All-In PodcastIPOs and SPACs are Back, Mag 7 Showdown, Zuck on Tilt, Apple's Fumble, GENIUS Act passes Senate
EVERY SPOKEN WORD
150 min read · 30,019 words- 0:00 – 3:26
The Besties welcome Thomas Laffont!
- JCJason Calacanis
All right, everybody. Welcome back to the number one podcast in the world. I'm your host and executive producer for life.
- DFDavid Friedberg
(laughs)
- JCJason Calacanis
Isn't that right, Dave Friedberg?
- DFDavid Friedberg
Nope, not at all.
- JCJason Calacanis
J-Cal, Jason Calacanis.
- DFDavid Friedberg
Not at all, not at all what you are.
- JCJason Calacanis
Make sure you tune in to This Week in-
- DFDavid Friedberg
Not at all.
- JCJason Calacanis
... Startups And Apply To Found University.
- DFDavid Friedberg
(laughs) You're something very different.
- JCJason Calacanis
With us again today-
- DFDavid Friedberg
(laughs)
- JCJason Calacanis
... 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?
- DFDavid Friedberg
(laughs)
- NANarrator
(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.
- JCJason Calacanis
How are you feeling? You're tired and grumpy, aren't you? You're a little tired-
- DFDavid Friedberg
Easy transition for me. I didn't have to do the work. It's all good.
- JCJason Calacanis
Are you tired and grumpy? And how's Alison? How's the, how's the mom?
- DFDavid Friedberg
Everyone's wonderful. Thank you for asking.
- JCJason Calacanis
Yes, and a beautiful boy.
- DFDavid Friedberg
Family's great.
- JCJason Calacanis
Beautiful boy.
- DFDavid Friedberg
Nothing more (beep) nothing-
- JCJason Calacanis
He's crushing?
- DFDavid Friedberg
Nothing more amazing than seeing a child-
- CPChamath Palihapitiya
How's (beep) schmeckle?
- DFDavid Friedberg
Magnificent. Magnificent.
- CPChamath Palihapitiya
Magnificent.
- DFDavid Friedberg
Thank you for asking. Thank you for asking that, yeah. Okay, let's move on. Thank you.
- JCJason Calacanis
(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-
- 3:26 – 10:19
State of LA, Hollywood's decline, positivity around GDP growth and AI productivity
- JCJason Calacanis
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.
- TLThomas Laffont
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?
- JCJason Calacanis
Yes, I'm at my, uh, LA home, which, uh-
- TLThomas Laffont
AKA the compound?
- JCJason Calacanis
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.
- TLThomas Laffont
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-
- JCJason Calacanis
Hm.
- TLThomas Laffont
... versus the national average.
- JCJason Calacanis
What do you attribute that to, or what did they attribute it to?
- TLThomas Laffont
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-
- JCJason Calacanis
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.
- TLThomas Laffont
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.
- CPChamath Palihapitiya
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-
- TLThomas Laffont
Amazing.
- CPChamath Palihapitiya
... 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.
- JCJason Calacanis
And regulations are such a big part of this, yeah.
- CPChamath Palihapitiya
It's uneconomic, you can't make it work.
- TLThomas Laffont
Yeah, 30% more expensive, I think, is, is the, kind of the official number on, on shooting in LA.
- JCJason Calacanis
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.
- TLThomas Laffont
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.
- JCJason Calacanis
Hmm.
- TLThomas Laffont
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.
- JCJason Calacanis
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-
- TLThomas Laffont
Hmm.
- JCJason Calacanis
... 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?
- TLThomas Laffont
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?
- JCJason Calacanis
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-
- TLThomas Laffont
I'll give you, by the way...
- JCJason Calacanis
... anything where AI provides leverage to a service provider, where their throughput now goes up, um, the volume goes up...
- TLThomas Laffont
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-
- 10:19 – 23:58
Zuck on tilt over AI: $100M offers, Scale AI deal, hiring spree
- JCJason Calacanis
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.
- MZMark Zuckerberg
They started making these, like, giant offers to, uh, you know, a lot of people on our team.
- JCJason Calacanis
Mm-hmm.
- MZMark Zuckerberg
Um, you know, like $100 million signing bonuses, more than that comp per year, uh-
- JCJason Calacanis
It's crazy.
- MZMark Zuckerberg
... 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."
- JCJason Calacanis
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?
- TLThomas Laffont
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-
- JCJason Calacanis
Mm.
- TLThomas Laffont
... revolution to tell who was winning and losing. So, um-
- JCJason Calacanis
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.
- TLThomas Laffont
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.
- JCJason Calacanis
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-
- CPChamath Palihapitiya
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.
- JCJason Calacanis
Why? Why, why was-
- CPChamath Palihapitiya
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.
- JCJason Calacanis
Hm.
- CPChamath Palihapitiya
And politically, I think I made the decision for them very hard because I was not a very-
- JCJason Calacanis
Hm.
- CPChamath Palihapitiya
... play nice in the sandbox with others kind of executive. I was more of a scorched earth, get it done kind of person.
- JCJason Calacanis
Okay, so no changes over the last 15 years. That's good to know.
- TLThomas Laffont
(laughs)
- CPChamath Palihapitiya
They made, they made an enormous mistake, but then they admitted it about a year after-
- JCJason Calacanis
Right.
- CPChamath Palihapitiya
... I left. They said this was the single success. Single biggest-
- JCJason Calacanis
Explain in plain English why HTML5 wrappers versus native apps.
- CPChamath Palihapitiya
I can't 'cause it's retarded.
- JCJason Calacanis
Okay, great. Uh, I can explain it.
- CPChamath Palihapitiya
So like-
- JCJason Calacanis
(laughs)
- 23:58 – 42:41
Mag 7 AI Showdown: Ranking the most likely AI winners, biggest stock divergences, and more
- TLThomas Laffont
- CPChamath Palihapitiya
... experts, right?
- TLThomas Laffont
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.
- DSDavid Sacks
... right? So, it's kind of interesting in a market that, you know, historically over the past few years-
- CPChamath Palihapitiya
(coughs)
- DSDavid Sacks
... 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-
- CPChamath Palihapitiya
Can you-
- DSDavid Sacks
... reward not- Yeah.
- CPChamath Palihapitiya
... 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-
- TLThomas Laffont
And look what I love, Chamath, by the way, on that, is that, like, now there's debates. Right?
- CPChamath Palihapitiya
Yeah.
- TLThomas Laffont
And, and you can argue whether, you know, you agree with Chamath or whether you don't. And by the way-
- CPChamath Palihapitiya
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-
- TLThomas Laffont
Right?
- CPChamath Palihapitiya
... because I think this is, uh, an interesting way to discuss each of these companies.
- TLThomas Laffont
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-
- CPChamath Palihapitiya
(laughs)
- TLThomas Laffont
... where it will only allow you to compare six charts and not seven.
- CPChamath Palihapitiya
Right, right.
- TLThomas Laffont
But we know that Microsoft is up 13.
- CPChamath Palihapitiya
Queue perplexity.
- DSDavid Sacks
Yeah.
- TLThomas Laffont
Yeah.
- CPChamath Palihapitiya
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-
- DSDavid Sacks
Well, there's also-
- CPChamath Palihapitiya
... just dropped odd.
- DSDavid Sacks
Yeah. There's a lot of regulatory overhead. So, Tesla losing solar and EV tax credits.
- CPChamath Palihapitiya
Yes.
- DSDavid Sacks
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.
- CPChamath Palihapitiya
If we were looking at those, number one and number two, which one do you think gets to AGI first? Thomas?
- 42:41 – 57:02
Why Apple is fumbling AI and how they can fix it
- DSDavid Sacks
One thing I just want to point out here is just...
- JCJason Calacanis
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-
- CPChamath Palihapitiya
But this has happened, Jason...
- JCJason Calacanis
... redoing the UI? Like-
- CPChamath Palihapitiya
This has happened-
- JCJason Calacanis
Is it time for regime change at, at, at Apple?
- CPChamath Palihapitiya
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.
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
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.
- JCJason Calacanis
Mm.
- CPChamath Palihapitiya
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.
- JCJason Calacanis
That is true.
- CPChamath Palihapitiya
And they're living inside of a cash cow organization that's going to optimize for "don't make mistakes".
- JCJason Calacanis
Right. And-
- CPChamath Palihapitiya
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-
- JCJason Calacanis
AOL. Uh-oh. Yeah.
- CPChamath Palihapitiya
... to umpteen companies.
- JCJason Calacanis
It's just shocking-
- CPChamath Palihapitiya
And it's hap- and it's happening to Apple, so we should just not sweat it and move on.
- JCJason Calacanis
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.
- TLThomas Laffont
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.
- CPChamath Palihapitiya
That's right.
- TLThomas Laffont
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?
- JCJason Calacanis
Go up.
- TLThomas Laffont
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.
- JCJason Calacanis
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?
- TLThomas Laffont
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...
- DSDavid Sacks
... 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.
- JCJason Calacanis
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?
- TLThomas Laffont
To that point, um, it, it's interesting to think that the AirPod business at Apple is 3X OpenAI's revenue base today.
- 57:02 – 1:16:18
IPOs and M&A heating up in 2025
- TLThomas Laffont
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.
- CPChamath Palihapitiya
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.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
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.
- JCJason Calacanis
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?
- DSDavid Sacks
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.
- TLThomas Laffont
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%.
- CPChamath Palihapitiya
Mm-hmm.
- TLThomas Laffont
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.
- CPChamath Palihapitiya
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.
- DSDavid Sacks
You're referring to the sales force and the SaaS category, Chamath, and what you're doing at 80 90 specifically, yeah?
- CPChamath Palihapitiya
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-
- DSDavid Sacks
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-
- CPChamath Palihapitiya
No.
- DSDavid Sacks
... at Microsoft and Google.
- CPChamath Palihapitiya
Not, less, less specifically that because-
- DSDavid Sacks
Okay.
- CPChamath Palihapitiya
... those are, those are good for individual people but the software development life cycle is more the horizontal end to end of making things.
- DSDavid Sacks
Got it.
- CPChamath Palihapitiya
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.
- JCJason Calacanis
Yes.
- CPChamath Palihapitiya
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-
- JCJason Calacanis
Massive leverage. Got it.
- CPChamath Palihapitiya
... and then a team that would otherwise service hundreds can service billions.
- TLThomas Laffont
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-
- CPChamath Palihapitiya
Nailed it.
- TLThomas Laffont
... or are laggards?
- CPChamath Palihapitiya
100. 100% nailed it.
- JCJason Calacanis
Absolutely.
- CPChamath Palihapitiya
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.
- 1:16:18 – 1:25:40
State of liquidity: SPACs, Direct Listings, and more
- JCJason Calacanis
crate?
- DSDavid Sacks
Chamath, do you wanna talk about your SPAC, uh, tweet?
- JCJason Calacanis
Uh-oh. You know the market's back.
- CPChamath Palihapitiya
Can you-
- JCJason Calacanis
And we see this much MK.
- DSDavid Sacks
J- Jason, can you play the siren? Can you play the siren?
- JCJason Calacanis
(siren sound)
- CPChamath Palihapitiya
Well, as with all my tweets-
- DSDavid Sacks
It's like a combo par-
- JCJason Calacanis
Emergency, emergency call.
- DSDavid Sacks
It's like a combo beach party. Yeah.
- JCJason Calacanis
(siren sound)
- CPChamath Palihapitiya
As with all my tweets, it starts when... Look, here, here's what... X is an incredible platform. I use it for recruiting...
- DSDavid Sacks
Pull up the tweet, babe. Pull up the tweet.
- CPChamath Palihapitiya
I use it for a lot of things. But what I-
- JCJason Calacanis
You're in your villain phase right now, man.
- CPChamath Palihapitiya
I am. Oh, man.
- JCJason Calacanis
You've gone full super villain. (laughs) It's so great. I love it.
- CPChamath Palihapitiya
Well, the, the retweet is more important. Yeah. I love that.
- JCJason Calacanis
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?
- CPChamath Palihapitiya
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.
- JCJason Calacanis
Okay.
- CPChamath Palihapitiya
And like I'll troll people or whatever.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
And then I just did this and I was so impressed that 58,000 people voted.
- JCJason Calacanis
Mm.
- CPChamath Palihapitiya
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.
- JCJason Calacanis
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 to understand is when you're doing SPACs, a-and correct-
Episode duration: 1:52:44
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