Trump verdict, COVID Cover-up, Crypto Corner, Salesforce drops 20%, AI correction?

1. 0:00 – 2:15

   Bestie Intros: Jason's first show for his new production company

   1. JCJason Calacanis0:00

      All right, everybody. As you know, there was a big verdict that came out today in the Trump trial in New York City. However, it came right after we were taping. So enjoy this episode, and then at the end, we'll go around the horn and get quick reaction from each of the besties on what they think of the Trump guilty verdict in the New York hush money trial. And a little update on the market close and tech stocks tanking in after-hours trading. Stick with us. Man, whew, what a week I've had.

   2. CPChamath Palihapitiya0:32

      Oh, you have an intro? Oh, I smell an intro. (laughs)

   3. DSDavid Sacks0:35

      (laughs)

   4. CPChamath Palihapitiya0:35

      Tell us, J Pal, what was your week like?

   5. DSDavid Sacks0:36

      What kind of weekend you had?

   6. CPChamath Palihapitiya0:37

      What kind of weekend you had?

   7. JCJason Calacanis0:38

      Uh, incredible. You know, I got, uh... Yeah, you know, I've always been a fan of Howard Stern. And, uh, his agent, Don Buchwald, called me. He saw the show last week. This is all true. And, uh, they said they want to start a production company, so I started a production company and I've already got my first show. I'm starting my first show, the pilot.

   8. CPChamath Palihapitiya0:56

      What is the show?

   9. JCJason Calacanis0:57

      Well, here it is. Let me show you. Thanks for asking.

   10. CPChamath Palihapitiya0:59

       (laughs)

   11. JCJason Calacanis1:01

       What you are witnessing is real.

   12. DSDavid Sacks1:03

       (laughs)

   13. JCJason Calacanis1:05

       The besties are not actors.

   14. CPChamath Palihapitiya1:07

       Woo!

   15. JCJason Calacanis1:07

       The cases are real.

   16. DSDavid Sacks1:09

       (laughs)

   17. JCJason Calacanis1:09

       Both parties have agreed to settle their dispute here-

   18. DSDavid Sacks1:13

       (laughs)

   19. CPChamath Palihapitiya1:13

       (laughs)

   20. JCJason Calacanis1:13

       ... in our forum, a J Pal production, the Rain Man's Court.

   21. DSDavid Sacks1:18

       (laughs)

   22. JCJason Calacanis1:18

       Yeah, it's lawfare. On today's show, Chamath guilty of first-degree unbuttoning?

   23. CPChamath Palihapitiya1:24

       (laughs)

   24. DSDavid Sacks1:25

       (laughs)

   25. JCJason Calacanis1:26

       Friedberg accused of plastic perjury?

   26. DSDavid Sacks1:28

       (laughs)

   27. JCJason Calacanis1:29

       Jason appealing his grifting conviction?

   28. CPChamath Palihapitiya1:32

       (laughs)

   29. JCJason Calacanis1:32

       Throw in the book at Thelonious Fauci.

   30. CPChamath Palihapitiya1:35

       (laughs)
2. 2:15 – 18:40

   Why Sacks and Chamath are hosting a Trump fundraiser

   1. CPChamath Palihapitiya2:16

      a lot of news. My inbox is blowing up. I went over to Threads to see what was going on over there and I got absolutely savaged. (laughs)

   2. JCJason Calacanis2:23

      Threads is like all the hall monitors left to one school. Like, if they took the four hall monitors from every school in the country and put them all in one place, that's Threads.

   3. CPChamath Palihapitiya2:32

      What is Threads? (laughs) That's Threads.

   4. JCJason Calacanis2:33

      Threads is like, uh, Zuckerberg's Twitter revenge, killer, that he created. But all the journalists and woke folks went there. And then all the conspiracy theorists took over X and Twitter and, like, freedom of speech in one place and then the hall monitors in the other. But, my lord, the inbound I'm getting, Sacks, on... Uh, apparently you're having a party this Thursday and, uh, a couple of people are coming, a soiree you're having.

   5. CPChamath Palihapitiya2:58

      Well, it's my birthday. It's my birthday party.

   6. JCJason Calacanis2:59

      Oh, yeah. Okay, so there's a little soiree happening. Sacks, enlighten the audience, uh, what are you up to?

   7. DSDavid Sacks3:06

      We're hosting an event for President Trump.

   8. CPChamath Palihapitiya3:09

      (slurps) Oh.

   9. DSDavid Sacks3:10

      (laughs) Did you just spit take-

   10. CPChamath Palihapitiya3:12

       I'm sorry. What did you say? (laughs) You just spit all your water out. (laughs)

   11. JCJason Calacanis3:16

       What?

   12. DSDavid Sacks3:17

       Yeah, we're, we're hosting an event for the once, once and future president.

   13. CPChamath Palihapitiya3:21

       Who's we?

   14. DSDavid Sacks3:22

       45 and... 45 with soon to be 47.

   15. CPChamath Palihapitiya3:25

       Who's we?

   16. DSDavid Sacks3:25

       As I saw from your own polling data that you tweeted this morning, Jason.

   17. JCJason Calacanis3:28

       Oh, God, it's so dark. It's so dark. He's, I mean, the betting markets are just... Basically, they, they seem to have already made their decision. The betting markets, right? And the betting markets, they're not always right, but they were wrong actually about Hillary and Trump, so who knows?

   18. DSDavid Sacks3:43

       And poll- polling historically has underestimated Trump's support because people have been reluctant to say they're supporting him for some reason. So, yeah, things are looking very positive for, for Trump right now. But in any event, we're hosting a, a fundraiser for him.

   19. JCJason Calacanis3:58

       Oh, wow.

   20. DSDavid Sacks3:58

       And, um, he said that he wants to come on the All In pod at some point, so we just need to schedule that.

   21. JCJason Calacanis4:04

       All right.

   22. DSDavid Sacks4:04

       And by the way, we did this for... Let's not forget, we did this for RFK Jr.

   23. JCJason Calacanis4:10

       Yeah.

   24. DSDavid Sacks4:10

       He appeared on the pod. We did a fundraiser for him. We did it for Vivek Ramaswamy.

   25. JCJason Calacanis4:14

       Mm-hmm.

   26. DSDavid Sacks4:14

       Came on the pod, we did a fundraiser for him.

   27. CPChamath Palihapitiya4:16

       We did it for Dean Phillips.

   28. DSDavid Sacks4:18

       Yeah, that's right.

   29. JCJason Calacanis4:19

       Uh, Chris Christie came on.

   30. CPChamath Palihapitiya4:20

       And, and Chris Christie came on, although I don't think we technically did a fundraiser, but we would have.
3. 18:40 – 41:36

   House COVID investigation: findings, cover-up, what's next?

   1. DSDavid Sacks18:40

   2. JCJason Calacanis18:40

      All right, listen. I, I hate to go into another, um, controversial topic, but the four of us were all on fire about this. Apparently, the, uh, COVID-19 investigation is leaning towards a massive cover-up. There's a sub-committee going on right now. The world's not paying attention to this, but I think some savvy people are, especially over o- on X. There's a lot of great journalists who are doing incredible investigative work. Let me just catch everybody up in the audience real quick here and get the best seats involved. Over the past year and a half, a House sub-committee, uh, has been focused on the origins of COVID-19, and they've been investigating the NIH's ties with gain-of-function research in Wuhan. The sub-committee was painted early on as, like, "This is angry Republicans. This is about mask mandates." It was, like, highly politicized. But it's actually turned out to be very effective, bipartisan investigation. We'll get on, we'll get in on that in, in a minute. But so far, most of the investigation is focused on nailing down this timeline of communication between NIH officials and an organization called EcoHealth Alliance. This is a nonprofit that's focused on infectious disease research. Now, these, uh, committee videos are online. We'll play y- play you one in a moment. But through funding in the NIH, the, uh, EcoHealth organization was awarded research grants to various labs. This included the Wuhan Institute of Virology, the, the infamous one. EcoHealth violated terms of its grants by failing to report that gain-of-function experiments were being conducted in Wuhan. EcoHealth was supposed to report any experiment that exhibited characteristics leading to it being 10 times more infectious. But when that happened, it failed to disclose this research to the NIH. And on May 17th, a deputy director of the NIH acknowledged that the agency funded gain-of-function research in Wuhan via EcoHealth. This is the key, because Fauci initially denied this. During his 2021 Senate hearing, Fauci said, quote, "I totally resent the lie you are now propagating," in response to a question from Rand Paul about the lab leak theory. So Fauchi either didn't know or he lied under oath. Let me pause there for a second. There's a lot more to the story. But when you hear this sort of set-up, Friedberg, our sultan of science, in this, uh, initial setup, what rings, uh, concerning to you, true to you? And then we'll go on and we'll play some clips of this testimony, which is pretty wild.

   3. DFDavid Friedberg21:01

      I don't think that pre-the emergence of the pandemic, that there was nefarious motives.

   4. JCJason Calacanis21:09

      In other words, their funding of this was not done to create a pandemic. It might've been a mistake in hindsight, but ...

   5. DFDavid Friedberg21:16

      Yeah, for, for many years, particularly following the original SARS pandemic, there was a lot of conversations around, "How do we get in front of the next pandemic? How do we figure out what's coming, and how do we prepare for it?" And there was a lot of research that was launched to try and resolve that key question. This is like the movie 12 Monkeys. You guys ever see that movie?

   6. JCJason Calacanis21:38

      Oh, it's a fil-

   7. DFDavid Friedberg21:38

      I think at one point. (laughs)

   8. JCJason Calacanis21:39

      Yeah. Sure.

   9. DFDavid Friedberg21:40

      It's like, does the effort to try and stop the problem cause the problem? I think that's for ... From my point of view, there's a very high probability that there was some leak that meant that the work that was going on to try and get in front of the next pandemic and understand what we could do to prepare ourselves, and what vaccines could be developed and so on, actually led to the pandemic. So then when that happens, how do you respond when you're sitting in that seat? That's, that's the key question that I think this committee-

   10. JCJason Calacanis22:08

       Hmm.

   11. DFDavid Friedberg22:08

       ... is uncovering.

   12. DSDavid Sacks22:09

       Do you think there was a cover-up, Friedberg? What is your intuition on that?

   13. DFDavid Friedberg22:12

       Yeah, I think that these guys definitely didn't want ... I, I think what they were trying to do was prevent that from being the focal point, and protect their own asses at the same time.

   14. DSDavid Sacks22:20

       Do you think they should go to jail?

   15. DFDavid Friedberg22:22

       I don't know the extent of it yet. I, it'd be good to get more d- information from this whole thing.

   16. JCJason Calacanis22:26

       Yeah, so let me cue up those next details, 'cause it n-

   17. DFDavid Friedberg22:27

       I will say, this guy that gave testimony last week, where he was, like, deliberately changing the names of people in the email, "Anderson," and he put the dollar sign?

   18. DSDavid Sacks22:35

       Right.

   19. JCJason Calacanis22:35

       Yeah.

   20. DFDavid Friedberg22:35

       So that you couldn't find that email when you did a FOIA search?

   21. DSDavid Sacks22:38

       Right.

   22. DFDavid Friedberg22:38

       He knew what he was doing.

   23. JCJason Calacanis22:39

       He knew what he was doing.

   24. DFDavid Friedberg22:40

       Yes, he-

   25. DSDavid Sacks22:40

       I don't understand how you could say this wasn't nefarious. This whole thing was nefarious from top to bottom.

   26. JCJason Calacanis22:47

       Well, yeah. Let me cue this up here, Sax, and then get your-

   27. DSDavid Sacks22:48

       Why are you exonerating it?

   28. JCJason Calacanis22:50

       Hold on, let me cue it up. All right, so we started to see some, uh, consequences and accountability. Last week, the US Department of Health cut all funding to EcoHealth. In response to the committee's investigation, they disbarred its president, Peter Daszak?

   29. DFDavid Friedberg23:03

       Daszak, yeah.

   30. JCJason Calacanis23:04

       Daszak. And so we don't have direct evidence, to be clear, that the pandemic was the result of a lab leak. (laughs) And, you know, just even saying "the lab leak," you know-
4. 41:36 – 53:04

   The Deep State Problem: unelected bureaucrats running three letter agencies for decades

   1. CPChamath Palihapitiya41:36

      there are examples we know. I'll just point to two. Let's just say the attempted overthrow of the Ukrainian government in 2014. You can go back to Iran-Contra as yet another example. And you can add gain of function research now, which is, again, I'll just go back to when there are these lifelong bureaucrats that believe they're above the law, that there's this sensation that they can pull the levers of power silently behind the scenes because they know better. And then what they're doing, as you guys said, is they are controverting the desires of the people. So whether you like President Obama or not, he's duly elected by the people and when he says this isn't allowed, it shouldn't be allowed.And when you instantiate chaos and wars and all of this other stuff, overthrows in all of these other places that then create all these long-tail effects, they're not done with, really, America's support. They're done by a small group of people who think they know better. And I think that we've created that kind of a problem that needs to get fixed. And so I think that there... This has to be an example where you can make them an example, because otherwise, it will keep happening. And there are other parts of the American bureaucracy where people are in charge of very critical and important decisions, and I suspect 99% of them are good, earnest, honest people doing the right thing for America. But it's just the law of large numbers. There will be one or two, and all it takes is one or two who get drunk with that power. And so unless that there's a check and balance on that dynamic, we'll have more issues of this. And as the world gets more sophisticated and we rely more on experts... I hate to say this, guys, but you have to be more skeptical of experts. As much as you think an expert is an expert, you have to fight the tendency of saying, "I'm gonna abdicate all of my intellect onto you, and you decide."

   2. DSDavid Sacks43:36

      Yeah.

   3. CPChamath Palihapitiya43:37

      I think you have to find a way of just gut-checking. And Sachs said this critical thing. If I was the president of the United States in a pandemic, I didn't need the COVID t- to teach me this example. But if I'm trying to solve a very technical and hard engineering problem, what I always do is I bring a cross-section of people in a room. Typically, some of them have to have disagreeing opinions, and I make them intellectually fight it out.

   4. DSDavid Sacks44:04

      Yep.

   5. CPChamath Palihapitiya44:04

      And my job is to observe. And in that, I apply my judgment. I'm not nearly as smart as them, I'm not nearly technically as trained as them, but that is a process that works. And I'm just questioning, it couldn't have happened here because, as Sachs said, if you basically bury the reputations of the folks that are pushing back, you could never bring them inside the room in the Oval and have a conversation with them and say, "Hey, Jay Bhattacharya, give us the red team version of what you think is happening."

   6. DSDavid Sacks44:31

      Yeah.

   7. CPChamath Palihapitiya44:32

      And that is a real problem.

   8. DSDavid Sacks44:33

      Steel man the argument, yeah.

   9. CPChamath Palihapitiya44:33

      Steel man the opposite side.

   10. DSDavid Sacks44:35

       Let me build on a point Chamath made, which is, I think we have to ask the question, what type of government do we really have? You know, we call ourselves a democracy, but are you a democracy when the elected leaders come and go, and the really powerful bureaucrats running th- the government, running these agencies, stay for decades and decades, and if the president disagrees with their policy, they can just wait them out? Fauci wanted to do gain-of-function research, maybe, by the way, at the behest of DOD, we don't know. Could have been a bioweapon or bio-defense program. There's a lot more to this that we don't even know about yet. In any event, it's clear he was passionately committed to funding gain-of-function research. He just waited for his opportunity and implemented it as well. Victoria Nuland in the State Department, passionately committed to basically bringing Ukraine into NATO and using that to essentially provoke a regime change operation in Russia. Again, she just had to wait for her opportunity to basically keep pushing these policies for decades. These are the people who are really running the- What's the solution then? ... American government.

   11. CPChamath Palihapitiya45:40

       How would you change it?

   12. DSDavid Sacks45:41

       We have to turn these things over, these organizations, or get rid of them.

   13. CPChamath Palihapitiya45:44

       We talk about term limits for politicians. Maybe we actually need term limits for the administrative apparatchik that runs all these critical organizations.

   14. DSDavid Sacks45:52

       Right, it's called the deep state, right? You, you ever hear the expression deep state? Sounds con- conspiratorial. It's not. It's just the permanent bureaucracy. We elect a president, but h- but how many people does the president actually appoint? A couple hundred? You know, 99.9% of the people running the government are there permanently. Well, and then I'll just say here, I wanna give a shout-out to the journalists Katherine Eban and... Uh, Katherine Eban and Emily Kopp. I know that people also have no faith in journalists. These are two journalists I think you could have tremendous faith in and who are gonna win Pulitzers because they've been doggedly pursuing this. And you have to wonder why this is not the top story on the news networks and why this isn't the head of, you know, The New York Times or the, or, or The Washington Post. Like, there needs to be much more coverage of what's going on here. I don't understand why this- Well, you wanna know why? ... isn't what we're talk- Because The New York Times- Yeah, because Trump takes every headline, yeah. I don't think it has anything to do with Trump. I think it's got everything to do with the fact that The New York Times was covering for Fauci. Fauci has been there- Oh, yeah. ... Fauci's been there for decades. He is a major source for The New York Times, just like he was a major funder of grant programs, right? So there's a lot of people who have developed a dependency on Fauci. I mean, everyone, again- Free information. You think access journalism is what's going on here. He gave them access- There's no question that The New York Times- ... they were in his... Yeah. ... was covering for this. The New York Times definitely promoted the idea that anyone pushing the lab leak theory was somehow a conspiracy theorist or a nut. And you have to lay on top of all this, Sachs, it's a political environment, right? They were pushing that whole crazy wet market theory and the- Well, the wet market theory- ... pangolin. (laughs) The pangolin. (laughs) The pangolin. Remember the pangolin?

   15. CPChamath Palihapitiya47:26

       We needed Jon Stewart to dismantle-

   16. DSDavid Sacks47:28

       Yeah.

   17. CPChamath Palihapitiya47:28

       ... the pangolin theory.

   18. DSDavid Sacks47:30

       You know, in relation to that, these wet markets have spread massive viruses and, and, you know, all kinds of things, and they do need to be... There was like a UN report on like, "Hey, we have to upgrade these people-" That's why it was a great cover story. "... have to stop doing live markets." That was a great cover story. I don't know that it was a great cover story. I think it was a logical theory to pursue to the end point of eliminating it, because they... Around Wuhan, there are a lot of these wet markets. It is completely conceivable that a person who was in that lab went to a wet market and it spread via the wet market. This is why we need a full investigation, folks, because all these theories could come together, and there are more cards to turn over, which one of you alluded to. Like, who knows what the, the turn in the river are gonna be here? Like, what did China know? What did our government and China know? Maybe they are making bioweapons. Maybe they're doing even worse stuff that we don't know about. Maybe there's all kinds of rogue programs that are being... That are occurring here. That's why we need to keep digging and digging, the American public.

   19. JCJason Calacanis48:27

       ... must hold these people accountable, and they need to tell us who else was involved. Because if Fauci's involved and this guy's involved, there's other people. I want to hear from everybody.

   20. DSDavid Sacks48:38

       There's many crazy parts of this, but I think maybe the craziest part of the whole thing is that when the pandemic happens and the elected government of the United States, the president needs to pull in the resources to manage a policy response, who do they pull in? Fauci, the guy who created the problem.

   21. JCJason Calacanis48:54

       Yeah.

   22. DSDavid Sacks48:54

       It's kinda like when they have Nuland be our chief diplomat in the State Department, and she's fomented the coup in Kiev in 2014. It's again, these, these bureaucrats are doing the exact opposite of what they're supposed to be doing. They're not protecting public health-

   23. JCJason Calacanis49:08

       They have to take ownership of this and being honest, yes. Hmm.

   24. DSDavid Sacks49:11

       But I think to answer your question, what do we do about it? I think we just gotta clean out the stables here.

   25. JCJason Calacanis49:14

       Yeah.

   26. DSDavid Sacks49:15

       I think we just gotta disband some of these government departments. Why do we have so many? This whole alphabet soup of three-letter agencies. I think Vivek Ramaswamy had the right idea. Let's just-

   27. JCJason Calacanis49:24

       Yeah.

   28. DSDavid Sacks49:24

       ... get rid of a bunch of these things. Start over.

   29. CPChamath Palihapitiya49:26

       Zero-based budget.

   30. JCJason Calacanis49:27

       Absolutely.
5. 53:04 – 1:04:15

   Crypto Corner with Chamath

   1. CPChamath Palihapitiya53:04

      show notes.

   2. JCJason Calacanis53:05

      Since we're in the don't trust anybody and have your own sovereignty and we're in libertarian moment, let's go to our crypto correspondent. It's Crypto Corner with Chamath. (laughs) So it's my, it's part of my production company. I'm now doing Crypto Corner with Chamath. That'll be next week's cold open. (laughs)

   3. CPChamath Palihapitiya53:23

      (laughs) I thought it would be good to talk about crypto for a couple of reasons. One is because we just had the halving at the end of April when this is-

   4. JCJason Calacanis53:32

      Oh, did that happen?

   5. CPChamath Palihapitiya53:33

      The halving is where, just for folks that don't know, the way that Bitcoins are created is by solving these complex mathematical algorithms that take a lot of time and energy and, and money. And when you solve it, you get rewarded with some number of Bitcoin. And roughly every four years, that reward gets cut in half. It's called the halving. And this week, I saw somebody who reminded me all of this, and I just wanna give this guy a proper shout-out. So his name is Wences Casares. And Wences, in Silicon Valley, I would say, really was agent zero of Bitcoin. He was the one in 2010 that introduced it to me. I remember he reminded me of this story actually. We were at Warren's Hummus.

   6. DSDavid Sacks54:15

      (laughs)

   7. CPChamath Palihapitiya54:15

      And he's like, he's Argentinian Gr- he's Argentinian, so I'm gonna try to copy his accent. "Eh, Chamath, uh, you net to buy the Bitcoin." So I heard the story, I fell in love with it. I remember I called my family office, I'm like, "Buy me a million of these things." And he was like, or $1,000,000 worth.And he was like, "Are you crazy?" And I was like, "No, this is just a little appetizer. We'll get to the-"

   8. DSDavid Sacks54:33

      (laughs)

   9. CPChamath Palihapitiya54:34

      "... main, main course." Anyways, he has done a phenomenal job of understanding and proselytizing Bitcoin, and I wanna thank him because he really put me onto this. But he mentioned something to me when I saw him a couple of days ago, which is, "You should really look at the pattern of Bitcoin after a halving." And so I was really curious, and so I had a guy on my team, Quentin, put this together. So Nick, let me just... Let's go to the first page. So why is this interesting? So here's a little Bitcoin price analysis for you guys. So there's been a couple of halving cycles that have happened, and I asked him to go back and look at the price performance one month after a halving, three months, six months, nine months, 12 months, and 18 months after a halving. And what you notice is that there are these moments initially where essentially when you go through a Bitcoin halving, people are sort of reassessing what's happening and they're trying to figure it out. That's sort of what I would say is, happens in the first month and roughly what also happens in the first three months. But then within six months to a year and 18 months of these things, there are these crazy price appreciation cycles that happen. So that's what this page shows, which is, you know, 18 months after the first halving, the Bitcoin price returned 45X. After the second halving, it returned almost 28X. And after this third halving, it returned almost an 8X, which is really incredible returns in such a short period of time. If you go to the next page. And so if you, if you graph that, this is what it starts to show, which is what is this price performance after each of these halving cycles. Now why is that interesting? Well, it's interesting because on top of this halving, which theoretically if history is a guide, we should see some price appreciation. Obviously, the other thing that's happened is we've commercialized Bitcoin, and we talked about this sort of as my big prediction for 2024, which is these ETFs are really going to allow Bitcoin to cross the chasm and have its sort of central key moment, right? And so if you apply the averages, and again these are just averages, they're by no means predictions, okay? So I just wanna qualify that. These are just-

   10. DSDavid Sacks56:52

       Yeah, this is not financial advice.

   11. CPChamath Palihapitiya56:54

       This is not financial advice. These are just guesses.

   12. DSDavid Sacks56:56

       It's just data.

   13. CPChamath Palihapitiya56:57

       We took these and we applied it to the price of Bitcoin. And if you go to the next page, you start to see what could happen if you just take the average of the last few cycles. So 'cause the first cycle was so extreme, and you start to apply-

   14. DSDavid Sacks57:11

       Oh, so you're just doing cycle two and three here, to be clear.

   15. CPChamath Palihapitiya57:13

       Just the averages of cycle two and three, and what you-

   16. DSDavid Sacks57:16

       Yeah.

   17. CPChamath Palihapitiya57:16

       ... start to see is some really meaningful appreciation. And when I talked to Wences about this, how he explained it, which I, which makes a lot of sense to me, is there are a lot of countries that will never look at Bitcoin credibly, even if they support it. The US may be one of those. But there is an increasing body of countries that will become dual currency, and they will look at their local currency, and then they will look at Bitcoin, and they will say-

   18. DSDavid Sacks57:45

       Hm.

   19. CPChamath Palihapitiya57:45

       ... "Both of these two things are needed. One, when you're transacting on a daily basis for random goods and services, and two, when you need to buy a permanent asset that needs to have residual value, you'll use something like BTC." And I think that's a very powerful concept. And if you look at what this price chart could indicate is that if this thing starts to get to these levels of appreciation, it is going-

   20. DSDavid Sacks58:11

       Yeah.

   21. CPChamath Palihapitiya58:11

       ... to completely replace gold and start to become something that has transactional utility for hard assets. And I think if you marry that with this worry that some folks have about dollar debasement, you start to see some really interesting opportunities. So I just thought that this was a interesting thing that he, that he... Here's our disclaimer. Interesting thing-

   22. DSDavid Sacks58:32

       Yeah, yeah.

   23. CPChamath Palihapitiya58:32

       ... that he put me on. I thought I'd share that with you. I'll publish this on Twitter, but that's your crypto corner for the year, folks.

   24. DSDavid Sacks58:38

       I think it's really interesting how the crypto community is getting organized into, uh, basically a lobby to advocate for its interests because they've been so-

   25. CPChamath Palihapitiya58:46

       It's the biggest lobby in America. Did you know that?

   26. DSDavid Sacks58:48

       Yeah, they've been so targeted over the last few years because Gensler and Warren have been on a crusade to basically make crypto illegal or drive it offshore. Well, every action has a equal and opposite reaction. And now the crypto people have basically had a political awakening and realized they have to get involved in the political system.

   27. CPChamath Palihapitiya59:08

       Yeah.

   28. DSDavid Sacks59:08

       Just as a matter of defense, self-defense. And- Shout out SBF. So they're getting- He's, he was a pioneer. Well, not like that. I mean, that guy was a crook. No, I mean, he was dropping money on everybody, yeah. Remember Colin? But he was-

   29. CPChamath Palihapitiya59:19

       Did you guys hear this, did you hear this rumor that-

   30. DSDavid Sacks59:21

       He was doing that, uh, uh, to basically push for regulatory capture. Remember? Yeah. I think it's-
6. 1:04:15 – 1:20:10

   State of SaaS: Salesforce drops 20%, market teetering

   1. JCJason Calacanis1:04:15

      All right, we have a bellwether of sorts here. Salesforce dropped more than 20% after reporting earnings. We should talk about the state of SaaS, software as a service, if you're not in the industry. Salesforce had its worst day in the markets, uh, in nearly 20 years on Thursday, and that's when we taped this. They lost about $40 billion in market cap, or as we say in the industry, two figmas. On Wednesday, Salesforce missed Q1 revenue estimates for the first time since 2006. Revenue was up, 9.1 billion, 11% year over year, but about 40 million below Wall Street expectations. So they're doing great, but Wall Street is concerned for a reason. We'll get into what that is. Net income was 1.5 billion, 7x year over year because they've been doing a lot of cuts over there. Free cash flow was six billion, up 43%. Profits are up huge because r- if you remember, those activist investors came in and, uh, had Benioff really revamp the structure of the business, uh, and the footprint of the business. But guidance for Q2 down. Salesforce projecting 7% growth, relatively low for them. Friedberg, you and I were talking about this. Like, what, what are your thoughts here on what's happening in the markets? And then we, we had the side discussion, which we didn't docket, but I think it's worth bringing up here and dovetailing, which is, it does seem like the consumer, which this is an enterprise story, but the economy is cooling off. Consumers, I think, are running out of money. The YOLO economy is finally, I think, at its end. What does it say to you, Friedberg?

   2. CPChamath Palihapitiya1:05:46

      Well, I think the key question, to your point, is there a macroeconomic reason for a slowdown in their business? They're forecasting for this next fiscal year revenue growth of only 8 to 9%, and for this next quarter, it's basically a flat revenue quarter relative to the past quarter. So for this fiscal year, 38 billion of top-line revenue, nine billion of operating cash flow. And with the market cap coming down by 20%, the stock's at a $200 billion valuation. So it's trading at, you know, call it roughly 20 times their operating cash flow forecast with sub 10% revenue growth. And that's basically where Treasuries trade, right? 'Cause Treasury yields, for a 30-year Treasury, you can get 4.7% today.

   3. JCJason Calacanis1:06:31

      Yeah, I was about to say, almost five.

   4. CPChamath Palihapitiya1:06:33

      You know, that's about 20x, right? So that's about where the multiple is on the Salesforce stock.

   5. DFDavid Friedberg1:06:38

      So I think it really begs the question on, you know, is there a macroeconomic force where the enterprise is spending less because-

   6. JCJason Calacanis1:06:44

      Of course.

   7. DFDavid Friedberg1:06:45

      ... of, you know, a revenue slowdown in the economy, which we saw in the latest GDP report? That's number one that could be driving this and will affect ultimately the multiple for all these enterprise SaaS companies. Or number two, is there a shifting underway in the SaaS business model, that the premium that SaaS companies were able to charge and the pricing model on a per-seat basis and the dollars that they're able to charge per employee or per user, um, is so significant relative to what that enterprise can build themselves now with the commoditization available to them under this new era of AI and the ability to build tools internally, or the ability for competitors to emerge with significantly underpriced alternatives because they can-

   8. JCJason Calacanis1:07:26

      Hm.

   9. DFDavid Friedberg1:07:26

      ... use generative AI to make software that can compete? And then there's this other question, 'cause Salesforce has been leaning in heavily on the generative AI capabilities that they're offering their customers, and it seems like the question is, are enterprises waiting to see the value of that generative AI service capability? Is it worth paying for today? Should I wait and see? Or is it actually indicating that there's a big commoditization and generative AI underway?

   10. JCJason Calacanis1:07:52

       Okay. Yeah.

   11. DFDavid Friedberg1:07:52

       Meaning why do I have to pay Salesforce a bunch of money when I can use some open source third-party tool or some more freely available tool?

   12. JCJason Calacanis1:07:58

       So Chamath, uh, Freyberg presented two options here, one of them macroeconomic slowdown, the other one, hey, software, you know, belt-tightening is happening inside the enterprise, and it's cheaper to make, so maybe we have a- a- a deflationary kinda situation inside companies. I- I- I guess this is adjacent, that last part of his theory, uh, is adjacent to the 8090 mission you're on with your new startup, and maybe this... Is this an or, or an end in your mind, Chamath? Is it both these things?

   13. DFDavid Friedberg1:08:25

       But sorry, before you answer, the third point I made was that generative AI itself-

   14. JCJason Calacanis1:08:29

       Generative AI might... Yes, and the third point?

   15. DFDavid Friedberg1:08:30

       ... it may not be a product line. It may not be enough to charge for, given all the-

   16. JCJason Calacanis1:08:34

       Got it.

   17. DFDavid Friedberg1:08:34

       ... open-source tools out there.

   18. JCJason Calacanis1:08:34

       Yes, and there's a big question mark about the AI new software. Will people pay for it? So Chamath, take those three. What are your thoughts?

   19. CPChamath Palihapitiya1:08:41

       I think that if you look at what happened before, we had a cycle where very large monolithic software was replaced by these SaaS vendors, and Salesforce led that charge and they- they led the, in many ways, the definition of the cloud. So that was amazing. That was this one big cycle. And before that, that monolithic... Those monolithic software vendors were replacing, like, mainframes and very archaic stuff. This is sort of this third disruptive cycle. We're gonna go through a process of ripping and replacing these legacy products. And so gen AI is just a- an enablement layer that allows you to deliver functionality to people. And I think what you're gonna find is that it allows you to deliver that functionality at much, much cheaper. To your point, that's the whole point of 8090, and we... You know, we always joke, "Was Salesforce gonna get 8090?" Yeah, because you can deliver 80% of the features at a 90% discount pretty easily today. And what you can't deliver today will get much, much easier in a year, in two years, in three years, for sure in 10 years. So I think what the market is voting with their dollars is that these large, lumpy, monolithic software companies that need big, 50, $100 million customers, they're not gonna find them soon because those customers will realize that you could get, you know, what Freyberg said, what you need for 10 million or five million or one million or 500,000 and, in some cases, free. And so the cost structure of your organization makes no sense, and so you're gonna have to go through this very complicated cycle of recycling, you know, the business model, which unfortunately will mean tons of layoffs. And that's not a today thing, but over these next five and 10 years, that's probably what's gonna happen. And it doesn't mean Salesforce is a bad company, it's just that it is on the wrong side of the life cycle. And the odds are overwhelmingly such that a bunch of small companies will flood this opportunity and provide s- cheaper, smaller, more flexible capabilities.

   20. JCJason Calacanis1:10:54

       Sacks, obviously, you made your bones in the SaaS business over the last two decades, at least. What are your thoughts here on the challenges? I just interviewed Owen McCabe from Intercom, and he says he thinks the seat model is gonna change, and obviously, if there's less people at companies, (laughs) there's less seats, and that may be a headwind that you just can't win against, so maybe a consumption model has to happen or a different pricing model. But what are your thoughts on what's happening at Salesforce? And then open the aperture there and tell us what you think is gonna happen in terms of how corporations either decide to make that, you know, build-or-buy decision.

   21. DSDavid Sacks1:11:31

       Well, I think it's pretty amazing that Salesforce lost something like 40 billion of market cap because of a revenue miss of 40 million. You know, it's amazing how these relatively small, in percentage terms, misses in revenue or earnings drive such huge changes in- in market cap.

   22. JCJason Calacanis1:11:48

       That's quite a ripple, isn't it?

   23. DSDavid Sacks1:11:50

       Yeah. I mean, look, my view is that... I don't have a strong view about the stock, but my sense is it's probably a buying opportunity. I mean, I think Salesforce is still a great company. Marc Benioff's a great CEO. He's always positioned the company to chase after whatever the current thing is, so obviously, he was one of the first to realize that s- software was headed to the cloud, evangelize for the cloud. Then when the social networking revolution happened, he launched Chatter, which was a competitor to- to my product, Yammer, back then, but he was ahead of the curve on- on social in the enterprise. Then it was big data and they launched Einstein. Now, they've got AI and they're gonna be doing a bunch of different things there. So my guess is he's gonna figure out how to take advantage of this- this AI trend for the company. They're not gonna miss it. They're not gonna get caught totally flat-footed.So you're like, I don't have a, a super strong point of view on it as an investment, but-

   24. JCJason Calacanis1:12:51

       What about the bigger picture?

   25. DSDavid Sacks1:12:52

       ... I still think it's a good company.

   26. JCJason Calacanis1:12:53

       Open the aperture there, with the SaaS first-

   27. DSDavid Sacks1:12:55

       Well, I think the bigger picture-

   28. JCJason Calacanis1:12:56

       ... and pricing and how many people work at these companies, and then if the per-seat model is the model, and then people are gonna have less humans working at companies, uh, and do more with less, how, what does that mean for SaaS at large?

   29. DSDavid Sacks1:13:07

       I'm honestly not worried about the per-seat model. I mean, the point of a pricing plan should be to align revenue expansion with ROI, meaning the more value that a customer gets from your product, the more they're willing to pay. And you just need some proxy for measuring that. Seats are a good proxy. It's a good way to measure how much value the customer's getting out of your product, because the more seats they're buying, the more value they must be getting. Yes, you could do it some other way. You could basically meter data usage. You could meter API usage. Sure. Those models will work for other kinds of companies, but I don't think there's gonna be a huge disruption to the seat model, is my sense. Look, I think the bigger issue here is that their forecast was soft, right? They are forecasting, what, sub 10% revenue growth.

   30. JCJason Calacanis1:13:59

       Yeah. They're going to-

Episode duration: 1:47:41