All-In PodcastDario Defends Himself, Datacenter Panic, AI Doomer Trap, Senate Toss-Up
EVERY SPOKEN WORD
90 min read · 17,990 words- 0:00 – 0:13
Besties are back!
- JCJason Calacanis
All right, everybody, welcome back to the number one podcast in the world, your favorite podcast, The All-In Podcast. We got a huge, huge docket. With me again, the core four, Chamath, Friedberg, Sacks, and your boy, JCal. Topic one. Topic
- 0:13 – 10:25
Dario's two-part essay: regulatory capture, doomerism, and the data center backlash
- JCJason Calacanis
one, let's get right to it. No small talk, boys. Dario has spoken. Apparently, he listens to The All-In Podcast, and he was compelled to respond to Gavin Baker's little discussion last week that many people inside, or some people allegedly maybe inside of Anthropic believe, quote, "That they will be the only private company in the world at some point." Some folks from, uh, Anthropic, Sholto Douglas fired back, "Completely false. Whoever told Gavin this is lying." And Dario decided he would come out of hiding, and he entered the chat with an epic two-part essay. On regulation, Sacks, he said, quote, "I know the Silicon Valley shorthand where regulation equals regulatory capture equals concentration of power, but I always found this to be an overly simplified picture." On messaging, he said, quote, "I do not agree my messaging has been disproportionately [laughs] negative. It has been about equally balanced between risks and benefits." He took a little responsibility, quote, "By far the most accurate criticism of AI companies, including Anthropic, is that we haven't yet delivered on our big promises to benefit the world. That is totally on us." Most quoted line, "The thing that will work is actually curing cancer, not glitzy marketing questions." Sacks, uh, you've been talking about Anthropic for a year and a half. He never responded. Gavin comes out and he suddenly, uh, is very talkative and responds. What do you take from the fact that he never responded to you-
- DSDavid Sacks
[laughs]
- JCJason Calacanis
... and then he responded to Gavin, and then we'll get into the details.
- DSDavid Sacks
Well, I mean, in f-
- JCJason Calacanis
Does he not want to spar with you?
- DSDavid Sacks
In fairness, JCal, he did respond to me.
- JCJason Calacanis
He did?
- DSDavid Sacks
I mean, I don't want to center myself, but the reality is he did not respond to what Gavin said. He easily could have said that what Gavin said he said is untrue, like Sholto did. He did not weigh in on that issue. Instead, he really weighed in on the regulatory capture issue. So that's the thing that I think drew him out here is I think he is a little bit irked by the fact that we keep accusing him of regulatory capture. And this is something I've been saying since last year, that they were engaged in a sophisticated regulatory capture scheme based on fearmongering, and those are the points he's really responding to. And I think the thing that he doesn't like about it is that he feels like it impugns his motives, that he's not pure and pursuing all these regulations-
- JCJason Calacanis
Curing cancer [laughs]
- DSDavid Sacks
... for the right, for the right reasons.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
And my response to that is, look, there's no question that Anthropic has been extremely aggressive about seeking to implement its preferred regulatory frameworks at both the state and federal level. That is regulatory capture. Now, look, I think that Dario may be sincere in his beliefs. I'm not saying he's doing this for pecuniary reasons. Nonetheless, he is seeking to capture the machinery of the state on behalf of his political agenda. It's just there's not much to debate there, I don't think. There's a few other things to say about this, so let me go to point number two first. He says that he's not responsible for the negativity around AI, that he's been balanced in his portrayal of AI. Oh, really? Do you, you expect us to have amnesia about the fact that just about a year and a half ago you said very specifically that within one to five years, 50% of entry-level knowledge workers would lose their jobs. And this was not just some sort of idle speculation on a podcast, this was something that they engineered and amplified into a full-fledged media campaign. You may recall that President Obama even retweeted this, and many other Democratic Party officials did the same thing. Moreover, this pattern repeats itself with the whole Anthropic blackmail study. Remember, he's got a team at the company, they're supposedly studying alignment. They create this highly contrived study where they prompt this model over 200 times until they finally get the headline-grabbing result that they wanted. And again, my point here is that this is not just someone just riffing on a podcast about the alignment risk of AI. This is them actually creating a study, engineering that study, and then pumping it to create the headlines they wanted. And Dario and his sister, who's the president of the company, and other executives went on 60 Minutes and breathlessly pumped this thing. And since that study has come out, a lot of people have looked at it and said, "Look, this thing is highly contrived," including the UK AI Safety Institute basically said that this thing was created under highly pressurized conditions, and they engineered the result. So these guys have created campaigns to make people fear AI. Why is the public so afraid of AI? They think it's gonna take their jobs, they think it's become the Terminator. It's exactly the fears that Anthropic has put in the media bloodstream, and no company, and you have to say therefore no founder or CEO, has done more to promote these fears and pump these fears and amplify these fears than Dario has. And the fact that he can't see that either makes him, I'd say, disingenuous or delusional.
- JCJason Calacanis
I'm going with the latter [laughs] .
- DSDavid Sacks
So that, that's point number one. And I really think that almost everybody who read that who's been paying attention felt the same way. It's like, Dario, you really have a blind spot with respect to your own behavior.
- CPChamath Palihapitiya
By the way, can we, can we talk about that one for a second, or no?
- JCJason Calacanis
Yeah, let's do it. Yeah.
- CPChamath Palihapitiya
Just to build on what you're saying. The issue that we have right now is actually pretty problematic. If I had to take three different vectors of actions and now put them together, you've had a very disjointed, disorganized, and frankly pearl-clutching, disingenuous AI doom narrative, and it's actually seeded, and now it's growing. And as a result, what's happening? I was really shocked when I saw Governor Abbott of Texas put down this executive order around Texas data centers and limiting its growth. Josh Shapiro in Pennsylvania just did the same thing. Axios reported that the GOP party sent out a memo to the executives at the various AI companies essentially saying, "Hey, stop rage-baiting people because we're about to lose this critical GOP Senate race in Ohio, largely around this issue." So you have doomerism, and then you now have mainstream political pushback from both sides of the aisle, which I think is extremely dangerous. And then the third leg of the stool is rising yields. By the way, the Treasury Department just doubled its bond buying. If you put all of these things together, as a just a casual observer, what I would say is we have made some really stupid, unforced errors in the United States. And the coda to all of this is if you put all of these things together, rising yields constrains the money supply in terms of how people want to invest in risk-seeking assets because the risk-free rate just keeps going up. That causes people to be less likely to invest in all the data centers. Data centers themselves are being shut down. Where does that leave frontier model companies? They're the most at risk. Why? Because they're not investment grade, they're in the worst position in terms of their balance sheets, they're not in a position to then get access to the compute they need to be successful. So even as you grow, you're actually making your problem worse in the sense that you need more and more capacity to sustain that growth that you can't fund because all the negativity has turned people against you. So all roads lead to a big question mark and a, and a head-scratching moment for me where I'm like, "How did we end up in this situation?" But whether it was accidental or whether it was well-intentioned risk management, whatever it was, we are now in a very precarious situation that we could have frankly avoided.
- DSDavid Sacks
Totally agree.
- JCJason Calacanis
Freeburg, your thoughts on this anti-data center movement or on Dario's going direct and writing the double missive. Do you think he's sincere, delusional, some combination?
- DFDavid Friedberg
Why don't we steel man it?
- JCJason Calacanis
Yeah.
- DFDavid Friedberg
And if we put ourselves in the shoes of a frontier lab leader, and the leader is seeing capabilities of models that perhaps we don't see because we're working day to day in enterprise settings, making stuff, doing things in a benign, non-nefarious way. And they're sitting there and they're pressure testing models, and they figure out, hey, there's ways you can jailbreak models to get them to do things that they're not supposed to do, and then you can use them to do things like design bioweapons, make viruses, make infectious diseases that don't exist today. You could use them to design cyber weapons to get them to go and do things online, like break into bank accounts and take people's money, and all these sorts of things. And you can prompt them to do things that could broadly influence society by creating fake media, fake videos, fake images, propagate them through social media, hack the algorithms. I mean, X's algorithm is public, so theoretically an agent could read it, copy it, understand it, and figure out a way to manipulate the broad public. And so you realize that as you're building these tools where there's a lot of benign, positive, world-leading, progressive kind of applications, you see all the bad stuff that could happen with it, and you can keep trying to build systems and keep trying to build ways to stop it from doing that. You can build all your own code that reviews every prompt that comes in, that reviews every API call, and yet somehow a network of agents can be used to do things, and they can start to do things that we don't want them to do. And so let's assume that you're sitting there and you're the executive of the company building this great technology. You believe fully in its capabilities and its benefits to society, its benefits to the economy, but you can't get a grip on how to keep it under control and how to stop social engineering-
- CPChamath Palihapitiya
You're... Okay, wait. Hold on
- DFDavid Friedberg
... bioweapons and cyber weapons. What do you do differently?
- CPChamath Palihapitiya
Okay.
- 10:25 – 30:12
FINRA for AI vs. MPAA for AI: SROs, thinking tokens, and the "DMV for AI"
- CPChamath Palihapitiya
Okay, so you're bringing up... It's an exceptional, going down an exceptional path. I love this. There is one thing that you must do if you believe that this is true, to further steel man this thing. You cannot obfuscate the thinking tokens of a model then. What do I mean? If you just compare open source models versus the closed frontier models, there is no way for us to understand what the thinking tokens are. Meaning you give it a prompt, you get back something, but all the stuff in the middle is obfuscated. Claude obfuscates it. Okay? So do the OpenAI models. And I would say if I was really afraid, the first thing I would do is try to find a way to unobfuscate these thinking tokens so that you could have a third party actually legitimize what you're saying. Because what's interesting to me is I haven't seen the same doomerism from any open source model company, including Nvidia. And the thing with the open source models is you can actually see it thinking, so you can see its misalignment in real time. And so instead, we have to basically agree to their interpretation of tokens that we can't see, that only they can see, that they can interpret how they want. And without judging whether it's right or wrong, I would say give them the benefit of the doubt that they're trying to do the right thing. Make the bloody thing available to other people then. Let somebody else with some amount of judgment as well sit in the room and steel man it with you.
- DFDavid Friedberg
So then let me make this point. So Sacks, there was this argument that Demis put out for a FINRA-style regulatory system where industry participants that understand technology move quickly and are aligned with commercialization actively review each other's systems and each other's models via an industry consortium that hires and assigns scientists to work on this stuff, and they're just doing it, versus having it be owned and managed by the government and create some regulatory capture scheme. But then this week you were pretty against the FINRA system in your tweets. You seemed to be supportive of it the first time around when Demis originally published it. It seems to me that the proposal from Demis that Dario signed up to, Sam signed up to, Elon all signed up to, you're now against. But that could be-
- DSDavid Sacks
Well-
- DFDavid Friedberg
... a solution to, if there is-
- DSDavid Sacks
No
- DFDavid Friedberg
... genuine concern here, given Chamath's points.
- DSDavid Sacks
Let me, let me clar-
- DFDavid Friedberg
That the industry can, can, can kind of police each other.
- DSDavid Sacks
Let me, let me clarify that. I think designing a new regulatory agency for AI that's designed after FINRA, which is a pretty sleepy regulatory agency that writes rules for stockbrokers in a fairly mature industry that's not dynamic at all, is a horrible idea. And by the way, FINRA is widely perceived as just protecting incumbents. And talk to any f- startup founder who's had to deal with them, they view FINRA as existing to protect the big banks from disruption. It's, it's just not a good model to base regulation after.
- DFDavid Friedberg
Well, p- p- sorry, just real quick.
- DSDavid Sacks
Now, now Demis, hold on.
- DFDavid Friedberg
Per- per- perhaps the NFA, the National Futures Association, which is also one of these self-regulatory organizations in the financial markets, is a better alternative, 'cause that's a pretty dynamic market.
- DSDavid Sacks
Ah, okay. So now what you're saying is very interesting, which is you mention the term self-regulatory organization, or SRO, and there's many different models, and one of them may work, and that's been my point. The one I think is the most appropriate for this circumstance would be something like the MPAA, which does not report to the government at all, and was formulated by the motion picture industry in response to the Hays Code. And what the government said is, "Get your act together, guys, or we're gonna have to do it for you." And, and what the MPAA did then was promote standards that then forestalled more intrusive heavy-handed government action. So that is basically the model that I said I could get behind. But is that the model that Dario supports? No. Dario, and I think Demis, wants a FINRA, which is basically this rulemaking regulatory agency that would not only promulgate standards, but also do pre-release model testing, okay? And it would then report into the government and then officially be enshrined in law. And the reason why everyone says, "Well, Elon's behind," or the... I've talked to Elon about this. Elon does not support an F- FINRA for AI. What he could get behind is an MPAA for AI. And that's my point, is Demis wrote something very high-level-
- DFDavid Friedberg
And by the way, that's what I've been saying on this podcast, Sacks, since the beginning. I have been saying MPAA self-regulate.
- DSDavid Sacks
I get it. But look, here's my point. Demis wrote something very high level. And so when you say something like, "Well, everyone supports Demis's idea," there's many versions of Demis's idea.
- DFDavid Friedberg
Yes, I hear you, and I think-
- DSDavid Sacks
Some of them could be okay, and some of them are bad. And what I'm saying is if it's a FINRA model, that will not work.
- DFDavid Friedberg
Yeah. Having spoken to B- Demis at length about this, I think the, the, the general framework is SRO in the right structure. However, FINRA is often used as the example of an SRO simply because it is the most well-known SRO. Uh, but you are correct. I think that there's a mechanism by which this thing needs to operate that is distinct from any other SRO. But the idea being the industry gets together, and to Chamath's point, they get to look at each other's models, they get to police it, they get to have independence, but they don't get to be controlled by government. And that-
- DSDavid Sacks
Well, here, here's what I think is important
- DFDavid Friedberg
... might solve the problem.
- DSDavid Sacks
Well, and, and, and just to be clear, this FINRA for AI, AI idea, Dario's behind it, Demis is behind it, okay?
- DFDavid Friedberg
Just call it, call it an SRO for AI. SRO. Yeah.
- DSDavid Sacks
It's not an SRO because it's not self-regulating. It's a regulatory organization, and the S part is a total fig leaf designed to hide the fact that this is a new regulatory agency that reports to the government, that does pre-release testing and approval of models. I call it a DMV for AI, because I think what's gonna happen-
- DFDavid Friedberg
Mm-hmm
- DSDavid Sacks
... is all these models are gonna get lined up in a queue waiting to get their test done and then released, and it's gonna slow us down horribly. Have you ever been to the DMV waiting in a queue?
- DFDavid Friedberg
It's gonna be like the App Store.
- DSDavid Sacks
It's a terrible idea and, and it's just a repackaging of what Dario has always wanted, which is an FDA for AI. Now he's saying it's an FAA for AI. You know how long the FAA and the FDA take to approve new products?
- DFDavid Friedberg
Yeah, we, we mentioned it last week.
- DSDavid Sacks
Years.
- DFDavid Friedberg
Yeah. Yeah. Well, this is China's-
- 30:12 – 56:33
Is an open source ban coming? Harnesses, FDI, jobs, and recursive self-improvement
- DSDavid Sacks
but he doesn't have enough political support for that, so instead they do this Trojan horse of a FINRA for AI They call it self-regulating. It's not really. But anyway, that gets them off the ground. Now they've created the standard-setting organization. Now they've got pre-release model testing. Then the pressure grows to codify that in law, so that happens next. And then what they do is they say, "Look, all these standards need to apply equally to all models." But here's the problem with that. Open models and closed models, as you know, are technologically different. Go back to Dario's Senate testimony in, I think it was 2023, where he said that open models, if sufficiently advanced, are dangerous. And why are they dangerous? Because they cannot be centrally monitored and controlled and rolled back and withdrawn-
- CPChamath Palihapitiya
No, but Sacks, it'll cripple the American economy
- DSDavid Sacks
... hold on, like, like a closed service like the one he hosts. Okay. He-
- CPChamath Palihapitiya
I understand, David, but-
- DSDavid Sacks
Hold on, hold on. Let me just finish the point
- CPChamath Palihapitiya
... it will cripple the American economy.
- DSDavid Sacks
Please let me just finish the point, then you can-
- CPChamath Palihapitiya
Yeah
- DSDavid Sacks
... you can respond. Dario basically says that open models are dangerous because of these characteristics they have, and those characteristics are immutable. They're technologically, they can't be changed. Once you release an open model into the world, you can't roll it back and you can't monitor exactly how people are using it because they run it on their own hardware. Dario says this is what makes open models dangerous. So what they're gonna do is they're gonna have the standard-setting body say, "Well, we have to set the standards for AI safety." By the way, Dario and, uh, OpenAI, they're gonna fund the whole thing. They're gonna contribute all the compute. They're gonna be behind it. They're gonna be the ones coordinating with the government officials because frankly, people in government have no idea how to monitor and control and set standards for AI safety. Technologically, this is way beyond them. So they're gonna go to these companies and say, "Tell us how to do it." And so what will happen is the standards will get set, and then it'll be a very simple matter of fairness to say that the standards need to apply to open as well as closed models. The open models cannot comply in the same way, and gradually they will be shut out of the market.
- CPChamath Palihapitiya
Chamath, I understand that. I understand, but the American economy would cripple overnight. Why and how?
- DSDavid Sacks
So what? You're saying regulators have never done things that are crippling?
- CPChamath Palihapitiya
Okay, let Chamath, let Chamath answer it. So let, let's take a... Again, I'll use the example of Coca-Cola. Coca-Cola is, is an extremely profitable, cash generative, well-run business. It has existed for, I don't know, 100-plus years. At this point, it will exist for many hundreds more if left to their own devices. It is a global business, right? Take Pfizer, same situation. Well-run business, global business. And now what you will tell them is, unless you tell them, "Hey, anywhere you operate, you need to follow American rules." Okay, that's one thing. Or it'll say, "Inside of America, you need to follow our rules, and other governments will have different rules." Now, what is Coca-Cola to do? Run the slower, more costly, m- less effective, less valuable model in the United States? Sure, they'll do that, and their US business will cripple. They will have a better flourishing business abroad. They will invest abroad, and what you will see is FDI, foreign direct investment, in the United States go off of a cliff. And what you will see is direct investments into other countries of the world rise. You've seen this, by the way, in China. When China made all these moves to cripple the Chinese tech companies, I think this is the best analogy. There was a moment where China was at a fork in the road where the large oligopolists there, the large tech oligarchs, were trying to seize power, and the tip of that spear was when Jack Ma gave that very famous speech on the eve of the IPO event financial. What happened? Xi Jinping cracked down. They took complete control. They said, "We are now operating together. Everybody that is worth anything will have a representative from the Chinese government on their board. We have the golden vote. We're gonna work together." When you look at what happened to foreign direct investment and you look at what happened to their economy, it fell off of a cliff. That will happen here if this happens. So they can try, and everybody will say, "Okay." And what, what the Coke CEO will do is redirect all of his capital allocation to outside of America. So will Pfizer, so will I, so will anybody. And then what are you gonna do? Take away our passports so you can't travel? So I think it will be a very visible way of just destroying the United States, and you can do that if you want to, but you will see it play out almost instantaneously in the equity markets and in the capital allocation of companies.
- DSDavid Sacks
I agree with you about all the negative consequences if we ban open models, but that doesn't mean it can't happen. Look at all the negative consequences of banning data centers. Data centers are gonna be 3% of GDP. It's basically creating all the gains in the stock market-
- CPChamath Palihapitiya
But they're not voting against that. They're voting against two people that they deeply dislike becoming trillionaires. That's what they're voting against.
- DSDavid Sacks
That's a big part of it. Jake, what do you think?
- JCJason Calacanis
Well, I was just gonna add to this. We already know what would happen with AGI, Friedberg, 'cause your original question of, like, trying to explain to Americans what happens when China wins, we already know what happens when they win. Products get cheaper [laughs] a- and, uh, you get more access to them. If they solve cancer, what are they gonna do with that solution? They're gonna just keep it for themselves? No, they're gonna sell it to Americans, just like they sell phones cheaper, just like they sell cars cheaper, and we try to block them. And then what Americans are gonna do, we're gonna lose our jobs to them. And so that would be the way I, I think to explain it to them. But if we want to turn this around, this really is just about convincing Americans that they're gonna have jobs and that this is gonna benefit them. The American people are scared of losing their livelihoods. That's the beginning and end of it. And, you know, the, the place where I have, uh, some expertise is in having invested in Zipline and Uber and a bunch of self-driving companies, and that's where-
- CPChamath Palihapitiya
I thought you were gonna say being poor [laughs] .
- JCJason Calacanis
The money's not the issue here, but the thing that I think is, you know, where this is gonna play out is really on the autonomy and, and those jobs. Zipline just did a partnership with Uber. I'm investors in both of those companies e- obviously, and they are gonna do a million deliveries a day. Then you look at just massive progress by Waymo. They're doubling the number of cars on the road, like, every six months or so. Tesla's about to go cyber cab. And, and what people are perceiving is, in their community, that you're not gonna have any money staying in their community. 'Cause those drivers, you know, as, as much as hand-wringing has occurred, that money at least stayed in the community. Oh, they weren't making enough. Oh, they're only making $18, 16 hours, 20, $21 an hour, whatever it is. But now we're taking that away from them. And then where does that money go? Where does the money for a robotaxi, Waymo ride, Zipline, where does it all go? It goes up into the cloud and then comes back down into Silicon Valley, polarizing more wealth. A- and that's where you're gonna see, I will predict it now, they're gonna ban Waymos in New York, Boston, DC, and they're gonna limit them with licenses. We must figure out how to explain to Americans that we're gonna raise the minimum wage, something that when I say we should m- raise the minimum wage and focus on that, people are like, "That's crazy." But when we talk about an, an experimental tax cut, people are like, "Oh, yeah, we do an experimental tax cut. We'll, we'll change the cost basis of capital gains. Great, let's try and see what happens." But nobody wants to try to raise the minimum wage. Nobody wants to give people an explanation of where their job will be in the future. And that's where, you know, whoever's making the point, I think it was you, Chamath, about, like, who are the spokespeople here? We need spokespeople who are saying, "This technology will empower you to get a great job." Paradoxically, the guy who did the best job explaining this, or the two guys w- were Jensen, obviously, who said, "You're not gonna get replaced by AI. It's gonna be somebody who works with AI," and then Zuckerberg, who said, "I'm gonna give you a bunch of free tools." In his manifesto going direct, he was like, "I'm gonna give you free tools. I'm gonna empower you. You're gonna get agents. Your life's gonna get better." Dario and Sam have not done that, and they've done the exact opposite.
- DSDavid Sacks
Meta actually did a really great thing. Zuck- Zuck did a really great thing, which is he created this new program where it's almost like a tr- a training school-
- JCJason Calacanis
Yes
- DSDavid Sacks
... for, it's like a trade school-
- JCJason Calacanis
True Wealth Academy
- DSDavid Sacks
... for people to go and learn how to get these various kinds of jobs, laying fiber, doing these new blue collar construction jobs-
- JCJason Calacanis
Yes
- DSDavid Sacks
... which we have a huge shortage of, and that's why it actually is, like, hard to build these data centers.
- JCJason Calacanis
And we'll pay your salary or something. It's a great program.
- DSDavid Sacks
Yeah. Yeah, I mean, so it's-
- JCJason Calacanis
Yeah, I mean, that, that we need more of. And so how is Zuckerberg all of a sudden the best spokesperson for our industry? Like, it-
- DSDavid Sacks
It's a very low bar. I mean-
- JCJason Calacanis
[laughs] I guess that's it
- 56:33 – 1:01:15
a16z under DOJ investigation over "interlocking directorates"
- JCJason Calacanis
prohibiting interlocking directorates, which I guess is, like, old-timey English for directors, like board of directors, and the conflict seems to stem from Ben Horowitz being on Databricks' board while another partner from Andreessen Horowitz, Martin Casado, sits on Five Trains' board. I don't know what... If you guys have heard about this story. It was, like, one of the top stories this week. Uh, obviously, [laughs] Andreessen and, uh, Ben Horowitz have been all in with, uh, Trump, and big, big donators. Um, put that into the mix as you will. Why is this happening now?
- CPChamath Palihapitiya
I can tell you.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
Enemy of Andreessen Horowitz, jealous of their returns, says-
- JCJason Calacanis
[laughs]
- CPChamath Palihapitiya
What are we talking about? Do they not understand how venture works? Like, is it, like, you invest in one company, you can't invest in another? I don't understand.
- JCJason Calacanis
What did Bloomberg say?
- CPChamath Palihapitiya
They said they've been under investigation for this conflict as described between these two companies, and you might-
- JCJason Calacanis
Which mean- which means, which means that a enemy reported them to the DOJ and then said to Bloomberg they're-
- CPChamath Palihapitiya
Yeah
- JCJason Calacanis
... under investigation. Well, that's why I bring it up, is, like, it seems so odd.
- CPChamath Palihapitiya
Which to me-
- JCJason Calacanis
And then what's the timing of it-
- CPChamath Palihapitiya
Which to me likely seems-
- JCJason Calacanis
... and the point of it
- CPChamath Palihapitiya
... I will make a p- speculative guess, the CEO of one of these companies is pissed off that the other partner-
- JCJason Calacanis
Mm
- CPChamath Palihapitiya
... is on the other board, and reported it to the DOJ and reported it to Bloomberg at the same time.
- JCJason Calacanis
Interesting. Uh, all right. Well, there you have it, folks. Moving on in the [laughs] docket. I think we made quick work of that one.
- CPChamath Palihapitiya
Let me, let me, let me just say, you know, you've been seeing, like, the distribution of, like, Cursor and then SpaceX. Andreessen Horowitz is on fire. They are crushing it. So-
- DSDavid Sacks
They've had two really-
- CPChamath Palihapitiya
... congrats to them
- DSDavid Sacks
... big events in the last few weeks.
- CPChamath Palihapitiya
I mean, my God. Congrats to them.
- DSDavid Sacks
Didn't they make-
- CPChamath Palihapitiya
Keep going, guys
- DSDavid Sacks
... how many billions did they make on-
- CPChamath Palihapitiya
Keep going.
- DSDavid Sacks
Well, it's Cursor and, uh, didn't they make a lot of money off OpenRouter?
- CPChamath Palihapitiya
And SpaceX originally.
- 1:01:15 – 1:30:51
Midterms: broken polls, the socialism surge, and CATO's DSA price tag
- JCJason Calacanis
without losing any. 35 seats are up in 2026. Uh, there are some special elections going on in Florida and Ohio. 23 of those 35 seats are held by Republicans. Big races to watch, Alaska, Maine, North Carolina, and Ohio. On February 25th, the day before the Iran war started, GOP was favored 60 to 41. It's been as high as 70%. Here's your Polymarket. Sacks, what do you take from this? Why are the Republicans set to get trounced in the midterms?
- DSDavid Sacks
Well, first of all, polls are notoriously wrong in-
- JCJason Calacanis
Sure
- DSDavid Sacks
... the summer before an election, and there's some data on this. So we should just, if you're gonna cite polls, let's just actually talk about the topic of whether political polls are even accurate at this point.
- JCJason Calacanis
The- these aren't polls. This is Polymarket, just to be clear. The-
- DSDavid Sacks
Okay
- JCJason Calacanis
... the polls are slightly different, yeah.
- DSDavid Sacks
I get it.
- JCJason Calacanis
These are people betting. Yeah.
- DSDavid Sacks
Yeah, but the polls are shaping public opinion right now. So political scientist Patrick Ruffini analyzed over 3,000 polls over the last four election cycles, every two years since 2018, and what he saw is that there is a huge bias. The preponderance of polls in all four cycles favored the Democrats, and the average polling error across all the polls was D plus 3.7 relative to the election outcome. And I think this polling problem has become even worse recently, and you see it where there seems to be an oversampling of young progressives in these polls because it's not just the fact that the polls favor Democrats over Republicans. They also favor the DSA Democrat over the more moderate or centrist Democrats, and you've seen this in a few elections where the DSA candidate, you know, was supposed to win by a lot, and then they basically eked it out or actually lost, like in Wisconsin. So in any event, I just think that the, the polls are very unreliable at this time of the year, and a lot of the polls have... They're actually created as internals, uh, by campaigns to motivate their donors.
- JCJason Calacanis
So basically, people are upset, then they throw people out of office. That's just the trend, and that's what happened over and over again. Yeah?
- DSDavid Sacks
No, I just think that the polls somehow are oversampling Democrats and progressives-
- JCJason Calacanis
Ah
- DSDavid Sacks
... and have a bias. That's what the data is showing. So I just wouldn't read too much into this right now. I do think that the Democrats, I think it is legitimate to say that they are favored to win the House. I think the Senate right now is a toss-up, and I would say that the Republicans will ultimately keep it, if I had to predict right now. And I just think that when you get back from Labor Day, that's when the campaign for the midterms really starts, and I think that, uh, Republicans need to focus on the right messages in this campaign, and I think there are plenty of good ones. They just have to remind him of all the good things-
- JCJason Calacanis
What are they? What, what are the, what would you say the top three they should focus on are?
- DSDavid Sacks
Well, look, everyone's been over-indexing on the war, and that's been the focus of the news, and hopefully, the kinetic phase of that is over and doesn't restart. And assuming that's the case, I think the Republicans can remind the electorate of everything that's happened over the last couple years. I think there is a good story to tell. So first of all, remind people that the border's been sealed for the last year and a half. We haven't just slowed Biden's invasion. We've stopped it completely. Contacts at the border have fallen off a cliff to the lowest level in 50 years. Illegals aren't even really trying to cross the border anymore. It's been so successful. Second, sealing the border and deporting hundreds of thousands of the worst criminals has actually made the country much safer. Murders have dropped around 20% year over year, and the murder rate is the lowest in 70 years, so that's number two. Third, deaths from drug overdoses have dropped 20%, again, thanks to tougher border enforcement. Fourth, Americans saw a 17% increase in tax refunds, thanks to the president's no tax on tips and no tax on overtime and no tax on Social Security. So these are real increases in take-home pay as a result of those tax cuts. Also, the tax provisions in BIG, Beautiful Bill incentivize new equipment buying. We talked about the accelerated depreciation, and perhaps that's why small business optimism just reached its highest level in nearly a year, and more small businesses are saying they plan to hire in the months ahead. So I think we do have a strong economy. Prescription drugs and auto insurance costs both fell last year after increasing a lot during the Biden administration. I think prescription drugs has had their steepest annual decline since 1963, so there are positive things to talk about there. Everyone made a big deal of the surge in egg prices at the start of the administration, but few have bothered to note that there's now been a 39% decrease year over year in July. So look, there are many good things, I think, for Republicans to talk about. They just have to kinda remember everything that's happened in the last two years.
- JCJason Calacanis
Okay. Uh, Friedberg, you have thoughts on what is going to happen this midterm and what people are making their decisions based on?
- DFDavid Friedberg
Things are expensive. People can't afford housing, healthcare, or education and are leaning towards this DSA concept. There was a frightening statistic on young conservatives embracing socialism.
- JCJason Calacanis
Really? Wait, the, the conservatives, like MAGA folks, you're saying are embracing socialist tenets?
- DSDavid Sacks
How are they conservatives then?
- JCJason Calacanis
Well, they, I guess ostensibly they're flipping, uh, or they're changing the composure of the issues they care about in some way.
- DFDavid Friedberg
53% of self-identified conservatives under 40 Support government-run grocery stores. Not Democrats, conservatives. Take that in. First line of this Wall Street Journal article. July 2026 Fox News poll found that sixty-one percent of Republicans view capitalism favorably, down from seventy-two percent in 2019. While the share who feel strongly favorable has fallen from fifty-four to forty-one percent, the share who say the system is rigged towards the wealthy has climbed from thirty percent in 2018 to forty-two percent amongst Republicans. So I don't think that this is a principled line in the sand anymore. I think that the, the problem with unaffordability, which I would argue continuously, and I've argued it since the first day of the show, is a function of government spending. The more government spends on education, healthcare, and housing, the more expensive those things get rather than the opposite. They're supposed to be able to provide access to those things, but when the government intervenes in those markets, those things get more expensive, and no one wants to kind of acknowledge or admit that in either party. And I've been to DC enough now to know that no one actually acknowledges or cares about this point, that they all think that their job is to get more money out of the government for their constituents, every single person in every party. There's very few principled conservatives. Many of them are conservatives by title, by party affiliation, but they're not conservatives by principle in the traditional sense, small government, free markets, et cetera. And I think that this is the motivating factor. I, I would argue if you take the, the look at the macro cycle, the macro cycle being we've printed so much money, we've got so much debt. The thirty year is now at five point three percent this week. It continues to hit new twenty-year records every day. We, I think, are gonna continue to face a problem of unaffordability, and ultimately, there is going to be some sort of, uh, big movement towards more socialist policies that we're gonna see play out between now and 2028. It's why I continue to believe, I think someone like an AOC becomes president. I think there's gonna be a wave this year, and then there's gonna be a bigger push in 2028 because I don't see the arithmetic or the fiscal situation changing to actually alter the affordability landscape. I just don't. I, I don't know what you could do from a policy perspective, and I don't hear either party talking about actual solutions to solve this affordability problem between now and 2028. And then the other kind of big problem that I've talked about is assets. Middle-class people, people that worked in private companies, people that don't depend on Social Security or public pension funds, they've all had 401Ks and owned homes. So they have seen their net worth climb-
- JCJason Calacanis
Surge
- DFDavid Friedberg
... with asset inflation. Surge. So the top fifty percent of Americans have $178 trillion of net worth, and the bottom fifty percent of Americans have six trillion of net worth. It's not the billionaires. It's the, the whole middle class. The middle class has all the wealth in the United States, and that's because they've owned assets. They've owned houses, and they've owned stocks. Houses and stocks have surged in value, and so if you don't own a house and you don't own stocks, you were left behind. And so I don't see how from a, a public policy perspective, we don't find ourselves walking down this very nasty, winding, dark path of socialism because the alternative policies that could be put in place to solve these problems are not being put forth by either party right now. So I do think that there's gonna be a big socialist embrace. I've said this obviously for a number of years, and I think we're gonna see this, um, play out in this midterm, and that's gonna create the, the momentum going into '28. And look, I mean, this, this polling data is very worrying. It's not just the Democrats. It's not just a party-based system. It's the horseshoe. It's the sixty-three percent of Americans that are living paycheck to paycheck that can't afford [beep] . That's the Americans that are gonna vote for this system. And it doesn't matter what party it is. They're just gonna vote for it.
- JCJason Calacanis
Chamath, twenty cents on the dollar going to our interest approximately on the federal side. Uh, inflation, we thought we would get there. It's been three or four percent for the whole year. Um, haven't been able to get down to two. And the GDP, uh, concept, which we talked about here, getting to growth again, and if we can get it, we can grow our way out of it. That is... hasn't happened as well. Obviously, the war, big disappointment for many folks in both parties who were promised no war. Uh, and here we are six months into it. What do you think is gonna happen over the next, uh, through the midterms and then into 2028 and to Freebird's point, any way to get out of this? Is this a death spiral, or is this something we can course correct out of in your mind?
- CPChamath Palihapitiya
I think that we can course correct. I just think it takes will. And I think that we need corporate America to step up and do their part of the job, and we need governments mostly to get out of the way and not have any hair-brain schemes on new inventive legislation that they think can solve the problem. I don't trust any polls. Just to be clear, I don't believe this polling data. And I think that we've gotten into a very dangerous point, which we already got into with the media, where the media lies. We all now know that the media lies, and the media can't be trusted. I would like to now go out on a limb. I don't think it's much of a limb, though. Pollsters lie, and I don't think you can trust them either. And I think that the media acts in concert with pollsters to find the data that allows them to write the headline that hopefully allows them to get the clicks. So I would just start there. Pollsters, trash. Media, trash. So what is really happening on the ground? I don't know, but I don't trust what this data tells me. Now, what do I know is helping and hurting the incumbent sitting president? I think that if we, as in corporate America, get ourselves in a position to actually present the better face of capitalism, we allow the system as it stands to continue to work. And I think all of these things, if we don't wake up, are telling us that corporate America is not trustworthy anymore. Corporate America is not aspirational. Corporate America does not do the things that engender some amount of trust and respect. And specifically in Silicon Valley, we've completely lost the script because we've gotten to the far, far, far end of that, and everybody is in it for themselves to such a degree that it's either pearl clutching on the one hand or getting your hand caught in the cookie jar on the other. You know, I mean, I, I posted the cookie jar thing that Anthropic did on the healthcare side.
- JCJason Calacanis
Cookie jar.
- CPChamath Palihapitiya
Why are we, why are we in this? I mean, it's just so avoidable. Those are headwinds for the incumbent president, even if he has nothing to do with it. What is a tailwind? I think getting out of the Iran war can be a massive tailwind. I think structurally solving energy on behalf of American citizens can be a tailwind. I think making sure that all of the long-term and medium-term investments of GDP can actually come and bear fruit can be a tailwind. All of those things, there are still a lot of levers to be pulled between now and November, and so those can create pretty meaningful tailwinds. But the headwinds, unfortunately, are pretty strong, and it requires some real coordination that the White House is gonna have to do to get a bunch of these corporate CEOs in the room, to get a bunch of these Silicon Valley CEOs in the room, and to tell them, "Guys, enough of this [beep] . Play nice in the sandbox, 'cause you're about to lose the standard operating procedure that allowed you to exist in the first place."
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
And they need to get this message clearly.
Episode duration: 1:30:52
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Transcript of episode Sij_v-mcZXQ
