All-In PodcastDeepSeek Panic, US vs China, OpenAI $40B?, and Doge Delivers with Travis Kalanick and David Sacks
EVERY SPOKEN WORD
150 min read · 30,117 words- 0:00 – 2:11
The Besties intro Travis Kalanick!
- JCJason Calacanis
All right, everybody. Welcome back to the All-In podcast. We've got an incredible crew today. Don't forget to go to our YouTube, blah, blah, blah, subscribe. And make sure you check out Freeberg's surprise drop with his hero, Ray Dalio, live on all platforms today. How did that come about, Freeberg? A little surprise drop.
- DFDavid Friedberg
Just great. Was talking with Ray about his new book, which he just published, on how countries go broke. Obviously, very important topic.
- CPChamath Palihapitiya
Which country is going broke now, Freeberg? America?
- DFDavid Friedberg
Well, I think he talks a lot about the historical context of what's gone on with the debt cycles in different countries and... Basically, at the end of the book he has a pretty, uh, I think, important recommendation to try and get the US to roughly 3% of GDP as our net deficit. Net of all expense, including interest expense. So, that's the recommendation to the administration. I think it's pretty timely, uh, with the change in administration. Anyway, great topics to talk through and really important book.
- JCJason Calacanis
Awesome. Well done. And we are super delighted to have, in the red throne, Travis Kalanick. He is the co-founder and CEO of CloudKitchens. He also, uh, worked in the cab business for a little bit.
- TKTravis Kalanick
Yeah.
- JCJason Calacanis
Co-founder and former CEO of Uber. And, uh, yeah, we had a great interview at the All-In summit last year. And he's back up from his media hiatus. He's been in the lab, working on CloudKitchens. How you doing, brother?
- TKTravis Kalanick
I'm doing really well. I- I got to say, just like at the summit, Jason, I- I'm-
- JCJason Calacanis
Yes.
- TKTravis Kalanick
It's an honor to be in the presence of such a prominent Uber investor.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Absolutely, absolutely.
- DFDavid Friedberg
(laughs)
- JCJason Calacanis
I mean, finally somebody has recognized (laughs) my-
- DFDavid Friedberg
The greatness.
- JCJason Calacanis
... contribution.
- DFDavid Friedberg
The greatness of J-Cal. Yes.
- JCJason Calacanis
Absolutely.
- TKTravis Kalanick
I'll mention it three or four times.
- DFDavid Friedberg
Yeah.
- TKTravis Kalanick
We'll bo- it- it's all good.
- JCJason Calacanis
Appreciate it, brother.
- TKTravis Kalanick
I'll give you the props. You don't have to do it for yourself anymore.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Thank you. Appreciate that. Appreciate that.
- NANarrator
Let your winner slide. Rain Man, David Sa- And I said we open source it to the fans and they've just gone crazy with it. Love you, SI. Queen of Kinwa. I'm going all in.
- 2:11 – 13:34
Travis breaks down the future of food and the state of CloudKitchens
- NANarrator
- JCJason Calacanis
Give everybody a little overview of CloudKitchens and the business and-
- TKTravis Kalanick
Yeah.
- JCJason Calacanis
... uh, how it's going because people are obviously addicted to ordering food at home.
- TKTravis Kalanick
Yeah.
- JCJason Calacanis
And, uh, it's- it's quite a trend.
- TKTravis Kalanick
Yeah. I mean, the- the high level for it, the way to think about it, is it's- it's about the future of food. What does the future of food look like? You go, well, in 100 years... We'll start way out there. In 100 years you're gonna have very high quality food, very low cost, that's incredibly convenient. And there are gonna be machines that make it, there are gonna be machines that get it to you. And it's gonna be exactly to your dietary preferences, your food preferences, et cetera, and it just comes to you. And it's so inexpensive that it approaches, or has surpassed, the cost of going to the grocery store. That's more of a, like, a today analogy.
- JCJason Calacanis
Hmm.
- TKTravis Kalanick
So you go, "100 years, of course that's the thing. Nobody's gonna be making food. What about 20? What about 10?" And so the company is real estate, software and robotics, that's all about the future of food. And if you can get the quality there, and you can get that cost down to- to start approaching the cost of going to the grocery store, you do to the kitchen what Uber did to the car.
- JCJason Calacanis
Mm-hmm.
- TKTravis Kalanick
And that's the thing.
- JCJason Calacanis
Travis, do you have a-
- TKTravis Kalanick
And it's like a grind. It's like lot... You know, bits and atoms in the Uber world?
- JCJason Calacanis
Mm-hmm.
- TKTravis Kalanick
This is like five times more atoms per bit. This is like heavy duty industrial stuff. Probably more along the lines of, like, you know, where Elon goes in some of his companies. Like, they're super interesting tech, but you've got to grind out those atoms.
- CPChamath Palihapitiya
Do you see people actually cooking in the future? Or does it become a centralized service? And is it optimized to people's health? And what do you think the implications for the food supply are, if your vision holds? How do you think about all those things?
- TKTravis Kalanick
Look, uh, people will cook in the future as a hobby.
- CPChamath Palihapitiya
As a hobby.
- TKTravis Kalanick
I sort of- I make a joke at the office. I'm like, "I like horses, I love horses, but I don't ride a horse to work."
- CPChamath Palihapitiya
(laughs) Right.
- TKTravis Kalanick
And it's gonna be a little bit like that. Whereas you can cook, it's- it's a soulful thing to do, it's just very human. But, you know, it's late, you know, Mom gets home late from the office, needs to get the kids, you know, a nutritious meal. She doesn't have to cook it now and she doesn't... She won't have to cook it. And she won't have to go to McDonald's either. It will be high quality and convenient and low cost all at the same time. And yes, dietary preference, everything, 'cause it'll be hyper-personalized. Like the way the internet is in content-
- CPChamath Palihapitiya
Hmm.
- TKTravis Kalanick
... plus, plus, plus in terms of your specific preferences for what you want.
- CPChamath Palihapitiya
I mean, do you-
- JCJason Calacanis
And you've got these computers rocking, or these robots rocking, I think, in Philly somewhere, uh, in the lab. Where they're making bowls, yeah?
- TKTravis Kalanick
I mean, we're outta the lab at this point. We have our machines that we have, a machine called the Bowl Builder that basically makes different cuisine types with bowls. So like, think of like-
- CPChamath Palihapitiya
Like Sweetgreens, like what they... Yeah.
- TKTravis Kalanick
We're not working with these brands specifically, but I'll- I'll just sort of... It- it's a good analogy. Like think of Chipotle or Cava or Sweetgreen or... You get the idea. We created test brands that were like those things and built the machine at the same time as we were building an actual restaurant. And we built that restaurant to prove that the machine works. Then we have our customers now touring, checking out. We're rolling out with five customers in April that are using the machine. And the way it will, the way it's gonna go down is they will come into... And we, of course, we have the real estate, so we have kitchens, you know, tens of thousands of kitchens around the world. They will come into one of our kitchens in a facility, it's a delivery-only restaurant-... they'll prep the food in the morning and then they will leave. And the machine will, y- uh, people order online, DoorDash, Uber Eats, et cetera, they'll order online the way they do, build your own bowl exactly as you want, and the bowl gets all the ingredients dispensed, hot or cold, sauce, et cetera, gets lidded. The bowl goes into a bag, the utensils go into the bag, the bag is sealed, and then it comes out on a conveyor belt. And machine gets the bag, it goes to the front of the facility, gets put into a locker. That locker then is sitting there. DoorDash, Uber Eats driver comes, waves their, waves their phone with the app in front of a camera, and it pops open the locker that has the food that you're supposed to get.
- CPChamath Palihapitiya
That's so cool.
- TKTravis Kalanick
So, like, if you're a, if you're a restaurateur, you're ... the grind of the on-demand meal, which is the restaurant world, goes away. You, you basically prep, and that's asynchronous from when people order food. The machine does the final assembly, or what's known as plating, essentially.
- 13:34 – 15:38
Sacks breaks in!
- DSDavid Sacks
did you guys notice-
- DFDavid Friedberg
Yeah.
- DSDavid Sacks
... that J-Cal was plugging his product there in the background, even though it has absolutely nothing to do with what Travis was saying?
- JCJason Calacanis
(laughs) Oh, welcome back to the show.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Nothing's changed. (laughs)
- DFDavid Friedberg
Sacks is here. (laughs)
- DSDavid Sacks
No one else even noticed that.
- TKTravis Kalanick
I just heard this voice from above. It was the czar of AI and crypto.
- JCJason Calacanis
The czar.
- TKTravis Kalanick
I was like, "Wow."
- DFDavid Friedberg
Zoran's descendant.
- TKTravis Kalanick
"Let's all sit back and listen."
- JCJason Calacanis
The czar is back.
- DFDavid Friedberg
Sacks, any anecdotes you wanna share, uh, about life in DC? How, how exciting it's been in the administration the first week?
- DSDavid Sacks
It's been amazing. I mean, it's hard to believe it's only been a week, right?
- JCJason Calacanis
Are you in the White House or that building next to it? Do you have an office?
- DFDavid Friedberg
That building. You mean the Treasury building? Or the, uh, Eisenhower?
- JCJason Calacanis
I don't know. Somebody was talking about there's a building next to it or something. I don't know.
- DSDavid Sacks
Uh, I have an office in the, uh, Old Executive Office Building, otherwise known as the Eisenhower Building. And then I have a pass where I can just walk over to the West Wing if I wanna walk over to it. There is kind of a whole White House complex behind the gates that with the West Wing is part of it, and the Eisenhower Building, and there's a couple other-
- DFDavid Friedberg
Mm-hmm.
- DSDavid Sacks
... buildings in that complex. It's really cool.
- DFDavid Friedberg
Awesome.
- DSDavid Sacks
It is really neat to, to show up for work at the White House, I have to say.
- DFDavid Friedberg
(laughs) It's awesome. (laughs)
- TKTravis Kalanick
It's awesome.
- JCJason Calacanis
It's like being in a movie or something or a TV show? (laughs)
- DSDavid Sacks
It is really cool, you know?
- DFDavid Friedberg
It's awesome.
- JCJason Calacanis
Any interesting meetings you can talk about? And I mean, I know we are here to t- today to talk about DeepSeek, but any interesting meetings or anecdotes from just the vibes and walking around? What's the coffee like? Is there, like, a commissary? You run into anybody interesting?
- 15:38 – 50:14
DeepSeek panic: What's real, training innovation, China, impact on markets and the AI industry
- JCJason Calacanis
gonna save it, but we had a little bit of a freakout the last week regarding this DeepSeek. If you don't know, that's a, uh, Chinese AI startup. They released a new language model. It's called R1, and it's on par basically with some of the best models, uh, in production in the West, like OpenAI's o1 model. But they claim... And listen, you can trust claims coming out of China, you know, for what it's worth. Uh, they claim to have done this all for $6 million on only 2,000 GPUs. For, uh, comparison, OpenAI spent reportedly $80, $100 million to train GPT-4, which you're all using now. And, uh, Sam claims they're gonna spend a billion dollars training GPT-5, and so that's about 7% of the cost of GPT-4. Obviously, there are export restrictions on, uh, NVIDIA H100s to China, so there's a big debate as to if they actually have H1s or not. And, uh, Monday was a bloodbath in the stock market. NVIDIA had the worst day in the history of the stock market in terms of total dollar amount of market cap lost. It was down 17%, which is $600 billion. TSMC was down, Arm was down, Broadcom was down. So I guess everybody's asking the question, how did they do this? Did they do it? And then there's a bunch of debate on whether they stole, uh, which is kinda rich coming from OpenAI which got caught red-handed stealing everybody else's content. And now they're crying foul that the Chinese stole or trained, did what's called distillation of their model in order to build theirs. Sacks, obviously, you are the czar of AI. I'm curious what your take on all this is, and thanks for coming.
- DSDavid Sacks
Well, I think one of the really cool things about this job is just that when something like this happens, I get to kinda talk to everyone, and everyone wants to talk. And I've... I feel like I've talked to maybe not everyone in, uh, like, all the top people in AI, but it feels like most of them. And there's definitely a lot of takes all over the map on DeepSeek, but I feel like I've started to put together a, a synthesis based on hearing from the top people in the field. It was a bit of a freakout. I mean, it, it's rare that a model release is gonna be a global news story or cause a trillion dollars of market cap decline in, in one day. And so it is interesting to think about, like, why was this such a potent news story? And I think it's because there's two things about that company that are, that are different. One is that obviously it's a Chinese company rather than an American company, and so you have the whole China-versus-US competition. And then the other is it's o- an open source company, or at least it opened source to the R1 model, and so you've kinda got the whole open source versus closed source debate.And if you take either one of those things out, it probably wouldn't have been such a, a big story. But I think the synthesis of these things got a lot of people's attention. A huge part of TikTok's audience, for example, is international. Some of them like the idea that, that the US may not win the AI race, that the US is kinda getting a comeuppance here, and I think that fueled some of the early attention on TikTok. Similarly, there's a lot of people who are rooting for open source or they have animosity towards OpenAI. And so they were kinda rooting for this idea that, "Oh, there's this open source model that's gonna give away what OpenAI has done at one-twentieth the cost." So I think all of these things provided fuel for the story. Now, I think the question is, okay, well, wha- what should we make of this? I mean, I think there are things that are true about the story and then things that are not true or, or should be debunked. I think the, let's call it true thing here, is that if you had said to people a few weeks ago that the second company to release a reasoning model along the lines of o1 would be a Chinese company, I think people would've been surprised by that. So I think there was a surprise. And just to kinda back up for people, you know, there's, there's two major kinds of AI models now. There's kind of the base LLM model, like ChatGPT-4o or the DeepSeek equivalent was v3, which they launched a month ago, and that's basically like a smart PhD. You ask a question, it gives you an answer. Then there's the new reasoning models, which are based on reinforcement learning, sort of a separate process as opposed to pre-training, and o1 was the first model released along those lines. And you can think of a reasoning model as like a smart PhD who doesn't give you a snap answer but actually goes off and does the work. You can give it a much more complicated question and it'll break that complicated problem into a subset of, of smaller problems and then it'll go step by step to solve the problem, and that's, that's called chain of thought, right? And so the new generation of agents that are coming are based on this type of idea of, of chain of thought, that, that an AI model can sequentially perform tasks, figure out much more complicated problems. So OpenAI was the first to release this type of reasoning model. Google has a similar model they're working on called Gemini 2.0 FlashThinking. They've released kind of an early prototype of this called Deep Research 1.5. Anthropic has something but I don't think they've released it yet. So other companies have similar models to o1 either in the works or in some sort of private beta, but DeepSeek was really the next one after OpenAI to release, you know, the full public version of it. And moreover, they open sourced it, and so this created a pretty big splash. And I think it was legitimately surprising to people that the next big company to put out a reasoning model like this would be a, a Chinese company, and moreover, that they would open source it, give it away for free, and I think the API access is something like one-twentieth the, the cost. So all of these things really did drive the, the news cycle, and I think for good reason because I think that if you had asked most people in the industry a few weeks ago, "How far behind is China on AI models?" they would say, "Six to 12 months." And now I think they might say something more like three to six months, right? Because o1 was released about four months ago and r1 is comparable to that. So I think it's definitely moved up people's timeframes for how close China is on, on AI. Now let's take the, um... We should take the claim that they only did this for $6 million. On this one, I'm with Palmer Luckey and Brad Gerstner and others, and I think this has been pretty much corroborated by everyone I've talked to, that, that, that number should be debunked. So first of all, it's very hard to validate a claim about how much money went into the training of this model. It's not something that we can empirically discover. But even if you accepted it at face value, that $6 million was for the final training run. So when the media is hyping up these stories saying that this Chinese company did it for $6 million and, and these dumb American companies did it for a billion, th- it's not an apples to apples comparison, right? I mean, if you were to make the apples to apples comparison, you would need to compare the final training run cost by DeepSeek to that of OpenAI or Anthropic. And what the founder of Anthropic said and what I think Brad has said, being an investor in OpenAI and having talked to them, is that the final training run cost was more in the tens of millions of dollars about nine or 10 months ago. And so, you know, it's not $6 million versus a billion, okay? It's-
- JCJason Calacanis
The billion-dollar number might include all the hardware they've bought, the years of putting into it, a holistic number, as opposed to the training number.
- DSDavid Sacks
Yeah, it's not fair to, to-
- JCJason Calacanis
Like, just running it is what you're saying.
- DSDavid Sacks
It's not fair to compare, let's call it a soup to nuts number, a fully loaded number-
- JCJason Calacanis
Right. Comprehensive.
- DSDavid Sacks
... by American AI companies to the final training run by the Chinese company.
- TKTravis Kalanick
But real quick, Sax, you've got, you've got an open source model and they've, the, the white paper they put out there is very specific about what they did to make it and, uh, sort of the results they got out of it. I don't think they give the training data, but you could start to t- stress test what they've already put out there and see if you can do it cheap, essentially.
- DSDavid Sacks
Like I said, I think it is hard to validate the number. I think that if... Let's just assume that we give them credit for the six million number. My point is less th- that they couldn't have done it, but just that we need to be comparing likes to likes.
- TKTravis Kalanick
Yeah.
- DSDavid Sacks
So if, for example, you're gonna look at the fully loaded cost of what it took DeepSeek to get to this point, then you would need to look at what has been the R&D cost to date-... of all the models and all the experiments and all the training runs they've done, right? And the compute cluster that they surely have. So, Dylan Patel, who's a leading semiconductor analyst, has estimated that DeepSeek has about 50,000 hoppers. And specifically, he said they have about 10,000 H100s, they have 10,000 H800s, and 30,000 H20s. Now, the cost of that-
- CPChamath Palihapitiya
Is they... Sax, sorry. Is they DeepSeek, or it's DeepSeek plus the hedge fund?
- DSDavid Sacks
DeepSeek plus the hedge fund, but it's the same founder, right? And by the way, that doesn't mean they did anything illegal, right, because the H100s were banned under export controls in 2022. Then they did the H800s in 2023. But this founder was very farsighted. He was very ahead of the curve and he was, through his hedge fund, he was using AI to basically do algorithmic trading. So, he bought these chips a while ago. In any event, you add up the, the cost of a compute cluster with 50,000-plus hoppers, and it's going to be over a billion dollars. So, this idea that you've got this scrappy company that did it for only six million, just not true. They have a substantial compute cluster that they use to, to train their models. And frankly, that doesn't count any chips that they might have beyond the 50,000, you know, that they might have obtained in violation of export restrictions that obviously they're not going to admit to. I mean, we just don't know. We don't really know the full extent of, of what they have. So, I just think it's, like, worth pointing that out, that I think that part of the story got overhyped.
- CPChamath Palihapitiya
It's hard to know what's fact and what's fiction. Everybody who's on the outside guessing has their own incentive, right? Like, so if you're a semiconductor analyst that effectively is massively bullish NVIDIA, you want it to be true that it wasn't possible to train on $6 million. Obviously, if you're the person that makes an alternative that's that disruptive, you want it to be true that it was trained on $6 million. All of that, I think, is all speculation. The thing that struck me was how different their approach was. And TK just mentioned this, but if you dig into not just the original white paper of DeepSeek, but they've also published some subsequent papers that have refined some of the details, I do think that this is a case, and Sax, you can tell me if you disagree, but this is a case where necessity was the mother of invention. So, I'll give you two examples where I just read these things and I was like, "Man, these guys are, like, really clever." The first is, as you said, let's, let's put in a pin on whether they distilled O1, which we can talk about in a second, but at the end of the day, these guys were like, "Well, how am I going to do this reinforcement learning thing?" They invented a totally different algorithm. There was the, the orthodoxy, right? This thing called PPO that everybody used. And they were like, "No, we're going to use something else called..." I think it's called GRPO or something. It uses a lot less computer memory and it's highly performant. So, maybe they were constrained, Sax, practically speaking, by some amount of compute that caused them to find this, which you may not have found if you had just a total surplus of compute availability. And then the second thing that was crazy is, everybody is used to building models and compiling through CUDA, which is NVIDIA's proprietary language, which I've said for a couple times is their biggest moat, but it's also the biggest threat vector for lock-in. And these guys worked totally around CUDA, and they did something called PTX, which goes right to the bare metal, and it's controllable and it's effectively like writing assembly. Now, the only reason I'm bringing these up is we, meaning the West, with all the money that we've had, didn't come up with these ideas. And I think part of why we didn't come up is not that we're not smart enough to do it, but we weren't forced to because the constraints didn't exist. And so I just wonder how we make sure we learn this principle. Meaning, when the AI company wakes up and f- rolls out of bed and some VC gives them $200 million, maybe that's not the right answer for a series A or a seed, and maybe the right (laughs) answer is two million so that they do these DeepSeek-like innovations.
- JCJason Calacanis
Constraint makes for great art. What do you think, uh, Friedberg, when you're looking at this?
- DFDavid Friedberg
Well, I think it also enables a new class of investment opportunity. Given the low cost and the speed, it really highlights that maybe the opportunity to create value doesn't really sit at that level in the value chain, but further upstream. Balaji made a comment on Twitter today that was pretty funny, or, I think-
- CPChamath Palihapitiya
The wrapper?
- DFDavid Friedberg
... reflects this.
- CPChamath Palihapitiya
About the wrapper?
- DFDavid Friedberg
Yeah, he's like-
- CPChamath Palihapitiya
Yeah.
- DFDavid Friedberg
"Turns out the wrapper may be the-"
- CPChamath Palihapitiya
(laughs)
- DFDavid Friedberg
... the moat-
- CPChamath Palihapitiya
The moat. (laughs)
- DFDavid Friedberg
(laughs) ... is the moat.
- CPChamath Palihapitiya
(laughs)
- DFDavid Friedberg
Which is true.
- CPChamath Palihapitiya
Yeah.
- 50:14 – 1:01:51
US vs China in AI, the Singapore backdoor
- JCJason Calacanis
about relations with China. We're obviously in a bit of a cold war with them. We have tariffs, we have Taiwan, and then we have, uh, the sort of trade war going on here with, uh, exports of H-100s. Where do we wanna start, gentlemen? And, you know, Travis, you've got some, uh, deep ... You're one of probably five American entrepreneurs who ran an at-scale business with Uber and the DiDi relationship-
- TKTravis Kalanick
Yeah.
- JCJason Calacanis
... in China, so you have a unique position of understanding business in this, along with-
- TKTravis Kalanick
Yes.
- JCJason Calacanis
... maybe Tim Cook and Elon are the only other two people who've really had an at-scale business there.
- TKTravis Kalanick
Yeah.
- JCJason Calacanis
Maybe Disney. They have Disneyland there, yeah.
- TKTravis Kalanick
Do they? I don't know.
- JCJason Calacanis
What's your take on the relationship and what's going on here geopolitically?
- TKTravis Kalanick
Well, how's China, how's China gonna operate differently than the US, Travis, from your experience, your point of view? Tell us a little bit about the culture and business ethics in China, particularly as it relates to AI development. Okay, so, okay, so look. We, I had this thing ... This is, I'm going back almost 10 years here. Uber Day, we're running Uber China, and w- I mean, I cannot ... There's no way I could express the frenetic intensity of copying that they would do on every thing that we would roll out in China. Mm.
- JCJason Calacanis
Mm.
- TKTravis Kalanick
And it was so epically intense that I basically had a h- a massive amount of respect for their ability to copy what we did. I, I just couldn't believe it. We would do real hard work, make it, we'd dial it, and it would be epic and it would be awesome. We'd roll it out and then, like, two weeks later, boom. (laughs) They've got it. A week later, boom. They've got it. And of course, I used that to drive our team. And there's so many great stories. I mean, we had, we had, like, 400 Chinese nationals in Silicon Valley. At our offices in San Francisco, we had a whole floor for the China growth team, and it was primarily Chinese nationals. We had billboards on the 101 in Silicon Valley in Chinese. Uber billboards to join our team in Chinese, to, to serve the homeland, right?
- JCJason Calacanis
Mm-hmm.
- TKTravis Kalanick
Um, it was like an all-out war. It was really epic. It was epic. And by the way, when you went to that floor in our office, you were in China.
- JCJason Calacanis
(laughs)
- TKTravis Kalanick
Like, they ruled China style. That's awesome. Like, the desks were literally smaller. Like, the density-
- JCJason Calacanis
Elbow to elbow.
- TKTravis Kalanick
... of the space was, it was China, okay? So but what happens is when you get really, really good at copying and that sh- time gets tighter and tighter and tighter and tighter and tighter, you eventually run out of things to copy. Mm. And then it flips ... To creativity and innovation. Mm-hmm. Now, at the beginning, you, you know, it's sort of all over the place. Like, the kind of innovation when it was new was, like, "Wh- what?" You know, you're like, "Really?" But as they exercise that muscle, it gets better and better and better. So if you wanna know about the future of food, like online food delivery, you don't go to New York City. You go to Shanghai. Mm. Right?
- JCJason Calacanis
What's an example? Like, of, uh, like something really innovative they're doing.
- TKTravis Kalanick
Well, doesn't, doesn't Meituan do drone delivery and stuff? Like, here's an example. If you went to offices, like, let's say Shanghai, um, Beijing, any of the major cities, Hangzhou, et cetera, the office buildings have hundreds of lockers around their perimeter so that everything that you get, whether it be food or anything else, but especially food, is just the, the couriers drop them off in these lockers in the, at the office buildings, and then there are a whole other set of people that are sort of like inter-office ... Runners. ... runners that then bring it to your office, as an example. Like, and when you see it, you're like th- and it's epically efficient. And it's, you know, they're taking a- advantage of their economics on labor and things like this. It wouldn't exactly work that way here. But a lot of the innovation you will see coming out on Uber Eats or DoorDash, like, the stuff that's coming out now is stuff that existed three years ago, four years ago in China, maybe longer. So, like, eventually you cross that threshold of copying and you, er, innovating, and then you're leading.... and I think we see that in a, in a, in a whole bunch of different places.
- JCJason Calacanis
Yeah. Here's a look at (laughs) these smart lockers that you can see. You know, just available for sale when you, when you go online but yeah, these things are crazy. And y- you've experimented with those as well, didn't you?
- TKTravis Kalanick
Yeah.
- JCJason Calacanis
Haven't you had like a commissary concept in DTLA?
- TKTravis Kalanick
Well look, we... Okay, so we got a couple of things. So w- we have in every one of our facilities, and we've got, you know, hundreds of them, we'll have lockers there so the, the courier then waves their phone in front of a camera, the right locker pops open, they get the food from there, and they go. The courier pickup is asynchronous from production of food. You never, you don't have lines anymore. There's no more lines, which then speeds up delivery, shortens the amount of time, shortens, it, it reduces how much money you spend on couriers. And we've got a whole other thing, this doesn't work in, it probably wouldn't work in China because, well, for a lot of reasons but let me explain what it is. It's called Picnic where if you are in an office building, you order food, you go to a website, you order whatever it is from 100 different restaurants, those restaurants happen to be in my facilities, and there'll be one courier that goes to one of our facilities and picks up 50 orders at a time, brings it to an office, puts it... There's a shelf on every floor. You get notified when your food arrives, and it arrives the same tame- time every day, and you just go to the shelf, get it on your floor and dip right back into your meeting, saving people time at the office, giving them selection on food, especially in food deserts. But even going, like there's a Sweetgreen right down there, uh, in my current, in my office right now, uh, I can save 20 minutes by just d- using our own service versus doing that, and you get it at the same price because the courier economics. The courier is bring- is delivering 50 orders at a time, so courier costs go basically to zero.
- JCJason Calacanis
What do we think of the, um, of the export controls here? Should we, Chamath, be maybe banning more H100s or other chipsets going there or is that futile?
- CPChamath Palihapitiya
I don't know the answer to that and I think that's... I think Sachs and President Trump-
- JCJason Calacanis
DJT.
- CPChamath Palihapitiya
... will make a good decision. But here's the curious case of the export controls. Nick, I sent you a couple of tweets, if you wanna just bring this up. So the first thing that people are claiming is that DeepSeek is getting access to a bunch of NVIDIA GPUs using Singapore as a backdoor. So essentially, you create a Singaporean shell company, you place an order with NVIDIA, NVIDIA fulfills that into Singapore, and then the chips go someplace-
- JCJason Calacanis
Uh-oh.
- CPChamath Palihapitiya
And so there's a bunch of examples where people are saying that you're talking about up to a quarter of all NVIDIA revenue goes into Singapore, and the speculation right now is that 100% of those then go into China, which is an enormous claim because that's a huge amount of, of NVIDIA's revenue. Now the interesting thing is if you actually try to understand well, maybe that's not true and maybe it's sitting inside of Singapore, this is where that kind of unravels. So just to be clear, like Singapore is about 250 or 260 square miles, like it's (laughs) like a small, small place.
- 1:01:51 – 1:10:37
OpenAI reportedly in talks to raise ~$40B with Masa as the lead investor
- JCJason Calacanis
government-
- DFDavid Friedberg
The-
- JCJason Calacanis
... should back?
- DFDavid Friedberg
The rumor today was they're raising 40 billion at a $340 billion pre-money, with Masa potentially being the lead. I would love Travis' read on this 'cause-
- CPChamath Palihapitiya
Yeah.
- DFDavid Friedberg
... Travis has taken large money from, from Masa in the past and has been through this. But how does he think about and make this decision? Obviously we all know, and I mentioned to you guys the meeting I had with him last summer where he basically kicked me out of the room 'cause my company's not generative AI.
- JCJason Calacanis
(laughs)
- CPChamath Palihapitiya
(laughs)
- DFDavid Friedberg
He was like, someone said, "You should go meet with Masa." So I'm like, "Sure, I'll sit down with him and start talking." And he just, like, looked at me and he's like, "Uh, this is not generative AI. I, uh, only do generative AI. I think your company will be very successful. You will be very successful. Goodbye." And he just walked out.
- JCJason Calacanis
(laughs)
- DFDavid Friedberg
And that was like the end of everything.
- JCJason Calacanis
So grim.
- DFDavid Friedberg
Uh-huh.
- CPChamath Palihapitiya
Yeah.
- DFDavid Friedberg
But that's all he's doing now. So this is the big bet, right?
- TKTravis Kalanick
So, okay, so I need to, I need to bust a myth. I did not take money from Masa. So he begged me to take money for years, and we did not take it because he is a, he's a, what's the word I'm looking for? He's a pro-
- JCJason Calacanis
I don't know.
- TKTravis Kalanick
He's a promiscuous investor. So-
- JCJason Calacanis
(laughs)
- TKTravis Kalanick
... once he in-
- JCJason Calacanis
Sharp eyehole?
- DFDavid Friedberg
Mm-hmm.
- TKTravis Kalanick
Once he invests in you, you should probably count on him in using your information and investing in all of your competitors. At least that's historically what he's done. So I didn't go there, but then he just kept investing in all my competitors and they kept subsidizing these markets. And then I'm like, "Maybe I should have just saturated, soaked up the money that was there." So th- one of the things you should think about w- like when you look at like, oh, is OpenII taking a lot of money from a Masa-type situation, is it's a little bit of like a double-edged sword, is if you don't take that money, it goes somewhere else. But if you do take that money, just know that whatever intelligence they get when they go through the process of giving you the money and maybe hanging around the board or who knows what is going to be used to do other things.
- CPChamath Palihapitiya
Mm-hmm.
- TKTravis Kalanick
And that is the nature of the Masa machine.
- CPChamath Palihapitiya
So you're damned if you do, damned if you don't.
- TKTravis Kalanick
But you gotta pick. And if the money's going and it's flowing and, and access to capital is a strategic competitive weapon or advantage, you must, you must play ball.
- CPChamath Palihapitiya
Hmm.
- TKTravis Kalanick
Now, we were able to, we, we, we did stuff with the Saudis before even Vision Fund existed. They stroked a three and a half billion dollar check when that was like the biggest thing that ever happened. So we were okay with not having the Masa money, but that Masa money then went to all of our competitors.
- CPChamath Palihapitiya
Mm.
- 1:10:37 – 1:25:13
DOGE's first 10 days
- JCJason Calacanis
Trump formally established DOGE, the Department of Government Efficiency, in an executive order. Apparently Elon's been spending a lot of time at the offices. Bunch of wins. DOGE is claiming on the interwebs to be saving American taxpayers around a billion dollars a day. That's $3 for every American every day, about $1,000 a year in savings for each US citizen. And they claim they can triple this, and so for a family five, that'd be about, what, $15,000 a year, maybe $60,000 during Trump's, uh, second term. We got $36 trillion in debt. Have fun with some numbers there if you like. But the key announcement was a, very similar to the Twitter execution, the ability for people to resign, done in a very kind way. Eight months of severance-ish is being offered to federal workers. They expect 5 to 10% of federal workers to take this buyout and it's, um, s- I mean, this could be something like $100 billion in savings. Eight months of severance, um, is not actually a legal concept that you can do, so these are some sort of buyouts. And there's obviously some hand-wringing about it, but I think they're off to a good start. They've also been canceling leases as we talked about, you know, pre-election. There is so much space not being used that, uh, the federal government is terminating a ton of stuff they own and gonna sell it and consolidating folks and at the same time all of this is happening, everybody has to return to office. Who wants to go first here with, uh, you know, the sort of first 10 days of DOGE? I see some eggplant emojis in the group chat. First 10 days of DOGE, how excited are you?
- CPChamath Palihapitiya
How do I get in on this group chat? What's that about?
- DFDavid Friedberg
(laughs)
- CPChamath Palihapitiya
Uh, I'm adding you right now.
- JCJason Calacanis
Yeah, how are you not in the group chat? Get in the group chat.
- DFDavid Friedberg
I'm adding, I'm adding you right now. I'm adding you right now.
- JCJason Calacanis
Literally every time one of these hits the group chat, it's just hilarious-
- DFDavid Friedberg
Polka crew.
- JCJason Calacanis
... eggplants.
- DFDavid Friedberg
(laughs)
- JCJason Calacanis
People are like, "Oh my God. We're, we're not burning tax payer dollars."
- DFDavid Friedberg
I'm, I'm adding you right, I'm adding you right now.
- JCJason Calacanis
(laughs) And I, and, and the eggplant always comes from Freeberg first.
- DFDavid Friedberg
Oh, okay.
- JCJason Calacanis
I'm outing him-
- DFDavid Friedberg
(laughs)
- JCJason Calacanis
... as an eggplanter.
- DFDavid Friedberg
I'm a, I'm a, I'm a, I'm a big DOGE eggplant guy. Yeah.
- JCJason Calacanis
Oh, so much eggplant.
- TKTravis Kalanick
Oh, man.
- JCJason Calacanis
So Freeberg, tell us about how much eggplant you love this.
- DFDavid Friedberg
There's nothing that I would say is particularly surprising in the first week. A lot of this was kind of talked about leading up to the inauguration.... Vivek and Elon publish their piece in the Wall Street Journal a couple of weeks ago. They talked about the mechanisms of action that they could utilize to kind of drive reduction in cost, one of which was come back to the office, another one of which is, you know, giving people a buyout offer. And by the way, the buyout offer is not new. Bill Clinton did the same thing during his presidency-
- TKTravis Kalanick
Yeah.
- DFDavid Friedberg
... if you guys remember, when he tried to balance the budget, get to a surplus, which he did successfully, and his intention was to actually reduce US debt to zero by the year 2013. And he had a very specific economic and fiscal plan for doing that, which he put into place. Incredible era. I think we're seeing them take the actions that they said they would do. They said they would demand to employees, federal employees, come back to the office and they assumed some degree of attrition from that, and now the buyout offer. And we'll see how far things go with the courts with respect to their ability to stop a legislative or statutorily mandated spending. There's a big question mark here on how much authority the executive branch has in stopping spending and how much they're not allowed to stop because it's demanded by law, it's demanded by Congress in acts or laws that have passed. And so, that's gonna be the big test here. Over the next couple of months, a lot of lawsuits will fly. The courts will ultimately adjudicate and we'll see how far the Doge intention can take things, and then there's a separate set of efforts around legislative action here. There's about a $2 trillion annual deficit right now in the United States, um, federal government. 2 trillion a year. And if you look at the, the Dalio book on Why Countries Go Broke, you know, there's a pretty simple kind of arithmetic in there which is not complicated, it's just at the end of the day, the US needs to get our federal deficit down below 3% of GDP, which means we've got to cut about a trillion, trillion one of spending. If we can do that, then we're in kind of a more economically sound place. By the way, a really important point, which is in the Dalio interview, as you cut spending, interest rates will come down because right now, there's a pretty significant sell-off in Treasuries and a lot of risk associated with the US's ability to deliver, um, its debt obligations over the next 30 years, which is why 30-year Treasuries are at 5% right now. Even though the Federal Reserve is cutting rates, the rate on Treasuries is going up. People are still selling off Treasuries. That will stop-
- TKTravis Kalanick
But it's also inflationary. It's also inflationary, Dave.
- DFDavid Friedberg
And it's impulsive. That's right.
- JCJason Calacanis
Yeah, yeah. For sure.
- DFDavid Friedberg
And so as we cut spending, we also will see that the intent... th- the, there'll be less inflation and the US ability to pay back their debt obligations over the next 30 years goes up, so the rates will come down. And so there's actually a really nice kind of cyclical effect as these cuts start to come into play. The rate at which you can make the cuts actually affects the num- the amount of cuts you have to make. The faster you make the cuts, the less you have to cut, and that's a really key kind of principle going into this, which I think we should expect a big whirlwind of cutting in the next couple of months, or an attempt to. The courts will adjudicate what needs to be legislated, and then they're going to go to Congress and start to try and get some of these cuts in. But I will tell you, once again, after our visit in DC last week, there was not a single member of Congress that I spoke with who views cutting to be a mandate for them in the laws that they're trying to pass. They all have a very different kind of agenda than Doge.
Episode duration: 1:49:18
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