All-In PodcastE126: Big Tech blow-out, Powell’s recession warning, lab-grown meat, RFK Jr shakes up race & more
EVERY SPOKEN WORD
150 min read · 30,058 words- 0:00 – 1:10
Bestie intro!
- JCJason Calacanis
I can't wait to talk about lab-grown meat. I have been trying to get people to- (instrumental music plays) Oh, God. (laughs) Oh, no.
(laughs)
Oh, please. Don't... Let's not get canceled.
(laughs)
But the four of us are functional again, we like each other, we enjoy, we look forward to doing this show again, everything's dialed in.
- CPChamath Palihapitiya
Is your lab-grown meat... does it use hormones?
- JCJason Calacanis
My lab-grown meat was a little- (instrumental music plays) .
Let me ask you this about your lab-grown meat. Do you ever- (instrumental music plays) (laughs)
At this age? No.
No?
No. (laughs) No. You know, I was told that my lab-grown meat was a little- (instrumental music plays) . I've injected some flavors of, uh, tobacco, black cherry.
Some notes?
Some notes. (laughs)
- CPChamath Palihapitiya
Persimmons.
- JCJason Calacanis
(laughs) Persimmons.
(laughing) Oh, God. No, it's-
- CPChamath Palihapitiya
Let your winner slide.
- JCJason Calacanis
Rain Man, David Satterfield.
- CPChamath Palihapitiya
I'm going all in. And I said we open source it to the fans and they've just gone crazy with it.
- JCJason Calacanis
Love you, SI.
- DFDavid Friedberg
Queen of quinoa. I'm going all in.
- JCJason Calacanis
So
- 1:10 – 24:21
Google's mixed bag, Big tech leaves the growth phase, macro picture
- JCJason Calacanis
let's go to big tech earnings. Google stock is up 5% after beating on the top line and bottom line estimates. Some high level takeaways, Google announced a $70 billion stock buyback plan and that their cloud unit was profitable for the first time in its history. As we mentioned last week, Sundar officially announced that Deep Mind was merging with Brain. This is kind of controversial, because it's, uh, really hard, uh, according to some sources, for Sundar to get all his lieutenants to work together and row in the right direction. Google's Q1 search revenue up year over year, 2%, down 5% quarter of a quarter. This is kind of to be expected because of seasonality, and because we're in a down market right now, obviously with the recession. YouTube down 2.5% year over year, down 16% quarter of a quarter. Other Bets, which is like Nest and some other products, down 35% year over year. Net income, $15 billion. Any thoughts, Freyberg, on what is a mixed quarter by Google, and I guess, the wider-
- DSDavid Sacks
I think, yeah-
- JCJason Calacanis
... macro environment?
- DSDavid Sacks
What was so striking about the earnings call is not necessarily what was presented, but what was not presented, which was a stronger voice and a strategic plan going forward for dealing with two major issues at the company. One is the operating cost model, and the second is the AI strategy and the response to this evolution in AI. I've heard from a lot of folks that the AI strategy in particular, it's almost like Google already has this in the bag, but they just haven't kind of let it out of the bag. It's like they've got a Tasmanian devil and they're, they're ready to go with it. And there's, from, from my read, an incredible amount of confidence that there's something that's gonna happen, and a set of things that are gonna happen that are gonna be very profound and powerful. I even heard some anecdotal stories about, "Hey, you know, we don't have this feature in this product, but ChatGPT does." And then people basically showed up to this meeting, and there was all this debate about, "Well, we can't let it out, because we're not sure..." You know, the, the classic kind of like, "We're scared of gi- doing, doing wrong," versus leaning forward and, and taking risks.
- JCJason Calacanis
Don't be evil, you're referencing?
- DSDavid Sacks
No, it was just more about regulatory concern and getting things wrong-
- JCJason Calacanis
Ah, gotcha.
- DSDavid Sacks
... and making a mistake. And so there's this total fear of, like, again, you know, regulatory and fear. So someone kind of slammed the table and said, "Let's just put it out," and the next day, they put it out. So there's definitely a cultural change happening internally is what I've heard anecdotally. But what was really missing, which is what Wall Street needed to hear, what investors and shareholders needed to hear is, what's the strategy there? How are you gonna compete? How are you gonna resolve what's gonna go forward? And secondly, what are you gonna do about the cost structure of the company? Because everyone else, uh, you know, in contrast to Meta being up 11%, 12% after hours with their cost-cutting model and demonstrating that they're gonna start pulling cash out of this business, Google's top, you know, kind of top story was, "Hey, we'll stop serving, uh, peanut M&Ms in the cafeteria," or something ridiculous. And, you know, that doesn't really address the real structural question. So, I think the stock buyback, the $70 billion stock buyback, is an authorization to repurchase. It's not a plan to repurchase. So it's unclear if, when, or how that capital does actually get deployed in the market to buy back stock. And so there is also this big kind of shareholder sentiment of being let down that there isn't an improvement in either cash coming out of the business or in cash being used in a smart way with the business. And it was the, the, the silence in the earnings call that I think really stunned a lot of people, which is why you didn't see a lot of stock movement, despite the actual business numbers being better than expected. And so there's a lot that Google, I think, still has to catch up to with respect to their peers, both on a product and strategy point of view, but also on a cost cutting and a communication of that cost cutting point of view to the market and to the street. Otherwise, shareholders are gonna start to lose faith, if they're not already, and are gonna start to put their capital with other folks who they feel are better leading and leaning into this new evolution of technology, like Microsoft, and Apple, and Meta, which is really where those big capital allocators end up picking stuff to go. Uh, one final thing I'll say, it's extraordinarily important to note that I think Google has such an incredible AI advantage over Microsoft. And, you know, Microsoft is almost solely dependent on OpenAI, this small startup company, and all of Bing Chat is powered by it. And Microsoft hasn't built out the, the infrastructure, the team, the rigor, the depth, the models that Google has. And, and Google made a few strategic blunders. You know, they shouldn't have been as open with the transformer work that they did and shared that publicly. It certainly enabled OpenAI and others to compete. But Google certainly has an incredible set of tools and capabilities that is leap years ahead of Microsoft. They're in a position to really compete. They just have to have the will and the leadership to do it, slam the table, say, "Here's... we're gonna stop wasting money, and we're gonna start leading and driving this, this, this industry forward." And this, this could be a quick turnaround story for this stock and for this company, and, and I, I, I hope it'll happen.
- JCJason Calacanis
Chamath, what are your thoughts on...... Google's leadership specifically. Is Sundar the right person to run the company going forward? Does he have the founder authority to get the ship and to get the lieutenants all kind of rowing in the same direction, or does there need to be a leadership change, which is the big discussion of topic in Silicon Valley right now?
- DSDavid Sacks
I think he's very capable. That's an amorphous organization of so many different competing interests. The thing that doesn't add up about the Google earnings st- release, but then also what Freeburg just mentioned, is there was this article that kind of tried to paint Sundar as sort of a caretaker CEO, right, where Larry was the actual shadow CEO. Well, if that's true, you know, Larry has more incentive than anybody else to kind of force change. And there was all these kind of, like, gripes and complaints that were articulated, and I don't put much stock in all of this stuff. I think that he is the right person for the job, and I think what they have to do is just do the simple basic things. Like, it doesn't take a CEO change for a board of directors to have the emotional wherewithal to authorize a 15 or 20% reduction in force for a company that is so profitable, that clearly is not yet humming on all cylinders.
- JCJason Calacanis
Hmm.
- DSDavid Sacks
And so you don't need to go through all of this drastic change t- to do these simple, obvious things. My takeaway across all of these four big companies is we are in a really unique moment to observe something that may sound controversial or hurt people's feelings that like these companies, but I think we're now well past peak big tech. Their valuations may still go up because they generate such an enormous amount of cash flow, but these are exactly those kinds of businesses now. They are ex-growth, large cash flow businesses.
- JCJason Calacanis
Blue chip, you might say?
- DSDavid Sacks
Well, they were always blue chip, but the way that they grow is not through innovation. If you look at Google, Facebook, Microsoft, and Apple, and ask yourself, "When was the last hugely disruptive thing that they've created?" You're hard-pressed to find something that was even done in the 2010s.
- JCJason Calacanis
Yeah, actually that's a good thought. I mean, the iPhone for Apple.
- DSDavid Sacks
iPhone was 2007.
- JCJason Calacanis
Yep, so that's-
- DSDavid Sacks
Microsoft was in the 1990s. Google was in 1998 with core search. Maybe there was Maps and Gmail in two, in the 2000s.
- JCJason Calacanis
Chrome, Android. They bought some of that.
- DSDavid Sacks
Facebook, it was the core service that we built in the 2000s, and then they acquired brilliantly, right? So, yeah, I'm not saying that they didn't acquire well.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
My point is that core organic innovation hasn't been there for a long time, so this is a moment to just be reflective of the fact that these are some incredible companies with ginormous cash flows, but now you've had this foundational platform shift which exposes the fact that they really aren't good at innovating. And-
- JCJason Calacanis
Mm-hmm.
- DSDavid Sacks
... at times when they've tried to organically innovate, they've massively misallocated capital. Either through-
- JCJason Calacanis
Oculus would be the example of that.
- DSDavid Sacks
Either through a bloated balance sheet, so some would-
- JCJason Calacanis
Yep.
- DSDavid Sacks
... claim that Google overspends, or through just pure misallocation by starting projects that just are not large, but consume large amounts of cash. That would be the Facebook VR example. But in all of this, I think when you cut staff and expenses as a way to meet and beat and top line growth is in the low single digits, it's an important moment to recognize that these companies have now transitioned to being cash cows. And if you look at sort of how financial markets value cash cows, they're very valuable, but it's not where you look for growth. And so in a world where rates eventually get cut and we start to come out of a recession, it tends to be that other people get rewarded. So, that's an idea that's worth-
- JCJason Calacanis
And adding to your point here, they're not allowed to acquire things. Microsoft's acquisition-
- DSDavid Sacks
The Activision thing, dead.
- 24:21 – 37:38
AI update: new projects, global enablement, early adoption
- DSDavid Sacks
- JCJason Calacanis
I did a couple of experiments, uh, this week I've been rolling up my sleeves and playing with these tools. It's pretty amazing, and I've been trying to use them-... for actual tasks in our companies.
What have you learned? What did you do and what have you learned?
So I got on the, uh, OpenAI plug-ins. Greg, thank you. Uh, I sent him my email and he, and he got me onto that. And you can connect it to Zapier. So I have two projects I'm working on currently. One of them, I was... Uh, since I'm rais- still raising 144 and I'm actually going out to people, not just taking inbound, I was like, "Hey, can I get the names of all the major LPs and start doing some research there, put it in a table?" Stuff that Zach did when he did his blog post. But then I started connecting it with finding people's Twitter handles, finding their LinkedIn profiles. And then the next piece I'm working on is automatically following them, DMing them on Twitter, let's say, or following them on and doing an in-message saying, "Hey, we haven't met. Here's the deal memo for my next fund. Would love to, you know, get together." This is sent from Jason's AI script. I was gonna, like, actually tell them, "But here's my real email if after you read the summary of the next fund you wanna meet." And then I was, I'm gonna pair that, and this is a piece I'm probably gonna need a developer to do, with our internal LP database to not email people who are already duplicates. And then, uh, inside with newsletters, I have it building a database of every newsletter we've ever sent, the writing style, and then I'm having it go find in real time news stories that we should be including in the newsletters, which I think will make the writers right now a third more productive. But these are things that would cost 40, 50 bucks an hour, 30 bucks an hour for, you know, college-educated Americans and Canadians, and I have already figured out, and I'm not a developer anymore, how to script them. And, um, I'm actually thinking about learning to code again just so I can do this myself. And so on Saturday, I'm gonna do a little coding with a friend of mine a- and get back up to speed on that. I think about 30% of what knowledge workers do right now is possible. So I put every single person at both companies on ChatGPT-4 and the sa- uh, the Playground. About 30% of what knowledge workers at both firms can do currently is doable if you can figure out n- And this stuff is not perfectly scripted yet, so I've been doing some stuff in travel as well, playing with the Kayak interface, Expedia interface, et cetera, to look at travel planning, and it's pretty good as well. Uh, so it's, it, it's... This is the real deal, folks. Uh, I, I think by the end of this year, 30% of knowledge work could be done by this. And then additionally, on Monday, I went back to work in-person, and I went to, I hosted our accelerator in-person, and then I hosted Founder University in-person in the city. The city was absolutely dead, but we had 100 people fly in from around the world for our Founder University, and a lot of them were working on AI projects. And what's very interesting is, like, there's this big debate going on, Friedberg, between is this gonna be built into ChatGPT-4 or Bard or, you know, Poe or whatever it is, or should I even bother, so should I bother building, you know, a verticalized app? And it turns out, like, I think you should do the verticalized app, and you're gonna be able to put together multiple of these AIs that have different specialties. Um, so I- I'm super stoked about it, but I do think if you're not using this, if you hear my voice right now and you're a white-collar worker or knowledge worker and you're not using this, this year and getting up to speed on it, I think you'll be out of a job within the next two.
Jeez. Wow.
I just don't think you'll compete. It would be like trying to compete without knowing how to use Microsoft Office 20 years ago. Right? Like, could you work and not know email? Remember when we came into the workforce 30 years ago and some people knew Office and email and web research and then other people didn't? Those other people retired. They were phased out. If you didn't know how to use a computer and type and use an Excel spreadsheet or do a PowerPoint, you were done.
- CPChamath Palihapitiya
I think there's two possible ways you could interpret what you're saying, so in terms of the economic impact. So one is that you could say, "Well, AI is gonna do 30% of the knowledge work, therefore 30% of the knowledge workers are gonna be put out of work." I think the, a different way to put it would be every knowledge worker can get 30% more work done.
- JCJason Calacanis
Correct.
- CPChamath Palihapitiya
So if that's the case, then they're more productive. And we were just talking about the problem of how do you increase real wages in the economy without having inflation. Well, the way to do that is for every worker to be more productive. So if every worker is 30% more productive, in theory, their wages should be able to go up by up to 30%. That's how you get wage growth. Now, maybe there will be some companies that don't need all those employees because now they're able to get, you know, whatever, a third more done. But there will be other companies who can hire them. They can go off and do other jobs for other companies, especially when you've got this backlog of, like you said, eight or ten million new, you know, jobs that are unfilled.
- JCJason Calacanis
Yeah, those jobs are all service though. You know, they're not-
- CPChamath Palihapitiya
You're actually right.
- JCJason Calacanis
... like, call it.
- CPChamath Palihapitiya
You're gonna have this big group of knowledge workers who there's just nothing for them to do.
- JCJason Calacanis
Oh, no, no.
- CPChamath Palihapitiya
I just don't...
- JCJason Calacanis
I agree with you, but I think there's gonna be a group of knowledge workers who do not embrace this and do not make the transition, because it is, it's gonna require an upskilling. Like, I think they're actually gonna n- need to know how to do some basic programming and coding to really take advantage of these, at least, like, scripting-level stuff.
- CPChamath Palihapitiya
I don't know. It's pretty easy to use. I agree with you. There may be people who-
- JCJason Calacanis
Or writing blog posts, but the da- the example I gave of, like, taking the LP database, sorting it, you know, it's not quite there yet.
- CPChamath Palihapitiya
This is not hard.
- JCJason Calacanis
But maybe it will be.
- CPChamath Palihapitiya
This is like a chatbot.
- JCJason Calacanis
It is. Like, I think it takes, like, level two programming skills.
- CPChamath Palihapitiya
No, it doesn't. No, you don't have to know how to program. You just have to know how to prompt it in natural language. It's the opposite of needing to learn how to code. The thing about-
- JCJason Calacanis
Yeah, two-
- CPChamath Palihapitiya
The thing that makes coding hard-
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
... is that you have to learn the specific commands. It's like its own language. You have to learn a new language.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
With this, you don't. In fact, one of the cool things about some of these, uh, OpenAI APIs-... is that you just tell it what you want it to do. Y- there's not even, like, a scripting language. A lot of it's in natural language. And that makes it incredibly easy to use, even for developers. So I don't think this is a hard technology to use. I agree with you, there are maybe people who are resistant to it because there's always people who are resistant-
- JCJason Calacanis
Yeah.
- 37:38 – 47:52
SF CRE continues to collapse, Gotham City update
- JCJason Calacanis
I mentioned I was in Phi Di, and I was at, uh, Fenwick's office and then Wilson Sonsini's offices, two law firms, being in the law firms, in, uh, the, the financial district in the Embarcadero; it was a, an absolute ghost town. And when I say ghost town, I mean like serious ghost town, like weird, like this is, uh, still, like, being in some dystopian science fiction movie, the last man on earth. And then, uh, we saw in the group chat today, 350 California Street was worth $300 million four years ago. It's a 20 story, two story glass and stone tower, it's a picture of it, it's going up for sale. And they believe, according to the Wall Street Journal, that bids will come in at $60 million, an 80% decline. And we talked about this, commercial real estate, uh, would have this moment, a lot of the banks, uh, the smaller regional banks own this debt. Saks. W- what do you think is gonna happen here? Who is the person who would buy an office tower in downtown, even at an 80% discount knowing that you have to pay all those carrying costs and there's so much vacant office space and it's only increasing?
- CPChamath Palihapitiya
Right.
- JCJason Calacanis
W- what's your, who, who buys this?
- CPChamath Palihapitiya
It's called land banking.
- JCJason Calacanis
Okay. Explain.
- CPChamath Palihapitiya
So in other words, okay, what I mean is, you're right, there's 30% vacancy in San Francisco right now, maybe going up even more, uh, in the next few years as leases roll and people take less space. You may have a countervailing effect in terms of new companies moving back because of AI or, or expanding. So, it's possible you start to see some growth in the office market in San Francisco. But the bottom line is, 30% plus vacancy is gonna take years and years of growth in order to absorb. So you're right, this building, they can slash its rent, but they still probably can't fill it. I mean, there's just no, there's just no demand. So you're gonna be sitting on that property for five years, 10 years before the market comes back the way that you need it to.
- DSDavid Sacks
But there's some value.
- CPChamath Palihapitiya
So, yeah.
- DSDavid Sacks
Right.
- CPChamath Palihapitiya
Oh, it's gonna trade way below its replacement cost.
- DSDavid Sacks
Right.
- CPChamath Palihapitiya
If you were to build that building-
- DSDavid Sacks
Right.
- CPChamath Palihapitiya
... today it would cost you many times what they're gonna pay for it. The problem is, you can't finance that purchase with debt because the building's not gonna generate enough revenue. So that's what I mean by land banking, it's gonna have to be an equity investor who's willing to think long term and say, "I'm gonna buy this at a super distressed price and I'm just gonna sit there and hold it and wait, carry it," like you said, "bear the carrying costs until the market comes back."
- DSDavid Sacks
But JCal, I wanna say something. I, I think that it's a great analogy because public growth stocks have declined 70 plus percent, right, since the, uh, the market started to decline. And we've talked a lot about the statistic that I've shared a bunch publicly on how 70% of publicly traded companies that have gone public since 2020 are trading below their total cash invested since, since founding. Which should translate to an estimate that, call it somewhere on the order of 70% of private companies are probably worth less than their preference stack. And so they're not worthless companies, they just have a capital structure that is upside down. Those companies are making products for customers, those product, those customers are paying money for those products, there's value there, there's real value there. The value has just been reset. And so it's interesting, it's not just the asset class of growth stocks and the asset class of private companies or private tech, it's also, you know, in commercial real estate. We, we try and treat each of these as if they were in isolation, but the problem is many of these assets were funded with some degree of leverage. Pr- preferred stock is leverage. And, you know, it is a form of debt because it has a preference over the shareholders, uh, the common shareholders, the equity holders. And the same is true with this commercial real estate market that there was a certain amount of debt. So the availability of low cost capital, um, securitized against some asset in the form of debt or in the form of preferred stock in a private company has the same effect, which it allowed the valuations to balloon on the equity. And now that the market has re-rationalized, the price is down 70 plus percent across all three of these connected, but, you know, somewhat disparate asset classes, you're kind of having this big reset moment. And funny enough, the other statistic is the cellphone traffic down 70% in downtown SF, right? So it's funny, all four of these numbers are pretty much on track. There, there it is.
- JCJason Calacanis
Yeah, this, this chart-
- DSDavid Sacks
Yeah.
- JCJason Calacanis
... is crazy. It's literally like you have some cities that have more cellphone traffic than they did last year, uh, or a couple years ago, and-
- DSDavid Sacks
This is downtown, by the way, not the whole city but-
- JCJason Calacanis
Yeah, this is rel- yeah, yeah. And San- I mean, the wider Bay Area is, is, I don't want to say booming, but it's vibrant.
- DSDavid Sacks
Yeah.
- JCJason Calacanis
I said on last week's show I was looking for a place to host the accelerator in San Mateo area. I got dozens of people contacting me...... hundreds of locations and offers at 25% of what the carrying cost is, or like the, uh, not the carrying cost, the, the rent was. And people offering the major companies offering me free space, just because they would like to have founders hanging around. And there was one project that I really liked (laughs) . The person's like, "I'll give it to you for whatever just because I want to get more people to downtown San Mateo." Uh, so, uh, y- that, that does sort of prove the point that there is a... When I, and I saw this in New York City during the, the '90s, when things were so cheap, people just got creative with space. It inspired people to say, "I'm going to create an art gallery. I'm going to create a performance space." And, and I don't know when that happens in San Francisco with these spaces, but it feels like it's going to be, uh, a while. I don't know what you... When do you think there would be demand for this space, Sax, if you had to pick a year over, and give us an over/under?
- CPChamath Palihapitiya
I mean, five years plus. I mean, the, just to give you some numbers, I think, a healthy vacancy rate in a office market is 5% to 10%. A high vacancy rate in a city was considered like 15%. Like you wouldn't want to be an office investor in a market that had 15% vacancy. 5% to 10% was sort of the normal range. If you were under 5%, it was a super hot market. And then 10 to 15 was sort of a not great market from an investor standpoint. So they're at 30% plus. And like I said, it could get worse before it gets better because as leases roll, people are going to shed more space. But that, that they might not already be subleasing. So the real number might be like 40%.
- JCJason Calacanis
Pshew.
- CPChamath Palihapitiya
So it's like a decade.
- JCJason Calacanis
So it's like a decade.
- CPChamath Palihapitiya
I think it's like a... Yeah, doesn't seem like a decade?
- JCJason Calacanis
Feels like a decade.
- CPChamath Palihapitiya
Feels like a... It's a decade assuming that San Francisco gets his house in order and companies come back.
- JCJason Calacanis
Oh, speaking of that.
- 47:52 – 1:06:47
Lab-grown meat: possibilities, potential impact, and major constraints
- JCJason Calacanis
I want Freidberg to-
Oh.
... riff on lab meat.
Uh, yes. Well, there was actually a story about this. I guess there's two types of lab... There's two types of mock meats. I've had the Impossible Burger. I, I've never craved an Impossible Burger. There's so many great burgers you can get out there, Shake Shack, Five Guys, In-N-Out. Why would I go to get this Impossible Burger unless I was doing it like vegan stuff? But then there was also supposed to be 3D printed meats, and this stuff seems to be taking forever. Where is this at? Because there was a story in the Wall Street Journal about how poorly this is apparently going?
So there's three categories of these alternative proteins to traditional animal protein. The first is these-
- DSDavid Sacks
... call it alternative proteins where you use things like soy protein or pea protein. Beyond Burger is a good example. They have a pea protein-based burger. And so that category was kind of hot for a minute where everyone was like, "Oh, it's a- it's an eco-conscious decision. People will make the shift." And, you know, Beyond Meat had this massive IPO and the stock went crazy, and I- someone said it was the biggest return ever for Kleiner Perkins. But it really was just taking plant protein, processing it, and trying to make it sort of mimic the texture and flavor and taste of animal protein. And it's more expensive. So I've generally been fairly negative on whether that really moves the needle, right? The, the, the needle for me is can you replace animal proteins traditionally and stop using all this land and putting all this carbon into the atmosphere and all this water and all these resources that we use to make all these animal proteins? Which I think is both kind of ethically incorrect but also extraordinarily environmentally costly.
Sorry, can I ask a question, qualifying question?
Yeah.
Do you think it's also important for it to not just replace natural products, despite all of those externalities you talked about, with artificial products with chemicals and sugar?
So first of all, everything is a chemical. So the, the, you know, the, I think the, the categorization of, you know, all chemicals are bad is silly because everything is made of chemicals. I think it's a question of are there bad things that are being put in there that's not good for your health to make it flavorful or, or whatever? And that, that may or may not be the case. It's really product-dependent. I don't think it's a good generalization.
But do you... So you think when I eat a salad, I'm just eating chemicals?
It is chemicals, yeah.
Got it. But what-
- JCJason Calacanis
But healthy ones.
- DSDavid Sacks
Right, healthy chemicals are in a salad-
Yeah, there's, there's, there's good and there are bad. Yeah, for sure.
And then bad chemicals are in, like, sugary cereal?
Yeah, like refined sugar is bad for sure, right? That's a bad chemical. And-
But I, no, no, I'm just, I just wanna understand how you, you just view it as a spectrum of chemicals, some good, some bad?
Yeah, there's things that are good for you. There's good fats, there's bad fats, there's, there's, you know... And even in the ca- category of sugar, some people say all sugars are bad. Some people say some sugars are better than wer- others as measured by the glycemic index. All, you know, there's a lot of ways to kinda look at this stuff.
- JCJason Calacanis
Is Beyond Meat and these pea ones, uh, th- they're all processed, highly processed. They got a lot of salt, they got a lot of fat, right? They're, they're not good for you.
- DSDavid Sacks
So the way that Beyond and Impossible and others have tried to make it taste good for people is they've added a lot of, you know, saturated fats, which is a, a way to drive the mouth feel and make it taste good. But then a lot of doctors at the American Heart Association came out and said that those fats are really bad for your heart and you shouldn't eat them. And also there's been a general kind of consumer sentiment shift. So a couple years ago, these were the hottest products. It was like all the food ingredient companies were shifting to plant-based proteins, and they were building plant-based protein business categories, and it was this big hot thing. And then they came out and they're like, "Wait a second, this isn't going as we thought." What happens is people try them out and they're like, "Yeah, that's a cool thing. I wanna do good for the planet. But would I rather pay five bucks for a Do Good for the Planet Burger that kinda doesn't taste that good? Or would I rather pay three bucks for a burger that tastes really good?"
B.
And what happens... Yeah.
B. B, I choose option B.
Yeah, and so do most people, right? And so almost all people, and I've, that's a point of view I've always shared. I said it's just, it's not gonna win the hearts and minds of the world unless it's cheaper and it tastes better.
- JCJason Calacanis
And healthier and healthier.
- DSDavid Sacks
Tastes identical, yeah, and doesn't damage your health, doesn't make you worse, exactly. So the more challenging technical solution is the other two categories. The second category is can you synthesize animal proteins using recombinant DNA? So this is where you take the DNA that codes for the protein, whether it's the milk protein or the egg protein or the cheese protein, and you put it in a bacterial cell or a yeast cell that are used to ferment, that we use to make wine, that we use to make beer. And they eat sugar, and then they spit out a product. And in the case of wine and beer, they eat sugar from grapes or for, from malt or whatever, and they spit out alcohol, ethanol. And Genentech was the first company to really pioneer recombinant DNA at a, at a mass scale. They basically used recombinant DNA to make insulin. So they took the DNA from humans that, that codes for insulin, the gene for insulin. They put it in E. coli bacteria, and then they put the E. coli bacteria in a big tank. And the E. coli start to duplicate and they make all this insulin. And that's how we make all the world's insulin today is using that biomanufacturing process. And it's how we make all of biologic drugs. All antibody drugs are made this way. It's a $300 billion a year market just in biologic drugs. So when CRISPR kinda came about in 2012, suddenly the toolkit to go in and do a much better job and a much cheaper job of editing the genomes of these little microbes to make them more efficient at making these proteins became standard. And everyone said let's go use this new category of what's being called synthetic biology or syn bio to make all these animal proteins that we use animals to get today. So now-
Sorry, can I just ask a question? Is the idea that if you use recombinant DNA in this process, it would taste better and be healthier and all this stuff?
- 1:06:47 – 1:13:14
Quick earnings button and RFK Jr's presidential bid
- JCJason Calacanis
while we were talking, by the way, Amazon's, uh, results came out. They crushed it, earnings per share of $0.31 versus $0.11, and, uh, stock is up-
- DFDavid Friedberg
Stock is up 10%.
- JCJason Calacanis
... 10% off hours, and it was up 4% today for the insider traders who are making bets.
- DFDavid Friedberg
Sacks, how do you feel about your recession prediction?
- CPChamath Palihapitiya
I'm sticking by it. I think we're still gonna have a recession, but it is an interesting paradox here. So I think there's only a couple possibilities, either tech is sort of immune, or they forecast down so much, they were so conservative in their forecast thinking we were gonna be in a recession that it was easy to beat. Or look, I could be wrong about the recession, but Powell is saying it. And Powell is saying if it's not a recession, it's gonna be less than 1% growth, it's gonna be around a year to recessions, so-
- JCJason Calacanis
He's, he's not credible.
- CPChamath Palihapitiya
... so I'm not revising my forecast. Well, I, I think Powell is credible when he's giving us bad news, because their incentive is always-
- JCJason Calacanis
Huh.
- CPChamath Palihapitiya
... to fluff it up and make it sound better than it is. So when he's telling you things look bad, maybe they're looking really bad.
- JCJason Calacanis
I don't know, man.
- CPChamath Palihapitiya
But look, it's a tale of two cities right now. I mean, the big tech companies seem to be doing really well, so it's, it's definitely a paradox.
- JCJason Calacanis
Yeah. All right, everybody-
- CPChamath Palihapitiya
Or the whole RFK thing.
- JCJason Calacanis
Okay.
- DFDavid Friedberg
That's a good topic.
- JCJason Calacanis
Yeah, great topic. Go ahead.
- CPChamath Palihapitiya
I think we should tell people, like, what he's about.
- JCJason Calacanis
We're all ears.
- CPChamath Palihapitiya
I think he gave a terrific announcement speech.
- JCJason Calacanis
Okay.
- CPChamath Palihapitiya
And ju- just to give you some background for the younger viewers who may not know, so Robert F. Kennedy, his father, ran for the Democratic nomination in 1968 after his brother, John F. Kennedy, had been president and was assassinated, as we know, in the early 1960s. What happened is at this time, before the 1968 election, Lyndon B. Johnson was the incumbent Democratic president and everyone thought that he'd be the party's nominee and he was gonna get reelected. And he was brought down by an extremely unpopular war, the Vietnam War. And it was RFK Jr.'s father, who, who was a great critic of the Vietnam War, and he ran for the Democratic nomination. And I think that he very likely would've gotten it. On the night that he won the California primary, he was assassinated.
- DFDavid Friedberg
By Sirhan Sirhan, right?
- CPChamath Palihapitiya
Yeah. If you go back and look at the things that he was saying in that campaign, he really was saying a lot of beautiful things that are in his son's ad that I think would be worth playing here. But I, I think you have maybe the setup for a similar situation here. You've got an incumbent Democratic president who is sort of not that popular, he's sort of old and out of it and incoherent, he's presiding over a war that is rapidly becoming a debacle. You don't hear so much about the spring counteroffensive anymore. These new Pentagon papers that were leaked show that the Ukrainian casualties are at least five times greater than they've been publicly admitting. It looks like Russia's certainly not losing the war the way they used to be, they've captured 90% of Bakhmut, which has been the most violent, bloody battle of the war. And Biden at this point has no strategy to bring that to an end. In fact, he's rejected multiple attempts, uh, at a peace deal. And so now it looks like it's the Chinese who are in the driver's seat potentially putting together some sort of diplomatic settlement. So I think, listen, if the economy ends up going into recession and this war ends up becoming the fiasco that it's increasingly looking like, you could have a setup like 1968 where people are wondering, "Why the hell is this guy our nominee?" And let me tell you, RFK Jr.'s already polling at 19%, which I think is pretty good considering he just came out of the gate and people don't even know the substance of his campaign yet. Marianne Williamson's at 9%, so if she dropped out, you'd be at 28%-
- JCJason Calacanis
A squatter, a squatter.
- CPChamath Palihapitiya
... for the alternative, and I think he could go up from here. And I think if you, if you watch the speech he gave, I thought there was a lot of really beautiful sentiments in there.
- JCJason Calacanis
Very good. It was very good.
- CPChamath Palihapitiya
He said that, "Biden has made Ukraine a pawn in a geopolitical battle that has put the flower of Ukraine's youth into an abattoir of death in order to exhaust Russia." He channeled America's antiwar traditions, he quoted John Quincy Adams that, "America should not go abroad in search of monsters to destroy." He quoted Martin Luther King Jr., "There is a direct link between poverty and violence and oppression at home and war abroad." He talked about the role of the CIA during his uncle's administration where he said that John F. Kennedy eventually realized that the purpose of the CIA had become to create a steady pipeline of wars to feed the military-industrial complex. And he talks about how JFK came to distrust the CIA and realize that it was lying to him. And the biggest applause line of his speech was when he quoted JFK approvingly saying that he wanted to take the CIA and shatter it into a thousand pieces and scatter it to the winds. And this very same week that he gave this speech, we found out that five former CIA directors had participated in a giant hoax on the American people by claiming that this Hunter Biden story was Russian disinformation. They knew it was not. They knew it was not. The information on the hard drive was real. It showed that Hunter Biden received multimillion dollar payments from foreign governments, including China and Ukraine, okay? And regardless of what you think of that story, it should not have been suppressed by social media, and it certainly should not have been suppressed in a PSYOP by 51 former intelligence officials, including five former directors of the CIA. And if that's the way they're gonna behave, if they're gonna meddle in American politics that way, I think we do need to start over, we do need to ask what's going on with the security state. They're not supposed to be meddling in American politics that way. So I think if this is the way they're gonna act, I say shatter away, scatter that thing into a thousand pieces.
- JCJason Calacanis
Hey, he's Catholic. I'll vote for him.
- CPChamath Palihapitiya
(laughs) And he's called out the insanity of COVID lockdowns and mandates and insanity-
- JCJason Calacanis
I mean, that's the thing that he's... I, I guess that's the big controversy is he's anti- he's an anti-vaxxer, I guess that's the-
Episode duration: 1:16:10
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