E173: Google buying HubSpot? FTX depositors not made whole, AI job fears, Ukraine joining NATO

1. 0:00 – 7:13

   Meet All-In's new CEO: Jon Haile!

   1. JCJason Calacanis0:00

      All right, everybody. Welcome back to the All In podcast, the number one podcast in the world, episode 173.

   2. DFDavid Friedberg0:07

      (laughs)

   3. JCJason Calacanis0:07

      It's objectively, Freeburg, the number one podcast. I checked, I looked online. And, uh, things are cooking over here, uh, so much so that you may have heard we hired a new CEO. Welcome to the team, our new fifth bestie, Jon Hale.

   4. DFDavid Friedberg0:23

      (claps) Yeah!

   5. JCJason Calacanis0:23

      Golf clap, everybody.

   6. DFDavid Friedberg0:24

      Welcome, Jon.

   7. JCJason Calacanis0:24

      Let's get in there with the golf clap. Yes! All right, Jon, welcome to the program. Your first day was April 1st. It wasn't a joke. Literally was your first day. How has week one as CEO for All In been?

   8. JHJon Haile0:40

      It has been wonderful. Super dynamic. Really happy to be a part of the team.

   9. JCJason Calacanis0:45

      All right, there you have it. Sacks, you were a huge driver of this.

   10. DFDavid Friedberg0:50

       (laughs)

   11. JCJason Calacanis0:50

       You spent so much time interviewing everybody, going through the resumes, checking the references, you know, and you- you really spearheaded this. Oh wait, you did nothing. I forgot. (laughs)

   12. CPChamath Palihapitiya0:59

       Sacks- Sacks-

   13. DFDavid Friedberg1:00

       (laughs)

   14. CPChamath Palihapitiya1:00

       ... it's- it's spelled J-O-N. Jon.

   15. DFDavid Friedberg1:03

       Yeah. Wait, who is this?

   16. JCJason Calacanis1:04

       Sacks, this is Jon.

   17. DFDavid Friedberg1:04

       Who is this?

   18. CPChamath Palihapitiya1:05

       (laughs) Okay.

   19. DFDavid Friedberg1:06

       You guys haven't met. You guys-

   20. JCJason Calacanis1:08

       Jon, David Sack- David Sacks.

   21. DFDavid Friedberg1:09

       Nice to meet you.

   22. JCJason Calacanis1:09

       ... Jon.

   23. DFDavid Friedberg1:10

       Nice to meet you.

   24. JHJon Haile1:11

       Likewise.

   25. NANarrator1:14

       We're going all in. We'll let your winners ride.

   26. JCJason Calacanis1:17

       Rain man, David Sacks.

   27. NANarrator1:20

       I'm going all in. And I said- We open sourced it to the fans and they've just gone crazy with it.

   28. JCJason Calacanis1:25

       Love you, Sacks.

   29. DFDavid Friedberg1:26

       I-

   30. NANarrator1:26

       Queen of quinoa. I'm going all in.
2. 7:13 – 19:26

   FTX Correction: Depositors are not getting "made whole"

   1. JCJason Calacanis7:13

   2. JHJon Haile7:13

      Thanks so much, guys.

   3. JCJason Calacanis7:13

      We got to get going here. We got a big show for you, everybody. Welcome to the show officially, David Sacks, your Rain Man, Chamath Palihapitiya, Chairman Dictator, Sultan of Science, David Freberg. I'm the world's greatest moderator. Welcome to the program. A quick correction up top that many of you in the crypto space let us know about immediately after the episode dropped. We talked about SBF getting 25 years, uh, and that broke right as we started the show, and we discussed that the customers of FTX were going to get made whole. There's been a lot of speculation about them being made whole. However, there was an important note. FTX deposits are getting paid back in US dollars, not their crypto. That dollar amount, we've learned, is based on the price of their tokens at the bankruptcy date. The bankruptcy date was November 11th in 2022. Super important because the report that started the run on FTX was published November 2nd. There's a couple of days in between those two dates, and a bunch of crypto plummeted. Solana dropped, uh, 50% between November 5th and November 11th, as just one example. But since then, Solana has been up 11X and Bitcoin is up 4X, Ethereum doubled. So if you're one of these depositors, you missed that run up. And so FTX customers were rightfully furious. I'll pause there before I get into more details. Any- any thoughts on this, Sacks?

   4. DSDavid Sacks8:41

      Yeah, I mean, just to hit the nail on the head here, if you had left your Solana at FTX, you're going to get $16 per token back, and that apparently was the price at the time that they went under. So according to the- the judicial proceedings, you've been, quote-unquote, "made whole," but the truth is that Solana, at this moment, is trading at $188, so you have not been made whole, and this is why the crypto community is furious. And so that- that basically is the correction. Now, I thought it was interesting that the judge played into this notion, and we talked about that quote from the judge last week, where he said that if you go to Vegas, abscond with your customer's money, gamble it, and then pay them off with the winnings, then you've still committed a crime. He seemed to be conceding this idea that the investors or- or the depositors at FTX have been made whole. Clearly, they have not been, but his quote kind of lent credence to that. And the reason the judge was talking about it is because SBF's lawyers were clearly making this argument...

   5. JCJason Calacanis9:45

      Mm.

   6. DSDavid Sacks9:45

      ... that his sentence should be commuted or reduced, because depositors had been made whole. And I think what you saw in the media coverage is that the reporters were buying into this idea of depositors being made whole. I mean, you guys got this from somewhere, right? I mean, this is what the media coverage.

   7. JCJason Calacanis10:04

      Yeah. Oh, absolutely. Yeah.

   8. DSDavid Sacks10:05

      So the media- the media was doing what it's been doing throughout the FTX case, which is carrying water for SBF, and I believe that this narrative that they're trying to concoct, which we now know is completely false, is designed to serve a purpose. And I think that purpose is to get SBF either pardoned or have his sentence commuted, because Mr. Bankman and Ms. Fried are huge Democratic Party bundlers, and...

   9. JCJason Calacanis10:30

      (laughs) .

   10. DSDavid Sacks10:31

       ... I think the goal here is to create the idea in the public's mind that people weren't really hurt by this. This was just sort of youthful indiscretion or- or hijinks. And, you know, it was a bunch of-

   11. JCJason Calacanis10:44

       (laughs) Hijinks.

   12. DSDavid Sacks10:45

       Hijinks, right?

   13. JCJason Calacanis10:45

       Shenanigans.

   14. DSDavid Sacks10:45

       And no one's... Shenanigans, but shenanigans where no one was really hurt. And if they can create that impression in the public's mind-

   15. JCJason Calacanis10:51

       Yep, pardon my-

   16. DSDavid Sacks10:52

       ... they can now set up getting one of their Democratic Party connections-

   17. JCJason Calacanis10:57

       Yeah.

   18. DSDavid Sacks10:57

       ... to help push for a commutation of the sentence. I think there's a narrative going on. I think there's an agenda behind the narrative, and it's-

   19. JCJason Calacanis11:04

       Interesting.

   20. DSDavid Sacks11:04

       ... it's- what I'm saying here.

   21. JCJason Calacanis11:06

       Yeah, this pardon power is really powerful. Chamath, any- any thoughts here on the bankruptcy judge making that call to sell the shares? Because obviously, if crypto had tanked since that time, it would look like he saved them money by selling them, clearing the positions, and giving them cash. But what is the right thing for the bankruptcy judge to do here? Keep the equities, i.e., the tokens, or to sell it and freeze it in time? It seems like a very difficult call, right?

   22. DSDavid Sacks11:30

       Well, hold on, Jake- Jacob, we gotta correct that for just in- in a certain way. So the trustee has been selling the tokens post-run-up.

   23. JCJason Calacanis11:38

       Okay.

   24. DSDavid Sacks11:39

       The point is that he's selling tokens at current prices, call it 188, and then using that to pay off depositors at $16. So the only reason the depositors have been, quote-unquote, "made whole" is because they're getting the benefit of this run-up, but they're not paying them back at the price of their Solana today. They're paying them at this price that got fixed at the time of the bankruptcy.

   25. JCJason Calacanis12:02

       Which also-

   26. DSDavid Sacks12:02

       So the truth is, this is why no one's getting made whole.

   27. JCJason Calacanis12:06

       Yeah, this is the, you know, the really hard thing to track here because we couldn't find when they were selling it or how much they've been selling. This seems to be being done in the shadows or in the background. And so if anybody out there as we crowdsource what's going on here wants to keep us, uh, up-to-date, let us know. But yeah, these tokens, some number of them got sold at a low price, some of them are getting sold, I guess, as time goes on. Chamath, your just thoughts on how to do this properly. What's the proper hygiene here? I mean, uh, it's- we're not bankruptcy experts.

   28. CPChamath Palihapitiya12:37

       That's a great... No, that's a great question. I don't know the differences between Chapter 7 and Chapter 11 bankruptcy law, but I don't know what was filed here. Was it Chapter 7 or Chapter 11? I don't, I don't know.

   29. JCJason Calacanis12:49

       Hmm.

   30. CPChamath Palihapitiya12:50

       But it seems that this was the only thing that they could do, which was to liquidate into a common, you know, unit of measure. Because at the end of the day, their auditors had to measure in a standard unit, and that was probably the US dollar. And so then they were trying to work backwards from that shareholder equity number to get them back-
3. 19:26 – 27:12

   Trump Media updates

   1. JCJason Calacanis19:26

      news broke about Truth Social. We had a nice spicy discussion about it last week. Since that time, shares of TMTG, or $DJT, have dropped 30% and, uh, the numbers for their revenue also confirmed it came out pretty ugly, four million in revenue, 58 million in losses. Float's only 30 million shares, but there are some follow-up stories here we'll get into. Trump is suing the two co-founders to reduce their combined 8.6 stake to zero. His argument, his co-founders set the company up improperly and mishandled the launch of Truth Social so they should forfeit their stock. These are both co-founders previously on The Apprentice. Trump owns 60% and he stands to receive an earn out of 36 million additional shares in the coming week, uh, worth almost 2 billion. So huge windfall for President Trump coming. In addition to that, Sachs, you're gonna love this. Russia, Russia, Russia. The Guardian is reporting TMTG raised $8 million in emergency funding that might have possibly come from a Russian-linked entity. The SPAC, uh, while it was on hold-

   2. DSDavid Sacks20:28

      Ooh.

   3. JCJason Calacanis20:29

      ... was running outta cash.

   4. DSDavid Sacks20:30

      Russia-linked entity?

   5. JCJason Calacanis20:30

      Yeah. Uh, and you can read this all about this in The Guardian. They tried to raise some money. They wound up raising eight million across two convertible notes from a bank called Paxium, located in the Caribbean, owned by a Russian who is reportedly the nephew of Alexander Smirnov, who used to work in Putin's executive office until 2017. Is this a joke? (laughs) No, I, I, I, I mean, I w- I wish it was a joke because I know I'm gonna get barbecued (laughs) for like, by the, by the Trump supporters in the comments, but it is crazy that the Russians are, uh, are now being- What is the Russian's name? Alexander Smirnov? Isn't that the name of a vodka? (laughs)

   6. DSDavid Sacks21:05

      It kind of is. S-M-I-R-N-O-V. Smirnov? Maybe Smirnov. Trump doesn't even drink. I mean, maybe. Yeah. I don't know if Putin drinks or not. Anyway, uh- No, I said Trump doesn't drink.

   7. JCJason Calacanis21:16

      Putin doesn't drink either.

   8. DSDavid Sacks21:17

      That was a joke. Oh no, Trump doesn't drink. That's true. Yeah. If report-

   9. JCJason Calacanis21:21

      Neither does Bush.

   10. DSDavid Sacks21:23

       Oh really? Is that true?

   11. JCJason Calacanis21:24

       Yeah.

   12. DSDavid Sacks21:25

       So anyway, important caveats to all this stuff. Uh, interesting story though. There's no indication that Trump or Trump media had any idea about the nature of these loans 'cause, uh, they were opaque and, uh, Trump media says it's propaganda and false narrative. Your thoughts on the Trump SPAC, Sachs, and the, and Russia? I know it's your favorite topic. Well, we're... It's gonna be a really long seven months if we're gonna bring up every one of these evidence-free stories of some sort of Russia connection to Trump. I mean-

   13. JCJason Calacanis21:54

       Yeah.

   14. DSDavid Sacks21:54

       ... this article doesn't even make sense. Like you said, here's the giveaway. In the middle of the article, they say, The Guardian does, quote, "There is no indication that Trump or Trump media had any idea about the nature of the loans beyond that they were opaque, nor has the company or its executives been accused of wrongdoing." So then what are we talking about here? Uh, just, there's some guy with a Russian-sounding last name. I mean, literally that's the story. It doesn't even make sense. I don't understand how you can get a loan and not know who your counterparty is. So this whole thing just seems like it's part of the milieu of let's create any connections we can between Trump and Russia. And the giveaway on this was actually a New York Times story that just came out in the past week. It was called Russia Amps Up Online Campaign Against Ukraine Before US Elections. Now, the interesting thing about this story is that it was reporting allegations by Clint Watts, who has apparently been hired by Microsoft to run something-

   15. JCJason Calacanis22:56

       Hmm.

   16. DSDavid Sacks22:56

       ... called the Threat Analysis Center, and his job basically is to find Russian interference in the election. Now, here's what I found interesting about this, is that Clint Watts, that, that name rang a bell for me, and it's because Clint Watts was involved in the Twitter files. So back in January of last year, Matt Taibbi broke this story in the Twitter files that Clint Watts was running the Hamilton 68 dashboard. He was basically behind that project. He's a former FBI agent. What was Hamilton 68? Hamilton 68 claimed that it was tracking 500 Russian accounts on social media who were engaged in manipulation of online discourse. Well, as it turns out, executives inside of Twitter knew who these accounts were, and they were just American accounts, some Canadian accounts. And in the words of Twitter executives, the whole Hamilton 68 dashboard was bulls- (beep) . That was their word. And nevertheless, this Hamilton 68 project that Clint Watts ran put out story after story for years about how the Russians were meddling in American political debates. And these stories, the Hamilton 68 claims became the basis for thousands, literally thousands...... of s- mainstream media stories claiming that Russia was interfering in American politics. It all turned out to be a total hoax, a total fraud. Now, the amazing thing to me is you would think after an expose like this, that it would at least be mentioned in the New York Times that the person they're quoting as saying that the Russians are meddling in our elections, has a previous history of setting up Russia hoaxes, and they don't even mention that despite the Tayeb story. Moreover, it's amazing to me that this Watts guy not only landed on his feet, he got a cushy job at Microsoft running their threats analysis center so that he could put out more of this threat analysis on how the Russians were meddling. I can't imagine a less qualified person to be describing Russia threats than somebody who was caught red-handed manufacturing bogus threats for years.

   17. JCJason Calacanis25:12

       Friedberg, your thoughts?

   18. DSDavid Sacks25:13

       So in any event, Jason, I would just say that, you know, going back to the SBF story, the takeaway there is be careful what you're imbibing from the mainstream media because there's always an agenda. And until this story about Truth Social from The Guardian has a little bit more detail to it that makes sense to me, I'm just gonna put it in the category of more of the same.

   19. JCJason Calacanis25:34

       Yeah. And, you know, the- uh, as I've said on this program before, Russia's explicit strategy is to put their fingerprints on everything and cause chaos like they did with the Internet Research Agency and all the trolling (alarm sound) they were doing the last couple of elections. Friedberg, your thoughts on this? You concerned about the interference in the election?

   20. DFDavid Friedberg25:50

       I'm not gonna-

   21. JCJason Calacanis25:51

       No? Too fast?

   22. DFDavid Friedberg25:52

       ... say my thoughts on this. Yeah. This is- this is nothing I feel like I should be thoughtful about.

   23. JCJason Calacanis25:56

       Okay. Sounds good. All right, and then wrapping up, I had mentioned last episode about the insider trading charges in the company that was the SPAC before they purchased Truth Social and the free- two of the three men have been charged with insider trading, just pleaded guilty. So Michael and Gerald Schwachman made $23 million in illicit profits trading shares of DWAC before the merger was announced. They each pled guilty to one count of securities fraud and face three to five years. Neither was involved with Truth. This is the SPAC that came before Truth and... There it is, folks. So there's your update.

   24. DSDavid Sacks26:37

       What's the relevance of this to being a top issue on The All-In Pod? I just think this is gonna be a really (alert sound) long seven- I think it's gonna be a really long seven months for us till the election if we're going to bring up every mainstream media story that seeks to create a connection between Trump and Russia.

   25. JCJason Calacanis26:49

       Oh, this one's not mainstream media. This is an SEC filing. Yeah. This d- this one has nothing to do with Russia. This is the insider trading one.

   26. DSDavid Sacks26:55

       But you just said it has no connection to Truth Social, so why are we even talking about it?

   27. JCJason Calacanis26:58

       No, no. It's th- these are the people who traded the stock before Truth Social merged with it. This is the SPAC that Truth Social... And they traded when they found out that Trump was gonna be the SPAC that was merged with. So I'm just following up-

   28. DSDavid Sacks27:11

       Okay.

   29. JCJason Calacanis27:11

       ... closing

4. 27:12 – 49:20

   Google considering bid to acquire HubSpot: Price, relevancy, feasible with regulators? Should Google investors be worried or excited?

   1. JCJason Calacanis27:12

      the loop on that. Breaking news, Google is reportedly considering making an offer to hire- acquire HubSpot, trading at $34 billion market cap. This just came out. Reported by Reuters, who cited anonymous sources. Shares up 7% on the news. If you don't know HubSpot, it's an awesome tool. We use it. A CRM that blends marketing, sales, customer service, and all that kind of good stuff. And so here's their quarterly revenue since IPO. They've been public for 10 years, as you pointed out in the group chat, uh, Friedberg, and this has just been slow and steady revenue, power of SaaS, I guess, and a great product. I'm not a shareholder. Here's the quarterly revenue growth on a year-over-year basis, a stock chart, yada yada. Chamath, I guess this is something we've been talking about here, which is M&A and M&A being pushed into the cold plunge and being frozen, and now we see something like this. What does- what do you take from this if it's, in fact, a true report?

   2. CPChamath Palihapitiya28:03

      I mean, I think it's a bit of an odd acquisition, and the reason is that it's become pretty clear for all of big tech that any acquisition that they do is going to be highly scrutinized. And so just from an EV, expected value perspective, if you're gonna try to acquire something and spend the next year beating your head against regulators, why not do it for something that's really valuable? And I would not characterize HubSpot as strategically valuable for Google. I think it's an important ecosystem player and it's probably better off as an independent company. So if I were Google, I'd be trying to buy something much more useful, like Perplexity or something.

   3. JCJason Calacanis28:43

      Hmm. Friedberg, your thoughts on this?

   4. DFDavid Friedberg28:45

      First of all, it's super impressive. HubSpot's been public, they went public at about a billion dollar market cap 10 years ago and today they're trading at 34 billion, so organic... ...ly developed this business and they provide marketing automation software, so basically things like CRM tools, email marketing tools. So when you use advertising tools and you generate leads, those leads come in, what do you do with them? So let's say you're running a website that sells bicycles. People want information on bicycles. What do you do with those people after they get information on your website and how do you track them down and how do you sell them a bicycle? If you're a big enterprise software company and you start to get companies reaching out to you through your website, how do you then convert them? So you use CRM tools, customer relationship management tools. Salesforce is a- obviously a- a behemoth in this space, but HubSpot has this integrated marketing automation and CRM platform for taking leads and then converting those leads and selling products to them. So the sales team and the marketing team uses HubSpot software to operate and- and do their work and do it better. When I worked at Google in 2005, the main thing I worked on is how do we do a better job taking our advertisers and giving them more tools that they can then convert the leads that they're getting into customers? And so one of the first things I worked on in 2004, and then we closed the deal in 2005, was acquiring Urchin, which became Google Analytics, so that companies could better track...... how folks were converting on their website. After they spend marketing dollars on Google, how do you see where those people go on your website and what they're actually doing on the website, and ultimately make your website better so you can sell them more products and more software? And one of the, the things I worked on was CRM. So I had this conversation with the executive team, with Larry and Sergey and others at that time, and we talked about wh- should we buy a CRM company? And we actually had a conversation, they did, with Marc Benioff at the time, and we talked about is there a way to buy Salesforce? And Salesforce went public shortly before Google, and it was more richly valued than I think the appetite was at the time to make this leap to buying a CRM company. We actually spent quite a bit of time meeting with, and I personally spent time meeting with NetSuite, which ultimately got rolled in. I think it was, uh, Larry Ellison was the primary owner of NetSuite. We looked at a few other CRM companies, and this was always meant to be the next solution that you plug into the advertising platform at Google. You get all these leads from advertising, and how do you convert those leads and make them customers? And many of the other things we looked at were things like checkout software and software that would let you run a website to sell your products to customers on the website and so on.

   5. JCJason Calacanis31:28

      Which became Shopify, in a way.

   6. DFDavid Friedberg31:30

      Which became Shopify.

   7. JCJason Calacanis31:31

      Yeah.

   8. DFDavid Friedberg31:31

      And, and we had looked very deeply at doing this at Google, is actually building a product called Google Checkout. It wasn't very successful, but it was to do exactly this, which was to build a, basically a Shopify-type competitor. And so this has always been the natural fit for Google's business. Google made a quarter trillion dollars last year in advertising revenue. And then they didn't make much revenue after the advertising-generated leads because Google doesn't have a great commerce business and they don't have any of these other enterprise tools. So this is a very natural fit into Google's advertising business and taking all of the leads from advertising and better converting them and giving your sales team the tools they need to convert those leads into customers. So it makes great strategic sense. It's been a concept that's been around for 20 years at Google. Certainly, they're going to face regulatory scrutiny, but it doesn't have the same sort of overlap with the ad network businesses-

   9. JCJason Calacanis32:25

      Hm.

   10. DFDavid Friedberg32:25

       ... because they're not very heavily in the ad network business at HubSpot, but it's a really good kind of enterprise software plug- plugin.

   11. CPChamath Palihapitiya32:31

       Some would say acquisitions are one of three types. They are defensive, they are offensive, or they are about reinforcing the status quo. If you had to bucket HubSpot into one of those three things, is this an offensive M&A, is it a defensive M&A, or is this status quo?

   12. DFDavid Friedberg32:49

       I think it gives advertisers more tools that can integrate with AdWords, which is how advertisers spend ad dollars is through AdWords platform. And so as a result, it locks the advertisers onto Google's ad platform, keeps them more engaged.

   13. JCJason Calacanis33:05

       So that makes it defensive.

   14. DFDavid Friedberg33:07

       And so I think that the benefit, to Tomas's point, is that they're going to both protect ad revenue at Google by locking in people on the, on the CRM side, and the marginal impact they'll get from selling CRM services, not that impactful to the business. I mean...

   15. CPChamath Palihapitiya33:23

       If you could spend, let's say with the premium, $50 billion on HubSpot or $5 billion on Perplexity today, which one would you buy?

   16. DFDavid Friedberg33:33

       I think you've got to buy HubSpot. You're protecting, to your point, you're protecting a quarter trillion dollar ad business. HubSpot makes two billion in revenue. So it's 1% of the size of Google's ad business, and it helps you lock in some percentage of that 250 billion. So that's an important strategic acquisition, I think, for Google.

   17. CPChamath Palihapitiya33:51

       So you'd rather buy something in marketing automation in, versus AI?

   18. DFDavid Friedberg33:56

       I think they should spend the money in AI, but I think you have to buy something to-

   19. JCJason Calacanis34:00

       Hm. That's a good question.

   20. DFDavid Friedberg34:01

       ... to further the revenue model. Yeah.

   21. DSDavid Sacks34:03

       What does Google accomplish here that they couldn't do with an integration?

   22. DFDavid Friedberg34:07

       A partnership, you mean?

   23. DSDavid Sacks34:09

       Well, I mean, uh, uh, they could just build on HubSpot's platform, just create a connector between Google Ads and HubSpot-

   24. DFDavid Friedberg34:15

       Yeah, I think that exists already, actually.

   25. DSDavid Sacks34:16

       Wh- ex- exactly. So what's the point?

   26. DFDavid Friedberg34:18

       Yeah.

   27. DSDavid Sacks34:18

       What do you- I don't really understand what they get.

   28. CPChamath Palihapitiya34:19

       Roach motel. R- what... I think what Friedberg is saying, in nicer language, is y- they're going to make it a roach motel.

   29. JCJason Calacanis34:24

       Lock in.

   30. CPChamath Palihapitiya34:25

       You get in and you can't get out.
5. 49:20 – 1:11:17

   AI job loss fears go mainstream, potential for autonomous domestic robots in next five years

   1. JCJason Calacanis49:20

      for sure. All right, if you missed it, Jon Stewart did a segment on AI on The Daily Show. He came back. He's doing, I think, Mondays every week, and it went viral, and it was about how AI is gonna change our jobs faster than any previous labor revolution. So it seems like the public is starting to get an idea, uh, about AI wiping out large swaths of jobs, and it's starting to hit the mainstream. CEOs like Brian Chesky from Airbnb and Levey from Box, I had them on This Week in Startups less- in the last year, they said they anticipate 30 to 50% productivity gains for a lot of the jobs in their companies, developers, customer support, all that stuff. And we covered Klarna's AI customer support agent doing the job of 700 full-time employees and driving a $40 million increase in profits this year, yada, yada, yada. We've, we've talked about this over and over again, but it seems to be tipping over into public consciousness. We, Chamath, have talked about whether humans will find more work to do or if this is gonna truly displace people. I think we all kind of feel like, at least to the best of my memory, we all feel like new jobs will be created, but it is entering the public's consciousness. What impact is that gonna have if the public starts thinking AI is gonna take their job, Chamath?

   2. CPChamath Palihapitiya50:32

      I mean, I think that social media will make this perception more widespread than it's been at other moments of revolution-

   3. JCJason Calacanis50:39

      Mm-hmm.

   4. CPChamath Palihapitiya50:39

      ... and innovation, but we've gone through this before. I'd like to summarize my thoughts in three charts.

   5. JCJason Calacanis50:45

      Okay.

   6. CPChamath Palihapitiya50:46

      And I call this, This Time It's Not Different. So chart number one for those (laughs) watching on YouTube is a look at the components of US GDP. This is from-

   7. JCJason Calacanis50:56

      Mm-hmm.

   8. CPChamath Palihapitiya50:56

      ... the Bureau of Economic Analysis. Now, this goes from 1929 up to 2011. So it doesn't go all the way back to the 1800s, and we're missing the last decade. But the point is the following, if you can see the chart, I'll, if you can't see it, I'll describe it to you, which is that GDP, the components of GDP are surprisingly resilient and roughly the same over long stretches of time, which is that even though GDP goes up, consumer consumption is always around 70%, net exports are a few percent plus or minus, gross domestic investment is around the 20% level, and then government consumption is around the 20% level, and that's what adds up to GDP. So that's an important thing to note. Why? Because in the absence of something very acute like World War II, these things don't change over long periods of time. Okay, so if that is true, what happens when you have any kind of a revolution? So let's look at the Industrial Revolution, so the shift from farms to factories. And what you saw was exactly what people should be worried about with respect to AI, which is in specific job classes, things just fall to zero. So unemployment basically went to zero, and the income associated with those jobs also went to zero. So this is what people are worried about.

   9. JCJason Calacanis52:16

      Hmm.

   10. CPChamath Palihapitiya52:16

       But if you remember the last chart, the point is somehow we found a way to find growth, and this is what's demonstrated on this final chart, which is when you look at US productivity and worker compensation, this is going from World War II to today, you find that every time we find a new way of innovating, compensation tends to track it.

   11. JCJason Calacanis52:39

       Hmm.

   12. CPChamath Palihapitiya52:40

       So if you take these three things together, number one, which is the components of GDP rarely change, number two is that, yes, there are certain categories of jobs that always get disrupted away, but the third is the most important, which is that as productivity goes up, which is what AI should give us, just as we've seen in the past, compensation also goes up, which means new job classes will be created. So I think the macro picture, if you look back hundreds of years, is that this is like many other moments in time. It feels more personal right now because we're all living it, right? None, few of us lived the agrarian to Industrial Revolution.

   13. JCJason Calacanis53:16

       Yeah. No, (laughs) we missed it.

   14. CPChamath Palihapitiya53:17

       And few of us lived the technological revolution, right? We kind of came in at the heels of it, but I suspect that this time is not different.

   15. JCJason Calacanis53:25

       Freeberg, your thoughts on this? I think you've said something similar on, on past episodes. But it is kinda tipping and into public consciousness, and it's also affecting white-collar jobs this time, not just people in fields picking berries. And so those people may be a little more vocal, and we've seen massive layoffs in tech, massive layoffs in media, and those jobs don't seem to be coming back. People seem to be get, taking the gains and just having people on the team be 30% more efficient, as Brian told me on my other pod. (laughs) So what do you think, Freeberg? Is this time different, or is it the same?

   16. DFDavid Friedberg54:02

       So here's this article from June 2nd, 1983 in The New York Times all about how computers are eliminating jobs in industries that were effectively offline knowledge work industries at the time, creating engineering designs, creating architectural drawings. I think this article spoke to the fact that these jobs were going to be eliminated, and as we all know, those jobs actually got enhanced by computers, productivity went up, and new sub-industries emerged. And in fact, the overall industries actually grew in some cases when we were fearful of them being replaced due to the automation enabled by software. So-I think that in this particular sense, we can talk about the industrial revolution enabling through manufacturing systems and centralized production, uh, a replacement of manual labor with machines. What we're talking about now is the replacement of knowledge work that has been aided by computers with machines, so the machines no longer even need the human. But the reality is that these systems are actually gonna give humans 10 to 100X leverage. So, when you think about that, one person could spend three weeks making an architectural drawing today. What if that one person could make an architectural drawing every six hours?

   17. JCJason Calacanis55:18

       Hm.

   18. DFDavid Friedberg55:19

       So, the question then is do- do we stop making architectural drawings and we fire a bunch of architects? Or does the cost of making an architectural drawing drop by 90% and it enables us to do more detailed, higher resolution architectural drawings across more places, more frequently, and the industry actually booms. And what we've seen historically is that when productivity goes up, costs go down, the actual volume balloons and the economy grows. So, it- it's a- it's an example where I think in this particular case, we will see these tools creating more leverage for knowledge work instead of just simply replacing knowledge work, and that humans will start to shift to a higher order of work and we'll see the economy grow and productivity go up, uh, as a result. So, uh, so I think that's my kind of key read on- on- on the story, but it's very hard to connect the dots for people without having all of these historical cases, and I think one of the ways to think about doing this usefully is you go back to the software revolution and all the stuff that we were doing with pencils and papers before computers. We actually didn't lose all those jobs. The people could now do 100 times or 1,000 or a million times as much work and new industries emerged and productivity went up and the economy grew. And so we just have to have this- this realization as this starts to take hold that the industries will change and that the systems will actually provide leverage, not replacement.

   19. JCJason Calacanis56:45

       Yeah, this is such a good point, and I think h- what you teach your kids is like really important at this moment in time. Like having a job that is replaced by AI or that could be greatly replaced by AI might be a mistake, and if you think about being a conductor, Friedberg, or a maestro, uh, conductor of an orchestra, I think that's the job of the future is can you work with these agents? Forget about co-pilots, 'cause that's phase one of all this-

   20. DFDavid Friedberg57:09

       Oh.

   21. JCJason Calacanis57:09

       ... but agents are phase two where you have an agent who's writing copy, who's ch- the HubSpot example you gave before. You know, a designer who's in the cloud who's an agent, an AI agent making you artwork and then you stitch all these things together. I've been loading ChatGPT with my kids constantly, asking history questions and whatever questions they want. I've been teaching them how to use ChatGPT.

   22. DFDavid Friedberg57:31

       That's great. Yeah, I mean, I think it's like a- like there's this whole transition of humans doing manual labor to doing knowledge work.

   23. JCJason Calacanis57:38

       Mm-hmm.

   24. DFDavid Friedberg57:39

       Where you're using software to create digital output to now having more folks spend more of their time being conceptualists or creators where you can-

   25. JCJason Calacanis57:47

       Yes.

   26. DFDavid Friedberg57:47

       ... kind of be an ar- architect or a creator of something and the system just generates it. You know, you- you state your intended objective and the system solves for it.

   27. JCJason Calacanis57:56

       Yes.

   28. DFDavid Friedberg57:56

       As opposed to, hey, I gotta go build the Excel spreadsheet and check the formula in every cell and do all the manual.

   29. JCJason Calacanis58:02

       Yeah.

   30. DFDavid Friedberg58:02

       What if I just say, "Hey, here's what I want the model to do. Please generate it for me," and you get the result? It enables you to do 100 times more work.
6. 1:11:17 – 1:18:17

   Blinken says Ukraine will join NATO: WW3 risk, election implications

   1. DFDavid Friedberg1:11:17

      the spend.

   2. JCJason Calacanis1:11:17

      All right, some more breaking news here during the program. We'll get our war correspondent, our geopolitical expert, David Sax. What are you seeing on the wires, Sax?

   3. DSDavid Sacks1:11:28

      Well, there's a NATO meeting going on right now and Blinken did a press conference where he says that Ukraine will be joining NATO. That's the big news going viral right now.

   4. ABAntony Blinken1:11:38

      Ukraine will become a member, uh, of NATO. Uh, our purpose at the summit is to help build a bridge to that membership, uh, and, uh, to create a clear pathway for, uh, for Ukraine, uh, moving forward.

   5. NCNATO / EU official (Ukraine-NATO clip)1:11:53

      Uh, of course we believe that Ukraine deserves to be a member of NATO and that this should happen sooner rather sooner, sooner rather than later.

   6. JCJason Calacanis1:12:02

      Chamath, any thoughts on this flip that just broke during the program?

   7. CPChamath Palihapitiya1:12:08

      Well, we just... I think NATO just added Sweden, right? And it was done in pretty record time from application to admission. So I would like to know whether... Is this just rhetoric to just keep everybody at bay and placate the Ukrainians or is this real? The problem that this creates is that if it is real and they're admitted, then NATO has to defend Ukraine. Which means that then America and all the other NATO allies would have to fight, which means that we're in a war. America should not be in a war.

   8. JCJason Calacanis1:12:46

      Just, uh, give you the exact facts, you are correct. Sweden, Finland applied to join in May 2022, following Russia's invasion of Ukraine, and they had been neutral, as you know, for many decades. Finland-... has a massive land border with Russia, and they joined in April of 2023 after applying in May of '22, so just a year later. And Sweden became a member in March of 2024, just two years later. At first, membership was held up by both Turkey and Hungary. Sachs, you're our resident expert on Ukraine and all things geopolitical. Your thoughts?

   9. DSDavid Sacks1:13:20

      On the one hand, what Blinken is saying is more of the same here, because it's been the administration's policy to s- seek to bring, uh, Ukraine into NATO since they took office. They've reiterated that over and over again, and it's one of the major reasons for this war, is that the Russians said over and over again this was a red line for them. That's why there's a war in Ukraine. The idea that you're gonna be able to bring Ukraine into NATO, however, when the war is going so badly is now entering the territory of being delusional. I mean, this is, like, a delusional comment. And if you just want to understand how badly things are going, look at yesterday's Politico, which was called, "Ukraine Is At Great Risk Of Its Front Lines Collapsing." The source for this article was high-ranking, uh, Ukrainian officials close to Zaluzhnyi, who's the former Commander-in-Chief. Some people have speculated that Zaluzhnyi himself might be the source. But at a minimum, it's high-ranking Ukrainian officers who reported to Zaluzhnyi. And what they say in this article is that the prognosis in Ukraine is grim. They say that the sad truth is that even if the funding bill is approved by the US Congress, a massive resupply may not be enough to prevent a major battlefield upset. They say that there is a great risk of the front lines collapsing wherever Russian generals decide to focus their offensive, which people expect in the next few months. And there's nothing that can help Ukraine now because there are no serious technologies able to compensate Ukraine for the large mass of troops Russia is likely to hurl at us. This is a quote from one of the Ukrainian officials. "We don't have those technologies, and the West doesn't have them as well in sufficient numbers." So, what they're saying is that even if the funding bill goes through, the 61 billion, it's not gonna be enough to save Ukraine. And at the very moment that that is now being finally, honestly reported by Western media, it's something I've been saying now for months, finally the truth is coming out, you have Blinken doubling and tripling down on these comments that nevertheless Ukraine will be joining NATO. And Chamath is right. Under Article 5, an attack on one is an attack on all. Therefore, if Ukraine becomes part of NATO, an attack on Ukraine by Russia, which is currently ongoing, will be considered an attack on the United States. Then you have to add to the mix the fact that Macron and other European leaders have actually been advocating for NATO to sending ground troops. And he's said this over and over again. He's doubled down on this multiple times. So, you have a dynamic now where this isn't just hot rhetoric by Blinken. This really has the risk of tipping over into policy, I would say in a Biden second term, where Biden agrees to do what our European allies are already calling for, which is send in NATO troops to Ukraine to save Ukraine from what Politico calls an imminent collapse. I think this is a very dangerous situation. I mean, what we're really talking about here is World War III. So, if you want to have a serious chance of World War III in the next four years, then I would say go ahead and vote for Biden in November. I mean, this is just very clear to me. I'm personally not willing to accept that risk. I'm not willing to accept a 10% or 1% risk of that chance. But I think Blinken putting it on the table here. I think people should be deeply concerned about this, and there should be a lot of follow-up questions for Blinken and the administration about this.

   10. JCJason Calacanis1:16:45

       Freeburg, should the free country of Ukraine be able to join NATO on some timeline, or should they be banned from ever joining NATO?

   11. DFDavid Friedberg1:16:56

       Well, I think the statements are correct, that Ukraine joining NATO escalates conflict, and we will find ourselves in a de facto global conflict world war. Now, the question is, is that the- the cycle, the natural cycle? I will once again, Nick, pull it up please, reference Ray Dalio (laughs) and his-

   12. JCJason Calacanis1:17:18

       (laughs)

   13. DFDavid Friedberg1:17:19

       ... typical big cycle behind empires rise and decline as he spoke at length with us in person about, at the All-In Summit last year. He points out that the era of prosperity that over the last 500 years we've seen six major empires go through is followed by a debt bubble, which, uh, drives a wealth gap, which ultimately leads to economic challenges, which means printing more money, which is the cycle we are going through right now, with a, as you guys know, $2 to $3 trillion annual deficit and explosion in, um, federal debt levels. And that ultimately leads, inevitably, to external conflict, to war. Now, the particular motivations in every case, in all six times this has happened in the last 500 years, look different when you read the history books about what were the circumstances that drove us to external conflict, that drove that nation to war.

Episode duration: 1:32:56