Trump Takes On the Fed, US-Intel Deal, Why Bankruptcies Are Up, OpenAI's Longevity Breakthrough

1. 0:00 – 0:46

   Bestie intros: The Moose is loose at J-Cal Ranch!

   1. CPChamath Palihapitiya0:00

      Oh, look at that. It's a moose.

   2. JCJason Calacanis0:01

      Sorry, guys, I got a little visitor.

   3. CPChamath Palihapitiya0:02

      The moose.

   4. JCJason Calacanis0:04

      Hey, buddy. The moose has landed. (laughs) Oh, he's up on my desk. Oh, how's your Uncle Jason, huh?

   5. CPChamath Palihapitiya0:11

      Let's see that handsome face. There he is.

   6. JCJason Calacanis0:14

      There's the moose. The moose is loose. Let's see. Should we do a side by side?

   7. CPChamath Palihapitiya0:17

      What a handsome visage.

   8. DSDavid Sacks0:20

      (laughs) What a handsome visage.

   9. JCJason Calacanis0:20

      You're an idiot. That isn't good stuff.

   10. CPChamath Palihapitiya0:22

       That's a stately animal.

   11. DSDavid Sacks0:23

       (laughs)

   12. JCJason Calacanis0:23

       Come here, buddy. You ready for ranch time? All right, get him outta here. Get him outta here. We gotta show the predation. (laughs)

   13. DFDavid Friedberg0:31

       Let your winners ride.

   14. JCJason Calacanis0:34

       Rain Man, David Sachs.

   15. DFDavid Friedberg0:36

       I'm going all in.

   16. NANarrator0:38

       And I said- We open sourced it to the fans and they've just gone crazy with it.

   17. JCJason Calacanis0:42

       Love you guys.

   18. DFDavid Friedberg0:42

       West Side Queen of Kinwah. I'm going all

2. 0:46 – 9:45

   All-In Summit updates, Jason's new program

   1. DFDavid Friedberg0:46

      in.

   2. JCJason Calacanis0:46

      All right, everybody. Welcome back to the number one podcast in the world, the All In podcast. We're back, we're back. It's the original crew. You got your classic, you got your classic. And speaking of a classic, Friedberg's been tearing it up. What an amazing event we're gonna have September 8th and 9th in Los Angeles. The fourth annual All In Summit. Allin.com/events. And, uh, now comes the incredibly awkward moment in the program, David Sachs, where we see Friedberg attempt to do an ad read. I'm gonna let him just try to do the first one, and then I'll interrupt him and say, "Let, let a professional handle it." But let's give it a shot here. Let's see how Friedberg does with his uncomfortable promo.

   3. DSDavid Sacks1:28

      These are not your typical event sponsorships. Every summit partner is building an insane activation.

   4. JCJason Calacanis1:37

      All right, stop.

   5. DSDavid Sacks1:38

      Okay.

   6. JCJason Calacanis1:38

      It's, it's terrible. Three, two-

   7. DSDavid Sacks1:39

      Okay.

   8. JCJason Calacanis1:40

      All right. Oracle's coming, and they've done an amazing job. They're gonna build out this amazing bar in the expo hall. Drinks on our friends at Oracle. Yes. And they're gonna be sponsoring the PE and VC dinner, as well as the AI infrastructure dinner. We have all these bird of a feather dinners where you can meet people in your tribe. Our friend, Jeremy Allaire at Circle, he's also supporting it. He's building out a huge teched-out networking lounge right in the heart of the event. And Circle and BVNK are also partnering to sponsor the Stablecoin Dinner. Chamath loves his stablecoins, he'll be there. And Iren, they operate data centers powered by my favorite, renewable energy. And they're putting on Casino Night.

   9. DSDavid Sacks2:23

      That's all you, JCal.

   10. JCJason Calacanis2:23

       That's me.

   11. DSDavid Sacks2:23

       You're gonna be at that. Yeah.

   12. JCJason Calacanis2:25

       Absolutely. Me and my pal Chris Wright are gonna go there.

   13. DSDavid Sacks2:27

       (laughs)

   14. JCJason Calacanis2:27

       And, uh, we're gonna be in the solar tent, and it's gonna heat up.

   15. DSDavid Sacks2:31

       Yeah.

   16. JCJason Calacanis2:32

       And we also have... How crazy is this? BVNK. It's not enough they're doing the Stablecoin Dinner with Circle. They're gonna build out an arcade in the expo hall so you can get some games.

   17. DSDavid Sacks2:40

       We have to have a competition.

   18. JCJason Calacanis2:42

       You wanna do arcade showdown, JCal? Absolutely. We can do donkey con. What do you wanna do? You wanna play Stargate, Tempest? What are you gonna-

   19. DSDavid Sacks2:47

       Whatever they have.

   20. JCJason Calacanis2:47

       What's your game?

   21. DSDavid Sacks2:48

       Sunday-

   22. JCJason Calacanis2:48

       Tell me your game.

   23. DSDavid Sacks2:49

       You, you and I, we'll see. Street Fighter II maybe, Championship Edition. We'll do a one V one 10K-

   24. JCJason Calacanis2:55

       (laughs)

   25. DSDavid Sacks2:55

       ... you know, two out of three. What do you think?

   26. JCJason Calacanis2:56

       I feel like I'm getting angle shot here. Did you like-

   27. DSDavid Sacks2:59

       (laughs)

   28. JCJason Calacanis2:59

       Did you write the code in that? Did you write the emulator?

   29. DSDavid Sacks3:02

       We rented a, we rented the arcade for my bar mitzvah, so-

   30. JCJason Calacanis3:04

       Oh.
3. 9:45 – 36:45

   Trump vs the Federal Reserve: Is the Fed partisan, what should a modern Fed look like?

   1. JCJason Calacanis9:45

      Trump is still fighting with the Fed. They say you can't fight the Fed, Sachs, but apparently, President Trump is fighting the Fed. You remember he was threatening to replace Jay Powell and he did the site visit and all that drama? Well, Trump recently fired one of the members of the Fed, Governor Lisa Cook. And you remember he called Powell too late, stupid, numbskull, all these great, uh, adjectives here. But breaking, as we're taping this on Thursday, Lisa Cook has officially sued (laughs) the president, arguing that the White House has no authority to fire her. And to just give a little background before we get everybody's opinions, uh, she's one of seven Fed governors. The governors vote obviously on the rate cuts. We've talked about here, maybe they were too late to raise rates, maybe they're too late to cut rates now. Big debate going on. She was nominated by Joe Biden in 2022, and two weeks ago, the Federal Housing Finance Agency director accused Cook of mortgage fraud, claiming she had two different homes listed as her primary residence. You're obviously only allowed to have one. This is allegedly. And she did this long before she was Fed governor, but they have sent a criminal referrer to the DOJ, and Cook has not been charged in any crime yet, so that's important to put out there. And this is all important because Fed governors can only be fired for cause. You need to have cause. And so, Trump has asked Cook to resign. She declined. On Monday, he said he was firing Cook for cause for deceitful and potentially criminal conduct. The first time in US history that a president has fired a Fed governor. This has brought up, Chamath, a lot of issues around the independence of the Fed, which it's supposed to be, in its best iteration. We can debate that as well. And, uh, important note, there is an emergency hearing set for 10:00 AM Friday morning in DC. So, by the time we publish, there might be a decision of whether she can continue serving or not. ABC News reported this will likely go to the Supreme Court. Here's your polymarket, folks. Shout out to my guy Shane. Congratulations on the investment from Donald Trump Jr., also joining the board. There's a 25% chance that Lisa Cook will be out by the end of the year. So, it's not huge, but it's not a long shot.Let's stop there. There's more to discuss about the Fed mechanically. Chamath, we'll start with you for the market's perspective. The Fed's supposed to be independent, so do you have concerns about it being independent, and then does this feel like lawfare, or ticky-tacky, or they're weaponizing the Justice Department to you to, you know, get what they want, which is rate cuts faster, and more of them?

   2. DFDavid Friedberg12:32

      I think that the Fed is no different than any other appointee to a part of the government, which is that they are partisan. Meaning, if I said to you, "Is the Supreme Court viewed as partisan or non-partisan?" I think that most people at this point would say that the president that appointed them did so because they aligned with his ideology. If I asked you the political appointees to any department of the United States federal government, "Are they political or non-political?" And the answer is that they're political. And the idea that we still can't admit that the Federal Reserve is political is part of the problem. The reality is that the people that appointed these governors did so because the people that were appointed were aligned with their philosophy. And so we should stop pretending that they're independent, because they're not. And in as much as they are closer to a regular civil servant than the Supreme Court appointee, which is to say a lifetime appointment, which it's not, then I think it's very reasonable to say that any sitting president should be allowed to remove a Fed governor if he believes it's not aligned with the wishes of the electorate and the voters, and the plan that was voted in. I think that that's a reasonable thing. It's true for the rest of government, it should be true here. That's the narrow issue. But the bigger issue, I think, is asking from first principles, what does the Fed actually do in 2025? So, we have an extremely vibrant and complicated and interconnected $130 trillion global economy. It's moving at the speed of light. The Fed gets together once a month, tries to divine what monetary policy, what the money supply should look like, based on data that is often incorrect. We see that in the BLS data, we see that in the GDP prints, we see it in all of the inputs. And so we've turned over responsibility to a handful of humans using bad inputs. So I think the real question is, there are certain parts of what the Fed does that they can continue to do, and I think everybody would probably say it's an okay thing. So just to be very specific here so I get this right, could they be a lender of last resort? Personally, in my opinion, no. I think that Treasury does a better job. I think we saw Treasury do that during GFC, and I think that Treasury has a better mechanism to get the American taxpayer a win than the Fed does. Do they actually create monetary policy and price stability? I would say that the capital markets and the free markets actually do a better job of that. They define much more what the spread is. I think SOFR is a much better rate mechanism than the fed funds rate at this point. Do they do banking supervision and regulation? Yeah, they probably do a reasonably good job of that. That is probably something that most people would say they could continue to do. Do they do a good job as a payment system and a clearinghouse? Again, probably something that's pretty uncontroversial that they could continue to do. So, I guess my point is, Jason, the bigger picture is, the two things that are the most dynamic, they are the worst at doing. And so I would actually question whether that responsibility should sit with a handful of humans looking at faulty month-old data. So for example, today, the Commerce Department did something that was pretty exceptional. They said, "We're gonna start publishing data to the blockchain." All the GDP data is now going into a blockchain. So can you imagine what this starts? I think, and we've talked about this before, I think employment data from all these employment companies and payroll companies should get published this way, GDP data can get published this way, all kinds of economic measures scrubbed for anonymity should get published so that you can have pricing oracles that actually tell you what's happening in real time. And the markets will then react and set rates in real time. Those are the two most sensitive things that I think the Fed does that creates controversy-

   3. JCJason Calacanis16:58

      Okay.

   4. DFDavid Friedberg16:58

      ... that they shouldn't be doing anymore.

   5. JCJason Calacanis17:00

      Friburg, uh, I guess the question that Chamath didn't get to there when, when he zoomed up was, do you have concerns about the independence of the Fed? It's designed to be a very rigorously independent group.

   6. DFDavid Friedberg17:14

      No, I said they're not independent, they're partisan.

   7. JCJason Calacanis17:16

      I, I know that, but w- the, the, the question I had also for you, do you have concerns about, you know, whether it's President AOC in four years or eight years, or President Shapiro moving these things around and firing people like this, and the weaponization of the government against government workers, as some people are claiming. That, that was the sort of other piece-

   8. DFDavid Friedberg17:40

      Why do you have to use the word weaponization? Like, when you appoint somebody to the Commerce Department or to Treasury, is that-

   9. JCJason Calacanis17:45

      Sure.

   10. DFDavid Friedberg17:45

       ... weaponizing that? No.

   11. JCJason Calacanis17:46

       The, the concern-

   12. DFDavid Friedberg17:47

       It's a political appointee.

   13. JCJason Calacanis17:48

       Yeah, no, no, the concern people have is that this, um, that the head of FHFA is the one who is researching, you know, her mortgages and that that felt like lawfare to people. You know, the same way people accuse lawfare aga- of, you know-

   14. DFDavid Friedberg18:08

       First of all, Bill-

   15. JCJason Calacanis18:09

       ... Letitia James against Trump, right? So, yeah.

   16. DFDavid Friedberg18:11

       Okay. First of all, Bill Pulte's an exceptional American. He's a brilliant businessman. He's actually probably better...... served sitting at the Fed in some role, quite honestly, because he has been in the rate markets and the mortgage markets his entire life. So if Bill Pulte was able to get this in a, in a reasonable, fair, and transparent way, which I have no doubt that he would have done anything other than that, the data is what the data is. And I don't know, I'll let somebody else litigate whether that's important. The more important issue for me is just acknowledging these people are political appointees, these are partisan employees, and this idea that the Fed is independent is maybe something that we should revisit, because most of the things that they do can be done by Treasury and other people better.

   17. JCJason Calacanis19:00

       Okay. Freberg, what are your thoughts?

   18. The members of the Board of Governors at the Fed, they're appointed to 14-year terms specifically to try and insulate them from the political cycles that occur. I think that that system has meant to kind of create a bit more resiliency to the institution and so it can operate without necessarily being affected by the, you know, intra-election year kind of whims of, of politics. It seems like there's a lot of declarations to basically reduce the overnight rates, the short end of the curve, so the short-term rates come down, interest rates come down. The problem is, as a lot of economists have talked about and as we've seen in the bond market, is that that could really push up the long end of the curve. Because if you suddenly start to flood the market with capital in the short term by dropping rates today, so everyone will borrow, everyone will buy, it'll stimulate the economy, it'll stimulate growth, but it'll also stimulate inflation and it'll stimulate government spending, then the ability for the government to make its debt payments and the cost of the inflation bears out in the long range, so you end up having 30-year rates spike up. So there's a sensitivity that's, like, worth noting here, that it's not just, hey, the Fed is in control of the money supply, but there's a consequence to the effect the money supply will have ultimately on the cost of borrowing over the long term and the US ability to service its debt. And so I do think it's very important to have an independent board of economists that makes those trade-off assessments, that looks at short-term inflation, uh, short-term money supply, short-term demand for capital, elasticity of pricing in the market, and also has considerations for the long-term cost of capital. So this independence notion, I think, is very critical. The, the 14-year appointment term, to me, solves this problem. We have the same issue in the Supreme Court, where they serve till the end of their life. And so I do think that the consideration here isn't just about taking action to fire a, a, a member of the board, but perhaps we should go back and re-litigate whether the 14-year term is appropriate, and whether it be much more specific about the rights that we want to impart on the executive branch of the government to be in charge of the money supply.

   19. Any concerns about the... And we'll go to you next, Sachs. You'll, you'll, you'll bat clean up. But any concerns, Freberg, on how this is going down? That you have another governing agency looking into the Fed's governors and then looking for ways to remove them if they're in the other political party? Do you have concerns about that at all? And this is, by the way, a concern-

   20. Yeah.

   21. ... that Republicans have also said, "Hey, this feels like lawfare. This feels like weaponization."

   22. Yeah, I mean, obviously, I, I just think that once people are appointed, if there's reasons that they're breaking the law, then they should be investigated. Everyone in government should be all the time. So there should be ethics and there should be rules and they should be investigated. But I don't think that we should use that as a mechanism to get around the 14-year term.

   23. Got it.

   24. The 14-year term is the term. And if we want to affect that, we should change the 14-year term and actually get Congress to do its job, which both sides may agree on, to reduce the term.

   25. Okay. Sachs, what's your take on what we're seeing here? You were obviously quite animated about lawfare in the previous administration against Trump. What do you think about what's going down here?

   26. CPChamath Palihapitiya22:26

       Well, this isn't lawfare. This is the president pushing back on, I think, a Fed that's been overly political. And just to agree with Chamath on something, I have to kind of push back on this shibboleth that the Fed is strictly apolitical. All the Fed governors are politically savvy and connected people, and they understand the politics of this. And the best example is Powell himself. So let's just go back through the history. So in the summer of 2021, we got that 5% shock inflation print, and it was Powell who played along with Biden and Yellen that this was transitory. And that transitory narrative they used to basically avoid any interest rate cuts or any change of policy for six months. Now, what was the importance of that timing? Well, Powell was re-nominated for a second term by Biden on November 22nd, 2021. So in other words, he went along with this whole transitory narrative to get re-nominated by Biden, and then a week later, on November 30th, he said it was time to retire the word transitory, and he then essentially announced that there'd be a policy shift, and then they didn't raise interest rates for another several months.

   27. DFDavid Friedberg23:35

       And it was a historic tightening cycle, meaning the shock to the economy was incredible because the rate and the velocity of which he raised rates was unprecedented. So the real question is, had he been truthful going into a nomination process and done it much sooner, would the economy have been better off? And the answer's probably.

   28. CPChamath Palihapitiya23:52

       Yeah, for sure, because in that second half of 2021, we had a bubble. We had an asset bubble. We saw it in startups, we saw it in real estate. And that bubble was caused not just by artificially low rates, but also by the continued QE buying. I think Stan Druckenmiller has noted that, that the Fed, I think they bought something like 180 billion of government bonds and added them to the Fed's balance sheet. So not only were they resisting rate increases during that roughly six-month period, they were continuing a QE policy designed to stimulate the economy...... even though we were clearly in a new type of inflationary period.

   29. DFDavid Friedberg24:28

       But do you think that was incompetence, or do you think that was political sacks?

   30. CPChamath Palihapitiya24:32

       It was obviously political because think about it-
4. 36:45 – 51:37

   US-Intel Deal: Sustainability, China comparison, could deals like this save Social Security?

   1. JCJason Calacanis36:45

      The US government just took a 10% stake in Intel last Friday. Trump announced that the US government would acquire 10% of the chip maker. As we all know, there was this CHIPS Act to try to onshore chip manufacturing. There's a lot of chip companies that are US, but they don't actually make the chips here in the United States. Most of the chips in the world are made in Taiwan, obviously by TSMC. And so these grants were created, nine billion of them were grants, there were also tens of billions in loans. A- and that was the CHIPS Act, we talked about it here many times two years ago. These grants have been allocated, they were not paid out, so Trump and, um, Luttnik came in and said, "Hey, instead of giving this money for free, we would like to get something for it." And they are going to get non-voting shares. There's no golden share like in sh- China where, you know, you get, uh, board representation and you can kind of control the board. Uh, this will be passive, uh, no board seats, no governance rights. Luttnik was very clear about that on CNBC. This all happened three weeks after Trump called, uh, Intel's CEO, or called for Intel's CEO to resign over his ties to China. President Trump said, quote, "The CEO of Intel is highly conflicted and must resign immediately. There is no other solution to this problem." But they found a solution, which was (laughs) to take 10% of the company. Let's stop there. This has been pretty controversial, I think, Chamath, in terms of people wondering if this is gonna become a playbook. Do you have any concerns with swapping the grant to getting equity? And do you think this should become a playbook where the US government starts to own percentages of companies in exchange for loans and grants, as opposed to giving loans and grants?

   2. DFDavid Friedberg38:38

      Yeah, I think some historical context is important. In 2006, Hu Jintao gave this speech, and in that speech he talked about, you know, six or seven boxes. And the way that he described these boxes was that these are the critical parts of the Chinese economy that they must persevere and win over the next 20 or 30 years to ensure safety, security, and prosperity for the Chinese people. And in those boxes were things like semiconductors, were things like rare earths, were things like pharmaceutical APIs, and what it described was a willingness by state governments in China, as well as the federal government in China, to use the balance sheet to support those companies. Incrementally, Jason, as you said correctly, they would also ask for a golden vote. In return, what did they do? I can talk to you about rare earths as one very specific example through my involvement with MP and, and now with Intellus. The Chinese have an extremely sophisticated market-driven approach to how they help when they are on the cap table. They'll price shape, they'll price dump, they will change the spot markets, they'll perturb the ability for other people to compete. And what that does is it locks the capital markets because it says, "We can't compete with these companies, so we're not gonna finance an alternative."

   3. JCJason Calacanis40:04

      Mm.

   4. DFDavid Friedberg40:04

      That has long-term strategic negative consequences for everybody that isn't those Chinese companies. So let me just pause there. Now, look at the United States. What the United States has always done is we have been the lender of last resort, but we've never participated in the upside that being that lender of last resort has given us as the American taxpayer. So for example, in 2008, you know, we created TARP, where we bailed out all kinds of toxic assets. What did we get in return for that? Nothing. We barely got our money back. When Warren Buffett stepped in to backstop Goldman Sachs, he was able to get the United States government to help him backstop that. Who got all the gains? Buffett and shareholders of Berkshire Hathaway. Who put up more money? The United States taxpayer. Those are but two examples. I think that this approach is the much better approach, which is to say we can do exactly what China did with a couple of tweaks. It's way better, as you said, Jason, to just put in the equity, own something on the balance sheet of the United States, not have a golden vote, have complete transparency, allow the capital markets to finance these businesses, but give them a chance to compete all around the world, and then the US taxpayer gets some of the upside. That is awesome. What we have done up until now, until what Luttnik has done and what the president has done, is the opposite, which is we have given money away in times of duress with absolutely no upside, and I think it has to change.

   5. JCJason Calacanis41:38

      Sachs, what are your thoughts here on, uh, this model? It, uh, is something to think about when it comes to, as Chamath correctly points out, China will subsidize their champions. It's happening right now with BYD, the car company. Allegedly all these car companies are dumping cars all around the world, and supposedly they're being underwritten by the Chinese government explicitly to do this, to take away American, German, European auto manufacturers' ability to compete. So what are your thoughts on this? Do you want to see it continue or do you think this is kind of a one-off specialized situation?

   6. CPChamath Palihapitiya42:16

      Well, I agree with Chamath that if you're gonna give large amounts of money to chip manufacturers, it's better to get equity for that than for it to be a freebie. And I think there's two reasons for it. One is it's a better deal for taxpayers. We might be able to recoup the money and even make a return on it. But the other is the incentive for companies, right? We don't really want our companies going to the federal government to try and get bailed out.And at least if they have to give up equity or warrants, things like that, there's a cost to it. We would rather that these companies get financed privately. But that didn't happen here, Intel received something like, you know, over $8 billion under the CHIPS Act because we let the free market do its thing and it resulted in chip manufacturing being offshored. And it all ended up on the island of Taiwan, and that's a huge national security issue for the United States because now our whole supply chain for this critical resource is single threaded on Taiwan. So, we made the decision as a country to onshore chip manufacturing. That's what the CHIP Act was about. It had large bipartisan support. So there's this priority to bring chip manufacturing back on shore, and the question is how you do it. And I think that if you are gonna hand out billions of dollars to these companies, you're better off at least, again, getting something for it, having the taxpayers have some upside in it, allowing the government to recoup, and creating the right incentive for these companies so they're not constantly seeking bailouts. So, I think this is a big improvement over where the CHIPS Act started. But to answer your question, I mean would I be looking for lots more opportunities to do this, I think there has to be a national security interest or something of that kind, and I think it has to be a situation where for whatever reason the free market has failed to deliver on that priority.

   7. JCJason Calacanis44:04

      Friburg, looks like we're gonna have consensus here that we all agree it's better to get (laughs) some upside or equity for the American taxpayers as opposed to giving free money. There are, have been some pushback as to the style in which this was done, the, uh, bullying of the (laughs) CEO and then three weeks later a deal. So, thoughts on that criticism of the administration.

   8. Well, just taking a step back, I think, um, it is an indication that the free market has failed in some way if the government is stepping in to either provide unique regulatory unlock, or the government is providing capital, or the government is basically stepping in to be the biggest or primary buyer of a private company's products or services. Those are the three kind of reasons why I think these scenarios are emerging. So, regulatory unlock that's unique, providing capital, or being a buyer. All three, I think, indicate that the free market has failed and the government is playing too big a role in our economy. So, I think that that's, uh, just the unfortunate circumstance that we find ourselves in. And we can recount, as we have many times here before, why the government has become so big, why it is too big, and why it is having such an outsized influence on job creation, on economic growth, on stimulus, on market strategy, et cetera. And I, and I hear Saxe's point that there are very specific circumstances where we have to fix free market action, and I totally get that. But I think there's these bigger, broader kind of things that are happening, which is the government's also the biggest buyer of products for a lot of companies. And the government's providing capital either through contracts or procurement or some structure that is stimulating a very large percentage of the economy. So I do think there is a notion that some have shared, which I don't fully disagree with, which is that there is some degree of socialism underway, that the government is providing such a large role in the economy and replacing so much of the free market. And we can argue why that is and have different points of view on why that is, but that de facto state is an unfortunate state. Now, I think the question is under these circumstances, should the government be getting equity? I think the answer is yes. I agree with that. And if the government is getting equity, the key question I wanna ask is where does it go? There's three places that equity could land. It could just sit on the balance sheet of the federal government, in which case there's no real goals or oversight of the investments, there's no overarching strategy on what to do with that equity over time. How do we, how does the American taxpayer benefit the most? When does the government sell? How does the government choose to sell? Who makes that decision? So the second is then, well, you form a new sovereign wealth fund to hold all these equity assets. You form a new sovereign wealth fund, then you have a whole group of people that are gonna be hired to oversee those investments, they're gonna make good decisions hopefully, they're gonna be good investors, good fiduciaries on behalf of the American taxpayer. But I would argue that what we should be doing instead, and as I've mentioned in the past, is use what we already have, which is the OASI, the Old Age and Survivors Insurance Fund, which is the trust fund behind Social Security. That's actually where Social Security's assets lie. Today, the only thing in that trust fund is US Treasuries, and they're actually a special form of Treasuries. So if you've paid into Social Security, you're effectively loaning the federal government your money, and then they're supposed to pay you back your retirement benefits in the future. Rather than just loan the federal government money, those assets should be held and will become the largest sovereign wealth fund to make strategic investments and grow those assets over time on behalf of those American taxpayers as retirees. So I would argue that the right solution r- of the three options, form a sovereign wealth fund, sit on the balance sheet with no strategy, instead would be to have that sovereign wealth fund sit within OASI. That would require statutory changes because the, uh, Social Security trust funds were set up in the 1930s and Congress passed an act that said, you know, you kinda gotta hold only Treasuries. So we would have to get Congress to kind of revisit that concept. But I do think that if we are gonna be in this state where the federal government's playing this outsized role in the market, we should take equity, but we should be very strategic about where that equity goes. And I think the best place to put it is in the, uh, Social Security trust funds. And it can kill two birds with one stone. So rather than create new holes in the government, meaning new spending, new debt, creation of, of new vehicles for us to spend capital, I think we should fill holes. And one of the holes we need to fill is Social Security, which is gonna go bankrupt sometime between 2030 and 2033. I would encourage us to kind of strategically think about evolving this system. I think it's a major moment, by the way, because then as I've mentioned in the past, in addition to setting up an equity vehicle, uh, based on these deals, the Social Security trust fund could also be buying public equities on behalf of the, the retirees, which would, uh, have a significant compounding effect for them. J Cal, what do you think?

   9. So the s- I love- love the substance of it. We talked about it actually back in the day here. There were a series of loans that Obama set up for, uh, Tesla, Solyndra, and, um, Fisker. A bunch of those companies blew out, didn't pay back their loans. Elon paid back his ahead of time, but the government had no upside-

   10. DFDavid Friedberg49:06

       With interest.

   11. JCJason Calacanis49:06

       ... to use... With interest, of course. Yes. And, um, imagine if they just owned but- warrants for 1% of Tesla or something, it could have been incredible. And I'm sure Tesla would have still taken that deal. It wouldn't have been crazy. The thing I don't like about this is the bullying of the CEO of Intel. This is giving a lot of, you know, this is a lot of my challenge with Trump is, or sorry, President Trump, is sometimes the style in which he does something detracts from the actual substance of it. The substance of this is great, but we are now getting into a situation where it feels like a narco-capitalism, like this is crazy that the president goes and bullies the CEO of a company and then says they're going to be deported and then settles a deal like this. The optics look terrible, and it would have just been much better to say, "Instead of giving you a grant, we'd like the option to have equity. What would you prefer?" And then have a decent negotiation where you don't have to threaten to kick the guy out of the country.

   12. Do you think maybe that happened, J Cal, and it just wasn't public, and this was like a lot of things, a public negotiating strategy?

   13. Yeah, I mean, I think probably that is what Trump does. He beats somebody up and then says they're incredible. I just think it detracts from the substance and the good work when you do those techniques, because it's now very easy for-

   14. Do you think we should... Yeah. Do you think we should have a sovereign wealth fund?

   15. Not when we're in debt.

   16. CPChamath Palihapitiya50:28

       The president addressed what happened. Tom Cotton, you know, senator, wrote a letter attacking Intel and questioning the CEO, Libu Dan's past, and the president posted a truth in response to that, but he hadn't met Libu before. And so the CEO of Intel went in there, got an audience, and told his side of the story, which was that, yes, he invested in China, but when everybody was doing it, it wasn't controversial at the time. And I don't... I think he hasn't been involved in China for like six years or something like that. Right. So he cleared up the situation and-

   17. JCJason Calacanis51:02

       Yeah, so it was f-

   18. CPChamath Palihapitiya51:02

       ... that's how the conversation happened. Yeah, but look, I don't-

   19. JCJason Calacanis51:05

       Fire aim ready (laughs) is like the thing I-

   20. CPChamath Palihapitiya51:08

       I thinks-

   21. JCJason Calacanis51:08

       ... I don't like about when Trump does these things. So yes, I-

   22. CPChamath Palihapitiya51:10

       Well, I think the American people like when Trump gets results.

   23. JCJason Calacanis51:14

       Me too. Absolutely.

   24. CPChamath Palihapitiya51:15

       And you gotta, you gotta break some eggs to make an omelet. And the question is, is he getting good results? And I think-

   25. JCJason Calacanis51:21

       Yeah.

   26. CPChamath Palihapitiya51:21

       ... the American people are happier getting something in exchange for billions of dollars-

   27. DFDavid Friedberg51:26

       100%.

   28. CPChamath Palihapitiya51:26

       ... as opposed to just being handed out.

   29. DFDavid Friedberg51:28

       Also, can I say something, Jason?

   30. JCJason Calacanis51:29

       Exactly my point.
5. 51:37 – 58:41

   US Sovereign Wealth Fund

   1. DFDavid Friedberg51:37

      you mentioned that you don't think that there should be a sovereign wealth fund until we're out of debt.

   2. JCJason Calacanis51:40

      I didn't finish my thought on that. So that's an interesting question. If we had a sovereign wealth fund and we're 36 or $37 trillion in debt, I'm with Lutnick's position that like maybe we pay down that debt and then we can think about that. But sovereign wealth funds usually come from some natural resource, Norway's, you know, UAE, uh, you know, Saudis. We don't have some natural resource that is throwing off all this money and, and... Yeah. So I don't know how we get one. What do you think?

   3. DFDavid Friedberg52:07

      I'll tell you the other side.

   4. JCJason Calacanis52:08

      Please.

   5. DFDavid Friedberg52:08

      I think that we should start a sovereign wealth fund right now. And who should fund it? Well, the great news is that these Trump tariff deals come with huge amounts of capital that these other countries have committed to spending inside the United States. For example, there is $600 billion now that Japan has to spend inside the United States. There's $300 billion that Korea has to spend. There's another several hundred billion that Europe has to spend. If you add that all up, we've exceeded a trillion dollars of inbound capital on the investment side. And in those things, we get 90% of the upside, if you remember. So I think that a lot of that capital should be the seed capital for a sovereign wealth fund. You're right, Jason, that we can then choose to direct some of those gains to things like debt reduction, free brokers' right, we could direct some of those gains to fund Social Security. I think we should set that up right now and it can be additive. So for example, there's the trillion dollars that these countries are investing in the US, 90/10 carry, it's unbelievable. All of that should go into a balance sheet that the American taxpayer can benefit from, number one. Two, when we do these programs like we did with MP and we've done with Intel, they're really smart. We need it anyways for strategic reasons, but now we get the backend participation of the equity. That should go into a sovereign wealth fund. All these things make a ton of sense, I think.

   6. JCJason Calacanis53:30

      Yeah. How, how-

   7. DFDavid Friedberg53:30

      More of them is what I would say.

   8. JCJason Calacanis53:32

      The concern I have is any time we create a new income stream at the federal government or we have some sort of growing asset that you mark up on the book, someone tends to invest ahead of the curve on that, meaning someone takes that and they're like, "Oh, great, I can spend more now." I mean, we even saw this in California, you know, Gavin Newsom and the budget skyrocketed as the income went up. And rather than take the surplus and book it for a rainy day, they went and spent ahead of it. And then all of a sudden they had a huge deficit. And I do worry that the tendency in the federal government, which is what happened with Social Security, is it's like, okay, all these people are providing this income every year to the federal government, which they're, they're supposed to be paying into their Social Security trust fund, but then what happened is we raided the coffers. We took all that money and we started spending it on random new programs. And the problem is by giving the government more assets, by giving the government more income, we set ourselves up for a circumstance where the federal government, the Congress says, "Great, we got more money to spend. Let's do X, Y, and Z program."

   9. Yolo.

   10. "And let's do this. Great. Let's build a high-speed train. Let's do this." These are all good for American people. And all of a sudden, you know, you don't actually solve any real problems. And this is why my, my argument is like, we should use it to fill the hole that we have, for example, in Social Security, and that needs to become an asset that's strictly used as an offset on Social Security, because if you don't put it in that box, it just becomes another spending mechanism.

   11. CPChamath Palihapitiya54:52

       I don't like the sound of taking people's Social Security savings, or the money that's earmarked for Social Security and having the government act as a venture capitalist and start investing willy-nilly, uh, trying to get us out of this hole.

   12. JCJason Calacanis55:04

       Mm-hmm.

   13. CPChamath Palihapitiya55:04

       I mean, I don't think that's gonna go very well. But what I think makes sense is that anytime-

   14. JCJason Calacanis55:07

       Well, maybe it's just a... It's an offset, Sax. I mean, maybe it's just, you know-

   15. CPChamath Palihapitiya55:10

       Well-

   16. JCJason Calacanis55:10

       ... it's just incremental, where it goes liquid, it can be used to pay down the Social Security treasury obligations, is my point.

   17. CPChamath Palihapitiya55:15

       Yeah. Look, I think we should just be selective about this.

   18. JCJason Calacanis55:18

       Right.

   19. CPChamath Palihapitiya55:18

       I think it makes sense in situations where the government was gonna do a bailout anyway, because there's a national security priority or some other kind of priority that the government's determined we have to do. You want to get equity for it. It doesn't make sense to, you know, give, I mean, frankly-

   20. JCJason Calacanis55:33

       Absolutely.

   21. CPChamath Palihapitiya55:33

       ... even Solyndra and-

   22. JCJason Calacanis55:34

       But where does that, where does that equity go?

   23. CPChamath Palihapitiya55:36

       ... and Tesla-

   24. JCJason Calacanis55:36

       Where does that equity go, is-

   25. CPChamath Palihapitiya55:36

       Well, I-

   26. JCJason Calacanis55:37

       ... is the key question.

   27. CPChamath Palihapitiya55:37

       ... I think it's... I think that would be held by the sovereign-

   28. JCJason Calacanis55:39

       And how do you keep everyone's... And how do you keep everyone's grubby hands off of it? Right? So like how do we-

   29. CPChamath Palihapitiya55:42

       Well-

   30. JCJason Calacanis55:42

       ... use it for, as an asset, rather than have it be another-
6. 58:41 – 1:12:12

   Why corporate bankruptcies are trending up in 2025

   1. JCJason Calacanis58:41

      talk about corporate bankruptcies. According to an S&P global report, so far in 2025, we've seen the most corporate bankruptcy filings since 2010. That was after the great financial crisis, you remember. Uh, or some of you might have been too young. So, uh, corporate bankruptcies, according to the S&P, are public companies with debt of at least $2 million, and private companies with assets or liabilities of at least $10 million. I'm not sure why the public companies is less than the private. It didn't make sense to me, but there must be a reason. Uh, these are also called large bankruptcies. Here's a chart showing you corporate bankruptcies since 2008. The blue bar is through July, gray bar is the full year. So, uh, we're looking at a partial year here, obviously, in 2025. We're at 446 large bankruptcies seven months into 2025, which would put us on track for the most since 2010. And, um, yeah, nothing close to GFC numbers, but, uh, you know, it's not trending well. And if you look at corporate bankruptcies broken down by month since 2020, you can see, uh, that bankruptcies are increasing after the massive rate hike cycle in 2022 and 2023, so obviously rates have something to do with this. What are your thoughts, Chamath, on what we're seeing here? It's not, like, super dramatic, but it's definitely, uh, notable.

   2. DFDavid Friedberg1:00:02

      Yeah, it's notable, but I think it's notable not for the reasons that the mainstream media tries to describe it in. I read these articles, and I was a little bit caught off guard, because initially what it said was the tariffs were causing this, and I was like, "Large companies don't go bankrupt 30, 60 days."

   3. JCJason Calacanis1:00:22

      Yeah, that doesn't make sense.

   4. DFDavid Friedberg1:00:23

      Because of the tariff issues.

   5. JCJason Calacanis1:00:23

      It doesn't add up.

   6. DFDavid Friedberg1:00:24

      This makes no sense. But the narrative was very strong, basically trying to paint the Trump administration as having caused this. So, I just started to look into this, and couple of interesting things to note that I... the conclusions that I came to. I think the most interesting is that there were a lot fewer bankruptcies over the last four or five years than there should have been, and I think that there are two reasons. The first reason is that you had rates-... artificially suppressed at zero for an incredibly long amount of time. And so you had all kinds of companies able to raise enormous, enormous amounts of capital that they probably shouldn't have been able to, or at a minimum, should have done it at much higher rates, which weren't really there because the core rate was at zero. So what that means is that many companies were able to fill the reservoir of money, and then when the core structural business started to fail, they had a lot more oxygen in the tank to survive a lot longer. So I think a lot of what you're seeing, and if you look, Jason, at some of these companies like Joann's Fabrics and Party City, these were businesses that were upside down for years.

   7. JCJason Calacanis1:01:42

      Yep. And a number of these, right, were PE buyouts that, you know, their strategy-

   8. DFDavid Friedberg1:01:47

      Yeah.

   9. JCJason Calacanis1:01:47

      ... is to saddle them up with a bunch of debt too.

   10. DFDavid Friedberg1:01:49

       Yeah.

   11. JCJason Calacanis1:01:49

       So that, that speaks to what you're saying.

   12. DFDavid Friedberg1:01:51

       So I think, I think the reason why bankruptcies are up right now is because the reservoir of free money, the money printer that printed, frankly since 2010 up until about 2021 because, you know, we still gave an enormous amount of money in COVID, is finally starting to run out. That's number one. But the second is that we actually haven't had a process of creative destruction in American company formation for a while. Now-

   13. JCJason Calacanis1:02:16

       Yeah, probably since GFC, GFC, right?

   14. DFDavid Friedberg1:02:19

       Yes.

   15. JCJason Calacanis1:02:19

       Because that's a similar- a similar thing happened at that time too, Chamath, right? We had all these backed up companies that probably should have died and it kind of-

   16. DFDavid Friedberg1:02:25

       But, well, what I think- well, I- I think what happened was like, you know, startups ran out of money, there's certain parts of co- uh, of industries that had some trouble. But by and large, there was no transformational or catalyzing M&A that could have actually happened. And that in part was a structural issue because of the way the federal bureaucracy reacted to it, not just in the United States, to be fair, but around the world. And I think when you relax those constraints, what you can start to see are companies identify assets that they want inside of other businesses, be much more aggressive in getting them, businesses that are floundering, being able to see that they're about to run out of money and have the confidence to try to do an M&A deal to survive. You need all of these things to work in lockstep for a market to be efficient. The market was incredibly inefficient since 2010. Artificially suppressed rates, a regulatory regime that, you know, disallowed any form of M&A and consolidation. Now that those constraints are lifted, you're going to see a lot of this creative destruction work its way through the economy. That's one big trend. The other big trend, and I think we saw this in... Nick, can you please find the tweet from Delian where he talked about the Chipotle competitor that TK launched? I just want to point to this because I think this is another wave of competition that's going to put a bunch of categories of business under duress, which is, you know, our friend, Travis Kalanick, who's the founder of City-

   17. JCJason Calacanis1:03:49

       CloudKitchens.

   18. DFDavid Friedberg1:03:50

       Is... What is it called? City Logistics? Is that what it's called?

   19. JCJason Calacanis1:03:51

       Uh, CloudKitchens is how it's referred to.

   20. DFDavid Friedberg1:03:52

       CloudKitchens?

   21. JCJason Calacanis1:03:53

       Yeah.

   22. DFDavid Friedberg1:03:53

       Okay. He launched a Chipotle competitor, and it's apparently totally kick ass and way better than Chipotle. And it just starts to show that there's an- a wave of competition that's also coming from completely different companies you never would have expected going after a bunch of these businesses. So if you put these two things together, I think you're going to see more, not less bankruptcies, but I think the outcome is probably positive in that you clean out a bunch of businesses that were taking up time and resources. You should allocate a lot of the human capital that are in those companies to different businesses, and I think we'll be better off.

   23. JCJason Calacanis1:04:30

       Freedberg, uh, Matt, it's a long list of companies, but I just want to know which one hit you harder, Forever 21 or Hooters? Which one of those bankruptcies hit harder for you? We're trying to game it out here. Um, I think that we should buy-

   24. DFDavid Friedberg1:04:44

       But by the way, Hooters-

   25. JCJason Calacanis1:04:45

       ... Hooters. I mean, we should buy Hooters, Chamath.

   26. DFDavid Friedberg1:04:47

       Guys-

   27. JCJason Calacanis1:04:47

       And then we should have Sydney Sweeney as our CEO.

   28. DFDavid Friedberg1:04:49

       ... if you have a teenage daughter- see, if you have a teenage daughter, what I'll tell you is Forever 21 was shit. That was going to go to zero anyways. Like, you need to be long Brandy Melville, you need to be long... Oh, God, what is this other one that's like the- the clothes are so-

   29. JCJason Calacanis1:05:03

       Aloe?

   30. DFDavid Friedberg1:05:03

       No.
7. 1:12:12 – 1:18:35

   OpenAI's novel LLM-based approach to longevity research

   1. JCJason Calacanis1:12:12

      Friedberg tell us about Yamanaka factors.

   2. DFDavid Friedberg1:12:15

      Yeah. How long can I make this bulldog last? Can I make him last 40 years? That's what I got left.

   3. JCJason Calacanis1:12:21

      Well, in mice they're using these Yamanaka factors to make the mice age the equivalent of, like, 250 years now. It's really incredible. And there are human clinical trials starting. So the Yamanaka factor, as you guys will recall, are the four proteins that were identified that basically can turn any cell back into a stem cell, and, you know, we'll call those four proteins O, S, K, and M. When these four proteins are applied to a cell, it basically starts to trigger a bunch of gene expression that then turns that cell back into a stem cell, and so that cell becomes youthful again and you can then turn it into any other cell. Later, there was research done where they took those four Yamanaka factors...... and they applied a low dose of them to a cell. And rather than have the cell turn all the way back into a stem cell, that cell effectively became young again. It started to repair and heal itself, repair its DNA, repair its gene expression networks, and the cell returned back to its original state. So the equivalent to think about this in a body is now you've got skin that loses its wrinkles, eye cells that start to see better, brain that starts to work better, muscles that start to work better. And so that is rejuvenation. And so the search has been on on how do we turn this incredible discovery of using these four proteins into therapeutics that we can then apply and humans can take that rejuvenates cells, reverse aging, and create youthfulness, which has been done by the way in mice, and then the mice end up living for the equivalent of hundreds of years, and there's incredible phenotyping, physical characteristics that you can see. So this week it was announced amazingly by OpenAI that they developed a model that they call GPT-4B Micro. So what they did is they took the, the GPT-4 model and they reduced it down so that they just had like, you know, typical good general knowledge, language capabilities and so on, and then they added on a bunch of training data. And the training data that they added on was mostly protein sequences and some biological text data and then they also said tokenized 3D structure data. So that is describing a 3D structure with words or with some sort of textual form. And so this was kind of a, a really interesting dataset that they then built into the model, and then they used this to say, okay, what else can we do with the O, S, K, and M to make those proteins more effective? So remember, a protein is a series of amino acids. That O protein that I mentioned is 360 amino acids long. There's 20 different amino acids. So if you were to change just one of those amino acids and perturb them a little bit, you have 20 to the 360th power. That's how many changes you could make to just that O protein to just to try and perturb it. That's more than there are atoms in the universe. So this is a very, like, numerically difficult problem to tackle if you're gonna try and make more efficient proteins. So the goal was like how do you make a new protein by changing the amino acid sequence? And so they asked that question of this trained LLM, and they got a bunch of results back. And remember, each amino acid, by the way, is encoded by three letters of DNA. So you can easily make new proteins by creating DNA, sticking it in a bacteria or yeast, and it'll make the protein you want it to make. And so you can run all these different DNA sequences, try them out, and see what happens with that protein. So that's exactly what they did. They did it in partnership with a group called Retro Biosciences. They had the LLM or the 4B Micro model come up with all these ideas on how O, S, K, and M could become more effective. And why do they want to make it more effective? Well, today, less than 0.1% of the cells that you apply those proteins to actually convert, actually go through the rejuvenation. So we have a long way to go to discover new proteins or getting these proteins to be more efficient. So rather than doing 3D modeling and all the other stuff that other people might be doing, this LLM basically predicted a bunch of proteins and said here's the amino acid sequence and here is the DNA you need to make those proteins. Retro Bio made them, they tested them, and then they got these incredible results. They actually got these new proteins to be 50 times more effective than the O, S, K, and M proteins in basically rejuvenation or cellular reset. Within seven days, they got more than 30% of the cells to show the, the markers, and by day 12, 85% of them expressed critical stem cell markers. So this really showed that these new proteins that this model came up with worked. The results really are amazing, but I think couple of things to take away from this. Number one, we have a really incredible path we're on to reversing aging using proteins. We have identified so many new proteins just with this experiment. There are multiple other companies like Altos and others that are investing heavily in this area. We're gonna develop therapeutics around these proteins, and they're gonna have an incredible ability to reset ourselves, make them young again, fix all the DNA damage, fix all the gene expression damage that causes aging. The functional driver of aging is that gene expression networks are messed up in our cells, and it turns out that this sort of therapy can reset that. So that's number one. It's like, we should be very optimistic about the path we're on in reversing aging. Number two is, like, it's incredible what these LLMs can do. This kind of follows that EVO2 model story I mentioned a few weeks ago that the Arc Institute put out where they just took DNA data, the model didn't know what the DNA data represented, and they found that if you fed DNA into it, they'll tell you if there's an error in it. And they identified all these variants, pathogenic variants in DNA, in genes, that, you know, they did- had no knowledge of, it just identified patterns. Some of the stuff in, in protein structure, protein shape, protein function may actually be these kind of emergent phenomena, and we can simply reduce them down to letters of DNA, and these LLMs can come up with new ones and write new ideas and they're working. So there's this whole new area that we don't need to build completely new neural networks that are using graph nets or something else to try and develop, um, predictive models and protein structure, which is gonna open up new areas for therapeutic drugs. But it's like-

Episode duration: 1:31:33