Anthropic's Fable Backlash, Nationalizing AI, Inflation Heats Up & California’s Broken Elections

1. 0:00 – 0:19

   Besties are back!

   1. JCJason Calacanis0:00

      All right, everybody. Welcome back to the number one podcast in the world. It's your favorite podcast. It's your podcaster's favorite podcast. It's the podcast that everybody likes to rip off for 50 episodes, and then they quit.

   2. SPSpeaker0:10

      [laughs]

   3. JCJason Calacanis0:10

      But the All-In Podcast is not quitting. We're doubling down with the original quartet. Everybody's here for a big, big week, lots of

2. 0:19 – 29:16

   Anthropic gets massive backlash over secret Fable nerfing and privacy concerns

   1. JCJason Calacanis0:19

      debates, and we gotta start with Anthropic. Anthropic released a Mythos-level model with some interesting guardrails and, uh, seems as though Dario is back to blogging. Okay. The model's called Fable 5. No idea why they're calling it that. It released on Tuesday, and it tops every benchmark, nearly every benchmark. The tokens, however, cost twice as much as Opus 4.8, but it should use less tokens overall because it's theoretically that much better. Unclear if this is going to alleviate some of the hand-wringing around the cost of tokens. But you'll remember in April, Anthropic famously did not release Mythos because publicly, uh, it had some strong hacking capabilities. So they gave it to some folks, and we had, um, the CEO of, uh, Nikesh of Palo Alto Networks, who said, "Hey, Mythos was the real deal," and that they used it to seal up some vulnerabilities inside their shop. Obviously, this new model is sensitive, uh, to topics like bioweapons, hacking, all that stuff are blocked in it. But they got a big developer backlash, and then I'll get your feedback after I explain this. While using Fable, Anthropic stores all the prompt data you enter for at least 30 days, and so that's a bit of a privacy issue. And if Fable 5 detects you're doing frontier AI research, in other words, using their model to make a better model, competitive model, they were downgrading you, but they weren't telling you, and this was buried deep in a 319-page document. So many kerfuffles, freak-outs going on on X over this, but they've since walked it back a bit, quote, unquote, in Wired, "We're changing Fable 5 safeguards for frontier LLM development to make them more visible." I'm gonna stop there. Chamath, what's your take on Anthropic and these extraordinary models they keep dropping and how they're handling the release of them? Are they being thoughtful? Are they being dramatic and drama queens? A little bit of both? Where do you stand on it, you know, after getting Nikesh's feedback and seeing the latest model come out? Have you played with it? What's going on at 8090 and The Software Factory in terms of benchmarking it as well?

   2. SPSpeaker2:37

      It's a really incredible model, and so kudos to these guys for continuing to push the boundaries of the closed frontier lab models. They're firing on all cylinders. I think that it creates a pretty obvious risk now, and I think that obvious risk is twofold. One is Anthropic has essentially shown their hand, which is that they will increasingly take in prompts, evaluate the prompts, and decide what to do with them before they generate output to you.

   3. JCJason Calacanis3:16

      Hmm.

   4. SPSpeaker3:17

      And I think if you were a person, you should generally now think there's a risk of censorship. If you're a company, I think it's almost a non-starter, and the reason is because you could accidentally trip one of these things without even knowing it. A downstream scientist using the Claude APIs could trip it. A business executive inside your corporation could trip it. A person doing scientific molecular research could trip it, and all of a sudden you'll get cut off from a very important source of business differentiation for yourself. So I think if you take both of those two things together, we're at this very unique moment in time where I think companies need to start underwriting this next phase of AI, which is, how do I have control? Who am I allowing to learn off of all of this information? Do I wanna have single point of failure risk with respect to AI? And I think the answer is that you need broad diversity and a governance approach that's better managed.

   5. JCJason Calacanis4:27

      Hmm.

   6. SPSpeaker4:28

      One thing I'll say about Anthropic is they tell the truth.

   7. JCJason Calacanis4:32

      Yes.

   8. SPSpeaker4:33

      It's just that the truth sucks. When you actually take it and you eat it, and you're like, it's in your tummy and you're like, "No, this is not good. I don't like this." And so there's the censorship risk on the one hand, and then there's just the governance business risk for enterprises on the other. Both are not good.

   9. JCJason Calacanis4:48

      Friedberg, running your own company now, uh, and I'll let you back to clean up here. Sacks, obviously you'll have a lot to say. But Friedberg, running your company, do you worry about getting rug pulled by one of these companies, investing your time into one of these platforms, having them then constrain your use of it and/or take what you're doing at Ohalo, put it into their model and make it available to other people? What, what concerns do you have as a business owner at the forefront of your field using these tools?

   10. SPSpeaker5:15

       It's a great question. The, the terms of service is pretty clear that they can't take what you're doing and put it into their model, that they won't take-

   11. JCJason Calacanis5:22

       Do you believe them when you read that?

   12. SPSpeaker5:24

       I, I'm not sure, to be honest. There are things I'm concerned about, but we've decided to throw caution to the wind because we do a lot of proprietary work in genomics. What that means is we're looking at different genes or gene variants, trying to estimate the impact that that gene or gene variant might have on a living organism, like we, we work in plants, obviously, in agriculture, and we will do things like RNA guide design for gene editing-based tools. We will do predictions on what gene may or may not have some phenotype. So there's a lot of genomic modeling work that we have found these models to be incredibly valuable at supporting us with over the last couple of years. So going back about six months- We were able to very simply and cleanly do things like design a genetic construct that you would then use to make a specific protein, and the, the tool was very easy to use to do that sort of research, and extremely valuable. This is the kind of work that many scientists would spend a lot of time doing, and these models were very good at doing very quickly. Over the last couple of weeks, they've begun to restrict the ability to use the models to do that work. And the premise is that there's some sort of bioweapon, uh, type risk that folks have theorized could happen using these tools. And as a result, we're losing the capacity to use these models for this very important scientific development work. As a result, we are likely going to end up needing to use open source models and run them locally ourselves.

   13. JCJason Calacanis6:59

       Hmm.

   14. SPSpeaker6:59

       So I, the reason I walk through all of that is so people can really understand the context of what's gonna happen here. As folks like Anthropic say, "Hey, we're going to restrict access or censor the output of these models," it is going to force companies like ourselves, who still wanna take advantage of the capability of these LLMs, to go and get open source tools and run them. And what are the best open source models today? They're Chinese.

   15. JCJason Calacanis7:22

       Yeah [laughs] , they are.

   16. SPSpeaker7:23

       And that is a major concern. The, the American open source models are not as good as the Chinese open source models, so the restrictions that Anthropic and others are putting upon themselves and upon the industry is forcing a lot of companies to go and get open source Chinese models and run them. We're seeing this across the landscape with startups-

   17. JCJason Calacanis7:41

       We see it in all of our startups, yeah

   18. SPSpeaker7:41

       ... with large scale enterprises. Everyone's making that move.

   19. JCJason Calacanis7:44

       Yeah. And th- this is something we've been talking about here with Apple and their silicon and how well you can run these models. Also, I predict your next card you'll turn over is you'll start making your own models, Friedberg. You'll take all this data you have-

   20. SPSpeaker7:57

       It's exactly right. And we'll, we'll start, we'll start with the core model, combine it with our data, and then we'll have our own genome language model or our own prediction model that we'll then use internally, and I think that's where folks are going. But the reason I point this out is because a lot of folks are feeling the pressure from Anthropic doing this, and they're feeling the pressure from politicians repeating the scary words that are being said by Dario-

   21. JCJason Calacanis8:20

       Yes

   22. SPSpeaker8:21

       ... and others. And as a result, they are going to try, and they are already trying, to force either natural enforcement or politicized enforcement upon the model providers in a way that is ultimately gonna benefit Chinese open source model providers. And that is a scary thing, because we are gonna damage our own kind of economic viability. You can't just stop AI. As much as everyone says AI is doomsday, by stopping AI or trying to stop AI through this political action and social, you know, kind of behavior, you are fundamentally going to give someone else the advantage 'cause the AI isn't gonna go away.

   23. JCJason Calacanis8:54

       Correct.

   24. SPSpeaker8:54

       So the reason I describe what we're doing is for everyone to really understand and grok that you can't just turn off AI and turn off access to these things. What you will do is you will force the hand of someone else to now have an unfair advantage because you're unfairly restricting-

   25. JCJason Calacanis9:08

       Yes

   26. SPSpeaker9:08

       ... your models and your access to those models.

   27. JCJason Calacanis9:09

       Well, well, really well said, Friedberg. Sacks, what's your take just in terms of the chess board, in terms of we, we got the business case here, we got the local case, but there's a lot of issues here with Anthropic in terms of them essentially throwing up every red flag to get regulated, to induce, and it'll be our second story, the Bernie Sanders seizing [laughs] half the equity of these companies. But man, th- this is saying, "Look over here, we're starting a fire. Regulate the hell out of us," which also then makes you wonder, hey, maybe I should be doing my own model. Maybe I should be embracing open source models. How's this chess board developing here, Sacks?

   28. DSDavid Sacks9:55

       Well, look, eight months ago, I said that Anthropic was engaged in a very sophisticated regulatory capture campaign based on fearmongering, and people at the time thought that was a very spicy take. But eight months later, I think you're hearing a lot of people say it. In fact, I think it's almost now becoming a new consensus. And one of the things I think your summary didn't quite capture, J Cal-

   29. JCJason Calacanis10:17

       Yeah

   30. DSDavid Sacks10:17

       ... is the sense of the violation of trust and how much outrage there is in the developer community over this latest Fable release is not just the fact that they're doing mandatory surveillance. Remember, this is a company that said that it was against government surveillance. They are now retaining for 30 days every prompt and every output you send to one of these Mythos class models. There are no exceptions. Even enterprise customers who had signed zero data retention agreements, they do not have a choice, or I guess they can just not use the new Fable or, or Mythos class models. But they retain all of your data for 30 days, and it's not just the prompts and the output. Remember, it's all the context you share with them. So, you know, all these, uh, agent platforms are basically storing all of your memories, all of your files, all of your data, and they're passing them to the model in these giant context windows to get better responses. Anthropic is saying it will keep all of that, and it does it to build a profile on you, to classify you, and then to determine what capabilities it then unlocks. And the thing that created the most outrage in addition to the surveillance is the fact that they would degrade the product. They would degrade what they show you. They would nerf their models if it decided in Anthropic's sole discretion that you are not worthy of having access to that level of information. So they're creating a new level of AI haves and have-nots. And what they did is, they, they... This, uh, there's a narrow piece where they walk back, which is they said that when it came to things like machine learning, AI research, chip design research, those types of areas, they would kick you to a lesser model but not tell you that, and they would even do things-
3. 29:16 – 37:59

   The AI regulatory capture trap, pragmatic safety solutions

   1. DSDavid Sacks29:16

      The part that you're missing is that this is a trillion-dollar company that's spending potentially billions of dollars on a regulatory capture agenda-

   2. SPSpeaker29:25

      Right

   3. DSDavid Sacks29:25

      ... which is gonna deprive you-

   4. SPSpeaker29:26

      100%

   5. DSDavid Sacks29:26

      ... of access to those alternative models.

   6. SPSpeaker29:29

      Right.

   7. DSDavid Sacks29:29

      And you've got a founder who's out there describing these risks in a very hyperbolic way, and it's very clear where their agenda is headed, which is to banning open source models. So what is your alternative gonna be? We're gonna be stuck with somewhere between one and three companies, maybe two. There'll be a AI monopoly or duopoly, and they're gonna decide, along with some new government agency which will be a revolving door to their companies, who has access to what capabilities. And they're gonna surveil you, profile you, decide whether you deserve this, and if they think that you don't for whatever reason, then you'll be deprived-

   8. SPSpeaker30:05

      You're 100% right

   9. DSDavid Sacks30:06

      ... you'll be deprived-

   10. SPSpeaker30:06

       I think that's the worst interpretation of it

   11. DSDavid Sacks30:08

       ... of access.

   12. JCJason Calacanis30:08

       That's the worst interpretation of their intent.

   13. DSDavid Sacks30:10

       It's here today.

   14. SPSpeaker30:11

       I think Sacks is right. I think Sacks is right, and I think the lack of KYC is the tell. If you, if you did not have that agenda, you would have implemented KYC yesterday.

   15. SPSpeaker30:20

       Don't... I think in order to use this model, you have to have an account with a credit card in it, so they have some basic level of KYC.

   16. SPSpeaker30:25

       That is not KYC

   17. JCJason Calacanis30:27

       I said some basic level of KYC. They know who's using-

   18. SPSpeaker30:30

       That is not even some basic level of KYC. That's just a [beep] credit card and a bull [beep] email address. [laughs]

   19. JCJason Calacanis30:35

       Anyway, I, I'm now on the list. Check this out. I asked it about the regulations. [laughs] Pull this up, Nick. I asked it about the regulations on fertilizer while you were talking, and look what it said. [laughs] This is the latest model too. Oh, no, it switched... It downgraded me from Fable. I just got downgraded for asking a very simple question, and it told me... Did you see what it said in its thinking? The... I asked it, like, fertilizer bomb regulations. Said, "In... I'm considering the context here. The user is a VC and podcaster asking about fertilizer bomb regulations, which could stem from a legitimate research interest like regulatory policy, supply chain, blah, blah, blah. I can discuss the regulatory landscape," but then it dropped me down. So I'm in the database with you now.

   20. SPSpeaker31:15

       Is that right? Did it really just do that?

   21. JCJason Calacanis31:17

       Yeah, show it on the screen. Look what it just did. It... I, I was like, "I wonder if I can get the..." I didn't ask it how to make a bomb, but I was, like, asking it a spicy question.

   22. SPSpeaker31:23

       We are so cooked. [laughs]

   23. JCJason Calacanis31:25

       [laughs] I just proved the point.

   24. DSDavid Sacks31:26

       Listen, I mean, I think-

   25. JCJason Calacanis31:27

       It just dropped me down. I can't ask about fertilizer regulation.

   26. SPSpeaker31:30

       Oh, my Lord.

   27. JCJason Calacanis31:30

       And now Dario's... [knocking] It's Anthropic. [laughs] They're here.

   28. SPSpeaker31:34

       Oh, my Lord.

   29. DSDavid Sacks31:36

       I really think that conservatives and libertarians are mortgaging their futures if they go along with this reg capture, safety-est agenda without really realizing that there's so much more to it at stake. We saw what happened during the social media wars in the early 2020s, right? The definition of safety was expanded to include things like microaggressions-

   30. SPSpeaker32:00

       Safe space
4. 37:59 – 59:22

   Nationalizing AI: Trump/Sanders, justifications, and AI's "Capitalist Cucks"

   1. JCJason Calacanis37:59

      I guess adjacent to all of this is the public's, at least America's, distrust of AI, and their concerns around wealth disparity, and their concerns about how these models were trained. Bernie Sanders wants a percentage of these AI companies. The percentage he thinks is right is 50%. Last Monday, June 1st, Senator Sanders published an op-ed in The New York Times titled AI Is a Public Resource, You Should Own Half of It.

   2. SPSpeaker38:28

      [laughs]

   3. JCJason Calacanis38:28

      In it, he announced the American AI Sovereign Wealth Fund Act. Sovereign wealth fund, one of Trump's favorite things. A one-time 50% tax on stock, not profits, of the largest AI companies, including OpenAI, Anthropic, and xAI. The shares go into a government sovereign wealth fund, and would give the public voting rights and equal board representation at each company. Sanders said, quote, "The foundation of AI is our collective and human intelligence, the books, the songs, the journalism-

   4. SPSpeaker38:59

      [laughs]

   5. JCJason Calacanis38:59

      ... scientific research, code essentially stolen by some of the wealthiest people in the world." I'll stop there.

   6. SPSpeaker39:06

      [laughs] That's good. That's good.

   7. JCJason Calacanis39:06

      It's a brilliant, it's a brilliant [laughs] -

   8. SPSpeaker39:09

      It's very good

   9. JCJason Calacanis39:09

      ... pitch unifying, Sacks. This pitch unifies Bernie, even Steve Bannon, people in the administration. Trump himself loves a sovereign wealth fund. He wants to own part of companies. And Bernie Sanders, I think the, the, uh, horseshoe theories manifest here, Sacks. What's your take on Bernie's proposal?

   10. DSDavid Sacks39:31

       Well, I'm not in favor of Bernie's proposal because it's a straight-up confiscation of property, and I just think that'd be a terrible precedent. You just can't do that. However, I do have sympathy for where it's coming from, and I understand and could support some sort of more voluntary means of allowing the public to participate in this.

   11. JCJason Calacanis39:50

       Wow.

   12. DSDavid Sacks39:50

       Look, here's the reason why. You've got all these AI CEOs telling the public that they're gonna basically put half of them out of work, 50% job loss. That's what they've been saying. Dario just did an interview where he doubled down. He's not walking it back at all. So you have, by their own acknowledgment, these AI CEOs saying that, "Yeah, we trained our models using all of humanity's collective knowledge that was basically assembled over hundreds or even thousands of years." Humans put it on the internet for free. Everyone made their contribution. They certainly didn't do that thinking they're gonna put themselves out of work, okay? And then these AI companies trained on all that data, and now they're basically saying they're gonna use it to put, you know, Americans out of work. Now, obviously when you repeat that message over and over again, ordinary Americans are gonna say, "What's in this deal for me?"

   13. JCJason Calacanis40:40

       Yes. I need to get something out of this.

   14. DSDavid Sacks40:42

       Yeah, so, so look, I think that it's a natural political reaction based on what these AI companies have said. Now, the job loss apocalypse is not a story I believe in. I don't think the data supports it. We just had a blowout jobs report in May. 172,000 new jobs, over twice what economists were expecting. Thank you, President Trump. We're seeing hundreds of thousands of new construction jobs, 4.3% unemployment rate at record lows, okay? Even software developers are, those jobs are at a three-year high, 15% year over-

   15. JCJason Calacanis41:15

       Thank you, Donald Trump. Thank you, President Trump.

   16. DSDavid Sacks41:17

       Yes. Thank you, President Trump.

   17. JCJason Calacanis41:18

       Thank you, President Trump.

   18. DSDavid Sacks41:18

       So look, I don't see the job loss, okay? But the problem is this is what the AI companies themselves-

   19. JCJason Calacanis41:24

       Including Elon

   20. DSDavid Sacks41:26

       ... have t- have taught-

   21. JCJason Calacanis41:26

       Elon said

   22. DSDavid Sacks41:26

       ... the American public. Well, Elon-

   23. JCJason Calacanis41:28

       Elon said the same thing.

   24. DSDavid Sacks41:29

       Elon said it, but at least what Elon said is, "We're gonna create such abundance with AI and with robots-

   25. JCJason Calacanis41:36

       Yes

   26. DSDavid Sacks41:36

       ... that no one's gonna need to work."

   27. JCJason Calacanis41:38

       Yes.

   28. DSDavid Sacks41:38

       And the media just picks up on that last part, and they omit the first part.

   29. JCJason Calacanis41:41

       It's a more nuanced point. Agreed.

   30. DSDavid Sacks41:42

       Yeah, whereas Dario actually has said, "We're gonna have very high GDP, but very high unemployment." So in other words, we're gonna create economic growth, but you, the average American, are not gonna participate in this. So-
5. 59:22 – 1:05:39

   Liquidity recap: Best moments and takeaways

   1. SPSpeaker59:22

      we did mention, but everybody should go and see all of the recaps. We publish now all the interviews, yeah, Jason, from Liquidity.

   2. DSDavid Sacks59:30

      Yes.

   3. SPSpeaker59:30

      Uh, Sarah Friar, I mean, we mentioned Sarah Friar, but she crushed it. She was incredible-

   4. DSDavid Sacks59:34

      Wow

   5. SPSpeaker59:34

      ... the CFO of OpenAI.

   6. DSDavid Sacks59:35

      And future CEO, I think, was the buzz in the room.

   7. SPSpeaker59:38

      I mean-

   8. DSDavid Sacks59:39

      Oh, stop that.

   9. SPSpeaker59:40

      Stop. Can you stop that? [laughs]

   10. DSDavid Sacks59:41

       That's what people were saying. I have the right to free speech on this podcast. I think- Look at you, trying to introduce wedges into the situation. No, I'm not introducing wedges. I think Sam would be better as chairman. I think she would be the perfect CEO.

   11. SPSpeaker59:52

       They're, they're a good partnership, it seems. They seem like a good partnership.

   12. DSDavid Sacks59:54

       Okay. It, it seems like that, a great partnership, I agree. Sarah was really impressive. Sarah was really impressive. Who else was your favorite, Sacks? Did you have a favorite? Did you have somebody who you thought really crushed it? Yeah, I, I did. I thought Thomas Lefont crushed it with his presentation- Crushed it ... on the overview of venture capital. Yes. And he did it at Summit, I guess, a year and a half, two years ago. Uh, two years ago, but we're gonna make it a yearly with him. Maybe we'll have him at- Yeah. I think we should make it an annual feature with him because it's so interesting- Yeah. So good ... and- It's so good ... it's so good. It provided so much, um, numerical detail to support a lot of things I was kind of feeling but didn't-

   13. SPSpeaker1:00:25

       Mm

   14. DSDavid Sacks1:00:25

       ... have the data and- Well, I mean, the, the, the, to summarize it, he is, his basic observation was in this last cycle, if a company gets to $100 billion valuation, it's more likely to 10X from there than from 10 billion to 100 billion. So- Well, he had data on this. Yeah, I remember the slide. And he had data on it, which is like, okay, well, that's gonna really change- I remember the slide.

   15. SPSpeaker1:00:45

       Yeah, there it is. It's 8%. I remem- I memorized it. [laughs]

   16. DSDavid Sacks1:00:47

       Yes. Yes. Yeah, if you're into- No, the, the odds- ... if you're a capital allocator, this one's creamed ... look, th- yes, that's right. The odds of a unicorn getting to decacorn was 8%. The odds of a decacorn getting to a centicorn ... was about double that. Was that-

   17. JCJason Calacanis1:01:01

       13%.

   18. DSDavid Sacks1:01:02

       It says 13%.

   19. JCJason Calacanis1:01:02

       13%.

   20. DSDavid Sacks1:01:02

       And then the odds of it going from centicorn to a trillion-dollar market cap was 31%, so double again. And I, I asked him, you know, "Could you extrapolate this on 1 trillion getting to 10 trillion?" My guess is that it would follow, and we'll see about-

   21. JCJason Calacanis1:01:17

       60%?

   22. DSDavid Sacks1:01:19

       ... 60% of-

   23. JCJason Calacanis1:01:19

       100%, yeah

   24. DSDavid Sacks1:01:19

       ... trillion-dollar market cap companies getting to 10 trillion-

   25. JCJason Calacanis1:01:22

       Yeah

   26. DSDavid Sacks1:01:22

       ... in the next few years.

   27. JCJason Calacanis1:01:23

       Yeah, these are called trillicorns, by the way. We call them trillicorns in-

   28. DSDavid Sacks1:01:26

       Trillicorns. Oh, okay

   29. JCJason Calacanis1:01:27

       ... trillicorns in the industry, so yes.

   30. DSDavid Sacks1:01:28

       I didn't know that.
6. 1:05:39 – 1:12:27

   Inflation heats up: CPI and PPI see 3+ year highs

   1. JCJason Calacanis1:05:39

      Breaking topic this morning, CPI and PPI for May came in hot. Inflation is ripping. Here we go. CPI is obviously the consumer price index. That tracks inflation from the buyer side, rent, groceries, gas, healthcare, all that stuff. PPI is the producer price index. That tracks inflation from the seller side, wholesale goods, raw materials, yada, yada. CPI came in at 4.2% year over year, highest since April 2023. There's your chart. PPI came in at 6.5% year over year, highest since the end of 2022. Here's your Polymarket 21% chance inflation hits 5% in 2026. Uh, and then an adjacent Polymarket chances of the Fed r- hiking this year at 49%. It was under 10% before the Iran war started. By the way, European Central Bank just raised rates a quarter point on Thursday. This was their first rate hike since September 2023. What do we take from this, Friedberg? It's all related to the Iran war, yeah. That's the trends.

   2. SPSpeaker1:06:52

      There's definitely an energy blip from the Iran war that drove the core index up. But there's also the macro point, which is government spending out of control, inflation out of control

   3. SPSpeaker1:07:03

      And fundamentally, as things unravel, you have rising rates. So I think we should kind of expect, especially with a Kevin Warsh Fed, I think we could see north of five and a half, 6% overnight rates. It's not unforeseeable. So-

   4. JCJason Calacanis1:07:18

      Hmm

   5. SPSpeaker1:07:18

      ... this is just the nature of our monetary policy and our fiscal policy with our congressional, um, members that vote all of our future earnings away into [beep] . But here we are. [laughs]

   6. JCJason Calacanis1:07:31

      And, and, uh, and a far more-

   7. SPSpeaker1:07:33

      Gotcha. Describe it. [laughs]

   8. JCJason Calacanis1:07:34

      ... yeah, that nobody expected. Chamath, your thoughts, and then I'll wrap up with you, sir.

   9. SPSpeaker1:07:37

      That was the most passive-aggressive take I've heard in a while from you.

   10. JCJason Calacanis1:07:40

       He's a little upset about it, yes. Clearly he's a little [beep] up about this Fed.

   11. SPSpeaker1:07:42

       Wasting money. It's like, it's just so stupid to watch. Like-

   12. JCJason Calacanis1:07:44

       Can you tell us how you really feel? What, how do you feel?

   13. SPSpeaker1:07:47

       I mean, like, like honestly, like what else is there to say? I've said it like 100 times. It's just idiotic. The, the core problem with wealth inequality in this country, the core problem with inflation in this country, the core problem, all of it roots back to excess government spending, end of story. All of this-

   14. JCJason Calacanis1:08:03

       Period, full stop. Yeah

   15. SPSpeaker1:08:04

       ... all, we're all talking about machinations at the edge of the network. The core of the network is overspending by the government because in order to get elected, you need someone to give you something more than you have today. That's how people get elected, and here we are 250 years later. I don't know if there's the will or the way to get out of it, but one of the manifestations of it will be, in this late stage, higher rates and as a response to inflation, and here we are. You know-

   16. JCJason Calacanis1:08:27

       All right, Chamath

   17. SPSpeaker1:08:28

       ... it's concerning.

   18. JCJason Calacanis1:08:28

       What's your, what's your take on this? Is it a transient, as we, uh, have had other presidents say? Is it, uh... Is there a off-ramp for I- the Iran war? I don't know if this is above all of our pay grades, but this does seem to be a challenging moment happening right before the midterms, and consumers expected that their cost of living would go down and that they would benefit from this golden age, and it hasn't happened yet.

   19. SPSpeaker1:08:57

       Well, look, it's concerning. I don't think that I expected the print to be this hot. Now, what's keeping things in line, there's still a chance that we're not gonna see CPI go absolutely crazy, and part of that is because China has been smoothing the energy consumption globally worldwide, and so we've kind of kept a damper on $200 a barrel oil. In fact, we're sub 100. At the same time, I think it's pulled forward a lot of more practical sources of energy production, not just in the United States, but abroad. Specifically what I mean is solar, just because it's simple, it's passive, and-

   20. JCJason Calacanis1:09:38

       It works

   21. SPSpeaker1:09:38

       ... you don't ne- you don't need a lot of permitting, and you don't need clean air permits and the like. So all of these things have been able to keep a lid on it. If China somehow runs out of reserves and they need to go back into the spot market to buy an extra 3 million barrels a day, there's a very big risk that oil gets into the well past 100 and maybe between 150 and 200 a barrel. That has a lot of downstream problems with respect to CPI. Not even because US energy supply, but really because the inputs that oil feeds all around the world that then get absorbed by the cost that people pay for everyday things could go up.

   22. JCJason Calacanis1:10:17

       Hmm.

   23. SPSpeaker1:10:17

       So I think the PPI number should be an alarm that we use to off-ramp this Iran situation sooner rather than later. I just, unless, again, 'cause we don't know what happened in China 'cause none of us were there. Unless there's an understanding that the president has with Xi about how much actual supply and slack is in the Chinese system, and that may allow him to take a much longer road to get a conclusive and decisive win in Iran, but I, I don't know.

   24. JCJason Calacanis1:10:49

       Yeah. There was supposed to be some tangible known resolutions with this China trip. We haven't heard them explicitly stated yet. What's your take on, uh, this sacks, uh, the inflation print, and is there, like, a, a golden bridge to, to end this war in Iran?

   25. DSDavid Sacks1:11:08

       Jake, now the problem is when you ask me that question, people assume that I have some sort of inside information, and I don't. Look, the PPI print is what it is. I largely agree with what Chamath said. The only thing I would add is that it was largely in line with expectations. That's why the market is actually up today. Normally, if there's a surprise print and inflation is high, then the market is down because the market starts pricing in the implication of higher interest rates. It's not doing that today, so it's in line with expectations, but I largely agree with what Chamath said.

   26. JCJason Calacanis1:11:40

       Yeah. All right. Well, listen, we gotta get to other elections. You know, my take on it is just huge, colossal error starting this Iran war, and hopefully we can get out of it. Um, the downstream effects of this are just disastrous. Um, I'm hoping there's a quick resolution or some way to get out of it before it goes to, you know, a year or two or three. We can't be in a forever war, obviously.

   27. DSDavid Sacks1:12:02

       NASDAQ up 2.5% today. That normally doesn't happen when there's a hot print because, again, like, tech stocks are the most susceptible to high interest rates. So the market at this point seems to be pricing in-

   28. JCJason Calacanis1:12:15

       A resolution

   29. DSDavid Sacks1:12:16

       ... a resolution.

   30. JCJason Calacanis1:12:16

       Yeah.
7. 1:12:27 – 1:41:56

   California's loose election laws creating integrity doubts

   1. JCJason Calacanis1:12:27

      All right. Let's talk about the hand-wringing around vote counts in the LA mayoral primary. Instead of me reading all these details, just, Friedberg, I know you're hot.

   2. DSDavid Sacks1:12:39

      We- I think we know about it. Yeah.

   3. JCJason Calacanis1:12:40

      Yeah. [laughs] I think they... If you're on X, it's essentially your entire feed. Uh, Friedberg, what's your take? Is the election system in Los Angeles, specifically in California, corrupt, and is this election been stolen from Spencer Pratt, or is it just-

   4. SPSpeaker1:12:59

      There is no election.

   5. JCJason Calacanis1:13:01

      There was no election?

   6. SPSpeaker1:13:02

      There is no election.

   7. JCJason Calacanis1:13:04

      Oh, okay. So there is no spoon.

   8. SPSpeaker1:13:06

      Your rights to have an election are gone. You are a citizen of those who tell you who your overseers are. You are no longer allowed to vote-

   9. JCJason Calacanis1:13:20

      Not allowed to vote

   10. SPSpeaker1:13:20

       ... for your elected representatives. They are now appointed representatives.

   11. JCJason Calacanis1:13:25

       Got it.

   12. SPSpeaker1:13:25

       So enjoy the appointments-

   13. JCJason Calacanis1:13:27

       Appointed by who?

   14. SPSpeaker1:13:27

       ... that have been made for you.

   15. JCJason Calacanis1:13:29

       Appointed by who?

   16. SPSpeaker1:13:29

       Appointed by those who have constructed the matrix.

   17. JCJason Calacanis1:13:32

       Got it. Now we understand the background. There is no spoon.

   18. SPSpeaker1:13:35

       Agent Smith and all the Agent Smiths are in charge. So here's some statistics for you. In-person voting the day of the election in Los Angeles County for mayor, Spencer Pratt 35%, Karen Bass 29%, Nithya Raman 26%. Mail-in ballots received before election day, 38% for Bass, 28% for Pratt, 20% for Raman. And then all these ballots that arrive after election day, 37% for Raman, 35% for Bass, 19% for Pratt. So Pratt's post-election mail-in ballots declined by one-third. So statistically, the population of people that send in their ballots late reduced for Pratt by a third, increased for Nithya Raman by 80%, and Karen Bass 10% less, if you just look at the mail-in ballots before and after election day as a comparison. I don't know if there's a sociopolitical way that you can assess those statistics and assume that these are individuals casting their individual vote for who they think should be mayor of LA. And Nick, if you'll just pull up the map, which I think is worth taking a look at. Basically, the concentration of incremental votes that Nithya Raman got came around the Skid Row area in Los Angeles. And look, I'm not an election denier. I'm not someone who's historically believed the idea that elections are fraud and people have stolen votes. But when you look at the basic statistics of what happened in person, mail-in before, mail-in after election day, it becomes a real statistical quagmire on how did this sort of a sociopolitical shift happen in such a way that it did. Now, there was a report published, Nick, if you could pull this up, by the US House of Representatives Committee on House Administration. This was published in May of 2020, and they highlighted the 2018 California midterm elections and the challenges they saw arise in that midterm elections because of some of the legislative changes that were made. First, California Assembly Bill 1921 legalized the practice of unlimited ballot harvesting in the state. This was passed around 2018 around the midterms. What that means is that any individual in the state of California has the right to go and collect ballots from any other individuals, regardless of relationship, fill them out, and send them in. California, two years later, 18 months later, also passed a law that made it permanent that every person registered in the state of California would get a ballot, so tens of millions of ballots then get mailed out. Then there was another series of laws that were passed that said anyone can register to vote. You don't need to prove your citizenship. You can use a gym membership card as an example. So anyone can register to vote. There is no proof of ID when you get a ballot. There is no demonstration that the person who fills out the ballot has anything to do with the individual who's supposed to be voting that ballot, and it is legal for an individual to go out and collect hundreds or thousands of ballots, ship them in, and they will all qualify in these kind of mail-in ballot voting processes. So there is nothing illegal or fraudulent going on. In fact, the system is operating exactly as intended. It has been set up and structured in a way that with the right construct, you can get an individual appointed, not elected, but appointed to a particular role in government under a, quote, "free election" in California. This is a foundational destruction of our rights to vote for people in a free democracy. I feel it's been eroded slowly over time to such an extent now, and I'm not some crazy MAGA mother [beep] or whatever people wanna classify me as for pointing this out, but you can go down this list. They are all written out in this document, every one of these laws that were passed in California over time that in aggregate create the environment and the construction for elections to become appointments and no longer free democratic elections, where the principle, very importantly, the principle should be one individual, one vote, and if you opt to not vote, your vote should not be counted. So I think that there's no fraud. I don't think that there's anything ille-

   19. JCJason Calacanis1:17:49

       No fraud? Sounds like you believe there's massive fraud.

   20. SPSpeaker1:17:52

       Yeah, I think this is not fraud. This is, this is the way the laws are set up.

   21. JCJason Calacanis1:17:55

       It's manipulation. It's not fraud. It's manipulation.

   22. SPSpeaker1:17:56

       It, it's the way the law is set up.

   23. JCJason Calacanis1:17:57

       Okay, Sachs, you say, of course, there's fraud.

   24. SPSpeaker1:17:59

       This is the system of appointment.

   25. JCJason Calacanis1:18:00

       Okay, yeah. It sounds to me like you're describing fraud, but you're saying the system allows fraud.

   26. SPSpeaker1:18:06

       Fraud is breaking the law. Fraud is breaking the law. The law allows them to do it.

   27. JCJason Calacanis1:18:09

       If you pay people on Skid Row, that's not legal.

   28. SPSpeaker1:18:12

       That is illegal, but you are allowed to go out and get anyone to register. You're allowed to go out and collect all the ballots, and the people that are doing it, as long as you're not getting paid per ballot, you're legally allowed to do it. Let me pause for one second. When you look at any one of these laws in isolation, you can understand that there is some altruistic intention or there can be framed to be an altruistic intention behind it. Increase voter activity, give everyone the right to vote, give more people access, more channels to vote, et cetera, et cetera. And you can rationalize a way how every one of these laws makes it easier and adds lubrication to the system, and now we've got a, quote, "more accessible democracy for everyone." But the truth is that there is a concept in insurance called adverse selection, which is if there is a moment to exploit something, the criminals will exploit it to the extent that it will become asymmetric. The criminals or the, or the do-badders, not the do-gooders, will find a way to take advantage of a hole in a system, just like hackers do. To break into a network or break into some system

   29. JCJason Calacanis1:19:15

       And that's what you believe Raman did-

   30. DSDavid Sacks1:19:16

       Let me tell you how it works

Episode duration: 1:41:59