All-In PodcastMore Trillion Dollar IPOs, Anthropic $3T, Zuck's Price War, China Ends Open Source?, Trump Accounts
EVERY SPOKEN WORD
100 min read · 19,828 words- 0:00 – 2:58
Bestie intros: Brad Gerstner fills in for Friedberg!
- JCJason Calacanis
All right, everybody. Welcome back. Number-one podcast in the world. It's July, All-In, Episode 280. Friedberg is on a little vacay. We'll leave it at that. And, uh, yeah, bestie Brad is here. How you doing, Brad?
- BGBrad Gerstner
I'm doing great. I'm do- uh, vacay in, uh, maybe Idaho or somewhere, J Cal?
- JCJason Calacanis
I-
- BGBrad Gerstner
You know?
- JCJason Calacanis
Who knows?
- BGBrad Gerstner
Who knows? Who knows?
- JCJason Calacanis
Who know? It could be anywhere. It could be anywhere. I mean, there's lots of things. He could be in plenty of places. And, uh, looks like you are, yeah, somewhere in the Northeast. I'll leave it at that. You having a little, uh, vacay for yourself this week?
- BGBrad Gerstner
Very pat- I'm in my flag room, very patriotic room here.
- JCJason Calacanis
Very nice.
- BGBrad Gerstner
You know, where I work on the East Coast in the summertime.
- JCJason Calacanis
Yes, yes.
- BGBrad Gerstner
And, uh, spent some time in DC this week.
- JCJason Calacanis
Mm, mm.
- BGBrad Gerstner
And, uh, it's been a great week. Been a great week-
- JCJason Calacanis
All right. So you're-
- BGBrad Gerstner
... celebrating America 250.
- JCJason Calacanis
Great, and you're gonna be out of there for the, by the, by the second week of August, yeah? So I have it August 10th through the 30th. I'm good?
- BGBrad Gerstner
[laughs] Exactly. Exactly.
- JCJason Calacanis
Okay, great. [laughs]
- BGBrad Gerstner
Just checking. [laughs]
- JCJason Calacanis
[laughs] I just wanna make sure.
- BGBrad Gerstner
Jason B&B. Jason B&B.
- JCJason Calacanis
Oh, absolutely. [laughs]
- BGBrad Gerstner
[laughs]
- JCJason Calacanis
You, you don't know the half of it, man. I am on a summer bender. I'm like, "Oh, where's your s- where's your vacation home?"
- BGBrad Gerstner
By the way, where are you? Where are you right now?
- JCJason Calacanis
I am in Paris. I did, uh, about eight interviews for, uh, at the Raise Conference. They'll be coming out, uh, in the All-In feed. And of course, cackling from the factory. Look at him. You're working in the factory. Chamath Palihapitiya. It's gonna be a hot software summer for Chamath. How's your hot software summer going?
- CPChamath Palihapitiya
It's good.
- JCJason Calacanis
Yeah?
- CPChamath Palihapitiya
Selling enterprise software is hard, but it's good.
- 2:58 – 27:39
OpenAI vs Anthropic IPOs: Why it matters who goes first, what they learned from the SpaceX IPO, the unlimited TAM of intelligence
- JCJason Calacanis
but let's start with the IPO update. You know, there's a trillion-dollar IPO rush to the exits and, you know, this was a big topic of discussion, Brad, at the Liquidity Summit last month, and we'd never seen a trillion-dollar IPO. We had one this year already. SpaceX trading right about where it went public, so it was priced, I guess, to perfection. And theoretically, gonna see two more. Uh, Brad has the inside information, so I'll try to get it out of him.
- BGBrad Gerstner
[laughs]
- JCJason Calacanis
OpenAI and Anthropic are slated to go out. Let's, uh, just go quickly over what happened with SpaceX. It ran up to $200 a share. Uh, it's been down a bit. It's at $150 a share. As I said, that's right at the IPO price. So it's trading at that two trilly market cap, currently seventh largest company in the world. And Anthropic confidentially filed on June 1st. I, I don't know why they call this confidential filing when it immediately comes out, uh, but I guess the information is confidential. Polymarket says 65% chance Anthropic's IPO will happen this year on light volume, 360K. And, uh, two weeks ago, Gavin Baker, another bestie, said he thinks they're gonna end 2026 with over $100 billion in revenue and very profitable. He said, a couple of us guessed on the program, that he thinks it would trade at $3T right now if it went public. Chamath, you made a great call on the pod. You said, "Hey, good idea for Elon to get out first." What are the chances here, Chamath, that these other two get out this year or maybe in like, you know, say, nine months in the, in, in the first quarter of next year? We'll start there.
- CPChamath Palihapitiya
Well, I think that these are all great businesses. I think the question is what is the market clearing price, and I think that's more of a function of how much appetite the markets have to absorb new issues and at what scale. That's number one, and I think that's mostly determined by price. So I think Anthropic and OpenAI are probably in two different places. The last time we heard from OpenAI, their cash burn was still quite high, just because of the diffuse nature of their business and more reliance on consumer than enterprise. I think Brad mentioned it in one of the pods that Anthropic may actually be accidentally profitable. I think he said something like that.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
Let me tell you something really interesting. I sat down with my CTO today, and I said, "How are we doing on token spend?" And he said the most incredible thing. He said, "Right now, our token costs are doubling every 45 days."
- JCJason Calacanis
Okay.
- CPChamath Palihapitiya
And I was like, "Ugh." And he said, "Yeah." And I said, "Well, what is the downstream productivity?" And he said, "Maybe 5% max."
- JCJason Calacanis
Okay.
- CPChamath Palihapitiya
And I said, "Okay, so my costs are doubling every 45 days. My upside is essentially flat." And he said, "Basically." And I said, "Well, explain why that is." And he said, "Honestly, what we're finding out is that you need to use a lot more tokens to get to this next- ... iteration of improvement because we've effectively already asymptoted." And I said, "So what should we do?" And he said, "Honestly, we ha- we have to figure this out, and so we're gonna take a step back and try to figure out what to do." I don't know how many other companies will actually go through this reckoning now, but the point is, everybody in the next three or four years will def- for sure go through it. So I suspect that if you can get out now, you should get out now before all of that starts to seep into the water table because I think that's probably what allows you to get out at a huge price and, and raise a huge amount of money.
- JCJason Calacanis
All right. Brad, you are, uh, well invested and well known for being invested in these two, uh, next IPOs, so you probably have some good insights since you talk to them on a regular basis. Chances they get out in the next six to nine months, both of them, you'd say 100% chance unless there's some outside event, you know, a blockade of Taiwan, some black swan event that we're not anticipating. W- what do you think the chances are they're public when we're sitting here and I'm skiing in Hokkaido?
- BGBrad Gerstner
Yeah, I think, I think it's very high. But let me, let me first say, you know, the SpaceX IPO where we were also investors and we also bought in the IPO, I mean, it was textbook. It was a hugely successful IPO. They raised $75 billion at 1.75 trillion, okay? So it went out below where we are today. It's up 25%. You know, and let's call it on 35 billion of forward revenue. So if you think about that revenue multiple, it's trading at 2 trillion on roughly 35 billion of, of forward revenue. It's an incredible achievement. I think it was textbook. I think Anthropic and OpenAI were watching very closely because, frankly, we had not had an IPO of that size. And to Elon's credit and to the team's credit, Bret and Gwen, they really pioneered some really smart and interesting things as part of that IPO. So, you know, you heard from Gavin. Anthropic's rumored to be, you know, trending over 100 billion in revenue compared to the 35, right? If they exit the year at 100, that means their gap revenue next year could be well over 100. So based on the SpaceX success, I think it would be a blockbuster IPO, and I think SpaceX has shown them the way on things like the total raise, pricing, liquidity, inclusion into the indexes, how to do the lockup. Like, I think they've gone to school-
- JCJason Calacanis
It was a staged release in terms of getting-
- BGBrad Gerstner
Correct
- JCJason Calacanis
... out of the lockup. It has to hit certain milestones, and, and some of those are time.
- BGBrad Gerstner
Early inclusion in the index, raised $75 billion. Like, you know, I mean-
- JCJason Calacanis
The early inclusion in the index, let me have you unpack that for a second.
- BGBrad Gerstner
Yeah.
- JCJason Calacanis
'Cause people said, "Hey, maybe this feels unfair that they-
- BGBrad Gerstner
Yeah
- JCJason Calacanis
... should be forced to buy it." What's your take on that? Is that just, like, haters gonna hate, or is there something to that?
- BGBrad Gerstner
I think there was legitimate concern, right? This had never been done.
- JCJason Calacanis
What is the legitimate concern? Yeah.
- BGBrad Gerstner
The legitimate concern is that a company that had not been through the process of being vetted post-IPO, there's a lot of volatility. You've seen that chart, Jason.
- JCJason Calacanis
Sure.
- BGBrad Gerstner
That the, the peak to trough drawdown in the six months post-IPO is 50%. We've seen a p- pretty big drawdown here from the peak to trough as well. So you don't wanna jam it into an index at the peak and then have a 30% drawdown on top of people, which often happens in IPOs 'cause people get excited. It runs ahead of itself. But they didn't do that here. There was fear that that was going to happen, so both the, the exchanges and the indexes, they looked at this, and they made some modifications because it... the, the other side of the argument is it's so damn big and important that it needs to be part of the index.
- JCJason Calacanis
Right.
- BGBrad Gerstner
Right? And so the reason the rules had previously existed is because most companies coming public were younger, earlier, less tested, less revenues, less profitable. All the things weren't as important in the overall scheme of things. So I think that they pioneered some really smart things. It's worked well. It's traded well. And so I think that that provides a bit of a blueprint for Anthropic. But just in s- in, in terms of the enthusiasm, i- is, is Altimeter, is a Fidelity, is a T. Rowe an enthusiastic buyer of Anthropic based upon the things we know today around profitability and model improvement and revenue growth, et cetera? Yes. Everybody would be pigpiling in. Everybody would be trying to get into the top of the book. And, you know, uh, the, the last I heard, you know, again, rumor that they would like to get out this year. On OpenAI, everybody knows that Anthropic kind of passed OpenAI on a revenue trajectory, but I will tell you, OpenAI's kinda got its swagger and mojo back. It's coming out, you know, just today with a whole new set of models. We know GPT-6. You know, there's a lot of talk of that coming out within the next 30 days, a whole new generation of models. I think their revenue has really ticked back up. The most recent kind of rumors I see on Twitter is around $70 billion techs a year. So just as a reminder, 70 billion may not be over 100 billion that's rumored in Anthropic, but it's still twice, uh, you know, where, where the revenue of SpaceX is at. So can they get out at over a trillion on that type of revenue growth, being one of the two frontier premier labs? I think the answer to that is yes. Um, I'm not sure there's a huge race between the two of them to get out first. I think they'll both go out when it's, when it's time. I think OpenAI has a little bit more complexity just associated with the co- corporate restructuring that they have to go through, et cetera. So I would be surprised if they go out before Anthropic, but the fact of the matter is I don't know. But today, as I sit here today, Altimeter would be a buyer at scale and at size in both of those IPOs.
- JCJason Calacanis
At 3 trillion, are you a buyer, or are you a, "Hey, you know, it's obviously gonna trade up and down, and I- I... there's no rush"? 'Cause you, I think, were the one who said on the pod or it might've been at Liquidity Live, uh, when I asked you point-blank, "Hey, should retail get involved in SpaceX? What's your thoughts?"
- BGBrad Gerstner
Correct.
- 27:39 – 54:29
The open source decision, Meta's new model, Zuck's price war, AI duopoly
- BGBrad Gerstner
I think the central debate right now in AI is the one that Chamath keeps pointing us back in the direction of, which is for 18 months since the DeepSeek moment, right? When the DeepSeek moment happened, the markets fell 40%, and there was a reason for that. Many started arguing that the frontier models were screwed, that open source was going to kill them, that they were closing the intelligence gap, that model routing was gonna make it easier and easier to route these tasks to cheap tokens. But despite all of those arguments, and now we're 18 months into this, and I had this back and forth with Gurley a lot. I love open source. I want all the competition in the world. Let's be very clear. But despite all of those arguments, the facts on the field are just the opposite. The share of economic value, right? There's this quote, there's this tweet this week from Jesse Zhang that we ought to pull up here. You know, the economic value, the share of wallet, is actually increasing to the frontier labs, while the share of tokens, these commodity tokens, is obviously going up, you know, to the other guys. And I had a little back and forth this week with Nikesh on this, kind of trying to suss out why is that the case, right? Because what people would have thought is, "Oh, cheaper, pretty damn good. 90% is good enough to do all these tasks that you're talking about, Jason, so nobody's gonna use the Anthropics and the OpenAI's of the world." But despite that, it looks like their share of wallet has gone up.
- CPChamath Palihapitiya
I think, I think it's not that. I think it's more that when the iPhone was a novelty, everybody would keep upgrading because you expected that the new price was worth it. And then at some point, there's a moment, and you can debate when it happened, where people said, "You know what? I'm just gonna keep the old phone 'cause it's good enough, and I just don't see the difference." And I think that there's gonna be a moment like that. Like when I use Fable 5, the problem is that it's nerfed on a bunch of things that I would normally research. You know, I was with somebody this weekend, and he was telling me about some health thing, and I put it into Fable, and it's like, "It won't answer you." And I'm like, "Okay." So I think that everybody will get to a point, they'll get to it at different times, where they just say, "You know what? Like it shouldn't really matter what model I'm using if I get an answer that I think is reasonable, and I can kind of go about my day." Separately, I think when the corporate CFO gets involved, it'll be an entirely different conversation altogether. I think that what I can tell you after this UN commission that I joined with Benioff and Jensen and Brad Smith, there is not a single country in the world that is not trying to figure out its own sovereign AI strategy, and I don't think they believe using a closed-source American model is the answer. And so, you know, we t- I think we have to keep in mind there's trends. One is just geographic penetration of humans, and there are still many, many, many more people that don't use it than do, which is an upside and an opportunity for everybody.
- JCJason Calacanis
Mm-hmm.
- CPChamath Palihapitiya
And then the second is there is going to be the experimentation, as you said, that needs to transition to ongoing repeatable usage. And then the third is that all of that then needs to plug into the existing regulatory infrastructure that we use as societies to run the world. And I think when you put all of these things together, it's not clear to me who wins, except that you're going to have a lot of diversity of choice. Certain countries-
- BGBrad Gerstner
Yeah
- CPChamath Palihapitiya
... I can tell you after this week, have no desire to subjugate themselves to any technical risk, and so they're willing to spend the money to have their own. Now, we can argue and debate whether that country has any chance.
- BGBrad Gerstner
Right.
- CPChamath Palihapitiya
But they would rather take an open source model like NVIDIA's actually, and stand up their own stack soup to nuts for their own people and their own companies inside of their own country. And if the models are 99% as good or 95% as good, there's going to be a claim that some countries make, which is it's just good enough.
- BGBrad Gerstner
That's the question. That's the question.
- CPChamath Palihapitiya
And then separately, there are companies who will not have the earnings growth to justify this without going on some long protracted carve-out of cost. And most companies, you know this, they just don't do it. They don't have the nerve to do it. They're not capable of it. You know, you wrote that famous essay to Zuck. He was pressured into finally doing it. Absent a very few companies, most people just allow the problems to compound. So I just don't see a world where when you get clobbered over the head, you don't look at other ways of just displacing costs. And if it's like Coke/Pepsi kind of a thing, and Pepsi is one one-thousandth the cost of Coke, I don't know, I just think it's a, it's a risk that I think has to be managed in the perception of the market participants and the underwriters.
- JCJason Calacanis
To add to that, uh, Brad, just open source is very hard to implement when compared to just firing up Claude and having Claude already approved in your organization. The number of steps it took me in order to, and I, I'm pretty familiar with technology, it took me hours to configure my new setup to get onto the Spin Tensor network, to get Open Router going. And to your point, Chamath, it does dynamically route now. So I'm dynamically routing and I'm, you know, GLM 5.2, and then if I fall back to Claude, but which Claude am I gonna fall back to? And here's another piece of evidence to your point, Chamath. There are some organizations that just aren't capable of this. They don't have the, the team that, you know, does this naturally. We just talked about the CTO of Uber. Now let's talk about another CTO. Andy Fang is the CTO of DoorDash. Shout out to Stanley. And so he, as you can see here in this, uh, tweet, I, I, a lot of people listening to All In over the last couple weeks are coming out and, as I said, explaining what they're doing to address this exact issue. He says, "Hey, with our internal coding benchmarks, we're able to confidently intro- introduce open-weight models into our AI code review without degrading code quality, have the frontier model Fable from Anthropic to do the hardest work, delegate lower level work to Kimi 2.6," and they are now releasing their benchmarks. So another group releasing their benchmarks and saying, "Hey, we know this is an issue." The CTO has been charged, to your point, Chamath again. CFO says, "Hey, make sure this is [chuckles] profitable. We get the ROI." They put that on the CTO. Here's another CTO from another leading tech organization that knows how to implement this. Yeah.
- CPChamath Palihapitiya
The really interesting thing we have to forecast right now is what happens in an earnings miss. And I think what happens in a, in a moment where, for whatever reason, maybe there's just an externality, but there are a series of earnings misses.
- JCJason Calacanis
Hmm.
- CPChamath Palihapitiya
Where are people gonna look? And I just think that people find it very difficult to lay off other people. I think it's much, much easier to cut other costs, and I think that the more successful these companies get in a very quick amount of time without really proving the ROI, I just think the bigger the risk is. It's complicated. The game on the field when you're working with these enterprises and just trying to explain it to them is th- I think that they're, they're getting smarter quickly, is what I would say.
- BGBrad Gerstner
I would just say I, I, I think that Chamath's absolutely right about the sovereign, uh, stacks that are gonna get built around the world. This is not either/or. We are going to have open source, and we are going to have frontier intelligence. Um, the preponderance of the tokens today are already shifting toward cheaper, lower, uh, uh, uh, lagging models out of OpenAI or lagging models out of Anthropic or, or the other frontier labs that are out there. Obviously, we, you know, we talk about those two. SpaceX has released an incredible model, you know, in the last two days. Meta's out with, you know, a, a, a terrific model today. So Gemini is still in the hunt. So there are lots of choice.
- CPChamath Palihapitiya
The Meta thing was really intense because I thought, okay, you know, we talked about the game theory, which was Mark should scorch the earth with open source. I think they flubbed that play.
- JCJason Calacanis
Yeah.
- CPChamath Palihapitiya
But then I think he has now said he's gonna create a price war. And so if you look at the tweet or the quote, there was a post, Jason, I don't know, Nick, if you can find it-
- JCJason Calacanis
I got it
- CPChamath Palihapitiya
... announcing it. He was basically like, "Hey, guys, I'm gonna give you the same quality at like one one-hundredth of the cost." Now, again-
- JCJason Calacanis
Yeah
- CPChamath Palihapitiya
... there's a lot between here and there. There's a lot of enterprise distribution that's required and, you know, this, there's been a couple of misfires before. But I thought it was interesting that the vector of challenge was on cost.
- JCJason Calacanis
Yeah. Here's the Mark Zuckerberg tw- tweet. Just so I cued it up for you there, Brad, and he's @finkd. That was his old handle back when he was in college, F-I-N-K-D, and he's done more tweets today over this Mu Spark announcement than he's done in his history. So he's getting into the x.com conversation. Quote, "Today we're releasing Mu Spark 1.1, a strong agentic encoding model at a very low price. It's available through our new Meta model API and in Meta AI." So he's coming out saying, "Hey, we got the strongest agentic tool here. Please come use it." He also wants to have his own, uh, essentially... You know, he, he wants to jump into not the hosting space, but he wants to provide tokens as well.
- BGBrad Gerstner
So again, I think we're gonna have a tremendous amount of selection. The competition is great for America. But I think if you look at the things people are doing, let me give you an example. The premium workload. Jason, you talked about summarizing a document. May take 20,000 cheap tokens to do. Of course, shoot that to a lagging model or an open source model. But if you're talking about replacing a software engineer for two hours, that may take 2 million expensive tokens, and the consequence of using something that's 95% as good is really high, right? Because you have a long-running task, and if the task breaks early or it breaks in the middle or it breaks at the end, there's a huge cost to that. So if it-
- JCJason Calacanis
You still burn the tokens, right? You, and back-
- BGBrad Gerstner
Correct
- JCJason Calacanis
... to this analogy, I was using, you're pulling the slot machine and you lose.
- BGBrad Gerstner
And the time and, and the time and the compute. So if an AI agent is replacing a $200 an hour consultant, right? Take that as an example. So three consulting firms, they're competing, they need the smartest consultant. It... They're charging 200 bucks an hour. The difference between spending 3 bucks on a cheap model or 15 bucks on an expensive model to replace a $200 an hour consultant, it's just irrelevance. That inference cost difference is irrelevance if you're getting something that's bulletproof for 15 bucks. And so I think that's what we're seeing play out. The best evidence for all of this is just revenue growth.
- JCJason Calacanis
Hmm.
- BGBrad Gerstner
Right? We can sit here and speculate all day long as to what this company-
- 54:29 – 1:03:09
CCP considering putting export controls on Chinese models, is open source ending in China?
- JCJason Calacanis
here. The CCP said that they might, or there's a report out according to Reuters. Reuters generally does a good job of this. They dropped a couple of anonymously sourced reports about AI in China, and these were published about 15 minutes apart. The big scoop, that CCP officials, Chinese Communist Party, are reportedly considering restricting overseas access to China's top models. So two Chinese regulators met with Alibaba, ByteDance, and Z.AI. They're the ones who are doing GLM 5.2 that we keep referencing. They're discussing limiting access to the top open and closed models outside of China. Why are they doing this? Well, they're, they're making, uh, any theft or leaks of AI research a national security offense. And they want to control who can fund Chinese AI, AI labs, and we saw this with Manus, which was a Chinese company, tried to go to Singapore. The CCP pulled those employees from Singapore back to China, and so here is their main concern. The quote is that they're concerned about Mythos. "Chinese authorities are deeply worried about the potential for Mythos to exploit software vulnerabilities and that Washington might deploy a model against Chinese interests." Sachs, last week I proposed the reverse to you in your previous position as czar of AI. Do you think the United States should be banning those models? Now we have the opposite, China saying potentially, according to these reports allegedly, that they might restrict them. So explain the game on the field here. If you're gonna look into what China's thinking, why would they want us to not have those open source models and, and how is this chessboard developing?
- DSDavid Sacks
Well, last week I explained why it would be harmful to the US to ban open models. So if you're China and you wanna harm the US, maybe you would want to. I mean, it does kind of make sense because our, our companies are benefiting a lot from all this R&D that they're doing. Now, at the end of the day, I think the story is probably a little bit overstated. I think there are a few Chinese models that were open source that have gone closed source, but I don't think they're all... I'd be surprised, let's put it that way, if-
- JCJason Calacanis
Hmm
- DSDavid Sacks
... they all went closed. So for example, the number one model in China, as I understand it, is ByteDance's model, which is already closed. That's kinda like their ChatGPT equivalent, and it's always been closed. Then you've got Alibaba's Qwen, which was open and now I think is going closed, and Zhipu, which has GLM 5.2, which we've talked about a couple weeks ago because it seemed to be catching up to what was then commercially available as the American frontier at certain tasks. They, I think, are going closed too after having been open. And so this is, I think the tactic is you stay open until you catch the frontier or you get close to it, and then there's a really compelling incentive to go closed because you want to capture all the value for yourself moving forward.
- JCJason Calacanis
Which by the way, is exactly what Sam Altman did famously at OpenAI. Not only did they go from a nonprofit to a for-profit, they went from open models to closed models. So it's exactly paralleling what Sam realized three years ago. Yeah.
- DSDavid Sacks
I mean, in a way that was what I think Meta's original strategy was, was that Llama was gonna be open, but then they actually, they've sort of backed away from open a little bit.
- JCJason Calacanis
Hmm.
- DSDavid Sacks
But it's just kind of an obvious strategy, right? Is, is that-
- JCJason Calacanis
Sure
- DSDavid Sacks
... if you wanna catch up, you go open because by the way, you're not gonna make any meaningful revenue on, on closed anyway because you're not close enough to the frontier, so why would anyone buy your product? But if you go open, you get the developer community on your side, so-
- JCJason Calacanis
And you get utilization. More people use it, which in AI gives you reinforcement learning. Yeah, Sachs.
- BGBrad Gerstner
Well, having, having spent some time in DC this week, I, and, and, and talking with both the White House and Treasury, et cetera, on this topic, what I can tell you is while there may be some, you know, debates about regulation of US models, the one thing there's absolute agreement on is doing everything to stay ahead of China. And you know, and, and the president, all the way up to the president, very interested. How far are we ahead of China? What are the things we need to do to stay ahead of China? It is a unifying force in Washington, and the idea that we were going to kind of take our frontier labs off the field, off the playing field while letting Chinese open source models run free, you know, and on top of that, distilling our models, I will tell you, GL- GLM 5.2 has watermarks from Mythos all over it, right? So we know they were distilling, et cetera, and I think the US government's gonna take steps against distillation, which they should do. So I think that, you know, China doing this in, in some ways, I don't think it hurts the United States. The United States can spin up open source models. We've got Reflection spinning one up. Obviously, we've got the good work going on at NVIDIA with their open source models. The labs, I've talked to a couple of the frontier labs about open source models. I said, "Why aren't you guys making open source models?" They're like, "There's not a lot of demand for it. If there was a lot of demand for it, we would make it." And so I think the US is in a good position. I think this is probably more chess playing by China than actual threats because it would hurt them a lot more than it would, uh, hurt us.
- JCJason Calacanis
Yeah, and then to just back up your point, Sachs, about when you're behind, go open, and then once you catch up, start tightening things up. That's exactly what they did with Android, right? Google released Android. At a certain point, they were like, "In order to use Android and the license, you have to include Google Search, you gotta use Google Drive, you gotta use Chrome," and they started tightening it up, so it's not really an open source project at this point.
- DSDavid Sacks
Just by the way, I think the absolute best thing that could happen for America in terms of winning the AI race against China is if China somehow sprouted their own doomer community.
- BGBrad Gerstner
[laughs]
- JCJason Calacanis
Yes.
- DSDavid Sacks
We need, uh, like a Chinese-
- JCJason Calacanis
Dario?
- DSDavid Sacks
... Yud over there.
- JCJason Calacanis
Yeah. We gotta get their PDoom up. We gotta get their PDoom up.
- DSDavid Sacks
Yeah, exactly.
- BGBrad Gerstner
Yeah. [laughs]
- DSDavid Sacks
We need a lot more people over there freaking out about, you know, job loss or RSI or whatever.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
That'd be the best thing that could ever happen to us is if they start cracking down on their labs in the same way that the doomers wanna do over here.
- JCJason Calacanis
Yeah.
- DSDavid Sacks
Brad, let me just say just one comment. I mean, look-
- BGBrad Gerstner
Yeah
- DSDavid Sacks
... I, I agree with you that from the president on down, everyone wants to win the AI race, and in fact, that was, you know, in the big AI policy speech the president gave about one year ago, that was the whole thrust of the speech, was declaring that we were in an AI race and America had to win it. I think the big risk is more that, and this would not be at, like, the top level. You know, I think if the president could make every single decision, it'd be perfect. The issue is at a lower level in the bureaucracy. Do people somehow do things that are counterproductive? Maybe they think it's gonna help us in the r- race against China, but they end up doing something that's ham-fisted. They just, like, ban something- Or without, you know, really truly understanding all the implications of it. So I think there's no question that the administration wants to win the AI race. The president definitely does, and at the top levels, they will all make smart decisions. The question is whether at lower levels of the bureaucracy you can get mistakes being made. And then you have the influence of Congress and whatever they wanna do. Those guys, they're more responsive, I think, in a way to, like, the doomer community that's creating a lot of political pressure right now.
- JCJason Calacanis
Well, and the throttle, you know, paradoxically to all of this might not be the software [laughs] , might not be the chips, it might be energy. Yeah, Chamath? I mean, when you look at your data center projects and the other ones that are going out there, if we need more tokens, if people need more inference, we have a gating factor in the United States, which is, which is energy.
- 1:03:09 – 1:42:01
Trump Accounts launch, getting young Americans bought back into capitalism
- JCJason Calacanis
All right, let's talk about your time in DC. Brad Gerstner went to DC, everybody.
- CPChamath Palihapitiya
[laughs]
- JCJason Calacanis
And, uh, huge, huge congrats, Brad. You've been, uh, harping on about this, um, you know, uh, accounts now called Trump Accounts, the Invest America accounts, and, um, tell us what happened in DC this week 'cause I think you finally have the number one app in the world. Trump Accounts is the number one app in the world. Congratulations, and a bunch of announcements. So what, what, what's the contours of the announcement, and, uh, maybe you could take us behind the scenes. There it is, Trump Accounts, the official app, number one in top downloads. Your kids can invest in the future.
- BGBrad Gerstner
You know, this has been, you know, a four-year mission in the making. Thanks to you guys. You were early supporters, backers. We talked about it on here. And, you know, founders are crazy, and you guys probably looked at what I was working on and, and, and thought, "You're nuts. You're wasting your time on this." And so, you know, when it got signed into law last year, that's a huge moment in a founder journey, that it's like getting your first round of funding, maybe. Like, okay, we actually... this thing is going to happen. But on July 4th of this year, the app went live, right? So that means millions of accounts got created. The accounts got funded. And to celebrate that and to really kind of take the next step forward, you know, we designed a joint bell ringing, first in history, between the NYSE and NASDAQ from the Oval Office that was incredible. We had 100 CEOs there, kids there, families that were impacted. And the president really, you know, kind of laid out that this is much bigger than just a program to give a few people some accounts. This is really about making every child a capitalist. In fact, the president suggested that we're going to auto-create, uh, accounts for all 50 million kids, or upwards of 70 million kids under the age of 18. So he called on us to get the accounts open faster for more people to have more impact to make sure no child is left behind.
- CPChamath Palihapitiya
Brad, just sl- slow down 'cause a lot of people don't even know what a Trump Account is. Just explain the, what it is, and then you should-
- BGBrad Gerstner
Sure
- CPChamath Palihapitiya
... contrast it to, like, a 529 account and some of these other things.
- BGBrad Gerstner
Great. So as you guys know, the idea was very simple: $1,000 for every child at birth that could compound for their life in a privately owned investment account. So you're born, you get a Social Security number, and you get an investment account. And if you do that and you start with $1,000 and somebody matches that and you save 10 bucks a week, that's $50,000 at age 18. And the idea was-
- CPChamath Palihapitiya
And sorry, and, and that's invested in the S&P 500?
- BGBrad Gerstner
S&P 500. So when these accounts are created, all that money goes into the S&P 500. There's no cost. It's a free account for the lifetime of the recipient. And that was packaged into the Invest America Act, which was passed into law a year ago as part of the reconciliation bill. So that's what actually occurred on July 4th of this year. All those accounts were created for all of these kids. That's the reason the Trump Account app is number one in the App Store, because parents started hearing about this and saying, "Whoa, I need to go download and get this set up for my child." We had over a million and a half accounts created in the first 24 hours after the launch of this. We had over a billion dollars of deposits. So I was contributing money into the accounts of my nieces, my nephews, my kids, friends' kids. Every account ha- app has a QR code, Jason, so somebody can just send you the QR code for your kid. You double... You Apple Pay on your phone, double-click, and you send them 25 or 50 bucks. So that is kind of the, the most essential part of it. But we also had a bunch of announcements around philanthropists-
- JCJason Calacanis
And, and just to be clear, you can get access to that when you're 18, 19, 20 years old and start putting it towards school, or you can roll it into your-
- BGBrad Gerstner
IRA
- JCJason Calacanis
... Roth IRA, I guess your, your, your, your retirement account. Obviously, Michael and Susan Dell ... were the, were the anchors here. It's over $6 billion, $250 for each of 25 million children, primarily lower and middle income kids. SpaceX's president, Gwynne Shotwell, she joined the party, put 350 million in her SpaceX shares, uh, and for children of lower income communities. So with this, there's a device or some way to do it so you can target specific communities by geo, uh, or by, I guess, their net worth, um, somehow.
- BGBrad Gerstner
No, it's just, it's just zip code and age. Zip code and age.
- JCJason Calacanis
Zip code and age. Okay. And then Micron put in 250 million up to 1,000 per employee.
- BGBrad Gerstner
[coughs]
- JCJason Calacanis
And so that seems to be a really interesting way to do this. Like, you can do an employee... I'm sorry, an employer contribution.
- CPChamath Palihapitiya
Well, Brad, and Brad, Brad did it for all kids in Indiana, I think, right?
- BGBrad Gerstner
Correct. All kids under five in Indiana.
- JCJason Calacanis
And Brad, this is a big number here. I, I, this is a big announcement. Brad, the guy who complains when we make him buy in for 10K after 10:00 PM-
- BGBrad Gerstner
[laughs]
- JCJason Calacanis
... at the poker game, and who, like, rage quits the game when he loses $6,000.
- CPChamath Palihapitiya
[laughs]
- JCJason Calacanis
Somehow Brad dropped $100 million. I mean, oh my God, let's get a round of applause [claps] and a golf clap. Brad, this is a... I mean, I, I've never heard of you doing any philanthropy. Like, sometimes you show up with a bottle of wine to the game, but this is a big number. This is a big decision for you, huh?
- BGBrad Gerstner
Well, I think this will become the largest direct philanthropic platform in the history of the country. We told the president we think we can raise $100 billion in the first 12 months. And so the scale of the philanthropy, the nature of the philanthropy, directly to America's kids without a charitable middleman that's directing who gets what and, and how it's distributed. So you think about the people who now are, you know, worth 10 billion or 100 billion, how do they give that money away at scale effectively? Now we have a platform they can do that with. It goes directly into the accounts. The money can't be taken out until the kids are 18. It compounds for-
- CPChamath Palihapitiya
Brad, there was a, there was a bunch of noise about how some people won't do it because it's called Trump Accounts, and that some people said, you know, this is gonna create this weird class divide by people who had TDS and refuse to give their kids... Because I think your website or something said something like 13 million bucks by the time they're 50. And you know, I tweeted something to the effect of, that is an irresponsible amount of money to not give a kid because you don't like the fact that it's called a Trump Account. It's, it's-
- JCJason Calacanis
Yeah, I mean, if you-
- CPChamath Palihapitiya
... it's patently insane
- JCJason Calacanis
If you go on Blue Sky, which is, like, the open source, uh, lib TDS, um, social network, people [laughs] are like, "Who just put one?" You know, "Y'all trust those Trump Accounts? I sure as hell don't."
- CPChamath Palihapitiya
So speak to that.
Episode duration: 1:42:04
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Transcript of episode PHL1j2ti420
