DOGE vs USAID, Crypto Framework, Google's $75B AI Spend, US Sovereign Wealth Fund, GLP-1s

1. 0:00 – 3:11

   The Besties intro Antonio Gracias!

   1. JCJason Calacanis0:00

      I have four pieces of advice for people. Number one, get good sleep. Number two, exercise. Number three, diet. Number four, meditation. And if you want to do that, it's very simple. You get the Calm meditation app.

   2. AGAntonio Gracias0:10

      I have kids.

   3. JCJason Calacanis0:11

      You get the Eight Sleep sleep. You get the FitBod for fitness.

   4. AGAntonio Gracias0:15

      All your investments are in- (laughs)

   5. JCJason Calacanis0:15

      And then you get Nutrascents for your-

   6. AGAntonio Gracias0:18

      What a grifter. (laughs)

   7. CPChamath Palihapitiya0:19

      He's just talking about his investments. (laughs)

   8. AGAntonio Gracias0:22

      (laughs)

   9. JCJason Calacanis0:22

      Those are the four things you focus on for people.

   10. CPChamath Palihapitiya0:25

       The four essentials.

   11. JCJason Calacanis0:27

       You get a good Athena assistant. All of this is brought to you by my NGO, which is All In NGO. USAID gave us 18 million last year.

   12. AGAntonio Gracias0:35

       (laughs)

   13. CPChamath Palihapitiya0:35

       (laughs)

   14. JCJason Calacanis0:35

       Guys, I forgot to tell you about it, but don't worry, it's in an offshore account for all of us. When we get back to Ethiopia and Vietnam, we have an All In castle built there, okay?

   15. CPChamath Palihapitiya0:44

       (laughs)

   16. DSDavid Sacks0:45

       I'm going all in. Don't let your winners ride.

   17. JCJason Calacanis0:49

       Rain Man, David Sacks.

   18. DSDavid Sacks0:53

       I'm going all in.

   19. AGAntonio Gracias0:54

       And I said-

   20. DSDavid Sacks0:54

       We open sourced it to the fans and they've just gone crazy with it.

   21. CPChamath Palihapitiya0:58

       Love US housing.

   22. JCJason Calacanis0:58

       West Side Queen of Kinwah.

   23. DSDavid Sacks1:00

       I'm going all in.

   24. JCJason Calacanis1:02

       All right, everybody. Welcome back to the All In podcast, the number one MAGA finance, business, and personal optimization health. Yes, we are now larger in the health space than Huberman, Tim Ferriss, and, uh, Peter Attia combined. Yes, we've really started to grow the pod and, uh, if you want to, you can subscribe to the podcast on x.com, YouTube, Spotify, and all those other places. Especially if you want to have an incredibly positive world enlightening conversation with Ray Dalio, you can tune into Friedberg and Ray Dalio on the channel. Great conversation. It's gotten 300,000 or 400,000 views already on YouTube. How's the feedback been, Dave? Got so much great feedback on your Ray Dalio. Is it the end of the empire or are we coming back?

   25. CPChamath Palihapitiya1:55

       What's awesome is a lot of the recommendations he shared is becoming policy, it seems, for the Trump administration. Elon and Bessent and others in the administration have echoed trying to get government deficit below 3% of GDP.

   26. JCJason Calacanis2:11

       Yeah.

   27. CPChamath Palihapitiya2:11

       That seems to be the economic magical number. And if you can do that, rates drop. I think that's resonated. It was great to have him publish that a couple weeks ago, talk with us about it. It's great.

   28. JCJason Calacanis2:20

       Great bonus content from the team at All In. Today, we're super excited to have our friend, Antonio Gracias, joining the show. Antonio is the CEO of Valor Equity Partners and he's made some... yeah, he's made some solid investments. He was one of the first investors in Tesla, SpaceX, Athena, uh, tons of great... or he's the second investor in Athena after me.

   29. AGAntonio Gracias2:44

       (laughs)

   30. JCJason Calacanis2:44

       Uh, welcome to the program, Antonio.
2. 3:11 – 31:44

   DOGE takes on USAID

   1. JCJason Calacanis3:11

      know. We are 17 days into the Trump 2.0 presidency, and it seems like the main character, gentlemen, is DOGE, the Department of Government Efficiency. And, uh, they seem to have found a little known agency, USAID. Let's unpack it and talk about USAID and DOGE maybe in three acts. The first one, let me just, uh, educate the audience on what USAID is and then get y'all's general reaction to it. Most Americans probably haven't heard of USAID. It stands for the United States Agency for International Development. It was established by JFK by an executive order back in 1961. Wall Street Journal summed up its purpose as, quote, "Make friends and influence countries in the American interest." According to the US gov website, the purpose of USAID is to extend assistance to countries recovering from disaster. You got a budget of about $45 billion a year under Biden, and, uh, that's about $150 per American per year. They have at least 10,000 employees, or did. And as of 2023, they had programs in 130 countries. Obviously, there's 195 countries in the world. And, uh, the budget doubled under Biden from 26 to 45. The budget was between 15 and 20 billion during Trump's first term. But the White House and, uh, I guess Elon and the DOGE team found out about this USAID, went in there and found all kinds of interesting spend. Two and a half million dollars to fund EV charging stations in Vietnam, two million for sex changes and LGBTQ activism in Guatemala, 1.5 million to a Serbian LGBTQ group, 70K for a DEI musical, 47K for a transgender opera in Colombia.

   2. AGAntonio Gracias5:01

      (laughs)

   3. JCJason Calacanis5:02

      The DEI musical, by the way, is in Ireland. So if you get... if you're... if you make it to Galway, you can see that DEI musical.

   4. AGAntonio Gracias5:07

      (laughs)

   5. JCJason Calacanis5:07

      This went on and on and it has become quite a story.

   6. AGAntonio Gracias5:12

      Ugh.

   7. JCJason Calacanis5:14

      Antonio, you're our guest here this week. You and I and Sax and Elon spent a little time at Twitter during the takeover where I think a lot of these techniques were first put into action. Your thoughts on what's happening with DOGE?

   8. AGAntonio Gracias5:30

      I mean, look, Jason, first, I want to thank you guys for having me. Uh, it's great to see everyone.

   9. CPChamath Palihapitiya5:34

      (laughs) You got to see the musical?

   10. AGAntonio Gracias5:37

       I like to see a musical.

   11. JCJason Calacanis5:38

       No, I booked it. We're all going to the musical in Galway.

   12. AGAntonio Gracias5:40

       Yeah. We're all going to the musical. (laughs)

   13. JCJason Calacanis5:40

       What is it called? Um-

   14. CPChamath Palihapitiya5:42

       Is there actually a name of this musical?

   15. JCJason Calacanis5:45

       DEI, The Musical.

   16. CPChamath Palihapitiya5:45

       Yeah.

   17. AGAntonio Gracias5:45

       Yeah.

   18. JCJason Calacanis5:46

       It's DEI, The Musical.

   19. CPChamath Palihapitiya5:48

       Kind of funny name.

   20. AGAntonio Gracias5:49

       Oh, man. I got so glad there.

   21. JCJason Calacanis5:50

       It's a heartwarming story-

   22. CPChamath Palihapitiya5:51

       I apologize, I apologize.

   23. JCJason Calacanis5:52

       ... of getting a job-

   24. AGAntonio Gracias5:53

       Yeah.

   25. CPChamath Palihapitiya5:53

       Sorry, guys.

   26. NANarrator5:54

       I know, sorry.

   27. JCJason Calacanis5:54

       ... that you're not qualified for.

   28. CPChamath Palihapitiya5:55

       I apologize.

   29. AGAntonio Gracias5:56

       Yeah, so I think the- I think the DOGE story maybe starts with the Twitter takeover.

   30. JCJason Calacanis6:01

       Yeah.
3. 31:44 – 34:00

   Sacks breaks in to talk USAID

   1. AGAntonio Gracias31:44

      the Democrats shifted.

   2. JCJason Calacanis31:45

      All right. With us is David Sacks. How you doing, brother? Are- are-

   3. DSDavid Sacks31:48

      Good.

   4. JCJason Calacanis31:48

      ... you literally in the White House?

   5. DSDavid Sacks31:50

      I'm in the, uh, EEOB.

   6. JCJason Calacanis31:53

      Ah, okay.

   7. DSDavid Sacks31:54

      There's like a podcast studio, actually, in the EEOB.

   8. JCJason Calacanis31:57

      Oh, fantastic. And you're wearing a suit every day?

   9. DSDavid Sacks32:00

      Yeah. No, you're right. I have to wear a suit and tie every day. I was just listening in on your, your conversation about Doge. Jacob, I'm surprised that you never figured out a way to get involved in this USAID grift.

   10. NANarrator32:10

       (laughing)

   11. DSDavid Sacks32:10

       I mean, everybody's on the take except you. What's going on?

   12. NANarrator32:13

       Oh.

   13. CPChamath Palihapitiya32:13

       If I had- if I had known, I would have started an NGO. Where's my NGO?

   14. DFDavid Friedberg32:17

       You had everything except the money laundering. You had the grift, you had the virtue signaling.

   15. CPChamath Palihapitiya32:21

       Ha.

   16. DFDavid Friedberg32:21

       You had it all, except the actual money.

   17. CPChamath Palihapitiya32:23

       If I had known.

   18. DSDavid Sacks32:23

       Let me up-level this for a second, okay? So, we knew the US government runs a two trillion dollar deficit every year. We're in debt almost $40 trillion. And we also knew that anytime anyone tries to cut anything in Washington, the whole city screams bloody murder. Okay? So the question is-

   19. CPChamath Palihapitiya32:40

       Yep.

   20. DSDavid Sacks32:41

       ... just, why? Well, now we know. The money is all going to them.

   21. CPChamath Palihapitiya32:43

       Totally.

   22. DSDavid Sacks32:43

       It's like round-tripping to them. New York Times-

   23. CPChamath Palihapitiya32:46

       Crazy.

   24. DSDavid Sacks32:46

       ... getting paid. Politico-

   25. CPChamath Palihapitiya32:48

       (laughing)

   26. DSDavid Sacks32:49

       ... getting paid. Bill Kristol, perennial warmonger, getting paid.

   27. CPChamath Palihapitiya32:53

       (laughing)

   28. DSDavid Sacks32:54

       Ukraine, getting paid. Like 11 out of 12 publications, Ukraine, getting paid.

   29. DFDavid Friedberg32:58

       Incredible.

   30. DSDavid Sacks32:59

       Victor Orban, who's the Prime Minister of Hungary, was saying that... He's very popular in Hungary. His political opposition? Funded by USAID. In Poland, the, uh, left-wing political opposition, funded by USAID. And on, and on, and on it goes.
4. 34:00 – 46:41

   Sacks explains what he's working on: Crypto/AI Frameworks

   1. JCJason Calacanis34:00

      So, you did a big announcement this week on crypto, and creating a framework finally. I- I caught some of it. Maybe you could just tell us, you know, from the bottom up, what is the mandate from the president and what is your advice to him on how to make crypto move out of the shadows, offshore, ICOs, craziness, to legitimacy? What's the plan here to legitimize and regulate crypto?

   2. DSDavid Sacks34:27

      Well, the plan was really spelled out by President Trump in his week one EO on crypto, and it's all spelled out in there. The principles of the administration on crypto. The president said he wants to support the responsible use and growth of digital assets and blockchains across every sector of the economy. So, the principles are all there. And yesterday, I was invited up to Capitol Hill to meet with the, the chairmen of the important committees that will be... That basically govern crypto. And so we had a press conference there to announce the legislative plan. You can see there, there's Chairman Tim Scott, who's the chair of the Senate Banking Committee, to my left. And then to my right is French Hill, who's the chairman of the House Financial Services Committee. And then, to his right is John Boozman, who's the chair of the Senate Agriculture Committee. And then, to the left of Tim Scott is, um, G.T. Thompson, who's the chair of the House Agriculture Committee. He's out of frame right now. But those are the four committees that govern crypto. And you may ask, "Why is the Agriculture Committee involved in crypto?" And the reason is because the Ag Committee supervises the CFTC, the Commodities Futures Trading Commission. Because commodities all came out of agriculture. So, it's interesting. You need four committees across the House and Senate to get legislation done on crypto. It's not just House and Senate. It's actually two committees in each of the House and Senate. And so this is the first time where we've had four chairmen of the four key committees all come together and say that they're ready to support crypto legislation. There were a lot of people on X who felt like this wasn't, you know, a mind-blowing announcement. They wanted something that they could trade on right away. That's not what this was. This was basically a statement of commitment from the chairs of the four committees that we're gonna get legislation done this year, maybe in the next six months. I mean, that's really the goal. And we've never had that before, so that is pretty monumental.

   3. CPChamath Palihapitiya36:25

      I used to work in this... Because when I first launched Climate Corps back in the day, we actually were selling commodity contracts online, so we- we set ourselves up as an exempt commodity trading platform. And I... So I- I remember all this old legislation. There was the Commodity Futures Modernization Act, if I remember, when they...... deregulated the energy markets. But one of the features of the Commodity Futures Modernization Act was that they created this concept of an exempt commodity contract, which was where you're not delivering a physical good. And that's basically what weather derivatives were, and energy derivatives, and other kind of indices were created that didn't have a tangible physical supply, and it was still kind of shoveled in the, uh, in the commodities world. That's why the legacy of all this stuff kind of sitting with agriculture. Is that the way this is likely going to move forward, is it's going to look like a new extension of exempt commodities and kind of treated like that, versus being securities?

   4. DSDavid Sacks37:21

      The question you're describing is called market structure. You know, h- how-

   5. CPChamath Palihapitiya37:26

      Yeah.

   6. DSDavid Sacks37:26

      ... what are the definitions going to be? Because digital assets can be many things.

   7. CPChamath Palihapitiya37:29

      Yeah.

   8. DSDavid Sacks37:29

      You can have... Some digital assets are cryptocurrencies. They're actually currencies. Then there's things that are crypto securities, then there's things that are commodities. Bitcoin actually is regulated as a commodity right now. And then you've got things that aren't securities or commodities or, like, collectibles, you know, like NFTs-

   9. CPChamath Palihapitiya37:46

      Hm.

   10. DSDavid Sacks37:46

       ... things like that. So there's all these different categories, and one of the things that the market needs is just clarity around the definitions so that founders know what the rules of the road are and they can actually just comply with them. So giving them those definitions and describing how a crypto project could start, for example, as a security and eventually the protocol could become decentralized enough where maybe it becomes a commodity, that whole idea-

   11. CPChamath Palihapitiya38:15

       Right.

   12. DSDavid Sacks38:15

       ... that's called market structure. And there was a bill in the last Congress by French Hill, who is the chair of the House Financial Services Committee now, that passed the House with 71 Democratic, um, votes. So it was fairly bipartisan, but then it went nowhere in the Senate because frankly, the bank committee at that time was run by Sherrod Brown, who was anti-crypto. So it got stopped in the Senate right away. Now we have Republican control of the Senate, and Tim Scott's the new chair of the Senate Banking Committee, and he's expressed support. So I think now we could get a bill on market structure like FIT 21, again which was French Hill's bill last Congress. I think we could do a revised and updated version this Congress. And that was one of the things they all... The, the chairman expressed support for. So I think there's a pretty good chance we could get this done in the next six months.

   13. CPChamath Palihapitiya39:02

       What's the opposition, Sacks? I guess, w- it feels to me like with the market structure question being addressed and answered, you would have also more protection for consumers. 'Cause now businesses know the rules of the road, they follow them, can... The structure that protects consumers, et cetera, et cetera. Why would people be opposed to moving this forward, moving the legislation forward, getting this all behind us?

   14. DSDavid Sacks39:22

       Well, I think this is an area where there's a really good chance of having bipartisan support. We did in the last Congress, like I mentioned, that the House bill got over 70 Democratic votes. I think in the Senate we're gonna need seven votes, Se- seven Democrat votes to get to 60, right? Which is the number you need if you don't go through the reconciliation process. And I think there's a good chance this passes with significant Democratic support as well as Republican. It's not gonna be unanimous or anything like that because there are still forces that are hostile to crypto in Washington and-

   15. DFDavid Friedberg39:58

       You think it's going to be a discrete bill, or do you... I, I mean, it seems like you're gonna have to get a border security and energy and budget bill passed, so i- it seems like everything's looking towards reconciliation. In which case-

   16. DSDavid Sacks40:14

       The only-

   17. DFDavid Friedberg40:15

       ... wh- would this be an adjunct, like a, like an add-on?

   18. DSDavid Sacks40:18

       The, the question is what you can get through reconciliation. So in order for a bill to go through the reconciliation process where you only need basically 50 votes, it has to have a budgetary impact or predominantly a budgetary impact. I think it's called the Byrd Rule. And that rule was definitely pushed pretty hard in the last administration. Remember that the Biden administration got the Inflation Reduction Act passed through reconciliation-

   19. DFDavid Friedberg40:43

       Mm-hmm.

   20. DSDavid Sacks40:44

       ... and all those subsidies for clean energy or whatever. So they've opened the window pretty wide on what can go through reconciliation. But that's the question. There's one other bill that I think is gonna move pretty quickly here too. So I just mentioned the market structure bill. The other area is stable coins. And Senator Hagerty, he's on the Banking Committee, he just released a stable coin bill. There's counterparts in the House. And what the four chairmen indicated is actually they're going to take up stable coins first and then market structure will follow very quickly. So I think we could see a stable coin bill pass Congress in the next several months.

   21. JCJason Calacanis41:20

       Sacks, I guess the question is, the SEC was, and Gary Gensler were the blocker previously with crypto, and they just said, "Hey, listen, there's an existing set of rules here. Just follow those rules." Obviously, those rules don't exactly apply to the innovation happening in crypto. So the question, I think, after stable coins, which feels like a layup and- and a great place to start, that'll be a great early win, and it just makes people... I g- I guess that would just reinforce the dollar's supremacy, right? If it's tied to the dollar. So that's good for America. But maybe you could talk to protecting consumers, because we all saw in the first couple of generations of crypto all kinds of grifts and ICOs and things that were never delivered. So how do you balance those two things, protecting consumers who may get really enthusiastic about this versus, you know, people who might try to prey upon them?

   22. DSDavid Sacks42:14

       Well, the first thing you want to do if you're going to protect consumers is you want to bring the activity onshore.

   23. JCJason Calacanis42:19

       Okay.

   24. DSDavid Sacks42:19

       Because obviously when all the activity gets driven offshore then it's hard for regulators to supervise it. And moreover, it's hard for the market to know who's a good actor, who's a bad actor, what's a good project, what's a bad project. So the first thing you want to do is have the innovation happen onshore in the United States. By the way, it's probably not a coincidence that the biggest fraud in the history of crypto, which was FTX, was based in the Bahamas.

   25. CPChamath Palihapitiya42:43

       The Bahamas. Yeah. (laughs)

   26. DSDavid Sacks42:44

       Probably a recent

   27. JCJason Calacanis42:44

       Little bit of a tell. (laughs) A little bit of a tell.

   28. DSDavid Sacks42:46

       Yeah. And it'll be an even stronger tell when the good projects feel like they can come back into the United States and then you've got the shady ones...... in the Bahamas or in other countries, they're gonna stick out like a sore thumb. Everyone's gonna be able to understand that, oh, those guys are too shady to operate in the United States.

   29. JCJason Calacanis43:01

       Mm-hmm.

   30. DSDavid Sacks43:01

       So, the number one thing we need to do is just bring the innovation onshore. In terms of the framework, I think the market structure bill is gonna define, here's a security, here's a commodity, here's what you have to do. Here are the disclosure requirements around-
5. 46:41 – 52:33

   The Democratic Party's shrinking base

   1. JCJason Calacanis46:41

   2. DSDavid Sacks46:41

      Do you guys think the Democrats are gonna lose people over their opposition to Doge? Like, is Doge really viewed as oppositional to Democrat Party interests?

   3. JCJason Calacanis46:52

      This is-

   4. DSDavid Sacks46:53

      For the average person?

   5. JCJason Calacanis46:54

      This is-

   6. DFDavid Friedberg46:54

      It's a Rorschach test. I think the thing is that there was a coalition that the Democrats had and there was a coalition that the Republicans had. The Republicans did a better job of reforming that coalition and now I think what you're gonna see is a shrinking. I actually got this totally wrong. I don't know if you remember a couple years ago, but my thought at the time was, if the Republicans don't figure out how to fix themselves, they were gonna go and lose for the next 10 or 15 years. And the reason I said that was they would walk into every midterm and they would just get their ass handed to them. But I think they've figured it out, that this is sort of this thing that I've been thinking about a lot is, there's a fight in Western societies and it's a pendulum between labor and capital. And it used to be the thought, the conventional wisdom was that the Republicans were pro-capital and Democrats were pro-labor. And the brilliance of Trump is he took over the Republican Party and made it totally populist, which is to say pro-labor. And the crazy thing about the Democrats is that they are the most sophisticated liars. Because if you look at what happened under Biden, you had record high stock markets, so it was purely in favor of acid owners. Record high deficits, record high illegal immigration, record high wage suppression. All of these things are massively pro-capital, but they tried to present themselves as pro-labor. That entire ruse is now being undone. And all of this data, what that does is it'll, it'll consolidate the Democrats to a shell of their former self. It'll take a year or 18 months, but I think unless they figure out how to totally hard reset, they're gonna be in a really difficult struggle to find a cohort of people beyond 15 or 20% of the population for a long time.

   7. JCJason Calacanis48:51

      Well, and it's so dumb to come out against waste, fraud, and abuse. So the best argument the Democrats had, it seems-... was that, oh my God, people's Social Security numbers or people's privacy was being violated because they went in and looked at the data and how the money was raced, wasted. This is the, like, height of not getting the point and not reading room. 100% of Americans don't want their tax payments stolen. They don't care if you looked at their Social Security number. This isn't a privacy issue that Doge is looking at some database, and that's what AOC and Schumer were doing, "Oh my God, these people are looking at your Social Security number? They have access to your records?" Who cares? What matters is how much money is being stolen from the American public and anyone, at any point in time, could have picked up this issue. This has been going on, I think you pointed out, the last time somebody really addressed this in earnest was Clinton. So this has been going on Obama, Trump 1.0, Biden, everybody has been raising the debt, all of this grift has been going on, and it's only this time around that somebody picked up the free money and said, "Here's an issue." Now, we, uh, we see what happens when somebody picks up the issue of stop wasting money. It is a popular issue. This is only gonna make Trump more popular.

   8. AGAntonio Gracias50:14

      So Jason, I, I, um, I'm gonna add to what you and, uh, Chamath said. I think you're both right, and I'm gonna give you a very concrete example. Rahm Emanuel is now back from Japan, okay? He was chief of staff in both the Democratic White Houses post, uh, Roosevelt, um, Clinton and Obama. And he wrote an op-ed this weekend, this past weekend, um, that basically said that Democrats have lost their way because they have forgotten what he calls kitchen table issues, the things people, regular people care about. And Chamath, you're right. I mean, the, the reality is, um, they forgot about inflation. They forgot that inflation is terrible for the average person. It's terrible for middle class America. It's okay for people that own productive assets because they just go up in value, but it's terrible for people that are wage earners and that have any savings. It's terrible for older people that are living off savings. Terrible. You know, Rahm makes this point that if the Democrats are gonna have to, uh, are gonna re-conform in some way, reform in some way, they're going to have to recapture these kitchen table issues. And if they don't, they'll just be about these fringe social issues, DEI, transgender, whatever, and that will never work. They'll never come back into power.

   9. DFDavid Friedberg51:17

      Well, I mean, the, the crazy thing is, like, the Democratic policies are meant to favor capital holders, but capital holders, by and large, deeply dislike the Democrats because of all of these other issues. So they have no home. There is no base from which to build from right now, unless they go through a great reset. And part of it is that they have to understand that they are actually not pro-labor. They are, have been pro-capital. But that requires such a schism from the deepest believers of the Democratic Party who thought, you know, eat the rich, you wear it on your dress, it's so important to you. In fact, actually, you were feeding the rich. You just-

   10. AGAntonio Gracias51:56

       Yeah.

   11. DFDavid Friedberg51:56

       And the fact that you didn't even know that is just pathetic.

   12. AGAntonio Gracias51:59

       Yeah, what's funny is that, you know, Margaret Thatcher famously said that the, the problem with socialism, you eventually run out of other people's money and you run deficits, right, and you destroy the country. This happened in Venezuela. This is always the end of socialism. It's how it, it's how it finishes, how the movie ends. We've seen it around the world. Just look, look south in, to South America. We were heading that direction. That's when I said earlier, uh, we, I was, I'm afraid we might become a kleptocracy if this doesn't stop, and I'm so grateful to all the great patriots at Doge and the government and the president for making it happen, 'cause we were heading that direction.

   13. JCJason Calacanis52:28

       So the Democratic Party is lost. They'll continue to be lost. Interesting thing came up

6. 52:33 – 1:09:07

   US Sovereign Wealth Fund + Breaking DOGE/Tax News

   1. JCJason Calacanis52:33

      this week. On Monday, President Trump signed an executive order laying out a plan to establish the first sovereign wealth fund for the United States. For those of you who don't know, a sovereign wealth fund is essentially an investment fund for a country. It's almost universally based on natural resources. So Norway, Saudi, UAE, they all have, uh, Australia, sovereign wealth funds based upon minerals or typically oil. The United States is not known for having the oil reserves of the Saudis or UAE or Norway. This public investment fund would be apparently anchored by potentially the TikTok shares that Trump said he wanted to get half of by giving a license. A lot of that is, uh, unclear what this license would be. It's never existed. But this is the concept. The Treasury Secretary and Commerce Secretary have been tasked with developing a plan over the next 90 days. And, uh, the plan should include, quote, "Recommendations for funding mechanisms, investment strategies, fund structure, and a governance model." Chamath, you were tweeting about this. What is the point of having a sovereign wealth fund in the United States if we're $36 trillion in debt? Shouldn't we just pay down our-

   2. DFDavid Friedberg53:59

      Well, I, I think it's not a-

   3. JCJason Calacanis54:01

      Debt? It's not- Where is this money gonna come from? Yeah.

   4. DFDavid Friedberg54:03

      Well, it's not an either/or thing, and I think the point is that if there are assets that are minted effectively overnight, which I think the 50% share of TikTok would be, so call it 100, $150 billion, the question is, what should you do with it and who should govern it? And I think this idea that if you had a group of five elder statesmen... So I'm just gonna throw some names out there. David Tepper, Stan Druckenmiller, Ken Griffin, John Doar or Mike Moritz, Bill Gross or some other bond guy. My point is, what you get are five people that are very sophisticated across all market categories. One of them could be the rotating CEO for some number of years. People should rotate in and rotate out. These are unpaid jobs because everybody that has these slots should be mega billionaires, so they shouldn't be doing it for their own personal advancement, and they should deploy that capital. So as you sell down the TikTok shares, maybe as you sell federal lands and you generate more oil revenue-... take it all and invest it on behalf of America into American companies. I think that's a great, incredible idea.

   5. JCJason Calacanis55:08

      Antonio, you think the government should be in this business?

   6. AGAntonio Gracias55:12

      So I have... I- I think it, I think it should, but... And I agree with Chamath, uh, that the governance is very, very important. I think he's got a good idea there. I think it... For a different reason, is that we don't have an industrial policy in America. Uh, many of our strategic competitors around the world, in particular China, have a long-term industrial policy and they put enormous amounts of capital behind the industrial policy. Uh, a sovereign wealth fund, I think, would be a stealthy way to create an industrial policy in America. So rather than having-

   7. JCJason Calacanis55:41

      What does it mean, an industrial policy in this context?

   8. AGAntonio Gracias55:42

      So-

   9. JCJason Calacanis55:43

      Example.

   10. AGAntonio Gracias55:44

       In China, they wanna, they wanna build chip fabs and they wanna catch up to, uh, to, uh, TSMC. And so what do they do? They take the dollars of trade surplus they get from us every year, and they pour it back into making that stuff inside their country. And for decades, part of the problem we've had with, uh, China is that capital's free, because the banking system just pushes money out to manufacturers and they move the manufacturing, 'cause of the WTO, from the US to China. That's industrial policy. When people say the Chinese have a long-term 100-year vision, the way it's- it manifests is this industrial policy. We don't have that here at all. And when we try to do it, we do like the CHIPS Act and it goes through Commerce. We have government bureaucrats deciding how to spend $200 billion to modernize Intel, which needs to happen. I mean, I'd much rather have Ken Griffin, Bill Gross, any of the guys Chamath mentioned deciding, "Okay, we have five industries in America we want to invest in. Let's make great investments," right? I mean, let's make great investments for America. They've gotta be economic, they gotta, they gotta make money for us, but they gotta be good for the country. I think that's what most of these sovereign wealth funds do. Some of them make portfolio investments, but many of them, like the- the- the sovereign wealth fund in Saudi Arabia, the PIF, they're making enormous investments domestically to remake the economy, you know, toward tourism, example. And I think this is a great idea.

   11. JCJason Calacanis56:54

       They're literally building cities in NEOM.

   12. AGAntonio Gracias56:57

       Yeah.

   13. JCJason Calacanis56:57

       They've got-

   14. AGAntonio Gracias56:57

       Yeah.

   15. JCJason Calacanis56:58

       ... you know, a dozen-

   16. AGAntonio Gracias56:58

       Yeah.

   17. JCJason Calacanis56:58

       ... cities being constructed-

   18. AGAntonio Gracias57:00

       Yes.

   19. JCJason Calacanis57:01

       ... uh, and trying to take an oil economy and shift it to a tourism economy-

   20. AGAntonio Gracias57:05

       Tourism, yes.

   21. JCJason Calacanis57:05

       ... a technology economy, a private equity economy.

   22. DFDavid Friedberg57:08

       Antonio's totally right. Like Scott Besson, part of his congressional testimony, you guys probably saw this, was he laid out this thing that he has that's called the 3-3-3 Plan, right? And the 3-3-3 Plan says we wanna see GDP growth of 3%. We wanna see deficits that are no greater than 3%. And we wanna have three million barrels of oil, right? Produced domestically in the United States. But if you double-click on that, if you look at the total energy reserves in the United States, they are three times greater than the total energy reserves of Saudi Arabia, three times across all forms. So not just oil. If you... Oil, nat gas, plus coal. If we actually go, as Antonio said, towards an industrial policy that's pro-energy, where the incremental cost of energy is effectively zero, where we want just a gross abundance of electrons flowing in America for all the great ideas that could pop up, it is, by definition, going to generate an enormous amount of revenue for the federal government. And so I think having the sovereign wealth fund be the rainy day fund, if you will, right?

   23. JCJason Calacanis58:14

       Mm-hmm.

   24. DFDavid Friedberg58:14

       That can bank a percentage of all of that, I think starts to do a lot of really good for the long-term strategic guidance of the US.

   25. JCJason Calacanis58:22

       Freyberg, what do you think here? Is this something where we're making the government too big and now we've got the government competing with BlackRock and Sequoia and Andreessen Horowitz, and they are gonna be on the board of technology companies and energy companies and investing in it? And then what happens when, you know, Obama, Biden, Trump, Bush, you get different people running these things and then they wanna do their pet projects? It seems to me like this could be... Get awfully conflicted awfully quick. What do you think? Should this be a business our government's in?

   26. CPChamath Palihapitiya58:51

       I think one of the things the government sucks at is capitalism. So I wouldn't make capitalism the mandate of a sovereign wealth fund, certainly not when we have $40 trillion of federal debt. It doesn't make economic sense. Our cost of capital is 5%. That's how much the interest is on this 10 to 30 year debt right now. So it's very hard to actually make real risk-adjusted returns when our cost of capital is so high. So I don't think the mandate should be, "Hey, let's put a bunch of capital in a pool, go and invest it, and try and make money for the United States." That seems silly. But my point about the government being really bad at capitalism is that the United States government owns and has access to and will acquire through other means significant assets and resources that should be monetized in a smarter way. And so I would kind of think about the sovereign wealth fund as being more of a strategic vehicle for monetization of high-value government assets. So for example, if Trump does actually negotiate a 50% equity position in TikTok US, that needs to sit somewhere. It should not sit in the department of whatever. It should sit with a capitalist manager that then ultimately makes the decision on when and how to monetize that asset, return that cash to the Treasury, and pay down the debt. Similarly, the US has large amounts of land, has access to other large assets that get transferred in seizures, et cetera, et cetera. So, you know, I- I don't know if you guys remember all this, but there was like bit- Bitcoin seizures that have happened-

   27. JCJason Calacanis1:00:18

       Yeah.

   28. CPChamath Palihapitiya1:00:18

       ... over the years-

   29. DFDavid Friedberg1:00:18

       Yeah.

   30. CPChamath Palihapitiya1:00:19

       ... is the government has cracked down on criminal enterprises, then the government owns this Bitcoin. Do you think the smartest people are making the decisions on where and how to sell down that Bitcoin? I guarantee you not. I would much rather have a capitalist making that decision. So I would view the, you know, the- the sovereign wealth fund being less about raised capital from other means than the government, which effectively means borrowing money through Treasuries 'cause of the- the- the debt level we have, and trying to invest it, and much more being about, okay, what strategic assets can the US government monetize and use this as the mechanism for doing that? And then ultimately, I think the objective should be to return that capital. I- I do think there's also an opportunity for managing Social Security in a smarter way. So Social Security's functionally gonna be bankrupt in eight years, the way the trust is set up, the cash that's there.... the assets that are there and the demand on Social Security, given the aging population and the rising payouts every year. So one of the other ways to think about this is, what are the long-term debt obligations, which is ultimately the point of these sovereign wealth funds, and can they be invested in a smarter way? Why is the Social Security entities ultimately owning, you know, 3% yielding bonds when they could be owning interest in, in equities? So I would kind of think about that strategic pool of capital being managed by this as well, and less about the mandate of go be a capitalist investor for the United States, raise money and make money. I think leave that to the markets. But when it comes to strategic assets, I think this could be a good vehicle for-
7. 1:09:07 – 1:23:21

   Google to spend $75B on AI buildout in 2025, future of work in the age of AI

   1. JCJason Calacanis1:09:07

      time. Let's wrap up on, uh, Google. Google dropped 7% after reporting earnings on Tuesday, Chamath. Uh, revenue up 12% year over year to $96.5 billion. Wow. Cloud revenue was up 30% year over year, $12 billion. YouTube ads surging 14% to $10.5 billion. Net profit was around $26.5 billion, up 28% year over year. So, they are really focusing on profitability, obviously. Full year numbers, this is just extraordinary. Total revenue, $350 billion with $100 billion in net profit. Cloud and YouTube finished 2024 with a combined run rate of $110 billion. YouTube is basically Netflix inside of, uh, inside of Google and their Google Cloud is essentially AWS inside of Google. The thing that made investors get concerned, Chamath, is that Google said it would invest $75 billion in CapEx in 2025, 42% jump over 2024, 29% more than analysts expect. Obviously, this has to do with data centers, servers and the AI buildout. What do you think about that number, $75 billion, obviously in relation to what we saw with DeepSeek doing it with maybe a little bit less, maybe they're lying? Is this just an absolute waste of money or a gargantuan number or is it something they can easily, with that amount of profitability and cash they have, absorb and use in the future?

   2. DFDavid Friedberg1:10:39

      I think I should stipulate that Google's models are probably the best of all the models across a broad base of capabilities if you test for them. And so let's start there which is whatever they're doing is working. The thing that they need to do is be able to translate those models now into better products. And I think that that'll happen slowly. Like, for example, if you look at DeepResearch, most of the people online that are evaluating DeepResearch would now say that OpenAI is both faster and just better on the margins. All of these things can be improved. I don't think that's a comment on the base model, I think it's a comment on post-training and how they're attempting to productize these things. So, the other thing that Google has is a money machine that directly benefits from these AI-driven optimizations on ad targeting. The only other company that has anywhere close to the same credibility is Meta. So, I think what both of these two companies need to do is do a better job of explaining how that $75 billion gets segregated, how much of that goes to these AI-enabled models that actually do better ads optimization. There's a, there was a really interesting discussion by a former Meta machine learning engineer on X about how they did it. It's pretty amazing. It's staggering. But if they could, say, half the money goes to that and the other half goes to more speculative, you know, pre-training and post-training, I think the market would've eaten it up. So, it's probably more of a disclosure issue for Google 'cause I would say right now, their model quality is the best.

   3. JCJason Calacanis1:12:14

      Do you have thoughts on this buildout, Antonio? Obviously, I think you've been involved with xAI, uh, and obviously you're involved with Twitter and X previously and Colossus's colossal buildout that was extraordinary-

   4. DFDavid Friedberg1:12:25

      Yeah.

   5. JCJason Calacanis1:12:25

      ... to watch in such a short period of time. Do you have concerns that, like some people do, that this buildout is too expensive and it would be too hard to monetize all of that expense or is it, uh, maybe a little bit of hand-wringing and the opportunity in AI is so obviously huge that you just gotta take the leap of faith and, and, and if you build it, the revenue will come?

   6. AGAntonio Gracias1:12:49

      Yeah, I think Chamath has the right framework here which is return of his capital. And what he's saying by, you know, if Google had said, "Hey, half the money is for ads and half the money is for post-training," the market would've seen that half the money has a higher return on capital. And Google's return on capital is actually going up, uh, after the invitation of, of AI models into their, into their company. And I, I think that sort of abstracts the entire market which is...People are waking up that return on invested capital in data centers will matter, that the models are basic commodities and h- super competitive, and the best case is kind of a, a land war in Asia, it's a melee, and in a, in a worst case, just total commodities. What does matter is the return on capital data center, which is influenced by how good the data centers are. So you mentioned the XAI data center. You know, it's 100,000 GPU cluster. It's the most dense, coherent cluster in the world, and it will just train faster and better than other clusters. And it's also built th- for the most cheaply, and the fastest. So XAI will have the highest return on capital, and I also think the best trained data, and therefore will win. I think Google will also win because they have, uh, their TensorFlows chips. They've made their own, some of their own chips. They do focus on ROIC, and they have a great monopoly to kind of fund it all. So I don't think it's overblown. I think th- I think this is gonna be, as you guys have said before on the podcast, you know, bigger than the Industrial Revolution, but, uh, it's also true that you need to have a good ROIC, and if you don't, and you're not transparent about it, you can see what happens.

   7. CPChamath Palihapitiya1:14:12

      Yeah. Uh, I, I would argue Google's probably been the most frugal, thoughtful, and well-managed computing infrastructure investor of all time. You know, the '98 to 2005 era at Google, it was all about just cheap throwaway racks that... That was the big advantage they had is they weren't using the expensive Oracle servers, and they had a two to three-year kind of depreciation timeline on those. But they were super cheap, and so the, the ROIC was quite good. Then they got into energy efficiency, which they realized was a big drive in cost, so they started to build m- systems that, that were more energy efficient. As a result, they lasted longer. And then their, their depreciation schedule moved up to three to four years, meaning they could kind of write down the value of the servers over three to four years. And then from 2010 to 2015 era, their hardware system for cloud allowed them to kind of extend, through repurposing, the utilization, and they increased their depreciation from, to four to five years. And then in 2021, I don't know if you guys remember this, they made this kind of big change to their depreciation schedule on data center infrastructure to six years. So when they invest CapEx in a data center, they would write down the servers over a six-year cycle because of AI optimization on maintenance, so they started using AI just for internal management of the infrastructure. So I would view the $75 billion CapEx actually as a very positive signal for the company. I think that it means that they have a really strong line of sight on how they're gonna have full utilization and great return on this. If you do the math, ROIC math on this, $75 billion, assume a 20% ROIC, you've gotta be generating, call it roughly an incremental $15 billion of profit a year, plus the amortization of the 75 billion. So take the 75 billion, divide it by six, that's 12 billion plus 15 billion. So what they're s- so basically, they would need to make an incremental 27 billion of operating profit a year on the 75 billion for this to meet their ROIC performance. That doesn't seem crazy 'cause that's just under 20% of their incr- of their annual operating profit. This is a very kind of, I think, important point, which is Google doesn't just do this to, to build out AI in the future. They have a really strong line of sight on how this can kind of increment, and you don't have a huge hurdle for them for this to pay back. So I don't know. I would kind of, to Antonio's point, I'd view this as a positive. I think if you use their historical ability to manage infrastructure and make predictions on investments as an indicator of the future, this is a strong and positive indicator, and I do think that for all the naysayers out there that think that search is gonna evolve to chat, you could look at this as being a really important proof point that Google has the confidence that they're gonna be able to move from search to chat. And as Chamath points out, they've got great performative models, and I would view this more of as a positive than a negative. If they were underinvesting, I would be worried that they didn't know where to invest, but to see them make this degree of investment highlights the confidence in the strategy.

Episode duration: 1:36:42