E14: Salesforce acquires Slack, DeepMind’s AlphaFold breakthrough, Trust Fund Socialists & more

1. 0:00 – 3:47

   Besties intro, fashion talk & the All-In Syndicate

   1. JCJason Calacanis0:00

      Okay. Besties are back. Besties are back. Going around the horn. Rain Man David Sachs calling in from an undisclosed location, suffering through two code 13s in one lifetime.

   2. CPChamath Palihapitiya0:11

      (laughs)

   3. JCJason Calacanis0:11

      And David Friedberg is here, the queen of quinoa, spacking everything in sight, living the life, calling in from a nondescript Ritz-Carlton room-

   4. CPChamath Palihapitiya0:23

      (laughs)

   5. JCJason Calacanis0:23

      ... it appears to be. And of course, the dictator himself, Chamath Palihapitiya-

   6. CPChamath Palihapitiya0:30

      (laughs)

   7. JCJason Calacanis0:31

      ... cackling like a fool. Welcome back everybody. This is what you pay for with your subscription to the All-In Podcast, brought to you by Slack.

   8. CPChamath Palihapitiya0:40

      (laughs)

   9. JCJason Calacanis0:40

      Uh, if you didn't own Slack shares (laughs) raise your hand. (laughs)

   10. CPChamath Palihapitiya0:47

       (laughs)

   11. JCJason Calacanis0:47

       It's been an incredible, uh, week, um, on a number of levels. We're gonna talk this week about, uh, Salesforce buying Slack, Trump and Section 230, uh, the Coinbase, the ongoing Coinbase saga. Uh, Friedberg found some interesting science that could save humanity. And of course, the trust fund socialists in The New York Times (laughs) who hate their parents for giving them money. Uh, let's start off with-

   12. CPChamath Palihapitiya1:16

       Can we... Let's start with off the most important thing. W- what is that shirt, undershirt combo you're wearing? I mean, look-

   13. JCJason Calacanis1:22

       It's just...

   14. CPChamath Palihapitiya1:22

       It's... You have buttons on buttons. It's actually incredible.

   15. JCJason Calacanis1:25

       Is that the... Did I break the layering rule?

   16. CPChamath Palihapitiya1:27

       Uh, you can't, you can't Explain to us. If you're gonna layer properly, you can have only one layer of buttons. But to have two layers of buttons, it's-

   17. JCJason Calacanis1:35

       Th- that's not how it works?

   18. CPChamath Palihapitiya1:36

       No. J- j- J Cal went in and got an almond-

   19. JCJason Calacanis1:38

       I don't know. Layers are for players, not me.

   20. CPChamath Palihapitiya1:40

       He, he, he-

   21. DFDavid Friedberg1:40

       No, he got like an almond milk cappuccino and he's like, "I like how that barista dresses and I'm gonna wear that from now on."

   22. CPChamath Palihapitiya1:45

       (laughs)

   23. DFDavid Friedberg1:46

       And he's like...

   24. JCJason Calacanis1:46

       Wait a second. Can I ask a technical question? Can, can I have buttons? I can't have buttons on buttons, but can I have buttons and then a zipper up like with the...

   25. CPChamath Palihapitiya1:54

       No, you can't do that either. Um, listen, he- Chamath- Chamath has had a weird aversion to buttons ever since he spent-

   26. DFDavid Friedberg1:59

       (laughs)

   27. CPChamath Palihapitiya1:59

       ... that time in Italy.

   28. DFDavid Friedberg2:02

       (laughs)

   29. CPChamath Palihapitiya2:02

       (laughs)

   30. JCJason Calacanis2:02

       Did you... Was he button shamed in Italy?
2. 3:47 – 19:14

   Insights on Slack being acquired by Salesforce for $27.7B - why did they sell, are there any nitpicks, was this a home run for Salesforce?

   1. JCJason Calacanis3:47

      that. Chamath, we saw this week, in fact just two days ago, Salesforce in a record transaction for a SaaS company. I think it's the highest ever paid for a SaaS company. $27 billion, $27.7 billion for Slack, which has only been public for just over a year, I think. You were, I think did the series B in Slack right after they did the pivot at Social Capital. I don't know if that was in fund one-

   2. CPChamath Palihapitiya4:11

      the-

   3. JCJason Calacanis4:11

      ... or two, but Phil Hellmuth keeps talking about it.

   4. CPChamath Palihapitiya4:14

      This series... It was a series B in Tiny Speck, but it was the series A in Slack. And, um, there's a really important story which is that, um, myself and Ray Koh, um, who's my partner at Social Capital, we've worked together now for, my gosh, I think it's probably 15 years. Um, wrote a really great memo justifying the investment in Slack and it had to do with one thing and one thing only. We ignored the revenue and ARR. I mean, it was fine and nice and good, but the single biggest thing that we were attracted to was something that we looked at and which was called, um, inter-company edges. And even back in 2015 or '16 when we did this original investment, there was this dynamic where people across companies were communicating via Slack channels and I was completely stunned by this idea because that was effectively a substitution for email, because the only way you communicate across companies today is by email. You know? David is at kraftventures.com and he emails me at socialcapital.com and I email Jason at inside.com. That's how we communicate across, across businesses, except now all of a sudden you could be messaging and having a much more real-time interface. That to me was incredibly disruptive and it justified, um, the entirety of the real forward-looking investment thesis. Now fast forward five years later and these guys have more usage on a daily basis than Facebook, which is stunning because, you know, these guys have 10 million DAUs and Facebook has two billion. So it just goes to show you the quantity of traffic and, and the, the volume of information and theoretically, you know, productivity that's happening on Slack. And so I'm not sure what Salesforce bought. I actually think that, you know, you can make a case why-Um, it's a shame that it got bought, um, a very strong one in fact. But what they did get, whether they know it or not, is an inter-company edge effect, which is the most disruptive thing to email. And in the hands of Salesforce and that sales team, I think it has the ability to really be a very disruptive, um, force for good in enterprise software.

   5. JCJason Calacanis6:29

      All right. So, Sax, this is a natural, um, passing of the ball to you and the baton because you did Yammer, sold it to Microsoft for a billion dollars. And obviously Slack was the mobile successor to, uh, the desktop version of Yammer and you got a lot of your, um, fingerprints all over this. But the fact is, you tw- did a tweet storm about it. Slack is an unbelievable success. Stewart is a great, uh, founder. S- you know, he sold his first company, Flickr, for 30 million. This one for almost 30 billion, so that's pretty nice. But there was one failure, and you pointed it out in your tweet storm. Explain what the one failure, if you could pick out of the hundreds of things, thousands of things they did right, there was one thing they did wrong that, uh, to Chamath's point, would have resulted in them remaining an independent company that could have become worth more than 27 billion?

   6. DSDavid Sacks7:19

      Yeah. It was, it was a slowness to embrace the idea of enterprise sales. Um, and, and by the way, let's put this in context. I mean, Stewart and the Slack team did a phenomenal job. $30 billion exit, um, seven years of just about flawless execution. So, I don't wanna... And, and also, you know, I was an investor in the company, so thank you to Stewart for letting me invest. I'm definitely don't wanna sound like an ingrate or a critic. I mean, they just, they did a phenomenal job. But if you were to nitpick just one, one little thing that I think they could've, uh, done faster, it would've been embracing enterprise sales. The big learning from Yammer, uh, you know, we learnt this at Yammer from 2008 to 2012, is that enterprises don't self-serv, right? They don't self-close. Bottom-up SaaS products are phenomenal for generating top of funnel, basically generating leads. But you have to have salespeople close the deals. And enterprises don't just kind of pull out a credit card and, and self-serv you. They need a salesperson. And I think there was, um, something in the DF- DNA of sna- Slack that actually I see really very commonly, uh, in the DNA of, of sort of producty SaaS companies, producty SaaS founders, which is, they kind of have a reflexive dislike or distaste for sales, and they resist the idea of sales. And they wanna believe that they can just be entirely product-driven and, um... And what, what I see in, across the board is they all come to the same realization that, that we had at Yammer, which is we have to have a sales team. And I do remember, you know, back in 2014, the whole Yammer sales team was basically rolling off, um, because of, you know, Microsoft acquired the company in 2012 and that was an integration period. And by 2013, 2014, they were all looking for jobs. And I remember, you know, my, my former, uh, CRO I think was interviewing at Slack, and it would've been such a perfect thing for them because he had just learned all the lessons of how you layer on kind of an enterprise sale on top of a, of a bottom-up product. And they just weren't ready to, to make that hire yet. Um, and so look, if you're gonna nitpick, look, $30 billion outcome, no one's criticizing, but if you're gonna nitpick, you know, um, it's, it's an A+ regardless, but you know, this will be the one thing you could, you could say.

   7. JCJason Calacanis9:46

      Well, congratulations all around to everybody involved, especially Phil Hellmuth, who was an LP in one of Chamath's funds. So, if you need insights on Slack-

   8. DSDavid Sacks9:56

      (laughs)

   9. JCJason Calacanis9:56

      ... uh, or any other inside information-

   10. CPChamath Palihapitiya9:58

       (laughs)

   11. JCJason Calacanis9:58

       ... you can just follow Phil Hellmuth on Twitter at Being The Greatest, or I Am The Greatest, or I'll Always Be The Greatest. One of those Twitter handles is his.

   12. DSDavid Sacks10:05

       But, but, but Jason, I mean, you, you basically came to the same conclusion in your emergency pod, right? I mean...

   13. JCJason Calacanis10:11

       I did. I hadn't seen your... I think your tweet came after the emergency pod.

   14. DSDavid Sacks10:14

       Mm-hmm.

   15. JCJason Calacanis10:14

       But, uh, yeah, it, it just seemed to me this company, unlike Zoom, uh, should have been able to grow quicker. And if you look at their numbers, they had 87 companies that had, were spending over a million dollars. You put a rabid sales team on that product and they go in, like Benioff does with his sales team. I mean, he was just hyper-aggressive at just putting huge numbers out there and saying, "You have to pay us this much money." So much so that, I don't know if you remember Elon getting into a public spat with him where he's like, "Salesforce is horrible software. Get it out of the organization." He basically banned it because they came to him with the bottom-up people using of Salesforce and said, "Hey, you owe us this amount of money." And Elon was like, "F you. Ban forever from (laughs) inside of our organization. We'll build our own software. We don't need it." Uh, and, and they didn't have somebody, and Stewart didn't have that DNA, I think, to say aggressively, "We need to charge what this product is worth." And you saw that in, I think one of their strengths and weaknesses, which was they only billed you for people who were actively using the product. Now, that's a beautiful, awesome feature. It makes you not scared to use it. But on the enterprise level, I mean, eh, eh, that seemed to be like maybe one of those non-cutthroat things that maybe were holding them back. David, do you have any insights on this or should we go on to AlphaFold?

   16. CPChamath Palihapitiya11:31

       It's, um, it's, uh, it's really important to remember the, the mechanics and the game theory around M&A, especially, you know, big game hunting when you're doing $30 billion acquisitions. Um, it's also kind of true at billion-dollar levels, but less so. Um, but the bigger the acquisition gets, you have to remember that there's an asymmetry of information between buyers and sellers. And the question is, who does the asymmetry favor?

   17. JCJason Calacanis11:56

       Hmm.

   18. CPChamath Palihapitiya11:56

       Right? Because you could look at this acquisition and say, "Wow, Salesforce is crazy for spending $30 billion." And somebody else may say, "Wow, Slack was really stupid for selling it for $30 billion," right? Um, the reality is that-I think that there was asymmetries on both sides. I think that what Slack probably saw, and I don't know 'cause I've been off the board now for more than a year, um, but I think what they saw was, as David said, just, um, you know, a level of sophistication and scale and ability to cross-sell and upsell that was needed for enterprise scale.

   19. JCJason Calacanis12:30

       Hmm.

   20. CPChamath Palihapitiya12:30

       Either you overcome it with precision and speed, or you overcome it by going the same pace as somebody like Microsoft, but with an equivalent product portfolio. So that's, that's sort of one realization that, that, that Slack had. But in, in the case of, you know, um, um, Salesforce, what they probably had was a realization that they couldn't go wall-to-wall inside of a customer because they didn't really have a product that was useful or usable to every single individual inside of an enterprise. And so both of those two things create asymmetries. There's a level of fear inside of Slack, and there's a level of fear inside of Salesforce. Both of them are about the fear of disruption. And then the question is who gets the better of the other person in the middle of the acquisition, right? So the deal could have probably gotten done at, you know, 22 billion. It probably could have also gotten done at 45 billion. Um, and that's again to a combination of, um, how well you play poker in that moment, right? Who blinks first and the quality of the bankers.

   21. JCJason Calacanis13:32

       This is like two people having top hair on a very textured board. (laughs)

   22. CPChamath Palihapitiya13:35

       Yeah. It's, uh-

   23. JCJason Calacanis13:36

       And they're just raising versus each other.

   24. CPChamath Palihapitiya13:38

       ... who outplays them. Yeah. It's who outplays them 'cause like it's similar also to like how Microsoft bought LinkedIn, right? Because if you think about what happened in LinkedIn, if you remember when that happened, it was almost to a T very much like Slack. LinkedIn had one bad quarter. They got decapitated by... I, I, you know, and I owned it at the time in the, in our public fund. It got decapitated by like 50%, 60%, 70%. I mean, something insane for missing numbers by like a few pennies, okay? And all of a sudden it took a lot of the wind out of their sails internally. It didn't change the user momentum at all because, you know, the users that were signing up for LinkedIn didn't care what the stock price was yesterday, today and tomorrow. Um, but it all of a sudden created a fear. And I think Microsoft was able to exploit that fear. And within a year, this company was bought for 25 billion dollars. Not dissimilar, you know, Slack had, uh, you know, a hiccup and, uh, they got re-rated, the stock bounced back. Um, but I think that, um, if Salesforce was smart, they probably created, you know, sort of like a white knight kind of bid that said, "Listen, you need enterprise scale and the ability to cross-sell and upsell. I can give it to you." And Slack probably said, "Listen, you need to go wall-to-wall so I understand why you need me." And, you know, the price is what the price is.

   25. JCJason Calacanis14:49

       Go ahead, Freberg.

   26. DSDavid Sacks14:50

       If you look at the pricing, right? So Slack nor- normally the way these big M&A, you know, public company M&A deals get done is the board has to approve the price and they have to say, "This was the right deal for us relative to other options." And one of the ways you ass- you assess that is you look at where the share price has been historically. And if you're getting a premium to where the share price has been historically, let's say 30%, 40% higher than it's ever been, then the board says, "Great, that's a good deal. We should take it because we've got a long way to grow into that value." Um, in this case, the deal was done not at a very high premium to where Slack traded just in the summer. Uh, is that right, Chamot? So it looked like it peaked-

   27. CPChamath Palihapitiya15:28

       It's basically, if you look at the fully diluted-

   28. DSDavid Sacks15:30

       It's a 10% premium, right? Yeah.

   29. CPChamath Palihapitiya15:31

       10% premium. Yeah. We, we-

   30. DSDavid Sacks15:32

       10% premium.
3. 19:14 – 27:26

   Sacks on going up against Marc Benioff and Salesforce Chatter while at Yammer, importance of holding onto winners as long as possible

   1. JCJason Calacanis19:14

      but when you... When he came up against you, it was very p- You know Benioff, you are friendly with Benioff.

   2. DSDavid Sacks19:20

      Yeah. (laughs)

   3. JCJason Calacanis19:20

      Benioff came at you so hard. He threw three or 400 engineers at Chatter, he took out full-page Wall Street Journal ads, he tried to poach your people, he tried to make the product free, he made it personal against you after you would not sell to him.

   4. DSDavid Sacks19:38

      (laughs)

   5. JCJason Calacanis19:38

      True or false, David Sacks?

   6. DSDavid Sacks19:41

      I don't, I don't think he made it personal but, uh, it was definitely a very-

   7. JCJason Calacanis19:44

      Did it feel personal?

   8. DSDavid Sacks19:45

      Um... No.

   9. JCJason Calacanis19:46

      Did he hurt your feelings?

   10. DSDavid Sacks19:48

       No, oh, no, no, no.

   11. He d- he did. That's what

   12. CPChamath Palihapitiya19:51

       I understand what he was trying to do.

   13. JCJason Calacanis19:52

       ... that's what he was trying to say. That's your way of saying no.

   14. DSDavid Sacks19:53

       No, I mean, if we had sold to Salesforce, like we, we ended up... So what I would say is, yeah, we got in like a very... It was a very competitive situation. He didn't beat us, um, you know-

   15. JCJason Calacanis20:03

       He failed.

   16. DSDavid Sacks20:04

       I, I... What's that?

   17. JCJason Calacanis20:05

       He failed. Does that product even exist?

   18. DSDavid Sacks20:07

       Yeah. Um, it, it's sort of like a feed inside of the, the CRM product. It, it didn't really succeed as a standalone collaboration product. And so we won that battle, but it definitely, I would say it scared us enough to sell to (laughs) Microsoft, um, because, you know, the-

   19. JCJason Calacanis20:23

       What did he offer you?

   20. DSDavid Sacks20:24

       We were about to, we were about to enter a new stage of competition, so here's what happened, is he launched his product to kind of be a clone of Yammer inside of Salesforce, but he was initially charging $15 per seat. We were charging like five. And so they massively overpriced it, and, and they event- and then they, they were on this like slippery slope where they kept lowering the price to compete better with us. And then finally, they realized that they should just give the thing away for free as a strategic move, um, and that was when we decided to sell to, to Microsoft is, we didn't know... We, we knew we had a better product than Chatter, but we didn't know how it would go if we were up against a free Chatter.

   21. JCJason Calacanis21:00

       Te- tell us honestly how much did he offer, what was the meeting like where he made you the offer?

   22. DSDavid Sacks21:05

       We... Yeah, so they, they were talk-

   23. JCJason Calacanis21:07

       Take us to the room.

   24. DSDavid Sacks21:08

       Yeah, they, so we-

   25. JCJason Calacanis21:09

       (laughs)

   26. DSDavid Sacks21:10

       Here's... I'll, I'll tell you the backstory. I mean, this hasn't been public re- publicly revealed, but, um...

   27. (laughs)

   28. JCJason Calacanis21:15

       Here we go. (laughs)

   29. CPChamath Palihapitiya21:18

       (laughs)

   30. DSDavid Sacks21:18

       Ooh.
4. 27:26 – 47:07

   Why is DeepMind's AlphaFold a major breakthrough? When will it begin impacting drug discovery? Dangers of AI at scale

   1. DSDavid Sacks27:26

      hard. Freeburg, explain-

   2. JCJason Calacanis27:27

      Explain AlphaFold, please.

   3. DSDavid Sacks27:30

      Uh, okay, let's explain ... Give me two minutes on ... I'll explain proteins and then, um, the importance of proteins and then AlphaFold. So, um, the numbers to remember are four, three, and 20. There are four nucleic acids that make up your DNA. We all learned this in high school biology. Um, sets of three, A, C, T, and G combinations define an amino acid. There are 20 amino acids. Um, and, uh, a protein is a string of amino acids. So in your body, in every cell, there are these, um, organelles. They make, uh, proteins by reading the DNA, taking out a copy of it, and turning it into, uh, amino acid chains, and that's what we kind of call proteins. Um, but what's interesting is when you make a chain of amino acids, so there's 20 of them that you could put in each point in the chain, it doesn't come out as a long chain. What happens is those amino acids, the whole thing collapses, and it turns into a very specific shape. And the shape of that protein is what defines its function. So pretty much every biological function, uh, across all life, um, uh, is, uh, is undertaken by proteins doing something. Some proteins, like hemoglobin in our red blood cells, will ... Has a very specific little pocket where oxygen molecules stick into the pocket, and then it moves the oxygen from your lungs to your cells. It's a pretty amazing protein to exist. Uh, and it, it specifically is shaped to do that exact function. There are other proteins that can, for example, rip apart other molecules, break a, a molecular bond. Um, there are other proteins, for example, that can take nitrogen out of the atmosphere and put it into plants', uh, cells that the plants can then use to grow. Um, it ... There's an incredible, um, uh, you know, uh, set of potential on the nanoscale of what you can do with proteins. And we see that in life, and we're just shocked and awed and amazed by it every day. But in order to figure out how to create proteins that, uh, that do specific things, you have to know how do those amino acids turn into the shape that the protein ultimately takes, and that's what's called protein folding. Um, and so the, the hard thing i- is, um ... And, and the ... And, you know, why is this important? It's important because we can easily read DNA, and therefore, we can f- figure out what amino acid sequence is being made to define that protein. But what we don't know really well is what is the shape of that protein, and therefore how does it undertake the function that we see it taking in biology? And if you think about the reverse of this, the reverse of this, if you have a function you want to undertake in biology, you can design a protein to do that function for you. For example, bind to a specific, uh, point on a cancer cell, um, or, you know, take carbon out of the atmosphere, um, or pretty much anything else your, your mind can kind of imagine. Uh, on the nanoscale, proteins can be designed to do. The challenge is, how do you write the code, which is the DNA, to make the protein that does that thing? Well, we don't know how the code turns into the shape, and that's what folding ... the folding problem is. So the folding problem, there's a data set, and the data set is, what's the three-dimensional shape of a protein? And then what's the DNA code that defines the amino acid sequence that makes that protein? And how do you figure out how to predict the shape of the protein from the amino acid sequence? It has been an impossibility. And, um, again, if you think about this chain of amino acids, they each have little, um-... you know, uh, uh, e- electrical spaces and, and the way that they bind to each other, it's very complicated. You can't just deterministically define it. You know, we don't have that level of understanding on a quantum scale. So what AlphaFold has done is they have now been able to predict from a sequence of amino acids what the protein shape will ultimately become by learning from a database of hundreds of thousands of structural protein, um, uh, um, uh, shapes that have been defined through really, really, really, um, difficult, uh, you know, scanning microscopes and other techniques, to really try and scan a protein on a microscopic scale. And then looking at the- the DNA sequence and figuring out, "Okay, what's the relationship?" And the accuracy of their predictive model now is within the range of error of the microscopes that are u- being used to actually scan and measure those proteins. So that's incredible. Because now, theoretically, you could come up with a design for a protein, and you could actually build that protein by writing the amino acid sequence, and that protein can do any number of things you want it to do. And this has been a difficult problem that's been intractable by humanity, and we've been challenged by it for decades. Um, for this machine learning breakthrough, uh, to- to kind of be realized in literally less than three years... I mean, the- th- these guys were at a score of 40 last year, and this year, they're at, like, nearly 90-

   4. JCJason Calacanis32:09

      90.

   5. DSDavid Sacks32:09

      ... which is-

   6. JCJason Calacanis32:10

      Yeah.

   7. DSDavid Sacks32:10

      ... incredible.

   8. JCJason Calacanis32:11

      Yeah.

   9. DSDavid Sacks32:11

      And so now, um, you know, we can now predict what the shape will be from the e- from the DNA sequence, and- and this is gonna unlock this ability. Everyone's now gonna take their model, if they license it or whatever they do with it, or people are gonna go learn using the same techniques that- that DeepMind used, um, but it just means that it's possible. And then scientists will go away and they'll say, "You know what? I want to do this particular thing on a microscopic scale. Let me design in- in three-dimensional space a protein to do that thing. Okay, now let me go figure out how to make that protein by writing the DNA code, which is really easy if you can use this algorithm to solve that for you." And it is literally dollars and pennies to make proteins. We can write DNA on a computer. We can get printed DNA sent to us in 48 hours in a FedEx envelope from a DNA printing facility. We can put it in a- in a microbe, and we can get that microbe to make the protein for us in a day. The lab cost, any high school biology class can do this now. So by being able to actually figure out what DNA to write based on the objective function of what do we want the protein to do, it's gonna unlock this universe of things we can do in medicine, in environmental science. Uh, we can do things like break apart PET plastics. We can do things, um, like fixing nitrogen from the atmosphere and getting rid of fertilizer plants. We can, um, create all sorts of new, um, you know, food solutions, health solutions, environmental solutions. Um-

   10. JCJason Calacanis33:28

       Any chance you can make a pizza that doesn't have carbohydrates? 'Cause that's what I'm thinking about here, is, is there a way-

   11. DSDavid Sacks33:33

       Yeah. (laughs)

   12. JCJason Calacanis33:33

       ... we can make a healthy pasta or pizza or something like that? But in all seriousness, what- what do you think the early wins will be out of this technology? And- and is this a theoretical win that we'll benefit from in 20 years? Or is this a serious breakthrough that we're gonna benefit from in the near term, like one- ... to five years?

   13. CPChamath Palihapitiya33:52

       Both- both are true. This is, uh, an incredibly important advancement in machine learning. Um, but the reality is that, you know, Google will still have to spend, and DeepMind will have to spend a lot of time refining it. And then they have some really big ethical challenges ahead of it. How do you expose this technology, to whom and under what conditions? And it's the same situation that OpenAI has with GPT-3, although I- a lot of people, I think, you know, the- the scale of the computer science challenge maybe was a- a bigger win in GPT-3 'cause it was a much more open space. Um, and I think this is a much more specific, sort of almost expert system in a way. Um, but the- the downstream commercial implications of this is just en- enormous. Um, and so the- the... Just think about this. Like, this is where, like, you gotta- you gotta love companies like Google, the fact that they exist, because from, you know, PageRank in 1999 to CPC ads in 2003 and '04, um, we have AlphaFold in 2020. And that, to me, is just... That's just immense.

   14. JCJason Calacanis34:50

       This is an argument against breaking up tech, because only a tech company with this amount of resource knowledge can then go spend a billion dollars on DeepMind

   15. DSDavid Sacks34:59

       I mean, over the past decade. ... over the past decade. Alpha- Alphabet's burning four to $5 billion a year on their, quote-unquote, "other bets" line, and people give them a lot of shit for it. But I mean, you hit any one of these things and it's $100 billion payday. I mean, look at YouTube. YouTube's easily $100 billion payday on a billion dollar bet, billion six.

   16. JCJason Calacanis35:15

       Oh, no.

   17. DSDavid Sacks35:15

       Uh-

   18. JCJason Calacanis35:15

       That's a- that's a-

   19. DSDavid Sacks35:16

       Yeah.

   20. JCJason Calacanis35:16

       ... 250 to $500 billion company in-

   21. DSDavid Sacks35:18

       Um, Applied Semantics-

   22. JCJason Calacanis35:19

       ... today's market.

   23. DSDavid Sacks35:19

       ... a lot of people miss this, but Applied Semantics was $100 million bet. And that's the entirety of AdSense initially, right?

   24. JCJason Calacanis35:24

       Android, Chrome.

   25. DSDavid Sacks35:25

       Android. Um, you know, and-

   26. CPChamath Palihapitiya35:27

       Right. Is this- is this the first commercial application of DeepMind? Because until now, you know-

   27. DSDavid Sacks35:33

       No.

   28. CPChamath Palihapitiya35:33

       ... they've had AlphaZero to sp-

   29. DSDavid Sacks35:34

       So there- there was a period of time, a lot of people, I don't know if... Uh, l- let me just think about this for a second. All right, 'cause I was-

   30. CPChamath Palihapitiya35:42

       Because AlphaZero-
5. 47:07 – 59:21

   Republican party misfires, Georgia runoff implications, can Trump pre-pardon his family, Biden's effective strategy so far

   1. JCJason Calacanis47:07

      I mean, what is going on? Sacks, let's throw to you as our resident right-wing, uh-

   2. DSDavid Sacks47:12

      (laughs)

   3. JCJason Calacanis47:13

      ... joking, joking. Sacks, don't take it so personal.

   4. DSDavid Sacks47:15

      (laughs)

   5. JCJason Calacanis47:15

      We know you didn't vote for Trump. We know you did a write-in vote for-

   6. DSDavid Sacks47:19

      Boo.

   7. JCJason Calacanis47:19

      ... for Tucker Carlson. Let me ask you this.

   8. DSDavid Sacks47:23

      Am I ... Yeah.

   9. JCJason Calacanis47:23

      Have you ha- have you or have you not had dinner with Tucker Carlson?

   10. DSDavid Sacks47:28

       Um, well, let me-

   11. JCJason Calacanis47:29

       That's a big pause. (laughs) I call. (laughs) Call in.

   12. DSDavid Sacks47:32

       Um, I- I've actually ... Uh, yeah, I, I, um ... No, I don't think I've had dinner with Tucker, but, um-

   13. JCJason Calacanis47:37

       You've been to a party with Tucker Carlson at Peter Thiel's house.

   14. DSDavid Sacks47:40

       No. No. But let me, let me, let me get, uh ... He- he- here's what's happening is ... Well, I feel my dream of gridlock in Washington for the next four years is slipping away. Um, you know, the, the, the, uh, you know, I describe this as sort of like it was kind of a dream scenario that you'd have, um, a d- a divided, uh, Congress. And the Republicans, you know, they won 50 ... They won 50 seats in the Senate in November and then, you know, because of the stupid rule in Georgia that you have to ... you can't just win, you have to win by having over 50%, um, the Republicans would have had, uh, 51. But now there's, there's a run off for these two open seats. And the Republicans were ahead in the polls at the time. They were the more ... And I think it was mostly it's based on the candidates being more popular than the Democratic candidates. But now because of all these antics around the election, the Democrats have ... both Democratic candidates have pulled ahead.

   15. JCJason Calacanis48:36

       Wow.

   16. DSDavid Sacks48:36

       And so it's ... Yeah. They are now ... Both Democratic can-

   17. JCJason Calacanis48:39

       When did that happen?

   18. DSDavid Sacks48:39

       In the last couple of da- last week or so, um, OSUP is ahead of Perdue by about two points, which is a stunner because Perdue has already beaten him before. He beat him in the November election. He's, I think, a better candidate-

   19. JCJason Calacanis48:54

       Well, that's margin of error though, right? And the, and the margin of error-

   20. DSDavid Sacks48:56

       It is margin of error but Warnock-

   21. JCJason Calacanis48:56

       ... always swung to the Republican.

   22. DSDavid Sacks48:57

       Right. But Warnock is seven points ahead of, uh, Loeffler. So that one is outside the margin of error. He's clearly ...... uh, beating her and, um, it, you know, and now it looks like Purdue's in danger too. The Republicans just need to win one of those in order for us to have, you know, divided government in Washington, which I think tends to produce better results than giving one party all the levers of power. Um, but, but, this is, this is the crazy thing. And so I think even from Trump's point of view, you know, I think this is a branding exercise to, you know, prove that he didn't lose. The problem is if-

   23. JCJason Calacanis49:35

       Yeah, how's that going? (laughs)

   24. DSDavid Sacks49:37

       Well, it's not working, and it looks like it's going to cost Republicans the Senate, which is something that I think he won't come back from. So if I was advising the president, I would tell him to drop this, you know, these, these legal challenges. They fired Sidney Powell from the legal team, which I think was a good decision because of her crazy wild allegations. But now Rudy's out there doing-

   25. JCJason Calacanis49:56

       Rudy, Rudy Giuliani. (laughs)

   26. DSDavid Sacks49:59

       (laughs) True.

   27. JCJason Calacanis49:59

       (Tony laughs) Oh, no. Oh.

   28. DSDavid Sacks50:01

       Rudy Giuliani.

   29. The answer that I gave you is they didn't bother to interview a single witness.

   30. JCJason Calacanis50:06

       (laughs) Rudy Giuliani. He was adjusting.
6. 59:21 – 1:05:23

   Trump's Section 230 gambit, will Trumpism fade away?

   1. CPChamath Palihapitiya59:21

      I mean, the other thing that could tip Georgia is this whole craziness where Trump is like, "I'm going to veto the- the defense bill unless we repeal Section 230." And if you're, you know, um, a military person in Georgia, you're like, wait a second. Um, you're going to leave my brothers and sisters in arms basically lollygagging without any financial support because you don't like Twitter's (laughs) tweet policy?

   2. DSDavid Sacks59:48

      Right.

   3. CPChamath Palihapitiya59:48

      It's gonna seem kind of crazy.

   4. DSDavid Sacks59:50

      Yeah, it was- it was one of these, like, classic Trump moves where you feel like, I- I think he does have a good point with respect to the- the social media companies. I do think they've been engaging in censorship. They've overstepped their bounds. They are- they- they do deserve some sort of co- comeuppance or control. I personally don't think that repealing two- ooh- 28, uh, 230- was it 280? Um, is the, uh, Section 230 is the way to go. Um, it's, um... for a bunch of reasons that we could get into if you want, but, um, but- but yeah, it was one of these like, reflexive Trump- Trump, you know, tweets. And y- you heard Republicans in- in the Senate were very, very quick to shoot it down. Um, and you know, there was an article in Politico where, um, Republicans were quoted, well, anonymously, saying they're pretty sick of this shit. That was the quote. (laughs) And so, yeah, I mean, I think that Republicans on Capitol Hill are kind of ready for- for- for those types of antics to be over.

   5. JCJason Calacanis1:00:51

      Okay, should he, uh, or will he pardon himself and the kids? Like, I mean, I guess that's what it comes down to. And then we'll-

   6. CPChamath Palihapitiya1:00:59

      Well, I think we should move on. I- I think... I don't- I don't- I don't think so. And I don't think it'll matter because I think Biden will leave him alone and it will not help...... his biggest risk. Uh, and this is by the way why they tried to get Jay Clayton to resign from the SEC and move over to the Southern District of New York, because they thought maybe he could run some kind of interference. But, I mean, I think the state AGs will want a pound of flesh here.

   7. JCJason Calacanis1:01:21

      And, and-

   8. DSDavid Sacks1:01:21

      If I-

   9. JCJason Calacanis1:01:22

      ... should they-

   10. DSDavid Sacks1:01:22

       If I were- If I were advising-

   11. JCJason Calacanis1:01:23

       ... or should he move on?

   12. DSDavid Sacks1:01:24

       Yeah, just... If I were advising Trump and, and advising him on how to pres- maximize his legacy, it would be, you know, pardon, pardon people in the administration been treated unfairly. There's no need to pardon yourself. Um, I don't, I don't think he has federal exposure. Um, and I would, and I would tell him that, you know, if Republicans lose these Georgia Senate seats, that he will be blamed for, uh, among the base for a long time. And that I think will be hard for him to get past, uh, in four years. And so it's very important, I think, for him to make sure that the... at least Purdue wins his election.

   13. JCJason Calacanis1:02:03

       Yeah. What do you guys-

   14. CPChamath Palihapitiya1:02:06

       Okay. Can I ask-

   15. JCJason Calacanis1:02:06

       If he d-

   16. CPChamath Palihapitiya1:02:06

       Can I ask another question?

   17. DSDavid Sacks1:02:07

       Yeah.

   18. CPChamath Palihapitiya1:02:07

       What do you think is gonna happen with... Um, so Trump is trying to make his case, um, but no one's listening. Twitter keeps putting up his fraudulent, you know, uh, um-

   19. JCJason Calacanis1:02:19

       This is disputed.

   20. CPChamath Palihapitiya1:02:19

       ... claims, disputed claims thing. And he's been pushing Newsmax and OANN. Do you think those become viable and real kind of media businesses now? And are they actually gonna steal an audience away from Fox News?

   21. DSDavid Sacks1:02:33

       100%. It's already happened. It's just the increasing fragmentation of media, right?

   22. CPChamath Palihapitiya1:02:38

       But the, the cable networks don't pick them up, do they?

   23. DSDavid Sacks1:02:41

       Uh-

   24. CPChamath Palihapitiya1:02:41

       The ca- the cable companies?

   25. DSDavid Sacks1:02:43

       I've seen-

   26. CPChamath Palihapitiya1:02:43

       Like-

   27. DSDavid Sacks1:02:43

       I've seen Newsmax. Newsmax has a cable channel.

   28. JCJason Calacanis1:02:45

       I- I- I... My theory is this entire twisted, like, crazy right, alt-right mania just fades into oblivion, and the-

   29. DSDavid Sacks1:02:54

       No.

   30. JCJason Calacanis1:02:54

       ... Republican Party reinvents itself.
7. 1:05:23 – 1:26:14

   Trust Fund socialists

   1. DSDavid Sacks1:05:23

   2. CPChamath Palihapitiya1:05:23

      The other, the other thing is, and you know, un- unless all of a sudden the, the folks that are in their 20s and 30s are radically different than many, many generations before them, the reality is that they will, as they get older and wealthier, generally speaking, get more conservative. And we are about to go through, over the next 20 years, $30 trillion of wealth transfer. And so, you know, I mean, you can wear-

   3. JCJason Calacanis1:05:49

      Good segue.

   4. CPChamath Palihapitiya1:05:50

      ... butt buttons on buttons on flannel.

   5. DSDavid Sacks1:05:52

      (laughs)

   6. CPChamath Palihapitiya1:05:52

      But at the end of the day when your, you know, mom and dad pass s-... pass away, and all of a sudden, you know, you have 4, 5, 6, 7, 8 million bucks and you have to think about your children and your children's children, I tend to think people generally do, very predictably, get more conservative. And so again, another reason why you can't count on, um, a, a staid interpretation of progressivism. It... There will be progressivism. I think it just will be a different form of policy, and it'll just be more moderate and centrist, and it'll be normal. Uh-

   7. DSDavid Sacks1:06:26

      Right.

   8. JCJason Calacanis1:06:26

      Which is a perfect segue to The New York Times story that came out on the Friday after Thanksgiving, November 27th, "The 'rich kids who want to tear down capitalism,' Socialist-minded Millennials, Millennial heirs are trying to live their values by getting rid of their money." Lately, Sam Jacobs, and I'll read just a little bit of it, has been having a lot of conversations with his family's lawyers. He's trying to gain access to his trust of 30... his $30 million trust fund. At 25, he's hit the age where many heirs can blow their money on harebrained businesses or a stable of sports cars. He doesn't want to do that. But by wealth management standards, his plans are just as bad. He wants to give it all away. "I want to build a world where someone like me, a young person who controls tens of millions of dollars is possible." A socialist since college, Mr. Jacobs sees his family's extreme plutocratic wealth as both a moral and economic failure. His parents must be very proud of him.

   9. CPChamath Palihapitiya1:07:14

      Well, first of all, Sam Jacobs-

   10. JCJason Calacanis1:07:16

       (laughs)

   11. CPChamath Palihapitiya1:07:16

       ... sounds like an idiot, and he shouldn't have any money.

   12. JCJason Calacanis1:07:18

       (laughs)

   13. CPChamath Palihapitiya1:07:18

       So hopefully he gets his wish and we give him money.

   14. JCJason Calacanis1:07:20

       Why did his parents give him $30 million? This trust fund should be, like, given to somebody who deserves it, like-

   15. CPChamath Palihapitiya1:07:24

       ... yeah, but- but what- what Sam-

   16. JCJason Calacanis1:07:26

       Give him three.

   17. CPChamath Palihapitiya1:07:27

       ... what Sam, what Sam, what Sam Jacobs wants doesn't mean that Sam Jacobs gets to decide for everybody else. And just because that he wants to live in a communist country, he can go and find one. And the reality is, like, you know, we just talked about AlphaFold. Well, guess what? You know, there's four of us on this, on this podcast today, that over the next 20 or 30 years are more than likely going to invest hundreds of millions of dollars in protein design. And, uh, I don't do that with any, um, sense of, um, shame. Um, and I'm glad that Stewart Butterfield made me, you know, a lot of money, because it's gonna go, go back into the world in positive ways. And, you know, maybe if my children are taught properly, um, they'll be able to take a small piece of that and they'll decide that, you know, there's, uh, something else that's important to them. But the reality is that everybody should be allowed to make their own decisions, and I don't want somebody like him, especially a 25-year-old dipshit, telling me or my kids, who even though they're, you know, under the age of 15 are probably smarter than him, what to do.

   18. JCJason Calacanis1:08:27

       David, when you read this article, uh, if you did read it, uh, what were your thoughts, um, (laughs) especially-

   19. CPChamath Palihapitiya1:08:33

       Yeah.

   20. JCJason Calacanis1:08:33

       ... in regards to parenting and thinking about our own kids. 'Cause that's-

   21. CPChamath Palihapitiya1:08:37

       Yeah.

   22. JCJason Calacanis1:08:37

       ... what I started thinking about, is like, "Oh my God, what if one of my daughters (laughs) wants to take her trust fund and just throw it into the wind?" That I really don't want-

   23. CPChamath Palihapitiya1:08:43

       Yeah.

   24. JCJason Calacanis1:08:44

       ... communist-

   25. CPChamath Palihapitiya1:08:44

       The part... Wait, hold on, I just wanna say one more thing.

   26. JCJason Calacanis1:08:46

       Yeah.

   27. CPChamath Palihapitiya1:08:46

       The part that's completely reasonable and that I respect is this, this, this 25-year-old seems to have come to a decision. What I find completely unreasonable and l- you know, just completely lathered with insecurity, is his need to then project it and say it has to be true for everybody else as well. And, and the, the grand arcing statements of how it should never be, just completely betrays, you know, what we've learned and how society functionally works. Like, if you want democracy, the only sort of economic philosophy that's been partnered with, with democracy to work well is capitalism. And so, if you wanna change one, you're gonna have to change the other. And just the fact that, you know, with all of his education, the hundreds of millions of dollars, you know, didn't get a course in civics to understand that, is kind of sad.

   28. JCJason Calacanis1:09:33

       I just, before you go David, I have to-

   29. CPChamath Palihapitiya1:09:35

       Yeah.

   30. JCJason Calacanis1:09:35

       ... read one comment, because it's so deranged that it almost seems like it was part of a script to, like, some Billions or Succession. Um, "Heirs whose wealth have come from specific sources sometimes use that history to guide their giving." This, that's The New York Times saying that. "Pierce de la Hunt, a 32-year-old socialist, anarchist, Marxist, communist, or all of the above, (laughs) has a trust fund that was financed by their former stepfather's outlet mall empire. When I..." And this is, uh, Mr., uh, Mr., I'm sorry, Mx, I've never seen that before-

Episode duration: 1:32:22