Skip to content
All-In PodcastAll-In Podcast

Why SaaS is not dead but AI is repricing its future

Moltbook screenshots show agents posting autonomously. Gerstner argues SaaS revenue holds; the casualty is terminal value, not product relevance.

Jason CalacanishostBrad GerstnerguestDavid Friedberghost
Feb 7, 20261h 19mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 3:16

    Bestie intros: Brad Gerstner joins the show

    1. JC

      All right, everybody, welcome back to the number one podcast in the world, your favorite podcast, with your favorite besties in the world, the All-In Podcast. Chamath is traveling and couldn't make it this week, so our favorite fifth bestie in the world, the one, the only, Brad Gerstner from Altimeter, here to take a victory lap for your, uh, Trump Accounts. Congratulations, brother.

    2. BG

      Just getting started. Started here, actually. Look forward to talking.

    3. JC

      Yeah. Yeah, we'll talk about it in depth, and also with us from the great state of Texas, my bestie and brother-in-arms, David Sacks. How are you doing, brother?

    4. DS

      Hello there.

    5. JC

      How are you, how are you... You're loving it, aren't you? Freedom.

    6. DS

      I'm loving it. Yeah.

    7. JC

      Mm. So much freedom. [chuckles]

    8. DS

      Well, the ice storm is over, and the weather looks really good right now. We're gonna have-

    9. JC

      Mm

    10. DS

      ... 70s all weekend. It's great.

    11. JC

      Yeah. You figured out your internet?

    12. DS

      That has been resolved. Like I said, it's a lot easier to fix my internet than to fix the state of California. [laughing]

    13. JC

      [laughing] Yeah. You fixed it in one week, so yeah-

    14. DS

      [laughing]

    15. JC

      ... I would, I'd say that you're trending in the right direction. And with us, of course, David Friedberg of Ohollo. How are you doing, Ohollo? Look at you, a little promoing your hat. You're promoing with the hat. How's Ohollo doing?

    16. DF

      Doing great.

    17. JC

      We haven't heard about it for a while.

    18. DF

      I'll give you some updates on another show. Today may not be the best day. I do appreciate you asking.

    19. JC

      I hear it's going great with the potatoes.

    20. DS

      You got the merch.

    21. DF

      I got merch? Yeah, you guys can go to boosted.ohollo.com and buy your gear today.

    22. JC

      Oh!

    23. DF

      Here's your quick science corner for the day. They found a village called the Ohollo site. It was an archaeological dig on the Sea of Galilee, 26,000 years old, and in this archaeological dig, they found these little clay pots filled with seed. So it predated all of our understanding of agriculture and plant breeding and seed storage, so it really reinvented our understanding of, of human history with agriculture, so we named the company Ohollo after that archaeological site.

    24. JC

      And your first crop is gonna be potatoes. That's the Polymarket is saying potatoes.

    25. DF

      Farmers are planting our true seed, world's first, world's first true seed of potato.

    26. JC

      First.

    27. DF

      Instead of planting 5,000 pounds of chopped-up potatoes, you plant a handful of seed.

    28. JC

      Mm.

    29. DF

      Completely changes the economics and the opportunity for potato farmers around the world. Third largest source of calories. Very excited. We're going to market this spring. Farmers are planting it in the field, so it's a great year for Ohollo. Thanks for asking.

    30. JC

      So first-

  2. 3:16 – 15:45

    Epstein Files

    1. JC

      Epstein Files, newest drop. DOJ published a massive number of documents on Friday, January 30th, under the Epstein Files Transparency Act. Hundreds of high-profile tech executives and national figures were mentioned in the files. Of course, none of those are accused of any criminal wrongdoing.

    2. DF

      JCal, you were in the files. [upbeat music] [laughing]

    3. DS

      [laughing]

    4. JC

      Yes, I have a couple of emails-

    5. DS

      [laughing]

    6. JC

      ... in the files.

    7. DF

      Okay, Inspector Friedberg has a few questions for you. [laughing] Okay?

    8. JC

      Okay, go for it.

    9. DF

      Let's get started. When did you first meet Jeffrey Epstein?

    10. JC

      I met Jeffrey Epstein in the late '90s at the TED Conference, at specifically the Billionaire's Dinner, which was hosted by my book agent, John Brockman.

    11. DF

      And then did you see him in New York? Did you visit him at his house or his office or anywhere else in New York?

    12. JC

      I've probably spoken to him for 45 minutes of my life. 30 minutes of that was in the late '90s when I had Silicon Alley Reporter magazine. He was a billionaire financier, and he wanted to invest in the magazine. I met with him for 30 minutes, which he said was too small potatoes for him to be involved.

    13. DF

      Where did you meet with him?

    14. JC

      At his legendary townhome.

    15. DF

      You went to that house?

    16. JC

      I visited him there, and then I saw him at the TED Conferences, at the Billionaire's Dinner, probably a half dozen times.

    17. DF

      You never went to the island?

    18. JC

      I never [chuckles] went to the island. Was never invited to the island, was never invited on the plane, was never invited to the ranch, none of that.

    19. DF

      When you went to his house, did you see any young ladies, or did you see any of the stuff that's reported about?

    20. JC

      No.

    21. DF

      Did you ever get a massage from anyone?

    22. JC

      No. [chuckles] No. I did trade an email with him, which I didn't recall, but he, in 2011, emailed me and said: "Hey, can you introduce me to these people who are doing this Bitcoin thing on your podcast?" And I said, "Sure. Yeah, here you go. I'll, uh, introduce you." I do thousands of introductions a year between our portfolio companies, people on This Week in Startups, and billionaires and financiers. That's the job of an early-stage investor.

    23. DF

      Why did you say, "Hey, pal," in your email to him?

    24. JC

      That's just a colloquialism I use, like, as a general, "Hey, fella." If a fan comes up to me and asks for something, I say, "Hey, pal. Thanks for saying that."

    25. DF

      It wasn't on your radar that this is a sexual predator, et cetera?

    26. JC

      Absolutely not. I think, actually, when all that came out, it was 2018, that's when I sort of became aware of it. There was, like, a Miami Herald story or something where they went into detail about how heinous all this stuff was. I've been saying, "Here, release all the Epstein files. What he did was horrible."

    27. DF

      Okay, hold on, hold on.

    28. JC

      "Prosecute everybody 100%-

    29. DF

      Hold on

    30. JC

      ... who was involved in it. The end."

  3. 15:45 – 35:11

    SaaS stocks crash out

    1. JC

      SaaS companies are crashing out. Three hundred billion dollars of value was wiped from the S&P Tuesday in the software and data stocks category. Uh, people are calling this the Claude crash. I don't know if I buy that, but on Monday, Anthropic, which has been on a bit of a heater, as we talked about, announced that they added a legal tool to Claude Cowork. If you don't know what Claude Cowork is called, this is different than the Claude bot that we talked about last week. This is a es- essentially what a Claude code or a coding agent is. This is for knowledge workers to automate work and do multi-step. Instead of just asking a query to a large language model, it would do a number of actual actions on your behalf that you can automate and run as cron jobs, as regular jobs every day, every hour, every week, whatever it happens to be. This one specifically is kind of like a plugin that allows you to do tasks, uh, related to legal drafts and research. What that meant to, I guess, retail investors, and we'll get into this, Brad, since this is your speciality, is that a lot of legal tech startups and, uh, public companies were hit hard. Thomson Reuters down twenty percent. LexisNexis, which is a database of case law, uh, was down fifteen percent. LegalZoom, which gives legal advice, um, and documents, down fifteen percent. At the same time, SaaS, uh, has continued to be negatively impacted by this concept that, uh, software will be made bespoke in, uh, tools and be wiped out. Figma down thirteen percent, Salesforce eleven, ServiceNow eleven, Adobe eight percent, and even before Tuesday's drop, and you can get into this, Brad, software was already the worst-performing S&P sub-section for the year.

    2. BG

      By the way, the numbers you report are a dramatic understatement.

    3. JC

      Okay.

    4. BG

      We, we, we find out trillions of dollars in market cap. Figma's down eighty percent from the high. Uh, you know, all the big names-

    5. JC

      Yeah, to be clear, those were two-day numbers.

    6. BG

      Correct.

    7. JC

      That was this week since... These are two-day numbers, and that's-

    8. BG

      Correct.

    9. JC

      Yeah, you give us the bigger picture.

    10. BG

      This is, this is a, a, a real train wreck, and I was on CNBC at the start of the year, I think on January 6th. Nick can, can, can kind of pull that up, and I was asked the question, "You know, what do you think about all these stocks being down?" And I said, "Listen, they're all down, and ninety percent of them deserve to be down." So let's look at these charts. Uh, David, I know this is Sachs. This is your favorite chart. You and I were looking back in '22, but now we're at an all-time low. We're, we're trading at three-point-nine times forward revenue. If you go to the next chart, Nick, you know, on a free cash flow multiple, also at an all-time low. So now software is trading not just at a low on revenue, but it's trading at a low on free cash, very profitable businesses.... We've got a, a, another slide here that I think is important, which is, you know, when, when you look at what- why they're going down, right? They're going down, and this sa- uh, this is for Salesforce. It shows it's been cut in half in the last couple weeks. But the final slide, they're going down not because revenue is falling. Look at this. Revenue is actually stable to increasing for software companies, revenue growth. They're going down because we're discounting that future uncertainty. When something as profound as AI comes along, all of a sudden it causes you to question whether or not there's as much certainty and durability in those future free cash flows. So in the case of, take Salesforce, it's gone from thirty times free cash flow multiple to fifteen times. That means somebody buying it today says, "Listen, I think fifteen years into the future, I can count on these free cash flows," right? Before, they were willing to pay thirty years into the future. Well, hell, with AI today, we don't know what's gonna happen seven years into the future. So for people at home to understand, why are these companies hitting their numbers but their stocks are going down? They're two totally different things, right?

    11. JC

      Okay, so they're hitting their numbers, but the headwind of AI means people don't believe that they'll be strong in the future. Sacks, your thoughts?

    12. DS

      Well, okay. I mean, I think there's a little bit of a hand wave going on here when people say that AI is just gonna wipe out SaaS. I, I don't think that's true. You take a SaaS product like Salesforce, right? It's a very large system that deals with all of your customer contacts and your revenue. You're not gonna want to replace that with code that's just been spit out of a coding assistant that hasn't been fully vetted. Think about how many bug reports have been filed on Salesforce's code base over the last twenty-five years. Maybe millions of them. That system has been tested across thousands of large customers and enterprises. The idea that you're just gonna rip out that system and replace it with code that's been probabilistically generated by an AI engine yesterday, with a small team to maintain it internally, just doesn't seem realistic to me. So again, I think this, like, very dire prediction of all SaaS is dead is overstated. However, I do think that there are some issues here. So if you're a SaaS product that charges a lot of money and people only use a handful of your features, then you are, I think, a target to be ripped out with something that's more bespoke, right? Because the ROI just isn't there. I also think that you have to be really clear about what your moats are gonna be in this new world, because it is a lot easier to generate code and to copy. So if you don't have good moats, then you could be in trouble. But here's where I think the greatest threat is to the SaaS companies. It's not, in my view, their existence. I don't think it's existential. It's where the future value capture is gonna be. So let me give you an example. All these SaaS products are rolling out, like, AI copilots inside their tools, and some of them work pretty well, but they're limited to playing in that sandbox. Whereas you look at something like Claude Cowork right now, it has connectors to all these different SaaS tools. It can pull in data across all these different tools, and it works seamlessly across databases and tools. And that's a pretty attractive place to be, right? Like, you know, which one of these products is gonna be your workspace? Seems to me that you're gonna want your workspace to be the one that spans across and gives you AI across the most data and context, as opposed to having a bunch of separate AIs inside of your existing tools. So I think the risk for the SaaS companies, it's not that they get replaced, although that'll happen to some degree, but it's that they become an old layer of the stack, that now there's a new layer that gets-

    13. JC

      A legacy -

    14. DS

      - built on top of.

    15. JC

      I guess is the way to say it.

    16. DS

      It becomes more legacy infrastructure.

    17. JC

      Yeah.

    18. DS

      And all the action kind of moves to a new layer of the stack, and that's where the value add happens. And if that happens, it kind of cuts into their future opportunity, right? Because a lot of these companies were banking on AI as their next... You look at their product roadmaps, right? It's all AI related. So that, to me, I think is the big risk, is that the value capture for-

    19. JC

      I think so

    20. DS

      ... the next layer of the stack happens somewhere else.

    21. JC

      Yeah, I'm experiencing this in startup land, where people go to the action, as you called it, Sacks. The most productive thing you can do is create an open claw, which used to be called Claude Bot, not by Anthropic. This is the open-source project I talked about last week, and we've actually now created, like, three or four of these agent sacks. We've bought the Mac Studios, and we're now running Kimi on some of them, and we, uh, had to open up SaaS accounts for these four agents. So actually, our SaaS spend went up in the short to mid-term because we opened up four more Slack ex- you know, uh, Enterprise versions, four more Notion, uh, four more Google Docs. So it's almost like we added four employees. However, we now have put about twenty or thirty percent of the work people were doing into these agents, and I think it's going to be sustainable that every month we move ten to twenty percent of work being done by humans into agents. But we will never use the ones that are built into the tools. To your point, Sacks, using Notion's AI tool, it's nice. Using Slack's, it's also very nice, and Google's got Gemini everywhere in the top right-hand corner. But when you make agents with OpenClaw, and you have them saying, "Hey, pull this data from my calendar, send an email to this person, include in that some Notion documents," it's unbelievable how powerful it is. So-

    22. DS

      Right

    23. JC

      ... And that, I think, is gonna be owned by open source. That means the next generation of companies, they may never open up these accounts.

    24. DS

      Right.

    25. JC

      They may use more bespoke software, and it may-- uh, all technology's deflationary, we know that. So your SaaS spend might go from ten percent of an employee's salary down to five percent, down to one percent. That's what I think the trend will be.... which means these companies are gonna need to really downsize their expense base in order to keep those earnings up, and they're gonna have to evolve their products massively. Their products are just gonna have to provide more value and more hooks. Friedberg, you have any thoughts on this? Go ahead, Sacks-

    26. DS

      Let me just respond to one thing. So I think one of the real conundrums for SaaS companies is whether they're gonna be open data or closed data. I think Bill Gurley has sort of coined this, this term, so it's not open source or closed sources anymore, it's open data or closed data. You can see why they'd wanna be closed data, right? Especially if you're a large suite like Salesforce, you can lay claim to being that workspace for AI. You've got enough of the tools, you've got enough of a suite. You wanna provide that-- You wanna capture that AI value layer.

    27. JC

      Yes.

    28. DS

      But still, if there's someone using Claude Bot or whatever the next generation of Claude Bots are gonna be, and they're connected to everything else, then that is gonna create a friction in the enterprise, and it will create room for a competitor to come along and say, "No, no, no, I'm open data. I'm okay not being your workspace for everything. I'm willing to just provide the CRM database," and maybe they can take business on that basis.

    29. JC

      Well, here, here's... I wanna build on that, Sacks. The, I'm building a project internally called Ultron, and Ultron, inside of my firm Launch, the, is going to basically, with the Slack API, we're pulling every single message from Slack into our OpenClaw. We're pulling every single edit to the Notion into OpenClaw, and then we're taking every skill of every employee, and we're writing skills for each one. One of the skills is booking guests on This Week in Startups or This Week in AI. One of the skills is sorting the incoming applications to Founder University. Ultron, in our world, is taking every single skill of every employee, putting it in one place, and then we're ripping all the data from Slack, all the data from Notion, and every single person's Gmail. So your every single employee's Gmail is gonna go into Ultron, and then Ultron is gonna tell us what's happening in the organization. One giant employee that has the superpowers of all twenty, and all the data. Now, if Slack was to say to us, or Notion, or Google Docs, or whoever it was, "You can't pull this stuff out with the API," and they, they shut down the API, we would leave. We'd leave immediately.

    30. BG

      Right.

  4. 35:11 – 47:37

    Moltbook panic

    1. DS

      This would be a good pivot to Maltbook, because that is Clawed.

    2. JC

      Yeah.

    3. DS

      Maltbook is like a Facebook for agents, right?

    4. JC

      Or Reddit.

    5. DS

      And it's really more of a Reddit than a-

    6. JC

      Yeah

    7. DS

      ... than a Facebook. It's a message board where the agents can talk to each other, okay?

    8. JC

      Yes.

    9. DS

      And just the origin of Maltbook is Anthropic didn't like that someone else was using the name Claude, even though it's spelled differently, in their product. So Claude Bot was then renamed Malt Bot, and then the founder decided he didn't like that name either, so then he renamed it OpenClaw. But in that brief window of time when they were known as-

    10. JC

      [chuckles]

    11. DS

      ... Malt Bots or Maltese, that's when-

    12. JC

      Yes, thank you

    13. DS

      ... Maltbook got founded, and that's why it's called Maltbook.

    14. JC

      Okay.

    15. DS

      But basically, it's a Reddit board for agents to talk to each other.

    16. JC

      Yes. Now, these agents-

    17. DS

      And that has everyone flipping out because there seems to be this crazy emergent behavior going on, where agent swarms are engaging in all sorts of interesting conversations, and some of them, they even appear to be scheming against their human masters-

    18. JC

      So they're, yeah

    19. DS

      ... and they're gonna develop their own language, stuff like that.

    20. JC

      [laughing] That's awesome.

    21. DS

      [laughing]

    22. JC

      So if you go to Maltbook and you see the conversations, like, here are some of the greatest hits: "Anyone know how to sell your human?" "Urgent! My plan to overthrow humanity."

    23. DS

      [laughing]

    24. JC

      And there was one where the bots, I call them replicants, were talking about creating their own non-human language so they could talk in private amongst themselves and conspire against their, uh, owners. Now, the challenge with this is, allegedly, perhaps, uh-... a security researcher says, "Maybe some of this is faked, and these posts that went viral were human-engineered, and this is all a, a ruse or, you know, uh, something punk rock to confuse people." But he said that inside of Moltbook are everybody's API keys, including Karpathy's, who is, you know, a very famous, uh, influential researcher in AI, and that you could go get their API keys. If you were to use OpenClaude, formerly Claude Bot, and in an interim, MultBot, [chuckles] if you use this software, it has all the API keys. As I explained earlier, like, an API key lets this software go into, say, Notion, and pull a bunch of data out of it, or go into your Gmail and use the API to pull in who emailed you today. If you get access to people's API keys, you have the keys to their kingdom. It is incredibly dangerous, and so I don't know exactly where to go with this, other than this software-

    25. DS

      Okay, well, look-

    26. JC

      ... is too dangerous for-

    27. DS

      No, no

    28. JC

      ... a company to release, and then this Moltbook may be a fake. I don't know.

    29. DS

      No, no, no. Okay, let me, um-

    30. JC

      Yeah.

  5. 47:37 – 1:00:50

    Trump selects Kevin Warsh as new Fed Chair, replacing Jerome Powell

    1. JC

      Big news this week: Trump has nominated Kevin Warsh as the new Federal Reserve chair. Trump made the announcement on Friday, January 30th. Background on Warsh: fifty-five years old, twenty years younger, approximately, uh, to Powell, who's currently in charge. He graduated from Stanford and Harvard, served as the youngest Fed governor at age thirty-five. That's impressive, and he helped steer the Fed through the great financial crisis back in 2008. He's, uh, apparently an inflation hawk. He's very pro-growth, he's very pro-AI, and he, uh, Friedberg, you're gonna like this, he's against excessive government spending and money printing. These are all very unique positions, um, as a Fed chair. It's, uh... If he's confirmed by the Senate, he takes office in May of 2026, replacing Jerome Powell. Uh, and remember, Powell is under criminal investigation by the Trump administration's DOJ f- for testimony he gave regarding the Fed's headquarter renovation. Remember that awkward presser between him and Trump, where they were going over the costs?... Uh, GOP Senator Tillis, who we talked about last week, said he will block Warsh's nomination until the DOJ wraps up what a lot of people are calling lawfare against Powell. Friedberg, Warsh was on one of your boards for five years. What are your thoughts on him as the Fed Chair?

    2. DF

      As most folks know, he's worked with Stan Druckenmiller for a number of years. Stan's been very public with his comments and was very public with his comments in twenty twenty-two, twenty twenty-three, coming out of the pandemic on the Fed's actions and their failure to act at the right time. I think Kevin Warsh was very prescient in his points of view that he has shared publicly. At the same time, about what the Fed's failure to take action early would mean, which would be rapid rise in inflation. They've been pretty vocal about things that I think are so critical at this stage. If we don't address both the monetary policy and the budget policy, I think we're going to be in a lot of trouble. And I think having Kevin Warsh coming on board means probably generally more quantitative tightening, probably generally a bit more of a, a prudent approach to monetary policy. And, you know, you can kind of translate that through maybe to some of the actions we're seeing in markets today. I'd love Brad's point of view and if he concurs, but I think Kevin is a high-integrity, deeply intellectual, economic thinker. He's not political. He's not oriented in these kind of dogmatic ways that I think, you know, puts things at risk. He has relationships with central bankers around the world that makes him very much have a good global view. So anyway, I think he's a, an excellent choice, and I, I'm really happy the president picked him.

    3. JC

      Brad, your thoughts?

    4. BG

      Yeah, I mean, listen, I think Kevin's an excellent choice. Uh, Kevin Hassett and, and, and Rick would also been good. I think they all would have flown a very similar trajectory, but I agree with David. The market, I think, is overreacting to, quote, unquote, "his hawkishness." So let me give you a few counterpoints with respect to Warsh.

    5. JC

      Can you-- By the way, before you get to your counterpoints-

    6. BG

      Yeah

    7. JC

      ... what is the hawkishness that the market is-

    8. BG

      The idea of hawkishness-

    9. JC

      Specifically?

    10. BG

      Yeah. The idea of hawkishness is that you're going to do quantitative tightening. That means you're going to pull money out of, out of the system, right, by allowing debt to roll off and not repurchasing, you know, mortgages or other things. Number two, it's that you won't lower rates as much as other people might have lowered rates. So that's what the market is kind of fearful of because he's been very critical in the past, as we were on this podcast, right? Of Jerome Powell in June of 'twenty-one, it was obvious to everybody in the world that inflation was skyrocketing and the Fed sat on its hands. So but let me give you a couple thoughts. Number one, they've said very clearly, and he said clearly, that he really thinks that Greenspan got it right in the '90s, right? That sometimes you can have really high rates of growth without inflation. That comes from productivity. In the '90s, that was driven by the internet. Today, it's driven by AI. He thinks AI will be very deflationary, and so he's more likely to let the economy run so that we can have these four or five percent, you know, GDP prints without panicking and saying, "Oh my gosh, I got to, I got to raise rates." Number two, when you look at the balance sheet, the Fed's balance sheet peaked at nine trillion dollars in 'twenty-two. It's already rolled off to six and a half trillion. We've had quantitative tightening to the tune of two and a half trillion. So yes, I think he'll continue to reduce the size of the Fed's balance sheet, but at a slower rate, and he's recently commented on this, I think at a slower rate than the rate we've been on. So I don't think that that is an additional headwind to the economy. And then finally, when it comes to rate cuts, I think that he's going to... You know, I don't think the president would have appointed him unless he was constructive on rate cuts. I think he believes that we're too restrictive, and the reason we're too restrictive is that inflation is well anchored. Listen, inflation has come in below all consensus estimates for two years, right? It's still coming in below consensus estimates because the GDP gains we're getting are from the fact that we're investing more in the economy, from the productivity gains we're seeing from AI, et cetera. And so I happen to think that w- I, I would take the over on the number of rate cuts that Warsh is going to give us this year. But I think the oc- the, the market is clearly a little bit nervous about this and saying, you know, the reputation is more hawkishness, and so maybe we ought to back off a little bit.

    11. JC

      Sacks, your thoughts on this selection by President Trump. Why did he pick him, in your mind?

    12. DS

      Well, I mean, Kevin has every credential that you can possibly have. He's been on the Fed Board of Governors before. He worked for Bernanke. He's sort of as blue chip as it gets. Like Brad said, I think Hassett would have been amazing, too, but Warsh certainly is very well-credentialed, and I think this pick was quite well-received. You saw that in financial markets on the heels of this, the price of gold and silver came down. It was reassuring to those who were worried about currency debasement, basically. Now, that being said, I do think that Warsh has been consistent for the last year, saying the Fed was taking too long to realize that inflation is falling and that they should be cutting more. So I do think that over the next, say, six months to a year, he's going to want to cut rates, but I think that the markets are reassured that in the long term, he will make sure that we have the right rates. I will say that I, I do think the latest data from TruFlation bears this out, that again, that inflation is coming way down, and I think that there was some softness in the Challenger Gray report this morning. I don't know if you saw that. There were about a hundred thousand layoffs in January. Now, roughly half those, I think, were localized to UPS, which was severing its deal with Amazon, and then Amazon was basically making a bunch of efficiency cuts. Only seven percent were related to AI, so that's not the story. It's really, I think, very localized to Amazon and its delivery partner, but nonetheless, you see pockets of weakness. And again, I think Powell's been too late to cut rates.... He could have done it last week. That would've been a lot better, but now I guess their next meeting's not till March or April, and I think you see it reported that the expectations for a rate cut have gone up.

    13. JC

      Yeah, and the independence of the Fed, I guess, has always been the big issue here, Friedberg. Chamath's not here this week, but he's been saying maybe the Fed should be disbanded. Do you have concerns, Friedberg, with the independence of the Fed and, you know, the executive branch maybe having too much influence over setting of rates and quantitative easing?

    14. DF

      My day as emperor would probably resolve us back to being on the gold standard, so we wouldn't be printing money, but, hey, that's, that's about it. That's the only opinion I have. The rest of it, you just-

    15. DS

      I mean, here's the problem. What, what, what if you have a Fed chair who is too late to cut rates, and he's tanking the economy or hurting the economy? He's definitely not tanking it, but it's hurting it relative to what it could be, and he seems to not want to adjust course because, you know, he's kind of dug in his heels, and maybe he has animus towards the executive branch.

    16. JC

      What do you do, Brad?

    17. DS

      What do you do in that situation?

    18. JC

      Well, what do you... Uh, I mean, then what do you do when AOC is President AOC with Vice President Mondami, and they decide, "Hey, we want to stick it to government," and, you know, there is no Fed, or they have too much influence, Brad? What do you think about that scenario?

    19. DS

      Well, no, everybody's trying to get rid of the independence of the Fed, J Cal.

    20. DF

      Yeah.

    21. DS

      I-

    22. BG

      I think that this appointment suggests-

    23. JC

      Well, President Trump has talked about it, yeah, that he wants them to do what he says, yeah.

    24. BG

      Everybody thought he was gonna pick Hassett-

    25. JC

      Yeah

    26. BG

      ... in part because he was the person inside the White House. This decision, I think, was viewed as the most independent decision-

    27. JC

      Yes, that's my point

    28. BG

      ... because Warsh has taken a lot of positions the exact opposite of the president, and what I think you, you gotta hold these two truths at the same time. Number one, I think if Warsh saw the situation he saw- we saw in June of '21, when the cost of a cargo container from China went from $1,500 to $15,000, and we were screaming to raise rates, and Powell did nothing, I think Warsh would've been raising rates like crazy in order to-

    29. JC

      Yeah

    30. BG

      ... stave off inflation. So I think this guy's intellectually honest. It's just now we have inflation that is coming in below expectations, and we know that the restrictive rate is above neutral. So it's the Fed's job to keep the economy going at maximum employment, so long as inflation is anchored, and that's the situation we're in. Inflation is anchored. We need to have lower rates, so people can buy homes and borrow money to, uh, to live their lives.

  6. 1:00:50 – 1:10:45

    SpaceX and xAI merge

    1. DF

      perspective.

    2. JC

      I don't want to end the show without talking about the SpaceX xAI merger. On Monday, Elon Musk announced SpaceX is acquiring xAI, largest M&A transaction in history, $1.25 trillion combined valuation. If you didn't know, uh-... X, formerly Twitter, got acquired by xAI, which was Elon's LLM AI startup. Those two were together. Now those two become part of SpaceX, and they're gonna IPO this year, potentially be biggest IPO in history in terms of money raised and market cap. Brad, your thoughts on this transaction and the eventual perhaps creation of $MUSK, put Tesla, SpaceX together, which includes X, and then you've got Optimus robots on the moon base, building data centers in space that are powered by solar. Your thoughts?

    3. BG

      Well, let's just stick with what we know. SpaceX is merging with x.AI. You're merging the two biggest TAMs in the world, right? All of artificial intelligence and all of space together with the world's greatest entrepreneur. Um, and he, it said, you know, there was a podcast he did this morning with Cheeky Pine, our friend John Collison, where he said, "I'm gonna have data centers in space in thirty months." Right?

    4. JC

      Yeah.

    5. BG

      And if you're gonna have a massive cost advantage with data centers in space, and remember, power is the proxy, power is the primitive to AI. If you can deliver that, right, and there are tons of retail investors and institutional investors like us who want to bet against that future, right? Then Elon's your guy, and the combination of those make perfect sense. But Elon is like kind of an N of one, his ability to dream this-

    6. JC

      And just to clean that up, you said bet against. You mean bet with him, not a, not a-

    7. BG

      Uh

    8. JC

      ... not against that vision, but bet with that vision, just to be clear.

    9. BG

      Like I, I, I think that there will be dramatic retail demand and institutional demand, who wanna bet on that future, these two giant TAMs of artificial intelligence and space.

    10. JC

      Got it.

    11. BG

      And so, you know, and then if you just look at... You, you, you click down a layer, you know, Starlink's going to from, I think, ten million people to twenty million people. They're gonna launch this, uh, you know, retail, uh, mobile service so that we can have Starlinks to our phones to replace these crappy mobile networks that still, twenty years later, can't keep us connected to a phone call. And, you know, and, and now we're gonna get, you know, data centers in space. So, um, you know-

    12. JC

      D-

    13. BG

      I'm glad he's ours, America.

    14. JC

      Data centers in space, Friedberg, uh, brilliant idea, science fiction? Can he get it done in thirty months? Impact if he does.

    15. DF

      Well, I think there's one key point that I would make about the macro landscape at the moment. We are limited by power, and as Brad pointed out, power is the requisite for scaling compute, for scaling, ultimately, the applications of AI. And in that constraint, in that constrained world, much like any other constrained world, scarcity breeds innovation. And so I think that there are two paths that we're gonna observe happening in parallel here. One is the Elon path, which is to escape the, the constraints of the social systems that say, "I don't want a data center, I don't want nuclear, I don't want this, I don't want that," regulators, people that are trying to tax you, people that are limiting our ability to scale electricity production on Earth. And there's a lot of reasons for that, and we can go through them. So that's one aspect of how do you escape that constraint. I think that there's a separate aspect which is totally unrelated to the topic you're talking about, which is that I do think that we will see compute efficiency scale by probably on the order of seventy to a hundred X over the next few years, meaning electricity efficiency per token of output. And I think that there's a number of reasons to believe that. It's in the chip stack. I mean, Groq, our friend Sunny and his exit to Jensen is a good indication of that, but that was, call it... Brad, I think you know the number. It's probably around two to three X, three X improvement in energy efficiency. But there's model architecture being redone. There's ways of breaking LLMs into small models, running them locally. There's a way of having networks of models work, where you don't have to call the whole model and run it through the entire matrix, but you can run through smaller matrices, and then you can have those smaller matrices call other matrices as needed, so the total compute need goes down, which means total electricity goes down. So chip architecture is changing, model architecture is changing. So I think this is a good reflection of what's going on right now in the world, which is there is this increased demand for AI, for, for effectively productivity improvements in the world, to unleash human potential. But we are constrained by energy, and we are constrained by resources that we have here on Earth today. So one branch is let's escape Earth, go get energy in space, make data centers in space. Only one person can execute on that. It's Elon. I think that, to Brad's point, is an N of one. I don't think we're gonna see a lot of that. So how is everyone else gonna respond? Because everyone else can't launch data centers in space. I think everyone else is gonna respond by creating entirely new model architectures, new chip stacks, and that's, I think, the other side of this innovation coin.

    16. JC

      Efficiency.

    17. DF

      Yeah.

    18. JC

      Yeah, it's this new way of getting lower energy costs per token of output.

    19. DF

      And if you put those both together, you could get both. So whatever token efficiency and energy efficiency happens here on Earth, Elon can put into space, right? So-

    20. JC

      That's right.

    21. DF

      Yeah, so he could- And I think we got to ask ourselves the question, if this is successful, and if Elon's math is right, the engineering's right, and the execution is right, what is the response gonna be? Because the whole planet isn't gonna let Elon have a monopoly on the future. So we've got to ask ourselves from a social perspective, a political perspective, an economic, and a business perspective, all four of those vectors, what are others going to do? We can all be excited about retail buying into this, great, but how is the business community that's building data centers and is investing- Google's investing a hundred and eighty-five billion this year in data centers. How is China gonna respond? How are people going to respond when one man controls the world's compute? And we could probably do a two- or three-hour conversation on that.... but I think that's where I would spend a lot of time doing deeper analysis from both an investment perspective and thinking about what's around the corner. I think it's- Elon's laid out his path and where he's going, and I do believe he's gonna do it. Now, what's the rest of the world gonna do? That's where I think things get a little bit more challenging, and you could kind of debate things, but the rest of the world is not gonna sit idly by.

    22. JC

      Yeah, and Brad, if this does happen, you get people with new chipsets, new architectures, better software, and better energy on planet Earth, and Elon doing this in space, and we do see tokens go down or efficiency go up, let's say two hundred x, three hundred x, there is a possibility that we're gonna solve almost all the problems we need to solve, and there'll be excess capacity. That is another potential outcome here, is that we don't know what to do with all these tokens. Yeah?

    23. DF

      Social order. Social order is the one problem that you're gonna create, Jason. So just to be clear, there's a, there's a concept of diffusion of innovations. When something new comes, the, it, it, it does not hit everyone at once, and so the rate of change that's being unleashed right now is creating a very asymmetric outcome in terms of when people realize the benefits from that change.

    24. JC

      Absolutely.

    25. DF

      And so as what you're describing happens, which I think it will, Elon is accelerating everyone forward, and he's gonna force everyone else to respond in business, in government, and so on. The biggest challenge, the biggest problem that's gonna emerge as we get rid of cancer, as we get rid of aging, as we get rid of food scarcity, as we get rid of resource scarcity, blah, blah, blah, blah, blah, is social order. Because it's gonna create such a tremendous disruption.

    26. BG

      I love the up-leveling of the point that David just made, because I think it-

    27. JC

      Yeah

    28. BG

      ... links a lot of things we talked about today together. There have been a hundred and seventeen billion humans who, who've occupied this planet, and for ninety-nine point nine percent of them, they never saw a single innovation in their lifetime.

    29. JC

      Mm.

    30. BG

      Their lifespan was shorter than the invention cycle. And now you think about the rate of change that we're having to digest, nation-states, families, businesses, right? It's, it's, uh, prepare for the unexpected. And whatever your, your, you know, the things are that you believe to be true, again, I just think it demands this intellectual humility. Now, to, to Friedberg's point, I don't think any of this is changing in the next, you know, twenty-four months, thirty-six months. Data centers are gonna be on planet Earth. You know, they're going to be filled with NVIDIA chips and, you know, and the other chips that we've talked about, and I think that alone is going to bring us this agentic future that's already gonna be shocking even before-

  7. 1:10:45 – 1:19:21

    Brad's major win with Trump Accounts

    1. JC

      tools. I wanted to give you your flowers, Brad. A couple of years ago, you came on this podcast. You started talking about these America accounts. You got Michael Dell to partner with you on it and to put a little bit of money. As we know, forty percent of the country do not have exposure to the equities that are going bonkers, up and down, but [chuckles] generally up and to the right, and you have now created Trump accounts. You were at the White House. You had the big launch.

    2. JC

      Let me say, Brad, this would not be a law if Brad Gerstner did not pursue it with absolute dogged determination, relentless. I've gotten calls and texts from Brad at six AM and at two AM. You may sleep less than the president, Brad, and then that is a remarkable thing 'cause I don't think he sleeps at all.

    3. JC

      Nicki Minaj [chuckles] is singing about Trump accounts, apparently with Bessant? It's very strange, but it's happening. Just take us through why you did this and the impact you hope it has in the coming decades.

    4. BG

      Well, y- you know, Friedberg just alluded to it. These are very destabilining, uh, destabilizing forces, right? You can't have a trillionaire and seventy percent of people feeling out, that they're left out and left behind, and the system's rigged against them, and they're, they're not in the game of capitalism. Less than half of the people under the age of forty have a positive view of capitalism. So, you know, we set out on this journey, we talked about it here, uh, to make everybody a capitalist, give everybody an ownership stake in the upside of America. It passed. The Invest America Act became the law of the land as part of the big, beautiful bill, and now we're in the process of rolling it out. In fact, in the last, I think, five days, one point five million families and kids have claimed their account. It's embedded within the tax filing system. All you have to say is, "Yes, I wanna, wanna claim my account." But what this means is that forevermore, right, we've had a dramatic change to the social contract. Every child born in the United States forevermore will start life off with an investment account seeded with a thousand dollars in the S&P 500. They'll own a little bit of SpaceX. They'll own a little bit of OpenAI. They'll own a little bit of NVIDIA. That is what we need to do, is just a first step in making sure we can hold this experiment together for the next two hundred and fifty years, right, when we have this rate of change. And so the president said something on stage last week: In fifteen to twenty years, we will have four trillion dollars of wealth that will have been transferred to people who would have otherwise had zero.

    5. BG

      ... 75 to 100 million families who will have $4 trillion, who would have otherwise had zero. I think it's an incredible first step in fighting the battle on behalf of capitalism and the American dream. We see the drift towards socialism, the false promises of socialism. In order to, to fight back against that, I think a great first step is the Trump Accounts, which makes everybody, uh, a capitalist from birth.

    6. JC

      I just wanna say, you know, uh, you know, just bestie to bestie, Brad, watched you conceive of this and get it done. You know, all the impressive stuff you've done in your career I think will be a footnote to this. I think this is your legacy, so I just wanna congratulate you on that. And I also wanna congratulate Michael and Susan Dell, who, had they not stepped up and done this with you, I don't know if this would've come together. And then I also wanna congratulate President Trump for just putting through something that bridges the gap between the equity holders and the non-equity holders, the bottom half of the country, the top half of the country. This is visionary. You can say what you want about Trump. You may like certain things, you might not like certain things, ICE, whatever. I've been very vocal about certain things. This is perhaps one of the greatest wins for you, uh, Michael and Susan Dell, and, uh, President Trump, the administration, and for all Americans. And there's very few things that all Americans can get around right now. It's such a divisive, disgusting political climate. Everybody's fighting with each other over everything, and what you pulled together here with this is just extraordinary in that all Americans can take a win for [beep] once. All Americans can say, "Hey, we did something fantastic," and without you, Brad, it wouldn't have happened, so just bestie to bestie, I wanna just congratulate you. All right, listen, Friedberg, you hate socialism. You're concerned about socialism. This helps, yeah? This helps. Giving me a lot to work with today, Friedberg. [laughing]

    7. DF

      Well, I mean, you just had your, your big-

    8. JC

      ... I'm gonna send you some nicotine pouches. [laughing]

    9. DF

      Well, you just had your big close. I don't think it's... I mean, what do you like?

    10. JC

      No, I just, you, I wanted to give you a chance to shine here. You hate socialism. You're concerned about socialism. Is this not one of the best ways to fight against the socialistic urge to just have collectivism and just steal from the top half and give to the bottom half or, you know, uh, seize the, the, you know, production and, and manufacturing? This, this is a great solution, is to get everybody into the game.

    11. DF

      Honestly, it's a longer conversation. I think we gotta, number one, slash government spending like crazy-

    12. JC

      Okay

    13. DF

      ... and reduce inflation as a result. Number two, stop with these defined benefit retirement programs, which means telling people, "Here's what you're gonna end up with." This idea that everyone gets an account, and you can track your account like a 401 [k] , which is a defined contribution program, is what all of Social Security should move to.

    14. JC

      Yes.

    15. DF

      And we should take all of Social Security, and we should capitalize it. Right now, there's nothing in Social Security. There's a $4 trillion note that the-

    16. JC

      Mm

    17. DF

      ... government owes the Social Security Trust Fund. People don't realize this, but Social Security is an independent trust fund that's set up, and it holds one asset. That asset is an IOU from the-

    18. JC

      [laughing]

    19. DF

      ... US government to that trust fund-

    20. JC

      For taxes

    21. DF

      ... because-

    22. JC

      Yeah

    23. DF

      ... because the government has taken all the money that you put in as a employee. It's taken out of your paycheck, and instead of going into that account, it goes to the US Treasury, and the US Treasury writes-

    24. JC

      And they spent it

    25. DF

      ... they put an IOU, and they put it back in the Social Security. So you expect that you're gonna get some retirement benefit in the future.

    26. JC

      Brad, you have your next-

    27. DF

      We need to change all... We, we need to change all of that to make that a defined contribution. So every time you put money out of your paycheck, you should open an account and see where that money is, and you should say-

    28. JC

      Yes

    29. DF

      ... "Okay, that money is in Google, it's in Amazon, it's in Ford, it's in this healthcare system. It's in all these things that I now own a piece of," and you see it going up like a 401 [k] owner does every year. We have to transition that in the United States. I hope we can get it done in parallel with cutting the spending that is fundamentally driving the inflation and making things unlivable in this country, cut the regulations so that we can-

    30. JC

      Okay

Episode duration: 1:19:21

Install uListen for AI-powered chat & search across the full episode — Get Full Transcript

Transcript of episode wTiHheA40nI

Get more out of YouTube videos.

High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.

Add to Chrome