Elon gets paid, Apple's AI pop, OpenAI revenue rip, Macro debate & Inside Trump Fundraiser

Jason Calacanis 0:00 Nick, these guys are low energy today. You notice that? You know what we need to do? We need to (censored) gamble. Let's do it, Nick. Let's play a (censored) hand of blackjack. Let's get these guys (censored) amped.

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:08 Gentlemen, what an absolute pleasure to walk amongst some goddamn greats. Uh, let me see if I can put a bit of pip in your step with a one-time blackjack hand to kickstart one of the greatest-

Jason Calacanis 0:18 Is this real?

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:18 ... podcasts on Earth. It is... I can confirm this is not AI, my friend.

Jason Calacanis 0:21 You did this?

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:22 We're gonna rock and roll proper today.

Jason Calacanis 0:24 Let's go.

Chamath Palihapitiya 0:25 (laughs)

David Sacks 0:25 All right.

Jason Calacanis 0:26 Let's (censored) get some action. This is early.

Chamath Palihapitiya 0:27 Wait, are, is this guy... Are you on right now?

David Sacks 0:28 LFG.

Jason Calacanis 0:28 Hold on.

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:29 Oh, yeah. Mate, you are going to... You are... I, I'm actually breaking my own rules for you guys. Uh, I filmed today's hand, day 14-

Chamath Palihapitiya 0:35 (laughs)

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:35 ... but I'm gonna film tomorrow's hand for you guys right now. Um, it'll roll out this, this week's en-

Jason Calacanis 0:41 Yes. (clapping)

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:41 ... roll, roll out when you record.

David Friedberg 0:42 Wait, Tim, Tim, sorry. Hold on. Hold on. Wait a minute, Tim. You are a Kiwi living in Calgary. Is that right?

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:48 Yes, uh, correct, yep. Kiwi living in Calgary. Been here since September 2022, the missus and I.

David Friedberg 0:53 Oh my God.

Jason Calacanis 0:53 That's fantastic.

Chamath Palihapitiya 0:54 This is awesome.

Jason Calacanis 0:54 Well, welcome, welcome to my country.

David Friedberg 0:56 Welcome to the pod.

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:57 Thank you.

Jason Calacanis 0:58 I don't live in Canada anymore, but...

Tim the Kiwi gambler (Instagram poker vlogger guest) 0:59 Yeah, I don't think so either.

Chamath Palihapitiya 0:59 Tim, that was a fun ride to Calgary. I don't know how I... I stumbled across you somewhere, and I started watching all your videos on Instagram.

Tim the Kiwi gambler (Instagram poker vlogger guest) 1:04 Mm-hmm.

Chamath Palihapitiya 1:04 They were off the hook, man. Congrats. They're awesome.

Tim the Kiwi gambler (Instagram poker vlogger guest) 1:07 Thank you.

Chamath Palihapitiya 1:07 So much fun.

David Friedberg 1:08 Where, where in New Zealand are you from?

Tim the Kiwi gambler (Instagram poker vlogger guest) 1:10 Uh, from Taranaki. So west coast, North Island. Certainly not somewhere... Uh, it's not a holiday destination for certain if you're going. It's like dairy farming country. It's, it's, it's beautiful, but it's off the beaten path, so yeah.

David Friedberg 1:22 And how did you... How did you choose Calgary of all places in Canada?

Tim the Kiwi gambler (Instagram poker vlogger guest) 1:25 Uh, do you know what the missus... We holidayed here, uh, my fiance and I, May 2022. And we thought it was just gonna be a holiday, then back to the farm. Um, but I guess we had that, uh, COVID cabin fever like the rest of the world, and loved our time here so much that we just decided before we even finished the, uh, the holiday that we cracked on to, to getting our visas and got back, sold up my livestock and leased the farm back to me parents and, and made the move.

Chamath Palihapitiya 1:50 (laughs) That's awesome.

Tim the Kiwi gambler (Instagram poker vlogger guest) 1:50 And, uh, we haven't looked back. I don't, I don't think they'll be seeing me, uh, pulling tits on the dairy farm anytime soon. Oh, and that's colloquial for jerking, by the way.

Chamath Palihapitiya 1:57 (laughs)

Tim the Kiwi gambler (Instagram poker vlogger guest) 1:57 Um, yeah.

Jason Calacanis 1:58 So lads, uh, what do we wanna do here? We wanna put 10K and then, uh, give it to, uh, uh, one of, uh, Tim's mates who's, who's stuck or something? How do we do this? We MrBeast this? We give 10K to the next time you get coffee if we win?

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:11 Yeah.

Jason Calacanis 2:11 And give it to the barista or something? What should we do?

David Friedberg 2:13 Yeah, let's do it. Let's do it. Let's do a 10K free roll for Tim and his fans.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:17 Okay, perfect.

Jason Calacanis 2:17 Okay.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:17 So now do you want me to add that to my bet for this one?

Jason Calacanis 2:21 Yes.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:21 Yeah. Okay.

Jason Calacanis 2:21 Yes, absolutely. We wanna be in the 10K sweat with you.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:24 'Cause what... One and... One and done is absolutely the, uh, the way to go about this.

Jason Calacanis 2:28 (sighs) Ooh.

David Friedberg 2:28 I gotta say that was-

Chamath Palihapitiya 2:28 There we go.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:29 First part we've got to do here is pick out a dealer.

Jason Calacanis 2:32 Are these real dealers or are these AI dealers? We had a debate.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:34 Yeah. No, these are... These definitely are real dealers. They're certainly Eastern European as far as I know. I don't know what their quality of life is like.

Chamath Palihapitiya 2:40 (laughs)

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:40 I imagine they're warehoused somewhere, uh, and put on the tools. Now, I had a... I went with a, with a young lassie today and she (censored) rolled bold and asked (censored) of me.

Chamath Palihapitiya 2:48 (laughs)

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:48 So we're going back to the blokes 'cause they've been good to me.

David Friedberg 2:50 (laughs)

Jason Calacanis 2:50 Yeah, pick a bloke.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:51 Uh...

Jason Calacanis 2:51 Pick a bloke. Somebody who feels blue-collar who wants to work for us.

Chamath Palihapitiya 2:55 Mm-hmm.

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:55 Good point.

Jason Calacanis 2:55 We need somebody who's a worker. And you have-

Tim the Kiwi gambler (Instagram poker vlogger guest) 2:57 He's hoping...

Jason Calacanis 2:57 ... over a million followers now watching this craziness.

Tim the Kiwi gambler (Instagram poker vlogger guest) 3:01 Yeah, it's gone from 15,000 to 1.3 million in this entire journey. So, uh-

Jason Calacanis 3:05 Jesus.

Tim the Kiwi gambler (Instagram poker vlogger guest) 3:06 ... yeah. A little bit nonsensical, but-

Jason Calacanis 3:07 Okay, this, this looks like a good... He looks like a hard worker.

Chamath Palihapitiya 3:09 Wait, what do you mean this guy, Tim?

Tim the Kiwi gambler (Instagram poker vlogger guest) 3:10 He looks like he's gonna work for us. Oh, you gotta... You gotta cop the insult live as I do it.

Chamath Palihapitiya 3:14 (laughs)

Tim the Kiwi gambler (Instagram poker vlogger guest) 3:14 Uh, all righty. It is day 15, uh, going to blackjack. How many, one, two, three, four I've got. We have a $14,000 bet going on the line for me personally. But I actually have some absolute legends with me today. I'm betting for the besties from the All In podcast as well. They're gonna bring the luck, having been rolled bold and asked (censored) by a young lassie yesterday. So $34,000 goes on the line. Oh, no, no, you guys want $10,000, right? Not $20,000? Geez, I better not, uh... Not take it.

Jason Calacanis 3:42 Put us down for 10. Put us down for 10.

Tim the Kiwi gambler (Instagram poker vlogger guest) 3:45 10. $24,000 is going on the line. Our dealer looks like the kind of bloke who stops at red lights playing GTA. We won't hold that against. Real nice, if you will. I need to see good cards. Jackers!

Jason Calacanis 3:56 Oh, oh, oh.

Tim the Kiwi gambler (Instagram poker vlogger guest) 3:57 21!

Jason Calacanis 3:58 (clapping)

Chamath Palihapitiya 3:58 (clapping)

David Friedberg 3:59 (clapping)

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:01 Yeah! Yeah!

Jason Calacanis 4:03 That's how we do it! That's how we do it! Let's go, baby! (censored) . Yeah!

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:10 That's how we do it! Let's go! Oh my God.

Jason Calacanis 4:14 That's our worker bee! That's our worker bee!

Chamath Palihapitiya 4:17 (laughs)

Jason Calacanis 4:17 I knew he would do it for us.

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:18 I can't believe we've just pulled that off! Oh my God!

Chamath Palihapitiya 4:23 Ugh. Ugh.

Jason Calacanis 4:24 Did that, did that really happen?

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:25 Oh, gentlemen, that has really just happened. You've just turned 10 into 25. Holy (censored) .

Jason Calacanis 4:30 Holy cow.

Chamath Palihapitiya 4:33 (laughs)

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:33 Oh my God.

David Friedberg 4:34 (laughs)

Jason Calacanis 4:34 (laughs) Look at Sax. He's like, "We can do this for the home taping."

David Friedberg 4:38 That's amazing.

Chamath Palihapitiya 4:39 Sax is ready for another round.

David Sacks 4:41 We turned 20... 10 into 25?

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:43 And you know-

David Sacks 4:43 All right, so-

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:43 Amazing.

David Sacks 4:44 ... are we gonna have a separate all-in balance? We just keep rolling it every week?

Chamath Palihapitiya 4:47 (laughs)

Jason Calacanis 4:48 Yeah, can you come back next week and... (laughs) Can we put this out to him?

David Sacks 4:50 Just keep rolling.

Chamath Palihapitiya 4:51 Yeah. So good.

David Friedberg 4:51 (laughs)

Jason Calacanis 4:51 We just keep rolling every week. (laughs)

Tim the Kiwi gambler (Instagram poker vlogger guest) 4:54 We might have to. That is... I cannot believe we've just blackjacked. That is unbelievable.

Chamath Palihapitiya 5:01 Yeah. (laughs) Well, Tim, have a good day.

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:03 It's hard not to.

David Friedberg 5:03 (laughs) Yes, it's hard. It, it's-

Jason Calacanis 5:03 All right, Tim, you are a legend. Everybody follow Tim on Instagram.

Chamath Palihapitiya 5:07 Yeah.

Jason Calacanis 5:07 Let's get him to 10 million. Let's get... I mean, you have a future in broadcasting. You are gonna make-

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:13 Oh.

Jason Calacanis 5:13 ... millions. You're... You, you went from the farmhouse-

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:16 Oh, yeah.

Jason Calacanis 5:16 ... to the-

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:17 Literally.

Jason Calacanis 5:17 And here we go. Now you're gonna be running a casino. I think-

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:20 I mean if-

Jason Calacanis 5:20 ... you should have Tim's blackjack. You should have your own branded-

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:23 Oh, I'd love to.

Jason Calacanis 5:23 We could do a whole brand on this.

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:25 Totally. Tim.naki-

Jason Calacanis 5:26 Tim.naki on Insta.

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:27 I tell you what, I won't have to run anything.

Jason Calacanis 5:29 Tim.n-a-k-i.

Chamath Palihapitiya 5:30 Yeah.

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:30 I won't have to run anything if I can just play one hand of blackjack with you guys and I land jack, ace every week. That is unbelievable.

Chamath Palihapitiya 5:35 Yeah.

Jason Calacanis 5:36 And like we said, that 15K we won-

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:39 Yep.

Jason Calacanis 5:39 That's yours for you and the missus. Go on a great vacation.

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:42 Oh, no.

Jason Calacanis 5:42 No, no, no, no. We said it. We said it. We want you-

Chamath Palihapitiya 5:45 Agreed.

Jason Calacanis 5:45 ... to do something good with it. We're already cashed up. You take that 15K. You take the missus out. You get some first-class tickets. You meet Shamak in Italy-

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:54 To the All In Summit?

Jason Calacanis 5:54 And then let's go. That's it. Come to the summit.

Tim the Kiwi gambler (Instagram poker vlogger guest) 5:56 How about I... How about I go first class to the All In Summit now? That now is-

Jason Calacanis 6:00 Ooh.

David Friedberg 6:01 ... blocked-

Jason Calacanis 6:01 Oh, we could play some... Oh, we could have a whole session.

David Friedberg 6:04 We could do blackjack.

Jason Calacanis 6:04 Oh, yeah.

Chamath Palihapitiya 6:04 We may or may not have a, have a fun casino night there, so-

David Friedberg 6:07 Ooh.

Jason Calacanis 6:07 ... this will be fun. Yeah, oh, yeah.

David Friedberg 6:07 Yeah, you gotta come, man.

Jason Calacanis 6:08 ... at Summit, for sure.

Chamath Palihapitiya 6:09 All right.

Jason Calacanis 6:09 Yeah, get the missus, take the 15K-

Chamath Palihapitiya 6:11 How long till I can roll.

Jason Calacanis 6:12 ... two first-class tickets, get yourself set up in a nice hotel, and we will see you there. All right, everybody. Let's get to the docket. Well done, Tim.

David Friedberg 6:19 Tim, see ya.

Chamath Palihapitiya 6:19 Thank you.

Jason Calacanis 6:20 Tim, see you later.

Chamath Palihapitiya 6:21 I appreciate it, guys.

Jason Calacanis 6:22 See you in a minute.

Chamath Palihapitiya 6:22 That was awesome.

David Sacks 6:22 That was unreal.

Chamath Palihapitiya 6:24 I can't believe they have live dealers standing in a warehouse in front of a webcam.

Jason Calacanis 6:28 I don't-

Chamath Palihapitiya 6:28 That, that is such a... Like, imagine walking into that facility.

David Sacks 6:32 (laughs)

Guest (additional, brief contributor) 6:32 You're surprised that that facility only has, what, dealers?

David Sacks 6:34 (laughs) That's, like, OnlyFans for gamblers.

Jason Calacanis 6:37 I think there's a lot of webcams there. (laughs)

David Sacks 6:38 Come on.

Guest (additional, brief contributor) 6:38 I think you can choose (overlapped)

Jason Calacanis 6:39 ... the door what you wanna do.

David Friedberg 6:41 Deal blackjack.

Jason Calacanis 6:42 Or, uh, yeah, or whatever else you wanna do. Whatever else you wanna be on a webcam for.

Chamath Palihapitiya 6:45 Yeah, what you're gonna be doing (overlapped)

David Sacks 6:46 The dealer's, probably making a porno in the next room.

Jason Calacanis 6:50 Above the table and below the table.

Chamath Palihapitiya 6:52 (laughs)

David Sacks 6:52 (laughs)

Guest (additional, brief contributor) 6:52 There's two different tapings occurring.

Chamath Palihapitiya 6:56 Oh, my God. (laughs)

David Sacks 6:58 The smell from that warehouse.

Chamath Palihapitiya 6:59 Oh, man.

Jason Calacanis 7:01 Oh, it's rough. It's rough, folks.

Chamath Palihapitiya 7:02 That was so awesome. So what happened? You DMed him? That was so good.

Jason Calacanis 7:05 Yeah, we re... He... You know what had... No, what happened was somebody emailed me and they're like, "Hey, that's my mate that you talked about."

Chamath Palihapitiya 7:10 Yeah.

Jason Calacanis 7:10 "He's a big fan of the show, it turns out."

Chamath Palihapitiya 7:12 Yeah.

Jason Calacanis 7:12 You know, this is the thing about influencers now. This is the thing about this micro-celebrity stuff. We all, we all know each other by default, right? So he was just slid into the-

Guest (additional, brief contributor) 7:23 Well, there's-

Jason Calacanis 7:23 ... DMs.

Guest (additional, brief contributor) 7:24 There's definitely a comradery.

David Sacks 7:26 That was great.

Guest (additional, brief contributor) 7:26 Yeah. That was awesome.

Chamath Palihapitiya 7:27 That's awesome. I'm so glad he won.

Jason Calacanis 7:28 And, uh, you know, he, he basically got smashed in his DMs. Like, 1,000 people DMed him, "Oh, you're on All-In." They're bugging out to you on All-In. And, uh, so yeah, I just said, "Hey, would you do a hand... Would you do your live hand with us?" And then I didn't, I didn't... I wanted to clear with you guys before I put our money on it or whatever, but I couldn't do that 'cause I wanted to surprise you.

Chamath Palihapitiya 7:46 Yeah, that's great.

Jason Calacanis 7:46 And here we are.

Chamath Palihapitiya 7:47 I did not think that was real when he popped up. I thought it was like a reporter thing.

Guest (additional, brief contributor) 7:51 I gotta be honest with you.

Chamath Palihapitiya 7:51 Yeah.

Guest (additional, brief contributor) 7:51 All I could think of was, "Do I look like an ass by saying more?"

Chamath Palihapitiya 7:55 (laughs)

Guest (additional, brief contributor) 7:55 So then I just stayed quiet.

Chamath Palihapitiya 7:57 (laughs) That's like (overlapped)

Guest (additional, brief contributor) 7:59 I thought we had more than 10K. I was like, well, you know, start with 50K, let's just see what happens.

David Sacks 8:03 I know. You ever feel like when you, like, tiptoe into the bet with, like, a small amount, but you're-

Guest (additional, brief contributor) 8:08 Small teaser bet.

David Sacks 8:08 ... you wanna do more, and then you win, and, and you feel like you actually lost money because-

Chamath Palihapitiya 8:12 Totally.

David Sacks 8:12 ... if you had made a bigger bet, you would have made more?

Guest (additional, brief contributor) 8:14 I feel like I lost 60K.

Jason Calacanis 8:17 (laughs)

David Sacks 8:18 (laughs)

Guest (additional, brief contributor) 8:19 I should've put (overlapped)

Jason Calacanis 8:19 This is true degeneracy. (laughs)

Guest (additional, brief contributor) 8:20 No, I would've, I would've put 50, I would've won 75. Instead, we put 10, we won 15. I lost 60.

David Sacks 8:27 We made a Jake House-sized bet.

Chamath Palihapitiya 8:29 (laughs)

Guest (additional, brief contributor) 8:29 (laughs)

Jason Calacanis 8:29 Yeah, yeah, it was a field event.

David Sacks 8:32 (laughs)

David Friedberg 8:33 Going all in. Let your winners ride.

Jason Calacanis 8:36 Rain Man, David Sacks.

David Friedberg 8:40 Going all in.

David Sacks 8:40 And I said we open source it to the fans and they've just gone crazy with it.

Chamath Palihapitiya 8:44 Love you, man. Nice.

David Friedberg 8:45 Queen of quinoa. Going all

David Friedberg 8:48 in.

Jason Calacanis 8:49 I don't know what's going on. Anything going on in your life? Anybody, uh, been busy having some adventure? Sax, seems like you were busy last week. Any- anything to report from your side of the world?

David Sacks 9:01 Well, should we take you, take you guys behind the scenes of, of a presidential fundraiser? I admit I've never done one before, so it was, uh, it was a new experience for me. When you host a president's, it's a whole different level of preparation.

Jason Calacanis 9:12 Oh, my gosh.

David Sacks 9:12 The Secret Service was out, like, a week before. The president has an amazing advance team. They work out every detail, they make a map of your house, they really have to think through everything.

Jason Calacanis 9:21 Yeah.

David Sacks 9:21 The police shut down the street. It's really a very involved process.

Chamath Palihapitiya 9:27 By the way, I went to dinner in the city that night. And, you know, I was right by your house. So I drove up the street, and they had everything blocked off on, like, three blocks on both streets, like, on both sides of your house.

David Sacks 9:40 Mm-hmm.

Chamath Palihapitiya 9:40 But there were all these protesters, like, all throughout San Francisco. Like, pro-Trump people had driven in from all over NorCal must have been 'cause these were not San Francisco natives.

Jason Calacanis 9:50 Supporters, supporters.

Guest (additional, brief contributor) 9:51 Yeah, yeah, yeah.

Chamath Palihapitiya 9:51 Supporters, yeah. And they came in with these, like, cars and the streets were blocked. It was a total zoo in the city. For hours before and after your... I actually stayed in the city that night, and I heard the people going nuts for hours afterwards. But it definitely, like, took over, it took over the city. It was crazy.

David Sacks 10:07 Yeah, so what's really interesting is that all week the San Francisco publications had been trying to gin up protesters by writing about that, you know, the president's coming to town and the protesters are gonna show up. And in fact, there was almost no anti-Trump protesters, and then a huge number of pro-Trump demonstrators came out, and they were waving flags and cheering along his motorcade as he was coming to the house. So, the whole protest thing backfired.

Chamath Palihapitiya 10:32 Why do you think anti-Trump protesters did not show up? What happened?

David Sacks 10:39 I think there's just a big enthusiasm gap. I mean, I think that the pro-Trump people are very enthusiastic, and the, let's call pro-Biden or anti-Trump people are just not very motivated right now.

Jason Calacanis 10:50 So it's exhausting to be against Trump for eight years. Like, this has been exhausting.

Chamath Palihapitiya 10:54 People are wiped out.

Jason Calacanis 10:55 I think they've exhausted folks.

Chamath Palihapitiya 10:57 Uh-huh.

David Sacks 10:58 So anyway, so Owen, Owen McCabe-

Jason Calacanis 11:00 It's a losing proposition.

David Sacks 11:00 ... who's the founder of Intercom, he was there, and I, I think this was actually a, a good summary because he said that he spoke with a bunch of people and none of them identify as Republican, all voted or d- donated Democrat in the past. That's true for me too. Now they're backing this guy for his policies on war, immigration, crypto, and more. This election's a referendum on those issues. So Owen, you know, came out, appreciate his support. But it's true, the campaign told us that they had more first-time donors at this event than they've seen before, and that's because a lot of these people hadn't supported Republicans or hadn't supported Trump, and they came out. So we have a few photos and videos here to take you behind the scenes-

Jason Calacanis 11:38 Oh, here we go, behind the scenes.

David Sacks 11:38 ... I think might be interesting for people. So the first thing to say is that President Trump is extremely charming. He connects with people in, like, five seconds. I mean, he meets you and f- and finds something interesting and, or funny to say, and he's hilarious. I mean, when he spoke in the, the living room, and he talked extemporaneously for an hour, he's speaking off the cuff, every speech he gives is different. This is him coming into-... the living room. He had made a- just a few notes about topics he wanted to talk about on a piece of paper, but that was it. It was all completely extemporaneous. No teleprompter, obviously. And he's hilarious. I mean, people don't realize how entertaining he is. And-

Jason Calacanis 12:21 What did- what did- what were some of the greatest hits? What did he hit on? Did he hit on low pressure from showers? Did he- what did he-

David Sacks 12:28 (laughs)

Jason Calacanis 12:28 ... what did- because I know he's got, like, some things he hits on that are relatable. Was it all, like, specific crypto topics, tech topics, or did he go off and-

David Sacks 12:36 Well, he did, you know, he did talk crypto. And it was really interesting. At one point in his speech, he called on the Winklevoss brothers who were there. And I'm only mentioning this because it was already reported that they were there, so I don't wanna speak out of school. But he said to them, he says, "I know you guys created Facebook." You know? (laughs) He was giving them credit for creating Facebook. And then he said-

Jason Calacanis 12:58 I know he- he actually created it.

David Sacks 12:59 Yeah. But he said, "But- but it's okay. I mean, you guys look like models. You were dealt a lot of cards, you know, a lot of cards."

David Friedberg 13:05 (laughs)

David Sacks 13:05 You know? (laughs)

Jason Calacanis 13:07 I mean, they're very good-looking.

David Sacks 13:08 Yeah.

Jason Calacanis 13:08 Huge IQ and-

David Friedberg 13:10 (laughs)

Jason Calacanis 13:10 ... I mean, look at him. Great hair.

David Sacks 13:11 Yeah. And so I thought, "Okay, wow, like, he must know the Winklevoss brothers. He must have met them previously." And I found out this is the first time that he had ever met them. So think about the awareness that he has to know that they're in the audience, to see them, point them out, and then have this kind of hilarious routine with them. So he's someone who's very sharp, very on the ball, very funny, and then his energy level is incredible. So he had started his day at Mar-a-Lago at 3:30 AM Pacific Time, 6:30 AM his time. Then he flew to Arizona, did a Trump rally in Arizona. Then he flew to San Francisco for our event. He spent four hours at our event. He could have left an hour earlier if he wanted to. Then he flew to LA for more events the next day there. So think about his day. And his energy level was just-

Jason Calacanis 14:00 Mm-hmm.

David Sacks 14:00 ... amazing the whole time.

Jason Calacanis 14:01 Chamath, your thoughts before this goes on for an hour? (laughs)

David Friedberg 14:05 Yeah. I'll give you two observations. The first is that I think that there is a huge gap between how the media tries to portray Donald Trump and what he's like when you meet him in person. And that gap is really wide. And so, I would say specifically to Democrats and Independents, you really do need to sit in the room and feel what it's like. He- David- David is right. He is charismatic. He's intellectually sharp. And he's funny. And when you put that together, he can engage an audience for a long time and be totally extemporaneous. The other thing I would say that- is that he is very polite and he's kind in a way that was disarming and was not what I expected. And so, I felt that I had misjudged him many years in the past. And so I was very glad that I had an opportunity to sit beside him and to actually interact with him one-on-one. It was really, really engaging. And so that's- that's more about the style. And then about the substance, what I would say is, it was not just a pro-America agenda, but it was- it's very clear that he was pro-innovation. So he was really supportive of AI in the details that he talked about. He was very supportive of crypto in those details, and he's very much low regulation, low taxation. And so when you put that together, it does stand very much in contrast with what the alternative is. Um, and so I think that, um, both of those things are a reason why even if you aren't willing to vote for him, I would encourage everybody to experience what it's like to hear him.

Jason Calacanis 16:09 Freeburg, your thoughts on, uh, all this?

David Friedberg 16:11 I didn't go to this. I didn't go to any of that. I don't know.

Jason Calacanis 16:13 No, I know.

David Friedberg 16:13 It sounds-

Jason Calacanis 16:14 Just big picture.

David Friedberg 16:14 I wonder, I wonder why Chamath didn't-

Jason Calacanis 16:15 Our back is hosting this.

David Friedberg 16:16 I want to know why- why Chamath didn't wear a tie. Everyone else is wearing a tie.

Jason Calacanis 16:20 (laughs)

David Friedberg 16:20 You didn't want the tie?

David Sacks 16:21 Chamath doesn't need a tie. He's a baller.

David Friedberg 16:23 (laughs)

Jason Calacanis 16:24 All right. So-

David Sacks 16:24 Do you want me to say what- what Trump said to you when he met Natalie?

David Friedberg 16:28 So it's us talking and he says, "You guys are a really beautiful couple."

Jason Calacanis 16:32 Uh-oh. Mm-mm-mm.

David Friedberg 16:33 And- and I said, "Well, thank you." And then he turns to me and he goes, "Well, you must be really rich." (laughs) He says this thing. (laughs)

David Sacks 16:43 (laughs)

Jason Calacanis 16:43 (laughs)

David Friedberg 16:43 And I started laughing out loud. Nat thought he was hilarious. So it was because-

Jason Calacanis 16:47 Oh, because of the disparity in the looks between you and Nat-

David Sacks 16:50 Exactly.

Jason Calacanis 16:50 ... is what he's sort of implying.

David Friedberg 16:52 You guys sat next to him at dinner?

David Sacks 16:53 Yeah.

David Friedberg 16:53 Yeah. And was that like an hour just private conversation between the three of you?

David Sacks 16:58 This is the other thing that he does. He actually sits there and he says, "You know, folks, I'm happy to continue to talk about whatever you want me to. You feel free to ask me questions or feel free to just go around the room and just tell me what you think." And what would happen is people would say different things and then he would start asking questions of other people. And the thing becomes almost like this roundtable discussion of topics from... We talked about Iran, we talked about foreign policy, we talked about-

Jason Calacanis 17:23 Deficit and debt. - That's -

David Sacks 17:24 ... crypto regulation, everything.

David Friedberg 17:26 What did he say about- what did he say about deficit?

David Sacks 17:27 He listened extremely well.

David Friedberg 17:28 What did he say about deficit and debt? Well, he- he- he's-

Jason Calacanis 17:32 YOLO.

David Friedberg 17:32 ... very much- he- he's very much on your side of, we have to really figure out how to get spending in order and get the deficit under control.

Jason Calacanis 17:41 Well, congrats on a sounds like a successful event for you guys.

David Friedberg 17:44 Congrats, yeah.

Jason Calacanis 17:44 It sounds like you guys are in the halls of power now. And Trump has flipped his positions on EVs, abortion, taking away a woman's right to choose. He's flipped his position on TikTok and flipped his position on crypto. I give him a ton of credit. Four flips in a month and he just sweeps all those votes. It's pretty smart. Um, and for the Democrats who are listening-

David Friedberg 18:07 He's also pro-AI.

Jason Calacanis 18:07 ... you're losers and you're not listening to people. So you're going to lose the election and he's- Biden's gonna get demolished.... nobody wants to vote for somebody who they think is in cognitive decline.

David Friedberg 18:17 That's your bet right now, Jacob?

Jason Calacanis 18:18 What's that?

David Friedberg 18:18 Jacob, you think Bi- Biden is getting demolished, right? That's your thought?

Jason Calacanis 18:21 I mean-

David Friedberg 18:21 That's your bet?

Jason Calacanis 18:21 Did you see the video that came out this week where he was at some event and he looks-

David Friedberg 18:25 Yeah.

Jason Calacanis 18:25 It looked like a-

David Friedberg 18:26 He couldn't move. Yeah. It was awful.

Jason Calacanis 18:26 ... Mitch McConnell moment, right?

David Friedberg 18:28 Yeah.

Jason Calacanis 18:28 Where he was kind of frozen.

David Friedberg 18:29 He was, like, stuck.

Jason Calacanis 18:30 And so, I don't want to make it like elder abuse, and I know, like people have-

David Friedberg 18:34 It's not, it's not elder abuse to, to sit- to say, w- to, to be honest about what you're observing, especially when it comes to-

Jason Calacanis 18:40 Uh, no, no. I'm just saying, harping on it.

David Friedberg 18:42 ... the most powerful role in America.

Jason Calacanis 18:43 Yeah. He's gotta, he's gotta bow out.

David Friedberg 18:45 FiveThirtyEight just put out their election forecast showing 51% chance of Biden winning, 48% chance-

Jason Calacanis 18:53 Oh.

David Friedberg 18:53 ... of Trump winning, as of two minutes ago.

Jason Calacanis 18:56 Yeah. Who knows? I think it's all gonna be determined by the debates.

David Friedberg 18:58 But still a risk.

Jason Calacanis 18:59 Sachs, you were gonna say?

David Sacks 19:00 Well, I just think, what other job in America could Biden even be qualified for? Like, what, what would you hire him to do? Is there any, is there any, uh-

Jason Calacanis 19:08 I mean, he, he shouldn't be working.

David Sacks 19:09 ... mental job you would hire him to do? Is there any physical job you would hire him to do?

Jason Calacanis 19:12 No.

David Sacks 19:12 Would you hire him to be your babysitter? I mean, I don't think there's-

Jason Calacanis 19:15 No.

David Sacks 19:15 ... any job in America they- a- anybody would hire him to do, except for maybe-

Jason Calacanis 19:19 It's crazy.

David Sacks 19:19 ... president. It's kinda, kinda crazy.

Jason Calacanis 19:21 And this is where, like, the Democratic Party is in shambles.

David Sacks 19:24 We should have the highest standards for the mental acuity, sharpness, and energy level of our president.

Jason Calacanis 19:31 Yeah.

David Sacks 19:31 It's the most demanding job in the world.

Jason Calacanis 19:32 We need a cognitive test. But the Democrats need to just look deeply in the mirror and say, "Hey, you're fielding a candidate that nobody is going to vote for." That's the problem here, and it- there's not enough anti-Trump sentiment, and Trump's a genius at flipping his position to, to get huge swaths of voters. And so you're gonna get demolished if you don't hot swap him. I guarantee you hot swap is coming. I predicted the Trump/EB flip-

David Friedberg 19:55 I don't think so. I think-

Jason Calacanis 19:55 ... and I predict it now.

David Friedberg 19:57 I think, I think you are right about maybe some of the issues where folks will get much more precise on these issues. But I, I actually think what's happening is that this is really going to be about Trump versus Kamala Harris. I don't think Biden is gonna step down at all, but I do think there's a chance, a non-trivial chance, that Biden wins. And if he does, I don't think he's gonna make it four years. And so then the real question is, do folks want Kamala, and have they had a chance to really figure out whether they wanna vote for her or not? I think that's really where it's gonna come down to. It's, it's really Trump versus Kamala Harris.

Jason Calacanis 20:33 And if you, if you frame it as that, Chamath, then it's even a bigger trouncing, right? Like, if you put Biden ... if you put Kamala against Trump (laughs) , then what would the ... it would be a- even bigger shellacking, yeah? In your mind?

David Friedberg 20:48 I just think that, without saying anything bad about Kamala, because I don't know much about her, is really what I would say, is I don't know much about her. And so you can't have somebody who gets into that role accidentally. I think there ... we have to give both President Trump and President Biden a lot of credit, which is, they stood in the eye of the hurricane and withstood all the pressure and won. And he who wins that way deserves to be the President of the United States. She hasn't withstood that. And so I think that it's pretty unfair for a lot of voters if there is a bait and switch. And so I think that you have to look at both of these two candidates and assign a reasonable probability that both of them make it to the finish line. And from a- at least what I saw up close, I think it's a much higher probability that Donald Trump does than President Biden does.

Jason Calacanis 21:50 Yeah. And, uh, listen, Biden hasn't made it to the finish line of his first term. It's obvious to everybody he's in cognitive decline. You put up a candidate who's in cognitive decline, you're going to lose. Even against, you know, Trump, who people really don't like. These are the two most unpopular candidates of our lifetime. So-

David Sacks 22:05 I'm not sure about that. I don't think it's true that people don't like Trump. I think that there are-

Jason Calacanis 22:09 Oh, well, there's ... he's got a core, but yeah, no. People, the Republicans, including ... hold on-

David Sacks 22:12 Well, I don't think it's just a core. You see Jake Paul.

Jason Calacanis 22:13 The Republicans, including yourself, were looking for a different candidate just months ago. You said Trump was not your preferred candidate and you were all in on DeSantis. So let's not pretend like he was your preferred candidate. He's the remaining candidate. So you're ...

David Friedberg 22:26 Yeah, but I think-

Jason Calacanis 22:26 You've flipped your position.

David Sacks 22:26 ... I think it's wrong to say that there's not enthusiasm and love for Trump. We saw it on the streets. We saw it in that room.

Jason Calacanis 22:32 There's some, yeah.

David Sacks 22:33 Do you see Logan Paul meeting with Trump four years ago?

Jason Calacanis 22:35 Yes.

David Sacks 22:35 He was for Biden, now he's for Trump. Have you ever seen Trump walk into a UFC event? They go nuts for him.

Jason Calacanis 22:41 Yeah, it's all young guys.

David Sacks 22:42 I'm just saying there's a lot of-

Jason Calacanis 22:43 Yeah.

David Sacks 22:43 There's a lot of enthusiasm and a lot of lum- love out there for Trump, a lot of excitement. I don't see any of that for Biden.

Jason Calacanis 22:48 No, I mean-

David Sacks 22:49 There are people who don't like Trump and that drives some support for Biden. But if you look at enthusiasm and excitement, it's all on the Trump side.

Jason Calacanis 22:57 In this we are in total agreement. Yes. There is no enthusiasm (laughs) to put somebody in cognitive decline in the White House. All right, listen, we gotta get to the docket. We could talk for hours about Biden, Biden, Biden, Trump, Trump, Trump, and we will. It's gonna be a continuing topic, but let's get to a very full docket here.

Jason Calacanis 23:16 Breaking news last night, Tesla shareholders have backed their guy. Yes, there was, uh, two important votes, measures that Tesla just had taken with their shareholders. The first was approving Elon's pay package, the $56 billion pay package that was voided by a Delaware judge. We talked about that on episode 164 back in February. And then, moving Tesla's incorporation from Delaware to Texas. This is also major. Remember we talked last week about the Texas Stock Exchange? Here's the two charts. Massive overwhelming support. There were some notable people who dissented. I think Norway's sovereign wealth fund and CalPERS were two of the ones who were voting against it. Tesla share price popped 6% on the news. You don't want to lose Elon at Tesla. That would be really bad. So your thoughts, Chamath, on this vote, and maybe the move and what that represents?

David Friedberg 24:17 It's...... kind of odd that we're in this crazy place.

Jason Calacanis 24:22 Say more.

David Friedberg 24:23 When that original package was unveiled, there was a lot of people, including me, who thought, "There's no way he's gonna hit this. It's just way too aggressive and it requires so many things to go right." And so I think in part that's why three-quarters of the Tesla shareholders approved it then. 73% is not squeaking over the line, it's not 50% plus a vote. It's, it's a supermajority.

Jason Calacanis 24:57 And that excluded Kimbal and Elon shares.

David Friedberg 24:59 Exactly.

Jason Calacanis 25:00 So...

David Friedberg 25:00 And then I think you had this very dangerous form of judicial activism, which essentially ignored the will of the shareholders and tried to create some administrative ruling that threw up this big question mark. So then in, in typical Elon style, he's like, "Great. We're just gonna get them to vote it again." And then yet again, it passes and it looks like it's gonna pass by around 73%. But the problem now is that it's still not clear what happens. I think that there's still some question marks where this may not nullify the judge's decision. It may actually create more question marks. So hopefully this gets sorted out. He should get the stock. He never should have... Or these options, he never should have had them taken away. And so I just hope this thing...

Jason Calacanis 25:52 Yeah.

David Friedberg 25:53 ... it becomes a nothing burger.

Jason Calacanis 25:55 Sacks, you have thoughts on this outcome? Is it surprising to you? Not surprising? And then I... I think the jurisdiction thing is bigger than maybe people are thinking, because Delaware has been the standard for incorporating companies, but Elon is putting his companies in Nevada and Texas. We saw the stock exchange, uh, last week going back to move to Texas. This does seem like there's something about jurisdiction in the water. What are your thoughts, Sacks?

David Sacks 26:24 Well, I think it's ironic that the winning margin, 73%, is the same margin by which shareholders approved his comp package back in 2018. So again, they got 73% voted for this 2018. Now, they voted to reapprove it by the same margin. And the reason why they had to do it is because this activist judge in Delaware voided it on the grounds that somehow the original shareholder vote wasn't valid. And I think this is interesting that the margin didn't change, because it shows that shareholders aren't ingrates. Elon delivered what he promised, and now shareholders are upholding their end of the bargain. And certainly, they didn't have to take that position. There were different groups, like CalSTRS, who basically took the position, "What have you done for me lately?" You know? "Yeah, you delivered, but we don't have to pay you because of the judge, so we're not gonna pay you." And I think shareholders wisely approved the package, because I think there was some chance that if they were negged, that Elon could leave the company, and I still think he's absolutely vital to all the innovation that's gonna come in the future from Tesla. And you see this, the stock is ripping on the news. It's up about 3% today in a down market. So clearly, the market thinks that securing Elon's future at the company was the right decision and shareholders did the right thing.

Jason Calacanis 27:43 Yeah.

David Sacks 27:44 And t- in terms of the, the downstream effect on this, like you said, it raises the specter of Delaware being an activist state. That's not why anyone incorporates in Delaware. The reason why you incorporate in Delaware is because you think it makes you subject to an extremely predictable body of corporate law...

Jason Calacanis 28:04 Correct.

David Sacks 28:04 ... that's been tested and become bulletproof...

Jason Calacanis 28:06 Correct.

David Sacks 28:06 ... over many, many decades. And now all of a sudden, you have to worry that maybe a judge will set aside a shareholder vote for reasons that seem incredibly specious, es- especially in light of the fact that the shareholders just reapproved it.

Jason Calacanis 28:22 Hm.

David Sacks 28:22 So obviously, the shareholders did- didn't think they needed your protection, and they voted to reverse you. And moreover, Tesla could still be subject to paying the legal fees of these trial lawyers who've asked for literally billions of dollars in legal fees that the judge still has to rule on. So imagine this, imagine that the shareholder vote gets set aside by the judge. It then gets reapproved by shareholders, but the trial lawyers who brought this nuisance suit can now get billions of dollars. If that happens, I mean, Delaware can kind of kiss its status as the premier corporate law state away.

Jason Calacanis 28:59 Friedberg, is this a John Galt moment? Is this where capitalism, socialism and the state collide, and people now start thinking, "Hmm, maybe we need to create a new jurisdiction, a new framework?"

Chamath Palihapitiya 29:15 That's a good question. I think it's a good example for capitalism, and I think it should shine a light on how other CEOs are getting compensated at public companies, where there's typically a multimillion dollar or multi-decamillion dollar pay package that has no dependency on the performance of the business. You can make tens of millions of dollars a year and not drive shareholder value. And I think that the way that this deal was structured, where Elon effectively got 10% of the company for 10Xing the stock should be an example that other boards should actively consider when considering both candidates and their appetite for this sort of a package and their compensation packages themselves. The way executive comp typically works at the board level at public companies is you hire these comp consultants, and the comp consultants come in and they use comparables, which basically means, "Let's do what everyone else does." And so you have this self-reinforcing system of compensation and benefits for CEOs that bumps up a little bit every year.... that ultimately has not, has some degree of ownership in the stock, but fundamentally has very little downside. And Elon had no guarantees in his pay package when he got this comp package originally in 2018, and he got 10% of the company if he 10Xed the stock, which is what he did. I really think that it is worth having this become the kind of beacon for all boards to consider, and it seems like shareholders in aggregate are applauding the concept. And look, Elon is a special guy and he gets special treatment, but I think that it moves the needle and should move the needle a little bit for other CEOs and other boards to stand up and say, "We should think about something that looks a lot more like this than what we typically do." And I think you would find a very different cast of people showing up to become CEOs and to drive performance out of these businesses, and a lot more risky and aggressive behavior than what I think you would typically see in big companies that are in maintenance mode.

David Friedberg 31:18 What do you guys think of the organizations that initially voted yes and now voted no?

Chamath Palihapitiya 31:25 They basically are saying, look, I mean if you think about it, you're a big public company. I, I don't know what ISS recommended, this is Institutional Shareholder Services. They, they-

David Friedberg 31:32 They recommended no both times.

Chamath Palihapitiya 31:34 Right. And so ISS basically is what a lot of big public fund managers will follow when they make their votes, and so if I'm a shareholder-

David Friedberg 31:43 That's not what I'm, that's not what I'm asking.

Chamath Palihapitiya 31:43 No, no. I, I know what I'm saying.

David Friedberg 31:44 What I'm saying-

Chamath Palihapitiya 31:44 But like let's say, let's say that I'm BlackRock or I'm a sharehol- I'm big, I'm not gonna put BlackRock as some big shareholder of Tesla stock. Why would I vote to give away 10% of the company when I don't have to?

Jason Calacanis 31:55 Yeah. Very simple. Because-

Chamath Palihapitiya 31:57 'Cause he would leave.

Jason Calacanis 31:57 Uh-

Chamath Palihapitiya 31:58 He would leave.

Jason Calacanis 31:58 Morals and ethics matter, and you want to do the right thing and you wanna incentivize capitalism to operate properly and wanna incentivize the people who take on the burden of running these companies. And the people who voted against it, I think people should just make a list of those individuals, Chamath-

David Friedberg 32:16 I totally agree with you.

Jason Calacanis 32:16 And they should not do business with them.

David Friedberg 32:17 Business with them.

Jason Calacanis 32:18 Because if somebody is going to double-cross you-

David Friedberg 32:21 Completely agree.

Jason Calacanis 32:21 They've shown you who they are. These are people-

David Friedberg 32:22 I completely agree.

Jason Calacanis 32:23 ... who double-cross them. They got the benefit and then they stabbed them-

David Friedberg 32:25 Yeah.

Jason Calacanis 32:25 ... in the back. Make a list-

David Friedberg 32:27 That's exactly what they did. That's exactly what they did.

David Sacks 32:29 It's worse if they voted yes the first time and then they voted no.

David Friedberg 32:33 No, I'm saying and the, and there is a quantifiable group-

David Sacks 32:35 Because if there were no, no, then maybe you're just against the deal. But if you're yes, no, then that's a, a, a renege.

Jason Calacanis 32:40 Then you're a true scumbag.

David Friedberg 32:41 You're a scumbag.

Chamath Palihapitiya 32:43 Is that public anywhere, who did that?

David Friedberg 32:44 Yeah. There are a bunch of folks that said that they, you know, I think it was CalPERS that voted yes and then when they were on-

Chamath Palihapitiya 32:49 Yeah.

David Friedberg 32:49 ... trying to explain, they were like tap da- dancing in like corpo jargon, but really what they are scumbags. Jason, you're right. They are morally and ethically void and it, they're reneging. And this-

Chamath Palihapitiya 33:00 Yes.

David Friedberg 33:00 ... is the one rule in business you're not allowed to do. And the people that do that are these penny-pinching scumbags.

Jason Calacanis 33:06 I'm not saying a blacklist, but I would say making a list of people who maybe you want to consider not doing business with is how I would frame it. These are people who-

David Sacks 33:14 Yeah. But they're public, they're public market investors. They're not private investors. They buy the stock on the open market so they don't have to worry.

Chamath Palihapitiya 33:19 I mean, I think the question is what are the chances that Elon leaves the company if he doe- didn't get the pay package? The chances are probably-

David Sacks 33:25 I think that was a risk and I think that-

Chamath Palihapitiya 33:26 That was a nonzero possibility.

David Sacks 33:27 ... made people think, think about it.

David Friedberg 33:28 Yeah. Nonzero possibility.

Chamath Palihapitiya 33:30 Yeah.

David Friedberg 33:30 You made an agreement with somebody and you shook their hand.

Chamath Palihapitiya 33:34 Yeah.

David Friedberg 33:34 What, what, why does it care-

Chamath Palihapitiya 33:35 Exactly.

David Friedberg 33:35 ... whether he would have lea- left or not left? This is like-

Jason Calacanis 33:37 You have to do the right thing. Yeah.

David Friedberg 33:39 You have to do the right thing. You promised the guy X amount of money for doing Y amount of things. He did the Y things and then you had a judge come over the top because of somebody who owned 10 shares.

Chamath Palihapitiya 33:50 Right.

David Friedberg 33:50 And all I'm saying is if you, if you don't have the intellectual intelligence to look past that and say, "Wait a minute, we just paid the guy to do this work and now we're gonna renege?"

Jason Calacanis 33:59 They're gaming the system.

David Friedberg 34:00 I just think that like how can anyone who is capable of doing a job sign up for a pay package? How could anyone? And the people that will sign up are these like middling corpo people who will accomplish nothing and will run these companies in ways that then speaks to organizations that have just proven themselves to be totally unreliable.

Chamath Palihapitiya 34:24 The irony of the thing is that these folks thought that they were getting a 10% free roll when they voted no, and the reality is that by him getting the pay package, the certainty of him sticking around at the company caused the stock to go up by 10%.

David Friedberg 34:39 Right.

Chamath Palihapitiya 34:39 So they actually had the calculus wrong that if they had gotten their way, the stock would have declined by more than the 10% free roll they thought they were getting.

Jason Calacanis 34:47 This is I think the, the main point here.

Chamath Palihapitiya 34:48 And 10% being the ownership-

Jason Calacanis 34:49 Free market.

Chamath Palihapitiya 34:49 ... of the company that he gets. Yeah.

Jason Calacanis 34:51 The pay package was laughed at on CNBC, by all the experts. There is no way for him to hit this stuff. If he does hit it, he's getting a fraction of the value of it. And this is why stock is such a valuable device. If employees get stock and the CEO gets stock and everybody in between and retail investors get it and endowments get it and your retirement account gets it, everybody rose in the right direction. Is it perfect? No. People can buy back their stock. They can do a little gaming on the margins, but it is the most pure system we have. Everybody has a share of the company. So if you're a socialist, you know, like you should actually kind of appreciate how stock works, that everybody has a chance to buy it, everybody has a chance to participate. This is the model we should be using for all CEOs. They should all get a massive package if the stock goes up into the right. It's so obvious, and this was so unfair. Let, let's see this flipper. I wanna see their explanation.

Donald Trump (clip from fundraiser / interview) 35:47 Uh, compensation is commensurate with the performance of the company. Did you vote for it in 2018? I believe we did vote for it in 2018. Okay. Do- But this is about long-term value creation. But hold on, hold on. Okay. But do you believe you were duped in 2018? No. I believe we used the information we had available and made the best choice. Okay. So here's what I find so interesting about this particular choice. Mm-hmm. 73%, I believe, of the shareholders voted in favor of it in 2018. A judge has said that- Mm-hmm. ... shareholders were not informed properly. Right. If you talk to most shareholders, by the way, especially big shareholders, they say, "We were not dup- we were c- we understood completely what we were doing and we were on board with this." Mm-hmm. Now that this opportun- almost opportunity has arrived on your doorstep, uh, to say, to actually rethink this- Mm-hmm. ... if you will-There's a view that, "Oh, maybe, maybe we're not getting the value, uh, we th- we thought we should." Mm-hmm. You thought you should get it, uh, but he's worked, by the way, under the assumption that he was hitting the numbers- Right. ... and, and dealing with the contract. Mm-hmm. If I told you that you were being paid a certain amount of money in 2018, and then I called you and said, "Actually, you know what? We're not going to give you that money anymore," what would you do? (laughs) That's a great question. Um, I would, um, I would go to my board. You know, I would talk with my board.

David Friedberg 37:05 (laughs) .

David Sacks 37:06 Corporate jargon.

Jason Calacanis 37:06 This woman is so smug. What is her name? Karen Frost?

David Friedberg 37:09 I don't think she's smug.

Jason Calacanis 37:11 Sorry, Marshy Frost. I'm sorry, I thought it was Karen Frost.

David Friedberg 37:14 I think, like, this is emblematic of the kind of person who is incapable of actually doing the right thing, and there's a lot of these people that run a lot of these organizations. That... I mean, what, what kind of an answer is that?

Jason Calacanis 37:27 I mean, it was a non-answer, and that's why I said it was smug.

David Friedberg 37:30 Let me just ask each of you, you've all started companies, some of you are still running companies, would you take money from her and CalPERS after that statement?

Jason Calacanis 37:39 Hard no for me, yeah.

David Sacks 37:40 But remember, she's not investing in private companies. She's buying stock on the open market, so-

David Friedberg 37:44 No, no, no. CalPERS announced that they are-

Jason Calacanis 37:46 CalPERS, that's venture firms. Yeah.

David Friedberg 37:47 Yeah. CalPERS announced that they're an LP and they're starting to do directs.

David Sacks 37:51 Oh, okay. I didn't know that.

Jason Calacanis 37:52 Yeah, they're trying to catch up. They've been behind on venture.

David Sacks 37:55 Let's call this whole thing what it is. It was a heist. You had these trial lawyers, they find a name plaintiff who's got nine shares, and on a contingency fee basis, they go after Elon's pay package. What are they looking for? $5.6 billion.

Jason Calacanis 38:13 How does a lawyer make $5 billion? How is that possible?

David Sacks 38:15 That's what motivated this whole thing. They don't care about Tesla, they don't care about the company, they don't care about shareholders, they're looking for a giant multi-billion dollar contingency fee payment, and they took their shot, and they found a Delaware judge to basically agree with them, even though shareholders approved it, and then shareholders reapproved it. So my question is, how much are these trial lawyers gonna get? Is a judge gonna award them billions of dollars for what was clearly now a mistake to void a pay package that shareholders wanted to stick with? If they award these lawyers billions of dollars, which is what they're seeking, no one's gonna wanna do business in Delaware anymore, because it subjects you to these stick up heists by trial lawyers. So, I think that's gonna be the next big shoe to drop, is what do these trial lawyers get awarded-

David Friedberg 39:06 Well, well, what are they gonna get paid?

David Sacks 39:07 ... by this Delaware judge?

David Friedberg 39:07 'Cause they also wanted to get paid in Tesla shares.

David Sacks 39:09 (laughs)

David Friedberg 39:10 No, I'm serious.

Jason Calacanis 39:11 Here's an idea, buy the shares yourself.

David Sacks 39:14 Yeah, they said, "We don't like your management of the company, but, uh, we want you-"

Jason Calacanis 39:16 We'll take shares."

David Sacks 39:17 "... to give you your shares." Yeah.

Jason Calacanis 39:18 (laughs) yeah. By the way, they got their shares, and then they voted to give Elon the next pay package. So, it's just a full on grift. They, they secured-

David Sacks 39:26 It's a grift.

Jason Calacanis 39:26 ... the bag.

David Sacks 39:27 But Delaware is supposed to protect corporations against this grift. That's why people incorporate there.

Jason Calacanis 39:31 When people ask, "Why does Delaware have this special place that everybody decided Delaware would b- be where we incorporate?" It was because it was predictable. Lawyers felt this was the most predictable jurisdiction that would be the most shareholder friendly, most shareholder thoughtful, whatever word you want to use. They would defend the, the, the shareholders, and here we are.

David Friedberg 39:52 The last company I started, 80/90, we incorporated in Nevada, and I just re-domiciled a couple of other companies that I own into Nevada as well.

Jason Calacanis 40:03 It's becoming a trend. We're having very big discussions about this in the startup community of where to domicile your company, and more to come on this one. Okay, let's keep

Jason Calacanis 40:12 moving. Apple had a huge announcement this week. Apple has entered the chat. They announced Apple Intelligence. Get it? AI? And they have included a ChatGPT integration from OpenAI. This was really, I think, impressive in many ways, because people thought Apple was far behind. It was a banger of a demo. A lot of un-Apple-like, future-looking demos. So none of these demos that we're gonna show are coming to your phone this week. They were really, I think, playing catch up with Microsoft, and it worked. Stock is up 10%. Uh, they added about 300 billion in market cap. Now the top three market cap companies are all driven specifically by the perception that AI is going to be the next technological wave. Microsoft, Apple, and NVIDIA all cruising around about $3.2 trillion, and th- this top three keeps, uh, flipping back and forth. Apple had passed Microsoft in market cap. Here's the features. I'll just give you a quick overview of what we're seeing. It's added, uh, Grammarly-like features. Great product, Grammarly. I'm not an investor. But they added the ability to proof, get grammar help. AI will transcribe and summarize phone calls with permission. Obviously, double opt in. It will prioritize notifications in iMessage and email that are super important. You can do smart replies. Uh, a company where an investor in Superhuman already does this kind of stuff. And they're bringing AI to Siri, and this is gonna be the big win, in my mind. You're gonna be able to say things like you wanna order something in DoorDash or Uber Eats or Instacart, and it... the AI Siri will be able to dip down into apps. They're building a whole app AI interface, much like the Rabbit device CEO talked about doing. And, uh, I think this means that Apple is gonna win the AI consumer. There is a deal with ChatGPT that I'll get your feedback on, gentlemen, in a moment. According to sources, Apple is not paying OpenAI. It's a non-exclusive deal. ChatGPT can be swapped out. Apple is also talking to Google about a similar deal. Obviously, it doesn't take a genius to predict that Apple is going to auction off the LLM integration, I think, to the highest bidder. They did that with the search deal. Google pays Apple 20 billion to be the default search engine. That's about 5% of Apple's annual revenue, if you didn't know, and it's all profit, right? So, this is a huge, uh, profit moment. I'm gonna pause there for a second before I get into more of this, uh, and just get your general reaction, Chamath.

David Friedberg 42:44 I think you nailed it right at the beginning. The thing that I was struck by the most in this is, we went from a phase where, in the Steve Jobs era, these events were because you're about to unveil a product that was done and shipping as of that day. And then at some point, we transitioned to they're talking about products that they intend to release within a year. Now, we've shifted to the part where they're talking about software integrations from a third party that will happen in a year. So if you just look at it sequentially-

Jason Calacanis 43:24 Mm-hmm.

David Friedberg 43:24 ... it's a little disappointing in that sense because for a company this big, it's really not much of anything. You can't really touch it and feel it, and it's gonna take a year before we really know what the totality of all of this is. Meanwhile, the economics of the ChatGPT deal were leaked, and there's no money on either side. So, I don't know, it's a little bit of like, it's really not much of anything, to be honest, because there's nothing we can actually play with and experience.

Jason Calacanis 43:59 Freeberg, your thoughts on the vision here, at least. And to Chamath's point, Apple used to release dope stuff, fully baked, ready to go, and now we are increasingly see them talking about what's coming next year or at some point. Do you think Apple's gonna win the consumer or do you think Apple's falling behind? Should they have built their own LLM by this point?

Chamath Palihapitiya 44:20 I'm not sure. I think what they have shown is more of a glimpse into the future of hardware, where for the last two decades or so, hardware has mostly been a portal to access the internet and use the internet through apps or through the browser, and hardware's done a good job of enabling that. But I think we're now gonna see a much more tighter coupling, where the hardware becomes more valuable and it's less of this kind of funnel for apps to flow through and data to flow through, but the hardware actually becomes the value creator, and you see a much more tighter integration in the hardware OS and the AI or the software that enables you to do lots of things. You're no longer just gonna use the hardware to access an app to do something. So a lot of the companies that are app developers are likely gonna end up becoming services developers that enable that hardware AI to do something for you. And this coupling between hardware and software, because of the way AI works, is I think becoming more apparent, not just in consumer devices, but we see it in the data center and in the enterprise stack as well. You know, we've seen that, obviously, there's this tight integration between the chip and the software stack that Grok built. There's a tight integration between Google's TPU stack and then the ML instances and the so- and the tools that you can use in Google Cloud that are optimized for use on that TPU hardware. Nvidia's got a big effort, obviously, in continuing to build out their software stack that sits on top of their hardware and works in a more coupled way. And then Google has this ability to kind of realize, I think, a similar outcome with Pixel phones, which is a pretty sizable opportunity for them. And then all of the hardware manufacturers can probably grab more value now as they build their own AI into their OS, and you start to see more of this value realized by the hardware companies. So I think that there's this really interesting shift, where we've all thought about hardware as being this, like, commodity, where there's some degree of, like, improvement or innovation made over time, but now it seems like a lot of value might actually get captured by hardware companies in all points in the value stack. So it's, it's an interesting moment, and I think that this just shines a light on that trend that I think is gonna play out over the next couple of years.

Jason Calacanis 46:27 It's clear, Sacks, that right now, to enable these features, you're gonna have to have a pretty solid device. They announced here at the keynote at WWDC that you need to have an M1 chip or better, iPhone 15 or better. So, and having all this local data is a huge advantage for Apple. They've got your messages, your phone, your calendar, your photos, your app behavior, the data inside of your wallet. All of this gives them a huge, huge advantage, so I guess the question is, do you think this renews the Apple franchise and people start upgrading their phones again to get all these new features, David Sacks?

David Sacks 47:09 Well, the market definitely thinks so because Apple was up big on this news. And even if it was largely vaporware at this point, the market definitely liked where they were going. And frankly, Apple did exactly what I said they should do last week, which was to reinvent Siri as an LLM with the-

Jason Calacanis 47:24 You nailed it.

David Sacks 47:24 ... ability, with the capability to reach into apps as an agent and take actions on the user's behalf. That's what they effectively announced. However, Apple took a shortcut to get here. They partnered with OpenAI, and this is something that I don't think they've ever really done before at the operating system level. Apple is famous for being vertically integrated, for being a walled garden, for being end-to-end. They control everything from the chips, to the hardware, to the operating system, and they don't let anybody else in until you're at the App Store layer. This is allowing somebody in beneath the level of the App Store. This is allowing someone, OpenAI, to get access to your data and to control your apps at the operating system level. And I think, you know, Elon pointed out, "Wait a second, what are the privacy implications here?" And I think there are major privacy implications. There's simply no way that you're gonna allow an AI on your phone to take all these actions on your behalf without giving that model substantial amounts of user data, and that is a huge change for Apple. Remember, Apple in the past has been the advocate for consumer privacy. There's a whole issue of the San Bernardino terrorist, where the FBI went to Apple and said, "We want you to, uh, give us backdoor access to their phone," and Apple refused to do it and went to court to defend user privacy.And furthermore, one of Apple's defenses to the arguments, the antitrust arguments for allowing sideloading and allowing, you know, other apps to get access to parts of the operating system is they've always said, "We can't do this because it would jeopardize user privacy and user security." Well, here they are opening themselves up to OpenAI in a very deep and fundamental way in order to accelerate the development of these features. In other words, they took the shortcut. They could have developed the LLM themselves, they could have developed the AI themselves, but they chose not to do that. And I think this is gonna open Pandora's box for Apple, because again, they've proven that they can open up the operating system to a third party now, and who knows what the privacy implications of this are gonna be.

Jason Calacanis 49:28 It turns out Apple has addressed this head-on. They hear the concerns, and much like when you share a photo or you share your location, it's going to ask you over and over again, "Do you want to let this app do this?" So, they're aware that this is an issue. They brought up privacy every single time. But people don't trust OpenAI, and they do trust Apple, so this is strange bedfellows, to be sure. Chamath, your thoughts?

David Friedberg 49:52 I think that Apple really cares about privacy when they're trying to hurt a company they don't like, i.e. Meta.

Jason Calacanis 50:00 (laughs)

David Sacks 50:00 (laughs)

David Friedberg 50:00 And they're- they're willing to figure out a way to work around it when...

Jason Calacanis 50:05 They're behind.

David Friedberg 50:05 ... it's a company that they clearly support, OpenAI.

Jason Calacanis 50:08 Yeah. Well, when you're behind, you know, you behave differently than when you're ahead and you have your monopoly. Freeberg, you wanted to add anything here before we move on to the next story? Okay.

Jason Calacanis 50:17 In related news, OpenAI has hit a run rate, and this is kind of stunning, of $3.4 billion. That means they've roughly doubled their monthly revenue in the past six months or so. These are not official numbers. OpenAI is denying them. But here's a chart that somebody put together based on all the different leaks and approximations of what OpenAI is making. The reason this makes no sense, this chart, and it shows a year, and then it shows a month, a month, a month, a month, is because there's been different leaks at different points in time. But just to normalize this, in 2022, for all of 2022, before they really had a lot of customers, 28 million, and now on a $3.4 billion run rate. Again, it's a pretty stunning number if it's true.

David Friedberg 51:05 Well, you can, you can do apples to apples here, because like 2023 Jan is 200 million. That means that June is 300 million if they're on a $3.6 billion run rate, so.

Jason Calacanis 51:14 Yeah. And so, if we were to even look at, you know, the number of people who work there, 770, if you put that at 500,000 a person, some engineer is getting a couple of million, some people maybe getting less, they probably only got a half billion dollars in salaries a year. Who knows what they're spending on the infrastructure for this? If you were to do a valuation on this, everybody knows they sold a bunch of shares in secondary at around 80 billion, which means they're trading at, if these numbers are true, 25 times forward revenue, which is close to what NVIDIA's trading at right now. Obviously, they're two very different businesses. So, your thoughts on this as a SaaS company? Obviously, the majority of this revenue is consumption-based. Some portion of it is SaaS-based reoccurring, like subscriptions we pay for at Launch, my venture fund. We pay for 6,000 a year to have all 20, 25 people on ChatGPT as a corporate account. Maybe it's 250, 300 a year per person. So, what do you think of this business, Sacks, and how fast it's growing? Obviously, some of it's API consumption-based, not reoccurring. Some of it is reoccurring.

David Sacks 52:20 First of all, let me say that, you know, we've talked about AI General Hospital and all the soap opera issues around OpenAI.

Jason Calacanis 52:26 Yeah.

David Sacks 52:27 And, you know, Judge Sacks had opinions on that.

Jason Calacanis 52:29 Yes.

David Sacks 52:29 But putting that aside, I mean, everyone acknowledges that their products are awesome. I mean, OpenAI makes really great products, uh, with ChatGPT-4o being at the top of the list. And I talked about how when we moved from ChatGPT-4 Turbo to 4o at Glue, the speed and quality went up, you know, at least 2X, and it felt like 10X. So, they have the best language model as of this point in time. And they also have other products that are really great, like the Whisper API, which does transcription. I mean, there's a whole bunch of tools they have that are great for developers. So, nobody's taking anything away from them on the product side. And I think you're seeing that in this revenue number. Now, if I was to try and take apart this business as an investor, I would separate the B2C business from the B2B business. The B2C is a consumer subscription plan, people paying $20 a month. I'm- I'm one of them. I pay the 20 bucks a month. It's probably the only LLM that I would pay 20 bucks a month for.

Jason Calacanis 53:32 How often do you use it? Daily, weekly, monthly?

David Sacks 53:35 I'd say a handful of times. It's- it's not-

Jason Calacanis 53:37 A month?

David Sacks 53:37 To be honest, it's not like a daily use for me, but I- I probably use it every week, I would say, at least once.

Jason Calacanis 53:44 Yeah.

David Sacks 53:44 So, I still use it. I have to say, though, that the other LLMs are catching up. And if Gemini ever gets good enough or, you know, when Grok gets to the next level, am I gonna stick with that $20 a month plan? I'm not sure. It depends whether OpenAI can really maintain the- the leadership it has or the perception of leadership. Okay, so that's half the business. And then the other part of the business is the B2B, which is the- the API products that effectively they're selling to developers, and that's where I would place the future value of this company. I mean, as somebody who invests in SaaS, when we see a business that has, uh, B2C subscriptions and B2B, we place all the value on B2B. And the reason is because historically, the churn rates in B2C are too high.

Jason Calacanis 54:29 Yep.

David Sacks 54:29 5 to 10% churn rates are common. 50% a year-

Jason Calacanis 54:33 Per month. Per month.

David Sacks 54:33 Per month. 50% churn a year, very common. OpenAI may not be experiencing that yet, but it's very hard to avoid the downdraft of consumer churn. And- and, you know, on the other hand, on the B2B side...A good B2B business has expansion, 120%, 150% expansion-

Jason Calacanis 54:53 Yep.

David Sacks 54:53 ... year over year from the same customers. In other words, they're ordering more. And-

Jason Calacanis 54:57 So you would compare this business to Amazon Web Services, Google Cloud-

David Sacks 55:01 Totally.

Jason Calacanis 55:01 ... Azure. That's really the business here.

David Sacks 55:03 Yeah. The first thing I'd want to know is how much of the 3.4 billion is consumer and how much of it is, is developers?

Jason Calacanis 55:09 We'll find out eventually. Chamath, your thoughts on OpenAI's surging revenue.

David Friedberg 55:14 I'm kind of in David's camp, which is, I think, to the extent that the business has a large terminal value, it's going to be because of the enterprise cash flows. The thing to keep in mind is that I still haven't seen enterprises building production-level products using AI.

Jason Calacanis 55:36 It's all experimentational, right? It's all experiments now, yeah.

David Friedberg 55:39 That's nothing against OpenAI. It's just a commentary on the fact that we are at a very, very early part of the cycle where when you use this term blast radius, right, what are you referring to? You're referring to this idea that you're stringing together elements of a model or multiple models that each have some non-trivial error rate. And by multiplying all these error rates together, you get your final product. But the unfortunate reality in most AI workloads is that you end up with something that's not very good, and that's not the fault of OpenAI, nor is it the fault of LLaMA. It's just the nature of how these models work and the fact that, you know, you've gone from something very, you know, deterministic to something that's very probabilistic, and we have not found a way to create extremely high-quality experiences, we as an industry, that make this cost justifiable. So right now, as you said, Jason, most of that is toy apps and a lot of experimentation. Will we get there? I absolutely think so. But we're not there yet. So I suspect that most of the revenue then is on the consumer side right now, actually, and so I just looked at Google Trends, and I first looked at the United States, and I just wanted to understand how is the traction? And what's interesting is, is that the traffic in the United States is down about 25, 26% since the end of the school year, which I think reinforces this belief that ChatGPT has definitely overindexed in that young people's cohort where they rely on it to write essays or what have you. But then I looked outside the United States and worldwide, and what's interesting about that is that's actually still growing up and to the right. So I think you have then an ARPU problem, which is the same thing that we had to deal with at Facebook, which is we have these extremely valuable users in America. They asymptote at some point, and then we have to grow in other markets, but those markets aren't nearly as lucrative.

Jason Calacanis 57:41 Right.

David Friedberg 57:41 You know, to... They just can't generate nearly as much revenue.

Jason Calacanis 57:43 The average revenue per user, ARPU, per year is single digits. Maybe it hits double digits, as opposed to-

David Friedberg 57:49 Yeah.

Jason Calacanis 57:49 ... the United States where it could be triple digits, right?

David Friedberg 57:51 So then I, I don't know. I, I would just wrap up by saying that I think that it's just i- If this number is right, it's just an incredible testament to what they've been able to uncover and create in a short amount of time. That is legendary stuff.

Jason Calacanis 58:06 Yep.

David Friedberg 58:06 But what I can tell you, in working with enterprises around these AI experiences through 80/90, we have not yet seen production quality models being deployed in the wild-

Jason Calacanis 58:21 Hmm.

David Friedberg 58:22 ... that are dealing with very, very important business processes, which means that most of the revenue right now is probably consumer-oriented.

Jason Calacanis 58:31 Okay. Freberg, you... I don't know if you got to see Sunny's talk at Liquidity last week, but he talked about how many of the CIOs, CEOs are looking for open source solutions here. 80% of them want to go open source. They don't want a proprietary model, uh, to invest in. But the best model right now is a proprietary model. So what do you think about OpenAI's revenue surge? Is it sustainable or are there 20 better open source projects that are gonna be death by 20 open source project cuts? And, and Chamath's general feeling here that, hey, it's not ready for primetime yet. It will be, but we're in the AI dial-up era, uh, uh, to use an analogy here. Hey, you can see the promise, but it kind of sucks in terms of reliability.

Chamath Palihapitiya 59:14 Yeah, I mean, may- maybe OpenAI is AOL, right? Like, I think that there's gonna be a Google that'll show up that'll... Maybe it's Google. (laughs) It'll grab a large part of the, the value here, or, you know, ultimately the cost comes down so much with the open source tools. I do believe that these open source tools are incredible. I mean, the, the open source LLaMA instances are... Like, they get you 85 to 90% of what you're looking for. So if you're an enterprise user, why would you pay thousands of dollars for the OpenAI platform when you can use LLaMA, and you can tune it, and you can build your own front end to it, your own integration with your own data, et cetera, et cetera? It's just early days for enterprises figuring out how to do that. But I do really believe that the future is enterprises, companies building their own LLM-driven tools for both internal and external products that leverage smaller open source models, and that we're current- kind of in this, you know, dearth of people's understanding and ability on how to actually execute against that, which makes the default to be go to the ChatGPT interface. I will also provide a counter. I just did a big project at work this week. We had a, like a big offsite. We had 20 people involved, and everyone used ChatGPT to get ready for it. So there was a ton of analysis, a ton of data gathering, a ton of reporting needed for the offsite, and rather than hire a third party or have people go out and source data themselves, a lot of us, including myself, I, I prepared like maybe a quarter of the material, just used ChatGPT and pulled the sources to make sure it was all kind of-

Jason Calacanis 1:00:50 Did you check... Did you... Oh-

Chamath Palihapitiya 1:00:51 ... useful.

Jason Calacanis 1:00:51 ... you did pull sources and check facts, right? You do have to do that step.

Chamath Palihapitiya 1:00:53 Yeah, so we pulled the source, and there was a lot of wrong stuff, just to be clear.... but for our purposes-

Jason Calacanis 1:00:57 What percentage? If you were to ballpark, what percentage was wrong?

Chamath Palihapitiya 1:00:59 I would say 25% of it was, like, wrong and then you had to clarify. But the truth is-

Jason Calacanis 1:01:03 Got it.

Chamath Palihapitiya 1:01:03 ... for this particular application, it didn't matter. We were making some approximations on markets and sizes and, and various facts that we were kind of using to do some strategy stuff, but... And some product development stuff. So I would say, like, it wasn't-

Jason Calacanis 1:01:16 But you found it useful. You found it useful.

Chamath Palihapitiya 1:01:17 100%. And I would say-

Jason Calacanis 1:01:18 Yeah.

Chamath Palihapitiya 1:01:19 ... it saved us hundreds of hours. Hundreds of hours amongst our group.

Jason Calacanis 1:01:21 And were you paying them an enterprise license or a consumer license?

Chamath Palihapitiya 1:01:25 20 bucks a month? What is that?

Jason Calacanis 1:01:27 It's the same thing for the enterprise, Chamath. You can just sign up and for 20 bucks a month, you can have your whole organization ...

Chamath Palihapitiya 1:01:34 No, no, I was just asking on a, like, different...

Jason Calacanis 1:01:34 ... connected free per... Yeah, no, free per, like, you're just paying it yourself or you pay for everybody at Kohala?

Chamath Palihapitiya 1:01:39 I think everyone has the right to pay for it. I think other people at the company pay for it too. I pay... I, like, I, I have my... I don't have, like, a corporate thing set up.

Jason Calacanis 1:01:46 Yeah. We, we, we took the time to set up the corporate. It's really easy. And then anybody with your domain can sign up and it lets you track it. But it doesn't consolidate. That's what I'm looking for, Chamath, is the ability to consolidate all the searches in one place and everybody can share their searches.

Chamath Palihapitiya 1:01:59 But like I said, the application layer has-

Jason Calacanis 1:02:01 Which is kind of what Blue is doing, right? In some way, with Saks.

David Sacks 1:02:03 Yeah. Collaborative AI.

Jason Calacanis 1:02:05 Collaborative AI.

Chamath Palihapitiya 1:02:05 It's an application today, meaning, like, we go to the app, we ask questions, we get answers, and we use that. And I actually had it pull tables down and I dropped those tables in. Like, all sorts of great stuff it could do. You, you know, do some analysis, pull out the st- what the analysis showed, understanding unit economics on various businesses, all this sort of stuff that it consolidated for us-

Jason Calacanis 1:02:22 It's great for that stuff.

Chamath Palihapitiya 1:02:23 ... very quickly.

Jason Calacanis 1:02:23 It definitely makes everybody bionic. I agree.

Chamath Palihapitiya 1:02:26 But what it, what it doesn't do yet is take all of our internal data and all of our internal tooling and kind of reconfigure how we use that. So we're still paying for a whole bunch of enterprise software and SaaS licenses for things that we know we don't want to be paying for in the future. And we're now starting to figure out, how can we build our own AI-based software to replace a lot of the dependency we have on third-party software that uses our internal data for our internal consumption? So there's a lot of that still ahead of us, and that's why I know... And we're pretty progressive, so that's why I know it's early innings. Because I see the way we're going to use it, and I know that we're probably well ahead of the big enterprise companies that are more traditional. And so I can see, like, a couple years from now, all these big enterprises are gonna figure the same thing out. And then you're not necessarily gonna need to pay for this ChatGPT stuff if there's an internal tool and an internal LLM that you can run.

Jason Calacanis 1:03:18 I'll tell you, young people are really getting dependent on this and they use it constantly. We were on our investment team meeting, we were evaluating a company for real estate brokers, we were evaluating a company for therapists and, like, tools and SaaS products for those type of people. And when I asked them, "Well, how many, what's the total addressable market?" Boom, three or four researchers and analysts on my team are doing that search, finding sources and saying, "There are this many therapists, this many social workers, this many real estate brokers, this many bi-" And then I'm saying, "Well, did you ser- source that?" And they're like, "Yeah, of course. I asked..." And, like, one of them was like, "Well, I asked Claude, I asked Gemini, I asked ChatGPT, I asked them all for sources, I cross-referenced them." So they're, like, have three of these things open. And so just everybody's knowledge level goes up, but you do have to check it because one out of four facts is probably wrong or cited wrong. And so it's gonna be...

Chamath Palihapitiya 1:04:07 I think one out of four is about the right number.

Jason Calacanis 1:04:09 It's, yeah.

Chamath Palihapitiya 1:04:09 Yeah, it's about right.

Jason Calacanis 1:04:09 Yeah. And so if you-

David Sacks 1:04:10 That's interesting. So you use multiple LLMs to find the hallucinations?

Chamath Palihapitiya 1:04:14 Yeah.

Jason Calacanis 1:04:15 Basically, you cross-reference something.

David Sacks 1:04:16 That's actually pretty interesting.

Chamath Palihapitiya 1:04:17 I jump on Gemini too, so I use gemini.google and I use ChatGPT and I just make sure that stuff lines up, just sanity check things, 'cause I'm trying to process a lot of data.

David Sacks 1:04:26 But you're not gonna pay for four of these, right? How many would you be willing to pay for?

Chamath Palihapitiya 1:04:29 I could pay for, I could pay for five.

Jason Calacanis 1:04:29 Oh, I would pay for five.

David Sacks 1:04:31 You'd pay, pay for five different LLMs?

Jason Calacanis 1:04:32 Well, think about it. If somebody's salary is $100,000 and these cost $1,000 to have five of them, of course I'd pay for five-

David Sacks 1:04:38 Well, as a work tool.

Jason Calacanis 1:04:39 ... 'cause it's 1% of their salary.

David Sacks 1:04:40 Okay, so as a work tool. You know, I guess-

Jason Calacanis 1:04:41 As a work tool, no problem.

David Sacks 1:04:42 ... I guess there's three categories to their business now that you're raising this. There's sort of the consumer subscriptions.

Jason Calacanis 1:04:48 Yep.

David Sacks 1:04:48 Then there's the business descriptions, which are basically the consumer product, but a company's paying for it.

Jason Calacanis 1:04:53 Correct.

David Sacks 1:04:53 And then there's the developers paying for metered API usage.

Jason Calacanis 1:04:55 Consumption metering.

David Sacks 1:04:57 Yeah.

Jason Calacanis 1:04:57 Yeah, yeah. This, that, that enterprise is really powerful.

David Sacks 1:05:00 Yeah, it's kind of like Microsoft Office or Google Docs, where consumers use them for f- for free or want to use them for free.

Jason Calacanis 1:05:07 Yep.

David Sacks 1:05:07 And then companies will pay for it, and that's where the real money is.

Jason Calacanis 1:05:11 Anyway, this is going to make people bionic. I think all organizations will have the same number of people for the next couple of years, and then just individuals will get better and better at their jobs. And so efficiency is going to go way up. Speaking of efficiency, the market is ripping.

Jason Calacanis 1:05:26 We're going to get a little macro here in three acts. Inflation has, uh, been broken, I think it's safe to say. We're down at three point X, three point three lower than expected. And hiring and wages are surging and stocks are surging. So let's go through it here and get the besties take on the vibe session.

David Sacks 1:05:47 I actually disagree with that framing, Jason.

Chamath Palihapitiya 1:05:49 Yeah, I agree, I disagree as well.

Jason Calacanis 1:05:50 You can disagree with it. Let me go through the numbers and then you can all disagree. That's how, that's how this works, folks. Inflation print came in at three point three percent, lower than expected. Here's your ten-year chart. Super easy to explain what's happening here. Rates were low for a long time. Inflation cruising at about two percent. And then lunatic spending during COVID and we added eight trillion to the national debt. And then Biden added a bunch, everybody getting those stimmy checks and PPP loans. And so if you look at inflation here, we were just cruising along at two percent. Massive spike, up to nine percent year over year inflation, and now coming back down to three point X. And the question is, can we get to a two handle? And the rates went up faster than in, ever in history. Here is the Fred chart. You can see there in... And this goes from the '80s, so you see that massive, um, spike when they tried to break the back of inflation previously. So this is the fastest ever gone up. And here we go. The common sentiment here is that savings has been burned off and people are starting to have debt. And so now we are in, uh, act two, the lowest unemployment, uh, rate of our lifetime continues, if you believe those numbers. Some people do, some people don't. Labor Department reported s- 272,000 new jobs in May.... smashing, crushing the 190,000 estimate. Uh, and then act three, average hourly wages up a massive 4% from last year at $35 an hour. That also topped estimates, so if inflation is at three point x and hourly earnings are at four point x, maybe consumers will start feeling better about the economy eventually. They obviously, uh, have been pretty shocked by that 9% inflation and only 4% growth. Here's your chart from Fred of the hourly earnings of all employees, and you can feel pretty good about that, where everybody's wages keep going up. The question is, do they go up faster than inflation? Okay, so there's my framing of the situation. Freyberg, tell me what I got right and tell me what I got wrong.

Chamath Palihapitiya 1:07:49 I think there are three numbers that matter.

Jason Calacanis 1:07:51 Okay.

Chamath Palihapitiya 1:07:51 The inflation rate, the growth in GDP, and the cost to borrow. The growth in GDP in the first quarter of 2024 was a lousy 1.3% on an annualized basis, and even if the rate of inflation came down, we are still inflating the cost of everything by north of 3%. So the economy is only growing by 1.3% and it costs more than 3% more each year to buy stuff. So that means everyone's spending power is reducing and our ability and our government's ability to tax is declining because the economy is only growing by 1.3%. And the most important fact is that the interest rates are still between four and 5%, four and 4.7%. That means that to borrow money costs 4.7%, but the businesses, the economy on average is only growing 1.3%. So just think about that for a second. We have a tremendous amount of leverage on businesses, on the economy, on f- on the, the federal government. That leverage, the cost to pay for that debt is more than four to five, four to 5%, but you're only growing your revenue by 1.3%.

Jason Calacanis 1:09:04 Yes.

Chamath Palihapitiya 1:09:04 So at some point, you cannot make your payments.

Jason Calacanis 1:09:07 And the ra- and the goal, Freiberb-

Chamath Palihapitiya 1:09:08 And that is true-

Jason Calacanis 1:09:09 ... was-

Chamath Palihapitiya 1:09:09 That is true for consumers.

Jason Calacanis 1:09:11 Yeah.

Chamath Palihapitiya 1:09:11 That is true for enterprises, and it is true for the federal government.

Jason Calacanis 1:09:15 Just to point out here, uh, what you're saying, the goal was to in fact increase the interest rate to s- to cool the economy, right? Which they got to late, but that was the goal. That was the explicit goal, was to cool the economy.

Chamath Palihapitiya 1:09:26 Yeah, the whole purpose of raising rates is to slow the flow of money through the economy. And by slowing the flow of money through the economy, there is less spending, which means that there is, you're reducing the demand relative to the supply, so the cost of things should come down. You should reduce the rate of the increase in the cost of things. Now, if you click on this link, Nick, that I just sent you, in response to the condition in the economy today, Elizabeth Warren sent this note to Jerome Powell three days ago saying, "Dear Mr. Powell," or, "Dear Chair Powell, we write today to urge the Federal Reserve to cut the federal funds rate from its current two-decade high of 5.5%. The sustained period of high interest rates is already slowing the economy and is failing to address the remaining key drivers of inflation." She goes on to point out the fact that consumers are suffering, businesses are suffering, and the strain of these three numbers is really starting to show on individuals, on businesses, and obviously on the, the power of the dollar. But the dollar is a different story-

Jason Calacanis 1:10:27 Yeah.

Chamath Palihapitiya 1:10:27 ... because of the condition of the, the economy in the rest of the world, and we're in a very unique position. But I think that things are not as rosy. Now there's, uh, certainly a shift in the market because what this tells us is that the timeline at which the Fed will cut rates is coming in a little bit-

Jason Calacanis 1:10:40 Yep.

Chamath Palihapitiya 1:10:40 ... relatively speaking, and so the market is saying, "Okay, let's adjust to lower rates." The 10-year Treasury yield has come down a bit. But we are still in a difficult situation for people and for the, uh, for businesses. And you have Elizabeth Warren, who I think is the voice of small businesses and consumers. She's k- she's j- she's trying to be the voice of those group, that, that cohort-

Jason Calacanis 1:10:59 Yeah, yeah. That, that's absolutely who she represents, so.

Chamath Palihapitiya 1:11:00 ... and saying this, this is very hard on people.

Jason Calacanis 1:11:03 Chamath, what's your take on this? We have a slowing, uh, GDP growth. We have inflation going from nine down to three. We have wages going up 4%. How do you make sense of all this? Do you feel like-

David Friedberg 1:11:17 Sorry, Freyberg, are you saying we're gonna have stagflation, or...

Chamath Palihapitiya 1:11:21 We have stagflation right now, definitely, but I, uh, what, what I'm saying is that it's not a rosy picture just because labor rates are going up.

Jason Calacanis 1:11:30 Yep.

Chamath Palihapitiya 1:11:30 If the labor rates aren't going up, and you can see this ultimately, the best number for this is the sum of GDP growth. So in aggregate, if the revenue of everything combined, which is GDP, isn't going up faster than the increase in the cost of everything, people, businesses, and the government can't afford their stuff. And that's fundamentally what's going on right now. What we need to see is a normalization where GDP growth is greater than inflation rate. And as soon as that happens, then we have a more normalized and stable economy. So right now things are not stable. There's a lot of difficulty and strain in the system.

David Friedberg 1:12:04 I will put myself on the other side of that trade, if, if there was one. If I had to simplify the United States economy, remember GDP is 70% spending by individual people. And so people can spend two things, savings that they have or credit that they have, and what's interesting is that we have finally burned through, and this is what this picture shows-

Jason Calacanis 1:12:33 There it is, yeah.

David Friedberg 1:12:33 ... all of the money that folks had in their bank accounts. And so what does that force people to do? It actually forces people to reenter the workforce so that they can start to make money. But the problem is that companies have been shrinking and have been on a defensive posture, and so as a result, which you started to see this past unemployment report, unemployment is now ticking up because when these people reenter the workforce, there are no jobs for them to have. People are filing incremental unemployment insurance claims. States like California, in fact, the state of California was the worst off this past month.So I think what we're starting to see is that for the large portion of the economy, we've run out of cash to spend. And as a result, I do think that we are going to see an economic slowing, and I think that that will create not just enormous empirical justification for Jerome Powell, it'll be exacerbated by what Friedberg just showed, which is the political pressure that he's going to be under to cut. Will it cause him to cut more aggressively than he would have otherwise? On the margins, I actually think yes.

Jason Calacanis 1:13:50 Mm-hmm.

David Friedberg 1:13:51 But my perspective is that I think that we've run out of money, individual people.

Jason Calacanis 1:13:56 Yeah.

David Friedberg 1:13:56 So I think unemployment is going back up, I think GDP is gonna shrink.

Jason Calacanis 1:14:00 Yeah.

David Friedberg 1:14:01 And so I kind of tend to be in this camp that we're gonna see more than one rate cut.

Jason Calacanis 1:14:05 So here is total job openings. To your point, Chamath, they're getting burned off. We peaked at 12 million. Again, if you believe the numbers or not, they're, they, they obviously have some value. And we've burned off a ton of those. So Sax, what's your non-political, non-partisan take, first principles of what's going on with the economy?

David Sacks 1:14:23 Well, look, we just had this inflation report. CPI was 3.3%. The market was expecting 3.4%, so that's a teeny bit better than expected, but it's still persistently sticky, inflation is. And furthermore, Powell's comments were very hawkish. He basically said he could not commit to when rate cuts might begin. And we're already... Remember, at the beginning of the year, we entered the year with expectations for seven rate cuts this year. Now we're down to an expectation of one rate cut, and we can't say for sure when that's gonna