Fed Hesitates on Tariffs, The New Mag 7, Death of VC, Google's Value in a Post-Search World

Jason Calacanis 0:00 We went to an amazing restaurant Friday night. Shiso is the name of this restaurant. Wonderful food. The owner of this restaurant, Chamath, is a, is a super fan as well of the All-In podcast.

David Sacks 0:12 Is that a French restaurant, Jason?

Jason Calacanis 0:14 Shiso was, um, more like an Asian fusion restaurant, like great sushi. We had this incredible-

David Sacks 0:18 It was delicious.

Jason Calacanis 0:19 ... salmon nigiri tail. Delicious.

David Sacks 0:19 It was delicious.

Jason Calacanis 0:20 Just, just aces all the way. The guy comes and, uh, we go to pay. He says-

David Sacks 0:26 Oh, my God. Philippe, listen to this story. This is the most embarrassing-

Jason Calacanis 0:30 "Your money's no good here. Your money's no good here, All-In."

David Sacks 0:32 This is the most-

Jason Calacanis 0:32 He refuses to let us pay after we ran up a hell of a bill, and now you see Freiberg's running. Freiberg-

David Sacks 0:38 (laughs)

Jason Calacanis 0:38 ... just ran off the show. Why did he run off the show, Chamath?

Chamath Palihapitiya 0:41 Okay, so (clears throat) Jason says to me-

David Sacks 0:44 Unbelievable.

Chamath Palihapitiya 0:44 ... "Chamath, we need to-"

David Sacks 0:46 This is absolute-

Chamath Palihapitiya 0:48 ... "guys make this shit up-"

David Sacks 0:51 No, no, no, stop, stop.

Chamath Palihapitiya 0:51 "... to try and make entertainment out of me."

David Sacks 0:53 Really? I'll tell you the truth-

Chamath Palihapitiya 0:54 Out of me.

David Sacks 0:54 ... because-

Jason Calacanis 0:55 Yeah, you tell me the truth.

David Sacks 0:56 ... yeah, I'll just tell the truth.

Chamath Palihapitiya 0:57 Truth, truth.

Jason Calacanis 0:57 Meets Freiberg.

David Sacks 0:58 Go ahead.

Chamath Palihapitiya 0:58 Okay, ready? I'm gonna tell the truth.

David Sacks 1:00 Go ahead. Yeah.

Chamath Palihapitiya 1:00 So Jason says, "Guys-"

David Sacks 1:01 Bullshit. I'll see you guys later.

Chamath Palihapitiya 1:03 ... "If they're gonna" (laughs) -

Jason Calacanis 1:04 I don't care. Sure.

David Sacks 1:06 Bye.

Jason Calacanis 1:06 It's not like he's gonna talk for more than three minutes anyway. Go ahead.

Chamath Palihapitiya 1:09 You said, "If they're, if they're gonna comp all the food, just make sure you give a great tip."

Jason Calacanis 1:13 Huge tip.

Chamath Palihapitiya 1:14 Huge tip. Huge tip.

Jason Calacanis 1:15 Chamath and J Cal level tip.

Chamath Palihapitiya 1:17 To- totally makes sense. Freiberg's like, "Yeah, I got it. No problem." We had, like, 19,000 pounds of food and he goes, "Is, is $175 appropriate?" (laughs)

Jason Calacanis 1:27 (laughs) Literally, Freiberg calculated.

Chamath Palihapitiya 1:29 And so Jason says, Jason says no-

David Sacks 1:32 Okay, okay, okay.

Chamath Palihapitiya 1:32 ... and then Freiberg says, "Hold on. Oh, fine, fine. I'll double it to 350." Now, he was fucking around. He was joking.

David Sacks 1:37 I gave the guy $1,000.

Chamath Palihapitiya 1:39 Gave $1,000 and I said-

David Sacks 1:40 Yeah. Yeah.

Chamath Palihapitiya 1:40 ... "Actually, I think we should give two, 3,000," so then we tipped the woman an extra 2K. So, he gave her 3K for a, a 10-person dinner, which I think is appropriate. She was ecstatic. The food was phenomenal. It was great. Go to Shiso if you're in Miami.

David Sacks 1:54 Dave, are you adjusting the tips for the no tax on tips so you're, like, making them a little smaller?

Chamath Palihapitiya 1:59 (laughs)

Jason Calacanis 2:00 (laughs)

David Friedberg 2:01 Going all in. Don't let your winners ride. Rain man, David Sacks. Going all in. And I said we open source it to the fans

David Friedberg 2:12 and they've just gone crazy with it.

Jason Calacanis 2:13 Love you, West Side.

David Friedberg 2:14 Queen of quinoa. Going all in.

Jason Calacanis 2:18 Hey, everybody. Hey, everybody. Welcome back to the number one podcast in the world. We're gonna have an amazing episode today. The besties are riding high. Why are we riding high? Because we went to Miami. Oh, my goodness, we had so much fun at F1.

David Sacks 2:35 That was fun.

Jason Calacanis 2:35 Thanks to-

David Sacks 2:36 That was fun.

Jason Calacanis 2:36 I mean, it was fun. I mean-

David Sacks 2:37 It was awesome.

Jason Calacanis 2:38 Gosh, so many great stories. Uh, so much good times. We're laughing the whole time. We did a little stage show, and, uh, Tony Robbins came up. We had Nico Rosberg, he's a Formula F1 champion. Our guy Antonio Gracias, uh, who's working on Doge, Valor Capital, friend of the pod, and Mayor Francis Suarez joined us. And, uh, then at the end of the show, surprise guest, none other than Sergey Brin, who is punching a clock. He's working like 70 hours a week over at, uh, Alphabet, and we'll talk about that today a bit. Did you have a favorite speaker? Mr. Sultan of Science, the one and only David Freiberg. Did you have a favorite speaker or moment? On stage.

David Sacks 3:19 I thought Sergey, Sergey, Sergey did a great job. He was very casual, very chill. We had a great conversation.

Jason Calacanis 3:23 Hmm.

David Sacks 3:23 I think we should probably publish that as a standalone. I thought it was really good.

Jason Calacanis 3:28 Oh. To drop him, like a little midweek drop or something?

David Sacks 3:30 But, but I will say-

Jason Calacanis 3:31 Like that? Du-du-du.

David Sacks 3:31 ... Antonio, I, I gave him a shout out just because I think the work Antonio is doing is so important. I am super impressed and I was really appreciative-

Jason Calacanis 3:40 Hmm.

David Sacks 3:40 ... of him taking time to come hang out with us. But obviously he's working with Elon on Doge, but he's also uncovering a lot of stuff in the government-

Jason Calacanis 3:47 Hmm.

David Sacks 3:47 ... that it's really powerful to see someone actually go in, do the digging, and present it the way they are with the transparency he is. And he's not doing it for any angle. There's no money, there's no benefit to him individually. He's just doing it.

Chamath Palihapitiya 3:59 No, it's probably net negative on the margins for him.

David Sacks 4:01 Really hard for him. And yeah.

Chamath Palihapitiya 4:02 Yeah.

David Sacks 4:02 And it's just amazing.

Jason Calacanis 4:04 Based on Elon's experience, it's definitely net negative. (laughs) People, uh, maybe don't like having their grift canceled. Chamath Palihapitiya, our chairman dictator. Did you have a favorite moment with the speakers or a favorite speaker? You know, highlight from the programming specifically?

Chamath Palihapitiya 4:20 I thought all five of them were amazing. I did, I did think that Sergey did a really good job. I like Nico Rosberg a lot.

David Sacks 4:27 I did too. For sure.

Chamath Palihapitiya 4:29 I'm really excited to see what Francis does next after being the mayor of Miami.

Jason Calacanis 4:34 Maybe governor. We'll see what, uh-

David Sacks 4:36 Love Anthony.

Jason Calacanis 4:36 ... the party says. Anthony was great.

Chamath Palihapitiya 4:38 I think they're all great. Tony Robbins, I have to say, his energy is very unique and when you're near it, I didn't have many interactions with Tony up until that first time, really. I'd met him through Peter Guber a couple of times.

Jason Calacanis 4:51 Hmm.

Chamath Palihapitiya 4:51 When I was part of the ownership team of the Warriors. Peter's a co-owner. They're very good friends. But I'd never really spent much time with him. He's a special person, you can tell. There's a, there's a big energy there.

David Sacks 5:01 They were all great.

Jason Calacanis 5:02 Yeah. You know, I'm interested to see how the audience likes that interview because, you know, he, uh, he is a ball of energy. I tried to get him to open up, talk about himself a little bit, but you know, he was kind of on his own tip, but the audience loved him. And we did a great, like, meditation exercise that everybody loved. It, it was a lot of fun. Joining us this week from Co2 Management, yes, we have Philippe Lafont, who is his older brother. And, uh, Philippe, welcome to the program for the first time.

Philippe Laffont 5:31 Thanks, guys. Great to be here.

Jason Calacanis 5:32 Have you heard the show before? Have you-

David Sacks 5:34 (laughs)

Philippe Laffont 5:35 (laughs)

Chamath Palihapitiya 5:35 (laughs)

Jason Calacanis 5:35 Have you listened to the All-In podcast, Philippe? Let me ask you that question (inaudible 00:05:19) .

Philippe Laffont 5:38 I've been listening about it for a week at speed of 1.8. So I think I've gone through about-

Jason Calacanis 5:43 1.8.

Philippe Laffont 5:43 ... like, 10 or 12 episodes.

Jason Calacanis 5:44 Okay.

Philippe Laffont 5:45 I'm ready.

Jason Calacanis 5:45 Catching up and, uh, all right. Are you an F1 fan? You're French, so I don't know. Is that, like, popular in France, the F1?

Philippe Laffont 5:52 Hey, we had a good F1 pilot, right? Alain Prost.

Jason Calacanis 5:55 Alain Prost, yeah.

Philippe Laffont 5:55 He won a few years, you know. So...

Jason Calacanis 5:58 Okay.

Philippe Laffont 5:59 It's incredibly popular in Europe.

David Sacks 6:01 Jason, what did you think of Formula 1? That was your first time, right?

Jason Calacanis 6:04 It was my first time to F1.You know, there was a lot of, um, pomp and circumstance. We're very lucky that the Trophy House, my friend Ford, who's partners on the Trophy House, included us. He gave us a level of Trophy House. Trophy House, there it is, beautiful structure. Three amazing floors, tons of activations, uh, which means free stuff, if you're not in these, like, circles where celebrities get all kinds of free stuff. And we had a poker game. It was wonderful.

Chamath Palihapitiya 6:35 Best way to watch the F1-

Jason Calacanis 6:36 Yes.

Chamath Palihapitiya 6:36 ... play poker. By the way, when you're live at the F1, it's a little bit hard to get into the experience because, like, the cars just zip by you, so you get to see the car for, like, a few seconds and then kind of, like, dead time.

Jason Calacanis 6:47 Yeah, it- it was, um, very exciting, I have to say. It was a very social experience. And we made an executive decision, because it was raining, to pull the table and put it inside the Trophy House, and then we had an incredible view of, like, the finish line. And, uh, there's Friedberg standing up, me next to him. We had an incredible lineup. Travis joined us. You can see there Phil Hellmuth haranguing poor Travis from Uber-

Chamath Palihapitiya 7:12 (laughs)

Jason Calacanis 7:12 ... sitting next to me. I mean, this is-

Chamath Palihapitiya 7:13 Phil always has to have his hand on a billionaire.

Jason Calacanis 7:16 He has to have him- (laughs) Yes.

Chamath Palihapitiya 7:16 If there's a billionaire in the room, he has his hand on a billionaire.

Jason Calacanis 7:18 If he's not within five feet of a billionaire, he has a panic attack. So-

Philippe Laffont 7:22 Yeah.

Chamath Palihapitiya 7:23 Ugh.

Jason Calacanis 7:23 And there's Hellmuth. Poor Hellmuth, um, my friend, Timothy Chalamet-

Philippe Laffont 7:27 (laughs)

Jason Calacanis 7:28 ... came by to say hi to me and of course-

Chamath Palihapitiya 7:30 He's just being accosted.

Jason Calacanis 7:31 ... there's Phil Hellmuth tackling him.

Chamath Palihapitiya 7:33 My God. Look at those meat hooks just going over poor Schal-

Jason Calacanis 7:36 Completely, like, appropriately.

Philippe Laffont 7:36 Hellmuth is like a, he's like a giant panda bear and Chalamet's the bamboo stick. (laughs)

Jason Calacanis 7:38 I felt so bad for Timothy. You know, he's- he's done such amazing work.

Philippe Laffont 7:42 (laughs) He's going in to eat the bamboo.

Chamath Palihapitiya 7:43 Like (growls)

Jason Calacanis 7:44 He's done such amazing work, and you can see how engaged he is in Phil Hellmuth. He's like, "Who is that person? Why is he grabbing me?"

Philippe Laffont 7:51 (laughs) Right.

Jason Calacanis 7:52 Um, but, you know, then again, Phil Hellmuth is presenting him. And now, here's a proper way.

Philippe Laffont 7:55 Hey, can I say something?

Jason Calacanis 7:56 To-

Philippe Laffont 7:56 Is that dealer, is that dealer Larry Summers? He sort of looks like Larry Summers.

Jason Calacanis 8:00 It is Larry Summers after his appearance, you're actually interesting-

Philippe Laffont 8:03 Did you guys get the cards dealt by Larry?

Chamath Palihapitiya 8:04 (laughs)

Jason Calacanis 8:04 Yeah, well, after he was here, he lost so much sponsorship and, and, and so, so many, (laughs) uh, you know, so many deals that he, uh, now is working-

Philippe Laffont 8:14 Yeah.

Jason Calacanis 8:14 ... moonlighting as a dealer.

Chamath Palihapitiya 8:15 He wanted to continue the great debate.

Philippe Laffont 8:17 (laughs)

Jason Calacanis 8:18 Yeah, but can I just point out here? The proper way to embrace an A-list celebrity who you're friends with-

Chamath Palihapitiya 8:23 (laughs)

Jason Calacanis 8:24 ... is to just let them come up to you and just, you know-

Chamath Palihapitiya 8:27 Look at Phil's face. Look at Phil's face. (laughs)

Jason Calacanis 8:27 Okay, so Timothy comes. Timothy and I are, just to give you some background-

Chamath Palihapitiya 8:30 This is your-

Jason Calacanis 8:31 ... we're not great friends with Timothy.

Chamath Palihapitiya 8:31 This is your good friend, Timothy Chalamet, right, Jason?

Jason Calacanis 8:33 I will not say good friends.

Chamath Palihapitiya 8:34 You're good friends, yeah.

Jason Calacanis 8:34 We, we've met a couple of times.

Chamath Palihapitiya 8:35 Uh-huh.

Jason Calacanis 8:35 Like, a handful of times, because we're both Knicks fans and I'm friends with Ben Stiller.

Chamath Palihapitiya 8:39 Uh-huh.

Jason Calacanis 8:39 Ben Stiller, myself, Timothy, and my brother, Josh, went to the Pistons game. You know, versus the Knicks when we crushed them and crushed their souls. So Timothy came over just to say hi to me and his friend.

Chamath Palihapitiya 8:49 (laughs)

Jason Calacanis 8:49 Yeah, Frankie, and his other friend, Cody Block, Frankie Bones. He's got a great crew. And you know, he came over to say hi to me and h- he was thanking me for the tickets I- I was able to get, because it was hard to get tickets for that. Anyway, for Hellmuth, don't tackle people at all events. This is why Chamath banned you.

Philippe Laffont 9:05 (laughs)

Jason Calacanis 9:05 It's just complete inappropriateness.

Chamath Palihapitiya 9:07 (laughs)

Jason Calacanis 9:08 And then Hellmuth was going around, I don't know if you knew this, he was telling everybody that he created All-in and that he was, like, the executive producer for life.

Chamath Palihapitiya 9:18 (laughs) Oh, man.

Jason Calacanis 9:18 Just, so much inappropriateness from Phil Hellmuth, it was brutal.

Chamath Palihapitiya 9:21 Oh, man.

Jason Calacanis 9:22 If I may, let me also thank, we had a partner, OKX, the new money app.

Chamath Palihapitiya 9:27 Oh, yeah.

Jason Calacanis 9:27 And they're a big, major sponsor of the McLaren F1 team.

Chamath Palihapitiya 9:31 They're the main sponsor on McLaren.

Jason Calacanis 9:33 Oh, they're the main?

Chamath Palihapitiya 9:33 Yeah.

Jason Calacanis 9:33 And they won the race. So we were there with Haider, the C- CMO, very cool guy and his team.

Chamath Palihapitiya 9:39 Super guy.

Jason Calacanis 9:39 Yeah.

Chamath Palihapitiya 9:39 And his wife, Annie.

Jason Calacanis 9:40 Nice guy. We had dinner with them.

Chamath Palihapitiya 9:41 Shout out to those guys.

Jason Calacanis 9:43 And they just launched their crypto exchange here in the US, so if you love All-in, do me a favor. Go check out OKX and, uh, thanks to some of our other partners, Solana, Google Cloud, BVNK, Circle. Shout out my guy, Jeremy Allaire, and my brother in Knicks fandom, Shane from Polymarket, who I got to hang out with a whole bunch. He's a really great guy. Wonderful event. We're gonna do it again. We're gonna run it back, I think, for maybe F1 Austin.

Chamath Palihapitiya 10:11 Vegas.

Jason Calacanis 10:11 And we're gonna... And maybe Vegas, who knows? Uh-

Chamath Palihapitiya 10:13 Vegas.

Jason Calacanis 10:13 Maybe the Super Bowl, maybe NBA Finals. We're gonna do some more of these 200 to 500 person events.

Chamath Palihapitiya 10:18 I gotta say, it was so fun to hang out also with the-

Jason Calacanis 10:20 Yes.

Chamath Palihapitiya 10:21 ... the fans that came in for the show, the sponsors. It to- it was just so great to, like, go to these events-

Jason Calacanis 10:26 Right, and if you want-

Philippe Laffont 10:27 Hey, I need to ask you guys a question.

Chamath Palihapitiya 10:29 Yeah.

Jason Calacanis 10:29 Yes.

Philippe Laffont 10:29 What was the most fun? The Friday, the Saturday or the day of the race?

Chamath Palihapitiya 10:34 Saturday for me.

Jason Calacanis 10:36 So you like the content best? Okay.

Chamath Palihapitiya 10:38 Saturday was, I woke up, I went straight to Jeff Gross' house, me, Travis, Hellmuth and a couple of others. We played poker until 4:00. I ran to the hotel, took a shower, went on stage at 5:00. (laughs) And then to dinner and then-

Jason Calacanis 10:52 I spent four hours prepping-

Chamath Palihapitiya 10:54 Went to the club.

Jason Calacanis 10:54 ... five hours prepping to make sure it was time.

Philippe Laffont 10:56 Money pouring out of your pockets.

Chamath Palihapitiya 10:57 It was great.

Jason Calacanis 10:58 Yeah, he took a hit and run.

Chamath Palihapitiya 10:58 I was in the nightclub 'til 5:00 AM.

Jason Calacanis 11:00 That's a true story.

Chamath Palihapitiya 11:01 All right, start the show. Let's get this show on the road.

Jason Calacanis 11:03 I'm gonna start the show once I remind people that September 7th, 8th and 9th, we'll be in Los Angeles, if you wanna come hang with us like we did in F1 for the All-in Summit, the fourth year. And my Lord, I got a preview from Friedberg of the content. It is going to be another peak All-in event. You know, and our goal is to have the world's most important conversations, yada, yada, yada. We're spending-

Chamath Palihapitiya 11:24 I think the experience at the summit this year is what's gonna be awesome. It's gonna... In addition to the content being great, we've got some really awesome, like, experience

Narrator 11:31 Yeah.

Jason Calacanis 11:31 Where you told me the party location, which I won't say here, but-

Chamath Palihapitiya 11:33 Yeah.

Jason Calacanis 11:34 ... you also told me that your, I did 900K was the peak two years ago.

Chamath Palihapitiya 11:38 Oh, dude.

Jason Calacanis 11:38 Then you spent 1.2 million on the party last year-

Chamath Palihapitiya 11:41 Forget about it.

Jason Calacanis 11:41 And now you told me you're spending 2 million on this year's party.

Chamath Palihapitiya 11:43 Forget about it.

Jason Calacanis 11:44 Is that true, the 2 million was for-

Chamath Palihapitiya 11:45 It's gonna be more than that.

Jason Calacanis 11:46 Oh my Lord. (laughs) Anyway, if you wanna apply for tickets, allin.com/summit. And, um, yeah, Chamath and I were on Megyn Kelly. Let's get started with the doctor-

Chamath Palihapitiya 11:56 I love it when J-Cal and Megyn Kelly, like, have their-

Philippe Laffont 11:59 Oh, it's the best.

Chamath Palihapitiya 12:00 It's the best. It's the best.

Philippe Laffont 12:01 Ah, it's the greatest. Well, she likes it.

Jason Calacanis 12:02 She understands. It's broadcaster on broadcaster action. We like to mix it up. We know how to do ratings.

Chamath Palihapitiya 12:08 (laughs)

Jason Calacanis 12:08 These ratings geniuses.

Chamath Palihapitiya 12:08 Okay, let's do the show. Come on.

Jason Calacanis 12:10 All right, the Fed held their rates steady again this week. Uh, if you remember last year, the Fed cut 50 bps in September, then 25 bps in November and December. Uh, but so far in 2025, the Fed has kept rates in a steady range, 4.25 to 4.5%.They said they want to wait and see. They were in wait and see mode because they don't know what Trump's doing with these tariffs and how that's going to impact the economy. Here's the quote from the Fed, "Economic activity has continued to expand at a solid pace." But they warned about potential stagflation, risks of higher unemployment and higher inflation are their concerns, and I talked about that last week. I'm hearing a lot of, uh, hand-wringing about layoffs coming soon. So, what do you think, Philippe, about the Fed not taking any action, and what's your general take on the markets? You know, the, the markets have seemed to recover largely from the Trump, uh, Independence Day, um, tariff announcement, but it's, uh, feels like pretty shaky out there. A lot of M&A on hold, a lot of hiring on hold. What, what are you seeing on the streets?

Philippe Laffont 13:15 Yeah. Well, it hasn't been a boring year, has it?

Jason Calacanis 13:19 (laughs)

Philippe Laffont 13:20 So I would say on the Fed, right, a lot of people are saying, "Oh, you know, the Fed should cut." And this and that. I actually think that there's also the scenario that what if the Fed is cutting because things are not so great? Maybe that's actually not a good message. And what if the Fed is not cutting because actually the economy is really strong? And so, I think that the Fed not cutting is actually not that bad of a message, and I'm surprised just in general at how bad sentiment is, but how good the hard data is. And we have this ratio at Coatue where we sort of divide hard news as a numerator and sentiment as a denominator, and it's the first time where the news is so good and the sentiment is so bad. And I don't know if the sentiment is bad because just the market went down a lot or for other reasons, but I actually think the economy's doing really well, uh, and we also learned two really important things. One is when the market did go down a lot, the government did budge and said, "Hey, we need to step in here." And the second part is the Fed did something that I thought was very clever. They basically said, "We're not gonna cut just to bail out the equity market, but if the market's liquidity is no longer functioning, emphasis on liquidity, then we'll step in to restore liquidity." And I think those two things really brought the market back up, and I think it's more a little bit the case of a tariff correction or a tariff tantrum, but not a tariff crisis.

Jason Calacanis 15:00 Mm-mm. So, you said there was a lot of good fundamental news. What would you put at the top of that list? And you said there were things in terms of sentiment that were making people quite negative, that the, um, economy as viewed by consumers is really shaking. So, what is the sentiment news that-

Philippe Laffont 15:18 Yeah.

Jason Calacanis 15:18 ... you are most tuned into, and what are the hard data that you're most tuned into?

Philippe Laffont 15:23 So on the, on the hard data, the part that's most surprising is that consumers have veer- very weak sentiment, but in the meantime, consumer spending is remarkably resilient. And you can see this in a number of ways. You can look at the Visa and Mastercard earnings, but I also like just to listen to, like, little quotes, little tidbits that you pick up in the transcripts of tr- of, of companies reporting earnings and stuff, and people will say like, "Even in mon- the month of April, consumer spending is very strong, and even in the last week when we adjust for the frontloading," some people are pre-buying ahead of the tariffs, even when we strip that out, consumer's really good. So I think the part that, to me, is most surprising, consumer's great. With respect to sentiment, it's really bad. But one thing that's funny is whenever the market goes down, sentiment is bad, and so I don't think sentiment is necessarily a good leading indicator. I almost think it's like a lagging indicator. I bet you that now that the market's gone up, we look at sentiment in a month from now, and it'll be like, "Oh, sentiment's getting better."

Jason Calacanis 16:31 Mm.

Philippe Laffont 16:31 So I think that's what's going on.

Jason Calacanis 16:34 Chamath, uh, our friends at Polymarket are showing, hmm, in, uh, June, 84% chance of no change. July, 51% chance of no change, and then September, 48% chance of a cut, and then Powell, obviously Trump's been mixing it up with him, saying he's gonna fire him, he's not gonna fire him. What's your take on the Fed and what they should be doing here at this moment in time? And then maybe you could respond to Philippe's sort of insight there that I think was pretty good, that there is a juxtaposition between what people are saying they're gonna do, consumers, and how they feel about the economy and then what they're actually doing.

Chamath Palihapitiya 17:11 I agree with Philippe's diagnosis that the Fed will really be focused on liquidity. I agree with that. In fact, Nick, I just sent you something on Signal, if you could just throw it up here, which is a really interesting view on subprime. And what it shows you is the spread between where credit acceptance is versus Capital One's... And the point in bringing this up is that when you look back historically around these subprime lenders, whenever these guys start to see price to books just start to escalate and get to highs, it tends to portend a liquidity crisis. It tends to show that things are about to roll over, and from that perspective, I think that there are some blinking yellow lights that the Fed needs to take seriously. But then, where I deviate from Philippe's perspective is, I think that the Fed is getting increasingly political in how they want to react to the conditions on the ground. I'll give you two perspectives. The first is if you actually read the press release, either the word wait, waiting, or some synonym of that word was littered in there 22 times. It just seemed like an incredible amount of verbal gymnastics-... to try to justify why they weren't cutting. And if I had to just take that at its face value, I would at least put some percentage of probability that you have to assign to this case where Powell views that if th- this lever is the only thing that he has going into the midterms, it's almost as if he's holding it back. Because I think that if you look at some of these leading indicators, particularly on the liquidity side, I agree with Felipe about how important that specific metric is. I don't believe in the Fed put. We've talked about this. But I think the liquidity measures are starting to blink yellow, and I think that if the Fed really wanted to get ahead of it, they could cut, but the political overlay is cutting helps Trump and I think there's this tension between these two people, and I think that the Fed is saying, "We're not gonna cut."

Jason Calacanis 19:28 So your position is, or what you're hypothesizing here, is that the Fed is saying, "Hey, we have to wait for Trump to clean up the tariff stuff, the trade war stuff," and that that's a political act by Powell in retaliation for Trump saying he wanted to fire him. Is that what you're insinuating?

Chamath Palihapitiya 19:47 No, no, no. That's not what I'm insinuating.

Jason Calacanis 19:48 Okay.

Chamath Palihapitiya 19:48 What I am saying very directly is that the Fed is acting in, in a matter that is as much politically motivated as financially metric motivated because the financial metrics s- some of the most critical leading indicators, particularly around liquidity and the credit health of the American consumer, are blinking yellow. So right now, they are choosing to ignore these historically useful leading indicators.

Jason Calacanis 20:16 Got it.

Chamath Palihapitiya 20:16 And the only reason that I can come up with to ignore it are political reasons.

Jason Calacanis 20:21 So, Freyberg, do you think there's a political beef going on here between the two parties and what do you think about subprime, uh, and maybe this being a lead indicator that maybe it's time for a cut, maybe we're gonna see people miss mortgage payments and car loans, et cetera?

David Sacks 20:40 I was just looking at the mortgage delinquency rates. They're pretty, uh, flat right now and that's, I think, because so many people did refinance when rates were low and there's a, a tremendous amount of mortgage balance with a, with a low rate outstanding. But remember, I think the Fed has a whole bunch of data that they're still gonna need to wait on. The CPI data for March was 2.4%. Their target is 2%. The next CPI report comes out, I think, next Tuesday, and so that's gonna be an important indicator. But I do think one other data point that is now going to be part of the calculus is, what do these trade deals look like? So this morning it was announced that there's a trade deal with the UK, and in that trade deal, there are lots of provisions that relate to parity and what is expected to provide better market access for American businesses into the UK. But there's also a really important piece of data there, which is that there is a 10% tariff rate for imports from the UK into the US. So this is the first time we're seeing a trade deal that actually gets announced and finalized through this whole tariff trade negotiation process that's been underway now for several weeks with all the hoopla and all the drama attached to it. And what we're seeing is that for one of our friendliest allies, for one of our best trade partners, we are keeping in place a 10% tariff rate. So if that holds with other trade deals and that becomes kind of a standard across the board as they get more of these trade deals done, perhaps with countries that are less friendly, with more onerous, with less regulatory parity in the trade relationship between the US and that country, maybe there's higher tariff rates. What that means ultimately is that there is now maybe a pretty sizable long-term revenue stream for the federal government that didn't exist before, which means that there's room to cut taxes, which means that this is all going to be part of the calculus of the Fed's decision on whether or not and why they would need to cut rates because this is gonna drive inflation, it's gonna drive GDP growth, it's gonna drive employment. And so I think that there is a pretty dynamic situation at play right now. It's not just that there's a static tax revenue base and a static federal spending model and then CPI and employment data that is gonna follow them.

Chamath Palihapitiya 23:06 You think Powell thinks that this Trump thing is gonna work so he's holding bullets in the chamber because he's worried about inflation?

David Sacks 23:13 I think they're gonna wait for data.

Jason Calacanis 23:14 I would agree with that.

Philippe Laffont 23:16 Yeah. Dave, in fact, uh, a couple things I was wondering your opinion on is, one, I was with this retailer, gigantic retailer in the US, and there's this sort of false narrative that when you have tariffs, like 100% of tariffs are gonna get passed through in pricing and therefore tariff is like a tax, right? That retailer told us that they think only about 50% of the tariff gets passed in pricing, so I, I sort of agree with you. There is going to be a net-net positive and that retailers have way to, uh, work things around and stuff like that. I would also say today, post this announcement, the market's very strong. And initially I was a little bit surprised because, um, we're taxing 10%, not only the most, uh, friendly country, but one where we actually have a surplus. So I was like, "Sh- if it's 10%-"

David Sacks 24:11 How crazy is that?

Philippe Laffont 24:12 "... when we have a surplus, what is it when we have a deficit?"

Chamath Palihapitiya 24:15 Yeah.

Philippe Laffont 24:15 But on the other hand, the market is speaking as we speak, and I also think that, uh, there were a lot of announcements that seemed to make it like, "Hey, we're gonna make a deal with China. We want China to do well, but we need to do well too." It seems to me that at some point maybe there'll be a bit more of a win-win versus such a acrimonious, and maybe that's why the market's reacting a little bit more positively.

Chamath Palihapitiya 24:40 By the way, that trade deal, we also eliminated the 2%...... surtax on big tech companies, and then Howard just said today that they're gonna announce a $10 billion order from Boeing on top of that as well.

David Sacks 24:57 So these are gonna-

Chamath Palihapitiya 24:57 But this is-

David Sacks 24:57 ... drive GDP, they're gonna drive employment. It's really hard to cut rates into a market where there is not yet priced in or not yet well-understood, but an expectation of a driver for GDP, driver for employment, and potentially an impact on inflation. It's really hard to go into that sort of an environment and cut.

Chamath Palihapitiya 25:16 I mean, if we're in a sustained period of 4 to 5% rates, I mean, we should talk about that at some point. But there is huge implications to the economy if this thing stays where it is, huge.

Jason Calacanis 25:28 Philippe, are you in the, uh, camp of 4D chess with these, uh, tariffs and these negotiations, or, you know, throw some stuff against the wall, react to it in real time? You know, he's shaking the snow globe, it's, it's chaos, et cetera? Where, where, where do you sit between those two opinions we've heard on this podcast over and over?

Philippe Laffont 25:46 You know when you ask a tech investor for, like, his opinion on macro?

Jason Calacanis 25:50 Yeah.

Philippe Laffont 25:50 Uh, this is the beginning of the end, right? I think I've, like, predicted-

Jason Calacanis 25:55 (laughs)

Philippe Laffont 25:55 I think I've, like, predicted, like, seven of the last three recessions, you know?

Jason Calacanis 25:59 Yeah. (laughs)

Chamath Palihapitiya 26:00 (laughs)

Philippe Laffont 26:00 So I, my track record is pretty weak.

Jason Calacanis 26:02 Well, let me ask you a different, then, question. How is this impacting the tech market, private companies that are thinking about going public, M&A? We saw DoorDash buy two companies this week. We've seen a bunch of companies file to go public. We've seen them pausing. Does this kind of uncertainty, which it seems like is causing the disconnect, right? You, you explained this disconnect, how people feel about the economy and then their behavior. Is that disconnect caused by the sort of communication that Chamath and I and other folks were saying, "Hey, needs to be improved here"? And it seems to be with this UK. If this had been the process from the start, we would have like, "Hey, we're gonna do one of these a week for 50 weeks, and, uh, you're gonna get this good news each week as, as we sort this out," that seems to me like something that would build confidence, as opposed to, "Hey, everybody's gonna go back and forth. You say 50, we're gonna go to 100, 50, tit for tat." So maybe talk about the impact this has for founders, startups-

Philippe Laffont 26:56 Yeah.

Jason Calacanis 26:56 ... executive teams.

Philippe Laffont 26:58 I think for tech guys, by and large, you know, a lot of the tech is in services. So that's out of the picture for now. Uh, but there's obviously going to be a lot of tariffs for semis and then for the assembling of the motherboards into computers. So those are the two key areas. And one of the difficulty is we have these sort of base tariffs, but we also have these sector tariffs, and we've had sector tariffs in cars, 25%. There's rumored to be sector tariffs in pharma that could come out next week, and there's also been potential, uh, sector tariffs, you know, in semis. So it's been pretty disruptive, and I don't really know how to think about it, and I think nobody knew, which is why the market just took a 25% peak to trough down. And then after that, we learned, well, the government is actually smarter. They're gonna... One of the things that I love to see is all these executives that get to come to also plead their case in Washington, and maybe that was never the case, you know, a few months ago. And there seems to at least be a feed- a feedback loop. Okay, we do something, we see what breaks, we listen, we readjust, and stuff like that. But to be honest, I don't really know how it's gonna play out, and I sort of was very conservative for a period of time, just waiting. And then to me, what happened last week with, uh, Microsoft saying that, like, AI had really picked up, that was, like, a really big deal, and I almost, like, uh, coined it in my own mind, like, tokens greater, greater than tariffs. And I think, like, one of the reason why the market's moving up to right now-

Chamath Palihapitiya 28:37 Just... Hold on, hold on. Just explain that just a little bit. What do you mean by that?

Jason Calacanis 28:39 Tokens over tariffs, yeah.

Philippe Laffont 28:41 Tokens, I don't know, I put the greater, greater sign. You know, tokens are much greater than tariffs, so I think-

Chamath Palihapitiya 28:46 Tokens, you mean AI tokens.

Philippe Laffont 28:47 AI tokens, yeah.

Chamath Palihapitiya 28:48 Yeah.

Philippe Laffont 28:48 So I, I sort of view tokens, you know, I, I don't really understand the... A- as well as, uh, Dave, for sure, you know, all the AI models and stuff like that, but I sort of view tokens to an AI model as like fuel to a car or electricity to a computer, right?

Chamath Palihapitiya 29:04 Mm-hmm.

Philippe Laffont 29:04 And Microsoft said that in their Q1, they processed 100 trillion tokens, 50 trillion alone in March. And so the tokens are really going basically vertical, which is probably because of these reasoning engines, which are much more sophisticated and require more compute power. And I think the market, it didn't... To, to... It's a bit unfair for Trump, but the market did not just go down because of tariffs. If you remember, it went down because people freaked out we're in an AI bubble, AI is not really working, what's the ROI on AI. That was maybe, I don't know, half, a third to a half of the problem. And I think what Microsoft said is, like, CapEx is going up, and everybody has a gigantic shortage of chips right now. That I know for sure, from all of our private companies, public companies, there's a shortage of chip, a shortage of compute power. And so, I think that's also maybe why the market's going up. And so for me, it was sort of a way... Emotionally, I got so drained with the tariffs and thinking about tariffs and having to think about something I don't really understand. And I feel now there's a chance when you look at the next year or two, at some point, tariffs goes away. Trump makes this big deal with, uh, deregulation, the tax breaks sort of cancel out the tariffs. We move on, and what are we left with? We're left with tokens. And I think the world of tokens, for me, I've been doing this for 35 years, it's maybe the most exciting trend and thing that I've seen. And all these people that say, "Oh, this is the end of American exceptionalism," I almost wanted to say, "No, you guys are wrong. This is the beginning of American exceptionalism 'cause we've got Wall Street, we've got Silicon Valley, and we still got a pretty good government that at least tries to get stuff done." So I'm pretty...

Jason Calacanis 30:52 ... excited by that.

David Sacks 30:54 I've been talking with my management team a lot about AI first principles, and we're actually doing an off-site in two weeks on this, because I've been following a lot of what the other CEOs have been doing and, uh, hearing stories. We had a great conversation with Sergey. He gave us two anecdotes of how he personally has used some of these tools to make management decisions, and his observation was managers are the first to go. And if you zoom out from that statement, and you zoom out from the comments you're making, Philippe, there's, I would say, like a once in a generational opportunity to select companies that are going to accelerate growth because of the leverage they're gonna create by adoption of these tools. Not tech companies in the traditional sense, but across the entire economy. And some of what we're seeing right now in the reformation of venture capitalists and me- and I know you're going to talk a little bit about Coatue here in a bit, but so much of the thesis is around traditional businesses being reinvented using AI. And as a result, it's not just th- of the few tech companies that are providing the fuel, but there are these fires that are gonna take off in all these different markets that we could sit and spend probably hours kind of, you know, extrapolating and theorizing on, that creates a real opportunity for incredible market value creation. And traditionally, it's like the market grows and the differentiation among the competitors is minimi- minimized once the market has matured, but for the first time ever, every mature market can be completely disrupted. And so, so if you're smart about selecting management teams and selecting companies, this seems to be an incredible opportunity to realize investment returns-

Jason Calacanis 32:38 Okay. So-

David Sacks 32:39 ... even in a mature equity market.

Jason Calacanis 32:40 ... let's move on to our next topic, which is obviously super related. Google was down 8% on Wednesday after some bad search

Jason Calacanis 32:47 data came out because the Justice Department, as everybody probably knows, is doing this antitrust lawsuit with Google. And the key part of that lawsuit is Google paying Apple 20 billion a year to be the default search engine on iPhones. Obviously, we all know iPhones have elite customers. Those are very, uh, precious searches from people with a lot of money because iPhones are expensive. Anyway, Eddy Cue, who's been with Apple for 35 years, he said, quote, "For the first time ever last month, our search volume actually went down." Quote, "That has never happened in 20 years. If you ask what's happening, it's because people are using ChatGPT, they're using Perplexity. I use it at times." He believes that AI search is gonna replace classic search like Google. Quote again, "There's enough money now, enough large players that I don't see how it doesn't happen." Bloomberg reported on Cue's comments at 11:00 AM. An hour later, Google was down $100 billion in market cap. It bounced back a little bit. Today, when we're taping this, uh, on Thursday, here's the statement from Google responding to Cue's comments. "We continue to see overall query growth in search that includes an increase in total queries coming from Apple's devices and platforms." Freeberg, is it time for Google to panic, Google shareholders to panic? We talked last week about making bold decisions about what is the default, and how might Google get out of this classic innovator's dilemma? What do you think?

David Sacks 34:14 We keep coming back to is search dead conversation. Everyone knows that the search, click, repeat paradigm is over, and there's a new model in what I would zoom out a little bit and say is kind of the difference in human-computer interaction for knowledge, information, and services. It may not be that I type something into a search box. It may be that I'm having a, a chat. That chat may happen in a chat window. It may happen via voice. It may happen on a screen. It may happen in an AirPod. We don't yet know where the consumer is going to go with this, but there's a lot of paradigm shifts underway. I will say Google has models that are, if not the best, competitive. So the underlying models, the underlying technology exists. They are certainly aware of the shift in the paradigm. And so the transition for Google doesn't need to happen overnight to a chat interface that looks like ChatGPT. It may be a standalone app. They have a standalone app, as Chamath has pointed out in the past. They don't do a great job promoting it. They don't do a great job integrating the chat interface into search or replacing search with the chat interface because remember, search ad revenue today is $200 billion and the cost to serve an AI query is order of magnitude higher than the cost to serve a search query. So flipping the search interface over to a chat interface overnight doesn't make sense, and they don't need to. They have the users, they have the models, they already have the product, so it's gonna be a slow kind of process of finding the optimal course for them to make the transition would be my guess on what they're doing. It's a question of at what point do you change the default on Google? Do you make it a slow one box, which is that answer section at the top of the search page, and you slowly get people used to that, and you lead them over to the chat interface? Or do you do it all at once? Or do you tell people, "Hey, go use the app instead of the search box"? So there's a lot that I think they're gonna discover, and if anything, this is an organization that is used to doing testing and then making incremental changes and then making big changes once they're, you know, kind of tested and proven.

Jason Calacanis 36:28 Chamath-

David Sacks 36:28 So I'm pretty positive on their ability to respond to the shift, if there is one underway.

Jason Calacanis 36:33 I guess two important data points, Chamath, that I'd like you to respond to. Search is only like 56% of Google's revenue right now. People forget they have Cloud, so they have diversified. It's not a one revenue stream company anymore. And then also these Google search results at the top of the page, they're dropping precipitously the number of clicks below it. So different studies, 15 to 35% of the clicks below the box are not get- you know, are dropping. So this is significant.... but it seems manageable. Where do you stand on it right now? Time to panic or, as Freeberg was saying before, hey, maybe it's a great opportunity for Google to add yet another product line, yet another revenue stream.

Chamath Palihapitiya 37:15 They definitely have the best models in many domains. I would say that the code gen models from Anthropic are really good, but in many other domains, including general information and chat, I think Gemini is exceptional. So what is the problem? The problem is that they were effectively at 99% share and now we were always just waiting for that shoe to drop, which is where they started to go from 99 to something less than 99. And the point is, now that it has happened, it is very easy for anybody to build a model that precisely calculates the economic value of every single basis point of share shift that happens, and what you saw was an initiation of that process this week. So what do you do? The problem is that this is not Google's problem. This is a consumer choice issue and they have chosen something different and whether we like it or not, and whether they like it or not, the reality is that ChatGPT is running away with it. And if you look at the growth and the share that OpenAI is seeing, it's quite an incredible thing. So what does one do? I think that instead of waiting for data, I think that you have to assume that you're going to go from 99% share to 75% in the next two years as an example, and you need to start asking yourself what will go wrong. And if you can ask yourself that question honestly, and red team that, then I think the conclusion you get to is you need to start very aggressively integrating Gemini as the front-facing window to Google Inc. But again, as I sort of said last week, that requires a combination of taste and courage. Otherwise, what will happen is if you're waiting for the data, you're just going to get caught off guard because Apple will do things and then make a press release months after the fact. OpenAI will announce a press release, Facebook will do something. And what that does is it destroys the morale of the company, of the brilliant product managers, of which there are many, and the brilliant engineers, of which there are many inside of Google. If you're sitting around waiting to react to some shit sandwich served up by your competitors, that is a terrible approach.

Jason Calacanis 39:46 Philippe, what are your thoughts here on Google? You obviously participate in public markets. Is it a buy right now? I mean, I don't want to give investment advice, but do you think the company has the talent, the temperament to make these hard decisions and, and to turn this around or avoid the iceberg? Uh, if the iceberg being ChatGPT and-

Chamath Palihapitiya 40:06 Yeah.

Jason Calacanis 40:06 ... people getting answers instead of links?

Philippe Laffont 40:09 Well, I think you guys have summarized the situation pretty well. I would just a- add just a couple small things. One is the market cap of Google is like 1.8 trillion and that of ChatGPT is, let's say 300. So Google is worth six ChatGPT. And is that the correct ratio into the future or not? The second one is, I was around sadly in the times of the Yellow Pages and I remember when the Yellow Pages, the way you go somewhere to bounce and go somewhere else, and basically these yellow links got replaced by the blue link and the Yellow Page companies went away. Now part of the reason they went away is they were very levered. Google has no leverage, sits on a lot of cash, and imagine what someone like Elon would do if he had to re-engineer Google. I think they have, um, you know, uh, it's- it's a much larger company, let's say than Twitter. So like the part that I'm wondering about, I haven't made an opinion on Google is like, hey, is this the next IBM? You're gonna stick around for a really, really long time but you're just not going to be like a company growing as fast as you used to and maybe there'll be little growth and you just sort of struggle ahead? Or can they completely re-engineer their business? And they do have two great businesses, Waymo and YouTube, and really cloud and all the cloud apps. So they have three great businesses and then they have this one search business, like you said, maybe it's 60% of the revenue, it's probably 85% of the profits because it's just so profitable and-

Chamath Palihapitiya 41:43 No, I would say it's a 110% of the profits.

Philippe Laffont 41:46 110, right?

Chamath Palihapitiya 41:47 Yeah.

Philippe Laffont 41:47 So you're right, because some of these others lose money. That's actually a good point. So, um, if you put that together, it's just a classic innovator's dilemma and imagine that they create a Gemini app and we start downloading the Gemini app. I would love to be the fly on the wall between the head of the Gemini app and then the head of like the search box and they're both fighting because one guy is stealing the business from the other and stuff like that. Personally, me, I found that these stocks, they're like a little bit too complicated for me and I think that sometimes in life you just got to say, "Hey, this is just tricky." There's like a lot of forces at work. But the one thing stepping out that I would think about is there was this concept of the Max Seven, and for the last two or three years everybody is like, "Oh you just need to own the Max Seven. Uh, it's really easy, I can do it on my own." And I think what AI is showing is that at a time of great change and like you guys said on the show, a couple of you, AI is sort of precipitating so many fast changes. To me it's a little bit like the end of the Max Seven. And what we should do is almost think like, hey, what is the next... Remember when the Max Seven used to be Fang and then Fang++ and nobody talks about Fang anymore?Uh, and now, I don't know, like, with the Max 7, the Sexy 6, uh, the Fabulous 5, uh, there's gonna be a new index that comes up. And I think we should think about, like, who's gonna be on the new index, which private companies, which public companies. And I think Google for sure has some struggles, but it's got a lot of advantages and a lot of cash-

Chamath Palihapitiya 43:24 You know, to your-

Philippe Laffont 43:25 ... so it's going to be-

Chamath Palihapitiya 43:25 ... to your, to your point though, to just to add one thing, which I, I love this framing. Here's another data point. If you were going to make the case that we need to go into harvest mode, right? And say, "We don't know the rate of change of the search business, so let's just have as much money on hand so that we have as much optionality." That's a very reasonable and fair strategy. You would probably not spend $75 billion a year of CapEx on making these models. The opposite is also true. If you're going to drain your cash at a rate of change that's greater than it needs to be, to the tune of an extra $75 billion a year, there's probably a case to be made, "Well, if we've made the cake, let's sell the cake." You know, "We've made the dog food, let's have the dogs eat the dog food." It's the in-the-middle strategy of both spending the money, but then stage-gating the product that is the worst outcome, in my opinion.

Philippe Laffont 44:24 I think they're right to invest. I find these companies that decide to harvest, you know, the cash cow and, uh, buy all their shares back, you know, it never really works. I think that the only chance that Google has to create an amazing company is you gotta take some risks. At the end of the day, the man in the arena, he who takes the risk usually gets the spoil, and they've got to invest in the future. It'll be interesting to see if their shareholders, you know, agree with that or not.

Chamath Palihapitiya 44:53 What do you do, J-Kahl? What do you think?

Jason Calacanis 44:56 Great question. You guys teed it up perfectly. I think they're going to cut a large number of employees, get people to return back to office and take this a little more seriously on a corporate level, 'cause you got that sense from Sergey who's in the office every day. And I use Gemini, and I have a sort of AI-first company where everybody's required to do their work on AI, two or three different, Claude, Gemini, Grok, et cetera. And what I've been noticing inside these products is they're very deeply integrated. I got surprised just the other day, I was asking it about a travel question and it referenced my G Calendar. I didn't know they could do that. Then, obviously you can use ch- uh, you can use Gemini inside of Google Docs now. They have four or five products right now that are one or two billion users per month. Obviously Chrome might get spun out, but you have YouTube, you have Google Docs, you have Android. They have such a data advantage and such a deep integration into people's lives because they use three or four services. I use YouTube TV, I use YouTube and have a subscription to that, YouTube Music. They have such integration. I think Google's gonna figure this out, and if they cut their team size down, the earnings are gonna go massively, uh, up. And they're spending $75 billion on infrastructure. I think it's gonna be...

Chamath Palihapitiya 46:16 Would you integrate these models more aggressively into, in front of the consumer or would you... is this the rate that makes the most sense in your mind?

Jason Calacanis 46:23 I think you mentioned, like, maybe go all in on certain other services. I think YouTube search is the place to go all in. Right now, when you do a YouTube search, it just gives you 10 links, right? It just gives you that rolling thing. You should be able to ask a question to YouTube and you should be able to ask questions to your calendar. You should be able to say, "Who have I met with over the last 10 years who I'm no longer in touch with, and what are they up to?" And it should do a Gemini search inside of Google Calendar. It's very light right now. And then if you did that on YouTube, "Hey, tell me everybody's opinion on CO2 and their strategy over the years and how it's changed," and you ask that on YouTube, with all their transcripts, they could make a super cut of all of that. This would train people, you know, at the point of pain in a very deep way without sacrificing Google search queries, you know, too aggressively. So there, there is... YouTube's such a secret weapon, you know?

Chamath Palihapitiya 47:12 I hear you. I would just remind the Google management team that very, very, very smart people like Philippe and others who control trillions of dollars-

Philippe Laffont 47:23 I wish.

Chamath Palihapitiya 47:25 ... well, collectively, are not making the decisions about today, but are taking the trail of breadcrumbs of what they see today and guesstimating what 18 to 24 months in the future looks like. And all I'm encouraging them to do is, I think that that data point from Eddie is the beginning of a stream of such data points. And I just encourage them to inoculate them from the morale hit that will come if they don't have an explicit aggressive strategy. And instead, if they become reactive to external data, it's really demoralizing.

Narrator 48:04 Hmm.

David Sacks 48:04 But what if, what if they're actually tracking the data and they're seeing their own sense of search queries driving clicks and then driving positive response to the AI-driven one box results that they show at the top?

Chamath Palihapitiya 48:21 Oh, I think that's exactly what they're seeing. But that does not-

David Sacks 48:23 And they're just making the, the, they're making the requisite kind of-

Chamath Palihapitiya 48:26 No, no, no, that's, that-

David Sacks 48:26 ... balancing decisions, right?

Chamath Palihapitiya 48:27 No, no, no. What I'm saying is that's absolutely what they're seeing, that the demonstrated strategy is emblematic of exactly that. It's the rationalization. My point is, there's something that you can't rationalize because you don't know until it's presented to you, which is, what is the other company doing? They don't have spies inside of OpenAI. They don't know what the OpenAI product strategy looks like. They only hear secondhand what the OpenAI growth looks like. And all I'm saying is, it's a bit of a sword of Damocles. At some point, the sword drops, you're not in control of it. And once you start to see a trend, that's the rationalization that I think puts companies in a very difficult and tricky strategic situation.It takes a lot of courage to say, "Oh my God." Like, it's, like... But Buffett said this. Like, Buffett has this very famous thing of just putting his CEOs on the spot and saying, "Stop telling me all these things that can go right. Let's go paint the death case. What can absolutely go wrong and bread team me the solution, and then justify for me why you haven't done it?" And all I'm saying is, if you start to think about like, for example, you saw OpenAI today. Fidji Simo, she's leaving Instacart, right? She's gonna go and be the CEO of apps inside of OpenAI. You're seeing a level of talent concentrate that I have not seen since I was at Facebook. There was nobody we couldn't get when we thought we were building a model that was totally orthogonal to Google. Now, it did not mean that Google diminished in any way, but it creates a different use case. In that example though, the social use case was very much non-cannibalistic to the blue links And to your point, David, if it turns out that question asking is not cannibalistic to search, Google will be fine.

Jason Calacanis 50:11 Right.

Chamath Palihapitiya 50:11 All I'm encouraging them to do is play the scenario where it is cannibalistic and figure out what to do.

Jason Calacanis 50:16 I think there's a chance that we're underestimating the power of Google's ad network right now. It's quite possible that knowing your queries in Gemini, knowing what you're doing in Calendar, knowing what you're watching on YouTube could lead to a stream of more target ads that do better and are more valuable. And so we've been seeing a number of companies, startups, you know, in the early stages, in year one startups, that are figuring out how to use your queries and what you're doing in AI to present to you search results. So imagine you're doing a Gemini search, Chamath and, or, Philippe, and on the side of it, it's giving you a rolling list of ads or offers that you might be more interested in. That could be a better advertising product than even search itself. Freeberg, your thoughts.

David Sacks 50:59 Well, let me ask all three of you a question, which is, since ChatGPT has come out, and Gemini and other tools like it, do you find that you're doing generally more stuff or less stuff?

Chamath Palihapitiya 51:14 I find that I am using search a lot less. I ask-

David Sacks 51:19 But, but the aggregate. Is your aggregate, like, usage of the internet to do things for yourself, for work, kind of are you getting more active?

Chamath Palihapitiya 51:29 Yeah, I've, I've... Yeah, I've learned how to ask things that I've always wanted to know but didn't even know were possible.

David Sacks 51:35 Right.

Chamath Palihapitiya 51:35 But all of that, to me, goes to OpenAI and to X. I use Grok-

David Sacks 51:38 Right, right. Tha- that's fine, but I'm just saying, like, like if you were to... 'Cause I'm, um, what I'm trying to do is paint the picture of where the denominator of "search queries" is going because if search queries is no longer-

Chamath Palihapitiya 51:49 I think that's the wrong way to think about this.

Jason Calacanis 51:50 No, I like your, I like your framing.

David Sacks 51:52 But I think-

Jason Calacanis 51:52 I'm doing five times as many queries and-

David Sacks 51:55 Right.

Jason Calacanis 51:55 ... I would say they're spread across a number of different platforms because-

David Sacks 51:59 Right.

Jason Calacanis 51:59 ... instead of asking humans to do work, I'm now doing it myself. You used to ask a human, "Hey, can you do this research for me?" And they would come back to you.

David Sacks 52:05 Or hire someone. Right.

Jason Calacanis 52:06 You would hire somebody or use a consultant. Now I'm doing it myself. So you're onto something that the total volume, the total pie could be five, 10 times bigger per person.

David Sacks 52:12 But this is where I think, like, if, if... Yeah, if, if the old paradigm is like measuring search queries and "market share" as a function of search queries, I don't know if I care about having 99% of that or if I'm actually better off having 80% of something that's now three times bigger-

Chamath Palihapitiya 52:29 Yes.

David Sacks 52:29 ... where there's so much more usage.

Philippe Laffont 52:31 I agree, but imagine you get, you lose 99% of one bucket, but you're only getting 10 or 20% of the new bucket.

Chamath Palihapitiya 52:38 Exactly.

David Sacks 52:38 That's the bad scenario. That's exactly right. That is the bad scenario.

Philippe Laffont 52:41 That's the issue.

Chamath Palihapitiya 52:42 Guys, that bucket is getting built right now, and there are nowheresville in that bucket. How are you gonna show up in 18 months and say, "Oh, that new bucket that's so shiny, pick me, pick me." This is why it's a strategic error.

David Sacks 52:54 Well, think about the U- Let's say you're running growth at Facebook, Chamath, and you guys have a new product you wanna launch. You've got a billion users. How do you get them to use that new product? 'Cause Google has a, a ChatGPT competitor. How do you get them to use that product?

Chamath Palihapitiya 53:08 Yeah. I walked through this last week, but I'll do it again, which is, I think that today, the part that I agree with you is this whole view on search is antiquated and it makes no sense. I think instead, what you need to think about is where are the inbound actions into the house that is Google, right? Google Inc. And you have to have a very simple way of deducing what is the value of that inbound action. And if you rank them, the inbound actions to the Google search bar are obviously way more valuable than the inbound actions in all these other apps. I would start in those places that are more bottom of the list on the money side, but high on the list in terms of intention and behavior, and I would redo the experience around Gemini. But that requires taste.

David Sacks 53:57 And cannibalization that you're, that you have to be willing to take the hit on.

Jason Calacanis 54:00 Which service do you think is number one, YouTube?

Chamath Palihapitiya 54:02 I think your idea, Jason, around YouTube is a very smart one because it's a juggernaut business. I also think Workspace, we use Workspace here every day, Gmail, Calendar. I think Workspace could be really interesting as well.

Jason Calacanis 54:16 Gmail is a great one, yeah.

Chamath Palihapitiya 54:17 Inside of Gmail. And it is gonna get better, like, there are smart people thinking about this. All I'm saying is that the market will now start to price this decay in.

Jason Calacanis 54:26 I'm long.

David Sacks 54:27 Well, Philippe, I wanna know your bucket of what are the most important companies that matter the most?

Philippe Laffont 54:32 Okay, I- I'll try, but I have to ask you guys a question before. Do you guys think that the two founders come back in a very forceful way into the company? I don't know exactly why, but one thing that I was wondering, Chamath, is you, you bring up a very important word, taste. Do you have to be a founder to be able to impose this sort of new taste and do you need sort of founder credibility at the junction at which Google is at? It seems like this is a big junction, right? This is the first time in their 20, 25-year history where I feel like, "Whoa, there's a real threat."... how do you do that without the founders?

Jason Calacanis 55:15 Yes.

Philippe Laffont 55:15 And on top of that, they're alive, you know. It's just they're not in the other company.

Jason Calacanis 55:18 Yes. Sergey, yes, Larry, no. Sergey's going to do it. I think he's building up... The reason we're seeing all the all-in events, the reason he's going to work every day is that he's building up his knowledge base here. And I don't want to speak for him, but I've seen him really engaged on this stuff, and the Gemini app is kick ass. And I've had long conversations with him about, like, little details in the Gemini app. He is super engaged. Like, I've had conversations with him about granular details of Google Local and YouTube searches and how they should be presented in the results in the Gemini app. He's into it. He is- But you're bringing up- ... into it. You're bringing up something, which I think is very important. When you're at a junction this important, who has the gravitas to come in and actually make a difficult change like this? I think, in general, it's the founders. And, you know, in fairness to Larry and Sergey, these are two brilliant, brilliant guys. They've done it once, and in fairness, they probably did it kind of a second time when they created Alphabet because now you have these other businesses that are pretty impressive. Now, they're just gonna have to do it a third time, but they're going to have to impose their will, and they're going to have to develop some very specific tastes. This is nothing against Sundar and the team, by the way. This is just to say that the only people that can come in and say, "Guys, we're gonna make a change that could have this negative impact to a $1.8 trillion company," are people that are gonna feel it the most. They will feel it more than anybody else, and so if they say that it should happen, they'll have the moral credibility to make it so. I love this question that you were just asked, Philippe. Go through

Jason Calacanis 56:48 your top 10 companies, why you love them.

David Sacks 56:50 Oh, no, what's the number? What's it... Not top 10. What's the number, Philippe? What are the companies that matter the most?

Philippe Laffont 56:55 Yeah. So I have a li- I've thought about that a lot. I'm not sure I've, you know, great answers, but the first one is, I keep defaulting to the number 25. I can't explain you why, but there are not 100 companies. But if you think there's only five, and all these money managers, you know, they have, like, five stocks that represent 80%, I feel the level of risk that you're taking is too high, and that one has to be... You know, I started with the hum- with the public markets. I would say most French people are not known to be particularly humble, but at least-

Jason Calacanis 57:32 (laughs)

Philippe Laffont 57:32 ... if you've been in the stock market as a French guy, you've been beaten up so bad.

Jason Calacanis 57:37 (laughs)

Philippe Laffont 57:37 I started January 1st, 2000, so imagine what my first three years looked at. I got reduced to, you know, ashes, just beaten up by the market. The, you know, we, we did reasonably well, uh, uh, because, uh, thank God, being a hedge fund, you know, you have different tools that you can do. And so I think you need to have a certain number of stocks. You need to know that some stuffs you get lucky, some stuffs you get unlucky, and some stuffs you get right, and some stuffs you get wrong. And then I think that there's a second phenomenon once you agree to the 25. You say, "Wait a minute, why are there no IPOs? Why are these private companies, amazing private companies, some of the best in the world, SpaceX, Stripe-

Jason Calacanis 58:24 Answer that question. Why?

Philippe Laffont 58:25 ... OpenAI.

Jason Calacanis 58:26 Why, in your mind?

Philippe Laffont 58:29 I think that the cost of being public is, uh, too difficult, one.

Jason Calacanis 58:36 What cost?

Philippe Laffont 58:36 I think-

Jason Calacanis 58:37 The, like, actual-

Philippe Laffont 58:39 The re-

Jason Calacanis 58:39 ... legal fees?

Philippe Laffont 58:39 ... the, the reputation, the regulatory.

Jason Calacanis 58:42 Uh.

Philippe Laffont 58:42 Like, you get busted, like, left and right by, uh, agencies. And, like, when's the last time that a public company... I think that, you know, during the last administration, something like someone told me, I don't know if it's true or not, but I love the f- I love the quote so much that I'm using it without checking if it's 100% true or not. Something like 35% of the S&P had an issue with a government agency in the last few years, right? When's the last time that you guys remember a private company that has an issue with a government agency? Like, I'm sure it happens, but, like, off the top of my mind, it seems like a fraction of that, right? And then I also think that the private markets have become so sophisticated that, in essence, like, our private markets, public markets that just trade three times a year. Like, uh, you know, these companies, they do these, uh, uh, rounds, you know, once or twice. They're becoming pretty sophisticated. They match buyers and sellers, and I think that's okay. And then the last piece, which I think that's a very bad piece for the four of us and all of us on this call and many of your, uh, listeners, is that there's such a view that, like, large companies are bad, and we gotta bust them, and we're not gonna let them do any M&A. And as a result of that, small companies no longer get bought by big ones. And for me, it's a disaster because if I fund small companies, but now you take away one of the best ways that I have to monetize my investment, why should I invest in risky private companies? I can just buy the public one. And so I'm really hoping that as part of this de- deregulatory move, and you guys and Sacks will have way more influence than we. But to convince people that, in my mind, the best way to create competition is to allow these large companies to fight against each other, and the battle between OpenAI and Google is the best way to do that, but not by telling Google not to buy something or-

Jason Calacanis 1:00:43 Agreed.

Philippe Laffont 1:00:43 ... telling OpenAI not to buy something.

Jason Calacanis 1:00:44 Let's double-click on that, Philippe. I think it's a super important point, the singles, the doubles in the industry. I've been harping about this on this program as well, so we're simpatico. What about a proposal where maybe the non-MAG 7, let's, let's pick a number, under a trillion market cap, under 750 billion, we let those companies buy and sell each other at a very vibrant pace? We saw ChatGPT buy a $3 billion company, I think, this past week in the, um, kind of, uh, coding space. Like I mentioned earlier in the program, DoorDash bought two companies. What if we said, "Hey, okay, we understand Google getting bigger, Apple getting bigger, Microsoft getting bigger-"

David Sacks 1:01:21 Why? What's the rationale for that?

Jason Calacanis 1:01:22 "... that could be anti-competitive."

David Sacks 1:01:23 How does- how does- how does-

Jason Calacanis 1:01:23 My rationale would be-

David Sacks 1:01:24 But how does size make a difference to whether or not someone should buy a company?

Jason Calacanis 1:01:27 Very simple, because they have such a market dominant position-

David Sacks 1:01:31 That's different in size.

Jason Calacanis 1:01:31 Let me just- hold on, let me finish my sentence. They have such a market dominant position when a company like, uh, Apple has, you know, half of the mobile phones, or Google has Chrome, Android, plus all these things, that they could shove that product for free down the throats of users, price dump it, which is illegal, and create less competition in the future. But if you said DoorDash and Lyft or, you know, Coinbase plus a stablecoin company, this would build the mag seven to the mag 70, and then you would have many more larger companies. What do- what do you think of this, Philippe?

David Sacks 1:02:09 I'll respond to that because I don't think that that makes any sense.

Jason Calacanis 1:02:13 Okay, go ahead. Okay, explain why.

David Sacks 1:02:13 And I think that the, the comments you're making about size shouldn't drive these decisions. The fact that Apple, for example, has a minority market share in operating systems on mobile phones. Remember, Android is the majority and it's a frag-

Jason Calacanis 1:02:28 That's no longer true in the US, by the way.

David Sacks 1:02:29 Right, not in the US, but globally.

Jason Calacanis 1:02:31 They have a majority in the US.

David Sacks 1:02:31 Right. And Apple comes along and says, "Hey, I want to buy a car company," or, "I want to buy something else," why should that affect consumers in any way whatsoever? It- the- the ultimate objective of antitrust authority is to prevent monopolistic practices that hurt consumers and hurt the market and take away options and choice and freedom in the market. But if companies want to make, um, orthogonal acquisitions, if companies want to continue to grow and become a, you know, a large holding company, why should we step in and say, "Oh, you're too big now"? Ultimately, Jason, you're- you could see that threshold very quickly becoming a slippery slope that leads to a general, like, anti-capitalist concept where people say, "Well, let's stop all companies from getting bigger than a billion," or, "Let's stop them all getting bigger than 100 million now." And that, that is a very slippery slope. Scale shouldn't matter. At the end of the day, protecting consumers from, um, monopolistic or antitrust practices should be the objective of these antitrust authorities.

Jason Calacanis 1:03:30 Yeah, I think my response to that would be, except in the case where the bundling, as we talked about in previous episodes, makes it so any of the large companies-

David Sacks 1:03:39 That can be assessed.

Jason Calacanis 1:03:40 Hold on.

David Sacks 1:03:40 Yeah.

Jason Calacanis 1:03:40 Let me finish my sentence again. In the case that a large company could kill all the competitors instantly by price dumping. So, you take something that people are paying for, you know, like say, uh, Robinhood or Coinbase, you- you know, Google buys Robinhood or Apple buys Coinbase and they just say, "Everything's free. We're going to make our money from our main business." Yes, it's better for consumers, but it's not as good for a competition and in the long term, then you would kill all the competitors and then they can do-

David Sacks 1:04:08 Great.

Jason Calacanis 1:04:08 ... unnatural acts. That would be the argument. I'm not saying it's a perfect argument.

David Sacks 1:04:10 So, that's a great argument-

Jason Calacanis 1:04:12 Yeah.

David Sacks 1:04:12 That's a great argument for what you're talking about. It is not a great argument for stopping companies above a threshold of- of market cap from doing stuff and companies below a threshold-

Jason Calacanis 1:04:19 I was also thinking-

David Sacks 1:04:20 ... 'cause a company below a threshold in market cap could have the same effect as what you're describing in a smaller market, and they could have this-

Jason Calacanis 1:04:26 Yeah, you have to- you have to be thoughtful about... You're 100% correct if they're in the same arena. So, Coinbase, Robinhood, and E*TRADE merging could cause the same effect, you're right. Philippe, what- what are your thoughts on just how to get the country out of this debate? Because big companies bad, no, we shouldn't let them do M- any M&A, the wrath of Lina Khan. Is there a- is there an off-ramp here? Can- can Trump just unilaterally kind of make this happen? What- what are your thoughts? Or should he?

Philippe Laffont 1:04:55 Oh, I think that, to me, one of the best part in being an investor at Venture Capital is when you have a really big idea and it works out, it takes care of a lot of sins, you know? There's a little aspect, like, would you like to play the lottery? If the lottery was capped, like, hey, if you win the lottery, you can't win more than $30 million. 30 million's insane amount of money, but I- I read that there's some lottery guys who make one billion and two billion.

Jason Calacanis 1:05:24 Yeah.

Philippe Laffont 1:05:24 And the reason why people are willing to bet so much and most people are willing to lose is they all think that they're gonna have this one ticket that's worth a billion. And I think when you reduce the incentive, the financial incentive of... And I agree with Dave, like, success should be rewarded as much as possible, but if you've done something wrong, then use the e- you know, the existing, uh, laws to define what success is. I don't think you can cap, because once you start capping and then what happens if the stock market goes down? Do you then have to just recap? So, but I- I agree with you, you bring up an interesting point, which is in these bundles, like Amazon Prime bundle, Apple bundle, there's a Costco bundle, right? We seem to be living in this world of bundles where the stock market is willing to pay 40, 50 times earnings just for the, you know, the membership fee. As long as whatever you do on the side, uh, you basically make no money. Like Costco, I think, makes 100% of its money more or less on-

Jason Calacanis 1:06:25 That's correct. Yeah.

Philippe Laffont 1:06:25 ... the membership fee and trades for 50, 60 times earnings. There is a limit to, like, how big the bundle is before you start, uh, dumping. So, I don't think I'm saying anything super interesting. I just hope that you don't cap the upside, because that's what enables all of us to fund these new companies. The reason why all of you guys and me, we're willing to fund these companies knowing that s- many of them are going to fail is the hope that you get the next OpenAI.

Jason Calacanis 1:06:54 The power law. Yeah, it's well said, the power law. Chamath, I think maybe a good time to maybe talk about private markets and liquidity

Jason Calacanis 1:07:00 in VC, yeah?

Chamath Palihapitiya 1:07:02 I mean, it's just so hard. It's hard to make money. And if you view making money as some derogatory thing, and you put a bunch of impediments in the way, the downstream impact is interesting ways to make money will be out of fashion and simple ways of making money will be the only things that people do. The problem is that society doesn't move forward.... if all you do are simple things. You need people who are willing to put risk capital to buy these lottery tickets, and if you marginalize the upside, you're just gonna have exactly that, a stagnant society of marginal things that doesn't move along. And unless people fundamentally embrace that idea, we're gonna lose.

Jason Calacanis 1:07:52 We being America.

David Sacks 1:07:53 Yeah.

Chamath Palihapitiya 1:07:53 Yeah, if you look, for example, in the last five-year period, in China or Canada, where both of them, two totally different political regimes but they a- both had the same thing happened, which is the, the, the amount of investment capital that went into both of those countries fell off of a cliff for two totally separate reasons. What is interesting is going to be what is the downstream impact of that in 10 and 15 and 20 years? And you can look historically back, and we know what this looks like, which is countries stagnate in the absence of investment in risk capital. So you will become a marginalized also-ran country. And, you know, not to slag Europe, but part of what Europe got wrong was that compact didn't exist. Too many administrators, too many hall monitors, not enough ability to put risk capital to work and actually get gigantic outcomes. So the most important thing we can do on that dimension is to figure out how to have less regulation, have these companies fight it out, and create the incentives for, for these smaller businesses to be bought and/or to go public.

Jason Calacanis 1:09:05 So let's, uh, back this up with some data here. Nick, pull up the chart on exits. This is an important one for people to see. We've had, since the wrath of Luna Kong, last four years under Biden, you know, you had this 2021 spike of IPOs, peak ZIRP, a lot of inventory, a lot of risk capital had been put to work for 10 years, and after that 2021 spike, things have been flat-lined and companies are preferring to stay private, and now we have venture capital constricting in terms of new funds being done and people are making larger funds to do later and later stage investments and...

Chamath Palihapitiya 1:09:39 Jason-

Jason Calacanis 1:09:40 Yeah.

Chamath Palihapitiya 1:09:40 ... it's constricting at the absolute worst time because what Philippe said before is we're in the midst, in the early phases of an entirely new economy that's going absolutely parabolic, but the people that are supposed to accelerate that innovation and make these companies come to life are gonna run out of gas, because if they don't return money to their limited partners, where are they gonna get the incremental capital from?

Jason Calacanis 1:10:04 I, yeah, it's th- uh, retail investors and sovereign wealth funds outside the US seem to be-

David Sacks 1:10:08 But doesn't, doesn't-

Jason Calacanis 1:10:08 ... the answer to that question.

David Sacks 1:10:09 ... this lead to a normalized market, Philippe and Chamath? So ultimately, shouldn't the exit volume define the amount of capital that LPs should invest in this asset class to get an out- a return that compensates them for the illiquidity relative to public markets with the same kind of risk levels? At the end of the day, it is what it is, and you're gonna see a reduction in venture dollars, and that's just the market normalizing. The eco- the economy-

Jason Calacanis 1:10:36 The way-

David Sacks 1:10:36 ... only grows and only innovates at a certain pace is, maybe is what the data shows...

Chamath Palihapitiya 1:10:41 I think the way that I think about this as an LP, and maybe Philippe can talk about this as a GP, but as an LP, when I think about putting capital into different funds, I have a base return in my mind which is, I want, after taxes, net of everything, to generate about 10% a year. That's where my risk of ruin is basically zero, it compounds to infinity. I like the profile of my return on my assets. How do I get to 10%? Well, sometimes when I'm holding short term stuff, I'm only generating four or 5% in paper, so then I have to go out on the risk curve. So I talk to a hedge fund. They're gonna give me 12 or 13% net maybe in some cases. I try to understand their risk, but I can only get so much working, so then I have to go further out on the risk curve. Then I talk to some private credit and private equity guys who tell me, "Yes, I can give you mid-teens returns." Then I do the analysis on that and I think, "Okay, I'll give you some money," but they are gonna lock me up for five or six years. It's still not enough to get to a blended rate of return of 10%. So then I go yet further out on the risk curve. I call my friends at Sequoia and all these other places, and when you talk to the venture investors, the problem is you are so illiquid for so long that the rates of return need to be in the mid to high 20s net to me. But when you look at the data of what's possible, they actually look like a three and four year hedge fund. And part of the reason is because of this strangulation of illiquidity that's caused artificially by administrations, by regulations, and by agencies like the FTC. The question is, if they didn't exist or if the regulations were a lot smaller, what would the upside return be? It's probably 500 to 1,000 basis points higher.

Jason Calacanis 1:12:33 Much higher. 100%, yeah.

Chamath Palihapitiya 1:12:35 But I think at current course and speed, with the lack of IPOs and with the lack of M&A, you can't justify that asset class on its own, in my opinion, unless you think about it as, like, something that you're doing almost philanthropically.

David Sacks 1:12:51 Unless capital comes out and then prices come down and then re- mult- return multiples go up.

Jason Calacanis 1:12:56 Let me put some numbers on this. Here is the second chart, annual IPOs, and just give you some, you know, broad strokes here of how amazing 2021 was for a lot of firms. Rivian went out at 66 billion, Affirm at 24 billions, Qualtrics, 25 billion, Robinhood, which I was involved in, one of the first investors, 30 billion, Duolingo, five billion, Toast, et cetera. Roblox, 42 billion, Squarespace. And then, you had all this M&A. Square up- uh, bought Afterpay for 29 billion, Zoom acquired Five9 for 15 billion, Mailchimp, remember that one, 12 billion, Microsoft and Nuance, the, um, spoken, uh, the, um, uh, language-

David Sacks 1:13:32 Jason, do you know, do you know what-

Jason Calacanis 1:13:33 ... models, 20 billion. Do you know what's-

David Sacks 1:13:34 It was unbelievable.

Chamath Palihapitiya 1:13:35 ... the distribution?

David Sacks 1:13:35 Wow.

Chamath Palihapitiya 1:13:35 Do you know what the distribution of these IPOs were by method?... SPAC versus direct listing versus traditional IPO?

Jason Calacanis 1:13:42 I don't have that here. We'd have to do it not just on the names, but also on the amount, uh, distributed. Yeah, that's a good question.

Philippe Laffont 1:13:48 But you know what-

Chamath Palihapitiya 1:13:48 Yeah, I'll look into it.

Philippe Laffont 1:13:48 ... I look at that data?

Chamath Palihapitiya 1:13:50 Hmm.

Philippe Laffont 1:13:50 What, what, what I look at is j- if you just bring it back for one second, is ever since, you know, the '20 and '21-

Chamath Palihapitiya 1:13:58 Hmm.

Philippe Laffont 1:13:58 ... which were very high-

Chamath Palihapitiya 1:14:01 Yeah.

Philippe Laffont 1:14:01 ... if you look at '22, '23, '24, and now the '25, I'm like, "How is this that it's worse than '04, '05, '06 that were-

Chamath Palihapitiya 1:14:11 (laughs)

Philippe Laffont 1:14:11 ... normal years?"

Chamath Palihapitiya 1:14:12 Yeah.

Philippe Laffont 1:14:12 How is this worse than '13 and '14-

Jason Calacanis 1:14:14 Lina Khan.

Philippe Laffont 1:14:15 ... and '15? Yeah. And that's exactly right.

Jason Calacanis 1:14:17 She scared the hell out of people. She scared people.

Philippe Laffont 1:14:19 Correct.

Jason Calacanis 1:14:20 M&A, I've talked to M&A people, Philippe, and they have said, "It's not even worth bringing it to the board."

Philippe Laffont 1:14:26 Correct. If she doesn't-

Jason Calacanis 1:14:27 It's not even worth the discussion.

Philippe Laffont 1:14:28 She can't connect the dots. You know, she's like, "I want people to not, you know, play the lottery anymore. I don't care for them." She doesn't understand that our system is based on this risk-taking. And so, listen, uh-

Chamath Palihapitiya 1:14:43 I think it's almost, I think it's also-

Philippe Laffont 1:14:45 ... I think this might change.

Chamath Palihapitiya 1:14:46 ... it's also-

Jason Calacanis 1:14:46 Yeah.

Chamath Palihapitiya 1:14:46 ... worse than that. I think that they probably look at, like, Adobe Figma, and they look at the cap table, and they probably just make a judgment that, "Hey, I don't want these people to be billionaires. Yuck, I hate these people." But they don't understand, to your point, the waterfall effect of not returning capital to all kinds of other investors who are in-

Philippe Laffont 1:15:05 Of course.

Chamath Palihapitiya 1:15:05 ... the business of taking risks.

Philippe Laffont 1:15:06 Is this like collateral damage? You know, one of the things I feel none of these people understand so well is, like, all the collateral damage. You think you're moving in one direction, and all these dominoes sort of fall around you.

Chamath Palihapitiya 1:15:20 Exactly.

Jason Calacanis 1:15:21 Well, the second and third order impacts this cascade. You know, it's Ford Foundation, it's Harvard, it's California Retirement. Those are the people who are the, gonna be the beneficiaries. And the third thing, 'cause I've been talking to a lot of geographies in the Middle East, Japan, Australia, Singapore, et cetera, Asia, they all wanna recreate what we have here. Well, what we've created here in Silicon Valley and in America is these diasporas that start when a company like Google goes public, and then those people go create Facebook or go work at Facebook like Sheryl Sandberg did, and they accelerate the growth there. And then those people become angel investors. They become LPs. This incredible flywheel was cooking. I mean, it was so smooth, and now we've literally stuck a stick in it, and the car's-

Philippe Laffont 1:16:07 And now Jason-

Jason Calacanis 1:16:08 ... flipped over. And you, you don't have the downstream effect of Canva in Australia, that y- I don't know if you know that company. It's done-

Philippe Laffont 1:16:15 Oh.

Jason Calacanis 1:16:15 ... incredibly well.

Chamath Palihapitiya 1:16:16 Phenomenal business.

Philippe Laffont 1:16:16 Amazing. We're actually-

Jason Calacanis 1:16:17 They were... Oh, you are involved? Yeah.

Philippe Laffont 1:16:19 We're, we're, we're involved. But sorry, just one thing I would add, because it makes what you said so much more powerful. On top of that, when these people die, most of them gave all their money away to foundation, which is-

Jason Calacanis 1:16:29 Yes.

Philippe Laffont 1:16:29 ... something very different between the US and Europe. In Europe, a lot of the wealth, and in many other countries outside-

Jason Calacanis 1:16:36 Hmm.

Philippe Laffont 1:16:37 ... of the Europe, the wealth basically continues for generations. In America, these people build companies, create new companies, invest in new companies, coach new companies, mentor new companies, and when they die, all that money goes to foundation that continue to promote and do some of the work that governments were doing. Finally, how great is it that some foundations are competing with the government to decide what needs to be done? And so-

Jason Calacanis 1:17:02 As opposed to a larger government, right? And, and-

Philippe Laffont 1:17:04 Exactly.

Jason Calacanis 1:17:04 ... so that ultimately serves the Doge mission. Atlassian and those incredible founders who did Jira, et cetera, bought other companies, they wound up being the seed investors in Blackbird, the, the venture firm in Australia that did Canva, and they were the investors in Canva. Both of those companies are creating this incredible flood of entrepreneurship in Australia, and we're breaking that in America. Australia copied that playbook. I wanna know about the new fund you're doing, Philippe, and why. Maybe you could explain to people, I guess this is one of these, uh, what- what do they call it? Closed or open-end funds, and, and they operate-

Philippe Laffont 1:17:39 Yeah.

Jason Calacanis 1:17:39 ... differently than venture ones.

Chamath Palihapitiya 1:17:40 And also the seeding. You, you seeded it in a very unique way with a couple of very unique family offices.

Philippe Laffont 1:17:45 Yes.

Jason Calacanis 1:17:45 Yeah, unpack that.

Philippe Laffont 1:17:46 You guys are nice to ask, and couple of you have tweeted some nice things