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Why Anthropic could be the most powerful monopoly ever made

Sacks compares Anthropic's current trajectory to Standard Oil; the SpaceX compute deal eases supply constraints and turns Elon into a hyperscaler.

David SackshostJason CalacanishostChamath Palihapitiyahost
May 8, 20261h 22mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 4:38

    Bestie intros! Thoughts on the LA mayor election

    1. DS

      How do I sound?

    2. JC

      You sound perfect.

    3. CP

      You sound great.

    4. DS

      How do I look?

    5. CP

      Yeah, you sound great. Better than you look.

    6. JC

      [laughs]

    7. CP

      Got the face made for radio.

    8. JC

      [laughs] You don't look as tired as you have in recent weeks.

    9. CP

      That's true.

    10. DS

      Oh, really?

    11. JC

      Yeah. Yeah.

    12. CP

      Oh, yeah. Somebody was slagging me for the bags under my [laughs] eyes. I mean, this audience is brutal.

    13. JC

      They're brutal.

    14. CP

      They're brutal.

    15. DS

      It's a good thing I'm rich.

    16. JC

      [laughs]

    17. CP

      [laughs]

    18. DS

      [upbeat music] You let your winners ride.

    19. JC

      Rain Man David Sacks. [upbeat music]

    20. DS

      And instead, we open source it to the fans, and they've just gone crazy with it.

    21. JC

      W. West is queen of Ken Rob. [upbeat music] All right, everybody. Welcome back to the number one podcast in the world. It's the All-In Podcast. With us today, Chamath Palihapitiya, David Sacks, and our fifth bestie, Mr. Brad Gerstner is here. I think, uh, David Friedberg is suffering from some socialist-related flu. He's very sick-

    22. CP

      [laughs]

    23. JC

      ... of reading about [laughs] socialists, but he'll be back next week with two incredible, incredible interviews.

    24. DS

      You guys see those Spencer Pratt ads? Wow.

    25. CP

      It's one of the best political ads I've ever, s- ever seen.

    26. JC

      Oh, there's like three or four of them.

    27. CP

      There are multiples.

    28. JC

      Yeah.

    29. CP

      Whoever that social media team is, is on fire. If you get a good social media team and you get a good ad production team, I think it's next gen, 'cause these things go crazy. And Spencer Pratt, if he wins this election, which I think he's going to in Los Angeles, the reason is what Brad said. Those ads are incredible.

    30. DS

      Well, he's also quite a good debater. Did you see-

  2. 4:38 – 26:48

    SpaceX-Anthropic deal, Elon Web Services, SpaceX IPO valuation, Anthropic's insane growth trajectory

    1. JC

      All right, first story, Elon just leased all of Colossus I, his data center.

    2. CP

      Wait, what? He did?

    3. JC

      [laughs]

    4. CP

      Nostra Canis, what?

    5. JC

      What? But yes, shocking to Dario and Anthropic, Chamath, on last week's pod. Uh, go ahead and give yourself a pat on the back. Uh, you said Elon and Dario should do a deal tomorrow. It didn't happen the next day. It happened five days later, so you came close, Chamath.

    6. CP

      [laughs]

    7. JC

      Uh, but no cigar, because of Anthropic's obvious compute constraints. Anthropic just added over 220,000 NVIDIA GPUs, over 300 megawatts of energy. The deal is already having an impact, as we've discussed here. Claude users have been experiencing rate limits. Well, Claude has now doubled the Claude code rate limits, removed peak usage caps for paid users, and increased API volumes for Opus models. xAI is now training their models at Colossus too, so they have more than enough compute. Elon made a great bet on compute and built up those data centers really fast, and that is now paying off. We had the Cursor deal we talked about last week. Let's talk about the emergence of Elon Web Services, EWS, Chamath. He is now in the hyperscaler competing against Google Cloud, Amazon Web Services, and Azure, and, uh, I don't know if you had inside information-

    8. CP

      [laughs]

    9. JC

      ... or just a brilliant, uh, epiphany, but, uh, take us behind the call, and what do you think about the deal itself?

    10. CP

      I think the deal is fantastic. I'll say maybe three s- quick things.The first is, as I mentioned a couple weeks ago, Anthropic and OpenAI's revenue performance has nothing to do with demand. Zero. It is entirely to do with the supply constraints that exist in data centers, and specifically in power. If they had infinite power, I think that their revenues would probably be even more parabolic. And so all the breathlessness about either exceeding or underperforming a forecast, in my opinion, mean nothing. I think the five-year view for those two companies is quite robust. The thing that they really need is more compute and more power. That's the first thing. The second thing is, while they need that, we have a very big problem, which is we unfortunately have very poor leadership at the head of most of these AI firms. I think they are coming off as untrustworthy or too self-interested. The political reaction now is starting to turn negative. The community reaction is negative. You have about nine gigawatts that are supposed to come online this year. Almost fifty percent of it now is being protested. More than likely if, if history holds, most of that will get turned off, so they will get even more supply constraint. So that's the setup. So what's the opportunity? I think for Elon, if you look inside of how people try to nitpick the SpaceX valuation case, or let's not even-- let's give them... Sorry, let's be more generous. W-when people try to paint the bear case or they try to red team the valuation, the biggest element is the on-the-come value around the orbital data centers. And by actually landing a bunch of terrestrial capacity, I think you start to blunt that because you can now start to say that even if the orbital data centers get delayed by a few months or a few quarters, even if the technological de-risking of it takes longer, he now has a structural core business that will effectively subsidize his ability to train Grok, which I think is a really important and underreported theme. So you have all this infrastructure. He somehow saw the tea leaves before most people. He built to a level of scale and secured power before most people. It has now become the critical asset, and now he's kind of king-making. And I think that that's a really interesting valuation reinforcement as SpaceX goes through testing the waters and the, and the roadshow.

    11. JC

      Brad, your take.

    12. SP

      Yeah, no, I think it's well said. I mean, first we s- w-we know th-there's nobody better on planet Earth than Elon at converting electrons to tokens. It's a critically important evolution to the story. You know, I think our friend Sean Maguire, he, he, he sent out a tweet that summed it up well, and he said SpaceX has this five-layer cake: launch, connectivity, compute, hyperscaler, space data centers, and then applications and models, and then other bets, right? The question on the roadshow has been, but x.ai doesn't, isn't on the revenue trajectory of OpenAI and, and Anthropic, and yet there are huge commitments. And now we see the ace card that Elon's playing. He said he was building AWS all along, or EWS all along. And so I estimate that this is gonna generate in this year an incremental four to five billion dollars of revenue on top of what I-I've seen analyst estimates in the mid-twenties. That's a material amount of incremental revenue to offset the cost of the investments that, that he's made here, and that will subsidize, to Chamath's point, all that he's investing to build the next generation of Grok. Remember too that he has three facilities, Colossus, Macrohard, and Macroharder, one point two gigawatts in Macrohard and Macroharder in Blackwell. So he's given the one that's kind of less connected, H100's great for inference to Anthropic. He's monetizing it in a big way. It's terrific for Anthropic, and it solves what I think was the biggest question in the valuation story, which is what if he spends ahead of x.ai's revenue? It takes the pressure, Chamath, off x.ai delivering immediate revenue. Now he becomes, uh, an immediate competitor in the hyperscaler. I don't think this is the last announcement. I think he's, uh, going to make a lot more, you know, moves in this direction. I think it will be a material part of their story and their revenue projections, uh, as they come together. And I would just say finally, you know, again, everybody has talked about how we don't have enough power, how we don't have enough compute, how the revenues would not show up this year. You know? But the chaos that is American capitalism somehow finds a way, okay?

    13. CP

      Mm-hmm.

    14. SP

      And there's tremendous demand for Anthropic, and we find a way. I was so happy to see kind of the détente and the kind exchange between the team at Anthropic and Elon because we need all of this in order to produce, uh, American frontier models to stay at the frontier. And then finally, I'd just say, you know, Chamath, you referenced these activists that are protesting, delaying these data centers in, in these localities. One thing I want to dispel this myth. These, this is not like organic, hyper-local protests by people in a community that aren't being spurred on. This is highly organized activists that are moving across the country to stir up trouble in the exact same way they did to stop all fission reactors being built thirty years ago in America. Now we have no nuclear reactors being built. China's got a hundred of them.Who was funding those activists? I think we need to really look into who's funding the activists now. I'm not saying that there aren't any concerns, but the misinformation about water, the misinformation about electricity bills. Electricity bills are going up in the places that are not building data centers, New York and California, because they haven't built any supply on the grid. In Texas, where you're building the most data centers in the country, electricity costs are going down. So, um, I'm, I, I think that's a boogeyman that we gotta take on.

    15. CP

      Sacks, your thoughts.

    16. DS

      Well, look, the deal is highly complimentary, as Chamath and Brad pointed out. SpaceX has a profitable, I think very profitable, space and telecommunications Starlink business, the satellite business. But the xAI business had huge losses. The reason's pretty straightforward. You need these super large training clusters, but they cost a lot of money. And until you have a model that's capable of competing at the frontier, you're not making any revenue, and that problem is compounded by the fact that right now all the revenue is in enterprise, which is to say coding. We know that xAI just did that deal with Cursor to try and catch up, but they don't have a coding product yet. So they're not participating in the revenue, but they're participating in all of the costs. So this deal fixes that problem. Elon's now able to have a frontier model company, but he's able to now not have these massive unpaid for CapEx commitments, right? Because he's able to kind of lease that capacity. So I think it solves a major problem for them and their balance sheet. And then you have to say that for Anthropic, this is a really great thing because they were compute constrained. And just to build on that point, I mean, I guess let me be the first to congratulate Dario on winning the AI race.

    17. SP

      And you've been-

    18. DS

      Because [laughs]

    19. SP

      ... let's be honest, Sacks, you have been, y- on this podcast, you've been moderately critical of that company, and Dario himself, for being, um, you know, a little d- P Doomer 110. And on your X account you've been even a little spicier. So now that there's peace in the Middle East of, uh, o- of the AI business, what's your take here?

    20. DS

      My take is, look, let's just honestly and accurately assess where the state of this AI market is at right now and Anthropic's place within it. So for the last three years, Anthropic has been growing at a rate of 10X a year. I think going into this year, probably the conventional wisdom was that there'd be no way to sustain that kind of rate of growth at this level of scale. And what happened in the first four months of the year? First, we find out that from January 1st to March 31st, they grew from roughly $10 billion of ARR to $30 billion, so it tripled. And then in April, if anything, the rate of increase seemed to accelerate. They went from $30 to $44 billion of ARR. Nobody in Silicon Valley has ever seen anything like it. Forget about the rest of the country. I mean, all we do in Silicon Valley is deal with exponentials-

    21. SP

      Yeah

    22. DS

      ... and still people have never seen that kind of growth at that level of scale. The only thing holding them back in the future was compute. Now they've made this deal. They've made other deals as well to get that compute. I think it's pretty much a foregone conclusion that they will hit that forecast of 10X this year, exiting the year at call it roughly $100 billion of ARR. And now the only question is whether they hit a trillion in 2027. And we can debate whether that's-

    23. SP

      Sacksy getting on board. I like it

    24. DS

      ... now we can, we can debate whether that's true or not. But look, if they do that, I think they'll easily be the most valuable tech company in history. In fact, they might even be more valuable than the rest of the Mag Seven put together. Just to give people some basis for comparison here, you know, the biggest tech companies, Apple-

    25. SP

      Nvidia

    26. DS

      ... Nvidia-

    27. CP

      Google

    28. DS

      ... Google.

    29. SP

      Apple.

    30. DS

      I think they, they kind of do around $400 to $500 billion a year right now of, of revenue. I mean, I guess Nvidia is a little bit of a different category, but you look at, you look at Google-

  3. 26:48 – 35:21

    Is Anthropic the next great monopoly? Early signals or major overreaction?

    1. JC

      letting you off the hook, Sacksy-poo. When, Sacks is very deliberate in how he speaks. They said he's the captain of the debate club in his 20,000-word article this week-

    2. DS

      [laughs]

    3. JC

      ... and that he's a master debater. He's a master-bater.

    4. DS

      [laughs]

    5. JC

      And you slipped in, you slipped it in. Are you saying that the FTC or whoever should be going in-

    6. DS

      Come on

    7. JC

      ... and looking at Anthropic?

    8. DS

      Stop. Stop.

    9. JC

      Oh, Brad's book is getting attacks, headwinds.

    10. DS

      Stop. Stop.

    11. JC

      You said they're a monopoly or they're heading to monopoly tactics, Sacks. Is, are that what you're saying?

    12. DS

      Well, look, I mean-

    13. JC

      Provocative

    14. DS

      ... we know that tech markets have a history of consolidating down and turning into either monopolies or duopolies. And if you just look at the revenue right now, there's only two companies making substantial revenue on AI. It's Anthropic and OpenAI. We know that OpenAI is growing at 3 to 4X, which is incredible at the level of scale they're at. Anthropic, though, we said is growing at an exponential, 10X a year, and if they just do that for 18 more months, they'll be by far the most valuable company in human history, and they'll have unprecedented control over the most important technology of our time. So I don't know what you call that, but it is something to think about. And I guess I do have a thought experiment for you guys, which is I just want you to think for a second about the case of, of John D. Rockefeller, who I think is known as probably the most successful-

    15. CP

      Greatest businessman ever

    16. DS

      ... most ruthless monopolist in, in American history. But he wasn't very good at PR. He was terrible at PR. Everyone sort of recognized how ruthless he is. We've seen movies like There Will Be Blood, which is basically about him. In any event, imagine if John D. Rockefeller was way better at public relations, and instead of calling his company Standard Oil, he called it Safe Oil. Okay, let's just, let's just play this thought experiment.

    17. JC

      Clean, beautiful coal. Yes.

    18. DS

      Safe Oil.

    19. JC

      Love it.

    20. DS

      He called it Safe Oil because, as we know, kerosene is dangerous. Their first big product was kerosene, and kerosene can light your house or it can burn it down. And in the wrong hands, it can torch a city, or you can use it to make a bomb. So John D., let's say, should have called for the creation of a new government agency to regulate the safety of his product, and they could have done rigorous testing, licensing, common sense regulation. There would've been a very intense debate over safety standards. You know, what should the proper wick thickness be?

    21. JC

      [laughs]

    22. DS

      And should we allow all those dangerous independent refiners, right? And I think people would have gotten so wrapped up in this debate over what constituted safe oil or safe kerosene, that they would have missed what was really going on, which is that Rockefeller was building the richest, most powerful monopoly of all time. In fact, people might even have called Rockefeller an effective altruist-

    23. JC

      Sacks! [laughs]

    24. DS

      ... because of course, he was so concerned about the safety of his product.

    25. JC

      I love it. Shout out to David Sacks' writers. Great, great-

    26. CP

      [laughs] Who wrote this for you?

    27. JC

      ... great writers.

    28. CP

      Newman? Newman wrote this?

    29. DS

      No, I wrote it.

    30. JC

      The Emmy award for best writing in a dramatic monologue-

  4. 35:21 – 52:01

    "FDA for AI" freakout, how the White House thinks about AI safety

    1. JC

      The White House allegedly, possibly is considering, according to reports, an FDA for AI that would vet, you heard that correct, folks, that would vet new [laughs] models for safety. The thing we've been talking about not doing here, the thing David Sacks has spent the last year on, the White House is considering. New York Times reported Trump is considering an executive order to create an, quote, AI working group. This group would include tech execs and government officials who would, quote, "Examine potential oversight procedures, including," quote, "a review process for new AI models." Oy. According to the report, the catalyst was, wait for it, Anthropic's Mythos model, which reportedly scared, spooked, made people really nervous at the White House. Quote, "The White House wants to avoid any political repercussions if a devastating AI-enabled cyberattack were to occur." They want a CYA according to The New York Times.Kevin Hassett, that guy, the director of the National Economic Council, confirmed the report on Fox Business. Here's your 15-second clip

    2. SP

      We're studying possibly an executive order, uh, to give a clear roadmap to everybody about how this has gotta go and how future AIs that also potentially create vulnerabilities, uh, should go through a process so that, you know, they're released into the wild after they've been proven safe, just like an FDA drug.

    3. JC

      Additionally, friend of the pod, Scott Bessent, had something to say

    4. SP

      What we've had in the past month was a step change in the power of one large language model, but we're gonna see it from the other AI, AI companies. What we are determined to do is work with our AI companies to allow them to continue innovate, but our charge of the U.S. government is maintaining safety, and there, there is a very important calculus here between innovation and safety. And at the, the U.S. government, we're gonna make sure that things stay safe.

    5. JC

      There you go, Kevin Hassett and Bessent. Slightly different positions here, Brad. What do you think?

    6. SP

      Actually, I don't think they're slightly different positions, but I, I, I would agree that Kevin bringing up the FDA kind of muddied the waters. I talked to Kevin la- last night after that clip ran, you know, and I asked him, I, I just said, "Do you think FDA is the right analog here?" And he said, "You know, I was, I was only bringing it up to say that they-- we want them to show us the models so that we can coordinate them." Obviously, our job is to make sure that the government is prepared, that we harden our systems, that our intelligence agencies are up to speed, but he does not think, and I can't find anybody on the right, y- y- you know, uh, that believes that we're gonna move to an approval regime, right? The approval regime, this idea that you're gonna have to sh- share every model with an FDA in Washington, and they're going to have to pre-approve the model, is a disaster. Sacks has been effectively fighting against this c- correctly over the course of the last year. It would just-- It, it would lead to three bad things. Number one, we do not want to put the Wa- Washington in, in the position of picking winners and losers when it comes to these models. We're winning. We're on the winning horse in America. We're out in front of the rest of the world. There's no reason to change horses and regimes at this point, and we don't want to burden this with more democracy. But at the same time, obviously, I call these pre-AGI or AGI models, Mistral, Spud, et cetera. I see a lot of coordination going on between the industry and government. I think we can do an even better job of evolving that framework so that everybody in government is on the same page. We need to build more capacity in government to quickly be able to do the cyber review on these models. Right now, it takes too long when the coordination does occur, so we need to have a finite amount of time to get government feedback, et cetera. But the last thing that we want is an FDA of models sitting in Washington. Kevin understands that. Scott Bessent understands that. So I expect that we will continue down the path that we've been on.

    7. JC

      Chamath, obviously, I think we all agree we don't need an FDA for AI. But there are things that, uh, reasonably people would want to have guardrails around AI, AI. I'm sure you would agree. It shouldn't be a total free-for-all. So what's your take on this? Is it just somebody gave a bad analogy here, or maybe some people were weaseling their way into the White House to try to shift things when Sacks was back at home or something? What, what's going on here? Give us the, uh-- 'cause that's what I-

    8. CP

      I think-

    9. JC

      That's what people say. They say the last person-

    10. CP

      I think-

    11. JC

      ... to talk to Trump kind of has his ear and that things can bend a certain way.

    12. CP

      I don't think it's that. I think that there's a pretty profound vibe shift with respect to tech, tech oligarchs, Silicon Valley, and particularly the AI. That vibe shift has already happened on Main Street, and I think that that's starting to seep into Washington. I think that regulations are coming. I think they'll be worse under a Democratic regime, but I think that some form of oversight is going to exist under a Republican regime. The question that I think is worth asking is why. And if you listen to everybody's tone, it's all around the negatives of AI. So I think we suffer from two things. Number one is we have horrible messaging. Nobody spends the time and the money to articulate the positive upside case so that there's broad-based support. And two, the idea that there's going to be, as Sacks said earlier, a few winners and many, many, many potential losers, I think is really disconcerting to everybody. And the response from the tech community, again, should be the leadership of the tech world coming together and actually reinvesting in America writ large. They're not doing that in enough of a scale that blunts this. So what you're seeing is the buildup of antibodies. Is it avoidable? Yes. Are we doing a good job of avoiding it? Absolutely not. We're doing a horrible job. I'd give the community, the tech leaders a D- trending to an F. The response is what we're seeing. So I think the question, Jason, isn't regulation, no regulation. It's why did we get here? And I think we got here because the other version, the glass half full version, the demonstrated investment, the broad-based uplifting of American society hasn't happened. And if it has, it's been very poorly communicated. And so the response is, "Hey, hold on. We're gonna give three guys trillion-dollar net worths, and we're gonna allow them to control the keys?" That's why this is happening.

    13. JC

      Exactly correct, and it's very easy, Sacks, to imagine all the bad things that can happen. Our minds are constructed to do that. We're vigilant. We look out for the tiger or, you know, the tornado to keep ourselves safe. Humans have a bias towards safety, and they're gonna think aboutYou know, deep fakes. They're gonna think about robotics. They're gonna think about self-driving cars taking people's jobs. They're gonna think about, you know, all the dark things that could happen, bio weapons, et cetera. And we don't have anybody out there really talking about all the positives that could happen. What's your take on the palace intrigue we all have here? What's going on in the palace, in the 47th administration around this debate? Who's leading Trump down the path of regulation and creating this AI FDA? We know you're part of the camp that wants to keep this train moving and not over-regulate it and not have regulatory capture. Who are the people trying to slow this down?

    14. DS

      Well, look, I, I think there's several things going on here. The first one is there's a lot of fake news. This whole idea of an FDA for AI, I don't think any senior official supports it, just like Brad was saying. I spoke to Hassett as well. That's not where his head is at. So I don't think anybody in the administration is saying they want an FDA for AI. Certainly, I don't think that's the way the president thinks about these issues. He's the most pro-innovation president we've ever had, and the White House Chief of Staff Susie Wiles just put out a statement last night that I think pretty much shoots this down. So I think there's a big fake news component. Remember, it was not really the White House who was saying. It was The New York Times.

    15. JC

      Mm-hmm.

    16. DS

      And there's ... And really, I think actually Andrew Ross Sorkin, not, I'm not criticizing him, but he's a commentator, and he's the one who said this first, and then somehow that spin or that gloss somehow took on a life of its own. And I think Silicon Valley reacted accordingly. There's a very visceral negative reaction here because we know how damaging that would be to innovation. But look, I think the good news is that that was fake news. Second, I think that there's another thing going on, which is a straw manning of what the Trump administration did on AI in its first year. And in the same way that they wanna spin this FDA for AI, they're also trying to spin what we did as this completely laissez-faire attitude where there'd be no regulations whatsoever, nor guardrails. It's a way of criticizing what we did. They're trying to portray it as unsafe. In fact, if you look, on March 20th, the White House released a national AI regulatory framework that I worked on in which we put out a four-page bulleted list of legislation that we would support if Congress wants to pass it. So we have not been against every conceivable regulation or every conceivable law. We just believe that there should be specific solutions to specific problems, as opposed to a giant power grab by Washington that would squash innovation. So I think that's point number two. Point number three is there is a legitimate thing happening here with, let's call it Mythos or cyber. Okay? We know that it's not just Mythos. OpenAI now has a model that's just as cyber capable as Mythos, and within three to six months, all the major frontier labs, and including Chinese models, will have cyber capabilities. In response to that, we do need there to be a hardening of systems, and we do need there to be a scanning of code bases to find these vulnerabilities and patch them before the hackers do it because the hackers will have these capabilities in a matter of months. That's a certainty. Because the same capabilities you use for cyber defense can also be used for cyber offense. It's the same tool set. And, uh, open source models will have these capabilities. Anyway-

    17. JC

      They already have it to a certain extent.

    18. DS

      Yes.

    19. JC

      Let's be honest.

    20. DS

      Exactly.

    21. JC

      They have 80% of it, 90% of it.

    22. DS

      So, so look, it's, it's simply the case that AI will be good at cyber, and so we do need a response to that. Now, my view on what should that response be should be, first of all, we should want the government and the private sector to work cooperatively, and I think they are. We have a giant cybersecurity industry in the United States whose sole job it is to protect systems and protect against breaches and hacking.

    23. JC

      We have the best companies in the world at doing that.

    24. DS

      Exactly. And so, exactly.

    25. JC

      We have CrowdStrike. We have Palo Alto Networks. We talked about that before. We have the best defense.

    26. DS

      Right. Exactly. And so what we should be doing, I think, is getting these tools, Mythos and then the OpenAI model and, and others like it, in the hands of our cybersecurity industry. And by the way, not just the public companies like Palo Alto Networks and CrowdStrike, although certainly they're two of the most noteworthy, but there's also some incredibly strong startups on the way up-

    27. JC

      Oh, there's a long tail of hundreds

    28. DS

      ... that are at, that are at the cutting edge-

    29. JC

      Yes

    30. DS

      ... of doing AI powered pen testing and all the rest of it. We need to get these tools into their hands as quickly as possible because they're a force multiplier. For all the companies out there that aren't that good at cybersecurity, or maybe they've got IT departments, they can use these companies as vendors. So I think that there is a role for us to play.

  5. 52:01 – 1:00:04

    Flipping AI's negative perception: Giving, healthcare and education innovation

    1. SP

      what do you think?

    2. JC

      I think there's two really interesting things I wanna build on here. The first is your point, Chamath, around how do we turn around the sort of bad vibes around AI. I think we have to have two strategies here. One is giving, what you've been working on, Brad, with your project. We should see more people giving. There's no reason why NVIDIA, SpaceX when they go public, Anthropic when they go public, OpenAI if and when they go public or if they beco- stay as nonprofit. There's no reason those folks in an IPO couldn't give a portion of the IPO to every American citizen. So IPOK, IPO for Kids, they all take, you know, whatever it is, 5%, 1%, whatever they choose, and they put it into the Invest America accounts. And we should see some major giving from the people who are becoming trillionaires, hundred billionaires, whatever it happens to be. There's no reason not to. But those people haven't been doing that. We had this giving pledge, which was a little bit of virtue signaling, and it wasn't real. It was just, you know, at the end of your life you promise to give away half your money. So let's have something real. Let's have something where-

    3. SP

      Yeah

    4. JC

      ... you know, people say, "I'm gonna give away 1% of my stock-

    5. SP

      Hear, hear

    6. JC

      ... over the next 20 years of my life. Every year 1% will go into Invest America," whatever it is. It won't cost anybody anything. You can't spend this money, whether it's Bezos or whoever. Second, and that same thing in terms of giving back, we have not talked about how massive this could be for health and extending people's life and reducing suffering. We need to work on that. That's where contributions to basic science could come in, and obviously education and lowering the cost of education. And if you look at what Americans on the bottom half, you were talking about the, you know, cup half empty. There's really two or three things they really feel anxiety about. One of it is income, and the second is healthcare, and on the margins, housing and their kids, you know, their kids' education and the cost of those things. We should really take a look deeply at, and I know this is very unpopular amongst capitalists, including myself, we should really look at the minimum wage and study what happened in New Zealand, Sweden, Switzerland, uh, Australia when they raised it. What actually happened when they raised it, and there was a lot of hand-wringing about it, but when they slowly raised it, what they found was those consumers don't save money. They spend it. They're always behind the eight ball in terms of their spending. We should opt in to trying to raise the minimum wage company by company by company, and just give people who are at the end of the spectrum that understanding that, hey, year over year, whether it's Amazon or-Target, et cetera, restaurants. We're all collectively going to add a little bit to that minimum wage and try to lift the bottom third of society. That's the stuff we're not talking about. We don't talk about it here on this podcast. We don't talk about universal healthcare. We don't talk about the minimum wage, but that's what capitalists should be talking about. And if we did that, if we increased the minimum wage, and I'm not a socialist, I'm a capitalist who think this is good for capitalism. If we increased the minimum wage just modestly each year, and we opted into doing that, and we figured out a way to give universal healthcare, companies wouldn't have to deal with universal healthcare, and we would have customers, and we're a customer-driven economy. Like, 60, 70, 80% of what happens in this country is driven by the consumer. We need consumer spending. It's great for companies if we had more people being able to buy Netflix or order [beep] on Amazon. Anyway, that's my, that's my TED Talk. Thanks for coming.

    7. DS

      How do we get from AI to the minimum wage?

    8. JC

      [laughs]

    9. DS

      I'm still a little bit confused.

    10. JC

      Well, no, because of the black eye. No, the black eye we have in this country with polarization of wealth-

    11. DS

      Yes

    12. JC

      ... and people scared of losing their jobs. We, we should-

    13. DS

      Okay. I agree

    14. JC

      ... look at why are they scared, David.

    15. DS

      I, I, I agree.

    16. JC

      And I've talked to you privately, and you said to me privately, you can strike this if you want, but you said to me privately you wouldn't be against necessarily figuring out a way to uni- do universal healthcare if there was a way to do it. You want to see every human have healthcare, yes?

    17. DS

      Sure. I mean, the issue is not the desirability of it, it's the cost. I mean-

    18. JC

      Right

    19. DS

      ... and, and also-

    20. JC

      So you're a great entrepreneur of our time. How would you do it? Have you given any cycles to it?

    21. DS

      I don't know. I have to... I haven't studied that issue, so I don't know. I just know that, like-

    22. JC

      Convenient. How about you study it?

    23. DS

      ... the country's ... I remember what P.J. O'Rourke once said, which is, "If you think healthcare is expensive now, just wait until you make it free."

    24. JC

      [laughs] Yeah. Put a more conservative-

    25. DS

      And, uh, so you take away all the incentives, and you have a even bigger problem. Let me just make one-

    26. JC

      Well, what do you think of minimum wage? Yeah, go ahead.

    27. DS

      Well, let me just kind of, can we just get back to AI?

    28. JC

      Sure.

    29. DS

      Listen, you guys are right about the unpopularity of AI. We've all seen those polls, but I wanna just put up this additional poll that came out about the salience of this issue, which is how important do people think it is? And AI ranked 29 out of 39, so although AI is not very popular, it is certainly not top of mind for voters. It's not in the top 10 issues. It's not in the top 20 issues. What is top of mind for voters? Number one, cost of living. Number two, the economy. And we know that AI is deflationary. It helps with the cost of living, and it's creating an economic boom right now, okay? It's 75% of GDP growth in Q1. By the way, that, that economic growth is not just limited to startups in Silicon Valley. We're seeing a construction boom. We're seeing a blue-collar boom. We're seeing 25 to 30% wage increases for, uh, construction workers-

    30. JC

      Exactly

  6. 1:00:04 – 1:21:58

    Trading the AI market, state of the economy

    1. JC

      verticals. All right, the market is in hyperdrive. Hyperscaler revenue has made the markets move up. We hit on this briefly, but we didn't have you here. Fifth bestie BG, cloud computing on a tear. I referenced it earlier, but AWS is now on $150 billion run rate. Azure, 108 billion. GCP, Google Cloud, 80 billion. There's a little bit of fun with numbers there 'cause Azure and Microsoft include some of their software products in there, and Google Cloud includes things like Google Office or Google Suite in there.But the growth numbers are tremendous. AWS, which is the more pure play of the three, twenty-eight percent growth on a very big number. Azure, thirty-nine percent. Google Cloud stunning everybody with sixty-three percent growth. It is incredible what the ARR numbers are. Google Cloud at a ten, AWS ten, Azure nine point five. So basically thirty billion collectively. Jamin Ball, who works for you, uh, I think, put out some data on the Twitter. Brad, market's at all times high- all-time highs. Mag seven cooking. Uber blowing out growth. Disney blowing out growth. The, the consumer seems absurdly strong based on those two bellwethers. Tech seems extremely strong based on the cloud computing. What's your take on the overall market and overall economy? Obviously, inflation up a bit, people hand-wringing about the never-ending war and the cost of oil.

    2. SP

      Let, let's just telescope way out. You know, the level of criticism directed to this administration, right? Tariffs were going to cause hyperinflation, were gonna destroy GDP. Uh, conflicts in Venezuela and Iran were going to do the same. You know, we've heard all of the negative stories, but what's happening? Accelerating GDP, a tenure that's sitting at four three, inflation totally under control. AI, AI, AI, compute, compute, compute. We're leading the world. It's contributing massively, right, to GDP growth in the country. We see the S&P only up eight percent this year, right? So we're not into bubble territory here. Meta's trading at seventeen times fully tax GAAP earnings. NVIDIA at nineteen times, Microsoft at twenty times, Google at twenty-four times. And then the memory stocks that everybody's excited about, we have twenty-five percent of our portfolio in SK Hynix, five times fully tax GAAP earnings. Samsung six times, Micron seven times, right? This is not the stuff that bubbles are made of. You know, David referenced it earlier. We started the year, OpenAI and Anthropic were doing combined about thirty billion in revenue. Now combined, four months later, eighty billion in revenue. The, the policies of this administration on the economy are working. They're working in, in spades. Our gap on the rest of the world in AI is growing. And so from, from my perspective, you know, uh, you know, we've been all in on the market. I talked about it earlier in the year. We're heavily tilted by-

    3. JC

      When did you make that switch to go all in on the market? 'Cause you were bearish, uh-

    4. SP

      I would say toward the, toward the end of last year, the market had run up a lot. We had a lot of these questions. Listen, entering this year, there was a huge question hanging over the market: Would the AI revenues show up? If the Anthropic revenues hadn't shown up and we didn't see this re-acceleration out of the hyperscalers, the market would be down ten to fifteen percent because people would say there's no ROI on all of this investment-

    5. JC

      So you would've been bearish in this case

    6. SP

      ... in infrastructure. Exactly.

    7. JC

      Got it.

    8. SP

      When I saw the numbers start showing up in December and into January, we went from medium to large in terms of our exposures, and eighty percent of our exposures, or more, have been in compute, AI, memory, et cetera.

    9. JC

      And this is why it's great to operate in the private market and the public market because you can see things in the private markets that inform the public markets. But the question remains, Brad, how much better would the economy have been doing, you know, as much credit as you're giving to the administration, if they didn't start a hundred billion dollar war that we did not need to go into, according to all reports, and if we didn't do a bunch of tariffs that wound up being unconstitutional by the Supreme Court, which Trump himself put in? We would've been further ahead. That's, uh, my take on it. We would be ripping even more if we didn't have those, uh, silly diversions.

    10. SP

      Jason, it's hard to i- it's, it's, it's hard to imagine, okay? Just to set up again here, it's hard to imagine a more Goldilocks situation for the United States of America. We have reset the table geopolitically. The discount rate globally is actually coming down, not going up, evidenced by markets at all-time high and the bond market in control. And then look at the private markets. We have multiple trillion dollar companies that have been created in the private markets that are now coming public. SpaceX coming public is gonna be a multi-trillion dollar-

    11. JC

      Absolutely. The-

    12. SP

      You know, OpenAI, Anthropic

    13. JC

      This-

    14. SP

      Like at some point you just have to acknowledge USA is winning.

    15. JC

      Of course. A hundred-

    16. SP

      Of course, there are always things that we could be doing better, but there's not a country on the world that wouldn't trade all of its fortune for the United States' fortune today. We are-

    17. JC

      Hundred percent in agreement. American exceptionalism as embodied by the great companies in America, SpaceX, Google, et cetera, all the ones we've been talking here, that is the story, and I give infinite credit to this administration for being business friendly. I do think they've made two critical mistakes. I think the tariffs were poorly executed, and I think we shouldn't have gone to this war, um, and we should find a quick resolution to it, which the administration seems to be desperately doing. Sachs, your take on the economy.

    18. DS

      Well, look, uh, we have an AI boom going on right now, and I think that's thanks to President Trump's policies. Remember, the first week he was in office, he rescinded the Biden policies on chips and models. And what were those policies? It was the approval regime that we're talking about. Models would have to go to Washington to get approved if they were trained with some number of flops, and then every sale of a GPU worldwide would have to be licensed from Washington unless it fit into some narrow exemptions. So the whole approach to the Biden administration-

    19. SP

      Exactly

    20. DS

      ... that President Trump inherited was everything approved in Washington. He rescinded that. He declared that we had to win the AI race, and he unleashed, uh, our companies to do that. Now, one other really important thing is energy. Remember, it was this president going back a decade who said, "Drill, baby, drill." He said, "We have to unleash American energy." That's the basis for the American economy. It's also the basis for AI. He also has said that he wanted to allow our AI companies to become energy companies, so they could bring their own power to these data centers, so they're not drawing off the grid. They're not competing with consumers for electricity. They're generating their own power. And it's thanks to this president that we have seen this blue-collar construction boom right now powering all of this infrastructure.What would the alternative have been? We know. I mean, Bernie Sanders has said it. Would've been ban on data centers. So-

    21. JC

      Yeah

    22. DS

      ... I think you need to give credit where it's due

    23. JC

      Raise, raise taxes, ban data centers. It's the, [laughs] that would be a much, a, a much worse choice. Uh, Chamath, I'll give you the last word here as we wrap on the economy generally.

    24. CP

      I think the markets are gonna keep going up for a while, and then at some point they're gonna go down.

    25. JC

      [laughs] Okay. I wrote it down, uh, Chamath. You said markets are up, and then eventually they're gonna come down. Those are the two things.

    26. CP

      [laughs]

    27. JC

      Up and... Let me put a U here and then a D here.

    28. DS

      He's got the-

    29. JC

      Got it. So up-

    30. DS

      I, I think you're doing a, a, an impression of the-

Episode duration: 1:22:01

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