All-In PodcastDOJ targets Nvidia, Meme stock comeback, Trump fundraiser in SF, Apple/OpenAI, Texas stock market
EVERY SPOKEN WORD
150 min read · 30,006 words- 0:00 – 2:10
Besties intros!
- JCJason Calacanis
All right, everybody. Welcome to the world's greatest podcast. With me again today-
- CPChamath Palihapitiya
The world's number one podcast.
- JCJason Calacanis
Yes, the world's number one podcast. We, we came in eighth last week I think, for those of you looking at the iTunes rankings, which is absurd. We've only got to beat Ben Shapira-
- CPChamath Palihapitiya
Number eight across all of Apple?
- JCJason Calacanis
Something like that. Yeah, whatever their top episodes are on the weekends.
- CPChamath Palihapitiya
Well, that means we crushed on Spotify, then.
- JCJason Calacanis
Probably, yeah, I would guess. Um, I don't, I don't know all the rankings, but ...
- CPChamath Palihapitiya
And, and I guess on YouTube, we got labeled with some COVID thingamajig.
- JCJason Calacanis
I mean (laughs) ...
- CPChamath Palihapitiya
What a joke.
- JCJason Calacanis
So what is going on at YouTube?
- CPChamath Palihapitiya
What a joke.
- JCJason Calacanis
Like, literally you're labeling COVID at this point. I mean-
- CPChamath Palihapitiya
What a joke.
- JCJason Calacanis
Oh my Lord. So, I guess we have to, at the top of the show, talk about the, uh, fundraiser, and I guess this, like, Vinod Khosla came in hot this week and attacked the Besties. Let's play the clip.
- DSDavid Sacks
What is your sense of the shifting winds in the Valley around politics? I think for a very long time, the Valley was seen as sort of a liberal bastion. Uh, but you know, if you listen to Elon Musk or you listen to, uh, All-In Podcast and, and, and that gang and others, it seems to be shifting potentially towards former President Trump. Is that just a small pocket or do you think that that's a, a real shift in terms of the way, uh, the Valley's thinking politically?
- VKVinod Khosla
The first thing I would say is All-In Podcast and, uh, some of the supporters there are not based in the Valley.
- JCJason Calacanis
(laughs)
- DSDavid Sacks
(laughs)
- VKVinod Khosla
I, I would say there's a bunch of MAGA extremists-
- DSDavid Sacks
(laughs)
- JCJason Calacanis
(laughs)
- VKVinod Khosla
... in every part of society. And, uh, I hope we can, uh, prevent them from destroying democracy, which is probably the most important issue we face.
- JCJason Calacanis
All right, Sanj, um, why are you destroying democracy? We know, uh ... (laughs)
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
(laughs) Now, that's a good bit, Jacob. That's good.
- NANarrator
I'm going all in.
Don't let your winner slide.
Rain Man, David Sacks. I'm going all in.
NSN.
- 2:10 – 17:58
Responding to recent media coverage
- NANarrator
in.
- JCJason Calacanis
All right, David. Uh, Vinod was at the conference. H- he got a little chippy here. Maybe he got a little bit out of line. He was a little bit out of line. What's your take?
- DSDavid Sacks
A little bit.
- JCJason Calacanis
A little bit.
- DSDavid Sacks
A little bit.
- JCJason Calacanis
A little bit.
- DSDavid Sacks
Well first of all, V- Vinod should realize we're not MAGA extremists or extremists of any sort because he was at our All-In Summit last year.
- JCJason Calacanis
He was great.
- DSDavid Sacks
Yeah, we liked what he had to say.
- JCJason Calacanis
Productive.
- DSDavid Sacks
And I certainly don't dispute his expertise and, and track record in tech. But in addition to that, then he's saying that we're not based in Silicon Valley, we're not from Silicon Valley, we've all been here for decades. And then he doubled down on that in a tweet. So that's-
- JCJason Calacanis
Weird. Yeah, weird.
- DSDavid Sacks
... uh, a bizarre statement. Maybe he thinks he gets to define people in or out of Silicon Valley. I don't really understand it. But to be frank, this is one of a series of statements that he's made recently that I can only call insulting and childish. First, he had this tweet that he said that Trump supporters were lacking in empathy and caring. Then he had another tweet where he said that Trump supporters weren't teaching good values to their kids. This caused Sean Maguire, who's a partner at Sequoia, to quote-tweet him saying that, "I think that I'd rather raise my kids to grow up to take after Ivanka Trump than Hunter Biden."
- JCJason Calacanis
Yeah.
- DSDavid Sacks
And that got, like, something like 20,000 likes, and it was one of those brutal ratios I've ever seen on a tweet. So, in any event, I mean, this is just one in a series of, of partisan tweets. And look, I think you can take whatever position you want on a political candidate. I can understand if he doesn't like Trump. A lot of people don't. He's raising money for Biden. That's fine. Doesn't bother me at all in life, but-
- JCJason Calacanis
Yeah, he just had a fundraiser, like, two weeks ago or something for Biden.
- DSDavid Sacks
Yeah, right, exactly. That's not an issue at all. But what I do take offense at is labeling millions and millions of ordinary Americans as somehow lacking in empathy, lacking in caring, not being good parents because you don't like their support for Trump.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
And I-
- JCJason Calacanis
I gotcha. Fair enough.
- DSDavid Sacks
... think that that is a statement that, frankly, reeks of being cocooned in an elite bubble for way too long. And let me just explain. If you look at where Trump's support is strongest, it's really in Middle America, in sort of the heartland of America of what-
- JCJason Calacanis
In between the elite states.
- DSDavid Sacks
Basically, the-
- JCJason Calacanis
Let's be honest.
- DSDavid Sacks
... the part of America that Khosla at least d- dismissively refer to as flyover country.
- JCJason Calacanis
Sure.
- DSDavid Sacks
And it's a lot of the industrial Midwest. And frankly, that part of the country has ha- not had the same type of economic experience that we've had in Silicon Valley.
- JCJason Calacanis
Of course.
- DSDavid Sacks
They have not been beneficiaries of globalization.
- JCJason Calacanis
Or equities, you know? And they're, they're in the working class, and the working class and the factories got gutted. Yeah. Let's just-
- 17:58 – 32:40
DOJ/FTC strike deal to target Nvidia, OpenAI, and Microsoft
- JCJason Calacanis
There's a lot of federal regulation going on around AI, as we know, uh, regulatory capture. Shout out to our guy, Bill Gurley, who did a great talk last year about this. On Wednesday, The New York Times reported that the DOJ and the FTC had struck a deal on how to go after AI incumbents. Here's the terms of the deal.And again, this is all breaking. The DOJ gets to investigate whether Nvidia violated antitrust laws. They didn't specify what they're going after here, but it could include the Nvidia use of CUDA software to lock customers into using their GPUs, or maybe how Nvidia distributes their GPUs to customers. There's a lot of regulation around that. And the FTC takes the lead on looking into OpenAI's conduct in Microsoft's AI deals. Obviously, there's been a ton of those, including acqui-hires, et cetera. And then just this morning, The Wall Street Journal reported that the FTC had opened a probe into Microsoft's deal with Inflection AI. That's the one, if you remember, where they bought the staff and then did some baka- ka-crazy commerce deal where they gave them a bunch of money, I guess, to bail out the investors. And that one is as conflicted, up and down, as you could possibly imagine. They note Microsoft structured that deal in a way that could avoid regulatory scrutiny. You heard that here first, actually. We, we talked about this concept of a shadow acqui-hire on this very program when we saw it, 'cause we'd never seen a deal like that. It in- includes that $650 million licensing fee. All right, there's tons of other angles here, but let's start with you, Chamath. What are your thoughts on this regulatory capture and Nvidia's ascension? For those of you not watching, it's almost become the largest market cap company in tech. Actually, today, Nvidia passed Apple for a moment in time. So, this is pretty crazy what we've seen with Nvidia. And here we go, regulatory capture coming in hot. Chamath, your thoughts?
- CPChamath Palihapitiya
I have two thoughts. They're sort of mixed emotions. The first is, I think the DOJ and the FTC are totally way out of their ski tips on this. This is a totally nascent industry. We don't have any good examples of end user use cases, either in the enterprise or amongst consumers. We only have 18 months of spend history. It is true that we've spent probably $750 billion to a trillion dollars collectively now-
- JCJason Calacanis
Yup.
- CPChamath Palihapitiya
... on things with the AI label, but it is also true that that's probably generated less than $10 billion in revenue. So, I don't see what they're exactly investigating in an extremely immature market where we haven't yet seen one cycle of boom and bust, so that we know what we're actually dealing with. So, it's way too premature and it's just people afraid and tilting at windmills.
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
The second part, the part that's mixed though is, we are seeing a clever form of deal-making that these huge hyperscalers are doing to work around the traditional constraints that you've had on businesses. Jason, you and I worked at AOL in a moment where AOL paid a very dear cost for essentially round tripping revenue.
- JCJason Calacanis
Yup.
- CPChamath Palihapitiya
Microsoft had to go through a huge DOJ inquiry and a settlement decree, and they were in the penalty box for most of Steve Ballmer's tenure as a CEO.
- JCJason Calacanis
A lost decade, yeah.
- CPChamath Palihapitiya
And the handcuffs came off when Satya took over that business. So, I think what I'm trying to say is, folks have become extremely sophisticated at replacing round tripping with these complicated TAC 2.0, whatever you want to call it, credit-oriented deals. They'll finance you to buy their own chips. All of this stuff has to be scrutinized a little bit more. So, that part I support. But all of a sudden, launching an antitrust investigation makes no sense. So, I really think the inquiry should be coming from the SEC about, is this real revenue?
- JCJason Calacanis
That's actually the key issue. And, and this goes to, Chamath, what we talked about, like, let's, if we're going to police something, tactics make sense, not-
- CPChamath Palihapitiya
Absolutely.
- JCJason Calacanis
... future competition, which has been Lina Khan's y- sort of approach to this, and she's only gonna be in the position for another couple months if the, uh, election goes the way it's going, so this might all be moot. Freeberg, I want to get your thoughts on this. We had that great talk, 2,851 miles, from, from Bill and regulatory capture at the summit. You can, uh, look for, it would be in the show notes, if you haven't seen it. It's a great talk. Freeberg, your thoughts on this?
- CPChamath Palihapitiya
I, I don't know what regulatory capture NVIDIA... Are, are you talking about regulatory capture of NVIDIA?
- JCJason Calacanis
Just regulatory capture in the framing of AI. Is it too early? Hey, we're like in the f- we're not even in the first ending here, and already we're gonna start investigating everybody, and it just seems premature.
- CPChamath Palihapitiya
Yeah, I mean, part-
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
One of the silly aspects is they just passed this law in California. Newsom warns against perils of-
- JCJason Calacanis
Perils?
- CPChamath Palihapitiya
... over-regulating AI.
- JCJason Calacanis
Oh, good.
- CPChamath Palihapitiya
Governor Newsom warned on Wednesday against stifling the burgeoning AI sector. I mean, Newsom is well informed by the tech community, so-
- JCJason Calacanis
Sure.
- CPChamath Palihapitiya
... I, I don't think he... And he's also an intelligent person, so I don't think he'd kind of, you know, fall quickly in line on this one. But the way that the statutes were written is there's a definition on the size of a model, which in and of itself is very quickly changing. As we know, we've seen recently significant reductions in model size that actually improve performance overall of the model for specific applications. And it's very likely we end up seeing a lot of more smaller, targeted models being used in specific applications instead of one massive general purpose model being used, or networks of smaller models, which is what really where I think the industry is going. And if that's where things go, then this, this statute doesn't even matter. It, it makes no sense anymore. And that shows you, I think, how quickly things are changing. They go and they get e- quote, "experts' opinions." In a couple of months, those experts come back. They're like, "Here's the size of a model that you need to be regulating." And then the legislators run and they write the, the code, they pass the statute, and all of a sudden it doesn't even make sense anymore. So yes, I don't think we really know where this technology is all falling out at this point. And I think it's very difficult to have the government kind of reach in too quickly to try and identify what they should and shouldn't be allowing to happen from a free market perspective.
- JCJason Calacanis
Your thoughts, David Sacks, especially in light of the fact that it's looking like we're, we're gonna have some regime change in Washington and the FTC is gonna, gonna, gonna turn over obviously, if that happens.
- DSDavid Sacks
Well, look, I agree with you guys that this is just too soon to be opening these investigations. It's true that OpenAI and NVIDIA have leads in their respective markets. But that's all it is at this point. It's way too early in the development of these markets to say that these are clearly monopolous. There's still a lot of competition going on. If a few years from now NVIDIA still has, whatever, 85, 90% market share and no one's even close to catching up, then maybe you consider it a monopolous. Same thing with OpenAI. But it just seems very early to be rushing into investigations of these companies. I mean, the AI market is what, 18 months old, two, two years old maybe at most?
- JCJason Calacanis
I'd say two is a good way to look at it, sure.
- DSDavid Sacks
Yeah. So it's just very early to be doing this. Look, I think this is of a piece with... Remember that executive order or whatever that... Remember when the White House issued that 100-page-plus executive order on AI regulation? We covered it on this show, and we also thought that was too soon. And we thought that if the internet had been regulated in that way in, you know, circa 1995 or 1997, it never would have blossomed the way that it did. You know, you want to give these markets some time to play out before you bring the, down the heavy hand of regulation on them. So it just seems to me like the administration is getting carried away here with this desire to regulate this new space. And I mean, frankly, it's of a piece with y- I, I would say an innovation-hostile agenda. You also have the attacks on crypto. You just had Biden veto a bill that would have finally given crypto a regulatory framework in the US. It passed with 60 votes in the Senate, including Democrats like Chuck Schumer, and it still wasn't good enough. And, oh, and it was based on a framework I think that came from the SEC.
- JCJason Calacanis
Mm-hmm, yeah.
- DSDavid Sacks
But Biden is basically in the Elizabeth Warren camp that he's going to give no quarter to crypto. So you've got hostility to AI. You've got hostility to crypto. You've got hostility to M&A. No one can get an M&A deal through right now. You put all these things together, plus you've got hostility to options as compensation in, in terms of the 25% unrealized gains tax. You add up all these things, and again, I think this is an agenda that does not benefit Silicon Valley at all.
- 32:40 – 58:36
Meme stocks are back: Keith Gill aka Roaring Kitty resurfaces, disclosing nine figure position in GameStop
- JCJason Calacanis
keep moving. Roaring Kitty, AKA Keith Gill, just disclosed a nine-figure position in GameStop. Yes, we're back to where this podcast (laughs) started. We're talking about GameStop and stonks-
- DSDavid Sacks
Incredible.
- JCJason Calacanis
... as crazy as it is. And E- E-Trade is considering suspending his account. This is gonna take a little bit of background. I apologize here, and I'm
- CPChamath Palihapitiya
Deplatforming him.
- JCJason Calacanis
... Chamath Belyea. They're deplatforming him. Here we go again. Quick background. You remember the first basically viral moment for this podcast, this AI moment, I remember I was in Tahoe skiing, was the GameStop saga back in 2021. Thousands of retail investors following this individual, Keith Gill, were posting in this, uh, subreddit called WallStreetBets, if you're not familiar, and they created a massive short squeeze, and they sent the stock flying. Robinhood halted the trading. Remember Vlad came on, that went, all went crazy. Uh, we covered that all. And then Keith Gill went silent for the past three years on Twitter and Reddit. He said nothing. Then on May 12th, he posted this meme on X, which has been viewed 28 million times. Now, if you don't know this meme, this is the lean forward meme when you've got a game controller in your hand. It is a way to signal like, "Hey, we're getting to the boss level. It's gonna get exciting." Here's your GameStop chart, folks. You see that first peak? That's when we reported on it back in 2021. And here we go again. It just had the slow ride down for three years, and bink, popped up again. So GameStock, stock tripled at the posting of that meme. Why is this important? Well, uh, (laughs) he has a huge position. He increased it from 200,000 shares basically to five million, had 120,000 call options. Chamath will comment on all this in a moment. If he exercised all these, uh, calls, Gill could own an additional 12 million shares. Here's Gary Gensler, who was on CNBC Wednesday, trying (laughs) to like calm the markets down and/or try to get control of this craziness. Here's the clip.
- NANarrator
I say to you, look, I wanna put up a, a, a, I wanna put up a cryptogram. And it's of a chair leaning up, which we know from video game playing means come on, this is the ninth inning, get ready. And we know that I'm a person who happens to like the stock of GameStop. This is the single. Come on, get ready. Is this something, hypothetically, that is, that the SEC should worry about?
- JCJay Clayton
Look, again, it's not so hypothetical because you're describing things that are in the public domain and, and the public is, is, uh, you know, interested in. So but generally speaking, you have to make sure that you don't mislead the public and that you don't in any way do things in the markets that may be manipulative or misleading. And so that's the key thing in our capital markets.
- NANarrator
No, the key thing is if you can cure it with disclosure. This is Brandeis. You know if they disclose it, this is something that they, a call to action, then you can't go after them.
- JCJay Clayton
The disclosure is one really key part of our capital markets. When you buy the stock of a company, you expect that they give you full and fair disclosure. That's, by the way, not what you're getting right now in this crypto field. So I just, you know, cautionary tale there, that disclosure. But disclosure doesn't necessarily protect a bad actor if they're manipulating a market.
- JCJason Calacanis
Chamath, you've been, you've had a lot of comments on the markets and, uh, specifically this one, uh, over the years. What are your thoughts? Is posting this meme stock manipulation or disclosure?
- CPChamath Palihapitiya
No, it's, he's posting a meme.
- JCJason Calacanis
Okay. (laughs) Thank you.
- CPChamath Palihapitiya
He put a picture on the internet.
- JCJason Calacanis
Okay.
- CPChamath Palihapitiya
I mean, the, again, th- this is like the problem that we have, which is that...He disclosed his position in a different way. Now we don't know whether that disclosure is accurate because I think it was just a screenshot of like some statement inside of a Reddit thread, right? And then that got posted many times elsewhere. Is this accurate? I don't know because he has no obligation as an individual to do any of this stuff because he's not running a hedge fund and he's not running other peoples' money. Now, if he was acting in concert with other people, you could say, "Hey, hold on a second. If you're repping not just your money but other peoples' money and you did this, then there's probably a disclosure obligation there." But at the end of the day, this is a guy that acted and basically created hype. And right now, the SEC does not have a framework to deal with that because the rules that exist, they didn't understand social media and whatnot. And he's also not a regulated entity. He's just an individual. Now if it turns out that he was selling while he was posting this stuff and trying to manipulate the market in some way, obviously they could find issue with that. But just for him being a credible influencer and creating momentum for an underlying position, that in and of itself is not illegal.
- JCJason Calacanis
Sacks, I think we have to go to Judge Sacks here. Judge Sacks, what is your verdict?
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Our meme stock manipulation, Judge Sacks.
- DSDavid Sacks
No, I don't see any manipulation there. Like Jamale studies is posting a meme. What you saw in that-
- JCJason Calacanis
Not guilty.
- DSDavid Sacks
Not guilty. What I see in that clip is Jim Cramer trying to stir up an SEC investigation of Keith Gill.
- JCJason Calacanis
Hm.
- DSDavid Sacks
For what? I mean, what exactly has he done here? This is kind of...
- CPChamath Palihapitiya
The Wall Street Journal as well, if you look at the Wall Street Journal today, there's an entire article basically with the headline "Is what Keith Gill is doing illegal?" And I think you can view this in a different lens which is, here is a, an individual that is totally outside of the establishment that, however he's done it, has gotten a hold of hundreds of millions of dollars.
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
Maybe even now billions if the stock keeps going. And I think that that, for the establishment that controls those pipes, very disconcerting.
- DSDavid Sacks
Right. If he wa- if he was one of those apex predators on Wall Street, if he was one of those major hedge funds that donates a lot of money to the political elite, in other words, if he was a well-connected political player, I doubt anyone would be asking these questions.
- JCJason Calacanis
Freyberg, you got thoughts on this? Market manipulation or meme, stonk, fun, good times? You're buying GameStop, you're buying (laughs) AMC, like, y- buyer beware, you're, you're, you're in on the joke. What are your thoughts?
- DFDavid Friedberg
Nick, can you pull up the image? I'm gonna talk about the stupidity of buying the stock in this company-
- JCJason Calacanis
(laughs)
- 58:36 – 1:02:34
Citadel and BlackRock back TXSE to take on NYSE and Nasdaq
- JCJason Calacanis
ownership here. Well, here's an interesting thing that's sort of related. A little bit of jurisdiction shopping or placing of companies and products continues, and Texas is very hot in this regard. BlackRock and Citadel are backing new stock- a new stock exchange to take on the New York Stock Exchange and the NASDAQ duopoly. So according to the Wall Street Journal, the exchange would be based in Texas and called the Texas Stock Exchange or the TXSE. They've raised $120 million so far. That seems like a low number. And the general pitch here is the New York Stock Exchange and NASDAQ have become expensive and they've been increasing their compliance costs. NASDAQ has a new board diversity target that went into effect at the start of this year, all the DEI stuff, and so this exchange is pitching itself as a CEO friendly and the anti-woke exchange. So here's the planned timeline: file an SEC registration docs later this year, start facilitating trades next year, host the first new listing in 2026. Interesting, I guess that Citadel and BlackRock are in this group because they could bring a lot of business, obviously. And you know some of this other stuff that's been going on with Texas. Texas is now Tesla's corporate headquarters. They moved it from Palo Alto in California to Texas in, in 2021. Your thoughts here, Chamath, on moving-
- CPChamath Palihapitiya
Love it.
- JCJason Calacanis
... uh, this?
- CPChamath Palihapitiya
I absolutely love it.
- JCJason Calacanis
You love it. Okay, why? Why do you love it so much, Chamath? Tell me. Competition?
- CPChamath Palihapitiya
I do think that it's hard right now for companies to get access to capital. I think more diverse and more flexible ways where smart investors can allocate their money into the ideas that they want are better. I think that the duopoly hasn't created enough competition, so the NASDAQ and, and New York Stock Exchange haven't innovated, and in fact, they've- they've probably been a little regressive in terms of filing requirements, listing requirements, in terms of board composition. They've fallen for a bunch of things that don't actually point to the economic rationale or value in a company. And so I think if you have a third player, there's a chance that more competition will create more rational behavior, which will flow into the companies themselves. So I'm a huge fan of this. I, I think that the, the stock exchanges right now are too brittle, because ... And there's- and that large reason is because there's only two of them.
- JCJason Calacanis
Freeberg, any thoughts from you about more options for-
- CPChamath Palihapitiya
Well, I think part of this is actually-
- JCJason Calacanis
... listing companies?
- CPChamath Palihapitiya
... there's been these rules imposed by NASDAQ and New York Stock Exchange that have tried to enforce upon the listed companies rules and regulations that are not tied to securities.
- DFDavid Friedberg
... laws, including some of these aspects of diversity of your board. And I know that there have been a lot of public company board members and CEOs that have quietly tried to push back on these rules, that they're imposing social systems upon, you know, what is effectively a regulated exchange. And so there's certainly, like, an interest and a pushing for a, a competitive marketplace for exchanges. There was a survey done recently that showed, I gotta find some of this data, but it showed the cost of going public on NASDAQ, AMX or the New York Stock Exchange was about $7.4 million. Cost of going public through an over-the-counter bulletin board lifting service was about $2 million. And then there's these additional kind of rules that are being imposed if you wanna be listed on the big boards. So clearly there's interest and it's great to see a competitive market emerge. You know? How, uh, how, there have, by the way, there have been other attempts. There's that long-term stock exchange. You guys remember that, a couple years ago-
- JCJason Calacanis
Yeah. That was, um-
- DFDavid Friedberg
... that was meant to kind of-
- JCJason Calacanis
Very
- DSDavid Sacks
There it was.
- DFDavid Friedberg
... incentivize long-term holdings. There was two other equity security exchanges, efforts made in the last couple years that didn't take off. So this isn't super novel in terms of, like, seeing a new challenger exchange step up, but I think more competition's always better.
- 1:02:34 – 1:09:07
Apple to announce OpenAI iPhone deal at WWDC
- DFDavid Friedberg
- JCJason Calacanis
All right. In other news, Apple and OpenAI have reportedly struck an iPhone deal. According to Bloomberg, Apple is going to announce a major partnership with OpenAI at WWDC next week. ChatGPT will be integrated into iOS, which means Apple is outsourcing its AI chatbot, at least at the start. Uh, I guess you could argue it benefits both sides because OpenAI gets access to over a billion phone users, and Apple gets a native integration of a top-tier language model. Terms are not clear, but most people think this is gonna be a short to mid-term deal with Apple building out its own AI chatbot in the future, but it's just not ready for prime time right now. Also plans to make Siri AI powered and bring AI features to the Apple ecosystem. You may have heard that Apple is gonna try to let Siri dive deeper into apps, i.e. if you're ordering your DoorDash or Uber Eats or an Uber or a Lyft or whatever, it might actually be able to execute those things inside of an app. Interesting line from the article, Apple executives were concerned about reputational damage from a rogue chatbot. Some people within Apple have a philosophical aversion to having a chatbot at all. Very interesting. So thoughts on this, Sacks? Just getting you back in the loop here.
- DSDavid Sacks
Well, we kind of predicted that something like this could or should happen. We said that the big win for Apple and AI would be to make Siri actually work based on LLM, because Siri just, you know, its understanding of language has, uh, historically has not been great, and that's really limited the usefulness of it. Imagine if Siri worked with the conversational abilities of ChatGPT-4.0. If it had that level of semantic understanding, if it could talk to you the way that 4.0 can talk to you, that would make Siri really powerful. And, you know, for me, Siri's just a feature I've turned off because it's so annoying, but...
- JCJason Calacanis
Ugh, it sucks, right? Never works.
- DSDavid Sacks
If you give it the power of the best OpenAI model and then the speed of running it natively on the iPhone, I don't know what they're gonna do about that, but presumably there are things they can do to speed it up. And then you give it access to the internal APIs you're using to control apps.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
That can be really powerful.
- JCJason Calacanis
Huge winner, huge winner.
- DSDavid Sacks
Because now Siri could be an agent that you can just tell it to do things and, you know, not just ask, like, the weather and the time and set alarms.
- JCJason Calacanis
Well, what's really interesting, I think, about this deal, Chamath, is Apple is having a hard time getting people to upgrade their phones, right? And people have lost faith in the stock. Now you say, "Hey, we're gonna put a language model on here." You can make it a local language model and have it be privacy protected, so that means you need more memory on the phone, you're gonna need another chip on the phone. It's gonna... There's a distinct reason to upgrade now. If you had a language model on your phone and Siri was like this Super Siri that actually got stuff done, I would upgrade my phone immediately. And right now I skipped two or three generations. What are your thoughts on this as a way to maybe reinvigorate the iPhone franchise, Chamath? You buy it or not?
- CPChamath Palihapitiya
No. The problem is that we don't know what the right form factor for a super scaled consumer AI app looks like. So we've all, all... Again, I, I mean, I'm not trying to be a wet blanket. It's just that when you look at what's built, built so far, I think most of the things we've seen are the Friendster and Myspaces of this class of app. We haven't seen the Facebooks and the Instagrams yet, and the reason is because we haven't experimented and pushed the boundaries of the form factor. So for example, in the first phases of social networking, the idea that you would collect information about all your friends and then create something called a newsfeed was totally shocking.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
And I remember when we first released it, people got really upset, and then it just became this de facto...
- JCJason Calacanis
Why were they upset about it? Tell me.
- CPChamath Palihapitiya
Well, it's this idea that you collected this information and then you presented it about all of your friends was disconcerting initially-
- JCJason Calacanis
Got it.
- CPChamath Palihapitiya
... as a feature. Now, if you don't have a newsfeed of some kind in your app, for many apps, it's DOA, right? So the same problem exists today. All we've done today is we've replicated an existing use case with a slightly better feature here or there. Nobody has gone out and said, "On a blank canvas, let me completely reimagine how consumers want value with these things to enable it." And until that happens, we're just wasting time. So the idea that Apple, with this $1,000 device, is all of a sudden going to figure out that this is why you're gonna upgrade, I think is pretty speculative and I think they're going to be disappointed. I think people have realized that four generations ago was more than enough.
- JCJason Calacanis
Mm.
- CPChamath Palihapitiya
And on top of this, the stuff that you value inside the iPhone is not what you're going to need for AI.So, you know-
- JCJason Calacanis
Actually-
- CPChamath Palihapitiya
... spending a trillion billion dollars on the fourth camera lens is not going to be what solves this problem. And so, you're more likely to have a very simple earbud that is, you know, very inconspicuous and discreetly in your inner ear well, speaking information to you, than you are... and with a companion $500 phone, than I think you will be with a $1,500 iPhone.
- JCJason Calacanis
Uh, you're, you're in the new form factor. I, I'm gonna take the other side of the camp. I think that because you have this data on your phone, all your iMessages, all your documents, all your photos, videos, music collection, there's a unique set of data on that phone to make your personal LLM that's gonna do extraordinary things for you because it's gonna watch you and all your behavior on that phone. And man, if I could have a personal LLM that's been watching me order very specific sushi rolls or, you know, where I send my Ubers, what type of Ubers I like, wh- what music I play, I feel like that LLM personalized to me-
- CPChamath Palihapitiya
You don't need a fif- My point is you don't need a $1,500 device to do that. So if you spend $1,500-
- JCJason Calacanis
I know, but it's... I'm talking about the dataset. So cool. Don't you agree the dataset is so cool?
- CPChamath Palihapitiya
But the dataset is not theirs. Uber has the data, DoorDash has the data.
- JCJason Calacanis
No.
- CPChamath Palihapitiya
Apple has nothing.
- JCJason Calacanis
No, you're missing my point. The data of me clicking on the screen, that pattern-
- CPChamath Palihapitiya
That is not Apple's to collect. It's not... They're not allowed.
- JCJason Calacanis
Oh, I think it is. I think they'll collect it, put it in there and encrypt it.
- 1:09:07 – 1:13:23
Science Corner: Alarming ocean temps continue, what to expect for hurricane season
- JCJason Calacanis
It's time for science corner. Temperatures in the Atlantic Ocean are alarmingly high. Freeberg, a couple of weeks ago, we saw this, uh, crazy chart on the X about the Atlantic Ocean temperatures pre-hurricane Katrina, right about now. And, uh, take us through this because it's very disconcerting.
- DFDavid Friedberg
There's not much to talk about except to highlight this image which shows-
- JCJason Calacanis
Okay.
- DFDavid Friedberg
... um, again, we talked about this a few months ago, hot ocean temperatures drive hurricane and tropical storm activity because as the wind, the air above the ocean starts to move, the energy from the ocean gets pulled out. You know, like things cool down? The water cools down. But that energy actually goes back into pushing the wind to move faster and faster and that's how tropical storms, cyclones, and hurricanes are formed is warm ocean temperatures. And there's been this kind of persistent warming since last year in the Atlantic in this particular region where all the hurricanes form. And normally the hurricane season starts kind of, call it, August to October. Right now, we are seeing temperatures that are so far beyond what we've seen any time historically. This image that you're looking at here actually compares the ocean temperatures right now in the Atlantic to where we were at the same time period in 2005, which was a record hurricane year obviously with Hurricane Katrina.
- JCJason Calacanis
It's crazy.
- DFDavid Friedberg
Right?
- JCJason Calacanis
Yeah.
- DFDavid Friedberg
And so the National Hurricane Center, a lot of the climatologists are forecasting that over the next couple of months, we could see and should expect to see probabilistically much larger, stronger, bigger, more frequent hurricanes than we've ever seen historically. So we'll see if it plays out. Just a very small tidbit of news to share. Thought it'd be worth highlighting. Not getting a lot of mainme- mainstream media press attention but, you know, certainly-
- JCJason Calacanis
Let me ask you to just confirm a couple things for me because we live in a time where people are questioning science and scientists and we, we have institutions we don't trust, whether it's three-letter agencies in Washington or scientists and all these papers being written and everything we're finding out and nobody trusts anybody and, and we're sort of resetting trust. I wanna just ask you as somebody I trust as a scientist, number one, global warming, temperatures increasing. Putting aside, you know, what we do about it, temperatures in the ocean, it is undeniable, are increasing at a rate that you would describe as concerning. Am I correct?
- DFDavid Friedberg
We have not seen in the modern era temperatures in the ocean like we're seeing now. That's a fact.
- JCJason Calacanis
Okay. Great.
- DFDavid Friedberg
Right? So I'm not, I'm not gonna do this whole big prognosis on everything all in one because I think that's where people feel like there's room for miscrediting things.
- JCJason Calacanis
Yeah, that's why I'm trying to, I'm trying to atomize this.
- DFDavid Friedberg
So, so we can be... Yeah, we can be very specific about things. Here's an example.
- JCJason Calacanis
Yes.
- DFDavid Friedberg
So this is the sea surface temperature going back to 1981.
- JCJason Calacanis
Okay.
- DFDavid Friedberg
And as you can see at this point in the year, and, you know, the temperature oscillates because of the way the s- the earth tilts towards the sun. Um, and so at this point in the year, we are seeing right now sea surface temperatures that are beyond anything we've seen historically and it is continuing to climb. So if this does not taper off or level off, we will see record sea surface temperatures in the August to October timeframe, which will almost certainly push massive hurricane events out of the Atlantic and they will find their way towards the continental US and Mexico.
- JCJason Calacanis
Okay. So this is super clarifying. This should not be controversial to anybody. We have temperature readings in the ocean and d- this is concerning.
- DFDavid Friedberg
Just data. Simply data. It's just data, right?
- JCJason Calacanis
It's simply data, right.
- DFDavid Friedberg
Yeah.
- JCJason Calacanis
So, you know, putting aside what political party you're on and, and what you think about gas and oil and-
- DFDavid Friedberg
I will tell you-
- JCJason Calacanis
... this push to solar.
- DFDavid Friedberg
... there's a lot of theory. One, one of the theories-
- JCJason Calacanis
Yeah, please.
- DFDavid Friedberg
So there's theories about El Nino, there's theories about climate change contributing to this. There's also a theory about sulfur dioxide that has now been banned in shipping and cargo vessels that-
- JCJason Calacanis
Okay.
- DFDavid Friedberg
... go across the oceans. Last year, they banned sulfur dioxide use in the, the fuel that's, that's coming out of these. And sulfur dioxide actually reflects sunlight. So as it goes up into the air, into the atmosphere coming out of these ships, it actually blocks and reflects light.
Episode duration: 1:25:25
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