IPOs and SPACs are Back, Mag 7 Showdown, Zuck on Tilt, Apple's Fumble, GENIUS Act passes Senate

Jason Calacanis 0:00 All right, everybody. Welcome back to the number one podcast in the world. I'm your host and executive producer for life.

David Friedberg 0:08 (laughs)

Jason Calacanis 0:08 Isn't that right, Dave Friedberg?

David Friedberg 0:10 Nope, not at all.

Jason Calacanis 0:10 J-Cal, Jason Calacanis.

David Friedberg 0:11 Not at all, not at all what you are.

Jason Calacanis 0:12 Make sure you tune in to This Week in-

David Friedberg 0:14 Not at all.

Jason Calacanis 0:14 ... Startups And Apply To Found University.

David Friedberg 0:17 (laughs) You're something very different.

Jason Calacanis 0:18 With us again today-

David Friedberg 0:19 (laughs)

Jason Calacanis 0:20 ... the sultan of science, David Friedberg. Can I just congratulate you on your fourth baby? If you double that number, you're gonna be able to catch up to Chamath and his five, plus three illegitimate. How are you doing that, Friedberg?

David Friedberg 0:33 (laughs)

Narrator 0:35 (upbeat music) The 50s are back. I'm going all in. Don't let your winners ride. Rainman, David Sacks. I'm going all in. And I said- We open source it to the fans and they've just gone crazy with it. Love you guys. Queen of quinoa. I'm going all in.

Jason Calacanis 0:52 How are you feeling? You're tired and grumpy, aren't you? You're a little tired-

David Friedberg 0:55 Easy transition for me. I didn't have to do the work. It's all good.

Jason Calacanis 0:57 Are you tired and grumpy? And how's Alison? How's the, how's the mom?

David Friedberg 1:00 Everyone's wonderful. Thank you for asking.

Jason Calacanis 1:02 Yes, and a beautiful boy.

David Friedberg 1:03 Family's great.

Jason Calacanis 1:03 Beautiful boy.

David Friedberg 1:03 Nothing more (beep) nothing-

Jason Calacanis 1:04 He's crushing?

David Friedberg 1:05 Nothing more amazing than seeing a child-

Chamath Palihapitiya 1:09 How's (beep) schmeckle?

David Friedberg 1:10 Magnificent. Magnificent.

Chamath Palihapitiya 1:11 Magnificent.

David Friedberg 1:12 Thank you for asking. Thank you for asking that, yeah. Okay, let's move on. Thank you.

Jason Calacanis 1:16 (laughs) Thank you for all the kind words. And, uh, just, we sent over, uh, a gift basket, Chamath and I. LongHorn picanha steaks, uh-

David Friedberg 1:24 (laughs)

Jason Calacanis 1:24 ... a ten-year, uh, membership for (beep) , so-

Chamath Palihapitiya 1:27 Oh, hey, congrats to Olivia Landon, by the way, of Long Hill Wagyu. She had twins.

Jason Calacanis 1:32 Hm. That means she's gonna have more people to work on the ranch and slaughter cattle to send us our picanha.

Chamath Palihapitiya 1:38 (laughs)

Jason Calacanis 1:38 Congratulations. Shout out-

Chamath Palihapitiya 1:39 Congrats to Olivia Landon.

Jason Calacanis 1:40 It's so funny because we love this... (laughs) We love these steaks so much. She doubled! (laughs) We mentioned it on the pod and you idiots started, like, searching for it, lunatics, and they ordered out all the cool et steaks, so now Chamath and I are screwed. No cool et's left.

Chamath Palihapitiya 1:54 No, no, they ordered... No, they ordered out everything. Everything was sold up.

Jason Calacanis 1:56 Ugh.

Chamath Palihapitiya 1:57 Everything was sold up.

Jason Calacanis 1:58 So now we have to gatekeep, with us again, your chairman dictator, Chamath Palihapitiya. He of two votes in our fine organization. How are you doing, Chamath?

Chamath Palihapitiya 2:08 I love voting control.

Jason Calacanis 2:10 Oh.

Chamath Palihapitiya 2:10 I'm doing great.

Jason Calacanis 2:11 He starts, Thomas LaFont, with a, uh, tie, and then all of the gamesmanship happens between the team of rivals, me and Friedberg. With us again, Thomas LaFont, a gentleman, a scholar, no idea why he's here. A true-

Chamath Palihapitiya 2:27 (laughs)

Jason Calacanis 2:27 I don't know how he wound up on this podcast-

Chamath Palihapitiya 2:29 ... apologist to us.

Jason Calacanis 2:29 ... but a true gentleman, a true scholar, and host of East Meets West, an incredible conference that I attended this week with our bestie David Sacks, who, of course, is at the White House and can't join us. Uh, but Thomas, what a great event. Thank you for including me.

Thomas Laffont 2:47 No box lunches, by the way. We, we took your feedback from a couple of years ago, so I hope-

Jason Calacanis 2:52 Yes.

Thomas Laffont 2:52 ... that we met your standard.

Jason Calacanis 2:54 He did upgrade the food.

David Friedberg 2:55 What were the highlights for you guys at your conference, Thomas?

Thomas Laffont 2:58 I mean, I think for me, obviously, I think a lot of news in AI this week, so I think that was kind of the centerpiece of most of the panels. Pretty much up and down the stack from SaaS companies trying to transform into AI, to obviously the big Zuck news on Scale, and then potentially I saw in the information today the, the Nat Friedman news. So, feels like there's a lot going on in the industry, so should be fun to talk about.

Jason Calacanis 3:23 Yeah, and we're gonna talk about it all today. We got a, a really

Jason Calacanis 3:26 full docket. Rick Caruso, the, uh, mayor who would have saved Los Angeles from the fires. Uh, he was there. And you actually hosted at his incredible facility. What a, what a location.

Thomas Laffont 3:37 We did. We talked about the, the state of LA, which, J-Cal, is that, is that... It looks like that's where you're at, right?

Jason Calacanis 3:43 Yes, I'm at my, uh, LA home, which, uh-

Thomas Laffont 3:47 AKA the compound?

Jason Calacanis 3:48 Uh, yeah, it's, uh, uh, it's available on Airbnb, so I'm, uh, here in LA. But yeah, Rick Caruso, what a great speaker.

Thomas Laffont 3:54 Interestingly, J-Cal, today a friend just sent me a chart showing the recovery of restaurants post-COVID, and fif- uh, LA is 50% behind on the recovery per store location-

Jason Calacanis 4:08 Hm.

Thomas Laffont 4:08 ... versus the national average.

Jason Calacanis 4:10 What do you attribute that to, or what did they attribute it to?

Thomas Laffont 4:13 I think, I think there's kind of a couple different things, right? I think one, the economy, which, you know, unlike the San Francisco economy being levered to, to AI and on the upswing, is more levered to entertainment, and I think, you know, secular decline, I think, you know, someone mentioned at the conference that filmings in LA are down 50% from peak, so, I mean, that's just a, a massive move down, losing share to other GOs both in the US, I think Georgia, right, J-Cal, was mentioning, and another-

Jason Calacanis 4:45 Yeah, I mean, Ted Sarand has explained exactly how aggressive New York is being, uh, the UK is being, Atlanta, I mean, so many different hubs for movies giving much better deals than Los Angeles is.

Thomas Laffont 4:58 Yeah, so I think it's a, it's a combination of, I think, you know, uh, uh, uh, being levered to one industry that's kind of in secular decline.

Chamath Palihapitiya 5:06 I can tell you from MrBeast that for Beast Games, we had a deal in Las Vegas and in Toronto. We got huge tax credits. And in the second season that we're doing for Amazon, we did an enormous deal with the Kingdom of Saudi Arabia. And so-

Thomas Laffont 5:21 Amazing.

Chamath Palihapitiya 5:22 ... we're filming a bunch of episodes there. We're building the sets there. We're actually gonna keep them there after it's all said and done. We would not film in Los Angeles unless we absolutely had to. We will stay as far away from California as possible.

Jason Calacanis 5:35 And regulations are such a big part of this, yeah.

Chamath Palihapitiya 5:38 It's uneconomic, you can't make it work.

Thomas Laffont 5:40 Yeah, 30% more expensive, I think, is, is the, kind of the official number on, on shooting in LA.

Jason Calacanis 5:44 Well, there's also speed, right, Thomas? Like how quickly can you stand something up? How many, how much paperwork do you have to file? James Beard Foundation, I'm seeing here from the research, has found that all these, uh, independent restaurant owners said they just can't get staff here, so, uh, in Los Angeles. It's just hard for people to live here.... and it's hard to get through the regulations. And if you make it hard, there are other options for people. This idea that California has a lock on, uh, anything other than incredible weather and beautiful people is farcical. There's a lot of (laughs) beautiful people in other places with decent weather, and you can, you can go do your projections there, so.

Thomas Laffont 6:19 Another topic that came up that a lot of people were talking about, something that I know you've talked a lot about, uh, are, are debt issue and the debt-to-GDP ratio. There was a lot of talk on the, on the flip side, on the GDP side, what if actually AI can increase productivity and regrow GDP faster than expectations, right? And perhaps that's one of the reasons why, you know, interest rates m- might not be quite as high as you might expect given some of the trends that you guys have talked about.

Jason Calacanis 6:50 Hmm.

Thomas Laffont 6:51 So, I think a lotta, a lotta discussions around AI productivity and what we could look at over the next, you know, five to 10 years because of the, the improvements we're seeing.

Jason Calacanis 7:01 This is particularly beneficial to the US, right? I mean, i- if you think about where AI is gonna accrue economic surplus first, it's likely gonna be in the US, not global GDP. So the US kind of... does it compete away dollars or it increases overall productivity, or both-

Thomas Laffont 7:19 Hmm.

Jason Calacanis 7:19 ... ahead of the rest of the world? If we do see advances from AI to accelerate GDP growth, is that because of all of the onshoring of manufacturing and industry that we outsource today? Like, do you think that that goes hand-in-hand with AI acceleration?

Thomas Laffont 7:37 I think that's part of it, and I think the other part is just getting s- even out of the, th- you know, the knowledge worker workforce, right? Just getting significant productiti- productivity improvements there. One of the things that we showed in our keynote is the adoption of these technologies, and e- even taking doctors as an example, right? Uh, an area n- you know well. You know this new company, um, kinda coming in and, and developing kind of a diagnosis kind of engine, right, that's now used by a third of doctors. So, you know, I, I think that, uh, it's Open Evidence, by the way, is the name of the company, and already a third of US physicians are on the platform using it, you know, 10 times a day to kinda help diagnoses. So, in particular in oncology as an example, it's seen significant traction. So, you know, you multiply that by the legal profession, coding I think we're already seeing. You know, what if we just see kind of a, an explosion of productivity gains across, you know, both the physical and the digital economy?

Jason Calacanis 8:41 Yeah. The doctor one's a good example. If someone had the opportunity to go get more regular preventative checkups, um, they would. The problem is it's very expensive, it's hard to get an appointment, or insurance won't cover it. But if the cost to a doctor goes down because they can leverage AI, the throughput goes up by 10X, they can see 10 times as many patients per day, then suddenly diagnostic care becomes more available. They can charge for that. They don't need to charge the same amount. The price will come down per checkup, but you'll... more people will be able to get a checkup per day, so that grows GDP and diagnostic care, that grows the size of that piece of the economy. It's a very good example, I think, like-

Thomas Laffont 9:22 I'll give you, by the way...

Jason Calacanis 9:23 ... anything where AI provides leverage to a service provider, where their throughput now goes up, um, the volume goes up...

Thomas Laffont 9:28 I'll give you another example of that, um, Dave. Uh, so there was an LA dentist that kinda hit, gone viral this week, I don't know if you guys saw this story. But basically, he, um, he created an ad using VO3 about a skydiving gorilla-

Jason Calacanis 9:45 Yeah, I saw that.

Thomas Laffont 9:45 ... who, you know, ultimately needs to get his teeth fixed because he was drinking while he was jumping out of the plane, and, you know, it's a very kind of funny viral ad. He probably made it for a couple, you know, hundred bucks, and now his practice is totally full. He's been flooded with requests-

Jason Calacanis 10:01 (laughs)

Thomas Laffont 10:01 ... right, for the new dental implants. So-

Jason Calacanis 10:03 Hmm.

Thomas Laffont 10:04 ... you know, to your point about increasing productivity, boom. There's h- how, how VO3 can help a local dentist.

Jason Calacanis 10:10 All right, everybody. Welcome to the number one podcast in the world. We got a full docket, full docket, but we're gonna rocket the docket 'cause there's so much going on

Jason Calacanis 10:19 here. Zuck is tilted, clearly. Uh, this has been the big discussion in Silicon Valley for the last 10 days or so. According to reports, Zuck is super frustrated that Meta's falling behind in AI, so he is swinging for the fences. Sam Altman said Meta has offered top OpenAI employees a $100 million, wait for it, signing bonus. That's not comp, that's a signing bonus. Who knows if this is true or not, but he's also offering 100 million a year in annual comp. He's clearly cut out tens of billions of dollars for this effort, not dissimilar to when he did his VR efforts that didn't work out so well. Here's a 30-second clip of Sam Altman talking about this on his brother Jack's podcast, Uncapped.

Mark Zuckerberg 11:03 They started making these, like, giant offers to, uh, you know, a lot of people on our team.

Jason Calacanis 11:07 Mm-hmm.

Mark Zuckerberg 11:08 Um, you know, like $100 million signing bonuses, more than that comp per year, uh-

Jason Calacanis 11:12 It's crazy.

Mark Zuckerberg 11:13 ... and I'm, actually, it is crazy. I'm really happy that at least so far, uh, none of our best people have decided to take them up on that. I think that people sort of look at the two paths and say, "All right, OpenAI's got a really good shot, a much better shot at actually delivering on superintelligence, uh, and also may eventually be the more valuable company."

Jason Calacanis 11:31 Meta just also invested over 14 billion, I'm using invested in quotes, in Scale AI for a 49% stake, and, uh, this probably is better described as a shadow acquihire to get around antitrust scrutiny. Remember Microsoft did that with Inflection AI back in the day, Google did it with Character.ai, and Amazon did it with Adept.ai. Not sure if this is necessary anymore, uh, since Lina Khan's no longer in the position. Scale CEO Alexander Wang and others will be joining Meta to work on a new superintelligence team. They're saying that Scale's gonna remain an independent company and get a new CEO. I'm not sure if that's gonna happen.And if you don't know, uh, Scale does data labeling. They get experts to help train language models. Two of their biggest customers are OpenAI and Google, and they both canceled their contracts. So Zuck is taking that chess piece off the board so he can get all that data into his LLMs. He's also reportedly in talks to hire former GitHub CEO Nat Friedman and Daniel Gross to work on AI. They have a incubator investment fund for AI. Daniel Gross had a really cool startup incubator called Pioneer Labs. I had him on This Week in Startups a couple years ago. Really smart cat. Meta has 70 billion in cash. Thomas, Lepont, when you see Zuck doing this, what's your take not only on what Zuck's doing, but how big of an opportunity is this, uh, you know, in terms of the prize of having the best large language model? What is he going for here and, uh, what's your take on these really aggressive packages and 49% purchases?

Thomas Laffont 13:06 I mean, look, I think one, it, it feels highly rational, right? If you think about Meta's market cap is, uh, rough math, 1.7 trillion. If you're the CEO and you ultimately believe that maybe 50% of your market cap is at risk because of AI, 850 billion, why would you not spend maybe 4 or 5% of that if you think it increases the odds even slightly that you're gonna win the market? So to me, it, it, it kind of reminded me of a few f- few things. Number one, the scale and size of the opportunity, right? Obviously, people think AI is massive. But frankly, um, Jake, uh, I'm even wondering, putting the regulatory scrutiny to the side, if it was time. He just didn't want to wait. And obviously doing it this way, I think Alex literally the next day, who's the CEO of Scale, can show up to work at Meta. So I think it's, it's urgency of a large opportunity. Um, I'm curious to get Chamath's take because it reminded me a little bit of the pivot away from HTML5 and also a, a much smaller acquisition, but one that we really felt, which was of a company called Onavo. And for those that may not remember, O- Onavo was a small data service provider but what it did is it had a panel of phones and we as investors could see what people... which apps people were using and the data was incredibly valuable because it was the only service that gave you true engagement data. And so obviously as an investor you felt, wow, this is an incredible tool. And eventually it sold to, to Facebook and Facebook used it internally and didn't allow anybody else to use it and we lost one of our key abilities, right? In the mobile app-

Jason Calacanis 14:44 Mm.

Thomas Laffont 14:45 ... revolution to tell who was winning and losing. So, um-

Jason Calacanis 14:49 And you're saying the Scale acquisition is, you know, uh, parallels that in a bit. This is great service. A lot of people (laughs) rely on it. He buys it, shuts it down for everybody else, gets the tool for himself, gets the data for himself.

Thomas Laffont 15:00 Correct. So I definitely see parallels and I think given the s- you know, their market cap and the size of this opportunity, I think it makes a lot of sense.

Jason Calacanis 15:08 Chamath, your thoughts on Zuck's action. Obviously, folks know you worked with him as you went from tens of millions of Facebook users to hundreds of millions and you were there actually during the, uh, HTML wrapper app disaster, uh, that it, uh, I think maybe-

Chamath Palihapitiya 15:25 That was a debate at our executive team, at our M team, and I was on the side of apps and, well, without embarrassing him, somebody else was on the side of HTML5. I thought it was fucking stupid.

Jason Calacanis 15:36 Why? Why, why was-

Chamath Palihapitiya 15:37 That... but that decision won because, you know, all of my political capital at the time was also wrapped into native apps, our own phone, an entire verticalized integrated stack.

Jason Calacanis 15:49 Hm.

Chamath Palihapitiya 15:50 And politically, I think I made the decision for them very hard because I was not a very-

Jason Calacanis 15:57 Hm.

Chamath Palihapitiya 15:57 ... play nice in the sandbox with others kind of executive. I was more of a scorched earth, get it done kind of person.

Jason Calacanis 16:03 Okay, so no changes over the last 15 years. That's good to know.

Thomas Laffont 16:06 (laughs)

Chamath Palihapitiya 16:06 They made, they made an enormous mistake, but then they admitted it about a year after-

Jason Calacanis 16:10 Right.

Chamath Palihapitiya 16:10 ... I left. They said this was the single success. Single biggest-

Jason Calacanis 16:12 Explain in plain English why HTML5 wrappers versus native apps.

Chamath Palihapitiya 16:16 I can't 'cause it's retarded.

Jason Calacanis 16:18 Okay, great. Uh, I can explain it.

Chamath Palihapitiya 16:20 So like-

Jason Calacanis 16:20 (laughs)

Chamath Palihapitiya 16:20 ... native apps-

Jason Calacanis 16:21 Yeah.

Chamath Palihapitiya 16:21 ... are... was obvious in 2010.

Jason Calacanis 16:26 Obvious, yes.

Chamath Palihapitiya 16:26 And the only, the only reason to use HTML was as an end around for different carriers and for different ecosystems that were trying to charge us a toll. So in 2010, I went to Mobile World Congress and I took a group of my most talented developers and we built an entire replica of Facebook that we called Facebook Zero, which was only available via URL. And we launched it at Mobile World Congress and we did it and I announced it there because if you went to India as an example, all of the folks there would try to charge us a tax. But if you could navigate through the browser, you wouldn't have to pay it.

Jason Calacanis 17:06 Right.

Chamath Palihapitiya 17:06 So that was a good example of what to do in a developing market when people were toll taking. But the real solution was to build an extremely integrated app from the software all the way to the hardware and the only way to do that was as a native application, and that has tremendous applications to today. But just to finish on yesterday, my proposition was full phone, full stack, full app, all of this other HTML stuff should only be as a side thing that we do in markets where they try to make it difficult for us. Instead, it became politicized and it became a big bet on HTML5, which I thought was absolutely stupid and unjustifiable and that was also when I said, "Okay, well this phone's not gonna happen, so let me leave." And a year later, I think Mark to his credit said this was really stupid and ripped all the HTML5 stuff apart, went native, and the rest is history. So let's fast forward to today. Yeah, there it is. Biggest mistake was betting too much. It was, it was an a- and that was, again, I'll just say it, people politicizing what should have been an obvious technical decision.

Jason Calacanis 18:08 And let's, let's fast-

Chamath Palihapitiya 18:08 Okay. The other piece of that, just to add to it, was it was also a religious decision then. People like the-

Jason Calacanis 18:13 It was stupid.

Chamath Palihapitiya 18:14 ... open standards of HTML5.

Jason Calacanis 18:15 It was stupid.

Chamath Palihapitiya 18:16 So there were certain developers who felt like, "We have to support open standards." Only stupid people thought that.

Jason Calacanis 18:20 Yes.

Chamath Palihapitiya 18:20 Only stupid non-technical people thought that. It was stupid. It was obvious.You'd have to be a (censored) moron, and there were (censored) morons at the executive team that advocated for this. Anyways, we were right, they were wrong, and he was fine. Okay, fast forward to the, where are we today? It's the exact same story playing out. Now, what do I mean? You have to look very carefully at Microsoft's deal with OpenAI. Why? Because what you see is the compounding of secrets. There are secrets in the training layer, there are secrets in the model layer, there are secrets in how these things are tightly coupled to infrastructure and compute. And what we have to remember is what OpenAI got from Microsoft, was an extremely competent partner that built an enormous Azure compute infrastructure to train everything from ChatGPT, all the way up to the o3 model, DALLE, everything. Why is that important? Because you start to figure out these tricks, how do you really optimize these models to be extremely performant? Now, if you look at all of the other models, they've also had some level of that advantage. So if you look at DeepSeek, what did they do? Well, we don't know, but what we have been told is that there's very tight coupling to hardware. If you look at what XAI is doing, I think what you can bet is that there's an extremely tight coupling to hardware and infrastructure in compute. If you look at what Facebook is doing, they generically train on NVIDIA, and they launch it in the open source. So, I think that what they need to do is more of the OpenAI, more of the Google playbook. Look at Google. Google's Gemini models are extremely tightly coupled to TPU, and it enables and unlocks an entire stack of secrets and capability that then get manifested in model quality.

Thomas Laffont 20:16 Mm-hmm.

Chamath Palihapitiya 20:17 So, I think the first thing that Mark has to do, if I were him, is start to chip away at all of the sets of secrets. So, what secrets do you get from Alexander Wang and Scale? It's what are the labeling techniques that allow these models to be more and more performant? What labeling techniques are used in the reasoning models? What labeling techniques are used in more traditional LLMs? It is clear that LLaMA doesn't know this, Meta doesn't know this that well, because their model quality is meh. So, now what you get is that set of secrets. So, what do you get from Nat Friedman and Daniel Gross? You get, what are the apps doing? How are they approaching writing agents? These agentic tips and tricks that make usability and value more obvious. But then what's missing? I think the thing that's missing is the infrastructure and compute set of secrets. I think it's insufficient to buy stuff off the shelf from NVIDIA and expect these models to fundamentally compete. So, I think if I were a betting man, he's bought the training secrets, he's bought the app secrets, and now he has to buy some infrastructure and compute hardware secrets. You put it together, and he's got a pretty good strategy here.

Thomas Laffont 21:24 And also, just to add to that, Chamath, uh, Nat and Daniel have invested in a lot of AI companies, and those companies are, have secrets of their own.

Chamath Palihapitiya 21:33 Those are the apps.

Thomas Laffont 21:33 Yeah, no sir.

Chamath Palihapitiya 21:34 Yeah, those are the apps.

Thomas Laffont 21:34 Well, and actually, I think they have some along the full stack. Freeberg, your thoughts on this strategy as described by Thomas and Chamath, and just the data we're seeing on the playing field. Aggressive acquisition of talent in companies.

David Friedberg 21:49 I don't know if I have much to add here.

Thomas Laffont 21:51 Okay. One additional point, Chamath, by the way, that you mentioned. If we look at the winners, right, in models of the past 12 months, Anthropic the same, right? They've been very, um, kind of deliberate and have explained how TPUs, right? They've been a big user of them, how it's helped define their training models. So, I think you're 100% right. If we look at the models that have really performed, it's ones that have that, that, quote, secret, as you mentioned.

Chamath Palihapitiya 22:14 When I first started 8090 a year ago, one of the key bets I made, which was a mistake, and we unwound the bet, but the first bet that I made was, can we build a transpiler? Which is to say, can you take a CUDA workload and then can you redirect it away from NVIDIA to different hardware? And basically what I learned in that process are all of the attention mechanisms that are built into transformers that really differentiate how good the models are, need to literally be hand tuned for every single target of silicon that you have. So, when Amazon just kind of wakes up and says, "Here's this chip," it means nothing unless you can incentivize somebody to build to it. But the opposite is also true. If you have a model and you just run it generically, you're not gonna get the gains, and it's not gonna be as special as if you have a dedicated infrastructure and compute architecture and say, "We're gonna tightly couple these." It's been clear that OpenAI has had that, Anthropic has had that, Google has had that, DeepSeek has had that, and I think Meta needs to do that. Otherwise, they're always going to be floundering on their back heel.

Thomas Laffont 23:22 One quick misnomer. I think, you know, when people hear labeling, they kind of assume a photo of a dog, and someone says, "This is a dog." Right? I mean, that's definitely how it started, but-

Chamath Palihapitiya 23:31 It's not what it is today.

Thomas Laffont 23:31 ... if you look at skills to business, it's completely more from that.

Chamath Palihapitiya 23:35 Yeah.

Thomas Laffont 23:35 So, you could actually label a problem. So for example, in, in simple terms, two plus two equals four is actually, um, a reasoning data set, right? So, you got to think of labeling not just in the simple terms of, you know, this image, but of massive data sets of, of outcomes, and that's what's kind of really used to tru- uh, train these reasoning models. Um-

Chamath Palihapitiya 23:56 Yeah, it's

Thomas Laffont 23:57 But I think there's another-

Chamath Palihapitiya 23:58 ... experts, right?

Thomas Laffont 23:58 Yeah, there's another story here, guys, in my opinion, and it's the performance of the Max-7, right? And I- I'm gonna have to check with my data science team, but I'm wondering if we're, this is the year where we've seen the greatest divergence amongst the Max-7. Right? So, if you look at the Max-7, and if I just gave you, right, this performance, you can see, okay, so Meta's up 18, Google's down, NVIDIA's up eight, Tesla down 20, Apple down 21, Amazon down three, and Microsoft is plus 13.

David Sacks 24:32 ... right? So, it's kind of interesting in a market that, you know, historically over the past few years-

Chamath Palihapitiya 24:38 (coughs)

David Sacks 24:38 ... where we feel the Max-7 have been truly correlated, now the market is saying, "Wait, hold on. We might start to see divergent performance." What I read from that, uh, uh, in one element is, the market's starting to try and sort out who are gonna be the winners and losers, who's well-positioned versus maybe falling behind. Right? So, I think we're gonna start to see some divergent performance from the Max-7. I think it's gonna-

Chamath Palihapitiya 25:02 Can you-

David Sacks 25:02 ... reward not- Yeah.

Chamath Palihapitiya 25:03 ... can you put that back up there for a second? I mean, I think that's so interesting because if you look at the conditions on the field today, you know, Google's down 8%. But again, I would tell you, as a user, Gemini models are exceptional. Like, absolutely just bar none exceptional. I think Anthropic is incredible for CodeGen. Incredible. What I see is, every single company on this list that isn't NVIDIA baking and rolling their own silicon. Yet NVIDIA is up and the rest are down. I told you that I spent time last week at Tesla. I would not be sleeping on this business. I think that it is yet again back into the land of being misunderstood. The only one that I understand why it's down this much is Apple, because it's not clear that they're even baking something in private. There's nothing public, there's nothing private. It just seems like they're transitioning into being a cash cow and getting into sort of that cash harvesting mode. But it's almost weird that the price action is what it is because I would have thought that Google would be up, Meta would maybe be a little flattish to down. NVIDIA sh- is up, but maybe it could be down. Tesla's down, but it should probably be up. Amazon's basically break-even and Apple is down, and I think that kinda makes sense. That's sort of how I read this table. Yeah, I mean, you could also-

Thomas Laffont 26:26 And look what I love, Chamath, by the way, on that, is that, like, now there's debates. Right?

Chamath Palihapitiya 26:31 Yeah.

Thomas Laffont 26:31 And, and you can argue whether, you know, you agree with Chamath or whether you don't. And by the way-

Chamath Palihapitiya 26:34 Well, Zuck's not spending 20 billion 'cause he's, 'cause he's not afraid. (laughs) Yeah, no, let's pull the chart up again here-

Thomas Laffont 26:40 Right?

Chamath Palihapitiya 26:41 ... because I think this is, uh, an interesting way to discuss each of these companies.

Thomas Laffont 26:46 And by the way, guys, the only, the only reason Microsoft is not on this list is because of the limitation of the DOS-era interface of the Bloomberg Terminal-

Chamath Palihapitiya 26:53 (laughs)

Thomas Laffont 26:53 ... where it will only allow you to compare six charts and not seven.

Chamath Palihapitiya 26:56 Right, right.

Thomas Laffont 26:57 But we know that Microsoft is up 13.

Chamath Palihapitiya 26:59 Queue perplexity.

David Sacks 27:00 Yeah.

Thomas Laffont 27:00 Yeah.

Chamath Palihapitiya 27:01 So, you know, when you, also when you look at these, there are some extenuating circumstances here, like Tesla's car sales are down. All car sales are down, and I think that's the piece that maybe isn't being accounted for here, and they're in a transitional period. Apple obviously-

David Sacks 27:16 Well, there's also-

Chamath Palihapitiya 27:16 ... just dropped odd.

David Sacks 27:17 Yeah. There's a lot of regulatory overhead. So, Tesla losing solar and EV tax credits.

Chamath Palihapitiya 27:23 Yes.

David Sacks 27:23 Apple, Apple being told to onshore and stop buying from China, so their supply chain's being disrupted because of tariffs. Those two companies in particular are far more affected than the rest. And even Amazon, you know, there's been some conversation about tariff effect on Amazon. But obviously, that's offset with some of the benefits they've been realizing and promoting, as Jassy spoke in his letter this week, uh, from AI. So, I think that there's a variation here that's probably a little bit more, Thomas, kind of tuned to these conditions that aren't necessarily, call it natural market forces, but are kind of influenced market forces associated with the, the new administration and some of the policy choices that are being made.

Chamath Palihapitiya 28:05 If we were looking at those, number one and number two, which one do you think gets to AGI first? Thomas?

David Sacks 28:11 Well, ******, hold on. By the way, the other thing you should note, Jason, which I find really interesting is nobody's talks about AGI anymore. If you listen to the language of all the companies, it's all superintelligence, which is a much more achievable goal because it's defined as being, you know, multiples more intelligent than a human being.

Chamath Palihapitiya 28:26 Right.

David Sacks 28:26 But I think you're, I think if you actually-

Chamath Palihapitiya 28:29 Sure.

David Sacks 28:29 ... did a search for the number of times AGI is being said today, it's meaningfully less, because I think people have realized that that's not in the offing.

Thomas Laffont 28:37 Yeah. By the way, another lens, Chamath, that I think about on these is, who controls their own destiny of these seven companies in AI? Right? And I would argue Google does.

David Sacks 28:47 Tesla the most. I would argue Tesla the most.

Thomas Laffont 28:48 Right, Tesla does.

Chamath Palihapitiya 28:49 Yeah.

Thomas Laffont 28:49 NVIDIA. And then it's kind of interesting, right? Neither, Amazon doesn't have its own foundation model, right? They're kind of dependent on others, right? Microsoft, 49% does, right? Because of this kind of relationship they have with OpenAI. It's both, you know, uh, they, they own a big share but they don't control it, so there's kind of interesting. And then maybe six months ago, we would have said, "Well, Meta absolutely does." Maybe Zuck's starting to question that a little bit and, you know, it's, it's fun, in my opinion, to kind of bring different lenses to this list. Right? There's the regulatory one that-

Chamath Palihapitiya 29:24 Yeah.

Thomas Laffont 29:24 ... Friedberg was just talking about. I kind of think about, if I was the CEO, do I control my own destiny in this market? Right? And I expect these companies are not gonna want to be dependent on others and are gonna at least want to say, "No, I'm going to control my own destiny whether I win or lose."

Chamath Palihapitiya 29:38 Who's your number one? Who's your number two? If you had to, could only bet on two here to achieve superintelligence, AGI, let's just say, win the AI re- win the AI, uh, big prize, the big prize, superintelligence, AGI, you know, in the midterm, five years. Five years from now, and we're sitting here. Thomas, give me your number one, give me your number two.

Thomas Laffont 29:58 Look, I, I think, to me, number one, I, I still think NVIDIA, right? I don't see the GPU kind of getting displaced. I see additional architectures kind of coming on board, right, and growing the market. But, um, at the end of the day all roads still lead to the GPU for all of these models. So, I would kind of still put, um, kind of-

Chamath Palihapitiya 30:16 Okay.

Thomas Laffont 30:16 ... uh, NVIDIA on that. My number two, more of a dark horse, but I, I would pick Tesla. I do think it has the most potential for vertical integration, right? From all the way, the silicon to the model to actually the hardware, right, that might become super important, not just in cars but in Optimus. So NVIDIA, one. Tesla is my dark horse.

Chamath Palihapitiya 30:38 Wow.

Jason Calacanis 30:39 Stunning. Chamath, who's your number one and number two in the midterm, five years from now we're sitting here on All-In, episode 700?

Chamath Palihapitiya 30:46 Tesla's one and Google's two. And the reason is because they are the closest to having that vertically integrated stack that I spoke about. I think that Tesla has the best vision models. Now with xAI, they'll have one of the best LLMs and reasoning models, and they'll be able to eventually stick that on Dojo. And then all of that will be in all of the physical AI that you will interact with in your daily life, whether it's a robot, or whether it's a car, or whether it's a robotaxi. So that's number one. And then number two, for many of the same reasons, I think Google, because you'll have the Gemini family of models, which just absolutely kick ass. Like, VO3, which we haven't really spoke about, is going to destroy Hollywood, like, in the next year. Like, Hollywood is done, I think.

Jason Calacanis 31:39 Hmm.

Chamath Palihapitiya 31:39 But they're landing model after model. They have the TPU, and the next generation TPU I think is exceptional. They're baking quantum and then they have an entire funnel of billions of people that they can direct experiences to. So Tesla one, Google two.

Thomas Laffont 31:55 Chamath, quick follow-up on that. I'm curious on Google. This is the... 'cause I-I oscillate a lot on this particular name. Can Google win if search declines?

Chamath Palihapitiya 32:05 Yes. And I think that what probably has to happen is... Bear with me when I say this, but if you had to boil down Google's economic North Star metric, right, not the value North Star me- the economic North Star metric would be price per click. And I do think that Google is extremely well-positioned to pivot that to price per token. And I think that they have some emergent classes of physical AI, but they have the largest pool of people where they can generate a price per token value framework through YouTube, through Gmail, through Workspace. I think through search, but probably it's a different kind of model. It re- just requires them to rip the Band-Aid off at some point. But yeah, I think Google can do it.

Jason Calacanis 32:51 I'm gonna go with you-

Chamath Palihapitiya 32:53 I think they could do it.

Jason Calacanis 32:53 ... Chamath. I'm one, uh, my one and two are either Google, uh, or Elon. And I, I'll just say Elon because I, uh, like you, I spent a day up at, um, xAI and I saw what a magnet for talent he is. I got to sit in some meetings and just, he was interviewing people and he was working with that talent, 8:00 at night. There's a lot of people there on a Saturday grinding it out. It was nuts.

Chamath Palihapitiya 33:15 I first went to xAI. In the 15 minutes that I was in the parking lot finishing a call, the kinds of people that were walking in and out of there, you could tell they were big brains.

Jason Calacanis 33:26 Yeah.

Chamath Palihapitiya 33:26 I don't know how... You know what I mean? Like, from every walk of life, they all just looked much smarter (laughs) than the rest of us.

Jason Calacanis 33:32 Yeah.

Chamath Palihapitiya 33:32 It... And some of them were, like, chain-smoking cigarettes and just, like, stressed out. It was crazy.

Jason Calacanis 33:36 I hit a couple of sins, I'll be totally honest. Um, but the reason I say Elon versus Google is I think Elon's in a unique position. I don't have any insider information here and, and, um, I haven't talked about this, so I'm not back channeling from Elon, lest anybody aggregate this. I think what Colossus has done and what Tesla has done, both of these things, Tesla with their own stack of hardware, to your point, Chamath, hardware plus software, plus the user application of FSD and Optimus. Then you put that together with the data, the real-time data of X, formerly known as Twitter, plus, uh, you know, what he's building with xAI and obviously those two companies merged. I think Tesla board, xAI board have to get together, put those two companies together.

Chamath Palihapitiya 34:17 Yeah, I agree. Agreed.

Jason Calacanis 34:17 One's worth a trillion, one's worth a hundred billion. Put them... And just have all that brainpower going in one direction-

Chamath Palihapitiya 34:23 Agreed.

Jason Calacanis 34:23 ... as opposed to Elon tests switching between the two. You do that, I think he wins number one. You don't do that, I think he either gets one or two, and then I think Google, um, is going to have a better search product, Thomas. I think it's a really important point. Do they lose search share? Doesn't matter. What I think matters is are their ads more effective, is their ad network more effective? And I think based on what they know on you from your chat searches and your discussions and what they analyze in your email, just analyzing your Gmail and your surfing behavior in Chrome if they get to keep it, your Android phone if you use it, your YouTube list and what you, how, when you drop off All-In and when you start listening to another podcast, whatever it is, all that data, all that data is gonna lead to an ad network that performs so much better that even if they lose search share, their ad netwo- is gonna continue to grow, and I think it will increase in velocity. So those are the, my top two. Freyberg, I'm curious from your position which one do you think is number one and number two? I saved you for last because you know what we do here? We save the best for last, Freyberg. Go ahead.

David Sacks 35:23 I think there's a difference in how I would kind of lump them. I, I think that Tesla probably has the... It is the best place to invest if you want to have a shot at a massive new industry. So they've got a baseline business in, in obviously the automobiles, but I think this humanoid robot opportunity is absolutely mind-blowingly ginormous, and I don't think that there's a better company on Earth positioned to execute against this humanoid robotics opportunity than Tesla. So, uh, you know, it's sort of, like, I would call it a low probability, high upside sort of call option embedded within that business. And obviously you're paying a premium for that 'cause it is still a very healthy premium you pay for that business. I think NVIDIA, to Thomas' point, I think the common thesis is it is the most protected. The durability of the business is there. But I would argue that there's actually a low probability but very high severity risk to NVIDIA in China. There was just a demonstration last month of a one-nanometer semiconductor manufacturing process out of China. I think the more that we continue to try and isolate China from a policy perspective, the more we are emboldening investment in China-... meaning from the government, from private industry into China to create alternatives to the chip stack, where United States companies, particularly NVIDIA, have a moat today. So, I do think that there's going to be an emergent competitive threat coming out of China to NVIDIA. And just like we were knocked over by DeepSeek, I think we will be knocked over by some semiconductor manufacturing processes, um, coming out of China in the near term. But, uh, the overall kind of-

Thomas Laffont 37:08 By the way, Dave, just on that point, I think-

David Sacks 37:11 Yep.

Thomas Laffont 37:11 ... Sax's work on the diffusion rule, just generally, I don't think has kind of gotten enough attention in the-

David Sacks 37:17 For sure.

Thomas Laffont 37:17 ... rescinding of the diffusion rule, which essentially handicapped our ability to even arm our allies, right, with our semiduct- with our semiconductor technology, um, in my opinion, was kind of a milestone and very important moment, um, to, to try and offset exactly what you were just describing.

David Sacks 37:37 That's exactly right. I mean, there, there, there was a report a few months ago, and I mentioned it on the show, or maybe I didn't, or maybe I sent it to Sax and we talked about it offline. I, I can't remember, but it was about a $40 billion investment being made in developing competitive semiconductor manufacturing full stack solutions out of China. So, I, I do think that the lithography IP moat is being crossed in China. I do think that China is developing actually new technology for, uh, DUV and EUV systems. I, I do think that there's a risk, uh, to NVIDIA's core. Now look, NVIDIA's such a durable business. There's great moats, great advantages, but we're creating every incentive for an alternative to NVIDIA to emerge from China. And then my, my third kind of categorization would be what's the portfolio, uh, solution? I think that's Google. I think that there's a diversification of high-beta bets inside of Google, of any one of which could have, call it a $1 trillion market cap outcome, ranging from Waymo to quantum computing, to the biologics work that, uh, Demis is working on out of, um, Isomorphic. Uh, there's a number of things that do not get a lot of attention at Google. So yes, there's a, there's a core business that, that may be at risk, Thomas, but I think that there's a, a portfolio of options you get at Google, and you just need any one of them to hit to kind of make up for the loss. But I do think also Sundar in my interview with him, which we put out a couple of weeks ago, is very thoughtful about where search evolves to, and he is being, I think, reasonably aggressive in, in trying to evolve the search product architecture to meet the market, to meet the consumer. I, uh, do, do give him credit for that. So Google would be in a good place for me, uh, as an overall kind of pick in that set of options.

Jason Calacanis 39:20 So just to be clear, NVIDIA one, Google two, or NVIDIA, Tesla?

David Sacks 39:23 Like I said, I think, uh, in terms of, like, having the right sharp ratio is how I would think about it, the alpha and the beta adjusted returns, I would put Google number one. I would probably put Tesla... Uh, Tesla's valuation I think already has a premium associated with those options.

Jason Calacanis 39:38 Sure, yeah, yeah.

David Sacks 39:38 So I don't know... Yeah, so I don't know if I would really pay that premium. I think, um-

Jason Calacanis 39:41 Well, a- aside from the valuations, let's take valuations out of it, just the, the game here is who wins the AI prize five years from now?

Thomas Laffont 39:49 Yeah. That's how I understood it as well. Yep. So valuation-

David Sacks 39:53 Right.

Jason Calacanis 39:53 ... irrelevant.

David Sacks 39:54 Okay.

Jason Calacanis 39:54 Valuation irrelevant. Who wins the AI prize? One, you're saying Google. Two, you're saying Tesla.

David Sacks 39:58 I think Google's in such a position. I, I mean, look, Demis-

Jason Calacanis 40:01 Interesting.

David Sacks 40:01 Uh, Demis, I think has been fairly coy, uh, about where they are. They obviously promote Gemini 2.5, but there's a lot still coming.

Jason Calacanis 40:10 Mm-hmm.

David Sacks 40:10 And it's... A- and, and as Chamath pointed out, it's not just LLMs. There's a pretty sizable family of models, including, uh, a lot of these, um, graph-based models that are being used in really novel applications that no one else is even close to, no one's spending time on. I mean, some of the weather forecasting, it might seem small and trivial, but it's a demonstration of Google's competency in, in core model development that shows, uh, an understanding and a depth of research and work that goes well beyond LLMs. So I'm pretty bullish on the depth of talent, the full stack.

Jason Calacanis 40:43 Yeah, and whatever they learn there could apply to Gmail, could apply to Search, could apply to Ads, could apply to YouTube algorithm, right? It's just goes up and down. Yeah.

David Sacks 40:50 Yeah. From a product perspective, I do think you see this kind of multi-model emergence that, that we're now seeing, that no one talks about the single model that sits behind the application. There are multiple models that work together. And obviously, this agentic architecture unlocks another layer of not just kind of solutions to complexity.

Jason Calacanis 41:12 Sure.

David Sacks 41:13 And so there's, there's quite a lot, I think, that's emergent here, um, that Google will start to kind of benefit from, uh, in the year ahead.

Thomas Laffont 41:20 I mean, for those of us, you know, who love tech, right? If we, if we step back for a minute, I really feel like to use the analogy of this podcast, like we are now at the WSL World Series of Poker, right? We got seven companies around the table. The stacks are trillion in size, right? And all of us are gonna get a front row seat to see what happens over the next five years. I mean... And on top of that, we're gonna get to analyze, bet ourselves on who we think is gonna win. We know there's some other companies that are pushing to get at that table, right? With some sharp elbows. I mean, what a time to be doing-

David Sacks 41:55 But Thomas-

Thomas Laffont 41:55 ... what we're doing.

David Sacks 41:55 I don't know if I love the analogy 'cause I don't think... First of all, it's a zero-sum game where there's this X number of chips and someone ends up with all the chips. I do think you could see as an example, just talking about the scenarios we, we just described, Tesla developing an extraordinary humanoid robot business that's worth a trillion dollars. Google building, you know, to Chamath's point, a media empire based on generative AI and, and media, and then, you know, NVIDIA building an entirely new chip stack that everyone's participating in. So all of them i- in an ecosystem-based way could, could be major winners here.

Thomas Laffont 42:26 Yeah, you're right. I, I didn't mean it in the zero-sum nature of it. I meant it more in the, in the stakes, right?

David Sacks 42:32 Yes.

Thomas Laffont 42:32 And, and the competition.

David Sacks 42:33 And there's a lot of hands to be... I like the analogy 'cause there's a lot of hands to be played and there is a price pool, right? And you, and you could have three or four people at, at that table.

David Sacks 42:41 One thing I just want to point out here is just...

Jason Calacanis 42:44 Speaking of regime change, what is going on at Apple? Like, they... Siri was just the early idea of an AI agent. It's just totally ڈس گلاضیٰت. It's disgusting, it doesn't work, it's embarrassing. And then their biggest developer conference, they're-

Chamath Palihapitiya 42:57 But this has happened, Jason...

Jason Calacanis 42:58 ... redoing the UI? Like-

Chamath Palihapitiya 42:59 This has happened-

Jason Calacanis 43:00 Is it time for regime change at, at, at Apple?

Chamath Palihapitiya 43:03 No. This has happened many, many, many times in many industries before, which is that companies that were stalwart organizations transition themselves from being a growth business to being a cash cow. And these are well-documented transitions, and it requires an extremely brutal reset if you wanna shake that up.

Jason Calacanis 43:28 Yes.

Chamath Palihapitiya 43:29 I think that the same thing that I think you have to respect Apple for, which is stability, the duration of some of their best, longest-serving executives are there for 20 and 30 years. On the scale of innovation, it's a horrible thing, and the reason is that we all just get old, our skillsets become rusty, and we don't have the energy or the capacity to think about what a- the future actually looks like because we are not living it. And then what happens is, you task those decisions to people that you try to hire, but, you know, you saw it in the clip with Sam. Even in all of that crazy recruiting chaos that's happening right now for these brilliant machine learning and AI people, maybe that's a fight between OpenAI, Meta, a- and maybe Google.

Jason Calacanis 44:20 Mm.

Chamath Palihapitiya 44:20 But what you don't hear is Apple. So who's Apple getting? I have to think that Apple is not getting any of those people, so by the time you end up at Apple, it's just a different caliber of person.

Jason Calacanis 44:30 That is true.

Chamath Palihapitiya 44:31 And they're living inside of a cash cow organization that's going to optimize for "don't make mistakes".

Jason Calacanis 44:38 Right. And-

Chamath Palihapitiya 44:39 But that's hap- it's happened to HP, it's happened to Lotus, it's happened to Intel, it's happened to General Electric, it's happened-

Jason Calacanis 44:47 AOL. Uh-oh. Yeah.

Chamath Palihapitiya 44:47 ... to umpteen companies.

Jason Calacanis 44:49 It's just shocking-

Chamath Palihapitiya 44:49 And it's hap- and it's happening to Apple, so we should just not sweat it and move on.

Jason Calacanis 44:54 I don't know. Thomas, what are your thoughts? I mean, it's kind of shocking with all that cash, and they don't acquire anything. They had Project Titan, $10 billion, a- to build their own car, and they just shut it down. Imagine if they kept going with that. You think regime change time? Maybe Tim Cook retires and puts somebody who's a product person in charge of it? Or maybe they should merge with Tesla (laughs) and put Elon in charge of it all? But there seems to be no new products coming out of there. Like, it's absolutely, uh, confounding that they're optimizing for share buybacks and earnings per share instead of having some amount of that money go towards innovation and acquiring companies. Biggest acquisition is Beats? Give me a break.

Thomas Laffont 45:33 I mean, it's interesting, right? For me, I... And I've studied Apple basically my whole career, and it's kind of interesting, right? Because if you think about the, their defining competitive advantage, right? Was the integration of hardware and software that led to the beautiful MacBook that we're all using, it led to the iPhone and... Right? The fact that they were so coupled between hardware and software, the user interface, you know, et cetera. And I think it directly led to them winning, let's call the, The Mobile Era, right? But I think back to Tomas' point, and I think the analogy holds, in AI, they're the opposite, right? They don't control... I don't... Uh, you know, the silicon, they don't control the underlying models, um, and so now they're back to maybe, you know, using a historical analogy, the PC makers who didn't control the OS.

Chamath Palihapitiya 46:20 That's right.

Thomas Laffont 46:20 So, I, I think the good news for them is, look, they still have a monopoly on users, they have three trillion of market cap to kind of play with, so I think it's way too early to count them out. But I think, you know, the market... L- let's posit, what's the most extreme thing that they could do, right? Just for, just for intellectual's sake, right? Uh, buy OpenAI for 500 billion. I, I'm just... Kinda put a crazy thing out there, right? So, you think, "Okay, that's the most extreme." Well, is it even that extreme? And what would Apple's stock do that day?

Jason Calacanis 46:52 Go up.

Thomas Laffont 46:53 That's my view, too, right? I actually think it would go up, not down, even if they did something like that. So, I do think they need to be kind of aggressive. I do think, to your point, I think, Friedberg, it is important that, you know, all seven of these companies could actually win and do well, right? That, that is an absolute possibility. But I, I would love to see them be a little bit more aggressive. I mean, you guys remember when Steve Jobs bought FingerWorks, right? It was this tiny acquisition, they made this little track pad that you could use your fingers on, no one figured out why they did this, and then it turned into multi-touch and scrolling, right? So, I think it's, it's gonna be fascinating to see what they do.

Jason Calacanis 47:31 Thomas, that was a great question I was about to ask. If Apple could do one thing, they could do one internal project or buy one external company, maybe we could do both, around the horn, what would we advise them to do? My number one is build a humanoid robot. Like, how does Apple not have a humanoid robot? That seems like that's obviously the next giant consumer market, is having Optimus or Figure in your house. Friedberg, I'm gonna go to you first, since I went to you last, last time. Is there a product that they could do, that they could build, that they would be uniquely suited to, that would turn this all around? If you could pick it on their roadmap, what would it be?

Thomas Laffont 48:06 I do think there is, I do think they're doing it, and I do think they have a shot at winning, which is this kind of ambient AI assistant. I don't know about you guys, I must own 30 friggin' Apple devices. Uh, I have many Apple computers I use in different offices, I have phones, I have many AirPods, I got everything. Watches, everything. Uh, I'm ubiquitous on the Apple platform, so I'm an easy transition into this if it works. So, as everyone races to build kind of the a- agentic AI assistant that, uh, is sort of in my ear all the time or available, where I don't have to stare at my friggin' phone like this, um, it is a great unlock for humanity, it's a great unlock as a consumer, it's feasible technically, and I'm sure Apple, of everyone...

David Sacks 48:50 ... that we've referenced today is best suited to both access the consumer design and engineer the solution in a way that can be truly transformative. I think it references a little bit what Jony Ive and Sam Altman have been talking, uh, about doing, but I do think that this is exactly the direction Apple is headed, and I do think that they've got a very great shot at, at winning at it. I don't think they need to own the full stack to be successful here.

Jason Calacanis 49:16 Got it. Okay, so we got Optimus, we got the device you're talking about with this ambient assistant is part Siri and part maybe a pendant that records your behavior in the world and gives you feedback to it, and that's what they're calling a puck, perhaps, that Jony Ive has made, or these pendants that record everything. Thomas, what's your thought on the one product they could create?

Thomas Laffont 49:36 To that point, um, it, it's interesting to think that the AirPod business at Apple is 3X OpenAI's revenue base today.

David Sacks 49:44 That's right.

Thomas Laffont 49:45 And that's-

Jason Calacanis 49:45 Crazy.

Thomas Laffont 49:45 ... just the AirPod business.

David Sacks 49:46 And by the way, let me, let me just say one thing about this. We all think about devices in the context of a single device being an assistant. I think if there are more devices integrated into our lives, and the assistant is ethereal and ubiquitous amongst the devices, it's almost like, uh, the Star Trek: Next Generation. You walk in, you say, "Hey computer," and there's always a device available that's doing things. There's always a device observing. There's always a device able to take care of things for you.

Jason Calacanis 50:13 Hm.

David Sacks 50:13 Whether it's in your ear, whether it's your phone, whether it's your watch, but basically these devices all, instead of acting independently, they all know what you've been asking or talking about with the other devices. And so you could get in your car and you could pick up, you know, the conversation you were having, you know, while you were sitting in your office in front of your computer to do work. And so the agent effectively is almost like this ethereal ambient assistant. So everywhere you go, the agent is there. Um, and so-

Jason Calacanis 50:38 They could even be in a candlelit bath with you, Friedberg, could be in there. (laughs)

David Sacks 50:43 They could... Well, I mean, by the way, think about also-

Jason Calacanis 50:45 Yeah.

David Sacks 50:45 ... you know, it, it, it know- having identity, so it knows who you are.

Jason Calacanis 50:48 Certainly.

David Sacks 50:48 But I could be in your roo- in your home, J-Cal. Not that I would ever get invited to your home, but let's say I was there.

Jason Calacanis 50:53 Yeah.

David Sacks 50:54 Uh, you know, I could walk into the, the living room and there's your puck and it starts talking to me 'cause it knows-

Jason Calacanis 50:59 It's you.

David Sacks 50:59 ... who I am and yeah, it's like, it, it knows me. Yeah, so there's-

Jason Calacanis 51:01 Or you and I.

David Sacks 51:01 ...

Chamath Palihapitiya 51:02 (laughs)

Jason Calacanis 51:02 ... c- I have a bath for two. You and I could be-

Chamath Palihapitiya 51:03 (laughs)

Jason Calacanis 51:03 ... a candlelit bath for two and-

David Sacks 51:04 We could-

Jason Calacanis 51:04 ... make it happen. (laughs)

David Sacks 51:05 And it would know the diff- wh- when each of us are fighting over what music we wanna play-

Jason Calacanis 51:08 Yes.

David Sacks 51:08 ... the assistant will, you know, hear out the debate and make a choice.

Jason Calacanis 51:11 Make a shared playlist.

David Sacks 51:12 That's right.

Jason Calacanis 51:12 Chemot, do you have a, uh, a device before we go on to IPOs here? Do you have a device or an angle for Apple to go after if they were truly ambitious? Or maybe they are and it's just in stealth. What do you think? You think it's the goggles, the glasses? You think it's a pendant? You think it's Optimus? What do you think?

Chamath Palihapitiya 51:26 I don't think they have any chance of anything.

Jason Calacanis 51:29 Okay. (laughs)

David Sacks 51:29 (laughs)

Jason Calacanis 51:29 Great. Love it.

Chamath Palihapitiya 51:30 I would take the exact opposite of what Friedberg says.

David Sacks 51:33 (laughs)

Chamath Palihapitiya 51:33 Look at this chart, and I'll tell you why.

Jason Calacanis 51:35 Okay, here we go. Great discussion.

Chamath Palihapitiya 51:36 This chart is not, this chart is not a strategy. So, this is a chart of Apple's revenue, and what you see is iPhone has completely stalled out. And so to Thomas' point, where do you make money? You make money in other hardware. This is not a strategy of success. This is a strategy of inefficiency. "I lost my AirPods, I need to buy a new pair. Oh, the cable's changed, I need to buy a bunch of those." This and that. And a this and that strategy is not a strategy. It's a tactical play for revenue optimization in the short term. A company that focuses on this kind of revenue growth is not capable of creating something that's exceptionally-

Jason Calacanis 52:13 Hm.

Chamath Palihapitiya 52:13 ... unexpected. That will come from a new company who has no ties to the past, has no nostalgia on the fact that we're gonna swap out the connector type and, you know, book another billion dollars. The th- what Thomas said is an indictment, actually, about their ability to do it. When your AirPods business is two or three times bigger than OpenAI, what there is internally when you try to have a strategy meeting about what to do is derision about OpenAI because you're like, "That's small."

Jason Calacanis 52:42 Mm-hmm.

Chamath Palihapitiya 52:42 "And even our AirPods business is three times big." That's what some smart-ass MBA will say in that meeting, and it'll shut the meeting down. So, how do you expect that culture to then all of a sudden get their act together? I think it's exceptionally hard.

David Sacks 52:58 It's a good point.

Jason Calacanis 52:58 And here's the clip! On cue! Play the clip, Nick! It's a great point. Here's the clip.

David Sacks 53:03 I'm Apple nostalgic.

Jason Calacanis 53:05 Me too. Man, bring Steve Jobs back. Watch this lunacy.

Journalist/Interviewer (Apple segment) 53:08 You probably saw that Jony Ive is linked up with OpenAI to create some sort of future AI device.

Apple Executive (interviewee) 53:14 Yeah, I don't know what that is.

David Friedberg 53:15 I, I don't either. Yeah.

Journalist/Interviewer (Apple segment) 53:16 Is this a space that Apple's looking at? Is this a space that goes beyond what you have in the current lineup of devices, something that is more personal? Maybe you wear it, glasses?

Apple Executive (interviewee) 53:28 I, I think, I mean, I think we have some extremely personal wearable devices. If you want something that's, uh, aware of your environment with, with audio, I think you're, you're wearing one right now on, on your wrist. Um, if you want something that you can capture the environment with and see and also receive visual content, you might just have one in your pocket right now. Um, are there other form factors that can make sense to AI? Uh, sure, but, uh, pretty hard to beat something that's, uh, with you all the time and glanceable or, you know, provides a nice screen that you can interact with. Um, so, uh, yeah, I, I don't know what they're working on.

Jason Calacanis 54:06 What do you think, Chemoth?

Chamath Palihapitiya 54:08 Again, I think s- I wanna be very clear about what I'm saying. That is a very competent, Craig Federighi, very, very competent executive. And whoever the person beside him is, that guy's, I'm gonna assume competent as well. They're competent at making money the way that they've made money for the last 17 years with no meaningful disturbance. And I think it's just something to appreciate that after 17 years of unmitigated linear success, it's very difficult to retool yourself. It's like asking Michael Jordan to go and all of a sudden become an all-star baseball. It doesn't work.

Jason Calacanis 54:50 It's-

Chamath Palihapitiya 54:50 And so, I think, I, I think it's okay, though. This is my point. It's okay, guys, to have creative destruction of companies. Like, there is probably a version of us-... blathering on about HP and being nostalgic about the transistor radio that they made, and the, you know, HP 12B calculator that they made, and, "Oh my God, why can't they figure their shit out?" And where are we today? HP doesn't even exist. It's okay.

Jason Calacanis 55:15 I mean, just Thomas, the fact that they launched Siri, they bought that company, and Siri can't do anything other than, like, an alarm, it can barely play a song, it barely can do directions.

Chamath Palihapitiya 55:28 (laughs)

Jason Calacanis 55:28 I- I- I mean, literally, (laughs) we're in year, like, 27 of Siri and it can't do anything. And then I have the, uh, the Google and Grok voice, and when I turn that on, it does whatever I want. It will load on my Pixel, it loads other applications, fires it off, does specific tasks, and it- it's absolutely just ɡrazziadą.

Chamath Palihapitiya 55:46 On your what?

Jason Calacanis 55:46 Thomas?

Chamath Palihapitiya 55:46 On your Pixel?

Jason Calacanis 55:47 I have a Pixel. When I, when I flip open my Pixel, I have it-

Chamath Palihapitiya 55:51 Chamath, I- I would argue to you-

Jason Calacanis 55:53 It's nine inches. I have the Pixel 9, Chamath. It's the Anaconda of smartphones. Pixel 9 Foldable.

Chamath Palihapitiya 55:58 Hmm, got it.

Jason Calacanis 55:59 It's the greatest assistant ever. It's what Siri... It's what Steve Jobs showed Siri. I had you at nine?

Chamath Palihapitiya 56:04 He had me at Anaconda, yeah.

Jason Calacanis 56:05 I had you at nine inches.

Chamath Palihapitiya 56:06 Yeah.

Jason Calacanis 56:06 Hey, we can all aspire, maybe get Roman.

Chamath Palihapitiya 56:08 Thomas, what were you gonna say?

Jason Calacanis 56:09 Get that extra, get that extra inch, Thomas. Go ahead.

Thomas Laffont 56:11 Chamath, I would argue to you that I think this management team has done it once, and it's in the transition of their gross profit base, which doesn't show in the chart that you just highlighted, but was something that I kind of lived as an analyst covering this stock for a long time, where if you remember over a decade ago, 90-plus percent of their gross profit was a one-time hardware sale on the iPhone. And no one thought that they would ever be able to get away from the drug of selling that one iPhone unit, right? And cut to, you know, over a decade later, it's 40%, right? And I don't think they get enough credit for actually transitioning from hardware to a recurring gross profit base. But look, y- you might argue that that was an easier pivot and challenge than what they're gonna face, and so let's see whether they can do it. The other thing, guys, I wonder about, um,

Thomas Laffont 57:02 let's... I know we wanna talk about IPOs, but I do wonder whether Zuck buying Scale for 15 billion gives air cover for other companies to really start being aggressive, right? And- and to me, as we think about Circle and CoreWeave, two companies that have gone IPO recently, it's... I- it's kind of amer- amazing, kind of numerically, that the charts are almost identical, even, (laughs) you know, on a dollar basis, uh, on a share price, right? Because to me, what it says... We were talking about the dispersion of the Mag 7 before, right? Which are gonna do well, which are not. I expect we're gonna have a lot of opinions on this over the next few years. And frankly, they may change. We, you know, we may think Apple one way today, it may change in a month, right? But I do think the market is starting to realize that there is dispersion, that AI might create some all-winners, or some winners and then some losers, right? And it's starting to think about, "Okay, how do I want to be positioned for the next five years? What are big open-ended growth opportunities?" And here comes two companies, one levered to crypto, right? And the other levered to AI. So, I don't think it's a surprise. To me these things are intertwined.

Chamath Palihapitiya 58:11 You're 100% on, because here's the thing, the average profit margin of the S&P 493 is... Drum roll please. 12%. The average growth of the S&P 493 is... Drum roll please. Single digits. So, to your point, why would you be long any of these 493 companies that may turn around and one day just get decapitated by something you don't even know, that's getting cooked up by a couple of kids in a garage using OpenAI or Grok or what have you? It just makes a lot more sense when you find investable companies in the big themes of the future to, at a minimum, hedge, right? Be less long the past, and frankly make some bets about the future. And I think that that's where you're seeing these IPOs just absolutely rip... What is a better comparison, in my opinion, are the companies that are truly levered to the future themes of AI and crypto, versus any of these IPOs that have happened of companies that are not. And I think what you see is there's a dispersion there as well. And they are being treated almost as similarly, Jason, as the S&P 493.

Jason Calacanis 59:22 Mm-hmm.

Chamath Palihapitiya 59:22 It's like, "Yeah, it's good. Yeah, it's fine." They get some reasonable gains. But if you're levered to any of those two- two trends, you're off to the races because it's just so disruptive, people don't want to be bag holding these old legacy companies.

Jason Calacanis 59:37 We're already into our next topic, which is IPOs and M&A. Lina Khan is no longer in the building, and M&A is back on the menu, as are IPOs. As Tom has pointed out, three IPOs, March 28th, June 5th, and June 12th, CoreWeave, Circle, and Chime. Obviously, CoreWeave up 4X after going public, $81 billion market cap, absolutely stunning. Circle, 25X over-subscribed, 6X from its opening price, $48 billion market cap. Chime, that's a neo-bank, like New Bank, which is already public. That was up 40%, uh, in its IPO price, but then it went down 20%, $12 billion market cap. On the other side of the ledge, we have a ton of M&A this year. So when you look at what is happening under the Trump administration, look at what's actually happening, the game on the field is three major IPOs, uh, and then massive amounts of billion-dollar acquisitions. Obviously, we talked about Google acquiring Waze for 32 billion. Uh, SoftBank bought Ampere, I don't know what they do, 6.5 billion. OpenAI bought two companies, one for 3 billion, one for s- 6.5 billion. Developer CoPilot, Windsurf, 3 billion, Jony Ive's I-O, making some sort of a puck or hardware device. Databricks bought Neon for a billion. Salesforce, uh, did an $8 billion acquisition. And then interesting, DoorDash bought two companies, Uber made two smaller acquisitions. There is a ton of activity here. What does it say about the market, David Friedberg, that we're seeing so much M&A and these amazing IPOs coming out, all within the last three, four months?

David Sacks 1:01:08 Okay. So let me just follow up to a comment Chamath made and ask Thomas his view. I have a, a theory, and I haven't looked empirically to see if it makes sense. For most of the S&P 500, the fundamental profit growth is pretty anemic, with the exception, obviously, of a couple of the big tech outliers, the Mag 7, and a few others. But for, for the majority of the S&P, this is a pretty kind of anemic environment relative to the transitions that are underway in the world, fundamentally with, with AI and ancillary technology. So are the institutional fund managers hungry for access to some of these new, you know, high growth offerings and they have been held off because... And just to kind of go back, I think it was around 2008 or so, public institutional fund managers started to do crossover investing into private equities and that scaled up and scaled up and it, it entered obviously a stage where it was a heavy flurry, uh, a lot of activity and a lot of crossover late stage investing, um, you know, right until 2021 when things started to pop, 2022. And because they were overexposed with their private equity portfolios relative to their public equities, they came out of 21/22 with the market declining and they now had a higher concentration of private equities than they were supposed to have. And so they have been kept out of the market for the last three or so years, of the private market, and now as there kind of is pent up hunger or pent up demand for new issuances, for high growth tech issuances. Is that what we're seeing? Is there kind of this pent up demand because they've had to stay out of the, the private market for three years? And if there is, obviously it bodes well for late stage growth startups that are looking to go public because the demand will be there. And I think the reports were that the Chime IPO was like 18x over subscribed.

Thomas Laffont 1:02:59 I think you're right, and something that, you know, I've talked about with you guys and, uh, was a, was a big conversation at our, at the All In Summit last year, was the health of the, uh, private ecosystem, right? And we talked about the concept of, look, if you put a dollar in, you need to get a dollar out, right? And so I do think that we're starting to see a healthier market where we know a lot of dollars have gone in, but now we're starting to see some dollars coming out. So I think that's both in M&A, by the way, and it's also in IPOs. So I think that's one element. But I also think the second element, which is where the tailwind of the mobile and SaaS era, right? And even if you look at the SaaS companies, we kind of put this together in our deck when we were preparing it for our conference la-, um, this week. Chamath, I think you'll find this interesting, right? If you look at SaaS, in 2021 the median growth rate for SaaS companies was 17% and a quarter of those were growing over 25%.

Chamath Palihapitiya 1:03:56 Mm-hmm.

Thomas Laffont 1:03:56 Okay? If you look at SaaS today, the growth rate has been cut in half, 17% to 9%, and only 5% of that cohort is now growing above 25%. So I think, Dave, what's clearly happening, right? Is other sectors which were predominantly seen to be growth are now slowing down, right? So that's kind of one piece. So the market can no longer just rely on saying, "Oh, I'm just gonna own the best SaaS index, right? For the next decade and I'll do great," because those companies have really slowed down. And I think it's starting to look forward and think, okay, now over the next five to 10 years, what are the companies that can compound at maybe 25% per year over that timeframe? And I think companies like CoreWeave and Circle and Chime, by the way, and others are gonna kind of fill that gap.

Chamath Palihapitiya 1:04:46 I, um, I really like this chart. If I had to guess about what has changed from 2021 to 2025, is that most companies have realized that buying yet another vertical software solution is not gonna help their business. That it typically adds bloat, it adds cost, and it adds people. And I think starting in 2023, what people started to guess is at some point in the near future, you're going to have some AI way of rewriting all of this vertical software. And I think that's why it stopped growing. I don't think this SaaS market ever had the return on equity that it was supposed to. And I think so many companies have woken up from this hangover saying, "There's got to be a better way." It can't always be yet another tool, yet another program, yet another multi-year delay, yet another price escalator. And I think that that, the jig is totally up for software.

David Sacks 1:05:56 You're referring to the sales force and the SaaS category, Chamath, and what you're doing at 80 90 specifically, yeah?

Chamath Palihapitiya 1:06:04 Well, it's, it's not just us, but like if you look at anybody that's rebuilding software, it is so much easier to rebuild software from scratch today. Like my team of 30 people can transact hundreds of millions of dollars of work, not because we are so prolifically amazing, but frankly because, well I think the team is good, but honestly because the underlying tool chain gives you a level of leverage. And so if you rebuild the software development life cycle using these tools, you can't help it but become much more efficient. And you can't help it but deliver custom solutions that are meaningfully cheaper. And I think, Jason, if you look at the entirety of the software that runs the world, we're gonna rebuild it, soup to nuts. All of that-

David Sacks 1:06:52 And the tool you're referring to, just for the audience, is the AI copilots that are making, that are contributing 30, 40% to code bases-

Chamath Palihapitiya 1:06:59 No.

David Sacks 1:06:59 ... at Microsoft and Google.

Chamath Palihapitiya 1:07:00 Not, less, less specifically that because-

David Sacks 1:07:02 Okay.

Chamath Palihapitiya 1:07:02 ... those are, those are good for individual people but the software development life cycle is more the horizontal end to end of making things.

David Sacks 1:07:09 Got it.

Chamath Palihapitiya 1:07:09 So-What we do internally at 8090 is we have an entire process that starts from the PRD all the way out to the functioning code, and we use different techniques at each step. But what you get is a 50, 60, 70% increase for- at each step, which then compounds.

Jason Calacanis 1:07:26 Yes.

Chamath Palihapitiya 1:07:26 And so you have the ability of a team that would otherwise be able to service tens of millions of dollars, be a team that can service hundreds of millions-

Jason Calacanis 1:07:34 Massive leverage. Got it.

Chamath Palihapitiya 1:07:34 ... and then a team that would otherwise service hundreds can service billions.

Thomas Laffont 1:07:37 Let me ask you guys your response to this theory. If there is gonna be this kind of accelerated, call it custom software rebuild of business models, and you take the S&P 493, do you think that we enter an era where there is a similar dispersion as we're talking about seeing in the Mag 7 with the S&P 493, where there are going to be probably the biggest money-making opportunities for investors that we've seen in decades between those that do adopt and do rebuild using AI and those that don't-

Chamath Palihapitiya 1:08:14 Nailed it.

Thomas Laffont 1:08:14 ... or are laggards?

Chamath Palihapitiya 1:08:15 100. 100% nailed it.

Jason Calacanis 1:08:16 Absolutely.

Chamath Palihapitiya 1:08:17 I o- I had a call yesterday with one of the largest private equity funds in the world, hundreds of billions of dollars under management, and we're doing something with them at 8090 with one of their most important assets. And when you're an owner of a business and you can direct very specific change and you can rip out hundreds of millions of dollars of software licenses and replace it with tens of millions of dollars of highly customized software, it's an enormous lift to OpEx and business model quality. So why doesn't it happen more? The reason it doesn't happen right now for the S- S&P 493 is that the IT organizations inside all companies essentially speak a different language than the CEO, the CFO, and the board. So if the CEO, CFO, and the board of directors of the S&P 493 speak English, the IT organization speaks Mandarin Chinese and you get away with saying all kinds of bullshit. I'll give you an example. I went to a CIO conference. One person that I met, an $18 billion a year IT budget. What the fuck does that actually even mean to spend $18 billion a year on IT? I'm not saying that this is a Mag 7 company, guys. And when you take that example and you multiply it by 50 and 100 and 493 examples of people spending money, there's an entire cartel of influence that's been built in software that's gonna get undone because you're not gonna be able to justify it, Friedberg.

Jason Calacanis 1:09:58 Absolutely correct, Chamath, and the response from the SaaS industry is changing from the per-seat model as the number of employees at these companies continues to get lowered. Obviously Microsoft, a lot of layoffs, Andy Jassy talking about layoffs. They're moving from the per-seat model. They're not taking this, uh, laying down. Uh, they know that people are gonna make custom software, so what they're doing is they're moving to a consumption model. So you're seeing people charge per call, per customer support call, et cetera-

Chamath Palihapitiya 1:10:26 I know, but that doesn't work.

Jason Calacanis 1:10:27 ... because they can't sell into that a- Well, it's-

Chamath Palihapitiya 1:10:28 I'll tell you why it doesn't work, Jason.

Jason Calacanis 1:10:29 It's working in combination... Hold on. Hold on. Let me finish. The other thing they're doing is they're dramatically lowing the number of people and the developers they have on their team, and then a lot of what's happening in the background is the third piece they're doing is they're starting to, uh, do roll-ups and people are starting to talk about, "How can we take, you know, 20 of these SaaS companies, lower them, just like you're doing, to compete?" Chamath, your thought on the-

Chamath Palihapitiya 1:10:51 No. I was just gonna say-

Jason Calacanis 1:10:52 ... on that three-part playbook.

Chamath Palihapitiya 1:10:53 Well, I just wanted to comment on this, like, consumption-based pricing. It doesn't work. And what I mean is you can have some adoption in the short term. The best example is Snowflake. But in the long term, it destroys your business and the reason is because you don't know which data's valuable and you're not gonna put up with a variable business model that increases more and more cost because you need to trap everything. And so what happens is all of these other companies develop around you. People go back to Postgres. People go to Supabase. They find all of these ways of saying Snowflake makes no sense and the reason is because in this world, nobody's gonna pay consumption 'cause you're like, "How do you expect me to, you know, hold and store and pay for terabytes and terabytes potentially a day of data?" It's not sustainable.

Jason Calacanis 1:11:40 We'll see if Intercom, Salesforce, HubSpot, we see if all of those people start, Slack, start losing their customer base or if they lower their pricing to make it just too easy to keep those systems in. Thomas, your thoughts.

Thomas Laffont 1:11:51 Yeah. So two quick thoughts. Uh, number one, Chamath, to put a kind of a mathematical frame on this, right? We know that Anthropic is kind of the level zero of code generation. They're, they're doing incredibly well at powering companies like Cursor, right? I think, and this is order of magnitude correct, that Anthropic in Q1 added 70% of the net new ARR in the SaaS industry, right, defined by public SaaS companies, right? So let's just think that the company in AI that is most powering the disruption-

Chamath Palihapitiya 1:12:21 That's incredible.

Thomas Laffont 1:12:21 ... of SaaS added three quarters of the net new of the entire industry, right? So that's-

Jason Calacanis 1:12:25 Mm-hmm.

Thomas Laffont 1:12:25 ... kind of point number one. I think, Friedberg, point number two, I think what we're seeing in the Mag 7, right, where we're starting to have debates about who's well-positioned and who isn't, who's gonna win and who isn't, right, is actually, as it was in the past five years, gonna be a broader lens into the S&P 493. I think-

Chamath Palihapitiya 1:12:43 Yeah.

Thomas Laffont 1:12:44 ... inside of boardrooms, inside of every investment committee, you're gonna see the exact same conversations that we've been having about the Mag 7, right? Who, who's well-positioned? Who can win? What are the management teams, maybe like Zuck, that are being aggressive and bold and capturing the opportunity and which are the ones that are not? So for me as a stock picker, right, I think over the next five years, it, I couldn't think of a more interesting time where we're actually gonna see dispersion between winners and losers.

Jason Calacanis 1:13:12 And do you think that these roll-up models make sense? So you've probably...

David Sacks 1:13:16 ... heard, uh, and I don't know if you guys have considered this, but obviously some fund managers are putting together pools of capital to go out and buy businesses that they can then apply their knowhow, their... bring in smart people in AI to then create a category killer and go after that market. And are you guys participating in that? And how do you kind of view that opportunity? Are all the public companies basically too mature or some of them gonna kind of go after this type, this model as well?

Chamath Palihapitiya 1:13:45 It goes back to whether you can attract the talent to go and do these things. My advice to this large private equity firm is, you can probably try to stand up your own AI org but I suspect you're going to get the person that didn't get an OpenAI offer, didn't get a Meta offer, didn't get a Google offer, didn't get an 80/90 offer, then didn't get an Apple offer and then that's the person you'll hire. How good that person will be? Who the hell knows? I think the problem is that even if you take some of these kind of meh industries and roll them all up, you ultimately have to find a buyer who wants to own that business after you. So the question is like if you were to buy a bunch of accounting firms or law firms or IT services firms and you do an incredible job, who wants to buy that in seven years? Meaning, if you talk to like... If you went to the OpenAI demo day, there was this really interesting chart where Andrej Karpathy talked about integrating Google login into one of his apps, I think it was the... his menu gen app. And the comment he made which profoundly hit me is like, "Why am I doing any of this? Why isn't this just one click behind the scenes?" And you could take that generalization and apply it to all of IT services. Why does any of that exist? Why isn't it all one click? And eventually, if these agents become smart enough, the fear that I have is that there is no terminal buyer for many of these companies.

David Sacks 1:15:16 Mm-hmm. But they could still be public, Chamath. I mean, they could, they could trade at some multiple of cash flow and you're basically arbitraging the cash flow.

Chamath Palihapitiya 1:15:24 Yeah.

David Sacks 1:15:24 But I'm not talking about-

Chamath Palihapitiya 1:15:25 You're right.

David Sacks 1:15:25 ... the private equity trade. I'm actually talking about the public equity trade. If you look at the 493 companies-

Chamath Palihapitiya 1:15:31 Those are better position.

David Sacks 1:15:32 Right.

Chamath Palihapitiya 1:15:33 I think like instead of an IT roll-up, I think what you could do is probably sort... Like here's what I would do. I would take the 493 and the filter that I would apply is, what offline assets do they have? What online assets do they have? What percentage of those assets are defensible and unique and exist in a post-AI world? And what percentage of those assets disappear in a post-AI world? And I think where I would end up is I'd like own a specialty chemicals company or something. You know, like, you're still gonna need lubricants and stuff and you can find some way to make it. But if you're like a future-

David Sacks 1:16:07 We know you need lubricants. Sorry, go ahead.

Chamath Palihapitiya 1:16:09 You know, I love the lubricants.

Jason Calacanis 1:16:10 (laughs)

Chamath Palihapitiya 1:16:12 But, uh-

Jason Calacanis 1:16:12 No duty. No duty.

Chamath Palihapitiya 1:16:14 But, uh, baby oil making, you know, like just... (laughs)

Jason Calacanis 1:16:17 Buy, buy the

Jason Calacanis 1:16:18 crate?

David Sacks 1:16:18 Chamath, do you wanna talk about your SPAC, uh, tweet?

Jason Calacanis 1:16:21 Uh-oh. You know the market's back.

Chamath Palihapitiya 1:16:22 Can you-

Jason Calacanis 1:16:22 And we see this much MK.

David Sacks 1:16:23 J- Jason, can you play the siren? Can you play the siren?

Jason Calacanis 1:16:27 (siren sound)

Chamath Palihapitiya 1:16:28 Well, as with all my tweets-

David Sacks 1:16:29 It's like a combo par-

Jason Calacanis 1:16:30 Emergency, emergency call.

David Sacks 1:16:30 It's like a combo beach party. Yeah.

Jason Calacanis 1:16:33 (siren sound)

Chamath Palihapitiya 1:16:33 As with all my tweets, it starts when... Look, here, here's what... X is an incredible platform. I use it for recruiting...

David Sacks 1:16:39 Pull up the tweet, babe. Pull up the tweet.

Chamath Palihapitiya 1:16:41 I use it for a lot of things. But what I-

Jason Calacanis 1:16:42 You're in your villain phase right now, man.

Chamath Palihapitiya 1:16:43 I am. Oh, man.

Jason Calacanis 1:16:44 You've gone full super villain. (laughs) It's so great. I love it.

Chamath Palihapitiya 1:16:47 Well, the, the retweet is more important. Yeah. I love that.

Jason Calacanis 1:16:50 A quote retweet, here we go. Here's the tweet. Chamath says that, "Incredible that almost 58,000 people voted in his tweet if he should launch a new SPAC." So, uh, give the people what they want, Chamath, or what?

Chamath Palihapitiya 1:17:01 Well, I first, I first started this because I... when... I use X sometimes to, to... just to like sound off because it de-stresses me during the day.

Jason Calacanis 1:17:10 Okay.

Chamath Palihapitiya 1:17:10 And like I'll troll people or whatever.

Jason Calacanis 1:17:12 Mm-hmm.

Chamath Palihapitiya 1:17:12 And then I just did this and I was so impressed that 58,000 people voted.

Jason Calacanis 1:17:17 Mm.

Chamath Palihapitiya 1:17:17 But really what happened was I had a lot of very smart money people on Wall Street and some crypto folks call me that I respect. And, and basically what they said is like, "It would be really good if you did it." So I don't know if I'm gonna do it, but I'm heavily leaning towards doing it.

Jason Calacanis 1:17:31 Well, the argument to do it is you learned a lot since last time, there's a lot of inventory there. You've got a lot of access to pre-market companies. I think what people need