E56: Constitution DAO, Rittenhouse trial coverage, private sector efficiency vs the government

Jason Calacanis 0:00 It was very interesting going to Sacks's kids' birthday party. Um, Friedberg and I were there for about two or three hours. Sacks showed up for the last half hour.

David Sacks 0:09 (laughs) I think I was there for- I, I think I was there for two hours and didn't see Sacks and then I saw him on my way out the door.

Jason Calacanis 0:14 But he had some YouTubers there who were pretty cool.

Chamath Palihapitiya 0:16 Yeah, Papa Jake and Logan, thank you.

Jason Calacanis 0:18 Papa Jake was great.

Chamath Palihapitiya 0:20 Yeah. You know they have seven million followers on YouTube. Eat your heart out, J-Cal.

Jason Calacanis 0:24 (laughs)

Chamath Palihapitiya 0:25 How many times bigger are- is Papa Jake than you?

Jason Calacanis 0:27 Business and podcasting on YouTube is a new concept, uh, long form. And long form is not what the algorithm's designed for. It's obviously designed for short form and people getting to completion, so getting to completion on a 90-minute video-

David Sacks 0:42 Are we talking about lovemaking again? Sorry, what?

Jason Calacanis 0:43 Oh, God.

Chamath Palihapitiya 0:45 (laughs)

Jason Calacanis 0:45 Jesus. When I say completion, I- it's not...

David Sacks 0:48 (laughs) .

Jason Calacanis 0:48 We need an HR department at All In. (laughs)

Chamath Palihapitiya 0:50 Yeah, I pre- I prefer the short form format for that too.

David Friedberg 0:55 (upbeat music) Let your winners ride.

Jason Calacanis 1:02 Oh, yeah.

Chamath Palihapitiya 1:02 Rain Man, David Sacks.

David Friedberg 1:04 I'm going all in.

Chamath Palihapitiya 1:06 And I said, we open sourced it to the fans and they've just gone crazy with it.

David Sacks 1:10 Love you, What's his... Queen of Quinoa.

David Friedberg 1:12 I'm going all in.

Jason Calacanis 1:14 Hey, everybody. Welcome to another episode of the All In podcast. It's episode 56. We've made it past 55. The show, the band is still together, coming to you every Friday night, far too late, because the Rain Man obsesses over every edit in the podcast. With us again, the All In Scorsese himself, David Rain Man Sacks. And the Queen of Quinoa, the Sultan of Science, David Friedberg is here. And with a power sweater that cost more-

David Sacks 1:47 No, turtleneck. Turtleneck.

Jason Calacanis 1:48 I'm sorry, a, a, a power turtleneck that cost more than your mortgage payment this month, the dictator himself, Chamath Palihapitiya. I'm J-Cal. It was a pretty incredible week. I think we have to pander to the cryptocurrency crowd, because that's just making ratings go through the roof here. I am absolutely inspired by what we saw this week with the ConstitutionDAO forming in about a week and going from one or two million to $46 million raised through a DAO. If you don't know what these decentralized autonomous organizations are, it's basically analogous to a, a corporate structure, but that's written in code. So you can get a group of people together, typically in a Discord, then you create a smart contract, they collect in a wallet a bunch of ETH, or it's typically ETH right now, and then you get some kind of governance written into the DAO where people get voting power. They brought this together to bid on one of 13 copies of the original Constitution of the United States. And it was a very controversial moment last night when 80% of the money was raised in the last 48 hours and there was this crazy auction going back and forth with two representatives of Sotheby's on the phone. It hit $41 million. Everybody thought that the DAO had won, which would have mean- would have meant that almost 20,000 people who participated in this would then vote on what to do with this $41 million offer. CoinDesk incorrectly, uh, reported that the DAO won, and then the DAO, uh, announced that they had in fact not. Some other statistics, uh, their Twitter has 36,000 followers. The group reported they needed 14 million to participate, 30 million to be competitive, and 40 million to have a great chance of winning. They raised like, I think six or seven million while they were on the air, you know, and the auction had started. And the only, uh, downside to all of this is that there were huge gas fees. Uh, people were spending 30, 40, 50 bucks to donate 200, which was the average size of these.

Chamath Palihapitiya 4:00 Yeah, they should have done it on Solana.

Jason Calacanis 4:02 All right, so here we go-

Chamath Palihapitiya 4:03 (laughs)

Jason Calacanis 4:03 ... talking our own book again now. We got, somebody's going to clip this out. (laughs) The Solana, his Solana books are done here we go.

Chamath Palihapitiya 4:10 Oh, that's hard on your-

David Sacks 4:10 Jimoth, what are you gonna do with your copy of the Constitution? You know what's so funny? I, I-

Jason Calacanis 4:14 What, are you gonna-

David Sacks 4:14 I- When are you going to auction it back to the DAO?

Chamath Palihapitiya 4:15 When are you gonna burn it and make an NFT out of it?

David Sacks 4:18 So it's, it's funny. Uh, I did buy something at these auctions, uh-

Chamath Palihapitiya 4:24 Yesterday's?

David Sacks 4:25 Quite unique. Uh, I will, I will not comment on what it was. But-

Chamath Palihapitiya 4:28 Was it that turtleneck?

David Sacks 4:30 No, but uh- Banksy.

Jason Calacanis 4:33 Oh-oh. Oh-oh.

David Sacks 4:33 Banksy.

Chamath Palihapitiya 4:34 Somebody got a Banksy.

David Sacks 4:34 No, no. I, I didn't... No, no, no, no, no, no.

Jason Calacanis 4:37 (laughs)

David Sacks 4:37 But, uh, I, I did, so but I, I watch these auctions closely, I guess, is what I'm trying to say. And I was surprised that the US Constitution for sold so little. You know, for a, a basically like the Magna Carta of the best startup that's ever been created.

Chamath Palihapitiya 4:51 Well, but there's 13 of them, right? So on a market cap basis, on a market cap basis, you gotta multiply by 13.

David Sacks 4:57 Yeah, great. 13 times 40 is still nothing. It wasn't one of the originals. It was the printing after the original was signed. We have a 20... We've created a $22 trillion a year startup that keeps compounding by 4 to 5% a year. I would have thought these things would be worth, you know, a couple hundred million each.

Chamath Palihapitiya 5:12 Well, there's a lot of, there's a lot of US memorabilia, but yeah, I mean... But what I don't understand is

David Sacks 5:16 It means the US Constitution, David, is not as, is not worth as much as it used to be. That's the thing.

Chamath Palihapitiya 5:21 Well, you know, you got other, you got, you got the Declaration-

David Sacks 5:23 Or the original would sell.

Chamath Palihapitiya 5:24 Yeah, there's a lot of documents. You got the Declaration of Independence, you got, you know, the Gettysburg Address. There's-

Jason Calacanis 5:30 Dime a dozen.

David Sacks 5:31 The Tea Party memo.

Chamath Palihapitiya 5:32 (laughs)

David Sacks 5:32 I actually think Citizens United technically, guys, the Citizens United, if it was written not one time in one document, uh, by the Supreme Court, that would be worth much more than 40 million because it's basically invalidated most of the Constitution

Jason Calacanis 5:46 Well, here's one of the interesting things that happened here. Uh-

David Sacks 5:49 Oh, David, David, wait, David acknowledged that what I just said is true.

Chamath Palihapitiya 5:52 I don't even understand what you just said, but-

David Sacks 5:54 I just said if you had printed the Citizens United verdict from the Supreme Court on a piece of paper-

Chamath Palihapitiya 5:58 Yeah, yeah.

David Sacks 5:59 ... that would be worth more than $40 million.

Chamath Palihapitiya 6:01 I understand, yeah.

David Sacks 6:01 It was, it was like democracy 2.0 is what you're saying.

Chamath Palihapitiya 6:04 I don't understand why people are getting so swept up in this thing, is kind of my point.

David Sacks 6:06 Me neither. Me neither. That's the whole point.

Jason Calacanis 6:08 Uh, no, you get... What you guys are missing is, this is a, a, a critical moment in the history of cryptocurrencies because the first three major use cases of cryptocurrency were kind of eh. You had money transfer, which is not as good as PayPal or Venmo or many other solutions out there.

David Sacks 6:23 No, Jason, I think what Sacks-

Jason Calacanis 6:24 Then you had store of value. Hold on, let me finish. Store of value, which is like who cares, there's plenty of ways to store value. And then NFTs got interesting, but these DAOs are absolutely game-changing. The ability to have 47 million dollars show up and be prepared to be deployed in 48 hours is game-changing.

David Sacks 6:43 That's not what he's saying.

Chamath Palihapitiya 6:44 You ever hear of an ICO? You ever hear of an ICO saying-

Jason Calacanis 6:45 ICOs were illegal and they've been banned and people are being-

Chamath Palihapitiya 6:47 Well, how is, how is DAO any different? I mean, the-

Jason Calacanis 6:49 Because DAOs have governance. DAOs have governance and it's a programmable governance.

Chamath Palihapitiya 6:54 That doesn't change whether it's a security or not.

Jason Calacanis 6:54 It's a programmable corporate entity. It is huge.

David Friedberg 6:57 Now, Jake, these things... If these things transfer ownership interest, they will be regulated like securities. So, they are-

Jason Calacanis 7:01 Of course they are. That is a very important point.

David Friedberg 7:03 And in this particular... And in this particular model, the idea was it would all be kind of part of a nonprofit and it would not be kind of owned by anyone, but-

Jason Calacanis 7:09 There were donations, in fact. Yes, there were donations.

David Friedberg 7:11 There were donations. And so as soon as these DAOs, which they should, and it's an incredibly powerful tool, if it does actually become a security instrument, then it changes everything. And, uh...

Jason Calacanis 7:20 Yes, and it is gonna be that.

David Sacks 7:21 And, and the... My, my whole thing is like it's one thing to-

David Friedberg 7:23 It, it will, it will be outside the US first, right? And then it'll be-

Jason Calacanis 7:25 Of course.

David Friedberg 7:25 ... crypto, ex-US crypto investments that are gonna drive this, and that's why the US is gonna be left behind.

Jason Calacanis 7:31 Here's what you're missing. These DAOs are pushing the envelope in the same way Airbnb and Uber did in terms of, you know, bending the rules about ride sharing or renting your extra room. These DAOs are kind of breaking securities laws. They were telling people, "We're buying the Constitution." People who donated thought they were buying part of it-

David Friedberg 7:49 They did all that branding.

Jason Calacanis 7:49 And we're not, we're not missing the point.

David Friedberg 7:51 So, okay. But here's the thing, if they bend the rules like this, what they showed to the SEC is that there is a huge appetite for people to quickly form groups of capital at low dollar amounts to do something important or interesting in the world, and Americans now have a taste of that.

David Sacks 8:08 I disagree.

Jason Calacanis 8:08 They're gonna continue to have a taste of it and I think it's gonna-

David Sacks 8:10 I disagree. I think the beginning-

Jason Calacanis 8:10 It's gonna force the accreditation laws to change.

David Sacks 8:13 I disagree. I think that what it showed is that this is yet another explanation of fractionalized ownership. That demand existed well before DAOs.

David Friedberg 8:24 Totally.

David Sacks 8:24 It's, it exists today, it'll exist tomorrow. A, a DAO was just yet another on-ramp, but much like most fractional ownerships are terrible financial trades for crappy assets, so was this. So said differently, if you're gonna spend the time to open, uh, a Robinhood or E-Trade account, it still matters whether you buy a share of Lycos or a share of Google.

Jason Calacanis 8:47 Right.

David Sacks 8:47 Okay? And so whether you do a DAO or whether you have an LLC, to me it's irrelevant. The underlying asset didn't make any sense, had zero chance, in my opinion, of any meaningful appreciation. And so if you really wanna make something work and if you wanna prove the DAO, then I would've hoped that they would've actually asked a few smart people, "Hey guys," people who buy art, people who know crypto, "what are some assets that I should own?" Because if this thing does appreciate-

Chamath Palihapitiya 9:14 I wonder if-

David Sacks 9:14 ... you'll do more to prove the questions that you just asked just.

Jason Calacanis 9:17 Well, somebody beat them out on the... So, obviously the value is greater than what they DAO thought it was, but you're speaking like an accredited investor.

David Sacks 9:23 Jason, you, the reason why-

Jason Calacanis 9:24 This is non-accredited investors who are doing this.

David Sacks 9:26 I know, and that, that unsophistication was clear. The stupidest thing you can do if you enter an auction, okay, is to declare how you're gonna be an underbidder. So, like it's basically saying, "Hey guys, you know, here's my top tick and I'm willing to be... And I can..." And so now you force these guys to be the underbidder at a dollar over their best price.

Jason Calacanis 9:44 Okay, that's fine. That's a mechanical issue. Sacks, what are you thinking?

Chamath Palihapitiya 9:48 Well, I wonder if the reason-

Jason Calacanis 9:49 Where do you stand on this?

Chamath Palihapitiya 9:50 I, I, I wonder if the reason why they chose this particular type of asset is because it's collectible and therefore it's explicitly excluded from the securities laws. So basically, you know, maybe, maybe they're limited in terms of what they can go after because they don't want to be a security. But until... But, but, but if that's the case, then it does limit, I think, the applicability of DAOs, right? Because what you want is, is to create corporations that are programmable, that you can have shareholder votes-

Jason Calacanis 10:17 Yes.

Chamath Palihapitiya 10:17 ... through the tokens.

Jason Calacanis 10:18 Yes.

Chamath Palihapitiya 10:18 Things like that. Uh, you know, basically a digital version of what they do analog in the real world with, you know-

David Friedberg 10:24 Share certificates.

Chamath Palihapitiya 10:25 ... shareholder meetings and stuff like that, that nobody ever attends. Yeah, that nobody, nobody ever attends these shareholder meetings and, you know, I get these notices of votes that are to be held. Nobody ever fills... Yeah, no one fills that stuff out.

Jason Calacanis 10:36 Yeah, and people have super share, super voting and so you feel like you have no say, but in this case you do have a say-

David Friedberg 10:43 Depends on the rules, Jake.

Jason Calacanis 10:43 ... and they're gonna do assets like imagine somebody had 10,000 acres of rainforest or a national, potential national park, and all of a sudden you pop up a DAO and if the SEC says, "You know what, $500 or less, you can back their money however you want." Hold on, let me finish. And they take that $500 and you get a million people to put $500 in, which is completely conceivable. Somebody could buy $500 million worth of national forest and say, "I'm gonna make this into a public trust to protect the environment." This is a, on the brink of changing the world.

Chamath Palihapitiya 11:16 But that, but that was ICOs. You could have done the exact same thing before.

Jason Calacanis 11:18 Yes, but ICOs had no governance. They had no governance. That was missing.

David Friedberg 11:20 Okay, but Jake-

Jason Calacanis 11:21 It was for the benefit... Hold on. ICOs were for the benefit of the scumbags who did those grifts and ran away with the money. This is an organization with a predetermined governance structure. This is like creating a new country or a new format for an LLC. That's what you're missing.

David Friedberg 11:37 Okay. Are you done?

Jason Calacanis 11:38 Yes.

David Friedberg 11:39 What you're missing, you're painting the optimistic scenario of what these things could do.

Jason Calacanis 11:44 Yes.

David Friedberg 11:44 And you are correct.

Jason Calacanis 11:45 Yes.

David Friedberg 11:45 But what's always happened in the history of humanity is these scenarios have resolved to people figuring out ways to scam other people to make money.

Jason Calacanis 11:54 Sure, sure.

David Friedberg 11:55 And while this one looks altruistic-

Jason Calacanis 11:57 Just like Theranos, just like Nicola-

David Friedberg 11:59 Jake, let me finish without interrupting.

Jason Calacanis 12:00 No.

David Friedberg 12:00 Thank you. But just like, you know, this looks like a great altruistic action, we're gonna go out and buy the USS Constitution, the US Constitution, the next deal...... will end up being some shitty art piece that's worth a hundred grand, as Chamath points out. They'll buy it for 10 million, everyone will lose their ass, and the next 500 will look the same. And that's why we have securities regulators and securities laws-

David Sacks 12:20 Yes.

David Friedberg 12:20 ... because in the past, when these sorts of structures, that they weren't digitally governed and all this sort of stuff, and people would go around, and they would put together pools of money from other people and promise them the world, and then they would turn around and steal their money and walk away. We created securities regulators that could oversee and not have independent governance, but have distributed governance across a regulatory system to make sure that this doesn't happen. And that's the slippery slope of where this goes. I'll say one more thing about the structure of this pa- particular DAO, which I know can be resolved, but it creates a problem in that everyone is betting or investing a fixed dollar amount without knowing how much equity they're getting. And so when you say, "Hey, I'm gonna put in $500," and there's currently $10 million, or let's say there's $10,000 in this thing-

David Sacks 13:03 Sure.

David Friedberg 13:03 ... it's like, "Hey, okay, I've got 5% ownership in this thing." If the next guy shows up and puts in $10,000, you now have 2.5% ownership in this thing, and you've inflated the value of the thing you're buying. And that's effectively what happened in the structure of this particular DAO, where the more money people put in, the more they were paying and the less they were owning, and you couldn't adjust that. The correct structure in the future for people that do care about equity and ownership will be, "I wanna buy 1%, and I'm willing to pay a max of $500 to buy that 1%." And with that rule engine, which I know can be built into DAOs, people can then structure what they're willing to bid and how much they're willing to participate in, and the DAO as a whole can resolve what it's willing to pay to go buy an asset. And everyone can feel like they know what they're getting as they get into these things. And then the third problem with this particular DAO, as we saw, and I know it's kind of the first big one like this, was the obvious point that these guys were showing the world how much they were about (laughs) to go bid on this asset, and if you take-

David Sacks 13:53 Stupid.

David Friedberg 13:53 ... $46 million and you divide it by 1.13, or, which is, you know, remember there's a 13% buyer's premium on this asset, they showed everyone what they're gonna pay, and of course they lost at a dollar over the, the max bid.

David Sacks 14:04 They were the under- they were the underbidder.

David Friedberg 14:05 Yeah.

David Sacks 14:05 I'll say something else. The only fractionalized asset that has ever been proven to appreciate reliably are stocks. Every other fractionalized asset, where you take something and then you divvy it up, generally has been a trash burger. You need to either own the whole thing yourself, or if you're gonna own it with a bunch of other people, the only thing that's reliable are equities. Now, that's just a historical artifact for how money has been made. So, I appreciate, Jason, what you're saying, which is, I think actually you care about the structure, because I think it has huge implications to people pursuing wealth creation for themselves-

David Friedberg 14:45 Yes.

David Sacks 14:45 ... for people participating in private markets. But I do think that you're overblowing this one example, 'cause I don't think this showed any of that. I think that this showed how unreliable and, and useless Ethereum is as a transactional layer for these things. You know, the fact that these poor people now have money stuck in a DAO that they can't get out of, 'cause it would, the gas fees would negate their contribution. So that didn't, it didn't prove that-

David Friedberg 15:10 These are all the bumps in the road, Chamath.

David Sacks 15:11 One second, please. You gotta... Hold on. It didn't prove governance, because as David said, we have this inflationary outcome where all of a sudden I didn't know the equity that I owned. The transparency worked against them, because you're bidding on an asset where you were clear what the threshold max price you could pay, so you had no pricing power, and you had no, uh, opacity in, in your bidding strategy. So, so I, I think that this was a PR lark, and in fact they said it started out as a joke and it took on a head of steam, and so I think they felt like they had to execute. What I would say is, there are going to be some really amazing examples of DAOs. This proved none of those things that the, that the amazing ones will prove, in my opinion.

David Friedberg 15:52 And this will invite regulatory scrutiny faster than it will keep it away. Right? You will see, you know, more of these scenarios where people get screwed out of money, like they did in this particular case. And I know a lot of everyone that participated in this DAO, I know that there's altruistic reasons they're not gonna complain.

David Sacks 16:05 Who do they sue? Who do they sue? The people-

David Friedberg 16:08 Exactly.

David Sacks 16:08 Who do they sue? Who do they go after now that they lost the $200 that they contributed?

David Friedberg 16:12 Yeah. There, I mean, there's, there's, there's no structure, and I think that's part of the regulatory, you know, um, invitation.

David Sacks 16:17 How do, how do they get the money back?

David Friedberg 16:19 I can respond. I'm allowed to.

David Sacks 16:20 Who's the person that deci- Who's the person that... Like, you know what? Honestly, if that DAO, and I-

David Friedberg 16:24 Oh, let's control this show, show.

David Sacks 16:25 If that DAO had called me, I could have actually bid for them and actually won that fucking thing for half the price. You know what I mean? Like-

David Friedberg 16:33 Sacks, you got anything? You wanna chime in?

Chamath Palihapitiya 16:37 No. I mean, well, I don't know. I mean, look-

David Friedberg 16:38 Okay. I would like to give a closing argument.

Chamath Palihapitiya 16:39 Yeah, go ahead. Why don't you go for it, Jacob?

David Friedberg 16:41 All right. Number one, you're all speaking like a bunch of rich accredited investors. Uh, we need to think about people who do not, uh, get to participate. And what I see in my day job is people go to an equity crowdfunding site, it's too arduous to allow non-accredited investors to invest. It takes months, and it's tons of paperwork. So then what happens is the best deal flow, which goes to the people who are on this podcast, who are already rich, we get to sweep up all the best deals, because people who are founders and who have opportunities in corporations do not bother doing equity crowdfunding because the SEC, in their wisdom, to try to protect people, and they have good intent, to your point, Friedberg, has made it so arduous and painful for people that they then don't do it. The founders, I'm talking about. This then keeps people down. And when we were all poor, we got to spend our money gambling or doing whatever we want with it. But we all would have wanted to have, when we were non-accredited, the ability to place a bet on a startup. And y'all are forgetting that. And what's gonna happen here-

Chamath Palihapitiya 17:42 So basically... Now I understand where Jacob's coming from.

David Friedberg 17:43 All of what you're saying, all of what you're saying, Chamath-

David Sacks 17:45 (laughs)

David Friedberg 17:45 ... in terms of the problems here are absolutely accurate and valid. And those are what you need. You need to identify through projects like this that gas fees are a problem, so people can move this to Solana. You need to find out that they don't know how to do bidding, and maybe they shouldn't say how much has been raised.

Jason Calacanis 18:00 ... so that they can come in and bid more intelligently. And maybe they do need to pick a better target. But this is $200 per person. They're... you guys are acting like these people are gonna lose their shirts.

David Friedberg 18:09 We're, we're not. We agree with you.

Jason Calacanis 18:11 I don't think you agree with me.

David Friedberg 18:12 I agree a thousand percent. I'm a free markets guy. I would love for there to be no regulation, and everyone will come in. And the problem is, society won't let that happen, and that's the point I'm trying to make. It's not me and my opinion.

Jason Calacanis 18:21 But other societies have... Other societies do let that...

David Friedberg 18:23 No, JCal, they won't.

Jason Calacanis 18:24 If you're in the UK, if you're in Australia, you can go gamble and you can go bet on startups. There are different accreditation laws. We have antiquated ones that need to evolve.

David Friedberg 18:33 The United States- The United States regulatory regime will be invoked because people will lose money and individuals will raise their hand and say, "I put money into a DAO that I lost my ass on," and enough thousands of people do that, and then Elizabeth Warren and A- AOC will get on their, you know, their horse-

Jason Calacanis 18:48 They'll say, "Let's fix this problem." Bernie Sanders will say, "This is unfair. The billionaires are taking the money from people." And so I agree with you. We should let people take risks. We should let people lose money. We should drop all the regulatory burden. My point is really that I think structurally what's gonna happen is there are gonna be more of these things- Okay.

David Friedberg 19:05 ... that are gonna show up that will rip people off, and that will heighten regulatory interest. And people will come along, and they'll start to clamp down on the stuff. And that's- that's my point.

Jason Calacanis 19:12 Okay.

David Sacks 19:12 I also think this example has nothing to do with what you're talking about. I think what you're talking about, JCal, is laudable, and we should all want that, because I think that the broader number of people that get to participate in the wealth creation in tech, the better. But there are different ways of doing that. I don't think we have to run full force and embrace the DAO as the only way that that happens. And I think that structurally, the- the demo- the democratic norms inside of a DAO in many ways make it much harder to govern inside a regulatory framework, and it does set up a very binary decision by the SEC and US regulators, which unfortunately they're not going to go and be supportive of, because the binary decision to support them would effectively negate their oversight.

David Friedberg 19:58 That's right. Yeah, they got jobs to keep too. (laughs)

David Sacks 20:01 They have jobs to keep and mortgages to pay and-

Jason Calacanis 20:04 I think it's a cynical and accurate prediction that they will fight it. But what you may not be aware of is that there is, in the Startup Act from years ago, they did allow equity crowdfunding. They put a lot of throttling on it, and now they're going to let you get accredited through taking a course or, like, kinda having a driver's license or a gun permit. So, it is conceivable that the next time a DAO happens and they're trying to buy an ad- an asset-

David Sacks 20:27 But can you stop conflating these things together?

Jason Calacanis 20:30 No, no, it-

David Sacks 20:30 You can iter- We've had iterations in the crowdfunding rules. You're just trying to ta- tag this with a DAO.

Jason Calacanis 20:36 Yeah, because this-

David Sacks 20:36 Can you just separate it? Wait, hold on a second. Can I just ask you a question? Can you please just describe and acknowledge that the crowdfunding rules have iteratively evolved in the absence of DAOs?

Jason Calacanis 20:47 Yes, and I just said that. Yes. Yes.

David Sacks 20:48 Okay, so just separate the two. They're not the same thing.

Jason Calacanis 20:51 They are two sides of the same coin because-

David Sacks 20:52 No, they're not.

Jason Calacanis 20:53 ... the DAOs allow a global participation in this, and the capital can be formed instantly. This was done in days. That's what's so powerful about it. It- it costs tens of thousands to hundreds of thousands of dollars-

David Sacks 21:05 Jason, it's because-

Jason Calacanis 21:05 ... to do an equity crowdfunding. This cost nothing.

David Sacks 21:07 Because it was for a- an- an ethereal, superficial asset with a name that people recognized. Let me... Hold on a second. Now, let me replace the US Constitution with... I don't know, Jason, you just sent a deal a day ago. What was the name of it? Let's just call it acme.com.

Jason Calacanis 21:24 Sure.

David Sacks 21:26 Now, what are people supposed to do? It's not a known asset. They are not known founders. There may be turbulent issues inside the company that are still being hammered out. What are these people supposed to do? How are they intelligent-

Jason Calacanis 21:38 Place a small bet. Place a small bet. Do some research. Vote on it. Do collective research in a Discord. You're looking, you have a bunch of researchers working for you. You defended the GME.

David Sacks 21:47 No, I don't.

Jason Calacanis 21:48 You have a team. Your team does research, and they're smart people, and they get paid very well. You were praising the coverage that WallStreetBets did on GME on this podcast 40 episodes ago. You were saying how incredible their research was.

David Sacks 22:03 It was incredible because they were analyzing public companies who are governed-

Jason Calacanis 22:06 Sure.

David Sacks 22:06 ... by securities law.

Jason Calacanis 22:07 They can't do that with a private company?

David Sacks 22:10 Yes, because there are no rules that govern disclosure. GameStop had very strict disclosure rules because they were public. That was what allowed WallStreetBets to understand what was going on under the hood of GameStop. It was the disclosure of the funds that the SECs force you to make that allowed people to understand the long and the short book that was building against it. If- if that was in the private markets, that data is not obligated to be provided in the- in the wild, WallStreetBets would have had no idea. So, um, I- I think you're actually proving the opposite of what you intend, which is, it's the regulatory framework that allowed the retail GME position to happen.

Jason Calacanis 22:49 Go ahead, David, and then, uh...

Chamath Palihapitiya 22:50 Yeah, can I translate what JCal is saying? I just... I think what JCal is saying is we need to create some space here for innovation so that entrepreneurs can work out the kinks of these DAOs so that one day, JCal can run a syndicate on a blockchain and fundraise that way. Isn't that what you're saying, JCal?

David Sacks 23:07 (laughs)

Jason Calacanis 23:07 Or anybody. I mean, here's what I'll say. You know, when we do a syndicate amongst accredited investors-

Chamath Palihapitiya 23:11 You're kind of talking your book here in a weird way.

Jason Calacanis 23:12 No, no, no, I- I- I didn't mention The Syndicate. I didn't mention Thesyndicate.com once, except for this time.

Chamath Palihapitiya 23:17 You saw ICOs as competitors to- to your syndicates, but now you're all on the DAO train.

Jason Calacanis 23:22 ICOs, I, um, I thought were too big. So I think you could solve this problem by looking at the bet size that people are allowed to make. So you can just say, "Hey, the upper limit is 5K." So now you've basically taken the individual cratering-

David Friedberg 23:34 Why?

Jason Calacanis 23:34 Well, because if you wanted to create a regulatory environment-

David Friedberg 23:38 So random.

Jason Calacanis 23:38 Well, because it would get rid of the risk around.

David Friedberg 23:40 (laughs)

Chamath Palihapitiya 23:40 No, I think that makes sense. You create a de minimis exception so that- so that-

David Sacks 23:42 Honestly, guys, that could be-

David Friedberg 23:44 That could be 100% of someone's net worth and 1% of another's.

Jason Calacanis 23:47 Okay, so make it a percent of net worth.

David Sacks 23:49 No, the first th- principle of portfolio construction is you need to be concentrated in the things you know, and you need to stay away from the things you don't. If you cap the upside on the amount you can invest, what are people supposed to do? Peanut butter around 50 bets? And do you know what'll happen, Jason? Most of those will be losers because the mortality rate in startups is super high-... and they'll end up with basically nothing.

Jason Calacanis 24:08 How do they do in Vegas? How do they do betting sports?

Chamath Palihapitiya 24:11 We're not talking about how to invest. I mean, I think what we're saying is that there's ... I mean, this is where I actually agree, is that the regulators should carve out enough room so that innovation can continue around this concept of DAOs because who knows what they could become one day.

David Sacks 24:25 Yes.

Chamath Palihapitiya 24:25 And we shouldn't, we shouldn't kill this thing in the cradle.

David Sacks 24:27 Hold on. We- we- we- we're ... We haven't killed anything because nothing exists and there are no rules about DAOs. The, the regulators haven't said anything. I think we all agree that crowdfunding rules should get much more expansive. That makes sense.

Chamath Palihapitiya 24:38 Yeah.

David Sacks 24:38 And with that, pri- private companies should disclose more. That makes sense, right? We all agree with that, so that you can have more disclosure in public available data, so adjacent to your point, communities can get into a discord. Like today, if you said, "Hey guys, let's go and analyze a late stage investment in Stripe," what do you do? Blather on about it and just talk at each other?

Jason Calacanis 24:59 In the early stage-

David Sacks 25:00 There are no bets. There are no disclosures.

Jason Calacanis 25:01 ... or if the DAO could in this startup now-

David Sacks 25:02 No, but hold on. Answer this question. So now-

Jason Calacanis 25:03 Yeah.

David Sacks 25:03 So now, are you supposed to, are you supposed to enter Carta or some other third party platform and buy it at 120 billion? How do you underwrite that?

Jason Calacanis 25:11 Very simple. Very simple. In the startup DAO concept we're talking about here, you would do exactly what angel investors do, which is say, "Hey, okay, we had..." Let's say this constitution DAO was to invest in startups. Okay, 20,000 people put 200 in each. We have a $40 million pool. Okay, we're all going to submit ideas and then we're gonna ask and invite those founders to come pitch the DAO on a Zoom and we'll all vote on which ones we like best. And instead of, you know, a venture capital firm getting access to this, now those 20,000 people could say, "You know what? We're gonna make 20 half million dollar bets and then we're gonna pour the 30 million into the winners of that." And that is just what I do for a living or any other angel investor or early stage investor does. You invite founders to come and pitch you, and you place an intelligent bet just like people bet on the Knicks or sadly on the Jets and lose their money all the time. And, uh, I like David's idea of saying, "Hey, maybe for the next two years we'll have a DAO exception where you can raise, you know, from 1,000 up to 5,000 people up to $10 million and you just have to file that you're not a felon." And we have some basic framework to experiment with this 'cause you could buy, you know, a building that was gonna be torn down, like some movie theater for a community. Uh, you could do nonprofit stuff. There's all kinds of beautiful things you could do with this instant capital formation and government structure that is programmable.

Chamath Palihapitiya 26:30 Okay, well, here's-

Jason Calacanis 26:30 And it does relate to capital formation in the startup ecosystem.

David Sacks 26:34 Here's what I'll say. Um, you made a great point about Uber and Lyft pushing the boundaries and forcing the regulators to react.

Jason Calacanis 26:40 Yes.

David Sacks 26:41 You know why that happened? It's because Uber and Lyft worked.

Jason Calacanis 26:45 Yes.

David Sacks 26:45 And it was successful.

Jason Calacanis 26:47 Provided massive value, yeah.

David Sacks 26:48 And this thing was not successful. And so maybe if it is, there's an on-ramp, but I would say that the energy is better served in not focusing on a PR lark and probably just focusing on trying to improve the crowdfunding laws writ large, which are already on the books and can be iterated upon versus an entire new body of regulation where nobody even has any idea what a starting point should be.

Chamath Palihapitiya 27:13 I think it's gonna be, I think it's gonna be very hard to get, get those crowdfunding laws expanded with the... under the current regime. It's sort of a minor miracle that they even got what they got several years ago, right? Wasn't that... When did that pass? The-

Jason Calacanis 27:22 Well, it happened under Obama-

Chamath Palihapitiya 27:24 With the Jobs Act, right?

Jason Calacanis 27:24 When ... After the 2008 ... Yes, the Jobs Act because in 2008 when the market crashed and we said, "Nobody's starting companies. We're screwed here. We need to get the economy going again. So we're just gonna allow more capital formation." And so the 99 rule for LLCs went to 250, and they just kind of loosened things a little bit and now they're ... the mandate is the SEC has to have a certification test for people to do private market investing. And also people who work at VC firms, right? We have people who work for us who are not accredited. They don't get to participate, but they get an exception if they work at a venture firm, et cetera. So it's just gonna all-

Chamath Palihapitiya 28:00 It's, it's probably simultaneously true that this thing was massively overhyped, um, while also being the case that it's a worthwhile experiment that may lead to, you know, useful innovation in the future.

Jason Calacanis 28:13 What, what I always look at when I see new technologies doing something is I just imagine if it 10Xed and what that would look like and if it worked, and then I just 10X it one more time. So what we're gonna see, I predict, is this $40 million DAO will turn into a 400,000,001 in the next two years and then a 4,000,000,001 in the next 10. And people are going to do something extraordinary. They're going to do something so otherworldly changing. What if a million people or 10 million people around the globe decided they were gonna put money in to do a solar farm or something that would help society?

David Friedberg 28:43 You can already do that, JCal. I mean, that's like a, a manager can-

Jason Calacanis 28:47 Not frictionless.

David Friedberg 28:47 Someone's gotta, someone's gotta manage it.

Chamath Palihapitiya 28:49 JCal's fantasizing about how big his syndicate's gonna be as a DAO.

David Friedberg 28:52 Yeah. That seems to be what's going on. (laughs)

Jason Calacanis 28:53 My syndicate's too, my syndicate is too large right now. I can't accommodate everybody t- And it's also because of the laws.

David Friedberg 28:59 It's okay. It could get bigger.

Jason Calacanis 29:00 You could ... Well, no. The problem is you can only have 250 people in it.

David Friedberg 29:03 Yeah.

Jason Calacanis 29:03 That's the problem. You then can't ... You've got to-

David Friedberg 29:04 We've beaten this down to death, guys.

Chamath Palihapitiya 29:05 Yeah. Come on.

Jason Calacanis 29:06 We beat it to death. Okay. Anyway, I'm obsessed with it.

Chamath Palihapitiya 29:08 Clearly.

Jason Calacanis 29:08 Fentanyl deaths in the US are reaching a crisis point up 30-

David Friedberg 29:11 Fentanyl deaths? Is that really what we're talking about?

Jason Calacanis 29:14 I mean, we talked about it in the chat. I mean, this is-

Chamath Palihapitiya 29:16 Are you deliberately trying to, like, avoid the biggest news today of the, the biggest trial since Rochester?

David Friedberg 29:20 No, no. That was just a, that was just a... I get it. We're gonna ... That's just a weird transition. Okay.

Jason Calacanis 29:23 I'm just going straight down through the docket, but if you want to jump the fence, okay.

Chamath Palihapitiya 29:27 Well, I'm not trying to, but I-

Jason Calacanis 29:27 Kyle Rittenhouse was found not guilty of all charges.

Chamath Palihapitiya 29:30 It happened like ... It happened within half an hour of us beginning to record this podcast.

Jason Calacanis 29:34 All right. Well-

Chamath Palihapitiya 29:34 I don't know how it's not topical.

Jason Calacanis 29:34 I'm trying to keep the Friedberg ratio up. We had a nice strong emotional moment from Friedberg. He obviously is gonna have something to say about fentanyl and science, but okay, he's gonna walk off the show now to talk, when you start talking politics, Kyle.

David Friedberg 29:44 I'm not gonna walk off the show.

Jason Calacanis 29:45 You did last week. You walked off. You walked off and went ... You got a beverage. You left for, like, five minutes.

David Friedberg 29:49 I had to go, I had to go pee.

Jason Calacanis 29:51 All right, fine.

David Friedberg 29:51 I mean, come on.

Jason Calacanis 29:52 It just happened to be during politics. Uh, Kyle Rittenhouse was found not guilty-

David Friedberg 29:54 That's usually when I take my break, yeah.

Jason Calacanis 29:56 Exactly.

David Friedberg 29:57 Okay. Go ahead.

Jason Calacanis 29:57 And a third of the audience.

Jason Calacanis 29:58 Kyle Rittenhouse found not guilty of all charges. (laughs) A 12-person jury in the Kyle Rittenhouse trial reached the decision, uh, after over 26 hours of deliberation,He shot three people. Uh, he killed two of them and he was found not guilty. He was 17 at the time of the shooting. He was charged with killing the two men and a third, uh, during the protests in, uh, Kenosha, Wisconsin in August of 2020. This was during the protests, uh, over the police shooting of Jacob Blake. He claims he traveled from Illinois with an AR S- 15 style rifle to help protect-

Chamath Palihapitiya 30:32 No, that's incorrect. That's incorrect.

Jason Calacanis 30:32 ... businesses and provide first aid. He, he didn't?

Chamath Palihapitiya 30:36 He did not cross state lines-

Jason Calacanis 30:37 So his mom dropped him off.

Chamath Palihapitiya 30:37 He did not cross state lines with the rifle. That's one of the many inaccuracies that have been reported by the media over and over again.

Jason Calacanis 30:44 'Cause his dad lived there, I guess. He was in-

Chamath Palihapitiya 30:46 His dad lived in Kenosha. I think he went to school in Kenosha. He worked in Kenosha. You gotta understand, like, this is... they're a few minutes apart, where, from his mother's house-

Jason Calacanis 30:54 Okay, fine, yeah.

Chamath Palihapitiya 30:55 And the gun... and he never, he never carried the gun across state lines. The gun was bought for him by a friend who was 18 who could possess it, and it was kept at his house, which is in Kenosha.

Jason Calacanis 31:05 Got it.

Chamath Palihapitiya 31:05 He was apparently in Kenosha earlier that day, um, and... you know, cleaning up graffiti at the school and checking out the downtown. And then, you know, obviously when he went out that night, then he got the gun, but he didn't transport it across state lines. So that wa- that's, I think, one of the multiple inaccuracies.

Jason Calacanis 31:21 What do you think is your- what is your most important insight into this case and what it represents for American society and, uh, the justice system, Sax?

Chamath Palihapitiya 31:32 Well, I think this... the case has become a little bit of a Rorschach test of how you see America. I mean, there's clearly, uh, a, a group of people in the, I'd say, the ma- dominating the mainstream media, and now it's percolated down to celebrities and figures from LeBron James to, to, um... I'm, I'm spacing, but there's a lot of, like, celebrities who've, who've come out, putting forward this view that America... that this trial somehow is, um... that, that, that Kyle Rittenhouse is a white supremacist and that this not guilty verdict is an example of white supremacy in America. Somehow that became the narrative. And, um, so that... I think it's become... I, I think there's, like, a couple levels to it. One is the trial itself and what you think about the legal case. I don't think that is that complicated or interesting. You have here that the state was required to prove beyond a reasonable doubt that Rittenhouse did not act reasonably in self-defense when three violent attackers came charging towards him. That was, I think, a pretty tough case to make, given that these other-

Jason Calacanis 32:33 One of them had a gun pulled too. I mean, this was-

Chamath Palihapitiya 32:35 Right.

Jason Calacanis 32:35 ... you know.

Chamath Palihapitiya 32:36 And so all of them had long criminal histories. The first one who t- attacked him was daring him to... wa- t- said that he was gonna kill Rittenhouse. The second one was bashing him o- over the head with a skateboard. The third one was rushing towards him when Rittenhouse was on the ground, had a gun trained on him, looked like he was gonna bring it to his head, kind of execution style. I mean, all these, I think, cases, if you saw the video from, I mean, from the first time, it seemed pretty clear that he had a strong claim of self-defense. So, I don't think the case itself was that legally interesting. The question is why it got blown up into being this, like, huge thing. And it's really because the media wanted this so badly to be... to feed into this narrative of somehow that this is, you know, a white supremacist violent attacker who was a vigilante who crossed state lines with this AR 15 to go seek out trouble, um, to confront people at the protest. And, you know, that case, that, that narrative just completely fell apart at the trial. You know, it, it's... he, he didn't cross state lines for the... you know, in that way. He didn't, you know, with the gun. When he went to this protest, he went there... I- it's interesting. I mean, he was a cadet, an EMT cadet. He was kind of in this, like, junior firefighter program. I'm not saying that he showed good judgment. I think it was poor judgment for him to try and insert himself into that situation, but I don't think he went there to kill anyone or to get into a confrontation. He brought a first aid kit for... you know, for better or worse, he thought he was gonna help people. And so, any event, the, the, the story really is about the media constructing this narrative that fell apart so quickly as soon as all the facts came out.

Jason Calacanis 34:21 Freeburg, Jamaal?

David Sacks 34:22 Yeah, I think the... I read that there was, um, an analysis of the media and how they tried to portray this and that, I think I'll build on what David said, which is... was really concerning, like, the... there was... they really wanted this to be a white kid who killed Black people during a BLM protest, which was, as it turned out, the furthest from the truth. I'll just tell you my experience. When I first saw it, that's what I thought I had read. And I'll be really honest with you. Initially, I was incredibly biased and my... I had a violent reaction inside me t- of anger towards this kid, because my thought was, "My God, this white kid showed up at a Black Lives Matter rally and killed, you know, three of m- of, of my brothers." You know, like, literally, that's how I'm feeling. I was so angry because they didn't really give the facts. There was an example where, in Germany, it got so out of hand that the articles were written that Kyle Rittenhouse had actually killed three Black men, or two Black men, and, and... and I think that that's very dangerous because we need to have the truth and the facts so we can really figure out what's going on so that we can address what's broken, we can hold people accountable, and then we can move forward together and heal it. But this, like, is the opposite of healing. It just froths people up to make a lot of judgments with misinformation, and I think that that's very unfair. I didn't... to be honest with you, after I saw the facts, I stopped paying attention to this case because I literally exhaled. I would have been much more hurt and I would have probably paid more attention if this wasn't white on white violence, quite honestly.

Chamath Palihapitiya 36:11 Right, right. And then, and then I think people... I think e- we've heard from a lot of people over... W- when Rittenhouse's testimony kind of went viral and started getting reported on, there were a lot of people out there who were surprised to learn that all the victims were white, that this was an example of white-on-white violence, because it had been portrayed by the media as some sort of racial episode, and, um, and it wasn't. And it, it shows how the media is fueling this polarization and rage in our society by concocting these narratives which aren't true.

David Sacks 36:41 It's really... That, that, I think, is the dangerous thing. I don't, I didn't follow the case to know whether this kid was right or wrong, but I do think if the media uses these opportunities to not just tell the facts and then race-baits people on both of the left and the right and gets them frothed up, they're doing a real disservice to America, because I think it takes good people and it puts them in a state, like me for a while at the beginning, where I'm, I was really angry and I didn't know how I felt. And that's... And I'm a lucid person, you know, 99.999% of the time, so-

Jason Calacanis 37:16 You're thoughtful, yeah.

David Sacks 37:17 And so it just goes to show you how dangerous this stuff is when they can take a narrative and run with it, and then there's no accountability for it. Um, and we really have to stop and, and check ourselves. It just speaks to this ongoing fact pattern where the media is at a, is at a point where they are at a very much low point in their trustworthiness. Their ability to fact-check, their ability to stick to the truth, um, I think it's been undone. Just this past week, you know, I think Elon even tweeted out, like... You know, he, in exasperation, he said, "Where can I find, like, thoughtful news?" Right? He was asking Twitter, like, (laughs) "What, what websites..." And, and the, the, the question wasn't that bad, but if you read the answers, it was really sad. Nobody had a good answer. You know, one person was like, "Oh, there's a browser extension that will show you how, you know, how much lying is happening inside the article." And I thought to myself, "Oh, my God, like, there are browser extensions, like a lie-ometer." You know, like, this is insanity that, that in 2021, that's what we are faced with, which is very smart people, all of us, everybody listening, normal people just, you know, out on the street, we can all come to the right conclusion when given the facts, and we're not given the facts anymore.

Chamath Palihapitiya 38:35 Jay Kalb, do you think we're missing something here? Because, um, you, you... I know you th- you thought this whole, uh, Rittenhouse thing was crazy, right? Which it was, but are we missing something here with you?

Jason Calacanis 38:47 Well, I mean, I think, uh... First off, violent protests and violence is immoral. And all of these protests, whether it's BLM, on the left, on the right, they should all be non-violent. There's a reason why Martin Luther King and Gandhi, you know, said, "That's the rules. If you wanna come to the protest, you have to be non-violent." And then I think the rhetoric that was created during the Trump era, um, and that he exacerbated and that he caused, uh, from a lot of his policies and the way he spoke as the leader of the free world and our country, then polarized things. I blame him for a lot of that. And if you put a bunch of people who are on the far extremes into a situation like this, uh, and then you insert guns and you insert young people who have not developed their frontal lobes, who do not have long-term thinking, which a 17-year-old does not. Your long-term... And Freeburg will back me th- up on this in terms of science. Long-term thinking is something that develops in humans into their early 20s. And so young people with guns in a violent situation, with Trump on TV during this time, both good people on both sides, whatever, you know, the borders, all that stuff that he was stirring the pot on, all of that eventually resolves to somebody's gonna get killed, whether it's on January 6th or it's a BLM protest. And that is why he had such a failure of leadership, why he was so disgusting and horrible and loathsome, because he was taking all of this heat and rhetoric up, up, up. And the person who winds up suffering in this are these stupid kids and their really dumb parents and mother who allow them to go to a protest, and she could have stopped him with a gun. Somebody needs to stop these kids from going to a protest with a gun. And I think there's a very difficult question here that can be asked. And it, it probably is true, I think, that it was an open-and-shut case, David, that the... I mean, I saw the video as well, Chamath. The e- the guy puts a gun on him. W- what are you gonna do? You've got a gun. This guy's pointing a gun at you. Whoever fires first survives. It is self-defense, and that's kind of undeniable, uh, uh, I think. But if he had done that, it-

David Sacks 40:44 I would hope, I would hope that the number of people that really focus on this case, look at the enumerable number of cases of Black and Brown people that have been killed. The Ahmaud Arbery trial is going on right now.

Jason Calacanis 40:54 Yes.

David Sacks 40:54 I'm sorry, but I've seen one article in Ahmaud Arbery for every 50 about Kyle Rittenhouse.

Jason Calacanis 40:59 Yeah.

David Sacks 40:59 I just really hope Ahmaud Arbery gets his fair trial. Brianna Taylor-

Jason Calacanis 41:02 And, and that was a straight-up lynching. Yeah.

David Sacks 41:03 I'm sorry, and let me say again, Breonna Taylor, not a single thing has still been done, okay? So I'm not that sympathetic to all of this talk right now-

Jason Calacanis 41:12 Yeah.

David Sacks 41:12 ... because there are a lot of Black and Brown men and women who have been killed in this country-

Jason Calacanis 41:17 Yes.

David Sacks 41:17 ... where n- none of you guys care as much.

Jason Calacanis 41:20 Oh, I care, and that was exactly where I was about to get to. The question I was about to ask you, Chamath, is if Kyle Rittenhouse had been a Black man and he had shot those three people, what would the outcome of this trial have been? Would it have been the same justice system? And I, I don't think that anybody can answer that question and say it would have been fair justice. I don't think it would have been. I think the chance would be very low-

David Sacks 41:39 It re- it makes me, it makes me-

Jason Calacanis 41:40 ... that a Black man in this situation would have been treated the same.

David Sacks 41:42 Just, just you saying it makes me want to cry, okay? It would not have been the same.

Jason Calacanis 41:45 Well, I didn't say it for that reason, but, uh, it is the truth. And I, I think that's what... You know, we... In this country, race is something that is our biggest weak point, and we need to get-

Chamath Palihapitiya 41:55 Well, I mean, you're creating, you're creating-

Jason Calacanis 41:56 ... uh, leadership to work on this.

Chamath Palihapitiya 41:57 ... a hypothetical injustice we don't know, because that's a hypothetical that we can't know the answer to-

Jason Calacanis 42:02 Well-

Chamath Palihapitiya 42:02 ... right now. And you're ignoring the justice, the injustice that's right in front of your face, which is that this was a political prosecution from the beginning, fueled by a media narrative that was completely bogus.

David Sacks 42:12 This is why I think David is right and we have to go to this root cause issue that we can all fix.

Jason Calacanis 42:16 Yeah.

David Sacks 42:16 You know, we can't, we, we shouldn't debate these hypotheticals because they're hurtful. Like, even now, like, you can see me, I'm emotional. I can't-

Jason Calacanis 42:22 Yeah.

David Sacks 42:23 ... think straight. So let's get the hypothetical off the table, because, David, you're right, it's a hypothetical.

Chamath Palihapitiya 42:26 I mean, this case probably should never... This case should never have been brought. I mean, as soon as you see the video, if you look up the definition of self-defense, okay, you, you just have to have a reasonable belief-... that your life is in danger, and then you're allowed to use force. And, you know, Rittenhouse was running away, these guys were attacking him, they were chasing after him, they had a gun trained on him, they were bashing on the, uh, the skateboard. I don't know how any prosecutor looks at this and says, "We need to prosecute this." So the case should never have been brought, and then the media fuels this thing, but-

David Sacks 42:56 No, but this is what I'm saying. That's the thing that we can all change, which is our reaction to that media portrayal, the media can be held accountable for how they lie.

Chamath Palihapitiya 43:04 But how?

David Sacks 43:06 Well, we, we need to vote-

Jason Calacanis 43:06 People are... Don't trust them and they're tuning them out-

Chamath Palihapitiya 43:08 Exactly.

Jason Calacanis 43:08 ... and they're going and finding their own answers, so I mean-

David Friedberg 43:10 But I mean, this has been my point. Like, I think we all get tuned up to what the media, quote-unquote, is and isn't saying. I think that's like yesteryears news. I mean, those, those guys (laughs) have lost credibility. You can see it in all the peer research and all the Gallup research that, um, what used to be called and it's still by a lot of people called the mainstream media is no longer mainstream, and it's become kind of outskirt, and where people are finding their, um, their sources of information is direct from the source, from people that they know to be reliable, trustworthy, speakers of the truth, and speakers of facts. And they're getting them direct through social media platforms and other systems of self-publication. And that the idea of having centralized media systems that get to have their own editorial and narrative over whatever facts, quote, they may be kinda gathering and presenting to us, that's an old-school way of doing things and I don't think we have to worry about it too much anymore. Whether or not individuals will resolve to truth-seeking or emotion-seeking is the big question for the 21st century. Because as we've seen, the media, the, the things that we do click on are the things that we already believe and that confirm our bias and that create an emotional incentive, versus the things that may be not what we believe and not what we wanna hear, but may actually be factual. And that's the big kind of challenging question here. I think it's less about these evil media people and it's more about where are individuals gonna make choices.

Chamath Palihapitiya 44:30 Yeah, I mean, uh, I'd say alternative media voices are, have never been more important and, you know, you can get a lot of them on Substack. People like Glenn Greenwald, Matt Taibbi-

Jason Calacanis 44:39 Podcasts?

Chamath Palihapitiya 44:39 Antonio Garcia Martinez, um-

David Friedberg 44:41 Call-In, the Call-In app.

Jason Calacanis 44:43 Oh, God. Here we go. (laughs)

Chamath Palihapitiya 44:44 They're all three of those happen to be on Call-In. Uh, but the other people-

Jason Calacanis 44:45 When it comes to

David Sacks 44:45 (laughs)

Chamath Palihapitiya 44:45 Andrew Solomon, Barry Weiss, I mean, they all have very-

Jason Calacanis 44:47 Our podcast, our podcasts.

David Friedberg 44:49 Their, yeah, they all had very good coverage of this. By the way, I couldn't help notice that the same week that this Rittenhouse narrative collapsed, the whole Steele dossier narrative collapsed.

Jason Calacanis 44:59 Okay.

Chamath Palihapitiya 44:59 You had... And I don't wanna get too political and drag it back to the Trump thing, but you had, you know, John Durham who's the special prosecutor unraveling this whole phony, fake Steele dossier with multiple indictments, and you now have retractions by the Washington Post and other major publications, and that whole narrative that fueled like an entire year of media coverage is completely collapsing. And it's just another example of, you know, the media running with these narratives that turn out to be completely... I hate to use the word fake, but I mean, it is. I mean, it's, it's unbelievable.

Jason Calacanis 45:31 Things in the dossier were fake, but Paul Manafort's convictions not. (laughs)

David Friedberg 45:33 Again, I, I, I would encourage everyone to stop using the term the media or even the term mainstream media and just recognize that there are specific outlets that are on their way down, that are dying-

Jason Calacanis 45:41 Content companies.

David Friedberg 45:43 Yeah, these are content companies that, they, they used to-

Jason Calacanis 45:45 They're content companies that need ratings.

David Friedberg 45:46 They used to be the monopoly and they're no longer. And, you know, they're like yesteryears news and it's just, um... You know, it's like complaining about, you know, whatever, pick any industry that's been disrupted, but they are and will be further disrupted by kind of direct-to-source fact-gathering. The big ultimate question is, what are consumers gonna choose? Um, and that's the thing that scares me the most, to be honest. Because it can, it can go either way.

Jason Calacanis 46:07 I, I think the interesting thing-

David Friedberg 46:08 You can either find better truth-seeking or you can find better emotion, more emotion-seeking and that, that's gonna cause more polarization and more ugly shit.

Chamath Palihapitiya 46:15 And, and, and it's... Yes. Well, look, it's happening right now. You're right that the, the, let's call it the corporate media, the big media corporations, their prestige and esteem in the eyes of the American people have no-

David Friedberg 46:25 Gone. Gone.

Chamath Palihapitiya 46:25 And their credibility has never been lower. It's gone. Okay-

Jason Calacanis 46:27 Gone. New York Times and CNN are crumbling down.

Chamath Palihapitiya 46:28 Absolutely. I mean, just gone. And, and people should be questioning them and stop listening to them. And you have to diversify your information diet, and you gotta be subscribed to some alternative journalists on places like Substack. But here's the thing that concerns me. You know, you've got the media narrative being dictated by MSNBC, and then it trickles down to LeBron James and Chelsea Handler. Sorry, that was the name that I forgot earlier, who were, they were perpetuating this white supremacist narrative around Kyle Rittenhouse. By the way, there was... They looked at his phone, his text messages, everything. There is no connection. There's no proof whatsoever of a connection between him and white supremacy. It was completely made up by the media. And yet these major figures in our culture who have this outsized impact were tweeting about this. And so the problem is, you know, like people like us diversify our information diet, but there are large parts of the country that are just receiving this information, and it gets basically passed down from the media, to Hollywood, to the culture-

Jason Calacanis 47:23 Yeah.

Chamath Palihapitiya 47:23 And it's happening-

Jason Calacanis 47:24 From Tucker, from Tucker Carlson to Scott Baio, to the pillow guy, all of that.

Chamath Palihapitiya 47:29 It is fueling tre- It is fueling tremendous divisiveness and polarization in our culture.

Jason Calacanis 47:33 Yeah.

Chamath Palihapitiya 47:33 And I would say that, you know, JC brought up Trump, and he was a polarizing figure, but I don't think he's the root cause of this polarization. I think he is a reaction to it. I think people-

David Friedberg 47:42 He is the manifestation of it.

Chamath Palihapitiya 47:43 He's a manifestation of it. And ultimately, the root cause is the complete deterioration and collapse of journalistic standards in the media, in the major mainstream, uh, corporate media.

David Friedberg 47:54 I'll disagree with you on that, and I, and I, and I, and I-

Jason Calacanis 47:55 No, I think Trump's responsible for his own behavior.

David Friedberg 47:57 And I've made this point in the past, which is, Sax, I, I don't know if it... You, you make it sound and other people make it sound like in a directed editorial initiative to take things in a direction. And I think that the reaction process is really about, what do consumers wanna consume? What they choose to consume is what they sell more of and what they produce more of.

Chamath Palihapitiya 48:17 Yes.

David Friedberg 48:17 And that's the cycle that's driving this. And, you know, that doesn't mean that these folks are not complicit or not making good kind of ethical decisions. That could actually be argued either way, but at the end of the day, they're businesses that are selling content. And if consumers want content of one form, they're gonna choose that form.

Chamath Palihapitiya 48:31 Okay, look, I think, I, I think you have a point that once a publication goes in a certain direction and starts getting subscribers, there's some positive reinforcement there that has them keep pushing in that direction.

David Friedberg 48:40 Yes.

Chamath Palihapitiya 48:41 That being said, I don't think this is commercial in nature primarily. I think what's going on is fundamentally ideological. You saw...... for example, the New York Times, they ran out Bari Weiss-

David Friedberg 48:51 I've seen it. I've seen it.

Chamath Palihapitiya 48:51 ... they've run out multiple editors-

David Friedberg 48:52 No, no, you're wrong on this.

Chamath Palihapitiya 48:53 ... there have been purges, there have been purges at the newsrooms-

David Friedberg 48:54 They, they did this because they wanted subscriptions. No, no, you're wrong, Sax. When The New York Times did this, they realized Fox picked a side, MSNBC picked a s- side, and they, they benefited from that by picking a side in the Trump era. So The New York Times picked a side, they went MSNBC's side, and they got rid of the right because the right people drove away the anti-Trump subscription. So I think Freeburg's right on this one. I will say another thing to build on what you were saying before, Sax, about the media's responsibility here. We also have to think about the, the cable news media's responsibility when they put these protests on wall-to-wall and they send people there, that then inspires people to go there. And, you know, when you do this wall-to-wall coverage across five networks, i- and you obsess over something, people are going to obsess over it. And they see people out there rioting and people model other people's behavior, and I think they need to think, like, uh, how much coverage do we exactly have to give...

Chamath Palihapitiya 49:48 Right, well, even now-

David Friedberg 49:49 ... you know, this riot?

Chamath Palihapitiya 49:50 Even now, they're bringing out the National Guard in anticipation of possibly riots and protests in reaction to-

David Friedberg 49:55 Which then could induce it.

Chamath Palihapitiya 49:56 Well, in reaction... No, I don't know if it's gonna induce it, but, but the, but the-

David Friedberg 49:59 It can.

Chamath Palihapitiya 49:59 ... in, in reaction to this verdict in the Rittenhouse trial, they're bringing out the troops to basically quell any, you know, riot before it gets started. But why would that riot even happen? Because the people have been fed this narrative that is completely bogus, and in that sense, the media's been incredibly irresponsible, and they're playing with fire.

David Sacks 50:18 They really are. I, I'll say it again, and we've fallen into this same trap. Look how much time we've just spent talking about Kyle Rittenhouse. I mentioned Ahmaud Arbery and we've just glossed over it.

David Friedberg 50:27 Is his trial being-

David Sacks 50:29 It's happening right now.

David Friedberg 50:30 No, no, but is it on video? 'Cause th- that is another major issue here, is when the trials are on video, th-

Chamath Palihapitiya 50:35 These trials should, they should never do TV again on these trials. Just never again. I mean-

David Friedberg 50:39 I- it, it really does create-

Chamath Palihapitiya 50:40 ... �... allow reporters in the courtroom, but do not put it on TV.

David Friedberg 50:43 Like, Theranos is not allowing, uh, video in the courtroom and it's not getting coverage to this extent, and I think the video on the courtroom-

Chamath Palihapitiya 50:49 Smart.

David Friedberg 50:49 ... does drive this.

Chamath Palihapitiya 50:50 It makes it a circus.

David Friedberg 50:52 Breaking news. Citadel CEO Ken Griffin outbid a group of crypto investors for a copy of the US Constitution-

Chamath Palihapitiya 50:59 (laughs)

David Friedberg 50:59 ... according to The Wall Street Journal, so-

David Sacks 51:00 I mean-

Chamath Palihapitiya 51:00 Oh my God.

David Friedberg 51:01 ... we knew somebody was trolling for crypto. (laughs)

Chamath Palihapitiya 51:03 He was a villain, he was a villain before this, but now, remember from payment for order flow?

David Sacks 51:06 My God, exactly.

Chamath Palihapitiya 51:06 I mean, he was the central villain basically in that whole Robinhood fiasco for payment for order flow. And now he outbid the crypto crowd. He is gonna be enemy number one.

David Sacks 51:16 Basically, there is no more sophisticated market participant than Ken Griffin-

Chamath Palihapitiya 51:20 (laughs)

David Sacks 51:20 ... and on a silver platter, this group of people unfortunately showed-

David Friedberg 51:24 Told him what they're gonna bid.

David Sacks 51:25 ... showed them their strategy and showed them exactly how to become the under bidder.

David Friedberg 51:29 He priced it right- He, you know what, you know what-

David Sacks 51:29 ... he did the prices right. He put $1 on top of their bid.

David Friedberg 51:31 You know what Ken Griffin knows? Ken Griffin knows that now this is an object of interest that people are basically willing to pay anything for. Bingo. He's gonna buy it now, and in one year he'll sell it- Flip. ... for twice as much. It's a valuable asset. But by the way-

David Sacks 51:43 Let it flip.

David Friedberg 51:43 ... I wanna make a point on this.

David Sacks 51:44 I disagree, by the way. He's a, he's a buyer, he is not a seller.

David Friedberg 51:47 He's gonna hold. Okay. But, look, markets don't work with this much transparency. Markets only work when people have different information than other people that are participating in the market. If everyone knew every-

David Sacks 51:58 No, no, no, no, no, no, no, no, no, no.

David Friedberg 51:59 If everyone knew everything-

David Sacks 52:00 Same data-

David Friedberg 52:00 ... that everyone else was gonna do...

David Sacks 52:02 No.

David Friedberg 52:02 Same data, but if everyone knew what everyone else-

David Sacks 52:04 Same data, different opinions.

David Friedberg 52:04 Different opinions. But if everyone knew everyone else's opinion on what something is worth, the market doesn't work. And that's the problem they have here.

David Sacks 52:10 Opinion. Yeah, yeah, yeah. Yeah.

David Friedberg 52:11 Yeah. So here's what I value an asset at, and now if you know that, you know how to play against me in the market. And I'm gonna point out-

David Sacks 52:16 I told, that's what I said.

David Friedberg 52:17 Yeah, exactly. And one thing, one thing I'll take note of that, that I, that I kind of realized yesterday when I was thinking about this, which is this, like, transparency in markets leads to this inflationary problem. Why do you think everything that the government buys inflates? Because everyone already knows what the government is gonna spend on that thing. When the government enters into a market like healthcare or education or defense, the amount that they're gonna spend is published in a bill. And then Congress says, "Here's your authorized budget, here's how much you're gonna spend." So there is no natural market force that says a bid and an ask, "What are you willing to pay?" And is there a walkaway price? There is no walkaway price when the government is, is told to go spend some amount of money. And as a result, the price of everything inflates to that walkaway, (laughs) to that price, to that budget.

David Sacks 53:04 Can I build on that? It's, it's e-

David Friedberg 53:05 And by the way, that's, that's, that's the, in my opinion, based on everything I've looked at, the primary reason for the increase in education cost, because the government funds all the student loans, the increase in healthcare, um, the increase in defense, all of it is because the government is the customer and they tell the person that's servicing them upfront, they tell the market what they're willing to pay. And so the market just inflates to th- to that amount. And it's, uh, it's, it's really the reason why the way that we budget things in the government as opposed to saying, "Look, this is the ROI metric or this is the IRR metric you need to be shooting for with this government spending," it's all based on a fixed dollar amount of a budget that says, "Here's how much you should go spend." So-

David Sacks 53:41 Well, look, it's, it's, as I said, it's, it's actually worse than that because then the procurement process is, is not, is the furthest thing from a free market where you essentially have these licensed people that are allowed to provide services. And so if you actually have the key critical input to making something possible, you have to get bundled in through contractors and subcontractors and general contractors who each take their five and 10%. And then that, that's what you, that's when you have like, you know-

David Friedberg 54:07 And, and their hourly costs all balloon just a little bit, just a little bit, just a little bit, and suddenly the balloon cost of everything matches exactly the budget.

David Sacks 54:13 So the perfect example of this is the space program.

David Friedberg 54:16 Yes, totally.

David Sacks 54:16 There was a, there was a, there was a rant by Bernie Sanders yesterday basically saying-

David Friedberg 54:21 (laughs) Totally.

David Sacks 54:21 ... "How could we have allowed Jeff Bezos, Mr. Bezos and Mr. Musk to basically take over our national space program?"

David Friedberg 54:29 (laughs)

David Sacks 54:29 "We need to take-"

David Friedberg 54:29 The national space program.

David Sacks 54:31 "We need to take it back."

Chamath Palihapitiya 54:32 Oh my God. (laughs)

David Sacks 54:32 And then somebody... Hold on. And then somebody-

David Friedberg 54:35 Can you play the clip? (laughs)

David Sacks 54:35 And then somebody thoughtfully went-

David Friedberg 54:37 Oh, just act it out. Give me the transcript.

David Sacks 54:38 Somebody thoughtfully went back and actually looked, because again, as David said, everything is transparently published. They went back and they actually counted how much money NASA spent in like the last seven or eight years, and the number was 360 odd-... billion.

Jason Calacanis 54:55 Yeah.

David Sacks 54:55 And then they counted how much money, uh, SpaceX had spent, and it was, you know, if you counted revenue between $7 and $11 billion.

Jason Calacanis 55:03 Totally.

Chamath Palihapitiya 55:04 Totally.

David Sacks 55:04 And so you have-

Chamath Palihapitiya 55:05 Oh, my God.

David Sacks 55:05 ... this incredible disparity-

Jason Calacanis 55:07 (laughs)

Chamath Palihapitiya 55:07 Totally.

David Sacks 55:07 ... which speaks to this.

Jason Calacanis 55:08 This guy is senile.

Chamath Palihapitiya 55:09 Well, after the space shuttle, after the space shuttle was retired-

Jason Calacanis 55:11 (laughs)

Chamath Palihapitiya 55:11 ... NASA didn't even have a way to get to space until-

Jason Calacanis 55:13 Hear, hear.

Chamath Palihapitiya 55:13 ... SpaceX had the rockets. I mean-

Jason Calacanis 55:15 Uh, and think about how many people died on the space shuttle.

David Sacks 55:17 Guys, what Bernie is saying, which is what's, I think, scary to me, is if you take the difference between $360 billion and 7, so $353 billion and divide it by the number of people in the United States, you're basically talking about $1,000 per s- $1,000 a person. Would you and I sit around a table and give Bernie Sanders $1,000 out of our own pocket-

Chamath Palihapitiya 55:40 Hell, no.

David Sacks 55:41 ... to go and basically implement a f- uh, a half-ass space program? No, I'd rather-

Chamath Palihapitiya 55:46 It's not believable.

David Sacks 55:46 I'd rather give Elon Musk 10 cents, which-

Jason Calacanis 55:49 Right.

David Sacks 55:49 ... or one cent, which is the, the equivalent alternative, or a penny.

Jason Calacanis 55:52 Right.

Chamath Palihapitiya 55:52 This, this raises a really serious issue, which is, who is the better capital a- allocator of, you know, resource-

Jason Calacanis 55:58 Private private private markets (laughs) .

Chamath Palihapitiya 55:58 ... society, private markets or the government? And let me give you an example. So today, the House is voting out that reconciliation bill. They've gotta, they're spending 2.1 trillion.

Jason Calacanis 56:06 It's insane.

Chamath Palihapitiya 56:06 Just as one example, just one example that caught my eye is they've got $2.5 billion going to tree equity, whatever that is.

Jason Calacanis 56:16 (laughs) I'm sorry, tree what?

Chamath Palihapitiya 56:17 Tree equity, tree equity. This is like-

David Sacks 56:19 What is tree equity?

Chamath Palihapitiya 56:21 I, I think it might mean that, like, some communities-

Jason Calacanis 56:23 How high trees can grow?

Chamath Palihapitiya 56:24 ... have more trees, and... I think it means that some tr- some communities have more trees than others, they gotta rectify that. I don't know. I mean, this is like the jump-the-shark moment for the word equity, because I think now everything is equity. But, but, you know, what, what struck me about this $2.5 billion number, okay, is that, like, Craft Ventures, which I've been doing for the last four years, we've raised and will be deploying a total of about 2 billion over, call it, five years into hundreds of startups that, you know, will pave the way for the next generation of the economy. So, 2 billion versus 2.5 billion as one line item, that's just a footnote, that's an asterisk in this bill. I mean, what is the better capital allocation decision? And what people have to understand is, you know, all this, um, money that gets spent gets sucked out of the private economy somehow. It either, you know, comes from taxes or it gets added to the, the, uh, national debt. But either way, it comes out of the private economy and resources that could be allocated to the next generation of, of innovative companies. And to be-

Jason Calacanis 57:24 All right, let's play the clip.

Chamath Palihapitiya 57:24 ... squandering the money like that on all these programs that no one even knows what they do, uh, when we're almost 30 trillion in debt is just unbelievable.

Jason Calacanis 57:35 Okay. The 1% are going to be going to space and taking away the moon from the other 99%. Here, roll the clip.

Guest 57:43 Unbelievably, this bill would provide and authorize some $10 billion in taxpayer money to Jeff Bezos, the second wealthiest person in America, for his space race with Elon Musk, the wealthiest person in America. This is beyond laughable, and I will be introducing an amendment to strike this provision. Frankly, it is not acceptable. It's not an issue that we have discussed terribly much, but it is not acceptable that the two wealthiest people in this country, Mr. Musk and Mr. Bezos, take control of our space efforts to return to the moon and maybe even the extraordinary accomplishment of getting to the moon. This is not something for two billionaires to be directing. This is something for the American people to be determining.

Chamath Palihapitiya 58:39 Yeah. All the people have to be able to go to the moon before two people can go to the moon. Is that the idea?

Jason Calacanis 58:43 Yeah. If there was a Go to the Moon DAO-

Chamath Palihapitiya 58:45 (laughs)

Jason Calacanis 58:45 ... it would get more functioning- Oh, good callback.

Chamath Palihapitiya 58:48 ... than, than, than this freaking bill.

Jason Calacanis 58:48 Look at you with the callbacks, Friedberg. You're learning how to entertain the audience.

Chamath Palihapitiya 58:50 Would be funny.

Jason Calacanis 58:51 Can you imagine? People would just plow money into a Go to the Moon DAO and give it all to Elon Musk.

David Sacks 58:55 Oh, it's gonna be so good, yeah.

Jason Calacanis 58:55 More people would do that than would vote to support the Senate bill. It's just, uh- Additionally, I would like to report that Starlink does not work at my lake house and Amazon Prime takes three to four days at my beach house on the cape, and that these two companies are oppressing the 3% of the top 3%, which I am not part of the 1%.

Chamath Palihapitiya 59:13 And, and some people don't have enough trees.

Jason Calacanis 59:17 (laughs)

Chamath Palihapitiya 59:17 And we need trees

Narrator 59:18 (laughs)

Jason Calacanis 59:18 In my, uh, in my community, there's only small trees, and we want the redwoods-

Chamath Palihapitiya 59:23 (laughs)

Jason Calacanis 59:23 ... from San Francisco. Why do they or the hippies get the redwoods that are much taller?

David Sacks 59:27 Do you guys remember, uh, one of our very earliest pods, I made a statement, which is, equity is this danger word that the progressive left uses to steal power?

Jason Calacanis 59:37 Yes. Yes.

David Sacks 59:38 That we should al-

Jason Calacanis 59:38 I feel unsafe (laughs) .

David Sacks 59:39 We should always want equality, but not equity, because equity is zero sum, right? You know a cap table. Once you give somebody else equity, it's dilutive-

Jason Calacanis 59:48 Yup.

David Sacks 59:48 ... to everybody else, but equality is infinite. You can have unbounded equality.

Jason Calacanis 59:53 Yes.

David Sacks 59:53 And when I hear these guys talk about this stuff, it's so scary. The second thing is, I'm a little confused by what Bernie is saying, because on the one hand, he wants to cancel the American government's effective, you know, support of these programs. On the other hand, he wants us to take back the responsibility for it. But I think he must realize that it would cost 50 times more or 100 times more.

Jason Calacanis 1:00:18 It doesn't matter. He's e- he's not, he's not s- he's not spending-sensitive, in case you haven't noticed. I also think this is, like, virtue signaling. Like, he was attacking Bezos about, like, minimum wage, and then Bezos came over the top and, like, doubled it and then gave people college education. That was Bernie Sanders' platform for president was, like, give people free college and give people, like, a better $15 minimum wage. Bezos has done more for Bernie's platform than anybody. He should be thanking... He should be telling people, "All companies should be acting-"

David Sacks 1:00:46 Also-

Jason Calacanis 1:00:46 "... like Amazon."

David Sacks 1:00:47 No, no, no. But also, actually, to your point, can I build on that?

Jason Calacanis 1:00:49 Yeah.

David Sacks 1:00:49 Amazon is now doing more to actually unwind duopolies and monopolies in markets than the government and the FTC is, you know?

Jason Calacanis 1:00:57 Absolutely.

David Sacks 1:00:57 You see this, see this thing that Amazon is now doing in the UK with Visa-... where they've basically shut Visa off and people are speculating now that it's a step in this direction of Amazon, you know, and Amazon domestically in the United States, they just did this big deal with a firm and so they are looking at... And they- there's a rumor that they may switch the Amazon credit card off of Visa rails and put them on MasterCard rails. But there's just another example, Jason, to your point of, like, you know, Bernie and the left, progressive left would probably rail against the duopoly practices of- of Visa and MasterCard, they can't get anything done. Jeff Bezos has actually done more now-

Jason Calacanis 1:01:35 Presses a button.

David Sacks 1:01:35 ... presses a button and has done more now to actually affect competitive demand.

Jason Calacanis 1:01:37 All right, here's another one to build on yours. Who is doing... I mean, uh, Bernie Sanders cares about global warming, it's like one of his key issues, who's donated more to bur- to global warming than- than Jeff Bezos? Nobody.

David Sacks 1:01:47 Nobody.

Jason Calacanis 1:01:47 Who's doing 100,000 electric vehicles for his delivery fleet? Jeff Bezos. Jeff Bezos took Bernie Sanders' platform that he failed to get into office on and he made it Amazon's platform.

David Sacks 1:01:58 Here's a third example. Nick, you Tweeted this out. Nick, or you can find this thing that I Tweeted out, but it was a little meme and it was, uh- it was, um- it was basically, um, Tobey Maguire and Kristen Dunst, right? There's a meme of, like-

Jason Calacanis 1:02:09 The famous upside down kiss.

David Sacks 1:02:11 To- T- to... No, they're looking at each other and basically the joke is like, you know, every time you protested at, you know, uh, uh, uh, to shut down a nuclear plant, uh, the resulting effect 40 years later was another 100 megatons of CO2 was put into the air. (laughs) And it just goes to, yet again, another example of we virtue signal nuclear reactors and nuclear power, we go and we get them all shut down, it turned out that we ingested, uh, or we, uh- we, uh, put out as a result an enormous amount of more CO2 than had to be put and then and now who's helping to step in and solve it? Another private citizen, Bill Gates.

Chamath Palihapitiya 1:02:43 Look, if it weren't for these private companies, we couldn't even get astronauts to space anymore.

David Sacks 1:02:47 Impossible.

Chamath Palihapitiya 1:02:47 I mean, like, the government has actually lost the capacity to do that.

David Sacks 1:02:51 Impossible. It would- it would've been impossible.

Jason Calacanis 1:02:53 And who are we up against for space? I mean, China, Russia?

David Sacks 1:02:58 Not just China, just- just China right now.

Jason Calacanis 1:03:00 I mean, Russia's still got their-

Chamath Palihapitiya 1:03:01 It's such a dichotomy. It's such a dichotomy between, and this is, like, a recurring theme of the show, between what the private sector and specifically... And- and- and not, like, the Fortune 500, not those old stodgy companies that are in the process of being disrupted, but what the, sort of, entrepreneurial economy is able to accomplish versus, like, how stultified and calcified and incompetent the government's become.

Jason Calacanis 1:03:26 I mean, i- i- to your point, uh, Freeburg, I think Sam Altman, uh, led this- the fusion energy startup Helion, like, $500 million round. I mean, by the time these nitwits, you know, in these political office figure these things out, we're going to have fusion reactors, aren't we? Is that real science? Is that coming close? What do you think, Ruber?

David Friedberg 1:03:50 I mean, Bill Gates just did this, uh, what is it called? TerraPower, uh, announcement this week, um, he's got a company that he's been funding for years and they're building a 500 megawatt, um, uh, fusion plant in, um, uh, Wyoming, I think. Yeah.

Jason Calacanis 1:04:07 In Wyoming, yes.

David Friedberg 1:04:08 In Wyoming. And he got two billion from the government and two billion, uh, that was funded by the company and its shareholders, which I think is majority owned by Bill Gates. But it certainly, uh, feels and seems to me... I mean, look, this one, like we've said, a lot of these infrastructure deals, these big infrastructure deals for things like power and next gen manufacturing and whatnot, you know, could use the be- could benefit from the boost of, you know, government subsidies or, you know, government shared costs to get these things off the ground. Over time, as you get scale and reproducibility of them, the cost per unit comes way, way, way, way down, um, and so, you know, it seems to be the case that there are enough of these programs... I think- I know of at least half a dozen nuclear power companies that are, you know, in advanced stages of doing, um, you know, first installation design right now, and so it seems like this is going to be a reality. I think it- it would be an incredible, um, boom to, uh- to clean energy in the United States and globally if we can get more of these built. I mean, what was the stat? China's building 150 nuclear power plants?

Jason Calacanis 1:05:08 Yes, something like that.

David Friedberg 1:05:08 Uh, they've commissioned 150 nuclear power plants. I mean, it's a no-brainer that that's what we need, um, in the 21st century. It's the best renewable source, uh, very small footprint, very reliable, it can run 24/7, uh, doesn't depend on some, you know, sun or wind or what have you, so you can plug it into a grid.

Jason Calacanis 1:05:25 And so the government literally does not need to get involved in this a- aside from writing a check and ch- chopping it up 50/50, split the pot with Bill Gates.

David Friedberg 1:05:32 Well, I think there's an important role that the government can and should play here, which is, you know, if we want to talk about what infrastructure this country needs, I've said it on the last couple of shows, we don't need yesteryear's infrastructure, we don't need last century's infrastructure, new bridges and, you know, toll bridges or whatever nonsense is, uh, you know, gonna get inflated as a result of this recent infrastructure bill. What we need is next gen infrastructure. And not charging stations, 'cause the free market's already there doing that, um, and, you know, not internet 'cause the free market's already there giving everyone internet, and we see a thousand examples of that. What we need is the stuff that the free market cannot afford to fund and stand up, like next gen nuclear power stations, like biomanufacturing, like large scale on demand 3D printing systems. These are the sorts of infrastructure programs that the United States and our workforce could benefit from government subsidies to help private force- the priv- the private markets get stood up. And as these things get stood up, and the flywheel gets going and cash starts getting generated, they can self-fund and they can grow and they can install more of these and the costs come down for the next one. The things where the government is the only customer, the only person buying, the cost will only go up on- over time. Whereas the things that the private market is building, the cost will go down over time. And in some of these cases where there's a big kind of hurdle to get over the first build or the first build cycle, you know, the- the government has an important role to play, I think. And so, you know, look, I mean, it- it's clearly not going to happen with this current infrastructure bill. There's a few nuggets in there that might be useful and helpful, um, but generally speaking, you're right. I mean, o- over time we want the cost of things to come down, not go up, and so we need the private market to play a critical role in being the majority driver, you know, of these kind of systems.

Jason Calacanis 1:07:05 All right. Seems like a good place to end.

David Sacks 1:07:08 Pete Davidson is now dating Kim Kardashian-

David Friedberg 1:07:11 How jealous are you, Chamath?

David Sacks 1:07:13 I'm not jealous, but-

David Friedberg 1:07:14 What are you talking about? He's been a great wife- a great-

David Sacks 1:07:16 I am- I am shocked that Pete Davidson has dated some of the most incredibly famous popular women in the world.

David Friedberg 1:07:23 Oh, so you aren't jealous? Okay. (laughs)

David Sacks 1:07:25 Well, I'm a little curious.

David Friedberg 1:07:27 That's why I'm not jealous. (laughs)

David Sacks 1:07:27 I gotta say, I'm a little curious. I mean, if you put a picture of Pete Da- I mean, there's gotta be something happening there. Let's just put it out there.

Chamath Palihapitiya 1:07:32 You've got the kavorka. You've got the kavorka.

David Friedberg 1:07:34 I'm gonna send you a link to an article. There's an article-

David Sacks 1:07:36 I don't know what a kavorka is. I'm Googling.

Chamath Palihapitiya 1:07:37 You don't remember that from Seinfeld? Where, um, Kramer was like, you know, dating all these beautiful women? And it's 'cause he explained he had the kavorka.

David Sacks 1:07:44 He's got a better finishing move, yeah.

David Friedberg 1:07:46 This is an article that went viral this week. Emily Ratajkowski, how do you pronounce her name?

David Sacks 1:07:50 Yeah.

David Friedberg 1:07:51 Breaks down- breaks down why women find Pete Davidson so attractive. And so, this was like, you know, I saw it all over Twitter this week, but it was all about, you know, the- the claim.

David Sacks 1:07:59 And- and what is the answer? Just give me the headlines.

David Friedberg 1:08:02 I don't know. It's something... Uh, he's got, uh, super charming, he's vulnerable, he's lovely, his fingernail polish is awesome. He looks good, he has a good relationship with his mom. I mean, I just think he comes across as a good guy, might be the appeal. Um, but you just need to do the summary yourself.

David Sacks 1:08:18 Also, they wanna take care of him, I think, because he's got like, his dad died-

David Friedberg 1:08:21 I think you guys are missing a more subtle, non-obvious point. (laughs)

Chamath Palihapitiya 1:08:24 (laughs)

David Sacks 1:08:24 Well, I don't know what you're talking about, Chamath. (laughs) You- you explain. Maybe you could expand on your thesis.

Chamath Palihapitiya 1:08:31 I'm just guessing.

David Friedberg 1:08:31 It's a family- it's a family show, Chamath. It's a family show.

David Sacks 1:08:34 Oh, my God.

David Friedberg 1:08:34 Yeah. Uh, no, I think they wanna take care of him. That's what I heard from a spec- a woman said.

David Sacks 1:08:39 Good for Pete Davidson.

David Friedberg 1:08:39 They wanna like, work on him and take care of him.

David Sacks 1:08:42 Rock on Pete Davidson.

David Friedberg 1:08:42 Rock on.

David Sacks 1:08:42 But yeah, I- I mean, also Kim Kardashian, I- I think, you know, she just got the Gen Z. I think she was probably going the way of Paris Hilton, like maybe aging out of her, uh,