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

Jason Calacanis 0:00 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.

Antonio Gracias 0:10 I have kids.

Jason Calacanis 0:11 You get the Eight Sleep sleep. You get the FitBod for fitness.

Antonio Gracias 0:15 All your investments are in- (laughs)

Jason Calacanis 0:15 And then you get Nutrascents for your-

Antonio Gracias 0:18 What a grifter. (laughs)

Chamath Palihapitiya 0:19 He's just talking about his investments. (laughs)

Antonio Gracias 0:22 (laughs)

Jason Calacanis 0:22 Those are the four things you focus on for people.

Chamath Palihapitiya 0:25 The four essentials.

Jason Calacanis 0:27 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.

Antonio Gracias 0:35 (laughs)

Chamath Palihapitiya 0:35 (laughs)

Jason Calacanis 0:35 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?

Chamath Palihapitiya 0:44 (laughs)

David Sacks 0:45 I'm going all in. Don't let your winners ride.

Jason Calacanis 0:49 Rain Man, David Sacks.

David Sacks 0:53 I'm going all in.

Antonio Gracias 0:54 And I said-

David Sacks 0:54 We open sourced it to the fans and they've just gone crazy with it.

Chamath Palihapitiya 0:58 Love US housing.

Jason Calacanis 0:58 West Side Queen of Kinwah.

David Sacks 1:00 I'm going all in.

Jason Calacanis 1:02 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?

Chamath Palihapitiya 1:55 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.

Jason Calacanis 2:11 Yeah.

Chamath Palihapitiya 2:11 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.

Jason Calacanis 2:20 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.

Antonio Gracias 2:44 (laughs)

Jason Calacanis 2:44 Uh, welcome to the program, Antonio.

Antonio Gracias 2:46 Dude, thank you.

Jason Calacanis 2:46 You put slightly more in.

Antonio Gracias 2:48 Thank you, Jason. I was also in an Uber with you too, by the way.

Jason Calacanis 2:50 Yes, yes.

Antonio Gracias 2:51 With a few others, so thank you. Thank you.

Jason Calacanis 2:51 I did see that you did the series A, I believe, or the B.

Antonio Gracias 2:54 Yeah, yeah.

Jason Calacanis 2:54 What did you do?

Antonio Gracias 2:54 Right behind you. We were in the B.

Jason Calacanis 2:56 You were in the B?

Antonio Gracias 2:56 Right behind you, yeah.

Jason Calacanis 2:57 Okay.

Antonio Gracias 2:57 Yeah.

Jason Calacanis 2:57 Yes, you were in the Chervin round. Okay. Uh, well, welcome to the program, Antonio Gracias.

Antonio Gracias 3:02 (laughs)

Jason Calacanis 3:02 And, uh, we've got a full docket today, and we might even have a special caller from the White House today. No promises, but you never

Jason Calacanis 3:11 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.

Antonio Gracias 5:01 (laughs)

Jason Calacanis 5:02 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.

Antonio Gracias 5:07 (laughs)

Jason Calacanis 5:07 This went on and on and it has become quite a story.

Antonio Gracias 5:12 Ugh.

Jason Calacanis 5:14 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?

Antonio Gracias 5:30 I mean, look, Jason, first, I want to thank you guys for having me. Uh, it's great to see everyone.

Chamath Palihapitiya 5:34 (laughs) You got to see the musical?

Antonio Gracias 5:37 I like to see a musical.

Jason Calacanis 5:38 No, I booked it. We're all going to the musical in Galway.

Antonio Gracias 5:40 Yeah. We're all going to the musical. (laughs)

Jason Calacanis 5:40 What is it called? Um-

Chamath Palihapitiya 5:42 Is there actually a name of this musical?

Jason Calacanis 5:45 DEI, The Musical.

Chamath Palihapitiya 5:45 Yeah.

Antonio Gracias 5:45 Yeah.

Jason Calacanis 5:46 It's DEI, The Musical.

Chamath Palihapitiya 5:48 Kind of funny name.

Antonio Gracias 5:49 Oh, man. I got so glad there.

Jason Calacanis 5:50 It's a heartwarming story-

Chamath Palihapitiya 5:51 I apologize, I apologize.

Jason Calacanis 5:52 ... of getting a job-

Antonio Gracias 5:53 Yeah.

Chamath Palihapitiya 5:53 Sorry, guys.

Narrator 5:54 I know, sorry.

Jason Calacanis 5:54 ... that you're not qualified for.

Chamath Palihapitiya 5:55 I apologize.

Antonio Gracias 5:56 Yeah, so I think the- I think the DOGE story maybe starts with the Twitter takeover.

Jason Calacanis 6:01 Yeah.

Antonio Gracias 6:01 Right. So Twitter was spewing the woke mind virus into the world, which is why Elon did to begin with.And, you know, when we got there, as you know, was, uh, basically breaking even. And there's, there, there was gonna be 12 and a half-ish billion dollars of debt on the company, so a billion and a half dollars in interest costs that w- there was no money to pay, um, which led to the turnaround, I think, which was the biggest turnaround, like, of all time. Uh, it... literally the biggest turnaround, I think, ever in history. Second-biggest tech deal ever done. 80% of the people, gone. That doesn't include all the contractors that were there. And, you know, the company's now servicing its debt, and they just priced, yesterday, their... but one of their bank deals at 97 cents, so this is a huge win. It means the company's doing extremely well. Other people bought the bank debt, and then, then the bank debt traded up to a little over 98, so 98 and five-eights. You know, a, a, a giant business success, a rousing business success. Uh, Jason, you were there for part of it. You saw it. It was a disaster. Uh, th- this place was, you know, it was tampons in the bathrooms and every woke thing you could possibly imagine and no one in the office. Uh, the, the... it was so bad that the pens had gone dry in the conference rooms, which is inc- is incredible. And I think that, you know, that's how the, the journey-

David Friedberg 7:07 So you mean, the pens had gone dry 'cause they were never being used or because-

Antonio Gracias 7:10 Yes.

David Friedberg 7:10 ... they were being used so much?

Antonio Gracias 7:11 They were never been used.

Jason Calacanis 7:12 Yeah. We got there-

Antonio Gracias 7:13 It, it-

Jason Calacanis 7:14 ... on cr- the... yeah, the Halloween weekend, and we started whiteboarding and, you know-

Antonio Gracias 7:18 The w- yeah.

Jason Calacanis 7:19 (laughs) No, n-

Antonio Gracias 7:20 The whiteboards don't work.

Jason Calacanis 7:21 No ink. Next pen-

Antonio Gracias 7:21 Yeah.

Jason Calacanis 7:21 ... no ink.

Antonio Gracias 7:22 Yeah, yeah.

Jason Calacanis 7:22 (laughs)

Antonio Gracias 7:22 The... I, I mean, everything. It was... it, it's incredible. And... but, but, uh, flowers were impeccable. Food being made fresh every day for thousands of people and thrown away, um, three times a day, tossed in the garbage. We didn't give it to the homeless. It was just... it was shockingly bad. Bureaucracy gone mad. Bad incentives. People don't care. So it was both... I think this turned into two things. One was just Stop the Wolf Mind Virus. You know, the interesting thing is, uh, the, the... they do extra brand safety checks there now, and they have 99% rating in brand safety, uh, now, right? So Stop the Wolf Mi- Wolf Mind Virus from going to the world, number one. Number two, fix the company. And both have happened. It's been a couple years now, right? Three years now, and both have happened. Um, not even three years. Two and a half years, really. And both have happened. And I think you take that... that... that was sort of the warmup act for what's going to Doge, which is, you know, the president of the United States, um, President Trump wants to Make America Great Again, and that, I think, begins with making the government great. And you gotta fix it. It's a turnaround. This is the biggest turnaround of all time. And President Trump has the, uh, courage to do it, and he's got a great ally in Elon to make it happen in Doge. And so the numbers are pretty easy, right? Uh, we're spending, uh, six and a half trillion. We bring in four and a half trillion. We gotta find $2 trillion somewhere, interest cost, a trillion dollars a year. The bond markets were going up. The, the long bond was going up a lot because people didn't believe that... you couldn't stop spending, creating inflation. You see those trading down now as Doge is starting to take effect. People see it's real. The stuff you're talking about. It's sort- it's sort of extraordinary what's happening. And the... you know, I... Elon said this publicly, right? Fraud, waste, and abuse. He thinks kind of 10% of the budget is probably fraud. I think it might be low, actually.

Jason Calacanis 8:54 Hmm.

Antonio Gracias 8:54 So you're talking about s- you know, six, 650 billion, a trillion in waste. I think that's probably about right. That alone fixes the problem. What's really serious about it, Jason, for me, and what sc- scared me when I... when we first started thinking about this... and look, and I'm not there full-time. You know, I'm, uh, in and out a little bit a- and trying to help where I can, but I'm not there full-time. Um, when I thought... when this started, I thought we had a democracy that had turned into a bureaucracy. Okay? What I'm afraid of now is we have a bureaucracy that is about to turn into a kleptocracy. I mean, a Latin American-style kleptocracy. Okay? The stuff you're talking about, that is pure fraud. And you're make... we're making some jokes out of it at the DIA musical, but if you go into the data that's coming out of USAID, what you find is, you know, there's a lot of political contributions going on there. Politico itself being funded by USAID. I mean, that is pure corruption. That's like a Latin American-style, uh, autocracy, and we cannot let it go there.

Jason Calacanis 9:47 Mm-hmm.

Antonio Gracias 9:47 I mean, I think we've... I think this happened just in the nick of time, and I'm super grateful to all the people there. There's, you know, 80-plus people there, all patriots going full time-

Jason Calacanis 9:55 Okay, so Chamath, uh, you've been watching this. You hear from Antonio. What's your general take on what we saw in the first, I don't know, 20 days of Doge?

David Friedberg 10:05 Well-

Jason Calacanis 10:05 Or no, 15 days. Sorry. It's 15 days of Doge.

David Friedberg 10:08 So let me try to give you a little bit of historical context because I think that that's important. I think whenever I hear so many people breathlessly saying some version of WTF as if this is totally new, it's not new. And I'll give you two examples, but one that I really wanna double-click on. The two examples I'll give you is that in 1941, the Truman Committee was formed because there was a fear that the spending by the Defense Department was completely out of whack. And over the next six or seven years, and this is really what gave Truman the credibility to then become Roosevelt's vice president, was they found incredible levels of waste, fraud, and abuse during the war, before the war effort and then after Pearl Harbor during the war process. Over seven years, that committee, and this is in 1941 dollars, they were tasked and budgeted with only $20,000 or $30,000, okay? Over the next six years, they spent less than a million. Inflation adjusted to 2023, this is where I found the data, was about six and a half million they spent. You know how much they saved? It's estimated they saved somewhere between 10 to $15 billion in 1941. That's a quarter of a trillion 2023 dollars. The second example is we did this under President Clinton, and that was called the National Partnership for Reinventing Government. So the first thing that I think it's important to acknowledge is this is not new. We've done Doge twice before. Both have been successful. The Harry Truman one was incredibly important because it really set guardrails for how this can be done. Everything in that committee, it was a Senate committee, was unanimous. So it was Republicans and Democrats that found waste, fraud, and abuse everywhere. They saved an enormous amount of money.The second, which is interesting, is these last two versions of Doge were driven and led by Democrats, the same people today who are basically saying, "Hey, hold on a second. We have congressional committees or we have inspector generals," and they lack the awareness to know that their own party was the driving force for this two times before. And I think it's important to just acknowledge that those methods are not good anymore, right? Because I think what we're finding early days as the rot is super pervasive, there's no accountability, and so I think you need people to look at it with fresh eyes. And what is Doge at the end of the day? What they are are read-only auditors of the truth. And the press secretary and the White House made this very clear. It's incredible the power that read-only access gives you. All it allows you to do is just take the data and present the data. They can't manipulate it. And what they're able to do is publish all of this stuff in real time, and that's why this is so important, because if it went into a congressional committee, to be honest with you, it would sit there and stew for six, seven, eight, nine months. You would maybe get small little tidbits of it. But now instead, you're just getting the full thrust of it. And what is the biggest thing that I find concerning? I think it's what Antonio said, which is that the media, who are supposed to be this intermediary layer that's totally objective between the government and the people, were not independent at all, but had all kinds of hidden incentives, $8 million to Politico, several million dollars to the BBC. I think it's important to ask what's going on. And by the way, that also has historical context. This is exactly what happened in the '60s and '70s where it turned out that record companies were paying DJs to play songs. There was a huge set of lawsuits and trial cases, and the result was a change in the law, right? And we call that payola now, which is you cannot take this money without disclosing it. And so had this money been absorbed by these entities and actually disclosed, maybe we'd be okay. But Nick, I sent you a link. Maybe you can throw it on the screen for these guys. This is a very simple manifestation of this cycle. We talked about this, guys, and we didn't realize how connected it all was, but we were asking ourselves during the election cycle last year, "Why are all these articles buried? Why aren't we really getting the truth?" And it turns out that the people who were responsible for telling the truth, somewhere along the chain, were cajoled or just told not to tell the truth, influenced by all of this back channel money that was going back and forth from the government to these folks.

Jason Calacanis 15:06 Okay. Yeah, let me just give some numbers to, uh, what you were referencing there. The US Aid organization has been giving money, uh, as have other agencies, to journals, databases, and subscriptions. There's probably some amount of that that makes sense. However, when we look at this, during Trump one, spend on Politico was averaging around $1.3 million a year, but it suddenly ballooned up to $8 million a year under Biden, and you can see the quarterly payments here on this chart. So, there's some normal amount of spend on publications or for a library at an organization, and so what we're looking here is all federal agencies, and suddenly during Biden, there is a very suspicious ramp up in spend to Politico. All of this is breaking. A lot of this hasn't been verified yet. So, we'll, we'll put that caveat on it. And then there is a number of $34 million that's been floating around. That's all years back to 2008, not just 2024. Less people have that number juxtaposed or, or, or, um, misattributed. When Politico was acquired back in 2021, they were doing about $200 million in revenue. So, this would be about 4% of their revenue. It's pretty significant. The BBC also received $2.7 million in funding from US Aid in 2023. That was 8% of their annual income. That's a little suspicious. Thomson Reuters, which is the consulting arm of Reuters, they received $120 million from the federal government since 2011. That's gotta be looked at and double-clicked on, and, uh, half of that came during the Biden administration. New York Times hasn't actually received all that much, $370K from the federal government last year. Under Biden, it went from $100K a year to like $300. So the, the New York Times data has been cleaned up a little bit. All of this is to say, there's spending going on with the press that certainly doesn't look good and should be verified and challenged, obviously, and we are in a breaking news environment, so we'll see how that information shakes out over time, which is one of the great things I think about Doge is they're getting this information out there, and citizen journalists are, uh, looking at public databases, Friedberg, and, uh, we're having a conversation about this, a conversation two years ago, Friedberg, when you kept harping on every episode about our debt and, uh, you know, about the interest payments. Two or three years ago, you were way ahead of the curve, and now here we are. We didn't think anybody would ever take this cause up, and now it is the cause of the moment. What are your thoughts on the first two weeks of Doge, Friedberg?

Chamath Palihapitiya 17:46 Magnificent.

Jason Calacanis 17:48 Okay.

Chamath Palihapitiya 17:48 Magnificent. I mean, what else is there to say?

Jason Calacanis 17:51 Eggplant emojis.

Chamath Palihapitiya 17:52 This is... Yeah, this is the eggplant emoji. It's what we needed.

Jason Calacanis 17:55 Neat.

Chamath Palihapitiya 17:55 If you zoom out on what Doge is doing, I think the best way to describe it is zero-based budgeting, and in organizations that go through zero-based budgeting, you do a cycle, typically annually, where you take all of your OpEx, all of your expenses in running a company or running an organization down to the studs. You take it down to zero, and you rebuild it up and you say, "What are we trying to achieve this year from first principles? Based on that set of objectives, those goals, what do we need to do? What's the minimal expense we need to run?" You don't start with last year's numbers and say, "What else do we need to do?" And start to add on top of that. You really do a hard level, high degree of scrutiny.... on every dollar moving out. And that's what Doge is effectively doing. They're doing a zero-based budgeting on the federal government. They're looking at every line item and they're asking the fundamental question, which I don't think we talk about in the public discourse enough, which is, what is the essential role of government? And there is a great debate to be had around that point. Should government be providing humanitarian aid in international markets? That's a good debate to be had. Should the government be providing security to nations that can't provide security for themselves? Does the U.S. government have a role in that? Should the government be providing loans for people to go to (censored) universities? Should the government be providing loans for people to buy homes that are overpriced, et cetera, et cetera, et cetera? And as we start to ask the questions of how we're spending money, I think it ends up leading to the most important questions, which is, what is the essential role of government, which I think is the debate that needs to be had in order for the democracy to last. So, I'm very happy to see the effort of Doge and I think that it's the beginning of what I hope will be, kind of, a long-term process of asking the fundamental questions about essential government.

Jason Calacanis 19:30 And, and Antonio, zero-based budgeting was the first thing you, sort of, introduced when the Twitter takeover happened. Just, what do we need in terms of design? What does the sales team need to hit these sales numbers? How many servers do we need? And my Lord, the waste, fraud and abuse at that company was shocking. They had buildings that were $100 a square foot, if I remember correctly, that were used for storage of the furniture from the previous building that had been upgraded, and were storing them in class A office space. You reference the commissary. 20 people were having lunch a day, but they had never ratcheted down the amount of food they were making, so each meal was about (laughs) $800 on average when you, when you did the math for those 20 meals, just in the San Francisco office. Maybe you could talk a little bit about how the, the shock and awe campaign of just freezing spending and then seeing, hey, what actually is necessary to accomplish this task, worked out at, at Twitter, and then how you see that being executed, uh, you know, inside of our government.

Antonio Gracias 20:43 Yeah, thanks Jason. It was, uh, pretty extraordinary actually. The, um, you know, the Twitter experience, the first thing you do in a term like that is try and get the checkbook and just turn payments off and then see what happens because there are lots of people that shouldn't be getting paid, and sometimes they complain, and sometimes you find the people that complain the loudest are the ones who are, are committing the worst fraud. They're the worst fraudsters in the whole, in the whole game, right? The worst grifters are the ones who are saying... they're, they're, they're crying, uh, the, the most amount of foul. And the problem, at least in Twitter, there were financial statements. Like, we could actually, there was an audited financial statement and they were basically, you know, they were in some ways correct. I would say, uh, you know, there were some issues with the, with the user growth, the 000s, et cetera,

Narrator 21:19 Mm-hmm.

Antonio Gracias 21:19 ... and the incentive plans, but the actual, like, you know, the cash flow numbers were pretty much correct. Here, the problem is much, much deeper, and it, uh, it makes this zero-based budgeting question much harder, which is, the way the government works, uh, a department just basically asks for money from Treasury and they send it out. We all run businesses. There's a reconciliation process. You know, you have a contract, uh, you issue a PO against it, something comes in, you check that it came in, service is, is rendered, and then you issue a payable and then, you know, some, a month later you pay it, right? That doesn't happen at the US government.

Jason Calacanis 21:51 Hm.

Antonio Gracias 21:51 There is... That, that process is broken. It used to happen, it's broken now. And so literally, money's flowing out. I used to ask myself this question, why are the numbers always revised? Why are they always wrong? How can the government know how much money it spends? Just hit the button on the computer and figure it out. Problem is, that button doesn't exist. You know, we spent time early on, I was, uh, at Mar-a-Lago to Elon trying to track through, like, how does the money actually flow? We... No one could tell us how it actually flows. Where is it going out? People didn't know.

Chamath Palihapitiya 22:17 Crazy. Crazy.

Antonio Gracias 22:17 And it's totally crazy, and it's... The reason he has-

Chamath Palihapitiya 22:19 Like, it all goes through Treasury, Antonio? Or like, ex- can you just explain that to us? Like-

Antonio Gracias 22:23 Well, I, so I will try to explain it to you, and I'm not sure I have full command of it. I'm not sure anyone does quite yet. It goes to Treasury ultimately, but it was supposed to flow through... The way it was supposed to work in the, it was changed in the 70, in the '70s. In 1973, the Nixon administration at, in '71, let me go back. They came off the gold standard which allowed deficits. In '73, at the nadir of the Nixon presidency, Congress took away from the presidency the executive power. This thing called apportionments, which was the power of the executive to stop spending. So, Nixon was abusing it by stopping things he didn't want, and so Congress took it away from him. What that means today is, the executive, as he reaches in, it's very hard to just stop payments. So, what's happening is, the, the government is, is, is put in a process where they would just have an authorized executive kind of stamp a bill that got paid. That broke, and I don't know when it broke-

Chamath Palihapitiya 23:13 Hm.

Antonio Gracias 23:13 ... but it broke some time. So, the money flow now, department gets a budget authorized to it, uh, by Congress. It goes to OMB. OMB allocates the budget. That department then just sends a money request to Treasury to pay.

Chamath Palihapitiya 23:28 Hm.

Antonio Gracias 23:28 It is not reconciled against what happened. This is one of the reasons-

Chamath Palihapitiya 23:31 And this is-

Jason Calacanis 23:31 Yeah. (laughs)

Chamath Palihapitiya 23:32 And that's it.

Jason Calacanis 23:32 There's-

Chamath Palihapitiya 23:32 There's no, there's no, there's no controller.

Antonio Gracias 23:34 No, no.

Chamath Palihapitiya 23:34 There's no controller function like there is in a normal company.

Antonio Gracias 23:37 100%. There is no control-

Chamath Palihapitiya 23:38 Yeah.

Antonio Gracias 23:38 There is no controller. There's no reconciliation. The reason they can't pass audits, okay? They're, the, the reason this happens is because you can't audit something you haven't reconciled. You know, the only audit, uh, that I've seen is actually from the Social Security Administration, and when you read it, I've got one of my partners here have read the thing, uh, it has, it's just riddled with material weaknesses. There are probably-

Chamath Palihapitiya 23:58 Do you think there are individuals that have made, like, millions or billions of dollars from missed payments overseas? Like, is this, kind of, what's gone on in the missing money in Ukraine, do you think? Like, it's kind of found its way to the wrong places?

Antonio Gracias 24:10 Yeah. I mean, so what I would... I don't know what happened in Ukraine. I don't. It, it-

Chamath Palihapitiya 24:14 Such a crazy story.

Antonio Gracias 24:14 Yeah.

Chamath Palihapitiya 24:15 Yeah.

Antonio Gracias 24:15 It is shocking about Ukraine. I will say that I have ex- business experience trying to work in businesses that had Medicaid and Medicaid, Medicare as payments. I wanted to make that better, right? We, we exist to make the world better. And we just stopped 'cause we found, we found so much fraud.

David Friedberg 24:29 Oh, wow.

Antonio Gracias 24:29 ... I mean, I'm p- I'm certain. We literally have a rule here. A government payor in- in those areas, if it's more than, like, a third of the business, we don't do it in- in the services space. This is- this is why. We just found- we found continuous fraud in the companies we were looking at investing in.

David Friedberg 24:44 Well-

Jason Calacanis 24:44 Yeah, just threading these things together, you know, you- (laughs) the really interesting thing with the Twitter pausing of payments was, you know, at some point we were in a meeting, you know, at 1:00 AM on a Saturday, and it was like, "Hey, let's turn the credit cards off to see-"

David Friedberg 24:58 Right.

Jason Calacanis 24:59 ... "what bounces-"

Antonio Gracias 25:00 What happens?

Jason Calacanis 25:00 ... "and, uh, you know, and what happens." And then, of course, we start getting calls, and people started routing, obviously, because they knew Saks was there, you were there, I was there-

Antonio Gracias 25:09 Yeah.

Jason Calacanis 25:10 ... "Hey, you know, a company who I shared an investor with or, you know, in- in another company said, 'Hey, you know, we're not getting paid for this.'" And it was, like, some SaaS software that nobody was using, et cetera. So you start figuring out, to your point, "Okay, i- is this software even being used?" There was so much software and services that had been paid that nobody had ever logged in to set up.

Antonio Gracias 25:33 Yes.

Jason Calacanis 25:33 So it was just being paid as pure graph. Now, you said, Antonio, correctly, the people who come first, like, they're probably the ones who are in on the biggest grift because, hey, you know, I- I figured out how to grift this money. How US Aid got to the top of the Doge list, I think is one of the most interesting aspects of this story. (laughs) So, if you remember, on January 21st, Trump decided he would do a bunch of executive orders, right? And one of them was to pause foreign aid for 90 days. Okay, this seems reasonable. We gotta take care of our country. That was part of his mandate for becoming the 47th president of the United States. So, couple of days later, the White House said, "Hey, this US Aid leadership is trying to circumvent the executive order." They're... In other words, they're just gonna keep paying people even though the executive order came out. That alerted the Doge team. So Elon confirmed this on X. He said, quote, "All Doge did was check to see which federal organizations were-" (laughs)

David Friedberg 26:29 Yeah.

Jason Calacanis 26:29 ... "violating the president's executive orders the most. Turned out to be US Aid, so that became our focus." And according to NBC, security officials at US Aid tried to prevent Doge from even getting into the building or accessing the systems. To your point, Antonio, the person probably who's got the most to hide is the one who's going to fight the most. Over the weekend, Doge gained access to US Aid, and then people started tweeting out all of this, you know, crazy spend and things that any American who looks at it and says, "Wait a second, if we haven't fixed the goddamn water in Flint, Michigan, why are we sending money to Galway or- and Ireland to do a DEI musical? This makes no sense." And that's, I think, the key piece of this, Antonio, is can you win the hearts and minds of Americans? Because some of this stuff, uh, I don't know if it's legal or it's not legal or it's against protocol or it is protocol. We're gonna find out. There's been tons of- of- of legal, um, cases and lawsuits that have been filed. But to your point, this is how Elon found out about US Aid.

David Friedberg 27:37 J Cal, let me ask you a question.

Jason Calacanis 27:38 Sure.

David Friedberg 27:39 Where- where does that place you in your political philosophy around the importance of human rights abroad?

Jason Calacanis 27:46 Great, great (laughs) question. You know, I've always felt that, uh, the West should act in unison, and if the United States is the greatest economy or the strongest, we should lead. There is something called the Universal Declaration of Human Rights. The United States, Eleanor Roosevelt, uh, wrote this at the UN, and everybody tries to hit those notes. I think it's great that we try to reduce suffering in the world, but I think we should be doing it not unilaterally and not to try to manipulate governments. And that's the piece of this that US Aid is obviously a grift, where people are trying to steal money for their pet projects, and I don't think they're acting in unison and above board to look and say, "Okay, where's the most suffering in the world? How can we help that?" You know, that- that, to me, seems like a noble thing to do. And if the United States has the budget to help fight AIDS in Africa or, you know, poverty, you know, that's fine.

David Friedberg 28:38 Do you think there's a chance that some of these human rights issues were embellished to try to get more money?

Jason Calacanis 28:45 Well, I do think the hu- you know, I- I- I did this tweet recently, so yes is the answer. If you look at Amnesty International, Amnesty International where I worked, was one of my first jobs, they were worked- working on people who were imprisoned, tortured, raped, murdered, systematic murder of dissidents for freedom of speech, freedom of assembly, religion, et cetera. And then somewhere along the line, you know, the- Amnesty International was tweeting about trans rights, and that's the big focus. This is a very small amount of, you know, people on the planet, and I don't think that those human rights violations in any way relate to the tragedy we're seeing of people being murdered, tortured, raped, a- and caned and- and beheaded in certain places in the world. So, there- there is a way to look at suffering and say, "We should handle this first." And yes, somebody who, you know, uh, feels they got misgendered, maybe that's way down the priority list compared to systematic rape of women in these, you know, war zones. Those would be the high-order bits. And so, this thing has gotten... The- the other fascinating thing I think about US Aid, which I'd like to get your thoughts on, too, Chamath, is at what point did this switch from being the- the left saying, "We should not intervene," right? The left's position always in the '80s, '90s when we were growing up was, "We shouldn't be doing these operatives in other countries. We should let democracy flow, let these countries figure it out for themselves. We shouldn't be doing empire-building. We shouldn't be doing imperialism." And then all of a sudden, now it's just such a grift that I think everybody's got their hands in the pie. Lindsey Graham's on some nonprofit that gets money from this. I don't know if that's above board or not. Everybody, a lot of people who were formerly in government seem to be part of this NGO train. So the whole thing's just turned out to be a grift, and it's a bipartisan grift, obviously.

David Friedberg 30:40 I think the biggest-

Jason Calacanis 30:41 It's infuriating.

David Friedberg 30:41 ... I think the biggest thing that we will have to confront is that many of the things that we thought were issues or problems may have actually been somewhat embellished because of this money cycle.

Jason Calacanis 30:58 Sure.

David Friedberg 30:59 And I think that that's gonna cause a lot of people to feel really... they'll probably feel really foolish about some of the decisions they made. All the attempts at cancellation are gonna look really dumb in hindsight.

Jason Calacanis 31:11 Yeah. All right.

Antonio Gracias 31:13 I just wanna go out to our friend, David Sacks, here, who's coming online.

Jason Calacanis 31:15 Oh, okay. Here he is. David, looking good.

Antonio Gracias 31:17 Which... And, and, and, and the one thing I, I wanna, uh, point out. This goes way back. Uh, I think maybe more than a decade ago, David tried to explain to me that Neocons had taken over American foreign policy, and they were... Well, your question about, uh, "Why did the Democrats change? Why did Republicans change?" Et cetera. The Neocons took over foreign policy on both sides, Democrats and Republicans, and populated out this very activist, muscular stance, which was bad for America. And I think, Jason, that answered your question as to why

Antonio Gracias 31:44 the Democrats shifted.

Jason Calacanis 31:45 All right. With us is David Sacks. How you doing, brother? Are- are-

David Sacks 31:48 Good.

Jason Calacanis 31:48 ... you literally in the White House?

David Sacks 31:50 I'm in the, uh, EEOB.

Jason Calacanis 31:53 Ah, okay.

David Sacks 31:54 There's like a podcast studio, actually, in the EEOB.

Jason Calacanis 31:57 Oh, fantastic. And you're wearing a suit every day?

David Sacks 32:00 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.

Narrator 32:10 (laughing)

David Sacks 32:10 I mean, everybody's on the take except you. What's going on?

Narrator 32:13 Oh.

Chamath Palihapitiya 32:13 If I had- if I had known, I would have started an NGO. Where's my NGO?

David Friedberg 32:17 You had everything except the money laundering. You had the grift, you had the virtue signaling.

Chamath Palihapitiya 32:21 Ha.

David Friedberg 32:21 You had it all, except the actual money.

Chamath Palihapitiya 32:23 If I had known.

David Sacks 32:23 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-

Chamath Palihapitiya 32:40 Yep.

David Sacks 32:41 ... just, why? Well, now we know. The money is all going to them.

Chamath Palihapitiya 32:43 Totally.

David Sacks 32:43 It's like round-tripping to them. New York Times-

Chamath Palihapitiya 32:46 Crazy.

David Sacks 32:46 ... getting paid. Politico-

Chamath Palihapitiya 32:48 (laughing)

David Sacks 32:49 ... getting paid. Bill Kristol, perennial warmonger, getting paid.

Chamath Palihapitiya 32:53 (laughing)

David Sacks 32:54 Ukraine, getting paid. Like 11 out of 12 publications, Ukraine, getting paid.

David Friedberg 32:58 Incredible.

David Sacks 32:59 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.

Chamath Palihapitiya 33:14 BBC, BBC.

David Sacks 33:15 They're getting paid.

Chamath Palihapitiya 33:15 You wonder why everyone in the UK is so-

David Sacks 33:17 They're getting paid.

Chamath Palihapitiya 33:17 Yeah.

David Sacks 33:17 Like, every left-wing-

Chamath Palihapitiya 33:18 I couldn't believe that BBC is getting paid.

David Sacks 33:20 Every left-wing organization in the world seems to be getting paid by this slush fund at USAID, which disburses about $50 billion a year. That's a billion dollars a week. That's actually a lot of money. And so it, it just, it makes you wonder... You know, the left in general tries to portray itself as a movement of the people, that it's grassroots. This is the exact opposite. This is astroturf. This is basically money coming from the top down, out of Washington, to fund all these groups, maybe not even in the United States. Like, all over the world. So, it makes you wonder, what is the real level of local support for these left-wing policies all over the world?

Jason Calacanis 33:59 Yeah. Crazy.

Jason Calacanis 34:00 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?

David Sacks 34:27 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.

Chamath Palihapitiya 36:25 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?

David Sacks 37:21 The question you're describing is called market structure. You know, h- how-

Chamath Palihapitiya 37:26 Yeah.

David Sacks 37:26 ... what are the definitions going to be? Because digital assets can be many things.

Chamath Palihapitiya 37:29 Yeah.

David Sacks 37:29 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-

Chamath Palihapitiya 37:46 Hm.

David Sacks 37:46 ... 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-

Chamath Palihapitiya 38:15 Right.

David Sacks 38:15 ... 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.

Chamath Palihapitiya 39:02 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?

David Sacks 39:22 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-

David Friedberg 39:58 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-

David Sacks 40:14 The only-

David Friedberg 40:15 ... wh- would this be an adjunct, like a, like an add-on?

David Sacks 40:18 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-

David Friedberg 40:43 Mm-hmm.

David Sacks 40:44 ... 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.

Jason Calacanis 41:20 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?

David Sacks 42:14 Well, the first thing you want to do if you're going to protect consumers is you want to bring the activity onshore.

Jason Calacanis 42:19 Okay.

David Sacks 42:19 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.

Chamath Palihapitiya 42:43 The Bahamas. Yeah. (laughs)

David Sacks 42:44 Probably a recent

Jason Calacanis 42:44 Little bit of a tell. (laughs) A little bit of a tell.

David Sacks 42:46 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.

Jason Calacanis 43:01 Mm-hmm.

David Sacks 43:01 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-

Jason Calacanis 43:14 Hm.

David Sacks 43:14 ... creating a, a crypto project. So all of that will be in the bill. And then in the meantime, the SEC has created a new task force under Hester Peirce, who's a SEC commissioner. And she is already starting to do work in that regard, to define a better regime at the SEC for crypto projects. You mentioned that Gensler said that the SEC's doors were open to crypto companies and they should come in-

Jason Calacanis 43:42 Yeah.

David Sacks 43:42 ... and talk to us and work with us. That was very disingenuous.

Jason Calacanis 43:45 Agree.

David Sacks 43:46 Crypto companies would tell me they would go see the SEC. The SEC would tell them nothing about what the rules were, but they would have enforcement people in those meetings just writing down everything they would say, and the next day they would get sent a Wells notice. So the truth is, the SEC was not cooperating. They were not providing any clarity. They were just honeypotting founders basically to come in and then they would immediately investigate them. I mean, it was really terrible. Look, we expect founders to play by the rules and abide by the law and be compliant. But when you won't tell them what the rules are and then you prosecute them, there's no fair way for them to comply. So the most important thing is to give them a framework. I think the SEC now is doing that. They're starting to do that already. And then legislatively, we're gonna have a bill that does that, uh, moving through Congress over the next few months.

Jason Calacanis 44:32 This is absolutely awesome. We're super encouraged that you're doing this and, uh, we really appreciate you coming on the pod. Uh, wish you could participate in the other three or four crazy discussions we're about to have, but we understand you've got to stay focused on the mission.

David Sacks 44:45 (laughs)

Jason Calacanis 44:45 Uh, anything on the AI front that we can look forward to in the coming weeks that you're working on? I know that's the other part of your mission.

David Sacks 44:53 Well, the big thing is, like I talked about last time, the president rescinded the Biden EO, which was this hundred-page monstrosity. It burned some regulation on our AI companies. I think that decision's been proven even more right in the wake of DeepSeek because we know that China has basically caught up or they're very, very close to catching up. It felt like that Biden EO was written in a vacuum in which the US was the only player in AI, and that if we imposed a bunch of, burned some rules on our companies, that somehow that wouldn't allow China to catch up, right? And I think it's pretty clear that China is very, very competitive. If we hobble our AI companies, it's gonna go down to China's benefit. So, I think that was a very good decision and what the president said in his EO is that we should devise a new AI action plan to replace that Biden EO and we're working on that right now.

Jason Calacanis 45:42 All right, David, we really appreciate-

David Sacks 45:43 Tex, any fun anecdotes from Doge you want to share?

45:45 I'll give you one anecdote, which is, I've been working late here a number of nights at the EEOB. And I won't tell you where the Doge guys are based, but you know, I know where their office is. So I just went by there to say hi. The whole room was full of young coders. I think they were engineers, but they were wearing, like, suits and ties, so that's a little different. But they were all working really late. I mean, they're working there late at Friday night and the facilities people don't know what to do because they've never had people like us to stay late on a Friday night before.

46:15 (laughs)

Jason Calacanis 46:15 (laughs)

David Sacks 46:15 So they've had to create new, uh, new facilities access for, for these guys.

Jason Calacanis 46:20 They're like, "You're coming to the office and doing work. We don't have a protocol for that."

David Sacks 46:24 (laughs)

Jason Calacanis 46:25 "What, how does that work? We're gonna need to get you a key or a badge to come to the building."

David Sacks 46:29 Yeah.

Jason Calacanis 46:29 Uh, well, it's absolutely awesome to see the progress you're making in the first two weeks and continued success. We're so proud of the effort.

David Sacks 46:39 All right. Thanks, guys.

Jason Calacanis 46:40 All right.

David Sacks 46:41 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?

Jason Calacanis 46:52 This is-

David Sacks 46:53 For the average person?

Jason Calacanis 46:54 This is-

David Friedberg 46:54 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.

Jason Calacanis 48:51 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.

Antonio Gracias 50:14 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.

David Friedberg 51:17 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-

Antonio Gracias 51:56 Yeah.

David Friedberg 51:56 And the fact that you didn't even know that is just pathetic.

Antonio Gracias 51:59 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.

Jason Calacanis 52:28 So the Democratic Party is lost. They'll continue to be lost. Interesting thing came up

Jason Calacanis 52:33 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-

David Friedberg 53:59 Well, I, I think it's not a-

Jason Calacanis 54:01 Debt? It's not- Where is this money gonna come from? Yeah.

David Friedberg 54:03 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.

Jason Calacanis 55:08 Antonio, you think the government should be in this business?

Antonio Gracias 55:12 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-

Jason Calacanis 55:41 What does it mean, an industrial policy in this context?

Antonio Gracias 55:42 So-

Jason Calacanis 55:43 Example.

Antonio Gracias 55:44 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.

Jason Calacanis 56:54 They're literally building cities in NEOM.

Antonio Gracias 56:57 Yeah.

Jason Calacanis 56:57 They've got-

Antonio Gracias 56:57 Yeah.

Jason Calacanis 56:58 ... you know, a dozen-

Antonio Gracias 56:58 Yeah.

Jason Calacanis 56:58 ... cities being constructed-

Antonio Gracias 57:00 Yes.

Jason Calacanis 57:01 ... uh, and trying to take an oil economy and shift it to a tourism economy-

Antonio Gracias 57:05 Tourism, yes.

Jason Calacanis 57:05 ... a technology economy, a private equity economy.

David Friedberg 57:08 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?

Jason Calacanis 58:14 Mm-hmm.

David Friedberg 58:14 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.

Jason Calacanis 58:22 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?

Chamath Palihapitiya 58:51 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-

Jason Calacanis 1:00:18 Yeah.

Chamath Palihapitiya 1:00:18 ... over the years-

David Friedberg 1:00:18 Yeah.

Chamath Palihapitiya 1:00:19 ... 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-

Jason Calacanis 1:01:46 When the Silk Road got, uh, shut down, yeah, we seized 144,000 Bitcoin and that's sitting somewhere in some Department of Justice account.

Chamath Palihapitiya 1:01:54 It got sold off. Yeah, they sold, I, I think they sold that off.

Jason Calacanis 1:01:57 They sold it?

Chamath Palihapitiya 1:01:58 Yeah.

Jason Calacanis 1:01:58 No, I think we still have it. I think that was like the idea was, that was gonna become the Bitcoin (inaudible) . I mean, you could also come up with new taxes to fund this.

Chamath Palihapitiya 1:02:05 But the DOJ, the D, the DOJ, the DOJ sells these. So like who do you think at the DOJ is making the Bitcoin market decisions, and is that the right person to be monetizing these assets?

Jason Calacanis 1:02:13 I mean-

Antonio Gracias 1:02:14 They have been issuing (inaudible) security. I gotta, I just wanna follow up on it, which is when, when you think about Social Security, it's six, uh, $6 trillion of, of our 36 trillion debt and it's actually a fake Treasury bill.

Jason Calacanis 1:02:28 Yeah.

Antonio Gracias 1:02:28 So just to, uh, we, one, one of the things we've figured out (laughs) early days before the inauguration on Doge is like that $6 trillion sits on the ledger. It's just a paper ledger over. So actually if it gets paid out, it's also gonna be very inflationary. It's just a fake Treasury ledged over, uh, that pays a very low rate. And, uh, here at, uh, Valar, my partner is John Schulken has been reading to try to help. The, the only, the only thing that we find that's audited in the government, the Soc- the Social Security Administration actually has an audit. It has an audit. And when you go through the audit, it's crazy the material weaknesses going back to Doge that you find. Yeah, it'd be way better to have that invested in a way that was economic i- for people with real money. Not fake-

Jason Calacanis 1:03:05 By the way, guys, as we were speaking-

Antonio Gracias 1:03:05 But, well, and there's precedent for this.

David Friedberg 1:03:07 Guys, as we're speaking, the-

Jason Calacanis 1:03:08 Oh.

David Friedberg 1:03:09 ... the federal judge just put a temporary restraining order on Doge and has barred Elon and his team from accessing US Treasury payments data.

Jason Calacanis 1:03:16 Hmm. All right.

Antonio Gracias 1:03:18 Boy.

David Friedberg 1:03:18 Mm-hmm.

Jason Calacanis 1:03:18 So now we're gonna have a real grudge match between the public-

David Friedberg 1:03:24 Was it federal? Which judge was it? Federal judge?

Jason Calacanis 1:03:27 Federal judge, yeah.

Antonio Gracias 1:03:28 Would you know why? Chamath, does it say why?

David Friedberg 1:03:30 No, but Elizabeth Warren is doing a victory lap, so I'm sure that, you know, she's part of it.

Jason Calacanis 1:03:38 So the government agency set up by the president can't look at the database of the Treasury?

Antonio Gracias 1:03:44 So th- just to be, um, double-click here, Doge is not a new agency. It's the renaming of existing agency. I can't remember the name of it, we'll have to find it. Elon tweeted about this, uh, some weeks ago, that was set up under Obama actually to do this, to, uh, create an audit function to the government. What's crazy about this, uh, ruling to me is, uh, Congress basically is, uh, the Constitution delegates to the executive the, um, the ability to spend the money and they go through Congress. It gets actually appropriated in Congress and the executive spends it. How can you spend money if you don't (laughs) know where it went? I mean, how can you be responsible, right? You have the authority to spend it, but not the res- and how can you responsibly spend it if you actually can't go look and see where it goes? (laughs)

David Friedberg 1:04:26 Guys, this is flying fast and furious. President Trump just unveiled his framework for his tax plan. No tax on tips, no tax on senior Social Security, no tax on overtime pay, renew the middle class tax cuts, adjust the SALT cap. So again, very pro, as I said, pro-labor, pro-populist. Eliminate all special tax breaks for billionaire sports team owners. Oh, all right, I'm no longer-

Antonio Gracias 1:04:52 (laughs)

David Friedberg 1:04:52 I already sold the team.

Jason Calacanis 1:04:53 Sorry, Chamath.

Antonio Gracias 1:04:53 (laughs)

David Friedberg 1:04:53 I already sold my piece. I already sold my piece.

Jason Calacanis 1:04:57 Oops, oops. Yeah.

David Friedberg 1:04:59 Closed the carried interest-

Jason Calacanis 1:05:00 Thanks, Biden.

Antonio Gracias 1:05:01 Yeah.

David Friedberg 1:05:01 Closed the carried interest tax deduction loophole, which allowed you to claim carried interest as-

Antonio Gracias 1:05:05 Sorry, Antonio. Long-term capital.

Jason Calacanis 1:05:08 Long-term capital.

Antonio Gracias 1:05:08 Oh, no, please. Oh, I better run.

David Friedberg 1:05:09 Oh, no.

Antonio Gracias 1:05:10 I'll be back in a few hours and sell some things.

Jason Calacanis 1:05:13 (laughs)

David Friedberg 1:05:13 (laughs)

Antonio Gracias 1:05:15 (laughs)

David Friedberg 1:05:16 Isn't that incredible?

Jason Calacanis 1:05:16 Uh.

David Friedberg 1:05:17 I mean, he is really going for the jugular. Wow.

Jason Calacanis 1:05:19 Hmm.

David Friedberg 1:05:20 Amazing. I support this 100%.

Chamath Palihapitiya 1:05:22 The SALT deduction's coming back, is that right?

David Friedberg 1:05:25 Yeah, marginally though. I don't think he's gonna give it the way that it was before. But isn't this incredible? I mean, uh, how, who's gonna stand up and lay on the railroad tracks for being able to amortize a multi-billion dollar sports team purchase, or that when you make a fund investment, you should get long-term kept gains treatment? Who is going to be that person in this admi- nobody's gonna stand up for these things.

Jason Calacanis 1:05:49 I think we should just stop doing venture and just start NGOs. We just start a whole-

Antonio Gracias 1:05:54 Yeah.

Jason Calacanis 1:05:54 ... rat's nest of NGOs, ship money around.

David Friedberg 1:05:57 Uh-

Antonio Gracias 1:05:57 You could have an incubator.

Jason Calacanis 1:05:59 Yeah, absolutely, NGO incubator.

Antonio Gracias 1:06:00 (laughs) Yeah, incubator.

Jason Calacanis 1:06:02 Come, if you've got a-

Antonio Gracias 1:06:02 Yeah.

Jason Calacanis 1:06:02 ... great idea for an NGO, we can-

David Friedberg 1:06:04 J-K- why, why didn't you launch Launch in every single random developing country in the world?

Antonio Gracias 1:06:10 Yeah. (laughs)

Jason Calacanis 1:06:10 I mean, if I had known that-

David Friedberg 1:06:11 As, as an NGO.

Antonio Gracias 1:06:11 You would have had eight billion of AUM because of USAID.

Jason Calacanis 1:06:15 Just launch one in Vietnam-

Antonio Gracias 1:06:17 Yeah.

Jason Calacanis 1:06:17 ... and we could have, yeah. We can just start in Vietnam.

Antonio Gracias 1:06:19 NGO Launch, go Launch. I love it.

Jason Calacanis 1:06:21 We, we could have had a, yeah, a Launch accelerator in Vietnam for transgender... Yeah. For su-

David Friedberg 1:06:26 The Jason Calacanis Launch fund of Equatorial Guinea.

Antonio Gracias 1:06:30 (laughs)

Jason Calacanis 1:06:32 (laughs)

David Friedberg 1:06:32 (laughs)

Antonio Gracias 1:06:32 It is so crazy though, to come out and, you know, watching the Democrats, just the self-own of coming out and being like, "We have to stop people from stopping wasteful spend." Like, they just don't seem to understand wh- how unpopular- These are kitchen table issues, like Ram said. I mean-

Jason Calacanis 1:06:52 Yeah.

Antonio Gracias 1:06:52 ... everyone cares about that, and if you don't care about that, if you care about these fringe issues and not the things people care about on the kitchen table-

Jason Calacanis 1:06:58 Well, a- and if you think about the transgender sports issue, biological males playing in female sports leagues...That issue that Trump just did an EO yesterday for, was such an obvious issue of fairness and ju- has nothing to do with transgender, it just has to do with, like, biology. If a, if a biological male plays basketball on a, on a, a biological female team, somebody's gonna get hurt and that person's gonna score 100 points. It's just obvious. And the fact that the Democrats couldn't see that issue being 100% for, or 95%, makes no sense. Like-

Antonio Gracias 1:07:40 Yeah.

Jason Calacanis 1:07:40 ... it's just such an obvious litmus test of logic.

Antonio Gracias 1:07:44 I mean, look man, the, the constitution is, is a, is a document about fairness. The people that founded this country, the patriots who founded this country, they, they did it 'cause they were treated unfairly at home. All of us here-

Jason Calacanis 1:07:54 Yeah.

Antonio Gracias 1:07:54 ... um, are one generation away, right? Or two generations away from immigration.

Jason Calacanis 1:07:58 Yeah.

Antonio Gracias 1:07:58 And the reality is that's why people come here, man. It's f- it's un-American. It's un-American we've been unfair.

David Friedberg 1:08:02 Zero degrees. We got two people here who are immigrants. (laughs)

Jason Calacanis 1:08:04 (laughs)

Antonio Gracias 1:08:04 Yes, yeah. I'm reading the TRO and it, it looks like this TRO means temporary restraining order and it, and it's actually narrows who from Doge-

Jason Calacanis 1:08:13 Yeah.

Antonio Gracias 1:08:13 ... can get read access down to two people.

Jason Calacanis 1:08:15 Two people, yeah.

Antonio Gracias 1:08:15 Tom Krause and Marco Elez.

Jason Calacanis 1:08:18 Oh, okay.

Antonio Gracias 1:08:19 Oh, yeah.

Jason Calacanis 1:08:19 So, they don't want to have the whole team be able to see what's at Treasury, they just have to have a process and some sign off? Okay. That sounds not unreasonable.

Antonio Gracias 1:08:30 I just want to point out, two people to, to look at no matter how good they are, I'm sure they work 24/7, look at all the payments in the US government, is not a lot.

Jason Calacanis 1:08:38 Yeah, it does seem like it needs to be more than two, but it doesn't seem like they're saying you can't look at it.

Antonio Gracias 1:08:43 No.

Jason Calacanis 1:08:43 They just want to have some controls in place.

Antonio Gracias 1:08:46 I mean, it feels to me that's an administrative block. That's, like, the narrowest thing you could do.

Jason Calacanis 1:08:50 Yeah.

Antonio Gracias 1:08:50 Two pe- uh, okay, yeah, you can come in but you can just send two people and just these two people. So, if they get sick or something happens, no one else comes in. That seems to me to be truly just an administrative block to slow it down.

Jason Calacanis 1:09:02 Yeah. Hm. Well, we're interpreting this in real time. The facts will come out over

Jason Calacanis 1:09:07 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?

David Friedberg 1:10:39 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.

Jason Calacanis 1:12:14 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-

David Friedberg 1:12:25 Yeah.

Jason Calacanis 1:12:25 ... 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?

Antonio Gracias 1:12:49 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.

Chamath Palihapitiya 1:14:12 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