GPT-4o launches, Glue demo, Ohalo breakthrough, Druck's Argentina bet, did Google kill Perplexity?

1. 0:00 – 7:38

   Bestie Intros: Recapping Phil Hellmuth's birthday weekend

   1. JCJason Calacanis0:00

      All right, everybody. Welcome to your favorite podcast and the world's number one podcast, the All-In Podcast. It's episode 1,790. Oh, wait. That's just how it feels. (laughs) Welcome to episode 1,790. Uh, with me today, of course, is your sultan of science. I don't know if that's a movie background or it's just his favorite vegetables. What's going on there? What's the crop?

   2. NANarrator0:22

      That's AI generated.

   3. JCJason Calacanis0:23

      It's AI generated crop? Okay, great.

   4. NANarrator0:25

      I'm trying AI backgrounds. I'm gonna try it out for a while with different crops.

   5. JCJason Calacanis0:28

      All right. Your fans are gonna be crushed that you're not doing deep movie polls. With us, of course, man about town, DC, new products being launched, David Sacks, the rain man. Yeah, how you doing, buddy?

   6. DSDavid Sacks0:41

      Good. Good. Yeah, good week. Lots going on.

   7. JCJason Calacanis0:44

      Yeah.

   8. NANarrator0:44

      (laughs)

   9. JCJason Calacanis0:44

      Yeah, definitely a good week. Chamath Palihapitiya, chairman dictator. He puts the in chairman in dictator.

   10. CPChamath Palihapitiya0:52

       I would like to take this opportunity-

   11. JCJason Calacanis0:55

       Oh.

   12. CPChamath Palihapitiya0:55

       ... to wish my child a happy birthday.

   13. JCJason Calacanis1:01

       Aw.

   14. CPChamath Palihapitiya1:01

       I absolutely (beep) love you.

   15. JCJason Calacanis1:03

       Aw.

   16. DSDavid Sacks1:04

       Well, now the rest of us look like (beep)

   17. JCJason Calacanis1:06

       Yeah, great.

   18. DSDavid Sacks1:07

       I've never done that before. (laughs)

   19. JCJason Calacanis1:08

       Sacks, in your desk-

   20. CPChamath Palihapitiya1:10

       (laughs)

   21. DSDavid Sacks1:10

       (laughs)

   22. JCJason Calacanis1:10

       In your desk is a piece of paper with your children's names and their birthdays. Do you wanna pull it out and see?

   23. DSDavid Sacks1:14

       I've got three birthdays a year and I've never done one.

   24. CPChamath Palihapitiya1:17

       (laughs)

   25. JCJason Calacanis1:17

       (laughs)

   26. NANarrator1:17

       (upbeat music) Don't let your winners ride.

   27. JCJason Calacanis1:22

       Rain man, David Sacks.

   28. NANarrator1:25

       I'm going all in. And I said- We open sourced it to the fans and they've just gone crazy with it.

   29. CPChamath Palihapitiya1:30

       Love you, man.

   30. JCJason Calacanis1:31

       Queen of quinoa.
2. 7:38 – 29:40

   OpenAI launches GPT-4o: better, faster, cheaper

   1. JCJason Calacanis7:38

      Big week. The AI industrial complex is dominating our docket here. Apologies to Biden, Ukraine, and Nikki Haley, but we gotta go AI right now. OpenAI launched ChatGPT 4o, 4.0 Monday, three days after Samwise came on All-In as a programming note, and we'll go to Friedberg about this. We probably made a bit of a strategical or tactical error in not postponing his apparent, appearance. In fairness, uh, Friedberg, Samwise did tell us originally he was coming on to talk about those things, but then it got pushed back. Anything you wanna- Well- ... add to that as a programming note?

   2. DFDavid Friedberg8:14

      ... yeah, let me-

   3. JCJason Calacanis8:15

      'Cause people are wondering.

   4. DFDavid Friedberg8:16

      What happened, I've been talking with Sam for a while.

   5. JCJason Calacanis8:20

      A year.

   6. DFDavid Friedberg8:21

      ... about coming on the show, and every time I see him, I'm, we're like, "Hey, you should come on the show." He's like, "I wanna come on the show." "Okay, let's find a date."

   7. JCJason Calacanis8:27

      Yes.

   8. DFDavid Friedberg8:27

      We never got a date that worked. I saw him in March and he said, "Hey, I wanna come on the show." I said, "Okay, well, come on, let me know when it works." And then a couple of weeks later, he's like, "What about this date in May?" And I'm like, "Yeah, that's, that's fine. We can make that work." He's like, "Well, I've got a big announcement we're gonna be doing." And I was like, "Perfect. Come on the show. That, that, that sounds great." And then, the, um, the night before, he asked me, he told me, he texts me, he's like, "Hey, we're actually not gonna have this announcement happen tomorrow. It's gonna be delayed." He didn't tell me how long. And I'm like, "Well, is it Ch- is it GPT5?" He's like, "No, it's not GPT5." And I was like, "Okay, well, you know, come on the show anyway," 'cause he didn't tell me when he's doing the announcement or when it's being pushed here. So it didn't seem like that big a deal, and I thought we were just gonna be able to have a good chat anyway. So, it's really unfortunate, I think, the fact that the announcement happened two days after and he had to stay quiet about it during our interview. But, um, that's the story. I think in the future, if someone says they've got a big announcement to do, we should probably push them, uh, if they, if they ask in a way or something like that.

   9. JCJason Calacanis9:22

      So lesson learned. Lesson learned. Don't beat yourself up.

   10. DFDavid Friedberg9:24

       But, uh, but I don't think we're gonna be doing a lot of these interviews anyway. I think people clearly don't love him and it's better for us to just kinda hang out and talk.

   11. JCJason Calacanis9:30

       Yeah.

   12. DFDavid Friedberg9:30

       And we ............................ Sacks: Well, I think, I think if we had just gotten Sam on the day after the launch of GPT4 Omni as opposed to, what was it, three days before- Yeah.

   13. JCJason Calacanis9:41

       ... he could have talked much more freely about it, and it would have been interesting.

   14. DFDavid Friedberg9:44

       Yeah. Yeah. It was supposed to happen same day, so it's unfortunate this all worked out this way anyway.

   15. JCJason Calacanis9:47

       The other little trick is to say, "You can tell us under embargo," but my understanding is they were still doing the videos o- over the weekend. So I think those videos and stuff, they were still figuring them out. And so yeah, lesson learned. In terms of the interviews on the show, just to recap for people, we've done a dozen. Half of them have been presidential candidates. Sometimes they break out, sometimes they don't. Well, we follow our interest and our passion here on the pod. It's gotta be interesting for us too. So if we think this person is gonna be interesting, we do it. And yeah, we understand you miss a news subject, but yeah, it is what it is.

   16. CPChamath Palihapitiya10:21

       And to your point, a lot of the people that come on, and increasingly, a lot of people ask to come on, because they know we're not journalists. And so for all of those folks that expect us to be journalists, that's not what we are. We're for entrepreneurs, we're for business people, we're for friends, we're for technologists, we're for curious people, we're for poker players. But we're not for journalists. And so we're gonna ask whatever we feel like asking. Sometimes those things will touch a chord because it's what you wanted to have asked. And sometimes we won't go to a place, whether we didn't have time to or whether we forgot or whether we chose not to. And I think it's important to have that disclaimer. Like, we have day jobs, and this is what we do to coalesce a bunch of information in the way that we're thinking about the world. So, we are not journalists, so please don't have that expectation.

   17. DFDavid Friedberg11:13

       Right. And I think, and I think what that means is that if the guest doesn't wanna talk about something, we're not gonna start peppering him with gotcha questions and things like that. I appeared at a conference a couple of days ago, uh, to promote Glue, which we'll get to. And the first half of the conversation was, like, a normal conversation about what we were launching. And then the second half was basically the reporter peppering me with fastball questions. Which is fine. I knew what I was signing up for.

   18. JCJason Calacanis11:38

       Terrible.

   19. DFDavid Friedberg11:38

       It's a totally different style-

   20. JCJason Calacanis11:39

       Yeah.

   21. DFDavid Friedberg11:39

       ... it's a totally different style than coming on the pod and just having a normal conversation. But it's not really our job to make somebody open up if they don't wanna talk. Uh, I mean-

   22. JCJason Calacanis11:48

       What was the spiciest question, Sacks? Like, what was the fastball? Anything come close to your head? Just ...

   23. DFDavid Friedberg11:53

       No, I mean, it's not worth really getting into. You can watch it if on, um...

   24. JCJason Calacanis11:56

       Oh, okay. Yeah, I was just curious, like ...

   25. DFDavid Friedberg11:57

       Look, I kind of like sometimes when reporters pitch me fastballs because, yeah, you can strike out or you can hit it out of the park-

   26. JCJason Calacanis12:03

       Yeah.

   27. DFDavid Friedberg12:03

       ... when they do that.

   28. JCJason Calacanis12:04

       That's an important part here. I, I think, you know, as a former editor and chief journalist myself-... I sometimes like to ask, I would say, a challenging question in a respectful way. I did that, uh, for example, with Vaik, you know, just clarifying his thoughts on trans and gay rights. Wasn't disrespectful, was thoughtful. Would you consider it spicy or hardcore? I don't think it was hardcore. He likes to talk about it.

   29. CPChamath Palihapitiya12:28

       But that's because... No, but that's because you asked it from a position of curiosity. You weren't trying to catch the guy.

   30. JCJason Calacanis12:33

       No.
3. 29:40 – 40:12

   Sacks demos Glue: How AI unlocked his Slack killer

   1. JCJason Calacanis29:40

      it on the screen. Sacks, you've actually been dancing along this line. Last night I was using your new Slack killer, or coexister, I'm not sure. It feels like a Slack killer to me because I'm moving my company to it on over the weekend, we're moving to Glue.

   2. DSDavid Sacks29:52

      Nice.

   3. JCJason Calacanis29:52

      And you and I were doing some very, I think I may need to wet my beak on this one.

   4. DSDavid Sacks29:58

      (laughs) We want you to wet your beak.

   5. JCJason Calacanis29:59

      It feels like 100 bagger to me. Uh, I'm in. I need to slide in. (laughs)

   6. DSDavid Sacks30:03

      (laughs) It is a Slack killer. That's the way we're thinking about it.

   7. JCJason Calacanis30:05

      It feels killer-esque because-

   8. CPChamath Palihapitiya30:06

      J Cal, J Cal, can you do that again in Christopher Walken voice please?

   9. JCJason Calacanis30:10

      I need to wet my beak.

   10. CPChamath Palihapitiya30:12

       (laughs)

   11. JCJason Calacanis30:12

       Feels like 100X.

   12. CPChamath Palihapitiya30:14

       (laughs)

   13. JCJason Calacanis30:14

       Sliding 500. Wow.

   14. GUGuest30:17

       ... Sacks, tell me about product decisions. Where does the AI end and your product begin?

   15. DSDavid Sacks30:25

       Yeah. Well, it's a good point. I mean, I think where the AI ends, we want to use the most powerful AI models possible and we want to focus on enterprise chat. So you could think of us as, for sure, a Slack healer or a Slack competitor. It's just that Slack wasn't built for the AI era, Glue is AI native. What does that mean? No channels. You know, I showed this to Chamath, the first thing he said is, "You had me at no channels," right? People are so sick of channels, you have to keep up with all these hundreds and hundreds of channels. And the real problem with channels is there's one thread in a channel that you want to see. In order to see it, you have to join the whole channel and now you're getting all this noise.

   16. GUGuest31:01

       Yeah.

   17. DSDavid Sacks31:01

       People just want the threads. So if you look at what's the chat model inside of ChatGPT, it's just threads, right? You create a topic-based thread in ChatGPT, the AI comes up with a name for it, puts it in the sidebar, and then if you want to talk about something else, you create a new chat. That's exactly the way that Glue works, it's just multi-player. You just put the groups and individuals you want on the thread. Let me just show you real quick. Here's my, uh, Glue here and you can see that in the sidebar I've got all the threads that I've been involved in. And like I said, you can address them to multiple people or groups. And then you've got the chat here. Now, we've also fully integrated AI. And so Nick, who's our producer, just in this thread said, "@GlueAI What countries does Sacks talk about most in episodes?" Episodes is a group we created to be the repository of all of the transcripts of our episodes. And so Glue did a search and it said David Sacks frequently discusses Ukraine-

   18. GUGuest31:57

       What?

   19. DSDavid Sacks31:57

       ... the most. Yeah.

   20. GUGuest31:59

       Really?

   21. DSDavid Sacks31:59

       So then, so then Nick said, "Be more specific about Sacks' stance on Ukraine-Russia war."

   22. GUGuest32:04

       Oh boy. (laughs)

   23. DSDavid Sacks32:05

       And-

   24. GUGuest32:06

       It's gonna, it's gonna overload the server.

   25. DSDavid Sacks32:07

       And basically... Well, here, it said here, "David Sacks has articulated a nuanced and critical perspective on the Ukraine-Russia war across various episodes of the All-In Pod. Here are some key points encapsulating his stance." And it, like, nailed it. It talked about prevention, uh, through diplomacy, opposition to NATO expansion, humanitarian concerns, skepticism of military intervention, peace deal proposal. You know, I'll, I'll copy and paste this onto Twitter X later today. But the point is, it, like, nailed it across all these different episodes. And then, this is a feature of Glue, it provided sources. So it cites where it got all the information from. So imagine, you know, we're, we're doing this for the All-In Pod, but you could imagine that instead of it being transcripts of a podcast, it could be your work documents. You now have, in your main chat, the ability just to ask, "Hey, @GlueAI, remind me where we left that project." Or, "Tell me who the expert is on this subject matter." Or, "Who's contributed the most to this project?" I've actually figured out, using Glue AI, who's contributed the most deal flow at Craft. It's pretty amazing. Now let me show you, like-

   26. GUGuest33:11

       Uh-oh.

   27. DSDavid Sacks33:11

       ... some of the sources.

   28. CPChamath Palihapitiya33:12

       What's the answer? What, yeah, what's the answer?

   29. GUGuest33:13

       Uh-oh.

   30. DSDavid Sacks33:14

       I'm not gonna say here.
4. 40:12 – 1:01:35

   Friedberg walks through his major breakthrough at Ohalo

   1. JCJason Calacanis40:12

      on the program. I got breaking news coming in. Friedberg, your life's work. Saks did his, uh, product review. Now it's your turn, Friedberg. We got breaking news coming in.

   2. DFDavid Friedberg40:23

      I did promise you that when Ohalo decides to come out of stealth and explains what we've done and what we're doing, I would do it here on The All In Pod first, before the, uh-

   3. JCJason Calacanis40:35

      An All In exclusive.

   4. DFDavid Friedberg40:36

      All In exclusive. So basically, by the time this pod airs, we're gonna be announcing what Ohalo's been developing for the past five years and has had an incredible breakthrough in, which is basically a new technology in agriculture, and we call it boosted breeding. I'm gonna take a couple minutes just to talk through what we discovered or invented at Ohalo and why it's important and the kind of significant implications for it. But basically, five years ago, we had this theory that we could change how plants reproduce, and in doing so, we would be able to allow plants to pass 100% of their genes to their offspring rather than just half their genes to their offspring. And if we could do that, then all the genes from the mother and all the genes from the father would combine in the offspring rather than just half the genes from the mother and half the genes from the father. And this would radically transform crop yield and improve the health and the size of the plants, which could have a huge impact on agriculture because yield, the size of the plants, ultimately drives productivity per acre, revenue for farmers, cost of food, calorie production, sustainability, et cetera. So this image just shows generally how reproduction works. You've got two parents. You get a random selection of half of the DNA from the mother and a random selection of half the DNA from the father. So you never know which half you're gonna get from the mother or which half you're gonna get from the father. That's why when people have kids, every kid looks different. And then those two halves come together and they form the offspring. So every time a new child is born, every time a plant has offspring, you end up with different genetics.And this is the problem with plant breeding. Let's say that you have a bunch of genes in one plant that are disease-resistant and a bunch of genes in the other plant that are drought-resistant, and you wanna try and get them together. Today, the way we do that in agriculture is we spend decades trying to do plant breeding, where we try and find all these different crosses, find the ones that have the good genes, find the other ones that have the good genes, and try and keep combining them. And it can take forever, and it may never happen that you can get all the good genes together in one plant to make it both disease-resistant and drought-resistant. So what we did is we came up with this theory that we could actually change the genetics of the parent plants. We would apply some proteins to the plants, and those proteins would switch off the reproductive circuits that cause the plants to split its genes. And as a result, the parent plants give 100% of their DNA to their offspring. So the offspring have double the DNA of either parent. You get all the genes from the mother, all the genes from the father. And finally, after years of toiling away at trying to get this thing to work and all these experiments and all these approaches, we finally got it to work. And we started collecting data on it, and the data is ridiculous. Like, the yield on some of these plants goes up by 50 to 100% or more. Just to give you a sense, like, in the- the corn seed industry, breeders that are breeding corn are spending three billion dollars a year on breeding, and they're getting maybe one and a half percent yield gain per year. With our system, we- we are seeing 50 to 100% jump in the size of these plants. It's pretty incredible. Here's an example. This is a little weed that we, that you do experiments with in agriculture called Arabidopsis, so it's really easy to work with. And you can see that what we have on the top are those two parents, A and B, and then we applied our boosted technology to them and combined them, and we ended up with that offspring called boosted AB. So you can see that that plant on the right's much bigger, it's got bigger leaves, it's healthier-looking-

   5. DSDavid Sacks44:14

      Right.

   6. DFDavid Friedberg44:14

      ... et cetera.

   7. DSDavid Sacks44:15

      Free-

   8. DFDavid Friedberg44:15

      Yeah.

   9. DSDavid Sacks44:15

      Can I ask you a question? Does that mean-

   10. DFDavid Friedberg44:16

       Yeah.

   11. DSDavid Sacks44:17

       ... that the boosted one has twice the number of chromosomes as A and B?

   12. DFDavid Friedberg44:21

       Exactly right.

   13. DSDavid Sacks44:22

       So is that like a new species then?

   14. DFDavid Friedberg44:25

       Yeah, so, um, it's what's called-

   15. DSDavid Sacks44:26

       How does it survive with twice the number of chromosomes?

   16. DFDavid Friedberg44:29

       Yeah, it's ca- it's called polyploidy. So we actually see this happen from time to time in nature. For example, humans have two sets of chromosomes, right? So does corn, so do many other species. Somewhere along the evolutionary history, wheat doubled and then doubled again, and you end up actually in wheat having six sets of chromosomes. Wheat is what's called a hexaploid. Potatoes are a tetraploid. They have four sets of chromosomes. And strawberries are an octaploid, they have eight. And some plants have as many as 24 sets of chromosomes. So certain plant species have this really weird thing that might happen from time to time in evolution where they double their- their DNA naturally. And so what we've effectively done is just kind of applied a protein to- to make it happen and bring the correct two plants together when we make it happen. And so it's-

   17. DSDavid Sacks45:16

       So this could only happen for a plant, right? This could never happen with an animal?

   18. DFDavid Friedberg45:20

       It wouldn't h- it wouldn't work in animals. It works in plants.

   19. DSDavid Sacks45:22

       Okay.

   20. DFDavid Friedberg45:23

       And one way you can think about plant genetics is all the genes are sort of like tools in a toolbox. The more tools you give the plant, the more it is, i- it has available to it to survive in any given second, to deal with drought or hot weather or cold weather, et cetera. And so every given second, the more tools or the more genes the plant has that are beneficial, the more likely it is to keep growing and keep growing. And that plays out over the lifetime of the plant with bigger pla- bigger leaves and bigger, you know, grows taller. But more importantly, if you look at the bottom, the seeds get bigger. And in most crops what we're harvesting is the seed. That's true in, you know, corn and many other crops. And so seeing over a 40% increase in seed in this little weed was a really big deal. But then we did it in potato, and potato is a crazy result. Potato is the third-largest source of calories on earth. And so we took two potatoes that you see here in the middle, AB and CD. We applied our boosted technology to it, to each of them, and put them together, and you end up with this potato ABCD. That's the boosted potato. And as you can see, these were all planted on the same date, and the boosted potato is much bigger than all the other potatoes here, including a market variety that we show on the far right. That's what's typically grown in the field. Now, here's what's most important. When you look under the ground and you harvest the potatoes, you can see that that AB potato only had 33 grams, CD had nine grams. So each parent had 33 and nine grams potato. But the boosted offspring had 682 grams of potato. The yield gain was insane.

   21. DSDavid Sacks46:51

       Whoa.

   22. DFDavid Friedberg46:51

       And so you could see this being obviously hugely beneficial for humanity, you know, potatoes being the third-largest source of calories. Indian potato farmers are growing one acre of potato. In India, they eat potato two meals a day. In Africa, potato is a food staple. So around the world, we've had a really tough time breeding potatoes and improving the yield. With our system, we've seen incredible yield gains in potato almost overnight. And the other key se-

   23. DSDavid Sacks47:17

       Wait, how big are those potatoes?

   24. DFDavid Friedberg47:18

       Those are normal-sized potatoes that you see there. Those are like, you know, table potatoes. Basically, that looks like a russet potato right there. That's like a-

   25. DSDavid Sacks47:25

       Right.

   26. DFDavid Friedberg47:25

       ... normal-sized russet potato.

   27. GUGuest47:25

       I can tell you got-

   28. DSDavid Sacks47:26

       But it started as like a little-

   29. GUGuest47:28

       ... you got something there.

   30. DSDavid Sacks47:28

       It started as like a little creamer potato basically, and you blew it up into a russet potato. Is that right?
5. 1:01:35 – 1:13:54

   Stanley Druckenmiller bets on Argentina and Javier Milei: strategy, roadmap for the US

   1. JCJason Calacanis1:01:35

      All right. Stanley Druckenmiller has got a new boyfriend. Druckenmiller's got a boyfriend and his name is Javier, and they've eloped to Argentina. Druckenmiller professed his love like Tom Cruise on Oprah's couch in a CNBC interview this week. "The only free market," quote, "leader in the world right now bizarrely is in Argentina of all places." He cut social security 35% after he came to office. They've gone from a primary deficit of like 4 or 5% to a 3% surplus. They've taken a massive hit in GDP, basically a depression for a quarter, and his approval rating has not gone down. Druckenmiller has explained how he invested in Argentina after seeing Milei's speech at Davos, which we covered. Here's a 30-second clip. Play the clip, Nick.

   2. SDStanley Druckenmiller1:02:24

      By the way, do you wanna hear how I invest in Argentina? It's a funny story. I wasn't at Davos, but I saw the speech in Davos and it was about one o'clock in the afternoon in my office. I dialed up Perplexity and I said, "Give me the five most liquid ADRs in Argentina."

   3. NANarrator1:02:40

      In Argentina.

   4. SDStanley Druckenmiller1:02:41

      It gave me enough of a description that I followed the old Soros rule, invest and then investigate. I bought all of them. We did some work on them. I increased my positions. So far it's been great, but we'll see.

   5. JCJason Calacanis1:02:54

      Yeah, that's quite interesting. He, um ... Quick note, you hear Druckenmiller mention ADRs. For those of you who don't know, and I was one of them, they stand for American Depository Receipts. Basically a global stock offered on a US exchange to simplify things for investors. Yeah, I mean, he didn't sign a prenup here. He just went all in and he bought the stock, Chamath, and then he's gonna figure it out later. Tell us w- your thoughts on this love affair, this bromance.

   6. CPChamath Palihapitiya1:03:22

      There's a great clip of Milei. He goes on this talk show in Argentina and the talk show host, she's just so excited and greets him and (laughs) then they start making out. Have you guys seen this part?

   7. JCJason Calacanis1:03:34

      What? (laughs)

   8. CPChamath Palihapitiya1:03:34

      They're just like full on-

   9. JCJason Calacanis1:03:35

      This guy is out of control.

   10. CPChamath Palihapitiya1:03:36

       ... full on French kissing each other. It's hilarious. Yeah, I mean, like, Soros has been very famous for this invest and investigate thing. It's a, it's like a smart strategy for very, very liquid public market investors that have the curiosity that he does. I mean, I don't have much of a reaction to that. I think that the, the thing with Argentina that's worth taking away is when you've spent decades casting about and misallocating capital and running your economy into the ground, the formula for fixing it is exactly the same. You cut entitlements and you reinvigorate the economy. And so, the thing we need to take away is if we don't get our together, that's probably what we're gonna have to do.

   11. JCJason Calacanis1:04:22

       Sacks, the influence of Milei on American politics, will there be any? It seems like he has paralleled what Elon did at Twitter, Facebook, uh, and, and Zuck did at Facebook. Do you think that this, you know, experiment he's doing down there of just cutting staff, cutting departments will ever make its way into American politics?

   12. DSDavid Sacks1:04:47

       Probably not. I mean, not until we're forced to. But what Milei did, he comes in and they've got a huge budget deficit and they've got runaway inflation and they're debasing their currency. And just practically overnight, he just slashes government spending to the point where he has a government surplus. And then as soon as he gets credibility with the markets, that allows him to reduce interest rates, inflation goes away, and people start investing in the country.

   13. JCJason Calacanis1:05:10

       Magic.

   14. DSDavid Sacks1:05:11

       It's magic, but it's, it's just-

   15. JCJason Calacanis1:05:11

       So there is a path.

   16. DSDavid Sacks1:05:12

       ... it's obvious. Listen, I mean, you can't run deficits forever. You can't accumulate debt forever. It's just like a household. If your spending exceeds your income, eventually you gotta pay it back or you go broke.

   17. JCJason Calacanis1:05:28

       Hmm.

   18. DSDavid Sacks1:05:28

       And the only reason we haven't gone broke or experienced hyperinflation is because we're the world's reserve currency, so there's just a lot of room for debasement. And there's not a ready alternative yet. I mean, everyone's trying to figure out what the alternative will be. So, we've been able to accumulate more and more debt, but it's, it's reaching a point where it's unsustainable. And what we've already seen is that the feds had to jack up interest rates from very low, practically nothing to five and a half percent. And that has a real cost on people's wellbeing because now your cost of getting a mortgage goes way up. I mean, mortgage rates are over, what, seven and a half percent now?

   19. JCJason Calacanis1:06:03

       Yeah, six, seven percent depending on how much net worth and your credit rating. Yeah.

   20. DSDavid Sacks1:06:08

       Right. And so, it's much harder to get a mortgage now. It's harder to make a car payment if you need to borrow to buy a car. And if you have personal debt, the interest rate's gonna be higher. The inflation rate actually doesn't take into account any of those things. Remember Larry Summers did that study where he said the real inflation rate would be 18% or would have peaked at 18% if you included cost of borrowing. That's why people don't feel as well off as the unemployment rate would normally suggest. So, people are hit really hard when interest rates go up in terms of big purchases they need to make with debt. And then of course, it's really bad for the investment environment because...... when interest rates are really high, that creates a higher hurdle rate and people don't wanna invest in risk assets.

   21. JCJason Calacanis1:06:56

       Yeah.

   22. DSDavid Sacks1:06:56

       And so eventually, the pace of innovation will go down. And Druckenmiller made this point. In his next set of comments he said that, "Treasury is still acting like we're in a depression. It's interesting because I've studied the depression and you had a private sector crippled with debt, basically with no new ideas, so interventionist policies were called for and were effective." He said, "The private sector could not be more different today than it was in the Great Depression. The balance sheets are fine, they're healthy. And have you ever seen more innovation ideas that the private sector could take advantage of like blockchain, like AI?" He says, "All the government needs to do is get out of the way and let them innovate. Instead, they've spent and spent and spent, and my new fear now is that spending and the resulting interest rates on the debt that's been created are gonna crowd out some of the innovation that otherwise would have taken place." I completely endorse Druckenmiller's view of Bidenomics and actually, I mean, this is what I said way back in 2021.

   23. JCJason Calacanis1:07:50

       Victory lap, here we go.

   24. DSDavid Sacks1:07:51

       (laughs)

   25. JCJason Calacanis1:07:52

       David Sacks victory lap, we need a little graphic for that.

   26. DSDavid Sacks1:07:55

       Druckenmiller used the word Bidenomics and said, "I give these guys an F because they're, they're still printing money and spending money like we're in a depression even though we're in a rip-roaring economy." And when they started doing this back in 2021, you know, I tweeted, "Bidenomics equals pumping trillions of dollars of stimulus into a rip-roaring economy." I'm not gonna pretend like I know what's gonna happen next, but never tried this before. What happened next was live inflation, and that jacked up interest rates. According to even Keynesian economics, the reason why you have deficit spending is because you're in a recession or a depression, and so you use the government to stimulate and balance things out. You don't do-

   27. JCJason Calacanis1:08:29

       Smooth it out.

   28. DSDavid Sacks1:08:29

       ... deficit-

   29. JCJason Calacanis1:08:29

       Yeah.

   30. DSDavid Sacks1:08:29

       You don't do deficit spending when the economy is already doing well. So this spending, there's no reason for it.

Episode duration: 1:41:13