All-In PodcastE166: Mind-blowing AI Video: OpenAI launches Sora + Is Biden too old? Tucker/Putin interview & more
EVERY SPOKEN WORD
155 min read · 30,570 words- 0:00 – 1:19
Sacks Tequila Tasting!
- JCJason Calacanis
Zacks, how's tequila?
- DSDavid Sacks
I tasted 10 samples the other day.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
One was heads and shoulders above the rest, which was a good sign.
- CPChamath Palihapitiya
Oh.
- DSDavid Sacks
So now we're taking that and making it the new baseline and I'm gonna try 10 more samples and we're gonna go from there. I think we're very close to having something excellent.
- JCJason Calacanis
Great.
- DSDavid Sacks
And then I did a, a side by side taste test of the sample I liked the best compared to Clase Azul Ultra and it was already better than Clase Azul Ultra-
- JCJason Calacanis
Hm.
- DSDavid Sacks
... which-
- JCJason Calacanis
Really?
- DSDavid Sacks
... retails for, like, $3,000 a bottle.
- JCJason Calacanis
Really?
- DSDavid Sacks
Yeah.
- JCJason Calacanis
Holy (beep) .
- DSDavid Sacks
So it's gonna be better.
- CPChamath Palihapitiya
V1's better than their final product is what you're saying.
- DSDavid Sacks
Yes.
- JCJason Calacanis
And that was g- not just your taste test, but, like, you and several people?
- DSDavid Sacks
It was me and two other guys who I trust, so we, we did it together.
- JCJason Calacanis
Now, when you say trust, do you mean underlings or do you mean actually, like-
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
No, he means alcoholics. (laughs)
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Yeah. Where in your pay hierarchy are they?
- CPChamath Palihapitiya
He recruited them at Alcoholics Anonymous in, (laughs) in West Hollywood.
- JCJason Calacanis
Are they level two employees or level four employees?
- DSDavid Sacks
No, one, one works for me and one's a consultant.
- DFDavid Friedberg
What you're willing to give.
- CPChamath Palihapitiya
Oh, so they both work for you. (laughs) So they're both on the payroll.
- 1:19 – 15:36
Nvidia's market cap surpasses Google, ARM's stock rips, Masa's big comeback
- DFDavid Friedberg
in.
- CPChamath Palihapitiya
Okay. Are we over or underestimating the impact of the AI boom? NVIDIA has been on an all-time heater. If you don't know, its market cap is now 1.8 trillion, Friedberg. This week it surpassed Google and Amazon as the fourth most valuable company in the world. There it is, folks. Right behind Saudi Aramco. 16 months ago, stock was trading about $112 a share. Since then, share price has gone up 6.5X on a big number. Shares went higher this week after it was reported that NVIDIA plans to build custom AI chips with Amazon, Meta, Google, and OpenAI. In other news, Financial Times reported OpenAI hit a $2 billion run rate for their reoccurring revenue. It's about $165 million a month and they think they can double that number in 2025. Tons of competition coming out. If you didn't see, Google rebranded their generative AI suite to Gemini and they're charging $20 a month for it. And then there was this bizarre Wall Street Journal headline that SAM was gonna raise $7 trillion. That makes no sense. Maybe that was the TAM. We'll get into that. Friedberg, your thoughts on this ascension. Are we underestimating or over-hyping AI?
- JCJason Calacanis
I mean, it seems like the compute buildout is underway, so this is gonna continue for some time. I think the real question that keeps getting asked is, you know, when do you really see the tides recede and what's, what's there? The compute buildout is underway, but are we seeing application and productivity gains associated with the capability of that compute? Some would say yes, some would say no. But you've got to build out the infrastructure if you're gonna assume that there's gonna be these productivity gains in the application layer and everyone's assuming they'll be there, so we need to meet the demand, which is almost like building out an entirely new internet. And so the core of AI is this matrix multiplication problem (laughs) and you need these chips that do that really efficiently. They're not traditional CPUs, which are general purpose chips, but they're chips that are very special purpose for a particular set of applications that render the output of whatever model is being run. It's sort of like the internet. Like, you could pretty much create a bogey of any number on how big this can get. At the same time, you're seeing some of the other players with different architectures and potentially that are gonna be beneficiaries of this buildout because they are participants in other parts of the data center for alternative solutions like ARM. I don't know if you saw this, but in just the last couple of weeks or last week or two, ARM's valuation doubled. It's come down a little bit since that big doubling. Today ARM is sitting at $140 billion valuation. Last week it got as high as $156. And remember, it was only last August... So if you guys remember, ARM was bought by SoftBank and the Vision Fund and then I think 25% of ARM was held by the Vision Fund and 75% was owned by SoftBank. Last August, SoftBank bought, from the Vision Fund, the 25% that the Vision Fund owned at a valuation of $64 billion. So now SoftBank owns 90% of ARM, the last 10% trades publicly, so at $140 billion valuation, SoftBank's position in ARM is $125 billion. And I think it really begs the question, did Masa have a masterful move here yet again? Because everyone said for years with all the bets this guy was making in the Vision Fund and some of the misguided bets he was making with SoftBank and the leverage he was applying on himself and SoftBank to deploy all this capital during the ZIRP era, everyone was saying, you know, this guy had a one hit, it was Alibaba and that was it, and clearly he doesn't know what he's doing. But now all of a sudden his bet on AI was fairly prescient and it's paying off pretty powerfully. He bought the whole business for $32 billion and now he has a, a stake that's worth $125 billion seven years later.
- CPChamath Palihapitiya
Yeah. I mean, chip and a chair, right? I mean-
- JCJason Calacanis
Well, it's really begging the question on, like-
- CPChamath Palihapitiya
... you only need one, the power law, right?
- JCJason Calacanis
... when you're making a long term investment, you can very easily look like a moron over the short term. And to your point, the power law, all it takes is one of them to work out and it can wipe out-
- CPChamath Palihapitiya
Yep.
- JCJason Calacanis
... the losses on the rest of the portfolio and we may be seeing Masa with his whole AI vision story that he's been telling for seven years, we may see Masa clawing his way out of the hole. You only look like a moron to losers. Meaning when people were throwing shade at Masa, it wasn't anybody that's any good. I didn't see headlines that said, "John Malone thinks Masa is a fraud." "Warren Buffet thinks Masa is a fraud." Nobody was saying that.
- DFDavid Friedberg
... because those guys know what the game is. And the game is exactly what you said, Jacob. You must always survive and you need to keep your wits about you. And over time, if you're prepared and do enough good work, you'll get waves of good luck that amplify your hard work. And Masa is a, an example of an incredibly talented person that has found a way to survive, more than anything else. And so waves of success will hit him. The people that complain are the ones that are sort of a little bit stuck on the sidelines and are more frustrated with their own impotence and inability to do anything. Now on Arm specifically, the thing that I would keep in mind is that those guys floated I think about 15 million shares. So there's about a 145, 150 million shares outstanding, 90% owned by them, so there's about 10 or 15 million shares outstanding. And there was about 12 and a half million shares short going into the earnings report. And so the thing to remember is that there was almost an entire turn of the float that was short. So I don't know how much of this reaction was just an enormous short squeeze of people that were largely long other chip companies and so they thought they could short Arm essentially as a spread trade to minimize volatility. But this is an example of where if you don't do this analysis properly, GameStop was another where you misjudge or you sub-analytically look at the actual share count and what's actually free floating, you can get caught on the wrong side and these things can be very violent.
- CPChamath Palihapitiya
And to explain the float to folks, you can make a certain number of shares available to the public to trade. When you have a small number of those, correct Chamath, available to the public, weird things can happen because there's not enough available to short.
- DFDavid Friedberg
That's exactly right.
- CPChamath Palihapitiya
And so that could've been the situation here with this run up, but I think, I think the overall point of placing bets and being a capital allocator is the important one to discuss here. Sacks, what are your thoughts on all the crazy bets that Masa made? We watched a lot of our companies or companies adjacent to our companies get massively overfunded. Some of them literally got drowned in capital, but then you only need to hit one and, and maybe win it all back. What are your thoughts on this high alpha, you know, betting style of his?
- DSDavid Sacks
Look, I mean, he is a gambler and he is playing a power law so he only needs one really big return to basically make up for all the mistakes and it seems like he's hit that.
- CPChamath Palihapitiya
Once again, he did it with Alibaba too, right? I mean this is like-
- DSDavid Sacks
Yeah, I mean he's a major gambler. Most people would be a little bit more risk-averse. I don't think it was a great strategy to be pumping $500 million checks into what were effectively seed companies like they were doing with the Vision Fund. However, obviously he made enough good bets that they're gonna pay off that fund.
- JCJason Calacanis
Well, it's a good point, Sacks. I mean, none of the bi- I, I don't, I, I, I probably need to be careful 'cause I'm not super familiar with the portfolio, but it doesn't seem like any of the big winners were those seed bets. Like, he doesn't have any returns coming out of that kind of investment strategy, but invest-
- CPChamath Palihapitiya
DoorDash. DoorDash.
- JCJason Calacanis
Yeah. DoorDash was not... Like, what point did they invest?
- CPChamath Palihapitiya
Billion or $2 billion round was it?
- DFDavid Friedberg
Yeah, pretty important moment. We've heard at dinner, Jason and I at dinner, we've heard the, the waterfall from the SoftBank side and it sounds like it was an enormous number.
- DSDavid Sacks
Yeah.
- CPChamath Palihapitiya
That was definitely their, their investment.
- JCJason Calacanis
But it was a de-risked business, it was a scaling business. Seems a little different than some of these companies that were fairly early on that got monster valuations and large chunks of capital and then struggled to find ways to deploy that capital, which led to unhealthy behavior.
- DFDavid Friedberg
I think the thing you have to give him a lot of credit for is it's so easy to give up when the peanut gallery is chirping. And so the thing that you have to give him a lot of credit for is he has the ability to tune those people out. Now he probably isn't even living in a world where any of those people, that chirping even gets to him, and I think that that's a very important thing. But kudos to him. I mean-
- CPChamath Palihapitiya
Yeah.
- DFDavid Friedberg
... to be able to tag something for 100 billion here, 70 billion there, I mean, keeps swinging. And by the way, at the end of it all, what is it gonna change for him? Absolutely nothing except he'll have some incredible stories to tell about the vol that he took and the rollercoaster ride he was on. And I think that's gonna be the most valuable thing. He's gonna be able to tell his grandkids these stories and his, their, their eyes will just be like, "What?" And his friends, you know, I mean, I would love to have a dinner with him. I don't know him-
- CPChamath Palihapitiya
Yeah, let's do it.
- DFDavid Friedberg
I don't know him.
- CPChamath Palihapitiya
We should have him on the pod. Come on the pod, Masa. Let's talk about it.
- 15:36 – 51:24
Mind-blowing Sora demos: breaking down OpenAI's new text-to-video model
- CPChamath Palihapitiya
Sora? Did you see Sora? Could try OpenAI.
- DSDavid Sacks
Yeah, I was just looking at this, this is breaking news right now.
- CPChamath Palihapitiya
Yeah, this is unbelievable. If you haven't seen it, Sora is the text video model from OpenAI. They've been talking about this, I guess this, uh, would compete with... Is Stable Diffusion do video as well? Anyway, you give a prompt, I'll just read this one out loud. "Beautiful snowy Tokyo City is bustling. The camera moves through the bustling city street following several people enjoying the beautiful snowy weather and shopping at nearby stall, stalls. Gorgeous sakura petals are flying through the wind along with snowflakes." And this, if you weren't studying it would look like a major feature film or TV show. Yeah, Sax?
- DSDavid Sacks
Yeah, I mean it's unbelievable. I mean, it looks to me like 4K video. I mean, I'm not sure it actually is 4K, but it looks pretty darn close.
- JCJason Calacanis
Yeah, the rendering resolution can be whatever you want it to be.
- DSDavid Sacks
Right, the fact that you can describe the, the way that you want the camera to move.
- JCJason Calacanis
So I'm gonna speculate on this. You guys know I talked about this quite a while ago on how...
- DSDavid Sacks
Yeah.
- JCJason Calacanis
I think we're gonna be a prompt to video, meaning people are gonna have personalized video games and personalized movie experiences and music eventually, where rather than everyone watch the same product made centrally by a producer, we'll all make our own product locally. I spent some time digging into this over the last year, and the big challenge was that the traditional approach for rendering video is you create three-dimensional objects and then you have a rendering engine that renders those objects and then you have a system that defines where the camera goes and that's how you get the visual that you use to generate a 2D movie like this. And the best tool out there is Unreal Engine 5, which is made by Epic Games. I don't know if you guys have ever seen the demos of it, but it's really unbelievable.
- DFDavid Friedberg
Yeah.
- CPChamath Palihapitiya
Is that what Star Wars uses with their, like, virtual sets now when they did The Mandalorian? I think they're using the Unreal Engine or Unity.
- JCJason Calacanis
They probably are and then there's other tools-
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
W- if you're in movie production you'll use different stuff, but Unreal Engine is just so incredible, but it requires the placement and the rendering of 3D objects. So where do those objects go? And then the physics of the light moving off those 3D objects-
- DFDavid Friedberg
Yeah.
- JCJason Calacanis
... to generate a 2D video is pretty straightforward. That's been done for 20, 30 years. And so the, the density, the, the rate of improvement, the color contrast, et cetera has all improved, made it look incredible, now it's super photorealistic, you can create photorealistic video. But it still requires this concept of where are the 3D objects in 3D space. This doesn't do that. This was tr- a trained model, so we don't know what's going on in the model. So how would you train a model to do this without having a 3D space?... because clearly there's thousands of objects in that rendering. If you look at that video, thousands of little objects. The compute necessary to define each of those objects, place them in 3D space is practically impossible today. So this is being done through some model that starts to render all of these things together. So it is very likely, my guess is that OpenAI used a tool like Unreal Engine 5-
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
... and generated tons and tons of, uh, video content, tagged it, labeled it-
- CPChamath Palihapitiya
Hmm.
- JCJason Calacanis
... and were then able to use that to train this, this model that can, for whatever reason that we don't understand, do this.
- CPChamath Palihapitiya
Make the output.
- JCJason Calacanis
But what's interesting-
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
... is that this output, underneath it-
- CPChamath Palihapitiya
Synthetic- you're referring to synthetic training data-
- JCJason Calacanis
E- e- yeah.
- CPChamath Palihapitiya
... is your thesis here. Yeah.
- JCJason Calacanis
Exactly, exactly. And, and, and, but what's amazing about this model is that underneath this, this model on its own has rendered physics. So all of the rules of physics, all of the rules of motion, all of the rules of perspective, all of the rules of how objects sit upon one another next to each other, how fluids move, if you look at some of the other demos on this tool, you can actually see fluid moving. It's rendering-
- CPChamath Palihapitiya
Or hair. Yeah.
- JCJason Calacanis
... the movement of fluid or rendering the movement of hair. Those are, like, physics models that would typically be deterministically written, meaning that a programmer or an engineer writes the physics, and then the, the Unreal Engine renders the physics. In this case, the model figured out the physics and the model probably did it in such a reduced way that you can use a reduced amount of compute to generate something that would otherwise take a ton of compute time. I mean, look at this. It's truly amazing. And I think it-
- 51:24 – 1:04:57
The risks of companies issuing stock option loans
- CPChamath Palihapitiya
I thought I'd bring up a really interesting story that happened just around stock options and employees and advice you're going to get, generally speaking. Just tons of chaos at the startup Bolt. If you don't remember, that's a one-click checkout startup. It was founded by a guy named Ryan Breslow. He's been on my other podcast, This Week In Startups. He went viral in 2022 after he called YC and Stripe, like, mob bosses and had this whole conspiracy theory of how they were trying to kill his company. Don't know if it's true or not. But at its peak, Bolt was valued at $11 billion, Chamath, and they're buying back shares at a $300 million valuation, down 97%, yada yada. What makes this interesting was that in 2022, Breslow announced a new stock option program for his employees on Twitter and he did this in a very bombastic, lecturing kind of way to the entire industry saying that Bolt would offer loans to any employee to exercise their options early. We all know about these type of loans.
- GUGuest
Meaning, from a, from their balance sheet?
- CPChamath Palihapitiya
That is the idea here, yes. And he called it the most employee-friendly plan possible and said that half of Bolt's 600-plus employees took the deal. Uh, he since deleted the entire thread, but at the time, uh, a lot of VCs who'd been through this before, you know, explained to Ryan this is a terrible idea. Here's GGV's Jeff Richards. For what it's worth, almost every private company in Silicon Valley did this in the '90s, was an absolute disaster. Employees spent years paying back loans for worthless stock, tax bills from merely exercising, et cetera, yada yada. And his now-deleted tweet was, "Over half our employees chose this, plus I would strongly encourage my family and friends to choose this, but VCs say it didn't work in the '90s, so it's a disaster." VC Twitter pumps the tweet, "This is why VC-run companies are never able to make strides for employees." Obviously, all those options, at 11 billion, are worthless now.
- GUGuest
But sorry, they did this when they were worth 300 billion?
- CPChamath Palihapitiya
11 billion.
- GUGuest
Whoa.
- CPChamath Palihapitiya
And it was reported that at the same time, in a, a new industry publication, that Breslow was selling his shares in secondary. Breslow confirmed with that newsletter that he had sold 10 million and, uh, sources, uh, anonymous sources, yada yada, take that for what it's worth, said he didn't tell the team he was doing that. Two investors also accused the company of misleading shareholders and raising capital on inflated metrics. SEC investigated, but did not recommend any action. Sacks, Chamath, I don't know if either of you want to take this. This is really mechanical, but it does speak to what happens when things implode. Should employees be taking loans to buy these kind of stocks?
- GUGuest
Yeah, at a minimum, hopefully these loans are non-recourse. And at the maximum, if they were recourse, but it looked like these guys were doing these kinds of shady things, they have to kind of forgive the loans and eat it.
- DSDavid Sacks
There's a reason why almost no one does these types of exercise loans anymore. I mean, whoever the VC was who pushed back was right. I mean, these things were common 20-something years ago. People stopped doing it. And the reason why is that, well, there are a couple of reasons. So the mechanics of the loan are that the company loans you the money to pay down the exercise price, the strike price for the options, and then you're supposed to pay the company back at some future date, basically when you can sell the shares. And in effect, from the point of view of the balance sheet of the company, this was cashless, because it would loan the exercise price to the employee who would then exercise and pay that money back to the company. So everyone's like, "Well, what's wrong with this? This just seems like...... simple mechanics where no one loses. The employee gets to start the clock on their shares for long-term capital gains. That's why they would do it. The problem is that what people discovered is that if the company didn't work out and those shares became worthless, then the employee is still on the hook for the loan. And if they don't pay the loan back, then there's a loan forgiveness issue. In other words, the forgiven amount of the loan, or the defaulted amount of the loan, becomes ordinary income. And so what happens is you end up having to recognize as income the loan that you never pay back. So you can lose. Furthermore, if there's spread at the time that you exercise between the strike price and the fair market value of the shares, then although if, if it's the right kind of option, if it's an ISO, you can defer paying tax on that spread. However, people got whammied by the AMT, that that spread still counted for alternative minimum tax. So there were a lot of people during the first dot-com bubble who exercised thinking they can't lose because the market was always up into the right, and then the company would go bust, and they would get hit with a big AMT and then they would get hit with a loan forgiveness issue. So that's why everyone stopped doing these things.
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
Yeah. I mean, really importantly, getting taxed on that spread, you owe that money no matter what.
- CPChamath Palihapitiya
No matter what.
- JCJason Calacanis
No matter what.
- CPChamath Palihapitiya
No matter what.
- JCJason Calacanis
The IRS demands that money, and the Cal- California Franchise Tax Board demands that money. So l- and, and I just wanna be very specific so people understand this. If the value of your company's gone up to $2 a share as a private company and your options are 10 cents a share, you pay 10 cents a share to get those shares, you owe tax on the $1.90 difference. And ultimately, if the company's now worth less than a dollar when you're finally able to sell or it shuts down, you actually have money you have to pay to the IRS and Franchise Tax Board, and you did not make enough money to cover the tax bill. The way a lot of these companies do this is they do a cashless early exercise or cashless exercise loan, meaning you don't even have to put money up to, uh, to pay the 10 cents a share. The company is just covering it for you. To Sax's point, you end up getting taxed for that later if you don't pay it back. So the whole thing creates a lot of tax obligations, and it's a very complicated structure and system. And the reason options exist is so that people could buy their options and not have to pay taxes at the time that they receive them. Because if you just get shares in a company rather than options, the value of those shares is your tax bill even if you can't sell the shares.
- CPChamath Palihapitiya
Well, it's income.
- JCJason Calacanis
So... It's income. And so options were created as a way that you would have a strike, and the strike was the fair market value. So you're actually not getting any value today, and so you can avoid the tax bill. But now it leads to all these other tax loops, all these other tax consequences. Yeah.
- CPChamath Palihapitiya
This is way too complicated for rank-and-file employees, is what it comes down to. Like, I-
- JCJason Calacanis
Totally.
- CPChamath Palihapitiya
... I saw this with, like, senior executives trying to get, like, the top five positions, you know, a CFO or something, or CTO might do this.
- JCJason Calacanis
And the whole thing is to, is to reduce your tax bi- bill-
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
... from 50% to 20%.
- CPChamath Palihapitiya
Yeah.
- JCJason Calacanis
And at the end of the day, you open up all of these other problems if you try and do that.
- CPChamath Palihapitiya
Completely.
- DSDavid Sacks
One of the stupidest things about the way this was used is that they would give the exercise loan to employees who were leaving the company because they said that, you know, normally when you're a, a departing employee from a company, you have three months to exercise your options or you, or you lose them. So they were saying that this would be a solution to that, right? "We'll loan you the money to exercise." All they were doing is creating a huge tax problem for that former employee. And you're right. The average employee is not sophisticated enough to navigate all of these issues. It's not clear also why you'd want to create this complicated benefit for departing employees. It seems like if you're gonna do this, it- you would wanna do it for a key exec who's joining the company. That's the only context in which I've seen it, by the way.
- CPChamath Palihapitiya
Yeah, same. Yeah.
- DSDavid Sacks
So they were trying to solve a problem using this complicated device that, that really backfired, but it's not even a problem that you should try and solve in that way. I mean, there's a much simpler solution, which is extend the period of time that employees have to exercise. If you don't want them to lose their option if they don't exercise within three months, give them 10 years. And there are a bunch of companies that have done that, where they give you a lot longer to exercise the option.
- CPChamath Palihapitiya
The trend I'm seeing with startups, like early stage startups, seed stage startups, which are really indicative of what startups will do later on, hiring people, cash basis, paying them hourly, outside the United States, not having to worry about stock options, not having to worry about healthcare, just finding a global workforce and using these third-party tools. There's a lot of third-party tools to manage employees in Portugal or Manila or Canada or whatever, South America, and they're just saying, "You know what? Stock options are gonna be for, like, an elite group, the top 10% of the company, and then we're gonna automate the rest of the jobs with AI, and we're gonna outsource and have hourly workers or full-time contractors outside the United States." It's the undeniable trend.
- 1:04:57 – 1:31:46
Biden's cognitive decline, should the Democrats find a replacement? Plus, third party viability
- CPChamath Palihapitiya
All right, Sax, here's your readme. Did you see the poll about Biden's age and h- the unfavorable percentage of people who think he is too old?
- DSDavid Sacks
How can I not see that?
- DFDavid Friedberg
I think the most important thing that we should talk about is that President Biden has decided to not go through a cognitive test as part of his annual physical.
- CPChamath Palihapitiya
All right.
- DFDavid Friedberg
It's the first time it's ever happened.
- CPChamath Palihapitiya
Joe Biden now 81 years old, 82 at the start of his second term if he wins. He'll be 86 at the end, making him by far the oldest president ever. Trump is 77. He would be 78 and a half when he, uh, gets his second term if he won. 82.5 at the end of his term. Here's a histogram of age of presidents. These are the oldest, just to give (laughs) you a... Everybody obviously refers to Reagan as the oldest president prior to this. He was a spry 69 at the start of his presidency, and by the end he was 77, which is younger, obviously, than Biden and Trump today. So, Sax, thoughts? Or Shamath, thoughts?
- DFDavid Friedberg
Let's just say that we've had a bunch of these issues over the last few years. President Trump didn't disclose his tax returns. Is that a huge issue? I think people made it to be a huge issue, but it's more of an issue of judgment. But I don't think it fundamentally compromises his ability to lead the country. You had a different issue, not with the president, but with the current se- defense secretary who had prostate cancer. The disclosures were, let's just say, somewhat suboptimal. He had a UTI. He got emergency admitted to the hospital. He just had another acute issue, and those disclosures weren't good. But you're talking about an acute kind of a thing where if you're incapacitated, there's a chain of command that immediately kicks in. Those are a class of issue that I think-... people can find things that are wrong with, probably correlated to one's political affiliation. The other side probably cares more than the side that the- that the leader's on. But I think this issue is a really big one. And I posted this clip of KJP basically saying, "Nothing to see here, move on." And the first comment was Elon, which I think nailed it. He said, "A basic cognitive test should not be something that someone who controls nuclear strikes is allowed to skip." And I think that that is part of the fundamental issue that I have with what they decided to do here, which is that it just massively increases the risk that you could have somebody that was fundamentally unelected running and making decisions, and I think that is a huge issue. And it's an enormous reason why, for me, this was sort of the straw that broke the camel's back, and why I just absolutely cannot vote for Biden anymore. I was trying-
- CPChamath Palihapitiya
Hmm.
- DFDavid Friedberg
... to find every-
- CPChamath Palihapitiya
There's a new story? Okay.
- DFDavid Friedberg
I was trying to find a lot of good reasons to support him. Stability, normalcy, all of this stuff. But this is not what stability looks like. And I go, again, back to this very simple thing. A cognitive test for somebody that can control the ability for us to go to war, or for us to completely eviscerate entire populations through weaponry that he and he alone controls, should be something that is just mandatory. You can't skip it. This is not a thing where it's a nice-to-have. I think it's a must-have. And in the absence of it, I think it compromises his ability to be a legitimate choice.
- CPChamath Palihapitiya
And we do have a minimum age, Sax. And what Chamath is saying is what the majority of Americans are saying. ABC News ran a poll, 86% of Americans across both parties think Biden is too old to be president. 59% both- said both Biden and Trump were too old. You said on a previous episode, Sax, that you thought the public should decide not to, and that there doesn't need to be a cognitive test. Are you sticking with that, or do you think you're going to maybe move to Chamath's position and mine? Cognitive tests should be mandatory to be president.
- DSDavid Sacks
Well, I think it's a tell that they won't take the cognitive test, because they're worried that he might fail. Just like it was a tell that they refused to do the Super Bowl interview, which the president always does. That's the most softball interview that Biden could possibly have, and they refused to do it, obviously because his aides and advisors are nervous about how that might go. We had the Heuer report come out where the, uh, special counsel who investigated the classified documents case for Biden said that we can't prosecute this guy. He'll be too sympathetic a defendant because he's manifestly senile and he'll come across as an old man who can't remember what happened. So, that's why they decided not to prosecute him. The Babylon Bee had a hilarious headline or take on this, which was, "Man Deemed Too Senile To Stand Trial Still Fit To Run Country." That's the situation we're in. He can't stand for trial, but he's still running the country.
- CPChamath Palihapitiya
Yeah.
- DSDavid Sacks
And the thing that was most damning about the Heuer report was not just what the special counsel wrote, but it was Biden's reaction to it. Apparently, he demanded that he wanted to go out and do a press conference that very day to refute the idea that his memory was bad or that he was senile. And he then did this press conference, and it completely backfired. He came across as kind of an old man shaking his fists, yelling, "Get off my lawn!" I mean, that was basically the- the vibe that he gave to the press. And then, the thing that he got wrong was he confused Egypt for Mexico in regards to the whole crisis in Gaza. So, it would have been one thing if it was just Heuer saying that Biden was senile, but then Biden himself came out and seemed to confirm it by making these mistakes and gaffes. So, they know they have a problem.
- CPChamath Palihapitiya
So, to my original question-
- DSDavid Sacks
Yeah.
- CPChamath Palihapitiya
... would you be in favor, and will you change your position here, that we should have cognitive tests for the presidency of the United States? Yes or no?
- DSDavid Sacks
I think that the real issue is that Biden would fail such a test. I mean, that's the problem, is that he is cognitively-
- CPChamath Palihapitiya
Okay.
- DSDavid Sacks
... impaired. And the thing to realize about these sorts of conditions is they're not static. There's a trajectory to them. So, in the same way that Biden is manifestly worse than he was a year ago, or three years ago-
- CPChamath Palihapitiya
Yeah, when he took office-
- DSDavid Sacks
... or 10 years ago-
- CPChamath Palihapitiya
... he was obviously sharper, yeah.
- DSDavid Sacks
Whatever this condition is, it's going to be worse-
- CPChamath Palihapitiya
Okay.
- DSDavid Sacks
... in a year.
- CPChamath Palihapitiya
I- I wanted to ask you a third time to answer the question, but you're choosing not to answer the question. So, Friedberg, what do you think?
- DSDavid Sacks
Well, look, when you say- whenever you say that, should the president take a cognitive test? Sure, he should take a cognitive test.
- CPChamath Palihapitiya
Should it be the law-
Episode duration: 1:43:41
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