All-In PodcastInside the White House Tech Dinner, Weak Jobs Report, Tariffs Court Challenge, Google Wins Antitrust
EVERY SPOKEN WORD
130 min read · 26,209 words- 0:00 – 0:52
Bestie intros
- JCJason Calacanis
All right, Sachs. How you doing, brother? Wait, wait. What's this? Why are you wearing a tie?
- DSDavid Sacks
I'm in DC today, so it's a, it's a government day.
- JCJason Calacanis
Ah, so you suited up with the ties. You suited up with the ties. Well, maybe I'll join you. Maybe I'll join you. Oh, look. Oh, look. What is this box I just got? Oh, that's from my guy, Tom. Oh, just for J-Cal? Mr. Jason Calacanis. Let's see what's in the box here. Oh, what's going on here?
- DSDavid Sacks
Tom Ford sent you something.
- JCJason Calacanis
Oh, Tom sent me a nice tie. Maybe I'll go all blue.
- DSDavid Sacks
Oh, wow.
- JCJason Calacanis
Oh. (laughs)
- DSDavid Sacks
I, uh, I heard that Moose ate your invitation to the White House.
- JCJason Calacanis
He did. (laughs) He did, that little prick.
- DSDavid Sacks
So I'm sorry about that.
- JCJason Calacanis
(laughs)
- CPChamath Palihapitiya
That little prick.
- DFDavid Friedberg
What's going on?
- DSDavid Sacks
Let your winners ride.
- CPChamath Palihapitiya
Rain Man, David Sa-
- DFDavid Friedberg
What's going on?
- DSDavid Sacks
And I said we open source it to the fans and they've just gone crazy with it.
- CPChamath Palihapitiya
Love you guys. Queen of quinoa.
- DFDavid Friedberg
What's going on?
- 0:52 – 28:39
Behind the scenes of the White House Tech Dinner!
- DFDavid Friedberg
- JCJason Calacanis
All right, everybody. Welcome back to the number one podcast in the universe, in the universe. It's been proven time and time again... Oh, fuck this. I'm not putting the tie on.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
Ugh, because it's just... It's enough already. I, I... It's Friday. We, we moved the show to Friday. Sorry you're getting this on Saturday. We could do-
- DSDavid Sacks
This is why you can't come to the White House. You can't-
- JCJason Calacanis
Yeah, I just said-
- DSDavid Sacks
... figure out how to tie.
- JCJason Calacanis
Yeah, well, maybe you could fucking show me how to do this next time I'm in town.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
I've gotta practice with you, to go in the mirror. You could... That'd be great bit, you behind me showing me how to do a tie. (laughs) We didn't have ties in Brooklyn. What do you want me to do? All right, well, it was an eventful week. Some of our besties, some, not all, were invited, apparently, to a, uh, a little soiree at the White House with the President, Sachs, and Chamath. Here's a photo. Some pretty good seating arrangement here. It looks like Zuckerberg got the, uh, pole position on the right hand of the Father, followed by Saxy-Poo and Chamath and Amodei, sitting right across from Sam Altman and Tim Cook. What a crowd. What a crowd. What was the, um, what was the, uh, impetus for this dinner, Sachs? Tell us.
- DSDavid Sacks
Well, this was a tech dinner at the White House. I think it originally started with a group that Chamath organized in Silicon Valley, and they were kind of the core nucleus of this. And then more and more people just wanted to come and try to get in, and the President-
- JCJason Calacanis
Hm.
- DSDavid Sacks
... invited some of the top tech leaders, and pretty soon it turned into the room that you saw there. I mean, it's really pretty amazing, President Trump's ability to convene all these people. You normally don't get these people in a room together. Many of them are competitors. And it's remarkable. You pretty much had, I'd say, like, maybe half the tech industry was there.
- JCJason Calacanis
Oof, by market cap, certainly.
- DSDavid Sacks
By market cap, for sure.
- JCJason Calacanis
Yeah. And, uh, Chamath, you obviously were involved here, and you got a pretty good seat. Any, uh, great inside stories? Any inside baseball? What did they serve, by the way? I'm curious. What gets served at a dinner like this?
- CPChamath Palihapitiya
That was a very elegant menu. And they, they try to keep it light so that it's not overwhelming, which I think-
- JCJason Calacanis
Hm.
- CPChamath Palihapitiya
... can get in the way. So it was like a-
- JCJason Calacanis
So no prime rib, right?
- CPChamath Palihapitiya
It was a burrata salad, and then there was a filet, and then a nice raspberry dessert.
- JCJason Calacanis
Okay.
- CPChamath Palihapitiya
Here's what I'll tell you. Sachs said it well. What was incredible for me, just to frankly be in the room, felt very surreal. You're seeing the leaders of the most important companies in the world sitting together, and I just felt like there was a sense of alignment and cooperation, and that was really cool. I think none of those folks have to really show up anywhere that they don't have to. I think they're at a place in their career and the importance of the businesses that they run. But the fact that the President can convene them, I think says a lot about him and the agenda. And then they, to a one, were incredibly supportive of what he has done and clearing the way and allowing them to build their businesses with a lot more clarity. It was just very clear, the juxtaposition of what it was like and the difficulty under Biden versus what it was now. And you saw some very truly hard-cast liberals who have now completely embraced President Trump, folks like Tim Cook, folks like Bill Gates, and I think that that's an incredible testament to him and his agenda. And then the second thing, which is more personal, is I was so proud of Sachs. Every single one of these guys, and you're talking like the titans of titans, they took a moment to say that he was just doing an incredible job and the President was really proud of... It was like, as a brother, it's like you're seeing your brother just get completely...
- JCJason Calacanis
Hm.
- CPChamath Palihapitiya
It was, it was great. So, that was really special.
- JCJason Calacanis
Friedberg, any, any take on this? I, I noticed you didn't make it. You didn't make the cut. My invite got eaten by Moose, obviously, as we heard earlier.
- DSDavid Sacks
(laughs)
- JCJason Calacanis
But, uh, I thought you-
- CPChamath Palihapitiya
Well-
- JCJason Calacanis
... for sure would get a seat. What happened, Friedberg? No seat for you?
- 28:39 – 42:44
Tariff showdown headed to the Supreme Court
- DSDavid Sacks
- JCJason Calacanis
All right, perfect segue. We got lots to talk about in terms of the economy. And, uh, first story here, Trump's tariffs got overturned in court. Federal appeals court ruled seven-four that Trump exceeded his authority when it comes to the Emergency Economic Powers Act. Okay, we'll get into the details here. Historically, Congress was in charge of tariffs, but under an emergency, a national emergency, the president can get involved with tariffs, and they cited the 47th administration fentanyl crisis at the borders, Mexico, Canada, China, et cetera, and, uh, the trade deficits. Well, the White House got sued by a group representing small businesses. In May, two federal courts ruled that he wrongfully, uh, i- i- invoked the IEEPA, and, uh, the White House appealed that. They've now lost, and Trump's tariffs will remain in effect until October 14th, allowing the Supreme Court to appeal this. These tariffs have been tremendously unpopular in the business sector, uh, I think maybe 70%, 80% of business leaders in a recent survey, Sachs said th- that they don't... they're not crazy about them, but they have, on the other side, generated over $150 billion in revenue in a couple of short months, so they could generate trillions of dollars in the next decade according to estimates. I guess the question I have for you, Sachs, is you guys are moving, uh, at, at the White House there, in this administration, the executive branch, at startup speed, moving fast and break things is something we talk about doing in our industry. And, uh, is this just the natural extension of that? The president is doing a lot of aggressive things and sometimes they're gonna be allowed, sometimes they're not. What's your take?
- DSDavid Sacks
Well, I'm not concerned about the fate of tariffs at the Supreme Court, even though it's probably a coin flip whether the Supreme Court's gonna allow the tariffs under IEEPA.But there are five different laws under which the president has the authority to impose these tariffs. So, there's a chart here that we can throw up on the screen. There's Section 232, there's Section 201, Section 301, Section 122, Section 338. There are at least five different bases for the president's authority to impose tariffs. So at the end of the day, I think it's actually quite unlikely that the Supreme Court's gonna force a change in tariff policy, and I don't think the Supreme Court sees it as this urgent matter that requires a, a quick resolution. So, I'm not particularly worried about it. In terms of the popularity of the tariffs, my guess is that they're not gonna be reversed in the future by a future president, because I think they actually are quite popular with the country, with workers. Among the business elite, it's more mixed. I'll grant you that. But if you change the way you ask the question from, "Are you in favor of these tariffs?" to, "Are you in favor of raising four trillion in revenue over the next decade through tariffs to fund a tax cut like we had in the Big Beautiful Bill," then that might change people's perception of it. So, that's really the question is, is how do you want to raise revenue for the government? And between Big Beautiful Bill and the tariffs, what you see is a substitution from taxing Americans to taxing foreign companies, unless those foreign companies then make a big investment in America. So look, there's no great way to extract revenue from the private sector. All taxation is, is unfortunate and undesirable, and be better if we didn't have to tax so much. But the reality is, I think that if you have a choice between taxing American people or imposing tariffs, I think tariffs may be the better way to do it. And I just wanna note that the CBO has now increased their projection of what tariffs will raise to four trillion over the next decade. So, this-
- JCJason Calacanis
It's 400 billion a year. It's pretty significant.
- DSDavid Sacks
Right. And i- initially, it started as a lower number, and it completely pays for the one Big Beautiful Bill.
- JCJason Calacanis
Chamath, here is the chart tar- Trump's tariffs were meant to help manufacturers. Do manufacturing firms think they're helping? Has your business been impacted by higher tariffs this year? And, uh, here, negative impact, 72% of manufacturers, 3.7% think it helped, and, uh, 17% said no impact, 7% don't know yet. Your thoughts on tariffs? They're obviously unpopular with people in retail, manufacturing, and those businesses, but as Ax points out, hey, maybe the American people like them and they like the idea of a new revenue stream. What are your thoughts, Chamath?
- CPChamath Palihapitiya
I think that the tariffs, on balance, are a pretty smart master stroke of strategy. I think that w- we did not understand what the impact of tariffs would be, except for hypothetical econ wonk talk. And so, that hypothetical econ wonk talk basically said that tariffs were always going to be a disaster, and if you asked them, "Well, what is the actual practical data that you would point to?" they didn't have any. It was just more hypotheses. But what is the practical data now? I think that the United States is going to book probably close to half a trillion of, of incremental revenue. It's actually forced a stabilization in the dollar, which I think that people were always very concerned with. What's gonna happen to the dollar complex? Everybody always screams, like with a... like their hair is on fire. But the dollar complex has stabilized, I think because of tariffs. So, there's been some real positives. And what Sachs says is right, which is whoever is president over the next, you know, 5, 10, 15, 20, 30 years, there'll be some Democrats, there'll be some Republicans. It's gonna be very hard to justify why you would undo this now, because this source of revenue is going to be an incredibly important one.
- DSDavid Sacks
Well, and also, it's not just the fact that the revenue is very important. You raise a great point, which is the U.S. government's gonna become dependent on that revenue, but also, just workers. I think the tariffs are very popular with blue-collar workers-
- CPChamath Palihapitiya
Well, so here's what I-
- DSDavid Sacks
Certainly, the autoworkers really like it.
- CPChamath Palihapitiya
Well, here's what I was going to... This ch- the, the pie chart that you showed is not accurate. And the reason it's not accurate is that the investment cases that you would underwrite because of tariffs and the Big Beautiful Bill haven't happened. So, I'll give you an example. I am a person that started a business that is building a factory to make batteries, in my specific example, in Michigan, so to de-lever away from China for the battery supply chain. And what I will tell you, Jason, is after the Big Beautiful Bill and because of tariffs, it is much easier now for me to underwrite. Why? Because I have 100% depreciation across all my CapEx. It's a complete change around the IRR of these projects. So before, where I would have to raise billions of dollars from outsiders, I can subsidize a lot more of it internally because I can actually underwrite to a better gain because the, the tax savings are so meaningful. Same thing for this data center that I'm building in Arizona. So, in all of these cases, I think that, A, you have this uptick in revenue because of tariffs on the short term, and B, the important thing is to redo this pie chart in probably a year. Like, for example, our groundbreaking in Michigan will be in July of next year for that factory. It'll be online two years after that. The real story, Jason, of all of this will be really known in that period. But right now, what I'll tell you is the underwriting case for putting a ton of money into the United States has changed to the positive because of these tariffs.
- JCJason Calacanis
Because that 100% depri- depreciation. That's huge.
- CPChamath Palihapitiya
Oh. It's a, it's a huge deal.
- JCJason Calacanis
Yeah, whether you're buying a plane.
- CPChamath Palihapitiya
Huge deal. Mm-hmm.
- JCJason Calacanis
Yum yum. All in, uh, aviation. Freidberg, "Here's your polymarket. Will tariffs generate greater than 250 billion?" It's, uh, peaked at, like, 30%. It's come back down to five. Most people are betting, so this could be a case of free money if people wanna go get it on polymarket.... 'cause it has a pretty good chance of hitting that, but perhaps the-
- DFDavid Friedberg
Well, the number, the number I said, Jason, is like a yearly run rate. So technically-
- JCJason Calacanis
Sure.
- DFDavid Friedberg
... if you, if you just look at the calendar 25, you, you only get a stub of eight months because it started April 1st.
- JCJason Calacanis
Yeah. Eight months, 50K a month, 50, uh, billion a month, you get to 400 billion, so they should be able, I actually think they're gonna hit that bogey, but Freeberg, the reports from people who have been impacted by tariffs, obviously these could become inflationary, but the people who are being impacted said they've been eating them to date, but they're not gonna be able to eat them forever, so it could become inflationary. What are your thoughts on the tariff kerfluffle here and the, and the legal battle over them, as well as the impact it might have on inflation, which is something we do not want to see come back? And we have been teetering just under that 3% number, which then puts the Fed obviously in difficult position with their mandate to get to two. Freeberg?
- CPChamath Palihapitiya
I'll address the legal kerfuffle point, which I think is a good one because I do think that the great debate that's gonna happen from this presidency and will likely shape the next set of presidencies will be the right for presidents to declare emergencies to move forward their legislative agenda. And arguably, the tariff institution by many members of Congress should have gone through a Congressional process. In the meeting I did with Rand Paul this week, which has now been posted, he talked about the challenge that they have had with Democratic Presidents, Biden and prior to that, using emergency authorization vested to them under the National Emergencies Act, which is a 1976 statutory authority, to take action and then in order for the emergency powers to be turned off, Congress actually has to vote, and they can only do so after 30 days. And when Congress makes that vote, the president can veto their vote. So the president can then say, send it back. So then they have to get a two-thirds supermajority to get it to pass. So it creates a system whereby the president can have this emergency authorization to progress much of their legislative agenda under the guise of emergency powers, which, you know, for many people, they would say is not the right way to do it. So Senator Paul and others have proposed bills, for example, that the president has to get any emergency power reauthorized after 30 days, and then it can only be a maximum of 90 days without Congress enacting a, a, a renewal, and so it requires actual Congressional action to continue the authority of that emergency power. Depending on what the Supreme Court does or doesn't do, I think it is gonna catalyze a legislative push and the Republicans are likely not going to embrace it this presidency or this term because President Trump is in office. But I think the conversation that some, you know, uh, out of the box Republicans like Senator Paul and others are saying is, "Well, what's gonna happen next time? What's gonna happen when there's a Democrat president and we don't like what the-"
- JCJason Calacanis
Yeah. President AOC is gonna take, uh, emergency powers-
- CPChamath Palihapitiya
... what they're pushing for.
- JCJason Calacanis
... to do something you might not like.
- CPChamath Palihapitiya
So, uh, yeah.
- JCJason Calacanis
Right? Is this your point?
- CPChamath Palihapitiya
Yeah. And so as it relates to both the AIPA of 1977, which is the act that this case is about, but also the National Emergencies Act of 1976, should they go back and pass a new law that basically forces the president to have to get Congressional approval for any emergency to last longer than 30 days? So I do think that's gonna be the big debate that's gonna come out of this. As it relates to the tariff revenue, I am most worried about the fact that we use the tariff revenue, as I said before, to offset spending, and basically keep a baseline of spending without actually getting ourselves to that deficit target. Right now, we are going to vaporize and create debt of $2 trillion this fiscal year. So we're using the, the tariff revenue under the CBO scoring to basically say, "Hey, we can do these tax cuts because it's offset." But the goal shouldn't be to offset. The goal should be to get cuts to actually reduce the deficit. And so that's the biggest concern I have with respect to the tariffs long term is it's now a new revenue source that we don't actually treat as incremental to reduce deficit. We just use it as a way to introduce new spending or continue spending.
- JCJason Calacanis
Sachs, just to, um, you know, talk about three branches of government, wouldn't it also be an option for the president just to go to Congress with some of these tariffs and say, "Hey, can I get these approved?" Would that be the worst thing in the world? Wouldn't they vote in favor?
- DSDavid Sacks
If you want it to take forever.
- JCJason Calacanis
I mean, but yeah, things take time. Uh, do you have concerns that President AOC might do some things with executive powers that the Republican Party might be opposed to if she, uh, winds up winning in 2028?
- 42:44 – 46:58
Other Trump Administration legal battles
- DSDavid Sacks
- JCJason Calacanis
It's too much money. Okay. In the other cases, two more lower courts have ruled against Trump. One said the deployment of Marines and the National Guard were illegal. One said he can't freeze research funds for Harvard. So again, back to moving fast and breaking things.These cases are making their way through the courts, and there has been some resistance to sending in the National Guard, which is something. There's been a bit of saber rattling, Chamath, about maybe going into Chicago next. What are your thoughts on the National Guard issue?
- CPChamath Palihapitiya
They should. They should. Look, here's the thing.
- JCJason Calacanis
Okay.
- CPChamath Palihapitiya
Who is against safety and security? Who? And why? I don't understand. So if you can't do your job... Look, you have to remember, Jason, let's take where we live in California, or you used to live
- DSDavid Sacks
Yeah, not anymore.
- CPChamath Palihapitiya
13% of our income goes towards state coffers, and then we pay real estate taxes and all of the stuff that goes to local municipalities. What are you doing with that money if you're not making the places we live safe? And then the second thing would be making the schools good.
- JCJason Calacanis
Yeah. The i- the issue-
- CPChamath Palihapitiya
So if you can't do it, if you can't do it, of course somebody else should step in. And frankly, what I have heard consistently is even though the talking point has to be, "Oh, my God, woe is me, we can do the job," everybody behind the scenes is like, "Oh, thank God they're here."
- JCJason Calacanis
Anybody who's being impacted by crime would like to see the National Guard come in and, and remove encampments or drug dealers or get drugs off the streets. Sachs, you know, you're a, um... My perception would be that you think that there should be separations between the executive branch and, uh, maybe the states, and that this rule-breaking of sending in the National Guard, that would go against the rules of the sovereignty of the states. So putting aside Chamath's point, which is completely valid, that they haven't done a good job here, and it, it, it is illegal, as the judges are pointing out. Do you have concerns about that?
- DSDavid Sacks
Okay. Well, first of all, I reject this characterization that it's the Trump administration that's moved fast and breaking things. If you recall what happened-
- JCJason Calacanis
Well, you're moving fast. Let's just say moving fast.
- DSDavid Sacks
Well, I think the president is taking swift executive actions that are popular.
- JCJason Calacanis
Sure.
- DSDavid Sacks
And you see this actually in his poll ratings. He got the highest approval rating he's ever had just in the last week, and a big part of it is because of the reduction in crime in DC. Think he got to 55% approval
- DFDavid Friedberg
poll rating.
- DSDavid Sacks
And even in DC, by the way, the mayor and her staff have said all sorts of positive things about the help they've received now from the National Guard and from the federal government, and the citizens are extremely happy. Crime is down. I think we had the first two weeks where there was no murders in the capital in a long time. The residents are very happy. So this is definitely working. Now, with respect to California, let me just point out that the National Guard wasn't called in specifically to enforce laws on the street. What happened was that you had ICE and Homeland Security agents, and workers were doing their job, and they were conducting some deportations, and then you had protests turn into riots, and those protesters were threatening to burn down their headquarters, and that's why the National Guard had to be sent in. So it wasn't the Trump administration breaking things, it was rioters who were breaking things. I can't understand for the life of me why the administration wouldn't be able to send in the National Guard to protect federal workers against rioters, but apparently, that's the case. So look, I think the court reached a very specific decision about what happened in California. We still haven't had a case adjudicating the question of whether the proposed interventions in, in these blue states to clean up crime will be allowed over the objections of Democratic governors. We don't know.
- JCJason Calacanis
Hmm.
- DSDavid Sacks
I think it's pretty clear that the DC intervention will be allowed, and it's extremely popular. And look, I-
- JCJason Calacanis
The DC one, he's legally allowed to do, so yeah, he's got, he's got his, what, uh, what is it, a 30-day mandate? He can take it over and... So here's your popularity from The Economist. It is ticking up, but, um, Trump, uh, and the country still seems pretty divided. 41% approve, 55% disapprove, 3% unsure, but he has moved up significantly in the last
- 46:58 – 57:52
Weak jobs report: what is the state of the economy?
- JCJason Calacanis
week. Today, some big news came out Friday with the, uh, soft jobs report, pretty much bad across the board. Jobs came in super light, 22,000 added versus 75,000 expected. Most of the gains came from part-time jobs. US lost 357 full-time jobs while gaining 597,000 part-time jobs last month. And, uh, this is after a bunch of revisions you guys remember we talked about here a couple of times with these revisions, and we'll show up some, uh, charts with long-term revisions. July revised up slightly by 6K, 73,079, and June was re- revised down significantly. Remember that impacted the market by 27,000. This makes June the first month with a net loss of jobs since July of 2021. So there is an account on X, Covisi Letter, and they did this, uh, revisions chart. It's pretty crazy as you can see. (laughs) May and June revisions were in the six figures, and they're constantly revising these down it seems. All right. Uh, free break, had some internet connectivity issues apparently, but Chamath, let's talk about the revisions here and the softness in the job market. Concerned did maybe the Fed take too long to, uh, get towards cuts in September? Uh, what, uh, what is, what's your read on this and the endless revisions?
- CPChamath Palihapitiya
Look, I think that... I've said this, yes, last week, I think, right? So I'll just say it again this week. You can't run the most sophisticated economy in the world if you have data that is completely unreliable in either direction.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
And so the problem with this jobs report is there are already two competing versions of the truth. One group of people are trying to paint the jobs report as everything is working, there's nothing to see here. Another group of people are saying, "Oh, well, hold on, there's a births/deaths number where if you extract that out, the jobs numbers is actually negative."I don't know which one is actually better in terms of where we want to be right now going into a rate cut cycle. So my general commentary is the following: the BLS and their approach is incredibly brittle. It doesn't work. I think commerce has taken the first right step, which is to start publishing useful economic data into the blockchain. I think we need to figure out a way, and this is where Congress should get their act together, and pass an incentive or a requirement for certain parts of the critical economic infrastructure of America to report their data in an anonymized way into a broad set of blockchains. And the reason is that you will have very astute and precise pricing oracles help distill that information. So if you're ADP, if you're American Express, if you're Stripe, there's an imperative now for you to contribute the information you have into a broad collection of information so that we have an accurate sense of what the hell is actually going on. Because I can't react to this number because I don't know how it's gonna change. It could literally swing by 200,000 in either direction, Jason.
- JCJason Calacanis
This is a, I think a really good point. Here's some research I had my, uh, put one of my researchers at launch on this. Here's 2021 and the initial reading, first revision, and we did this for the year, Sachs. So as you can see in 2021, they missed it by 1.9 million, uh, which was about 15%. 2022, they miraculously nailed it. 2023, they were off by 10%. 2024, it looks like they were off again by 10%. All this is revising down, by the way.
- CPChamath Palihapitiya
No, Jason, sorry.
- JCJason Calacanis
And in the first half of this year, let me just finish the chart. First half of this year-
- CPChamath Palihapitiya
No. This sh-
- JCJason Calacanis
Initial reading, 985. First revision, 732. Second revision, 497. So they were off by 50% so far this year alone.
- CPChamath Palihapitiya
This chart is itself inaccurate.
- JCJason Calacanis
The table is?
- CPChamath Palihapitiya
And, uh, and it's because it's coming from the same people that measured. So you're asking the people that measured to grade themselves, and I suspect that the answer is actually much worse than all of this. Now, what is the implication of it? The implication of it is if you take the most positive view possible, it's that the people that then control the levers of the economy don't actually have accurate data, so they'll be hesitant to act until the data is overwhelming. The most important lens of that will be the Fed and what they do with rates. And so everybody's like, "Oh, wow, there's a 99% chance of a 25 basis point cut." That may be wildly, wildly, wildly conservative in terms of the, the total amount that they need to be thinking about and how they should phase that in. But how would I actually prove that to you? I can point to a whole litany of private data.
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
But the problem is the federal actors use public data, and this data is not useful. And I think that when you get private data into your hands, which I know that other folks have, hedge funds, banks, the White House, what they see is different than what the Fed sees. So what I would tell you from this jobs report is it's gonna start again this clamor of what is your plan?
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
Clapping is not a strategy. So a 25 basis point cut to a $32 trillion economy is not a strategy. And I think that the reason they don't know what to do exactly is because they have extremely faulty data.
- JCJason Calacanis
Again, this is not... I'm, I'm not taking a position on this. You're framing it as if I'm taking a position. I'm just reporting the data here as they've reported it. So I'm just, I'm just doing that here, just to be clear here that I'm not endorsing any side of this. I'm an independent, I'm a moderate. I'm just giving you the data as it stands. Here's the Fred chart just so we can zoom out and see unemployment since the '50s. We're still at historic lows and there's a slight uptick, 4.3%, which is the highest unemployment since 2021, but it's absurdly low historically. So even when we're looking historically, Sachs, we're still at very low, but do you have concerns that the economy could be slowing and that we could have a jobs issue? That, I guess, is the question that is filling the airwaves on CNBC and that everybody's talking about in group chats. Are we, uh, maybe didn't make the Fed cuts in time for what clearly is some amount of slowing? Now, we could argue over if they're getting the data right or not. The Fed says they look at all data, not just this data. They say they look at the private data as well. But what are your thoughts here, Sachs?
- DSDavid Sacks
Well, we had 22,000 jobs added in August, and yet while the number of jobs went up, unemployment rose, like you said, from 4.2 to 4.3%, which is a little bit of a contradiction, but that happened because more people started looking for jobs.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
But there are huge error bars around this data, like Jamas said. I mean, like you showed, there's roughly 50% revisions to all of this data over time, over the course of a year. So we don't really have great visibility in what's going on, and that's why you see such huge disparities in how people are interpreting this data. So if you wanna look at some of the people who are pessimistic, you've got Cobe EC Letter, but they're pessimistic about everything. You've got Moody's economist Mark Zandi. He says we're on the precipice of a recession, and he has a bunch of reasons why. But then if you look at Polymarket, people on Polymarket are strongly betting against a recession this year. I think the number's at about 8%. So it appears that most people still feel like the economy is doing well. And remember, we just had a 3.3% GDP growth rate for Q2. So I, I'd be surprised if, if there's a recession. I think there's a lot of factors against it. I guess I would also note that if there's any weakness in the job numbers, it's coming from foreign-born workers more than native-born workers. Around two million more American-born workers have jobs in 2025 so far.And I think, meanwhile, about a million foreign-born workers, roughly, have lost jobs, so the net increase is about a million. But what you're seeing is a repatriation, in a way, of jobs within the economy. The other thing that's happening is a reprivatization of the economy. So in August, the federal government shedded about 15,000 jobs, and there's been 100,000 federal jobs lost over the course of the whole year. So that makes the overall numbers look worse than they are, but I, a lot of us would argue that having fewer federal workers is a good thing for the economy. So you've got those factors. Then you've got blue-collar real wages are rising the second fastest in history. You had 3.7% wage growth this year versus 2.7% average inflation, so you have a net 1% wage growth. During most of the Biden presidency, it was negative. And then I would also point to, I think, several factors which would make me optimistic about the economy moving ahead. You've had massive investment in the US by both private companies and foreign governments. You know, according to these new trade deals, I think roughly $8 trillion of new investment. You've got this AI boom. You're seeing mass-
- JCJason Calacanis
And that's gonna land over the next year, right?
- DSDavid Sacks
Sure.
- JCJason Calacanis
That hasn't actually been dumped in.
- DSDavid Sacks
Yeah. Exactly. This is-
- JCJason Calacanis
So we should see that in 2027, maybe late 2026, yeah?
- DSDavid Sacks
Yeah. This is the outlook for 2026 and beyond. I mean, e- this would be the bull case, is number one, $8 trillion of, of new investment in the US economy by private companies and by foreign governments. Number two, the AI boom. You've got this massive buildout of data centers and AI infrastructure underway, and that includes energy and the manufacturing sectors are gonna boom alongside tech. Number three, this has been the most affordable summer at the pump since 2021, and low gas prices don't seem to be going anywhere anytime soon, so lowest gas prices since 2021. Number four, you have these huge new tax incentives for business expansion. You've got the accelerated depreciation on equipment purchases, on R&D. I think those are gonna kick in once the Big Beautiful Bill goes into effect. And then the last thing I would say is that interest rate cuts are coming. I would say that now in light of the latest jobs report, Powell should really cut 50 basis points. I doubt he will.
- JCJason Calacanis
In September, yeah.
- DSDavid Sacks
In September.
- JCJason Calacanis
He'll probably do 25.
- DSDavid Sacks
I d- I doubt he... Yeah, I doubt he will. It's probably gonna be 25 and then hopefully another 25. But I think you could make the case that they should do 50 now and then 25 after that. But regardless of what it is, I think that most people think interest rates are coming, and that's gonna juice the economy and further improve our fiscal position. So look, for '26, I think there's a lot of bullish factors here.
- 57:52 – 1:07:04
Google avoids worst-case scenario in antitrust case
- JCJason Calacanis
uh, before we wrap here, Google, uh, as we know, was found liable in this antitrust case, but the sanctions seem to not be as harsh as people thought they would be. Judge Mehta rejected the request that Google have to spin off Chrome, Android, and pointed out that Google is, uh, having massive competition. So we had four years of Lina Khan, you know, in these aggressive cases. There were, there were tactical things we talked about here, like, uh, dark patterns, et cetera, that we all agreed with. I think there was consensus there. But this one we found a little confusing because, gosh, Google's under so much pressure. What are your thoughts on the case?
- CPChamath Palihapitiya
I thought this ruling was excellent.
- JCJason Calacanis
Unpack it all.
- CPChamath Palihapitiya
Essentially, the crux of the ruling was, look, there are some restrictions that Google has to live by, don't get me wrong.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
But the most punitive remedies that were suggested were thrown out, and the reason they were thrown out was because the judge very eloquently cited competition in a fair and free and open market. And that is incredibly refreshing because the real question is would this judge have had the wherewithal and the courage to actually be able to rule this way a few years ago when there would have been an enormous amount of political pressure? They probably would have found a way to, to run this case in a, in a different place, et cetera, et cetera. But now what you saw was just very simple logic intervene. And at the core of it was, you know, when we started this lawsuit, things like OpenAI and ChatGPT didn't exist, and when you fast-forward, it's incredibly fast-moving. We are reallocating hundreds of millions or billions of users' intentions. As a byproduct, we're reallocating tens, maybe hundreds of billions of dollars of revenue. And so the judge said the most severe remedies aren't necessary because the free market is doing this job.
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
So-
- JCJason Calacanis
And they-
- CPChamath Palihapitiya
I-
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
I just think that's incredibly refreshing because we forget that if the market is left to deal with these issues on its own, they do a very good job of cleaning things up.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
And it's because, as you said earlier, Jason, consumers want creative destruction. They want the next best thing.
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
They want to be able to-
- JCJason Calacanis
Lower prices, better services. It's, it happens by the free market all the time.
- CPChamath Palihapitiya
And they're willing, they're willing to reward better companies and better products. So I think the, the great news for Google is that this takes an enormous risk off the table, and now I think that they probably have even more ambition and energy to just go for it and try to compete, because they're not gonna be worried about everybody on the outside and probably some percentage of employees on the inside who are always trying to slow things down.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
And so-
- JCJason Calacanis
And, and-
- CPChamath Palihapitiya
That's exciting.
- JCJason Calacanis
... you pointed out correctly, and I'll let you comment on this, Sax, is that they did get some tactical, you know, penalties here, uh, and they make sense. Doing deals that are exclusive when you are a monopoly player, like getting Firefox and Apple to only do an exclusive deal with you, they're not gonna be allowed to do that. And man, that would change the game on the field. If somebody like DuckDuckGo or Bing or a new entrant, Perplexity, whoever who's doing search would be able to say to Apple, "We will outbid Google for 10% of the searches. We'd like to buy 5% of the searches from the Safari browser," or going to Firefox and saying, "Hey, we'd like to..."... one up and we'd like some percentage of that. So, that seemed like a good part of the ruling. Your thoughts overall about this?
- DSDavid Sacks
So, on this podcast, I think it was two or three years ago when this case first came up, I think I took the position that Google should be broken up into two or three companies-
- JCJason Calacanis
Hmm.
- DSDavid Sacks
... because I thought it was this invulnerable monopoly, and I don't think monopolies are great for the startup ecosystem. And what I mean by that is, they had the Google Search monopoly and the YouTube business, which was basically a monopoly, and so forth and so on. So I, I was in favor of breaking this up. But I've got to admit I was wrong about that, for the reasons that the judge said, which is Google, for the first time in a long while, is existentially threatened by what's happened with AI. I mean, their cash cow, the core of their business is search. And people are starting to substitute in droves from traditional Google Search, which they own, or keyword search, where they have this monopoly or dominant share, to AI. And if you look at AI revenue, I think something like 90% of it is going to OpenAI. I mean, they have the dominant position among consumers. And-
- JCJason Calacanis
For now.
- DSDavid Sacks
For now. And there's, let's say, five major AI companies that are hot on their heels and very competitive-
- JCJason Calacanis
Yeah.
- DSDavid Sacks
... and performing equally, if not better, on performance benchmarks. So, the point is just, I think everyone can now see that the search business is either going away or transforming into something else, which is it's basically merging with, uh, it's called AI chatbot business.
Episode duration: 1:07:04
Install uListen for AI-powered chat & search across the full episode — Get Full Transcript
Transcript of episode 3CSlL8R7_h8
Get more out of YouTube videos.
High quality summaries for YouTube videos. Accurate transcripts to search & find moments. Powered by ChatGPT & Claude AI.
Add to Chrome