Midterm Blood Bath, $4T AI Sell Off, Data Center Freeze, What’s Next for Trump

1. 0:00 – 3:37

   Bestie intros!

   1. JCJason Calacanis0:00

      All right, everybody. Welcome back to the number one podcast in the world, the All-In Podcast. And I'd like to start by saying that All-In recognizes that we are on the sacred land in Austin, Texas, of the Caddo-

   2. DSDavid Sacks0:15

      [laughs]

   3. JCJason Calacanis0:16

      ... the Comanche, the Kickapoo, and the Tonkawa.

   4. DSDavid Sacks0:18

      [laughs]

   5. JCJason Calacanis0:19

      And, uh, we appreciate all their sacrifices to bring us here. And, uh, we will be evaluating, I just talked to our HR department, we'll be evaluating a fifth bestie. Brad, too white, too male, so we're looking for alternative DEI fifth besties to include in the round table.

   6. DSDavid Sacks0:36

      Wow.

   7. JCJason Calacanis0:36

      So some big changes coming to the-

   8. DSDavid Sacks0:38

      DEI is back is what you're saying

   9. JCJason Calacanis0:39

      ... DEI is back. Sacks, what, did you have anything for the docket this week [laughs] ?

   10. CPChamath Palihapitiya0:43

       I have an announcement.

   11. JCJason Calacanis0:43

       You have an announcement. Okay.

   12. CPChamath Palihapitiya0:46

       I'm transitioning.

   13. DSDavid Sacks0:46

       [laughs]

   14. JCJason Calacanis0:47

       [laughs] From a douchebag to an [beep] .

   15. DSDavid Sacks0:52

       [laughs]

   16. JCJason Calacanis0:53

       [laughs]

   17. DSDavid Sacks0:55

       We'll let your winners ride.

   18. JCJason Calacanis0:58

       Rain man David Sacks.

   19. DSDavid Sacks1:03

       And instead, we open source it to the fans, and they've just gone crazy with it.

   20. JCJason Calacanis1:07

       Love you, bestie. Queen of quinoa. Sacks, where do you want to start? You want to start with, um-

   21. DSDavid Sacks1:14

       I think there's some really important news around SaaS out there. I mean, maybe-

   22. JCJason Calacanis1:20

       Yes

   23. DSDavid Sacks1:20

       ... Salesforce launched a couple of new features. Definitely top a docket type material.

   24. CPChamath Palihapitiya1:25

       I'd like to start with Science Corner.

   25. JCJason Calacanis1:27

       [laughs]

   26. DSDavid Sacks1:27

       [laughs]

   27. JCJason Calacanis1:28

       Words nobody in our fan base have ever said.

   28. CPChamath Palihapitiya1:31

       I'm ready to go. You guys want to talk about Exponential Time Hypothesis?

   29. JCJason Calacanis1:34

       I think that's what the audience wants. They want the, the SaaS update from Sacks and the science update, and then we can get our market review and we'll wrap the show up. No. In all seriousness, there was an election this week. We had an amazing, uh, live stream. Over a million views so far. Uh, crazy, Chamath. I don't know if you knew this, but 400,000 people tuned in live, making us, I believe, the number one election night live stream.

   30. CPChamath Palihapitiya1:59

       Not true. It was 500,000. And just to put it-
2. 3:37 – 32:26

   Midterms postmortem: What led to a generational GOP collapse?

   1. JCJason Calacanis3:37

      So let's start with our postmortem on what just happened in the midterms. Obviously, the Democrats sweeped both chambers of Congress, and they won at least 29 governor races. Dems will wind up with 54, 55 or 56 seats, depending on how Alaska and Mississippi wind up. They have a lot of, um, votes still coming in in the House. Dems will have at least 250 seats, maybe even 260. The bigger story is where the Republicans lost deeply red states that haven't gone blue in generations went blue, including the great state of Texas. Please don't blame me. I've only been here for three years, and, uh, you might be surprised at what my voting ticket looked like. Kansas, Iowa, South Carolina for the first time in decades. Trump won all of those states by double digits just two years ago. Compared to 2024, the GOP lost ground in every voter group, even white men. So let's go around the horn. Sacks, people wanna hear from you most of all, I guess. So what went wrong here? What are the lessons the Republican Party can learn, and, and what did the Democrats do right in the last 18 months leading up to the midterms?

   2. DSDavid Sacks4:53

      This was a shellacking. This was a blowout. It was, I believe, the biggest midterm loss since the Watergate midterm loss. So this was obviously a big defeat for the Republicans. There's no sugarcoating it. What's the reason for that? I believe the vice president, JD Vance, explained it very well. It was this war. And I, the only thing I would add to that is it was this war and the economic consequences that follow from the war. So what am I talking about? Price of gas, it was around three bucks before the war, went over four and higher. Price of diesel, even higher. And then that factors into the cost of food, all the goods that have to be transported. Also, fertilizer costs went up. And so you saw the inflation rate at the beginning of the year, back in January before the war, it was down to 2.4%. We finally had that problem licked just about. Remember, it was 9% under Biden, and in the first year of the Trump administration, we brought it down to 2.4. The market was expecting multiple rate cuts this year, and we were forecasting 5% GDP growth, which I don't think was too overly ebullient based on what we were seeing at that time combined with the expectation of rate cuts.

   3. JCJason Calacanis6:05

      Aggressive-

   4. DSDavid Sacks6:05

      Then you got this-

   5. JCJason Calacanis6:06

      ... but not unbelievable.

   6. DSDavid Sacks6:07

      Unrealistic

   7. JCJason Calacanis6:07

      Not unrealistic.

   8. DSDavid Sacks6:08

      Yes.

   9. JCJason Calacanis6:08

      Yes.

   10. DSDavid Sacks6:08

       Okay And by the way, the prediction markets back in January were showing a 70% chance of Republicans holding the Senate, and then the House was perceived to be a toss-up. I think that if this election had happened back in January, it would have been a pretty successful one for the Republicans. What happened since then? Well, you got inflation going from 2.4 to 3.7%, again, mostly driven by the cost of gas and diesel and all these other products where you have to pay a higher cost of transportation, and you end up not having any rate cuts. You end up getting a rate hike that brought the cost of mortgages to roughly 7.5%, and that overall fed this narrative around affordability. So it's the war plus the perception of the lack of affordability is what really created this tidal wave. Now, you know, I, I have to admit, I thought that ... I mean, look, I didn't think this would be a great election for Republicans, but I thought that it wouldn't be this bad. I, I, I was wrong about that. I was-

   11. JCJason Calacanis7:12

       You said it was a spritz. It would be a spritz

   12. DSDavid Sacks7:13

       I thought it could be a spritz. That was based on a couple of things. Number one is that the last few elections, the pollsters have all been wrong, and, and Trump has always managed to defy the odds, and I thought that this polling data must fall into that pattern. And then the second thing is that the economy is not that bad. I mean, in fact, it's quite good. So just today, we had a new jobs report. It was a very robust jobs report. The number of new jobs created is being revised up. You've got unemployment tick down to almost record low, 4.1%. You've got still pretty healthy GDP growth, in the first half of the year was around 2.1 to 2.5%, and then third quarter, the tracking by GDP now is 3.7%. So I thought given the fact that you got great employment, you got solid GDP growth, I thought the fact that inflation was too high would not result in this type of tidal wave. I thought it'd be more like the Biden Midterms where he had extremely high inflation, but the economy itself was still pretty decent, and it ended up being more of a red spritz as opposed to a red wave. So that was my pattern recognition. It was wrong, and I think one of the reasons why it was wrong here is because I think the public is in a pretty ornery mood. They're very concerned about affordability. It doesn't matter how good the economy actually is. It matters how good people perceive it to be for them. And in the first year of the Trump administration, we made enormous progress in delivering real post-tax household income. It rose by, like, 3.1%, but because of the inflation numbers over the last six months, you're starting to chip away at that, right? Because again, as long as inflation is growing faster than your wages, you're losing purchasing power in real terms. I think the electorate is getting ornery about that. And just one other thing I, I wanna say about it, which is there's one other piece of why the war, I think, was so bad, which is it fractured the Republican coalition and the Republican base. Jake, how you've pointed this out, we lost all the podcast bros. I mean, obviously it was Tucker Carlson and Joe Rogan and Theo Von and, and that whole set-

   13. JCJason Calacanis9:31

       Megyn Kelly

   14. DSDavid Sacks9:32

       ... Tim Pool and Megyn Kelly. So, you know, a house divided against itself cannot stand. I mean, we lost a huge part of our base, and I would say that the Republicans in particular are dependent on the podcast circuit. Let's call it alternative media. Why? Because the mainstream media hates us. Legacy media hates us. They will never give us a fair shot.

   15. JCJason Calacanis9:51

       Oh, and they're 90% left, so it is what it is.

   16. DSDavid Sacks9:53

       Of course.

   17. JCJason Calacanis9:53

       Yeah.

   18. DSDavid Sacks9:54

       And I think one of the reasons why Trump produced such a resounding victory in 2024 is he appealed to that whole podcasting circuit, and, and frankly, we should have done a better job giving them all front row seats in the White House press room. We should have stayed connected to all of, all of them because they are our media. By the way, they don't, you know, they don't work for us. They're willing to defect, obviously.

   19. JCJason Calacanis10:15

       They have their own opinions.

   20. DSDavid Sacks10:16

       They have their own opinions.

   21. JCJason Calacanis10:16

       They're free thinkers. Yeah.

   22. DSDavid Sacks10:17

       But we have to pay attention. I think our side has to pay a lot of attention to them because without them, we don't have any media that supports us. So I think that losing them was a big deal. It fueled-

   23. JCJason Calacanis10:30

       Yeah

   24. DSDavid Sacks10:30

       ... the sense, and I think that a lot of those people showed up and then did a protest vote-

   25. JCJason Calacanis10:35

       Got it

   26. DSDavid Sacks10:35

       ... because they wanted to send the message that they want out of this war.

   27. JCJason Calacanis10:39

       Friedberg, just a couple of quotes for you to react to. Ted Cruz called it a Watergate-level repudiation. Chamath DeSantis said, quote, "Close to an extinction-level event for the current GOP," and, uh, in a very long X post that JD Vance did, that was pretty surprising for everybody that there was some, uh, reporting it was approved, maybe not approved. We'll, we'll get all that out later, but what's important is what he said. He's in line with you, Sacks, the Iran war was the driving force here in the loss, and that the GOP has to rebuild trust with voters on four axes, ending the war, focus on cost of living, putting America first, and, uh, maybe a little controversial, uh,ly, change our relationship with Israel. What are your thoughts on JD's posts and the other reactions, and just why did this turn out to be a tsunami?

   28. DFDavid Friedberg11:34

       I don't know if it's as much-

   29. JCJason Calacanis11:35

       Friedberg

   30. DFDavid Friedberg11:35

       ... of a positioning and marketing issue as it was sort of fundamental. I'll go back to the clip from the prediction show right after Trump was elected.
3. 32:26 – 53:13

   How can Trump salvage his presidency?

   1. JCJason Calacanis32:26

      topic here, our second topic, uh, which is gonna be what the next 24 months are gonna be about. So Sacks, you wanted to get to this. Next 18, 24 months, is there a path to redemption for President Trump? Is there a way to turn this presidency around and maybe save his legacy?

   2. DSDavid Sacks32:49

      Well, first of all, let me put up some charts here since you guys are doing the chart game, and I didn't know we were gonna play the, the chart game today.

   3. JCJason Calacanis32:55

      [laughs] Today is-

   4. DSDavid Sacks32:55

      So Nick, can, can you, um-

   5. JCJason Calacanis32:56

      Who's got the best charts? [laughs]

   6. DSDavid Sacks32:57

      Yeah. Nick, can you throw up these charts? Okay. So, so look, J Cal, there's all sorts of issues out there that people are gonna point to, and I know you've got yours, and I'm not saying that every single issue has been executed perfectly. I do think that President Trump deserves enormous credit for completely sealing the border and solving that immigration issue.

   7. JCJason Calacanis33:19

      Agree with that.

   8. DSDavid Sacks33:19

      Just as an example. But look, again, the question is, why was this not a normal midterm result? Look at the Trump approval rating versus the price of gas. It maps perfectly, okay? Trump net approval maps to the price of gas. Okay, next chart. This was the prediction market for which party will win the Senate in 2026, and what you see is that the Republicans were expected to win by a very large margin throughout the entire first year of the Trump presidency, all through the things you were talking about, J Cal. Okay? So the tariff rollout did not affect this whatsoever. That was the Liberation Day in April. Not even a blip here, okay? April of 2025 wasn't a blip.

   9. JCJason Calacanis34:09

      And to be clear, not a blip on the Senate balance. Yeah, yeah.

   10. DSDavid Sacks34:13

       Yes, but, but I'm using this as a proxy-

   11. JCJason Calacanis34:14

       Not the approval rating I showed right

   12. DSDavid Sacks34:16

       I get it-

   13. JCJason Calacanis34:16

       Yeah

   14. DSDavid Sacks34:16

       ... but I'm using this as a proxy for what just happened-

   15. JCJason Calacanis34:18

       Okay

   16. DSDavid Sacks34:18

       ... where we lost, what? Like, eight or nine Senate seats. Okay, where does it start to change? March. March of 2026. What happened? When did the war begin? February 28th of 2026. Very clear that's where everything starts to change here in terms of losing the Senate. Next chart. Okay, now just ask voters, "What'd you vote for? Why'd you vote?" Question, thinking about your vote for Congress, how important to you was the war in Iran? Crucial, 34%, a major factor, 40%. So basically 74% of the electorate said that it was either crucial or a major factor. And then of those, they broke massively for blue. And this doesn't just include Democrats, obviously. It includes a lot of independents, and it even includes, I would say, younger Republican voters. There's a huge divide in the party, I think, between you kinda got the Fox News group, it's kind of the over 50 or even over 60. They're, I think, still supportive of the war. But you look at the younger voters, young males, highly against this. Again, it ties back to the podcast bros. So again, there's abundant data to show what I've been saying. Now, your question was, "Can Trump fix this?" I think absolutely because the root of the problem here-

   17. JCJason Calacanis35:45

       What's your top three things he can do to fix it?

   18. DSDavid Sacks35:48

       Just get out of the war.

   19. JCJason Calacanis35:49

       Okay, end the war.

   20. DSDavid Sacks35:50

       That's my number one, my number two, and my number three.

   21. JCJason Calacanis35:53

       Okay.

   22. DSDavid Sacks35:53

       Because what will, what will happen? The price of Brent crude will drop precipitously. On the day of the election, the price of Brent crude dropped 10%. Is that because something changed in the Strait of Hormuz? No. It's because the market started to price in the mere possibility that the war would end sooner, and we got a 10% cut in the price of Brent crude. It will go from, you know, it's been as high as 117. It'll go from 110 to 70 if this war ends. Gas prices will drop, diesel will drop, the price of food will drop, and then the underlying strong economic growth, the GDP growth, and the employment picture, which are still robust, will come into focus. And I think that Trump's popularity will rebound and be back in the 40s.

   23. CPChamath Palihapitiya36:44

       Hmm. Okay.

   24. DSDavid Sacks36:45

       So I-- That's the thing we need to do, and if we don't do that... Look, if this war continues-

   25. CPChamath Palihapitiya36:49

       But Sacks, can you-

   26. DSDavid Sacks36:50

       Hold on. Let me finish this one point.

   27. CPChamath Palihapitiya36:51

       Yeah.

   28. DSDavid Sacks36:51

       If the war continues, the Republicans will continue to bleed popularity.

   29. CPChamath Palihapitiya36:56

       I don't think this is the war in Iran, meaning it is in as much as it adds to a broken economy. Since COVID, the economy has been structurally broken, and I just think that there's a huge voting block that keeps swinging back and forth to either side, asking them, "Solve the problems," and giving people mandates to solve a problem. That's why I think somebody needs to understand economic populism. Do you buy that argument, or do you think that it's more narrowly just the war in Iran?

   30. DSDavid Sacks37:25

       I don't wanna make it, like, so overly abstract. Like, to me, the issue is affordability, okay? And I think the electorate really cares about that. It's like the central pocketbook issue.
4. 53:13 – 1:24:21

   Market reaction: Data center fears, $4T in market cap shed, AI ban potential

   1. DSDavid Sacks53:13

      down to.

   2. JCJason Calacanis53:13

      All right. We, we, we dipped our toe into data centers. Let's go do a double-click here and dive right in. Stocks got killed earlier this week. Nvidia, SpaceX, Tesla, AMD, Micron, everything across the board took a massive haircut. Close to $4T in market cap wiped out. Now again, [laughs] Trump has overseen the top ticking of the market for the last two years. So overall, I think the market is still up during his second term. But this was the second, uh, this was the worst single day in the history of the stock market by total dollars, not percentage obviously, and, and it's the worst day for a little while. This puts a bit of a dark cloud over Anthropic's IPO, and of course, after that, OpenAI's. Polymarket, our great partner, and Polymarket, thanks for Shane for coming on on Tuesday, says that, uh, they're gonna have a 71% chance of going public this year. It was 95% before the midterms. And The Wall Street Journal reported today that the haircut could be baked in now. Instead of 1.5 to 2 trillion and then going to 3 or 4 trillion, as Gavin Baker said on this podcast, we could be looking at a 1 trillion, 1 point low X trillion. Today, markets have rebounded a bit, and all of this is based upon Chamath, are these data centers gonna go forward or not? Are they gonna be stopped? And then what is going on with governors, specifically Sax evoked what happened here with Abbott losing to Gina Hinojosa, um, who took the time To do a, a, a little presser last night and give her position, went on all the top shows. She's being pretty clear. She wants a great deal, and, uh, it doesn't seem like she's against them. She's gonna let people build them out until 2028, but it's unclear what happens after that point. You're obviously connected, I think, Chamath, to a lot of the major players in the AI space. What, what's gonna happen with data centers? Can the Democrats afford to pop the AI bub- bubble by then putting cold water and slowing down data centers? 'Cause that will tank the economy. I think we all understand that. So is that in their best interest, and is this posturing and positioning to get better deals for their local communities, as is their job?

   3. CPChamath Palihapitiya55:38

      There's an incredible video where the SpaceX team went to Cochise County in Arizona to present their plans for this new six-gigawatt data center, and if I had to characterize that video, it's on X if you wanna find it, but it's these two very bright, earnest people from SpaceX trying to explain how they're going to reduce electricity costs by 40%. They don't use water. They'll reduce property taxes by 20%. They will be able to fund enough revenues to pay off a bond in the county, and it's just a litany of things, yeah? Meanwhile, the audience is just screaming. And what you see, the two people were very poised. Riley and Katie, those are their names. Good SpaceX employees. They should be proud of how they conducted themselves, but they were getting run over if you listen to this video. And my takeaway is, Jason, that this is an emotional issue that is not tethered to the facts, as Friedberg says. It represents a totem around the oligarchy and the, uh, economic fissure that exists in the US economy, but it also represents that the deals that have happened are a little gratuitous, meaning should it really be the case that the most powerful seven or eight companies need a tax break to invest 30, 50, $80 billion to then generate three, four, $500 billion? Probably not. Now, they're doing smart deals because that's what made sense, but I think what the incoming governors are going to say is, "These things are off the table, and instead we want to have directly measurable economic impacts before we even entertain this." I think what it means is we're gonna see a slowdown, and I think what that does is it benefits the hyperscalers because they have existing capacity. I think it's very bad for the Neo clouds because they're renters, and it's pretty bad for the foundational models because they are so short this capacity, and they need it to grow. So to the extent that these frontier models are so much better than everybody else's product, they are the ones that need this capacity. It sets the hyperscalers to be a king maker, and they have this interesting game theory now.

   4. JCJason Calacanis57:51

      Can you just say who the hyperscalers are just so people understand the difference between them? Yeah.

   5. CPChamath Palihapitiya57:55

      Amazon, Meta, Microsoft, Google, SpaceX.

   6. JCJason Calacanis57:59

      Yeah.

   7. CPChamath Palihapitiya58:00

      And what they'll be able to do is make a decision. Path number one is continue to rent in the way that you're doing it today, so the status quo. Rent to some customers, large corporates, right? Rent to the Neo clouds. Rent to the foundational models. That's what they're doing today. Everybody does that. But then there's the path less traveled, which all of a sudden becomes really interesting. You could decide to take all of the incremental compute and advantage your own products. So Google has a ton of capacity coming online. They could say, "I'm gonna give it to Gemini." What does that do? It actually allows Gemini to catch up in quality relative to the foundational models. Why? Because if you constrain the amount of assets that can actually generate compute, and a smaller surface area of it is available to the leading companies, those leading companies will have to pay more, the user experience will decay, and then other products can have time to catch up. And now that is important because Anthropic and OpenAI are in a very fast recursive loop. They're on a 60-to-90-day loop in improving their models. So now all of a sudden, without an infinite amount of supply coming online, you can slow these folks down. That's, that's the path less traveled. Then there is the crazy path.

   8. JCJason Calacanis59:22

      Crazy path.

   9. CPChamath Palihapitiya59:24

      You should look for this one very narrow thing. You and I talked about this before on the pod, but SpaceX and Anthropic's compute deal has a mutual 90-day out. Anthropic can term in 90 days. SpaceX can term in 90 days, terminate. If SpaceX says, "I'm gonna terminate this compute in 90 days," that is the king-making move. Why? It's a disproportionate amount of the compute that Anthropic needs. It allows SpaceX to reprice that compute at the spot rate, which is probably double-

   10. JCJason Calacanis1:00:04

       The market rate, right? Anybody-

   11. CPChamath Palihapitiya1:00:06

       The market rate

   12. JCJason Calacanis1:00:07

       ... the market rate.

   13. CPChamath Palihapitiya1:00:07

       And, and it, and it's probably not just double. It could probably triple. So whatever revenue you see on SpaceX's balance sheet from ANT could two to three X, and ANT would have no choice except to immediately capitulate and take the higher price. It would also show all of the other hyperscalers that they are very far away from having economic yield that is optimized, and so then it forces them to consider, "Should I be giving it to myself? Should I be selling it to these other people?" It then forces the Neo clouds to take all of this money that they've raised, whether it's debt or equity, and say, "I have two choices, which is to buy as much compute today as I can at whatever price it's available," because the other path is Assured destruction and bankruptcy for me because I'm just out of the game. And so what do they do? They will take the last gasp and do whatever they have. So I think all the game theory, Jason, r- literally comes down to this one deal and whether Elon decides to rip it. 'Cause if he rips it, watch out.

   14. JCJason Calacanis1:01:15

       Yeah. And the, the other two factors here, Friedberg, uh, and just some predictions, right now w- we have the tokens here in the United States. If the governors decide they want, uh, to put the screws tight on big tech, hyperscalers, and neo clouds, and they wanna slow this down, they will need to understand that these data centers could be put in Canada, in Mexico, in Singapore, uh, in Malaysia, and many other locations. The Middle East is a little bit off the table because of the war. War ends, you start putting these data centers in the Middle East, then the job of doing the next large model will not occur, Friedberg, on US soil. It might occur in Saudi Arabia, UAE, Qatar, Malaysia, Singapore. We're going to be a net importer of tokens, [laughs] and this will be the biggest cell phone ever because all those 300, $400,000, uh, jobs building these data centers are gonna go away. All of that tax will be collected locally in Malaysia, where Google is putting a huge data center. A- and the data can make it around the world quite quickly. It, it doesn't need to be in the United States, which these governors are gonna learn a very hard lesson in globalization. What are your thoughts here on the data centers being banned, or if it is just posturing? And then, Friedberg, could we see the United States become a net importer of tokens as opposed to a net exporter?

   15. DFDavid Friedberg1:02:41

       Well, they might ban the use of AI, too.

   16. JCJason Calacanis1:02:44

       Okay, well now-

   17. DFDavid Friedberg1:02:44

       So if they ban the-

   18. JCJason Calacanis1:02:44

       ... we're going to [laughs] ... Yeah.

   19. DFDavid Friedberg1:02:46

       Well, that's, that's-

   20. JCJason Calacanis1:02:47

       A, a very far out prediction. Yeah

   21. DFDavid Friedberg1:02:48

       ... that's being floated. I mean, they're... That's the conversation right now.

   22. JCJason Calacanis1:02:51

       Okay, u- unpack that. Who's having the conversation? What exactly is the proposal? Because that seems to me to be a little far out there.

   23. DFDavid Friedberg1:02:59

       The farther left you go, the, the more vocal politicians get on this point, which is no one sees the, quote, "benefit of AI," and they don't wanna see AI being developed, being deployed, or being used. That's the general statements that are, that are being made. So they wanna ban both its development, its deployment, they wanna ban data centers, they wanna ban technology companies from making models, and they wanna ban companies from using the models. And I think this sort of rhetoric leads to somewhere that's obviously more constrained than we are today.

   24. JCJason Calacanis1:03:34

       What are the chances something crazy like that happens? But handicap it for us here. 10%?

   25. DFDavid Friedberg1:03:38

       Well, Calif- California passed legislation and Gavin Newsom vetoed it. I think it's much higher than 10%. We're seeing state-based legislation. I mean, Sachs spent quite a lot of time on this, but there's a patchwork of hundreds of laws that are passing all over the country trying to regulate model development, model deployment, model utilization, what they're allowed to do, whether the local state government gets to audit and inspect how the models operate, uh, how people are using the models, what they're outputting.

   26. JCJason Calacanis1:04:02

       What do you, what do you say, Sachs? Answer his, uh...

   27. DFDavid Friedberg1:04:04

       And fundamentally, remember, a model is just a, a bunch of software. It's a code. It's a point about free speech. Can I actually run code on a computer? That is a restriction on, you know, someone basically reading a book, is a way to think about it.

   28. JCJason Calacanis1:04:17

       Sure.

   29. DFDavid Friedberg1:04:17

       Because at the end of the day, you're inputting and outputting digits, uh, ones and zeros.

   30. JCJason Calacanis1:04:22

       True sovereignty. Yeah.
5. 1:24:21 – 1:33:00

   Science Corner: OpenAI solves Exponential Time Hypothesis

   1. JCJason Calacanis1:24:21

      All right. Everybody has been demanding, Friedberg, that we do a Science Corner on this, uh, exponential time hypotheses. I guess, uh, a layman's way of explaining it would be computers can't solve important problems quickly. But there seems to be, uh, some science and some recent innovations that say maybe this hypotheses is no longer true. Please inform-

   2. CPChamath Palihapitiya1:24:45

      Look, I think-

   3. JCJason Calacanis1:24:45

      ... our audience about this

   4. CPChamath Palihapitiya1:24:47

      ... the, the reason for doing this Science Corner on this OpenAI publication is just to highlight some of the benefit and value that comes out of AI. These are, like, pretty substantial breakthroughs that are happening, all the math hypotheses they've published on. This one's called the Exponential Time Hypothesis, and it starts with, like, the most fundamental question in computer science, which is, "Can a problem be solved with a computer? And if so, how long does it take?" And that tells you whether it's actually practically computable. This is the key point of computer science. We wanna create these machines that can solve our problems. And there's a class of problems that are called P problems, where you can solve them in what's called polynomial time. The bigger the problem of a particular type-

   5. DFDavid Friedberg1:25:32

      The longer it takes. And polynomial time just means size cubed or size squared. It tells you how many seconds or minutes or hours it might take on a specific computer to solve that problem. And so the, the problem as it gets bigger, takes more time. And then there's what are called NP problems. These are problems where you can very quickly figure out if the answer is correct. So like, you know, it can take a long time to solve a big Sudoku puzzle, but you can check the Sudoku puzzle in a couple of seconds and see if it's right. That's an NP problem. And the key question in computer science has been, do P problems equal NP problems? Meaning, can you actually solve any problem that you can quickly check in a short period of time? And if so, then everything is computable. The entirety of the universe is computable, and that's the big question in computer science, this idea of this exponential time hypothesis, which was proposed in 1999 by a couple of guys, and they said for a specific type of problem called a 3SAT problem, which we don't really need to get into, the amount of time it takes is exponential depending on how big the problem is. So the bigger the problem gets, it's some, you know, number to the Nth power. So it scales exponentially in terms of how long it would take a computer to solve it, which means that they have demonstrated that there is a class of problems that can never be solved in a short period of time, and therefore, that entire class of problems means that P does not equal NP. So that's been their hypothesis since 1999, and what OpenAI did is they disproved that, and they disproved it in 175-page paper, [laughs] and it comes down to this one little formula, which you can pull up on the screen here, Nick, which we don't need to spend a lot of time analyzing to understand. But effectively, this little formula right here is OpenAI's paper demonstrating the, the outcome of the paper demonstrating that this 3SAT problem, this particular class of problems in computer science, can be solved in sub-exponential time, which means it will not take an exponential amount of time. So they disproved this big exponential time hypothesis that everyone thought was real, and what that means is that P could still equal NP, which means that theoretically every problem in the universe can be solved with a computer. This solution, it's, it's being evaluated now, so you know, it's not fully kind of verified by third parties yet. People are still trying to understand it. It's 175 pages with a very novel set of approaches that it's taken to try and get there. They did the whole thing end to end in less than 10 days. Some reports have argued they did it in a few hours. And so this was a deeply challenging question in computer science and has been for 27 years. Is this exponential time hypothesis real or not? And they just proved that it's not, and they did it in a few hours. So it, it may be esoteric for the majority of people listening to this, but it, it does a couple of things. Number one, it keeps in play the idea that everything in the universe can be analyzed and every problem theoretically could still be solved with a computer. And number two is it's amazing that OpenAI [laughs] was able to do this in a few hours and deliver this sort of a result that mathematicians and computer scientists have been struggling over for 27 years, and this proof is so far holding. So, you know, this is amazing. And, and so everyone in computer science, I think, was kind of shocked when this came out.

   6. JCJason Calacanis1:28:59

      Absolutely, yeah.

   7. DFDavid Friedberg1:29:00

      Uh, it was shocked in terms of how it was presented, how they solved it. It was very novel, and again, it's one of these moments of humility for mathematicians, for computer-

   8. JCJason Calacanis1:29:08

      Yeah

   9. DFDavid Friedberg1:29:08

      ... science being like, "Holy [beep] , I would've never done that." And-

   10. JCJason Calacanis1:29:11

       And Sacks, uh, Sacks, you were just very heated about the exponential time hypotheses in the group chat-

   11. DFDavid Friedberg1:29:17

       [laughs]

   12. JCJason Calacanis1:29:17

       ... for the past three weeks. So when you hear Friedberg tee it up here this crisply, how does this impact your thoughts on 2028 election and the future of humanity?

   13. DFDavid Friedberg1:29:28

       [laughs]

   14. DSDavid Sacks1:29:30

       Look, I think that AI super intelligence, whatever you wanna call it, is gonna create a, a lot of good things, and the, the fear around it, you know, maybe some fear is justified because anything that seems powerful can, can make people afraid, and obviously the future is unknown, so you can't prove exactly what's gonna happen. But I tend to think there's gonna be so many benefits to this technology, and frankly, if we don't do it, China's going to. They're gonna be the ones that benefit. JCal, you're right that if the US doesn't build the data centers, they'll get built in other countries, and we'll be paying to import the tokens.

   15. JCJason Calacanis1:30:03

       [laughs] From Mexico and Canada.

   16. DSDavid Sacks1:30:05

       Very dangerous-

   17. JCJason Calacanis1:30:05

       [laughs] From Malaysia.

   18. DSDavid Sacks1:30:05

       Very dangerous situation.

   19. JCJason Calacanis1:30:07

       It's so dumb.

   20. DSDavid Sacks1:30:08

       Yeah, yeah.

   21. JCJason Calacanis1:30:09

       Crazy. Chamath, I saw you-

   22. DSDavid Sacks1:30:10

       So-

   23. JCJason Calacanis1:30:10

       ... nodding there. Yeah, you have a background in computer science.

   24. CPChamath Palihapitiya1:30:13

       My formal education was in electrical engineering, but, um, I mean, I've, I've worked around software engineers for so long now. This is an incredibly interesting insight.

   25. JCJason Calacanis1:30:23

       All right. Another amazing episode of the All-In Podcast, the number one, two, and three podcast in the world [laughs] in terms of the rankings, I think. Uh, wow, what a week we had. We're number one, uh, in the live stream, and obviously four weeks running we've hit number one. Thank you to the audience, and, uh, we truly appreciate you being on this journey with us, and you can always expect as, uh, candid a discussion in the world as possible. Which it was very interesting in your discussion with Rick Rubin, Chamath. He was very, very taken with the podcast, and he is a, somebody who understands art and unique moments in the world. I thought it was very interesting that he kept pressing you on, "Well, what, what's the magic here?" 'Cause he's, he's kind of the Sherpa of magic in many ways, and, uh, I think the magic here-

   26. CPChamath Palihapitiya1:31:06

       He's, uh-

   27. JCJason Calacanis1:31:06

       ... is that we're candid, and, uh, we break each other's chops, and we try to move the ball forward with our candidness. And you had some very nice things to say about all of us, Chamath, and I just wanted to say thank you. You are my brother, and I love you.

   28. CPChamath Palihapitiya1:31:16

       Thank you. I love you, too. I mean, what I said to him basically at the core of it is we are a family, and we get together and chop it up once a week, and it's very rare to have a window into family squabbles. [laughs]

   29. JCJason Calacanis1:31:28

       Yes.

   30. CPChamath Palihapitiya1:31:28

       And I think that's basically, that's basically why it works. It's kinda unique, you know? That's maybe why the Kardashians work.

Episode duration: 1:33:03