All-In PodcastE109: 2022 Bestie Awards Live from Twitter HQ
EVERY SPOKEN WORD
150 min read · 30,124 words- 0:00 – 3:05
Bestie catch up!
- JCJason Calacanis
Hey, everybody. Merry Christmas. Happy holidays. It is the end of 2022 and once again, we're doing our Bestie Awards. Yes, at the end of the year, we do our Bestie Awards. This is where we give awards to the biggest winners, losers, and many other categories that you love. With me again, of course, the Sultan of Science, deep in his Kurosawa, uh, vibes. How are you doing, Sultan?
- DFDavid Friedberg
It was great to see you guys for dinner last night. Sacks, we missed you. That was a lot of fun. We all got together twice this week for dinner, uh, while we were on vacation.
- JCJason Calacanis
Mm-hmm.
- DFDavid Friedberg
And, uh, during our dinner, we took a vote, and Sacks, you are now the director of the All-In Summit. Congratulations.
- JCJason Calacanis
Yes, congratulations. Yes, the grift is on.
- DSDavid Sacks
Good. My first act is to veto it. (laughs)
- DFDavid Friedberg
(laughs)
- JCJason Calacanis
Okay. There you go. Sorry to the fans. Also with us, of course, is-
- DFDavid Friedberg
(laughs) .
- JCJason Calacanis
... the dictator himself, Chamath Palihapitiya, deep in his turtleneck phase and his vibes. Tell us about, uh, your winter vibes, Bestie.
- CPChamath Palihapitiya
I mean, I can't believe that we all took over Lake Tahoe for a week together. It's cool. It's been a lot of fun. I gotta say, Sacks, you'll be surprised. J-Cal has the life hack of life hacks here. He's figured out how to basically get everything pre-wired. All the restaurants, all the reservations. It's been great. I've loved it.
- JCJason Calacanis
We've had a wonderful time.
- DFDavid Friedberg
He books an eight-person table for every night, and he does it, what, months in advance? So every night you got an option.
- JCJason Calacanis
About two weeks out, every-
- DFDavid Friedberg
Yeah.
- JCJason Calacanis
... two weeks out, I, I get a table of eight, uh, for five, six nights in a row, and, and then I invite my besties out.
- CPChamath Palihapitiya
And oddly, it turned out there was only (laughs) one person from J-Cal's side, just himself. (laughs)
- JCJason Calacanis
Yes, just himself.
- CPChamath Palihapitiya
So there was always a room for the rest of us to show up. (laughs)
- JCJason Calacanis
We had a wonderful time. Uh, I picked up the check for the nachos and Chamath brought $6,000 worth of wine.
- CPChamath Palihapitiya
(laughs) I brought my own also to the restaurant yesterday so we could open the wine properly.
- JCJason Calacanis
It was wonderful. We've had a wonderful time. And of course, with us, looks like he had to work over the Christmas break, uh, Sacks, how are you doing, brother? You working today?
- DSDavid Sacks
I'm good. I'm just hanging out somewhere.
- JCJason Calacanis
Wow, come on. You can be honest. You're at the Twitter HQ. I recognize that incredible architecture and design. They spent so much money on that office space.
- DSDavid Sacks
Beautiful office.
- JCJason Calacanis
That's definitely beautiful office.
- DSDavid Sacks
They've got their own bespoke coffee shop here called The Perch.
- DFDavid Friedberg
We're the people that work there.
- CPChamath Palihapitiya
(laughs)
- DFDavid Friedberg
(laughs)
- 3:05 – 4:12
Kicking off the 2022 Bestie Awards
- DSDavid Sacks
- JCJason Calacanis
Yes, cue the music. Da da da da da da da. Right there. Okay, here we go. 2022 predictions. This is what we predicted for the Bestie Award for biggest political winner. I said Ron DeSantis and so did David Sachs. We predicted in 2022.
- DSDavid Sacks
You said it after me. You said it after me. And the way you introduced it, you said, "What did Tucker Carlson's writers come up with?" I said DeSantis and then you said DeSantis.
- JCJason Calacanis
A- are you starting already?
- DSDavid Sacks
(laughs)
- JCJason Calacanis
We're literally, I'm trying to give you your flowers. And already we're-
- DSDavid Sacks
I reviewed the tape.
- JCJason Calacanis
... fighting like brothers.
- DSDavid Sacks
I reviewed the tape.
- JCJason Calacanis
Okay, take it easy. You're gonna get your flowers. So Ron DeSantis, obviously a big winner. Uh, so those were, those were great predictions. Friedberg, with a wild card there, he predicted Putin would be a winner in 2022. That one fell a little flat, did it not? Our, our friend Friedberg, not a winner.
- DFDavid Friedberg
No, I think he, you know, I mean, my projection was really built on what I thought would be a big kind of influence that he would gain this year. You know, whether he's viewed negatively or positively, he's certainly at the center of the stage right now.
- JCJason Calacanis
Now, Chamath, your '22 prediction, this is your prediction last year for this year, was that the biggest political winner would be Xi Jinping. Okay?
- 4:12 – 9:11
Biggest winner in politics
- JCJason Calacanis
Now we go to our actual biggest winner. This is where we tell you who we thought was the biggest winner of 2022. Let's start with you, Sacks. Who is your biggest winner for 2022? Political biggest winner.
- DSDavid Sacks
This was the prediction that I nailed, as, as you mentioned it. So the red wave fizzled everywhere else, but it crashed over Florida hard. So DeSantis is my pick. He won re-election by about 20 points, and his coattails carried four new GOP House seats, which happens to be the exact size of the GOP majority. Uh, several polls have now shown him beating Donald Trump by significant margins for the 2024 GOP nomination. He is shattering fundraising records. Florida is now the fastest growing state. So he is my pick for the biggest winner, uh, political winner of 2022.
- JCJason Calacanis
Great. Who is your biggest political winner? Chamath.
- CPChamath Palihapitiya
I mean, it was obvious. It's, uh, Xi Jinping. You know, there is no single person in the world that is now as powerful as this one man. He, um, has complete authoritarian control over 1.2 odd billion people and 20% of the world's GDP and a large amount of the world's debt, including a lot of US dollar debt. And so, you know, it's pretty, there's, there's ... It's hard to find anybody that won nearly as much as he did.
- JCJason Calacanis
Okay. Now to you, Friedberg, who is your biggest political winner of 2022?
- DFDavid Friedberg
I mean, I think your DeSantis and Xi Jinping calls were really, like, good. I think the biggest surprising inter- winner for me is like, you know, unexpected.
- JCJason Calacanis
Mm-hmm.
- DFDavid Friedberg
And that would be Zelenskyy, um, from the Ukraine. I don't think going into this year...People paid as much attention to him. He was certainly not a, a sung hero, but coming, uh, through this conflict and I think leading the storyline a- about our common enemy of the West, um, and common enemy of democracy, being Vladimir Putin, uh, really kind of made him a, a superstar and a hero on a global stage. And, and I think that's evidenced by the fact that he was in the White House and he gave an address to the US Congress yesterday. So I, I would make him kind of the biggest winner of the year.
- JCJason Calacanis
It's hard to go against DeSantis. So, um, you know, he, he clearly, uh, has, as Sax correctly pointed out, gone into the lead. We'll see if he can beat Trump in the primaries. I have my doubts, but, um, he does seem to be pulling in some of those moderates, right?
- CPChamath Palihapitiya
I don't understand why you guys say he's a political winner. What did he win? He hasn't won the nomination yet. He got reelected to a state that he had before 2022. So what did he win exactly?
- DSDavid Sacks
Well, I think a couple of things. One is when he won, uh, election to the governorship four years ago, it was by less than 1%. It was a tiny margin of victory. This was margin of almost 20%. He had coattails and he is now the front runner for the GOP nomination in '24. I think you can argue, you can make the case that maybe he's peaking too soon.
- CPChamath Palihapitiya
Well, I'm glad you brought that up because if you look at the data, you know, I think in the last seven or eight nomination cycles, the person that's been leading the popularity contest going into the IL caucuses has not won the nomination. He's peaking too soon almost.
- DSDavid Sacks
That's a possibility. Uh, because when you're the front runner, everyone takes shots at you. On the other hand, he, if he stays this dominant, he will drive out other contenders out of the primary and he may be able to solidify it. And if, if it can just be DeSantis versus Trump in the primary, he has, stands a much better shot than if it's Trump versus a bunch of other challengers. And I think that if he continues to pull this well within the Republican Party, I think Trump might not run again because Trump definitely does not wanna risk being a loser in the Republican primary. So yeah, there's always front runner risks, but it's hard to say that coming out of this year that he wasn't a huge political winner.
- JCJason Calacanis
Okay.
- DSDavid Sacks
If we're gonna challenge other people's picks, I would maybe challenge Zelensky. There's no question that he's been a, a global media hero, but two thirds of Kyiv is currently without power. 80% of Kyiv doesn't have water. 30% of the Ukrainian power stations have been destroyed. Nearly half of the country is without power. Uh, there's something like eight million displaced Ukrainians in the country, and over 100,000 Ukrainians have been killed in this war. So yes, he's been a very strong charismatic war leader for them, but-
- JCJason Calacanis
Friedberg, your response?
- DFDavid Friedberg
I'm not advocating for his performance as a leader. I, I'm advocating for his accumulation of political goodwill, and that's it.
- JCJason Calacanis
Okay. Uh, and he is winning the war. Uh, so I guess a pretty good average then.
- DSDavid Sacks
I don't know if that's good. Is that, is that winning?
- DFDavid Friedberg
Wow.
- JCJason Calacanis
Well, in, in war they say there nobody wins. Uh, but it's certainly better than having your country taken over by Putin. So some would argue
- 9:11 – 16:37
Biggest loser in politics
- JCJason Calacanis
that's winning. Let's go to biggest losers. Biggest losers, uh, in 2022. We predicted, again, this is our predictions from last year, and then we'll go on to our actuals for this year. Uh, last year we predicted, uh, Chamath said the progressive left. Sax said Nancy Pelosi. Friedberg, you said US influence globally. Interesting. And I said the extremes, both Biden and Trump. Let's go, uh, with our predictions. I'm sorry, with our actuals for this year. Chamath, why don't you go first this time? Who is your biggest political loser for 2022?
- CPChamath Palihapitiya
I mean, I don't think it's as written about as much, but the progressive left did see as much failure as the MAGA right. So they were a huge loser. I mean, to the extent that anybody thought that leftist, you know, quasi socialist policies and politics was a winning strategy, I think that was pretty soundly refuted. Even in places that were pretty staunchly democrat, it was really difficult for the progressive left to do much of anything but lose. So I think that was a really powerful and important repudiation. And I think it, it's marginalizes them to a bunch of, you know, kooks almost. And I think that that's really healthy for politics going forward.
- JCJason Calacanis
So your prediction and your actual are gonna be the same, the progressive left.
- CPChamath Palihapitiya
Yeah, I think, I think, I think they were the biggest political loser in the United States, at least.
- JCJason Calacanis
Okay. Yeah. Elizabeth Warren. We don't hear people talking about Elizabeth Warren or Bernie Sanders much this year.
- CPChamath Palihapitiya
Yeah. And I, and I think that the biggest political loser outside of the United States was probably the European Union.
- JCJason Calacanis
Okay. You wanna expand on that a little bit?
- CPChamath Palihapitiya
If you just think about the corner that they painted themselves into, how much they had to basically literally-
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
... go 180 degrees away from what their policies were. You know, there was a huge raft of whether it was green, ESG, kind of woke liberal politics that manifested itself in all kinds of national security decisions and energy decisions that in this last year they literally had to undo in order to stay alive. And, um, that makes that whole political construct, I think, very fragile. So they were, they were a pretty big political loser outside of the United States.
- JCJason Calacanis
Okay. Sax, it's gonna be hard here to guess this one, but Sax, who is your biggest political loser in 2022? I have no idea who you're gonna pick here.
- DSDavid Sacks
By the way, I got Pelosi right last year that she did lose the gavel. So you've gotta say that the war in Ukraine was the biggest event of the year, and obviously you can spread the blame around to a lot of people starting with Putin 'cause he's the one who ordered the invasion. But I would say this is a slightly different take on the category, which is biggest political blunder occurred on January 27th of this year when Blinken said that NATO's door is open and must remain open, and that is our commitment. He basically shut the door.
- JCJason Calacanis
Hmm.
- DSDavid Sacks
He kept NATO's door open, but shut the door on any means of a diplomatic off-ramp to end this conflict by promising Russia that Ukraine would not become part of NATO.That was the single biggest diplomatic blunder of this year, or maybe the last couple of decades, because there's a good chance we could have avoided this disastrous war if we had just been willing to close NATO's door.
- JCJason Calacanis
Wonderful. Great, crisp answer. Thank you for that. Nice and tight. Friedberg, who's your biggest political loser for 2022?
- DFDavid Friedberg
It was a tie for me between Jerome Powell and Liz Truss. Liz Truss just has to get recognition here for only being in office for 45 days as Prime Minister of the United Kingdom. I mean, I think that is... uh, cannot be overlooked. Uh, the, uh, uh... the, some of the, the policy and, and folks that she put in, uh, in office, uh, caused, you know, massive chaos. It was just a, a, a clear, uh, dysfunction over a very short period of time. Uh, Jerome Powell, I think this was a big surprise this year to see how the Fed chair became, um, so politicized, uh, and- and his role became so politicized. Both kind of the- the left and the right finding reasons to question, uh, his leadership, um, and his decision-making. The failure to raise rates soon enough led to massive inflation is what you'll hear from one contingent of politicians and the, the public at large. And then the rate at which he's raising rates now to catch up to the... and to, to calm inflation is causing people to complain on the other side. So there is really no one that seems to be happy with Jerome Powell, and I think that, uh, that that was a-
- JCJason Calacanis
Hmm.
- DFDavid Friedberg
... a shooting star that seems to have completely lost its luster.
- JCJason Calacanis
Okay, so the Fed. Yes, good pull there. Okay, mine is pretty clear and objectively it is, of course, the GOP. The red wave failed, it turned into a trickle, uh, Trump is back and I believe there's a good chance he will win the primary. Roe v. Wade, a complete unmitigated disaster for Republicans. They caught the car and plus marriage equality and having to deal with that women and the LGBT community vote and they have long memories. The GOP, the biggest political losers for me. Okay, I'm sure Sax has no rebuttal there, so we will move on to the next category, uh, which is... (laughs)
- CPChamath Palihapitiya
Oh, by the way, if you say it that way then, you know, the biggest political loser in 2022 were women. Like, uh, like fundamental-
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
... human rights were stripped away from 50%-
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
... of the population.
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
So that's not cool. (laughs)
- JCJason Calacanis
And they could have left it alone.
- CPChamath Palihapitiya
And they could have left it alone.
- DSDavid Sacks
Well, if- if what you mean is that the issue was sent to the states and each state then gets to decide, then you're right. But e- but if you look at the battles that have happened at the states, even red states like Kentucky and Kansas have rejected the- the subsequent political push to outlaw abortion. So it has not turned out to be.
- CPChamath Palihapitiya
Just by the fact that all of these red states basically reconfirmed and enshrined a woman's right to choose may actually go more to show that the Supreme Court is totally outta touch and that they didn't need to touch Roe v. Wade. And the fact that they did opened up, you know, a huge can of worms in 50 states that now go and h- need to go and adjudicate this thing where it looked like, actually, that decision, even back in the day, even though the way that it was done, you know, there was a lot of room for improvement clearly, everybody agrees with that, but was actually after, you know, 50-plus years reasonable law. And so now that you took that law away, now folks even in the red states are like, "No, it was fine." Which means that this whole thing was a huge political gambit more than it was actual societal intention.
- 16:37 – 23:35
Biggest political surprise
- JCJason Calacanis
here we go, our 2022 biggest political surprise. Sax, let's start with you. You have a lot to say about politics. Go.
- DSDavid Sacks
Well, the biggest political surprise to me was no red wave. So, uh, I admit I got this prediction wrong. You know, I got all my previous ones right, J Calles. I'm gonna admit I got this one wrong. Uh, you know, I believe that the electorate would focus on the fundamentals. Three quarters of the country thought we're on the wrong track. Three quarters think we're in a recession. Nevertheless, the Republicans did not do nearly as well as predicted. They only gained nine seats in the House. They actually lost a seat in the Senate. And I think that that had something to do with candidate quality and, of course, the whole election denial narrative, uh, basically was a disaster for them. I hope that the Republicans move on and stop talking about the past. What voters want to hear about is the future.
- JCJason Calacanis
Friedberg, did you have a biggest political surprise for 2022? Friedberg?
- DFDavid Friedberg
Yeah, it's also the failure of the red wave. I mean, that was my, my pick.
- JCJason Calacanis
Okay.
- DFDavid Friedberg
I think the consensus going into the election was with, uh, you know, rising inflation and the disdain that everyone had for the way politicians kind of managed us through COVID and then managed us through the economic recovery, it's, uh... it was inevitable to see a flip and it didn't happen. I think obviously we, we talked about why that is, but that was a big surprise for everyone.
- JCJason Calacanis
Chamath, what was your biggest political surprise of 2022? Chamath Palihapitiya?
- CPChamath Palihapitiya
The absolute toothlessness of MAGA and Donald Trump. I mean, he was-
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
... just a scarlet letter. If you were anywhere near this guy, you were gonna lose. And that's surprising considering...... how traditional Republicans were pandering to him up until, frankly, just a few months ago. So, I think that we exposed the emperor of, as having no clothes and that he marginalizes and sidelines candidates, uh, into a fringe following that cannot go mainstream. That was, uh, it was really surprising to see how stark that was this year.
- JCJason Calacanis
Fantastic. I'm gonna build on yours, Chamath. Uh, I had two here. Number two was Roe v. Wade, but we've beaten that, uh, I think, and we dischi- discussed it as much as we possibly could. My number one, building on yours, Chamath, is that despite what's happened with Trump, the documents, the, the, uh, his cases in the United States, in New York, uh, a- and about taxes. Despite all of this, the January 6th insurrection, despite all this, Trump is still viable. I can't believe he's still viable and that he is gonna be out there in the primaries and he's gonna have to debate DeSantis, and I don't know that DeSantis can beat him in a debate. I think he might, uh, win. So, this is completely scary for both me and Sax. I think it's terrifying. It's Sax's nightmare and mine.
- DSDavid Sacks
Well, I think he's mainly viable in the minds of the MAGA dead-enders and the mainstream-
- JCJason Calacanis
Ooh.
- DSDavid Sacks
... media who want to keep him alive. And the Biden administration wants to keep him alive. They'll do anything to keep him alive and in the news, and you love keeping him in the news. So, it's a-
- JCJason Calacanis
Yes.
- DSDavid Sacks
... it's a codependent relationship between the mainstream media, which you sometimes front for, and Trump.
- JCJason Calacanis
Oh, be careful telling me what I think.
- DSDavid Sacks
We need to end this codependency, J-Cal.
- JCJason Calacanis
(laughs) Well, uh, I wish the Republican Party would finally take ownership of this disaster that is Trump and tell him that he has no business, but you guys keep him in the game. And the fact that he's viable, again, your personal nightmare and mine. Okay, biggest business winner. Everybody excited to get off politics right now and get to our kill zone, which is business. So, last year, we had predictions in this category. I had said Disney. That's an up and down prediction. I'll get into that in a moment. Chamath, you said small and medium-sized businesses, the old SMBs. Sax said rise of the rest, the flyover states. And Freeburg, you said Stripe. Uh, Chamath, let's start with you. SMBs. What did you get right? What did you get wrong here?
- CPChamath Palihapitiya
Uh, I mean, I whiffed. It just completely missed the global macro shift that we embarked on in full force starting in Q1 of this year. It was, it is the most important business story of the year. It's just like, we have an absolute complete regime change. And by the way, that regime change is so complete and so, you know, um, thorough that it even touched Japan just a few weeks ago, or sorry, just a few days ago, where Japan who fin-, you know, finally yielded on this idea of you're gonna, we're gonna have negative interest rates and yield curve control. Even they finally broke and, and, and raised rates. So, it is an absolute worldwide sea change in how we need to think about risk. And I think that's worth talking about a little bit later in the show. But that was the single biggest business story of the year.
- DSDavid Sacks
Yeah, I'll add to what Chamath said. I missed this too, even though on another prediction, when you asked what the biggest business loser would be, I think I said that it would be asset classes that had been pumped up by the Fed's money printing, because you can start to feel-
- CPChamath Palihapitiya
Mm-hmm. You nailed that. Nailed that.
- DSDavid Sacks
Yeah, yeah. So I got that-
- CPChamath Palihapitiya
Nailed it.
- DSDavid Sacks
... part right. But what I didn't connect it to were all the asset classes actually got pummeled. So, I kind of conceptually understood that rates were rising, but I totally underestimated the magnitude of the shift, the way that growth stocks would get hammered, the way that crypto would get destroyed. The fact that, like, Tiger basically got blown out of the industry. I mean, I had the right general intuition, but I didn't translate it into the specific asset types and the magnitude of the shift, and also the, like what Chamath said, a real regime change now in how markets are viewing stock performance.
- JCJason Calacanis
That's really incredible. Uh, Freeburg, let's get in on this. This is somewhere where you can contribute, uh, deeply. What do you think about your take last year, and, uh, you still believe in Stripe?
- DFDavid Friedberg
Yeah, I mean, look, it's a, it's a business that obviously benefited greatly from the pandemic and the adoption of, um, you know, the, the payment processing infrastructure that they've built a- across their, across various kind of e-commerce platforms. It's, I've been, I'm not an investor, so I don't have any numbers, but there are public reports that have highlighted that their revenue increased 66% this year. They've indicated that they're probably gonna experience significant revenue slowdown with the recession ahead. But it still seems like a super high-quality business. And, you know, valuation-wise, who knows what things are, are gonna be worth when they ultimately come to market? There's certainly no one going to, uh, going public right now. So, at some point, we'll see, you know, whether valuations play out, but it seems like a, continues to be a very strong, one of the strongest private businesses that's being built in Silicon Valley.
- JCJason Calacanis
We will get to 2022 biggest business winners in one second. I will just say for Disney, yeah, m- man, what a swing. Bob Chapek, uh, in and then out, and now Bob Iger back. So, I feel like I got this one wrong and right. At the same time, I still believe in the company deeply and I think they're gonna have
- 23:35 – 29:48
Biggest winner in business
- JCJason Calacanis
a big win. Let's get to our actual biggest winner of 2022. Sax, why don't you lead us off with your biggest winner of 2022 for business?
- DSDavid Sacks
I said Lockheed Martin along with other defense stocks. Uh, Lockheed Martin, which makes Javelins and HIMARS, is up 40% in the past year when most of the market's been weighed down. Northrup Grumman's also up almost 40%. And even some of the lesser performers like Raytheon and General Dynamics are up about almost 20% in a terrible market environment. The fact of the matter is war is terrible, but it appears to be good business. We've sent so many weapons to Ukraine that there's recent press reports that our, the US stockpiles of missiles, Javelins, and Stingers are now depleted.So these companies are gonna keep doing well for the next year at least. Now there's a new appropriation sailing through, something like 44 billion of new funding for the war. It's now over a hundred billion dollars. McConnell, uh, says this is the Republican's number one priority. This is now a bipartisan concern. And if you think the war is expensive, just wait for reconstruction. That's estimated to cost roughly a trillion dollars to build, uh, Ukraine back.
- JCJason Calacanis
Sax, can I ask you a question about that? Uh, are these... When we, uh, fund these wars, I've- I've heard, uh, different versions of this. Can't get a clear answer. When we provide weapons, uh, and systems like this, are they not on account and we ask for money back at some point? Do you know the answer to that question?
- DSDavid Sacks
Do you think we're gonna get money back? Are you kidding me?
- JCJason Calacanis
It seems to be sometimes that we do, so that's why I was asking. I think it's something there hasn't been clarity on.
- DSDavid Sacks
Look, I think the- the- the war has been phenomenal business for the military industrial complex. So that's what we're seeing here. Uh, not so great for the rest of the economy.
- JCJason Calacanis
Freedberg, what do you got?
- DFDavid Friedberg
Yeah, I mean, I think you guys all remember last November, I predicted energy and defense to be the best performing-
- JCJason Calacanis
Mm-hmm.
- DFDavid Friedberg
... stocks for this year. Sax is right. I think defense is up 40%. So I- I kind of went with the bigger... Oil and gas companies, um, are up, uh, you know, across the board about 47%, uh, in terms of equity value in the public markets, uh, year to date, uh, compared to the S&P being down about 20%. Uh, so over the short term, I would argue oil and gas companies, but I think that, um, over the long term, there were a couple of big breakthrough moments, uh, that I would give kind of, you know, the winner, uh, in business that will benefit over the long term to OpenAI and to fusion startups. Uh, and we'll talk more about why, uh, for those two obviously later when we get to the biggest winner in tech and science. Um, but yeah, short term, oil and gas, they benefited from the supply constraints and the conflict in the Ukraine.
- JCJason Calacanis
Okay.
- DFDavid Friedberg
And then longer term, I think OpenAI and fusion startups.
- DSDavid Sacks
Well, and by the way, I mean, just- just to give Friedberg some credit here, you actually predicted the war, or you predicted a war. I don't know if you predicted this war, but you predicted war in 2022.
- DFDavid Friedberg
Yeah, no that's- that's what I tried to con- Yeah, predicted the war and Putin kind of rising to the center stage and the defense energy.
- JCJason Calacanis
Where's the dog?
- DSDavid Sacks
That was a huge prediction because I don't think most people, even most analysts, well, they were surprised even when the invasion happened. I think people were still very surprised both that Putin would order it, but also if you study the situation, I think you got to be surprised that we didn't negotiate harder to try and prevent it.
- DFDavid Friedberg
I traded it too. I bought- I bought an energy ETF, so it worked out for me.
- DSDavid Sacks
Okay.
- JCJason Calacanis
All right, Chamath, your biggest business winner of 2022.
- CPChamath Palihapitiya
Uh, Nick can throw it up, but it's basically any single person that understands the following formula. So if you... This is the, uh-
- DFDavid Friedberg
(laughs) This is so good.
- CPChamath Palihapitiya
This is the- this is the capital asset pricing model. So what is this? This is like, before you make any investment, what it actually tells you is, here's the rate of return that you need to generate above the risk-free rate in order for you to justify making that investment. And if you really understood the capital asset pricing model going into 2022, it would have been difficult for you to not make money, because all of a sudden, as the 10-year flexed up and as, you know, the volatility, particularly of things like tech stocks went crazy, you could have figured out where you... To park your money and all these people that have built businesses around this capital asset pricing model. So you have companies, obviously, so, you know, you have sectors of the economy like defense or energy stocks, consumer goods and staples. They all had moments where they all did well. But if you take it one step above, the organizations that actually ran big macro books or really understood how to algorithmically implement this capital asset pricing model just ran roughshod over the markets. And, you know, said in a different way, it's sort of my background, which is, you know, if you understood the capital asset pricing model, you would have been a massive bear, and the bear got fed this year to a degree that none of us could have anticipated.
- JCJason Calacanis
Okay. So am I correct saying the capital asset pricing model is the biggest winner?
- CPChamath Palihapitiya
Oh, no, people that understood it.
- JCJason Calacanis
People that understood it. Got it. Okay. And for my biggest winner, I went with ChatGPT/OpenAI and their partner, Microsoft. Why did I pick that as the biggest winner? Well, uh, on my other podcast, This Week in Startups, we played a game, ChatGPT versus the first result of Google's, and Molly and I could not tell the difference. And in fact, we picked ChatGPT's answers often above Google's. Google, one of the greatest, uh, businesses and franchises ever created has no answer at- currently for ChatGPT, because Google's business model is to get you to click on an ad between links. If you give the actual answer, then the person doesn't... Stops clicking. If they stop clicking, Google stops making money. There is no business model in search if the person gets their answer because they're done. This is an existential threat like we have not seen, and our friend Sam Altman has aligned ChatGPT/OpenAI with Microsoft. Microsoft, I think, is going to release a... And this is a prediction as well, a search engine with OpenAI that has a significant impact on Google's franchise. We didn't think this would ever happen, and it's here.
- 29:48 – 42:21
Biggest loser in business
- JCJason Calacanis
Okay, the biggest losers in business. We made predictions last year. I said in 2020... I- I predicted in 2021, the biggest loser in 2022 would be crypto. By the way, Friedberg, you agreed with me, and we nailed it. What-
- DFDavid Friedberg
You agreed, you agreed with me.
- JCJason Calacanis
Well, yes, that's correct. We were in agreement. How about that?
- DFDavid Friedberg
We were in agreement.
- JCJason Calacanis
That's the... We were in agreement. Sax-
- DFDavid Friedberg
Independent, yeah.
- JCJason Calacanis
You said, uh, and Chamath, Visa/Mastercard, we'll get into that. And Sax, you said asset classes benefiting from government pumps. Very interesting. The Fed stopping QE. Interesting. Anybody have comments on their predictions or each other's predictions from last year?
- CPChamath Palihapitiya
On a percentage basis...David absolutely nailed it. Sacks absolutely nailed it. On a dollar basis, the biggest business loser of this year was Big Tech. And I think that you saw three things happen, which I think are important for the future. The first was, it was the most crowded trade, both by professional money managers as well as retail, and that fever finally broke in the last half of, uh, in the second half of this year and now going into, uh, into these last few weeks, you're seeing a lot of panicked selling to cover losses and other things. So, I think that, um, number one, that happened. Number two, regulators basically said, "We're going to go after these guys every single which way we can."
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
And then number three, I think it started to change the innovation cycle where people now actually believe that they can't outspend because folks won't tolerate it, and the things that they're spending their money on seem kind of foolish. And so I think the, you know, Big Tech is probably not discussed enough, but it was a huge loser for this year, in terms of what happened to them.
- JCJason Calacanis
Absolutely. 2022's actual biggest business loser, Chamath says Big Tech. Freeburg, who is your biggest business loser for 2022?
- DFDavid Friedberg
I mean, this one's just a simple FTX. I mean, that was such a, uh, incredible revelation of the scale of the scam and the fraud and the craziness that went on. And I think what was interesting about FTX is it had implications, not just for crypto, and not just for kind of offshore regulatory, not just for fraud, but also for the investors. We had a whole debate about whether the press and journalists failed to kind of, you know, a- appropriately investigate this guy rather than give him accolades because he said the right things, which he said he did over IM. And investors failed to do relevant amounts of due diligence or form a board and have proper governance over him, because they wanted to be part of the hot new thing and everyone had capital to deploy. And I think what was interesting about the FTX failure is it didn't just, it wasn't just a failure due to fraud, but it revealed so many parts of kind of, you know, call it, uh, um, you know, systemic laziness and, and systemic kind of blind eye and systemic bias, uh, that allowed and enabled this to happen. It was really a revealing kind of failure, and that's why I kind of gave it the, the, the award.
- JCJason Calacanis
Mr. David Sacks, who is your biggest business loser of 2022?
- DSDavid Sacks
Well, you kind of mentioned this. Uh, I picked Bob Chapek, who's the former Disney CEO. He was Iger's handpicked successor three years ago, then the pandemic hit, which shut down the theme parks. Then I think the big mistake was allowing himself to be mauled by woke employees into picking a fight with DeSantis over the so called Don't Say Gay bill. Uh, that caused DeSantis to retaliate by threatening the special privileges that Disney enjoys in the state. And then he had Iger undermining him behind the scenes. This was revealed, I think it was in a Wall Street Journal story, that he was grousing to insiders that Chapek was not soliciting his advice and he was undermining confidence in him with the board. And, uh, recently Chapek was forced out and Iger was put back in charge.
- JCJason Calacanis
Which is a fantastic choice for the biggest loser.
- CPChamath Palihapitiya
How brutal does Iger look in that Wall Street Journal piece?
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
I mean, would anybody work for him?
- JCJason Calacanis
Yes, he is incredible. He looks terrible. I agree. I read that piece twice, actually. The CFO calling him up, she was the one who stabbed him, uh, you know, and knifed, uh, Chapek. It's a great Wall Street Journal read.
- CPChamath Palihapitiya
Well, I don't think that, that, I don't think that, that happens without the support of the person waiting in the wings.
- JCJason Calacanis
Hey, listen, there's a couple of jobs you never quit. You never quit a hit TV show. You never quit a hit band like Roger Water did with Pink Floyd.
- CPChamath Palihapitiya
Why didn't they just extend his retirement?
- JCJason Calacanis
And you never quit the Disney job. It's the best job, the best SEO job in the world.
- CPChamath Palihapitiya
But Jason, why go through this-
- JCJason Calacanis
You never quit.
- CPChamath Palihapitiya
Why go through the theatrics of like grooming somebody, putting them in your job, and then undermining them? Like I, I ... All I'm saying is, if you're a good-
- JCJason Calacanis
I think he made a mistake. I think he made a mistake. He quit and he wanted it to come back.
- CPChamath Palihapitiya
And also if like, if you're a good up and coming exec, I mean, what do you do if like all of a sudden like, you know, you have the opportunity to get groomed for that job? It just seems really risky.
- JCJason Calacanis
Yeah, I mean, I, I think Bob Iger realized when he, in that piece, they say he went on his yacht, his wife didn't come with him. The Wall Street Journal piece is incredible. And he's got bored and he's 70 something years old. He's only like in early 70s. Why would you give up the greatest job in the world? So he went back and he took it back.
- DSDavid Sacks
Didn't Disney have a mandatory retirement age?
- 42:21 – 51:16
Biggest business surprise
- JCJason Calacanis
for me. All right. Biggest business surprise. Let's see if we can get Sachs back engaged in the conversation now that we're not talking about art and life. Sacks-
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
Last year, your biggest business surprise.
- CPChamath Palihapitiya
Sachs just produced a movie about DALL-E.
- JCJason Calacanis
I know. He is... I'm joking with him. He's-
- CPChamath Palihapitiya
True artist.
- JCJason Calacanis
And he sold it to Mark Cuban. Congratulations on the sale.... uh, David.
- DSDavid Sacks
I guess me and Cuban are besties now.
- JCJason Calacanis
Fantastic. In 2021, our selections for busi- biggest business surprises. I was very surprised by Dows, Chamath by Moderna, Sacks by tech moving to Miami, and Friedberg, you were surprised by NFTs. What were we surprised by in 2022? Friedberg, we'll start with you.
- DFDavid Friedberg
Elon Musk's acquisition of Twitter, I think took everyone by surprise. It kind of went, I mean this is such an obvious one, but it went from a whimsical fantasy and idea to suddenly, you know, cold-hearted reality with, uh, you know, a h- a huge kind of negotiating saga that took place and court battles and all the drama that ensued. And here's what I think was most surprising about it. It wasn't just the acquisition and the, and the fact that the acquisition closed, but it was the, the incredible veracity of the head cutting, cost cutting, the demands that people return to work, return to the office. And then what was most surprising that followed that is the impact that that seems to have had on the rest of Silicon Valley, where now nearly every VC I speak with, every CEO, every board is looking to Elon's behavior for right or for wrong, for, you know, moral, moral or not, and saying that's a model for how you can challenge your team to achieve the impossible in an impossibly difficult environment, which is what we find ourselves in. And so I think it was a, a series of surprising events. He bought Twitter, he made these incredible changes, and then everyone seems to be looking to that as a model, and it's really resonated, it's created a rippling effect. I'm not saying it's good, I'm not saying it's bad, I'm not saying it's moral right or wrong. Um, but the whole thing, uh, was really an incredible, surprising, unexpected saga this year. Uh, so I, I give the Elon acquisition of Twitter kind of the, the award.
- JCJason Calacanis
Chamath, uh, do you have a biggest surprise?
- CPChamath Palihapitiya
I would say it's, uh, Jerome Powell and the Fed and their staunch hawkishness, uh, on inflation. I think everybody wants all of this to be over, and I think we're definitely in the last few innings of it. But I think what was surprising was how consistent and how hawkish and how bearish Jerome Powell was every chance he got. He didn't capitulate or waiver from the key message, which he was saying from the beginning, which is we have the tools to fix a broken economy, but we don't have the tools to fix runaway inflation. And so we will raise rates higher than anyone expects and keep them there longer than anybody wants, because on the back end of it, we can fix a few broken bones. But if left unchecked, this could really do a lot of damage. And I think that that was an enormous surprise that all the political pressure in the world, all of the financial capital markets pressure in the world did nothing to change his position.
- JCJason Calacanis
Sacks, what was your biggest business surprise of 2022? David Sacks's biggest surprise.
- DSDavid Sacks
Well, it was, it was a pretty big surprise that Adobe bought Figma for 20 billion. Uh, that price tag in this environment, pretty big surprise. But I gotta say, I think Friedberg nailed it. Uh, gotta say that the business saga of the year was Elon buying Twitter. First, the liberal media was up in arms that he might do it. Then they insisted that he must complete the deal. In any event, he, he did ultimately buy the company and now he's affecting his changes. I agree, that's the big business story of this year. Certainly, it was a big surprise for me that I got deposition for six hours.
- DFDavid Friedberg
Is it a surprise that you're sitting in Twitter's headquarters today right now? (laughs)
- DSDavid Sacks
Yeah, it is a surprise. But just by the way, the rumors and speculation are getting outta hand. I am not a candidate for CEO of Twitter. So-
- DFDavid Friedberg
Ah.
- DSDavid Sacks
... I wanna put the kibosh on that, 'cause it's starting to get outta hand.
- DFDavid Friedberg
J Cal- The job is yours, my friend. Congratulations.
- JCJason Calacanis
All right, I guess, uh-
- DFDavid Friedberg
You deserve it.
- JCJason Calacanis
... let me know-
- DFDavid Friedberg
You've earned it.
- JCJason Calacanis
... when I start.
- DFDavid Friedberg
You've earned it. You've worked hard. You've demonstrated-
- JCJason Calacanis
Okay. ʼKay.
- DFDavid Friedberg
You're, you are... Yeah. J Cal, the, the last man standing, last man standing.
- CPChamath Palihapitiya
Outwit, outlast.
- JCJason Calacanis
Now that Sacks has said he is not taking the job, a bunch of libs have just stopped taking Xanax. The, the libs biggest fear was Sacks was gonna get that job. Woof, we just canceled a bunch of Xanax, uh, prescriptions. Uh, congratulations to the lib. Sacks is not gonna be your overlord on Twitter. For me, it's obvious, uh, the Twitter acquisition is the biggest surprise by far and away. Friedberg, I couldn't have summarized it better. I will say in six weeks what we have seen there is nothing short of extraordinary. Have there been bumps in the road? Has it been a little chaotic at times? Perhaps. But the features that are coming fast and furious are gonna be the story going forward. You've seen, uh, Twitter for business. Sacks had his fingerprints all that, you may... Fingerprints all over that. Uh, you may have seen, uh, hashtags for, uh, stock tickers. I was, uh, briefly involved in that. There are gonna be so many features coming, and this is what Elon's zone of excellence is, product. He is an engineer. He's a product genius. The proof is in the pudding, whether it's rocket ships or the cars, we're gonna see a parade of features. I predict in another six to 18 weeks, we will see people talking about all the great features in Twitter, not any of the transitional issues, and people will be shocked. My runner up, Meta stock collapsing. That was my runner up for the biggest business, uh, shock is that they just absolutely collapsed.
- DSDavid Sacks
I was just gonna add to what you're saying about new features launching. While we've been sitting here on this pod and I've been checking my Twitter feed, there's a new feature where there's a view count on all of your tweets and all of everybody else's tweets as well. So you can see how many views a tweet is generating. So this tweet that I posted yesterday has 1.5 million views. It's like incredible. So it really shows the incredible reach of Twitter. And anybody who's thinking about going to like some knockoff like Mastodon or something is gonna have to contend with the fact that it doesn't have nearly the distribution. So I think-
- 51:16 – 57:36
Best science breakthrough
- DFDavid Friedberg
- JCJason Calacanis
Okay, best science breakthrough. Here's an easy one for us to do. 2022 biggest science breakthrough. What have you got, sultan of science? We cor- of course have to start with you. 2022 biggest science breakthrough. Friedberg?
- DFDavid Friedberg
Yeah, I'm, uh, I'm gonna give it obviously to the, um, the demonstration of net energy gain from the National Ignition Facility in plasma fusion, uh, that we talked about last week. It, I, I wouldn't call it a breakthrough, by the way. I think we, we, we used that as a misnomer last week, but I'm still gonna put it in this category. It's more of a milestone, uh, along a very long path, a very arduous path, and very difficult work that's been taking decades. So it's a great milestone, but I think what was so im- important and impactful and powerful about it is that it's really catalyzed a change, a sea change, in the investing and the outlook, that this is becoming more reality. As I mentioned last week, we've seen an increase of nearly 40% in the number of fusion startups and the amount of capital that's flowing in is now reaching 10 billion a year. So this is becoming, you know, a real investible, or an area that's getting real investment. Some people might not think it's very investible, but that, that's why I think it's, uh, it's been an important year for fusion, and I think, um, you know, it's something I highlighted last year I was excited about.
- JCJason Calacanis
And I, too, picked fusion. Uh, also just a point of clarity, last week some people, Chamath, before you go to your prediction, were saying, "Hey, you're talking your book on solar," when you were in your disagreement with Friedberg. That's obvious. You, you've been very upfront that you were investing in solar. You placed your bet.
- CPChamath Palihapitiya
Yeah, 100%.
- JCJason Calacanis
Yeah, so just to-
- DFDavid Friedberg
And just for clarity-
- JCJason Calacanis
Everybody knows he made that bet. He's talked about it incessantly.
- CPChamath Palihapitiya
Plus those idiots that were saying that are stupid, but, um ...
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
Let me, uh, let me further clarify what I said last week and why it's important. If, Nick, can you bring up the capital asset pricing model again? The most important thing for me is to make sure that we don't misallocate human capital into endeavors that I think are best left for research institutions funded by the government. And I think when you look at a capital asset pricing model and try to build one out for fusion as an example, the expected rate of return that you need to get from this is just astronomically high, because of the beta of that investment risk and the market risk premium you have to generate. And so, you know, from my perspective, I think that there are probably four or five labs in the world that are capable of actually getting us to a positive energy equation. I think Friedberg, I really thank you for actually saying that it wasn't a breakthrough and more of a milestone. I think the real breakthrough is when we have positive, not just joules, but we actually convert that into electrical energy, right? And we actually talk about power and watts, and I think that most people listening probably don't even understand the difference between joules and watts or don't even care and they wanna jump around here or there. So the point is that there's an enormous path we need to take in physics, and I think it's best done in governments, and I don't want to see a bunch of billions of dollars get wasted to get to, to get marginal costs of energy to zero right now. I think there is a point in time where private startups can take the, the last 20% or 30%, but I think about this like the internet, which is you needed DARPA to build V1, and then it could be handed over to private industry. And I think fusion, when we look back, will look very similar. And all the folks that tried to build, you know, versions of the internet that were private, I think found themselves lagging because there's just a level of investment that's required that's best served in government. So anyways, that's, let's clarify that for all the-
- JCJason Calacanis
Sure.
- CPChamath Palihapitiya
... for all the folks who got their panties in a bunch of dunes.
- JCJason Calacanis
For the brigadoons.
- CPChamath Palihapitiya
But in any event, my science breakthrough of the year is that there is a 13-year-old girl, this was-You know, because of all of this fusion stuff actually, we didn't even get to cover it 'cause it happened in the same week, and I think this is infinitely more impressive and is an actual breakthrough, which is a 13-year-old girl in the United Kingdom who had a heretofore uncurable form of leukemia, T-cell acute lymphoblastic leukemia. So typically you start in chemotherapy. If chemotherapy doesn't work, you move to bone marrow transplants. And it was uncurable. And a lab in the UK basically using CRISPR edited these transplant T-cells to go in and wipe out her cancer, and now her cancer is literally undetectable. Now if you bring up that capital asset pricing model again, Nick, what I'll tell you is the rate of return on a human life, in my opinion, is infinite. And so here is an unbelievable breakthrough that got very little attention because everybody was wrapped around the axle of fusion. It happened in the same week, so maybe it's understandable. I didn't understand it, but I think this is the single most important thing that happened in science not just this year, but frankly in the last decade. Because if you can actually now do base editing and eradicate, at least in this case, a blood-based cancer and eventually will be able to bring that and use that towards solid state tumor cancers, it's a huge breakthrough in- in- in just human longevity and human quality of life. And that happened just a few weeks ago.
- JCJason Calacanis
Okay, and of course for David Sacks, his biggest, uh, science breakthrough is I don't care. So moving on. (laughs) Sacks, go ahead tell us.
- DSDavid Sacks
Yeah, no, this category reminds me of, remember when Biden had that moment where he's like, "America can be defined in a single word." And then he's like, "La-la-la-la-luh." That's kind of how I feel about this category.
- NANarrator
America is a nation that can be defined in a single word, as uh, foot him, uh, foot, foot... Excuse me.
- JCJason Calacanis
Amazing how you figured out a way-
- DSDavid Sacks
(laughs)
- JCJason Calacanis
... to be derogatory about Biden in the science section, a new low even for you, Sacks. (laughs) Oh, that's a good one, Sacks. I like it. All right, biggest flash in the p- pan, 2021 this is what we said were the biggest flash in the pan. I said, uh, the woke socialist leadership of cities i.e. Chesa Boudin. Freeburg said the Constitution DAO. Sacks said the word transitory, very well played. And Chamath said the metaverse, also very well played. Uh, everybody take-
- CPChamath Palihapitiya
Oh, nailed that, nailed it.
- JCJason Calacanis
Yes, very good. Everybody get your flowers. Uh, enjoy. All of those seem like pretty good, uh, selections. But this year is what everybody wants to
- 57:36 – 1:42:24
Biggest flash in the pan
- JCJason Calacanis
hear about. Freeburg, tell us now, who is your 2022 biggest flash in the pan?
- DFDavid Friedberg
The undisputable-
- JCJason Calacanis
Ooh, here we go.
- DFDavid Friedberg
... biggest flash in the pan of 2022 was the All In Summit.
- JCJason Calacanis
Ah! Wow!
- DFDavid Friedberg
It came-
- JCJason Calacanis
That hurts.
- DFDavid Friedberg
... it went.
- JCJason Calacanis
That hurts.
- DFDavid Friedberg
And it'll always be a strong and- and, uh, significant memory. It was such a hot thing for a minute, and then it died. So, um, to the All In Summit, I- I, uh, I- I raise my glass.
- JCJason Calacanis
Pour one out.
- DFDavid Friedberg
... I pour one out, I toast to you, to Miami, and, uh, unless David Sacks carries it from here, uh, it was a flash in the pan.
- JCJason Calacanis
It was a flash in the pan. Uh, Sacks, who's your flash? Which Democrat is the flash in the pan for you?
- DSDavid Sacks
Well, th- this is where I have, uh, Liz Truss. As you guys mentioned, she only survived 44 days as PM. I mean that's only four Scaramuccis.
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
(laughs) .
- CPChamath Palihapitiya
(laughs)
- DSDavid Sacks
She was basically fired by the bond markets after she combined a Thatcher-esque tax cut with massive energy subsidies to counter the price spikes caused by the war in Ukraine that she was fanatically committed to. This was deemed untenable by the UK Central Bank. It crashed the pound. And I think there is a serious point here, which is that as much as Thatcher and Reagan were the two towering heroic figures of the 1980s, I think zombie Thatcherism is not going to be electorally viable in the UK, just like zombie Reaganism is not going to be viable in the United States. I think that the conservative movement has to stop living in the past. We have to develop fresh ideas to meet the economic and foreign policy challenges of today.
- JCJason Calacanis
Chamath, do you have a flash in the pan?
- CPChamath Palihapitiya
I actually think fusion literally was a flash in the pan. It was... it lasted-
- DFDavid Friedberg
Oh.
- CPChamath Palihapitiya
... 10 to the negative 10 seconds. So that more- less of a flash you can't have without being a flash in the pan.
- JCJason Calacanis
Ah they have it. Hey, uh, Sacks, I see somebody-
- DSDavid Sacks
Oh, hey guys, look who's here.
- DFDavid Friedberg
Oh, look who it is.
- JCJason Calacanis
Oh, yes. (laughs)
- CPChamath Palihapitiya
(laughs)
- DFDavid Friedberg
Oh, is it the proprietor?
- CPChamath Palihapitiya
The proprietor, the owner.
- EMElon Musk
Twitter customer support, uh, at your service.
Episode duration: 2:17:14
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