OpenAI's $150B conversion, Meta's AR glasses, Blue-collar boom, Risk of nuclear war

1. 0:00 – 6:43

   Bestie intros: In Memoriam

   1. JCJason Calacanis0:00

      All right, everybody. Uh, let's get the show started here.

   2. CPChamath Palihapitiya0:02

      Wait, wait, wait, Jason, why are you wearing a tux? What's going on there?

   3. JCJason Calacanis0:05

      Oh, well, it's time for a very emotional segment we do here on the All-In podcast. (sighs) I just gotta get myself composed for this.

   4. DSDavid Sacks0:14

      Oh. Chamath, are you okay?

   5. JCJason Calacanis0:17

      I'm, I'm gonna be okay, I think.

   6. DSDavid Sacks0:19

      It's just that-

   7. CPChamath Palihapitiya0:19

      It looks like you're fighting back a tear. What's going-

   8. JCJason Calacanis0:21

      Yeah, this is always a tough one. This year, we tragically lost giants in our industry. (music) These individuals bravely honed their craft at OpenAI before departing.

   9. DSDavid Sacks0:33

      (laughs)

   10. JCJason Calacanis0:35

       Ilya Sutskever, he left in... He left us in May.

   11. DSDavid Sacks0:40

       (laughs)

   12. JCJason Calacanis0:41

       Jan Leike also left in May. John Schulman tragically left us in August.

   13. CPChamath Palihapitiya0:50

       Wait, these are all OpenAI employees?

   14. DSDavid Sacks0:52

       (laughs)

   15. JCJason Calacanis0:53

       Yes. Zahed Soff left on Wednesday. Bob McGrew also left on Wednesday.

   16. CPChamath Palihapitiya1:00

       Too short, too short.

   17. JCJason Calacanis1:01

       And Mira Murati also left us tragically on Wednesday.

   18. CPChamath Palihapitiya1:06

       Mira? We lost Mira too?

   19. JCJason Calacanis1:08

       Yeah, and Greg Brockman is on extended leave.

   20. CPChamath Palihapitiya1:12

       Greg? The enforcer? He left too?

   21. JCJason Calacanis1:14

       Thank you for your service. Your memories will live on as training data.

   22. DSDavid Sacks1:21

       (laughs)

   23. JCJason Calacanis1:21

       And may your memories be a vesting. Sorry, guys.

   24. CPChamath Palihapitiya1:42

       Oh my goodness. All those losses. Wow. That is-

   25. JCJason Calacanis1:45

       I know. (laughs) Three in one day.

   26. CPChamath Palihapitiya1:47

       Three in one day. My goodness. I thought OpenAI was nothing without its people.

   27. DSDavid Sacks1:52

       (laughs)

   28. JCJason Calacanis1:54

       I mean, well... I mean, this is a, this is a great... Whoa, we lost somebody.

   29. CPChamath Palihapitiya1:58

       Whoa! What just happened?

   30. JCJason Calacanis1:59

       Well, come back. Wait, oh-
2. 6:43 – 24:46

   OpenAI's $150B valuation: bull and bear cases

   1. JCJason Calacanis6:43

      So-

   2. DFDavid Friedberg6:43

      How is OpenAI worth $150 billion? Can anyone opine?

   3. JCJason Calacanis6:48

      Yeah.

   4. CPChamath Palihapitiya6:48

      Well, why don't we get into the topic?

   5. DFDavid Friedberg6:50

      Should we make the bull case and the bear case?

   6. JCJason Calacanis6:51

      All right. OpenAI, as (laughs) we were just joking in the opening segment, is trying to convert into a for-profit benefit corporation. That's a B corp. It just means... Uh, we'll explain B corp later. Sam Altman is reportedly-

   7. CPChamath Palihapitiya7:05

      I thought they were converting to a C corp, no?

   8. DFDavid Friedberg7:06

      It's the same thing. B corp doesn't really mean anything.

   9. JCJason Calacanis7:08

      Uh, a benefit corporation is a C corporation variant that is not a nonprofit, but the board of directors, Sacks, is required not only to be a fiduciary for all shareholders, but also for the stated mission of the company. That's my understanding of a B corp. Am I right, Friedberg?

   10. DFDavid Friedberg7:27

       External stakeholders, yeah. So like the environment or society or whatever.

   11. JCJason Calacanis7:31

       Mm-hmm.

   12. DFDavid Friedberg7:31

       But it... Uh, from all other kind of legal, tax factors, it's the same as a C corp.

   13. JCJason Calacanis7:37

       And it's a way to, I guess, signal to investors, the market, employees that you care about something more than just profit. So famous, most famous B corp, I think, is Toms. Is that the shoe company, Toms, that's a famous B corp? Somebody will look it up here.

   14. DFDavid Friedberg7:53

       Patagonia.

   15. JCJason Calacanis7:53

       Patagonia, yeah. That falls into that category, so for-profit with a mission. Reuters has cited anonymous sources close to the company that the plan is still being hashed out with lawyers and shareholders and the timeline isn't certain. But what's being discussed is that the, uh, nonprofit will continue to exist (laughs) as a minority shareholder in the new company. How much of a minority shareholder, I guess, is, uh, the devil's in the detail there. Do they own 1% or 49%? The, uh, very much discussed, Friedberg, 100X profit cap for investors will be removed. That means investors like Vinod, friend of the pod, and Reid Hoffman, also a friend of the pod, could see a 100X turn into a 1,000X or more. According to the Bloomberg report, Sam Altman's gonna get his equity, finally, 7%. That would put him at around 10.5 billion, if this is all true, and OpenAI could be valued as high as $150 billion. We'll get into all the shenanigans. But let's start with your question, Friedberg. And since you asked it, I'm gonna boomerang it back to you. Make the bull case for a $150, $150 billion valuation.

   16. DFDavid Friedberg9:06

       The bull case would be that the moat in the business with respect to model performance and infrastructure gets extended with the large amount of capital that they're raising. They aggressively deploy it. They are very strategic and tactical with respect to how they deploy that infrastructure to continue to improve model performance, and as a result, continue to extend their advantage in both consumer and enterprise applications, the API tools and so on that they offer. And so they can maintain, uh, both kind of model and application performance leads that they have today. Across the board, I would say, like the, the o1 model, uh, their voice application... Sora has not been released publicly, but if it does, then it looks like what it's been demoed to be. It's certainly ahead of the pack. So there's a lot of, uh, aspects of, of OpenAI today that kinda makes them a leader. And if they can deploy infrastructure to maintain that lead and not let Google, Microsoft, Amazon, and others catch up, then their ability to use that capital wisely keeps them ahead.

   17. JCJason Calacanis10:10

       Okay.

   18. DFDavid Friedberg10:10

       And ultimately, as we all know, there's a multi-trillion dollar market to capture here, making lots of verticals, lots of applications, lots of products. So they could become a, a true kind of global player here, plus the extension into computing, which I'm excited to talk about later when we get into this computing stuff.

   19. JCJason Calacanis10:26

       Sacks, here's a chart of OpenAI's revenue growth that has been piecemealed together from various sources at various times. But you'll see here, they are reportedly, as of June of 2024, on a $3.4 billion run rate for this year, uh, after hitting two billion in '23, 1.3 billion in October of '23. And then back in 2022, it's reported they only had 28 million in revenue. So there's a pretty, pretty hot, a pretty, a pretty big shrinkage in terms of revenue growth. I would put it at 50 times top line revenue, $150 billion valuation. You wanna give us the bear case, maybe, or the bull case?

   20. CPChamath Palihapitiya11:08

       Well, uh, so the, the whispered numbers I heard was that their revenue run rate for this year was in the four to six billion range, which is a little higher than that. So you're right. If it's really more like 3.4, this valuation is about 50 times current revenue. But if it's more like five billion, then it's only 30 times. And if it's growing 100% year over year, it's only 15 times next year. So depending what the numbers actually are, the $150 billion valuation could be warranted. I don't think 15 times forward ARR is a high valuation for a company that has this kind of strategic opportunity. I think it all comes down to the durability of its comparative advantage here. I think there's no question that OpenAI is the leader of the pack. It has the most advanced AI models. It's got the best developer ecosystem, the best APIs. It keeps, uh, rolling out new products. And the question is just how durable that advantage is. Is there really a moat to any of this? For example, Meta just announced Llama 3.2, which can do voice, and this is roughly at the same time that...OpenAI just released its voice API. So, the open source ecosystem is kinda hot on OpenAI's heels. The large companies of Google, Microsoft, so forth, they're hot on their heels too. Although, it seems like they're further behind where Meta is. And the question is just, can OpenAI maintain its lead? Can it consolidate its lead? Can it develop some moats? If so, it's on track to be the next trillion-dollar big tech company. But if not, it could be eroded and you could see the value of OpenAI get, get commoditized, and we'll look back on it as kind of a cautionary tale.

   21. JCJason Calacanis12:56

       Okay, Chamath, do us a favor here. If there is a bear case, what is it?

   22. DSDavid Sacks13:00

       Okay, let's steel man the bear case.

   23. JCJason Calacanis13:02

       Yes, that's what I'm asking, please.

   24. DSDavid Sacks13:05

       So, one would just be on the fundamental technology itself, and I think the version of that story would go that the underlying frameworks that people are using to make these models great is well-described and available in open source. On top of that, there are at least two viable open source models that are as good or better at any point in time than OpenAI. So, what that would mean is that the value of those models, the economic value basically goes to zero, and it's a consumer surplus for the people that use it. So, that's very hard, theoretically, to monetize. I think the second part of the bear case would be that specifically Meta becomes much more aggressive in inserting Meta AI into all of the critical apps that they control because those apps really are the front door to billions of people on a daily basis. So, that would mean WhatsApp, Instagram, Messenger, the Facebook app, and Threads gets refactored in a way where instead of leaving that application to go to a ChatGPT-like app, you would just stay in the app. And then the companion to that would be that Google also does the same thing with their version in front of search.

   25. JCJason Calacanis14:42

       Yeah.

   26. DSDavid Sacks14:42

       So, those two big front doors to the internet become much more aggressive in giving you a reason to not have to go to ChatGPT because, A, their answers are just as good, and B, they're right there in a few less clicks for you.

   27. JCJason Calacanis14:56

       Yeah, I'm gonna-

   28. DSDavid Sacks14:57

       So, that would be the- that would be the second piece. The third piece is that all of these models basically run out of viable data to differentiate themselves, and it basically becomes a race around synthetic information and synthetic data, which is a cost problem. Meaning, if you're going to invent synthetic data, you're gonna have to spend money to do it. And the large companies, Facebook, Microsoft, Amazon, Google, Apple have effectively infinite money compared to any startup.

   29. JCJason Calacanis15:29

       Hmm.

   30. DSDavid Sacks15:30

       And then the fourth, which is the most quizzical one, is what does the human capital thing tell you about what's going on? It reads a little bit like a telenovela. I have not, in my time in Silicon Valley, ever seen a company that's supposedly on such a straight line to a rocket ship have so much high-level churn. And I've- but- and I've also never seen a company have this much liquidity. And so, how are people deciding to leave if they think it's gonna be a trillion-dollar company? And why, when things are just starting to cook, would you leave if you are technically enamored with what you're building? So, if you had to construct the bear case, I think those would be the four things.
3. 24:46 – 40:41

   Will AI hurt or help SaaS incumbents?

   1. JCJason Calacanis24:46

      it for the rest of the month." Chamath, your thoughts on this.

   2. DSDavid Sacks24:48

      We're seeing it in real time in 8090. What I'll tell you is, what Sacx said is totally right. There's so many companies that have very complicated processes that are a combination of well-trained and well-meaning people, and bad software. And what I mean by bad software is that some other third party came in, listened to what your business process was, and then wrote this clunky, deterministic code, usually on top of some system of record, charged you tens or hundreds of millions of dollars for it and then left, and will support it only if you keep paying them millions of dollars a year. That whole thing is so nuts because the ability for people to do work, I think, has been very much constrained and it's constrained by people trying to do the right thing using really, really terrible software. And all of that will go away. The radical idea that I would put out there is, I think that systems of record no longer exist because they don't need to and the reason is because all you have is data, and you have a pipeline of information-

   3. JCJason Calacanis25:59

      Can you level set and just explain to me what system of record is, just so the audience-

   4. DSDavid Sacks26:02

      So inside of a company, you'll have a handful of systems that people would say are the single source of truth. They are the things that are used for reporting, compliance. An example would be for your general ledger. So to-

   5. JCJason Calacanis26:18

      NetSuite.

   6. DSDavid Sacks26:19

      ... record your revenues, you'd use NetSuite or you'd use Oracle GL or you'd use Workday Financials. Then you'd have a different system of record for all of your revenue generating activities, so who are all of the people you sell to, how are sales going, what does the pipeline look like?

   7. JCJason Calacanis26:37

      Salesforce.

   8. DSDavid Sacks26:37

      There's companies like Salesforce or-

   9. JCJason Calacanis26:39

      HubSpot.

   10. DSDavid Sacks26:39

       ... SugarCRM. Then there's a system of record for all the employees that work for you, all the benefits they have, what is their salary-

   11. JCJason Calacanis26:46

       Got it. Okay.

   12. DSDavid Sacks26:46

       This is HRIS. So the point is that the software economy over the last 20 years, and this is trillions of dollars of market cap and hundreds of billions of revenue, have been built on this premise that we will create this system of record, you will build apps on top of the system of record, and the knowledge workers will come in and that's how they will get work done. And I think that Sacx is right. This totally flips that on its head. Instead, what'll happen is people will provision an agent and roughly direct what they want the outcome to be, and they'll be process independent. They won't care how they do it, they just want the answer.

   13. JCJason Calacanis27:27

       Mm-hmm. Great.

   14. DSDavid Sacks27:28

       So I think two things happen. The obvious thing that happens in that world is systems of record lose a grip on the vault that they had in terms of the data that runs a company. You don't necessarily need it wi- in the same reliance and primacy that you did five and 10 years ago. That'll have an impact to the software economy. And the second thing that I think is even more important than that, is that then the atomic size of companies changes because each company will get much more leverage from using software and few people versus lots of people with a few pieces of software. And so that inversion, I think creates tremendous potential for operating leverage.

   15. JCJason Calacanis28:14

       All right. Your thoughts, Sacx? You operate in the SaaS space, uh, with system of records and investing in these type of companies. Give us your take.

   16. CPChamath Palihapitiya28:21

       Well, it's interesting. We were having a version of this conversation last week on the pod, and I started getting texts from Benioff as he was listening to it, and then-

   17. JCJason Calacanis28:31

       Oh.

   18. CPChamath Palihapitiya28:31

       He, he called me and I think he got a little bit triggered by the idea that systems of record like Salesforce are gonna be obsolete in this new AI era, and he made a very compelling case to me about why that wouldn't happen.

   19. JCJason Calacanis28:44

       Which is? Yeah.

   20. CPChamath Palihapitiya28:45

       Well, first of all, I think AI models are predictive. I mean, at the end of the day, they're predicting the next set of texts and, and so forth. And when it comes to, like, your employee list or your customer list, you just wanna have a source of truth. You don't want it to be 98% accurate, you just want it to be 100% accurate. You wanna know if the federal government asks you for the tax ID numbers of your employees, you just wanna be able to give it to them. If Wall Street analysts ask you for your customer list and what the gap revenue is, you just wanna be able to provide that. You don't want AI models figuring it out. So you're still gonna need a system of record. Furthermore, he made the point that you still need databases, you still need enterprise security if you're dealing with enterprises, you still need compliance, you still need sharing models. There's all these aspects, all these things that have been built on top of the database that SaaS companies have been doing for 25 years, and then the final point that I think is compelling is that enterprise customers don't wanna DIY it, right? They don't wanna have to figure out how to put this together. And you can't just hand them an LLM and say, "Here you go." There's a lot of work that is needed in order to make these models productive. And so at a minimum, you're gonna need system integrators-

   21. JCJason Calacanis29:58

       Well-

   22. CPChamath Palihapitiya29:58

       ... and consultants to come in there, connect ... Hold on, just connect all the enterprise data to these models, map the workflows-

   23. DSDavid Sacks30:05

       You have to do that now. How's that different from how this, this clunky software is sold today? I mean, look, I, I don't wanna take away from the quality of the company that Mark has built and what he's done for the cloud economy, so let's just put that aside, but I wish this is what we could have actually all been on stage and talked about.

   24. CPChamath Palihapitiya30:24

       (laughs) I told him that.

   25. DSDavid Sacks30:25

       When he was at the summit.

   26. CPChamath Palihapitiya30:26

       I said that.

   27. DSDavid Sacks30:27

       Because I disagree with basically every premise of those three things. Number one, systems integrators exist today to build apps on top of these things.... why do you think you have companies like Viva? How can a $20 billion plus company get built on top of Salesforce? It's because it doesn't do what it's meant to do. That's why. (laughs) That's why Salesforce-

   28. JCJason Calacanis30:46

       Well, in fairness-

   29. DSDavid Sacks30:47

       ... would have subsumed that opportunity.

   30. JCJason Calacanis30:48

       ... app stores, app stores are a great way to allow people to build on your platform and, and, and cover those niche cases.
4. 40:41 – 49:57

   Implications from OpenAI's for-profit conversion

   1. JCJason Calacanis40:41

   2. CPChamath Palihapitiya40:41

      Speaking of, uh, of investing in late-stage companies, we never closed the loop on the whole OpenAI thing. What did we think of the fact that they're completely changing the structure of this company? They're changing it into a corporation from the nonprofit.

   3. JCJason Calacanis40:55

      Hmm.

   4. CPChamath Palihapitiya40:55

      And Sam's now getting a $10 billion stock package.

   5. JCJason Calacanis41:00

      He's not in it for the money. He has health insurance, Saxs. (laughs)

   6. CPChamath Palihapitiya41:04

      (laughs) But we never ad-

   7. JCJason Calacanis41:04

      Did you see how many 'cause Congress, I don't need money.

   8. CPChamath Palihapitiya41:06

      We never dealt with that question.

   9. JCJason Calacanis41:07

      I've, I've got enough money, I just needed the health insurance. (laughs)

   10. DSDavid Sacks41:09

       Pull the clip up, Nick. Pull the clip up.

   11. JCJason Calacanis41:10

       I mean, it's the funniest clip ever. When (laughs) spits (crosstalk) my coffee out when I saw that one.

   12. DSDavid Sacks41:15

       This is the Rogan clip? This is the Rogan clip? No, this is in Congress. Watch it.

   13. JCJason Calacanis41:17

       This is what he did in Congress.

   14. CPChamath Palihapitiya41:18

       Oh, this is Congress.

   15. DFDavid Friedberg41:19

       You make a lot of money, do you?

   16. JCJason Calacanis41:21

       I make... No. (laughs) Uh, I'm paid enough for health insurance. I have no equity in OpenAI.

   17. DFDavid Friedberg41:24

       Really?

   18. JCJason Calacanis41:25

       Yeah.

   19. DFDavid Friedberg41:25

       That's interesting. You need a lawyer.

   20. JCJason Calacanis41:28

       I need a what?

   21. DFDavid Friedberg41:29

       You need a lawyer or an agent.

   22. JCJason Calacanis41:31

       I, I'm doing this 'cause I love it. (laughs)

   23. DSDavid Sacks41:33

       (laughs)

   24. JCJason Calacanis41:34

       (laughs)

   25. DFDavid Friedberg41:34

       Thank you.

   26. JCJason Calacanis41:35

       He's the greatest. Look at... You don't believe him. And this, "Can I ask you a question there, Sax?"

   27. DSDavid Sacks41:40

       (laughs)

   28. CPChamath Palihapitiya41:40

       (laughs)

   29. JCJason Calacanis41:40

       "Are you doing this venture capital where you put the money in the startups-" "'Cause you like it."

   30. DSDavid Sacks41:47

       (laughs)
5. 49:57 – 1:09:05

   Meta's impressive new AR glasses: is this the killer product for the age of AI?

   1. JCJason Calacanis49:57

      reasons that, you know, OpenAI, when you steel man the barricades, could have challenges. Obviously, we're seeing that, and it is emerging that Meta is working on some AR glasses that are really impressive. Additionally, I've installed iOS 18, which is Apple Intelligence that works on 15 phones and 16 phones. 18 is the iOS. Did any of you install the beta of iOS 18 yet and use Siri? It's pretty clear with this new one that you're gonna be able to talk to Siri as an LLM like you do in ChatGPT mode, which I think means they will not make themself dependent on ChatGPT and they will siphon off half the searches that would have gone to ChatGPT, so I see that as a serious inequity.

   2. DSDavid Sacks50:39

      Siri's not very good, JCal, and you know this because when you were driving me to the airport yesterday...

   3. JCJason Calacanis50:44

      We tested it and it didn't work, yes.

   4. DSDavid Sacks50:45

      You, you tried, you tried, he tried to, he tries to execute this joke where he's like, "Hey Siri, send Chamath Palihapitiya a message," and it was a very off-color message. I'm not gonna say what it is.

   5. JCJason Calacanis50:55

      It was, it was a spicy joke.

   6. DSDavid Sacks50:56

      And then it's like, "Okay, great. Sending Linda..." Blah, blah, blah. (laughs)

   7. JCJason Calacanis51:00

      (laughs)

   8. DSDavid Sacks51:00

      And he's like, "No, stop, stop, stop."

   9. JCJason Calacanis51:00

      I was like, "No, no, don't send that joke to her!"

   10. DSDavid Sacks51:03

       It hallucinates and almost sends it to some other, you know, some woman in his contacts.

   11. JCJason Calacanis51:07

       (laughs) It would have been really damaging.

   12. DSDavid Sacks51:09

       It's not very good, Jason. It's not very good.

   13. JCJason Calacanis51:11

       But, but what I will say is, there are features of it where if you squint a little bit you will see that Siri is gonna be conversational. So when I was talking to it with music and, you know, you, you can have a conversation with it and do math like you can do with the ChatGPT version, and you have Microsoft doing that with their Copilot, and now Meta's doing it at the top of each one. So everybody's gonna try to inter- intercept the queries and the voice interface, so ChatGPT-4 is now up against Meta, Siri, m- Apple and Microsoft for, for that interface, so it's gonna be challenging. But let's talk about these Meta glasses here. Meta showed off the AR glasses that Nick will pull up right now. These aren't goggles. Goggles look like ski goggles. That's what Apple is doing with their Vision Pro. Uh, or when you see the Meta Quest, uh, you know how those work, those are VR, uh, with cameras that will create a version of the world. These are actual chunky sunglasses, uh, like the ones I was wearing earlier when I was doing the bit. So these let you operate in the real world and are supposedly extremely expensive. They made a thousand prototypes. They were letting a bunch of influencers and folks like, um, Gary Vaynerchuk, uh, use them, and they're not ready for primetime. But the way they work, Freiberg, is there's a wristband that will track your fingers and your wrist movements, so you could be in a conversation like we are here on the pod, and below the desk you could be, you know, moving your arm and hand around to be doing replies to, I don't know, incoming messages or whatever it is. What do you think of this AR vision of the world-

   14. DFDavid Friedberg52:50

       Yeah.

   15. JCJason Calacanis52:50

       ... and Meta making this progress?

   16. DFDavid Friedberg52:52

       Well, I think it ties in a lot to the, the AI discussion because I, I think we're really witnessing this big shift from... and this big transition in computing, probably the biggest transition since mobile. You know, we moved from mainframes to desktop computers, everyone had kind of this computer on their desktop but you used a mouse and keyboard to control it, to mobile where you had a keyboard and clicking and touching on the screen to do things on it, and now to what I would call this kind of ambient computing method. And, you know, it, I think the big difference is control and response. In directed computing, you're kind of telling the computer what to do. You're controlling it, you're using your mouse or your keyboard to, to go to this website, so you type in a website address. Then you click on the thing that you wanna click on and you kinda keep doing a series of work to get the computer to go access the information that you ultimately want to achieve your objective. But with ambient computing, you can more kind of cleanly state your objective without this kind of directive process. You can say, "Hey, I, I wanna ha- say, I wanna have dinner in New York next Thursday at the, at a Michelin star restaurant at 5:30. Book me something," and it's done. And I think that there are kind of five core things that are needed for this to work, um, both in control and response. It's voice control, gesture control and eye control are kind of the control pieces that replace, you know, mice and clicking and touching and keyboards, and then response is audio and kind of integrated visual, which is the idea of the goggles. Voice control works. Have you guys used the OpenAI voice control system lately? I mean, it is really incredible. I had my earphones in and I was, like, doing this exercise, I was trying to learn something, so I told OpenAI to start quizzing me on this thing, and I just did a 30-minute walk, and while I was walking it was asking me quiz questions and I would answer it and tell me if I was right or wrong. It was really this incredible dialogue experience. So I think the voice control's there. I don't know if you guys have used Apple Vision Pro, but gesture control is here today. You can do single finger movements with Apple Vision Pro. It triggers actions. And eye control is incredible. You look at the letters you wanna have kind of spelled out or you look at the thing you wanna activate and it does it.So all of the control systems for this ambient computing are there, and then the AI enables this kind of audio response where it speaks to you. And the big breakthrough that's needed that I don't think we're quite there yet, but maybe Zuck is highlighting that we're almost there, and Apple Vision Pro feels like it's almost there, except it's big and bulky and expensive, is integrated visual where the ambient visual interface is always there, and you can kind of engage with it. So there's this big change. I don't think that mobile handsets are gonna be around in 10 years. I don't think we're gonna have this, like, phone in our pocket that we're, like, pressing buttons on and touching and telling it where on the browser to go to. The browser interface is gonna go away. I think so much of how computing is done, how much... how we integrate with data in the world and how the computer ultimately fetches that data and does stuff with it for us is gonna completely change to this ambient model. So I'm, um, I'm pretty excited about this evolution. But I think that what we're seeing with Zuck, what we saw with Apple Vision Pro and all of the OpenAI demos, they all kind of converge on this very incredible shift in computing, um, that will kind of become this ambient system that exists everywhere all the time. And I know folks have kind of mentioned this in the past, but I think we're really seeing it kind of all come together now with these five key things.

   17. JCJason Calacanis56:12

       Chemath, any thoughts on Facebook's progress with AR and how that might impact computing and interfaces when paired with language models?

   18. DSDavid Sacks56:26

       I think David's right that there's something that's going to be totally new and unexpected. So I agree with that part of what Friedberg says. I am still not sure that glasses are the perfect form factor to be ubiquitous. When you look at a phone, a phone makes complete sense for literally everybody, right? Man, woman, old, young, every race, every country of the world. It's such a ubiquitously obvious form factor. But the thing is, like, that initial form factor was so different than what it replaced, even if you looked at, like, flip phones versus that first generation iPhone. So I, I do think, Friedberg, you're right, that there's, like, this new way of interacting that is ready to explode onto the scene, and I think that these guys have done a really good job with these glasses. I mean, like, I give them a lot of credit for sticking with it and iterating through it and getting it to this place. It looks meaningfully better than the Vision Pro, to be totally honest. But I'm still not convinced that we've explored the best of our creativity in terms of the devices that we want to use with these AI models.

   19. DFDavid Friedberg57:49

       You need some visual interface. I think the question is, where is the visual interface?

   20. DSDavid Sacks57:53

       But do you?

   21. DFDavid Friedberg57:53

       Is it in the... Is it in the, in the wall?

   22. DSDavid Sacks57:55

       No, but do you?

   23. DFDavid Friedberg57:55

       Well, I mean if... Well, when you're asking, like, "I wanna watch Chemath on Rogan." Like, I don't just wanna hear, I wanna see. Like, uh, when I wanna visualize stuff, I wanna visualize it. I wanna look at the food I'm buying online.

   24. DSDavid Sacks58:06

       Sure.

   25. DFDavid Friedberg58:06

       I wanna look at pictures of the restaurant I'm gonna go to.

   26. DSDavid Sacks58:08

       No, no, but... But how much of that time when you say those things are you not near some screen that you can just project and broadcast that onto?

   27. DFDavid Friedberg58:16

       Right, so maybe, maybe that's the model is-

   28. DSDavid Sacks58:18

       If the use case is, "I'm walking in the park and I need to watch TV at the same time," I don't think that's a real use case.

   29. JCJason Calacanis58:24

       I, I think you're, on this one, wrong, Chemath, because I saw this revolution in Japan maybe 20 years ago. They got obsessed with augmented reality. There were a ton of startups right as they started getting to the mobile phones, and the use cases were really very compelling, and we're starting to see them now in education. And when you're at dinner with a bunch of friends, how often does picking up your phone and, you know, looking at a message disturb the flow? Well, people will have glasses on. They'll be going for walks. They'll be driving. They'll be at a dinner party. They'll be with their kids, and you'll have something on, like focus mode, you know, whatever the equivalent is in Apple, and a message will come in from your spouse or from your child, but you won't have to take your phone out of your pocket. And I think once these things weigh a lot less, you're gonna have four different ways to interact with your computer, in your pocket, your phone, your watch, your AirPods, whatever you have in your ears, and the glasses. And I bet you glasses are gonna take like a third of the tasks you do. I mean, what is the point of taking out your phone and watching the Uber come to you? But seeing that little strip that tells you the Uber is 20 minutes away, 15 minutes away or what the gate number is, so-

   30. DSDavid Sacks59:31

       I don't have that anxiety.
6. 1:09:05 – 1:20:55

   Blue collar boom: trades are becoming more popular as entry-level tech jobs dry up

   1. JCJason Calacanis1:09:05

      boom, the toolbelt generation is what Gen Z is being referred to as. A report in the Wall Street Journal reports say tech jobs (laughs) have dried up. We all s- we're all seeing that, and according to Indeed, developer jobs down more than 30% since February of 2020, pre-COVID, of course. If you look at layoffs.fyi, you'll see all the, y- you know, tech jobs that have been eliminated since 2022, over a half million of them. Bunch of things at play here and the Wall Street Journal notes that entry-level tech workers are getting hit the hardest, especially all these recent college graduates and if you look at, uh, historical college enrollment, let's pull up that chart, Nick, you can see here undergraduate, graduate and total with the red line, we peaked at 21 million people in either graduate school or undergraduate in 2010 and that's come down to 8.6 million. At the same time, obviously in the last 12 years, you've had, uh, (laughs) the population has grown so this is even, you know, if it was a percentage basis would be even more dramatic. So what's behind this? A poll of a thousand teens this summer found that about half believe a high school degree, trade program or two-year degree best meets their career needs and 56% said real world on-the-job experience is more valuable than obtaining a college degree, something you've talked about with your own personal experience, Chamath, at Waterloo doing apprenticeships essentially. Your thoughts on generation toolbelt.

   2. DSDavid Sacks1:10:33

      Such a positive trend. I mean, there's so many reasons why this is good. I'll, I'll just list a handful that come to the top of my mind. The first and probably the most important is that it breaks this stranglehold that the university education system has on America's kids. We have tricked millions and millions of people into getting trillions of dollars in debt on this idea that you're learning something in university that's somehow going to give you economic stability and ideally freedom, and it ch- has turned out for so many people to not be true. It's just so absurd and unfair that that has happened. So if you can go and get a trade degree and live a economically productive life where you can get married and have kids and take care of your family and do all the things you wanna do, that's gonna put an enormous amount of pressure on higher ed. Why does it charge so much? What does it give in return? That's one thought. The second thought, which is much more narrow, Peter Thiel has that famous saying where if you have to put the word science behind it, it's not really a thing. And what we are going to find out is that that was true for a whole bunch of things where people went to school like political science and-

   3. JCJason Calacanis1:11:55

      Social science, yep.

   4. DSDavid Sacks1:11:56

      ... social science, but I always thought that computer science would be immune, but I think he's gonna be right about that too because you can spend two or three hundred thousand dollars getting in debt to get a computer science degree, but you're probably better off learning JavaScript and learning these tools in some kind of a boot camp for far, far less and graduating in a position to make money right away. So those are just two ideas. I think that it allows us to be a better functioning society, so I am really supportive of this trend.

   5. JCJason Calacanis1:12:28

      Sax, your thoughts on this generation toolbelt we're, we're reading about and, you know, the sort of combination with static team size that we're seeing in technology, companies keeping the number of employees the same or trending down while they grow 30% year over year.

   6. CPChamath Palihapitiya1:12:45

      Oh my God, I'm like so sick of this, this topic of, of job loss or job disruption. You know, I got in so much trouble last week. You asked a question about whether the upper middle class is gonna suffer because they're all gonna be put out of work by AI and I just kinda brushed it off not because I'm advocating for that, but just because I don't think it's gonna happen.

   7. JCJason Calacanis1:13:03

      Hmm.

   8. CPChamath Palihapitiya1:13:04

      This whole thing about job loss is so overdone. There's gonna be a lot of job disruption, but in the case of coders just as an example, I think we can say that coders, depending on who you talk to, are 10, 20, 30% more productive as a result of these coding assistant tools.... but we still need coders. You can't automate 100% of it. And the world needs so many of them. The need for software is unlimited. We can't hire enough of them at Glue. By the way, shout out if you're looking for ... If you're a coder who is afraid of not being able to get a job-

   9. JCJason Calacanis1:13:35

      Yeah. (laughs)

   10. CPChamath Palihapitiya1:13:35

       ... apply for one at Glue. Believe me, we're hiring. I just think that this is so overdone. There is gonna be a lot of disruption in the knowledge worker space. Like, we talked about the workflow at call centers and just service factories. There's gonna be a lot of change. But at the end of the day, I think there's gonna be plenty of work for humans to do. And some of the work will be more in the blue-collar space, and I agree with Chamath that this is a good thing. I think there's been perhaps an overemphasis on the idea that the only way to get ahead in life is to get, uh, like, a fancy degree from one of these universities. And we've seen that many universities, they're just not that great. They're overpriced. You end up graduating with a mountain of debt, and you get a degree that i- you know, maybe even far worse than computer science that's just completely worthless. So, if people learn more vocational skills, if they skip college 'cause they're ... have a proclivity to do something that doesn't need that degree, I think that's a good thing, and that's healthy for the economy.

   11. JCJason Calacanis1:14:36

       Friedberg, is this like, uh, just the pendulum swung too much and education got too expensive, spending 200K to make $50,000 a year? Distinctly different than our childhoods, or, I'm sorry, our adolescence when we were able to go to college for 10K a year, 20K a year, graduate with, you know, some low tens of thousands in debt if you did take debt, and then your entry level job was 50, 60, 70K coming out of college wh- what are your thoughts here? Is this a value issue with college?

   12. DFDavid Friedberg1:15:01

       Well, yeah, I think the market's definitely correcting itself. I think for years, as Chamath said, there was kind of this belief that if you went to college, there was n- regardless of the college, there was this outcome where you would make enough money to justify the debt you're taking on. And I think folks have woken up to the fact that that's not reality. Again, if there was a free market, remember, most people go to college with student loans, and all student loans are funded by the federal government. So, the, the cost of education has ballooned, and the underwriting criteria necessary for this free market to work has been completely destroyed because of the federal spending in the student loan program. Th- th- there's no descrip- dis- discrimination between one school or another. You could go to Trump University, or you could go to Harvard. It doesn't matter. You still get a student loan even if at the end of the process you don't have a, a degree that's valuable. And so I think folks are now waking up to this fact, and the market is correcting itself, which is good. I'll also say that I think that there is this premium with generally mass production and industrialization of the human touch. And what I mean is, if you think about, hey, you could go to the store and buy a bunch of cheap food off of the store shelves. You could buy a bunch of Hershey's chocolate bars, or you can go to a Swiss chocolatier in Downtown San Francisco, pay $20 for a box of handmade chocolates. You'll pay that premium for that better product. Same with clothes. There's this big trend in kind of handmade clothes and high-end luxury goods.

Episode duration: 1:35:48