E143: Nvidia smashes earnings, Arm walks the plank, M&A market, Vivek dominates GOP debate & more

(0:00) Bestie intros: Friedberg's interview with NASA Astronaut Woody Hoburg, live from the ISS! (2:58) All-In Tequila update (10:04) Nvidia smashes earnings, GPU market outlook (37:39) Arm files for IPO: positive sign or plank walk? Plus: State of the IPO market (49:51) Sacks on current investable metrics right now in VC (55:33) GOP Debate breakdown: Vivek's statement, DeSantis's strategy, Haley & Christie solidify positions (1:39:46) Vivek's comments on the Climate Agenda (1:47:07) Prigozhin crash 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/friedberg/status/1694506279954526487 https://twitter.com/DavidSacks/status/1693441068036169785 https://twitter.com/chamath/status/1693524941721731189 https://www.wine.com/product/21-seeds-tequila-trio/633617 https://www.villadeste.com https://www.google.com/finance/quote/NVDA:NASDAQ https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2024 https://companiesmarketcap.com https://twitter.com/chamath/status/1694457666289225776 https://electrek.co/2023/06/21/tesla-dojo-supercomputer-is-finally-coming-next-month https://prospect.org/features/great-telecom-implosion https://www.statista.com/chart/6780/only-5-countries-have-a-bigger-gdp-than-california https://twitter.com/OpenAI/status/1694062483462594959 https://openai.com/blog/gpt-3-5-turbo-fine-tuning-and-api-updates https://twitter.com/nathanbenaich/status/1694073194351648932 https://commoncrawl.org/about/team https://adsense.googleblog.com/2005/10/spotlight-on-weblogs-inc.html https://twitter.com/twistartups/status/1694399138194952363 https://www.sec.gov/Archives/edgar/data/1973239/000119312523216983/d393891df1.htm https://www.theverge.com/2023/7/13/23793969/adobe-figma-merger-acquisition-uk-cma-regulator-investigation https://venturebeat.com/games/microsoft-signs-15-year-cloud-streaming-deal-with-ubisoft-in-latest-bid-to-win-activision-blizzard-approval https://www.stonealgo.com https://youtu.be/f51Yd9h9ZXo https://www.natesilver.net/p/ramaswamy-and-the-physics-of-multi https://www.cnn.com/2023/08/04/politics/cnn-poll-ukraine/index.html https://www.mediaite.com/politics/whopping-ninety-six-percent-oppose-supporting-ukraine-against-russia-in-turning-points-action-straw-poll

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

• 0:00Jason Calacanis?

  Sultan of science, what's what's going on? Are you still riding high after your big NASA Zoom interview? Your space station Zoom interview?

• 0:06David Friedberg?

  That was really fun. Shout out to Woody Hoburg from the International Space Station astronaut, Cal alumni. Woody listens to the pod on the ISS while he works out, the astronauts work out. He said two hours and fifteen minutes every day to, you know, obviously your body can atrophy. You gotta work out a lot. And he's like, when he's working out, he listens to old episodes of the All In Pod. A buddy of his put him onto it. He's become a big fan. Right on. Shout out to Woody. Yeah, I got a DM from NASA astronauts. I thought it was like some sort of scam or something. I clicked on it because I follow NASA astronauts. They DM me and I'm like, what?

• 0:39Jason Calacanis?

  Obviously.

• 0:40David Friedberg?

  This astronaut wants to chat? That's so crazy. I looked the guy up, seems legit. He's following me on Twitter. So we did a Zoom call yesterday and I put it on Twitter. The call I did with him is really fun. Honestly, like a thrill for me. An amazing individual. This guy got his PhD at Cal in computer science. Did a thesis on convex optimization applied to aerospace engineering, became a professor at MIT for three years and applied to the astronaut program and got in. Fast forward 2023 in March, he is the pilot of the Crew Six mission, the SpaceX Crew Six mission to the ISS. And he's been on the ISS since March and he's coming back in a couple of days.

• 1:22David Friedberg?

  An incredible individual, amazing story. It was super fun to chat with him.

• 1:26Jason Calacanis?

  I don't think I've ever seen you smile or be more excited about anything. You look absolutely ecstatic.

• 1:34David Friedberg?

  Oh, it was amazing.

• 1:35Jason Calacanis?

  Did he have any comments on Uranus? Any thoughts on Uranus or no?

• 1:40David Friedberg?

  We didn't get there.

• 1:41Jason Calacanis?

  You didn't get to Uranus?

• 1:42David Sacks?

  Take out, you blew that. Let's try that again.

• 1:46David Sacks?

  Let me take a shot at this. Friedberg. So did he talk about going to the moon?

• 1:49David Friedberg?

  Yeah, he's actually on the Artemis mission.

• 1:51David Sacks?

  And what about Uranus?

• 1:53Jason Calacanis?

  Well done, well done.

• 1:55David Friedberg?

  We didn't get that far. We didn't get that far. It was a first date. It was only 20 minutes, guys.

• 2:00Jason Calacanis?

  Oh, it was a first date in 20 minutes? Did he go for Uranus? Hey. Hey.

• 2:05Chamath Palihapitiya?

  I hear that we're trying to actually land on the south side of the moon, the dark side of the moon.

• 2:11David Friedberg?

  Yeah, so he's actually on that.

• 2:13Chamath Palihapitiya?

  So would he have an opinion on the dark side of the moon? Or, I don't know, the dark side of Uranus?

• 2:23David Friedberg?

  Three for three, or three for three, everybody.

• 2:45Jason Calacanis?

  I just want to explain. Somebody was like, why are you bullying Jake out? Why are you bullying Friedberg? Trumats bullying this person?

• 2:50Chamath Palihapitiya?

  He loves the attention.

• 2:51Jason Calacanis?

  Our love language is breaking chops. That's it. We like to laugh and take the piss out because everybody takes themselves too seriously. And then what's going on with the tequila? Are you guys serious about this?

• 3:02David Friedberg?

  No, don't talk about that right now.

• 3:03Jason Calacanis?

  I'm getting 50 emails a day with people about tequila. All right, enough with that. We'll talk about it later.

• 3:09David Sacks?

  I did run a poll asking people if they were trying all-in tequila, and the poll narrowly won.

• 3:14Jason Calacanis?

  Okay.

• 3:14Chamath Palihapitiya?

  And then I ran a poll asking what the most they'd ever spent on a bottle was. If you price it around 200 bucks, you can really maximize demand. I think the demand maximizing function is probably around $180, $190 a bottle.

• 3:28David Friedberg?

  You do not need a majority of people to want to buy your tequila. You just need enough that are willing to pay the right price.

• 3:34David Sacks?

  No, I agree. I was just trying to see how much interest it'd be out there. And in this poll, I think it was 41% said they would try it, 40% said they wouldn't. And then the remainder was just kind of, you know, show me the answer.

• 3:46Jason Calacanis?

  I think if we don't have advertising ever, but we have a nice sipping tequila. Because, you know, I don't drink a lot, but I do like when Sacks gives me a nice bourbon.

• 3:56Chamath Palihapitiya?

  Guys, 32,000 votes. So if you look at 18.8%, so it's 79% is 200 or less. That's the sum of both of those two cohorts. So like, if you priced it at, call it 189, you probably can get 15%. And so, you know, you could probably sell several hundred thousand bottles a year. I mean, that's like a pretty real business. Okay, but I need something smooth and I like it a little sweet. Is that a problem? Can I just give you my opinion? I think the thing that people get wrong, just as a consumer, and I think like I'm a pretty discerning consumer. The thing that I don't like is that people focus on all of this window dressing and they don't focus on the core.

• 4:42Chamath Palihapitiya?

  And the core is that, for example, in wine, there's seven or eight rating systems. And over time, if you buy enough wine and taste enough wine, you can really figure out who's good at what. And there's just nothing that replaces a highly rated wine. It's exceptional. And that kind of discernment is now moving itself into tequila. And so I would just encourage us, if we're going to make a bottle, just make it an exceptionally good tasting bottle. And one of the things that I saw in the comments was that people said, oh, you can't differentiate. But then I see some other articles like Komos, which is the one that I tasted at the one and only Mandarinina. That was the first hundred point tequila that had ever been given out.

• 5:27Chamath Palihapitiya?

  And so there are people that are starting to rate it and create these rankings. And if we were going to put out a product, I would err on extreme product quality versus price point.

• 5:38David Friedberg?

  I invested in a tequila company, I shared this with you guys, called Twenty One Seeds. It was started by my friends Nicole, Kat and Sarika. And they spent a lot of time in Mexico, finding the right producer and they put fresh fruit. It's a, it's a female niche tequila. So the goal is to create a tequila that will appeal to the female demographic. And they spent quite a lot of time trying to figure out how to actually get the flavor of fresh fruit without using artificial flavoring into the tequila. And so there was this big investment in trying to get this thing to work. This thing worked, it took off and Diageo bought the company. But it was because they spent so much time on the quality of the product that I think they were successful. And that's, everyone else puts their name and label on a, on a bottle of tequila and says, hey, this is my tequila.

• 6:23David Friedberg?

  But if you don't get the quality right, Chamath is totally right. People don't buy a second time, you gotta get it right.

• 6:27Chamath Palihapitiya?

  If you look at what The Rock did, The Rock went in a different direction, which is I think he has a very accessible and affordable tequila, which I think makes sense as well. It's just a different strategy and that also works for The Rock because he has almost 400 million followers. And so. He can really play a volume game, but I don't think that that's what we should ever do.

• 6:47David Sacks?

  No, we should stand for exceptional quality.

• 6:48Chamath Palihapitiya?

  Exceptional quality. And this speaks to something else, which is one of the biggest points of feedback that I get. So for example, I took three days, Matt and I took three days, we took a little bit of a, our own little honeymoon away from all the kids and we went to Villa Desti, just to kind of hang out in Lake Como because I was flying out of Milan and ran into a few people there. And the consistent feedback that I get from those folks is like, they love hearing about these different places, whether it's different brands, different kinds of wine, all of these things, because all these folks are a little bit left out in the cold now. They don't have like, how to live life well. And if you work really hard and you're lucky enough

• 7:31Chamath Palihapitiya?

  to then also have some amount of success, why should you feel ashamed about it? Why shouldn't you be allowed to enjoy that and actually like pamper yourself and celebrate yourself? And I say, go for it. So if we can find high quality products, like this is the thing, for example, like, I think there's different ways of expressing success. When I was poor, I was poor in wallet and I was also poor in mind. And then somewhere along the way, I actually became rich in wallet, but I was still poor in mind. And so I would wear these clothes that were gaudy and had these huge labels. You look terrible, Macy's. Dior and Balenciaga, all this crap. Don't pull it up, man. The haircut looked like Friedberg's. It was disgusting. It was gross.

• 8:15Chamath Palihapitiya?

  And then I learned how to be rich in wallet and rich in mind, which is then you go totally brand off and you can actually find things that are just like really well tailored, well made. They can be almost generational pieces of clothing or whatever. And I think that it's great that you can find these things and tell other people because you find that there's a latent so many number of people that want that. So at Villa Desti as an example, that is probably the Harvard of hospitality. I've never been to a hotel that is more on point anywhere in the world than that one place. Incredible, incredible ways in which I call the waiters. Say the name of it again, one more time? Villa Desti, Villa D apostrophe E S T E on Lake Como. I'll give you one simple example. Matt and I were like talking about this one kind of olive oil.

• 9:01Chamath Palihapitiya?

  And the waiter at the other table heard. He went to the kitchen, brought back, and he said, here, I heard, I just overheard, I apologize. But and I thought, this is incredible. You feel so pampered and loved and taken care of. The level of service and quality there was incredible. And I think that there are so many examples of this, where if you can have elements of adding in life, you should do it. By the way, there's a very high chance that this is where I take all of you guys for the All In Summit in 2025.

• 9:29Jason Calacanis?

  Okay.

• 9:30Chamath Palihapitiya?

  I'm still figuring out all the details.

• 9:31Jason Calacanis?

  I'm picking 2024.

• 9:32Chamath Palihapitiya?

  But my point is whether it's Laura Piana, which is, in my opinion, the top of the top in terms of brand off, really high quality shows.

• 9:41Jason Calacanis?

  Look at that place.

• 9:42Chamath Palihapitiya?

  The point is, like, there's all these brands that exist that take enormous amounts of time to exemplify craftsmanship and care. And I think that it's appropriate for people who can participate in those experiences to be able to have them and not feel ashamed and actually like enjoy it and celebrate themselves and do it. So let's go. High quality stuff. Not shitty, big label tacky crap.

• 10:04Jason Calacanis?

  Okay, Nvidia has smashed their earnings. Massive interest coming into this earnings report, obviously, because we've been talking about Nvidia. They've had a massive run up. Everybody is trying to buy capacity to run language models, et cetera, self-driving, yada, yada. And it's not just the Googles and Amazons of the world. You have startups trying to buy H100s, A100s and buy this infrastructure. You also have sovereign wealth funds and countries buying these in the Middle East, in Europe, and you have traditional corporations buying them. This is the blowout of all blowouts in terms of performance. Q2 revenue, 13.5 billion, up 101% year over year. That's extraordinary on that large of a number, but up 88% quarter over quarter. High growth in stocks is 20, 30% year over year.

• 10:49Jason Calacanis?

  So this is, yeah, just very uncommon, obviously. Q2 net income, $6 billion, up 843% year over year. Nvidia is now with 1.2 trillion. It's closing in on Amazon, 1.4 trillion, and Google at 1.7 trillion dollars in terms of market cap. And here's the kicker. They're printing up so much money, and so much profits, rather, that the Nvidia board is approving a $25 billion share buyback. That's a very large number in terms of share buybacks. That's six times higher than what they were currently allotted. Yeah. I guess, Chamath, when you see this kind of extraordinary run up. What is the ramification going to be in terms of for the industry, competition, and then just trading this name?

• 11:34Jason Calacanis?

  Is this peak Nvidia or is the peak yet to come?

• 11:37Chamath Palihapitiya?

  Well, I think it's peak in one way, but this is less about a commentary on Nvidia because they're clearly firing on all cylinders. But, you know, it's a pretty well-established rule in capitalism, which is when the market observes that there's a company just printing enormous revenues and profits, they want to compete with them naturally to get their share of those revenues and profits. And that typically happens in all markets and the result of that are just decaying margins. In the, in the absence of a monopoly, this is what you should expect. And so because in this market, there's nothing really monopolistic about what they do. What they do is exceptional and good, but there are other ways and other systems and other companies that are developing chipsets and capabilities here to compete with Nvidia.

• 12:18Chamath Palihapitiya?

  So it probably just motivates them even more and accelerates the path where you see competition. I tweeted this out yesterday, but one of the most interesting things that could happen is somebody like Tesla decides to either open source their chip or actually starts to sell their platform because if FSD gets to a reasonable level of scale, that entire platform system is a learning and inference system for the physical world. And I think that has tremendous applications. You have something called RISC-V, which is an open architecture spec to essentially compete and create different versions of different chips that has implications more, I think, to ARM. You have companies like Google that, you know, frankly spun their own silicon a long time ago, TPU. You have Amazon now talking about doing the same thing. Microsoft has invested a lot of money in FPGA technology.

• 13:02Chamath Palihapitiya?

  So it's just yet another accelerant in this trend to create many forms of AI-enabled silicon. And so I think that that sort of, it pulls that reality forward and I just think we're going to have to figure out when the market prices that in because I think that that probably decays the Nvidia margin and upside over time. Again, that is not a commentary on them, that's just a market reality.

• 13:28Jason Calacanis?

  Yeah, margins get competed away. For folks who don't know, Tesla is making something called Dojo. It's their own supercomputer. Here's a picture of it. They showed that at Tesla AI Day last year. And you have ARM's open source competitor is the RISC-V chip you're talking about. It's an open source architecture for doing large jobs. And so I guess my question to you, Friedberg, is if you look at all this capacity coming online, do you think we're going to be in a situation where the amount of capacity, compute being put online, is going to outstrip the need for that compute because software is getting so much better? And then maybe, you know, people are running hugging face jobs and various LMs on the new silicon from Apple and they're running it on their M2s.

• 14:13Jason Calacanis?

  And so do we need this much capacity? Are there enough interesting jobs in the world for all this capacity? And then might that also be a headwind against Nvidia when people say, you know what? I got enough. I got enough capacity here.

• 14:25David Friedberg?

  I think the rational way to think about this is to try and calculate the efficient frontier on compute use. So the more compute you use, the more it costs you. The question then is if you double the amount of compute you're using for a particular application, do you get twice the return on the investment? If you triple it, does your ROI on a percentage basis, you know, go up or go down? So at some point, you reach an efficient frontier, which is you start to see a declining or negative rate of return on the investment in the compute that you're using for a particular application. And this is certainly going to be application and market specific.

• 15:08David Friedberg?

  It's going to be largely driven by the data that is available in that market to do training, to do tuning, the market's appetite to spend money for that particular set of applications that emerges from that compute that's being used. And so we don't know today where the efficient frontier is across each of these different markets and sets of applications. And the market is finding that out. In the process of finding that out, everyone is spending a shit ton of money on compute. And they are trying to get as many server racks as they can. They are trying to get as many chipsets as they can. They're trying to get as much server time as they can. And everyone's got this idea that the more compute I can throw at a problem.

• 15:50David Friedberg?

  The return is going to scale linearly and it turns out that like with most things, the answer is likely not. So we're at this point right now in, I would argue, a bit of a cycle that there looks to be a bubble. And what I mean by that is that there's a lot of inefficient spending going on as the efficient frontiers are discovered across all these different application sets. And so my intuition, without a lot of actual data to back this up, is that based just anecdotally on what I'm hearing people doing in the market, what companies are doing, what startups are doing, et cetera. Everyone is throwing everything they can at compute and they're going to realize that they're going to need to rationalize those expenses at some time, at some point.

• 16:31David Friedberg?

  So I would, I would envision Nvidia is probably riding, writing a little bit of a discovery of the efficient frontier wave right now and that this probably is not necessarily steady state.

• 16:42Jason Calacanis?

  Sax, we experienced this before, as you remember from the dot com era. There was a massive investment, very similar to this, in fiber and the overspending of building the fiber infrastructure so everybody could get broadband and they could stream movies, et cetera, happened in that 97 to 2002 time period. A lot of those companies went out of business. A lot of that fiber never got used. People were working on compression algorithms while they were building on massive fiber and a lot of that fiber got sold. I think Google bought up a lot of it, other people bought it up. And it was just a massive overspend. So is this like the dark fiber of this era where we're just going to build so much capacity that there's just going to be not enough jobs to run on it in your mind?

• 17:25David Sacks?

  Well, I think it's a little different than fiber in the sense that every year there's going to be a new generation of chips. And so these cloud providers who are providing GPU compute, they're going to want to keep upgrading the chips to be able to address the next generation of applications. So I don't think it's quite as static as fiber where you kind of build it once. And you're right that there was kind of a glut of capacity was created. Eventually, though, the internet usage grew into that capacity. But I think this is a little different because again, you're going to need to upgrade the chips every year or two. I think Friedberg is right that this is clearly a spike in demand that may not be sustainable. I mean, recall, what happened here is that ChatGPT

• 18:06David Sacks?

  launched on November 30th last year and really caught everyone by surprise. It kind of took the world by storm. And over the next few months, you had hundreds of millions of users discover AI. I think it surprised even the OpenAI team. I think when they launched ChatGPT, they thought it would be more of a proof of concept, but it ended up being a lot more than that. And so everyone has scrambled all of a sudden in the last nine months or so to develop their own AI strategy. And so, again, it was this giant platform shift that happened overnight. So there is a tremendous GPU shortage right now. And that's also what's leading to these almost software-like profit margins by Nvidia. Because when everyone's

• 18:49David Sacks?

  clamoring to get a limited supply of these chips, and there just aren't enough, Nvidia can almost charge whatever they want. And so I think even more than the demand, the profit margins might not be sustainable. But I think the reality is, we just don't know what the steady state of demand in this market's going to be. I think we can say that it can't continue at these growth rates, but probably there will be some steady state of demand that's, you know, probably is at least where we are today.

• 19:19Jason Calacanis?

  Yeah, I don't think it's perfectly analogous, Chamath, but just to to to bring up some historical context, check out this article I was reading the other day. The dimensions of the collapse of the telecommunications industry, this is August 2022, and it says, the dimension of the collapse in the telecommunications industry during the past two years has have been staggering. Half a million people have lost their jobs. In that time, the Dow Jones Communication Technology Index has dropped 86%, the Wireless Communication Index 89%. These are declines in value worthy of comparison to the Great Crash of 1929. Out of the 7 trillion decline in the stock market since its peak, about 2 trillion have disappeared in the capitalization of telecom companies. 23 telecom companies have gone bankrupt in a wave capped off by the July 21st collapse of WorldCom, the single largest bankruptcy

• 20:02Jason Calacanis?

  in American history. So just a little history there of this. It's not perfectly analogous. Obviously, Nvidia is not going bankrupt or anything like that, but this overcapacity issue is definitely going to be something. But you had mentioned that in one of your tweet storms in the past couple of weeks, or these long form that you're doing on X, previously known as Twitter. You mentioned that what are the jobs that could be pushed to this compute? And what if one of them works? I think you were doing a speaking that somebody tweeted out a little clip of. So let's unpack that. What do you think are some jobs that people might push here that we don't anticipate? That could solve something miraculous in the world?

• 20:40Chamath Palihapitiya?

  Well, yeah, the framing is really like if you if you go back to like the the gold rush of the 1800s in San Francisco, the people that made the money were the platform enablers, right? They were the ones that sold the picks, the shovels, the pans and the jeans. Right? And that's where that's where Levi Strauss was born. The the equivalent analogy, the equivalence in that analogy today is Nvidia, because they are the dominant pick and shovel provider. So the question is, well, what are we going to use these picks and shovels to create? Are we going to find gold? And I think the question is unclear. And where will that gold be found? Will it be found inside of a big tech company? Or will it be found inside of a startup? If you look inside of where these resources are being used inside of big tech,

• 21:23Chamath Palihapitiya?

  it is to completely scorch the earth on the economic value of large models. And I think that that's very, very good for all of the startups that come after it. So what do I mean by this? You know, we were all so wrapped around the axle around chat GPT and then GPT in general. And now, you know, if you look at the quality of Llama, Llama 2, basically, these big companies have decided, no, we're just going to make all these models extremely good, extremely useful and very, very free. And so a lot of the resources are going there to subsidize, economically subsidize, and by implication, economically destroy the value of that category. That's going to be good for startups.

• 22:09Chamath Palihapitiya?

  And so the question is, what will you then build on top of these quasi-free, almost-free tools? And so one area that I have been looking at for a while is in computational biology. I think that that clip that you're talking about was just me talking with Warren Zeev.

• 22:26Chamath Palihapitiya?

  Just around the ability to compute large, complex spaces with very sparse information. It's a very difficult task today, but tomorrow in an AI model that you can train, you can literally characterize every single molecular permutation you could imagine. You combine it with something like AlphaFold and you can understand protein folding and all of a sudden you can sequentially start to put tools together that could theoretically give you much higher probability guessing for specific compounds that could actually cure disease. A different version of that is a company that myself and a few other people started, I tweeted that out, which is more in the material science space. And we've had some pretty important breakthroughs there, which is really about trying to invent

• 23:09Chamath Palihapitiya?

  next generation battery materials. And we have one candidate that could be pretty revolutionary if it turns out to work. We don't know yet. Some positive signs. So there are some of these green shoots. So my perspective is that a lot of the money that Nvidia makes today is going to be money well spent because it'll be going to the big guys, big tech plus Tesla. They are then going to create some really foundational platform technologies with it, whether it's Dojo, whether it's FSD, whether it's the full platform inside of Tesla that is the cameras plus the inference plus the training for all forms of physical world interaction, whether it's Llama 2.

• 23:51Chamath Palihapitiya?

  And all of that stuff will be given away essentially, I think, open source, quasi-free to the ecosystem over the next few years. And I think that'll be a really important moment, which will create hundreds of new companies doing really clever, cool things. So we haven't yet seen the big breakout company yet. And so I think that right now, most of this capex is going to the big guys. But the dividends of all the work that these big guys are doing will be Seen over the next few years in the startups that get started in the next four or five years.

• 24:25Jason Calacanis?

  I love the California analogy. Ultimately, what all that prospecting for gold did was create the state of California, putting aside the Levi's and the jeans. And if you know anything about California's GDP, it would be, yeah, I think these statistics are always talked about fifth, 10th, eighth largest. It has a bigger GDP California than some of the largest countries in the world. So this is a 2015 chart. It's hard to find the updated information on this, but ultimately that was the product of the gold rush is this incredible state. Any other thoughts on Nvidia before we move on to ARM?

• 24:59David Sacks?

  I think OpenAI had a potentially significant product announcement that's related to this. So they just launched fine tuning for ChatGPT, actually version 3.5 Turbo. Says here, fine tuning lets you train the model on your company's data and run it at scale. Early tests have shown that fine tuned GPT 3.5 can match or exceed GPT 4 on narrow tasks. So you can do things like fine tune the formatting of the output. You can fine tune the tone. Fine tuning also allows businesses to make the model follow instructions better. So I think the point of this is that we're still at such an early stage of this.

• 25:40David Sacks?

  And there are so many applications that are going to be developed and they're making the models more and more useful. So Jason, to your analogy about fiber, what happened with fiber is there was a big build out of overcapacity. But then the number of applications kept growing until that capacity got used. And I think we're probably going to see something like that here where there is a big build out going on of capacity and capabilities, and that's going to lead to the next generation of applications. And I just think we don't know yet what the steady state of either demand or supply for these chips is going to be. Obviously, the market got taken by surprise over the last year. So you've seen, again, this huge spike in demand.

• 26:22David Sacks?

  The supply cannot react fast enough. That's led to gigantic profits for Nvidia. But it's hard to know exactly, again, what is the steady state going to be? Is it going to be like this or is this a one time spike? And we also don't know what the supply will be once the manufacturers all adjust, because now they know that the demand is there.

• 26:39Chamath Palihapitiya?

  And to your point, like, the the big use cases are pushing us well past chips to to really be more like entire systems and these racks. And so if you look like at Grace Opera, which is their next gen design, it's like a bunch of chiplets plus memory on a huge board. It's not a chip. You're talking about system level manufacturing at this point, and that will also create different kinds of use cases. Because, for example, today, right now, when you look at simple things like probabilistic tasks, I think ChatGPT and all these GPTs are are pretty marvelous and pretty inspirational. But deterministic tasks, they're shit. Like, you know, they hallucinate on simple things like multiplication. Why? Because you infer multiplication and you try to calculate it probabilistically and you get these simple math functions wrong.

• 27:24Chamath Palihapitiya?

  And so these are all these things where the the software has to become more and more sophisticated and actually be able to path and tunnel code into different ways of getting it executed and then bringing it back and stitching it together. All of these things don't exist. Those are very rudimentary things that were solved in V1 of compute. So I think that, to your point, David, like, we don't know where this goes. We're probably going to go to a place that it's not just about chips, but it's about systems.

• 27:52Chamath Palihapitiya?

  But that's going to create this weird Balkanization almost, and I think that's where a lot of the profit margins will get eroded away because that will make it a much more competitive industry. And there just isn't a lot of margin to capture when you actually stitch all these things together.

• 28:09Jason Calacanis?

  Yeah. And if you think about what were the massive wins for all that extra fiber, it was really two companies. The first was YouTube, which stopped charging people for transport on their videos. Before that, if you had a video go viral, your your server got shut down because you you hit your $5,000 a month limit or whatever you had set with your ISP. And then Netflix, of course, right? Netflix couldn't exist and all that dark fiber built that. So we'll see with all this extra GPU, what could happen. And to your point about the the breakthroughs there, you can now go into

• 28:42Jason Calacanis?

  Your chat GPT and you could put in custom instructions. And so it asks you, what would you like chat GPT to know about you and provide better responses? And, you know, for example, I told it, I'm a venture capitalist. I live in the Bay area. I'm looking for concise business information. And then it says, well, how do you like? How would you like chat GPT to respond? And I said, I like to see data in a table. I like to see data in those tables with hyperlinks. I like citations when possible.

• 29:09David Sacks?

  Yeah, just to be clear, what you're describing with custom instructions? That was a feature, I think they launched like a month or two ago.

• 29:14Jason Calacanis?

  A couple of weeks.

• 29:15David Sacks?

  What that is doing is prompt engineering, basically. It's pre-saving like all that preamble that you would have to put in every single one of your prompts.

• 29:23Jason Calacanis?

  Yep.

• 29:24David Sacks?

  Whereas this fine tuning, as I understand it, is more about fine tuning the model to

• 29:28Jason Calacanis?

  Your data.

• 29:29David Sacks?

  Improve the model for a certain kind of data or certain kind of output.

• 29:32Jason Calacanis?

  Right, so the example there would be if you had your email box or you had your Google Docs or you had a repository of all your Slack messages or something in your company? You had your company handbooks or, you know, all of Chomac's letters he writes every year? You could have that uploaded to chat GPT.

• 29:47David Sacks?

  It's potentially very powerful, I think, for enterprises. I think the big enterprise use case, the most obvious one, is that every enterprise wants its own internal chatbot. It wants its own internal chat GPT where the employees can ask questions and the AI has access to all of the company's information and it understands permissions and privacy. So it only reveals information to people who have the right to see it. That's kind of a tall order, but I think that's what the market wants.

• 30:14Jason Calacanis?

  Yeah.

• 30:14David Sacks?

  They want the chat GPT for the company Intranet.

• 30:17Jason Calacanis?

  Yes, and so.

• 30:18David Sacks?

  And so I think there's a lot of people racing to provide that. And there was an interesting tweet by Nathan Ben H. Anyway, he just said, bye bye, a bunch of startups. Because I guess a lot of startups were working on this fine tuning problem. That may be too glib.

• 30:30Jason Calacanis?

  Yeah, way too glib.

• 30:31David Sacks?

  Because I think there's just a lot of enterprises who do not want to share all their corporate information with OpenAI.

• 30:36Jason Calacanis?

  Of course, what if it's HR information? Then you have people asking like, who are the most overpaid people in this company? You know, what if it's like the badge information and how many hours people are working or?

• 30:45David Sacks?

  That's more about permissions, Jason. But even if OpenAI can nail the permissions problem, I think there's just a lot of enterprises who will not want to trust their data to OpenAI. They're gonna be afraid about where it goes. This is why I think open source is taking off in a big way is that I think big enterprises would much rather roll their own models and control it and do the fine tuning. And that's why they're using. Tools like Mosaic and hugging faces, they want to have control over it themselves.

• 31:09Chamath Palihapitiya?

  That's an excellent point, and that has implications as well into the hardware, which is also probably a good jumping off point for ARM, because this, that, what you said is exactly must happen for the integrity of an organization to want to use these things. And if that happens, then it just further, further accelerates, I think, how the hardware will get abstracted and frankly quasi-open sourced as well. All right, let's talk. Facebook did a great job of this, because like when Facebook was building data centers, they had to invent tremendous capabilities that didn't exist before. And the market was really fragmented, it was very expensive, and what they did was they basically created these reference designs for servers and blades and the whole nine yards and open sourced the whole thing. And it just, you know, in essence destroyed a market,

• 31:55Chamath Palihapitiya?

  but it created a hyper-efficient market that then everybody could use. And I think the question is that if it's happening at the software layer already now, just like it did in Web 2 software, and then we see certain elements of Web 2 hardware have been open sourced, I think it makes pretty logical sense that you can expect the same things to happen in the AI world. The AI models and the AI platforms and the, all of that stuff will first get open sourced, because it's a data integrity, security issue. And then the hardware will get it open sourced as well, because you just want simple reference designs you can use and plug and play.

• 32:30Jason Calacanis?

  Yeah, if you want to look at that, it's called the Open Compute Project, opencompute.org. Just a way to use open source to grind down the prices, take out the margin, I guess is what you're saying, Chama, to make all these data centers scale, right?

• 32:45David Sacks?

  Well, yeah, so one related story here is, this just happened in the last few weeks. There's a company called CoreWeave, which provides cloud infrastructure for AI training. It secured a $2.3 billion investment in the form of a loan. What CoreWeave is trying to do, it's kind of like AWS, but for GPUs. So essentially, instead of having to buy your own GPUs in order to, you know, set up your own infrastructure, you just basically rent. Compute from these guys.

• 33:16Chamath Palihapitiya?

  But this is, this is exactly why, like, none of these, none of these companies will really be allowed to exist in this exact way four or five years from now, because ultimately, what people want is massive throughput, right? Tokens per second. Give me as many tokens per second as possible. And they don't particularly care, again, if you understand the model, do they really care what the underlying substrate hardware should be? It doesn't seem like they should. They should care what is the throughput? What do I pay for it? And by the way, that is exactly what happened when AWS really started to scale. Because if you guys remember, when we started first abstract code into AWS, what did we care about? How much did an EC2 instance cost? How much did an S3 bucket cost? And that's all we cared about. Because that abstraction allowed us to not care about the underlying hardware. Who was the vendor?

• 34:00Chamath Palihapitiya?

  What was the configuration? It didn't matter. And so, in an interesting way, we're going to go through that same evolution here, because it's just economically rational that that kind of a market exists. You should only care tokens per second, I think.

• 34:13Jason Calacanis?

  All right, in other news, oh, and by the way, there's something called Common Crawl, which is another interesting open source project that is getting a lot more attention today, because they have crawled the web and you can use this Common Crawl. They release it monthly. And that's what a lot of people are training their data on. Now, they don't have permission from all those people to do training data, but they do have the ability for you to download an Open Crawl, essentially what Google has, and you have an open source version of it. So.

• 34:42David Friedberg?

  Common Crawl was started and funded by Gil Elbaz.

• 34:46Jason Calacanis?

  Yep.

• 34:46David Friedberg?

  He's a, he's a friend. Gil sold his company Applied Semantics to Google back in 02, 03. And a big part of his effort with Common Crawl is to.

• 34:59Chamath Palihapitiya?

  That's AdWords, right? Is it AdSense?

• 35:01Jason Calacanis?

  Applied Semantics, yeah.

• 35:03David Friedberg?

  AdSense. So basically Applied Semantics could read a webpage and then create the keywords associated with the content on that webpage. And then those keywords would trigger AdWords ads on the, on the webpage. They called it AdSense. So AdSense started, and the whole publisher network at Google was born from the Applied Semantics acquisition. And Gil was obviously a pretty significant shareholder of Google. He's even in the S1 as one of the major shareholders. He's a really great human being. And his intention with this Common Crawl project was, you know, to make the crawling of the web, the index. And the caching available for all these different projects that might exist. And he didn't at the time anticipate the the OpenAI application becoming, you know, the big breakthrough.

• 35:48David Friedberg?

  But when GPT-3 was published, I think they said that 80% plus of the weighting came from the content out of Common Crawl. And so it's really been this amazing project, completely nonprofit, all funded, mostly funded by Gil, and has really unlocked this opportunity for a lot of the open source alternatives to now try and provide solutions that can exist and coexist with OpenAI and others in the commercial options in the world.

• 36:16Jason Calacanis?

  A small piece of trivia. We were one of the first AdSense publishers. And so here's a story from October of 2005. Weblogs Inc., which is an gadget, the blogging company I started, hit $3,000 a day in AdSense, thanks to Gil and the team over there, and we wound up selling it to

• 36:33Chamath Palihapitiya?

  That's awesome.

• 36:34Jason Calacanis?

  And this is the story about it. And we were included

• 36:36Chamath Palihapitiya?

  That's awesome.

• 36:37Jason Calacanis?

  In the S1, they had two examples of publishers. One was New York Times, and then one was Weblogs Inc. They wanted to show like an upstart and this one.

• 36:45Chamath Palihapitiya?

  That's awesome.

• 36:46Jason Calacanis?

  A lot of history here, and it's fun to go back down to. And we were in the S1 for

• 36:50David Friedberg?

  By the way, Gil is gonna be at the summit, so

• 36:52Jason Calacanis?

  Oh, Gil is gonna be at the summit? Oh, I'm gonna give him a hug and take a picture.

• 36:55Chamath Palihapitiya?

  Charles Barkley had this great story, which is like, he is like over the moon about being a grandfather. I saw this on 60 Minutes, and he said, it's because I want my grandchild, grandson, to Google me and notice that I did some things, and then we can talk about it.

• 37:11Jason Calacanis?

  Yeah.

• 37:12Chamath Palihapitiya?

  And Jacob, I had this thought for you, like, that's like, that's a cool piece of internet history that you're a part of.

• 37:19Jason Calacanis?

  Yeah.

• 37:19Chamath Palihapitiya?

  You know, hopefully, your grandkids will Google that, and you can tell them that's right. That's pretty cool.

• 37:23Jason Calacanis?

  Or, you know, 1,800 episodes of this week in startups. I just tweeted a An episode with Gary Tan from 2009 that I recorded at Sequoia's office. And I just put it on the This Week in Startups Twitter account. It's pretty funny to have babyface Gary Tan from Posturus on there. All right, ARM officially filed its F1. It's kind of like an S1 for a foreign company. And they plan to go public next month. ARM's revenue last quarter, 675 million, down 2% year-over-year, up 7% quarter-over-quarter. Fiscal full year 2023, 2.7 billion-ish, down 1% year-over-year. ARM's major business, just so you know, is smartphones. 99% of smartphones are built with ARM's chip architecture.

• 38:06Chamath Palihapitiya?

  Embedded systems. They have an IAS.

• 38:07Jason Calacanis?

  Embedded systems. Yeah, we'll get into it.

• 38:09Chamath Palihapitiya?

  The problem is the market has totally moved. When SoftBank bought ARM, it was probably like the last year where, you know, there was so much focus on the hardware and platform technologies inside of mobile and tablets and all that stuff. But in these last few years, think of what's happened. We've had a massive shift to AI, right? And so that's pushing a lot more pressure on GPUs and whatever comes after that. We have had a reemergence of the popularity of Risk V, which is an open source competitor to ARM. We have had Apple in-source a whole bunch of their own architectural decisions in silicon design because

• 38:45Jason Calacanis?

  They don't want the dependency.

• 38:46Chamath Palihapitiya?

  They have a timely couple philosophy.

• 38:47Jason Calacanis?

  Yeah. Well, also, they also care about different things. Like, they care about battery life. So that's why, you know, that's the focus of their chip architecture.

• 38:54Chamath Palihapitiya?

  And so all of this just means that that market, embedded systems, becomes more and more constrained and commoditized over time, which again, as we said, in capitalism, means that future profits will be less than historical profits. And so I think this is a very tough valuation to get right. And trying to stretch to a 60 or 70 billion dollar print, I think, is really tough. This is a Honestly, a $15 billion to $20 billion company.

• 39:24Jason Calacanis?

  Ouch. So, a question for you, Chamath, and I'll open it up to the Davids. Why would SoftBank, and I know the answer, but I'm asking you so you can explain it to the audience, why would SoftBank take a company public with these headwinds, with no growth, being flat? Why are they taking it public now?

• 39:43Chamath Palihapitiya?

  Well, SoftBank has the delever, right? They have a very big problem, which is that they have this, forget SoftBank, vision fund for a second, but SoftBank itself is a telco operator that has ginormous piles of debt that they've used to finance the building of their business. And so, when you have contraction in your core business, you become more and more at risk of breaching the covenants of all that debt, and/or you just like run out of free cash flow. Like, all of these things really hurt your future ability to invest. And so SoftBank is under a lot of pressure to just clean up the balance sheet and delever. And so when you have an asset like this sitting there, if you can sell,

• 40:25Chamath Palihapitiya?

  you know, $20 billion or $30 billion of that, call it, to somebody, and then replenish your balance sheet, that provides tremendous liquidity and relief. And they did that as well a few months ago with Alibaba. They've started to, I think now they may have sold out of the overwhelming majority of the position in Alibaba, again, because they have massive liquidity needs, because they have so much debt. So, this is just part and parcel of them delevering the balance sheet.

• 40:54Jason Calacanis?

  So they're forced to get it out, is I guess what you're saying?

• 40:56Chamath Palihapitiya?

  Yeah.

• 40:56Jason Calacanis?

  And then we've talked, Sacks, a little bit, about other companies that are going to be forced. They're on the, what do they call it when you're on a pirate ship? They make you walk the plank? I'd say this is like the walking of the plank to an IPO. You've got other companies that have issues where they just have to get public at some point. So maybe the public markets are going to open up. And in some cases, it's going to be because people are walking the plank. Other cases, it's going to be opportunistic. So maybe you could talk a little bit about your thoughts on that.

• 41:24David Sacks?

  I think it's hard to walk the plank into the public markets. I'm not sure exactly what you mean by that because the public markets have to want to buy your issuance. So if it's not a good company, then, you know, in this environment, they're not going to be able to IPO.

• 41:35Jason Calacanis?

  Well, they're going to be able to IPO. I think the question is the price. They have no choice but to get this out.

• 41:39David Sacks?

  So yeah, there may be a lot of down rounds into an IPO from the last private round, which was two or three times what the IPO price is going to be. Maybe what you mean by walk the plank is that, well, you tell me, but there are a lot of companies which have built up huge pref stacks because they raised too much money at the peak at valuations are too high. And going public does allow you to reset your whole pref stack because all the preferred with all the rights and preferences converts to common. So post IPO, you just have common. And so it is a way to like clear out all the structure and all the mess that has built up in a company and you can get to a real valuation that reflects basically the truth of what the company is worth.

• 42:22Jason Calacanis?

  Another analogy, maybe the house is on fire. You got it. You're on the balcony. You got to jump or you got to stay in the burning building.

• 42:28David Sacks?

  Yeah, but you know, listen, if your company's on fire, I don't think you're going to be able to IPO. I mean, it's, it's going to be a tough scrutinizing public market for new offerings. I think that the scenario in which you can IPO is if the company is fundamentally good, it will be able to IPO at some valuation and that valuation may be a significant down round from their last private round. Those will be able to get out.

• 42:52Jason Calacanis?

  Yeah. And that's Stripe, I guess. Now, are you seeing?

• 42:54David Sacks?

  That could be Stripe, yeah.

• 42:56Jason Calacanis?

  Are you seeing, David, the M and A activity starting to bubble up in your portfolio or in, you know, the back channels? Because I'm starting to see that a bit. Founders are packing it in in some instances and saying, you know what, we want to try for M and A. Or, you know, some companies are getting a little bit frisky and saying, hey, what's available in the market on the small side? So are you seeing any M and A action?

• 43:17David Sacks?

  Not a ton yet, but there's definitely a growing number of startups who are realizing that what they're doing is not working and they're not going to be able to raise another round. And so therefore figuring out a graceful exit, whether it's an aqua hire or some other type of landing.

• 43:32Jason Calacanis?

  Ah, got it. Those are, those might be the accurate walking the planks.

• 43:35David Sacks?

  Yes, those are the walking the planks. You're going to start seeing a lot more of that for sure.

• 43:39Jason Calacanis?

  Friedberg, your thoughts on the, on the public markets here in relation to privates and people walking the plank?

• 43:46David Friedberg?

  I don't think there is a public market right now. There's no IPO window. This ARM thing is, you know, pretty forced. It seems, it's not like there's a ton of pent up public demand to buy these ARM shares. At least that's what it seems. So, you know, they're, they're going to go shop it. They're going to find out what the market tells them it's worth and and then we'll see. Nvidia is going to help buoy it, I'm sure. There'll be an argument that, you know, all boats will rise and ARM will be a beneficiary, but I don't know if that necessarily leads into the IPO window being open again. I think we've all heard the commentary from Morgan Stanley that they don't think the window's opening until Q2, Q3 of next year, maybe. I, I can't remember the exact commentary.

• 44:30David Friedberg?

  But as, as we all know, a lot of LPs in venture funds and private equity funds are waiting for the IPO window to reopen before they're going to start reallocating capital back into the private venture funds. Because they need to get liquid in order to be able to recycle capital back into the next class of, of funds. So this glut right now, this inability to kind of get companies public is certainly weighing on folks. You know, you effectively have three options when you're running a private company.

• 45:02David Friedberg?

  You gotta keep raising money, which means either raise private capital or go public. And we've talked about the challenges of late, raising late stage private capital if you've had a high private valuation in your prior round. Going public is very difficult right now because a lot of folks are still digesting and having indigestion from the last couple of years, or you gotta sell the company or you gotta get profitable. Now, on the, the sell the company side, many of the acquisitions that we're seeing with a few exceptions are generally more bolt on and less like, hey, I'm going to pay some big strategic premium for some big strategic game changing company right now because all the buyers are dealing with their own shareholder issues and their own public stock issues right now. And the, you know, can you get profitable is really, as you guys know, where a lot of folks are going, which is

• 45:45David Friedberg?

  totally restructure your ambition, restructure your plans and build a business where customers are willing to pay you money. And where you can then take that profit and only reinvest that profit and not invest more than that profit. And if you can get to that steady state. You know, you can live to see another, another day, another year, another decade. And those businesses, by the way, that we saw in the dot com boom and the global financial crisis that were able to do that during the doldrum Death Valley March that everyone's going through right now. They emerged victorious. They learned how to be frugal. They learned how to be nimble. They learned how to really focus on customer experience because they had to increase retention and they had to increase the prices they were charging. They learned how to be efficient with allocating resources.

• 46:30David Friedberg?

  And so profitability became a core part of their DNA and their ability to succeed. So I think this is really a trial era. And, you know, on the other side of this trial era, a number of very high quality companies will emerge. But in the interim, I don't think that there's an IPO path that a lot of folks can just check the box and say, hey, let's go ahead and go public, even if the valuation's not great. Remember, an IPO process, you got to oversell your book or the bankers won't underwrite it. So if they're, you know, you can't just say, hey, the price is now five bucks and expect anchors are there. If a company's burning money, the big concern with going public right now is that there is no pipe market. There is no ability to do secondary, to do follow-on offerings. So the company can't raise capital after it's public.

• 47:14David Friedberg?

  So unless you're actually profitable, your option of going public right now really isn't there because shareholders don't want to buy shares in a company that may run out of money.

• 47:24Jason Calacanis?

  Yeah.

• 47:24David Friedberg?

  And that would end up, yeah.

• 47:25Jason Calacanis?

  And to your point, if you take this third option and you become really resilient and you have profits to them off, that seems to me to be the setup for the next boom that we could experience in the coming years, hopefully. Which is, we don't have companies that are burning, you know, mountains of cash. People are getting too profitable. These businesses look great. And then if the big companies are now, you know, having their stock prices recover and they've laid off 20,000 employees and they got people returning to the office and they're fit and they're strong. Hey, that's a setup for strong companies buying strong companies or those strong companies that are private.

• 48:00Chamath Palihapitiya?

  The M and A market is dead as a doornail. It's more dead than the IPO market. So two days ago, the European Commission and the CMA in the UK said that they're probing Adobe Figma because they have some concerns that it's going to limit competition in the market. It looks like Microsoft will have to.

• 48:19Chamath Palihapitiya?

  Give a 15-year license to video game streaming to Ubisoft in order to get the UK folks to agree to Activision, to their Activision acquisition? So you're talking about, in the first case, a $20 billion merger that may not happen, because the CMA, they found their footing. They clearly had a win in the Microsoft-Activision thing, and now they're probably going to find issue with the Adobe-Figma thing. And the Europeans don't want to be left out in the action, so they're jumping in. So I think the M&A market is effectively dead. What it leaves is an IPO market, but that is very tenuous, because you don't have a leading candidate that can really catalyze something.

• 49:01Chamath Palihapitiya?

  And I made this prediction earlier, but I think the only company that can really catalyze things would be if people were ready to do Starlink. I mean, it's the most obvious, natural, logical thing that would just get everybody excited and off the sidelines and into the arena. But that may take another year, may not, but it may. In the meantime, I don't think there's any company like Instacart, I don't think people are going to be jumping off the sidelines, Arm, it'll be tough. Even Stripe now is like a very complicated valuation trade, and I think that that's a really technical thing to be involved in, in an IPO like that. A technical valuation. And so, companies have no choice, except to get profitable and get to default alive,

• 49:45Chamath Palihapitiya?

  to use the famous Paul Graham quote. That's the only path. That's it. Yeah, I mean, suck it up. That's the only path.

• 49:51David Sacks?

  You either have to be default alive, which means profitable, or default investable, which means that you're capable of producing metrics that a VC will fund. But really, that starts with 100% year-over-year growth. There's a lot of companies that aren't growing very fast, they're growing 20, 30, 40, 50, 60% growth, that's not VC fundable.

• 50:10Chamath Palihapitiya?

  Or they're flat.

• 50:11David Sacks?

  Or they're flat, even worse, some are shrinking. So, those cases, they gotta think more like a PE model than a venture model. And PE companies are cash flow positive, they don't burn cash.

• 50:23Chamath Palihapitiya?

  Welcome to the new world.

• 50:25David Sacks?

  I put out this video a few months ago, called VC or PE, what's the right framework for thinking about your startup? This was a...

• 50:32Chamath Palihapitiya?

  Oh, Craft Ventures, YouTube.

• 50:34David Sacks?

  This was a talk that I gave to our portfolio companies. We recorded it and then published it. Really, it should have gotten more attention. But this was basically recommending to all those slower growing companies in our portfolios, stop thinking that VC funding is always going to be available and start thinking more like a PE-funded private equity company, which is to say you need to cut your burn to get cash flow positive. You will then be able to control your own destiny. So yeah, this slide here, if you're not VC eligible, act realistically. So we provided some guidance on what makes a company eligible for VC funding. And you can see there's a good column, there's a great column. Good starts at 2X growth, great is 3X. Gross margins, good starts at

• 51:18David Sacks?

  50%, great is 80%. Net dollar retention, good starts at 100%, great's 120%. CAC payback, good is 12 to 18 months, great is 6 to 12 months. Burn multiple, good is 1 and 1/2, great is 1 or less. And then there's some danger zones as well. This was to provide them with some realistic guidance in terms of whether they'll be able to raise another VC round or not. And I can tell you, like, most startups in startup world right now are in the danger zone. It's a really tough environment. And so, you know, listen, if you're a startup with sub 1 million of ARR and you're in the danger zone, you're probably just going to have to pack it in, or maybe you package yourself up for an aqua hire.

• 51:58David Sacks?

  But if you're a startup that has 50 million of ARR, but you're in the danger zone, just cut your burn. You could basically make yourselves cash flow positive and you could engineer an outcome for yourself, a pretty good outcome.

• 52:12Chamath Palihapitiya?

  My anecdotal experience is one of our larger investments, we brought in a private equity firm, or they came in. And my God, it's been an incredible experience.

• 52:25Chamath Palihapitiya?

  Because the combination of how like a VC looks at a business and how a PE firm looks at a business in a moment like this is hyper additive because it's super clarifying, it's very straightforward, and it gives a CEO an extremely clear mandate from which to operate and then they become very measurable. And I found it to be a really, really healthy thing. Now, PE guys can only get involved in companies of a certain size, so it limits.

• 52:51Jason Calacanis?

  Fifty million and above in revenue, 100 million?

• 52:54Chamath Palihapitiya?

  Yeah, in our case, it was a 400 million, 380, 300, more than 300 million in revenue. So it's a big, it's a big company. But my point is just more that we were moving along a trajectory to getting to Default Alive, but by adding that PE partner to our board, boom, I think we were able to focus on it probably a year to 18 months faster and with specific precision because they have a very different toolkit and a reaction to misexecution. And that's extremely healthy.

• 53:26Jason Calacanis?

  Yeah, we had this happen, you know, meeting with, just from the front lines, we, we meet with, we have 20,000 people apply for funding from our firm. In large part, I would say, we doubled the number of applications after All In started. So shout out to my besties here. It really helped our deal flow. And we find companies and we found a company that was obsessed with All In and the two founders were Quants and they made this company called Stone Algo. We meet this company. They've got very little money. It's a bootstrap company and they got to a half million dollars in revenue, you know, just on sweat equity. And we find this company. It's not part of the Silicon Valley, you know, accelerator system. It's basically kayak for diamonds. Shout out to the team over there. And we

• 54:08Jason Calacanis?

  were able to place a nice bet on this company that was break even and, you know, put in a, you know, a couple of hundred thousand dollars to start them down this road to growing faster. But what a delightful thing to find a profitable company. In the world. And so if you have a profitable company like, and it's just 50,000 a month or 25,000 a month, please email me, [email protected]. I want to invest in your company. When you have that company, small amount of revenue, profitable, and you're not burning a ton, you are so attractive to investors right now. It's the highest attractiveness in the world. And I just want to point out, David, as this market has, you know, completely

• 54:48Jason Calacanis?

  gone from absolute chaos, the hair has gotten tighter and tighter. You were in crazy Bannon, and now you are tight. Tight is right. Sacks is focused. He's deploying that LP capital. He's deploying that advice to SaaS companies. And it's no joke now, folks. General Sacks is here. He is not crazy history uncle. He is SaaS Sacks. He's SaaS Sacks is back.

• 55:15David Sacks?

  This is like when Mark Zuckerberg started wearing a tie to work to start showing that it was serious?

• 55:21Jason Calacanis?

  Yes, yes. SaaS is, SaaS Sacks is serious Sacks is back with that slicked back hair. All right, listen, we gotta get going here. We got a lot more on the docket. I think we just, maybe I'm gonna jump the fence here. And we just go right to the Republican primary.

• 55:37Chamath Palihapitiya?

  The funniest thing last night was at poker. We watched it.

• 55:41Jason Calacanis?

  You watched it during poker? Were you able to focus?

• 55:44Chamath Palihapitiya?

  You have to hear Kevin Hart react when all these guys are doing it. It's one of the funniest things I've ever heard. And the worst part of the poker was

• 55:57Jason Calacanis?

  Oh, the magician. Here we go.

• 56:00Chamath Palihapitiya?

  So, John, how can you both be playing poker here, but also on the debate stage at the same time?

• 56:08Chamath Palihapitiya?

  Which I thought, which I thought was a really funny joke.

• 56:10Jason Calacanis?

  It's a little racist, but it's a little bit funny.

• 56:14Chamath Palihapitiya?

  But it was funny. It was very funny.

• 56:17Jason Calacanis?

  All right, listen, I know everybody's, I just want to go around the horn here. Friedberg, did you watch the debate? Who won the debate? Who had the largest gain, net gain, in terms of their profile, in your mind, after watching debate number one of the GOP? David Friedberg, biggest gain?

• 56:37David Friedberg?

  I watched the debate. I kind of think about these guys on three dimensions, which is the content, how dynamic they are, and their personality. I think those are the three dimensions that people are going to be kind of assessing them on. I think Nikki Haley did a tremendous job gaining interest with respect to her personality and her content.

• 57:02David Friedberg?

  Burgum, Hutchinson, I don't think had a chance to move the needle on any of them. I think Vivek was by far the winner on dynamic. He had the hardest hitting, biggest comeback with a very close second being Chris Christie. But I do think that Vivek got taken apart when it comes to content and I have real concerns about his personality. There's a lot of people that are just turned off by him, that he seems a little too eager, that he seems a little too smart for his own good. The commentary about him being so junior and doesn't have experience, I think standing next to those guys on stage really showed, to be honest. Nikki Haley tearing him apart on his point of view on Russia.

• 57:48David Friedberg?

  And Sax, you know, we can debate the point or not, but I think she did a masterful.

• 57:52David Sacks?

  I don't think she tore him apart. I think the biggest dunk line of the evening was when he congratulated her on her future appointments to the boards of Raytheon and Lockheed.

• 58:02David Friedberg?

  Yeah, that was pretty good.

• 58:03David Sacks?

  That was brilliant.

• 58:04David Friedberg?

  I just think he's the most dynamic character and I think people, people do in a democracy vote on that. They vote on how dynamic someone is. They vote on their personality and whether they can trust the person. I think Nikki Haley shines there. She seems extremely trustworthy and personable. Chris Christie came across as very personable.

• 58:20Jason Calacanis?

  So your big winners?

• 58:22David Friedberg?

  Yeah, Mike Pence, I would say underwhelmed and Ron DeSantis, man, it's like he didn't show up. So yeah, I would say Haley, Chris Christie, Vivek and Kim Scott are probably like, you know, across those dimensions, like, you know, the four runners and everyone else is probably off.

• 58:42Jason Calacanis?

  Now, let me get Chamath and then Sax, you get to comment on both of theirs. So I want to go to you last because you have the most passion here. Chamath, who are your big winners coming out of it? In other words, who gained the most last night?

• 58:54Chamath Palihapitiya?

  What can Brown do for you? What can Brown do for you? I think that.

• 58:57Jason Calacanis?

  Okay, UPS settlement, great.

• 58:59Chamath Palihapitiya?

  I thought that Nikki Haley did an incredible job. And I do think that Vivek did a very good job. And I think what's interesting is that I'm fascinated to see what the Republican reaction over the next few weeks will be.

• 59:15Chamath Palihapitiya?

  To Vivek, and specifically what I'm interested in seeing is, do the Trump loyalists start to, were they incepted with an idea yesterday? Which is that this guy can give us a lot of the talking points we want, without some of the heartburn and agita that we don't want.

• 59:35Speaker 04

  Hmm.

• 59:36Chamath Palihapitiya?

  And if he is able to thread that needle, which is what I think his effective strategy has been,

• 59:46Chamath Palihapitiya?

  he could really build momentum going into the fall. So that was my, that was my real takeaway is that he is refining a playbook. Look, the guy is a clearly, a really brilliant person, well-studied, well-prepared, and dynamic, as David said, so he can, you know, clap back at people, which I think is important. But the most important thing that he's done is he has defined a very precise strategy to thread this needle of being close enough to Trump to frankly, eventually go after him.

• 1:00:26Speaker 04

  Hmm.

• 1:00:27Chamath Palihapitiya?

  But do it in a way where he's slowly building credibility among Trump loyalists. And I think if you look at where other people made huge gaffes, unnecessary gaffes, was they took their beliefs and they confused them with the strategy of winning. And that doesn't work in the Republican Party. So when the candidates were asked about Trump and the ones that drew a hard line and said that this guy's going to go to jail, what happened? They got booed. And it just ended their ability to be credible for what they said afterwards. I'm not saying that that's right or wrong, it's just an observation. So I think Vivek is doing the smartest job of understanding the rules on the field.

• 1:01:10Chamath Palihapitiya?

  And he's in the arena to win.

• 1:01:11Jason Calacanis?

  Okay.

• 1:01:11Chamath Palihapitiya?

  And that gives him a lot.

• 1:01:12Jason Calacanis?

  That gives him a lot of chance. Now, we go to Sacks. Sacks, you heard Nikki, Vivek, Christie from Friedberg. You heard Vivek, Nikki.

• 1:01:19Chamath Palihapitiya?

  And Tim Scott.

• 1:01:20Jason Calacanis?

  And Tim Scott. So Vivek, clearly, the buzz and the search terms and everything, it seems to be favoring Vivek as the big lift here. Do you think Vivek is the Trump change agent without the indictments, without the baggage, without the Trump derangement syndrome insanity? Is Chamath correct here that he's a more palatable version of the change agent that is Trump?

• 1:01:43David Sacks?

  I think he's positioning himself as the backup plan to Trump. So he's not criticizing Trump. He is cultivating support within Trump's base. Again, not to supersede him, but I think to perhaps be a backup plan. I think it is a smart strategy. But let me back up a little bit here.

• 1:02:00Jason Calacanis?

  Who won for you?

• 1:02:02David Sacks?

  Well, maybe a couple of points.

• 1:02:03Jason Calacanis?

  Who had the best game, before you make your points? Who had the biggest game? Everybody else played the game. Biggest game.

• 1:02:07David Sacks?

  Well, clearly, the biggest game was Vivek. That's reflected in the polling. There's a poll on Drudge Report in which 33%, which was the highest number, said that he won the debate. 22% for Haley, 18% for DeSantis. Christie got 16%. The rest were just non-factors. So Nate Silver.

• 1:02:25Jason Calacanis?

  Not scientific, but pretty interesting.

• 1:02:26David Sacks?

  It's not scientific, but this is corroborated by Nate Silver.

• 1:02:28Jason Calacanis?

  Yes.

• 1:02:29David Sacks?

  Had a substack this morning, basically saying that, based on the buzz on social media and the sentiment.

• 1:02:34Jason Calacanis?

  And Google Trends.

• 1:02:36David Sacks?

  That he predicted, Google Trends, he predicted that Vivek would, we keep saying Vivek, Vivek, it's, it is.

• 1:02:43Jason Calacanis?

  Like, it's Vivek.

• 1:02:45David Sacks?

  It is Vivek. He's gonna have the biggest bounce out of the debate. Partly, that's a function of the fact that he was the least well-known candidate.

• 1:02:53Jason Calacanis?

  Okay.

• 1:02:53David Sacks?

  So this gave him a lot of exposure, and he is a good orator. I mean, just the way he talks, the energy, the timber of his voice, he projects well. And he had a clear point of view in this debate. You may not agree with everything he said, but he had a very clear point of view. And I expect that both the number of people who like him and the number of people who dislike him will go up as a result of this. But I think the net effect of that will be positive. Let me back up just give you a couple more thoughts on the debate. First of all, in terms of winners, I think the Republican Party in a way demonstrated that it is the party of ideas where there actually are debates happening. Because you saw here, I think, real differences between the candidates.

• 1:03:35David Sacks?

  And I could break them up into really three categories, if you like. There's this neocon wing of sort of hardline foreign policy hawks. And you saw Nikki Haley's part of that and Chris Christie and Pence. And Tim Scott, then you had this religious right faction where you've got Pence and Scott. And then you've kind of got the MAGA wing, which Vivek really took up the mantle of opposing Ukraine and defending Trump. So you have three very different groups within the party who are battling, I think, for mindshare within the party and to be the future of the party. So it's not just about candidates and personal style, but it really is about ideas. You compare that to the Democratic Party, they're not even having a debate. They're protecting Biden

• 1:04:19David Sacks?

  from a debate. There could be a real debate because RFK Junior has really different ideas. And he would like to take the party in a very different direction, the direction of his father and uncle Bobby Kennedy and John F. Kennedy. He's saying that we have moved away from where we should be as a party, but the people who control the Democratic Party do not want to have that debate. They have shut it down completely. There is no debate. They're just protecting Biden. So that's number one is I think we should give the Republican Party some credit for being willing to discuss and debate ideas.

• 1:04:52Jason Calacanis?

  I agree with you on that. I love the fact that you had a vibrant debate. You had differences of opinions. Now, it was a little like a UFC fight and, you know, zingers and back and forth. But I did like the fact that you had people who in moderation was actually surprisingly good. When they forced them to say like, would you give Trump a pardon? Or, you know, what would you do in terms of support for Ukraine? This was like really well done and they had that 30 second thing where they stopped people. They say, hey, this is the 30 second one and they had to rein in Pence because he kept, you know, interrupting and they were kind of respectful about it. So I just want to shout out to Fox for good moderation. There were some crazy zingers in there as well. And it seems like we live in zinger culture.

• 1:05:35Jason Calacanis?

  I think the the best zinger goes to the moderator who said, let's talk about the elephant that's not in the room. And then they brought up Trump.

• 1:05:42David Sacks?

  Well, frankly,

• 1:05:43Jason Calacanis?

  I don't know if you caught that one, but that was pretty hardcore.

• 1:05:45David Sacks?

  Well, so let's talk about winner number two, which was Trump, because Trump did not participate and he didn't pay any price whatsoever for that. He barely got mentioned or attacked on that stage. And then he did this interview with Tucker, which started five minutes before the debate, which was kind of brilliant because once again, Trump was able to suck up a lot of the oxygen, maybe not all of it, but a lot of oxygen without even participating in the debate.

• 1:06:08Jason Calacanis?

  It was a perfect bookend. I watched both. It was a perfect bookend. You got Trump over here saying, Chamath, I'm interested in your position, but he said, listen, I don't need to be in there with these guys mudslinging. They have zero or 1%. And I think he got the sense that he's excited to debate them when there's two people left or something like that. What did you think of? Did you watch Trump's thing, Friedberg or Chamath? Did you watch it?

• 1:06:29David Sacks?

  I watched the debate. I watched the debate only. I watched both the debate and then I watched.

• 1:06:33David Friedberg?

  I do think Trump effectively won the debate night because you had all these guys going at each other. And then you had Trump playing the Trump card. I'm not even going to show up because I don't have to. He literally made himself better than everyone else in the room by saying, I'm not even, it's not even worth my time to show up to talk to you guys. Go ahead and fight with each other. I'll also just restate this, this point about Vivek. I think it became abundantly clear that his strategy, Vivek, his, his strategy is to pander to the Trump audience, that his commentary about, you know, God is real, climate change is a hoax. There's two genders.

• 1:07:13David Friedberg?

  He knows through polling, through his understanding and his intelligence, that this is what this audience, that is the bulk of the voting members of the Republican Party want to hear. And he is telling them what they want to hear. And then.

• 1:07:29David Sacks?

  Isn't that the job of a politician?

• 1:07:31David Friedberg?

  Yeah.

• 1:07:31David Sacks?

  I mean, isn't that better than pandering to the military industrial complex like Nikki Haley did?

• 1:07:35David Friedberg?

  There was a comment last night that I thought was really important, which is that leadership is not about consensus. And what he is doing is he is reflecting back the consensus view of the majority of people in that party in order to get himself elected, rather than leading with a different message that casts a different opportunity, a different light on the opportunity for this nation. And I think that's really where he and others on that stage, or he particularly falls short, is that he speaks too much to what people already believe and say, because he knows that that's what they're voting for Trump about. And then the bet is that there's some chance, not 100%, but some chance, that Trump doesn't make it all the way, ends up in jail, or people start to turn on him, and then he's the frontrunner, because he's basically captivated that audience.

• 1:08:17Jason Calacanis?

  Yeah, hold on, but Friedberg, and I will let you address it here, Chamath just said, the brilliance of Vivek and his positioning here is that he understands how to win, and he is playing this game. And you call it pandering, Sacks is, I think, saying it's understanding the needs of that audience. The job of a politician, Sacks, is to win and to stay in office. So I don't believe Vivek's positions on a lot of the stuff. I think he is pandering. I think he wouldn't do what Trump did. I think, you know, he's doing the part in promise because he knows he gets them votes. So how do you reconcile this? Your job is to win, right? And you would rather see DeSantis maybe pick up on some of this action, no? As your preferred candidate?

• 1:09:00Chamath Palihapitiya?

  Actually, that's a good question, Friedberg. Do you think that a politician's job, when you're running for President of the United States, is it to understand the conditions on the field and win, or not?

• 1:09:12David Friedberg?

  I think the politician's job, or I don't want to say the job, I think the opportunity to get elected in a democracy is to provide leadership, to cast a light on where you think the country, or whatever constituency you're supposed to lead, can go, to provide a sense of opportunity, to provide a sense of optimism, to provide a sense of what's not happening today that should be different, rather than reflecting back to those people exactly what they want. Now, the flip side of that is exactly what you're saying, Chamath, which is that I think what happens in a democracy is that people elect people that represent what they believe. And I think that's what's gonna happen.

• 1:09:48Chamath Palihapitiya?

  I think there's a lot of...

• 1:09:49David Friedberg?

  And he's raising his hand, and he's saying, "I believe these things," and he's gonna get elected, or he's gonna put himself in a position to get elected if Trump drops out.

• 1:09:59Chamath Palihapitiya?

  People who are very smart, who if they are too idealistic will achieve nothing in their lives, and I don't think Vivek is one of those people. Idealism has a place in the world. It's not on the debate stage when you're running for president of the United States.

• 1:10:11Jason Calacanis?

  Okay, Sax, you wanted to get in here, go.

• 1:10:12David Sacks?

  Okay, let's take the issue of Ukraine, because that was one of the main issues that Vivek differed from the rest of the people on that stage. There is polling by CNN that a majority of Americans have now turned against the idea of giving more aid to Ukraine. I'm sure that number is much higher in the Republican Party. If you remember, there was an event, Charlie Kirk, who is a conservative influencer, has an event called Turning Point USA, and they did polling of their conference attendees. The number one issue that everyone agreed on was Ukraine. Ninety-five percent of the attendees opposed giving more aid to Ukraine. Donald Trump only got 85% popularity.

• 1:10:53David Sacks?

  So, the base of the party is even more united against Joe Biden's policy in Ukraine than they are on loving Trump. Okay, that tells you something. And yet, Vivek is the only candidate on that stage that was willing to raise his hand, like aggressively, like full-throatedly, not kind of a half-hearted, to saying that he did not agree with Biden's policy on Ukraine. What is wrong with all these other people on the stage that they cannot understand what is wrong with Biden's Ukraine policy? Which, by the way, is the signature policy of his presidency. What is the point of Republicans nominating a candidate who's just going to agree with Joe Biden on providing aid to Ukraine as much as it takes for as long as it takes?

• 1:11:36Jason Calacanis?

  Is this your position here, Friedberg, is that, you know, win at all costs? Let's call it the Vivek win at all costs, play the game on the field, as Chamath is saying, and just win the game? Versus being principled? Because you did have a group of-

• 1:11:49Chamath Palihapitiya?

  No, no, no, I think that that framing is such a setup. Can I just say something?

• 1:11:52Jason Calacanis?

  Okay, frame it how you want. You said playing the game on the field, and Friedberg said having a principle here and having like an actual vision for the country. So I'm taking both of yours.

• 1:12:02David Sacks?

  Look, I think the framing is not what is wrong with Vivek, but what is wrong with candidates like Christie and Pence and Haley and Scott, where even though 95% of their party is opposed to Ukraine, they are adopting Joe Biden's policy. And their only criticism of Joe Biden is that he's not doing enough fast enough for them.

• 1:12:23Jason Calacanis?

  Okay, let's let Friedberg get in here.

• 1:12:25David Sacks?

  They're completely out of step with the Republican Party as it stands today.

• 1:12:28Jason Calacanis?

  We got your point. But is it not Friedberg, what you're saying is that there is this profile in courage, to invoke that book, where there's something that's unpopular that you have to do. And I think Nikki Haley, Pence, Christie, and the other ones who are pro-defending Ukraine from Russia, their profile in courage, Friedberg, is that they will go against that 95% polling and say it's the right thing to do. We should defend Taiwan, we should defend Israel, we should defend Ukraine against.

• 1:12:57David Sacks?

  Those are three different issues.

• 1:12:58Jason Calacanis?

  I know it's three different issues, but they were all evoked by Vivek himself. So Friedberg, your chance.

• 1:13:03David Friedberg?

  I think the West Wing does a great job of exploring both sides of this, which is, when do you have to break the mold and break the expectation of the people to do the right principle thing? And when do you have to do the thing that you don't think is right, but it's what the people want to have happen? And I think that that's obviously a balance that needs to be struck when you're in this position of being an elected leader in a democracy. And so there's no real answer. I wish that there was, like, I wish Mr. Beast had like a presidential process. Like, you guys saw his Olympics video that he did last week, where he brought people and he created this, like, these, like, five things. I wish that we had something like that to elect president, that it was more than just oration, because

• 1:13:48David Friedberg?

  we elect the president today based on their oratory skills. They go on stage and who has the best quippy comment. The person who would be the most decisive under pressure doesn't necessarily win. The person who can inspire and attract and retain the best leadership, the person who can have the best foreign policy interactions with other leaders, doesn't necessarily win. Those are skills that show up in other contexts. And when we put people on a stage and we say, okay, speak to the audience. The guy who speaks the best looks the best. It's not necessarily the guy who is best equipped to handle the challenge of the Bay of Pigs. Or, you know, the decision on whether or not

• 1:14:26Chamath Palihapitiya?

  I think you're being very dismissive. I think you're being very dismissive. You have the floor? Go, Schmott, go. This is like, that's kind of like saying, why isn't it that it's the quarterback with the strongest arm? That isn't the most successful. Why? Because that person is a fucking loser. And the person that's the winner is the one that can thread together a multifaceted set of skills to win the game. Tom Brady was drafted in the seventh round, not the first round. He wins the game because he has the requisite skills, which is a basket of things and a nuance of skills in different moments, at different times. And so I think that you're being a little glib by saying the person isn't cool under pressure or this or that. It's not true.

• 1:15:09Chamath Palihapitiya?

  The people that win these races have a preternatural ability to be a complete egoist, but not a narcissist. That is an incredibly deft set of skills that a fair, rare people have. It gives them this energy to be out there, talking to thousands and thousands and thousands and thousands of people, maybe saying the same thing thousands of times. But being able to stay focused, being able to be on point, having a sense of what they need to believe, know the details in a certain part, know the high level in another part, stay punchy, but stay applicable, stay... That's the game.

• 1:15:45David Friedberg?

  There are a set of skills that it takes to become president. You test the oration skills of a person when you put them on a debate stage. You don't test the other complex skills that it takes to be president. And getting people to understand the complexity of the role and all the other aspects of someone's personality are lacking in these fucking debates.

• 1:16:03Chamath Palihapitiya?

  But there are other, these other skills are in play in many things other than just the debate. Like, the campaign is a highly sophisticated orchestration of running a small, little government.

• 1:16:13David Sacks?

  Mario Cuomo famously said that you campaign in poetry and govern in prose. And there is a difference between campaigning skills and governing skills. There is a gap there. I would update it to say that you Governing pros and campaign and tweets, you know, so the campaign definitely puts a huge emphasis on a candidate's communication skills, but that is not all just gloss or style. It also has to do with their policies and the nuances of their policies and how they handle pressure, how good they are under pressure and how good they are when they're attacked. So, you know, we put these candidates through a pressure cooker and kind of learn who they really are. I'm not sure it's a horrible process.

• 1:16:57David Friedberg?

  So Sax, let me ask you a question.

• 1:16:59David Sacks?

  Yeah.

• 1:16:59David Friedberg?

  Pence has been in the Situation Room, dealing with a foreign adversary. Vivek has no military or defense experience. He has no foreign state experience. How do you assess Vivek and his ability to address those critical issues that he's going to have to lead us through versus someone who's been there and done that? And how do you, you know, give them?

• 1:17:17Jason Calacanis?

  Great question. Great question.

• 1:17:19David Sacks?

  Okay.

• 1:17:19Jason Calacanis?

  You trust him? You trust Vivek?

• 1:17:20David Sacks?

  Listen, Pence made that argument against Vivek, apparently not realizing that the guy he was Vice President for was in that exact same position in 2016. No previous political experience.

• 1:17:31David Friedberg?

  Right.

• 1:17:31David Sacks?

  No experience being in the Situation Room. The only reason why Pence got to warm his ass on a chair in the Situation Room is because Donald Trump picked him to be his VP.

• 1:17:41David Friedberg?

  Oh.

• 1:17:41David Sacks?

  But he wasn't responsible for making any important decisions. He was basically clocking time as Vice President. Give me a break. And that's why he's at, what is it, one or 1%? No one gives a shit about Pence.

• 1:17:52Chamath Palihapitiya?

  That's what they said about Obama as well. Obama had zero experience. Obama barely could get elected before he became Senator and then President in a matter of four years. And for Bush, what happened to Bush? They said that exact argument as well. And what did they do? They packed him with Rumsfeld and Cheney. How did that end?

• 1:18:08Jason Calacanis?

  Yeah, I just want to also point out here, sometimes things get a little bit heated. And when we get heated, it's typically because we're triangulating around something very important. I think what we're triangulating around here is that we are moving from an era of incumbents and insiders to an era of outsiders. To your point, Sax, post-Trump.

• 1:18:30Jason Calacanis?

  We now have the two or three most fascinating candidates are people who do social media, who do podcasts, who do earned media, like we talked about, I think, two or three weeks ago, it's really good insight. And Vivek is, has mastered it. And he is exactly like Trump, and he's exactly like Obama, to a certain extent, in that those people were incredibly personable, they knew how to talk on podcasts, they knew how to engage people. And I think that, you know, this spiciness that we're having here on the pod, and the spiciness that you're seeing with some of those candidates, is that we're moving from traditional media defining these candidates to direct to consumer, direct through Twitter slash X, direct through

• 1:19:10Jason Calacanis?

  podcasts, this podcast included, making people like RFK and Vivek, you know, very palatable people. And Ross Perot, I know I'm gonna get laughed up for bringing this up, who got 19% of the vote, which is a serious number, he went direct as well.

• 1:19:26David Sacks?

  After he dropped out.

• 1:19:27Jason Calacanis?

  No, he, he, he got 19%, Perot, because he actually went as an independent all the way. And what Ross Perot did was the equivalent of what Vivek and RFK are doing on podcasts, he bought television time. You don't know that, or some people in the audience might not understand who Ross Perot even is, but look it up. He bought television time, and he went direct to the country with our budget. I thought, this is going to be the future of politics. What we're witnessing right now is the transition from traditional media and the establishment defining who the great candidates are, to the public, and the people on podcasts and social media who are the tip of the spear and the vanguard, they're gonna pick the winners. And I think this could be the tipping point election. Trump was the

• 1:20:11Jason Calacanis?

  first, Obama, then Trump, and now Vivek and RFK. So I'd just like you all to maybe respond to that, especially you, Sex, since you brought this earned media issue up two weeks ago.

• 1:20:21David Sacks?

  Let me partially agree with Friedberg, in this sense. Look, obviously, track record is important. Obviously, the ability to be an executive, executive functioning is important for the chief executive of, of our country. So I'm not saying that we shouldn't look at that kind of record. And this is why, was one of the reasons why I support DeSantis. I think he's been a brilliant governor. He's done a superb job in the state of Florida. He did the best job of all the governors during COVID. I think he did a better job than Trump did during COVID. So, listen, I think those things are important. Where I disagree is, just because Mike Pence has, again, warmed a chair in the Situation Room as Vice President, to me, that's just not that relevant experience. I mean,

• 1:21:03David Sacks?

  the VP is kind of a nothing job unless something terrible happens to the President and they get tapped on the shoulder. So, I just disagree with what is relevant experience. Second, I think it's important to recognize that the reason why Vivek has Elaine here, and the reason why Trump had Elaine in 2016, is that the establishment wing of the party is so completely out of touch with what the base wants. Look, the reason why Trump came out of nowhere in 2016 is, he basically turned everything on its head. He said, "No more Bushes, no more of these stupid forever wars in the Middle East. We need to build a wall, no more of this open border policy, and we need to reset our

• 1:21:45David Sacks?

  trade relationship with China." Those were three mega issues that no one else in the party was talking about. And the mega issue today is Ukraine. Ninety-five percent of the base is against it, and they have left Vivek this gigantic lane to exploit. Why? I don't know. I mean, they're trapped in legacy neocon thinking that the US is being the policeman.

• 1:22:07Jason Calacanis?

  Are they bought and sold, Sax? Vivek kept saying they're bought and sold.

• 1:22:10David Sacks?

  I think that was a great moment. It's a combination of being trapped in legacy thinking where we have to be the policeman of the world, combined with all the big donors in the party, many of whom are wrapped up with the military-industrial complex, want to contribute to that.

• 1:22:22Chamath Palihapitiya?

  Can you just say it again, what you feel like I'm not hearing?

• 1:22:25David Friedberg?

  No, I think that being President requires being better more than just an orator. And I think that the debates allow the best orator to show off their skills and capabilities on the debate stage. I was saying, I wish that there were other events. I would love to see some set of systems to expose the candidate's success or failings, and how well-equipped they are, rather than the person who can just give the best interview. We all know this. When you interview a candidate, an engineer... The engineer that gives the best interview is not necessarily going to become the best engineer. You can look at their code to see if they're a great engineer. You can talk to people that reported to them to see if they're a great manager. You can learn more about their success and skills through more than just their oration on the stage.

• 1:23:08David Friedberg?

  And yes, there's data and facts that we can pull from these people. I was just speculating in kind of a pseudo silly way about the concept of can we do more than just put people on a debate?

• 1:23:18Chamath Palihapitiya?

  How do you hire a CEO for your companies?

• 1:23:21David Friedberg?

  So the board, what I'll tell you, we don't. Well, yeah, what I'll tell you, we don't do is we don't have the employees elect the CEO through a vote by having that CEO go in front of the room.

• 1:23:29Chamath Palihapitiya?

  No, no, but you're.

• 1:23:30David Friedberg?

  And say, hey, I'm the best guy for the job.

• 1:23:31Chamath Palihapitiya?

  I hear you, but you're voting.

• 1:23:33Jason Calacanis?

  Interview is part of it.

• 1:23:33Chamath Palihapitiya?

  But you get to vote.

• 1:23:34David Friedberg?

  We do reference calls, right? We, we, we talked to them about their strategy and, you know, through the interview, through the reference calls, through looking at the performance of other businesses they've built and run and, you know, and.

• 1:23:46Chamath Palihapitiya?

  So why can't you do that with, that can have a fulsome understanding of his candidacy and his ability to be president?

• 1:23:51David Friedberg?

  My point is, I think that there are certain things like with Trump that had not been tested or tried that are going to come up in this role that they'd never done before in the past. And I'm not saying, look, by the way, I'm certainly not a big, you know, political career guy. As you guys know, I think, you know, I hate that people build a career out of politics. I think it's the most inane, ridiculous thing. And if we could go back and rewrite the constitution, that's probably the first thing I'd put in there.

• 1:24:14Chamath Palihapitiya?

  The thing with this line of thinking, and maybe this is where I reacted, so I apologize if I personalize it, is that it creates the risk of exactly what you just said in this, what you just said right now, which is this blob class of people that use those arguments as the reason why change can't happen.

• 1:24:33David Friedberg?

  Yeah.

• 1:24:34Chamath Palihapitiya?

  Why it must be this.

• 1:24:35David Friedberg?

  I don't disagree with that. I don't disagree with that at all.

• 1:24:36Chamath Palihapitiya?

  And I think that is the huge red flag about this line of argumentation around why out of the box candidates can't be evaluated by reasonably smart people, of which there are 300 million of us in America that have the ability to see it. And so I actually don't think it's as hard of a job as we make it out to be. And that when you get 180, 190 million different people voting, I do think you actually get a pretty good wisdom of the crowds. And take away Trump's.

• 1:25:07Chamath Palihapitiya?

  UI for a second. What Sax just said is so profound because like what Trump nailed was three ginormous lanes that turned out now we can all agree with. None of us wanted these wars. Everybody basically believes that the border needed to be closed and everybody believes that China has taken advantage in a way that has really hollowed out the middle class in America. Those were three totems that nobody would have touched. And if we had allowed this whole thing of like, oh, Trump doesn't have this, Trump doesn't have that, he just gives cute nicknames to his average series, we would have missed that he actually had enough executive function to nail the three biggest themes of our current lifetime.

• 1:25:49Jason Calacanis?

  Okay.

• 1:25:50David Friedberg?

  I think that's fair. I guess my commentary can just be reduced down to the debate stage and saying who won and who should be is different than who should be president necessarily.

• 1:25:58Jason Calacanis?

  Okay.

• 1:25:59David Friedberg?

  I think looking at the broader context.

• 1:26:00Jason Calacanis?

  Good job.

• 1:26:00David Friedberg?

  The folks have done.

• 1:26:01Jason Calacanis?

  Good job.

• 1:26:01Chamath Palihapitiya?

  But the presidential candidacy is much more than just these debates.

• 1:26:07Jason Calacanis?

  Okay.

• 1:26:07Chamath Palihapitiya?

  Yes. There's a lot of other things going on.

• 1:26:09David Sacks?

  If we're judging people just based on how well they talk and how quick on their feet they are, Chris Christie is a great talker.

• 1:26:15Jason Calacanis?

  Okay.

• 1:26:16David Sacks?

  He's a media trained talker. But guess what? He got booed.

• 1:26:19Chamath Palihapitiya?

  That was the low point of the debate. The dull point of the debate for me was that he, I thought, took a kind of like a low key racist jab at Vivek when he was like.

• 1:26:29Jason Calacanis?

  Let me read it. The last person, yeah, the last person in one of these debates who stood in the middle of the stage and said, what's a skinny guy with an oddless name doing up here was Barack Obama. I'm afraid we're dealing with the same type of amateur standing on the stage tonight. You felt it was a little?

• 1:26:43Chamath Palihapitiya?

  No, not that. It's when he called Vivek like ChatGPT.

• 1:26:46Jason Calacanis?

  Oh, okay. And had enough already of a guy who sounds like ChatGPT standing up there.

• 1:26:50Chamath Palihapitiya?

  Yeah, he was like this Indian tech worker. And I thought, hey, man, that's like.

• 1:26:53Jason Calacanis?

  That's what you read into it? That's interesting. I thought he was just saying he sounded.

• 1:26:56Chamath Palihapitiya?

  As a South Asian tech worker. That's, yeah, that is what I heard.

• 1:26:59Jason Calacanis?

  I didn't, I didn't read that. I read that he was, um, that he was, uh, very like. robotic and formulaic or something but what did you how did you read it as a as the palest white guy on the panel?

• 1:27:10David Sacks?

  There was something almost personal about the way that both Christie and Pence seemed to react to Vivek. It was almost like, who are you, you young whippersnapper to be on the stage with me? Especially Pence, I've been the Vice President, who are you? You know, and almost resentment.

• 1:27:26Jason Calacanis?

  Here's what his quotes were.

• 1:27:27David Sacks?

  Dismissive, and I think there was a resentment that even before this debate Vivek was rising in the polls and those guys were going nowhere.

• 1:27:34Jason Calacanis?

  Let me explain it to you Vivek.

• 1:27:36David Sacks?

  And again, it's not just oratorical skill, it's the substance of the issues and where he's willing to go that these other candidates are not.

• 1:27:43Jason Calacanis?

  Here are the quotes you respond to. Let me explain it to you Vivek. I'll go slower this time. Now is not the time for on the job training and we don't need to bring in a rookie. All of this dismissive stuff from Pence to Vivek got some applause because, you know, conflict and confrontation gets applause by these lunatics in the audience who were like, it was like a.

• 1:28:04Chamath Palihapitiya?

  Well, you also get an allocation of seats for your own team, so.

• 1:28:07Jason Calacanis?

  Yeah, so it was the cheering, I don't know if it matters.

• 1:28:09David Sacks?

  The only reason why Pence was VP is because a rookie got elected president.

• 1:28:13Jason Calacanis?

  Yeah, that's a very good, it's a good insight. Yeah, that was very weird. I thought the thing that was very interesting, listen, not to make it all about Trump, but he was the quote unquote elephant that was not in the room, was the un dying support for Pence. You had everybody say Pence did the right thing on January 6th. What was your takeaway from that, Sax? Because there were some, there was a mix of boos and cheers for Christie when he kind of said like, we need somebody who doesn't behave this way. It's unbecoming of the presidency referring to Trump. So what was your take on, is the Republican Party in this audience trying to move past Trump, given all these indictments? I'm going to leave the Trump Stockholm syndrome and Trump derangement syndrome out of this just objectively.

• 1:28:55David Sacks?

  Yeah. Well, I thought DeSantis, I thought DeSantis had the best response, which is, listen, if we spend our time relitigating January 6th and looking in the rearview mirror, we're going to lose to Joe Biden. This is exactly the conversation and the debate that Democrats want us to be having. I think that's just factually true, that if the Republican Party spends its time debating January 6th, that's playing into Biden's hands.

• 1:29:18Jason Calacanis?

  So you don't think Trump can? Necessarily beat Biden, that these other candidates have a better chance of beating Biden? Is that what you don't believe?

• 1:29:25David Sacks?

  No, I didn't say that.

• 1:29:26Jason Calacanis?

  No, I'm asking, it's a question.

• 1:29:27David Sacks?

  Focusing, focusing on relitigating.

• 1:29:29Jason Calacanis?

  Okay.

• 1:29:30David Sacks?

  January 6th is, not only is it a waste of time, it's just a loser for Republicans. And by the way, it's Trump's worst quality to keep harkening back to the last election. Even I think his fans and supporters don't want to hear that.

• 1:29:42Jason Calacanis?

  Who has a better chance of winning? Some pairing of these candidates, Sacks, or Trump and one of these candidates versus Biden? Heads up, you know, does, uh, something like DeSantis, Vivek, or Haley and Vivek? You know, pick, pick your combination here, have a better chance versus Biden than Trump? Plus one of these.

• 1:30:04David Sacks?

  I think it's tough to say, but I, I do think that Trump has really high negatives. And in order for him to win the presidency, he's got to flip something like two or three out of five states, like swing states that voted against him last time. And I do think that this is one of the stronger arguments that DeSantis makes is that, you know, I could deliver those states, whereas Trump may not.

• 1:30:30David Sacks?

  So I think there is an electability argument for DeSantis.

• 1:30:33Jason Calacanis?

  Okay, and so Friedberg, hearing all this.

• 1:30:37David Sacks?

  By the way, I'm not saying that that's what's going to happen, but I, I do think we know that Trump does have very high negatives and.

• 1:30:43Jason Calacanis?

  Yeah.

• 1:30:44David Sacks?

  He's gonna have to flip some states that he lost before.

• 1:30:46Jason Calacanis?

  He's, he's gonna have a lot of Democrats and women come out to vote against him. He supercharges the base in the way Hillary charged the other way.

• 1:30:53David Sacks?

  Can I say one other thing about?

• 1:30:54Jason Calacanis?

  Of course.

• 1:30:55David Sacks?

  DeSantis' performance in that debate? So I know that he doesn't stand out in the way that, you know, Vivek or some of these other candidates do, because he didn't deliver any zingers. And also, he wasn't the brunt of attack. I think we all thought that maybe there'd be a lot more incoming for him and the incoming really went for Vivek. But I think that he had a strategy in that debate. This is my interpretation. It's not based on

• 1:31:18Jason Calacanis?

  Yeah, go ahead.

• 1:31:18David Sacks?

  any insider knowledge or anything like that, which was the way he answered questions was, I think, to be broadly acceptable to all the different factions in the GOP. So like I mentioned, there's kind of the MAGA faction, there's the neocon faction, and there's the religious right faction. And his answers may not have been the ones that were most loved by any of those factions, but I also think that none of his answers disqualified himself with any of those factions.

• 1:31:47Jason Calacanis?

  Got it.

• 1:31:47David Sacks?

  Which is kind of hard to do, given how much they're at each other's throats.

• 1:31:50Jason Calacanis?

  So Sax, if this was a poker tournament and this was the final table, would you say the strategy for DeSantis was, hey, listen, I'm going to let these other guys shoot it out. I'm just going to sit on my big chip stack here. I'm in second place. You got, let me let, let's let the field eliminate themselves. I'm going to just protect my stack. I'm not going to play a lot of hands here. He's just sort of sitting and waiting for it to get down to three or four people and then he'll mix it up some more. Is that the strategy?

• 1:32:15David Sacks?

  I think he came across as the grown up.

• 1:32:17Jason Calacanis?

  Mm hmm.

• 1:32:18David Sacks?

  Nobody really took swipes at him or shots at him, and he didn't really take shots at anybody else. He did, again, try to focus the Republican Party on what it's going to take to win.

• 1:32:26Jason Calacanis?

  Mm hmm.

• 1:32:26David Sacks?

  He was one of the only people on that stage who had criticism of Biden. I think it was a mistake not to criticize Biden's record.

• 1:32:32Jason Calacanis?

  Yeah, I was shocked at that. That was such a weird thing that they were all going after Trump and Vivek and nothing about Biden.

• 1:32:40David Sacks?

  The only attacks on Biden that I even remember from that night were from Trump's interview with Tucker, where he criticized-

• 1:32:46Jason Calacanis?

  Oh, God, he destroyed him.

• 1:32:47David Sacks?

  He criticized Biden's lack of physical and mental acuity. But look, I think that if, if the convention were ultimately to be a brokered convention, which all the different factions of the GOP had to agree on a candidate, then I think DeSantis would be that candidate. Because he may not be the candidate who is most loved by any of those factions, but I think he's made himself the most broadly acceptable to all of them. The problem is, I don't think that's the way that candidates are chosen. You know, I think that what happens in practice is that the factions are trying to defeat each other. And that one faction's going to win. And I think it's probably going to be the MAGA faction. So that's the problem, I think, with the strategy. But, look, he came across as the grown up and he came across as the most broadly acceptable.

• 1:33:30Jason Calacanis?

  Okay, so if this is a final table of a poker tournament, and Trump is gonna sit down and debate three of these people, Chamath, who's gonna be left to debate Trump? And be the final three or four seats here? Which three?

• 1:33:46Chamath Palihapitiya?

  I think it'll be DeSantis, Vivek, and it'll be either Tim Scott or Nikki Haley.

• 1:33:54Jason Calacanis?

  Interesting. Friedberg, who are the final three who are gonna debate Trump? You know, in debate number four or five?

• 1:34:00David Friedberg?

  I don't know if he's gonna show up. I don't know why he would. If he's up fifty, sixty, seventy percent in the polls. I mean, it would be, it would just be such a Trump move to just not show up to any of these debates and just like get elected.

• 1:34:12Jason Calacanis?

  Play the game.

• 1:34:13David Sacks?

  How incredible a debate would that be if it was Trump, DeSantis, and Vivek?

• 1:34:17Jason Calacanis?

  Ooh, fireworks.

• 1:34:19David Sacks?

  And then my, my fourth would be Nikki Haley. I think she did a good, she had her moments in that debate. I think she had good advice for the Republican Party on the abortion issue.

• 1:34:26Chamath Palihapitiya?

  Yeah, she did a really great job.

• 1:34:28Jason Calacanis?

  And spending. She pointed out how, you know, much money. I thought that was a Tea Party moment for her. That's when I warmed up to Nikki Haley a bunch. She's like, listen, we also approved, you know, six, eight trillion dollars. We gotta look at ourselves. And it was like, okay, is it the Tea Party, 2010 here? I thought that was a great moment. Who do you, who do you have left, Friedberg? Everybody else played the game. Play along. Who will be the final three here to debate Trump if Trump shows up? Play along for the game.

• 1:34:52David Friedberg?

  I mean, Vivek seems to be in a good place.

• 1:34:55Jason Calacanis?

  Okay.

• 1:34:57David Friedberg?

  I don't know. DeSantis has a lot of money. So he's probably gonna stick around.

• 1:35:01Jason Calacanis?

  Yeah, so Vivek and DeSantis are, we all have consensus. I go with Nikki Haley or Chris Christie.

• 1:35:07David Friedberg?

  I don't think he's gonna show up.

• 1:35:09Jason Calacanis?

  We got your, we got your point.

• 1:35:10David Friedberg?

  Yeah.

• 1:35:11David Sacks?

  You're critical of the fact that Vivek is having a boom or a surge based on his oratorical skills, which I think you regard as being a shallow way to, a shallow way to choose a candidate.

• 1:35:22Jason Calacanis?

  I'm gonna ask a question.

• 1:35:22David Sacks?

  But you're showing no enthusiasm for DeSantis, who actually has a track record of being the most capable executor.

• 1:35:28David Friedberg?

  Oh, no, no, I'm not, by the way, I didn't, I'm not, we, we're not talking about who I would vote for president. We even didn't have that comment. Like, we didn't even ask that question once.

• 1:35:34Jason Calacanis?

  Okay, so we ask it now. Putting aside Trump, who do you pick?

• 1:35:39David Friedberg?

  What was really interesting is hearing the governors speak about their skills. I think Nikki Haley, Chris Christie, Burgum. DeSantis all had moments where they shined from, from, from, as I said, from my perspective, from a content perspective, which is what I was talking about at the beginning, which people largely ignore, which is that they actually had quite a lot to draw from and, you know, points of view on policy that seemed pretty strong.

• 1:36:01Jason Calacanis?

  Here we go. Final question. Final question. I want you to give me your one and two, not Trump. Sacks, we know DeSantis is number one for you. So then who's, who's your number two to pair with him? Who would you pair with?

• 1:36:11David Sacks?

  Wait, to be what? To be the candidate?

• 1:36:14Jason Calacanis?

  To be the, the ticket. Republican ticket. You're going to go DeSantis one. And then who do you put with him as, as the number two?

• 1:36:19David Sacks?

  Well, for me.

• 1:36:22Jason Calacanis?

  DeSantis N?

• 1:36:23David Sacks?

  I think that the only candidates who have acceptable answers on what I regard as the number one issue of our time, which is Ukraine, because that could lead to World War III, the only candidates who have acceptable answers are Trump, Vivek and DeSantis, meaning they've all been pretty clear they would de-escalate. I think all the other candidates have basically indicated in one way or another that they would escalate that war.

• 1:36:45Jason Calacanis?

  So DeSantis, Vivek is yours?

• 1:36:46David Sacks?

  So those three candidates are the only ones that are, that are acceptable to me.

• 1:36:48Jason Calacanis?

  Okay. So we take Trump off. If Trump doesn't run, which that's my personal belief, but just of the people who were on stage last night, you're going DeSantis. Vivek is your ticket. Chamath, who's your ticket? After one debate, not counting Trump, if, if the Republican ticket. Who do you think's Republican?

• 1:37:03Chamath Palihapitiya?

  You know, look, I like to buy these deep out of the money options. I will go out on a limb. I think that Vivek has a really good chance of winning this Republican nomination. That's what I saw. I saw.

• 1:37:11David Friedberg?

  Like outright against Trump?

• 1:37:13Chamath Palihapitiya?

  Yeah. I, and, and the reason is.

• 1:37:15Jason Calacanis?

  We're taking Trump off the table. So just picking him.

• 1:37:16Chamath Palihapitiya?

  You know, for example, for example, no, no, no, no. I, I really do think he's, he, he can win this thing. And for example, I thought it was very clever when he said that he had a line. He said, Donald Trump was the best, let me be categorically clear. Donald Trump was the best president of the 21st century. And I was like, what? And then I thought about it. It's, and I thought, why is he saying it? Does he say it because he believes it? Or is he saying because it's like a, a tactic? And there's probably bits of both.

• 1:37:48Jason Calacanis?

  Yep.

• 1:37:50Chamath Palihapitiya?

  Because I do think that there are elements where he fundamentally does believe that Trump has at least shined the path forward. And so I think he does believe it to some degree. But then I thought it's even smarter to have said it. And again, this is where I go back to, I'm not sure that that's oratory skills versus like understanding, you know, game theory.

• 1:38:11Jason Calacanis?

  Strategy.

• 1:38:11Chamath Palihapitiya?

  And, and strategy and being a strategic thinker and trying to win. I thought that that was a very smart thing to have said. And all along that evening, I thought that he did the best job of preserving optionality for the Trump base to say, you know what? Vivek is all of the positive features of Trump without some of the negatives. So let's just clean up the ticket and let's go. And I think that there's still, again, there's a long way.

• 1:38:39Jason Calacanis?

  Yeah, of course. I like the call. I like the call.

• 1:38:41Chamath Palihapitiya?

  But I would buy that deep out of the money option.

• 1:38:43Jason Calacanis?

  And who's your number two then? We're going one, two here, one, two. Either as to pair with Vivek or your number two choice in terms of.

• 1:38:50Chamath Palihapitiya?

  No, then if Vivek doesn't figure out a way to slipstream past Trump, the Trump will win the nomination.

• 1:38:56Jason Calacanis?

  Okay, taking Trump out of the rest, who's your number two?

• 1:38:59Chamath Palihapitiya?

  Vivek.

• 1:38:59Jason Calacanis?

  Okay, great. Fascinating to see this happening.

• 1:39:01David Sacks?

  I agree with what a lot of what Jamal said. I think Vivek is positioning himself to be the backup candidate for the MAGA wing.

• 1:39:11Jason Calacanis?

  Yep.

• 1:39:12David Sacks?

  And he's doing it by never attacking Trump and by complimenting him. By the way, saying that Trump was the best president of the 21st century, there's only been three. It was George W. Bush, Obama, and then Trump. Right? Oh, sorry, Biden. Sorry, Biden. So there's been four. George W. Bush was one of the worst presidents in American history.

• 1:39:30Jason Calacanis?

  Yeah, so it's either Obama or Trump.

• 1:39:32David Sacks?

  Obviously, a Republican candidate is not going to think highly of Obama or Biden. So it kind of narrows it down, doesn't it?

• 1:39:40Chamath Palihapitiya?

  Yeah. I just went with the intelligence of actually saying the words.

• 1:39:44Jason Calacanis?

  Yes, strategically brilliant.

• 1:39:45David Sacks?

  Yeah, no, I agree.

• 1:39:47David Friedberg?

  Sax, what do you think about Vivek's unpopular statement? And it may, I'd like to hear whether it's unpopular with the base, but it was certainly unpopular in the room last night, that the climate change agenda is a hoax, which drew a lot of boos.

• 1:39:59Jason Calacanis?

  That was weird.

• 1:39:59David Friedberg?

  Is that like, is that a lightning? Bolt kind of thing to say, why would he say that? And what's the strategy there?

• 1:40:09Jason Calacanis?

  It's like Trump saying he loves coal. He loves coal miners. It's just pandering.

• 1:40:13David Friedberg?

  It felt to me a little bit like he was trying to say the agenda is a hoax, meaning like all the ESG stuff is nonsense.

• 1:40:18David Sacks?

  Exactly.

• 1:40:18David Friedberg?

  But it comes across as him saying, climate change isn't real and he's got to now deal with the repercussions of saying that.

• 1:40:23Jason Calacanis?

  Climate change is strategic.

• 1:40:26David Sacks?

  I think it's, um, I don't, I don't, I don't think you know what he believes, J. Cal, but.

• 1:40:30Chamath Palihapitiya?

  Yeah. His follow-up comment around that was, he said that it is an economic yoke on our country. Because the combination of subsidies and the lack of expansion of carbon is what's holding back the country economically. So that's, I think I remember him tying these two things together. So that's, that's probably where the statement.

• 1:40:49Jason Calacanis?

  No intelligent person doesn't believe that the planet's not heating up. Come on. And that it's not better to go to renewables. That's just.

• 1:40:55David Sacks?

  How do you know? Have you looked at the science, J. Cal?

• 1:40:57Jason Calacanis?

  Of course I have. Yes. It's massive consensus.

• 1:40:59David Sacks?

  Deep on the science?

• 1:41:01Jason Calacanis?

  You know, as deep as a person needs to go. Friedberg, we, we, we're not going to have to debate now.

• 1:41:04David Sacks?

  You just treat it, look, it's just something you're supposed to believe in.

• 1:41:08Jason Calacanis?

  No, I'm not.

• 1:41:08David Sacks?

  I'm, I'm not saying that I don't believe it, but I have been.

• 1:41:10Jason Calacanis?

  The statistics of how the planet has gotten warmer. That's it.

• 1:41:12David Friedberg?

  I will say Sacks is right, that it has become a thing that it's like, we're all supposed to take as given. No one is going to go up and say, here's the science that validates, here's the data that validates, here's, there's, there's some empirical evidence. And then people use counter empirical evidence to try and counter it. And that's what makes it a little bit of a, a movement now, which is the institutions, the elites, however they're framed, have been wrong so many times on the things that they told us were given. That we're supposed to assume that this is a given too. F that. I'm not going to be told what to believe anymore. And I don't want to be told what to believe anymore is exactly what people.

• 1:41:49Jason Calacanis?

  Let me, let me state my position clearly.

• 1:41:51David Friedberg?

  That's what they heard from that song last week. And that's what they heard, you know, in Vivek's.

• 1:41:55Jason Calacanis?

  Let me state my position clearly.

• 1:41:56David Sacks?

  I totally agree.

• 1:41:57Jason Calacanis?

  Yeah.

• 1:41:57David Sacks?

  Here's the thing, after COVID.

• 1:41:59David Friedberg?

  Without me even making a comment on climate change.

• 1:42:01David Sacks?

  Hundred percent. We were told so much bullshit that was in the name of science during COVID.

• 1:42:06Jason Calacanis?

  Yeah.

• 1:42:07David Sacks?

  They told us the vaccines were safe and effective.

• 1:42:09Jason Calacanis?

  I just want to clarify my position before you respond to it. It's undeniable that temperatures have risen. I think it's a crazy experiment to run to not try to lower it. It's just a crazy experiment. The planet is precious. I don't think we should run it. I am not dogmatic about it. It's not a religious thing. I'm not genuflecting.

• 1:42:27Chamath Palihapitiya?

  It's not an experiment we're running, J. K. It's called human development and growth.

• 1:42:30Jason Calacanis?

  Yes, and the temperature has gone up, and the temperature goes up. So why wouldn't we use renewables and nuclear when not pollute? Because not polluting is good, too.

• 1:42:40Chamath Palihapitiya?

  When you have self-proclaimed scientific experts and/or 16-year-old girls shaming everybody with pretty flimsy data, there was a while where everybody just said, "Ma, they must be right." And COVID exposed the hoax. And so now, we're a lot less prone to believe these self-proclaimed intellectuals and their jargon and their nonsense. So, ask me, how much money have I invested in climate change with all that data? Zero. Ask me how much money I've invested in technologies that will benefit climate change as a byproduct of national security? Hundreds of millions of dollars.

• 1:43:25Jason Calacanis?

  Yes.

• 1:43:26Chamath Palihapitiya?

  And the reason I give you that example is that, for me, that framing was just such a turnoff because I couldn't buy into it.

• 1:43:33Jason Calacanis?

  Yeah, there are multiple reasons.

• 1:43:35Chamath Palihapitiya?

  But then the more pragmatic, realistic framing, which allowed us to actually say, "Maybe you're right, but maybe you're wrong. But let's not even debate the issue. Let's just go and make sure we're not dependent on another country and fighting endless wars." That got me off my ass to do stuff. And I think there's a lot of people in America that are in that second category. They don't want emotionally riddled dogma to drive their life and how they're forced to make decisions.

• 1:43:58Jason Calacanis?

  You can come up with three or four really good reasons to not

• 1:44:03Jason Calacanis?

  Keep burning fossil fuels. They're dirty, they're pollutants. There are better options that are more sustainable, that are more cost effective. It's more cost effective to put solar in than to burn coal or build a new coal plant. So there's economic reasons and then there's of course, hold on, let me finish.

• 1:44:18David Sacks?

  I don't think we're debating those points. What we're saying is we're not automatically going to trust experts telling us certain things without doing our own research.

• 1:44:25Jason Calacanis?

  I'm not blindly trusting anybody. I'm taking the body of evidence and saying that entire body of evidence, geopolitical.

• 1:44:31David Sacks?

  I don't believe you've really looked at the evidence. I don't believe you've gone deep on this issue.

• 1:44:34Jason Calacanis?

  Okay, anyway.

• 1:44:35David Sacks?

  I haven't gone deep on this issue. That's all I'm saying. I'm not in a position to agree or disagree with you.

• 1:44:40Jason Calacanis?

  If you listen to what I'm saying, if you listen as opposed to telling me what I think and you listen to what I'm telling you, there are many reasons to pursue sustainable energy, clean energy, and geopolitics is one of them, and, you know, polluting the environment is one of them, and temperatures rising, if that indeed results in damages to the oceans and, you know, weather patterns, there are five or six great reasons to stop burning coal and stop burning oil.

• 1:45:09Chamath Palihapitiya?

  Look at these two climate whitewashers we're living in, in this moment. People were so convinced they just needed to roil the country around the hurricane hitting California. Then by the time it landed, it was a storm. There was rain in Los Angeles. I asked people here when I got here, I said, "How was this hurricane?" They're like, "It wasn't a hurricane." And in fact, the news were so tilted about it, they had to call it, "It could have been a hurricane," but it was just a storm.

• 1:45:35Jason Calacanis?

  Yeah, they gave ratings, ratings.

• 1:45:36Chamath Palihapitiya?

  Second is this thing in Maui, it turns out, Michael Schellenberger has done some pretty good work on this, is exposing that a lot of the reason these fires may have started was because of this radical climate agenda that caused the utility to not invest in the protective measures they should have around power lines. That is crazy, Jason.

• 1:45:58Jason Calacanis?

  Oh yeah, I'm not defending what happened in Maui. It's obviously incompetence. We should be burying, we have the same issue in California, which is wind.

• 1:46:05Chamath Palihapitiya?

  Dogmatic belief, there's a consequence.

• 1:46:07Jason Calacanis?

  I'm not a dogmatic believer.

• 1:46:08Chamath Palihapitiya?

  No, I'm not saying you are. I'm just trying to make, I'm not saying you are. I'm trying to make this point. When people dogmatically believe bodies of evidence that they themselves don't interrogate fully, they may, it may lead them to conclusions and then actions that you are now seeing have measurable human consequences. If you look at PG&E in California, it's riddled with these issues.

• 1:46:28Jason Calacanis?

  Yeah, they shut our power off because they're afraid that wind is going to blow down power lines and start fires. Yeah, I mean, and we just need to bury them, so.

• 1:46:35Chamath Palihapitiya?

  So I think that it would be great to like not debate the climate issue, put a pin in it, and instead just say, we all want our kids to be able to have clean air around us. We want clean water to drink, and we want to make sure that we have the resources to be productive as human beings without having to send our kids to war, or without putting the country in danger.

• 1:46:54Jason Calacanis?

  Hundred percent, which is exactly my point. There are so many reasons to take this seriously and move to renewables and nuclear. All right, listen, this has been an insanely great episode. Hey, uh, let me just get one person's comments. So here's your, here's your, uh, red meat for, uh, Sacks here. It sounds like there was, uh, the, the coup, um, 60 days later, the guy who was running the coup in Russia had a little accident, so random. Uh, maybe your thoughts, Sacks?

• 1:47:23David Sacks?

  You're talking about Prigozhin?

• 1:47:25Jason Calacanis?

  Yeah, I mean, he had some mechanical difficulties on his PJ. I don't know what happened. Is he not sending that citation in for maintenance? What happened? They had a bad engine or something? It's so random. Poor guy.

• 1:47:34David Sacks?

  The latest reporting from the New York Times this morning is that Prigozhin's plane was not shot, shot down, but rather they believe there was an explosive device on it.

• 1:47:42Jason Calacanis?

  Oh.

• 1:47:42David Sacks?

  So we don't know, you know, we don't, we don't know exactly who planted it.

• 1:47:46Jason Calacanis?

  I think it was a bird strike, something random, like a bird strike.

• 1:47:48David Sacks?

  No. Somebody took him out. Somebody took him off the board.

• 1:47:51Jason Calacanis?

  Really? Oh, must have been, must have been Ukraine, right? That, that's who you're putting it on? It's Ukraine?

• 1:47:56David Sacks?

  No, I mean, I think it's probably pretty obvious who did it, although we won't know for sure.

• 1:48:02Jason Calacanis?

  Say the name, say the name.

• 1:48:05David Sacks?

  Listen, I think that

• 1:48:08David Sacks?

  allegedly, allegedly. That's what you always say whenever Hunter Biden's accused of doing something, you always have to insert allegedly.

• 1:48:15Jason Calacanis?

  There was a little cocaine and maybe some bribes.

• 1:48:18David Sacks?

  I think this resolves the question of who came out on top during that mutiny. There were a lot of people speculating that somehow Prigozhin had the upper hand, or he was paid off, or what have you.

• 1:48:29Jason Calacanis?

  Right? Remember, there was a line of thinking, oh, this wasn't a coup. If it wasn't a coup, then why did Putin whack him?

• 1:48:36Jason Calacanis?

  Whack, whack. And it was exactly 60 days later. Is that correct? That was the other thing. Is that?

• 1:48:41Chamath Palihapitiya?

  Can I ask a question? How funny is it that it's like Putin's like, hey, Prigozhin, come, come and see me. We're good. Nothing to worry about.

• 1:48:47Jason Calacanis?

  I'll send a private jet.

• 1:48:50Chamath Palihapitiya?

  And then it's like, listen, where are you going to a black? You can take my PJ. And he's like, see you later. How does this happen? Like, you can't even write this stuff.

• 1:48:59Jason Calacanis?

  And related news, Friedberg is sending his PJ to take me down to the Owen summit. Oh, thanks for the ride, Friedberg.

• 1:49:04David Sacks?

  I told you, it's like Michael Corleone. Apparently, there's a meeting about a month ago, I remember it being reported, where Prigozhin and the other heads of Wagner came to meet with Putin. And the deal that Putin supposedly offered was that Wagner could stay together, but they had to report to the Russian military. And the Wagner commanders were on board with it, but one person objected, and that was Prigozhin. So it's a little bit like, remember that the meeting between Michael Corleone and Mo Green in Vegas?

• 1:49:32Chamath Palihapitiya?

  Green, yeah, yeah, yeah.

• 1:49:33David Sacks?

  Where, you know, Michael's like, think of a price, and Mo Green's like, you don't buy me out, I buy you out. That kind of reaction.

• 1:49:42Jason Calacanis?

  Yep.

• 1:49:42David Sacks?

  And the guy had some sort of death wish, I guess.

• 1:49:45Jason Calacanis?

  You know what they say, beware the dog that doesn't bark. Putin said nothing for the last two months. He was like, yeah, it's all good. Nothing out of the Putin camp. And then boom. Putin is a murderous lunatic who must be stopped and contained.

• 1:49:59David Sacks?

  Well, I think this is the opposite of being a lunatic. I think this is somebody who is very cold and calculating.

• 1:50:04Jason Calacanis?

  Okay, yeah, murderous, calculated sociopath.

• 1:50:06David Sacks?

  He figured out how to diffuse a mutiny. I don't think it was a full-on coup, but a mutiny that would have been very disruptive to his frontline if he had basically tried to violently suppress it. So he cuts a deal. Where basically he offers banishment to Belarus. Prigozhin was supposed to go to Belarus. By the way, we don't know exactly why Prigozhin returned to Moscow or St. Petersburg. He was supposed to be staying in Belarus or Africa. So maybe he violated the terms of his probation. We don't know. There were all these people on social media who were pinning their hopes for regime change and liberal reform within Russia on Prigozhin, which was always absurd because he was this

• 1:50:46David Sacks?

  warlord whose behavior and conduct was even more erratic and violent than Putin. So he was never going to be a great vessel for liberal reform in Russia. Nonetheless, there were all these people who pinned their hopes for regime change in Russia on Prigozhin. We can see now what a stupid idea that was. The Russian regime, whether you like it or not, is stable. It is not unstable. Russia is winning the war. And you may hate Putin, but he is still master of Russia. And eventually, we're going to have to deal with him. These fantasies that we're going to be able to regime change him, I think are absurd, and they've led us to this horrible point.

• 1:51:24Jason Calacanis?

  Okay, for the dictator, for the Sultan of Science and focused sass sax with the slick back hair. I am the most grateful moderator. We'll see you next time. Bye-bye.