E134: Ukraine counteroffensive, China tensions, COVID Patient Zero, RFK Jr reaction & more

Jason Calacanis 0:00 So wait a second, you guys, I saw that you were at a KOTU conference or a TPG conference? You were at some banking conference? Sacks?

David Sacks 0:09 Brad and I were both at the KOTU summit.

Jason Calacanis 0:11 KOTU. KOTU is, uh, an- a large investor? Is it a, a hedge fund? Private equity?

David Sacks 0:16 They're a late stage fund. It's a big late stage fund.

Chamath Palihapitiya 0:18 Summit's a really big word. Uh, was it a summit or was it more like a meeting?

David Sacks 0:22 Well, it's like a two-day conference in Santa Barbara.

Jason Calacanis 0:26 Ooh, nice.

David Sacks 0:27 They've done it a number of years in a row now. Last year, Brad and I went and we met with SBF.

Jason Calacanis 0:34 (laughs)

David Sacks 0:35 Did I ever tell you that SBF story?

Jason Calacanis 0:37 No, let's go.

Chamath Palihapitiya 0:38 (laughs)

Jason Calacanis 0:38 Who's got crazier hair right now?

Chamath Palihapitiya 0:39 Take the hat off. (laughs)

Jason Calacanis 0:40 You or SBF? Give us a quick-

David Sacks 0:42 I think it's this.

Jason Calacanis 0:42 Take that hat off for a second. Take that Moncler off for a second.

Chamath Palihapitiya 0:45 (laughs)

Jason Calacanis 0:45 Let's get a side by side. Oh my god. (laughs) . Sachs is using-

David Sacks 0:50 Let's see.

Jason Calacanis 0:51 ... no product.

David Sacks 0:52 It's not bad.

Jason Calacanis 0:53 It's not that bad. You're starting to look like the emperor, like Senator Palpatine from Star Wars.

David Sacks 0:57 (laughs)

Jason Calacanis 0:57 I mean, people are having a field day with his crazy hair.

David Sacks 1:00 (laughs)

Jason Calacanis 1:00 But what was the vibe? If you said there was a vibe two years ago, the vibe was crypto mania, SBF was the belle of the ball. I suppose he'll be the belle of the ball when he goes in the, uh, hoosegow as well.

David Sacks 1:12 (laughs) And now it looks like he's getting off.

Chamath Palihapitiya 1:13 He's getting up. I thought he was getting off for that thing.

Jason Calacanis 1:15 I guess is the fix in? Is the-

David Sacks 1:17 The fix is in.

Jason Calacanis 1:17 ... Ivy League fix is in? Oh, god. I mean, if he gets off-

David Sacks 1:19 Then they drop five charges. I agree.

Jason Calacanis 1:20 Can you imagine if he gets off?

David Sacks 1:22 He's almost as protected as Hunter Biden.

Chamath Palihapitiya 1:24 (laughs)

Jason Calacanis 1:25 (laughs) Here we go. (laughs)

David Sacks 1:26 (laughs)

Jason Calacanis 1:26 Okay, everybody. Freeburg's not here this week. Insert jokes and conspiracy theories for the mids.

David Sacks 1:32 (laughs)

Jason Calacanis 1:33 There's gonna be about 8,000 messages on a subreddit about Freeburg missing this week and Sacks missing last week. I'll let you guys all, uh, read into it. But what would you say Brad, Brad Gerstner back, of course, fifth bestie. Brad, what would you say the vibe was at this one? If it was SBF lunacy two years ago, what was the vibe this year?

Chamath Palihapitiya 1:51 Well, you know, first they put on an incredible event. It's called East Meets West. And it was really about bringing, you know, CEOs and founders from China to the States and connecting them with, uh, founders and CEOs in the United States. Um, listen, I think it's somber, right? There's a recognition that we've seen a bounce in the public markets, you know, off of this devastation in 2022. But I think, listen, they gave a great tough love speech discussion with the 1,400 unicorns that are out there and they said, "Do not expect your unprofitable tech company to bounce like one of the magnificent seven." Right? Those are highly profitable companies traded at 19, 20 times earnings. And if you are burning cash today, they're... You can't come back to the well, so you need to either figure out how to get profitable, figure out how to get fit, or you need to sell your business because, you know, the- there's not an endless stream of money. So I, I thought it was a sober view. You know, Larry Summers was there, and I think a lot of the people who called '22 right were looking for a hard landing in Q1 of this year, probably including, you know, as the... Larry was probably more in that camp. And I think everybody still views this distribution of probabilities over the course of the next four quarters. And, you know, whether it's Druckenmiller or Stern this morning on CNBC or whether it's Larry Summers, they're all saying, "Well, we could 30% chance of a hard landing Q4, Q1." So I would say it was sober.

Jason Calacanis 3:23 Yeah, I could tell it was sober, Sacks. Go ahead. You wanted to say something?

David Sacks 3:26 Well, I would say last year it was somber in a different way. 'Cause you gotta remember, in the first half of 2022, you had this huge decline in the markets around growth stocks because interest rates had started going up. We had the whole regime change. But I don't think founders had internalized the way that it applied to them.

Jason Calacanis 3:42 Mm-hmm.

David Sacks 3:42 And then the thing that has happened over the past year is that sales have been hit. You know, uh, every software company that I know is reforecasting down. It's so much harder to grow. Customers are consolidating vendors, sharpening their pencils, seed expansion's been replaced with seed contraction. So-

Jason Calacanis 4:02 Negotiations are hard, right? Yeah. So the- the- the headwind on revenue is really-

David Sacks 4:05 It's- it's- it's much harder now to sell software than it was, let's say, a year ago. You know, 2X is now the new 3X.

Jason Calacanis 4:11 Yeah.

David Sacks 4:11 If you can grow 2X in this environment, it's basically-

Jason Calacanis 4:14 High growth.

David Sacks 4:14 ... as good as growing 3X before. It's funny to me that how much the Fed's actions impact buying behavior.

Jason Calacanis 4:22 Yes.

David Sacks 4:22 That's the thing that I underestimated.

Jason Calacanis 4:23 And the psychology is distinctly different. Yeah.

David Sacks 4:26 Yeah, the psychology really is different.

Jason Calacanis 4:27 Yeah.

David Sacks 4:27 I mean, we knew that the Fed's behavior influenced valuations and sort of capital markets, but the way that it influences the business outlook and- and how willing companies are to spend money-

Jason Calacanis 4:38 And KOTU is no different. I see they hired Billy McFarland from Fyre Festival to do the food. Um-

David Sacks 4:44 (laughs)

Jason Calacanis 4:44 What is this? I mean-

David Sacks 4:46 Oh. (laughs)

Jason Calacanis 4:46 ... KOTU should be ashamed of themselves. Look at this focaccia.

David Sacks 4:51 (laughs)

Jason Calacanis 4:51 Some vegetable soup with the broth drained out. Super astounding measures.

Chamath Palihapitiya 4:54 That is so wrong. That is so wrong.

Jason Calacanis 4:56 And then look at this. I mean, it looks like a dog went to the bathroom.

Chamath Palihapitiya 5:00 (laughs)

David Sacks 5:00 Brad and I opened our lunchbox and we're like, "Uh, let's, let's go somewhere else. We don't have to-"

Jason Calacanis 5:04 Oh my God. KOTU on a budget. Wow.

David Sacks 5:06 It looked like a, a surprise... That someone had put a surprise in our-

Jason Calacanis 5:10 (laughs)

David Sacks 5:10 ... in our lunchbox.

Jason Calacanis 5:10 It looks like Friedberg's dog, uh, put a surprise in the KOTU lunchbox.

Chamath Palihapitiya 5:15 (laughs)

Jason Calacanis 5:15 Wow. Well, listen, it's good.

Chamath Palihapitiya 5:17 That's not fair.

Jason Calacanis 5:17 KOTU LP should be very happy looking at that $7 lunch that they put out there. I mean-

David Sacks 5:22 Brad, should we tell the SBF story from last year's summit? I mean, last year we talked about the, maybe founders hadn't internalized it yet, but the markets had corrected. But the one founder who was super bullish and optimistic and talking about how he was spraying money all over the place and he was acquiring companies and who was followed around by minions and had everyone like a, a beehive surrounding him and trying to talk to him-

Jason Calacanis 5:46 Oh, yeah.

David Sacks 5:46 ... was SBF.

Jason Calacanis 5:48 (laughs)

David Sacks 5:49 And so I remember, yeah. So I remember thinking like, "Who's gonna be this year's SBF?" You know?

Chamath Palihapitiya 5:54 Mm-hmm.

David Sacks 5:54 "Somebody here is somebody too optimistic."

Jason Calacanis 5:57 We saw somebody with an AI company? With Sam Altman there?

Chamath Palihapitiya 5:59 So basically the KOTU conference went from bullshit to dog shit-

David Sacks 6:02 (laughs)

Jason Calacanis 6:03 (laughs) See, the great part about this is-

David Sacks 6:06 No, I have to, I have no part of this.

Jason Calacanis 6:07 ... you two guys, Brad is like-

David Sacks 6:08 (laughs)

Jason Calacanis 6:08 Look at Brad, he's so uncomfortable. Brad's like, "I like this invite." Sachs is like, "I- I- I got a good invite?"

David Sacks 6:14 I'm so uncomfortable.

Jason Calacanis 6:14 Chamath and I are invited to nothing. We give no shits about Coatue or their budget.

David Sacks 6:20 Oh my god. They do put on a really good event.

Jason Calacanis 6:21 Incredible firm. Incredible firm.

David Sacks 6:22 And I think that the message they gave to founders-

Jason Calacanis 6:25 Thanks for the invite.

David Sacks 6:26 ... this year and last year was great. It was actually really appropriate. Whether founders choose to listen is a different story. But the message they've been conveying is similar to the message we've been conveying for the last year and a half.

Jason Calacanis 6:36 Hey, Chamath, any more, uh, jokes we can make about Coatue since you and I get invited to nothing?

David Sacks 6:40 (laughs)

David Friedberg 6:42 No, I mean, I, I'm not making fun of Coatue. I was just-

Jason Calacanis 6:44 (laughs)

David Friedberg 6:44 ... making fun of the fact that we went from literally-

David Sacks 6:45 (laughs)

Jason Calacanis 6:46 Bullshit with SPF to what looks like dog shit in that picture.

David Sacks 6:50 (laughs)

Jason Calacanis 6:51 Oh.

David Sacks 6:51 By the way, I bet they would invite you if you wanted to go.

David Friedberg 6:54 I'm pretty sure they would send 10 invitations if I, if I even feigned a desire to go.

David Sacks 6:59 (laughs)

David Friedberg 7:00 But I'm in Milan right now.

David Sacks 7:02 The pod's very popular there by the way. I know a lot of people kept-

Jason Calacanis 7:04 I know, you did a focus group.

David Sacks 7:05 Yeah.

Jason Calacanis 7:05 Tell everybody, can we play the focus group or was that... I think we can play it.

David Sacks 7:09 Well, just a fan, a fan came up to me.

Jason Calacanis 7:11 Okay.

David Sacks 7:11 I mean, when I say fan, this is like a very high profile person.

Jason Calacanis 7:15 This woman works at Netflix. She's a VD. Yeah.

David Sacks 7:17 She works at Netflix and her husband is the founder of a startup. She says she's a fan of the pod, so I started asking her questions about it.

Jason Calacanis 7:23 Mm-hmm. A focus group.

David Sacks 7:24 Because, you know, we've been having this debate over the last couple of weeks about what issues we should be talking about. And-

Jason Calacanis 7:31 Mm-hmm.

David Sacks 7:31 ... certain people on the pod never want to discuss politics.

Jason Calacanis 7:35 Oh, oh.

David Sacks 7:35 It's not like I only want to discuss politics. I just don't want to exclude it.

Jason Calacanis 7:39 Hm.

David Sacks 7:39 I think we should just be talking about whatever the biggest issues are in the world in any given week, current events.

Jason Calacanis 7:44 Yeah, I mean listen, hey-

David Sacks 7:45 Whether it's business markets or politics. And she confirmed that was basically right, don't change it. So I, I don't know why we would want to change the formula for the pod at this point.

Jason Calacanis 7:54 Every week, Sachs, there's a group of people who are like, "Stop talking about politics." And then there's another group of people and their feedback is, "Why didn't you talk about Hunter Biden, Ukraine, Ukraine, Putin, China," whatever. And so the docket is the docket, just to let the audience know, not that it's, like, all that big of a deal, it should be fairly obvious, everybody has equal input on the docket. So it's not like anybody, uh, owns the docket. If you wanna talk about something, you talk about something. But some people want to not talk about politics. Some people want to talk about a lot of politics. The Magnificent Seven, for those people who didn't catch the reference, is I think something Cramer's been talking about on CNBC, seven stocks make up the mo- most of the gains this year, Meta, Tesla, NVIDIA, Amazon, Alphabet, Microsoft and Apple.

David Friedberg 8:39 Can I tell you guys my welcome back to Milan story?

Jason Calacanis 8:43 Oh yeah, absolutely.

David Friedberg 8:44 So I'm back in Milan for the summer.

David Sacks 8:46 Honest truth.

Jason Calacanis 8:47 Say hello to Chef, uh, Stefano, and if you could say hi to, um-

David Friedberg 8:50 Stefano, yeah.

Jason Calacanis 8:51 ... all my friends, uh, butlers, everybody-

David Sacks 8:53 I can tell you're back in Italy because the buttons are gone. (laughs)

David Friedberg 8:57 (laughs) I'm working from my office here, but this morning I went to Coppola, which is my stylist, my hairdresser.

Jason Calacanis 9:03 Oh.

David Friedberg 9:04 And the thing is, there's like a hierarchy in the hairdressers and so Roberto, this guy Roberto, he's like the sort of top of the ticket. And Nat has first dibs with Roberto and I have this other guy who's excellent, his name is Joaquino.

Jason Calacanis 9:15 Yes, we brought him here.

David Friedberg 9:16 You guys will see Joaquino in a few weeks. Anyways, the best thing about the haircuts at this place, Coppola, is you get a hair fluffer, which means that as Joaquino or Roberto cuts your hair, a guy comes and he just like, he like does this and then he like, he, he, he's-

Jason Calacanis 9:32 (laughs) You're patting your hair in a very-

David Friedberg 9:34 He, he fluffs your hair for you. He's a hair fluffer.

Jason Calacanis 9:36 Which is a very uncomfortable fluffing.

David Friedberg 9:39 It's a rule that doesn't exist anywhere that will never get disrupted by AI.

David Sacks 9:43 (laughs)

David Friedberg 9:44 And it's incredible.

Jason Calacanis 9:46 Mm-hmm. A hairstyling fluffer.

David Friedberg 9:49 The hair fluffer, the hair fluffer gets like a 50 euro tip. It doesn't matter what he does.

Jason Calacanis 9:52 Wow.

David Friedberg 9:52 It's just like the best. It's just...

David Sacks 9:53 Whoa, whoa, whoa.

Jason Calacanis 9:54 Wow, when Sachs rolls in, you're gonna need two fluffers with that hair.

David Friedberg 9:57 (laughs)

Jason Calacanis 9:57 You're gonna need one on each side. I mean, the tufts are getting crazy.

David Friedberg 10:00 Sachs, tell me if you want Joaquino to cut your hair because, when you come, because he will do it, he'll do an incredible job, and I'll ask him to bring the hair fluffer.

Jason Calacanis 10:08 All right, listen, I, I think we're just going back to the Coatue thing. I know we're in a high interest rate l- um, lunch environment. The HARP environment is hard right now for everybody, but we did get the feedback. Let's play the feedback.

David Sacks 10:19 Hey guys, I'm at the Coatue summit and, uh-

Jason Calacanis 10:22 Hey.

David Sacks 10:22 ... I just met a fan here-

Jason Calacanis 10:24 Lunch was terrible.

David Sacks 10:24 ... who wants to explain the magic of the pod because you guys keep wanting to change things and mess things up, so here we go.

Jason Calacanis 10:31 World War I.

Guest 10:32 Hey everyone. Um, my husband and I really listen to your podcast pretty much religiously and there is this incredible magic that the four of you have, the repartee, the back and forth. It's super informative and you're all sort of rooting for characters almost, so it's almost like a scripted show in some ways. So I have my favorite character, my husband has his favorite character, I won't say who's who because I want you all, the four, to stay together (laughs) and keep doing the show, but it's fantastic and we, we love it.

David Sacks 10:56 And you work at Netflix, right?

Guest 10:57 I work at Netflix. Back in the day I produced shows, so- ... I was just telling David, trying to get that magic, you can put any number of scripts together, but once you get the cast on the floor and actually start getting, you know, that chemistry going, that's when the magic happens and you guys kind of just nailed it. So yeah.

David Sacks 11:13 All right, so that's a professional right there. So stop screwing with the formula, stop protesting-

Guest 11:18 (laughs)

Jason Calacanis 11:19 Oh, protesting. Oh.

Guest 11:22 I mean...

David Sacks 11:23 The camera really does add 10 pounds, doesn't it?

Jason Calacanis 11:26 I take two things away from this, Chamath. Number one, she's much more charismatic on camera than Sachs.

David Friedberg 11:31 (laughs)

Jason Calacanis 11:31 She stole the show. She's delightful. And then two, that sweater. Oh my lord. What, what's the brand?

David Friedberg 11:37 That sweater is fantastic. No, the sweater is fantastic, the shirt's fantastic, I just think they may not have been... They, I don't think the intention was to mesh the two together, but I'm gonna go with it.

Jason Calacanis 11:45 They're not gonna mess with each other?

David Sacks 11:46 Too many buttons for you, Chamath? Too many buttons?

David Friedberg 11:48 No problem, it's like when you have a cream colored sweater, you can't wear a red checkered shirt. It's just not...

Jason Calacanis 11:53 Yeah. Yeah. I agree.

David Sacks 11:54 Red striped.

David Friedberg 11:55 Anyways, it's a...

Jason Calacanis 11:56 Yeah.

David Friedberg 11:58 I mean, it looks like you're wearing an Italian tablecloth under there from a pizzeria combined with like an $8000 sweater. It's great. But the hair, I mean the hair's out of control.

Guest 12:07 I think the hair is fantastic.

Jason Calacanis 12:09 I do. Don't- don't trim.

Guest 12:11 You can't cut the hair.

David Sacks 12:11 (laughs)

Jason Calacanis 12:11 Do not cut the hair.

David Friedberg 12:12 Don't let Jokino touch your hair, bro.

David Sacks 12:14 (laughs) I'll just get a fluff.

Jason Calacanis 12:15 (laughs)

David Sacks 12:15 I'll tell him, "Just fluff it. Don't cut it." (laughs)

Jason Calacanis 12:18 Just fluff it. (laughs) Just fluff it. Don't cut it.

Guest 12:19 Let your winners ride.

Jason Calacanis 12:23 Rain Man, David Sa-

Guest 12:26 I'm going all in.

David Friedberg 12:28 And I said-

Guest 12:28 We open sourced this to the fans and they have just gone crazy with it.

David Friedberg 12:32 Love you Wes.

Jason Calacanis 12:32 It's getting-

Guest 12:33 Queen of quinoa. I'm going all

Guest 12:36 in.

David Friedberg 12:36 Let's talk about the Zuck-Elon cage match.

David Sacks 12:38 Oh, yeah. Oh my God.

Jason Calacanis 12:40 This is a-

David Sacks 12:41 I- I'm a little worried for my friend here.

Jason Calacanis 12:43 Yeah. Zuck looks like he's-

David Sacks 12:45 I don't know if Elon is completely up to date on what kind of shape Zuck is in. Zuck is in tremendous shape. He's got like a dojo at his house. He's been getting training in, you know, mixed martial arts from-

Jason Calacanis 12:57 Jujitsu, from like-

David Sacks 12:57 ... the Gracies or whoever, you know-

Jason Calacanis 12:59 Champions.

David Sacks 12:59 ... Brazilian Jujitsu.

Jason Calacanis 13:00 Yeah.

David Sacks 13:00 He's been competing in events. Zuck is in tremendous shape and, um-

Jason Calacanis 13:05 No joke here.

David Sacks 13:06 Now E- Elon's a big guy. Elon's a monster. But-

Jason Calacanis 13:09 I mean, Elon's got-

David Sacks 13:09 I don't think Elon's not ... Elon's not in this kind of shape. You don't have time to work out like this. I hope you get some sort of Gracie on your team to train you up-

Jason Calacanis 13:18 Definitely.

David Sacks 13:18 ... for this thing. Also, Elon has a neck injury that he got-

Jason Calacanis 13:23 Yeah, from this-

David Sacks 13:23 ... from that sumo thing years ago.

Jason Calacanis 13:25 Yes.

David Sacks 13:26 And he's had to have surgeries on it. So it would really suck if that would get retriggered.

Jason Calacanis 13:30 Here's the thing though, he did take on a sumo wrestler. I w- we were there for that at his birthday party, and he held his own against a giant sumo wrestler. If Elon does get on top of, and do the walrus on top of Zuck, Zuck has no chance.

David Sacks 13:45 (laughs)

Jason Calacanis 13:45 He will get walrused.

David Friedberg 13:47 You're telling me what he should do is abandon the mission to Mars-

Jason Calacanis 13:54 Yes.

David Sacks 13:55 (laughs)

David Friedberg 13:55 ... stop electrifying the world-

David Sacks 13:58 (laughs)

Jason Calacanis 13:58 Totally.

David Friedberg 13:58 ... and start free internet movement?

Jason Calacanis 14:01 There's free speech around the world. Yeah.

David Friedberg 14:02 So he can beat up Zuck?

David Sacks 14:04 (laughs)

Jason Calacanis 14:04 I mean if you were to put that to a vote-

David Friedberg 14:07 This is the dumbest-

Jason Calacanis 14:07 ... I think most people would put beating up Zuck as number one. (laughs)

David Friedberg 14:11 This is the dumbest fucking idea I've ever heard in my life.

Jason Calacanis 14:14 Oh my God.

Guest 14:15 I love the banter between the two of them. And let's just say we can all agree out of all of the companies, right, there's only one contender to Zuck getting fit, right, getting that company fit, getting himself fit?

Jason Calacanis 14:28 Hm.

Guest 14:28 Is Elon.

Jason Calacanis 14:29 Yeah.

Guest 14:29 75%, 80% of the people gone and product velocity is on fire at Twitter. So this is, this should be a cage match between the two who have defined this era of getting fit.

Jason Calacanis 14:42 All right, let's get to the docket here.

David Friedberg 14:44 What the fuck are you talking about?

David Sacks 14:46 (laughs)

Jason Calacanis 14:46 He's using the fitness.

David Friedberg 14:47 The guy burned a quarter trillion dollars and then found a way to stop it.

Guest 14:52 Oh, there you go.

David Sacks 14:53 (laughs)

David Friedberg 14:53 That's very different than firing on all cylinders in three companies.

Guest 14:57 I didn't say he was firing on all cylinders.

David Friedberg 14:59 And by the way, I am the only one of anybody I think that knows them both well.

Guest 15:03 Put money on it.

David Friedberg 15:03 Oh, maybe Sax.

David Sacks 15:04 Well, it's kind of like, you know, if you've got like a faucet running that's spilling over the sink and then you turn it off.

David Friedberg 15:10 Yeah.

David Sacks 15:10 That doesn't make you a firefighter.

David Friedberg 15:12 (laughs)

David Sacks 15:12 (laughs)

Jason Calacanis 15:12 Exactly.

Guest 15:13 (laughs)

David Sacks 15:14 (laughs)

Jason Calacanis 15:14 Yeah, it doesn't make you a plumber.

David Sacks 15:15 (laughs)

David Friedberg 15:16 You know, there's a feature of a bathtub-

Jason Calacanis 15:19 Now I gotta turn right and stop spending money on... (laughs)

David Sacks 15:20 (laughs)

David Friedberg 15:20 There's this feature of a bathtub where when you get into it and the water gushes so violently over the, over the outside of it-

Jason Calacanis 15:28 Yeah.

David Friedberg 15:28 And then there's a drain at the top as well as the bottom. And so then eventually (laughs) it just stops.

Jason Calacanis 15:32 Yes. You could unclog the drain.

Guest 15:34 There you go. The overflow.

David Sacks 15:34 Yeah. Yeah, but Chamath raised a good point, which is, look, Elon's a big guy. If he got training in MMA-

David Friedberg 15:40 Oh.

David Sacks 15:40 ... I'm sure he'd do fine. But we don't want Elon spending two hours a day for the next six months or whatever, 'cause Zuck's been doing MMA I guess for a while now.

Jason Calacanis 15:48 Couple years, yeah.

David Sacks 15:48 Maybe years.

Jason Calacanis 15:49 He's into it.

David Sacks 15:49 Yeah.

Jason Calacanis 15:49 All

Jason Calacanis 15:50 right. Well, listen, there's been some updates this, uh, war between Russia and the Ukraine, or the invasion of Ukraine by Russia. You wrote a piece abo- about it in, what was it, The Federalist I think this week? Titled The Truth About Ukraine's Falling- Failing Counteroffensive (and the Peace That Could Have Been) . Why don't you give us an overview of what you wrote and what your take is on the state of affairs right now?

David Sacks 16:17 Well, the- the thing that's been going on since around June 4th or June 5th is this long awaited Ukrainian counteroffensive. This has been touted for a long time, is this is gonna reverse Russian territorial gains. Uh, Ukraine's gonna use all of this modern Western equipment, these Leopard Tanks that have come from Germany, and Bradleys from the United States, and a lot of other NATO or American equipment, and they're gonna push Russia out of their country. This has been told to us since the fall of last year, since that sort of Kharkiv counteroffensive produced some Ukrainian territorial gains. You've had former generals like Ben Hodges and Petraeus say that this counteroffensive is gonna be highly successful. Where it stands right now is that around 18 or 19 days into it, it has produced minimal gains. In fact, it's been somewhat of a disaster. It's hard to get conclusive estimates of personnel and material losses, but I think as many as a quarter of the tanks and armored vehicles have already been destroyed, and the casualties may be as high as around 10,000 out of an army that was trained up for this purpose of around 50,000. So, so far it has not gone well. The- the Ukrainian army hasn't even made it to the first line of defense. So what the Russians did is they created three fortified lines or belts of defense, and then in front of that is what they call a gray zone or security zone or crumple zone, which is an area they can test, but it's not technically a fortified line. The Ukrainians are still in that sort of gray zone. They are not punching through. They are not even at the first Russian fortified line. To give you some idea of what's involved here, the Russians have these obstacles. There's basically trenches that have been dug, there's-... ditches that would stop tanks or, sort of, force 'em to go in a certain direction, steer the traffic. There's extensive minefields. They've got these things called Dragon Teeth, which are concrete bollards that stop tanks or move them in a certain direction. Then the Russians have massive amounts of artillery. They've got infantry on the ground that help spot the artillery. And if all of that doesn't take out these Ukrainian tanks, they've got these attack helicopters that come in, almost uncontested, because at this point it doesn't look like the Ukrainians have any air defense. And they've also got fixed-wing aircraft that are capable of dropping precision munitions. So, it really seems like the Russians have fixed a lot of the problems that they had last fall in their army and so far, it seems like this counteroffensive's not going anywhere.

Jason Calacanis 19:04 We're 16 months into this, Chamath, and clearly fatigue is setting in. It's not commanding the news cycle here in America and on a percentage basis, even the Neocons and Republicans are dropping their support for this at a pretty precipitous rate, which, uh, is predictable. Americans don't want to be in forever wars. We all know that. So, what's your take on how this winds up, especially in relation to, A, our budget, and B, this upcoming election, which this seems to be, will be a major issue if this isn't resolved by the time we get into the '24 election cycle?

David Friedberg 19:44 As part of answering this, I have a, I have a question for Sax. But is it true that there was a ceasefire? Like, Putin had a press conference where he showed a document that he said-

David Sacks 19:53 Yes.

David Friedberg 19:53 ... was a, was a ceasefire that then the United States apparently sent Boris Johnson over to Russia-Ukraine to basically blow it, blow up the agreement?

David Sacks 20:01 Yes.

Jason Calacanis 20:01 Is that true?

David Sacks 20:02 This is a-

David Friedberg 20:02 This is a-

David Sacks 20:02 Yes, this is formally correct.

Jason Calacanis 20:04 This wasn't a ceasefire. This was a peace deal before the war started, correct?

David Sacks 20:08 No, it was after.

Jason Calacanis 20:09 Oh, this was a claim?

David Sacks 20:10 So, there were rounds of negotiation before-

Jason Calacanis 20:12 Yeah.

David Sacks 20:12 ... the war. Notably, there was a round of diplomacy between Blinken and Lavrov in January, the month before the war, where Blinken said that we cannot compromise on NATO's open door policy, that that sort of diplomacy fell apart. But then after the war, there was a meeting of the Russian delegation and Ukrainian delegation in Istanbul under the supervision of, of Erdoğan and Turkey. Naftali Bennett also had a similar process. In both cases, the West rejected a peace deal.

Jason Calacanis 20:43 Allegedly. We don't, this is Putin we're talking about, right? Like, nobody knows. Yeah.

David Sacks 20:46 Let me, let me come back. Well, hold on a second. Let me come back to the evidence for it in a second.

Jason Calacanis 20:49 Yeah.

David Sacks 20:49 But what the deal would have provided is that the Russians would move back to pre-war lines if the Ukrainians would agree not to become a member of NATO. However, the Ukrainians could still receive specified security guarantees from the West. That was the deal. Now-

Jason Calacanis 21:06 Allegedly.

David Sacks 21:07 Well, we have now multiple data points. You've got Naftali Bennett saying that he thought a deal was taken along these lines, but it was rejected by the West. You also have now Putin showing the very document which was signed by the Ukrainian delegation, so this was-

Jason Calacanis 21:22 But he flashed the document, right? Nobody has this document.

David Sacks 21:24 Hold on a second. It hasn't been released yet.

Jason Calacanis 21:26 Yes.

David Sacks 21:26 I hope the Russian government releases it for the purpose of history so we can inspect it, but nobody contests that this document is real. Remember, if he's just making this up, you would think that Erdoğan would basically come forward and say, "No, this is fake." There's too many people who are in that room who'd be able to say this document is fake. No one has done that. So, I think there's every reason to believe this document is real. Now, it is not a final agreement. It appears to be a preliminary agreement or an outline, but the outline is that Russia is saying, "We will move back to pre-war lines if you agree not to become part of NATO." And that deal was rejected when Boris Johnson flew into Kyiv and basically told the Ukrainians, "We do not want to make a deal with Putin. We wanna pressure Putin." And the source for that is not the Russians. The source for that is a Ukrainian publication called, uh, Ukrainian Pravda, UP, and they ran an article in May of 2022 that I can put on the screen, and i- is the source for saying that Boris Johnson came in and told Zelenskyy, "We do not want to make a peace deal. We, the West, are not ready to make a deal with Putin. We want you to fight Putin or pressure Putin, and if you do, we will give you advanced weapon systems." And that is when the deal fell apart, if you look at the timing-

Jason Calacanis 22:39 Allegedly.

David Sacks 22:39 ... of it.

Jason Calacanis 22:39 Yes, allegedly.

David Sacks 22:40 This is, this happened on-

Jason Calacanis 22:40 None of this has been sour- this has been lightly sourced here, so let's just be clear.

David Sacks 22:43 No, no, no, no. That you have to consider the source here. This is a pro-Ukrainian publication writing in May of 2022. Now, the tone of the article and what they basically say in this article is that Zelenskyy accepted Boris Johnson's offer. In other words, he took the gamble. And at this point in time, you've got to remember, this is two months after the war started, it looked like the Ukrainians were doing well. So UP was essentially praising Zelenskyy in this article for taking the West up on this deal to pressure Putin rather than make peace. Now, a year later, it looks like this gamble was a disaster.

Jason Calacanis 23:18 Yeah.

David Friedberg 23:19 Yeah.

David Sacks 23:19 And so that is the real conclusion here. A deal was available, but the West chose not to take it. By the way, Fiona Hill, who is a Russia hawk and you could almost put her, I'd say, Neocon adjacent, has basically said that this type of deal was available. The West did not want this deal.

David Friedberg 23:38 I think, Jason, maybe to give you an answer, my thought is that this week was a very bad week for establishment politics and institutions. Because on the one hand, if you take the Russia incident in the Ukraine war, what you saw was that there were ample numbers of off-ramps that we chose, frankly, to not take so that we could engage our enemy in some long, drawn-out war on the hopes that it just depletes their resources. That's kind of rolling the dice, I think, in a very dangerous way. I think this week we also saw some published stuff on COVID and the COVID vaccine, which also debunked-... a lot of widely held truths and it turned out that folks that may have been conspiracy theorists, quote unquote, were right there as well. So I think it's just an uncomfortable set of facts that, again, just reinforce that if you're not really thinking for yourself, you're not gonna see the totality of what's actually going on. I think with respect to Russia/Ukraine, everybody has moved on and so, sadly, the only people that are left over are the people that have to fight the war, who are still separated from their families. There's the people that are dying. There was an article, I think today, they recruit prisoners, right? So, obviously some of the prisoners that Russia uses are still pretty crazy. That person went on some rampage inside of a train, killed a couple people, stabbed some other people. There were just pictures of blood everywhere. I mean, this is just a horrible situation and it's still not clear to me why we didn't take the off ramp.

Jason Calacanis 25:16 If, in fact, it's real. So I just wanna keep putting that disclaimer out there because Putin flashing a document-

David Sacks 25:21 What more proof do you need?

Jason Calacanis 25:21 ... doesn't make all this true. Uh, it doesn't mean it's not true, so I would-

David Sacks 25:24 What about Fiona Hill? What about Ukrainian Pravda?

David Friedberg 25:25 Well, Jason, I would say, I would say the following-

David Sacks 25:26 What about Naftali Bennett?

Jason Calacanis 25:27 I, I am just being clear here-

David Sacks 25:30 How many more confirmatory data points do you need?

David Friedberg 25:32 ... that none of this is confirmed. I would say-

David Sacks 25:33 What are you talking about? Naftali Bennett confirmed it. What incentive does the Israeli, former Israeli leader have to lie about this?

David Friedberg 25:39 Here's what I would say, Jason. I think that something like that is so profoundly important that if it were not true, I think it would've been very important for the powers that be to discredit it almost immediately so that they didn't have to look like they were warmongering unnecessarily.

Chamath Palihapitiya 26:01 Can I also up level and connect, uh, this point about the establishment? Because I think there's been a lot of pushback to even challenging the status quo, even having a conversation about Ukraine or having a conversation about COVID. And I think if there's one thing this pod represents, the fight going on at Twitter represents, is the need to have this conversation. If we look at the wars the US has engaged in since September 11th, it's estimated three to four million people have died in Iraq, Pakistan, Afghanistan. We've spent $8 trillion. Inflation adjusted, we spent $4 trillion in World War II. Eight trillion represents 25% of our entire national debt. And I've yet to meet a single parent who said to me, "I care so much about this Ukraine situation, I would be willing to put my children in harm's way to fight for the defense of Europe." Okay? So those data points tell me, at a very minimum, we need more of this discussion, more of this debate, not less.

David Friedberg 27:16 The idea that, that we could be tiptoeing closer and closer to some land war in Europe unnecessarily, and I think the bigger issue is, and you can't trust what you're being told. And I think that that's what's very problematic.

Jason Calacanis 27:29 That is a bigger picture. And, and just so we're clear here, I'm not saying I'm either side of this. I'm just pointing out that this is all still very thinly sourced.

David Sacks 27:38 No, it's not.

Jason Calacanis 27:39 If you... Until the West confirms any of this, I think-

David Friedberg 27:41 What do you expect the West to do? You expect the State Department to issue a press release saying, "Yep, we fucked up. It's on me."

David Sacks 27:46 (laughs)

Jason Calacanis 27:46 My, my theory-

David Sacks 27:47 Well, what are they gonna offer?

David Friedberg 27:48 They're liars.

Jason Calacanis 27:48 What do you think they're gonna do? My, my theory from the beginning-

David Sacks 27:50 They're gonna keep lying.

Jason Calacanis 27:50 ... has been, I, and I have been very clear on this podcast, my theory has been, since the beginning, they want to deplete Russia and they want to deplete their army and their capa-

David Friedberg 27:59 I'm not debating that.

Jason Calacanis 27:59 ... capabilities and have regime change and Putin. I'm not saying I'm for that, just for the people who are-

David Sacks 28:04 Yes, you were.

David Friedberg 28:04 I'm not, I'm not de- I'm not debating that.

Jason Calacanis 28:06 No, no, no, no, no.

David Sacks 28:06 You said it would "ankle Putin." That was the crude language you used.

Jason Calacanis 28:08 That is what they, that is what they plan on doing. Yes, I think that's what they're doing and I think they-

David Sacks 28:12 Well, Lloyd Austin, our secretary of defense, said that our purpose was to weaken Russia-

Jason Calacanis 28:16 Yes.

David Sacks 28:16 ... so to knock it out of the race of the great powers.

Jason Calacanis 28:18 I agree that's what their purpose is, yes.

David Sacks 28:19 But I think-

Jason Calacanis 28:19 So I think they want regime change, yes.

David Sacks 28:21 That's what Boris Johnson went to Kiev and said, "We wanna pressure Putin, not make a deal with him."

Jason Calacanis 28:24 Yes.

David Sacks 28:24 So they courted this war. They w- they prefer-

Jason Calacanis 28:26 And that's been my theory since the beginning. To be clear-

David Sacks 28:28 ... to fight... They prefer to fight a proxy war of choice-

Jason Calacanis 28:31 And, and I'm not endorsing that.

David Sacks 28:34 ... that was easily avoidable-

Jason Calacanis 28:35 I'm not endorsing that.

David Sacks 28:35 ... rather than take NATO expansion off the table.

David Friedberg 28:36 This is not about you, Jason. I'm asking you a simple question, which is why-

Jason Calacanis 28:38 No, no, but Sachs just said it was. But Sachs just said it was, Chamath. So I'm just clearing up the record.

David Friedberg 28:42 He did not say that. He did not say that.

Jason Calacanis 28:43 He just did. He said that was your position and I'm correcting him.

David Sacks 28:44 Okay, fair enough, Jason.

Jason Calacanis 28:45 I have the right to correct your opinion. I, that was not my position.

David Sacks 28:48 Okay, fine. Fine.

Jason Calacanis 28:48 I said that's my theory.

David Sacks 28:49 I actually agree with you if-

Jason Calacanis 28:50 Yeah.

David Sacks 28:50 ... if you're saying that that was our government's objective, which was-

Jason Calacanis 28:53 Yes.

David Sacks 28:54 ... to weaken Putin, I agree with you. They've chose to fight an optional proxy war of choice that was easily avoidable if they'd just taken NATO expansion off the table because they thought it would weaken Putin. But here's the rub on this. It has not weakened Putin. It has weakened the United States and our allies. Any way you wanna look at this thing. Look at just the weapons and munitions. So we are out of 155 millimeter artillery shells. We cannot produce enough. This is the crazy thing. We spend $800 billion a year plus on the Pentagon and our national defense. We're out of ammo. I mean, we must be getting so royally ripped off by the military-industrial complex. Okay, we cannot produce ammo fast enough. That's why Ukraine's losing this war. The balance of artillery favors Russia. Russia is basically using about 20,000 shells a day. The Ukrainians are using somewhere between 3,000 and 6,000. We are out of ammo. We cannot produce enough.

Jason Calacanis 29:49 And this, um, actually dovetails nicely with another story this week. There is a journalist named Matt Yaglicious? Is that how you pronounce his name?

David Sacks 29:58 Yaglicious, yeah.

Jason Calacanis 30:00 Yaglicious? And he said... I mean, (laughs) he literally said the quiet part out loud, and I'll just quote, 'cause he was criticizing you and Chamath, uh, for hosting RFK. We'll get to that in a second. But he basically said, "This is actually a really good idea for us. Basically, NATO equipment plus Ukrainian lives are being traded for Russian equipment and Russian lives, which leaves NATO coming out ahead."That's doubly true because NATO is much richer than Russia. So we win a long-term game of everyone explode their weapons as fast as they can, make them. Again, though, what makes that really true is NATO material is killing Russian soldiers while Russian materiel is killing Ukrainian soldiers. That's a deal in our favor. (laughs) I mean, that is as cynical-

David Sacks 30:43 To be clear, he wrote that-

Jason Calacanis 30:44 ... of a summary of that. Yeah.

David Sacks 30:45 Yeah. He wrote that last year-

Jason Calacanis 30:47 Yeah.

David Sacks 30:47 ... in defense of the war. Basically, like all the neocons, he's sort of an establishment-approved intellectual. They think he's smart. I think he's really foolish. He basically wants to fight to the last Ukrainian here for the sole purpose of blowing up Russia's stockpiles. The reason this is so dumb is Russia can always make more. Those lives aren't coming back, but they can always produce more artillery and more weapons. And in fact, the Russian war machine is now ramping up to full production, okay? They are ramping up the number of people in their army. I think it's estimated that by the end of the year, they're gonna have 750,000 men under arms. They've ramped up artillery shells production. They were at something like one and a half million at the beginning of the war. We were only producing 14,000 artillery shells a month, mostly for training purposes in the United States. We've since ramped that up to 20,000, but that's still massively trails what the Russians can do. And they're trying to-

Jason Calacanis 31:36 That's, that's-

David Sacks 31:36 Hold on. They're trying to ramp it up to 90,000 a month, but that's gonna take till 2028 because, you know, it takes time to build. You gotta build up new factories, new production lines. You gotta issue contracts to suppliers or, or vendors. It takes time to do this. But the Russians basically-

Jason Calacanis 31:51 Yeah. Back to Brad's point-

David Sacks 31:51 ... have ramped up their war machine.

Jason Calacanis 31:52 Mm-hmm.

David Sacks 31:53 And then the other thing that's happened is that Russia and China have entered a de facto alliance, and including Iran. So you now have the cementing of this giant alliance in Asia between China, Russia, and Iran. They're sharing equipment now together. Iran is producing drones for Russia. Russia is now gonna be giving advanced fighter jets to Iran. So this idea that this war has made the West stronger is depleting the West over an objective we didn't need to fight. This, uh, war was easily avoidable, and we have now created, I think, the most fearsome opponent that America has ever faced. We have never faced a adversary with a combined manufacturing capacity and raw materials of China, Russia, and Iran. If we were to get in a war, a new world war against this sort of new axis, we could lose. They actually have more manufacturing capacity to produce weapons of war and munitions and ammo than the United States does.

Jason Calacanis 32:55 China has been clear that they're not gonna provide weapons to, to Russia, a- and so I'm, I'm not sure that that alliance is exactly accurate.

David Sacks 33:03 They've given us no such assurance.

Jason Calacanis 33:05 Yeah.

David Sacks 33:05 All they've said is they haven't done it yet.

Jason Calacanis 33:07 It's a theoretical thing that you're talking about here that could be very serious. I think your point, and this is to Brad's point, we should be having a very thoughtful discussion here because if China did pick Russia, which they haven't, and they went to war-

David Sacks 33:18 They have.

Jason Calacanis 33:18 ... it would be war with, wait, never mind that. They said explicitly to us that they're not going to, but let's go to COVID.

David Sacks 33:21 They're, they're, they're one of the many, one of the, one of the, one of the many neocon... Well, we should talk about the China relationship, actually.

Jason Calacanis 33:24 Yeah.

Jason Calacanis 33:25 Okay. Blinken just went to China, and this was the first trip for an American secretary of state since 2018. Obviously, things have been strained with the spy balloon, uh, and the visits to Taiwa- Taiwan. Blinken gave some basic goals for this engagement with China, the fentanyl problem, some detained Americans, and protecting US citizens working in China. Those were kind of the easy checkboxes. But they wanted to create also an open line of communication between our militaries, which China wasn't super stoked on or wouldn't agree to.

David Friedberg 34:06 Tony did a great job.

Jason Calacanis 34:08 Yeah.

David Friedberg 34:09 Okay? I think what's really disappointing is that while Tony's over there doing this hard work, which is, must be tough to do because it must have been a little bit like dancing on eggshells a little bit, right? He had to be-

Jason Calacanis 34:20 It's intense, yeah.

David Friedberg 34:21 He had to be very thoughtful, very measured. But as far as I could tell, he did a fabulous job. Now, full disclosure, he's a friend of mine, so maybe I'm biased. But then over here, Biden at some mid-level fundraiser in California is calling Xi a dictator. How hard must it be for you to try to do your job when your boss is just, like, completely undisciplined? Like, h- and here's the problem with that, is that if the United States actually thought that Xi was a dictator, do you think that a mid-level fundraiser that we were all invited to in Northern California that none of us said yes to is the place to announce a foreign policy shift like that? Absolutely not. So it just means that, again, there's just more evidence about Biden being very undisciplined. Now, again, that could be an age issue. It could be a mental acuity issue. We don't know because we're not given a chance to really prosecute that problem. Meanwhile, Tony's there trying to do the best job he can, and the sands shift underneath him. Thank God he was able to get the trip done before this thing happened, is what I think, but that gaffe was a very big gaffe and a very big problem, I think, because whatever goodwill he built up was practically flushed down the toilet if you saw the reaction from the Chinese, which was to be deeply offended. And it makes no sense to poke-

Jason Calacanis 35:38 It's no different than when... Yeah.

David Friedberg 35:39 When he went to see MBS and they had to negotiate a fist bump versus a handshake. Like, what is all of this either unplanned or undisciplined theater? Why are we engaging in any of this stuff? It doesn't make any sense to me.

Jason Calacanis 35:52 He's been known... Chamath, he, Joe, Joe Biden's always been known for being a liability in terms of these statements. When he worked for Obama and he was the VP, he also said things, you know, he shot from the hip a lot. You should not be calling him a dictator when you're trying to do this critical work. It's a stupid move. I think everybody can agree. You were gonna say something, Brad?

Guest 36:10 Yeah, I was just gonna say, you know, kind of market reaction going in. So the K Web, the Chinese index, was up about 20% heading into these series of meetings. Now, notably, Blinken was not scheduled to have a meeting with Xi.

Chamath Palihapitiya 36:26 ... and so what happened is on day one, there's a meeting with the foreign minister, right? And it seems that there was some positive trend lines coming out of these first two meetings with the top diplomat, with the foreign minister, which led to the meeting. And notably in the meeting, he did say, "The United States has not changed its policy on Taiwan. We don't support Taiwanese independence." Now, the market reaction post-visit was down 10%, and I think this is owing to what Chamath said, that people felt like, "Maybe we took a step forward here, that we at least had a meeting," but then it was, uh, another step back. And so I think where we sit at the moment is there're probably gonna be some follow-on meetings coming out of this. This was not, you know, a, a ba- a, a path back to where we were, but I think it was a stabilizing moment and, you know, again, we were just at the East Meets West conference where there were a lot of Chinese CEOs and founders who were there, and I think the idea there was, like, things are stable, like, not getting worse. And by the way, six months ago, there was a real concern that things were deteriorating quickly. So I think it's, you know, you can see something constructive coming out of this.

Jason Calacanis 37:37 Not getting worse was how I felt coming out of it, and then Biden then makes it worse. It's a really, it is a, I agree, it's just a stupid gaffe.

David Sacks 37:45 Let me tell you about some of the reporting from the, the Chinese side. So after these diplomatic events, and, and you're right, Blinken met with Wang Yi for seven hours then he got in an audience with Xi Jinping. They do these readouts where each side basically produces a public summary of the meeting. In the Chinese readout, they said that US/Chinese relationships are at the lowest point they've ever been. I mean, since, I guess, diplomatic relations were kind of reestablished under Nixon. So that from the Chinese standpoint, they believe that relationships are at the worst they've ever been. Moreover, the US sought to put Ukraine on the agenda. The Chinese response to that was, "We are not interested in discussing our relationship with Russia. That is none of your business." So this idea, there's been this neocon fantasy that somehow China would help us in this war between Russia and Ukraine, and I've said all along that the last thing China wants is for neocons to achieve their objectives with respect to Russia, because then China alone will be in the gun sights of US hawks. So China will do what it has to do to support and even prop up Russia if they have to. Remember, China and, and Russia, and specifically Xi and Putin, they are the two leaders who've met with each other more often than any other leader, and they've called each other their best friends, or most, I think the, the language they used ver- was "most bosom-"

Jason Calacanis 39:14 Besties?

David Sacks 39:14 Well, most bosom friends was what they called it.

Jason Calacanis 39:17 Okay. That's a little weird.

David Sacks 39:18 Uh, bosom buddies, yeah. But, yeah.

Jason Calacanis 39:19 Bosom Buddy, a great TV show, good call.

David Sacks 39:21 Yeah, exactly.

Jason Calacanis 39:21 Just to give people exactly what happened, Biden when he was at this campaign fundraiser in NorCal that, uh, again, you know, we probably invited two people on the show, he was talking about the military Chinese spy balloon and he said Xi got very upset, quote, that this was "a great embarrassment for dictators when they don't know what happened." And he continued to say that Xi didn't know the balloon had been over the continental US and was off course near Alaska. And this is the kind of thing where he's basically saying Xi is stupid or, you know, whatever, uh, uh, or there's some level of incompetence over there. It's exactly the wrong message you wanna send, calling him a dictator and calling him stupid and saying he was embarrassed. Like, why would you provoke that to raise money or to be a tough guy? It makes no sense. I mean, it sounds like Trump's version of foreign relations. (laughs)

David Sacks 40:08 From the Chinese standpoint, they thought the whole balloon thing was a travesty. I mean, I, I don't know what the truth of it is, but they feel like it was just this continuous, uh, drumming up of outrage on the American side against China, and they wanted to put that behind us-

Jason Calacanis 40:24 Mm-hmm.

David Sacks 40:24 ... in terms of the relationship. I heard Blinken interviewed about this. Chamath, I agree with you. I have no complaint with Blinken in terms of how he handled this meeting.

Jason Calacanis 40:33 Tony did a great job.

David Sacks 40:33 I have a complaint about how, I, I have a complaint-

Jason Calacanis 40:35 C, and plus-

David Sacks 40:36 ... about how he's handled Moscow but, but not Beijing. But they wanted to put this balloon business behind them. My guess, I've always said that it never made sense to me that the Chinese would use such a ham-fisted way of conducting espionage to fly a bl- deliberately fly a balloon over the US. It was never-

Jason Calacanis 40:54 Which was obviously not deliberate. They went off course, yeah.

David Sacks 40:54 It never made sense to me.

Jason Calacanis 40:56 Yeah. It would be off course.

David Sacks 40:57 And, and, and it, it became this cause celeb in the US, and I think the Chinese, at a minimum, wanted to put it behind us, and then Biden reopened the issue.

Jason Calacanis 41:05 Like the submarine tragedy, the balloon is, like, made for network television because it's a live event where you can put live cameras up and you can cover it 24/7. It's just, like Trump-

David Sacks 41:16 So we better be really careful-

Jason Calacanis 41:17 ... and with the submarine, it's just for the media c-

David Sacks 41:18 Yeah.

Jason Calacanis 41:18 It's for the media. It's catnip for them.

David Sacks 41:20 We have to be very careful now, I think, in our relation with China, because again, you now have this Asiatic alliance between China, Russia, and, and Iran. It is the most capable, let's say, adversary the United States has ever faced. Remember that when we faced the Soviet Union, their economy was never bigger than one third the US economy, the Soviet Bloc versus the Western Bloc. The Chinese economy, on a purchasing power parity basis, is roughly the same size as the US and they've got more manufacturing capacity. So if you think about the type of manufacturing capacity United States had during World War II, that now belongs to China, not the US. We have hollowed out-

Jason Calacanis 41:56 I just don't understand why-

David Sacks 41:57 ... our manufacturing.

Jason Calacanis 41:58 ... why our foreign policy... Brad, uh, I'll bring you into this discussion, why our foreign policy isn't being driven by some of the things that we could do together to collaborate on. Like, we have global warming, we have, you know, issues on this planet that we could collaborate on, and it seems like we're spending no time on those issues and saber rattling. Cuba, another example. Why can't we set a goal for the United States to normalize relations with Cuba and get them on our side since they are the equivalent of, let's say, Ukraine, David?... to America. You, you brought up-

David Sacks 42:30 Yeah.

Jason Calacanis 42:30 ... that comparison. Why don't we make peace with Cuba? Why can't we have a peace-based foreign policy where we're trying to build bridges? God, Cuba and United States could do amazing things together and we should be trying to win that relationship instead of living 50 years in the past over it. I don't, I'm, I'm not sure.

David Sacks 42:48 There was legitimate outrage over the past week because we discovered that China was planning on ... They already have an intelligence outpost in Cuba-

Jason Calacanis 42:55 Listening, listening-

David Sacks 42:55 Listening outpost. But also they were thinking about doing training of troops in Cuba.

Jason Calacanis 43:02 (laughs)

David Sacks 43:02 And that would be a violation of the Monroe Doctrine, and we should basically get our backs up over that. The Monroe Doctrine states that no distant great power can bring troops, weapons, or bases into the Western hemisphere. U- United States spent over a hundred years basically enforcing the Monroe Doctrine. It would greatly diminish US security if we allowed any foreign great power to have troops in the Western hemisphere. So, we deserve to have our horns out over that. The problem is that we have our horns out over everything, and so we're not really taken seriously. We've cried wolf so many times, I don't think we're really-

Jason Calacanis 43:37 Mm.

David Sacks 43:37 ... taken seriously by the Chinese on this. And this should be a teaching moment to the foreign policy establishment because this is Russia's objection. Russia's objection is to having American troops, weapons, and bases directly on their border. This is our objection to what China is seeking to do in Cuba.

Jason Calacanis 43:54 Okay. Brad, do you wanna add something to that or can we move to COVID?

Chamath Palihapitiya 43:56 Well, just real quickly I would say-

Jason Calacanis 43:58 Yeah.

Chamath Palihapitiya 43:58 ... there's a real appetite in the business community to be engaged. This idea that we're going to decouple the world, never have to deal with these folks, right, is just a farce. ByteDance bought a billion dollars worth of N- NVIDIA chips, announced this week, right? Like, like, the world is entangled and I think we would be better off having our political and business leaders in more sync over how to achieve this long-ter- term safety and prosperity as opposed to what feels like a disjointed foreign policy relative to the global reality around AI and, and, and what's happening on the business front.

David Friedberg 44:37 I agree.

Jason Calacanis 44:38 Well said. Yeah. And I mean, it, it's just so obvious. Why can't we be collaborating on stuff? And we see, uh, when you and I made our trip to the UAE, and then we see the Saudis, you know, bringing movies back. We have certain regions we're doing a pretty good job of engaging with. Engagement, you know, reasonable engagement is a good idea.

David Friedberg 44:55 It's because, and I think R- RFK has said this, we have created a very dangerous revolving door between our most critical institutions and the largest industrial companies in the United States. And that revolving door creates all kinds of conflicts of interest, and those things get sorted out via revenue and dollars and profits.

Jason Calacanis 45:19 Incentives.

David Friedberg 45:20 And so those incentives will drive us, if it's the military-industrial complex, to go to war. And you're seeing that. It'll complicate our foreign policy. So this is why I've always said the most important thing that we're doing is something that the military-industrial complex cannot stop, which is our energy independence. And when you have energy independence and abundant costless energy, I do think that the biggest thing you get is this peace dividend. You stop fighting these wars, you become much more rational abroad, and you're like, "Okay, I don't need to fight with all of these people because, you know, things are so great within our borders."

Jason Calacanis 45:53 You're so right, Chamath, 'cause we actually have stopped those wars, and now we've created two other ones, Russia, Ukraine-

David Friedberg 45:59 We can't help ourselves.

Jason Calacanis 45:59 ... and Taiwan and China. What's that?

David Friedberg 46:02 We can't help ourselves and we'll use the scarcity of commodities as a boogeyman to basically incentivize us to go in these foreign misadventures. And it really has to stop.

David Sacks 46:13 By the way, just two quick points on that. On Taiwan, there's an election next year and it looks like, right now, that the pro-China party might actually take power. Right now, the party that's in power is more of a pro-Western party. And the reason I think is that the Taiwanese are looking at what's going on in Ukraine and they're looking at the corpses of the Ukrainian youth pile up and they're thinking maybe it's not such a great idea to be an American proxy state. Or in the words of Henry Kissinger, he once quipped that it's dangerous to be an American enemy, but it's absolutely fatal to be an American friend. I think that this war may be backfiring in terms of the incentives it's creating around Taiwan. Remember Biden said that this war would basically help protect Taiwan by deterring China. It might actually deter Taiwan from opposing China. So we'll have to see how that plays out.

David Friedberg 47:04 All an able-bodied person in Taiwan of voting age needs to do is read the newspaper and understand that in the last two and a half years, we've essentially started a multi-trillion dollar program to de-lever ourselves from all the critical resources that China and Taiwan gives us. And so if you're a Taiwanese citizen, the writing is unfortunately on the wall, which is that we are giving ourselves the optionality to not have to do anything. So to your point, David, if you're a rational thinking Taiwanese person, unfortunately you're forced to be in a position where you may have to hedge your bets. And if the United States can basically have a chip supply that comes from Europe and Mexico, now all of a sudden the criticality of TSMC goes away. To wit, I published this tweet yesterday about Buffet and his trades in Japan, right? He bought these five trading companies. And so just a really novel carry trade that I've really fallen in love with just understanding it. But the coda to that is that when he did this and going along Japan, what he actually also did was he de-leveraged himself from China. He had a long position in TSMC and he said, "I'm out." And when they asked him why he sold TSMC, he said, "This is a very complicated thing." And he basically said that it's not a bet that's worth making. And I think underneath that, if I had to guess what he's trying to say about Taiwan indirectly through his sale of TSMC is the odds are that we are not going to get into a land war over there, which means that that asset ...

Guest 48:34 ... and its equity value is in danger and I don't want to own it. And I think that that's a very clinical summation of his rational action. So, to your point-

Jason Calacanis 48:44 Well, here's what Blinken said-

Guest 48:45 ... people speak with their dollars or their feet.

Jason Calacanis 48:46 ... who I think this is very important. You know, the One China Policy says Taiwan is part of China, it's not an independent country, but we've had a very ambiguous, and tolerance for this ambiguity, of Taiwan acting as its own nation while saying we support the One China Policy. And that ambiguity has served us very well in the China relationship. Here's what Blinken said at the press conference, quote, "We do not support Taiwan independence. We remain opposed to any unilateral changes to the status quo by either side." The status quo he's referring to here, Brad, is that they get to be independent in (laughs) Taiwan, but we don't say they're independent. They are obviously acting in an independent manner, but it is not our business to tell the Taiwanese people that they're independent or not. It's their decision to determine if they're independent or not. Any- any thoughts on the- the trade by Buffett and Blinken's-

Chamath Palihapitiya 49:38 Well, I think that, listen, I think that-

Jason Calacanis 49:38 ... comments at the press conference and this ambiguity?

Chamath Palihapitiya 49:41 I think we want to maintain the ambiguity. I think we're basically saying to China, "Don't change the status quo, at least for now," right, "while we rebuild these chip fabs in Arizona and other parts of the world." I think most of the wealthy families I've talked to from Taiwan believe that five or six years from now, the US will no longer be in the position where they will need Taiwan and Taipei as much as they do today. And they're worried about-

Jason Calacanis 50:10 How many years do you think it will take to be independent? Say it one more time and explain it.

Chamath Palihapitiya 50:14 Well, it's not about being independent. It's how much longer will Taiwan have what they believe to be de facto protection from the United States? And I was told by one very influential Taiwanese family that they believe when the fifth chip fab comes online in Arizona, which I think is scheduled for '25 or '26, they intended to have most of their family members out of Taiwan at that period in time. Now, I think most Taiwanese don't envision this being, you know, a violent invasion of Taiwan. It's more of a take under, in the same way that Hong Kong was. And so, I don't see an American president, frankly, going to war, nor would I want them to go to war over Taiwan. But I think it's in all of our interest to maintain that status quo, which is why taunting the Chinese over the course of the past few years over Taiwan has seemed like, uh, uh, a policy that's not fit with our goals.

Guest 51:15 Right.

Jason Calacanis 51:16 Well, if you look at skin in the game, the fact that the CHIPS Act went through so quickly, the fact that Warren Buffett, as you pointed out, Chamath, made his bet, and this family that has obviously, you know, uh, skin in the game, quite literally, are making these decisions, I think we know where this is headed. You can just follow the bets. And if you look at the bets, in five years-

Guest 51:33 Follow the dollars. Follow the dollars.

Jason Calacanis 51:35 Follow the dollars. And, and, and also, where people put themself, uh, geographically. Everybody left Hong Kong when the turnover happened or before it. They went to Singapore, they went to UAE. They voted with their feet and their dollars. And that's obviously what's gonna happen

Jason Calacanis 51:49 here. This is a good pivot because this criticism of the Ukraine policy by Matt, uh, that Sax pointed out came because there is a belief on his part, and others', that the pod here, All-In, is putting its unilateral support behind RFK. That is not true. There are two people on the pod who hosted a fundraiser last week. And here is what Matt incorrectly said, because I have not put my support behind RFK. I think he's very interesting and I'm glad he's in the race, and neither has Friedberg, but Chamath and Sax did host one, and I'll hand it over to them. But here is what Matt said in his Substack. "And even though it's not the subject of this post, I do want to say that I think it's really sleazy and gross for the hosts of the All-In podcast to be engaging in this Kennedy boosterism as a bank shot way of harming Joe Biden's reelection prospects, not withstanding the recent conversions around Russia policy. Kennedy represents precisely the strand of progressive thought that right-of-center business people have highly... have rightly spent the better part of the century bemoaning. His is an anti-progress, anti-techonology, ultimately anti-human worldview-"

Chamath Palihapitiya 53:06 (laughs)

Jason Calacanis 53:06 "... that stands against biomedical progress, against energy progress-"

Chamath Palihapitiya 53:09 Yeah. Lord.

Jason Calacanis 53:09 "... and against human flourishing."

David Sacks 53:09 The guy who wants to blow up as many Ukrainians as possible-

Jason Calacanis 53:13 As a meat shield.

David Sacks 53:13 ... in order to deplete... Yeah. Exactly.

Jason Calacanis 53:15 Pretty gross, yeah.

David Sacks 53:15 He thinks is anti-human. Listen, I don't even think we should be giving him this much time.

Jason Calacanis 53:19 Well, no, but I think it is important, uh, 'cause people now have s- connected this pod with the rise of RFK. This was the first-

David Sacks 53:25 Well, listen, neither-

Jason Calacanis 53:25 ... major podcast he did.

David Sacks 53:26 ... e- what, what Iglesias, Iglesias is accusing us somehow of do- of- of supporting RFK not because of issues, but somehow because it's a bank shot for Donald Trump, which is ridiculous. N- none of us support Donald Trump. He's not even my preferred candidate in the Republican lane.

Jason Calacanis 53:41 Well, what he said was a bank shot against Biden, just to be clear.

David Sacks 53:44 I just-

Jason Calacanis 53:44 A bank shot against Biden.

David Sacks 53:45 ... I would pre- I prefer-

Jason Calacanis 53:46 Or you're against.

David Sacks 53:47 I prefer RFK to Biden. It's that simple. What's, what's wrong with that? He's not even making any arguments here. Look, we've explained in a lot of detail, and I explain in my response all the issues where I support RFK. He supports free speech over censorship, he supports civil liberties over the surveillance state, he supports peace instead of war, he supports sealing the southern border, virtually alone among Democrats in talking sense on that issue. And I believe that he's completely correctly diagnosed what we're doing in Ukraine. So on the issues I support RFK-

Jason Calacanis 54:18 You disagree, and you disagree with him on some issues, right? You disagree with him on nuclear and you may disagree with him in his anti-vax stance, if he is, in fact, anti-vax.

Guest 54:26 Can I just-

Jason Calacanis 54:27 Hold on, let Sax finish those two.

David Sacks 54:28 I think he was right about COVID lockdowns and I think he was right about-

Jason Calacanis 54:31 Right.

David Sacks 54:31 ... COVID, the so-called COVID shot that wasn't even a vaccine, that that should not have been required.

Jason Calacanis 54:36 But what about those two issues? You obviously disagree with him on some things. Do you disagree with him on his anti-vax stuff and his nuclear stuff?

David Sacks 54:44 I don't know-

Jason Calacanis 54:45 And Daniel Finamore.

David Sacks 54:45 ... enough about those issues to have, like, a firm stance. What I would say is that every candidate represents a bundle of issues.

Jason Calacanis 54:53 Right.

David Sacks 54:53 And you support the ones who are aligned with you on the issues that are most important to you.

Jason Calacanis 55:00 Got it.

David Sacks 55:00 On the issues that are most important to me, which are these questions, the great questions of war and peace, and the questions of free speech and censorship-

Jason Calacanis 55:08 Got it.

David Sacks 55:08 ... and even, I would say, the question of the economy and who do we prioritize, 'cause he wants to prioritize the middle class, on those big questions, I feel like I'm aligned with RFK.

Jason Calacanis 55:20 Perfect. Okay.

David Sacks 55:20 So that's why I support him.

Jason Calacanis 55:22 Let me go to Chamath then.

Chamath Palihapitiya 55:23 Yeah.

David Sacks 55:23 And by the way, do you think Jack Dorsey is, is supporting RFK as a bank shot something or other? No. He's supporting it because he agrees with RFK on these questions of war and peace-

Jason Calacanis 55:32 Okay.

David Sacks 55:33 ... and free speech.

Jason Calacanis 55:34 Correct. I'm just letting everybody be very clear about their position since this is becoming... The support of RFK by this podcast or two of the four people on the podcast is now becoming kind of national news.

David Sacks 55:45 Iglesias isn't even making any arguments here. He's just applying derogatory labels to us.

Jason Calacanis 55:49 Yeah, yeah. Anti-communists-

David Sacks 55:50 And really what this is, this is a disciplinary tactic or a shaming tactic-

Jason Calacanis 55:55 Yes.

David Sacks 55:55 ... by the sort of enforcers for the establishment-

Jason Calacanis 55:59 Right.

David Sacks 55:59 ... who want to prevent independent thinkers from stepping out of line.

Jason Calacanis 56:03 I agree.

David Sacks 56:03 That's what this is about.

David Friedberg 56:04 It looks like this outsider went to the Dalton School in Harvard University (laughs) so there you have it.

David Sacks 56:09 Yeah, he got a $2 million education, doesn't know what a basis point is.

David Friedberg 56:12 (laughs)

Jason Calacanis 56:13 (laughs) He's the guy with the basis points, right?

David Friedberg 56:15 Oh, boy.

David Sacks 56:16 He failed math and he graduated Dalton and Harvard.

David Friedberg 56:19 (laughs)

Jason Calacanis 56:19 (laughs) Oh, good luck with your Substack, dude.

David Sacks 56:21 (laughs)

David Friedberg 56:21 Oh my God.

Jason Calacanis 56:22 Chamath, you are pro-nuclear. You've been very clear about that, although you're pro-renewables mostly. Uh, you've been clear about that on this podcast abe- and many conversations I've had with you. You are also pro-vaccine but you're anti- what happened with the lockdown. So, maybe you could expand upon your support of RFK, why you held a fundraiser for him, and what things you agree with him on and maybe what things you don't necessarily agree with him on.

David Friedberg 56:45 Well, first, I actually did what I think a lot of people haven't done, which is just listen to him, just stop talking, zip the old yapper, and there is an enormous amount of long-form content where you can really understand where he stands on some of these topics. He's right about the war on Ukraine. We shouldn't be in it. He's right about free speech, which is we should have it. He's right that the COVID vaccine was not a vaccine, and really what it's done is actually discredit the word vaccine, unfortunately, in a lot of people's minds. He actually is a person that is pro-vaccine for all these other vaccines. He himself is vaccinated. His children are vaccinated. You would all know this stuff if you just took two minutes to just listen to it. He is against the COVID vaccine, and what I would say is I'm very sympathetic to that. I'm very sympathetic to the job the FDA had to do, and I think they generally did do a great job. But we ram something through and we allowed it to be labeled a word that misappropriates what it is. It's not a vaccine, and the problem with that is that it now makes people mistrust the measle, mumps, and rubella vaccine. That's crazy. You shouldn't mistrust the MMR vaccine or Dtap, but because those things are lumped in with the same thing as a COVID vaccine that is, at best, 30 or 40% efficacious, we have these problems. He calls that out pretty honestly. So, I like the fact that he actually speaks in nuance. I like the fact that when I listen to him, I find that the talking head think police are generally lying. It confirms what I believe about them, because he just says things in a very plain-spoken, intelligent way. And I think that there are a lot of folks who don't wanna think who wanna be given the simple answer, who want to just reject what he stands for and just take the establishment view in the hopes that they'll get, I don't know, maybe accepted by the establishment. The establishment just wants to curate power, and I just think that people should be thinking for themselves. If you listen to the Rogan podcast, if you listen to the Jordan Peterson podcast, there are millions and millions and millions of links and page views and discussions and thoughts, and there's probably thousands of minutes of RFK explaining what he thinks on basically any topic you can imagine. You can get to your own conclusion. And, uh, I think, what I think you'll find, and this is true for me, is there's 10% of stuff you are just v- vehemently supportive of, 70% of stuff that's, like, quite reasonable and fair, and then there's the rest which is a spectrum of things I disagree with. But then you're left with a blended expected value where you're like, "Man, this guy is really better than all the other alternatives."

Jason Calacanis 1:00:01 Brad, I'll let you go and then I'll give my position.

Chamath Palihapitiya 1:00:03 What I find most insidious about the opposition to this discussion is people are upset that you're not swearing an allegiance to a dogmatism. Right? The truth of the matter is this group has hosted dinners for Ro Khanna, for Senator Manchin. We've hosted dinners for DeSantis. Right? Had I been here, I would've put my name on the dinner for Kennedy because I want to gather information. I'm an analyst. I wanna think for myself. How can we spend trillions and put ourselves into potentially harm's way without having a real conversation in Congress and on these pods about the risk of war?... why can't we have an authentic postmortem about the efficacy of the COVID vaccine without being shamed? The revolution going on in this country, which is fantastic from my perspective, is that there is no longer a monopolistic control over the discussion. And that's why this podcast and this friendship and the conversation we all had here is resonating with people, because they also want to hear all the different sides. Because most people are capable, are way smarter than the elites on the coast think. You know, I'm from Indiana, lots of smart folks who think for themselves in Indiana, but they're told- told by coastal elites what to think, and they reject this, and that's what you're seeing in this discussion and so many of these others. It's not about the... It's not about vaccines, it's not about a war. It's about their control over how you think, and them wanting to force you to swear to an orthodoxy.

Jason Calacanis 1:01:49 I think that's really well said, yeah.

David Sacks 1:01:50 Yeah, that is well said. But the- the way they try to control what you think is by labeling candidates so as to exclude them or make them sound crazy. So J-Cal, I mean, you kind of introduced RFK as an anti-vaxxer. I don't think that is the correct way to describe his position or the singular way that he should be labeled.

Jason Calacanis 1:02:12 No, I don't- I don't believe that. I said, "Here are the things he believes that we agree with," and then I gave the things that the media is saying. You know, so I- I was trying to present the totality of it, and I said he is obviously in favor of the middle class and all this stuff. So-

David Sacks 1:02:25 Well, he was right about COVID.

Jason Calacanis 1:02:26 ... I- I just want, I wanna be clear on my position here. So I am in support of vibrant, long-form debate (laughs) like we have here, and I'm in support of anybody who takes on the establishment, because there are crazy incentives. As we talk about here, incentives matter, and we are long overdue for a discussion on vaccines. But it's very important that everybody understand here that everybody on this podcast took the COVID vaccine, and everybody here, our kids have been vaccinated.

David Friedberg 1:02:52 It's not a vaccine. It's not a vaccine.

Jason Calacanis 1:02:53 Exactly, so they took the COVID reduction-

David Sacks 1:02:54 We were injected with an experimental mRNA treatment-

Chamath Palihapitiya 1:02:58 (laughs)

David Sacks 1:02:58 ... because we got hoodwinked by the media into thinking it would prevent us-

Jason Calacanis 1:03:01 And?

David Sacks 1:03:02 ... from ever getting COVID, which it did not do.

Jason Calacanis 1:03:04 I think it's fair to say-

David Sacks 1:03:04 Two months later, I got Delta variants.

David Friedberg 1:03:06 ... vaccines, vaccines are good, and the COVID thing was not very good.

Jason Calacanis 1:03:12 A- and it reduced death in older people and probably was the only group of people, and we'll, we'll know when we do a postmortem, but do not take-

David Sacks 1:03:20 Now we got this mRNA, like, flowing through our bodies. Who knows, it might be a time bomb. (laughs)

Jason Calacanis 1:03:26 Well, and then, uh, for people who are wondering, like, if we should even be having these discussions, the- the hypocrisy of the media I think is very important to look at here, 'cause the media has been attacking this podcast over and over again. Not that it matters, but when we moved into the top 100, top 50, top 10, that's when the knives came out, and I- I would like to remind the media of the long history of investigative journalism and debates. What was once a conspiracy theory often goes on to win a Pulitzer Prize. And, you know, the- the hypocrisy here is crazy, because if you look at some of the greatest stories, uh, an investigative journalist's pieces, they started with these debates, rumors, et cetera. Abu Ghraib, that was The New Yorker. Ralph Nader on CNN's-

David Sacks 1:04:12 That was Sy Hersh's reporting.

Jason Calacanis 1:04:13 ... state.

David Sacks 1:04:13 That was Sy Hersh's reporting, and he can't-

Jason Calacanis 1:04:15 And now they're discrediting him.

David Sacks 1:04:16 ... get the time of day-

Jason Calacanis 1:04:16 Right.

David Sacks 1:04:17 He can't- he can't get the time of day for his report on who really destroyed Nord Stream.

Jason Calacanis 1:04:21 The Catholic Church sex scandal, The Boston Globe.

David Sacks 1:04:24 The mainstream media does not perform the function that you're describing anymore. They act as the bodyguard for the elite, for the establishment.

Jason Calacanis 1:04:31 They actually have even of late done-

David Sacks 1:04:33 They are stenographers for the people in power.

Jason Calacanis 1:04:36 Not exactly true. They have actually done incredible reporting, but there is a group of them which is towing the party line. 'Cause you have The New York Times and their expose on the Taxi Commission. That won a Pulitzer in 2020.

David Sacks 1:04:48 What? Taxi cabs?

Jason Calacanis 1:04:49 And then you- you look at... I know you don't follow Pulitzers or investigative journalism. In 2020, Brian Rosenthal at The New York Times did a massive expose on the predatory s- uh, New York City taxi industry, and then at the same time-

David Sacks 1:05:01 Okay, well that might be-

Jason Calacanis 1:05:02 ... you had this anti-Uber and anti-Lyft.

David Sacks 1:05:02 ... important to New Yorkers. There's- there's a few other issues that might be more important to the nation.

Jason Calacanis 1:05:06 It was an example of protectionism and rent-seeking. Uh, the Enron scandal, Big Tobacco, 60 Minutes.

David Friedberg 1:05:13 What about the pretzel monopoly in the south part of the Bronx?

David Sacks 1:05:16 (laughs) What about that hot dog vendor on 5th Avenue-

Jason Calacanis 1:05:19 No, no, no, you guys are uninformed.

David Sacks 1:05:21 ... that didn't have all of his licenses up to date?

David Friedberg 1:05:23 I thought-

Jason Calacanis 1:05:23 Nope.

David Friedberg 1:05:23 ... there was a halal man-

David Sacks 1:05:24 What about the big expose on that?

David Friedberg 1:05:25 ... who gave people botulism.

Jason Calacanis 1:05:26 You guys are super uninformed.

David Friedberg 1:05:26 Oh my God, get rid of the bo- (laughs)

Jason Calacanis 1:05:28 But the fact is, at the same time that The New York Times, CNN were attacking what Uber was doing, The New York Times won a fucking Pulitzer for their coverage of predatory loans by rich, powerful people-

David Sacks 1:05:41 Great.

Jason Calacanis 1:05:42 ... in New York City, who-

David Sacks 1:05:43 I bet they also did a great story on the guy selling trinkets outside, uh, Penn Station without a license, right?

Jason Calacanis 1:05:48 For somebody who's a man of the people like yourselves, actually, should actually be more informed. Okay, let's keep moving.

David Sacks 1:05:52 Well, what they should be reporting on, for example, what the-

Jason Calacanis 1:05:55 Yeah.

David Sacks 1:05:55 If they really... If the Pulitzers worked the way they should, is where Patient Zero came from on COVID.

Jason Calacanis 1:06:02 Oh, yeah.

David Friedberg 1:06:02 Oh, I knew it was, yeah.

David Sacks 1:06:02 Because Michael Schellenberg just reported this over the last week, and it got picked up by The Wall Street Journal-

Jason Calacanis 1:06:07 Yeah.

David Sacks 1:06:08 ... that Patient Zero, it turns out-

Jason Calacanis 1:06:10 Yeah.

David Sacks 1:06:10 ... was a researcher at the Wuhan Lab-

Jason Calacanis 1:06:13 Shocking.

David Sacks 1:06:13 ... who was performing gain-of-function research.

Jason Calacanis 1:06:16 Yeah, shocker. (laughs) Shocker.

David Sacks 1:06:17 Another conspiracy theory proven true.

Jason Calacanis 1:06:20 And will wind up being a Pulitzer.

David Sacks 1:06:22 He deserves a Pulitzer.

David Friedberg 1:06:24 He does, and the crazy thing about this, quote unquote, "conspiracy theory" that turned out to be true is, like, it brought together the most odd bedfellows, Rand Paul and Jon Stewart. When Rand Paul-

Jason Calacanis 1:06:35 Yeah.

David Friedberg 1:06:36 ... and Jon Stewart can be in a room and agree on basically the totality of a topic, we should all just pay attention because it's not-

David Sacks 1:06:43 (laughs) It's not a normal-

David Friedberg 1:06:44 ... it's not a normal world in which these two guys-

David Sacks 1:06:45 (laughs)

David Friedberg 1:06:45 ... would otherwise get along.

David Sacks 1:06:46 Right.

David Friedberg 1:06:48 And both of them nailed it from day one.

David Sacks 1:06:51 (laughs) Right, they have the same name. But now connect the dots further, okay? Why was the truth suppressed? Why did it not come out?... because Fauci had funded gain-of-function research at the Wuhan lab v- via EcoHealth Alliance. So, he knew that if, at the beginning of this pandemic, it turned out that he had been partially responsible for the creation of this virus that had now turned into a pandemic around the world, his career would have been over.

Jason Calacanis 1:07:19 And it's worse, Sax. It's even worse than that. 46% of the advertising on TV news comes from pharma. And we did not always allow pharma spending. And this is, may not be one-to-one, it may not be that a specific person doing a report at CNN or Fox or any of the networks is saying, "Oh, I'm gonna lose my job if I write something critical of pharma," but they're not doing the investigative pieces on, I can tell you this, on the people who have 46% (laughs) of their advertising revenue, unless it really, you know, gets to the final inning on something. And-

David Sacks 1:07:55 Right.

Jason Calacanis 1:07:55 ... and that is something that we need to question.

David Sacks 1:07:58 Right.

Jason Calacanis 1:07:59 The media is funded 46% by pharma companies, and pharma companies were given a pass. And if you criticize any of the pharma companies, the media's gonna come for you. And so, listen, I'm not a tinfoil, but you do have to look at incentives-

David Sacks 1:08:15 No, that, that is not tinfoil. Listen, the media is funded by Big Pharma and its primary sources are these high-level government employees who've been there forever, who leak them information. That is why the New York Times was carrying water for Fauci and Big Pharma. This is the marriage of state power and corporate greed that RFK Jr. denounces.

Jason Calacanis 1:08:36 Yeah. Well, uh, there you have it, folks. So, and, uh, he believes he could be assassinated by the CIA. (laughs)

David Sacks 1:08:42 No, he didn't say it like that.

David Friedberg 1:08:44 He didn't say it like that. He was asked what, what is his strategy on campaigning and all of that stuff, and he said, "Look, I'm gonna do as much as possible, but one thing that I'm going to avoid are, like, these open-air parades just because there's just a lot of folks that we can't control. Crowd control."

Jason Calacanis 1:09:03 Yeah. Okay. Reasonable.

David Sacks 1:09:06 Yeah, I mean, the, the conversation on Rogan went something like this. Rogan was asking him questions about the Kennedy assassinations, and RFK believes, like, something like 60% of the American public believes that Lee Harvey Oswald did not act alone. Then Rogan asked him, "Well, do you ever feel afraid running for office?" And his answer was basically, "No, not really. It's not something that I'm preoccupied with, but yeah, I'll take precautions." Does that mean he thinks the CIA's gonna assassinate him? No. That's not what he said, but that is how the media reported it, including Fox News. That became the soundbite.

Jason Calacanis 1:09:40 Well, the soundbite from this podcast was that he believes his uncle was an a- and his father were, that the CIA was involved in their assassinations.

David Sacks 1:09:47 A lot of people believe that, Jason.

Jason Calacanis 1:09:48 Yeah. Yeah.

David Sacks 1:09:48 A lot of people.

Jason Calacanis 1:09:49 I am not giving my opinion on it, I'm giving his opinion on it. He said it on this podcast. And the CIA won't release all the information s- to this day, even though they've been commanded to do so, so you (laughs) make your own

Jason Calacanis 1:09:59 decision, folks. According to Bloomberg, there is a ton of action for startup shares in secondary markets. If you don't know what a secondary market is, that's when one investor buys shares in a company that's not yet public directly from another investors on the cap table. So if Stripe, which is not yet public, or Reddit, if there are shares floating around in those companies, either previous employees or previous investors, one firm might see an opportunity there and buy them. As this process of bottoming out has occurred, PitchBook reported Tiger Global told secondary investors, and that's a class of people who like to buy these, uh, that they could bid on any individual private company in its portfolio. They tried to sell a bundle of these, um, shares, about 30 startups at a time, but they couldn't find buyers according to the reports, so now they're allowing people to bid on per-company, on a per-company basis. Some of these are being marked down a third, 50%, uh, et cetera. Here's the quote from Bloomberg. "As of May 31st, shares of startups were trading at a median discount of 61% compared to valuations at their latest funding rounds, according to a report by Forge Global Holdings." A16, according to the report, is actively buying shares in Secondary. Accel, Bain, Bessemer, Kleiner are also using Secondary to grow stakes in their existing investments, doubling down, as it were. Crossover firms like Coatue, Tiger Gro- Global, and even Brad's Altimeter are actively searching for deals. So Brad, your thoughts on this? Is this sign of a bottom? And why are you doing this?

David Sacks 1:11:26 Well-

Jason Calacanis 1:11:26 Or is it true you're doing it? Yeah.

Chamath Palihapitiya 1:11:28 Yeah, it is tr- it is true. I mean, our job is to look at all these companies, understand their value.

Jason Calacanis 1:11:32 Okay.

Chamath Palihapitiya 1:11:32 You know, I'm sitting here looking at a list that I was given this morning, 125 companies, secondary. You know, the Goldman Sachs unprofitable tech index in the public markets, uh, is down 64% as of this morning.

Jason Calacanis 1:11:46 Unprofitable public companies.

Chamath Palihapitiya 1:11:48 So this is a, they, they put together a basket, they track unprofitable public companies, down 64 p- percent off of its peak as, as of this morning. So you just quoted the Bloomberg article saying, yeah, these unprofitable tech companies in the private markets are down about 60, 61%. That smells right to me. The repricings have to occur. These have to occur. All right? There were 1,400 unicorns at the end of 2022, and 100% of them will likely do a down round. And if you said, "What is the average that they're gonna be down?" It's over 50%. You saw the repricings out of some of the best ones, like a Canva or a Stripe where it was down, let's call it 30, 40, 50%. But, you know, there are gonna be companies, like in the public markets, that are down 80 or 90% and disappear altogether. So we didn't see the repricings, okay? And by the way, when we say i- you know, that article quotes Forge, that is what the sellers are offering to sell shares for. That is not where transactions are clearing. Right? So why hasn't Altimeter purchased any of this? Because the prices aren't low enough to induce me to get off the sidelines to purchase the shares. But we're within, kind of, you know, we're starting to get in the zone...... where we can underwrite to a margin of safety, competitive or better than the public markets, for companies that we think are great companies. Now, out of those four hund- 1,400 unicorns at the end of '22, they're probably less than 5% of those companies I would even want to own at the right price. Right? So it's a small subset of companies. The price has to get to this clearing point. But, you know, I think over the course of the next, uh, 18 months, we're gonna see an acceleration of market-clearing events as these companies need to raise capital, as their employees want to get liquid on shares. And it's, uh, uh, probably see some great opportunities, but most of these things that get put on sale should not be purchased, right? Most of 'em, even, uh, you know, the first sale price is never the last sale price. The markdown on the black T-shirts will continue.

Jason Calacanis 1:14:01 Chamath or Sacks, any thoughts? Are you buying in secondary? Are you looking at this? Yeah.

David Sacks 1:14:05 We'll look at secondary deals. It's not primarily what we do, but we're open to it. But Brad, if you were to categorize the 1,400 unicorns into one of three categories, what do you think the percentages would be? Those three categories being zombiecorns, like unicorn companies that just don't deserve to exist, they don't have product market fit and they're gonna go away. Category two would be viable companies that are just overpriced and are headed for a down round. And then number three would be the ones that are actually headed for an up round.

Chamath Palihapitiya 1:14:35 Yeah, I'd say 30 to 40% are these companies that were valued over a billion dollars that don't have product market fit. They'll disappear.

Jason Calacanis 1:14:44 Zombie companies that will disappear?

Chamath Palihapitiya 1:14:46 Right, and that, uh, listen now, just-

Jason Calacanis 1:14:47 Walking dead.

Chamath Palihapitiya 1:14:48 Just to be fair, let's explain. Most of these companies, right, have less than 200 million of preference, preferred shares, that venture capitalists invest into the company. And many of those companies in that 30, 40%, there's a team, there's some asset of value. They may be able to, you know, sell the talent or the team and recoup, David, let's call it 30, 40% of the pref stock, right, in that transaction. We're starting to see some of those occur. Then I think the lion's share of the companies that are left, let's call it, you know, another 40%, these are companies that should never have been marked at these prices, right, but they do have a business and they're gonna be marked down, you know, 50 to 80%. But all of th-, like none of those have been able to grow through it. Then there's less than 10% of the companies, right, whose growth has been so robust through this period that they've actually grown into or are within 10, 15% of those prior prices. And if you do all of that work, it puts us back on trend line, right? The only thing unusual here is how uh, far off trend line. We had 1,400 unicorns, right? In 2020, we had, I think, 145 IPOs. In the last two years, we've had four, okay? So there's a huge backlog. These companies aren't getting public. Why? Because public market buyers like ourselves were not willing to pay the prices that were in the private market. So the first step is to just have these clearing events. And as, David, you and I heard sober talk over