New SEC Chair, Bitcoin, xAI Supercomputer, UnitedHealth CEO murder, with Gavin Baker & Joe Lonsdale

1. 0:00 – 2:53

   Bestie announcement!

   1. JCJason Calacanis0:00

      Hey, everybody. Hey, everybody. Before we drop this week's amazing episode, just some quick information for you. Sacks and Chamath both had the week off, so we had two amazing friends of the pod on, Gavin Baker from Atreides and Joe Lonsdale from 8 VC. What a treat to have them on the program, but there is some big news, huh, Friedberg?

   2. DFDavid Friedberg0:19

      Yeah. Well, the news dropped after we recorded, so it's not gonna be referenced and the show might feel a little stale.

   3. JCJason Calacanis0:26

      (laughs)

   4. DFDavid Friedberg0:26

      But-

   5. JCJason Calacanis0:27

      Here we go.

   6. DFDavid Friedberg0:27

      ... our friend, David Sacks, is the White House AI and Crypto Czar of the United States of America. Congratulations to our boy.

   7. JCJason Calacanis0:36

      Amazing.

   8. DFDavid Friedberg0:36

      Super thrilled. That is a big reason why he wasn't able to join us for the show. He was in the middle of getting this news ramped up.

   9. JCJason Calacanis0:42

      Yes.

   10. DFDavid Friedberg0:42

       It came out. We had already recorded.

   11. JCJason Calacanis0:44

       Yeah, take that into account as we go into the show. Yes. And, uh-

   12. DFDavid Friedberg0:47

       Yeah.

   13. JCJason Calacanis0:47

       ... according to Trump's Truth Social post, Sacks will, quote, "Guide policy for the administration in artificial intelligence and cryptocurrency." He will also lead the Presidential Council of Advisors for Science and Technology. Uh, how great is that, Friedberg?

   14. DFDavid Friedberg1:02

       Wow, a science corner in the White House? Can't wait. It's gonna be fun.

   15. JCJason Calacanis1:06

       Oh, it's gonna be amazing.

   16. DFDavid Friedberg1:07

       Pretty exciting.

   17. JCJason Calacanis1:07

       And, uh-

   18. DFDavid Friedberg1:07

       Pretty awesome.

   19. JCJason Calacanis1:08

       ... I have no announcements. Uh, the rumors about me becoming press secretary are obviously premature-

   20. DFDavid Friedberg1:12

       (laughs)

   21. JCJason Calacanis1:12

       ... but if asked to serve, I will serve my country. Okay, let's get to it. Don't worry, besties, All-In isn't going anywhere. We'll be here every week for you, except maybe Thanksgiving, uh, or a holiday now and again. All right, let's start the show, huh, Friedberg? Great episode.

   22. DFDavid Friedberg1:27

       Let's go.

   23. JCJason Calacanis1:28

       All right, everybody. Welcome to the All-In Podcast.

   24. DFDavid Friedberg1:31

       (laughs)

   25. JCJason Calacanis1:31

       I am your host, Jason Calacanis. How are you doing, Friedberg?

   26. DFDavid Friedberg1:35

       I'm hanging in there. I'm waiting for the tsunami to hit. It's gonna... We're about 40 minutes away. I'm a little anxious right now.

   27. JCJason Calacanis1:42

       More anxious than normal is what you're saying? Like, on a scale of one to Friedberg, this is, like, as anxious as you get with the tsunami?

   28. DFDavid Friedberg1:51

       I don't know what's gonna happen. This current warning shows a five-foot water rise.

   29. JCJason Calacanis1:56

       Hmm.

   30. DFDavid Friedberg1:56

       Or five meter, I can't tell. God, I really hope we don't publish this episode-
2. 2:53 – 4:14

   Gavin Baker and Joe Lonsdale join the show

   1. JLJoe Lonsdale2:53

      in.

   2. JCJason Calacanis2:53

      With us today, Chamath couldn't make it this week and Sacks-

   3. DFDavid Friedberg2:56

      Chamath had surgery and now he looks like Gavin.

   4. JCJason Calacanis2:59

      Okay, yes.

   5. DFDavid Friedberg3:00

      Yeah.

   6. JCJason Calacanis3:00

      Uh, (laughs) and Sacks is taking a day off. He's, he's, he's got the day off today. I think he's just winning too much. With us, two substitutes-

   7. DFDavid Friedberg3:10

      (laughs)

   8. JCJason Calacanis3:10

      ... to, uh, jump in here for the team. Cackling, you can hear, uh, the cackling Joe Lonsdale. There's Joe Lonsdale. I'll take my Moncler hat off here.

   9. JLJoe Lonsdale3:18

      Hey, J Cal.

   10. JCJason Calacanis3:19

       Uh, how you doing, Joe Lonsdale?

   11. JLJoe Lonsdale3:20

       I, I am also winning, um, I am also winning too much, but I'm happy to be here last minute as a, as a-

   12. JCJason Calacanis3:24

       Hmm.

   13. JLJoe Lonsdale3:24

       ... sub for David, J, J Cal.

   14. JCJason Calacanis3:25

       Joe Lonsdale, if you people don't know is to the right of David Sacks. He is a venture capitalist and he started a couple of companies. You might have heard of them, Palantir. I mean, what are the other greatest hits? Addepar.

   15. JLJoe Lonsdale3:37

       Addepar just crossed $7 trillion. We reported on it this month. It's a real company too. Yeah, the-

   16. JCJason Calacanis3:41

       That's a-

   17. JLJoe Lonsdale3:41

       ... OpenGov sold this year. We have... We saw the start of a bunch.

   18. JCJason Calacanis3:43

       Congrats.

   19. JLJoe Lonsdale3:44

       They're good.

   20. JCJason Calacanis3:45

       Yeah. Um, Joe, uh, gets... He's a... You're a little bit lower profile than all these accomplishments. It's pretty incredible. Co-founded... How many billion dollar companies have you co-founded now?

   21. JLJoe Lonsdale3:55

       I don't know, maybe six or so.

   22. JCJason Calacanis3:57

       Six or so. Uh, also with us, Gavin Baker from Atreides. He is a hedge fund manager. He does private, he does publics. One of the smartest guys I know. Great analyst. Welcome to the program, Gavin. Friend of the pod.

   23. GBGavin Baker4:10

       Thank you, J Cal. Happy to be here. Great to see everybody.

3. 4:14 – 20:07

   State of the Trump Bump: Debt focus, Deregulation, America's lucky position

   1. GBGavin Baker4:14

   2. JCJason Calacanis4:14

      Yeah. We are experiencing a huge Trump bump. The election is over. The cabinet is being assembled and we're seeing DOGE, the Department of Government Efficiency, as well as maybe regulations being pulled down and, and we'll, we'll get to our first topic about our new SEC chair. But just generally speaking, Gavin, as a market participant for a living, what's your take on what we've seen over the, the last three weeks since the election results came in?

   3. GBGavin Baker4:43

      So if they execute on stated plans and they're some of the world's greatest execution machines involved, um, you know, Elon generally does what he says he is going to do.

   4. JCJason Calacanis4:59

      Mm-hmm.

   5. GBGavin Baker4:59

      Um, like I... This is going to be awesome for America, for markets, for the world. And the analogy I keep coming back to is Satya Nadella taking over CEO of Microsoft.

   6. JCJason Calacanis5:13

      Okay.

   7. GBGavin Baker5:13

      Microsoft was a monopoly, incredibly advantaged. It had just been horribly mismanaged for years. All he had to do to start winning was stop doing really, really dumb things.

   8. JCJason Calacanis5:24

      (laughs)

   9. GBGavin Baker5:26

      And that's an incredible place to be. You know, America, like, we're the greatest country. You know, we've got, you know, oceans on two sides, peaceful neighbors, incredible natural resources. You know, completely, you know, can produce our, our, our own food and energy. Like in many ways, most privileged country on earth. But sometimes with great privilege comes great, like, stupidity. And California, to me, would be a leading example of that. Most... In many ways, most privileged state in America, um, and has frittered away with bad policies. And I do think one thing that everyone of all political stripes agrees on-... is there are too many regulations that result in far too many administrators, far too much complexity, and an inability to build things in America.

   10. JCJason Calacanis6:12

       Hmm.

   11. GBGavin Baker6:12

       So, you know, it was used very effectively and ... as it should have been against the Harris administration that they'd app- approved $42 billion for rural broadband, hadn't built anything, had approved $40 billion for EV chargers, whatever it was, hadn't done anything. And it's not that they didn't want to, you know, dig trenches and do broadband, they didn't want to make EV chargers, their own regulations prevented them. So, I just think deregulation and simplifying regulations and, and the tax code is going to lead to an immense amount of growth, which is something that all Americans should be happy about.

   12. JCJason Calacanis6:54

       Joe, you wanna maybe give us your take? I know obviously you're very vocal, you're obviously a conservative, run a think-tank and have strong feelings on all this, but there is consensus, I think, amongst all Americans that we don't like fraud, waste, abuse and those items. Those seem to be consensus building, uh, efficiency and paying low- lower taxes. All of that seems like something almost all Americans, most Americans can get behind. So, I guess, maybe a little bit of your take on what we've seen in the markets and the plan. And then, also, are you gonna be involved in this at all?

   13. JLJoe Lonsdale7:28

       (laughs) Well, listen, Jake, like, I think ... I do agree, I think almost all reasonable Americans can see that our growth is ridiculously constrained. And I think Jeff Bezos was saying, uh, yesterday, like, we need a growth-oriented mindset if we're gonna get out of our debt problems, out of our deficit problems. So, it's nice to see everyone kind of coming on the team and saying, "Yeah, we need to fix these things." I think what people don't understand is, like, just how broken the government bureaucracy, bu- bureaucracies and regulations are. Right? It's not like they're kind of sort of bad, like, it's a- it's almost like they're companies that went bankrupt. Like, think of the worst company you know in Silicon Valley that went bankrupt, like, 30 years ago, and imagine if someone just, like, kept pumping money into that worst company you know over, like, 30 years to keep hiring people.

   14. GBGavin Baker8:09

       (laughs)

   15. JCJason Calacanis8:09

       So, like, Yahoo or AOL, like, some legacy company.

   16. JLJoe Lonsdale8:13

       Y- y- yeah, that was failing and take the worst department there, and then, like, the worst department gets the most money. So it's like-

   17. JCJason Calacanis8:18

       Huh.

   18. JLJoe Lonsdale8:19

       It's, it's, it's, it's like more, I guess you can use the word retarded now, it's more retarded than anything you've seen in a long time.

   19. JCJason Calacanis8:25

       (laughs)

   20. JLJoe Lonsdale8:25

       And, and, and I think one of the important things is America used to have these really hard tests for 100 years. Do you know this? In 1883, we said, "You know what? We shouldn't just hire our friends. If someone's gonna run something in government, let's have these tough tests," kind of like China, China did for thousands of years. And, and, and for 100 years we had really hard tests. If you ... when we went to the moon, when we fought the World Wars, you know, when we did the Manhattan Project, the people making those decisions and hiring people had to pass things that really only, uh, like, 5, 10% of people could pass who took them. And then in the late '70s, we said, "Not only are these tests racist, so we can't test people anymore of any background, uh, we also can't fire people anymore because we're going to give them tons of protections." So for ... and, and so the last 40 years it just got dumber. And then 10 years ago you started doing all the virtue signaling and, and, you know, hiring based on your identity versus based on anything else. So, so it's gotten even worse. And so now it's so broken that yes, we're letting tens of billions of dollars on fire. And so it's ... so there's really two things here. One, you got to take a chainsaw as the Elon, like I said, you got to take a chainsaw and just, like, cut a ton of broken stuff. But then day two is you got to say, "How do we make this not stupid in the future?" And there's things like maybe you bring back tests, maybe you bring accountability.

   21. GBGavin Baker9:31

       Hmm.

   22. JLJoe Lonsdale9:31

       Th- thing I ... The thing I'm most passionate about is, you know, right now there's over a million rules at the federal level. It's stuff that everyone disagrees on. You could be the most left person trying to build, like, solar or wind or whatever, and you're like, "What? I have to do what study over how many years? This makes no sense." So, so we got to, we got to, we've got to take these regulations and not only cut them, but we got to make a data-driven system that forces regulations to defend themselves. And that way, instead of having a cancer that just grows forever out of control, you could actually have a process that, like, naturally trims things, naturally makes things fight for itself and, and that, that way it doesn't get as dumb ever again.

   23. GBGavin Baker10:04

       I would ... Why not just make them automatically sunsetting after five years if they're not renewed?

   24. JLJoe Lonsdale10:08

       E- exactly. But make the process to renew them difficult and data-driven. Exactly. And so they save the fight.

   25. GBGavin Baker10:13

       Oh, yeah, yeah, yeah.

   26. JLJoe Lonsdale10:14

       Yeah. Yeah. Exactly.

   27. JCJason Calacanis10:14

       So just if you fought for an allocation ...

   28. GBGavin Baker10:15

       The process of renewing them-

   29. JCJason Calacanis10:16

       Yeah.

   30. GBGavin Baker10:17

       ... will take so much time that it will slow it down.
4. 20:07 – 40:52

   Trump nominates Paul Atkins as SEC Chair, replacing Gary Gensler: What this means for crypto and other markets

   1. JLJoe Lonsdale20:07

      I agree.

   2. JCJason Calacanis20:08

      Speaking of regulation, Gary Gensler is out, Paul Atkins is in, uh, and Bitcoin (laughs) just cracked 100. This is all obviously related. Atkins was previously SEC commissioner under Bush 2 in the early 2000s. In the '90s, he worked for both Bush 1 and Clinton at the SEC. According to the New York Times, Atkins is admired, uh, among DC legal circ- circles and regulators. He's pro-crypto, and he's been helping draft some best practices for the crypto trading platforms. As you know, Gary Gensler's approach to crypto was there's a rule set, follow the rule set. We're not here to change the rules, we're here to enforce them, good luck. And in some cases, I think maybe he was right with ICOs and a bunch of scams, but he also gave good actors no path to go forward. Anybody have strong feelings on this?

   3. JLJoe Lonsdale20:58

      I love Paul, JCal. I think he's, I think he's gonna, he's a fair guy.

   4. JCJason Calacanis21:02

      You know him.

   5. JLJoe Lonsdale21:02

      Yeah, I've met him a several times at conferences and groups, and he's really smart guy. Cares about the rules, cares about helping innovators. I mean, the thing that really pissed off everyone off with Gary, I mean, I love, you've probably seen, like, I think, I think, uh, I, I think both Coinbase with Brian and the Winklevoss twins that put something out, they won't even hire anyone who worked with Gary on any of this stuff they were doing. And the reason they're that angry at them is they were purposely not defining the rules in certain cases and then going a- after people, uh, after not having defined it in, in order to kind of, like, play a gotcha game. It was very dishonorable. And Paul sees all that and there's no way he's gonna allow that.

   6. JCJason Calacanis21:34

      Gavin, any thoughts here on how this might change regulations in our business? Also, the fund business. Joe is a venture capitalist, HVC, uh, you're in public markets and funds. I ha- I do pre-seed. So yeah, what do you think in terms of funds and regulations there and then crypto and, and, you know, the SEC may be becoming innovative as opposed to punitive and, you know, what's the word for Friedberg. What's the word I'm looking for here? Adversarial?

   7. DFDavid Friedberg22:05

      Well, they are a regulator.

   8. JCJason Calacanis22:06

      They are a regulator-

   9. DFDavid Friedberg22:07

      They're not meant to innovate, but-

   10. JCJason Calacanis22:07

       ... but they don't also seem, they seem to have gone beyond just regulating. They seem to have been-

   11. DFDavid Friedberg22:12

       The SEC?

   12. JCJason Calacanis22:12

       ... aggressively adversarial, yeah.

   13. DFDavid Friedberg22:14

       I mean, they're a regulatory and enforcement agency. That's their job. So I, I don't know, like, you know.

   14. JCJason Calacanis22:20

       I mean, but not giving a path or not even meeting with people. I, I think that was the thing that I felt was kind of weird, like why wouldn't you meet with them?

   15. JLJoe Lonsdale22:25

       Well, they maybe meet with you if you're a big donor to the left, they wouldn't meet with you otherwise. That was part of it too, that was sketchy.

   16. JCJason Calacanis22:29

       Oh.

   17. JLJoe Lonsdale22:29

       That was why SBF got tons of meetings, but Brian got none, right? I mean, it's nonsense like that.

   18. JCJason Calacanis22:34

       Ah, got it.

   19. GBGavin Baker22:35

       I, I do think cryptocurrencies- ... at some level fundamentally reduce the power of nation states. And that is something that is oft professed by the true believers, but it is true. And so if you, um, are on the left and, you know, you are, um, a devout believer in the power of the state to do good things, I get why you would not like cryptocurrencies. You know, at the same time, we're very early in crypto. I do think I read with interest all of the posts that David Marcus and his peers at Libra made, um, made about what happened to them.

   20. JCJason Calacanis23:13

       Libra was a Facebook project to embrace cryptocurrency at a very intrinsic level onto the sort of identity level of every one of their billions of users.

   21. JLJoe Lonsdale23:24

       Yeah.

   22. GBGavin Baker23:24

       And I think you could argue it would have been really, really good for not just America, but the entire world.

   23. JLJoe Lonsdale23:29

       Yeah.

   24. GBGavin Baker23:29

       Um, you know, there are a lot of immigrants in American, in America who send remissions back to their home countries at extremely high, um-

   25. JCJason Calacanis23:38

       Predatory rates, yes.

   26. JLJoe Lonsdale23:40

       Yeah.

   27. GBGavin Baker23:40

       Yeah, predatory rates. It would have made that free, and that would have been amazing for a lot of really hardworking, um, people all over the world. It would have, you know, Visa and MasterCard, they do charge big fees. I mean, uh, not... Visa and MasterCard do not charge big fees, but the, um, credit card complex in aggregate is a, is a reasonably big fee. I mean, everybody, "Oh, it's just, you know, two, two and a half percent to make it, you know, perfect and safe." Um, I think Facebook had a sound argument that they could have done that cheaper. Uh, that would have been an efficiency gain for America. And it really did bum me out, you know, to read some of the letters...... that they sent, the way they killed Libra, if anyone doesn't know, and maybe we could, you could pull up David Marcus's post, they just, all these politicians sent letters to participants in financial markets saying, "We don't know if they are doing anything wrong, but we think they probably are. And we're gonna look at this very closely, and we want to discourage you from participating."

   28. JCJason Calacanis24:40

       Well, and it, it was-

   29. GBGavin Baker24:41

       And it was really innovative.

   30. JCJason Calacanis24:41

       ... it was worse, it was worse than that. It was like a mafia letter. It was like, "If you are to support this and help with this, we are going to look into everything else you are doing, and we may then find some issues." It was, it was like a mafia threat. "We can't stop you legally, but watch out." Like, it, it was really sketchy. It was Sherrod Brown who, who now is out of office, like, who led this, the senator from Ohio. But it was, it was really bad. It was really bad what they were doing.
5. 40:52 – 49:07

   Thoughts on Michael Saylor's Bitcoin play, state of defense tech, and the US/China AI competition

   1. JLJoe Lonsdale40:52

   2. DFDavid Friedberg40:52

      Let's talk about a very important public market set of transactions. Gavin, I'd like your point of view on Michael Saylor's convertible note issuances-

   3. JCJason Calacanis41:01

      Ooh. (laughs)

   4. DFDavid Friedberg41:01

      ... being used to buy Bitcoin.

   5. JLJoe Lonsdale41:03

      Here we go. (laughs) Going over the top.

   6. GBGavin Baker41:04

      Which, oh...

   7. DFDavid Friedberg41:05

      Which this morning, this morning Bloomberg reported is the hottest trade in hedge funds right now. Nick, if you could pull up the article. And then J Cal, I know you've been an outspoken opinion setter on Michael Saylor's promotion of his securities actions. We'd love your point of view. Gavin, *******.

   8. GBGavin Baker41:23

      At some point this does get too big. For a while when it was smaller, you know, you could support the debt with-

   9. DFDavid Friedberg41:29

      I'm sorry, could you explain it? Can you explain it to everyone, Gavin?

   10. GBGavin Baker41:31

       Yeah. So what he is doing is issuing debt and buying Bitcoin with the premise that Bitcoin is always going to go up. And he, you know, has made eloquent arguments why, why that is the case. No trees grow to the sky and I think the interest expense on his convertible notes is 75 million off the top of my head. And by the way, I am, I could care less about MicroStrategy. Like I'm not close to it. I'm not involved.

   11. JCJason Calacanis42:03

       Yeah.

   12. GBGavin Baker42:03

       I don't know any hedge funds who own it.

   13. JCJason Calacanis42:06

       No horse in the race.

   14. GBGavin Baker42:07

       Yeah, yeah. I, I think a lot of hedge funds are short MicroStrategy, but I have no horse in the race. But the, but his, the underlying business that, you know, pays the interest expense on the debt only does $400 million a year in revenue and it's, you know, high gross margin revenue.But I just, unless debt investors have absolute confidence in Bitcoin as collateral, and I don't think that's where fixed income markets are yet... He, it will get to a point where it is, it is too big for the size of his company. And then yeah, maybe he can over-collateralize it and, you know, have $10 in Bitcoin for every dollar of debt. But then, like the, the magic money creation machine that, you know, I see discussed on X breaks down because that's like, you know, that's, um, that's very, very different than what is being discussed today.

   15. DFDavid Friedberg43:12

       Joe, do you have a point of view? 'Cause I, Joe's gotta run by the way, so Joe, do you wanna close this out with a point of view?

   16. JLJoe Lonsdale43:16

       (laughs) Mostly defense people down here in LA.

   17. DFDavid Friedberg43:18

       Yeah.

   18. JLJoe Lonsdale43:18

       Let's listen, I am very bullish Bitcoin, I love the, all the energy for our society around it. I, I agree with what you said, Dave, that there's like, there needs to be some barriers for the public taking crazy risks. And I think the risks around how he's accessing this is actually very unusual and does scare me a bit. And people need to do their research so they shouldn't just, like, throw money without studying it. It, uh, it does scare me a little bit how blithely people are throwing money at this without knowing the kind of le- leverage he's taking, you know?

   19. DFDavid Friedberg43:43

       Yeah. Joe, anything else you wanna share that you're up to that you're excited about before you head out?

   20. JLJoe Lonsdale43:48

       Uh, well, you know, uh, I, this, this weekend is the annual defense forum at the Reagan Library where I'm on the board.

   21. DFDavid Friedberg43:53

       Oh, right.

   22. JLJoe Lonsdale43:53

       It's the biggest, biggest defense event of the year. Everyone's coming and I, I guess, I guess I'm really excited that America has, like, woken up and assuming we can bring back more advanced manufacturing here, I think there's enough top companies now with Anduril, with Sironic, we're gonna be building thousands of these vessels for the Navy with AI. Uh, with Epirus, we're like turning things off, you know, 10 miles away, whatever, fairly far away with microwave radiation. There's some really cool technology coming that actually is gonna make us be able to deter enemies. So I, if you asked me six, seven years ago, I was panicked. We were, we were gonna, like, get way behind China. I'm feeling really good about it now, I think. And, and I, and I think, I think, you know, just this, the Pete Hegseth pick, uh, you know, is, is actually someone I'm quite bullish on from everything I'm hearing. So I, I think things are going the right direction.

   23. DFDavid Friedberg44:32

       Is there a wholesale upgrade happening in defense in the United States? Are all systems and all strategies being rethought right now, uh, using technology and innovation and kind of a performance-based product mindset, leading, uh, kind of a reinvention of everything? Is that what's gonna happen here in the next four years?

   24. JLJoe Lonsdale44:51

       Yeah, so war- war- warfare's fundamentally totally shifted. We're seeing some of this in Ukraine. There's all sorts of new ways you want to swarm things on the land, swarm things in the water, swarm things in the air. How do they coordinate and how do they work together? How do you manufacture enough of these things and, and how do you use electronic warfare in new ways to, you know, d- that's basically created by this. And so that, it's just a whole new way of doing things. And we are going that direction. The, too much of the money, David, like 95% of the money's still going towards, like, frankly, like, wasteful legacy, like, mostly things we don't need.

   25. DFDavid Friedberg45:18

       Cost plus maintenance and bull (bleep) systems.

   26. JLJoe Lonsdale45:20

       Yeah, tot- the, it's a whole fashion...

   27. DFDavid Friedberg45:21

       Yeah.

   28. JLJoe Lonsdale45:21

       But enough is shifting and there's enough good people fighting, and as long as we keep just l- allowing open competition, allow it to say, "Okay, which is better?" And just let the best things win. As long as we keep doing that, I think it's going the right way. I'm feeling very good about it.

   29. DFDavid Friedberg45:33

       Is the Chinese position shift in their technology strategy and their systems strategy gonna motivate a shift here, do you think?

   30. JLJoe Lonsdale45:41

       It already has.
6. 49:07 – 1:07:56

   xAI's massive GPU cluster, expanding to 1M GPUs, how Grok 3 will test AI scaling laws, and what's next

   1. DFDavid Friedberg49:07

      wanna, do you wanna talk about AI with Gavin and XAI?

   2. JCJason Calacanis49:09

      Yeah, I think that would be, like, a great next place to go would be to talk about the supercomputer being built by friend of the pod, Elon. He's now got the world's largest supercomputer and he's going to 10X it according to reports.

   3. GBGavin Baker49:25

      Yeah. And I would just say this is, I think, a very important moment for AI. You know, for this entire AI trade in the public and private markets. You know, everybody, I'm sure, who watches your podcast is very aware of scaling laws. And we have not had a scaling laws for training, or if you 10X the amount of compute used to train a model, you significantly improve the intelligence, the capability of that model. And often, there are these, um, you know, kind of emergent properties that emerge alongside that, that higher IQ. No one thought it was possible to make more than 25,000, maybe 30,000, Invi- 32,000, pick a number, NVIDIA Hoppers coherent. And what coherent means is in a training cluster, that each GPU, to kind of simplify it, knows what every other GPU is thinking. So, every GPU in that 30,000 cluster knows what the other 29,999 are thinking. And you need a lot of networking to make that happen.

   4. DFDavid Friedberg50:31

      Enabled by InfiniBand, right?

   5. GBGavin Baker50:33

      Uh, InfiniBand, and I, and I think even more importantly, NVLink. Although a lot of E- Ethernet is, um, you know, never bet against the internet. Ne- never bet against Ethernet. Um, like, if you read the Llama 3.1 technical paper, you know, it got a lot of people excited about Skinny Link Ethernet. But, um-

   6. JCJason Calacanis50:52

      Just to-

   7. DFDavid Friedberg50:52

      Sorry.

   8. JCJason Calacanis50:52

      ... slow down for the audience here, Gavin, maybe-

   9. DFDavid Friedberg50:54

      Sorry.

   10. JCJason Calacanis50:54

       ... explain why transporting information between the GPUs is important. And we're talking, we're getting, we're in the weeds here a little bit. Everybody's heard of Ethernet, but some of the other protocols, uh, and ways of moving stuff around, large amounts of data. That's what these H200s, H100s do particularly well. They'll move a couple of terabytes a second from one processor to the next processor.

   11. GBGavin Baker51:17

       Yeah. So, um, you know, picture a server. In the case of a GPU, it looks like maybe three pizza boxes stacked on top of each other and it has eight GPUs together. And those eight GPUs are connected today with something called NVLink. You, broadly, you can think of the speed of communication. On chip is the fastest. Chip to memory, next fastest. You know, um, chip to chip within a server, next fastest. And so you take those units of servers which are connected, the GPUs are connected on the server with a technology called NVSwitch, and you stitch them together with either InfiniBand or Ethernet into a giant cluster, and each GPU has to be connected to every other GPU and know what they're thinking. They need to be coherent. They need to kind of share memory. For the compute to work, the GPUs need to work together for AI. And no one thought it was possible to connect more than 30,000 of these with today's technology. From public reports, Elon, as he so often does, focused deeply on this, thought about it from first principles, how long it should take, the way it should be done, and he came up with a very, very different way of designing a data center, and he was able to make over 100,000 GPUs coherent. No one thought it was possible.

   12. JCJason Calacanis53:01

       Hmm.

   13. GBGavin Baker53:03

       If, uh... I was, I was a last-minute add for this, but I would have said there were all these articles that were being published in the summer-

   14. JCJason Calacanis53:11

       Hmm.

   15. GBGavin Baker53:11

       ... saying that no one believed he was going to be able to do it. It was hype. It was, you know, ridiculousness. And that was coming, the reason the reporters felt comfortable writing those silly stories is because engineers at Meta and Google and other firms were saying, "We can't do it. There's no way he can do it."

   16. JCJason Calacanis53:31

       Hmm.

   17. GBGavin Baker53:33

       He did it. And I think the world really only believed it when, you know, Jensen did that podcast, I think with, uh... Wasn't it with Kirschner?

   18. JCJason Calacanis53:42

       It might have been with Kirschner.

   19. GBGavin Baker53:44

       Yeah, I think it was with Kirschner, and said, um, "What Elon did was superhuman. No one else could have done it." And I actually think you can argue that Elon doing that, in a lot of ways, kind of saved NVIDIA from a tough six-month period when Blackwell was delayed because everyone who was waiting for Blackwell and thought it was impossible to make 100,000 Hoppers coherent rushed out and bought a lot of Hoppers to try and do it themselves.

   20. JCJason Calacanis54:09

       Hmm.

   21. GBGavin Baker54:09

       Now, we will see if someone else is able to do it. It was really, really hard. No one else thought it was possible. And as a result of that, Grock3 is in training now on this giant colossus supercomputer, the biggest in the world, 100,000 GPUs.

   22. JCJason Calacanis54:29

       In Memphis.

   23. GBGavin Baker54:29

       In Memphis.

   24. JCJason Calacanis54:30

       In Memphis.

   25. GBGavin Baker54:30

       In Memphis.

   26. JCJason Calacanis54:30

       At the old Electrolux factory, and they're, they're putting a lot of energy in there, a lot of natural gas, a lot of-

   27. GBGavin Baker54:36

       Yeah, a dingy Electrolux-

   28. JCJason Calacanis54:38

       ... megawatts going in.

   29. GBGavin Baker54:39

       ... factory.

   30. JCJason Calacanis54:39

       Yeah. Yeah.
7. 1:07:56 – 1:15:14

   UnitedHealth CEO murdered, reactions

   1. JCJason Calacanis1:07:56

      All right, I think we should just wrap up on this, uh, Brian Thompson story. The CEO of UnitedHealthcare was shot and killed in, outside a Manhattan hotel on Wednesday morning. UnitedHealthcare is an insurance subsidiary of UnitedHealth Group, and, uh, they employ over 140,000 people, they provide coverage to millions. And this was, uh, I don't know if you've seen them, assuming you guys have seen the video on social media or go by on X, it l- there's been a big debate, was this like a really well-trained killer, like an assassin, like a hired gun? Was it something personal maybe, and this person's a hack and they're not really good at doing a hit like this? And most people are sort of coming somewhere in between. ABC has reported, and this is where this thing has taken like a crazy turn, that the words "deny," "defend," and "depose" were discovered on the bullet casings at the scene, and those are the terms, two of the three are in a book about how health insurers, uh, reject many of the claims every year. They deny it, they defend it, and then they will depose people to harass them, essentially. This is a crazy, crazy story, and it's breaking here. I don't know if anybody has any insights on it, but I thought I would bring it up here to just maybe intelligently speculate about what we've seen.

   2. DFDavid Friedberg1:09:18

      I mean, it seems like the most likely case is someone's loved one died pre- they were denied coverage. And whether this person was hired or they're a victim or related to a victim, I don't know if it matters. I, I think there's... The observation I'll make is a question, which is, should CEOs be personally responsible for corporate actions-

   3. JCJason Calacanis1:09:45

      Hmm.

   4. DFDavid Friedberg1:09:45

      ... generally speaking? So, there's a difference between a CEO committing fraud or being negligent, but if you don't get a good service, or a good quality of service, or the product you expect, even if it is something you depend on for healthcare, for example. Let's say you take a drug, and the drug causes a side effect that causes some permanent damage. Should the CEO be individually held accountable? And if that were the case, would anyone want to be a CEO of a company that sets out to provide services that are critical like this? It's a very, like, I think, challenging question to think about because certainly you could feel like you want to hold someone responsible because a loved one died because that CEO's job was to make more money for their shareholders and therefore deny claims, and therefore the way that they run that business is wrong. I think ultimately we've gotta kind of (laughs) have this distinction between negligence, fraud, and acting on the corporate behalf. There's a, there was a, for a period of time, all of these, um, documentaries and this movement against the idea of the corporation, generally speaking. If you guys remember, this was like a decade ago or 15 years ago.

   5. JCJason Calacanis1:11:04

      Anti-capitalism movements, yeah.

   6. DFDavid Friedberg1:11:06

      It is. Yeah, and it's like this, the corporation shields individuals.

   7. JCJason Calacanis1:11:11

      Mm.

   8. DFDavid Friedberg1:11:11

      And the corporation creates a shield for individuals to do harm, is kind of the argument that's made. And so there's a lot of people in this camp that think that these, all CEOs of companies that let people down or evil should be killed, should be put in jail, whatever the awful kind of contextualization of that is. And I do think, like, it's really important to think about, well, if no one were to be the CEO because they faced that threat, and those companies can't make money as a business, then those services go away entirely. That's kinda the end state of where this goes. There's gonna be these difficult situations. If a CEO does something negligent, fraudulent, wrong, there's a court and there's a system, and there should be kind of laws that protect people. I, I, I don't know, man. I, the whole thing is pretty depressing to think that a guy who's the CEO, he's, uh, you know, from, from what I heard-

   9. JCJason Calacanis1:11:59

      This guy's got a family, yeah, I mean, nobody-

   10. DFDavid Friedberg1:12:00

       He's got a family, he's got a wife, you, you get p- people that have known him said he was like a nice guy and a good guy, and he runs a tough business, it go-

   11. JCJason Calacanis1:12:08

       And to your, uh-

   12. DFDavid Friedberg1:12:08

       You know, insurance is a very tough business.

   13. JCJason Calacanis1:12:09

       Well, and to your point about this seems like it's very personalized with the casings, if that is in fact true, again, this is breaking news so we're speculating here, uh, hopefully informed. This chart has been the one that's been circulating on social media now, this b- has now become, Gavin, like a Rorschach test about how you feel about corporate America healthcare, et cetera, but UnitedHealthcare, at least according to these charts that are s- speculating, deny claims at a rate, at a multiple, 2 or 3 X other people in the industry, and that they are the most hated. Not that any of this obviously (laughs) results in somebody deserving to die. I mean, I can't believe I'm even saying this but Taylor Lorenz was, went viral...... with a series of tweets, not tweets, I think she's on whatever the blue thing is, sky blue, (laughs) BlueSky, where she, uh, wrote some quotes here. "And people wonder why we want these executives dead," Lorenz wrote on BlueSky, a microblogging social media site, alongside an article about how BlueSky, BlueCross Blue Shield no longer cover anesthesia for the following surgeries. Uh, that's in... according to The New York Post. Gavin, your, your thoughts on this insanity and tragedy?

   14. GBGavin Baker1:13:29

       Yeah, well first of all, it's a tragedy, and actually I'm in New York as we record this, and it, it happened one block from where I am. And, I mean, it, it is absolutely, it, it's a human tragedy. Taylor Lorenz was not the only person on social media who reacted that way, which I thought was deeply troubling.

   15. JCJason Calacanis1:13:50

       It was a large group of people who were writing very morbid comments. There was a lot of anger-

   16. GBGavin Baker1:13:55

       Yeah.

   17. JCJason Calacanis1:13:55

       ... around this issue, that I was unaware of.

   18. GBGavin Baker1:13:59

       I was completely unaware of it.

   19. JCJason Calacanis1:14:02

       Well, I think we all probably are very privileged to have great healthcare-

   20. GBGavin Baker1:14:05

       Yeah, we're, we're-

   21. JCJason Calacanis1:14:05

       ... and able to pay our premiums, so we're not affected by this at this stage in our lives. I was very affected by this 30 years ago.

   22. GBGavin Baker1:14:11

       Yeah, we're, we're, we're all very lucky on this podcast.

   23. JCJason Calacanis1:14:14

       Yeah.

   24. GBGavin Baker1:14:16

       And like, I can't imagine how I would feel if, you know, someone I loved had been denied medical care and, and died, and I felt like it was, uh, unnecessary, uh, and you know, due to, you know, some corporation trying to make more money. But I just, I cannot believe... I'm sure I'd be outraged, but I just can't believe... I was deeply disturbed as a person by the number of people online celebrating this. Which is-

   25. JCJason Calacanis1:14:51

       It's really crazy.

   26. GBGavin Baker1:14:52

       Yeah, I thought it was, it, it was awful. And I guess the last thing I would just say about that chart is, I think it is a little misleading. I think that is initial denial.

   27. JCJason Calacanis1:15:02

       Huh.

   28. GBGavin Baker1:15:04

       You know, maybe the, you know, in other words, maybe the company that, you know, only denies 7%, that's a final denial, you know, they-

   29. JCJason Calacanis1:15:10

       Yeah, who knows.

   30. GBGavin Baker1:15:11

       That's a company that-

Episode duration: 1:24:19