

• 1:11:49Chamath Palihapitiya?

  Pioner. By the way, if it makes you feel better.

• 1:11:51David Sacks?

  It is punitive, but yeah.

• 1:11:52Chamath Palihapitiya?

  Super punitive. I had one of those just happened to me as well. And I was just like, we'll put in the bare minimum because like the thing that it puts you in, it paints you in a corner where you're like, well, I've been with this thing for eight or nine years. Is this the moment to basically lose all of that compounding or value or work that you put in or seen their team do. And it's just a really tough position.

• 1:12:16Jason Calacanis?

  Right.

• 1:12:17David Sacks?

  So look, I'm not on the board, so I don't know what reasoning went into this, but what they should be sending out to all the shareholders is look, here are all of our metrics. Here's our burn, you know, here's the steps we took to reduce our burn. I don't really like the idea of having to do essentially a capital call from your existing investors when you haven't reduced your own burn. I mean, why can't the company operate at break even if you're at 30 something million of ARR? You should be able to operate. You may not want to operate at break even, but you should be able to.

• 1:12:46Chamath Palihapitiya?

  But Sacks, this is what I mean. I'll tell you after we stop taping who it was that. That told me this about their company, but they were basically able to let go a third of their workforce by moving a bunch of work to models.

• 1:12:59Jason Calacanis?

  And let me guess, the founders get to keep their shares or they get re-upped in this whole meshugana?

• 1:13:04Chamath Palihapitiya?

  No, no, no, but wait, hold on, can we, can I just finish the point?

• 1:13:06Jason Calacanis?

  Yeah, please, of course, sorry.

• 1:13:07Chamath Palihapitiya?

  So, so the point is like, if you can cut OpEx by a third by using all of these new AI, you know, models and GPTs and AutoGPTs, what are you as a board member or shareholder supposed to do? And also, as a founder, don't you have to go there first before you start to ask people for more money? And why aren't people doing that first much more aggressively? And so this is what doesn't make any sense to me.

• 1:13:32David Sacks?

  That's exactly my point is what steps were taken to cut costs before you just went to the investors to pony up more money? That's what I want to know. If they actually did that work and this is like the last money they need, okay, then, you know, I'll pony up my share.

• 1:13:46Chamath Palihapitiya?

  And by the way, we need investors to be, no, we don't. And we need investors to be much more aggressive in holding folks accountable because these examples need to be better discussed. Well, if XYZ company was able to do it, why aren't you able to do it? And if it's because we're not technically capable, nah, that's maybe a plausible answer, but even that reason will go away in a few months, I suspect. But if it's that we just have such institutional rot, we're incapable of doing it, well, then you might as well just not write the check because that company is going to get undercut by some new white sheet version of that business that doesn't have any of these impediments.

• 1:14:22Jason Calacanis?

  Management has told you, in a way, Chamath and Sacks, management has told you they're incapable of running this business, this concern in a, in a thoughtful way. I had this happen to us as well. And the, the question I have you, Sacks, is in these situations where this pay to play happens, you basically, everybody gets wiped out except for those who, who play. But the founders and the management team always seem to get re-upped and they're whole because the new investor doesn't want the management team not incentivized. So in these kinds of situations, it's kind of like the management team gets to reboot the cap table and they don't get penalized?

• 1:14:57David Sacks?

  I don't know. I, I actually, I don't, I don't have those details yet.

• 1:15:00Jason Calacanis?

  Yeah.

• 1:15:01David Sacks?

  Remember, I didn't lead a round. I was just an angel investor in the company. So I checked with one of the VC firms that led a round. And I'm like, are you going to do this? And they said, probably not, you know? And so like, the round might fail. I mean, they can make it as punitive as they want. But if the shareholders don't believe that the company has fixed its problems, they're not going to pony up the money.

• 1:15:24David Friedberg?

  Let's get free bourbon. Yeah, I think one of the problems that a lot of folks are facing is

• 1:15:31David Friedberg?

  it becomes less about the fundamental value of a business in a lot of these conversations, as you guys know. And it's becoming a lot more about who will fund the next round if the company is still burning money. And so you're making a social market bet, not a bet on the team or the business or the value. It's that there's someone else that's going to lead the next round. And this is fundamentally why. He's called the greater fool. That's called the greater fool theory. Look, I mean, historically, we wouldn't call him a fool if it's just about progress towards profitability. But right now, there's so much trepidation. It's almost like a self fulfilling prophecy that there's so much trepidation in doing late stage rounds that no one wants to be the last guy in. Because you're not sure if the next guy is going to be there to fund the last round to get to profitability.

• 1:16:16David Friedberg?

  And that's why half of biotechs that are public are trading below cash. Because historically, the way biotech companies, which is a really good point and example of this, they make progress to hit milestones. And then the next round of capital comes in, they make progress, hit milestones. Next round of capital comes in. And then eventually you get, you know, phase three approvals and you go sell the company or whatever. You get profitable and they almost always get acquired. And in the case of other technology companies, if the business has to do three or four things, it's got three or four milestones it has to hit. In your case, Saks, it might be that they got to get to 50 million ARR. And they got to get, you know, the certain cost function down in the business. And if they can do those two things, then the business profitable. But it's going to take us around a 20, we'll get the first chunk down.

• 1:17:00David Friedberg?

  And then another round of 30 to get the last chunk done. And no one knows if the next 30 is going to be there. And that's really where a lot of these market dynamics are falling apart. That there's historically been a model in the market of hit milestones, next round shows up. Hit milestones, next round shows up. And now no one knows if the next round will show up. So no one wants to fund this round. Particularly where there's high burn and it requires a lot of capital to make that bet. So the social, you know, the self fulfilling problem, the social market bet right now is, you know, it's self fulfills and we're, you know, we're sitting here kind of spinning our thumbs, wondering if the next guy's gonna fund it.

• 1:17:36Chamath Palihapitiya?

  Do you think that only 10 or 15% of companies have now properly reset value? Like you said, 70% of these unicorns are actually zombie coins?

• 1:17:47David Friedberg?

  Yeah, that's why I think the number from, I don't want to, I don't know Tiger's book at all, but when I hear numbers like 20% for a, for a fully invested mature book that invested during the, the peak of the cycle, it doesn't sound right that it's 20%. It sounds like it should be a lot lower.

• 1:18:04Jason Calacanis?

  I think that 20%, by the way, you know, comes after like two other smaller write downs, so they might be cumulatively at 30 or 40.

• 1:18:11David Friedberg?

  Yeah, so I don't want to talk about Tiger. I don't want to talk about Tiger. I think, like, the statistic of 70% of these public companies trading below their cash, that the cash that they've burnt, that they've raised in their lifetime, and again, just for anyone that's an analyst at home trying to figure out how we get to that number, you look at the retained earnings on the balance sheet, and so the cumulative retained earnings tells you, if it's negative, tells you how much money they've burnt over their lifetime, and that tells you effectively how much money has been invested. So when you look at the enterprise value, which is the market cap minus the cash they have today, you get their enterprise value. If their enterprise value is less than their cumulative retained earnings, it means that they're currently worth less than the money they've spent. And that's a statistic that is a fact right now in public markets, in technology gone

• 1:18:54David Friedberg?

  public in the last three years, and then you compare that to private markets, and I don't think we've seen a 70% write down yet, or, you know, 70% of these things being worth less than the cash. So it's, you know, it's still, yeah, I think you're right, Jamak, there's probably another hammer to drop.

• 1:19:11David Sacks?

  Multiple hammers.

• 1:19:12Jason Calacanis?

  Multiple hammers.

• 1:19:13David Sacks?

  Before we move on to a different topic, so I think one of the interesting differences in opinion in Silicon Valley is the way that founders and VCs see the nature of the relationship. And I've been on both sides of this. I've been on the side of being a founder, and I've been on the side of being a VC. What you'll see is that VCs always talk about it as a partnership. But a lot of founders will talk about it as if the money is just a commodity. And frankly, when everything is up and to the right and everything is going great and you're in a bull market and you can just keep raising money and definitely because there's always someone willing to lead the next round, then the money is a commodity. But when you're in a in a down market and all of a sudden

• 1:19:53David Sacks?

  there is no market, like you can't raise your next round, all of a sudden it is a partnership because you've got to go to your investors and ask them to do something that they may not otherwise want to do. If this was purely a transactional decision as opposed to a relationship, they might not want to fund your next round and you're asking them to say, no, actually, believe in our long-term relationship. And I think that, you know, this is the type of environment in which you find out it is more of a partnership.

• 1:20:21Jason Calacanis?

  And it should have always been. It should have always been.

• 1:20:23David Sacks?

  It should have been, but it but it wasn't. And look, I don't know what happened with that other company and all of a sudden I get a notification out of the blue. Well, I want to understand the thinking that went into that before, you know, I'm just gonna basically do this.

• 1:20:35Jason Calacanis?

  Well, this is where trust comes. This is where trust comes in, right? And like, I think in a zero interest rate environment, you know, there's no need for trust. You just there's cash splashing around. Just grab whoever the latest person in town is who wants to drop a couple of bags. You just take one of their bags and move on.

• 1:20:49David Sacks?

  The most important thing to me, like, well, making a partnership is for me to know that the founders have done everything in their power to reduce costs and put the company on the right trajectory before going out and basically issuing capital calls to the investors. I want to know they've done that work.

• 1:21:03Jason Calacanis?

  All right. Listen, Friedberg, I know you got to go. Take care, Sultan of Science. I'll just wrap up with the other boys here with one piece of breaking news. Stack Overflow says they will join the parade of data providers like Reddit and Twitter that will require permission and payment to use their data sets. And Stack Overflow has a lot of answers to a lot of developers' questions in there. I was just curious to get your thoughts. SEC obviously sent a Wells notice. We talked about this before to Brian Armstrong of Coinbase. He said he's thinking about or considering relocating out of the US if the regulatory clarity does not improve.

• 1:21:39Chamath Palihapitiya?

  Crypto is dead in America.

• 1:21:41Jason Calacanis?

  It is that in America.

• 1:21:42Chamath Palihapitiya?

  Crypto is that in America. I mean, now you had Gensler, you had Gensler even blaming the banking crisis on crypto. So they've, the, the United States authorities have firmly pointed their guns at crypto.

• 1:21:56Jason Calacanis?

  Is it a scapegoat or was it a fuck around, find out moment for crypto in your mind? Or a little bit of both?

• 1:22:04Chamath Palihapitiya?

  I, I don't know. I just think that they were probably the ones that were the most threatening to the establishment.

• 1:22:11Jason Calacanis?

  Okay.

• 1:22:11Chamath Palihapitiya?

  And they were the ones that, in fairness to the regulators, did push the boundaries more than any other sector of the startup economy.

• 1:22:20Chamath Palihapitiya?

  And yeah, so now they're paying the price for that. The bill has come due for them.

• 1:22:24Jason Calacanis?

  Saks, is it a fuck around, find out moment? Is it protecting the American dollar, somewhere in between?

• 1:22:31Jason Calacanis?

  Or incompetence on regulators' part?

• 1:22:33David Sacks?

  The more I think about it, the more I think it's probably not a coincidence that you're seeing all these concerns about de-dollarization at the same time they're cracking down on crypto. So, look, there were a bunch of crypto companies that might've done shady things, but I think we all agree that Coinbase was not one of them. Coinbase was the gold standard in terms of doing everything right, and they've just

• 1:22:52Chamath Palihapitiya?

  Agreed.

• 1:22:52David Sacks?

  asked over and over again for a regulatory framework. They're just like, tell us how to operate and we'll do it. So I think Jamath is right that they're effectively banning crypto in the United States. They're going to drive all these companies overseas, which is terrible for American innovation. I don't know exactly where blockchain and crypto are going to go from here, but I think that we should find that out in America. You know, we don't want that innovation going offshore.

• 1:23:17Chamath Palihapitiya?

  You bring up a really good point, too. It's just like Coinbase played by the rules, stood in line, tried to do the right things, it seems, at every step along the way, right? Everything from board composition to executive composition to

• 1:23:33Chamath Palihapitiya?

  How they tried to interact with the regulators, yet they were probably the furthest away from getting a license. The one that came the closest was the one that was the most fraudulent, which is FTX.

• 1:23:42Jason Calacanis?

  Yeah, fascinating.

• 1:23:44Chamath Palihapitiya?

  How is that even possible?

• 1:23:46Jason Calacanis?

  I mean,

• 1:23:47David Sacks?

  Because he, he had skills in gaming the system.

• 1:23:50Jason Calacanis?

  Yeah, he's splashy cashy, splashy cashy.

• 1:23:52David Sacks?

  Well, he, he ponied up large amounts of money because it wasn't his money. So it was easy for him to make huge donations, but he knew how to play the game. To quote SBF, he said, this is the dumb game we woke Westerners play. We say the right shit will ask so everyone likes us. That's the game he was playing, which is my, my whole concern about if we jump the gun on regulating AI too quickly, it'll turn into another, you know, woke game that everyone's gonna play. So.

• 1:24:19Jason Calacanis?

  Here's the, here's how the world works. Regulate yourself, behave yourself, act in the interest of consumers, or get regulated or smashed. And I think we've, we've gone over this, we talked about it in fact last week, whether the movie industry, crypto, AI, regulate yourself, behave properly, don't push the boundaries too far, you can bend the rules, but you don't want to break them.

• 1:24:41Chamath Palihapitiya?

  I think the regulate yourself, you use the MPAA, I don't think that's the right example. I think if you're going to regulate yourself, look at the tobacco industry. They tried to regulate themselves, but what they did was just lie to maximize profit in an area that was much less benign than movies and content. Maybe you could have some lascivious content in a movie or a video game or an album, but that was a lot less harmful than smoking, which not just impacted the smoker, but it turned out the secondhand smoker as well, or the secondhand smoker. So it touched everybody, right? You could be in a restaurant, not smoke, and yet.

• 1:25:18Jason Calacanis?

  Have years of your life taken.

• 1:25:20Chamath Palihapitiya?

  So I, I think that the self-regulation for areas that impact everybody, independent of whether you participate in the system or not, is where you have to look for good examples, Jason. And I'm not sure there are many good examples of stuff for allegation, those kinds of systems.

• 1:25:34Jason Calacanis?

  I mean, I like your workshopping it here. I mean, some restaurants would have a smoking section and a non-smoking section before there was regulation, right? And I think if crypto had just thought, had been more thoughtful about, hey, which tokens, NFT projects, we're going to support, which ones we're not going to. That maybe they would have avoided a little bit of this. I'm not sure. You know, it's hindsight's 2020 here, but a little more regulation.

• 1:25:57David Sacks?

  I don't think those smoking, non-smoking sections work too well. The smoke went all over the place.

• 1:26:01Jason Calacanis?

  It was. Do you remember, you remember coming out of a bar and you woke up the next day and your clothes smelt like smoke?

• 1:26:07Chamath Palihapitiya?

  No, no, you'd have to, you'd have to take a shower. When you went to a bar or a restaurant or a club, you would have to come home, take a shower because your hair and your clothes, the smell of smoke goes disgusting.

• 1:26:18Jason Calacanis?

  Then your bed had to get to change your sheets.

• 1:26:20Chamath Palihapitiya?

  Disgusting.

• 1:26:21David Sacks?

  Remember when you went on a, you went on a commercial flight, they had a smoking section and a non-smoking section?

• 1:26:26Jason Calacanis?

  Smoking section, non-smoking section, yeah.

• 1:26:27David Sacks?

  It's a tube. The smoke gets all over the place.

• 1:26:31Jason Calacanis?

  You know you're on the wrong airline when they have the welded shut ashtrays. They used to have an ashtray in every seat in the armrest was his cigarette.

• 1:26:42Chamath Palihapitiya?

  A friend of mine, this is like such a throwback, but a friend of mine, well-known guy that you know, I'll say the name, you can bleep it out.

• 1:26:49Jason Calacanis?

  Yeah.

• 1:26:49Chamath Palihapitiya?

  Nick, please bleep that out.

• 1:26:51Jason Calacanis?

  That out, please. Very important. We don't want to.

• 1:26:53Chamath Palihapitiya?

  Is a notorious smoker. And so I've flown with him.

• 1:26:56Jason Calacanis?

  That's the worst.

• 1:26:58Chamath Palihapitiya?

  And we get in there on his plane and then he shuts the door and I'm like, smells a little odd in here. It smells a little clovey.

• 1:27:08Chamath Palihapitiya?

  Seven hours. I'm going to have to be in this.

• 1:27:13Jason Calacanis?

  Do the pilots get hazard pay? I mean, how do you compensate them? I mean, this is not a turboprop he's on. He can't crack the window.

• 1:27:20Chamath Palihapitiya?

  No, uh, it was a global, a huge global. It was, it was brutal.

• 1:27:25Jason Calacanis?

  It has three cabins. You could go to the back cabin.

• 1:27:27Chamath Palihapitiya?

  Felt so sick. I mean.

• 1:27:29Jason Calacanis?

  It's the worst. It is the absolute worst.

• 1:27:32Chamath Palihapitiya?

  Worst. Smoking is the worst.

• 1:27:33Jason Calacanis?

  All right. Well, we didn't, so long to the Sultan of Silence, as Science rather there. Polling update here, Sacks. I don't mean to poke the bear. I know it was a rough week with the Fox News news.

• 1:27:45Chamath Palihapitiya?

  Bring it up. Bring it up.

• 1:27:48David Sacks?

  No, go for it.

• 1:27:49Jason Calacanis?

  Quick polling update between putting Ron, I'm sorry, DeSantis and Trump.

• 1:27:54Chamath Palihapitiya?

  Not going to happen. DeSantis is not happening.

• 1:27:56Jason Calacanis?

  In late March, news of Trump's indictment boosted him over DeSantis by 26 percentage points among Republicans and Republican independents. But earlier this week, the same poll showed that Trump's lead shrunk by 10 points in the last two weeks to just a 16-point advantage, which is still significant. But there's more, a University of New Hampshire Survey Center poll, I don't know if any of these polls are reasonable or not, sometimes I call people on the phone, I don't know who's got a landline. Released Wednesday showed a 20-point DeSantis deficit.

• 1:28:30Jason Calacanis?

  What's going on here, Sax? Did your boy, uh, peak too early?

• 1:28:34David Sacks?

  No, I don't think so. If you, if you look at the Republican primary field, DeSantis is the only person who's got a shot other than Trump. You look at Nikki Haley, she's polling in the 3, 4, 5% range, all the others are at 1 or 2%. There's not a candidate other than DeSantis that has over 5%. So in my view, this is a Trump-DeSantis race. Now, what you saw is that when Alvin Bragg pressed charges and indicted Trump, it created a lot of sympathy for Trump among Republicans. Effectively, what happened is Republicans registered their displeasure with Alvin Bragg by indicating support for Trump.

• 1:29:13Jason Calacanis?

  Let's go.

• 1:29:13David Sacks?

  And that's, that's what you'd expect to happen, and a lot of people speculated that might be the purpose of Bragg's prosecution is to make Trump the candidate. So, we knew that was happening, but I think this, this new poll that you just mentioned is really interesting because it shows that that sugar high of Trump's poll ratings was a temporary bounce, and it's coming down somewhat. And so, you know, what you saw actually is that this huge, uh, poll bounce that Trump got is somewhat normalizing. Now, there's no question that DeSantis is running behind Trump, and he's got his work cut out for him if he's gonna upset Trump as the nominee, but this thing is just getting started. I mean, DeSantis isn't even

• 1:29:55David Sacks?

  formally announced yet, and remember, we're still very, very early in this race. The primary battle that this most reminds me of would be Obama versus Hillary in 2007. And at this time in 2007, Hillary had a huge advantage over Obama. She was considered the favorite, she was considered the, the one who couldn't lose, and it was Obama that pulled off a huge upset. And he did it by out fundraising her, out hustling her, especially in building organization in some of those early primary states. And then he eventually created a narrative that it was time to turn the page. But he didn't do that until much later in the year, much closer to the, the primary.

• 1:30:38David Sacks?

  The first Republican primary here is not till February, so there's plenty of time here, and I, you know, we'll see what happens.

• 1:30:44Jason Calacanis?

  Tom, any thoughts?

• 1:30:45Chamath Palihapitiya?

  I think Nikki Haley is going to win the Republican nomination.

• 1:30:48Jason Calacanis?

  All right.

• 1:30:48Chamath Palihapitiya?

  The more people, here, here's the thing.

• 1:30:51Jason Calacanis?

  Still trying to make Haley happen.

• 1:30:52Chamath Palihapitiya?

  The number of people that have told me the most impressive moment with DeSantis was before they met him. The second most impressive moment was their first meeting. And then it just falls off a cliff where he becomes more and more unimpressive, the more and more time you spend with this guy.

• 1:31:09Jason Calacanis?

  Hey Nikki Haley, come on the pod.

• 1:31:11Chamath Palihapitiya?

  Nikki Haley is the opposite.

• 1:31:13David Sacks?

  Nikki Haley announced that in all of Q1, in all of Q1, she raised $5 million. Extremely unimpressive. You're probably 20% of that, Chamath.

• 1:31:22Jason Calacanis?

  Hey Nikki Haley, come on the pod, we'll double it.

• 1:31:24David Sacks?

  How much of Nikki Haley's $5 million was, was you?

• 1:31:28Jason Calacanis?

  Listen.

• 1:31:30Jason Calacanis?

  I can say definitively, you said Q1, zero.

• 1:31:33David Sacks?

  Yeah, Q1, okay.

• 1:31:34Jason Calacanis?

  Here we go.

• 1:31:35Chamath Palihapitiya?

  Zero.

• 1:31:35Jason Calacanis?

  Well, let me ask a question here, because I, I'm not informed on it, but you, you're a master strategist here, 1600 rated chess player sacks.

• 1:31:46David Sacks?

  That's not that good.

• 1:31:48Jason Calacanis?

  Well, I mean, it's double 800 where I'm at, and you're killing me in 27 moves on average. DeSantis is fighting with Disney over and over again. He's getting a little involved in the LGGPTQ, everything, and he, he just seems to be getting involved in the culture wars. Is that like a primary strategy and then he moves to the center when he comes to the general or, and do you agree with this general fighting with Disney and the culture war stuff?

• 1:32:17David Sacks?

  Well.

• 1:32:17Jason Calacanis?

  Strategically, I'm just talking strategically, not your personal opinion on these issues. I know that you're a very tolerant person.

• 1:32:22David Sacks?

  Yeah. So I think this is an issue that works for him, certainly in the Republican primary, but I also think it's going to work for him in the general. And you have to remember that this bill that they're fighting over was a parental rights bill that basically it gave parents the right to know what their kids were being taught in schools, and it basically prohibited the teaching of this sort of gender ideology in, in schools. And I think most parents are on board with that. Now.

• 1:32:48Jason Calacanis?

  Yeah.

• 1:32:49David Sacks?

  He didn't go, look, he didn't go, yeah, he didn't go looking to pick a fight with Disney. Disney then got involved and took the side that calling this a don't say gay bill, which I think just factually is not true. The bill doesn't mention.

• 1:33:02David Sacks?

  You know, gay or homosexuality or anything like that. It was really about this trans issue. And Disney got involved and this was Bob Chapek and Bob Chapek lost his job and Iger came in and Iger has said that he, he had basically lectured the Disney employees saying that we need to stay out of politics and we need to respect our audience's views. So I think that it was Disney who kind of interfered. I think this is overall played to DeSantis's benefit. And, and look, the problem for Disney, they may win the battle over this or that tax benefit that they're fighting over, but they've lost the war over this issue because parents used to be able to trust that they could just pop their kid down in front of a Disney movie or a Disney show,

• 1:33:44David Sacks?

  like Disney was like the babysitter and they just 100% absolutely trusted all Disney content. And if you look at polling now, Disney's brand, it used to have like a NPS of like in the 50s, is now in the single digits because let's call it half the country's parents, the more Republican ones, don't fully trust Disney's content and programming anymore.

• 1:34:05Jason Calacanis?

  Really?

• 1:34:06David Sacks?

  That is a huge, yeah.

• 1:34:07Jason Calacanis?

  I trust Disney implicitly. What could they ever do that's objectionable? I've never seen anything objectionable.

• 1:34:13David Sacks?

  A lot of parents are questioning what content Disney might be putting in their, their recent programming. Obviously, we're not talking about the stuff that we grew up on. So, look, whether you believe that is a problem or not, what I'm saying is this has been a brand disaster for Disney getting involved with DeSantis this way. They should really, I think, just try to patch this thing up. I don't understand the benefit for Disney.

• 1:34:36Jason Calacanis?

  It's a bad look for both. It's a bad look for both people. Yeah.

• 1:34:39David Sacks?

  Well, I, I think, I understand the benefit for DeSantis. I don't understand the benefit for Disney. If I were them, I'd be trying to patch this up.

• 1:34:46Jason Calacanis?

  I, I think there is a really valid discussion to be had about representation in movies and all that stuff, and I'm, I'm very pro that.

• 1:34:55Jason Calacanis?

  The thing I think all parents agree is we should just at least know what's being taught to our kids and we can have a thoughtful discussion about it. There seems to be some small group of people that thinks we should hide from parents what they're actually getting, what's being taught. And I find that's very strange. I think just a little bit of like transparency and what's being taught in schools is an obvious thing that nobody should be disagreeing on it.

• 1:35:20Chamath Palihapitiya?

  To Sax's point, I think it was Pew that put out a study recently. It is the most polarizing issue amongst Americans where Democrats and Republicans are literally on opposite sides of the spectrum.

• 1:35:32Jason Calacanis?

  Well, this is going to be a big issue.

• 1:35:33Chamath Palihapitiya?

  On the whole trans issue. Now, despite the polarization, in terms of the quantity of the number of people, it's actually an important issue for a small percentage of both sides. So it's a highly complicated political dynamic in America.

• 1:35:47Jason Calacanis?

  Yeah, very.

• 1:35:48Chamath Palihapitiya?

  So this is where DeSantis clearly has taken the approach that not only is this important to the base to win the nomination, but it's going to scale into the general. And it could very well be, but it's a very divisive issue.

• 1:36:00Jason Calacanis?

  Yeah, I wish people were given a little bit more consideration and maybe they could have, I feel like maybe we're covering this issue too much. You know, I've heard some other folks in the community saying like, maybe people could be given a little bit of their privacy and to handle these things.

• 1:36:18David Sacks?

  I think you're right, Jake, how in this sense, I think this issue has become a lightning rod. And whenever you have a lightning rod issue, the amount of attention paid to it, it seems disproportionate to the attention on that issue. However, I would say that this is a lightning rod for a larger issue, which is the quality of education in this country, which I think is shockingly bad. And it's bad because of the decline of standards. They're getting rid of advanced math, they're getting rid of grades.

• 1:36:47Jason Calacanis?

  Unions, choice.

• 1:36:48David Sacks?

  Test taking.

• 1:36:49Jason Calacanis?

  Competition.

• 1:36:50David Sacks?

  Exactly. And the schools are run by these unions who are managing it for their own benefit, not for the benefit of the students. And look, there is a significant ideological component that's crept into these schools as well. So, look, I think that overall, I think that when you get into the general. You have to up level the issue and talk about it in broader terms that every kid in our country deserves a high quality, non ideological education. I think if you can do that, you will get 70, 80% of the public on your side on this issue.

• 1:37:19Jason Calacanis?

  Yeah, I feel like, yeah, I think that's right. I think we can all agree on that. Democrats, Republicans, everybody in between. If you're a parent, you're not looking for an ideological battle at school. You're looking for math, science, technology, history, creativity. You know, there's a whole bunch of other things that we should be really focused on. All right, listen, this has been another amazing episode of the All In Podcast. To people going to the episode 125 meetups, you can type in All In Meetups. Our team over there, we have super fans, are doing it in over 50 cities the day this comes out. So you may miss it, but you can sign up for the next one. I'll be phoning in and zooming into them. So for the fans, you crazy lunatics getting together, have a great time. Have

• 1:38:00Jason Calacanis?

  a great time and tweet it and at mention us on Twitter. For the Sultan of Science, the Rain Man, the dictator, I am the world's greatest moderator. We'll see you next time. Bye bye. Bye bye.

• 1:38:12David Sacks?

  We'll let your winners ride.

• 1:38:16Jason Calacanis?

  Rain Man David Sacks.

• 1:38:18David Sacks?

  And instead, we open source it to the fans and they've just gone crazy with it.

• 1:38:24Jason Calacanis?

  Love you, S. The Queen of Kinwa.

• 1:38:27David Sacks?

  We'll let your winners ride. We'll let your winners ride.

• 1:38:33Jason Calacanis?

  Besties are back.

• 1:38:35David Friedberg?

  That's my dog taking a notice in your driveway. Oh, man. My aviator will meet me at one.

• 1:38:43Chamath Palihapitiya?

  We should all just get a room and just have one big U. Georgie because they're all just, it's like this like sexual tension that we just need to release somehow.

• 1:38:50David Sacks?

  What? You're the beef. What? You're beef. What? We need to get merch. Besties are back.

• 1:38:58Chamath Palihapitiya?

  I'm going all in.