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How SaaS went from growth annuity to AI fragility story

Every Anthropic release now triggers another wave of SaaS de-grossing; Chamath says the question shifted: not when ARR compresses but whether SaaS survives.

Jason CalacanishostChamath PalihapitiyahostDavid Friedberghost
Feb 28, 20261h 21mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 1:22

    Bestie intros

    1. JC

      All right, everybody. Welcome back to your favorite podcast, the All-In Podcast. Today, we have a Conspiracy Corner episode for you. We're gonna go over the nine eleven inside job, we're going over flat Earth, JFK assassination.

    2. CP

      [laughs]

    3. JC

      It's gonna be all conspiracy all the time after our amazing-

    4. CP

      [laughs]

    5. JC

      ... blockbuster episode during ski week. We're going all conspiracy here. Our guest today, Alex Jones.

    6. CP

      How many views did it get? Nine views? [laughs]

    7. JC

      I, I mean, it's tough when you have one out of four besties. It doesn't... Michael Tracy is on standby.

    8. CP

      Not true. Not true.

    9. JC

      I don't... Not true.

    10. CP

      I can carry an episode for at least four hundred thousand views.

    11. JC

      I mean, you might.

    12. CP

      [laughs]

    13. JC

      You might. I liked your... Hey, for people who don't know, Chamath has his own YouTube channel. He's got his escape hatch for when this train wreck burns to the ground. He started his own YouTube channel. He's hedging his bets. Friedberg's working on his solo project. Everybody's doing solo project. The band's got a lot of solo projects going on.

    14. CP

      The Beatles are experimenting. The Beatles are experimenting.

    15. JC

      They're experimenting. We got a little Yoko Ono [laughs] situation-

    16. CP

      Yeah

    17. JC

      ... going on here. You know what the number one topic for this show was by the All-In AI bot, Sacks?

    18. SP

      What's that?

    19. JC

      The number one was Dario versus Hegseth. The, uh, Department of War versus Anthropic was the number one-

    20. SP

      Yeah

    21. JC

      ... topic selected by our AI bot. As a programming note for folks, that decision will be made end of the day Friday when this podcast comes out, so we will talk about it next week, but let's get to work. We've got a full docket. The Claude

  2. 1:22 – 30:39

    Claude's hit list, SaaS crash, and Citrini's AI letter

    1. JC

      kill list has expanded, and an AI fan fiction Substack tanked your 401 [k] on Monday. Let's get into it. Anthropic's generational run continues. They're now three for three in tanking different market sectors, Chamath-

    2. CP

      [laughs]

    3. JC

      ... in February. Congratulations. [clapping] This is like, they, they took the, the mantle from Brad Gerstner, uh, tanking the market.

    4. CP

      The Anthropic [beep] list.

    5. JC

      It is. February 3rd, Anthropic announces, "Hey, we got a legal plugin for Claude, Cowork." Thomson Reuters, LexisNexis, LegalZoom all down at least 10% since February 3rd. Then on February 20th, Claude Code Security is announced in a limited research preview. Stocks tank again. CrowdStrike, Cloudflare, Okta all down. Then February 23rd, Anthropic announces Claude can modernize COBOL databases. If you don't know COBOL, that's the, like, oldest coding language in the world. That's where Sacks learned to code when he was in college in the '70s. It's used for banking, payroll, government.

    6. CP

      Healthcare.

    7. JC

      Healthcare. It runs 95% of ATMs in the US, and it powers Social Security payments. 85% of all COBOL code runs on IBM machines, so IBM decided they would tank 13% on Monday, their worst day since 2000, $31 billion in market cap losses. So let's stop here before I get into the fan fiction piece. What's your take here of what's happening in the market, Chamath? Is this simply people are looking for an excuse to trim their positions 'cause things have been top ticking, all-time highs, and people are just looking for an excuse? Or is this reality? Is this the go-forward reality that AI is going to compress these kind of stocks because it solves a lot of problems?

    8. CP

      I'm gonna give you two explanations. I don't know what percentage I would allocate across the two, but I think one is tactical and one is much more strategic, but I think both are happening. The tactical one is that we're at a moment in time where a lot of the smart money hedge funds are starting to massively degross. And what that means is they're trimming a lot of positions, and they're just taking on a lot less risk.

    9. JC

      Hmm.

    10. CP

      Why? I don't exactly know. It could be motivated by the second thing that I'm going to talk about, but the point is, in a degrossing cycle, you tend to be trimming risk and making your position sizes much smaller. So the longs become less long, the shorts become less short, and you just shrink, and so there's just general downward pressure. That is a clear behavior right now. But I think the structural change is the more important one, and this is sort of what I talked about this morning. In a normal functioning market, what we are always debating is when a set of cash flows go from becoming highly confident to less highly confident. It's a when conversation. So when will Coca-Cola's cash flows be impacted? When will Eli Lilly's cash flows be impacted? When will Meta's cash flows be impacted? And the answer to the when gets translated by the public markets into three things. Your price-to-earnings multiple, where if you invert that number, what that is equivalent to is the yield on the money that you get, okay? So if you're at, you know, 20 times PE, that's a 5% yield. The second is a revenue multiple, and the third is what's called your weighted average cost of capital, which is to say, if you look at the next 20 to 30 years of earnings and you wanna figure out what that is worth today, you have to discount all of these back, and you have to assume a percentage of interest effectively that it takes to get there. And the basic math of this is that when you have a high WACC it's called, you're massively discounting these cash flows. When you have a low WACC, you're assuming that these things are very durable. Okay, so w-what is happening? We used to debate when. This is no longer a when moment. The market is very much in an if mode. Are these cash flows durable at all?

    11. JC

      Hmm.

    12. CP

      Could they fall off a cliff in year three? Is there some AI model that's gonna come around the corner and obliterate this business without me knowing it? And because they've shifted into this if mindset, your risk becomes totally different. You have this event risk that you don't know how to price.And whenever the market shifts into that mode, what you see are that the holders of those equities want a massive margin of safety. What does that mean? They have to take P/Es way down. If you used to trade at forty, you should trade at twenty. If you used to trade at twenty, you should trade at ten. They take revenue multiples down. You used to trade at ten times revenue, now you're gonna trade at three times. You take the WACC way up. Used to be a six percent discounted weighted average cost of capital. You know what? I'm taking you to twelve or thirteen. That's the market's way of saying, "I'm now debating if these things will even exist, and so I need to give myself a huge buffer to own this stuff."

    13. JC

      Hmm.

    14. CP

      That's what's happening right now. It has a lot of ripple effects that we can talk about. Friedberg and I have talked about this a lot. The most obvious impact is how these tech companies recruit and retain talent, because the biggest thing that it starts to eat into are the cash flows of a business, which really directly tie to stock-based comp and all this other stuff. But let me just stop there. So we are-

    15. JC

      Yeah

    16. CP

      ... we have moved away from a when to now an if, and I think that that is a very smart question to be asking. The answer may be for many of these companies that they will survive, but we don't know how long, and until that becomes clearer, you have to give yourself room to be wrong.

    17. JC

      You said when, then if. Did you mean if-

    18. CP

      No, no, no, no

    19. JC

      ... to when?

    20. CP

      We, we've always debated when.

    21. JC

      Right. [laughs]

    22. CP

      When will these cash flows disappear? Now it's like, will they even exist?

    23. JC

      Got it, okay. So the second part of this story, Friedberg and Sacks, is that a Substack post fan fiction, uh, taking place in the fictional 2028, uh, Global Intelligence Crisis went mega viral, 28 million views on X. It was posted Sunday night. It made the market tank on Monday. In this fictional Substack post, the author said there's gonna be essentially a death spiral that happens because of AI. How does that work? Well, first, companies embrace AI. Everything goes right. They're able to cut staff, their margins go up, uh, similar to how Amazon has, you know, trimmed their white collar staff. Then they're so successful at this that they lose their customer base because consumers don't have discretionary funding to spend, then it creates a death spiral where the companies keep deploying AI to try to hit the margins, cutting staff, and the entire economy collapses, Dr. Doom level stuff. Unemployment's at 10%, S&P goes down from 38% highs. After this piece came out, which speculated that agents would get rid of all the 3% interchange fees and move everybody to settle transactions on stable coins, all the financial stocks got hit on Monday. Amex down 8%, Capital One down 8%, Mastercard 6%, Visa 4%, yada, yada. Finally, this piece got a lot of pushback. There was a silly piece in it or a section in it where they said AI agents would vibe code their way to displacing DoorDash, and, uh, that's kind of silly if anybody's run a network-based business knows. Sacks, I assume you, uh, read this piece or at least saw the fallout from it. What's your take? And then we'll go to you, Friedberg.

    24. DS

      Yeah. Well, I, I know that this, uh, Citrini article got passed around like a joint at a Grateful Dead concert.

    25. JC

      [laughs]

    26. DS

      But I'm starting to question how legitimately viral it really was. There's some information that just came out that the attribution of the article has been amended, meaning the co-authors have been amended to include a short fund that was-

    27. JC

      Who?

    28. DS

      ... shorting some of the names mentioned in the article. This is according to another post that just came out. According to this post, the authorship attribution attributed to market moving was changed after publication, and the co-author is a managing partner of a $262 million SEC-registered hedge fund-

    29. JC

      Bum, bum, bum

    30. DS

      ... who confirmed short positions in the companies the report named. So I think that's point number one is I just wonder, did this article truly go viral or did the authors do anything to kind of amplify it? And we just don't know the answer to that question. But regardless of that, let's just take the arguments on their face. I think one of the best responses to it was by another writer named Derek Thompson who wrote a article called Nobody Knows Anything, which I think is a reference to a famous take by legendary Hollywood writer William Goldman.

  3. 30:39 – 40:19

    Why Doomer narratives are more popular, valuable new AI jobs

    1. JC

      on this topic

    2. DS

      Just on this point of a lot of these debates about AI are dueling science fiction narratives. I just think that the doomer narratives are inherently more appealing to people. I mean, I think it's partly just you look at most sci-fi movies are dystopian, not utopian. In addition to that, I think we have a bunch of heuristic biases in favor of the doomer narrative. So one of them is the seen versus the unseen. It's a lot easier to see the jobs are, that already exist that could be obsoleted than it is to imagine the new jobs and the new business models that haven't been created yet, and that will likely take some great innovator or a genius to think of in order to create. So we have that huge heuristic bias of not being able to see the creation that's coming. It takes way less creativity to think about the potential destruction.

    3. CP

      I think it's a, it's a big-

    4. DS

      And then finally, I think, you know, the other heuristic is just the whole fixed pie fallacy. Most people do tend to think of the economy as a fixed pie. This is why you see so much anger against, you know, millionaires and billionaires, is because of this idea that if someone's getting rich, it must be at the expense of someone else. That's not actually the case. The economy itself could be growing larger as a result of someone inventing something new that increases production. A really good line from a- another article that was written just a couple of weeks ago was, "The economy is not a, a pie, it's a garden, and technology is rain." So again, you know, all of this technological innovation is going to increase the growth rate of the garden. It's not a fixed pie. And just because you see an expansion in productivity in one part of the economy does not mean that you're gonna see job loss in another part of the economy.

    5. JC

      Yeah. I think the job people are not seeing, but I'm seeing right now, is the person who creates agents, manages them, and is the maestro of the agents, the person who can take the business process, explain it, and train the agent to do it. And there are certain people in business who are just really good at operations, you were one of them, Sacks, running companies, and, like, that person who can fire up an agent, train the agent, and figure out how to manage them, and figure out how to increase their sales-

    6. DS

      Sure. Look, w- with any new technology-

    7. JC

      It's like a great job

    8. DS

      So-

    9. JC

      And it's not a developer

    10. DS

      Look, with any new technology, there's always a huge change management aspect with enterprises because it's hard for them to adapt and change, and the people in the organization who can lead that change management are the ones who are gonna create an amazing career opportunity for themselves. But it's hard to do, and that's gonna slow down the rate of change, just the amount of inertia in the economy. And also, one other constraint is gonna be that at some point here, we may be token constrained, right? I mean, we may not have enough energy, like we've talked about, even though the chips are getting so much better that tokens per second, tokens per watt, and tokens per dollar are all increasing very fast, but we're still gonna probably be constrained in the next couple of years on some dimension, whether it's land, power, shell, or just energy production, or maybe chip production. There are real world constraints on just how fast we can scale the infrastructure, and that will-

    11. CP

      Hmm

    12. DS

      ... mean that these, like, hyper utopian or hyper dystopian narratives will be wrong. I don't think there's time in the next few years for the whole economy to change in the way that the extremes would present.

    13. CP

      I think you're right. I think you're gonna see a ten X-ing in the demand for tokens, but I also think you're going to see a ninety percent price reduction in the cost pr- of an output token, probably by the end of this year. So I think that, to your point, like, it's, it's gonna just create an enormous upswell of demand because we're gonna be able to cut the prices of an output token so dramatically. And I think that's gonna-

    14. JC

      And by the way, that discussion we had, Chamath, last week when we talked about c- the tokens outpacing [chuckles] the employee salary and just where are these tokens all gonna come from, that was our most viewed clip or one of the most viewed clips in the history of this podcast. So people are-

    15. CP

      I had, I had my-

    16. JC

      ... actually really focused on this. Yeah

    17. CP

      ... I had my team at eighty nine, we, we, we did our cost model, and now we have that as a line item. When we think about fully burdened cost of employees, we now factor that in because we're, we're at a place where some of our engineers are just racking up ginormous bills. And then separately, just general runs that we do for general purpose stuff that we need to just run our product is ex- it's so expensive. So I am waiting with bated breath for what Sacks said, which is like we need an explosion in the capacity that's available because I do think that the, the Silicon solutions are coming that will cut the cost, but we need a large block of land, power, shell ready to then turn all of this stuff on, so that we can actually take advantage of it.

    18. JC

      Rumor is the new Mac Studio is coming. We'll have an M5 chip in it and we'll be language model ready. So that's the rumor, is that they're building it for models, so that could be an incredible turn of events, everybody's desktop running the local model. Sacks, you wanna have the final word here? Uh, Friedberg or Friedberg, before we-

    19. DS

      Just to go back to what Chamath was saying there, I mean, you've got political forces that wanna stop the construction of all data centers in the United States, so-

    20. CP

      Which is crazy. Yeah

    21. DS

      ... if that gains steam, then that's gonna be a huge constraint on any change whatsoever.

    22. CP

      Can I tee this up for you, J. Cal? So I, I went back this weekend, and I looked at the number of data centers that have faced local opposition and whether there were patterns, and I, I posted it on X, so Nick, maybe you can put this up. But it was really a, a very small behavior which was pushing back on data centers and getting them canceled. We had about twenty five projects total, of which twenty were just in Q2 alone. There are 100 data center projects right now that are facing some form of local oppositionSo interesting because these-

    23. JC

      Where if you take that 40% number and you apply this, and then you multiply it by the number of megawatts that they have announced, last year we lost almost five gigawatts in terms of canceled projects. This year coming in '26, we have about seven that could be canceled if you use this math. If then you flow that through, OpenAI, Sarah Friar said this, that every gigawatt for her, for OpenAI, is about 10 billion of revenue. So if you, if you assume that that's roughly accurate, plus or minus a billion here or there, what that means is that 2025, the industry as a whole lost 50 billion of revenue. And this year, if seven gigawatts gets canceled, it's about 70 billion. Now you're talking about 130 billion of lost revenue over these two years that'll go forward in time that we miss out on. I think that that's really bad. We need to figure out a way to nip this in the bud. So confounding because we were sitting here five years ago, 10 years ago, local municipalities were fighting and giving discounts to try to get these data [laughs] centers open to get the jobs and get the revenue, and now we've got people trying to stop them. This is a perfect transition for the State of the Union. Before we get there, two important programming notes. All-In is gonna host two events in 2026, one of them Liquidity, May 31st to June 3rd, uh, in Yountville, uh, up in wine country. Chamath has taken control of the event, and he has set a standard for who gets on stage.

    24. CP

      None of you mids can control the programming. I decide.

    25. JC

      That's it. Chamath came in, and he dropped the hammer. Who do you got so far? You wanna, uh, tease a couple of, uh, people who you invited to come speak?

    26. CP

      I'll tease two.

    27. JC

      Okay.

    28. CP

      The first is an incredibly dear friend of mine.

    29. JC

      Mm.

    30. CP

      The Axe of Axes, Dan Loeb, who founded Third Point.

  4. 40:19 – 52:13

    Understanding the Rate Payer Protection Pledge, what's behind datacenter opposition?

    1. JC

      One of the big topics, uh, and I think something you're working on with President Trump, Sacks, is, uh, this energy pledge. I've been seeing, uh, rumblings about this. Explain what's going on in terms of getting the country in sync around these data centers and energy.

    2. DS

      Well, the President announced in the State of the Union last night that he supports a Ratepayer Protection Pledge, which requires, uh, the major tech companies to provide for their own power needs for AI data centers so that residential consumers do not see their rates going up. I think this makes total sense. I think, Chamath, to your point, this is the reason behind a lot of the opposition to new data centers is that the local residents fear that their electricity prices are gonna go up, and that shouldn't be the case. And so the President said that he's committed to not allowing residential rates to go up as a result of data centers. It's pretty straightforward. You get the big tech companies, the hyperscalers, to pay for the increase in the electricity cost, or you let them set up their own power behind the meter. The President's been talking about this for over a year, that our biggest AI companies would also become big power companies because we had let them, uh, stand up their own power generation behind the meter. So these data centers don't even have to connect to the grid. They could just do co-location themselves. But also, I think that with this Ratepayer Protection Pledge, what you're gonna see is that it could actually bring down consumer prices, because what happens is that when these data centers then set up their own power and connect to the grid, they can give back the excess to the grid. Also, they will make investments in scaling the infrastructure. So although electricity is priced at a metered rate, the cost to generate it are not all variable. There's a lot of huge fixed costs in there. So when you increase scale, then you can actually reduce the, the metered rate. So again, you know, this is really, I think, the rebuttal to Bernie Sanders, who just wants to stop all progress whatsoever. I saw a, a funny post calling it BANAS, which is Build Absolutely Nothing Anywhere Near Anyone.

    3. JC

      [laughs]

    4. DS

      So this is the-

    5. JC

      That's not sustainable

    6. DS

      ... BA- BANAS is replacing the new NIMBY, so you just can build absolutely nothing.

    7. JC

      Yeah. It's BANAS.

    8. DS

      I think the president's approach finds a very good balance here, which is, look-

    9. CP

      We can have progress, just don't make residential consumers pay for it. Let the big tech companies pay for it themselves, and I think you'll see more coming out about this from the White House next week.

    10. JC

      Quite a deft move. Friedberg, h-how should America be thinking about this great data center build-out, energy usage, you know, if you expand it out over the coming decade, a-and how do you sell that to the backdrop that you talk about, the socialist movement? You got a great interview coming out with Ray Dalio on the All-In Interview program next week. How do you think about those competing forces? You've got the socialists saying, "Bananas, NIMBY, slow down, uh, de-sell," and then you've got this incredible race we're in for efficiency and this opportunity and abundance. How would you sell it to kind of bring these two sides together, or is it just impossible?

    11. DF

      The data coming in and out of data centers moves at roughly the speed of light, so you could put them anywhere, and I think that our policymakers need to be very cognizant of that fact. You have, and we do, connect the internet using high-speed cable, high-speed fiber optic throughout the world. And so theoretically, if we don't embrace and allow the economic development of the data center industry, and it will fundamentally be an industry because it is almost like the new sort of oil. Where are the oil rigs gonna go? Where are the railroads gonna go? Where are the telegraph lines gonna go? Where are the factories gonna go? If we don't put them here, someone else will put them on their shores. Someone else will put them in their country. Someone else will put them in their jurisdiction. And a lot of the economic value that arises from the people that will build those facilities, the energy that will be installed to produce power for those facilities, and then all of the second and third-order industries that emerge as a result of those installations, that value will accrue elsewhere.

    12. JC

      Such a good point.

    13. DF

      So-

    14. JC

      Yeah

    15. DF

      ... it's not gonna, like, just go away. The, the demand is there. The economy's moving forward. AI's moving forward. We live in a world with a hundred and ninety-six countries, and data centers do not take up a lot of space. They're very small relative to the economic value that they produce. If you zoom out on the map of the world, all the data centers in the world fit under the tip of a pin. And so this is a very small footprint, and if we're gonna give up hundreds of thousands of jobs and many billions of dollars of, of economic value creation, we're being pretty silly and, and pretty obtuse in our view of the world. I would just, like, encourage the system that I think is the right system, and we talked about this last time, where provided data centers are producing their own electricity. That means that you're taking electricity consumption off the grid because they otherwise are not being used on the grid, and that will reduce the cost of electricity for other residential and industrial users. So it's silly to think that we need to put a moratorium on data centers. As soon as you do that, the companies that use data centers are not gonna slow down. They're gonna go put them somewhere else, and we're gonna miss out.

    16. JC

      And it's such a good point, Chamath, because you were recently in the Middle East, and I've been there a bunch in Saudi, UAE. These are the folks who built a, a large portion of those oil refineries, and they are savvy to this. And what are they doing in Saudi, UAE, Qatar, all of these regions? They're doubling down. They're ten-X'ing their data center builds. So to your point, Friedberg, either we build them or they're gonna go somewhere else, and there are people who are willing to underwrite these, and they're willing to take out the red tape from the process here and move quicker than us. So we... I think this is a pretty deft move by President Trump to say, "Hey, you guys should all just guarantee that consumers don't get impacted." The water thing is a total hoax. Like, the water is recirculated. That's a hoax.

    17. CP

      I think this is really smart. I think that what the president's doing and what Sacks is doing is really smart. The thing to keep in mind is that there's still a risk that prices go up, and it has nothing to do with these data centers, and it has everything to do with the business model of being a utility. Because what happens is in order to get a license, a monopoly license in an area to provide energy, to generate energy for a community, the exchange works in the following way. You go, and you present a CapEx plan to the Public Utilities Commission. That's effectively your budget. That says, "Here are the lines I'm going to upgrade. Here are the generators I'm going to upgrade." Independent of data centers, the reality is the draw, the electricity consumption of individual Americans is going up because we have more devices, we have cars, we have all of these other things. So what we also have to do is we have to look at how utilities' business model actually incentivizes them to increase prices by making all kinds of investments. So we have to do a good job of making sure we hold everybody accountable because otherwise what you could see is that the data centers taking on the burden for themselves, but prices still continuing to escalate because a utility says, "I need to spend a billion dollars this year to upgrade my infrastructure." And what that allows them to do is take that billion dollars and essentially invest it for a return. That's the business model of utility.

    18. JC

      And this is really happening in blue states. Micron has a hundred billion dollar mega fab in New York, and there's a lawsuit by six, one, two, three, four, five-

    19. CP

      This is, this is shameful

    20. JC

      ... six concerned citizens.

    21. CP

      That's shameful.

    22. JC

      And the project-

    23. CP

      That's shameful

    24. JC

      ... has taken twelve-

    25. CP

      Shameful

    26. JC

      ... twelve hundred days. Twelve hundred days between their announcement and the groundbreaking, and they spent six hundred twelve days on the environmental impact study. People, wake up. Just go to Texas. Elon built his factory here, the Gigafactory, in under, like, eighteen months. This is-

    27. CP

      Yeah, I don't-

    28. JC

      ... the great state of Texas. Come here. We'll build it for you, and you'll be done.

    29. CP

      Yeah, I don't know why anyone bothers with the blue states anymore. They make it too hard to build

    30. JC

      It's retarded. It's so dumb, and such a self-own too. Like, what-- Don't you wanna be part of the future? You're literally ankling the entire country. Disgraziade.

  5. 52:13 – 1:03:58

    State of the Union reactions

    1. JC

      to get through. State of the Union came in at one hundred eight minutes, and, uh, it's the longest in sixty years. Actually the longest since they started tracking this. The theme of President Trump's State of the Union this year, America at two fifty, strong, prosperous, and respected. Trump took a bunch of victory laps, inflation, jobs, closing the border. All those have gone really well, but this comes to the backdrop of Trump's approval rating being super challenged. He started his first year at plus eleven point seven percent, now he's negative fourt- fourteen point three percent, twenty-six point swing. Economy started plus three point four, down to eighteen point two, and trade started at five point nine percent, and we'll talk about the tariff stuff later, and went down to twenty-two point seven. So let's call balls and strikes here, gentlemen. Favorite moments. What were your favorite moments from the State of the Union and just general impressions of one hour [chuckles] and forty-five minutes of Trump going to town?

    2. CP

      I thought it was great. [laughs]

    3. JC

      Favorite moment? Favorite moment or two?

    4. CP

      Well, I had a couple. One was the Ilhan Omar, R- R- Rashida Tlaib death stare [laughs] and them just, like, losing their minds and, and screaming. I just thought it was so un-American. The second was when he was calling for law and order where... And focusing and prioritizing on American citizens, and none of the Dem-

    5. JC

      Over illegal, uh, aliens

    6. CP

      ... yeah, and none, and none of the Democrats stood up. I thought that was kind of foolish. It was, like, obvious things, and the Democrats wouldn't applaud, but this time they did, like they did for the hockey team, which I thought was, like, the right thing to do. And then the fourth thing is just a, a shout-out to our friend Brad Gerstner, who got a big shout-out from the president. I don't know, Sacks, if you engineered that or not, but that was-

    7. DS

      No, I-

    8. CP

      That was fantastic and it's like-

    9. DS

      That was incredible.

    10. JC

      Yeah.

    11. DS

      He got, like, a double shout-out. It was like a double tap. [laughs]

    12. CP

      Yeah. That was really cool.

    13. JC

      That was surreal on group chat.

    14. CP

      Our group chat, our group chat went crazy.

    15. DS

      It lit up, yeah.

    16. CP

      It was really, it was really cool. Those are my four highlights.

    17. JC

      Great. Here's your, uh, here's your clip of, uh, yeah, Democrats not standing for Americans, uh, over illegal aliens. Twenty seconds.

    18. SP

      If you agree with this statement, then stand up and show your support. The first duty of the American government is to protect American citizens, not illegal aliens. [audience applauding]

    19. JC

      Why wouldn't you stand for that? That's an easy one to stand for. Doesn't make any sense.

    20. DS

      Would you stand for it, Chago?

    21. JC

      Yeah, I mean, I, I'm, I'm pro- I'm, I can be anti-ICE, but I'm pro-American and I'm pro reasonable immigration, like 90% of the country is, so it just doesn't make any sense. Uh, if you have any highlights-

    22. DS

      But do you think, but do you think American citizens should be prioritized over illegals?

    23. JC

      Well, of course. Of course, yes. Of course, yes. And then I, I, I also think there should be a path to citizenship for people who've been here for a while, and I think that's what the majority of the country thinks as well.

    24. DS

      Well, but your, your point is, y- I can hold two thoughts in my head, so I would have stood if he asked me.

    25. JC

      Yes. Obviously, we should take care of American citizens first, yes, and we should deport violent criminals. We've been over this, like, a million times here. This is, like, consensus in the country.

    26. DS

      Yeah, but what do you, but what do you, what do you think is going on in everybody else's head when they're like, "We gotta s- we cannot stand for this. This is out there"?

    27. JC

      These two sides... I mean, I think it's like the tariff thing, it's like the ICE thing. These two sides cannot work together. It's just the most polarized it's ever been. Trump is not, like, the kinda guy to reach across the aisle. The Democrats are now digging in. So we just have a dysfunctional government where, you know, in a more functional time period, like under Clinton, let's say, or Bush, people would've gotten together, and I'm, I'm jumping ahead to the tariff discussion, and they would've said, "Yeah, of course. Tariffs are done in Congress. That's the law, whatever. What are your thoughts, Mr. President? How can we support your tariff program?" But now it's like, oh, well, we don't work together. We don't actually have discussions anymore. There's no bipartisan, you know, collaboration. Uh, all these politicians are disgraceful, disgraziati across the board. They should be working together for the American people. If the president wants to do tariffs-

    28. DS

      Well, how do you, how do you-

    29. JC

      ... they should be reasonable about it and give him the power to do reasonable tariffs, and he should be reasonable and say, "Hey, I understand that's your power. Let's get together and we'll, we'll chop it up and let's have dinner together." But they're just too polarized. It's just disgraceful where this country has gotten to. I blame both parties.

    30. DS

      [laughs] Whenever the Democrats get smoked out as being radicals and extremists, you always wanna basically say a pox on both your houses and blame the Republicans and Democrats equally. The fact of the matter is the president said to the audience, to the members of Congress, "Hey, if you agree with this statement, stand up." And of course, every single Democrat sat there stone-faced and refused to applaud or acknowledge what he was saying. This was a very easy test for the Democrats to pass.

  6. 1:03:58 – 1:10:17

    Science Corner: Cure for blindness via Yamanaka Factors?

    1. JC

      Sultan of science, it is your time to shine. The world's greatest moderator has decided we're going directly to Science Corner.

    2. DF

      [laughs] Sac, Sac's waiting.

    3. JC

      This is your time to shine-

    4. DF

      Sac's wa-

    5. JC

      ... and it's Sac's time to drop a deuce.

    6. DF

      Sac's waiting immediately [laughs] off camera.

    7. JC

      Yeah, he has to drop a deuce.

    8. DF

      He's still-

    9. DS

      I'm here. What's up?

    10. DF

      He's still here. [laughs]

    11. JC

      [laughs]

    12. DS

      But what do you need me for?

    13. JC

      This is very important for you.

    14. DF

      Friedberg's gonna talk.

    15. JC

      Lightning round for Science Corner. Go, Friedberg.

    16. DS

      Wait, wait, wait. Are we doing any more topics after this, or can I just leave?

    17. DF

      Yes, tariffs.

    18. JC

      Yes, we're doing tariffs.

    19. DS

      Wait, why would we do that?

    20. JC

      Three-

    21. DF

      Because to keep you-

    22. JC

      Because I want to get paid for Science Corner

    23. DS

      ... you're gonna put the audience to sleep.

    24. JC

      Two-

    25. DS

      I'm not saying-

    26. JC

      One

    27. DS

      ... Science Corner doesn't have its audience-

    28. JC

      Listen, you can go take-

    29. DS

      ... but why wouldn't we do... Yeah, exactly.

    30. JC

      Go take a deuce-

  7. 1:10:17 – 1:21:07

    SCOTUS strikes down tariffs, Trump pivots

    1. JC

      SCOTUS struck down Trump's emergency powers tariffs last Friday. SCOTUS voted 6-3 against President Trump's EEPA tariffs. Six judges voted against, three conservatives, Roberts, Barrett, Gorsuch, uh, and three liberals. Via Bloomberg, this is the biggest rebuke of existing executive policy in 91 years, since SCOTUS struck down FDR's first New Deal in 1935. UPenn Wharton Analysis says the tariffs collected about $175 billion to date, 50% of all tariff duties, um, might wind up being refunded. This is gonna take some time to sort out in the courts. 2,000 importers have already filed for refunds. We, we talked about it here. I think the majority of people felt like this is the way the decision would go, and we talked about here that there were other options for President Trump to pursue. He immediately, uh, said he was not deterred and invoked a 15% global tariff across the board via Section 122 of the 1974 Trade Act. Here's your Polymarket. Will the court force Trump to refund tariffs? 18% chance, but spiked to 40% after the SCOTUS decision. How will Congress react? Polymarket says 3% chance Congress passes any tariffs by March 31st. So again, as I referenced earlier, these two sides just can't seem to work together, and that would've resolved the whole thing. Sacks, you want to, um, give us your take here?

    2. DS

      First of all, I don't think that the tariffs are going away. What the court basically indicated, especially the 70-page Kavanaugh dissent, is that there's multiple alternative bases in law for the tariffs in existing law. So for example, Section 122 of the Trade Act of 1974 enables temporary 150-day tariffs of up to 15% to, uh, address balance of payments issues, and the president has already invoked this. So we are now operating under that. What the 150 days is gonna do is buy the administration time to substantiate via studies and agency reviews what it needs to prove in order to invoke more sweeping tariff authority under Section 301 of the Trade Act and under Section 338 of the Tariff Act. Section 301 authorizes tariffs responding to unfair foreign trade practices. Section 338 of the Tariff Act allows tariffs against countries discriminating against US commerce. The Kavanaugh dissent actually provided a roadmap for the administration to put in placeTariffs using one of these alternate, uh, bases. So I think that one way or another, the tariff policies of this administration and the favorable trade deals that they allow us to strike with many nations, they will continue. And I think the court seems to know that because the majority's opinion as concurrence has collectively said nothing about how the administration should go about refunding the tariff revenue already collected. I think that if they expected this decision to end the tariff policies altogether, they probably would have said something about that. And I think that brings up a really important point just on the merits here, which is why would we want to give back hundreds of billions of dollars to a bunch of importers when we're trillions of dollars in debt? And I'll just say that the people who originally predicted that somehow these tariffs would be catastrophic for the economy, those predictions all proved not to be true. So I think that this is ultimately, I think, gonna be a popular policy. The administration will figure out a different way to do it, and I predict that future administrations, whether they're Republican or Democrat, will keep some version of the tariffs in place because I think that they will be ultimately popular on a long-standing basis.

    3. JC

      Chamath, your thoughts?

    4. CP

      I think we've proven the experiment has been successful. What was the experiment? We needed to smoke out what the right balance of trade should be between the United States and all of its partner countries. I think that what we uncovered is that for the most part, there were structural imbalances that were made not because they made economic sense for America, but it was just part of a hodgepodge of globalist drivel that people just bought into. And if you strip all that stuff away, we had a hollowed-out manufacturing class, and we have a hollowed-out middle class, and the tariffs will create more equality for the American worker in the end. So now I think the debate should be about how to implement these in a structural and permanent way. I think we talked about this before, Jason, that-

    5. JC

      Yeah

    6. CP

      ... this was sort of expected, and there are many other mechanisms. I think the president activated one of them immediately. I don't think this is going away, and I don't think it should go away. So I think now the point is Congress really should ratify these things because it is clear that it was the right thing to do. And if they don't, then, you know, the president still has a lot of room to get these done. But these make smart economic sense in my opinion.

    7. JC

      Friedberg, any thoughts on the ruling? Does it give you some, I don't know, um, respect for the courts that they made a, a judgment not along party lines for once? Uh-

    8. CP

      Yes.

    9. JC

      Does it-- Yeah. Okay. Ex-expand on that. [laughs]

    10. CP

      Yeah, and I think, I think that all, I think all Americans should feel assured and comforted in the fact that I think a lot of people view the Supreme Court as having a high degree of partisanship. The fact that the president, despite having a majority of what others would think were kind of politically aligned appointees on the Court, had a ruling that he did not want, I think should give everyone good faith that the system that the founders set up is working, that there is a judicial branch that adjudicates the law against the executive branch when they think that, um, it doesn't map, and I think that that was very important to see. So, you know, I clearly-- You-- The, the debate about tariffs, the economic effect of tariffs, the security structural trade relationship effect of tariffs, and the importance of that is a separate conversation, but I do think that the read of the law being what I would say is non-partisan with respect to the court's action is important and probably very valuable.

    11. JC

      I'll reiterate that. This is a great moment, I think, for, uh, the Supreme Court to make a thoughtful decision, and I think we need to think about executive power a whole bunch, whether it's Biden with student loans or Trump with tariffs. We have this beautiful system set up by the Founding Fathers. I know it's frustrating. Gridlock's frustrating. Having to work together is frustrating. Trust me, we, we all come to this podcast every [laughs] Thursday, and we have to work together. It's hard to work together. But you gotta learn to work together, and we don't want an executive branch that can unilaterally just roll over the other branches. And, uh, that's gonna end. I think Trump's gonna lose the midterms, and we're gonna get to more chaos again. And it-- we might as well start this reconciliation process of these two sides stopping their lawfare against each other and working together for the American people on the important issues. The tariffs, there are some fundamentally important things that Trump was doing there, and they were working. They could have been chaotic. Uh, that's a reasonable, um, you know, criticism of them because business owners didn't know what to do. So Trump did it in a chaotic way. That's just a fact. He should have done it in a more thoughtful way, and the Congress should have been alongside him saying, "Hey, what tools do you need? How can we help support this? We know that there's trade imbalances. We know that people are being unfair. Let's work together as one America to negotiate these things." So both sides start having dinner together, start playing cards together, and do what we do here on this podcast, which is you fight it out, you argue, but then you come together and try to find some resolutions for this stuff. So they should go and tell Trump, "Hey, we'll approve all the tariffs you did. We will not force you to get refunds." The Congress should come out and just say that. And then they should say, "Hey, and when you want to do them in twenty twenty-six, just run them by us or ask us for some parameters that you want, and let's just be thoughtful about it. These are our concerns." That's it. Thank you for coming to my TED Talk.

    12. DS

      Can I just do one response on that?

    13. JC

      Absolutely. I'm sure you have some debate club points that you wanna point out. Go ahead.

    14. DS

      Well, I just wanna make one. I mean, do you think Susan Rice is gonna respect your call for comity and basically working together, kumbaya? She just-

    15. JC

      I want the esprit de corps. No, I don't. I think both sides-

    16. DS

      She just, she just-

    17. JC

      And this is what we need

    18. DS

      ... had a diatribe where she basically said that Republicans, and actually not just, like, partisan Republicans, but even tech companies that merely were working with the administration should expect to get prosecutedI mean, she was basically outright saying she's she and the Democrats are going to pursue lawfare as soon as they get back in charge.

    19. JC

      They're absolutely going to do that. Just like when Trump got in, he went after Comey, he went after Jerome Powell. The lawfare is happening on both sides. Both sides need to drop the lawfare. We need to get rid of these pardons. They're ridiculous. And we have to be a team. So let's just get some esprit de corps and teamwork going in Washington, D.C. And that's what we should vote for in the midterms. We should vote for moderates who want to work together. And in 2028, we should have some kind of moderates and tickets that want to work together. That would be better for all Americans. This kind of chaos is not good, folks. All right. Listen, this has been another amazing episode of the All In Podcast, your favorite podcast. Like, subscribe, whatever the hell you want to do on your own time. For David Sacks, David Friedberg, Chamath Palihapitiya. Love you, boys. I am the world's greatest moderator, JCal. See you next time. Bye-bye.

    20. DS

      Bye-bye. Let your winners ride.

    21. JC

      Rain Man David Sacks.

    22. DS

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

    23. JC

      Love you, besties. Ice Queen of Kin Wong.

    24. DS

      Let your winners ride. Let your winners ride.

    25. JC

      Besties are back.

    26. DS

      Gold 13.

    27. JC

      That's my dog taking a notice in your driveway, Sacks. Wait, no, no, it's good. Oh, man. I came to my haberdashery weekly. I put We should all just get a room and just have one big huge orgy because they're all just useless. It's like this like sexual tension that we just need to release somehow. Wet your feet. Wet your feet. Wet your feet. Wet your feet. We need to get merch. Besties are back. I'm going all in. I'm going all in.

Episode duration: 1:21:07

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