All-In PodcastKamala surges, Trump at NABJ, recession fears, Middle East escalation, Ackman postpones IPO
EVERY SPOKEN WORD
150 min read · 29,868 words- 0:00 – 0:38
Bestie intros!
- DFDavid Friedberg
How good do I look? I'm so sun-kissed.
- DSDavid Sacks
How many, how many buttons down are you?
- DFDavid Friedberg
Oh. Oh my God, I have three buttons. Look at this.
- DSDavid Sacks
(laughs) Three buttons.
- DFDavid Friedberg
No, look, look, look, look, oh man.
- DSDavid Sacks
Is there a button below that we can't see?
- DFDavid Friedberg
No pants.
- DSDavid Sacks
No pants either?
- DFDavid Friedberg
(laughs) There's no pants (laughs) . There's no buttons, no pants.
- DSDavid Sacks
Are you free buttoning and free balling it, or is both happening, or what?
- NANarrator
I'm going all in. Let your winners ride. Rain man David Sacks. I'm going all in. And I said- We open sourced this for the fans, and they've just gone crazy with it.
- DFDavid Friedberg
Love you guys.
- NANarrator
Queen of quinoa. I'm going all in.
- 0:38 – 19:33
Election update: Dems energize around Kamala, policy questions remain
- DFDavid Friedberg
Hey, everybody. Welcome back to the All-In Pod. This week, our hostess with the mostess, J Cal, is out with COVID, getting treated, spending the day in bed. We wish him well. We wish him a speedy recovery. We are gonna plow forward like all championship teams do. This week, I think we're gonna kick it off with a conversation about the, uh, election update. Obviously, Harris came out, guns a-blazing, in the media, the accolades seem to be flying, and, uh, the polling data is starting to become worrisome, it seems, for the Republicans. Just this week, Nate Silver released his newest model update, the Silver Bulletin, I think he's got it, uh, um, trademarked as nowadays. And in the model, he tries to estimate what does the polling data show us with respect to the electoral college and the popular vote in the upcoming presidential election? Harris, uh, currently has a 42.5% probability of winning the electoral college. Trump, 56.9%. Kennedy coming in at 0%. On the popular vote, Harris has a 57.1% probability of winning the popular vote, 42.9% probability for Trump. I guess I'll start it off with David Sacks. Sacks, given the momentum coming out of the gate since the announcement of Harris as the Democratic nominee, and this recent polling data, what's your read on the landscape today? What's your read on where we stand and what's ahead here? And what do you take away from these polls?
- DSDavid Sacks
Well, look, I think what happened is that Biden dropped out of the race. He abdicated. Harris took over, and it created a sense of euphoria on the part of the left, because they thought they had a surefire loser with Biden, and they were divided, and then once Harris replaced him, they thought, "Okay, now we got a shot, and we can fully unify and, and get behind this, this new candidate." So, what you've seen is over the past couple of weeks, the mainstream media's gone all out on behalf of Kamala Harris. And yes, this has led to a rise in the polls. But I think that the highs that Trump were at were always a little bit artificial in the sense that if the Democrats could field a candidate who could campaign, it was always going to be a close election. Biden was artificially depressed in the polling, because he just couldn't campaign. He could barely read from a prompter. He couldn't do interviews. So, I think you're seeing the race normalizing. This is gonna be a close one. It's gonna be a nail-biter. But I think the question about this honeymoon period that Harris has right now is whether it's sustainable. I mean, she has not done any press interviews. She has not done any press conferences. She's not, uh, answered one question. She's not been asked one tough question by the media. She has only read from a teleprompter. She's only done scripted appearances. And yet, at the same time, she's basically been changing all of her policy positions and running from every position she ever stood for. So, for example, she said that she was in favor of single payer, now she's against it. She said she was in favor of court packing, now she's against it. She said she was against fracking, now she's in favor of it. On the border, she said that we should consider abolishing ICE. Now, all of the sudden, she's in favor of more funding for Border Patrol. On crime, she used to take kind of the BLM position that, you know, cops don't make us safer, to now she's saying that she's a cop and prosecutor herself. She used to be in favor of federal gun buybacks, now she's against them. It just goes on and on. I mean, in the 2020 riots, she raised money for the legal defense of rioters. Now, she's distancing herself from those positions. My point is this, is that after spending really her whole career staking out positions on the far left, she has now dropped all of these positions for political expediency, and the question is, what does she stand for at all? Does she just kind of blow with the wind and say whatever helps her win whatever the next election is? I mean, I think that's basically what's going on here. And normally what happens is the press would ask you that question, but she's been getting a free pass, because the mainstream media's basically been operating as a division of the DNC, and they're not holding her to account in any way. They're not requiring her to answer any questions. And as a result, yes, you're seeing this, um, this bounce in the polls. But I think the question is can she sustain this for 100 days? Can she really get through the entire election without having gone through a primary, without ever having to explain her positions on issues, and she just does these short scripted appearances? I just think that at some point over the next 100 days, that approach is just gonna fall apart. She's gonna have to do a debate. She's gonna have to answer questions. At that point, I think the bloom will come off the rose a little bit here, and you'll see the polls normalize.
- DFDavid Friedberg
Do you think, uh, that JD Vance has negatively affected the interest in Trump? That he... You know, there's a lot of media coverage about JD Vance being potentially the wrong pick for Vice President, and that he's creating more of a challenge, uh, for the president's campaign than a boom?
- DSDavid Sacks
No, listen.
- DFDavid Friedberg
Yeah.
- DSDavid Sacks
Anyone who Trump chose was gonna be absolutely smeared by the other side and by the media-... if it had been Doug Burgum, there would have been non-stop coverage of the six-week ab- abortion bill that he signed.
- DFDavid Friedberg
Right.
- DSDavid Sacks
You could go down the list. I mean, look, what Democrats will say is, "We just want to see a moderate Republican." But when Mitt Romney ran, they were calling him a fascist. So the reality is that the mainstream media and the DNC, but I repeat myself, are gonna smear anyone who's picked. At the end of the day, I don't think that it matters. What matters is the top of the ticket.
- DFDavid Friedberg
Tamath, what do you think about the Harris campaign, how it's going, and the momentum that is being projected in the media and the polling data? It's clearly demonstrating an improvement over Biden's, um, standings in the polls.
- CPChamath Palihapitiya
I mean, I think we had a situation where one candidate was not real and so Sachs is right that a lot of the polling up until basically last week is not really reliable. Now you have this snapback effect, which is more about a lot of people that were coming around to this idea of voting for Trump because Biden was such a bad option now flip-flopping. And so I think that's what explains the snapback. But Sachs is right, 100 days is a really long time and what Nate Silver's poll essentially shows is if she wants to win, not the popular vote because at this point now three or four elections in a row, that just doesn't matter anymore. If you want to win the electoral college and be the president, you gotta go and win five states. And in order to do that, you have to be very precise on about four or five specific issues. And in the absence of her defining herself on those four or five issues, she's not gonna win. She'll win the popular vote, but again, when people win the popular vote and lose the electoral college, we've now gone through that enough times where that's just a fait accompli inside of American electoral politics. So I think that the Trump campaign and the Harris campaign need to agree on some schedule of debates. I hope that they do two and ideally three, and that they both get after it in front of each other so that those five states that are really going to decide this election has an opportunity to make, um, a decision on behalf of the rest of the country.
- DFDavid Friedberg
Yeah, Nick, if you pull that chart back up again, based on Nate Silver's model of polls, where he takes all the polling, uh, data that's been collected by different third parties, he weights them based on the performance of those polls in terms of predictive power historically, and he creates this kind of macro model, that's the Nate Silver approach here. He's estimating that within the 80% bound every state on this list is up for grabs, as you can see with the gray lines shown there. There's a very slight margin on the average in Wisconsin for Trump, in Michigan for Harris, in Pennsylvania for Trump, in Nevada for Trump, in North Carolina for Trump, in Virginia for Harris and so on. But each of those margins is so slim that there's still quite a lot of decision-making ahead for voters. So pretty clearly on point that this is still very much an open election. I'll give you guys my read. I think that there's five camps of voters going into this when Biden was the candidate. The first is anti-Biden, anything but Biden. The second is anything but Trump. The third is pro-Biden. The fourth is pro-Trump. And then the fifth is the other. And I think that that entire bucket of anything but Biden just became available once Biden dropped out of the race, and it was a pretty sizable bucket, that there's a large number of voters out there that felt pretty strongly that Biden poses such a significant risk for leadership in this country because of the mental issues and the performance issues that we had seen, that as much as people didn't love Trump, they were willing to vote for him because he's not Biden. And f- now that camp has an option, and that option is Harris. So, so some percentage of that camp, and I would say probably a supermajority of that camp, is now switching into the- the Harris bucket. The pro-Trump bucket doesn't move, the pro-Biden bucket probably doesn't move, it sticks with Harris. And the anything but Trump bucket doesn't move, it sticks with Harris. So, you know, the- the- the fact that there is probably such a sizable number of voters in the anything but Biden camp is what's probably helping Harris at this point and creates a bit of a handicap for Trump going into this last stretch of the campaign. That's my read, uh, 'cause I know, I know a lot of people with that point of view.
- DSDavid Sacks
That's an interesting point of view, and let me, let me just respond to that for a second. So one of our critiques of Biden, not just in the selection cycle but probably going back a year, is that Biden had become basically a figurehead president, almost a construct, and he was fronting for a shadow cabinet or a, a group of powerful staffers who were really running the country, basically because of his cognitive decline. And we sort of joke that whoever the White House intern was who was running the social media accounts or the staffer who was running the teleprompter was basically the president because they could dictate what Biden said. Now I think the question to ask is, has anything changed? Kamala Harris refuses to do any interviews. She doesn't want to do any unscripted appearances. She's abandoned all of her policy positions that have been longstanding and were the reason why she ran for president in the first place in 2020. So the question to ask is, do we still have a construct as the president? I mean, the Biden staffers who were running Biden are now just running Harris. We don't know what she stands for. We don't have her appearing in unscripted natural appearances. We don't have her being challenged by the press. She's not willing to do what Trump did. Trump just walked into the lion's den yet again at the NABJ. So-
- CPChamath Palihapitiya
National Association of Black Journalists, yeah.
- DSDavid Sacks
Right, exactly. So Trump walks into a very hostile interview at NABJ.Harris was supposed to come and she didn't come, she would have gotten a very softball interview. She's not even w- willing to do that. I think that in substantive terms, I don't think that much has changed this election. The Biden staff is still running for president. I mean, that's what you're voting for.
- DFDavid Friedberg
I would disagree on this, because I think in the last two weeks, what I've seen is statements coming out of the Harris camp that clearly distinguish her and her campaign from Biden's policy positions and Biden's, uh, campaign rhetoric historically. Most, most particularly, Sax, is on Israel. When Netanyahu came to visit the United States, she put out a very pro-Israel statement that we all know the Biden camp has largely avoided doing because of the concern over the pro-Palestinian rights movements reaction to the Biden camp being pro-Pal- uh, pro-Israel. And the Harris statement was pretty finely worded and pretty strongly worded that she is very much in favor of Israel defending itself. She acknowledged that there is a loss of Palestinian life that matters and we need to acknowledge and address it, but she was very much in support of Israel, which is not a position we've seen the Biden camp take. And I think that we're starting to see what, you know, what is a little bit more of a fracturing between Harris being allowed to be free and being allowed to have, uh, an opinion outside of the party line dictated by the Biden camp. And I think we'll probably see more of that in the next couple of weeks, and we'll probably see her starting to be a little bit more refined in what that... what, what differentiates her from Biden. Because I do think that's what's gonna allow her to win this election, is she's gonna stand up and say, "Here's why I am not Joe Biden, and here's what makes me different from that individual. I respect him, I love him, he helped me, but let me, let me tell you why I'm d- why I'm different and why that should matter."
- DSDavid Sacks
She snubbed Netanyahu, Freeburg. I don't know what you're talking about. She snubbed Netanyahu.
- DFDavid Friedberg
I think you're an example of the people that want to give her the benefit of the doubt.
- DSDavid Sacks
Okay.
- DFDavid Friedberg
I think there's a large fraction of those people-
- DSDavid Sacks
I'm not, I'm not... No, that's not true. Don't... No. That's, that's not a fair way to characterize me at all. I'm simply pointing out- Okay, then.
- DFDavid Friedberg
... that she made a state- I'm pointing out that she made a statement that's different than what Biden said. That's it. That's all I'm saying.
- DSDavid Sacks
Hold on a second. I think on Israel... So first of all, she didn't write that statement, the staff did. Okay? Now, what is the staff trying to accomplish on Israel? They actually have a genuine dilemma on the whole Israel-Palestine issue, because the Democrat Party is very much split on this. The Democratic establishment is pro-Israel, but the progressive base is very pro-Palestine. And even polling among youth shows significant support for Hamas, even. And a lot of these people are very much within the, the sort of hardcore left-wing base of the Democratic Party. So what the Biden administration has been doing, and what I think Harris is continuing, is a process of talking out of both sides of their mouth. Biden went to Israel, bear hugged Bibi, basically supported his policy, but then gave some lip service to the idea that he would limit the weapons that Israel is able to use. Harris puts out this very pro-Israel statement, but then snubs Netanyahu at that speech he gave before Congress. So look, the Democrats are trying to have it both ways. They have a base that is fractured on this issue, and so they're trying to thread that needle. Now, you're right that... Let's just up a level. Let's move off the Israel issue for a second. There's no question that Harris wants to run from her record as being Biden's vice president. There's a good reason for that. The Biden-Harris administration is historically unpopular. What you have to ask, though, is whether it's credible. Harris suddenly is in favor of more money for Border Patrol. Well, why didn't she advocate for that when she was Biden's border czar? The media is furiously scrubbing its websites to remove references-
- DFDavid Friedberg
By, by the way-
- DSDavid Sacks
Hold on. They're removing historical references from (laughs) during the Biden administration when she was openly called the border czar. They're trying to memory hole that. So look, I have no doubt that the Harris campaign wants to drop every substantive policy position she's ever taken because they just want her to be a construct. They just want people to be excited because...
- DFDavid Friedberg
I do think that what you're saying is exactly what she needs to answer to in public in the next couple of weeks to earn credibility on what is she different from the Biden administration on in terms of policy, and why did she not make that clear when she was in the Biden administration? And she can say, "I didn't agree with it," or she can say, "I've changed my mind." And I think both of those might end up being where she needs to go to, but you're right, she does need to answer to that.
- CPChamath Palihapitiya
I don't think it's clear she has to do any of that.
- DFDavid Friedberg
You think she can just hide out and, and coast?
- CPChamath Palihapitiya
No, right now the... I... Right now, the calculation is to get as many people to basically move into the not-Trump voting stance.
- DFDavid Friedberg
Right.
- CPChamath Palihapitiya
And they're giving as much time as possible to measure that and see if it's a winning strategy. But again, and I think we just talked about this, mathematically, it can win the popular vote, but it will not win the electoral college. So she is going to have to appear and be in a position where she's confronted on about four or five key issues, and that's where this presidency is going to get decided, four or five issues in four or five states, and we'll all know where she stands.
- 19:33 – 33:07
Trump's NABJ interview: smart or risky?
- DFDavid Friedberg
Let's move on. Sachs, uh, I just wanna ask, do you think that Trump is at risk of shooting himself in the foot by being too public, too open and too engaging? If we take a look at what happened this week, the National Association of Black Journalists had a convention on Wednesday. It sent interview requests to both President Trump and Vice President Harris, and Trump accepted and went in person. Harris said she couldn't do it in person or via Zoom, and according to the, uh, National Association of Black Journalists, Harris is in talks to do a Q&A session with them at some point in September. There were two moments that are making a lot of news. One was the first question, Nick can you play this? Where, uh, ABC's Rachel Scott went after Trump.
- NINABJ interviewer
A lot of people did not think it was appropriate for you to be here today. You have pushed false claims about some of your rivals, from Nikki Haley to former President Barack Obama, saying that they were not born in the United States, which is not true. You have told four congresswomen of color who were American citizens to go back to where they came from. You have used words like "animal" and "rabbit" to describe Black district attorneys. You've attacked Black journalists, calling them a loser, saying the questions that they ask are, quote, "stupid and racist." You've had dinner with a white supremacist at your Mar-a-Lago resort. So, my question, sir, now that you are asking Black supporters to vote for you, why should Black voters trust you after you have used language like that?
- DTDonald Trump
Well, first of all, I don't think I've ever been asked a question so... in, in such a horrible manner, a first question.
- DSDavid Sacks
(laughs)
- NINABJ interviewer
(laughs)
- DTDonald Trump
You don't even say hello, how are you.
- DSDavid Sacks
(laughs)
- DTDonald Trump
Are you with ABC? Because I think they're a fake news network, a terrible, by the way.
- DSDavid Sacks
(laughs)
- NINABJ interviewer
Boo!
- DTDonald Trump
And I think it's disgraceful-
- DSDavid Sacks
This is the crowd.
- DTDonald Trump
... that I came here in good spirit. Uh, I love the Black population of this country. I've done so much for the Black population of this country, uh, including, uh, employment, including, uh, opportunity zones with Senator Tim Scott of South Carolina, which is one of the greatest programs ever for, uh, Black workers and Black entrepreneurs. I've done so much and, you know, and I say this, uh, historically Black colleges and universities were out of money, they were stone cold broke, and I saved them, and I gave them long-term financing, and nobody else was doing it. I think it's a very rude introduction. I don't know-
- NINABJ interviewer
To me-
- DTDonald Trump
... exactly why you would do something like that and let me go a step further. I was invited here and I was told my opponent, whether it was Biden or Kamala, uh, I was told my opponent was going to be here. It turned out my opponent isn't here. You invited me under false pretense. And then you said you can't do it with Zoom. Well, uh, you know, where's Zoom? She's gonna do it with Zoom and she's not coming. And then you were half an hour late. Just so we understand-
- DSDavid Sacks
(laughs)
- DTDonald Trump
I have too much respect for you to be late. They couldn't get their equipment working or something was wrong.
- NINABJ interviewer
Mr. President, I would love if you can answer the question on your rhetoric-
- DTDonald Trump
I think it's a very nasty question.
- NINABJ interviewer
... and why you believe that Black voters-
- DTDonald Trump
I, I have answered the question.
- DFDavid Friedberg
Sachs, is he shooting himself in the foot by agreeing to show up? He showed up to the Bitcoin conference, which obviously went phenomenally well. But Sachs, is he shooting himself in the foot by being too open and engaging too much, and should he lay low?
- DSDavid Sacks
No. I mean, look, what kind of president do you want? I mean, I want the president who is fearless and willing to walk into the lion's den over and over again and answer tough questions. What you saw in that sound bite here is that Rachel Scott, the interviewer, that whatever she was doing is not journalism. This is supposed to be a journalism association. She turned that interview into an ambush. It was, it was hostile, what she did, and right out of the gate, I mean, the first question, she's attacking him. And he pushed back on it. I mean, I think you saw him push back on the media in a way that only Trump can do. Now, you also heard there, I think, a really key point, that Harris basically passed on the opportunity to attend when she was originally supposed to. That would've been a softball interview for her. But she is not willing to do any kind of interview right now. No questions. No unscripted appearances. She just wants to read from a teleprompter. That, um, rally she did in Atlanta that had Meghan Thee Stallion performed, so it was a free concert, that drew out a huge number of people. Then Harris spoke for 17 minutes and people were leaving five minutes in because they're just there for the concert. I guess the question that people need to ask... I understand why this is strategic for her. I mean, obviously, it's better for you if you don't have to take any positions whatsoever and you can just abandon all of your previous positions without any explanation whatsoever and the media gives you a free pass on that. I can understand why that's strategic. But I think that voters need to ask the question, who do you want representing United States right now in a world that's on fire? Who do you want to stand up to Putin or Xi or make peace with them? Who do you want to stand up to or be allies with Netanyahu, for example? The United States right now is in a very difficult situation. We can't have a teleprompter president. We need a strong president.I appreciate the fact that Trump is willing to take on all challengers. I just think it's manifestly clear that these are the qua- the qualities and traits you want in a president of the United States.
- DFDavid Friedberg
Okay, so your opinion is Trump needs to continue to engage openly and publicly. It shows strength, and it shows a capacity to deal with adversity and conflict. Point taken. So, uh, let's pull up the next clip where Scott then asked Trump if Harris was a DEI candidate, and, uh, here's his answer.
- DTDonald Trump
Uh, I've known her a long time indirectly, not directly very much, and she was always of Indian heritage and she was only promoting Indian heritage. I didn't know she was Black until a number of years ago when she happened to turn Black and now she wants to be known as Black.
- NINABJ interviewer
(laughs)
- DTDonald Trump
So I don't know, is she Indian or is she Black?
- NINABJ interviewer
She has always identified as a Black woman. She went to a historically Black college.
- DTDonald Trump
But you know what? I respect either one. I respect either one, but she obviously doesn't because she was Indian all the way and then all of a sudden she made a turn and she went, she became a Black person.
- NINABJ interviewer
Just to be clear sir, do you believe that she is-
- 33:07 – 40:58
Markets expect rate cut in September, but are we already in a recession?
- DSDavid Sacks
- DFDavid Friedberg
Let's shift topics. I'd like to talk about what's been I think a, a lot of chatter amongst friends of ours who are active in the market that at a policy meeting on Wednesday, the Fed held rates steady. Jerome Powell said, quote, "A reduction in our policy rate could be on the table in September if inflation continues to fall." He said, "We're getting closer to the point at which it'll be appropriate to reduce our policy rate, but we're not quite at that point." The next Fed meeting where this raise cut could happen is September 17th and 18th. And if you look at the, um, the, the futures markets today, the market is now estimating a 20% probability of a 50 bp rate cut in the September meeting, 80% probability of a 25 bp rate cut, and basically no probability of no rate cut anymore in September. Chamath, is that your read on where we're at? And, you know, is the Fed kind of appropriately reading the economic tea leaves given the recessionary indicators that you just mentioned earlier and what else we're seeing that the Fed's mandate obviously is meant to support both the monetary policy but also employment in this country?
- DSDavid Sacks
I think we're in a recession, and I think the problem with a recession is even as inflation diminishes, if your purchasing power is shrinking faster than prices fall, it still feels like prices are going up. I don't know if you guys have been reading the Wall Street Journal, but, like, the last couple of days they've been doing a whole series on people that have been left behind by inflation. And I was really surprised as I read those articles just the sheer quantity of impact in terms of the number of people it's touching independent of salary. And so my takeaway kind of just reinforced the fact that we've sort of, like, looked past the problem because of the stock market going up for the last few quarters because of seven companies. And now that people are sobering up to the reality that even they don't have an answer for all the money they're spending, the stock market's down next to those seven businesses, and I think that you're gonna start to see some real pain in the fall. So Jerome Powell is probably gonna cut 25 and, and he... And, and I think that if they get to him, he'll try to cut 50, but the problem is it won't solve the problem. And I think if... This is again where Kamala Harris has to be... She's gonna have to make a very difficult calculation here, which is she's going to have to throw Joe Biden and, and the economic team in the White House under the bus here and say, "That was them. Yes, they screwed it up. It was against my wishes, and here's my vision for how we fix this," because otherwise the Republicans will be all over it. And I think if you have a bad economy like what it looks like going into November, it's gonna be very difficult for the Democrats to, to win the White House.
- DFDavid Friedberg
Well, without bringing it back to politics, Sax, economy good or bad? And is Jerome Powell gonna cut rates 25 bps, 50 bps? Do you agree with what the market's forecasting?
- DSDavid Sacks
I guess what I would say about the economy is that in nominal terms, we're not in a recession according to the data that's come out. The Q2 GDP was roughly 2% GDP growth. However, I think there's a couple of problems. One is that what we've seen over the past year or so is that the economic data that comes out keeps getting reforecast down.So they put out a provisional number, eh, or an estimate, and then when they finalize the number three months or six months later, it always seems to go in one direction. We've seen this over and over again with new jobs being re-forecast down, and we saw this with the Q1 GDP where initially they're reporting, I think it was like a 1.8% number, and then it got restated down to 1.3%. So the Q2 GDP number was around 2%. It was good, but again, it's a provisional number, and let's see where it actually ends up. The bigger problem is government spending. The deficit is running at 6% of GDP, whereas economic growth is at, let's call it charitably 2%. Well, government spending is included in GDP. So if you were to s- to balance the budget, let's say that you were to make government live within its means and not have a deficit, we'd have negative 4% GDP growth. So the only reason why we're in positive GDP growth territory is because of massive government spending that we know is not sustainable, and at some point, the bill is gonna come due for that. So I'd have to say that... You know, you asked me, "Is this a good economy?" I mean, it's, it's not the worst, but there's definitely unsustainable things propping it up, and I, I do think that w- the bill will come due at some point for this.
- DFDavid Friedberg
It's not just fully supported, it's overly supported by the federal government in the United States, and I mentioned this last week. Federal government spending is over 2X the sum of all state spending. Federal government spending into next year with the Biden budget proposal of $7.3 trillion, that's like 30% of GDP. And I think you guys may remember this analysis I pulled together a couple months ago where I estimate something close to 30% of US employment is, uh, either direct government employment or indirect government employment through government payments to third parties that are employing those individuals. So the government is becoming an integral part of maintaining the flow of dollars in the economy because they are such an integral buyer and seller within the economy and an integral employer within the economy. And so to reverse that trend is what I worry about more than anything, as I've shared many times, which is why I question whether either political candidate actually solves this problem for us, and we're almost like, you know, arguing over which marbles might get while the Titanic is sinking, that there is a real fundamental issue with how this economy is structured. I will tell you anecdotally, I have a lot of conversations with folks that work in the agriculture industry, in the food industry, in the industrial industry, many of these industries that have a very different capital flow cycle than we all deal with typically in Silicon Valley in software, and many of them are struggling. I mean, these are businesses where some folks have told me orders completely fell off a cliff in capital equipment, that some small business owners that sell whatever pieces of equipment you wanna come up with, they are not getting orders. There's no revenue. There are massive, um, oversupply and under-purchasing happening in the food and ag markets, and yet folks are still trying to push up prices in order to make the debt payments that they have to make on their high-interest debt now. And that creates a crippling condition for them. Across the economy, I think there's the haves and the have-nots, as is indicated in this article that was just pulled up, where there are some parts of the economy where you have low debt/high margin businesses that can continue to scale and continue to raise pricing, have a lot of elasticity in, in, in pricing, and then there are the others that operate on, you know, 1% interest rate charges, uh, changes drive their profit or loss for the year in a pretty meaningful way. And that's the part of the economy that's really suffering. And unfortunately, the action that will be taken to resolve this isn't necessarily a free market action. It's gonna end up being some sort of government intervention, which furthers the government's involvement in the economy and furthers the tentacles that make it much harder to ultimately pull out of this, this spiral and this problem. That's my rant on this whole point, but...
- DSDavid Sacks
Yeah. No, I agree with that. I agree with all that. I've seen some reports that a crazy percentage of the job creation over the past year has, have been government jobs.
- DFDavid Friedberg
All of it.
- DSDavid Sacks
And-
- DFDavid Friedberg
Uh, more than 100%. So basically, there has been a net loss in private market jobs net of the effect of government employment or government spending on companies that then use those dollars to go hire people.
- 40:58 – 45:46
AI buildout causing short-term volatility
- DFDavid Friedberg
Let's talk about the impact on markets. So, you know, as a result of this, uh, this rate cut announcement or this rate cut indication, markets have rallied a little bit, but, you know, to Chamath's point, there are definitely, you know, the haves and the have-nots. AMD beat, they were up 4% after hours on, you know, improved AI chip sales. Uh, their revenue was $5.8 billion, up 9% year over year. Microsoft had so-so results. NVIDIA jumped 12% on some comments made, uh, by Meta, um, and Microsoft that both said that there's increased AI demand and they're gonna continue to, uh, to build out capacity. So Chamath, I know you've talked a lot about this in the past. Maybe you can give us your read on the comments that were made this week. You've historically said that a lot of this build-out is well ahead and there's no real ROI yet, but clearly some of the buyers of this capital equipment are saying, "Hey, there is ROI. We're gonna continue to build aggressively." So maybe you can share a little bit on, is anything different or are we just kind of seeing folks justify with the decisions they've made?
- CPChamath Palihapitiya
I mean, sadly, this is another case of sell the news. These things rallied phantomly in the after hours, and if you look at them, they've, they've all just given back every dollar of gains. So I think that people know that, that we are sort of at the tail end of the, of the hype cycle in AI, and every chance, every time these things spike, people take an opportunity to just massively sell. I mean, NVIDIA's turned over 308 million shares today. (laughs)
- DFDavid Friedberg
Yeah, it's crazy. It's, it's, it's literally, it's literally trading-
- CPChamath Palihapitiya
Or just at the beginning of the day.
- DFDavid Friedberg
It's trading like a penny stock.
- CPChamath Palihapitiya
It's tr- going straight down like a lead balloon.
- DFDavid Friedberg
Yeah.
- CPChamath Palihapitiya
Meta rallied...They've basically given up all of their gains. It's gone kind of straight down today. But the point isn't that these companies are going to zero. That's not the case. It's just the point is that right now people are optimizing, they're selling every chance they get to kind of book the profits. And I think that that's-
- DFDavid Friedberg
Yeah.
- CPChamath Palihapitiya
... fair because, you know, at some point nobody knows when all of this phantom money is gonna show up.
- DFDavid Friedberg
Right, so this is independent of what we would call the economy, independent of the recessionary conversation and the rate conversation which is at-
- CPChamath Palihapitiya
The problem, look, I mean, I'm in the middle of this right now with 8090. It's been one of the joys of my career to actually start a company in the middle of what I think is the most important wave that I've ever seen professionally since social networking. And I jumped into the middle of that wave, and I kind of tried to ride the best wave I could there. I'm doing it here. But my honest takeaway after being in this thing now for, you know, seven months intensely, and I'll be into it for as many years as it takes to build a successful company, is that AI is massively deflationary. It takes not that much money and the results are really meaningful in terms of the amount of efficiency that you can capture and the cost that you can save. And the right business people, i.e. startups that are starting from scratch, like myself and my co-founders at 8090, we will pass that on to our customers because it allows us to differentially price versus incumbent solutions. And so I don't see a path where all of a sudden a multiple of the money that's been spent shows up. I don't see it.
- DFDavid Friedberg
Mm-hmm. Mm-hmm.
- CPChamath Palihapitiya
I do see a path where companies find tremendous... Like, think about it this way. If you looked in the 1980s and said, "What is the most profitable operational company that existed in the '80s?" I don't know what that company was, but I suspect that their EBITDA margins were roughly in the 30 or 40% range and it, and it was probably incredible. If you fast-forward now 40 years, the most efficient company is probably sort of 50 or 60% EBITDA margins. The reality is that the best AI-enabled company will probably have margins that are 70 and 80% in the next 15 or 20 years. Now, that's an incredible thing.
- DFDavid Friedberg
That's a big prediction.
- CPChamath Palihapitiya
But that will, again, spur the principal law of capitalism that everybody keeps forgetting, which is you compete out excess return. And so while you will have many companies that have, you know, 60% plus operating margins, they'll be in much smaller markets, and there'll be thousands and thousands and thousands of them. So I suspect what happens is that the overall market grows, but the number of companies grows by an even order, larger order of magnitude. And in all of that, the reality is that it's gonna be very hard for these big folks to, to, to sort of see this value capture th- that makes any of this investment worthwhile. So I think that you're gonna have to have some sort of reset in terms of the CapEx that's
- 45:46 – 1:06:17
Assassination of Hamas leader Ismail Haniyeh: are we inching closer to war in the Middle East?
- CPChamath Palihapitiya
happened here.
- DFDavid Friedberg
I wanna switch gears yet again and talk about the assassination of Ismail Haniyeh. I hope I pronounced that right, Haniyeh? He was killed by a bomb while staying in a guest house in Tehran according to the New York Times. Earlier reports indicated that he was in fact killed by a missile strike from Israel. But just this morning, the New York Times reported that, uh, the guest house where he stayed is run and protected by the Islamic Revolutionary Guard Corps and is part of a large compound known as Kneishat in an upscale neighborhood of northern Tehran. And the article in the New York Times goes on to report that according to several Middle Eastern sources, a bomb, a remotely detonated bomb, was actually planted in this guest house over two months ago in anticipation of the Hamas leader's stay in this guest house. And it was then set off once he actually stayed in the guest house. This obviously, uh, represents kind of an incredible feat in operational capacity and intelligence. I think we've known and talked a lot about, and the media has kind of covered quite a bit about, the capacity of Mossad. But, um, I just wanna kinda get your, you guys' reaction to this. I think that there's a bigger and important story here about the strength of Israel's intelligence and military capacity in the region and what that could mean for their posturing and their demands and their activity in the region in the months and years ahead, particularly with Netanyahu still in charge. So Saks, maybe you can kick us off with your thoughts on this article and Mossad's role in the assassination of this Hamas leader. Well, there's no question that the Mossad established or reestablished its reputation for extreme competence here, being able to infiltrate Iran in order to assassinate the top political leader of Hamas while Haniyeh was a guest of Iran. I mean, that's deeply humiliating to Iran. I think he was there, Haniyeh was, for the swearing in of the new president of Iran. So for them to be able to target, uh, him while he was there and set up the bomb months in advance, I mean, that shows extraordinary planning and intelligence and a huge failure on the part of Iran. I think in terms of the, the larger significance of this, you know, in, in the wake of October 7th on this pod, I said that I hope that Israel did not go off half-cocked responding the way that the United States did after 9/11. And when they started bombing Gaza, I said, "This is gonna backfire." And, you know, boy was that an understatement in terms of the reaction of world opinion. I mean, Israel went into Gaza, basically leveled the place, and has alienated practically the entire world. The only country that's solidly with Israel anymore is the United States. And even within the United States, roughly half the people are now against Israel. And I think what I said at the time was that Israel-
- DSDavid Sacks
... could pursue or should pursue a more targeted strategy the way that it did after the Munich Olympics. This assassination within Iran shows that the Munich Olympic strategy, I mean, they- they've basically shown that it's successful. They've been able to do it. I wish they had limited their response in this more targeted way because I think that the destruction of Gaza has created tremendous humanitarian suffering and it's alienated just about the whole world. And what has it accomplished? I don't think they've gotten rid of Hamas. They have not been able to kill the military leader of Hamas, which is Sinwar, who was the actual military planner of the October 7th attack, and they have radicalized wh- you know, whatever part of the Palestinian population was not radicalized has been radicalized, and they've turned so much of the Middle East and the world against them in such a strong way that, again, I- I wish that they had pursued the- the more measured strategy. Still a tough strategy, I mean-
- DFDavid Friedberg
Let me put you in Netanyahu's seat. You are leading Israel. Um, Hamas comes into your country, attacks, kills lots of people. What is your measured response to that attack from Hamas given the capacity you have? The Israeli Air Force, by the way, is second only to the United States. Uh, just to give you some statistics, the Israeli Air Force has 90,000 active and reserve personnel and 614 aircraft. Israel is reported to have up to 400 nuclear weapons and they have this extraordinary technical capacity with Mossad and operational capacity that is kind of unrivaled pretty much anywhere in the world it seems. What do you do if you're sitting in Netanyahu's seat that- that provides a more kind of measured response and how do you kind of, you know, lead your nation?
- DSDavid Sacks
Well, first of all, I'm not obviously sitting in that seat. I don't live in Israel and I don't have skin in the game that way, so I think the first thing that they would say is, you know, "You're not us. You're not sitting here dealing with all of our enemies in the region." And they would have a point. But what I advocated, I think months ago, was to take a more targeted, measured strategy that I think the assassination of Haniyeh shows that they could have executed. And I understand why they went into Gaza and why they felt they needed to go into Gaza, but I just... This is not an anti-Israel statement, it's just a questioning of the strategy. I just don't see that has produced much good. I don't think they've solved their Hamas problem, they have not gotten Sinwar, and they've lost a meaningful amount of global support.
- DFDavid Friedberg
Yeah. Chamath, do you have a read?
- CPChamath Palihapitiya
I think that it was, in hindsight, a pretty big miscalculation by Netanyahu to pursue the strategy that they did and I would have much preferred what you're seeing now, which is a very targeted approach. I think it preserves and it would have preserved not just world political support, but just individual people support where instead of going into Gaza, leveling the place, creating all of this death and destruction and amplifying and confusing people where they now all of a sudden had to make a decision between these two groups and- and- and now get confused with antisemitic sentiment. That should never have happened. It's clear that Mossad is incredibly competent and incredibly capable. I do believe that sovereign countries have the right to defend themselves, but then there was a bridge too far and I think the Israeli government has crossed it. In hindsight, and I think I told you this story and I- I may have relayed this in confidence, but I'll just say it again. On October the 8th, what was offered, and I'm not gonna say by who, was sort of th- a meeting of the right political leadership from the Middle East, Israel, and the United States where they were all willing to sort of come and the idea would have been to extend some sort of structured solution for the Palestinian people. Now, that would have been so unintuitive and unexpected, I think everybody would have been a little bit on their heels, but I think what it would have done is it would have cast Netanyahu in an incredible light, it would have passed Israel in an incredible light, they would have still preserved the ability to go and kill the individual leaders that they wanted to, but it was rejected. And I think that when we look back, these are the kinds of decisions that hopefully history documents accurately so that folks who are in the seat, to your point, Freeberg, the next time around can make a different calculation. I- I see, you see the pictures and there's just no way that you can turn them off. You know what I mean?
- DFDavid Friedberg
I think Israel's biggest asset is probably also their biggest liability, which is their military and intelligence strength and it emboldens them in a way that they can be more aggressive than perhaps they need to be with respect to maintaining the security of the state, but perhaps being vengeful and vindictive and I know that that's a very controversial statement to be made. I want to underscore the strength of this military and this intelligence. Do you guys remember the Stuxnet- Stuxnet worm from a number of years ago?
- CPChamath Palihapitiya
Yeah. Yeah.
- DFDavid Friedberg
That story was incredible.
- CPChamath Palihapitiya
Yeah.
- DFDavid Friedberg
The New York- The New York Times broke this story in 2012. Stuxnet was a malicious computer worm, and I'm reading off of Wikipedia because there's a lot of reporting that has different opinions on this, that was first to cover- uncovered in 2010 and was thought to have been in development since at least tw- 2005. Now this computer worm was supposedly developed by Mossad and the NSA and it was a malicious computer worm that ultimately allowed intrusion into the control systems of the centrifuges-... of Iran's uranium refining systems and they basically were then able to make those centrifuges go haywire and destroy themselves and they did this over and over for several years and the Iranians could not figure out what was going on or why. They kept it completely secret. Ultimately, it was revealed that there was this operation organized by the United States called Operation Olympic Games that was a cyber disruption operation and that Mossad had a critical role in.
- CPChamath Palihapitiya
By the way, there, there are two other stories that build on top of this, they're... that are tangential but related. One is that there was a, a nuclear engineer that Israel felt should be unlid and, uh, the way that they did it was via some, like, remote control machine gun that they planted off of, like, a highway where the car egressed off the highway and then all of a sudden the thing was shot up. A different example was, there's a story about how they figured out that Yasser Arafat was sick because they were able to collect a stool sample from a pipe that left his home and they were able to kind of diagnose that, A, it was his stool and then, B, he had some chronic illness. My, my, my point, I think, in all of this is, is kind of where you're going, which is that when you have such capability and such precision, to go to the other end of the spectrum you really have to be sure that you're right. And, you know, as Sak said, I think we're looking back and it's clear that the support around the world, it just isn't there for that kind of mass casualty and that kind of, like...
- DSDavid Sacks
If Israel could actually destroy Hamas and achieve its military objective in Gaza, that'd be one thing, but I think we've seen that that's impossible. I mean, Ha- Hamas basically blends in with the population, it's indistinguishable, and the leadership is hidden deep underground and the Israelis have not been able to root them out, again, Sinwar has not been found. And so you've destroyed Gaza but you have not achieved your objective of eliminating Hamas and in the process you've deeply alienated-
- DFDavid Friedberg
No, I mean, it's just-
- DSDavid Sacks
... most of the world-
- DFDavid Friedberg
It's just like-
- DSDavid Sacks
... and, and you made the situation worse basically.
- DFDavid Friedberg
This is like the Russians, it's like the, the Russians and the Americans trying to chase the Taliban in Afghanistan forever. This is not a group of individuals that once they're gone everything is fixed.
- DSDavid Sacks
Everything's just worse. I mean, you still have the same problem. In fact, now the entire Palestinian population's radicalized. In fact, the whole Arabic Muslim population in the Middle East is more radicalized against you than they were before. I mean, I know there was already a-
- DFDavid Friedberg
Yeah.
- DSDavid Sacks
... significant amount of hatred, but now it's worse. And you haven't, you haven't fundamentally solved the underlying issue. I think the 9/11 analogy is apt. I mean, we went off after 9/11 half-cocked into all these wars in the Middle East. I think that going into Afghanistan, I think you could... that was justified because they were harboring Al-Qaeda. But then we went into Iraq because really members of the Bush administration had a preexisting agenda and then they, they lied us into it saying that Saddam was connected somehow to 9/11 and we began a 20-year process of just plunging ourselves into all of these wars. It only made everything worse, you know? One of the reasons why Iran is in such a strong position today in the Middle East is because we took out Iraq. We basically created a power vacuum in the Middle East that they ended up filling.
- DFDavid Friedberg
I recently heard that after Israel struck the embassy in Damascus a few months ago, you may remember this, Iran launched a, a counterattack and do you remember there were all these, like, drones that they sent, hundreds of them into Israel? But there was supposedly a forewarning that these drones were on the way, there was notice given and it was like, "This is it, this is our proportional response and we're done."
- CPChamath Palihapitiya
That's right. That's right.
- DFDavid Friedberg
What I heard was that Netanyahu did not want to stop, he wanted to escalate after that response from Iran. Now, that coupled with what's going on in the West Bank right now where there is a restricted movement of Palestinians within the West Bank and continued development of Jewish settlements, I think really represents a major risk to the region, the Middle East region, that we could see an escalation beyond the response that may be mandated or necessary to secure the state that makes things much, much worse in the region and could isolate Israel even further and ultimately draw a lot of power to that region to try and figure out what side are you on and how do we resolve this, and that could lead to something much bigger and much nastier. So I think while we all observe this and watch this, the, the behavior of the, the targeted attack in Hamas, for me it, it's not the issue as much as indicating the capacity of this military and this intelligence that means that they probably feel highly emboldened to take whatever steps individuals feel are necessary to secure the state for the long run, which could mean an increased escalation in conflict. And, and that's, I think, a real, a real kind of point of concern. And that's the, one of the black swan events I think that's still outstanding right now, because if that does happen, if there is, for example, an unraveling of the West Bank, you could see one of these sorts of events that everyone gets drawn like a magnet to the Middle East and you end up with a, a major global conflict that becomes a problem for markets, it becomes a problem for the world, and, and that could be the catalyzing event that I don't think any of us wanna see.
- CPChamath Palihapitiya
To use your logic from before, the thing that may plunge the world into having to have a point of view on this may actually be a political calculus that Netanyahu has to engage in which is around keeping small factions of his coalition government in place, which may not actually represent the full view of the Israeli people. That's what's even more tragic. So it's not... Obviously the Palestinians don't want it, but many Israelis may not want it either and there may be no avenue if he wants to remain in power, and that's what's so scary.
- DSDavid Sacks
Look, I think there's no question that we're on a path here where we could have a regional war in the Middle East. Remember that after Israel hit...... the Iranian general in, in Lebanon. The Iranians responded two weeks later with that massive drone and missile attack. Most of the missiles were intercepted by Iron Dome, and I think America participated in that as well. I think one or two of them got through. And then Israel launched kind of a weak missile attack on Iran and that was kind of the final word on it. There were people in Netanyahu's cabinet, like Smotrich and Ben-Gvir, sort of the more hard-line, radical right-wingers, who I think publicly tweeted that they, they thought Israel's final word on it was weak and they clearly wanted to do more. So I think the point is just that when we had this last exchange between Israel and Iran, it felt like it was on the verge of tipping over into a regional war. But I think partly due to the efforts of the United States, we were able to help tamp that down. I think now, Iran's promising revenge for what just happened in Tehran and this could set that, that escalatory spiral off again.
- DFDavid Friedberg
Totally.
- DSDavid Sacks
If you were to place odds on, on this, I'd say it's at least 50/50 that-
- DFDavid Friedberg
Yeah.
- 1:06:17 – 1:19:09
Bill Ackman withdraws Pershing Square USA IPO
- DFDavid Friedberg
going.
- CPChamath Palihapitiya
(laughs)
- DFDavid Friedberg
So Bill Ackman's withdrawn his plans to IPO Pershing Square. You know, Chamath, do you want to just give us kind of the background on what he was trying to do? And obviously this was an attempted $25 billion raise as an IPO. He recently reduced the raise target to two billion. And when the order book came in, I believe at less than a billion, he scrapped the plans entirely and just announced yesterday that he's pulling the IPO. So can you just explain a little bit about what this IPO was, and then we'll talk a little bit about why we think it fell apart.
- CPChamath Palihapitiya
I can only repeat what I read, but I'll try to kind of, like, translate it into non-Wall Street speak. So basically, he has a company, but what that company does is it gets investors to give...... he, he, it slash him money, and then they invested in all kinds of things that they deemed worthwhile. It could be bonds, it could be stocks, it could be currencies, it could be derivatives. They generate a return, and then they give those returns back to their investors. So that is a hedge fund. The holy grail has always been trying to figure out how can an organization that is-
- DFDavid Friedberg
But those funds are, sorry, tho- those funds are raised and distributed back, right? I mean, I think you should, uh, sorry-
- CPChamath Palihapitiya
Exactly.
- DFDavid Friedberg
I don't want to interrupt, but yeah. Let's just go ahead and say that.
- CPChamath Palihapitiya
But the, but the, but the holy grail for someone who runs those businesses is when they realize, "Well, listen, I get paid a great profit share from those funds when I'm successful. I'm, I'm also allowed to take a 2% per year management fee, but I believe I'm building equity. And can I get somebody else to recognize the fact that I'm building equity?" And that's no different than a startup, right? So, you know, Friedberg, you're building Ohalo. You believe that you're building all kinds of really interesting things rooted in science, and you want other people to judge the value of that as measured by your equity, right? Independent of your revenues and profits today, they want to project into the future. The problem is that hedge funds have not found a very elegant way to demonstrate that they have any equity value. And there've, there's only been a few and the formula has been the same. So companies like Blackstone, companies like KKR, companies like Apollo, what have they proven? They've proven that they can raise enormous amounts of money, so most of these organizations now are approaching a trillion dollars of capital raised. And they tell investors, "Well, look, don't worry about the returns anymore. Worry about the 2% because that's like our revenue, and we're generating $20 billion a year of revenue that'll grow at some ratable proportion. We'll manage the teams, we'll compensate them well, but there'll be lots of profitability." And people have bought that story. So I think a lot of smaller organizations who aspire to be like a Blackstone or an Apollo have tried to get people to buy into this story. And I think what Bill Ackman was trying to do was some version of that, which is to say, "I'm going to build an enterprise here. Pershing Square is going to be a standalone business. It's going to have enterprise value, and you're gonna measure that based on the assets that I manage, and it's going to be much greater than what I manage today." And I think he manages roughly 10 billion today. But he thought he was gonna raise another 25 in this IPO, and then in very short order, be at 50 billion. And so he got people to invest in that business on that premise. And I think folks put in around a billion dollars and they valued that entity at 10 billion. And so he tried to go and raise his fund. He thought it was gonna be 25, and it turned out, I thought it was two, but Friedberg, you just said it's less than one. I didn't, I di- I di- I guess, or around one? I just heard that. I'm just hearing that from you for the first time. So w- w- I guess what is the takeaway? Like-
- DFDavid Friedberg
Chemut, real quick. You know, you, this, this was a, this was a closed end fund he was trying to raise.
- CPChamath Palihapitiya
No, but he's, I think he's also said that Pershing Square eventually has a path to go public. That's how he sold the billion of equity at 10 billion in the master LP.
- DFDavid Friedberg
Yeah, but this IPO was just for a fund. It was just, uh-
- CPChamath Palihapitiya
No, no, no. There was, there, it was the IPO of the fund, and then they were planning afterwards the IPO of Pershing Square-
- DFDavid Friedberg
They were planning afterwards, yeah.
- CPChamath Palihapitiya
Yes.
- DFDavid Friedberg
Which he didn't do.
- CPChamath Palihapitiya
My only point was that, that the fund was d- basically it's launching a fund and then the goal is not the fund itself. The goal is to buttress the, the underlying logic to take the whole thing public, the manager.
- DFDavid Friedberg
Okay. Okay.
- CPChamath Palihapitiya
And the, and that's what I mean by taking a company public in finance is next to impossible.
- DFDavid Friedberg
Yeah.
- CPChamath Palihapitiya
So the whole point is like, what are these businesses in the business of doing? They're, they're in the business of making bets. The problem is that those bets are short-term anomalous events. Sometimes they work, sometimes they don't work. And the, the problem with that is that investors who are trying to underwrite 20 or 30 years of returns don't know how that's predictable over that period of time. Like, for example, you're genetically engineering all kinds of produce that we are going to ingest. If that stuff works at scale, you will have built an enterprise that theoretically has the potential, unless it's disrupted by something else, to make revenue for 20 or 30 years. So people can underwrite that. Google makes a search engine. It's gonna last for 20 or 30 years. Facebook makes a social network. It can last for 20 or 30 years. The business of making bets is typically something that can only be measured in days or weeks, maybe months at best. And so I think what he ran into was that realization. It's very hard to get people to value an institution in this way. And so the thing did not work. He'll go back and he'll retool. The thing that I give Bill Ackman an enormous amount of credit for is he is one of the most resilient individuals I've ever seen in high finance, but generally as a business person. This guy has, he surfed some really big waves, he's landed some really good sets, he's also gotten crushed a few times, and the guy just keeps coming back and he seems to be getting more and more refined and capable as a business person. So, you know, he'll probably figure out a way. This is not the first time he's publicly dealt with things that have not worked. But I think it just goes to show you that in finance, these entities that try to sell a piece of the, quote unquote, general partner as a company, I just think that it's, um, frankly that it doesn't work. And this is just a, you know, an, uh, an example, uh, yet another example that there's not a lot of equity value in these businesses.
- DFDavid Friedberg
Sax, some reports indicate that investors pulled out of the Pershing Square IPO because of the current market conditions that a lot of, uh, market indices have stormed higher, and that there is now less upside, um, and it's not a great time to be entering the equity markets. Other reports indicate that investors lost interest in Ackman's fund...
- CPChamath Palihapitiya
... because of his activity on X or Twitter. Have you, um, do you have a point of view, do you think that folks pulled out, investors have pulled out? You're obviously a fund manager who is very active and opinionated on X and (laughs) you know, X/Twitter.
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
Like what, you know, do you think, has this affected your relationship with, with raising capital if you're f- willing to talk about it or maybe just comment on the Ackman, you know, issue that he ran into? Why did this fail?
- DSDavid Sacks
I just don't know. I honestly haven't-
- CPChamath Palihapitiya
Yeah.
- DSDavid Sacks
... followed his, um, his IPO process at all.
- CPChamath Palihapitiya
Okay.
- DSDavid Sacks
Um, I would say that the market we have right now, it's not the best it's been, but it's also not the worst. So I'm always reluctant to blame macro conditions without having a more specific explanation.
- CPChamath Palihapitiya
Do you have a point of view on, on investors having an issue with Ackman because of his outspokenness on various, uh, social and political issues over on X?
Episode duration: 1:19:09
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